CONSULTING AGREEMENT
Exhibit 10.1
This Consulting Agreement (“Agreement”), dated as of May 10, 2006, is between Ace
Cash Express, Inc., a Texas corporation (the “Company”), and Xxxxxxx X. Xxxxxx, an
individual resident of the State of Texas (“Xxxxxx”). The Company and Xxxxxx are
hereinafter referred to as the “Parties.”
WHEREAS, upon the Effective Date (as defined in paragraph 1 below), Xxxxxx will cease to be
the Chairman of the Board of Directors of the Company and the Company wishes to obtain Xxxxxx’x
services as a consultant, upon the Company’s request, regarding various aspects of the Company’s
business with which Xxxxxx is familiar as a result of his directorship and previous employment with
the Company;
WHEREAS, the Company wishes to obtain Xxxxxx’x covenants not to engage in certain activities
that are competitive with the Company’s business or that interfere with the Company’s business and
relationships; and
NOW, THEREFORE, in consideration of the foregoing and the covenants set forth in this
Agreement, the Parties hereby agree as follows:
1. Consulting Services: Xxxxxx shall, for the six consecutive years on and after the
Effective Date, consult with the Company and its agents (including its attorneys), and provide to
the Company and its agents such assistance, as the Company’s Chief Executive Officer may reasonably
request from time to time in connection with or relating to, without limitation, the Company’s
operations, the Company’s financial results and condition, the Company’s financing alternatives,
strategic acquisitions and divestitures by the Company, certain of the Company’s third-party
relationships, and regulatory proceedings or issues or material litigation involving the Company.
“Effective Date” shall mean the date of termination of Xxxxxx’x directorship with the
Company, either by the Company without cause or by Xxxxxx for any reason. Xxxxxx’x duties will
necessarily change as a result of the evolving nature of the Company’s business and the resulting
issues and circumstances affecting the Company and its business.
The Company’s payments of amounts and provision of benefits to Xxxxxx, as described in
paragraph 5 below, shall constitute compensation to Xxxxxx for all of these consulting services.
This paragraph shall not apply, however, to any actions that Xxxxxx takes or must take as a
separate party to any of such litigation or regulatory proceedings in which the Company is also
involved.
2. Trade Secrets: The Parties acknowledge and agree that, during the consulting
relationship hereunder, the Company will provide and make available to Xxxxxx, and Xxxxxx will have
access to and become familiar with, various trade secrets and proprietary and confidential
information of the Company, the Company’s direct and indirect subsidiaries (the
“Subsidiaries”), and their affiliates, and which Xxxxxx did not have previous knowledge or
access before the Effective Date, including processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing techniques, customer
lists, identity of employees, methods of doing business, and other confidential information
(collectively, “Trade Secrets”) which are owned by the Company, the Subsidiaries, and/or
their affiliates and regularly used in the operation of their business, and as to which the
Company, the Subsidiaries, and/or their affiliates take precautions to prevent dissemination to
persons other than certain directors, officers, partners, managers, members, and employees. Xxxxxx
acknowledges and agrees that the Trade Secrets (a) are secret and not known in the industry; (b)
give the Company, the Subsidiaries, and/or their affiliates an advantage over competitors who do
not know or use the Trade Secrets; (c) are of such value and nature as to make it reasonable and
necessary to protect and preserve the confidentiality and secrecy of the Trade Secrets; and (d) are
valuable and special and unique assets of the Company, the Subsidiaries, and/or their affiliates,
the disclosure of which could cause substantial injury and loss of profits and goodwill to the
Company, the Subsidiaries and/or their affiliates. Xxxxxx may not use in any way or disclose any
of the Trade Secrets, directly or indirectly, during the consulting relationship or at any time
thereafter, except (i) as required in connection with a judicial or administrative proceeding or in
connection with rendering the consulting services described in paragraph 1 above, or (ii) if the
information becomes public knowledge other than as a result of an unauthorized disclosure by
Xxxxxx. All files, records, documents, information, data, and similar items relating to the
business of the Company, whether prepared by Xxxxxx or otherwise coming into his possession, will
remain the exclusive property of the Company, and in any event must be promptly delivered to the
Company upon the expiration or termination of the consulting relationship under this Agreement.
Xxxxxx agrees upon his receipt of any subpoena, process, or other request to produce or divulge,
directly or indirectly, any Trade Secrets to any entity, agency, tribunal, or person, Xxxxxx shall
timely notify and promptly hand deliver a copy of the subpoena, process or other request to the
Company. For this purpose, Xxxxxx irrevocably nominates and appoints the Company (including any
attorney retained by the Company), as his true and lawful attorney-in-fact, to act in Xxxxxx’x
name, place and stead to perform any act that Xxxxxx might perform to defend and protect against
any disclosure of any Trade Secret.
3. Noncompetition Covenant:
| (a) | During the maximum 72-month term of the consulting relationship hereunder (the “Restricted Period”), Xxxxxx shall not, anywhere within the Restricted Territory (as defined below), directly or indirectly engage in any activity which, or any activity for any enterprise or entity a material part of the business of which, is a Competing Business (as defined below). The activity prohibited by the preceding sentence includes any kind of ownership (other than ownership of less than 1% of a class of publicly traded securities) in or of, or acting as a director, officer, agent, employee, or consultant of or for, any enterprise or entity referred to in the preceding sentence. For the purpose of this paragraph 3(a), the “Restricted Territory” means, collectively, Dallas County, Texas; each county (or equivalent subdivision) of any state, district, or territory of the United States of America in which the Company or any of the Subsidiaries has any retail location; and each county (or equivalent territory) adjacent to any of the preceding counties (or equivalent territories). Also for the purpose of this paragraph 3(a), “Competing Business” means any business that is competitive with (i) any business conducted by the Company or any of its Subsidiaries as of the Effective Date, (ii) any business that the Company or any of its Subsidiaries plans, as of the Effective |
| Date, to conduct in the future if Xxxxxx has been involved before the Effective Date in formulating or implementing those plans, and (iii) any business conducted, or any plan to conduct business, by the Company or any of its Subsidiaries, in addition to or different than any business or any plan described in either of the two preceding clauses, during the consulting relationship hereunder if Xxxxxx renders any consulting time or effort for the Company regarding that additional or different business or plan. Further, for the purpose of this paragraph 3(a), “indirectly” means the performance of services by any business or entity in which Xxxxxx either owns or possesses more than a 1% interest in profits, losses, or capital or is a partner, or for which Xxxxxx acts as officer, director, agent, or representative, or to which Xxxxxx provides consulting or advisory services. | |||
| (b) | Xxxxxx acknowledges and agrees that, in light of the Company’s covenants herein and other applicable circumstances, the restrictions imposed in this paragraph 3 are reasonable, are prompted by the Company’s desire to protect its legitimate business interests (including the Trade Secrets), and will not be unduly burdensome to him. |
4. Nonsolicitation Covenants:
| (a) | During the Restricted Period, Xxxxxx shall not directly or indirectly solicit, divert, or appropriate to or for any Competing Business (as defined in paragraph 3(a) above) the financial services business of any customer of the Company, or in any manner solicit or induce any customer, franchisee, supplier, or other person with a business relationship with the Company, and with whom Xxxxxx has had material contact or knowledge,to cease that business relationship with the Company or to refuse in the future to conduct business with the Company. In this paragraph 4, “indirectly” is used as defined in paragraph 3(a) above. | ||
| (b) | During the Restricted Period, Xxxxxx shall not directly or indirectly solicit, recruit, or employ any employee or regular consultant of the Company, or in any other manner attempt to induce any employee or regular consultant of the Company to leave the employ of the Company or cease his or her consulting or other business relationship with the Company, unless such person has not been employed by or provided consulting services to the Company at least 12 months before any solicitation, recruitment, or employment by Xxxxxx or any entity or enterprise with which Xxxxxx is in any way associated. | ||
| (c) | Xxxxxx acknowledges and agrees that, in light of the Company’s covenants herein and other applicable circumstances, the restrictions imposed in this paragraph 4 are reasonable, are prompted by the Company’s desire to protect its legitimate business interests (including the Trade Secrets), and will not be unduly burdensome to him. |
5. Payments and Benefits to Xxxxxx: In consideration for Xxxxxx’x consulting services
and his compliance with or performance of all of his other covenants herein:
| (a) | The Company shall pay Xxxxxx during the term of the consulting relationship, by checks drawn on one or more accounts of the Company, 72 monthly installments of the Monthly Payment (as defined below), each on or before the first day of each calendar month, beginning on the Effective Date. “Monthly Payment” shall mean (i) three times (3x) the sum of (1) the total value of cash compensation paid to Xxxxxx in the fiscal year prior to Xxxxxx’x termination and (2) the total value of equity grants to Xxxxxx in the fiscal year prior to Xxxxxx’x termination, (ii) divided by 72. It is a condition to Xxxxxx’x receipt of payments made under this paragraph 5(a) that he shall have, upon the Effective Date, executed and delivered the Directorship Separation Agreement in substantially the form attached as Exhibit A hereto. | ||
| (b) | The Company shall reimburse Xxxxxx his reasonable out-of-pocket expenses incurred in rendering the consulting services described in paragraph 1 above in accordance with the Company’s reimbursement policies and procedures in effect at the time. | ||
| (c) | The Company shall provide or arrange to provide benefits to Xxxxxx and his Dependent (as defined below) under the Benefit Plans (as defined below), at the Company’s sole expense, during the consulting relationship and during the entire lifetime of Xxxxxx and his Dependent after either the expiration of the consulting relationship or the termination of the consulting relationship by Xxxxxx under paragraph 7(c) below. Notwithstanding the above, to the extent that (i) the Company cannot provide Xxxxxx or his Dependent, or both, coverage under any of the Benefit Plans for their lifetimes, for whatever reason, or (ii) coverage under one or more of the Benefit Plans would result in adverse income taxation and/or penalties imposed on Xxxxxx or his Dependent under Section 409A of the Internal Revenue Code of 1986 (the “Code”), as amended, as determined by the Company’s Board of Directors in good faith following consultation with legal counsel, the Company shall pay Xxxxxx (or his Dependent if Xxxxxx predeceases Dependent) an amount that is the actuarial equivalent of the present value of such forgone coverage that would be provided under the Benefit Plan as if Xxxxxx and his Dependent were participants for their lifetimes, as determined by an actuary who is designated as a Fellow of the Society of Actuaries and who is a partner or otherwise employed by a professional actuarial services firm with at least $100 million in annual revenue, appointed by the Company and consented to by Xxxxxx, which consent will not be unreasonably withheld, directly in a cash lump sum payment; provided further that if the provision of the coverage or benefits, or lump sum in lieu thereof, results in an excise tax payable by Xxxxxx under Code Section 409A, the Company shall have no liability with respect to such penalty amount. Furthermore, in the event that the provision of coverage under the Benefit Plans is not subject to Code Section 409A based on applicable authoritative guidance at the time of either the expiration of the consulting relationship or the termination of the consulting relationship by Xxxxxx under paragraph 7(c) below, and the election between receiving (i) such coverage or (ii) a cash lump sum equivalent payment would not cause adverse taxation or penalties to Xxxxxx under Section 409A of the Code, as determined by the |
| Company’s Board of Directors in good faith following consultation with legal counsel, Xxxxxx will have the right, in his discretion, to elect whether to receive a cash lump sum equivalent payment in lieu of such coverage. For purposes of this paragraph, “Dependent” means Xxxx X. Xxxxxx so long as she remains a lawful spouse or dependent of Xxxxxx for federal income tax purposes or is Xxxxxx’x lawful spouse or dependent for federal income tax purposes immediately prior to Xxxxxx’x death. “Benefit Plans” means welfare benefits that are no less favorable than the health, dental, and similar benefit plans available generally to the Company’s employees that the Company maintains during the consulting relationship and any time thereafter. |
6. Independent Contractor; Tax Consequences of Payments and Benefits:
| (a) | The consulting services rendered by Xxxxxx under this Agreement shall be provided as an independent contractor to the Company, and nothing in this Agreement creates or shall be deemed to create the relationship of partners, joint venturers, employer-employee, or principal-agent between the Parties. Xxxxxx shall have no authority, without the prior written consent of an executive officer of the Company, to (i) create any obligation or responsibility on the part of the Company, (ii) legally bind or obligate the Company in any other manner, or (iii) supervise or direct any of the Company’s employees. | ||
| (b) | The Company shall not withhold taxes or FICA from any of the payments and benefits described in paragraph 5 above or report those items as income to Xxxxxx, except as required by law. Xxxxxx shall be responsible for filing all necessary tax returns and remitting amounts due to the proper taxing authorities for any federal, state, and local tax (including social security tax) owed by him with respect to the payments and benefits made to him by the Company hereunder. |
7. Term and Termination of Consulting Relationship:
| (a) | The term of the consulting relationship expressed in this Agreement shall commence on the Effective Date and continue until, and shall expire upon (and including), the day preceding the sixth anniversary of the Effective Date, unless the consulting relationship is sooner terminated in accordance with paragraph 7(b) or paragraph 7(c) below. | ||
| (b) | The Company may, upon written notice to Xxxxxx, terminate the consulting relationship upon the Company’s determination that (i) Xxxxxx has refused or willfully and intentionally failed to render the consulting services to the Company described in paragraph 1 above or has otherwise breached this Agreement to any material extent, and if such refusal, failure, or breach is curable or remediable, such refusal, failure, or breach continues without cure or remedy after thirty (30) days’ notice to Xxxxxx by the Company, or (ii) Xxxxxx is unable to continue to render consulting services because of any physical or mental injury, illness, or |
| disability that extends for at least three consecutive months. The consulting relationship in this Agreement shall also terminate upon Xxxxxx’x death. | |||
| (c) | Xxxxxx may, upon written notice to the Company, terminate the consulting relationship upon any failure by the Company to make any of the payments or provide any of the benefits described in paragraph 5 above that continues, without cure or remedy, after thirty (30) days’ notice of failure to the Company by Xxxxxx. | ||
| (d) | In the event of the termination of the consulting relationship by the Company other than pursuant to paragraph 7(b) above or in the event of termination by Hemming under paragraph 7(c) above, Xxxxxx shall be entitled to all amounts payable and benefits to be provided to him under paragraph 5 above through the calendar month in which the termination is effective. Except for (i) such amounts, (ii) the benefits to be provided under paragraph 5(c) above during Xxxxxx’x lifetime after the expiration or the termination of the consulting relationship described in that paragraph, and (iii) as provided in paragraph 7(e) below, the Company shall have no further obligation to pay any amount or provide any other benefit under this Agreement. Upon Xxxxxx’x death, any amount that may be due to him under this Agreement shall be paid to his administrators, heirs, legatees, or personal representatives, as may be appropriate. | ||
| (e) | If the consulting relationship is terminated under clause (ii) of paragraph 7(b) above or because of Xxxxxx’x death, the Company shall continue to pay the remaining monthly installments payable to Xxxxxx under paragraph 5(a) above in accordance with that paragraph. Nevertheless, if Xxxxxx should breach or violate any of his covenants in paragraphs 2, 3, and 4 above at any time during the Restricted Period, Xxxxxx shall no longer be entitled to any of the monthly installments that would have been payable to him, or to any of the benefits to be provided to him under paragraph 5(c) above, for or after the month during which such breach or violation occurred. | ||
| (f) | The respective rights and obligations of the Parties under this Agreement shall survive the expiration or termination of the consulting relationship to the extent necessary to give full effect to those rights and obligations. Without limiting the generality of the preceding sentence, the respective rights and obligations of the Parties under (i) paragraphs 2, 3, and 4 above, (ii) if applicable, and except as otherwise provided in paragraph 7(e) above, under paragraph 5(c) above, and (iii) if applicable, under paragraph 7(e) above, shall survive the expiration or termination of the consulting relationship. A Party’s exercise of its or his right to terminate the consulting relationship shall not be that Party’s exclusive right or remedy in the event of the other Party’s failure to perform or breach of its obligations under this Agreement. Further, none of the remedies provided above in this paragraph 7 for any breach or violation of any of Xxxxxx’x covenants in paragraphs 2, 3, and 4 above shall be an exclusive remedy. |
8. Change in Control: In the event of a Change in Control (as defined in Exhibit B to
this Agreement), the Company shall require any successor to all or substantially all of the
Company’s business or assets to expressly assume and agree to perform the Company’s obligations
under this Agreement to make the payments as and when due under paragraph 5 above to the same
extent, and in the same manner, as the Company would be required to perform if no such Change in
Control had occurred. This Agreement shall be binding upon, and inure to the benefit of, any
successor to the Company.
9. Assignment: This Agreement is personal to Xxxxxx, and he may not assign or
delegate any of his rights or obligations hereunder without the Company’s prior written consent.
The Company may assign or delegate its rights and obligations hereunder to any successor or
successors to all or substantially all of the business and assets of the Company or to any entity
that controls, is controlled by, or is under common control with the Company so long as that entity
is capable of performing the obligations of the Company under this Agreement. Subject to the
foregoing, the rights and obligations under this Agreement shall inure to the benefit of, and shall
be binding upon, the heirs, legatees, successors, representatives, and permitted assigns of the
respective Parties. The Dependent shall not be a third-party beneficiary of, or entitled to
enforce any obligations under, this Agreement.
10. Severability and Reformation: The Parties intend all provisions of this Agreement
to be enforced to the fullest extent permitted by law. If, however, any provision of this
Agreement is held to be illegal, invalid, or unenforceable under any present or future law, such
provision shall be fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof; this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision were never a part
hereof; the remaining provisions of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provision or by its severance; and, in
lieu of such illegal, invalid, or unenforceable provision, there shall be added as a part of this
Agreement a provision as similar in its terms to such illegal, invalid, or unenforceable provision
as may be possible and be legal, valid, and enforceable. Without limiting the generality of the
preceding sentence, if a court of competent jurisdiction determines that the scope of any
restriction in paragraphs 3 and 4 above is too broad to be enforced as written, the Parties intend
that the court reform the restriction to such narrower scope as it determines to be reasonable and
enforceable.
11. Notices: Any notice or other communication to be given under this Agreement by
one Party to the other must be in writing and must be (a) personally delivered, (b) mailed by
registered or certified mail, postage prepaid with return receipt requested, (c) delivered by a
reputable courier service, or (d) transmitted by facsimile, in any event to the address or
facsimile number set forth below (or to such other address or facsimile number as may have been
designated by either or both of the Parties from time to time in accordance with this paragraph
11):
If to the Company:
|
Ace Cash Express, Inc. | |
| 0000 Xxxxxxxx Xxxxx | ||
| Xxxxx 000 |
| Xxxxxx, Xxxxx 00000 | ||
| Attention: Chief Executive Officer | ||
| Facsimile Number: (000) 000-0000 | ||
If to Xxxxxx:
|
Xx. Xxxxxxx X. Xxxxxx | |
| 0000 Xxxx Xxxxx Xxxxxxx | ||
| Xxxxx 000 | ||
| Xxxxx, XX 00000 | ||
| Facsimile Number: (000) 000-0000 |
Any notice or other communication delivered personally or by courier service shall be deemed given
and received as of actual receipt. Any notice or other communication mailed as described above
shall be deemed given and received three business days after mailing or upon actual receipt,
whichever is earlier. Any notice or other communication transmitted by facsimile shall be deemed
given and received upon receipt of the transmission confirmation by the sender.
12. Amendments and Waivers: No amendment or modification of this Agreement will be
valid or binding upon the Parties unless it is in writing and signed by both of the Parties. No
waiver of any term or condition of this Agreement, or of any performance or nonperformance of this
Agreement, shall be binding unless the waiver is in writing and signed by the Party against which
the waiver is to be enforced. Any waiver of any breach of any provision of this Agreement will not
operate or be construed as a waiver of any other or any subsequent breach.
13. Certain Defined Terms: As used in this Agreement, (a) “include” and
“including” do not denote or imply any limitation, (b) “business day” means any
Monday through Friday other than any such day on which the executive offices of the Company are
closed, and (c) “herein,” “hereof,” “hereunder,” and similar terms are
references to this Agreement as a whole and not to any particular provision of this Agreement.
14. Governing Law and Venue: This Agreement shall be governed by, enforced under, and
construed in accordance with the laws of the State of Texas, except only to the extent preempted by
federal law. Venue for any action or proceeding relating to this Agreement or the consulting
relationship hereunder shall lie exclusively in courts in Dallas County, Texas.
15. Entire Agreement: This Agreement (with Exhibits A and B hereto) contains the
entire agreement of the Parties as to the subject matter hereof and supersedes all prior agreements
and understandings, whether oral or written, between the Parties with respect to the subject matter
hereof. Exhibits A and B are integral parts of this Agreement.
16. Statement of Understanding: By executing this Agreement, Xxxxxx acknowledges that
(a) he has consulted with, or has had sufficient opportunity to consult with, an attorney of his
own choosing regarding the terms of this Agreement; (b) he has read this Agreement and fully
understands its terms and their import; (c) the consideration provided for herein is good and
valuable; and (d) he is entering into this Agreement voluntarily, of his own free will, and without
any coercion, undue influence, threat, or intimidation of any kind or type whatsoever.
[Signature Page Follows]
EXECUTED this 10th day of May, 2006.
| /s/ XXXXXXX X. XXXXXX | ||||
| XXXXXXX X. XXXXXX | ||||
| ACE CASH EXPRESS, INC. |
||||
| By: | /s/ XXXXXX X. XXXXX | |||
| Xxxxxx X. Xxxxx | ||||
| Senior Vice President and General Counsel | ||||
Exhibit A to Consulting Agreement
DIRECTORSHIP SEPARATION AGREEMENT
This Directorship Separation Agreement (“Agreement”), dated as of , is between
Ace Cash Express, Inc., a Texas corporation (the “Company”), and Xxxxxxx X. Xxxxxx, an
individual resident of the State of Texas (“Xxxxxx”). The Company and Xxxxxx are
hereinafter collectively referred to as the “Parties.”
WHEREAS, Xxxxxx has previously served as the Chairman of the Board of Directors of the Company
(the “Directorship”);
WHEREAS, Xxxxxx is ceasing his Directorship with the Company on the date of this Agreement
(the “Separation Date”);
WHEREAS, the Parties desire to settle fully and finally, in the manner set forth herein, all
differences between them which have arisen, or which may arise, prior to, or at the time of, the
execution of this Agreement, including (without limitation) any and all claims and controversies
arising out of the Directorship, and the cessation thereof;
NOW, THEREFORE, in consideration of the foregoing and the covenants set forth in this
Agreement, the Parties hereby agree as follows:
1. Cessation of Directorship: On the Separation Date, Xxxxxx resigns from, and
ceases, his Directorship with the Company.
2. General Releases and Covenants Not to Xxx:
| (a) | Xxxxxx, for himself and on behalf of his agents, attorneys-in-fact, heirs, assigns, successors, executors, and administrators, IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS AND FOREVER DISCHARGES the Company and its current and former parent, subsidiary, affiliated, and related corporations, firms, associations, partnerships, and other entities (including, without limitation, the Subsidiaries), their successors and assigns, and the current and former owners, shareholders, directors, officers, partners, managers, members, employees, agents, attorneys, representatives, and insurers of such corporations, firms, associations, partnerships, and entitles, and their guardians, successors, assigns, heirs, executors, and administrators (collectively, “Company Releasees”) from any and all claims, liabilities, obligations, agreements, damages, causes of action, costs, losses, and attorneys’ fees and expenses whatsoever, whether known or unknown, whether or not connected with or related to the Directorship or the cessation of that Directorship, including (without limitation) any dispute, claim, charge, or cause of action arising under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101, et seq., the Texas Commission on Human Rights Act, Tex. Labor Code § |
| 21.001, et seq., the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq., the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq., and any other municipal, local, state, or federal law, common or statutory, which may have arisen, or which may arise, prior to or at the time of the execution of this Agreement. | |||
| (b) | The Company, for itself and on behalf of its agents, attorneys-in-fact, assigns, and successors and the Subsidiaries and their respective agents, attorneys-in-fact, assigns, and successors, IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS AND FOREVER DISCHARGES Xxxxxx and his agents, attorneys-in-fact, guardians, successors, assigns, heirs, executors, and administrators (collectively, “Xxxxxx Releasees”) from any and all claims, liabilities, obligations, agreements, causes of action, costs, losses, damages, and attorneys’ fees and expenses whatsoever, whether known or unknown, connected with or related to the Directorship or the cessation of that Directorship which may have arisen, or which may arise, prior to or at the time of the execution of this Agreement; excluding from the foregoing release, however, any claim that the Company may hereafter have arising from or relating to any third-party claims made against the Company because of any actions taken by Xxxxxx, or any commitments or representations made by Xxxxxx, that violated any of Xxxxxx’x fiduciary obligations to the Company. | ||
| (c) | Each of the Parties acknowledges and agrees that it or he is expressly releasing all claims known and suspected as well as all those unknown or not suspected and that its or his release includes and contemplates the extinguishment of all claims under any and all applicable laws. | ||
| (d) | Xxxxxx also COVENANTS NOT TO XXX, OR OTHERWISE PARTICIPATE IN ANY ACTION OR CLASS ACTION against, any of the Company Releasees based upon any of the claims released in paragraph 2(a) above. | ||
| (e) | The Company also COVENANTS NOT TO XXX, OR OTHERWISE PARTICIPATE IN ACTION OR CLASS ACTION against, any of the Xxxxxx Releasees based upon any of the claims released in paragraph 2(b) above. |
3. Revocation: Xxxxxx may revoke this Agreement by written notice to the Company
within seven days after his execution hereof (the “Revocation Period”). Xxxxxx agrees that
he will not receive the payments and benefits provided by this Agreement if he revokes this
Agreement. Xxxxxx also acknowledges and agrees that if written notice of revocation of this
Agreement has not been received by the Company before the expiration of the Revocation Period, he
will have forever waived his right to revoke this Agreement, and this Agreement shall thereupon and
thereafter be enforceable.
4. Non-Admission: Xxxxxx acknowledges and agrees that by entering into this Agreement,
the Company does not admit, but specifically denies, any violation of any local, state, or federal
law.
5. Return of Company Property: Xxxxxx agrees that he shall return all property
belonging to the Company or any of the Subsidiaries in his possession, custody, or control on, or
as soon as practicable after, the Separation Date.
6. Mutual Non-Disparagement: Xxxxxx, solely on behalf of himself and his attorneys,
and the Company, solely on behalf of its officers, directors, partners, managers, members,
employees, agents, and attorneys who are managing agents with actual authority to speak for the
Company, with regard to Xxxxxx and his Directorship with the Company and his service to the
Subsidiaries, expressly acknowledge, agree, and covenant that they will not make any statements,
comments, or communications that could constitute disparagement of one another or that may be
considered to be derogatory or detrimental to the good name or business reputation of one another;
provided, however, that the terms of this paragraph shall not apply to communications between
Xxxxxx and his spouse, mental health professional, clergy, or attorneys, or between the Company and
its advisors and attorneys, to the extent (in any such case) that such communications are subject
to a claim of privilege existing under common law, statute, or rule of procedure. Where
applicable, this mutual non-disparagement covenant applies to any public or private statements,
comments, or communications in any form, whether oral, written, or electronic. The Parties further
agree that they will not in any way solicit any such statements, comments, or communications.
7. Payments and Benefits to Xxxxxx: In consideration for all of Xxxxxx’x covenants
herein:
| (a) | The Company shall pay Xxxxxx, upon expiration of the Revocation Period (if this Agreement has not been revoked by Xxxxxx), $1,000. Such amount shall be paid by check drawn on an account of the Company. | ||
| (b) | The Company shall provide Xxxxxx, as a former director of the Company and, if applicable, director of certain of the Subsidiaries, rights to indemnification under the applicable corporate documents of the Company and the Subsidiaries and coverage under any directors’ and officers’ insurance policy maintained by the Company for itself and the Subsidiaries. | ||
| (c) | The Company shall accelerate, upon the expiration of the Revocation Period, the vesting of all outstanding and unvested options to purchase shares of the Company’s Common Stock granted to Xxxxxx under the Company’s applicable stock incentive plans and held by him as of the Separation Date. The Company shall also release, upon expiration of the Revocation Period, the forfeiture restrictions on all shares of Common Stock granted to Xxxxxx as restricted stock under the Company’s applicable stock incentive plan and held by him as of the Separation Date. Each existing option agreement and restricted stock agreement between the Company and Xxxxxx regarding those outstanding options or shares of restricted stock, as applicable, shall be deemed amended by the preceding sentence. | ||
| (d) | The Company shall afford Xxxxxx three months after the Separation Date to exercise his vested options to purchase shares of the Company’s Common Stock |
| under the Company’s applicable stock incentive plans. The Company shall cooperate with Xxxxxx in the exercise of those options that he chooses to exercise (in accordance with the terms of the documents governing those options). |
8. Tax Consequences of Payments: The Parties acknowledge and agree that the Company
shall not withhold taxes or FICA from any of the payments and benefits described in paragraph 7
above and shall only report those proceeds as income as required by law. Xxxxxx, in consultation
with his tax advisor, shall determine issues respecting the tax consequences of these payments.
9. No Effect on Other Agreements: This Agreement does not affect or supersede any of
the Parties’ respective post-directorship covenants or obligations expressed or referred to in the
Consulting Agreement between the Parties, which shall continue to be effective.
10. Governing Law and Venue: This Agreement shall be governed by, enforced under, and
construed in accordance with the laws of the State of Texas, except only to the extent preempted by
federal law. Venue for any action or proceeding relating to this Agreement or the consulting
relationship hereunder shall lie exclusively in courts in Dallas County, Texas.
11. Statement of Understanding: By executing this Agreement, Xxxxxx acknowledges that
(a) he has had at least 21 days to consider the terms of this Agreement and has considered its
terms for that period of time or has knowingly and voluntarily waived his right to do so; (b) he
has consulted with, or has had sufficient opportunity to consult with, an attorney of his own
choosing regarding the terms of this Agreement; (c) he has read this Agreement and fully
understands its terms and their import; (d) except as provided by this Agreement, he has no
contractual right or claim to the benefits described herein; (e) the consideration provided for
herein is good and valuable; and (f) he is entering into this Agreement voluntarily, of his own
free will, and without any coercion, undue influence, threat, or intimidation of any kind or type
whatsoever.
[Signature Page Follows]
EXECUTED in , this th day of , .
| XXXXXXX X. XXXXXX |
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EXECUTED in , this th day of , .
| ACE CASH EXPRESS, INC. |
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| By: | ||||
Exhibit B to Consulting Agreement
“Change in Control” means the occurrence of any one or more of the following:
| (i) | Any Person becomes an Acquiring Person, except as the result of (A) any acquisition of Voting Securities of the Company by the Company or (B) any acquisition of Voting Securities of the Company directly from the Company (as authorized by the Board). | |
| (ii) | Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board; and for this purpose, any individual who becomes a member of the Board after the Effective Date whose election, or nomination for election by holders of the Company’s Voting Securities, was approved by the vote of at least a majority of the individuals then constituting the Incumbent Board shall be considered a member of the Incumbent Board (except that any such individual whose initial election as director occurs as the result of an actual or threatened election contest, within the meaning of Rule 14a-11 under the Exchange Act, or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered). | |
| (iii) | The consummation of a reorganization, merger, share exchange, consolidation, or sale or disposition of all or substantially all of the assets of the Company unless, in any case, the Persons who or which Beneficially Own the Voting Securities of the Company immediately before that transaction Beneficially Own, directly or indirectly, immediately after the transaction, at least 75% of the Voting Securities of the Company or any other corporation or other entity resulting from or surviving the transaction (including a corporation or other entity which, as the result of the transaction, owns all or substantially all of Voting Securities of the Company or all or substantially all of the Company’s assets, either directly or indirectly through one or more subsidiaries) in substantially the same proportion as their respective ownership of the Voting Securities of the Company immediately before that transaction. | |
| (iv) | The Company’s shareholders approve a complete liquidation or dissolution of the Company. |
For the purposes of the preceding definition, the following terms have the corresponding meanings:
“Acquiring Person” means any Person (other than an Excluded Person) who or which, alone or
together with all Affiliates and Associates of that Person, is the Beneficial Owner of 25% or more
of the Voting Securities of the Company then outstanding.
“Affiliate” and “Associate” have the respective meanings ascribed to them in Rule
12b-2 under the Exchange Act.
“Beneficial Owner” means beneficial owner as defined in Rule 13d-3 under the Exchange Act.
(“Beneficially Owns” has the correlative meaning.) Any calculation of the number of Voting
Securities outstanding at any particular time, including for purposes of determining the particular
percentage of such outstanding Voting Securities of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act.
“Board” means the Board of Directors of the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Excluded Person” means:
| (i) | Xxxxxx or any group (within the meaning of Section 13(d)(3) of the Exchange Act) of which Xxxxxx is a member; | |
| (ii) | any Person that controls (as defined in Rule 12b-2 under the Exchange Act) the Company as of the date of the Agreement or any group of which any such Person is a member; | |
| (iii) | any employee-benefit plan, or related trust, sponsored or maintained by the Company or any of its Subsidiaries, or any trustee or other fiduciary thereof; or | |
| (iv) | any corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the Voting Securities of the Company. |
“Incumbent Board” means the members of the Board on the Effective Date (subject, however,
to clause (ii) of the definition of “Change in Control”).
“Person” means any individual, firm, corporation, partnership, limited liability company,
trust, or other entity, including any successor (by merger or otherwise) of such entity.
“Subsidiary” means a corporation or other entity, whether incorporated or unincorporated,
of which at least a majority of the Voting Securities is owned, directly or indirectly, by the
Company.
“Voting Securities” means securities or other interests having by their terms ordinary
voting power to elect members of the board of directors of a corporation or individuals serving
similar functions for a noncorporate entity.
