EXHIBIT 10.10.6
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") made this 12 day of August , 1999,
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between FirstAmerica Automotive, Inc. ("FAA", "Employer" or "Corporation"), and
Xxxxx Xxxxxxx ("Employee"). Employee began employment on February 9 , 1998
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("Commencement Date"). This Agreement's purpose is to establish in writing all
the terms and conditions of that employment, and specifically incorporates the
Non-Disclosure and Confidentiality Agreement.
Section 1. Position and Duties.
Employee shall be employed by the Corporation as its Vice President of
Finance reporting to the Corporation's Chief Financial Officer ("CFO"), as of
the Commencement Date. As Vice President of Finance, Employee agrees to devote
his full business time, energy and skill to his duties with the Corporation.
These duties shall include, but are not limited to, any duties consistent with
the job position which may be assigned to Employee from time to time by the
Corporation's CFO. Employee shall be subject to all the same rules, policies and
procedures of Employer to the extent they do not directly contradict the terms
of this Agreement. Employer retains the right to modify or eliminate any rule,
policy or procedure at any time at its sole discretion.
Section 2. Term.
Employee's employment with the Corporation pursuant to this Agreement is
"at-will" and is for no specified period of time beginning, subject to the
provisions regarding termination set forth below. Upon the termination of
Employee's employment with the Corporation, for any reason, neither Employee nor
the Corporation shall have any further obligation or liability to the other,
except as set forth in paragraphs 5 or 6 below. Any modification or rescission
of this "at-will" relationship must be in writing signed by the CFO of the
Corporation.
Section 3. Basic Compensation.
The Employer shall pay compensation to the Employee as set forth herein.
Such compensation shall be reviewed annually and modified as determined by the
sole discretion of the CFO of the Corporation.
Salary
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An annual base salary of $150,000 (One Hundred Fifty Thousand Dollars),
approximately $12,500 (Twelve Thousand Five Hundred Dollars) per month, will be
paid to Employee, subject to applicable withholding, in accordance with the
Corporation's normal payroll procedures (the "Base Salary").
Benefits
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Employee shall have the right, on the same basis as other members of senior
management of the Corporation, to participate in and to receive benefits under
any of the Corporation's employee benefit plans, including the medical, dental,
vision and disability group insurance plans, if any. Employee shall also be
entitled to participate in any retirement plan maintained by the Corporation for
which he is eligible in accordance with its terms. In addition, Employee shall
be
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entitled to the benefits afforded to other members of senior management under
the Corporation's vacation, holiday and business expense reimbursement policies
as outlined in the Employee Handbook.
Bonus
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Employee is eligible for an annual bonus of 50% of Employee's annual base
salary: 1/2 is based on corporate performance (making plan) and 1/2 is based on
personal performance as determined by the CFO of the Corporation.
Corporate Vehicle
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Employee will be provided a vehicle expense allowance of $455.00 (Four
Hundred Fifty-Five Dollars) per month.
Expense Reimbursement
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Upon receipt of proper documentation establishing the amount of such
expenses, the Corporation shall reimburse Employee for any reasonable business
expenses incurred.
Section 4. Stock Options.
Upon the execution of this Agreement (or upon the Corporation's adoption,
and if required by law, qualification of a stock option plan-- whichever is the
latter), Employee shall be granted a non-statutory stock option to purchase
25,000 shares of the Corporation's Common Stock at the strike price of $4.00 per
share. Provided Employee remains an employee of the Corporation, these shares
shall vest at the rate of 416.67 shares per month following the Commencement
Date. In the event that Employee terminates his employment with the Corporation
for Good Reason (as defined in paragraph 5(c), below) following a Transfer of
Control (as also defined in paragraph 5(c), below), then, in addition to the
benefits set forth in paragraph 5, Employee shall become immediately vested in
all of the shares subject to the Initial Stock Option, effective as of the date
ten days prior to the Transfer of Control.
Except as otherwise provided herein, the Initial Stock Option shall be
subject to the terms and conditions of the Corporation's stock option plan and
the Corporation's standard form of stock option agreement, which Employee shall
be required to sign as a condition of the issuance of the Initial Stock Option.
Section 5. Benefits Upon Termination.
Employee agrees that his employment may be terminated by the Corporation at
any time, with or without cause. In the event of termination of Employee's
employment by the Corporation, based on the reasons set forth below, he shall be
entitled to the following:
a. Termination for Cause: If Employee's employment is terminated by
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the Corporation for cause, Employee shall be entitled to no
compensation or benefits from the Corporation other than those
already earned under paragraphs 3 and 4 through the date of his
termination. For purposes of this Agreement, a termination "for
cause" occurs if (employee) is terminated for any of the
following reasons:
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1. theft, dishonesty, or falsification of any employment or
Corporation records;
2. improper disclosure of the Corporation's confidential or
proprietary information, including a violation of the Non-
Disclosure and Confidentiality Agreement.;
3. any intentional act by Employee which has a material
detrimental effect on the Corporation's reputation or
business as determined by the Corporation; or,
4. any material breach of this Agreement by Employee, which
breach is not cured within thirty (30) days following
written notice of such breach from the Corporation.
b. Termination Other Than For Cause: If Employee's employment is
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terminated by the Corporation for any reason other than for
cause, Employee shall be entitled to the following separation
benefits:
1. Continuation of Employee's Base Salary for a period of one
year, such salary continuation payments to be made in
accordance with the Corporation's ordinary payroll
procedures without regard to whether Employee obtains
alternative employment in the interim; and
2. Payment of an amount equivalent to the annual average of the
amounts of annual Performance Bonuses previously paid to
Employee, less applicable withholding, with such payment to
be made in twelve equal monthly installments.
c. Resignation for Good Reason: For purposes of paragraph 5(b) of
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this Agreement, Employee's resignation for Good Reason following
a Transfer of Control shall constitute a Termination Other Than
for Cause.
For purposes of this Agreement, a "Transfer of Control" shall mean an
"Ownership Change Event" (as defined below) or a series of related Ownership
Change Events (collectively, the "Transaction") wherein the stockholders of the
Corporation immediately before the Transaction do not retain immediately after
the transaction direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting stock
of the Corporation or the corporation or the corporations to which the assets of
the Corporation were transferred (the "Transferee Corporation(s)"), as the case
may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the
voting stock of one or more corporations which, as a result of the Transaction,
own the Corporation or the Transferee Corporation(s), as the case may be, either
directly or through one or more subsidiary corporations. The Board shall have
the right to determine whether multiple sales or exchanges of the voting stock
of the
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Corporation or Multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
For purposes of this Agreement, "Good Reason" means any of the following
conditions, which condition(s) remain(s) in effect 30 days after written notice
to the Board from Employee of the following condition(s):
(i) a decrease in Employee's base salary and/or a
material decrease in Employee's standard management
bonus plan or employee benefits;
(ii) a material, adverse change in Employee's title,
authority, responsibilities or duties, as measured
against Employee's title, authority, responsibilities
or duties immediately prior to such change;
(iii) any material breach by the Corporation of any
provision of this Agreement, which breach is not
cured within thirty (30) days following written
notice of such breach from Employee;
(iv) Any failure of the Company to obtain the assumption
of this Agreement by any successor or assign of the
Company; or
(v) Any purported termination of Employee's employment
for "material breach of contract" which is not
effected following a written notice satisfying the
requirements of paragraph 5.
For purposes of this Agreement, an "Ownership Change Event" shall be deemed
to have occurred if any of the following occurs with respect to the Corporation:
(i) The direct or indirect sale or exchange in a single
or series of related transactions by the stockholders
of the Corporation of more than fifty percent (50%)
of the voting stock of the Corporation;
(ii) A merger or consolidation in which the Corporation is
a party;
(iii) The sale, exchange, or transfer of all or
substantially all of the assets of the Corporation;
or
(iv) A liquidation or dissolution of the Company.
Section 6. Benefits Upon Voluntary Termination.
In the event Employee voluntarily resigns from his employment with the
Corporation, or in the event that Employee's employment terminates as a result
of his death or disability, Employee shall be entitled to no compensation or
benefits from the Corporation other than those earned under paragraphs 3 and 4
above.
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Section 7. Remedy for Breach.
The Employee acknowledges that a violation of any of the provisions of this
Agreement, including its restrictive covenants, will cause irreparable damage to
the Employer, its successors and assigns. The Employee consents that any
violation shall entitle the Employer or its successors and assigns, in addition
to any other rights or remedies it, or they, may have, to an immediate
injunction restraining any violation.
Section 8. Notices.
All notices, requests, demands, and other communications that are required
or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid to the CEO at the Corporate
Headquarters or to the Employee's last known home address, whichever is
applicable.
Section 9. Governing Laws.
This Agreement shall be construed and enforced in accordance with the laws
of the State of California excluding its conflict of law provisions.
Section 10. Entire Agreement.
This Agreement contains the entire agreement among the parties regarding
Employee's pay plan and the "at-will" employment relationship. All prior
negotiations, agreements, and understandings are superseded. This Agreement may
not be amended or revised except by a writing signed by all the parties.
Section 11. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the heirs,
legal representatives, and successors of the respective parties; provided
however, that this Agreement and all its rights may not be assigned by any party
except by or with the written consent of the other parties.
Section 12. Confidential Information and Nondisclosure Agreement.
Employee agrees to execute and abide by the terms and conditions of the
Company's standard employee Confidential Information and Nondisclosure
Agreement.
Section 13. Non-Solicitation of Employees.
In the event that Employee's employment with the Company is terminated for
any reason, Employee agrees that for a period of one year after the date of this
Agreement, he shall not, either directly or indirectly, solicit the services, or
attempt to solicit the services of any employee of the Corporation or its
affiliated entities to any other person or entity, without the written consent
of the President of the Corporation.
Section 14. Attorneys' Fees.
The prevailing party shall be entitled to recover from the losing party is
attorneys' fees and costs incurred in any action brought to enforce any right
arising out of this Agreement.
Section 15. Mandatory Binding Arbitration.
Employee and Employer knowingly and voluntarily agree that in the event
there is any dispute
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arising out of Employee's employment with, seeking employment with, or
separation from the Employer that would require or allow resort to any court,
regardless of the kind or type of dispute, including, but not limited to, claims
of discrimination and harassment (except for claims before the National Labor
Relations Board or claims for physical injury under the Worker's Compensation
Act or disputes relating to misappropriation of intellectual property), such
dispute shall be submitted exclusively to final and binding arbitration pursuant
to the provisions of the Federal Arbitration Act, in conformity with the
procedures of the California Arbitration Act (Cal. Code Civ. Proc. Sec. 1280 et
seq.). All such arbitration proceedings shall take place in the city of San
Francisco, California, at a mutually agreed upon location. Employee understands
that by voluntarily agreeing to this binding arbitration provision, both the
Corporation and the Employer give up the right to a trial by jury.
IT IS SO UNDERSTOOD AND AGREED:
EMPLOYEE:
Dated: August 12, 1999 Signature: /s/ Xxxxx X. Xxxxxxx
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EMPLOYER:
Dated: August 12, 1999 Signature: /s/ Xxxxx Xxxxxxxx
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