Exhibit No. 10.245
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT ("Agreement") is entered into as of January 21, 2002 by
and between MEGO FINANCIAL CORPORATION, a New York corporation with its
principal office located at 0000 Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000 (the
"Company") and XXX ARLINGTON XXXXXX, an individual residing at 0000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxx 00000 ("Employee").
RECITAL
Employee is currently employed by the Company as Senior Vice President, General
Counsel and Secretary and by the Company's wholly owned subsidiary, Preferred
Equities Corporation ("PEC") as Senior Vice President, General Counsel and
Secretary.
The Company desires to retain Employee in said positions pursuant to the terms
and conditions of this Agreement which supersedes and replaces all prior
employment agreements entered into between the Employee and the Company and all
amendments thereto.
The Employee desires to retain his employment in said positions pursuant to the
terms and conditions of this Agreement.
Now, therefore, in consideration of this RECITAL and other good and valuable
consideration, the parties hereto hereby agree as follows.
AGREEMENT
1. Recital - The above Recital is incorporated into the terms of this
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Agreement.
2. Employment - The Company hereby employs the Employee, and the Employee
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hereby accepts such employment, to serve as an executive officer of the Company
on the terms and conditions provided in this Agreement.
3. Duties and Performance - The Employee shall serve as Senior Vice President,
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General Counsel and Secretary of the Company and Senior Vice President, General
Counsel and Secretary of PEC, and shall perform such legal, executive and
administrative services as are generally expected of a Senior Vice President,
General Counsel and Secretary, or as may be reasonably assigned to him from time
to time by the Chairman of the Board, President, or by the Board of Directors of
the Company ("Board"). The Employee agrees to devote his full time, attention,
energy and skill to the Company's business and good will. The Employee shall be
headquartered in the offices of the Company in Las Vegas, but shall be available
to travel to other offices of the Company or its subsidiaries, or elsewhere, in
the performance of his duties.
4. Term - This Agreement shall commence on January 21, 2002 and terminate on
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December 31, 2003, unless sooner terminated or extended as provided in this
Agreement.
1.
5. Compensation
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(a) Unless otherwise agreed in writing by the Company and Employee, the
Company shall pay to Employee, in partial compensation of his services, a salary
of $224,000.00 per annum for each year of this Agreement (Base Compensation).
The Base Compensation shall be payable in equal installments, the frequency of
which shall be determined by the Company, but in no event less frequently than
monthly. The Company shall withhold and pay over to the appropriate
governmental agency all payroll taxes (including income, social security and
unemployment compensation taxes) required by federal, state and local
governments having jurisdiction over the Company.
(b) In addition to his Base Compensation due under this Agreement,
Employee shall be paid an annual bonus at the discretion of the Board.
6. Stock Options - Employee shall receive stock options, in addition to those
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already held by the Employee, at the discretion of the Board.
7. Travel and Business Expense - Employee shall be reimbursed for usual
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business and travel expenses. Employee shall be entitled to fly business class
or first class if business class is unavailable on any flight or combination of
flights longer than two (2) hours in scheduled duration.
8. Benefits - Employee shall be eligible for all benefits afforded to Company
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and PEC executives from time to time provided Employee meets any eligibility
requirements set forth for employees participating therein.
9. Vacation - Employee shall have four (4) weeks paid vacation during each
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fiscal year.
10. Club Membership - The Company will pay all dues and assessments associated
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with Employee's membership at Spanish Trail Golf and Country Club in Las Vegas,
Nevada and Employee will pay for Employee's non-business related charges.
11. Change In Control - At any time during the term of this Agreement and any
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extension hereof, in the event of a Change of Control of the Company (as
hereinafter defined), Employee shall have thirty (30) days from the date of said
Change of Control to determine at Employee's sole election to either (i)
continue his employment pursuant to the terms and conditions of this Agreement
(ii) enter into a new employment agreement or understanding with the Purchaser
or (iii) to terminate his employment in consideration of the payment of two
hundred thousand U.S. dollars ($200,000.00) and such other amounts as may then
be due Employee pursuant to the terms and conditions of this Agreement including
any remaining Base Compensation payable to the date of termination. In the
event Employee elects to terminate employment pursuant to (iii) above, the two
hundred thousand dollar ($200,000.00) consideration shall be paid in a lump sum
within five (5) business days of Employee's election of such payment.
2.
As used herein, "Change of Control" means a direct or indirect acquisition by
any person or business entity of any nature whatsoever of forty percent (40%) or
more of Company's issued and outstanding shares of stock by a tender offer,
merger or any other for of business combination or arrangement and / or an
acquisition of substantially all of PEC's assets.
12. Termination of Employment
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(a) The Company may terminate the Employee's employment only for Cause upon
the giving of written notice of such involuntary termination to the Employee.
"Cause" shall mean any one of the following acts of, or omissions by, or actions
of others relating to, the Employee, as set forth below:
(i) The Employee's conviction of a felony, whether or not such
conviction is appealed;
(ii) Deliberate and premeditated acts by the Employee against the
best interests of the company;
(iii) Material breach of the terms of this Agreement;
(iv) The Employee is found guilty of or is enjoined from violation
of any state or federal securities laws, or state or federal laws governing the
business of the Company, or rules and regulations of any state or federal agency
regulating any of the business of the Company;
(v) Misappropriation of the Company's funds or property; and
(vi) Habitual use of alcohol or drugs to a degree that such uses
substantially interferes with Employee's performance of his duties.
(b) In the event the Employee's employment shall be terminated for Cause
prior to the expiration of the term of this Agreement, the Employee shall be
entitled only to his Base Compensation prorated to the effective date of such
termination.
(c) This agreement shall terminate immediately upon the Employee's death
or total and permanent disability. For the purpose of this Agreement, total and
permanent disability shall mean the Employee's inability to adequately perform
his duties on behalf of the Company, as reasonably determined by the Board, for
a period of ninety (90) consecutive days due to an illness or injury. In the
event of such termination, the Employee shall be entitled to his Base
Compensation prorated to the end of the month of his death or the date of the
determination of Employee's total and permanent disability by the Board. The
portion of any stock option granted by the Company to the Employee which has
vested pursuant to the terms of such option at the time of the termination of
this Agreement due to the Employee's death or total and permanent disability
shall remain exercisable as set forth in such option relating to such a
termination event.
3.
13. Renewal of Agreement - This Agreement shall be automatically extended from
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year to year unless either or both parties give written notice to the other on
or before November 1st of 2003 and each year thereafter, as may be appropriate,
that either or both parties intend to terminate the employment relationship
created by this Agreement. For example, if neither party gives such notice
prior to November 1, 2003, this Agreement will automatically extend to December
31, 2004 and if neither party gives such notice prior to November 1, 2004, this
Agreement will automatically extend to December 31, 2005 and so on. This
Agreement shall continue on the same terms and conditions hereof unless
otherwise modified in a writing signed by the Company and the Employee.
14. Covenant Not to Solicit - The following provisions shall hereinafter be
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referred to as the "Covenant Not to Solicit":
(a) The Employee agrees that during the term of this Agreement and any
renewal thereof, and for a period of one (1) year after the expiration or
termination of this Agreement with or without Cause, the Employee will not
without authorization from the Company, in any capacity, directly or indirectly
solicit or encourage other employees or officers of the Company to terminate
their employment by the Company for any purpose whatsoever.
(b) The Employee acknowledges and agrees that:
(i) the foregoing restriction is reasonable for the protection of the
goodwill and business of the Company against irreparable injury;
(ii) the foregoing restriction does not place an undue hardship on the
Employee; and
(iii) the Employee agrees that the Company will be irreparably damaged
by a breach of this Covenant Not to Solicit and that damage at law will be an
insufficient remedy for the Company. The Employee also agrees that the Company
shall be entitled, upon application to a court of competent jurisdiction, to
obtain injunctive relief to enforce the provisions of this Covenant Not to
Solicit, which injunctive relief shall be in addition to any other rights or
remedies available to the Company.
15. Confidentiality - The Employee recognizes and acknowledges that the
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services which he will perform for the Company and the knowledge which he will
obtain of the Company's proprietary information such as trade secrets,
processes, business practices, strategic plans and financial data through his
close relationship with the Company, are confidential, proprietary and valuable
in nature. The Employee therefore agrees that, other than in the regular and
proper course of business of the Company, he will not divulge to others or use
for his own benefit, or the benefit of any person, firm, corporation or other
entity, other than the Company, at any time during or subsequent to this
employment, any information obtained in the course of his employment, concerning
such proprietary information, without first obtaining the Company's written
permission,
4.
unless such information has become public knowledge by a means other than a
breach of the provisions of this Agreement.
16. Modification - No change or modification of this Agreement shall be valid
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unless made in writing and signed by both of the parties hereto.
17. Applicable Law - This Agreement shall be governed by and construed in
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accordance with the laws of the State of Nevada.
18. Successors and Assigns - The duties under this Agreement are personal to
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Employee and may not be assigned by Employee. This Agreement is binding upon
the Company's successors and assigns.
19. Headings - Headings to sections of this Agreement are for convenience of
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reference only and are not to be considered in the interpretation of this
Agreement.
20. Entire Agreement - This Agreement incorporates the entire agreement between
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the parties and supersedes all other prior contemporaneous agreements,
amendments to such agreements, negotiations or discussions between the Employee
and the Company.
21. Authorization - Xxxxx Xxxxxxx, President, has been duly authorized by the
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Board to execute this Agreement on behalf of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first appearing herein.
COMPANY:
MEGO FINANCIAL
By: s/s Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
EMPLOYEE:
By: s/s Xxx X. Xxxxxx
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Xxx X. Xxxxxx
5.
