SETTLEMENT AGREEMENT
AND MUTUAL RELEASE OF CLAIMS
This SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS is made and
entered into as of the 1st day of April 1999, by and between WORLD ACCEPTANCE
CORPORATION, a South Carolina corporation with its principal place of business
in Greenville, South Carolina, ("the Company"), and R. XXXXXX XXXXX
("Employee").
STATEMENT OF PURPOSE
Employee has served as an officer, director and employee of the
Company. Effective April 1, 1999, Employee has ended his employment with the
Company. In order to resolve any and all claims between the parties hereto, and
for the good and valuable consideration otherwise set forth herein, the parties
have entered into this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the Company and
Employee hereby agree as follows:
1. Date of Termination. Employee's employment with the Company and/or
the Company's subsidiaries is hereby ended as of April 1, 1999. Employee hereby
tenders Employee's resignation from any and all positions, including as a
director, now held with the Company and/or its subsidiaries, all such
resignations to be effective as of April 1, 1999.
2. Separation Payments and Other Benefits. (a) SALARY CONTINUATION.
Subject to Employee's full compliance with the terms of this Agreement,
including the conditions set forth below, the Company shall continue to pay the
current base salary of Employee ($189,414 per year) from the date of termination
set forth in paragraph 1 above through April 30, 2000. All separation payments
set forth herein shall be payable at a time and in accord with the regular
payroll practices of the Company with respect to its executive officers. All
such amounts shall be subject to and reduced by any applicable federal and state
withholding taxes.
(b) COMPANY CAR. Subject to Employee not then being in
material breach of any provision set forth in this Agreement, the Company - no
later than ten (10) business days following the complete execution of this
Agreement -- shall assign to Employee the title to the Company automobile that
he is currently driving (1997 Lincoln Continental), free and clear of any liens
or encumbrances.
(c) STOCK OPTIONS. Subject to Employee not then being in
material breach of any provision set forth in this Agreement, the Company shall
take all necessary steps to grant to Employee options to purchase 50,000 shares
of the Company's common stock pursuant to the Company's 1994 Stock Option Plan.
The exercise price for each option shall be the fair market value of a share on
the date of grant. Such options shall be granted to Employee within 10 (ten)
business days following
complete execution hereof. All stock options which have been granted to Employee
prior to April 1, 1999, together with the options to be granted to Employee
pursuant to this subparagraph, shall be deemed fully vested and exercisable as
of April 1, 1999. Employee shall be entitled to exercise all such options,
according to the terms thereof, at any time prior to June 26, 2001.
(d) ANNUAL INCENTIVE AWARD. Subject to Employee not then being
in material breach of any provision set forth in this Agreement, Employee shall
be entitled to the full amount of the award payable to him pursuant to the terms
of the Executive Incentive Plan of the Company for the fiscal year ended March
31, 1999. This amount (estimated by Employee to be $205,000) will be paid to
Employee simultaneous with payments made under the Executive Incentive Plan to
other executives of the Company, and shall be reduced by any applicable
withholding taxes.
3. Benefit Plans and Fringe Benefits. From and after the employment
termination date set forth in paragraph 1 above, and through and including April
30, 2000, Employee shall be entitled to receive medical, dental, disability and
life insurance benefits on the same terms as provided to other executive
officers of the Company. Provided, however, that the provision of dental,
disability and life insurance benefits to Employee shall be subject to
underwriter approval of the insurers associated with such plans, and the Company
shall exercise its best efforts to obtain underwriter approval on Employee's
behalf. Employee agrees to cooperate in any reasonable underwriting
requirements, including providing any documentation requested by the insurer as
a part of such underwriting process. If such underwriter approval is not
forthcoming with respect to any such plan participation, the Company shall
either, at its option, (i) provide for comparable coverage at the Company's
expense or (ii) pay to Employee a sum, less any applicable withholding taxes,
which is equivalent to the amount the Company would have otherwise had to pay
with respect to Employee's participation in such group plan from the date of
termination set forth in paragraph 1 above through April 30, 2000. Any dispute
concerning such payment or provision of benefits hereunder shall be settled by
final, conclusive and binding arbitration before and according to the rules then
prevailing of the American Arbitration Association in Greenville County, South
Carolina. Provided further, that all benefits hereunder shall cease and Employee
shall be furnished notice of continuation coverage under COBRA as of April 30,
2000. Except for the foregoing, and after April 30, 2000, Employee shall not
have the right to participate in or receive any benefit under any employee
benefit plan of the Company, any fringe benefit plan of the Company, or any
other plan, policy or arrangement of the Company providing benefits or
perquisites to employees of the Company generally or individually. Provided,
however, that Employee shall be entitled to elect the payment of benefits to
which Employee is entitled under any employee pension benefit plan of the
Company as provided under the terms of any such plan.
4. Vacation Pay. Upon the first regularly scheduled payday following
the execution hereof, the Company shall pay to Employee four (4) days of
vacation pay, which Employee and the Company agree constitutes all such accrued
and unused vacation pay.
5. Return of Company Property. All records, files, lists, including
computer-generated lists, drawings, notes, notebooks, letters, handbooks,
blueprints, manuals, sketches, specifications, formulas, financial documents,
sales and business plans, customer lists, lists of customer contacts, pricing
information, computers, software, cellular phones, credit cards, keys, equipment
and similar items relating to the Company's business, together with any other
property of the
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Company or property which the Employee received in the course of Employee's
employment with the Company, shall be returned to the Company immediately.
Employee further represents that Employee will not copy or cause to be copied,
print out or cause to be printed out any software, documents or other materials
originating with or belonging to the Company.
6. Confidentiality and Nondisparagement. (a) Employee agrees not to
make any statement, written or oral (including but not limited to any media
source or to any other party) regarding any of the following subjects: (i) the
investigation by the special committee of the Board of Directors of the Company
into allegations concerning Employee, including without limitation the subject
matter thereof; (ii) any of the circumstances leading up to or surrounding
Employee's departure from the Company; (iii) any allegations made by Employee or
others concerning alleged improprieties or conduct of other employees, officers
or directors of the Company or (iv) the terms of this Agreement. The Company
agrees to instruct and take all reasonable and necessary steps to prevent any
officer or director of the Company from making any statement, written or oral
(including but not limited to any media source or to any third party) regarding
any of the following subjects: (a) the investigation by the special committee of
the Board of Directors of the Company into allegations concerning Employee,
including without limitation the subject matter thereof; (b) any of the
circumstances leading up to or surrounding Employee's departure from the
Company; (c) any allegations concerning any alleged improprieties of Employee or
(d) the terms of this Agreement. Provided, however, it shall not constitute a
breach of this subparagraph for Employee to disclose the terms of this Agreement
to Employee's spouse, legal counsel, tax accountant, medical provider or
licensed counselor, provided Employee obtains the agreement of such person to
keep the terms hereof confidential. Provided further that neither party hereto
shall violate this subparagraph if otherwise required to disclose the terms of
this Agreement by law, including without limitation by any provision of or
regulation under the Securities Exchange Act of 1934.
(b) Furthermore, Employee, for the good and valuable
consideration furnished herein, agrees not to disparage, bring into disrepute or
make any negative statement concerning the Company or any of its employees,
officers or directors or make any other statement that would disrupt, impair or
affect adversely the reputation, business interests, or profitability of the
Company, or its employees, officers or directors, or place the Company or such
individuals in any negative light. The Company, for the good and valuable
consideration furnished by Employee herein, agrees to instruct and take all
reasonable and necessary steps to prevent any officer or director of the Company
or any employee of the Company with material involvement or knowledge concerning
the investigation by the Special Committee of the Board of Directors from
disparaging, bringing into disrepute or making any negative statement concerning
Employee to or in the presence or hearing of any third party or from making any
other statement in the presence or hearing of any third party that would
disrupt, impair or affect adversely the reputation of Employee, or place
Employee in any negative light. Any breach of this paragraph by the parties
shall constitute a material breach of this Agreement, and shall entitle such
nonbreaching party to any and all remedies provided by law for the material
breach of contract, including such remedies, if otherwise available by law,
which permit such party to suspend any performance hereunder otherwise owed to
the other party hereto. Provided, however, that notwithstanding the provisions
hereof, it shall not constitute a breach of this Agreement for either party
hereto to testify truthfully about any subject when compelled to do so by
properly issued legal process. The parties hereto agree that the Company shall
issue a press release concerning Employee's departure
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in the form attached hereto as Exhibit A and further agree that it shall not
constitute a breach or violation of this Agreement for any party to state that
Employee's departure from the Company was due to philosophical or personality
differences, or words substantially to that effect.
7. Admissions. Employee acknowledges that the payment by the Company of
the benefits described herein shall never for any purpose be considered an
admission of liability on the part of the Company, by whom liability is
expressly denied, and no past or present wrongdoing on the part of the Company
shall be implied by such payment. Similarly, no admission of past or present
wrongdoing on the part of Employee shall be implied by virtue of his resignation
from the Company.
8. Release. (a) As consideration for the payments to be made by the
Company to Employee pursuant to paragraph 2 hereof, Employee agrees for Employee
and for Employee's heirs, executors, administrators and assigns, to release and
forever discharge the Company and all of its parent and subsidiary corporations,
together with each of their respective agents, officers, employees, directors
and attorneys, from and to waive any and all rights with respect to all manner
of claims, actions, causes of action, suits, judgments, rights, demands, debts,
damages, or accountings of whatever nature, legal, equitable or administrative,
whether the same are now known or unknown, which Employee ever had, now has or
may claim to have, upon or by reason of the occurrence of any matter, cause or
thing whatsoever up to the date of this Settlement Agreement and Mutual Release
of Claims, including without limitation: (i) any claim whatsoever (whether under
federal or state statutory or common law) arising from or relating to Employee's
employment or changes in Employee's employment relationship with the Company,
including Employee's separation, termination or resignation therefrom; (ii) all
claims and rights for additional compensation or benefits of whatever nature;
(iii) any claim for breach of contract, implied or express, impairment of
economic opportunity, intentional or negligent infliction of emotional distress,
wage or benefit claim, prima facie tort, defamation, libel, slander, negligent
termination, wrongful discharge, or any other tort, whether intentional or
negligent; (iv) all claims and rights under Title VII of the Civil Rights Act of
1964, the Civil Rights Acts of 1866, 1871, or 1991, the Age Discrimination in
Employment Act, the Employee Retirement Income Security Act, the Americans With
Disabilities Act of 1993, the Family and Medical Leave Act, all as amended, or
any other federal, state, county or municipal statute or ordinance relating to
any condition of employment or employment discrimination; and (v) all claims
under Employee's Employment Agreement with the Company. Provided, however, this
Release shall not (i) include any claims relating to the obligations of the
Company, its officers, directors, employees or agents under this Agreement, (ii)
operate to release Employee's ownership of any common stock of the Company, or
(iii) affect Employee's vested and accrued rights as a participant in the
Company's 401(k) plan. Provided, however, that in the event any legal action is
commenced hereafter against Employee by any individual released by Employee
herein, and provided that such legal action arises out of facts or circumstances
prior to the date hereof, the release by Employee in favor of such individual
(and only such individual) shall be null and void.
(b) As consideration for the releases and other obligations of
Employee set forth herein, the Company, for itself and all of its parent and
subsidiary corporations, and for all of their respective officers, directors and
employees in their official or representative capacities, agrees to release and
forever discharge from and waive any and all rights with respect to all manner
of claims, actions, causes of action, suits, judgments, rights, demands, debts,
damages, or accountings of
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whatever nature, legal, equitable or administrative, whether the same are now
known or unknown, which the Company, or any of its parent or subsidiary
corporations ever had, now has or may claim to have, upon or by reason of the
occurrence of any matter, cause or thing whatsoever up to the date of this
Settlement Agreement and Mutual Release of Claims, including without limitation:
(i) any claim whatsoever (whether under federal or state statutory or common
law) arising from or relating to Employee's employment or changes in Employee's
employment relationship with the Company, including Employee's separation,
termination or resignation therefrom, (ii) all claims and rights for additional
compensation or benefits of whatever nature; (iii) any claim for breach of
contract, implied or express, impairment of economic opportunity, intentional or
negligent infliction of emotional distress, assault, battery, sexual, racial or
other unlawful harassment, wage or benefit claim, prima facie tort, defamation,
libel, slander, or any other tort, whether intentional or negligent; (iv) all
claims and rights under any federal, state, county or municipal statute or
ordinance relating to any condition of employment or employment discrimination;
and (v) all claims under Employee's Employment Agreement with the Company.
Provided, however, this Release shall not include any claims relating to the
obligations of Employee under this Agreement or release Employee in the event of
Employee's theft or defalcation of any Company funds or property.
9. Disclosure of Confidential Information. For a period of two (2)
years from the date of this Agreement, Employee shall not disclose to anyone any
confidential or proprietary information of the Company. For purposes of this
paragraph, "confidential and proprietary information" shall mean information not
generally known to the public that was created by, disclosed or made available
to Employee in the course of Employee's employment by the Company, and shall
include, but not be limited to all nonpublic information concerning the affairs,
business, clients, customers and other relationships of the Company, as well as
all confidential and proprietary financial and marketing information of the
Company, including without limitation sales methods, information concerning
principals or customers, advertising methods, financial affairs or methods of
procurement, marketing and business plans, strategies, projections, business
opportunities, client lists, sales and cost information and financial results
and performance.
10. Governing Law and Forum Selection. Employee and the Company agree
that any claim against the Employee or Company or any of its affiliates or their
employees, officers or directors ("the Company Parties") arising out of or
relating in any way to this Agreement or to Employee's employment with the
Company shall be brought exclusively in the Circuit Court of Greenville County,
South Carolina, or the United States District Court for the District of South
Carolina, and in no other forum. Employee and the Company hereby irrevocably
consent to the personal and subject matter jurisdiction of these courts for the
purpose of adjudicating any claims subject to this forum selection clause.
Employee and the Company also agree that any dispute of any kind arising out of
or relating to this Agreement or to Employee's employment (including without
limitation any claim released herein by Employee) shall at either the Employee's
or the Company Parties' sole election or demand be submitted to final,
conclusive and binding arbitration before and according to the rules then
prevailing of the American Arbitration Association in Greenville County, South
Carolina, which election or demand may be made at any time prior to the last day
to answer and/or respond to a summons and/or complaint or counterclaim made by
Employee or the Company. The results of any such arbitration proceeding shall be
final and binding both upon the Company Parties and upon Employee, and shall be
subject to judicial confirmation as provided by the Federal Arbitration Act,
which is incorporated herein
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by reference. Provided, however, that nothing in this paragraph 10 shall
preclude either party, if otherwise entitled by law, from obtaining preliminary
or emergency injunctive relief in the Circuit Court of Greenville County or the
United States District Court for the District of South Carolina to restrain any
violation of the provisions of paragraphs 6, 9 or 14 hereof.
11. Entire Agreement. This Agreement contains the entire agreement
between the Company and Employee and supersedes all prior agreements relating to
the subject matter hereof, and may be changed only by a writing signed by the
parties hereto. Any and all prior representations, statements and discussions
regarding the subject matter of this Agreement have been merged into and/or
replaced by the terms of this Agreement.
12. Return of Employee's Property. Employee's property presently in the
possession of the Company, whether at Employee's office or otherwise, shall be
promptly returned to him and facilitated by Employee's secretary.
13. Severability. If any of the provisions set forth in this Agreement
be held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. Provided, however, that
this provision shall not affect in any way the obligations of Employee set forth
in paragraph 12 above, or affect Employee's ability to ratify any provision of
this Agreement.
14. Noncompetition. From the date hereof, through and including April
30, 2000 (such period not to include any period(s) of violation of period(s) of
time required for litigation to enforce the covenants of this paragraph),
Employee shall not:
(a) Become employed by (as an officer, director, employee,
consultant, principal or otherwise), or otherwise become commercially
interested in or affiliated with (whether through direct, indirect,
actual or beneficial ownership or through a financial interest), a
COMPETITOR, unless Employee accepts employment with a COMPETITOR in an
area of the COMPETITOR'S business which does not compete in any
significant way with the Company. For purposes of this Agreement, a
COMPETITOR shall be defined as any person or entity operating in the
small-loan consumer finance industry (I.E., lenders who generally make
loans of less than $1,000 with maturities of fifteen months or less).
(b) Solicit or attempt to solicit, for competitive purposes,
the business of any of the Company's clients or customers, or solicit
or attempt to solicit, for competitive purposes, the business of any of
the Company's prospective customers or clients, or otherwise induce
such customers or clients or prospective customers or clients to
reduce, terminate, or restrict or alter their business relationships
with the Company in any fashion.
(c) In recognition of the broad geographic scope of the
Company's business and of the ease of competing with the Company's
business in any part of the
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Xxxxxx Xxxxxx, the restrictions on competition set forth in items (a)
and (b) above are intended to cover the following geographic areas: (i)
each and every county and each and every state in which the Company or
any of its affiliates has an office or place of business; (ii) each and
every county and each and every state in which the Company or any of
its affiliates has any customers; (iii) each and every county and each
and every state in which the Company or any of its affiliates
participates in or is licensed to engage in any small loan consumer
finance business; (iv) the states of South Carolina, Georgia, Texas,
Oklahoma, Louisiana, Tennessee, Illinois, Missouri and New Mexico.
(d) In addition, from the date hereof until March 31, 2001,
Employee shall not induce or attempt to induce any employee of the
Company to leave the Company for the purpose of engaging in any
business operation, including without limitation any business operation
that is substantially competitive with the Company's current business.
15. Voluntary Agreement. Employee hereby represents that Employee has
carefully read and completely understands the provisions of this Agreement and
that Employee has entered into this Agreement voluntarily and without any
coercion whatsoever, and in order to receive benefits the Company contends are
not otherwise owed to Employee by the Company. Employee represents that he has
been advised of his right to secure counsel to assist in his reviewing this
Agreement, that he has had sufficient time to review carefully each of the
provisions hereto with his counsel, and that his execution hereof is the product
of his own free will and volition. The Company hereby represents that it has
entered into this Agreement voluntarily and that due corporate authority has
been obtained for entry into this Agreement.
16. Assistance and Cooperation. Employee agrees to cooperate with and
provide assistance to the Company and its legal counsel in connection with any
litigation (including arbitration or administrative hearings) or investigation
affecting the Company, in which, in the reasonable judgment of the Company's
counsel, Employee's assistance or cooperation is needed. Employee shall, when
requested by the Company, provide testimony or other assistance and shall travel
at the Company's request in order to fulfill this obligation. Provided, however,
that, in connection with such litigation or investigation, the Company shall
attempt to accommodate Employee's schedule, shall provide him with reasonable
notice in advance of the times in which his cooperation or assistance is needed,
and shall reimburse Employee for any reasonable expenses and loss of income
incurred in connection with such matters. In addition, during the time he is
receiving the payments set forth in paragraph 2 herein, Employee agrees to
cooperate fully with the Company on all matters relating to his employment and
the conduct of the Company's business. This obligation to cooperate, however,
shall not be considered to prohibit or restrict other employment by the
Employee, except as is set forth in paragraph 14 herein.
17. Waiver, Dependent Conditions and Fees. Any waiver or consent from
the Company or Employee with respect to any term or provision of this Agreement
or any other aspect of Employee's or the Company's conduct shall be effective
only in the specific instance and for the specific purpose for which given and
shall not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of the Company or Employee at
any time or times to require performance of, or to exercise any of its powers,
rights
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or remedies with respect to, any term or provision of this Agreement or any
other aspect of Employee's or the Company's conduct shall not affect the
Company's or Employee's right at a later time to enforce any such term or
provision. In addition thereto, the failure of Employee or the Company to
perform or satisfy any material obligation set forth herein shall give the
Company or Employee, if otherwise allowed by law, the right to suspend any
obligation otherwise owed to the other party hereto. In the event the Company or
Employee prevails in any legal action to enforce its or his rights hereunder,
the Company or Employees, as the case may be, shall be entitled to recover its
or his reasonable attorney's fees and expenses from the other, nonprevailing
party.
18. Indemnification. The Company agrees to indemnify Employee for acts
and omissions preceding the date hereof to the full extent permitted under the
Articles of Incorporation and Bylaws of the Company. The Company further agrees
to obtain for Employee, with respect to acts and omissions preceding the date
hereof, directors' and officers' liability insurance with the same limits as
pertain to the Company's other officers and directors.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed by their authorized
representatives as of the day and year first above written.
WORLD ACCEPTANCE CORPORATION
By: /s/ Xxx X. Xxxxxxxx, Xx.
------------------------
Position: Director
-----------------
/s/ R. Xxxxxx Xxxxx
------------------------
R. Xxxxxx Xxxxx
WITNESS:
/s/ Xxxxxxxx X. Xxxxx
----------------------
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EXHIBIT A
FOR IMMEDIATE RELEASE
Contact: A. Xxxxxxxxx XxXxxx, III
Executive Vice President and Chief
Financial Officer
(000) 000-0000
WORLD ACCEPTANCE CORPORATION ANNOUNCES RESIGNATION OF
CHIEF OPERATING OFFICER
GREENVILLE, S.C., April 4, 1999 -- World Acceptance Corporation (Nasdaq:WRLD)
announced today that R. Xxxxxx Xxxxx, World's President and Chief Operating
Officer, has resigned from the Company to pursue other business interests.
Xxxxxxx X. Xxxxxxx, Chairman and CEO, commented on Xx. Xxxxx departure. "We
thank Xxxxxx for his years of service to the company," said Xxxxxxx. "He made
many positive contributions to our company, and we all wish him well in his new
endeavors."
World Acceptance Corporation is one of the largest small-loan consumer finance
companies, operating 383 offices in nine states. It is also the parent company
of ParaData Financial Systems, a provider of computer software solutions for the
consumer finance industry.
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