EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of October 5, 2007, by and
among Dollar Financial Group, Inc., a New York corporation (together with its successors and
assigns, “DFG”), Dollar Financial Corp., a Delaware corporation (together with its successors and
assigns, “DFC,” and together with DFG, the “Company”) and Xxxxxxx X. Xxxxx (the “Executive”) (the
Company and the Executive, each a “Party” and collectively, the “Parties”).
WHEREAS, the Company and the Executive are parties to a certain employment agreement, dated as
of December 19, 2003; and
WHEREAS, the Company desires to continue to employ the Executive, and the Executive desires to
accept employment by the Company upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, and intending to be legally bound hereby, the parties hereby agree as follows:
1. Representations and Warranties. The Executive represents and warrants to the Company that
the Executive is not bound by any restrictive covenants with any entity other than the Company or
its affiliates which would in any way prevent the Executive’s acceptance of continued employment
hereunder. Both DFG and DFC each represent and warrant to the Executive that (a) the execution,
delivery and performance of this Agreement by it has been fully and validly authorized by all
necessary corporate action, (b) the officer signing this Agreement on its behalf is duly authorized
to do so, (c) the execution, delivery and performance of this Agreement does not violate any
applicable law, regulation, order, judgment or decree or any agreement, plan or corporate
governance document to which it is a party or by which it is bound and (d) upon execution and
delivery of this Agreement by the Parties, it shall be a valid and binding obligation of DFG or
DFC, as the case may be, enforceable against it in accordance with its terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally.
2. Term of Employment. The Company will continue to employ the Executive and the Executive
accepts continued employment by the Company on the terms and conditions herein contained for a
period (the “Employment Period”) provided in paragraph 5.
3. Duties and Functions.
(a) During the Employment Period, the Executive shall be employed as Chief Executive Officer
of both DFG and DFC. The Executive will report solely and directly to the Boards of Directors of
DFG and DFC, respectively. The Company will use its commercially reasonable efforts, subject to
stockholder vote, to nominate the Executive to the boards of directors of both DFG and DFC (each,
as applicable, the “Board”) for so long as he is employed by DFG and DFC in the capacity of Chief
Executive Officer.
(b) During the Employment Period, the Executive shall have all authorities, duties and
responsibilities customarily exercised by an individual serving as Chief Executive Officer of DFG
and/or DFC in a corporation the size and nature of the Company and shall be assigned no duties or
responsibilities that are materially inconsistent with, or that materially impair his ability to
discharge, the foregoing duties and responsibilities.
(c) During the Employment Period, the Executive will devote substantially all of his time and
efforts to the business of the Company and will not engage in consulting work or any trade or
business for his own account, or for or on behalf of any other person, firm or corporation, that
competes, conflicts or interferes with the performance of his duties hereunder. The Executive may
continue to serve as a director of Cloverdale Press Inc., serve as a director of other for-profit
corporations with the consent of the Board (which consent shall not be unreasonably withheld),
engage in educational, charitable and/or civic activities, including service as a board member or
an advisor, engage in public speaking and manage his family and personal affairs, including any
investments, provided that any such activities do not conflict or compete with the Company’s
business activities and so long as such activities do not interfere with the Executive’s
responsibilities under this Agreement.
4. Compensation.
(a) Base Salary. As compensation for his services hereunder, during the Term, the
Company agrees to pay the Executive a base salary at the rate of Eight Hundred and Fifty Thousand
Dollars ($850,000) per annum (the “Base Salary”), effective as of the date of this Agreement,
payable ratably in accordance with the Company’s normal payroll schedule, but in no event less
frequently than semi-monthly. The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation. During the Term, the Executive’s Base Salary shall be reviewed at
least annually by the Board of DFC or the Compensation Committee of the Board of Directors of DFC
(the “Compensation Committee”) and may be increased from time to time as shall be determined by the
Board or the Compensation Committee. After any such increase, the term “Base Salary” as utilized
in this Agreement shall thereafter refer to the increased amount. Base Salary shall not be reduced
at any time without the express prior written consent of the Executive.
(b) Annual Bonus. For each full or partial year during the Term, the Executive will
be eligible to receive an annual cash bonus award with a target bonus of 100% of the Executive’s
Base Salary (as defined herein) in effect at the time such award is determined (the “Target Bonus”)
(with “Base Salary” for fiscal year 2008 deemed to be no less than $850,000), but not to exceed
150% of the Executive’s Base Salary, with such leverage curve and metrics determined by the
Compensation Committee and as applicable to other senior executives of the Company. Said bonus is
not guaranteed and is contingent upon the Executive and the Company achieving the corporate goals
as set by the Board of DFC or the Compensation Committee, with any such goals at the corporate
level being no less favorable to the Executive than those set for other senior executives of the
Company. The annual bonus will be confirmed by the Board of DFC or Compensation Committee and, to
the extent a bonus is awarded, unless
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the Executive elects to defer all or a portion of such bonus in manner which does not impose
any additional taxes, interest or penalties on the Executive pursuant to Section 409A of the
Internal Revenue Code of 1986, as amended from time to time, and its implementing regulations and
guidance (“Section 409A”), it shall be paid to the Executive in cash subsequent to the conclusion
of the Company’s annual audit, with a target payment date of seventy five (75) days following the
close of the relevant fiscal year of the Company but, in any event, any such bonus will be paid for
a given fiscal year within one hundred and twenty (120) days of the closing of the fiscal year.
During the Term, the Executive’s Target Bonus and maximum bonus opportunity as a percentage of Base
Salary shall be reviewed at least annually by the Board of DFC or the Compensation Committee and
may be increased from time to time as shall be determined by the Board or the Compensation
Committee. After any such increase, the term “Target Bonus” and the reference to the maximum bonus
opportunity as a percentage of Base Salary as utilized in this Agreement shall thereafter refer to
the increased amount. The Target Bonus and the maximum bonus opportunity as a percentage of Base
Salary shall not be reduced at any time without the express prior written consent of the Executive.
(c) Other Expenses. In addition to the compensation provided for above, during the
Term, the Company agrees to pay or to reimburse the Executive during his employment for all
reasonable, ordinary and necessary, properly vouchered, business or entertainment expenses incurred
in the performance of his services hereunder in accordance with Company policy in effect from time
to time. The Executive shall be entitled to the same class of travel as is consistent with the
Company’s policy and practice as of the date of this Agreement.
(d) Vacation. During the Term, the Executive will be allowed five (5) weeks of paid
vacation during each calendar year (including for all of 2007). To the extent that the Executive
is unable to use his accrued vacation leave in a given calendar year, he shall be permitted to
carry over his paid vacation leave and use it in subsequent years, and shall not forfeit his
accrued vacation leave.
(e) Car Lease/Allowance. During the Term, the Executive will be entitled to a car
allowance equal to the rate in effect on the date of this Agreement.
(f) Employee Benefits. In addition to his compensation provided by the foregoing,
during the Term, the Executive will be entitled to the health, welfare and tax-qualified retirement
benefits available generally to Company senior executives and employees pursuant to the plans,
policies, programs or arrangements of DFG, DFC or any of their affiliates on a basis no less
favorable to the Executive than provided to any other senior executive of the Company, including,
by way of illustration, personal leave, paid holidays, sick leave, profit-sharing, 401(k) plan,
other tax-qualified retirement, disability, dental, vision, group sickness, accident, or health
insurance programs of the Company or any affiliate which may now or, if not terminated, shall
hereafter be in effect, or in any other or additional such programs which may be established by the
Company or any affiliate, as and to the extent any such programs are or may from time to time be in
effect, as determined by the Company and the terms hereof, subject to the applicable terms and
conditions of the benefit plans in effect at that time. Except to the extent otherwise provided in
other clauses of this Section 4, nothing herein shall affect the Company’s ability to
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modify, alter, terminate or otherwise change any benefit plan it has in effect at any given
time, to the extent permitted by law. Notwithstanding anything herein to the contrary or
otherwise, except to the extent any expense, reimbursement or in-kind benefit provided pursuant to
Sections 4(c) and 4(e) and this Section 4(f) does not constitute a “deferral of compensation”
within the meaning of Section 409A (A) the amount of expenses eligible for reimbursement or in-kind
benefits provided to the Executive during any calendar year will not affect the amount of expenses
eligible for reimbursement or in-kind benefits provided to the Executive in any other calendar
year, (B) the reimbursements for expenses for which the Executive is entitled to be reimbursed
shall be made on or before the last day of the calendar year following the calendar year in which
the applicable expense is incurred and (C) the right to payment or reimbursement or in-kind
benefits hereunder may not be liquidated or exchanged for any other benefit.
(g) Annual Equity Awards. On or about November 15, 2007, November 1, 2008, November
1, 2009 and November 1, 2010 (each such date, the “Grant Date”), DFC shall grant to the Executive,
provided that he is employed by the Company on such date, an equity award subject to the following
terms and conditions: (i) any such award shall be subject to the terms and conditions of one or
more applicable equity incentive plans sponsored from time to time by DFC that has been approved by
the shareholders of DFC on or after the date hereof (collectively, the “Plan”) and the terms and
conditions set forth in any applicable award agreement issued under any such Plan; provided that if
there is a conflict between the Plan and any provision of this Agreement, the provision of this
Agreement shall govern; (ii) any such award may be in the form of restricted shares or stock
options, or some combination thereof, as determined in the sole discretion of the Compensation
Committee; (iii) to the extent that the award is in the form of options, the per share exercise
price shall be equal to the fair market value per share of common stock on the grant date as
defined in the applicable Plan, (iv) the number of shares subject to any such grant shall be
determined by Compensation Committee; provided, that the award shall be of such size and type to
require DFC to record an accounting charge, which shall be determined in accordance with generally
accepted accounting principles (GAAP) consistent with the assumptions DFC will use to estimate the
value of employee stock options and/or restricted stock, as applicable, in its 10-K for the year in
which the options or restricted shares, as applicable, are granted in an amount equal to one (1)
times the bonus amount that the Executive was paid (including any amount deferred) by the Company
for the immediately preceding fiscal year, the value of which for the November 15, 2007 award shall
be $612,003, and (v) awards will vest in equal annual installments on the first, second and third
anniversaries of the applicable Grant Date to the extent that, except as otherwise provided in
Section 5 hereof, the Executive is employed by the Company on such date. Notwithstanding anything
herein to the contrary, DFC shall not be required to make any equity grant pursuant to this Section
4(g) if and to the extent that, at the time of such grant, DFC does not have sufficient shares of
common stock to do so under any Plan or making such grant would, alone or in connection with any
other equity award, violate any limitation imposed by the Plan with respect to the number of shares
that may be awarded to the Executive within any given fiscal year; provided that DFC shall make the
grant up to the number of shares available and then award any remaining portion of the grant to the
Executive as soon as possible thereafter (with the “Grant Date” for purposes of the vesting for
such award being the original date the award should have been made hereunder). Notwithstanding
anything elsewhere to the contrary, upon a Change in
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Control (as defined in Section 5(a) below), all the Executive’s Equity Awards (as defined in
Section 5(c) below) shall vest immediately prior to and contingent on the consummation of such
event.
(h) Capstone Award. In recognition of the Executive’s service on the Board of
Directors of DFC, including his service as Chairman of the Board, and in recognition of the
Executive’s prior and future service to the Company, which in 2010 will reach 20 years, the
Executive will be entitled to receive a benefit at the rate of $300,000 per year, less applicable
tax withholding, payable in equal monthly installments during his lifetime on the first business
day of each such month (the “Capstone Award”) and, upon the Executive’s death, if the Executive has
remained married to his spouse on the date of this Agreement through his date of death, such spouse
will thereafter be entitled to receive $150,000 per year, less applicable tax withholding, payable
in equal monthly installments for her lifetime on the first business day of each such month (the
“Survivor Benefit”), if and when: (i) the Executive terminates his employment by reason of
Retirement (as defined below), in which case payments will commence in the month following the
effective date of Retirement; (ii) the Executive’s employment is terminated by the Company without
Cause (as defined below) or by the Executive’s resignation with Good Reason (as defined below), in
which case payments will commence in the month following the expiration of the Severance Period (as
defined below); or (iii) the Executive’s employment terminates by reason of his death or
Disability, in which case Capstone Award payments or Survivor Benefit payments, as applicable, will
commence in the month following the effective date of such termination by reason of death or
Disability. Notwithstanding the foregoing, if the Capstone Award or Survivor Benefit has commenced
prior to a change in control, any unpaid Capstone Award or Survivor Benefit shall be paid to the
Executive or his surviving spouse, as applicable, in the form of an actuarially equivalent lump sum
within 60 days following such change in control, with the actual payment date within that time
period within the Company’s sole discretion. If the Capstone Award or Survivor Benefit has not
commenced as of the date of a change in control, either such benefit, as applicable, shall be paid
in the form of an actuarially equivalent lump within 60 days following the change in control, with
the actual payment date within that time period within the Company’s sole discretion. Actuarial
equivalence for purposes of the foregoing sentences will be determined in good faith by the
Compensation Committee using (i) an interest rate equal to the average annual yield on a 30-year
U.S. Treasury security for the month in which the lump-sum payment will be made, and (ii) the
mortality table prescribed by the Secretary of the U.S. Treasury for the valuation of lump-sum
payment from qualified retirement plans. Notwithstanding anything herein to the contrary, if the
Executive terminates his employment without Good Reason or the Company terminates the Executive for
Cause (and, in either case, such termination occurs prior to a change in control, and is not a
termination by reason of Retirement), neither the Executive nor his surviving spouse shall be
entitled to any Capstone Award or Survivor Benefit under this Section 4(h); upon the consummation
of any change in control the Capstone Award or Survivor Benefit, if any, shall become
non-forfeitable. If the payment of the Capstone Award is subject to the requirements of Treas.
Reg. § 1.409A-3(i)(2) (or any successor provision), the Capstone Award (or the Survivor Benefit if
the Executive dies after a Separation From Service (as defined in Section 5(b) below)) due to be
paid to the Executive or his surviving spouse prior to the earlier of the Executive’s death or the
first business day of the seventh calendar month following the month in which the
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Separation From Service occurs shall be delayed and paid in a cash lump sum, with interest at
LIBOR, to the Executive or his survivor spouse, as the case may be, at the earlier of the
Executive’s death or the first business day of the seventh calendar month following the calendar
month in which the date of the Separation From Service occurs. For purposes of this Section 4(h),
“change in control” shall mean a Change in Control as defined below in Section 5(a), provided that
such Change in Control constitutes a change in the ownership or effective control of DFC or DFG (or
both), or a change in the ownership of a substantial portion of the assets of DFC or DFG, in each
case within the meaning of Treas. Reg. § 1.409A-3(i)(5).
(i) Additional Benefits. In addition to his compensation provided by the foregoing,
during the Term, the Executive will also be entitled to: (i) reimbursement up to an aggregate of
$100,000 annually for his purchase of up to $10,000,000 of term life insurance and/or disability
insurance, following delivery of proper documentation of those costs; (ii) reimbursement up to
$10,000 annually for reasonable tax and financial planning costs, following delivery of proper
documentation of those costs; (iii) reimbursement up to $15,000 annually for reasonable
out-of-pocket uninsured medical and dental costs and (iv) club memberships at the rate currently in
effect as of the date of this Agreement; provided, however, that except to the extent any such
expense, reimbursement or in-kind benefit does not constitute a “deferral of compensation” within
the meaning of Section 409A (A) the amount of expenses eligible for reimbursement or in-kind
benefits provided to the Executive during any calendar year will not affect the amount of expenses
eligible for reimbursement or in-kind benefits provided to the Executive in any other calendar
year, (B) the reimbursements for expenses for which the Executive is entitled to be reimbursed
shall be made on or before the last day of the calendar year following the calendar year in which
the applicable expense is incurred and (C) the right to payment or reimbursement or in-kind
benefits hereunder may not be liquidated or exchanged for any other benefit.
5. Employment Period; Termination.
(a) Commencement. The Executive’s employment pursuant to this Agreement shall
commence on the date of this Agreement (the “Commencement Date”), and shall continue thereafter
until December 31, 2010 (the “Initial Term”), and shall thereafter automatically renew for
additional one year periods (each, a “Renewal Term”), unless sooner terminated in accordance with
this Agreement or written notice is given by one party to the other at least One Hundred and Eighty
(180) days prior to the expiration of the Initial Term or any Renewal Term, as applicable. In the
event that either a definitive agreement is executed during the Term which would upon the
consummation of the closing thereunder result in a Change in Control (as defined in this Section
5(a) of this Agreement) or a Change in Control occurs during the Initial Term or a Renewal Term,
this Agreement shall automatically renew for an additional two year period (the “Change in Control
Term”) beginning on the date of the expiration of the Initial Term or Renewal Term, as applicable.
Following such a Change in Control Term, this Agreement shall automatically renew for additional
one year Renewal Terms, unless sooner terminated in accordance with this Agreement or written
notice is given by one party to the other at least One Hundred and Eighty (180) days prior to the
expiration of the Change in Control
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Term or any Renewal Term, as applicable. The Initial Term, any Renewal Term and any Change in
Control Term are herein collectively referred to as the “Term.”
For purposes of this Agreement, “Change in Control” shall mean, and be deemed to have occurred
upon: (i) a sale or transfer of substantially all of the assets of either DFC or DFG in any
transaction or series of related transactions (other than sales in the ordinary course of
business); (ii) any merger, consolidation or reorganization to which either DFC or DFG is a party,
except for an internal reorganization or a merger, consolidation or reorganization in which the
Company is the surviving corporation and, after giving effect to such merger, consolidation or
reorganization, the holders of the Company’s outstanding Common Stock (on a fully-diluted basis)
immediately prior to the merger, consolidation or reorganization will own, immediately following
the merger, consolidation or reorganization, capital stock holding a majority of the voting power
of the Company; (iii) any sale or series of sales of shares of the capital stock of DFC by the
holders thereof which results in any person or group of affiliated persons owning capital stock
holding twenty five percent (25%) or more of the voting power of DFG at the time of such sale or
series of sales; (iv) a circumstance where any individual, firm, corporation, limited liability
company, partnership, sole proprietorship, trust or other legally cognizable entity (“Person”)
other than an “Exempted Person” (as defined below) who or which, alone or together with any
affiliates or associates of that person, becomes the Beneficial Owner (as defined in Rule 13d-3 of
the Securities Exchange Act of 1934, as amended from time to time) of twenty-five percent (25%) or
more of the voting securities of DFC (including all securities or other interests in DFC having by
their terms ordinary voting power to elect members of the Board of Directors of DFC collectively
“Voting Securities”) except as a result of (y) any acquisition of DFC’s Voting Securities by the
Company, or (z) any acquisition of DFC’s Voting Securities directly from the Company, as authorized
by the Board; (v) any liquidation, dissolution or winding up of either DFC or DFG; (vi) any
circumstance by which the persons who constitute DFC’s Board of Directors as of the date hereof
cease for any reason to constitute a majority of the directors of DFC, unless the election or
nomination for election of each director who is not a director on the date hereof was approved by a
vote of no less than a two-thirds (2/3) of the directors then still in office who are directors on
the date hereof or are new directors approved by such vote; or (vii) DFC ceases to be a company
whose common stock is publicly traded on a major United States stock exchange such as the NYSE or
NASDAQ.
For purposes of this Agreement, an “Exempted Person” shall be defined as: (i) the Executive or any
group (as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934) of which the
Executive is a member; (ii) any Person that controls (as defined in Rule 12b-2 of the Securities
Exchange Act of 1934) the Company as of the date of this Agreement or any group of which any such
Person is a member; (iii) 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
Company’s Voting Securities; or (iv) any employee benefit plan or related trust that is maintained
or sponsored by the Company or any of its subsidiaries, or any trustee or other fiduciary of the
Company or any Subsidiary.
(b) Employment Period. The Employment Period under this Agreement shall commence on
the Commencement Date and shall continue until the earlier of the expiration
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of the Term or the effective date of the termination of the Executive’s employment pursuant to
Section 5 of this Agreement. For the avoidance of doubt, any termination by either DFG or DFC of
the Executive’s employment shall be deemed to be a termination of the Executive’s employment by the
Company for purposes of this Agreement. For purposes of determining under Section 409A whether
there has been a “separation from service” with the meaning of Treasury Regulation Section
1.409A-1(h) (or any successor regulation), the Executive shall be deemed to have incurred a
separation from service if his employment has been terminated in accordance with Sections 5(c)
through Section 5(j) hereof and he is performing less than 50% of the average level of bona fide
services he was performing for the Company in the immediately preceding 36-month period
(“Separation From Service”).
(c) Termination By Executive Without Good Reason. Notwithstanding the provisions of
paragraphs 5(a) and (b) above, the Executive may terminate the employment relationship at any time
for any reason by giving the Company written notice at least thirty (30) days prior to the
effective date of termination and such termination shall not be deemed to be a breach by the
Executive of this Agreement. Such termination shall constitute the Executive’s resignation from
the Boards. The Company, at its election, may (i) require the Executive to continue to perform his
duties hereunder for the full thirty (30) day notice period, or (ii) terminate the Executive’s
employment at any time during such thirty (30) day notice period, provided that any such
termination shall not be deemed to be a termination of the Executive’s employment by the Company
without Cause. Upon such termination, the Executive shall be entitled to: (i) any Base Salary
earned through the effective date of termination that remains unpaid and any accrued but unpaid
vacation time, with any such amounts paid on the first regularly scheduled payroll date following
the effective date of termination; (ii) any bonus payable pursuant to paragraph 4(b) with respect
to any fiscal year which ended prior to the effective date of the Executive’s termination of
employment, which remains unpaid, with such amount paid in the first regularly scheduled payroll
date following the effective date of termination or, if later, at the same time the bonus would
have been payable to the Executive under Section 4(b) hereof; (iii) any reimbursement or payment
due to the Executive on or prior to the date of such termination which remains unpaid to the
Executive pursuant to the terms of Sections 4(c), 4(e), 4(f) and/or 4(i), with any such payment
being made promptly following the effective date of termination but in no event later than the date
set forth in Section 4(f) or Section 4(i), as applicable; (iv) any right, payment or benefit that
accrued or became due to the Executive prior to the date of such termination which remains unpaid
to the Executive under Section 4(h) (Capstone Award), if any, or pursuant to any applicable plans,
programs, policies or arrangements of the Company or any affiliate in which the Executive
participated as of the effective date of termination, including, without limitation, any plans or
agreements relating to the vested portion of any stock options, restricted stock or similar equity
interests awarded to the Executive prior to the date of such termination, or the vested portion of
any equity awards granted to the Executive prior to the date of such termination in connection with
any long-term incentive program in which he has participated while employed by DFG, DFC or any of
their affiliates (the “Equity Awards”), and (v) any right, payment or benefit due or that becomes
payable under Section 5(k) (Section 280G of the Code), Section 19 (Indemnification) or Section 20
(Attorneys’ Fees and Expenses) (clauses (i) through (v), collectively “Accrued and Other
Obligations”). In addition, any Equity Awards which are vested as of the effective date of
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termination shall not be forfeited and, if applicable, shall remain exercisable pursuant to
their existing terms and conditions.
(d) Termination By Company For Cause. The Company may immediately terminate the
Executive’s employment hereunder for “Cause.” Such termination shall constitute the Executive’s
resignation from the Boards. If the Executive’s employment is terminated for “Cause,” the
Executive will not be entitled to and shall not receive any compensation or benefits of any type
following the effective date of termination other than the Accrued and Other Obligations; provided,
however, that any outstanding Equity Awards that were granted on or after the date of this
Agreement and held by the Executive as of the effective date of any such termination will
immediately be forfeited. As used in this Agreement, the term “Cause” shall mean (i) the
Executive’s willful and continued failure to substantially perform his material duties for the
Company (other than on account of vacation, personal time off, approved leave of absence and/or
Disability or after receipt by the Executive of a notice that his employment is being terminated
without Cause by the Company or after Executive gives notice to the Company that he has grounds to
resign for Good Reason); (ii) the Executive is convicted of, or enters a plea of guilty or nolo
contendere to, (A) a felony (other than a minor traffic violation) or (B) a crime involving moral
turpitude; or (iii) in carrying out his duties under the Agreement, the Executive engages in (x)
willful gross neglect causing material harm to the Company or its business or (y) willful and
material misconduct relating to the business of the Company. For purposes of this “Cause”
definition, no act or omission by the Executive shall be deemed to be “willful” if the Executive
had a good faith belief that such act or omission was in, or not opposed to, the best interests of
the Company or its affiliates. Anything herein to the contrary notwithstanding, the Executive shall
not be terminated for “Cause,” within the meaning of clauses (i) and (iii) of this paragraph,
unless written notice stating the basis for the termination is provided to the Executive and, if
such neglect or conduct is reasonably curable, he is given no less than 20 days to cure the neglect
or conduct that is the basis of such claim and, if he fails to cure such neglect or conduct or such
neglect or conduct is not reasonably curable, the Executive has an opportunity to be heard before
the full Board of DFC (represented by counsel) and, after such hearing, there is a vote of a
majority of the members of the Board (not counting the Executive) to terminate Executive’s
employment for Cause.
(e) Termination By Company Without Cause. Upon thirty (30) days written notice, the
Company shall retain the right to terminate the Executive without Cause. Such termination shall
constitute the Executive’s resignation from the Boards and termination of his employment with the
Company on the 30th day following the Executive’s receipt of such notice. Unless
otherwise provided by this Section, all compensation and benefits paid by the Company to the
Executive shall cease upon his last day of employment. Subject to Section 5(l) below, if the
Executive’s employment is terminated by the Company without Cause, the Executive shall be provided
with the following severance package:
(i) The Executive shall continue to receive an amount equivalent to his Base Salary for a
period of twenty four (24) months following the Separation From Service (the “Severance Period”),
with such amount to be paid to the Executive in substantially equal installments bi-weekly;
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(ii) The Executive shall receive an amount equal to two (2) times his Target Bonus, with said
amount to be paid to the Executive over a period of twenty four (24) months in 24 equal
installments, with each payment being made on the first business day of each calendar month, with
the first payment being made in the month following the month in which the Separation From Service
occurs;
(iii) The Executive shall receive a lump sum payment for his annual bonus (as contemplated
under Section 4(b) of this Agreement), which shall be equal to the product of (A) the Target Bonus
for the bonus year in which the Executive’s Separation From Service occurs multiplied by (B) a
fraction, the numerator of which will be the number of days elapsed from the beginning of the
annual bonus determination period to the date of the Separation From Service, and the denominator
of which will be 365, payable within 30 days following the date the Separation From Service occurs,
with such payment date within such time period within the Company’s sole discretion;
(iv) During the Severance Period, the Company shall continue to contribute to the cost of the
Executive’s (including his dependents’) group health plan (including medical and dental) coverage
by contributing an amount equal to the amount paid by the Company towards its “group health plans”
(within the meaning of ERISA) for active Company employees towards the Executive’s (including his
dependents’) COBRA premium, but only to the extent that the Executive applies for and otherwise
remains eligible for health care continuation coverage under COBRA throughout the Severance Period,
provided that, to the extent COBRA continuation coverage eligibility expires before the end of the
Severance Period, the Executive will receive payment, on an after-tax basis, of an amount equal to
the premium the Company would have otherwise contributed to COBRA coverage pursuant to this Section
5(e)(iv); provided that to the extent that the foregoing medical and dental benefits are taxable to
the Executive, any medical or dental reimbursements shall be paid to the Executive promptly but in
all events on or before the last day of the Executive’s taxable year following the taxable year in
which the expense is incurred and provided further that any tax gross-up payment to the Executive
pursuant to this Section 5(e)(iv) shall be paid to the Executive on or before the last day of the
Executive’s taxable year following the taxable year in which the Executive (or the Company) remits
the related taxes.
(v) Any Equity Award held by the Executive as of the effective date of his termination will
immediately become fully vested as of such date and, if applicable, remain exercisable for the
period beginning on the effective date of the Executive’s termination and ending on the sooner of
twenty four (24) months from the effective date of the Executive’s termination, the latest date
upon which the Equity Award would have expired by its original terms if the Executive had remained
employed indefinitely or the 10th anniversary of the original date of grant of the
Equity Award.
(vi) The Accrued and Other Obligations (as defined in Section 5(c) above).
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The benefits and compensation described in Sections 5(e)(i) through (v) that the Executive shall
receive is referred to jointly herein as the Severance Compensation.
The Company shall not be obligated to pay or provide to the Executive any Severance Compensation
due and owing to him on or after the date that he willfully and materially breaches Section 7
and/or Section 8 of this Agreement; provided, however, that before the Company ceases paying or
providing any such Severance Compensation, the Company shall give the Executive written notice of
the event or events giving rise to such forfeiture and no less than twenty (20) days to cure and if
the Executive cures such event or events, the Severance Compensation shall continue to be paid or
provided as set forth herein. Whether the Executive has willfully and materially breached Section
7 and/or Section 8 shall be subject to de novo review in accordance with Section 18 below. Also,
no Severance Compensation shall be paid to the Executive until he executes and delivers to the
Company, and does not revoke in the time period provided therein, the release attached hereto as
Exhibit A. Upon the Executive delivering and not revoking such Release, DFG and DFC agree to
execute and promptly deliver the Release attached hereto as Exhibit B to the Executive. If the
Executive delivers and does not revoke the Release in the time period provided therein, the
Severance Compensation shall be due and payable to him; provided, however, that such Release shall
not be effective as a release of claims until the Company delivers the Release attached hereto as
Exhibit B to the Executive. The parties hereto acknowledge that the Severance Compensation to be
provided under this Section 5(e) is to be provided in consideration for the above-specified
release. The Severance Compensation described in this Section 5(e) supersedes any other severance
payment provided by any Company policy, plan or practice. Therefore, the Executive acknowledges
and agrees that he is not eligible to receive any severance payment under any other Company
severance policy, plan or practice.
(f) Termination for Executive’s Permanent Disability. To the extent permissible under
applicable law, in the event the Executive becomes permanently disabled during the Term, either the
Executive or the Company may terminate the Executive’s employment under this Agreement by giving
thirty (30) days notice to the other Party of its or his intent to terminate, and unless the
Executive resumes performance of the duties set forth in Paragraph 3 within five (5) days of the
date of the notice and continues performance for the remainder of the notice period, the
Executive’s employment under this Agreement shall terminate at the end of the thirty (30) day
period. Any such termination shall constitute the Executive’s resignation from the Boards.
“Permanently disabled” for the purposes of this Agreement means the Executive’s inability to engage
in any substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months. “Disability” for purposes of this Agreement means the
Executive’s being permanently disabled. Unless otherwise provided by this Section, all
compensation and benefits paid by the Company to the Executive shall cease upon his last day of
employment. If the Executive’s employment is terminated by the Company pursuant to this Section
5(f), the Executive shall be provided with the following severance package:
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(i) The Executive shall receive a lump sum payment for his annual bonus (as contemplated under
Section 4(b) of this Agreement), which shall be equal to the product of (A) the Target Bonus for
the fiscal year in which the Executive’s employment is terminated multiplied by (B) a fraction, the
numerator of which will be the number of days elapsed from the beginning of the annual bonus
determination period to the date of termination, and the denominator of which will be 365, payable
within 30 days following the termination date, with such payment date within such time period
within the Company’s sole discretion;
(ii) During the twenty four (24) months following the effective date of his termination
pursuant to this Section 5(f) (the “Disability Severance Period”), the Company shall continue to
contribute to the cost of the Executive’s (including his dependents’) group health plan (including
medical and dental) coverage by contributing an amount equal to the amount paid by the Company
towards its “group health plans” (within the meaning of ERISA) for active Company employees towards
the Executive’s (including his dependents’) COBRA premium, but only to the extent that the
Executive applies for and otherwise remains eligible for health care continuation coverage under
COBRA throughout the Severance Period, provided that, to the extent COBRA continuation coverage
eligibility expires before the end of the Severance Period, the Executive will receive payment, on
an after-tax basis, of an amount equal to the premium the Company would have otherwise contributed
to COBRA coverage pursuant to this Section 5(f)(ii); provided that to the extent that the foregoing
medical and dental benefits are taxable to the Executive, any medical or dental reimbursements
shall be paid to the Executive promptly but in all events on or before the last day of the
Executive’s taxable year following the taxable year in which the expense is incurred and provided
further that any tax gross-up payment to the Executive pursuant to this Section 5(f)(ii) shall be
paid to the Executive on or before the last day of the Executive’s taxable year following the
taxable year in which the Executive (or the Company) remits the related taxes;
(iii) Any outstanding Equity Award held by the Executive as of the effective date of his
termination will have its vesting accelerated by one year to the effective date of termination and
will remain exercisable, if applicable, for a period beginning on the effective date of the
Executive’s termination and ending on the sooner of twenty four (24) months from the effective date
of the Executive’s termination, the latest date upon which the Equity Award would have expired by
its original terms if the Executive had remained employed indefinitely or the 10th
anniversary of the original date of grant of the Equity Award; and
(iv) The Accrued and Other Obligations.
The benefits and compensation described in Sections 5(f)(i) through (iii) that the Executive shall
receive is referred to jointly herein as the “Disability Severance Compensation.” The Company
shall not be obligated to pay or provide to the Executive any Disability Severance Compensation due
and owing to him on or after the date that he willfully and materially breaches Section 7 and/or
Section 8 of this Agreement; provided, however, that before the Company ceases paying or providing
any such Disability Severance Compensation, the Company shall give the Executive written notice of
the event or events giving rise to such forfeiture and no less than twenty (20) days to cure and if
the Executive cures such event or events, the Disability
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Severance Compensation shall continue to be paid or provided as set forth herein. Whether the
Executive has willfully and materially breached Section 7 and/or Section 8 shall be subject to de
novo review in accordance with Section 18 below. Also, no Disability Severance Compensation shall
be paid to the Executive until he executes and delivers to the Company, and does not revoke in the
time period provided therein, the release attached hereto as Exhibit A. Upon the Executive
delivering and not revoking such Release, DFG and DFC agree to execute and promptly deliver the
Release attached hereto as Exhibit B to the Executive. If the Executive delivers and does not
revoke the Release in the time period provided therein, the Disability Severance Compensation shall
be due and payable to him; provided, however, that such Release shall not be effective as a release
of claims until the Company delivers the Release attached hereto as Exhibit B to the Executive.
The parties hereto acknowledge that the Disability Severance Compensation to be provided under this
Section 5(f) is to be provided in consideration for the above-specified release. The Disability
Severance Compensation described in this Section 5(f) supersedes any other severance payment
provided by any Company policy, plan or practice. Therefore, the Executive acknowledges and agrees
that he is not eligible to receive any severance payment under any other Company severance policy,
plan or practice. The foregoing will not be construed to limit the Executive’s right to payment or
reimbursement for claims under any disability plan, policy or arrangement of the Company in
accordance with the terms of such plan, policy or arrangement.
(g) Termination Due To Executive’s Death. In the event that the Executive dies during
the Term, the Executive’s employment under this Agreement shall terminate as of the date of the
Executive’s death. Unless otherwise provided by this Section, all compensation and benefits paid
by the Company to the Executive shall cease upon his death. A termination due to the Executive’s
death shall be treated for severance purposes as a Termination pursuant to Section 5(f) (concerning
termination in the event of the Executive’s Permanent Disability) and the Executive’s estate (or
beneficiaries with respect to benefits described in Section 5(f)(ii)) shall be entitled to receive
all of the payments, entitlements and benefits set forth in Section 5(f)(i) through (iv) above.
(h) Termination by Executive at Retirement.
(i) In the event that the Executive’s employment terminates by reason of Retirement (as
defined below), the Executive’s employment under this Agreement shall terminate as of the effective
date of such Retirement. Such termination shall constitute the Executive’s resignation from the
Boards. Unless otherwise provided by this Section, all compensation and benefits paid by the
Company to the Executive shall cease upon his last day of employment. A termination due to the
Executive’s Retirement shall be treated as a Termination pursuant to Section 5(e) (concerning
termination without Cause) except that the Executive shall only be entitled to receive the
Severance Compensation identified in Section 5(e)(iv) and (v), provided only that the Executive
executes and delivers the Release attached hereto as Exhibit A and does not revoke it during the
applicable revocation period provided therein. Upon the Executive delivering and not revoking such
Release, DFG and DFC agree to execute and promptly deliver the Release attached hereto as Exhibit B
to the Executive. If the Executive delivers and does not revoke the Release in the time period
provided therein, the entitlement
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under this Section 5(h) shall be due and payable to him; provided, however, that such Release
shall not be effective as a release of claims until the Company delivers the Release attached
hereto as Exhibit B to the Executive. The Executive shall also be entitled to receive a lump sum
payment for his annual bonus (as contemplated under Section 4(b)), payable on the date that it
would have otherwise been paid pursuant to Section 4(b) but for the Executive’s termination of
employment, equal to the product of (A) the annual bonus the Executive would have otherwise earned
pursuant to Section 4(b) (determined assuming the Executive met any personal or subjective
performance objectives at no less than target), multiplied by (B) a fraction, the numerator of
which will be the number of days elapsed from the beginning of the annual bonus determination
period to the date of termination, and the denominator of which will be 365. The Executive shall
also be entitled to receive the Accrued and Other Obligations. For purposes of this Section 5(h),
“Retirement” means any voluntary termination by the Executive of his employment on or after
December 31, 2010, or any termination by the Company for any reason on or after December 31, 2012;
provided that if the Company gives the Executive a notice of non-renewal of the Initial Term, any
Renewal Term or the Change in Control Term pursuant to Section 5(a), the Executive’s employment
shall terminate upon the expiration of the Term and such termination shall be deemed to be a
“Retirement” for purposes of this Agreement.
(ii) The Company shall not be obligated to pay or provide to the Executive any benefits or
payments under Section 5(h)(i) (the “Retirement Benefits”) due and owing to him on or after the
date that he willfully and materially breaches Section 7 and/or Section 8 of this Agreement;
provided, however, that before the Company ceases paying or providing any such Retirement Benefits,
the Company shall give the Executive written notice of the event or events giving rise to such
forfeiture and no less than twenty (20) days to cure and if the Executive cures such event or
events, the Retirement Benefits shall continue to be paid or provided as set forth herein. Whether
the Executive has willfully and materially breached Section 7 and/or Section 8 shall be subject to
de novo review in accordance with Section 18 below. Also, no Retirement Benefits shall be paid to
the Executive until he executes and delivers to the Company, and does not revoke in the time period
provided therein, the release attached hereto as Exhibit A. Upon the Executive delivering and not
revoking such Release, DFG and DFC agree to execute and promptly deliver the Release attached
hereto as Exhibit B to the Executive. If the Executive delivers and does not revoke the Release in
the time period provided therein, the Retirement Benefits shall be due and payable to him;
provided, however, that such Release shall not be effective as a release of claims until the
Company delivers the Release attached hereto as Exhibit B to the Executive. The parties hereto
acknowledge that the Retirement Benefits to be provided under this Section 5(h) is to be provided
in consideration for the above-specified release. The Retirement Benefits described in this
Section 5(h) supersedes any other severance payment provided by any Company policy, plan or
practice. Therefore, the Executive acknowledges and agrees that he is not eligible to receive any
severance payment under any other Company severance policy, plan or practice.
(i) Termination by Executive for “Good Reason”. Subject to the provisions outlined
below, at any time after the date the Executive commences employment under this Agreement, upon
thirty (30) days’ written notice to the Company and no later than one hundred and twenty (120) days
after the occurrence of any event giving rise to “Good Reason”
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(as defined below), the Executive shall have the right to terminate his employment under this
Agreement for Good Reason. Such termination shall constitute the Executive’s resignation from the
Boards. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the
following events without either the Executive’s prior express written consent or full cure by the
Company within thirty (30) days after the Executive gives written notice to the Company describing
the event and requesting cure:
(i) any material diminution in the Executive’s authorities, titles or offices, including,
without limitation, any authorities set forth in paragraph 3(b) above;
(ii) any change in the reporting structure so that Executive reports to someone other than the
Board of DFG as Chief Executive Officer of DFG or to the Board of DFC as Chief Executive Officer of
DFC;
(iii) any material diminution in the Executive’s Base Salary, Target Bonus opportunity as a
percentage of Base Salary or maximum bonus opportunity as a percentage of Base Salary as set forth
in paragraph 4(b) above;
(iv) failure to appoint or elect (or re-elect) the Executive as a member of the Board of DFC
and DFG and as CEO of DFC and DFG or removal of the Executive from any such position;
(v) failure of the Executive to be the sole senior most executive officer of the Company or,
following a Change in Control (as defined in Section 5(a) hereof), failure of the Executive to be a
member of the Board and CEO of the successor entities (including, without limitation, the ultimate
parent of such entity);
(vi) any material breach by DFG, DFC or any of their affiliates, of this Agreement, including
a failure by the Company to pay, grant or provide the Executive any amount, entitlement or benefit
under this Agreement within 90 days of the date it should have been paid, granted or provided; or
(vii) the dissolution or liquidation of DFG or DFC or any failure of DFG or DFC to obtain the
assumption in writing of its obligation to perform this Agreement by any successor to all or
substantially all of its assets at the time of the merger, consolidation, sale or similar
transaction, except where such assumption occurs by operation of law.
Delivery by the Company to the Executive of a notice of non-renewal of the Initial Term or any
Renewal Term pursuant to Section 5(a) shall in no event give the Executive the right to terminate
his employment under this Agreement for Good Reason. Unless otherwise provided by this Section 5,
all compensation and benefits paid by the Company to the Executive shall cease upon his last day of
employment. If the Executive terminates his employment for Good Reason on or within 2 years
following a change in control (as defined in Section 5(j) of this Agreement), then the Executive
shall receive the compensation and benefits set forth in Section 5(j) applicable to termination of
the Executive’s employment in relation to a Change in Control, subject to the Executive executing
and delivering to the Company the Release attached
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hereto as Exhibit A and not revoking the Release within the time period provided therein. If
the Executive terminates his employment for Good Reason otherwise than in connection with a Change
in Control, then the Executive shall, subject to the conditions set forth in last paragraph of
Section 5(e) applicable to Severance Compensation (relating to the execution and non-revocation of
the Release and satisfaction of his obligations under Section 7 and Section 8), receive the
compensation and benefits set forth in Section 5(e) applicable to termination of the Executive’s
employment by the Company without Cause. In both cases, upon the Executive delivering and not
revoking such Release, DFG and DFC agree to execute and promptly deliver the Release attached
hereto as Exhibit B to the Executive. If the Executive delivers and does not revoke the Release in
the time period provided therein, the applicable benefits described in this Section 5(i) shall be
due and payable to him; provided, however, that such Release shall not be effective as a release of
claims until the Company delivers the Release attached hereto as Exhibit B to the Executive.
(j) Termination Without Cause in Connection with a “Change of Control.” In the event
that on or within Twenty Four (24) months following a change of control, (with this time period
being referred to as the “Change of Control Period”), the Executive’s employment with the Company
is either (a) terminated by the Company without Cause, or (b) terminated by the Executive for “Good
Reason”, the Executive shall be entitled to the severance benefits provided for in Section 5(e) of
this Agreement, subject to the conditions set forth in last paragraph of Section 5(e) applicable to
Severance Compensation (relating to the execution and non-revocation of the Release and
satisfaction of his obligations under Section 7 and/or Section 8); provided, however, that in lieu
of the benefit described in Section 5(e)(i) and 5(e)(ii), the Executive shall be entitled to a cash
lump sum payment equal to two (2) times the sum of his Base Salary and Target Bonus, payable within
60 days following the date of the Separation From Service, with such payment date within the
Company’s sole discretion. Upon the Executive delivering and not revoking such Release, DFG and
DFC agree to execute and promptly deliver the Release attached hereto as Exhibit B to the
Executive. If the Executive delivers and does not revoke the Release in the time period provided
therein, the benefits described in this Section 5(j) shall be due and payable to him; provided,
however, that such Release shall not be effective as a release of claims until the Company delivers
the Release attached hereto as Exhibit B to the Executive. For purposes of this Section 5(j),
“change in control” shall mean a Change in Control as defined below in Section 5(a), provided that
such Change in Control constitutes a change in the ownership or effective control of DFC or DFG (or
both), or a change in the ownership of a substantial portion of the assets of DFC or DFG, in each
case within the meaning of Treas. Reg. § 1.409A-3(i)(5). The enhanced Severance Compensation
described in this Section 5(j) supersedes any other severance payment provided by any Company
policy, plan or practice. Therefore, the Executive shall be disqualified from receiving any
severance payment under any other Company severance policy, plan or practice. Unless otherwise
provided by this Section 5, all compensation and benefits paid by the Company to the Executive
shall cease upon his last day of employment.
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(k) Section 280G of the Code.
(i) Gross-Up Payment. If the Total Payments would result in the imposition of a
Parachute Excise Tax on the Executive, the Company will make an additional payment to the Executive
in an amount (“Gross-Up Payment”) such that, after the payment of all taxes (including, without
limitation, federal, state and local income, employment, excise and other similar taxes) on both
the Total Payments and the additional payment made pursuant to this Section 5(k)(i), the Executive
will be in the same after-tax position as if no Parachute Excise Tax had been imposed.
Notwithstanding any other provision of this Agreement, no additional payment will be made to the
Executive pursuant to this Section 5(k)(i), and the Total Payments will instead be reduced or
limited to the Capped Amount, if the additional payment described in the preceding sentence would
not cause the Total After-Tax Payments to exceed the Capped Amount (after reduction for all
applicable taxes) by more than 10%; provided, however, any reduction to Total Payments shall be
made first to any cash severance. Any Gross-Up Payment, as determined pursuant to this Section
5(k), shall be timely paid by the Company on behalf of the Executive directly to the appropriate
taxing authorities but in all events no later than the last day of the calendar year after the
calendar year in which the applicable Parachute Excise Tax shall be paid.
(ii) Measurements and Adjustments. The determination of whether the aggregate
payments, benefits, entitlements or distributions made or provided to the Executive under this
Agreement and under all other plans, programs and agreements of the Company (or any entity
effecting the Change in Control) constitutes Total Payments and, if so, the amount to be paid to
the Executive and the time of payment pursuant to this Section 5(k) shall be made by an independent
auditor (the “Auditor”) selected by the Parties. The Auditor shall be a nationally recognized
United States public accounting firm which has not, during the two years preceding the date of its
selection, acted in any way on behalf of the Company or any affiliate thereof. If the Executive
and the Company cannot agree on the firm to serve as the Auditor, then the Executive and the
Company shall each designate one accounting firm and those two firms shall jointly select the
accounting firm to serve as the Auditor. All fees and expenses of the Auditor shall be borne
solely by the Company. Any determination by the Auditor shall be binding upon the Company and the
Executive, except as described in the next paragraph.
(iii) Underpayment or Overpayment. As a result of uncertainty in the application of
Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended from time to time, at the
time of the initial determination by the Auditor hereunder, it is possible that the Gross-Up
Payment made will have been an amount more than the Company should have paid pursuant to this
Section 5(k)(i) (the “Overpayment”) or that the Gross-Up Payment made will have been an amount less
than the Company should have paid pursuant to this Section 5(k)(i) (the “Underpayment”). In the
event that there is a final determination by the Internal Revenue Service, or a final determination
by a court of competent jurisdiction, that an Overpayment has been made, any such Overpayment shall
repaid to the Company by the Executive within 30 days of such determination. In the event that
there is a final determination by the Internal Revenue Service, or a final determination by a court
of competent jurisdiction, any such Underpayment shall be promptly paid by the Company to or for
the benefit of the Executive together with
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interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code, within 30
days of such determination. The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would result in an Underpayment and would require the
payment by the Company of an additional Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of
the 30 calendar day period following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(A) give the Company any information reasonably requested by the Company relating to
such claim,
(B) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company,
(C) cooperate with the Company in good faith in order effectively to contest such
claim, and
(D) permit the Company to participate in any proceeding relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any Parachute
Excise Tax or income or employment tax (including interest and penalties with respect
thereto) imposed as a result of such proceeding and payment of costs and expenses; with any
such payment being timely paid by the Company on behalf of the Executive directly to the
appropriate taxing authorities but in all events Executive shall be paid the amounts due
pursuant to this provision no later than the last day of the year following the year in
which the taxes that are the subject of the proceeding or claim are remitted to the taxing
authority, or if no taxes are due as result of any such proceeding or claim, the end of the
year following the year in which the proceeding or claim is completed or settled.
(iv) Definitions. For purposes of this Agreement:
(A) The term “Total Payments” means the total of all “parachute payments” (as that term is
defined in Section 280G(b)(2) of the Code, but determined without regard to Section
280G(b)(2)(A)(ii)) made to or for the benefit of the Executive, whether made under this Agreement
or otherwise (including any payments, entitlements or benefits made or provided to the Executive
(or on his behalf) by the entity effecting the change in control);
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(B) The term “Total After-Tax Payments” means the total value of all “parachute payments” (as
that term is defined in Section 280G(b)(2) of the Code) made to or for the benefit of the Executive
(whether made under this Agreement or otherwise) (including any payments, entitlements or benefits
made or provided to the Executive (or on his behalf) by the entity effecting the change in
control), after reduction for all applicable taxes (including, without limitation, the Parachute
Excise Tax);
(C) The term “Parachute Excise Tax” means the federal excise tax levied on certain “excess
parachute payments” under Section 4999 of the Code or any successor provision; and
(D) The term “Capped Amount” means the largest amount payable to the Executive without causing
the application of a Parachute Excise Tax.
For the avoidance of doubt, this Section 5(k) applies without regard to whether the
Executive’s employment has been terminated.
(l) Section 409A. Notwithstanding anything to the contrary in this Agreement or
elsewhere, if Executive is a “specified employee” as determined pursuant to Section 409A of the
Code as of the date of Executive’s Separation From Service and if any payment or benefit provided
for in this Agreement or otherwise both (x) constitutes a “deferral of compensation” within the
meaning of Section 409A and (y) cannot be paid or provided in the manner otherwise provided without
subjecting Executive to “additional tax”, interest or penalties under Section 409A, then any such
payment or benefit that is payable during the first six months following Executive’s Separation
From Service shall be paid or provided to Executive in a cash lump-sum, with interest at LIBOR, on
the first business day of the seventh calendar month following the month in which Executive’s
Separation From Service occurs. In addition, any payment or benefit due upon a termination of
Executive’s employment that represents a “deferral of compensation” within the meaning of Section
409A shall only be paid or provided to Executive upon a Separation From Service (as defined in
Section 5(b) above). Notwithstanding anything to the contrary in this Section 5 or elsewhere, any
payment or benefit under this Section 5, or otherwise, that is exempt from Section 409A pursuant to
Final Treasury Regulation 1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to Executive only
to the extent that the expenses are not incurred, or the benefits are not provided, beyond the last
day of the second taxable year of Executive following the taxable year of Executive in which the
Separation From Service occurs; and provided further that such expenses are reimbursed no later
than the last day of the third taxable year following the taxable year of Executive in which the
Separation From Service occurs. Finally, for the purposes of this Agreement, amounts
payable under Section 5 shall be deemed not to be a “deferral of compensation” subject to Section
409A to the extent provided in the exceptions in Treasury Regulation Sections 1.409A-1(b)(4)
(“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception under
subparagraph (iii)) and other applicable provisions of Treasury Regulation Section 1.409A-1 through
A-6.
(m) Continuing Obligations. The Executive acknowledges and agrees that the
non-competition and non-solicitation restrictions set forth in Sections 7 and 8 of this Agreement
will remain in full force and effect for a period of twenty four (24) months following
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the termination of his employment for any reason. Furthermore, the obligations imposed on the
Executive with respect to confidentiality, non-disclosure and assignment of rights to inventions or
developments in this Agreement shall continue, notwithstanding the termination of the employment
relationship between the parties.
6. Company Property. All correspondence, records, documents, software, promotional materials,
and other Company property, including all copies, which come into the Executive’s possession by,
through or in the course of his employment, regardless of the source and whether created by the
Executive, are the sole and exclusive property of the Company, and immediately upon the termination
of the Executive’s employment, or at any time the Company shall request, the Executive shall return
to the Company all such property of the Company, without retaining any copies, summaries or
excerpts of any kind or in any format whatsoever. The Executive further agrees that should he
discover any Company property or Confidential Company Information in his possession after the
return of such property has been requested, the Executive agrees to return it promptly to Company
without retaining copies, summaries or excerpts of any kind or in any format whatsoever. Anything
to the contrary notwithstanding, the Executive shall be entitled to retain (a) papers and other
materials of a personal nature, including, but not limited to, correspondence, personal diaries,
calendars and Rolodexes, personal files, phone books and, only to the extent set forth on Schedule
1 attached hereto, photographs and artwork, (b) information showing his compensation and relating
to reimbursement of expenses, (c) information that he reasonably believes may be needed for tax
purposes, (d) copies of plans, programs and agreements relating to his employment or termination
thereof, with the Company and (e) minutes, presentation materials and personal notes from any
meeting of the Board of DFG or DFC, or any committee thereof, while he was a member of such Board.
7. Non-Competition. In consideration of the compensation and other benefits to be paid to the
Executive pursuant to this Agreement, the Executive agrees that he will not, without prior written
consent of the Board of DFC, during the Term and for a period of twenty four (24) months after his
termination of employment for any reason:
(a) directly or indirectly engage in the United States, Canada or any other country in which
Company or any affiliate or subsidiary now or hereafter during the Executive’s period of
employment, conducts business, in any activity which, or any activity for any enterprise or entity
a material part of the business of which, is competitive with the business conducted by Company at
the time of termination or any business that the Company had active and bona fide plans to engage
in at the effective date of the Executive’s termination of employment with the Company, either as
an officer, director, employee, independent contractor or as a 2% or greater owner, partner, or
stockholder in a publicly traded entity (“Competitive Business”); or
(b) directly or indirectly cause or request a curtailment or cancellation of any significant
business relationship that Company, or any affiliate or subsidiary of the Company, has with a
current or prospective vendor, business partner, supplier or other service or goods provider that
would have a material adverse impact on the business of Company, its affiliates or subsidiaries.
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Notwithstanding the foregoing, the Executive shall not be deemed to be in breach of this Section 7
if he provides services to (or engages in activities involving): (x) a subsidiary, division or
affiliate of a Competitive Business and the subsidiary is not itself engaged in a Competitive
Business and the Executive does not provide services to, or have any responsibilities regarding,
the Competitive Business, (y) any entity which is, or is a general partner in, or manages or
participates in managing, a private or public fund (including, without limitation, a hedge fund),
or other investment vehicle, that is engaged in venture capital investments, leveraged buy-outs, or
investments in public or private companies at the mezzanine equity or debt level, or in other forms
of private or alternative equity transactions, or in public equity transaction, which might make
investment which the Executive could not make directly provided that in connection therewith the
Executive does not provide services to, engage in activities involved, or have any responsibilities
regarding any Competitive Business, or (z) any board of which he is a member as of the effective
date of his termination of employment with the Company. Except as otherwise provided in this
Section 7, there are no other contractual restrictions on the activities the Executive can be
involved in following termination of his employment with the Company and, in the event of any
conflict between the provisions of this Section 7 and the provisions of any other plan, policy,
program, arrangement or other agreement with the Company or any affiliate, the provisions of
Section 7 shall control.
8. Non-Solicitation.
(a) During the Executive’s employment with the Company and for twenty four (24) months after
termination of his employment for any reason, the Executive will not, directly or indirectly, on
his own behalf or on behalf of any third party, (i) target, recruit, solicit or induce, or attempt
to induce, any employees of the Company, or any affiliate or subsidiary of the Company, to
terminate their employment with, or otherwise cease their relationship with, the Company, affiliate
or subsidiary, as applicable (provided nothing shall prevent the Executive from providing a
personal reference for any employee); or (ii) solicit, divert, reduce, take away, or attempt to
divert, reduce or take away, the business or patronage (with respect to products or services of the
kind or type developed, produced, marketed, furnished or sold by the Company, or any affiliate or
subsidiary of the Company, with which the Executive was substantively involved during the course of
his employment with the Company) of any of the Company’s, its affiliates’ or subsidiaries’ (A)
clients, customers, franchisees, or accounts, or (B) prospective clients, customers, franchisees or
accounts, that were contacted or solicited by the Executive within six (6) months prior to the date
his employment with the Company terminated.
(b) The Executive acknowledges and understands that, in the event of a breach or threatened
breach of this provision by the Executive, the Company may suffer irreparable harm and will
therefore be entitled to injunctive relief to enforce this provision, which shall be in addition to
any other remedies available to it. Except as otherwise provided in this Section 8, there are no
other contractual restrictions on the Executive soliciting, recruiting or hiring employees or
having contact with clients, customers, franchisees or accounts (prospective or actual) following
termination of his employment with the Company and, in the event of any conflict between the
provisions of this Section 8 and the provisions of any other plan, policy,
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program, arrangement or other agreement with the Company or any affiliate, the provisions of
Section 8 shall control.
9. Protection of Confidential Information. The Executive agrees that all information, whether
or not in writing, relating to the business, technical or financial affairs of the Company, its
affiliates and subsidiaries, and that is generally understood in the industry as being confidential
and/or proprietary, is the exclusive property of the Company, affiliates or subsidiaries, as
applicable. The Executive agrees to hold in a fiduciary capacity for the sole benefit of the
Company all secret, confidential or proprietary information, knowledge, data, or trade secret
(“Confidential Information”) relating to the Company or any of its affiliates, subsidiaries, or
their respective clients, which Confidential Information shall have been obtained during his
employment with the Company. The Executive agrees that he will not at any time, either during the
Term of this Agreement or after its termination, disclose to anyone any Confidential Information,
or utilize such Confidential Information for his own benefit, or for the benefit of third parties
without written approval by an officer of the Company. The Executive further agrees that all
intellectual property, business processes, proprietary forms, business plans, customer lists,
memoranda, notes, records, data, schematics, sketches, computer programs, prototypes, proprietary
franchise circulars or similar materials, or written, photographic, magnetic or other documents or
tangible objects compiled by the Executive or made available to the Executive during the Term of
his employment concerning the business of the Company, its affiliates, subsidiaries and/or their
respective clients, including any copies of such materials, shall be the property of the Company,
its affiliates or subsidiaries, as applicable, and, except as otherwise permitted under Section 6
of this Agreement for the Executive to retain such information, shall be delivered to the Company
on the termination of his employment, or at any other time upon request of the Company. Anything
to the contrary notwithstanding, the provisions of this Section 9 shall not apply (a) when
disclosure is required by law or by any court, arbitrator, mediator or administrative or
legislative body (including any committee thereof) with actual or apparent jurisdiction to order
the Executive to disclose or make accessible any information, (b) with respect to any other
litigation, arbitration or mediation involving this Agreement or any other agreement between or
among the Executive and DFG, DFC or any of their affiliates, including, without limitation, the
enforcement of such agreements; (c) as to Confidential Information that becomes generally known to
the public or within the relevant trade or industry other than due to the Executive’s violation of
this Section 9; or (d) in connection with any assistance provided by the Executive pursuant to
Section 10(d) below. In the event of a conflict between the provisions of this Section 9 and any
other provision of any plan, policy, program, arrangement or other agreement with DFG, DFC or any
of its affiliates, the provisions of this Section 9 shall control.
10. Intellectual Property.
(a) Disclosure of Inventions. The Executive will promptly disclose in confidence to
the Company all inventions, improvements, processes, products, designs, original works of
authorship, formulas, processes, compositions of matter, computer software programs, Internet
products and services, e-commerce products and services, e-entertainment products and services,
databases, mask works, trade secrets, product improvements, product ideas, new
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products, discoveries, methods, software, uniform resource locators or proposed uniform
resource locators (“URLs”), domain names or proposed domain names, any trade names, trademarks or
slogans, which may or may not be subject to or able to be patented, copyrighted, registered, or
otherwise protected by law (the “Inventions”) that the Executive makes, conceives or first reduces
to practice or create, either alone or jointly with others, during the period of his employment,
whether or not in the course of his employment, and whether or not such Inventions are patentable,
copyrightable or able to be protected as trade secrets, or otherwise able to be registered or
protected by law.
(b) Work for Hire; Assignment of Inventions. The Executive acknowledges and agrees
that any copyrightable works prepared by him within the scope of his employment are “works for
hire” under the Copyright Act and that the Company will be considered the author and owner of such
copyrightable works. The Executive agrees that all Inventions that (i) are developed using
equipment, supplies, facilities or trade secrets of the Company, (ii) result from work performed by
him for the Company, or (iii) relate to the Company’s business or current or anticipated research
and development, will be the sole and exclusive property of the Company and are hereby irrevocably
assigned by the Executive to the Company from the moment of their creation and fixation in tangible
media.
(c) Assignment of Other Rights. In addition to the foregoing assignment of Inventions
to the Company, the Executive hereby irrevocably transfers and assigns to the Company: (i) all
worldwide patents, patent applications, copyrights, mask works, trade secrets and other
intellectual property rights in any Invention; and (ii) any and all “Moral Rights” (as defined
below) that the Executive may have in or with respect to any Invention. The Executive also hereby
forever waives and agrees never to assert any and all Moral Rights the Executive may have in or
with respect to any Invention, even after termination of his work on behalf of the Company. “Moral
Rights” mean any rights to claim authorship of an Invention, to object to or prevent the
modification of any Invention, or to withdraw from circulation or control the publication or
distribution of any Invention, and any similar right, existing under judicial or statutory law of
any country in the world, or under any treaty, regardless of whether or not such right is
denominated or generally referred to as a “moral right.”
(d) Assistance. The Executive agrees to assist the Company in every proper way to
obtain for the Company and enforce patents, copyrights, mask work rights, trade secret rights and
other legal protections for the Company’s Inventions in any and all countries. The Executive will
execute any documents that the Company may reasonably request for use in obtaining or enforcing
such patents, copyrights, mask work rights, trade secrets and other legal protections. His
obligations under this section will continue beyond the termination of his employment with the
Company, provided that the Company will compensate him at a reasonable rate after such termination
for time (with such payment to be made within 30 days of the Executive providing such assistance)
or expenses actually spent by him at the Company’s request on such assistance; provided such
expenses shall be paid to the Executive promptly but in no event later that the end of the calendar
year following the calendar year in which they are incurred. The Executive appoints the Secretary
of the Company as his attorney-in-fact to execute documents on his behalf for this purpose.
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11. Injunctive Relief. The Executive understands that, in the event of a breach or threatened
breach of this Agreement by the Executive, the Company may suffer irreparable harm and will
therefore be entitled to injunctive relief, without prior notice to the Executive and without the
posting of a bond or other guarantee, to enforce this Agreement. This provision is not a waiver of
any other rights which the Company may have under this Agreement as well as to any other remedies
available to it, including money damages.
12. Publicity. Neither Party shall issue, without consent of the other Party, any press
release or make any public announcement with respect to this Agreement or the employment
relationship between them. Following the termination of the Executive’s employment hereunder and
regardless of any dispute that may arise in the future, the Executive and the Company jointly and
mutually agree that they will not intentionally disparage, criticize or make statements which are
negative, detrimental or injurious to the other to any individual, company or client, including
within the Company. Anything to the contrary notwithstanding, the provisions of this Section 12
shall not prevent any person from (a) responding to incorrect, disparaging or derogatory statements
made by the other Party to the extent reasonably necessary to correct or refute such statement or
(b) making any truthful statement to the extent (i) necessary with respect to any litigation,
arbitration or mediation involving this Agreement or any other agreement between or among the
Executive and DFG, DFC or any of their affiliates, including, without limitation, the enforcement
of such agreements or (ii) required by law or by any court, arbitrator, mediator or administrative
or legislative body (including any committee thereof) with actual or apparent jurisdiction to order
such person to disclose or make accessible such information.
13. Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their heirs, personal representatives, successors and assigns. In the event that
either DFG or DFC is acquired, is a non surviving party in a merger, or transfers substantially all
of its assets, this Agreement shall not be terminated and the transferee or surviving company shall
be bound by the provisions of this Agreement. The parties understand that the obligations of the
Executive are personal and may not be assigned by him, except to the extent permitted by applicable
law, the laws of descent or pursuant to any applicable plan, policy, program, arrangement or
agreement with DFG, DFC or any of their affiliates. If the Executive should die when any amount or
entitlement is due and owing to him under this Agreement or otherwise, such amount or entitlement
shall be paid or provided to his designated beneficiary (or if he has not designated a beneficiary,
to his estate).
14. Entire Agreement. This Agreement contains the entire understanding of the Executive and
the Company with respect to the subject matter hereof and supersedes any and all prior
understandings, written or oral, with respect thereto, including without limitation the employment
agreement dated December 19, 2003 by and between the Executive and the Company. This Agreement may
be amended, waived, discharged or terminated only by an instrument in writing, specifically
identified as an amendment to, or waiver, discharge or termination of, this Agreement, and signed
by the Executive and DFC. By entering into this Agreement, the Executive certifies and
acknowledges that he has carefully read all of the provisions of this Agreement, that he has been
afforded ample opportunity to obtain independent
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advice and evaluation, that he has relied upon such independent counsel and not upon any
representation, statement or advice (legal or otherwise) said or offered by the Company, and that
he voluntarily and knowingly enters into said Agreement. In the event of any inconsistency
between any provision of this Agreement and any provision of any plan, policy, program, arrangement
or other agreement of DFG, DFC or any of their affiliates, the provisions of this Agreement shall
govern. For the avoidance of doubt, any action by DFC (including, without limitation, any consent
to any amendment or waiver of any provision of this Agreement) shall be deemed to an action by the
Company. In addition, any notice to DFC by the Executive shall be deemed to be a notice to the
Company.
15. Severability. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this
Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve
to the maximum permissible extent the intent and purposes of this Agreement.
16. Governing Law and Submission to Jurisdiction. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania, without
giving effect to the principles of conflicts of law thereof.
17. Notices. Any notice provided for in this Agreement shall be provided in writing. Notices
shall be effective from the date of service, if served personally on the party to whom notice is to
be given, or on the second day after mailing, if mailed by first class mail, postage prepaid or by
a nationally recognized courier service. Notices shall be properly addressed to the parties at
their respective addresses identified below or to such other address as either party may later
specify by notice to the other to the addresses below:
To Executive, to the address on file with the Company from time to time,
With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx Xxxxx LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxxx Xxxxx LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
To the Company:
Dollar Financial Group, Inc.
Daylesford Plaza
0000 Xxxxxxxxx Xxxxxx Xxxxx 000
Xxxxxx, XX 00000
Daylesford Plaza
0000 Xxxxxxxxx Xxxxxx Xxxxx 000
Xxxxxx, XX 00000
Attn: Chairman of the Compensation Committee
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With a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
Eighteenth and Arch Streets
Philadelphia, PA 19103
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
Eighteenth and Arch Streets
Philadelphia, PA 19103
18. Venue. All legal actions arising under this Agreement will be settled by arbitration in
Philadelphia, Pennsylvania, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, using one arbitrator, and judgment upon the award rendered by the
arbitrator may be entered in any court of competent jurisdiction.
19. Indemnification. (a) DFG and DFC each agree that if the Executive is made a party to, is
threatened to be made a party to, receives any legal process in, or receives any discovery request
or request for information in connection with, any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was
a director, officer, employee, consultant or agent of DFG or DFC, as the case may be, or is or was
serving at the request of, or on behalf of, either DFG or DFC as a director, officer, member,
employee, consultant or agent of another corporation, limited liability corporation, partnership,
joint venture, trust or other entity, including service with respect to employee benefit plans,
whether or not the basis of such Proceeding is the Executive’s alleged action in an official
capacity while serving as a director, officer, member, employee, consultant or agent of DFG, DFC or
other entity, the Executive shall be indemnified and held harmless by DFG and DFC to the fullest
extent permitted or authorized by its certificate of incorporation or by-laws or, if greater, by
applicable law, against any and all costs, expenses, liabilities and losses (including, without
limitation, attorneys’ fees reasonably incurred, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement and any reasonable cost and fees incurred in enforcing
his rights to indemnification, contribution or advancement of expenses) incurred or suffered by the
Executive in connection therewith, and such indemnification shall continue as to the Executive even
though he has ceased to be a director, officer, member, employee, consultant or agent of DFG, DFC
or other entity and shall inure to the benefit of the Executive’s heirs, executors and
administrators. The Company shall reimburse the Executive for all costs and expenses (including,
without limitation, reasonable attorneys’ fees) incurred by him in connection with any Proceeding
within 20 business days after receipt by the Company of a written request for such reimbursement
and appropriate documentation associated with these expenses. Such request shall include an
undertaking by the Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against such costs and expenses.
(b) Neither the failure of DFG or DFC (including its Board, independent legal counsel or
stockholders) to have made a determination prior to the commencement of any proceeding concerning
payment of amounts claimed by the Executive under Section 19(a) above that indemnification of the
Executive is proper because he has met the applicable standard of conduct, nor a determination by
DFG or DFC (including its Board, independent legal counsel or
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stockholders) that the Executive has not met such applicable standard of conduct, shall create a
presumption or inference that the Executive has not met the applicable standard of conduct.
(c) DFG and DFC each agree to continue and maintain a directors’ and officers’ liability
insurance policy covering the Executive at a level, and on terms and conditions, no less favorable
to him than the coverage it provides its directors, or if greater, its senior executives until such
time as suits against the Executive are no longer permitted by law.
(d) Nothing in this Section 19 shall be construed as reducing or waiving any right to
indemnification, advancement of expenses or coverage under any directors’ and officers’ liability
insurance policies the Executive would otherwise have under DFG’s or DFC’s certificate of
incorporation or by-laws, pursuant to any other agreement with any Party hereto or under applicable
law.
20. Attorneys’ Fees and Expenses. In the event of any arbitration or litigation between or
among the Executive and DFG and/or DFC (or any of their affiliates) concerning this Agreement or
any other agreement relating to compensation covered by this Agreement, the prevailing party shall
be entitled to payment by the other party of its costs and expenses (including reasonable legal
fees) in an amount not to exceed $75,000. In connection with the execution of this Agreement, the
Company shall promptly following execution of this Agreement reimburse the Executive for his
reasonable attorneys’ fees incurred in connection herewith in an amount not to exceed $75,000. The
amount of expenses eligible for reimbursement under this Section 20 during any calendar year will
not affect the amount of expenses eligible for reimbursement in any other calendar year, such
reimbursements for expenses shall be made in all events no later than the last day of the calendar
year following the calendar year in which the applicable expense is incurred.
21. No Mitigation. If an event triggering the Executive’s termination of employment occurs,
the Executive need not seek other employment or attempt in any way to reduce the amount of any
payments, benefits or entitlements due to the Executive by the Company under this Agreement. The
amount of any payments, benefits or entitlements due to the Executive under this Agreement shall
not be reduced by any compensation earned by the Executive as the result of any other employment,
consulting relationship or other business activity or engagement post-termination.
22. No Set-off. Except as otherwise specifically set forth in this Agreement, the Company’s
obligations under this Agreement are absolute and unconditional, and not subject to any set-off,
counterclaim, recoupment, defense or other right that the Company may have against the Executive.
23. Company Successors. In addition to any obligations imposed by law upon any successor to
the Company, the Company shall require any successor to all or substantially all of the Company’s
business or assets (whether direct or indirect, and whether by purchase, reorganization, merger,
share exchange, consolidation, or otherwise) to expressly assume and
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agree to perform the Company’s obligations under this Agreement to the same extent, and in the same
manner, as the Company would be required to perform if no such succession had occurred. This
Agreement shall be binding upon, and inure to the benefit of, any successor to the Company.
24. Withholding. All payments (or transfers of property) to the Executive will be subject to
tax withholding in accordance with applicable law.
25. Survivability of Agreement. Upon expiration or termination of the Term of this Agreement,
the respective rights and obligations of the Parties shall survive such expiration to the extent
necessary to carry out the intentions of the Parties as embodied in the rights (such as vested
rights) and obligations of the Parties under this Agreement. This Agreement shall continue in
effect until there are no rights or obligations of the Parties outstanding hereunder and shall not
be terminated by either Party without the express prior written consent of both Parties.
26. Miscellaneous.
(a) No delay or omission by either Party in exercising any right under this Agreement shall
operate as a waiver of that or any other right. A waiver or consent given by the Company or the
Executive on any one occasion shall be effective only in that instance and shall not be construed
as a bar or waiver of any right on any other occasion.
(b) The captions of the sections of this Agreement are for convenience of reference only and
in no way define, limit or affect the scope or substance of any section of this Agreement.
(c) The language in all parts of this Agreement will be construed, in all cases, according to
its fair meaning, and not for or against either Party hereto. The Parties acknowledge that each
Party and its or his counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the drafting party will
not be employed in the interpretation of this Agreement.
(d) This Agreement may be executed, including execution by facsimile signature, in one or more
counterparts, each of which will be deemed an original, and all of which together shall be deemed
to be one and the same instrument
[Signature page follows]
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IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND, each of the parties hereto has caused
this Agreement to be duly executed and delivered under seal, by its authorized officers or
individually, on the date first written above.
| DOLLAR FINANCIAL GROUP, INC. | ||
| /s/ Xxxxx Xxxxxxxxx | ||
| Xxxxx Xxxxxxxxx | ||
| Executive Vice President and | ||
| Chief Financial Officer | ||
| DOLLAR FINANCIAL CORP. | ||
| /s/ Xxxxx Xxxxxxxxx | ||
| Xxxxx Xxxxxxxxx | ||
| Executive Vice President and | ||
| Chief Financial Officer | ||
| /s/ Xxxxxxx X. Xxxxx | ||
| Xxxxxxx X. Xxxxx |
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EXHIBIT A
FORM OF EXECUTIVE RELEASE
FORM OF EXECUTIVE RELEASE
This Release (the “Release”) is entered into by Xxxxxxx X. Xxxxx as of the date written
below (“Executive”).
Section 1. Termination of Employment. Pursuant to Section 5 of the employment agreement
among Dollar Financial Group, Inc., a New York corporation (together with its successors and
assigns, “DFG”), Dollar Financial Corporation (together with its successors and assigns, “DFC”), a
Delaware corporation, and Executive dated as of October 5, 2007 (the “Employment
Agreement”), Executive’s employment has been terminated without Cause, for Good Reason, upon
Retirement or Disability (as all terms are defined in the Employment Agreement).
Section 2. Release. (a) In consideration of the payments set forth in the Employment
Agreement and other good and valuable consideration, Executive, on his own behalf and on behalf of
his spouse, heirs, estate, executors, administrators, successors and assigns (collectively,
“Releasors”), hereby fully, irrevocably and unconditionally releases, waives, discharges
and gives up any and all claims which Executive has or may have against DFG and DFC and their
respective parent, subsidiaries, affiliates and divisions (collectively, the “Company”),
and their respective representatives, officers, directors, employees, agents, successors and
assigns (collectively, “Releasees”) relating to or arising out of Executive’s employment
and/or the termination of such employment. This releases Releasees from any and all actions,
demands, causes of action, suits, rights, and/or claims whatsoever for any and all payments and
benefits, debts, sums of money, wages, salary, vacation pay, sick pay, legal fees, damages,
including damages for pain and suffering and emotional harm, arising out of any promise, agreement,
contract, common law, the laws, statutes, and/or regulations of the State of New York or Delaware,
or any other state and the United States, including, but not limited to, federal and state wage and
hour laws, federal and state whistleblower laws, Title VII of the Civil Rights Act of 1964, the
Equal Pay Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the
Employment Retirement Income Security Act, the Fair Labor Standards Act or OSHA, as each may be
amended from time to time, relating to or arising out of Executive’s employment and/or termination
of such employment. This Release releases all such claims up to the date of execution and delivery
of this Agreement by Executive. Notwithstanding anything herein, Executive does not waive or
release claims with respect to (i) any right to enforce this Release or Section 5 of the Employment
Agreement, (ii) any rights to indemnification that Executive may have under the Certificate of
Incorporation, By Laws or equivalent governing documents of DFG, DFC or any affiliate or any
indemnification agreement between Executive and DFG, DFC or any of their affiliates, (iii) any
right to be advanced expenses and any rights to insurance coverage under any directors’ and
officers’ liability insurance policies maintained by DFG, DFC or any of their affiliates for the
benefit of their respective directors and officers, including Executive, in accordance with the
terms of such policies, if any, (iv) any vested rights to receive any benefit under any other
DFG’s, DFC’s or any of their affiliates’ plans, policies, arrangements or other agreements in which
the Executive participated prior to termination, or (v)
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Executive’s rights as a shareholder of DFG, DFC or any of their affiliates. Nothing in this
Release shall preclude Executive from (a) participating in any manner in an investigation, hearing
or proceeding conducted by the Equal Employment Opportunity Commission, but Executive hereby waives
any and all rights to recover under, or by virtue of, any such investigation, hearing or proceeding
or (b) exercising Executive’s rights under Section 601-608 of the Employee Retirement Income
Security Act of 1974, as amended, popularly known as COBRA. For the avoidance of doubt, the
Executive is not waiving any rights to enforce his rights under Sections 6 through 26 of the
Employment Agreement.
(b) The release of any claims against individuals, representatives or agents shall be limited
to claims relating to such individual’s, representative’s or agent’s work in any capacity for DFG,
DFC or their successors, assigns, parent or affiliates.
Section 3. Construction of Release. In the event that one or more of the provisions
contained in this Release shall for any reason be held unenforceable in any respect under the law
of any state of the United States, such unenforceability shall not affect any other provision of
this Release, but this Release shall then be construed as if such unenforceable provision or
provisions had never been contained herein. This Release shall be governed under the laws of the
Commonwealth of Pennsylvania, without reference to choice of law principles and the state and
federal courts of the Commonwealth of Pennsylvania shall be the sole jurisdiction in which to
resolve any disputes arising out of this Release.
Section 4. Opportunity for Review. EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS READ AND FULLY
UNDERSTANDS THIS RELEASE AND REPRESENTS THAT PRIOR TO SIGNING THIS RELEASE EXECUTIVE HAS BEEN
ADVISED TO, AND HAS HAD AN OPPORTUNITY TO, CONSULT EXECUTIVE’S COUNSEL WITH RESPECT TO THIS RELEASE
AND EXECUTIVE GIVES IT FREELY AND VOLUNTARILY. EXECUTIVE UNDERSTANDS THAT EXECUTIVE HAS BEEN GIVEN
AT LEAST TWENTY-ONE (21) DAYS TO REVIEW THIS RELEASE BEFORE SIGNING IT. EXECUTIVE FURTHER
ACKNOWLEDGES THAT HE IS ENTERING INTO THIS RELEASE, FREELY, KNOWINGLY, AND VOLUNTARILY, WITH A FULL
UNDERSTANDING OF ITS TERMS. EXECUTIVE ALSO ACKNOWLEDGES THAT HE SHALL HAVE 7 DAYS FROM THE DATE HE
SIGNS THIS RELEASE TO REVOKE THE RELEASE BY NOTIFYING DFC’s GENERAL COUNSEL IN WRITING.
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IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND, Executive has signed this Release as of
the date written below.
| Xxxxxxx X. Xxxxx | ||||
Date: |
||||
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EXHIBIT B
FORM OF COMPANY RELEASE
FORM OF COMPANY RELEASE
This Release (the “Release”) is entered into by Dollar Financial Group, Inc., a New York
corporation (together with its successors and assigns, “DFG”) and Dollar Financial Corporation
(together with its successors and assigns, “DFC”), a Delaware corporation, as of the date written
below and releases Xxxxxxx X. Xxxxx (“Executive”).
Section 1. Termination of Employment. Pursuant to Section 5 of the employment agreement
among DFG, DFC and the Executive dated as of October 5, 2007 (the “Employment Agreement”),
Executive’s employment has been terminated without Cause, for Good Reason, upon Retirement or
Disability (as all terms are defined in the Employment Agreement).
Section 2. Release. In consideration of the Executive’s release of claims against DFG, DFC,
their affiliates and related parties, and other good and valuable consideration, DFG and DFC, on
their own behalf and on behalf of their respective subsidiaries and divisions (collectively, the
“Company”), hereby fully, irrevocably and unconditionally releases, waives, discharges and
gives up any and all claims which the Company has or may have against the Executive or his spouse,
dependents, heirs, agents, estate, executors, administrators, successors and assigns relating to or
arising out of Executive’s employment and/or the termination of such employment. This Release
releases Executive and his spouse, dependents, heirs, agents, estate, executors, administrators,
successors and assigns from any and all actions, demands, causes of action, suits, rights, and/or
claims whatsoever for any and all payments and benefits, debts, sums of money, arising out of any
promise, agreement, contract, common law, the laws, statutes, and/or regulations of the State of
New York or Delaware, or any other state and the United States, including any claim for breach of
fiduciary duty. This Release releases all such claims up to the date of execution and delivery of
this Agreement by DFG and DFC. Notwithstanding anything herein, the Company does not waive or
release claims with respect to any right to enforce this Release or Sections 7 through 26 of the
Employment Agreement, or any claim, demand, obligation, or cause of action that is based on any
fraudulent act by the Executive, the Executive’s willful misconduct, or on facts or claims unknown
to the Company on or prior to the date of this Release. A fact or claim shall not be deemed to be
unknown by the Company if any officer or director as of the date of this Release (other than the
Executive) knows, or reasonably should have known, of such fact or claim.
Section 2. Construction of Release. In the event that one or more of the provisions
contained in this Release shall for any reason be held unenforceable in any respect under the law
of any state of the United States, such unenforceability shall not affect any other provision of
this Release, but this Release shall then be construed as if such unenforceable provision or
provisions had never been contained herein. This Release shall be governed under the laws of the
Commonwealth of Pennsylvania, without reference to choice of law principles and the state and
federal courts of the Commonwealth of Pennsylvania shall be the sole jurisdiction in which to
resolve any disputes arising out of this Release.
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IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND, DFG and DFC have signed this Release as
of the date written below.
| DOLLAR FINANCIAL GROUP, INC. | ||||||
| Name: | ||||||
| Title: | ||||||
Date: |
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| DOLLAR FINANCIAL CORP. | ||||||
| Name: | ||||||
| Title: | ||||||
Date: |
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