Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 9th day of
October, 1998 by and between Creditrust Corporation, a Maryland Corporation
(hereinafter referred to as "Creditrust") having its principal office at 0000
Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 and Xxxx X. Xxxx
(hereinafter referred to as the "Executive"). In consideration of the mutual
covenants and promises contained herein and the Executive's continued
employment, the sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Creditrust desires to continue to employ the Executive on the terms and
conditions herein set forth, and the Executive has agreed to accept employment
with Creditrust on the terms and conditions set forth.
1) EMPLOYMENT AT WILL. Creditrust hereby employs the Executive and the
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Executive shall serve Creditrust upon the terms and conditions hereinafter
set forth. Notwithstanding any other provision in this Agreement or in any
other document to the contrary, this Agreement creates an employment
relationship of indefinite duration which may be legally terminated at the
pleasure of either Creditrust or the Executive at any time and without any
liability.
2) CAPACITY AND PERFORMANCE.
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a) Capacity. The Executive shall serve as the Vice President, Recovery of
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Creditrust and shall serve, with no additional compensation, in any
other office or position as determined by Xxxxxx X. Xxxxxx ("Xx.
Xxxxxx") or his successor or designee.
b) Duties. The Executive shall be employed by Creditrust on a full time
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basis, and shall perform, on behalf of Creditrust, such duties
customary to his position and additional duties as may be designated by
Xx. Xxxxxx or his successor of designee from time to time.
c) Full Time. The Executive shall devote his full time, attention, skill,
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and energy to the performance of his duties under this Agreement. The
Executive shall comply with all reasonable professional requests of the
Company; provided, however, that the Executive will be permitted to
engage in and manage personal investments and to participate in
community and charitable affairs, so long as such activities do not
interfere with his duties under this Agreement.
3) COMPENSATION.
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A. Definitions. Unless the context otherwise requires, when used in
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this Agreement, the following terms shall have the following
meanings:
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i. "Group" shall mean the recovery teams, each led by a
supervisor, that report directly to a Recovery Manager (or
Assistant Manager). It is anticipated that each Recovery
Manager shall have their own Group, and therefore shall not
be entitled to incentive compensation based upon the
production of any other Group.
ii. "Eligible Collectors" are defined as any collector who are
employed in your Group according to the following schedule:
A collector shall be counted as .25 of an Eligible
Collector for the month in which their 30th day of
employment falls.
A collector shall be counted as .50 of an Eligible
Collector for the month in which their 60th day of
employment falls.
A collector shall be counted as .75 of an Eligible
Collector for the month in which their 90th day of
employment falls.
A collector shall be counted as an Eligible Collector for
the month in which their 120th day of employment falls and
for each month thereafter.
iii. "Good Funds" are defined as any moneys that have been
deposited and have cleared. Any checks returned "NSF" would
be charged back against the total good funds received.
Creditrust's management will wait ten (10) calendar days from
the end of each month, to determine any charge backs, before
disbursing any commissions.
iv. "Group Average" is defined as the total amount of Good Funds
collected by the Eligible Collectors, divided by the number
of Eligible Collectors.
B. Base Compensation. Creditrust shall pay to Executive, an annual
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base salary of One Hundred Fifty Thousand Dollars ($150,000)
during the term of the Agreement. Creditrust shall pay Executive's
annual salary to him in accordance with standard payment practices
of Creditrust as adopted or employed by Creditrust from time.
C. Incentive Compensation. Executive shall earn a commission equal
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to:
i. 0.05% of the Good Funds collected by the Eligible Collectors
when the Group Average is less than $7,500.
ii. 0.1% of the Good Funds collected by the Eligible Collectors
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when the Group Average is between $7,501 and $11,999.
iii. 0.15% of the Good Funds collected by the Eligible Collectors
when the Group Average is between $12,000 and $14,999.
iv. 0.2% of the Good Funds collected by the Eligible Collectors
when the Group Average is between $15,000 and $17,999.
v. 0.3% of the Good Funds collected by the Eligible Collectors
when the Group Average is between $18,000 and $21,999.
vi. 0.3% of the Good Funds collected by the Eligible Collectors
when the Group Average exceeds $22,000.
D. Management Bonus. The Recovery Manager will also receive a
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management bonus of $10.00 for each Eligible Collector.
E. Bonuses; Stock Plans. In addition to his base salary, the
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Executive shall be entitled to participate in any stock option
plans, programs, arrangements and practices sponsored by the
Company for the benefit of executive employees serving in similar
capacities with the Company (and/or its affiliates), if any, as
may be established from time to time by the Board of Directors of
the Company for the benefit of such executive employees, in
accordance with the terms of such plans, as amended by the Company
from time to time; it being understood that there is no assurance
with respect to the establishment of such plans or, if
established, the continuation of such plans during the term of
this Agreement.
4) BENEFITS. During the term of this Agreement, the Executive shall also be
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entitled to participate in or receive benefits under all of the Company's
benefit plans, programs, arrangements and practices, including pension,
disability, and group life, sickness, accident or health insurance programs,
if any, as may be established from time to time by the Board of Directors of
the Company for the benefit of executive employees serving in similar
capacities with the Company (and/or its affiliates), in accordance with the
terms of such plans, as amended by the Company from time to time; it being
understood that there is no assurance with respect to the establishment of
such plans or, if established, the continuation of such plans during the
term of this Agreement.
5) VACATION. The Executive shall be entitled to an annual vacation of duration
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equal to the duration of the annual vacation available to management level
employees of Creditrust with the same tenure, to be taken at a time
acceptable to Creditrust, subject to the reasonable business needs of
Creditrust. The Executive shall be paid his salary during such vacation
period.
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6) CONFIDENTIALITY AGREEMENT. The parties, by their signatures, adopt and
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ratify all of the provisions of the Confidentiality Agreement that is
attached and incorporated by reference into this Agreement as if set forth
at length. In the event that a court of competent jurisdiction finds that
any term or provision in this Agreement conflicts with any term or provision
in the Confidentiality Agreement, then the terms and provisions in this
Agreement shall supersede the conflicting terms or provisions in the
Confidentiality Agreement, but only to the extent of the conflict.
7) CONFLICTING AGREEMENTS. The Executive hereby represents and warrants to
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Creditrust that his execution of this Agreement and the performance of his
obligations hereunder will not breach or be in conflict with any other
agreement to which he may be a party or may be bound and is not subject to
any covenants against competition or similar covenants that would affect
performance of his duties and obligations hereunder.
8) WAIVER. The waiver by either Creditrust or the Executive of a breach of any
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provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by either Creditrust or the Executive.
9) ASSIGNMENT: BINDING EFFECT. This Agreement shall inure to the benefit of
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and be binding upon Creditrust, its successors and assigns. The Executive
may assign his right to payment under this Agreement but not his obligations
hereunder.
10) NOTICE. Any notice, writing or other communication required or permitted
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to be given under the terms of this Agreement shall be in writing and sent
by certified or registered mail in the United States mail, postage prepaid,
return receipt requested, or by telegram, and addressed as follows or to
such other address which may from time to time be given by the parties:
a) If to Creditrust:
Xxxxxx X. Xxxxxx, Chairman & CEO
Creditrust Corporation
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
b) If to the Executive:
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If mailed, the notice period shall be deemed to begin in two (2) days
following the date on which that notice is mailed.
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11) MISCELLANEOUS PROVISONS.
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a) Captions. The descriptive headings of the several sections of this
Agreement are inserted for convenience only and do not constitute a
part of this Agreement.
b) Severability. In the event that one or more of the provisions of
this Agreement shall be invalid, illegal or unenforceable in any
respect, the remaining provisions contained therein shall not in any
way be affected and shall remain in force to the fullest extent of
the law.
c) Entire Agreement. This Agreement contains the entire agreement
between the parties and supersedes all prior oral or written
agreements, commitments, or understandings with respect to the
matters provided for herein, and no modification shall be finding
upon the party affected unless set forth in writing and duly
executed by each party affected. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall
find and inure to the benefit of the respective successors, assigns
and personal representatives.
d) Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by,
the laws of the State of Maryland exclusive of its conflicts of law
rules.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day
and year first above written.
CREDITRUST CORPORATION
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Chairman and CEO
THE EXECUTIVE
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
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