Sample Business Contracts
Change-in-Control Executive Severance Agreement - Ace Cash Express Inc. and Joe W. Conner
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CHANGE-IN-CONTROL EXECUTIVE SEVERANCE AGREEMENT
This Change-in-Control Executive Severance Agreement (this "Agreement"), dated and effective July 16, 2001, is between Ace Cash Express, Inc., a Texas corporation (the "Company"), and Joe W. Conner (the "Executive").
Statement of Purpose
The Company desires, for its continued success, to have the benefit of services of experienced management personnel like the Executive. The Board of Directors of the Company therefore believes that it is in the best interest of the Company that, in the event of any prospective change in control of the Company, the Executive be reasonably secure in his employment and position with the Company, so that the Executive can exercise independent judgment as to the best interest of the Company and its shareholders, without distraction by any personal uncertainties or risks regarding the Executive"s continued employment with the Company created by the possibility of a change in control of the Company. Therefore, the Company and the Executive are entering into this Agreement to assure severance benefits to the Executive in connection with certain terminations of employment upon or after a change in control of the Company.
Agreement
In consideration of the statements made in the Statement of Purpose and the mutual agreements set forth below, the Company and the Executive agree as follows:
| 1. | Definitions and Interpretation. Various terms used in this Agreement are defined in Exhibit A; each of the defined terms used in this Agreement begins with a capital letter. Various interpretative matters for this Agreement are also set forth in Exhibit A. Exhibit A is an integral part of this Agreement and is incorporated in this Agreement by reference. | |
| 2. | Term of Agreement. This Agreement will continue in effect until the earliest of the following: |
| (a) | |||
| (b) |
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| Agreement by either Party, if that June 30 occurs before a Change in Control. | |||
| (c) |
| 3. | Severance Benefits. Upon a Severance Payment Event, in addition to any other severance or employment-termination compensation or benefits to which the Executive may be entitled from the Company or any Subsidiary under the terms of any Plan of which the Executive was a participant or a beneficiary immediately before the Severance Payment Event, the Company shall: |
| (a) | Pay the Executive in cash, within five Business Days after the Severance Payment Event, all of his Base Salary and all other earned but unpaid cash compensation or entitlements due to the Executive through (and including) the date of the Severance Payment Event, including unused earned and accrued vacation pay and unreimbursed reimbursable business expenses. | ||
| (b) | Make the Severance Payment in cash within five Business Days after the Severance Payment Event. | ||
| (c) |
| In addition, each Stock Award outstanding immediately before the Severance Payment Event and not yet exercised or forfeited (as the case may be) will accelerate and become fully vested, exercisable, or nonforfeitable upon the Severance Payment Event, as though all requisite time had passed to vest the Stock Award or cause it to become exercisable or nonforfeitable. |
| 4. | Nondisclosure and Noncompetition. As an inducement to the Company to enter into this Agreement, the Executive represents to and covenants with or in favor of the Company as follows: |
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| (a) | The Executive has acquired and will acquire during his employment with the Company knowledge or awareness of various Trade Secrets. All of the Trade Secrets are valuable, special, and unique assets of the Company, and the disclosure of any of them, or their use in any manner, other than on behalf of the Company would cause substantial injury, loss of profits, and loss of goodwill to the Company. | ||
| (b) | During his employment with the Company and at all times thereafter, the Executive shall not, directly or indirectly, disclose or disseminate any Trade Secret to any other Person or lecture upon, publish articles concerning, or otherwise use or employ any Trade Secret, except (in any case) to the extent required in the course of his employment with the Company or by applicable law, rule, or regulation (including legal process). In addition, all Trade Secrets and materials containing Trade Secrets prepared or compiled by the Executive or furnished or made available to him during his employment with the Company are the sole and exclusive property of the Company, and none of those Trade Secrets or materials containing Trade Secrets may be retained by the Executive upon or following any termination of his employment with the Company. | ||
| (c) | |||
| (d) | The Executive acknowledges and agrees that the restrictions in this Section 4 are reasonable and not unduly burdensome to him under the circumstances. | ||
| (e) |
| 5. | Tax Limitation. If any payment or benefit received or to be received by the Executive under this Agreement or any other of the Total Severance Benefits would not be deductible, in whole or in part, by the Company as a result of Section 280G of the Code, |
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| the payments and benefits under this Agreement shall be reduced until no portion of the Total Severance Benefits is nondeductible as a result of Section 280G of the Code. For the purposes of this Section 5: |
| (a) | Any portion of the Total Severance Benefits that the Executive has effectively waived in writing before the date on which that portion is received shall not be taken into account in determining the limitation on the Total Severance Benefits; | ||
| (b) | |||
| (c) |
| 6. | Executive"s Legal Expenses. The Company shall pay the Executive an amount equal to the reasonable legal fees and other expenses incurred in good faith by him in obtaining or retaining payments and benefits under this Agreement, including all such fees and expenses (if any) in enforcing, in good faith, any right or benefit provided by this Agreement or in connection with the contest or defense of any tax audit or proceeding by the Internal Revenue Service to the extent that Section 4999 of the Code is alleged or claimed to apply to any payment or benefit provided under this Agreement. The Company will be obligated under the preceding sentence even if the Executive is not successful in any enforcement claim or counterclaim by him, or in any such tax contest or defense, so long as he acted in good faith. The Company shall make any payment required by this Section 6 within five Business Days after Notice from the Executive requesting payment and providing such evidence of the incurrence of those fees and expenses as the Company may reasonably request. | |
| 7. | No Mitigation. If a Severance Payment Event occurs, the Executive need not seek other employment or attempt in any way to reduce the amount of any payments or benefits to the Executive by the Company under this Agreement. The amount of the Severance Payment and, except as stated in subsection (c) of Section 3 and in subsection (e) of Section 4, any other severance benefit provided or to be provided to the Executive by the Company under Section 3 shall not be reduced by any compensation earned by the Executive as the result of any other employment, consulting relationship, or other business activity. | |
| 8. | No Set-off. 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 or any Subsidiary may have against the Executive, except as stated in subsection (c) of Section 3 and in subsection (e) of Section 4. | |
| 9. | Tax Withholding. The Company shall withhold from any payments or benefits under this |
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| Agreement (whether or not otherwise acknowledged under this Agreement) all federal, state, local, or other taxes as may be legally required to be withheld. | ||
| 10. | Employment Status. Nothing in this Agreement provides the Executive with any continued employment with the Company or any Subsidiary or shall interfere with the Company"s right to terminate the Executive"s employment at any time and for any (or no) reason. | |
| 11. | No Exclusivity. Nothing in this Agreement prevents or limits the Executive"s participation in any Plan for which the Executive may qualify or shall impair any rights that the Executive may have under any other contract or agreement with the Company or any Subsidiary, except for any limitation resulting from Section 5. | |
| 12. | Governing Law; Jurisdiction. All matters or issues relating to the interpretation, construction, validity, and enforcement of this Agreement shall be governed by the laws of Texas, without giving effect to any choice-of-law principle that would cause the application of the laws of any jurisdiction other than Texas. Jurisdiction and venue of any action or proceeding relating to this Agreement or any Dispute (to the extent arbitration is not required under Section 13) shall be exclusively in Dallas County, Texas. | |
| 13. | Arbitration. Except as provided in subsection (h) of this Section 13, any Dispute must be resolved by binding arbitration in accordance with the following: |
| (a) | A Party may begin arbitration by filing a demand for arbitration in accordance with the Arbitration Rules and concurrently Notifying the other Party of that demand. If the Parties are unable to agree upon a panel of three arbitrators within ten days after the demand for arbitration was filed (and do not agree to an extension of that ten-day period), either Party may request the Dallas office of the American Arbitration Association to appoint the arbitrator or arbitrators necessary to complete the panel in accordance with the Arbitration Rules. Each arbitrator so appointed shall be deemed accepted by the Parties as part of the panel. | ||
| (b) | The arbitration shall be conducted in the Dallas-Fort Worth, Texas metropolitan area at a place and time agreed upon by the Parties with the panel, or if the Parties cannot agree, as designated by the panel. The panel may, however, call and conduct hearings and meetings at such other places as the Parties may agree or as the panel may, on the motion of one Party, determine to be necessary to obtain significant testimony or evidence. | ||
| (c) | |||
| (d) | The arbitration shall be subject to the Federal Arbitration Act and conducted in accordance with the Arbitration Rules to the extent that they do not conflict with this Section 13. The Parties and the panel may, however, agree to vary to |
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| provisions of this Section 13 or the matters otherwise governed by the Arbitration Rules. | |||
| (e) | |||
| (f) | |||
| (g) | |||
| (h) | Nothing in this Section 13 limits the right of either Party to apply to a court having jurisdiction to (i) enforce the agreement to arbitrate in accordance with this Section 13, (ii) seek provisional or temporary injunctive relief, in response to an actual or impending breach of the Agreement or otherwise so as to avoid a irrevocable damage or maintain the status quo, until a final arbitration decision or award is rendered or the Dispute is otherwise resolved, or (iii) challenge or vacate any final arbitration decision or award that does not comply with this Section 13. In addition, nothing in this Section 13 prohibits the Parties from resolving any Dispute (in whole or in part) by agreement. |
| 14. | Company"s Successor. 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 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. | |
| 15. | Executive"s Successor. This Agreement shall inure to the benefit of, and be enforceable by, the Executive"s personal or legal representatives, administrators, successors, executors, heirs, distributees, devisees, and legatees. If the Executive should die after a Severance Payment Event, but before any payment or benefit to which the Executive is entitled under this Agreement has been received by the Executive, all payments or |
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| 16. | Restricted Assignment. Except as expressly provided in Sections 14 and 15, neither Party may assign, transfer, or delegate this Agreement or any of its or his rights or obligations under this Agreement without the prior written consent of the other Party. Any attempted assignment, transfer, or delegation in violation of the preceding sentence shall be void and of no effect. | |
| 17. | Waiver and Amendment. No term or condition of this Agreement shall be deemed waived other than by a writing signed by the Party against whom or which enforcement of the waiver is sought. Without limiting the generality of the preceding sentence, a Party"s failure to insist upon the other Party"s strict compliance with any provision of this Agreement or to assert any right that a Party may have under this Agreement shall not be deemed a waiver of that provision or that right. Any written waiver shall operate only as to the specific term or condition waived under the specific circumstances and shall not constitute a waiver of that term or condition for the future or a waiver of any other term or condition. No amendment or modification of this Agreement shall be deemed effective unless stated in a writing signed by the Parties. | |
| 18. | Entire Agreement. This Agreement contains the Parties" entire agreement regarding the subject matter of this Agreement and supersedes all prior agreements and understandings between them regarding that subject matter. The Parties have made no agreements, representations, or warranties regarding the subject matter of this Agreement that are not set forth in this Agreement. | |
| 19. | Notice. Each notice or other communication required or permitted under this Agreement shall be in writing and transmitted, delivered, or sent by personal delivery, prepaid courier or messenger service (whether overnight or same-day), prepaid telecopy or facsimile, or prepaid certified United States mail (with return receipt requested), addressed (in any case) to the other Party at the address or number for that Party set forth below that Party"s signature on this Agreement, or at such other address or number as the recipient has designated by Notice to the other Party. Each notice or communication so transmitted, delivered, or sent: |
| (a) | in person, by courier or messenger service, or by certified United States mail shall be deemed given, received, and effective on the date delivered to or refused by the intended recipient (with the return receipt, or the equivalent record of the courier or messenger, being deemed conclusive evidence of delivery or refusal), or | ||
| (b) | by telecopy or facsimile shall be deemed given, received, and effective on the date of actual receipt (with the confirmation of transmission being deemed conclusive evidence of receipt, except where the intended recipient has promptly Notified the other Party that the transmission is illegible). |
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| Nevertheless, if the date of delivery or transmission is not a Business Day, or if the delivery or transmission is after 5:00 p.m. on a Business Day, the notice or other communication shall be deemed given, received, and effective on the next Business Day. |
| 20. | Severability. If any provision of this Agreement is or becomes invalid or unenforceable, that provision (to the extent invalid or unenforceable) shall be deemed amended or reformed to the extent required to render it valid and enforceable, and the remainder of this Agreement shall be unaffected and shall continue in effect. | |
| 21. | Counterparts. This Agreement may be signed in counterparts, with the same effect as if both Parties had signed the same document. All counterparts shall be construed together to constitute one, and the same, document. |
The Parties have signed this Agreement to be effective as of the date set forth in the first paragraph.
| Company: | Executive: | |
| ACE CASH EXPRESS, INC | ||
| | | |
| JOE W. CONNER | ||
| Address for Notice: | Address for Notice: | |
| 1231 Greenway Drive Suite 800 Irving, Texas 75038 Telecopy no. (972) 550-5150 Attention: Chairman of the Board | , Texas Telecopy no. ( ) - |
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Exhibit A
to
Change-in-Control Executive Severance Agreement
Defined Terms . In the Agreement, the following terms have the corresponding meanings:
" Acquiring Person" means any Person (other than an Excluded Person) who or which, alone or together with all Affiliates and Associates of that Person, is the Beneficial Owner of 25% or more of the Voting Securities of the Company then outstanding.
" Affiliate" and " Associate" have the respective meanings ascribed to them in Rule 12b-2 under the Exchange Act.
" Agreement" means the Change-in-Control Executive Severance Agreement between the Parties of which this Exhibit A is a part.
" Arbitration Rules" means the Rules for Commercial Arbitration of the American Arbitration Association in effect at the time of an arbitration of a Dispute.
" Base Salary" means the Executive"s annual salary, or base or fixed annual compensation, of record from the Company or a Subsidiary that is his primary employer, excluding any amount received or to be received under incentive compensation Plans, whether or not deferred.
" Beneficial Owner" means beneficial owner as defined in Rule 13d-3 under the Exchange Act. (" Beneficially Owns" has the correlative meaning.) Any calculation of the number of Voting Securities outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Voting Securities of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act.
" Benefit Continuation Period" means 30 consecutive months after a Severance Payment Event.
" Board" means the Board of Directors of the Company.
" Business Day" means any Monday through Friday, excluding any such day on which banks are authorized to be closed in Texas.
" Cause" means:
| (i) |
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| (ii) |
For purposes of this definition, no act, or failure to act, by the Executive shall be deemed "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive"s act, or failure to act, was in the best interest of the Company and its Subsidiaries. For the purpose of clause (i) of this definition, a "reasonable time" shall be a time period determined by the Board, acting in good faith, to be sufficient under normal circumstances to correct the deficient performance or compliance described in the Notice to the Executive.
" Change in Control" means the occurrence of any one or more of the following:
| (i) | Any Person becomes an Acquiring Person, except as the result of (A) any acquisition of Voting Securities of the Company by the Company or (B) any acquisition of Voting Securities of the Company directly from the Company (as authorized by the Board). | |
| (ii) | ||
| (iii) |
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| (iv) |
" Code" means the Internal Revenue Code of 1986, as amended from time to time.
" Company" means Ace Cash Express, Inc., a Texas corporation.
" Disability" means the Executive"s inability, because of any physical or mental illness or impairment, to substantially perform all of his employment duties to the Company, on a full-time basis, for a period of at least 90 consecutive days, as reasonably determined by the Board, based on advice from one or more competent medical doctors selected by the Company or any of its insurers and acceptable to the Executive or his legal representative.
" Dispute" means any dispute, disagreement, claim, or controversy arising in connection with or relating to the Agreement or the validity, interpretation, performance, breach, or termination of the Agreement.
" Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time.
" Excluded Person" means:
| (i) | the Executive or any group (within the meaning of Section 13(d)(3) of the Exchange Act) of which the Executive is a member; | |
| (ii) | any Person that controls (as defined in Rule 12b-2 under the Exchange Act) the Company as of the date of the Agreement or any group of which any such Person is a member; | |
| (iii) | any employee-benefit plan, or related trust, sponsored or maintained by the Company or any of its Subsidiaries, or any trustee or other fiduciary thereof; or | |
| (iv) | 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 Voting Securities of the Company. |
" Executive" means Joe W. Conner.
" Good Reason" means:
| (i) |
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| (ii) | ||
| (iii) | ||
| (iv) | ||
| (v) | ||
| (vi) |
" Incumbent Board" means the members of the Board on the effective date of the Agreement (subject, however, to clause (ii) of the definition of "Change in Control").
" Notice" means a written communication complying with Section 19. ("Notify" has the correlative meaning.)
" Parties" means, collectively, the Company and the Executive. ("Party" means either the Company or the Executive.)
" Person" means any individual, firm, corporation, partnership, limited liability company, trust, or other entity, including any successor (by merger or otherwise) of such entity.
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" Plan" means any bonus, incentive compensation, savings, retirement, stock option, stock appreciation, stock ownership or purchase, pension, deferred compensation, or Welfare Benefits plan, policy, practice, program, or arrangement of (including any separate contract or agreement with) the Company or any Subsidiary for its employees.
" Restricted Territory" means, collectively, Dallas County, Texas; each county (or equivalent subdivision) of any state, district, or territory of the United States of America as to which the Executive had supervisory responsibility for the Company during his employment with the Company; and each county (or equivalent territory) adjacent to any of the preceding counties (or equivalent territories).
" Severance Payment" means an amount equal to two and one-half times the sum of:
| (i) | ||
| (ii) | the highest amount of the annual automobile allowance payable to the Executive within three months before the Change in Control; and | |
| (iii) |
For clause (iii) of this definition: (a) if the Executive has not been employed by the Company and a participant in a bonus or incentive cash compensation Plan during the three completed fiscal years of the Company before the Change in Control, the average of the annual bonuses or incentive cash compensation shall be calculated over the completed fiscal years of the Company during which the Executive was so employed and a participant in a bonus or incentive cash compensation Plan; (b) the calculation of the average of the annual bonuses or incentive cash compensation of the Executive shall include a fiscal year during which the Executive was employed by the Company and a participant in a bonus or incentive cash compensation Plan even if the Executive did not earn any bonus or incentive cash compensation for that fiscal year; (c) the bonus or incentive cash compensation paid or payable to the Executive for only part of a fiscal year of the Company shall be annualized (on the same basis as the one on which the bonus or compensation was prorated) for that fiscal year to calculate the average; and (d) the "targeted" bonus or incentive cash compensation for the fiscal year of the Company in which the Change in Control occurs shall be the amount identified as a "target" by the Board (or its compensation committee that administers the bonus or incentive cash compensation Plan) for the Executive, or if no amount is identified as a "target," the "targeted" amount shall be the amount of the bonus or incentive cash compensation that the Executive could earn for that fiscal year if the business plan for the Company or the Executive, or both, is satisfied (but not exceeded).
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" Severance Payment Event" means the occurrence of a Change in Control coincident with or followed, at any time before the end of the 24th month immediately following the month in which the Change in Control occurred, by the termination of the Executive"s employment with the Company for any reason other than (a) by the Executive without Good Reason, (b) by the Company because of Disability or for Cause, or (c) by the death of the Executive. Any transfer of the Executive"s employment from the Company to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another Subsidiary is not a termination of the Executive"s employment by the Company for purposes of the Agreement (though any such transfer might, depending on the circumstances, constitute or result in a termination of employment by the Executive for Good Reason).
" Stock Award" means a stock option, stock appreciation right, restricted stock grant, performance share plan, or any other agreement in which the Executive has, or will (by the passage of time only, not based on the Executive"s performance) have, (a) an interest in capital stock of the Company or a right to obtain capital stock or an interest in capital stock of the Company, or (b) an interest or right the economic value of which depends solely on the performance of the capital stock of the Company.
" Subsidiary" means a corporation or other entity, whether incorporated or unincorporated, of which at least a majority of the Voting Securities is owned, directly or indirectly, by the Company.
" Total Severance Benefits" means the Severance Payment and all other payments and benefits received or to be received by the Executive under the Agreement and all payments and benefits (if any) to which the Executive may be entitled under any Plan upon or as the result of a Change in Control or the termination of his employment with the Company, or both.
" Trade Secrets" means any and all information and materials (in any medium) that are proprietary to the Company or are treated as confidential by the Company as part of or relating to all or any portion of the Company"s business, including information and materials about the products and services offered, or the needs of customers served, by the Company; compilations of information, records and specifications, processes, programs, and systems of the Company; research of or for the Company; and methods of doing business of the Company.
" Voting Securities" means securities or other interests having by their terms ordinary voting power to elect members of the board of directors of a corporation or individuals serving similar functions for a noncorporate entity.
" Welfare Benefits" means medical, prescription, dental, disability, employee life, group life, accidental death, and travel accident insurance (whether funded by insurance policy or self-insured by the Company or any Subsidiary) provided or arranged by the Company or any Subsidiary to be provided to its employees.
" Welfare Benefit Plan" means any Plan that provides any Welfare Benefits.
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Interpretive Matters . In the interpretation of the Agreement, except where the context otherwise requires:
| (a) | ||
| (b) | ||
| (c) | the singular includes the plural, and visa a versa, and each gender includes each of the others; | |
| (d) | captions or headings are only for reference and are not to be considered in interpreting the Agreement; | |
| (e) | ||
| (f) | ||
| (g) | a reference to any statute, rule, or regulation includes any amendment thereto or any statute, rule, or regulation enacted or promulgated in replacement thereof. |
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