EXHIBIT 10.10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), effective August 1, 1999, between
FirstAmerica Automotive, Inc. ("FAA", "Employer" or "Corporation"), and Tom
Price ("Executive"). This Agreement's purpose is to establish in writing all the
terms and conditions of that employment, and specifically incorporates the Non-
Disclosure and Confidentiality Agreement.
Section 1. Position and Duties.
Executive shall be employed by the Corporation as its Chairman and Chief
Executive Officer, reporting to the Board of Directors. Subject to the
supervision and control of the Board of Directors of the Corporation (the
"Board"), Executive shall do and perform all services and acts necessary or
advisable to fulfill the duties and responsibilities of his position and shall
render such services on the terms set forth herein. In addition, Executive shall
have such other executive and managerial powers and duties with respect to the
Corporation as may be assigned to him by the Board. Executive shall devote his
full working time, attention and efforts to the Corporation and its affiliates;
provided, however, nothing in this Agreement shall preclude Executive from
pursuing those ventures or business activities described in Schedule 1, subject
to approval by the Board, and so long as such efforts do not interfere with
Executive's duties and responsibilities as provided herein or otherwise involve
more than 5 % (five percent) of Executive's daily work activities. Executive's
principal place of employment shall be the Corporation's principal executive
offices.
Section 2. Term.
The term of this Agreement shall commence on August 1, 1999 and shall
continue for a period of five (5) years thereafter ("Initial Term"), unless
Executive's employment and this Agreement are earlier terminated pursuant to
Section 5, or extended by mutual agreement of the parties; provided, however,
the term of this Agreement shall be automatically renewed for successive periods
of one year (each a "Renewal Term"), unless either party gives the other written
notice of termination or a desire to change the provisions herein on or before
the thirtieth (30th) day prior to the expiration of the Initial Term or any
Renewal term.
Section 3. Basic Compensation.
The Employer shall pay compensation to the Executive as set forth herein.
Such compensation shall be reviewed annually and modified as determined by the
sole discretion of the Corporate Board of Directors.
Salary
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An annual base salary of $600,000 (six hundred thousand dollars),
approximately $50,000 (Fifty thousand dollars) per month gross pay per month,
will be paid to Executive, subject to applicable withholding, in accordance with
the Corporation's normal payroll procedures (the "Base Salary").
Benefits
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During the first year of this Agreement, the Corporation shall provide the
Executive with the following benefits, on the same basis as other executive
officers of the Corporation, to
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participate in and to receive benefits under any of the Corporation's Executive
benefit plans, including the major medical, dental, vision and hospitalization
insurance coverage, disability insurance, life insurance, automobile insurance
and similar benefits, including any retirement plan maintained by the
Corporation, for which he is eligible in accordance with its terms. In addition,
Executive shall be entitled to the benefits afforded to other members of senior
management under the Corporation's vacation, holiday and business expense
reimbursement policies as outlined in the Executive Handbook.
Bonus
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Executive shall be eligible to earn an annual performance bonus of up to
60% of Executive's annual base salary for the then-current fiscal year (the
"Performance Bonus"). The Performance Bonus shall be determined on the following
basis:
(i) Fifty percent of the Performance Bonus shall be
considered earned upon the Corporation's meeting such
annual performance objectives as shall be established
by the Compensation Committee of the Board no later
than ten weeks following the beginning of the
Corporation's then-current fiscal year.
(ii) Fifty percent of the Performance Bonus shall be
awarded strictly in the Board's discretion.
The Performance Bonus shall be paid within thirty days of receipt of
notification by the Compensation Committee of the Board of Executive's
attainment of the pre-established goals under subsection (i) herein, and said
bonus shall not accrue until the conclusion of the fiscal year for which such
bonus is to be paid.
Corporate Vehicle
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Executive will be provided a corporate vehicle (and all associated
expenses) commensurate with his executive position, not to exceed an monthly
vehicle allowance of $1200.00.
Expense Reimbursement
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Upon receipt of proper documentation establishing the amount of such
expenses, the Corporation shall reimburse Executive for any reasonable business
expenses incurred.
Section 4. Return of Corporation Property.
Immediately upon the termination of Executive's employment, Executive shall
return to the Corporation all of its property, equipment, documents, records,
lists, files and any and all other Corporation materials including, without
limitation, computerized or electronic information, that is in Executive's
possession (the "Corporation Property") by delivering the Corporation Property
to the Corporation's principal executive offices on or before the date of such
term. Unless otherwise agreed by the Corporation in writing, Executive shall not
retain any Corporation Property or any copies thereof.
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Section 5. Benefits Upon Termination.
In the event of termination of Executive's employment by the Corporation,
based on the reasons set forth below, he shall be entitled to the following:
a. Termination for Cause: If Executive's employment is terminated
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by the Corporation for cause, Executive shall be entitled to no
compensation or benefits from the Corporation other than those
already earned under paragraph 3 through the date of his
termination. For purposes of this Agreement, a termination "for
cause" occurs if (Executive) is terminated for any of the
following reasons:
1. theft, dishonesty, breach of fiduciary duty, or
falsification of any employment or Corporation records;
2. improper disclosure of the Corporation's confidential or
proprietary information, including a violation of the Non-
Disclosure and Confidentiality Agreement.;
3. any intentional act by Executive which has a material
detrimental effect on the Corporation's reputation or
business as determined by the Corporation, including any
conviction for a felony or a criminal offense involving
moral turpitude; or,
4. any material breach of this Agreement by Executive, which
breach is not cured within thirty (30) days following
written notice of such breach from the Corporation. If such
material breach cannot be cured, Executive may be terminated
immediately without written notice and opportunity to cure.
b. Termination Other Than For Cause: If Executive's employment is
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terminated by the Corporation for any reason other than for
cause, Executive shall be entitled to the following separation
benefits:
1. Continuation of Executive's Base Salary for a period of one
year, such salary continuation payments to be made in
accordance with the Corporation's ordinary payroll
procedures without regard to whether Executive obtains
alternative employment in the interim; and
2. Payment of an amount equivalent to the annual average of the
amounts of annual Performance Bonuses previously paid to
Executive, less applicable withholding, with such payment to
be made in twelve equal monthly installments.
c. Resignation for Good Reason: For purposes of paragraph 5(b) of
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this Agreement, Executive's resignation for Good Reason following
a Transfer of
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Control shall constitute a Termination Other Than for Cause.
For purposes of this Agreement, a "Transfer of Control" shall mean an
"Ownership Change Event" (as defined below) or a series of related Ownership
Change Events (collectively, the "Transaction") wherein the stockholders of the
Corporation immediately before the Transaction do not retain immediately after
the transaction direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting stock
of the Corporation or the corporation or the corporations to which the assets of
the Corporation were transferred (the "Transferee Corporation(s)"), as the case
may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the
voting stock of one or more corporations which, as a result of the Transaction,
own the Corporation or the Transferee Corporation(s), as the case may be, either
directly or through one or more subsidiary corporations. The Board shall have
the right to determine whether multiple sales or exchanges of the voting stock
of the Corporation or Multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
For purposes of this Agreement, "Good Reason" means any of the following
conditions, which condition(s) remain(s) in effect 30 days after written notice
to the Board from Executive of the following condition(s):
(i) a decrease in Executive's base salary and/or a
material decrease in Executive's standard management
bonus plan or Executive benefits;
(ii) a material, adverse change in Executive's title,
authority, responsibilities or duties, as measured
against Executive's title, authority,
responsibilities or duties immediately prior to such
change;
(iii) any material breach by the Corporation of any
provision of this Agreement, which breach is not
cured within thirty (30) days following written
notice of such breach from Executive;
(iv) Any failure of the Corporation to obtain the
assumption of this Agreement by any successor or
assign of the Corporation; or
(v) Any purported termination of Executive's employment
for "material breach of contract" which is not
effected following a written notice satisfying the
requirements of paragraph 5.
For purposes of this Agreement, an "Ownership Change Event" shall be deemed
to have occurred if any of the following occurs with respect to the
Corporation:
(i) The direct or indirect sale or exchange in a single
or series of related transactions by the stockholders
of the Corporation of more than fifty percent (50%)
of the voting stock of the Corporation;
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(ii) A merger or consolidation in which the Corporation is
a party;
(iii) The sale, exchange, or transfer of all or
substantially all of the assets of the Corporation;
or
(iv) A liquidation or dissolution of the Corporation.
Section 6. Benefits Upon Voluntary Termination.
In the event Executive voluntarily resigns from his employment with the
Corporation, or in the event that Executive's employment terminates as a result
of his death or disability, Executive shall be entitled to no compensation or
benefits from the Corporation other than those earned under paragraph 3 above.
Section 7. Remedy for Breach.
The Executive acknowledges that a violation of any of the provisions of
this Agreement, including its restrictive covenants, will cause irreparable
damage to the Employer, its successors and assigns. The Executive consents that
any violation shall entitle the Employer or its successors and assigns, in
addition to any other rights or remedies it, or they, may have, to an immediate
injunction restraining any violation.
Section 8. Notices.
All notices, requests, demands, and other communications that are required
or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid to the Board of Directors at the
corporate headquarters or to the Executive's last known home address, whichever
is applicable.
Section 9. Governing Laws.
This Agreement shall be construed and enforced in accordance with the laws
of the State of California excluding its conflict of law provisions.
Section 10. Entire Agreement.
This Agreement contains the entire agreement among the parties regarding
Executive's pay plan and the "at-will" employment relationship. All prior
negotiations, agreements, and understandings are superseded. This Agreement may
not be amended or revised except by a writing signed by all the parties.
Section 11. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the heirs,
legal representatives, and successors of the respective parties; provided
however, that this Agreement and all its rights may not be assigned by any party
except by or with the written consent of the other parties.
Section 12. Confidential Information and Nondisclosure Agreement.
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Executive agrees to execute and abide by the terms and conditions of the
Corporation's standard Executive Confidential Information and Nondisclosure
Agreement.
Section 13. Non-Solicitation of Executives.
In the event that Executive's employment with the Corporation is terminated
for any reason, Executive agrees that for a period of one year after the date of
this Agreement, he shall not, either directly or indirectly, solicit the
services, or attempt to solicit the services of any employee of the Corporation
or its affiliated entities to any other person or entity, without the written
consent of the Board of Directors.
Section 14. Survival.
In the event of termination of Executive's employment and this Agreement
for any reason by Executive or the Corporation, Executive and/or the
Corporation, as the case may be, nevertheless shall continue to be bound by the
terms and conditions set forth in Sections 12 through 13 herein and all of the
terms and conditions incorporated therein.
Section 15. Attorneys' Fees.
The prevailing party shall be entitled to recover from the losing party is
attorneys' fees and costs incurred in any action brought to enforce any right
arising out of this Agreement.
Section 16. Mandatory Binding Arbitration.
Executive and Employer knowingly and voluntarily agree that in the event
there is any dispute arising out of Executive's employment with, seeking
employment with, or separation from the Employer that would require or allow
resort to any court, regardless of the kind or type of dispute, including, but
not limited to, claims of discrimination and harassment (except for claims
before the National Labor Relations Board or claims for physical injury under
the Worker's Compensation Act or disputes relating to misappropriation of
intellectual property), such dispute shall be submitted exclusively to final and
binding arbitration pursuant to the provisions of the Federal Arbitration Act,
in conformity with the procedures of the California Arbitration Act (Cal. Code
Civ. Proc. Sec. 1280 et seq.). All such arbitration proceedings shall take place
in the city of San Francisco, California, at a mutually agreed upon location.
Executive understands that by voluntarily agreeing to this binding arbitration
provision, both the Corporation and the Employer give up the right to a trial by
jury.
IT IS SO UNDERSTOOD AND AGREED:
EXECUTIVE:
Dated: August 1, 1999 Signature: /s/ Thomas Price
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EMPLOYER:
Dated: August 1, 1999 Signature: /s/ Bruce Bercovich
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