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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT
This AGREEMENT made as of the 6th day of September, 2000, by and
between Hispanic Express, Inc., a Delaware corporation with its principal
offices at 5480 East Ferguson Drive, Commerce, California 90022 (the
"Corporation"), and Gary M. Cypres (the "Executive").
W I T N E SS E T H :
In consideration of the mutual covenants contained herein, the
parties hereto agree as follow:
1. TERM: The Corporation hereby employs the Executive as Chairman of the
Board, Chief Executive Officer and President of the Corporation, and the
Executive agrees to serve the Corporation as such, upon the terms and
conditions hereof for a period of five years commencing on the date
hereof.
2. DUTIES:
(a) Executive shall serves as the Chairman of the Board of the
Corporation, Chief Executive Officer and President with such
duties and authority as are generally incident to such positions,
or shall serve in such other senior management positions as the
Corporation shall determine, provided that such other positions
shall be comparable in authority and responsibility to the
positions specified above. The Executive will hold such senior
offices in the Corporation and/or its subsidiaries or affiliates
to which he may be elected or appointed from time to time,
provided that such offices shall not be inconsistent with his
duties and authority as aforesaid.
(b) The Executive agrees that he will devote substantially all of his
time and attention to the affairs of the Corporation, and will
use his best efforts to promote the business and interests of the
Corporation. It is understood, however, that the foregoing will
not prohibit the Executive from engaging, conducting, or
participating, either directly or indirectly, in businesses that
do business with or are related to Banner's Central Electric,
Inc., Banner Central Finance Company, West Coast Private Equity
Partners, L.P., Central Rents, Inc. and/or any of their
subsidiaries or affiliates. It is further understood that the
terms of this Agreement will not prohibit the Executive from
engaging in personal investment and business activities for
himself and his family which do not interfere with the
performance of his duties hereunder.
3. COMPENSATION: The Corporation will pay the Executive a salary as set
forth below, payable in equal installments in accordance with customary
payroll practices for senior executives of the Corporation, in
consideration for all services to be rendered by the Executive hereunder
(including, without limitation, all services to be rendered by him as an
officer of the Corporation and/or its subsidiaries and affiliates).
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BASE SALARY
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January 1, 2001 to December 31, 2001 $325,000
January 1, 2002 to December 31, 2002 $350,000
January 1, 2003 to December 31, 2003 $375,000
January 1, 2004 to December 31, 2004 $400,000
January 1, 2005 to December 31, 2005 $425,000
The Company may also pay the Executive an annual bonus with respect
to each fiscal year of the Corporation, either on an "ad hoc" basis, or pursuant
to any bonus plan or arrangement for senior executives of the Corporation as may
be established at the Corporation's discretion.
Nothing contained herein shall prohibit the Board of Directors of
the Corporation, in its sole discretion, from increasing the compensation
payable to the Executive pursuant to this Agreement and/or making available to
the Executive other benefits in addition to those benefits which the Executive
is entitled to hereunder.
4. EXPENSES: The Executive shall be entitled to reimbursement by the
Corporation, in accordance with the Corporation's policies then
applicable to senior executives at the Executive's level, against
appropriate vouchers or other receipts for authorized travel,
entertainment and other business expenses reasonably incurred by him in
the performance of his duties hereunder.
5. EXECUTIVE BENEFITS:
(a) SERP PLAN BENEFITS: The Executive shall continue to participate
in the Corporation's Supplemental Executive Retirement Plan (the
"SERP Plan"), for which the Corporation has assumed all liability
from Central Financial Acceptance Corporation, a Delaware
corporation, and shall be fully vested in the SERP Plan
(including credit for five Post-Effective Date Years of Service,
as such term is defined in the SERP Plan) and his "Normal
Retirement Date" for all purposes shall be deemed to be December
31, 2000. If the Executive is terminated without "cause", as
defined in Paragraph 8 below, becomes disabled, or dies at any
time after the date hereof, then the Corporation will commence
immediately to pay the Executive or his estate under the SERP
Plan a benefit equal to his full vested interest (including
credit for five Post-Effective Date Years of Service) as if he
had worked to his Normal Retirement Date. Thus, by way of example
of the above contained provisions, if Executive retires on
December 31, 2000, the numerator of the fraction referred to in
the definition of Accrued Benefits in Section 2 (a) of the SERP
Plan shall be 13 and the denominator shall be 13. Further, for
purposes of the definition of Final Average Compensation in
Section 2 (j) of the SERP Plan, if the Executive's Final Average
Compensation must be calculated before July 14, 2004, his Final
Average Compensation shall be the
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higher of (i) as determined pursuant to the SERP Plan and the
provisions of this Agreement; (ii) if he dies or becomes
disabled, $275,000, or his then current salary if higher on an
annualized basis, plus a pro rata estimate of his bonus award for
the current year determined on a reasonable basis taking into
consideration prior bonus awards; or, (iii) if he is terminated
without cause, $367,000, plus an estimate of his bonus award for
the current year determined on a reasonable basis taking into
consideration prior bonus awards, but in no event shall the bonus
be less than $30,000. To the extent of any inconsistency between
this Agreement and the SERP Plan, the terms of this Agreement
shall prevail.
(b) GENERAL BENEFITS: The Executive shall be entitled to participate
in, and receive benefits under, any pension, profit sharing,
insurance, hospitalization, medical, disability, or other
employee benefit plan, program or policy of the Corporation which
may be in effect at any time during the course of his employment
by the Corporation, and which shall be generally available to
senior executives of the Corporation occupying positions of
comparable status or responsibility, subject to the terms of such
plans, programs or policies. The Executive shall be entitled to
up to five and a half weeks vacation per year, plus normal
holidays and sick days. Notwithstanding the foregoing, the
Corporation may in its discretion and at any time, change or
evoke any of its employee benefits plans, programs or policies,
other than the (1) Executive's compensation; (2) vacation
provisions; and, (3) the SERP Plan, all as set forth herein, and
the Executive shall not be deemed, by virtue of this Agreement,
to have any vested interest in any such plans, programs or
policies, except as otherwise provided herein. The Corporation
will also provide the Executive, at the Corporation's expense,
with an automobile reasonably appropriate to the Executive's
position, as determined by the Corporation, for use by the
Executive in connection with the performance of his duties
hereunder.
(c) STOCK OPTIONS: The Executive is awarded a grant of 325,000 at
[$___] per share, stock options pursuant to the provision of the
Company's 2000 Stock Option Plan, as amended. The Executive will
be 60% vested in such options and the remainder shall accrue over
a two-year period in equal yearly amounts. Should the Company
terminate the Executive without cause during the term of the
contract, then the remaining unvested portion of such options
shall vest immediately.
6. WITHHOLDING: All payment required to be made by the Corporation to the
Executive hereunder shall be subject to the withholding of such amounts
relating to taxes and other governmental assessments as the Corporation
may reasonable determine it is obligated to withhold pursuant to any
applicable law, rule or regulation.
7. DEATH; PERMANENT DISABILITY: This Agreement shall terminate upon the
death of the Executive during the term of this Agreement, except as
otherwise provided herein. If the Executive fails to perform the
services required hereunder during the term of this Agreement because of
illness or other incapacity for any consecutive period of more than 270
days, or for shorter periods aggregating more than 270 days in any
consecutive
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twelve-month period (any such illness or incapacity being hereinafter
referred to as "permanent disability"), then the Corporation, in its
discretion, may at any time thereafter terminate this Agreement upon not
less than 10 days written notice thereof to the Executive, and this
agreement shall terminate and come to an end upon the date set forth in
said notice as if said date were the termination date of this Agreement;
provided, however, that such termination shall not become effective if,
prior to the date when such notice is given, the Executive's illness or
incapacity shall end and he shall be physically and mentally able to
perform the services required hereunder, and shall have taken up and
begun performing such duties.
If the Executive's employment shall be terminated by reason of his death
or permanent disability, the Corporation shall be obligated to pay the
Executive or his estate, commencing immediately, (i) a lump sum payment
equal to the Executive's base salary for the remaining term of this
Agreement; (ii) a pro rata portion of any annual bonus which the
Executive would otherwise have been entitled to receive pursuant to any
bonus plan or arrangement for senior executives of the Corporation (such
pro rata portion to be payable at the time such annual bonus would
otherwise have been payable to the Executive); and, (iii) subject to the
terms thereof, any benefits which may be due to the Executive on the
date of termination by reason of death or disability under the
provisions of this Agreement, or any employee benefit plan, program or
policy.
8. TERMINATION:
(a) TERMINATION FOR CAUSE: The Corporation may at any time during the
term of this Agreement terminate the employment of the Executive
for cause. Termination for cause shall be by written notice which
specifies the cause for termination, and termination of
employment shall be immediately effective upon the Corporation
giving the Executive such notice. For purposes of this Agreement,
"cause" shall mean (i) willful gross failure, gross neglect, or
gross unreasonable refusal to perform the Executive's duties
hereunder; and, (ii) conviction in connection with any felony
involving moral turpitude. If the Executive is terminated for
cause, the Corporation will be obligated to pay the Executive (i)
only his base salary up to the date upon which the Corporation
notifies him of his termination for cause, and (ii) subject to
the terms thereof, any benefits which may be due to the Executive
under the provisions of this Agreement, or any employee benefit
plan, program, or policy.
(b) TERMINATION WITHOUT CAUSE: If the Executive is terminated without
cause, then the Corporation will be obligated to pay him or his
estate, commencing immediately, his base salary, plus a
reasonable estimate of the Executive's bonus pursuant to the
Company's Incentive Bonus Plan for the remaining term of this
Agreement, in addition to any other compensation and/or benefits
herein provided. If the Executive becomes disabled or dies, then
the Company will be obligated to pay him or his estate,
commencing immediately, a lump sum payment equal to his base
salary for the remaining term of this Agreement, in addition to
any other compensation and/or benefits herein provided.
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9. INSURANCE:
The Executive agrees that the Corporation may insure the life of the
Executive in such amounts as the Corporation may in its discretion
determine, and may designate the Corporation as the beneficiary under
such policy or policies. The Executive agrees that he will submit to a
physical examination upon the Corporation's request, and will execute
any applications or other documents as may be required to procure such
life insurance.
10. NON-COMPETITION; SOLICITATION:
(a) The Executive agrees that during his employment with the
Corporation and for any period following his termination which
period is greater than 12 months and for which the Executive has
been paid a lump sum by the Corporation in accordance with this
Agreement, he shall not, without the written consent of the
Corporation and except as otherwise provided herein, directly or
indirectly, either individually or as an employee, agent,
partner, shareholder, option holder, lender of money, or
guarantor, participate in, engage in or have a financial interest
or management position or other interest in any business, firm,
corporation or management position or other interest in any
business, firm, corporation or other entity if it competes
directly with any business operation conducted by the Corporation
or its subsidiaries or affiliates or any successor or assignor
thereof, during the employment period or at the time of
termination. The foregoing provisions of this Section 10(a) shall
not prohibit the ownership by the Executive of 10% or less of any
class of capital stock of a corporation which is regularly traded
on a national securities exchange or over-the-counter on the
NASDAQ System.
(b) The Executive further agrees that at any time during his
employment with the Corporation and for any period following his
resignation or termination which period is greater than 12 months
and for which the Executive has been paid a lump sum by the
Corporation in accordance with this Agreement, he shall not
solicit (or assist or encourage the solicitation of ) any
employee of the Corporation or any of its subsidiaries or
affiliates to work for Executive or for any business, firm,
corporation or other entity in which the Executive, directly or
indirectly, in any capacity described in Section 10(a) hereof,
participates or engages (or expects to participate or engage) or
has (or expects to have) a financial interest or management
position.
(c) If any covenant contained in this Section 10, or any part
thereof, is held by a court of competent jurisdiction to be
unenforceable because of the duration of such provision, the
activity limited by such provision, or the subject and/or area
covered by such provision, then the court making such
determination shall construe such restriction so as to thereafter
limit or reduce the scope or duration of such provision or part
thereof to be valid and enforceable to the greatest extent
permissible under applicable law.
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11. TRADE SECRETS, ETC.: The Executive agrees that he shall not, during or
after the termination of this Agreement, divulge, furnish or make
accessible to any person, firm, corporation or other business entity,
any information, trade secrets, technical data or know-how relating to
the business, business practices, methods, products, processes,
equipment, clients' prices or other confidential or secret aspect of the
business of the Corporation and/or any subsidiary or affiliate, except
as may be required in good faith in the course of his employment with
the Corporation or by law, without the prior written consent of the
Corporation, unless such information shall become public knowledge
(other than by reason of Executive's breach of the provisions hereof).
12. ACCEPTANCE BY EXECUTIVE: The Executive accepts all of the terms and
provisions of this Agreement and agrees to perform all of the covenants
on his part to be performed hereunder.
13. EQUITABLE REMEDIES: The Executive acknowledges that he has been employed
for his unique talents and that his leaving the employ of the
Corporation would seriously hamper the business of the Corporation and
that the Corporation will suffer irreparable damage if any provisions of
Sections 10 or 11 hereof are not performed strictly in accordance with
their terms or are otherwise breached. The Executive hereby expressly
agrees that the Corporation shall be entitled as a matter of right to
injunctive or other equitable relief, in addition to all other remedies
permitted by law, to prevent a breach or violation by the Executive and
to secure enforcement of the provisions of Sections 10 or 11 hereof.
Resort to such equitable relief, however, shall not constitute a waiver
or any other rights or remedies which the Corporation may have.
14. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
between the parties hereto and there are no other terms other than those
contained herein. No variation hereof shall be deemed valid unless in
writing and signed by the parties hereto, and no discharge of the terms
hereof shall be deemed valid unless by full performance of the parties
hereto or by a writing signed by the parties hereto. No waiver by the
Corporation or any breach by the Executive of any provision or condition
of this agreement to be performed by him shall be deemed a waiver of a
breach of a similar or dissimilar provision or condition at the same
time or any prior or subsequent time.
15. SEVERABILITY: The validity and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or
impaired in the event that any provision in this agreement shall be
declared invalid, illegal or unenforceable by any court of competent
jurisdiction.
16. NOTICES: All notices, request, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have
been given at the time when mailed in the United States enclosed in a
registered or certified post-paid envelope, return receipt requested,
and addressed to the appropriate parties at the address stated below, or
to such changed addresses as such parties may designate by notice;
Correspondence to: 5480 E. Ferguson Drive, 3rd Floor
Commerce, CA 90022
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provided, however, that any notice of change of address shall be
effective only upon receipt.
17. SUCCESSORS AND ASSIGNS: This Agreement in personal in its nature and
neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder
(except for an assignment or transfer by the Corporation to a successor
as contemplated by the following proviso); provided, however, that the
provisions hereto shall inure to the benefit of, and be binding upon,
any successor of the Corporation, whether by merger, consolidation,
transfer of all or substantially all of the assets of the Corporation,
or otherwise, and upon the Executive, his heirs, executors,
administrators and legal representatives.
18. GOVERNING LAW: This agreement and its validity, construction and
performance shall be governed in all respects by the internal laws of
the State of California without giving effect to any principles of
conflict of laws.
19. HEADINGS: The headings in this agreement are for convenience of
reference only and shall not control or affect the meaning or
construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunder set their hands
and seals the day and year first above written.
HISPANIC EXPRESS, INC.
By: /s/ Gary M. Cypres
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Gary M. Cypres,
Chief Executive Officer
and President
EXECUTIVE
By: /s/ Gary M. Cypres
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Gary M. Cypres