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EXHIBIT
10.1
Cash America
International, Inc.
Executive
Change-in-Control Severance Agreement
THIS EXECUTIVE
CHANGE-IN-CONTROL SEVERANCE AGREEMENT is made, entered into, and is
effective this 12th day of August, 2007 (hereinafter referred to as
the “Effective Date”), by and between Cash America
International, Inc. (the “Company”), a Texas
corporation, and John A. McDorman
(“Executive”).
WHEREAS, the Executive is
currently employed by the Company as its President of Shared
Services and
WHEREAS, the Executive
possesses considerable experience and knowledge of the business and
affairs of the Company concerning its policies, methods, personnel,
and operations; and
WHEREAS, the Company is
desirous of assuring insofar as possible, that it will continue to
have the benefit of the Executive’s services; and the
Executive is desirous of having such assurances; and
WHEREAS, the Company
recognizes that circumstances may arise in which a Change in
Control of the Company occurs, through acquisition or otherwise,
thereby causing uncertainty of employment without regard to the
Executive’s competence or past contributions. Such
uncertainty may result in the loss of the valuable services of the
Executive to the detriment of the Company and its shareholders;
and
WHEREAS, both the Company and
the Executive are desirous that any proposal for a Change in
Control or acquisition will be considered by the Executive
objectively and with reference only to the business interests of
the Company and its shareholders; and
WHEREAS, the Executive will
be in a better position to consider the Company’s best
interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of
employment which could result from any such Change in Control or
acquisition.
NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and
agreements of the parties set forth in this Agreement, and of other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
Article 1. Definitions
Wherever used in this
Agreement, the following terms shall have the meanings set forth
below and, when the meaning is intended, the initial letter of the
word is capitalized:
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(a) |
“ Agreement ” means this Executive
Change-in-Control Severance Agreement. |
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(b) |
“ Base Salary ” means, at any time, the then
regular annual rate of pay which the Executive is receiving as
annual salary, excluding amounts: (i) received under
short-term or long-term incentive or other bonus plans, regardless
of whether or not the amounts are deferred, or (ii) designated
by the Company as payment toward reimbursement of
expenses. |
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(c) |
“ Beneficial Owner ” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act. |
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(d) |
“ Board ” means the Board of Directors of
the Company. |
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(e) |
“ Cause ” shall be determined solely by the
Committee in the exercise of good faith and reasonable judgment,
and shall mean the occurrence of any one or more of the
following: |
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(i) |
The Executive’s willful and continued failure to
substantially perform his duties with the Company (other than any
such failure resulting from the Executive’s Disability),
after a written demand for substantial performance is delivered to
the Executive that specifically identifies the manner in which the
Committee believes that the Executive has not substantially
performed his duties, and the Executive has failed to remedy the
situation within fifteen (15) business days of such written
notice from the Company; or |
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(ii) |
The Executive’s conviction of a felony; or |
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(iii) |
The Executive’s willful engaging in conduct that is
demonstrably and materially injurious to the Company, monetarily or
otherwise. However, no act or failure to act on the
Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the action or omission was in the
best interests of the Company. |
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(f) |
“ Change in Control ” of the Company shall
mean the occurrence of any one (1) or more of the following
events: |
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(i) |
Any Person (other than the Company, any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company, and any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or such
proportionately owned corporation), is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of the combined
voting power of the Company’s then outstanding
securities; |
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(ii) |
During any period of not more than twenty-four
(24) consecutive months, individuals who at the beginning of
such period constitute the Board of Directors of the Company, and
any new director whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof; |
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(iii) |
The consummation of a merger or consolidation of the Company
with any other corporation, other than: (i) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than sixty
percent (60%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (ii) a
merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person acquires
more than thirty percent (30%) of the combined voting power of
the Company’s then outstanding securities; |
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(iv) |
The Company’s stockholders approve a plan of complete
liquidation or dissolution of the Company, or an agreement for the
sale or disposition by the Company of all or substantially all of
the Company’s assets (or any transaction having a similar
effect); or |
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(v) |
Any other transaction that the Board of Directors of the
Company designates as being a Change in Control. |
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(g) |
“ Code ” means the Internal Revenue Code of
1986, as amended. |
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(h) |
“ Committee ” means the Management
Development and Compensation Committee of the Board of Directors of
the Company, or, if no Management Development and Compensation
Committee exists, then the full Board of Directors of the Company,
or a committee of Board members, as appointed by the full Board to
administer this Agreement. |
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(i) |
“ Company ” means Cash America
International, Inc., a Texas corporation (including any and all
subsidiaries), or any successor thereto as provided in Article 8
herein. |
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(j) |
“ Disability ” shall have the meaning
ascribed to such term in the Executive’s governing long-term
disability plan, or if no such plan exists, at the discretion of
the Board. |
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(k) |
“ Effective Date ” means the date this
Agreement is approved by the Board or the Committee, or such other
date as the Board or Committee shall designate in its resolution
approving this Agreement, and as specified in the opening sentence
of this Agreement. |
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(l) |
“ Effective Date of Termination ” means the
date on which a Qualifying Termination occurs, as provided in
Section 2.2 herein, which triggers the payment of Severance
Benefits hereunder. |
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(m) |
“ Exchange Act ” means the Securities
Exchange Act of 1934, as amended. |
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(n) |
“ Good Reason ” means, without the
Executive’s express written consent, the occurrence after a
Change in Control of the Company of any one (1) or more of the
following: |
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(i) |
The assignment of the Executive to duties materially
inconsistent with the Executive’s authorities, duties,
responsibilities, and status (including offices, titles, and
reporting requirements) as an executive and/or officer of the
Company, or a material reduction or alteration in the nature or
status of the Executive’s authorities, duties, or
responsibilities from those in effect as of ninety
(90) calendar days prior to the Change in Control, other than
an insubstantial and inadvertent act that is remedied by the
Company promptly after receipt of notice thereof given by the
Executive; |
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(ii) |
The Company’s requiring the Executive to be based at a
location in excess of thirty-five (35) miles from the location
of the Executive’s principal job location or office
immediately prior to the Change in Control; except for required
travel on the Company’s business to an extent substantially
consistent with the Executive’s then present business travel
obligations; |
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(iii) |
A reduction by the Company of the Executive’s Base Salary
in effect on the Effective Date hereof, or as the same shall be
increased from time to time; |
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(iv) |
The failure of the Company to continue in effect any of the
Company’s short- and long-term incentive compensation plans,
or employee benefit or retirement plans, policies, practices, or
other compensation arrangements in which the Executive participates
unless such failure to continue the plan, policy, practice, or
arrangement pertains to all plan participants generally; or the
failure by the Company to continue the Executive’s
participation therein on substantially the same basis, both in
terms of the amount of benefits provided and the level of the
Executive’s participation relative to other participants, as
existed immediately prior to the Change in Control of the
Company; |
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(v) |
The failure of the Company to obtain a satisfactory agreement
from any successor to the Company to assume and agree to perform
the Company’s obligations under this Agreement, as
contemplated in Article 8 herein; and |
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(vi) |
A material breach of this Agreement by the Company which is not
remedied by the Company within ten (10) business days of
receipt of written notice of such breach delivered by the Executive
to the Company. |
The Executive’s right
to terminate employment for Good Reason shall not be affected by
the Executive’s incapacity due to physical or mental illness.
The Executive’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason herein.
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(o) |
“ Person ” shall have the meaning ascribed
to such term in Section 3(a)(9) of the Exchange Act and used
in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d). |
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(p) |
“ Qualifying Termination ” means any of the
events described in Section 2.2 herein, the occurrence of
which triggers the payment of Severance Benefits
hereunder. |
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(q) |
“ SERP ” means the Cash America
International, Inc. Supplemental Executive Retirement Plan, as
amended from time to time. |
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(r) |
“ Severance Benefits ” mean the payment of
severance compensation as provided in Section 2.3
herein. |
Article 2. Severance
Benefits
2.1 Right to Severance
Benefits . The Executive shall be entitled to receive from the
Company Severance Benefits as described in Section 2.3 herein,
if there has been a Change in Control of the Company and if, within
twenty-four (24) calendar months thereafter, the
Executive’s employment with the Company shall end for any
reason specified in Section 2.2 herein as being a Qualifying
Termination.
The Executive shall not be
entitled to receive Severance Benefits if he is terminated for
Cause, or if his employment with the Company ends due to death,
Disability, voluntary normal retirement (as defined under the then
established rules of the Company’s tax-qualified retirement
plan), or due to a voluntary termination of employment for reasons
other than as specified in Section 2.2(b) herein.
2.2 Qualifying
Termination . The occurrence of any one of the following events
within twenty-four (24) calendar months after a Change in
Control of the Company shall trigger the payment of
Severance
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