EXHIBIT 10.1
COPART, INC.
AMENDED AND RESTATED EXECUTIVE
OFFICER
EMPLOYMENT
AGREEMENT
This Amended and Restated Executive
Officer Employment Agreement is entered into as of
September 25, 2008 by and between Copart, Inc., a
California corporation (the “ Company ”),
and William E. Franklin (the “ Executive
”).
RECITALS :
A.
The Company and the Executive
previously entered into an Executive Officer Employment Agreement
(the “Original Agreement”) dated March 15, 2004
(the “Effective Date”).
B.
The Board of Directors of the
Company (the “Board”) believes it is in the best
interests of the Company and its shareholders to amend the terms of
the Original Agreement in order to comply with Section 409A of
the Internal Revenue Code of 1986, as amended (the
“Code”).
AGREEMENT :
In consideration of the mutual
covenants herein contained and the continued employment of
Executive by the Company, the parties agree as follows:
1.
Duties and
Scope of Employment .
(a)
Position and
Duties . As of the Effective
Date, Executive will serve as Senior Vice President and Chief
Financial Officer of the Company. Executive will render such
business and professional services in the performance of his
duties, consistent with Executive’s position within the
Company, as shall reasonably be assigned to him the Chief Executive
Officer (CEO), President or Executive Vice President (Senior
Management) and as are contemplated by the Company’s
bylaws. During the term of Executive’s employment with
the Company, Executive shall report to and be subject to the
directives of the Board of Directors and Senior Management. The
period of Executive’s employment under this Agreement is
referred to herein as the “ Employment Term
.”
(b)
Obligations
. During
the Employment Term, Executive will perform his duties faithfully
and to the best of his ability and will devote his full business
efforts and time to the Company. For the duration of the
Employment Term, Executive agrees not to actively engage in any
other employment, occupation or consulting activity for any direct
or indirect remuneration without the prior approval of the
Board.
2.
Employment
Terms .
(a)
Basic
“At Will” Rule . The Employment Term
shall begin upon the Effective Date and shall continue thereafter
until terminated by the Company or the Executive. The
Executive acknowledges and agrees that his employment with the
Company is “at will” and may be terminated at any time,
with or without notice, with or without good cause, or for any or
no cause, at the option of either the Company or the
Executive. Executive understands and agrees that neither his
job performance nor promotions, commendations, bonuses or the like
from the Company shall give rise to, or in any way serve as the
basis for modification, amendment, or extension, by implication or
otherwise, of the Executive’s at-will employment with the
Company.
(b)
Termination
. If the
Company terminates the Executive’s employment at any time for
any reason other than Cause or Disability, both as defined below,
or if the Executive terminates his employment at any time for Good
Reason, as defined below, the provisions of paragraph
9(a)(i) shall apply. If the Executive terminates his
employment at any time other than for Good Reason, the provisions
of paragraph 9(a)(ii) shall apply. Upon termination of
the Executive’s employment with the Company, the
Executive’s rights under any applicable benefit plans shall
be determined under the provisions of those plans.
(c)
Death . The Executive’s
employment shall terminate in the event of his death. The
Company shall have no obligation to pay or provide any compensation
or benefits under this Agreement on account of the
Executive’s death, or for periods following the
Executive’s death; provided , however , that
the Company’s obligations under paragraph 9(a)(i) shall
not be interrupted as a result of the Executive’s death
subsequent to a termination to which such paragraph applies.
The Executive’s rights under the benefit plans of the Company
in the event of the Executive’s death shall be determined
under the provisions of those plans.
(d)
Cause . For all purposes
under this Agreement, “ Cause ” shall mean
Executive’s:
(i)
willful or
grossly negligent failure to substantially perform his duties
hereunder;
(ii)
commission of
gross misconduct which is injurious to the Company;
(iii)
breach of a
material provision of this Agreement or the agreements incorporated
herein by reference;
(iv)
material
violation of a federal or state law or regulation applicable to the
business of the Company;
(v)
misappropriation
or embezzlement of Company funds or an act of fraud or dishonesty
upon the Company made by Executive;
(vi)
conviction of, or
plea of nolo contendre to, a felony; or
(vii)
continued failure
to comply with directives of Senior Management.
No act, or failure to act, by the
Executive shall be considered “willful” unless
committed without good faith without a reasonable belief that the
act or omission was in the
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Company’s best interest. No
compensation or benefits will be paid or provided to the Executive
under this Agreement on account of a termination for Cause, or for
periods following the date when such a termination of employment is
effective. The Executive’s rights under the benefit
plans of the Company shall be determined under the provisions of
those plans.
(e)
Disability
. The
Company may terminate the Executive’s employment for
Disability by giving the Executive 30 days’ advance notice in
writing. For all purposes under this Agreement, “
Disability ” shall mean that the Executive, at the
time notice is given, has been unable to substantially perform his
duties under this Agreement for a period of not less than
six (6) consecutive months as the result of his
incapacity due to physical or mental illness. In the event
that the Executive resumes the performance of substantially all of
his duties hereunder before the termination of his employment under
this subparagraph (e) becomes effective, the notice of
termination shall automatically be deemed to have been
revoked. No compensation or benefits will be paid or provided
to the Executive under this Agreement on account of termination for
Disability, or for periods following the date when such a
termination of employment is effective. The Executive’s
rights under the benefit plans of the Company shall be determined
under the provisions of those plans.
(f)
Good
Reason . Employment with the
Company may be regarded as having been constructively terminated by
the Company, and the Executive may therefore terminate his
employment for “ Good Reason ” within 30 days
following the expiration of any Company cure period (as described
below) and thereupon become entitled to the benefits of paragraph
9(a)(i) below, if one or more of the following events
(described in clauses (i) through (iii) below) shall have
occurred without the Executive’s prior written
consent. The Executive will not resign for “Good
Reason” without first providing the Company with written
notice of the acts or omissions constituting the grounds for
“Good Reason” within 90 days of the initial existence
of such grounds for “Good Reason” and a reasonable cure
period of not less than 30 days following the date of such
notice.
(i)
the assignment to
the Executive of any duties or the reduction of the
Executive’s duties, either of which results in a material
diminution in the Executive’s position or responsibilities
with the Company in effect immediately prior to such assignment, or
the removal of the Executive from such position and
responsibilities;
(ii)
a material
reduction by the Company in the Base Salary (as defined below) of
the Executive as in effect immediately prior to such
reduction;
(iii)
any material
breach by the Company of any material provision of this
Agreement.
3.
Place of
Employment . The Executive’s
services shall be performed at the Company’s principal
executive offices in Fairfield, California. The parties
acknowledge, however, that the Executive will be required to travel
in connection with the performance of his duties
hereunder.
4.
Compensation
.
(a)
Base
Salary . For all services to
be rendered by the Executive pursuant to this Agreement, the
Company agrees to pay the Executive effective August 25, 2008
and during the
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remainder of the Employment
Term a base salary (the “ Base Salary ”) at an
annual rate of not less than $300,000. The Base Salary shall
be paid in periodic installments in accordance with the
Company’s regular payroll practices. The Company agrees
to review the Base Salary at least annually after the conclusion of
the Company’s fiscal year (July 31) and to make such
increases therein as the Board may approve.
(b)
Bonus . Beginning with the
Company’s 2009 fiscal year and for each fiscal year
thereafter during the Employment Term, the Executive will be
eligible to receive an annual bonus (the “ Bonus
”) in the form of cash and/or stock option grants for such
fiscal year as approved by the Compensation Committee and the
Board. Payment of an annual bonus shall be a discretionary
decision of the Board. The Bonus, if any, will be paid as
soon as practical following the determination by the Board or its
Compensation Committee that the Bonus has been earned, but in no
event after the fifteenth day of the third month of the
Company’s fiscal year or the calendar year, whichever is
later, following the date the Executive earns the Bonus and it is
no longer subject to a substantial risk of forfeiture.
5.
Employee
Benefits . During the Employment
Term, the Executive shall be entitled to participate in employee
benefit plans or programs of the Company, if any, to the extent
that his position, tenure, salary, age, health and other
qualifications make him eligible to participate, subject to the
rules and regulations applicable thereto. The Company
reserves the right to cancel or change the benefit plans and
programs it offers to its employees at any time. The Company
will not materially reduce the kind or level of employee benefits
to which the Executive is entitled in a manner that would result in
the Executive’s overall benefits package being materially
reduced. Any such reduction of benefits by the Company will
constitute a material breach of the Agreement.
6.
Vacation
. Executive
will be entitled to paid vacation of three (3) weeks per year
in accordance with the Company’s vacation policy, with the
timing and duration of specific vacations mutually and reasonably
agreed to by the parties hereto.
7.
Expenses
. The
Executive shall be entitled to prompt reimbursement by the Company
for all reasonable ordinary and necessary travel, entertainment,
and other expenses incurred by the Executive while an employee of
the Company (in accordance with the policies and procedures
established by the Company for its senior executive officers) in
the performance of his duties and responsibilities under this
Agreement; provided , however , that the Executive
shall properly and promptly account for such expenses in accordance
with the Company’s policies and procedures. The parties
agree that for purposes of this paragraph, the Executive’s
air travel shall be coach class domestically and business class
internationally (excluding Canada).
8.
Other
Activities . The Executive shall
devote substantially all of his working time and efforts during the
Company’s normal business hours to the business and affairs
of the Company and its subsidiaries and to the diligent and
faithful performance of the duties and responsibilities duly
assigned to him pursuant to this Agreement, except for vacations,
holidays and sickness. The Executive may, however, devote a
reasonable amount of his time to civic, community, or charitable
activities and, with the prior written approval of the Senior
Management to serve as a director of other corporations and to
other types of business or public activities not expressly
mentioned in this paragraph.
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9.
Termination
Benefits . The Executive shall
be entitled to receive severance and other benefits upon a
termination of employment as follows:
(a)
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