Chief Financial Officer Employment Agreement

Exhibit 10.6






EMPLOYMENT AGREEMENT







THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into effective as of the 29 th day of August, 2002, by and between CompuCredit Corporation , a Georgia corporation ("CompuCredit"), and J.Paul Whitehead III , an individual resident of the State of Georgia ("Employee").







W I T N E S S E T H :





WHEREAS, in consideration of, among other things, CompuCredit92s hiring and appointing Employee to the position of Chief Financial Officer, Employee has agreed to devote his full working time to the business efforts of CompuCredit; and



WHEREAS, the parties hereto desire to set forth in this Agreement the terms and conditions of Employee92s employment with CompuCredit;



NOW, THEREFORE, for and in consideration of the Employee92s employment with CompuCredit and the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CompuCredit and Employee hereby agree as follows:



1. Relationship Established . Upon the terms and subject to the conditions of this Agreement, CompuCredit hereby employs Employee to serve as the Chief Financial Officer of CompuCredit, and, as such, Employee shall direct and manage the financial affairs of CompuCredit and shall have such other executive level powers and duties as shall be otherwise conferred on him by CompuCredit92s Board of Directors or Chief Executive Officer consistent with those generally associated with that position (collectively, the "Services"). Employee shall perform the Services at the direction of CompuCredit92s Chief Executive Officer. Employee hereby agrees to devote 100% of his business time, attention, energy and skill exclusively to performing his obligations and duties hereunder and to engage in no business activities other than the performance of his obligations and duties hereunder, except for those specific activities as the Chief Executive Officer or Board of Directors of CompuCredit shall approve in advance in writing; provided, however, that nothing herein contained shall restrict or prevent Employee from personally and for his own account owning and dealing in stocks, bonds, securities, real estate, commodities, or other investment properties for his own benefit or the benefit of his family. Further, nothing herein contained shall restrict or prevent Employee from serving on the Board of Directors of a non-profit entity or any entity that the Chief Executive Officer approves of in writing. Employee shall perform his obligations and duties hereunder diligently, faithfully and to the best of his abilities and, in doing so, shall comply with applicable CompuCredit policies and procedures. If there is any conflict between such policies and procedures and this Agreement, this Agreement shall control.






2. Term; Termination .



2.1 Term of Employment . The term of Employee92s employment under this Agreement shall commence on the 16 th day of October 2002 and shall continue for an initial term (the "Initial Term" ) of three (3) years from that date, unless sooner terminated in accordance with Section 2.2. Upon expiration of the Initial Term, Employee92s term of employment shall be automatically extended month by month upon the same terms and conditions contained herein until terminated in accordance with Section 2.2. The Initial Term and any additional period of time Employee is employed by CompuCredit thereafter shall be collectively referred to as the "Term."



2.2 Termination of Employment .





(a) This Agreement shall automatically and immediately terminate upon the death of Employee.



(b) Either party may terminate this Agreement upon the Complete Disability of Employee. "Complete Disability", as used herein, shall mean the inability of Employee by reason of any physical or mental impairment to perform fully and effectively, as determined in the reasonable judgment of a competent physician selected in good faith by CompuCredit, the Services on a full time basis for an aggregate of 90 days in any period of 180 consecutive days.





(c) In addition to any other rights or remedies available to CompuCredit, CompuCredit may, in its sole discretion, terminate Employee92s employment for Cause effective immediately upon delivery of written notice to Employee. In this Agreement, "Cause" means the reasonable, good faith determination of a majority of the members of CompuCredit92s Board of Directors that:



(i) (A) Employee has committed an act constituting fraud, deceit or intentional material misrepresentation with respect to CompuCredit or any client, customer or supplier of CompuCredit; (B) Employee has embezzled funds or assets from CompuCredit or any client or customer of CompuCredit; (C) Employee has engaged in willful misconduct or gross negligence in the performance of the Services; (D) Employee has failed to comply in a material way with any of the terms of Section 1 or Section 9 hereof;



(ii) Employee has breached or defaulted in the performance of any other material provision of this Agreement and has not cured such breach or default to CompuCredit92s reasonable satisfaction within thirty (30) days after receiving notice thereof; or



(iii) Employee92s conduct is materially detrimental to the reputation of CompuCredit which Employee has not cured (if such conduct is curable in





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Employer92s reasonable opinion) to CompuCredit92s reasonable satisfaction within ten (10) days after receiving notice thereof.





(d) In addition to any other rights or remedies available to Employee, Employee may, in its sole discretion, terminate Employee92s employment for Good Reason effective immediately upon delivery of written notice to CompuCredit. In this Agreement, "Good Reason" shall mean the occurrence of any one of the following events:



(i) The nature, extent and amount of coverage under CompuCredit92s Directors and Officers, Errors and Omissions insurance policy decreases to a level that is below what would be reasonable and customary (other than due to the actions of Employee), provided however, that such coverage shall not be below a minimum threshold of $25,000,000;



(ii) Employee92s status or role within CompuCredit is demoted in any of the following ways:



(A) Employee no longer maintains the title of Chief Financial Officer of CompuCredit;



(B) Employee retains the title of Chief Financial Officer but is not held out by CompuCredit either internally and/or externally as the principal or chief financial officer of CompuCredit responsible for the financial matters of CompuCredit;



(C) a material diminution in the scope and nature of Employee92s duties and responsibilities or the assignment of duties and responsibilities inconsistent with those generally associated with the chief financial officer position;



(D) Employee no longer reports directly to the Chief Executive Officer of CompuCredit; or



(E) a reduction by CompuCredit of Employee92s base annual salary, incentive compensation or a material reduction of Employee92s benefits (taken as a whole) as in effect immediately prior to such reduction.





(iii) CompuCredit92s requirement that Employee be based anywhere other than Metropolitan Atlanta, Georgia. CompuCredit shall be deemed to have required Employee to be based somewhere other than Metropolitan Atlanta, Georgia if the Employee is required to spend more than two days per week on a regular basis at a business location not within the Atlanta, Georgia metropolitan area.



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(iv) the failure of a successor of CompuCredit to assume in writing this Agreement contemporaneously to becoming a successor of CompuCredit; or



(v) CompuCredit has breached or defaulted in the performance of any material provision of this Agreement and has not cured such breach or default to Employee92s reasonable satisfaction within thirty (30) days after receiving notice thereof.



(e) The date on which Employee92s employment expires or terminates for any reason is referred to herein as the "Termination Date."



3. Compensation .



(a) During the Term, CompuCredit shall pay Employee as compensation for the Services an annual salary as set forth on Exhibit A hereto and incorporated herein by reference. Such compensation shall be payable in substantially equal semi-monthly installments or in such other installments or at such other intervals as may be the policy of CompuCredit from time to time, and shall be subject to such deductions and withholdings as are required by law or policies of CompuCredit in effect from time to time. Employee92s salary per annum may from time to time be increased but not decreased. CompuCredit shall review Employee92s compensation hereunder at least on an annual basis.



(b) CompuCredit shall pay Employee a bonus equal to fifty thousand dollars ($50,000) on January 1, 2003.



(c) On October 16, 2002, CompuCredit shall grant to Employee an option to purchase one-hundred-and-seventy-five thousand (175,000) shares of CompuCredit92s common stock under CompuCredit92s 2000 Stock Option Plan at a price equal to the fair market value of CompuCredit92s common stock on that date. Also, as bonus compensation pursuant to goals to be mutually established annually in advance between CompuCredit and Employee, CompuCredit may grant to Employee on each of the dates of October 15, 2003, 2004, and 2005, options, each of which will be to purchase up to fifteen thousand (15,000) shares of CompuCredit92s common stock under CompuCredit92s 2000 Stock Option Plan at a price equal to the fair market value of CompuCredit92s common stock on the effective date of each such option grant. Each such granted option shall vest in equal one-third (1/3) increments on each of the first three (3) anniversaries of its grant date provided that on each respective vesting date Employee is an employee of CompuCredit. Each option shall be evidenced by a written stock option agreement in CompuCredit92s customary form, and each option shall terminate on the 5 th anniversary of its issuance.



(d) Notwithstanding anything to the contrary herein, if this Agreement is terminated by CompuCredit for Cause, or terminates as a result of the death of Employee, CompuCredit shall be released of its obligation to pay further compensation or benefits to Employee as set forth in this Agreement; provided , however , that Employee shall be entitled to



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receive (i) any salary already earned under Section 3(a) above, and (ii) a portion of any previously agreed upon bonus (prorated based upon full months worked by Employee) for any fiscal year in which Employee worked for CompuCredit for at least six (6) months; and provided , further , that in the case of death, Employee92s estate shall have six (6) months to exercise any then vested stock options or similar rights.



(e) If this Agreement terminates as a result of the Complete Disability of Employee, CompuCre ...