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                                                                    EXHIBIT 10.1



                              EMPLOYMENT AGREEMENT


        EMPLOYMENT AGREEMENT (this "Agreement"), effective as of November 3,
2000 (the "Effective Date"), between JAMES J. MCNAMARA ("Executive") and
NATIONAL AUTO CREDIT, INC., a Delaware corporation ("Employer").

        In consideration of the premises and the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.      EMPLOYMENT OF EXECUTIVE

        Employer hereby agrees to employ Executive, and Executive hereby agrees
to be and remain in the employ of Employer, upon the terms and conditions
hereinafter set forth.

2.      EMPLOYMENT PERIOD; EMPLOYMENT YEAR

        2.1 EMPLOYMENT PERIOD. Subject to earlier termination as provided in
Section 5, the term of Executive's employment under this Agreement shall
commence as of the date hereof and shall continue until December 31, 2003 (the
"Initial Employment Period"). Unless either party gives notice of non-renewal at
least ninety (90) days prior to the expiration of the Initial Employment Period
or any extension thereof, the term of this Agreement shall be extended for an
additional one (1) year period beyond the end of the Initial Employment Period,
or the end of any extension thereof, as the case may be (the Initial Employment
Period and any extension thereof is hereafter referred to as the "Employment
Period").

        2.2 EMPLOYMENT YEAR. Each 12-month period ending on October 31 shall be
hereinafter considered an "Employment Year."

3.      DUTIES AND RESPONSIBILITIES; PLACE OF PERFORMANCE

        3.1 DUTIES AND RESPONSIBILITIES. During the Employment Period, Executive
shall have the titles of Chairman of the Board and Chief Executive Officer of
the Employer. Executive shall devote substantially all of his business time to
the Employer. Executive shall be responsible for the affairs of the Employer and
its subsidiaries in pursuit of the Employer's Business. Executive shall perform
such duties, consistent with his status as Chairman of the Board and Chief
Executive Officer of Employer, as he may be assigned from time to time by
Employer's Board of Directors (the "Board").

        3.2 PLACE OF PERFORMANCE. In connection with his employment during the
Employment Period, the Executive shall be based at the Employer's current
principal offices in Solon, Ohio or such other principal offices as may be
established in the future by the Board. Executive shall travel to such principal
office, as necessary, from his home and shall be reimbursed by Employer for all
expenses thereof. Employer shall maintain an office for the Executive in either
New York, New York or Palm Beach County, Florida.

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4.      COMPENSATION AND RELATED MATTERS

        4.1 BASE SALARY. Employer shall pay to Executive a base salary at the
rate of $500,000 per annum, subject to increase at the discretion of the Board
(the initial base salary, including any Board approved increase thereof, the
"Base Salary"), payable in advance in monthly increments.

        4.2 ANNUAL BONUS. Schedule A hereto sets forth certain performance
objectives (each a "Milestone") for the Employer to achieve during each
Employment Year during the Initial Employment Period. To the extent the relevant
Milestone for any Employment Year is achieved, Executive shall receive a cash
bonus based on a target of $250,000 per year (the "Target Bonus"). Executive's
bonus in any Employment Year may be increased above the Target Bonus if, in the
opinion of the Board, such increase is appropriate to reward Executive's
performance for such year (the Target Bonus, together with any increase, being
hereinafter referred to as the "Bonus"). Except as otherwise set forth in
Section 6 hereof, if any Milestone for the Employment Year in which the
Employment Period terminates has been achieved prior to such termination,
Executive shall be entitled to receive the full amount of the Target Bonus.

        (a) Schedule A contains Milestones expressed in terms of the Stock Price
of Employer. As used herein, "Stock Price" shall mean the average of the closing
bid prices of the Common Stock ("Common Stock"), par value $.05 per share, of
Employer, as reported by the principal market where the Common Stock is then
traded, over the [10] trading days preceding October 31 in each Employment Year
(as adjusted for stock splits, stock dividends, reclassification or other
similar events). If, at the end of the particular Employment Year, the
Employer's Stock Price is equal to or exceeds one or more of the prices
specified, Executive shall be entitled to the percentage of the Target Bonus set
forth next to the highest such price achieved. Any Bonus earned as a result of
achieving the Stock Price target shall be paid to Executive within three
business days of the end of the Employment Year in which the Milestone is
achieved.

        (b) Achievement of multiple Milestones in any Employment Year shall not
entitle Executive to more than 100% of the Target Bonus for such Employment
Year, unless the Board increases the Bonus with respect to such Employment Year.
The maximum aggregate Target Bonus during the Initial Employment Period shall be
three (3) times the Target Bonus, unless the Board increases the Bonus with
respect to one or more Employment Years.

        (c) In the event of a Change in Control (as defined below) of Employer,
Executive shall be immediately entitled to the full amount of the Target Bonus
with respect to any Employment Years remaining in the Employment Period. As used
in this Agreement, the term "Change in Control" means (i) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Employer; (ii)
any sale, lease exchange or other transfer (in one transaction or a series of
related transactions) of shares of capital stock of the Employer such that any
person or group (other than the holders generally of the Employer's capital
stock immediately prior to such transaction or series of transactions) shall



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become the owner, directly or indirectly, beneficially or of record, of shares
representing more than thirty-three percent (33%) of the aggregate ordinary
voting power represented by the issued and outstanding voting securities of the
Employer; or (iii) any merger, consolidation, recapitalization, acquisition or
similar transaction (other than any such transaction involving only the Employer
and/or one or more wholly owned subsidiaries of the Employer) in which the
outstanding voting securities of the Employer are converted into or exchanged
for cash, securities or other property, such that immediately after such
transaction any person or group (other than the holders generally of such
capital stock immediately prior to such transaction or series of transactions)
shall become the owner, directly or indirectly , beneficially or of record, of
shares representing more than twenty percent (20%) of the aggregate ordinary
voting power represented by the issued and outstanding voting securities of the
Employer.

        4.3 SIGNING BONUS AND COMPENSATION FOR PAST SERVICES; BONUS FOR STOCK
LISTING. Within 10 days of the execution of this Agreement, Employer shall pay
to Executive a lump-sum payment of $750,000 as a signing bonus and as
compensation for services previously performed by Executive for the Employer.
Executive shall also receive a $1,000,000 cash bonus immediately upon the
Employer's Common Stock being listed on the NASDAQ Stock Market, the American
Stock Exchange or the New York Stock Exchange; PROVIDED, HOWEVER, that such
listing shall have occurred during the Initial Employment Period and that
Executive's employment hereunder shall not have been terminated for "Cause" (as
defined in Section 5.2 below) prior to the date of such listing.

        4.4 LIFE INSURANCE. Employer shall maintain in effect at all times
during the Employment Period, at Employer's expense, a policy of split dollar
life insurance on the life of Executive with a death benefit equal to three (3)
times the Base Salary, naming such person as Executive shall designate from time
to time as the owner and beneficiary thereof; PROVIDED, HOWEVER, that the
premium for such life insurance shall not exceed $50,000 per year.

        4.5 AUTOMOBILE ALLOWANCE. Employer shall provide Executive with a
monthly allowance during the Employment Period of $1,250 to cover the costs of a
leased automobile, including maintenance, fuel, and insurance.

        4.6 OTHER BENEFITS. During the Employment Period, subject to, and to the
extent Executive is eligible under their respective terms, Executive shall be
entitled to receive such fringe benefits as are, or are from time to time
hereafter generally provided by Employer to Employer's senior management
employees or other employees (other than those provided under or pursuant to
separately negotiated individual employment agreements or arrangements) under
any pension or retirement plan, disability plan or insurance, group life
insurance, medical and dental insurance, accidental death and dismemberment
insurance, travel accident insurance or other similar plan or program of
Employer. Employer shall provide short-term and long-term disability insurance
for Executive which provides benefits equal to at least 60% of Base Salary. To
the degree that Employer's medical insurance does not fully cover the cost of an
annual physical examination for Executive, Employer shall reimburse Executive
for such expense promptly after such expense is incurred. Executive's Base
Salary shall (where applicable)


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constitute the compensation on the basis of which the amount of Executive's
benefits under any such plan or program shall be fixed and determined.

        4.7 EXPENSE REIMBURSEMENT. Employer shall reimburse Executive for all
business expenses reasonably incurred by him in the performance of his duties
under this Agreement upon his presentation of signed, itemized accounts of such
expenditures, all in accordance with Employer's procedures and policies as
adopted and in effect from time to time and applicable to its senior management
employees.

        4.8 VACATIONS. Executive shall be entitled to 20 days paid vacation for
each Employment Year during the Employment Period, in accordance with the
Employer's vacation policy as in effect from time to time. The Executive shall
also be entitled to paid holidays and personal days in accordance with the
Employer's practice with respect to same as in effect from time to time. In
addition, the Executive shall be entitled to take up to six weeks leave without
salary during the Initial Employment Period and two additional weeks for each
Employment Year the Employment Period is extended.

        4.9 EQUITY INCENTIVES. In order to provide further incentive to
Executive and align the interests of Executive with those of the stockholders of
Employer, Employer shall grant to Executive equity incentives consisting of
shares of Common Stock and options to purchase shares of Common Stock
("Options").

        (a) SHARE GRANT. As a signing bonus, Executive shall be granted 350,000
shares of Common Stock. The Executive has previously been granted options to
purchase 175,000 shares of Common Stock, which he has agreed to surrender to the
Employer, prior to or concurrently with the issuance of the shares constituting
his signing bonus.

        (b) OPTION AWARDS. As of the date that this Agreement is approved by the
Board and executed by the Executive, Employer shall grant to Executive Options
to purchase 750,000 shares of Common Stock with an exercise price equal to the
average of the closing bid prices of the Common Stock on the OTC Electronic
Bulletin Board for the five trading days preceding December 16, 2000. All
Options granted pursuant to this paragraph shall:

            (i) be subject to an option agreement containing terms substantially
similar to the terms generally provided in the option agreements of the
Employer's other senior managers (except as otherwise modified herein);

            (ii) have a term of 10 years from the date of grant;

            (iii) shall be fully vest and be exerciseable as follows:

                  a.   Options with respect to 250,000 shares shall vest and
                       be exerciseable immediately;

                  b.   Options with respect to 250,000 shares shall vest and
                       be exerciseable on and after December 15, 2001; and


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                  c.   Options with respect to 250,000 shares shall vest and
                       be exerciseable on and after December 15, 2002;

                  PROVIDED, HOWEVER, that upon a Change of Control, all Options
                  that have not yet vested and become exerciseable shall be
                  deemed to have vested and have become exerciseable as of the
                  time immediately preceding such Change of Control;

            (iv) shall provide for cashless exercise of such Options;

            (v) be issued under a qualified omnibus long-term incentive plan (a
"Plan") that will provide for Incentive Stock Options pursuant to Internal
Revenue Code ("Code") Section 422, non-qualified stock options and other forms
of long-term incentives. If the Employer does not have a Plan applicable to the
Executive or if an existing Plan does not provide for the foregoing terms or if
sufficient shares are not available for grant under an existing Plan, Employer
undertakes to implement a Plan to provide for the issuance of Executive's
Options. Failure of the Employer to implement such a Plan shall not prevent
Executive's right to receive his Options and he may elect, in his sole
discretion, to receive Options not subject to a Plan.

        (c) From time to time, the Board may, in its discretion, grant
additional Options to Executive, on such terms as the Board determines.

5.      TERMINATION OF EMPLOYMENT PERIOD

        5.1 TERMINATION WITHOUT CAUSE; VOLUNTARY TERMINATION BY EXECUTIVE.
Employer may, by notice to Executive at any time during the Employment Period,
terminate the Employment Period without Cause (as defined below). Executive may,
by notice to Employer at any time during the Employment Period, voluntarily
resign from the Employer and terminate the Employment Period. A termination
under this section shall be effective immediately.

        5.2 BY EMPLOYER FOR CAUSE. Employer may, at any time during the
Employment Period, by notice to Executive, terminate the Employment Period for
"Cause" (as defined below) effective immediately, except as otherwise provided
below. The notice shall set forth in reasonable detail the basis for such
termination. In the event that it is possible for the Executive to cure or
correct the circumstances set forth in the notice, the termination shall not be
effective until the date that is thirty (30) days following the date on which
such notice is given and the circumstances set forth in the notice shall not
constitute "Cause" if within 30 days of such notice, Executive cures or corrects
such circumstances. The Employer shall have "Cause" to terminate the Executive's
employment hereunder upon the Executive's:

        (a) fraud, embezzlement, or any other illegal act committed
intentionally by the Executive in connection with the Executive's duties as an
executive of the Employer or


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any subsidiary or affiliate of the Employer which causes or may reasonably be
expected to cause substantial economic injury to the Employer or any subsidiary
or affiliate of the Employer,

        (b) conviction of any felony which causes or may reasonably be expected
to cause substantial economic injury to the Employer or any subsidiary or
affiliate of the Employer, or

        (c) willful or grossly negligent commission of any other act or failure
to act which causes or may reasonably be expected (as of the time of such
occurrence) to cause substantial economic injury to or substantial injury to the
reputation of the Employer or any subsidiary or affiliate of the Employer,
including, without limitation, any material violation of the Foreign Corrupt
Practices Act, as described herein below. An act or failure to act on the part
of Executive shall be considered "willful" if done, or omitted to be done, by
Executive in bad faith or without a reasonable belief that the act or omission
was in the best interest of Employer.

        5.3 BY EXECUTIVE FOR GOOD REASON. Executive may, at any time during the
Employment Period by notice to Employer, terminate the Employment Period under
this Agreement for "Good Reason" (as defined below) effective immediately. For
the purposes hereof, "Good Reason" means any of the following without
Executive's consent: (A) subject to Section 3 above, a material and adverse
change in the nature and scope of Executive's authority and duties from those
exercised or performed by Executive immediately after the Effective Date; (B) a
material breach of this Agreement by Employer (including, but not limited to,
failure to pay any amount due to Executive when due, diminution of Executive's
duties and responsibilities or a change in Executive's place of performance);
PROVIDED, HOWEVER, that the circumstances set forth in this Section 5.3(A) and
(B) will not be Good Reason if within 30 days of notice by the Executive to the
Employer, Employer cures such circumstances.

        5.4 DISABILITY. During the Employment Period, if, as a result of
physical or mental incapacity or infirmity, Executive shall be unable to perform
his duties under this Agreement for (i) a continuous period of at least 120
days, or (ii) periods aggregating at least 180 days during any period of 12
consecutive months (each a "Disability Period"), and at the end of the
Disability Period there is no reasonable probability that Executive can promptly
resume his duties hereunder, Executive shall be deemed disabled (the
"Disability") and Employer, by notice to Executive, shall have the right to
terminate the Employment Period for Disability at, as of or after the end of the
Disability Period. The existence of the Disability shall be determined by a
reputable, licensed physician. The parties shall attempt to agree on such a
physician. In the event that the parties are unable to so agree, such physician
shall be selected by an arbitrator provided by the American Arbitration
Association in New York, New York. Executive shall cooperate in all reasonable
respects to enable an examination to be made by such physician.

        5.5 DEATH. The Employment Period shall end on the date of Executive's
death.

6.      TERMINATION COMPENSATION


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        6.1 TERMINATION WITHOUT CAUSE BY EMPLOYER OR FOR GOOD REASON BY
EXECUTIVE. If the Employment Period is terminated by Employer without Cause or
by Executive for Good Reason, Employer will pay to Executive one dollar ($1)
less than the amount that would constitute a "excess parachute payment" under
Code Section 280G. Employer shall pay to the Executive such amount in a lump sum
cash payment as soon as practicable following the effective date of such
termination. Employer shall also continue to provide the Executive with all
employee benefits and perquisites which he was participating in or receiving at
the effective date of termination (or if greater, at the end of the prior year)
for two years. If such benefits cannot be provided under the Employer's
programs, such benefits and perquisites will be provided on a tax effective
basis on an individual basis to the Executive.

        6.2 TERMINATION BY REASON OF DEATH. . If the Employment Period is
terminated by death, pursuant to the provisions of Section 5.5, Employer shall
pay to Executive's estate, within thirty (30) days of the effective date of
termination, Executive's Base Salary through the date of termination plus
Executive's Base Salary for an additional ninety (90) days.

        6.3 CERTAIN OTHER TERMINATIONS. If the Employment Period is terminated
by Employer pursuant to the provisions of Sections 5.2 or 5.4, Employer shall
pay to Executive, within thirty (30) days of the effective date of termination,
Executive's Base Salary through the date of termination. If the date of
termination occurs after a Milestone has been achieved, Employer shall also pay
to Executive, when due pursuant to provisions of Section 4.2 hereof, the Bonus
for such Employment Year. Employer shall have no obligation to continue any
other benefits provided for in Section 4 past the date of termination.

        6.4 NO OTHER TERMINATION COMPENSATION. Executive shall not, except as
set forth in this Section 6, be entitled to any compensation following
termination of the Employment Period.

        6.5 MITIGATION OF DAMAGES. In the event of any termination of the
Executive's employment by the Employer, the Executive shall not be required to
seek other employment to mitigate damages, and any income earned by the
Executive from other employment or self-employment shall not be offset against
any obligations of the company to the Executive under this Agreement. The
Employer's obligations hereunder and the Executive's rights to payment shall not
be subject to any right of set-off, counterclaim or other deduction by the
Employer not in the nature of customary withholding, other than in any judicial
proceeding or arbitration.

7.      PARACHUTE PAYMENTS

        (a) If it is determined (as hereafter provided) that by reason of any
payment or Option vesting occurring pursuant to the terms of this Agreement (or
otherwise under any other agreement, plan or program) upon a Change in Control
(collectively, a "Payment"), the Executive would be subject to the excise tax
imposed by Code Section 4999 (the "Parachute Tax"), then the Executive shall be
entitled to receive an additional


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payment or payments (a "Gross-Up Payment") in an amount such that, after payment
by the Executive of all taxes (including any Parachute Tax) imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Parachute Tax imposed upon the Payment.

        (b) Subject to the provisions of Section 7(a) hereof, all determinations
required to be made under this Section 7, including whether a Parachute Tax is
payable by the Executive and the amount of such Parachute Tax and whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by the nationally recognized firm of certified public accountants (the
"Accounting Firm") used by the Employer prior to the Change in Control (or, if
such Accounting Firm declines to serve, the Accounting Firms hall be a
nationally recognized firm of certified public accountants selected by the
Executive). The Accounting Firm shall be directed by the Employer or the
Executive to submit its preliminary determination and detailed supporting
calculations to both the Employer and the Executive within 15 calendar days
after the determination date, if applicable, and any other such time or times as
may be requested by the Employer or the Executive. If the Accounting Firm
determines that any Parachute Tax is payable by the Executive, the Employer
shall pay the required Gross-Up Payment to, or for the benefit of, the Executive
within five business days after receipt of such determination and calculations.
If the Accounting Firm determines that no Parachute Tax is payable by the
Executive, it shall, at the same time as it makes such determination, furnish
the Executive with an opinion that he has substantial authority not to report
any Parachute Tax on his federal tax return. Any good faith determination by the
Accounting Firm as to the amount of the Gross-Up Payment shall be binding upon
the Employer and the Executive absent a contrary determination by the Internal
Revenue Service or a court of competent jurisdiction; provided, however, that no
such determination shall eliminate or reduce the Employer's obligation to
provide any Gross-Up Payments that shall be due as a result of such contrary
determination. As a result of the uncertainty in the application of Code Section
4999 at the time of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments that will not have been made by the Employer
should have been made (an "Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Employer exhausts or fails
to pursue its remedies pursuant to Section 7(f) hereof and the Executive
thereafter is required to make a payment of any Parachute Tax, the Executive
shall direct the Accounting Firm to determine the amount of the Underpayment
that has occurred and to submit its determination and detailed supporting
calculations to both the Employer and the Executive as promptly as possible. Any
such Underpayment shall be promptly paid by the Employer to, or for the benefit
of, the Executive within five business days after receipt of such determination
and calculations.

        (c) The Employer and the Executive shall provide the Accounting Firm
access to and copies of any books, records and documents in the possession of
the Employer or the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determination contemplated by Section
7(b) hereof.


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        (d) The federal tax returns filed by the Executive (or any filing made
by a consolidated tax group which includes the Employer) shall be prepared and
filed on a basis consistent with the determination of the Accounting Firm with
respect to the Parachute Tax payable by the Executive. The Executive shall make
proper payment of the amount of any Parachute Tax, and at the request of the
Employer, provide to the Employer true and correct copies (with any amendments)
of his federal income tax return as filed with the Internal Revenue Service, and
such other documents reasonably requested by the Employer, evidencing such
payment. If prior to the filing of the Executive's federal income tax return,
the Accounting Firm determines in good faith that the amount of the Gross-Up
Payment should be reduced, the Executive shall within five business days pay to
the Employer the amount of such reduction.

        (e) The fees and expenses of the Accounting Firm for its services in
connection with the determination and calculations contemplated by Sections 7(b)
and (d) hereof shall be borne by the Employer. If such fees and expenses are
initially advanced by the Executive, the Employer shall reimburse the Executive
the full amount of such fees and expenses within five business days after
receipt from the Executive of a statement therefor and reasonable evidence of
his payment thereof.

        (f) In the event that the Internal Revenue Service claims that any
payment or benefit received under this Agreement constitutes an "excess
parachute payment" within the meaning of Code Section 280G(b)(1), the Executive
shall notify the Employer in writing of such claim. Such notification shall be
given as soon as practicable but not later than 10 business days after the
Executive is informed in writing of such claim and shall apprise the Employer of
the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the 30
day period following the date on which the Executive gives such notice to the
Employer (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Employer notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall (i) give the Employer any information reasonably
requested by the Employer relating to such claim; (ii) take such action in
connection with contesting such claim as the Employer shall reasonably request
in writing from time to time, including without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Employer and reasonably satisfactory to the Executive; (iii) cooperate with
the Employer in good faith in order to effectively contest such claim; and (iv)
permit the Employer to participate in any proceedings relating to such claim;
PROVIDED, HOWEVER, that the Employer shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for and against for any Parachute Tax or income tax or other
tax (including interest and penalties with respect thereto) imposed as a result
of such representation and payment of costs and expenses.

        (g) The Employer shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any and all
administrative


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appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Employer shall
determine; PROVIDED, HOWEVER, that if the Employer directs the Executive to pay
such claim and sue for a refund, the Employer shall advance the amount of such
payment to the Executive on an interest-free basis, and shall indemnify and hold
the Executive harmless, on an after tax basis, from any Parachute Tax (or other
tax, including interest and penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and PROVIDED, FURTHER, that if the Executive is required to extend the
statute of limitations to enable the Employer to contest such claim, the
Executive may limit this extension solely to such contested amount. The
Employer's control of the contest shall be limited to issues with respect to
which a corporate deduction would be disallowed pursuant to Code Section 280G
and the Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority. In addition, no position may be taken nor any final resolution be
agreed to by the Employer without the Executive's consent if such position or
resolution could reasonably be expected to adversely affect the Executive
unrelated to matters covered hereto.

        (h) If, after the receipt by Executive of an amount advanced by the
Employer in connection with the contest of the Parachute Tax claim, the
Executive receives any refund with respect to such claim, the Executive shall
promptly pay to the Employer the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto); PROVIDED,
HOWEVER, if the amount of that refund exceeds the amount advanced by the
Employer, the Executive may retain such excess. If, after the receipt by the
Executive of an amount advanced by the Employer in connection with a Parachute
Tax claim, a determination is made that the Executive shall not be entitled to
any refund with respect to such claim and the Employer does not notify the
Executive in writing of its intent to contest the denial of such refund prior to
the expiration of 30 days after such determination, such advance shall be deemed
to be in consideration for services rendered after the Date of Termination.

8.      PROFESSIONAL LIABILITY INSURANCE; INDEMNIFICATION

        8.1 INSURANCE. The Employer will provide coverage for Executive under
the Employer's director and officer professional liability insurance policy.

        8.2 INDEMNIFICATION. Employer shall indemnify the Executive to the
fullest extent permitted by law in effect as of the date hereof, or as hereafter
amended, against all costs, expenses, liabilities and losses (including, without
limitation, attorneys' fees, judgments, fines, penalties, ERISA excise taxes,
penalties and amounts paid in settlement) reasonably incurred by the Executive
in connection with a Proceeding. For the purposes of this section, a
"Proceeding" shall mean any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which the Executive is made,


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or is threatened to be made, a party to, or a witness in, such action, suit or
proceeding by reason of the fact that he is or was an officer, director or
employee of the Employer or is or was serving as an officer, director, member,
employee, trustee or agent of any other entity at the request of the Employer.

        (a) NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt by the
Executive of notice of the commencement of any Proceeding, the Executive will,
if a claim in respect thereof is to be made against the Employer under this
Agreement, notify the Employer in writing of the commencement thereof; but the
omission to so notify the Employer will not relieve the Employer from any
liability that it may have to the Executive otherwise than under this Agreement.
Notwithstanding any other provision of this Agreement, with respect to any such
Proceeding as to which the Executive gives notice to the Employer of the
commencement thereof:

            (i) The Employer will be entitled to participate therein at its own
expense; and

            (ii) Except as otherwise provided in this Section 8.2(a)(ii) to the
extent that it may wish, the Employer, jointly with any other indemnifying party
similarly notified, shall be entitled to assume the defense thereof, with
counsel satisfactory to the Executive. After notice from the Employer to the
Executive of its election to so assume the defense thereof, the Employer shall
not be liable to the Executive under this Agreement for any legal or other
expenses subsequently incurred by the Executive in connection with the defense
thereof other than reasonable costs of investigation or as otherwise provided
below. The Executive shall have the right to employ the Executive's own counsel
in such Proceeding, but the fees and expenses of such counsel incurred after
notice from the Employer of its assumption of the defense thereof shall be at
the expense of the Executive unless (a) the employment of counsel by the
Executive has been authorized by the Employer, (b) the Executive shall have
reasonably concluded that there may be a conflict of interest between the
Employer and the Executive in the conduct of the defense of such Proceeding
(which conclusion shall be deemed reasonable if, without limitation, such action
shall seek any remedy other than money damages and the Executive would be
personally affected by such remedy or the carrying out thereof), or (c) the
Employer shall not in fact have employed counsel to assume the defense of the
Proceeding, in each of which cases the fees and expenses of counsel shall be at
the expense of the Employer. The Employer shall not be entitled to assume the
defense of any Proceeding brought against the Executive by or on behalf of the
Employer or as to which the Executive shall have reached the conclusion provided
for in clause (b) above.

9.      CONFIDENTIALITY

        Unless otherwise required by law or judicial process, Executive shall
retain in confidence during the Employment Period and after termination of
Executive's employment with Employer pursuant to this Agreement all confidential
information known to the Executive concerning Employer and its businesses. The
obligations of


                                      -11-
<PAGE>   12


Executive pursuant to this Section 9 shall survive the expiration or termination
of this Agreement.

10.     NONCOMPETITION.

        10.1 GENERAL. For the duration of the Employment Period and the
applicable Non-Compete Period (as defined below), the Executive shall not
directly or indirectly, engage in any Competitive Activity (as defined below) in
competition with the Employer. "Competitive Activity" shall mean: (A) the
development, providing, marketing, administration, management, or acting as a
consultant in the providing of, the principal operating business(es) of the
Employer at the time of termination, (B) the participation, directly or
indirectly, in any business which is the same as or substantially similar to or
is or would be competitive with the sub-prime auto finance business of the
Employer at the time; and (C) becoming an employee, director, officer,
consultant, independent contractor, lecturer or advisor of or to, or otherwise
providing services to, any business, individual, partnership, firm, association
or corporation, if the Executive's duties relate in any manner to the business
of developing, providing, marketing, administering, managing, or acting as a
consultant in the providing of, the principal operating business(es) of the
Employer at the time of termination. Nothing herein, however, shall prohibit
Executive from acquiring or holding any issue of stock or securities of any
business, individual, partnership, firm, or corporation (collectively "Entity")
which has any securities listed on a national securities exchange or quoted in
the daily listing of over-the-counter market securities, provided that at any
one time he and members of his immediate family do not own more than five
percent of the voting securities of any such Entity. The obligations of
Executive pursuant to this Section 10 shall survive the expiration or
termination of this Agreement.

        10.2 NON-COMPETE PERIOD. Upon termination of Executive's employment
hereunder, the prohibition against Executive engaging in a Competitive Activity
shall remain in effect for the following periods (each a "Non-Compete Period").

        (a) TERMINATION WITHOUT CAUSE BY EMPLOYER OR FOR GOOD REASON BY
EXECUTIVE. If the Employment Period is terminated by Employer without Cause or
by Executive for Good Reason, provided that all payments due to Executive from
Employer have been made to Executive by Employer, the Non-Compete Period shall
be six (6) months from the effective date of termination.

        (b) TERMINATION FOR CAUSE BY EMPLOYER OR WITHOUT GOOD REASON BY
EXECUTIVE. If the Employment Period is terminated by Employer for Cause or by
Executive without Good Reason, the Non-Compete Period shall be one year from the
effective date of termination.

        (c) NON-RENEWAL. If the Employment Period ends as a result of the
non-renewal of the Agreement by either party, the Non-Compete Period shall be
six (6) months from the last day of the Employment Period.


                                      -12-
<PAGE>   13


11.     NONSOLICITATION.

        During the Non-Compete Period, Executive shall not directly or
indirectly solicit to enter into the employ of any other Entity, or hire, any of
the employees of the Employer (or individuals who were employees of the Employer
within six months of termination of the Non-Compete Period). During the
Non-Compete Period, Executive shall not, directly or indirectly, solicit, hire
or take away or attempt to solicit, hire or take away (i) any customer or client
of the Employer or (ii) any former customer or client (that is, any customer or
client who ceased to do business with the Employer during the one (1) year
immediately preceding such date) of the Employer or encourage any customer or
client of the Employer to terminate its relationship with the Employer without
the Employer's prior written consent. The obligations of Executive pursuant to
this Section 11 shall survive the expiration or termination of this Agreement.

12.     NON-DISPARAGEMENT OF THE EXECUTIVE

        The Employer shall not make any oral or written statement about the
Executive which is intended or reasonably likely to disparage the Executive or
otherwise degrade his reputation in the business or legal community.

13.     FOREIGN CORRUPT PRACTICES ACT

        The Executive agrees to comply in all material respects with the
applicable provisions of the U.S. Foreign Corrupt Practices Act of 1977
("FCPA"), as amended, which provides generally that: under no circumstances will
foreign officials, representatives, political parties or holders or public
offices be offered, promised or paid any money, remuneration, things of value,
or provided any other benefit, direct or indirect, in connection with obtaining
or maintaining contracts or others hereunder. When any representative, employee,
agent, or other individual or organization associated with the Executive is
required to perform any obligation related to or in connection with this
Agreement, the substance of this section shall be imposed upon such person and
included in any agreement between the Executive and any such person. Failure by
the Executive to comply in all material respects with the provisions of the FCPA
(other than an inadvertent violation on the basis of advice from counsel to the
Employer that the conduct in question is not a violation) shall constitute a
material breach of this Agreement and shall entitle the Employer to terminate
the Executive's employment for Cause.

14.     SUCCESSORS; BINDING AGREEMENT

        This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by Executive and Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee, or other beneficiary or, if there be
no such beneficiary, to Executive's estate.


                                      -13-
<PAGE>   14


15.     SURVIVORSHIP

        The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.

16.     MISCELLANEOUS

        16.1 NOTICES. Any notice, consent or authorization required or permitted
to be given pursuant to this Agreement shall be in writing and sent to the party
for or to whom intended, at the address of such party set forth below, by
registered or certified mail, postage paid (deemed given five days after deposit
in the U.S. mails) or personally or by facsimile transmission (deemed given upon
receipt), or at such other address as either party shall designate by notice
given to the other in the manner provided herein.

             If to Employer:

                                National Auto Credit, Inc.
                                30000 Aurora Road
                                Solon, Ohio 44139
                                Attention:  General Counsel
                                Facsimile:  (440) 349-3141


             If to Executive:

                                James J. McNamara
                                127 Kings Road
                                Palm Beach. FL 33480
                                Facsimile:  (561) 659-1438


        16.2 TAXES. Employer is authorized to withhold (from any compensation or
benefits payable hereunder to Executive) such amounts for income tax, social
security, unemployment compensation and other taxes as shall be necessary or
appropriate in the reasonable judgment of Employer to comply with applicable
laws and regulations.

        16.3 INVENTIONS; WORK FOR HIRE. Executive hereby agrees to assign and
does hereby assign all of Executive's right, title and interest in or to any and
all ideas, concepts, know-how, techniques, processes, inventions, discoveries,
developments, works of authorship, innovations and improvements (collectively
"Inventions") conceived or made by Executive, whether alone or in concert with
others whether patentable or subject to potential copyrights or not, except
those that the Executive developed or develops entirely on Executive's own time
without using the equipment, supplies, facilities, or confidential or
proprietary information of the Employer and provided that such Inventions are
unrelated to the business of the Employer. Executive agrees to promptly inform
and disclose all Inventions to the Employer in writing and with respect to those
Inventions that Executive is required to


                                      -14-
<PAGE>   15


assign to the Employer hereunder to provide all assistance reasonably requested
by the Employer in the preservation of its interests in the Inventions (such as
by executing documents, testifying, etc.), such assistance to be provided at the
Employer's expense but without additional compensation to the Executive.
Executive agrees that any work prepared by the Executive during the Employment
Period which work is subject to assignment under this paragraph and which is
eligible for United States copyright protection or protection under the
Universal Copyright Convention the Berne Copyright Convention and/or the Buenos
Aires Copyright Convention, shall be a "work made for hire". In the event that
any such work is deemed not to be a "work made for hire". Executive hereby
assigns all right, title and interest in and to the copyright in such work to
the Employer, and agrees to provide all assistance reasonably requested in the
establishment, preservation and enforcement of the Employer's copyright in such
work, such assistance to be provided at the Employer's expense but without any
additional compensation to Executive.

        16.4 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
reference to the principles of conflicts of laws therein.

        16.5 DISPUTE RESOLUTION AND ARBITRATION. In the event that any dispute
arises between the Employer and the Executive regarding or relating to this
Agreement and/or any aspect of the Executive's employment relationship with the
Employer, AND IN LIEU OF LITIGATION AND A TRIAL BY JURY, the parties consent to
resolve such dispute through mandatory arbitration under the Commercial Rules of
the American Arbitration Association, before a single arbitrator in New York,
New York. The parties hereby consent to the entry of judgment upon award
rendered by the arbitrator in any court of competent jurisdiction.
Notwithstanding the foregoing, however, should adequate grounds exist for
seeking immediate injunctive or immediate equitable relief, any party may seek
and obtain such relief; provided that, upon obtaining such relief, such
injunctive or equitable action shall be stayed pending the resolution of the
arbitration proceedings called for herein. The parties hereby consent to the
exclusive jurisdiction in the state and Federal courts located in the City of
New York, County of New York and State of New York for purposes of seeking such
injunctive or equitable relief as set forth above. Each side shall bear its own
costs; however any fees assessed by the American Arbitration Association shall
be allocated by the arbitrator in his/her sole discretion.

        16.6 HEADINGS. All descriptive headings in this Agreement are inserted
for convenience only and shall be disregarded in construing or applying any
provision of this Agreement.

        16.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.


                                      -15-
<PAGE>   16


        16.8 SEVERABILITY. If any provision of this Agreement, or any part
thereof, is held to be unenforceable, the remainder of such provision and this
Agreement, as the case may be, shall nevertheless remain in full force and
effect.

        16.9 ENTIRE AGREEMENT AND REPRESENTATION. This Agreement contains the
entire agreement and understanding between Employer and Executive with respect
to the subject matter hereof. No representations or warranties of any kind or
nature relating to Employer or its several businesses, or relating to Employer's
assets, liabilities, operations, future plans or prospects have been made by or
on behalf of Employer to Executive. This Agreement supersedes any prior
agreement between the parties relating to the subject matter hereof.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the 15 day of December, 2000 and as of the date first above written.



                                       NATIONAL AUTO CREDIT, INC.


                                       By:
                                          --------------------------------------
                                              Name:
                                              Title:



                                       -----------------------------------------
                                                   James J. McNamara



                                      -16-
<PAGE>   17



                                   SCHEDULE A

                             PERFORMANCE MILESTONES



        YEAR 1 BONUS                YEAR 2 BONUS               YEAR 3 BONUS
        ------------                ------------               ------------
  STOCK PRICE    % EARNED     STOCK PRICE    % EARNED    STOCK PRICE    % EARNED
  -----------    --------     -----------    --------    -----------    --------

     $0.75          25%          $1.50          25%         $2.40          25%

     $1.00          50%          $1.85          50%         $2.75          50%

     $1.25         100%          $2.15         100%         $3.15         100%


NOTE: In the absence of an agreement with respect to any extension of the
Initial Employment Period, or any extension of an earlier extension, the Target
Bonus for each year shall be $300,000, which shall be earned as follows:

      -     25% Earned if the Stock Price at the end of the Employment Year is
            110% of the Stock Price at the end of the prior Employment Year.

      -     50% Earned if the Stock Price at the end of the Employment Year is
            120% of the Stock Price at the end of the prior Employment Year.

      -     100% Earned if the Stock Price at the end of the Employment Year is
            130% of the Stock Price at the end of the prior Employment Year.



                                      -17-