Exhibit 10.7


 


EMPLOYMENT AGREEMENT


 


This
Employment Agreement (the “Agreement”) is made on or as of May 1, 2003 between AMERICA’S CAR-MART, INC., an Arkansas
corporation (the “Company”) and EDDIE
LEE HIGHT (the “Associate”).


 


W  I  T  N
E  S  S  E  T  H:


 


WHEREAS, the
Associate is a Senior Executive Officer of the Company, and the Company desires
to continue the employment of the Associate, and the Associate desires to
provide his services to the Company upon the terms and conditions hereinafter
set forth;


 


WHEREAS, the Company
periodically sells its finance receivables to Colonial Auto Finance, Inc., an
Arkansas corporation (“Colonial”) and services those loans on Colonial’s behalf
(collectively, the Company and Colonial are referred to herein as “Car-Mart”);
and


 


WHEREAS, America’s
Car-Mart, Inc., a Texas corporation formerly known as Crown Group, Inc. (the
“Parent Company”) owns 100% of the outstanding common stock of the Company;


 


NOW, THEREFORE, in
consideration of the mutual covenants and promises contained herein, the
parties hereto, each intending to be legally bound hereby, agree as follows:


 


1.                                       Employment.  The Company hereby employs the Associate as
a Senior Executive Officer of the Company, and the Associate accepts such
employment.  During the term of employment
under this Agreement (the “Employment Term”), the Associate shall perform such
duties as shall reasonably be required of a Senior Executive Officer of the
Company.  The Associate further agrees
to perform, without additional compensation, such other work for the Company
and for any subsidiary or affiliate of the Company in which the Company has an
interest, including, without limitation, Colonial and the Parent Company, as
the Board of Directors of the Company or the Parent Company shall from time to
time reasonably specify.  It is
expressly agreed and understood between the Company and the Associate that the
term of this Agreement is in no way dependent upon the Associate’s holding or
being elected to any office of the Company. 
The Associate may be deemed an employee of, and paid by the Company,
Colonial, or the Parent Company, as reasonably determined by the Company.


 


2.                                       Performance.  The Associate agrees to devote his entire
business efforts to the performance of his duties hereunder, provided, however,
that the Associate may engage in personal investment activities not involving
the Company so long as they do not interfere with the performance of his duties
hereunder.


 


3.                                       Term.  Unless otherwise terminated in accordance
with Sections 10, 11, 12 or 13, the Employment Term shall be for a term ending
April 30, 2006.  This Agreement shall be
automatically renewed for successive additional Employment Terms of one (1)
year each unless notice of termination is given in writing by either party to
the other party at least thirty (30) days prior to the expiration of the
initial Employment Term or any renewal Employment Term.


 


4.                                       Compensation.


 


(a)                                  The
basic annual salary of the Associate for his employment services hereunder
shall be $150,000 or such higher annual salary, if any, as shall be approved by
the Board of Directors of the Parent Company from time to time (the “Base
Salary”), which shall be payable in accordance with the Company’s payroll
policy.  Nothing contained herein shall
affect or in any way limit the Associate’s rights as an Associate of the
Company to participate in any Company 401(k) profit sharing plan or medical and
life insurance programs offered by the Company to its employees, all of which
shall be available to the Associate to the same extent as if this Agreement had
not existed, and compensation received by the Associate hereunder shall be in
addition to the foregoing.


 


(b)                                 In
addition to the Base Salary and fringe benefits described above, the Associate
shall be eligible to earn a bonus (the “Bonus”) each fiscal quarter during the
term hereof


 

















 


beginning with
the fiscal quarter starting May 1, 2003 and ending July 31, 2003.  The Bonus shall be equal to one-half percent
(1⁄2%) of the Parent Company’s Net Income during such period.


 


“Parent
Company’s Net Income” shall be defined as the consolidated net income of the
Parent Company and its subsidiaries, calculated in accordance with generally
accepted accounting principles (“GAAP”) in the United States of America as
determined by the Company and reviewed, or attested to, by the Company’s
independent certified public accountants. 
Provided, however, Parent Company’s Net Income shall not include any
gain or loss which may occur as a result of the sale of all or substantially
all of (i) the assets of Car-Mart, or (ii) the capital stock of the Company
and/or Colonial, to a party unrelated to the Company, Colonial or the Parent
Company.  The Bonus shall be paid each
fiscal quarter, within fifteen (15) days of the Parent Company’s filing of the
related Form 10Q or 10K for such fiscal quarter, based upon the Parent
Company’s Net Income for that fiscal quarter. 
Any Parent Company net loss in one fiscal quarter shall be carried
forward to the next fiscal quarter to reduce any net income in the subsequent
fiscal quarter or quarters until such net loss is fully absorbed.  Any Bonus shall be deemed to be earned by
the Associate if the Associate was an employee of the Company as of the last
day of the fiscal quarter in question.


 


5.                                       Expense
Account and Vacations.  Matters
relating to expense accounts for the Associate, vacations and the like shall be
mutually agreed upon from time to time. 
However, the Company agrees to reimburse the Associate for all expenses
reasonably incurred by him on behalf of the Company in accordance with the
prevailing practice and policy of the Company. 
In addition, the Associate shall be entitled to that number of days of
paid vacation and paid sick leave as is consistent with the prevailing practice
and policy of the Company for other employees in the same or similar position
as that held by the Associate hereunder.


 


6.                                       Agreement
Not to Compete.  As an inducement
for the Company to enter into this Agreement, the Associate agrees that for so
long as he is employed by the Company, and for a period of one (1) year
thereafter, he will not, within the States of Arkansas, Texas, Oklahoma,
Kentucky, Indiana, Missouri, and Kansas, directly or indirectly, in any
capacity, render his services, engage or have a financial interest in any business
which is competitive with any of those business activities in which the Company
was engaged during his employment by the Company, including, without
limitation, the sale and financing of used vehicles or any business which is
substantially similar thereto.  However,
the Associate may have a financial interest in a competitor of the Company if
that interest is in the form of ownership of less than one percent (1%) of the
outstanding stock of a company whose securities are listed on a national
exchange or quoted on the NASDAQ National Market System.  If a court determines the foregoing
restrictions are too broad or otherwise unreasonable under applicable law,
including with respect to time or space, the court is hereby requested and
authorized by the parties hereto to revise the foregoing restriction to include
the maximum restrictions allowable under the applicable law.  For the purposes of this Agreement, the term
“Company” refers to the Company and any incorporated or unincorporated
subsidiaries or affiliates of the Company.


 


7.                                       Covenant
Against Solicitation of Employees and Customers.  As an inducement for the Company to enter into this Agreement,
the Associate covenants and agrees that during the term of his employment, and
for a period of one (1) year thereafter, he will not:


 


(a)                                  Solicit
business from, or accept business of, any of Car-Mart’s customers, either
directly or indirectly, except in the furtherance of the Company’s business;
nor will he work for, work with, or accept employment with any person or entity
that does or attempts to solicit business from, or does or intends to use the
Associate’s knowledge and relationship with Car-Mart’s customers to obtain
business from Car-Mart’s customers; or


 


(b)                                 Directly
or indirectly solicit any of Car-Mart’s employees to work for the Associate or
any third party.


 


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The term “customers” shall
include any and all persons, partnerships, corporations, firms, or other
entities (a) that are customers of Car-Mart within the twenty-four (24) month
period immediately preceding the Associate’s termination of employment, and (b)
any prospective customers that have been solicited by the Associate while
employed hereunder.


 


8.                                       Secret
Processes and Confidential Information.


 


(a)                                  The
Associate has had and will have possession of or access to confidential
information relating to the business of the Company, including, but not limited
to, writings, equipment, processes, drawings, reports, manuals, invention
records, financial information, business plans, customer and mailing lists, the
identity of or other facts relating to prospective customers, inventory lists,
arrangements with suppliers and customers, computer programs or other material
embodying trade secrets, customer, or product information or technical or
business information of the Company. 
All such confidential information, other than any information which is
in the public domain through no act or omission of the Associate or which he is
authorized to disclose, is referred to collectively as the “Company
Information”.  The Associate agrees that
so long as he is employed by the Company and for an indefinite period
thereafter, he shall not (i) use or exploit in any manner the Company
Information for himself or any other person, partnership, association,
corporation, or other entity other than the Company, (ii) remove any Company
Information, or any reproduction thereof, from the possession or control of the
Company, and (iii) treat Company Information otherwise than in a confidential
manner.


 


(b)                                 All
Company Information developed, created, or maintained by the Associate, alone
or with others while employed by the Company or thereafter, shall remain at all
times the exclusive property of the Company. 
The Associate agrees to return to the Company all Company Information,
and reproductions thereof, whether prepared by him or others, which are in his
possession immediately upon request and, in any event, upon the completion of
his employment by the Company.


 


9.                                       Remedies.  The Associate expressly agrees that the
remedy at law for any breach of Sections 6, 7 or 8 will be inadequate and that
upon any such breach or threatened breach, the Company shall be entitled, as a
matter of right, to injunctive relief in any court of competent jurisdiction,
in equity or otherwise, to enforce the specific performance of the Associate’s
obligations under these provisions without the necessity of proving the actual
damage to the Company or the inadequacy of a legal remedy.


 


10.                                 Termination
Without Compensation.


 


(a)                                  The
Employment Term will terminate as of the end of the term of this Agreement
unless terminated earlier in accordance with this Section 10, Section 11,
Section 12, or Section 13.


 


(b)                                 The
Employment Term may also be terminated by the Company for cause (“Cause”) with
written notice to the Associate upon the occurrence of any of the following:


 


(i)                                     the
commission by the Associate of any deliberate and premeditated act involving
moral turpitude detrimental to the economic interests of the Company;


 


(ii)                                  the
conviction of the Associate of a felony;


 


(iii)                               the
willful failure or refusal of the Associate to perform his duties hereunder
(which failure or refusal persists after written notice from the Company to the
Associate complaining of such failure or refusal) or the Associate’s gross
negligence of a material nature in connection with the performance of such
duties; or


 


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(iv)                              the
breach by the Associate of any provision of this Agreement which is not cured
within thirty (30) days subsequent to written notice from the Company to the
Associate of the breach.


 


(c)                                  Upon
termination of the Employment Term under subsections (a) or (b) above, the
parties hereto will be relieved of any further obligations hereunder except for
any obligations set forth in Sections 6, 7, or 8.


 


11.                                 Termination
Without Cause.  The Company shall
have the right to terminate the Employment Term without Cause at any time.  If the termination is effected by the Company
in connection with a change in control of the Parent Company as described in
Section 14, then the Severance Payment as described in Section 14 shall be
applicable.  If the termination is
effected by the Company other than as described in Section 10 or Section 14,
then under such circumstances, the Associate’s Base Salary (but not any Bonus)
then in effect hereunder will continue through the Employment Term.


 


12.                                 Death
of the Associate.  If the Associate
dies during the Employment Term, (a) the Employment Term shall terminate, and
(b) the Company will pay to the Associate’s estate the Associate’s Base Salary
(but not any Bonus unless earned prior to the date of death) then in effect
through the end of the calendar month in which such death occurs.


 


13.                                 Disability
of the Associate. If the Associate becomes disabled during the Employment
Term, the Company may terminate the Associate’s position as an officer, but
this Agreement shall otherwise remain in full force and effect, and the
Associate’s Base Salary (but not any Bonus) then in effect will continue
through the Employment Term, provided, however, any amounts payable to the
Associate under the Company’s disability insurance policy shall be deducted
from the amounts payable to the Associate hereunder.  For the purposes of this Agreement, the Associate shall be deemed
to be disabled when he is deemed to be disabled under the Company’s disability
insurance policy or, if the Company does not have a disability insurance policy
for the Associate, the Associate shall be deemed disabled if he is unable to
perform his services or discharge his duties as an Associate of the Company for
ninety (90) or more consecutive days or one hundred twenty (120) days in the
aggregate in any twelve (12) month period.


 


14.                                 Change
in Control of the Parent Company


 


(a)                                  In
the event of a change in control of the Parent Company, (i) the Associate shall
be entitled, for a period beginning on the date of closing and ending one (1)
year after the date of closing (the “Closing Date”) of the transaction
effecting such change in control and at his election, to give written notice to
the Parent Company of termination of his employment, or (ii) if the Associate’s
employment with the Company is terminated without Cause by the Parent Company
or the Company, as the case may be, during the period beginning on the Closing
Date and ending one (1) year after the Closing Date, the Company shall pay to
the Associate a lump sum cash payment (the “Severance Payment”).  The Severance Payment shall be equal to one
(1) times the lesser of (a) the Associate’s then-current Base Salary (but not
any Bonus) or $150,000, whichever is greater, or (b) the “base amount” with
respect to the Associate’s compensation, as such term is defined in Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”) (the
“Severance Salary”) with respect to termination pursuant to Section 14(a)(i)
hereof, and 2.99 times the Severance Salary with respect to termination
pursuant to Section 14(a)(ii) hereof.


 


(b)                                 The
Severance Payment shall be paid by the Company not later than five (5) days
after the date of termination of employment. 
Upon the payment to the Associate of the Severance Payment in accordance
with this Section 14, the Employment Term shall terminate,


 


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and the
Associate’s right to compensation pursuant to Section 4 shall terminate as of
the date of payment of the Severance Payment.


 


(c)                                  In
the event of a change in control of the Parent Company, all unvested stock
options previously granted by the Parent Company to the Associate shall vest on
the Closing Date.  If the Associate
elects to terminate his employment or if his employment is terminated as set
forth in Section 14(a) hereof, and to the extent that the acceleration of the
vesting of any of the Associate’s stock options will reduce the Severance
Payment payable in accordance with the limitations set forth in Section 280G of
the Code, the Associate, at his option, may notify the Parent Company not to
accelerate the vesting of all or a portion of the Associate’s stock
options.  In addition, to the extent any
of the Associate’s vested stock options will reduce the Severance Payment in
accordance with the limitation set forth in Section 280G of the Code, the Associate,
at his option, may notify the Parent Company of his rescission and
nonacceptance of all or a portion of such vested stock options.


 


(d)                                 For
purposes of this Paragraph 14, “change in control” of the Parent Company shall
mean:


 


(i)                                     any
transaction, whether by merger, consolidation, asset sale, tender offer,
reverse stock split or otherwise, which results in the acquisition or
beneficial ownership (as that term is defined under rules and regulations
promulgated under the Securities Exchange Act of 1934, as amended) by any
person or entity or any group or entities acting in concert, of 50.1% or more
of the outstanding shares of the Common Stock of the Parent Company; or


 


(ii)                                  the
replacement of a majority of the members of the Parent Company’s Board of Directors
during any twenty-four (24) consecutive month period and whose appointment or
election is not endorsed by a majority of the members of the Company’s Board of
Directors prior to the date of such appointment or election; or


 


(iii)                               the
sale of all or substantially all of the assets of Car-Mart, including, without
limitation, the sale of all of the outstanding capital stock of the Company and
Colonial.


 


(e)                                  The
Severance Payment shall be in addition to any other rights and benefits for
which the Associate is eligible, either by way of contract or with respect to
rights and benefits generally available to other executive officers or
Associates of the Company.


 


15.                                 Notices.  All notices, demands and requests which may
be given or which are required to be given by either party to the other, and
any exercise of a right of termination provided by this Agreement, shall be in
writing and shall be deemed effective when either:  (a) personally delivered to the intended recipient; (b) sent by
certified or registered mail, return receipt requested, addressed to the
intended recipient at the address specified below; (c) delivered in person to
the address set forth below for the party to which the notice was given; (d)
deposited into the custody of a nationally recognized overnight delivery
service such as Federal Express Corporation, Emery or Purolator, addressed to
such party at the address specified below; or (e) sent by facsimile, telegram
or telex, provided that receipt for such facsimile, telegram or telex is verified
by the sender and followed by a notice sent in accordance with one of the other
provisions set forth above.  Notices
shall be effective on the date of delivery, or receipt of, if delivery is not
accepted, on the earlier of the date that delivery is refused or three (3) days
after the date the notice is mailed. 
For purposes of this paragraph, the addresses of the parties for all


 


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notices are as follows (unless
changes by similar notice in writing are given by the particular person whose
address is to be changed):


 


If to the Associate, to Eddie Lee Hight, 14 Sechrest Circle, Rogers,
Arkansas 72758;


 


If to the Company, to America’s Car-Mart, Inc., 1501 S.E. Walton Blvd.,
Suite 213, Bentonville, Arkansas 72712, Fax #479-273-7556.


 


With a copy to Lisa L. Kelley, P. O. Box 2359, Bentonville, Arkansas
72712-2359, Fax 479-464-5988;


 


And a copy to America’s Car-Mart, Inc., 4040 North MacArthur Blvd.,
Suite 100, Irving, Texas 75038, Attention: T. J. Falgout, III, Chief Executive
Officer, Fax 972-719-4466;


 


And a copy to Mark D. Slusser, Chief Financial Officer, America’s
Car-Mart, Inc., 4040 North MacArthur Boulevard, Suite 100, Irving, Texas 75038,
Fax 972-719-4466.


 


Any party hereto may designate
a different address by written notice given to the other parties.


 


16.                                 Governing
Law.  this agreement shall be construed in accordance with and governed by
the laws of the state of arkansas.


 


17.                                 Assignability.  The Associate may not assign his interest in
or delegate his duties under this Agreement. 
The rights and obligations of the Company hereunder may be assigned only
by operation of law in connection with a merger in which the Company is not the
surviving corporation or in connection with the sale of substantially all of
the assets of the Company; and in the latter event, such assignment shall not
relieve the Company of its obligations hereunder.


 


18.                                 Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of the Company, its successors and assigns.


 


19.                                 Entire
Agreement; Modification.  This
Agreement constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and may not be modified or amended in any way
except in writing by the parties hereto. 
This Agreement supersedes any and all prior employment agreements or the
like between the Company and the Associate (including the Employment Agreement
dated May 1, 2002, between the Company and the Associate), all of which are
hereby terminated.


 


20.                                 Duration.  Notwithstanding the termination of the
Employment Term and of the Associate’s employment by the Company, this
Agreement shall continue to bind the parties for so long as any obligations
remain under this Agreement, and, in particular, the Associate shall continue
to be bound by the terms of Sections 6, 7 and 8.


 


21.                                 Waiver.  No waiver by the Company of any breach by
the Associate of this Agreement shall be construed to be a waiver as to
succeeding breaches.


 


22.                                 Enforceability.  In the event any portion or portions of this
Agreement are declared to be void for illegality, then the remaining portions
of this Agreement shall remain valid and binding.


 


23.                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.


 


IN WITNESS
WHEREOF, the parties have executed this Agreement on or as of the day and year
first above written.


 


	
  COMPANY:

  	
   

  	
  ASSOCIATE:

  	
   

  
	
   

  	
   

  
	
  AMERICA’S CAR-MART, INC., an

  Arkansas corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  T. J.
  Falgout, III, Vice President

  	
  Eddie Lee
  Hight

  
							



 


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