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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
January 1, 1996, by and between PACIFIC UNITED GROUP, INC., a Delaware
corporation (hereinafter referred to as "EMPLOYER") and XXXXXXX X. XXXXX
(hereinafter referred to as "YOUNG"), on the following terms and conditions:
1. TERM OF AGREEMENT; DUTIES.
(a) Term. EMPLOYER hereby agrees to employ YOUNG as the
Senior Executive Vice President of EMPLOYER and President of Pacific Thrift and
Loan Company, Inc., a California corporation and operating subsidiary of the
EMPLOYER ("Pacific Thrift"), for a two-year term, commencing on the date
hereof, and YOUNG hereby agrees to accept such employment for such term,
subject to earlier termination under the circumstances provided herein. The
term of this Agreement shall be extended automatically to cover successive
terms of one year commencing on each anniversary date of the date hereof after
the initial two-year term, unless, at least six months prior to the end of the
initial term or any renewal term hereof, YOUNG gives written notice to the
Board of Directors of EMPLOYER (the "Board"), or EMPLOYER gives written notice
to YOUNG, of an intent to terminate this Agreement at the end of such term.
(b) Duties. YOUNG, subject to the direction and control
of the Board, shall devote all of YOUNG'S productive time, attention and
energies to discharging, and shall perform, such executive duties and
managerial responsibilities as may from time to time be specified by EMPLOYER,
and will use YOUNG'S best efforts to promote the interests of EMPLOYER and its
subsidiaries and affiliates. The performance of such duties and
responsibilities shall be YOUNG'S exclusive employment for compensation;
provided, however, that nothing herein contained shall be deemed to limit
YOUNG'S right, with the consent of the Board, to engage in other activities
that do not interfere with YOUNG'S duties hereunder.
2. COMPENSATION.
(a) As compensation for the services to be rendered by
YOUNG hereunder during the term of YOUNG'S employment, including all services
to be rendered as an officer and executive of EMPLOYER, its subsidiaries and
affiliates, EMPLOYER agrees to pay YOUNG a Base Salary as defined and in
accordance with the terms of Section 2 (a) (i) herein, plus a Bonus as defined
and in accordance with the terms of Section 2 (a) (ii) herein:
(i) During the term of this Agreement, EMPLOYER
shall pay YOUNG a salary at an annual base rate of two
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hundred twenty five thousand dollars ($225,000) per year, which shall be
adjusted annually to reflect any increase from the previous year in the
Consumer Price Index for the Los Angeles, California area (the "Base Salary").
The applicable Base Salary shall be payable not less frequently than monthly in
accordance with the regular salary procedure from time to time adopted by
EMPLOYER. There shall be deducted from all compensation paid to YOUNG such
sums, including but not limited to Social Security, income tax withholding,
employment insurance, and any and all other such deductions, as EMPLOYER is by
law obligated to withhold.
(ii) In addition to the Base Salary, EMPLOYER
shall pay YOUNG an annual bonus earned as of December 31 of the respective year
(the "Bonus") to be paid to YOUNG upon issuance in due course of the EMPLOYER'S
annual certified financial report. The Bonus shall equal 2 1/2% of the annual
net pre-tax profits of EMPLOYER if EMPLOYER earns annual net after tax profits
(after payment of the Bonus and such bonuses to any other employee who is
entitled to receive a bonus from the EMPLOYER based upon the same formula as
set forth in this Section 2 (a) (ii) under a contract of employment dated as of
the same date as this Agreement) equal to a minimum annual return on average
equity of ten percent (10%) (the "Minimum 10% Annual Return"). As used in this
Section 2 (a) (ii), net pre-tax profits and net after tax profits refer to the
net pre-tax profits and net after tax profits as determined under generally
accepted accounting principles. The Bonus will increase to five percent (5%)
of such annual net pre-tax profits of EMPLOYER if EMPLOYER earns annual net
after tax profits (after payment of the Bonus and such bonuses to any other
employee who is entitled to receive a bonus from the EMPLOYER based upon the
same formula as set forth in this Section 2 (a) (ii) under a contract of
employment dated as of the same date as this Agreement) equal to a minimum
annual return on average equity in excess of fifteen percent (15%) (the
"Minimum 15% Annual Return"). To the extent that the collective bonus amounts
of YOUNG and any other employee under a contract of employment dated as of the
same date as this Agreement determined according to this formula result in the
reduction of annual net after tax profits of EMPLOYER to an amount less than
the Minimum 10% Annual Return or the Minimum 15% Annual Return (collectively
referred to hereafter as the "Minimum Annual Returns"), then the amount of
Bonus paid to YOUNG and the amount of bonus paid to such other employee shall
be reduced to such amount as will result in EMPLOYER retaining the respective
Minimum Annual Return, and such amount shall be divided equally between each of
them. It is expressly acknowledged that for purposes of defining the Minimum
Annual Returns there shall not be deducted any new profit-based bonus
arrangements provided under written employment contracts with EMPLOYER entered
into after the date of this Agreement.
(iii) YOUNG shall be reimbursed for YOUNG'S
reasonable and actual out-of-pocket expenses incurred by YOUNG in
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performance of YOUNG'S duties and responsibilities hereunder, provided that
YOUNG shall first furnish to EMPLOYER proper vouchers and/or receipts.
(iv) YOUNG shall be entitled to participate in, and
shall be included in, such insurance, pension, profit sharing, stock option,
stock purchase and other employee benefit plans, excluding the employee cash
bonus pool, of EMPLOYER as are in effect from time to time during the term of
this Agreement and provided to other senior executive employees of EMPLOYER,
including, but not limited to, EMPLOYER'S Supplemental Executive Retirement
Plan (all of which are collectively referred to herein as the "Benefit Plans").
(v) YOUNG shall also be entitled to all perquisites
provided in accordance with EMPLOYER'S policy for senior management executives
from time to time in effect and such additional perquisites as may be agreed
from time to time between the Board and YOUNG (all of which are collectively
referred to herein as the "Perquisites"). Notwithstanding the foregoing, in no
event shall each or any of the Perquisites provided pursuant to the terms of
this Section 2 (a) (v) be lesser in value than such perquisites as were
provided to YOUNG by Pacific Thrift and/or Presidential Mortgage Company, a
California Partnership ("Presidential") and in effect immediately prior to the
transfer of assets by Presidential to EMPLOYER. Perquisites provided pursuant
to this Section 2(a)(v) shall include, without limitation, use of an
automobile, automobile allowances, expense allowances, vacation days, sick days
and holidays.
3. DISABILITY. If, on account of any physical or mental
disability, YOUNG shall fail or be unable to perform under this Agreement for
any period of one hundred twenty (120) consecutive days or for an aggregate
period of one hundred twenty (120) or more days during any consecutive
twelve-month period, EMPLOYER may, at its option, at any time thereafter, upon
written notice to YOUNG, terminate the employment relationship provided for in
this Agreement. In such event, YOUNG'S requirement to render services
hereunder and EMPLOYER'S requirement to compensate YOUNG hereunder shall
terminate and come to an end upon the date provided in such notice. In that
event, YOUNG shall be entitled to receive, as disability compensation: (i) a
lump sum payment to be paid on the effective date of termination pursuant to
this Section 3, which shall consist of the full annual Bonus earned, if any, at
the end of the prior year, (ii) YOUNG'S Base Salary for one year following
termination of this Agreement payable not less frequently than monthly, and
(iii) use of an automobile, full automobile insurance coverage, and health
insurance coverage under any health insurance policies maintained by EMPLOYER
for its other senior executives, all of which shall be provided pursuant to the
terms of Section 2 (a) (v) herein and shall continue to be provided without
interruption for the greater of one year following the effective date of
termination pursuant to this Section 3 or the remainder of the term of this
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Agreement. If, after the end of the fiscal year following the effective date
of termination pursuant to this Section 3, it is determined that the annual
Bonus compensation which would have been earned by YOUNG for such year if the
YOUNG had continued to be employed under this Agreement would have exceeded the
Bonus actually paid, EMPLOYER shall pay YOUNG a lump sum payment equal to the
difference between the Bonus amount previously paid to YOUNG and the Bonus
amount that would have been earned by YOUNG. Such amount shall be paid on the
earlier of ten (10) days after the issuance of EMPLOYER'S annual certified
financial report or one hundred and twenty (120) days after the end of the
fiscal year. YOUNG shall not be obligated to reimburse EMPLOYER if the Bonus
amount paid by EMPLOYER upon termination exceeds the amount of any Bonus that
would have been earned. EMPLOYER may, at its option, apply for disability
income insurance and, if so, any obligation on the part of EMPLOYER to pay
YOUNG any payments on account of any physical or mental disability of YOUNG as
specified above, shall be reduced by the amount of any payments to YOUNG under
any such disability income policy. Any payments to YOUNG under any state
disability insurance shall not reduce the amount payable to YOUNG under this
Agreement.
4. DEATH. In the event of YOUNG'S death during the term hereof,
this Agreement shall terminate immediately. In such event, YOUNG's personal
representative shall be entitled to receive, as a death benefit, in addition to
any other payments which YOUNG's personal representative may be entitled to
receive under any Benefit Plans: (i) a lump sum payment to be paid within five
(5) days of YOUNG'S death equal to the full annual Bonus earned by the YOUNG,
at the end of the prior year; and (ii) YOUNG'S Base Salary for one year
following YOUNG'S death, payable not less frequently than monthly. If, after
the end of the fiscal year following the YOUNG'S death, it is determined that
the annual Bonus compensation which would have been earned by YOUNG for such
year would have exceeded the Bonus actually paid, EMPLOYER shall pay YOUNG'S
personal representatives a lump sum payment equal to the difference between the
Bonus amount previously paid to YOUNG'S personal representatives and the Bonus
amount that would have been earned by YOUNG. Such amount shall be paid on the
earlier of ten (10) days after the issuance of EMPLOYER'S annual certified
financial report or one hundred and twenty (120) days after the end of the
fiscal year. YOUNG'S personal representatives shall not be obligated to
reimburse EMPLOYER if the Bonus amount paid by EMPLOYER within five (5) days
following YOUNG'S death exceeds the amount of any Bonus that would have been
earned.
EMPLOYER may maintain life insurance on the life of YOUNG in favor of
the EMPLOYER. YOUNG shall have no interest whatsoever in any such policy or
policies, except as otherwise provided in any split dollar life insurance
agreements, but YOUNG shall, at the request of EMPLOYER, submit to such medical
examinations, supply such information, consent to such blood tests and execute
such documents as may be required by the
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insurance company or companies to whom EMPLOYER has applied for such insurance.
5. TERMINATION FOR CAUSE. EMPLOYER may discharge YOUNG at any
time for cause. "Cause" for discharge shall mean (i) theft or embezzlement by
YOUNG from EMPLOYER or its affiliates, (ii) fraud or other acts of dishonesty
by YOUNG in the conduct of EMPLOYER'S business or the fulfillment of YOUNG'S
assigned responsibilities hereunder, (iii) YOUNG'S conviction of, or plea of
nolo contendere to, any felony or any crime involving moral turpitude, (iv)
YOUNG'S willfully and knowingly taking any action which is materially injurious
to EMPLOYER'S business or reputation. Within 10 business days following
receipt of written notice of termination for Cause, YOUNG shall have the right
to demand and, if demanded, to receive within 30 days, an opportunity to
respond and defend himself before the Board and to have the Board by resolution
confirm by a three-fourths affirmative vote that EMPLOYER has grounds to
terminate YOUNG for Cause. If the Board does not determine that Cause exists,
YOUNG shall have the option to treat his employment as not having terminated or
as having been terminated by EMPLOYER without cause as defined in Section 6
herein. Without limiting the foregoing, nothing in this Section 5 shall be
construed to require that YOUNG demand a hearing before the Board as a
condition to pursuing any claim or action with respect to the matters contained
in this Agreement. The occurrence of any event constituting cause for discharge
shall permit, but not require, EMPLOYER to terminate YOUNG for Cause; provided,
however, that EMPLOYER'S decision not to terminate the YOUNG upon the
occurrence of an event constituting cause for discharge shall not operate as a
waiver of its rights provided in this Section 5 or otherwise.
If EMPLOYER terminates YOUNG for Cause, EMPLOYER shall be
obligated to provide to YOUNG only the Base Salary provided for in Section 2
(a) (i) herein through the date of termination of YOUNG at the rate in effect
on the date of such termination.
6. TERMINATION WITHOUT CAUSE. Should EMPLOYER terminate this
Agreement for reasons other than those specified in Sections 3, 4, 5, or 7
herein, YOUNG shall be entitled to use of an automobile, full automobile
insurance coverage, and health insurance coverage under any health insurance
policies maintained by EMPLOYER for its other senior executives, all of which
shall be provided pursuant to the terms of Section 2 (a) (v) herein and shall
continue to be provided without interruption for six months following the
effective date of termination pursuant to this Section 6. Upon termination
pursuant to this Section 6, EMPLOYER shall additionally pay to YOUNG a lump sum
payment, to be paid on the effective date of termination pursuant to this
Section 6, which shall consist of: (i) one-half of the full annual Base
Salary, and (ii) the cash value of all vacation, holiday and sick days which
have accrued up to the date of termination and which would have accrued for six
months following termination pursuant
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to this Section 6. Finally, on the earlier of ten (10) days after the issuance
of EMPLOYER'S annual certified financial report or one hundred and twenty (120)
days after the end of the fiscal year in which termination pursuant to this
Section 6 takes place, EMPLOYER shall also pay to YOUNG the lesser of one-half
of the annual Bonus compensation earned by YOUNG at the end of the prior year
or one-half of the annual Bonus compensation which would have been earned by
YOUNG if the YOUNG had continued to be employed under this Agreement for the
year in which termination takes place. (The sum of all amounts and benefits to
be provided by EMPLOYER to YOUNG pursuant to this Section 6 is collectively
referred to herein as the "Termination Payment".)
7. CORPORATE CHANGES.
(a) Definition. YOUNG may terminate his employment
hereunder upon thirty (30) days written notice at any time within one year
following the occurrence of a Corporate Change. For purposes of this Section
7, a "Corporate Change" shall be deemed to have occurred upon the occurrence of
any one (or more) of the following events: (i) a transaction in which EMPLOYER
ceases to be an independent publicly owned corporation that is required to file
quarterly and annual reports under the Securities Exchange Act of 1934, (ii) a
sale or other disposition of all or substantially all of the assets, or a
majority of the outstanding capital stock, of EMPLOYER (including but not
limited to the assets or stock of EMPLOYER'S subsidiaries that results in all
or substantially all of the assets or stock of EMPLOYER on a consolidated basis
being sold), (iii) as a result of, or in connection with, any cash tender
offer, exchange offer, merger or other business combination, sale of assets, or
contested election for the Board, or combination of the foregoing, persons who
were directors of EMPLOYER just prior to such event(s) shall cease to
constitute a majority of the Board, (iv) any person, including a group as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
becomes the beneficial owner of shares of Employer with respect to which twenty
percent (20%) or more of the total number of votes for the election of the
Board may be cast, (v) EMPLOYER'S stockholders cause a change in the majority
of the members of the Board within a twelve (12) month period; provided,
however, that the election of one or more new directors shall not be deemed to
be a change in the membership of the Board if the nomination of the newly
elected directors was approved by the vote of three-fourths of the directors
then still in office who were directors at the beginning of such twelve (12)
month period, or (vi) a tender offer or exchange offer is made for shares of
the EMPLOYER'S common stock (other than one made by the EMPLOYER) and shares of
common stock are acquired thereunder.
(b) Payments. Upon termination of employment pursuant to
this Section 7, YOUNG shall be entitled to use of an automobile, full
automobile insurance coverage, and health insurance coverage under any health
insurance policies maintained by EMPLOYER for its other senior executive
officers, all of which
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shall be provided pursuant to the terms of Section 2 (a) (v) herein and shall
continue to be provided without interruption for one year following the
effective date of termination pursuant to this Section 7. Upon termination
pursuant to this Section 7, EMPLOYER shall additionally pay to YOUNG a lump sum
payment, to be paid within five (5) days after the date of YOUNG'S notice
pursuant to Section 7 (a) herein, which shall consist of: (i) the full annual
Base Salary, (ii) an amount equal to the annual Bonus compensation earned by
YOUNG at the end of the prior year, and (iii) the cash value of all vacation,
holiday and sick days which have accrued up to the date of termination and
which would have accrued for one year following termination pursuant to this
Section 7. (The sum of all amounts and benefits to be provided by EMPLOYER to
YOUNG pursuant to this Section 7 (b) is collectively referred to herein as the
"Corporate Changes Termination Payment"). Notwithstanding the foregoing, if
YOUNG gives notice of termination pursuant to this Section 7 prior to the
closing of a transaction referred to in Section 7(a) (i) or (ii) hereof, the
Corporate Changes Termination Payment must be made a condition to and must be
paid on the date of the closing of such a transaction. If, after the end of
the fiscal year following the effective date of termination pursuant to this
Section 7, it is determined that the annual Bonus compensation which would have
been earned by YOUNG for such year if the YOUNG had continued to be employed
under this Agreement would have exceeded the Bonus actually paid, EMPLOYER
shall pay YOUNG a lump sum payment equal to the difference between the Bonus
amount previously paid to YOUNG and the Bonus amount that would have been
earned by YOUNG. If, on the other hand, it is determined that the Bonus amount
paid by EMPLOYER upon termination exceeds the amount of any Bonus that would
have been earned by YOUNG for such year, YOUNG shall pay EMPLOYER a lump sum
payment equal to the difference between the Bonus amount previously paid to
YOUNG and the Bonus amount that would have been earned by YOUNG for such year.
Such amount shall be paid on the earlier of ten (10) days after the issuance of
EMPLOYER'S annual certified financial report or one hundred twenty (120) days
after the end of the fiscal year.
(c) Tax Limitations on Corporate Changes Payments. If
the aggregate of all payments, including but not limited to, Corporate Changes
Termination Payments and earned Bonus differentials that are to be paid to
YOUNG contingent on those Corporate Changes specified in Section 7 (a) herein
(the "Aggregate Amount"), would constitute a "parachute payment" (as defined in
Section 280 G of the Internal Revenue Code of 1986, as amended or supplemented
(the "Code"), the Corporate Changes Termination Payment and/or earned Bonus
differential otherwise payable to the YOUNG pursuant to Section 7 (b) herein
shall be equal to the higher of: (i) the amount (referred to herein as the
"Reduced Amount") that would result in no portion of the Aggregate Amount being
subject to the excise tax imposed by Section 4999 of the Code, or (ii) the full
Aggregate Amount if the net after tax payments to YOUNG would exceed the
Reduced
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Amount. The determination of the Corporate Changes Termination Payment, the
earned Bonus differential under Section 7 (b), the Reduced Amount and the net
after tax amount payable to YOUNG on the full Aggregate Amount shall be made by
the YOUNG and the EMPLOYER in good faith, and in the event they disagree, such
determination shall be made by means of arbitration to be conducted at the
EMPLOYER'S expense. Any such arbitration shall be conducted in Los Angeles,
California, by one arbitrator, who shall be a member of a nationally recognized
accounting firm that is not then engaged by the EMPLOYER or any of its major
stockholders, and who shall be jointly designated by the parties. If the
parties cannot agree on the selection of an arbitrator, EMPLOYER'S then current
independent auditors shall select such arbitrator. The findings of the
arbitrator shall be conclusive and binding on the parties. For purposes of
this Section 7 (c), the net after tax amount payable to YOUNG shall mean the
present value, as determined in accordance with Section 280G(d)(4) of the Code,
of any payment or distribution in the nature of compensation to or for YOUNG'S
benefit, whether paid or payable pursuant to this Agreement or otherwise, net
of all taxes imposed on the YOUNG with respect thereto under Sections 1 and
4999 of the Code, determined by applying the highest marginal rate under
Section 1 of the Code.
8. RIGHTS TO PROPRIETARY INFORMATION.
(a) For purposes of this Agreement, the term "Proprietary
Information" means and includes: 1. all written, oral and visual information
about EMPLOYER's customers, clients, employees, consultants and brokers that is
not readily known or available to the public, or that YOUNG learns of or
acquires through his employment by EMPLOYER; and 2. financial information,
marketing techniques and materials, marketing and development plans, broker
lists, customer lists, other information concerning brokers and customers,
pricing information and policies, price lists, employee files, corporate and
business contacts and relationships, corporate and business opportunities,
telephone logs and messages, video or audio tapes and/or disks, photographs,
film and slides, including all negatives and positive and prints, computer
disks and files, rolodex cards, addresses and telephone numbers, contracts,
releases, other writings of any kind, and any and all other materials of a
proprietary nature to which YOUNG is exposed or has access as a consequence of
his employment by EMPLOYER. All of the Proprietary Information is, and at all
times shall be and remain, private and confidential and is the sole and
exclusive property of, and owned and controlled by EMPLOYER, regardless of
whether such Proprietary Information is in tangible or intangible form. The
parties understand that information that is generally known to the public, or
which YOUNG acquired other than as a consequence of his employment by EMPLOYER,
such as in the course of similar employment or work elsewhere shall not be
deemed part of the Proprietary Information.
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(b) All Proprietary Information shall be the sole
property of EMPLOYER, its successors and assigns, and EMPLOYER, its successors
and assigns shall be the sole owner of all patents, trademarks, service marks
and copyrights, and other rights (collectively referred to herein as "Rights")
pertaining to Proprietary Information. YOUNG hereby assigns to EMPLOYER any
rights YOUNG may have or acquire in Proprietary Information or Rights
pertaining to the Proprietary Information. YOUNG further agrees as to all
Proprietary Information to assist EMPLOYER or any person designated by it in
every necessary or appropriate manner (but at EMPLOYER's expense) to obtain and
from time to time enforce Rights relating to said Proprietary Information
throughout the universe. YOUNG will execute all documents for use in applying
for, obtaining and enforcing such Rights on such Proprietary Information as
EMPLOYER may desire, together with any assumptions thereof to EMPLOYER or
persons designated by it. YOUNG's obligation to assist EMPLOYER or any person
designated by it in obtaining and enforcing Rights relating to Proprietary
Information shall continue beyond the cessation of his employment. It is
provided, however, that EMPLOYER shall compensate YOUNG at a reasonable rate
after the cessation of employment for time actually spent by YOUNG upon
EMPLOYER's request for such assistance. In the event that EMPLOYER is unable,
after reasonable effort, to secure YOUNG's signature on any document or
documents needed to apply for or enforce any Right relating to Proprietary
Information, whether because of his physical or mental incapacity or for any
other reason whatsoever, YOUNG hereby irrevocably designates and appoints
EMPLOYER and its duly authorized officers and agents as his agents and
attorneys-in-fact to act for and in his behalf and stead in the execution and
filing of any such application and in furthering the application for an
enforcement of Rights with the same legal force and effect as if such acts were
performed by YOUNG.
(c) At all times, both during his employment and after
the cessation of employment, whether the cessation is voluntary or involuntary,
for any reason or no reason, or by disability, YOUNG will keep in strictest
confidence and trust all Proprietary Information, and YOUNG will not disclose,
use, or induce or assist in the use or disclosure of any Proprietary
Information or Rights pertaining to Proprietary Information, or anything
related thereto, without the prior, express written consent of EMPLOYER, except
as may be necessary in the ordinary course of performing his duties as an
employee of EMPLOYER. YOUNG recognizes that EMPLOYER has received and in the
future will receive from third parties their confidential, trade secret, or
Proprietary Information subject to a duty on EMPLOYER's part to maintain the
confidentiality of such information and to use it only in connection with the
performance of his duties as an employee of EMPLOYER. YOUNG agrees that YOUNG
owes EMPLOYER and such third parties, during his employment and thereafter, a
duty to hold all such confidential, trade secret, or Proprietary Information in
the strictest confidence, and YOUNG will not disclose, use, or induce or assist
in the use or disclosure of
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any such confidential, trade secret, or Proprietary Information without the
prior, express written consent of EMPLOYER, except as may be necessary in the
ordinary course of performing his duties as an employee of EMPLOYER consistent
with EMPLOYER's agreement with such third party.
(d) YOUNG agrees that all material or other original
works of authorship written, created, or developed by YOUNG in connection with
his employment hereunder (whether alone or in conjunction with any other
person), and all rights of any and every kind whatsoever in and to the results
and proceeds of YOUNG's services rendered hereunder, whether or not such rights
are now known, recognized or contemplated, and the complete, unconditional and
unencumbered ownership in and to such materials, results and proceeds for all
purposes whatsoever shall be "works for hire," as that term is defined in the
United States Copyright Act (17 U.S.C. Section 101), and shall be the sole and
absolute property of EMPLOYER, its successors and assigns, and YOUNG agrees
that he/she does not have and will not claim to have, either under this
Agreement or otherwise, any right, title or interest of any kind or nature
whatsoever in or to said property.
(e) YOUNG will promptly disclose to EMPLOYER, and
EMPLOYER hereby agrees to receive such disclosures in confidence, all
discoveries, developments, designs, improvements, inventions, software
programs, processes, techniques, know-how, negative know-how and data, whether
or not patentable or registrable under patent, copyright or similar statutes or
reduced to practice, made or conceived or reduced to practice or learned by
YOUNG, either alone or jointly with others during the period of his employment,
for the purpose of permitting EMPLOYER to determine whether they constitute
Proprietary Information, or copyrightable or patentable material.
9. NON-COMPETITION/NON-SOLICITATION.
(a) During the period of his employment, YOUNG will not
directly or indirectly engage in any activity which competes with EMPLOYER, or
which EMPLOYER shall determine in good faith to be in competition with EMPLOYER
or any subsidiary or affiliate of EMPLOYER. In addition, during his employment
and after the cessation of employment, YOUNG will not, alone or in concert with
others, or on his own behalf, or on behalf of any other person, in any way use
or disclose Proprietary Information in order to solicit, entice, or in any way
divert any broker to do business with any competitor of EMPLOYER or any
subsidiary or affiliate of EMPLOYER. During his employment, YOUNG agrees not
to plan or otherwise take any preliminary steps, either alone or in concert
with others, or on his own behalf, or on behalf of any other person, to set up
or engage in any business enterprise that would be in competition with EMPLOYER
or any subsidiary or affiliate of EMPLOYER.
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(b) During his employment and for a period of two (2)
years after the cessation of employment, YOUNG will not, either directly or
indirectly, either alone or in concert with others or on his own behalf or on
behalf of any other person, solicit, divert, entice, recruit, or employ any
employee of or consultant to EMPLOYER, or any subsidiary or affiliate of
EMPLOYER, to leave employment with or otherwise terminate employment with
EMPLOYER or any subsidiary or affiliate of EMPLOYER or work for any competitor
of EMPLOYER or any subsidiary or affiliate of EMPLOYER.
(c) YOUNG recognizes that the immediate and continuous
performance of his obligations in this paragraph 9 is extremely important and
valuable to EMPLOYER because of the extensive and costly training given to its
employees and the knowledge gained by such employees of the Proprietary
Information used by EMPLOYER in its operations. In the event of his breach of
those obligations, YOUNG therefore agrees that EMPLOYER shall be entitled to
estimated or liquidated damages, as defined herein. For each former employee
of EMPLOYER whom YOUNG solicits, diverts, recruits, or employs in violation of
this paragraph 9, and for each broker or mortgage loan customer of EMPLOYER
whom such former employee handled for EMPLOYER and whom the former employee
contacts or otherwise services or works with for his benefit or for the benefit
of anyone in privity with YOUNG, including any competitor of EMPLOYER or any
subsidiary or affiliate of EMPLOYER with whom YOUNG accepts employment in
breach of this paragraph 9, YOUNG shall pay EMPLOYER liquidated damages. The
liquidated damages for each such broker or customer shall be (i) the amount of
profit earned by EMPLOYER from mortgage loan referrals from each broker, or the
amount of profit earned on loans to each mortgage loan customer, during the
twelve (12) months immediately preceding termination of such former employer
with EMPLOYER, and (ii) the amount of cost to EMPLOYER to recruit and train a
replacement for each such former employee plus the first six (6) month's salary
paid to the replacement(s) for the former employee. If the former employee was
not in a position of have contacts with brokers or to otherwise generate
business from mortgage loan customers, the liquidated damages shall be the
amount of the cost to EMPLOYER to recruit and train a replacement(s) for the
former employee. YOUNG further agrees that the cost to recruit and train
replacement(s) for each former employee as described in this paragraph 9 will
be part of EMPLOYER's damages and that the profit formula for former employees
who had broker or mortgage loan business contact, and the first six (6) months
salary paid to the replacement(s) for former employees, are conservative
estimates of the value, or a portion of the value, of the former employee to
EMPLOYER.
10. SURRENDER OF PROPRIETARY INFORMATION. In the event of the
termination of his employment, YOUNG will deliver to EMPLOYER all devices,
records, sketches, reports, proposals, broker information, lists,
correspondence, equipment, software, computer disks, documents, photographs,
photostats, negatives,
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undeveloped film, notes, drawings, specifications, tape recordings or other
electronic recordings, programs, data and other materials or property of any
nature belonging to EMPLOYER or pertaining to his work with EMPLOYER, and YOUNG
will not take with YOUNG, or allow a third party to take, any of the foregoing
or any reproduction of any of the foregoing.
11. SUCCESSORS; BINDING AGREEMENT.
(a) EMPLOYER will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of EMPLOYER to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that EMPLOYER would be required to perform it if no such succession had taken
place. Any failure of EMPLOYER to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a material breach of this
Agreement and shall entitle YOUNG to compensation from EMPLOYER in the same
amount and on the same terms as he would be entitled to hereunder if EMPLOYER
were to terminate employment pursuant to Section 7 hereof, except that for
purposes of implementing the foregoing, the day before any such succession
becomes effective shall be deemed the date that payment is due. As used in
this Agreement, "EMPLOYER" shall mean EMPLOYER as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of, and be
enforceable by, YOUNG'S personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
YOUNG should die while any amount 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 his devisees,
legatee or other designees, or if there is no such designee, to his estate.
12. NOTICES. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been given at the time delivered, if personally delivered, or
twenty-four hours after deposit thereof for mailing at any general or branch
United States Post Office enclosed in a registered or certified postpaid
envelope and addressed as follows:
If to EMPLOYER:
Pacific United Group, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, President and Chief
Executive Officer
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with copies to:
Jeffer, Mangels, Xxxxxx & Marmaro
0000 Xxxxxx xx xxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxxx Xx Xxxx Xxxxxx, Esq.
and
Pacific United Group, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Board of Directors
If to YOUNG:
Xxxxxxx X. Xxxxx
________________
________________
The parties hereto may designate a different place at which notice shall be
given, provided, however, that any such notice of change of address shall be
effective only upon receipt.
13. ENTIRE UNDERSTANDING. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior written or oral agreements. This Agreement may not be
modified, amended, or terminated except by another instrument in writing
executed by the parties hereto.
14. GOVERNING LAW. This Agreement and all rights, obligations and
liabilities arising hereunder shall be construed and enforced in accordance
with the laws of the State of California.
15. ATTORNEY'S FEES.
(a) In the event it becomes necessary to commence any
proceeding or action to enforce the provisions of this Agreement, the court
before whom such action shall be tried may award to the prevailing party all
costs and expenses thereof, including but not limited to reasonable attorneys
fees, the usual, customary and lawfully recoverable Court costs, and all other
expenses in connection therewith. YOUNG shall be deemed to be the prevailing
party if he is awarded any amounts in any such proceeding or action.
(b) EMPLOYER shall also pay and be responsible for all
attorneys and related fees, expenses or costs incurred by YOUNG, if EMPLOYER,
or any stockholder of EMPLOYER contests the validity or enforceability of this
Agreement or any part hereof.
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The parties hereto have executed this Agreement on the day and year
first above written.
"YOUNG"
________________________________
XXXXXXX X. XXXXX
"EMPLOYER"
PACIFIC UNITED GROUP, INC.
By: _____________________________
Title:___________________________
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