EXHIBIT 10.13
EMPLOYMENT AND COMPENSATION AGREEMENT
This Employment and Compensation Agreement (the "Agreement") is entered
into in Contra Costa County, California, as of the 25th day of February, 1999,
by and between Finet Holdings Corporation, a Delaware corporation ("Employer"),
and Xxxx X. Xxxxxx ("Employee"), who agree as follows:
This Agreement is made with reference to the following facts:
A. Employer and Employee previously entered into a Consulting
Agreement, December 15, 1998 ("Prior Agreement"), a true and correct copy of
which is attached hereto as Exhibit A.
B. Employer and Employee (the "parties") have agreed to terminate the
Prior Agreement, effective as of February 27, 1999, and to enter into this
Agreement which shall supersede and replace the Prior Agreement, as well as any
other agreements or arrangements which the parties may have previously entered
into. Notwithstanding the foregoing, the parties agree to provide for the
implementation and vesting of the Stock Options which were granted in the Prior
Agreement and as is more specifically set forth in Section 5., b. below.
C. Employee desires to perform services for Employer and Employer
desires to engage Employee to perform services in accordance with the terms and
conditions set forth in this Agreement.
Now therefore, in consideration of the foregoing and of the covenants,
representations and promises set forth in this Agreement, the parties hereto,
agree as follows:
1. EMPLOYMENT.
a. Employer hereby offers Employee employment with Employer, and
Employee hereby accepts employment, commencing on February 28, 1999 on the terms
and conditions contained in this Agreement.
b. Employee shall serve as Executive Vice President and Chief
Financial Officer for reporting directly to the Chief Executive Officer or his
designee. In that capacity, Employee shall faithfully and diligently carry out,
under the direction of the Chief Executive Officer, such duties and have such
responsibilities as are customary among persons employed in substantially
similar capacities for similar companies and more specifically those
responsibilities set forth in Exhibit B, attached hereto and
incorporated into this Agreement. Employee agrees to the best of his ability
and experience to perform loyally and conscientiously all of the duties and
obligations required of him either expressly or implicitly by the terms of this
Agreement.
c. Location of Employee's employment shall be as is determined
by Employer.
2. TERM OF EMPLOYMENT. Employee's term of employment shall commence
on February 28, 1999 and shall terminate upon the earlier of February 28, 2001,
or as is otherwise specified in accordance with the terms of this Agreement (the
"Term of Employment").
3. COMMITMENT. Except as otherwise provided herein, during the
Employment Period Employee shall devote one hundred (100%) percent of his entire
productive time, ability, and attention to the business of the Employer. Except
as otherwise provided herein, Employee shall not render any services of a
commercial or professional nature to any other person or organization, whether
for compensation or otherwise, without the prior written consent of the Chief
Executive Officer of Employer. However, the expenditure of reasonable amounts
of time for educational, charitable, or professional activities shall not be
deemed a breach of this Agreement if those activities do not materially
interfere with the services required under this Agreement and shall not require
the prior written consent of Employer's Chief Executive Officer.
Notwithstanding the foregoing, this Agreement shall not be interpreted to
prohibit Employee from making passive personal investments or conducting private
business affairs if those activities do not materially interfere with the
services required under this Agreement.
4. COMPETITIVE ACTIVITIES.
a. During the Term of Employment, Employee shall not, directly
or indirectly, own an interest in, operate, join, control, or participate in, or
be connected as an officer, employee, agent, independent contractor, partner,
shareholder or principal of any corporation, partnership, proprietorship, firm,
association, person, or other entity producing, designing, providing, soliciting
orders for, selling, distributing, or marketing products, goods, equipment, or
services that compete directly or indirectly with Employer's products and
services or Employer's business, without the written approval of Employer, such
approval not to be unreasonably withheld. Employer may rescind such approval if
and when, in the opinion of Employer, such activities materially inhibit
Employee's performance under this Agreement or place Employer at risk.
b. For one year following his termination as an Employee of or
consultant to Employer, whichever occurs later ("Post-termination Period"),
Employee shall not be prohibited from employment in the mortgage industry
involving activities
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similar to those engaged in prior to becoming Employee, except, however,
Employee shall not undertake any employment or activity competitive with
Employer's business in which the loyal and complete fulfillment of the duties of
the competitive employment or activity would call on Employee to reveal, to make
judgments on, or otherwise to use any confidential business information or trade
secrets of Employer's business to which Employee had access by reason of
Employer's business.
c. During the Term of Employment and the Post-termination
Period, Employee shall not, directly or indirectly, either for himself or for
any other person, firm, or corporation, divert or take away or attempt to divert
or take away (and during the Post termination Period, call on or solicit or
attempt to call on or solicit) any of Employer's customers or patrons, including
but not limited to those on whom he called or whom he solicited or to whom he
catered or with whom he became acquainted while engaged as an Employee of
Employer.
d. During the Term of Employment, Employee shall not undertake
planning for or organization of any business activity competitive with
Employer's business or combine or join with other employees or representatives
of Employer's business for the purpose of organizing any such competitive
business activity.
e. During the Term of Employment and the Post-termination
Period, Employee shall not, directly or indirectly or by action in concert with
others, induce or influence (or seek to induce or influence) any person who is
engaged (as an employee, agent, independent contractor, or otherwise) by
Employer to terminate his or her employment or engagement.
5. COMPENSATION.
As compensation for the services to be rendered by Employee hereunder
during the Term of Employment, Employer shall pay Employee a base annual salary
and the grant of stock options, as is more specifically set forth below:
a. Employee shall be entitled to receive as an annual base
salary the sum of one hundred eighty seven thousand ($187,000.00) dollars ("Base
Salary") prorated during the Term of Employment, payable monthly in accordance
with Employer's customary payroll practices. In addition, Employee shall be
eligible to receive "bonus income", based upon Employee's performance and
Employer's corporate profitability. The payment of Bonus Income shall be at the
discretion of the Employer's Chief Executive Officer and the Board of Directors,
calculated and paid on an annual fiscal year basis.
b. (i) Under the terms of the Prior Agreement, Employee was
granted stock options to purchase, at an exercise price of $ .75 per share, up
to three hundred and
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fifty thousand (350,000) shares of Finet common stock ("Options"), subject to
Employee's full time permanent employment with Employer. The Options vest over
an extended term, in accordance with the provisions of the Finet Holdings
Corporation 1998 Stock Option Plan.
(ii) Concurrently upon the execution of this
Agreement, all conditions precedent to the commencement of the Options vesting
shall have been complied with, so as to provide for inclusion in the Incentive
Stock Option Plan. The Options shall vest 70,000 shares on February 28, 1999,
the first day of full time permanent employment and thereafter, 70,000 shares to
vest at twelve month intervals during the subsequent forty eight months,
conditioned upon Employee's continued employment by Employer ("Vested Options").
For the purpose of this provision, Employee may only exercise Options that are
Vested. The terms and conditions of the Options shall remain subject to and
interpreted in conformity with the Finet Holdings Corporation 1998 Stock Option
Plan, as may be amended from time to time.
6. BENEFITS. In addition to the compensation described in Section 5
above, Employee will be entitled during the Employment Period to the following
benefits:
a. Such health insurance and other benefits that Employer may,
from time to time, make available to Employer's employees.
b. Vacation, sick leave, holidays, and personal time in
accordance with Employer's vacation and absence policies, which Employer may,
from time to time, maintain for employees at Employee's level of employment.
c. Reimbursement of reasonable business expenses, upon
submission of documentation in accordance with Employer's regular expense
policies, for reasonable business expenses incurred on behalf of Employer by
Employee. In addition, during the initial twelve (12) months of the Term of
Employment, Employee shall be paid an allowance of two thousand ($2,000) dollars
per month for travel and accommodation expenses related to his travel between
Employer's offices and Employee's residence in Oregon.
d. Participation in any savings plan, 401(k) plan, profit
sharing plan or pension plan which Employer may from time to time, maintain for
employees at Employee's level of employment, subject to plan eligibility.
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7. CONFIDENTIAL INFORMATION.
a. Employee recognizes that, during the course of his employment
with Employer, he will be exposed to certain nonpublic, confidential
information, the disclosure of which to third parties would cause competitive
injury to Employer. Such confidential information includes but is not limited
to Employer's investment plans or strategies, trade secrets, sources of supply,
customer lists, lists of potential customers, customer or consultant contracts
and the details hereof, pricing policies, operational methods, marketing and
merchandising plans or strategies, business acquisition plans, personnel
acquisition plans, unannounced products and services, research and development
activities, processes, formulas, methods, techniques, technical data, know how,
inventions, designs, financial or accounting data, inventory reports, production
schedules, cost and sales data, strategies, forecasts, and all other information
that is not publicly available pertaining to the business of Employer or any of
its affiliates. Such confidential information is hereinafter referred to as
Confidential Information.
b. Confidential Information shall not include (i) any
information which is or becomes publicly available other than through breach of
this Agreement, or (ii) any information which is or becomes known or available
to Employee on a non confidential basis and not in contravention of applicable
law from a source which is entitled to disclose such information to Employee.
c. Employee agrees that he will not, while he is employed by
Employer, divulge Confidential Information to any person, directly or
indirectly, except to Employer or its officers and agents, or as reasonably
required in connection with his duties on behalf of the Employer. Employee
further agrees not to use, except on behalf of the Employer, any Confidential
Information acquired by Employee during the Employment Period. Employee agrees
that he will not at any time after his employment with Employer has ended,
divulge to any person, directly or indirectly, any Confidential Information.
Employee further agrees that, if his relationship with the Employer is
terminated for any reason, he shall not take with him but will leave with
Employer all records, papers, and computer software and data, and any copies
thereof relating to the Confidential Information (or if such papers, records,
computer software and data, or copies are not on the premises of Employer,
Employee agrees to return such papers, records, and computer software and data
immediately upon his termination). Employee acknowledges that all such papers,
records, computer software and data, or copies thereof are and remain the
property of Employer.
8. VOICE MAIL AND ELECTRONIC MAIL. All voice mail and electronic mail
on Employer's telephone or computer systems are the property of Employer and
shall be non-personal, non-private and non-privileged to Employee, and Employee
shall disclose
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to Employer all codes or passwords necessary for Employer to access such voice
mail or electronic mail.
9. COOPERATION. As a condition of his employment with Employer,
Employee agrees that he will not disrupt, damage, impair, or interfere with the
business of the Employer, such as by interfering with the duties of the
Employer's employees, disrupting relationships with Employer's customers,
agents, representatives, or vendors, or otherwise.
10. TERMINATION.
a. Employee may terminate this Agreement for any reason or for
no reason upon providing Employer thirty (30) days written notice of his
intention to terminate.
b. Employer may terminate this Agreement upon written notice to
Employee prior to its expiration date only for "just cause" or due to the
Employee's death or substantial physical impairment which prevents Employee from
carrying out his duties and responsibilities as set forth of herein. For
purposes of this section, "just cause" is defined as the failure of Employee to
perform his duties and responsibilities as set forth herein to the satisfaction
of Employer or a violation of Section 3., 4., 7., 8., 9., or 11. of this
Agreement, gross insubordination, repeated and material inability or
unwillingness to work effectively with customers and other employees, fraud,
misappropriation of Employer's funds, embezzlement, theft, physical assault on
an Employer's employee, drunkenness on the job, possession or use of narcotics
on Employer's property, willful and material damage to Employer's property,
conviction of a felony, or repeated and material violations of Employer's
policies with regard to attendance.
c. In the event Employee's employment is terminated by Employer
or Employee as provided herein, Employer shall have no further obligation to pay
any compensation to or benefits on behalf of Employee, however all compensation
accrued as of the date of termination shall be paid to Employee within 45 days
of termination.
d. Upon termination of his employment, Employee agrees to
deliver promptly to Employer all records, files, drawings, documents,
specifications, blueprints, letters, notes, reports and computer software, and
all copies thereof, and any and all materials relating to Employer's
Confidential Information that are in his possession or control. At the time of
termination, Employee will have an employee interview wherein Employee will
certify that Employee has returned to Employer all tangible Confidential
Information disclosed to him, and disclose Inventions conceived or developed by
him during the period of employment.
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e. Sections 4., 7., 10., 11., 12., 13., 14., 16., and 17. hereof
shall survive termination of this Agreement.
11. ASSIGNMENT. The rights and liabilities of the parties hereto shall
bind and inure to the benefit of their respective successors, executors and
administrators, as the case may be; provided that, as Employer has specifically
contracted for Employee's services, Employee may not assign or delegate his
obligations under this Agreement either in whole or part without the prior
written consent of Employer. Employer may assign its rights and obligations to
a successor in interest to Employer, provided such successor assumes all
obligations and liabilities hereunder.
12. SEVERABILITY OF PROVISIONS. In the event any provision of this
Agreement is held to be illegal, invalid, or unenforceable under any present or
future law, (a) such provision will be fully severable, (b) this Agreement will
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid, or unenforceable provision or by its severance herefrom,
and (d) in lieu of such illegal, invalid, or unenforceable provision, there will
be added automatically as a part of this Agreement a legal, valid, and
enforceable provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible.
13. INJUNCTIVE RELIEF. Employee acknowledges that the breach of a
covenant contained in Section 4 and/or Section 7. of this Agreement will cause
irreparable damage to Employer, the exact amount of which will be difficult to
ascertain, and that the remedies at law for any such breach will be inadequate.
Accordingly, Employee agrees that if Employee breaches a covenant contained in
Section 4. and/or Section 7. of this Agreement, in addition to any other remedy
that may be available at law or in equity, Employer shall be entitled to
specific performance and injunctive relief, without posting bond or other
security, and without the necessity of proving actual damages.
14. MEDIATION AND ARBITRATION. Initially all claims and controversies
of any kind relating to this Agreement shall be submitted to mediation pursuant
to the services of an established mediation service with the venue of the
mediation being San Francisco, CA. In the event the matter cannot be disposed
of by mediation, all claims and controversies of any kind relating to this
Agreement shall be finally settled by binding arbitration before a single
arbitrator in San Francisco, CA, in accordance with the rules of the American
Arbitration Association. The parties to this Agreement shall be bound by the
decisions in any such arbitration, and judgment upon such arbitration may be
entered by any court of proper jurisdiction. Notwithstanding the applicable
rules of the American Arbitration Association, in accordance with California
Code of Civil Procedure Section 1283.1 (b), the parties agree that depositions
may be taken and discovery obtained in any arbitration proceeding relating to
this Agreement in accordance with California Code of
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Civil Procedure Section 1283.05. Attorney's fees and costs shall be allocated
by agreement in mediation or by the arbitrator in arbitration.
15. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, or mailed by certified mail
(postage prepaid and return receipt requested), or sent by reputable overnight
courier service, to the recipient at the address below indicated:
To Employee: Xxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
To Employer: Chief Executive Officer
Finet Holdings Corporation
0000 Xxxxxx Xxxxxx, #000
Xxxxxx Xxxxx, XX 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent, or if mailed, five (5) days after deposit in an U.S. Postal facility.
16. ENTIRE AGREEMENT: AMENDMENTS AND WAIVERS. This Agreement and any
other agreement or document referred to herein constitute the complete, final
and exclusive statement of the agreement among the parties pertaining to
employment of Employee by Employer and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties. No amendment, supplement, modification, rescission or waiver of this
Agreement shall be binding unless executed in writing by the parties. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
continuing waiver unless otherwise expressly provided. The parties expressly
acknowledge that they have not relied upon any prior agreements, understandings,
negotiations and discussions, whether oral or written.
17. CHOICE OF LAW. The rights and duties of the parties will be
governed by the law of the State of California, excluding any choice of law
rules that would require the application of laws of any other jurisdiction.
18. INSURANCE. Employee shall cooperate at no cost to him with
Employer should Employer wish to purchase key man insurance on Employee's life.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Employer Employee
By: /s/ Xxxx X. Xxxxxx By: /s/Xxxx X. Xxxxxx
----------------------------- ------------------------------
Xxxx X. Xxxxxx Xxxx X. Xxxxxx
Chairman & CEO
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EXHIBIT A
CONSULTING AGREEMENT
This consulting agreement is executed between Finet Holdings Corporation (Finet)
and Xx. Xxxx X.. Xxxxxx (Xxxxxx), as of this 15th day of December, 1998. Terms
are as follows:
1. Xxxxxx shall. provide services to Finet as outlined in Addendum A,
and report to Xxxx X. Xxxxxx. He shall spend on average four days
per week at Finet's Walnut Creek :Office.
2. The term shall be from December 28 through March 28, with one
three-month extension to be granted at the sole discretion of
Finet.
3. Xxxxxx shall provide 40 hours per week of time at a gross monthly
rate of $14,000 and shall be paid on the first and fifteenth of
each month.
4. Finet shall pay reasonable out of pocket transportation and lodging
for Xxxxxx, and no other benefits shall be provided.
5. Finet shall also conditionally grant to Xxxxxx:
a. Stock options of 350,000 total; with 70,000 shares to vest on
the first day of full-time permanent employment with Finet,
with 70,000 additional shares to vest at twelve month
intervals for the next forty eight months. Exercise price
shall be $0.75/share.
These stock grants and options shall only be valid and in effect upon Xxxxxx'x
joining Finet as a full time employee, such decision to be solely at Finet's
discretion and shall be evidenced by a written and signed Employment Agreement.
Accepted and Agreed
/s/ Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
-------------------------------- ----------------------------------
Xxxx X. Xxxxxx Finet Holdings Corporation
Xxxx X. Xxxxxx
Chairman & CEO
FINET
EXHIBIT B
EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER RESPONSIBILITIES
- Build a strong financial team committed to excellence and success
- Financial planning, controls and analysis
- Business modeling, including product line and business unit profitability
- Accounting and public reporting
- SEC reporting and relations
- Strategic planning, budgeting and management reporting
- Treasury functions, including each management, forecasting, and
developing and managing external credit relationships
- Corporate finance strategy & structure, including external investment
banking relationships
- Asset/liability management
- Actively contribute to creating a high performance organization and
achieving business plan goals
- Management of external audit relationships
- Actively participate in overall corporate strategy and policy directions
and decisions
- Member of Operating Committee
