1
EXHIBIT 10.170
AMENDMENT NO. 2 TO SEVERANCE AGREEMENT
AND CONSULTING AGREEMENT
It is hereby agreed as of this 18th day of June, 1999, by and between
MEGO FINANCIAL CORP. (the "Company") and XXX X. XXXXXXXX (the "Employee") as
follows:
WHEREAS, the Employee was a senior officer of the Corporation from January, 1988
to December 31, 1998, holding the offices of Executive Vice President, General
Counsel and Secretary during most of that period; and
WHEREAS, the parties hereto previously entered into an agreement dated as of
September 2, 1997 (the "Agreement") which, among other things provided for a
lump sum payment of $250,000 (the "Payment") in the event the Employee's
employment by the Company was terminated for any reason; and
WHEREAS, the parties hereto have previously entered into an indemnification
agreement dated as of September 23, 1998 (the"Indemnification Agreement"); and
WHEREAS, the Employee retired on December 31, 1998 and is no longer employed by
the Company; and
WHEREAS, pursuant to Amendment No. 1 to Severance Agreement, and Consulting
Agreement dated as of December 24, 1998 (the "Amendment No.1") the Company and
the Employee agreed to modify the payment terms of the Payment so as to defer
the payment of a portion thereof, and provided for the possible future services
of Employee as a consultant to the Company; and
WHEREAS, in accordance with the terms of Amendment No. 1 the Company has paid
monthly payments through the date hereof aggregating $60,000, leaving a balance
due on the Payment of $190,000 as of the date hereof, and which amount is
presently scheduled for payment on June 30, 1999; and
WHEREAS, the Company has requested that the Employee agree to further modify the
payment terms of the Payment, to which the Employee is agreeable provided that
the exercise period of the Stock Options held by the Employee, which were
previously granted by the Company, be extended for an additional one year period
ending on December 31, 2000, as more particularly hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, it is agreed as follows:
1. The above recitals are true and correct.
2. Paragraph 2 of the Agreement is hereby amended and restated to read in
full as follows:
"In the event the employment of the Employee in his present capacity
with the Company is terminated for any reason, including but not
limited to the Employee's death, disability, or retirement, the Company
shall pay to the Employee (or his personal representative if the
Employee is deceased) the sum of Two Hundred Fifty Thousand Dollars
($250,000), in full satisfaction of any severance obligations of the
Company, which amount shall be paid as follows:
a. The sum of Ten Thousand Dollars ($10,000) on the first payday
of each month to executive officers of the Company for the
months of January through September, 1999.
b. The balance of One Hundred Sixty Thousand Dollars ($160,000) on
September 30, 1999.
c. In the event the Company executes an agreement involving a
"Change of Control" as hereinafter defined, any unpaid balance
of the Payment shall be immediately paid by the Company to the
Employee at the closing of the transaction, if prior to
September 30, 1999. This sub-paragraph shall not extend the
final payment date of the Payment beyond September 30, 1999.
2
d. The Payment shall be deemed to be in the nature of a
non-qualified pension.
3. As an inducement to the Employee to defer the full payment of the
Payment as set forth above, the Company agrees that it will execute an
amendment of the Stock Options for the purchase of Common Stock of the
Company, presently held by the Employee, extending the exercise period
of such Options until December 31, 2000.
4. Except as modified above, all other terms and conditions of the
Agreement and Amendment No. 1 shall remain in full force and effect.
The indemnification Agreement shall also remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this agreement the date
first above written.
MEGO FINANCIAL CORP. (COMPANY)
By
-----------------------------
Xxxxxx X. Xxxxx, President
XXX X. XXXXXXXX (EMPLOYEE)
----------------------------
