EXHIBIT 10.10
FORM OF FOUNDING MANAGERS'
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is effective as of June 1, 1997 between
New Century Financial Corporation, a Delaware corporation (the "Company"), and
_______________ (the "Executive"). In consideration of the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT
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The Company hereby employs Executive and Executive accepts employment with
the Company upon the terms and conditions herein set forth.
1.1 Employment. The Company hereby employs Executive, and Executive
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agrees to serve, as the Company's ____________________________________________
during the term of this Agreement. Executive agrees to perform such duties as
may be assigned to Executive from time to time by the Board of Directors.
Executive agrees to devote substantially his full business time and attention
and best efforts to the affairs of the Company during the term of this
Agreement.
1.2 Term. The term of employment of Executive hereunder will be for the
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period commencing on the date of this Agreement and ending on the earliest of:
(a) December 31, 1999,
(b) The date of termination of Executive's employment in accordance
with Article IV of this Agreement,
(c) The date of Executive's voluntary retirement in accordance with
the Company's plans and policies; or
(d) The date of Executive's death.
Unless this Agreement is terminated pursuant to Paragraphs (b), (c) or (d)
above, the term of this Agreement shall be extended automatically for successive
one year periods, unless and until at least six months written notice is given
by either party requesting termination or renegotiation of this Agreement prior
to any anniversary date.
ARTICLE II
COMPENSATION
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2.1 Base Salary. Effective June 1, 1997 and during the employment of
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Executive, the Company shall pay to the Executive a base salary at the rate of
$256,000 per year (retroactive to January 1, 1997) during 1997, and thereafter
at a rate determined by the Company's Board of Directors (the "Base Salary");
provided, however, that Executive's Base Salary shall be increased
by a minimum of 7.5% per year commencing January 1, 1998. The Base Salary shall
be payable in substantially equal semi-monthly installments.
2.2 Profit Sharing and Bonuses. Executive shall be eligible to
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participate in the Founding Managers Incentive Compensation Plan as established
by the Board of Directors.
2.3 Reimbursement of Expenses. The Executive shall be entitled to receive
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prompt reimbursement of all reasonable expenses incurred by the Executive in
performing services hereunder, including all expenses of travel, car phone,
entertainment and living expenses while away from home on business at the
request of, or in the service of, the Company, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by the Company.
2.4 Automobile Expenses. The Company shall provide Executive with an
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automobile allowance of $500 per month. In addition, the Company shall at
Executive's request enter into a lease agreement to provide an automobile for
Executive's use subject to a reduction in Executive's Base Salary equal to the
amount of all lease and insurance payments. If Executive elects to utilize a
lease agreement, Executive will be responsible for all operating costs of the
vehicle and will provide the Company with records to substantiate the business
use of the vehicle. In such event, the Company will calculate and report an
amount of taxable income to Executive based on Executive's personal use of the
vehicle, such calculation and reporting to be in accordance with applicable IRS
guidelines.
2.5 Benefits. The Executive shall be entitled to participate in and be
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covered by all health, insurance, pension, disability insurance, physical exam
and other employee plans and benefits established by the Company (collectively
referred to herein as the "Company Benefit Plans") on the same terms as are
generally applicable to other senior executives of the Company, subject to
meeting applicable eligibility requirements.
2.6 Vacations and Holidays. During Executive's employment with the
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Company, Executive shall be entitled to an annual vacation leave at full pay,
such vacation to be four weeks in each year of the term hereof or such greater
vacation benefits as may be provided for by the Company's vacation policies
applicable to senior executives. Executive shall be entitled to such holidays
as are established by the Company for all employees.
ARTICLE III
NON-COMPETITION, CONFIDENTIALITY AND NONDISCLOSURE
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3.1 Confidentiality. Executive will not during Executive's employment by
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the Company or thereafter at any time disclose, directly or indirectly, to any
person or entity or use for Executive's own benefit any trade secrets or
confidential information relating to the Company's business operations,
marketing data, business plans, strategies, employees, negotiations and
contracts with other companies, or any other subject matter pertaining to the
business of the Company or any of its clients, customers, consultants,
licensees, or affiliates, known, learned, or acquired by Executive during the
period of
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Executive's employment by the Company (collectively "Confidential Information"),
except as may be necessary in the ordinary course of performing Executive's
particular duties as an employee of the Company.
3.2 Return of Confidential Material. Executive shall promptly deliver to
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the Company on termination of Executive's employment with the Company, whether
or not for cause and whatever the reason, or at any time the Company may so
request, all memoranda, notes, records, reports, manuals, drawings, blueprints,
and any other documents of a confidential nature belonging to the Company,
including all copies of such materials which Executive may then possess or have
under Executive's control. Upon termination of Executive's employment by the
Company, Executive shall not take any document, data, or other material of any
nature containing or pertaining to the proprietary information of the Company.
3.3 No Competing Employment. During the term of this Agreement and, if
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Executive terminates this Agreement, for a period ending one year thereafter,
or, if longer, for any period during which Executive receives any compensation
from the Company hereunder (subject to the right of Executive to waive any right
to receive further compensation from the Company) (the "Restricted Period"), the
Executive shall not, unless he receives the prior written consent of the
Company, directly or indirectly own an interest in, manage, operate, join,
control, lend money or render financial assistance to, as an officer, employee,
partner, stockholder, consultant or otherwise, any individual, partnership,
firm, corporation or other business organization or entity that, at such time
directly competes with, or intends to compete with, the Company or its
affiliates in the business of, underwriting, purchasing, securitizing, selling
or servicing subprime credit grade secured loans or any other principal line of
business engaged in by the Company at the time of such termination (a "Competing
Company"). Notwithstanding the foregoing, Executive shall be entitled to own
securities of any entity if such securities are registered under Section 12(b)
or (g) of the Securities Exchange Act of 1934, as amended, and, upon approval of
the Company's Board of Directors, Executive shall be entitled to purchase
securities of a Competing Company entity if such securities are offered to
investors irrespective of any employment or other participation in the entity by
the investor.
3.4 Prohibition on Solicitation of Customers. During the term of
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Executive's employment with the Company and for a period of one year thereafter
or, if longer, for any period during which Executive receives any compensation
from the Company hereunder, Executive shall not, directly or indirectly, either
for Executive or for any other person or entity, solicit any person or entity to
terminate such person's or entity's contractual and/or business relationship
with the Company, nor shall Executive interfere with or disrupt or attempt to
interfere with or disrupt any such relationship.
3.5 Prohibition on Solicitation of the Company's Employees or Independent
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Contractors After Termination. For a period of one year following the
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termination of Executive's employment with the Company or, if longer, for any
period during which Executive receives any compensation from the Company
hereunder, Executive will not directly or indirectly solicit any of the
Company's employees, agents, or independent contractors to leave the employ of
the Company for a competitive company or business.
3.6 Right to Injunctive and Equitable Relief. Executive's obligations not
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to disclose or use Confidential Information and to refrain from the
solicitations described in this Article III
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are of a special and unique character which gives them a peculiar value. The
Company cannot be reasonably or adequately compensated in damages in an action
at law in the event Executive breaches such obligations. Therefore, Executive
expressly agrees that the Company shall be entitled to injunctive and other
equitable relief without bond or other security in the event of such breach in
addition to any other rights or remedies which the Company may possess.
Furthermore, the obligations of Executive and the rights and remedies of the
Company under this Article III are cumulative and in addition to, and not in
lieu of, any obligations, rights, or remedies created by applicable law relating
to misappropriation or theft of trade secrets or confidential information.
3.7 No Violation of Other Agreements. Executive represents that his
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performance of all the terms of this Agreement and as an employee of the Company
does not and will not breach any agreement to (i) not compete or interfere with
the business of a former employer (which term for purposes of this Section 3.7
shall also include persons, firms, corporations and other entities for which
Executive has acted as an independent contractor or consultant), (ii) not
solicit employees, customers or vendors of any former employer or (iii) keep in
confidence proprietary information acquired by Executive in confidence or in
trust prior to Executive's employment with the Company. Executive represents
and warrants to and covenants with the Company that Executive will not bring to
the Company any materials or documents of a former employer containing
confidential or proprietary information that is not generally available to the
public, unless Executive shall have obtained express written authorization from
any such former employer for their possession and use.
ARTICLE IV
TERMINATION
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4.1 Definitions. For purposes of this Article IV, the following
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definitions shall apply to the terms set forth below:
(a) Cause. "Cause" shall be defined as follows:
(i) Executive's conviction of any felony (whether or not
involving the Company) which constitutes a crime of moral
turpitude or which is punishable by imprisonment in a
state or federal correction facility;
(ii) Actions by Executive during the term of this Agreement
involving willful malfeasance or gross negligence;
(iii) Executive's commission of an act of fraud or dishonesty,
whether prior or subsequent to the date hereof, upon the
Company,
(iv) Executive's repeated, willful failure or refusal to
perform his duties as required by this Agreement on an
exclusive and full-time basis; provided that termination
of Executive's employment pursuant to this subparagraph
(iv) shall not constitute valid termination for cause
unless
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Executive shall have first received written notice from
the Board of Directors of the Company stating the nature
of such failure or refusal and affording Executive at
least ten (10) days to correct the act or omission
complained of to the satisfaction of the Board of
Directors;
(v) Executive's willful violation of any reasonable rule or
regulation of the Board of Directors applicable to all
senior executives if such violation is not cured to the
satisfaction of the Board of Directors promptly following
notice to Executive; and
(vi) Any knowing or intentional material misrepresentation made
in connection with the transactions contemplated by that
certain Investment Agreement dated November 21, 1995 to
which the Company is a party.
(b) Disability. "Disability" shall mean a physical or mental
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incapacity as a result of which the Executive becomes unable to continue the
proper performance of his duties hereunder in substantially a full time capacity
(reasonable absences because of sickness for up to six (6) consecutive months
excepted, provided, however, that any new period of incapacity or absences shall
be deemed to be part of a prior period of incapacity or absences if the prior
period terminated within ninety (90) days of the beginning of the new period of
incapacity or absence and the new capacity or absence is determined by the
Company's Board of Directors, in good faith, to be related to the prior
incapacity or absence.) A determination of Disability shall be subject to the
certification of a qualified medical doctor agreed to by the Company and the
Executive or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement between the
Company and the Executive, each party shall nominate a qualified medical doctor
and the two doctors so nominated shall select a third doctor, who shall make the
determination as to Disability.
4.2 Termination by Company. The Company may terminate the Executive's
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employment hereunder immediately for Cause. Subject to the other provisions
contained in this Agreement, the Company may terminate this Agreement for any
reason other than Cause upon 30 days' written notice to Executive.
4.3 Termination by Executive. The Executive may terminate this Agreement
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upon 30 days' written notice to the Company.
4.4 Benefits Received Upon Termination.
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(a) If the Executive's employment is terminated by the Company for
Cause, or if this Agreement is terminated by Executive, then the Company shall
pay the Executive his Base Salary through the effective date of such termination
plus credit for any vacation earned but not taken and the Company shall
thereafter have no further obligations to Executive under this Agreement;
provided, however, that the Company will continue to honor
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any obligations that may have vested or accrued under the existing Company
Benefit Plans or any other Agreements or arrangements applicable to the
Executive.
(b) If the Executive's employment is terminated by the Company without
Cause, then the Company shall:
(i) pay to the Executive within two business days following the
date of termination his Base Salary through the end of the month
during which such termination occurs plus credit for any vacation
earned but not taken;
(ii) pay to the Executive as severance pay (a) the Executive's
Base Salary in effect as of the date of termination, such
payments to be made in accordance with the Company's usual
payroll periods for a minimum of six (6) months or, if longer,
through the expiration of the term of employment then in effect
under this Agreement, without additional renewals as otherwise
provided hereunder, plus (b) an amount equal to the most recent
annual profit sharing and/or incentive bonus received by the
Executive from the Company or, if more, the amount which would be
due under the profit sharing and/or incentive bonus plans
applicable to Executive for the then current year calculated as
of the effective date of termination; such payment to be made in
substantially equal installments in accordance with the Company's
usual payroll periods over such time period as Executive receives
Base Salary payments hereunder;
(iii) maintain, at the Company's expense, in full force and
effect, for the Executive's continued benefit until the earlier
of (i) the expiration of the term of employment then in effect,
or (ii) the Executive's commencement of full time employment with
a new employer, all Company medical insurance and reimbursement
plans and other programs or arrangements in which the Executive
was entitled to participate immediately prior to the date of
termination, provided that the Executive's continued
participation is possible under the general terms and provisions
of such plans and programs. In the event that the Executive's
participation in any such plan or program is barred, the Company
shall arrange to provide the Executive with medical benefits
substantially similar to those which the Executive was entitled
to receive under such plans or programs; and
(iv) pay, for the benefit of Executive, all costs, up to a
maximum of $20,000, related to Executive's participation in a
senior executive outplacement program at Xxx Xxxxx Xxxxxxxx or a
similar outplacement firm.
(c) Termination Because of Employee Disability. Should Executive
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become disabled from performing his duties hereunder as defined above, Executive
acknowledges that his employment may be terminated anytime thereafter if such
disability continues; provided that, during the period of the disability prior
to such termination of employment, Executive shall
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continue to receive all compensation and benefits as if he were actively
employed less any sums received directly by the Executive, if any, under any
policy or policies of disability income insurance purchased by the Company. In
the event of such termination, Executive's rights to receive any salary or
payments under this Agreement shall terminate but Executive shall have the right
to continue to receive any and all payments made by an insurance company under
any and all policies of disability insurance purchased by the Company.
Executive's rights under any Company Benefit Plans will be those rights accorded
to any terminated employee under the plan provisions and applicable law.
Executive will remain entitled to receive any benefits under state disability or
worker's compensation laws.
(d). Any termination for cause hereunder will only be effective if
approved by at least a majority vote of the entire Board of Directors, pursuant
to votes casts in person at a meeting at which Executive shall be entitled to be
present to answer any charges which might be asserted as cause for his
termination.
4.5 Effect of Termination. Upon any termination of this Agreement, for
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any reason, Executive shall be deemed to have immediately resigned as a director
of the Company and all subsidiaries, if applicable, without the giving of any
notice or the taking of any other action.
ARTICLE V
ASSUMPTION OF OBLIGATIONS BY SUCCESSOR TO COMPANY
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5.1 Assumption of Obligations. The Company will require any successor or
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assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Executive,
expressly, absolutely and unconditionally to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place. Any
failure of the Company to obtain such agreement prior to the effectiveness of
any such succession or assignment shall be a material breach of this Agreement.
As used in this Agreement, "Company" shall mean the Company as herein before
defined and any successor or assign to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this Article V or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law. If at any time during the term of this Agreement the
Executive is employed by any corporation a majority of the voting securities of
which is then owned by the Company, "Company" as used in this Agreement shall in
addition include such employer.
5.2 Beneficial Interests. This Agreement shall inure to the benefit of
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and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to
him or her hereunder, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate.
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ARTICLE VI
GENERAL PROVISIONS
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6.1 Notice. For purposes of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Company: New Century Financial Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: President
If to the Executive: ____________________________________
New Century Financial Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
6.2 No Waivers. No provision of this Agreement may be modified, waived or
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discharged unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
6.3 Governing Law. This agreement shall be governed by and construed in
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accordance with the laws of the State of California.
6.4 Severability or Partial Invalidity. The invalidity or
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unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
6.5 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
6.6 Legal Fees and Expenses. Should any party institute any action or
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proceeding to enforce this Agreement or any provision hereof, or for damages by
reason of any alleged breach of this Agreement or of any provision hereof, or
for a declaration of rights hereunder, the prevailing party in any such action
or proceeding shall be entitled to receive from the other party all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
in connection with such action or proceeding.
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6.7 Entire Agreement. This Agreement constitutes the entire agreement of
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the parties and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings, and negotiations between the parties with
respect to the subject matter hereof. This Agreement is intended by the parties
as the final expression of their agreement with respect to such terms as are
included in this Agreement and may not be contradicted by evidence of any prior
or contemporaneous agreement. The parties further intend that this Agreement
constitutes the complete and exclusive statement of its terms and that no
extrinsic evidence may be introduced in any judicial proceeding involving this
Agreement.
6.8 Assignment. This Agreement and the rights, duties, and obligations
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hereunder may not be assigned or delegated by any party without the prior
written consent of the other party and any such attempted assignment and
delegation shall be void and be of no effect. Notwithstanding the foregoing
provisions of this Section 6.8, the Company may assign or delegate its rights,
duties, and obligations hereunder to any person or entity which succeeds to all
or substantially all of the business of the Company through merger,
consolidation, reorganization, or other business combination or by acquisition
of all or substantially all of the assets of the Company; provided that such
person assumes the Company's obligations under this Agreement in accordance with
Section 5. 1.
6.9 Arbitration. Any controversy, dispute, claim or other matter in
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question arising out of or relating to this Agreement shall be settled, at the
request of either party, by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA"),
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof, subject to the following terms, conditions
and exceptions:
(a) Notice of the demand for arbitration shall be filed in writing
with the other party and with the AAA. There shall be a panel of three (3)
arbitrators whose selection shall be made in accordance with the procedures then
existing for the selection of such arbitrators by the AAA.
(b) Reasonable discovery shall be allowed in arbitration.
(c) The costs and fees of the arbitration shall be allocated by the
arbitrators.
6.10 Indemnification. To the extent permitted by law, applicable statutes
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and the Articles of Incorporation, Bylaws or resolutions of the Company in
effect from time to time, the Company shall indemnify Executive against
liability or loss arising out of Executive's actual or asserted misfeasance or
nonfeasance in the performance of Executive's duties or out of any actual or
asserted wrongful act against, or by, the Company including but not limited to
judgments, fines, settlements and expenses incurred in the defense of actions,
proceedings and appeals therefrom. The Company shall endeavor to obtain
Directors and Officers Liability Insurance to indemnify and insure the Company
and Executive from and
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against the aforesaid liabilities. The provisions of this paragraph shall apply
to the estate, executor, administrator, heirs, legatees or devisees of
Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
NEW CENTURY FINANCIAL CORPORATION _________________________________
By: ______________________________ _________________________________
("Executive")
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