SEVERANCE PACKAGE AND RELEASE AGREEMENT
EXHIBIT
10.1
SEVERANCE
PACKAGE AND RELEASE AGREEMENT
This
Severance Package and Release Agreement (“Agreement”) is made and entered into
between United PanAm Financial Corporation, United Auto Credit Corporation,
and
their officers, directors, shareholders, employees, representatives, attorneys,
agents, affiliates and subsidiaries (hereinafter collectively referred to as
“the Company”) and Ray Thousand (“Mr. Thousand”). The purpose of this Agreement
is to settle and compromise any and all disputes and controversies of any nature
existing between the parties, including, but not limited to, any claims arising
out of Mr. Thousand’s employment with, and separation from, the Company.
Separation
of Employment.
The
cessation of Mr. Thousand’s employment with the Company was effective July 25,
2008. Mr. Thousand has received all
salary and benefits up to and including that date. Mr. Thousand has also
received payment for all accrued and unused vacation as of July 25, 2008, less
applicable state and federal taxes and withholdings. Mr. Thousand confirms
that
he has previously submitted any and all outstanding business related expenses
for reimbursement and has received payment from the Company for such expenses.
In addition, within 30 days of July 25, 2008, Mr. Thousand has the right to
exercise One Million One-Hundred Seventy Thousand (1,170,000) options that
have
vested of Company common stock. Mr. Thousand has zero (0) shares of restricted
Company common stock that have vested as of July 25, 2008. In selling any shares
of Company common stock, Mr. Thousand shall be responsible for complying with
Rule 144 of the Securities Act of 1933 for a period of 90 days from July 25,
2008. In addition, Mr. Thousand understands that any purchase or sale of Company
common stock made by him for six months prior to July 25, 2008 could potentially
be matched to a purchase or sale of Company common stock made by him for six
months after July 25, 2008 pursuant to Section 16 of the Securities Exchange
Act
of 1934. Mr. Thousand shall also be responsible for complying with any reporting
obligations under Section 16 of the Securities Exchange Act of
1934.
Termination
of Positions.
Effective as of July 25, 2008, Mr. Thousand has been terminated as an officer,
trustee and any other position currently held at the Company and any subsidiary
of the Company.
Resignation
as Director.
Effective as of July 25, 2008, Mr. Thousand hereby resigns as a director of
the
Company and any subsidiary of the Company. This resignation is not a result
from
any disagreement with the Company concerning any matter relating to the
Company’s operations, policies or practices.
1. Severance
Payment, Target and Discretionary Bonuses, and COBRA
Payments.
After
execution of this Agreement and the expiration of the revocation period provided
in Paragraph 13 below, provided that this Agreement has not been revoked by
Mr.
Thousand, and after the return of all Company property as described in Paragraph
2 below, the Company agrees to pay Mr. Thousand: (1) severance pay in an amount
equivalent to twelve (12) months of his current base salary or Six Hundred
Fifty
Six Thousand and Two Hundred Fifty Dollars ($656,250), less applicable state
and
federal taxes and withholdings and (2) a prorated Target Bonus through the
date
of termination, in the amount of One Hundred Forty-Eight Thousand, Four Hundred
and Sixty-Three Dollars ($148,463), less applicable state and federal taxes
and
withholdings, and (3) a prorated Discretionary Bonus, through the date of
termination, in the amount of Seventy-Four Thousand, Two Hundred and Thirty-Two
Dollars ($74,232). The severance pay, pro-rated Target Bonus and pro-rated
Discretionary Bonus shall be wired to Mr. Thousand’s personal account. The
Company further agrees to pay to the Company’s COBRA Administrator six (6)
months of Mr. Thousand’s COBRA premium payments in the total amount of Three
Thousand, One Hundred Forty-Nine and 58/100 Dollars ($3,149.48). Thereafter,
Mr.
Thousand shall be solely responsible for his COBRA payments should he choose
to
continue such benefits coverage. The Company shall not be providing Mr. Thousand
any separate or additional notice with respect to this COBRA payment
obligation.
2. Return
of Property.
Mr.
Thousand agrees immediately to return to the Company all property of the Company
which he has in his custody or control such as keys, key cards, passwords,
office equipment, forms, manuals, customer files, personnel files, or other
confidential or proprietary materials of the Company.
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3. Release
of Known and Unknown Claims.
In
consideration of the payment outlined above and the further agreements set
forth
below, and excepting only the obligations created in this letter Agreement,
Mr.
Thousand hereby agrees unconditionally to release and discharge United Pan
Am
Financial Corporation, United Auto Credit Corporation, their respective current
and former officers, directors, shareholders, employees, representatives,
attorneys and agents, as well as their predecessors, parents, subsidiaries,
affiliates, divisions, and successors in interest, of and from any and all
claims, demands, liabilities, suits or damages of any type or kind, whether
known or unknown, including, but not limited to, any claims or demands arising
from or in any way related to Mr. Thousand’s employment with or separation from
the Company on or before the date of the execution of this Agreement. Mr.
Thousand also hereby releases the Company from any claims made to recover
additional taxes paid under Internal Revenue Code Section 409A.
This
release specifically includes, without limitation, all claims for wrongful
discharge, breach of express or implied contract, defamation, fraud,
misrepresentation, discrimination, harassment, breach of implied covenant of
good faith and fair dealing, compensatory and/or other relief relating or in
any
way connected with the terms, conditions, and benefits of employment,
discrimination based on race, color, sex, religion, national origin, age,
marital status, handicap and medical condition, and/or all claims arising under
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
et
seq.,
the Age
Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit
Protection Act, the California Fair Employment and Housing Act, the California
Labor Code, the Family and Medical Leave Act, the California Family Rights
Act,
COBRA, the Employee Retirement Income Security Act of 1974 (“ERISA”), and/or
violations of any other statutes, rules, regulations or ordinances whether
federal, state or local.
It
is
understood and agreed that this release extends to all claims of whatever
nature, known or unknown, and includes all rights under Section 1542 of the
Civil Code of California, which provides as follows:
A
general
release does not extend to claims which the creditor does not know or suspect
to
exist in his or her favor at the time of executing the release, which if known
by him or her must have materially affected his or her settlement with the
debtor.
Thus,
notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of all claims, Mr.
Thousand expressly acknowledges that this Agreement also includes in its effect,
without limitation, all claims that Mr. Thousand does not know or suspect to
exist in his favor at the time of execution hereof, and that this Agreement
contemplates the extinguishment of any and all such claim(s). Notwithstanding
the foregoing, nothing in this Agreement shall prevent Mr. Thousand from filing
a charge with any federal, state or administrative agency, but Mr. Thousand
agrees not to participate in, and waives any rights with respect to, any
monetary or financial relief arising from any such proceeding that relates
to
the matters released by this Agreement.
4. No
Admission of Liability.
By
entering into this Agreement, the Company and Mr. Thousand do not suggest or
admit to any liability to each other or that they violated any law or any duty
or obligation to the other party.
5. Confidentiality.
Mr.
Thousand agrees that neither he nor his agents or representatives will disclose,
disseminate and/or publicize, or cause or permit to be disclosed, disseminated
or publicized, the existence of this Agreement, any of the terms of this
Agreement, or any claims or allegations which he believes could have been made
or asserted against the Company, directly or indirectly, specifically or
generally, to any person, corporation, association or governmental agency or
other entity, or participate, cooperate or assist any person(s) with respect
to
any claim they may have against the Company, except: (1) to the extent necessary
to report income to appropriate taxing authorities; (2) to members of his
immediate family; (3) in response to an order of a court of competent
jurisdiction or subpoena issued under the authority thereof; or (4) in response
to any inquiry or subpoena issued by a state or federal governmental agency;
provided, however, that notice of receipt of such judicial order or subpoena
shall be immediately communicated to the Company telephonically, and confirmed
immediately thereafter in writing, so that the Company will have the opportunity
to assert what rights it has to non-disclosure prior to the response to the
order, inquiry or subpoena. Mr. Thousand also agree to maintain all non-public
information regarding the Company while at the Company, including but not
limited to, information regarding the Company’s customers, officers, directors,
employees, financial and business information, and internal Company policies
or
procedures as strictly confidential and shall not disclose them to third
parties.
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In
the
event that the Human Resources Department of the Company receives an inquiry
into Mr. Thousand’s employment with United Auto Credit Corporation related in
any way to a future employment opportunity for Mr. Thousand, the Company will
confirm, in writing, the dates of employment of Mr. Thousand, the last position
he held with the Company, and if authorized in writing by Mr. Thousand, his
last
salary. In addition, the parties have agreed that the following statement will
be provided with respect to Mr. Thousand’s separation from the Company: United
PanAm Financial Corp. will announce the termination of Mr. Thousand as Chief
Executive Officer of United PanAm Financial Corp. and United Auto Credit
Corporation and any positions held with subsidiaries and will announce he has
agreed to resign as a director. In return, Mr. Thousand will not provide or
disclose any information, adverse or otherwise, regarding matters related to
this Agreement or the Company to any other party or entity he is seeking
employment with, nor with any current or past employees or vendors of the
Company.
Any
violation of the confidentiality provision contained in this Agreement by Mr.
Thousand shall be considered a material breach of this Agreement.
7. Employee
Contact. At
no
time shall Mr. Thousand contact any employee who is currently employed by United
Auto Credit Corporation or United Pan Am Financial Corporation during normal
business hours for any reason. Should Mr. Thousand maintain personal
relationships with United Auto Credit Corporation or United Pan Am Financial
Corporation employees outside of employment with the Company, Mr. Thousand
shall
at no time discuss the terms of this Agreement with current employees of the
Company.
8. Arbitration.
Any and
all disputes, controversies or claims arising under or in any way relating
to
the interpretation, application or enforcement of this Agreement, Mr. Thousand’s
employment with the Company, any claim for benefits, or his separation of
employment from the Company, including without limitation any claim by him
that
he was fraudulently induced to enter into this Agreement, or regarding the
enforceability or interpretation of this Agreement, shall be settled by final
and binding arbitration under the auspices and rules of JAMS or other mutually
agreeable alternative dispute resolution service in accordance with that
service’s rules for the resolution of employment disputes. Any such arbitration
must be filed in Orange, California, and the laws of the State of California
shall control except where federal law governs. The prevailing party in any
such
arbitration proceeding shall be entitled to reasonable costs and attorney’s
fees. The award of the arbitrator is to be final and enforceable in any court
of
competent jurisdiction.
9. Waiver
and Modification.
The
failure to enforce any provision of this Agreement shall not be construed to
be
a waiver of such provision or to affect either the validity of this Agreement
or
the right of any party to enforce the Agreement. This Agreement may be modified
or amended only by a written agreement executed by Mr. Thousand and a properly
authorized designee of the Board of Directors of the Company.
10. Integration.
This
Agreement constitutes a single, integrated written contract expressing the
entire agreement of the parties hereto relative to the subject matter hereof.
No
covenants, agreements, representations, or warranties of any kind whatsoever
have been made by any party hereto. All prior discussions and negotiations
have
been and are merged and integrated into, and are superseded by, this
Agreement.
11. Severability.
In the
event that any provision of this Agreement should be held to be void, voidable,
or unenforceable, the remaining portions hereof shall remain in full force
and
effect.
12. Governing
Law.
This
Agreement shall be construed in accordance with, and be governed by the laws
of
the State of California.
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13. Right
to an Attorney, Time to Consider, Revocation.
Mr.
Thousand acknowledges and agrees that he was provided twenty-one (21) days
to
consider this Agreement and to consult with counsel and the Company has advised
Mr. Thousand of his right to do so. To the extent that Mr. Thousand has taken
less than twenty-one (21) days to consider this Agreement, Mr. Thousand
acknowledges that he has had sufficient time to consider the Agreement and
to
consult with counsel and that he does not desire additional time. This Agreement
is revocable by Mr. Thousand for a period of seven (7) calendar days following
Mr. Thousand’s execution of this Agreement. The revocation by Mr. Thousand of
this Agreement must be by registered letter addressed to the undersigned
representative of the Company, must specifically revoke this Agreement, and
must
be received by the Company prior to the eighth (8th) day following the execution
of this Agreement by Mr. Thousand. This Agreement becomes effective, enforceable
and irrevocable on the eighth (8th) day following Mr. Thousand’s execution of
this Agreement.
PLEASE
READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.
UNITED
PANAM FINANCIAL CORPORATION
| /S/ Xxxxx X. Xxxxxxx | Dated: July 29, 2008 | |
|
By:
Xxxxx X. Xxxxxxx
|
I
have carefully read this Agreement and understand that it contains a release
of
known and unknown claims. I acknowledge and agree to all of the terms and
conditions of this Agreement. I further acknowledge that I enter into this
Agreement voluntarily with a full understanding of its
terms.
| /S/ Ray Thousand | Dated: July 29, 2008 | |
|
Ray
Thousand
|
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