EXHIBIT 10.110
March 15, 2002
Xx. Xxxxxxx Xxxx
0000 X Xxxxxx Xxxxx
Xxx Xxxxxxx, Xx 00000
Re: Employment Agreement
Dear Xx. Xxxx:
This letter agreement and attachments hereto, (collectively the "Agreement") set
forth the terms and conditions of your employment with United PanAm Financial
Corp. and Pan American Bank, FSB ("Employer"). By signing this Agreement, you
will be agreeing to these terms. It is important that you understand clearly
both what your benefits are and what is expected of you by Employer. The
effective date of this Agreement (the "Effective Date") shall be as of
January 1, 2002, and will replace your previous agreement.
1. Term. This Agreement shall have a term of three (3) years, commencing as of
the Effective Date (the "Term"). Where used herein, "Term" shall refer to
the entire period of your employment by Employer from and after the
Effective Date, whether for the period provided above or as extended or
terminated earlier as hereinafter provided.
2. Duties. You shall hold the office of Chairman and Chief Executive Officer
of United PanAm Financial Corp., and Chairman of Pan American Bank, FSB.
You shall perform the duties customarily performed by individuals holding a
similar title with other financial institutions or as otherwise may be
agreed upon by Employer and you from time to time. You shall report
directly to the Board of Directors of Employer. During the Term hereof, you
shall perform the services herein contemplated faithfully, diligently and
to the best of your ability in compliance with instructions and policies of
Employer's Board of Directors, Employer's charter documents and Bylaws and
with all applicable laws and regulations.
3. Compensation.
a) Base Salary. For your service rendered to Employer and its
affiliates, during the Term hereof, Employer shall pay or cause
to be paid a base salary to you at the rate of $150,000 per
December 31, 2002 payable in conformity with Employer's normal
payroll periods and procedures. Your base salary will be reviewed
yearly and adjusted at the Board of Director's discretion.
b) Bonus. In addition to the base salary provided for under Section
3(a) above, the Board of Directors at its discretion may grant
you a bonus. Your bonus shall be payable based on a calendar year
and shall be due within 60 days of the end of each such year. Any
bonus due for any partial year as provided in this Agreement
shall also be paid within 60 days of the end of the calendar year
in which the event giving rise to such partial payment occurs.
c) Automobile Allowance. You shall receive during the Term of this
Agreement an automobile allowance of Two Hundred Dollars ($200)
per month.
d) Options. You will receive the following options on the following
dates at the specified exercise prices and maturities:
250,000 Non-Qualified Options at $11 per share due on
March 31, 2010
250,000 Non-Qualified Options at $15 per share due on
March 31, 2010
250,000 Non-Qualified Options at $20 per share due on
March 31, 2010
4. Other Benefits. During the Term hereof and unless otherwise agreed to
by Employer and you:
a) Vacation. You shall be entitled to a total of four (4) weeks paid
vacation, the amount and term of which shall be determined in
accordance with the policies of Employer as in effect from time
to time.
b) Group Medical, Life Insurance and Other Benefits. You will be
eligible for the medical, dental, vision, life insurance and
long-term disability plans that are generally applicable to your
employment classification.
5. Business Expenses. You shall be entitled to reimbursement by Employer
for any and all ordinary and necessary business expenses reasonably
incurred by you in the performance of your duties and in acting for
Employer during the Term of this Agreement, provided that you furnish
to Employer adequate records and other documentation as may be
required for the substantiation of such expenditures as a business
expense of Employer.
6. Termination.
a) Termination for Cause. Employer may for cause terminate your
employment at any time during the Term of this Agreement. In such
event, all of your rights under this Agreement shall terminate
and you shall have no right to receive compensation, and other
benefits shall cease for any period after the effective date of
such termination for cause. Any bonus compensation otherwise
accrued shall be forfeited. Termination for "cause" shall be
defined as your personal dishonesty, willful misconduct, breach
of fiduciary or duty of loyalty, continuing intentional or
habitual failure to perform stated duties, violation of any law
(other than minor traffic violations or similar misdemeanor
offenses), rule or regulation adopted by the Office of Thrift
Supervision, Federal Deposit Insurance Corporation or other
regulatory agency with jurisdiction over Employer, any judgment,
ruling or decree by any court of competent jurisdiction or
administrative body that precludes or impairs your ability to
perform the services contemplated by this Agreement or any
material breach by you of any provision of this Agreement.
b) Termination Without Cause. Employer may terminate your employment
without cause at any time during the Term of this Agreement. In
the event that Employer terminates your employment without cause,
you shall be entitled to receive as severance compensation an
amount as provided in Exhibit A. The severance payment under this
Section 6(b) shall be provided in a lump sum or, at your
election, in equal monthly
installments for a period not to exceed twelve (12) months from the
date of termination. This payment shall be in lieu of any and all
other compensation due under the agreement unless previously vested or
earned, except the amount of any bonus compensation payable to you
under Section 3(b) hereof, shall be prorated through the date of
termination.
c) Compliance with Law and Regulation. You and Employer expressly
acknowledge and agree that any payments made to you pursuant to this
Agreement or otherwise are subject to and conditioned upon compliance
with 12 U.S.C. Section 1828(k) and any regulations promulgated
thereunder.
d) Suspension and Removal Orders. If you are suspended and/or temporarily
prohibited from participating in the conduct of Employer's affairs by
notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1818 (e)(3) and (g)(1)), the
Employer's obligations under this Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceeding. If the
charges in the notice are dismissed, Employer may in its discretion:
(I) pay you all or part of the compensation withheld while its
obligations under this Agreement were suspended; and (ii) reinstate
(in whole or in part) any of its obligations which were suspended. If
you are removed and/or permanently prohibited from participating in
the conduct of Employer's affairs by an order issued under Section
8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1818(e)(4) or (g)(1)), all obligations of Employer under this
Agreement shall terminate as of the effective date of the order, but
vested rights of the parties shall not be affected.
e) Termination by Default. If Employer is in default (as defined in
Section 3(x)(1) of the Federal Deposit Insurance Action (12 U.S.C.
Section 1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the parties
shall not be affected.
f) Supervisory Assistance or Merger. All obligations under this Agreement
shall be terminated, except to the extent that it is determined that
continuation of the Agreement is necessary for the continued operation
of Employer: (I) by the Director of the Office of Thrift Supervision
(the "Director") or his or her designee, at the time that the Federal
Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of Employer under the authority contained
in Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1823(c)); or (ii) by the Director or his or her designee, at
the time that the Director or his or her designee approves a
supervisory merger to resolve problems related to the operation of
Employer or when Employer is in an unsafe or unsound condition. All
rights of the parties that have already vested, however, shall not be
affected by such action.
g) Disability. In the event that you shall fail, because of illness,
incapacity or injury, to render the services contemplated by this
Agreement for three (3) consecutive calendar months, or for shorter
periods aggregating four (4) months in any twelve (12) month period,
your employment hereunder may be terminated by written notice from
Employer to you. In the event that your employment is terminated under
this Section 6(g), you shall receive the difference between any
disability payments provided through insurance plans offered by
Employer, if any, provided you have enrolled in such plans
and paid the cost thereof, and your base salary as set forth in
Section 3(a) hereof, for six months after notice from Employer, plus
the amount of any bonus compensation payable to you under Section 3(b)
hereof, prorated through the date of termination. Such termination
shall not affect any rights, which you may have pursuant to any
insurance or other death benefit, or any stock option plans, or
options vested thereunder, which rights shall continue to be governed
by the provisions of such plans and arrangements.
h) Death. If your employment is terminated by reason of your death, this
Agreement shall terminate without further obligations of Employer to
you (or your heirs or legal representatives) under this Agreement,
other than for payment of: (i) your base salary (as set forth in
Section 3(a) hereof) through the date of termination; (ii) the amount
of any bonus compensation payable to you under Section 3(b) above,
prorated through the date of termination; (iii) any compensation
previously deferred by you; (iv) any accrued vacation and/.or sick
leave pay; and (v) any amounts due pursuant to the terms of any
applicable welfare benefit plan. All of the foregoing amounts (other
than any prorated bonus compensation) shall be paid to your estate or
beneficiary, as applicable, in a lump sum in cash within thirty (30)
days after the date of termination or earlier as required by
applicable law.
7. Disclosure or Use of Employer's Trade Secrets. During the Term hereof, you
will have access to and become acquainted with what you and Employer
acknowledge are trade secrets or confidential or proprietary information of
Employer (including but not limited to products, employees, practices,
policies or process). You shall not use or disclose any trade secrets,
confidential or proprietary information, directly or indirectly, or cause
them to be used or disclosed in any manner, except as may be required or
requested by Employer, by court order or under applicable law or
regulation. This paragraph shall survive the termination of this agreement.
8. Return of Documents. You expressly agree that all manuals, documents,
files, reports, studies or other materials used and/or developed by you for
Employer during the Term of this Agreement or prior thereto while you were
employed by Employer are solely the property of Employer, and that you have
no right, title or interest therein. Upon termination of this Agreement,
you or your representative shall promptly deliver possession of all such
materials (including any copies thereof) to Employer.
9. Notices. All notices, demands or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered in person,
or sent by United States mail, certified or registered, with return receipt
requested, if to you, addressed to you at your last residence address as
shown in the records of Employer, and if to Employer, addressed to the
Chairman of Employer at Employer's principal office.
10. Governing Law and Jurisdiction. This Agreement, the legal relations between
the parties and any action instituted by any party arising under or in
connection with this Agreement, shall be governed by and interpreted in
accordance with the laws of the State of California.
11. Arbitration. Any dispute, controversy or claim arising out of or in respect
of this Agreement (or its validity, interpretation or enforcement), the
employment relationship or the subject matter hereof shall at the request
of either party be submitted to and settled by arbitration conducted at a
mutually convenient office of the Judicial Arbitration & Mediation
Services,
Inc. ("JAMS"). Employer and you may agree on a retired judge from the JAMS
panel. If we are unable to agree upon a retired judge, JAMS will provide a
list of three available judges and each party may strike one. If two of the
three judges are stricken, the remaining judge will serve as arbitrator. If
two arbitrators remain, the first judge listed shall serve as arbitrator.
Employer and you agree that arbitration must be initiated within two years
after the claim breach occurred and that the failure to initiate
arbitration within the two-year period constitutes an absolute bar to the
institution of any new proceedings related to such alleged breach. The
aggrieved party can initiate arbitration by sending written notice of any
intention to arbitrate by registered or certified mail to all parties and
to JAMS. The notice must contain a description of the dispute, the amount
involved and the remedy sought. The prevailing party in such proceeding
will be entitled to the reasonable attorneys' fees and expenses of counsel
and costs incurred by reason of such arbitration.
12. Benefit of Agreement. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that you may not assign any interest in this
Agreement without the prior written consent of Employer.
13. Captions. Captions and paragraph heading used in this Agreement are for
convenience only and shall not be used in interpreting this Agreement.
14. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to your employment by Employer, and it expressly
supersedes any and all other agreements, either oral or written, relating
thereto.
15. Severability. Should any provision of this Agreement for any reason be
declared invalid, void or unenforceable by a court of competent
jurisdiction, the validity and binding effect of any remaining portions of
this Agreement shall remain in full force and effect as if this Agreement
had been executed with such invalid, void or unenforceable provisions
eliminated; provided, however, that the remaining provisions still reflect
the intent of the parties to this Agreement.
16. Amendments. This Agreement may not be amended or modified except by a
written agreement signed by you and the President of Employer. This
Agreement and any amendment thereof may be executed in counterparts.
17. Non-Solicitation. You agree that for a period of one year after the
termination of employment you will not, except in the case of termination
pursuant to Section 6(b) hereof, on behalf of the Employee or on behalf of
any other individual, association or entity, call on any of the customers
of Employer for the purpose of soliciting or inducing any of such customers
to acquire (or providing to any of such customers) any product or service
provided by Employer, nor will you in any way, directly or indirectly, as
agent or otherwise, in any other manner solicit, influence or encourage
such customers to take away or to divert or direct their business to you or
any other person or entity by or with which Employee is employed,
associated, affiliated or otherwise related.
18. Employees. Employee agrees that for a period of two years after the
termination of Employee's employment, except in the case of termination
pursuant to Section 6(b) hereof, you will not, directly or indirectly,
disrupt, damage, impair, or interfere with Employer's business by
soliciting, influencing, encouraging or recruiting any employee of Employer
to work for you or any other person or entity.
We look forward to your continued successful association with us. In order
to confirm your agreement with and acceptance of the terms and conditions set
forth above, please sign and date one copy of this Agreement where indicated
below and return it to my office. The other copy is for your records.
Very truly yours,
/s/ Ray Thousand /s/ Xxxx Xxxxxx
Xxx Thousand Xxxx Xxxxxx
President of United PanAm Financial Corp. Chairman, Compensation Committee
President of Pan American Bank United PanAm Financial Corp
I agree to the terms of employment set forth in this Agreement subject to
approval of the Board of Directors of Pan American Bank.
/s/ Xxxxxxx Xxxx 3/21/02
-------------------------------- -------------------
Employee Date
EXHIBIT A
Severance Compensation
Upon Termination Without Cause
Pursuant to 6(b)
If termination occurs during the first two years of the Term, the payment shall
be equal to twelve (12) months salary at the then current base salary, plus
prorated bonus through the date of termination.
If termination occurs in the third year, the amount paid shall be the actual
amount of base salary remaining to be paid to the end of the Term, plus prorated
bonus through the date of termination.
