EXHIBIT 10.32
AMENDMENT
TO EMPLOYMENT AND
NON-COMPETITION AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AND NON-COMPETITION AGREEMENT (the
"Amendment"), is made as of September 1, 1998 by and among Southern Pacific
Bank, a California corporation (the "Employer", as successor employer for
purposes of this Amendment to CoastFed Business Credit Corporation), which is a
wholly-owned subsidiary of Imperial Credit Industries, Inc., a California
corporation ("ICII"), and Xxxxx X. Xxxxxxx, an individual ("Employee"), with
reference to the following facts:
RECITAL
WHEREAS, the parties previously entered into that certain Employment and
Non-Competition Agreement (the "Agreement") dated as of the 18th day of
September 1995 in connection with the purchase by ICII of all of the outstanding
capital stock of CoastFed Business Credit Corporation as of that date; and
WHEREAS, Employee, the President and Chief Operating Officer of Employer's
Coast Business Credit Division, has been instrumental in building a profitable
and growing business, in part due to his business relationships and contacts and
his development of Employer's Trade Secrets (as defined in the Agreement), and
Employer and ICII desire to extend and enhance the term of Employee's retention
in such capacity; and
WHEREAS, Employee is willing to continue his employment by Employer under
the terms and conditions herein stated.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, it is
hereby agreed by and among the parties hereto as follows:
1. The Agreement is amended as follows:
Section 2.1 is amended in its entirety to read:
"2.1 Unless sooner terminated pursuant to paragraph 2.2 hereof, Employee's
employment shall continue until September 1, 2001, unless extended by the mutual
agreement of Employer and Employee (the "Term")."
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Section 3.1(a) is amended in its entirety to read:
"(a) A salary of Three Hundred Thousand Dollars ($300,000) per year
("Salary"), payable in equal installments bi-weekly on those days when Employer
normally pays its employees;"
Section 3.1(b) is amended in its entirety to read:
"(b)(i) An annual incentive bonus in an amount equal to 1.5% of Employer's
Coast Business Credit Division's annual pre-tax profit as determined in
accordance with generally accepted accounting principles consistently applied
("GAAP") prior to payment of bonuses to Employee and Xxxx Xxxxxx and
amortization of goodwill. Payment of said bonus shall be contingent upon the
Coast Business Credit Division's annual net profit equalling or exceeding (i) an
amount equal to 2% of said Division's average assets for the calendar year, not
including goodwill, or (ii) a pre-tax return on capital for the calendar year of
20%, each as determined in accordance with GAAP. For purposes of this Section
3.1(b), the amount of capital assigned to the Division shall be calculated
quarterly for the measurement year in accordance with bank regulatory risk-
adjusted capital guidelines and related Call Report requirements, but in no
event shall be less than that percentage of the Employer's consolidated capital
that the Division's average assets (and related off-balance sheet items)
represent as a percentage of the Employer's average total assets (including its
off-balance sheet exposure) for that year. The Coast Business Credit Division's
cost of funds in making calculations hereunder shall be deemed to be the rate
that Bank of America or its successor announces from time to time as its prime
or reference lending rate as in effect on the first day of each calendar month,
less 2%.
(ii) Effective the date of this Amendment, Employee shall receive a
stock option grant entitling Employee to purchase 50,000 shares of common stock
of Imperial Credit Industries, Inc. pursuant to a separate Stock Option
Agreement to be executed between ICII and Employee. In addition, Employee shall
have the vesting of all previously awarded and outstanding grants of options to
acquire ICII's common stock immediately accelerated, with the result that all of
such existing options (not including the current grant of options to acquire
50,000 shares) may be exercised at any time on or after the date of this
Amendment."
Section 4 is amended in its entirety to read:
"4.1 Non-Competition
---------------
The Employee acknowledges and recognizes the highly competitive nature of
the business of Employer, including all of its divisions and affiliates, as well
as his significant participation in the ownership of the common stock of ICII.
If Employee terminates his employment hereunder, then until the second
anniversary of the Employee's termination of
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employment (such date being hereafter referred to as the "Restricted Date"), the
following shall apply:
(a) The Employee will not directly or indirectly engage (as owner,
stockholder, partner or otherwise, except as a holder of fewer than 5% of the
outstanding shares or other equity interests of a company whose shares or other
equity interests are publicly traded) in any business which competes with the
business of the Employer at the time of the Employee's resignation.
(b) The Employee will not directly or indirectly induce any employee of the
Employer to engage in any activity in which the Employee is prohibited from
engaging by paragraph (a) above or to terminate his employment with the
Employer, and will not directly or indirectly employ or offer employment to any
person who was employed by the Employer unless such person shall have been
terminated without cause or ceased to be employed by the Employer for a period
of at least 12 months.
(c) Except for actions which Employee may take or maintain to enforce or
assert rights hereunder or be compelled to take or maintain pursuant to judicial
or regulatory proceedings, the Employee will not make any statement or take any
action intended to impair the goodwill or the business reputation of the
Employer, or to be otherwise detrimental to the interests of the Employer,
including any action or statement intended, directly or indirectly, to benefit a
competitor of the Employer.
(d) It is expressly understood and agreed that although the Employee and
the Employer consider the restrictions contained in this Section 4.1 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against the Employee, the
provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
4.2 Proprietary Information
-----------------------
Through the Restricted Date, the Employee shall not use for his personal
benefit, or disclose, communicate or divulge to, or use for the direct or
indirect benefit on any person, firm, association or company other than the
Employer, any Proprietary Information. "Proprietary Information" means
information relating to the properties, prospects, products, services or
operations of the Employer or any direct or indirect affiliate thereof that is
not generally known, is proprietary to the Employer or such affiliate and is
made known to the Employee or learned or acquired by the Employee while in the
employ of the Employer,
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including, without limitation, information concerning Trade Secrets of the
Employer, or any of the Employer's affiliates and any improvements relating to
the products of the Employer in accounting, marketing, selling, financing and
other business methods and techniques. However, Proprietary Information shall
not include (A) at the time of disclosure to the Employee such information that
was in the public domain or later entered the public domain other than as a
result of a breach of an obligation herein; or (B) subsequent to disclosure to
the Employee, Employee received such information from a third party under no
obligation to maintain such information in confidence, and the third party came
into possession of such information other than as a result of a breach of an
obligation herein. All materials or articles of information of any kind
furnished to the Employee by the Employer or developed by the Employee in the
course of his employment thereunder are and shall remain the sole property of
the Employer; and if the Employer requests the return of such information at any
time during, upon or after the termination of the Employee's employment
hereunder, the Employee shall immediately deliver the same to the Employer.
4.3. Ownership of Proprietary Information
------------------------------------
The Employee agrees that all Proprietary Information shall be the sole
property of the Employer and its assigns, and the Employer and its assigns shall
be the sole owner of all licenses and other rights in connection with such
Proprietary Information. At all times, until the Restricted Date, the Employee
will keep in the strictest confidence and trust all Proprietary Information and
will not use or disclose such Proprietary Information, or anything relating to
such information, without the prior written consent of the Employer, except as
many be necessary in the ordinary course of performing his duties under this
Agreement.
4.4 Documents and Other Property
----------------------------
All materials or articles of information of any kind furnished to the
Employee in the course of his employment hereunder are and shall remain the sole
property of the Employer; and if the Employer requests the return of such
information at any time during, upon or after the termination of the Employee's
employment hereunder, the Employee shall immediately deliver the same to the
Employer. The Employee will not, without the prior written consent of the
Employer, retain any documents, data or property, or any reproduction thereof of
any description, belonging to the Employer or pertaining to any Proprietary
Information.
4.5 Customer Lists
--------------
The Employee will not during, or for a period of two years after the
termination of, his employment (i) disclose the Employer's customer lists or any
part thereof to any person, firm, corporation, association or other entity for
any reason or purpose whatsoever, (ii) assist in
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obtaining any of the Employer's existing customers for any competing business,
or (iii) encourage any customer to terminate its relationship with the
Employer."
Section 13 is amended in its entirety to read:
"All notices and other communications under the Agreement shall be in
writing, and mailed, telecopied or delivered by hand or by a nationally
recognized courier service to a party at the following address:
If to the Employee: Coast Business Credit
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
If to the Employer: Southern Pacific Bank
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
If to ICII: Imperial Credit Industries, Inc.
Building One, Suite 110
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attn: H. Xxxxx Xxxxxxx
With cc to: Xxxxx X. Xxxxxx
All such notices and communications shall, when mailed, telecopied or
delivered, be effective (i) three days after deposit in the mails, (ii) when
telecopied with telephonic confirmation of receipt, (iii) when delivered by hand
to the addressee or (iv) one day after delivery to the courier service."
2. All other terms, conditions and provisions of the Agreement shall
remain in full force and effect throughout the Term, unless amended in a writing
signed by all parties hereto. All future references to the Agreement shall mean
the Agreement as amended by this Amendment, the parties intending that the
Agreement and the Amendment be read and interpreted as one instrument.
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IN WITNESS WHEREOF, this Amendment is executed as of the day and year first
above written.
Employee: Employer:
SOUTHERN PACIFIC BANK
_____________________________ By:__________________________________________
Xxxxx X. Xxxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: President and Chief Executive Officer
IMPERIAL CREDIT INDUSTRIES, INC.
By:___________________________________________
Name: H. Xxxxx Xxxxxxx
Title: Chairman, President and Chief Executive
Officer
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