EXHIBIT 10.27
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") has been executed as of February 4,
2000 by and between IndyMac Mortgage Holdings, Inc. and IndyMac, Inc. (each of
which is individually and collectively referred to as the "Employer") and
Xxxxxxx X. Xxxx ("Officer").
WITNESSETH:
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WHEREAS, Employer desires to obtain the benefit of continued services of Officer
and Officer desires to continue to render services to Employer and its
affiliates.
WHEREAS, Employer and Officer desire to set forth the terms and conditions of
Officer's employment with Employer and its affiliates under this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained. The parties hereto agree as follows:
1. Term. Employer agrees to employ Officer and Officer agrees to serve
Employer and its affiliates, in accordance with the terms hereof, for a
term beginning on the date first written above and ending on February 5,
2003, unless earlier terminated in accordance with the provisions hereof.
2. Position, Duties and Responsibilities. Employer and Officer hereby agree
that, subject to the provisions of this Agreement, Employer will employ
Officer and Officer will serve as Senior Executive Vice President (or such
other comparable or higher office rank as the Chief Executive Officer may
designate) of Employer or its affiliated companies, as determined by
Employer. Affiliated companies shall include, without limitation, any
direct or indirect subsidiary of Employer in which Employer holds less than
100% but at least a majority of the beneficial interest and voting control
(a "New Public Company"). Employer agrees that Officer's duties hereunder
shall be the usual and customary duties of such office and such further
duties shall not be inconsistent with the provisions of applicable law.
Officer shall have such executive power and authority as shall reasonably
be required to enable him to discharge his duties in the offices which he
may hold. All compensation paid to Officer by Employer or any of its
affiliates shall be aggregated in determining whether Officer has received
the benefits provided for herein, but without prejudice to the allocation
of costs among the entities to which Officer renders services hereunder.
Officer agrees that Employer shall make a determination as to the portion
of the total
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compensation payable to Officer hereunder which shall be allocated to and
deemed paid by Employer for purposes of section 162(m) and related
provisions of the Internal Revenue Code.
3. Scope of this Agreement and Outside Affiliations. During the term of this
Agreement, Officer shall devote his full business time and energy, except
as expressly provided below, to the business, affairs and interests of
Employer and its affiliates, and matters related thereto, and shall use his
best efforts and abilities to promote their respective interests. Officer
agrees that he will diligently endeavor to promote the business, affairs
and interests of Employer and its affiliates and perform services
contemplated hereby, in accordance with the policies established by the
Board, which policies shall be consistent with this Agreement. Officer
agrees to serve without additional remuneration as an officer or director
of one or more (direct or indirect) subsidiaries or affiliates of Employer
as the Board may from time to time request, subject to appropriate
authorization by the affiliate or subsidiary involved and any limitation
under applicable law. Officer's failure to discharge an order or perform a
function because Officer reasonably and in good faith believes such would
violate a law or regulation or be dishonest shall not be deemed a breach by
him of his obligations or duties pursuant to any of the provisions of this
Agreement, including without limitation pursuant to Section 5(c) hereof.
During the course of Officer's employment as a full-time officer hereunder,
Officer shall not, without the consent of the Board, compete, directly or
indirectly, with Employer in the business then conducted by Employer or any of
its affiliates.
Officer may make and manage personal business investments of his choice and
serve in any capacity with any civic, educational or charitable organization, or
any governmental entity or trade association, without seeking or obtaining
approval by the Board, provided such activities and services do not materially
interfere or conflict with the performance of his duties hereunder.
4. Compensation and Benefits.
a. Base Salary. Employer shall pay to Officer a base salary in respect of
the portion of the fiscal year of Employer (a "Fiscal Year") ending
December 31, 2000 at the annual rate of $450,000 (the "Annual Rate").
In respect of the Fiscal Years ending in 2001 and 2002, the
Compensation Committee of the Board (the "Compensation Committee")
may, based upon the recommendation of the chairman of the Compensation
Committee and Board approval and the performance of Officer and
Employer, increase the Annual Rate. While any such increase shall be
at the discretion of the Compensation Committee, it is anticipated
that such increase will be at least an increase of 10% of the
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Annual Rate, but could vary from such percentage in the judgment of
the Compensation Committee.
b. Incentive Compensation. The Employer shall pay to Officer for
each of the Fiscal Years ending during the term of this Agreement
an incentive compensation award in an amount determined pursuant to
the Annual Incentive Plan attached hereto as Appendix A. The terms
of the Annual Incentive Plan shall be determined in the first
quarter of each Fiscal Year during the term of this Agreement, as
mutually agreed upon by Employer and Officer. For the first year of
this Agreement, the maximum incentive compensation award is
$200,000.00. If a new annual incentive plan is not executed by
Employer and Officer for any reason by the end of the first quarter
of the Fiscal Year (or within 90 days of the date of this Agreement
for the year 2000), then the maximum incentive compensation award
for the new Fiscal Year shall be the difference between the Base
Salary and the Guaranteed Minimum Annual Compensation. In order to
be eligible for the incentive compensation award, Officer must
still be employed as of March 31st of the Fiscal Year following the
relevant Fiscal Year. The incentive compensation award shall be
paid no later than thirty (30) days after completion and
publication of the applicable audited financial statements for such
Fiscal Year.
c. Guaranteed Minimum Annual Compensation. For each of the Fiscal
Years ending during the term of this Agreement, Officer shall
receive a guaranteed minimum annual cash compensation of $500,000,
the components of which shall include his base salary for such
Fiscal Year and any incentive compensation award applicable to such
Fiscal Year, provided Officer is still employed by Employer as of
December 31 of such Fiscal Year.
d. Stock Options. Employer shall grant to Officer a stock option
grant of 500,000 shares of the Employer's common stock on February
4, 2000 and 500,000 shares of the Employer's common stock on
February 5, 2001. These stock option grants shall vest equally over
5 years from their respective date of grant.
Officer agrees that any stock options or restricted stock granted
to him under his prior Employment Agreements, or granted separate
from such Employment Agreement(s), shall be subject to the terms of
the 2000 Stock Option Plan except as may be expressly provided
otherwise in this Agreement.
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All stock options and restricted stock granted in accordance with
this Section 4(d): (i) shall be granted pursuant to Employer's
current stock option plan, or such other stock option plan or plans
as may be or come into effect during the term of this Agreement,
(ii) shall have a per share exercise price equal to the fair market
value (as defined in the current Plan or such other plan or plans)
of the common stock at the time of grant, (iii) shall become
exercisable in five equal installments on each of the first five
anniversaries of the date of grant, (iv) shall become immediately
and fully vested in the event of a change in control (as declared
by the Board) or in the event that Officer's employment is
terminated due to death or Disability; (v) in the event that
Officer's employment is terminated through resignation or by
Employer for Cause ("Cause") (as defined in Section 5(c)), shall,
if not then vested, immediately terminate; and (vi) in the event of
a termination by Employer other than for Cause (as defined in
Section 5(c)), or in the event that this Agreement terminates
according to its terms (as provided in Section 5(g)), shall become
immediately and fully vested to the extent that such stock options
or restricted stock would, under the terms of the stock option or
restricted stock award, vest within 12 months of such termination,
and shall give officer the right to exercise such options for a
period of twelve (12) months after such termination (but in no
event later than their expiration date).
Provided however, with respect to unvested stock options and
restricted stock previously issued to Officer prior to the date of
this Employment Agreement, fifty percent (50%) of such stock
options and restricted stock shall immediately vest at the
Termination Date in the event of a termination other than for Cause
(Section 5(c)) or a termination according to its terms (Section
5(g)).
In the event that a New Public Company is formed and Officer is
assigned by the Chief Executive Officer to be employed by that New
Public Company, if such New Public Company is traded on the New
York Stock Exchange or the NASDAQ, then in the discretion of the
Chief Executive Officer, up to 50% of the not-yet-vested stock
options and restricted stock of Officer (whether previously granted
hereunder or otherwise) may be terminated and replaced with such
alternate incentive compensation (which may include stock options
and/or restricted stock of the New Public Company) as the Chief
Executive Officer may determine in his sole and absolute
discretion, provided such replacement compensation is equivalent to
the value of the replaced stock options and restricted stock. Such
alternate incentive compensation may be granted on such terms and
conditions as determined by the Chief Executive
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Officer, which terms and conditions may differ from those in this
Agreement for comparable compensation, provided such terms and
conditions provide an equivalent value to the replaced
compensation. The Company shall select and retain a nationally
recognized firm to determine the value of the stock options and
restricted stock to be replaced and the value of the replacement
compensation, and such firm's final valuation shall be accepted by
both parties.
e. Additional Benefits. Officer shall also be entitled to all rights
and benefits for which he is otherwise eligible under any bonus
plan, stock purchase plan, participation or extra compensation
plan, executive compensation plan, pension plan, profit-sharing
plan, deferred compensation plan, life and medical insurance
policy, or other plans or benefits, which Employer or its
subsidiaries may provide for him, or provided he is eligible to
participate therein, for senior officers generally or for employees
generally, during the term of this Agreement (collectively,
"Additional Benefits"). This Agreement shall not affect the
provision of any other compensation, retirement or other benefit
program or plan of Employer. If Officer's employment is terminated
hereunder, pursuant to Section 5(a), 5(b) or 5(d), Employer shall
continue for the period specified in Section 5(a), 5(b) or 5(d)
hereof, to provide benefits substantially equivalent to the life,
disability, and medical insurance policies on behalf of Officer and
his dependents and beneficiaries which were being provided to them
immediately prior to Officer's Termination Date, but only to the
extent that Officer is not entitled to comparable benefits from
other employment.
f. Deferral of Amounts Payable Hereunder. In the event Officer should
desire to defer receipt of any cash payments to which he would
otherwise be entitled hereunder, he may present such a written
request to the Compensation Committee which, in its sole
discretion, may enter into a separate deferred compensation
agreement with Officer.
g. Club Memberships. Employer shall pay standard annual and monthly
membership fees and any business related charges for Officer's
participation in the La Canada Flintridge Country Club and such
other memberships as may be approved by the Chief Executive
Officer.
h. Financial Planning Services. Employer shall pay for the financial
planning service of AYCO for Officer, including a full tax gross-up
for any implied income to Officer resulting from such benefit. The
annual amount that Employer shall be required to pay for such
services shall not
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exceed $16,500 for the first year of services, or $10,000 for any
subsequent year of services, exclusive of the tax gross-up.
i. Car Allowance. Employer shall provide Officer with an appropriate
luxury automobile (either a Mercedes E320 or BMW 5 Series of a
comparable cost) for Officer's exclusive use; provided Officer
agrees to maintain such automobile and pay for appropriate
insurance.
5. Termination. The compensation and benefits provided for herein and the
employment of Officer by Employer shall be terminated only as provided
for below in this Section 5:
a. Disability. In the event that Officer shall fail, because of
illness, injury or similar incapacity ("Disability"), to render for
four (4) consecutive months or for shorter periods aggregating
eighty (80) or more business days in any twelve (12) month period,
services contemplated by this Agreement, Officer's full-time
employment hereunder may be terminated, by written Notice of
Termination from Employer to Officer; and thereafter, Employer
shall continue, from the Termination Date until Officer's death or
February 5, 2003, whichever first occurs (the "Disability Payment
Period"), (i) to pay compensation to Officer, in the same manner as
in effect immediately prior to the Termination Date, in an amount
equal to (1) fifty percent (50%) of the then existing base salary
payable immediately prior to the termination, minus (2) the amount
of any cash payments to him under the terms of Employer's
disability insurance or other disability benefit plans or
Employer's tax-qualified Defined Benefit Pension Plan, and any
compensation he may receive pursuant to any other employment, and
(ii) to provide during the Disability Period the benefits specified
in the last sentence of Section 4(e) hereof.
The determination of Disability shall be made only after 30 days
notice to Officer (which may run concurrently with the Notice of
Termination). In order to determine Disability, both employer and
Officer shall have the right to provide medical evidence to support
their respective positions, with the ultimate decision regarding
Disability to be made by a majority of Employer's disinterested
directors.
b. Death. In the event that Officer shall die during the term of this
Agreement, Employer shall pay to such person or persons as Officer
shall have directed in writing or, in the absence of a designation,
to his estate (the "Beneficiary") an amount equal to three times
the guaranteed annual compensation as defined in Section 4(c). Such
payment will be made within 30 days of the death of Officer. If
Officer's death occurs while he is receiving payments for
Disability under Section 5(a) above, such payments shall cease and
the Beneficiary shall be entitled to the
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payments and benefits under this Subsection 5(b). This Agreement in
all other respects will terminate upon the death of Officer;
provided, however, that (i) the termination of the Agreement shall
not affect Officer's entitlement to all other benefits in which he
has become vested or which are otherwise payable in respect of
periods ending prior to its termination, and (ii) to the extent not
otherwise vested, all outstanding stock options granted to Officer
pursuant to Section 4(c) will vest upon his death.
c. Cause. Employer may terminate Officer's employment under this
Agreement for "Cause." A termination for Cause is a termination by
reason of (i) a material breach of this Agreement by Officer (other
than as a result of incapacity due to physical or mental illness)
which is committed in bad faith or without reasonable belief that
such breach is in the best interests of Employer, or (ii) Officer's
conviction by a court of competent jurisdiction of a felony, or
(iii) entry of an order duly issued by any federal or state
regulatory agency having jurisdiction in the matter removing
Officer from office of Employer or its affiliates or permanently
prohibiting him from participation in the conduct of the affairs of
Employer of any of its affiliates. If Officer shall be convicted of
a felony or shall be removed from office and/or temporarily
prohibited from participating in the conduct of Employer's or any
of its affiliates' affairs by any federal or state regulatory
authority having jurisdiction in the matter, Employer's obligations
under Sections 4(a), 4(b), 4(c), 4(d) and 4(f) hereof shall be
automatically suspended; provided, however, that if the charges
resulting in such removal or prohibition are finally dismissed or
if a final judgment on the merits of such charges is issued in
favor of Officer, or if the conviction is overturned on appeal,
then Officer shall be reinstated in full with back pay for the
removal period plus accrued interest at the rate then payable on
judgments. During the period that Employer's obligations under
Sections 4(a), 4(b), 4(c), 4(d) and 4(f) hereof are suspended,
Officer shall continue to be entitled to receive Additional
Benefits under Section 4(e) until the conviction of the felony or
removal from office has become final and non-appealable. When the
conviction of the felony or removal from office has become final
and non-appealable, all of Employer's obligations hereunder shall
terminate; provided, however, that the termination of Officer's
employment pursuant to this Section 5(c) shall not affect Officer's
entitlement to all benefits in which he has become vested or which
are otherwise payable in respect of periods ending prior to his
termination of employment. Following a termination for Cause,
Officer shall be entitled to payment of his base salary through his
last day of
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employment, and any accrued vacation pay, but no other
payments or benefits hereunder or otherwise whatsoever.
d. Termination Other Than For Cause.
(i) Except as provided in Section 5(d)(ii) below, if during the
term of this Agreement, Officer's employment shall be
terminated by Employer other than for Cause, then Officer
shall be entitled to:
(1) payment of his base salary through his last day of
employment, but no payment on account of any further
incentive compensation hereunder; and
(2) within 30 days after such last day, a single payment in an
amount in cash equal to three times the guaranteed minimum
annual compensation as defined in Section 4(c), and
(3) for a period of one year following such last day, the
benefits specified in the last sentence of Section 4(e)
hereof.
(ii) Except as otherwise provided for below, in the event it shall
be determined that any payment or distribution by Employer or
any other person or entity to or for the benefit of Officer
(within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code"), whether paid or
payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise in connection with, or arising
out of, his employment with Employer or a change in ownership
or effective control of Employer or a substantial portion of
its assets (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code (the "Excise Tax"), then,
for the calendar year for which the Officer will be subject to
the Excise Tax, the Employer will pay the Officer an
additional amount of compensation equal to the Excise Tax
(calculated without taking into consideration this additional
compensation). Notwithstanding the foregoing, the Employer and
Officer may agree to reduce, to the extent necessary, the
Payment amount so that no Excise Tax would be imposed. Unless
the Employer and Officer agree otherwise, such reduction shall
be implemented, first, by reducing any non-cash benefits
(other than stock options) to the extent necessary, second, by
reducing any cash benefits to the extent necessary and, third,
by reducing any stock options to
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the extent necessary. In each case, the reductions shall be
made starting with the payment or benefit to be made on the
latest date following the Termination Date and reducing
payments or benefits in reverse chronological order therefrom.
All determinations concerning the application of this
paragraph shall be made by a nationally recognized firm of
independent accountants, selected by Employer, whose
determination shall be conclusive and binding on all parties.
The fees and expenses of such accountants shall be borne by
Employer.
e. Resignation. If during the term of this Agreement, Officer shall
resign voluntarily, Officer shall be entitled to payment of his
base salary through his last day of employment, but all other
rights to payment or benefits hereunder shall immediately
terminate; provided, however, that the termination of Officer's
employment pursuant to this Section 5(e) shall not affect Officer's
entitlement to all benefits in which he has become vested or which
are otherwise payable in respect of periods ending prior to his
termination of employment and all obligations of Officer under
Sections 10(f) and 10(j) shall expressly survive such termination.
If Officer resigns as a result of a material breach by Employer,
which breach is not cured by Employer within 30 days receipt of
written notice, then Officer's resignation will be considered as a
Termination Other Than For Cause pursuant to Section 5(d) for all
purposes under this Agreement.
f. Notice of Termination. Any purported termination by Employer or by
Officer shall be communicated by a written Notice of Termination to
the other party hereto which indicates the specific termination
provision in this Agreement, if any, relied upon and which sets
forth in reasonable detail the facts and circumstances, if any,
claimed to provide a basis for termination of Officer's employment
under the provision so indicated. For purposes of this Agreement,
no such purported termination shall be effective without such
Notice of Termination. The "Termination Date" shall mean the date
specified in the Notice of Termination, which shall be no less than
30 or more than 60 days from the date of the Notice of Termination.
Notwithstanding any other provision of this Agreement, in the event
of any termination of Officer's employment hereunder for any
reason, Employer shall pay Officer his full base salary through the
Termination Date, plus any Additional Benefits which have been
earned or become payable, but which have not yet been paid as of
such Termination Date.
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g. Non-Renewal of Agreement. In the event that this Agreement
terminates according to its terms on February 5, 2003, or February
5, 2005, if the terms of this Agreement are renewed pursuant to
Section 6, and Officer's employment is terminated, such termination
of Officer's employment pursuant to this Section 5(g) shall not
affect Officer's entitlement to all benefits in which he has become
vested or which are otherwise payable with respect to periods
ending on or prior to his termination of employment. Employer shall
also (1) pay Officer in a single payment as soon as practicable
after the termination, but in no event later than thirty (30) days
thereafter, an amount in cash equal to three times the guaranteed
minimum annual compensation as provided in Section 4(c), and (2)
until the first anniversary of the Termination Date, provide the
benefits specified in the last sentence of Section 4(e) hereof.
Upon such termination of Officer's employment, any stock options or
restricted stock granted under this Agreement that were scheduled
to vest within the 12 months following the termination of
employment will immediately vest. Finally, fifty percent (50%) of
any unvested stock options and restricted stock previously issued
to Officer prior to the date of this Employment Agreement will
immediately vest at the termination of employment.
6. Renewal of Agreement. Employer, at its option, may extend the term of this
Agreement for two additional years. Upon such extension, the guaranteed
minimum annual compensation as defined in Section 4(c) would be increased
to $750,000.00. No additional stock options would be granted for such
extension. All other terms of this Agreement would continue.
7. Location of Services. Officer is required to perform his services under
this Agreement at such present or future business location of Company as
may be designated by the Chief Executive Officer in the Counties of Los
Angeles, Orange or Ventura, California or wherever the Corporate
Headquarters of the Employer or the Mortgage Banking Division of
Employer may be located. If Employer requests Officer to relocate outside
of the locations referenced above, Officer shall have the option of
agreeing to such relocation and the terms of this Agreement shall continue
in full force and effect. If Officer declines to relocate, either the
Officer or Employer shall provide the other party with a Notice of
Termination in accordance with Section 5(f) and the Officer will be deemed
to have been terminated pursuant to Section 5(d).
8. Reimbursement of Business Expenses. During the term of this Agreement,
Employer shall reimburse Officer promptly for all business expenditures to
the extent that such expenditures meet the requirements of the Code for
deductibility by Employer for federal income tax purposes or are otherwise
in
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compliance with the rules and policies of Employer and are substantiated
by Officer as required by the Internal Revenue Service and rules and
policies of Employer.
9. Indemnity. To the extent permitted by applicable law, the Certificate of
Incorporation and the By-Laws of Employer (as from time to time in effect)
and any indemnity agreements entered into from time to time between
Employer and Officer, Employer shall indemnify Officer and hold him
harmless for any acts or decisions made by him in good faith while
performing services for Employer, and shall use reasonable efforts to
obtain coverage for him under liability insurance policies now in force or
hereafter obtained during the term of this Agreement covering the other
officers or directors of Employer.
10. Miscellaneous.
a. Successorship. This Agreement shall inure to the benefit of and shall
be binding upon Employer, its successors and assigns, but without the
prior written consent of Officer, this Agreement may not be assigned
other than in connection with a merger or sale of substantially all the
assets of Employer or similar transaction. The failure of any successor
to or assignee of the Employer's business and/or assets in such
transaction to expressly assume all obligations of Employer hereunder
shall be deemed a material breach of this Agreement by Employer.
b. Notices. Any notices provided for in this Agreement shall be sent to
Employer at its corporate headquarters, Attention: General Counsel,
with a copy to the Director of Human Resources at the same address, or
to such other address as Employer may from time to time in writing
designate, and to Officer at such address as he may from time to time
in writing designate (or his business address of record in the absence
of such designation). All notices shall be deemed to have been given
two (2) business days after they have been deposited as certified mail,
return receipt requested, postage paid and properly addressed to the
designated address of the party to receive the notices.
c. Entire Agreement. This instrument contains the entire agreement of the
parties relating to the subject matter hereof, and it replaces and
supersedes any prior agreements between the parties relating to said
subject matter, provided, however, that all provisions of Employer's
Employee Handbook shall be incorporated herein by this reference and
Officer hereby expressly acknowledges that all provisions of the
Employee Handbook are applicable to his employment relationship with
Employer, except to the extent that any such provisions directly
conflict with any term contained in this Agreement; provided, further,
that
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Officer hereby expressly acknowledges that Officer has executed
Employer's standard Arbitration Agreement. No modifications or
amendments of this Agreement shall be valid unless made in writing and
signed by the parties hereto.
d. Waiver. The waiver of the breach of any term or of any condition of
this Agreement shall not be deemed to constitute the waiver of any
other breach of the same or any other term or condition.
e. California Law. This Agreement shall be construed and interpreted in
accordance with the laws of California.
f. Confidentiality. Officer agrees that he will not divulge or otherwise
disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of
Employer or any of its subsidiaries which he may have learned as a
result of his employment during the term of this Agreement or prior
thereto as an employee, officer or director of or consultant to
Employer or any of its subsidiaries, except to the extent such use or
disclosure is (i) necessary or appropriate to the performance of this
Agreement and in furtherance of Employer's best interests, (ii)
required by applicable law or in response to a lawful inquiry from a
governmental or regulatory authority, (iii) lawfully obtainable from
other sources, or (iv) authorized by Employer. The provisions of this
subsection shall survive the expiration, suspension or termination, for
any reason, of this Agreement.
g. Remedies of Employer. Officer acknowledges that the services he is
obligated to render under the provisions of this Agreement are of a
special, unique, unusual, extraordinary and intellectual character,
which gives this Agreement peculiar value to Employer. The loss of
these services cannot be reasonably or adequately compensated in
damages in an action at law and it would be difficult (if not
impossible) to replace these services. By reason thereof, Officer
agrees and consents that if he violates any of the material provisions
of this Agreement, Employer, in addition to any other rights and
remedies available under this Agreement or under applicable law, shall
be entitled during the remainder of the term to seek injunctive relief,
from a tribunal of competent jurisdiction, restraining Officer from
committing or continuing any violation of this Agreement.
h. Severability. If any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect, and if any provision is held invalid
or
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unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other
circumstances.
i. No Obligation to Mitigate. Officer shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking
other employment or otherwise and, except as provided in Section
5(a)(i)(2) hereof, no payment hereunder shall be offset or reduced by
the amount of any compensation or benefits provided to Officer in any
subsequent employment.
j. Covenant Not to Compete
(i) In General. Officer agrees that while he is employed by Employer
during the term of this Agreement and for a period of one year
after the termination of such employment if he voluntarily resigns
or if he is terminated for Cause or Other Than For Cause (the
"Non-Compete Period"), he shall not, within North America:
(1) engage in any business, whether as an employee, consultant,
partner, principal, agent, representative or stockholder
(other than as a stockholder of less than a one percent (1%)
equity interest) or in any other corporate or representative
capacity with any other business whether in corporate,
proprietorship, or partnership form or otherwise, where such
business is engaged in any activity which competes with the
business of Employer (or its subsidiaries or affiliates) as
conducted on the date Officer's employment terminated or
which will compete with any proposed business activity of
Employer (or its subsidiaries or affiliates) in the planning
stage on such date;
(2) solicit business from, or perform services for, any company
or other business entity which at any time during the two-
year period immediately preceding Officer's termination of
employment with Employer was a client of Employer (or its
subsidiaries or affiliates) (including without limitation any
lessee, vendor or supplier); or
(3) solicit for employment, offer, or cause to be offered,
employment, either on a full-time, part-time or consulting
basis, to any person who was employed by Employer (or its
subsidiaries or affiliates) on the date Officer's
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employment terminated, unless Officer shall have received the
prior written consent of Employer.
(ii) Consideration. The consideration for the foregoing covenant not
to compete, the sufficiency of which is hereby acknowledged, is
Employer's agreement to continue to employ Officer and provide
compensation and benefits pursuant to this Agreement, including
but not limited to Section 5(d).
(iii) Equitable Relief and Other Remedies. Officer acknowledges and
agrees that Employer's remedies at law for a breach or threatened
breach of any of the provisions of this Section would be
inadequate and, in recognition of this fact, Officer agrees that,
in the event of such a breach or threatened breach, in addition
to any remedies at law, Employer, without posting any bond, shall
be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then
be available.
(iv) Reformation. If the foregoing covenant not to compete would
otherwise be determined invalid or unenforceable by a court of
competent jurisdiction, such court shall exercise its discretion
in reforming the provisions of this Section to the end that
Officer be subject to a covenant not to compete, reasonable under
the circumstances, enforceable by Employer.
k. Regulatory Intervention. Notwithstanding anything in this Agreement to
the contrary, this Agreement is subject to the following terms and
conditions:
(i) If Officer is suspended and/or temporarily prohibited from
participating in the conduct of Employer's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), Employer's
obligations hereunder shall be suspended as of the date of
service unless stayed by appropriate proceedings. If the charges
in the notice are dismissed, Employer shall (x) pay Officer all
or part of the compensation withheld while Employer's contract
obligations were suspended, and (y) reinstate any of Employer's
obligations which were suspended.
(ii) If Officer is removed and/or permanently prohibited from
participating in the conduct of Employer's affairs by an order
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issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818 (e)(4) and (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.
(iii) If Employer is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1813 (x)(1)), all
obligations under this Agreement shall terminate as of the date
of default, but any vested rights of Officer shall not be
affected.
(iv) All obligations under this Agreement shall be terminated, except
to the extent determined that continuation of the contract is
necessary for the continued operation of Employer, (x) by the
Office of Thrift Supervision ("OTS") at the time the Federal
Deposit Insurance Corporation ("FDIC") 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. 1823 (c)); or (y) by the OTS at the time
the OTS approves a supervisory merger to resolve problems related
to operation of Employer or when Employer is determined by the
OTS to be in an unsafe or unsound condition. Any rights of
Officer that shall have vested under this Agreement shall not be
affected by such action.
(v) With regard to the provisions of this Section 10(i) through (iv):
(1) Employer agrees to use its best efforts to oppose any such
notice of charges as to which there are reasonable defenses;
(2) In the event the notice of charges is dismissed or otherwise
resolved in a manner that will permit Employer to resume its
obligations to pay compensation hereunder, Employer will
promptly make such payment hereunder; and
(3) During the period of suspension, the vested rights of the
contracting parties shall not be affected except to the
extent precluded by such notice.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first a written.
EMPLOYER
By:
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
OFFICER:
-------------------------------
in his individual capacity
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