EXHIBIT 10.101
PAN
AMERICAN
--------
BANK, FSB
December 8, 1998
Xx. Xxx X. Thousand
00 Xxxxxx Xxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Re: Employment Agreement
Dear Mr. Thousand:
This letter agreement and attachments hereto, (collectively the "Agreement") set
forth the terms and conditions of your employment with Pan American Bank, FSB
(the "Bank") and its subsidiary, United Auto Credit Corporation ("UACC"), both
of which may be referred to interchangeably hereinafter as "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 December 8, 1998.
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 President of the Bank's automobile
finance subsidiary UACC. 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 the Bank and you from
time to time. 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 the Bank's senior
management, the Bank's Board of Directors, the Bank's Federal Charter and
Bylaws and with all applicable laws and regulations.
3. Compensation.
a) Base Salary. For your service rendered to the Bank or any subsidiary
corporation hereunder, during the Term hereof, the Bank shall pay or
cause to be paid a base salary to you at the rate of $170,000 per
annum from December 8, 1998 to December 7, 1999, $175,000 per annum
from December 8, 1999 to December 7, 2000 and $180,000 per annum from
December 8, 2000 to December 7, 2001, payable in conformity with the
Bank's normal payroll periods and procedures.
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b) Bonus. In addition to the base salary provided for under Section
3(a) above, you shall be entitled to annual bonus compensation in
accordance with the incentive compensation formula set forth in
Exhibit A to this Agreement. Among other things, the incentive
compensation formula establishes certain performance criteria and
sales objectives by which the amount of your bonus compensation, if
any, is to be determined.
c) Automobile Allowance. The Bank shall provide you during the Term of
this Agreement with an automobile allowance of Two Hundred Dollars
($200) per month.
d) Options. Options will vest according to the separate INCENTIVE
OPTION AGREEMENT dated March 25, 1998.
4. Other Benefits. During the Term hereof and unless otherwise agreed to by
the Bank and you:
a) Vacation. You shall be entitled to a total of three (3) 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 the Bank.
6. Termination.
a) Termination for Cause. The Bank's Board 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. Bonus compensation unpaid 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
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other regulatory agency with jurisdiction over the Bank, 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 the Bank terminates your employment without cause, you
shall be entitled to receive as severance compensation an amount as
provided in Exhibit B. 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 six (6) 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 0rders. 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 Bank'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, the Bank 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)(l) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1818(e)(4) or (g)(1)), all obligations of the Bank
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 18133(x)(l)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the parties
shall not be affected.
Xx. Xxx X. Thousand
December 8
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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 asset 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 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 Agreernent 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
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.
Xx. Xxx X. Thousand
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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 address residence as shown in the records of
Employer, and if to Employer, addressed to the President 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 Employee may
agree on a retired judge from the JAMS panel. If they 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 Employee 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'
Xx. Xxx X. Thousand
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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 the Bank. This Agreement and any amendment thereof may be
executed in counterparts.
17. Non-Solicitation. Employee agrees that for a period of one
year after the termination of employment, except in the case of
a termination pursuant to Section 6(b) hereof, Employee will
not, 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 Employee 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 Employee or any other period 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, Employee
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
Employee or any Employee Related Entity.
Xx. Xxx X. Thousand
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We look forward to your continued successful association with the Bank. 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 the Bank's Human Resources Department. The other copy is
for your records.
Very truly yours,
/s/ Xxxxxxxx X. Grill
Xxxxxxxx X. Grill
President and CEO
I agree to the terms of employment set forth in this Agreement subject to
approval of the Pan American Bank Board of Directors.
/s/ Xxx X. Thousand 1/28/99
____________________ ______________________________
Employee Date
EXHIBIT A
Bonus Calculations
GOALS
-----
December 31,
1999
------------------
Volume for at least one month $10,000,000
Pre-tax profit $ 4,600,000
Average delinquency (30+ contractual) of less than 2.25%
Average net charge-off (charge-offs vs. average O/S for the
period) less than 5.25%
BONUS
-----
Bonus will be calculated as follows:
Year 1
------
25% of base salary if pre-tax profit of $3,450,000 is achieved and all other
goals are essentially met.
50% of base salary if pre-tax profit of $3,680,000 is achieved and all other
goals are essentially met.
75% of base salary if pre-tax profit of $4,140,000 is achieved and all other
goals are essentially met.
100% of base salary if pre-tax profit of $4,600,000 is achieved and all other
goals are essentially met.
The bonus calculation, including the amounts to be used for the goals as set
forth above, shall be mutually agreed upon in years 2 and 3 based on the
approved budget for UACC.
"Pre-tax profit" shall be used upon the amount reflected in the Bank's internal
financial statements for UACC without any allocation for Bank Corporate
overhead, but including Cost of Funds charged by the Bank at 7% and assuming 6
to 1 leverage.
Attainment of goals/bonus assumes that there are no material changes in policy
by the Bank that might materially affect or limit the Auto Finance Division
Business Plan. If any material changes in policy are made by the Bank, and not
concurred in by you, then goals and bonus calculation will be adjusted
accordingly upon mutual agreement of the parties.
Employee must be on the payroll at the end of the calendar year to be eligible
for payment of a bonus regardless of length of service or reason for termination
or resignation unless provided for specifically in the Employment Agreement. If
the Employee is discharged by the Company for "Willful Misconduct" or any other
reasons set forth in paragraph 6(a) of the
Xx. Xxx X. Thousand
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Employment Agreement, any right of the Employee to a bonus shall be forfeited
even if the employee is on the payroll at the end of the calendar year.
Bonus payments will be made within 60 days after the end of the calendar year
allowing for the review of the results of operations.
EXHIBIT B
Severance Compensation
Upon Termination Without Cause
Pursuant to 6(b)
If termination occurs during the first two years of the term of this contract,
the payment shall be equal to twelve (12) months salary at the then current base
salary and prorated bonus.
If termination occurs in the third year, the amount paid shall be the actual
amount of total months base salary remaining to be paid to the end of the term
of the contract and prorated bonus.
