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EXHIBIT 10.48
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT dated as of August 29, 1995, by and between Lomas
Mortgage USA, Inc., a Connecticut corporation (the "Company") and Xxxx Xxxx
("Executive").
WHEREAS, the Company desires to transfer all or substantially all of
its assets to First Nationwide, Inc. or one of its affiliates ("First
Nationwide"); and
WHEREAS, as a material part of the proposed transaction with First
Nationwide, the Company desires Executive's cooperation and best efforts to
transfer to First Nationwide the Company's contract (the "CALPERS CONTRACT")
with the California Public Employees' Retirement System; and
WHEREAS, in exchange for the consideration herein set forth, Executive
is willing to give his best efforts to consummate a transaction whereby First
Nationwide acquires all or substantially all of the assets of the Company,
including the transfer of the CALPERS CONTRACT;
WHEREAS, the Company has issued a certain letter to Executive dated
March 1, 1994 as amended by a letter dated March 31, 1995 (as amended, the
"Employment Protection Letter");
WHEREAS, the Company desires to terminate the employer-employee
relationship between the Company and Executive; and
WHEREAS, the Company and Executive desire to enter into this Agreement
to provide, among other things, for the payment to Executive of certain
severance benefits upon termination of the employer-employee relationship
between the Company and Executive;
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NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and in cancellation and settlement of certain obligations of
the Company set forth herein, the parties agree as follows:
1. Termination. The Company hereby terminates its employment
relationship with Executive. Executive hereby resigns as a director or officer
of the Company and all of its affiliates.
2. Severance Benefit. (a) The Company hereby simultaneously pays
Executive (i) $703,600 (which amount is before all applicable federal, state
and local withholding taxes) in full satisfaction of his 200% severance benefit
pursuant to the Employment Protection Letter, in consideration of Executive's
covenant pursuant to paragraph 3 below, and in consideration of Executive's
release pursuant to Paragraph 2(b) below; (ii) $49,000 representing accrued but
unused vacation and (iii) $72,000 representing accrued but unpaid amounts owing
under the Company's Fiscal 1996 bonus plan. Within five (5) business days
after the date hereof, the Company will pay Executive his accrued wages through
the date of this Agreement.
On or before December 31, 1996, the Company will pay Executive $25,054
representing an enhanced retirement benefit derived by crediting Executive with
additional years of age and service through age 55 under the Lomas Financial
Group Excess Benefit Plan, effective January 1, 1989. Upon payment of any
plan-required employee contributions, the Company will pay Executive an
enhanced retirement benefit under and in accordance with the Company's
Management Security Plan derived by crediting Executive with additional years
of age and service through age 55. The Company will pay Executive the
following amounts (representing
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the unpaid amounts due under the "Deferred Incentive Compensation Agreements")
(as such term is defined in the Employment Protection Letter) on the dates
indicated:
Payment Date Amount
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July 1, 1996 $139,591.77
July 1, 1997 $ 93,061.19
The Company will reimburse Executive, in accordance with current
Company policy, for all necessary and reasonable costs and expenses incurred on
behalf of the Company for the period set forth in paragraph 3 below. The
Company will cause to be paid to Executive Executive's vested interest in the
Company pension plan and the Company 401(k) plan.
(b) Executive hereby releases and shall not be eligible to
participate in the "success bonus" arrangement established by the Compensation
Committee of the Board of Directors of Lomas Financial Corporation for senior
executives of the Company in connection with the sale of all or a substantial
portion of the Company.
(c) Executive will be eligible to participate in the Company's
welfare plans as amended from time to time to include group medical plan, group
life plan and group accidental death and dismemberment plan at the employee
premium rate for twenty-four months subsequent to this Agreement; provided,
however, that Executive's right to such continued participation shall cease if
Executive receives comparable coverage as a result of future employment. In
the event that Executive's participation in any such welfare plan is barred,
the Company shall arrange to provide Executive with benefits substantially
similar to those which Executive would otherwise have been entitled to receive
under such welfare plans from which his continued participation is barred.
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(d) All 40,000 outstanding stock options with an exercise price of
$8.25 granted to Executive shall be fully vested and shall expire August 31,
1997.
(e) Executive hereby releases any rights, if any, and shall not be
eligible to participate in the "Stock Based Incentive Compensation Plan"
arrangement established by the Compensation Committee of the Board of Directors
of Lomas Financial Corporation for senior executives of the Company.
(f) Notwithstanding anything to the contrary contained herein,
Executive does not release any rights he may have under the agreements and/or
documents listed on the attached Exhibit "A" (except to the extent that such
rights would result in a duplication of the amounts expressly made payable as
otherwise provided in this Agreement); provided, however, Executive agrees that
his right to (i) "a lump sum cash payment equal to 200% of his then current
annual base salary" and (ii) an enhanced pension benefit under the Lomas
pension plan pursuant to the Employee Protection Letter is fully satisfied by
the payment described in paragraph 2 above.
(g) Executive expressly acknowledges and agrees that the severance
benefits described in this Paragraph 2 constitute the only benefits to which
Executive is entitled as a result of Executive's severance and that upon
execution of this Agreement by Executive and the Company, the 200% severance
benefit under the Employment Protection Letter shall be fully satisfied.
3. Best Efforts. Executive agrees to use his best efforts for a
period of ninety (90) days to assist in the consummation of a transaction with
First Nationwide whereby it acquires the CALPERS CONTRACT. Any relationship of
Executive to the Company under this paragraph shall that of an independent
contractor.
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4. No Adverse Position. Except as required by law, during the period
from August 31, 1995 through August 31, 2000, Executive shall not directly or
indirectly participate by or on behalf of any person, firm, partnership, joint
venture, association, corporation or other business organization, entity or
enterprise in any pending or threatened action, claim, suit or proceeding which
is or threatens to become adverse to the Company or any business currently
conducted by the Company, by or before any state, Federal, foreign, or other
court or governmental department, commission, board, bureau, agency or
instrumentality, except that Employee may enforce all of his rights under this
Agreement.
5. Confidentiality. Executive shall not disclose or use for
Executive's own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than the Company and any of
its subsidiaries or affiliates, any trade secrets, information, data, or other
confidential information relating to customers, development programs, costs,
marketing, trading, investment, sales activities, promotion, credit and
financial data, manufacturing processes, financing methods, plans, or the
business and affairs of the Company generally, or of any subsidiary or
affiliate of the Company; provided that the foregoing shall not apply to
information which is not unique to the Company or which is generally known to
the industry or the public other than as a result of Executive's breach of this
covenant or which is disclosed to First Nationwide. Any provision of this
Agreement to the contrary notwithstanding, Executive's obligations pursuant to
this Paragraph 5 shall survive any termination of this Agreement.
6. Specific Performance. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of Paragraph 4 or
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Paragraph 5 would be inadequate and, in recognition of this fact, Executive
agrees that, in the event of such a breach or threatened breach, in addition to
any remedies at law, the Company, without posting any bond, shall be entitled
to obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available.
7. Miscellaneous.
(a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
(b) Entire Agreement; Amendments. This Agreement supersedes all
prior agreements between Executive and the Company relating to Executive's
employment and the termination thereof, including, without limitation, the 200%
severance benefit under the Employment Protection Letter; provided, however,
that this Agreement shall not impair any rights or benefits accrued by
Executive under any benefit plan, compensation arrangement or pension, excess
retirement or management security plan of the Company prior to the termination
of his employment, including the items set forth on Exhibit "A". Except as
aforesaid, there are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject
matter herein other than those expressly set forth herein. This Agreement may
not be altered, modified, or amended except by written instrument signed by the
parties hereto.
(c) No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or
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deprive such party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(d) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
(e) Assignment. This Agreement shall not be assignable by Executive
and shall be assignable by the Company only with the consent of Executive which
consent shall not be unreasonably withheld; provided that no such assignment by
the Company shall relieve the Company of any liability hereunder, whether
accrued before or after such assignment.
(f) Arbitration. Any dispute between the parties to this Agreement
arising from or relating to the terms of this Agreement or the retention of
Executive by the Company shall be submitted to arbitration in Dallas, Texas
under the auspices of the American Arbitration Association.
(g) Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the execution page of this Agreement;
provided that all notices to the Company shall be directed to the attention of
the General Counsel of the Lomas Financial Group or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
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(h) In the event that all or any portion of the amounts paid to
Executive pursuant to paragraph 2 above are set aside pursuant to Chapter 5 of
the United States Bankruptcy Code, such claim(s) released by Executive or
satisfied in exchange for payment on such claim(s) shall be revived
automatically, and any release or satisfaction of such claim(s) shall be null
and void.
(i) Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
/s/ XXXX XXXX
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XXXX XXXX
Address: #00 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
LOMAS MORTGAGE USA, INC.
ATTEST: By: /s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
Senior Vice President
/s/ XXXXXX XXXXXXX
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Assistant Secretary
Address: 0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
(SEAL)
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EXHIBIT "A"
1. The Lomas Financial Group Pension Plan as Restated Effective January
1, 1991, dated April 21, 1992, as amended by Amendment No. 1 to the
Lomas Financial Group Pension Plan as Restated Effective January 1,
1991.
2. The Lomas Financial Group Pension Trust dated April 21, 1992.
3. Lomas 401(k) Savings Plan.
4. Lomas Financial Group 401(k) Savings Plan Trust Agreement, effective
April 1, 1993.
5. The Lomas Financial Group Excess Benefit Plan, effective January 1,
1989.
6. Trust under The Lomas Financial Group Excess Benefit Plan, dated April
2, 1993.
7. Management Security Plan of Lomas & Xxxxxxxxx Financial Corporation
and Subsidiary and Affiliated Companies as Restated Effective June 1,
1982, as amended by Amendment No. 1, Management Security Plan of Lomas
& Xxxxxxxxx Financial Corporation and Subsidiary and Affiliated
Companies.
8. Trust under The Lomas Financial Group Management Security Plan, dated
April 2, 1993.
9. Letter dated March 1, 1994 to Xxxx Xxxx from Xxxx Xxx.
10. Letter dated March 31, 1995 from Xxxx Xxxxx to Xxxx Xxxx.
11. Amounts payable to Xxxx Xxxx pursuant to Deferred Incentive
Compensation Agreements.
12. 40,000 stock options.
