EMPLOYMENT AGREEMENT EXHIBIT 10.11
THIS EMPLOYMENT AGREEMENT is made effective as of this 8th day of
August, 1997, by and between Imperial Commercial Capital Corporation, a
California corporation ("Employer"), and Xxxxxxx X. Xxxxxxxx, an individual
("Employee"), with reference to the following facts:
R E C I T A L S
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WHEREAS, Employee is knowledgeable of and skillful in Employer's
business, which includes, but is not limited to, originating, purchasing and
selling or securitizing commercial mortgages and performing operations as the
conduit operations for affiliates and/or related entities of Employer as
described in Attachment A hereto (the "Business");
WHEREAS, Employer believes that Employee will be an integral part of
its management and is and will become more knowledgeable of and be in part
responsible for developing the Business;
WHEREAS, Employee possesses extensive management experience and
knowledge regarding the Business, including confidential information concerning
service marketing plans and strategy, business plans and projections and the
formulas and models pertaining thereto, customer needs and peculiarities,
finances, operations, billing methods and customer lists and detailed
information (the "Trade Secrets");
WHEREAS, in order to induce Employer to enter into this Employment
Agreement and to perform its obligations hereunder, Employee agrees not to
compete with Employer or use any Trade Secrets or other confidential and/or
proprietary business information regarding the Business of Employer, its
affiliates and/or related entities (as more specifically described in Attachment
A) to the detriment of Employer during the term of this Agreement and
thereafter;
WHEREAS, Employer desires that Employee be employed as President of
Employer;
WHEREAS, Employee is willing to be employed by Employer and provide
services to Employer and any affiliates or related entities of Employer (as more
fully described in Attachment A) 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 between the parties hereto as follows:
1. Employment, Services, and Duties.
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1.1 Employer hereby employs Employee and Employee hereby accepts such
employment full-time (subject to those exceptions, if any, set forth below) as
President of Employer, with the powers and duties consistent with such position.
Employee agrees to devote one hundred percent (100%) of all working hours to
rendering the services on behalf of Employer and/or its affiliates or related
entities (as described in Attachment A hereto). Employee shall render his
services to Employer by and subject to the instructions and directions of
Employer's Board of Directors to whom Employee shall directly report.
1.2 Employee acknowledges and agrees that Employee will be required
by Employer to devote as much time as reasonably necessary to perform functions
for Employer's related entities and/or affiliates (as set forth in Attachment A)
and that such services are to be performed pursuant to and consistent with
Employee's duties and obligations under this Agreement.
2. Term and Termination.
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2.1 Unless sooner terminated pursuant to Paragraph 2.2 hereof,
Employee's employment shall continue for a period of five (5) years from the
date of this Agreement ("Employment Date") unless extended by the mutual written
agreement of Employer and Employee.
2.2 Employee's employment shall terminate prior to the expiration of
the term set forth in Section 2.1 above upon the happening of any of the
following events:
(a) Voluntary termination by Employee which is not subject to
Section 2.2(h) herein;
(b) Death of Employee;
(c) Dissolution or termination of Employer;
(d) The voluntary or involuntary bankruptcy of Employer;
(e) For cause if any of the following occurs:
(i) Employee is convicted of (or pleads nolo contendere to),
or at any time prior to employment by Employer, has been convicted of (or
pled nolo contendere to) a crime of dishonesty or breach of trust or crime
leading to incarceration of more than ninety (90) days (including, without
limitation, embezzlement or theft from Employer) or the payment of a
penalty or fine of $10,000 or more;
(ii) Employer determines that Employee's performance is not
satisfactory or that Employee has engaged in misconduct, negligence or
neglect in the performance of Employee's duties under this Agreement;
(iii) Employee has materially breached any of the terms of
this Agreement or any other material legal obligation to Employer
including, without limitation, a breach of trust or fiduciary duty owed to
Employer or a material violation of Employer's policies or procedures; or
(iv) Any determination of "cause" as used in this Section
2.2(e) shall be made only in good faith by an affirmative majority vote of
the Board of Directors (not counting Employee, if a director) of the
Employer;
(f) By mutual agreement between Employer and Employee;
(g) Upon the good faith determination of the Board of Directors
of Employer that Employee has become so physically or mentally disabled as
to be incapable of satisfactorily performing his duties hereunder for a
period of ninety (90) consecutive days, such determination based upon a
certificate as to such physical or mental disability issued by a licensed
physician and/or psychiatrist (as the case may be) employed by the
Employer;
(h) Without cause by Employer. Employee may elect by notice to
Employer to treat the following acts or omissions by Employer as a
"termination without cause":
(i) With respect to acts or omissions other than those
specifically stated in this Paragraph (h), if Employer does not
substantially comply with its payment obligations under this Agreement and
such failure is not be corrected within ten (10) business days after
delivery of notice to Employer of the facts upon which Employee basis his
claim of such non-compliance; or
(ii) A charge of material breach by Employer under Section
2.2(e) hereof which is determined by a final judgment made without adequate
basis in law or fact.
2.3 Except as set forth in Sections 4, 5, 6 and 7 herein, in the event
that Employee's employment is terminated pursuant to Sections 2.2(a), (b), (c),
(d), (e), (f) or (g) herein, neither Employer nor Employee shall have any
remaining duties or obligations hereunder, except that Employer shall pay to
Employee, or his representatives, on the date of termination of employment
("Termination Date") the following:
(a) Such compensation as is due pursuant to Section 3.1(a)
herein, prorated through the Termination Date; and
(b) Any expense reimbursements due and owing to Employee as of
the Termination Date.
2.4 Except as set forth in Sections 4, 5, 6 and 7 herein, in the
event that Employee's employment is terminated pursuant to Section 2.2(h)
herein, neither Employer nor Employee shall have any remaining duties or
obligations hereunder, except that Employer shall pay to Employee, or his
representatives, on the Termination Date the following:
(a) All such compensation as is due pursuant to Section 3.1(a)
for a period of one year following the Termination Date;
(b) Any bonus or incentive compensation to which Employee is
entitled as provided for by any plan for the year of termination, prorated
through the Termination Date, provided that, if such bonus or incentive
compensation is discretionary in amount, Employee shall receive a payment
at least equal to the last previous payment made to Employee, if any, for
the previous year prorated to the Termination Date; and
(c) Any expense reimbursements due and owing to Employee as of
the Termination Date.
2.6 This Agreement shall not be terminated by any:
(a) Merger, whether or not Employer is the surviving entity; or
(b) Transfer of all or substantially all of the assets of
Employer.
2.7 In the event of any merger, transfer of assets, dissolution,
liquidation, or consolidation, the surviving corporation or transferee, as the
case may be, shall be bound by and shall have the benefits of this Agreement,
and the Employer shall take all action to ensure that such corporation or
transferee is bound by the provisions of this Agreement.
3. Compensation.
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3.1 As the total consideration for Employee's services rendered
hereunder, Employee shall be entitled to the following:
(a) A salary of One Hundred Twenty Thousand Dollars ($120,000)
per year ("Salary"), payable in equal installments twice monthly on those
days when Employer normally pays its employees. The Salary shall (i) be
subject to an annual review and upward adjustment or no adjustment in the
sole discretion of Employer, and (ii) be adjusted upward by at least the
minimum increase, if any, in the cost of living in an amount obtained by
multiplying the referenced salary (as adjusted, if applicable) by the
percentage by which the level of the Consumer Price Index in the Los
Angeles Metropolitan Area, as provided for the last day of such annual
period by the Bureau of Labor Statistics of the United States Department of
Labor, Bureau of Labor Statistics, Consumer Price Index, Urban Wage Earners
and Clerical Workers, Los Angeles - Long Beach - Anaheim Metropolitan Area,
All Items (1967=100) has increased over its level as of the later of: (A)
the date hereof; or (B) the date of the previous automatic adjustment
pursuant to this Section 3.1(a);
(b) Those bonuses as set forth in Attachment B hereto, said
bonuses, if any, to be paid to Employee as set forth therein;
(c) Reimbursement for reasonable and necessary business and
entertainment expenses incurred by Employee in connection with the
performance of Employee's duties hereunder. In the event that any federal,
state or local government agency or authority determines to disallow any
such expenses which are reimbursed to Employee, Employee agrees, to the
extent that such determination involves the Employee. to reimburse Employer
as follows:
(i) for all costs in disputing such action, including
reasonable attorney's fees; and
(ii) for all taxes and penalties incurred by Employer in
connection with such action.
(d) Employee shall be entitled to four (4) weeks vacation time
each year without loss of compensation. Employee may be absent from his
employment only at such times as Employer shall determine from time to
time. Employee's vacation shall be governed by Employer's usual policies
applicable to all employees;
(e) Employer agrees to provide Employee with insurance coverage
and other benefits available to all employees of Employer under its group
plans; and
(f) Such other benefits as the Board of Directors of Employer, in
its sole discretion, may from time to time provide.
3.2 Employer shall have the right to deduct from the compensation due
to Employee hereunder any and all sums required for social security and
withholding taxes and for any other federal, state, or local tax or charge which
may be in effect or hereafter enacted or required as a charge on the
compensation of Employee.
4. Non-Competition.
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4.1 At all times during Employee's employment hereunder, and for a
period of one (1) year from the date of the termination of Employee's
employment, if Employee's employment is terminated pursuant to Section 2.2(a) or
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2.2(d) hereof, Employee shall not, directly or indirectly, engage or participate
in, prepare or set up, assist or have any interest in any person, partnership,
corporation, firm, association, or other business organization, entity or
enterprise (whether as an employee, officer, director, agent, security holder,
creditor, consultant or otherwise) that engages in any activity in those
geographic areas where Employer conducts the Business, which activity is the
same as, similar to, or competitive with any activity now engaged in by Employer
or its affiliates and/or related entities (see Attachment A) or in any way
relating to the Business.
4.2 Nothing contained in this Agreement shall be deemed to preclude
Employee from purchasing or owning, directly or beneficially, as a passive
investment, less than ten percent (10%) of any class of a publicly traded
securities or any corporation so long as Employee does not actively participate
in or control, directly or indirectly, any investment or other decisions with
respect to such corporation.
5. Confidentiality. Employee shall keep all Trade Secrets and other
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confidential or proprietary information of Employer and its affiliates and/or
related entities and shall use such information only in the course of performing
Employee's duties hereunder. Employee shall maintain in trust all such Trade
Secret or other confidential or proprietary information, as Employer's property,
including, but not limited to, all documents concerning Employer's Business,
including Employee's work papers, telephone directories, customer information
and notes, and any and all copies thereof in Employee's possession or under
Employee's control. Upon cessation of Employee's employment with Employer, for
any reason, or upon request by Employer, Employee shall transfer to Employer all
such documents belonging to Employer, including any and all copies in Employee's
possession or under Employee's control.
6. Injunctive Relief. Employee hereby acknowledges and agrees that it
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would be difficult to fully compensate Employer for damages resulting from a
breach or threatened breach of Sections 4 and 5 of this Agreement and,
accordingly, that Employer shall be entitled to temporary and injunctive relief,
including temporary restraining orders, preliminary injunctions and permanent
injunctions, to enforce such Sections without the necessity of proving actual
damages in connection therewith. This provision with respect to injunctive
relief shall not, however, diminish Employer's right to claim and recover
damages or enforce any other of its legal and/or equitable rights or defenses.
7. Copies of Agreement. Employee authorizes Employer to send a copy of
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this Agreement to any and all future employers which Employee may have, and to
any and all persons, firms, and corporations, with whom Employee may become
affiliated in a business or commercial enterprise, and to inform any and all
such employers, persons, firms or corporations that Employer intends to exercise
its legal rights should Employee breach the terms of this Agreement or should
another party induce a breach on Employee's part.
8. Severable Provisions. The provisions of this Agreement are severable
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and if any one or more provisions is determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable, shall nevertheless be
binding and enforceable.
9. Reference Provision.
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9.1 Each controversy, dispute or claim between the parties arising
out of or relating to this Agreement, which controversy, dispute or claim is not
settled in writing within thirty (30) days after the "Claim Date" (defined as
the date on which a party subject to the Agreement gives written notice to the
other that a controversy, dispute or claim exists), will be settled by binding
arbitration in Orange County, California in accordance with the provisions of
the American Arbitration Association, which shall constitute the exclusive
remedy for the settlement of any controversy, dispute or claim, and the parties
waive their rights to initiate any legal proceedings against each other in any
court or jurisdiction other than the Superior Court of Orange County (the
"Court"). Any decision rendered by the arbitrator and such arbitration will be
final, binding and conclusive and judgment shall be entered pursuant to Code of
Civil Procedure Section 644 in any court in the State of California having
jurisdiction.
9.2 Except as expressly set forth in this Agreement, the arbitrator
shall determine the manner in which the proceeding is conducted, including the
time and place of all hearings, the order of presentation of evidence, and all
other questions that arise with respect to the course of the proceeding. All
proceedings and hearings conducted before the arbitrator, except for trial,
shall be conducted without a court reporter, except that when any party so
requests, a court reporter will be used at any hearing conducted before the
arbitrator. The party making such a request shall have the obligation to arrange
for any pay for the court reporter. The costs of the court reporter shall be
borne equally by the parties.
9.3 The arbitrator shall be required to be determine in all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The arbitrator
shall be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The arbitrator shall issue a single judgement at the
close of the proceeding which shall dispose of all of the claims of the parties
that are the subject of the proceeding. The parties hereto expressly reserve the
right to contest or appeal from the final judgment or any appealable order or
appealable judgement entered by the arbitrator. The parties hereto expressly
reserve the right to findings of fact, conclusions of law, a written statement
of decision, and the right to move for a new trial or a different judgment,
which new trial, if granted, is also to be a proceeding governed under this
provision.
10. Binding Agreement. This Agreement shall inure to the benefit of and
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shall be binding upon Employer, its successors and assigns.
11. Captions. The Section herein captions are inserted only as a matter
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of convenience and reference and in no way define, limit or describe the scope
of this Agreement or the intent of any provisions hereof.
12. Entire Agreement. This Agreement contains the entire agreement of the
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parties relating to the subject matter hereof, and the parties hereto have made
no agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth otherwise herein. This Agreement
supersedes any and all prior agreements, written or oral, with Employer. Any
such prior agreements are hereby terminated and of no further effect and
Employee by the execution hereof agrees that any compensation provided for under
any such prior agreement(s) is specifically superseded and replaced by the
provision of this Agreement. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto and unless such writing
is made by an executive officer of Employer. The parties hereto agree that in no
event shall an oral modification of this Agreement be enforceable or valid.
13. Governing Law. This Agreement is and shall be governed and construed
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in accordance with the laws of the State of California.
14. Notice. All notices and other communications under this Agreement
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shall be in writing (including, without limitation, telegraphic, telex, telecopy
or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered by hand or by a nationally recognized courier service guaranteeing
overnight delivery to a party at the following address (or to such other address
as such party may have specified by notice given to the other party pursuant to
this provision):
If to Employer:
Imperial Commercial Capital Corporation
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Chief Financial Officer
With a copy to:
Freshman, Marantz, Orlanski, Xxxxxx & Xxxxx
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxx Xxxxx-Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Employee:
Xxxxxxx X. Xxxxxxxx
Imperial Commercial Capital Corporation
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
15. Attorney's Fees. In the event that any party shall bring an action or
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proceeding in connection with the performance, breach or interpretation hereof,
then the prevailing party in such action as determined by the court or other
body having jurisdiction shall be entitled to recover from the losing party in
such action, as determined by the court or other body having jurisdiction, all
reasonable costs and expense of litigation or arbitration, including reasonable
attorney's fees, court costs, costs of investigation and other costs reasonably
related to such proceeding.
IN WITNESS WHEREOF, this Agreement is executed as of the day and year first
above written.
"EMPLOYER"
IMPERIAL COMMERCIAL CAPITAL CORPORATION
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
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Name:
Title:
"EMPLOYEE"
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
ATTACHMENT A
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EMPLOYER AFFILIATES AND/OR RELATED ENTITIES
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Employee acknowledges and understands that Employee may be requested by
Employer to devote some or all of Employee's time and effort during the term of
employment pursuant to this Agreement to the businesses of Employer's affiliates
and/or related entities pursuant to certain agreements between and among
Employer and such affiliates and/or related entities. Said affiliates or related
entities include the following:
IMH Commercial Holdings, Inc.
RAI Advisors, LLC
Imperial Credit Mortgage Holdings, Inc.
ICI Funding Corporation
Employees further understands and acknowledges that, pursuant to this
Agreement, Employee may be directed by Employer to provide services to
additional real estate investment trusts or other entities which Employer
establishes or with which Employer affiliates or becomes related and for which
there exists an agreement with Employer or any of the above entities to provide
such services.
Employee understands and acknowledges that Employee's obligations under the
Agreement, including, but not limited to, Employee's duties under Sections 4 and
5 thereof, shall apply and extend to Employee's knowledge of the business of
Employer's affiliates and/or related entities and any Trade Secret or other
confidential or proprietary information relating to same.
Acknowledged and Agreed:
Date: August 8, 1997
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
ATTACHMENT B
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BONUS SCHEDULE
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1. Car Allowance: $5,000 per year
2. Annual Bonus to be determined by the Chief Executive Officer of the
Company.
