SEVERANCE PACKAGE AND RELEASE AGREEMENT
Exhibit 10.1
This
Severance Package and Release Agreement (“Agreement”) is made and entered into
between United PanAm Financial Corporation, United Auto Credit Corporation, and
their officers, directors, shareholders, employees, representatives,
attorneys, agents, affiliates and subsidiaries (hereinafter
collectively referred to as “the Company”) on the one hand, and Xxxxx Xxxxxxxx
(“Xx. Xxxxxxxx”) on the other hand. The purpose of this Agreement is to settle
and compromise any and all disputes and controversies of any nature existing
between the parties, including, but not limited to, any claims arising out of
Xx. Xxxxxxxx’x employment with, and separation from, the Company.
Separation of
Employment. The parties have reached a mutual agreement that
Xx. Xxxxxxxx’x current Employment Agreement, dated July 30, 2007 (“the
Employment Agreement”) and his employment with the Company shall be terminated
by the Company effective April 9, 2009 (“the Separation Date”). Xx.
Xxxxxxxx confirms that he has received all
salary and benefits up to and including the Separation
Date. Specifically, Xx. Xxxxxxxx has been provided with a final
paycheck reflecting payment of his salary through April 9, 2009 in the gross
amount of Six Thousand Six Hundred Seventy-Eight Dollars and Thirty-Six Cents
($6,678.36), less applicable state and federal
withholdings. Xx. Xxxxxxxx has also received payment for all
accrued and unused vacation as of the Separation Date in the gross amount of
Thirty Six Thousand, Ninety-Five Dollars and Thirty-Six Cents ($36,095.36), less
applicable state and federal taxes and withholdings, and a final car allowance
payment in the amount of One Hundred Dollars ($100.00). Xx. Xxxxxxxx
confirms that he has previously submitted any and all outstanding
business-related expenses for reimbursement, except for one outstanding cell
phone xxxx, and has received payment from the Company for such expenses as of
the Separation Date. Regarding this one outstanding cell phone xxxx,
Xx. Xxxxxxxx agrees to submit proper documentation regarding such cell phone
xxxx within thirty (30) days of the execution of this Agreement by
him. This outstanding expense shall be reimbursed in accordance with
the Company’s applicable policies. Xx. Xxxxxxxx shall be provided with
information regarding how to continue his group health insurance pursuant to
COBRA, consistent with the Company’s normal practices. In addition,
within 30 days of the Separation Date, Xx. Xxxxxxxx has the right to exercise
One Hundred Ninety Thousand (190,000) options that have vested of Company common
stock. Xx. Xxxxxxxx has zero (0) shares of restricted Company common
stock that have vested as of the Separation Date. In selling any
shares of Company common stock, Xx. Xxxxxxxx shall be responsible for complying
with Rule 144 of the Securities Act of 1933 for a period of 90 days from the
Separation Date. In addition, Xx. Xxxxxxxx understands that any
purchase or sale of Company common stock made by him for six months prior to the
Separation Date could potentially be matched to a purchase or sale of Company
common stock made by him for six months after the Separation Date pursuant to
Section 16 of the Securities Exchange Act of 1934. Xx. Xxxxxxxx shall
also be responsible for complying with any reporting obligations under Section
16 of the Securities Exchange Act of 1934.
Termination of
Positions. Effective as of the Separation Date, Xx. Xxxxxxxx
has been terminated as an officer, trustee and any other position currently held
at the Company and any subsidiary of the Company.
1. Severance Payment and
Target. After execution of this Agreement and the expiration
of the revocation period provided in Paragraph 13 below, provided
that this Agreement has not been revoked by Xx. Xxxxxxxx, and after
the return of all Company property as described in Paragraph 2 below, the
Company agrees to pay Xx. Xxxxxxxx, pursuant to Paragraph 9.1 of the Employment
Agreement: (1) severance pay equal to twelve (12) months of his
current base salary in the amount of Two Hundred Forty-Eight
Thousand and Sixty-three Dollars ($248,063.00), less applicable state
and federal taxes and withholdings and (2) a prorated Target Bonus through the
Separation Date, in the amount of Twenty-Three Thousand Eight Hundred
and Seventy Six Dollars ($23,876.00), less applicable state and federal taxes
and withholdings.
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2. Return of
Property. Xx. Xxxxxxxx agrees immediately to return to the
Company all property of the Company which he has in his custody or control such
as keys, key cards, passwords, office equipment, forms, manuals, customer files,
personnel files, or other confidential or proprietary materials of the Company;
provided, however, that Xx. Xxxxxxxx shall be permitted to keep the Company’s
laptop (Dell Latitude D620) which he has been using, after the Company has been
provided with the opportunity to remove all Company-related information and
programs from that laptop.
3. Release of Known and Unknown
Claims. In consideration of the payment outlined above and the
further agreements set forth below, and excepting only the obligations created
in this letter Agreement, Xx. Xxxxxxxx hereby agrees unconditionally to release
and discharge United Pan Am Financial Corporation, United Auto Credit
Corporation, their respective current and former officers, directors,
shareholders, employees, representatives, attorneys and agents, as well as their
predecessors, parents, subsidiaries, affiliates, divisions, and successors in
interest, of and from any and all claims, demands, liabilities, suits or damages
of any type or kind, whether known or unknown, including, but not limited to,
any claims or demands arising from or in any way related to Xx. Xxxxxxxx’x
employment with or separation from the Company on or before the date of the
execution of this Agreement. Xx. Xxxxxxxx also hereby releases the
Company from any claims made to recover additional taxes paid under Internal
Revenue Code Section 409A.
This
release specifically includes, without limitation, all claims for wrongful
discharge, breach of express or implied contract, defamation, fraud,
misrepresentation, discrimination, harassment, breach of implied covenant of
good faith and fair dealing, compensatory and/or other relief relating or in any
way connected with the terms, conditions, and benefits of employment,
discrimination based on race, color, sex, religion, national origin, age,
marital status, handicap and medical condition, and/or all claims arising under
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
et seq., the Age
Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit
Protection Act, the California Fair Employment and Housing Act, the California
Labor Code, the Family and Medical Leave Act, the California Family Rights
Act, the Employee Retirement Income Security Act of 1974 (“ERISA”),
and/or violations of any other statutes, rules, regulations or ordinances
whether federal, state or local. This release, however, is not
intended to require Xx. Xxxxxxxx to waive any rights he may have under COBRA or
any rights to indemnification that he may have pursuant to the Company’s by-laws
and applicable law.
The
Company similarly agrees unconditionally to release and discharge Xx. Xxxxxxxx,
his representatives, agents, attorneys, executors, heirs and assigns, of and
from any and all claims, demands, liabilities, suits or damages of any type or
kind, whether known or unknown including, but not limited to, any claims or
demands arising from or in any way related to Xx. Xxxxxxxx’x employment with or
separation from the Company on or before the date of the execution of this
Agreement.
It is
understood and agreed that this release extends to all claims of whatever
nature, known or unknown, and includes all rights under Section 1542 of the
Civil Code of California, which provides as follows:
A general
release does not extend to claims which the creditor does not know or suspect to
exist in his or her favor at the time of executing the release, which if known
by him or her must have materially affected his or her settlement with the
debtor.
Thus,
notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of all claims, the
parties expressly acknowledge that this Agreement also includes in its effect,
without limitation, all claims that the parties do not know or suspect to exist
in their favor at the time of execution hereof, and that this Agreement
contemplates the extinguishment of any and all such
claim(s). Notwithstanding the foregoing, nothing in this Agreement
shall prevent Xx. Xxxxxxxx from filing a charge with any federal, state or
administrative agency, but Xx. Xxxxxxxx agrees not to participate in, and waives
any rights with respect to, any monetary or financial relief arising from any
such proceeding that relates to the matters released by this
Agreement.
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4. No Admission of
Liability. By entering into this Agreement, the Company and
Xx. Xxxxxxxx do not suggest or admit to any liability to each other or that they
violated any law or any duty or obligation to the other party.
5. Confidentiality. Xx. Xxxxxxxx
agrees that neither he nor his agents or representatives will disclose,
disseminate and/or publicize, or cause or permit to be disclosed, disseminated
or publicized, the existence of this Agreement, any of the terms of this
Agreement, or any claims or allegations which he believes could have been made
or asserted against the Company, directly or indirectly, specifically or
generally, to any person, corporation, association or governmental agency or
other entity, or participate, cooperate or assist any person(s) with respect to
any claim they may have against the Company, except: (1) to the
extent necessary to report income to appropriate taxing authorities; (2) to
members of his immediate family; (3) in response to an order of a court of
competent jurisdiction or subpoena issued under the authority thereof; or (4) in
response to any inquiry or subpoena issued by a state or federal governmental
agency; provided, however, that notice of receipt of such judicial order or
subpoena shall be immediately communicated to the Company telephonically, and
confirmed immediately thereafter in writing, so that the Company will have the
opportunity to assert what rights it has to non-disclosure prior to the response
to the order, inquiry or subpoena. Xx. Xxxxxxxx also agree to maintain all
non-public information regarding the Company while at the Company, including but
not limited to, information regarding the Company’s customers, officers,
directors, employees, financial and business information, and internal Company
policies or procedures as strictly confidential and shall not disclose them to
third parties.
In the
event that the Human Resources Department of the Company receives an inquiry
into Xx. Xxxxxxxx’x employment with United Auto Credit Corporation related in
any way to a future employment opportunity for Xx. Xxxxxxxx, the Company will
confirm, in writing, the dates of employment of Xx. Xxxxxxxx, the last position
he held with the Company, and if authorized in writing by Xx. Xxxxxxxx, his last
salary. In addition, the parties have agreed, pursuant to Paragraph
9.4 of the Employment Agreement, that the following statement will be provided
to prospective employers with respect to Xx. Xxxxxxxx’x separation from the
Company: “Xx. Xxxxxxxx has resigned as Executive Vice President and Chief
Marketing Officer of United PanAm Financial Corp. and United Auto Credit
Corporation and any positions held with subsidiaries in order to pursue other
interests. This resignation is not the result of any disagreement with the
Company concerning any matter relating to the Company’s operations, policies, or
practices”. The parties have further agreed that the Company will
provide the following information to the California Employment Development
Department and for purposes of COBRA: “The Company terminated Xx.
Xxxxxxxx for business reasons unrelated to his job performance”. In
return, Xx. Xxxxxxxx will not provide or disclose any information, adverse or
otherwise, regarding matters related to this Agreement or the Company to any
other party or entity he is seeking employment with, nor with any current or
past employees or vendors of the Company.
Any
violation of the confidentiality provision contained in this Agreement by Xx.
Xxxxxxxx shall be considered a material breach of this Agreement.
6. Employee
Contact. At no time shall Xx. Xxxxxxxx contact any employee
who is currently employed by United Auto Credit Corporation or United Pan Am
Financial Corporation during normal business hours for any
reason. Should Xx. Xxxxxxxx maintain personal relationships with
United Auto Credit Corporation or United Pan Am Financial Corporation employees
outside of employment with the Company, Xx. Xxxxxxxx shall at no time discuss
the terms of this Agreement with current employees of the Company.
7. Cooperation. Xx.
Xxxxxxxx agrees to cooperate reasonably with the Company in the prosecution or
defense of all threatened claims or actual litigation in which the Company is or
may become a party, whether now pending or hereafter brought, in which Xx.
Xxxxxxxx has knowledge of relevant facts or issues. This cooperation
may include, but is not limited to, conferring with and assisting the Company in
preparatory work in litigation matters and providing factual information to the
Company.
8. Arbitration. Any and all
disputes, controversies or claims arising under or in any way relating to the
interpretation, application or enforcement of this Agreement, Xx. Xxxxxxxx’x
employment with the Company, any claim for benefits, or his separation of
employment from the Company, including without limitation any claim by him that
he was fraudulently induced to enter into this Agreement, or regarding the
enforceability or interpretation of this Agreement, shall be settled by final
and binding arbitration under the auspices and rules of JAMS or other mutually
agreeable alternative dispute resolution service in accordance with that
service’s rules for the resolution of employment disputes. Any such
arbitration must be filed in Orange, California, and the laws of the State of
California shall control except where federal law governs. The
prevailing party in any such arbitration proceeding shall be entitled to
reasonable costs and attorney’s fees. The award of the arbitrator is
to be final and enforceable in any court of competent jurisdiction.
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9. Waiver and
Modification. The failure to enforce any provision of this
Agreement shall not be construed to be a waiver of such provision or to affect
either the validity of this Agreement or the right of any party to enforce the
Agreement. This Agreement may be modified or amended only by a
written agreement executed by Xx. Xxxxxxxx and a properly authorized
designee of the Board of Directors of the Company.
10. Integration. This
Agreement constitutes a single, integrated written contract expressing the
entire agreement of the parties hereto relative to the subject matter
hereof. No covenants, agreements, representations, or warranties of
any kind whatsoever have been made by any party hereto. All prior
discussions and negotiations have been and are merged and integrated into, and
are superseded by, this Agreement.
11. Severability. In
the event that any provision of this Agreement should be held to be void,
voidable, or unenforceable, the remaining portions hereof shall remain in full
force and effect.
12. Governing Law. This
Agreement shall be construed in accordance with, and be governed by the laws of
the State of California.
13. Right to an Attorney, Time to
Consider, Revocation. Xx. Xxxxxxxx acknowledges and agrees
that he was provided twenty-one (21) days to consider this Agreement and to
consult with counsel and the Company has advised Xx. Xxxxxxxx of his right to do
so. To the extent that Xx. Xxxxxxxx has taken less than twenty-one
(21) days to consider this Agreement, Xx. Xxxxxxxx acknowledges that he has had
sufficient time to consider the Agreement and to consult with counsel and that
he does not desire additional time. This Agreement is revocable by
Xx. Xxxxxxxx for a period of seven (7) calendar days following Xx. Xxxxxxxx’x
execution of this Agreement. The revocation by Xx. Xxxxxxxx of this
Agreement must be by registered letter addressed to the undersigned
representative of the Company, must specifically revoke this Agreement, and must
be received by the Company prior to the eighth (8th) day following the execution
of this Agreement by Xx. Xxxxxxxx. This Agreement becomes effective,
enforceable and irrevocable on the eighth (8th) day following Xx. Xxxxxxxx’x
execution of this Agreement.
PLEASE
READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
UNITED
PANAM FINANCIAL CORPORATION
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/S/ Xxxxx
Xxxxx
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Dated: April
9, 2009
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By: Xxxxx
Xxxxx
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I
have carefully read this Agreement and understand that it contains a release of
known and unknown claims. I acknowledge and agree to all of the terms
and conditions of this Agreement. I further acknowledge that I enter
into this Agreement voluntarily with a full understanding of its
terms.
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/S/ Xxxxx
Xxxxxxxx
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Dated: April
9, 2009
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By: Xxxxx
Xxxxxxxx
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