Exhibit 10.10
December 8, 2000
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
("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, 2000, and will replace your
previous agreement.
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 and Chief Executive Officer
of Employer, and President and Chief Executive Officer of Employer's
automobile finance subsidiary, United Auto Credit Corporation ("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 Employer and you from time to time. Without limiting the
foregoing, you shall serve as President and Chief Operating Officer of
Employer's parent, United PanAm Financial Corporation ("UPFC") for such
period during the Term as may be requested by Employer, and perform any such
further or additional duties without compensation other than the
compensation provided under this Agreement. You shall report directly to the
Chairman of the Board of Directors of Employer. 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
Employer's Board of Directors, Employer's charter documents and Bylaws and
with all applicable laws and regulations.
3. Compensation.
a) Base Salary. For your service rendered to Employer and it
affiliates, including UACC, during the Term hereof, Employer
shall pay or cause to be paid a base salary to you at the rate of
$200,000 per annum from December 8, 2000 to December 7, 2001,
$220,000 per annum from December 8, 2001 to December 7, 2002 and
$240,000 per
annum from December 8, 2002 to December 7, 2003, payable in
conformity with Employer's normal payroll periods and procedures.
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
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compensation formula establishes certain performance criteria and
volume objectives by which the amount of your bonus compensation,
if any, is to be determined. Your bonus shall be payable based on
a calendar year and shall be due within 60 days of the end of
each such year. Any bonus due for any partial year as provided in
this Agreement shall also be paid within 60 days of the end of
the calendar year in which the event giving rise to such partial
payment occurs.
c) Automobile Allowance. You shall receive during the Term of this
Agreement an automobile allowance of Two Hundred Dollars ($200)
per month.
d) Options. The parties agree that they will negotiate a mutually
acceptable stock option package granting to you the right to
purchase shares once the conversion to a state bank has been
completed.
4. Other Benefits. During the Term hereof and unless otherwise agreed to by
Employer and you:
a) Vacation. You shall be entitled to a total of four (4) 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
Employer.
6. Termination.
a) Termination for Cause. Employer 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. Any bonus compensation otherwise
accrued 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, failure to reach 50%
of pretax quarterly profit in a given quarter (using a quarterly
weight of Q1 22%, Q2 24%, Q3 26% and Q4 28% for the yearly profit
stipulated in Exhibit A) plus all the other conditions stipulated
in Exhibit A, 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 other regulatory agency with
jurisdiction over Employer, 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 Employer 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
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Section 6(b) shall be provided in a lump sum or, at your
election, in equal monthly installments for a period not to
exceed twelve (12) 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 Orders. 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 Employer'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, Employer 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)(1) of the Federal Deposit Insurance Act (12
U.S.C. Section 1818(e)(4) or (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.
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 1813(x)(1)), all obligations under this Agreement
shall terminate as of the date of default, but vested rights of
the parties shall not be affected.
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 as set 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 vested
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 Agreement 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 (other than any
prorated bonus compensation) 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.
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
residence address as shown in the records of Employer, and if to
Employer, addressed to the Chairman 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 you may
agree on a retired judge from the JAMS panel. If we 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 you 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' 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 Chairman of Employer. This
Agreement and any amendment thereof may be executed in counterparts.
17. Non-Solicitation. You agree that for a period of one year after the
termination of employment you will not, except in the case of
termination pursuant to Section 6(b) hereof, 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 you 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 you or any other person 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, you 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 you or any other person or entity.
We look forward to your continued successful association with us. 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 my office. The other copy is for your records.
Very truly yours,
Xxxxxxxxx Xxxx
Chairman of Pan American Bank
I agree to the terms of employment set forth in this Agreement subject to
approval of the Board of Directors of Pan American Bank.
__________________________________ _________________
Employee Date
EXHIBIT A
Bonus Calculations
GOALS
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December 31,
2001
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1. Pre-tax profit - UPFC $ 12,500,000
2. Average monthly auto loan volume for last quarter of year $ 18,500,000
3. Average delinquency of non-mortgage loans(30+ contractual) of less than 2.25%
4. Average net charge-off of non-mortgage loans (charge-offs vs. average
O/S for the period) less than 5.25%
BONUS
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Bonus will be calculated as follows:
Year 1
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25% of base salary if pre-tax profit of $10,700,000_________ is achieved and at
least two of the other three goals are met.
50% of base salary if pre-tax profit of $11,300,000_________ is achieved and all
goals are met.
75% of base salary if pre-tax profit of $11,900,000__________ is achieved and
all goals are met.
100% of base salary if pre-tax profit of $12,500,000__________ is achieved and
all goals are 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 Employer.
Attainment of goals/bonus assumes that there are no material changes in policy
by Employer that might materially affect or limit the Business Plan. If any
material changes in policy are made by Employer, and not concurred in by you,
then goals and bonus calculation will be adjusted accordingly upon mutual
agreement of the parties.
You 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 Agreement. If you are
discharged by Employer for any reasons set forth in Section 6(a) of the
Agreement, your right to a bonus shall be forfeited even if you are 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. If you become entitled to
a bonus for any partial year during the Term by reason of termination of your
employment under Sections 6(b), (g), or (h) of the Agreement, your bonus shall
still be based on the entire calendar year's results and will not be due until
60 days following the end of such year.
EXHIBIT B
Severance Compensation
Upon Termination Without Cause
Pursuant to 6(b)
If termination occurs during the first two years of the Term, the payment shall
be equal to twelve (12) months salary at the then current base salary, plus
prorated bonus through the date of termination.
If termination occurs in the third year, the amount paid shall be the actual
amount of base salary remaining to be paid to the end of the Term, plus prorated
bonus through the date of termination.
