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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
January 1, 1996, by and between PACIFIC UNITED GROUP, INC., a Delaware
corporation (hereinafter referred to as "EMPLOYER") and XXXX X. XXXXXXX
(hereinafter referred to as "XXXXXXX"), on the following terms and conditions:
1. TERM OF AGREEMENT; DUTIES.
(a) Term. EMPLOYER hereby agrees to employ XXXXXXX as
the President and Chief Executive Officer of EMPLOYER, Chief Executive Officer
of Pacific Thrift and Loan Company, Inc., a California corporation ("Pacific
Thrift"), and President and Chief Executive Officer of Pacific Unified
Mortgage, Inc., a Delaware corporation ("PUM"), both of which are operating
subsidiaries of the EMPLOYER, for a three-year term, commencing on the date
hereof, and XXXXXXX hereby agrees to accept such employment for such term,
subject to earlier termination under the circumstances provided herein. The
term of this Agreement shall be extended automatically to cover successive
terms of one year commencing on each anniversary date of the date hereof after
the initial three-year term, unless, at least six months prior to the end of
the initial term or any renewal term hereof, XXXXXXX gives written notice to
the Board of Directors of EMPLOYER (the "Board"), or EMPLOYER gives written
notice to XXXXXXX, of an intent to terminate this Agreement at the end of such
term.
(b) Duties. XXXXXXX, subject to the direction and
control of the Board, shall devote all of XXXXXXX'X productive time, attention
and energies to discharging, and shall perform, such executive duties and
managerial responsibilities as may from time to time be specified by EMPLOYER,
and will use XXXXXXX'X best efforts to promote the interests of EMPLOYER and
its subsidiaries and affiliates. The performance of such duties and
responsibilities shall be XXXXXXX'X exclusive employment for compensation;
provided, however, that nothing herein contained shall be deemed to limit
XXXXXXX'X right, with the consent of the Board, to engage in other activities
that do not interfere with XXXXXXX'X duties hereunder.
2. COMPENSATION.
(a) As compensation for the services to be rendered by XXXXXXX
hereunder during the term of XXXXXXX'X employment, including all services to be
rendered as an officer and executive of EMPLOYER, its subsidiaries and
affiliates, EMPLOYER agrees to pay XXXXXXX a Base Salary as defined and in
accordance with the terms of Section 2 (a) (i) herein, plus a Bonus as defined
and in accordance with the terms of Section 2 (a) (ii) herein:
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(i) During the term of this Agreement, EMPLOYER shall pay
XXXXXXX a salary at an annual base rate of two hundred twenty five thousand
dollars ($225,000) per year, which shall be adjusted annually to reflect any
increase from the previous year in the Consumer Price Index for the Los
Angeles, California area (the "Base Salary"). The applicable Base Salary shall
be payable not less frequently than monthly in accordance with the regular
salary procedure from time to time adopted by EMPLOYER. There shall be
deducted from all compensation paid to XXXXXXX such sums, including but not
limited to Social Security, income tax withholding, employment insurance, and
any and all other such deductions, as EMPLOYER is by law obligated to withhold.
(ii) In addition to the Base Salary, EMPLOYER shall pay
XXXXXXX an annual bonus earned as of December 31 of the respective year (the
"Bonus") to be paid to XXXXXXX upon issuance in due course of the EMPLOYER'S
annual certified financial report. The Bonus shall equal 2 1/2% of the annual
net pre-tax profits of EMPLOYER if EMPLOYER earns annual net after tax profits
(after payment of the Bonus and such bonuses to any other employee who is
entitled to receive a bonus from the EMPLOYER based upon the same formula as
set forth in this Section 2 (a) (ii) under a contract of employment dated as of
the same date as this Agreement) equal to a minimum annual return on equity (as
determined on January 1 of the applicable year) of twenty percent (20%),
reduced to ten percent (10%) for each year after the Corporation reaches equity
of at least $20 million. As used in this Section 2 (a) (ii), net pre-tax
profits and net after tax profits refer to the net pre-tax profits and net
after tax profits as determined under generally accepted accounting principles.
The Bonus will increase to five percent (5%) of such annual net pre-tax profits
of EMPLOYER if EMPLOYER earns annual net after tax profits (after payment of
the Bonus and such bonuses to any other employee who is entitled to receive a
bonus from the EMPLOYER based upon the same formula as set forth in this
Section 2 (a) (ii) under a contract of employment dated as of the same date as
this Agreement) equal to a minimum annual return on equity (as determined on
January 1 of the applicable year) in excess of thirty percent (30%), reduced to
twenty percent (20%) for each year after the Corporation reaches equity of at
least $20 million. To the extent that the collective bonus amounts of XXXXXXX
and any other employee under a contract of employment dated as of the same date
as this Agreement determined according to this formula result in the reduction
of annual net after tax profits of EMPLOYER to an amount less than the
applicable minimum annual return levels, then the amount of Bonus paid to
XXXXXXX and the amount of bonus paid to such other employee shall be reduced to
such amount as will result in EMPLOYER retaining the applicable minimum annual
return levels, and such amount shall be divided equally between each of them.
Up to 50% of each year's annual bonus will be payable in quarterly installments
during the applicable year for which the bonus is earned, determined by
annualizing the quarterly return on equity for each of the first three quarters
of the year. In
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the event that the quarterly payment of bonus amounts results in an overpayment
to XXXXXXX, any excess bonus payments shall be deducted from XXXXXXX'x Base
Salary and any other amounts owed to XXXXXXX.
(iii) XXXXXXX shall be reimbursed for XXXXXXX'X reasonable
and actual out-of-pocket expenses incurred by XXXXXXX in performance of
XXXXXXX'X duties and responsibilities hereunder, provided that XXXXXXX shall
first furnish to EMPLOYER proper vouchers and/or receipts.
(iv) XXXXXXX shall be entitled to participate in, and
shall be included in, such insurance, pension, profit sharing, stock option,
stock purchase and other employee benefit plans, excluding the employee cash
bonus pool, of EMPLOYER as are in effect from time to time during the term of
this Agreement and provided to other senior executive employees of EMPLOYER,
including, but not limited to, EMPLOYER'S Supplemental Executive Retirement
Plan (all of which are collectively referred to herein as the "Benefit Plans").
(v) XXXXXXX shall also be entitled to all perquisites
provided in accordance with EMPLOYER'S policy for senior management executives
from time to time in effect (all of which are collectively referred to herein
as the "Perquisites"). Notwithstanding the foregoing, in no event shall each
or any of the Perquisites provided pursuant to the terms of this Section 2 (a)
(v) be lesser in value than such perquisites as were provided to XXXXXXX by
Pacific Thrift and/or Presidential Mortgage Company, a California Partnership
("Presidential") and in effect immediately prior to the transfer of assets by
Presidential to EMPLOYER. Perquisites provided pursuant to this Section
2(a)(v) shall include, without limitation, use of an automobile or automobile
allowances, expense allowances, vacation days, sick days and holidays, and
medical, dental and life insurance benefits.
3. DISABILITY. If, on account of any physical or mental
disability, XXXXXXX shall fail or be unable to perform under this Agreement for
any period of one hundred twenty (120) consecutive days or for an aggregate
period of one hundred twenty (120) or more days during any consecutive
twelve-month period, EMPLOYER may, at its option, at any time thereafter, upon
written notice to XXXXXXX, terminate the employment relationship provided for
in this Agreement. In such event, XXXXXXX'X requirement to render services
hereunder and EMPLOYER'S requirement to compensate XXXXXXX hereunder shall
terminate and come to an end upon the date provided in such notice. In that
event, XXXXXXX shall be entitled to receive, as disability compensation: (i) a
lump sum payment to be paid on the effective date of termination pursuant to
this Section 3, which shall consist of the full annual Bonus earned, if any, at
the end of the prior year, (ii) XXXXXXX'X Base Salary for one year following
termination of this Agreement payable not less frequently than monthly, and
(iii) use
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of an automobile or automobile allowance, full automobile insurance coverage,
and health insurance coverage under any health insurance policies maintained by
EMPLOYER for its other senior executives, all of which shall be provided
pursuant to the terms of Section 2 (a) (v) herein and shall continue to be
provided without interruption for the greater of one year following the
effective date of termination pursuant to this Section 3 or the remainder of
the term of this Agreement. If, after the end of the fiscal year following the
effective date of termination pursuant to this Section 3, it is determined that
the annual Bonus compensation which would have been earned by XXXXXXX for such
year if the XXXXXXX had continued to be employed under this Agreement would
have exceeded the Bonus actually paid, EMPLOYER shall pay XXXXXXX a lump sum
payment equal to the difference between the Bonus amount previously paid to
XXXXXXX and the Bonus amount that would have been earned by XXXXXXX. Such
amount shall be paid on the earlier of ten (10) days after the issuance of
EMPLOYER'S annual certified financial report or one hundred and twenty (120)
days after the end of the fiscal year. XXXXXXX shall not be obligated to
reimburse EMPLOYER if the Bonus amount paid by EMPLOYER upon termination
exceeds the amount of any Bonus that would have been earned. EMPLOYER may, at
its option, apply for disability income insurance and, if so, any obligation on
the part of EMPLOYER to pay XXXXXXX any payments on account of any physical or
mental disability of XXXXXXX as specified above, shall be reduced by the amount
of any payments to XXXXXXX under any such disability income policy. Any
payments to XXXXXXX under any state disability insurance shall not reduce the
amount payable to XXXXXXX under this Agreement.
4. DEATH. In the event of XXXXXXX'X death during the term
hereof, this Agreement shall terminate immediately. In such event, XXXXXXX'X
personal representative shall be entitled to receive, as a death benefit, in
addition to any other payments which XXXXXXX'X personal representative may be
entitled to receive under any Benefit Plans: (i) a lump sum payment to be paid
within five (5) days of XXXXXXX'X death equal to the full annual Bonus earned
by the XXXXXXX, at the end of the prior year; and (ii) XXXXXXX'X Base Salary
for one year following XXXXXXX'X death, payable not less frequently than
monthly. If, after the end of the fiscal year following the XXXXXXX'X death,
it is determined that the annual Bonus compensation which would have been
earned by XXXXXXX for such year would have exceeded the Bonus actually paid if
Employee had continued to be employed under this Employment Agreement, EMPLOYER
shall pay XXXXXXX'X personal representatives a lump sum payment equal to the
difference between the Bonus amount previously paid to XXXXXXX'X personal
representatives and the Bonus amount that would have been earned by XXXXXXX.
Such amount shall be paid on the earlier of ten (10) days after the issuance of
EMPLOYER'S annual certified financial report or one hundred and twenty (120)
days after the end of the fiscal year. XXXXXXX'X personal representatives
shall not be obligated to reimburse EMPLOYER if the Bonus amount paid by
EMPLOYER within five (5) days following
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XXXXXXX'X death exceeds the amount of any Bonus that would have been earned.
EMPLOYER may maintain life insurance on the life of XXXXXXX in favor
of the EMPLOYER. XXXXXXX shall have no interest whatsoever in any such policy
or policies, except as otherwise provided in any split dollar life insurance
agreements, but XXXXXXX shall, at the request of EMPLOYER, submit to such
medical examinations, supply such information, consent to such blood tests and
execute such documents as may be required by the insurance company or companies
to whom EMPLOYER has applied for such insurance.
5. TERMINATION FOR CAUSE. EMPLOYER may discharge XXXXXXX at any
time for cause. "Cause" for discharge shall mean (i) theft or embezzlement by
XXXXXXX from EMPLOYER or its affiliates, (ii) fraud or other acts of dishonesty
by XXXXXXX in the conduct of EMPLOYER'S business or the fulfillment of
XXXXXXX'X assigned responsibilities hereunder, (iii) XXXXXXX'X conviction of,
or plea of nolo contendere to, any felony or any crime involving moral
turpitude, (iv) XXXXXXX'X willfully and knowingly taking any action which is
materially injurious to EMPLOYER'S business or reputation. Within 10 business
days following receipt of written notice of termination for Cause, XXXXXXX
shall have the right to demand and, if demanded, to receive within 30 days, an
opportunity to respond and defend himself before the Board and to have the
Board by resolution confirm by a three-fourths affirmative vote that EMPLOYER
has grounds to terminate XXXXXXX for Cause. If the Board does not determine
that Cause exists, XXXXXXX shall have the option to treat his employment as not
having terminated or as having been terminated by EMPLOYER without cause as
defined in Section 6 herein. Without limiting the foregoing, nothing in this
Section 5 shall be construed to require that XXXXXXX demand a hearing before
the Board as a condition to pursuing any claim or action with respect to the
matters contained in this Agreement. The occurrence of any event constituting
cause for discharge shall permit, but not require, EMPLOYER to terminate
XXXXXXX for Cause; provided, however, that EMPLOYER'S decision not to terminate
the XXXXXXX upon the occurrence of an event constituting cause for discharge
shall not operate as a waiver of its rights provided in this Section 5 or
otherwise.
If EMPLOYER terminates XXXXXXX for Cause, EMPLOYER shall be
obligated to provide to XXXXXXX only the Base Salary provided for in Section 2
(a) (i) herein through the date of termination of XXXXXXX at the rate in effect
on the date of such termination.
6. TERMINATION WITHOUT CAUSE. Should EMPLOYER terminate this
Agreement for reasons other than those specified in Sections 3, 4, 5, or 7
herein, XXXXXXX shall be entitled to use of an automobile or automobile
allowance, full automobile insurance coverage, and health insurance coverage
under any
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health insurance policies maintained by EMPLOYER for its other senior
executives, all of which shall be provided pursuant to the terms of Section 2
(a) (v) herein and shall continue to be provided without interruption for one
year following the effective date of termination pursuant to this Section 6.
Upon termination pursuant to this Section 6, EMPLOYER shall additionally pay to
XXXXXXX a lump sum payment, to be paid on the effective date of termination
pursuant to this Section 6, which shall consist of: (i) the full annual Base
Salary, (ii) an amount equal to the annual Bonus compensation earned by XXXXXXX
at the end of the prior year, and (iii) the cash value of all vacation, holiday
and sick days which have accrued up to the date of termination and which would
have accrued for one year following termination pursuant to this Section 6.
(The sum of all amounts and benefits to be provided by EMPLOYER to XXXXXXX
pursuant to this Section 6 is collectively referred to herein as the
"Termination Payment".) If, after the end of the fiscal year following the
effective date of termination pursuant to this Section 6, it is determined that
the annual Bonus compensation which would have been earned by XXXXXXX for such
year if the XXXXXXX had continued to be employed under this Agreement would
have exceeded the Bonus actually paid, EMPLOYER shall pay XXXXXXX a lump sum
payment equal to the difference between the Bonus amount previously paid to
XXXXXXX and the Bonus amount that would have been earned by XXXXXXX. Such
amount shall be paid on the earlier of ten (10) days after the issuance of
EMPLOYER'S annual certified financial report or one hundred and twenty (120)
days after the end of the fiscal year. XXXXXXX shall not be obligated to
reimburse EMPLOYER if the Bonus amount paid by EMPLOYER upon termination
exceeds the amount of any Bonus that would have been earned.
7. CORPORATE CHANGES.
(a) Definition. XXXXXXX may terminate his employment
hereunder upon thirty (30) days written notice at any time within one year
following the occurrence of a Corporate Change. For purposes of this Section
7, a "Corporate Change" shall be deemed to have occurred upon the occurrence of
any one (or more) of the following events: (i) a transaction in which EMPLOYER
ceases to be an independent publicly owned corporation that is required to file
quarterly and annual reports under the Securities Exchange Act of 1934, (ii) a
sale or other disposition of all or substantially all of the assets, or a
majority of the outstanding capital stock, of EMPLOYER (including but not
limited to the assets or stock of EMPLOYER'S subsidiaries that results in all
or substantially all of the assets or stock of EMPLOYER on a consolidated basis
being sold), (iii) as a result of, or in connection with, any cash tender
offer, exchange offer, merger or other business combination, sale of assets or
combination of the foregoing, persons who were directors of EMPLOYER just prior
to such event(s) shall cease to constitute a majority of the Board, (iv) any
person, including a group as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, becomes the
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beneficial owner of shares of EMPLOYER with respect to which twenty percent
(20%) or more of the total number of votes for the election of the Board may be
cast, (v) the EMPLOYER assigns to XXXXXXX duties, functions, responsibilities
or authority substantially inferior to the duties, functions, responsibilities
and authority contemplated by Section 1 (b) herein, (vi) EMPLOYER'S
stockholders cause a change in the majority of the members of the Board within
a twelve (12) month period; provided, however, that the election of one or more
new directors shall not be deemed to be a change in the membership of the Board
if the nomination of the newly elected directors was approved by the vote of
three-fourths of the directors then still in office who were directors at the
beginning of such twelve (12) month period, or (vii) a tender offer or exchange
offer is made for shares of the EMPLOYER'S common stock (other than one made by
the EMPLOYER) and shares of common stock are acquired thereunder.
(b) Payments. Upon termination of employment pursuant to this
Section 7, XXXXXXX shall be entitled to use of an automobile or automobile
allowance, full automobile insurance coverage, and health insurance coverage
under any health insurance policies maintained by EMPLOYER for its other senior
executive officers, all of which shall be provided pursuant to the terms of
Section 2 (a) (v) herein and shall continue to be provided without interruption
for eighteen (18) months following the effective date of termination pursuant
to this Section 7. Upon termination pursuant to this Section 7, EMPLOYER shall
additionally pay to XXXXXXX a lump sum payment, to be paid within five (5) days
after the date of XXXXXXX'X notice pursuant to Section 7 (a) herein, which
shall consist of: (i) one and one-half times the full annual Base Salary, (ii)
an amount equal to one and one-half times the annual Bonus compensation earned
by XXXXXXX at the end of the prior year, and (iii) the cash value of all
vacation, holiday and sick days which have accrued up to the date of
termination and which would have accrued for eighteen (18) months following
termination pursuant to this Section 7. (The sum of all amounts and benefits
to be provided by EMPLOYER to XXXXXXX pursuant to this Section 7 (b) is
collectively referred to herein as the "Corporate Changes Termination
Payment"). Notwithstanding the foregoing, if XXXXXXX gives notice of
termination pursuant to this Section 7 prior to the closing of a transaction
referred to in Section 7(a)(i), (ii) or (iii) hereof, the Corporate Changes
Termination Payment must be made a condition to and must be paid concurrently
with the closing of such a transaction. If, after the end of the fiscal year
following the effective date of termination pursuant to this Section 7, it is
determined that the value of one and one-half times the full annual Bonus
compensation which would have been earned by XXXXXXX for such year if the
XXXXXXX had continued to be employed under this Agreement would have exceeded
the Bonus actually paid, EMPLOYER shall pay XXXXXXX a lump sum payment equal to
the difference between the Bonus amount previously paid to XXXXXXX and one and
one-half times the Bonus amount that would have been earned by XXXXXXX. Such
amount shall be paid on the
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earlier of ten (10) days after the issuance of EMPLOYER'S annual certified
financial report or one hundred twenty (120) days after the end of the fiscal
year. XXXXXXX shall not be obligated to reimburse EMPLOYER for any Bonus
payment included in the Corporate Changes Termination Payment in excess of any
Bonus which would have been earned.
(c) Tax Limitations on Corporate Changes Payments. If the
aggregate of all payments, including but not limited to, Corporate Changes
Termination Payments and earned Bonus differentials that are to be paid to
XXXXXXX contingent on those Corporate Changes specified in Section 7 (a) herein
(the "Aggregate Amount"), would constitute a "parachute payment" (as defined in
Section 280 G of the Internal Revenue Code of 1986, as amended or supplemented
(the "Code"), the Corporate Changes Termination Payment and/or earned Bonus
differential otherwise payable to the XXXXXXX pursuant to Section 7 (b) herein
shall be equal to the higher of: (i) the amount (referred to herein as the
"Reduced Amount") that would result in no portion of the Aggregate Amount being
subject to the excise tax imposed by Section 4999 of the Code, or (ii) the full
Aggregate Amount if the net after tax payments to XXXXXXX would exceed the
Reduced Amount. The determination of the Corporate Changes Termination
Payment, the earned Bonus differential under Section 7 (b), the Reduced Amount
and the net after tax amount payable to XXXXXXX on the full Aggregate Amount
shall be made by the XXXXXXX and the EMPLOYER in good faith, and in the event
they disagree, such determination shall be made by means of arbitration to be
conducted at the EMPLOYER'S expense. Any such arbitration shall be conducted
in Los Angeles, California, by one arbitrator, who shall be a member of a
nationally recognized accounting firm that is not then engaged by the EMPLOYER
or any of its major stockholders, and who shall be jointly designated by the
parties. If the parties cannot agree on the selection of an arbitrator,
EMPLOYER'S then current independent auditors shall select such arbitrator. The
findings of the arbitrator shall be conclusive and binding on the parties. For
purposes of this Section 7 (c), the net after tax amount payable to XXXXXXX
shall mean the present value, as determined in accordance with Section
280G(d)(4) of the Code, of any payment or distribution in the nature of
compensation to or for XXXXXXX'X benefit, whether paid or payable pursuant to
this Agreement or otherwise, net of all taxes imposed on the XXXXXXX with
respect thereto under Sections 1 and 4999 of the Code, determined by applying
the highest marginal rate under Section 1 of the Code.
8. RIGHTS TO PROPRIETARY INFORMATION.
(a) For purposes of this Agreement, the term "Proprietary
Information" means and includes: 1. all written, oral and visual information
about EMPLOYER's customers, clients, employees, consultants and brokers that is
not readily known or available to the public, or that XXXXXXX learns of or
acquires through his employment by EMPLOYER; and 2. financial information,
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marketing techniques and materials, marketing and development plans, broker
lists, customer lists, other information concerning brokers and customers,
pricing information and policies, price lists, employee files, corporate and
business contacts and relationships, corporate and business opportunities,
telephone logs and messages, video or audio tapes and/or disks, photographs,
film and slides, including all negatives and positive and prints, computer
disks and files, rolodex cards, addresses and telephone numbers, contracts,
releases, other writings of any kind, and any and all other materials of a
proprietary nature to which XXXXXXX is exposed or has access as a consequence
of his employment by EMPLOYER. All of the Proprietary Information is, and at
all times shall be and remain, private and confidential and is the sole and
exclusive property of, and owned and controlled by EMPLOYER, regardless of
whether such Proprietary Information is in tangible or intangible form. The
parties understand that information that is generally known to the public, or
which XXXXXXX acquired other than as a consequence of his employment by
EMPLOYER, such as in the course of similar employment or work elsewhere shall
not be deemed part of the Proprietary Information.
(b) All Proprietary Information shall be the sole
property of EMPLOYER, its successors and assigns, and EMPLOYER, its successors
and assigns shall be the sole owner of all patents, trademarks, service marks
and copyrights, and other rights (collectively referred to herein as "Rights")
pertaining to Proprietary Information. XXXXXXX hereby assigns to EMPLOYER any
rights XXXXXXX may have or acquire in Proprietary Information or Rights
pertaining to the Proprietary Information. XXXXXXX further agrees as to all
Proprietary Information to assist EMPLOYER or any person designated by it in
every necessary or appropriate manner (but at EMPLOYER's expense) to obtain and
from time to time enforce Rights relating to said Proprietary Information
throughout the universe. XXXXXXX will execute all documents for use in
applying for, obtaining and enforcing such Rights on such Proprietary
Information as EMPLOYER may desire, together with any assumptions thereof to
EMPLOYER or persons designated by it. XXXXXXX'x obligation to assist EMPLOYER
or any person designated by it in obtaining and enforcing Rights relating to
Proprietary Information shall continue beyond the cessation of his employment.
It is provided, however, that EMPLOYER shall compensate XXXXXXX at a reasonable
rate after the cessation of employment for time actually spent by XXXXXXX upon
EMPLOYER's request for such assistance. In the event that EMPLOYER is unable,
after reasonable effort, to secure XXXXXXX'x signature on any document or
documents needed to apply for or enforce any Right relating to Proprietary
Information, whether because of his physical or mental incapacity or for any
other reason whatsoever, XXXXXXX hereby irrevocably designates and appoints
EMPLOYER and its duly authorized officers and agents as his agents and
attorneys-in-fact to act for and in his behalf and stead in the execution and
filing of any such application and in furthering the application for an
enforcement of Rights with the
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same legal force and effect as if such acts were performed by XXXXXXX.
(c) At all times, both during his employment and after
the cessation of employment, whether the cessation is voluntary or involuntary,
for any reason or no reason, or by disability, XXXXXXX will keep in strictest
confidence and trust all Proprietary Information, and XXXXXXX will not
disclose, use, or induce or assist in the use or disclosure of any Proprietary
Information or Rights pertaining to Proprietary Information, or anything
related thereto, without the prior, express written consent of EMPLOYER, except
as may be necessary in the ordinary course of performing his duties as an
employee of EMPLOYER. XXXXXXX recognizes that EMPLOYER has received and in the
future will receive from third parties their confidential, trade secret, or
Proprietary Information subject to a duty on EMPLOYER's part to maintain the
confidentiality of such information and to use it only in connection with the
performance of his duties as an employee of EMPLOYER. XXXXXXX agrees that
XXXXXXX owes EMPLOYER and such third parties, during his employment and
thereafter, a duty to hold all such confidential, trade secret, or Proprietary
Information in the strictest confidence, and XXXXXXX will not disclose, use, or
induce or assist in the use or disclosure of any such confidential, trade
secret, or Proprietary Information without the prior, express written consent
of EMPLOYER, except as may be necessary in the ordinary course of performing
his duties as an employee of EMPLOYER consistent with EMPLOYER's agreement with
such third party.
(d) XXXXXXX agrees that all material or other original
works of authorship written, created, or developed by XXXXXXX in connection
with his employment hereunder (whether alone or in conjunction with any other
person), and all rights of any and every kind whatsoever in and to the results
and proceeds of XXXXXXX'x services rendered hereunder, whether or not such
rights are now known, recognized or contemplated, and the complete,
unconditional and unencumbered ownership in and to such materials, results and
proceeds for all purposes whatsoever shall be "works for hire," as that term is
defined in the United States Copyright Act (17 U.S.C. Section 101), and shall
be the sole and absolute property of EMPLOYER, its successors and assigns, and
XXXXXXX agrees that he/she does not have and will not claim to have, either
under this Agreement or otherwise, any right, title or interest of any kind or
nature whatsoever in or to said property.
(e) XXXXXXX will promptly disclose to EMPLOYER, and
EMPLOYER hereby agrees to receive such disclosures in confidence, all
discoveries, developments, designs, improvements, inventions, software
programs, processes, techniques, know-how, negative know-how and data, whether
or not patentable or registrable under patent, copyright or similar statutes or
reduced to practice, made or conceived or reduced to practice or learned by
XXXXXXX, either alone or jointly with others during
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the period of his employment, for the purpose of permitting EMPLOYER to
determine whether they constitute Proprietary Information, or copyrightable or
patentable material.
9. NON-COMPETITION/NON-SOLICITATION.
(a) During the period of his employment, XXXXXXX will not
directly or indirectly engage in any activity which competes with EMPLOYER, or
which EMPLOYER shall determine in good faith to be in competition with EMPLOYER
or any subsidiary or affiliate of EMPLOYER. In addition, during his employment
and after the cessation of employment, XXXXXXX will not, alone or in concert
with others, or on his own behalf, or on behalf of any other person, in any way
use or disclose Proprietary Information in order to solicit, entice, or in any
way divert any broker to do business with any competitor of EMPLOYER or any
subsidiary or affiliate of EMPLOYER. During his employment, XXXXXXX agrees not
to plan or otherwise take any preliminary steps, either alone or in concert
with others, or on his own behalf, or on behalf of any other person, to set up
or engage in any business enterprise that would be in competition with EMPLOYER
or any subsidiary or affiliate of EMPLOYER.
(b) During his employment and for a period of two (2)
years after the cessation of employment, XXXXXXX will not, either directly or
indirectly, either alone or in concert with others or on his own behalf or on
behalf of any other person, solicit, divert, entice, recruit, or employ any
employee of or consultant to EMPLOYER, or any subsidiary or affiliate of
EMPLOYER, to leave employment with or otherwise terminate employment with
EMPLOYER or any subsidiary or affiliate of EMPLOYER or work for any competitor
of EMPLOYER or any subsidiary or affiliate of EMPLOYER.
(c) XXXXXXX recognizes that the immediate and continuous
performance of his obligations in this paragraph 9 is extremely important and
valuable to EMPLOYER because of the extensive and costly training given to its
employees and the knowledge gained by such employees of the Proprietary
Information used by EMPLOYER in its operations. In the event of his breach of
those obligations, XXXXXXX therefore agrees that EMPLOYER shall be entitled to
estimated or liquidated damages, as defined herein. For each former employee
of EMPLOYER whom XXXXXXX solicits, diverts, recruits, or employs in violation
of this paragraph 9, and for each broker or mortgage loan customer of EMPLOYER
whom such former employee handled for EMPLOYER and whom the former employee
contacts or otherwise services or works with for his benefit or for the benefit
of anyone in privity with XXXXXXX, including any competitor of EMPLOYER or any
subsidiary or affiliate of EMPLOYER with whom XXXXXXX accepts employment in
breach of this paragraph 9, XXXXXXX shall pay EMPLOYER liquidated damages. The
liquidated damages for each such broker or customer shall be (i) the amount of
profit earned by EMPLOYER from mortgage loan referrals from each broker, or the
amount of profit
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earned on loans to each mortgage loan customer, during the twelve (12) months
immediately preceding termination of such former employer with EMPLOYER, and
(ii) the amount of cost to EMPLOYER to recruit and train a replacement for each
such former employee plus the first six (6) month's salary paid to the
replacement(s) for the former employee. If the former employee was not in a
position of have contacts with brokers or to otherwise generate business from
mortgage loan customers, the liquidated damages shall be the amount of the cost
to EMPLOYER to recruit and train a replacement(s) for the former employee.
XXXXXXX further agrees that the cost to recruit and train replacement(s) for
each former employee as described in this paragraph 9 will be part of
EMPLOYER's damages and that the profit formula for former employees who had
broker or mortgage loan business contact, and the first six (6) months salary
paid to the replacement(s) for former employees, are conservative estimates of
the value, or a portion of the value, of the former employee to EMPLOYER.
10. SURRENDER OF PROPRIETARY INFORMATION. In the event of the
termination of his employment, XXXXXXX will deliver to EMPLOYER all devices,
records, sketches, reports, proposals, broker information, lists,
correspondence, equipment, software, computer disks, documents, photographs,
photostats, negatives, undeveloped film, notes, drawings, specifications, tape
recordings or other electronic recordings, programs, data and other materials
or property of any nature belonging to EMPLOYER or pertaining to his work with
EMPLOYER, and XXXXXXX will not take with XXXXXXX, or allow a third party to
take, any of the foregoing or any reproduction of any of the foregoing.
11. SUCCESSORS; BINDING AGREEMENT.
(a) EMPLOYER will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of EMPLOYER to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that EMPLOYER would be required to perform it if no such succession had taken
place. Any failure of EMPLOYER to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a material breach of this
Agreement and shall entitle XXXXXXX to compensation from EMPLOYER in the same
amount and on the same terms as he would be entitled to hereunder if EMPLOYER
were to terminate employment pursuant to Section 7 hereof, except that for
purposes of implementing the foregoing, the day before any such succession
becomes effective shall be deemed the date that payment is due. As used in
this Agreement, "EMPLOYER" shall mean EMPLOYER as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of, and be
enforceable by, XXXXXXX'X personal or legal representatives, executors,
administrators, successors, heirs, distributees,
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devisees and legatees. If XXXXXXX should die while any amount would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to his devisees, legatee or other designees, or if there is no such
designee, to his estate.
12. NOTICES. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been given at the time delivered, if personally delivered, or
twenty-four hours after deposit thereof for mailing at any general or branch
United States Post Office enclosed in a registered or certified postpaid
envelope and addressed as follows:
If to EMPLOYER:
Pacific United Group, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Senior Executive Vice
President
with copies to:
Jeffer, Mangels, Xxxxxx & Marmaro
0000 Xxxxxx xx xxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxxx Xx Xxxx Xxxxxx, Esq.
and
Pacific United Group, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Board of Directors
If to XXXXXXX:
Xxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx #000
Xxxxxx Xxx Xxx, XX 00000
The parties hereto may designate a different place at which notice shall be
given, provided, however, that any such notice of change of address shall be
effective only upon receipt.
13. ENTIRE UNDERSTANDING. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior written or oral agreements. This Agreement may not be
modified, amended, or terminated except by another instrument in writing
executed by the parties hereto.
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14. GOVERNING LAW. This Agreement and all rights, obligations and
liabilities arising hereunder shall be construed and enforced in accordance
with the laws of the State of California.
15. ATTORNEY'S FEES.
(a) In the event it becomes necessary to commence any
proceeding or action to enforce the provisions of this Agreement, the court
before whom such action shall be tried may award to the prevailing party all
costs and expenses thereof, including but not limited to reasonable attorneys
fees, the usual, customary and lawfully recoverable Court costs, and all other
expenses in connection therewith. XXXXXXX shall be deemed to be the prevailing
party if he is awarded any amounts in any such proceeding or action.
(b) EMPLOYER shall also pay and be responsible for all
attorneys and related fees, expenses or costs incurred by XXXXXXX, if EMPLOYER,
or any stockholder of EMPLOYER contests the validity or enforceability of this
Agreement or any part hereof.
16. Interest on Amounts Due. In addition to the amounts payable
to XXXXXXX as provided herein, EMPLOYER shall further be required to pay
interest upon any amount owed hereunder and not paid on the date such amount is
owed, at a rate of nine points above the Bank of America reference rate, as
determined on the date any such amount is due. If such interest rate exceeds
the maximum interest permitted by law, then the rate shall be the maximum rate
of interest permitted by law.
The parties hereto have executed this Agreement on the day and year
first above written.
"XXXXXXX"
________________________________
XXXX X. XXXXXXX
"EMPLOYER"
PACIFIC UNITED GROUP, INC.
By: _____________________________
Title:___________________________
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