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EXHIBIT 10.2(b)
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is by and between Aames
Financial Corporation ("Aames"), for itself and for all of its affiliated,
related and subsidiary companies, licensees, joint venturers and partnerships,
as well as their respective directors, officers, partners, employees, agents,
attorneys, successors and assigns, past and present, and each of them,
(collectively, "Aames"), on the one hand, and Xxxx X. Xxxxx, for himself and
his agents, representatives, heirs and assigns (collectively, "Xx. Xxxxx"), on
the other hand.
In consideration of the promises, mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Aames and Xx. Xxxxx
agree as follows:
1. SEVERANCE OF EMPLOYMENT RELATIONSHIP. Aames and Xx. Xxxxx
agree and acknowledge that Xx. Xxxxx shall voluntarily resign, under Section
7(a) of the Amended and Restated Employment Agreement dated September 12, 1996
between Aames and Xx. Xxxxx (the "Employment Agreement"), as President and
Chief Executive Officer of Aames effective May 7, 1997 (the "Effective Date").
Xx. Xxxxx' letter of resignation shall be in the form attached hereto as
Exhibit A (the "Letter of Resignation"). Effective on the Effective Date, the
Employment Agreement shall be terminated and Xx. Xxxxx shall continue to serve
as Chairman of the Board and commence his duties as a consultant to Aames
pursuant to that certain Consulting Agreement between Aames and Xx. Xxxxx of
even date herewith (the "Consulting Agreement"). Xx. Xxxxx hereby confirms his
agreement and understanding that as of the Effective Date (a) he will become a
consultant to Aames and (b) he has received all compensation, expense
reimbursements and other benefits (other than stock options granted to Xx.
Xxxxx prior to the date hereof and currently outstanding) to which he may be
entitled to receive under the Employment Agreement through the Effective Date,
other than Base Salary (as defined in the Employment Agreement) through the
Effective Date and reimbursement of expenses incurred prior to the Effective
Date.
2. CONSIDERATION. In consideration of the covenants and
undertakings set forth in this Agreement, and concurrently with the execution
of this Agreement, Aames and Xx. Xxxxx agree to the following:
(a) Xx. Xxxxx will receive a lump sum severance payment in the
amount of $900,000 upon execution of this Agreement;
(b) For a period of 12 months from the date hereof, Xx. Xxxxx will
receive board fees of $1 million (payable monthly) for serving as Chairman of
the Board and he shall be entitled to maintain his current office and secretary
which shall be the office and secretary of the Chairman, and to receive such
other perquisites with respect to travel arrangements and use of Company credit
cards that are made available by the Company to other senior executive officers
of the Company, provided that such fees and perquisites shall terminate in the
event he is
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removed from the Board of Directors for cause or his position as Chairman
terminates as a result of his voluntary resignation, death or disability;
(c) Xx. Xxxxx will receive from Aames lifetime coverage for
himself and his spouse under medical and dental plans comparable to those
provided by Aames to its senior executive officers;
(d) The life insurance policy provided to Xx. Xxxxx under Section
5(f) of the Employment Agreement will be maintained throughout Xx. Xxxxx' life;
(e) Title to Xx. Xxxxx' current company car will be transferred to
him upon execution of this Agreement;
(f) Aames will continue to maintain directors and officers
liability insurance in an amount at least equal to the amount in effect as of
the date hereof (i.e., $100 million); and
(g) All reasonable legal fees incurred by Xx. Xxxxx in connection
with the negotiation of this Agreement will be paid by Aames.
3. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Xx. Xxxxx hereby
agrees that he will not disclose to any person or otherwise use or exploit any
proprietary or confidential information, including, without limitation, trade
secrets, processes, records of research, proposals, reports, methods,
processes, techniques, computer software or programming, or budgets or other
financial information, regarding Aames, its business, properties, customers or
affairs (collectively, "Confidential Information") obtained by him at any time
during his employment by Aames. Notwithstanding anything herein to the
contrary, the term "Confidential Information" shall not include information
which (a) is or becomes generally available to the public other than as a
result of disclosure by Xx. Xxxxx in violation of this Agreement; (b) is or
becomes available to Xx. Xxxxx on a non-confidential basis from a source other
than Aames, provided that such source is not known by Xx. Xxxxx to be
furnishing such information in violation of a confidentiality agreement with or
other obligation of secrecy to Aames; (c) has been made available, or is made
available, on an unrestricted basis to a third party by Aames, by an individual
authorized to do so; or (d) is known by Xx. Xxxxx prior to its disclosure to
him. Xx. Xxxxx may use and disclose Confidential Information to the extent
necessary to assert any right or defend against any claim arising under this
Agreement or pertaining to Confidential Information or its use, to the extent
necessary to comply with any applicable statute, constitution, treaty, rule,
regulation, ordinance or order, whether of the United States, any state
thereof, or any other jurisdiction applicable to Xx. Xxxxx, or if Xx. Xxxxx
receives a request to disclose all or any part of the information contained in
the Confidential Information under the terms of a subpoena, order, civil
investigative demand or similar process issued by a court of competent
jurisdiction or by a governmental body or agency, whether of the United States
or any state thereof, or any other jurisdiction applicable to Xx. Xxxxx. If
Xx. Xxxxx is served with any subpoena, court order or other legal process
seeking disclosure of any Confidential Information, Xx. Xxxxx shall promptly
notify the Board
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of Directors at the address set forth below, but in no event more than 48 hours
after receipt of same. Except in the performance of his duties hereunder, Xx.
Xxxxx agrees not to remove any documents, records or other information from the
premises of Aames or any of its subsidiaries or affiliates containing any such
Confidential Information and acknowledges that such documents, records and
other information are the exclusive property of Aames or its subsidiaries or
affiliates. The confidentiality obligations imposed on Xx. Xxxxx by the terms
of this Agreement shall be continuing.
4. NON-COMPETITION AND NON-SOLICITATION. Xx. Xxxxx agrees that
for a period of three years from the date hereof, he will not directly or
indirectly (a) own, manage, operate, control, invest in, lend to or acquire an
interest in, or otherwise engage or participate (whether as a proprietor,
partner, joint venturer, officer, director, investor or other participant) in
any business that competes with Aames; provided, however, that this restriction
shall not prohibit Xx. Xxxxx from (i) owning not more than 1% of the
outstanding shares of any publicly-held corporation engaged in a competing
business with Aames, (ii) engaging in any activity that does not compete with
any activity currently engaged in by Aames, including, but limited to, the
entertainment or recording business or (iii) making personal real estate
investments; or (b) interfere with the business of Aames, whether by way of
interfering with, soliciting or encouraging employees of Aames to terminate
their employment with Aames, or disrupting its relationship with customers,
agents, representatives or vendors or otherwise.
5. REMEDIES FOR BREACH OF THIS AGREEMENT.
(a) INJUNCTIVE RELIEF. Judis agrees and acknowledges that any
remedy at law for any breach or threatened breach of the provisions of
paragraphs 3, 4, 6(c) and 6(d) and the covenants set forth therein, will be
inadequate and, accordingly, Xx. Xxxxx hereby stipulates that Aames is entitled
to obtain injunctive relief for any such breaches or threatened breaches. The
injunctive relief provided for in this paragraph is in addition to, and is not
in limitation of, any and all other remedies at law or in equity otherwise
available to Aames.
(b) ATTORNEYS' FEES AND COSTS. If either party brings an action
to enforce the terms of this Agreement or declare its rights under this
Agreement, the prevailing party in such action, including all appeals, shall
receive reasonable attorneys' fees, experts' fees and all costs, in addition to
such other relief as may be granted.
6. MISCELLANEOUS.
(a) RELEASE. (i) Xx. Xxxxx hereby waives, releases and forever
discharges Aames from any claim of any kind, whether known or unknown,
suspected or unsuspected, arising out of or in any way related to Xx. Xxxxx'
employment with Aames and/or severance of employment from Aames, including but
not limited to any claims based on allegations of discrimination under Title
VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e, et
seq., the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section
621, et seq., the Americans With Disabilities Act, 42 U.S.C. Section 12101, et
seq., the California Fair
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Employment & Housing Act, California Government Code Section 12900, et seq.,
any contract, tort, wage and hour law, and/or any federal, state or local fair
employment practice or civil rights law, ordinance or executive order, or any
other wrongdoing or improper conduct whatsoever, including but not limited to,
any claims for violation of any state or federal law or regulations, or for
breach of contract, breach of the implied covenant of good faith and fair
dealing, wrongful discharge, misrepresentation, defamation, fraud, fraudulent
inducement or emotional distress, and any and all other claims or torts
whatsoever, all to the fullest extent permitted by law, except for any claims,
obligations and liabilities resulting from, arising out of or in connection
with this Agreement. Xx. Xxxxx acknowledges and agrees that he was provided 21
days to consider this Agreement and to consult with counsel and have the
opportunity to receive independent legal advice with respect to the matters
hereinabove set forth and the asserted rights arising out of said matters, and
has been encouraged to do so. To the extent that Xx. Xxxxx has taken less
than 21 days to consider this Agreement, Xx. Xxxxx acknowledges that he has had
sufficient time to consider the Agreement and to consult with counsel and that
he did not desire or need additional time.
This Agreement as it relates to a release of age discrimination claims
is revocable by Xx. Xxxxx for a period of seven calendar days following his
execution of this Agreement. The revocation must be in writing, must
specifically revoke this Agreement, and must be directed to Xxxxx Xxxx,
facsimile number (000) 000-0000.
The foregoing release shall not limit in any way Xx. Xxxxx' right to
indemnification under any indemnification agreement between Aames and Xx.
Xxxxx, Aames' Bylaws or any applicable law, including, but not limited to, the
Delaware General Corporation Law.
(ii) As a material inducement to Xx. Xxxxx to enter into this
Agreement, Aames hereby waives, releases and forever discharges Xx. Xxxxx from
any claims, liabilities, obligations, damages, costs, losses and expenses
(including reasonable attorneys' fees and costs actually incurred), of any
kind, except for shareholder derivative suits brought by or in the right of
Aames, arising out of or in any way related to Xx. Xxxxx' employment or
directorship with Aames and/or severance of employment from Aames which are
currently known to Aames. The parties expressly acknowledge and agree that
Aames does not release Xx. Xxxxx from claims arising out of his employment or
directorship with Aames which are unknown or which it does not know or expect
to exist in its favor at the time of the execution of this Agreement.
(b) RELEASE OF UNKNOWN CLAIMS. In granting the general release
set forth in paragraph 6(a)(i) above, Xx. Xxxxx expressly waives all rights
under Section 1542 of the California Civil Code, which he has read and fully
understands. This section reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE
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RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Thus, notwithstanding the provision of California Civil Code Section
1542, Xx. Xxxxx expressly acknowledges that this Agreement is also intended to
include in its effect, without limitation, all claims, other than claims which
may or could arise out of a breach of this Agreement, which he does not know or
expect to exist in his favor at the time of executing this Agreement.
(c) REPRESENTATIONS CONCERNING RELEASED CLAIMS. Xx. Xxxxx
represents he has not filed any complaint or charges against Aames with any
local, state or federal court or agency based upon events occurring prior to
the date of execution of this Agreement. Xx. Xxxxx further represents and
agrees that he will not, in the future file, instigate or encourage the filing
of any proceeding or lawsuit by any party against Aames in any local, state or
federal court or agency. Xx. Xxxxx further represents and agrees that he will
not in the future cooperate or participate in any such lawsuit or proceedings
except in accordance with this Agreement and as otherwise required by law.
(d) ASSISTANCE AND COOPERATION. Xx. Xxxxx agrees that he will
fully cooperate with Aames and will make himself available to meet with
employees and representatives of Aames in connection with any public statements
and existing or future investigation, lawsuits, arbitrations or other
proceedings, whether civil, criminal or administrative in nature, in which
Aames is a party or a witness. Xx. Xxxxx will notify Aames immediately if he
is subpoenaed on any matter to which Aames is a party. Xx. Xxxxx agrees not to
make any negative, disparaging, detrimental or derogatory comments to any third
party about Aames or any of its businesses, employees, executives, agents or
representatives at any time whatsoever. Xx. Xxxxx further agrees that all
public statements about the circumstances surrounding his resignation shall be
consistent with the provisions of the Letter of Resignation.
(e) ENTIRE AGREEMENT. The Consulting Agreement and this Agreement
constitute the entire agreement between Aames and Xx. Xxxxx with respect to the
subject matter hereof and supersede any previous negotiations, agreements and
understandings (this paragraph excludes any stock option agreements between the
parties; such stock option agreements shall remain in effect under the
provisions thereof). Xx. Xxxxx acknowledges that he has not relied on any oral
or written representations by Aames to induce him to sign this Agreement, other
than the terms of this Agreement. No modifications of this Agreement can be
made except in a writing signed by both Xx. Xxxxx and an authorized
representative of Aames.
(f) SEVERABILITY. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under existing or future laws effective
during the term of this Agreement, such provisions shall be fully severable,
the Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect
and shall not
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be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
(g) ARBITRATION. Any and all disputes, controversies or claims
between Aames and Xx. Xxxxx arising out of or in any way related to this
Agreement, including without limitation, fraud in the inducement of this
Agreement, or relating to the validity, enforceability or application of this
Agreement or to Xx. Xxxxx' employment with or separation of employment from
Aames, shall be filed in Los Angeles, California and submitted to final and
binding arbitration under the auspices and rules of the Judicial Arbitration
and Mediation Services, Inc., or if it is no longer in existence, the American
Arbitration Association. There shall be one arbitrator. The parties agree
that they have waived any right to trial by jury. The decision of the
arbitrator shall be final and binding. The prevailing party in any such
arbitration proceeding shall be entitled to its costs and reasonable attorneys'
fees. Judgment upon any award rendered may be entered in any court of
competent jurisdiction.
The parties agree that nothing in this paragraph 6(j) shall in any way
limit or prevent Aames from seeking any and all equitable or legal relief as
set forth in paragraph 5 above.
(h) NOTICE PROVISION. All notices shall be sent to the following
addresses:
If to Aames, to:
Aames Financial Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Board of Directors
(after June 1, 1997, the address for Aames shall be 000 X.
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 90017)
If to Xx. Xxxxx, to:
Xxxx X. Xxxxx
000 X. Xxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
(i) GOVERNING LAW. Except where federal law controls, this
Agreement shall be construed and governed exclusively by the laws of the State
of California, without giving effect to its conflict of laws provisions.
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THE SIGNATORIES HAVE CAREFULLY READ THIS ENTIRE AGREEMENT. ITS
CONTENTS HAVE BEEN FULLY EXPLAINED BY THE RESPECTIVE ATTORNEYS. THE
SIGNATORIES FULLY UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS AGREEMENT.
THE ONLY PROMISES MADE TO ANY SIGNATORY ABOUT THIS AGREEMENT, AND TO SIGN THIS
AGREEMENT, ARE CONTAINED IN THIS AGREEMENT. THE SIGNATORIES ARE SIGNING THIS
AGREEMENT VOLUNTARILY.
PLEASE READ CAREFULLY:
THIS SEVERANCE AGREEMENT INCLUDES
A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
XXXX X. XXXXX AAMES FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxx
----------------------------- ---------------------------------
Xxxx X. Xxxxx Xxxx X. Xxxxxxxx
Chief Executive Officer
Dated: May 7, 1997 Dated: May 7, 1997
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EXHIBIT A
FORM OF LETTER OF RESIGNATION
May 7, 1997
Board of Directors
Aames Financial Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Effective this date, I hereby voluntarily resign from my positions as
President and Chief Executive Officer of Aames Financial Corporation (the
"Company") and each of its subsidiaries and affiliates (collectively, the
"Subsidiaries") in accordance with Section 7(a) of my Amended and Restated
Employment Agreement dated September 12, 1996. I also resign from any and all
other offices, including directorships of the Subsidiaries, I may have held
with the Company, except Chairman of the Board.
My resignation completes the planned management succession that was
started when the Company brought Xxxx Xxxxxxxx on last year.
I look forward to my continuing involvement with the Company as
Chairman of the Board.
Sincerely,
Xxxx X. Xxxxx
Chairman of the Board
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