Employment Agreement - IndyMac Bank FSB and John Olinski
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") has been executed as of October 1,
2002 by and between IndyMac Bank, F.S.B. ("Employer") and John Olinski
("Officer").
WITNESSETH:
WHEREAS, Employer desires to obtain the benefit of continued services of Officer
and Officer desires to continue to render services to Employer and its
affiliates.
WHEREAS, Employer and Officer desire to set forth the terms and conditions of
Officer's employment with Employer and its affiliates under this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:
1. TERM. Employer agrees to employ Officer and Officer agrees to serve
Employer and its affiliates, in accordance with the terms hereof, for a
term beginning on the date first written above and ending on December
31, 2006, unless earlier terminated in accordance with the provisions
hereof.
2. POSITION, DUTIES AND RESPONSIBILITIES. Employer and Officer hereby
agree that, subject to the provisions of this Agreement, Employer will
employ Officer and Officer will serve Employer, as an Executive Vice
President of Employer, or its affiliated companies, as determined by
Employer. Affiliated companies shall include, without limitation, any
direct or indirect subsidiary of Employer in which Employer holds less
than 100% but at least a majority of the beneficial interest and voting
control (a "New Public Company"). Employer agrees that Officer's duties
hereunder shall be the usual and customary duties of such office and
such further duties shall not be inconsistent with the provisions of
applicable law. Officer agrees that Employer may add to or change
Officer's duties as business considerations dictate, provided such
changes are consistent with an Executive Vice President position of
Employer as determined by the Chief Executive Officer of Employer.
Officer shall have such official power and authority as shall
reasonably be required to enable him to discharge his duties in the
offices which he may hold. All compensation paid to Officer by Employer
or any of its affiliates shall be aggregated in determining whether
Officer has received the benefits provided for herein, but without
prejudice to the allocation of costs among the entities to which
Officer renders services hereunder.
3. SCOPE OF THIS AGREEMENT AND OUTSIDE AFFILIATIONS. During the term of
this Agreement, Officer shall devote his full business time and energy,
except as expressly provided below, to the business, affairs and
interests of Employer and its affiliates, and matters related thereto,
and shall use his best efforts and abilities to promote their
respective interests. Officer agrees that he will diligently endeavor
to promote the
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business, affairs and interests of Employer and its affiliates and
perform services contemplated hereby, in accordance with the policies
established by the Board of Directors of the applicable entity, which
policies shall be consistent with this Agreement. If so requested by
Employer, Officer agrees to serve without additional remuneration as an
officer of one or more (direct or indirect) subsidiaries, affiliates or
successors of Employer, subject to appropriate authorization by the
affiliate, subsidiary or successor involved and any limitation under
applicable law.
During the course of Officer's employment as a full-time officer
hereunder, Officer shall not, without the consent of Employer, compete,
directly or indirectly, with Employer in the business then conducted by
Employer or any of its affiliates or successors.
Officer may make and manage personal business investments of his choice
and serve in any capacity with any civic, educational or charitable
organization, or any governmental entity or trade association, without
seeking or obtaining approval by the Board of Directors, provided such
activities and services do not materially interfere or conflict with
the performance of his duties hereunder.
4. COMPENSATION AND BENEFITS.
a. BASE SALARY. Employer shall pay to Officer a base salary in
respect of the fiscal year of Employer (a "Fiscal Year")
ending December 31, 2002 at the annual rate of $275,000 (the
"Annual Rate"). In respect of the Fiscal Years ending in 2004,
2005 and 2006, the Chief Executive Officer of Employer may
increase the Annual Rate. While any such increase shall be at
the discretion of the Chief Executive Officer, it is
anticipated that, for any Fiscal Year, if Employer obtains its
earnings per share goal and the Officer receives a performance
rating of "meets expectations consistently," the Annual Rate
would possibly be increased between 0% and 10%. During the
term of this Agreement, Employer may not decrease the Annual
Rate below $275,000.
b. INCENTIVE COMPENSATION. Employer shall pay to Officer for each
of the Fiscal Years ending during the term of this Agreement
an incentive compensation award in an amount determined
pursuant to the Annual Incentive Plan attached hereto as
Appendix A. The target incentive compensation for 2002 shall
be $250,000. The target incentive amount will be reviewed
annually, and may be increased by the Chief Executive Officer
of Employer based upon Officer's performance and that of
Employer's. The terms of the Annual Incentive Plan shall be
determined in the first quarter of each Fiscal year during the
term of this Agreement, as mutually agreed upon by Employer
and Officer. If a new annual incentive plan is not executed by
Employer and Officer for any reason by the end of the first
quarter of the Fiscal Year, then the maximum incentive
compensation award for the new Fiscal Year shall be deemed set
at 25% of Officer's base salary. In order to be eligible for
the incentive compensation award, Officer must still be
employed as of March 31st of the Fiscal Year
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following the relevant Fiscal Year. The incentive compensation
award payable to Officer for any Fiscal Year shall be paid no
later than thirty (30) days after completion and publication
of the applicable audited financial statements for such Fiscal
Year.
c. GUARANTEED MINIMUM ANNUAL COMPENSATION. For each of the Fiscal
Years ending during the term of this Agreement, Officer shall
receive a guaranteed minimum annual cash compensation equal to
125% of the base salary, the components of which shall include
his base salary for such Fiscal Year and any incentive
compensation award applicable to such Fiscal Year, provided
Officer is still employed by Employer as of March 31 of the
following Fiscal Year.
d. STOCK OPTIONS AND RESTRICTED STOCK. On October 29, 2002, the
Management Development and Compensation Committee of the Board
of Directors ("Compensation Committee") of Employer's public
company affiliate, IndyMac Bancorp, Inc., or any successor
public company ("Public Company"), shall grant to Officer
stock options for 100,000 shares of the Public Company's
common stock, such options to be exercisable as to 20,000
shares each on October 29, 2003, 2004, 2005, 2006 and 2007.
Beginning with the 2004 Fiscal Year and in respect of each of
the following Fiscal Years during the term of this Agreement,
Public Company, may grant to Officer stock options and/or
restricted stock for such number of shares of the Public
Company's common stock as the Compensation Committee of the
Board of Directors of the Public Company ("Compensation
Committee") in its sole discretion determines, taking into
account Officer's and the Public Company's performance and the
competitive practices then prevailing regarding the granting
of stock options. Subject to the foregoing, it is anticipated
that the number of shares in respect of each annual stock
option and/or restricted stock grant shall be in accordance
with the number of shares granted to officers of Employer at a
level similar to Officer's level. The stock options and/or
restricted stock described in this Section 4(d) in respect of
a Fiscal Year shall be granted at the same time as the Public
Company grants stock options and/or restricted stock to its
other officers in respect of such Fiscal Year.
Officer agrees that any stock options or restricted stock
granted to him under his prior Employment Agreement(s), or
granted separate from any such Employment Agreement(s), shall
be subject to the terms of the 2002 Stock Option Plan except
as may be expressly provided otherwise in this Agreement.
All stock options and restricted stock granted in accordance
with this Section 4(d): (i) shall be granted pursuant to the
Public Company's current stock option plan, or such other
stock option plan or plans as may be or come into effect
during the term of this Agreement, (ii) shall be priced and
vest in accordance with the terms set by the Compensation
Committee, (iii) shall be subject to such other reasonable
terms and conditions as may be determined by the Compensation
Committee and set forth in the agreement or other document
evidencing the award, (iv) in the event that Officer's
employment is terminated
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due to death or Disability, shall, if then unvested, become
immediately and fully vested, (v) in the event that Officer's
employment is terminated through resignation or by Employer
for either Cause (as defined in Section 5(c)) or Poor
Performance (as defined in Section 5(d)), shall, if not then
vested, immediately terminate, and (vi) in the event that
Officer's employment is terminated by Employer other than for
Cause (as defined in Section 5(e)), shall, if not then vested,
become immediately and fully vested only to the extent that
such restricted stock or stock options would, under the terms
of such restricted stock or stock options, vest within one (1)
year of such termination.
All stock options granted in accordance with this Section 4(d)
shall give Officer the right, upon termination of his
employment hereunder, other than for Cause or Poor Performance
(as defined in Section 5(e)), to exercise such options for a
period of between 3 months and 12 months after such
termination as provided hereinafter (but in no event later
than their expiration date). In the event the vested options
held by Officer immediately after such termination represent
shares of common stock in an amount equal to or greater than
500,000, then the maximum period for the exercise of any
options shall be 12 months. In the event the vested options
held by Officer immediately after such termination represent
shares of common stock in an amount equal to or greater than
100,000 but less than 500,000, then the maximum period for the
exercise of any options shall be 6 months. In the event the
vested options held by Officer immediately after such
termination represent shares of common stock in an amount less
than 100,000, then the maximum period for their exercise shall
be 3 months.
If the Board of Directors of Employer determines, in its sole
and absolute discretion, that Officer is exhibiting "Poor
Performance," as described in Section 5(d), but there is not a
resulting termination of Officer's employment, the
Compensation Committee may, in its sole and absolute
discretion, cancel any outstanding, but unvested stock options
or restricted stock that were previously granted to Officer.
In the event that a New Public Company is formed and Officer
is assigned by the Chief Executive Officer to be employed by
that New Public Company, if such New Public Company is traded
on the New York Stock Exchange or the NASDAQ, then, in the
discretion of the Chief Executive Officer, up to 50% of the
not-yet-vested stock options and restricted stock of Officer
(whether previously granted hereunder or otherwise) may be
terminated and replaced with such alternate incentive
compensation (which may include stock options and/or
restricted stock of the New Public Company) as the Chief
Executive Officer may determine in his sole and absolute
discretion, provided such replacement compensation is
equivalent to the value of the replaced stock options and
restricted stock. Such alternate incentive compensation may be
granted on such terms and conditions as determined by the
Chief Executive Officer, which terms and conditions may differ
from those in this Agreement
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for comparable compensation, provided such terms and
conditions provide an equivalent value to the replaced
compensation. The Company shall select and retain a nationally
recognized firm to determine the value of the stock options
and restricted stock to be replaced and the value of the
replacement compensation, and such firm's final valuation
shall be accepted by both parties.
e. FINANCIAL PLANNING SERVICES. Employer shall pay for the
financial planning and tax services of AYCO for Officer,
including a full tax gross-up for any imputed income to
Officer resulting from such benefit. The annual amount that
Employer shall be required to pay for such services shall not
exceed $15,000, exclusive of the tax gross-up.
f. ADDITIONAL BENEFITS. Officer shall also be entitled to all
rights and benefits for which he is otherwise eligible under
any bonus plan, stock purchase plan, participation or extra
compensation plan, executive compensation plan, pension plan,
profit-sharing plan, deferred compensation plan, life and
medical insurance policy, or other plans or benefits, which
Employer or its subsidiaries may provide for him, or provided
he is eligible to participate therein, for senior officers
generally or for employees generally, during the term of this
Agreement (collectively, "Additional Benefits"). Officer shall
also be entitled to three (3) weeks of vacation each Fiscal
Year, subject to all applicable policies of Employer relating
to vacation time. This Agreement shall not affect the
provision of any other compensation, retirement or other
benefit program or plan of Employer. If Officer's employment
is terminated hereunder, pursuant to Section 5(a), 5(b) or
5(e), Employer shall continue for the period specified in
Section 5(a), 5(b) or 5(e) hereof, to provide benefits
substantially equivalent to the life, disability and medical
insurance policies on behalf of Officer and his dependents and
beneficiaries which were being provided to them immediately
prior to Officer's Termination Date, but only to the extent
that Officer is not entitled to comparable benefits from other
employment.
5. TERMINATION. The compensation and benefits provided for herein and the
employment of Officer by Employer shall be terminated only as provided
for below in this Section 5:
a. DISABILITY. In the event that Officer shall fail (with or
without reasonable accommodation), because of illness, injury
or similar incapacity ("Disability"), to render for four (4)
consecutive calendar months, or for shorter periods
aggregating eighty (80) or more business days in any twelve
(12) month period, services contemplated by this Agreement,
Officer's full-time employment hereunder may be terminated, by
written Notice of Termination from Employer to Officer; and
thereafter, Employer shall continue, from the Termination Date
until Officer's death or December 31, 2006, whichever first
occurs (the "Disability Payment Period"), (i) to pay
compensation to Officer, in the same manner as in effect
immediately prior to the Termination Date, in an amount equal
to (1) fifty percent (50%) of the then existing base salary
payable
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immediately prior to the termination, minus (2) the amount of
any cash payments due to him under the terms of Employer's
disability insurance or other disability benefit plans (which
are paid for by Employer) or Employer's tax-qualified Defined
Benefit Pension Plan, and any compensation he may receive
pursuant to any other employment, and (ii) to provide during
the Disability Payment Period the additional benefits
specified in the last sentence of Section 4(e) hereof. To the
extent not otherwise vested, all outstanding stock options and
restricted stock granted to Officer pursuant to Section 4(d)
will vest upon his termination because of Disability.
The determination of Disability shall be made only after 30
days' notice to Officer (which may run concurrently with the
Notice of Termination). In order to determine Disability, both
Employer and Officer shall have the right to provide medical
evidence to support their respective positions, with the
ultimate decision regarding Disability to be made by a
majority of the members of Employer's Benefits Committee.
b. DEATH. In the event that Officer shall die during the term of
this Agreement, Employer shall pay to such person or persons
as Officer shall have directed in writing or, in the absence
of a designation, to his estate (the "Beneficiary") an amount
equal to two times the guaranteed annual compensation as
defined in Section 4(c). Such payment shall be made within 45
days of the death of Officer. Employer shall also provide
during the twelve-month period following the date of Officer's
death the additional benefits specified in the last sentence
of Section 4(e) hereof. If Officer's death occurs while he is
receiving payments for Disability under Section 5(a) above,
such payments shall cease and the Beneficiary shall be
entitled to the payments and benefits under this Section 5(b).
This Agreement in all other respects will terminate upon the
death of Officer; provided, however, that (i) the termination
of the Agreement shall not affect Officer's entitlement to all
other benefits in which he has become vested or which are
otherwise payable in respect of periods ending prior to its
termination, and (ii) to the extent not otherwise vested, all
outstanding stock options and restricted stock granted to
Officer pursuant to Section 4(d) will vest upon his death.
c. CAUSE. Employer may terminate Officer's employment under this
Agreement for "Cause." A termination for Cause is a
termination by reason of (i) a material breach of this
Agreement by Officer (other than as a result of incapacity due
to physical or mental illness) which is committed in bad faith
or without reasonable belief that such breach is in the best
interests of Employer, (ii) Officer's breach of the terms of
any promissory note executed by the Officer for any loan to
the Officer made by Employer pursuant to the Employer's Loan
Plan, including a failure to meet a margin call (iii) an act
or omission to act by the Officer involving (a) negligence or
misconduct resulting in a material loss or material loss in
revenue (material to be determined in the sole discretion of
the CEO) (negligence or misconduct shall include, but not be
limited to, the failure to properly supervise staff, the
failure to establish,
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maintain and enforce proper written policies and procedures,
and the failure to properly staff and train to ensure the
proper and consistent enforcement of policies and procedures),
(b) gross negligence, (c) gross misconduct with respect to or
intentional failure to perform Officer's stated duties, (d)
commission of a fraud, theft, dishonesty, or any knowing or
deliberate action or inaction in contravention of a direct
order from the Officer's direct supervisor which is within the
scope of this Agreement and does not involve the performance
of an illegal act or omission to act, (iv) Officer's willful
violation of any law, rule or regulation of a governmental
authority (other than traffic violations or similar offenses)
or final cease-and-desist order, or (v) entry of an order duly
issued by any federal or state regulatory agency having
jurisdiction in the matter removing Officer from office of
Employer or its affiliates or permanently prohibiting him from
participation in the conduct of the affairs of Employer of any
of its affiliates. If Officer shall be convicted of a felony
or misdemeanor carrying a jail term, or shall be removed from
office and/or suspended or temporarily prohibited from
participating in the conduct of Employer's or any of its
affiliates' affairs by any federal or state regulatory
authority having jurisdiction in the matter, Employer's
obligations under Sections 4(a), 4(b), 4(c), and 4(d) hereof
shall be automatically suspended; provided, however, that if
the charges resulting in such removal or prohibition are
finally dismissed or if a final judgment on the merits of such
charges is issued in favor of Officer, or if the conviction is
overturned on appeal, then Officer shall be reinstated in full
with back pay for the removal period plus accrued interest at
the rate then payable on judgments. During the period that
Employer's obligations under Sections 4(a), 4(b), 4(c), and
4(d) hereof are suspended, Officer shall continue to be
entitled to receive Additional Benefits under Section 4(e)
until the conviction of the felony, or misdemeanor carrying a
jail term, or removal from office has become final and
non-appealable. When the conviction of the felony or removal
from office has become final and non-appealable, all of
Employer's obligations hereunder shall terminate; provided,
however, that the termination of Officer's employment pursuant
to this Section 5(c) shall not affect Officer's entitlement to
all benefits in which he has become vested or which are
otherwise payable in respect of periods ending prior to his
termination of employment. Following a termination for Cause,
Officer shall be entitled to payment of his base salary
through his last day of employment, and any accrued vacation
pay, but no other payments or benefits hereunder or otherwise
whatsoever.
d. POOR PERFORMANCE. Employer may terminate Officer's employment
under this Agreement for "Poor Performance." Poor Performance
is a failure of the Officer to properly meet the duties and
responsibilities of his position in a competent fashion, as
determined by the Chief Executive Officer. Following a
termination for Poor Performance, the Officer shall be
entitled to payment of his base salary through his last day of
employment, and, within 30 days after such last day, a single
payment in an amount equal to the guaranteed minimum annual
compensation as defined in Section 4(c), but no other payments
or
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benefits hereunder or otherwise whatsoever, subject to the
terms of Section 5(e)(iii).
e. TERMINATION OTHER THAN FOR CAUSE OR POOR PERFORMANCE.
(i) Except as provided in Section 5(e)(ii) below, if
during the term of this Agreement, Officer's
employment shall be terminated by Employer other than
for Cause or Poor Performance, then Officer shall be
entitled to:
(1) payment of his base salary through his last
day of employment, but no payment on account
of any further incentive compensation
hereunder, and
(2) within 30 days after such last day, a single
payment in an amount equal to an amount in
cash equal to two times the guaranteed
minimum annual compensation as defined in
Section 4(c); provided, however, if such
termination shall occur within two (2) years
after a change in control, as declared by
the Board of Directors, and during the term
of this Agreement, then such payment shall
be in an amount equal to an amount in cash
equal to two (2) times Officer's total
compensation (base salary plus bonus) for
the Fiscal Year proceeding such termination,
and
(3) for a period of one year following such last
day, the benefits specified in the last
sentence of Section 4(e) hereof.
(ii) Not withstanding anything in this Agreement to the
contrary, in the event it shall be determined that
any payment or distribution by Employer or any other
person or entity to or for the benefit of Officer
(within the meaning of Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the
"Code")), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of,
his employment with Employer or a change in ownership
or effective control of Employer or a substantial
portion of its assets (a "Payment"), would be subject
to the excise tax imposed by Section 4999 of the Code
(the "Excise Tax"), the Payments shall include
gross-up for any excise taxes due under IRC 280G or
similar "golden parachute" provisions plus any
excise, income, or payroll taxes owed on the payment
on the excise payment amount.
(iii) In order to receive the amounts provided by Sections
5(d) or 5(e), other than Base Salary through the last
day of employment, Officer agrees that for a period
of one year after termination of employment either
for Poor Performance or other than for Cause, Officer
shall not engage in any business, whether as an
employee, consultant, partner, principal,
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agent, representative or stockholder (other than as a
stockholder of less than 1% equity interest) or in
any other corporate or representative capacity with
any other business whether in corporate,
proprietorship, or partnership form or otherwise,
where such business is engaged in any activity which
competes with the business of Employer or its
subsidiaries or affiliates, as conducted on the date
Officer's employment terminated or which will compete
with any proposed business activity of Employer or
its subsidiaries or affiliates, in the planning stage
on such date.
If the foregoing agreement is determined invalid or
unenforceable by a Court in an interpretation of this
Agreement, then Officer agrees that he shall return
the amounts received pursuant to Sections 5(d) and
5(e), other than the Base Salary through the last day
of employment.
f. RESIGNATION. If during the term of this Agreement, Officer
shall resign voluntarily, Officer shall be entitled to payment
of his base salary through his last day of employment, but all
other rights to payment or benefits hereunder shall
immediately terminate; provided, however, that the termination
of Officer's employment pursuant to this Section 5(f) shall
not affect Officer's entitlement to all benefits in which he
has become vested or which are otherwise payable in respect of
periods ending prior to his termination of employment, and all
obligations of Officer under Sections 9(f) and 9(j) shall
expressly survive such termination. If Officer resigns as a
result of a material breach by Employer, which breach is not
cured by Employer within 30 days' receipt of written notice,
then Officer's resignation will be considered as a Termination
Other Than For Cause pursuant to Section 5(e) for all purposes
of this Agreement.
g. NOTICE OF TERMINATION. Any purported termination by Employer
or by Officer (including any resignation) shall be
communicated by a written Notice of Termination to the other
party hereto which indicates the specific termination
provision in this Agreement, if any, relied upon and which
sets forth in reasonable detail the facts and circumstances,
if any, claimed to provide a basis for termination of
Officer's employment under the provision so indicated. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination. The
"Termination Date" shall mean the date specified in the Notice
of Termination, which shall be no less than 30 or more than 60
days from the date of the Notice of Termination.
Notwithstanding any other provision of this Agreement, in the
event of any termination of Officer's employment hereunder for
any reason, Employer shall pay Officer his full base salary
through the Termination Date, plus any Additional Benefits
which have been earned or become payable, but which have not
yet been paid, as of such Termination Date.
6. LOCATION OF SERVICES. Officer is required to perform his services under
this Agreement at such present or future business location of Company
as may be designated by the
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Chief Executive Officer in the Counties of Los Angeles, Orange or
Ventura, California or wherever the Corporate Headquarters of Employer
may be located.
a. IN GENERAL. If Employer requests Officer to relocate outside
of the locations referenced above, Officer shall have the
option of agreeing to such relocation and the terms of this
Agreement shall continue in full force and effect. If Officer
declines to relocate outside of the locations referenced
above, either the Officer or Employer shall provide the other
party with a Notice of Termination in accordance with Section
5(g) and the Officer will be deemed to have been terminated
pursuant to Section 5(e).
b. CHANGE IN CONTROL. For two years following a change in control
of the Company, as declared by the Board of Directors,
Employer may only require Officer to relocate within the three
counties identified above and only if such relocation is to
the Corporate Headquarters location of Employer. During this
time period, if Employer requests that Officer relocate
outside of the three counties identified above, or within the
three counties, but not to the Corporate Headquarters
location, Officer shall have the option of agreeing to such
relocation and the terms of this Agreement shall continue in
full force and effect. If Officer declines to relocate outside
of the locations referenced above, either the Officer or
Employer shall provide the other party with a Notice of
Termination in accordance with Section 5(g) and the Officer
will be deemed to have been terminated pursuant to Section
5(e).
7. REIMBURSEMENT OF BUSINESS EXPENSES. During the term of this Agreement,
Employer shall reimburse Officer promptly for all business expenditures
to the extent that such expenditures meet the requirements of the Code
for deductibility by Employer for federal income tax purposes or are
otherwise in compliance with the rules and policies of Employer and are
substantiated by Officer as required by the Internal Revenue Service
and rules and policies of Employer.
8. INDEMNITY. To the extent permitted by applicable law, the Certificate
of Incorporation and the By-Laws of Employer (as from time to time in
effect) and any indemnity agreements entered into from time to time
between Employer and Officer, Employer shall defend and indemnify
Officer and hold him harmless for any acts or decisions made by him in
good faith while performing services for Employer (including any
subsidiary or affiliate of Employer), and shall use reasonable efforts
to obtain coverage for him under liability insurance policies now in
force or hereafter obtained during the term of this Agreement covering
the other officers or directors of Employer.
9. MISCELLANEOUS.
a. SUCCESSORSHIP. This Agreement shall inure to the benefit of
and shall be binding upon Employer, its successors and
assigns, but without the prior written consent of Officer,
this Agreement may not be assigned other than in connection
with a merger or sale of Employer or the sale of substantially
all
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the assets of Employer or similar transaction. Notwithstanding
the foregoing, Employer may assign, whether by assignment
agreement, merger, operation of law or otherwise, this
Agreement to the Public Company or to any successor or
affiliate of Employer or the Public Company, subject to such
assignee's express assumption of all obligations of Employer
hereunder. The failure of any successor to or assignee of the
Employer's business and/or assets in such transaction to
expressly assume all obligations of Employer hereunder shall
be deemed a Termination Other Than For Cause pursuant to
Section 5(e).
The obligations and duties of Officer hereby shall be personal
and not assignable.
b. NOTICES. Any notices provided for in this Agreement shall be
sent to Employer at its corporate headquarters, Attention:
General Counsel, with a copy to the Director of Human
Resources at the same address, or to such other address as
Employer may from time to time in writing designate, and to
Officer at such address as he may from time to time in writing
designate (or his business address of record in the absence of
such designation). All notices shall be deemed to have been
given two (2) business days after they have been deposited as
certified mail, return receipt requested, postage paid and
properly addressed to the designated address of the party to
receive the notices.
c. ENTIRE AGREEMENT. This instrument contains the entire
agreement of the parties relating to the subject matter
hereof, and it replaces and supersedes any prior agreements
between the parties relating to said subject matter; provided,
however, that all provisions of Employer's Employee Handbook
shall be incorporated herein by this reference and Officer
hereby expressly acknowledges that all provisions of the
Employee Handbook are applicable to his employment
relationship with Employer, except to the extent that any such
provisions directly conflict with any term contained in this
Agreement; provided, further, that Officer hereby expressly
acknowledges that Officer has executed Employer's standard
Arbitration Agreement which generally requires that any
dispute under this Agreement will be arbitrated. No
modifications or amendments of this Agreement shall be valid
unless made in writing and signed by the parties hereto.
d. WAIVER. The waiver of the breach of any term or of any
condition of this Agreement shall not be deemed to constitute
the waiver of any other breach of the same or any other term
or condition.
e. CALIFORNIA LAW. This Agreement shall be construed and
interpreted in accordance with the laws of California, without
reference to its conflicts of laws principles.
f. CONFIDENTIALITY. Officer hereby acknowledges and agrees that
Employer and its affiliates have developed and own valuable
information related to their business, personnel and
customers, including, but not limited to, concepts,
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ideas, customer lists, business lists, business and strategic
plans, financial data, accounting procedures, secondary
marketing and hedging models, trade secrets, computer programs
and plans, and information related to officers, directors,
employees and agents. Officer hereby agrees that all such
information, and all codes, concepts, copies and forms
relating to such information, Employer's plans and intentions
with respect thereto, and any information provided by Employer
or its affiliates to Officer with respect to any of the
foregoing, shall be considered "Confidential Information" for
the purpose of this Agreement. Officer acknowledges and agrees
that all such Confidential Information is a valuable asset of
Employer, and if developed by Officer, is developed by Officer
in the course of Officer's employment with Employer, and is
the sole property of Employer. Officer agrees that he will not
divulge or otherwise disclose, directly or indirectly, any
Confidential Information concerning the business or policies
of Employer or any of its affiliates which he may have learned
as a result of his employment during the term of this
Agreement or prior thereto as an employee, officer or director
of or consultant to Employer or any of its affiliates, except
to the extent such use or disclosure is (i) necessary or
appropriate to the performance of this Agreement and in
furtherance of Employer's best interests, (ii) required by
applicable law or in response to a lawful inquiry from a
governmental or regulatory authority, (iii) lawfully
obtainable from other sources, or (iv) authorized by Employer.
Furthermore, in order to protect the trade secret or
confidential information of Employer, Officer hereby agrees
not to accept any employment or engage in any activities
competitive with the Employer for a period of one year after
termination of employment if the loyal and complete
fulfillment of the duties of the competitive employment or
activities would inherently call upon Officer to reveal or use
any of the trade secret or Confidential Information of
Employer to which Officer had access during employment by
Employer. The provisions of this subsection shall survive the
expiration, suspension or termination, for any reason, of this
Agreement.
g. REMEDIES OF EMPLOYER. Officer acknowledges that the services
he is obligated to render under the provisions of this
Agreement are of a special, unique, unusual, extraordinary and
intellectual character, which gives this Agreement peculiar
value to Employer. The loss of these services cannot be
reasonably or adequately compensated in damages in an action
at law and it would be difficult (if not impossible) to
replace these services. By reason thereof, Officer agrees and
consents that if he violates any of the material provisions of
this Agreement, Employer, in addition to any other rights and
remedies available under this Agreement or under applicable
law, shall be entitled during the remainder of the term to
seek injunctive relief, from a tribunal of competent
jurisdiction, restraining Officer from committing or
continuing any violation of this Agreement. The provisions of
this subsection shall survive the expiration, suspension or
termination, for any reason, of this Agreement.
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h. SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable, the remainder of this Agreement
shall nevertheless remain in full force and effect, and if any
provision is held invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.
i. NO OBLIGATION TO MITIGATE. Officer shall not be required to
mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and, except
as provided in Section 5(a) hereof, no payment hereunder shall
be offset or reduced by the amount of any compensation or
benefits provided to Officer in any subsequent employment.
j. NO SOLICITATION.
(i) IN GENERAL. Officer agrees that during employment and
for a period of one year after termination of such
employment, Officer shall not:
(1) Solicit, or cause to be solicited, any customers
of Employer for purposes of promoting or selling
any products or services competitive with those
of Employer;
(2) Solicit business from, or perform services for,
any company or other business entity which at
any time during the two year period immediately
preceding Officer's termination of employment
with Employer was a client of Employer, or its
subsidiaries or affiliates; or
(3) Solicit for employment, offer, or cause to be
offered, employment, either on a full time, part
time, or consulting basis, to any person who was
employed by Employer or its subsidiaries or
affiliates on the date Officer's employment
terminated, unless Officer shall have received
the prior written consent of Employer.
(ii) CONSIDERATION. The consideration for the foregoing
covenants, the sufficiency of which is hereby
acknowledged, is Employer's agreement to continue to
employ Officer and provide compensation and benefits
pursuant to this Agreement, including but not limited
to Section 5 (d), (e), and (f).
(iii) EQUITABLE RELIEF AND OTHER REMEDIES. Officer
acknowledges and agrees that Employer's remedies at
law for a breach or threatened breach of any of the
provisions of this Section would be inadequate and,
in recognition of this fact, Officer agrees that, in
the event of such a breach or threatened breach, in
addition to any remedies at law, Employer, without
posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance,
a temporary
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restraining order, a temporary or permanent
injunction or any other equitable remedy which may
then be available.
(iv) REFORMATION. The foregoing No Solicitation provisions
are intended to restrict Officer only to the extent
permitted by law in the jurisdiction where Officer is
then a resident. To the extent the No Solicitation
Provisions would otherwise be determined invalid or
unenforceable by a Court of competent jurisdiction,
such Court shall exercise its discretion in reforming
the provisions of this Section to the end that
Officer shall be subject to reasonable no
solicitation provisions that are enforceable by
Employer under the laws of the jurisdiction where
Officer is then a resident. If the laws of the state
where the Officer is then a resident completely
prohibit any form of the foregoing covenants, then
Employer and Officer understand and agree that the
foregoing covenants are of no effect.
10. REGULATORY INTERVENTION. Notwithstanding anything in this Agreement to
the contrary, this Agreement is subject to the following terms and
conditions:
(i) If Officer is suspended and/or temporarily prohibited
from participating in the conduct of Employer's
affairs by a notice served under Section 8(e)(3) or
(g)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1818 (e)(3) and (g)(1)), Employer's
obligations hereunder shall be suspended as of the
date of service unless stayed by appropriate
proceedings. If the charges in the notice are
dismissed, Employer shall (x) pay Officer all or part
of the compensation withheld while Employer's
contract obligations were suspended, and (y)
reinstate any of Employer's obligations which were
suspended.
(ii) If Officer is removed and/or permanently prohibited
from participating in the conduct of Employer's
affairs by an order issued under Section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1818 (e)(4) and (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.
(iii) If Employer is in default (as defined in Section
3(x)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1813 (x)(1)), all obligations under this
Agreement shall terminate as of the date of default,
but any vested rights of Officer shall not be
affected.
(iv) All obligations under this Agreement shall be
terminated, except to the extent determined that
continuation of the contract is necessary for the
continued operation of Employer, (x) by the Office of
Thrift Supervision ("OTS") at the time the Federal
Deposit Insurance Corporation ("FDIC") enters into an
agreement to provide assistance to or on behalf of
Employer under the authority contained in Section
13(c)
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of the Federal Deposit Insurance Act (12 U.S.C. 1823
(c)); or (y) by the OTS at the time the OTS approves
a supervisory merger to resolve problems related to
operation of Employer or when Employer is determined
by the OTS to be in an unsafe or unsound condition.
Any rights of Officer that shall have vested under
this Agreement shall not be affected by such action.
(v) With regard to the provisions of this Section 10(i)
through (iv):
A. Employer agrees to use its best efforts to oppose any
such notice of charges as to which there are
reasonable defenses;
B. In the event the notice of charges is dismissed or
otherwise resolved in a manner that will permit
Employer to resume its obligations to pay
compensation hereunder, Employer will promptly make
such payment hereunder; and
C. During the period of suspension, the vested rights of
the contracting parties shall not be affected except
to the extent precluded by such notice.
(vi) Any payments made to Officer by Employer pursuant to
this Agreement, or otherwise, are subject to and
conditioned upon their compliance with 12 U.S.C.
1828(k) and any regulations promulgated there under.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
EMPLOYER
By: ______________________________________
Name: Michael W. Perry
Title: Vice Chairman and Chief Executive Officer
Officer:
_________________________________________
in his individual capacity
PARENT COMPANY GUARANTY
IndyMac Bancorp, Inc. ("Bancorp") is the parent holding company of Employer and
benefits directly from the strength and continuity of the management of
Employer. Accordingly, Bancorp hereby assures and guaranties the full and timely
satisfaction of all monetary and other obligations of Employer to Officer under
the Agreement. This guaranty is a guaranty of payment and not collection. This
guaranty shall continue in full force and effect notwithstanding any future
modifications, extensions or renewals to the Agreement that may be made by
Employer. Bancorp hereby waives any and all suretyship or other similar defenses
that may be available to it with respect to this guaranty to the full extent
permitted by applicable law.
IndyMac Bancorp, Inc.
By: _________________________
_________________________
Michael W. Perry
Vice Chairman & Chief Executive Officer
Date: _______________________
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APPENDIX A
PROFIT CENTER
ANNUAL INCENTIVE PLAN
Officer Name: John Olinski
Annual Base Rate for 2002: $275,000 Annual Grant of Stock Options:
Target Annual Bonus for 2002: $250,000 25% of Total Comp (# of shares to be
Target Quarterly Bonus for calculated by dividing Total Comp by
2002: $0 Black Scholes Value of Options)
Annual or Quarterly Incentive Awards:
Officer shall be eligible for an Annual or Quarterly Incentive Awards (as
applicable), which shall be comprised of the following components:
1. Business Metrics
2. Earnings Per Share (Wrap)
3. Safety and Soundness, Compliance, Internal Audit and Internal
Controls (Wrap)
4. Subjective Assessment (Wrap)
These components shall be measured as follows: Measurement of
Components Intentionally Omitted.