Employment Agreement - IndyMac Mortgage Holdings Inc., IndyMac Inc. and Michael W. Perry
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") has been executed as of
February 4, 2000 by and between IndyMac Mortgage Holdings, Inc. and
IndyMac, Inc. (each of which is individually and collectively referred to
as the "Employer") and Michael W. Perry ("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 February 5,
2003, 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 as Chief Executive Officer of Employer.
Employer agrees that Officer's duties hereunder shall be the usual and
customary duties of such offices and such further duties shall not be
inconsistent with the provisions of applicable law. Officer shall have such
executive 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.
Employer agrees that it will nominate Officer to be elected to the Board of
Directors of Employer (subject to shareholder approval) and that, as long
as Officer serves on the Board of Directors, he will serve as Vice Chairman
of the Board. In the event Officer is not elected to the Board of
Directors, Officer can elect to treat such action as a Termination Other
Than For Cause pursuant to Section 5(d).
In the event of a material diminution in Officer's position, powers,
reporting requirements, duties or responsibilities as Chief Executive
Officer, which is not cured within thirty (30) days after receipt by
Employer of written notice of such material diminution, Officer can elect
to treat such action as a Termination Other Than For Cause pursuant to
Section 5(d).
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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 business, affairs
and interests of Employer and its affiliates and perform services
contemplated hereby, in accordance with the policies established by the
Board, which policies shall be consistent with this Agreement. Officer
agrees to serve without additional remuneration as an officer or director
of one or more (direct or indirect) subsidiaries or affiliates of Employer
as the Board may from time to time request, subject to appropriate
authorization by the affiliate or subsidiary involved and any limitation
under applicable law. Officer's failure to discharge an order or perform a
function because Officer reasonably and in good faith believes such would
violate a law or regulation or be dishonest shall not be deemed a breach by
him of his obligations or duties pursuant to any of the provisions of this
Agreement, including without limitation pursuant to Section 5(c) hereof.
During the course of Officer's employment as a full-time officer hereunder,
Officer shall not, without the consent of the Board, compete, directly or
indirectly, with Employer in the business then conducted by Employer or any
of its affiliates.
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, 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 portion of the fiscal year of Employer (a "Fiscal Year") ending
December 31, 2000 at the annual rate of $760,000 (the "Annual Rate"),
beginning on the date hereof. On or after the beginning of each Fiscal
Year commencing January 1, 2001, the Compensation Committee of the
Board (the "Compensation Committee") may, based upon the recommendation
of the chairman of the Compensation Committee and Board of Directors'
approval and the performance of Officer and Employer, increase the
Annual Rate. While any such increase shall be at the discretion of the
Compensation Committee, it is anticipated that such increase will be at
least an increase of 10% of the Annual Rate, but could vary from such
percentage in the judgment of the Compensation Committee.
b. Incentive Compensation. Generally, Employer shall pay to Officer for
each of the Fiscal Years ending during the term of this Agreement no
incentive compensation award, provided, however, that the decision
whether or not to award Officer incentive compensation (including
without limitation additional stock incentives, compensation or
benefits) and the amount, if any, shall be at the sole and absolute
discretion of the Compensation Committee.
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c. Stock Options. Employer shall grant to Officer a stock option grant of
1,000,000 shares of the Employer's common stock on February 4, 2000 and
1,000,000 shares of the Employer's common stock on February 5, 2001.
These stock option grants shall vest equally over 5 years from their
respective date of grant.
Officer agrees that any stock options or restricted stock granted to
him under his prior Employment Agreements shall be subject to the
vesting schedule provided therein and shall otherwise be subject to the
terms of this Agreement.
All stock options and restricted stock governed by this Section 4(c):
(i) shall be granted pursuant to Employer'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 have a per share exercise
price equal to the fair market value (as defined in the current stock
option plan or such other plan or plans) of the common stock at the
time of grant, (iii) shall become immediately and fully vested and
granted if not yet vested or granted in the event of a Change in
Control (as defined in Appendix A) or in the event that Officer's
employment is terminated due to death or Disability or by Employer
other than for Cause ("Cause" as defined in Section 5(c)) or in the
event that this Agreement terminates according to its terms (as
provided in Section 5(g)), and (iv) shall give Officer the right, upon
termination of his employment hereunder, other than for Cause, to
exercise such options for a period of twelve (12) months after such
termination (but in no event later than their expiration date).
All stock options and restricted stock shall be subject to such other
reasonable and consistent terms and conditions as may be determined by
the Compensation Committee and set forth in the memorandum evidencing
the award.
d. 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"). 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(d), Employer shall
continue for the period specified in Section 5(a), 5(b) or 5(d) 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.
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e. Certain Perquisites.
(i) Club Memberships. Employer shall pay standard annual and monthly
membership fees and any business related charges for Officer's
participation in the Young Presidents' Organization, the San
Gabriel Country Club, the California Club, and such other
memberships as may be approved by the Compensation Committee.
(ii) Car Allowance. Employer shall either provide Officer with an
appropriate luxury automobile for Officer's exclusive use or pay
Officer an equivalent monthly automobile allowance, such
automobile or amount to be mutually agreed to by the Compensation
Committee and Officer.
(iii) Travel. In connection with business travel. Officer shall be
permitted to travel first class, or by chartered service where
appropriate, and to be reimbursed by Employer for such travel
expenses.
(iv) 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 $25,000, exclusive of
the tax gross-up.
(v) Split Dollar Life Insurance. Employer shall provide a split
dollar life insurance policy in a face amount equal to four (4)
times Officer's Base Salary, on the life of Officer. The terms of
such life insurance will be set forth in a separate memorandum.
f. Employer Liability. IndyMac Mortgage Holdings, Inc. and IndyMac, Inc.
are fully liable for the full amount of compensation and benefits
payable to Officer. It is anticipated that initially all compensation
will be paid by IndyMac, Inc. and that any allocation of the costs of
such compensation between IndyMac Mortgage Holdings, Inc. and IndyMac,
Inc. will be set forth in a separate agreement between those two
entities.
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, because of illness,
injury or similar incapacity ("Disability"), to render for six (6)
consecutive months or for shorter periods aggregating one hundred
twenty (120) 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 February 5, 2003, whichever
first occurs (the "Disability Payment Period"), (i) to pay compensation
to Officer,
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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 immediately prior to the termination,
minus (2) the amount of any cash payments to him under the terms of
Employer's disability insurance or other disability benefit plans 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 benefits specified
in the last sentence of Section 4(d) hereof.
The determination of Disability shall be made only after Officer has
failed to render services for the above stated time periods and 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
Employer's disinterested directors.
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 $5,000,000.00, which
amount shall be in addition to any other benefits to be paid upon
Officer's death, including any life insurance payments. Such payment
will be made within 30 days of the death of Officer. 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 Subsection 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 granted to Officer pursuant to
Section 4(c) 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 and which, for any breach that is remediable, is
not remedied within a reasonable period of time after receipt of
written notice from Employer specifying such breach, or (ii) Officer's
conviction by a court of competent jurisdiction of a felony involving
acts of fraud, embezzlement, dishonesty or moral turpitude, or (iii)
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
participating in a material portion of the affairs of Employer of any
of its affiliates, provided that the order resulted from act(s) of
Officer which were committed in bad faith and without reasonable belief
that such act(s) were in the best interests of Employer. If Officer
shall be convicted of a felony or shall be removed from office and/or
temporarily prohibited from participating in
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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(f) 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(f) hereof are suspended, Officer shall continue
to be entitled to receive Additional Benefits under Section 4(d) until
the conviction of the felony 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. Upon termination for Cause,
Officer is not entitled to any severance and no unvested stock options
or restricted stock will vest because of the termination. Anything
herein to the contrary notwithstanding, termination for Cause shall not
include termination by reason of Officer's job performance or a job
performance rating given to Officer for his job performance or the
financial performance of Employer or any affiliated company.
d. Termination Other Than For Cause.
(i) If during the term of this Agreement, Officer's employment shall
be terminated by Employer other than for Cause, then Employer
shall (1) pay Officer in a single payment as soon as practicable
after the Termination Date, but in no event later than thirty
(30) days thereafter, an amount in cash equal to $5,000,000 and
(2) until the earlier of (a) the date Officer obtains other
employment which provides similar benefits or (b) the second
anniversary of the Termination Date, provide the benefits
specified in the last sentence of Section 4(d) hereof.
(ii) If within two (2) years after a "Change in Control" (as defined
in Appendix A to this Agreement) and during the term of this
Agreement, Officer's position, powers, reporting requirements,
duties, or responsibilities as Chief Executive Officer or Vice
Chairman of the Board of Directors, or such other higher position
held by Officer are materially altered from those in effect
immediately prior to the Change in Control, then Officer can
terminate this Agreement upon thirty days (30) notice, and
Employer shall (1) pay Officer in a single payment as soon as
practicable after the Termination Date, but in no event later
than thirty (30) days thereafter, an amount in cash equal to
$5,000,000 and (2) until the earlier of (a) the date Officer
obtains other employment which provides similar benefits or (b)
the second anniversary of the Termination Date, provide the
benefits specified in the last sentence of Section 4(d)
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hereof.
(iii) Notwithstanding 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 tax amount.
e. Resignation. If during the term of this Agreement, Officer shall resign
voluntarily, all of his rights to payment or benefits hereunder shall
immediately terminate; provided, however, that the termination of
Officer's employment pursuant to this Section 5(e) 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. If Officer resigns as a result of a material
breach by Employer, including a deemed breach pursuant to Section 8(a),
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(d) for all purposes under
this Agreement.
f. Notice of Termination. Any purported termination by Employer or by
Officer 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.
g. Non-Renewal of Agreement. In the event that this Agreement terminates
according to its terms on February 5, 2003, and is not renewed on terms
mutually acceptable to Employer and Officer, such termination of
Officer's employment pursuant to this Section 5(g) shall not affect
Officer's entitlement to all benefits in which he has become vested or
which are otherwise payable with respect to
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periods ending on or prior to his termination of employment, provided
that, to the extent not otherwise vested, all outstanding stock options
and restricted stock granted to Officer pursuant to Section 4(c) or
prior to this Agreement shall thereupon vest. Employer shall also (1)
pay Officer in a single payment as soon as practicable after the
termination, but in no event later than thirty (30) days thereafter, an
amount in cash equal to $5,000,000.00, and (2) until the earlier of (a)
the date Officer obtains other employment or (b) the second anniversary
of the termination of employment, provide the benefits specified in the
last sentence of Section 4(e) hereof.
6. Reimbursement of Business Expenses. During the term of this Agreement,
Employer shall reimburse Officer promptly for all reasonable and
appropriate business expenditures to the extent that such expenditures are
substantiated by Officer as required by the Internal Revenue Service and
rules and policies of Employer.
7. 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 indemnify Officer and hold him
harmless for any acts or decisions made by him in good faith while
performing services for Employer, and shall maintain coverage for him under
liability insurance policies of a minimum amount of fifty million dollars
covering officers or directors of Employer.
8. 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 substantially all the
assets of Employer or similar transaction to or with a company with a
larger net worth, higher credit rating and greater profit than
Employer. 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 material breach of
this Agreement by Employer.
b. Notices. Any notices provided for in this Agreement shall be sent to
Employer at its corporate headquarters, Attention: Corporate
Counsel/Secretary, with a copy to the Chairman of the Compensation
Committee 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
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agreements between the parties relating to said subject matter;
provided, however, that Officer hereby expressly acknowledges that
Officer has executed Employer's standard Arbitration Agreement to the
extent not replaced or superseded by this Agreement. 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.
f. Attorneys' Fees in Action on Contract. If any arbitration or litigation
shall occur between the Officer and Employer, which arbitration or
litigation arises out of or as a result of this Agreement or the acts
of the parties hereto pursuant to this Agreement, or which seeks an
interpretation of this Agreement, the prevailing party in such
arbitration or litigation, in addition to any other judgment or award,
shall be entitled to receive such sums as the court hearing the matter
shall find to be reasonable as and for the attorney's fees of the
prevailing party.
g. Confidentiality. Officer agrees that he will not divulge or otherwise
disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of
Employer or any of its subsidiaries 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 subsidiaries, 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 as determined
in Officer's business judgment, (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. The provisions of this subsection shall survive
the expiration, suspension or termination, for any reason, of this
Agreement.
h. 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,
without posting any bond, from a tribunal of competent jurisdiction,
restraining Officer from committing or continuing any violation of this
Agreement.
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i. 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.
j. 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)(i)(2) hereof, no payment hereunder shall be offset or reduced by
the amount of any compensation or benefits provided to Officer in any
subsequent employment.
k. Covenant Not to Compete.
(i) In General. Officer agrees that while he is employed by Employer
during the term of this Agreement and for a period of one year
after the termination of such employment if he voluntarily
resigns or if he is terminated for Cause or Other Than For Cause
(the "Non-Compete Period"), he shall not, within North America:
(A) engage in any business, whether as an employee, consultant,
partner, principal, agent, representative or stockholder
(other than as a stockholder of less than a one percent (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
material business of Employer (or its subsidiaries or
affiliates) as conducted on the date Officer's employment
terminated;
(B) 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 material client of Employer
(or its subsidiaries or affiliates) (including without
limitation any lessee, vendor or supplier); or
(C) 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 covenant not
to compete, 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
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5(d).
(iii) 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
seek equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available.
(iv) Reformation. If the foregoing covenant not to compete 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 be subject to a covenant not to compete, reasonable under
the circumstances, enforceable by Employer.
l. 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 Chairman of the Board of Directors in the
Counties of Los Angeles, Orange or Ventura, California or wherever the
Corporate Headquarters of the Employer may be located. 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, either the Officer or Employer shall
provide the other party with a Notice of Termination in accordance with
Section 5(f) and the Officer will be deemed to have been terminated
pursuant to Section 5(d).
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first a written.
EMPLOYER
By: ____________________________
Name:___________________________
Title:__________________________
OFFICER:
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in his individual capacity
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APPENDIX A
A "Change in Control" shall mean the occurrence during the term of the
Agreement, of any one of the following events:
A. An acquisition (other than directly from Employer) of any common stock or
other "Voting Securities" (as hereinafter defined) of Employer by any
"Person" (as the term person is used for purposes of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
immediately after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty five
percent (25%) or more of the then outstanding shares of Employer's common
stock or the combined voting power of Employer's then outstanding Voting
Securities; provided, however, in determining whether a Change in Control
has occurred, Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an acquisition
which would cause a Change in Control. For purposes of this Agreement, (1)
"Voting Securities" shall mean Employer's outstanding voting securities
entitled to vote generally in the election of directors and (2) a "Non-
Control Acquisition" shall mean an acquisition by (i) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) Employer or (B)
any corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or
indirectly, by Employer (for purposes of this definition, a "Subsidiary"),
(ii) Employer or any of its Subsidiaries, or (iii) any Person in connection
with a "Non-Control Transaction" (as hereinafter defined).
B. The individuals who, as of the date of the Agreement are members of the
Board (the "Incumbent Board"), cease for any reason to constitute at least
two-thirds of the members of the Board; provided, however, that if the
election, or nomination for election by Employer's common stockholders, of
any new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this Agreement,
be considered as a member of the Incumbent Board; provided further,
however, that no individual shall be considered a member of the Incumbent
Board if such individual initially assumed office as a result of either an
actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
C. The consummation of:
(i) A merger, consolidation or reorganization involving Employer, unless
such merger, consolidation or reorganization is a "Non-Control
Transaction." A "Non-Control Transaction" shall mean a merger,
consolidation or reorganization of Employer where:
a. the stockholders of Employer, immediately before such merger,
consolidation or reorganization, own directly or indirectly
immediately following such merger, consolidation or
reorganization at least seventy
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percent (70%) of the combined voting power of the outstanding
Voting Securities of the corporation resulting from such merger,
consolidation or reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, consolidation
or reorganization;
b. the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least
two-thirds of the members of the board of directors of the
Surviving Corporation, or in the event that, immediately
following the consummation of such transaction, a corporation
beneficially owns, directly or indirectly, a majority of the
Voting Securities of the Surviving Corporation, the board of
directors of such corporation; and
c. no Person other than (i) Employer, (ii) any Subsidiary, (iii) any
employee benefit plan (or any trust forming a part thereat)
maintained by Employer, the Surviving Corporation or any
Subsidiary, or (iv) any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial Ownership
of twenty-five percent (25%) or more of the then outstanding
Voting Securities or common stock of Employer, has Beneficial
Ownership of twenty-five percent (25%) or more of the combined
voting power of the Surviving Corporation's then outstanding
Voting Securities or its common stock;
(ii) A complete liquidation or dissolution of Employer; or
(iii) The sale or other disposition of all or substantially all of the
assets of Employer to any Person (other than a transfer to a
Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding common stock or Voting
Securities as a result of the acquisition of common stock or Voting Securities
by Employer which, by reducing the number of shares of common stock or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person; provided, however, that if a Change of
Control would occur (but for the operation of this sentence) as a result of the
acquisition of common stock or Voting Securities by Employer, and after such
share acquisition by Employer, the Subject Person becomes the Beneficial Owner
of any additional common stock or Voting Securities which increases the
percentage of the then outstanding common stock or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.
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