Employment Agreement - IndyMac Bank FSB and S. Blair Abernathy
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") has been executed as of February 5,
2001 by and between IndyMac Bank, F.S.B. ("Employer") and S. Blair Abernathy
("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, 2004, 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 business, affairs and interests of Employer and its affiliates and
perform services
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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, 2001 at the annual rate of $275,000 (the "Annual
Rate"). In respect of the Fiscal Years ending in 2002, 2003 and
2004, 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, with
the maximum incentive compensation award set at $150,000 for
each year of this Agreement. 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 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.
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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. Employer's public company
affiliate, IndyMac Bancorp, Inc., or any successor public
company ("Public Company"), shall grant to Officer a stock
option grant of 250,000 shares of the Employer's common stock on
February 5, 2001. This stock option grant shall vest equally
over 5 years from the date of grant.
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 2000 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 of
the Board of Directors of the Public Company ("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 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
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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 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. 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
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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.
f. CLUB MEMBERSHIPS. Employer shall pay standard annual and monthly
membership fees and any business related charges for Officer's
participation in the Sierra LaVerne Country Club, and such other
memberships as may be approved by the Chief Executive Officer.
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, 2004, 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 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
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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, 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
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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 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.
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(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, 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.
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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 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.
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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 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
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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, 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,
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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.
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
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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
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
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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)
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: Richard H. Wohl
Title: President, Mortgage Banking Group
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:
-------------------------
-------------------------
Printed Name and Title
Date:
-------------------------
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APPENDIX A
PROFIT CENTER
ANNUAL INCENTIVE PLAN
Annual Base Rate for 2001: $ 275,000
Annual Target Bonus for 2001: $ 150,000
Quarterly Target Bonus for 2000: $ 37,500
Annual Incentive Award:
Officer shall be eligible for an Incentive Award which shall be
comprised of the following components:
1. Meeting Volume Goals/Growing Market Share, plus Product Diversification
2. Margin Spread
3. Secondary Marketing Hedging Costs
4. Expenses / Headcount
5. Leadership Assessment
The weighting for each of the components set forth above, as well as the targets
for each component, shall be established within 30 days of the CEO's approval of
the 2001 Financial and Strategic Plan for the Company and the Mortgage Banking
Group.
LEADERSHIP ASSESSMENT
Each quarter, the Incentive Amount shall be calculated; and then shall be
adjusted based upon the following factors (the "Total Actual Quarterly Incentive
Amount"):
Leadership Quality Above Expectations At Expectations Below Expectations
------------------ ------------------ --------------- ------------------
1. Internal Controls, Policies & +20% Adjustment 0% Adjustment -20% Adjustment
Procedures, Credit Policies, Risk
Management
2. Goal Attainment Process +20% Adjustment 0% Adjustment -20% Adjustment
3. Web-izing Business +20% Adjustment 0% Adjustment -20% Adjustment
4. Marketing Strategy/Cross Marketing +20% Adjustment 0% Adjustment -20% Adjustment
5. Recruiting/training, turnover +20% Adjustment 0% Adjustment -20% Adjustment
The maximum adjustment based upon the Leadership Quality factors, shall be 60%
(either up or down). As an example, if the calculated Incentive Amount were
$45,000 and Officer received the following ratings:
Internal Controls At Expectations (0% Adjustment)
Goal Attainment Process Above Expectations (20% Adjustment)
Web-izing Business Below Expectations (-20% Adjustment)
Marketing Strategy At Expectations (0% Adjustment)
Recruiting/training, turnover Above Expectations (20% Adjustment)
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the Officer's Final Total Actual Quarterly Incentive Amount would be $54,000
($45,000 + 20% of $45,000). If Officer was rated Above Expectations in each
category, his Final Total Actual Quarterly Incentive Amount would be $72,000
($45,000 + 60% of $45,000).
The assessment of Officer's performance on the Leadership Qualities shall be at
the sole discretion of the Chief Executive Officer of Employer. Officer must be
employed by Employer on the date that the quarterly bonus is paid to be eligible
for payment of the bonus.
In addition to the Leadership Assessment above, if the annualized bonus payable
for any individual Quarter is less than 75% of the prior year actual bonus paid
or is greater than 125% of the prior year actual bonus paid, the determination
to not pay at least 75% or to be in excess of 125% shall be at the sole
discretion of the Chief Executive Officer of Employer and the President of the
Mortgage Banking Group.
--------------------------- ------------------------------
Blair S. Abernathy Richard H. Wohl
EVP, Secondary Marketing President, Mortgage Banking Group
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