EMPLOYMENT
AGREEMENT
This Employment Agreement (this “
Agreement ”) is made and entered into effective as of
January 16, 2009 (the “ Effective Date ”)
between CS Financing Corporation (“ Company ”),
and Timothy R. Redpath (the “ Executive
”).
WITNESSETH:
WHEREAS, the Company desires to employ the
Executive upon the terms and conditions set forth herein;
and
WHEREAS, the Executive desires to accept such
employment with the Company and to enter into this
Agreement.
NOW, THEREFORE, in consideration of the premises
and the mutual covenants and obligations hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree
as follows:
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DEFINITIONS . The following terms used in this
agreement shall have the respective meanings specified below unless
the context clearly indicates the contrary:
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“
Accrued Benefits ” shall have the meaning ascribed to
such term in Section 6 .
“
Board ” shall mean the board of directors of the
Company.
“ Base
Salary ” shall mean the annual base salary payable to the
Executive at the rate set forth in Section 4 .
“
Business Day ” shall mean any day that is not a
Saturday, Sunday, legal holiday or day on which commercial banks in
California are authorized or required by applicable law to
close.
“
Cause ” shall mean discharge by the Company on the
following grounds: (i) failure of the Executive to
devote a substantial amount of the Executive’s working time
to the business of the Company; (ii) gross negligence or willful
misconduct in the performance of the Executive’s duties; or
(iii) conviction of (or, in any court of law, a plea of nolo
contendere with respect to) any act of fraud, theft or financial
dishonesty toward the Company, or of any felony or criminal act
involving moral turpitude; provided, however, that Cause shall not
exist unless the Board provides a Notice of Termination to the
Executive of the Company’s intention to terminate this
Agreement for Cause, which notice shall identify in reasonable
detail the basis therefor and be delivered within thirty (30) days
after the event or circumstances providing such basis, and unless
the Executive fails to cure such condition, if curable, within
thirty (30) days following delivery of the Notice of
Termination. The Date of Termination shall be the
thirtieth day after such Notice of Termination.
“ Date
of Termination ” shall mean the effective date of a
Termination of Employment.
“
Employment Term ” shall have the meaning ascribed to
such term in Section 2 .
“
Expiration Date ” shall have the meaning ascribed to
such term in Section 2 .
“ Good
Reason ” shall mean the occurrence of any of the
following without the Executive’s consent (i) a material
diminution in the nature or scope of the Executive’s
responsibilities, authorities or duties, (ii) a relocation of the
Executive’s principal place of employment to a location not
within a fifty (50) mile radius of the location from which the
Executive served the Company immediately prior to such relocation,
(iii) a material reduction in the Executive’s Base Salary
and/or Incentive Bonus, or (iv) a material breach of this Agreement
by the Company. The Executive may not resign his
employment for Good Reason unless the Executive provides the
Company with at least thirty (30) days prior written notice of his
intent to resign for Good Reason and the Company has not cured the
breach within such thirty (30) day period. The Date of
Termination shall be the thirtieth day after such Notice of
Termination.
“
Incentive Bonus ” shall mean the annual bonus payable
to the Executive described in Section 4(b) .
“
Initial Term ” shall have the meaning ascribed to such
term in Section 2 .
“
JAMS ” shall have the meaning ascribed to such term in
Section 12 .
“
Notice of Termination ” shall have the meaning
ascribed to such term in Section 6 .
“
Permanent Disability ” shall mean the
Executive’s inability to perform the duties and
responsibilities required of the Executive in such
Executive’s employment capacity by reason of a physical or
mental disability or infirmity which has continued for more than
ninety (90) consecutive Business Days (excluding vacation days) in
any twelve (12) consecutive month period, as reasonably determined
by the Board.
“
Person ” shall mean any individual, firm, corporation,
limited liability company, partnership, business enterprise, trust,
associate, joint venture, partnership or other entity, whether
acting in an individual, fiduciary or other capacity.
“
Renewal Term ” shall have the meaning ascribed to such
term in Section 2 .
“
Severance Amount ” shall have the meaning ascribed to
such term in Section 6 .
“
Termination of Employment ” shall mean the first to
occur of the following events:
(a) the
Company’s termination of the Executive’s employment for
Cause;
(b) the
Executive’s termination of employment with the Company
without Good Reason;
(c) the
Executive’s death;
(d) the termination of
the Executive’s employment as a result of the
Executive’s Permanent Disability;
(e) the
Executive’s termination of employment by the Company without
Cause; or
(f) the
Executive’s termination of employment with the Company for
Good Reason.
Termination of
Employment as used throughout this Agreement refers to a
“separation from service” by the Executive from the
Company, as defined by Treasury Regulation
§1.409A-1(h).
“
Termination Date ” shall have the meaning ascribed to
such term in Section 6 .
The Company agrees to employ the Executive and
the Executive agrees to provide services to the Company from the
Effective Date of this Agreement until the close of business on the
third anniversary of the Effective Date (the “ Initial
Term ”); provided, however, that this Agreement shall
automatically renew for subsequent 12-month periods (each a “
Renewal Term ”) unless either the Company or the
Executive provides written notice, at least ninety (90) days prior
to the expiration of the Initial Term or any Renewal Term then in
effect, of the party’s intent not to renew (the expiration of
the Initial Term or any Renewal Term herein referred to as the
“ Expiration Date ”). The term
“ Employment Term ” shall refer herein to the
period commencing on the first day of the Initial Term and ending
on the earlier of (i) the Date of Termination and (ii) the
Expiration Date.
(a) The
Executive’s job title shall be Chief Executive Officer of the
Company. During the Employment Term, the Executive shall
have such authority, duties and responsibilities as are usual and
customary for similar positions for companies of similar size and
scope and such other duties for the Company consistent with the
Executive’s position as may be assigned by the
Board.
(b) The Executive
shall serve the Company subject to the general supervision, advice
and direction of the Board upon the terms and conditions set forth
in this Agreement, and the Executive shall report to the
Board. The Executive shall take all appropriate actions
to ensure that the Board is currently and fully informed on a
regular and continuous basis of all matters affecting the
Company.
(c) Except with the
prior written consent of the Company in its sole discretion, the
Executive shall not engage, directly or indirectly, during the
Employment Term, in any other business activities or pursuits
whatsoever, except activities in connection with charitable or
civic activities, personal investments and serving as an executor,
trustee or in other similar fiduciary capacity; provided that any
such activities do not interfere with the performance of the
Executive’s responsibilities and obligations pursuant to this
Agreement.
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COMPENSATION AND BENEFITS
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(a) Base
Compensation . During the Employment Term, the
Company shall pay the Executive, in equal installments pursuant to
the Company’s regular payroll practice (but not less
frequently than monthly), Base Salary in the amount of $250,000 per
annum. The Board shall review the Base Salary from time
to time and in its sole and absolute discretion may, but is not
obligated to, adjust the Base Salary; provided, however, that the
Executive’s Base Salary shall be adjusted to be no lower than
the Base Salary of any other senior officer of the Company (unless
the Executive, expressly and in writing, consents to a lower Base
Salary than another specific senior officer).
(b) Incentive
Bonus . During the Employment Term, the Executive
shall be entitled to participate in all incentive compensation
plans and programs maintained by the Company and applicable
generally to senior executives of the Company in accordance with
the terms thereof. Without limiting the foregoing, for
each fiscal year of the Company ending within the Employment Term,
the Executive shall be eligible to receive incentive bonus
compensation under the CS Financing Bonus Plan in accordance with
the terms and conditions of such plan as approved by the Company
(the “ Incentive Bonus ”).
(c) Vacation
. The Executive shall be entitled to four (4) weeks of
paid vacation per fiscal year of the Company.
(d) Employment
Benefit Plans . During the Employment Term, the
Executive shall be entitled to participate in the retirement,
health, dental and disability and life insurance plans and other
employee welfare benefit plans offered by the Company to other
senior executives of the Company, subject to the terms and
conditions of such plans, and subject to the right of the Company,
in its sole discretion, to modify and/or terminate any such plans
at any time.
(e) Fringe
Benefits . During the Employment Period, the Company
will provide the Executive with those employee benefits made
available to Executive level employees of the Company from time to
time in accordance with the respective terms of such plans and
programs.
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REIMBURSEMENT OF EXPENSES
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In addition to the compensation provided for
under Section 4 hereof, the Company shall promptly reimburse
the Executive for all reasonable travel, entertainment and
miscellaneous expenses incurred by the Executive during the
Employment Term in the ordinary course of business and otherwise
incurred in connection with the Executive’s fulfillment of
the Executive’s professional responsibilities to the Company.
For purposes of satisfying Section 409A of the Internal Revenue
Code of 1986, as amended (the “ Code ”), the
parties agree that the amounts reimbursed under this Section
5 for one calendar year shall not affect entitlements to
reimbursement for other calendar years, requests for reimbursements
for a year shall be made no later than January 31 of the following
year, and reimbursement payments, if any, shall in all events be
made no later than the 15th day of the third month of the calendar
year following the calendar year in which the applicable expense is
incurred.
(a) Termination of
Employment . Notwithstanding anything to the
contrary set forth herein and for the avoidance of doubt, during
the Employment Term the Executive’s employment hereunder may
be terminated at any time and for any reason (i) by the Company
with or without Cause or (ii) by the Executive with or without Good
Reason. Upon termination, the Executive shall be
entitled only to such compensation and benefits as described in
this Section 6 .
(b) Notice of
Termination . Any Termination of Employment by the
Company or by the Executive under this Section 6 shall be
communicated by a written notice to the other party hereto
indicating the specific Termination of Employment provision in this
Agreement relied upon, setting forth in reasonable detail the facts
and circumstances claimed to provide a basis for the Termination of
Employment under the provision so indicated, and specifying a Date
of Termination as provided for in this Agreement (a “
Notice of Termination ”).
(c) Accrued
Benefits . Upon the Executive’s Termination of
Employment pursuant for any reason, the Executive shall be entitled
to receive a cash lump sum equal to (i) the Executive’s Base
Salary through the Date of Termination not theretofore paid; (ii)
any earned but unpaid bonus due the Executive for the calendar year
prior to the calendar year of the Date of Termination; (iii) any
unpaid expense reimbursements owed to the Executive under
Section 5 , (iv) any accrued vacation pay owed the Executive
under Section 4(c) ; and (v) any amount earned, accrued and
arising from the Executive’s participation in, or benefits
accrued under any employee benefit plan or arrangement under
Section 4(d) and Section 4(e) which amounts shall be
payable in accordance with the terms and conditions of such
employee benefit plans and arrangements (the foregoing,
collectively, the “ Accrued Benefits
”). Notwithstanding the foregoing, the Accrued
Benefits in Section 6(c)(i ), 6(c)(ii) ,
6(c)(iii) and 6(c)(iv) shall be paid within thirty
(30) days of the Date of Termination.
(d) Termination for
Cause or Termination without Good Reason . If the
Executive’s employment shall terminate by the Company for
Cause or the Executive’s employment shall terminate by the
Executive without Good Reason, the Executive will only be entitled
to the Accrued Benefits and the Executive shall not be entitled to
any payment of the Incentive Bonus or any other bonus for such year
of Termination of Employment.
(e) Termination
without Cause or Termination for Good Reason by the Executive
. If the Executive’s employment is terminated by
the Company without Cause or the Executive’s employment is
terminated by the Executive for Good Reason, the Executive shall
receive:
(i) a
cash payment equal to the sum of (A) two (2) times the
Executive’s Base Salary as of the Date of Termination, and
(B) two (2) times the Incentive Bonus earned by the Executive for
the calendar year previous to the calendar year in which the
Executive’s Date of Termination occurs (or, if the Date of
Termination occurs prior to the end of the first calendar year of
the Term, the Incentive Bonus for such calendar year at the target
level) (the “ Severance Amount ”) to be paid in
equal installments for twenty-four (24) months following
Termination of Employment subject to the Executive’s
execution, delivery, and non-revocation of a general release and
waiver of claims within thirty (30) days following the Date of
Termination; and
(ii) reimbursement
for, or direct payment to the carrier for, the premium costs under
COBRA for the Executive, and, where applicable, his spouse and
dependents, under the Company’s group medical benefit plan,
until the earlier of (A) eighteen (18) months following the Date of
Termination or (B) the date that the Executive first becomes
eligible to participate in any other plan that provides medical
benefits.
(f) Termination of
Employment Due to Death or Permanent Disability . In
the event of the Executive’s death during the Employment Term
or Termination of Employment due to Disability, the
Executive’s estate and/or beneficiaries, as the case may be,
shall be entitled to:
(i) the
Accrued Benefits and the Executive shall not be entitled to any
payment of the Incentive Bonus for such year of Termination of
Employment; and
(ii) a
cash payment equal to sum of (A) one (1) times the
Executive’s Base Salary as of the Date of Termination, and
(B) one (1) times the Incentive Bonus earned by the Executive for
the calendar year previous to the calendar year in which the
Executive’s Date of Termination occurs (or, if the Date of
Termination occurs prior to the end of the first calendar year of
the Term, the Incentive Bonus for such calendar year at the target
level).
(g) General Release
by the Executive . Notwithstanding any provision of
this Agreement to the contrary, the Executive acknowledges and
agrees that the obligation of the Company to pay any compensation
and benefits under this Section 6 is expressly conditioned
upon the Executive’s execution of and agreement to be bound
by a general release of any and all claims arising out of or
relating to the Executive’s employment and Termination of
Employment in the form attached as Annex A to this
Agreement.
(a) Except in
connection with the faithful performance of the Executive’s
duties hereunder or pursuant to Section 7(c) and Section
7(d) , the Exe
