EXHIBIT 10.2
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is made and entered into effective as of
April 11, 2007 (the “Effective Date”), by and between
PATRICK E. LAMB (the “Executive”) and FREMONT GENERAL
CORPORATION (the “Company”), and supercedes that
Management Continuity Agreement entered into by the parties
effective as of August 7, 2006.
RECITALS
A. The Company and the Executive
desire to enter into this Agreement in order to provide additional
financial security and benefits to the Executive in recognition of
past services and to encourage Executive to continue employment
with the Company.
B. To accomplish the foregoing
objectives, the Board of Directors of the Company (the
“Board”) has directed the Company, upon execution of
this Agreement by the Executive, to agree to the terms provided
herein.
C. Certain capitalized terms
used in the Agreement are defined in Section 6 below.
In consideration of the mutual
covenants herein contained, and in consideration of the continuing
employment of Executive by the Company, the parties agree as
follows:
1. Duties and Scope of
Employment.
(a) Position. The
Company shall employ the Executive in the position of Senior Vice
President with financial reporting and/or accounting duties and
responsibilities and compensation as in effect as of the Effective
Date; provided, however, that the Board shall have the right to
revise such responsibilities and compensation from time to time as
the Board may deem necessary or appropriate. If any such revision
constitutes “Involuntary Termination” (as defined in
Section 6(c)), the Executive shall be entitled to benefits upon
such Involuntary Termination as provided under this Agreement.
(b) Obligations. The
Executive shall devote his full business efforts and time to the
Company and its subsidiaries. The foregoing, however, shall not
preclude the Executive from engaging in such activities and
services as do not interfere or conflict with his responsibilities
to the Company.
2. Employment Period.
The “Employment Period” commenced as of April 11,
2007 (the “Effective Date”). Commencing April 11,
2007, the term of this Agreement is thirty-six (36) months,
expiring on April 12, 2010. Either party may terminate this
Agreement by giving written notice to the other party. In the event
notice of termination of this Agreement is given by the Company
such notice shall constitute Involuntary Termination and the
provisions of Section 4 shall apply.
3. Compensation and
Benefits.
(a) Base Compensation.
The Company shall pay the Executive as compensation for services a
base salary as of the effective date at the annualized rate of
$425,000.00. Such salary shall be reviewed at least annually and
may be increased from time to time. Such salary shall be paid
periodically in accordance with normal Company payroll. The annual
compensation specified in this Section 3(a), as adjusted from
time to time, is referred to in this Agreement as “Base
Compensation”.
(b) Bonus. Beginning
with the Company’s current fiscal year and for each fiscal
year thereafter during the term of this Agreement, the Executive
shall be eligible to participate in any bonus plan or arrangement
maintained by the Company of general applicability to other key
executives of the Company.
(c) Executive Benefits.
The Executive shall be eligible to participate in the employee
benefit plans and executive compensation programs maintained by the
Company of general applicability to other key executives of the
Company, including (without limitation) retirement plans, savings
or profit-sharing plans, deferred compensation plans, supplemental
retirement or excess-benefit plans, stock option, restricted stock
programs, incentive or other bonus plans, life, disability, health,
accident and other insurance programs, paid vacations, and similar
plans or programs, subject in each case to the generally applicable
terms and conditions of the plan or program in question and to the
determination of the Board or any committee administering such plan
or program.
4. Benefits Upon
Termination.
(a) If the Executive’s
employment terminates, the Executive shall be entitled to benefits
as follows:
(i) Involuntary Termination;
Disability; Death. If the Executive’s employment
terminates as a result of Involuntary Termination other than for
“Cause” or if the Executive’s employment
terminates as the result of Disability or Death, then the Company
shall pay the Executive (or the Executive’s beneficiary or
representative) within ten (10) business days after the
Termination Date, a lump sum amount equal to Thirty Six
(36) months’ Base Compensation of the Executive at the
time of such Termination. In addition, the Executive shall be
entitled to the payment of an amount equal to the
“Target” bonus amount of any bonus plan(s) then in
effect of which the Executive is a participant. Such payment shall
likewise be made within ten (10) business days of the
Termination Date.
(ii) Voluntary
Resignation; Termination for Cause. If
the Executive’s employment terminates by reason of the
Executive’s voluntary resignation, (and is not an Involuntary
Termination), or if the Executive is terminated for Cause, then the
Executive shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established (and
applicable) under the Company’s then-existing severance and
benefits plans and policies at the time of such termination.
(b) Benefits;
Miscellaneous. In the event the Executive is entitled to
benefits pursuant to subsection 4 (a)(i) (other than as a result of
the Executive’s death), then in addition to such benefits,
the Company shall continue to provide the Executive, for thirty-six
(36) months after the Termination Date, welfare benefits or
such comparable alternative welfare benefits as the Company may, in
its discretion, determine to be sufficient to satisfy its
obligations to the Executive under this Agreement (including,
without limitation, medical, prescription, dental, disability,
individual life, group life, accidental death and travel accident
plans and programs) which are at least as favorable as the most
favorable plans of the Company applicable to other peer executives
and their families as of the Termination Date. Notwithstanding the
foregoing, if the Executive is covered under any medical, life, or
disability insurance plan(s) provided by a subsequent employer,
then the amount of coverage required to be provided by the Company
hereunder shall be reduced by the amount of coverage provided by
the subsequent employer’s medical, life or disability
insurance plan(s). The Executive’s rights under this Section
4(b) shall be in addition to, and not in lieu of, any continuation
coverage or conversion rights the Executive may have pursuant to
applicable law, including without limitation, continuation coverage
required by Section 4980B of the Internal Revenue Code.
(c) In addition, (i) the
Company shall pay the Executive any unpaid base salary due for
periods prior to the Termination Date; (ii) the Company shall
pay the Executive all of the Executive’s accrued and unused
vacation through the Termination Date; and (iii) following
submission of proper expense reports by the Executive, the Company
shall reimburse the Executive for all expenses reasonably and
necessarily incurred by the Executive in connection with the
business of the Company prior to termination. These payments shall
be made promptly upon termination and within the period of time
mandated by law.
(d) Restricted
Stock Accelerated Vesting. In the event the
Executive is entitled to severance benefits pursuant to subsection
4(a)(i), the unvested portion of any restricted stock held by, or
for the benefit of, the Executive shall automatically be
accelerated in full so as to become completely vested and/or
unrestricted.
5. Limitation on
Payments. Notwithstanding anything to the contrary contained
herein, in the event it shall be determined that any payment by the
Company to or for the benefit of the Executive, whether paid or
payable but determined without regard to any additional payments
required under this Section 5 (a “Payment”), would
be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”),
or any comparable federal, state, or local excise tax (such excise
tax, together with any interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”, then the
Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in such an amount that after the
payment of all taxes (inclu
