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EXHIBIT 10.1.1
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement ("Amendment") is entered into
as of December 1, 1993, by and among UNIONFED FINANCIAL CORPORATION, a Delaware
corporation ("UnionFed"), UNION FEDERAL BANK, a federal savings bank ("Union
Federal") and DAVID S. ENGELMAN ("Executive").
WHEREAS, UnionFed and Union Federal desire to continue to have the
benefits of Executive's knowledge and experience as a full-time employee and
consider such employment a vital element to protecting and enhancing the best
interests of UnionFed, Union Federal and their shareholders, and Executive
desires to continue to be employed full-time with UnionFed and Union Federal;
and
WHEREAS, UnionFed, Union Federal and Executive are parties to an
Employment Agreement entered into as of April 1, 1991 (the "Agreement") which
provides for the employment of Executive on the terms provided for therein; and
WHEREAS, UnionFed, Union Federal and Executive desire to amend the
Agreement to extend the term thereof and amend the provisions of the Agreement
in certain respects as provided for herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
1. Term. The "Employment Period" provided for in section 1 of
the Agreement shall be and hereby is extended until June 30, 1997. On or
before July 1, 1995, and annually thereafter on or before each July 1, the
Boards of Directors of UnionFed and Union Federal shall review whether the
employment period shall be extended and the terms of any extension.
2. Duties. The last sentence in section 2 in the Agreement is
hereby deleted as inapplicable following Executive's departure from the Board
of Directors of Commercial Federal Bank.
3. Compensation.
(a) Executive's base salary under Section 3(a) of the Agreement
shall be $300,000 for the fiscal year ending June 30, 1994.
(b) Executive's bonus shall be determined on a fiscal year basis
commencing with the fiscal year ending June 30, 1994 and shall be determined in
accordance with section 3(c) of the Agreement. The last sentence of section
3(c) is amended to read in full as follows:
"The level of Executive's annual bonus in excess of the
minimum guaranteed annual bonus, if any, shall be determined by the
Executive Compensation and Stock Option Committee of UnionFed based
upon the achievement of objective targets and goals to be established
by such committee in consultation with Executive."
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(c) In order to permit a review of Executive's compensation,
including bonus, on a fiscal year basis, the last paragraph of section 3 of the
Agreement is hereby amended to read in full as follows:
"The Boards of Directors of UnionFed and Union Federal shall
review the compensation of Executive annually during June to determine
whether an increase is indicated in Executive's compensation for the
upcoming fiscal year. Bonuses for each fiscal year shall be
determined and paid prior to September 1 following the end of the
fiscal year (provided that if audited financial statements are not yet
available such date may be extended to not later than October 1). At
no time during the term of this Agreement shall Executive's annual
compensation be less than the amounts the amounts specified in this
Section 3."
4. Employee Benefits.
(a) Section 4(b) of the Agreement shall be amended to insert the
following sentence as the second sentence thereof:
"In addition to the term life insurance provided to Executive
in accordance with such plans, Executive shall be provided with
$500,000 of whole life insurance on a split dollar premium payment
arrangement with an insurance company acceptable to Executive, with
the terms thereof approved by the Executive Compensation and Stock
Option Committee."
(b) Section 4(c) of the Agreement is amended to add the
following language:
"UnionFed and Union Federal acknowledge that Union Federal
has established its 1991 Supplemental Retirement Income Plan
(the "1991 Plan"), guaranteed by UnionFed, and that UnionFed, Union
Federal and Executive have entered into a Participation Agreement
with respect to Executive's participation in the Plan. UnionFed and
Union Federal acknowledge that Executive has exceeded the number of
Minimum Service Months required by the 1991 Plan and the Participation
Agreement and that Executive currently is vested for certain benefits
as provided in the 1991 Plan and the Participation Agreement."
(c) Section 4(d) of the Agreement is hereby amended to provide
that Executive's automobile allowance shall be $1,000 per month, plus
reasonable reimbursement for mileage driven by Executive in the performance of
his duties hereunder (excluding commuting miles). Such allowance shall be
reviewed annually to determine if any increase is appropriate.
(d) The following new section 4(g) is hereby added to the
Agreement:
"(g) UnionFed and Union Federal shall cause Executive to
be provided legal and/or accounting advice, by professional firms
selected by Executive (or reimburse Executive for expenses incurred),
in connection with Executive's tax planning (including without
limitation income tax, estate and gift tax matters) and preparation of
Executive's tax returns, including federal, state and local returns,
if any, provided, however, that the obligation of UnionFed and Union
Federal hereunder shall not exceed $15,000 in any fiscal year
commencing with the fiscal year ending June 30,1994 and provided,
further, that any amount unused in any fiscal year
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shall accrue and be available for the benefit of Executive in
subsequent fiscal years during the term of this Agreement and
during the 18 months following the termination of this Agreement
or the termination of Executive's employment, whichever is later."
5. Disability. All references to ninety (90) day disability
periods in section 5(b) of the Agreement are hereby amended to be one hundred
and eighty (180) days.
6. Stock Options. Section 8(a) is hereby amended to read in full
as follows:
"(a) Grant of Stock Options. Executive acknowledges that
he has been granted stock options for 255,000 shares of UnionFed
common stock, with an exercise price of $1.75 per share, and for
34,800 shares at an exercise price of $1.875 per share, in each case
subject to a vesting schedule wherein 25% of such options vest on each
September 28 in the years 1995 to 1998. All options granted to
Executive shall have a ten year term and all shares delivered under
the option grants shall be registered with the Securities and Exchange
Commission."
7. Required Provisions. The following sentence is added to the
end of section 9 of the Agreement:
"Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with
12 U.S.C. Section 1828(k), a copy of which is attached as Exhibit C,
and any regulations promulgated thereunder."
8. Effect on Agreement. Except as modified by this Amendment,
the terms and provisions of the Agreement shall remain in full force and effect
throughout the term of the Agreement.
9. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
UNIONFED FINANCIAL CORPORATION EXECUTIVE
By: RONALD M. GRIFFITH DAVID S. ENGELMAN
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Senior Vice President David S. Engelman
General Counsel
UNION FEDERAL BANK,
a federal savings bank
By: RONALD M. GRIFFITH
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Senior Vice President
General Counsel
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BANKS AND BANKING 12 SECTION 1828
(k) Authority to regulate or prohibit certain forms of benefits to
institution-affiliated parties
(1) Golden parachutes and indemnification payments
The Corporation may prohibit or limit by regulation or order, any
golden parachute payment or indemnification payment.
(2) Factors to be taken into account
The Corporation shall prescribe, by regulation, the factors to be
considered by the Corporation in taking any action pursuant to paragraph
(1) which may include such factors as the following:
(A) Whether there is a reasonable basis to believe that the
institution-affiliated party has committed any fraudulent act or
omission, breach of trust or fiduciary duty, or insider abuse with
regard to the depository institution or depository institution holding
company that has had a material effect on the financial condition of
the institution.
(B) Whether there is a reasonable basis to believe that the
institution-affiliated party is substantially responsible for the
insolvency of the depository institution or depository institution
holding company, the appointment of a conservator or receiver for the
depository institution, or the depository institution's troubled
condition (as defined in the regulations prescribed pursuant to section
1831i(f) of this title.
(C) Whether there is a reasonable basis to believe that the
institution-affiliated party has materially violated any applicable
Federal or State banking law or regulation that has had a material
effect on the financial condition of the institution.
(D) Whether there is a reasonable basis to believe that the
institution-affiliated party has violated or conspired to violate--
(i) section 215, 656, 657, 1005, 1006, 1007, 1014, 1032, or
1344 of Title 18; or
(ii) section 1341 or 1343 of such title affecting a federally
insured financial institution.
(E) Whether the institution-affiliated party was in a position of
managerial or fiduciary responsibility.
(F) The length of time the party was affiliated with the insured
depository institution or depository institution holding company and
the degree to which--
(i) the payment reasonably reflects compensation earned over
the period of employment; and
EXHIBIT C
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