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EXHIBIT 10.13.2
CALIFORNIA V.P. EMPLOYMENT CONTRACT
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EMPLOYMENT AGREEMENT
This Employment Agreement (hereinafter referred to as "Agreement") is entered
into this 23rd day of March, 2001, by Andrew Sirkis (hereinafter referred to as
"Executive") and Redwood Trust, Inc., a Maryland Corporation located in Mill
Valley, California (hereinafter referred to as the "Company") (hereinafter
jointly referred to as the "parties") who wish to enter into this Agreement,
superseding and replacing terms and conditions that previously existed.
WHEREAS, the Company wishes to employ Executive under the terms and conditions
set forth below, and Executive wishes to accept such employment under the terms
and conditions set forth below, and
WHEREAS, Executive acknowledges that Executive has read and is fully familiar
with the terms of this Agreement, that Executive has had a reasonable
opportunity to consider this Agreement and to seek legal counsel,
NOW, THEREFORE, for and in consideration of the above stated premises, and the
mutual promises and agreements set forth herein, the parties agree as follows:
1. EMPLOYMENT AGREEMENT
The Company hereby employs Executive, and Executive hereby accepts
employment with the Company, under the terms and conditions described in
this Agreement. This Agreement shall take effect on January 1, 2001 and
shall remain in effect subject to being terminated pursuant to Section 5
of this Agreement.
2. DUTIES
a. RESPONSIBILITIES
Subject to the terms of this Agreement, Executive is hereby
employed to perform services and function as Vice-President,
reporting to Doug Hansen, the President of Redwood Trust, Inc.
(hereinafter referred to as "President"). The essential
functions of Executive's position are more particularly set
forth in Appendix A hereto, which is incorporated herein by
reference. The President may, from time to time, at his sole
discretion, modify, reassign and/or augment Executive's
responsibilities. Any such modification, reassignment or
augmentation of responsibilities shall be in writing. Executive
fully and completely understands and accepts the nature and
extent of Executive's obligations and duties under this
Agreement.
b. LOYAL AND FULL-TIME PERFORMANCE OF DUTIES
Executive shall faithfully devote the whole of his professional
time, attention, energies and best efforts to the performance of
Executive's duties and shall not, either directly or indirectly,
alone or in partnership, consult with, advise, work for
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or have any interest in any other business or enterprise that
directly or indirectly compete with the Company during his
employment hereunder. Any modification of this subparagraph 2(b)
shall be made only by an agreement in writing signed by
Executive and the Company.
c. COMPANY POLICIES
Executive agrees to abide by the Company's rules, regulations,
policies and practices, written and unwritten, as they may from
time to time be adopted or modified and issued by the Company at
its sole discretion. The Company's written rules, issued
policies, practices and procedures shall be binding on Executive
unless superseded by or in conflict with this Agreement, in
which case this Agreement shall govern.
3. COMPENSATION
a. BASE COMPENSATION RATE
As consideration for the services and covenants described in
this Agreement, the Company agrees to pay Executive a year 2001
base annual salary of Two Hundred Thousand Dollars ($200,000),
subject to payroll deductions required by law or authorized by
Executive. Payments shall be made in equal installments in
accordance with the Company's procedures, as from time to time
may be amended at its sole discretion, regarding the payment of
compensation to management personnel.
b. INCENTIVE BONUS
Executive may, at the President's prerogative, be eligible for
consideration to receive an incentive bonus based upon a
percentage of his base salary. For year 2001, the Executive's
target incentive bonus will be 50% of eligible annual base
salary, and such discretionary bonus payment will depend on
overall Company performance and other factors. For year 2001,
the Executive will also be eligible for an additional incentive
bonus in the range of $0 to the maximum of $25,000, and such
discretionary bonus payment will be based on the Executive's
demonstrated leadership abilities and effectiveness as senior
manager and leader of the Company, with specific performance
criteria to be determined by the President. The issuance (if
any), timing and amount of any incentive bonus shall be within
the sole discretion of the President. Executive's eligibility to
receive any such incentive bonus shall be expressly conditioned
on, among other things, Executive remaining employed with the
Company up through any designated distribution date set by the
President.
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c. ANNUAL REVIEW
Executive's performance shall be reviewed at least annually. The
performance evaluations shall consider and assess Executive's
performance of his duties and responsibilities, the timely
accomplishment of existing performance objectives, his level of
efficiency and overall effectiveness and/or reasonable factors
or criteria that the Company, in its sole discretion, may deem
relevant. The frequency of performance evaluations may vary
depending upon, among other things, length of service, past
performance, changes in job duties or performance levels.
Positive performance evaluations do not guarantee salary
increases or incentive bonuses. Salary increases and incentive
bonus awards are solely within the discretion of the Company and
may depend upon many factors other than Executive's performance.
d. BENEFITS PLANS
Executive shall be entitled to participate in any benefit
adopted from time to time by the Company for the benefit
generally of its executive employees, and Executive shall be
entitled to receive such other fringe benefits as may be granted
to him from time to time by the President.
The Executive shall be entitled to participate in any benefit
plans relating to paid time off, stock options, stock purchases,
retirement, thrift, life insurance, medical coverage, education
or other employee benefits that may, from time to time, be made
available generally to other employees of the Company, subject
to and in accordance with any provisions and restrictions
(including applicable waiting periods) specified in such plans.
4. BUSINESS EXPENSES
The Company shall pay Executive's reasonable and necessary business
expenses, incurred by Executive on behalf of the Company, in accordance
with the customary and usual practice and policies of the Company as may
be adopted or amended from time to time in the Company's sole
discretion. If Executive incurs business expenses hereunder, he shall
submit to the Company a request for reimbursement together with
supporting documentation and receipts in accordance with Company policy.
Reimbursement for legitimate business expenses shall be made within a
reasonable period of time.
5. TERMINATION AND SEVERANCE PAY
a. TERMINATION FOR CAUSE BY THE COMPANY
Executive's employment hereunder may be terminated immediately
by the Company for cause upon occurrence of any of the
following:
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1. Gross negligence or willful misconduct by Executive in
the performance of his duties hereunder;
2. The habitual or repeated neglect of his duties by
Executive;
3. Executive's death;
4. Executive's permanent total disability, which shall be
defined as Executive being unable to adequately perform
the essential functions of their current position, as
defined by the Company, due to a medically determinable
mental or physical illness or injury which can be
expected to result in death or can be reasonably
expected to last for a continuous period of not less
than six (6) months. Any determination of such inability
to perform shall be made only by the Company based on
professional medical advice provided by a medical
professional mutually agreeable to Executive, or his
representative, and the Company;
5. Conviction of a felony;
6. Theft or embezzlement, or attempted theft or
embezzlement, of money or tangible or intangible assets
or property of the Company or its employees, customers,
clients, etc.;
7. Any act of moral turpitude by Executive injurious to the
interest, property, operations, business or reputation
of the Company;
8. Unauthorized use or disclosure of trade secrets or
confidential or proprietary information pertaining to
Company business.
Upon the Company learning of a material breach of this Agreement
by Executive, the Company may permit Executive a 30-day period
to cure such a breach if, in the judgment of the Company, the
breach may be cured and it is in the Company's best interest to
allow an opportunity to do so. Any termination under this
Section shall be without prejudice as to any other remedy to
which the Company may be entitled either under this Agreement or
at law. Upon such termination, the Company shall have no further
obligations to make payments of any kind to Executive, except as
required by law.
b. TERMINATION WITHOUT CAUSE BY THE COMPANY
The Company may terminate Executive's employment hereunder at
any time without cause upon 30 days written notice to Executive
or pay in lieu thereof.
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c. TERMINATION BY EXECUTIVE
Executive may terminate his employment with the Company under
this Agreement for any reason by giving 30 days written notice
to the Company.
The Executive shall also have the right to terminate this
Agreement for good reason. "Good Reason" shall mean the
occurrence, without Executive's express written consent of the
following:
(i) Failure by the Company to make payment to Executive as
required by this Agreement;
(ii) Change of Control -- Change of control is defined in
this Agreement as the sale of all or substantially all
of the assets of the Company or the transfer of all or
substantially all of the management control or ownership
of the Company to an entity which is not affiliated with
the Company. In the event that a Change of Control
occurs and Executive thereafter resigns after three
months but within six (6) months of the Change of
Control for the stated reason(s) that the Company (or
its successor) have reduced his base salary or caused a
substantial and material diminution of his
responsibilities as Vice-President.
(iii) A significant reduction in Executive's responsibilities
or base salary, that is not accompanied or caused by a
Change of Control, except as may result in connection
with the Company's termination of Executive's employment
or accommodation of a disability of the Executive, in
accordance with this Agreement.
d. NO SEVERANCE PAYMENTS/INCENTIVE BONUS
No severance payment shall be payable to Executive in the event
of termination of this Agreement by the Company for cause, due
to the Executive's death or in the event Executive terminates
his employment without Good Reason. Executive shall not be
entitled to any incentive bonus, or any portion of such bonus,
where the distribution date as established by the President is
subsequent to the date of termination; eligibility for any such
incentive bonus is conditioned upon Executive actively working
until the established distribution date.
6. SEVERANCE.
If Executive's employment is terminated (i) by the Company without cause
(Section 5b, above), or (ii) by the Executive for Good Reason (Section
5c), and Executive signs a release discharging the Company and all its
respective officers, agents, directors, supervisors, employees,
representatives and their successors and assigns and all persons acting
by, through, under, or in concert with any of them from any and all
charges,
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complaints, claims, and liabilities of any kind of nature whatsoever,
known or unknown, suspected or unsuspected, arising out of Executive's
Employment and/or this Agreement, Executive shall be entitled to the
following benefits:
a. SEVERANCE PAYMENT
Severance payment shall be the greater of (i) fifty percent
(50%) of current year annual base salary; or (ii) the equivalent
gross amount of fifty percent (50%) of 1999 annual base salary
plus 1999 incentive bonus, total of which is equivalent to One
Hundred Forty-five Thousand Three Hundred and Thirty-eight
Dollars ($145,338). Severance payment shall be paid in six equal
installments over a six-month period from termination date,
subject to the Executive executing a Release of all claims;
provided, should Executive violate any provision of Section 7
and/or 8 of this Agreement, such payments shall immediately
terminate and Executive shall be entitled to no further monies
or benefits. Calculation of severance payment excludes any and
all DERs (Dividend Equivalent Rights payments as noted in the
Company's standard ISO or non-qualified stock option grant
agreement). In addition, Executive shall not be eligible to
receive DER payments for which record date for the dividend is
subsequent to the Executive's termination date. Severance
eligibility is expressly conditioned and dependent upon,
Executive's compliance with the terms and conditions of Sections
7 and 8 of this Agreement.
b. CONTINUATION OF FRINGE BENEFITS
Continued health benefits for Executive and eligible
dependent(s) as set forth in Section 3(d) as if Executive's
employment under the Agreement had not been terminated until the
earlier of the following: (i) severance obligations owed by the
Company to Executive, as provided under Section 6(a), expire or
terminate, or (ii) Executive shall find alternative employment
(Executive shall be required to notify the Company immediately
upon obtaining alternative employment). Notwithstanding the
foregoing, should Executive and his eligible dependent(s) not be
coverable under the Company plans, or should the Company
exercise its prerogative to reduce and/or terminate such
benefits to Executive, the Company may instead compensate
Executive in lieu of his receiving coverage by paying Executive
directly, for each month that Executive would be eligible to
receive such benefits, the monthly dollar amount the Company
would have expended for premiums for such benefits for the
Executive, and for any dependents or beneficiaries covered at
the time of termination, less any monthly amount Executive would
have paid had he remained employed.
c. CHANGE OF CONTROL REQUIREMENTS
Notwithstanding the provisions of Paragraph 5(c), Executive
shall not be eligible for any severance if: a) Executive resigns
within six (6) months following a
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Change of Control and there has been no reduction of his base
salary or substantial and material diminution of his
responsibilities as Vice-President following the Change of
Control; or b) Executive resigns within three months of a Change
of Control even if their has been a reduction of his base salary
or substantial and material diminution of his responsibilities
as Vice-President following the Change of Control.;
7. COMPETITION, CONFIDENTIALITY, TRADE SECRETS AND INVENTIONS.
a. NON-COMPETITION
During the term of this contract, and for six months following
the termination of this Agreement, Executive shall not engage in
any other business, commercial or professional activity or
capacity that is or may be competitive with the Company or a
subsidiary or affiliate of the Company that might create a
conflict of interest with the Company, or that otherwise might
interfere directly or indirectly with the business of the
Company, without the prior written consent of the Doug Hansen or
the President of the Company. Executive further agrees that
during this time he shall not solicit any employee of the
Company, directly or indirectly, to leave the employ of the
Company.
b. DUTY TO AVOID CONFLICT OF INTEREST
During his employment by the Company, Executive agrees not to
engage or participate in, directly or indirectly, any activities
in conflict with the best interests of the Company. The Company
shall be the final decision-maker with regard to any conflict of
interest issue.
c. CONFIDENTIAL AND PROPRIETARY INFORMATION
(1) It is hereby acknowledged that Executive has and shall
gain knowledge of trade secrets and confidential
information owned by or related to the Company and/or
its affiliates including but not limited to the
following: (i) the names, lists, buying habits and
practices of their customers, clients or vendors, (ii)
their marketing and related information, (iii)
relationships between them and the persons and entities
with whom and which they have contracted, (iv) their
products, designs, software, developments, improvements
and methods of operation, (v) their financial condition,
profit performance and financial requirements, (vi) the
compensation paid to their employees, (vii) business
plans and the information contained therein, and (viii)
all other confidential information of, about or
concerning the Company, the manner of operation of the
Company and other confidential data of any kind, nature
or description relating to the Company (collectively the
"Confidential Information"). Confidential Information
does not include information which (ix) is or becomes
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generally available to the public other than as a result
of a disclosure by Executive; or (x) becomes available
to Executive on a non-confidential basis after the
termination or expiration of Executive's obligations
under this Agreement from a source other than the
Company, provided that such source is not bound by a
confidentiality agreement with or other contractual,
legal or fiduciary obligation of confidentiality to the
Company or any other party with respect to such
information; or (xi) is independently developed after
the termination or expiration of Executive's obligations
under this agreement without reference to the
Confidential Information, provided such independent
development can reasonably be proven by Executive by
written records.
(2) The parties hereby acknowledge that the Confidential
Information constitutes important, unique, material and
confidential trade secrets which affect the successful
activities of the Company, and constitute a substantial
part of the assets and goodwill of the Company. In view
of the foregoing, Executive agrees that he will not at
any time whether during or after the term of this
Agreement, except as required in the course of
Executive's employment by Company and at its direction
and for its sole benefit, in any fashion, form or
manner, directly or indirectly (i) use or divulge,
disclose, communicate or provide or permit access to any
person, firm, partnership, corporation or other entity,
any Confidential Information of any kind, nature or
description, or (ii) remove from Company's premises any
notes or records relating thereto, or copies or
facsimiles thereof (whether made by electronic,
electrical, magnetic, optical, laser, acoustic or other
means).
(3) Promptly upon the request of Company, and immediately
upon the termination of Executive's employment,
Executive shall not transfer and shall deliver to
Company all Confidential Information, and other property
belonging to the Company, including all copies thereof,
in the possession of Executive.
(4) Executive represents that the performance of all the
terms of this Agreement will not conflict with, and will
not breach, any other invention assignment agreement,
confidentiality agreement, employment agreement or
non-competition agreement to which Executive is or has
been a party. To the extent that Executive has
confidential information or materials of any former
employer, Executive acknowledges that the Company has
directed Executive to not disclose such confidential
information or materials to the Company or any of its
employees, and that the Company prohibits Executive from
using said confidential information or materials in any
work that Executive may perform for the Company.
Executive agrees that Executive will not bring with
Executive to the Company, and
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will not use or disclose any confidential, proprietary
information, or trade secrets acquired by Executive
prior to his employment with the Company. Executive will
not disclose to the Company or any of its employees, or
induce the Company or any of its employees to use, any
confidential or proprietary information or material
belonging to any previous employers or others, nor will
Executive bring to the Company or use in connection with
Executive's work for the Company copies of any software,
computer files, or any other copyrighted or trademarked
materials except those owned by or licensed to the
Company. Executive represents that he is not a party to
any other agreement that will interfere with his full
compliance with this Agreement. Executive further agrees
not to enter into any agreement, whether written or
oral, in conflict with the provisions of this Agreement.
d. INVENTIONS
Any and all inventions, discoveries or improvements that
Executive has conceived or made or may conceive or make during
the period of employment relating to or in any way pertaining to
or connected with the systems, products, computer programs,
software, apparatus or methods employed, manufactured or
constructed by the Company or to systems, products, apparatus or
methods with respect to which the Company engages in, requests
or anticipates research or development, shall be promptly and
fully disclosed and described by Executive to the Company and
shall be the sole and exclusive property of the Company, and
Executive shall assign, and hereby does assign to the Company
Executive's entire right, title and interest in and to all such
inventions, discoveries or improvements as well as any
modifications or improvements thereto that may be made. The
parties agree that any inventions, discoveries or ideas that
Executive has created or possesses prior to his employment by
the Company are specified in Appendix B attached to this
Agreement and will not be considered to be the property of the
Company.
The obligations outlined in this Section 7, except for the
requirements as to disclosure, do not apply to any invention
that qualifies fully under California Labor Code section 2870 or
to any rights Executive may have acquired in connection with an
invention, discovery or improvement that was developed entirely
on Executive's own time for which no equipment, supplies,
facilities or trade secret information of the Company was used
and (a) that does not relate directly or indirectly to the
business of the Company or to the Company's actual or
demonstrable anticipated research or development, or (b) that
does not result from any work performed by Executive for the
Company.
e. BREACH
It is expressly agreed that each breach of this Section 7 is a
distinct and material breach of this Agreement and that solely a
monetary remedy would be inadequate,
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impracticable and extremely difficult to prove, and that each
such breach would cause the Company irreparable harm. It is
further agreed that, in addition to any and all remedies
available at law or equity (including money damages), either
party shall be entitled to temporary and permanent injunctive
relief to enforce the provisions of this Section, without the
necessity of proving actual damages. It is further agreed that
the either party shall be entitled to seek such equitable relief
in any forum, including a court of law, notwithstanding the
provisions of Section 8 and the Alternative Dispute Resolution
Agreement incorporated therein. Either party may pursue any of
the remedies described herein concurrently or consecutively in
any order as to any such breach or violation, and the pursuit of
one of such remedies at any time will not be deemed an election
of remedies or waiver of the right to pursue any of the other
such remedies. Any breach of this Section shall immediately
terminate any obligations by the Company to provide Executive
with severance and continued benefits pursuant to Section 6 of
this Agreement.
f. UNENFORCEABILITY
Should any portion of this Section 7 be deemed unenforceable
because of its scope, duration or effect, and only in such
event, then the parties expressly consent and agree to such
limitation on scope, duration or effect as may be finally
adjudicated as enforceable, to give this Section its maximum
permissible scope, duration and effect.
8. SUBMISSION TO ARBITRATION
In the event there is any dispute arising out of Executive's employment,
the termination of that employment, or arising out of this Agreement,
the Company and Executive agree to submit such dispute, except as to
those matters specifically exempt per Section 7, to binding arbitration
in accordance with the terms of the Alternative Dispute Agreement set
forth in Appendix C to this Agreement and incorporated herein.
9. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the
laws of the State of California, excluding its choice of law rules.
10. INTERPRETATION
This Agreement shall be interpreted in accordance with the plain meaning
of its terms and not strictly for or against either party.
11. ENTIRE AGREEMENT
This Agreement, together with Appendices A, B, C and D, embodies the
complete agreement and understanding of the parties related to
Executive's employment by the
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Company, superseding any and all other prior or contemporaneous oral or
written agreements between the parties hereto with respect to the
employment of Executive by the Company, and contains all of the
covenants and agreements of any kind whatsoever between the parties with
respect to such employment. Each party acknowledges that no
representations, inducements, promises or agreements, whether oral or
written, express or implied, have been made by either party or anyone
acting on behalf of a party, that are not incorporated herein and that
no other agreement or promise not contained herein shall be valid or
binding. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
12. MODIFICATION
This Agreement may be amended only by an agreement in writing signed by
the parties hereto.
13. WAIVER
Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of,
or failure to insist upon strict compliance with, any right or power
hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times. This Agreement shall
not be modified in any respect except by a writing executed by the
parties.
14. INVALIDITY
Each term, clause and provision of this Agreement is separate and
independent, and should any term, clause or provision of this Agreement
be found to be invalid or unenforceable, the validity of the remaining
terms, clauses, and provisions shall not be affected.
15. NOTICES
Any notice provided for in this Agreement shall be in writing and shall
be either personally delivered, mailed first class mail (postage
prepaid), or sent by facsimile or reputable overnight courier service
(charges prepaid) to the recipient at the following addresses (or at
such address as the recipient party has specified by prior written
notice to the sending party):
To the Company: Doug Hansen
President
Redwood Trust, Inc.,
591 Redwood Highway, Suite 3100,
Mill Valley, CA 94941
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To Executive: Andrew Sirkis
499 Marina Blvd., #306
San Francisco, CA 94123
Each party shall be responsible for keeping such party's address
current. Notices shall be deemed to have been given hereunder when
delivered personally, three business days after deposit in the U.S.
mail, on the date of delivery by facsimile (if transmitted before 5:00
p.m. local time), and/or one day after deposit with a reputable
overnight courier service.
16. VOLUNTARY AGREEMENT
Executive and the Company represent and agree that each has reviewed all
aspects of this Agreement, has carefully read and fully understands all
provisions of this Agreement, and is voluntarily entering into this
Agreement. Each party represents and agrees that such party has had the
opportunity to review any and all aspects of this Agreement with the
legal, tax or other advisor(s) of such party's choice before executing
this Agreement.
17. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of and
shall be enforceable against Executive's heirs, beneficiaries and legal
representatives. It is agreed that the rights and obligations of
Executive may not be delegated or assigned except as specifically set
forth in this Agreement. In the event of a sale of all or substantially
all of the Company's assets, including the stock of the Company, or
consolidation or merger of the Company with or into another corporation
or entity or individual, the Company may assign its rights and
obligations under this Agreement to its successor-in-interest, and such
successor-in-interest shall be deemed to have acquired all rights and
assumed all obligations of the Company hereunder, including those set
forth in Section 7 of this Agreement.
18. COUNTERPARTS
This Agreement may be executed in several 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 this Agreement as
of the day, month and year first above written.
DATED:
---------------------- -----------------------------------------
Andrew Sirkis
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REDWOOD TRUST, INC.
DATED: By:
---------------------- -------------------------------------
Doug Hansen
Title: President
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APPENDIX A
ESSENTIAL RESPONSIBILITIES
- - Responsible for taking a leadership role in establishing strategic business
directions in alignment with Redwood Trust, Inc.'s ("Redwood") overall
corporate goals, as outlined in the business plan approved by the Board of
Directors.
- - Responsible for measurable results leading to Redwood achieving acceptable
returns on book value needed to achieve Redwood's Strategic Mission.
- - Responsible for expanding the Redwood's business growth by seeking new
business opportunities, broadening Redwood's product and service lines, and
creating value in Redwood's business.
- - Responsible for being an effective Redwood leader, as demonstrated through
positive interaction with everyone throughout the Company, sound and timely
decision-making, and consistent innovative approach leading to measurable
results.
- - Responsible for overseeing the continual improvement of Redwood's internal
communication, information/data management and reporting systems required
to manage and support innovative business growth and organizational
objectives.
- - Responsible for developing and managing the human resources necessary to
achieve the objectives of Redwood's business plan. This activity will
include the development of staffing plans, employee performance management,
and leveraging the use of talent and resources across functions.
- - Specific annual performance criteria may be separately attached and changed
from time to time.
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APPENDIX B
PRIOR INVENTIONS
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APPENDIX C
ALTERNATIVE DISPUTE RESOLUTION POLICY
I. AGREEMENT TO ARBITRATE
In the event that any employment dispute arises between Redwood Trust,
Inc. ("Company") and Andrew Sirkis ("Executive"), the parties involved
will make all efforts to resolve any such dispute through informal
means. If these informal attempts at resolution fail and if the dispute
arises out of or is related to the parties' Employment Agreement, the
termination of Executive's employment or alleged unlawful
discrimination, including but not limited to unlawful harassment, the
Company and Executive will submit the dispute to final and binding
arbitration, except as set forth in Section 7 of the Employment
Agreement.
The parties expressly understand and agree that arbitration is the
exclusive remedy for all such arbitrable disputes; with respect to such
disputes, no other action may be brought in court or any other forum
(except actions to compel arbitration hereunder). THIS ALTERNATIVE
DISPUTE RESOLUTION ("ADR") AGREEMENT IS A WAIVER OF THE PARTIES' RIGHTS
TO A CIVIL COURT ACTION FOR A DISPUTE COVERED BY THIS AGREEMENT; ONLY AN
ARBITRATOR, NOT A JUDGE OR JURY, WILL DECIDE THE DISPUTE.
To the fullest extent permitted by the law of the jurisdiction,
employment disputes arising out of or related to termination of
employment or alleged unlawful discrimination, including retaliation or
sexual or other unlawful harassment, shall include, but not be limited
to, the following: alleged violations of federal, state and/or local
constitutions, statutes or regulations; claims based on any purported
breach of contractual obligation, including breach of the covenant of
good faith and fair dealing; and claims based on any purported breach of
duty arising in tort, including violations of public policy. Disputes
related to workers' compensation and unemployment insurance is not
arbitrable hereunder. Claims for benefits covered by a separate benefit
plan that provides for arbitration are not covered by this ADR
Agreement. Claims that are filed with or being processed by the U.S.
Equal Employment Opportunity Commission ("EEOC"), or that are brought
under Title VII of the Civil Rights Act of 1964, as amended, are not
arbitrable under this Agreement, except that the Parties agree in
writing to do so with respect to each such dispute that may arise.
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II. REQUEST FOR ARBITRATION
A. ATTEMPT AT INFORMAL RESOLUTION OF DISPUTES
Prior to submission of any dispute to arbitration, Executive and the
Company shall attempt to resolve the dispute informally as set forth
below.
Executive and the Company will select a mediator from a list provided by
the Federal Mediation and Conciliation Service or other similar agency
who will assist the parties in attempting to reach a settlement of the
dispute. The mediator may make settlement suggestions to the parties but
shall not have the power to impose a settlement upon them. If the
dispute is resolved in mediation, the matter shall be deemed closed. If
the dispute is not resolved in mediation and goes to the next step
(binding arbitration), any proposals or compromises suggested by either
of the parties or the mediator shall not be referred to in or have any
bearing on the arbitration procedure. The mediator cannot also serve as
the arbitrator in the subsequent proceeding unless all parties expressly
agree in writing.
B. ARBITRATION PROCEDURES
The party desiring arbitration, whether Executive or the Company, must
submit a "Request For Arbitration" in writing to the other party within
the time period required by the law that applies to the claim under the
applicable statute of limitations. If the "Request for Arbitration" is
not submitted in accordance with the aforementioned time limitations,
the party failing to do so will not be able to bring his claims to this
or any other forum. The requesting party may use a "Request for
Arbitration" form supplied by the Company (Appendix D). Alternatively,
the requesting party may create a "Request For Arbitration" form that,
unless otherwise required by law, clearly states "Request For
Arbitration" at the beginning of the first page and includes the
following information:
1. A factual description of the dispute in sufficient
detail to advise the other party of the nature of the
dispute;
2. The date when the dispute first arose;
3. The names, work locations and telephone numbers of any
individuals, including employees or supervisors, with
knowledge of the dispute; and
4. The relief requested by requesting party.
The responding party may submit counterclaim(s) in accordance with
applicable law.
C. SELECTION OF THE ARBITRATOR
All disputes will be resolved by a single Arbitrator, the Arbitrator
will be mutually selected by the Company and the Executive. If the
parties cannot agree on an Arbitrator, then a list of seven (7)
arbitrators, experienced in employment matters, shall be provided
19
by the Federal Mediation and Conciliation Service. The Arbitrator will
be selected by the parties who will alternately strike names from the
list. The last name remaining on the list will be the Arbitrator
selected to resolve the dispute. Upon selection, the Arbitrator shall
set an appropriate time, date and place for the arbitration, after
conferring with the parties to the dispute.
D. THE ARBITRATOR'S AUTHORITY
The Arbitrator shall have the powers enumerated below:
1. Ruling on motions regarding discovery, and ruling on procedural
and evidentiary issues arising during the arbitration.
2. Ruling on motions to dismiss and/or motions for summary judgment
applying the standards governing such motions under the Federal
Rules of Civil Procedure.
3. Issuing protective orders on the motion of any party or third
party witness. Such protective orders may include, but are not
limited to, sealing the record of the arbitration, in whole or
in part (including discovery proceedings and motions,
transcripts, and the decision and award), to protect the privacy
or other constitutional or statutory rights of parties and/or
witnesses.
4. Determining only the issue(s) submitted to him/her. The issue(s)
must be identifiable in the "Request For Arbitration" or
counterclaim(s). Except as required by law, any issue(s) not
identifiable in those documents is outside the scope of the
Arbitrator's jurisdiction and any award involving such issue(s),
upon motion by a party, shall be vacated.
E. DISCOVERY
The discovery process shall proceed and be governed, consistent with the
standards of the Federal Rules of Civil Procedure, as follows:
1. Unless otherwise required by law, parties may obtain discovery
by any of the following methods:
a. Depositions of non-expert witnesses upon oral
examination, three (3) per side as of right, with more
permitted if leave is obtained from the Arbitrator;
b. Written interrogatories, up to a maximum combined total
of twenty (20), with the responding party having twenty
(20) days to respond;
c. Request for production of documents or things or
permission to enter upon land or other property for
inspection, with the responding party having
20
twenty (20) days to produce the documents and allow
entry or to file objections to the request;
d. Physical and mental examination, in accordance with
Federal Rule of Civil Procedure 35(a); and
e. Any motion to compel production, answers to
interrogatories or entry onto land or property must be
made to the Arbitrator within fifteen (15) days of
receipt of objections.
2. To the extent permitted by the Federal Arbitration Act or
applicable California law, each party shall have the right to
subpoena witnesses and documents during discovery and for the
arbitration.
3. All discovery requests shall be submitted no less than sixty
(60) days before the hearing date.
4. The scope of discoverable evidence shall be in accordance with
Federal Rule of Civil Procedure 26(b) (1).
5. The Arbitrator shall have the power to enforce the
aforementioned discovery rights and obligations by the
imposition of the same terms, conditions, consequences,
liabilities, sanctions and penalties as can or may be imposed in
like circumstances in a civil action by a federal court under
the Federal Rules of Civil Procedure, except the power to order
the arrest or imprisonment of a person.
F. HEARING PROCEDURE
The hearing shall be held at a location mutually agreed upon by the
parties, or as determined by the Arbitrator in the absence of an
agreement, and shall proceed according to the American Arbitration
Association's "National Rules for the Resolution of Employment Disputes"
as amended and effective June 1, 1997, with the following amendments:
1. The Arbitrator shall rule at the outset of the
arbitration on procedural issues that bear on whether
the arbitration is allowed to proceed.
2. Each party has the burden of proving each element of its
claims or counterclaims, and each party has the burden
of proving any of its affirmative defenses.
3. In addition to, or in lieu of closing argument, either
party shall have the right to present a post-hearing
brief, and the due date for exchanging any post-hearing
briefs shall be mutually agreed on by the parties and
the Arbitrator, or determined by the Arbitrator in the
absence of agreement.
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G. SUBSTANTIVE LAW
1. The parties agree that they will be afforded the
identical legal equitable and statutory remedies as
would be afforded them were they to bring an action in a
court of competent jurisdiction.
2. The applicable substantive law shall be the law of the
State of California or federal law. Choice of
substantive law in no way affects the procedural aspects
of the arbitration, which are exclusively governed by
the provisions of this ADR Agreement.
H. OPINION AND AWARD
The Arbitrator shall issue a written opinion and award, in conformance
with the following requirements:
1. The opinion and award must be signed and dated by the
Arbitrator.
2. The Arbitrator's opinion and award shall decide all
issues submitted.
3. The Arbitrator's opinion and award shall set forth the
legal principles supporting each part of the opinion.
4. The Arbitrator shall have the same authority to award
remedies, damages and costs as provided to a judge
and/or jury under parallel circumstances.
I. ENFORCEMENT OF ARBITRATOR'S AWARD
Following the issuance of the Arbitrator's decision, any party may
petition a court to confirm, enforce, correct or vacate the Arbitrator's
opinion and award under the Federal Arbitration Act, and/or applicable
California law.
J. FEES AND COSTS
Unless otherwise required by law, fees and costs shall be allocated in
the following manner:
1. Each party shall be responsible for its own attorneys'
fees, except as otherwise provided by law for the
particular claim(s) at issue.
2. The Company shall pay the entire cost of the
arbitrator's services, the facility in which the
arbitration is to be held, and any similar costs, except
that Executive shall contribute toward these costs an
amount equal to the then-current filing fee in
California Superior Court charged for filing a complaint
or for first appearing, whichever is lower.
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3. The Company shall pay the entire cost of a court
reporter to transcribe the arbitration proceedings. Each
party shall advance the cost for said party's transcript
of the proceedings. Each party shall advance its own
costs for witness fees, service and subpoena charges,
copying, or other incidental costs that each party would
bear during the course of a civil lawsuit.
4. Each party shall be responsible for its costs associated
with discovery, except as required by law or court
order.
III. SEVERABILITY
Each term, clause and provision of this ADR Agreement is separate and
independent, and should any term, clause or provision of this ADR
Agreement be found to be invalid or unenforceable, the validity of the
remaining terms, clauses, and provisions shall not be affected. As to
those terms, clauses and provisions found to be invalid or
unenforceable, they shall be replaced with valid and enforceable terms,
clauses or provisions or shall be modified, in order to achieve, to the
fullest extent possible, the economic, business and other purposes of
the invalid or unenforceable terms, clauses or provisions.
Dated:
---------------------- -----------------------------------------
Andrew Sirkis
REDWOOD TRUST, INC.
Dated: By:
---------------------- -------------------------------------
Doug Hansen
Title: President
----------------------------------
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APPENDIX D
REQUEST FOR ARBITRATION FORM
ALTERNATIVE DISPUTE RESOLUTION POLICY
- ------------------ ------------------------------------------------------------
Submission - This form (or, alternatively, a form that includes the
Requirement information below) must be submitted by the individual
claimant or the Redwood Trust, Inc. (to the President)
within the time period required by the law that applies
to the claim.
- If Redwood Trust, Inc. requests arbitration, the form
must also be served on the individual within the
appropriate time period.
- ------------------ ------------------------------------------------------------
1. State the nature of the claim in detail:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Continue on reverse and add pages if necessary)
Enter the date of termination or date(s) of alleged incident(s) (i.e., date of
last instance of unlawful discrimination, sexual or other unlawful harassment):
_______/________/_______
Month Day Year
2. Provide the names and work locations of any individuals, including
employees or supervisors, with knowledge of the dispute:
Name Job Title Work Location
- ------------------- ------------------------- --------------------------
- ------------------- ------------------------- --------------------------
- ------------------- ------------------------- --------------------------
- ------------------- ------------------------- --------------------------
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3. Describe the relief requested (i.e., what you want done):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please attach any documents relevant to the dispute.)
Signature of Party Requesting arbitration:
Redwood Trust, Inc.
Date:
- -------------------------- -------------------
Signature of Executive:
Date:
- -------------------------- -------------------