EXHIBIT NO. 10.39
November 23, 1998
Mr. Stephen J. Austin
Executive Vice President and
Director of Risk Evaluation Group
4565 Colorado Boulevard
Los Angeles, California 90039
Re: SEVERANCE AGREEMENT
Dear Steve:
This will memorialize our agreement, subject to the conditions described below,
on the terms of the severance of your employment by Bank Plus Corporation ("Bank
Plus") and its affiliates, including Fidelity Federal Bank, FSB ("Fidelity,"
together with Bank Plus and their respective subsidiaries, the "Company"), as
well as the termination of the Employment Agreement dated as of August 1, 1997
(the "Employment Agreement"), between you and Fidelity.
You agree to resign all positions, whether as an officer, director or employee,
with Bank Plus, Fidelity and their respective affiliates, all effective March
31, 1999, on the following terms and subject to the following conditions:
1. Fidelity would retain you for a period of 1 year commencing April
1,1999 to provide consulting services as an independent contractor to
the Company pursuant to a consulting agreement under which you would
make yourself available for not more than forty hours per month, in
exchange for which Fidelity would agree to pay you a bi-weekly
consulting fee of $6,807.70 during such period, for a total of
$177,000.20; such consulting agreement would not provide for a
non-compete provision; the full amount of any unpaid balance of the
consulting fee for any remaining term of the consulting agreement will
accelerate upon a change in control, as that term is defined in the
Employment Agreement;
2. Fidelity would provide you with health benefits for one year (the
Company would pay for the cost of coverage under COBRA, less the amount
you are currently paying for medical and dental coverage under the
Company's plans) or such shorter period of time until you obtain other
employment with reasonably comparable health benefits;
Stephen J. Austin
November 23, 1998
Page 2
3. You would supply Bank Plus and Fidelity and their respective
affiliates, officers, directors, employees, consultants, accountants
and attorneys with a general release of all known and unknown claims;
4. Bank Plus and Fidelity would supply you with a release of all known
claims and claims which in the exercise of reasonable diligence should
have been known by Fidelity;
5. Bank Plus and Fidelity would reaffirm your rights to indemnification
under the terms of their respective bylaws and indemnity agreements
with you;
6. Fidelity would pay you for all accrued and unused vacation hours as of
March 31, 1999 at the rate of your current base salary, not to exceed
200 hours;
7. Subject to Compensation Committee approval, the restrictions on your
2,896 shares of restricted stock in the Bank Plus Corporation Stock
Option and Equity Incentive Plan will lapse and you would become 100%
vested as of April 1, 1999; however, all stock options will be
immediately released to the Company effective November 23, 1998;
8. You will remain entitled to your vested benefits under the Deferred
Compensation Plan and 401(k) Savings and Investment Plan; all other
employment related agreements, except as expressly provided for herein,
shall be of no force and effect after November 23, 1998; and
9. From the present until March 31, 1999, you agree to make yourself
reasonably available and your job responsibilities will include:
a. Completion of the documentation for all of the corrective
actions and responses to the report of examination from
the recent OTS safety and soundness examination.
b. Consistent with my recommended realignment and
reorganization of senior management, supporting and
working to effect an orderly reassignment and transition
of the departments and executives that report to you,
including the transition of the internal audit function
and the reassignment of the compliance department, credit
policy, credit administration, security, appraisal and
insurance.
c. Management and completion of the internal audit
co-sourcing partner project and the items specified in
your memorandum of November 20, 1998 to Christina
Sutherland (a copy of which attached hereto).
Stephen J. Austin
November 23, 1998
Page 3
This agreement may be executed by the parties hereto in counterparts. After your
execution of this agreement, we will proceed with the finalization of the
consulting and release agreements.
Sincerely,
BANK PLUS CORPORATION
FIDELITY FEDERAL BANK, A FSB
By: /S/ MARK K. MASON
---------------------------------
Mark K. Mason,
Chief Executive Officer
The foregoing is accepted and agreed to
this 24th day of November, 1998
/S/ STEPHEN J. AUSTIN
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Stephen J. Austin