Exhibit 10.128

 

March 1, 2005

 

Mr. Mario Radrigan

7 Arado

Rancho Santa Margarita, CA 92688

 

  Re: Employment Agreement

 

Dear Mr. Radrigan:

 

This letter agreement and attachments hereto, (collectively the “Agreement”) set
forth the terms and conditions of your employment with United PanAm Financial
Corp (“Employer”) and its subsidiary United Auto Credit Corporation (“UACC”),
both of which may be referred to interchangeably hereinafter as “Employer”. By
signing this Agreement, you will be agreeing to these terms. It is important
that you understand clearly both what your benefits are and what is expected of
you by Employer. The effective date of this Agreement (the “Effective Date”)
shall be as of March 1, 2005 and will replace your previous agreement.

 

1. Term. This Agreement shall have a term of three (3) years, commencing as of
the Effective Date (the “Term”). Where used herein, “Term” shall refer to the
entire period of your employment by Employer from and after the Effective Date,
whether for the period provided above or as extended or terminated earlier as
hereinafter provided.

 

2. Duties. You shall hold the office of Executive Vice President and Chief
Administrative Officer of UPFC and UACC. You shall perform the duties
customarily performed by individuals holding a similar title with other
financial institutions or as otherwise may be agreed upon by Employer and you
from time to time. During the Term hereof, you shall perform the services herein
contemplated faithfully, diligently and to the best of your ability in
compliance with instructions and policies of senior management, the Board of
Directors and with all applicable laws and regulations.

 

3. Compensation.

 

  a) Base Salary. For your service rendered to the Employer or any subsidiary
corporation hereunder, during the Term hereof, the Employer shall pay or cause
to be paid a base salary to you at the rate of $180,000 per annum from March 1,
2005 to February 28, 2006, $190,000 per annum from March 1, 2006 to February 28,
2007, and $200,000 per annum from March 1, 2007 to February 28, 2008, payable in
conformity with employer’s normal payroll periods and procedures.

 

  b) Bonus. In addition to the base salary provided for under Section 3(a)
above, you shall be entitled to annual bonus compensation in accordance with the
incentive compensation formula set forth in Exhibit A to this Agreement. Among
other things, the incentive compensation formula establishes certain performance
criteria and sales objectives by which the amount of your bonus compensation, if
any, is to be determined.

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  c) Automobile Allowance. You shall receive during the Term of this Agreement
an automobile allowance of Two Hundred Dollars ($200) per month.

 

4. Other Benefits. During the Term hereof and unless otherwise agreed to by
Employer and you:

 

  a) Vacation. You shall be entitled to a total of four (4) weeks paid vacation,
the amount and term of which shall be determined in accordance with the policies
of Employer as in effect from time to time.

 

  b) Group Medical, Life Insurance and Other Benefits. You will be eligible for
the medical, dental, vision, life insurance and long-term disability plans that
are generally applicable to your employment classification.

 

5. Business Expenses. You shall be entitled to reimbursement by Employer for any
and all ordinary and necessary business expenses reasonably incurred by you in
the performance of your duties and in acting for Employer during the Term of
this Agreement, provided that you furnish to Employer adequate records and other
documentation as may be required for the substantiation of such expenditures as
a business expense.

 

6. Termination.

 

  a) Termination for Cause. The Board may for cause terminate your employment at
any time during the Term of this Agreement. In such event, all of your rights
under this Agreement shall terminate and you shall have no right to receive
compensation, and other benefits shall cease for any period after the effective
date of such termination for cause. Any bonus compensation otherwise accrued
shall be forfeited. Termination for “cause” shall be defined as your personal
dishonesty, willful misconduct, breach of fiduciary or duty of loyalty,
continuing intentional or habitual failure to perform stated duties, violation
of any law (other than minor traffic violations or similar misdemeanor
offenses), rule or regulation adopted by any regulatory agency with jurisdiction
over Employer, any judgment, ruling or decree by any court of competent
jurisdiction or administrative body that precludes or impairs your ability to
perform the services contemplated by this Agreement or any material breach by
you of any provision of this Agreement.

 

  b) Termination Without Cause. Employer may terminate your employment without
cause at any time during the Term of this Agreement. In the event that Employer
terminates your employment without cause, you shall be entitled to receive as
severance compensation an amount as provided in Exhibit B. The severance payment
under this Section 6(b) shall be provided in a lump sum or, at your election, in
equal monthly installments for a period not to exceed six (6) months from the
date of termination. This payment shall be in lieu of any and all other
compensation due under the agreement unless previously vested or earned, except
the amount of any bonus compensation payable to you under Section 3(b) hereof,
shall be prorated through the date of termination.

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  c) Compliance with Law and Regulation. You and Employer expressly acknowledge
and agree that any payments made to you pursuant to this Agreement or otherwise
are subject to and conditioned upon compliance with any applicable regulations.

 

  d) Disability. In the event that you shall fail, because of illness,
incapacity or injury, to render the services contemplated by this Agreement for
three (3) consecutive calendar months, or for shorter periods aggregating four
(4) months in any twelve (12) month period, your employment hereunder may be
terminated by written notice from Employer to you. In the event that your
employment is terminated under this Section 6(g), you shall receive the
difference between any disability payments provided through insurance plans
offered by Employer, if any, provided you have enrolled in such plans and paid
the cost thereof, and your base salary as set forth in Section 3(a) hereof, for
six months after notice from Employer, plus the amount of any bonus compensation
payable to you under Section 3(b) hereof, prorated through the date of
termination. Such termination shall not affect any rights, which you may have
pursuant to any insurance or other death benefit, or any stock option plans, or
options thereunder, which rights shall continue to be governed by the provisions
of such plans and arrangements.

 

  e) Death. If your employment is terminated by reason of your death, this
Agreement shall terminate without further obligations of Employer to you (or
your heirs or legal representatives) under this Agreement, other than for
payment of: (i) your base salary (as set forth in Section 3(a) hereof) through
the date of termination; (ii) the amount of any bonus compensation payable to
you under Section 3(b) above, prorated through the date of termination; (iii)
any compensation previously deferred by you; (iv) any accrued vacation and/.or
sick leave pay; and (v) any amounts due pursuant to the terms of any applicable
welfare benefit plan. All of the foregoing amounts shall be paid to your estate
or beneficiary, as applicable, in a lump sum in cash within thirty (30) days
after the date of termination or earlier as required by applicable law.

 

7. Disclosure or Use of Employer’s Trade Secrets. During the Term hereof, you
will have access to and become acquainted with what you and Employer acknowledge
are trade secrets or confidential or proprietary information of Employer
(including but not limited to products, employees, practices, policies or
process). You shall not use or disclose any trade secrets, confidential or
proprietary information, directly or indirectly, or cause them to be used or
disclosed in any manner, except as may be required or requested by Employer, by
court order or under applicable law or regulation. This paragraph shall survive
the termination of this agreement.

 

8. Return of Documents. You expressly agree that all manuals, documents, files,
reports, studies or other materials used and/or developed by you for Employer
during the Term of this Agreement or prior thereto while you were employed by
Employer are solely the property of Employer, and that you have no right, title
or interest therein. Upon termination of this Agreement, you or your
representative shall promptly deliver possession of all such materials
(including any copies thereof) to Employer.

 

9. Notices. All notices, demands or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered in person, or
sent by United States mail, certified or registered, with return receipt
requested, if to you, addressed to you at your last residence address as shown
in the records of Employer, and if to Employer, addressed to the President of
Employer at Employer’s principal office.

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10. Governing Law and Jurisdiction. This Agreement, the legal relations between
the parties and any action instituted by any party arising under or in
connection with this Agreement, shall be governed by and interpreted in
accordance with the laws of the State of California.

 

11. Arbitration. Any dispute, controversy or claim arising out of or in respect
of this Agreement (or its validity, interpretation or enforcement), the
employment relationship or the subject matter hereof shall at the request of
either party be submitted to and settled by arbitration conducted at a mutually
convenient office of the Judicial Arbitration & Mediation Services, Inc.
(“JAMS”). Employer and Employee may agree on a retired judge from the JAMS
panel. If we are unable to agree upon a retired judge, JAMS will provide a list
of three available judges and each party may strike one. If two of the three
judges are stricken, the remaining judge will serve as arbitrator. If two
arbitrators remain, the first judge listed shall serve as arbitrator. Employer
and you agree that arbitration must be initiated within two years after the
claim breach occurred and that the failure to initiate arbitration within the
two-year period constitutes an absolute bar to the institution of any new
proceedings related to such alleged breach. The aggrieved party can initiate
arbitration by sending written notice of any intention to arbitrate by
registered or certified mail to all parties and to JAMS. The notice must contain
a description of the dispute, the amount involved and the remedy sought. The
prevailing party in such proceeding will be entitled to the reasonable
attorneys’ fees and expenses of counsel and costs incurred by reason of such
arbitration.

 

12. Benefit of Agreement. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that you may not assign any interest in this
Agreement without the prior written consent of Employer.

 

13. Captions. Captions and paragraph heading used in this Agreement are for
convenience only and shall not be used in interpreting this Agreement.

 

14. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to your employment by Employer, and it expressly supersedes
any and all other agreements, either oral or written, relating thereto.

 

15. Severability. Should any provision of this Agreement for any reason be
declared invalid, void or unenforceable by a court of competent jurisdiction,
the validity and binding effect of any remaining portions of this Agreement
shall remain in full force and effect as if this Agreement had been executed
with such invalid, void or unenforceable provisions eliminated; provided,
however, that the remaining provisions still reflect the intent of the parties
to this Agreement.

 

16. Amendments. This Agreement may not be amended or modified except by a
written agreement signed by you and the President of United PanAm Financial
Corp. This Agreement and any amendment thereof may be executed in counterparts.

 

17. Non-Solicitation. You agree that for a period of one year after the
termination of employment you will not, except in the case of termination
pursuant to Section 6(b) hereof, on behalf of the Employee or on behalf of any
other individual, association or entity, call on any of the customers of
Employer for the purpose of soliciting or inducing any of such customers to
acquire (or providing to any of such customers) any product or service provided
by Employer, nor will Employee in any way, directly or indirectly, as agent or
otherwise, in any other manner solicit, influence or encourage such customers to
take away or to divert or direct their business to Employee or any other person
or entity by or with which Employee is employed, associated, affiliated or
otherwise related.

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18. Employees. Employee agrees that for a period of two years after the
termination of Employee’s employment, except in the case of termination pursuant
to Section 6(b) hereof, Employee will not, directly or indirectly, disrupt,
damage, impair, or interfere with Employer’s business by soliciting,
influencing, encouraging or recruiting any employee of Employer to work for
Employee or any Employee Related Entity.

 

 

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We look forward to your continued successful association with United PanAm
Financial Corp. In order to confirm your agreement with and acceptance of the
terms and conditions set forth above, please sign and date one copy of this
Agreement where indicated below and return it to the Human Resources Department.
The other copy is for your records.

 

Very truly yours,

/s/ Ray Thousand

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Ray Thousand President and CEO

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I agree to the terms of employment set forth in this Agreement subject to
approval of the Board of Directors of United PanAm Financial Corp.

 

/s/ Mario Radrigan

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3-1-05

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    Employee       Date    

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EXHIBIT B

Severance Compensation

Upon Termination Without Cause

Pursuant to 6(b)

 

If termination occurs during the first two years of the Term, the payment shall
be equal to twelve (12) months salary at the then current base salary, plus
prorated bonus through the date of termination.

 

If termination occurs in the third year, the amount paid shall be the actual
amount of base salary remaining to be paid to the end of the Term, plus prorated
bonus through the date of termination.

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EXHIBIT A

Bonus Calculations

 

GOALS for 2005

 

   

Bonus Level

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      % of Plan

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  UPFC Pretax Net Income  

50% of base salary

37.5% of base salary

25% of base salary

 

$42.1 MM Pretax NI

$40.5 MM Pretax NI

$39.0 MM Pretax NI

  100
90
81 %
%
% UACC Pretax Net Income  

50% of base salary

37.5% of base salary

25% of base salary

 

$42.6 MM Pretax NI

$41.0 MM Pretax NI

$39.5 MM Pretax NI

  100
95.5
85 %
%
% UACC Volume   Minimum $45MM Avg/mo for one (1) quarter       UACC Delinquency
  Max 2% Average 30+ (incl. Repos)       UACC Charge offs   Max 6.75% Average
charge off      

 

The bonus calculation, including the amounts to be used for the goals as set
forth above, shall be mutually agreed upon in years 2 and 3 based on the
approved budget.

 

“Pre-tax profit” for UACC shall be based upon the amount reflected in the
internal financial statements for UACC without any allocation for Corporate
overhead

 

Attainment of goals/bonus assumes that there are no material changes in policy
that might materially affect or limit the Auto Finance Division Business Plan.
If any material changes in policy are made, and not concurred in by you, then
goals and bonus calculation will be adjusted accordingly upon mutual agreement
of the parties.

 

Employee must be on the payroll at the end of the calendar year to be eligible
for payment of a bonus regardless of length of service or reason for termination
or resignation unless provided for specifically in the Employment Agreement. If
Employee is discharged by the Company for “Willful Misconduct” or any other
reason set forth in Paragraph 6(a) of the Employment Agreement, any right of the
Employee to a bonus shall be forfeited even if you are on the payroll at the end
of the calendar year.

 

Bonus payments will be made within 60 days after the end of the calendar year
allowing for the review of the results of operations.