Well Known Seasoned Issuer


    
      

        Exhibit
          10.9

        


        CHANGE
          IN CONTROL SEVERANCE AGREEMENT

        


        THIS
          CHANGE IN CONTROL SEVERANCE AGREEMENT (the “Agreement”) is made and entered into
          as of this 1st
          day of
          February, 2006 , by and between ITLA Capital Corporation (the “Company”), and
          Phillip E. Lombardi (the “Employee”).

        


        WHEREAS,
          the Employee is currently serving as Senior Managing Director, Chief of
          Lending
          Operations of the Company; and

        


        WHEREAS,
          the Board of Directors of the Company (the “Board of Directors”) recognizes
          that, as is the case with publicly held corporations generally, the possibility
          of a change in control of the Company may exist and that such possibility,
          and
          the uncertainty and questions which it may raise among management, may
          result in
          the departure or distraction of key management personnel to the detriment
          of the
          Company and its stockholders;

        


        WHEREAS,
          the Board of Directors believes it is in the best interests of the Company
          to
          enter into this Agreement with the Employee in order to assure continuity
          of
          management of the Company and to reinforce and encourage the continued
          attention
          and dedication of the Employee to the Employee’s assigned duties without
          distraction in the face of potentially disruptive circumstances arising
          from the
          possibility of a change in control of the Company, although no such change
          is
          now contemplated; and

        


        WHEREAS,
          the Board of Directors has approved and authorized the execution of this
          Agreement with the Employee;

        


        NOW,
          THEREFORE, in consideration of the foregoing and of the respective covenants
          and
          agreements of the parties herein, it is AGREED as follows:

        


        1.
          Definitions.

        


        (a)
          The
          term “Change in Control” means the occurrence of any of the following events
          with respect to the Company: (1) any person (as the term is used in section
          13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) is
          or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
          Act), directly or indirectly of securities of the Company representing
          33.33% or
          more of the Company’s outstanding securities; (2) individuals who are members of
          the Board of Directors of the Company on the date hereof (the “Incumbent Board”)
          cease for any reason to constitute at least a majority thereof, provided
          that
          any person becoming a director subsequent to the date hereof whose election
          was
          approved by a vote of at least two thirds of the directors comprising the
          Incumbent Board, or whose nomination for election by the Company’s stockholders
          was approved by the nominating committee serving under an Incumbent Board,
          shall
          be considered a member of the Incumbent Board; (3) a reorganization, merger,
          consolidation, sale of all or substantially all of the assets of the Company
          or
          a similar transaction in which the Company is not the resulting entity
          (unless
          the continuing ownership requirements clause (4) below are met with respect
          to
          the resulting entity); or (4) a merger or consolidation of the Company
          with any
          other corporation other than a merger or consolidation in which the voting
          securities of the Company outstanding immediately prior thereto represent
          at
          least 66.67% of the total voting power represented by the voting securities
          of
          the Company or the surviving entity outstanding immediately after such
          merger or
          consolidation. The term “Change in Control” shall not include: (1) an
          acquisition of securities by an employee benefit plan of the Company; or
          (2) any
          of the above mentioned events or occurrences which require but do not receive
          the requisite government or regulatory approval to bring the event or occurrence
          to fruition.

        


        (b)
          The
          term “Disability” means the Employee’s absence from his or her duties with the
          Company on a full time basis for six consecutive months as a result of
          his or
          her incapacity due to mental or physical illness, unless within 30 days
          after
          the Company gives the Employee written notice of termination of employment
          for
          such reason the Employee shall have returned to full time performance of
          his or
          her duties.

        


        (c)
          The
          term “Date of Termination” means the date specified in the Notice of
          Termination, given pursuant to Section 4 of this Agreement, provided that
          if
          within 15 days after any Notice of Termination is given or, if later, prior
          to
          the Date of Termination specified in such Notice, the party receiving such
          Notice of Termination notifies the other party that a dispute exists concerning
          the Notice of Termination, then the Date of Termination shall be the date
          on
          which the dispute is finally determined, whether by mutual written agreement
          of
          the parties, by a binding arbitration award, or by a final judgment, order
          or
          decree of a court of competent jurisdiction (which is not appealable or
          with
          respect to which the time for appeal therefrom has expired and no appeal
          has
          been perfected); and provided further that the Date of Termination shall
          be
          extended by a notice of dispute only if such notice is given in good faith
          and
          sets forth in reasonable detail the facts and circumstances that are the
          basis
          for the dispute, and the party giving such notice pursues the resolution
          of such
          dispute with reasonable diligence. For purposes of this Section 1(c), a
          “dispute” extending the Date of Termination shall be limited to a dispute as to
          whether the termination was a “Termination for Cause” if the Notice of
          Termination given by the Company states that the termination was a Termination
          for Cause or whether the termination was an Involuntary Termination if
          the
          Notice of Termination is given by the Employee. Notwithstanding the pendency
          of
          any such dispute, the Company shall continue to pay the Employee the Employee’s
          full base salary at the rate in effect when the Notice of Termination was
          given
          and continue the Employee as a participant in all benefit plans in which
          the
          Employee was participating when the Notice of Termination was given ) unless
          continued employment is a requirement for participation in any such benefit
          plan), until the dispute is finally resolved in accordance with this Section
          1(c).

        


        (d)
          The
          term “Involuntary Termination” means the termination of the employment of the
          Employee without the Employee’s express written consent or a material diminution
          of or interference with the Employee’s duties, responsibilities and benefits as
          these same duties, responsibilities and benefits exist the day prior to
          the
          Change the Change of Control, including (without limitation) any of the
          following actions unless consented to in writing by the Employee: (1) a
          requirement that the Employee be based at a place other than the Employee’s work
          location immediately prior to the Change of Control or within 35 miles
          thereof,
          except for reasonable travel on Company business; (2) a material demotion
          of the
          Employee; (3) a material reduction in the number or seniority of other
          Company
          personnel reporting to the Employee or a material reduction in the frequency
          with which, or in the nature of the matters with respect to which, such
          personnel are to report to the Employee, other than as part of a Company-wide
          reduction in staff; (4) a material adverse change in the Employee’s salary,
          other than as part of an overall program applied uniformly and with equitable
          effect to all members of the senior management of the Company; (5) a material
          permanent increase in the required hours of work or the workload of the
          Employee; (6) a material change in the reporting relationship to which
          the
          Employee reports prior to the Change of Control; or (7) a material increase
          or
          decrease in business responsibilities and duties, such that the Employee’s
          qualifications as utilized prior to the Change of Control are no longer
          consistent with the qualifications needed for the revised position. The
          term
“Involuntary Termination” does not include Termination for Cause, termination of
          employment due to retirement on or after the Employee attains age 65, death,
          or
          termination of employment by the Company due to Disability.

        


        (e)
          The
          term “Notice of Termination” means a notice of termination of the Employee’s
          employment pursuant to Section 4 of this Agreement.

        


        (f)
          The
          terms “Termination for Cause” and “Terminated for Cause” mean termination by the
          Company of the employment of the Employee because of (i) willful and continued
          failure by the Employee substantially to perform his or her duties (other
          than a
          failure resulting from physical or mental illness) after a demand for
          substantial performance is delivered to the Employee by the Chairman of
          the
          Board of Directors or the Chief Executive Officer of the Company which
          specifically identifies the manner in which the Employee has not substantially
          performed his or her duties, (ii) the Employee’s willful dishonesty,
          incompetence, willful misconduct, breach of fiduciary duty involving personal
          profit, intentional failure to perform stated duties, willful violation
          of any
          law, rule, regulation, or final cease-and-desist order, relating to the
          Employee’s employment with the Company or otherwise interfering with the
          Employee’s ability to carry out the duties of the employment, or material breach
          of any provision of this Agreement or any employment agreement between
          the
          Company and the Employee; provided that no act or failure to act shall
          be
          considered “willful” unless done or omitted to be done by the Employee in bad
          faith and without reasonable belief that the act or omission was in or
          not
          opposed to the beat interests of the Company. Any act or failure to act
          based
          upon authority pursuant to a resolution duly adopted by the Board of Directors
          or upon the advice of counsel for the Company shall be conclusively presumed
          to
          be done or omitted to be done in good faith and in the beat interacts of
          the
          Company. The Employee’s attention to matters not directly related to the
          business of the Company shall not provide a basis for Termination for Cause
          if
          the Board of Directors or the Chief Executive Officer of the Company has
          approved the Employee’s engaging in such activities. The Employee shall not be
          deemed to have been Terminated for Cause unless and until the Company has
          delivered to the Employee a notice containing a resolution adopted by not
          less
          than three-quarters of the entire membership of the Board of Directors
          at a
          meeting called and held for the purpose, after reasonable notice to the
          Employee
          and opportunity for him to appear with counsel before the Board of Directors,
          finding that in the good faith opinion of the Board of Directors the Employee
          has engaged in conduct described in this Section 1(f) and specifying the
          particulars in detail.

        


        2.
          Term.
          The term of this Agreement shall be one year from the date first written
          above,
          provided that on each anniversary of such date, the term shall be extended
          for
          an additional year unless at least 90 days prior such anniversary, either
          the
          Company or the Employee gives notice to the other that the term of this
          Agreement shall not be extended further, and provided further that
          notwithstanding the delivery of any such notice, the term of this Agreement
          shall be extended until the expiration of 24 months following the date
          upon
          which a Change in Control shall have occurred during the term of the Agreement
          including extensions of the term pursuant to the first proviso of this
          sentence.

        


        3.
          Severance Benefits.

        


        (a)
          In
          the event of Involuntary Termination in connection with or within 24 months
          after a Change in Control which occurs during the term of this Agreement,
          the
          Company shall, (1) pay to the Employee in a lump sum in cash within 25
          business
          days after the Date of Termination an amount equal to the sum of (i) the
          Employee’s base salary for a period of 18 months at the rate of base salary in
          effect on the date of the Change in Control or the Date of Termination,
          whichever is greater, and (ii) the amount of the Employee’s prior year’s annual
          bonus multiplied by a fraction with a numerator of the number of days which
          have
          elapsed through the Date of Termination in the fiscal year in which the
          Date of
          Termination occurs and a denominator of 365; (2) provide to the Employee
          for 18
          months following the Date of Termination, such health, dental and life
          insurance
          benefits as the Company maintained for the Employee at the Date of Termination
          on terms as favorable to the Employee as applied at the Date of Termination,
          or
          at the election of the Employee (or, notwithstanding the election of the
          Employee at the election of the Company if coverage under the Company’s group
          plan is not available to the Employee) cash in an amount equal to the premium
          cost being paid by the company with respect to the Employee for such benefits
          immediately prior to the Date of Termination); (3) transfer to Employee
          title to
          the Company owned vehicle currently used by the Employee, if any, with
          the
          Company paying all coats, licensing fees and taxes (excluding income taxes)
          associated with the transfer of title, or in the event the Employee receives
          a
          monthly cash car allowance in lieu of use of a Company vehicle, the Company
          shall pay to the Employee pursuant to this paragraph an additional sum
          equal to
          18 times the greater of the monthly car allowance in effect on the date
          of the
          Change of Control or the Date of Termination; (4) and vesting of all of
          Employee’s outstanding stock options and/or restricted stock awards with the
          Company or its affiliates. The provision of any medical benefits under
          this
          Section 3(a) shall not extend to the period for the continuation of group
          health
          benefits under the COBRA health care continuation provisions of Section
          601 of
          the Employee Retirement Income Security Act of 1974 (“ERISA”( or other
          applicable state laws. Nothing herein shall diminish the right of the Employee
          to receive any earned and accrued bonus, on a pro rata basis, for the year
          in
          which Involuntary Termination occurs or to be compensated for accrued but
          unused
          vacation and sick time.

        


        (b)
          Notwithstanding any other provision of this Agreement, if the value and
          amounts
          of benefits under this Agreement, together with any other amounts and the
          value
          of benefits received or to be received by the Employee in connection with
          a
          Change in Control would cause any amount to be nondeductible by the Company
          or
          any of its subsidiaries for federal income tax purposes pursuant to Section
          280G
          of the Internal Revenue Code of 1986, as amended (the “Code”), then amounts and
          benefits under this Agreement shall be reduced (not less than zero) to
          the
          extent necessary so as to maximize amounts and the value of benefits to
          the
          Employee without causing any amount to become nondeductible by the Company
          or
          its subsidiaries pursuant to or by reason of Section 280G of the Code.
          The
          Employee shall determine the allocation of such reduction among payments
          and
          benefits to the Employee.

        


        (c)
          Any
          payments made to the Employee pursuant to this Agreement are subject to
          and
          conditioned upon their compliance with 12 U.S.C. §1828(k) and any regulations
          promulgated thereunder.

        


        4. Notice
          of
          Termination. In the event that the Company desires to terminate the employment
          of the Employee without his consent during the term of this Agreement in
          connection with or after a Change in Control has occurred, the Company
          shall
          deliver to the Employee a written notice of termination, stating (i) whether
          such termination constitutes Termination for Cause, and, if so, setting
          forth in
          reasonable detail the facts and circumstances that are the basis for the
          Termination for Cause, and (ii) specifying the Date of Termination. In
          the event
          that the Employee determines in good faith that he or she has suffered
          Involuntary Termination of his employment, the Employee shall send a written
          notice to the Company stating the circumstances that constitute Involuntary
          Termination and the Date of Termination. No provision of this Agreement
          shall be
          construed as providing to the Employee any right to be retained as an employee
          of the Company.

        


        5. No
          Mitigation. The Employee shall not be required to mitigate the amount of
          any
          salary or other payment or benefit provided for in this Agreement by seeking
          other employment or otherwise, nor shall the amount of any payment or benefit
          provided for in this Agreement be reduced by any compensation earned by
          the
          Employee as the result of employment by another employer, by retirement
          benefits
          after the date of termination or otherwise, except as expressly set forth
          herein.

        


        6. Attorneys
          and/or Fees. If the Employee is purportedly Terminated for Cause or
          Involuntarily Terminated and the Company denies payments and/or benefits
          under
          Section 3 of this Agreement on the basis that the Employee experienced
          Termination for Cause rather than Involuntary Termination, but it is determined
          by a court of competent jurisdiction or by an arbitrator pursuant to Section
          14
          that cause as contemplated by Section 1(f) of this Agreement did not exist
          for
          termination of the Employee’s employment, or if in any event it is determined by
          any such court or arbitrator that the Company has failed to make timely
          payment
          of any amounts or provision of any benefits owed to the Employee under
          this
          Agreement, the Employee shall be entitled to reimbursement for all reasonable
          costs, including attorneys’ fees, incurred in challenging such termination of
          employment or collecting such amounts or benefits. Such reimbursement shall
          be
          in addition to all rights which the Employee is otherwise entitled under
          this
          Agreement.

        


        7. No
          Assignments.

        


        (a) This
          Agreement is personal to each of the parties hereto, and neither party
          may
          assign or delegate any of its rights or obligations hereunder without first
          obtaining the written consent of the other party; provided, however, that
          the
          Company shall require any successor or assign (whether direct or indirect,
          by
          purchase, merger, consolidation or otherwise) to all or substantially all
          of the
          business and/or assets of the Company, by an assumption agreement in form
          and
          substance satisfactory to the Employee, to expressly assume and agree to
          perform
          this Agreement in the same manner and to the same extent that the Company
          would
          be required to perform it if no such succession or assignment had taken
          place.
          Failure of the Company to obtain such an assumption agreement prior to
          the
          effectiveness of any such succession or assignment shall be a breach of
          this
          Agreement and shall entitle the Employee to compensation from the Company
          in the
          same amount and on the same terms as the compensation pursuant to Section
          3
          hereof. For purposes of implementing the provisions of this Section 7,
          the date
          on which any such succession becomes effective shall be deemed the Date
          of
          Termination.

        


        (b)
          This
          Agreement and all rights of the Employee hereunder shall inure to the benefit
          of
          and be enforceable by the Employee’s personal and legal representatives,
          executors, administrators, successors, heirs, distributees, devisees and
          legatees. If the Employee should die while any amounts would still be payable
          to
          the Employee hereunder if the Employee had continued to live, all such
          amounts,
          unless otherwise provided herein, shall be paid in accordance with the
          terms of
          this Agreement to the Employee’s devisee, legatee or other designee or if there
          is no such designee, to the Employee’s estate.

        


        8. Notice.
          For the purposes of this Agreement, notices and all other communications
          provided for in the Agreement shall be in writing and shall be deemed to
          have
          been duly given when personally delivered or sent by certified mail, return
          receipt requested, postage prepaid, to the Company at its home office,
          to the
          attention of the Board of Directors with a copy to the Secretary of the
          Company,
          or, it to the Employee, to such home or other address as the Employee has
          most
          recently provided in writing to the Company.

        


        9. Amendments.
          No amendments or additions to this Agreement hall be binding unless in
          writing
          and signed by both parties, except as herein otherwise provided.

        


        10. Headings.
          The headings used in this Agreement are included solely for convenience
          and
          shall not affect, or be used in connection with, the interpretation of
          this
          Agreement.

        


        11. Severablility.
          The provisions of this Agreement shall be deemed severable and the invalidity
          or
          unenforceability of any provision shall not affect the validity or enforceablity
          of the other provisions hereof.

        


        12. Governing
          Law. This Agreement shall be governed by the laws of the United States
          to the
          extent applicable and otherwise by the laws of the State of
          California.

        


        13. Arbitration.
          Any dispute or controversy arising under or in connection with this Agreement
          shall be settled exclusively by non-binding arbitration in accordance with
          the
          rules of the American Arbitration Association then in effect. Judgment
          may be
          entered on the arbitrator’s award in any court having jurisdiction, and shall
          include an award of attorneys’ fees and costs to the prevailing
          party.

        


        The
          parties have executed this Agreement as of the day and year first above
          written.


        
          
             

          

          
             

            
              

            

          

          
             

          

        


        


        THIS
          AGREEMENT CONTAINS A NON-BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED
          BY
          THE PARTIES.

        


        ITLA
          CAPITAL CORPORATION

        


        


        /s/
          George W. Haligowski   

        By:
          George W. Haligowski    

        Its:
          Chairman, President and Chief Executive Officer

        


        


        EMPLOYEE

         

        /s/
          Phillip E. Lombardi   

        Phillip
          E. Lombardi