Document:

EX-10.3

RETENTION AGREEMENT

THIS RETENTION AGREEMENT (this “Agreement”) is made and entered into as of      ,
2006, by and between Encore Credit Corp. (the “Company”) and      (“Employee”).

WHEREAS, Employee is currently employed by the Company or one of its subsidiaries as its
     ;

WHEREAS, the Company is exploring alternatives to maximize shareholder value, including the
potential merger of the Company with another entity or the sale of all or substantially all of the
assets and/or liabilities or capital stock of the Company (referred to herein as a “Transaction”);

WHEREAS, the Company believes it is in the best interest of the Company to provide Employee
with an incentive to remain with the Company while the Company explores its alternatives and to be
available to the successor or acquirer of the Company for a period of time after a Transaction; and

WHEREAS, Employee wishes to assist the Company in exploring its alternatives and consummating
a Transaction and to continue to perform Employee’s present responsibilities and support this
transition and overall Company business operations in a manner consistent with Employee’s past
high-level performance.

THEREFORE, in exchange for the foregoing premises and the consideration set forth below, the
Employee and the Company (collectively, the “Parties”) hereby agree as follows:

1. RETENTION BONUS

Employee shall be eligible to receive a retention Bonus of $     (the “Retention Bonus
Amount”), less applicable withholding, upon the following terms:

To be eligible to receive the Retention Bonus Amount, Employee must be employed by ECC, a
subsidiary of ECC, or a successor in interest to ECC or ECC’s subsidiaries’ business (collectively
the “Business”), as of [     ] (the “Retention Bonus Date”). If Employee: (i) terminates
his/her employment with the Business; (ii) refuses to accept employment offered by a successor in
interest to the Company or its business for any reason; or (iii) the Company terminates Employee’s
employment with “Cause”, as defined in Section 3 below, on or before the Retention Bonus Date, the
Retention Bonus Amount shall not be earned, in whole or in part. However, if the Business
terminates Employee’s employment other than for Cause prior to the Retention Bonus Date, Employee
shall be paid the Retention Bonus Amount on the date of such termination. If the Retention Bonus
Amount is earned, it shall be paid on the Retention Bonus Date.

2. TRANSACTION BONUS [INSERT AS APPLICABLE]

Employee shall be eligible to receive a transaction bonus of $     (the “Transaction Bonus
Amount”), less applicable withholding, upon the following terms:

If a Transaction occurs on or before March 31, 2007, and Employee is employed by ECC or one of
its subsidiaries as of the date of the consummation of the Transaction, Employee shall be entitled
to the Transaction Bonus Amount, which shall be payable within 15 business days following the
closing of the Transaction.

3. DEFINITIONS

3.1 Cause. For purposes of this Agreement, “cause” shall mean:

(a) Employee’s conviction of or plea of nolo contender to a felony or any crime involving
moral turpitude;

(b) Employee’s commission of any act of theft, embezzlement or misappropriation against the
Company;

(c) Employee’s failure to substantially perform Employee’s duties hereunder (other than such
failure resulting from Employee’s incapacity due to physical or mental illness), which failure is
not remedied within thirty (30) days after written demand for substantial performance is delivered
by the Company which specifically identifies the manner in which the Company believes that Employee
has not substantially performed Employee’s duties; or

(d) Employee’s material breach of his/her obligations under this Agreement, which breach is
not remedied within thirty (30) days after written notice is delivered by the Company which
specifically identifies the breach that the Company believes has occurred.

(e) Employee has failed to perform Employee’s duties with appropriate diligence, effort and
skill (other than such failure resulting from Employee’s incapacity due to physical or mental
illness) as determined by the Company’s Chief Executive Officer, which failure has not been
remedied within thirty days after written notice specifying the failure was delivered by the Chief
Executive Officer to Employee.

4. EMPLOYMENT STATUS AND EMPLOYMENT AGREEMENTS

If Employee and the Company or any of its subsidiaries have entered into a written employment
agreement, this Agreement shall not modify, amend or supersede the parties’ rights under such
employment agreement. No bonus provided under this Agreement shall be considered in determining
any severance or other payment required by such employment agreement. If Employee does not have a
written employment agreement with the Company providing to the contrary, Employee acknowledges that
Employee remains employed “At-will”, which means that either the Company or Employee may terminate
the employment relationship at any time, with or without cause, and the Company may alter the terms
and conditions of employment at any time, with or without cause.

5. GENERAL PROVISIONS

5.1 Assignment; Binding Effect. Neither the Company nor Employee may assign, delegate
or otherwise transfer this Agreement or any of their respective rights or obligations hereunder
without the prior written consent of the other party. Provided, however, that in the event of a
Transaction involving that portion of the Company or its subsidiaries’ business in which Employee
is employed, the Company shall endeavor to obtain the assumption of this Agreement by the successor
and may assign its rights and obligations under this Agreement to such successor without the
consent of Employee. Any attempt to make an assignment or delegation prohibited by this Agreement
shall be void. This Agreement shall be binding upon and inure to the benefit of any permitted
successors or assigns of the parties and the heirs, executors, administrators and/or personal
representatives of Employee.

5.2 Notices. All notices, requests, demands and other communications that are
required or may be given under this Agreement shall be in writing and shall be deemed to have been
duly given when received if personally delivered; when transmitted if transmitted by telecopy,
electronic or digital transmission method with electronic confirmation of receipt; the day after it
is sent, if sent for next-day delivery to a domestic address by recognized overnight delivery
service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt
requested. In each case notice shall be sent to:

	 	 	 	 	 
	If to the Company:
	 	Encore Credit Corp.

	 
	 	Attn:  General Counsel

	 
	 	1833 Alton Parkway
	 
	 	Irvine, California 92606

	 
	 	Facsimile:  (949) 856-4948

	If to Employee:
	 	 	—	 
	 
	 	Facsimile:  _______________________

Any party may change its address for the purpose of this Section 9.2 by giving the other party
written notice of its new address in the manner set forth above.

5.3 Entire Agreement. This Agreement constitutes the entire agreement of the parties,
and supersedes all prior agreements, with respect to the subject matter hereof. Neither party may
rely upon any prior or concurrent negotiations, discussions, representations, agreements or
promises of any kind whatsoever. This Agreement does not alter or supercede any agreements between
the parties concerning disclosure or use of confidential information, or assignment of intellectual
property rights.

5.4 Amendments; Waivers. This Agreement may be amended or modified, and any of the
terms and covenants may be waived, only by a written instrument executed by the parties hereto, or,
in the case of a waiver, by the party waiving compliance. In the case of the Company, only a
written instrument signed by the Chief Executive Officer of the Company may authorize an amendment,
modification or waiver. Any waiver by any party in any one or more instances of any term or
covenant contained in this Agreement shall neither be deemed to be nor construed as a further or
continuing waiver of any such term or covenant of this Agreement.

5.5 Provisions Severable. In case any one or more provisions of this Agreement shall
be invalid, illegal or unenforceable, in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not, in any way, be affected or impaired thereby.
        .

5.6 Attorneys’ Fees. If any legal action, arbitration or other proceeding, is brought
for the enforcement of this Agreement, the prevailing party shall be entitled to payment of any
attorneys’ fees and other costs incurred by him, her or it in that action or proceeding.

5.7 Governing Law. This Agreement shall be construed, performed and enforced in
accordance with, and governed by the laws of the State of California without giving effect to the
principles of conflict of laws thereof.

5.8 Headings. The headings of sections of this Agreement are for the convenience of
the parties and shall have no legal effect.

5.9 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall constitute the same instrument.

5.10 Confidentiality. By signing this Agreement, Employee agrees to keep the
existence, as well as the specific terms of this Agreement confidential, and not to disclose the
same to anyone other than the adult members of Employee’s immediate family who understand and agree
to keep the terms confidential and to Employee’s legal and tax advisors.

[Signature Page Follows]

1

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date
first written above.

	 
	THE COMPANY:

	 

	Encore Credit Corp., a
California corporation
By: _______________________
Its: _______________________
EMPLOYEE:

	 

	__________________________________
[Print Name]
_____________________
Date
_____________________
Date

2EX-10.4

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement (“Amendment”) is made and entered into as of
October 10, 2006 (the “Effective Date”) by and between ECC Capital Corporation (the “Company”) and
Shahid S. Asghar (“Executive”).

WHEREAS, Executive is currently employed by the Company pursuant to a written employment
agreement dated as February 14, 2005 (the “Employment Agreement”);

WHEREAS, Executive and the Company wish to modify the terms of the Employment Agreement;

THEREFORE, the parties agree as follows:

1. Sections 3.1, 3.2 and 3.4 of the Employment Agreement shall be modified so that they read
as follows from April 1, 2006 through March 31, 2007.

3.1. Base Compensation. Executive shall not receive a base
salary through March 31, 2007.

3.2. Bonus Compensation. Executive shall not receive bonus
compensation through March 31, 2007.

3.4. Automobile Allowance. Executive shall not receive an
automobile allowance through March 31, 2007.

2. Section 4.4 of the Employment Agreement is hereby amended by inserting the following
sentence as the last sentence thereto:

Executive’s vacation pay shall be calculated based upon an annual salary of
$450,000, which was Executive’s Base Compensation for all purposes prior to this
Amendment.

3. Section 5.7(a) of the Employment Agreement is hereby amended by inserting the following
sentence as the lead-in sentence thereto:

“Solely for purposes of determining the Severance Amount under this Section
5.7(a), Base Compensation shall mean $450,000, which was Executive’s Base
Compensation for all purposes prior to this Amendment.”

4. Executive agrees that this Amendment to Employment Agreement shall not: (a) be deemed a
breach of the Employment Agreement, including Sections 3.1, 3.2 and 3.3 thereof; (b) constitute
Good Reason within the meaning of Section 5.6 of the Employment Agreement for Executive to
terminate his employment; and (c) entitle Executive to the Severance Payments, Vesting, and/or
Severance Benefits under the Employment Agreement.

5. Any capitalized terms in this Amendment to Employment Agreement that are not defined herein
shall have the same meaning as set forth in the Employment Agreement.

6. Except as expressly set forth above, this Amendment to Employment Agreement shall not
amend, supersede or otherwise modify any provision of the Employment Agreement.

ECC CAPITAL CORPORATION, a Maryland corporation

By:     

Its:     

Date:     

EXECUTIVE

     

Shahid S. Asghar

Date:

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