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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 28, 1998
IMPAC MORTGAGE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Maryland
(State or Other Jurisdiction of Incorporation)
0-19861 33-0675505
(Commission File Number) (I.R.S. Employer Identification No.)
20371 Irvine Avenue
Santa Ana Heights, California 92707
(Address of Principal Executive Offices, Including Zip Code)
(714) 556-0122
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
Amendment to Employment Agreements
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Effective as of January 1998 and in lieu of accepting 25% of the fee owed in
connection with the termination of the Management Agreement between the Company
and Imperial Credit Advisors, Inc., Messrs Tomkinson, Ashmore and Johnson and
Ms. Glass-Schannault amended each of their employment agreements so that if the
Company's annualized Return on Equity (as defined therein) during any fiscal
quarter is in excess of the Ten Year U.S. Treasury Rate plus 200 basis points,
each officer will receive an additional bonus of 4.0875%, 4.25%, 3.0% and
1.1625%, respectively, of such excess (the "Incentive Compensation"). 18% of
each officer's Incentive Compensation will be deposited in a deferred
compensation plan, one-third of which will be released one year from the quarter
in which it is deposited plus the applicable accrued interest on such released
amount at a rate of the Ten Year Average Yield (as defined therein) plus 200
basis points. 80% of the remainder of the Incentive Compensation will be paid
to each officer in cash and 20% will be used by each officer to purchase shares
of the Company's Common Stock pursuant to its Dividend Reinvestment and Stock
Purchase Plan.
ITEM 7. EXHIBITS
(C) EXHIBITS
10.1(a) Form of Amendment No. 1 to Amended and Restated Employment
Agreements, effective January 1, 1998, with Impac Funding
Corporation
10.1(b) List of Officers and terms relating to Form of Amendment No. 1
to Amended and Restated Employment Agreement filed as exhibit
10.1(a)
1
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IMPAC MORTGAGE HOLDINGS, INC.
By: \s\ Richard J. Johnson
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Richard J. Johnson
Chief Financial Officer
Date: June 2, 1998
2
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EXHIBIT 10.1(a)
AMENDMENT NO. 1
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO THE AMENDED AND RESTATED EMPLOYMENT AGREEMENT
is made effective as of the 1st day of January, 1998, by and between Impac
Funding Corporation ("Employer") and ________________________________, an
individual ("Employee"), with reference to the following facts:
RECITALS
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WHEREAS, Employer and Employee entered into that certain Amended and
Restated Employment Agreement (the "Employment Agreement") dated as of August 8,
1997;
WHEREAS, pursuant to the terms of that certain management agreement,
dated as of January 31, 1997 (the "Management Agreement"), between Impac
Mortgage Holdings, Inc. ("IMH") and Imperial Credit Advisors, Inc. ("ICAI"), IMH
paid 25% of the per annum base management fee and 25% of the incentive
compensation to participants in IMH's executive bonus pool in amounts determined
in the sole discretion of IMH's Chief Executive Officer; such payment was made
in lieu of payment of a like amount to ICAI under the Management Agreement;
WHEREAS, the Management Agreement was terminated pursuant to the terms
and conditions of the Termination Agreement, effective December 19, 1997, among
Employer, IMH, ICAI, Imperial Credit Industries, Inc., Joseph R. Tomkinson,
William S. Ashmore, and Richard J. Johnson;
WHEREAS, in lieu of accepting 25% of the fee owed in connection with
the termination of the Management Agreement, it has been agreed that such amount
shall be paid to the executive officers of IMH over the remaining term and under
the terms of their respective Employment Agreements;
WHEREAS, Employee and Employer desire to amend the Employment
Agreement accordingly;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, and for other good and valuable consideration,
it is hereby agreed by and between the parties hereto as follows:
Terms not defined herein shall have the respective meanings as set forth in the
Employment Agreement.
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1. TERM.
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Section 2.1 shall be deleted in its entirety and replaced with the
following:
2.1 Unless sooner terminated pursuant to Paragraph 2.2 hereof, Employee's
employment shall continue until December 31, 2002 ("Employment Date")
unless extended by the mutual written agreement of Employer and Employee.
2. BONUS SCHEDULE (ATTACHMENT B).
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The Bonus Schedule to the Employment Agreement, attached thereto as
Schedule B, shall be amended by adding the following:
ITEM 4: Incentive Compensation
1. Definitions
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"Average Net Worth" for any period means the arithmetic average of the sum
of the gross proceeds from any sale of IMH's equity securities, before
deducting any underwriting discounts and commissions and other expenses
(without taking into account any losses incurred in prior periods) computed
by taking the daily average of such values during such period.
"Common Stock" means the common stock, $.01 par value per share, of IMH.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Incentive Compensation" has the meaning set forth below.
"Net Income" means, at any date of determination, the net income of IMH
determined in accordance with current tax law before the total Incentive
Compensation paid to employees of Employer pursuant to their respective
employment agreements, the deduction for dividends paid, before any
amortization of the Termination fee paid Imperial Credit Advisors, Inc. and
any net operating loss deductions arising from losses in prior periods.
"Return on Equity" means return calculated for any quarter by dividing
IMH's Net Income for such quarter by IMH's Average Net Worth for such
quarter.
"Ten Year Average Yield" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of 10 years).
"Ten Year U.S. Treasury Rate" for a quarterly period shall mean the
arithmetic average of the weekly per annum Ten Year Average Yields
published by the Federal Reserve Board during such quarter. In the event
that the Federal Reserve Board does not publish a weekly per annum Ten Year
Average Yield during any week in a quarter, then the Ten Year U.S. Treasury
Rate for such week shall be the weekly per annum Ten Year Average Yields
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published by any Federal Reserve Bank or by any U.S. Government department
or agency selected by Employer for such week. In the event that Employer
determines in good faith that for any reason Employer cannot determine the
Ten Year U.S. Treasury Rate for any quarter as provided above, then the Ten
Year U.S. Treasury Rate for such quarter shall be the arithmetic average of
the per annum average yields to maturity based upon the daily closing bids
during such quarter for each of the issues of actively traded marketable
U.S. Treasury fixed interest rate securities (other than securities which
can, at the option of the holder, be surrendered at face value in payment
of any federal estate tax) with a final maturity date not less than eight
nor more than twelve years from the date of each such quotation, as chosen
and for each business day (or less frequently if daily quotations shall not
be generally available) in each such quarterly period in New York City to
IMH by at least three recognized dealers in U.S. Government securities
selected by Employer.
2. Incentive Compensation
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a. If IMH's annualized Return on Equity during any fiscal quarter
(computed by multiplying the Return on Equity for such quarter by
four) is in excess of the Ten Year U.S. Treasury Rate plus 200 basis
points, Employer shall pay Employee an amount equal to ____% of such
excess (the "Incentive Compensation"). The Incentive Compensation
earned for such quarter shall be paid to Employee in cash or paid
through a deferred compensation program as described below within 30
days from the end of the applicable quarter or as soon as practicable.
b. 18% of the Incentive Compensation shall be held back by Employer and
deposited into a deferred Compensation Plan with the terms described
below (the "Deferred Cash Payment"), which formal documentation, if
required, shall be prepared by Employer as soon as practicable.
The Deferred Cash Payment shall be released over a three year period
with one-third of the cash released each year commencing one year from
the quarter that the Deferred Cash Payment is held back. The Deferred
Cash Payment shall earn a rate of the Ten Year Average Yield plus 200
basis points on a simple interest method.
Release of a Deferred Cash Payment, as described above, shall consist
of the amount of cash released and the applicable interest earned on
all Deferred Cash Payment Balances. Upon Employee's death or
disability, as discussed in Section 2.2(g) of the Employment
Agreement, or when Employee reaches the age of 55, all amounts of
Deferred Cash Compensation, and any interest earned thereon, shall be
released by Employer to Employee.
The product of the Incentive Compensation less the Deferred Cash
Payment is hereafter the "Remaining Incentive Compensation."
c. Employer shall treat the Remaining Incentive Compensation similar to
the salary paid to Employee under the Employment Agreement such that
the Incentive Compensation will be subject to Federal, state and other
deductions and withholdings as typically deducted and withheld from
Employee's Salary. The net amount after
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such deductions and withholdings are and is hereafter the "Net
Incentive Compensation." Each of Employer and Employee agree that (i)
80% of the Net Incentive Compensation shall be paid by Employer in
cash and, (ii) 20% of the Net Incentive Compensation shall be used by
Employee to purchase shares of Common Stock of IMH pursuant to IMH's
Dividend Reinvestment and Stock Purchase Plan (the "DRP"), as
described below.
d. Dividend Reinvestment and Stock Purchase Plan. Employee agrees that
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the aforementioned 20% of the Net Incentive Compensation shall be used
by Employee to purchase shares of Common Stock under IMH's DRP; it
being understood that the stock shall be purchased on the first
Investment Date (as defined in the DRP) following the payment of the
Incentive Compensation; provided, however that if in the opinion of
counsel to the Company the purchase of shares by Employee at such date
would be potentially violative of federal or state securities laws,
then the purchase shall be deferred until the following Investment
Date in which it would not be potentially violative. Employee may
sell the shares of Common Stock issued at any time subject to the
requirements of Section 16 of the Exchange Act and other applicable
federal and state securities laws. The purchase price for the shares
of Common Stock shall be as determined by the terms of the DRP. The
Company shall take reasonable actions in compliance with applicable
laws, rules and regulations to have reserved pursuant to the DRP a
sufficient number of shares of Common Stock to satisfy the foregoing
obligations.
3. MISCELLANEOUS
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Sections 7, 8, 9, 10, 11, 12,13, 14, and 15 of the Employment Agreement are
incorporated herein by reference.
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IN WITNESS WHEREOF, this Amendment No. 1 is executed as of the day and year
first above written.
"EMPLOYER"
IMPAC FUNDING CORPORATION,
a California corporation
By: _______________________________
Name:
Title:
"EMPLOYEE"
___________________________________
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EXHIBIT 10.1(b)
LIST OF OFFICERS AND TERMS FOR
AMENDMENT NO. 1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
<TABLE>
<CAPTION>
Officer Incentive Compensation
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<S> <C>
Joseph R. Tomkinson 4.0875%
William S. Ashmore 4.25%
Richard J. Johnson 3.0%
Mary C. Glass-Schannault 1.1625%
</TABLE>
