EXHIBIT 10.40
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of October 1,
1997 by and between Pan American Group, Inc. ("PAGI"), Pan American Bank, FSB, a
federally chartered savings bank (the "Bank"; the Bank and PAGI are individually
and collectively referred to as "Employer") and Xxxxxxxxx Xxxx ("Employee").
WITNESSETH:
WHEREAS, Employer desires to obtain the services of Employee and Employee
desires to render services to Employer;
WHEREAS, the Boards of Directors of Employer (individually and collectively
referred to as the "Board") has determined that it is in Employer's best
interests and that of its stockholders to secure the services of Employee, to
secure certain additional commitments from Employee and to provide Employee
certain additional benefits; and
WHEREAS, Employer and Employee desire to set forth in this Agreement all
the terms and conditions of Employee's employment with Employer.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. Term. Employer agrees to employ Employee and Employee agrees to serve
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Employer in accordance with the terms of this Agreement, for (a) a
term of approximately three (3) years and two (2) months commencing on
the date of this Agreement and ending December 31, 2000 (the "Initial
Term"), and (b) at the option of Employer, which Employer may exercise
by giving written notice to Employee on or before December 31, 1999,
an additional one year period ending December 31, 2001 (the "Extended
Term") The Initial Term and the Extended Term are hereinafter referred
to as the "Term." Notwithstanding the foregoing, the Term may be
terminated before the expiration of the Initial Term or the Extended
Term in accordance with the provisions which follow.
2. Services and Exclusivity of Services.
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(a) Employee Time. So long as this Agreement shall continue in
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effect, Employee shall devote his energy and ability to the
business, affairs and interests of Employer and its subsidiaries
and matters related thereto, as reasonably necessary to perform
his services hereunder, and shall use Employee's best efforts and
abilities to promote Employer's interests, and shall perform the
services contemplated by this
Agreement in accordance with policies established by and under
the direction of the Board.
(b) Service to Affiliates; Promoting Business. Employee agrees to
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serve without additional remuneration in such executive
capacities or as a Board member for one or more direct or
indirect subsidiaries of Employer as the Board may from time to
time request, subject to appropriate authorization by the
subsidiary or subsidiaries involved and any limitations under
applicable law. Employee agrees to faithfully and diligently
promote the business affairs and interests of Employer and its
subsidiaries.
(c) Exclusivity of Services. Employee may make and manage personal
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business investments of his choice and serve in any capacity with
Bastion Capital Corporation or any of its affiliates, or any
similar or analogous investment banking or merchant banking
firms, or any civic, educational or charitable organization
without seeking or obtaining approval by the Board, provided that
Employee shall not engage in any such activities and services
which substantially interfere or conflict with the performance of
duties hereunder, or which constitute a line of business related
to that of the Bank without the prior approval of the Board,
which the Board shall not unreasonably withhold. An investment
that exceeds 5% of the equity securities or capitalization of a
competitor, supplier or customer of Employer shall be deemed to
constitute such a conflict.
(d) No Conflicts. Employee represents to Employer that Employee has
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no other outstanding commitments inconsistent with any of the
terms of this Agreement or the services to be rendered hereunder.
3. Specific Position: Duties and Responsibilities.
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(a) Positions, Duties and Authority. Employer and Employee agree
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that, subject to the provisions of this Agreement, the Bank will
employ Employee and Employee will serve the Bank and/or PAGI as
its Chairman of the Board. Employee agrees to observe and comply
with the rules and regulations of the Bank as adopted by the
Board of Directors of the Bank (the "Bank Board") respecting the
performance of Employee's duties to the Bank, and with the rules
and regulations of PAGI as adopted by the Board of Directors of
PAGI (the "PAGI Board").
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Employee also agrees to carry out and perform orders, directions
and policies of the Bank Board and the PAGI Board as they may
from time to time direct. Employee shall have such corporate
power and authority as shall reasonably be required to enable the
discharge of duties commensurate with the offices he holds. It is
anticipated that Employee's services to Employer shall be
particularly focused on strategic planning and implementation of
the expansion of Employer's existing businesses, the exploration
of, and entry into, new lines of business, and the obtaining of
favorable financing for new and existing businesses of the
Employer. It is anticipated that approximately 66-2/3% of
Employee's time will be occupied with his services to the Bank,
and that approximately 33-1/3% of his time will be occupied with
his services to PAGI. Any bonus paid pursuant to Section 4(b)
will be fairly allocated between the Bank and PAGI based on the
respective services Employee performs for them.
(b) Supervision of Employee. For the term of this Agreement,
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Employee shall report (i) with respect to his duties to the Bank,
to the Bank Board, and (ii) with respect to his duties to PAGI,
to the PAGI Board.
4. Compensation.
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(a) Base Compensation. During the term of this Agreement, Employer
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agrees to pay Employee a base salary at the rate of One Hundred
Fifty Thousand Dollars ($150,000) per year, payable in equal
installments consistent with Employer's normal payroll practices
applicable to salaried employees (the "Base Salary").
(b) Bonuses. At least annually, the Board shall meet with Employee
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to review with him his performance of services hereunder and the
performance and prospects of the business of Employer. Based on
such review, and on such other factors as the Board may deem to
be relevant, which may include pre-tax net income, return on
shareholders' equity and other similar factors, Employer shall
pay Employee a bonus of up to 100% of Employee's Base Salary.
(c) Additional Benefits. During the Term hereof, Employee shall
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participate in any bonus, pension, profit, incentive
compensation, medical, life insurance, disability or similar
plan, and shall receive all perquisites,
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available to executives of Employer at or below Employee's level
of responsibility (the "Compensation Plans"), except to the
extent Employee does not meet the eligibility requirements
generally applicable to participants in such Compensation Plan.
Employee shall also be entitled to receive the benefits specified
on Schedule 4(c) to this Agreement (the "Additional Benefits").
Employee shall not receive duplicative benefits if a Compensation
Plan is listed on Schedule 4(c) as an Additional Benefit.
Notwithstanding anything else contained in this Agreement to the
contrary, (i) all rights of Employer, PAGI and Employee with
respect to stock options granted to Employee pursuant to any
Employer or PAGI stock option plan shall be governed solely by
such plan, including all rights as to the vesting of options
thereunder, and (ii) this Agreement shall not be deemed to amend
or otherwise affect the provisions of any Compensation Plan.
(d) Vacation. Employee shall be entitled to twenty (20) days of paid
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vacation each twelve-month period, which shall accrue on a pro
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rata basis from the date of this employment agreement; provided,
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however, that vacation days shall cease to accrue whenever thirty
(30) vacation days have accrued, and the accrual of vacation days
shall resume only when Employee has used enough vacations days so
that additional vacation days can accrue without exceeding the
limit of thirty (30) accrued vacation days.
(e) Modification of Benefits. Except with respect to the Additional
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Benefits, Employer reserves the right at all times to modify,
suspend or discontinue any and all Compensation Plans and any
other benefits, plans, practices, policies and programs (whether
before or after termination of employment) without notice to or
recourse by Employee so long as such action is taken with respect
to Employer' employees generally and does not single out
Employee.
5. Termination.
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(a) For Cause.
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i) Employer may terminate this Agreement and Employee's
employment hereunder at any time for cause without further
obligation or liability to Employee, including without
limitation, any obligation to pay Base Salary and Additional
Benefits
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following such termination, effective upon delivery of
notice of such termination to Employee or at such other
future time as may be specified in such notice. Employer and
Employee agree that the term "for cause" shall mean the
following: Employee's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final
cease and desist order, or material breach of any provision
of this Agreement or any other grounds specified in Section
563.39(b)(1) of the Office of Thrift Supervision (the "OTS")
Rules and Regulations (and any subsequent regulations of OTS
and the Federal Deposit Insurance Corporation (the "FDIC")
governing employment agreements).
ii) If Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Employer's affairs by
reason of a notice served under Section 8(e)(3) or (g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. Section 1818
(e)(3) and (g)(1)), all obligations of Employer under this
Agreement shall be suspended as of the date of service of
the notice, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, Employer may in its
discretion (i) pay Employee all or part of the compensation
withheld while this Agreement was suspended, and (ii)
reinstate (in whole or in part) any of its obligations which
were suspended.
iii) If Employee is removed and/or permanently prohibited from
participating in the conduct of Employer's affairs by reason
of an order issued under Section 8(e)(4) or (g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. Section 1818 (e)(4)
or (g)(1)), all obligations of Employer under this Agreement
shall terminate as of the effective date of that order, and
Employee shall receive the amount set forth in Section
5(e)(ii) of this Agreement.
iv) If Employer is in default (as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act), all obligations under
this
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Agreement shall terminate as of the date of default, and
Employee shall receive the amount set forth in Section
5(e)(ii) of this Agreement.
v) All obligations of Employer under this Agreement shall be
terminated (except to the extend determined that
continuation of this Agreement is necessary for the
continued operation of Employer) by the OTS (i) at the time
the FDIC or the Corporation enters into an agreement to
provide assistance to or on behalf of Employer under the
authority contained in Section 13(c) of the Federal Deposit
Insurance Act, or (ii) at the time the OTS approved a
supervisory merger to resolve problems related to the
operation of Employer, or when Employer are determined by
the OTS to be in an unsafe or unsound condition; provided,
however, that Employee shall receive the amount set forth in
Section 5(e)(ii) of this Agreement.
(b) Without Cause. Notwithstanding any other provision of this
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Section 5, Employee hereby agrees that Employer may terminate
Employee's employment hereunder at will for any reason without
any liability or obligation to Employee whatsoever, except for
termination payment expressly provided for in this Agreement, at
any time upon written notice of termination to Employee, such
termination to become effective upon such future date as may be
specified in such notice of termination. Such termination may be
only by a vote of a majority of the Board and the PAGI Board. As
consideration for Employee's agreement to this subparagraph (b),
Employer agrees that in the event Employer elects to terminate
the employment of Employee pursuant to the provisions of this
subparagraph (b) prior to the completion of the Term, Employer
shall provide a formal written notice of such termination and
Employee shall be entitled to a termination payment equal to (i)
a lump sum payment of the Base Salary equal to (A) if the
termination of employment occurs before December 31, 1999, the
Base Salary Employee would have received from the date of such
termination through December 31, 1999, (B) if the termination of
employment occurs on or after January 1, 2000 but before December
31, 2000, the Base Salary Employee would have received from the
date of such termination through December 31, 2000, or (C) if the
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termination occurs during the Extended Term, the Base Salary
Employee would have received during the balance of the Extended
Term; provided, however, that in no event shall Employee receive
a lump sum payment of Base Salary for a period of less than six
(6) months; (ii) a lump sum payment of any accrued vacation pay;
(iii) any and all Additional Benefits accrued through the date of
termination, including any compensation previously deferred by
Employee (together with any accrued interest and earnings
thereon); and (iv) a lump sum payment of the "Prorated Incentive
Compensation" (as defined below). For purposes of this Agreement,
the term "Prorated Incentive Compensation" means, for Employer's
fiscal year in which Employee's termination of employment occurs
(the "Termination Year"), the incentive compensation received by
Employee in Employer's fiscal year immediately before the
Termination Year (the "Prior Year"), (I) multiplied by a
fraction, the numerator of which is the number of days from the
beginning of the Termination Year to the date of Employee's
termination of employment, and the denominator of which is three
hundred sixty five (365), and (II) except for purposes of Section
5(d), decreased in an amount which, as determined by the Board,
based on Employer's customary and consistent calculation of
earnings, is proportional to any decrease in earnings of Employer
from the Prior Year to the Termination Year.
(c) Disability. In the event Employee shall fail, because of
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illness, incapacity or injury which is determined, within the
applicable definitions under the Employer's group disability
insurance, to be total and permanent by a physician selected by
Employer or its insurers and acceptable to Employee or Employee's
legal representative (such agreement as to acceptability not to
be withheld unreasonably) to render for three consecutive months
or for shorter periods aggregating 75 or more business days in
any twelve month period, the services contemplated by this
Agreement, Employee's employment hereunder may be terminated by
written notice of termination from Employer to Employee.
Thereafter, Employer shall continue to pay Base Salary to
Employee at a rate and time and in a manner equal to 100% of the
Base Salary payable immediately prior to the termination, until
the earliest to occur of the following: (i) Employee dies, (ii)
Employee recovers from
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such disability and returns to full-time service, (iii) six (6)
months after the date of such notice, or (iv) the waiting period,
if any, under Employer's long term disability insurance or other
disability plan purchased for Employee is satisfied and payments
by the insurance company to Employee commence. Thereafter, no
further salary or benefits shall be paid.
(d) Death. If Employee's employment is terminated by reason of
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Employee's death, this Agreement shall terminate without further
obligations to Employee (or Employee's heirs or legal
representatives) under this Agreement, other than for (i) payment
of the sum of (A) Employee's Base Salary through the end of the
month during which death occurs and for 30 days thereafter to the
extent not theretofore paid, (B) any compensation previously
deferred by Employee (together with any accrued interest or
earnings thereon) plus the Prorated Incentive Compensation in an
amount determined under Section 5(b), (C) any accrued vacation
pay, in each case to the extend not theretofore paid (the sum of
the amounts described in clauses (A), (B) and (C) shall be
hereinafter referred to as the "Accrued Obligations"), which
shall be paid to Employee or Employee's estate or beneficiary, as
applicable in a lump sum in cash within thirty (30) days after
the date of termination or any earlier time required by
applicable law; and (ii) payment to Employee or Employee's estate
or beneficiary, as applicable, any amount due pursuant to the
terms of any applicable Compensation Plan.
(e) Termination by Employee.
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i) Employee may terminate his employment for a "Reduction in
Authority" (as defined below) at any time two (2) months
after a notice of intent to terminate pursuant to this
Section 5(e) has been delivered to the Board, provided such
condition continues for the duration of a one month period
after written notice to the Board. Upon such termination,
Employee shall receive the payments and benefits set forth
in subparagraph (b) above.
The term "Reduction in Authority" shall mean the occurrence
of one of the following events, other than as a result of
grounds for termination of employment for cause under
Section 5(a) or for
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disability under Section 5(c): (A) the continuing
assignments to Employee by the Board of duties materially
and adversely inconsistent with the duties specified to be
performed by Employee under this Agreement or with
Employee's position as Chairman of the Board of the Bank
and/or Chairman of the Board of PAGI; (B) a material,
adverse and continuing change in the nature of Employee's
responsibilities; (C) the requirement that Employee must
regularly report to persons other than the Board and the
PAGI Board; or (D) the removal of Employee from, or failure
to re-elect Employee as, the Chairman of the Bank Board or
the PAGI Board.
ii) Other than as set forth in Section 5(e)(i), Employee may
terminate his employment hereunder at any time upon not less
than thirty (30) days written notice to Employer. In such
event, Employee shall be entitled to all Accrued Obligations
under this Agreement, except payment of the Prorated
Incentive Bonus, through the effective date of such
termination.
(f) No Limitation. Employer's exercise of its right to terminate
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shall be without prejudice to any other right or remedy to which
it or any of its affiliates may be entitled at law or in equity
to enforce its rights under this Agreement.
(g) Exclusive Remedy. Employee agrees that the payments expressly
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provided and contemplated by this Agreement shall constitute the
sole and exclusive obligation of Employer in respect to
Employee's employment with and relationship to Employer and that
the payment thereof shall be the sole and exclusive remedy for
any termination of Employee's employment. Employee covenants not
to assert or pursue any other remedies, at law or in equity, with
respect to any termination of employment.
(h) Expiration of Term. No payment shall be due to Employee under
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this Agreement by reason of the expiration of the Initial Term
and the failure by Employer to exercise its option for the
Extended Term.
(i) No Mitigation. In the event this Agreement is terminated for any
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reason, Employee shall not be obligated to mitigate any damages
Employee
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might otherwise suffer. Employer's obligation to make payments to
Employee pursuant to this Agreement shall not be affected by any
other employers or sources or any setoff, counterclaim,
recoupment, defense or other right which Employer or its
subsidiaries may have against Employee.
6. Change in Control. Employee shall be entitled to receive the amounts
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set forth in Section 5(b) of this Agreement if Employer terminates his
employment without cause, or he terminates his employment with
Employer for a Reduction in Authority, within the "Applicable Period"
(as defined below) after a "Change in Control" (as defined below). A
"Change in Control" means a merger, consolidation, transfer of all or
substantially all in the assets of the Bank and PAGI, or any other
corporate reorganization or transaction or series of transactions,
which results in any person, group of related persons, or any other
organization or entity acquiring 50% or more of the outstanding voting
securities or partnership interests of PAGI and the Bank. The
"Applicable Period" begins on the date of a Change in Control and ends
on the later of the expiration of the Initial Term or Extended Term
(as the case may be) in which the Change in Control occurs, or twelve
(12) months after the Change in Control occurs.
7. Business Expenses. During the term of this Agreement, to the extent
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that such expenditures satisfy the criteria under the Internal Revenue
Code for deductibility by Employer (whether or not fully deductible by
Employer) for federal income tax purposes as ordinary and necessary
business expenses, Employer shall reimburse Employee promptly for
reasonable business expenditures, including travel, entertainment,
parking, business meetings, and professional dues but not the costs of
(or dues associated with) maintaining club memberships, made and
substantiated in accordance with policies, practices and procedures
established from time to time by Employer generally and incurred in
pursuit and furtherance of Employer's business and good will.
8. Indemnification.
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(a) Indemnification by Employer. Pursuant to the terms of Section
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545.121 of the OTS Rules and Regulations ("Section 545.121").
Employer agrees to indemnify, defend and hold harmless, Employee,
from and against (a) the amount of any judgment for which
Employee becomes liable as a result of any Action (as defined in
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Section 545.121) brought against Employee in his capacity as an
officer or director of Employer, and (b) if he attains a
favorable judgment in such Action, reasonable costs and expenses,
including reasonable attorneys' fees, actually paid or incurred
by Employee in defending or settling such Action, or in enforcing
his rights under Section 545.121; provided however, that Employer
shall have no obligation to indemnify Employee hereunder unless
(a) Final Judgment (as defined in Section 545.121) on the merits
is in Employee's favor; or (b) in the case of Settlement (as
defined in Section 545.121), Final Judgment against him, or Final
Judgment in his favor other than on the merits, the disinterested
directors of Employer determine that Employee was acting in good
faith within the scope of his employment or authority as he could
reasonably have perceived it under the circumstances and for a
purpose he could reasonably have believed under the circumstances
was in the best interests of Employer. If the disinterested
directors of Employer reasonably conclude that, in connection
with an Action, Employee may be entitled to indemnification, the
directors shall authorize Employer to advance to Employee
reasonable costs and expenses, including reasonable attorneys'
fees, arising from the defense or settlement of such Action,
subject to an undertaking by Employee to repay such amounts in
the event of a final nonappealable determination that Employee is
not entitled to indemnification, and the provisions of this
Section 8.
(b) Notification of Claims. After receipt of notice of commencement
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of any Action giving rise to a right of indemnification
hereunder, Employee shall promptly notify Employer in writing of
such Action and, when known, the facts constituting the basis for
such Action (in reasonable detail). Failure by Employee to so
notify Employer shall not relieve Employer of any liability
hereunder unless such failure materially prejudices Employer.
(c) Indemnification Procedure. Employer shall be entitled, if it so
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elects, to take control of the defense and investigation with
respect to an Action and to employ and engage attorneys of its
own choice to handle and defend the same, upon written notice to
Employee of such election which notice acknowledges Employer's
obligation to provide indemnification
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hereunder. Employer shall not settle any Action that is the
subject of indemnification without the written consent of
Employee, which consent shall not be unreasonably withheld;
provided, however, that Employer may settle an Action without
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Employee's consent if such Settlement (i) makes no admission or
acknowledgment of liability or culpability with respect to
Employee, (ii) includes a complete release of Employee, and (iii)
does not require Employee to make any payment or forego,
relinquish or take any action or right. Employee shall cooperate
in all reasonable respects with Employer and its attorneys in the
investigation, trial and defense of any Action (including the
filing in Employee's name of appropriate cross claims and
counterclaims). Employee may, at his own cost, participate in any
investigation, trial and defense of such Action controlled by
Employer. If, after receipt of a claim notice pursuant to Section
8(b), Employer does not undertake to defend any such Action,
Employee may, but shall have no obligation to, contest such
Action and Employer shall be bound by the result obtained with
respect thereto by Employee (including, but not limited to, any
Settlement thereof); provided, however, that Employee shall not
settle such Action without the written consent of Employer, which
Employer shall not unreasonably withhold. Employer may, at its
own cost, participate in any investigation, trial and defense of
any Action controlled by Employee. If Employee reasonably
believes that there may be a conflict of interest between himself
and Employer in the conduct of the defense of any Action,
Employee shall have the right, at the expense of Employer, to
select his own counsel and assume the defense of the Action;
provided, however, that Employee may not settle such Action
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without the consent of Employer which consent shall not be
unreasonably withheld; provided, further, that Employee may
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settle an Action without Employer's consent if such Settlement
(i) makes no admission or acknowledgment of liability or
culpability, (ii) includes a complete release of Employer and
(iii) does not require Employer to make any payment or forego,
relinquish or take any action or right. At any time after the
commencement of defense of any Action, Employer may request
Employee to agree in writing to the abandonment of such contest
or to the payment or compromise by Employer of such claim,
whereupon such action shall be taken unless Employee determines
that the contest should be
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continued and so notifies Employer in writing within 15 days of
such request from Employer. If Employee determines that the
contest should be continued, Employer shall be liable hereunder
only to the extent of the lesser of (i) the amount which the
other party(ies) to the contested claim have agreed to accept in
payment or compromise as of the time Employer made its request
therefor to Employee less any additional expenses incurred by
Employer subsequent to such event or (ii) such amount for which
Employer would otherwise be liable with respect to such Action by
reason of the provisions hereof.
9. Miscellaneous.
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(a) Succession; Survival. This Agreement shall inure to the benefit
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of and shall be binding upon Employer, its successors and
assigns, but without the prior written consent of Employee, this
Agreement may not be assigned other than in connection with a
merger or sale of substantially of all the assets of Employer or
a similar transaction in which the successor or assignee assumes
(whether by operation of law or express assumption) all the
obligations of Employer hereunder. The obligations and duties of
Employee hereunder are personal and otherwise not assignable.
(b) Notices. Any notice or other communication provided for in this
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Agreement shall be in writing and sent if to Employer to its
office at:
Pan American Bank, FSB
0000 Xxxxx Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxx X. Grill, President
or at such other address as Employer may from time to time in writing
designate, and if to Employee to such address as Employee may from
time to time in writing designate (or Employee's business address of
record in the absence of such designation). Each such notice or other
communication shall be effective (i) if given by mail, three days
after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (ii) if given by any other
means, when actually delivered at such address.
(c) Entire Agreement; Amendments. This Agreement
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contains the entire agreement of the parties relating to the
subject matter hereof and it supersedes any prior agreements,
undertakings, commitments and practices relating to Employee's
employment by Employer or its affiliates. No amendment or
modification of the terms of this Agreement shall be valid unless
made in writing and signed by Employee and, on behalf of
Employer, by its President.
(d) Waiver. No failure on the part of any party to exercise or delay
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in exercising any right hereunder shall be deemed a waiver
thereof or of any other right, nor shall any single or partial
exercise preclude any further or other exercise of such right or
any other right.
(e) Choice of Law. This Agreement, the legal relations between the
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parties and any action, whether contractual or non-contractual,
instituted by any party with respect to matters arising under or
growing out of or in connection with or in respect of this
Agreement, the relationship of the parties or the subject matter
hereof shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts made and
performed in such State and without regard to conflicts of law
doctrines, to the extent permitted by law and applicable
regulations.
(f) Arbitration. Any dispute, controversy or claim arising out of or
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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 and Mediation Services, Inc.
("JAMS"). Employer and Employee may agree on a retired judge
from the JAMS panel. If they 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 Employee agree that arbitration must be
initiated within two years after the claimed 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
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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. Exhibit A sets forth the
rights of Employer and Employee if the dispute is arbitrated and
the rules and procedures to be followed at the arbitration
hearing; provided, however, that the party or parties prevailing
in such proceeding will be entitled to the reasonable attorneys'
fees and expenses of counsel and costs incurred by reason of such
arbitration.
(g) Confidentiality; Proprietary Information. Employee agrees to not
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make use of, divulge or otherwise disclose, directly or
indirectly confidential or proprietary information concerning the
business (including but not limited to its products, employees,
services, practices or policies) of Employer or any of its
affiliates of which Employee may learn or be aware as a result of
Employee's employment during the Term or prior thereto as
stockholder, employee, officer or director of or consultant to
Employer or any of its affiliates, except to the extent such use
or disclosure is (i) required by applicable law, (ii) lawfully
obtainable from other sources, (iii) generally available to the
public, or (iv) authorized in writing by Employer. The provision
of this subsection (g) shall survive the expiration, suspension
or termination, for any reason, of this Agreement.
(h) Severability. If any provision of this Agreement is held invalid
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or unenforceable, the remainder of this Agreement shall
nevertheless remain in full force and effect, and if any
provision is held invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances, to the fullest
extent permitted by law.
(i) Withholding: Deductions. All compensation payable hereunder
-----------------------
including salary and other benefits, shall be subject to
applicable taxes, withholding and other required, normal or
elected employee deductions.
(j) Section Headings. Section and other headings contained in this
----------------
Agreement are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this
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Agreement.
(k) Non-Solicitation. Employee agrees that for a period of one (1)
----------------
year after the termination of employment, Employee will not, on
behalf of 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 ("Employee Related
----------------
Entity"); provided, however, that during the one (1) year period
------
referred to above, Employee will be permitted to be involved in
advertising and marketing deposit products and loans in
communities served by Employer in its residential loan and
deposit business.
(l) Employees. Employee agrees that for a period of two (2) years
---------
after the termination of Employee's employment, 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.
(m) Counterparts. This Agreement and any amendment hereto may be
------------
executed in one or more counterparts. All of such counterparts
shall constitute one and the same agreement and shall become
effective when a copy signed by each party has been delivered to
the other party.
(n) Representation By Counsel; Interpretation. Employer and Employee
-----------------------------------------
each acknowledge that each party to this Agreement has been
represented by counsel in connection with this Agreement and the
matters contemplated by this Agreement. Accordingly, any rule of
law, including but not limited to Section 1654 of the California
Civil Code, or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement
against the party that drafted it has no application and is
expressly waived. The provisions of this Agreement shall be
interpreted in a reasonable manner of effect
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the intent of the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"Employer"
PAN AMERICAN BANK, FSB
By: /s/ XXXXXXXX X. GRILL
----------------------------
Its: President
PAN AMERICAN GROUP, INC.
By: /s/ XXXXXXXX X. GRILL
----------------------------
Its: President
"EMPLOYEE"
/s/ XXXXXXXXX XXXX
-------------------------------
Xxxxxxxxx Xxxx
Pan American Bank, FSB
c/o Bastion Capital Corporation
1999 Avenue of the Xxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
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SCHEDULE TO
PARAGRAPH 4(C)
ADDITIONAL BENEFITS
STOCK OPTION PLAN
Concurrently upon execution of the Agreement, PAGI and Employee shall enter
into a Stock Option Agreement pursuant to PAGI's most current Stock Option
Plan. PAGI shall grant Employee additional stock options to purchase 30
shares upon the terms and conditions described in such Plan and Agreement,
and at a price to be determined by the PAGI Board or its compensation
committee.
PERQUISITES
See the schedule of additional benefits attached to this schedule.
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EXHIBIT TO
SCHEDULE
TO
PARAGRAPH 4(C)
PERQUISITES PAID BY EMPLOYER
________________________________________________________________________________
a. $500,000 of term life insurance in excess of the amount provided by
Employer under the Employer's group term life insurance plan in which
its employees generally participate.
b. Monthly car allowance of $500
c. Long-term Disability Insurance providing 60% of annual Base Salary up to
$10,000 per month coverage as provided under the Employer's long-term
disability plan in which its employees generally participate, or through
individual coverage if such plan does not provide such coverage.
d. Accidental Death and Dismemberment Insurance up to the maximum amount that
can be purchased under the Employer's accidental death and dismemberment
plan in which its employees generally participate.
e. Monthly premium cost under the Employer's plan for family Medical, Dental
and Vision Insurance, except that Employee shall pay family deductibles
and co-payments.
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