TWO YEAR
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of January 26, 2000, by and among
Monterey Bay Bank (the "Association"), a federally chartered savings
institution, with its principal administrative office at 000 Xxxx Xxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxxx, Monterey Bay Bancorp, Inc., a corporation organized
under the laws of the State of Delaware, and is the holding company for the
Association (the "Holding Company") and Xxxx X. Xxxxxx ("Executive").
WHEREAS, the Association wishes to obtain the services of Executive;
and
WHEREAS, Executive is willing to serve in the employ of the Association
on a full-time basis;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. EMPLOYMENT PERIOD
The Association agrees to employ the Executive, and the Executive
agrees to accept employment by the Association, in accordance with the terms and
provisions of this Agreement, for the period commencing on the date first above
written (the "Effective Date") and continuing for a period of twenty-four (24)
full calendar months, ending on the second anniversary of the Effective Date
(the "Employment Period").
2. POSITION AND RESPONSIBILITIES.
(a) During the Employment Period, Executive agrees to serve as Chief
Financial Officer of the Association. Executive shall render administrative and
management services to the Association such as are customarily performed by
persons situated in a similar executive capacity. During the Employment Period,
Executive also shall serve as Chief Financial Officer of the Holding Company and
of Portola Investment Corporation, a subsidiary of the Association.
(b) During the Employment Period, except for periods of absence
occasioned by illness, reasonable vacation periods, and reasonable leaves of
absence, Executive shall devote substantially all his business time, attention,
skill, and efforts to the faithful performance of his duties hereunder including
activities and services related to the organization, operation and management of
the Association.
3. COMPENSATION AND REIMBURSEMENT.
(a) During the Employment Period, the Executive shall receive a base
salary, which shall be paid in equal installments on a semi-monthly basis, at
the annual rate of not less than $135,000 per year ("Base Salary"). Base Salary
shall include any amounts of compensation deferred by Executive under any
employee benefit plan maintained by the Association. During the Employment
Period, Executive's Base Salary shall be reviewed annually. Any increase in Base
Salary shall become the "Base Salary" for purposes of this Agreement. In
addition to the Base Salary provided in this Section 3(a), the Association shall
also provide Executive, with all such other benefits as are provided uniformly
to regular full-time employees of the Association.
(b) In addition to the Base Salary provided for by Section 3(a),
Executive will be entitled to participate in or receive benefits under any
employee benefit plans including but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident plans, medical coverage or any other employee benefit plan
or arrangement made available by the Association or the Holding Company in the
future to its senior executives and key management employees, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Executive will be entitled to incentive compensation and
bonuses as provided in any plan of the Association or the Holding Company in
which Executive is eligible to participate. Nothing paid to the Executive under
any such plan or arrangement will be deemed to be in lieu of other compensation
to which the Executive is entitled under this Agreement.
(c) In addition to the Base Salary provided for by Section 3(a) and
other compensation provided for by Section 3(b), the Association shall pay or
reimburse Executive for all reasonable travel and other reasonable expenses
incurred by Executive performing his obligations under this Agreement. Executive
shall submit monthly to the Association a request for reimbursement together
with supporting documentation and, if applicable, receipts.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) If the Association or the Holding Company terminates, actually or
constructively, the Executive's employment during the Employment Period for any
reason other than a termination governed by Section 5(a) hereof, or termination
for Cause, as defined in Section 7 hereof, the Association shall be obligated to
pay Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, in a lump sum amount equal to
the sum of (i) Executive's Base Salary at the date of termination for a period
of one year and (ii) an amount equal to the cost of providing medical and dental
coverage, similar to the coverage in effect prior to Executive's termination,
for a period of one year. Such payments shall not be reduced in the event
Executive obtains other employment following termination of employment.
Constructive termination under this section will be deemed to occur if the
Executive is forced to resign his employment due to intolerable conditions as
defined by California law.
(b) In the event the Association is not in compliance with its minimum
capital requirements or if such payments pursuant to Section 4(a) would cause
the Association's capital to be reduced below its minimum regulatory capital
requirements, such payments shall be deferred until such time as the Association
or successor thereto is in capital compliance.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the
Association or Holding Company shall mean an event of a nature that: (i) would
be required to be reported in response to Item I of the Current Report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); or (ii) results in a
Change in Control of the Association or the Holding Company within the meaning
of the Home Owners' Loan Act of 1933 and the Rules and Regulations promulgated
by the Office of Thrift Supervision ("OTS") (or its predecessor agency), as in
effect on the date hereof (provided, that in applying the definition of change
in control as set forth under the rules and regulations of the OTS, the Board
shall substitute its judgment for that of the OTS); or (iii) without limitation
such a Change in Control shall be deemed to have occurred at such time as (A)
any "person" (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of voting securities of the Association
or the Holding Company representing 25% or more of the Association's or the
Holding Company's outstanding voting securities or the right to acquire such
securities except for any voting securities of the Association purchased by the
Holding Company in connection with the conversion of the Association to the
stock form and any securities purchased by any employee benefit plan of the
Association or the Holding Company, or (B) individuals who constitute the Board
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
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by the Holding Company's stockholders was approved by
the same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (B), considered as though he were a member of the
Incumbent Board, or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Association or the Holding Company or
similar transaction occurs in which the Association or Holding Company is not
the resulting entity, provided, however, that such an event listed above will be
deemed to have occurred or to have been effectuated upon the receipt of all
required regulatory approvals not including the lapse of any statutory waiting
periods.
(b) If a Change in Control has occurred or the Board has determined
that a Change in Control has occurred, Executive shall be entitled to the
benefits provided in Section 5(c) and Section 5(d) upon his subsequent
termination of employment at any time during the Employment Period due to: (1)
Executive's dismissal or (2) Executive's voluntary resignation following any
demotion, loss of title, office or significant authority or responsibility,
reduction in annual compensation or benefits or relocation of his principal
place of employment by more than 50 miles from its location immediately prior to
the Change in Control.
(c) Upon Executive's entitlement to benefits pursuant to Section 5(b),
the Association shall pay Executive, or in the event of his subsequent death,
his beneficiary or beneficiaries, or his estate, as the case may be, a sum equal
to the greater of 1) the payments due for the remaining term of the Agreement;
or 2) two (2) times Executive's average annual compensation for the three most
recent taxable years that Executive has been employed by the Association or such
lesser number of years in the event that Executive shall have been employed by
the Association for less than three years. Such average annual compensation
shall include any commissions, bonuses, contributions on Executive's behalf to
any pension and/or profit sharing plan, severance payments, retirement payments,
director or committee fees and fringe benefits paid or to be paid to the
Executive in any such year, any director or committee fees paid or to be paid in
any such year; provided however that any payment under this provision shall not
exceed two (2) times the Executive's average annual compensation. In the event
the Association is not in compliance with its minimum capital requirements or if
such payments would cause the Association's capital to be reduced below its
minimum regulatory capital requirements, such payments shall be deferred until
such time as the Association or successor thereto is in capital compliance. At
the election of the Executive, which election is to be made prior to a Change in
Control, such payment shall be made in a lump sum as of the Executive's date of
termination. In the event that no election is made, payment to the Executive
will be made in approximately equal installments on a monthly basis over a
period of twenty-four (24) months following the Executive's termination. Such
payments shall not be reduced in the event Executive obtains other employment
following termination.
(d) Upon the Executive's entitlement to benefits pursuant to Section
5(b), the Association will cause to be continued life, medical and disability
coverage similar to the coverage maintained by the Association for Executive
prior to his severance at no premium cost to the Executive, except to the extent
that such coverage may be changed in its application for all Association
employees on a non-discriminatory basis. Such coverage and payments shall cease
upon the expiration of twenty-four (24) full calendar months following the date
of termination.
6. CHANGE OF CONTROL RELATED PROVISIONS
Notwithstanding the provisions of Section 5, in no event shall the
aggregate payments or benefits to be made or afforded to Executive under said
paragraphs (the "Termination Benefits") constitute an "excess parachute payment"
under Section 280G of the Code or any successor thereto, and in order to avoid
such a result, Termination Benefits will be reduced, if necessary, to an amount
(the "Non-Triggering Amount"), the value of which is one dollar ($1.00) less
than an amount equal to three (3) times Executive's "base amount", as determined
in accordance with said Section 280G. The allocation of the reduction required
hereby among the Termination Benefits provided by Section 5 shall be determined
by Executive.
7. TERMINATION FOR CAUSE.
(a) For purposes of this Agreement, the term "Cause" shall mean (i)
fraud or misappropriation with respect to the business or assets of the
Association or the Holding Company; (ii) gross negligence or willful misconduct
by Executive in the performance of his duties; (iii) any habitual or repeated
neglect of his duties by Executive which Executive fails to cure upon ten (10)
days written notice; (iv) a material breach of this Agreement by Executive; (v)
the death of Executive or incapacity exceeding the maximum leave period
delineated in the Family & Medical Leave Act (FMLA) or California Family Rights
Act (CFRA); (vi) violation of any law, rule or regulation (excluding Vehicle
Code convictions, or marijuana convictions more than two years old) or final
cease-and-desist order; (vii) the use of drugs or alcohol that interferes with
the Executive's performance of his job duties; or (viii) any breach of fiduciary
duty involving personal profit; (ix) any unlawful conduct by Executive injurious
to the interest, property, operations, business or reputation of the
Association.
(b) Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Cause. Any stock options and
related limited rights granted to Executive under any stock option plan or
unvested awards granted to Executive under any stock benefit plan of the
Association, the Holding Company or any subsidiary or affiliate thereof, shall
become null and void effective upon Executive's receipt of Notice of Termination
for Cause pursuant to Section 9 hereof, and shall not be exercisable by or
delivered to Executive at any time subsequent to such Termination for Cause.
8. VOLUNTARY RESIGNATION
Nothing in this Agreement shall prevent or limit Executive's right to
voluntarily resign at any time and for any or no reason. If Executive determines
to voluntarily resign (i) other than in conjunction with a Change In Control as
defined and described in Section 5 hereto, or (ii) other than in conjunction
with an actual or constructive termination as defined and described in Section 4
hereto, Executive shall be entitled to no additional compensation beyond that
generally available to all or substantially all of the full-time employees of
the Association at that time, and Executive shall only be entitled to that
compensation and benefits earned and vested at the date of such voluntary
resignation. In conjunction with such a voluntary resignation, Executive shall
have no obligation or requirement to return any compensation or benefits earned
or vested through the date of such voluntary resignation to the Association.
9. NOTICE.
A termination for cause by the Association or the Holding Company of
the Executive's employment shall be effective upon receipt of a written notice
communicated to the executive. A termination other than for cause shall be
effective thirty (30) days after receipt of a written notice communicated to the
Executive.
10. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with this Section 10 for one (1) full year
after the earlier of expiration of this Agreement or termination of Executive's
employment.
(b) Executive shall, upon reasonable notice, furnish such information
and assistance to the Association as may reasonably be required by the
Association in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party.
11. NON-DISCLOSURE, NO-SOLICIATION AND UNFAIR COMPETITION.
(a) Executive agrees and acknowledges that during the performance of
his duties with the Association, he will receive and have access to
confidential, proprietary and/or trade secret information concerning the
business activities and plans for business activities of the Association and
affiliates thereof. Executive recognizes and acknowledges that the knowledge of
the business activities and plans for business activities of the Association and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Association. Executive will not, during
or after the Employment period, disclose any knowledge of the past, present,
planned or considered business activities of the Association or affiliates
thereof to any person, firm, corporation, or other entity for any reason or
purpose whatsoever. Notwithstanding the foregoing, Executive may disclose any
knowledge of banking, financial and/or economic principles, concepts or ideas
which are not exclusively derived from the business plans and activities of the
Association. Executive may disclose any information previously made available to
the public by the Association without limitation. Further, Executive may
disclose information regarding the business activities of the Association to the
OTS and the Federal Deposit Insurance Corporation ("FDIC") pursuant to a formal
regulatory request.
(b) Executive further agrees and acknowledges that the Association and
its affiliates have invested substantial time, effort and expense in compiling
its confidential, trade secret information and in assembling its present staff
of personnel. In order to protect the confidentiality of the Association's
proprietary confidential information, Executive agrees that during his
employment and for one year thereafter, he shall not do the following: (1)
approach, solicit or accept business from, or otherwise do business or
communicate in any way with any customer of the Association, utilizing
information which the Executive has obtained solely through his employment with
the Association, for the purpose of engaging in or assisting others in engaging
in Competition (as defined herein) with the Association; (2) approach, counsel
or attempt to induce any person who is then in the employ of the Association to
leave the employ of the Association, or employ or attempt to employ any such
person or any person who at any time during the preceding twelve (12) months or
during the term of this Agreement was in the employ of the Association unless
such person has initially and voluntarily approached Executive or Executive's
new employing entity of his or her own accord; or (3) aid, assist or counsel any
other person, firm or counsel any other person, firm or corporation to do any of
the above. For the purpose of this Agreement, a person or business is in
Competition with the business of the Association if the business involves the
solicitation for, sale or distribution of financial products and services
anywhere within the Association's primary service area. The provisions of this
paragraph do not apply in a situation of a Change of Control.
(c) Executive agrees that in addition to any and all remedies available
at law or equity (including money damages), the Association may seek injunctive
relief and/or a decree for specific performance to prevent any breach or
threatened breach by the Executive or any other person acting for, along with or
under the direction of the Executive of this Section 11, where such breach or
threatened breach will result in irreparable and continuing damage to the
Association for which there will be no adequate remedy at law. The Association
shall be entitled to seek such equitable relief in any forum, including a court
of law, notwithstanding the provision of Section 20 and the arbitration
provision referenced therein. The Association may pursue any of the remedies
described herein concurrently or consecutively in any order as to any such
breach or violation, and the pursuit of one of such remedies at any time will
not be deemed an election of remedies or waiver of the right to pursue any of
the other such remedies.
12. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Holding Company, however,
unconditionally guarantees payment and provision of all amounts and benefits due
hereunder to Executive and, if such amounts and benefits due from the
Association are not timely paid or provided by the Association, such amounts and
benefits shall be paid or provided by the Holding Company.
13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Association or
any predecessor of the Association and Executive, except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
14. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Association and their respective successors and assigns.
15. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
16. REQUIRED PROVISIONS.
(a) The Association may terminate Executive's employment at any time,
but any termination by the Association, other than Termination for Cause, shall
not prejudice Executive's right to compensation or other benefits under this
Agreement. Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Cause as defined in Section 7
hereinabove.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. ss1818(e)(3) or (g)(1); the Association's obligations under this contract
shall be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Association may in
its discretion (i) pay Executive all or part of the compensation withheld while
their contract obligations were suspended and (ii) reinstate (in whole or in
part) any of the obligations which were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order issued
under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
ss1818(e)(4) or (g)(1), all obligations of the Association under this contract
shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
(d) If the Association is in default as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act, 12 U.S.C. ss1813(x)(1) all obligations of the
Association under this contract shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Association under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution, (i) by the Director of
the OTS (or his designee) or the FDIC, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Association under the
authority contained in Section 13(c) of the Federal Deposit Insurance Act, 12
U.S.C. ss1823(c); or (ii) by the Director of the OTS (or his designee) at the
time the Director (or his designee) approves a supervisory merger to resolve
problems related to the operations of the Association or when the Association is
determined by the Director to be in an unsafe or unsound condition. Any rights
of the parties that have already vested, however, shall not be affected by such
action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss1828(k) and 12 C.F.R. ss545.121 and any rules and regulations promulgated
thereunder.
17. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
18. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
19. GOVERNING LAW.
The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of California, but only to
the extent not superseded by federal law.
20. ARBITRATION.
In the event there is any dispute arising out of Executive's
employment, the termination of that employment, or arising out of this
Agreement, the Executive and Association agree to submit such dispute to binding
arbitration in accordance with the terms of the Alternative Dispute Resolution
Agreement set forth in Appendix A to this Agreement and incorporated herein.
21. PAYMENT OF COSTS AND LEGAL FEES.
All reasonable costs and legal fees paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Association if Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement.
22. INDEMNIFICATION.
(a) The Association shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy with a minimum aggregate coverage amount of
$5 million, at its expense, or to the extent not otherwise provided through such
insurance policy, shall indemnify Executive (and his heirs, executors and
administrators) to the fullest extent permitted under federal law against all
expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been a director or officer of the Association (whether or
not he continues to be a director or officer at the time of incurring such
expenses or liabilities), such expenses and liabilities to include, but not be
limited to, judgments, court costs and attorneys' fees and the cost of
reasonable settlements.
(b) Any payments made to Executive pursuant to this Section are subject
to and conditioned upon compliance with 12 X.X.X.xx 545.121 and any rules or
regulations promulgated thereunder.
23. SUCCESSOR TO THE ASSOCIATION.
The Association shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Association's obligations under this Agreement, in the same manner and to the
same extent that the Association would be required to perform if no such
succession or assignment had taken place.
IN WITNESS WHEREOF, Monterey Bay Bank and Monterey Bay Bancorp, Inc.
have caused this Agreement to be executed and their seals to be affixed hereunto
by their duly authorized officers and directors, and Executive has signed this
Agreement, on the 5th day of July, 2000.
ATTEST: MONTEREY BAY BANK
/s/ Xxxxxxxx X. Xxxxx By: /s/ C. Xxxxxx Xxxxxx
--------------------- --------------------
Xxxxxxxx X. Xxxxx C. Xxxxxx Xxxxxx
Secretary Chief Executive Officer
[SEAL]
ATTEST: MONTEREY BAY BANCORP, INC.
(Guarantor)
/s/ Xxxxxxxx X. Xxxxx By: /s/ C. Xxxxxx Xxxxxx
--------------------------- --------------------
Xxxxxxxx X. Xxxxx C. Xxxxxx Xxxxxx
Secretary Chief Executive Officer
[SEAL]
WITNESS:
/s/ Xxxxxxx Xxxxxx /s/ Xxxx X. Xxxxxx
------------------ ------------------
Xxxxxxx Xxxxxx Xxxx X. Xxxxxx
Chief Financial Officer
APPENDIX A
ALTERNATIVE DISPUTE RESOLUTION
I. AGREEMENT TO ARBITRATE
In the event that any employment dispute arises between Monterey Bay
Bank ("Association") and Xxxx X. Xxxxxx ("Executive"), the parties
involved will make all efforts to resolve any such dispute through
informal means. If these informal attempts at resolution fail and if
the dispute arises out of or is related to a breach of the parties'
Employment Agreement, the termination of employment or alleged unlawful
discrimination, Association and Executive will submit the dispute to
final and binding arbitration.
By accepting employment with the Association, Executive agrees that
arbitration is the exclusive remedy for all such arbitrable disputes;
with respect to such disputes, no other action may be brought in court
or any other forum (except actions to compel arbitration hereunder).
THIS ADR AGREEMENT IS A WAIVER OF THE PARTIES' RIGHTS TO A CIVIL COURT
ACTION FOR A DISPUTE RELATING TO TERMINATION OF EMPLOYMENT OR ALLEGED
UNLAWFUL DISCRIMINATION, WHICH INCLUDES RETALIATION OR SEXUAL OR OTHER
UNLAWFUL HARASSMENT; ONLY AN ARBITRATOR, NOT A JUDGE OR JURY, WILL
DECIDE THE DISPUTE.
Employment disputes arising out of or related to termination of
employment or alleged unlawful discrimination, including retaliation,
sexual or other unlawful harassment, shall include, but not be limited
to, the following: alleged violations of federal, state and/or local
constitutions, statutes or regulations; claims based on any purported
breach of contractual obligation, including breach of the covenant of
good faith and fair dealing; and claims based on any purported breach
of duty arising in tort, including violations of public policy.
Disputes related to workers' compensation and unemployment insurance
are not arbitrable hereunder. Claims for benefits covered by a separate
benefit plan that provides for arbitration are not covered by this ADR
Agreement. Claims that are filed with or are being processed by the
U.S. Equal Employment Opportunity Commission ("EEOC"), or that are
brought under Title VII of the Civil Rights Act of 1964, as amended,
are not arbitrable under this Agreement, except that the parties may
agree in writing to do so with respect to each such dispute that may
arise.
(A) REQUEST FOR ARBITRATION
(a) Attempt At Informal Resolution Of Disputes
Prior to submission of any dispute to arbitration, Association and
Executive shall attempt to resolve the dispute informally through
mediation. Association and Executive will select a mediator from a list
provided by the State Mediation and Conciliation Service or other
similar agency who will assist the parties in attempting to reach a
settlement of the dispute. The mediator may make settlement suggestions
to the parties but shall not have the power to impose a settlement upon
them. If the dispute is resolved in mediation, the matter shall be
deemed closed. If the dispute is not resolved in mediation and goes to
the next step (binding arbitration), any proposals or compromises
suggested by either of the parties or the mediator shall not be
referred to or have any bearing on the arbitration procedure. The
mediator cannot also serve as the arbitrator in the subsequent
proceeding unless all parties expressly agree in writing.
(b) Arbitration Procedures
Should Association or Executive wish to pursue arbitration of any
arbitrable dispute, Association, Executive or its/his representative
must submit a written "Request For Arbitration" to the other party with
(1) year of the alleged conduct giving rise to the dispute. If the
"Request For Arbitration" is not submitted in accordance with the
aforementioned time limitations, the party will not be able to bring
its/his claims to this or any other forum. Unless otherwise required by
law, the "Request For Arbitration" shall clearly state it is "Request
For Arbitration" at the beginning of the first page and includes the
following information: (1) a
factual description of the dispute in sufficient detail to advise the
other party of the nature of the dispute, (2) the date when the dispute
first arose, and (3) the relief requested by requesting party.
A Request for Arbitration must be mailed to the other party's last
known address or hand-delivered to that party. The party to whom the
Request for Arbitration is directed will respond within thirty (30)
days so that the parties can begin the process of selecting an
Arbitrator. Such response may include any counterclaims.
(c) Selection Of The Arbitrator
All disputes will be resolved by a single Arbitrator, selected through
and under the American Arbitration Association's "National Rules for
the Resolution of Employment Disputes" as amended and effective June 1,
1997.
(d) The Arbitrator's Authority
The Arbitrator shall have the powers enumerated below:
1. Ruling on motions regarding discovery, and ruling on
procedural and evidentiary issues arising during the
arbitration.
2. Ruling on motions to dismiss and/or motions for summary
judgment applying the standards governing such motions under
the Federal Rules of Civil Procedure.
3. Issuing protective orders on the motion of any party or third
party witness, such protective orders may include, but are not
limited to, sealing the record of the arbitration, in whole or
in part (including discovery proceedings and motions,
transcripts, and the decision and award), to protect the
privacy or other constitutional or statutory rights of parties
and/or witnesses.
4. Determining only the issue(s) submitted to him/her. The
issue(s) must be identifiable in the "Request For Arbitration"
or counterclaim(s). Except as required by law, any issue(s)
not identifiable in those documents is outside the scope of
the Arbitrator's jurisdiction and any award involving such
issue(s), upon motion by a party, shall be vacated.
(e) Discovery
The discovery process shall proceed and be governed, consistent with
the standards of the Federal Rules of Civil Procedure, as follows:
1. Unless otherwise required by law, parties may obtain discovery
by any of the following methods:
a. Depositions of non-expert witnesses upon oral
examination, five (5) per side as of right, with more
permitted if leave is obtained from the Arbitrator;
b. Written interrogatories, up to a maximum combined
total of twenty (20), with the responding party
having twenty (20) days to respond;
c. Request for production of documents or things or
permission to enter upon land or other property for
inspection, with the responding party having twenty
(20) days to produce the documents and allow entry or
to file objections to the request;
d. Physical and mental examination, in accordance with
Federal Rule of Civil Procedure 35(a); and
e. Any motion to compel production, answers to
interrogatories or entry onto land or property must
be made to the Arbitrator within fifteen (15) days of
receipt of objections.
2. To the extent permitted by the Federal Arbitration Act or
applicable California law, each party shall have the right to
subpoena witnesses and documents during discovery and for the
arbitration.
3. All discovery requests shall be submitted no less than sixty
(60) days before the hearing date.
4. The scope of discoverable evidence shall be in accordance with
Federal Rule of Civil Procedure 26(b)(1).
5. The Arbitrator shall have the power to enforce the
aforementioned discovery rights and obligations by the
imposition of the same terms, conditions, consequences,
liabilities, sanctions and penalties as can or may be imposed
in like circumstances in a civil action by a federal court
under the Federal Rules of Civil Procedure.
(f) Hearing Procedure
The hearing shall proceed according to the American Arbitration
Association's "National Rules for the Resolution of Employment
Disputes" as amended and effective June 1, 1997, with the following
amendments:
1. The Arbitrator shall rule at the outset of the
arbitration on procedural issues that bear on whether
the arbitration is allowed to proceed.
2. Each party has the burden of proving each element of
its claims or counterclaims, and each party has the
burden of proving any of its affirmative defenses.
3. In addition to, or in lieu of closing argument,
either party shall have the right to present a
post-hearing brief, and the due date for exchanging
any post-hearing briefs shall be mutually agreed on
by the parties and the Arbitrator.
(g) Substantive Law
1. The parties agree that they will be afforded the
identical legal equitable, and statutory remedies as
would be afforded them were they to bring an action
in a court of competent jurisdiction.
2. The applicable substantive law shall be the law of
the State of California or federal law. If both
federal and state law are applicable to a cause of
action, Executive shall have the right to elect his
choice of law. Choice of substantive law in no way
affects the procedural aspects of the arbitration,
which are exclusively governed by the provisions of
this ADR Agreement.
(h) Opinion And Award
The Arbitrator shall issue a written opinion and award, in conformance
with the following requirements:
1. The opinion and award must be signed and dated by the
Arbitrator.
2. The Arbitrator's opinion and award shall decide all
issues submitted.
3. The Arbitrator's opinion and award shall set forth
the legal principles supporting each part of the
opinion.
4. The Arbitrator shall have the same authority to award
remedies, damages and costs as provided to a judge
and/or jury under parallel circumstances.
(i) Enforcement Of Arbitrator's Award
Following the issuance of the Arbitrator's decision, any party may
petition a court to confirm, enforce, correct or vacate the
Arbitrator's opinion and award under the Federal Arbitration Act,
and/or applicable California law.
(j) Fees And Costs
Unless otherwise required by law, fees and costs shall be allocated in
the following manner:
1. Each party shall be responsible for its own
attorneys' fees, except as otherwise provided by law.
2. The Association shall pay the entire cost of the
arbitrator's services, the facility in which the
arbitration is to be held, and any similar costs,
except that Executive shall contribute toward these
costs an amount equal to the then-current filing fee
in California Superior Court charged for filing a
complaint or for first appearing, whichever is lower.
3. The Association shall pay the entire cost of a court
reporter to transcribe the arbitration proceedings.
Each party shall advance the cost for said party's
transcript of the proceedings. Each party shall
advance its own costs for witness fees, service and
subpoena charges, copying, or other incidental costs
that each party would bear during the course of a
civil lawsuit.
4. Each party shall be responsible for its costs
associated with discovery, except as required by law
or court order.
(B) SEVERABILITY
In the event that any provision of this ADR Agreement is determined by
a court of competent jurisdiction to be illegal, invalid or
unenforceable to any extent, such term or provision shall be enforced
to the extent permissible under the law and all remaining terms and
provisions of this ADR Agreement shall continue in full force and
effect.
DATED: July 5, 2000 By: /s/ Xxxx X. Xxxxxx
------------------
Xxxx X. Xxxxxx
MONTEREY BAY BANK
DATED: July 6, 2000 By: /s/ C. Xxxxxx Xxxxxx
--------------------
C. Xxxxxx Xxxxxx
Chief Executive Officer
MONTEREY BAY BANCORP, INC.
(Guarantor)
DATED: July 6, 2000 By: /s/ C. Xxxxxx Xxxxxx
--------------------
C. Xxxxxx Xxxxxx
Chief Executive Officer
