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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the date specified in Section 14(i)
below as the Effective Date, by and between Xxxxxx X. Xxxx, Xx. (the "Employee")
and BancWest Corporation, a Delaware corporation (the "Company").
1. Term of Employment.
(a) Basic Rule. The Company shall, and shall cause its subsidiary,
First Hawaiian Bank (the "Bank") to, employ the Employee, and the Employee
agrees to remain in employment with the Company and the Bank, from the Effective
Date (as hereinafter defined) until the third anniversary of the Effective Date
or, if earlier, the date when the Employee's employment terminates pursuant to
subsection (b), (c) or (d) below (the "Term").
(b) Early Termination. Subject to Sections 6 and 7, the Company may
terminate the Employee's employment by giving the Employee 90 days' advance
notice in writing. The Employee may terminate his employment by giving the
Company 90 days' advance notice in writing. Any waiver of notice shall be valid
only if it is made in writing and expressly refers to the applicable notice
requirement of this Section 1. Subject to Section 8, the Employee's employment
shall terminate automatically in the event of his death.
(c) Cause. Subject to the provisions of this subsection (c), upon
written notice to the Employee, the Company may at any time during the Term
terminate the Employee's employment for Cause. For all purposes under this
Agreement, "Cause" shall mean:
(i) A material failure by the Employee to perform substantially
all of his duties, other than a failure resulting from the Employee's
complete or partial incapacity due to physical or mental illness or
impairment, hereunder;
(ii) Gross misconduct, material fraud or material dishonesty to
the Company or its employees in the performance of the Employee's duties
to the Company;
(iii) Conviction of, or plea of "guilty" or "no contest" to, a
felony under the laws of the United States or any state thereof; or
(iv) A material violation by the Employee in the course of his
duties hereunder of any law or regulation to which the Company is
subject provided that the Employee knew or should have known that the
conduct in question was in violation of such law or regulation;
provided, that a violation of such law or regulation shall be deemed to
be "material" only if it results in material financial loss to the
Company or if it materially impairs the Employee's ability to perform
his duties hereunder or his value to the Company as its officer; and
provided, further, that the Employee shall be fully protected by, and
entitled to rely upon, advice of counsel to the Company for purposes of
determining whether the Employee knew or should have known that the
conduct in question was in violation of such law or regulation.
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For purposes of this Agreement, no act or failure to act on the Employee's part
shall constitute "Cause" if done, or omitted, by him in good faith and in the
reasonable belief that his action or omission was in, or not opposed to, the
best interest of the Company. Termination of the Employee for Cause shall be
made by delivery to the Employee of a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the non-employee directors of
the Company's Board of Directors (the "Board") at a meeting of such directors
called and held for such purpose, after 30 days' prior written notice to the
Employee specifying the basis for such termination and the particulars thereof
and, with respect to clauses (i), (ii) and (iv), a reasonable opportunity for
the Employee to cure or otherwise resolve the behavior in question prior to such
meeting, finding that in the reasonable judgment of such directors, the conduct
or event set forth in clause (i), (ii), (iii) or (iv), above, has occurred and
that such occurrence warrants the Employee's termination for Cause.
(d) Disability. Subject to Section 7, the Company may terminate the
Employee's active employment during the Term due to Disability by giving the
Employee 30 days' advance notice in writing. For all purposes under this
Agreement, "Disability" shall mean a physical or mental incapacity that
qualifies the Employee for payments under the Company's or the Bank's group
long-term disability insurance policy or plan (the "LTD Plan"). In the event
that the Employee resumes the performance of substantially all of his duties
hereunder before the termination of his active employment under this subsection
(d) becomes effective, the notice of termination shall automatically be deemed
to have been revoked.
(e) Rights upon Termination. Except as expressly provided in Sections
6, 7 and 8, upon the termination of the Employee's employment, the Employee
shall only be entitled to the compensation, benefits and reimbursements under
the plans, programs or policies described in Sections 3, 4 and 5 and which
accrued or vested during the period preceding the effective date of the
termination or as a consequence of such termination (whether payable on such
termination or thereafter). The payments under this Agreement shall fully
discharge all responsibilities of the Company and the Bank to the Employee,
other than the Employee's entitlement to such accrued or vested compensation,
benefits and reimbursements as referred to in the preceding sentence.
2. Duties and Scope of Employment.
(a) Position. The Company agrees to employ the Employee as Chairman
of the Board ("Chairman") and Chief Executive Officer of the Company during the
Term. In addition, the Company agrees to cause the Bank to employ the Employee
as the Bank's Chairman and Chief Executive Officer during the Term. The
Employee, as Chairman and Chief Executive Officer of the Company and of the
Bank, shall report to the Board. As of the Effective Date, the Employee shall
continue to serve as a member of the Boards of Directors of the Company, the
Bank and Bank of the West, an affiliate of the Company ("Bank of the West").
Thereafter the Company agrees to cause the Employee to be re-elected to the
Boards of Directors of the Company, the Bank and Bank of the West. The
Employee's principal offices for the performance of his duties hereunder shall
be located in Honolulu, Hawaii. However, the Company shall also maintain
suitable offices and secretarial support for the Employee at its offices in the
San Francisco Bay Area for the Employee's use while he is performing services at
that location.
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(b) Obligations. During the Term, the Employee shall devote his
reasonable efforts and full business time to the Company and its affiliates.
During the Term, the Employee shall not render services for compensation to any
other person which would conflict with his services to the Company without the
express prior approval of the Board (including, without limitation, services as
a member of the board of directors of another corporation). Membership on the
board of directors of another corporation shall be approved unless:
(i) Such other corporation is engaged in activities that are
competitive with the Company;
(ii) Such other corporation is below the quality and stature, in
the reasonable judgment of the Board, of the Employee's position under
this Agreement and with the Company's objectives; and
(iii) The Employee's aggregate time commitments to such board
memberships are materially inconsistent with his responsibilities under
this Agreement.
The foregoing shall not preclude the Employee from engaging in appropriate
civic, charitable or religious activities or from devoting a reasonable amount
of time to private investments that do not materially interfere or conflict with
his responsibilities to the Company; provided, however, that in no event shall
the foregoing preclude the Employee from continuing to serve on such boards of
directors or trustees of any business corporations and/or charitable
organizations, or otherwise to serve as a trustee or engage in any other similar
activities, as the Employee serves or engages as of the date of this Agreement.
3. Cash Compensation.
(a) Base Salary. During the Term, the Company agrees to pay the
Employee as compensation for his services to the Company and the Bank a base
salary at the annual rate of $1,030,403 or at such higher rate as the Company
may determine from time to time ("Base Salary"). Such Base Salary shall be
payable in regular installments in accordance with the Company's standard
payroll procedures (but no less frequently than once per month). Once the
Company has increased such Base Salary, it thereafter shall not be reduced for
any reason. The Company covenants that such Base Salary is and shall be, during
the term hereof, the highest base salary of any employee of the Company or any
of its subsidiaries.
(b) Annual Bonus. With respect to each full or partial fiscal year
during the Term, the Employee shall be eligible to earn an annual bonus award in
respect of each fiscal year of the Term (prorated in the event of a partial
fiscal year) (an "Annual Bonus"), with a target of 100% of the Employee's Base
Salary (the "Target Bonus"), based upon the achievement of annual performance
targets established by the Company's Executive Compensation Committee after
consultation with the Employee; provided that Executive shall be entitled to an
Annual Bonus at least equal to 65% of the Employee's Base Salary in respect of
each of the first three full fiscal years of the Term.
(c) LTIP. The Employee shall be entitled to participate in a
long-term incentive plan (the "New LTIP"), under which the Employee shall have
the opportunity to earn maximum awards that are no less favorable than the
maximum awards that the Employee has the
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opportunity to earn pursuant to the Company's long-term incentive plan as in
effect as of the date hereof (the "Company LTIP"); provided, further, that,
under the New LTIP, the Employee's target award shall be at least equal to 50%
of Employee's Base Salary and Employee's maximum award opportunity shall be at
least 200% of such target award.
4. Vacations, Employee Benefits, Equity Arrangements and Perquisites.
(a) Vacation and Employee Benefits.
During the Term, the Employee shall be entitled to not less than four
weeks of paid vacation time per annum. During such Term, the Employee shall also
be eligible to participate in all of the employee benefit plans, executive
compensation programs and fringe benefits (including, but not limited to, all
bonus, incentive, stock, stock option, deferred compensation and retirement
plans and executive loan programs) maintained by the Company or the Bank, on
terms and conditions no less favorable than those provided to the most senior
executives of the Company or the Bank. The determination as to the amounts of
any awards available to the Employee under these programs shall be reviewed at
least annually by the Company's Executive Compensation Committee to ensure that
such amounts are competitive with awards granted to similarly situated senior
executives of publicly held bank holding companies comparable to the Company.
(b) Equity Incentive Compensation.
During the Term, the Employee shall be entitled to participate in,
and receive stock and other equity or equity-based awards, under the stock
option programs and stock purchase programs of BNP Paribas, a societe anonyme or
limited liability banking corporation organized under the laws of the Republic
of France ("BNP"), at levels and on terms consistent with those provided to
similarly situated executives of BNP and/or its subsidiaries.
(c) Perquisites. In addition to the perquisites afforded to other
senior executives of the Company, the Employee shall be entitled to the
following perquisites: (i) security driver and car, (ii) first class air travel
or air travel on corporate aircraft for business purposes for the Employee and
family (security purposes); (iii) tax preparation and financial planning
services, (iv) all other perquisites provided to Employee as of the Effective
Date (subject to reasonable future modifications, so long as such modifications
do not materially reduce, in the aggregate, the benefit of such perquisites to
the Employee), and (iv) payment of an amount in respect of all federal, state
and local income and other employment-related taxes paid by the Employee in
respect of any and all of the perquisites provided to the Employee herein, such
that the perquisites set forth herein are provided at no cost to the Employee.
5. Business Expenses.
During the Term, the Employee shall be authorized to incur necessary
and reasonable travel, entertainment and other business expenses in connection
with his duties
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hereunder. The Company, or the Bank, shall reimburse the Employee for such
expenses upon presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company's generally applicable
policies.
6. Termination Without Cause or for Good Reason.
(a) Good Reason. For all purposes under this Agreement, "Good Reason"
shall mean that the Employee, without his consent:
(i) Has incurred a reduction in his position, title, authority
or responsibility at the Company, the Bank and/or the Bank of the West
or an adverse change to his reporting relationships, or has not been
re-elected to any or all of the Boards of Directors of the Company, the
Bank, and/or Bank of the West;
(ii) Has incurred a reduction in his Base Salary or Target Bonus
or a reduction in employee benefits (including perquisites, target
long-term incentive compensation, retirement plan and deferred
compensation plan benefits);
(iii) Has been notified that his principal place of work will be
relocated to a location outside the City of Honolulu, Hawaii; or
(iv) Is required to work more than 80 days per year outside of
the Employee's principal offices in the City of Honolulu, Hawaii.
The Employee may also terminate his employment for "Good Reason" (x) if the
Company breaches any material provision of this Agreement, (y) the Company fails
to satisfy the requirements of Section 9 of this Agreement relating to the
assumption of the Agreement by any successor entity, or (z) for any reason or no
reason during the 30-day period following the first anniversary of any Change in
Control (as defined below) that occurs after the Effective Date. For purposes of
this Agreement, any good faith determination of "Good Reason" made by the
Employee shall be conclusive; provided, however, that termination by the
Employee for Good Reason shall be made by delivery to the Board of written
notice, at least 30 days' prior to the effective date of such termination,
specifying the basis for such termination and the particulars thereof and
provided that the Company shall have a reasonable opportunity to cure or
otherwise resolve the problem in question prior to the effective date of such
termination, in which case Good Reason shall not exist. For purposes of this
Agreement, "Change in Control" shall mean (i) any time at which BNP (and its
wholly owned subsidiaries) do not have, by themselves, the ability, to elect a
majority of the Board, (ii) any Person (other than BNP, the Company, any trustee
or other fiduciary holding securities under an employee benefit plan of BNP, the
Company, or any company owned, directly or indirectly, by the shareholders of
BNP or the Company in substantially the same proportions as their ownership of
stock of BNP or the Company), becomes the beneficial owner, directly or
indirectly, of securities of BNP or the Company representing 25% or more of the
combined voting power of BNP's or the Company's then-outstanding securities, or
(iii) the consummation of any merger, consolidation, plan of arrangement,
reorganization or similar transaction or series of transactions in which BNP or
the Company is involved, other than such a transaction or series of transactions
which would result in the shareholders of BNP or the Company immediately prior
thereto continuing to own (either
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by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the securities
of BNP or the Company (or such surviving entity (or the parent, if any))
outstanding immediately after such transaction(s) in substantially the same
proportions as their ownership immediately prior to such transaction(s). For
purposes of the Agreement, a Change in Control shall not be deemed to have
occurred upon the Effective Date by reason of the transactions contemplated by
the Agreement and Plan of Merger dated as of May __, 2001 by and among the
Company, BNP and Newco 1 (the "Merger Agreement") or by reason of any changes to
the Board approved by BNP or its affiliates.
(b) Severance Payment. The Employee shall receive a severance payment
from the Company (the "Severance Payment") if, during the Term of this
Agreement:
(i) The Employee voluntarily resigns his employment with the
Company for Good Reason; or
(ii) The Company terminates the Employee's employment with the
Company for any reason other than Cause, Disability or death.
The Severance Payment shall be made in a lump sum not more than five business
days following the date of the employment termination and shall be in an amount
determined under subsection (c) below. Subject to Section 1(e), the Severance
Payment shall be in lieu of any further payments to the Employee under Section 3
and any further accrual of benefits under Section 4 with respect to periods
subsequent to the date of the employment termination. Notwithstanding the
preceding sentence, however, the Employee shall be entitled to any payments or
acceleration of the vesting of awards, which occur under the terms of any plan
described in Section 4. With respect to any options or other stock-based awards
granted to the Employee pursuant to a stock option plan or other equity-based
plan, the Employee shall be 100% vested in any option or award outstanding upon
a termination of employment pursuant to this Section 6(b). If the Employee's
employment is terminated pursuant to this Section 6(b), then notwithstanding
anything to the contrary in the applicable stock option plans and the Employee's
stock option agreements, the Employee shall have the full term of such option
(but no less than eighteen (18) months) to exercise such options (irrespective
of termination of employment).
(c) Amount. The amount of the Severance Payment shall be equal to the
sum of:
(i) 300% of the sum of (A) the Employee's annual rate of Base
Salary, as in effect on the date of the employment termination, plus (B)
the arithmetic mean of the Annual Bonuses awarded to the Employee by the
Company for the three most recent consecutive fiscal years ending prior
to the date of the employment termination (regardless of when paid),
plus (C) an amount equal to the arithmetic mean of the awards paid or
payable to the Employee under the Company LTIP and/or New LTIP, as
applicable, in respect of the three most recently completed performance
cycles under such plan, provided that such amount shall in no event be
less than the Employee's award payable in year 2000 under the Company
LTIP; plus
(ii) A lump sum payment equal to the sum of (A) the Employee's
Target Bonus for the fiscal year of termination multiplied by a fraction
(the "Fraction"),
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the numerator of which shall equal the number of days the Employee was
employed by the Company in the fiscal year in which the termination
occurs, and the denominator of which shall equal 365, plus (B) the
target award(s) in respect of all performance periods in existence under
the Company LTIP and/or New LTIP, as applicable, as of the date of
termination, to which the Employee may become entitled under the
applicable plan, multiplied by the Fraction.
(d) Insurance Coverage. During the 36-month period commencing upon a
termination of employment described in subsection (b) above (such period, the
"Severance Period"), the Employee (and, where applicable, his dependents) shall
be entitled to continue participation in the group insurance plans maintained by
the Company, including life, disability and health insurance programs, as if he
were still an employee of the Company. Where applicable, the Employee's salary
for purposes of such plans shall be deemed to be equal to his Base Salary as of
the date of termination of the Employee's employment. To the extent that the
Company finds it impossible to cover the Employee under its group insurance
policies during the Severance Period, the Company shall provide the Employee
with individual policies which offer at least the same level of coverage and
which impose not more than the same costs on him. The foregoing notwithstanding,
in the event that the Employee becomes eligible for comparable group insurance
coverage in connection with new employment, the coverage provided by the Company
under this subsection (d) shall become secondary. Any group health continuation
coverage that the Company is required to offer under the Consolidated Omnibus
Budget Reconciliation Act of 1986 ("COBRA") shall commence when coverage under
this subsection (d) terminates.
(e) Additional Benefits
(i) Retirement Benefit Plan Credit. For purposes of eligibility
for retirement, for early commencement or actuarial subsidies under any
Company or Bank (or any affiliate thereof) pension, medical
reimbursement and/or life insurance plan, (x) the Employee will be
credited with years of service in respect of, and age achieved during,
the Severance Period and (y) for purposes of calculating any final pay
averages, the Employee shall be deemed to have earned the Base Salary
and Target Bonus in effect for the plan year in which the Employee's
termination occurs in respect of each plan year of the Severance Period,
subject, in respect of each such plan year, to annual increases
consistent with the Company's past practice (as of the date of this
Agreement), of increasing the rate of Base Salary and Target Bonus
amounts in the ordinary course; provided, that if any benefits afforded
by this Agreement, including the benefits arising from the grant of
additional service and age credit and the inclusion of additional years
of annual compensation, cannot be provided under the qualified pension
plans of the Company due to the qualification provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the benefit, or its
equivalent in value, shall be provided under a nonqualified pension plan
or arrangement of the Company.
(ii) Office and Secretarial Support. During the Severance
Period, the Company shall provide the Employee with appropriate and
suitable office space, and part-time secretarial staff, located in the
Honolulu, Hawaii financial district (or such other location as
designated by the Employee).
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(iii) Equity Incentive Compensation. Upon termination, all
unvested stock options, stock appreciation (phantom stock) rights
("SARs") (if any) and any restricted stock awards shall become fully
vested, and all options and SARs shall remain outstanding and
exercisable for the balance of the term of such awards.
(f) No Mitigation. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Section 6 (whether by seeking new
employment or in any other manner). Except as expressly provided in subsection
(d) above, no such payment shall be reduced by earnings or benefits that the
Employee may receive from any other source.
7. Termination for Disability.
(a) Disability Continuation Period. In the event that, during the
Term, the Company terminates the Employee's employment for Disability, the
Employee shall receive all of the payments and benefit coverage described in
this Section 7. Such payments and benefit coverage shall continue for the period
(the "Disability Continuation Period") commencing on the date when the
employment termination is effective and ending on the earliest of:
(i) The third anniversary of such date of termination;
(ii) The date when the Employee's benefits under the LTD Plan
terminate; or
(iii) The date of the Employee's death.
(b) Compensation. During the Disability Continuation Period, the
Company shall pay the Employee compensation at an annual rate equal to the
difference between:
(i) The sum of the following:
(A) The Employee's annual rate of Base Salary, as in
effect on the date of the employment termination; plus
(B) The arithmetic mean of the annual bonuses awarded to
the Employee by the Company or the Bank for the three most recent
consecutive fiscal years ending prior to the date of the employment
termination (regardless of when paid); plus
(C) The arithmetic mean of the awards awarded to the
Employee by the Company under the Company LTIP for the three most
recently completed performance cycles under such plan, ending prior
to the date of the employment termination (regardless of when paid),
provided that such amount shall in no event be less than the
Employee's award payable in year 2000 under the Company LTIP; minus
(ii) The benefits received by the Employee during the applicable
period under the LTD Plan.
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Compensation under this subsection (b) shall be paid at periodic intervals in
accordance with the Company's standard payroll procedures (but no less
frequently than once per month). In addition to the foregoing, within 10 days of
the termination of the Employee's employment for Disability, the Company shall
pay to the Employee a lump sum payment equal to the sum of (x) the Employee's
Target Bonus for the fiscal year of termination multiplied by the Fraction and
(y) the Employee's target award(s) in respect of all performance periods in
existence under the long-term incentive plan in which the Employee participates
as of the date of termination, multiplied by the Fraction.
(c) Insurance Coverage. During the Disability Continuation Period,
the Employee (and, where applicable, his dependents) shall be entitled to
continue participation in the group insurance plans maintained by the Company,
including life, disability and health insurance programs, as if he were still an
employee of the Company. Where applicable, the Employee's salary for purposes of
such plans shall be deemed to be equal to his Base Salary as of termination of
employment. To the extent that the Company finds it impossible to cover the
Employee under its group insurance policies during the Disability Continuation
Period, the Company shall provide the Employee with individual policies which
offer at least the same level of coverage and which impose not more than the
same costs on him. Any group health continuation coverage that the Company is
required to offer under COBRA shall commence when coverage under this subsection
(c) terminates.
(d) Equity Incentive Compensation. Upon termination, all unvested
stock options, SARs (if any) and any restricted stock awards shall become fully
vested, and all options and SARs shall remain outstanding and exercisable for
the balance of the term of such awards.
(e) Retirement Benefit Plan Credit. For purposes of eligibility for
retirement, for early commencement or actuarial subsidies under any Company (or
subsidiary) pension, medical reimbursement and/or life insurance plan, the
Employee will be credited with years of service and age credit through the
Employee's achievement of age 65; provided, that if any benefits afforded by
this Agreement, including the benefits arising from the grant of additional
service and age credit, cannot be provided under the qualified pension plans of
the Company due to the qualification provisions of the Code, the benefit, or its
equivalent in value, shall be provided under a nonqualified pension plan or
arrangement of the Company.
8. Termination by Reason of Death.
(a) Compensation. In the event that the Employee dies, the Term shall
be automatically terminated and the Company shall pay to the Employee's estate,
in one lump sum within 10 days of such death, an amount equal to the sum of:
(i) The difference between (A) 300% of the sum of (x) the
Employee's annual rate of Base Salary, as in effect on the date of the
employment termination, plus (y) the arithmetic mean of the annual
bonuses awarded to the Employee by the Company or the Bank for the three
most recent consecutive fiscal years ending prior to the date of the
employment termination (regardless of when paid), plus (z) an amount
equal to the arithmetic mean of the awards paid or payable to the
Employee under the Company LTIP and/or New LTIP, as applicable, in
respect of the three most
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recently completed performance cycles under such plan, provided that
such amount shall in no event be less than the Employee's award payable
in year 2000 under the Company LTIP; minus (B) the benefits, if any,
received by the Employee's estate under the Company's death benefit
plan; plus
(ii) A lump sum payment equal to the sum of (A) the Employee's
Target Bonus for the fiscal year of termination multiplied by the
Fraction plus (B) the target award(s) in respect of all performance
periods in existence under the Company LTIP and/or New LTIP, as
applicable, as of the date of termination, to which the Employee may
become entitled under the applicable plan, multiplied by the Fraction.
(b) Insurance Coverage. During the 36-month period commencing upon
the Employee's death, the Employee's applicable dependents shall be entitled to
continue participation in the group insurance plans maintained by the Company,
including health insurance programs, as if the Employee were still an employee
of the Company. Where applicable, the Employee's salary for purposes of such
plans shall be deemed to be equal to his Base Salary as of death. To the extent
that the Company finds it impossible to cover the Employee's dependents under
its group insurance policies during the 36 months following the Employee's
death, the Company shall provide the Employee's dependents with individual
policies which offer at least the same level of coverage and which impose not
more than the same costs on the dependents as were payable by the Employee
and/or his dependents immediately prior to the Employee's death.
(c) Equity Incentive Compensation. Upon termination, all unvested
stock options, SARs (if any) and any restricted stock awards shall become fully
vested, and all options and SARs shall remain outstanding and exercisable for
the balance of the term of such awards.
9. Successors.
(a) Company's Successors. The Company shall require any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets, by an agreement in substance and form
reasonably satisfactory to the Employee, to assume this Agreement and to agree
expressly to perform this Agreement in the same manner and to the same extent as
the Company would be required to perform it in the absence of a succession. The
Company's failure to obtain such agreement prior to the effectiveness of a
succession shall be a breach of this Agreement and shall entitle the Employee to
all of the compensation and benefits to which he would have been entitled
hereunder if the Company had involuntarily terminated his employment without
Cause immediately after such succession becomes effective. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets which executes and delivers the assumption
agreement described in this subsection (a) or which becomes bound by this
Agreement by operation of law.
(b) Employee's Successors. This Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
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10. Non-Disclosure of Confidential Information.
During the term of this Agreement and thereafter, the Employee shall
not, without the prior written consent of the Board, disclose or use for any
purpose (except in the course of his employment and in furtherance of the
business of the Company and its subsidiaries) confidential information or
proprietary data of the Company and its subsidiaries, except as required by
applicable law or legal process; provided, however, that confidential
information shall not include any information known generally to the public or
ascertainable from public or published information (other than as a result of
unauthorized disclosure by the Employee) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Company and its subsidiaries;
provided, further, that the Employee may disclose the existence and contents of
this Agreement to his family, legal advisors, accountant and other financial
advisors. The Employee agrees to deliver to the Company at the termination of
his employment to the extent reasonably requested by the Company, or at any
other time the Company may reasonably request, all memoranda, notes, plans,
records, reports and other documents (and copies thereof) relating to the
business of the Company and its subsidiaries which he may then possess or have
under his control except for personal notes of the Employee.
11. Non-Competition.
(a) Covenant Not To Compete. This Section 11 shall apply:
(i) During the Term; and
(ii) During the two-year period following the termination of the
Employee's employment by the Company without Cause (other than for
Disability) or by the Employee's resignation for Good Reason.
While this Section 11 applies, the Employee shall not, directly or indirectly,
engage in any banking business or activity in the States of California, Hawaii,
Nevada, New Mexico, Oregon, Washington, or Idaho ("Competitive Business") nor be
employed by, render services of any kind to, advise or receive compensation in
any form from, nor invest or participate in any manner or capacity in, any
entity or person which directly or indirectly engages in a Competitive Business.
(b) Exception. Subsection (a) above shall not preclude investments
in a corporation whose stock is traded on a public market and of which the
Employee owns less than five percent of the outstanding shares.
(c) Purpose of Covenant. It is agreed by both parties hereto that
the covenants contained in subsection (a) above are reasonable and necessary to
protect the confidentiality of the customer lists, trade secrets, and other
confidential information concerning the Company, acquired by the Employee.
(d) Specific Performance. The Employee and the Company recognize and
agree that (i) because of the nature of the businesses in which the Company and
its subsidiaries are engaged and because of the nature of the confidential
information that the Employee has acquired or will acquire with respect to the
businesses of the Company and its subsidiaries, it would be impracticable and
excessively difficult to determine the actual damages of the
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Company or its subsidiaries in the event that the Employee breaches any of the
covenants contained in subsection (a) above, and (ii) damages in an action at
law would not constitute reasonable or adequate compensation to the Company or
its subsidiaries in the event that the Employee breaches any of such covenants.
Accordingly, if the Employee commits any breach of such covenants or threatens
to commit any such breach, then the Company shall have the right to have the
covenants contained in subsection (a) above specifically enforced by any court
having equity jurisdiction, without posting bond or other security, it being
acknowledged and agreed by both parties hereto that any such breach or
threatened breach would cause irreparable injury to the Company and its
subsidiaries and that an injunction may be issued against the Employee. The
rights described in this subsection (d) shall be in addition to, and not in lieu
of, any other rights or remedies available to the Company under law or in
equity.
(e) Modification by Court. If any of the covenants contained in
subsection (a) above is determined to be unenforceable because of the duration
of such covenants or the area covered thereby, then the court making the
determination shall have the power to reduce the duration of such covenants
and/or the area covered thereby, and such covenants, in their reduced form,
shall be enforceable.
(f) Different Jurisdictions. If any of the covenants contained in
subsection (a) above is determined to be wholly unenforceable by the courts of
any domestic or foreign jurisdiction, then the determination shall not bar or in
any way affect the Company's right to relief in the courts of any other
jurisdiction with respect to any breach of such covenants in such other
jurisdiction. Such covenants, as they relate to each jurisdiction, shall be
severable into independent covenants and shall be governed by the laws of the
jurisdiction where a breach occurs.]
12. No Solicitation.
This Section 12 shall apply (a) during the Term and (b) during the
one-year period following the termination of the Employee's employment by the
Company for Cause or by the Employee's voluntary resignation without Good
Reason. While this Section 12 applies, the Employee shall not, directly or
indirectly, contact any employee of the Company or any of its subsidiaries to
solicit such employee to become an employee, partner or independent contractor
of the Employee or any other person.
13. Tax Effect of Payments.
(a) Excise Tax Restoration Payment. In the event that it is
determined that any payment, benefit provided or distribution of any type
(including, without limitation, the value of the acceleration of vesting of, or
payment in respect of, any options or other equity or equity-based awards, and
the payment of any amounts under the Company LTIP (or any other similar plan,
program or arrangement), by the Company, by any of its affiliates, by any one or
more trusts established by the Company (or any of its affiliates) for the
benefit of its employees, by any person who acquires ownership or effective
control of the Company or ownership of a substantial portion of the Company's
assets (within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended, and the regulations thereunder (the "Code")) or by any affiliate of
such person, to or for the benefit of the Employee, whether paid or payable or
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distributed or distributable pursuant to the terms of this Agreement, an
employment agreement or otherwise (the "Total Payments"), would be subject to
the excise tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest or penalties, are collectively referred to as
the "Excise Tax"), then the Employee shall be entitled to receive an additional
payment (an "Excise Tax Restoration Payment") in an amount that shall fund the
payment by the Employee of any Excise Tax on the Total Payments as well as all
income taxes imposed on the Excise Tax Restoration Payment, any Excise Tax
imposed on the Excise Tax Restoration Payment and any interest or penalties
imposed with respect to taxes on the Excise Tax Restoration Payment or any
Excise Tax.
(b) Determination by Auditors. All mathematical determinations and
all determinations of whether any of the Total Payments are "parachute payments"
(within the meaning of Section 280G of the Code) that are required to be made
under this Agreement, including all determinations of whether an Excise Tax
Restoration Payment is required, of the amount of such Excise Tax Restoration
Payment and of amounts relevant to the last sentence of subsection (c), shall be
made by the independent auditors retained by the Company most recently prior to
the relevant change in control and subject to the Employee's reasonable approval
(the "Auditors"), who shall provide their determination (the "Determination"),
together with detailed supporting calculations regarding the amount of any
Excise Tax Restoration Payment and any other relevant matters, both to the
Company and to the Employee within seven business days of the Employee's
termination date, if applicable, or such earlier time as is requested by the
Company or by the Employee (if the Employee reasonably believes that any of the
Total Payments may be subject to the Excise Tax). If the Auditors determine that
no Excise Tax is payable by the Employee, it shall furnish the Employee with a
written statement that such Auditors have concluded that no Excise Tax is
payable (including the reasons therefor) and that the Employee has substantial
authority not to report any Excise Tax on the Employee's federal income tax
return. If an Excise Tax Restoration Payment is determined to be payable, it
shall be paid to the Employee within five business days after the Determination
is delivered to the Company or the Employee. Any determination by the Auditors
shall be binding upon the Company and the Employee, absent manifest error.
(c) Underpayments and Overpayments. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Auditors hereunder, it is possible that Excise Tax Restoration Payments
may not be made by the Company that should be made ("Underpayments") or that
Excise Tax Restoration Payments will have been made by the Company which should
not have been made ("Overpayments"). In either event, the Auditors shall
determine the amount of the Underpayment or Overpayment that has occurred as
soon as possible. In the case of an Underpayment, the amount of such
Underpayment shall promptly be paid by the Company to or for the benefit of the
Employee. In the case of an Overpayment, the Employee shall, at the direction
and expense of the Company, take such steps as are reasonably necessary
(including the filing of returns and claims for refund), follow reasonable
instructions from, and procedures established by, the Company and otherwise
reasonably cooperate with the Company to correct such Overpayment; provided,
however, that (i) the Employee shall in no event be obligated to return to the
Company an amount greater than the net after-tax portion of the Overpayment that
the Employee has retained or has recovered as a refund from the applicable
taxing authorities and (ii) this provision shall be interpreted in a
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manner consistent with the intent of this agreement, which is to make the
Employee whole, on an after-tax basis, for the application of the Excise Tax, it
being understood that the correction of an Overpayment may result in the
Employee's repaying to the Company an amount which is less than the Overpayment.
14. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
(b) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(c) Whole Agreement; Modifications. No agreements, representations
or understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof. A modification of this Agreement shall be valid only if it is made in
writing and executed by both parties hereto. This Agreement shall be subject to
the requirements of any applicable banking law, regulation or order.
(d) Withholding Taxes. All payments and imputed payments made under
this Agreement shall be subject to reduction to reflect taxes required to be
withheld by law.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware (other than their choice-of-law provisions).
(f) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(g) Arbitration. Except as otherwise provided in Section 11, any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, shall be settled by arbitration in Honolulu, Hawaii, in accordance with
the rules of the American Arbitration Association then in effect. Discovery
shall be permitted to the same extent as in a proceeding under the Federal Rules
of Civil Procedure. Judgment may be entered on the arbitrator's award
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in any court having jurisdiction. All fees and expenses of the arbitrator and of
the Employee's legal counsel shall be paid (or promptly reimbursed to the
Employee) by the Company.
(h) No Assignment. The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this subsection (h) shall be void.
(i) Effective Date. This Agreement shall become effective on the
date of the consummation of the transaction(s) contemplated by the Merger
Agreement. Such date is herein referred to as the "Effective Date."
(j) D&O Indemnification. The Company shall indemnify the Employee to
the fullest extent permitted by applicable law against damages in connection
with his status or performance of duties as an officer or director of the
Company or any of its affiliates and shall maintain and cover the Employee under
customary and appropriate directors and officers liability insurance during the
Term and throughout the period of any applicable statute of limitations with
respect to any acts, omissions or other matters that may have occurred or arisen
during the Term.
(k) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the 7th day of May
2001, to be effective as of the Effective Date.
BANCWEST CORPORATION
By: /S/ XXXX X. XXXX
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Title: Vice Chairman & Chief Credit Officer
/s/ XXXXXX X. XXXX, XX.
---------------------------------------
XXXXXX X. XXXX, XX.
