Exhibit 10.1
AMENDMENT NO. 2
TO EMPLOYMENT AGREEMENT
THIS AMENDMENT is made and entered into by and between CALIFORNIA FEDERAL
BANK, a Federal Savings Bank (the "Company"), having a business address at 000
Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, and Xxxxxx X. Xxxx (the
"Executive"), having a mailing address at 000 Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000.
R E C I T A L S
WHEREAS, the Company and the Executive entered into that certain Employment
Agreement dated as of January 1, 2000 and subsequently amended on March 19,
2002 (the "Agreement");
WHEREAS, the Company is a wholly owned indirect subsidiary of Golden State
Bancorp Inc. ("GSB");
WHEREAS, GSB is concurrently entering into an Agreement and Plan of Merger
(the "Merger Agreement") with Citigroup Inc. ("Parent") and Mercury Merger Sub,
Inc., a wholly owned direct subsidiary of Parent; and
WHEREAS, concurrently with the execution of the Merger Agreement, and as an
inducement to Parent to enter into the Merger Agreement, the Company and the
Executive wish to amend the Agreement as hereinafter provided;
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, the Company and the Executive agree that the Agreement shall be
amended as follows:
I.
1. Section 12 of the Agreement is hereby deleted and replaced in its
entirety with the following new Section 12:
12. No Competition. (a) For a period of twenty-four (24) months after
the Closing Date (as defined in the Merger Agreement), the Executive shall
not become a more than a 5% equity owner of, or an employee or consultant
to, any retail bank or thrift that has a retail banking presence in the
State of Nevada or the State of California (a "Competitive Business").
Notwithstanding anything to the contrary contained herein, nothing herein
shall prohibit the Executive from being a more than 5% owner of a
Competitive Business (provided that aggregate deposits of such Competitive
Business in the States of Nevada and California (together with the aggregate
amount of deposits in the States of Nevada and California of any other
Competitive Business that the Executive has a more than 5% ownership
interest) do not exceed $1 billion). In the event the Executive becomes an
owner of a retail banking business as permitted by this Section 12 which
institution has a retail banking presence in California or Nevada, the
Executive agrees that he will not substantially increase the scope of those
retail banking operations in California or Nevada during the above
referenced twenty-four (24) month period after the Closing Date.
(b) Notwithstanding anything to the contrary contained in paragraph (a),
the Executive shall not be deemed to have violated the restrictions
contained therein if the Executive acquires a Competitive Business as a part
of an acquisition, by joint venture, merger, or other business combination,
of the assets of, or the majority of the voting interests in, another person
(a "Target Business") if (i) such Competitive Business's total deposits
(based on the most recently audited balance sheet of the Target Business
prior to entering into a definitive agreement with respect to the
acquisition of the Target Business) in the States of Nevada and California
do not exceed 20% of the total deposits of the Target Business (calculated
as provided above) and (ii) the aggregate amount of deposits of such
Competitive Business in the States of Nevada and California (together with
the aggregate amount of deposits in the States of Nevada and California of
any other Competitive Business that the Executive has a more than 5%
ownership interest) do not exceed $1 billion.
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(c) The Executive agrees that if a court of competent jurisdiction
determines that the length of time or any other restriction, or portion
thereof, set forth in this Section 12 is overly restrictive and
unenforceable, the court may reduce or modify such restrictions to those
which it deems reasonable and enforceable under the circumstances, and as so
reduced or modified, the parties hereto agree that the restrictions of this
Section 12 shall remain in full force and effect. The Executive further
agrees that if a court of competent jurisdiction determines that any
provision of this Section 12 is invalid or against public policy, the
remaining provisions of this Section 12 and the remainder of this Agreement
shall not be affected thereby, and shall remain in full force and effect.
(d) The Executive acknowledges that the restrictions imposed by this
Agreement are legitimate, reasonable and necessary to protect the Company's
investment in its businesses and the goodwill thereof. The Executive
acknowledges that the scope and duration of the restrictions contained
herein are reasonable in light of the time that the Executive has been
engaged in the banking business with the Company, the Executive's reputation
in the markets for the Company's businesses and the Executive's relationship
with the suppliers, customers and clients of the Company. The Executive
further acknowledges that the restrictions contained herein are not
burdensome to the Executive in light of the consideration paid therefor and
the other opportunities that remain open to the Executive. Moreover, the
Executive acknowledges that he has other means available to him for the
pursuit of his livelihood.
2. Section 13 of the Agreement is hereby deleted in its entirety and
replaced by the following:
The Executive shall not, from and after the Closing Date, (a) until the
third anniversary of the Closing Date, use or disclose to others any of the
customer lists of the Company or its subsidiaries in connection with retail
banking or otherwise, (b) until the second anniversary of the Closing Date,
solicit, directly or indirectly, for employment, any of the officers or
employees of the Company or its subsidiaries as of the Closing Date, for so
long as they remain employees of the Company or its subsidiaries or their
respective successors or permitted assigns, and (c) until the second
anniversary of the Closing Date, request, induce or attempt to influence any
distributor or supplier of goods or services to the Company or any
subsidiary thereof as of the Closing Date to curtail or cancel any business
they may transact with the Company or such subsidiary thereof or their
respective successors or permitted assigns for so long as such distributor
or supplier continues in such capacity with the Company or its subsidiaries
or their respective successors or permitted assigns.
3. Section 17 of the Agreement is hereby amended by adding the following new
Subsection "(b)" to read as follows and subsequent Subsections are renumbered
accordingly:
(b) Third-Party Beneficiaries. This Agreement shall inure to the benefit
of and be enforceable by the parties hereto and Parent. Notwithstanding any
other provision herein to the contrary, unless the Merger Agreement is
terminated in accordance with its terms, the Company and the Executive
hereby agree not to enter into any further amendment of this Agreement
without the prior written consent of Parent.
II.
Except as expressly provided herein, the Agreement shall remain in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have signed this Amendment as of May
21, 2002.
CALIFORNIA FEDERAL BANK, A
FEDERAL SAVINGS BANK
By: -----------------------------
Name: ---------------------------
Title: ---------------------------
-------------------------------------
Xxxxxx X. Xxxx
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