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EXHIBIT 10.9
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
ORIGINAL DATE: NOVEMBER 19, 1991
AMENDED AND RESTATED AS OF JANUARY 1, 1996
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into as of January 1, 1996 by and between FIRST COMMERCIAL
BANK, a California state-chartered banking corporation (the "Bank"), FIRST
COMMERCIAL BANCORP, INC., a Delaware corporation ("Bancorp"), and XXXXX X.
XXXXXXXX (hereinafter referred to as "Employee") and hereby amends, restates and
supersedes that certain Employment Agreement between the parties dated November
19, 1991 (the "1991 Agreement"):
W I T N E S S E T H:
WHEREAS, the parties hereto desire to amend certain of the terms and
conditions of the 1991 Agreement and to restate the 1991 Agreement as
hereinafter set forth;
WHEREAS, on June 1, 1994, Employee was appointed as Interim President
of Bancorp and the Bank;
WHEREAS, Employee has agreed to resign as the Interim President and
Executive Vice President of Bancorp as of the date of this Agreement;
WHEREAS, Bancorp has accepted the resignation of Employee as Interim
President and Executive Vice President of Bancorp as of the date of this
Agreement; and
WHEREAS, Bank, Bancorp and Employee hereby acknowledge and agree that
any oral representations, promises or agreements which may have been made with
respect to the grant of additional options to Employee under Bancorp's 1980
Amended and Restated Stock Option Plan are null and void and of no effect;
NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
A. The 1991 Agreement is amended and restated in its entirety as
follows:
1. EMPLOYMENT AND DUTIES. The Bank hereby employs Employee and
Employee hereby accepts employment with the Bank, upon the terms and conditions
hereinafter set forth. Employee is hereby employed as the President and Chief
Operating Officer of the Bank. Employee shall perform the customary duties of a
President and Chief Operating Officer of a California state-chartered bank and
such attendant duties as may, from time to time, be reasonably
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requested of Employee by the Board of Directors of the Bank (the "Board"),
and/or the Board of Directors of Bancorp.
2. EXTENT OF SERVICES
(a) Employee shall devote Employee's full time, ability and
attention to the business of the Bank during the term of this Agreement, and
shall neither directly nor indirectly render any services of a business,
commercial or professional nature to any other person, firm, corporation or
organization for compensation without the prior written consent of the Board.
(b) Nothing contained herein shall be construed to prevent
Employee from investing Employee's assets in any form or manner which does not
in any manner or for any amount of time interfere with Employee's performance of
services on behalf of the Bank.
3. TERM OF EMPLOYMENT. Subject to prior termination of this Agreement
as hereinafter provided, the Bank hereby employs Employee and Employee hereby
accepts employment with the Bank for a period of three (3) years commencing on
the date of this Agreement and terminating on December 31, 1998 (the "Employment
Term").
4. COMPENSATION AND BENEFITS. In consideration of Employee's services
to the Bank during the Employment Term, the Bank agrees to compensate Employee,
subject to such limitations as may exist under any federal or state banking law
or regulation, as follows:
(a) BASE COMPENSATION. The Bank shall pay or cause to be
paid to Employee a base compensation of $90,000.00 per year, payable in
conformity with the Bank's normal payroll procedures (the "Base Salary") and
prorated for any partial year in which this Agreement is in effect. Employee's
performance may be reviewed by the Boards from time to time during the
Employment Term, and Employee's Base Salary may be increased as the Boards, in
their sole discretion, may determine, but subject to such regulatory review
and/or approval as may be required by a presently or then existing written
agreement, as such term is defined in Section 325.2(x) of the FDIC regulations
(a "Written Agreement"), and such regulatory review and/or approval as may be
required by the Federal Reserve Bank of San Francisco ("FRB"), Federal Deposit
Insurance Corporation ("FDIC") or California State Banking Department ("SBD").
(b) DISCRETIONARY BONUS. As additional compensation,
Employee may receive an annual bonus to be determined in the sole discretion of
the Board and subject to such review and/or approval as may be required by a
presently or then existing Written Agreement, or as may be required by the FDIC
or SBD.
(c) PARTICIPATION IN BENEFIT PLANS. Employee shall be
entitled to participate in Bancorp's 1980 Amended and Restated Stock Option
Plan, Employee Stock Ownership Plan, Profit Sharing Plan and any additional,
similar or successor benefit plans of whatever type which may in the future be
made generally available to members of the Bank's and/or Bancorp's senior
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management. Employee acknowledges and agrees that no oral or other
representations, promises or agreements exist with respect to the grant to
Employee of additional options under the 1980 Amended and Restated Stock Option
Plan.
(d) GENERAL EXPENSES. The Bank shall, upon submission and
approval of written statements and bills in accordance with the then regular
procedures of the Bank, pay or reimburse Employee for any and all necessary,
customary and usual expenses incurred by him while traveling for or on behalf of
the Bank, and any and all other necessary, customary and usual expenses
(including entertainment) incurred by Employee for or on behalf of the Bank in
the normal course of business, as determined to be appropriate by the Bank.
(e) LIFE INSURANCE. For calendar year 1996, the Bank shall
provide Employee with a $500,000 term life insurance policy covering the life of
Employee and owned by the Bank. Purchase of said term life insurance policy
provided for herein is expressly conditioned upon employee being insurable at
reasonable rates, and the Bank agrees to pay premiums and maintain said
insurance policy during the calendar year 1996. Commencing on January 1, 1997,
Employee will be given an opportunity to continue the $500,000 policy with
Employee as the owner of the policy and solely at Employee's expense.
(f) OTHER INSURANCE. Employee shall be entitled to
participate in such group life insurance, health and long-term disability plans
as are provided by the Bank and/or Bancorp to their employees and/or senior
executives, with such terms, conditions and contributions as the Bank and/or
Bancorp generally provide their other employees and/or senior executives.
Employee shall have the right, in Employee's sole discretion, to designate the
beneficiary or beneficiaries of any such insurance.
(g) VACATION. Employee shall be entitled to four (4) weeks'
paid vacation leave per year, prorated for any partial calendar year in which
this Agreement is in effect. Such vacation leave shall be taken at such time or
times as mutually agreed upon by Employee and the Board and in accordance with
the Bank's vacation leave policy, provided, that at least two (2) weeks of such
vacation shall be taken consecutively. Employee acknowledges that the
requirement of two (2) consecutive weeks of vacation is required by sound
banking practice. As of November 1, 1995, Employee has accrued and unused
vacation time of 210 hours, for which Employee shall be paid $15,791.00 upon
execution of this Agreement. Commencing on January 1, 1996, unused vacation time
may be carried over by Employee from year to year, provided, however, that
Employee shall accrue no additional vacation time at any time that the Employee
has accrued and unused vacation time of four (4) weeks. Notwithstanding anything
to the contrary contained in this Agreement, upon termination of this Agreement
pursuant to Sections 5(A), 5(C), 5(D) OR 5(E), Employee shall be entitled to
receive payment for any accrued and unused vacation days accumulated in
accordance with this Section 4(g) after January 1, 1996 through the date of
termination, based upon Employee's then current base salary.
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(h) OTHER BENEFITS. Employee shall be entitled to
participate during the Employment Term in such other benefits of the Bank and/or
Bancorp as the Bank and/or Bancorp now or hereafter shall provide for its
employees and/or senior executives generally.
5. TERMINATION OF AGREEMENT.
This Agreement may be terminated with or without cause during the
Employment Term in accordance with this Section 5. In the event of such
termination, Employee shall be released from all obligations under this
Agreement, except that Employee shall remain subject to Sections 8, 10, 15, 17
and 21, and the Bank shall be released from all obligations under this
Agreement, except as otherwise provided in this Section 5 and Sections 4, 15, 17
and 21.
(a) EARLY TERMINATION BY THE BANK WITHOUT CAUSE. This
Agreement and Employee's employment may be terminated by the Bank without cause,
for any reason whatsoever, in the sole, absolute and unreviewable discretion of
the Bank, upon 30 days' written notice by the Board to Employee. All other
benefits and compensation under this Agreement shall be discontinued as of the
date of termination, except that Employee shall be entitled to receive (1) a
lump sum cash severance payment in an amount equal to $235,000.00, less any
amounts of base salary and bonus paid to Employee from January 1, 1996, through
the date of termination, (2) declared but unpaid bonus compensation, if any,
provided pursuant to Section 4(b) hereof, (3) the insurance coverage provided
pursuant to Section 4(f) hereof at the Bank' expense for a period of up to six
(6) months or Employee's employment elsewhere, whichever occurs earlier, and (4)
any payments in respect of unused and accrued vacation days pursuant to Section
4(g) hereof (the payments and benefits due to Employee under this Section 5(a)
being hereinafter referred to as the "Section 5(a) Payments"). Such Section 5(a)
Payments shall constitute liquidated damages in lieu of any and all claims by
Employee against the Bank and/or Bancorp, and shall be in full and complete
satisfaction of any and all rights which Employee may enjoy hereunder and is
expressly conditioned upon receipt by the Bank of a full and unconditional
release from Employee of any and all liability of either of the Bank and/or
Bancorp or any of their affiliates arising out of this Agreement or out of the
employment relationship between Employee and the Bank.
(b) EARLY TERMINATION BY THE BANK FOR CAUSE. This Agreement
and Employee's employment may be terminated for cause by the Bank upon written
notice to Employee. Employee shall be entitled to receive his lump sum cash
severance payment in an amount equal to $235,000.00 less any amount of Base
Salary and bonus paid to Employee from January 1, 1996 through the date of
termination. Employee understands and agrees that his satisfactory performance
of this Agreement requires conformance with reasonable standards of diligence,
competence, skill, judgment and efficiency of a person holding the position of
President of a commercial bank similar to the Bank and as prescribed by
California and federal banking laws and regulations, and that failure to conform
to such standards is cause for termination of this Agreement by the Bank.
Termination for cause pursuant to this Section 5(b) shall include, but not be
limited to, Employee's personal dishonesty (including knowingly violating any
Bylaw or Policy of the Board), breach of fiduciary duty involving personal
profit, willful violation of any
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law, rule, regulation (other than a traffic violation or similar offense),
failure to qualify at any time during any Employment Term for a surety bond as
described in Section 7 of this Agreement, and dismissal of Employee by Bank as
required to comply with any final cease-and-desist order or written agreement
with any state or federal bank regulatory authority which requests or orders
Employee's dismissal or limits Employee's employment duties. Termination for
cause by the Bank shall not constitute a waiver of any remedies which may
otherwise be available to the Bank under law, equity, or this Agreement.
(c) EARLY TERMINATION BY EMPLOYEE. Employee may terminate
this Agreement upon thirty (30) days' written notice to the Bank. Employee shall
not be entitled to receive compensation or other benefits for any period after
early termination by Employee, except as otherwise provided by Section 4(g)
hereof.
(d) EARLY TERMINATION UPON DISABILITY. If during any
Employment Term Employee becomes unable to perform his duties hereunder because
of a physical or mental condition and has exhausted the medical leave provided
to him under the Family Medical Leave and Family Rights Acts, the Bank may at
its option terminate this Agreement. Employee shall be entitled to $235,000.00
less all amounts of Base Salary and bonus paid to Employee from January 1, 1996,
through the date of termination, and insurance coverage as provided in Sections
4(a), 4(e) and 4(f) of this Agreement for the period of any medical leave prior
to the termination of this Agreement, but not beyond the date specified herein
for any Employment Term, plus declared but unpaid bonus, if any, as described in
Section 4(b) hereof, and accrued but unused vacation leave pursuant to Section
4(g) hereof; provided, however, that Base Salary as provided in Section 4(a)
shall not be paid for more than a total of sixty-five (65) days due to medical
leave during any [any calendar year of the] Employment Term. All compensation
and benefits provided for under this Agreement shall cease as of the date of
termination, except that Employee shall be entitled to receive payment for any
accrued but unused vacation leave pursuant to Section 4(g) hereof and the Bank
shall use reasonable efforts to assure that Employee shall have the option to
assume such insurance coverage at his individual expense from and after
termination of insurance coverage under this Section 5(d).
(e) MERGER OR DISSOLUTION. In the event of a merger in which
the Bank and/or Bancorp is not the surviving or resulting entity; in the event
of a transfer of all or substantially all of the assets of the Bank and/or
Bancorp; or in the event of any other reorganization in which there is a change
in ownership of the outstanding shares of the Bank and/or Bancorp where more
than fifty percent (50%) of the outstanding shares of the Bank and/or Bancorp
are transferred to any other partnership, corporation, trust or business entity
("change in control") not resulting from conservatorship, receivership or
insolvency of the Bank and/or Bancorp; or in the event of the dissolution of the
Bank and/or Bancorp, this Agreement shall not be terminated, but instead, the
Bank shall use reasonable efforts to provide that the surviving or resulting
corporation or the transferee of the Bank's and/or Bancorp's assets, if other
than the Bank and/or Bancorp, is bound by, and shall have the benefit of, the
provisions of this Agreement; except in the event of dissolution of the Bank
and/or Bancorp, which shall result in Section 5(a) Payments, so long as
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the Bank has funds to make such payments, the making of such payments is not
limited or prohibited by any law or regulation, and the making of such payments
is without liability on the part of the directors of the Bank and/or Bancorp. In
the event, however, that such surviving or resulting corporation or transferee,
other than the Bank and/or Bancorp, elects to terminate this Agreement, Employee
shall receive, in consideration of the termination of this Agreement, the
Section 5(a) Payments from such surviving or resulting corporation or
transferee. Notwithstanding anything contained in this Section 5(e), or any
other section of this Agreement to the contrary, if any compensation or benefit
payment shall be considered in the aggregate to be an "excess parachute payment"
as that term is defined in Section 280G of the Internal Revenue Code of 1986, as
amended, all such compensation or benefits may be reduced, in the sole
discretion of the Bank, to the extent required to prevent such compensation or
benefits, in the aggregate, from being considered an "excess parachute payment."
(f) DEATH DURING EMPLOYMENT. If Employee dies during the
term hereof, this Agreement shall terminate and Employer shall pay to the Estate
of the Employee $235,000.00 less any amount of Base Salary or bonus paid to
Employee from January 1, 1996, through the date of death. All other benefits
under this Agreement shall terminate except this provision shall not be
construed nor operate so as to prejudice or forfeit the rights of any
beneficiary or beneficiaries of any life insurance policy on the life of
Employee obtained pursuant to Section 4(e) hereof.
6. SUSPENSION DURING INVESTIGATION. In the event the Superintendent
of the SBD of California ("Superintendent"), any federal banking agency, or any
other party formally charges that Employee has committed any act which would
allow termination of the Agreement pursuant to Section 5(b) above, the Bank may,
at its option, immediately suspend Employee without pay pending an investigation
of charges. Notwithstanding the foregoing in the case of a suspension of
Employee following a charge made by anyone other than the Superintendent or a
federal banking agency, the Bank may only suspend Employee without pay for a
period not in excess of thirty (30) days; provided, however, that this provision
shall not preclude or limit the Bank from suspending Employee for a longer
period with pay.
7. SURETY BOND. Employee agrees that he will furnish all information
and take any other steps necessary to enable the Bank to obtain or maintain a
fidelity bond conditional on the rendering of a true account by Employee of all
moneys, goods, or other property which may come into the custody, charge or
possession of Employee during the term of Employee's employment. The surety
company issuing the bond and the amount of the bond must be acceptable to the
Bank and satisfy all banking laws and regulations. All premiums on the bond are
to be paid by the Bank. If Employee cannot qualify for a surety bond at any time
during the term of this Agreement, the Bank shall have the option to terminate
this Agreement immediately, which shall constitute a termination for cause as
defined in Section 5(b) hereof.
8. PRINTED MATERIAL. All written or printed materials which shall
include, but not be limited to, computer software, programs and files, used by
Employee in performing duties for the Bank are, and shall remain, the property
of the Bank, provided that any materials which belonged
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personally to Employee prior to his employment with the Bank are, and shall
remain, the property of Employee. Upon termination of Employee's employment with
the Bank, Employee shall return such applicable written or printed materials to
the Bank.
9. MORAL CONDUCT. Employee agrees to conduct himself at all times
with due regard to public conventions and morals.
10. DISCLOSURE OF INFORMATION. Employee recognizes and acknowledges
that the Bank and Bancorp possess information concerning their business affairs
and methods of operation which constitutes valuable, confidential, and unique
assets of their business and that of their affiliates ("Proprietary
Information"). Employee shall not, at any time before or after termination of
this Agreement, disclose to anyone any Proprietary Information. For purposes of
this Section 10, Proprietary Information includes all information regarding
products, services, processes, know-how, customers, suppliers, product and/or
service development, business and capital plans, research, finances, marketing,
pricing, costs and any other confidential matters relating to the Bank, Bancorp
or any of their affiliates. Employee recognizes and acknowledges that all
financial information concerning any of the Bank' customers, products or
financial results is strictly confidential, and Employee shall not, at any time
before or after termination of this Agreement, disclose to anyone any such
information or any part thereof, for any reason or purpose whatsoever except to
the extent that such information is already otherwise publicly available or to
the extent such disclosure is required by Employee in order to comply with
judicial process.
11. NON-COMPETITION BY EMPLOYEE. Employee shall not, during the
Employment Term, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, shareholder, corporate officer, director,
or in any other individual or representative capacity, engage or participate in
any competing bank or financial institution or financial services business
without the prior written consent of the Board.
12. NOTICES. Any notices to be given hereunder by either party to the
other may be effected in writing either by personal delivery or by mail,
registered or certified, postage prepaid with return receipt requested. Notices
to the Bank shall be given to the Bank at its then current principal office, c/o
Chairman of the Board of Directors. Notices to Employee shall be sent to
Employee's then current personal residence. Notices delivered personally shall
be deemed communicated as of actual receipt; mailed notices shall be deemed
communicated as of five (5) days after mailing.
13. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by the Bank, including but not limited to the 1991
Agreement and any representations, promises or agreements with respect to the
grant of additional options to Employee under Bancorp's 1980 Amended and
Restated Stock Option Plan except as provided in Section 4(c) hereof, and
contains all of the covenants and agreements between the parties with respect to
such employment and all benefits appertaining thereto. Each party to this
Agreement acknowledges that no representations,
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inducements, promises or agreements, oral or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement or promise not contained in this
Agreement shall be valid and binding. Any modification of this Agreement will be
effective only if it is in writing signed by all parties to the Agreement.
14. SEVERABILITY. In the event that any term or condition contained in
this Agreement shall, for any reason, be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or non-enforceability shall not affect any other term or
condition of this Agreement, but this Agreement shall be construed as if such
invalid or illegal or unenforceable term or condition had never been contained
herein.
15. CHOICE OF LAW AND FORUM. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, except to the
extent preempted by the laws of the United States. Any action or proceeding
brought upon, or arising out of, this Agreement or its termination shall be
brought in a forum located within the State of California, and Employee hereby
agrees to be subject to service of process in California.
16. WAIVER. The parties hereto shall not be deemed to have waived any
of their respective rights under this Agreement unless the waiver is in writing
and signed by such waiving party. No delay in exercising any rights shall be a
waiver nor shall a waiver on one occasion operate as a waiver of such right on a
future occasion.
17. INDEMNIFICATION. The Bank and Bancorp shall indemnify Employee, to
the maximum extent permitted under the Bylaws of the Bank and Bancorp and
governing laws and regulations, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by Employee in connection with any threatened or pending action, suit or
proceeding to which Employee is made a party by reason of his position as an
officer or agent of the Bank and/or Bancorp or by reason of his service at the
request of the Bank and/or Bancorp, if Employee acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
corporations. If available at rates determined by the Bank, in its sole
discretion, to be reasonable, the Bank shall endeavor to apply for and obtain
Directors' and Officers' Liability Insurance to indemnify and insure the Bank
and Bancorp and Employee from such liability or loss. If Employee engages in any
of the conduct which constitutes cause for termination under Section 5(b) hereof
and the Bank or Bancorp as a result incurs any cost, loss, liability, expenses,
or damages, then Employee shall indemnify the Bank and Bancorp for any and all
such costs, losses, liability, expenses, and damages.
Notwithstanding the foregoing, in any administrative proceeding or
civil action initiated by any federal banking agency, the Bank and/or Bancorp
may only reimburse, indemnify or hold harmless Employee if the Bank and Bancorp
are in compliance with any applicable statute, rule, regulation or policy of the
Federal Deposit Insurance Corporation, Federal Reserve Board, or the California
State Banking Department regarding permissible indemnification payments.
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18. ASSIGNMENT. Neither this Agreement nor any of the rights or
benefits hereunder shall be subject to execution, attachment or similar process,
nor may this Agreement or any rights or benefits hereunder be assigned,
transferred, pledged or hypothecated without the written consent of both parties
hereto, except as provided in Section 5(e) hereof.
19. AGREEMENT SUBJECT TO REGULATORY APPROVALS. This Agreement is
subject to review by and receipt of approval from the applicable state and
federal bank regulatory agencies of Employee as President and Chief Operating
Officer of the Bank. The failure of the foregoing conditions shall render this
entire Agreement null and void.
20. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience and ready reference only and are not a part of
this Agreement and shall not be used in the construction or interpretation
thereof.
21. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or breach of this Agreement, shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction. There shall be three arbitrators, one
to be chosen directly by each party, and the third arbitrator to be selected by
the two arbitrators so chosen. Each party shall pay the fees of the arbitrator
he or it selects and of his or its own attorneys, and the expenses of his or its
witnesses and all other expenses connected with representing his or its case.
Other costs of the arbitration, including the cost of any record or transcripts
of the arbitration, administrative fees, the fee of the third arbitrator, and
all other fees and costs, shall be borne equally by the parties.
Executed on the day and year first-above written.
FIRST COMMERCIAL BANK: EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxxxxx
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By: Xxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxx
Chief Executive Officer
FIRST COMMERCIAL BANCORP, INC.
/s/ Xxxxxx X. Xxxxx, Xx.
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By: Xxxxxx X. Xxxxx, Xx.
Chairman of the
Board of Directors
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