AGREEMENT
AGREEMENT, dated this _________ day of ____________ 1998, between PBOC
Holdings, Inc. (the "Corporation") and People's Bank of California (the "Bank"),
a federally chartered savings bank, and J. Xxxxxxx Xxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and the
Bank (together, the "Employers");
WHEREAS, the Executive entered into an employment agreement with the Bank
dated as of October 21, 1996 (the "Initial Employment Agreement");
WHEREAS, the Corporation and the Bank have, as of the date set forth above,
established a Trust for the benefit of Executive and funded such Trust with the
amount which the Bank has agreed to pay to Executive under the Initial
Employment Agreement;
WHEREAS, the Bank and the Executive desire to terminate the Initial
Employment Agreement effective with the date of execution of this Agreement;
WHEREAS, the Employers desire to be ensured of the Executive's continued
active participation in the business of the Employers;
WHEREAS, the Employers desire to enter into a new agreement with the
Executive with respect to his employment by each of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Employers in the event that his
employment with the Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) BASE SALARY. "Base Salary" shall have the meaning set forth in
Section 4(a) hereof.
(b) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
(c) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean the occurrence of any of the following events subsequent
to the initial public offering of common stock of the Corporation: (i) the
acquisition of control of the Corporation as defined in 12 C.F.R. Section 574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. Section 574.3(c)(vii), or any successor to
such sections; (ii) an event that would be required to be reported in response
to Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant
to the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not any class of securities of the Corporation is
registered under the Exchange Act; (iii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing 25% or more of the combined voting power of the Corporation's then
outstanding securities; or (iv) during any period of three consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period. For purposes of this Agreement, no "Change in Control of the
Corporation" shall be deemed to occur with respect to purchases of additional
shares of the Corporation's Common Stock by the Trustees of the Estate of
Xxxxxxx Xxxxxx Xxxxxx or by BIL Securities (Offshore) Limited.
(d) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(f) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
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(g) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive within
twenty-four (24) months following a Change in Control of the Corporation based
on:
(i) Without the Executive's express written consent, the failure to
elect or to re-elect or to appoint or to re-appoint the
Executive to the office of Executive Vice President and Chief
Financial Officer of the Employers or a material adverse change
made by the Employers in the Executive's functions, duties or
responsibilities as Executive Vice President and Chief
Financial Officer of the Employers;
(ii) Without the Executive's express written consent, a reduction by
either of the Employers in the Executive's Base Salary as the
same may be increased from time to time;
(iii) The principal executive office of either of the Employers is
relocated outside of the Los Angeles County, California area
or, without the Executive's express written consent, either of
the Employers require the Executive to be based anywhere other
than an area in which the Employers' principal executive office
is located, except for required travel on business of the
Employers to an extent substantially consistent with the
Executive's present business travel obligations;
(iv) Any purported termination of the Executive's employment for
Disability or Retirement which is not effected pursuant to a
Notice of Termination satisfying the requirements of paragraph
(j) below; or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as
contemplated in Section 10 hereof.
(h) IRS. IRS shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Employers' termination
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of Executive's employment for Cause, which shall be effective immediately; and
(iv) is given in the manner specified in Section 11 hereof.
(j) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including early
retirement, generally applicable to their salaried employees.
2. TERMINATION OF INITIAL EMPLOYMENT AGREEMENT.
The Employers and the Executive hereby mutually understand and agree that
the Initial Employment Agreement, all obligations with respect thereto as well
as rights and entitlements inuring thereunder, shall be and with the execution
of this Agreement hereby is terminated, it being agreed that any provisions
regarding notice therein are hereby waived by the parties hereto. Subsequent to
the date hereof, the rights and obligations of the Employers and the Executive
with respect to the Executive's employment shall be as set forth in this
Agreement.
3. TERM OF EMPLOYMENT.
(a) The Employers hereby employ the Executive as Executive Vice President
and Chief Financial Officer of the Corporation and the Bank and the Executive
hereby accepts said employment and agrees to render such services to the
Corporation and the Bank on the terms and conditions set forth in this
Agreement. The term of employment under this Agreement shall be for three
years, commencing on the date of this Agreement. The term of this Agreement may
be extended for an additional year on the second annual anniversary of the date
of this Agreement, and on each annual anniversary thereafter, if the Boards of
Directors of the Employers so approve such extension, such that at any time the
remaining term of this Agreement shall be from one to two years. Prior to the
second annual anniversary of the date of this Agreement and each annual
anniversary thereafter, the Boards of Directors of the Employers shall consider
and review (after taking into account all relevant factors, including the
Executive's performance hereunder) an extension of the term of this Agreement,
and the term shall continue to extend each year if the Boards of Directors
approve such extension unless the Executive gives written notice to the
Employers of the Executive's election not to extend the term, with such written
notice to be given not less than thirty (30) days prior to any such anniversary
date. If the Boards of Directors of the Employers elect not to extend the term,
they shall give written notice of such decision to the Executive not less than
thirty (30) days prior to any such anniversary date. If any party gives timely
notice that the term will not be extended as of any annual anniversary date,
then this Agreement shall terminate at the conclusion of its remaining term.
References herein to the term of this Agreement shall refer both to the initial
term and successive terms.
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(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as may be consistent with his titles and
from time to time assigned to him by the Employers' Boards of Directors.
4. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay the Executive for his services
during the term of this Agreement at a minimum base salary of $_______ per year
("Base Salary"), which may be increased from time to time in such amounts as may
be determined by the Boards of Directors of the Employers and may not be
decreased without the Executive's express written consent. In addition to his
Base Salary, the Executive shall be entitled to receive during the term of this
Agreement such bonus payments as may be determined by the Boards of Directors of
the Employers.
(b) During the term of this Agreement, the Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. Nothing paid to the
Executive under any plan or arrangement presently in effect or made available in
the future shall be deemed to be in lieu of the salary payable to the Executive
pursuant to Section 4(a) hereof.
(c) During the term of this Agreement, the Executive shall be entitled to
paid annual vacation in accordance with the policies as established from time to
time by the Boards of Directors of the Employers. The Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Boards of Directors of the Employers.
(d) In the event the Executive's employment is terminated due to
Disability or Retirement, the Employers shall provide continued life, medical,
dental and disability coverage substantially identical to the coverage
maintained by the Employers for the Executive immediately prior to his
termination. Such coverage shall cease upon the expiration of the remaining
term of this Agreement.
(e) The Executive's compensation, benefits and expenses shall be paid by
the Corporation and the Bank in the same proportion as the time and services
actually expended by the Executive on behalf of each respective Employer.
5. EXPENSES. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Employers, including,
but not by way of limitation, automobile expenses and other traveling expenses,
subject to such reasonable documentation
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and other limitations as may be established by the Boards of Directors of the
Employers. If such expenses are paid in the first instance by the Executive,
the Employers shall reimburse the Executive therefor.
6. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and the Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is terminated by the
Employers for Cause or (ii) the Executive terminates his employment hereunder
other than for Disability, Retirement, death or Good Reason, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits for
any period after the applicable Date of Termination.
(c) In the event that the Executive's employment is terminated as a result
of Disability, Retirement or the Executive's death during the term of this
Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination, except as provided for in Section 4(d) hereof.
(d) In the event that (i) the Executive's employment is terminated by the
Employers for other than Cause, Disability, Retirement or the Executive's death
or (ii) such employment is terminated by the Executive (a) due to a material
breach of this Agreement by the Employers, which breach has not been cured
within fifteen (15) days after a written notice of non-compliance has been given
by the Executive to the Employers, or (b) for Good Reason, then the Employers
shall, subject to the provisions of Section 7 hereof, if applicable:
(A) pay to the Executive, a cash severance amount equal to the
Executive's Base Salary as in effect immediately prior to the Date of
Termination, multiplied by the number of years or fraction thereof
remaining in the term of this Agreement at the Date of Termination up to a
maximum of two (2) years ("Severance Pay"). Such Severance Pay shall be
paid in monthly installments beginning with the first business day of the
month following the Date of Termination and continuing for such number of
months or fraction thereof representing the remaining term of this
Agreement up to a maximum of two (2) years. The Boards of Directors, at
their sole discretion, may elect to pay the Severance Pay to Executive on a
more accelerated schedule than that set forth in the immediately preceding
sentence.
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(B) maintain and provide for a period ending at the earlier of (i)
the first anniversary of the Date of Termination or (ii) the date of the
Executive's full-time employment by another employer, at no cost to the
Executive, the Executive's continued participation in all group insurance,
life insurance, health and accident, disability and other employee benefit
plans, programs and arrangements in which the Executive was entitled to
participate immediately prior to the Date of Termination (other than any
stock option or other stock compensation plans or bonus plans of the
Corporation), provided that in the event that Executive's participation in
any such plan, program or arrangement is barred, the Corporation shall
arrange to provide Executive with benefits substantially similar to those
Executive was entitled to receive under such plans, programs and
arrangements prior to the Date of Termination.
7. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 6 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits payable by the Employers pursuant to Section 6
hereof shall be reduced, in the manner determined by the Executive, by the
amount, if any, which is the minimum necessary to result in no portion of the
payments and benefits payable by the Employers under Section 6 being
non-deductible to the Employers pursuant to Section 280G of the Code and subject
to the excise tax imposed under Section 4999 of the Code. The determination of
any reduction in the payments and benefits to be made pursuant to Section 6
shall be based upon the opinion of independent counsel selected by the
Employers' independent public accountants and paid by the Employers. Such
counsel shall be reasonably acceptable to the Employers and the Executive; shall
promptly prepare the foregoing opinion, but in no event later than thirty (30)
days from the Date of Termination; and may use such actuaries as such counsel
deems necessary or advisable for the purpose. Nothing contained herein shall
result in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment under any circumstances other than as
specified in this Section 7, or a reduction in the payments and benefits
specified in Section 6 below zero.
8. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise except as provided
in Section 6(d)(B) hereof, nor shall the amount of any such benefits be reduced
by any compensation earned by the Executive as a result of employment by another
employer after the Date of Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
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9. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
10. ASSIGNABILITY. The Employers may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Employers may hereafter merge or consolidate
or to which the Employers may transfer all or substantially all of its assets,
if in any such case said corporation, bank or other entity shall by operation of
law or expressly in writing assume all obligations of the Employers hereunder as
fully as if it had been originally made a party hereto, but may not otherwise
assign this Agreement or its rights and obligations hereunder. The Executive
may not assign or transfer this Agreement or any rights or obligations
hereunder.
11. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
The Corporation: Secretary
PBOC Holdings, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
The Bank: Secretary
People's Bank of California
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
The Executive: J. Xxxxxxx Xxxxxx
000 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
12. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
its behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
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13. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of
California.
14. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Employers to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.
15. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. REGULATORY ACTIONS. The following provisions shall be applicable to
the parties to the extent that they are required to be included in employment
agreements between a savings association and its employees pursuant to Section
563.39(b) of the Regulations Applicable to All Savings Associations, 12 C.F.R.
Section 563.39(b), or any successor thereto, and shall be controlling in the
event of a conflict with any other provision of this Agreement, including
without limitation Section 6 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers' affairs pursuant
to notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. Sections 1818(e)(3) and 1818(g)(1)), the
Employers' obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Employers may, in their discretion: (i) pay the Executive
all or part of the compensation withheld while their obligations under this
Agreement were suspended, and (ii) reinstate (in whole or in part) any of their
obligations which were suspended.
(b) If the Executive is removed from office and/or permanently prohibited
from participating in the conduct of the Employers' affairs by an order issued
under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. Sections
1818(e)(4) and (g)(1)), all obligations of the Employers under this Agreement
shall terminate as of the effective date of the order,
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but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.
(c) If the Employers are in default, as defined in Section 3(x)(1) of the
FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the Executive and the
Employers as of the date of termination shall not be affected.
(d) All obligations under this Agreement shall be terminated pursuant to
12 C.F.R. Section 563.39(b)(5) (except to the extent that it is determined that
continuation of the Agreement for the continued operation of the Employers is
necessary): (i) by the Director of the Office of Thrift Supervision ("OTS"), or
his/her designee, at the time the Federal Deposit Insurance Corporation ("FDIC")
enters into an agreement to provide assistance to or on behalf of the Employers
under the authority contained in Section 13(c) of the FDIA (12 U.S.C. Section
1823(c)); or (ii) by the Director of the OTS, or his/her designee, at the time
the Director or his/her designee approves a supervisory merger to resolve
problems related to operation of the Employers or when the Employers are
determined by the Director of the OTS to be in an unsafe or unsound condition,
but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.
19. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and the regulations
promulgated thereunder, including 12 C.F.R. Part 359. In the event of the
Executive's termination of employment with the Employers for Cause, all
employment relationships and managerial duties with the Employers shall
immediately cease regardless of whether the Executive remains in the employ of
the Corporation following such termination. Furthermore, following such
termination for Cause, the Executive will not, directly or indirectly, influence
or participate in the affairs or the operations of the Employers.
20. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Employers and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employers and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
PBOC HOLDINGS, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Attest: PEOPLE'S BANK OF CALIFORNIA
By:
-------------------------------- -------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
EXECUTIVE
By:
-------------------------------------
J. Xxxxxxx Xxxxxx
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