EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is entered into
and made effective as of January 1, 1998, by and between GBC
Bancorp, a California corporation (hereinafter "GBC"), General
Bank, a California corporation (hereinafter "Bank") and Li-Xxx Xx
(hereinafter "Executive").
RECITALS
A. Pursuant to that certain Employment Agreement dated May 5,
1982, as subsequently amended effective August 15, 1984,
February 5, 1987 and December 19, 1991 (hereinafter "Prior
Agreement"), GBC and the Bank have each employed Executive in the
positions of Chairman of the Board, President and Chief Executive
Officer.
B. Executive's term of employment under the Prior Agreement
would otherwise run through September 9, 1998 and, thereafter,
would be renewable, at Executive's option, for an additional
twelve (12)-month period.
C. Executive desires to enter into a new agreement of
employment with GBC and the Bank and GBC and the Bank each wish
to continue Executive's employment in the positions of Chairman
of the Board and Chief Executive Officer.
NOW, THEREFORE, in consideration of the above recitals, the
mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. EMPLOYMENT
1.1 Term of Agreement: Except as provided in
Paragraph 20, the Prior Agreement is superceded in its
entirety; provided, however, that: (i) the Bank shall
pay to Executive all amounts accrued under the prior
Agreement to the date hereof; and (ii) any causes of
action, claim or liability of GBC, the Bank or
Executive to any of the others accrued or to accrue due
to any breach, omission, obligation or other duties
arising under the prior Agreement shall survive as
fully as though the prior Agreement was still in full
force and effect. Subject to the terms and conditions
of this Agreement, GBC and the Bank each hereby employ
Executive, and Executive hereby accepts the employment
hereunder for the five (5)-year period to begin
January 1, 1998 and ending on the earlier to occur of
December 31, 2002 or the election of either or both of
the parties hereto to exercise the termination
provisions herein. Executive shall initially serve in
the position of Chairman of the Board (hereinafter
"Chairman"), President and Chief Executive Officer
(hereinafter "CEO") of GBC and the Bank, respectively,
but shall resign as President of GBC and the Bank,
respectively, on or before April 17, 1998. Executive
shall continue to serve as Chairman and CEO of GBC and
the Bank, respectively through December 31, 2000 and,
thereafter, shall continue in the position of Chairman
of GBC and the Bank, respectively, for the remaining
term of his employment hereunder.
1.2 Responsibilities: Executive, subject to the
direction and control of the respective Board of
Directors of GBC and the Bank (hereinafter "Board" or
"the respective Boards", whichever is applicable),
shall devote his full time, attention and energies, to
the business and affairs of GBC and the Bank and shall
promote the best interest and welfare of GBC and the
Bank. Executive shall have general supervision of and
responsibility for the direction and control of the
other officers and personnel of GBC and the Bank and
the daily business of GBC and the Bank, including, but
not limited to, loans, discounts, investments,
administrative services, xxxxxxxx, new business
development, operations, credit analysis, collections,
bookkeeping, safe deposit, personnel and such other
matters as the respective Boards require him to
supervise. It shall be Executive's particular business
to develop and manage the respective businesses of GBC
and the Bank, and to take such steps as he may deem to
be necessary or desirable to cause GBC and the Bank to
be sound financial institutions and to be so regarded
in the community.
1.3 Rules and Regulations: Executive shall promptly
obey and comply with all reasonable and applicable
rules, regulations and orders that may from time to
time be issued by the respective Boards.
1.4 Succession Plan: Subject to the direction and
control of the respective Boards, Executive shall
implement the plan, as adopted by the respective
Boards, to provide for the selection of his successor
as CEO of GBC and/or the Bank, respectively, and the
gradual transfer of his responsibilities and duties to
his designated successor.
1.5 Other Employment: Except as specifically provided
herein, Executive shall not, during the term hereof, be
interested directly or indirectly, in any manner, as
partner, officer, director, one percent (1%) or more
stockholder, advisor, employee or in any other capacity
in any other business similar to the business of GBC,
the Bank or any affiliates of GBC or the Bank;
provided, however, that nothing herein shall be deemed
to prevent or limit the right of Executive to invest in
his private investment activities so long as they are
not in competition with the business of GBC, the Bank
or any affiliates of GBC and the Bank and are performed
on his own time. Notwithstanding the foregoing,
Executive shall have the right to act as an advisor to
other persons and to undertake three (3) separate
directorships with three (3) persons (other than
affiliates of GBC and the Bank) provided that such
advisorships and directorships do not interfere with or
adversely affect Executive's duties with GBC or the
Bank.
2. COMPENSATION
2.1 Base Compensation: In exchange for the services
to be rendered by Executive hereunder during his
employment, GBC and the Bank shall pay Executive, with
respect to each fiscal year, an aggregate annual base
salary of $402,336.00, payable in equal monthly
installments. Such annual base salary shall be
adjusted on January 1, 1999 and on each anniversary
thereof by a percentage increase equal to three percent
(3%) over the increase in the Consumer Price Index for
all urban consumers in the Los Angeles-Long Beach-
Anaheim Metropolitan area (1967=100) as it existed on
the final day of the preceding calendar year when
compared to the first day of that year.
Executive authorizes GBC and the Bank to deduct
from all compensation paid to Executive under this
Agreement (including any incentive compensation paid to
Executive pursuant to Paragraph 2.2, below), certain
legally required withholding amounts, including but
without limitation, social security, unemployment,
disability and income tax withholding.
2.2 Incentive Compensation:
a. Promptly following receipt of the Bank's audited annual
financial statements, the Bank shall pay Executive an incentive
compensation award payable in a lump sum and computed as follows:
(i) three percent (3%) of any amount by which the tax equivalent
income of the Bank before executive incentive compensation awards
and income taxes exceeds ten percent (10%) of the net equity of
the Bank at the beginning of that fiscal year but does not exceed
fifteen percent (15%) of such net equity; and (ii) four percent
(4%) of any amount by which such tax equivalent income exceeds
fifteen percent (15%) of such net equity.
b. GBC shall cause each subsidiary (other than the Bank),
promptly following receipt of such subsidiary's audited annual
financial statements, to pay Executive an incentive compensation
award payable in a lump sum and computed as follows: (i) three
percent (3%) of any amount by which the tax equivalent income of
such subsidiary before executive incentive compensation awards
and income taxes exceeds ten percent (10%) of the net equity of
the subsidiary at the beginning of that fiscal year but does not
exceed fifteen percent (15%) of such net equity; and (ii) four
percent (4%) of any amount by which such tax equivalent income
exceeds fifteen percent (15%) of such net equity; provided,
however, that in the event any subsidiary of GBC shall realize a
net loss for any fiscal year, such loss shall not be included in
the computation of the tax equivalent income of the Bank or any
other subsidiary of GBC for that fiscal year for the purpose of
computing any incentive compensation award of Executive under
this Paragraph 2.2.
c. Commencing with the fiscal year ending December 31,
2000, the aggregate incentive compensation payable to Executive
shall be subject to the following maximum dollar limitations:
For Fiscal Year Maximum Cash Award
2000 $1,500,000
2001 400,000
2002 400,000
2.3 Business Expenses: Executive is authorized to
incur reasonable business expenses for promoting the
business including expenditures for entertainment,
gifts, and travel. Executive shall be reimbursed from
time to time for all such business expenses provided
that:
(a) Each such expenditure is of a nature so as to qualify as a
proper deduction on the Federal and State income tax returns of
GBC; and
(b) Executive provides GBC and/or the Bank with adequate records
and other documentary evidence as required by Federal and State
statutes and regulations in order to substantiate each such
expenditure as an income tax deduction.
2.4 Stock Option: Executive's Non-Qualified Stock
Option Agreement dated December 19, 1991 and
Contingency Stock Option Agreement dated July 8, 1988
shall remain in full force and effect under this
Agreement as fully as though the prior Agreement were
still in full force and effect. Subject to the
approval of the shareholders of GBC to any requisite
amendment to GBC's Amended and Restated 1988 Stock
Option Plan, Executive's Non-Qualified Stock Option
Agreement shall be amended, in the form attached hereto
as Exhibit "A", to extend the exercise period during
which Executive's beneficiaries or the executor of
Executive's estate may exercise the subject option (to
the extent then vested) in the event of Executive's
death
to three (3) years and, to also extend the
exercise period during which Executive may exercise the
subject option following (i) the termination of his
employment on account of disability as provided in
Paragraph 4 hereof, to two (2) years and (ii) the
termination of his employment upon expiration of its
stated term hereunder on December 31, 2002, other than
for cause as provided for in Paragraph 8 hereof, to
five (5) years; provided, however, that such extended
exercise period shall cease immediately upon
Executive's failure to comply with the noncompetition
covenant set forth in Paragraph 9.4 hereof. The Board
of GBC hereby agrees to unanimously recommend such
amendments to the shareholders of GBC at the next
annual meeting of shareholders. In the event that any
such amendment is not approved by the shareholders of
GBC, the amendment to each of the Amended and Restated
1988 Stock Option Plan and Executive's Non-Qualified
Stock Option Agreement dated December 19, 1991 shall be
null and void ab initio.
2.5 Stock Retention Program: Commencing with the
fiscal year ending December 31, 1999, Executive may
elect, in his sole discretion, to receive up to one-
half (1/2) of his incentive compensation payable
pursuant to Paragraph 2.2 hereof for any fiscal year in
shares of GBC common stock. In such event, Executive
shall be entitled to receive shares of GBC common stock
equal in value, determined as of the payment date, to
one hundred fifty percent (150%) of the cash award
which otherwise would have been payable to Executive.
The bonus shares representing the additional fifty
percent (50%) shall be subject to a two (2)-year
holding period restriction and shall be endorsed with a
legend in the form attached hereto as Exhibit "B". GBC
shall grant to Executive each fiscal year during the
initial three (3) years of his employment hereunder,
one share of GBC common stock for every twenty (20) (i)
shares of GBC common stock, acquired by Executive
solely through exercise of his Non-Qualified Stock
Option or stock grants/purchases pursuant to this
Paragraph 2.5 (but excluding shares acquired under
Executive's Contingency Stock Option and shares which
are subject to a holding period restriction pursuant to
this Paragraph 2.5) and/or (ii) vested option shares
under Executive's Non-Qualified Stock Option (even
though not yet exercised by Executive), which Executive
holds during the full term of such year. Such shares
so granted pursuant to the immediately preceding
sentence in the aggregate shall not exceed 50,000. An
equitable adjustment to the foregoing 50,000 limit
shall be made by the Board of GBC upon changes in GBC
common stock through a reorganization, merger,
recapitalization, reclassification, stock split, stock
dividend, stock consolidation or otherwise. Such
shares so granted to Executive shall be subject to a
five (5)-year holding period restriction and shall be
endorsed with a legend in the form attached hereto as
Exhibit "B".
2.6 Automobile: During the employment term hereunder,
the Bank shall furnish to Executive an automobile for
use in connection with his duties to the Bank hereunder
and shall pay in full all costs of the operation
thereof.
2.7 Vacation: Executive shall be entitled to vacation
leave of four (4) weeks each fiscal year in accordance
with the Bank's vacation policy; provided, however,
that Executive shall schedule his vacation time in such
a manner that he will be absent from work for at least
a consecutive two (2)-week period during each fiscal
year of the employment term hereunder. Notwithstanding
the foregoing, Executive shall be entitled to vacation
leave of eight (8) weeks with respect to each of the
fiscal years 2001 and 2002, respectively.
2.8 Group Medical, Life and Long-Term Disability
Insurance and Other Benefits: The Bank shall provide
to Executive, at the Bank's expense, participation in
such hospitalization and major medical insurance
programs as the Bank furnishes to its employees
generally and pay for Executive's annual physical
examination. The Bank shall continue to provide
Executive with his existing long-term disability
insurance policy and whole life insurance policy with
death benefits of $250,000 payable as Executive may
direct and $250,000 payable to the Bank. Executive
shall also be entitled to receive all other benefits
provided to officers or employees of the Bank
generally, including, without limitation, participation
in any group life insurance and pension plan which the
Bank may from time to time adopt.
2.9 GBC Guarantee: Notwithstanding any provision to
the contrary herein, GBC hereby guarantees the full and
prompt payment by each of its subsidiaries, including,
but not limited to, the Bank, of all amounts owed by
them hereunder to Executive.
3. CONFIDENTIAL INFORMATION AND TRADE SECRETS
During the term of this Agreement and thereafter Executive agrees
that he shall treat as confidential and secret all information,
trade secrets, and other proprietary information and data of GBC,
the Bank and any affiliate of GBC and the Bank made available to
him during the course of his employment hereunder and agrees that
he shall not, directly or indirectly, make known or divulge any
such information or data to any person or entity. In connection
with the foregoing, Executive recognizes and acknowledges that
all files, records, documents, credit analysis, customer loan
information, customer lists and vendor lists, as may exist from
time to time, are valuable, special, and unique assets of the
businesses of GBC and the Bank.
4. TERMINATION ON DISABILITY
In the event that, on account of any physical or mental
disability, Executive shall be unable to perform his duties under
this Agreement for three (3) consecutive full calendar months
then ending, or for eighty percent (80%) or more of the normal
working days during the four (4) consecutive full calendar months
then ending, GBC and the Bank each may, at each of their option,
upon six (6) months' advance written notice to Executive,
terminate Executive's employment under this Agreement. During
such six (6)-month notice period, GBC and the Bank each may
remove Executive from any and all of his positions as Chairman,
CEO and director, but he shall continue to be an employee of GBC
and the Bank and to be paid in accordance with this Agreement.
On the expiration of such six (6)-month notice period,
Executive's employment under this Agreement shall terminate.
Executive shall be entitled to receive a proportionate part of
any incentive compensation, as provided in Paragraph 2.2 hereof,
for that fiscal year to the effective date of the termination of
this Agreement. Such prorated incentive compensation award shall
be payable promptly after receipt of GBC's audited annual
financial statements for the subject fiscal year. If there
should be a dispute between the parties hereto as to Executive's
physical or mental disability for purposes of this Agreement, the
question shall be settled by the opinion of an impartial
reputable physician or psychiatrist agreed upon for this purpose
by the parties or their representatives, or if the parties cannot
agree within ten (10) days after a request for designation of
such party, then by a physician or psychiatrist designated by the
Los Angeles County Medical Association. The certificate of such
physician or psychiatrist as to the question in dispute shall be
final and binding upon the parties hereto.
5. TERMINATION ON DEATH
In the event that the Executive should die during the term
hereof, this Agreement shall terminate effective on the last day
of the calendar month of his death. In such event, Executive's
personal representative shall be entitled to receive Executive's
compensation earned as of the time of death, including, but not
limited to, a pro-rata portion of any incentive compensation
payable pursuant to Paragraph 2.2 hereof. Such prorated
incentive compensation award shall be payable promptly after
receipt of GBC's audited annual financial statements for the
fiscal year during which Executive's death occurred.
6. MERGER OR ACQUISITION OF GBC
In the event of a merger or acquisition by another entity of GBC
or any of its subsidiaries, including, but not limited to, the
Bank, which is effected because of an order or other directive of
the Federal Deposit Insurance Corporation, the California
Department of Financial Institutions or any other agency having
authority to so order or direct, the Bank may: (a) with
Executive's consent, assign this Agreement and all rights and
obligations hereunder to any business entity which succeeds to
all or substantially all of the business of the Bank through such
merger or sale; or (b) in its sole discretion upon at least
thirty (30) days' advance written notice to Executive, terminate
Executive's employment hereunder upon payment to him of six (6)
months' base compensation, as provided in Paragraph 2.1 hereof,
and a pro-rata portion of any incentive compensation payable
pursuant to Paragraph 2.2 hereof. Such prorated incentive
compensation award shall be payable promptly after receipt of
GBC's audited annual financial statements for the fiscal year in
which Executive's employment was so terminated.
7. EXECUTIVE'S OPTION TO TERMINATE AGREEMENT
Notwithstanding anything provided herein to the contrary,
Executive shall have the right at any time, with or without
cause, to deliver to GBC and the Bank six months' advance written
notice of his election to terminate this Agreement. During such
six (6)-month notice period, GBC and the Bank each may remove
Executive from any and all of his positions as Chairman, CEO and
director, but Executive shall continue to be an employee of GBC
and the Bank and to be paid in accordance with this Agreement.
On the expiration of such six (6)-month notice period,
Executive's employment under this Agreement shall terminate. In
such event, Executive shall be entitled to receive his base
compensation, as provided in Paragraph 2.1 hereof, earned through
the date of termination and a pro-rata portion of any incentive
compensation payable pursuant to Paragraph 2.2 hereof. Such
prorated incentive compensation award shall be payable promptly
after receipt of GBC's audited annual financial statements for
the fiscal year in which Executive's employment was so
terminated.
8. TERMINATION OF EMPLOYMENT FOR CAUSE
GBC and the Bank each may terminate Executive's employment
hereunder at any time for cause if he commits any material act of
dishonesty, fraud, misrepresentation or other act of moral
turpitude, improperly discloses confidential information of GBC,
the Bank or any affiliates of the Bank or GBC, is guilty of gross
carelessness or willful misconduct, acts in any way which has a
material adverse effect upon the financial condition, operations
or reputation of GBC or the Bank, or fails to obey the lawful
direction of the Board; provided, however, that no such
termination shall occur under this Paragraph 8 unless Executive
first shall have received written notice from the respective
Boards specifying the acts or omissions alleged to justify such
termination and, if such action can be corrected, it continues
after Executive shall have had reasonable opportunity to correct
it. If at any time during the term of this Agreement, Executive
is terminated for cause, then GBC's liability, and that of its
subsidiaries, shall be limited to the payment of Executive's base
compensation (as provided in Paragraph 2.1 hereof) and benefits,
excluding incentive compensation otherwise payable pursuant to
Paragraph 2.2 hereof, through the effective date of the
termination.
9. RETIREMENT BENEFIT
9.1 Retirement Benefit: At the termination of
Executive's employment (other than for cause as
provided in Paragraph 8) upon expiration of its stated
term hereunder on December 31, 2002, Executive shall be
entitled to an annual retirement benefit in an amount
equal to fifty percent (50%) of his final base
compensation, as provided in Paragraph 2.1 hereof. The
foregoing benefit shall be payable in equal monthly
installments over a five (5)-year period following the
expiration of this Agreement.
9.2 Partial Benefit in the Event of Voluntary
Termination: In the event that Executive voluntarily
terminates his employment hereunder, pursuant to
Paragraph 7 hereof, or his employment is terminated on
account of his disability pursuant to Paragraph 4
hereof, at any time after September 9, 1998 and prior
to December 31, 2002, Executive shall be entitled to an
annual retirement benefit of $50,000, payable in equal
monthly installments over a five (5)-year period
following the date of Executive's termination of
employment. Such annual retirement benefit shall be
adjusted on the date of Executive's termination date
and each anniversary of such date by a percentage
increase equal to the increase in the Consumer Price
Index for all urban consumers in the Los Angeles-Long
Beach-Anaheim Metropolitan area (1967=100) as it
existed on the last day of the preceding calendar year
when compared to December 31, 1991.
9.3 Use of Office and Automobile: Throughout the
duration of the five (5)-year period during which
Executive is receiving retirement benefits pursuant to
this Paragraph 9, Executive shall be entitled to an
office and secretarial services and the use of an
automobile (of the same class as that provided pursuant
to Paragraph 2.6) and chauffeur at the sole expense of
GBC and the Bank.
9.4 Noncompetition: Executive agrees that for a
period of five (5) years following the date of his
termination of employment hereunder, he shall not,
within the fifty (50) states of the United States of
America and Washington, D.C., directly or indirectly,
either as an employee, employer, consultant, agent,
principal, partner, one percent (1%) or more
stockholder, corporate officer, director, or any other
individual or representative capacity engage or
participate in: (i) any deposit taking financial
institution (other than GBC or any affiliates of GBC),
including, but not limited to, commercial banks,
savings and loan associations, thrift and loan
institutions, savings banks and agencies or branches of
foreign banks, or (ii) any activity which is the same
as, similar to, or competitive in any manner whatsoever
with the remaining business activities of GBC, the
Bank, or any affiliates of GBC and the Bank, including
abetting any other companies or individuals, directly
or indirectly to so compete, without the express
written consent of GBC, such consent not to be
unreasonably withheld by GBC; provided, however, that
Executive shall only be prohibited hereunder from
carrying on a business which is the same as, similar
to, or competitive with the business activities
conducted by GBC, the Bank, or any affiliates of GBC
and the Bank on the date immediately following the date
of Executive's termination of employment hereunder. In
the event of Executive's failure to comply with the
foregoing noncompetition covenant, his option under the
Non-Qualified Stock Option Agreement dated December 19,
1991 (to the extent not yet exercised by Executive)
shall immediately expire on the date of his termination
of employment hereunder and Executive shall no longer
be entitled to the retirement benefit (to the extent
not yet paid to Executive) and the continued use of an
office and automobile, as provided in this Paragraph 9.
10. INDEMNIFICATION
GBC and the Bank shall, to the maximum extent provided by
Section 317 of the California Corporations Code, indemnify
Executive against expenses (including, but not limited to,
attorneys fees and cost), judgments, fines and settlements
incurred in connection with any proceeding arising by reason of
his employment by GBC or the Bank, as the case may be, regardless
of whether or not at the time such expense is incurred he is
still in the employ of GBC or the Bank or is deceased; provided,
however, that such indemnity will not be provided for any acts or
omissions of Executive where Executive either is grossly
negligent or engages in willful misconduct.
11. SUCCESSORS, ASSIGNS, BENEFIT
11.1 The provisions of this Agreement shall inure to
the benefit of and be binding upon GBC and the Bank and
each of their successors and assigns.
11.2 The parties hereto agree that Executive's services
are personal and non-delegable and that this Agreement
is executed with respect thereto. This Agreement shall
not be assignable by Executive.
12. NOTICES
All notices, requests, demands and other communications
("notices") provided for by this Agreement shall be in writing
and shall be deemed to be effectively given (a) upon personal
delivery, (b) three (3) business days after mailing by registered
or certified first class mail, postage prepaid, return receipt
requested, or (c) two (2) business days after the date sent by
overnight courier service. All such notices shall be addressed
as follows:
To GBC: Board of Directors of GBC Bancorp
GBC Bancorp
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
To the Executive: Xx. Xx-Xxx Xx
0000 Xxxxxx Xxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
The parties hereto may designate a different place at which
notice shall be given provided, however, that any such notice of
change of address shall be effective only upon actual receipt.
13. ENTIRE UNDERSTANDING
This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter thereof and no other
representations, warranties or agreements whatsoever have been
made. Subject to the termination provisions set forth expressly
herein, this Agreement shall not be modified, amended, cancelled
or terminated except by another instrument in writing executed by
the parties hereto.
14. SEVERABILITY
In case one or more of the provisions contained in this Agreement
(or any portion of any such provision) shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement (or any portion of any such
provision), but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision (or portion thereof)
had never been contained herein.
15. GOVERNING LAW: INTERPRETATION
This Agreement shall be deemed to have been made and entered into
in the State of California, and its validity, construction,
breach, performance and operation shall be governed by the laws
of the State of California applicable to agreements made and to
be wholly performed therein. The parties agree that the language
of all parts of this Agreement shall be construed and interpreted
as a whole according to the ordinary meaning of the words used so
as to fairly accomplish the purpose and intention of the parties
to this Agreement.
16. ARBITRATION
Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, or the employment relationship
between the parties hereto, shall be settled by binding
arbitration in accordance with the Employment Dispute Rules of
the American Arbitration Association ("AAA"), and judgment upon
the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. In any arbitration action, the
prevailing party shall be entitled to recover from the other
party reasonable attorney's fees, costs and necessary
disbursements incurred by the prevailing party in presenting his
or its case. Such arbitration will take place in Los Angeles,
California and shall be heard by a single neutral arbitrator (to
be appointed in accordance with the procedures of the AAA).
17. WAIVER
The failure by either party hereto at any time to require
performance by the other party of any of the provisions hereof
shall not be deemed to be a waiver of any kind nor in any way
affect such party's right thereafter to enforce the provisions of
this Agreement. In the event that a party hereto waives any
provisions of this Agreement or any rights concerning any breach
or default of the other party hereto, such waiver shall not
constitute a continuing waiver of any such provision or breach
thereof, nor shall it prevent such party from acting upon the
same or any subsequent breach or default of the other party to
this Agreement.
18. PARAGRAPH HEADINGS
Paragraph headings are inserted herein only for convenience and
shall not be used to interpret any of the provisions hereof.
19. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be original, but all of which
together shall constitute one and the same instrument.
20. SHAREHOLDER APPROVAL
This Agreement is effective as of January 1, 1998, but the
material terms of Executive's incentive compensation award
program hereunder, as set forth in Paragraphs 2.2, 2.4 and 2.5
hereof, are subject to the approval of the holders of the
majority of the outstanding shares of the common stock of GBC,
which approval must occur prior to the payment of any incentive
compensation award to the extent attributable to any period of
employment hereunder commencing on or after September 10, 1999.
The Board of GBC hereby agrees to unanimously recommend the
approval of Executive's incentive compensation award program
hereunder to the shareholders of GBC at the April, 1998 annual
meeting of shareholders. In the event that Executive's incentive
compensation award program hereunder is not approved by the
shareholders of GBC at such time, this Agreement shall be deemed
to be null and void ab initio and the Prior Agreement shall
remain in full force and effect. Any subsequent modification or
addition of any material terms of Executive's incentive
compensation award program hereunder (as determined under
Section 162(m) of the Internal Revenue Code of 1986 and Treasury
Regulation Section 1.162-27) shall be subject to approval by the
shareholders of GBC in the manner provided above.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the dates set forth below.
"EXECUTIVE" GBC Bancorp
------------------- By:
Li-Xxx Xx ------------------
------------------- ---------------------
DATE DATE
GENERAL BANK
By:
------------------
---------------------
DATE
EXHIBIT "A"
-----------
Amendment to Non-Qualified Stock Option Agreement of Li-Xxx Xx
--------------------------------------------------------------
Subject to the approval of the shareholders of GBC Bancorp
("Company") to any requisite amendment to the Company's Amended
and Restated 1988 Stock Option Plan, the Non-Qualified Stock
Option Agreement dated December 19, 1991 by and between the
Company and Li-Xxx Xx ("Optionee") is hereby amended effective as
of January 1, 1998 in the following particulars only:
(1) Section 4 is amended by the addition of the following
new sentence:
"Notwithstanding the foregoing, the three (3)-
month exercise period otherwise provided herein
shall be extended to: (i) five (5) years in the
event of the termination of Optionee's employment
upon the expiration of its stated term under that
certain Employment Agreement dated February 19,
1998, by and between GBC Bancorp, General Bank and
Li-Xxx Xx ("Employment Agreement") on December 31,
2002, other than for cause as provided in
Paragraph 8 of said Agreement, and (ii) two
(2) years in the event of the termination of
Optionee's employment on account of disability as
provided in Paragraph 4 of said Agreement;
provided, however, that such extended five(5)-year
or two (2)-year exercise period, whichever is
applicable, shall cease immediately upon
Optionee's failure to comply with the noncompete
covenant set forth in Paragraph 9.4 of the
Employment Agreement."
(2) The second sentence of Section 5 is amended in its
entirety to read as follows:
"If Optionee dies while employed by the
Company or a subsidiary corporation, or during the
three (3)-month, two (2)-year or five (5)-year
period referred to in Section 4 hereof, this
option shall expire three (3) years after the date
of Optionee's death."
(3) The Board of Directors of the Company hereby agrees to
unanimously recommend the approval of the requisite amendment to
the Company's Amended and Restated 1988 Stock Option Plan at the
April, 1998 annual meeting of shareholders. In the event that
such amendment to the Company's Amended and Restated 1988 Stock
Option Plan is not approved by the shareholders of the Company at
such time, this Amendment shall be deemed to be null and void ab
initio.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the dates set forth below.
"OPTIONEE" GBC Bancorp
-------------------- By:
Li-Xxx Xx ----------------------
-------------------- ------------------------
DATE DATE
EXHIBIT "B"
-----------
Legend Shares
-------------
The bonus shares of GBC common stock received by Executive
and the additional shares of GBC granted to Executive pursuant to
Paragraph 2.5 of the Agreement shall have conspicuously endorsed
thereon the following words:
"Sale, transfer, hypothecation, encumbrance, or
disposition of the shares represented by this
certificate is restricted by the provisions of the
Employment Agreement dated February 19, 1998 by and
between GBC Bancorp, General Bank and Li-Xxx Xx. All
provisions of said Agreement are incorporated by
reference in this certificate. A copy of said
Agreement may be inspected at the principal office of
GBC Bancorp."
