Exhibit 10.30
December 18, 2001
Xx. Xxxxxxx X. Xxxx, President
Dear Xxxxxxx:
This letter, upon your acceptance, will constitute a legally binding agreement
("letter Agreement") between you and Pacific Century Financial Corporation and
Bank of Hawaii (collectively "PCFC" or the "Company") governing the terms of
your employment by PCFC between the date of this letter agreement (the
"Effective Date") and March 31, 2002 (the "Completion Date"). This letter
agreement also provides the terms of your separation from employment with PCFC
if your employment terminates on or before the Completion Date.
You and PCFC agree as follows:
1. Responsibilities. During the period from the Effective Date until the
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Completion Date (the "Term"), your sole duty as officer and employee of the
Company will consist of using your best efforts to manage, in accordance
with established PCFC operating standards, and direct and carry out, in
accordance with policies, procedures and directions established by the
Board of Directors of PCFC and under the direct supervision of Xxxxxxx X.
X'Xxxxx, the disposition by sale or closure of PCFC interests in the
following properties, investments and lines of business (collectively, the
"Properties"):
a. All of the Company's operations and investments in the South Pacific
except the Bank of Hawaii branches located in the Territory of
American Samoa. This consists of the three branches of Bank of Hawaii
in Fiji, the Company's investment in Bank of Queensland, Ltd., and the
Company's interest in Banque de Tahiti, Bank of Hawaii - Nouvelle
Caledonie, Bank of Hawaii (PNG) Ltd., Banque de Hawaii (Vanuatu),
Ltd., National Bank of the Solomon Islands, and all of their
subsidiaries (collectively the "South Pacific Operations").
b. Bank of Hawaii branches and representative offices in Hong Kong, the
Philippines, Korea, Singapore and Taiwan and Bank of Hawaii
International Corporation, New York (collectively the "Asian
Operations").
c. Pacific Century Bank, N.A. ("PCB").
In addition to the disposition of the Properties, you shall direct the
restructuring of Bank of Hawaii's Tokyo branch to a representative office.
In this letter agreement these dispositions and the restructuring of the Tokyo
branch are called the "Project". The Project will be completed when PCFC no
longer holds title to any of the Properties and the Tokyo branch has been
restructured to a representative office.
2. No Employment Agreement. Nothing in this letter agreement shall be deemed
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to create an employment agreement between you and PCFC providing for your
employment by PCFC for any fixed period of time. Your employment with PCFC
is terminable at will by you or PCFC and each shall have the right to
terminate your employment with PCFC at any time, with or without cause.
Except as specifically provided in this letter agreement, the termination
of your employment shall not effect the incentive compensation to be paid
to you.
3. Project Approvals. In carrying out your responsibilities you will report
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directly to Xxxxxxx X. X'Xxxxx and will be responsible for keeping him
fully informed, through written monthly progress reports and other reports
as requested, of all developments related to the Project. The retention of
outside professional assistance (investment bankers, accountants,
attorneys, etc.), any significant changes in the operation of any of the
Properties included within the Project during the Term, any binding or
nonbinding letters of intent, term sheets or contracts or other agreements
to dispose of any of the Properties and all other major elements related to
the Project, will be subject to the prior approval of Xxxxxxx X. X'Xxxxx.
All decisions related to the Project including Property operations will be
subject to the final approval of PCFC and PCFC may terminate the Project in
whole or in part at any time, all in its sole and absolute discretion.
4. Property Operations. PCFC anticipates entering into separation/retention
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agreements with Xxxx Pan, Xxxxxxxx Xxxxxxx, Xxxx Xxxxx and Xxx Xxxx to
encourage their continued and active participation and efforts to operate
the Properties properly and to assist in carrying out the Project. During
the Term, they will report to you and work with you in that regard. You
will use your best efforts to ensure that the Properties continue to
operate during the Term consistent with PCFC standards, procedures and
controls and consistent with the divestiture plan presented to and approved
by the PCFC Board of Directors and PCFC will continue to support the
Properties at the same level as before the Effective Date.
5. Support. You will retain your current offices and staff support and,
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consistent with other needs of the Company, will be entitled to call upon
the internal resources of the Company (finance, accounting, legal, human
resources, etc.) in carrying out your efforts on the Project.
6. Corporate Titles and Responsibilities. During the Term, you will continue
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to hold your present corporate title of President and will continue to
serve on the Managing Committee for purposes of coordinating activities
related to the Project with other Company operations and will continue as a
member of the Board of Directors of Bank of Hawaii, Pacific Century
Financial Corporation and any boards of directors for any of the Properties
upon which you currently serve. To afford you maximum time to work on the
Project, you will relinquish your membership on other PCFC subsidiary
boards of directors unless directed otherwise.
7. Project Goals. We each acknowledge and agree that it is in the best
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interest of the Company and its shareholders that the Project be carried
out in a manner which, to the greatest extent possible, protects the
reputation of the Company while providing the greatest benefit of the
Company, its shareholders and the Company's ongoing operations after
completion of the Project. All aspects of the Project will be planned and
conducted to achieve these goals.
8. Base Compensation. During the Term you will receive the following base
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salary and benefits:
a. Effective on April 1, 2001, your base salary was increased to $600,000
per annum, payable in semi-monthly installments.
b. You will continue to participate in the Company medical, dental, life
insurance, long-term care, disability, profit sharing, money purchase,
excess profit sharing, excess money purchase and vacation accrual
employee benefit programs.
c. You will continue to receive your automobile allowance, existing
parking space, and the payment of your club dues.
d. Effective as of June 22, 2001, PCFC has granted you 35,000 shares of
restricted PCFC common stock, which are subject to the terms of the
Restricted Share Agreement dated as of June 22, 2001 (the "Restricted
Stock Agreement"), between you and the Company.
9. Termination of Other Compensation and Benefits. As of the Effective Date,
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your participation in future grants under the Company Stock Option Program,
in the One-Year Incentive Plan, in all Long-Term Incentive Plans and in all
severance or separation plans (except for the Executive Change-in-Control
Severance Agreement) will terminate, and you will not be entitled to any
further payments or awards under those plans or agreements. Subject to
paragraphs 11 and 12.h below, the compensation and benefits payable to you
under this letter agreement the Restricted Stock Agreement and your
Executive Change-In-Control Severance Agreement will be the only
compensation and benefits you will be entitled to receive from the Company
after the Effective Date.
10. Incentive Compensation. You will be entitled to the following incentive
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compensation for your work on the Project:
a. On the Completion Date PCFC will pay you a bonus of $1,500,000.
b. On the Completion Date PCFC will pay you an additional incentive bonus
payment of not less than $1,250,000 and up to $3,000,000 to the extent
you have, in the judgment of the Company acting in its sole and
absolute discretion, successfully carried out your responsibilities
under this letter agreement. In the event that all of the Properties
have not been disposed of on the Completion Date, the Company shall
consider the amount to be paid to you as the additional incentive
bonus payment taking into consideration the Properties that were
disposed of, the consideration received for the Properties disposed of
and the number of, status of and prognosis for the Properties whose
disposition is not then complete.
11. Continued Employment. We each acknowledge that neither you nor PCFC has
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made a final decision as to whether your employment by PCFC will continue
after the Completion Date. Provisions in this letter agreement related to
the termination of employment are included only to facilitate that process
if it does occur. If we mutually agree that your employment by PCFC will
continue after the Completion Date:
a. You will not receive the payment, if any, due under paragraph 10.a.
above.
b. You will receive the payment due under paragraph 10.b. above in the
amount determined by the Company.
c. Your participation in all programs and plans terminated under
paragraph 9 above will be reinstated.
12. Employment Termination. If your employment with the Company terminates:
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a. You will receive information regarding your rights to health insurance
continuation after the termination. To the extent you have any such
rights, nothing in this letter agreement will impair those rights.
b. On the date of your termination you will return to PCFC any
information you have about PCFC's practices, procedures or trade
secrets, including but not limited to customer data, lists, accounts,
bank strategies, growth plans, business plans and marketing strategies
and any Company properties such as credit cards and keys.
c. If your employment terminates because you die or become totally
disabled or PCFC terminates your employment without cause, you will be
entitled to receive (a) your base compensation under paragraph 8.a.
above through the Completion Date, (b) the incentive compensation
payable under paragraph 10.a. above, and (c) an amount we mutually
agree will fairly compensate you for the incentive compensation you
would have received under paragraph 10.b. above at the completion of
the Project or, failing such mutual agreement, such amount determined
by arbitration as provided in paragraph 20 below.
d. If you become eligible to receive "Severance Benefits" under your
Executive Change-In-Control Severance Agreement you may, at your
option, choose to receive these Severance Benefits or any amounts due
you under paragraphs 10.a. and 10.b. above, but not both. You agree
that the payments provided for in this letter agreement shall be in
lieu of and you shall not be entitled to any benefits under any of the
Company's other employee severance or separation plans. By entering
into this letter agreement, you are waiving and releasing any of your
benefits under those plans.
e. If you voluntarily terminate your employment with PCFC before the
Completion Date for any reason or PCFC terminates your employment for
cause as defined in paragraph 13 below, all rights, compensation and
benefits you have under paragraphs 8, 10, and 12.g. of this letter
agreement will terminate automatically and you will not be entitled to
any rights, compensation or benefits under those paragraphs.
f. On the date of the termination of your employment, you will be paid
any accrued but unused vacation.
g. With regard to all Qualified and Non-Qualified Stock Options
("Options") currently held by you that are not vested, the
Compensation Committee of PCFC's Board of Directors, will provide for
the full vesting of such options upon the completion of six months
following their date of grant. With regard to all vested options held
by you as of the date of your termination of employment, the
Compensation Committee will extend the period within which those
options are exercisable to three years following the date of your
termination of employment in the case of the Options under the 1994
Option Plan and one year following the Termination Date in the case of
Options under the 1988 Option Plan; provided, however, that in no
instance will the period for exercising an option be longer than the
original exercise period for the option. Extension of the exercise
period for your Qualified Stock Options may result in conversion of
your Qualified Stock Options into Non-Qualified Stock Options with the
consequent loss of tax benefits. Therefore, Qualified Stock Options
will not be subject to these extensions unless you so request in
writing on or before the Termination Date.
13. Termination for Cause. PCFC may terminate your employment at any time for
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"cause." As used in this letter agreement, "for cause" means:
a. Your material breach of this letter agreement and failure to take
reasonable steps to cure the breach within a reasonable time after you
have been notified of the breach by the Company;
b. Your material breach of the policies of PCFC or the Bank of Hawaii
Code of Ethics and failure to take reasonable steps to cure the breach
within a reasonable time after you have been notified of the breach by
the Company;
c. Your commission of a felony or immoral act which is materially
detrimental to PCFC's reputation or regulatory standing;
d. Your commission of an act of fraud, dishonesty or gross misconduct
relating to the business of the Properties or PCFC;
e. Your failure to perform your duties with PCFC within a reasonable time
after a demand for such performance is delivered to you by an officer
of PCFC; or
f. Your habitual neglect of job duties resulting in material damage to
PCFC or its reputation within a reasonable time after a demand to
perform your job duties is delivered to you by an officer of PCFC.
14. Waiver and Release. Upon receipt of all of the payments and the performance
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of all of the Company's obligations to you, you will waive, release and
forego any and all claims, whether or not now known, suspected or claimed,
that you ever had, now have, or may later claim to have had as of or prior
to the Effective Date against PCFC and any of its predecessors,
subsidiaries, related entities, officers, directors, shareholders, agents,
attorneys, employees, successors or assigns arising from or related to your
employment with PCFC and/or the termination of your employment with PCFC.
These claims include, but are not limited to, claims arising under federal,
state and local statutory or common law, including, but not limited to, the
Age Discrimination in Employment Act, Title VII of the Civil Rights Act of
1964, Hawaii civil rights and anti-discrimination statutes, wage and hour
laws, the law of contract and tort (such as claims for breach of contract,
infliction of emotional distress, defamation, invasion of privacy, wrongful
termination, etc.), and any claims for attorneys' fees and/or costs.
15. Inquiries. PCFC and you agree that any inquiries regarding verification of
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your employment will be handled through the Bank of Hawaii, Human Resources
Division. You agree that you will instruct anyone of whom you are aware who
is making such inquiries to contact the Human Resources Division or Xxxxxxx
X. X'Xxxxx. As is the Bank's practice, the Human Resources Division will
only release information confirming your dates of employment and position
title.
16. Negative Statements. PCFC and you agree that each will not make any
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disparaging, negative or derogatory statements regarding the other.
17. Disclosure. Unless compelled by court order or subpoena or otherwise
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required by law, you will not disclose to others or use any information
regarding PCFC's practices, procedures or trade secrets, including but not
limited to, customer data, lists and accounts; and PCFC strategies, growth
plans, business plans, and marketing strategies.
18. Breach; Remedies. In the event that you materially breach your obligations
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under this letter agreement and fail to cure within a reasonable period of
time after written notice to you by an officer of the Company to perform
any of your obligations under this letter agreement, PCFC will be entitled
to terminate your employment and any of your rights, benefits and
compensation payable under this letter agreement and to obtain all other
relief provided at law or equity. In addition, your breach of paragraph
12.b., 16 or 17 will result in irreparable harm to PCFC for which it will
have no adequate remedy at law and for which PCFC may seek immediate
injunctive relief.
19. Age Discrimination. The following is required by the Older Workers Benefit
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Protection Act:
This letter agreement includes a waiver of any claims you may have
under the Age Discrimination in Employment Act through the Effective
Date of this letter agreement. You have up to 21 days from the date of
this letter to accept the terms of this letter agreement, although you
may accept it at any time within those 21 days. There are advantages
and disadvantages for you in entering into this letter agreement.
Prompt receipt of the payment provided for in paragraph 8 and 9 and an
amicable resolution to the situation may be considered advantages.
Release of potential claims may be considered a disadvantage. To
properly weigh the advantages and disadvantages you are advised to
consult an attorney about this letter agreement prior to signing this
letter agreement. If you want to accept this letter agreement prior to
the expiration of the 21 days, you will need to indicate your waiver
of the 21-day consideration period by signing in the space indicated
below.
Once you do so, you will still have an additional seven days in which
to revoke your acceptance. To revoke, you must send me a written
statement of revocation by registered mail, return receipt requested.
If you do not revoke, the eighth day after the date of your acceptance
will be the "Effective Date" of this letter agreement. This letter
agreement will not be effective and enforceable until the revocation
period has expired.
20. Arbitration. Any dispute under or related to this letter agreement shall be
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submitted to binding arbitration in Honolulu, Hawaii in accordance with the
applicable rules of the American Arbitration Association. The arbitrators
shall be required to apply and follow the terms of this letter agreement
and shall not in any event award any punitive damages. The arbitrators
shall have the authority to award the prevailing party in any arbitration
his or its reasonable attorney's fees.
21. General. This letter agreement may be executed in counterparts. Paragraph
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headings are for ease of reference only. This letter agreement represents
the complete agreement of the parties, and is intended to bind all parties,
and all persons claiming by or through the parties. It supersedes any and
all prior agreements, and may only be waived or amended in whole or in part
in writing signed by all parties. This letter agreement will be governed by
and interpreted under Hawaii law. Appropriate tax withholding and other
deductions will be made from all amounts payable under this letter
agreement.
If you agree to the terms of this letter agreement, please execute and date both
copies, as indicated below, retain a copy for your records and return the other
copy to me.
Very truly yours,
PACIFIC CENTURY
FINANCIAL CORPORATION
and BANK OF HAWAII
By /S/ Xxxxxxx X. X'Xxxxx
Xxxxxxx X. X'Xxxxx
Chief Executive Officer
By signing this letter, I acknowledge that I have had the opportunity to review
this letter agreement carefully with an attorney of my choice; that I have read
and understand the terms of this letter agreement; and that I voluntarily agree
to them.
/S/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Pursuant to 29 C.F.R. ss. 1625.22(e)(6), I hereby knowingly and voluntarily
waive the twenty-one day pre-execution consideration period set forth in Older
Workers Benefit Protection Act (29 U.S.C. ss. 626(F)(1)(f)(i).
/S/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Signature page of letter agreement dated December 18, 2001 among Pacific Century
Financial Corporation, Bank of Hawaii, and Xxxxxxx X. Xxxx.
