EXHIBIT 10.15
AMENDED AND RESTATED EMPLOYMENT SECURITY AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT SECURITY AGREEMENT (the "Agreement")
by and among SC BANCORP, a California corporation (the "Company"), SOUTHERN
CALIFORNIA BANK, a California corporation and a wholly owned subsidiary of the
Company (the "Bank"), and Xxxxx X. Xxxx (the "Executive"), is entered into as of
January 1, 1997 (the "Agreement Date").
W I T N E S S E T H
WHEREAS, the Company, the Bank and the Executive are parties to that
certain Employment Security Agreement dated as of March 17, 1995 (the "Initial
Agreement"); and
WHEREAS, the Company and the Bank wish to continue to assure themselves and
the Executive of continuity of senior management during the term of this
Agreement and to provide the Executive with certain termination benefits in the
event the Executive's employment is terminated under certain circumstances; and
WHEREAS, should the possibility of a change in control of the Company
arise, the Board of Directors believes it imperative that the Company, the Bank
and the Board be able to rely upon the Executive to continue in his position,
and that the Company and the Bank be able to receive and rely upon the
Executive's advice, if it requests such advice, as to the best interests of the
Company, without concern that he might be distracted by the
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personal uncertainties and risks created by the possibility of a change in
control; and
WHEREAS, should the possibility of a change in control arise, in addition
to the Executive's regular duties, the Executive may be called upon to assist in
the assessment of such possible change in control, to advise management and the
Board as to whether such change in control would be in the best interests of the
Company and to take such other actions as the Board might determine to be
appropriate; and
WHEREAS, the Company, the Bank and the Executive wish to amend and restate
the Initial Agreement in its entirety as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties do hereby agree as follows:
SECTION 1. TERM OF AGREEMENT
This Agreement shall be effective as of the Agreement Date and shall
continue in effect until the Expiration Date (as defined below). The
"Expiration Date" shall initially be July 31, 1998, but commencing on August 1,
1997 and each August 1 thereafter, the Expiration Date shall automatically be
extended by one additional year unless, not later than April 30 of such year,
the Company shall have given notice to the Executive that it does not wish to
extend the Expiration Date; PROVIDED,
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HOWEVER, that if a Change in Control (as defined in Section 2, below) shall have
occurred prior to the original or extended Expiration Date, the Expiration Date
shall automatically become the second anniversary of the last day of the month
in which the Change in Control occurred. Notwithstanding the foregoing, the
Expiration Date shall be any earlier date on which the Executive's employment
with the Company or the Bank terminates, in the event such termination occurs
prior to, and not in contemplation of, a Change in Control.
SECTION 2. DEFINITION OF "CHANGE IN CONTROL"
For purposes of the Agreement, a "Change in Control" shall be deemed to
have occurred if and when:
(a) the Company shall consummate a merger or consolidation (a
"Transaction") with another corporation; PROVIDED, HOWEVER, that
a Change of Control shall not be deemed to have occurred with
respect to a Transaction if the beneficial owners of the
outstanding shares entitled to vote in the election of directors
immediately prior to such Transaction will beneficially own more
than sixty percent (60%) of the outstanding shares entitled to
vote in the election of directors of the corporation resulting
from the consummation of the Transaction; or
(b) twenty-five percent (25%) of the Company's securities then
entitled to vote in the election of directors shall be acquired
by any "person" (as such term is used in Sections 13(d) of the
Securities Exchange Act of 1934, as amended); or
(c) during any period of twenty-four (24) consecutive months,
individuals who at the beginning of such period were members of
the Board of Directors of the Company (the "Incumbent Board")
shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company, provided that any
person becoming a director
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subsequent to the beginning of such period whose election or
nomination for election was approved by a vote of at least
eighty-five percent (85%) of the directors comprising the
Incumbent Board shall be, for purposes hereof, considered as
though such person were a member of the Incumbent Board; or
(d) the Company or the Bank shall sell all, or substantially all, of
its assets to another corporation.
SECTION 3. COVERED TERMINATION
The termination benefits described in Section 4 hereof shall be provided to
the Executive in the event that his employment with the Company or the Bank is
terminated following, or in contemplation of, a Change of Control on account of
a "Covered Termination".
"Covered Termination" shall mean (i) termination of employment by the
Company or the Bank other than for "Cause" as described below or (ii)
termination of employment by the Executive for "Good Reason" as described below.
A. TERMINATION BY COMPANY OR BANK FOR CAUSE.
For purposes hereof, the Company and the Bank shall have "Cause" to
terminate the Executive's employment if:
(i) the Executive is grossly negligent or engages in willful
misconduct in the performance of his material duties; or
(ii) the Executive commits an act or acts of dishonesty resulting or
intended to result directly or indirectly in gain or personal
enrichment at the expense of the Company or the Bank; or
(iii) the Executive discloses to a third party information that is of a
confidential or proprietary nature to the Company or the Bank,
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other than as appropriate in the normal course of the performance
of his duties; or
(iv) the Executive suffers from an illness, injury or other incapacity
that prevents him from performing his material duties for a total
of six (6) months, whether or not consecutive, within a twelve
(12) month period; or
(v) the Executive's death occurs.
B. TERMINATION BY EXECUTIVE FOR GOOD REASON.
For purposes hereof, following a Change in Control the Executive may
terminate his employment for Good Reason if:
(i) the Executive's then-current level of annual base salary (whether
payable by the Company or the Bank) is reduced; or
(ii) there is any reduction in the employee benefit coverage provided
to the Executive (including pension, profit sharing and welfare
benefits and perquisites, but not including incentive bonuses)
from the coverage levels in effect immediately prior to the
Change in Control, unless, however, the Company or the Bank
provides substantially equivalent employee benefits to the
Executive; or
(iii) the Executive suffers a material diminution in his title,
position, reporting relationship, responsibilities, authority or
offices; or
(iv) there is a relocation of the Executive's principal business
office by more than ten (10) miles, and (a) the Executive's new
commute is more than fifty (50) miles from the Executive's
current primary residence or (b) the Executive's new commute is
more than the Executive's current commute which is at least fifty
(50) miles; or
(v) the Company fails to obtain assumption of this agreement by any
successor or assign of the Company;
PROVIDED, HOWEVER, that any termination by the Executive for Good Reason must be
made in good faith.
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C. NOTICE.
Notwithstanding the foregoing provisions of this Section 3, no such
termination of the Executive's employment for Good Reason under paragraph B
above shall be treated as a Covered Termination unless (i) the Executive shall
give written notice to the Company, not later than thirty (30) days prior to the
effective date of any such termination for Good Reason and within six (6) months
after the date the Executive first becomes entitled to terminate for Good Reason
on account of the event(s) forming the basis for such termination, setting forth
in specific detail the basis for such termination for Good Reason, and (ii) the
Company or the Bank shall not, within thirty (30) days after receipt of such
notice, take actions reasonably acceptable to the Executive to remedy the
circumstances leading to the termination for Good Reason.
SECTION 4. CONSEQUENCES OF COVERED TERMINATION
In the event that the employment of the Executive shall have been
terminated after, or in contemplation of, a Change in Control in a manner that
shall constitute a Covered Termination under Section 3 above, the Company shall
make payments to, and provide benefit coverage for, the Executive as described
below in this Section 4.
A. BASE SALARY.
The Executive shall receive a payment equal to one and one-half (1 1/2)
times the highest annual base salary amount paid
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(by either the Company or the Bank) to the Executive within the three years
preceding the Covered Termination. Such payment shall be paid to the Executive
within fifteen (15) business days following the Covered Termination. The
highest annual base salary amount shall not include any bonuses awarded to the
Executive.
B. TARGET BONUS. The Executive shall also receive a payment equal to
the amount of the Executive's target bonus in the year that the Covered
Termination occurs under any of the Company's or the Bank's incentive
compensation plans in which the Executive then participates; PROVIDED HOWEVER,
that if a Covered Termination shall take place between January 1 and June 30,
such payment to the Executive shall be prorated and reduced to an amount equal
to the product of (i) the amount of the Executive's target bonus in the year
that the Covered Termination occurs, and (ii) a quotient of which the numerator
will be the number of months that have elapsed between January 1 immediately
preceding the Covered Termination and the date of the Covered Termination,
rounded up to the next whole number, and the denominator shall be twelve (12).
Such payment shall be made to the Executive within fifteen (15) business days
following the Covered Termination.
C. STOCK OPTIONS.
Immediately upon a Covered Termination, any stock options granted to the
Executive under any Company incentive plan that were not fully vested and
exercisable shall become fully vested and immediately exercisable. Such options
will be exercisable
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for a period of 90 days from the date of the Covered Termination (or such
greater period as may be provided in the related plan). Any restrictions on
payment or transfer of previously granted incentive awards shall immediately
lapse.
D. WELFARE BENEFITS.
The Company and the Bank shall continue to maintain, in full force and
effect, any "Welfare Benefits," such as life insurance coverage and health and
disability benefits, which were being provided to the Executive at the time of
the Covered Termination during the "Continuation Period." The Continuation
Period shall mean the eighteen (18) month period following the date of a Covered
Termination.
Notwithstanding the above, the Company or the Bank may provide coverage and
benefits under separate insured arrangements that provide benefits substantially
identical to those being provided to the Executive at the time of the Covered
Termination.
In addition, the Executive's right to any particular type of Welfare
Benefit shall be subject to cancellation by the Company or the Bank if the
Executive obtains alternative coverage of a similar type during the Continuation
Period that is at least as favorable to the Executive as the corresponding
Welfare Benefit. The Executive shall be obligated to notify the Company of any
such alternative coverage within thirty (30) days of it first becoming
applicable to him.
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E. WITHHOLDING FOR TAXES.
All payments required to be made by the Company to the Executive under this
Agreement shall be subject to the withholding of such amounts, if any, relating
to tax, excise tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
SECTION 5. EXCISE TAX LIMIT
Notwithstanding anything elsewhere in this Agreement to the contrary, if
any of the payments provided for in this Agreement, together with any other
payments or benefits which the Executive has the right to receive from the
Company or the Bank (or its affiliated companies), would constitute a "parachute
payment" (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986,
as amended (the "Code")), the payments pursuant to this Agreement shall be
reduced so that the present value of the total amount received by the Executive
that would constitute a "parachute payment" will be one dollar ($1.00) less than
three (3) times the Executive's base amount (as defined in Section 280G of the
Code) and so that no portion of the payments or benefits received by the
Executive shall be subject to the excise tax imposed by Section 4999 of the
Code. If through error or otherwise the Executive should receive payments under
this Agreement or otherwise in excess of one dollar ($1.00) less than three (3)
times his base amount, the Executive shall immediately
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repay such excess to the Company or the Bank upon notification that an
overpayment has been made.
SECTION 6. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators in the State of California, in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction. If the Company or the
Bank is found to have breached this Agreement, the Company shall bear the
expense of the arbitration proceeding and shall reimburse the Executive for all
of his reasonable costs and expenses relating to such arbitration proceeding,
including, without limitation, reasonable attorneys' fees and expenses. In no
event shall the Executive be required to reimburse the Company or the Bank for
any of the costs or expenses relating to such arbitration proceeding.
SECTION 7. NOTICES
All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and shall be sufficiently given if and when
mailed in the continental United States by registered or certified mail or
personally delivered to the party entitled thereto at the address stated below
or to such
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changed address as the addressee may have given by a similar notice:
TO THE COMPANY:
SC Bancorp
0000 Xxxx Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
TO THE EXECUTIVE:
Xxxxx X. Xxxx
0000 Xxxxxxx Xxxx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
SECTION 8. GENERAL PROVISIONS
A. ENTIRETY OF AGREEMENT.
This Agreement constitutes the entire agreement between the Company, the
Bank and the Executive relating to the subject matter hereof and shall supersede
any right under any other agreement relating to the subject matter hereof
between the Company or the Bank and the Executive existing as of the Agreement
Date. Any compensation or benefits to which the Executive is entitled under
this Agreement shall be provided based solely upon its terms, without regard to
any materials used in the preparation or consideration of this Agreement,
including any summary of terms or estimate of amounts relating to this
Agreement.
B. ENFORCEABILITY.
If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be, in whole or in part, unenforceable or contrary to
any statute, law, order, rule, regulation, directive or other action of any
federal or state
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regulatory agency having jurisdiction over the Company or its subsidiary, then
the remaining provisions of this Agreement shall remain in full force and effect
to the fullest extent permitted by law. The validity, interpretation,
performance and enforcement of this Agreement shall be governed by the laws of
the State of California, without giving effect to the principles of conflict of
laws thereof.
C. MITIGATION.
The Executive shall not be obligated to seek other employment in mitigation
of the amounts payable and benefits to be provided under this Agreement.
D. ASSIGNMENT OF INTEREST.
No right to or interest in any payments shall be assignable by the
Executive; PROVIDED, HOWEVER, that this Agreement shall inure to the benefit of,
and be enforceable by, the Executive's personal or legal representatives,
executors, administrators, heirs, distributees, devisees and legatees after the
Executive's death to the extent of any payments due in respect of the Executive
hereunder.
E. COMPANY, BANK AND SUCCESSORS.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Bank and any successor thereof including, without limitation, any
corporation or corporations acquiring directly or indirectly all or
substantially all of the assets of the Company, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
"the Company" for
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the purposes of this Agreement), but shall not otherwise be assignable by the
Company.
F. AMENDMENT, MODIFICATION AND WAIVER.
No provision of this Agreement may be amended, modified or waived unless
such amendment, modification or waiver shall be agreed to in a written agreement
signed by the Executive and by a duly authorized Company officer.
G. NO GUARANTEE OF EMPLOYMENT.
The parties hereto explicitly acknowledge that notwithstanding any
provision to the contrary contained herein, this Agreement shall not, in any
way, be interpreted to provide the Executive with any fixed or minimum term of
employment with the Company or the Bank.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
SC BANCORP
BY
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SOUTHERN CALIFORNIA BANK
BY
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Xxxxx X. Xxxx
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