EXHIBIT 10.25
EMPLOYMENT AGREEMENT
This Agreement is entered into by and among Silicon Valley Bank
(the "Bank"), Silicon Valley Bancshares, the holding company of the Bank (the
"Holding Company") (the Bank and the Holding Company shall be referred to
collectively herein as the "Companies"), and Xxxxx X. Xxxxx (referred to
herein as "Employee").
RECITALS
WHEREAS Employee is currently employed by and associated with the
Bank, and is currently a director of the Holding Company;
WHEREAS Employee desires to voluntarily resign his position as
director of the Holding Company;
WHEREAS the Bank desires to retain Employee's services for a period
of time commencing November 1, 1995 (the "Effective Date") and ending with
the expiration of the Employment Term (defined below), upon the terms set
forth herein;
WHEREAS Employee is willing to provide services to the Bank pursuant
to this Agreement;
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WHEREAS Employee previously entered into an agreement with the
Companies governing the terms and conditions of Employee's employment with
the Bank entitled "New Employment Agreement" and dated February 18, 1994 (the
"Prior Agreement"); and
WHEREAS both Employee and the Bank desire that the terms and
conditions of this Agreement shall cancel, supersede and supplant the terms
of the Prior Agreement.
NOW, THEREFORE, the parties agree for good and valuable
consideration the adequacy and receipt of which is hereby acknowledged:
1. TERMINATION OF DIRECTORSHIP. Employee acknowledges that
effective upon execution of this Agreement, he irrevocably resigns as a member
of the Holding Company's Board of Directors, and terminates all other
relationships with the Companies, except as specifically provided herein.
Pursuant to this Agreement, Employee will execute a written notice of
resignation in a substantially similar form as that attached hereto as Exhibit
A, and shall tender said written notice of resignation to the Chairman of the
Board, the President or the Secretary of the Holding Company immediately upon
execution of this Agreement. Further, within ten (10) days following the
Effective Date, Employee and the Companies will issue a mutually acceptable
press release, the terms of which are to be agreed upon in advance, concerning
Employee's resignation as Director of the Holding Company and Employee's
continuation as an employee of the Bank.
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2. EMPLOYMENT. Employee shall remain employed by the Bank
throughout the term of this Agreement (the "Employment Term," defined below),
and make himself available for such tasks as the President of the Bank may
reasonably request. In consideration for his employment with the Bank, Employee
shall receive a monthly salary from the Bank of $8,333.00, less applicable
withholding ("Salary Payments"), throughout the Employment Term. The Salary
Payments shall be made on the Bank's regular payroll dates in accordance with
the Bank's payroll practices. Further, the Bank shall furnish Employee with a
medical, dental and vision insurance plan commensurate with that received by
other Bank employees. Finally, Employee shall continue to participate in the
Bank's combined 401k/ESOP Plan until the end of the Employment Term. Employee
shall not be entitled to any other employee benefits including, but not limited
to, vacation pay, participation in bonus plans, stock plans, or other cash or
stock compensatory plans.
3. TERM OF EMPLOYMENT. The term of this Agreement shall commence
upon the Effective Date, and shall continue until October 31, 1997 (the "Initial
Term"). Thereafter, this Agreement may be renewed at the sole option of the
Bank every twelve (12) months for three (3) years (the "Renewal Terms"), and
under the following conditions and circumstances:
(a) The Renewal Terms will commence November 1, 1997, November
1, 1988, and November 1, 1999, respectively.
(b) In the event Employee wishes to renew this Agreement upon
expiration of the Initial Term or any Renewal Term, Employee should submit
a written
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request to the Board of Directors of the Bank at least 60 days prior to
the expiration of the term during which the request is made.
(c) The Board of Directors shall provide Employee with a written
response to any such request at least thirty (30) days prior to the end of
the term during which the request is made.
(d) The Initial Term and the Renewal Terms, if any, are referred
to collectively as the "Employment Term." In no event shall the Employment
Term extend beyond October 31, 2000.
4. STOCK OPTIONS. During the Employment Term, all incentive stock
options to purchase stock of the Holding Company held by Employee shall continue
to be outstanding and vest in accordance with their respective terms and the
terms of the stock option plans under which they were issued. Likewise, during
the Employment Term, all non-qualified stock options to purchase stock of the
Holding Company held by Employee shall continue to be outstanding and vest in
accordance with their respective terms and the terms of the stock option plans
under which they were issued.
5. NON-PARTICIPATION, NON-INTERFERENCE AND NON-COMPETITION.
Employee agrees that during the Employment Term:
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(a) Employee will not stand for election to the Board of
Directors of the Holding Company;
(b) Employee will not participate in, disrupt or in any way
interfere with the Companies' Board of Directors' meetings, annual shareholders'
meetings or any other of the Companies' respective corporate governance
activities, nor will he direct his affiliates or associates (as those terms are
defined in Regulation 12b-2 promulgated under the Securities and Exchange Act of
1934, as amended (the "Exchange Act Regulations")) to engage in such conduct;
(c) Employee will not conduct any business on behalf of the
Companies, hold himself out as a representative of the Companies or otherwise
participate in the respective business or affairs of the Companies, or their
respective subsidiaries, except as specifically requested in writing by the
President of the Bank, nor will he direct his affiliates or associates (as those
terms are defined in Regulation 12b-2 of the Exchange Act Regulations) to
engage in such conduct;
(d) Employee will not attempt to influence or disrupt the
management of the Companies, or their respective subsidiaries, nor will he
direct his affiliates or associates (as those terms are defined in Regulation
12b-2 of the Exchange Act Regulations) to engage in such influencing or
disruption;
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(e) Employee will not participate in any proxy contest or
interfere with any proxy solicitation efforts by the Holding Company, nor will
he direct his affiliates or associates (as those terms are defined in Regulation
12b-2 of the Exchange Act Regulations) to engage in such participation or
interference;
(f) Employee will not directly, indirectly or through his
affiliates or associates (as those terms are defined in Regulation 12b-2 of the
Exchange Act Regulations) engage in or otherwise be employed by or act as a
consultant or lender to, or be a director, officer, employee, member,
shareholder, investor, owner or partner of any other business or organization
which competes, directly or indirectly, with the Holding Company or the Bank or
any of their respective subsidiaries. For the purposes of this Agreement,
"compete" shall include, but not be limited to, soliciting business
relationships, or providing or attempting to provide products or services
similar to those provided by the Holding Company, the Bank or any of their
respective subsidiaries to existing or prospective clients of the Holding
Company, the Bank or any of their respective subsidiaries. This noncompetition
provision does not prevent (i) Employee's remaining a member of the board of
directors of Venture Lending and Leasing, Inc. (provided that Employee does not
act in any other capacity for, and does not participate in any other business
affairs of, Venture Lending and Leasing, Inc. [the "Leasing Company"], including
without limitation, as an employee of the Leasing Company and provided further
that if in the sole discretion of the Holding Company or the Bank, it is
determined during the Employment Term that the Leasing Company is in competition
with the Holding Company, the Bank, or any of their respective subsidiaries,
Employee shall step down from the board of the Leasing Company); or (ii)
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employment during the Employment Term, in a business, or becoming a partner,
shareholder holding less than a 25% interest in a company, director, or officer
of a business that does not compete with the Companies, provided that Employee
first obtains the written consent of the Holding Company or the Bank prior to
engaging in such employment or business (the Holding Company and the Bank shall
use best efforts to respond to Employee's written request for consent within 15
days after receipt by the Holding Company and the Bank of such request), and
(g) Employee agrees that he will be bound by and comply with
the provisions of the Bank's Code of Conduct, except to the extent that said
Code of Conduct conflicts with the terms of this Agreement, in which case the
terms of this Agreement shall control and be binding upon Employee.
Notwithstanding the foregoing, on or after the Effective Date, Employee may
purchase and hold stock in customers of the Bank.
6. DAMAGES FOR BREACH OF THE TERMS OF PARAGRAPH FIVE OF THE
AGREEMENT. Employee acknowledges that the terms contained in Paragraph 5 of
this Agreement are material terms of this Agreement, and that the Companies
entered into this Agreement in reliance upon Employee's agreement to said
terms. Employee further acknowledges that any violation of said terms shall
be considered a material breach of this Agreement. Further, Employee and the
Companies agree that it would be impractical or extremely difficult to fix
the actual damages sustained in the event Employee breaches the foregoing
terms. Accordingly, Employee and the Companies agree that in the event of a
breach of any of the terms of Paragraph 5 by Employee,
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Employee shall pay to the Companies $100,000 as liquidated damages, as that
amount is a reasonable pre-estimate of damages for each such breach.
7. REPRESENTATIONS AND WARRANTIES. Employee warrants and represents
that he has not competed with the Holding Company or the Bank as described in
Paragraph 6 of the Prior Agreement, and further warrants and represents that he
has fully complied with that Paragraph. Employee further warrants and
represents that he has not directed his affiliates or associates (as those terms
are defined in Regulation 12b-2 of the Exchange Act Regulations) to engage in
such competition, nor, to Employee's knowledge, have Employee's affiliates or
associates engaged in such competition. Employee further warrants and
represents that he understands that the Companies' execution of this Agreement
is contingent upon the truth of the foregoing representation, and that the
Companies would not have entered into this Agreement had they been aware that
Employee had engaged in the above-described conduct.
8. DAMAGES FOR BREACH OF WARRANTY. Employee acknowledges that his
representations and warranties made in Paragraph 7 of this Agreement are
material terms of this Agreement, and that the Companies entered into this
Agreement in reliance upon said representations and warranties. Further,
Employee and the Companies agree that it would be impractical or extremely
difficult to fix the actual damages sustained in the event Employee breached the
representations and warranties contained in Paragraph 7. Accordingly, Employee
and the Companies agree that in the event of a breach of the terms of Paragraph
7 of the
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Agreement Employee shall Employee shall pay to the Companies $100,000 as
liquidated damages, as that amount is a reasonable pre-estimate of damages
for such breach.
9. CONFIDENTIALITY. Employee agrees that both during and after the
Employment Term he will maintain confidentiality with respect to all
confidential and proprietary information of any type which he may have obtained
during the course of his service as an employee, officer or director of the
Holding Company or the Bank. Employee further agrees that both during and after
the Employment Term Employee will maintain the confidentiality of this Agreement
and its underlying facts and circumstances. Employee further agrees to return
to the Companies, upon their reasonable request, all manuals, documents, files
or other proprietary materials used by Employee during his service to the
Companies (which Employee hereby acknowledges to be property of the Companies),
unless Employee is expressly authorized by the President of the Bank to retain
and/or utilize such propriety materials in the performances of Employee's
obligations under this Agreement. Employee further agrees that the terms of
this Paragraph 9 shall survive the expiration, suspension or termination, for
any reason, of this Agreement and Employee's employment with the Bank.
10. NONDISPARAGEMENT. The Holding Company, the Bank and Employee
acknowledge and agree that they shall not now or in the future mention to any
other person in a business-related context any negative or disparaging comments
or statements about the other, or any of their respective officers, agents or
employees, including disparaging or negative comments regarding business
practices, and that none of them shall communicate to any person any facts or
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opinions that might tend to reflect adversely upon the other or to harm the
reputation of the other in conduct of their respective personal, business or
professional affairs. Without limiting the generality of the foregoing
sentence, the Holding Company and Bank agree that, when responding to inquiries
by third parties regarding the circumstances of Employee's departure from the
Board of Directors of the Holding Company, the Holding Company and/or the Bank
will communicate that Employee left in good standing. For the purposes of this
provision, the "Holding Company" and the "Bank" shall refer only to their
respective executive officers and directors.
11. EARLY TERMINATION. Subject to the provisions of Paragraph 3 of
this Agreement regarding Renewal Terms, Employee's employment shall terminate as
of the end of the Employment Term (defined above), except as mutually agreed in
writing by Employee and the Bank.
12. TERMINATION FOR CAUSE. Notwithstanding the provisions of
Paragraph 11 of this Agreement, the Bank shall have the right to terminate
Employee's employment at any time during the Employment Term for cause. For
purposes of this Agreement, "cause" shall mean (a) any act of dishonesty,
unauthorized disclosure of confidential information or fraud by Employee; (b)
the commission of a felony; (c) misconduct, including insubordination, with
respect to the duties and obligations of Employee under this Agreement; (d) the
engagement by Employee in conduct which is injurious to either of the Companies,
or to their business reputation; or (e) a breach by Employee of any of his
obligations under this Agreement, provided, however, if Employee commits a
breach of any of the provisions of this Agreement, the Bank first shall given
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written notice to Employee of such breach, and Employee shall be granted seven
(7) days within which to cure such breach, in all instances except the
following:
a. Any breach of the terms of Paragraph 5 of this Agreement; and/or
b. Any breach of the warranties contained in Paragraph 7 of
this Agreement.
The Bank's right to to terminate Employee pursuant to the terms of this
Paragraph 12 is in addition to and shall in no way limit the Bank's rights under
Paragraphs 6 and 8 of this Agreement. Further, Employee and the Companies agree
that in the event of a breach or default by Employee, the foregoing provision
shall not limit the Companies' ability to seek and obtain such other and further
equitable relief as they may be entitled to including, but not limited to,
specific performance and injunctive relief, and that, except as expressly stated
in this Agreement, the rights and remedies of the Companies are cumulative, and
the exercise by the Companies of one or more of such rights or remedies shall
not preclude the exercise by them, at the same time or different times, of any
other rights or remedies for the same breach or default hereunder.
13. TERMINATION OF THE BANK'S OBLIGATIONS UNDER THIS AGREEMENT. All
obligations of the Bank under this Agreement, including but not limited to its
obligation to provide Employee with Salary Payments and insurance as described
in Paragraph 2 of this Agreement, shall cease upon the termination of Employee's
employment with the Bank, whether such termination results from the expiration
of the Employment Term, Employee's termination pursuant to Paragraphs 11 or 12
of the Agreement, Employee's death, or any other circumstance.
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14. NON-INSIDER. Commencing on January 1, 1996, Employee shall not
be deemed an "insider" for purposes of compliance with the Holding Company's
Xxxxxxx Xxxxxxx Policy. Notwithstanding the foregoing, Employee shall continue
to be bound by applicable provisions of federal and state securities laws,
including without limitation, Section 16 of the Securities Exchange Act of 1934
and Rule 144 promulgated under the Securities Act of 1933.
15. NO ORAL MODIFICATION. This Agreement may only be amended in
writing signed by Employee and an authorized representative of each of the
Holding Company and the Bank.
16. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of California.
17. NO JURY TRIAL. IN THE EVENT OF A DISPUTE BETWEEN EMPLOYEE
AND THE HOLDING COMPANY OR THE BANK ARISING FROM OR RELATED TO THIS AGREEMENT
OR ITS PERFORMANCE OR BREACH, OR FROM EMPLOYEE'S EMPLOYMENT RELATIONSHIP WITH
THE BANK, THE PARTIES HEREBY AGREE THAT ANY SUCH DISPUTE SHALL BE RESOLVED
BEFORE A COURT OF COMPETENT JURISDICTION IN THE
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STATE OF CALIFORNIA, AND BE TRIED TO A JUDGE OF SUCH COURT WITHOUT A JURY.
THE PARTIES HEREBY ACKNOWLEDGE THAT THEY ARE GIVING UP THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY, AND DO SO KNOWING THE CONSEQUENCES OF SUCH WAIVER.
18. AMBIGUITY. It is agreed and understood that the general rule
that ambiguities are to be construed against the drafter shall not apply to
this agreement. In the event any language of this Agreement is found to be
ambiguous, each party shall have an opportunity to present evidence as to the
actual intent of the parties with respect to any such ambiguous language,
consistent with the parole evidence rule.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof
and supersedes prior written or oral agreement with respect to their
relationship, including specifically the Prior Agreement. The parties
acknowledge that this Agreement covers the relationship between the parties.
IN WITNESS WHEREOF the parties execute this Agreement as of
October 24, 1995.
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SILICON VALLEY BANK
By:
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Title:
SILICON VALLEY BANCSHARES
By:
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Title:
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Xxxxx X. Xxxxx
DATED: October 24, 1995
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SILICON VALLEY BANCSHARES MEMORANDUM
To: Board of Directors, Silicon Valley Bancshares
From: Xxxxx X. Xxxxx
cc: President, Silicon Valley Bancshares
Dated: October 24, 1995
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Effective as of Ocotber 24, 1995, I hereby resign my position as
Director of Silicon Valley Bancshares.
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Xxxxx X. Xxxxx
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