CONFIDENTIAL SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASE
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For good and valuable consideration, receipt of which is hereby
acknowledged, and in order to resolve and settle finally, fully and completely
all matters that now or may exist between them, the parties agree as follows:
1. PARTIES. The parties to this Agreement are Xxxxxx X. Xxxxxx, his heirs,
representatives, successors and assigns (hereinafter referred to collectively as
"Xxxxxx") and Union Bank of California, N.A., its parent, affiliated, and
subsidiary corporations, its and their successors and assigns, and the past and
present officers, directors, employees, shareholders, agents and employee
benefit plans of each (hereinafter referred to collectively as the "Bank").
2. RELEASE OF CLAIMS BY XXXXXX. In exchange for the promises contained in
this Agreement, the adequacy of which as consideration is hereby acknowledged,
Xxxxxx hereby fully releases and forever discharges the Bank from any and all
actions, causes of action, claims, demands, damages, and liabilities of
whatsoever kind or character, in law or in equity, now known or unknown,
suspected or unsuspected, past or present, that he has ever had or currently may
have against the Bank including, but not limited to, claims of race, sex,
religious, age, disability, medical condition (in and as defined under
California law), marital status, veteran status, sexual orientation or national
origin discrimination under Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act of 1990, as amended, the Age
Discrimination in Employment Act, as amended, the Family and Medical Leave Act,
the Employee Retirement Income Security Act of 1974, as amended, the California
Fair Employment and Housing Act, as amended, the California Labor Code, as
amended, and any other federal, state or local laws, arising out of or in any
way related to Xxxxxx'x employment relationship with the Bank or the termination
of that employment relationship. Except as otherwise may be permitted by law,
Xxxxxx further agrees not to institute in any state or federal court any action
or claim of any kind against the Bank arising out of any claims released by
Xxxxxx under this Agreement. Execution of this document by Xxxxxx operates as a
complete bar and defense against any and all current claims of any type that may
be made by Xxxxxx against the Bank, provided, however, that nothing in this
release is intended to affect Xxxxxx'x right to seek a remedy in arbitration to
resolve any controversy arising out of the construction or application of the
terms, provisions or conditions of the Agreement. Notwithstanding the foregoing,
nothing in this Paragraph 2 is intended to constitute a waiver by Xxxxxx of (a)
any right or claim to indemnification, nor or in the future, including without
limitation, any right Xxxxxx may have under (i) the Bank's certificate of
incorporation, bylaws, or other applicable internal policies; (ii) California
law; or (iii) directors' and officers' liability insurance policies or coverage
thereunder in connection with his employment or service as an officer or
director of the Bank; (b) any rights as a shareholder of the Bank; or (c) any
rights under this Agreement.
3. RELEASE OF CLAIMS BY THE BANK. In exchange for the promises contained in
this Agreement, the adequacy of which as consideration is hereby acknowledged,
and to the extent permitted by law, the Bank hereby fully releases and forever
discharges Xxxxxx from any and all actions, causes of action, claims, demands,
damages, and liabilities of whatsoever kind or
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character, in law or in equity, now known or unknown, suspected or unsuspected,
past or present, that it has ever had or currently may have against Xxxxxx
arising out of or in any way related to Xxxxxx'x employment relationship with
the Bank or the termination of that employment relationship, or Xxxxxx'x service
as an officer or director of the Bank. Except as otherwise may be permitted by
law, the Bank further agrees not to institute in any state or federal court any
action or claim of any kind against Xxxxxx arising out of any claims released by
the Bank under this Agreement. Execution of this document by the Bank operates
as a complete bar and defense against any and all current claims of any type
that may be made by the Bank against Xxxxxx and released hereunder, provided,
however, that nothing in this release is intended to affect the Bank's right to
seek a remedy in arbitration to resolve any controversy arising out of the
construction or application of the terms, provisions or conditions of the
Agreement. By his signature hereon, Xxxxxx acknowledges that he knows of no
facts which, if known by the Bank, would have materially affected the Bank's
decision to enter into the release in favor of Xxxxxx set forth in this
Paragraph 3.
4. WAIVER OF RIGHTS UNDER CIVIL CODE SECTION 1542. As a further
consideration and inducement for this Agreement, the Bank and Xxxxxx hereby
waive and release any and all rights under Section 1542 of the California Civil
Code or any analogous state, local or federal law, statute, rule, order or
regulation either has or may have against the other. California Civil Code
Section 1542 reads as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
The parties hereby expressly agree that this Agreement shall extend and apply to
all unknown, unsuspected and unanticipated injuries and damages as well as those
that are now disclosed.
5. TERMINATION OF EMPLOYMENT; NOTICE PERIOD. Xxxxxx and the Bank agree that
his employment shall end on June 30, 2004 (the "Termination Date"). Xxxxxx shall
maintain his title of Vice Chair through the Termination Date; however, Xxxxxx
shall not be deemed a policy making officer of the Bank or UnionBanCal
Corporation ("UNBC") after March 31, 2004. Xxxxxx shall continue to serve as
Group Head, Commercial Financial Services Group ("CFSG") through March 31, 2004.
Commencing on April 1, 2004, Xxxxxx shall be deemed to be on notice through the
Termination Date (the "Notice Period"), and shall make himself available during
the Notice Period when reasonably requested by the Bank's Chief Executive
Officer ("CEO") for consultation concerning the Bank's activities (unless
precluded therefrom by Xxxxxx'x death or disability). Xxxxxx shall continue to
receive regular salary payments and benefits, including vacation accrual,
through the Termination Date. Xxxxxx'x entitlement to the salary payments and
benefits described in this Paragraph 5 shall not be affected in the event of his
death or disability during the Notice Period, except that Xxxxxx may not receive
both salary payments and benefits under the Bank's short term disability program
for any period of disability during the Notice Period.
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6. SPECIAL SEPARATION BENEFITS. In consideration of the promises made by
Xxxxxx herein, the Bank shall do the following:
(a) SEPARATION PAY PLAN BENEFITS. Commencing on July 1, 2004, Xxxxxx
shall be eligible to participate in and receive benefits at the Vice Chair
level under the Union Bank of California, N.A. Separation Pay Plan in
effect at the time this Agreement is executed by Xxxxxx (the "Separation
Pay Plan"), subject to the eligibility requirements and other terms and
conditions of the such Plan, to the extent not otherwise modified by and/or
specifically provided for in this Agreement. The Bank shall not be required
to provide any additional written notice of position elimination to Xxxxxx
other than as set forth in Paragraph 5 of this Agreement and the Notice
Period described in Paragraph 5 shall be deemed to satisfy any notice
requirement under the Separation Pay Plan. Under the Separation Pay Plan,
Xxxxxx shall receive one hundred and four (104) weeks of separation pay
allowance and benefit continuation, less applicable deductions and
withholdings. Separation pay allowance payments shall be made in equal
installments on the Bank's regularly scheduled pay days and shall end on
June 30, 2006. For purposes of separation pay allowance, Xxxxxx'x base
salary shall be $1,000,000.00 annually, which shall be deemed to fully
satisfy the "base pay" component (including any amounts for "bonus
averaging") under the Separation Pay Plan. Xxxxxx also shall receive
additional supplemental amounts of $13,200.00 (which represents annual
automobile allowance), and $4,800.00 (which represents annual dues for
Xxxxxx'x membership in the Peninsula Country Club), totaling $18,000.00
annually. This amount shall be augmented by an additional gross amount
which, when subjected to applicable withholding, results in a net amount of
$7,176.00 (which represents annual dues for Xxxxxx'x memberships in the
Bankers Club and the California Club). Subject to the provisions of
Paragraphs 7 and 12 of this Agreement, Xxxxxx'x entitlement to receive
benefits under the Separation Pay Plan shall not be affected in the event
that Xxxxxx is employed by an entity that subsequently is acquired by or
becomes affiliated with the Bank through merger, acquisition or any other
form of transfer prior to June 30, 2006, and in such case, Xxxxxx shall not
be required to repay any separation pay allowance or other benefits
received under this Agreement, nor shall Xxxxxx be entitled to any benefits
or rights under the Change-of-Control Agreement between Xxxxxx and UNBC
dated May 1, 2003 (the "Change-of-Control Agreement"). Further, Xxxxxx'x
rights to employment benefits on the same basis as other similarly situated
employees of the acquired or affiliated entity shall not be affected. A
copy of the Separation Pay Plan Summary Plan Description (entitled
"Memorandum Regarding Union Bank of California, N.A. Termination Pay Plan
and Separation Pay Plan") (the "Summary Plan Description") is attached
hereto as Exhibit X. Xxxxxx'x eligibility to participate in and receive
benefits under the Separation Pay Plan as set forth in this Paragraph 6 is
expressly conditioned upon Xxxxxx'x execution and nonrevocation of this
Agreement.
(b) SENIOR MANAGEMENT BONUS PLAN. Upon Xxxxxx'x execution and
nonrevocation of this Agreement, Xxxxxx shall receive a partial award under
the Union Bank of California Senior Management Bonus Plan or any successor
thereto (the "Bonus Plan") in connection with Xxxxxx'x performance for
calendar year 2004. For purposes of
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this Agreement, the parties agree that such award shall be in the gross
amount of $231,750.00), less applicable deductions and withholdings.
Xxxxxx'x entitlement to an award in the amount set forth in this
subparagraph 6(b) is expressly conditioned upon his execution and
nonrevocation of this Agreement. In the absence of such execution and
nonrevocation, Xxxxxx'x entitlement to an award under the Bonus Plan, if
any, shall be governed exclusively by the terms and conditions of such
Plan.
(c) FINANCIAL COUNSELING SERVICES. In addition to the two (2) years of
financial counseling services to which Xxxxxx will be entitled upon his
execution and nonrevocation of this Agreement and as described in the
Summary Plan Description, the Bank shall provide Xxxxxx with an additional
one (1) year of such services. In all other respects, Xxxxxx'x eligibility
for and receipt of financial counseling services shall be as provided for
in the Summary Plan Description.
Xxxxxx'x entitlement to the payments and benefits described in this Paragraph 6
shall not be affected in the event of his death prior to July 1, 2004.
7. POST-EMPLOYMENT MATTERS.
(a) NONSOLICITATION. Xxxxxx agrees that during the period in which he
is receiving separation pay allowance under subparagraph 6(a) of this
Agreement, he shall not:
(i) induce, solicit, recruit or encourage any employee of the
Bank to leave the employ of the Bank by:
(A) disclosing to any third party the names, backgrounds or
qualifications of any Bank employees or otherwise identifying
them as potential candidates for employment with a third party;
or
(B) personally or through any other person approaching,
recruiting, interviewing or otherwise soliciting any Bank
employees to work for a third party; or
(ii) solicit, either on behalf of Xxxxxx or any third party, the
business of any client or customer of the Bank or any prospective
customer or client of the Bank by using any Confidential Information
(as such term is defined in Paragraph 12 of this Agreement).
(b) NONCOMPETITION. Xxxxxx acknowledges that if he were to engage in
activities on behalf of a competitor following his employment by the Bank,
such would dilute the value of the Bank's business. Therefore, Xxxxxx
agrees that during the period in which he is receiving separation pay
allowance under subparagraph 6(a) of this Agreement, he shall not, without
the prior written consent of the Bank, engage in any business that competes
with the activities of the Bank within the state of California.
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Notwithstanding the foregoing, Xxxxxx shall not be deemed to be in
violation of this subparagraph 7(b) in the event that he is elected as a
director on the board of a financial institution with assets of $3 billion
or less.
8. FULL SATISFACTION OF ALL OTHER PAYMENTS AND OBLIGATIONS. Except for
those obligations and payments on the part of the Bank set forth in this
Agreement and those benefits to which Xxxxxx is entitled pursuant to this
Agreement, Xxxxxx expressly acknowledges and agrees that the special separation
benefits described in Paragraph 6 constitute full, final and complete
satisfaction of all amounts due to him now or in the future by the Bank and/or
under the Employment Agreement between Xxxxxx and the Bank dated January 1, 1998
(the "Employment Agreement"), the Change-of-Control Agreement, and the Bonus
Plan. Notwithstanding the foregoing, nothing in this Paragraph 8 is intended to
affect Xxxxxx'x entitlement to benefits under any employee benefit plans or
programs in which Xxxxxx currently is or may become a participant, subject to
the eligibility requirements and other terms and conditions of such plans and
programs, nor shall this Agreement affect Xxxxxx'x eligibility for the "Net
Benefit" described in subparagraph 4(d) of the Employment Agreement (which
provision shall be deemed to be incorporated herein as if set out in full). To
the extent the benefits available to participants under any of the Bank's
employee benefit plans and programs are based on such a distinction, Xxxxxx
shall be entitled to receive benefits at the levels provided or specified
therein for policy making officers. Xxxxxx shall not be eligible for any awards
of long term incentives, including grants of stock options or restricted stock
under the UnionBanCal Corporation Management Stock Plan or any successor thereto
(the "Management Stock Plan") or awards of performance shares under the
UnionBanCal Corporation Performance Share Plan (the "Performance Share Plan") or
any successor thereto, in connection with his performance in calendar year 2004.
Except as otherwise specifically provided for in this Agreement, Xxxxxx'x
entitlement to, participation in, and/or receipt of benefits under any of the
Bank's employee benefit, incentive, equity and perquisite plans and programs
(including, without limitation, the Management Stock Plan and the Performance
Share Plan) shall in all respects be governed by the eligibility requirements
and other terms and conditions of such plans and programs and the determinations
of the administrators of such plans and programs.
9. PERIOD TO REVIEW AGREEMENT. Xxxxxx understands that he has twenty-one
(21 ) calendar days from the date this Agreement is received to review the
Agreement and decide whether to sign. Xxxxxx acknowledges that he has been
advised to seek legal counsel regarding the terms and conditions of this
Agreement. Xxxxxx understands that he may revoke the Agreement upon written
notice to the Bank within seven (7) days after the date he signs it. The
Agreement shall not become effective or enforceable until the eighth (8th) day
after its execution.
10. NO ADMISSION OF LIABILITY. By entering into this Agreement, the Bank
does not admit any liability whatsoever to Xxxxxx or to any other person arising
out of any claims heretofore or hereafter asserted by Xxxxxx, and the Bank
expressly denies any and all liability. In addition, this Agreement may not be
used as evidence to prove alleged discrimination, or any other alleged wrong, in
any action brought or proceeding initiated by Xxxxxx or any other individual or
entity.
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11. CONFIDENTIALITY COVENANT. Xxxxxx agrees that this Agreement, the terms
and conditions of this Agreement, and any and all actions in accordance
therewith, are strictly confidential. Therefore, the terms and conditions of
this Agreement shall not be disclosed, discussed, or revealed by Xxxxxx to any
other persons, entities or organization, whether within or outside the Bank,
except by Xxxxxx to his immediate family, attorney or personal financial
advisors, or as may be required by applicable law or to enforce the terms
hereof. The foregoing shall not apply to the extent this Agreement has become
part of the public record.
12. TRADE SECRETS AND CONFIDENTIAL INFORMATION; ATTORNEY-CLIENT PRIVILEGED
INFORMATION; NONDISPARAGEMENT. Xxxxxx acknowledges and agrees that in the course
of employment with the Bank he has acquired confidential information and trade
secrets concerning the Bank, business strategies, corporate structure,
regulatory issues, securities, litigation, claims, threatened claims, affiliate
transactions, the Bank's and/or UNBC's Board of Directors, Committee business of
the Bank's and/or UNBC's Board of Directors, government relations, Office of the
Comptroller of the Currency relations, and other highly private and confidential
data, but excluding information which is not a trade secret or not otherwise
entitled to confidentiality under California law (collectively, the
"Confidential Information"). Xxxxxx agrees that he shall not use or divulge any
Confidential Information acquired during the course of his employment with the
Bank to any third party, except as may be required pursuant to subpoena, court
order or other proper legal process, and in such case, only after Xxxxxx has
provided sufficient notice to the Bank that disclosure of Confidential
Information is being sought to allow the Bank a reasonable opportunity to object
to such disclosure or seek a protective order. Xxxxxx further acknowledges and
agrees that in the course of employment with the Bank he has acquired
information (some of which may also constitute Confidential Information) that is
protected from disclosure by the attorney-client and attorney work product
privileges. Xxxxxx agrees that he will not reveal or divulge any privileged
information to any third party without an explicit written waiver of the
attorney-client and attorney work product privileges by the Bank's Chief
Executive Officer, except as may be required pursuant to subpoena, court order
or other proper legal process, and in such case, only after Xxxxxx has invoked
the attorney-client and work product privileges and provided sufficient notice
to the Bank that disclosure of privileged information is being sought to allow
the Bank a reasonable opportunity to object to such disclosure or seek a
protective order. Xxxxxx and the Bank each agree that they shall make no
comments or statements which disparage the other.
13. NO OUTSTANDING CLAIMS/UNREPORTED INJURIES. Xxxxxx confirms and
represents that he does not have any lawsuits, charges, administrative
proceedings, claims or other actions currently on file, lodged or pending
against the Bank. Xxxxxx further represents that he has reported to the Bank any
and all work-related injuries that he has suffered or sustained during his
employment with the Bank up to the date of his signing this Agreement.
14. SEVERABILITY. If any of the provisions herein are determined to be
invalid by a court or government agency of competent jurisdiction, in whole or
in part, it is agreed that such determination shall not affect the
enforceability of the other provisions herein. The laws of the State of
California shall govern the validity and interpretation of this Agreement,
except as otherwise provided in Paragraph 15. The parties stipulate that
jurisdiction and venue shall lie
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exclusively in the State of California, County of San Francisco, for any action
or arbitration involving the validity, interpretation, or enforcement of this
Agreement, or for any claim for breach of this Agreement, for damages, or for
any other relief brought under this Agreement.
15. ARBITRATION. With the exception of an action or proceeding in any court
of competent jurisdiction for the purpose of obtaining injunctive relief, any
controversy between the Bank and Xxxxxx, including, but not limited to, any
controversy arising out of Xxxxxx'x employment or the termination thereof,
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, or involving an arbitrable claim of race, sex,
religious, age, disability, medical condition (in and as defined under
California law), marital status, veteran status, sexual orientation or national
origin discrimination under Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act of 1990, as amended, the Age
Discrimination in Employment Act, as amended, the Family and Medical Leave Act,
the California Fair Employment and Housing Act, as amended, the California Labor
Code, as amended, or any other federal, state or local laws, shall be settled by
final and binding arbitration in accordance with the Federal Arbitration Act and
the applicable rules of the American Arbitration Association, and judgment on
the award rendered by the arbitrator(s) may be entered by any court having
jurisdiction thereof. Reasonable limited discovery will be permitted in the form
of the right of each party to take the deposition of one individual and any
expert witness designated by the other party. Each party shall also have the
right to make requests for discovery of relevant documents to the other party.
Additional discovery may be had only where the arbitrator so orders, upon a
showing of substantial need. The Bank and Xxxxxx each shall bear their own costs
and legal fees associated with the arbitration, except that the arbitrator shall
award reasonable legal fees to the prevailing party in the arbitration.
Notwithstanding the foregoing, the Bank shall bear the cost of the arbitrator
(including the costs of establishing a facility for and otherwise administering
the arbitration). The location of the arbitration shall be in San Francisco,
California, and the arbitration shall be conducted so as to result in the
rendering of the arbitrator's decision within ninety (90) days after the
original demand for arbitration. The arbitrator shall be required to issue
written findings and conclusions underlying the basis of such decision.
This Paragraph 15 and the obligations provided for herein shall survive the
termination of this Agreement and remain in full force and effect following the
termination of Xxxxxx'x employment with the Bank.
16. SCOPE OF AGREEMENT. Xxxxxx hereby affirms and acknowledges that he has
read the foregoing Agreement and he fully understands and appreciates the
meaning of each of its terms. Xxxxxx further acknowledges that he has been
advised to seek legal counsel and has had an opportunity to do so. The parties
to this Agreement agree that this Agreement may be used as evidence in a
subsequent proceeding in which any of the parties allege a breach of the
Agreement or to enforce the provisions of this Agreement.
17. INDIVIDUAL AGREEMENT. This Agreement has been individually negotiated
and is not part of a group exit incentive or other termination program.
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18. ENTIRE AGREEMENT. This Agreement constitutes the complete understanding
between Xxxxxx and the Bank and supersedes any and all prior agreements,
promises or inducements, no matter what form, concerning its subject matter. No
promises or agreements made subsequent to the execution of this Agreement by
these parties shall be binding unless reduced to writing and signed by these
parties.
XXXXXX ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT,
UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT.
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF
ALL KNOWN AND UNKNOWN CLAIMS.
UNION BANK OF CALIFORNIA, N.A.
DATED: April 16, 2004 By: /S/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
Executive Vice President
DATED: April 16, 2004 /S/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
