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AMENDED AND RESTATED
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF SAN XXXXXXX VALLEY
EMPLOYMENT AGREEMENT
This AGREEMENT ("Agreement") is made effective as of June 28, 1995, and is
amended and restated as of July 24, 1998, by and among First Federal Savings and
Loan Association of San Xxxxxxx Valley (the "Association"), a federally
chartered savings institution, with its principal administrative office at 000
Xxxxx Xxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxxxxx, XXX Bancorp, Inc., a corporation
organized under the laws of the State of Delaware, the holding company for the
Association (the "Holding Company"), and Xxxxxxx X. Xxxxxxxx ("Executive").
WHEREAS, the Association wishes to assure itself of the services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Association on
a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. POSITION AND RESPONSIBILITIES.
During the period of his employment hereunder, Executive agrees to serve
President and Chief Executive Officer of the Association. Executive shall render
administrative and management services to the Association such as are
customarily performed by persons in a similar executive capacity. During said
period, Executive also agrees to serve, if elected, as an officer and director
of the Holding Company or any subsidiary of the Association.
2. TERMS AND DUTIES.
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months thereafter (the "initial
term"). Commencing on the first anniversary date of this Agreement, and
continuing on each anniversary date thereafter, the disinterested members of the
board of directors of the Association ("Board") may extend the Agreement an
additional year such that the remaining term of the Agreement shall be three (3)
years unless the Executive elects not to extend the term of the Agreement by
giving written notice in accordance with Section 8 of this Agreement. The Board
will review the Agreement and Executive's performance annually for purposes of
determining whether to extend the Agreement and the rationale and results
thereof shall be included in the minutes of the Board's meeting. The Board shall
give notice to the Executive as soon as possible after such review as to whether
the Agreement is to be extended. Notwithstanding any other provisions of this
Agreement, however, in the event of a Change in Control as hereinafter defined
in Section 5, the Agreement shall be automatically renewed such that the initial
term of
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employment shall commence on the date the Change in Control occurs and the term
of employment shall end on the date three (3) years thereafter.
(b) During the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the organization,
operation and management of the Association and participation in community and
civic organizations; provided, however, that, with the approval of the Board, as
evidenced by a resolution of such Board, from time to time, Executive may serve,
or continue to serve, on the boards of directors of, and hold any other offices
or positions in, other companies, which, in such Board's judgment, will not
present any conflict of interest with the Association, or materially affect the
performance of Executive's duties pursuant to this Agreement. Executive may also
serve, or continue to serve, on the boards of directors of, and hold any other
offices or positions in, community and civic organizations, which, in the
Board's judgment, will not present any conflict of interest with the Holding
Company or its Subsidiaries, or materially affect the performance of Executive's
duties pursuant to this Agreement; provided Executive notify the Board of such
activity and the Board does not take Board action to object to such activity.
(c) Notwithstanding anything herein to the contrary, Executive's
employment with the Association may be terminated by the Association or the
Executive during the term of this Agreement, subject to the terms and conditions
of this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The Association shall pay Executive as compensation a salary of not
less than $188,256 per year ("Base Salary"). Base Salary shall also include any
amounts of compensation deferred by Executive under any tax qualified or
unqualified plan maintained by the Association. Such Base Salary shall be
payable semi-monthly. During the period of this Agreement, Executive's Base
Salary shall be reviewed at least annually; the first such review will be made
no later than one year from the date of this Agreement. Such review shall be
conducted by the Board or by a Committee of the Board, delegated such
responsibility by the Board. The Committee or the Board may increase Executive's
Base Salary. Any increase in Base Salary shall become the "Base Salary" for
purposes of this Agreement from the date of such increase. In addition to the
Base Salary provided in this Section 3(a), the Association shall also provide
Executive, at no premium cost to Executive, with all such other benefits as are
provided uniformly to permanent full-time employees of the Association.
(b) The Executive shall be entitled to participate in any employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Association will not,
without Executive's prior written consent, make any changes in such plans,
arrangements or perquisites which would materially adversely affect Executive's
rights or benefits thereunder; except to the extent such changes are made
applicable to all Association
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employees eligible to participate in such plans, arrangements and perquisites on
a non-discriminatory basis. Without limiting the generality of the foregoing
provisions of this Subsection (b), Executive shall be entitled to participate in
or receive benefits under any employee benefit plans, including but not limited
to, retirement plans, supplemental retirement plans, pension plans,
profit-sharing plans, stock option or restricted stock award plans,
health-and-accident plans, medical coverage or any other employee benefit plan
or arrangement made available by the Association in the future to its senior
executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. Executive shall be entitled to incentive compensation and bonuses
as provided in any plan of the Association in which Executive is eligible to
participate. Nothing paid to the Executive under any such plan or arrangement
will be deemed to be in lieu of other compensation to which the Executive is
entitled under this Agreement.
(c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3 and other compensation provided for by paragraph (b) of this Section
3, the Association shall pay or reimburse Executive for all reasonable travel
and other reasonable expenses incurred by Executive performing his obligations
under this Agreement and may provide such additional compensation in such form
and such amounts as the Board may from time to time determine.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following: (i) the
termination by the Association or the Holding Company of Executive's full-time
employment hereunder for any reason other than a termination governed by Section
5(a) hereof, or Termination for Cause, as defined in Section 7 hereof; (ii)
Executive's resignation from the Association's employ upon any (A) failure to
elect or reelect or to appoint or reappoint Executive as President and Chief
Executive Officer, unless consented to by the Executive, (B) a material change
in Executive's function, duties, or responsibilities with the Association, which
change would cause Executive's position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described in
Section 1, above, unless consented to by Executive, (C) a relocation of
Executive's principal place of employment by more than 30 driving miles from its
location at the effective date of this Agreement, unless consented to by the
Executive, (D) a material reduction in the benefits and perquisites to the
Executive from those being provided as of the effective date of this Agreement,
unless consented to by the Executive, (E) a liquidation or dissolution of the
Association or Holding Company, or (F) breach of this Agreement by the
Association. Upon the occurrence of any event described in clauses (A), (B),
(C), (D), (E) or (F), above, Executive shall have the right to elect to
terminate his employment under this Agreement by resignation upon not less than
sixty (60) days prior written notice given within six full calendar months after
the event giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 8, the Association shall pay Executive, or,
in the event of his subsequent death,
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his beneficiary or beneficiaries, or his estate, as the case may be a sum equal
to the payments due to the Executive for the remaining term of the Agreement,
including but not limited to Base Salary, bonuses and any other cash deferred
compensation paid or to be paid, to the Executive, and the amount equal to the
annual contributions that would have been made on Executive's behalf to any
employee benefit plans of the Association or the Holding Company during the
remaining term of this Agreement based on contributions or payments made (on an
annualized basis) at the Date of Termination; provided, however, that any
payments pursuant to this subsection shall not, in the aggregate, exceed three
times Executive's average annual compensation for the five most recent taxable
years that Executive has been employed by the Association or such lesser number
of years in the event that Executive shall have been employed by the Association
for less than five years. In the event the Association is not in compliance with
its minimum capital requirements or if such payments pursuant to this subsection
(b) would cause the Association's capital to be reduced below its minimum
regulatory capital requirements, such payments shall be deferred until such time
as the Association or successor thereto is in capital compliance. At the
election of the Executive, which election is to be made prior to an Event of
Termination, such payments shall be made in a lump sum as of the Executive's
Date of Termination. In the event that no election is made, payment to Executive
will be made on a monthly basis in approximately equal installments during the
remaining term of the Agreement. Such payments shall not be reduced in the event
the Executive obtains other employment following termination of employment.
(c) Upon the occurrence of an Event of Termination, the Association will
cause to be continued for the Executive and his previously covered dependents
life, medical, dental and disability coverage that the Executive agrees is
substantially equivalent to the coverage maintained by the Association or the
Holding Company for Executive and his dependents prior to his termination at no
cost to the Executive, except to the extent such coverage may be changed in its
application to all Association or Holding Company employees. Such coverage shall
cease upon the expiration of the remaining term of this Agreement.
5. CHANGE IN CONTROL.
(a) For purposes of this Agreement, a "Change in Control" of the
Association or Holding Company shall mean an event of a nature that: (i) would
be required to be reported in response to Item 1(a) of the current report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or (ii)
results in a Change in Control of the Association or the Holding Company within
the meaning of the Home Owners' Loan Act of 1933, as amended, the Federal
Deposit Insurance Act and the Rules and Regulations promulgated by the Office of
Thrift Supervision ("OTS") (or its predecessor agency), as in effect on the date
hereof (provided, that in applying the definition of change in control as set
forth under the rules and regulations of the OTS, the Board shall substitute its
judgment for that of the OTS); or (iii) without limitation such a Change in
Control shall be deemed to have occurred at such time as (A) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of voting securities of the Association or the Holding
Company representing 20% or more of the Association's or the Holding Company's
outstanding voting securities or right to acquire
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such securities except for any voting securities of the Association purchased by
the Holding Company and any voting securities purchased by any employee benefit
plan of the Association or the Holding Company, or (B) individuals who
constitute the Board on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Holding Company's stockholders
was approved by a Nominating Committee solely composed of members who are
Incumbent Board Members, shall be, for purposes of this clause (B), considered
as though he were a member of the Incumbent Board, (C) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of the
Association or the Holding Company or similar transaction occurs or is
effectuated in which the Association or Holding Company is not the resulting
entity; provided, however, that such an event listed above will be deemed to
have occurred or to have been effectuated upon the receipt of all required
federal regulatory approvals not including the lapse of any statutory waiting
periods, or (D) a proxy statement shall be distributed soliciting proxies from
stockholders of the Holding Company, by someone other than the current
management of the Holding Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Holding Company or Association
with one or more corporations as a result of which the outstanding shares of the
class of securities then subject to such plan or transaction are exchanged for
or converted into cash or property or securities not issued by the Association
or the Holding Company shall be distributed; or (E) a tender offer is made and
accepted for 20% or more of the voting securities of the Association or Holding
Company then outstanding.
(b) If a Change in Control has occurred pursuant to Section 5(a) or the
Board has determined that a Change in Control has occurred, Executive shall be
entitled to the benefits provided in paragraphs (c), and (d) of this Section 5
upon his subsequent termination of employment at any time during the term of
this Agreement due to: (1) Executive's dismissal or (2) Executive's voluntary
resignation unless such termination is because of his death or Termination for
Cause.
(c) Upon Executive's entitlement to benefits pursuant to Section 5(b), the
Association shall pay Executive, or in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both a sum equal to the greater of: (1) the
payments due for the remaining term of the Agreement; or 2) three (3) times
Executive's highest annual compensation for the last 5 years. Such annual
compensation shall include Base Salary, commissions, bonuses, contributions or
accruals on behalf of Executive to any pension and profit sharing plans, any
benefits to be paid or received under any stock-based benefit plan, severance
payments, directors or committee fees and fringe benefits paid or to be paid to
the Executive during such years. At the election of the executive, which
election is to be made prior to a Change in Control, such payment shall be made:
(a) in a lump sum, (b) on a semi-monthly basis in approximately equal
installments over a period of thirty-six (36) months following the Executive's
termination, or (c) on an annual basis in approximately equal installments over
a period of thirty-six (36) months following the Executive's termination. Such
payments shall not be reduced in the event Executive obtains other employment
following termination of employment; provided however, that any payment under
this provision shall not exceed three (3) times the Executive's average annual
compensation. In the event the Association is not in compliance with its minimum
capital
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requirements or if such payments would cause the Association's capital to be
reduced below its minimum regulatory capital requirements, such payments shall
be deferred until such time as the Association or successor thereto is in
capital compliance. At the election of the Executive, which election is to be
made prior to a Change in Control, such payment shall be made in a lump sum as
of the Executive's Date of Termination. In the event that no election is made,
payment to the Executive will be made in approximately equal installments on a
monthly basis over a period of thirty-six (36) months following the Executive's
termination. Such payments shall not be reduced in the event Executive obtains
other employment following termination of employment.
(d) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Association will cause to be continued for the Executive and his previously
covered dependents life, medical, dental and disability coverage that the
Executive agrees is substantially equivalent to the coverage maintained by the
Association for Executive and his dependents prior to his termination at no cost
to the Executive. Such coverage and payments shall cease upon the expiration of
thirty-six (36) months following the Date of Termination.
6. CHANGE OF CONTROL RELATED PROVISIONS
Notwithstanding the provisions of Section 5, in no event shall the
aggregate payments or benefits to be made or afforded to Executive under said
paragraphs (the "Termination Benefits") constitute an "excess parachute payment"
under Section 280G of the Code or any successor thereto, and in order to avoid
such a result, Termination Benefits will be reduced, if necessary, to an amount
(the "Non-Triggering Amount"), the value of which is one dollar ($1.00) less
than an amount equal to three (3) times Executive's "base amount", as determined
in accordance with said Section 280G. The allocation of the reduction required
hereby among the Termination Benefits provided by Section 5 shall be determined
by Executive.
7. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order or material
breach of any provision of this Agreement. In determining incompetence, the acts
or omissions shall be measured against the generally prevailing standards of
professional competence for executive officers having comparable positions in
the savings institutions industry. Notwithstanding the foregoing, Executive
shall not be deemed to have been Terminated for Cause unless and until there
shall have been delivered to him a Notice of Termination which shall include a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the members of the Board at a meeting of the Board called and held
for that purpose (after reasonable notice to Executive and an opportunity for
him, together with counsel, to be heard before the Board), finding that in the
good faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail. The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. Any stock options and related limited
rights granted to Executive under any stock option plan or any unvested awards
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granted to Executive under any stock benefit plan of the Association, the
Holding Company or any subsidiary or affiliate thereof, shall become null and
void effective upon Executive's receipt of Notice of Termination for Cause
pursuant to Section 8 hereof, and shall not be exercisable by or delivered to
Executive at any time subsequent to such Termination for Cause.
8. NOTICE OF TERMINATION.
(a) Any purported termination by the Association or by Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given);
provided, however, that if a dispute regarding the Executive's termination
exists, the "Date of Termination" shall be determined in accordance with Section
8(c) of the Agreement.
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the occurrence of a
Change in Control and voluntary termination by the Executive in which case the
Date of Termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected)
and provided further that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence. Amounts
paid under this Section are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement.
9. POST-TERMINATION OBLIGATIONS.
All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for three (3) full years
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Association . Executive shall, upon reasonable
notice, furnish such information and assistance to the Association as may
reasonably be required by the Association in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.
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10. NON-COMPETITION.
(a) Upon any termination of Executive's employment hereunder pursuant to
Section 4 hereof, Executive agrees not to compete with the Association for a
period of one (1) year following such termination in any city, town or county in
which the Executive's normal business office is located and the Association has
an office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Association. The parties hereto,
recognizing that irreparable injury will result to the Association, its business
and property in the event of Executive's breach of this Subsection 10(a) agree
that in the event of any such breach by Executive, the Association, will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employees and all persons acting for or under the direction of
Executive. Nothing herein will be construed as prohibiting the Association from
pursuing any other remedies available to the Association for such breach or
threatened breach, including the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Association and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Association. Executive will not, during
or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Association or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Association. Further, Executive may disclose
information regarding the business activities of the Association to the OTS and
the Federal Deposit Insurance Corporation ("FDIC") pursuant to a formal
regulatory request. In the event of a breach or threatened breach by Executive
of the provisions of this Section, the Association will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Association or affiliates thereof, or from rendering any services to any person,
firm, corporation, other entity to whom such knowledge, in whole or in part, has
been disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Association from pursuing any other remedies
available to the Association for such breach or threatened breach, including the
recovery of damages from Executive.
11. SOURCE OF PAYMENTS.
(a) All payments provided in this Agreement shall be timely paid in cash
or check from the general funds of the Association. The Holding Company,
however, unconditionally guarantees payment and provision of all amounts and
benefits due hereunder to Executive and, if such amounts and benefits due from
the Association are not timely paid or provided by the Association, such amounts
and benefits shall be paid or provided by the Holding Company.
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(b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement dated June 28, 1995, and
amended and restated as of July 24, 1998, between Executive and the Holding
Company, such compensation payments and benefits paid by the Holding Company
will be subtracted from any amounts due simultaneously to Executive under
similar provisions of this Agreement. Payments pursuant to this Agreement and
the Holding Company Agreement shall be allocated in proportion to the level of
activity and time expended on such activities by Executive as determined by the
Holding Company and the Association on a quarterly basis.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Association or
any predecessor of the Association and Executive, except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
13. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Association and their respective successors and assigns.
14. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
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15. REQUIRED PROVISIONS.
(a) The Association may terminate Executive's employment at any time, but
any termination by the Association, other than Termination for Cause, shall not
prejudice Executive's right to compensation or other benefits under this
Agreement. Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Cause as defined in Section 7
hereinabove.
(b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Association's affairs by a notice
served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. ss.1818(e)(3) or (g)(1); the Association 's obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Association may in its discretion (i) pay Executive all or part of the
compensation withheld while their contract obligations were suspended and (ii)
reinstate (in whole or in part) any of the obligations which were suspended.
(c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order issued
under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
ss.1818(e)(4) or (g)(1), all obligations of the Association under this contract
shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
(d) If the Association is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. ss.1813(x)(1) all obligations of the
Association under this contract shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.
(e) All obligations of the Association under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution, (i) by the Director of
the OTS (or his designee), the FDIC or the Resolution Trust Corporation, at the
time the FDIC enters into an agreement to provide assistance to or on behalf of
the Association under the authority contained in Section 13(c) of the Federal
Deposit Insurance Act, 12 U.S.C. ss.1823(c); or (ii) by the Director of the OTS
(or his designee) at the time the Director (or his designee) approves a
supervisory merger to resolve problems related to the operations of the
Association or when the Association is determined by the Director to be in an
unsafe or unsound condition. Any rights of the parties that have already vested,
however, shall not be affected by such action.
(f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and 12 C.F.R. ss.545.121 and any rules and regulations promulgated
thereunder.
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16. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
17. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW.
The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of California, but only to
the extent not superseded by federal law.
19. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, conducted before
a panel of three arbitrators sitting in a location selected by Executive within
fifty (50) miles from the location of the Association, 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; provided,
however, that Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
In the event any dispute or controversy arising under or in connection
with Executive's termination is resolved in favor of Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of all back-pay, including salary, bonuses and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under this
Agreement.
20. PAYMENT OF COSTS AND LEGAL FEES.
All reasonable costs and legal fees paid or incurred by Executive pursuant
to any dispute or question of interpretation relating to this Agreement shall be
paid or reimbursed by the Association if Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.
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21. INDEMNIFICATION.
(a) The Association shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the fullest
extent permitted under federal law against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action, suit
or proceeding in which he may be involved by reason of his having been a
director or officer of the Association (whether or not he continues to be a
director or officer at the time of incurring such expenses or liabilities), such
expenses and liabilities to include, but not be limited to, judgments, court
costs and attorneys' fees and the cost of reasonable settlements.
(b) Any payments made to Executive pursuant to this Section are subject to
and conditioned upon compliance with 12 X.X.X.xx. 545.121 and any rules or
regulations promulgated thereunder.
22. SUCCESSOR TO THE ASSOCIATION.
The Association shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Association's obligations under this Agreement, in the same manner and to the
same extent that the Association would be required to perform if no such
succession or assignment had taken place.
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SIGNATURES
IN WITNESS WHEREOF, First Federal Savings and Loan Association of San
Xxxxxxx Valley and SGV Bancorp, Inc. have caused this amended and restated
Agreement to be executed and their seals to be affixed hereunto by their duly
authorized officers and directors, and Executive has signed this amended and
restated Agreement, on the 24th day of July, 1998.
ATTEST: FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF SAN XXXXXXX VALLEY
/s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxx
-------------------------- --------------------------------------
Secretary For the Entire Board of Directors
[SEAL]
ATTEST: SGV BANCORP, INC.
(Guarantor)
/s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxx
-------------------------- --------------------------------------
Secretary For the Entire Board of Directors
[SEAL]
WITNESS:
/s/ Xxxxx Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
--------------------------- -----------------------------
Xxxxxxx X. Xxxxxxxx
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