EXHIBIT 10.5.2 EMPLOYMENT AGREEMENTS BETWEEN QCBC, INC. AND QCF,
RESPECTIVELY, AND J.L.THOMAS AS OF JULY 1, 1996.
THREE YEAR
QUAKER CITY BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of July 1, 1996, by and between Quaker
City Bancorp, Inc. (the "Company"), a corporation organized under the laws of
Delaware, with its principal administrative office at 7021 Greenleaf Avenue,
Whittier, California, and J. L. Thomas (the "Executive"). Any reference to
"Association" herein shall mean Quaker City Federal Savings and Loan Association
or any successor thereto.
WHEREAS, the Company wishes to assure itself of the services of Executive
for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Company 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 as
Chairman of the Board of the Company. The Executive shall render administrative
and management services to the Company 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 any subsidiary of the
Company. Failure to reelect Executive as Chairman of the Board of the Company or
failure to reelect Executive as Chairman of the Board of the Association without
the consent of the Executive shall constitute a breach of this Agreement.
2. TERMS.
(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. Commencing on
the date of the execution of this Agreement, the term of this Agreement shall be
extended for one day each day until such time as the Board of Directors of the
Company (the "Board") or Executive elects not to extend the term of the
Agreement by giving written notice to the other party in accordance with Section
8 of this Agreement, in which case the term of this Agreement shall be fixed and
shall end on the third anniversary of the date of such written notice.
Notwithstanding the foregoing or any other provision of this Agreement, the term
of this Agreement shall automatically expire upon the 65th birthday of
Executive.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote the time required to fulfill the
faithful performance of his duties hereunder including activities and services
related to the organization, operation and management of the Company and
participation in community and civic organizations; the time required will vary
significantly, however will exceed fifty percent of the Executive's business
time; 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, companies or organizations, which, in such Board's judgment, will not
present any conflict of interest with the Company, or materially affect the
performance of Executive's duties pursuant to this Agreement.
(c) In the event that Executive's duties and responsibilities with respect
to the Association are temporarily or permanently terminated pursuant to
Sections 7 or 16 of the Employment Agreement dated July 1, 1996, between
Executive and the Association ("Association Agreement") and the course of
conduct upon which such termination is based would not constitute grounds for
Termination for Cause under Section 7 of this Agreement then Executive shall
continue to serve as Chairman of the Board of the Company. However, Executive
shall not perform, during the pendency of his temporary or permanent suspension
or termination from the Association, duties and responsibilities formerly
performed at the Association as part of his duties and responsibilities as
Chairman of the Board of the Company. Nothing in this provision shall be
interpreted as restricting the Company's right to remove Executive for Cause in
accordance with Section 7 of this Agreement.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 1. The Company
shall pay Executive as compensation a salary of not less than $175,000 per year
("Base Salary"). Base Salary shall include any amounts of compensation deferred
by Executive under any employee benefit plan maintained by the Association or
Company. 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 effective date of
this Agreement. Such review shall be conducted by a Compensation Committee. The
Board may increase Executive's Base Salary. The increased Base Salary shall
become the "Base Salary" for purposes of this Agreement. In addition to the Base
Salary provided in this Section 3(a), the Company shall also provide Executive
at no cost to Executive with all such other benefits as are provided uniformly
to permanent full-time employees of the Company and the Association.
(b) The Company will provide Executive with 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 Company will not,
without Executive's prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect Executive's rights or
benefits thereunder. Without limiting the generality of the foregoing provisions
of this Subsection (b), Executive will 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, health-and-accident plan, medical coverage or any other
employee benefit plan or arrangement made available by the Company 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 will be entitled to incentive compensation and
bonuses as provided in any plan of the Company 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 Company 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 Company of Executive's full-time employment hereunder for any
reason other than a Change in Control, as defined in Section 5(a) hereof, upon
Retirement, as defined in Section 6 hereof or for Cause, as defined in Section 7
hereof; (ii) Executive's resignation from the Company's employ, upon any (A)
failure to elect or reelect Executive as Chairman of the Board, unless consented
to by the Executive, (B) a material change in Executive's function, duties, or
responsibilities, 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, (and any such material change shall be
deemed a continuing breach of this Agreement), (C) a relocation of Executive's
principal place of employment by more than 30 miles from its location at the
effective date of this Agreement, or a material reduction in the benefits and
perquisites to the Executive from those being provided as of the effective date
of this Agreement, (D) liquidation or dissolution of the Association or Company,
or (E) breach of this Agreement by the Company. Upon the occurrence of any event
described in clauses (A), (B), (C), (D) or (E), 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 a
reasonable period of time not to exceed, except in case of a continuing breach,
four calendar months after the event giving rise to said right to elect.
(b) Upon the occurrence of an Event of Termination, the Company shall be
obligated to 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: (i) the amount of the
remaining salary payments that the Executive would have earned if he continued
his employment with the Association during the remaining unexpired term of this
Agreement at the Executive's Base Salary at the Date of Termination; (ii) the
average of the amount of bonus and any other compensation paid to the Executive
during the term of the Agreement times the remaining number of years of the
Agreement and any fraction thereof, and; (iii) an amount equal to the average of
the annual contributions that were made on the Executive' s behalf to any
employee benefit plans of the Company or Bank during the term of the Agreement
times the
remaining number of years of the Agreement and any fraction thereof. At the
election of the Executive, which election is to be made within thirty (30) days
of the Date of Termination, such payments shall be made in a lump sum or paid
monthly during the remaining term of the agreement following the Executive's
termination. In the event that no election is made, payment to the Executive
will be made on a monthly basis 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 Company will cause
to be continued life, medical, dental and disability coverage substantially
identical to the coverage maintained by the Association or the Company for
Executive prior to his termination, except to the extent such coverage may be
changed in its application to all Association employees. Such coverage shall
cease upon the expiration of the remaining term of this Agreement.
(d) Upon the occurrence of an Event of Termination, the Executive will be
entitled to receive benefits due him under or contributed by the Association or
the Company on his behalf pursuant to any retirement, incentive, profit sharing,
bonus, performance, disability or other employee benefit plan maintained by the
Association or the Company on the Executive's behalf to the extent such benefits
are not otherwise paid to Executive under a separate provision of this
Agreement.
(e) In the event that the Executive is receiving monthly payments pursuant
to Section 4(b) hereof, on an annual basis, thereafter, between the dates of
July 1 and July 31 of each year, Executive shall elect whether, the balance of
the amount payable under the Agreement at that time shall be paid in a lump sum
or on a pro rata basis. Such election shall be irrevocable for the year for
which such election is made.
5. CHANGE IN CONTROL.
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Association or the Company as set forth
below. For purposes of this Agreement, a "Change in Control" of the Association
or Company shall mean an event of a nature that; (i) would be required to be
reported in response to Item l(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 (the "Exchange Act"); or (ii) results in a Change in
Control of the Association or the Company within the meaning of the Home Owners'
Loan Act of 1933 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 securities of the Association or the Company
representing 20% or more of the Association's or the Company's outstanding
securities except for any securities of the Association purchased by the Company
in connection with the conversion of the Association to the stock form and any
securities purchased by any employee benefit plan of the Association 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 Company's
stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (B), considered as though
he were a member of the Incumbent Board; or (C) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of the
Association or the Company or similar transaction occurs in which the
Association or Company is not the resulting entity.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d), (e),(f), and (g) of this Section 5 upon his subsequent
termination of employment at any time during the term of this Agreement
regardless of whether such termination results from his dismissal or his
resignation at any time during the term of this Agreement, unless such
termination is because of his death, or termination for Cause.
(c) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment as provided in Section 5(b), the Company 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 average
annual compensation for the three (3) preceding taxable years, such annual
compensation shall include any bonuses and any other cash compensation paid or
to be paid to the Executive during any such year, and the amount of any benefits
paid or accrued to the Executive pursuant to any employee benefit plan
maintained by the Association or Company in any such year. At the election of
the Executive, which election is to be made within thirty (30) days of the Date
of Termination following a Change in Control, such payment may be made in a lump
sum or paid in equal monthly installments during the thirty-six (36) months
following the Executive's termination. In the event that no election is made,
payment to the Executive will be made on a monthly basis during the thirty-six
(36) months following the Executive's termination.
(d) Upon the occurrence of a Change in Control, Executive will be entitled
to receive benefits due him under or contributed by the Association or the
Company on his behalf pursuant to any retirement, incentive, profit sharing,
bonus, performance, disability or other employee benefit plan maintained by the
Association or the Company on Executive's behalf to the extent such benefits are
not otherwise paid to Executive under a separate provision of this Agreement.
(e) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Company will cause to be continued life, medical,
dental and disability coverage substantially identical to the coverage
maintained by the Association or Company for Executive prior to his severance.
Such coverage and payments shall cease upon the expiration of thirty-six (36)
full calendar months following the Date of Termination.
(f) In the event that the Executive is receiving monthly payments pursuant
to Section 5(c) hereof, on an annual basis, thereafter, between the dates of
July 1 and July 31 of each year, Executive shall elect whether the balance of
the amount payable under the Agreement at that time
shall be paid in a lump sum or on a pro rata basis pursuant to such section.
Such election shall be irrevocable for the Year for which such election is made.
(g) Notwithstanding the preceding paragraphs of this Section 5, in the
event that:
(i) the aggregate payments or benefits to be made or afforded to
Executive under said paragraphs (the "Termination Benefits")
would be deemed to include an "excess parachute payment" under
Section 280G of the Code or any successor thereto, and
(ii) if such Termination Benefits were reduced 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, and
the Non-Triggering Amount would be greater than the aggregate
value of the Termination Benefits (without such reduction) minus
the amount of tax required to be paid by Executive thereon by
Section 4999 of the Code, then the Termination Benefits shall be
reduced to the Non-Triggering Amount. The allocation of the
reduction required by the preceding paragraphs of this Section 5
shall be determined by the Executive.
6. TERMINATION UPON RETIREMENT.
Termination of Executive based on "Retirement" shall mean termination in
accordance with the Company's or Association's retirement policy or in
accordance with any retirement arrangement established with Executive's consent
with respect to him. Upon termination of Executive upon Retirement, Executive
shall be entitled to all benefits under any retirement plan of the Company or
the Association and other plans to which Executive is a party.
7. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of a
material loss to the Company or one of its affiliates caused by Executive's
intentional failure to perform stated duties, personal dishonesty or willful
violation of any law, rule, regulation (other than traffic violations or similar
offenses) or final cease and desist order, or any material breach of this
Agreement. For purposes of this Section, no act, or the failure to act, on
Executive's part shall be "willful" unless done, or omitted to be done, not in
good faith and without reasonable belief that the action or omission was in the
best interest of the Company or its affiliates. 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 three-fourths 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 granted to Executive under any stock benefit plan of the
Association, the 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 9 hereof, and shall not be exercisable by or delivered
to Executive at any time subsequent to such Termination for Cause.
8. NOTICE.
(a) Except for automatic termination upon retirement at age 65 by
Executive, any purported termination by the Company 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).
(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.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay Executive his full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, Base Salary) and continue him
as a participant in all compensation, benefit and insurance plans in which he
was participating when the notice of dispute was given, until the dispute is
finally resolved in accordance with this Agreement. 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.
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.
10. NON-DISCLOSURE.
Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Company 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 Company. In
the event of a breach or threatened breach by the Executive of the provisions of
this Section, the Company 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 Company 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
Company from pursuing any other remedies available to the Company for such
breach or threatened breach, including the recovery of damages from Executive.
11. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Company subject to Section 13 hereof. The
Company may use insurance proceeds especially obtained therefore as partial
payment in the event of disability.
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 Company or any
predecessor of the Company and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to the 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. EFFECT OF ACTION UNDER ASSOCIATION AGREEMENT.
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 as of July 1, 1996, between Executive
and the Association, such compensation payments and benefits paid by the
Association will be subtracted from any amount due simultaneously to Executive
under similar provisions of this Agreement.
14. 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 Company and their respective successors and assigns.
15. 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.
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.
This Agreement shall be governed by the laws of the State of Delaware,
unless otherwise specified herein. Payments hereunder may also be subject to
Section 1828(k) of the Federal Deposit Insurance Act, 12 U.S.C. (S) 1828(k), and
regulations promulgated thereunder to the extent applicable to the Company.
19. 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 sitting in a location selected by the 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 the 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 LEGAL FEES.
All reasonable legal fees and other expenses paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Company, if Executive is successful pursuant
to a legal judgment, arbitration or settlement.
21. INDEMNIFICATION.
The Company 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 Delaware 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 Company (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.
22. SUCCESSOR TO THE COMPANY.
The Company 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 Company,
expressly and unconditionally to assume and agree to perform the Company's
obligations under this Agreement, in the same manner and to the same extent that
the Company would be required to perform if no such succession or assignment had
taken place.
SIGNATURES
IN WITNESS WHEREOF, Quaker City Bancorp, Inc. has caused this Agreement to
be executed and its seal to be affixed hereunto by its duly authorized officer
and its directors, and Executive has signed this Agreement, as of the 1st day of
July, 1996.
ATTEST: QUAKER CITY BANCORP, INC.
/s/ Sharon Thomson By: /s/ Kathryn M. Hennigan
- ----------------------------- ----------------------------------
Kathryn M. Hennigan
Secretary
[SEAL]
ATTEST:
/s/ Joan M. Pledge By: /s/ J.L. Thomas
- ----------------------------- ----------------------------------
J. L. Thomas
Executive
THREE YEAR
QUAKER CITY FEDERAL SAVINGS AND LOAN ASSOCIATION
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of July 1, 1996, by and among Quaker
City Federal Savings and Loan Association (the "Association"), a federally
chartered savings institution, with its principal administrative office at 7021
Greenleaf Avenue, Whittier, California, Quaker City Bancorp, Inc., a corporation
organized under the laws of the State of Delaware which is the holding company
for the Association (the "Company"), and J. L. Thomas (the "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 as
Chairman of the Board of the Association. The Executive shall render
administrative and management services to the Association such as are
customarily performed by persons situated in a similar executive capacity.
Failure to reelect Executive as Chairman of the Board of the Association without
the consent of the Executive shall constitute a breach of this Agreement.
2. TERMS.
(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. Commencing on
June 30, 1996, and continuing on each June 30 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 this
Agreement by giving written notice to the other party in accordance with Section
8 of this Agreement. The Board will review the Agreement and the 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. Notwithstanding the foregoing or any other provision of this
Agreement, the term of this Agreement shall automatically expire upon the 65th
birthday of Executive.
(b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote the time required to fulfill 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; the time required will vary
significantly, however will exceed fifty percent of the Executive's business
time; 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, companies or organizations, 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.
3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 1. The Association
shall pay Executive as compensation a salary of not less than $175,000 per year
("Base Salary"). Base Salary shall include any amounts of compensation deferred
by Executive under any employee benefit 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 effective date of this
Agreement. Such review shall be conducted by a Compensation/Benefits Committee.
The Board may increase Executive's Base Salary. The increased Base Salary shall
become the "Base Salary" for purposes of this Agreement. In addition to the Base
Salary provided in this Section 3(a), the Association shall also provide
Executive at no cost to Executive with all such other benefits as are provided
uniformly to permanent full-time employees of the Association.
(b) The Association will provide Executive with 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 adversely affect Executive's rights or
benefits thereunder. Without limiting the generality of the foregoing provisions
of this Subsection (b), Executive will 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, health-and-accident plan, 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 will 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 Company of Executive's full-time
employment hereunder for any reason other than a Change in Control, as defined
in Section 5(a) hereof, upon Retirement, as defined in Section 6 hereof or 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 Executive as
Chairman of the Board of Directors, unless consented to by the Executive, (B) a
material change in Executive's function, duties, or responsibilities, 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, (and any such material change shall be deemed a continuing
breach of this Agreement), (C) a relocation of Executive's principal place of
employment by more than 30 miles from its location at the effective date of this
Agreement, or a material reduction in the benefits and perquisites to the
Executive from those being provided as of the effective date of this Agreement,
(D) liquidation or dissolution of the Association or Company, provided, however,
that such liquidation or dissolution shall not include a liquidation or
dissolution caused by a reorganization not affecting Executive's functions,
duties, responsibilities or compensation, or (E) breach of this Agreement by the
Association. Upon the occurrence of any event described in clauses (A), (B),
(C), (D) or (E), 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 a reasonable period of time not to
exceed, except in case of a continuing breach, four 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 be obligated to 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: (i) the amount of the remaining salary
payments that the Executive would have earned if he continued his employment
with the Association during the remaining unexpired term of this Agreement at
the Executive's Base Salary at the Date of Termination; (ii) the average of the
amount of bonus and any other compensation paid to the Executive during the term
of the Agreement times the remaining number of years of the Agreement and any
fraction thereof, and; (iii) an amount equal to the average of the annual
contributions that were made on the Executive's behalf to any employee benefit
plans of the Company or Association during the term of the Agreement times the
remaining number of years
of the Agreement and any fraction thereof; provided, however, that any payment
------------------
pursuant to this section 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. Such annual compensation
shall include any bonuses or other cash compensation paid or to be paid to the
Executive in any such year, any director or committee fees paid or to be paid in
any such year, any benefits paid or accrued to the Executive pursuant to any
employee benefit plan maintained by the Company or Association in any such year
and any contributions made on behalf of the Executive to any employee benefit
plan maintained by the Company or Association in any such year; provided,
---------
however, that if any payments pursuant to this subsection constitute an "excess
- --------
parachute payment" under the Internal Revenue Code of 1986, as amended, (the
"Code") the provisions of Section 5(f) herein shall apply and; provided,
---------
further, that if the Association is not in compliance with its minimum capital
- --------
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 within thirty (30) days of the Executive's Date of Termination, such
payments shall be made in a lump sum or paid monthly during the remaining term
of the agreement following the Executive's termination. In the event that no
election is made, payment to the Executive will be made on a monthly basis
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 life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Association or Company
for Executive prior to his termination, except to the extent such coverage may
be changed in its application to all Association or Company employees. Such
coverage shall cease upon the expiration of the remaining term of this
Agreement.
(d) Upon the occurrence of an Event of Termination, the Executive will be
entitled to receive benefits due to him under or contributed by the Association
or Company on his behalf pursuant to any retirement, incentive, profit sharing,
bonus, performance, disability or other employee benefit plan maintained by the
Association or Company on the Executive's behalf.
(e) In the event that the Executive is receiving monthly payments pursuant
to Section 4(b) hereof, on an annual basis, thereafter, between the dates of
July 1 and July 31 of each year, Executive shall elect whether the balance of
the amount payable under the Agreement at that time shall be paid in a lump sum
or on a pro rata basis. Such election shall be irrevocable for the year for
which such election is made.
5. CHANGE IN CONTROL.
(a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Association or the Company, as set forth
below. For purposes of this Plan, a "Change in Control" of the Association or
Company shall mean an event of a nature that:
(i) would be required to be reported in response to Item 1 of the current report
on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 1 5(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"); or (ii) results in
a Change in Control of the Association or the Company within the meaning of the
Home Owners' Loan Act of 1933 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 1 3(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 securities of the Association or the
Company representing 20% or more of the Association's or the Company's
outstanding securities except for any securities of the Association purchased by
the Company in connection with the conversion of the Association to the stock
form and any securities purchased by any employee benefit plan of the
Association 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 Company's stockholders was approved by the same Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (B), considered
as though he were a member of the Incumbent Board; or (C) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Association or the Company or similar transaction occurs in which
the Association or Company is not the resulting entity.
(b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d), (e), (f) and (g) of this Section 5 upon his subsequent
termination of employment at any time during the term of this Agreement
regardless of whether such termination results from his dismissal or his
resignation at any time during the term of this Agreement, unless such
termination is because of his death or termination for Cause.
(c) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment as provided in 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 times the average annual
compensation for the five most recent taxable years that Executive has been
employed by the Association, such average annual compensation shall include any
bonuses or other cash compensation paid or to be paid to the Executive in any
such year, any director or committee fees paid or to be paid in any such year,
any benefits paid or accrued to the Executive pursuant to any employee benefit
plan maintained by the Company or Association in any such year and any
contributions made on behalf of the Executive to any employee benefit plan
maintained by the Company or Association
in any such years; provided however, that if the Association is not in
-----------------
compliance with its minimum capital 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 within thirty (30) days of the Date of Termination,
such payment may be made in a lump sum or paid in equal monthly installments
during the thirty-six (36) months following the Executive's termination. In the
event that no election is made, payment to the Executive will be made on a
monthly basis over a period of thirty-six (36) months following the Executive's
termination.
(d) Upon the occurrence of a Change in Control, Executive will be entitled
to receive benefits due to him under or contributed by the Association or
Company on his behalf pursuant to any retirement, incentive, profit sharing,
bonus, performance, disability or other employee benefit plan maintained by the
Association or Company on Executive's behalf.
(e) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Association will cause to be continued life,
medical, dental and disability coverage substantially identical to the coverage
maintained by the Association or Company for Executive prior to his severance,
except to the extent that such coverage may be changed in its application for
all Association or Company employees. Such coverage and payments shall cease
upon the expiration of thirty-six (36) full calendar months following the Date
of Termination.
(f) In the event that the Executive is receiving monthly payments pursuant
to Section 5(c) hereof, on an annual basis, thereafter, between the dates of
July 1 and July 31 of each year, Executive shall elect whether the balance of
the amount payable under the Agreement at that time shall be paid in a lump sum
or on a pro rata basis. Such election shall be irrevocable for the year for
which such election is made
(g) Notwithstanding the preceding paragraphs of this 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 the preceding paragraphs of this Section 5 shall be determined by
the Executive.
6. TERMINATION UPON RETIREMENT.
Termination by the Association of the Executive based on "Retirement" shall
mean termination in accordance with the Association's retirement policy or in
accordance with any retirement arrangement established with Executive's consent
with respect to him. Upon
termination of Executive upon Retirement, Executive shall be entitled to all
benefits under any retirement plan of the Association and other plans to which
Executive is a party.
7. TERMINATION FOR CAUSE.
The term "Termination for Cause" shall mean termination because of the
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, regulation (other than traffic
violations or similar offenses) or final cease-and-desist order or any material
breach of this Agreement. In determining incompetence, the acts or omissions
shall be measured against standards generally prevailing 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 unvested awards
granted to Executive under any RRP of the Association, the 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 9
hereof, and shall not be exercisable by or delivered to Executive at any time
subsequent to such Termination for Cause.
8. NOTICE.
(a) Except for automatic termination upon retirement at age sixty-five by
Executive, 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 days from the date such Notice of Termination is given.).
(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, 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. Notwithstanding the pendency of any such
dispute, the Association will continue to pay Executive his full compensation in
effect when the notice giving rise to the dispute was given (including, but not
limited to his annual salary) and continue him as a participant in all
compensation, benefit and insurance plans in which he was participating when the
notice of dispute was given, until the dispute is finally resolved in accordance
with this Agreement.
9. POST-TERMINATION OBLIGATIONS.
(a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) 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.
10. NON-DISCLOSURE.
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. In the event of a breach or threatened breach by the 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.
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Company 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 Company.
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 the
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. EFFECT OF ACTION UNDER COMPANY AGREEMENT.
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 as of July l, 1996, between Executive
and the Company, such compensation payments and benefits paid by the Company
will be subtracted from any amounts due simultaneously to Executive under
similar provisions of this Agreement. Payments pursuant to this Agreement and
the Company Agreement shall be allocated in proportion to the services rendered
and time expended on such activities by the Executive as determined by the
Company and the Association on a quarterly basis.
14. 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.
15. 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.
16. REQUIRED PROVISIONS.
(a) The Association may terminate the 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 the 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. 1818(e)(3) or (g)(l); 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 the 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 the 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.
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. 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), or the Federal Deposit Insurance Corporation
("FDIC"), 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. 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 the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. 1828(k)
and 12 CFR 545.121 and any rules and regulations promulgated thereunder.
17. 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.
18. 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.
19. 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.
20. 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 sitting in a location selected by the 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 the 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.
21. 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.
22. 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 applicable federal banking statutes and
regulations of the OTS and FDIC in effect at the time.
23. 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 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.
SIGNATURES
IN WITNESS WHEREOF, Quaker City Federal Savings and Loan Association and
Quaker City Bancorp, Inc. have caused this Agreement to be executed and their
seals to be affixed hereunto by their duly authorized officers and directors,
and Executive has signed this Agreement, as of the 1st day of July, 1996.
ATTEST: QUAKER CITY FEDERAL SAVINGS AND LOAN
ASSOCIATION
/s/ Sharon Thomson By: /s/ Kathryn M. Hennigan
- ----------------------------- -----------------------------------
Kathryn M. Hennigan
Secretary
[SEAL]
ATTEST: QUAKER CITY BANCORP, INC.
(Guarantor)
/s/ Sharon Thomson By: /s/ Kathryn M. Hennigan
- ----------------------------- -----------------------------------
Kathryn M. Hennigan
Secretary
[SEAL]
WITNESS:
/s/ Joan M. Pledge /s/ J.L. Thomas
- ----------------------- -----------------------------------
J. L. Thomas
Executive