EXHIBIT 10.5
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
This Settlement Agreement and Mutual General Release ("Agreement")
is made between Arthur W. Tate ("Claimant"), on the one hand, and Guardian Bank
("Bank"), Guardian Bancorp ("Bancorp") and Guardian Trust Co. ("Trust Co.")
(collectively "Releasees"), on the other hand, and is made with respect to the
following facts:
A. A dispute has arisen between Claimant and Releasees regarding
Claimant's employment with Bank and Bancorp and his serving as a director and
officer of Bancorp and Trust Co. With respect to this dispute, Claimant has
threatened to file a lawsuit. A copy of the draft complaint (the "Draft
Complaint") Claimant proposed to file is attached hereto as Exhibit A. Because
the Draft Complaint was not filed, Releasees were not required to file an
Answer; however, they would deny all the material allegations contained within
it.
B. The parties hereto are now desirous of settling their
differences.
C. Based on the foregoing facts, and in exchange for the
covenants contained herein, the parties hereto, and each of them, agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meaning indicated:
(a) "Claims" refers to and includes all claims, demands,
rights, causes of action, rights of action, rights of subrogation, rights of
indemnity, rights to reimbursement, rights to payment, liens and remedies of
every kind or nature whatsoever, whether the same are or any of the same is at
law, in equity, or otherwise, and whether the same are or any of the same is
known or unknown to the parties at the time of their execution of this
Agreement.
(b) "Obligations" refers to and includes all obligations,
duties, liabilities, damages, costs, fees (including, but without limitation
thereto, attorneys' fees), expenses and debts of every kind and nature
whatsoever, whether the same are or any of the same is known or unknown to the
parties at the time of their execution of this Agreement.
Subject to and with reference to the definitions set forth
above, the parties hereto, and each of them, execute this Agreement in favor of
and for the benefit of the other as follows.
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2. GENERAL.
(a) It is understood that this Agreement does not constitute
an admission by any of the parties of any wrongdoing whatsoever. Moreover, each
of the parties specifically denies having engaged in any wrongdoing.
(b) The parties have agreed to enter into this Agreement for
the purpose of fully and completely settling all differences between them and in
the interest of saving themselves the costs and vexation of further legal
proceedings.
3. CLAIMANT'S RESIGNATION.
(a) Releasees' personnel records shall reflect that effective
August 23, 1993, Claimant voluntarily resigned as Vice Chairman of Bank, as
President of Bancorp and as Chairman of Trust Co. Claimant's letter of
resignation from these positions is attached hereto as Exhibit B. This letter
shall become a permanent part of Claimant's personnel file. Any document in
Claimant's personnel file indicating that Claimant's departure from any of these
positions was for any reason other than voluntary resignation shall be removed
from the file.
(b) Claimant shall voluntarily resign as a Director of the
Board of Directors of Bancorp and of Trust Co. and from each and every committee
or subcommittee thereof on which he serves. Claimant's letter of resignation
from these positions is attached hereto as Exhibit C. Claimant's resignation
shall be deemed to be accepted on the date this Agreement becomes effective.
4. PAYMENT BY RELEASEES.
(a) Releasees shall pay Claimant the gross sum of ONE
HUNDRED THIRTEEN THOUSAND, NINE HUNDRED SIX DOLLARS AND TWENTY-FIVE CENTS
($113,906.25). This sum shall be allocated completely to Claimant's alleged
claims for personal injury, pain, suffering, anguish, physical and emotional
stress and strain (which claims Releasees deny). None of this portion of the
settlement proceeds is paid as earnings, back wages, vacation or separation pay.
Releasees shall not file a W2 form or a 1099 with respect to this payment.
(b) Releasees shall pay Claimant the gross sum of FIFTY SIX
THOUSAND, NINE HUNDRED FIFTY-THREE DOLLARS AND THIRTEEN CENTS ($56,953.13). This
sum shall be allocated to Claimant's claims to additional compensation (which
claims Releasees deny). This payment shall be treated as a taxable payment, and
all
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deductions required by law, calculated using the most current W4 form Claimant
has filed with Releasees, shall be made from these proceeds. Releasees shall
include this payment in the W2 form issued to Claimant at the end of the
calendar year.
(c) The payments called for in this paragraph 4 shall be made
upon Claimant's delivery to Releasees' attorney of five (5) executed copies of
this Agreement and the expiration of the revocation period set forth in
paragraph 26 below.
(d) Claimant acknowledges and agrees that he shall pay any
local, state or federal income taxes, penalties, fines, interest or assessments
incurred as the result of any payment of monies under this Agreement. In the
event Releasees are required to pay, or it is contended that Releasees are
required to pay any such taxes, fines, interest or assessments, Claimant agrees
to hold harmless and indemnify Releasees from any and all such taxes, fines,
interest or assessments. Claimant further agrees not to seek or make any claim
against Releasees for any loss, cost, damage or expense if a claim or adverse
determination is made in connection with the nonwithholding or other tax
treatment of any of the proceeds of this settlement or any portion thereof. In
addition, Claimant acknowledges and agrees that Releasees have no duty to defend
against any claim or assertion made in connection with the nonwithholding or
other tax treatment of the proceeds of this settlement or any portion thereof,
and Claimant agrees to assume full responsibility for defending against any such
claim or assertion. At their option, Releasees may select counsel of their
choosing to represent them in connection with any claim or assertion made in
connection with the nonwithholding or other tax treatment of the proceeds of
this settlement. Claimant shall indemnify Releasees for the attorneys' fees and
costs incurred in connection with such claim or assertion.
5. TRANSFER OF TITLE TO AUTOMOBILE.
(a) Releasees shall assign to Claimant title to the 1988
Mercedes Benz 300 SEL which Releasees purchased but which they permitted
Claimant to use while he was in their employ. Subject to Claimant's providing
Releasees with a copy of the written statement he has obtained from a recognized
Mercedes Benz dealership regarding the current fair market value of the vehicle,
Releasees, in transferring title, shall advise the DMV that the value of the
vehicle is $12,500. Releasees shall assign title at the same time and under the
same conditions as set forth in Paragraph 4(c).
(b) Claimant acknowledges that the transfer of title
referred to in this Paragraph 5 represents the receipt of
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value in addition to any payment of value to which Claimant already is entitled
and is made for the purpose of avoiding the costs and vagaries of litigation.
6. BALBOA BAY CLUB MEMBERSHIP. To the extent permitted by the
applicable membership documents, Bank shall promptly transfer all rights it has
in its membership in the Balboa Bay Club which it permitted Claimant to use
while in its employ. Claimant will be liable for any and all financial
obligations that accompany that membership or the transfer thereof from a
corporate to an individual membership.
7. TELEPHONES. Releasees shall transfer the car phone and
portable phone they permitted Claimant to use at an imputed income of $100 each.
8. INSURANCE.
(a) Bank shall continue to provide Claimant his current
health, life and long-term disability insurance benefits for a six (6) month
period commencing August 23, 1993. Thereafter, with respect to the health
insurance, Claimant shall be entitled to exercise his rights under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Bank shall timely
provide Claimant notice of his rights under and forms needed to make the
elections provided by COBRA.
(b) The life insurance policy in the amount of $750,000 of
coverage, naming Claimant as the insured, shall remain in place through its
renewal date of July 23, 1994. Thereafter, to the extent permitted by the terms
of the policy, Claimant may continue coverage by making such payments and
fulfilling such other requirements as called for in the policy.
9. RELEASE.
(a) Claimant does hereby agree to fully, finally and forever
release, quitclaim and discharge Releasees, and each of them, and each of their
officers, directors, shareholders, agents, employees, attorneys, trustees,
administrators, accountants, successors, assigns, insurance carriers and/or
administrators, affiliates and related organizations and any or all of them from
any and all claims, liabilities, demands, debts, accounts, obligations, actions
and causes of action, known or unknown, at law or in equity, which he may have
or claimed to have had, arising at any time in the unlimited past to and
including the date of this Agreement, including, but without
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limiting the generality of the foregoing, any and all matters arising out of or
in any manner whatsoever connected with his employment with and his serving as a
Director on the Board of Directors of Releasees and his
resignations/terminations therefrom. Without limiting the generality of the
foregoing, Claimant specifically acknowledges that the persons he is releasing
include (but are not limited to) Howard Fletcher III, Vincent Bell, Donald
Bohana, Marilyn M. Cohen, Robert D. Frandzel, Paul M. Harris, Saul Socoloske and
John P. Sullivan.
(b) Without limiting the generality of the foregoing,
Claimant acknowledges and agrees that among the claims released are any and all
claims pursuant to Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Equal Pay Act, the Americans with
Disabilities Act, the California Fair Employment and Housing Act, the California
Equal Pay Act, the Fair Labor Standards Act, the California Labor Code, any Wage
Order promulgated by the Industrial Welfare Commission, the California
Unemployment Insurance Code, any breach of an express, written, oral or implied
contract, breach of an implied covenant of good faith and fair dealing, tortious
wrongful discharge based on a breach of any state or federal public policy,
fraud, negligent misrepresentation, defamation, libel, slander, negligence,
intentional or negligent infliction of emotional distress and any and all
additional claims purported to be pled in the Draft Complaint.
(c) Claimant further acknowledges and agrees that this
Agreement shall operate as a complete bar of any and all litigation, charges,
complaints, grievances, arbitrations, or demands of any kind whatsoever which
arose at any time in the unlimited past to and including the date of this
Agreement, regardless of whether they are pending or contemplated, or might at
any time be filed including, but without limiting the generality of the
foregoing, any and all matters arising out of or in any manner whatsoever
connected with his employment with and his serving as a Director on the Board of
Directors of Releasees and his resignations/terminations therefrom. Each and
all of the aforesaid claims or potential claims, are hereby fully and finally
settled, compromised and released.
(d) Claimant acknowledges that he has been advised by legal
counsel and is familiar with the provision of Section 1542 of the California
Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTORS.
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(e) Being aware of said Code section, Claimant hereby
expressly waives and relinquishes any rights or benefits he may have thereunder,
as well as under any other state or federal statutes or common law principles of
similar effect.
(f) Releasees do hereby agree to fully, finally and forever
release, quitclaim and discharge Claimant and each of his attorneys, agents,
successors and assigns and any or all of them from any and all claims,
liabilities, demands, debts, accounts, obligations, actions and causes of
action, known or unknown, at law or in equity, which they may have or claimed to
have had, arising at any time in the unlimited past to and including the date of
this Agreement, including, but without limiting the generality of the foregoing,
any and all matters arising out of or in any manner whatsoever connected with
Claimant's employment with and his serving as a Director on the Board of
Directors of Releasees and his resignations therefrom.
(g) Releasees further acknowledge and agree that this
Agreement shall operate as a complete bar of any and all litigation, charges,
complaints, grievances, arbitrations, or demands of any kind whatsoever which
arose at any time in the unlimited past to and including the date of this
Agreement, regardless of whether they are pending or contemplated, or might at
any time be filed including, but without limiting the generality of the
foregoing, any and all matters arising out of or in any manner whatsoever
connected with Claimant's employment with Releasees and his serving as Director
on the Boards of Directors of Releasees and his resignations therefrom. Each
and all of the aforesaid claims are hereby fully and finally settled,
compromised and released.
(h) Releasees acknowledge that they have been advised by
legal counsel and are familiar with the provision of Section 1542 of the
California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTORS.
(i) Being aware of said Code section, Releasees hereby
expressly waive and relinquish any rights or benefits they may have thereunder,
as well as under any other state or federal statutes or common law principles of
similar effect.
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10. LETTER OF RECOMMENDATION/REFERENCES. Upon request from
Claimant, Releasees will issue a copy of the letter of recommendation attached
hereto as Exhibit C to such persons as Claimant may direct. A copy of the
letter of recommendation shall also become a permanent part of Claimant's
personnel file. Apart from the obligations set forth in this paragraph 9,
Releasees shall have no obligation to provide references on Claimant's behalf.
11. SUCCESSORS AND ASSIGNS. All agreements, acknowledgments,
declarations, representations, understandings, promises, warranties,
authorizations and instructions made, and all understandings expressed by the
parties hereto, and each of them, in this Agreement and all benefits accruing
under this Agreement apply to and bind the respective makers of said agreements,
acknowledgments, declarations, representations, understandings, promises,
warranties, authorizations, instructions and expressions of understanding, and
also all of their respective heirs, officers, directors, agents, servants,
employees, attorneys, shareholders, affiliates, subsidiaries, parent entities,
firms, predecessors, successors and assigns, and also all other persons, firms,
corporations, associations, partnerships and entities in privity with or related
to or affiliated with any such person, firm, corporation, association,
partnership or entity.
12. MODIFICATION. This Agreement may not be modified except by a
writing signed by each of the parties hereto, or their duly authorized
representatives.
13. APPLICABLE LAW. This Agreement shall, in all respects, be
interpreted, construed and governed by and under the domestic laws of the State
of California.
14. ARBITRATION.
(a) Any dispute regarding any aspect of this Agreement
(including but not limited to its formation, performance or breach) or any act
which allegedly has or would violate any provision of this Agreement
("Arbitrable Dispute"), except for a dispute arising out of an alleged violation
of paragraph 14, will be submitted to arbitration in Los Angeles County,
California, before an experienced employment arbitrator licensed to practice law
in California and selected in accordance with the Model Employment Arbitration
Procedures of the American Arbitration Association. Each party shall pay the
fees of their respective attorneys, the expenses of their witnesses and any
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other expenses connected with presenting their claim. Other costs of the
arbitration, including the fees of the arbitrator, cost of any record or
transcript of the arbitration, administrative fees and other fees and costs
shall be borne equally by the parties, one-half by Claimant, on the one hand,
and one-half by Releasees, on the other hand.
(b) Should either party to this Agreement hereafter
institute any legal action or administrative proceeding against the other with
respect to any Claim waived by this Agreement or pursue any Arbitrable Dispute
by any method other than through arbitration, the responding party shall be
entitled to recover from the initiating party all damages, costs, expenses and
attorneys' fees incurred as a result of such action.
15. PROPRIETARY INFORMATION.
(a) Claimant agrees that he will not in any fashion, form or
manner, either directly or indirectly, solicit or use for his own purposes or
for the purposes of any third party, or divulge, disclose or communicate to any
third party, any information he obtained during the course and scope of his
employment with Releasees regarding the identity of Releasees' customers, the
business transacted with them, the nature of the services provided by Releasees
and the prices charged for such services, and any other information that
constitutes a "trade secret" under California law.
(b) Claimant further agrees that as of the date he delivers
five (5) executed copies of this Agreement to Releasees' attorney, he has
returned to Releasees all originals and all copies of all the Releasees'
documents or other business records within his possession, custody or control,
including without limitation, manuals, documents, files, reports, studies,
instruments or other material used and/or developed by Claimant during his
employment with Releasees, and letters, memoranda, notes, reports, tables,
charts, photographs, video and audio tapes and transcriptions of such tapes,
computer records (including without limitation any and all computer disks,
computer tapes, and electronic or "E" mail).
16. RELEASEES' PROPERTY. Claimant represents and agrees that,
except as set forth above, on or before the date he delivers five (5) executed
copies of this Agreement to Releasees' attorney, in addition to the items
identified in Paragraph 14, above, he turned over to Releasees all files,
memoranda, records, other documents, badges, keys, credit cards and any other
physical or personal property which are or were the property of
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Releasees which Claimant had in his possession, custody or control.
17. SEVERABILITY. The provisions of this Agreement are severable,
and if any part of it is found to be unenforceable, the other paragraphs shall
remain fully valid and enforceable. This Agreement shall survive the
termination of any terms or conditions contained herein.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.
19. CONFIDENTIALITY.
(a) Claimant agrees that he will not disclose, directly or
indirectly, whether individually or by or through an agent, representative,
attorney or other person, the existence of this Agreement or its terms or
conditions except (a) as required under compulsion of law, or (b) to his spouse,
financial, accounting or legal advisors and further agrees that he will take
reasonable steps to ensure against disclosure of the existence or terms of this
Agreement by such persons.
(b) Releasees agree that they will not disclose, directly or
indirectly, whether individually or by or through an agent, representative,
attorney or other person, the existence of this Agreement or its terms or
conditions except (a) as required under compulsion of law, including (without
limitation) responding to any request for such information from any state or
federal governmental agency to which they are subject to regulation, or setting
forth such information in public disclosure statements, to the extent required
by law, (b) to such of its officers, employees or agents who need such
information in order to effectuate the terms of the Agreement. Releasees will
take reasonable steps to ensure against disclosure of the existence or terms of
this Agreement by such persons. Nothing contained herein shall prevent the
parties from discussing the terms and conditions of the Agreement with each
other.
20. INDEMNIFICATION. As a further material inducement to Releasees
to enter into this Agreement, Claimant hereby agrees to indemnify and hold
Releasees, and each of them, harmless from and against any and all loss, costs,
damages, or expenses, including, without limitation, attorneys' fees incurred by
Releasees, or any of them, arising out of any breach of this
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Agreement by Claimant or the fact that any representation expressly made herein
by Claimant was false when made.
21. NO DISPARAGEMENT. Claimant shall take no action of any type
and make no statement of any type which harms, tends to harm, inconveniences,
embarrasses, is against the best interest of, or brings into disrepute Releasees
or any of their employees, officers, executives, directors, staff members,
agents and related organizations.
22. ENTIRETY OF AGREEMENT. The parties hereto acknowledge and
agree that this instrument and any other instruments specifically referred to
herein constitute and contain the entire agreement and understanding concerning
the subject matter between the parties and supersede and replace all prior
negotiations and proposed agreements, whether written or oral. The parties, and
each of them, warrant that no other party or any agent or attorney of any other
party has made any promise, representation or warranty whatsoever not contained
herein to induce them to execute this instrument and the other documents
referred to herein. The parties, and each of them, represent that they have not
executed this instrument or the other documents in reliance on any promise,
representations or warranty not contained herein.
23. CONSTRUCTION. The parties hereto acknowledge and agree that
the language of this instrument shall be construed as a whole according to its
fair meaning and not strictly for or against any of the parties.
24. HEADINGS. The various headings in this Agreement are inserted
for convenience only and shall not be deemed a part of or in any manner affect
this Agreement or any provisions hereof.
25. CONSULTATION WITH ATTORNEY AND COMPLETE UNDERSTANDING OF
AGREEMENT. Claimant acknowledges that he was represented by independent legal
counsel in connection with the negotiation and execution of this Agreement.
Claimant further acknowledges that he was advised that he had a period of
twenty-one (21) calendar days in which to consider and execute this Agreement.
Claimant acknowledges that he consulted with his attorney before signing this
Agreement, that Claimant has carefully read and fully understands all the
provisions of this Agreement and that he is voluntarily entering into it.
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26. EFFECTIVE DATE OF AGREEMENT. Claimant further acknowledges
and understands that he has seven (7) calendar days from the date on which he
executes this Agreement to revoke it. Any such revocation must be made in a
signed writing delivered to Debby Manning, Guardian Bank, 800 South Figueroa
Street, Los Angeles, California 90017, no later than 5:00 p.m. on the seventh
day after Claimant signs this Agreement. If Claimant revokes this Agreement, it
shall not be effective or enforceable and Claimant will not receive any of the
benefits described in this Agreement. The Agreement shall not be effective
until the expiration of this revocation period.
Dated: 11-12-93 GUARDIAN BANCORP
By: H. Fletcher
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Title: President
Dated: 11-12-93 GUARDIAN BANK
By: H. Fletcher
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Title: President & CEO
Dated: 11-12-93 GUARDIAN TRUST COMPANY
By: H. Fletcher
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Title: Chairman
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Dated: Arthur W. Tate
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ARTHUR W. TATE
APPROVED AS TO FORM AND SUBSTANCE
RICKS & ANDERSON
Cecil Ricks, Jr.
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Cecil Ricks, Jr.
Attorneys for Claimant
PROSKAUER ROSE GOETZ & MENDELSOHN
Harold M. Brody
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Harold M. Brody
Attorneys for Releasees
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