Exhibit 10.7
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
This Settlement Agreement and Mutual General Release ("Agreement") is
made between Ronald W. Holloway ("Claimant"), on the one hand, and Guardian Bank
("Bank") and Guardian Bancorp ("Bancorp") (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 his departure therefrom.
B. The parties hereto are now desirous of settling their differences
and wish to recognize the goodwill Claimant has engendered among Releasees'
customers and his efforts to assist in an orderly transition of
responsibilities.
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.
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.
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(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. PAYMENTS BY RELEASEES.
(a) Releasees shall pay Claimant the gross sum of ONE HUNDRED
TEN THOUSAND, SEVEN HUNDRED FORTY-TWO DOLLARS AND NO CENTS ($110,742.00). 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. The payment called
for in this subparagraph shall be made upon Claimant's delivery to Releasees of
five (5) executed copies of this Agreement and the expiration of the revocation
period set forth in paragraph 25 below.
(b) On January 3, 1994, Releasees shall pay Claimant the gross
sum of FIFTY-FIVE THOUSAND THREE HUNDRED SEVENTY-ONE DOLLARS AND NO CENTS
($55,371.00). 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.
(c) On January 3, 1994, Releasees shall pay Claimant the gross
sum of TWENTY-FIVE THOUSAND, FIVE HUNDRED FIFTY-FIVE DOLLARS AND EIGHTY-FIVE
CENTS ($25,555.85). This payment shall be treated as a taxable payment, and all
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.
(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. 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
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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.
4. SALE OF AUTOMOBILE.
(a) On January 3, 1993, Releasees shall sell to Claimant the
1988 Mercedes Benz 560 SEL which Releasees purchased but which they permitted
Claimant to use while he was in Bank's employ. Subject to Claimant's providing
Releasees with a copy of a written statement from a recognized Mercedes Benz
dealership or other reputable source regarding the current fair market value of
the vehicle, Releasees shall sell the vehicle to Claimant for $16,000.00.
(b) Claimant shall be permitted to keep possession of the
vehicle from the effective date of this Agreement until he purchases it from
Releasees. During that time, Releasees shall maintain any insurance coverage
currently in place on the vehicle, but Claimant shall be responsible for any
maintenance or repairs needed on the vehicle. Upon the sale of the vehicle,
Releasees shall have no further obligations for it (including, but not limited
to, maintaining insurance), and Claimant shall then have sole and full
responsibility for the vehicle (including, but not limited to, securing and
maintaining insurance).
5. TELEPHONES. Releasees shall transfer the car phone and portable
phone they permitted Claimant to use while in Bank's employ at an imputed income
of $100 each.
6. OUTPLACEMENT. At Releasees' expense, the outplacement firm of
Lee Hecht Harrison shall prepare a formal resume for Claimant's use to
Claimant's reasonable satisfaction.
7. INSURANCE. Bank shall continue to provide Claimant his current
health, life and long-term disability insurance benefits for a six (6) month
period commencing on the effective date of this Agreement. 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.
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8. 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 limiting the
generality of the foregoing, any and all matters arising out of or in any manner
whatsoever connected with his employment with Bank and his departure therefrom.
(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 and intentional or
negligent infliction of emotional distress.
(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 Bank and his departure therefrom. Each and all of the aforesaid
claims or potential claims, are hereby fully and finally settled, compromised
and released.
(d) The parties expressly agree that the above release of claims
does not include any claim Claimant may have under the California Workers'
Compensation Law or the terms of Bank's disability insurance policy for any
injuries Claimant may contend he suffered while in Bank's employ.
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Claimant acknowledges and agrees that he is releasing any other claim
(including, without limitation, any third party action) he may have against
Releasees, or any of them, or any of their directors, shareholders, officers,
employees or agents, arising out of any such injuries.
(e) 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.
(f) 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.
(g) 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 Bank and his departure therefrom.
(h) 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 Bank and his departure therefrom. Each and all of the aforesaid
claims are hereby fully and finally settled, compromised and released.
(i) 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:
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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.
(j) 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.
9. LETTER OF RECOMMENDATION/REFERENCES. Upon request from Claimant,
Releasees will issue a copy of the letter of recommendation attached hereto as
Exhibit A 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, Releasees shall have no
obligation to provide references on Claimant's behalf.
10. 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.
11. MODIFICATION. This Agreement may not be modified except by a
writing signed by each of the parties hereto, or their duly authorized
representatives.
12. APPLICABLE LAW. This Agreement shall, in all respects, be
interpreted, construed and governed by and under the domestic laws of the State
of California.
13. 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"),
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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 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.
14. PROPRIETARY INFORMATION.
(a) Claimant agrees that he will not in any fashion, form or
manner, either directly or indirectly, 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).
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15. 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, 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 Releasees which Claimant had in his
possession, custody or control.
16. 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.
17. 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.
18. 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 by 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 by 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 or reports, to the extent
required by law, (b) to such of its directors, 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.
19. 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,
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including, without limitation, attorneys' fees incurred by Releasees, or any of
them, arising out of any breach of this Agreement by Claimant or the fact that
any representation expressly made herein by Claimant was false when made.
20. NO DISPARAGEMENT. The parties 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 the other
or any of their respective employees, officers, executives, directors,
shareholders, staff members, agents, related organizations, successors or
assigns.
21. 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.
22. 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.
23. 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.
24. CONSULTATION WITH ATTORNEY, COMPLETE UNDERSTANDING OF AGREEMENT
AND ACKNOWLEDGMENT OF RECEIPT OF CONSIDERATION. 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. Claimant further acknowledges that the payments
and other consideration which he is receiving
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pursuant to this Agreement represent consideration in addition to any payment of
value to which he is already entitled.
25. 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: 11/26/93 GUARDIAN BANCORP
By: H. Fletcher
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Title: President
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Dated: 11/26/93 GUARDIAN BANK
By: H. Fletcher
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Title: President
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Dated: 11/26/93 Ronald W. Holloway
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RONALD W. HOLLOWAY
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