RETIREMENT AND RELEASE AGREEMENT
This Retirement and Release Agreement (hereinafter "Agreement") is
entered into by and between John O. Brooks (hereinafter "BROOKS"), and BAY AREA
BANK (hereinafter the "BANK") and BAY AREA BANCSHARES (hereinafter
"BANCSHARES").
WHEREAS, BROOKS has been and is currently employed by the BANK as
President and Chief Executive Officer of the BANK and Chief Operating Officer of
BANCSHARES;
WHEREAS, BROOKS has been and is currently a director of the BANK and a director
of BANCSHARES; WHEREAS, the parties desire to provide for BROOKS' retirement
which will result in the termination of his employment with the BANK,
termination of his appointment as an officer of the BANK and BANCSHARES and
termination of his election as a director of the BANK and BANCSHARES; and
WHEREAS, the parties hereto desire to enter a final agreement and a
binding waiver and release of any and all matters or claims by BROOKS.
NOW, THEREFORE, in consideration of the mutual promises herein, the
parties agree and covenant as follows:
1. The BANK and BROOKS have negotiated the retirement and termination
of BROOKS' employment with the BANK as a regular full-time employee, which
retirement and termination shall be effective upon BROOKS' execution of this
Agreement, subject to the following terms:
a. The BANK shall pay to BROOKS, less any amounts required by
law to be withheld, a payment of One Hundred Four Thousand Dollars
($104,000.00).
b. Such payment shall be made by check and delivered to BROOKS
by hand or via overnight delivery service no later than the eighth (8th) day
after his execution of this Agreement, subject to the conditions set forth
herein.
c. The BANK and BROOKS shall enter into an Amended and
Restated Salary Continuation Agreement dated the same day as this Agreement and
attached hereto as Exhibit A.
d. The terms of that certain promissory note dated December 4,
1997, from BROOKS in favor of BANCSHARES shall be amended to provide that the
note shall be repaid in full no later than December 31, 2002. The principal
shall be reduced by at least 25%, 50% and 75% of the balance now outstanding by
no later than December 31, 1999, 2000 and 2001, respectively. BROOKS shall have
the right to prepay the principal in whole or in part at any time without
penalty. All other terms and conditions of the promissory note shall remain
unchanged.
e. The BANK shall pay BROOKS' COBRA payments through August
31, 1998 and BROOKS shall be responsible thereafter if BROOKS elects to maintain
COBRA coverage.
f. This Agreement shall not become final and no payment or
other benefit described in this Agreement shall be due if BROOKS revokes his
acceptance of this Agreement
within the time limits and in the manner provided in paragraph 4 below.
2. BROOKS last day as an employee of the BANK shall be the date he
executes this Agreement, after which all salary due to BROOKS and all accrued
but unpaid vacation shall be paid and notice of COBRA rights shall be given.
BROOKS shall return all keys and other property of the BANK upon his execution
of this Agreement.
3. BROOKS= signature to this Agreement shall serve as his election to
retire as an employee and to resign as an officer and director of the BANK and
as an officer and director of BANCSHARES.
4. In entering into this Agreement, BROOKS knowingly and voluntarily
waives and releases any and all rights and protections BROOKS may otherwise have
against the BANK or BANCSHARES under federal, state and local employment
discrimination laws, statutes and ordinances, and specifically those rights and
protections under the Age Discrimination and Employment Act of 1967 (hereinafter
"ADEA"), the Older Worker's Benefit Protection Act of 1990 (hereinafter
"OWBPA"), the Civil Rights Act of 1964 (hereinafter "TITLE VII"), the Civil
Rights Act of 1991 (hereinafter "CRA"), the Americans With Disabilities Act
(hereinafter "ADA"), the Employee Retirement Income Security Act (hereinafter
"ERISA"), and the California Fair Employment and Housing Act (hereinafter
"FEHA"). In making this waiver and release of BROOKS' rights and protections
under all federal, state and municipal laws, statutes and ordinances, including
the above-referenced laws, BROOKS acknowledges the following:
a. BROOKS has had a full, unrestricted opportunity to consult
with legal counsel of his own choosing for the purpose of being advised of his
rights and the consequences of entering into this Agreement, which Agreement
waives his rights and protections under the above-referenced laws, statutes and
ordinances. BROOKS acknowledges that he has received no legal advice from the
BANK or from the BANK's attorneys, and is not relying on a position of trust nor
his past working relationship with the BANK or the BANK's attorneys.
b. BROOKS is receiving lawful consideration in exchange for
his waiver and release of his rights and protections under the above-described
laws statutes and ordinances, including the ADEA, OWBPA, TITLE VII, CRA, ADA,
ERISA, and the FEHA.
c. BROOKS acknowledges that in accordance with the provisions
of the OWBPA, the BANK has given BROOKS the opportunity to take twenty-one (21)
days to consider the terms of this Agreement and has encouraged him to consult
with counsel of his own choosing (which he has done), which right BROOKS may
waive at his option by signing this Agreement before the expiration of
twenty-one (21) days, but which the BANK has not required him to waive.
Moreover, the BANK hereby notifies BROOKS that, also pursuant to the OWBPA and
ADEA, BROOKS has seven (7) days to revoke this Agreement after he has signed it
with respect to claims under the OWBPA and ADEA. The BANK hereby notifies
BROOKS, and BROOKS acknowledges, that BROOKS is not waiving any rights or claims
under the ADEA, if any, that may arise after the execution of this Agreement.
This Agreement shall become effective and enforceable upon the expiration of
seven (7) days following the date that BROOKS executes this Agreement. BROOKS
understands that the Agreement may not be revoked after the seven (7) day
period.
5. This Agreement shall not become effective or enforceable until the
period set forth in paragraph 4 has expired, and then only if BROOKS has not
revoked this Agreement during the interim. From the date he executes this
Agreement through the interim waiting period for this Agreement to become
effective or until it is revoked pursuant to paragraph 4 above, BROOKS shall
render no services to the BANK, shall be considered on an unpaid leave of
absence from the BANK, shall have no access to the non-public area of the BANK's
property and shall not hold himself out to be an employee, officer or director
of the BANK or any affiliate.
6. BROOKS further agrees not to file or process in any state or federal
court or before any local, state or federal governmental agency any charge or
complaint which is in any manner inconsistent with the terms of this Agreement.
BROOKS represents and warrants that he has not assigned to any other person or
entity any cause of action he may have had against the BANK or BANCSHARES.
7. In consideration of the terms of this Agreement, BROOKS acknowledges
complete satisfaction of, and does hereby forever release, absolve, and
discharge the BANK and BANCSHARES, including but not limited to their affiliated
corporations, successors, assigns, directors, officers, employees, agents,
attorneys, and representatives from any and all causes of action, judgments,
liens, indebtedness, damages, claims, liabilities, and demands, and causes of
action of whatever kind or nature, whether known or unknown, suspected or
unsuspected, which BROOKS now has or holds, or any time had or held against the
BANK, BANCSHARES, their affiliated corporations, successors, assigns, directors,
officers, employees, agents, attorneys, and representatives. This release
expressly waives any and all claims BROOKS may presently have against the BANK
or BANCSHARES regardless of the nature, source, or basis for any such claim
(except for claims arising solely as a result of deposit accounts that he has at
the BANK), including, but not limited to, all matters related to BROOKS'
employment, compensation for employment and separation from employment or claims
pursuant to any rights under federal, state or local laws, regulations or
ordinances prohibiting discrimination on the basis of race, color, religion,
national origin, age, sex, sexual orientation, physical or mental disability and
specifically any claims arising under the ADEA, OWBPA, TITLE VII, CRA, ADA,
ERISA, and FEHA, as identified in paragraph 4 above.
8. As further consideration for this Agreement, BROOKS agrees that he
shall make himself available to the BANK for reasonable consultation in
connection and in cooperation with BANK and BANCSHARES with respect to matters
for which he may have personal knowledge, including but not limited to lawsuits
(without the necessity of a subpoena), collections, audits, investigations and
operations inquiries. Such consultation shall be provided without charge to the
BANK if it relates to factual information not known to others in the BANK and
shall be provided for a charge of $100 per hour for all other matters. In
addition, BROOKS agrees that he shall not use in any way nor disclose to any
person or entity any confidential information or trade secrets of the BANK,
directly or indirectly, at any time during the next four years or such
additional time beyond four years as may be permitted by law. BROOKS expressly
warrants that he has returned or will return on or before the date he executes
this Agreement, any and all confidential information or trade secrets previously
obtained from the BANK. BROOKS understands that such confidential information
and trade secrets include, but are not limited to customer client lists,
customer client information, vendor agreements, marketing and business
development plans and policy and procedural manuals and that solicitation of now
existing customers of the Bank, interference with the BANK with respect to its
now existing locations and marketing agents and competition with the BANK with
respect to its now existing ATM locations (same owner/lessor and same site),
affinity groups and SAP merchants, is prohibited by this paragraph. The parties
agree that, in the event BROOKS violates the provisions of this paragraph, the
BANK cannot be reasonably or adequately compensated in damages in an action at
law as a result of BROOKS' breach of this Agreement. In such event and in
addition to having the right to rescind this Agreement and seek restitution of
any monies paid pursuant to this Agreement, the BANK shall be entitled to file
an action in a court of competent jurisdiction for damages and injunctive
relief, which may include but shall not be limited to restraining BROOKS from
taking any further action in violation of this paragraph.
9. In consideration of the terms of this Agreement, the BANK and
BANCSHARES acknowledge complete satisfaction of, and do hereby forever release,
absolve, and discharge BROOKS, including but not limited to his heirs,
successors, assigns, agents, attorneys, and representatives from any and all
causes of action, judgments, liens, indebtedness, damages, claims, liabilities,
and demands, and causes of action of whatever kind or nature, whether known or
unknown, suspected or unsuspected, which the BANK or BANCSHARES now has or
holds, or any time had or held against BROOKS, his heirs, successors, assigns,
agents, attorneys, and representatives. This release expressly waives any and
all claims the BANK and BANCSHARES may presently have against BROOKS regardless
of the nature, source, or basis for any such claim (except for claims arising
solely as a result of extensions of credit from the BANK or BANCSHARES to
BROOKS).
10. The parties acknowledge that this is a full and final release, and
that the parties intend and expressly agree that it will be effective as a bar
to each and every claim, demand and cause of action BROOKS has against the BANK
and BANCSHARES and the BANK or BANCSHARES has against BROOKS as of the date of
this Agreement. The parties also expressly waive any and all rights and benefits
conferred upon them now or in the future under
the terms of California Civil Code section 1542, 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 debtor."
11. By entering into this Agreement, none of the parties admits any
violation of any provisions of federal, state or local law or any other legal
obligation owed to each other and no incidental or implied admissions of
liability shall arise from execution of this document.
12. The parties agree that the events leading to this Agreement, the
fact of this Agreement and the terms and conditions of this Agreement are and
shall be maintained in privacy and confidence, unless otherwise required by law.
Both parties agree that this confidentiality is a material term of the
Agreement. The parties may disclose the terms of this Agreement to their own
attorneys, accountants or tax preparer on a confidential, as-needed basis, and
the BANK and BANCSHARES may do the same with regard to their internal operations
and with government regulators. The parties may disclose language to the effect
that BROOKS is retiring and that BROOKS has been the president of the BANK for
the past five years, during which the BANK has recorded historic earnings and
grown to an asset size in excess of One Hundred Twenty-Five Million Dollars and
the BANK and BANCSHARES may respond to inquiries and provide a reference letter
to appropriate potential employers in the form attached hereto as Exhibit B.
13. The parties agree that this Agreement constitutes the entire
agreement and understanding of the parties. The parties further agree that the
terms of this Agreement are contractual and that the parties, their heirs,
successors, and assigns are bound by it, and that any dispute as to its terms or
its interpretation is governed by the laws of the State of California. Should
any arbitrator or court of law find any term or clause invalid under the
prevailing law, then that term or clause only will be omitted from enforcement,
all other terms and conditions remaining enforceable.
14. BROOKS warrants that no promise, inducement or agreement not
expressed herein has been made in connection with this Agreement. It is
expressly understood and agreed that this Agreement may not be altered, amended,
modified, or otherwise changed in any respect whatsoever except by a writing
duly executed by authorized representatives of the parties thereto. BROOKS and
the BANK and BANCSHARES hereby agree that they will make no claim at anytime or
place that this Agreement has been orally altered or modified or otherwise
changed by oral communication or any kind or character.
15. The parties further state that they have read this Agreement, that
they know and understand the contents of this Agreement, and that they have
signed this Agreement of their own free act and after having a full,
unrestricted opportunity to consult with their own attorneys. The parties
approve and accept the terms and provisions of this Agreement and agree to be
bound thereby. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
Dated: February ____, 1998
___________________
John O. Brooks
Dated: February ____, 1998
BAY AREA BANK
By___________________________
Dennis Royer
Chairman of the Board
Dated: February ____, 1998
BAY AREA BANCSHARES
By___________________________
Robert Haight
Chairman of the Board
APPROVED AS TO FORM:
- ------------------------
David J. Block
Leland, Parachini, Steinberg,
Matzger & Melnick
Counsel for BROOKS
APPROVED AS TO FORM:
- -------------------------
Jay D. Pimentel
Haines Brydon & Lea
Counsel for the BANK
and BANCSHARES
AMENDED AND RESTATED
SALARY CONTINUATION AGREEMENT
THIS AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT ("Agreement")
is made and entered into this _____ day of February, 1998, by and between Bay
Area Bancshares, a California corporation, Bay Area Bank, a California banking
corporation (collectively "Employer"), their successors or assigns, and John O.
Brooks (the "Executive").
WITNESSETH:
WHEREAS, the Executive is a member of Employer's key management team
and has been employed by Employer since November, 1992; and
WHEREAS, the experience of the Executive, his knowledge of the affairs
of the Employer, and his reputation and contacts in the banking industry has
been so valuable to Employer and Employer wishes to compensate the Executive for
his past contributions to Employer; and
WHEREAS, Employer and Executive have mutually agreed to permit
Executive to retire from his employment with Employer at this time; and
WHEREAS, this Agreement shall supersede any prior agreements between
Employer and Executive regarding any salary continuation benefits; and
WHEREAS, the Executive is willing to retire from the employ of the
Employer provided the Employer agrees to pay the Executive or his beneficiaries
certain benefits in accordance with the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of services performed in the past, as
well as the mutual promises and covenants herein contained, it is hereby agreed
as follows:
ARTICLE 1.
1.1. Beneficiary. The term Beneficiary shall mean the person or persons whom the
Executive shall designate in writing to receive the benefits provided hereunder.
1.2. Named Fiduciary and Plan Administrator. The named Fiduciary and Plan
Administrator of this plan shall be Bay Area Bank.
ARTICLE 2.
2.1. Employment. Employer has employed the Executive from November ___,
1992 until February ___, 1998.
2.2. Fringe Benefits. The salary continuation benefits provided by this
Agreement are granted by the Employer as a fringe benefit to the Executive and
are not part of any salary reduction plan or any arrangement deferring a bonus
or a salary increase. The Executive has no option to take any current payment or
bonus in lieu of these salary continuation benefits.
ARTICLE 3.
3.1. Retirement. For purposes of this Agreement the Executive shall be
considered to have retired on April 30, 2006 (the "Retirement Date").
3.2. Payment. The Employer agrees that upon such Retirement Date it will pay to
the Executive the annual sum of Thirty-Six Thousand, Three Hundred Sixty-Three
Dollars and Sixty Cents ($36,363.60), payable on April 1st of each year
beginning on April 30, 2006 and ending on April 30, 2020, subject to the
conditions and limitations set forth in this Agreement.
3.3 Death After Retirement. The Employer agrees that if the Executive dies after
the Retirement Date but shall die before receiving the full amount of monthly
payments to which he is entitled under this Agreement, the Employer will
continue to make such monthly payments to the Executive's designated Beneficiary
for the remaining period. If a valid Beneficiary Designation is not in effect,
the payments shall be made to the John O. Brooks Family Revocable Trust Utd
4/5/91 (the "Brooks Family Trust").
ARTICLE 4.
4. Death Prior to Retirement Date. In the event the Executive should die at any
time after the date of this Agreement but prior to his Retirement Date, Employer
shall begin to make the payments required by Section 3.2 of this Agreement on
April 30 of the year following the death of the Executive. If a valid
Beneficiary Designation is not in effect, the payments shall be made to the
Brooks Family Trust.
ARTICLE 5.
5. Nonassignable. Neither the Executive, his spouse, nor any other beneficiary
under this Agreement shall have any power or right to transfer, assign,
anticipate, hypothecate, mortgage, commute, modify, or otherwise encumber in
advance any of the benefits payable hereunder, nor shall any of said benefits be
subject to seizure for the payment of any debts, judgments, alimony or separate
maintenance, owed by the Executive or his beneficiary or any of them, or be
transferable by operation of law in the event of bankruptcy, insolvency or
otherwise.
ARTICLE 6.
6. Unsecured General Creditor. The Executive's rights are limited to the right
to receive payments as provided in this Agreement and the Executive's position
with respect thereto is that of a general unsecured creditor of the Employer.
ARTICLE 7.
7. Reorganization. The Employer shall not voluntarily engage in any merger,
reorganization, recapitalization or sale of all or substantially all of the
business or assets of the Employer unless and until such succeeding or
continuing corporation, firm, association, partnership, trust or person agrees
to assume and discharge the obligations of the Employer under this Agreement.
Upon the occurrence of such event, the term "Employer" as used in this Agreement
shall be deemed to refer to such successor or survivor corporation, firm,
association, partnership, trust or person.
ARTICLE 8. 8. Not a Contract of Employment. This Agreement shall not be deemed
to constitute a contract of employment between the parties hereto.
ARTICLE 9.
9. Liquidated Damages. The parties hereto, before entering into this Agreement,
have been concerned with the fact that substantial damages will be suffered by
Executive in the event that the Employer shall fail to perform according to this
Agreement. In the event of nonperformance by the Employer for a period of thirty
(30) days from the time any such payment was scheduled to be made pursuant to
this Agreement, Executive shall immediately be entitled to liquidated damages
equal to one and one-quarter (1-1/4) times the remaining payments due to
Executive under this Agreement. This provision shall not be applicable in the
event that such nonpayment is the result of prohibition of such payment by law,
regulations or order of a banking regulatory agency.
ARTICLE 10.
10.1 Successors and Assigns; Assignment. The rights and obligations of this
Agreement shall be binding upon and inure to the benefit of the successors,
assigns, heirs and personal representatives of the parties hereto. Executive may
not assign this Agreement or any of Executive's rights hereunder except with the
prior written consent of the Employer.
10.2 Severability. If any provision of this Agreement, as applied to either
party or to any circumstance, is judged by a court to be void or unenforceable,
in whole or in part,
the same shall in no way affect any other provision of this Agreement, the
application of such provision in any other circumstances, or the validity or
enforceability of this Agreement.
10.3 Applicable Law; Jurisdiction and Venue. This Agreement and all matters or
issues collateral hereto shall be governed by the laws of the State of
California applicable to contracts performed entirely therein. Executive and
Employer each consent to the jurisdiction of, and any action concerning this
Agreement shall be brought and tried in, the Superior or Municipal Court for the
County of San Mateo.
10.4 Waiver. A waiver by either party of any of the terms or conditions of this
Agreement in any one instance shall not be deemed or construed to be a waiver of
such terms or conditions for the future, or of any subsequent breach thereof.
All remedies, rights, undertakings, obligations, and agreements contained in
this Agreement shall be cumulative, and none of them shall be in limitation of
any other remedy, right, undertaking, obligation or agreement of either party.
10.5 Attorneys' Fees. If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorneys'fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
10.6 Headings. The headings in this Agreement are for convenience only and shall
not in any manner affect the interpretation or construction of the Agreement or
any of its provisions.
10.7 Notice. Any notice or other communication to be given under this Agreement
shall be in writing and shall be deemed to have been duly given on the date of
service if personally served, or if mailed, upon deposit in the United States
mail, first class postage prepaid, express or certified, return receipt
requested, and properly addressed to the parties as follows: if to Executive at
his last address shown in Bank's records; if to Employer
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Either party may designate a new address for purposes of this Section 10.7 by
giving the other notice of the new address as provided herein.
Signature page follows.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be duly executed
by its proper officers and the Executive has hereunto set his hand at Redwood
City, California, the day and year first above written.
EMPLOYER: EXECUTIVE:
Bay Area Bank _____________________________
John O. Brooks
By: ____________________________
Bay Area Bancshares
By: ______________________________
Its: Chairman