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EXHIBIT 10.17
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the date specified below as the
effective date (the "Effective Date"), by and between DON J. MCGRATH (the
"Employee") and FIRST HAWAIIAN, INC., a Delaware corporation (the "Company").
1. Term of Employment.
(a) Basic Rule. The Company agrees to employ the Employee, and the
Employee agrees to remain in employment with the Company, and as set forth in
Section 2 below, the Company's subsidiary (and any successor entity thereto),
Bank of the West (the "Bank") from the Effective Date until the date when the
Employee's employment terminates pursuant to Subsection (b), (c) or (d) below.
(b) Early Termination. Subject to Sections 6, 7 and 8, the Company may
terminate the Employee's employment by giving the Employee 30 days' advance
notice in writing. The Employee may terminate his employment by giving the
Company 30 days' advance notice in writing. The Employee's employment shall
terminate automatically in the event of his death. Any waiver of notice shall be
valid only if it is made in writing and expressly refers to the applicable
notice requirement of this Section 1.
(c) Cause. Subject to the provisions of this Subsection (c), upon
written notice to the Employee, the Company may at any time terminate the
Employee's employment for Cause. For all purposes under this Agreement, "Cause"
shall mean:
(i) A material failure by the Employee to perform his duties,
other than a failure resulting from the Employee's complete or partial
incapacity due to physical or mental illness or impairment, hereunder;
(ii) Gross misconduct, fraud or dishonesty to the Company or its
employees; or
(iii) Conviction of, or plea of "guilty" or "no contest" to, a
felony; or
(iv) A material violation by the Employee in the course of his
duties hereunder of any law or regulation to which the Company is
subject provided that the Employee knew or should have known that the
conduct in question was in violation of such law or regulation;
provided, that a violation of such law or regulation shall be deemed
to be "material" only if it results in material financial loss to the
Company or if it materially impairs the Employee's ability to perform
his duties hereunder or his value to the Company as its officer; and
provided, further, that the Employee shall be fully protected by, and
entitled to rely upon, advice of counsel to the Company for purposes
of determining whether the Employee knew or should have known that the
conduct in question was in violation of such law or regulation.
(d) Disability. Subject to Section 8, the Company may terminate the
Employee's active
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employment due to Disability by giving the Employee 30 days' advance notice in
writing. For all purposes under this Agreement, "Disability" shall mean a
physical or mental incapacity that qualifies the Employee for payments under the
Company's group long-term disability insurance policy or plan (the "LTD Plan").
In the event that the Employee resumes the performance of substantially all of
his duties hereunder before the termination of his active employment under this
Subsection (d) becomes effective, the notice of termination shall automatically
be deemed to have been revoked.
(e) Rights Upon Termination. Except as expressly provided in Sections
6, 7 and 8, upon the termination of the Employee's employment pursuant to this
Section 1, the Employee shall only be entitled to the compensation, benefits and
reimbursements under the plans, programs or policies described in Sections 3, 4
and 5 and which accrued or vested during the period preceding the effective date
of the termination or as a consequence of such termination (whether payable on
such termination or thereafter). The payments under this Agreement shall fully
discharge all responsibilities of the Company and the Bank to the Employee,
other than the Employee's entitlement to such accrued or vested compensation,
benefits and reimbursements as referred to in the preceding sentence.
(f) Termination of Agreement. This Agreement shall terminate when all
obligations of the parties hereunder have been satisfied.
2. Duties and Scope of Employment.
(a) Position. The Company agrees to employ the Employee as its
President and Chief Operating Officer for the term of his employment under this
Agreement. In addition, the Company agrees to cause the Bank to employ the
Employee as the Bank's President and Chief Executive Officer for the term of
this Agreement. The Employee, as President and Chief Operating Officer of the
Company, shall report to the Chief Executive Officer of the Company and in his
capacity as President and Chief Executive Officer of the Bank, the Employee
shall report to the Board of Directors of the Bank (the "Bank of the West
Board"). As of the Effective Date, the Employee shall be appointed to serve as a
member of the Board of Directors of the Company (the "Board") and, thereafter,
the Company agrees to use its best efforts to have the Employee reelected to the
Board. The Company shall also appoint the Employee to the Bank of the West Board
and cause the reelection of the Employee to the Bank of the West Board. The
Employee's principal offices for the performance of his duties hereunder shall
be located in the San Francisco Bay Area. However, the Company shall also
maintain suitable offices and secretarial support for the Employee at its
headquarters in Honolulu, Hawaii for use while he is performing services at that
location.
(b) Obligations. During the term of his employment under this
Agreement, the Employee shall devote his full business efforts and time to the
Company and its affiliates. He shall not render services to any other person
without the express prior approval of the Board (including, without limitation,
services as a member of the board of directors of another corporation).
Membership on the board of directors of another corporation shall not be
approved unless:
(i) Such other corporation is not engaged in activities that are
competitive, or potentially competitive, with the Company;
(ii) Such other corporation is of a quality and stature
commensurate, in the sole judgment of the Board, with the Employee's
position under this Agreement and with
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the Company's objectives; and
(iii) The Employee's aggregate time commitments to board
memberships are consistent with his responsibilities under this
Agreement.
The foregoing shall not preclude the Employee from engaging in appropriate
civic, charitable or religious activities or from devoting a reasonable amount
of time to private investments that do not interfere or conflict with his
responsibilities to the Company.
3. Salary.
(a) Amount of Salary. During the term of his employment under this
Agreement, the Company agrees to pay the Employee as compensation for his
services to the Company and the Bank a base salary at the annual rate of
$650,000 or at such higher rate as the Company may determine from time to time.
Such salary shall be payable in accordance with the Company's standard payroll
procedures. Once the Company has increased such salary, it thereafter shall not
be reduced for any reason. The Company covenants that such base salary is and
shall be, during the term hereof, the second highest base salary of any employee
of the Company or any of its subsidiaries.
(b) Base Compensation. For purposes of this Agreement, the term "Base
Compensation" for a year means the difference between:
(i) The Employee's total compensation for such year, as shown on
the Form W-2 prepared by the Company for such year; minus
(ii) All bonuses received by the Employee in such year.
4. Vacations and Employee Benefits.
During the term of his employment under this Agreement, the Employee
shall be entitled to not less than four weeks of paid vacation time per annum.
During such term, the Employee shall also be eligible to participate in all of
the employee benefit plans and executive compensation programs (including, but
not limited to, all bonus, incentive, stock, stock option, deferred compensation
and retirement plans and executive loan programs) maintained by the Company or
the Bank, subject, in each case to the generally applicable terms and conditions
of the plan in question and to the determinations of any person or committee
administering such plan. The determination as to the amounts of any awards
available to the Employee under these programs shall be reviewed at least
annually by the Company's Executive Compensation Committee to ensure that such
amounts are competitive with awards granted to similarly situated executives of
publicly held bank holding companies comparable to the Company.
5. Business Expenses.
During the term of his employment under this Agreement, the Employee
shall be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company, or
the Bank, shall reimburse the Employee for such expenses upon presentation of an
itemized account and appropriate supporting documentation, all in accordance
with the Company's generally applicable policies.
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6. Termination After Change in Control.
(a) Definition. For all purposes under this Agreement, "Change in
Control" shall have the meaning ascribed to such term in the Standstill and
Governance Agreement (the "Standstill Agreement") in the form attached as
Exhibit C to the Agreement and Plan of Merger dated as of May 28, 1998 (the
"Merger Agreement"), between Banc West Corporation and the Company.
Notwithstanding the foregoing sentence, no "Change in Control" for purposes of
this Agreement shall be deemed to occur if the "person" (as defined in the
Standstill Agreement) who acquires control pursuant to such definition shall be
Banque Nationale de Paris or any Affiliate thereof.
(b) Good Reason. For all purposes under this Agreement, "Good Reason"
shall mean that the Employee, without his consent:
(i) Has incurred a material reduction in his title, authority or
responsibility at the Company or the Bank;
(ii) Has incurred a reduction in his Base Compensation;
(iii) Has been notified that his principal place of work will be
relocated by a distance of 50 miles or more; or
(iv) Is required to work more than 120 days per year outside of
the Employee's principal offices.
(c) Special Severance Payment. The Employee shall be entitled to
receive a severance payment from the Company (the "Special Severance Payment")
if, during the term of this Agreement and within the first 12-month period after
the occurrence of a Change in Control becomes effective, either:
(i) The Employee voluntarily resigns his employment with the
Company for Good Reason; or
(ii) The Company terminates the Employee's employment with the
Company for any reason other than Cause or Disability.
The Special Severance Payment shall be made in a lump sum not more than five
business days following the date of the employment termination and shall be in
an amount determined under Subsection (d) below. The Special Severance Payment
shall be in lieu of any further payments to the Employee under Section 3 and any
further accrual of benefits under Section 4 with respect to periods subsequent
to the date of the employment termination. Notwithstanding the preceding
sentence, however, the Employee shall be entitled to any payments or
acceleration of the vesting of awards which occur under the terms of any plan
described in Section 4 as a result of the Change in Control. With respect to any
options granted to the Employee pursuant to a stock option plan, the Employee
shall be 100% vested in any option outstanding upon a Change in Control. If the
Employee's employment is terminated pursuant to this Section 6(c), and
notwithstanding anything to the contrary in the Company's stock option plans and
the Employee's stock option agreements, the Employee shall have a minimum of
eighteen (18) months to exercise such options (irrespective of termination of
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employment).
(d) Amount. The amount of the Special Severance Payment shall be equal
to 300% of the sum of the following:
(i) The Employee's annual rate of Base Compensation, as in effect
on the date of the employment termination; plus
(ii) The arithmetic mean of the annual bonuses awarded to the
Employee by the Company (or by the Bank in respect of the period prior
to the Effective Date) for the three most recent consecutive fiscal
years ending prior to the date of the employment termination
(regardless of when paid). If the Company has determined that no bonus
shall be awarded to the Employee for a fiscal year, such bonus shall
be included in the calculation as zero.
(e) Insurance Coverage. During the 12-month period commencing upon a
termination of employment described in Subsection (c) above, the Employee (and,
where applicable, his dependents) shall be entitled to continue participation in
the group insurance plans maintained by the Company, including life, disability
and health insurance programs, as if he were still an employee of the Company.
Where applicable, the Employee's salary for purposes of such plans shall be
deemed to be equal to his Base Compensation. To the extent that the Company
finds it impossible to cover the Employee under its group insurance policies
during such 12-month period, the Company shall provide the Employee with
individual policies which offer at least the same level of coverage and which
impose not more than the same costs on him. The foregoing notwithstanding, in
the event that the Employee becomes eligible for comparable group insurance
coverage in connection with new employment, the coverage provided by the Company
under this Subsection (e) shall terminate immediately. Any group health
continuation coverage that the Company is required to offer under the
Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA") shall commence
when coverage under this Subsection (e) terminates.
(f) No Mitigation. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Section 6 (whether by seeking new
employment or in any other manner). Except as expressly provided in Subsection
(e) above, no such payment shall be reduced by earnings that the Employee may
receive from any other source.
7. Involuntary Termination Without Cause Or Voluntary Resignation for
Good Reason.
(a) Regular Severance Payment. The Employee shall be entitled to
receive a severance payment from the Company (the "Regular Severance Payment")
if, (i) during the term of this Agreement the Company terminates the Employee's
employment for any reason other than Cause or Disability, and Section 6 does not
apply or (ii) the Employee voluntarily resigns his employment with the Company
for Good Reason.
The Regular Severance Payment shall be made in a lump sum not more than five
business days following the date of the employment termination and shall be in
an amount determined under Subsection (b) below. The Regular Severance Payment
shall be in lieu of any further payments to the Employee under Section 3 and any
further accrual of benefits under Section 4 with respect to periods
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subsequent to the date of the employment termination.
(b) Amount. The amount of the Regular Severance Payment shall be equal
to 300% of the sum of the following:
(i) The Employee's annual rate of Base Compensation, as in effect
on the date of the employment termination; plus
(ii) The arithmetic mean of the annual bonuses awarded to the
Employee by the Company (or by the Bank in respect of the period prior
to the Effective Date) for the three most recent consecutive fiscal
years ending prior to the date of the employment termination
(regardless of when paid). If the Company has determined that no bonus
shall be awarded to the Employee for a fiscal year, such bonus shall
be included in the calculation as zero.
(c) Insurance Coverage. During the 12-month period commencing upon a
termination of employment described in Subsection (a) above, the Employee (and,
where applicable, his dependents) shall be entitled to continue participation in
the group insurance plans maintained by the Company, including life, disability
and health insurance programs, as if he were still an employee of the Company.
Where applicable, the Employee's salary for purposes of such plans shall be
deemed to be equal to his Base Compensation. To the extent that the Company
finds it impossible to cover the Employee under its group insurance policies
during such 12-month period, the Company shall provide the Employee with
individual policies which offer at least the same level of coverage and which
impose not more than the same costs on him. The foregoing notwithstanding, in
the event that the Employee becomes eligible for comparable group insurance
coverage in connection with new employment, the coverage provided by the Company
under this Subsection (c) shall terminate immediately. Any group health
continuation coverage that the Company is required to offer under COBRA shall
commence when coverage under this Subsection (c) terminates.
(d) No Mitigation. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Section 7 (whether by seeking new
employment or in any other manner). Except as expressly provided in Subsection
(c) above, no such payment shall be reduced by earnings that the Employee may
receive from any other source.
(e) Option Plans. Notwithstanding anything to the contrary in the
Company's stock option plans and the Employee's stock option agreements, in the
event of a termination of the Employee under this Section 7, the Employee shall
be credited with an additional year of service for purposes of determining the
vested portion of the Employee's stock options as of the date of such
termination.
8. Termination for Disability.
(a) Disability Continuation Period. In the event that, during the term
of this Agreement, the Company terminates the Employee's employment for
Disability, the Employee shall be entitled to receive all of the payments and
benefit coverage described in this Section 8. Such payments and benefit coverage
shall continue for the period (the "Disability Continuation Period") commencing
on the date when the employment termination is effective and ending on the
earliest of:
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(i) The date 36 months after such date;
(ii) The date when the Employee's benefits under the LTD Plan
terminate; or
(iii) The date of the Employee's death.
(b) Compensation. During the Disability Continuation Period, the
Company shall pay the Employee compensation at an annual rate equal to the
difference between:
(i) The sum of the following:
(A) The Employee's annual rate of Base Compensation, as in
effect on the date of the employment termination; plus
(B) The arithmetic mean of the annual bonuses awarded to the
Employee by the Company (or by the Bank in respect of the period prior
to the Effective Date) for the three most recent consecutive fiscal
years ending prior to the date of the employment termination
(regardless of when paid); minus
(ii) The benefits received by the Employee during the applicable
period under the LTD Plan.
If the Company has determined that no bonus shall be awarded to the Employee for
a fiscal year, such bonus shall be included in the calculation as zero.
Compensation under this Subsection (b) shall be paid at periodic intervals in
accordance with the Company's standard payroll procedures.
(c) Insurance Coverage. During the Disability Continuation Period, the
Employee (and, where applicable, his dependents) shall be entitled to continue
participation in the group insurance plans maintained by the Company, including
life, disability and health insurance programs, as if he were still an employee
of the Company. Where applicable, the Employee's salary for purposes of such
plans shall be deemed to be equal to his Base Compensation. To the extent that
the Company finds it impossible to cover the Employee under its group insurance
policies during the Disability Continuation Period, the Company shall provide
the Employee with individual policies which offer at least the same level of
coverage and which impose not more than the same costs on him. Any group health
continuation coverage that the Company is required to offer under COBRA shall
commence when coverage under this Subsection (c) terminates.
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9. Successors.
(a) Company's Successors. The Company shall require any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets, by an agreement in substance and form
satisfactory to the Employee, to assume this Agreement and to agree expressly to
perform this Agreement in the same manner and to the same extent as the Company
would be required to perform it in the absence of a succession. The Company's
failure to obtain such agreement prior to the effectiveness of a succession
shall be a breach of this Agreement and shall entitle the Employee to all of the
compensation and benefits to which he would have been entitled hereunder if the
Company had involuntarily terminated his employment without Cause immediately
after such succession becomes effective. For all purposes under this Agreement,
the term "Company" shall include any successor to the Company's business and/or
assets which executes and delivers the assumption agreement described in this
Subsection (a) or which becomes bound by this Agreement by operation of law.
(b) Employee's Successors. This Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
10. Non-Disclosure of Confidential Information.
During the term of this Agreement and thereafter, the Employee shall
not, without the prior written consent of the Board, disclose or use for any
purpose (except in the course of his employment and in furtherance of the
business of the Company and its subsidiaries) confidential information or
proprietary data of the Company and its subsidiaries, except as required by
applicable law or legal process; provided, however, that confidential
information shall not include any information known generally to the public or
ascertainable from public or published information (other than as a result of
unauthorized disclosure by the Employee) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Company and its subsidiaries. The
Employee agrees to deliver to the Company at the termination of his employment,
or at any other time the Company may request, all memoranda, notes, plans,
records, reports and other documents (and copies thereof) relating to the
business of the Company and its subsidiaries which he may then possess or have
under his control.
11. Non-Competition.
(a) Covenant Not To Compete. This Section 11 shall apply:
(i) During the term of this Agreement;
(ii) For three years after the Employee receives the Regular
Severance Payment under Section 7; and
(iii) For three years after the Employee voluntarily resigns his
employment for any reason not described in Section 6, but only if the
Company voluntarily makes all provisions of Section 7 applicable to
him.
While this Section 11 applies, the Employee shall not, directly or indirectly,
engage in any banking
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business or activity in the States of California, Hawaii, Oregon, Washington, or
Idaho ("Competitive Business") nor be employed by, render services of any kind
to, advise or receive compensation in any form from, nor invest or participate
in any manner or capacity in, any entity or person which directly or indirectly
engages in a Competitive Business.
(b) Exception. Subsection (a) above shall not preclude investments in a
corporation whose stock is traded on a public market and of which the Employee
owns less than one percent of the outstanding shares.
(c) Purpose of Covenant. It is agreed by both parties hereto that the
covenants contained in Subsection (a) above are reasonable and necessary to
protect the confidentiality of the customer, lists and trade secrets, and other
confidential information concerning the Company, acquired by the Employee.
(d) Specific Performance. The Employee and the Company recognize and
agree that (i) because of the nature of the businesses in which the Company and
its subsidiaries are engaged and because of the nature of the confidential
information that the Employee has acquired or will acquire with respect to the
businesses of the Company and its subsidiaries, it would be impracticable and
excessively difficult to determine the actual damages of the Company or its
subsidiaries in the event that the Employee breaches any of the covenants
contained in Subsection (a) above, and (ii) damages in an action at law would
not constitute reasonable or adequate compensation to the Company or its
subsidiaries in the event that the Employee breaches any of such covenants.
Accordingly, if the Employee commits any breach of such covenants or threatens
to commit any such breach, then the Company shall have the right to have the
covenants contained in Subsection (a) above specifically enforced by any court
having equity jurisdiction, without posting bond or other security, it being
acknowledged and agreed by both parties hereto that any such breach or
threatened breach would cause irreparable injury to the Company and its
subsidiaries and that an injunction may be issued against the Employee. The
rights described in this Subsection (d) shall be in addition to, and not in lieu
of, any other rights or remedies available to the Company under law or in
equity.
(e) Modification by Court. If any of the covenants contained in
Subsection (a) above is determined to be unenforceable because of the duration
of such covenants or the area covered thereby, then the court making the
determination shall have the power to reduce the duration of such covenants
and/or the area covered thereby, and such covenants, in their reduced form,
shall be enforceable.
(f) Different Jurisdictions. If any of the covenants contained in
Subsection (a) above is determined to be wholly unenforceable by the courts of
any domestic or foreign jurisdiction, then the determination shall not bar or in
any way affect the Company's right to relief in the courts of any other
jurisdiction with respect to any breach of such covenants in such other
jurisdiction. Such covenants, as they relate to each jurisdiction, shall be
severable into independent covenants and shall be governed by the laws of the
jurisdiction where a breach occurs.
(g) Discontinuance of Severance Pay. In the event that the Employee
breaches any of the covenants contained in Subsection (a) above, the Company may
discontinue all payments and benefits to the Employee under Section 7.
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12. No Solicitation.
This Section 12 shall apply (a) during the term of this Agreement and
(b) during the one-year period following the termination of the Employee's
employment for any reason not described in Section 6. While this Section 12
applies, the Employee shall not, directly or indirectly, contact any employee of
the Company or any of its subsidiaries to solicit such employee (or any entity
in which such employee has a significant equity interest) to become an employee,
partner or independent contractor of the Employee or any other person.
13. Tax Effect of Payments.
Excise Tax Restoration Payment. In the event that it is determined that
any payment or distribution of any type to or for the benefit of the Employee
made by the Company, by any of its affiliates, by any person who acquires
ownership or effective control of the Company or ownership of a substantial
portion of the Company's assets (within the meaning of section 280G of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
"Code")) or by any affiliate of such person, whether paid or payable or
distributed or distributable pursuant to the terms of an employment agreement or
otherwise (the "Total Payments"), would be subject to the excise tax (such
excise tax, together with any such interest or penalties, are collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to receive
an additional payment (an "Excise Tax Restoration Payment") in an amount that
shall fund the payment by the Employee of any Excise Tax on the Total Payments
as well as all income taxes imposed on the Excise Tax Restoration Payment, any
Excise Tax imposed on the Excise Tax Restoration Payment and any interest or
penalties imposed with respect to taxes on the Excise Tax Restoration Payment or
any Excise Tax.
Determination by Auditors. All mathematical determinations and all
determinations of whether any of the Total Payments are "parachute payments"
(within the meaning of section 280G of the Code) that are required to be made
under this agreement, including all determinations of whether an Excise Tax
Restoration Payment is required, of the amount of such Excise Tax Restoration
Payment and of amounts relevant to the last sentence of this agreement, shall be
made by the independent auditors retained by the Company most recently prior to
the change in control (the "Auditors"), who shall provide their determination
(the "Determination"), together with detailed supporting calculations regarding
the amount of any Excise Tax Restoration Payment and any other relevant matters,
both to the Company and to the Employee within seven business days of the
Employee's termination date, if applicable, or such earlier time as is requested
by the Company or by the Employee (if the Employee reasonably believes that any
of the Total Payments may be subject to the Excise Tax). If the Auditors
determine that no Excise Tax is payable by the Employee, it shall furnish the
Employee with a written statement that such Auditors have concluded that no
Excise Tax is payable (including the reasons therefor) and that the Employee has
substantial authority not to report any Excise Tax on the Employee's federal
income tax return. If an Excise Tax Restoration Payment is determined to be
payable, it shall be paid to the Employee within five business days after the
Determination is delivered to the Company or the Employee. Any determination by
the Auditors shall be binding upon the Company and the Employee, absent manifest
error.
Underpayments and Overpayments. As a result of uncertainty in the
application of section 4999 of the Code at the time of the initial determination
by the Auditors hereunder, it is possible that Excise Tax Restoration Payments
not made by the Company should have been made ("Underpayments") or that Excise
Tax Restoration Payments will have been made by the Company
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which should not have been made ("Overpayments"). In either event, the Auditors
shall determine the amount of the Underpayment or Overpayment that has occurred.
In the case of an Underpayment, the amount of such Underpayment shall promptly
be paid by the Company to or for the benefit of the Employee. In the case of an
Overpayment, the Employee shall, at the direction and expense of the Company,
take such steps as are reasonably necessary (including the filing of returns and
claims for refund), follow reasonable instructions from, and procedures
established by, the Company and otherwise reasonably cooperate with the Company
to correct such Overpayment; provided, however, that (i) the Employee shall in
no event be obligated to return to the Company an amount greater than the net
after-tax portion of the Overpayment that the Employee has retained or has
recovered as a refund from the applicable taxing authorities and (ii) this
provision shall be interpreted in a manner consistent with the intent of this
agreement, which is to make the Employee whole, on an after-tax basis, for the
application of the Excise Tax, it being understood that the correction of an
Overpayment may result in the Employee's repaying to the Company an amount which
is less than the Overpayment.
This agreement amends and supersedes provisions concerning
parachute payments under section 280G of the Code and excise taxes under section
4999 of the Code in any other employment agreements or other agreements between
the Employee and the Company.
14. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.
(b) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by an authorized officer of the Company (other
than the Employee). No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
(c) Whole Agreement; Modifications. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof. A modification of this Agreement shall be valid only if it is made in
writing and executed by both parties hereto. This Agreement shall be subject to
the requirements of any applicable banking law, regulation or order. This
Agreement shall supersede the employment agreement dated January 1, 1996 between
the Employee and the Bank.
(d) Withholding Taxes. All payments and imputed payments made under
this Agreement shall be subject to reduction to reflect taxes required to be
withheld by law.
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(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware (other than their choice-of-law provisions).
(f) Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
(g) Arbitration. Except as otherwise provided in Section 11, any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, shall be settled by arbitration in San Francisco, California, in
accordance with the rules of the American Arbitration Association then in
effect. Discovery shall be permitted to the same extent as in a proceeding under
the Federal Rules of Civil Procedure, including (without limitation) such
discovery as is specially authorized by Section 1283.05 of the California Code
of Civil Procedure, without need of prior leave of the arbitrator under Section
1283.05(c) of the Code. Judgment may be entered on the arbitrator's award in any
court having jurisdiction . All fees and expenses of the arbitrator of such
Association shall be determined by the arbitrator.
(h) No Assignment. The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this Subsection (h) shall be void.
(i) Effective Date. This Agreement shall become effective on the date
when there shall occur the Effective Time under the Merger Agreement. Such date
is herein referred to as the "Effective Date." If the Merger Agreement shall
terminate for any reason without the merger provided for therein having been
consummated, then this Agreement shall automatically terminate and be of no
further force or effect and the parties hereto shall have no further obligation
to one another.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the 28th day of
May, to be effective as of the Effective Date.
/s/ Don J. McGrath
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FIRST HAWAIIAN, INC.
By /s/ Walter A. Dods, Jr.
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Title Chairman and Chief Executive Officer
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