EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into by and between CALIFORNIA FEDERAL
BANK, A Federal Savings Bank (the "Company"), having a business address at 135
Main Street, San Francisco, California, 94105, and GERALD J. FORD (the
"Executive"), having a mailing address at 200 Crescent Court, Suite 1350,
Dallas, Texas 75201.
R E C I T A L S
The Board of Directors of the Company has determined that it is in the best
interests of the Company to retain the Executive's services and to reinforce and
encourage the continued attention and dedication of members of the Company's
management, including the Executive, to their assigned duties without
distraction in potentially disturbing circumstances arising from the possibility
of a change of control of the Company.
The Company wishes to assure itself of the services of the Executive for
the period provided in this Agreement and the Executive wishes to serve in the
employ of the Company on the terms and conditions hereinafter provided.
This Agreement supersedes and replaces (i) the employment agreement by and
between the Executive and the Company dated as of October 1, 1994, as
subsequently amended as of January 1, 1998 and (ii) the consulting agreement by
and between the Executive and First Nationwide Management Corp. (and their
respective assignees and successors) dated as of October 1, 1994 as subsequently
amended as of January 1, 1995, and December 17, 1997; such agreements shall be
terminated upon the later of the effective date of this Agreement or execution
of this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive hereby agree as follows:
1. Employment. Upon the terms and subject to the conditions contained in
this Agreement, the Executive agrees to provide full-time services for the
Company during the term of this Agreement. The Executive agrees to devote his
best efforts to the business of the Company, and shall perform his duties in a
diligent, trustworthy, and business-like manner, all for the purpose of
advancing the business of the Company. However, the Executive may act as an
executor, a trustee, an officer and/or director of entities with whom the
Executive has had a continuing relationship (including Liberte' Investors) so
long as such activities do not interfere in any material way with the
Executive's duties hereunder.
2. Duties; Location. The duties of the Executive shall be those duties
which can reasonably be expected to be performed by a person with the title of
Chief Executive Officer and, subject to the approval of the Board of Directors
of the Company, as Chairman of the Board of the Company. The Executive shall
report directly to the Board of Directors of the Company. The Executive's duties
may, from time to time, be changed or modified at the discretion of the Board of
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Directors of the Company. The duties to be performed under this Agreement shall
be performed primarily at the offices of the Company in Dallas, Texas, subject
to reasonable travel requirements on behalf of the Company.
3. Employment Terms. Subject to the terms and conditions hereof, the
Company agrees to employ the Executive for a term commencing as of January 1,
2000 (the "Effective Date") and continuing through December 31, 2002, unless
renewed under this Section 3.
Beginning with January 1, 2002, this Agreement shall be automatically
renewed each January 1 for one-year terms, unless either the Company or the
Executive provides written notice of election not to renew, at least 45 days
before the applicable January 1.
4. Salary and Benefits.
(a) Base Salary. The Company shall, during the term of this Agreement,
pay the Executive an annual base salary of $1,000,000 beginning on the
Effective Date, pro rated for periods of fewer than 12 months. Such salary
shall be paid in semi-monthly installments less applicable withholding and
salary deductions. Base salary shall be reviewed at least annually and may
be increased by the Company. The Company may not, however, reduce the
Executive's base salary at any time during the term of this Agreement.
(b) Executive Compensation Plans. The Executive shall be eligible to
participate in any executive compensation plan in which any other senior
executive of the Company participates; such executive compensation plans
shall include (without limitation) the following types of compensation,
incentives, and benefits: stock options, restricted stock, annual bonuses,
long term incentive compensation, and stock purchase.
(c) Non-Qualified Retirement Plans. The Executive shall be entitled to
participate in any non-qualified retirement plan that is generally provided
to senior executive officers of the Company.
(d) Fringe Benefits. The Executive shall be entitled to all benefits
for which the Executive is eligible under any qualified retirement plan,
group insurance, other welfare benefits, and all "fringe" benefits which
the Company provides to its employees generally or to senior executives of
the Company (including executive medical benefits for the Executive and his
dependents).
(e) Medical Examination. The Executive shall be reimbursed by the
Company for the reasonable cost of one annual medical examination upon
presentation of an expense statement.
(f) Paid Time Off. The Executive shall be entitled to paid time off
("PTO") during each full year of his employment hereunder in accordance
with the applicable policies adopted by the Company. In no event shall
Executive be entitled to fewer
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than five weeks PTO during any calendar year. Such PTO shall be taken at
such times as are consistent with the reasonable business needs of the
Company.
(g) Automobile. The Company will provide the Executive with an
automobile (the "Automobile") for use by the Executive in connection with
the performance of his duties under this Agreement and the Company shall
provide garaging near the Executive's office. The Automobile shall be a
late model top-of-the-line luxury automobile to be reasonable selected by
the Executive. The Executive may also use the Automobile for reasonable
personal use. The Executive agrees to pay all operating costs of the
Automobile and the Company agrees to reimburse to the Executive to cover
operating costs of the Automobile (including insurance, maintenance, toll
charges, and rental of garage space), upon the submission by the Executive
to the Company of receipts evidencing such operating costs. Except as
otherwise provided in Section 5 below, the Executive agrees to return the
Automobile to the Company at the termination of this Agreement or the
Executive may purchase the Automobile from the Company as its then
wholesale value. The Company shall also provide the Executive with
comparable automobiles in San Francisco and southern California on the same
terms.
(h) Clubs. The Company will reimburse the Executive, upon presentation
of proper expense statements, for all reasonable initiation fees and
periodic dues for memberships in golf, country, and social clubs of the
Executive's choice.
(i) Life Insurance. The Company shall purchase a split dollar whole
life insurance policy on the life of the Executive with an initial face
amount of $3,000,000 (the "Policy"). The Policy shall be adjusted every two
years on January 1 (with the first adjustment on January 1, 2001) based
upon increases in the Executive's base salary, and such adjusted face
amount shall be equal to (i) the Executive's base salary, multiplied by
(ii) three. The Policy shall be owned by a trust for the benefit of the
heirs of the Executive (the "Trust"). The trustee of the Trust shall have
the right to designate one or more beneficiaries, and to change such
designation at any time and from time to time, in accordance with the terms
of the Trust and the Policy. The Company shall pay all premiums on the
Policy. The Trust and the Company shall have the rights and obligations set
forth in the separate split dollar life insurance agreement previously
executed with respect to the Policy, as the same may be amended from time
to time. Such insurance coverage shall be in addition to, and not in lieu
of, any other insurance normally provided by the Company to officers of the
Company. In the event the Executive's employment shall terminate (A) at any
time during the term of this Agreement for any reason other than (i) death,
(ii) termination for Cause, or (iii) voluntary termination by the Executive
without Good Reason, or (B) at the end of the term of this Agreement, the
split dollar life insurance agreement referred to herein shall terminate
and the Company shall release all of its rights with respect to the Policy,
including its right to be repaid any amount, its rights to any accumulated
cash surrender value in the Policy, and its collateral assignment of the
Policy, and the Trust shall own the Policy and the Company shall have no
further interest or rights in the Policy.
(j) Reimbursement of Expenses. The Company shall reimburse the
Executive for all reasonable out-of-pocket expenses incurred by the
Executive in the course of his
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duties, in accordance with normal policies. The Company acknowledges that
the Executive shall be permitted to travel first class when traveling on
behalf of the Company.
(k) Employee Benefits. The Executive shall be entitled to participate
in the employee benefit programs generally available to employees of the
Company, and to all normal perquisites provided to senior executive
officers of the Company. Upon termination of this Agreement by normal
expiration of its term as specified in Section 3 hereof, medical and dental
benefits provided to the Executive prior to termination shall continue to
be provided to the Executive for a period of three (3) years.
(l) San Francisco and New York Apartments. The Company shall provide
the Executive with access to, and use of, an apartment in San Francisco,
California and in New York City, New York, at the Company's expense, for
use by the Executive when he is in such cities to perform his duties under
this Agreement.
(m) Office. The Company shall maintain (including the payment of rent,
repairs, utilities, furnishings, improvements, insurance, and all other
reasonable ancillary costs) its offices at 200 Crescent Court, Suite 1350,
Dallas, Texas 75201, or such other comparable offices in the Dallas, Texas
metropolitan area as are suitable to the conduct to its business.
(n) Use of Corporate Aircraft. The Company shall provide the Executive
with the use of a private corporate aircraft for his use.
(o) Benefits not in Lieu of Compensation. No benefit or perquisite
provided to the Executive shall be deemed to be in lieu of base salary,
bonus, or other compensation.
5. Termination of Employment. The Board of Directors of the Company may
terminate the employment of the Executive at any time as it deems appropriate.
Except as may otherwise be provided in Section 6 below, the following provisions
shall apply with respect to the termination of the Executive's employment.
(a) Disability. The Company may terminate the Executive's employment
for Disability if the Executive is incapacitated and absent from his duties
hereunder on a full-time basis for six consecutive months or for at least
180 days during any 12 month period. If, during the term of this Agreement,
the Executive's employment terminates due to Disability, the Executive
shall be entitled to (i) receive continued payments in an amount equal to
60% of the Executive's base salary at the time of such termination, in
accordance with Section 4 (a) above during the remaining term of this
Agreement (as provided in Section 3 above) but for not less than two years,
and (ii) continuation of group life insurance benefits and continuation of
benefits under Section 4(i). In addition, so long as such benefits continue
to be provided to the Company's employees, the Executive shall be entitled
to continuation of benefits under the group medical plan(s) in which the
Executive is participating at the time of such termination (including
executive medical benefits) for the Executive, his spouse, and his
dependents; such medical benefits shall terminate no later than
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(x) the date on which the Executive ceases to be Disabled, or (y) the date
on which the Executive attains age 70.
(b) Voluntary Resignation or Termination for Cause. If the Executive
shall voluntarily terminate his employment for other than Good Reason or if
the Company shall discharge the Executive for Cause, this Agreement shall
terminate immediately and the Company shall have no further obligation to
make any payment under this Agreement which has not already become payable,
but has not yet been paid. Provided, however, that with respect to any
stock options, restricted stock, incentive plans, deferred compensation
arrangements, or other plans or programs in which the Executive is
participating at the time of termination of his employment, the Executive's
rights and benefits under each such plan shall be determined in accordance
with the terms, conditions, and limitations of the plan and any separate
agreement executed by the Executive which may then be in effect.
For the purposes of this Agreement, the Company shall have "Cause" to
terminate the Executive's employment hereunder upon (A) the willful and
continued failure by the Executive to perform his duties with the Company
(other than any such failure resulting from incapacity due to physical or
mental illness), after a demand for substantial performance is delivered to
the Executive by the Board which specifically identifies the manner in
which the Board believes that he has not substantially performed his
duties, or (B) the willful engaging by the Executive in gross misconduct
materially and demonstrably injurious to the Company, or (C) occurrence of
any event which would provide a basis of termination for cause under 12
C.F.R. Section 563.39(b)(1) or any successor regulation defining
termination for cause in employment agreements for employees of a savings
association. For purposes of this paragraph, no act, or failure to act, on
the Executive's part shall be considered "willful" unless done, or omitted
to be done, by him not in good faith and without reasonable belief that his
action or omission was not in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of not
less than two-thirds (2/3) of the entire authorized membership of the Board
at a meeting of the Board called and held for the purpose (after reasonable
notice and an opportunity for the Executive, together with counsel, to be
heard before the Board), finding that in the good faith opinion of the
Board he was guilty of conduct set forth above in clauses (A) or (B) of the
first sentence of this paragraph and specifying the particulars thereof in
detail.
For purposes of this Agreement, "Good Reason" shall mean:
(i) Without his express written consent, the assignment to the
Executive of any duties inconsistent with his positions, duties,
responsibilities and status with the Company, or a change in his
reporting responsibilities, titles or offices, or any removal of the
Executive from or any failure to re-elect the Executive to any of such
positions, except in connection with the termination of his employment
by the Company for Cause or as a result of the Executive's Disability,
or as a result of his death, or by the Executive other than for Good
Reason;
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(ii) A reduction by the Company in the Executive's base salary as
in effect on the date hereof or as the same may be increased from time
to time;
(iii) The Company's requiring the Executive to be based anywhere
other than Dallas, Texas, or, in the event the Executive consents to
any relocation, the failure by the Company to pay (or reimburse the
Executive) for all reasonable moving expenses incurred by him relating
to a change of his principal residence in connection with such
relocation and to indemnify the Executive against any loss (defined as
the difference between the actual sale price of such residence and the
higher of (a) his aggregate investment in such residence of (b) the
fair market value of such residence as determined by a real estate
appraiser designated by the Executive and reasonably satisfactory to
the Company) realized on the sale of the Executive's principal
residence in connection with any such change of residence;
(iv) The failure by the Company to continue in effect any benefit
or compensation plan (including but not limited to any stock option
plan, pension plan, life insurance plan, health and accident plan or
disability plan) in which the Executive is participating (or plans
providing substantially similar benefits), the taking of any action by
the Company which would adversely affect the Executive's participation
in or materially reduce his benefits under any of such plans or
deprive him of any material fringe benefit enjoyed by him, or the
failure by the Company to provide the Executive with the number of PTO
days to which he is then entitled on the basis of years of service
with the Company in accordance with the Company's normal PTO policy in
effect on the date hereof;
(v) Any failure of the Company to obtain the assumption of, or
the agreement to perform, this Agreement by any successor as
contemplated in Section 17(a) hereof; or
(vi) Any purported termination of the Executive's employment
which is not effected pursuant to a notice of termination satisfying
the requirements of Section 5(b) above (and, if applicable, Section 3
above); and for purposes of this Agreement, no such purported
termination shall be effective.
(c) Termination Without Cause; Resignation for Good Reason. The
Company shall pay the Executive and provide to the Executive (and his
dependents, where applicable), the amounts and benefits set forth in this
Section 5(c) if, during the term of this Agreement, either (x) prior to a
Change of Control, the Executive's employment is terminated by the Company
without Cause or the Executive voluntarily terminates his employment for
Good Reason, or (y) within 24 months after a Change of Control, the
Executive's employment is terminated by the Company without Cause or the
Executive voluntarily terminates his employment for any reason:
(i) The Company shall pay the Executive in one lump sum within
ten business days after termination of his employment an amount equal
to (i) the sum of
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his base salary as provided in Section 4(a) plus the Executive's Bonus
Amount (as defined below), multiplied by (ii) three (3). The
Executive's "Bonus Amount" shall be equal to the greater of (x) the
Executive's average annual incentive bonus earned during the
performance period representing the three calendar years immediately
preceding the year in which he terminates employment, or (y) the
Executive's target annual incentive bonus for the year in which he
terminates employment.
(ii) The Company shall maintain in full force and effect for the
continued benefit of the Executive, for a three-year period after the
date of his termination of employment ("Date of Termination"), all
employee benefit plans and programs or arrangements in which the
Executive was entitled to participate immediately prior to the Date of
Termination, provided that his continued participation is possible
under the general terms and provisions of such plans and programs. In
the event that the Executive's participation in any such plan or
program is barred, the Company shall arrange to provide the Executive
with benefits substantially similar to those which he is entitled to
receive under such plans and programs. At the end of the period of
coverage, the Executive shall have the option to have assigned to him
at no cost and with no apportionment of prepaid premiums, any
assignable insurance policy owned by the Company and relating
specifically to him.
(iii) The Executive shall be entitled to the use of the
Automobile until the earliest to occur of (x) the date the Executive
is employed elsewhere, or (y) three years from the Date of
Termination; provided, however, that during such time period, the
Executive shall be solely responsible for all expenses incurred in the
use of the Automobile, including maintaining insurance of the same
types and at the same levels as previously maintained by the Company
immediately prior to such termination.
(iv) All outstanding but unvested stock options, restricted
stock, SARs, deferred compensation, and SERP payments shall, upon the
Date of Termination, be accelerated, fully vested, and exercisable for
three years after the Date of Termination; provided, however, that the
foregoing shall not be construed to cause an "Incentive Stock Option"
to fail to meet the statutory requirements of Section 422 of the
Internal Revenue Code of 1986, as amended. If any option, restricted
stock, SAR, or other benefit is governed by a plan which limits the
acceleration of vesting or extension of exercises rights, the Company
shall take all reasonable action to comply with this subsection (iv),
and, with respect to any such benefit the Company is unable to provide
in accordance with this subsection, the Company shall pay to the
Executive within thirty (30) days after the Date of Termination a lump
sum amount equal to the value of such benefits as determined by a
third party appraiser acceptable to the Executive.
(v) The Company shall provide outplacement services to the
Executive, the scope and duration of which shall be at the discretion
of the Executive.
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"Change of Control" means the occurrence of any of the following:
(A) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended) of 20% or more of either (1)the
then-outstanding shares of common stock (the "Outstanding GSB Common
Stock") of GSB or (2)the combined voting power of the then-outstanding
voting securities of GSB entitled to vote generally in the election of
directors (the "Outstanding GSB Voting Securities"); provided,
however, that for purposes of this paragraph(A) the following
acquisitions shall not constitute, or be deemed to cause, a Change of
Control Event: (i)any increase in such percentage ownership of a
Person to 20% or more resulting solely from any acquisition of shares
directly from GSB or any acquisition of shares by GSB, provided,
however, that any subsequent acquisitions of shares by such Person
that would add, in the aggregate, 2% or more (measured as of the date
of each such subsequent acquisition) to such Person's beneficial
ownership of Outstanding GSB Common Stock or Outstanding GSB Voting
Securities shall be deemed to constitute a Change of Control Event,
(ii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by GSB or any corporation controlled by GSB;
(iii) any acquisition by Ronald O.Perelman, Gerald J. Ford or an
entity controlled by either or both of them; or (iv)any acquisition by
any corporation pursuant to a transaction which complies with clauses
(1), (2) and (3) of paragraph (C) below; or
(B) Individuals who, as of the date hereof, constitute the Board
of Directors of GSB (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of GSB;
provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by GSB's
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board of Directors of GSB; or
(C) Consummation of a reorganization, merger or consolidation, or
sale or other disposition of all or substantially all of the assets of
GSB (a "Business Combination"), in each case, unless, following such
Business Combination, (1) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the then
Outstanding GSB Common Stock and Outstanding GSB Voting Securities,
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock and the combined voting power
of the then-outstanding voting securities entitled to vote generally
in the election of directors, as the case may be,
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of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns GSB or all or substantially all of GSB's assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding GSB Common Stock and
Outstanding GSB Voting Securities, as the case may be, (2) no Person
(excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of GSB or of such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business Combination
and (3) individuals who were on the Incumbent board cease to
constitute at least a majority of the members of the board of
directors of the corporation resulting from the Business Combination;
provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by GSB's
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board of Directors of GSB; or
Notwithstanding the foregoing, the occurrence of an event described in
the above paragraphs (A) through (C), inclusive, shall not be deemed
to constitute a Change of Control Event if, following the occurrence
of such event, Gerald J. Ford continues to serve as the Chairman and
Chief Executive Officer of the Company (in the case of a Business
Combination, of the surviving company in such Business Combination).
However, if a Change of Control Event does not occur solely because of
the operation of the preceding sentence, then a Change of Control
Event shall occur upon the subsequent death or permanent disability of
Gerald J. Ford.
(d) Death. If the Executive shall die before termination of his
employment hereunder, the Executive's estate shall be entitled to receive
continued payments in an amount equal to 60% of the Executive's base salary
at the time of his death in accordance with Section 4(a) above during the
remaining term of this Agreement (as provided in Section 3 above).
(e) No Mitigation of Amounts Payable Hereunder. The Executive shall
not be required to mitigate the amount of any payment provided for in this
Section 5 by seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Section 5 be reduced by any compensation
earned by the Executive as the result of employment by another employer
after the Date of Termination, or otherwise.
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(f) Limitations on Payments.
(i) Anything in this Section 5 to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution
made, or benefit provided, by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable or
provided pursuant to the terms hereof or otherwise) would constitute a
"parachute payment" as defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), then the lump sum severance
payment payable pursuant to Section 5(c)(i) shall be reduced so hat
the aggregate present value of all payments in the nature of
compensation to (or for the benefit of) the Executive which are
contingent on a change of control (as defined in Code Section
280G(b)(2)(A)) is One Dollar ($1.00) less than the amount which the
Executive could receive without being considered to have received any
parachute payment (the amount of this reduction in the lump sum
severance payment is referred to herein as "the Excess Amount"). The
determination of the amount of any reduction required by this Section
5(f)(i) shall be made by an independent accounting firm (other than
the Company's independent accounting firm) selected by the Company and
acceptable to the Executive, and such determination shall be
conclusive and binding on the parties hereto.
(ii) Notwithstanding the provisions of Section 5(f)(i), if it is
established, pursuant to a final determination of a court or an
Internal Revenue Service proceeding which has been finally and
conclusively resolved, that an Excess Amount was received by the
Executive from the Company, then such Excess Amount shall be deemed
for all purposes to be a loan to the Executive made on the date the
Executive received the Excess Amount and the Executive shall repay the
Excess Amount to the Company on demand (but no less than ten (10) days
after written demand is received by the Executive) together with
interest on the4 Excess Amount at the "applicable Federal rate" (as
defined in Section 1274(d) of the Code) from the date of the
Executive's receipt of such Excess Amount until the date of such
repayment.
6. Termination Under Banking Laws.
(a) If the Executive is suspended or temporarily prohibited from
participating in the conduct of the Company's affairs by a notice served
under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (the
"FDIA") (12 U.S.C. Section 1818 (e)(3) and (g)(1)), the Company's
obligations under this Agreement shall be suspended as of the date of
service of such notice unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Company may in its discretion (1)
pay the Executive all or part of the compensation withheld while its
obligations hereunder were suspended, and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.
(b) If the Executive is removed or permanently prohibited from
participating in the conduct of the Company's affairs by an order issued
under Section 8(e)(4) or (g)(1) of
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the FDIA (12 U.S.C. Section 1818(e)(4) or (g)(1)), all obligations of the
Company under this Agreement shall terminate as of the effective date of
the order, but vested rights of the contracting parties shall not be
affected.
(c) If the Company is in default (as defined in Section 3(x)(1) of the
FDIA), all obligations under this Agreement shall terminate as of the date
of default, but this Section 6(c) shall not affect any vested rights of the
Company or of the Executive.
(d) All obligations of the Company under this Agreement may be
terminated, except to the extent determined that continuation of this
Agreement is necessary for the continued operation of the Company (i) by
the Director of the Office of Thrift Supervision (the "Director") or his or
her designee, at the time Federal Deposit Insurance Corporation or
Resolution Trust Corporation enters into an agreement to provide assistance
to or on behalf of the Company under the authority contained in Section
13(c) of the FDIA; or (ii) by the Director or his or her designee, at the
time the Director or his or her designee approves a supervisory merger to
resolve problems related to operations of the Company or when the Company
is determined by the Director to be in an unsafe or unsound condition. Any
rights of the parties that have already vested, however, shall not be
affected by such action.
7. Confidential Information. The Executive recognizes and acknowledges that
he will have access to certain information of members of the Company Group (as
defined below) and that such information is confidential and constitutes
valuable, special and unique property of such members of the Company Group. The
Executive shall not at any time, either during or subsequent to the term of this
Agreement, disclose to others, use, copy or permit to be copied, except in
pursuance of his duties for and on behalf of the Company, it successors, assigns
or nominees, any Confidential Information of any member of the Company Group
(regardless of whether developed by the Executive) without the prior written
consent of the Company.
As used herein, "Company Group" means the Company, and any entity that
directly or indirectly controls, is controlled by, or is under common control
with, the Company, and for purposes of this definition "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
The term "Confidential Information" with respect to any person means any
secret or confidential information or know-how and shall include, but shall not
be limited to, the plans, customers, costs, prices, uses, and applications of
products and services, results of investigations, studies or experiments owned
or used by such person, and all apparatus, products, processes, compositions,
samples, formulas, computer programs, computer hardware designs, computer
firmware designs, and servicing, marketing or manufacturing methods and
techniques at any time used, developed, investigated, made or sold by such
person, before or during the term of this Agreement, that are not readily
available to the public or that are maintained as confidential by such person.
The Executive shall maintain in confidence any Confidential Information of third
parties received as a result of his employment with the Company in accordance
with the Company's obligations to such third parties and the policies
established by the Company.
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8. Delivery of Documents Upon Termination. The Executive shall deliver to
the Company or its designee at the termination of his employment all
correspondence, memoranda, notes, records, drawings, sketches, plans, customer
lists, product compositions, and other documents and all copies thereof, made,
composed or received by the Executive, solely or jointly with others, that are
in the Executive's possession, custody, or control at termination and that are
related in any manner to the past, present, or anticipated business or any
member of the Company Group. In this regard, the Executive hereby grants and
conveys to the Company all right, title and interest in and to, including
without limitation, the right to possess, print, copy, and sell or otherwise
dispose of, any reports, records, papers, summaries, photographs, drawings or
other documents, and writings, and copies, abstracts or summaries thereof, that
may be prepared by the Executive or under his direction or that may come into
his possession in any way during the term of his employment with the Company
that relate in any manner to the past, present or anticipated business of any
member of the Company Group.
9. Disclosure and Receipt of Confidential Information. The Executive shall
not, at any time during his employment, receive from persons not employed by the
Company, any Confidential Information, as described above, not belonging to the
Company, unless a valid agreement is authorized by the Company and is signed by
both the Company and by the disclosing party. The Executive shall not use or
disclose to other employees of the Company, during his employment with the
Company, Confidential Information belonging to his former employers, former
business associates, or any other third parties unless written permission has
been given by such third parties to the Company and accepted by the Company to
allow the Company to use and/or disclose such information. The Executive shall
defend and indemnify the Company Group for any breach of the covenant contained
in the preceding sentence.
10. Intellectual Property. The Executive shall hold in trust for the
benefit of the Company, and shall disclose promptly and fully to the Company in
writing, and hereby assigns, and binds his heirs, executors, and administrators
to assign, to the Company any and all inventions, discoveries, ideas, concepts,
improvements, copyrightable works, and other developments (the "Developments")
conceived, made, discovered or developed by him, solely or jointly with others,
during the term of his employment by the Company, whether during or outside of
usual working hours and whether on the Company's premises or not, that relate in
any manner to the past, present or anticipated business of any member of the
Company Group. All works of authorship created by the Executive, solely or
jointly with others, shall be considered works made for hire under the Copyright
Act of 1976, as amended, and shall be owned entirely by the Company. Any and all
such Developments shall be the sole and exclusive property of the Company,
whether patentable, copyrightable, or neither, and the Executive shall assist
and fully cooperate in every way, at the Company's expense, in securing,
maintaining, and enforcing, for the benefit of the Company or its designee,
patents, copyrights or other types of proprietary or intellectual property
protection for such Developments in any and all countries. Within one year
following the end of the term of this Agreement and without limiting the
generality of the foregoing, any Development of the Executive relating to any
subject matter on which the Executive worked or was informed during his
employment by the Company shall be conclusively presumed to have been conceived
and made prior to the termination of his employment (unless the Executive
clearly proves that such Development
12
was conceived and made following the termination of his employment), and shall
accordingly belong and be assigned to the Company and shall be subject to this
Agreement.
11. Further Acts. At the request of the Company (but without additional
compensation from the Company during his employment by the Company) the
Executive shall execute any and all papers and perform all lawful acts that the
Company may deem necessary or appropriate to further evidence or carry out the
transactions contemplated in this Agreement including, without limitation, such
acts as may be necessary for the preparation, filing, prosecution, and
maintenance of applications for United States letters patent and foreign letters
patent, or for United States and foreign copyright, on the Developments.
12. No Competition. Throughout the term of this Agreement, the Executive
shall not directly or indirectly engage in the business of banking, or any other
business in which the Company directly or indirectly engages during the term of
this Agreement; provided, however, that the restriction in this Section 12 shall
apply only to the reasonable and limited geographic area consisting of any state
in which the Company directly or indirectly has offices, operations, or
customers, or otherwise conducts business. For purposes of this Section 12, the
Executive shall be deemed to engage in a business if he directly or indirectly,
engages or invests in, owns, manages, operates, controls or participates in the
ownership, management, operation or control of, is employed by, associated or in
any manner connected with, or renders services or advice to, any business
engaged in banking; provided, however, that the Executive may invest in the
securities of any enterprise (but without otherwise participating in the
activities of such enterprise) if (x) such securities are listed on any national
or regional securities exchange or have been registered under Section 12(g) of
the Securities Exchange Act of 1934 and (y) the Executive does not beneficially
own (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of
1934) in excess of 5% of the outstanding capital stock of such enterprise.
The Executive agrees that if a court of competent jurisdiction determines
that the length of time or any other restriction, or portion thereof, set forth
in this Section 12 is overly restrictive and unenforceable, the court may reduce
or modify such restrictions to those which it deems reasonable and enforceable
under the circumstances, and as so reduced or modified, the parties hereto agree
that the restrictions of this Section 12 shall remain in full force and effect.
The Executive further agrees that if a court of competent jurisdiction
determines that any provision of this Section 12 is invalid or against public
policy, the remaining provisions of this Section 12 and the remainder of this
Agreement shall not be affected thereby, and shall remain in full force and
effect.
The Executive acknowledges that the business of the Company is national in
scope and that the restrictions imposed by this Agreement are legitimate,
reasonable and necessary to protect the Company's investment in its businesses
and the goodwill thereof. The Executive acknowledges that the scope and duration
of the restrictions contained herein are reasonable in light of the time that
the Executive has been engaged in the business of the Company, the Executive's
reputation in the markets for the Company's businesses and the Executive's
relationship with the suppliers, customers and clients of the Company. The
Executive further acknowledges that the restrictions contained herein are not
burdensome to the Executive in light of the consideration paid therefor and the
other
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opportunities that remain open to the Executive. Moreover, the Executive
acknowledges that he has other means available to him for the pursuit of his
livelihood.
13. No Tampering. Throughout the term of this Agreement and through the
second anniversary of the expiration thereof, the Executive shall not (a)
request, induce or attempt to influence any distributor or supplier of goods or
services to any member of the Company Group to curtail or cancel any business
they may transact with any member of the Company Group; (b) request, induce or
attempt to influence any customers of any member of the Company Group that have
done business with or potential customers which have been in contact with any
member of the Company Group to curtail or cancel any business they may transact
with any member of the Company Group; or (c) request, induce or attempt to
influence any employee of any member of the Company Group to terminate his or
her employment with such member of the Company Group.
14. Publicity and Advertising. The Executive agrees that the Company may
use his name, picture, or likeness for any advertising, publicity, or other
business purpose at any time, during the term of this Agreement by the Company
and may continue to use materials generated during the term of this Agreement
for a period of six months thereafter. Such use of the Executive's name,
picture, or likeness shall not be deemed to result in any invasion of the
Executive's privacy or in a violation of any property right the Executive may
have; and the Executive shall receive no additional consideration if his name,
picture or likeness is so used. The Executive further agrees that any negatives,
prints or other material for printing or reproduction purposes prepared in
connection with the use of his name, picture or likeness by the Company shall be
and are the sole property of the Company.
15. Remedies. The Executive acknowledges that a remedy at law for any
breach or attempted breach of the Executive's obligations under Sections 7
through 14 may be inadequate, agrees that the Company may be entitled to
specific performance and injunctive and other equitable remedies in case of any
such breach or attempted breach, and further agrees to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
injunctive or other equitable relief. The Company shall have the right to offset
against amounts to be paid to the Executive pursuant to the terms hereof any
amounts from time to time owing by the Executive to the Company. The termination
of this Agreement pursuant to Section 3, 5(a) or 5(b) shall not be deemed to be
a waiver by the Company of any breach by the Executive of this Agreement or any
other obligation owed the Company, and notwithstanding such a termination the
Executive shall be liable for all damages attributable to such a breach.
16. Dispute Resolution. Subject to the Company's right to seek injunctive
relief in court as provided in Section 15 of this Agreement, any dispute,
controversy or claim arising out of or in relation to or in connection with this
Agreement, including without limitation any dispute as to the construction,
validity, interpretation, enforceability or breach of this Agreement, shall be
exclusively and finally settled by arbitration, and any party may submit such
dispute, controversy or claim, including for indemnification under this Section
16, to arbitration.
(a) Arbitrators. The arbitration shall be heard and determined by one
arbitrator, who shall be impartial and who shall be selected by mutual
agreement of the parties;
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provided, however, that if the dispute involves more than $2,000,000, then
the arbitration shall be heard and determined by three (3) arbitrators. If
three (3) arbitrators are necessary as provided above, then (i) each side
shall appoint an arbitrator of its choice within thirty (30) days of the
submission of a notice of arbitration and (ii) the party-appointed
arbitrators shall in turn appoint a presiding arbitrator of the tribunal
within thirty (30) days following the appointment of the last
party-appointed arbitrator. If (x) the parties cannot agree on the sole
arbitrator, (y) one party refuses to appoint its party-appointed arbitrator
within said thirty (30) day period or (z) the party-appointed arbitrators
cannot reach agreement on a presiding arbitrator of the tribunal, then the
appointing authority for the implementation of such procedure shall be the
Senior United States District Judge for the Northern District of Texas, who
shall appoint an independent arbitrator who does not have any financial
interest in the dispute, controversy or claim. If the Senior United States
District Judge for the Northern District of Texas refuses or fails to act
as the appointing authority within ninety (90) days after being requested
to do so, then the appointing authority shall be the Chief Executive
Officer of the American Arbitration Association, who shall appoint an
independent arbitrator who does not have any financial interest in the
dispute, controversy or claim. All decisions and awards by the arbitration
tribunal shall be made by majority vote.
(b) Proceedings. Unless otherwise expressly agreed in writing by the
parties to the arbitration proceedings:
(i) The arbitration proceedings shall be held in Dallas, Texas,
at a site chosen by mutual agreement of the parties, or if the parties
cannot reach agreement on a location within thirty (30) days of the
appointment of the last arbitrator, then at a site chosen by the
arbitrator(s);
(ii) The arbitrator(s) shall be and remain at all times wholly
independent and impartial;
(iii) The arbitration proceedings shall be conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as amended from time to time;
(iv) Any procedural issues not determined under the arbitral
rules selected pursuant to item (iii) above shall be determined by the
law of the place of arbitration, other than those laws which would
refer the matter to another jurisdiction;
(v) The costs of the arbitration proceedings (including
attorneys' fees and costs) shall be borne in the manner determined by
the arbitrator(s);
(vi) The decision of the arbitrator(s) shall be reduced to
writing; final and binding without the right of appeal; the sole and
exclusive remedy regarding any claims, counterclaims, issues or
accounting presented to the arbitrator(s); made and promptly paid in
United States dollars free of any deduction or offset; and any costs
15
or fees incident to enforcing the award shall, to the maximum extent
permitted by law, be charged against the party resisting such
enforcement;
(vii) The award shall include interest from the date of any
breach or violation of this Agreement, as determined by the arbitral
award, and from the date of the award until paid in full, at 6% per
annum; and
(viii) Judgment upon the award may be entered in any court having
jurisdiction over the person or the assets of the party owing the
judgment or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may
be.
(c) Acknowledgment Of Parties. Each party acknowledges that he or she
or it has voluntarily and knowingly entered into an agreement to
arbitration under this Section by executing this Agreement.
17. Miscellaneous Provisions.
(a) Successors of the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if
no such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to compensation
from the Company in the same amount and on the same terms as the Executive
would be entitled hereunder if the Executive terminated his employment for
Good Reason, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the
Date of Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for
in this Section 17 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) Executive's Heirs, etc. The Executive may not assign his rights or
delegate his duties or obligations hereunder without the written consent of
the Company. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would still be
payable to him hereunder as if he had continued to live, all such amounts,
unless other provided herein, shall be paid in accordance with the terms of
this Agreement to his designee or, if there be no such designee, to his
estate.
(c) Notice. For the purposes of this Agreement, notices and all other
communications provide for in this Agreement shall be in writing and shall
be deemed to
16
have been duly given when delivered or mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the Chief Operating Officer of the Company with a copy to the Secretary
of the Company, or to such other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.
(d) Amendment; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the Executive and such officer
as may be specifically designated by the Board of Directors of the Company.
No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not set forth expressly in this Agreement.
(e) Invalid Provisions. Should any portion of this Agreement be
adjudged or held to be invalid, unenforceable or void, such holding shall
not have the effect of invalidating or voiding the remainder of this
Agreement and the parties hereby agree that the portion so held invalid,
unenforceable or void shall, if possible, be deemed amended or reduced in
scope, or otherwise be stricken from this Agreement to the extent required
for the purposes of validity and enforcement thereof.
(f) Survival of the Executive's Obligations. The Executive's
obligations under this Agreement shall survive regardless of whether the
Executive's employment by the Company is terminated, voluntarily or
involuntarily, by the Company or the Executive, with or without Cause.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
(h) Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Texas.
(i) Captions and Gender. The use of captions and Section headings
herein is for purposes of convenience only and shall not affect the
interpretation or substance of any provisions contained herein. Similarly,
the use of the masculine gender with respect to
17
pronouns in this Agreement is for purposes of convenience and includes
either sex who may be a signatory.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
22nd day of November, 1999.
CALIFORNIA FEDERAL BANK, A FEDERAL SAVINGS BANK
By: /s/ Carl B. Webb
--------------------------------------------
Name: Carl B. Webb
Title: President and Chief Operating Officer
GERALD J. FORD
/s/ Gerald J. Ford
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