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EXHIBIT 10.23
TERMINATION PROTECTION AGREEMENT
THIS AGREEMENT is entered into as of the date specified in Section 2
below as the Effective Date, by and between BancWest Corporation, a Delaware
corporation, and ▇▇▇▇ ▇. ▇▇▇▇ (the "Executive").
Executive is a skilled and dedicated employee who has important
management responsibilities and talents, which benefit the Company. The Company
believes that its best interests will be served if Executive is encouraged to
remain with the Company. The Company has determined that Executive's ability to
perform Executive's responsibilities and utilize Executive's talents for the
benefit of the Company, and the Company's ability to retain Executive as an
employee, will be significantly enhanced if Executive is provided with fair and
reasonable protection from the risks of a change in ownership or control of the
Company. Accordingly, the Company and Executive agree as follows:
1. Defined Terms.
Unless otherwise indicated, capitalized terms used in this Agreement
which are defined in Schedule A shall have the meanings set forth in Schedule A.
2. Effective Date; Term.
This Agreement shall be effective as of the date of the consummation of
the transaction(s) contemplated by the Agreement and Plan of Merger dated as of
May 7, 2001 by and among the Company, BNP Paribas, a societe anonyme or limited
liability banking corporation organized under the laws of the Republic of France
("BNP"), and Newco 1 (the "Effective Date") and shall remain in effect until the
third anniversary thereof (the "Term"). Notwithstanding the foregoing, this
Agreement shall, if in effect on the date of a Change of Control, remain in
effect for two years following the Change of Control.
3. Change of Control Benefits.
If, during the Term of this Agreement, Executive's employment with the
Company is terminated at any time by the Company without Cause, or by Executive
for Good Reason (the effective date of either such termination hereafter
referred to as the "Termination Date"), Executive shall be entitled to the
payments and benefits provided hereafter in this Section 3 and as set forth in
this Agreement. Notice of termination without Cause or for Good Reason shall be
given in accordance with Section 14, and shall indicate the specific termination
provision hereunder relied upon, the relevant facts and circumstances and the
Termination Date.
(a) Severance Payments. Within fifteen business days after the
Termination Date, the Company shall pay Executive a cash lump
sum equal to:
(1) 200% of the sum of (A) the Executive's annual rate of
Base Salary, as in effect on the date of the employment
termination, plus (B) the arithmetic mean of the Annual
Bonuses awarded to
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the Executive by the Company for the three most recent
consecutive fiscal years ending prior to the date of the
employment termination (regardless of when paid), plus
(C) an amount equal to the arithmetic mean of the awards
paid or payable to the Executive under the Company LTIP
and/or New LTIP, as applicable, in respect of the three
most recently completed performance cycles under such
plan, provided that such amount shall in no event be
less than the Executive's award payable in year 2000
under the Company LTIP; and
(2) The sum of (A) the Executive's Target Bonus for the
fiscal year of termination multiplied by a fraction (the
"Fraction"), the numerator of which shall equal the
number of days the Executive was employed by the Company
in the fiscal year in which the termination occurs, and
the denominator of which shall equal 365, plus (B) the
target award(s) in respect of all performance periods in
existence under the Company LTIP and/or New LTIP, as
applicable, as of the date of termination, to which the
Executive may become entitled under the applicable plan,
multiplied by the Fraction.
(b) Equity Incentive Compensation. Upon termination, all unvested
stock options, stock appreciation (phantom stock) rights
("SARs") (if any) and any restricted stock awards shall become
fully vested, and all options and SARs shall remain outstanding
and exercisable for the balance of the term of such awards.
(c) Insurance Coverage. During the 24-month period commencing upon a
termination of employment described in this Section 3 above
(such period, the "Severance Period"), the Executive (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 Executive's salary for purposes of such plans
shall be deemed to be equal to his Base Salary as of the date of
termination of the Executive's employment. To the extent that
the Company finds it impossible to cover the Executive under its
group insurance policies during the Severance Period, the
Company shall provide the Executive 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 Executive becomes
eligible for comparable group insurance coverage in connection
with new employment, the coverage provided by the Company under
this subsection (c) shall become secondary. Any group health
continuation coverage that the Company is required to offer
under the Consolidated Omnibus Budget Reconciliation Act of 1986
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("COBRA") shall commence when coverage under this subsection (c)
terminates.
(d) Payment of Earned But Unpaid Amounts. Within fifteen business
days after the Termination Date, the Company shall pay Executive
the Base Salary through the Termination Date, any Bonus earned
but unpaid as of the Termination Date for any previously
completed fiscal year of the Company, all compensation
previously deferred by Executive but not yet paid and
reimbursement for any unreimbursed expenses properly incurred by
Executive in accordance with Company policies prior to the
Termination Date. Executive shall also receive such employee
benefits, if any, to which Executive may be entitled from time
to time under the Executive benefit or fringe benefit plans,
policies or programs of the Company, other than any Company
severance policy (payments and benefits in this subsection (d),
the "Accrued Benefits").
(e) Additional Benefit Plan Service and Age. For purposes of
eligibility for retirement, for early commencement or actuarial
subsidies under any Company (or and subsidiary thereof) pension,
medical reimbursement or life insurance plan (or any such
alternative contractual arrangement that the Executive may have
with the Company (or and subsidiary thereof), Executive will be
credited with an additional two years of service and age beyond
that accrued as of the Termination Date; provided that if any
benefits afforded by this Agreement, including the benefits
arising from the grant of additional service and age, cannot be
provided under the qualified pension plan of the Company due to
the qualification provisions of the Code, the benefit, or its
equivalent in value, shall be provided under a nonqualified
pension plan of the Company.
4. Mitigation.
Executive shall not be required to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other employment or
otherwise, and, subject to Section 3(c), compensation earned from such
employment or otherwise shall not reduce the amounts otherwise payable under
this Agreement. No amounts payable under this Agreement shall be subject to
reduction or offset in respect of any claims, which the Company (or any other
person or entity) may have against Executive.
5. Tax Effect of Payments.
(a) Excise Tax Restoration Payment. In the event that it is
determined that any payment, benefit provided or
distribution of any type (including, without limitation,
the value of the acceleration of vesting of, or payment
in respect of, any options or other equity or
equity-based awards, and the payment of any amounts
under the Company LTIP (or any other similar plan,
program or arrangement), by the Company, by
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any of its affiliates, by any one or more trusts
established by the Company (or any of its affiliates)
for the benefit of its employees, 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, to or for the benefit of the Executive,
whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement, an employment
agreement or otherwise (the "Total Payments"), would be
subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise
tax, together with any such interest or penalties, are
collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional
payment (an "Excise Tax Restoration Payment") in an
amount that shall fund the payment by the Executive 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.
(b) 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 subsection (c), shall be made by the
independent auditors retained by the Company most
recently prior to the relevant change in control and
subject to the Executive's reasonable approval (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 Executive within seven
business days of the Executive's termination date, if
applicable, or such earlier time as is requested by the
Company or by the Executive (if the Executive 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 Executive, it shall furnish
the Executive with a written statement that such
Auditors have concluded that no Excise Tax is payable
(including the reasons therefor) and that the Executive
has substantial authority not to report any Excise Tax
on the Executive's federal income tax return. If an
Excise Tax Restoration Payment is determined to be
payable, it shall be paid to the Executive within five
business days after the Determination is delivered to
the Company or the Executive. Any determination by the
Auditors shall be binding upon the Company and the
Executive, absent manifest error.
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(c) 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 may not be made by the Company that
should be made ("Underpayments") or that Excise Tax
Restoration Payments will have been made by the Company
which should not have been made ("Overpayments"). In
either event, the Auditors shall determine the amount of
the Underpayment or Overpayment that has occurred as
soon as possible. 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 Executive. In
the case of an Overpayment, the Executive 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 Executive 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 Executive
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 Executive
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 Executive's repaying to
the Company an amount which is less than the
Overpayment.
6. Termination for Cause.
Nothing in this Agreement shall be construed to prevent the Company from
terminating Executive's employment for Cause. If Executive is terminated for
Cause, the Company shall have no obligation to make any payments under this
Agreement, except for the Accrued Benefits.
7. Non-Competition
(a) Covenant Not To Compete. This Section 7 shall apply:
(i) During the Term; and
(ii) During the two-year period following the
termination of the Executive's employment by the
Company without Cause (other than for
Disability) or by the Executive's resignation
for Good Reason.
While this Section 7 applies, the Executive shall not,
directly or indirectly, engage in any banking business
or activity in the States of
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California, Hawaii, Nevada, New Mexico, 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 Executive owns less than
five 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, trade secrets, and other
confidential information concerning the Company,
acquired by the Executive.
(d) Specific Performance. The Executive 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 Executive 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 Executive 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 Executive breaches any of such
covenants. Accordingly, if the Executive 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
Executive. 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.
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(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.
8. No Solicitation; Non-Disclosure of Confidential Information.
(a) This Section 8 shall apply (i) during the Term and (ii)
during the one-year period following the termination of
the Executive's employment by the Company for Cause or
by the Executive's voluntary resignation without Good
Reason. While this Section 8 applies, the Executive
shall not, directly or indirectly, contact any employee
of the Company or any of its subsidiaries to solicit
such employee to become an employee, partner or
independent contractor of the Executive or any other
person.
(b) During the Term of this Agreement and thereafter, the
Executive 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 Executive) 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; provided,
further, that the Executive may disclose the existence
and contents of this Agreement to his family, legal
advisors, accountant and other financial advisors. The
Executive agrees to deliver to the Company at the
termination of his employment to the extent reasonably
requested by the Company, or at any other time the
Company may reasonably 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 except for personal notes of the Executive
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9. Indemnification; Director's and Officer's Liability Insurance.
The Company shall indemnify the Executive to the fullest extent
permitted by applicable law against damages in connection with his status or
performance of duties as an officer or director of the Company or any of its
affiliates and shall maintain and cover the Executive under customary and
appropriate directors and officers liability insurance during the Term and
throughout the period of any applicable statute of limitations with respect to
any acts, omissions or other matters that may have occurred or arisen during the
Term.
10. Arbitration.
Except as otherwise provided in Section 7, any controversy or claim
arising out of or relating to this Agreement or the breach thereof, shall be
settled by arbitration in Honolulu, Hawaii, 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.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. All fees and expenses of the arbitrator and of the Executive's
legal counsel shall be paid (or promptly reimbursed to the Executive) by the
Company.
11. 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 Section 11 shall be void.
12. Withholding.
Notwithstanding any other provision of this Agreement, the Company may,
to the extent required by law, withhold applicable federal, state and local
income and other taxes from any payments due to Executive hereunder.
13. Applicable Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to conflicts of laws principles
thereof.
14. 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 Executive, 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
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15. Entire Agreement; Modification.
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.
16. Counterparts.
This Agreement may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
[Signatures on next page.]
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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 7th day of May
2001, to be effective as of the Effective Date.
BANCWEST CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
--------------------------------------
Title: Chairman & Chief Executive Officer
EXECUTIVE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
▇▇▇▇ ▇.▇▇▇▇
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SCHEDULE A
CERTAIN DEFINITIONS
As used in this Agreement, and unless the context requires a
different meaning, the following terms, when capitalized, have the meaning
indicated:
I. "Act" means the Securities Exchange Act of 1934, as amended.
II. "Annual Bonus" means the amount payable to Executive under the
Company's applicable annual bonus plan with respect to a fiscal year of the
Company.
III. "Bank" means First Hawaiian Bank.
IV. "Base Salary" means Executive's annual rate of base salary in
effect on the date in question.
V. "Cause" means either of the following:
(1) A material failure by the Executive to perform substantially all
of his duties, other than a failure resulting from the
Executive's complete or partial incapacity due to physical or
mental illness or impairment, hereunder;
(2) Gross misconduct, material fraud or material dishonesty to the
Company or its employees in the performance of the Executive's
duties to the Company;
(3) Conviction of, or plea of "guilty" or "no contest" to, a felony
under the laws of the United States or any state thereof; or
(4) A material violation by the Executive in the course of his
duties hereunder of any law or regulation to which the Company
is subject provided that the Executive 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
Executive's ability to perform his duties hereunder or his value
to the Company as its officer; and provided, further, that the
Executive shall be fully protected by, and entitled to rely
upon, advice of counsel to the Company for purposes of
determining whether the Executive knew or should have known that
the conduct in question was in violation of such law or
regulation.
For purposes of this Agreement, no act or failure to act on the
Executive's part shall constitute "Cause" if done, or omitted,
by him in good faith and in the reasonable belief that his
action or omission was in, or not opposed to, the best interest
of the Company. Termination of the Executive for Cause shall be
made by delivery from the chief executive officer of the Company
(the "CEO") to the Executive of written notice, at least 30
days' prior to the effective date of such
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termination, specifying the basis, in the reasonable judgment of
the CEO, for such termination and the particulars thereof;
provided that with respect to clauses (1), (2) and (4) the
Executive shall have a reasonable opportunity to cure or
otherwise resolve the behavior in question prior to the
effective date of such termination, in which case Cause shall
not exist.
VI. "Change of Control" means the first to occur of any of the
following:
(1) BNP (and any of its wholly owned subsidiaries) do not
have, by themselves, the ability to elect a majority of
the Board,
(2) any Person (other than BNP, the Company, any trustee or
other fiduciary holding securities under an employee
benefit plan of BNP, the Company, or any company owned,
directly or indirectly, by the shareholders of BNP or
the Company in substantially the same proportions as
their ownership of stock of BNP or the Company), becomes
the beneficial owner, directly or indirectly, of
securities of BNP or the Company, representing 25% or
more of the combined voting power of BNP's or the
Company's then-outstanding securities, or
(3) the consummation of any merger, consolidation, plan of
arrangement, reorganization or similar transaction or
series of transactions in which BNP or the Company is
involved, other than such a transaction or series of
transactions which would result in the shareholders of
BNP or the Company immediately prior thereto continuing
to own (either by remaining outstanding or by being
converted into voting securities of the surviving
entity) more than 50% of the combined voting power of
the securities of BNP or the Company (or such surviving
entity (or the parent, if any)) outstanding immediately
after such transaction(s) in substantially the same
proportions as their ownership immediately prior to such
transaction(s).
For purposes of the Agreement, a Change in Control shall
not be deemed to have occurred upon the Effective Date
by reason of the transactions contemplated by the
Agreement and Plan of Merger among BNP, the Company and
Newco 1 dated as of May 7, 2001 or by reason of any
changes to the Board approved by BNP or its affiliates.
VII. "Code" means the Internal Revenue Code of 1986, as amended.
VIII. "Company" means BancWest Corporation and, after a Change of
Control, any successor or successors thereto.
IX. "Company LTIP" means the Company's long-term incentive plan as
in effect as of the date hereof.
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X. "Good Reason" means that, on or after a Change of Control,
without Executive's express prior written approval, other than due to
Executive's Permanent Disability or death, the Executive:
(1) Has incurred a reduction in his position, title, authority or
responsibility at the Company, the Bank and/or the Bank of the
West or an adverse change to his reporting relationships, or has
not been re-elected to any or all of the Boards of Directors of
the Company or the Bank, and/or Bank of the West;
(2) Has incurred a reduction in his Base Salary or Target Bonus or a
reduction in employee benefits (including perquisites, target
long-term incentive compensation, retirement plan and deferred
compensation plan benefits);
(3) Has been notified that his principal place of work will be
relocated to a location outside the City of Honolulu, Hawaii; or
(4) Is required to work more than 80 days per year outside of the
Company's principal offices in the City of Honolulu, Hawaii.
The Executive may also terminate his employment for "Good Reason" (x) if the
Company breaches any material provision of this Agreement or (y) for any reason
or no reason during the 30-day period following the first anniversary of any
Change in Control that occurs after the Effective Date. Except as provided in
(5) above, Executive shall have six months from the time Executive first becomes
aware of the existence of Good Reason to resign for Good Reason. For purposes of
this Agreement, any good faith determination of "Good Reason" made by the
Executive shall be conclusive; provided, however, that termination by the
Executive for Good Reason shall be made by delivery to the Board of written
notice, at least 30 days' prior to the effective date of such termination,
specifying the basis for such termination and the particulars thereof and
provided that the Company shall have a reasonable opportunity to cure or
otherwise resolve the problem in question prior to the effective date of such
termination, in which case Good Reason shall not exist.
XI. "New LTIP" means any long-term incentive plan established by the
Company (or any parent or affiliate thereof) after the Effective Date, in which
the Executive participates as of the date in question.
XII. "Permanent Disability" means a physical or mental incapacity
that qualifies the Executive for payments under the Company's or the Bank of the
West's group long-term disability insurance policy or plan.
XIII. "Target Bonus" means the target Bonus established for Executive
under the Company's annual incentive compensation plan, whether expressed as a
percentage of Base Salary or a dollar amount.