EXHIBIT 10.26
EXECUTIVE SALARY CONTINUATION AGREEMENT
This Agreement is made and entered into effective as of the twenty-first
(21st) day of March, 1996, by and between Mid-Peninsula Bank, a bank chartered
under the laws of the State of California (the "Employer"), and Xxxxxxx X.
Xxxxxxx, an individual residing in the State of California (hereinafter referred
to as the "Executive").
RECITALS
WHEREAS, serving as its Senior Vice President;
WHEREAS, of the Employer and the banking industry are extensive
and valuable;
WHEREAS, it is deemed to be in the best interests of the
Employer to provide the Executive with certain salary continuation benefits, on
the terms and conditions set forth herein, in order to reasonably induce the
Executive to remain in the Employer's employment; and
WHEREAS, the Executive and the Employer wish to specify in
writing the terms and conditions upon which this additional compensatory
incentive will be provided to the Executive, or to the Executive's spouse or the
Executive's designated beneficiaries, as the case may be;
NOW, THEREFORE, in consideration of the services to be performed
in the future, as well as the mutual promises and covenants contained herein,
the Executive and the Employer agree as follows:
AGREEMENT
1. TERMS AND DEFINITIONS.
1.1. ADMINISTRATOR. The Employer shall be the
"Administrator" and, solely for the purposes of ERISA, the "fiduciary" of this
Agreement where a fiduciary is required by ERISA.
1.2. ANNUAL BENEFIT. The term "Annual BENEFIT" shall
mean an annual sum of Thirty-Six Thousand Dollars ($36,000.00) multiplied by the
Applicable Percentage (defined below) and then reduced to the extent: (i)
required under the other provisions of this Agreement, including, but not
limited to, Paragraphs 5, 6 and 7 hereof;
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(ii) required by reason of the lawful order of any regulatory agency or body
having jurisdiction over the Employer; and (iii) required in order for the
Employer to properly comply with any and all applicable state and federal laws,
including, but not limited to, income, employment and disability income tax laws
(e.g., FICA, FUTA, SDI).
1.3. APPLICABLE PERCENTAGE. The term "Applicable
Percentage" shall mean that percentage listed on Schedule "A" attached hereto
which is adjacent to the number of complete years (with a "year" being the
performance of personal services for or on behalf of the Employer for a period
of 365 days) which have elapsed starting from the Effective Date of this
Agreement and ending on the date payments are to first begin under the terms of
this Agreement. Notwithstanding the foregoing or the percentages set forth on
Schedule "A," but subject to all other terms and conditions set forth herein,
the "Applicable Percentage" shall be: (i) provided payments have not yet begun
hereunder, one hundred percent (100%) upon the Executive's death; and (ii)
notwithstanding subclause (i) of this Paragraph, zero percent (O%) in the event
the Executive takes any action which prevents the Employer from collecting the
proceeds of any life insurance policy which the Employer may happen to own at
the time of the Executive's death and of which the Employer is the designated
beneficiary. Furthermore, notwithstanding the foregoing, or anything contained
herein to the contrary, in the event the Executive takes any action which
prevents the Employer from collecting the proceeds of any life insurance policy
which the Employer may happen to own at the time of the Executive's death and of
which the Employer is the designated beneficiary: (1) the Executive's estate or
designated beneficiary shall no longer be entitled to receive any of the amounts
payable under the terms of this Agreement, and (2) the Bank shall have the right
to recover from Executive's estate all of the amounts paid to the Executive's
estate (with respect to amounts paid prior to Executive's death or paid to
Executive's estate) or designated beneficiary (with respect to amounts paid to
the designated beneficiary) pursuant to the terms of this Agreement prior to and
after Executive's death.
1.4. BENEFICIARY. The term "beneficiary" or
"designated beneficiary" shall mean the person or persons whom the Executive
shall designate in a valid Beneficiary Designation, a copy of which is attached
hereto as Exhibit "C," to receive the benefits provided hereunder. A
Beneficiary Designation shall be valid only if it is in the form attached hereto
and made a part hereof and is received by the Administrator prior to the
Executive's death.
1.5. CHANGE IN CONTROL. The term "Change in Control"
shall mean the occurrence of the any of the following events with respect to
Employer (with the term "Employer" being defined, when determining whether a
"Change in Control" has occurred, to include Mid-Peninsula Bank's current
holding company, Mid-Peninsula Bancorp, a California corporation, such that a
"Change in Control" of Mid-Peninsula Bancorp will be deemed to constitute a
"Change in Control" of the Employer): (i) a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
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Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or in response to any other form or report to the
regulatory agencies or governmental authorities having jurisdiction over the
Employer or any stock exchange on which the Employer's shares are listed which
requires the reporting of a change in control; (ii) any merger, consolidation or
reorganization of the Employer in which the Employer does not survive; (iii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions) of any assets of the Employer having an
aggregate fair market value of fifty percent (50%) of the total value of the
assets of the Employer, reflected in the most recent balance sheet of the
Employer; (iv) a transaction whereby any "person" (as such term is used in the
Exchange Act or any individual, corporation, partnership, trust or any other
entity) becomes the beneficial owner, directly or ,indirectly, of securities of
the Employer representing twenty-five percent (25%) or more of the combined
voting power of the Employer's then outstanding securities; or (v) a situation
where, in any one-year period, individuals who at the beginning of such period
constitute the Board of Directors of the Employer cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Employer's shareholders, of each new director is approved by
a vote of at least three-quarters (3/4) of the directors then still in office
who were directors at the beginning of the period.
1.6. THE CODE. The "Code" shall mean the Internal
Revenue Code of 1986, as amended (the "Code").
1.7. DISABILITY/DISABLED. The term "Disability" or
"Disabled" shall have the same meaning given such term in the principal
disability insurance policy covering the Executive, which is incorporated herein
by reference to the limited extent thereof. In the event the Executive is not
covered by a disability policy containing a definition of "Disability" or
"Disabled," these terms shall mean an illness or incapacity which, having
continued for a period of one hundred and eighty (180) consecutive days,
prevents the Executive from adequately performing the Executive's regular
employment duties. The determination of whether the Executive is Disabled shall
be made by an independent physician selected by mutual agreement of the parties.
1.8. EFFECTIVE DATE. The term "Effective Date" shall
mean the date upon which this Agreement was entered into by the parties, as
first written above.
1.9. ERISA. The term "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.
1.10. PLAN YEAR. The term "Plan Year" shall mean the
Employer's fiscal year.
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1.11. RETIREMENT. The term "Retirement" or "Retires"
shall refer to the date which the Executive acknowledges in writing to Employer
to be the last day he will provide any significant personal services, whether as
an employee or independent consultant or contractor, to Employer or to, for, or
on behalf of, any other business entity conducting, performing or making
available to any person or entity banking or other financial services of any
kind. For purposes of this Agreement, the phrase "significant personal
services" shall mean more than ten (10) hours of personal services rendered to
one or more individuals or entities in any thirty (30) day period.
1.12. SCHEDULE B ANNUITY. The term "Schedule B Annuity"
shall mean an "Annuity," as defined in this Paragraph 1.12, purchased by the
Bank within one month of the date the first payment is to be paid to the
Executive under the terms of this Agreement with that sum of money which equals:
(a) the amount set forth on Schedule B attached hereto which corresponds to the
number of complete years (i.e., twelve [12] month periods) which have elapsed
between the Effective Date hereof and the date on which the event triggering or
fixing an Executive's right to a Schedule B Annuity occurs; plus (b) an amount
equal to the amount of interest which would have been earned on the amount
described in the foregoing clause (a) of this Paragraph if said amount had been
invested in successive six month United States Treasury Bills starting from the
date on which the event triggering or fixing an Executive's right to a Schedule
B Annuity occurs and ending on the date the first payment to be made by the Bank
to the Executive under the terms of this Agreement is to occur (i.e., using the
six month T-Xxxx rate as the applicable rate for determining the "deemed
interest" to be credited). For purposes of this Agreement, the term "Annuity"
shall mean a commercially available, standard form annuity contract: (i) with an
insurance company having the highest available rating from Standard & Poor's;
and (ii) providing equal monthly payments over a period of fifteen years (one
hundred and eighty [180] months) (with the amount of each monthly payment to be
determined by reference to the Schedule B monetary amount which is to be
invested, as described above, and to begin as described below with respect to
the particular event which triggers the right to receive the Schedule B
Annuity). Notwithstanding the foregoing, or anything contained herein to the
contrary, the amount of the Annuity shall be limited (determined at the time of
its acquisition) to the extent: (i) required under the other provisions of this
Agreement, including, but not limited to, Paragraphs 5, 6 and 7 hereof; (ii)
required by reason of the lawful order of any regulatory agency or body having
jurisdiction over the Employer; and (iii) required in order for the Employer to
ensure proper compliance with any and all applicable state and federal laws,
including, but not limited to, income, employment and disability income tax laws
(e.g., FICA, FUTA, SDI). Furthermore, notwithstanding the foregoing, or
anything contained herein to the contrary, in the event the Executive takes any
action which prevents the Employer from collecting the proceeds of any life
insurance policy which the Employer may happen to own at the time of the
Executive's death and of which the Employer is the designated beneficiary: (1)
the Executive's estate or designated beneficiary shall no longer be entitled to
receive any of the amounts payable under the terms
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of the Annuity, and (2) all amounts paid prior to or after Executive's death
under the terms of the Annuity shall be recoverable in full by the Bank from
Executive's estate (with respect to amounts paid prior to Executive's death or
paid to Executive's estate) or designated beneficiary (with respect to amounts
paid to the designated beneficiary). The selection of the company which is to
provide the Annuity and the terms of such Annuity shall, except as provided or
limited above, be made by the Bank as it determines to be appropriate, said
determinations to be made by the Bank in its sole and absolute discretion.
1.13. SURVIVING SPOUSE. The term "Surviving Spouse"
shall mean the person, if any, who shall be legally married to the Executive on
the date of the Executive's death.
1.14. TERMINATION FOR CAUSE. The term "Termination for
Cause" shall mean termination of the employment of the Executive by reason of
any of the following:
(a) A termination "for cause" as this term may be
defined in any written employment agreement entered into by and between the
Employer and the Executive;
(b) The willful breach of duty by the Executive in the
course of his employment;
(c) The habitual neglect by the Executive of his
employment responsibilities and duties;
(d) The Executive's deliberate violation of any state
or federal banking or securities laws, or of the Bylaws, rules, policies or
resolutions of the Employer (or Employer's holding company parent corporation,
Mid-Peninsula Bancorp), or of the rules or regulations of: (i) the California
Superintendent of Banks; (ii) the Federal Deposit Insurance Corporation; or
(iii) any other regulatory agency or governmental authority having jurisdiction
over the Employer;
(e) The determination by a state or federal banking
agency or other governmental authority having jurisdiction over the Employer
that the Executive is not suitable to act in the capacity for which he is
employed by the Employer;
(f) The Executive is convicted of any felony or a
crime involving moral turpitude or a fraudulent or dishonest act; or
(g) The Executive discloses without authority any
secret or confidential information not otherwise publicly available concerning
the Employer or takes any action which the Employer's Board of Directors
determines, in its sole discretion and
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subject to good faith, fair dealing and reasonableness, constitutes unfair
competition with or induces any customer to breach any contract with the
Employer.
2. SCOPE, PURPOSE AND EFFECT.
2.1. CONTRACT OF EMPLOYMENT. Although this Agreement
is intended to provide the Executive with an additional incentive to remain in
the employ of the Employer, this Agreement shall not be deemed to constitute a
contract of employment between the Executive and the Employer nor shall any
provision of this Agreement restrict or expand the right of the Employer to
terminate the Executive's employment. This Agreement shall have no impact or
effect upon any separate written Employment Agreement which the Executive may
have with the Employer, it being the parties' intention and agreement that
unless this Agreement is specifically referenced in said Employment Agreement
(or any modification thereto), this Agreement (and the Employer's obligations
hereunder) shall stand separate and apart and shall have no effect upon, nor be
affected by, the terms and provisions of said Employment Agreement.
2.2. FRINGE BENEFIT. The benefits provided by this
Agreement are granted by the Employer as a fringe benefit to the Executive and
are not a part of any salary reduction plan or any arrangement deferring a bonus
or a salary increase. The Executive has no option to take any current payments
or bonus in lieu of the benefits provided by this Agreement.
3. PAYMENTS UPON OR AFTER RETIREMENT.
3.1. PAYMENTS UPON RETIREMENT. If the Executive shall
remain in the continuous employment of the Employer until attaining sixty-five
(65) years of age, and provided an event triggering Schedule B Annuity payments
has not yet occurred, the Executive shall be entitled to be paid the Annual
Benefit, as defined above, in equal monthly installments, for a period of
fifteen (15) years (One Hundred Eighty (180) months), with each installment to
be paid on the first day of each month, beginning with the month following the
month in which the Executive Retires or upon such later date as may be mutually
agreed upon by the Executive and the Employer in advance of said Retirement
date. At the Employer's sole and absolute discretion, the Employer may increase
the Annual Benefit as and when the Employer determines the same to be
appropriate in order to reflect a substantial change in the cost of living.
Notwithstanding anything contained herein to the contrary, the Employer shall
have no obligation hereunder to make any such cost-of-living adjustment.
3.2. PAYMENTS IN THE EVENT OF DEATH AFTER RETIREMENT.
The Employer agrees that if the Executive Retires and begins to receive payments
pursuant to Paragraph 3.1 hereof, but shall die before receiving all of the One
Hundred Eighty (180)
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monthly payments to which he is entitled, the Employer will continue to make
such monthly payments to the Executive's designated beneficiary for the
remaining period. If a valid Beneficiary Designation is not in effect, then the
remaining amounts due to the Executive under the term of this Agreement shall be
paid to the Executive's Surviving Spouse. If the Executive leaves no Surviving
Spouse, the remaining amounts due to the Executive under the terms of this
Agreement shall be paid to the duly qualified personal representative, executor
or administrator of the Executive's estate.
4. PAYMENTS IN THE EVENT DEATH OR DISABILITY OCCURS PRIOR TO
RETIREMENT.
4.1. PAYMENTS IN THE EVENT OF DEATH OR DISABILITY PRIOR
TO RETIREMENT. Provided an event triggering Schedule B Annuity payments has not
yet occurred, and the Executive dies while actively employed by the Employer at
any time after the Effective Date of this Agreement, but prior to Retirement,
the Employer agrees to pay the Annual Benefit to the Executive's designated
beneficiary in equal monthly installments, for a period of fifteen (15) years
(One Hundred Eighty (180) months). If a valid Beneficiary Designation is not
in effect, then the remaining amounts due to the Executive under the term of
this Agreement shall be paid to the Executive's Surviving Spouse. If the
Executive leaves no Surviving Spouse, the remaining amounts due to the
Executive under the terms of this Agreement shall be paid to the duly qualified
personal representative, executor or administrator of the Executive's estate.
Each installment shall be paid on the FIRST day of each month, beginning with
the month following the month in which the Executive's death occurs.
4.2. PAYMENTS IN THE EVENT OF DISABILITY PRIOR TO
RETIREMENT. In the event the Executive becomes Disabled while actively employed
by the Employer at any time after the date of this Agreement but prior to
Retirement, and provided an event triggering Schedule B Annuity payments has not
yet occurred, the Executive (or the Executive's designated beneficiary, or the
Executive's estate if no designated beneficiary has been selected, upon the
Executive's death) shall be entitled to the Schedule B Annuity, as defined
above, with payments thereunder to begin in the month following the month in
which the Executive attains sixty-five (65) years of age or, if earlier, the
month following the month in which the Executive dies.
5. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED PRIOR TO
RETIREMENT. As indicated in Paragraph 2 above, the Employer reserves the right
to terminate the Executive's employment, with or without cause but subject to
any written employment agreement which may then exist, at any time prior to the
Executive's Retirement. In the event that the employment of the Executive shall
be terminated, other than by reason of Disability, death or Retirement, prior to
the Executive's attaining sixty-five (65) years of age, then this Agreement
shall terminate upon the date of such termination of employment; provided,
however, that the Executive shall be entitled to the following benefits as may
be applicable depending upon the circumstances surrounding the Executive's
termination:
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5.1. TERMINATION WITHOUT CAUSE. If the Executive's
employment is terminated by the Employer without cause, and such termination is
not subject to the provisions of Paragraph 5.4 below, the Executive (or the
Executive's designated beneficiary, or the Executive's estate if no designated
beneficiary has been selected, upon the Executive's death) shall be entitled to
be paid the Schedule B Annuity, as defined above, with payments to begin with
the month following the month in which the Executive is terminated without cause
or upon such later date as may be mutually agreed upon by the Executive and the
Employer in advance of the effective date of the Executive's termination.
5.2. VOLUNTARY TERMINATION BY THE EXECUTIVE. It is
acknowledged and agreed by the Executive that the purpose of this Agreement is
to ensure the Executive's continued employment with the Employer and that if the
Executive voluntarily terminates his employment with the Employer (other than by
reason of death, Disability or Retirement), then the Executive shall have
willingly forfeited any and all rights and benefits he may have under the terms
of this Agreement and that, furthermore, no amounts shall be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.
5.3. TERMINATION FOR CAUSE. The Executive agrees that
if his employment with the Employer is terminated "for cause," as defined in
subparagraph 1. 14 of this Agreement, he shall forfeit any and all rights and
benefits he may have under the terms of this Agreement and shall have no right
to be paid any of the amounts which would otherwise be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.
5.4. TERMINATION BY THE EMPLOYER ON ACCOUNT OF OR AFTER
A CHANGE IN CONTROL. In the event: (i) the Executive's employment with the
Employer is terminated by the Employer in conjunction with, or by reason of, a
"change in control" (as defined in subparagraph 1.5 above); or (ii) by reason of
the Employer's actions a material change occurs in the scope of the Executive's
position, title, responsibilities, duties, salary, benefits, or locations of
employment after a "change in control" (as defined in subparagraph 1.5) occurs;
or (iii) the Employer causes an event to occur which reasonably constitutes or
results in a demotion, a significant diminution of responsibilities or
authority, or a constructive termination (by forcing a resignation or otherwise)
of the Executive's employment after a "change in control" (as defined in
subparagraph 1.5) occurs, then the Executive (or the Executive's designated
beneficiary, or the Executive's estate if no designated beneficiary has been
selected, upon the Executive's death) shall be entitled to be paid the Annual
Benefit, as defined above, in equal monthly installments, for a period of
fifteen (15) years (One Hundred Eighty (180) months), with installments to be
paid on the first day of each month, beginning with the month following the
month in which the Executive is terminated or any one of the actions referred to
above occurs.
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6. ADDITIONAL LIMITATIONS ON THE AMOUNT OF THE ANNUAL
BENEFIT/SCHEDULE B ANNUITY. The Executive acknowledges and agrees that the
parties have entered into this Agreement based upon the certain financial and
tax accounting assumptions. Accordingly, with full knowledge of the potential
consequences the Executive agrees that, notwithstanding anything contained
herein to the contrary: (i) the amount of the Annual Benefit or the Schedule B
Annuity, as the case may be, shall be limited to that amount of the Annual
Benefit or Schedule B Annuity (determined without regard to this Paragraph 6)
which will be deductible by the Employer under the Code in the year in which
payment is to be made to the Executive; (ii) the Annual Benefit amount or the
Schedule B Annuity, as the case may be, shall be deemed to be the last payment
made to the Executive and the first for which an income tax deduction, if any,
has been disallowed; and (iii) any compensatory amounts for which a deduction is
denied to the Employer shall, at the Employer's election, serve to first reduce
the Employer's obligation to make the monthly Annual Benefit payments otherwise
due and payable to the Executive under the terms of this Agreement. The
Executive recognizes that, in this regard, limitations on deductibility may be
imposed under, but not limited to, Code Section 280G. Consistent with the
foregoing, and in the event that any payment or benefit received or to be
received by the Executive, whether payable pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Employer
(together with the Annual Benefit or the Schedule B Annuity, the "Total
Payments"), will not be deductible (in whole or in part) as a result of Code
Section 280G, the Annual Benefit or the Schedule B Annuity, shall be reduced
until no portion of the Total Payments is nondeductible as a result of Section
280G of the Code (or the Annual Benefit/Schedule B Annuity is reduced to zero
(0)). For purposes of this limitation:
(a) No portion of the Total Payments, the receipt or
enjoyment of which the Executive shall have effectively waived in writing prior
to the date of payment of any future Annual Benefit or Schedule B Annuity
payments, shall be taken into account;
(b) No portion of the Total Payments shall be taken
into account, which in the opinion of the tax counsel selected by the Employer
and acceptable to the Executive, does not constitute a "parachute payment"
within the meaning of Section 280G of the Code;
(c) Future Annual Benefit/Schedule B Annuity payments
shall be reduced only to the extent necessary so that the Total Payments (other
than those referred to in clauses (a) or (b) above in their entirety) constitute
reasonable compensation for services actually rendered within the meaning of
Section 280G of the Code, in the opinion of tax counsel referred to in clause
(b) above; and
(d) The value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by the
Employer's independent auditors in accordance with the principles of Section
280G of the Code.
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7. RIGHT TO DETERMINE FINANCING METHODS. The Employer reserves the
right to determine, in its sole and absolute discretion, whether, to what extent
and by what method, if any, to provide for the payment of the amounts which may
be payable to the Executive, the Executive's spouse or the Executive's
beneficiaries under the terms of this Agreement. In the event that the Employer
elects to finance this Agreement, in whole or in part, through the use of life
insurance or annuities, or both, the Employer shall determine the ownership and
beneficial interests of any such policy of life insurance or annuity. The
Employer further reserves the right, in its sole and absolute discretion, to
terminate any such policy, and any other device used to finance its obligations
under this Agreement, at any time, in whole or in part. Consistent with
Paragraph 9 below, neither the Executive, the Executive's spouse nor the
Executive's beneficiaries shall have any right, title or interest in or to any
financing source or amount utilized by the Employer pursuant to this Agreement,
and any such financing source or amount shall not constitute security for the
performance of the Employer's obligations pursuant to this Agreement. In
connection with the foregoing, the Executive agrees to execute such documents
and undergo such medical examinations or tests which the Employer may request
and which may be reasonably necessary to facilitate any financing for this
Agreement including, without limitation, the Employer's acquisition of any
policy of insurance or annuity. Furthermore, a refusal by the Executive to
consent to, participate in and undergo any such medical examinations or tests
shall result in the immediate termination of this Agreement and the immediate
forfeiture by the Executive, the Executive's spouse and the Executive's
beneficiaries of any and all rights to payment hereunder.
8. CLAIMS PROCEDURE. The Employer shall, but only to the extent
necessary to comply with ERISA, be designated as the named fiduciary under this
Agreement and shall have authority to control and manage the operation and
administration of this Agreement. Consistent therewith, the Employer shall make
all determinations as to the rights to benefits under this Agreement. Any
decision by the Employer denying a claim by the Executive, the Executive's
spouse, or the Executive's beneficiary for benefits under this Agreement shall
be stated in writing and delivered or mailed, via registered or certified mail,
to the Executive, the Executive's spouse or the Executive's beneficiary, as the
case may be. Such decision shall set forth the specific reasons for the denial
of a claim. In addition, the Employer shall provide the Executive, the
Executive's spouse or the Executive's beneficiary with a reasonable opportunity
for a full and fair review of the decision denying such claim, as provided for
in Section 11.2 below.
9. STATUS AS AN UNSECURED GENERAL CREDITOR. Notwithstanding
anything contained herein to the contrary: (i) neither the Executive, the
Executive's spouse or the Executive's designated beneficiaries shall have any
legal or equitable rights, interests or claims in or to any specific property or
assets of the Employer; (ii) none of the Employer's assets shall be held in or
under any trust for the benefit of the Executive, the Executive's spouse or the
Executive's designated beneficiaries or held in any way as security for the
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fulfillment of the obligations of the Employer under this Agreement; (iii) all
of the Employer's assets shall be and remain the general unpledged and
unrestricted assets of the Employer; (iv) the Employer's obligation under this
Agreement shall be that of an unfunded and unsecured promise by the Employer to
pay money in the future; and (v) the Executive, the Executive's spouse and the
Executive's designated beneficiaries shall be unsecured general creditors with
respect to any benefits which may be payable under the terms of this Agreement.
10. DISCRETION OF BOARD TO ACCELERATE PAYOUT. Notwithstanding any
of the other provisions of this Agreement, the Board of Directors of Employer
may, if determined in its sole and absolute discretion to be appropriate,
accelerate the payment of the amounts due under the terms of this Agreement,
provided that Executive (or Executive's spouse or designated beneficiaries): (i)
consents to the revised payout terms determined appropriate by Employer's Board
of Directors; and (ii) does not negotiate or in anyway influence the terms of
proposed altered/accelerated payout (said decision to be made solely by the
Employer's Board of Directors and offered to the Executive (or Executive's
spouse or designated beneficiaries] on a "take it or leave it basis").
11. MISCELLANEOUS.
11.1. OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL.
The Executive acknowledges that he has been afforded the opportunity to consult
with independent counsel of his choosing regarding both the benefits granted to
him under the terms of this Agreement and the terms and conditions which may
affect the Executive's right to these benefits. The Executive further
acknowledges that he has read, understands and consents to all of the terms and
conditions of this Agreement, and that he enters into this Agreement with a full
understanding of its terms and conditions.
11.2. ARBITRATION OF DISPUTES. All claims, disputes and
other matters in question arising out of or relating to this Agreement or the
breach or interpretation thereof, other than those matters which are to be
determined by the Employer in its sole and absolute discretion or those matters
subject to the provisions of Article 8 hereof, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
presently located at 000 Xxxx Xxxxxx, Xxxxx 000, xx Xxx Xxxxxxxxx, Xxxxxxxxxx.
In the event JAMS is unable or unwilling to conduct the arbitration provided for
under the terms of this Paragraph, or has discontinued its business, the parties
agree that a representative member, selected by the mutual agreement of the
parties, of the American Arbitration Association ("AAA"), presently located in
San Francisco, California, shall conduct the binding arbitration referred to in
this Paragraph. Notice of the demand for arbitration shall be filed in writing
with the other party to this Agreement and with JAMS (or AAA, if necessary). In
no event shall the demand for arbitration be made after the date when
institution of legal or equitable
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proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statute of limitations. The arbitration shall be
subject to such rules of procedure used or established by JAMS, or if there are
none, the rules of procedure used or established by AAA. Any award rendered by
JAMS or AAA shall be final and binding upon the parties, and as applicable,
their respective heirs, beneficiaries, legal representatives, agents, successors
and assigns, and may be entered in any court having jurisdiction thereof. The
obligation of the parties to arbitrate pursuant to this clause shall be
specifically enforceable in accordance with, and shall be conducted consistently
with, the provisions of Title 9 of Part 3 of the California Code of Civil
Procedure. Any arbitration hereunder shall be conducted in San Francisco,
California, unless otherwise agreed to by the parties.
11.3. ATTORNEYS' FEES. In the event of any arbitration
or litigation concerning any controversy, claim or dispute between the parties
hereto, arising out of or relating to this Agreement or the breach hereof, or
the interpretation hereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The "prevailing party" means the party determined by
the arbitrator(s) or court, as the case may be, to have most nearly prevailed,
even if such party did not prevail in all matters, not necessarily the one in
whose favor a judgment is rendered.
11.4. NOTICE. Any notice required or permitted of
either the Executive or the Employer under this Agreement shall be deemed to
have been duly given, if by personal delivery, upon the date received by the
party or its authorized representative; if by facsimile, upon transmission to a
telephone number previously provided by the party to whom the facsimile is
transmitted as reflected in the records of the party transmitting the facsimile
and upon reasonable confirmation of such transmission; and if by mail, on the
third day after mailing via U.S. first class mail, registered or certified,
postage prepaid and return receipt requested, and addressed to the party at the
address given below for the receipt of notices, or such changed address as may
be requested in writing by a party.
If to the Employer: Mid-Peninsula Bank
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Chairman of the Board
If to the Executive: Xx. Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
12
11.5. ASSIGNMENT. Neither the Executive, the
Executive's spouse, nor any other beneficiary under this Agreement shall have
any power or right to transfer, assign, anticipate, hypothecate, modify or
otherwise encumber any part or all of the amounts payable hereunder, nor, prior
to payment in accordance with the terms of this Agreement, shall any portion of
such amounts be: (i) subject to seizure by any creditor of any such beneficiary,
by a proceeding at law or in equity, for the payment of any debts, judgments,
alimony or. separate maintenance obligations which may be owed by the Executive,
the Executive's spouse, or any designated beneficiary; or (ii) transferable by
operation of law in the event of bankruptcy, insolvency or otherwise. Any such
attempted assignment or transfer shall be void and shall terminate this
Agreement, and the Employer shall thereupon have no further liability hereunder.
11.6. BINDING EFFECT/MERGER OR REORGANIZATION. This
Agreement shall be binding upon and inure to the benefit of the Executive and
the Employer and, as applicable, their respective heirs, beneficiaries, legal
representatives, agents, successors and assigns. Accordingly, the Employer
shall not merge or consolidate into or with another corporation, or reorganize
or sell substantially all of its assets to another corporation, firm or person,
unless and until such succeeding or continuing corporation, firm or person
agrees to assume and discharge the obligations of the Employer under this
Agreement. Upon the occurrence of such event, the term "Employer" as used in
this Agreement shall be deemed to refer to such surviving or successor firm,
person, entity or corporation.
11.7. NONWAIVER. The failure of either party to enforce
at any time or for any period of time any one or more of the terms or conditions
of this Agreement shall not be a waiver of such term(s) or condition(s) or of
that party's right thereafter to enforce each and every term and condition of
this Agreement.
11.8. PARTIAL INVALIDITY. If any term, provision,
covenant, or condition of this Agreement is determined by an arbitrator or a
court, as the case may be, to be invalid, void, or unenforceable, such
determination shall not render any other term, provision, covenant or condition
invalid, void or unenforceable, and the Agreement shall remain in full force and
effect notwithstanding such partial invalidity.
11.9. ENTIRE AGREEMENT. This Agreement supersedes any
and all other agreements, either oral or in writing, between the parties with
respect to the subject matter of this Agreement and contains all of the
covenants and agreements between the parties with respect thereto. Each party
to this Agreement acknowledges that no other representations, inducements,
promises, or agreements, oral or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not set forth herein, and that
no other agreement, statement, or promise not contained in this Agreement shall
be valid or binding on either party.
13
11.10. MODIFICATIONS. Any modification of this Agreement
shall be effective only if it is in writing and signed by each party or such
party's authorized representative.
11.11. PARAGRAPH HEADINGS. The paragraph headings used
in this Agreement are included solely for the convenience of the parties and
shall not affect or be used in connection with the interpretation of this
Agreement.
11.12. NO STRICT CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any person.
11.13. GOVERNING LAW. The laws of the State of
California, other than those laws denominated choice of law rules, and, where
applicable, the rules and regulations of the California Superintendent of Banks
and the Federal Deposit Insurance Corporation, shall govern the validity,
interpretation, construction and effect of this Agreement.
IN WITNESS WHEREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Palo Alto, Santa Xxxxx
County, California.
THE EMPLOYER: THE EXECUTIVE:
Mid-Peninsula Bank,
A California State Chartered, Bank
By: /s/ Xxxxxx X. Xxxxxxxx, Chairman /s/ Xxxxxxx X. Xxxxxxx
----------------------------------- ---------------------------------
Xxxxxx X. Xxxxxxxx, Chairman Xxxxxxx X. Xxxxxxx
14
SCHEDULE A
NUMBER OF COMPLETE
YEARS WHICH HAVE ELAPSED APPLICABLE PERCENTAGE
------------------------ ---------------------
1. . . . . . . . . . . . . . . . . . . . . . . 10.00%
2. . . . . . . . . . . . . . . . . . . . . . . 20.00%
3. . . . . . . . . . . . . . . . . . . . . . . 30.00%
4. . . . . . . . . . . . . . . . . . . . . . . 40.00%
5. . . . . . . . . . . . . . . . . . . . . . . 50.00%
6. . . . . . . . . . . . . . . . . . . . . . . 60.00%
7. . . . . . . . . . . . . . . . . . . . . . . 70.00%
8. . . . . . . . . . . . . . . . . . . . . . . 80.00%
9. . . . . . . . . . . . . . . . . . . . . . . 90.00%
10 . . . . . . . . . . . . . . . . . . . . . . 100.00%
15
SCHEDULE B
SCHEDULE B ANNUITY AMOUNT
1. $ 9,358
2. $ 19,543
3. $ 30,629
4. $ 42,694
5. $ 55,826
6. $ 70,118
7. $ 85,674
8. $102,605
9. $121,032
10. $141,088
11. $162,917
12. $186,676
13. $212,534
14. $240,678
15. $271,310
16. $304,649
16
SCHEDULE C
BENEFICIARY DESIGNATION
To the Administrator of the Mid-Peninsula Bank Executive Salary
Continuation Agreement:
Pursuant to the Provisions of my Executive Salary Continuation Agreement
with Mid-Peninsula Bank, permitting the designation of a beneficiary or
beneficiaries by a participant, I hereby designate the following persons and
entities as primary and secondary beneficiaries of any benefit under said
Agreement payable by reason of my death:
PRIMARY BENEFICIARY:
0000 Xxxxxxxx Xx.
/s/ Xxxxx Xxxxxxx Xxx Xxxxx, XX 00000 Wife
------------------------- -------------------- ---------------
Name Address Relationship
SECONDARY (CONTINGENT) BENEFICIARY:
Children Born or Adopted
of This Marriage
------------------------- -------------------- ---------------
Name Address Relationship
TERTIARY (THIRD) BENEFICIARY & SEPARATELY; CONTINGENT IF NO SECONDARY
BENEFICIARY
My Estate
-------------------------
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.
The Administrator shall pay all sums payable under the Agreement by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Administrator shall pay all amounts in
accordance with the terms of my Executive Salary Continuation Agreement. In the
event that a named beneficiary survives me and dies prior to receiving the
entire benefit payable under said Agreement, then and in that event, the
17
remaining unpaid benefit payable according to the terms of my Executive Salary
Continuation Agreement shall be payable to the personal representatives of the
estate of said beneficiary who survived me but died prior to receiving the total
benefit provided by my Executive Salary Continuation Agreement.
THE EXECUTIVE:
Dated: March 21, 1996 /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
XXXXXXX X. XXXXXXX
CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:
I, Xxxxx Xxxxxxx, being the spouse of Xxxxxxx X. Xxxxxxx, after being
afforded the opportunity to consult with independent counsel of my choosing, do
hereby acknowledge that I have read, agree and consent to the foregoing
Beneficiary Designation which relates to the Executive Salary Continuation
Agreement entered into by my spouse effective as of March 21, 1996. I
understand that the above Beneficiary Designation may affect certain rights
which I may have in the benefits provided for under the terms of the Executive
Salary Continuation Agreement and in which I may have a marital property
interest.
Dated: March 21, 1996.
/s/ Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxxx
18
CERTIFICATE OF ACKNOWLEDGMENT
OF NOTARY PUBLIC
State of California )
County of Santa Xxxxx ) SS.
)
On March 21, 1996, before me, Xxxxxxx X. Xxxxxx Notary Public, State of
California, personally appeared Xxxxxxx X. Xxxxxxx and Xxxxx Xxxxxxx,
[ ] personally known to me - OR
[X] proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) are subscribed to the within instrument and acknowledged to me
that they executed the same in their authorized capacity, and that by their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Notary Public,
State of California
[SEAL]
(Seal)
Capacity Claimed by Signer:
---------------------------
[X] Individual(s) Signing for Oneself/Themselves
[ ] Corporate Officer(s)
------------------ ----------------------------
Title Company
------------------ ----------------------------
Title Company
[ ] Partner(s)
-------------------------------------------------------------
Partnership
[ ] Trustees(s)
------------------------------------------------------------
Trust
[ ] Attorney-in-Fact
--------------------------- -----------------------
Principal Principal
[ ] Other
--------------------------------- ----------------------------
Entity(ies) Represented Entity(ies) Represented
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Title or Type of Document: Date of Document:
---------------------- -----
Number of Pages: Signer(s) Other Than Named Above:
----------- --------------
