EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.28
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of this 15th day of May 2009, by
and among Xxxxx Xxxxxxxx (“Executive”), Xxxxxxxx Corporation, a California corporation (the
“Company”) and Bank of Commerce Holdings (together with any acquisition subsidiary that may be
formed for the purposes of effecting the transactions contemplated by this Agreement, “BOCH”).
Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in
the Stock Purchase Agreement (as defined below).
WITNESSETH
WHEREAS, Executive has been a principal officer of Company and has obtained valuable knowledge and
experience pertaining to Company’s business (collectively, the “Business”); and
WHEREAS, following BOCH investment in the Company, Executive shall be named as the President of the
Company and the Company shall continue the operation of the Business;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Employment. Beginning on the date hereof and continuing until December 31, 2012 ,
unless terminated earlier pursuant to Section 10 of this Agreement, the Company shall
employ Executive as President of the Company, and Executive hereby accepts such employment. The
Executive shall have the duties described in Schedule A hereto, together with such other
duties consistent with such position that are assigned to him from time to time by the Board of
Directors of the Company (the “Board”). The period of time during which Executive is employed by
the Company is referred to herein as the “Employment Period.” During the Employment Period,
Executive shall devote his full time and best efforts to the business and welfare of the Company.
Any amendments, waivers or extensions of this Agreement shall be adopted by vote of the three
director Executive Compensation Committee of the Company’s board of directors. Two of the three
directors on the Executive Compensation Committee will be from BOCH.
During the Employment Period, Executive shall be nominated to serve as a member of the Board and
Chairman of the Board of Directors of the Company.
2. Salary, Bonuses and Benefits.
(a) Base Salary. During the Employment Period, the Company will pay Executive for his
services a base salary at the annual rate of $300,000, which salary shall be payable in accordance
with Company’s standard payroll practices. The Board, in its sole and absolute discretion, may
increase, but not decrease (unless mutually agreed by the Board and Executive), such base salary
based on an annual review of Executive’s performance.
(b) Earn-Out Agreement. In connection with the formation of the Company, Executive
shall be entitled to participate in the Earn-Out Agreement.
(c) Benefits. The Company shall provide Executive with the benefits of such insurance
plans, hospitalization plans, retirement plans and other employee benefits in accordance with
Company’s prior policies.
3. Noncompetition. Executive hereby agrees that, for the period commencing on the date
hereof and expiring on the third anniversary of the date BOCH acquires the Remaining Shares (as
defined in the Stock Purchase Agreement), Executive will not, anywhere in the geographic area
served by the Company at the date BOCH acquires the Remaining Shares, associate with (including,
but not limited to, association as an officer, employee, partner, director, consultant, agent or
advisor) or own directly, or indirectly, any interest in (other than publicly traded shares), any
business that is in competition with the Business (a “Competing Business”).
4. Nondisclosure. Executive agrees at all times to hold as secret and confidential any
and all knowledge, information, developments, trade secrets, know how and confidences of the
Company, or the Business of which he has knowledge as of the date hereof, or of which he may
acquire knowledge during the Employment Period, to the extent such matters have not previously been
made public, are not thereafter made public or do not otherwise become available to Executive from
a third party who is not bound by any confidentiality agreement with the Company or Company
(“Confidential Information”). Executive agrees not to use such knowledge for his own benefit or
for the benefit of others or, except as provided above, disclose any of such Confidential
Information without the prior written consent of the Company or Company, which consent shall make
express reference to this Agreement.
5. Non-Solicitation. Executive hereby agrees that, for the period commencing on the date
hereof and expiring on the third anniversary of the date BOCH acquires the Remaining Shares (as
defined in the Stock Purchase Agreement), Executive will not knowingly, either directly or
indirectly, without the prior written consent of the Company, (a) induce, or facilitate or assist a
third party to induce, any person, business or entity which is on the date hereof or was during the
twelve months prior to the date hereof a material supplier or customer of the Company, or which
otherwise is on the second anniversary of the termination of the Employment Period or was during
the twelve months prior to the date hereof a material contracting party of the Company, to
terminate any written or oral agreement with, or reduce its business with, the Company or (b)
employ or solicit to employ in a business other than that of the Company, or facilitate a third
party to so employ or solicit to employ, any employees of the Company, engaged in the conduct of
the Business.
2
6. Termination.
(a) By Executive without Good Reason. The Employment Period may be terminated by
Executive at any time without Good Reason (as defined below) upon the giving of 90 days’ advance
written notice to the Company. In the event Executive terminates this Agreement without Good
Reason, (i) the Company shall pay to Executive (A) his base salary accrued through the effective
date of such termination, (B) the value of any unused accrued vacation days, and (C) any
outstanding unpaid reimbursement expenses.
(b) As used herein, the term “Good Reason” means only (x) a requirement that Executive
relocate his principal place of business to a location other than in Contra Costa, California,
without Executive’s consent, (y) a diminution in Executive’s position, responsibilities or
authority (other than during any period of time during which Executive is unable to perform such
responsibilities, such as during any Disability) such that the Executive’s position,
responsibilities or authority after such diminution is inconsistent with the Executive’s title or
duties set forth in Section 1 of the Agreement, or (z) any other material breach of this Agreement
by the Company which is not cured within thirty (30) days after notice thereof is given to the
Company, including, without limitation, any failure by the Company to pay to Executive the
compensation or benefits to which he is entitled hereunder.
(c) Disability of Executive. If Executive becomes physically or mentally disabled,
whether totally or partially, such that he is unable to perform the essential services hereunder (a
“Disability”) throughout the Disability Period (as defined below), the Company may terminate this
Agreement at any time after the end of the Disability Period by written notice to Executive and,
except for the obligations of Executive set forth in Sections 3 through 5 hereof,
the payment by the Company of any earned but unpaid salary, any unused accrued vacation days
through the end of the month in which such termination becomes effective and the reimbursement of
business expenses, all rights and obligations of the Company and Executive hereunder shall
terminate. For purposes hereof, the term “Disability Period” means the six month period
following the date that the Executive’s absence from work due to Disability commences.
(d) Death of Executive. In the event of Executive’s death, this Agreement shall be
terminated without notice by any party as of the end of the month in which Executive’s death
occurs, and, except for the payment by the Company of any earned but unpaid salary, any accrued
unused vacation days through the end of such month, the reimbursement of business expenses, and the
payment of any life insurance proceeds to which the beneficiaries of Executive may be entitled, all
rights and obligations of the Company and Executive’s heirs hereunder shall terminate.
(e) By the Company for Cause. This Agreement may be terminated at any time by the
Company for Cause by written notice to Executive. In such event, all rights and obligations of the
parties hereunder shall immediately terminate, except for the obligations of Executive set forth in
Sections 3, 4, and 5 hereof, the payment by the Company of Executive’s earned but unpaid base
salary, unused accrued vacation days through the date on which such termination occurs, and the
reimbursement of business expenses. In the event of termination for Cause, Executive shall
automatically be deemed to have resigned from the Board and all other positions in the Company.
As used herein, the term “Cause” means the occurrence of any of the following events: (A)
Executive’s conviction of any felony, or any crime involving moral turpitude, dishonesty or theft;
Executive’s embezzlement or misappropriation of money or other property of the Company; (B) the
Board’s determination that the Executive has willfully and continually failed to substantially
perform his material duties hereunder, which failure is not remedied by Executive within thirty
(30) days after receipt of written notice detailing such alleged failure; (C) the commission by the
Executive of any
3
willful or intentional act, or the Executive’s willful or intentional failure to act, which
could reasonably be expected to injure the reputation, business or business relationships of the
Company; provided, however, that no act or failure to act on the part of the Executive shall be
deemed to be willful or intentional if it was due primarily to an error of judgment or negligence,
but shall be deemed willful or intentional if done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was in the best interests of
the Company; or (D) Executive’s use of alcohol or illegal drugs, materially interfering with the
performance of the Executive’s obligations under this Agreement, continuing after written warning,
or (E) any material breach by Executive of this Agreement, or any breach of the fiduciary duties
owed by Executive to the Company.
(f) The provisions of the Earn-Out Agreement shall govern whether Earn-Out Payments are made
to Executive following termination of employment.
7. Reformation of Agreement; Severability. The parties hereto intend this Agreement to be
enforced as written. However, in the event that any provision of this Agreement is held by a court
of competent jurisdiction to be invalid or unenforceable as against public policy or otherwise,
Executive and the Company hereby authorize and instruct such court to exercise its discretion in
reforming such provision to the end that Executive shall be subject to such restrictions and
obligations as are reasonable under the circumstances and enforceable by the Company. If any
provision of the Agreement shall be held invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement, and the Agreement shall be carried
out as if any such invalid or unenforceable provision were not contained herein.
8. Notices. Any notices or other communication required to be sent or given hereunder by
any of the parties shall in every case be in writing and shall be deemed to have been duly given
upon (a) the date such notice is delivered personally to the recipient, (b) three days after the
date mailed to the recipient by registered or certified mail, return receipt requested and postage
prepaid, (c) one day after delivery to the recipient by a recognized overnight courier service
(charges prepaid), (d) the next business day after the date of transmission if sent by electronic
mail to the recipient with a confirmation copy to follow the next day to be delivered by overnight
carrier or certified mail, or (e) the next business day after the date of transmission if sent by
telecopy to the recipient (with written confirmation of receipt) with a confirmation copy to follow
the next day to be delivered by overnight carrier or certified mail. Such notices, demands and
other communications shall be sent to the addresses identified in the Transaction Documents.
9. Assignment. The obligations imposed and the rights conferred by this Agreement shall be
binding upon and inure to the benefit of the respective heirs (including estates), successors and
permitted assigns of the parties hereto, but will not be assignable or delegable by any party
without the prior written consent of the other parties; provided that, notwithstanding the
foregoing, the Company may assign this Agreement and any or all of its rights, interest and
obligations hereunder to any affiliate of the Company without the prior written consent of
Executive, so long as such assignment does not release the Company from liability hereunder.
10. Entire Agreement. This Agreement contains the entire agreement between the parties
hereto with respect to the terms of the Executive’s employment. Any other agreement between the
parties hereto that is referenced herein, or which makes reference to this Agreement, is, and is
intended to be construed as, a separate agreement entered into by and for the benefit of the
parties thereto, and the provisions of each such agreement, including without limitation provisions
relating to governing law, jurisdiction or venue, shall relate solely to that agreement.
4
11. Amendments, Waivers, Etc. This Agreement may not be changed orally, but only by an
agreement, in writing, signed by Executive and an officer of the Company specifically designated by
the Board in accordance with the terms of this Agreement to execute such amendment. The terms of
this Agreement may be waived only by a written instrument specifically referring to this Agreement,
executed by the party waiving compliance. The failure of the Company at any time or from time to
time to require performance of any of Executive’s obligations under this Agreement shall in no
manner affect the Company’s right to enforce any provisions of this Agreement at a subsequent time;
and the waiver by the Company of any right arising out of any breach shall not be construed as a
waiver of any right arising out of any subsequent breach.
12. Interpretation. The section numbers and headings contained in this Agreement are
inserted for purposes of convenience of reference only and shall not affect the meaning or
interpretation hereof. In the case of a conflict between the provisions of this Agreement and the
Purchase Agreement, the provisions of the Purchase Agreement shall govern. A reference to a
Section shall mean a Section in this Agreement, unless otherwise expressly stated. The words
“include,” “includes” and “including” when used herein shall be deemed in each case to be followed
by the words “without limitation.”
13. Capacity. Executive represents and warrants to the Company that he has full legal
power and capacity to execute, deliver and perform this Agreement.
14. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without giving effect to principles of conflicts of law.
15. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the same
instrument.
[Signature Pages to Follow]
5
IN WITNESS WHEREOF, the Members of the Company and Executive have executed and delivered this
Agreement on the date first written above.
| COMPANY: | ||||
| Xxxxxxxx Corporation | ||||
| /s/ Xxxxx Xxxxxxxx | ||||
| Title: President and Chief Executive Officer | ||||
| BOCH: | ||||
| Bank of Commerce Holdings | ||||
| /s/ Xxxxxxx X. Xxxx | ||||
| Title: President and Chief Executive Officer | ||||
| EXECUTIVE: | ||||
| /s/ Xxxxx Xxxxxxxx | ||||
6
