EMPLOYMENT AGREEMENT
This Employment Agreement (hereinafter referred to as "Agreement") is made
effective as of May 22, 1996, by and between FIRST NATIONAL BANK OF CENTRAL
CALIFORNIA (hereinafter referred to as "Employer") and XXXXXX X. XxXXXX
(hereinafter referred to as "Employee").
Employer desires to employ, as Senior Vice President and Chief Financial
Officer, a person of high executive caliber with significant prior experience in
the banking services which Employer provides.
Employee being willing to be employed by Employer as Senior Vice
President and Chief Financial Officer, and Employer being willing to employ
Employee on the terms, covenants and conditions hereinafter set forth, it is
agreed as follows:
1. Position. Employee is hereby employed as Senior Vice President and
Chief Financial Officer of Employer.
2. Employment Term. The term of this Agreement shall commence effective
May 22, 1996, and continue for three (3) years thereafter through May 21, 1999,
unless earlier terminated pursuant to Paragraph 6 below, such period being the
term of this Agreement.
3. Employee Duties. Employee shall hold and perform the customary
responsibilities and duties of the position of Senior Vice President and Chief
Financial Officer as designated by the Bylaws of Employer and as directed by
Employer through its Board of Directors (hereinafter referred to as "Board").
4. Extent of Services. Employee shall devote his full time, attention
and energies to the business of Employer, and shall not, during the term of this
Agreement, engage directly or indirectly, in any other business activity, except
personal investments, without the prior written consent of Employer.
5. Compensation and Benefits. Employee's salary shall be at the rate of
$109,027 per year, prorated for any partial year in which this Agreement is in
effect (as such salary may be adjusted during the term of this Agreement, the
"Base Salary"). Said salary shall be payable in equal semi-monthly installments.
Any salary increase shall be at the sole discretion of the Board. Employer
agrees to review and evaluate Employee's performance at the end of each fiscal
year to determine whether Employee should be paid a cash bonus ("the Bonus").
The amount of such bonus, if any, will be determined in the sole discretion of
the Board. In addition, Employee shall receive the following benefits:
a) Automobile. Employer shall provide Employee with a full-size
automobile, the make, model and equipment of which shall be determined by
Employer, solely for his use alone during the term of this Agreement. Employer
shall pay or reimburse Employee for all auto expenses incurred in the use of
said automobile by Employee in the performance of his duties under this
Agreement. Employer shall maintain an automobile liability insurance policy on
said
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automobile, with coverage to include Employee's operation of said automobile and
in such amounts as Employer and Employee shall agree upon.
b) Insurance. Employer shall be a participant in such group life
insurance, health and long-term disability plans as are maintained by Employer,
at Employer's sole cost and expense. In addition, Employer shall, at its sole
cost and expense, provide Employee with a copy of standard term life insurance
in the face amount of $250,000. Employee shall have the right, in Employee's
sole discretion, to designate the beneficiary or beneficiaries of any such
insurance.
c) Vacation. Employee shall receive four (4) weeks paid vacation per
year, prorated for any partial calendar year in which this Agreement is in
effect, which shall be taken at such time or times as mutually agreed upon by
Employee and the Board, provided that at least two (2) weeks of such vacation
shall be taken consecutively per calendar year. Employee acknowledges that the
requirement of two (2) consecutive weeks of vacation is required by sound
banking practices.
d) General Expenses. Employer shall, upon submission and approval of
written statements and bills in accordance with the then-regular procedures of
Employer, pay or reimburse Employee for any and all necessary, customary and
usual expenses incurred by him while traveling for or on behalf of Employer and
any and all other necessary, customary or usual expenses (including
entertainment) incurred by employee for or on behalf of Employer in the normal
course of business as determined to be appropriate by Employer.
e) Other Benefits. In the event that Employer in the future establishes
any other benefit plan for its senior executives generally, Employee shall be
eligible to participate in such plan on the terms and conditions stated in the
legal documents for such plan.
6. Termination. This Agreement may be terminated prior to May 21, 1999,
with or without cause in accordance with this Paragraph 6(a) through 6(f). In
the event of such termination, Employee shall be released from all obligations
under this Agreement, except that Employee shall remain subject to Paragraphs 7,
8, 12(c), 12(i) and 12(j), and Employer shall be released from all obligations
under this Agreement, except as otherwise provided in this Paragraph and
Paragraphs 12(c), 12(e), 12(i) and 12(j).
a) Early Termination By Employer Without Cause. This Agreement may be
terminated without cause, for any reason whatsoever, in the sole, absolute and
unreviewable discretion of Employer, upon thirty (30) days' written notice by
Employer to Employee. If this Agreement is terminated pursuant to this Paragraph
6(a), if the term of this Agreement is not extended upon expiration thereof,
Employee shall receive (i) the salary and insurance benefits as provided under
the terms of this Agreement for a period of six (6) months from the date of such
termination provided Employee shall, at his discretion, be entitled to receive
such salary payment in a lump sum in lieu of receiving such salary payments over
a period of six (6) months following termination; and (ii) a bonus for the year
in which the termination occurs, prorated based upon the fraction of the
calendar year Employee was employed, if, and only if, a bonus program for that
year has been established prior to such termination and such plan provides for
calculable bonuses not based on the discretion of Employer. Such salary and
insurance benefits
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shall be in full and complete satisfaction of any and all rights which Employee
may enjoy under this Agreement and shall be the sole compensation and/or damages
payable to Employee as the result of termination of this Agreement without
cause.
b) Early Termination By Employer For Cause. This Agreement may be
terminated for cause by Employer immediately upon written notice to Employee,
and Employee shall not be entitled to receive compensation or other benefits for
any period after termination for cause. Employee understands and agrees that
satisfactory performance of this Agreement on his part requires conformance with
the highest standards of integrity, diligence, competence, skill, judgment and
efficiency in the banking industry and that failure to conform to such standards
is cause for termination of the Agreement by Employer. Cause for termination
pursuant to this Paragraph 6(b) also includes: (1) failure to qualify for a
surety bond as provided in Paragraph 11 of this Agreement; (2) violation of any
law, rule or regulation (other than a traffic violation or similar offense); (3)
acts causing termination of Employer's Banker's Blanket Bond with respect to
Employee; (4) repeated insobriety or usage of drugs without prescription; (5)
misappropriation of Employer's property; (6) any act of dishonesty; (7) neglect
of duties or negligence in carrying out duties; (8) repeated unexcused absence;
(9) breach of any material provision of this Agreement; and (10) any act or
omission that is seriously detrimental to Employer's interests.
c) Early Termination By Employee. This Agreement may be terminated by
Employee upon thirty (30) days' written notice to Employer.
d) Early Termination Upon Disability. If Employee becomes disabled due
to a physical or mental disability so that he is unable to perform the essential
functions of his position and the disability cannot be reasonably accommodated
without undue hardship, Employer may at its option terminate this Agreement.
Employee shall be entitled to the salary provided for in Paragraph 5 of this
Agreement for a period of not to exceed six (6) months from the date of
Employee's first absence due to the disability, but not beyond May 21, 1999, and
to accrued but unused vacation leave. Employee's salary in the event of
disability and termination therefor shall be offset by any payments received by
Employee as a result of a disability insurance policy purchased by Employer for
Employee. All other benefits provided for under this Agreement shall cease as of
the date of termination. For purposes of this Agreement, physical or mental
disability shall mean the inability of Employee to fully perform under this
Agreement for a continuous period of ninety (90) days, as determined by a
physician in the case of physical disability, or a psychiatrist in the case of
mental disability, licensed to practice medicine in California and selected
jointly by Employer and Employee. Upon demand by Employer, Employee shall act
promptly to select such physician or psychiatrist jointly with Employer, shall
consent to undergo any reasonable examination or test and shall authorize
release of all pertinent medical records to Employer. Recurrent disabilities
will be treated as separate disabilities if they result from unrelated causes or
if they result from the same or related cause or causes and are separated by a
continuous period of at least six (6) full months during which Employee was able
to perform his duties hereunder equal to at least eighty percent (80%) of his
capacity prior to disability. Otherwise, recurrent disabilities will be treated
as a continuation of previous disabilities for the purpose of determining the
limitations established in this paragraph.
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e) Death During Employment. This Agreement shall terminate immediately
upon the death of Employee.
f) Change of Control. In the event of a change in control by merger of
Employer and/or Pacific Capital Bancorp, the parent company of Employer
(hereinafter referred to as "Pacific"), into another bank and/or holding company
or other entity or by purchase of Employer and/or Pacific or the purchase of all
or substantially all of the assets of Employer and/or Pacific by another bank
and/or holding company or other person or entity, not resulting from financial
difficulties or insolvency of Employer and/or Pacific, then Employee shall be
paid one and one-half times his annual Base Salary plus Bonus as defined in
Section 5 of this Agreement for the average of the three years immediately
preceding the effective time of such change of control, which amount shall be
due and payable to Employee at the effective time of such change in control
together with any Base Salary and Bonus earned to such date.
7. Printed Material. All written or printed materials used by Employee
in performing duties for Employer are and shall remain the property of Employer.
Upon termination of employment, Employee shall promptly return such written or
printed materials to Employer.
8. Disclosure of Information. Employee recognizes and acknowledges that
Employer and Pacific possess information concerning their business affairs and
methods of operation which constitute valuable, special and unique assets of
their businesses. Employee shall not, at any time before or after termination of
this Agreement, disclose to anyone any confidential information relating to
Employer, Pacific or any affiliate of Pacific. For purpose of this paragraph,
confidential information includes all information regarding products, services,
processes, know-how, customers, suppliers, product and/or service development,
business plans, research, finances, marketing, pricing, costs and any other
proprietary matters relating to Employer, Pacific or any affiliate of Pacific.
Employee recognizes and acknowledges that all financial information concerning
any of Employer's customers is strictly confidential, and Employee shall not at
any time before or after termination of this Agreement disclose to anyone any
such financial information or any part thereof, for any reason or purpose
whatsoever.
9. Noncompetition by Employee. During the term of this Agreement,
Employee shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director,
or in any other individual or representative capacity, engage or participate in
any competing banking business; provided, however, Employee shall not be
restricted by this paragraph from owning securities of corporations listed on a
national securities exchange or regularly traded by national securities dealers,
so long as such investment does not exceed one percent (1%) of the market value
of the outstanding securities of such corporation.
10. Moral Conduct. Employee agrees to conduct himself at all times with
due regard to public conventions and morals. Employee further agrees not to do
or commit any act that will reasonably tend to degrade him or to bring him into
public hatred, contempt or ridicule or that
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will reasonably tend to shock or offend the community or to prejudice Employer
or the banking industry in general.
11. Surety Bond. Employee agrees that he will furnish all information
and take any steps necessary to enable Employer to obtain or maintain a fidelity
bond, satisfactory to Employer, conditional on the rendering of a true account
by Employee of all monies, goods or other property which may come into the
custody, charge or possession of Employee during the term of this employment.
Employer shall pay all premiums on the bond. If Employee cannot qualify for a
surety bond at any time during the term of this Agreement, Employer shall have
the option to terminate this Agreement immediately.
12. General Provisions. This Agreement is further governed by the
following provisions:
a) Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, among the parties hereto with respect to
the employment of Employee by Employer and contains all of the covenants and
agreements among the parties with respect to such employment. Each party
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by any party or anyone acting on behalf of a party
which are not embodied herein, and that no other agreement, statement,
representation, inducement or promise not contained in this Agreement shall be
valid or binding. Any modification, waiver or amendment of this Agreement will
be effective only if it is in writing and signed by the party to be charged.
b) Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
c) Choice of Law and Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, except to the
extent preempted by the laws of the United States. Any action or proceeding
brought upon or arising out of this Agreement or its termination shall be
brought in a forum located within the State of California.
d) Binding Effect of Agreement. This Agreement shall inure to the
benefit of and be binding upon Employer, its successors and assigns, including
without limitation, any person, partnership or corporation which may acquire all
or substantially all of Employer's assets and business, or with or into which
Employer or Pacific may be consolidated, merged or otherwise reorganized, and
this provision shall apply in the event of any subsequent merger, consolidation,
reorganization or transfer. The provisions of this Agreement shall be binding
upon and inure to the benefit of Employee and his heirs and personal
representatives. The rights and obligations of Employee under this Agreement
shall not be transferable by Employee by assignment or otherwise and such rights
shall not be subject to commutation, encumbrance or the claims of Employee's
creditors, and any attempt to do any of the foregoing shall be void.
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e) Indemnification. Employer shall indemnify Employee to the maximum
extent permitted under the Bylaws of Employer and the governing laws for any
liability or loss arising out of Employee's actual or asserted misfeasance or
nonfeasance in the good faith performance of his duties or out of any actual or
asserted wrongful act against or by Employer, including, but not limited to,
judgments, fines, settlements and expenses incurred in the defense of actions,
proceedings and appeals therefrom. If available at reasonable rates, which shall
be determined by the Employer in its sole discretion, Employer shall endeavor to
apply for and obtain directors' and officers' liability insurance to indemnify
and insure Employer and Employee from such liability or loss.
f) Severability. In the event that any term or condition contained in
this Agreement shall, for any reason be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
condition of this Agreement, but this Agreement shall be construed as if such
invalid or illegal or unenforceable term or condition had never been contained
herein.
g) Headings. The headings in this Agreement are solely for convenience
of reference and shall be given no effect in the construction or interpretation
of this Agreement.
h) Notices. Any notices to be given hereunder by any party to another
party may be effected either by personal delivery, in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses indicated at the end
of this Agreement, but each party may change his or her address by written
notice in accordance with this paragraph. Notices delivered personally shall be
deemed communicated as of actual receipt; mailed notices shall be deemed
communicated as of five (5) days after mailing.
i) Arbitration. Any controversy or claim arising out of or relating to
this Agreement or alleged breach of this Agreement, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment on the award rendered by the arbitrators
may be entered in any court having jurisdiction. There shall be three (3)
arbitrators, one (1) to be chosen directly by each party and the third (3rd)
arbitrator to be selected by the two (2) arbitrators so chosen. Each party shall
pay the fees of the arbitrator he/it selects and of his/its own attorneys, and
the expenses of his/its witnesses and all other expenses connected with
presenting his/its case. Other costs of the arbitration, including the cost of
any record or transcripts of the arbitration, administrative fees, the fee of
the third (3rd) arbitrator, and all other fees and costs shall be borne equally
by the parties.
j) Attorneys' Fees and Costs. If any action at law or in equity is
brought by a party upon or arising out of this Agreement or its termination, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements incurred in the action, in addition to any other relief
to which he may be entitled.
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IN WITNESS WHEREOF, the parties hereto have set their hands this 22nd
day of May, 1996, in the City of Xxxxxxx, County of Monterey, State of
California.
EMPLOYER: FIRST NATIONAL BANK OF CENTRAL CALIFORNIA
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Its: Executive Committee Chairman
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EMPLOYEE: /s/ Xxxxxx X. XxXxxx
--------------------
Xxxxxx X. XxXxxx
0000 X. Xxxx, #000
Xxxxxxx, XX 00000
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