Exhibit 10.2
Employment Agreement with Xxxxx X. Xxxxxxxx
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into effective as of March 1, 1999, by and
between Xxxxx X. Xxxxxxxx (hereinafter referred to as "Employee"), and The
Vintage Bank, a bank chartered by the California State Banking Department
(sometimes referred to as "the Bank").
1. Employment Agreement. The Bank hereby agrees to employ Employee and
Employee hereby agrees to serve as such Employee upon the terms and conditions
hereinafter set forth.
2. Term of Employment. The term of employment commenced as of March 1,
1999, and shall continue for a period of five (5) years from such date unless
sooner terminated as hereinafter provided in paragraphs 12 and 13 of this
Agreement.
3. Employee's Position and Duties. Employee shall perform the duties of
the President and Chief Executive Officer of the Bank subject to the powers
vested in the Board of Directors of the Bank and in the Bank's shareholders, or
such other duties as may be prescribed by the Board. During the term of this
Agreement, Employee shall perform his duties faithfully, diligently, and to the
best standards of the banking industry and in compliance with all applicable
laws and the Bank's articles of incorporation and bylaws.
4. Devotion of Entire Time to Bank's Business. During his employment,
Employee shall devote his full energies, interest, abilities, and productive
time to the performance of this Agreement and shall not, without the Bank's
prior written consent, render to others services of any kind for compensation,
or engage in any other business activity that would materially interfere with
the performance of his duties under this Agreement.
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5. Compensation. During the term of this Agreement, the Bank shall pay
to Employee, and Employee hereby accepts as compensation an annual salary in the
amount of One Hundred Seventy-four Thousand and No/100ths Dollars ($174,000.00).
Such compensation shall be paid in equal bi-monthly installments. Employee?s
salary shall be subject to annual adjustment as may be determined by the Bank's
Board of Directors in its sole and absolute discretion.
All compensation will be subject to such withholding deductions as are
required by law or agreed upon by the Employee.
6. Incentive Compensation. Commencing with the Bank's 1999 fiscal year
and as additional compensation for services rendered hereunder Employee shall be
entitled to receive from the Bank a sum equal to a portion of a specified
percentage, which portion and percentage will be determined by the Bank's Board
of Directors in its sole and absolute discretion, of the Bank's after tax net
profit to be paid to full time salaried officers pursuant to a non-qualified
profit sharing plan to be established by the Bank (the "Plan" hereafter). The
Plan shall establish a level of after tax net profit which must be exceeded (the
"Target Level") before Employee or any other full time salaried officers of the
Bank shall be entitled to additional compensation under the Plan. The Plan shall
establish a formula by which the specified percentage of the Bank's after tax
profit to be distributed under the Plan increases as the profits increase.
7. Reimbursable Expenses. The Bank shall reimburse the Employee for the
following expenses:
7.1. The Employee's necessary travel, hotel, and entertainment
expenses incurred in connection with the business of the Bank or other events
that contribute to the benefit of the Bank in amounts determined by the Board of
Directors.
7.2. All other expenses incurred by the Employee in the course
of his employment with the Bank in the amounts to be determined by the Board of
Directors; and
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7.3. The Employee shall obtain, maintain and submit to the
Bank documentary evidence (such as receipts or paid bills) which states
sufficient information for each expenditure. The audit committee of the Bank?s
Board of Directors shall semi-annually review the Employee?s reimbursable
expenses.
8. Employee Benefits. During the employment term, Employee shall be
entitled to receive all other benefits of employment generally available to the
Bank's other full time salaried officers when and as he becomes eligible for
them and as the Bank establishes them, including group heath and life insurance
benefits.
9. Vacations. Commencing with the 1999 calendar year, Employee shall be
entitled to twenty (20) days of paid vacation in each full calendar year during
the term of this Agreement and an appropriate pro rata portion thereof for any
partial calendar year. Employee may be absent from his employment for vacation
only at such time as the Bank's Board of Directors shall determine from time to
time. In the event that Employee is unable for any reason to take the total
amount of vacation time authorized herein during any calendar year, he shall be
deemed to have waived any entitlement to vacation for that time.
10. Automobile. The Bank shall, in its sole discretion, elect either of
the following options, provided that it may change its election with reasonable
notice to Employee:
(i) The Bank will provide Employee with an
automobile, to be approved by the Bank's Board of Directors prior to its
purchase, to use in the performance of his duties on behalf of the Bank during
the term of this Employment Agreement. In addition, the Bank will provide
maintenance and insurance on the automobile and will reimburse Employee for any
operating costs expended on the Bank's behalf; or
(ii) the Bank will pay to Employee an automobile
allowance in the amount of seven hundred fifty dollars ($750.00) per month for
the purpose of acquisition or lease of an
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automobile of Employee's choice, including all insurance and maintenance costs
associated with such automobile's operation. In addition, the Bank will pay for
the Employees mileage in the performance of his duties on behalf of the Bank, on
a per mile basis at such rate as the Bank may from time to time determine.
11. Termination.
11.1. Employee may terminate this Agreement by giving the Bank
not less then six (6) months prior written notice of resignation. Employee shall
be entitled to no further compensation from the Bank after the effective date of
his resignation.
11.2. The Bank may terminate this Agreement at any time,
subject to the provisions of subparagraph 11.3 of this paragraph, with or
without cause.
11.3. Subject to the provisions of paragraph 12 of this
Agreement, in the event that the Bank terminates this Agreement without cause,
Employee shall be paid severance pay equal to six (6) months base salary as
specified in paragraph 5 or severance pay equal to the remainder of his base
salary for the remaining term of this Agreement if the remaining term of this
Agreement is less than six (6) months provided, however, that if the Bank, or
any successor to the business of the Bank, terminates this Agreement without
cause within two years following a Business Combination or effective change in
control (as those terms are defined in paragraph 12.1 of this Agreement) then
such termination shall be subject to the payment of severance pay as provided in
paragraph 12.1 of this Agreement. Such severance pay shall be paid in the manner
described in paragraph 12.2 hereof.
11.4. In the event the Bank terminates this Agreement for
cause, Employee shall be entitled to no severance pay and no further
compensation whatsoever under this Agreement beyond the effective date of such
termination. "Cause" shall include but not be limited to, any material act of
dishonesty, disclosure of confidential information, gross carelessness or
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misconduct, inadequate or improper performance or unjustifiable neglect of
duties under this Agreement, any act which in any way has a direct, substantial,
and adverse affect on the Bank's reputation or financial condition, or
termination of this Agreement pursuant to order of any government regulatory
agency.
11.5. If, during the term of this Agreement, Employee becomes
disabled, this Agreement may be then terminated subject to the Bank?s obligation
to continue to pay Employee as hereinafter provided in this subparagraph 11.5.
For purposes of this paragraph, Employee shall be considered ?disabled? if he is
determined to be disabled in accordance with the terms of any disability
insurance policy maintained by the Bank for Employee at the time of the onset of
the disability and Employee is disabled for a period of sixty (60) consecutive
days. In the absence of any such policy, Employee shall be considered "disabled"
if he is unable to perform substantially all of his duties under this Agreement
because of illness, injury, or physical or mental incapacity for a period of
sixty (60) consecutive days. For the first sixty (60) days of Employee?s
disability the Bank shall continue to pay Employee at a rate commensurate with
Employee?s then annual salary. For the period after the first sixty (60) days of
Employee?s disability, the Bank shall continue to pay Employee at a rate
commensurate with the benefit Employee will receive under any disability
insurance policy maintained by the Bank for a period of one hundred twenty (120)
days or until Employee?s benefits under any disability policy maintained by the
Bank for Employee commence, whichever period is shorter.
11.6. Any termination of the employment of the Employee under
this Agreement by the Bank shall be exercisable on behalf of the Bank by the
Board of Directors of the Bank.
12. Merger, Sale or Transfer of Bank Assets, Change in Control.
12.1. Disposition of Agreement. If, during the term of this
Agreement, there occurs a Business Combination (as that term is defined in
Article VIII of the Bank's articles of
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incorporation, the relevant provisions of which are incorporated herein by
reference as they exist on the date hereof, whether or not such article is in
effect at the time of such Business Combination) or an effective change in
control of the Bank resulting from privately negotiated purchase(s) of the
Bank's common stock or an offer to all shareholders of the Bank offering to
purchase or acquire by exchange their shares or any combination thereof, then
the Bank may, at its sole option, (1) assign this Agreement and all rights and
obligations under it to any business entity that succeeds to substantially all
of the Bank's business subject to the rights of Employee herein enumerated, (2)
continue this Agreement in full force and effect subject to the rights of
Employee herein enumerated or (3) terminate this Agreement effective on the date
of the Business Combination or effective change in control. In the event the
Bank terminates this Agreement Employee shall be paid severance pay in
accordance with paragraph 12.2 hereof. In the event the Bank assigns this
Agreement or continues this Agreement as more particularly set forth above,
Employee may, for a period of thirty (30) days following written notice of such
assignment or election to continue and at his sole option, (1) consent to said
assignment or election to continue or (2) elect to terminate this Agreement. In
the event Employee elects to terminate this Agreement, Employee shall be paid
severance pay in accordance with paragraph 12.2 hereof.
12.2. Severance Pay. The amount of severance pay to which
Employee shall be entitled under the circumstances specified in paragraph 12.1
hereof shall be as follows:
(i) In the event of a Business Combination during the
term of this Agreement which satisfies the conditions provided in paragraph C
(1) of Article VIII of the Bank's articles of incorporation (relating to
approval by a majority of Continuing Directors), Employee shall be paid
severance pay equal to one (1) year's base salary as specified in paragraph 5
hereof or severance pay equal to the remainder of his base salary for the
remaining term of this Agreement if the remaining term is less than one (1)
year.
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(ii) In the event of a Business Combination during
the term of this Agreement which does not satisfy the conditions provided in
paragraph C(1) of Article VIII of the Bank's articles of incorporation, or in
the event of an effective change of control of the Bank during the term of this
Agreement, Employee shall be paid severance pay equal to two (2) year's base
salary as specified in paragraph 5 hereof.
12.3. Method of Payment. In any event in which severance pay
is to be paid hereunder, it shall be paid in a single lump sum within thirty
(30) days of the Bank's or Employee's election to terminate this Agreement. Such
severance pay shall be subject to such withholding deductions as are required by
law.
12.4. Limitation on Severance Pay. In the event the severance
pay to be paid hereunder will, when aggregated with all other payments to
Employee which are contingent (either in amount or in timing) on a change of the
ownership or effective control of the Bank, or in the ownership of a substantial
portion of its assets, have an aggregate present value of three hundred percent
(300%) or more of the Employee's base amount, as defined in Internal Revenue
Code Section 280G, then, in such event his severance pay to be paid hereunder
shall be reduced by an amount sufficient to cause the aggregate of all payments
to Employee which are contingent on a change of ownership or effective control
of the Bank, or on the ownership of a substantial portion of its assets to be
equal to two hundred ninety-nine percent (299%) of the Employee's base amount.
12.5. An "effective change in control" of the Bank shall be
deemed to have occurred upon the acquisition of thirty percent (30%) or more of
the Bank's outstanding Common Stock by a single individual, a single entity or
an affiliated group of individuals and/or entities.
13. Employee's Termination. If it becomes known that this Agreement
will be terminated by Employee in accordance with its provisions, the Bank may,
in its sole discretion but
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subject to its other obligations under this Agreement, relieve Employee of his
duties under this Agreement, and assign Employee other reasonable duties and
responsibilities to be performed until the termination becomes effective.
14. Protection of Confidential Data. Employee acknowledges that the
customer lists, trade secrets, loan, financial and other proprietary information
of the Bank are valuable, special and unique assets of the Bank. Employee
acknowledges that in the course of his employment, Employee will have access to
confidential records and data pertaining to the Bank's customers and to the
relationship between these customers and the Bank. Such information is
considered secret and it is disclosed to Employee in confidence. During his
employment by the Bank and for two (2) years after termination of that
employment, Employee shall not directly or indirectly disclose or use any such
information, except as required in the course of his employment by the Bank. In
addition, during and for two (2) years after termination of his employment,
Employee shall not induce or attempt to induce any employee of the Bank to
discontinue representing the Bank for the purpose of representing any competitor
of the Bank. Employee acknowledges that the remedy at law for the breach of this
covenant is inadequate and that the Bank, in addition to any other relief
available to it, shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damage.
15. Miscellaneous Provisions.
15.1 Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or 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
arbitrators, one to be chosen by each party at will, and the third arbitrator to
be selected by the two arbitrators so chosen. Each party shall pay the fees of
the arbitrator it selects and of their
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own attorneys, and the expenses of their witnesses, the fees of the third
arbitrator, and all other fees and costs, shall be borne equally by the parties.
Employee is obligated under this Agreement to protect the confidential
information of the Bank. The breach of Employee?s obligation to protect the
confidential information of the Bank cannot be reasonably or adequately
compensated in damages in an action at law. Accordingly, in addition to other
remedies provided by law or this Agreement and notwithstanding the foregoing
mandatory arbitration provisions, the Bank shall have right during or after the
term of this Agreement to obtain injunctive relief against the breach of this
contract by Employee. The prevailing party in any action for injunctive relief
shall be entitled to recover reasonable attorneys? fees and costs.
15.2. Integration. This Agreement contains the entire
agreement between the parties and supersedes all prior oral and written
agreements, understandings, commitments, and practices between the parties,
including all prior employment and consulting agreements, whether or not fully
performed by Employee before the date of this Agreement. No amendments to this
Agreement may be made except by a writing signed by both parties.
15.3. Notices. Any notice to the Bank required or permitted
under this Agreement shall be given in writing to the Bank, either by personal
service or by registered or certified mail, postage prepaid, addressed to the
Chairman of the Board of Directors of the Bank at his then principal place of
business. Any such notice to Employee shall be given in a like manner and, if
mailed, shall be addressed to Employee at his home address then shown in the
Bank's files. For the purpose of determining compliance with any time limit in
this Agreement, a notice shall be deemed to have been duly given (a) on the date
of service, if served personally on the party to whom notice is to be given, or
(b) on the second business day after mailing, if mailed to the party to whom the
notice is to be given in the manner provided in this section.
15.4. Assignment. Except as hereinabove expressly provided,
this Agreement
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may not be assigned by either party without the prior written consent of the
other party.
15.5. Severability. If any provision of this Agreement is held
invalid or unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect. If any provision is held unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.
15.6. Effect of Headings. The subject headings of the
paragraphs and subparagraphs of this Agreement are included for purposes of
convenience only, and shall not effect the construction or interpretation of any
of its provisions.
15.7. Parties in Interest. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and,
subject to the provisions of paragraph 12 hereof, their respective successors
and assigns, nor is anything in this Agreement intended to relieve or discharge
the obligation or liability of any third parties to any party to this Agreement,
nor shall any provision give any third persons any right of subrogation or
action over against any party to this Agreement.
15.8. Choice of Law. The formation, construction, and
performance of this Agreement shall be construed in accordance with the laws of
the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE BANK:
The Vintage Bank
By:
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Xxxxxx X. Xxxxxx, Chairman of the Board
EMPLOYEE:
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Xxxxx X. Xxxxxxxx
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