REDDING BANK OF COMMERCE CHANGE IN CONTROL AGREEMENT FOR RANDY ESLICK
Exhibit 99.2
THIS CHANGE IN CONTROL AGREEMENT (the “Agreement”) is made
and entered into effective December 20, 2005, by and between REDDING BANK OF
COMMERCE, a California corporation (the “Bank”), and XXXXX XXXXXX (the
“Executive”).
INTRODUCTION
The Bank, desiring to encourage the Executive to remain as an employee, is
desirous of providing benefits to the Executive as are specifically set forth in this
Change In Control Agreement. The Bank will pay such benefits from its general
assets.
Article 1
Definitions
Definitions
1. Definitions: Whenever used in this Agreement, the following words
and phrases shall have the meanings specified hereinafter:
1.1 “Change In Control” means a merger or a consolidation where
either Redding Bank of Commerce or its parent Bank of Commerce Holdings (the
“Bank”) is not the surviving entity, or in the event of a transfer of all or substantially
all of the assets of the Bank, or in the event of a change in control whereby any one
person or entity acquires or beneficially owns more than fifty percent (50%) of the
Bank’s outstanding capital stock or whereby upon any merger, consolidation, transfer
or sale, the Board of Directors of Bank is not controlled by individuals who, prior to
such merger, consolidation, transfer or sale, were members of the Board of Directors
of Bank.
1.2 “Early Termination” means the Termination of Employment
of the Executive before Normal Retirement Age and within six (6) months following
a Change In Control.
1.3 “Early Termination Date” means the month, day and year in
which Early Termination occurs.
1.4 “Executive Beneficiary” means the beneficiary designated by
Executive pursuant to Article 3.1.
1.5 “Diminution in Salary or Job Duties” means that following a
Change In Control the Executive within twelve (12) months of the Change In Control
has the Executive’s salary diminished or the Executive’s job duties are materially
diminished.
1.6 “Termination for Cause” As defined in Article 5.
Article 2
Change of Control Benefits
Change of Control Benefits
2.1 Upon a Change In Control and in the event of an Early Termination or
Diminution in Salary or Job Duties, the Bank shall pay to the Executive the benefits
described in this Section 2.1 as follows:
2.1.1 Amount of Benefit. The benefits to be received by the
Executive shall be that dollar amount equal to one (1) year’s salary at that salary rate
being paid to Executive at the time of the Change In Control together with an amount
equal to one (1) year’s profit sharing, with the amount of such profit sharing payment
to be that amount which is the average profit sharing received by the executive for the
prior three (3) years.
Executive shall also receive, at the Bank’s expense, a
continuation of health benefits then being provided to Executive for a period of one
(1) year. The benefits set forth in this Article 2.1.1 are hereinafter referred
to as the “2.1.1 Benefits.”
9
2.1.2 Payment of Benefits. The Bank shall pay the 2.1.1 Benefits to
the Executive in twelve (12) equal monthly installments payable on the first day of
each month commencing with the month following that month in which the Executive
becomes entitled to receive the 2.1.1 Benefits.
2.1.3 Excess Parachute Payment. Notwithstanding any provision
contained in this Change In Control Agreement to the contrary, the Bank shall not pay
any benefit under this Agreement to the extent such benefit would create an excise tax
under the excess parachute rules of Section 280(g) of the Internal Revenue Code.
Article 3
Benefits on Termination Without Cause
Benefits on Termination Without Cause
3.1 In the event that Executive is terminated by the Bank not in the event
of an Early Termination and not as a Termination for Cause, the Bank shall pay to
Executive the benefit described in this Section 3.1 as follows:
3.1.1 Amount of Benefit. The benefits to be received by the
Executive shall be that dollar amount equal to six (6) month’s salary at that salary rate
being paid to Executive at the time of the termination, together with an amount equal
to one-half (1/2) year’s profit sharing with the amount of such profit sharing payment
to be that amount which is the average profit sharing received by the Executive for
the prior three (3) years.
Executive shall also receive, at the Bank’s expense, a
continuation of health benefits then being provided to Executive for a period of six
(6) months. The benefits set forth in this Article 3.1.1 are hereinafter referred to as
the “3.1.1 Benefits.”
3.1.2 Payment of Benefits. The Bank shall pay the 3.1.1 Benefits to
the Executive in six (6) equal monthly installments payable on the first day of each
month commencing with the month following that month in which the Executive
becomes entitled to receive the 3.1.1 Benefits.
3.1.3 Excess Parachute Payment. Notwithstanding any provision
contained in this Change In Control Agreement to the contrary, the Bank shall not pay
any benefit under this Agreement to the extent such benefit would create an excise tax
under the excess parachute rules of Section 280(g) of the Internal Revenue Code.
Article 4
Beneficiaries
Beneficiaries
4.1 Beneficiary Designations. In the event that the Executive shall die
before receiving the entire 2.1.1 or 3.1.1 Benefits, the remainder of the 2.1.1 or 3.1.1
Benefits shall be paid to the Executive Beneficiary. Such payment shall continue as
provided in Section 2.1.2 hereof until the full 2.1.1 or 3.1.1 Benefits have been paid
to the Executive Beneficiary.
The Executive shall designate a beneficiary (“Executive Beneficiary”)
by filing a written beneficiary designation with the Bank. The Executive may revoke
or modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and received by the
Bank during the Executive’s lifetime.
The Executive’s beneficiary designation shall be deemed automatically
revoked if the beneficiary predeceases the Executive, or if the Executive names a
spouse as beneficiary and the marriage is subsequently dissolved. If the executive
dies without a valid beneficiary, all payments which would have been paid to
Executive Beneficiary shall be made to the Executive’s estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of his or
her property, the Bank may pay the benefit to the guardian, legal representative or
person having the care or custody of such minor, incapacitated person or incapable
person. The Bank may require proof of incompetence, minority or guardianship as
it may deem appropriate prior to distribution of the benefit. Such distribution shall
completely discharge the Bank from all liability with respect to such benefit.
10
Article 5
General Limitations
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay a benefit under this Agreement if
the Bank or its successor following a Change of Control terminates the Executive’s
employment for:
(a) Habitual intemperance or drug addiction or abuse;
(b) Commission of a felony, or acts involving moral turpitude;
(c) Acts which cause detrimental publicity for the Bank;
(d) Habitual neglect of duty, willful or gross negligence in carrying
out the activities for which employed, including negligence or neglect in carrying out
the directions of the Board of Directors, or willful breach of the obligations of
Executive to the Bank, including persistent, malfeasance, misfeasance or nonfeasance
in connection with the performance of Executive’s duties.
Article 6
Claims and Review Procedures
Claims and Review Procedures
6.1 Claims Procedure. The Bank shall notify any person or entity that
makes a claim for the Benefit under this Agreement (the “Claimant’) in writing,
within ninety (90) days of Claimant’s written application for benefits, of his or her
eligibility or non-eligibility for the Benefit under this Agreement. If the Bank
determines that the Claimant is not eligible to receive the Benefit, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the provisions
of this Agreement on which the denial is based, (3) a description of any additional
information or material necessary for the Claimant to perfect his or her claim, and a
description of why it is needed, (4) an explanation of this Agreement’s claims review
procedure and other appropriate information as to the steps to be taken if the Claimant
wishes to have the claim reviewed, and (5) a time within which review must be
requested. If the Bank determines that there are special circumstances requiring
additional time to make a decision, the Bank shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety (90) days.
6.2 The Review Procedure. If the Claimant is determined by the Bank
not to be eligible for Benefit, or if the Claimant believes that he or she is entitled to
greater or different Benefit, the Claimant shall have the opportunity to have such
claim reviewed by the Bank by filing a petition for review with the Bank within sixty
(60) days after receipt of the notice issued by the Bank. Said petition shall state the
specific reasons which the Claimant believes entitle him or her to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the Bank of the
petition, the Bank shall afford the Claimant (and counsel, if any) an opportunity to
present his or her position to the Bank verbally or in writing, and the Claimant (or
counsel) shall have the right to review the pertinent documents. The Bank shall notify
the Claimant of its decision in writing within the sixty (60) day period, stating the
basis of its decision, written in a manner calculated to be understood by the Claimant
and the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty (60) day period is not sufficient, the
decision may be deferred for up to another sixty (60) days at the election of the Bank,
but notice of this deferral shall be given to the Claimant. In the event that a Claimant
or the Bank disagree with results of this review procedure their disagreement shall be
resolved pursuant to Article 6 hereof.
11
Article 7
Negotiation, Mediation and Arbitration
Negotiation, Mediation and Arbitration
7.1 Negotiation and Mediation. The parties will attempt in good faith
to resolve promptly any dispute, controversy, or claim arising out of or relating to this
Agreement or any claimed breach thereof not resolved by the Claims and Review
Procedures of Article 5 of this Agreement, by direct negotiation between principals
of the parties who have authority to settle the controversy. To facilitate such
negotiations, it is agreed that a disputing party shall give the other party written notice
of the dispute providing reasonable particularity with respect to all issues deemed to
be controverted or disputed. Within ten (10) days after such notice is given, the
principals of the parties shall meet at a mutually acceptable time and place, and
thereafter as often as those individuals reasonably deem necessary to exchange
relevant information and attempt to resolve all disputes.
If the disputes have not been resolved by negotiation within thirty (30)
days after the disputing party gives notice, or if the party receiving notice declines to
meet, either party may initiate mediation of the controversy, claim or dispute in
accordance with the following mediation provisions. Upon failure of the negotiations
as set forth above, the parties to this contract agree to mediate any dispute,
controversy or claim arising out of this Agreement prior to resorting to arbitration as
hereinafter provided. Mediation is a process in which parties attempt to resolve a
dispute by submitting it to an impartial, neutral mediator who is authorized to
facilitate the resolution of the dispute, but who is not empowered to impose a
settlement on the parties. The parties shall attempt to mutually agree upon an
impartial mediator, which mediator shall be appointed jointly and compensated
equally by the parties. In the event the parties are unable to agree on an impartial
mediator, then and in that event each party shall submit to the other a list with five (5)
names of attorneys or retired judges who practice in Northern California, and who
have no ongoing professional or business relationship with either of the parties. From
the lists, the parties shall alternately, beginning with the Bank, cross unacceptable
names from the list until such time as two (2) potential mediators remain. The
potential remaining mediators shall then be contacted to determine if they are
available and willing to act as mediator. In the event that both are willing and able
to act as mediator, the mediator shall be chosen alphabetically, with the mediator’s
last name serving as the alphabetical basis for choice. Should none of the original list
of mediators be available, new lists shall be prepared and the process again
undertaken.
7.2 Arbitration. Following mediation or in the event that for any reason
no mediation has been held, any and all remaining disputes, controversies or claims
must be resolved by binding arbitration as hereinafter set forth.
If a party commences an arbitration based on a dispute or claim as to
which this section applies, without first attempting to resolve the matter through
mediation as above provided, then and in that event, such party shall not be entitled
to recover attorney’s fees, costs or expert fees, even if they would otherwise be
available to that party in any such arbitration.
Executive and Bank agree that any dispute, controversy or claim, in law
or equity, arising between themselves out of this Salary Continuation Agreement or
the employment or termination of Executive which is not settled through mediation
must be decided by neutral binding arbitration and not by court action, except as
provided by California Law for Judicial Review of Arbitration Proceedings.
Arbitration shall be conducted under and pursuant to the provisions of
California Code of Civil Procedure § 1280, et seq., including the provisions of
§ 1283.05, as are in effect at the time of the arbitration, and judgment may be entered
on the award as therein provided.
If any party refuses or neglects to appear at or participate in arbitration
after reasonable notice, the arbitrator may decide the controversy in accordance with
whatever evidence is presented by the party or parties who do participate. The
arbitrator may award any remedy that is just and equitable in the arbitrator’s opinion.
12
The arbitrator shall award to the prevailing party or parties such sums as are proper
to compensate for the time, expense, and trouble of arbitration, including arbitration
fees, attorney fees and costs, and expert fees.
Except as awarded by the arbitrator as hereinabove set forth, all fees to
the arbitrator shall be paid in equal shares by the parties to the arbitration.
Article 8
Amendments, Termination and Notice
Amendments, Termination and Notice
This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Executive. Notwithstanding the preceding, the Bank may
amend or terminate this Agreement at any time if, pursuant to legislative, judicial or
regulatory action, continuation of this Agreement would: (i) cause benefits to be
taxable to the Executive prior to actual receipt; or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Bank (other than the
financial impact of paying any provided benefits).
In the event that Executive, for any reason, voluntarily terminates his or her
employment with the Bank, Executive agrees that he or she shall provide not less than
sixty (60) days prior written notification of such termination to Bank.
Article 9
Miscellaneous
Miscellaneous
9.1 Binding Effect. This Agreement shall bind the Executive and the
Bank, and their beneficiaries, survivors, executors, successors, administrators and
transferees.
9.2 No Guarantee of Employment. This Agreement is not an
employment policy or contract. It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the Bank’s right to discharge the
Executive. It also does not require the Executive to remain an employee nor interfere
with the Executive’s right to terminate employment at any time.
9.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
9.4 Reorganization. The Bank shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to another
company, firm, or person unless such succeeding or continuing company, firm, or
person agrees to assume and discharge the obligations of the Bank under this
Agreement or unless any such activity would constitute a Change of Control. Upon
the occurrence of such event, the term “Bank” as used in this Agreement shall be
deemed to refer to the successor or survivor company.
9.5 Tax Withholding. The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
9.6 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of California, except to the extent preempted by the laws of the
United States of America.
9.7 Unfunded Arrangement. The Executive and the Executive
Beneficiary are general unsecured creditors of the Bank for the payment of benefits
under this Agreement. The benefits represent the mere promise by the Bank to pay
such benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive’s life is a general asset of
the Bank to which the Executive and Executive Beneficiary have no preferred or
secured claim.
9.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue this Agreement other than those specifically set
forth herein.
9.9 Administration. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Establishing and revising the method of accounting for the
13
Agreement;
(b) Maintaining a record of benefit payments; and
(c) Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
9.10 Named Fiduciary. The Bank shall be the named fiduciary and plan
administrator under this Agreement. It may delegate to others certain aspects of the
management and operational responsibilities including the employment of advisors
and the delegation of ministerial duties to qualified individuals.
9.11 Attorney’s Fees and Costs. If any action at law or in equity,
including arbitration, is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys’ fees, costs, and expert
witness fees, in addition to any other relief to which that party may be entitled.
///
///
///
///
///
IN WITNESS WHEREOF, the Executive and the Bank have signed this Agreement.
| EXECUTIVE: | BANK: BANK OF COMMERCE HOLDINGS |
|||||
| XXXXX XXXXXX | By: | |||||
| XXXXX X. XXXXXXXX, XX. Chairman By |
||||||
| XXXXX X. XXXXX, Secretary | ||||||
| REDDING BANK OF COMMERCE By: |
||||||
| XXXXX X. XXXXXXXX, XX. Chairman By: |
||||||
| X.X. XXXXX, Secretary | ||||||
14
