Exhibit 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
20th day of March, 1998, between Redlands Centennial Bank (hereinafter
referred to as "Employer"), and Xxx X. Xxxxx (hereinafter referred to as
"Executive").
WITNESSETH:
WHEREAS, Employer is desirous of employing Executive in the capacity
hereinafter stated and Executive is desirous of continuing in the Employ of
Employer in such capacity, for the period and on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
and conditions herein contained, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. EMPLOYMENT
Employer hereby employs Executive as its Executive Vice President and Chief
Credit Officer, and Executive accepts the duties that are customarily
performed by the Executive Vice President and Chief Credit Officer of a
state-chartered banking institution and accepts all other duties described
herein and agrees to discharge the same faithfully and to the best of his
ability and consistent with past performances and the highest and best
standards of the banking industry, in accordance with the policies of
Employer's Board of Directors as established, and in compliance with all laws
and Employer's Articles of Incorporation, Bylaws, Policies and Procedures.
Executive shall devote his business time and attention to the business and
affairs of Employer for which he is employed and shall perform the duties
thereof to the best of his ability. Except as permitted by the prior written
consent of Employee's Board of Directors, Executive shall not directly or
indirectly render any services of a business, commercial or professional
nature to any other person, firm or corporation, whether for compensation or
otherwise, which are in conflict with Employer's interests. Executive shall
perform such other duties as shall be from time to time prescribed by
Employer's President and Chief Executive Officer.
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Executive shall have such responsibility and duties and such authority to
transact business on behalf of Employer, as are customarily incident to the
office of Executive Vice President and Chief Credit Officer of a
state-chartered banking institution.
2. TERM
Employer hereby employs Executive, and Executive hereby accept employment
with Employer for the period of two (2) years (the "Term"), commencing April
1, 1998, with such Term being subject to prior termination as hereinafter
provided. Where used herein, "Term" shall refer to the entire period of
employment of Executive by Employer, whether for the period provided above,
or whether terminated earlier as hereinafter provided, or extended by mutual
agreement in writing by Employer and Executive.
Such Term shall be automatically extended for additional periods of one (1)
year unless Executive or Employer shall give written notice not less than
three months and not more than six months prior to the expiration of the
Term, of intention not to extend the Term.
3. COMPENSATION
In consideration for all services to be rendered by Executive to Employer,
Employer agrees to pay Executive a starting base salary of Ninety Thousand
Dollars ($90,000) per year. Employer's President and Chief Executive Officer
shall in his discretion determine any increases in Executive's base salary
after the first anniversary of the Term. Executive's salary shall be paid
semi-monthly. Employer shall deduct therefrom all taxes which may be required
to be deducted or withheld under any provision of the law (including, but not
limited to, social security payments and income tax withholding) now in
effect or which may become effective anytime during the term of this
Agreement.
Executive shall be entitled to participate in any and all other employee
benefits and plans that may be developed and adopted by Employer and in its
normal course of business, subject to the terms and conditions of such
agreements provided that nothing contained herein shall obligate Employer to
commence, develop or warranty any employee benefits or plans.
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4. AUTOMOBILE AND REIMBURSEMENT
Employer agrees to provide Executive with an automobile allowance of $500.00
per month.
Employer agrees to reimburse Executive for all ordinary and necessary expenses
incurred by Executive on behalf of Employer, including entertainment, meals and
travel expenses. Any costs incurred by Executive for conventions, meetings and
seminars will be reimbursed as well as special social entertainment expenses,
provided Employer's Board of Directors approves such.
5. INSURANCE
Employer agrees to provide Executive with health and life insurance benefits
which are now or may hereinafter be in effect for all other full-time employees.
Employer shall also provide life insurance for executive with a beneficiary
defined by Executive. Provision of the insurance will commence on the Effective
Date and is subject to Executive's passing the necessary physical examinations
for qualification, if any.
6. VACATION
Executive shall be entitled to accrue up to four (4) weeks vacation during each
year of the Term with at least two (2) weeks to be taken in a consecutive
period. Vacation benefits shall not accrue above four weeks at any time.
Employer's Board of Directors, in its discretion, may waive the provision with
respect to unused vacation time.
7. TERMINATION
Employer shall have the right to terminate this Agreement for any of the
following reasons by service written notice upon Executive:
(a) willful breach of, habitual neglect of, willful failure to perform,
or inability to perform, Executive's duties and obligations as
Executive Vice President and Chief Credit Officer;
(b) illegal conduct, constituting a crime involving moral turpitude,
conviction of a felony, or any conduct detrimental to the interests
of Employer;
(c) physical or mental disability rendering Executive incapable of
performing his duties for a consecutive period of 180 days, or by
death. In the event of such disability, Employer will provide
salary continuation for 180 days, less accrued sick leave. Accrued
sick leave is to be utilized until exhausted PRIOR to salary
continuation provided herein; or
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(d) determination by Employer's Board of Directors that the continued
employment of Executive is not desired for any reason or no reason at
all, solely within the discretion of the Employer's Board of
Directors.
In the event this Agreement is terminated for any of the reasons specified in
the paragraphs (a), (b), or (c) above, Executive will be paid four weeks'
salary calculated as of the date of Executive's termination, plus any pay in
lieu of vacation accrued to, but not taken as of termination. Such
termination pay shall be considered to be in full and complete satisfaction
of any and all rights which Executive may enjoy under the terms of this
Agreement other than rights, if any, to exercise any of the stock options
vested prior to such termination. The insurance benefits provided herein
shall be extended at Employer's sole cost until the end of the month in which
Executive is terminated.
In the event this Agreement is terminated for any reason specified in paragraph
(d) above, Executive shall be entitled to termination pay in an amount equal to
six (6) months of Executive's then base annual salary. Such termination pay
shall be paid in one lump sum and shall be considered to be in full and
complete satisfaction of any and all rights which Executive may enjoy under the
terms of this Agreement including any pay in lieu of vacation accrued to, but
not taken as of the date of termination, other than rights, if any, to exercise
any of the stock options vested prior to such termination.
Where termination is pursuant to paragraph (d) above, the insurance benefits
provided here shall be extended at Employer's sole cost for the remainder of
the month and six (6) full months following the date of termination.
Executive shall give sixty (60) days prior notice, in writing, to Employer in
the event Executive resigns or voluntarily terminates employment. In the event
Executive resigns or voluntarily terminates employment to work for another
financial institution, such financial institution shall reimburse Employer for
any continuing expense incurred by Employer concerning Executive's employment.
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8. ACQUISITION OR DISSOLUTION OF EMPLOYER
This Employment Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Employer. Notwithstanding the foregoing, in the
event proceedings for liquidation of Employer commenced by regulatory
authorities, this Agreement and all rights and benefits hereunder shall
terminate. In the event of a Change of Ownership or Control occurs during the
employment of the Executive and if the Executive's position is either eliminated
or materially changed, the Executive shall receive an amount equal to one (1)
years of the then current annual salary in full and complete satisfaction of
any and all rights which Executive may enjoy hereunder other than the right, if
any, to exercise any of the stock options vested prior to such termination. The
Executive may choose to receive said amount in a lump sum or in quarterly
payments. Change of Ownership shall have occurred on the date of (i) a merger,
where the Bank is not the surviving corporation; (ii) a consolidation, where
the Bank is not the surviving corporation; (iii) a transfer to another entity
of all or substantially all of the assets of the Bank; (iv) an acquisition by a
financial institution, company, individual or individuals acting as a group, of
more than fifty percent (50%) of the then outstanding shares of the Bank are
held by a person or group of persons (whether or not acting in concert) not the
holder of more than fifty percent (50%) of the shares on the Commencement Date
of this Agreement; or (v) during any period of twenty-four consecutive months,
individuals who at the beginning of such period where members of the Board of
Directors of the Bank (the "Incumbent Board") shall cease to constitute a
majority of the Board of Directors of the Bank or any successor to the Bank,
provided that any person becoming a director subsequent to the beginning of
such period whose election or nomination for election was approved by a vote of
at least seventy-five percent (75%) of all the directors compromising the
Incumbent Board shall, for the purposes hereof, considered as though such a
person were a member of the Incumbent Board.
9. INDEMNIFICATION
To the extent permitted by law, Employer shall indemnify Executive if he was or
is a party or is threatened to be made a party in any action brought by a third
party against Executive (whether or not Employer is joined as a party defendant)
against expenses, judgments, fines, settlements and other amounts actual and
reasonably incurred in connection with said action if Executive acted in good
faith and in a manner Executive reasonably believed to be in the best interest
of Employer (and with respect to a criminal proceeding if Executive had no
reasonable cause to
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believe his conduct was unlawful), provided that the alleged conduct of
Executive arose out of and was within the course and scope of his employment
as an officer or employee of Employer.
10. TRADE SECRETS
During the Term, Executive will have access to and become acquainted with
what Executive and Employer acknowledge as trade secrets, i.e., knowledge or
data concerning Employer, including its operations and business, and the
identity of customers and clients of Employer. Executive will not any time
disclose any trade secrets or propriety information, directly or indirectly,
or use them in any way, except as required by his duties and
responsibilities. Executive's obligation not to disclose the Employer's trade
secrets or propriety information to third parties continues after his
employment with the Employer ceases.
11. NONCOMPETITION
During the term of this Agreement, Executive will 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 business that is in
competition in any manner whatsoever with the business of Employer.
12. RETURN OF DOCUMENTS
Executive expressly agrees that all manuals, documents, files, reports,
studies, instruments or other materials used or developed by Executive during
the Term are solely the property of Employer, and Executive has no right,
title, or interest therein. Upon termination of this Agreement, Executive or
Executive's representatives shall promptly deliver possession of all said
property to Employer in good condition.
13. NOTICES
Any notice, request, demand, or other communication required or permitted
hereunder shall be deemed to be properly given when personally served in
writing, when deposited in the U.S. mail, postage prepaid, or when
communicated to a public telegraph company for transmittal, addressed as
follows:
TO BANK: Redlands Centennial Bank
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
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TO EXECUTIVE: Xxx X. Xxxxx
00000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Any party hereto may change its or his address for purposes of this Section
by giving notice in accordance herewith.
14. BENEFIT OF AGREEMENT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective executors, administrators, successors and assigns.
15. APPLICABLE LAW
This Agreement is made and entered into in the State of California, and the
laws of said State shall govern the validity and interpretation hereof, and
the performance of the parties hereto and their respective duties and
obligations hereunder.
16. CAPTIONS AND PARAGRAPH HEADINGS
Captions and paragraph headings used herein are for convenience only and are
not a part of this Agreement and shall not be used in construing it.
17. INVALID PROVISIONS
Should any provision of this Agreement for any reason be declared invalid,
void, or unenforceable by a court of competent jurisdiction, the validity and
binding effect of any remaining portions shall not be affected and the
remaining portions of this Agreement shall remain in full force and effect as
if this Agreement had been executed with said provision eliminated.
18. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and it supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Executive by Employer, except to
the extent that it is contemplated that Executive and Employer may enter into
a stock option agreement and/or salary continuation agreement. Each party to
this Agreement acknowledges that no 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 embodied herein, and that no other
agreement, statement, or promise not
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contained in this Agreement shall be valid or binding. This Agreement may not
be modified or amended by oral agreement, but only by an agreement in writing
signed by Employer and Executive.
19. CONFIDENTIALITY
This Agreement is to be held confidential. Willful breach of such
confidentiality by Executive will be subject to termination under the
provisions of 7(a) of this Agreement.
20. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled pursuant to an arbitration agreement to be
entered into by the parties, and in the event there is no arbitration
agreement, then in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may
be entered into any court having jurisdiction thereof.
21. LEGAL COSTS
If either Executive or Employer commences an action against the other arising
out of or in connection with this Agreement, the prevailing party shall be
entitled to have and recover from the losing party reasonable attorney's fees
and costs of suit.
IN WITNESS WHEREOF, the parties hereto have executed this amended Agreement
as of the day and year first written above.
REDLANDS CENTENNIAL BANK
By: /s/ Xxxxxxx X. Xxxxxxx
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XXX X. XXXXX
/s/ Xxx X. Xxxxx
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