EXHIBIT 10.22
SERVICE 1ST BANK
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (the "Agreement") is entered into
this 8th day of August, 2005_, by and between SERVICE 1ST BANK, a
state-chartered commercial bank located in Stockton, California (the "Bank"),
and XXXXXXX XXXXXXX (the "Executive").
The purpose of this Agreement is to provide specified benefits to the
Executive, a member of a select group of management or highly compensated
employees who contribute materially to the continued growth, development and
future business success of the Bank. This Agreement shall be unfunded for tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended from time to time. The Bank will distribute
the benefits from its general assets.
The Bank and the Executive agree as provided herein.
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
1.1 "Accrual Balance" means the liability that should be accrued by the
Bank, under Generally Accepted Accounting Principles ("GAAP"), for the
Bank's obligation to the Executive under this Agreement, by applying
Accounting Principles Board Opinion Number 12 ("APB 12") as amended by
Statement of Financial Accounting Standards Number 106 ("FAS 106") and
the Discount Rate. Any one of a variety of amortization methods may be
used to determine the Accrual Balance. However, once chosen, the method
must be consistently applied. The Accrual Balance shall be reported
annually by the Bank to the Executive.
1.2 "Beneficiary" means each designated person, or the estate of the
deceased Executive, entitled to benefits, if any, upon the death of the
Executive determined pursuant to Article 3.
1.3 "Beneficiary Designation Form" means the form established from time to
time by the Plan Administrator that the Executive completes, signs and
returns to the Plan Administrator to designate one or more
Beneficiaries.
1.4 "Change in Control" means the occurrence of any of the following events
with respect to the Bank:
(a) a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or in response to
any other form or report to the regulatory agencies or
governmental authorities having jurisdiction over the Bank or
Bancorp, or any stock exchange on which Bancorp's shares are
listed which requires the reporting of a change in control;
(b) any merger, consolidation or reorganization of the Bank or
Bancorp in which the Bank or Bancorp does not survive;
(c) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions)
of any assets of the Bank or Bancorp having an aggregate fair
market value of fifty percent (50%) of the total value of the
assets of the Bank or Bancorp, reflected in the most recent
balance sheet of the Bank or Bancorp;
(d) a transaction whereby any "person" (as such term is used in
the Exchange Act) or any individual, corporation, partnership,
trust or any other entity is or becomes the beneficial owner,
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directly or indirectly, of securities of the Bank or Bancorp
representing twenty-five percent (25%) or more of the combined
voting power of the Bank's or Bancorp's then outstanding
securities;
(e) a situation where, in any one-year period, individuals who at
the beginning of such period constitute the Board of Directors
of the Bank or Bancorp cease for any reason to constitute at
least a majority thereof, except in the cases of retirement,
disability or death and unless the election, or the nomination
for election by the Bank's or Bancorp's shareholder(s), of
each new director is approved by a vote of at least
three-quarters (3/4) of the directors then still in office who
were directors at the beginning of the period; or
(f) the shareholder(s) of the Bank or Bancorp approve the sale or
transfer of substantially all of the Bank's or Bancorp's
assets to parties that are not within a "controlled group of
corporations" (as that term is defined in section 1563 of the
Code) in which the Bank or Bancorp is a member.
Notwithstanding the foregoing or anything else contained
herein to the contrary, there shall not be a Change in Control for
purposes of this Agreement if the event which would otherwise come
within the meaning of the term Change in Control involves (i) an
Employee Stock Ownership Plan sponsored by Bancorp which plan is the
party that acquires "control" or is the principal participant in the
transaction constituting a "change in control," as described above, or
(ii) a reorganization in which the Bank is merged with and into another
wholly-owned bank subsidiary of Bancorp to consolidate operations under
the charter of such other bank subsidiary, or (iii) if the individuals
who constitute the directors of the Bank or Bancorp at the time a
specific transaction described in Section 1.2(b) or 1.2(f) is first
presented or disclosed to the Board of Directors of the Bank or Bancorp
will, according to the terms of the definitive agreement for the
transaction, constitute a majority of the members of the board of
directors of the resulting corporation or acquiring person immediately
after the transaction, then, before an event that would otherwise
constitute a Change in Control shall be deemed to have occurred, such
Board of Directors of the Bank or Bancorp may determine by majority
vote that the specific transaction does not constitute a Change in
Control under Section 1.2(b) or 1.2(f).
1.5 "Change in Control Benefit" means the benefit described in Section 2.4.
1.6 "Code" means the Internal Revenue Code of 1986, as amended.
1.7 "Disability" means the Executive's suffering a sickness, accident or
injury which has been determined by the insurance carrier of any
individual or group disability insurance policy covering the Executive,
or by the Social Security Administration, to be a disability rendering
the Executive totally and permanently disabled. The Executive must
submit proof to the Plan Administrator of the insurance carrier's or
Social Security Administration's determination upon the request of the
Plan Administrator.
1.8 "Disability Benefit" means the benefit described in Section 2.3.
1.9 "Discount Rate" means the rate used by the Plan Administrator for
determining the Accrual Balance. The rate is based on the yield on a
20-year corporate bond rated Aa by Moody's, rounded to the nearest
1/4%. The initial Discount Rate is seven percent (7%). However, the
Plan Administrator, in its sole discretion, may adjust the Discount
Rate to maintain the rate within reasonable standards according to GAAP
and/or applicable bank regulatory.
1.10 "Early Retirement" means the Executive's Early Voluntary Separation
from Service after attaining Early Retirement Age.
1.11 "Early Retirement Age" means the Executive completing fifteen (15)
Years of Service.
1.12 "Early Termination" means the Separation from Service before Normal
Retirement Age for reasons other than death, Disability, Termination
for Cause or within twelve (12) months following a Change in Control.
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1.13 "Early Termination Benefit" means the benefit described in Section 2.2.
1.14 "Effective Date" means June 1, 2005.
1.15 "Normal Retirement Age" means the Executive attaining age sixty-five
(65).
1.16 "Normal Retirement Benefit" means the benefit described in Section 2.1.
1.17 "Normal Retirement Date" means the later of the Normal Retirement Age
or Separation from Service.
1.18 "Plan Administrator" means the plan administrator described in Article
7.
1.19 "Plan Year" means each twelve-month period commencing on January 1 and
ending on December 31 of each year. The initial Plan Year shall
commence on the Effective Date of this Plan and end on the following
December 31.
1.20 "Schedule A" means the schedule attached to this Agreement and made a
part hereof. Schedule A shall be updated upon a change in any of the
benefits under Articles 2.
1.21 "Separation from Service" means that the Executive's service, as an
employee and independent contractor, to the Bank and any member of a
controlled group as defined in Section 414 of the Code to which the
Bank belongs, has terminated for any reason, other than by reason of a
leave of absence approved by the Bank or the death of the Executive.
1.22 "Termination for Cause" has that meaning set forth in Article 4.
1.24 "Years of Service" "means the twelve consecutive month period beginning
on an Executive's date of hire and any twelve (12) month anniversary
thereof, during the entirety of which time the Executive is an employee
of the Bank. Service with a subsidiary or other entity controlled by
the Bank before the time such entity became a subsidiary or under such
control shall not be considered "credited service" unless the Plan
Administrator specifically agrees to credit such service. In addition,
the Plan Administrator in its discretion may also grant additional
Years of Service in such circumstances where it deems such additional
service appropriate.
Article 2
Benefits During Lifetime
2.1 Normal Retirement Benefit. Upon Separation from Service on or after the
Normal Retirement Age for reasons other than death, the Bank shall
distribute to the Executive the benefit described in this Section 2.1
in lieu of any other benefit under this Article.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1
is Sixty-Four Thousand Dollars ($64,000).
2.1.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Executive in twelve (12) equal monthly
installments commencing on the first day of the month
following the Executive's Normal Retirement Date. The annual
benefit shall be paid to the Executive for fifteen (15) years.
2.2 Early Termination Benefit. Upon Early Termination, the Bank shall
distribute to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Article.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
Accrual Balance as of the end of the month prior to the
Separation from Service.
2.2.2 Distribution of Benefit. The Bank shall distribute the benefit
to the Executive in a lump sum within thirty (30) days
following the Separation from Service.
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2.3 Disability Benefit. Upon Separation from Service due to Disability
prior to Normal Retirement Age, the Bank shall distribute to the
Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Accrual Balance as of the end of the month prior to Separation
from Service due to Disability.
2.3.2 Distribution of Benefit. The Bank shall distribute the benefit
to the Executive in a lump sum within thirty (30) days
following Separation from Service due to Disability.
2.4 Change in Control Benefit. Upon a Change in Control, followed within
twelve (12) months by the Executive's Separation from Service, the Bank
shall distribute to the Executive the benefit described in this Section
2.4 in lieu of any other benefit under this Article.
2.4.1 Amount of Benefit. The annual benefit under this Section 2.4
is the Normal Retirement Benefit amount set forth in Section
2.1.
2.4.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Executive in twelve (12) equal monthly
installments commencing on the first of the month following
Normal Retirement Age. The annual benefit shall be paid to the
Executive for fifteen (15) years.
2.4.3 Parachute Payments. Notwithstanding any provision of this
Agreement to the contrary, to the extent any distribution(s),
if made, under this Section 2.4 would be treated as an "excess
parachute payment" under Section 280G of the Code, the Bank
shall reduce or delay the distribution(s) to the extent it
would not be an excess parachute payment.
2.5 Early Retirement Benefit. Upon Early Retirement, the Bank shall
distribute to the Executive the benefit described in this Section 2.5
in lieu of any other benefit under this Article.
2.5.1 Amount of Benefit. The benefit under this Section 2.5 is a
vested portion of the Normal Retirement Benefit as shown in
the following schedule:
--------------------------------- --------------------------
Plan Year Amount of Benefit
--------------------------------- --------------------------
Prior to 1/1/2017 0
--------------------------------- --------------------------
1/1/2017-12/31/2017 38,118
--------------------------------- --------------------------
1/1/2018-12/31/2018 43,350
--------------------------------- --------------------------
1/1/2019-12/31/2019 48,513
--------------------------------- --------------------------
1/1/2020-12/31/2020 53,675
--------------------------------- --------------------------
1/1/2021-12/31/2021 58,838
--------------------------------- --------------------------
1/1/2022-9/15/2022 64,000
--------------------------------- --------------------------
2.5.2 Distribution of Benefit. The Bank shall distribute the benefit
to the Executive in twelve (12) consecutive equal installments
commencing within thirty (30) days following the Executive's
Separation from Service. The annual benefit shall be
distributed to the Executive for fifteen (15) years.
2.6 Restriction on Timing of Distribution. Notwithstanding any provision of
this Agreement to the contrary, if the Executive is considered a
"specified employee" under Section 409A of the Code and regulations
thereunder, benefit distributions that qualify as a "separation from
service" under Section 409A of the Code and regulations thereunder may
not commence earlier than six (6) months after the date of such
separation from service.
Article 3
Beneficiaries
3.1 Beneficiary. The Executive shall have the right, at any time, to
designate a Beneficiary(ies) to receive any benefit distributions under
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this Agreement to a Beneficiary upon the death of the Executive. The
Beneficiary designated under this Agreement may be the same as or
different from the beneficiary designation under any other plan of the
Bank in which the Executive participates.
3.2 Beneficiary Designation: Change; Spousal Consent. The Executive shall
designate a Beneficiary by completing and signing the Beneficiary
Designation Form, and delivering it to the Plan Administrator or its
designated agent. If the Executive names someone other than his or her
spouse as a Beneficiary, a spousal consent, in the form designated by
the Plan Administrator, must be signed by the Executive's spouse and
returned to the Plan Administrator. 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. The Executive
shall have the right to change a Beneficiary by completing, signing and
otherwise complying with the terms of the Beneficiary Designation Form
and the Plan Administrator's rules and procedures, as in effect from
time to time. Upon the acceptance by the Plan Administrator of a new
Beneficiary Designation Form, all Beneficiary designations previously
filed shall be cancelled. The Plan Administrator shall be entitled to
rely on the last Beneficiary Designation Form filed by the Executive
and accepted by the Plan Administrator prior to the Executive's death.
3.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received, accepted and
acknowledged in writing by the Plan Administrator or its designated
agent.
3.4 No Beneficiary Designation. If the Executive dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease
the Executive, then the Executive's spouse shall be the designated
Beneficiary. If the Executive has no surviving spouse, the benefits
shall be made to the personal representative of the Executive's estate.
3.5 Facility of Distribution. If the Plan Administrator determines in its
discretion that a benefit is to be distributed to a minor, to a person
declared incompetent, or to a person incapable of handling the
disposition of that person's property, the Plan Administrator may
direct distribution of such benefit to the guardian, legal
representative or person having the care or custody of such minor,
incompetent person or incapable person. The Plan Administrator may
require proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Any distribution of a
benefit shall be a distribution for the account of the Executive and
the Executive's Beneficiary, as the case may be, and shall be a
complete discharge of any liability under the Agreement for such
distribution amount.
Article 4
General Limitations
4.1 Termination for Cause shall mean the occurrence of any one or more of
the following:
(a) the willful, intentional and material breach of duty by the
Executive in the course of his employment;
(b) the habitual and continued neglect by the Executive of his
employment duties and obligations under this Agreement;
(c) the Executive's willful and intentional violation of any State
of California or federal banking laws, or of the Bylaws,
rules, policies or resolutions of Bank or Bancorp and their
respective subsidiaries, or of the rules or regulations of the
Board of Governors of the Federal Reserve System, California
Department of Financial Institutions or the Federal Deposit
Insurance Corporation, or other regulatory agency or
governmental authority having jurisdiction over Bank or
Bancorp;
(d) the determination by a state or federal banking agency or
governmental authority having jurisdiction over Bank or
Bancorp that the Executive is not suitable to act in the
capacity for which he is employed by Bank;
(e) the Executive is convicted of any felony or a crime involving
moral turpitude or commits a fraudulent or dishonest act;
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(f) the Executive discloses without authority any secret or
confidential information concerning Bank, Bancorp or their
respective subsidiaries or takes any action which the Bank's
Board of Directors determines, in its sole discretion and
subject to good faith, fair dealing and reasonableness,
constitutes unfair competition with or induces any customer to
breach any contract with Bank, Bancorp or their respective
subsidiaries; or
(g) the Executive breaches the terms or provisions of this
Agreement.
4.2 Suicide or Misstatement. The Bank shall not distribute any benefit
under this Agreement if the Executive commits suicide within two years
after the Effective Date. In addition, the Bank shall not distribute
any benefit under this Agreement if the Executive has made any material
misstatement of fact, as determined solely by the applicable insurance
carrier, on any application for life insurance owned by the Bank on the
Executive's life.
Article 5
Claims And Review Procedures
5.1 Claims Procedure. An Executive or Beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be
paid shall make a claim for such benefits as follows:
5.1.1 Initiation - Written Claim. The claimant initiates a claim by
submitting to the Plan Administrator a written claim for the
benefits.
5.1.2 Timing of Plan Administrator Response. The Plan Administrator
shall respond to such claimant within 90 days after receiving
the claim. If the Plan Administrator determines that special
circumstances require additional time for processing the
claim, the Plan Administrator can extend the response period
by an additional 90 days by notifying the claimant in writing,
prior to the end of the initial 90-day period, that an
additional period is required. The notice of extension must
set forth the special circumstances and the date by which the
Plan Administrator expects to render its decision.
5.1.3 Notice of Decision. If the Plan Administrator denies part or
all of the claim, the Plan Administrator shall notify the
claimant in writing of such denial. The Plan Administrator
shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the
Agreement on which the denial is based;
(c) A description of any additional information or
material necessary for the claimant to perfect the
claim and an explanation of why it is needed;
(d) An explanation of the Agreement's review procedures
and the time limits applicable to such procedures;
and
(e) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a) following an
adverse benefit determination on review.
5.2 Review Procedure. If the Plan Administrator denies part or all of the
claim, the claimant shall have the opportunity for a full and fair
review by the Plan Administrator of the denial, as follows:
5.2.1 Initiation - Written Request. To initiate the review, the
claimant, within 60 days after receiving the Plan
Administrator's notice of denial, must file with the Plan
Administrator a written request for review.
5.2.2 Additional Submissions - Information Access. The claimant
shall then have the opportunity to submit written comments,
documents, records and other information relating to the
claim. The Plan Administrator shall also provide the claimant,
upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information
relevant (as defined in applicable ERISA regulations) to the
claimant's claim for benefits.
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5.2.3 Considerations on Review. In considering the review, the Plan
Administrator shall take into account all materials and
information the claimant submits relating to the claim,
without regard to whether such information was submitted or
considered in the initial benefit determination.
5.2.4 Timing of Plan Administrator Response. The Plan Administrator
shall respond in writing to such claimant within 60 days after
receiving the request for review. If the Plan Administrator
determines that special circumstances require additional time
for processing the claim, the Plan Administrator can extend
the response period by an additional 60 days by notifying the
claimant in writing, prior to the end of the initial 60-day
period, that an additional period is required. The notice of
extension must set forth the special circumstances and the
date by which the Plan Administrator expects to render its
decision.
5.2.5 Notice of Decision. The Plan Administrator shall notify the
claimant in writing of its decision on review. The Plan
Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification
shall set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the
Agreement on which the denial is based;
(c) A statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the claimant's claim for benefits;
and
(d) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
Article 6
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Executive. Provided, however, if the Bank's Board of
Directors determines that the Executive is no longer a member of a select group
of management or highly compensated employees, as that phrase applies to ERISA,
for reasons other than death, Disability or retirement, the Bank may amend or
terminate this Agreement. Upon such amendment or termination the Bank shall
distribute benefits to the Executive as if Early Termination occurred on the
date of such amendment or termination, regardless of whether Early Termination
actually occurs.
Article 7
Administration of Agreement
7.1 Plan Administrator Duties. This Agreement shall be administered by a
Plan Administrator which shall consist of the Board, or such committee
or person(s) as the Board shall appoint. The Executive may be a member
of the Plan Administrator. The Plan Administrator shall also have the
discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this
Agreement and (ii) decide or resolve any and all questions including
interpretations of this Agreement, as may arise in connection with the
Agreement.
7.2 Agents. In the administration of this Agreement, the Plan Administrator
may employ agents and delegate to them such administrative duties as it
sees fit, (including acting through a duly appointed representative),
and may from time to time consult with counsel who may be counsel to
the Bank.
7.3 Binding Effect of Decisions. The decision or action of the Plan
Administrator with respect to any question arising out of or in
connection with the administration, interpretation and application of
the Agreement and the rules and regulations promulgated hereunder shall
be final and conclusive and binding upon all persons having any
interest in the Agreement. No Executive or Beneficiary shall be deemed
to have any right, vested or nonvested, regarding the continued use of
any previously adopted assumptions, including but not limited to the
Discount Rate.
7.4 Indemnity of Plan Administrator. The Bank shall indemnify and hold
harmless the members of the Plan Administrator against any and all
claims, losses, damages, expenses or liabilities arising from any
action or failure to act with respect to this Agreement, except in the
case of willful misconduct by the Plan Administrator or any of its
members.
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7.5 Bank Information. To enable the Plan Administrator to perform its
functions, the Bank shall supply full and timely information to the
Plan Administrator on all matters relating to the date and
circumstances of the retirement, Disability, death, or Separation from
Service of the Executive, and such other pertinent information as the
Plan Administrator may reasonably require.
7.6 Annual Statement. The Plan Administrator shall provide to the
Executive, within one hundred twenty (120) days after the end of each
Plan Year, a statement setting forth the benefits distributable under
this Agreement.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the Bank,
and their beneficiaries, survivors, executors, successors,
administrators and transferees.
8.2 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.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Bank shall withhold any taxes that, in its
reasonable judgment, are required to be withheld from the benefits
provided under this Agreement. The Executive acknowledges that the
Bank's sole liability regarding taxes is to forward any amounts
withheld to the appropriate taxing authority(ies).
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of California, except to the extent
preempted by the laws of the United States of America.
8.6 Arbitration. All claims, disputes and other matters in question arising
out of or relating to this Agreement or the breach or interpretation
thereof, other than those matters which are to be determined by the
Bank in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual
agreement of the parties, of the Judicial Arbitration and Mediation
Services, Inc. ("JAMS"), in accordance with the rules and procedures of
JAMS then in effect. In the event JAMS is unable or unwilling to
conduct such arbitration, or has discontinued its business, the parties
agree that a representative member, selected by the mutual agreement of
the parties, of the American Arbitration Association ("AAA"), shall
conduct such binding arbitration in accordance with the rules and
procedures of the AAA then in effect. Notice of the demand for
arbitration shall be filed in writing with the other party to this
Agreement and with JAMS (or AAA, if necessary). In no event shall the
demand for arbitration be made after the date when institution of legal
or equitable proceedings based on such claim, dispute or other matter
in question would be barred by the applicable statute of limitations.
Any award rendered by JAMS or AAA shall be final and binding upon the
parties, and as applicable, their respective heirs, beneficiaries,
legal representatives, agents, successors and assigns, and may be
entered in any court having jurisdiction thereof. The obligation of the
parties to arbitrate pursuant to this clause shall be specifically
enforceable in accordance with, and shall be conducted consistently
with, the provisions of Title 9 of Part 3 of the California Code of
Civil Procedure. Any arbitration hereunder shall be conducted in
Stockton, California, unless otherwise agreed to by the parties.
8.7 Attorneys' Fees and Costs. In the event of litigation, arbitration or
any other action or proceeding between the parties to interpret or
enforce this Agreement or any part thereof or otherwise arising out of
or relating to this Agreement, the prevailing party shall be entitled
to recover its costs related to any such action or proceeding and its
reasonable fees of attorneys, accountants and expert witnesses incurred
by such party in connection with any such action or proceeding. The
prevailing party shall be deemed to be the party which obtains
substantially the relief sought by final resolution, compromise or
settlement, or as may otherwise be determined by order of a court of
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competent jurisdiction in the event of litigation, an award or decision
of one or more arbitrators in the event of arbitration, or a decision
of a comparable official in the event of any other action or
proceeding. Any obligation to indemnify under this Agreement includes
the obligation to pay reasonable fees of attorneys, accountants and
expert witnesses incurred by the indemnified party in connection with
matters subject to indemnification.
8.8 Unfunded Arrangement. The Executive and Beneficiary are general
unsecured creditors of the Bank for the distribution of benefits under
this Agreement. The benefits represent the mere promise by the Bank to
distribute 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 Beneficiary have no preferred or secured claim.
8.9 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. 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.
8.10 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 of this Agreement other
than those specifically set forth herein.
8.11 Interpretation. Wherever the fulfillment of the intent and purpose of
this Agreement requires, and the context will permit, the use of the
masculine gender includes the feminine and use of the singular includes
the plural.
8.12 Alternative Action. In the event it shall become impossible for the
Bank or the Plan Administrator to perform any act required by this
Agreement, the Bank or Plan Administrator may in its discretion perform
such alternative act as most nearly carries out the intent and purpose
of this Agreement and is in the best interests of the Bank.
8.13 Headings. Article and section headings are for convenient reference
only and shall not control or affect the meaning or construction of any
of its provisions.
8.14 Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Agreement shall be construed and
enforced as if such illegal and invalid provision has never been
inserted herein.
8.15 Insolvency. If the California Commissioner of Financial Institutions
appoints the Federal Deposit Insurance Corporation as receiver for the
Bank, all obligations under this Agreement shall terminate as of the
date that the Bank is declared insolvent, and Executive and Executive's
Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of the
Bank.
8.16 Notice. Any notice or filing required or permitted to be given to the
Bank or Plan Administrator under this Agreement shall be sufficient if
in writing and hand-delivered, or sent by registered or certified mail,
to the address below:
____________________________________
____________________________________
____________________________________
____________________________________
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to the Executive
under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the
Executive.
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IN WITNESS WHEREOF, the Executive and a duly authorized representative
of the Bank have signed this Agreement.
EXECUTIVE: BANK:
SERVICE 1ST BANK
/s/ XXXXXXX XXXXXXX By: /s/ XXXXXX X. XXXXX
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Xxxxxxx Xxxxxxx Xxxxxx X. Xxxxx
Title: Chief Financial Officer
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