Exhibit 10.10
EMPLOYMENT AGREEMENT
PART I
PARTIES TO AGREEMENT
Section 1.01 - Parties: This Employment Agreement (hereinafter referred to as
"Agreement") is entered into by and between Farmers & Merchants Bank of Central
California and Farmers & Merchants Bancorp (hereinafter referred to as
"Employer") and Xxxxx X. Xxxxxx (hereinafter referred to as "Employee").
Employer and Employee are collectively referred to herein as the "Parties".
PART II
EMPLOYMENT
Section 2.01 - Employment: Employer hereby employs Employee and Employee hereby
accepts employment with Employer in accordance with the terms and conditions set
forth herein.
Section 2.02 - Term of Employment: This Agreement shall automatically terminate
thirty-six (36) months from the effective date referenced herein.
Notwithstanding the foregoing, this agreement may be terminated pursuant to Part
VII of this Agreement. If the Agreement is not terminated pursuant to Part VII
of this Agreement, at the conclusion of the thirty-six (36) month term, this
Agreement shall renew automatically for additional two year terms, unless either
party furnishes written notice of his/her or its intention not to renew by no
later than sixty (60) days prior to the anniversary of the effective date of
employment under this Employment Agreement.
If the Employer elects to not renew this agreement, the Employee shall be paid
all accrued salary, vacation and reimbursement expenses for which expense
reports have been provided to Employer in accordance with Employer's policies
and this Agreement or which are provided to Employer prior to the separation
date in accordance with Employer's policies and this Agreement. In addition to
the foregoing amounts, if the Employer elects to not renew this agreement in
accordance with this section the Employee will be entitled to receipt of
severance payments as set forth herein.
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1. Employee shall be entitled to a sum equivalent to twelve times the highest
monthly base salary which the Employee has earned during his/her employment
with the Employer, less any withholding required by law (hereinafter
referred to as "severance payment."). At the time of termination, the
Employee may elect to receive disbursement of the severance payment in one
of two manners as set forth in subsection 2.02.1.a-b, below. If the
employee elects to receive twelve (12) monthly payments, the Employee may
at any time after the initial election and upon thirty (30) days written
notification to Employer, elect to receive the balance of the amount not
yet received in a lump sum. Under no circumstance is the Employee entitled
or the Employer obligated to pay the severance payment in any method other
than those set forth herein.
a. Employee may receive the severance payment in twelve (12) monthly
payments, each in the amount equal to one twelfth (1/12) of Employee's
highest annual base salary the Employee has earned during his/her
employment with the Employer, less any withholding required by law. If
Employee elects this option, any payments due and owing to Employee
will commence on the 15th day of the first month following Employee's
termination and shall continue for eleven consecutive months
thereafter.
b. Employee may receive the severance payment in a lump sum at the time
of termination less any withholding required by law. If Employee
elects this option, any payment due and owing to Employee will be paid
on the 15th day of the first month following Employee's termination.
2. In addition to any severance payments due and owing under this section,
Employer shall provide Employee with a performance bonus in an amount equal
to the average of the annual discretionary incentive bonus of the previous
two years, prorated for the number of months between the termination date
and the end of the Employer's last fiscal year. At the time of termination,
the Employee may elect to receive disbursement of the performance bonus in
one of two manners as set forth in subsection 2.02.2.a-b, below. If the
Employee elects to receive twelve (12) monthly payments, the Employee may
at any time after the initial election and upon thirty (30) days written
notification to Employer, elect to receive the balance of the amount not
yet received in a lump sum. Under no circumstance is the Employee entitled
or the Employer obligated to pay the performance bonus in any method other
than those set forth herein.
a. Employee may receive the performance bonus in twelve (12) monthly
payments, each in the amount equal to one twelfth (1/12) of Employee's
performance bonus, less any withholding required by law. If Employee
elects this option, any payments due and owing to Employee will
commence on the 15th day of the first month following Employee's
termination and shall continue for eleven consecutive months
thereafter.
b. Employee may receive the performance bonus in a lump sum less any
withholding required by law. If Employee elects this option, any
payment due and owing to Employee will be paid on the 15th day of the
first month following Employee's termination.
3. In addition, the Employee will also be entitled to payment of all vested
awards of benefit plans and incentive programs in which Employee is vested
in accordance with the terms of those plans. Any such payment or
distribution from a nonqualified deferred compensation plan shall be
governed by the terms of such plan relating to the timing of distributions.
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PART III
DUTIES OF EMPLOYEE
Section 3.01 - General Duties: Employee is employed as Executive Vice President,
Head of Retail Banking of Farmers & Merchants Bank of Central California, under
the direction of Farmers & Merchants Bank of Central California's Board of
Directors and Chief Executive Officer ("CEO") and shall perform and discharge
well and faithfully the duties that may be assigned to him/her from time to time
thereafter by Farmers & Merchants Bank of Central California's Board of
Directors or CEO in connection with the conduct of Employer's business. Nothing
herein shall preclude the Board of Directors or CEO from changing Employee's
title or duties as long as the resulting title and duties are reasonably
commensurate with the education, employment background, and qualifications of
the Employee and involve similar responsibilities and scope of duties.
Section 3.02 - Outside Activities: Employee agrees that while employed by
Employer he/she will refrain from any outside activities or activities which
actually or potentially are in direct conflict with the essential
enterprise-related interest of the Employer that would cause a material and
substantial disruption of the Employer's operations or would be in direct
competition with the Bank or assist competitors of the Bank.
PART IV
COMPENSATION
Section 4.01 - Salary: Employee shall be paid an initial base salary of $186,000
per year. This base salary shall be paid to Employee in such intervals and at
such times as other salaried executives of Employer are paid. Employee will be
considered for salary increases at the times that other salaried executives of
Employer are adjusted, and the base salary under the contract will be adjusted
accordingly.
Section 4.02 - Incentive Programs: Employee shall be eligible to participate in
Employer's Discretionary Incentive Compensation Plan. Beginning with the year
ending 2004 Employee shall be eligible for an annual discretionary incentive
bonus. The amount of the bonus shall be determined in accordance with the
established terms and conditions of the Employer's Discretionary Incentive
Compensation Plan adopted by the Employer from time to time which covers
Employees in positions comparable to that of Employee. Employee shall be
entitled to participate in the Employer's Deferred Bonus Plan at a bonus factor
(as defined in the Plan documents). The terms and conditions of "Farmers &
Merchants Bank of Central California Amended and Restated Deferred Bonus Plan"
are set forth in a separate agreement, the contents of which are incorporated
herein by this reference as though set forth in their entirety. Employee shall
be entitled to participate in "Farmers & Merchants Bank of Central California
Split Dollar Life Insurance Plan", "Farmers & Merchants Bank of Central
California Executive Indexed Retirement Agreement" and "Farmers & Merchants Bank
of Central California Executive Deferred Compensation Plan", the terms and
conditions of which are set forth in separate agreements so titled and the
contents of which are incorporated herein by this reference as though set forth
in their entirety.
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PART V
BENEFITS
Section 5.01 - Benefits: Employee shall be entitled to participate in whatever
vacation, medical, dental, pension, sick leave, 401(k), profit sharing,
disability insurance or other plans of general application or other benefits
which are in effect as to any other employee or as may be in effect from time to
time as to any employee, in accordance with the rules established for individual
participation in any such plan.
Section 5.02 - Company Automobile/Automobile Allowance: At the discretion of the
Employer, Employer shall provide Employee with either an automobile for business
and incidental personal use or an automobile allowance as per Bank policy. The
benefit may be changed from time to time at Executive Management's sole
discretion.
Section 5.03 - Membership Fees: Employer shall reimburse Employee for all
appropriate and reasonable expenses incurred in performing his/her duties,
including providing membership in local service and civic clubs and/or
organizations as the Employer deems appropriate and necessary for enhancement of
its presence within the local business community. In order to be eligible for
reimbursement of these expenses, Employee will provide Employer with receipts
and documented evidence as is required by Federal and State laws and
regulations.
PART VI
EXPENSES
Section 6.01 - Travel and Entertainment Expenses: During the term of Employee's
employment, Employer shall reimburse Employee for reasonable out of pocket
expenses incurred in connection with Employer's business, including travel
expenses, food and lodging while away from his/her home, subject to such
policies as Employer may from time to time establish for its employees. Employee
shall keep records of his/her travel and entertainment expenses in a form
suitable to the Internal Revenue Service and the Franchise Tax Board to qualify
this reimbursement as a federal and state income tax deduction for his/her
employer. In addition, Employee shall provide Employer with receipts for all
expenses for which he/she seeks reimbursement.
PART VII
TERMINATION OF EMPLOYMENT
Section 7.01 - Termination at Option of Employer: Employer may
terminate this Agreement at any time and without cause by giving Employee sixty
(60) days written notice of Employer's intent to terminate this Agreement. The
60th day after notice shall be deemed to be the Employee's Separation Date. In
the event Employee's employment is terminated pursuant to this section, Employee
shall be paid all accrued salary, vacation and reimbursement expenses for which
expense reports have been provided to Employer in accordance with Employer's
policies and this Agreement or which are provided to Employer prior to the
separation date in accordance with Employer's policies and this Agreement. In
addition to the foregoing amounts, if Employee is terminated pursuant to this
section of the Agreement, he/she will be entitled to receipt of additional
severance payments as set forth herein.
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1. Employee shall be entitled to a sum equivalent to twelve times the highest
monthly base salary which the Employee has earned during his/her employment
with the Employer, less any withholding required by law (hereinafter
referred to as "severance payment.") At the time of termination, the
Employee may elect to receive disbursement of the severance payment in one
of two manners as set forth in subsection 7.01.1.a-b, below. If the
Employee elects to receive twelve (12) monthly payments, the Employee may
at any time after the initial election and upon thirty (30) days written
notification to Employer, elect to receive the balance of the amount not
yet received in a lump sum. Under no circumstance is the Employee entitled
or the Employer obligated to pay the severance payment in any method other
than those set forth herein.
a. Employee may receive the severance payment in twelve (12) monthly
payments, each in the amount equal to one twelfth (1/12) of Employee's
highest annual base salary the Employee has earned during his/her
employment with the Employer, less any withholding required by law. If
Employee elects this option, any payments due and owing to Employee
will commence on the 15th day of the first month following Employee's
termination and shall continue for eleven consecutive months
thereafter;
b. Employee may receive the severance payment in a lump sum at the time
of termination less any withholding required by law. If Employee
elects this option, any payment due and owing to Employee will be paid
on the 15th day of the first month following Employee's termination.
2. In addition to any severance payments due and owing under this section,
Employer shall provide Employee with a performance bonus in an amount equal
to the average of the previous two years annual discretionary incentive
bonus, prorated for the number of months between the termination date and
the end of the Employer's last fiscal year. At the time of termination, the
Employee may elect to receive disbursement of the performance bonus in one
of two manners as set forth in subsection 7.01.2.a-b, below. If the
Employee elects to receive twelve (12) monthly payments, the Employee may
at any time after the initial election and upon thirty (30) days written
notification to Employer, elect to receive the balance of the amount not
yet received in a lump sum. Under no circumstance is the Employee entitled
or the Employer obligated to pay the performance bonus in any method other
than those set forth herein.
a. Employee may receive the performance bonus in twelve (12) monthly
payments, each in the amount equal to one twelfth (1/12) of Employee's
performance bonus, less any withholding required by law. If Employee
elects this option, any payments due and owing to Employee will
commence on the 15th day of the first month following Employee's
termination and shall continue for eleven consecutive months
thereafter.
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b. Employee may receive the performance bonus in a lump sum less any
withholding required by law. If Employee elects this option, any
payment due and owing to Employee will be paid on the 15th day of the
first month following Employee's termination.
3. In addition, the Employee will also be entitled to payment of all vested
awards of benefit plans and incentive programs in which Employee is vested
in accordance with the terms of those plans. Any such payment or
distribution from a nonqualified deferred compensation plan shall be
governed by the terms of such plan relating to the timing of distributions.
Section 7.02 - Termination for Cause: Employer may terminate Employee's
employment at any time "for cause". "For cause" shall be defined as conviction
of a felony resulting in a material economic adverse effect on the Employer, its
subsidiaries or affiliates. Employer may terminate this Agreement for cause by
giving written notification of such to Employee. Termination under such
circumstance shall be effective immediately upon receipt of the notice by the
Employee, and the date on which the notice is received shall be deemed to be the
Separation Date. In the event Employee is terminated pursuant to this Section,
Employee shall be entitled only to accrued salary, vacation and reimbursement
expenses for which expense reports have been provided to Employer in accordance
with Employer's policies and this Agreement or which are provided to Employer
prior to the separation date in accordance with Employer's policies and this
Agreement and shall be entitled to no further compensation or severance payment
of any nature, provided however, the Employee will also be entitled to payment
of all vested awards of benefit plans and incentive programs which Employee is
vested in accordance with the terms of those plans. Any such payment or
distribution from a nonqualified deferred compensation plan shall be governed by
the terms of such plan relating to the timing of distributions.
Section 7.03 - Termination at Option of Employee: This Agreement may be
terminated by Employee at his/her sole discretion by giving sixty (60) days
written notice of termination to Employer. In the event Employee terminates
his/her employment pursuant to this Section, Employee shall be entitled to all
accrued salary earned up to his/her separation date, provided Employee continues
productive employment until such date, vacation and reimbursement expenses for
which expense reports have been provided to Employer in accordance with
Employer's policies and this Agreement or which are provided to Employer prior
to the separation date in accordance with Employer's policies and this
Agreement. Alternatively; Employer may, at its option, at any time after
Employee gives written notice of resignation as herein provided, pay Employee's
accrued salary up through and including the effective date of separation set
forth in Employee's resignation notice, and thereupon immediately release and
terminate Employee. In addition, the Employee will also be entitled to payment
of all vested awards of benefit plans and incentive programs which Employee is
fully or partially vested in accordance with the terms of those plans. Any such
payment or distribution from a nonqualified deferred compensation plan shall be
governed by the terms of such plan relating to the timing of distributions.
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Section 7.04 - Termination of Employee due to Change of Control: In the event of
a change of control of the Employer during the term of this Agreement, Employer
will provide Employee with a severance package equal to (1) twenty-four times
the Employee's highest monthly base salary within the twelve months prior to the
time of the change of control, (2) a performance bonus in an amount equal to the
previous two years annual discretionary incentive bonus, (3) Employee's COBRA
payment for thirty-six (36) months, and 4) a gross up payment as defined and set
forth herein in section 7.04.2. In addition, the Employee will also be entitled
to payment of all vested awards of benefit plans and incentive programs in which
Employee is vested in accordance with the terms of those plans. For the purpose
of computing the timing for payment to Employee of the amounts due under this
section (with the exception of payment or distribution from or pursuant to any
nonqualified deferred compensation plan, to which Employee will be entitled in
accordance with the terms of such plans relating to the timing of
distributions), a change of control shall be deemed to have occurred upon the
vote of the appropriate shareholders, boards and, if necessary, receipt of
regulatory approval. Within five (5) days after the change of control occurring
and prior to the purchaser assuming control of the Employer, Employee shall
receive disbursement of payments due Employee under this section, except for
payments or distributions from or pursuant to any nonqualified deferred
compensation plan, in one lump sum payment less any withholding required by
state, federal or local law. The preceding sentence not withstanding, any such
payment or distribution from or pursuant to any nonqualified deferred
compensation plan shall be governed by the terms of such plan relating to the
timing of distributions.
1. Change of Control means a change of control of the Employer of a nature
that would be required to be reported in response to Item 6(e) of Schedule
14A of Regulations 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), provided, however, that without limitation, such a Change of
Control shall be deemed to have occurred if:
a. any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 and 13d-5 under the Act), directly or
indirectly, of securities of the Employer representing 40% or more of
the combined voting power of the Employer's then outstanding
securities; or
b. the Employer is party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest; as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of
Directors thereafter.
Notwithstanding the foregoing provisions of this paragraph 1., a "Change of
Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Employer (or any reporting requirement
under the Act relating thereto) by an employee benefit plan maintained by
the Employer for its employees.
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2. Gross-Up Payment: The Employee shall be entitled to a "Gross-Up Payment "
under the terms and conditions set forth herein, and such payment shall
include the Excise Tax reimbursement due pursuant to section 7.04.2.a and
any federal and state tax reimbursements due pursuant to section 7.04.2.b.
a. In the event that any payment or benefit (as those terms are defined
within the meaning of Internal Revenue Code Section 280G(b)(2)) paid,
payable, distributed or distributable to the Employee (hereinafter
referred to as "Payments") pursuant to the terms of this Agreement or
otherwise in connection with or arising out of his/her employment with
the Employer or a Change of Control would be subject to the Excise Tax
imposed by Section 4999 of the Internal Revenue code or any interest
or penalties are incurred by the Executive with respect to such Excise
Tax, then the Employee will be entitled to receive an additional
payment ("Gross-Up Payment") in an amount equal to the total Excise
Tax, interest and penalties imposed on the Employee as a result of the
payment and the Excise Taxes on any federal and state tax
reimbursements as set forth in section 7.04.2.b.
b. If the Employer is obligated to pay the Employee pursuant to Section
7.04.2.a, the Employer also shall pay the Employee an amount equal to
the "total presumed federal and state taxes" that could be imposed on
the Employee with respect to the Excise Tax reimbursements due to the
Employee pursuant to Section 7.04.2.a and the federal and state tax
reimbursements due to the Employee pursuant to this section. For
purposes of the preceding sentence, the "total presumed federal and
state taxes" that could be imposed on the Employee shall be
conclusively calculated using a combined tax rate equal to the sum of
the (a) the highest individual income tax rate in effect under
(Employee) Federal tax law and (ii) the tax laws of the state in which
the Employee resides on the date that the payment is computed and (b)
the hospital insurance portion of FICA.
c. No adjustments will be made in this combined rate for the deduction of
state taxes on the federal return, the loss of itemized deductions or
exemptions, or for any other purpose for paying the actual taxes.
It is further intended that in the event that any payments would be subject
to other "penalty" taxes (in addition to the Excise Tax in section
7.04.2.a) imposed by Congress or the Internal Revenue Service that these
taxes would also be included in the calculation of the Gross-Up Payment,
including any federal and state tax reimbursements pursuant to section
7.04.2.b.
3. Determination of Eligibility for and Amount of Gross-Up Payment: An initial
determination as to whether a Gross-Up Payment is required pursuant to this
Agreement and the amount of such Gross-Up Payment shall be made at the
Employer's expense by an accounting firm appointed by the Employer prior to
any Change in Control. The accounting firm shall provide its determination,
together with detailed supporting calculations and documentation to the
Employer and the Employee prior to submission of the proposed change of
control to the Employer's shareholders, Board of Directors or appropriate
regulators for approval. If the accounting firm determines that no Excise
Tax is payable by the Employee with respect to a Payment or Payments, it
shall furnish the Employee with an opinion reasonably acceptable to the
Employee that no Excise Tax will be imposed with respect to any such
Payment or Payments. Within ten (10) days of the delivery of the
determination to the Employee, the Employee shall have the right to dispute
the determination. The existence of the dispute shall not in any way affect
the Employee's right to receive the Gross-Up Payment in accordance with the
determination. Upon the final resolution of a dispute, the Employer or its
successor shall promptly pay to the Employee any additional amount required
by such resolution. If there is no dispute, the determination shall be
binding, final and conclusive upon the Employer and the Employee, except to
the extent that any taxing authority subsequently makes a determination
that the Excise Tax or additional Excise Tax is due and owing on the
payments made to Employee. If any taxing authority determines that the
Excise Tax or additional Excise Tax is due and owing, the entity acquiring
control of the Employer shall pay the Excise Tax and any penalties assessed
by such taxing authority.
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4. Excise Tax Withholding: Notwithstanding anything contained in this
Agreement to the contrary, in the event that according to the
determination, an Excise Tax will be imposed on any Payment or Payments,
the Employer or its successor shall pay to the applicable government taxing
authorities as Excise Tax withholding, the amount of the Excise Tax that
the Employer has actually withheld from the Payment or Payments.
Section 7.05 - Option to Terminate on Permanent Disability of Employee:
Employer is hereby given the option to terminate this Agreement in the event
that during the term of this Agreement, Employee shall become "permanently
disabled", as the term "permanently disabled" is defined herein. Such option
shall be exercised by Employer giving sixty (60) days notice to Employee by
registered mail, addressed to him/her at his/her last known address, or at such
other address as Employee shall designate in writing, of its intention to
terminate this Agreement ("Notice of Termination".) On the giving of the Notice
of Termination, this Agreement and the terms hereof shall cease and come to an
end on the sixtieth day after the notice is mailed to the Employee.
In the event Employee is terminated pursuant to this Section, Employee shall be
entitled to accrued salary and vacation as of the termination date of the
Agreement, including accrued salary and vacation for the time period in which
the Employee failed or refused to perform his/her duties and/or absented
himself/herself from his/her duties. Employee shall also be entitled to
reimbursement expenses for which expense reports have been provided to Employer
in accordance with Employer's policies and this Agreement or which are provided
to Employer prior to the termination date of the Agreement in accordance with
Employer's policies and this Agreement. In addition to the foregoing amounts, if
Employee is terminated pursuant to this section of the Agreement, he/she will be
entitled to receipt of additional payments as set forth in Section 7.01.1,
7.01.2 and 7.01.3, above.
For purposes of this agreement, Employee shall be deemed to have become
permanently disabled if, because of ill health, physical or mental disability or
illness, or for other medical causes, he/she shall have been continuously unable
or unwilling to perform his/her duties or have absented himself/herself from
his/her duties and failed to perform his/her duties for one hundred and eighty
(180) consecutive days. Such ill health, physical or mental disability or
illness, or other medical cause shall be confirmed by a physician acceptable to
the Employee at the request of the Employer when the Employer knows or has
reason to know that the Employee's absence or inability or unwillingness to
perform his/her duties is or has been caused by ill health, physical or mental
disability or illness, or for other medical causes.
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The Notice of Termination shall be withdrawn and the Agreement shall remain in
effect after a Notice of Termination has been given to the Employee under the
following circumstances.
1. Within thirty (30) days of the Notice of Termination being provided to the
Employee, the Employee returns to the full performance of his/her duties
and provides medical certification that he/she can perform the essential
functions of his/her duties with or without reasonable accommodation.
2. Within thirty (30) days of the Notice of Termination being provided to the
Employee, the Employee requests a reasonable accommodation from Employer
which would permit him/her to perform the essential functions of his/her
duties and such reasonable accommodation can be provided by Employer
without an undue hardship to the Employer.
Any absence by the Employee from his/her duties caused by ill health, physical
or mental disability or illness, or for other medical causes shall automatically
be considered to be a "leave" pursuant to the California Family Rights Act
(CFRA) and the Family Medical Leave Act (FMLA) as of the first date of such
absence caused by the ill health, physical or mental disability, illness or
other medical causes. No Notice of Termination, pursuant to this section shall
be given to the Employee until all leave under the CFRA, Fair Employment and
Housing Act and Family Medical Leave Act has been exhausted.
Section 7.06 - Continuation of Medical Benefits: In the event Employee's
employment is terminated Employee shall be afforded the right to continue
his/her medical benefits to the extent provided in the Consolidated Omnibus
Budget Reconciliation Act ("COBRA"). The Employer shall provide Employee with
the appropriate COBRA notification within the time required by the law from the
Separation Date.
Section 7.07 - Exclusive Agreement: Part VII shall constitute the entire
agreement and contract between the parties respecting the extent of the parties'
duties, obligations and liabilities in the event of termination of employment
and is intended to supersede all existing agreements between the parties,
whether oral or in writing with respect to such subject matter and is intended
to be exclusive and in lieu of any other interests, rights or remedies to which
Employer or Employee may otherwise be entitled. To the extent permitted by law,
Employer and Employee expressly waive any and all such other rights and
remedies. No change, modification or amendment of this Agreement shall be of any
effect unless in writing signed by the Employee and the duly appointed
representatives of the Employer.
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PART VIII
COVENANTS
Section 8.01 - Business and Trade Secrets:
1. For the purpose of this agreement, the terms used herein are defined as
follows.
a. TRADE AND BUSINESS SECRETS. Pursuant to California Civil Code Section
3426.1(d) TRADE AND BUSINESS SECRETS means: Information, including a
formula, pattern, compilation, program, device, method, technique or
process that derives independent economic value, actual or potential
from not being generally known to the public or to other persons who
can obtain economic value from its disclosure or use, and is the
subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
b. PROPRIETARY AND CONFIDENTIAL INFORMATION includes, but is not limited
to trade secrets, computer programs, designs, technology, ideas,
know-how, processes, formulas, compositions, data, techniques,
improvements, INVENTIONS (whether patentable or not), works of
authorship, business and product developments, plans, customers,
pricing data and other information concerning the Employer's actual or
anticipated business, research or development, marketing plans and
strategies, Employer's plans for new product development, Employer's
technical designs, Employer's data dictionaries, information relating
to Employer's financial status, and any other information that
Employer marks confidential or by separate memorandum or e-mail
informs Employee is confidential or that is received in confidence by
or for the Employer from any other person. Also included in
"Confidential Information" is any information of Employer's customers
that Employee has access to in performing his/her employment duties
for Employer.
c. COMPANY MATERIALS are documents or other media or tangible items that
contain or embody PROPRIETARY AND CONFIDENTIAL INFORMATION or any
other information concerning the business, operations or plans of the
Employer, whether such documents have been prepared by the Employee or
by others. COMPANY MATERIALS include, but are not limited to
blueprints, drawings, photographs, charts, graphs, notebooks, customer
lists, computer disks, tape or printouts, sound recordings and other
printed, typewritten, handwritten or computer generated documents, as
well as samples, prototypes, models, products and the like.
d. Excluded from "Confidential Information" is information that: (a)
Employee can prove was in his/her possession before Employee received
it from the Employer; (b) is in the public domain through no fault of
his/her own; or (c) Employee learned from a third party not related to
Employer. Information licensed by Employer to any customer under a
confidentiality restriction is not considered to be in the public
domain.
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2. Nondisclosure: Employee agrees that he/she will not directly nor indirectly
reveal, report, publish or disclose to any person, firm, or corporation not
expressly authorized in writing by the Employer to receive such information
any Trade and Business Secret, Proprietary and Confidential Information and
Employer Materials. Employee further agrees that he/she will not use any
Trade and Business Secret, Proprietary and Confidential Information and/or
Employer Materials for any purpose except to perform his/her employment
duties for Employer and such Trade and Business Secret, Proprietary and
Confidential Information and/or Company Materials may not be used or
disclosed by the Employee for his/her own benefit or purpose or for the
benefit or purpose of a subsequent employer. These agreements will continue
to apply after Employee is no longer employed by the Employer so long as
such Trade and Business Secrets, Proprietary and Confidential Information
and Company Materials are not nor have become, by legitimate means,
generally known to the public.
3. Return of Employer's Property: Upon termination of his/her employment with
the Employer or at any time upon written request of the Employer, Employee
will promptly deliver to Employer, without copying or summarizing, all
Trade and Business Secrets, Proprietary and Confidential Information and
Company Materials, that is in his/her possession or under his/her control,
including, without limitation, all physical property, keys, documents,
lists, electronic storage media, manuals, letters, notes, reports,
including all originals, reproductions, recordings, disks, or other media.
4. Employee acknowledges that he/she has been apprised of the provisions of
Labor Code Section 2860 which provides: "Everything which an Employee
acquires by virtue of his/her employment, except the compensation which is
due him/her from his/her employer, belongs to the Employer, whether
acquired lawfully or unlawfully, or during or after the expiration of the
term of his/her employment." Employee understands that any work that
Employee created or helped create at the request of Employer, including
user manuals, training materials, sales materials, process manuals, and
other written and visual works, are works made for hire in which Employer
owns the copyright. Employee may not reproduce or publish these copyrighted
works, except in the pursuit of his/her employment duties with the
Employer.
5. Inventions: For the purpose of this agreement the term INVENTION shall be
defined to include the following: Newly designed inventions, improvements,
works of authorship, trade secrets, technology, computer programs, source
codes, object code, formulas, compositions, ideas, designs, processes,
techniques, know-how and data made or conceived or reduced to practice or
development by Employee, either alone or jointly with others, during the
term of his/her employment which relate to the business or practice of the
Employer, which are a logical extension of the business, work or practice
of the Employer or which the Employee has been requested to develop,
research or invent by the Employer. Employee agrees that all inventions
which Employee makes, conceives, reduces to practice or develops (in whole
or in part, either alone or jointly with others) during his/her employment
shall be the sole property of the Employer, and Employee agrees by this
agreement to assign such inventions and all rights therein to the Employer
to the maximum extent permitted by Section 2870 of the California Labor
Code.
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If there are inventions that Employee developed before becoming employed by
Employer and to which Employee claims ownership, Employee has provided a list to
the Employer which shall be appended to this agreement and made a part of this
agreement by this reference.
Section 8.02- Separate Covenants: The covenants of Part VIII of this Agreement
shall be construed as separate covenants covering their particular subject
mater. In the event that any covenant shall be found to be judicially
unenforceable, said covenant shall not affect the enforceability or validity of
any other part of this Agreement.
Section 8.03- Continuing Obligation: Employee's obligations set forth in Part
VIII of this Agreement shall expressly continue in effect beyond Employee's
employment period in accordance with their terms and such obligations shall be
binding on Employee's assigns, executors, administrators and other legal
representatives.
PART IX
ARBITRATION AGREEMENT
Section 9.01 - Resolution of Disputes: Employee and Employer hereby agree to
arbitrate any and all claims covered by this Agreement and the agreements
incorporated by reference herein ("Farmers & Merchants Bank of Central
California Amended and Restated Deferred Bonus Plan", "Farmers & Merchants Bank
of Central California Split Dollar Life Insurance Plan", "Farmers & Merchants
Bank of Central California Executive Indexed Retirement Agreement" and "Farmers
& Merchants Bank of Central California Executive Deferred Compensation Plan")
and that such arbitration shall be the sole and exclusive remedy for resolving
any and all such claims or disputes. The decision reached in arbitration shall
be final and binding on the parties. Employee understands that by signing this
Agreement, he/she waives the right to a jury trial in civil court.
Section 9.02 - Claims Covered by This Agreement: Except as provided in Section
9.03, claims and disputes covered by this Agreement include any and all claims
by Employee against Employer and all claims that Employer may have against
Employee, including, without limitation, those arising under:
1. any federal, state, or local laws regulations or statues prohibiting
employment discrimination such as (without limitation), race, sex, national
origin, age, disability, religion, and harassment, and/or hostile work
environment;
2. any alleged or actual contract, agreement or covenant (whether oral,
written or implied) between Employee and Employer;
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3. any policy or compensation or benefits plan of Employer, unless the
decision in question was made by an entity other than the Employer;
4. any public policy;
5. any claim for personal, emotional, physical, or economic injury; or
6. any other controversy or claim arising out of Employee's employment or
termination of Employee's employment including any dispute related to any
disciplinary action or decision of Employer affecting the Employee's
position or status.
Section 9.03 - Claims Not Covered by This Agreement: The only disputes and/or
claims between Employee and Employer which shall not be covered by this
Agreement are:
1. any and all claims that are brought and processed by a governmental
administrative agency, including the California Fair Employment and Housing
Commission, the Equal Employment Opportunity Commission, the California
Labor Commission (Division of Labor Standards Enforcement) or the Federal
Department of Labor, or similar state and local administrative agencies if
employment is in a state other than California. To the extent that the
Employee desires to pursue such claims beyond the administrative process
(i.e., in court) such claims will then be covered by this Agreement;
2. any and all claims by Employee for Workers Compensation or Unemployment
Insurance benefits; or
3. any and all claims by Employee for benefits under an Employer plan which
provides its own arbitration procedure.
Section 9.04 - Arbitration Procedure: To exercise a party's rights under this
Agreement, the moving party must reduce to writing the details of any dispute
and serve it upon the other party within the time period specified by California
Law as the appropriate statute of limitations. Any failure to request
arbitration in a timely manner as defined by the statue of limitations imposed
by California Law shall constitute a waiver of all rights to raise any claims in
any forum arising out of any dispute that was subject to arbitration.
The arbitration shall be conducted pursuant to the provisions of Title 9 of Part
III of the California Code of Civil Procedure, commencing at section 1280, et.
seq. (or any successor or replacement statutes). There shall be no restrictions
on discovery and such shall be permitted pursuant to California Law. The
arbitrator shall be empowered with the right to issue subpoenas as to documents
and witnesses.
Section 9.05 - Selection and Scope of Arbitrator: The arbitration will be
conducted before a single arbitrator selected in accordance with the Employment
Dispute Resolution Rules of the American Arbitration Association. The
arbitration will be held in San Xxxxxxx, Sacramento or Stanislaus County. All
fees and expenses charged by AAA or the arbitrator relating to the arbitration
shall be paid by the Employer. Each party shall pay for the fees and costs of
its' own attorneys, experts, witnesses, transcripts, exhibits, preparation for
the proceeding, and briefs unless a party prevails on a claim for which
attorney's fees and/or costs are recoverable by statue or contract.
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The arbitrator shall be authorized to award damages supportable by the evidence
to the extent authorized by California Law and shall further be authorized to
grant remedies in law and in equity. The arbitrator shall only be authorized to
exercise the power specifically enumerated in this Agreement and to decide the
dispute(s) in accordance with the governing principles of law and equity. The
arbitrator shall have no authority to alter, amend, or modify the terms of this
Agreement. Should any party fail to appear or participate in the arbitration
proceeding, the arbitrator may make a decision based on the evidence presented
in the proceeding by the appearing party of the dispute. The arbitrator shall
issue a written award within sixty (60) calendar days of the date the matter is
submitted. The award shall be accompanied by a writing that shall reveal
essential facts and conclusions used by the arbitrator in reaching that
decision.
Section 9.06 - Exclusive Forum: Employee and Employer agree that arbitration
shall be the exclusive forum for resolving all disputes arising out of or
involving the Employee's employment with Employer or termination of that
employment (except as provided otherwise herein); provided, however, that either
party may file a request with a court of competent jurisdiction for equitable
relief, including but not limited to injunctive relief, pending resolution of
any dispute through the arbitration procedure set forth herein. Both Employee
and Employer waive their constitutional right to have such matters determined by
a jury. Either party may bring an action in any court of competent jurisdiction
to compel arbitration under this Agreement and to enforce an arbitration award.
A party opposing enforcement of the award itself may bring a separate action in
a court of competent jurisdiction to set aside the award on grounds allowable
under California law regulating arbitration.
Nothing in this Agreement shall affect the ability of either party to seek
appropriate interim injunctive relief pursuant to California Code of Civil
Procedure before or while arbitration proceedings are pending. The parties
retain all rights to enter into agreements regarding arbitration after any
dispute has arisen.
Section 9.07 - Complete Agreement as to Dispute Resolution: This is the complete
agreement of the parties on the subject of arbitration of disputes or claims
between them. This agreement supersedes any prior or contemporaneous oral,
written, or implied understanding on the subject, and can only be revoked or
modified by a writing signed by the parties which specifically states an intent
to revoke or modify this Agreement.
Section 9.08 - Severability: If any provision of this agreement is adjudged to
be void or otherwise unenforceable in whole or in part, such adjudication shall
not affect the validity of the remainder of this agreement.
Section 9.09 - Continuation: The agreements in this part IX shall survive the
termination of this agreement and the Employee's employment with Employer and
remain in full force and effect thereafter.
THIS ARBITRATION AGREEMENT IS A WAIVER OF RIGHTS TO A CIVIL JURY TRIAL FOR
CLAIMS ARISING OUT OF EMPLOYEE'S EMPLOYMENT WITH THE EMPLOYER.
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PART X
TAXES
Section 10.01 - Withholding: All payments to be made to Employee under this
Agreement will be subject to required withholding of federal, state and local
income and employment taxes as applicable.
PART XI
GENERAL PROVISIONS
Section 11.01 - Notices: Any notice to be given to Employer under the terms of
this Agreement, and any notice to be given to Employee shall be addressed to
him/her/it at the mailing address the party may hereafter designate in writing
to the other. Any such notice shall be deemed to have been duly given when
enclosed in a properly sealed and addressed envelope, registered or certified,
and deposited (postage or registry or certification fee prepaid) in a post
office or branch post office regularly maintained by the United States
Government.
Section 11.02 Entire Agreement: This Agreement and the agreements incorporated
by reference herein ("Farmers & Merchants Bank of Central California Amended and
Restated Deferred Bonus Plan", "Farmers & Merchants Bank of Central California
Split Dollar Life Insurance Plan", "Farmers & Merchants Bank of Central
California Executive Indexed Retirement Agreement" and "Farmers & Merchants Bank
of Central California Executive Deferred Compensation Plan") supersede any and
all other agreements or understandings, whether oral, implied, or in writing,
between the parties hereto with respect to the subject matter hereof and
contains all of the covenants and agreements between the parties with respect to
such matters in their entirety. Each party to this Agreement acknowledges that
no representations, inducements, promises or agreements, orally or otherwise,
have been made by any party, or anyone acting on behalf of any party, which is
not embodied herein, and that no other agreement, statement or promise not
contained in this agreement shall be valid or binding. Any modification(s) to
this Agreement will be effective only if in writing and signed by the parties
hereto.
Section 11.03 - Partial Invalidity: If any provisions in this Agreement are held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.
Section 11.04 - Continuing Obligations: The obligations of the covenants
contained in this Agreement shall survive the termination of the Agreement and
any employment relationship between Employer and Employee. Accordingly, neither
the Employer, nor the Employee shall be relieved of the continuing obligations
of the covenants contained in this Agreement.
Section 11.05 - Employee's Representatives: Employee represents and warrants
that he/she is free to enter into this Agreement and to perform each of the
terms and covenants in it. Employee represents and warrants that he/she is not
restricted or prohibited, contractually or otherwise, from entering into and
performing this Agreement, and that his/her execution and performance of this
Agreement is not a violation or breach of any other agreement between Employee
and any other person or entity.
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Section 11.06 - Attorney Fees: The Employer and Employee agree that in the event
of litigation relating to this Agreement, the prevailing party shall be entitled
to recover the attorney's fees and costs incurred in prosecuting or defending
such litigation.
Section 11.07 - Governing Law: This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of California
This Agreement consists of seventeen (17) pages.
The effective date of employment under this Agreement is on January 1, 2005.
FARMERS & MERCHANTS BANK OF CENTRAL CALIFORNIA
and FARMERS & MERCHANTS BANCORP
By: /s/Xxxx X. Xxxxxxxxx Date: January 1, 2005
_________________________________________ ________________________
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer on behalf of
FARMERS & MERCHANTS BANK OF CENTRAL CALIFORNIA and
FARMERS & MERCHANTS BANCORP
By: /s/Xxx X. Xxxxxxx Date: January 1, 2005
_________________________________________ _________________________
Xxx X. Xxxxxxx
Chairman of the Board on behalf of
FARMERS & MERCHANTS BANK OF CENTRAL CALIFORNIA and
FARMERS & MERCHANTS BANCORP
Employee: /s/Xxxxx X. Xxxxxx Date: January 1, 2005
_________________________________________ _________________________
Xxxxx X. Xxxxxx
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