EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of
July 15, 2004, by and among Service 1st Bancorp ("Bancorp"), Service 1st Bank
("Bank") and Xxxxx X. Xxxxx ("Executive").
RECITALS
WHEREAS, Bancorp is a California corporation and bank holding company
registered under the Bank Holding Company Act of 1956, as amended, subject to
the supervision and regulation of the Board of Governors of the Federal
Reserve System ("BGFRS");
WHEREAS, Bancorp is the parent holding company for Bank, which is a
California state-chartered banking corporation and wholly-owned subsidiary of
Bancorp, subject to the supervision and regulation of the California
Department of Financial Institutions ("CDFI") and the Federal Deposit
Insurance Corporation ("FDIC");
WHEREAS, Bancorp, Bank and Executive desire to enter into an employment
agreement for the purposes of engaging the services of Executive and to
delineate the rights, obligations and responsibilities of Bancorp, Bank and
Executive;
WHEREAS, Bancorp and Executive intend that Executive devote
approximately ten percent (10%) of his business time, ability, and attention
to the business of Bancorp during the term of this Agreement and the balance
of approximately ninety percent (90%) of such time to the business of Bank
(such percentages hereinafter referred to as the "Allocation"), in each case
as delineated in a position description approved by the Boards of Directors
of Bancorp and Bank as described hereinafter and attached to this Agreement
as an addendum; and
WHEREAS, Bancorp and Bank intend to allocate the compensation and
benefits payable or provided to Executive under this Agreement in accordance
with the Allocation.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Bancorp, Bank and Executive agree as follows:
AGREEMENT
1. Term of Employment. Bancorp and Bank hereby employ Executive in
the positions with Bancorp and Bank, in accordance with the Allocation and as
hereinafter set forth, and Executive hereby accepts employment with Bancorp
and Bank upon the terms and conditions hereinafter set forth, for a period of
three (3) years from the date hereof, subject to the termination provisions
of paragraph 16 and any required regulatory approvals as specified in
paragraph 28 of this Agreement. Upon the occurrence of the third annual
anniversary of the date of this Agreement, and on each annual anniversary
date thereafter, the term of this Agreement shall be deemed automatically
extended for an additional one (1) year term, subject to the termination
provisions of paragraph 16.
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2. Duties and Obligations of Executive. Executive shall serve as
the President of Bancorp and President and Chief Executive Officer of Bank in
accordance with the Allocation, and shall perform the duties of such
positions as set forth in the position descriptions approved by resolutions
adopted by the Boards of Directors of Bancorp and Bank, which shall be
attached to this Agreement as an addendum, and such additional duties as may
from time to time be reasonably requested of him by the Boards of Directors
of Bancorp and Bank.
3. Devotion to Bancorp's and Bank's Business.
(a) Executive shall devote his business time, ability, and
attention to the business of the Bancorp and Bank in accordance with the
Allocation during the term of this Agreement and shall not during the term of
this Agreement engage in any other business activities, duties, or pursuits
whatsoever, or directly or indirectly render any services of a business,
commercial, or professional nature to any other person or organization,
whether for compensation or otherwise, without the prior written consent of
the Bank and Bancorp's Board of Directors.
(b) The expenditure of reasonable amounts of time for
educational, charitable, or professional activities shall not be deemed a
breach of this Agreement if those activities do not materially interfere with
the services required of Executive under this Agreement. It is expressly
understood and agreed that Executive may continue to participate in any such
activities in which Executive participated prior to the date of this
Agreement with the knowledge of Bancorp. Nothing in this Agreement shall be
interpreted to prohibit Executive from making passive personal investments;
provided that, except for ownership interests in businesses acquired prior to
the date of this Agreement which represent in each case less than three
percent (3%) of the total ownership of each such business, Executive shall
not directly or indirectly acquire, hold, or retain any ownership interest in
any financial institution, including its affiliated companies, or any other
business competing with or similar in nature to the business of Bancorp or
Bank, or their respective subsidiaries or affiliates, which conducts business
or operations in San Xxxxxxx County.
(c) Executive agrees to conduct himself at all times with due
regard to public conventions and morals. Executive further agrees not to do
or commit any act that will reasonably tend to shock or offend the community
and have an adverse effect upon Bancorp or Bank.
(d) Executive hereby represents and agrees that the services to
be performed under the terms of this Agreement are of a special, unique,
unusual, extraordinary, and intellectual character that gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law. Executive therefore expressly agrees that in
addition to any other rights or remedies that Bancorp or Bank may possess,
they shall be entitled to injunctive and other equitable relief to prevent or
remedy a breach of this Agreement by Executive.
4. Noncompetition by Executive. Executive shall not, during the
term of this Agreement, directly or indirectly, either as a consultant,
agent, principal, stockholder (except as permitted in paragraph 3(b) of this
Agreement), officer, director, or in any other individual or representative
capacity, engage, assist, consult or participate in any other banking or
financial services business without the prior written consent of the Board of
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Directors of Bancorp. Following the termination of this Agreement and during
any period when Executive is receiving severance payments from Bancorp or
Bank pursuant to or related to this Agreement, Executive shall be subject to
the foregoing noncompetition restrictions only with respect to banking or
financial services businesses which conduct business or operations in San
Xxxxxxx County. This paragraph 4 shall survive the expiration or termination
of this Agreement.
5. Indemnification.
(a) Executive shall indemnify and hold Bancorp and Bank, and
their respective affiliates and subsidiaries, harmless from all liability for
loss, damage, or injury to persons or property resulting from the gross
negligence or intentional misconduct of Executive.
(b) To the fullest extent permitted by law and applicable
regulations of the BGFRS and FDIC, Bancorp 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 Bancorp or Bank is joined
as a party defendant) against expenses, judgments, fines, settlements and
other amounts actually 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 interests of Bancorp and Bank (and with respect to
a criminal proceeding if Executive had no reasonable cause to 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
executive of Bancorp or Bank.
6. Disclosure of Information. Executive shall not, either before or
after termination of this Agreement, without the prior written consent of
Bancorp's Board of Directors or except as required by law to comply with
legal process including, without limitation, by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process, disclose to anyone any financial
information, trade or business secrets, customer lists, computer software or
other information not otherwise publicly available concerning the business or
operations of Bancorp or Bank and their respective affiliates and
subsidiaries. Executive further recognizes and acknowledges that any
financial information concerning any customers of Bancorp or Bank and their
respective affiliates or subsidiaries, as it may exist from time to time, is
strictly confidential and is a valuable, special and unique asset of
Bancorp's and Bank's business. Executive shall not, either before or after
termination of this Agreement, without such consent or except as required by
law, disclose to anyone said financial information or any part thereof, for
any reason or purpose whatsoever. In the event Executive is required by law
to disclose such information described in this paragraph 6, Executive will
provide Bancorp and its counsel with immediate notice of such request so that
they may consider seeking a protective order. If in the absence of a
protective order or the receipt of a waiver hereunder Executive is
nonetheless, in the written opinion of knowledgeable counsel, compelled to
disclose any of such information to any tribunal or any other party or else
stand liable for contempt or suffer other material censure or material
penalty, then Executive may disclose (on an "as needed" basis only) such
information to such tribunal or other party without liability hereunder.
Notwithstanding the foregoing, Executive may disclose such information
concerning the business or operations of Bancorp or Bank and their respective
affiliates and subsidiaries as may be required by the BGFRS, FDIC or other
regulatory agency having jurisdiction over the operations of Bancorp or Bank
in connection with an examination of Bancorp or Bank or other proceeding
conducted by such regulatory agency. This paragraph 6 shall survive the
expiration or termination of this Agreement.
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7. Written, Printed or Electronic Material. All written, printed or
electronic material, notebooks and records including, without limitation,
computer disks used by Executive in performing duties for Bancorp or Bank,
other than Executive's personal notes and diaries, are and shall remain the
sole property of Bancorp. Upon termination of employment, Executive shall
promptly return all such material (including all copies, extracts and
summaries thereof) to Bancorp. This paragraph 7 shall survive the expiration
or termination of this Agreement.
8. Surety Bond. Executive agrees that he will furnish all
information and take any other steps necessary from time to time to enable
Bancorp or Bank to obtain or maintain a fidelity bond conditional on the
rendering of a true account by Executive of all monies, goods, or other
property which may come into the custody, charge, or possession of Executive
during the term of his employment. The surety company issuing the bond and
the amount of the bond must be acceptable to Bancorp. All premiums on the
bond shall be paid by Bancorp and Bank in accordance with the Allocation.
Bancorp shall have no obligation to pay severance benefits to Executive in
accordance with paragraph 16 (d) of this Agreement in the event that the
Executive's employment is terminated in connection with the Executive's
failure to qualify for a surety bond at any time during the term of this
Agreement and such failure to qualify results from an occurrence described in
paragraph 16(a) (5), (6), (7), (8), (9), or (11, to the extent of an
Executive breach).
9. Base Salary. In consideration for the services to be performed
hereunder, Bancorp and Bank shall pay to Executive in accordance with the
Allocation, a base salary at the rate of One Hundred Thirty-Nine Thousand Six
Hundred Ninety-One Dollars ($139,691) per annum, payable in substantially
equal installments during the term of this Agreement of approximately Five
Thousand Four Hundred Forty-Five Dollars and Forty-Six Cents ($5,820.46) on
the fifteenth and last days of each month, subject to applicable adjustments
for withholding taxes and prorations for any partial employment period.
Executive shall receive such annual adjustments in base salary, if any, as
may be determined by Bancorp's Board of Directors, in its sole discretion.
10. Salary Continuation During Disability. If Executive for any
reason (except as expressly provided below) becomes temporarily or
permanently disabled so that he is unable to perform the duties under this
Agreement, Bancorp and Bank agree to pay Executive in accordance with the
Allocation, the base salary otherwise payable to Executive pursuant to
paragraph 9 of this Agreement reduced by the amounts received by Executive
from state disability insurance, or worker's compensation or other similar
insurance benefits through policies provided by Bancorp or Bank, for a period
of six (6) months from the date of disability.
For purposes of this paragraph 10, "disability" shall be defined
as provided in any disability insurance coverage provided by Bancorp or Bank
to Executive or as may otherwise be defined in any disability insurance
program of Bancorp or Bank. Notwithstanding anything herein to the contrary,
Bancorp and Bank shall have no obligation to make payments for a disability
resulting from the deliberate, intentional actions of Executive, such as, but
not limited to, attempted suicide or chemical dependence of Executive.
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11. Incentive Compensation. Executive shall be entitled to receive
an annual incentive compensation payment as determined by the Board of
Directors of Bancorp based upon the implementation of Bancorp's strategic
plan for each year and the profitability of Bancorp for each year during the
term of this Agreement.
Notwithstanding the foregoing, no incentive compensation payments
shall be prorated for a partial year and Executive shall not be entitled to
receive incentive compensation payments based upon the increased
profitability described above for any year during the term of this Agreement
in which Executive was not employed by Bancorp and Bank for the full fiscal
year. Any incentive compensation payable to Executive shall be distributed
to Executive following review by Bancorp's Board of Directors of the final
audited consolidated financial results of operations for the immediately
preceding fiscal year of Bancorp.
12. Stock Options. Executive has previously been granted incentive
stock options to purchase Twenty Thousand (20,000) shares of Bancorp's common
stock pursuant to the 1999 Stock Option Plan (the "1999 Plan").
Notwithstanding any contrary provision of the 1999 Plan or related Incentive
Stock Option Agreement, no rights of employment shall be conferred upon
Executive or result from the 1999 Plan or such Incentive Stock Option
Agreement. Bancorp has a 2004 Stock Option Plan (the "2004 Plan") pursuant
to which no stock options have been granted to Executive as of the date of
this Agreement. Executive shall be eligible for a future grant of stock
options under the 2004 Plan in the sole discretion of Bancorp's Board of
Directors. In the event stock options are granted to Executive under the
2004 Plan in the future, no rights of employment shall be conferred upon
Executive or result from the 2004 Plan or stock option agreements thereunder.
Any employment rights and corresponding duties of Executive pursuant to his
employment by Bancorp or Bank shall be limited to and interpreted solely in
accordance with the terms and provisions of this Agreement.
13. Other Benefits. Executive shall be entitled to those benefits
adopted by Bancorp or Bank for all executive officers of Bancorp or Bank,
subject to the Allocation, and to applicable qualification requirements and
regulatory approval requirements, if any. Executive shall be further
entitled to the following additional benefits which shall supplement or
replace, to the extent duplicative of any part or all of the general benefits
available for executive officers of Bancorp or Bank, the benefits otherwise
provided to Executive:
(a) Vacation. Executive shall be entitled to annual vacation
leave, the duration of which shall be equal to an aggregate of four (4)
weeks. The vacation leave shall be paid by Bancorp and Bank in accordance
with the Allocation, based on Executive's then existing rate of base salary
each year during the term of this Agreement. Executive may be absent from
his employment for vacation as long as such leave is reasonable and does not
jeopardize his responsibilities and duties specified in this Agreement. The
length of vacation should not exceed two (2) weeks without the approval of
Bancorp's Board of Directors, but at least two (2) consecutive weeks of
vacation must be taken each year during the term of this Agreement. Vacation
time will accrue in accordance with Bancorp's personnel policies.
(b) Insurance. Bancorp shall provide during the term of this
Agreement group life, health (including medical, dental and hospitalization),
accident and disability insurance coverage for Executive and his dependents
through a policy or policies provided by the California Bankers Association
group insurance program or similarly equivalent program. In addition to the
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foregoing, the personal disability policy with Unum Provident Company (Policy
# 7905284) established for the benefit of Executive and in existence at the
date of this Agreement shall be maintained or substantially equivalent
personal disability insurance coverage obtained which is reasonably
acceptable to Executive. The cost of such insurance shall be paid by Bancorp
and Bank in accordance with the Allocation.
14. Annual Physical Examination. Bancorp and Bank shall pay or
reimburse Executive in accordance with the Allocation for the cost of an
annual physical examination conducted by a California licensed physician
selected by Executive and reasonably acceptable to Bancorp.
15. Business Expenses. Executive shall be reimbursed for all
ordinary and necessary expenses incurred by Executive in connection with his
employment. Executive shall also be reimbursed for expenses incurred in
activities associated with promoting the business of Bancorp or Bank,
including expenses for club memberships, entertainment, travel and other
expenses for attendance at conventions and education programs, and similar
items. Bancorp and Bank will pay for or will reimburse Executive for such
expenses in accordance with the Allocation upon presentation by Executive
from time to time of receipts or other appropriate evidence of such
expenditures in form and content reasonably acceptable to Bancorp and Bank.
Any club memberships shall be approved in advance of purchase by Bancorp's
and Bank's Boards of Directors.
16. Termination of Agreement.
(a) Automatic Termination. This Agreement shall terminate
automatically without further act of the parties and immediately upon the
occurrence of any one of the following events, subject to a party's right,
without any obligation whatsoever, to waive an event reasonably susceptible
of waiver which otherwise benefits the waiving party, and the obligation of
Bancorp and Bank to pay in accordance with the Allocation, the amounts which
would otherwise be payable to Executive under this Agreement through the end
of the month in which the event occurs, except that only in the event of
termination based upon subparagraphs (1), (4) or (11, to the extent of
Bancorp's or Bank's breach) below shall Executive be entitled to receive
severance payments and continuation of group insurance benefits based upon
automatic termination pursuant to paragraph 16 (d) of this Agreement:
(1) The occurrence of circumstances that make it
impossible or impractical for Bancorp and Bank to
conduct or continue business.
(2) The death of Executive.
(3) The loss by Executive of legal capacity.
(4) The loss by Bancorp and Bank of legal capacity to
contract.
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(5) The willful and material breach or the habitual and
continued neglect by the Executive of his employment
responsibilities and duties;
(6) The continuous mental or physical incapacity of the
Executive, subject to disability rights under this
Agreement;
(7) The Executive's willful violation of any federal
banking or securities laws, or of the bylaws, rules,
policies or resolutions of Bancorp or Bank, or the
rules or regulations of the BGFRS, CDFI, FDIC, or
other regulatory agency or governmental authority
having jurisdiction over Bancorp or Bank, which has
an adverse effect upon the Bancorp or Bank;
(8) The written determination by a state or federal
banking agency or governmental authority having
jurisdiction over the Bancorp or Bank that Executive
is not suitable to act in the capacity for which he
is employed by Bancorp and Bank;
(9) The Executive's conviction of (i) any felony or (ii)
a crime involving moral turpitude, or the Executive's
willful commission of a fraudulent or dishonest act;
or
(10) The Executive's willful disclosure, without
authority, of any secret or confidential information
concerning Bancorp or Bank and their respective
affiliates or subsidiaries, or taking any action
which Bancorp'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 the Bancorp or Bank, or their
respective affiliates or subsidiaries.
(11) Bancorp, Bank or Executive materially breaches the
terms or provisions of this Agreement.
(b) Termination by Bancorp and Bank. Bancorp and Bank may, at
their election and in their sole discretion, terminate this Agreement at any
time for any reason, or for no reason, without prejudice to any other remedy
to which Bancorp or Bank may be entitled either at law, in equity or under
this Agreement. Upon such termination, Executive shall immediately cease
performing and discharging the duties and responsibilities of his positions
with Bancorp and Bank and remove himself and his personal belongings from
Bancorp's and Bank's premises. All rights and obligations accruing to
Executive under this Agreement shall cease at such termination, except that
such termination shall not prejudice Executive's rights regarding employment
benefits which shall have accrued prior to such termination, including the
right to receive the severance pay and benefits specified in paragraph 16 (d)
below, and any other remedy which Executive may have at law, in equity or
under this Agreement, which remedy accrued prior to such termination.
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(c) Termination by Executive. This Agreement may be terminated
at any time by Executive for any reason, or no reason, by giving not less
than thirty (30) days' prior written notice of termination to Bancorp and
Bank. Upon such termination, all rights and obligations accruing to
Executive under this Agreement shall cease, except that such termination
shall not prejudice Executive's rights regarding employment benefits which
shall have accrued prior to such termination and any other remedy which
Executive may have at law, in equity or under this Agreement, which remedy
accrued prior to such termination.
(d) Severance Pay and Insurance Continuation Benefits -
Termination by Bancorp and Bank. In the event of termination by Bancorp and
Bank pursuant to paragraph 16 (b) or automatic termination based upon
paragraph 16 (a) (1), (4) or (11, to the extent of Bancorp's or Bank's
breach) of this Agreement, Executive shall be entitled to receive severance
pay (in addition to any base salary, incentive compensation, or other
payments, if any, due Executive) equal to twelve (12) months base salary,
payable by Bancorp and Bank in accordance with the Allocation in
substantially equal installments on the fifteenth and last days of each month
commencing with the month immediately following such termination. Executive
shall also be entitled to receive continuation of group insurance coverages
in effect at the date of termination for Executive and his dependents, at the
expense of Bancorp and Bank in accordance with the Allocation, for a period
of one hundred eighty (180) days from the date of termination. Executive
shall also be entitled to receive continuation of group insurance coverages
in effect at the date of termination for Executive and his dependents, at the
expense of Bancorp and Bank in accordance with the Allocation, for a period
of one hundred eighty (180) days from the date of termination.
Notwithstanding the foregoing, in the event of a "change in control" as
defined in subparagraph (e) below, Executive shall not be entitled to
severance pay or continuation of group insurance coverages pursuant to this
subparagraph (d) and any rights of Executive to severance pay or other
benefits shall be limited to such rights and benefits as are specified in
subparagraph (e) below. Executive acknowledges and agrees that severance pay
and continuation of group insurance coverages pursuant to this subparagraph
(d) is in lieu of all damages, payments and liabilities on account of the
early termination of this Agreement and the sole and exclusive remedy for
Executive terminated at the will of Bancorp and Bank pursuant to paragraph 16
(b) or pursuant to certain provisions of paragraph 16 (a) described herein.
(e) Severance Pay - Change in Control. In the event of a
"change in control" as defined herein and within a period of twenty-four (24)
months following consummation of such a change in control (i) Executive's
employment is terminated; or (ii) any adverse change occurs in the nature and
scope of Executive's position, responsibilities, duties, base salary,
benefits or location of employment; or (iii) any event occurs which
reasonably constitutes a demotion, significant diminution or constructive
termination (by resignation or otherwise) of Executive's employment,
Executive shall be entitled to receive severance pay in addition to any bonus
or incentive compensation payments due Executive. Any such severance pay due
Executive shall be in an amount equal to twenty-four (24) months of
Executive's base salary at the rate in effect immediately prior to
termination.
Notwithstanding the foregoing provisions of paragraph 16 (e),
Executive may resign his position at any time during the period commencing on
the expiration of six (6) months following a "change in control" through the
expiration of twelve (12) months following a "change in control" and upon
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such resignation receive the severance pay specified in paragraph 16 (e)
above without regard to whether an event described in paragraph 16 (e) (i),
(ii) or (iii) has occurred; provided, however, that Executive shall deliver a
letter of resignation that clearly states the intention to resign as of a
date specified therein and such date of resignation shall be at least thirty
(30) days after the date of receipt of the resignation letter by Executive's
employer following such "change in control."
Any such severance shall be payable in lump sum by Bancorp and
Bank in accordance with the Allocation, within thirty (30) days following the
occurrence of an event described in paragraph 16 (e). Such severance
payments, if any, shall be in lieu of all damages, payments and liabilities
on account of the events described above for which such severance payments,
if any, may be due Executive and any severance payment rights of Executive
under paragraph 16 (d) of this Agreement. This paragraph 16 (e) shall be
binding upon and inure to the benefit of the parties and any successors or
assigns of the parties or any "person" as defined herein.
Notwithstanding the foregoing, Executive shall not be entitled to
receive nor shall Bancorp or Bank, their respective successors, assigns or
any "person" as defined herein be obligated to pay severance payments
pursuant to this paragraph 16 (e) in the event of an occurrence described in
paragraph 16 (a) (5), (7) (8), (9), (10), or (11, to the extent of
Executive's breach), or in the event Executive terminates employment in
accordance with paragraph 16 (c) and the termination is not a result of or
based upon the occurrence of any event described in paragraph 16 (e) (ii) or
(iii) above.
17. Change in Control Definition. The term "change in control" shall
mean the first to occur of any of the following events with respect to
Bancorp or Bank:
(a) Any "person" (as such term is used in sections 13 and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), becomes the beneficial owner (as that term is used in section 13(d) of
the Exchange Act), directly or indirectly, of twenty-five percent (25%) or
more of Bancorp's or Bank's capital stock, other than a group of two or more
persons not (i) acting in concert for the purpose of acquiring, holding or
disposing of such stock or (ii) otherwise required to file any form or report
with any governmental agency or regulatory authority having jurisdiction over
Bancorp or Bank which requires the reporting of any change in control;
(b) During any period of not more than two (2) consecutive
years, not including any period prior to the date of this Agreement,
individuals who, at the beginning of such period, constitute the Board of
Directors of Bancorp or Bank, cease for any reason to constitute at least a
majority thereof;
(c) The effective date of any consolidation or merger of
Bancorp or Bank (after all requisite shareholder, applicable regulatory and
other approvals and consents have been obtained), other than a consolidation
or merger of Bancorp or Bank in which the holders of the voting capital stock
of Bancorp or Bank immediately prior to the consolidation or merger hold more
than fifty percent (50%) of the voting capital stock of the surviving entity
immediately after the consolidation or merger;
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(d) The shareholders of Bancorp or Bank approve any plan or
proposal for the liquidation or dissolution of Bancorp or Bank; or
(e) The shareholders of Bancorp or Bank approve the sale or
transfer of substantially all of Bancorp's or Bank'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 Bancorp or, as applicable Bank, 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 the 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 or
any bank subsidiary of the Bancorp is merged with and into another bank
subsidiary of Bancorp to consolidate operations under the charter of such
other bank subsidiary.
18. Notices. Any notices to be given hereunder by a party to another
party shall be in writing and may be transmitted by personal delivery or by
U.S. mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the addresses
listed as follows:
Bancorp or Bank: Principal place of business address.
Executive: Principal residence address as shown in
Bancorp's Personnel Records and Executive's
personal file.
Each party may change the address for receipt of notices by
written notice in accordance with this paragraph 18. Notices delivered
personally shall be deemed communicated as of the date of actual receipt;
mailed notices shall be deemed communicated as of three (3) days after the
date of mailing.
19. 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 Bancorp
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., San
Francisco, California ("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, San Francisco, California ("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,
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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.
20. 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 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. Every 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.
21. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to
the employment of Executive hereunder and contains all of the covenants and
agreements between the parties with respect to the employment of Executive
hereunder. Each party to this Agreement acknowledges that no other
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 set forth herein, and that no other agreement, statement, or promise
not contained in this Agreement shall be valid or binding on a party.
Notwithstanding the foregoing or any contrary term or provision hereunder,
this Agreement shall be construed in light of the Allocation in order to
avoid duplication of payments and benefits to which Executive may be entitled
as set forth in paragraph 28 below.
22. Modifications. Any modification of this Agreement will be
effective only if it is in writing and signed by a party or its authorized
representative.
23. Waiver. The failure of any party to insist on strict compliance
with any of the terms, provisions, covenants, or conditions of this Agreement
by the other party shall not be deemed a waiver of any term, provision,
covenant, or condition, individually or in the aggregate, unless such waiver
is in writing, nor shall any waiver or relinquishment of any right or power
at any one time or times be deemed a waiver or relinquishment of that right
or power for all or any other times.
24. Partial Invalidity. If any provision in this Agreement is 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.
25. Advice of Counsel and Advisors. Executive acknowledges and
agrees that he has read and understands the terms and provisions of this
Agreement and prior to signing this Agreement, he has had the advice of
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counsel and such other advisors as he deemed appropriate in connection with
his review and analysis of such terms and provisions of this Agreement.
26. Governing Law and Venue. The laws of the State of California,
other than those laws denominated choice of law rules, shall govern the
validity, construction and effect of this Agreement. Any action which in any
way involves the rights, duties and obligations of the parties hereunder and
is not resolved by arbitration as set forth in paragraph 19 of this Agreement
shall be brought in the courts of the State of California and venue for any
action or proceeding shall be in San Xxxxxxx County or in the United States
District Court for the Eastern District of California, and the parties hereby
submit to the personal jurisdiction of said courts.
27. Payments Due Deceased Executive. If Executive dies prior to the
expiration of the term of his employment, any payments that may be due
Executive under this Agreement as of the date of death shall be paid to
Executive's executors, administrators, heirs, personal representatives,
successors, or assigns.
28. Limitation Upon Payments and Benefits. Notwithstanding any other
term or provision of this Agreement, each and all of the payments or benefits
to which Executive may be entitled under this Agreement including, without
limitation, payments or benefits described in paragraphs 9 through 16 of this
Agreement, shall be made in accordance with the Allocation and shall not
result in any duplicative payments or benefits to Executive. Bancorp, Bank
and Executive intend that the Allocation applicable to such payments and
benefits under this Agreement will, on a combined basis, equal one hundred
percent (100%) of Executive's entitlement thereto.
29. Regulatory Approval. Bancorp, Bank and Executive agree to
cooperate in obtaining any required regulatory approvals of this Agreement
from the BGFRS, CDFI, FDIC or other governmental or regulatory authority
having jurisdiction over Bancorp or Bank at the earliest practicable date.
Notwithstanding any other term or provision of this Agreement, Bancorp, Bank
and Executive further agree that no benefits, rights or obligations shall
accrue to the parties hereunder in the absence of obtaining any such required
regulatory approvals and in the event that any such governmental or
regulatory authority shall disapprove any provision of this Agreement, then
the parties hereto will use their best efforts, acting in good faith, to
amend this Agreement in a manner that will be acceptable to the parties and
to such governmental or regulatory authorities.
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IN WITNESS WHEREOF, the parties have executed this Agreement in
Stockton, California, as of the date set forth above.
BANCORP: EXECUTIVE:
Service 1st Bancorp
By:
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Xxxx X. Xxxxxx Xxxxx X. Xxxxx
Chairman and Chief
Executive Officer
BANK:
Service 1st Bank
By:
------------------
Xxxx X. Xxxxxx
Chairman
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