EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement (sometimes referred to as the "Agreement")
is effective January 1, 1997, between SC Bancorp ("Bancorp") and Southern
California Bank ("Bank") (collectively referred to as "Employers"), and Xxxxx X.
Xxxxxxx ("Employee").
RECITALS
A. Employee entered into an Employment Agreement with Employers
effective as of January 1, 1995 (the "Prior Agreement").
B. Employers desire to continue to employ Employee in the full-time
employ of Employers as the President and Chief Executive Officer of the
Employers and to provide hereby the terms of that employment.
C. Employee has advised Employers' Boards of Directors of his
willingness to continue to act in a full-time capacity as the President and
Chief Executive Officer of Employers on the terms provided herein.
D. Employee and Employers wish to terminate the Prior Agreement in
its entirety and enter into a new agreement encompassing the terms of Employee's
employment with Employers as contained herein.
NOW, THEREFORE, in consideration of the foregoing Recitals, and the
terms, conditions and covenants contained herein, it is agreed as follows:
1. EMPLOYMENT. Employers hereby employ Employee and Employee hereby
accepts this employment and agrees to exercise and perform faithfully,
exclusively, and to the best of his ability on behalf of each of the Employers
the powers and duties customarily exercised and performed by its President and
Chief Executive Officer on the terms and conditions set forth herein and as
determined from time to time by the Employers' Boards of Directors. Employee
acknowledges and agrees that he is hereby also making a moral commitment to
honor this Agreement and to further the Employers' best interests during the
full term of this Agreement. Employers acknowledge and agree that they are
hereby making a moral commitment to honor this Agreement, to provide Employee
with the authority necessary to fulfill his responsibilities and to direct the
affairs of Employers in a manner which is consistent with safe and sound banking
practices and in compliance with all applicable laws and regulations.
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2. EMPLOYEE'S SERVICES AND DUTIES.
2.1 During the term hereof, Employee shall:
a. Observe and conform to the policies and directions
promulgated by Employers' Boards of Directors;
b. Assume and perform those duties customarily performed
by the Chief Executive Officer and President of a bank as determined from time
to time by the Employers' Boards of Directors, including general executive
duties and other powers and duties pertaining by law, regulations, or practice
to the office of Chief Executive Officer and President, or otherwise imposed by
the Bylaws of Employers;
c. Serve as full-time employee, and devote his ability and
attention to the business of Employers during the term of this Agreement, and
neither directly nor indirectly render any services of a business, commercial,
or professional nature, whether as employee, partner, officer, director or
shareholder, to any other person, firm, corporation or organization which in any
manner competes with Employers, whether for compensation or otherwise, nor
engage in any activity which is adverse to the Employers' business or welfare,
without the prior written consent of Employers' Boards of Directors; and
d. Act as a member of the Boards of Directors of Employers
if so elected by the shareholders of the Employers, and if appointed or elected
as a member of any committees established by the Employers' Boards of Directors,
to perform all of the duties and functions incident thereto.
The precise services to be performed by Employee may be extended
or curtailed, from time to time, at the discretion of the Employers' Boards of
Directors, provided such services shall at all times be of the nature
customarily performed by the Chief Executive Officer and President of a bank and
bank holding company, as the case may be.
2.2 Nothing contained herein shall be construed to prevent
Employee from investing his assets in any form or manner, or supervising these
investments, provided that such investment-related activities do not, in any
manner nor for any significant amount of time, interfere with his performance of
services on behalf of Employers, and provided further Employee shall not acquire
any direct or indirect ownership interest in any bank or financial institution,
other than Employers, where such ownership interest exceeds one tenth of one
percent of the total ownership interest in any bank or financial institution
other than Employers. This restriction shall only apply to banks or financial
institutions that are located within the service
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areas of any of Employers' offices and are in direct competition with Employers.
2.3 During the term hereof Employee shall not have a margin
account with any entity without the prior written consent of the Employers'
Boards of Directors.
2.4 Employee is a director of Bancorp and Bank and Employee and
Employers desire that Employee continue to serve as a director. Bancorp and
Bank shall use their reasonable best efforts to cause Employee to be elected a
director of both Boards of Directors at any meeting of the Boards or of the
shareholders held for the purpose of electing directors during the term of this
Agreement.
3. TERM. Unless terminated by other provisions contained herein,
the term of Employee's employment by Employers pursuant to this Agreement shall
be for a period of one and one half (1-1/2) consecutive calendar years,
commencing as of January 1, 1997 and terminating on June 30, 1998; PROVIDED,
HOWEVER, that Employers agree that on or before December 31, 1997, and on each
December 31 thereafter so long as this Agreement shall remain in force and not
terminate (each a "Consideration Date"), Employers' Boards of Directors will
consider an extension of this Agreement for an additional one year term
commencing on July 1, immediately following such Consideration Date and
terminating one year thereafter. If on, or within the twelve (12) month period
preceding, any Consideration Date the Employers' Boards of Directors do not by
written notice to Employee affirmatively extend the term of this Agreement for
one year, this Agreement shall terminate on June 30, immediately following such
Consideration Date, unless terminated earlier by the operation of other
provisions contained herein.
4. COMPENSATION AND OTHER BENEFITS. As compensation for the
services to be rendered by Employee hereunder, Employers shall pay and the
Employee shall accept the following compensation:
a. Employers shall pay to Employee a minimum base salary of
$210,000 per year, payable in equal semi-monthly installments, less usual
withholding deductions. The Employers' Boards of Directors will consider on an
annual basis on or before the end of the calendar year whether it is appropriate
or desirable to increase the amount of the base salary as of January 1 of the
next calendar year. Notwithstanding that the INITIAL TERM of this Agreement
commences as of January 1, 1995, the first consideration of an increase in base
salary shall occur before the end of calendar year 1994 for possible
implementation in calendar year 1995. Nothing herein shall be construed to
impose upon the Employers any obligation to increase the Employee's base salary,
but rather the Employers' Boards of Directors may
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increase Employee's base salary at any time in their absolute discretion.
b. Employers shall provide Employee during the term of this
Agreement with an automobile, purchased or leased new, comparable to a domestic
luxury sedan. Employers shall pay all reasonable operating expenses with regard
to such automobile and shall procure and maintain in force at Employers' expense
an insurance policy on such automobile which shall include collision,
comprehensive, medical payments and liability coverage with the limits mutually
agreed to by Employers and Employee.
c. As additional compensation, Employee shall, in the absolute
discretion of Employers' Boards of Directors, be entitled to participate in the
Employees' Senior Management Incentive Compensation Program or any other similar
program from time to time in effect.
d. During the term of Employee's employment under this
Agreement, Employee shall be entitled to receive other benefits of employment
made available to other employees of Employers, such as life, health and
accident insurance on Employee in the form, kind and amount made available under
group insurance coverage to employees of Employers plus directors and executive
officers (D&O) insurance coverage. Employee shall also be entitled to
participate in all of Employers' ERISA type plans in existence during the term
of this Agreement. Employee shall not be entitled to participate in any profit
sharing plans, incentive compensation programs or other benefit plans made
available to employees of Employers except as described in paragraph 4(c) or
other paragraphs of this Agreement.
e. In addition to any benefits payable to the Employee in
accordance with the provisions of any plan, agreement or arrangement described
above, Employers will purchase a term life insurance policy in the amount of
$400,000 on the life of the Employee, over and above the standard group
insurance benefits provided by the Employers, with the proceeds thereof to be
paid to the Employee's beneficiary or beneficiaries or to his estate, PROVIDED,
HOWEVER, that Employers' obligation to purchase such term life insurance policy
shall cease if it is reasonably determined by the Employers' Boards of Directors
that such purchase would in any way violate any applicable banking laws or
regulations. Such term life insurance policy shall remain in effect during the
term of this Agreement and shall be subject to Employee's passing any required
physical examination for such insurance coverage. In addition, the obligations
of Employers to purchase a term life insurance policy are subject to Employee
being insurable and the premiums for such policy being reasonable and in
conformity with those paid on an average person of Employee's age. Such term
life insurance policy shall be transferred to Employee at no cost to Employee
upon Employee's
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cessation of employment for any reason; PROVIDED that (i) the terms of such term
life insurance policy permit such transfer; (ii) that such transfer is in
compliance with all applicable banking laws and regulations as reasonably
determined by the Employers' Boards of Directors; (iii) that the Employers incur
no additional costs as a result of such transfer, other than payment of a
reasonable transfer fee; and (iv) that premiums relating to such term life
insurance policy shall thereafter be the responsibility of Employee.
f. Employee shall not be entitled to fees for service as a
director of Employers, including committee fees or any other fees or
compensation available to outside directors.
5. EXPENSES. Employee is authorized to incur reasonable expenses
for promoting the business of Employers, including expenses for entertainment,
travel, service club memberships and similar items. Any reasonable business
related costs incurred by Employee for conventions, meetings, and seminars will
be reimbursed by Employers as will all such reasonable expenses incurred by
Employee on behalf of Employers upon presentation by Employee, from time to
time, of an itemized account of his business related expenditures.
6. VACATIONS. Employee shall be entitled to an annual vacation
according to the Employers' personnel policy of not less than four (4) weeks
without reduction in salary. In the event that Employee has not utilized all
vacation days during a year, Employee shall be entitled to utilize such vacation
days during the first quarter of the next calendar year. Except as specified in
the preceding sentence, vacation days shall be non-cumulative. Employee shall
also be entitled to all paid holidays provided to Employers' senior officers.
Employee agrees to utilize his vacation in a manner which complies with all
applicable banking laws and regulations.
7. STOCK OPTIONS. Employers' Boards of Directors shall annually
consider the grant to Employee of stock options in such amounts which, when
aggregated with stock options already held by Employee, are commensurate with
amounts customarily awarded to executives with comparable responsibilities,
PROVIDED, HOWEVER, that the grant of such stock options shall be solely in the
discretion of the Employers' Boards of Directors and PROVIDED, FURTHER, that
Employers' Boards of Directors shall be under no obligation to grant stock
options to Employee at any time.
In an event constituting a Change in Control (as hereinafter defined)
shall be expected to occur, all previously granted stock options then
outstanding and not then otherwise fully exercisable shall, during the five
business day period immediately prior to the effective date of such Change of
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Control, be fully exercisable. If the anticipated Change in Control does not
occur for any reason, such options shall be reinstated on their previous terms
(and any exercise of options which would not otherwise have been exercisable
shall be unwound). This paragraph supersedes the terms of any option agreement
now or hereafter outstanding.
8. CLUB MEMBERSHIPS. Employers shall provide the use of a country
club membership to Employee for the promotion of Employers' business. Employers
shall be responsible for all costs related to such membership to the extent such
costs are business related (without regard, however, to whether such costs are
deductible for income tax purposes). If Employers are incapable of holding such
membership in corporate name, Employers shall provide to Employee funds
necessary to acquire such membership. Employee shall be entitled to use of such
membership during the term of this Agreement. During the term of this
Agreement, Employee shall be entitled to purchase such membership interest from
Employers at a purchase price equal to the then fair market value of such
membership. Upon Employee ceasing employment with Employers, Employee shall
transfer any and all ownership of such membership to Employers or a designee of
Employers unless Employee has purchased such memberships as provided above.
9. TERMINATION PRIOR TO EXPIRATION OF TERM.
9.1 TERMINATION BY EMPLOYERS FOR CAUSE. Employers, by vote or
written approval of the Boards of Directors duly taken in accordance with the
law and the Employers' Bylaws, may terminate this Agreement immediately, at
which time all obligations and liability of Employers under this Agreement shall
cease (except as to benefits then accrued), upon determination in good faith
that Employee (i) has been adjudged guilty of a felony or a misdemeanor
involving moral turpitude by a court of competent jurisdiction; (ii) has
committed any act which would cause termination of coverage under the Employers'
Bankers' Blanket Bond as to Employee (as distinguished from termination of
coverage as to the Employers as a whole); or (iii) has been grossly negligent or
has engaged in criminal misfeasance or willful misconduct in the performance of
his duties. For purposes of this section, an act, or failure to act, on the
Employee's part shall be considered "willful" only if done, or omitted to be
done, by him in bad faith and without reasonable belief that such act, or
failure to act, is in the best interest of the Employers.
9.2 TERMINATION BY EMPLOYERS WITHOUT CAUSE. Employers, by vote
or written approval of the Boards of Directors duly taken in accordance with the
law and Employers' Bylaws, may terminate this Agreement and rights hereunder,
without cause or any reason whatsoever, upon payment to Employee of the sum of
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eighteen (18) months base salary as in effect on the date of termination. Any
pay in lieu of vacation accrued to Employee, but not taken as of the date of
termination, will be deemed included in the termination pay. In the event of
termination under this Section 9.2 all stock options granted pursuant to
Section 7 hereunder shall become fully vested and immediately exercisable for a
period of not less than ninety (90) days following termination. In the event of
termination under this paragraph 9.2, insurance benefits provided to Employee by
Employers shall be extended at Employers' sole cost for twelve (12) months
following the date of termination. All remaining obligations and liability of
Employers under this Agreement shall cease at the date of termination, except as
to benefits then accrued.
9.3 ACQUISITION OR DISSOLUTION OF EMPLOYERS. This Agreement
shall not be terminated by the voluntary or involuntary dissolution of Employers
or by any merger or consolidation where Employers or either of them are not the
surviving or resulting corporation, or upon any transfer of all or substantially
all of the assets of Employers or either of them. In the event of any such
merger, consolidation or transfer of assets, the provisions of this Agreement
shall be binding upon and inure to the benefit of the surviving or resulting
corporation or the corporation to which such assets shall be transferred.
Notwithstanding the foregoing, in the event proceedings for
liquidation of Employers are commenced by regulatory authorities, this Agreement
and all rights and benefits hereunder shall terminate; PROVIDED, HOWEVER,
Employee will have the sole option to demand and receive the lesser of (i) one
year base salary based upon the salary being paid to Employee at the time of
such termination, or (ii) the balance payable under this Agreement.
9.4 DEATH OF EMPLOYEE. If Employee dies during the term of this
employment, Employers shall pay to the estate of Employee the compensation and
other rights hereunder which would otherwise be payable to Employee up to the
end of the month following the month in which his death occurs, and Employers
shall have no further obligations or liability under this Agreement (except as
to benefits then accrued). In the event of Employee's death, all stock options
granted pursuant to Section 7 hereunder shall become fully vested and
immediately exercisable by the estate of Employee for a period of not less than
ninety (90) days following Employee's death.
9.5 DISABILITY OF EMPLOYEE. If Employee becomes disabled during
the term of this Agreement and such disability continues for a period of one
hundred eighty (180) days, Employers, by vote or written approval of the Boards
of Directors
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duly taken in accordance with the law and Employers' Bylaws, may, at their
option, after the expiration of such period, terminate this Agreement by giving
written notice to Employee, at which time all obligations and liability of
Employers under this Agreement shall cease (except as to benefits then accrued).
While Employee is disabled, Employers shall pay to Employee one-hundred percent
(100%) of the monthly salary installments as provided in paragraph 3, but such
installments shall be reduced by all amounts paid to Employee on account of
disability insurance, worker's compensation or social security payments made to
Employee arising out of his disability other than medical, hospital or similar
health insurance; provided, however, that such payments by Employers shall cease
upon the earlier of (a) the expiration of the term of this Agreement, (b) the
earlier termination of this Agreement pursuant to its provisions, or (c) the
continuation of Employee's disability for a period of one hundred eighty (180)
days. For the purpose of this Agreement, the term "disabled" shall be defined
as Employee's inability, through physical or mental illness or other cause, to
perform normal and customary duties which he is required to perform under this
Agreement. In determining whether Employee is disabled, Employers' Boards of
Directors may rely upon the written statement provided by a licensed physician
acceptable to Employers' Boards of Directors. Employee shall allow himself to
be examined from time to time by any licensed physician selected by Employers'
Boards of Directors and agreed to by Employee. All such examinations will be
conducted within a reasonable time period.
9.6 TERMINATION BY EMPLOYEE. Employee shall give a minimum of
ninety (90) days prior notice, in writing, to Employers' Boards of Directors in
the event Employee resigns or voluntarily terminates employment. The Employers'
Boards of Directors, at their absolute discretion, may reduce the number of days
of prior notice required or may waive the provision in its entirety.
9.7 MISCELLANEOUS PROVISIONS REGARDING TERMINATION.
a. The paragraph in this Agreement providing for
Employers' right to terminate this Agreement shall be interpreted wholly
independent from and without reference to one another and shall not be construed
to impair or in any manner limit Employers' right to otherwise terminate this
Agreement pursuant to the laws of the State of California.
b. Subject to Section 7 hereof, Employee may exercise
Employee's rights to exercise any stock options vested prior to termination or
resignation, if any, and as provided in a Stock Option Plan and Stock Option
Agreement to which Employee is a party.
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10. NOTICE. Any written notice to be given to Employee by Employers
or their Boards of Directors may be given either by personal delivery to
Employee, or by mail, registered and certified, postage prepaid with return
receipt requested, addressed to Employee at his then current residence. Any
written notice to be given to Employers or their Boards of Directors by Employee
shall be given either by personal delivery to the Chairman of the Board of
Directors of Bancorp, or by Mail, registered or certified, postage prepaid with
return receipt requested, addressed to the Chairman of the Board of Directors of
Bancorp at the administrative office of Bancorp.
11. PAYMENTS RESULTING FROM "CHANGE IN CONTROL".
11.1 DEFINITION OF "CHANGE IN CONTROL". For purposes of the
Agreement, a "Change in Control" shall be deemed to have occurred if and when:
(a) the Bancorp shall consummate a merger or consolidation
(a "Transaction") with another corporation, association or similar entity;
PROVIDED, HOWEVER, that a Change of Control shall not be deemed to have occurred
with respect to a Transaction if the beneficial owners of the outstanding shares
entitled to vote in the election of directors of Bancorp immediately prior to
such Transaction will beneficially own more than sixty percent (60%) of the
outstanding shares entitled to vote in the election of directors of the
corporation resulting from the consummation of the Transaction; or
(b) twenty-five percent (25%) of the Bancorp's securities
then entitled to vote in the election of directors shall be acquired by any
"person" (as such term is used in Sections 13(d) of the Securities Exchange Act
of 1934, as amended); or
(c) during any period of twenty-four (24) consecutive
months, individuals who at the beginning of such period were members of the
Board of Directors of the Bancorp (the "Incumbent Board") shall cease to
constitute a majority of the Board of Directors of the Bancorp or any successor
to the Bancorp, provided that any person becoming a director subsequent to the
beginning of such period whose election or nomination for election was approved
by a vote of at least eighty-five percent (85%) of the directors comprising the
Incumbent Board shall be, for purposes hereof, considered as though such person
were a member of the Incumbent Board; or
(d) the Bancorp or the Bank shall sell all, or
substantially all, of its assets to another corporation.
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11.2 COVERED TERMINATION.
(a) The benefits described in Section 11.4 hereof shall be
provided to the Employee in the event that his employment with the Employers is
terminated following, or in contemplation of, a Change of Control on account of
a "Covered Termination."
(b) "Covered Termination" shall mean (i) termination of
employment by the Employers other than for "Cause," as described in Section 9.1
hereof or the disability of Employee as described in Section 9.5 hereof or (ii)
termination of Employee's employment by the Employee for "Good Reason" as
described in Section 11.3 hereof.
11.3 TERMINATION BY EMPLOYEE FOR GOOD REASON.
(a) For purposes hereof, following a Change in Control the
Employee may terminate his employment for Good Reason if:
(i) the Employee's then-current level of annual base
salary (whether payable by the either of the Employers) is reduced; or
(ii) there is any reduction in the employee benefit
coverage provided to the Employee (including pension, profit sharing
and welfare benefits and perquisites, but not including incentive
bonuses) from the coverage levels in effect immediately prior to the
Change in Control, unless, however, the Employers provide
substantially equivalent employee benefits to the Employee; or
(iii) the Employee suffers a material diminution in his
title, position, reporting relationship, responsibilities, authority
or offices; or
(iv) there is a relocation of the Employee's principal
business office by more than ten (10) miles, and (a) the Employee's
new commute is more than fifty (50) miles from the Employee's current
primary residence or (b) the Employee's new commute is more than the
Employee's current commute which is at least fifty (50) miles; or
(v) the Employers fail to obtain assumption of this
agreement by any successor or assign;
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PROVIDED, HOWEVER, that any termination by the Employee for Good Reason must be
made in good faith.
(b) Notwithstanding the provisions of Section 11.3(a), no
such termination of the Employee's employment for Good Reason shall be treated
as a Covered Termination unless (i) the Employee shall give written notice to
the Employers' Boards of Directors, not later than thirty (30) days prior to the
effective date of any such termination for Good Reason and within six (6) months
after the date the Employee first becomes entitled to terminate for Good Reason
on account of the event(s) forming the basis for such termination, setting forth
in specific detail the basis for such termination for Good Reason, and (ii) the
Employers' Boards of Directors shall not, within thirty (30) days after receipt
of such notice, take actions reasonably acceptable to the Employee to remedy the
circumstances leading to the termination for Good Reason.
11.4 BENEFITS RESULTING FROM A COVERED TERMINATION.
In the event that the employment of the Employee shall have been
terminated after, or in contemplation of, a Change in Control in a manner that
shall constitute a Covered Termination, the Employers shall make payments to,
and provide benefit coverage for, the Employee as described below in Section
11.4, PROVIDED, HOWEVER, that any such benefits resulting from a "Covered
Termination" shall be in lieu of any termination benefits to which Employee
might otherwise be entitled pursuant to Section 9.2 hereof.
(a) BASE SALARY. The Employee shall receive a payment
equal to two and one half (2 1/2) times the highest annual base salary amount
paid to the Employee within the three years preceding the Covered Termination.
Such payment shall be made to the Employee within fifteen (15) business days
following the Covered Termination. The highest annual base salary amount shall
not include any bonuses awarded to the Employee.
(b) TARGET BONUS. The Employee shall also receive a payment
equal to the amount of the Employee's target bonus in the year that the Covered
Termination occurs under any Employers' incentive compensation plan in which the
Employee then participates ; PROVIDED HOWEVER, that if a Covered Termination
shall take place between January 1 and June 30, such payment to the Employee
shall be prorated and reduced to an amount equal to the product of (i) the
Employee's target bonus in the year that the Covered Termination occurs, and
(ii) a quotient of which the numerator will be the number of months that have
elapsed between January 1 immediately preceding the Covered Termination and the
date of the Covered Termination, rounded up to the next whole number, and the
denominator shall be twelve (12). Such payment
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shall be made to the Employee within fifteen (15) business days following the
Covered Termination.
(c) WELFARE BENEFITS. The Employers shall continue to
maintain, in full force and effect, any "Welfare Benefits," such as life
insurance coverage and health and disability benefits, which were being provided
to the Employee at the time of the Covered Termination during the "Continuation
Period." The Continuation Period shall mean the thirty (30) month period
following the date of a Covered Termination.
Notwithstanding the above, the Employers may provide
coverage and benefits under separate insured arrangements that provide benefits
substantially identical to those being provided to the Employee at the time of
the Covered Termination.
In addition, the Employee's right to any particular
type of Welfare Benefit shall be subject to cancellation by the Employers if the
Employee obtains alternative coverage of a similar type during the Continuation
Period that is at least as favorable to the Employee as the corresponding
Welfare Benefit. The Employee shall be obligated to notify the Employers'
Boards of Directors of any such alternative coverage within thirty (30) days of
it first becoming applicable to him.
(c) WITHHOLDING FOR TAXES. All payments required to be
made by the Employers to the Employee under this Agreement shall be subject to
the withholding of such amounts, if any, relating to tax, excise tax and other
payroll deductions as the Employers may reasonably determine it should withhold
pursuant to any applicable law or regulation.
(d) MITIGATION. The Employee shall not be obligated to
seek other employment in mitigation of the amounts payable and benefits to be
provided under this Agreement.
12. EXCISE TAX LIMIT. Notwithstanding anything elsewhere in this
Agreement to the contrary, if any of the payments provided for in this
Agreement, together with any other payments or benefits which the Employee has
the right to receive from the Employers (or its affiliated companies), would
constitute a "parachute payment" (as defined in Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the "Code")), the payments pursuant
to this Agreement shall be reduced so that the present value of the total amount
received by the Employee that would constitute a "parachute payment" will be one
dollar ($1.00) less than three (3) times the Employee's base amount (as defined
in Section 280G of the Code) and so that no portion of the payments or benefits
received by the Employee shall be subject to the excise tax imposed by Section
4999 of the Code. If through error or otherwise the Employee should receive
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payments under this Agreement or otherwise in excess of one dollar ($1.00) less
than three (3) times his base amount, the Employee shall immediately repay such
excess to the Employers upon notification that an overpayment has been made.
13. ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of Employers, their successors and assigns. Employee may not assign
all or any part of his interest under this Agreement without the prior written
consent of Employers' Boards of Directors.
14. RECEIPT OF AGREEMENT. Each of the parties hereto acknowledges
that he or it has Agreement in its entirety and does hereby acknowledge receipt
of a fully executed copy thereof. A fully executed copy shall be an original
for all purposes, and is a duplicate original.
15. ARBITRATION AND ATTORNEYS' FEES. Any controversy between the
Employers and Employee involving the construction or application of any of the
terms, provisions or conditions of this Agreement shall, on the written request
of either party served on the other, be submitted to arbitration, and such
arbitration shall comply with and be governed by the provisions of the
California Arbitration Act, Sections 1280 through 1294.2 of the California Code
of Civil Procedure. Both parties shall agree upon an arbitrator from the
Los Angeles County Superior Court panel and, if they are unable to agree on an
arbitrator, then each will choose an arbitrator, who together will select a
third impartial arbitrator whose decision shall be final and conclusive upon all
parties. The cost of arbitration shall be borne by the losing party or in such
proportion as the arbitrator shall decide. In any arbitration proceeding and in
action at law or in equity to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees and costs
and necessary disbursements in addition to any other relief to which he may be
entitled, except to the extent arbitrator(s) may otherwise be permitted to
apportion costs and disbursements.
16. CALIFORNIA LAW. This Agreement is to be governed by and
construed under the laws of the State of California except to the extent that
any federal law regulating banks may apply.
17. CAPTIONS AND SECTION HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not a part of this Agreement and
shall not be used in construing it.
18. INVALID PROVISIONS. Should any part of this Agreement for any
reason be declared invalid, the validity and binding effect of any remaining
portion shall not be affected,
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and the remaining portions of this Agreement shall remain in force and effect as
if this Agreement had been executed with the invalid provisions eliminated.
19. ENTIRE AGREEMENT. This Agreement contains the entire Agreement
between the Parties with respect to the employment of Employee by Employers, and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties. No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
20. WAIVER OF BREACH. The failure to enforce at any time any of the
provisions of this Agreement, or to require at any time performance by the other
party of any of the provisions hereof, shall in no way be construed to be a
waiver of such provisions or to effect either the validity of this Agreement or
any part hereof or the right of either party thereafter to enforce each and
every provision in accordance with the terms of this Agreement.
21. INDEMNIFICATION. To the fullest extent permitted by law,
Employers shall pay as and when incurred all expenses, including legal and
attorney costs, incurred by, or shall satisfy as and when entered or levied a
judgment or fine rendered or levied against, Employee in an action brought by a
third party against Employee (whether or not Employers are joined as party
defendants) to impose a liability or penalty on Employee for an act alleged to
have been committed by Employee while an officer of Employers or each of them;
provided, that Employee was acting in good faith, within what Employee
reasonably believed to be the scope of Employee's employment or authority and
for a purpose which Employee reasonably believed to be in the best interests of
Employers or Employers' shareholders, and in the case of a criminal proceeding,
that Employee had no reasonable cause to believe that Employee's conduct was
unlawful. Payments authorized hereunder include amounts paid and expenses
incurred in settling any such action or threatened action. All rights hereunder
are limited by any applicable state or Federal laws.
22. EXPENSES. Employers shall pay or reimburse Employee for legal
fees and expenses incurred by him in the review and negotiation of this
Agreement.
23. JOINT AND SEVERAL OBLIGATIONS. The obligations of the Bancorp
and the Bank hereunder are joint and several; provided, however, that if, based
upon the written advice of the Bank's regulatory legal counsel, the Board of
Directors of the Bank determines in its sole discretion that the portion of the
compensation and other benefits actually paid by the Bank (as opposed to
Bancorp) under Section 4 hereunder would otherwise violate any regulatory order,
regulation or statute, including
14
Sections 23A or 23B of the Federal Reserve Act, such obligations of the Bank
shall be limited to the extent necessary to comply with such provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the day and year herein before set forth.
SC BANCORP
By
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Xxxxx X. Xxxxxxx
SOUTHERN CALIFORNIA BANK
By
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