EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 1st
day of January, 1995, between The Bank of Commerce, N.A. ("Bank"), Auburn
Bancorp ("Bancorp"), (collectively referred to herein as "Employers"), and Xxxx
X. Xxxxxx (hereinafter referred to as "Executive").
WITNESSETH:
WHEREAS, Employers are desirous of employing Executive in the capacity
hereinafter stated, and Executive is desirous of continuing in the employ of
Employers in such capacity, for the period and on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
conditions herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. EMPLOYMENT
Employers hereby employ Executive as their President and Chief Executive
Officer, and Executive accepts the duties that are customarily performed by the
President and Chief Executive Officer of a national banking association and bank
holding company and accepts all other duties described herein, and agrees to
discharge the same faithfully and to the best of his ability and consistent with
the highest and best standards of the banking industry, in accordance with the
policies of Employers' Boards of Directors as established, and in compliance
with all laws and Bank's Articles of Association, Bylaws, Policies and
Procedures and Bancorp's Articles of Incorporation, Bylaws, Policies and
Procedures. Executive shall devote his full business time and attention to the
business and affairs of Employers for which he is employed and shall perform the
duties thereof to the best of his ability. Except as permitted by the prior
written consent of Employers' Boards of Directors, Executive shall not directly
or indirectly render any services of a business, commercial or professional
nature to any other person, firm or corporation, whether for compensation or
otherwise, which
AUB-05259410.1-12/9
E-1
are in conflict with Employers' interests. Executive shall perform such other
duties as shall be from time to time prescribed by Employers' Boards of
Directors.
Executive shall have such responsibility and duties and such authority to
transact business on behalf of Employers, as are customarily incident to the
office of President and Chief Executive Officer of a national banking
association and a bank holding company.
2. TERM
Employers hereby employ Executive, and Executive hereby accepts employment with
Employers for the period of five (5) years (the "Term"), commencing January 1,
1995 with such Term being subject to prior termination as hereinafter provided.
Where used herein, "Term" shall refer to the entire period of employment of
Executive by Employers, whether for the period provided above, or whether
terminated earlier as hereinafter provided, or extended by mutual agreement in
writing by Employers and Executive.
3. COMPENSATION
In consideration for all services to be rendered by Executive to Employers,
Employers agree to pay Executive a starting base salary of One Hundred Twenty
Thousand Dollars ($120,000) per year, commencing January 1, 1995. Employers'
Boards of Directors shall in their discretion determine any increases in
Executive's base salary after the first anniversary of the Term. Executive's
salary shall be paid semi-monthly. Employers shall deduct therefrom all taxes
which may be required to be deducted or withheld under any provision of the law
(including, but not limited to, social security payments and income tax
withholding) now in effect or which may become effective anytime during the term
of this Agreement.
Executive shall be entitled to participate in any and all other employee
benefits and plans that may be developed and adopted by Employers and which
Executive is eligible to participate.
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4. BONUS AND SALARY CONTINUATION PLAN
Executive shall be entitled to participate in Bank's current existing Executive
Compensation Plan ("Bonus Plan"). In addition, Bank and Executive have entered
into a salary continuation agreement which shall be governed by its own terms.
5. STOCK OPTION
Bancorp's Board of Directors may grant Executive additional stock options to
purchase shares of Bancorp's common stock, at the price per share to be set at
the market value per share of Bancorp's common stock at the time of the grant.
The terms of the stock option grant, including the numbers of shares that may be
acquired thereunder shall be determined by Bancorp's Board of Directors in its
discretion.
6. AUTOMOBILE AND REIMBURSEMENT
Employers agree to provide Executive with a current American model luxury
automobile which shall be used primarily in connection with Employers' business.
Executive shall be responsible for all costs associated with Executive's
personal use of such automobile.
Employers agree to reimburse Executive for all ordinary and necessary expenses
incurred by Executive on behalf of Employers, including entertainment, meals and
travel expenses. Any costs incurred by Executive for conventions, meetings and
seminars will be reimbursed as well as special social entertainment expenses,
provided Employers' Boards of Directors approve such.
7. INSURANCE
Employers agree to continue to provide Executive with health and life insurance
benefits which are now or may hereinafter be in effect for all other full-time
employees. Employers may also apply for a "keyman" life insurance policy with
Employers as beneficiaries of the policy.
8. VACATION
Executive shall be entitled to accrue up to four (4) weeks vacation during each
year of the Term with at least two (2) weeks to be
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taken in a consecutive period. Vacation benefits shall not accrue above four
weeks at any time. Employers' Boards of Directors, in their discretion, may
waive the provision with respect to unused vacation time.
9. TERMINATION
Employers shall have the right to terminate this Agreement for any of the
following reasons by serving written notice upon Executive:
(a) willful breach of, habitual neglect of, willful failure to
perform, or inability to perform, Executive's duties and
obligations as President and Chief Executive Officer;
(b) illegal conduct, constituting a crime involving moral
turpitude, conviction of a felony, or any conduct
detrimental to the interests of Employers;
(c) physical or mental disability rendering Executive incapable of
performing his duties for a consecutive period of 180 days, or by
death. In the event of such disability, Employers will provide
salary continuation for 180 days, less accrued sick leave.
Accrued sick leave is to be utilized until exhausted prior to
salary continuation provided herein; or
(d) determination by Employers' Boards of Directors that the
continued employment of Executive is detrimental to the best
interests of Employers, or for any reason whatsoever as
determined by Employers' Boards of Directors and in the sole and
absolute discretion of Employers' Boards of Directors.
In the event this Agreement is terminated for any of the reasons specified in
the paragraphs (a), (b), or (c) above, Executive will be paid two weeks' salary
calculated as of the date of Executive's termination, plus any pay in lieu of
vacation accrued to, but not taken as of the date of termination. Such
termination pay shall be considered to be in full and complete satisfaction of
any and all rights which Executive may enjoy under the terms of this Agreement
other than rights, if any, to exercise any of the stock options vested prior to
such termination. The insurance benefits provided herein shall be extended at
Employers' sole cost until the end of the month in which Executive is
terminated.
In the event this Agreement is terminated for any reason specified in paragraph
(d) above, Executive shall be entitled to termination
E-4
pay in an amount equal to two (2) years of Executive's then base annual salary.
Such termination pay shall be paid in one lump sum and shall be considered to be
in full and complete satisfaction of any and all rights which Executive may
enjoy under the terms of this Agreement including any pay in lieu of vacation
accrued to, but not taken as of the date of termination, other than rights, if
any, to exercise any of the stock options vested prior to such termination.
Where termination is pursuant to paragraph (d), above, the insurance benefits
provided herein shall be extended at Employers' sole cost for the remainder of
the month and six (6) full months following the date of termination.
Executive shall give one hundred twenty (120) days prior notice, in writing, to
Employers in the event Executive resigns or voluntarily terminates employment.
Notwithstanding anything to the contrary, this section shall not apply in the
event of an Acquisition as that term is defined in Section 10 herein, and after
an Acquisition the provisions of Section 10 shall apply to any termination of
Executive's employment with Employers as provided for in this Agreement.
10. ACQUISITION OR DISSOLUTION OF EMPLOYERS
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of Employers. 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. In the event of any merger or consolidation where Employers are not
the surviving or resulting corporations, or upon transfer of all or
substantially all of the assets of Employers (any of these events shall be
referred to as an "Acquisition"), this Agreement shall continue and be in full
force and effect. In the event of an Acquisition, if Executive is not retained
by the resulting corporation for the remaining period of this Agreement in a
position comparable to that of the highest level vice president of the resulting
corporation or
E-5
a lower position as may be accepted by Executive, the resulting corporation
shall pay Executive a lump sum amount in cash equal to the sum of (i) two (2)
years of Executive's base annual salary based on Executive's base annual salary
immediately prior to the Acquisition, (ii) the amount necessary to cover
Executive's federal and California state income taxes on two (2) years of
Executive's base annual salary as computed in subclause (i) and (iii) the amount
necessary to cover any "golden parachute taxes" that may be assessed pursuant to
Section 280G of the Internal Revenue Code of 1986, as amended from time to time
on such lump sum payment to Executive. The resulting corporation may substitute
a legal opinion of a major law firm acceptable to Executive that states
unequivocally that no "golden parachute taxes" will be assessed against
Executive in lieu of the payment of "golden parachute taxes" that may be
assessed against Executive. Such lump sum payment shall be paid within ten (10)
days of the date of Executive's employment is terminated by the resulting
corporation or Executive's voluntary termination if Executive leaves voluntarily
because of a change in Executive's position with the resulting corporation such
that Executive is no longer in a position comparable to that of the highest
level vice president of the resulting corporation or a position that had been
accepted by Executive. The lump sum payment shall be considered to be in full
and complete satisfaction of any and all rights which Executive may enjoy under
the terms of this Agreement, other than (i) rights under the Executive's salary
continuation agreement and (ii) rights, if any, to exercise any of the stock
options vested prior to such termination.
11. INDEMNIFICATION
To the extent permitted by law, Employers 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 Employers are 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 interest of Employers (and with respect to a
E-6
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 employee of
Employers.
12. RETURN OF DOCUMENTS
Executive expressly agrees that all manuals, documents, files, reports, studies,
instruments or other materials used or developed by Executive during the Term
are solely the property of Employers, and Executive has no right, title or
interest therein. Upon termination of this Agreement, Executive or Executive's
representatives shall promptly deliver possession of all of said property to
Employers in good condition.
13. NOTICES
Any notice, request, demand, or other communication required or permitted
hereunder shall be deemed to be properly given when personally served in
writing, when deposited in the U.S. mail, postage prepaid, or when communicated
to a public telegraph company for transmittal, addressed as follows:
To Bank: The Bank of Commerce, N.A.
000 Xxxx Xx.
Xxxxxx, Xxxxxxxxxx 00000
Attention: Board of Directors
To Bancorp: Auburn Bancorp
000 Xxxx Xx.
Xxxxxx, Xxxxxxxxxx 00000
Attention: Board of Directors
To Executive: Xxxx X. Xxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Any party hereto may change its or his address for purposes of this Section by
giving notice in accordance herewith.
14. BENEFIT OF AGREEMENT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective executors, administrators, successors and assigns.
X-0
00. APPLICABLE LAW
This Agreement is made and entered into in the State of California, and the laws
of said State shall govern the validity and interpretation hereof, and the
performance of the parties hereto and their respective duties and obligations
hereunder, except to the extent modified by applicable provisions of Title 12 of
the United States Code.
16. CAPTIONS AND PARAGRAPH HEADINGS
Captions and paragraph headings used herein are for convenience only and are not
a part of this Agreement and shall not be used in construing it.
17. INVALID PROVISIONS
Should any provision of this Agreement for any reason be declared invalid, void,
or unenforceable by a court of competent jurisdiction, the validity and binding
effect of any remaining portions shall not be affected and the remaining
portions of this Agreement shall remain in full force and effect as if this
Agreement had been executed with said provision eliminated.
18. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and it supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Executive by Employers, except for
Executive's existing salary continuation agreement and stock option agreement
and except to the extent that it is contemplated that Executive and Bancorp may
enter into an additional stock option agreement. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement, or
promise not contained in this Agreement shall be valid or binding. This
Agreement may not be modified or amended by oral agreement, but only by an
agreement in writing signed by Employers and Executive.
X-0
00. CONFIDENTIALITY
This Agreement is to be held confidential. Willful breach of such
confidentiality by Executive will be subject to termination under the provisions
of 9(a) of this Agreement.
20. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled pursuant to an arbitration agreement to be
entered into by the parties, and in the event there is no arbitration agreement,
then in accordance with the rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered into any
court having jurisdiction thereof.
21. LEGAL COSTS
If either Executive or Employers commences an action against the other arising
out of or in connection with this Agreement, the prevailing party(ies) shall be
entitled to have and recover from the losing party(ies) reasonable attorney's
fees and costs of suit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE BANK OF COMMERCE, N.A.
By: /s/ D. XXXXXX XXXX, M.D.
------------------------------
D. Xxxxxx Xxxx, M.D., Chairman
AUBURN BANCORP
By: /s/ D. XXXXXX XXXX, M.D.
------------------------------
D. Xxxxxx Xxxx, M.D., Chairman
/s/ XXXX X. XXXXXX
-------------------------------
Xxxx X. Xxxxxx
E-9
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 6th
day of July, 1994, between The Bank of Commerce, N.A. ("Bank"), Auburn Bancorp
("Bancorp"), (collectively referred to herein as "Employers"), and Xxxx X. Xxxx
(hereinafter referred to as "Executive").
WITNESSETH:
WHEREAS, Employers are desirous of employing Executive in the capacity
hereinafter stated, and Executive is desirous of continuing in the employ of
Employers in such capacity, for the period and on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
conditions herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. EMPLOYMENT
Employers hereby employ Executive as Bank's Executive Vice President and Chief
Credit Officer, and Executive accepts the duties that are customarily performed
by the Chief Credit Officer of a national banking association and accepts all
other duties described herein, and agrees to continue to discharge the same
faithfully and to the best of his ability and consistent with past performances
and the highest and best standards of the banking industry, in accordance with
the policies of Employers' Boards of Directors as established, and in compliance
with all laws and Bank's Articles of Association, Bylaws, Policies and
Procedures. Executive shall devote his full business time and attention to the
business and affairs of Employers for which he is employed and shall perform the
duties thereof to the best of his ability. Except as permitted by the prior
written consent of Employers' Boards of Directors, Executive shall not directly
or indirectly render any services of a business, commercial or professional
nature to any other person, firm or corporation, whether for compensation or
otherwise, which are in conflict with Employers'
AUB-05249410.1-6/21
E-10
interests. Executive shall perform such other duties as shall be from time to
time prescribed by Employers' Boards of Directors.
Executive shall have such responsibility and duties and such authority to
transact business on behalf of Employers, as are customarily incident to the
office of Chief Credit Officer of a national banking association.
2. TERM
Employers hereby employ Executive, and Executive hereby accepts employment with
Employers for the period of three (3) years (the "Term"), commencing January 1,
1995 with such Term being subject to prior termination as hereinafter provided.
Where used herein, "Term" shall refer to the entire period of employment of
Executive by Employers, whether for the period provided above, or whether
terminated earlier as hereinafter provided, or extended by mutual agreement in
writing by Employers and Executive.
3. COMPENSATION
In consideration for all services to be rendered by Executive to Employers,
Employers agree to pay Executive a starting base salary of Eighty-Four Thousand
Six Hundred Twenty-Five Dollars ($84,625) per year, commencing January 1, 1995.
Employers' Boards of Directors shall in their discretion determine any increases
in Executive's base salary after the first anniversary of the Term. Executive's
salary shall be paid semi-monthly. Employers shall deduct therefrom all taxes
which may be required to be deducted or withheld under any provision of the law
(including, but not limited to, social security payments and income tax
withholding) now in effect or which may become effective anytime during the term
of this Agreement.
Executive shall be entitled to participate in any and all other employee
benefits and plans that may be developed and adopted by Employers and which
Executive is eligible to participate.
E-11
4. BONUS AND SALARY CONTINUATION PLAN
Executive shall be entitled to participate in Bank's current existing Executive
Compensation Plan ("Bonus Plan"). Bank's Board of Directors may in its
discretion offer Executive a salary continuation/deferred compensation agreement
with the terms thereof to be determined.
5. STOCK OPTION
Bancorp's Board of Directors may grant Executive additional stock options to
purchase shares of Bancorp's common stock, at the price per share to be set at
the market value per share of Bancorp's common stock at the time of the grant.
The terms of the stock option grant, including the numbers of shares that may be
acquired thereunder shall be determined by Bancorp's Board of Directors in its
discretion.
6. AUTOMOBILE AND REIMBURSEMENT
Employers agree to provide Executive with a full-sized domestic automobile which
shall be used primarily in connection with Employers' business. Executive shall
be responsible for all costs associated with Executive's personal use of such
automobile.
Employers agree to reimburse Executive for all ordinary and necessary expenses
incurred by Executive on behalf of Employers, including entertainment, meals and
travel expenses. Any costs incurred by Executive for conventions, meetings and
seminars will be reimbursed as well as special social entertainment expenses,
provided Employers' Boards of Directors approve such.
7. INSURANCE
Employers agree to continue to provide Executive with health and life insurance
benefits which are now or may hereinafter be in effect for all other full-time
employees. Employers may also apply for a "keyman" life insurance policy with
Employers as beneficiaries of the policy.
E-12
8. VACATION
Executive shall be entitled to accrue up to four (4) weeks vacation during each
year of the Term with at least two (2) weeks to be taken in a consecutive
period. Vacation benefits shall not accrue above four weeks at any time.
Employers' Boards of Directors, in their discretion, may waive the provision
with respect to unused vacation time.
9. TERMINATION
Employers shall have the right to terminate this Agreement for any of the
following reasons by serving written notice upon Executive:
(a) willful breach of, habitual neglect of, willful failure to
perform, or inability to perform, Executive's duties and
obligations as Chief Credit Officer;
(b) illegal conduct, constituting a crime involving moral
turpitude, conviction of a felony, or any conduct
detrimental to the interests of Employers;
(c) physical or mental disability rendering Executive incapable of
performing his duties for a consecutive period of 180 days, or by
death. In the event of such disability, Employers will provide
salary continuation for 180 days, less accrued sick leave.
Accrued sick leave is to be utilized until exhausted prior to
salary continuation provided herein; or
(d) determination by Employers' Boards of Directors that the
continued employment of Executive is detrimental to the best
interests of Employers, or for any reason whatsoever as
determined by Employers' Boards of Directors and in the sole and
absolute discretion of Employers' Boards of Directors.
In the event this Agreement is terminated for any of the reasons specified in
the paragraphs (a), (b), or (c) above, Executive will be paid two weeks' salary
calculated as of the date of Executive's termination, plus any pay in lieu of
vacation accrued to, but not taken as of the date of termination. Such
termination pay shall be considered to be in full and complete satisfaction of
any and all rights which Executive may enjoy under the terms of this Agreement
other than rights, if any, to exercise any of the stock options vested prior to
such termination. The insurance benefits provided herein shall be extended at
Employers' sole cost until the end of the month in which Executive is
terminated.
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In the event this Agreement is terminated for any reason specified in paragraph
(d) above, Executive shall be entitled to termination pay which shall be the
lesser of (i) six months of the then base annual salary due Executive or (ii)
the amount that would be due Executive for serving the remainder of the Term
pursuant to this Agreement. Such termination pay shall be paid in one lump sum
and shall be considered to be in full and complete satisfaction of any and all
rights which Executive may enjoy under the terms of this Agreement including any
pay in lieu of vacation accrued to, but not taken as of the date of termination,
other than rights, if any, to exercise any of the stock options vested prior to
such termination.
Where termination is pursuant to paragraph (d), above, the insurance benefits
provided herein shall be extended at Employers' sole cost for the remainder of
the month and three (3) full months following the date of termination.
Executive shall give thirty (30) days prior notice, in writing, to Employers in
the event Executive resigns or voluntarily terminates employment.
10. ACQUISITION OR DISSOLUTION OF EMPLOYER
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of Employers. 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. In the event of any merger or consolidation where Employers are not
the surviving or resulting corporations, or upon transfer of all or
substantially all of the assets of Employers, and Executive is not retained by
the resulting corporation in a position satisfactory to Executive, Executive
shall be paid an amount equal to nine (9) months of Executive's then base annual
salary, or the then base annual salary due Executive for the remainder of the
Term, whichever is less, subject however, to a minimum amount equal to six (6)
months of Executive's then base annual salary should the remaining Term be six
(6) months or less. Such lump sum payment shall be considered to be in full and
complete satisfaction of any and all rights which
E-14
Executive may enjoy under the terms of this Agreement, other than rights, if
any, to exercise any of the stock options vested prior to such termination.
11. INDEMNIFICATION
To the extent permitted by law, Employers 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 Employers are 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 interest of Employers (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 employee of Employers.
12. RETURN OF DOCUMENTS
Executive expressly agrees that all manuals, documents, files, reports, studies,
instruments or other materials used or developed by Executive during the Term
are solely the property of Employers, and Executive has no right, title or
interest therein. Upon termination of this Agreement, Executive or Executive's
representatives shall promptly deliver possession of all of said property to
Employers in good condition.
13. NOTICES
Any notice, request, demand, or other communication required or permitted
hereunder shall be deemed to be properly given when personally served in
writing, when deposited in the U.S. mail, postage prepaid, or when communicated
to a public telegraph company for transmittal, addressed as follows:
To Bank: The Bank of Commerce, N.A.
000 Xxxx Xx.
Xxxxxx, Xxxxxxxxxx 00000
Attention: Board of Directors
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To Bancorp: Auburn Bancorp
000 Xxxx Xx.
Xxxxxx, Xxxxxxxxxx 00000
Attention: Board of Directors
To Executive: Xxxx X. Xxxx
00000 Xxxxx Xxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Any party hereto may change its or his address for purposes of this Section by
giving notice in accordance herewith.
14. BENEFIT OF AGREEMENT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective executors, administrators, successors and assigns.
15. APPLICABLE LAW
This Agreement is made and entered into in the State of California, and the laws
of said State shall govern the validity and interpretation hereof, and the
performance of the parties hereto and their respective duties and obligations
hereunder, except to the extent modified by applicable provisions of Title 12 of
the United States Code.
16. CAPTIONS AND PARAGRAPH HEADINGS
Captions and paragraph headings used herein are for convenience only and are not
a part of this Agreement and shall not be used in construing it.
17. INVALID PROVISIONS
Should any provision of this Agreement for any reason be declared invalid, void,
or unenforceable by a court of competent jurisdiction, the validity and binding
effect of any remaining portions shall not be affected and the remaining
portions of this Agreement shall remain in full force and effect as if this
Agreement had been executed with said provision eliminated.
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18. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and it supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Executive by Employers, except to the
extent that it is contemplated that Executive and Bancorp may enter into a stock
option agreement. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. This Agreement may not be
modified or amended by oral agreement, but only by an agreement in writing
signed by Employers and Executive.
19. CONFIDENTIALITY
This Agreement is to be held confidential. Willful breach of such
confidentiality by Executive will be subject to termination under the provisions
of 9(a) of this Agreement.
20. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled pursuant to an arbitration agreement to be
entered into by the parties, and in the event there is no arbitration agreement,
then in accordance with the rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered into any
court having jurisdiction thereof.
21. LEGAL COSTS
If either Executive or Employers commences an action against the other arising
out of or in connection with this Agreement, the prevailing party(ies) shall be
entitled to have and recover from the losing party(ies) reasonable attorney's
fees and costs of suit.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE BANK OF COMMERCE, N.A.
By: /s/ D. XXXXXX XXXX, M.D.
______________________________
D. Xxxxxx Xxxx, M.D., Chairman
AUBURN BANCORP
By: /s/ D. XXXXXX XXXX, M.D.
_______________________________
D. Xxxxxx Xxxx, M.D., Chairman
XXXX X. XXXX
/s/ XXXX X. XXXX
-------------------------------
E-18
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 19th
day of December, 1995, between The Bank of Commerce, N.A. ("Bank"), Auburn
Bancorp ("Bancorp"), (collectively referred to as "Employers"), and Xxxxxx X.
Xxxxxx ("Executive").
WITNESSETH:
WHEREAS, Employers are desirous of employing Executive in the capacity
hereinafter stated, and Executive is desirous of continuing in the employ of
Employers in such capacity, for the period and on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
conditions herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. EMPLOYMENT
Employers hereby employ Executive as Bank's Executive Vice President and Chief
Financial Officer, and Executive accepts the duties that are customarily
performed by the Executive Vice President and Chief Financial Officer of a
national banking association and accepts all other duties described herein, and
agrees to continue to discharge the same faithfully and to the best of his
ability and consistent with past performances and the highest and best standards
of the banking industry, in accordance with the policies of Employers' Boards of
Directors as established, and in compliance with all laws and Bank's Articles of
Association, Bylaws, Policies and Procedures. Executive shall devote his full
business time and attention to the business and affairs of Employers for which
he is employed and shall perform the duties thereof to the best of his ability.
Except as permitted by the prior written consent of Employers' Boards of
Directors, Executive shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person, firm or
corporation, whether for compensation or otherwise, which are in conflict with
Employers' interests. Executive shall perform such other duties as shall be from
time to time prescribed by Employers' Boards of Directors.
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Executive shall have such responsibility and duties and such authority to
transact business on behalf of Employers, as are customarily incident to the
office of Executive Vice President and Chief Financial Officer of a national
banking association.
2. TERM
Employers hereby employ Executive, and Executive hereby accepts employment with
Employers, for the period of three (3) years (the "Term") commencing January 1,
1996, with such Term being subject to prior termination as hereinafter provided.
Where used herein, "Term" shall refer to the entire period of employment of
Executive by Employers, whether for the period provided above, or whether
terminated earlier as hereinafter provided, or extended by mutual agreement in
writing by Employers and Executive.
3. COMPENSATION
In consideration for all services to be rendered by Executive to Employers,
Employers agree to pay Executive a starting base salary of Eighty-Three Thousand
One Hundred Dollars ($83,100) per year, commencing January 1, 1996. Employers'
Boards of Directors shall in their discretion determine any increases in
Executive's base salary after the first anniversary of the Term. Executive's
salary shall be paid semi-monthly. Employers shall deduct therefrom all taxes
which may be required to be deducted or withheld under any provision of the law
(including, but not limited to, social security payments and income tax
withholding) now in effect or which may become effective any time during the
term of this Agreement.
Executive shall be entitled to participate in any and all other employee
benefits and plans that may be developed and adopted by Employers and in which
Executive is eligible to participate.
4. BONUS AND SALARY CONTINUATION PLAN
Executive shall be entitled to participate in Bank's existing Executive
Compensation Plan ("Bonus Plan"). Bank's Board of Directors may in its
discretion offer Executive a salary continuation/deferred compensation agreement
with the terms thereof to be determined.
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5. STOCK OPTION
Bancorp's Board of Directors may grant Executive additional stock options to
purchase shares of Bancorp's common stock, at the price per share to be set at
the market value per share of Bancorp's common stock at the time of the grant.
The terms of the stock option grant, including the numbers of shares that may be
acquired thereunder, shall be determined by Bancorp's Board of Directors in its
discretion.
6. AUTOMOBILE AND REIMBURSEMENT
Employers agree to provide Executive with a full-sized domestic automobile which
shall be used primarily in connection with Employers' business. Executive shall
be responsible for all costs associated with Executive's personal use of such
automobile.
Employers agree to reimburse Executive for all ordinary and necessary expenses
incurred by Executive on behalf of Employers, including entertainment, meals and
travel expenses. Any costs incurred by Executive for conventions, meetings and
seminars will be reimbursed as well as special social entertainment expenses,
provided Employers' Boards of Directors approve such.
7. INSURANCE
Employers agree to continue to provide Executive with health and life insurance
benefits which are now or may hereinafter be in effect for all other full-time
employees. Employers may also apply for a "keyman" life insurance policy with
Employers as beneficiaries of the policy.
8. VACATION
Executive shall be entitled to accrue up to four (4) weeks' vacation during each
year of the Term with at least two (2) weeks to be taken in a consecutive
period. Vacation benefits shall not accrue above four weeks at any time.
Employers' Boards of Directors, in their discretion, may waive the provision
with respect to unused vacation time.
9. TERMINATION
Employers shall have the right to terminate this Agreement for any of the
following reasons by serving written notice upon Executive:
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a. willful breach of, habitual neglect of, willful failure to
perform, or inability to perform, Executive's duties and
obligations as Executive Vice President and Chief Financial
Officer;
b. illegal conduct constituting a crime involving moral turpitude,
conviction of a felony, or any conduct detrimental to the
interests of Employers;
c. physical or mental disability rendering Executive incapable of
performing his duties for a consecutive period of 180 days, or by
death. In the event of such disability, Employers will provide
salary continuation for 180 days, less accrued sick leave.
Accrued sick leave is to be utilized until exhausted prior to
salary continuation provided herein; or
d. determination by Employers' Boards of Directors that the
continued employment of Executive is detrimental to the best
interests of Employers, or for any reason whatsoever as
determined by Employers' Boards of Directors and in the sole and
absolute discretion of Employers' Boards of Directors.
In the event this Agreement is terminated for any of the reasons specified in
the paragraphs a, b or c above, Executive will be paid two weeks' salary
calculated as of the date of Executive's termination, plus any pay in lieu of
vacation accrued to, but not taken as of, the date of termination. Such
termination pay shall be considered to be in full and complete satisfaction of
any and all rights which Executive may enjoy under the terms of this Agreement
other than rights, if any, to exercise any of the stock options vested prior to
such termination. The insurance benefits provided herein shall be extended at
Employers' sole cost until the end of the month in which Executive is
terminated.
In the event this Agreement is terminated for any reason specified in paragraph
(d) above, Executive shall be entitled to termination pay which shall be the
lesser of (i) six months of the then base annual salary due Executive, or (ii)
the amount that would be due Executive for serving the remainder of the Term
pursuant to this Agreement. Such termination pay shall be paid in one lump sum
and shall be considered to be in full and complete satisfaction of any and all
rights which Executive may enjoy under the terms of this Agreement including any
pay in lieu of vacation accrued to, but not taken as of, the date of
termination, other than rights, if any, to exercise any of the stock options
vested prior to such termination.
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Where termination is pursuant to paragraph (d), above, the insurance benefits
provided herein shall be extended at Employers' sole cost for the remainder of
the month and three (3) full months following the date of termination.
Executive shall give thirty (30) days' prior notice, in writing, to Employers in
the event Executive resigns or voluntarily terminates employment.
10. ACQUISITION OR DISSOLUTION OF EMPLOYER
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of Employers. 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. In the event of any merger or consolidation where Employers are not
the surviving or resulting corporations, or upon transfer of all of
substantially all of the assets of Employers and Executive is not retained by
the resulting corporation in a position satisfactory to Executive, Executive
shall be paid an amount equal to nine (9) months of Executive's then base annual
salary, or the then base annual salary due Executive for the remainder of the
Term, whichever is less, subject, however, to a minimum amount equal to six (6)
months of Executive's then base annual salary should the remaining Term be six
(6) months or less. Such lump sum payment shall be considered to be in full and
complete satisfaction of any and all rights which Executive may enjoy under the
terms of this Agreement, other than rights, if any, to exercise any of the stock
options vested prior to such termination.
11. INDEMNIFICATION
To the extent permitted by law, Employers 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 Employers are 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 interest of Employers (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 employee of Employers.
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12. RETURN OF DOCUMENTS
Executive expressly agrees that all manuals, documents, files, reports, studies,
instruments or other materials used or developed by Executive during the Term
are solely the property of Employers, and Executive has no right, title or
interest therein. Upon termination of this Agreement, Executive or Executive's
representatives shall promptly deliver possession of all of said property to
Employers in good condition.
13. NOTICES
Any notice, request, demand or other communication required or permitted
hereunder shall be deemed to be properly given when personally served in
writing, when deposited in the U.S. mail, postage prepaid, or when communicated
to a public telegraph company for transmittal, addressed as follows:
To Bank: The Bank of Commerce, N.A.
Attention: Board of Directors
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
To Bancorp: Auburn Bancorp
Attention: Board of Directors
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
To Executive: Xxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Any party hereto may change its or his address for purposes of this Section by
giving notice in accordance herewith.
14. BENEFIT OF AGREEMENT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective executors, administrators, successors and assigns.
15. APPLICABLE LAW
This Agreement is made and entered into in the State of California, and the laws
of said State shall govern the validity and interpretation hereof, the
performance of the parties hereto, and their respective duties and obligations
hereunder, except to the extent modified by applicable provisions of Title 12 of
the United States Code.
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16. CAPTIONS AND PARAGRAPH HEADINGS
Captions and paragraph headings used herein are for convenience only and are not
a part of this Agreement and shall not be used in construing it.
17. INVALID PROVISIONS
Should any provision of this Agreement for any reason be declared invalid, void
or unenforceable by a court of competent jurisdiction, the validity and binding
effect of any remaining portions shall not be affected and the remaining
portions of this Agreement shall remain in full force and effect as if this
Agreement had been executed with said provision eliminated.
18. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and it supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Executive by Employers, except to the
extent that it is contemplated that Executive and Bancorp may enter into a stock
option agreement. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. This Agreement may not be
modified or amended by oral agreement but only by an agreement in writing signed
by Employers and Executive.
19. CONFIDENTIALITY
This Agreement is to be held confidential. Willful breach of such
confidentiality by Executive will be subject to termination under the provisions
of 9.a. of this Agreement.
20. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled pursuant to an arbitration agreement to be
entered into by the parties, and in the event there is no arbitration agreement,
then in accordance with the rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered into any
court having jurisdiction thereof.
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21. LEGAL COSTS
If either Executive or Employers commences an action against the other arising
out of or in connection with this Agreement, the prevailing party(ies) shall be
entitled to have and recover from the losing party(ies) reasonable attorney's
fees and costs of suit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
THE BANK OF COMMERCE, N.A.
By: /s/ D. XXXXXX XXXX, M.D.
------------------------------
D. Xxxxxx Xxxx, M.D., Chairman
AUBURN BANCORP
By: /s/ D. XXXXXX XXXX, M.D.
------------------------------
D. Xxxxxx Xxxx, M.D., Chairman
/s/ XXXXXX X. XXXXXX
------------------------------
Xxxxxx X. Xxxxxx
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