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EXHIBIT 10
EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXX
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This Employment Agreement (the "Agreement") is made and entered into by
and between REDDING BANCORP, a California corporation, and XXXXXXX BANK OF
COMMERCE, a California corporation, a wholly owned subsidiary of REDDING BANCORP
(collectively the "Bank"), and XXXXXXX X. XXXXX (the "Executive"). This
Agreement is effective with respect to Executive's employment with Redding Bank
of Commerce as of January 1, 2001, and with respect to Executive's employment
with Redding Bancorp as of May 1, 2001.
1. EMPLOYMENT, TERM AND DUTIES:
(a) EMPLOYMENT: The Bank hereby employs Executive as the
President and Chief Executive Officer of Redding Bancorp and Redding Bank of
Commerce, and Executive accepts such employment.
(b) DUTIES: Executive shall be the President and Chief Executive
Officer of the Bank, and in that capacity shall perform the duties customarily
performed in such offices and agrees to discharge the same faithfully and to the
best of his ability and in keeping with the highest and best standards of the
banking industry, subject to the policies and procedures of the Bank and to the
authority of the Board of Directors of the Bank. Executive shall hold and
perform all the responsibilities and duties prescribed by the Board and by the
Bylaws of the Bank. Executive shall devote his full business time and attention
to the business and affairs of the Bank and shall not, during the term of this
Agreement, directly or indirectly, either as an employee, employer, consultant,
agent, principal, partner, major stockholder, corporate officer, director, or in
any other individual or representative capacity, engage or participate in any
business that is in competition in any manner whatsoever with the business of
the Bank.
Executive shall have such responsibility and duties and
such authority to transact business on behalf of the Bank, as are customarily
incident to the office of President and Chief Executive Officer of a financial
services holding company and a state chartered banking institution.
2. TERM: The term of this Agreement shall commence as provided
hereinabove and terminate at midnight, December 31, 2005, subject only to
earlier termination as hereinafter provided in Section 4, and further subject to
extension by mutual agreement in writing between Bank and Executive.
3. COMPENSATION AND FRINGE BENEFITS:
(a) SALARY: The Bank agrees to pay to Executive an annual base
salary of Ninety-Three Thousand Dollars ($93,000.00) for the period beginning
January 1, 2001, through April 30, 2001, and the sum of One Hundred Fifteen
Thousand Dollars ($115,000.00) for the period beginning May 1, 2001, through the
remainder of the Term of this Agreement. Executive's salary shall be paid
semi-monthly in accordance with the policy of the Bank with respect to payment
of all employees. The Bank shall deduct
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from Executive's salary all taxes which may be required to be deducted or
withheld under any provision of law now in effect or which may become effective
at any time during the Term of this Agreement.
Nothing herein shall preclude the Board of Directors of
Bank in its discretion from authorizing an increase in base compensation in
excess of the amount set forth hereinabove.
(b) PROFIT SHARING: Executive shall be eligible to participate
in the Bank's Profit Sharing Plan as now or in the future adopted by Bank.
Profit sharing as currently defined by the Bank's Profit Sharing Plan will be
based on pretax earnings that exceed a twenty percent (20%) return on Bank's
beginning shareholder equity. Profit sharing for Executive for the calendar year
2001 will be calculated at a rate of one and eighty-three hundredths percent
(1.83%) from January 1, 2001, until May 1, 2001, and two and fifteen hundredths
percent (2.15%) from and after May 1, 2001, of pretax earnings after a return to
shareholders of twenty percent (20%) before any investments, security gains or
losses.
For years subsequent to 2001, the percentages for
calculating profit sharing for Executive shall be established on an annual basis
by the Executive Compensation Committee of the Bank, subject to Board of
Director approval.
(c) DISCRETIONARY BONUS: In the sole and absolute discretion of
the Board of Directors of Bank, a discretionary annual bonus for the calendar
year 2001 of not to exceed Twenty-Five Thousand Dollars ($25,000.00) may be paid
to Executive based upon Executive's meeting or exceeding financial performance
results established by and in the sole discretion of the Bank's Board of
Directors.
For years subsequent to 2001, the amount of the
discretionary bonus shall be established on an annual basis by the Executive
Compensation Committee of the Bank, subject to Board of Director approval.
(d) FRINGE BENEFITS: The Bank agrees to provide Executive with
the following benefits for so long as Executive is employed under this
Agreement:
(i) An automobile suitable to Executive's position
with the Bank, such automobile having a
predetermined value as may, from time to time,
be established by the Executive Compensation
Committee of the Bank. The Bank shall pay or
reimburse Executive for all necessary and
customary expenses for such automobile, incurred
by Executive in the conduct of the business of
the Bank, including maintenance, insurance and
expenses of operation. The automobile provided
to Executive shall be replaced every three (3)
years. Upon termination of this Agreement for
any reason, Executive shall be entitled to
purchase the automobile which Executive is then
using at the Xxxxxx Blue Book wholesale ("Trade
In") value of that automobile.
(ii) The Bank will sponsor and pay for a proprietary
membership and monthly dues in the Riverview
Country Club for the use by Executive for
business development.
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(iii) Health and life insurance benefits that are now
or may hereafter be provided for all full-time
employees of Bank. Executive shall also be
entitled to a "key man" life and disability
insurance policy with salary continuation
benefits for Executive as such policy and
benefits are set forth in the Salary
Continuation Agreement between Bank and
Executive, dated April 17, 2001.
(iv) An annual paid vacation of four (4) weeks, with
at least two (2) weeks of such vacation to be
taken consecutively. Executive's vacation
benefit shall not, without prior written consent
of the Bank's Board of Directors, accrue to an
amount in excess of six (6) weeks at any time.
(v) Executive is authorized to incur necessary and
customary expenses in connection with the
business of the Bank, including expenses for
entertainment, travel, meals, cellular phone,
promotional and similar matters. The Bank will
pay or reimburse Executive for these expenses
upon presentation of appropriate records which
verify such expenses.
(vi) Executive is authorized to incur necessary and
customary expenses which will be reimbursed by
the Bank for professional education,
publications, seminars, meetings, all as
provided for and in accordance with the existing
policies of the Bank.
(vii) The Bank hereby agrees to and shall, to the
maximum extent permitted by law and its By-Laws,
indemnify and hold Executive harmless for any
acts or decisions made by Executive in good
faith while performing services for Bank. To the
same extent, Bank will pay, and subject to any
legal limitations, advance all expenses,
including reasonable attorney's fees and costs,
and will pay all court approved settlements,
actually and necessarily incurred by Executive
in connection with the defense of any action,
suit or proceeding, and in connection with any
appeal which has been brought against Executive
by reason of his service as an officer or
employee of the Bank.
The Bank shall further use its best efforts to
obtain coverage for Executive (provided that
such coverage may be obtained at a reasonable
cost) under any liability insurance policy or
policies now in force or hereafter obtained
during the term of this Agreement that provides
coverage for officers, directors or employees of
Bank having comparable or lesser status and
responsibility.
(viii) Other benefits as the Board of Directors
approves from time to time.
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4. TERMINATION:
(a) This agreement shall terminate upon the first to occur of
the following events:
(i) The expiration of the term provided for in
Section 1; or
(ii) The death of Executive; or
(iii) The permanent disability of Executive, as
defined in Section 4(b) hereof; or
(iv) Termination by the Bank "for cause", as defined
in Section 4(c), hereof.
(v) Determination by the Bank's Board of Directors
that the continued employment of Executive is
detrimental to the best interests of the Bank;
or for any other reason whatsoever as determined
by the Bank's Board of Directors in their sole
and absolute discretion.
(b) DISABILITY: As used in this Employment Agreement, "Permanent
Disability" shall mean six (6) months of substantially continuous disability.
Disability shall be deemed "substantially continuous" if, as a practical matter,
Executive by reason of his mental or physical health, is unable to sustain
reasonably long periods of substantial performance of his duties. Frequent long
illnesses, though different from the preceding illness and though separated by
relatively short periods of performance, shall be deemed to be "substantially
continuous". The determination of Executive's disability shall be made by the
Bank in good faith after appropriate consultation with physicians who are
familiar with Executive's health. In this regard, Executive hereby consents to
medical examinations by such physicians and medical consultants as the Bank
shall from time to time require.
(c) CAUSE: As used in this Agreement, "Termination for Cause"
shall include, but shall not be limited to, termination due to Executive's:
habitual intemperance, drug addiction or abuse; acts involving moral turpitude,
conviction of a felony; acts which cause detrimental publicity for the Bank;
habitual neglect of duty; willful or gross negligence in carrying out the
activities for which employed, including negligence or neglect in carrying out
the directions of the Board of Directors, or willful breach of the obligations
of Executive to the Bank under this Agreement, or persistent malfeasance,
misfeasance or nonfeasance in connection with the performance of Executive's
duties.
5. CONTINUATION OF BENEFITS FOLLOWING TERMINATION: In the event of the
termination of this Agreement prior to the end of the Term, Executive shall be
entitled to the continuation of certain benefits as follows:
(a) TERMINATION FOR CAUSE OR AT ELECTION OF EXECUTIVE: In the
event of the termination of this Agreement for cause, pursuant to Section
4(a)(iv) of this Agreement, or in the event Executive voluntarily resigns or
terminates his employment, Executive shall be entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
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(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
(iv) Payment of any sums due under any profit sharing
plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date.
(b) TERMINATION DUE TO DEATH OR PERMANENT DISABILITY: In the
event of the termination of this Agreement due to the death of Executive or
permanent disability of Executive, as defined in this Agreement, Executive shall
be entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
(iv) Payment of any sums due under any profit sharing
plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date; and
(v) Payment to Executive or, in the event of
Executive's death, to Executive's spouse or
Beneficiary, those benefits provided pursuant to
the Salary Continuation Agreement.
(c) TERMINATION UPON CHANGE OF CONTROL: In the event of the
termination of Executive's employment within twenty-four (24) months of the
consummation of a Change of Control of Bank as described in Section 6 of this
Agreement, or if, pursuant to an event described in Section 6, Executive's
responsibilities and duties are substantially diminished, Executive shall be
entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
(iv) Payment of any sums due under any profit sharing
plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date; and
(v) Payment of an amount equal to eighteen (18)
months' base salary, together with payment of an
amount equal to eighteen (18) months' profit
sharing, with the amount of such profit sharing
payment to be computed based upon the average
profit sharing received by Executive for the
three (3) prior calendar years.
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(vi) Continuation, at the Bank's sole cost and
expense, of health insurance benefits then being
provided to Executive for the maximum period
allowed under the Consolidated Omnibus
Reconciliation Act of 1985 ("COBRA"), but not to
exceed eighteen (18) months.
(vii) Payment to Executive or, in the event of
Executive's death, to Executive's spouse or
beneficiary, of those benefits provided pursuant
to the Salary Continuation Agreement.
(d) TERMINATION ON DISCHARGE: In the event of the termination of
the Executive's employment pursuant to Section 4(a)(v) of this Agreement,
Executive shall be entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
(iv) Payment of any sums due under the Profit Sharing
Plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date; and
(v) Payment to Executive at the time of termination
of twelve (12) months' base salary and
continuation, at Bank's sole cost and expense,
of health insurance benefits then being provided
to Executive for a twelve (12) month period
following termination.
(vi) Payment to Executive or, in the event of
Executive's death, to Executive's spouse or
beneficiary, of those benefits provided for
Early Termination pursuant to the Salary
Continuation Agreement.
6. CHANGE OF CONTROL: In the event of a merger or a consolidation where
Bank is not the surviving entity, or in the event of a transfer of all or
substantially all of the assets of Bank, or in the event of a change in control
whereby any one person or entity acquires or beneficially owns more than fifty
percent (50%) of Bank's or Redding Bancorp's outstanding capital stock, or
whereby upon any merger, consolidation, transfer or sale, the Board of Directors
of Bank is not controlled by individuals who, prior to such merger,
consolidation, transfer or sale, were members of the Board of Directors of Bank.
Bank may, at its sole option:
(a) Assign this Agreement, and all rights and obligations under
it, to any business entity which succeeds to all or substantially all of the
Bank's business through any such Change of Control.
(b) Upon an assignment of this Agreement as hereinabove set
forth, Bank shall be unconditionally released from all of its duties and
obligations hereunder, provided that the assignee shall expressly and
unconditionally assume and agree to perform all of the duties and obligations of
Bank required by this Agreement; or on at least sixty (60) days' prior written
notice to Executive, Bank may
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terminate this Agreement, effective on the date of the Change of Control. In the
event of the termination of Executive, upon Change of Control, or within
twenty-four (24) months of the effective date of any such Change of Control,
Executive shall be entitled to receive those benefits provided for in Section
5(c) of this Agreement.
7. DISCLOSURE OF CONFIDENTIAL INFORMATION: Executive acknowledges that
the Bank possesses methods of operation and information concerning its business
affairs which are valuable, special, and unique assets of the Bank's business.
Without prior written approval of the Bank, Executive agrees not to disclose,
during or after the term of his employment, any such information, or any part
thereof, to any bank, person, firm, corporation, association, or other entity
for any reason or purpose whatsoever. This information shall include, but not be
limited to, Bank practices, methods of operation, financial position, financial
dealings and customer lists. Further, Executive agrees not to disclose except as
required in the normal conduct of Bank's business, during or after the term of
his employment, any customer's names, customer relationships with others,
customer's financial position, or the existence, balance, or amounts of loans,
accounts or other customer dealings with Bank. This provision may be enforced
either through injunction or specific performance of this Agreement by the Bank.
8. NOTICE OF VOLUNTARY TERMINATION: Executive covenants and agrees that
in the event Executive shall resign or voluntarily terminate his employment with
the Bank, Executive shall give to the Bank ninety (90) days' prior written
notice of such termination or resignation.
9. SOLICITATION OF BANK CUSTOMERS: Executive agrees that in the event
that his employment with the Bank shall terminate for any reason, he shall not,
for a period of one (1) year, make known to, or call on, solicit or take away,
or attempt to call on, solicit or take away on behalf of any person, firm or
corporation which is in competition, either directly or indirectly, with the
Bank, any existing customers of the Bank or individuals or entities with whom
the Bank is negotiating for the Bank's services. This provision may be enforced
either through injunction or specific performance of this Agreement by the Bank.
In the event of a Change of Control, if his employment is
terminated, or upon Executive's Termination for Cause, Executive shall be
unconditionally released from all of his duties and obligations under this
paragraph.
10. EXECUTION OF THIS AGREEMENT: The execution of this Employment
Agreement by the Bank was authorized at the Board of Directors Meeting held on
April 17, 2001.
11. MISCELLANEOUS:
(a) NOTICES: Any notices to be given by either party to the
other shall be in writing and may be transmitted either by personal delivery or
by mail, registered or certified, postage prepaid with return receipt requested.
Notices delivered personally shall be deemed communicated as of the date of
actual receipt; mailed notices shall be deemed communicated as of the date of
mailing.
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(b) ASSIGNMENT: The provisions of this Agreement shall inure to
the benefit of the parties hereto, their heirs, legal representatives,
successors and assigns. Without limiting the generality of this foregoing,
nothing herein shall prevent Bank from assigning this Agreement to any affiliate
of Bank; provided, however, that no such assignment shall (unless the Executive
shall so agree in writing) release Bank of liability directly to the Executive
for the due performance of all of the terms, covenants and conditions of this
Agreement to be complied with and performed by Bank. The term "affiliate", as
used herein, shall mean any corporation, firm, partnership or other entity
controlling, controlled by or under common control with Bank. The obligations of
the Executive under this Agreement shall be personal and not assignable or
delegable by him in any manner whatsoever.
(c) NEGOTIATION, MEDIATION AND ARBITRATION: The parties will
attempt in good faith to resolve promptly any dispute, controversy, or claim
arising out of or relating to this Agreement or any claimed breach thereof by
direct negotiation between principals of the parties who have authority to
settle the controversy. To facilitate such negotiations, it is agreed that a
disputing party shall give the other party written notice of the dispute
providing reasonable particularity with respect to all issues deemed to be
controverted or disputed. Within ten (10) days after such notice is given, the
principals of the parties shall meet at a mutually acceptable time and place,
and thereafter as often as those individuals reasonably deem necessary to
exchange relevant information and attempt to resolve all disputes.
If the disputes have not been resolved within thirty
(30) days after the disputing party gives notice, or if the party receiving
notice declines to meet, either party may initiate mediation of the controversy,
claim or dispute in accordance with the following mediation provisions. Upon
failure of the negotiations as set forth above, the parties to this contract
agree to mediate any dispute, controversy or claim arising out of this Agreement
prior to resorting to arbitration as hereinafter provided. Mediation is a
process in which parties attempt to resolve a dispute by submitting it to an
impartial, neutral mediator who is authorized to facilitate the resolution of
the dispute, but who is not empowered to impose a settlement on the parties. The
parties shall attempt to mutually agree upon an impartial mediator, which
mediator shall be appointed jointly and compensated equally by the parties. In
the event the parties are unable to agree on an impartial mediator, then and in
that event each party shall submit to the other a list with five (5) names of
attorneys or retired judges who practice in Northern California, and who have no
ongoing professional or business relationship with either of the parties. From
the lists, the parties shall, beginning with the Bank, cross unacceptable names
from the list until such time as two (2) potential mediators remain. The
potential remaining mediators shall then be contacted to determine if they are
available and willing to act as mediator. In the event that both are willing and
able to act as mediator, the mediator shall be chosen alphabetically, with the
mediator's last name serving as the alphabetical basis for choice. Should none
of the original list of mediators be available, new lists shall be prepared and
the process again undertaken.
Following mediation or in the event that for any reason
no mediation has been held, all disputes, controversies or claims must be
resolved by binding arbitration as hereinafter set forth.
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If a party commences an arbitration based on a dispute or claim
as to which this section applies, without first attempting to resolve the matter
through mediation as above provided, then and in that event, such party shall
not be entitled to recover attorney's fees, costs or expert fees, even if they
would otherwise be available to that party in any such arbitration.
Executive and Bank agree that any dispute, controversy or claim,
in law or equity, arising between themselves out of this Agreement or the
employment or termination of Executive which is not settled through mediation
must be decided by neutral binding arbitration and not be court action, except
as provided by California Law for Judicial Review of Arbitration Proceedings.
Arbitration shall be conducted under and pursuant to the
provisions of California Code of Civil Procedure Section 1280, et seq.,
including the provisions of Section 1283.05, as are in effect at the time of the
arbitration, and judgment may be entered on the award as therein provided.
If any party refuses or neglects to appear at or participate in
arbitration after reasonable notice, the arbitrator may decide the controversy
in accordance with whatever evidence is presented by the party or parties who do
participate. The arbitrator may award any remedy that is just and equitable in
the arbitrator's opinion. The arbitrator shall award to the prevailing party or
parties such sums as are proper to compensate for the time, expense, and trouble
of arbitration, including arbitration fees, attorney fees and costs, and expert
fees.
Except as awarded by the arbitrator as hereinabove set forth,
all fees to the arbitrator shall be paid in equal shares by the parties to the
arbitration.
(d) ATTORNEY'S FEES AND COSTS: If any action at law or in equity,
including arbitration, is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs, and expert witness fees, in addition to any other relief to which that
party may be entitled.
(e) ENTIRE AGREEMENT: This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Executive by the Bank, and contains all of the covenants
and agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement, or promise not contained in this
Agreement shall be valid or binding.
(f) MODIFICATIONS: Any modification of this Agreement will be effective
only if it is in writing signed by the party to be charged.
(g) EFFECT OF WAIVER: The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this Agreement by
the other party shall not be deemed a waiver of that term, covenant, or
condition, 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.
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(h) 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 without being
impaired or invalidated in any way.
(i) GOVERNING LAW: The formation, construction, and performance
of this Agreement shall be construed in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective the date first above written.
REDDING BANCORP REDDING BANK OF COMMERCE
BY /s/ Xxxxxx X. Xxxxxxxx BY /s/ Xxxxxx X. Xxxxxxxx
--------------------------------- ----------------------------------
XXXXXX X. XXXXXXXX, XXXXXX X. XXXXXXXX,
CHAIRMAN CHAIRMAN
BY /s/ Xxxxx X. Xxxxx BY /s/ Xxxxx X. Xxxxx
--------------------------------- ----------------------------------
XXXXX X. XXXXX, SECRETARY XXXXX X. XXXXX, SECRETARY
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
XXXXXXX X. XXXXX
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EMPLOYMENT AGREEMENT
XXXXX X. XXXXX
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This Employment Agreement (the "Agreement") is made and entered into by
and between REDDING BANCORP, a California corporation, and REDDING BANK OF
COMMERCE, a California corporation , a wholly owned subsidiary of REDDING
BANCORP (collectively the "Bank"), and XXXXX X. XXXXX (the "Executive"). This
Agreement is effective with respect to Executive's employment with Redding Bank
of Commerce as of January 1, 2001, and with respect to Executive's employment
with Redding Bancorp as of May 1, 2001.
1. EMPLOYMENT, TERM AND DUTIES:
(a) EMPLOYMENT: The Bank hereby employs Executive as the
Executive Vice President and Chief Financial Officer of Redding Bancorp and
Redding Bank of Commerce, and Executive accepts such employment.
(b) DUTIES: Executive shall be the Executive Vice President and
Chief Financial Officer of the Bank, and in that capacity shall perform the
duties customarily performed in such offices and agrees to discharge the same
faithfully and to the best of her ability and in keeping with the highest and
best standards of the banking industry, subject to the policies and procedures
of the Bank and to the authority of the Board of Directors of the Bank.
Executive shall hold and perform all the responsibilities and duties prescribed
by the Board and by the Bylaws of the Bank. Executive shall devote her full
business time and attention to the business and affairs of the Bank and shall
not, during the term of this Agreement, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, major stockholder,
corporate officer, director, or in any other individual or representative
capacity, engage or participate in any business that is in competition in any
manner whatsoever with the business of the Bank.
Executive shall have such responsibility and duties and
such authority to transact business on behalf of the Bank, as are customarily
incident to the office of Executive Vice President and Chief Financial Officer
of a financial services holding company and a state chartered banking
institution.
2. TERM: The term of this Agreement shall commence as provided
hereinabove and terminate at midnight, December 31, 2005, subject only to
earlier termination as hereinafter provided in Section 4, and further subject to
extension by mutual agreement in writing between Bank and Executive.
3. COMPENSATION AND FRINGE BENEFITS:
(a) SALARY: The Bank agrees to pay to Executive an annual base
salary of Ninety-Three Thousand Dollars ($93,000.00), through the remainder of
the Term of this Agreement. Executive's salary shall be paid semi-monthly in
accordance with the policy of the Bank with respect to payment of all
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employees. The Bank shall deduct from Executive's salary all taxes which may be
required to be deducted or withheld under any provision of law now in effect or
which may become effective at any time during the Term of this Agreement.
Nothing herein shall preclude the Board of Directors of
Bank in its discretion from authorizing an increase in base compensation in
excess of the amount set forth hereinabove.
(b) PROFIT SHARING: Executive shall be eligible to participate
in the Bank's Profit Sharing Plan as now or in the future adopted by Bank.
Profit sharing as currently defined by the Bank's Profit Sharing Plan will be
based on pretax earnings that exceed a twenty percent (20%) return on Bank's
beginning shareholder equity. Profit sharing for Executive for the calendar year
2001 will be calculated at a rate of one and eighty-three hundredths percent
(1.83%) of pretax earnings after a return to shareholders of twenty percent
(20%) before any investments, security gains or losses.
For years subsequent to 2001, the percentages for
calculating profit sharing for Executive shall be established on an annual basis
by the Executive Compensation Committee of the Bank, subject to Board of
Director approval.
(c) DISCRETIONARY BONUS: In the sole and absolute discretion of
the Board of Directors of Bank, a discretionary annual bonus for the calendar
year 2001 of not to exceed Twenty Thousand Dollars ($20,000.00) may be paid to
Executive based upon Executive's meeting or exceeding financial performance
results established by and in the sole discretion of the Bank's Board of
Directors.
For years subsequent to 2001, the amount of the
discretionary bonus shall be established on an annual basis by the Executive
Compensation Committee of the Bank, subject to Board of Director approval.
(d) FRINGE BENEFITS: The Bank agrees to provide Executive with
the following benefits for so long as Executive is employed under this
Agreement:
(i) An automobile suitable to Executive's position
with the Bank, such automobile having a
predetermined value as may, from time to time,
be established by the Executive Compensation
Committee of the Bank. The Bank shall pay or
reimburse Executive for all necessary and
customary expenses for such automobile, incurred
by Executive in the conduct of the business of
the Bank, including maintenance, insurance and
expenses of operation. The automobile provided
to Executive shall be replaced every three (3)
years. Upon termination of this Agreement for
any reason, Executive shall be entitled to
purchase the automobile which Executive is then
using at the Xxxxxx Blue Book wholesale ("Trade
In") value of that automobile.
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(ii) The Bank will sponsor and pay for a proprietary
membership and monthly dues in the Riverview
Country Club for the use by Executive for
business development.
(iii) Health and life insurance benefits that are now
or may hereafter be provided for all full-time
employees of Bank. Executive shall also be
entitled to a "key woman" life and disability
insurance policy with salary continuation
benefits for Executive as such policy and
benefits are set forth in the Salary
Continuation Agreement between Bank and
Executive, dated April 17, 2001.
(iv) An annual paid vacation of four (4) weeks, with
at least two (2) weeks of such vacation to be
taken consecutively. Executive's vacation
benefit shall not, without prior written consent
of the Bank's Board of Directors, accrue to an
amount in excess of six (6) weeks at any time.
(v) Executive is authorized to incur necessary and
customary expenses in connection with the
business of the Bank, including expenses for
entertainment, travel, meals, cellular phone,
promotional and similar matters. The Bank will
pay or reimburse Executive for these expenses
upon presentation of appropriate records which
verify such expenses.
(vi) Executive is authorized to incur necessary and
customary expenses which will be reimbursed by
the Bank for professional education,
publications, seminars, meetings, all as
provided for and in accordance with the existing
policies of the Bank.
(vii) The Bank hereby agrees to and shall, to the
maximum extent permitted by law and its By-Laws,
indemnify and hold Executive harmless for any
acts or decisions made by Executive in good
faith while performing services for Bank. To the
same extent, Bank will pay, and subject to any
legal limitations, advance all expenses,
including reasonable attorney's fees and costs,
and will pay all court approved settlements,
actually and necessarily incurred by Executive
in connection with the defense of any action,
suit or proceeding, and in connection with any
appeal which has been brought against Executive
by reason of her service as an officer or
employee of the Bank.
The Bank shall further use its best efforts to
obtain coverage for Executive (provided that
such coverage may be obtained at a reasonable
cost) under any liability insurance policy or
policies now in
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force or hereafter obtained during the term of
this Agreement that provides coverage for
officers, directors or employees of Bank having
comparable or lesser status and responsibility.
(viii) Other benefits as the Board of Directors
approves from time to time.
4. TERMINATION:
(a) This agreement shall terminate upon the first to occur of the
following events:
(i) The expiration of the term provided for in
Section 1; or
(ii) The death of Executive; or
(iii) The permanent disability of Executive, as
defined in Section 4(b) hereof; or
(iv) Termination by the Bank "for cause", as defined
in Section 4(c), hereof.
(v) Determination by the Bank's Board of Directors
that the continued employment of Executive is
detrimental to the best interests of the Bank,
or for any other reason whatsoever as determined
by the Bank's Board of Directors in their sole
and absolute discretion.
(b) DISABILITY: As used in this Employment Agreement, "Permanent
Disability" shall mean six (6) months of substantially continuous disability.
Disability shall be deemed "substantially continuous" if, as a practical matter,
Executive by reason of her mental or physical health, is unable to sustain
reasonably long periods of substantial performance of her duties. Frequent long
illnesses, though different from the preceding illness and though separated by
relatively short periods of performance, shall be deemed to be "substantially
continuous". The determination of Executive's disability shall be made by the
Bank in good faith after appropriate consultation with physicians who are
familiar with Executive's health. In this regard, Executive hereby consents to
medical examinations by such physicians and medical consultants as the Bank
shall from time to time require.
(c) CAUSE: As used in this Agreement, "Termination for Cause" shall
include, but shall not be limited to, termination due to Executive's: habitual
intemperance, drug addiction or abuse; acts involving moral turpitude,
conviction of a felony; acts which cause detrimental publicity for the Bank;
habitual neglect of duty; willful or gross negligence in carrying out the
activities for which employed, including negligence or neglect in carrying out
the directions of the Board of Directors, or willful breach of the obligations
of Executive to the Bank under this Agreement, or persistent malfeasance,
misfeasance or nonfeasance in connection with the performance of Executive's
duties.
5. CONTINUATION OF BENEFITS FOLLOWING TERMINATION: In the event of the
termination of this Agreement prior to the end of the Term, Executive shall be
entitled to the continuation of certain benefits as follows:
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(a) TERMINATION FOR CAUSE OR AT ELECTION OF EXECUTIVE: In the
event of the termination of this Agreement for cause, pursuant to Section
4(a)(iv) of this Agreement, or in the event Executive voluntarily resigns or
terminates her employment, Executive shall be entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
(iv) Payment of any sums due under any profit sharing
plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date.
(b) TERMINATION DUE TO DEATH OR PERMANENT DISABILITY: In the
event of the termination of this Agreement due to the death of Executive or
permanent disability of Executive, as defined in this Agreement, Executive shall
be entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
(iv) Payment of any sums due under any profit sharing
plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date; and
(v) Payment to Executive or, in the event of
Executive's death, to Executive's spouse or
Beneficiary, those benefits provided pursuant to
the Salary Continuation Agreement.
(c) TERMINATION UPON CHANGE OF CONTROL: In the event of the
termination of Executive's employment within twenty-four (24) months of the
consummation of a Change of Control of Bank as described in Section 6 of this
Agreement, or if, pursuant to an event described in Section 6, Executive's
responsibilities and duties are substantially diminished, Executive shall be
entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
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(iv) Payment of any sums due under any profit sharing
plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date; and
(v) Payment of an amount equal to eighteen (18)
months' base salary, together with payment of an
amount equal to eighteen (18) months' profit
sharing, with the amount of such profit sharing
payment to be computed based upon the average
profit sharing received by Executive for the
three (3) prior calendar years.
(vi) Continuation, at the Bank's sole cost and
expense, of health insurance benefits then being
provided to Executive for the maximum period
allowed under the Consolidated Omnibus
Reconciliation Act of 1985 ("COBRA"), but not to
exceed eighteen (18) months.
(vii) Payment to Executive or, in the event of
Executive's death, to Executive's spouse or
beneficiary, of those benefits provided to the
Salary Continuation Agreement.
(d) TERMINATION ON DISCHARGE: In the event of the termination of
the Executive's employment pursuant to Section 4(a)(v) of this Agreement,
Executive shall be entitled to the following:
(i) All salary earned by the Executive prior to the
date of termination;
(ii) Accrued but unused vacation time to be paid to
Executive at the regular rate of pay;
(iii) The continuation of any rights accrued under any
stock option plan in accordance with the written
terms and conditions of that plan;
(iv) Payment of any sums due under the Profit Sharing
Plan, with the amounts due to be computed to the
date of termination and paid pro rata to that
date; and
(v) Payment to Executive at the time of termination
of twelve (12) months' base salary and
continuation, at Bank's sole cost and expense,
of health insurance benefits then being provided
to Executive for a twelve (12) month period
following termination.
(vi) Payment to Executive or, in the event of
Executive's death, to Executive's spouse or
beneficiary, of those benefits provided for
Early Termination to the Salary Continuation
Agreement.
6. CHANGE OF CONTROL: In the event of a merger or a consolidation where
Bank is not the surviving entity, or in the event of a transfer of all or
substantially all of the assets of Bank, or in the event of a change in control
whereby any one person or entity acquires or beneficially owns more than fifty
percent (50%) of Bank's or Redding Bancorp's outstanding capital stock, or
whereby upon any merger,
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consolidation, transfer or sale, the Board of Directors of Bank is not
controlled by individuals who, prior to such merger, consolidation, transfer or
sale, were members of the Board of Directors of Bank. Bank may, at its sole
option:
(a) Assign this Agreement, and all rights and obligations under
it, to any business entity which succeeds to all or substantially all of the
Bank's business through any such Change of Control.
(b) Upon an assignment of this Agreement as hereinabove set
forth, Bank shall be unconditionally released from all of its duties and
obligations hereunder, provided that the assignee shall expressly and
unconditionally assume and agree to perform all of the duties and obligations of
Bank required by this Agreement; or on at least sixty (60) days' prior written
notice to Executive, Bank may terminate this Agreement, effective on the date of
the Change of Control. In the event of the termination of Executive, upon Change
of Control, or within twenty-four (24) months of the effective date of any such
Change of Control, Executive shall be entitled to receive those benefits
provided for in Section 5(c) of this Agreement.
7. DISCLOSURE OF CONFIDENTIAL INFORMATION: Executive acknowledges that
the Bank possesses methods of operation and information concerning its business
affairs which are valuable, special, and unique assets of the Bank's business.
Without prior written approval of the Bank, Executive agrees not to disclose,
during or after the term of her employment, any such information, or any part
thereof, to any bank, person, firm, corporation, association, or other entity
for any reason or purpose whatsoever. This information shall include, but not be
limited to, Bank practices, methods of operation, financial position, financial
dealings and customer lists. Further, Executive agrees not to disclose except as
required in the normal conduct of Bank's business, during or after the term of
her employment, any customer's names, customer relationships with others,
customer's financial position, or the existence, balance, or amounts of loans,
accounts or other customer dealings with Bank. This provision may be enforced
either through injunction or specific performance of this Agreement by the Bank.
8. NOTICE OF VOLUNTARY TERMINATION: Executive covenants and agrees that
in the event Executive shall resign or voluntarily terminate her employment with
the Bank, Executive shall give to the Bank ninety (90) days' prior written
notice of such termination or resignation.
9. SOLICITATION OF BANK CUSTOMERS: Executive agrees that in the event
that her employment with the Bank shall terminate for any reason, she shall not,
for a period of one (1) year, make known to, or call on, solicit or take away,
or attempt to call on, solicit or take away on behalf of any person, firm or
corporation which is in competition, either directly or indirectly, with the
Bank, any existing customers of the Bank or individuals or entities with whom
the Bank is negotiating for the Bank's services. This provision may be enforced
either through injunction or specific performance of this Agreement by the Bank.
In the event of a Change of Control, Executive shall be
unconditionally released from all of her duties and obligations under this
paragraph.
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10. EXECUTION OF THIS AGREEMENT: The execution of this Employment
Agreement by the Bank was authorized at the Board of Directors Meeting held on
April 17, 2001.
11. MISCELLANEOUS:
(a) NOTICES: Any notices to be given by either party to the
other shall be in writing and may be transmitted either by personal delivery or
by mail, registered or certified, postage prepaid with return receipt requested.
Notices delivered personally shall be deemed communicated as of the date of
actual receipt; mailed notices shall be deemed communicated as of the date of
mailing.
(b) ASSIGNMENT: The provisions of this Agreement shall inure to
the benefit of the parties hereto, their heirs, legal representatives,
successors and assigns. Without limiting the generality of this foregoing,
nothing herein shall prevent Bank from assigning this Agreement to any affiliate
of Bank; provided, however, that no such assignment shall (unless the Executive
shall so agree in writing) release Bank of liability directly to the Executive
for the due performance of all of the terms, covenants and conditions of this
Agreement to be complied with and performed by Bank. The term "affiliate", as
used herein, shall mean any corporation, firm, partnership or other entity
controlling, controlled by or under common control with Bank. The obligations of
the Executive under this Agreement shall be personal and not assignable or
delegable by her in any manner whatsoever.
(c) NEGOTIATION, MEDIATION AND ARBITRATION: The parties will
attempt in good faith to resolve promptly any dispute, controversy, or claim
arising out of or relating to this Agreement or any claimed breach thereof by
direct negotiation between principals of the parties who have authority to
settle the controversy. To facilitate such negotiations, it is agreed that a
disputing party shall give the other party written notice of the dispute
providing reasonable particularity with respect to all issues deemed to be
controverted or disputed. Within ten (10) days after such notice is given, the
principals of the parties shall meet at a mutually acceptable time and place,
and thereafter as often as those individuals reasonably deem necessary to
exchange relevant information and attempt to resolve all disputes.
If the disputes have not been resolved within thirty
(30) days after the disputing party gives notice, or if the party receiving
notice declines to meet, either party may initiate mediation of the controversy,
claim or dispute in accordance with the following mediation provisions. Upon
failure of the negotiations as set forth above, the parties to this contract
agree to mediate any dispute, controversy or claim arising out of this Agreement
prior to resorting to arbitration as hereinafter provided. Mediation is a
process in which parties attempt to resolve a dispute by submitting it to an
impartial, neutral mediator who is authorized to facilitate the resolution of
the dispute, but who is not empowered to impose a settlement on the parties. The
parties shall attempt to mutually agree upon an impartial mediator, which
mediator shall be appointed jointly and compensated equally by the parties. In
the event the parties are unable to agree on an impartial mediator, then and in
that event each party shall submit to the other a list with five (5) names of
attorneys or retired judges who practice in Northern California, and who have no
ongoing professional or business relationship with either of the parties. From
the lists, the parties shall, beginning with the Bank,
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cross unacceptable names from the list until such time as two (2) potential
mediators remain. The potential remaining mediators shall then be contacted to
determine if they are available and willing to act as mediator. In the event
that both are willing and able to act as mediator, the mediator shall be chosen
alphabetically, with the mediator's last name serving as the alphabetical basis
for choice. Should none of the original list of mediators be available, new
lists shall be prepared and the process again undertaken.
Following mediation or in the event that for any reason
no mediation has been held, all disputes, controversies or claims must be
resolved by binding arbitration as hereinafter set forth.
If a party commences an arbitration based on a dispute
or claim as to which this section applies, without first attempting to resolve
the matter through mediation as above provided, then and in that event, such
party shall not be entitled to recover attorney's fees, costs or expert fees,
even if they would otherwise be available to that party in any such arbitration.
Executive and Bank agree that any dispute, controversy
or claim, in law or equity, arising between themselves out of this Agreement or
the employment or termination of Executive which is not settled through
mediation must be decided by neutral binding arbitration and not be court
action, except as provided by California Law for Judicial Review of Arbitration
Proceedings.
Arbitration shall be conducted under and pursuant to the
provisions of California Code of Civil Procedure Section 1280, et seq.,
including the provisions of Section 1283.05, as are in effect at the time of the
arbitration, and judgment may be entered on the award as therein provided.
If any party refuses or neglects to appear at or
participate in arbitration after reasonable notice, the arbitrator may decide
the controversy in accordance with whatever evidence is presented by the party
or parties who do participate. The arbitrator may award any remedy that is just
and equitable in the arbitrator's opinion. The arbitrator shall award to the
prevailing party or parties such sums as are proper to compensate for the time,
expense, and trouble of arbitration, including arbitration fees, attorney fees
and costs, and expert fees.
Except as awarded by the arbitrator as hereinabove set
forth, all fees to the arbitrator shall be paid in equal shares by the parties
to the arbitration.
(d) ATTORNEY'S FEES AND COSTS: If any action at law or in
equity, including arbitration, is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees, costs, and expert witness fees, in addition to any other relief to which
that party may be entitled.
(e) ENTIRE AGREEMENT: This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the employment of Executive by the Bank, and contains all of the
covenants and agreements between the parties with respect to that employment in
any manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, orally or otherwise, have
been made by any party, or
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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.
(f) MODIFICATIONS: Any modification of this Agreement will be
effective only if it is in writing signed by the party to be charged.
(g) EFFECT OF WAIVER: The failure of either party to insist on
strict compliance with any of the terms, covenants, or conditions of this
Agreement by the other party shall not be deemed a waiver of that term,
covenant, or condition, 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.
(h) 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 without being
impaired or invalidated in any way.
(i) GOVERNING LAW: The formation, construction, and performance
of this Agreement shall be construed in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective the date first above written.
REDDING BANCORP REDDING BANK OF COMMERCE
BY /s/ Xxxxxx X. Xxxxxxxx BY /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ----------------------------------
XXXXXX X. XXXXXXXX, XXXXXX X. XXXXXXXX,
CHAIRMAN CHAIRMAN
BY /s/ Xxxxx X. Xxxxx BY /s/ Xxxxx X. Xxxxx
-------------------------------- ----------------------------------
XXXXX X. XXXXX, SECRETARY XXXXX X. XXXXX, SECRETARY
EXECUTIVE
/s/ Xxxxx X. Xxxxx
----------------------------------
XXXXX X. XXXXX
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REDDING BANK OF COMMERCE
SALARY CONTINUATION AGREEMENT
FOR XXXXXXX X. XXXXX
THIS SALARY CONTINUATION AGREEMENT (the "Agreement") is made and entered
into effective April 17, 2001, by and between REDDING BANK OF COMMERCE, a
California corporation (the "Bank"), and XXXXXXX X. XXXXX (the "Executive").
INTRODUCTION
The Bank, desiring to encourage the Executive to remain as an employee,
is desirous of providing salary continuation benefits to the Executive as are
set forth in this Salary Continuation Agreement. The Bank will pay such benefits
from its general assets.
ARTICLE 1
DEFINITIONS
1. DEFINITIONS: Whenever used in this Agreement, the following words and
phrases shall have the meanings specified hereinafter:
1.1 "CHANGE OF CONTROL" means a merger or a consolidation where
either Redding Bank of Commerce or Redding Bancorp (the "Bank") is not the
surviving entity, or in the event of a transfer of all or substantially all of
the assets of Bank, or in the event of a change in control whereby any one
person or entity acquires or beneficially owns more than fifty percent (50%) of
the Bank's outstanding capital stock or whereby upon any merger, consolidation,
transfer or sale, the Board of Directors of Bank is not controlled by
individuals who, prior to such merger, consolidation, transfer or sale, were
members of the Board of Directors of Bank.
1.2 "CODE" means the Internal Revenue Code of 1986, as from time
to time amended.
1.3 "DISABILITY" means, if the Executive is covered by a
Bank-sponsored disability policy, total disability as defined in such policy
without regard to any waiting period. If the Executive is not covered by such a
policy, Disability means the Executive suffering a sickness, accident or injury,
which, in the judgment of a physician who is satisfactory to the Bank, prevents
the Executive from performing substantially all of the Executive's normal duties
for the Bank. As a condition to receiving any Disability benefits, the Bank may
require the Executive to submit to such physical or mental evaluations and tests
as the Bank's Board of Directors deems appropriate and reasonable.
1.4 "EARLY TERMINATION" means the Termination of Employment
before Normal Retirement Age for reasons other than death, Disability,
Termination for Cause or following a Change of Control.
1.5 "EARLY TERMINATION DATE" means the month, day and year in
which Early Termination occurs.
1.6 "EFFECTIVE DATE" means April 17, 2001.
1.7 "EXECUTIVE BENEFICIARY" means the beneficiary designated by
Executive pursuant to Article 4.1.
1.8 "NORMAL RETIREMENT AGE" means the Executive's 61st birthday.
1.9 "NORMAL RETIREMENT DATE" means the later of the Normal
Retirement Age or Termination of Employment.
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1.10 "PLAN YEAR" means a twelve (12) month period commencing on
April 1 and ending on March 31 of each year. The initial Plan Year shall
commence on the effective date of this Agreement.
1.11 "TERMINATION FOR CAUSE" As defined in Article 5.
1.12 "TERMINATION OF EMPLOYMENT" means that the Executive ceases
to be employed by the Bank for any reason, voluntary or involuntary, other than
by reason of a leave of absence approved by the Bank.
ARTICLE 2
BENEFITS
2.1 NORMAL RETIREMENT BENEFIT. Upon Termination of Employment on or
after the Normal Retirement Age for reasons other than death, the Bank shall pay
to the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Agreement.
2.1.1 AMOUNT OF BENEFIT. The annual benefit to be paid to
Executive under this Section 2.1 is One Hundred Fifty Thousand Dollars
($150,000.00). The Bank's Board of Directors, in its sole discretion, may
increase the annual benefit under this Section 2.1.1; however, any increase
shall require the recalculation of Schedule A attached hereto.
2.1.2 PAYMENT OF BENEFIT. The Bank shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first
day of each month commencing with the month following the Executive's Normal
Retirement Date. The annual benefit shall be paid to the Executive for life.
2.1.3 BENEFIT INCREASES. Commencing on the first anniversary of
the first benefit payment, and continuing on each subsequent anniversary, the
Bank's Board of Directors, in its sole discretion, may increase the Normal
Retirement Benefit.
2.2 EARLY TERMINATION BENEFIT. Upon Early Termination, the Bank shall
pay to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.
2.2.1 AMOUNT OF BENEFIT. The benefit to be paid to Executive
under this Section 2.2 is the Early Termination Lump Sum set forth on Schedule A
for the Plan Year ending immediately prior to the Early Termination Date. This
benefit is determined by vesting the Executive in one hundred percent (100%) of
the Accrual Balance set forth on Schedule A. The Bank's Board of Directors, in
its sole discretion, may, at any time, increase the annual benefit under this
Section 2.2.1; however, any such increase shall require the recalculation of
Schedule A.
2.2.2 PAYMENT OF BENEFIT. The Bank shall pay this benefit to the
Executive in a lump sum within sixty (60) days following Early Termination.
2.3 DISABILITY BENEFIT. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Bank shall pay to the Executive
the benefit described in this Section 2.3 in lieu of any other benefit under
this Agreement.
2.3.1 AMOUNT OF BENEFIT. The benefit under this Section 2.3 is
the Disability Annual Benefit set forth in Schedule A for the Plan Year ending
immediately prior to the date in which the Termination of Employment occurs
(provided, however, that for Termination of Employment due to disability during
the first plan year, the benefit shall be the Disability Annual Benefit set
forth in Schedule A for Plan Year 1). The Bank's Board of Directors, in its sole
discretion, may, at any time, increase the annual benefit under this Section
2.3.1; however, any such increase shall require the recalculation of Schedule A.
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2.3.2 PAYMENT OF BENEFIT. The Bank shall pay this annual benefit
to the Executive in twelve (12) monthly installments payable on the first day of
each month commencing with the month following the Executive's termination of
employment due to disability. The annual benefit shall be paid to the Executive
for life.
2.4 CHANGE OF CONTROL BENEFIT. Upon a Change of Control, the Bank shall
pay to the Executive the benefit described in this Section 2.4 in lieu of any
other benefit under this Agreement.
2.4.1 AMOUNT OF BENEFIT. The benefit under this Section 2.4 is
the Change of Control Annual Benefit set forth in Schedule A for the Plan Year
ending immediately prior to the date in which a Change of Control occurs
(provided, however, that for a Change of Control during the first plan year, the
benefit shall be the Change of Control Annual Benefit set forth in Schedule A
for Plan Year 1).
2.4.2 PAYMENT OF BENEFIT. The Bank shall pay this annual benefit
to the Executive in twelve (12) monthly installments payable on the first day of
each month commencing with the month following the Executive's Normal Retirement
Age. The annual benefit shall be paid to the Executive for life.
2.4.3 EXCESS PARACHUTE PAYMENT. Notwithstanding any provision of
this Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement to the extent the benefit would create an excise tax under the excess
parachute rules of Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1 DEATH DURING ACTIVE SERVICE. If the Executive dies while in the
active service of the Bank, the Bank shall pay to the Executive's beneficiary
the benefit described in this Section 3.1. This benefit shall be paid in lieu of
any other benefit under this Agreement.
3.1.1 AMOUNT OF BENEFIT. The annual benefit under this Section
3.1 is the Normal Retirement Benefit amount described in Section 2.1.1.
3.1.2 PAYMENT OF BENEFIT. The Bank shall pay the annual benefit
to the Executive's Beneficiary in twelve (12) equal monthly installments payable
on the first day of each month commencing with the month following the
Executive's death. The annual benefit shall be paid to the Executive's
Beneficiary for a period of twenty (20) years.
3.2 DEATH DURING PAYMENT OF A LIFETIME BENEFIT. If the Executive dies
after any lifetime benefit payments have commenced under this Agreement but
before receiving all such payments, the Bank shall pay those benefits to the
Executive's Beneficiary at the same time and in the same amounts they would have
been paid to the Executive had the Executive survived, provided however that any
such beneficiary shall be paid for a period of time not exceeding twenty (20)
years from the date that any such benefit was first paid. (eg. If the Executive
had been receiving a lifetime benefit for a period of six (6) years before the
Executive's death, then and in that event the Executive's Beneficiary would be
entitled to receive that benefit for an additional fourteen (14) years.
3.3 DEATH AFTER TERMINATION OF EMPLOYMENT BUT BEFORE PAYMENT OF A
LIFETIME BENEFIT COMMENCES. If the Executive is entitled to a lifetime benefit
under this Agreement, but dies prior to the commencement of said benefit
payments, the Bank shall pay the same benefit payments to the Executive's
Beneficiary that the Executive was entitled to prior to death except that the
benefit payments shall commence on the first day of the month following the date
of the Executive's death and shall continue for a period of twenty (20) years.
ARTICLE 4
BENEFICIARIES
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4.1 BENEFICIARY DESIGNATIONS. The Executive shall designate a
beneficiary ("Executive Beneficiary") by filing a written beneficiary
designation with the Bank. The Executive may revoke or modify the designation at
any time by filing a new designation. However, designations will only be
effective if signed by the Executive and received by the Bank during the
Executive's lifetime.
The Executive's beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases the Executive, or if the
Executive names a spouse as beneficiary and the marriage is subsequently
dissolved. If the executive dies without a valid beneficiary, all payments which
would have been paid to Executive Beneficiary shall be made to the Executive's
estate.
4.2 FACILITY OF PAYMENT. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person or incapable person. The Bank may require proof of incompetence, minority
or guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Bank from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
5.1 TERMINATION FOR CAUSE. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement if the Bank terminates the Executive's employment for:
(a) Habitual intemperance or drug addiction or abuse;
(b) Commission of a felony, or acts involving moral turpitude;
(c) Acts which cause detrimental publicity for the Bank;
(d) Habitual neglect of duty, willful or gross negligence in
carrying out the activities for which employed, including negligence or neglect
in carrying out the directions of the Board of Directors, or willful breach of
the obligations of Executive to the Bank, including persistant, malfeasance,
misfeasance or nonfeasance in connection with the performance of Executive's
duties.
5.2 SUICIDE OR MISSTATEMENT. The Bank shall not pay any benefit under
this Agreement if the Executive commits suicide within three (3) years after the
date of this Agreement. In addition, the Bank shall not pay any benefit under
this Agreement if the Executive has made any material misstatement of fact on an
employment application or resume provided to the Bank, or on any application for
any benefits provided by the Bank to the Executive.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 CLAIMS PROCEDURE. The Bank shall notify any person or entity that
makes a claim under this Agreement (the "Claimant') in writing, within ninety
(90) days of Claimant's written application for benefits, of his or her
eligibility or noneligibility for benefits under the Agreement. If the Bank
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the Claimant
to perfect his or her claim, and a description of why it is needed, (4) an
explanation of this Agreement's claims review procedure and other appropriate
information as to the steps to be taken if the Claimant
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wishes to have the claim reviewed, and (5) a time within which review must be
requested. If the Bank determines that there are special circumstances requiring
additional time to make a decision, the Bank shall notify the Claimant of the
special circumstances and the date by which a decision is expected to be made,
and may extend the time for up to an additional ninety (90) days.
6.2 REVIEW PROCEDURE. If the Claimant is determined by the Bank not to
be eligible for benefits, or if the Claimant believes that he or she is entitled
to greater or different benefits, the Claimant shall have the opportunity to
have such claim reviewed by the Bank by filing a petition for review with the
Bank within sixty (60) days after receipt of the notice issued by the Bank. Said
petition shall state the specific reasons which the Claimant believes entitle
him or her to benefits or to greater or different benefits. Within sixty (60)
days after receipt by the Bank of the petition, the Bank shall afford the
Claimant (and counsel, if any) an opportunity to present his or her position to
the Bank verbally or in writing, and the Claimant (or counsel) shall have the
right to review the pertinent documents. The Bank shall notify the Claimant of
its decision in writing within the sixty (60) day period, stating the basis of
its decision, written in a manner calculated to be understood by the Claimant
and the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty (60) day period is not sufficient,
the decision may be deferred for up to another sixty (60) days at the election
of the Bank, but notice of this deferral shall be given to the Claimant.
ARTICLE 7
NEGOTIATION, MEDIATION AND ARBITRATION
7.1 NEGOTIATION AND MEDIATION. The parties will attempt in good faith to
resolve promptly any dispute, controversy, or claim arising out of or relating
to this Agreement or any claimed breach thereof not resolved by the Claims and
Review Procedures of Article 6 of this Agreement, by direct negotiation between
principals of the parties who have authority to settle the controversy. To
facilitate such negotiations, it is agreed that a disputing party shall give the
other party written notice of the dispute providing reasonable particularity
with respect to all issues deemed to be controverted or disputed. Within ten
(10) days after such notice is given, the principals of the parties shall meet
at a mutually acceptable time and place, and thereafter as often as those
individuals reasonably deem necessary to exchange relevant information and
attempt to resolve all disputes.
If the disputes have not been resolved by negotiation within
sixty (60) days after the disputing party gives notice, or if the party
receiving notice declines to meet, either party may initiate mediation of the
controversy, claim or dispute in accordance with the following mediation
provisions. Upon failure of the negotiations as set forth above, the parties to
this contract agree to mediate any dispute, controversy or claim arising out of
this Agreement prior to resorting to arbitration as hereinafter provided.
Mediation is a process in which parties attempt to resolve a dispute by
submitting it to an impartial, neutral mediator who is authorized to facilitate
the resolution of the dispute, but who is not empowered to impose a settlement
on the parties. The parties shall attempt to mutually agree upon an impartial
mediator, which mediator shall be appointed jointly and compensated equally by
the parties. In the event the parties are unable to agree on an impartial
mediator, then and in that event each party shall submit to the other a list
with five (5) names of attorneys or retired judges who practice in Northern
California, and who have no ongoing professional or business relationship with
either of the parties. From the lists, the parties shall alternately, beginning
with the Bank, cross unacceptable names from the list until such time as two (2)
potential mediators remain. The potential remaining mediators shall then be
contacted to determine if they are available and willing to act as mediator. In
the event that both are willing and able to act as mediator, the mediator shall
be chosen alphabetically, with the mediator's last name serving as the
alphabetical basis for choice. Should none of the original list of mediators be
available, new lists shall be prepared and the process again undertaken.
7.2 ARBITRATION. Following mediation or in the event that for any reason
no mediation has been held, any and all remaining disputes, controversies or
claims must be resolved by binding arbitration as hereinafter set forth.
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If a party commences an arbitration based on a dispute or claim as to
which this section applies, without first attempting to resolve the matter
through mediation as above provided, then and in that event, such party shall
not be entitled to recover attorney's fees, costs or expert fees, even if they
would otherwise be available to that party in any such arbitration.
Executive and Bank agree that any dispute, controversy or claim, in law
or equity, arising between themselves out of this Salary Continuation Agreement
or the employment or termination of Executive which is not settled through
mediation must be decided by neutral binding arbitration and not by court
action, except as provided by California Law for Judicial Review of Arbitration
Proceedings.
Arbitration shall be conducted under and pursuant to the provisions of
California Code of Civil Procedure Section 1280, et seq., including the
provisions of Section 1283.05, as are in effect at the time of the arbitration,
and judgment may be entered on the award as therein provided.
If any party refuses or neglects to appear at or participate in
arbitration after reasonable notice, the arbitrator may decide the controversy
in accordance with whatever evidence is presented by the party or parties who do
participate. The arbitrator may award any remedy that is just and equitable in
the arbitrator's opinion. The arbitrator shall award to the prevailing party or
parties such sums as are proper to compensate for the time, expense, and trouble
of arbitration, including arbitration fees, attorney fees and costs, and expert
fees.
Except as awarded by the arbitrator as hereinabove set forth, all fees
to the arbitrator shall be paid in equal shares by the parties to the
arbitration.
ARTICLE 8
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Executive. Notwithstanding the preceding, the Bank
may amend or terminate this Agreement at any time if, pursuant to legislative,
judicial or regulatory action, continuation of this Agreement would: (i) cause
benefits to be taxable to the Executive prior to actual receipt; or (ii) result
in significant financial penalties or other significantly detrimental
ramifications to the Bank (other than the financial impact of paying any
provided benefits).
ARTICLE 9
MISCELLANEOUS
9.1 BINDING EFFECT. This Agreement shall bind the Executive and the
Bank, and their beneficiaries, survivors, executors, successors, administrators
and transferees.
9.2 NO GUARANTEE OF EMPLOYMENT. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the Bank's right to discharge
the Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
9.3 NON-TRANSFERABILITY. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
9.4 REORGANIZATION. The Bank shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Bank under
this Agreement or unless any such activity would constitute a Change of Control.
Upon the
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occurrence of such event, the term "Bank" as used in this Agreement shall be
deemed to refer to the successor or survivor company.
9.5 TAX WITHHOLDING. The Bank shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
9.6 APPLICABLE LAW. The Agreement and all rights hereunder shall be
governed by the laws of California, except to the extent preempted by the laws
of the United States of America.
9.7 UNFUNDED ARRANGEMENT. The Executive and the Executive Beneficiary
are general unsecured creditors of the Bank for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Bank to which the Executive and Executive Beneficiary have no
preferred or secured claim.
9.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Bank and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue this Agreement other than those
specifically set forth herein.
9.9 ADMINISTRATION. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Establishing and revising the method of accounting for the
Agreement;
(b) Maintaining a record of benefit payments; and
(c) Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
9.10 NAMED FIDUCIARY. The Bank shall be the named fiduciary and plan
administrator under this Agreement. It may delegate to others certain aspects of
the management and operational responsibilities including the employment of
advisors and the delegation of ministerial duties to qualified individuals.
9.11 ATTORNEY'S FEES AND COSTS. If any action at law or in equity,
including arbitration, is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs, and expert witness fees, in addition to any other relief to which that
party may be entitled.
IN WITNESS WHEREOF, the Executive and the Bank have signed this
Agreement.
EXECUTIVE: BANK:
REDDING BANCORP
/s/ Xxxxxxx X. Xxxxx BY /s/ Xxxxxx X. Xxxxxxxx
----------------------------------- ------------------------------------
XXXXXXX X. XXXXX XXXXXX X. XXXXXXXX
CHAIRMAN
BY /s/ Xxxxx X. Xxxxx
----------------------------------
XXXXX X. XXXXX, SECRETARY
REDDING BANK OF COMMERCE
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REDDING BANK OF COMMERCE
SALARY CONTINUATION AGREEMENT
FOR XXXXX X. XXXXX
THIS SALARY CONTINUATION AGREEMENT (the "Agreement") is made and entered
into effective April 17, 2001, by and between REDDING BANK OF COMMERCE, a
California corporation (the "Bank"), and XXXXX X. XXXXX (the "Executive").
INTRODUCTION
The Bank, desiring to encourage the Executive to remain as an employee,
is desirous of providing salary continuation benefits to the Executive as are
set forth in this Salary Continuation Agreement. The Bank will pay such benefits
from its general assets.
ARTICLE 1
DEFINITIONS
1. DEFINITIONS: Whenever used in this Agreement, the following words and
phrases shall have the meanings specified hereinafter:
1.1 "CHANGE OF CONTROL" means a merger or a consolidation where
either Redding Bank of Commerce or Redding Bancorp (the "Bank") is not the
surviving entity, or in the event of a transfer of all or substantially all of
the assets of Bank, or in the event of a change in control whereby any one
person or entity acquires or beneficially owns more than fifty percent (50%) of
the Bank's outstanding capital stock or whereby upon any merger, consolidation,
transfer or sale, the Board of Directors of Bank is not controlled by
individuals who, prior to such merger, consolidation, transfer or sale, were
members of the Board of Directors of Bank.
1.2 "CODE" means the Internal Revenue Code of 1986, as from time
to time amended.
1.3 "DISABILITY" means, if the Executive is covered by a
Bank-sponsored disability policy, total disability as defined in such policy
without regard to any waiting period. If the Executive is not covered by such a
policy, Disability means the Executive suffering a sickness, accident or injury,
which, in the judgment of a physician who is satisfactory to the Bank, prevents
the Executive from performing substantially all of the Executive's normal duties
for the Bank. As a condition to receiving any Disability benefits, the Bank may
require the Executive to submit to such physical or mental evaluations and tests
as the Bank's Board of Directors deems appropriate and reasonable.
1.4 "EARLY TERMINATION" means the Termination of Employment
before Normal Retirement Age for reasons other than death, Disability,
Termination for Cause or following a Change of Control.
1.5 "EARLY TERMINATION DATE" means the month, day and year in
which Early Termination occurs.
1.6 "EFFECTIVE DATE" means April 17, 2001.
1.7 "EXECUTIVE BENEFICIARY" means the beneficiary designated by
Executive pursuant to Article 4.1.
1.8 "NORMAL RETIREMENT AGE" means the Executive's 61st birthday.
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1.9 "NORMAL RETIREMENT DATE" means the later of the Normal Retirement
Age or Termination of Employment.
1.10 "PLAN YEAR" means a twelve (12) month period commencing on April 1
and ending on March 31 of each year. The initial Plan Year shall commence on the
effective date of this Agreement.
1.11 "TERMINATION FOR CAUSE" As defined in Article 5.
1.12 "TERMINATION OF EMPLOYMENT" means that the Executive ceases to be
employed by the Bank for any reason, voluntary or involuntary, other than by
reason of a leave of absence approved by the Bank.
ARTICLE 2
BENEFITS
2.1 NORMAL RETIREMENT BENEFIT. Upon Termination of Employment on or
after the Normal Retirement Age for reasons other than death, the Bank shall pay
to the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Agreement.
2.1.1 AMOUNT OF BENEFIT. The annual benefit to be paid to
Executive under this Section 2.1 is One Hundred Twenty-Five Thousand Dollars
($125,000.00). The Bank's Board of Directors, in its sole discretion, may
increase the annual benefit under this Section 2.1.1; however, any increase
shall require the recalculation of Schedule A attached hereto.
2.1.2 PAYMENT OF BENEFIT. The Bank shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first
day of each month commencing with the month following the Executive's Normal
Retirement Date. The annual benefit shall be paid to the Executive for life.
2.1.3 BENEFIT INCREASES. Commencing on the first anniversary of
the first benefit payment, and continuing on each subsequent anniversary, the
Bank's Board of Directors, in its sole discretion, may increase the Normal
Retirement Benefit.
2.2 EARLY TERMINATION BENEFIT. Upon Early Termination, the Bank shall
pay to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.
2.2.1 AMOUNT OF BENEFIT. The benefit to be paid to Executive
under this Section 2.2 is the Early Termination Lump Sum set forth on Schedule A
for the Plan Year ending immediately prior to the Early Termination Date. This
benefit is determined by vesting the Executive in one hundred percent (100%) of
the Accrual Balance set forth on Schedule A. The Bank's Board of Directors, in
its sole discretion, may, at any time, increase the annual benefit under this
Section 2.2.1; however, any such increase shall require the recalculation of
Schedule A.
2.2.2 PAYMENT OF BENEFIT. The Bank shall pay this benefit to the
Executive in a lump sum within sixty (60) days following Early Termination.
2.3 DISABILITY BENEFIT. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Bank shall pay to the Executive
the benefit described in this Section 2.3 in lieu of any other benefit under
this Agreement.
2.3.1 AMOUNT OF BENEFIT. The benefit under this Section 2.3 is
the Disability Annual Benefit set forth in Schedule A for the Plan Year ending
immediately prior to the date in which the Termination of Employment occurs
(provided, however, that for Termination of Employment due to disability during
the first plan year, the benefit shall be the Disability Annual Benefit set
forth in Schedule A for Plan Year 1). The Bank's Board of Directors, in its sole
discretion, may, at any time, increase the
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annual benefit under this Section 2.3.1; however, any such increase shall
require the recalculation of Schedule A.
2.3.2 PAYMENT OF BENEFIT. The Bank shall pay this annual benefit
to the Executive in twelve (12) monthly installments payable on the first day of
each month commencing with the month following the Executive's termination of
employment due to disability. The annual benefit shall be paid to the Executive
for life.
2.4 CHANGE OF CONTROL BENEFIT. Upon a Change of Control, the Bank shall
pay to the Executive the benefit described in this Section 2.4 in lieu of any
other benefit under this Agreement.
2.4.1 AMOUNT OF BENEFIT. The benefit under this Section 2.4 is
the Change of Control Annual Benefit set forth in Schedule A for the Plan Year
ending immediately prior to the date in which a Change of Control occurs
(provided, however, that for a Change of Control during the first plan year, the
benefit shall be the Change of Control Annual Benefit set forth in Schedule A
for Plan Year 1).
2.4.2 PAYMENT OF BENEFIT. The Bank shall pay this annual benefit
to the Executive in twelve (12) monthly installments payable on the first day of
each month commencing with the month following the Executive's Normal Retirement
Age. The annual benefit shall be paid to the Executive for life.
2.4.3 EXCESS PARACHUTE PAYMENT. Notwithstanding any provision of
this Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement to the extent the benefit would create an excise tax under the excess
parachute rules of Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1 DEATH DURING ACTIVE SERVICE. If the Executive dies while in the
active service of the Bank, the Bank shall pay to the Executive's beneficiary
the benefit described in this Section 3.1. This benefit shall be paid in lieu of
any other benefit under this Agreement.
3.1.1 AMOUNT OF BENEFIT. The annual benefit under this Section
3.1 is the Normal Retirement Benefit amount described in Section 2.1.1.
3.1.2 PAYMENT OF BENEFIT. The Bank shall pay the annual benefit
to the Executive's Beneficiary in twelve (12) equal monthly installments payable
on the first day of each month commencing with the month following the
Executive's death. The annual benefit shall be paid to the Executive's
Beneficiary for a period of twenty (20) years.
3.2 DEATH DURING PAYMENT OF A LIFETIME BENEFIT. If the Executive dies
after any lifetime benefit payments have commenced under this Agreement but
before receiving all such payments, the Bank shall pay those benefits to the
Executive's Beneficiary at the same time and in the same amounts they would have
been paid to the Executive had the Executive survived, provided however that any
such beneficiary shall be paid for a period of time not exceeding twenty (20)
years from the date that any such benefit was first paid. (eg. If the Executive
had been receiving a lifetime benefit for a period of six (6) years before the
Executive's death, then and in that event the Executive's Beneficiary would be
entitled to receive that benefit for an additional fourteen (14) years.
3.3 DEATH AFTER TERMINATION OF EMPLOYMENT BUT BEFORE PAYMENT OF A
LIFETIME BENEFIT COMMENCES. If the Executive is entitled to a lifetime benefit
under this Agreement, but dies prior to the commencement of said benefit
payments, the Bank shall pay the same benefit payments to the Executive's
Beneficiary that the Executive was entitled to prior to death except that the
benefit payments shall commence on the first day of the month following the date
of the Executive's death and shall continue for a period of twenty (20) years.
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ARTICLE 4
BENEFICIARIES
4.1 BENEFICIARY DESIGNATIONS. The Executive shall designate a
beneficiary ("Executive Beneficiary") by filing a written beneficiary
designation with the Bank. The Executive may revoke or modify the designation at
any time by filing a new designation. However, designations will only be
effective if signed by the Executive and received by the Bank during the
Executive's lifetime.
The Executive's beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases the Executive, or if the
Executive names a spouse as beneficiary and the marriage is subsequently
dissolved. If the executive dies without a valid beneficiary, all payments which
would have been paid to Executive Beneficiary shall be made to the Executive's
estate.
4.2 FACILITY OF PAYMENT. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person or incapable person. The Bank may require proof of incompetence, minority
or guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Bank from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
5.1 TERMINATION FOR CAUSE. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement if the Bank terminates the Executive's employment for:
(a) Habitual intemperance or drug addiction or abuse;
(b) Commission of a felony, or acts involving moral turpitude;
(c) Acts which cause detrimental publicity for the Bank;
(d) Habitual neglect of duty, willful or gross negligence in
carrying out the activities for which employed, including negligence or neglect
in carrying out the directions of the Board of Directors, or willful breach of
the obligations of Executive to the Bank, including persistant, malfeasance,
misfeasance or nonfeasance in connection with the performance of Executive's
duties.
5.2 SUICIDE OR MISSTATEMENT. The Bank shall not pay any benefit under
this Agreement if the Executive commits suicide within three (3) years after the
date of this Agreement. In addition, the Bank shall not pay any benefit under
this Agreement if the Executive has made any material misstatement of fact on an
employment application or resume provided to the Bank, or on any application for
any benefits provided by the Bank to the Executive.
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ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 CLAIMS PROCEDURE. The Bank shall notify any person or entity that
makes a claim under this Agreement (the "Claimant') in writing, within ninety
(90) days of Claimant's written application for benefits, of his or her
eligibility or noneligibility for benefits under the Agreement. If the Bank
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the Claimant
to perfect his or her claim, and a description of why it is needed, (4) an
explanation of this Agreement's claims review procedure and other appropriate
information as to the steps to be taken if the Claimant wishes to have the claim
reviewed, and (5) a time within which review must be requested. If the Bank
determines that there are special circumstances requiring additional time to
make a decision, the Bank shall notify the Claimant of the special circumstances
and the date by which a decision is expected to be made, and may extend the time
for up to an additional ninety (90) days.
6.2 REVIEW PROCEDURE. If the Claimant is determined by the Bank not to
be eligible for benefits, or if the Claimant believes that he or she is entitled
to greater or different benefits, the Claimant shall have the opportunity to
have such claim reviewed by the Bank by filing a petition for review with the
Bank within sixty (60) days after receipt of the notice issued by the Bank. Said
petition shall state the specific reasons which the Claimant believes entitle
him or her to benefits or to greater or different benefits. Within sixty (60)
days after receipt by the Bank of the petition, the Bank shall afford the
Claimant (and counsel, if any) an opportunity to present his or her position to
the Bank verbally or in writing, and the Claimant (or counsel) shall have the
right to review the pertinent documents. The Bank shall notify the Claimant of
its decision in writing within the sixty (60) day period, stating the basis of
its decision, written in a manner calculated to be understood by the Claimant
and the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty (60) day period is not sufficient,
the decision may be deferred for up to another sixty (60) days at the election
of the Bank, but notice of this deferral shall be given to the Claimant.
ARTICLE 7
NEGOTIATION, MEDIATION AND ARBITRATION
7.1 NEGOTIATION AND MEDIATION. The parties will attempt in good faith to
resolve promptly any dispute, controversy, or claim arising out of or relating
to this Agreement or any claimed breach thereof not resolved by the Claims and
Review Procedures of Article 6 of this Agreement, by direct negotiation between
principals of the parties who have authority to settle the controversy. To
facilitate such negotiations, it is agreed that a disputing party shall give the
other party written notice of the dispute providing reasonable particularity
with respect to all issues deemed to be controverted or disputed. Within ten
(10) days after such notice is given, the principals of the parties shall meet
at a mutually acceptable time and place, and thereafter as often as those
individuals reasonably deem necessary to exchange relevant information and
attempt to resolve all disputes.
If the disputes have not been resolved by negotiation within
sixty (60) days after the disputing party gives notice, or if the party
receiving notice declines to meet, either party may initiate mediation of the
controversy, claim or dispute in accordance with the following mediation
provisions. Upon failure of the negotiations as set forth above, the parties to
this contract agree to mediate any dispute, controversy or claim arising out of
this Agreement prior to resorting to arbitration as hereinafter provided.
Mediation is a process in which parties attempt to resolve a dispute by
submitting it to an impartial, neutral mediator who is authorized to facilitate
the resolution of the dispute, but who is not empowered to impose a settlement
on the parties. The parties shall attempt to mutually agree upon an impartial
mediator, which mediator shall be appointed jointly and compensated equally by
the parties. In the event the parties are unable to agree on an impartial
mediator, then and in that event each party shall submit to the other a list
with five (5) names of attorneys or retired judges who practice in Northern
California, and who have no ongoing professional or business relationship with
either of the parties. From the lists, the parties shall alternately, beginning
with the Bank, cross unacceptable names from the list until such time as two (2)
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potential mediators remain. The potential remaining mediators shall then be
contacted to determine if they are available and willing to act as mediator. In
the event that both are willing and able to act as mediator, the mediator shall
be chosen alphabetically, with the mediator's last name serving as the
alphabetical basis for choice. Should none of the original list of mediators be
available, new lists shall be prepared and the process again undertaken.
7.2 ARBITRATION. Following mediation or in the event that for any reason
no mediation has been held, any and all remaining disputes, controversies or
claims must be resolved by binding arbitration as hereinafter set forth.
If a party commences an arbitration based on a dispute or claim
as to which this section applies, without first attempting to resolve the matter
through mediation as above provided, then and in that event, such party shall
not be entitled to recover attorney's fees, costs or expert fees, even if they
would otherwise be available to that party in any such arbitration.
Executive and Bank agree that any dispute, controversy or claim,
in law or equity, arising between themselves out of this Salary Continuation
Agreement or the employment or termination of Executive which is not settled
through mediation must be decided by neutral binding arbitration and not by
court action, except as provided by California Law for Judicial Review of
Arbitration Proceedings.
Arbitration shall be conducted under and pursuant to the
provisions of California Code of Civil Procedure Section 1280, et seq.,
including the provisions of Section 1283.05, as are in effect at the time of the
arbitration, and judgment may be entered on the award as therein provided.
If any party refuses or neglects to appear at or participate in
arbitration after reasonable notice, the arbitrator may decide the controversy
in accordance with whatever evidence is presented by the party or parties who do
participate. The arbitrator may award any remedy that is just and equitable in
the arbitrator's opinion. The arbitrator shall award to the prevailing party or
parties such sums as are proper to compensate for the time, expense, and trouble
of arbitration, including arbitration fees, attorney fees and costs, and expert
fees.
Except as awarded by the arbitrator as hereinabove set forth,
all fees to the arbitrator shall be paid in equal shares by the parties to the
arbitration.
ARTICLE 8
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Executive. Notwithstanding the preceding, the Bank
may amend or terminate this Agreement at any time if, pursuant to legislative,
judicial or regulatory action, continuation of this Agreement would: (i) cause
benefits to be taxable to the Executive prior to actual receipt; or (ii) result
in significant financial penalties or other significantly detrimental
ramifications to the Bank (other than the financial impact of paying any
provided benefits).
ARTICLE 9
MISCELLANEOUS
9.1 BINDING EFFECT. This Agreement shall bind the Executive and the
Bank, and their beneficiaries, survivors, executors, successors, administrators
and transferees.
9.2 NO GUARANTEE OF EMPLOYMENT. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere
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with the Bank's right to discharge the Executive. It also does not require the
Executive to remain an employee nor interfere with the Executive's right to
terminate employment at any time.
9.3 NON-TRANSFERABILITY. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
9.4 REORGANIZATION. The Bank shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Bank under
this Agreement or unless any such activity would constitute a Change of Control.
Upon the occurrence of such event, the term "Bank" as used in this Agreement
shall be deemed to refer to the successor or survivor company.
9.5 TAX WITHHOLDING. The Bank shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
9.6 APPLICABLE LAW. The Agreement and all rights hereunder shall be
governed by the laws of California, except to the extent preempted by the laws
of the United States of America.
9.7 UNFUNDED ARRANGEMENT. The Executive and the Executive Beneficiary
are general unsecured creditors of the Bank for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Bank to which the Executive and Executive Beneficiary have no
preferred or secured claim.
9.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Bank and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue this Agreement other than those
specifically set forth herein.
9.9 ADMINISTRATION. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Establishing and revising the method of
accounting for the Agreement;
(b) Maintaining a record of benefit payments; and
(c) Establishing rules and prescribing any forms
necessary or desirable to administer the
Agreement.
9.10 NAMED FIDUCIARY. The Bank shall be the named fiduciary and plan
administrator under this Agreement. It may delegate to others certain aspects of
the management and operational responsibilities including the employment of
advisors and the delegation of ministerial duties to qualified individuals.
9.11 ATTORNEY'S FEES AND COSTS. If any action at law or in equity,
including arbitration, is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs, and expert witness fees, in addition to any other relief to which that
party may be entitled.
IN WITNESS WHEREOF, the Executive and the Bank have signed this
Agreement.
REDDING BANCORP REDDING BANK OF COMMERCE
BY /s/ Xxxxxx X. Xxxxxxxx BY /s/ Xxxxxx X. Xxxxxxxx
--------------------------------- ----------------------------------
XXXXXX X. XXXXXXXX, XXXXXX X. XXXXXXXX,
CHAIRMAN CHAIRMAN
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BY /s/ Xxxxx X. Xxxxx BY /s/ Xxxxx X. Xxxxx
--------------------------------- ----------------------------------
XXXXX X. XXXXX, SECRETARY XXXXX X. XXXXX, SECRETARY
EXECUTIVE
/s/ Xxxxx X. Xxxxx
-----------------------------------
XXXXX X. XXXXX
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