Exhibit 10.8
ELDORADO BANK
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made effective July 1, 1997 between
ELDORADO BANK ("Bank"), having a principal place of business at 00000 Xxxxx
xx xx Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000, and XXXXXXXXX X.
XXXXXXXX, ("Employee"), whose residence is 000 Xxxxx Xxxx, #000, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000.
WITNESSETH
WHEREAS, Bank is a state bank duly organized, validly existing, and in
good standing under the laws of the State of California, with power to own
property and carry on its business as it is now being conducted;
WHEREAS, Bank desires to continue to avail itself of the skill,
knowledge and experience of Employee in order to insure the successful
management of its business; and
WHEREAS, the parties hereto desire to specify the terms of Employee's
continued employment by Bank;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, it is agreed that from and after July 1, 1997 (the "Effective Date"),
the following terms and conditions shall apply to Employee's employment.
AGREEMENT
A. TERM OF EMPLOYMENT
1. Term. The term of Employee's employment by Employer pursuant to this
Agreement shall be for a period commencing on the date of this Agreement and
terminating as follows:
(a) During the period December 1 through December 31 of each calendar year
hereafter, commencing with calendar year 1997, either party may give
written notice to the other party that this Agreement shall terminate on
December 31 of the first calendar year following the calendar year in
which such written notice is given; subject, however, to prior
termination of this Agreement as permitted by law or as hereinafter
provided.
(b) Where used herein, "Term" shall refer to the entire period of employment
by Employee by Bank hereunder, whether for the period provided above, or
whether terminated earlier.
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B. DUTIES OF EMPLOYEE
1. Duties. Subject to the powers by law vested in the Board of
Directors of Bank, Employee shall perform the duties of Small Business
Administration ("SBA") Department Manager of Bank, and such other duties as
the Bank shall reasonably designate consistent with such position. In that
capacity, Employee is primarily responsible for managing all facets of the
SBA Loan Department, including but not limited to, marketing, packaging,
closing and disbursements.
During the Term, Employee shall perform the services herein contemplated
to be performed by Employee faithfully, diligently and to the best of
Employee's ability, consistent with the highest standard of the banking
industry and in compliance with all applicable laws, Bank's Articles of
Association and Bylaws and Bank's policies, as modified from time to time,
and communicated to Employee.
The precise services to be performed by Employee may be extended or
curtailed, from time to time, at the discretion of the Chief Executive
Officer of Bank, without resulting in a recission of this Agreement, provided
such services shall at all times be of the nature customarily performed by
the SBA Department Manager of a Bank and shall not require relocation to an
office outside Orange County, California or to an office more than 25 miles
from the Bank's executive offices.
2. Conflicts of Interests. Except as permitted by the prior written
consent of the Chief Executive Officer of Bank, Employee shall devote
Employee's entire productive time, ability and attention to the business of
Bank during the term and normal business hours, and Employee shall not
directly or indirectly render any services of a business, commercial or
professional nature to any person, firm or corporation whether for
compensation or otherwise, which are in conflict with Bank's interest.
C. COMPENSATION
1, Base Salary. For Employee's services hereunder, Bank shall pay or
cause to be paid as base salary to Employee not less than the amount of Four
Thousand Nine Hundred Sixteen Dollars and Sixty-Eight Cents ($4,916.68) per
month during the Term, beginning with the Effective Date. Said salary shall
be paid in equal pro rata, semi-monthly installments in conformity with
Bank's normal payroll period. Employee's base salary shall be subject to
review annually with any increases to be at sole discretion of the Bank.
2. Commissions. During the Term, Employee shall be entitled to
commissions determined in accordance with the July 1, 1997 commission
schedule attached as Exhibit "A" to this Agreement.
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3. Equity. In the event any stock option, stock appreciation right, stock
bonus, employee stock ownership or other plan or program is implemented under
which senior officers of the Bank are eligible to receive stock options,
stock appreciation rights, equity interests or other rights or similar
benefits respecting the Bank or its parent company (an "Equity Plan").
Employee shall be considered for participation in any such Equity Plan on
terms no less favorable than those made available generally to other senior
officers of the Bank.
D. BENEFITS
1. Vacation and Sick Pay. Employee shall be entitled to vacation and sick
pay during the Term, in accordance with Bank's Personnel Policy. Vacation
earned, but not taken, may be accumulated in accordance with Bank's Personnel
Policy.
2. Group Medical and Life Insurance Benefits. During the Term, Bank shall
provide for medical, dental, vision, accident, disability and life insurance
benefits to Employee in accordance with Bank's standard employee benefits.
3. Automobile Expense Reimbursement. Employee shall maintain a log of
automobile usage for business purposes and submit number of miles driven on
an expense report, once each month, to be reimbursed at the current rate per
mile in accordance with Bank policy.
4. Automobile Telephone Reimbursement. Employee shall be reimbursed on a
monthly basis for automobile telephone charges directly related to Bank
business.
5. Other Expenses. Employee shall be reimbursed for cellular phone charges
directly related to Bank's business and for all costs of maintaining a fax
machine at Employee's home. Employee shall also be reimbursed for travel,
entertainment and other reasonable business expenses incurred in connection
with the performance of her duties, subject to the Bank's expense
reimbursement policy and the presentation of reasonable documentation for
such expenses in accordance with IRS guidelines.
E. TERMINATION
1. Termination by the Board of Directors. Employee is an officer of Bank,
appointed by the Board of Directors. Under this Agreement, Employee serves at
the pleasure of the Board of Directors and is subject to dismissal by the
Board at any time, without further obligation or liability to Employee, other
than as provided herein.
In the event Bank elects to dismiss Employee without cause and terminate
this Agreement, upon Employee's execution and delivery to Bank of an original
Waiver and Release Agreement (attached as exhibit "B" hereto), and not more
than ten (10) days after the later of the termination of Employee's
employment in accordance with this Section E.1. and the date Bank received
the Waiver and Release Agreement, Employee shall be entitled to a severance
payment equal to twelve (12) months pay in an amount equal to her gross
compensation, inclusive of
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bonus and commissions, for the prior twelve (12) months and such other sums
as are provided for under Section E.5.
In the event the Bank elects to dismiss Employee for cause, Employee
shall not be entitled to receive compensation or other benefits for any
period after termination for cause. For the purposes of this Agreement,
"Cause" shall mean Employee (i) has been adjudged guilty of a felony or a
misdemeanor involving moral turpitude by a court of competent jurisdiction;
(ii) has committed any act which would cause termination of coverage under
the Bank's Banker's Blanket Bond as to Employee (as distinguished from
termination of coverage as to the Bank as a whole); (iii) was involved in
criminal misfeasance or willful misconduct in the performance of her duties;
or (iv) has intentionally breached this Agreement or Bank's Code of Ethics,
as communicated generally to the Bank's employee in writing.
2. Action by Supervisory Authority. This Agreement shall terminate
immediately without further liability or obligation to Employee or Bank:
(a) If Bank is closed or taken over by the State Banking Department
or other supervisory authority, including the Federal Reserve Board; or
(b) If such supervisory authority should exercise its cease and
desist powers to remove Employee from office.
3. Merger or Transfer of Assets. This Agreement shall not be terminated
due to: (a) a merger where Bank is not the surviving corporation; (b) a
consolidation; or (c) a transfer of all or substantially all of the assets of
Bank.
4. Termination by Employee. Employee may terminate her employment with
Bank, and this Agreement, upon sixty (60) days written notice of termination
to Bank.
5. Effect of Termination. In the event of the termination of Employee or
this Agreement prior to the completion of the Term for any of the reasons
specified in this Paragraph E, Employee shall be entitled to the salary
earned by Employee prior to the Effective Date of Termination, as determined
by the Chief Executive Officer of Bank, computed pro rata up to and including
that date, and accrued but unused vacation time (to the extent accumulated in
accordance with Paragraph D.I.) Employee shall be entitled to no further
compensation for services rendered after the Effective Date of Termination
other than pursuant to Paragraphs E.1. and E.6. Employee shall receive
commissions for SBA loans submitted by Bank to the SBA and/or approved by the
Bank for submission to the SBA prior to the Effective Date of Termination.
Such commissions will be paid as previously outlined in Paragraph C.2.
6. Change in Control Compensation. In the event (a) a Change of Control
has occurred, Good Reason exists and Employee gives written notice to the
Bank within one-hundred eighty (180) days after the occurrence of such Good
Reason that Employee is terminating her employment with the Bank for Good
Reason, and provided the Employee has delivered to Bank
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a Waiver and Release Agreement (attached as exhibit "B" hereto), Employee
shall be entitled to a severance payment equal to twelve (12) months pay in
an amount equal to her gross compensation, inclusive bonus and commissions,
for the prior twelve (12) months and such other sums as are provided for
under Section E.5. The Severance Payment will be paid not more than ten (10)
days after the later of the termination of Employee's employment in accordance
with this paragraph 6 and the date Bank receives the Waiver and Release
Agreement. Each Change of Control shall give Employee a separate right to
give the notice set forth in the first sentence of this paragraph 6.
"Change of Control" shall mean (i) any transaction or series of
related transactions as a result of which Commerce Security Bancorp, Inc. or
Bank does not immediately thereafter own at least fifty percent (50%) of the
combined voting power of the outstanding securities of the Bank; (ii) a sale
of all or substantially all of the assets of the Bank to an entity of which
less than fifty percent (50%) of the combined voting power of the outstanding
securities are owned by Commerce Security Bancorp, Inc. or Bank; (iii) any
consolidation or merger of Commerce Security Bancorp, Inc. or Bank, as a
result of which consolidation or merger the shareholders of Commerce Security
Bancorp, Inc. or Bank immediately prior thereto own less than fifty percent
(50%) of the combined voting power of the outstanding securities of the
surviving or resulting entity immediately thereafter; or (iv) a sale by
shareholders of fifty percent (50%) of the combined voting power of the
outstanding securities of the Bank or Commerce Security Bancorp, Inc.
"Good Reason" shall mean the occurrence of Employee (i) being
delegated or assigned duties by the Board of Directors ("Board") or the
Chief Executive Officer of Bank which are materially inconsistent with the
position and status of SBA Department Manager of Bank, (ii) having had
removed by the Board or the Chief Executive Officer of Bank such authority,
responsibility and resources which are necessary to carry out the duties of
SBA Department Manager of Bank, (iii) having a substantial and adverse
alteration in the nature, status, or prestige of Employee's responsibilities
due to the action of the Board or the Chief Executive Officer of Bank, which
is verifiable by tangible evidence, including any material increase in
Employee's work requirements, or material decrease in staff or resources
allocated to the SBA Department (except decreases resulting from general
economic conditions or governmental action affecting demand for SBA loans
generally); (iv) being relocated to an office more than twenty-five (25)
miles from the Bank's executive offices or outside of Orange County,
California.
F. GENERAL PROVISION
1. Trade Secrets and Confidentiality. Employee will have access to and
become acquainted with what Employee and bank acknowledge are trade secrets,
to wit, knowledge or
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data concerning Bank, including its operations, it business, its customers,
and its customers' financial condition, their financial needs, and methods of
doing business. Employee shall not disclose any of the aforesaid trade
secrets, directly or indirectly, or use them in any way, except as required
in the course of Employee's employment with Bank.
Employee understands and agrees (a) that she will maintain all
proprietary and confidential information of the Bank as proprietary and
confidential at all times during and after her employment, (b) that she will
not disclose or communicate such information to any third party or make use
of it on her own behalf or on behalf of any third party, and (c) upon her
termination, that she will deliver all tangible forms or media which she may
have containing such information to the Bank. For purposes of this paragraph
F.1., "information" includes trade secrets, records, practices, letters,
plans, drawings, computer programs and data, technical data, financial and any
other business data the disclosure of which might reasonably be considered
contrary to the interest of the Bank.
2. Covenant Not to Interfere. Employee hereby covenants and agrees that
she will not now, or for a period of one (1) year after termination, solicit
employees of the Bank for employment by herself of any other person. After
termination of employment, Employee is not, however, restricted from being
employed by or engaged in a competing business.
3. Return of Documents. Employee expressly agrees that all manuals,
documents, files, reports, studies, instruments or other materials used
and/or developed by Employee during her employment with Bank are solely the
property of Bank, and that Employee has no right, title or interest therein.
Upon termination of Employee's employment, Employee or Employee's
representative shall promptly deliver possession of all of said property to
Bank in good condition.
4. Notices. Any notice, request, demand or other communication required
or permitted hereunder shall be deemed to be properly given when personally
served in writing, when deposited in the United States mail, postage prepaid,
or when communicated to a public telegraph company for transmittal, addressed
to the party at the address appearing at the beginning of this Agreement.
Either party may change its/her address by written notice in accordance with
this paragraph.
5. Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective executors,
administrators, successors and assigns.
6. IRC Provisions. Notwithstanding anything in this Agreement to the
contrary, if any portion of the payment pursuant to paragraphs E.1 and E.6.,
combined with any other payments or benefits, is either non-deductible or
subject to an excise tax under Internal Revenue Code Sections 280G or 4999,
respectively, the payment shall be reduced to the extent necessary to make
such sections inapplicable.
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7. Mitigation. Employee shall have no obligation to mitigate damages
based upon Employee's termination pursuant to paragraphs E.1. and E.6. above,
and any payment shall not be reduced as a result of Employee obtaining other
employment within twelve (12) months of Employee's termination.
8. Applicable Law. Except to the extent governed by the laws of the
United States, this Agreement is to be governed by and construed under the
laws of the State of California.
9. Captions and Paragraph Headings. Captions and paragraph headings used
herein are for convenience only and are not a part of this Agreement and
shall not be used in construing it.
10. Invalid Provisions. Should any provision of this Agreement for any
reason be declared invalid, void, or unenforceable by a court of competent
jurisdiction, the validity and binding effect of any remaining portion should
not be affected, and the remaining portions of this Agreement shall remain in
full force and effect as if this Agreement had been executed with said
provision eliminated.
11. Entire Agreement. This Agreement contains the entire agreement of
the parties. It supersedes any and all other agreements, either oral or in
writing, between the parties hereto with respect to the employment of
Employee by Bank. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, oral or otherwise,
have been made by any party, or anyone acting on behalf of any party, which
are not embodied herein, and that no other agreement, statement or promise
not contained in this Agreement shall be valid or binding. This Agreement may
not be modified or amended by oral agreement, but only by an agreement in
writing signed by the Chief Executive Officer of the Bank and Employee.
12. Arbitration. If any dispute, controversy or claim arises out of or
relates to this contract, the parties agree first to try to settle the
dispute by mediation under the Rules of Judicial Arbitration & Mediation
Services (JAMS) before resorting to arbitration. Thereafter, any dispute,
controversy or claim not resolved by mediation shall be settled by binding
arbitration in accordance with the Rules of JAMS, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
(a) The arbitrator shall determine which is the prevailing party
and shall include in the award that party's actual attorneys' fees and
costs.
(b) As soon as practicable after selection of the arbitrator, the
arbitrator or his or her designated representatives shall determine a
reasonable estimate of anticipated fees and costs of the arbitrator, and
render a statement to each party setting forth that party's pro rata share
of said fees and costs. Thereafter, each party shall, within ten (10) days
of receipt of said statement, deposit said sum with arbitrator. Failure of
any party to make such a deposit shall result in a forfeiture
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by the non-depositing party of the right to prosecute or defend
the claim which is the subject of the arbitration, but shall not
otherwise serve to xxxxx, stay or suspend the arbitration proceedings.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ELDORADO BANK XXXXXXXXX X. XXXXXXXX
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------- --------------------------------
Date: November 10, 1997 Date: 11/1/97
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EXHIBIT A
ELDORADO BANK
SBA DEPARTMENT MANAGER COMMISSION STRUCTURE
Effective July 1, 1997
Commissions on SBA 7a loans are on a 75% guarantee or greater equivalent
basis. (Example: $1,000,000 loan at 60% guarantee - the guaranteed portion,
or $600,000, is divided by 75% to arrive at an equivalent loan amount of
$800,000.) SBA Loan Commissions are paid semi-monthly, through the payroll
process, after the SBA loan has been booked and is fully funded.
SBA 7a COMMISSION STRUCTURE
- 1% commission for all indexed loans based on 1% or more over the Wall
Street Journal prime rate.
- 1/2% commission for all loans that are at prime to 3/4% over prime.
- 3/4% commission for all loans with "cap" terms and an interest rate
of at least prime + 1%.
- If a loan is referred by another bank employee, the commission is
reduced by 1/4 point (25 basis points).
- loans handled by other SBA officers, which have been referred by the
department manager, generate a commission of 30 basis points to the
department manager.
- all other 7a loans produced by the SBA Department generate a
commission of 20 basis points to the department manager.
504 LOANS COMMISSION STRUCTURE
In this case, there will be a first and second trust deed. The first will be
sold off for par or premium and Eldorado Bank will charge fees. The
department manager's commission is based on the total premium and fees
collected by Eldorado Bank, less the SBA fee of 50 basis points and other
waived "out of pocket" fees.
- When the total premium and fees collected net 300 basis points or
more and the department manager referred the loan, the department
manager receives a commission of 50% of the total premium and fees
collected plus an additional 20%, as the department manager.
- When the total premium and fees collected nets less the 000 xxxxx xxxxxx,
Xxxxxxxx Bank always receives 90 basis points and, if the department
manager referred the loan, 50% of the remainder is paid to the department
manager as the referring employee and 20% as the department manager.
- In either case, if the department manager is not the referring employee,
a 20% commission is paid to the department manager, as outlined above.
The negotiated program with the secondary market source for 504 loans
includes a bonus payable at the end of the year when certain dollar
targets are met. In this case, the department manager receives 20% of the
bonus.
COMMISSIONS ON LOANS REFERRED TO OTHER FINANCIAL INSTITUTIONS
There will be times when a loan, of any type, is brought into Eldorado Bank
by the SBA Department and is declined by the Bank. The SBA Department may
elect to refer this loan to another lending institution for funding and the
lending institution will generally pay a referral fee.
If the department manager is the referring employee, the department manager
receives 40% of what is collected as the referring employee and 10% as the
department manager. If the department manager is not the referring employee,
the department manager receives 10% of what is collected.
EXHIBIT B
WAIVER AND RELEASE AGREEMENT
This Waiver and Release Agreement (the "Waiver Agreement") is entered
into by and among Xxxxxxxxx X. Xxxxxxxx ("Employee"), Eldorado Bank ("Bank"),
Commerce Security Bancorp, Inc., a California corporation, and their
officers, directors, employees, agents, affiliates and subsidiaries
(collectively, the "Company"). Terms not otherwise defined herein shall have
the meanings ascribed to such terms in the Agreement (as hereafter defined).
RECITALS
A. Employee and Bank have entered into an Employment Agreement effective
July 1, 1997 (the "Agreement").
B. A condition precedent to certain of Company's obligations under the
Agreement is the execution of this Waiver Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties,
intending to be legally bound, agree and covenant as follows:
RELEASE
In consideration for the execution of the Agreement, and the agreements
set forth therein, Employee agrees unconditionally and forever to release and
discharge the Company and its affiliated business entities, their respective
officers, directors, employees, representatives, attorneys, agents and
assigns from any and all claims, actions, causes of action, demands, rights
or damages of any kind or nature which Employee may now have, or ever have,
whether known or unknown, including any claims, causes of action or demands
of any nature arising out of or in any way relating to Employee's employment
with, or separation from, the Company on or before the date of execution of
this Waiver Agreement.
This release specifically includes, but is not limited to, any claims for
discrimination and/or violation of any statutes, rules, regulations or
ordinances, whether federal, state or local, including, but not limited to,
Title VII of the Civil Rights Act of 1964, as amended, age claims under the
Age Discrimination in Employment Act of 1967, as amended by the Older Workers
Benefits Protection Act of 1990, the Employee Retirement Income Security Act
of 1974, as amended, the California Fair Employment and Housing Act, the
California Labor Code, the Equal Pay Act, the Americans With Disabilities
Act, the Rehabilitation Act of 1973, the Racketeer Influenced and Corrupt
Organizations Act, the Financial Reform Recovery and Enforcement Act of 1989,
and/or Section 1981 of Title 42 of the United States Code.
Employee further agrees knowingly to waive the provisions and protections
of Section 1542 of the California Civil Code, which reads:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which, if known by him, must have materially affected his settlement with the
debtor.
REPRESENTATIONS OF EMPLOYEE
Employee represents and agrees that, prior to the execution of this
Waiver Agreement, Employee has had the opportunity to discuss the terms of
this Waiver Agreement with legal counsel of Employee's choosing.
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Employee affirms that no promise or inducement was made to cause
Employee to enter into this Waiver Agreement other than the execution of the
Agreement and the inducements provided therein. Employee further confirms
that Employee has not relied upon any other statement or representation by
anyone other than what is in this Waiver Agreement as a basis for Employee's
agreement.
MISCELLANEOUS
Except for the Agreement, this Waiver Agreement sets forth the entire
agreement between Employee and the Company, and shall be binding upon both
party's heirs, representatives and successors. This Waiver Agreement shall be
construed under the laws of the State of California, both procedurally and
substantively. Any and all disputes or claims arising out of, or in any way
related to, Employee's employment with, or separation from, the Company, as
well as any and all disputes or claims arising out of, or in any related to,
this Waiver Agreement, including, without limitation, fraud in the inducement
of this Waiver Agreement, or relating to the general validity or
enforceability of this Waiver Agreement, shall be submitted to final and
binding arbitration before an arbitrator of the American Arbitration
Association in Orange County, in accordance with the rules of that body, and
the prevailing party shall be entitled to reasonable costs and attorneys'
fees. Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. If any portion of this Waiver Agreement is
found to be illegal or unenforceable, such action shall not affect the
validity or enforceability of the remaining paragraphs or subparagraphs of
this Waiver Agreement.
Employee acknowledges that Employee has been advised that Employee has
twenty-one (21) days to consider this settlement, and that Employee was
informed that Employee has the right to consult with counsel regarding this
Waiver Agreement. To the extent Employee has taken less than twenty-one (21)
days to consider this Waiver Agreement, Employee acknowledges that Employee
has had sufficient time to consider the Waiver Agreement and to consult with
counsel, and that Employee does not desire additional time.
This Waiver Agreement is revocable by Employee for a period of seven (7)
days following Employee's execution of this Waiver Agreement. The revocation
by Employee of this Waiver Agreement must be in writing, must specifically
revoke this Waiver Agreement and must be received by the Company prior to the
eight (8th) day following the execution of this Waiver Agreement by Employee.
This Waiver Agreement becomes effective, enforceable and irrevocable on the
eighth (8th) day following Employee's execution of the Waiver Agreement.
The undersigned agrees to the terms of this Waiver Agreement and
voluntarily enters into it with the intent to be bound hereby.
Dated: ____________________, 199___ ____________________________________
XXXXXXXXX X. XXXXXXXX
Dated: ____________________, 199___ ELDORADO BANK
By: _____________________________
Name: _____________________________
Title: _____________________________
Dated: ____________________, 199___ COMMERCE SECURITY BANCORP, INC.
By: _____________________________
Name: _____________________________
Title: _____________________________
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