EMPLOYMENT AGREEMENT
AGREEMENT made as of the 20th day of October, 1995, between Eldorado Bank
(hereinafter referred to as the "Employer"), and Xxxxxxx Xxxxxxxxx, (hereinafter
referred to as the "Executive").
WITNESSETH:
WHEREAS, Employer on this date has consummated the acquisition of Mariners
Bancorp and Mariners Bank pursuant to an Agreement and Plan of Reorganization
dated May 22, 1995;
WHEREAS, Executive was President and Chief Executive Officer of Mariners
Bancorp and Mariners Bank and had an Employment Agreement dated July 1, 1991;
WHEREAS Employer and Executive desire to terminate the Employment Agreement
dated July 1, 1991 and replace such Employment Agreement with this Agreement;
WHEREAS, Employer is desirous of employing Executive in the capacity
hereinafter stated, and Executive is desirous of entering into the employ of
Employer in such capacity, for the period and on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. EMPLOYMENT
Employer hereby employs Executive as an Executive Vice President with the
responsibilities set forth in the job description attached hereto, and Executive
accepts the duties that are set forth in the job description attached and
accepts all other duties described herein, and agrees to discharge the same
faithfully and to the best of his ability and consistent with the highest and
best standards of the banking industry, in accordance with the policies of the
Board as established, and in compliance with all laws and the Employer's
Articles, Bylaws, Policies and Procedures. Executive shall devote his full
business time and
attention to the business and affairs of Employer to which he may be elected or
appointed and shall perform the duties thereof to the best of his ability.
Except as permitted by the prior written consent of the Chief Executive Officer
or the Board of Directors, Executive shall not directly or indirectly render any
services of a business, commercial or professional nature to any other person,
firm or corporation, whether for compensation or otherwise, which are in
conflict with Employer's interests. Executive shall perform such other duties as
shall be from time to time prescribed by the Chief Executive Officer, President
or the Board of Directors of Employer.
2. TERM
Employer hereby employs Executive and Executive hereby accepts employment
with Employer for the period of three (3) years (the "Term"), commencing with
the date of this Agreement, subject, however, to prior termination of this
Agreement as hereinafter provided. Where used herein, "Term" shall refer to the
entire period of employment of Executive by Employer, whether for the period
provided above, or whether terminated earlier as hereinafter provided, or
extended by mutual agreement in writing by the Employer and Executive.
3. COMPENSATION
In consideration for all services to be rendered by Executive to Employer,
Employer agrees to pay Executive a starting base salary of one hundred
twenty-five thousand dollars ($125,000) per year, commencing at the date of this
Agreement. The Board of Directors may increase the base salary based on
Executive's performance and Employer's performance and profitability. Such
salary increases shall be within the sole discretion of the Board of Directors.
In addition, Executive may receive incentive compensation as the Chief Executive
Officer or the Board of Directors, in its sole discretion, shall determine.
Executive's salary shall be paid monthly or semi-monthly, depending on the
policy of Employer. Employer shall deduct therefrom all taxes which may be
required to be deducted or withheld under any provision of the law (including,
but not limited to, social
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security payments and income tax withholding) now in effect or which may become
effective anytime during the term of this Agreement.
Executive shall be entitled to participate in any and all other employee
benefits and plans that may be developed and adopted by the Employer and in
which all or substantially all of the employees of Employer are eligible to
participate.
4. REIMBURSEMENT
Employer agrees to provide Executive a monthly car allowance of six hundred
($600) dollars. All costs of such automobile, including operation, maintenance,
and insurance, shall be borne by Executive.
Employer further agrees to reimburse Executive for all ordinary and
necessary expenses incurred by Executive on behalf of Employer, including
entertainment, meals and travel expenses. Executive shall provide to Employer
records substantiating the business purpose of such expenses. Any costs incurred
by Executive for conventions, meetings and seminars will be reimbursed as well
as special social entertainment expenses, provided the Chief Executive Officer
or President of Employer approves such.
Employer agrees to pay the monthly member dues for Executive's membership
at the Pacific Golf and Country Club.
5. INSURANCE
Employer agrees to provide Executive with Employer's standard health and
life insurance benefits which is now or may hereinafter be in effect for those
persons who are Executive Vice Presidents of Employer.
6. VACATION
Executive shall be entitled to accrue up to four (4) weeks vacation during
each year of the Term with at least two (2) weeks to be taken in a consecutive
period. Vacation benefits shall not accrue above four weeks at any time. The
Board of Directors at its discretion may waive the provision with respect to
unused vacation time.
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7. TERMINATION
Employer shall have the right to terminate this Agreement for any of the
following reasons by serving written notice upon Executive:
(a) Willful misconduct or criminal misfeasance in the performance of
Executive's duties and obligations as Executive Vice President;
(b) Illegal conduct, constituting a crime involving moral turpitude,
illegal conduct, or conviction of a felony, or any conduct detrimental
to the interest of Employer;
(c) Physical or mental disability rendering Executive incapable of
performing his duties for a consecutive period of 360 days, or by
death;
(d) Determination by Employer's Board of Directors that the continued
employment of Executive is detrimental to the best interest of
Employer, or for any reason whatsoever as determined by Employer's
Board of Directors and in the sole and absolute discretion of
Employer's Board of Directors.
In the event this Agreement is terminated for any of the reasons specified in
the paragraphs (a), (b), or (c) above, Executive will be paid one month's salary
calculated as of the date of Executive's termination, plus any pay in lieu of
vacation accrued to, but not taken as of the date of termination. Such
termination pay shall be considered to be in full and complete satisfaction of
any and all rights which Executive may enjoy under the terms of this Agreement
other than rights, if any, to exercise any of the stock options vested prior to
such termination. The insurance benefits provided herein shall be extended at
Employer's sole cost for thirty (30) days following the date of termination.
In the event this Agreement is terminated for any reasons specified in
paragraph (d), above, Executive shall be entitled to termination pay in the
amount of the greater of the balance payable under this Agreement or twelve (12)
months of the Executive's then current base salary per year at the date of
termination. Such termination pay shall be paid in a lump sum and shall be
considered to be in full and complete satisfaction of any and all rights which
Executive may enjoy under the terms of this Agreement.
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Where termination is pursuant to paragraph (d), above, any pay in lieu of
vacation accrued to, but not taken as of the date of termination, will be deemed
included in the termination pay. In such case, the insurance benefits provided
herein shall be extended at Employer's sole cost for six (6) months following
the date of termination.
Executive shall give sixty (60) days prior notice, in writing, to Employer
in the event Executive resigns or voluntarily terminates employment.
8. ACQUISITION OR DISSOLUTION OF EMPLOYER
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of Employer. Notwithstanding the foregoing, in the event
proceedings for liquidation of Employer are commenced by regulatory authorities,
this Agreement and all rights and benefits hereunder shall terminate.
9. INDEMNIFICATION
To the extent permitted by law, Employer shall indemnify Executive who was
or is a party or is threatened to be made a party in any action brought by a
third party against the Executive (whether or not Employer is joined as a party
defendant) against expenses, judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with said action if Executive
acted in good faith and in a manner Executive reasonably believed to be in the
best interest of the Employer (and with respect to a criminal proceeding if
Executive had no reasonable cause to believe his conduct was unlawful), provided
that the alleged conduct of Executive arose out of and was within the course and
scope of his employment as an officer or employee of Employer.
10. RETURN OF DOCUMENTS
Executive expressly agrees that all manuals, documents, files, reports,
studies, instruments or other materials used or developed by Executive during
the Term are solely the property of Employer, and Executive has no right, title
or interest therein. Upon termination of this Agreement, Executive or
Executive's
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representatives shall promptly deliver possession of all of said property to
Employer in good condition.
11. NOTICES
Any notice, request, or demand, or other communication required or
permitted hereunder shall be deemed to be properly given when personally served
in writing, when deposited in the U.S. mail, postage prepaid, or when
communicated to a public telegraph company for transmittal, addressed to the
party at the address given at the beginning of this Agreement or at any other
address as Employer or Executive may designate to the other in writing.
12. 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.
13. APPLICABLE LAW
This Agreement is to be governed by and construed under the laws of the
State of California.
14. 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.
15. INVALID PROVISIONS
Should any provisions 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 shall not be affected and the remaining
portions of this Agreement shall remain in full force and effect as if this
Agreement had been executed with said provisions eliminated.
16. ENTIRE AGREEMENT
This Agreement with the exception of the Executive Salary Continuation
Agreement dated as of even date herewith contains the entire agreement of the
parties and it supersedes any and all other
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agreements, either oral or in writing, between the parties hereto with respect
to the employment of Executive by Employer. 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 with the
exception of the Executive Salary Continuation Agreement. This Agreement may not
be modified or amended by oral agreement, but only by an agreement in writing
signed by Employer and Executive. Upon the execution of this Agreement, all
other agreements regarding the employment of Executive with Mariners Bancorp and
Mariners Bank, with the exception of the Executive Salary Continuation Agreement
dated as of even date herewith, shall terminate and Employer shall have no
liability.
17. CONFIDENTIALITY
This Agreement is to be held confidential. Breach of such confidentiality
by Executive will be subject to termination under the provisions of 7(a) of this
Agreement.
18. ARBITRATION
All claims, disputes and other matters in question arising out of or
relating to this Agreement or the breach or interpretation thereof, other than
those matters which are to be determined by the Employer in its sole and
absolute discretion, shall be resolved by binding arbitration before a
representative member, selected by the mutual agreement of the parties, of the
Judicial Arbitration and Mediation Services, Inc. ("JAMS"), presently located in
Santa Ana, California. In the event JAMS is unable or unwilling to conduct the
arbitration provided for under the terms of this Paragraph, or has discontinued
its business, the parties agree that a representative member, selected by the
mutual agreement of the parties, of the American Arbitration Association
("AAA"), presently located in Orange County, California, shall conduct the
binding arbitration referred to in this Paragraph. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement and
with JAMS (or AAA, if necessary). In no event shall
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the demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. The arbitration shall
be subject to such rules of procedure used or established by JAMS, or if there
are none, the rules of procedure used or established by AAA. Any award rendered
by JAMS or AAA shall be final and binding upon the parties, and as applicable,
their respective heirs, beneficiaries, legal representatives, agents, successors
and assigns, and may be entered in any court having jurisdiction thereof. The
obligation of the parties to arbitrate pursuant to this clause shall be
specifically enforceable in accordance with, and shall be conducted consistently
with, the provisions of Title 9 of Part 3 of the California Code of Civil
Procedure. Any arbitration hereunder shall be conducted in Orange County,
California, unless otherwise agreed to by the parties.
19. LEGAL COSTS
If either party commences an action against the other party arising out of
or in connection with this Agreement, the prevailing party shall be entitled to
have and recover from the losing party reasonable attorney's fees and costs of
suit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ELDORADO BANK
By /s/ Xxxxx X. Xxxxx
-----------------------
By /s/ Xxxxxxx Xxxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxxx
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ELDORADO BANK
JOB DESCRIPTION
Name: Xxxxxxx Xxxxxxxxx Department: Real Estate
Job Title: Executive Vice President/Real Estate Dept. Job Status: Exempt
Date: May, 1995 Job Code:
Reports to: Xxx Xxxxxxxx, President & COO Supervises: 2 - VP/Loan Officers
1 - Loan Processor
--------------------------------------------------------------------------------------------------
JOB SUMMARY: Directs, plans, manages, monitors, controls, staffs and supervises
the activities and operations of Eldorado Bank's Real Estate Department (interim
construction and non-relationship mini-perms). Ensures profitability and
productivity in the department while maintaining highest quality assets,
developing new business and providing quality customer service. Works in
conjunction with Retail Managers at San Clemente, San Xxxx Capistrano and
Monarch Beach offices to develop new business, retain customer relationships and
ensure the highest level of customer service.
NATURE AND SCOPE: The position oversees the activities of the Real Estate
Department; interim construction and mini-perms. Develops and implements sales
strategies and programs geared toward the enhancement of the department's loan
portfolio and development of long-lasting customer relationships. Provides
guidance and assistance to the department by developing and interpreting
policies and procedures, establishing goals and objectives in conjunction with
Executive Management, setting performance standards and ensuring attainment of
these performance goals.
1. Management of Real Estate Department
2. Quality and Profitability of RE Loan Portfolio
3. Development and Implementation of Sales Strategies
4. Business Development
5. Staffing, Training and Communications
6. Compliance/CRA
7. Control of Non-Interest Expense
8. Membership in Bank Committees and Outside Organizations/Groups
DUTIES AND RESPONSIBILITIES:
1. Management of Real Estate Department
*Directly supervises the activities of the department to ensure
current level of business is maintained and, through sales efforts,
loan portfolio is expanded.
*Delivers highest level of customer service to customers and branches.
*Ensures Bank's underwriting standards are met and credits are
prepared and documented in accordance with bank policies and
procedures.
*Participates in the presentation of loan packages to Loan Committee.
*Utilizes central credit department to prepare preliminary analyses of
customer's financial statements and for new and renewal credit
write-ups. RE Loan Officers may assist in preparation of credit
write-ups for more complex credits or if there are significant changes
in the financial condition on a renewal.
*Maintains support relationship with Retail Managers in San Clemente,
San Xxxx Capistrano and Monarch Beach offices assisting in their
efforts to maintain existing and generate new deposit and consumer
loan relationships.
2. Quality and Profitability of Real Estate Loan Portfolio
*Regularly reviews real estate loan portfolio and identifies problem
credits.
*Reviews delinquency list and assists in efforts to ensure
delinquencies are controlled through sustained follow-up efforts.
*Approves and rejects loans within lending authority and recommends
approval of loans over lending authority.
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3. Development and Implementation of Sales Strategies
*Establishes and implements Sales Strategies to increase the real
estate loan portfolio while ensuring the highest level of asset
quality.
*Ensures the Bank's real estate products and services are competitive
and meet the customer's needs.
*With Executive Management, sets sales goals for Real Estate
Department and Loan Officers.
*Reviews, monitors sales performance and trends to ensure the
achievement of established goals.
4. Business Development
*Develops new business by calling on prospective customers in targeted
businesses. Monitors business development efforts of the department
and the loan officers to ensure that targeted markets are being
penetrated by sales efforts.
*Identifies core business relationships with established customer
groups and creates business development programs to expand Real Estate
Department activities.
*Develops and maintains relationships with the community, customers
and coordinates with loan officers in making business development
calls.
*Uses ACT software to follow leads and organize business development
efforts.
5. Staffing, Training and Communication
*Formally reviews and evaluates performance of direct reports at least
annually and conducts counseling, as necessary.
*Establishes department goals and performance standards; ensures they
are communicated to staff and are attained.
*Ensures accurate job descriptions are established and reviewed with
staff.
*Ensures the development of staff through cross training and
developmental seminars and classes.
*Conducts employment interviews and staffs department with top
performers.
6. Compliance/CRA
*Ensures that Real Estate Department is in compliance with all
federal/state laws and regulations, and bank policies and procedures.
*Works with regulatory agencies, auditors and examiners and responds
to exceptions.
*Participates in civic and community activities to enhance the Bank's
visibility and image in the community and reinforce the Bank's
commitment to CRA.
7. Control of Non-Interest Expense
*Makes concerted effort to control and ultimately reduce department's
operating expenses.
*Promotes greater productivity and efficiency by continually
evaluating how the department operates.
*Coordinates with executive management in strategic planning and
budgeting process of department and bank.
7. Memberships in Bank Committees and Outside Organizations/Groups
*Member of bank's Board of Directors.
*Attends monthly Executive Committee and Board of Director meetings.
*Member of the bank's Executive & Bankwide Management groups.
*
*
*
ACCOUNTABILITIES/GOALS:
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ESTIMATE OF ALLOCATION OF TIME: Weekly Monthly
Management of Real Estate Department
Quality and Profitability of RE Loan Portfolio
Development and Implementation of Sales Strategies
Business Development
Staffing, Training and Communications
Compliance/CRA
Control of Non-Interest Expense
Membership in Bank Committees and Outside
Organizations/Groups
Total
JOB SPECIFICATIONS:
EDUCATION, KNOWLEDGE AND SKILLS REQUIRED:
1. Bachelors degree in Management/Finance or related experience, plus
10-15 years extensive experience in management and/or supervisory
capacity.
2. Extensive experience in all areas of lending with specific expertise
in real estate lending, including interim construction and mini-perms.
3. Strong management, organizational, sales/marketing, interpersonal,
communication, analytical, problem-solving, negotiation skills.
Flexible, results-oriented with a strong sense of urgency.
4. Proven track record of managing a high quality real estate loan
portfolio.
5. Computer literate with knowledge of Excel, Word and financial analysis
softwares.
I acknowledge receipt of this job description. I understand that the nature and
scope of my duties and responsibilities, as well as Eldorado Bank's
expectations, are more comprehensive than what is incorporated in this document.
----------------------------------- ---------------
Signature of Employee Date
----------------------------------- ---------------
Human Resources Date
Job Description Next Review Date:
-----------------
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EXECUTIVE SALARY CONTINUATION AGREEMENT
This Agreement is made and entered into this 20th day of October, 1995, by and
between Eldorado Bank, a California banking corporation (the "Employer"), and
Xxxxxxx Xxxxxxxxx, an individual residing in the State of California
(hereinafter referred to as the "Executive").
RECITALS
WHEREAS, Employer on this date has consummated the acquisition of Mariners Bank
pursuant to an Agreement and Plan of Reorganization dated May 22, 1995;
WHEREAS, Executive was President and Chief Executive Officer of Mariners Bank
and had entered into an Executive Salary Continuation Agreement with Mariners
Bank dated January 3, 1989;
WHEREAS, Employer has assumed the liabilities and contracts of Mariners Bank
pursuant to the Agreement and Plan of Reorganization including the Executive
Salary Continuation Agreement dated January 3, 1989;
WHEREAS, Employer and Executive desire to amend the Executive Salary
Continuation Agreement dated January 3, 1989 in its entirety with this
Agreement;
WHEREAS, it is deemed to be in the best interests of the Employer to continue to
provide the Executive with certain salary continuation benefits, on the terms
and conditions set forth herein, in order to reasonably induce the Executive to
remain in the Employer's employment;
NOW, THEREFORE, in consideration of the services to be performed in the future,
as well as the mutual promises and covenants contained herein, the Executive and
the Employer agree as follows:
AGREEMENT
1. TERMS AND DEFINITIONS.
1.1. ADMINISTRATOR. The Employer shall be the "Administrator" and, solely
for the purposes of ERISA, the "fiduciary" of this Agreement where a fiduciary
is required by ERISA.
1.2. ANNUAL BENEFIT. The term "Annual Benefit" shall mean an annual sum of
Sixty-Five Thousand Dollars ($65,000) only reduced to the extent required: (i)
under the other provisions of this Agreement; (ii) by reason of the lawful order
of any regulatory agency or body having jurisdiction over the Employer; and
(iii) in order for the Employer to properly comply with any and all applicable
state and federal laws, including, but not limited to,
income, employment and disability income tax laws (e.g., FICA, FUTA, SDI).
1.3. BENEFICIARY. The term "beneficiary" or "designated beneficiary" shall
mean the person or persons whom the Executive shall designate in a valid
Beneficiary Designation, a copy of which is attached hereto as Exhibit "A", to
receive the benefits provided hereunder. A Beneficiary Designation shall be
valid only if it is in the form attached hereto and made a part hereof and is
received by the Administrator prior to the Executive's death.
1.4. THE CODE. The "Code" shall mean the Internal Revenue Code of 1986, as
amended (the "Code").
1.5. DISABILITY/DISABLED. The term "Disability" or "Disabled" shall have
the same meaning given such term in the principal disability insurance policy
covering the Executive, which is incorporated herein by reference. In the event
the Executive is not covered by a disability policy containing a definition of
"Disability" or "Disabled," these terms shall mean an illness or incapacity
which, having continued for a period of one hundred and eighty (180) consecutive
days, prevents the Executive from adequately performing the Executive's regular
employment duties. The determination of whether the Executive is Disabled shall
be made by an independent physician selected by mutual agreement of the parties.
1.6. EFFECTIVE DATE. The term "Effective Date" shall mean January 3, 1989.
1.7. ERISA. The term "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.8. PLAN YEAR. The term "Plan Year" shall mean the Employer's calendar
year.
1.9. RETIREMENT. The term "Retirement" or "Retires" shall refer to the
date which the Executive attains the age of at least 65 and acknowledges in
writing to Employer to be the last day he will provide any significant personal
services, whether as an employee, director or independent consultant or
contractor, to Employer. For purposes of this Agreement, the phrase "significant
personal services" shall mean more than ten (10) hours of personal services
rendered to one or more individuals or entities in any thirty (30) day period.
1.10. SURVIVING SPOUSE. The term "Surviving Spouse" shall mean the person,
if any, who shall be legally married to the Executive on the date of the
Executive's death.
2. SCOPE, PURPOSE AND EFFECT.
2.1. CONTRACT OF EMPLOYMENT. Although this Agreement is intended to
provide the Executive with an additional incentive to remain in the employ of
the Employer, this Agreement shall not be deemed to constitute a contract of
employment between the Executive
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and the Employer nor shall any provision of this Agreement restrict or expand
the right of the Employer to terminate the Executive's employment. This
Agreement shall have no impact or effect upon any separate written Employment
Agreement which the Executive may have with the Employer, it being the parties'
intention and agreement that unless this Agreement is specifically referenced in
said Employment Agreement (or any modification thereto), this Agreement (and the
Employer's obligations hereunder) shall stand separate and apart and shall have
no effect upon, nor be affected by, the terms and provisions of said Employment
Agreement.
2.2. FRINGE BENEFIT. The benefits provided by this Agreement are granted
by the Employer as a fringe benefit to the Executive and are not a part of any
salary reduction plan or any arrangement deferring a bonus or a salary increase.
The Executive has no option to take any current payments or bonus in lieu of the
benefits provided by this Agreement.
3. PAYMENTS UPON OR AFTER RETIREMENT.
3.1. PAYMENTS UPON RETIREMENT. If the Executive shall remain in the
continuous employment of the Employer until attaining sixty-five (65) years of
age, the Executive shall be entitled to be paid the Annual Benefit in One
Hundred Fifty-Six (156) equal monthly installments, with each installment to be
paid on the first day of each month, beginning with the month following the
month in which the Executive Retires or upon such later date as may be mutually
agreed upon by the Executive and the Employer in advance of said Retirement
date.
3.2. PAYMENTS IN THE EVENT OF DEATH AFTER RETIREMENT. The Employer agrees
that if the Executive Retires, but shall die before receiving all of the One
Hundred Fifty-Six (156) monthly payments described in paragraph 3.1 above, the
Employer will make the remaining monthly payments, undiminished and on the same
schedule as if the Executive had not died, to the Executive's designated
beneficiary. If a valid Beneficiary Designation is not in effect, then the
remaining amounts due to the Executive under the term of this Agreement shall be
paid to the Executive's Surviving Spouse. If the Executive leaves no Surviving
Spouse, the remaining amounts due to the Executive under the terms of this
Agreement shall be paid to the duly qualified personal representative, executor
or administrator of the Executive's estate.
4. PAYMENTS IN THE EVENT DEATH OR DISABILITY OCCURS PRIOR TO RETIREMENT.
4.1. PAYMENTS IN THE EVENT OF DEATH PRIOR TO RETIREMENT. In the event the
Executive should die while actively employed by the Employer at any time after
the Effective Date of this Agreement, but prior to attaining sixty-five (65)
years of age or if the Executive chooses to work after attaining sixty-five (65)
years of age, but dies before Retirement, the Employer agrees to pay the Annual
Benefit with the Applicable Percentage equal to 100% for a
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period of thirteen (13) years in One Hundred Fifty-Six (156) equal monthly
installments, with each installment to be paid on the first of each month
beginning with the month following Executive's death, to the Executive's
designated beneficiary. If a valid Beneficiary Designation is not in effect,
then the amounts due to the Executive under the terms of this Agreement shall be
paid to the Executive's Surviving Spouse. If the Executive leaves no Surviving
Spouse, the amounts due to the Executive under the terms of this Agreement shall
be paid to the duly qualified personal representative, executor or administrator
of the Executive's estate.
4.2. PAYMENTS IN THE EVENT OF DISABILITY PRIOR TO RETIREMENT. In the event
the Executive becomes Disabled while actively employed by the Employer at any
time after the date of this Agreement but prior to Retirement, the Executive
shall: (i) continue to be treated during such period of Disability as being
gainfully employed by the Employer; and (ii) be entitled to be paid the Annual
Benefit in One Hundred Fifty-Six (156) equal monthly installments, with each
installment to be paid on the first day of each month, beginning with the month
following the earlier of (1) the month in which the Executive attains sixty-five
(65) years of age; or (2) the date upon which the Executive is no longer
entitled to receive Disability benefits under the Executive's principal
Disability insurance policy and does not, at such time, return to and thereafter
fulfill the responsibilities associated with the employment position held with
the Employer prior to becoming Disabled by reason of such Disability continuing.
Notwithstanding the foregoing, in the event Executive should die while actively
or gainfully employed by the Employer at any time after the Effective Date of
this Agreement and prior to Retirement, the payments provided in Paragraph 4.1
shall be paid in lieu of the payments provided in this Paragraph 4.2, provided
that Executive or his legal representative shall have not elected to take the
benefits provided by Paragraph 5 and payments provided in Paragraph 4.2 have not
commenced.
5. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED OTHER THAN BY DEATH,
DISABILITY, OR RETIREMENT.
As indicated in Paragraph 2 above, the Employer reserves the right to terminate
the Executive's employment, with or without cause but subject to any written
employment agreement which may then exist, at any time prior to the Executive's
Retirement. In the event that the employment of the Executive shall be
terminated, for any reason, including voluntary termination by the Executive,
but other than by reason of (i) Disability except as provided in Paragraph 4.2,
(ii) death, (iii) termination for cause as defined in Executive's current or
most recent employment agreement or (iv) Retirement, the Executive or his legal
representative shall be entitled to be paid the Annual Benefit, for a period of
thirteen (13) years in One Hundred Fifty-Six (156) equal monthly installments,
with each installment to be paid on the first day of each month, beginning with
the month Following the month in which the Executive terminates employment and
attains sixty-five (65) years of age or, if earlier, beginning with the month
following the Executive's death.
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6. TERMINATION FOR CAUSE.
Notwithstanding anything to the contrary, in the event Executive is terminated
for cause as defined in Executive's current employment agreement (or most recent
employment agreement if Executive does not have a current employment agreement
at the time of such termination) but not to include death or disability,
Executive shall not be entitled to any benefits pursuant to this agreement.
7. NO OWNERSHIP RIGHTS TO EMPLOYER'S ASSETS.
The Employer reserves the right to determine, in its sole and absolute
discretion, whether, to what extent and by what method, if any, to provide for
the payment of the amounts which may be payable to the Executive, the
Executive's spouse or the Executive's beneficiaries under the terms of this
Agreement ("Benefits"). The rights of the Executive or any beneficiary of the
Executive under this Agreement shall be solely those of an unsecured creditor of
the Employer.
In the event that the Employer, in its sole and absolute discretion, elects to
acquire an insurance policy, an annuity or any other asset to recoup the costs
or any portion thereof of the Benefits, then such insurance policy, annuity or
other asset shall not be deemed to be held under any trust, for the benefit of
the Executive or his or her beneficiaries or to be security for the performance
of the obligations of the Employer under this Agreement, but shall be, and
remain, a general unpledged, unrestricted asset of the Employer. The Executive
and his or her beneficiaries shall have no rights whatsoever with respect to, or
any claim against, any such insurance policy, annuity or other asset. In
connection with Employer electing to acquire any such insurance policy or
annuity, the Executive agrees to cooperate to facilitate such acquisition, and
pursuant thereto shall execute such documents and undergo such medical
examinations or tests as Employer may reasonably request.
8. CLAIMS PROCEDURE.
The Employer shall, but only to the extent necessary to comply with ERISA, be
designated as the named fiduciary under this Agreement and shall have authority
to control and manage the operation and administration of this Agreement.
Consistent therewith, the Employer shall make all determinations as to the
rights to benefits under this Agreement. Any decision by the Employer denying a
claim by the Executive, the Executive's spouse, or the Executive's beneficiary
for benefits under this Agreement shall be stated in writing and delivered or
mailed, via registered or certified mail, to the Executive, the Executive's
spouse or the Executive's beneficiary, as the case may be. Such decision shall
set forth the specific reasons for the denial of a claim. In addition, the
Employer shall provide the Executive, the Executive's spouse or the Executive's
beneficiary with a reasonable opportunity for a full and fair review of the
decision denying such claim.
5
9. STATUS OF AN UNSECURED GENERAL CREDITOR.
Notwithstanding anything contained herein to the contrary: (i) neither the
Executive, the Executive's spouse or the Executive's beneficiary shall have any
legal or equitable rights, interests or claims in or to any specific property or
assets of the Employer; (ii) none of the Employer's assets shall be held in or
under any trust for the benefit of the Executive, the Executive's spouse or the
Executive's beneficiary or held in any way as security for the fulfillment of
the obligations of the Employer under this Agreement; (iii) all of the
Employer's assets shall be and remain the general unpledged and unrestricted
assets of the Employer; (iv) the Employer's obligation under this Agreement
shall be that of an unfunded and unsecured promise by the Employer to pay money
in the future; and (v) the Executive, the Executive's spouse and the Executive's
beneficiary shall be unsecured general creditors with respect to any benefits
which may be payable under the terms of this Agreement.
10. COVENANT NOT TO INTERFERE.
The Executive agrees not to take any action which prevents the Employer from
collecting the proceeds of any life insurance policy which the Employer may
happen to own at the time of the Executive's death and of which the Employer is
the designated beneficiary.
11. MISCELLANEOUS.
11.1. EARLY TERMINATION OF BENEFITS. Notwithstanding any other provisions
of this Agreement, Bank may at any time terminate its obligation to pay any
Benefits or the unpaid portion of any Benefits, by paying to Executive or
Executive's representative the present value of the unpaid portion of such
Benefit. The present value shall be computed using a discount rate equal to two
percent per annum over the Federal Reserve Discount Rate in effect on the date
the Employer chooses to terminate its obligation to pay Benefits pursuant to
this Section. Any benefit which is prepared pursuant to this provision shall be
deemed to be 100% vested for purposes of calculating the amount of such
prepayment.
11.2. OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL. The Executive
acknowledges that he has been afforded the opportunity to consult with
independent counsel of his choosing regarding both the benefits granted to him
under the terms of this Agreement and the terms and conditions which may affect
the Executive's right to these benefits. The Executive further acknowledges that
he has read, understands and consents to all of the terms and conditions of this
Agreement, and that he enters into this Agreement with a full understanding of
its terms and conditions.
11.3. ARBITRATION OF DISPUTES. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
6
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
presently located in Santa Ana, California. In the event JAMS is unable or
unwilling to conduct the arbitration provided for under the terms of this
Paragraph, or has discontinued its business, the parties agree that a
representative member, selected by the mutual agreement of the parties, of the
American Arbitration Association ("AAA"), presently located in Orange County,
California, shall conduct the binding arbitration referred to in this Paragraph.
Notice of the demand for arbitration shall be filed in writing with the other
party to this Agreement and with JAMS (or AAA, if necessary). In no event shall
the demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. The arbitration shall
be subject to such rules of procedure used or established by JAMS, or if there
are none, the rules of procedure used or established by AAA. Any award rendered
by JAMS or AAA shall be final and binding upon the parties, and as applicable,
their respective heirs, beneficiaries, legal representatives, agents, successors
and assigns, and may be entered in any court having jurisdiction thereof. The
obligation of the parties to arbitrate pursuant to this clause shall be
specifically enforceable in accordance with, and shall be conducted consistently
with, the provisions of Title 9 of Part 3 of the California Code of Civil
Procedure. Any arbitration hereunder shall be conducted in Orange County,
California, unless otherwise agreed to by the parties.
11.4. ATTORNEYS' FEES. In the event of any arbitration or litigation
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein.
The "prevailing party" means the party determined by the arbitrator(s) or court,
as the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.
11.5. NOTICE. Any notice required or permitted of either the Executive or
the Employer under this Agreement shall be deemed to have been duly given, if by
personal delivery, upon the date received by the party or its authorized
representative; if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.
If to the Employer:
7
ELDORADO BANK
00000 XXX XXXXXX XXXXXX, XXXXX 000
XXXXXX, XXXXXXXXXX 00000
ATTENTION: X. X. XXXXXXX
IF TO THE EXECUTIVE:
XXXXXXX XXXXXXXXX
000 XXXXXXX XXXXXXXX
XXX XXXXXXXX, XXXXXXXXXX 00000
11.6. ASSIGNMENT. Neither the Executive, the Executive's spouse, nor any
other beneficiary under this Agreement shall have any power or right to
transfer, assign, hypothecate, modify or otherwise encumber any part or all of
the amounts payable hereunder, nor, prior to payment in accordance with the
terms of this Agreement, shall any portion of such amounts be: (i) subject to
seizure by any creditor of any such beneficiary, by a proceeding at law or in
equity, for the payment of any debts, judgments, alimony or separate maintenance
obligations which may be owed by the Executive, the Executive's spouse, or any
designated beneficiary; or (ii) transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. Any such attempted assignment or transfer
shall be void and shall terminate this Agreement, and the Employer shall
thereupon have no further liability hereunder.
11.7. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement shall be
binding upon and inure to the benefit of the Executive and the Employer and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement. Upon
the occurrence of such event, the term "Employer" as used in this Agreement
shall be deemed to refer to such surviving or successor firm, person, entity or
corporation.
11.8. NONWAIVER. The failure of either party to enforce at any time or for
any period of time any one or more of the terms or conditions of this Agreement
shall not be a waiver of such term(s) or condition(s) or of that party's right
thereafter to enforce each and every term and condition of this Agreement.
11.9. PARTIAL INVALIDITY. If any term, provision, covenant or condition of
this Agreement is determined by an arbitrator or a court, as the case may be, to
be invalid, void, or unenforceable, such determination shall not render any
other term, provision, covenant or condition invalid, void or unenforceable, and
the Agreement shall remain in full force and effect notwithstanding such partial
invalidity.
8
11.10. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect thereto. Each party to this
Agreement acknowledges that no other representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding on either party.
11.11. MODIFICATIONS. Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or such party's
authorized representative.
11.12. PARAGRAPH HEADINGS. The paragraph headings used in this Agreement
are included solely for the convenience of the parties and shall not affect or
be used in connection with the interpretation of this Agreement.
11.13. NO STRICT CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.
11.14. GOVERNING LAW. The laws of the State of California, other than
those laws denominated choice of law rules, and, where applicable, the rules and
regulations of any regulatory agency or governmental authority having
jurisdiction over the Employer, shall govern the validity, interpretation,
construction and effect of this Agreement.
IN WITNESS WHEREOF, the Employer and the Executive have executed this Agreement
on the date first above-written in the City of Irvine, Orange County,
California.
ELDORADO BANK
"EMPLOYER" "EXECUTIVE"
/s/ Xxxxx X. Xxxxx /s/ Xxxxxxx Xxxxxxxxx
------------------------------ -----------------------------
9
SCHEDULE A
BENEFICIARY DESIGNATION
TO: THE ADMINISTRATOR OF
ELDORADO BANK
EXECUTIVE SALARY CONTINUATION AGREEMENT
Pursuant to the provisions of my Executive Salary Continuation Agreement with
Eldorado Bank permitting the designation of a beneficiary or beneficiaries by a
participant, I hereby designate the following persons and entities as primary
and secondary beneficiaries of any benefit under said Agreement payable by
reason of my death:
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE
AND THE EXACT DATE OF THE TRUST AGREEMENT.
In the event the primary beneficiary is not the spouse of the Executive, the
spouse of the Executive will need to sign the Spousal Consent below and such
signature must be notarized.
PRIMARY BENEFICIARY:
-------------------- ----------------- --------------------
Name Address Relationship
SECONDARY (CONTINGENT) BENEFICIARY:
-------------------- ----------------- --------------------
Name Address Relationship
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ANY PRIOR DESIGNATION OF PRIMARY BENEFICIARIES AND SECONDARY BENEFICIARIES IS
HEREBY REVOKED.
The Administrator shall pay all sums payable under the Agreement by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Administrator shall pay all amounts in
accordance with the terms of my Executive Salary Continuation Agreement. In the
event that a named beneficiary survives me and dies prior to receiving the
entire benefit payable under said Agreement then and in that event, the
remaining unpaid benefit payable according to the terms of my Executive Salary
Continuation Agreement shall be payable to the personal representatives of the
estate of said beneficiary who survived me but died prior to receiving the total
benefit provided by my Executive Salary Continuation Agreement.
"EXECUTIVE"
Dated:___________________ ____________________________
10
CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:
I, ________________, being the spouse of Xxxxxxx Xxxxxxxxx, after being afforded
the opportunity to consult with independent counsel of my choosing, do hereby
acknowledge that I have read, agree and consent to the foregoing Beneficiary
Designation which relates to the Executive Salary Continuation Agreement entered
into by my spouse on _______________, 1995. I understand that the above
Beneficiary Designation adversely affects my community property interest in the
benefits provided for under the terms of the Executive Salary Continuation
Agreement. I understand that I have been advised to consult with an attorney of
my choice prior to executing this consent, so that such attorney can explain the
effects of this consent.
Dated:______________, 1995 ____________________________
_________________, Spouse
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CERTIFICATE OF ACKNOWLEDGMENT
OF NOTARY PUBLIC
State of California )
)ss.
County of ___________)
On ____________, 1995, before me, ________________, Notary Public, State of
California, personally appeared __________________
[ ] personally known to me - OR
[ ] proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
Notary Public
State of California
(Seal)
CAPACITY CLAIMED BY SIGNER:
[ ] Individual(s) Signing for Oneself/Themselves
[ ] Corporate Officer(s) ___________________ _________________
Title Company
____________________ _________________
Title Company
[ ] Partner(s) ________________________________________________________
Partnership
[ ] Trustee(s) _______________________________________________________
Trust
[ ] Attorney-in-Fact ________________________ ________________________
Principal Principal
[ ] Other _______________________________ ____________________________
Entity(ies) Represented Entity(ies) Represented
------------------------------------------------------------------------
Title or Type of Document:_______________________________________________
Date of Document:______________________ Number of Pages:________________
Signer(s) Other Than Named Above:________________________________________
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