AGREEMENT
EXHIBIT
10.1
AGREEMENT
This
Agreement is made and is effective as of October 26, 2007 by and between
Bank of
Marin (“Company”) and _____________ (“Executive”).
WHEREAS,
Executive is currently employed by the Company and its parent company Bank
of
Marin Bancorp, a California corporation (“Bancorp”) in the capacities
of ______________ of each of Company and Bancorp, and Executive’s background,
expertise and efforts have contributed to the success and financial strength
of
the Company; and
WHEREAS,
the Company wishes to assure itself of the continued opportunity to benefit
from
Executive’s services and Executive wishes to serve in the employ of the Company
for such purposes;
WHEREAS,
the Board of Directors of the Company (“Board”) has determined that the best
interests of the Company would be served by setting forth the benefits which
the
Company will provide to Executive if the Executive remains employed by the
Company up to and including the consummation of a Change in Control of the
Company; and
WHEREAS,
the Company wishes to provide a specific incentive to Executive to remain
in the
employ of the Company through and including the consummation of any Change
in
Control of the Company, as defined herein.
NOW,
THEREFORE, in order to effect the foregoing, the parties hereto wish to enter
into an Agreement on the terms and conditions set forth below. This
Agreement (“Agreement”) therefore sets forth those benefits which the Company
will provide to Executive in the event of a “Change in Control of the Company”
(as defined in paragraph 2) under the circumstances described below or in
contemplation of a Change in Control as discussed in Paragraph 1
below. Accordingly, in consideration of the premises and the
respective covenants and Agreements of or in contemplation of a Change in
Control as discussed in Paragraph 1 below herein contained, and intending
to be
legally bound hereby, the parties hereto agree as follows:
1.
TERM. The term of this Agreement shall be one year from the
date hereof, subject to annual automatic renewal, but the Agreement may be
terminated by the Company following 90 days written notification without
liability to the Executive prior to the occurrence of a Change of Control.
If
such termination occurs, Executive shall not be entitled to any of the benefits
provided hereunder; provided, however, a termination of this Agreement, in
contemplation of but prior to a Change in Control shall be presumed to be
a
termination following a Change in Control if such termination is reasonably
proximate in time to the public announcement of said Change in Control. If
a
Change in Control of the Company should occur while Executive is still an
employee of the Company, then this Agreement shall continue in effect from
the
date of such Change in Control of the Company for so long as Executive remains
an employee of the Company, but in no event for more than one year following
the
consummation of a Change in Control of the Company; provided, however, that
the
expiration of the term of this Agreement shall not adversely affect Executive’s
rights under this Agreement which have accrued prior to such expiration.
If no
Change in Control of the Company occurs before Executive’s status as an employee
of the Company is terminated, this Agreement shall expire on such
date.
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2.
CHANGE IN CONTROL. For purposes of this Agreement, a “Change in Control
of the Company” shall be deemed to have occurred upon the consummation of (A)
any change in the ownership of the Company (as defined in Treasury Regulation
§1.409A-3(i)(5)(v)), (B) a change in effective control of the Company (as
defined in Treasury Regulation §1.409A-3(i)(5)(vi)), or (C) a change in the
ownership of a substantial portion of the assets of the Company (as defined
in
Treasury Regulation §1.409A-3(i)(5)(vii)). Such treasury regulations
presently provide as follows: (A) A change in the ownership of a corporation
occurs on the date that any one person, or more than one person acting as
a
group (as defined in Treasury Regulation §1.409A-3(i)(5)(v)(B)), acquires
ownership of stock of the corporation that, together with stock held by such
person or group, constitutes more than 50 percent of the total fair market
value
or total voting power of the stock of such corporation. (B) A change
in effective control of the corporation occurs only on either of the following
dates: (1) The date any one person, or more than one person acting as a group
(as determined under Treasury Regulation §1.409A-3(i)(5)(v)(B)), acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the corporation
possessing 30 percent or more of the total voting power of the stock of such
corporation, or (2) The date a majority of members of the corporation’s board of
directors is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the members of the corporation’s
board of directors before the date of the appointment or election, provided
that
for purposes of this paragraph the term corporation refers solely to the
relevant corporation identified in Treasury Regulation §1.409A-3(i)(5)(ii) for
which no other corporation is a majority shareholder for purposes of that
paragraph. (C) A change in the ownership of a substantial portion of
a corporation’s assets occurs on the date that any one person, or more than one
person acting as a group (as determined in Treasury Regulation
§1.409A-3(i)(5)(v)(B)), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the corporation that have a total gross fair market value equal
to
or more than 40 percent of the total gross fair market value of all the assets
of the corporation immediately before such acquisition or acquisitions (or
such
higher amount specified by the plan no later than the date by which the time
and
form of payment must be established under §1.409A-2). For this
purpose, gross fair market value means the value of the assets of the
corporation, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.
3. TERMINATION
FOLLOWING CHANGE IN CONTROL. If a Change in Control of the
Company shall have occurred while Executive is still an employee of the Company,
Executive shall be entitled to the payments and benefits provided in paragraph
4
hereof upon the subsequent termination of Executive’s employment, within one
year following the consummation of a Change in Control of the Company, by
Executive or by the Company unless such termination is (a) because
of death, “Disability” or “Retirement” (as defined below), (b) by the
Company for “Cause” (as defined below), or (c) by Executive other than for “Good
Reason” (as defined below), in any of which events Executive shall not be
entitled to receive benefits under this Agreement.
2
(i)
Disability. If, as a result of Executive’s incapacity due to
physical or mental illness, Executive shall have been absent from her
duties with the Company on a full-time basis for 90 days, the Company may
terminate this Agreement for “Disability.”
(ii)
Retirement. Retirement shall mean the voluntary termination by
Executive of her employment for other than “Good Reason” (as defined below)
which termination qualifies as retirement in accordance with any pension
plan
adopted by the Company, pursuant to the Company’s normal retirement policies, or
in accordance with any retirement arrangement established with Executive’s
consent with respect to Executive; provided, however, that no mandatory
retirement, whether under any pension plan or in accordance with any such
other
retirement arrangement, shall constitute Retirement for purposes of this
Agreement, unless Executive has previously consented thereto in
writing.
(iii) Cause. Executive’s
employment shall cease following a Change in Control upon a good faith finding
of Cause by the Board. “Cause” hereunder means the
following:
(A)
Executive’s personal dishonesty, incompetence or willful misconduct, including
but not limited to a breach of the Company’s or Bancorp’s code of ethics or code
of conduct;
(B)
Executive’s breach of fiduciary duty involving personal profit;
(C)
Executive’s intentional failure to perform Executive’s duties for the
Company after a written demand for performance is given to Executive by the
Board which demand specifically identifies the manner in which the Board
believes that Executive has not performed her duties;
(D) Executive’s
willful violation of any law, rule, regulation or final cease and desist
order
(other than traffic violations or similar minor offenses) to the extent
detrimental to the Company’s business or reputation; or
(E)
the willful engaging by Executive in gross misconduct materially and
demonstrably injurious to the Company.
Notwithstanding
any of the foregoing, Executive remains an “at will” employee of the Company and
the Company can without cause terminate Executive’s employment prior to any
Change in Control in the discretion of the Board of Directors of the
Company.
(iv) Resignation
for Good Reason. Following a Change in Control during the Term
hereof, Executive may, under the following circumstances, regard Executive's
employment as being constructively terminated by the Company (and in such
case
Executive's employment shall terminate) and may, therefore, Resign for Good
Reason within one year of Executive's discovery of the occurrence of one
or more
of the following events, any of which shall constitute "Good Reason" for
such
Resignation for Good Reason:
3
(A)
Without Executive's express written consent, an adverse change in Executive’s
position or title, the assignment to the Executive of any duties or
responsibilities inconsistent with the Executive’s position or removal of the
Executive from or any failure to re-elect the Executive to any such
positions;
(B)
A reduction of the Executive’s base salary;
(C)
A 20%, or greater, reduction in non-salary benefits;
(D)
Failure of the Company to obtain the assumption of this Agreement by any
successor; or;
(E)
Requirement by the Company that the Executive be based anywhere other than
within 40 miles of the Company’s current headquarters in Novato,
California
(v) Notice
of Termination. Any termination by the Company pursuant to
subparagraphs (i), (ii) or (iii) above or by Executive pursuant to subparagraph
(iv) above shall be communicated by written Notice of Termination to the
other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in
this
Agreement relied upon and shall set forth in reasonable detail the facts
and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.
(vi) Date
of Termination. “Date of Termination” shall mean
(A) if
this Agreement is terminated for Disability, thirty days after Notice of
Termination is given,
(B) if
Executive’s employment is terminated pursuant to subparagraph (iv) above, the
date specified in the Notice of Termination,
(C) if
Executive’s employment is terminated for any other reason, the date on which a
Notice of Termination is given (or, if a Notice of Termination is not given,
the
date of such termination), and
(D) if
Executive is entitled to compensation pursuant to paragraph 4, the date
determined pursuant to such paragraph.
4.
COMPENSATION DURING DISABILITY OR UPON TERMINATION.
(i)
If,
after a Change in Control of the Company, Executive shall fail to perform
her
duties because of a Disability, Executive shall continue to receive her full
base salary monthly at the rate then in effect until her employment is
terminated pursuant to paragraph 3(i) hereof.
4
(ii) If,
after a Change in Control of the Company, Executive’s employment shall be
terminated for Cause, the Company shall pay Executive her full base salary
through the Date of Termination at the rate in effect at the time Notice
of
Termination is given and the Company shall have no further obligations to
Executive under this Agreement.
(iii) If,
after a Change in Control of the Company, the Company shall terminate
Executive’s employment (other than pursuant to paragraph 3(i) or 3(iii) hereof
or by reason of death or Retirement as provided in Paragraph 3(ii)) or Executive
shall terminate her employment for Good Reason, Executive shall be entitled
to
payments pursuant to this paragraph 4:
The
Company shall pay to Executive as severance pay (and without regard to the
provisions of any benefit plan) in a lump sum on the fifth day following
the
Date of Termination, the following amounts:
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(x)
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The
average salary of the Executive for the last three full years
of service
multiplied by Executive’s Seniority Factor;
and
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(y)
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The
Executive’s annual bonus for the previous year;
and
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(z)
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Executive’s
health premiums under COBRA for 18 months and Dental/Vision premiums
under
COBRA for 12 months.
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Based
on
Executive’s position as ___________, the Seniority Factor shall be
X.X.
(iv) Executive
shall not be required to mitigate the amount of any payment provided for
in this
Agreement by seeking other employment or otherwise, nor shall the amount
of any
payment provided for in this paragraph 4 be reduced by any compensation earned
by Executive as the result of employment by another employer after the Date
of
Termination, or otherwise.
(v) The
provisions of this Agreement, and any payment provided for hereunder, shall
not
reduce any amounts otherwise payable, or in any way diminish Executive’s
existing rights, or rights which would accrue solely as a result of the passage
of time, under any employee benefit plan of the Company, any employment
Agreement or other contract, plan or arrangement of the Company, except to
the
extent necessary to prevent double payment under any severance plan or program
of the Company in effect at the Date of Termination.
5.
SUCCESSOR’S BINDING AGREEMENT
(i) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, by Agreement in form and substance satisfactory
to
Executive expressly to assume and agree to perform this Agreement in the
same
manner and to the same extent that the Company would be required to perform
if
no such succession had taken place.
5
(ii) This
Agreement shall inure to the benefit of, and be enforceable by, Executive’s
personal or legal representatives, executors, administrators, successors,
heirs,
distributes, devises and legatees. If Executive should die while any amounts
would still be payable to Executive hereunder if Executive had continued
to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive’s devisee, legatee or
other designee or, if there be no such designee, to Executive’s
estate.
6.
NO EMPLOYMENT AGREEMENT. In consideration of the
foregoing obligations of the Company, Executive agrees to be bound by the
terms
and conditions of this Agreement and to remain in the employ of the Company
during any period following any public announcement by any person of any
proposed transaction or transactions which, if effected, would result in
a
Change in Control of the Company until a Change in Control of the Company
has
taken place or, in the opinion of the Board, such person has abandoned or
terminated its efforts to effect a Change in Control of the
Company. Subject to the foregoing including but not limited to the
provisions contained in Paragraph 1 that a termination in contemplation of
a
Change in Control entitles Executive to the amounts provided in Section 4,
nothing contained in this Agreement shall impair or interfere in any way
with
Executive’s right to terminate her employment or the right of the Company to
terminate Executive’s employment with or without cause prior to a Change in
Control of the Company. Nothing contained in this Agreement shall be
construed as a contract of employment between the Company and Executive or
as a
right for Executive to continue in the employ of the Company, or as a limitation
of the right of the Company to discharge Executive with or without cause
prior
to a Change in Control of the Company.
7.
NOTICE. For the purpose of this Agreement, notices and
all other communications provided for in this Agreement shall be in writing
and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed
to
the respective addresses set forth on the last page of this Agreement, provided
that all notices to the Company should be directed to the attention of the
Chairman of the Company’s Compensation Committee, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon
receipt.
8.
FURTHER ASSURANCES. Each party hereto agrees to furnish and
execute such additional forms and documents, and to take such further action,
as
shall be reasonable and customarily required in connection with the performance
of this Agreement or the payment of benefits hereunder.
9.
MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to
in writing signed by Executive and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of,
or
compliance with, any condition or provision of this Agreement to be performed
by
such other party shall be deemed a waiver of similar or dissimilar provisions
or
conditions at the same or at any prior or subsequent time. No
Agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which
are
not set forth expressly in this Agreement. This Agreement contains
the entire Agreement among the parties and supersedes and replaces any prior
Agreement between the parties concerning the subject matter
hereof. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of
California.
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10. VALIDITY. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
11. COUNTERPARTS. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
12. ARBITRATION. Any
dispute or controversy arising or in connection with this Agreement shall,
upon
written request of one party to the other, be submitted to and settled
exclusively by arbitration pursuant to the rules of the American Arbitration
Association. Judgment may be entered on the arbitrator's award in any
court of competent jurisdiction. The cost of such arbitration,
including reasonable attorney’s fees, shall be borne by the losing party or in
such proportions as the arbitrator(s) shall decide. Arbitration shall
be the exclusive remedy of Executive and the Company and the award of the
arbitrator(s) shall be final and binding upon the parties. All
reasonable costs, including reasonable attorney’s fees, incurred in enforcing an
arbitration award in court, or of seeking a court order to compel arbitration,
shall be borne by the losing party in such proceedings.
13. ADVICE
OF COUNSEL. Executive acknowledges that he has been encouraged to
consult with legal counsel of her choosing concerning the terms of this
Agreement prior to executing this Agreement. Any failure by Executive
to consult with competent counsel prior to executing this Agreement shall
not be
a basis for rescinding or otherwise avoiding the binding effect of this
Agreement. The parties acknowledge that they are entering into this
Agreement freely and voluntarily, with full understanding of the terms of
this
Agreement. Interpretation of the terms and provisions of this
Agreement shall not be construed for or against either party on the basis
of the
identity of the party who drafted the terms or provisions in
question.
14. REDUCTION
OF PAYMENT. Notwithstanding anything in the foregoing to the
contrary, if the severance payment or any of the other payments provided
for in
this Agreement, together with any other payments which Executive has the
right
to receive from the Company would constitute a "parachute payment" (as defined
in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended, or
such
similar set of laws (the “Code”)), the payments pursuant to this Agreement shall
be reduced to the largest amount as will result in no portion of such payments
being subject to the excise tax imposed by Section 4999 of the Code, provided,
however, that the determination as to whether any reduction in the payments
under this Agreement pursuant to this proviso is necessary shall be made
in good
faith by Xxxxx-Xxxxx LLP or if such firm is no longer providing tax services
to
Company to such other advisor as shall be mutually acceptable to Company
and
Executive, and such determination shall be conclusive and binding on the
Company
and Executive with respect to the treatment of the payment for tax reporting
purposes.
7
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
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ATTEST:
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BANK
OF XXXXX
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Xxxx
Plaza
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000
Xxxxxxx Xxxxxxxxx, Xxxxx 000
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Xxxxxx,
XX 00000
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Witness
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President &
CEO
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Xxxxxxx
X. Xxxxxxx
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THE
EXECUTIVE
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Pell
Plaza
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000
Xxxxxxx Xxxxxxxxx, Xxxxx 000
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Xxxxxx,
XX 00000
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Witness
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XXXXXXXXXX
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