EXHIBIT 10.10
EXECUTIVE SALARY CONTINUATION AGREEMENT
THIS AGREEMENT, made and entered into this 22nd day of May 1998, by
and between Bank of Xxxxx Xxxxx ("Bank"), a California banking corporation, and
Xxxxxxx X. Xxxxxxxx (hereinafter called the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is in the employ of the Bank, serving as its
Executive Vice President;
WHEREAS, the experience of the Executive, his knowledge of the affairs
of the Bank, and his reputation and contacts in the industry are so valuable
that assurance of his continued service is essential for the future growth and
profits of the Bank, and it is in the best interests of the Bank to arrange
terms of continued employment for the Executive so as to reasonably assure his
remaining in the Bank's employment during his lifetime or until the age of
retirement; and
WHEREAS, it is the desire of the Bank that his services be retained as
herein provided; and
WHEREAS, the Executive is willing to continue in the employ of the
Bank provided the Bank agrees to pay to him or his beneficiaries certain
benefits in accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the services to be performed in
the future as well as the mutual promises and covenants herein contained, it is
agreed as follows:
ARTICLE 1
1.1 BENEFICIARY - The term Beneficiary shall mean the person or
persons whom the Executive shall designate in writing to receive the benefits
provided hereunder.
1.2 DISABILITY - The term Disability shall mean an inability to
substantially perform the substantial and regular duties performed by the
Executive as an employee of the Bank. Such disability may either be caused by
illness or injury and includes mental disabilities. For purposes of this
Agreement, the determination of the Executive's disability shall be made in the
opinion of a competent physician or medical authority as described in Section
4.2 of this agreement. Such determination by the physician or medical
authority shall be final and conclusive on all parties hereto.
1
1.3 NAMED FIDUCIARY AND PLAN ADMINISTRATOR - The Named Fiduciary and
Plan Administrator of this plan shall be the Bank.
1.4 EFFECTIVE DATE - This Agreement is effective as of May 22, 1998
(the "Effective Date") and no benefits under this Agreement shall be payable to
or shall accrue for the benefit of, Executive prior to May 22, 1998.
ARTICLE 2
2.1 EMPLOYMENT - The Executive is employed by the Bank as Executive
Vice President. The Executive will continue in the employ of the Bank in such
capacity or as otherwise agreed upon by the parties.
2.2 FULL EFFORTS - The Executive agrees to devote his full time and
attention exclusively to the business and affairs of the Bank, except during
vacation periods, and to use his best efforts to furnish faithful and
satisfactory services to the Bank.
2.3 FRINGE BENEFIT - The salary continuation benefits provided by
this Agreement are granted by the Bank as a fringe benefit to the Executive and
are not 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 payment
or bonus in lieu of these salary continuation benefits.
ARTICLE 3
3.1 RETIREMENT - If the Executive shall continue in the employment of
the Bank until he attains the age of sixty-seven (67), he may retire from active
daily employment as of the first day of the month next following attainment of
age sixty-seven (67) or upon such later date as may be mutually agreed upon by
the Executive and the Bank.
3.1.1 PAYMENT - The Bank agrees that upon such retirement it
will pay to the Executive the annual sum of Fifty Two Thousand Dollars
($52,000), payable monthly on the first day of each month following such
retirement for a period of one hundred twenty months (120) months, subject to
the conditions and limitations herein set forth.
3.2 DEATH AFTER RETIREMENT - If the Executive shall so retire, but
shall die before receiving the full amount of monthly payments to which he is
entitled hereunder, the Bank will continue to make such monthly payments to the
duly qualified beneficiary, representative, executor or administrator of his
estate. Provided, however, that the duly qualified beneficiary, representative,
executor or administrator of the Executive's estate shall have the absolute
right upon the Executive's death to elect to receive a lump sum payment from the
Bank for the sum of the balance of payments due Executive. Such election shall
be in the discretion
2
of the duly qualified beneficiary, representative, executor or administrator
and shall be within sixty (60) days of the Executive's death. If the election
is made, the Bank shall make payment to such duly qualified beneficiary,
representative, executor or administrator within sixty (60) days of such
election.
ARTICLE 4
4.1 DEATH PRIOR TO RETIREMENT - In the event that the Executive
should die while actively employed by the Bank at any time after the date of
this Agreement, but prior to his attaining the age of sixty-seven (67) years,
the Bank will pay the annual sum of Fifty Two Thousand Dollars ($52,000) per
year to the duly qualified beneficiary, representative, executor or
administrator of the Executive's estate. Such payments shall be made in equal
monthly installments for a period of one hundred and twenty (120) months. Such
monthly payments shall begin on the first day of the month following the month
of the demise of the Executive. Provided, however, that the duly qualified
beneficiary, representative, executor or administrator of the Executive's estate
shall have the absolute right upon the Executive's death to elect to receive a
lump sum payment from the Bank for the balance of payments and payable on the
terms described in this Section 4.1. Such election shall be in the discretion
of the duly qualified beneficiary, representative, executor or administrator and
shall be within sixty (60) days of the Executive's death. If the election is
made, the Bank shall make payment of the lump sum to such duly qualified
beneficiary, representative, executor or administrator within sixty (60) days of
such election.
4.2 DISABILITY PRIOR TO RETIREMENT - In the opinion of a competent
physician or medical authority selected or approved by the Board of Directors,
the Executive had or does have or will continue to have a Disability (as defined
in Section 1.2) for some period and the aggregate of one or more of the
foregoing periods of Disability are or will be one hundred and eighty (180) days
or more in any three hundred sixty (360) day period while actively employed by
the Bank at any time after the date of this Agreement, but prior to his
attaining the age of sixty-seven (67) years, the Executive will be considered to
be one hundred percent (100%) vested in the amount set forth for the year in
which such Disability first occurs in the Accrued Salary Continuation Liability
column in Schedule A attached hereto and made a part hereof. Said amount shall
be paid to the Executive in equal monthly installments on the first day of each
month for a period of one hundred twenty (120) months beginning on the first day
of the month from the date of the opinion of Disability; provided, however, that
the Executive shall have the absolute right, upon such opinion of Disability to
elect to receive a lump sum payment from the Bank for the sum accrued in
accordance with the Accrued Salary Continuation Liability column of Schedule A
attached hereto and made a part hereof in the year of the opinion of Disability.
Such elections shall be in the Executive's discretion and shall be made within
sixty (60) days of such opinion of Disability. Should the Executive elect to
receive the lump sum payment, payment shall be made in full within sixty (60)
days of such election.
3
If the Executive dies within twenty-four (24) months after being
disabled, the Bank shall pay to the duly qualified beneficiary, representative,
executor or administrator of the Executive's estate in equal monthly
installments on the first day of each month for the period of one hundred twenty
(120) months from the date of death of Executive the amount in the Accrued
Salary Liability column of Schedule A attached hereto and made a part hereof
(less the amount paid by reason of the Executive's Disability). Provided,
however, that the duly qualified beneficiary, representative, executor or
administrator of the Executive's estate shall have the absolute right upon the
Executive's death to elect to receive a lump sum payment (less the amount of any
payments paid by reason of the Executive's Disability) from the Bank for the sum
which will pay the duly qualified beneficiary, representative, executor or
administrator of the Executive's estate the sum accrued in the Accrued Salary
Continuation Liability column of Schedule A attached hereto and made a part
hereof for the year of Executive's death. Such election shall be in the
beneficiary's, representative's, executor's or administrator's discretion and
shall be within sixty (60) days of the Executive's death. Should the qualified
beneficiary, representative, executor or administrator of the Executive's estate
elect to receive the lump sum payment, payment shall be made in full within
sixty (60) days of such election. If the Executive dies more than twenty-four
(24) months after receipt of the lump sum paid by reason of the Executive's
Disability, no further payments shall be payable under this Agreement.
ARTICLE 5
5.1 VOLUNTARY TERMINATION BY EXECUTIVE - In the event that the
Executive voluntarily terminates his employment prior to his attaining the age
of sixty-seven (67) years and if no cause exists under Section 5.2, and subject
to the following paragraph, the Executive will be considered to be 100% vested
in the amount set forth for the year of termination in the Accrued Salary
Continuation Liability column of Schedule A attached hereto and made a part
hereof. Said amount shall be paid to the Executive within two (2) years of the
voluntary termination of Executive's employment.
Executive hereby covenants and agrees that for a twenty-four (24)
month period following any voluntary termination of Executive from the Bank,
Executive shall not solicit any customers or employees of the Bank to move their
banking or employment relationships from the Bank, and Executive shall not
directly or indirectly enter into or in any manner take part in any business,
profession or other endeavor which shall be competitive with the business of the
Bank, as an employee, agent, independent contractor, owner, director or other
representative. In the event of a merger, where the Bank is not the surviving
corporation, or in the event of a consolidation, in the event of a transfer of
all or substantially all of the assets of the Bank, or in the event that the
majority of the Bank's Board of Directors, as it exists as of the date of this
Agreement, does not have control, the Executive shall be unconditionally
released from all of his noncompetition duties and obligations under this
paragraph.
4
5.2 TERMINATION BY BANK FOR CAUSE - No benefits or payments of any
kind shall be made by reason of this Agreement in the event that the employment
of the Executive is terminated by the Bank for any of the following reasons:
Executive has (i) willfully failed to perform or habitually neglected the
appropriate duties which he is required to perform hereunder; or (ii) willfully
failed to follow any policy of the Bank which materially adversely affects the
condition of the Bank; or (iii) engaged in any activity in contravention of any
Bank policy, statute, regulation or governmental policy which materially
adversely affects the Bank's condition, or its reputation in the community, or
which evidences the lack of Executive's fitness or ability to perform
Executive's duties; or (iv) willfully refused to follow any appropriate
instruction from the Board of Directors unless Executive asserts that compliance
with such instruction would cause the Bank or Executive to violate any statute,
regulation or governmental or Bank policy; or (v) subject to Section 4.2 above,
become physically or mentally disabled or otherwise evidenced his inability to
discharge his duties as chief executive officer of the Bank, or (vi) been
convicted of or pleaded guilty or nolo contendere to any felony, or (vii)
committed any act which would cause termination of coverage under the Bank's
Bankers Blanket Bond as to Executive, as distinguished from termination of
coverage as to the Bank as a whole.
5.3 OTHER TERMINATION OF SERVICE - The Bank reserves the right to
terminate the employment of the Executive at any time prior to retirement. In
the event that the employment (as provided in paragraph 2.1) of the Executive
shall terminate prior to his attaining age sixty-seven (67) years, other than
for the reasons stated in Section 5.1 or Section 5.2 above, and other than by
reason of his Disability or death, then the Executive will be considered to be
one hundred percent (100%) vested in the amount set forth for the year for
which such termination occurs in the Accrued Salary Continuation Liability
column in Schedule A attached hereto and made a part hereof. Said amount shall
be paid to Executive in equal monthly installments on the first day of each
month for the period of one hundred twenty (120) months beginning on the first
day of the month when Executive reaches age sixty-seven (67) years. Provided,
however, that the Executive shall have the absolute right, upon such
termination, to elect to receive a lump sum payment from the Bank for the
accrued amount in the year of termination in the Salary Continuation Liability
column in Schedule A attached hereto and made a part hereof. Such election
shall be in the Executive's discretion and shall be made within sixty (60) days
of termination. Should the Executive elect to receive the lump sum payment,
payment shall be made in full within sixty (60) days of such election.
ARTICLE 6
6.1 ALIENABILITY - Neither the Executive nor other beneficiary under
this Agreement shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, or commute hereunder, nor shall any of said benefits be
subject to seizure for the payment of any debts, judgments, alimony or separate
maintenance owed by the Executive or his beneficiary or any of them, or be
transferable by operation of law
5
in the event of bankruptcy, insolvency or otherwise. Any such attempted
assignment, commutation, hypothecation, transfer, or disposal of the benefit
hereunder shall be void.
ARTICLE 7
7.1 PARTICIPATION IN OTHER PLANS - Nothing contained in this
Agreement shall be construed to alter, abridge, or in any manner affect the
rights and privileges of the Executive to participate in and be covered by any
pension, profit sharing, group insurance, bonus or similar employee plans which
the Bank may now or hereafter have.
ARTICLE 8
8.1 FUNDING - The Bank reserves the right to determine how it will
fund its obligations undertaken by this Agreement. Should the Bank elect to
fund this Agreement, in whole or in part, through the medium of life insurance
or annuities, or both, the Bank shall be the owner and beneficiary of the
policy. The Bank reserves the absolute right, in its sole discretion, to
terminate such life insurance or annuities as well as any other funding program,
at any time, in whole or in part. Such termination shall in no way affect the
Bank's obligation to pay the Executive as provided in this Agreement. At no
time shall the Executive be deemed to have any right, title, or interest in or
to any specified asset or assets of the Bank, including, but not by way of
restriction, any insurance or annuity contract or contracts or the proceeds
therefrom.
8.2 UNSECURED - Any such policy shall not in any way be considered to
be security for the performance of the obligations of this Agreement. It shall
be, and remain, a general, unpledged, unrestricted asset of the Bank.
8.3 COOPERATION - If the Bank purchases a life insurance or annuity
policy on the life of the Executive, he agrees to sign any papers that may be
required for that purpose and to undergo any medical or other examination or
tests which may be necessary.
8.4 RIGHT AS CREDITOR - This Agreement shall not be construed as
giving the Executive or his beneficiaries any greater rights than those of any
other unsecured creditor of the Bank. This Agreement shall not be construed to
create a trust relationship between the parties.
ARTICLE 9
9.1 BENEFITS AND BURDENS - This Agreement shall be binding upon and
inure to the benefit of the Executive and his personal representatives and the
Bank and its successors, administrators or assignees.
6
ARTICLE 10
10.1 NOT A CONTRACT OF EMPLOYMENT - This Agreement shall not be deemed
to constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive, or
restrict the right of the Executive to terminate his employment.
ARTICLE 11
11.1 ARBITRATION - In the event that any dispute shall arise between
the parties concerning the provisions of this Agreement or the performance of
any part of the obligations hereunder, or in the event of an alleged breach of
this Agreement by any of the parties hereto, and the parties are unable to
mutually adjust and settle same, such dispute or disputes shall be submitted to
binding arbitration pursuant to the applicable rules of the American Arbitration
Association, and the decision and determination of the arbitrators shall be
final and conclusive.
ARTICLE 12
12.1 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 subject matter of this
Agreement. Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, oral or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein
and that no other agreement, statement, or promise not contained in this
Agreement shall be valid or binding. This Agreement may not be modified or
amended by oral agreement, but only by an agreement in writing signed by the
Bank and Executive.
ARTICLE 13
13.1 ATTORNEYS' FEES - If any party to this Agreement resorts to a
legal action or arbitration to enforce any provision of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' and court
fees, costs and expenses in addition to any other relief to which he or it may
be entitled. This provision applies to the entire Agreement. Each party to
this Agreement had the right to be represented by an attorney in the negotiation
and execution of this Agreement.
13.2 NOTICES - Any notice, request, demand or other communication
required or permitted hereunder shall be deemed to be properly given when
personally serviced in writing, when deposited in the United States mail,
postage prepaid, or when communicated to a public telegraph company for
transmittal, addressed to the Bank at its Administrative Office or to Executive
at the address appearing below his signature. Either party may change its
address by written notice in accordance with this section.
7
13.3 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.
13.4 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.
13.5 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 provision
eliminated.
13.6 PROVISIONS EXCLUSIVE - Each of the rights and benefits of
Executive herein is exclusive and not cumulative unless otherwise provided
herein. Executive shall receive only the specific and limited benefit in the
section to which he or his successors or representatives or administrators first
become entitled under this Agreement, and shall have no other or further
benefits or rights under or pursuant to any other section or provisions of this
Agreement.
IN WITNESS WHEREOF, the Bank has caused this Agreement dated May 22,
l998 to be duly executed, pursuant to a resolution date November 28, l995
approved by its Board of Directors, by its Chairman of the Board and its
corporate seal affixed, duly attested by its Secretary and the Executive has
hereunto set his hand and seal, in Yorba Linda, California.
BYL BANK GROUP EXECUTIVE:
By: /s/ H. Xxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxxx
X. Xxxxxx Xxxxxx, Xxxxxxx X. Xxxxxxxx
Chairman of the Board
Dated: May 22, 1998
By: /s/ Xxxx X. Xxxxx ____________________________________
Xxxx X. Xxxxx, Secretary
____________________________________
(Address)
8
SCHEDULE A
OF THE EXECUTIVE SALARY CONTINUATION AGREEMENT
DATED MAY 22, 1998
XX. XXXX XXXXXXXX
Age 51, retire at age 67, $52,000/Annual Benefit, for 10 years
Accrued Salary
Plan Year Annual Benefit Accrual Continuation Liability
--------- ---------------------- ----------------------
1 $10,736 $10,736
2 11,685 22,421
3 12,718 35,138
4 13,842 48,980
5 15,065 64,045
6 16,397 80,442
7 17,846 98,288
8 19,424 117,711
9 21,140 138,852
10 23,009 161,861
11 25,043 186,903
12 27,256 214,160
13 29,666 243,825
14 32,288 276,113
15 35,142 311,255
16 38,248 349,503
POST RETIREMENT
17 28,818 326,321
18 26,769 301,091
19 24,539 273,630
20 22,112 243,742
21 19,470 211,212
22 16,595 175,807
23 13,465 137,272
24 10,059 95,331
25 6,352 49,683
26 2,317 0
9
