OFFICER SALARY CONTINUATION AGREEMENT
This Agreement is made and entered into this 1st day of December, 1996,
by and between Humboldt Bank, a California state-chartered bank (the
"Employer"), and Xxxx Xxxxxxx (the "Officer").
RECITALS
WHEREAS, the Officer is an employee of the Employer serving as its Chief
Administrative Officer; and
WHEREAS, the Officer's experience and knowledge of the affairs of the
Employer and the banking industry are so valuable, it is deemed to be in the
best interests of the Employer to arrange salary continuation benefits for the
Officer so as to reasonably induce the Officer to remain in the Employer's
employment during the Officer's lifetime or until the age of retirement, unless
the employment relationship is terminated earlier as provided in the Agreement;
and
WHEREAS, it is the desire of the Employer that the Officer's services be
retained as hereinafter provided; and
NOW, THEREFORE, in consideration of the services to be performed in the
future, as well as the mutual promises and covenants contained herein, the
Officer and the Employer agree as follows:
AGREEMENT
ARTICLE I
1.1 Beneficiary. The term "Beneficiary" shall mean the person or persons
whom the Officer shall designate in a valid Beneficiary Designation Notice to
receive the benefits provided hereunder. A Beneficiary Designation Notice 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 Officer's death.
1.2 Change In Control. The term "Change in Control" shall mean a change
in control of a nature that would be required to be reported in response to Item
6(e) of Schedule l4A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or in response to any other form
or report to the regulatory agencies or governmental authorities having
jurisdiction over Employer or any stock exchange on which Employer's shares are
listed which requires the reporting of a change in control; or any merger,
consolidation or reorganization of Employer in which Employer does not survive;
or any sale, lease, exchange, mortgage, pledge, transfer or other disposition
(in one transaction or a series of transactions) of any assets of Employer
having an aggregate fair market value of fifty percent (50%) of the total value
of the assets of Employer, reflected in the most recent balance sheet of
Employer; or any "person" (as such term is used in the Exchange Act or any
individual, corporation, partnership, trust or any other entity) is or becomes
the beneficial owner, directly or indirectly, of securities of Employer
representing 25% or more of the combined voting power of Employer's then
outstanding securities; or in any one-year period, individuals who at the
beginning of such period constitute the Board of Directors of Employer cease for
any reason to constitute at least a majority thereof, unless the election, or
the nomination for election by Employer's shareholders, of each new director is
approved by a vote of at least three-quarters of the directors then still in
office who were directors at the beginning of the period; or a majority of the
members of the Board of Directors of Employer in office prior to the happening
of any event determines in its sole discretion that as a result of such event
there has been a change in control.
1.3 Disability. The term "Disability" shall have the same meaning given
such term in the Employer's Group Long Term Disability Benefits portion of the
Group Insurance Plan dated January 1, 1995, which is incorporated herein by
reference to the limited extent thereof.
1.4 Administrator. The Administrator and sole fiduciary of this
Agreement shall be the Employer.
1.5 Plan Year. The term "Plan Year" shall mean the Employer's fiscal
year.
1.6 Surviving Spouse. The term "Surviving Spouse" shall mean the person,
if any, who shall be legally married to the Officer on the date of the Officer's
death.
1.7 Termination for Cause. The term "Termination for Cause" shall mean
termination of the employment of the Officer by reason of any of the following:
(a) The willful breach of duty by Employee in the course of
his/her employment.
(b) The habitual neglect by Employee of his/her employment
duties.
(c) The substantial failure of Employee to perform the duties
of his/her positions as determined solely by the Board of
Directors of Employer, subject to good faith, fair dealing
and reasonableness by Employer.
(d) Employee's deliberate violation of any State of California
or federal banking laws, or of the Bylaws, rules, policies
or resolutions of the California Superintendent of State
Banks or Federal Deposit Insurance Corporation or other
regulatory agency or governmental authority having
jurisdiction over Employer.
(e) The determination by a state or federal banking agency or
governmental authority having jurisdiction over Employer
that Employee is not suitable to act in the capacity for
which he/she is employed by Employer.
(f) Employee is convicted of any felony or a crime involving
moral turpitude or a fraudulent or dishonest act.
(g) Employee discloses without authority any secret or
confidential information not otherwise publicly available
concerning Employer or takes any action which Employer's
Board of Directors determines, in its sole discretion and
subject to good faith, fair dealing and reasonableness,
constitutes unfair competition with or induces any
customer to breach any contract with Employer.
ARTICLE 2
2.1 Employment. The Employer agrees to employ the Officer in such
capacity as the Employer may from time to time determine. The Officer will
continue in the employ of the Employer in such capacity and with such duties and
compensation as may be determined from time to time by the Employer.
2.2 Full Efforts. The Officer agrees to devote his/her full time and
attention exclusively to the business and affairs of the Employer, except during
vacation periods, and to use his best efforts to furnish faithfully and
satisfactorily services to the Employer.
ARTICLE 3
3.1 Retirement. If the Officer shall continue in the employ of the
Employer at least until attaining the age of sixty-five (65) years, the Officer
may retire from active daily employment as of October 1, 2023, or upon such
later date as may be mutually agreed upon by the Officer and the Employer. In
any event, however, the Officer may continue to work after the age of sixty-five
(65) years.
3.2 Payment. The Employer agrees that upon such retirement it will pay
to the Officer the annual sum of Seventy five thousand four hundred eighty-one
($75,481.00), payable monthly on the first day of each month following such
retirement for a period of One Hundred Eighty (180) months, subject to the
conditions and limitations hereafter set forth.
3.3 Death After Retirement. The Employer agrees that if the Officer
shall so retire, but shall die before receiving the full amount of monthly
payments to which he/she is entitled hereunder, it will continue to make such
monthly payments to the Officer's designated beneficiary for the remaining
period. If a valid Beneficiary Designation is not in effect, then the payment
shall be made to the Officer's Surviving Spouse, or if none, said payment shall
be made to the duly qualified personal representative, executor or administrator
of the Officer's estate.
ARTICLE 4
4.1 Death Prior to Retirement. In the event the Officer should die while
actively employed by the Employer at any time after the date of this Agreement,
but prior to October 1, 2023, or if the Officer chooses to work after the age of
sixty-five (65) years, but dies before retirement, the Employer will pay the
annual sum of Seventy five thousand four hundred eighty one ($75,481.00) per
year to the Officer's designated beneficiary in equal monthly installments for a
period of One Hundred Eighty (180) months. If a valid Beneficiary Designation is
not in effect, the payments shall be made to the Officer's Surviving Spouse at
the time of death, or if none, said payments shall be made to a duly qualified
personal representative, executor or administrator of the Officer's estate. The
said monthly payments shall begin the first day of the month following the month
of the death of the Officer, provided, however, that anything hereinabove to the
contrary notwithstanding, no death benefits shall be payable hereunder if it is
determined that the Officer's death was caused by suicide on or before January
1, 1999.
4.2 Disability Prior to Retirement. In the event the Officer becomes
disabled while actively employed by the Employer at any time after the date of
this Agreement, but prior to October 1, 2023, or if the Officer chooses to work
after the age of sixty-five (65) years, but becomes disabled prior to
retirement, the Officer will be considered to be one hundred percent (100%)
vested in the amount set forth for the year in which the onset of disability
occurs as set forth in Schedule A attached hereto and made a part hereof. Said
amount at the election of the Officer will paid to Officer in a lump sum within
three (3) months of the determination of disability or be paid in equal monthly
installments as is mutually agreed upon by the Employer and the Officer. If the
Officer elects to receive monthly payments, interest will be credited monthly on
the unpaid portion of the accrued benefit at the rate of prime minus one percent
(1%). In the event the Officer dies within two (2) years as a result of the
injuries or illness that caused the original disability, the full benefit
amount, as set forth in Schedule "A" attached hereto and made a part hereof,
will be paid to the Officer's designated beneficiary as outlined in this
Agreement.
ARTICLE 5
5.1 Termination of Employment. The Employer reserves the right to
terminate employment of the Officer at any time prior to retirement. In the
event that the employment of the Officer shall be terminated prior to the
Officer's attaining the age of sixty-five (65) years, or the date of
termination, other than by reason of disability or death, then this Agreement
shall terminate upon the date of such termination of employment; provided,
however, that the Officer shall be entitled to the following benefits under the
following circumstances.
(a) Termination Without Cause. If the Officer's employment is
terminated by the Employer without cause, the Officer will
be considered to be one hundred percent (100%) vested as
set forth in Schedule "A" based on the date of the
Officer's Termination of Employment. If the Officer's
employment is terminated under the provisions of this
Paragraph 5.1(a), the Employer will pay the Officer's
vested amount in a lump sum within three (3) months of the
termination or be paid in equal monthly installments as is
mutually agreed upon by the Employer and the Officer, but
in no event commencing later than age sixty-five (65)
years.
(b) Voluntary Termination by Officer. In the event that the
Officer voluntarily terminates his/her employment prior to
his/her attaining the age of sixty-five (65) years, the
Officer will forfeit any benefits from this Plan.
(c) Termination for Cause. If the Officer is terminated for
cause as defined in Paragraph 1.7 of this Agreement, then
the Officer shall be entitled to no benefits under this
Agreement and no amount shall be paid to the Officer under
this Agreement.
(d) Change in Control. If the Officer's employment is
terminated upon a Change in Control the Officer will be
considered to be one-hundred percent (100%) vested as set
forth in Schedule "A" based upon the date of Officer's
termination of employment. The Officer will be paid in a
lump sum within ninety (90) days after the Change in
Control.
ARTICLE 6
6.1 Termination of Agreement by Reason of Changes in Law. Employer is
entering into this Agreement upon the assumption that certain existing tax laws
will continue in effect in substantially their current form. In the event of any
changes in such federal laws, the Employer shall have the option to terminate or
modify this Agreement, provided, however, that the Officer shall be entitled to
at least the same amount as he/she would have been entitled to under Paragraph
4.2 of this Agreement relating to disability. The payment of said amount shall
be made upon such terms and conditions and at such time as the Employer shall
determine, but in no event commencing later than the age of sixty-five (65)
years, or the date of termination of the Officer's employment with Employer.
ARTICLE 7
7.1 Funding. The Employer reserves the right to determine in its sole
and absolute discretion, whether, to what extent and by what method, if any, to
fund this Agreement. In the event that the Employer elects to fund this
Agreement, in whole or in part, through the use of life insurance or annuities,
or both, the Employer shall determine the ownership and beneficial interest of
any such policy of life insurance or annuity. The Employer further reserves the
right, in its sole and absolute discretion, to terminate any such policy, and
any other funding of this Agreement, at any time, in whole or in part. The
Officer shall not have any pursuant to this Agreement, and any such funding
source or amount shall not constitute security for the performance or the
Employer's obligations pursuant to this Agreement. The Officer agrees to sign
any documents and undergo any medical examination, or tests, which the Employer
may request and which may be reasonably necessary to facilitate any funding for
this Agreement including, without limitation, the acquisition of any policy of
insurance or annuity.
ARTICLE 8
8.1 Nonassignable. Neither the Officer nor the Officer's spouse nor any
other beneficiary under this Agreement shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, modify or otherwise
encumber in advance any of the benefits payable hereunder. Nor shall any of said
benefits be subject to seizure for the payment of any debts, judgements, alimony
or separate maintenance owed by the Officer or the Officer's beneficiary or any
of them, or be transferrable by operation of law in the event of bankruptcy,
insolvency or otherwise.
ARTICLE 9
9.1 Claims Procedure. 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 Officer or the Officer's beneficiary for benefits under
this Agreement shall be stated in writing and delivered or mailed to the Officer
or said beneficiary. Such decision shall set forth the specific reasons for the
denial. In addition, the Employer shall provide a reasonable opportunity to the
Officer or said beneficiary for full and fair review of the decision denying
such claim.
ARTICLE 10
10.1 Unsecured General Creditor. The Officer and the Officer's
beneficiary shall have no legal or equitable rights, interests or claims in or
to any property or assets of the Employer. No assets of the Employer shall be
held under any trust for the benefit of the Officer or his beneficiaries or held
in any way as security for the fulfillment of the obligations of the Employer
under this Agreement. All of the Employer's assets shall be and remain the
general unpledged, unrestricted assets of the Employer. 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. The Officer and its
beneficiaries shall be unsecured creditors with respect to any benefits
hereunder.
ARTICLE 11
11.1 Reorganization. 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 successor or survivor corporation.
ARTICLE 12
12.1 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Officer and the Employer and as applicable, their respective
heirs, beneficiaries, legal representatives, agents, successors and assigns.
ARTICLE 13
13.1 Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment between the Officer and the Employer nor
shall any provision of this Agreement restrict the right of the Employer to
terminate the Officer's employment or restrict the right of the Officer to
terminate his/her employment. In the event that Officer has a separate
Employment Agreement with Employer and in the event of any discrepancy or
different treatment of any term or condition in this Agreement from said
Employment Agreement, or any renewal or extension thereof, the terms and
provisions of the Employment Agreement shall control.
ARTICLE 14
14.1 Notice. Any notice required or permitted of either the Officer 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 Employer: Humboldt Bank
Attention: Personnel Officer
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
If to Officer: Xxxx Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
ARTICLE 15
15.1 Partial Invalidity. If any term, provision, covenant, or condition
of this Agreement is held by a court of competent jurisdiction 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.
ARTICLE 16
16.1 Arbitration. All claims, disputes and other matters in question
arising out of or relating to this Agreement or the breach of interpretation
thereof shall be resolved by arbitration before the Judicial Arbitration and
Mediation Services, Inc., ("JAMS"), 000 Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx,
Xxxxxxxxxx, 00000. In the event JAMS is unable or unwilling to conduct the
arbitration pursuant to this provision, or has discontinued its business, the
parties agree that the American Arbitration Association ("AAA"), 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, shall be selected as a substitute for
JAMS subject to the same terms set forth herein; provided, however, that the
rules of AAA shall apply to the conduct of the arbitration to the extent not
inconsistent with the intent of the parties as expressed herein. 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 the obligation of the parties to arbitrate
pursuant to this clause shall be specifically enforceable in accordance with
Title IX of the California Code of Civil Procedure. Any arbitration hereunder
shall be conducted within the city limits of Eureka, California.
ARTICLE 17
17.1 Governing Law and Jurisdiction. The laws of the United States of
America and the State of California, other than those laws denominated choice of
law rules, and the rules and regulations of the Board of Governors of the
Federal Reserve System shall govern the validity, construction and effect of
this Agreement.
ARTICLE 18
18.1 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.
ARTICLE 19
19.1 Modifications. Any modification of this Agreement shall be
effective only if it is in writing and signed by a party or its authorized
representative.
IN WITNESS WHEREOF, the Employer and the Officer have executed this
Agreement in the city of Eureka, state of California on the date first
above-written.
EMPLOYER: OFFICER
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxx X.Xxxxxxx
Xxxxxxxx X. Xxxxx Xxxx Xxxxxxx
