AGREEMENT
This AGREEMENT is entered into this 12th day of March, 1997, by and
between BANK OF SANTA XXXXX, a California corporation (hereinafter referred
to as the "Bank"), BSM BANCORP, a California corporation (hereinafter
referred to as the "Company") and XXXXX XXXXXXXX (hereinafter referred to as
the "Executive").
RECITALS
WHEREAS, Executive has been an Executive Officer of the Bank since 1994
and an Executive Officer of the Company since 1996;
WHEREAS, the Bank desires to continue to avail itself of the skill,
knowledge and experience of Executive in order to ensure the successful
operation of the Bank and the Company without distraction should the Bank
and/or the Company be sold, be merged out of existence, or otherwise be
acquired by another financial institution, individuals or others, and
Executive is terminated, or Executive's employment with the Bank and/or the
Company is adversely affected; and
WHEREAS, to induce Executive to remain in the employ of the Bank and the
Company, and to continue as an Executive Officer of the Bank and the Company,
the Bank and the Company are willing to provide benefits to Executive in the
event his or her employment is terminated or adversely affected after such a
change of control;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the parties hereto covenant and agree as follows:
0
A. TERM OF AGREEMENT.
This Agreement shall terminate upon the first to occur of (i) the
termination of Executive's employment with Bank and/or the Company for cause,
disability or voluntarily by Executive, and shall have occurred between the
date of this Agreement and March 12, 2002 (the "Term of this Agreement"), or
(ii) the termination of, or adverse effect on, Executive's employment with
Bank and/or the Company within twelve (12) months following a change of
control of the Company and/or the Bank, when the benefits provided for in
Paragraph E have been conferred and paid, or (iii) March 12, 2002.
B. EFFECT ON EMPLOYMENT
This Agreement is not intended to alter or otherwise change the current
employment relationship between Executive and the Bank and/or the Company
except as described in the following Paragraphs, and Executive further
acknowledges his employment at-will status with the Bank and the Company as
described under the Bank's Personnel Policy.
C. CHANGE OF CONTROL
No benefits shall be payable hereunder unless there shall have been a
Change of Control of the Bank and/or the Company and Executive's employment
with the Bank shall thereafter have been terminated in the manner set forth
in Paragraph D below, or Executive terminates employment for any of the
reasons set forth in paragraph D.3. below following such change of control.
For purposes of this Agreement, a "Change of Control" of the Bank and/or the
Company shall mean: (i) a merger with any Person (as defined below), where
the Bank and/or the Company is not the surviving corporation; (ii) a
consolidation with any Person, where the Bank and/or the Company is not the
surviving corporation; (iii) a transfer to any Person of all or substantially
all of the assets of the Bank and/or the Company; or (iv) an acquisition by
any Person of beneficial ownership of an aggregate of more than 25% of the
issued and outstanding shares of common stock of the Bank and/or the Company,
whether or not such Person or Persons are current shareholders of the Bank
and/or the Company at the time of such acquisition, coupled with or followed
by the election as directors of the Bank and/or the Company of persons who
were not directors at the time of such acquisition if such
1
persons shall become a majority of the Board of Directors of the Bank and/or
the Company. As used in this Agreement, the term "Person" shall include any
financial institution, corporation, individual, partnership or association,
and any group formed for the purpose of acquiring, holding or disposing of
the common stock of the Bank and/or the Company, and the term "beneficial
ownership" shall have the same meaning as under Rule 13d-3 of the Securities
and Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended.
D. TERMINATION FOLLOWING CHANGE OF CONTROL
If (i) a Change of Control shall have occurred, and if Executive's
employment with the Bank and/or the Company is terminated within twelve (12)
months after such Change of Control, or Executive terminates employment with
the Bank and/or the Company pursuant to Xxxxxxxxx X.0. below, and unless such
termination is (a) because of his death, (b) for Cause or Disability (both as
defined below) or (c) by Executive other than for Good Reason (as defined
below), he shall be entitled to the benefits provided in Paragraph E.2.
below.
1. DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, he shall have been absent from or unable to
perform his duties with the Bank and/or the Company for a period of three
consecutive months, and if within 30 days after written notice of termination
is given (which notice may not be given prior to the expiration of the
three-month period) he shall not have recommenced the full-time performance
of his duties, the Bank and/or the Company may terminate his employment for
"Disability."
2. CAUSE. Termination of Executive's employment for "Cause" shall mean
termination by the Bank and/or the Company for cause as defined in its
Personnel Policy or by a regulatory authority for any reason within its
purview.
3. GOOD REASON. Termination by Executive of his employment for "Good
Reason" shall mean termination by him after any of the following events
occurs without his express written consent:
(i) a reduction in Executive's annual salary or benefits;
2
(ii) an adverse change in Executive's duties whereby he is
performing duties of a higher level employee than the duties being performed
by Executive at the time of the Change of Control;
(iii) Executive is required to work more than fifty (50) miles from
the Bank's Santa Xxxxx Way office;
(iv) Executive is transferred to a department or division and is
required to perform duties that Executive is not familiar or knowledgeable.
4. NOTICE OF TERMINATION. Any purported termination by the Bank and/or
the Company, or by Executive, for Good Reason shall be communicated by
written "Notice of Termination" to the other party hereto. A Notice of
Termination shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
5. DATE OF TERMINATION. The "Date of Termination" shall mean (i) if
Executive's employment is terminated by death, the date of death, (ii) if
Executive's employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that Executive shall not have recommenced the
full-time performance of his duties during such 30-day period), (iii) if
Executive's employment is terminated pursuant to subparagraph 2 or 3 above,
the date specified in the Notice of Termination, which shall be not less than
30 days after the date such Notice of Termination is given, and (iv) if
Executive voluntarily terminates employment pursuant to Paragraph D.6., the
date specified in the Notice of Termination, which shall be not less than 60
days after the Notice of Termination is given.
6. VOLUNTARY OR INVOLUNTARY TERMINATION. If Executive should
voluntarily or involuntarily terminate employment with the Bank and/or the
Company prior to March 12, 2002, Executive shall not (i) solicit or employ
any of the Bank's employees, or employees formerly employed by the Bank or
the Company for a one hundred eighty (180) day period prior to Executive's
voluntary termination, nor (ii) remove, transfer or otherwise take any loan
or other file at the Bank or the Company during the time from the Notice of
Termination to the effective date of the voluntary termination.
E. BENEFITS UPON TERMINATION
3
1. REGULAR COMPENSATION. If Executive's employment shall be terminated
by the Bank and/or the Company for Disability or for Cause, or because of his
death, or by a regulatory authority or by Executive other than for Good
Reason, within twelve (12) months after a Change of Control, or by the
Executive for Good Reason, the Bank and/or the Company shall pay him the full
accrued base salary and accrued incentive bonus through the Date of
Termination, less withholding required by law, at the rate in effect at the
time Notice of Termination is given or death occurs and the Bank and/or the
Company shall have no further obligation to him under this Agreement.
2. SEVERANCE BENEFITS. If Executive's employment shall be terminated
by the Bank and/or the Company other than for Disability, Cause or his death,
or by Executive for Good Reason within twelve (12) months of a Change of
Control, Executive shall be entitled to receive an amount equal to
Executive's base salary paid by the Bank and/or the Company to Executive for
the previous eighteen (18) months. Such amount shall be payable to Executive
in eighteen (18) equal monthly installments commencing the first of the month
following the Date of Termination or in a lump sum, as determined in the sole
discretion of Executive, less withholding as required by law. In addition,
the Bank and/or the Company shall continue payment of all of Executive's
benefits in effect on the date of Executive's termination including health
and other medical benefits for a period of eighteen (18) months from the Date
of Termination. Payment of the foregoing amounts shall discharge the Bank
and the Company from any further obligation and liability to Executive under
this Agreement.
Notwithstanding the foregoing, in the event that any payment or
benefit received or to be received by Executive in connection with the
termination of employment pursuant to the terms of this Agreement would not
be deductible (in whole or in part) by the Bank and/or the Company as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), the amount of the payment shall be reduced until no portion is not
deductible as a result of Section 280G of the Code.
F. GENERAL PROVISIONS
1. RETURN OF DOCUMENTS. Executive expressly agrees that all manuals,
documents, files, reports, studies, instruments or other materials used
and/or developed by Executive related to banking or of a banking nature
during the term of his
4
employment are solely the property of the Bank and/or the Company, and that
Executive has no right, title or interest therein. Upon termination of
Executive's employment, Executive shall promptly deliver possession of all of
said property to the Bank and/or the Company in good condition.
2. NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to be
properly given when personally served or forty-eight hours after deposit in
the United States mail, postage prepaid, in each case addressed to the Bank
and/or the Company as its head office location or to Executive at his last
residence address on the Bank or the Company's records. Either party may
change its address by written notice in accordance with this subparagraph.
3. BINDING EFFECT; SUCCESSORS. Except to the extent otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective executors, administrators, successors and
assigns. The Bank and/or the Company will require any successor to all or
substantially all of its assets (other than by way of merger) to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank and/or the Company would be required to perform it if no
such succession had taken place. Failure of the Bank and/or the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall entitle Executive to the benefits from the Bank and/or the
Company in the same amount and on the same terms as he would be entitled to
hereunder if he terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
4. 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.
5. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not part of this Agreement and
shall not be used in construing it.
5
6. SEVERABILITY. Should any provision of this Agreement for any reason
be declared invalid, void or unenforceable by a court of competent
jurisdiction, the validly 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.
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties relating to termination of employment after a Change of Control
as provided herein. It supersedes any and all other agreements, either oral
or in writing, between the parties hereto with respect to such subject
matter, and does not otherwise modify, alter or change the employment
relationship of Executive with the Bank and/or the Company. 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 concerning
its subject matter shall be valid or binding.
8. MODIFICATION; WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge
is agreed to in writing and signed by Executive and such officer of the Bank
and/or the Company as may be specifically designated or authorized by the
Board of Directors or by the Chief Executive Officer. 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.
9. 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 their obligations hereunder, or in the event of an alleged breach of
this Agreement by either 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.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
BANK OF SANTA XXXXX
By:
----------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
BSM BANCORP
By:
----------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
EXECUTIVE
-------------------------------------------
Xxxxx Xxxxxxxx
7
AGREEMENT
This AGREEMENT is entered into this 12th day of March, 1997, by and
between BANK OF SANTA XXXXX, a California corporation (hereinafter referred
to as the "Bank"), BSM BANCORP, a California corporation (hereinafter
referred to as the "Company") and F. XXXX XXXXXXXX (hereinafter referred to
as the "Executive").
RECITALS
WHEREAS, Executive has been an Executive Officer of the Bank since 1991
and an Executive Officer of the Company since 1996;
WHEREAS, the Bank desires to continue to avail itself of the skill,
knowledge and experience of Executive in order to ensure the successful
operation of the Bank and the Company without distraction should the Bank
and/or the Company be sold, be merged out of existence, or otherwise be
acquired by another financial institution, individuals or others, and
Executive is terminated, or Executive's employment with the Bank and/or the
Company is adversely affected; and
WHEREAS, to induce Executive to remain in the employ of the Bank and the
Company, and to continue as an Executive Officer of the Bank and the Company,
the Bank and the Company are willing to provide benefits to Executive in the
event his or her employment is terminated or adversely affected after such a
change of control;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the parties hereto covenant and agree as follows:
0
A. TERM OF AGREEMENT.
This Agreement shall terminate upon the first to occur of (i) the
termination of Executive's employment with Bank and/or the Company for cause,
disability or voluntarily by Executive, and shall have occurred between the
date of this Agreement and March 12, 2002 (the "Term of this Agreement"), or
(ii) the termination of, or adverse effect on, Executive's employment with
Bank and/or the Company within twelve (12) months following a change of
control of the Company and/or the Bank, when the benefits provided for in
Paragraph E have been conferred and paid, or (iii) March 12, 2002.
B. EFFECT ON EMPLOYMENT
This Agreement is not intended to alter or otherwise change the current
employment relationship between Executive and the Bank and/or the Company
except as described in the following Paragraphs, and Executive further
acknowledges his employment at-will status with the Bank and the Company as
described under the Bank's Personnel Policy.
C. CHANGE OF CONTROL
No benefits shall be payable hereunder unless there shall have been a
Change of Control of the Bank and/or the Company and Executive's employment
with the Bank shall thereafter have been terminated in the manner set forth
in Paragraph D below, or Executive terminates employment for any of the
reasons set forth in paragraph D.3. below following such change of control.
For purposes of this Agreement, a "Change of Control" of the Bank and/or the
Company shall mean: (i) a merger with any Person (as defined below), where
the Bank and/or the Company is not the surviving corporation; (ii) a
consolidation with any Person, where the Bank and/or the Company is not the
surviving corporation; (iii) a transfer to any Person of all or substantially
all of the assets of the Bank and/or the Company; or (iv) an acquisition by
any Person of beneficial ownership of an aggregate of more than 25% of the
issued and outstanding shares of common stock of the Bank and/or the Company,
whether or not such Person or Persons are current shareholders of the Bank
and/or the Company at the time of such acquisition, coupled with or followed
by the election as directors of the Bank and/or the Company of persons who
were not directors at the time of such acquisition if such
1
persons shall become a majority of the Board of Directors of the Bank and/or
the Company. As used in this Agreement, the term "Person" shall include any
financial institution, corporation, individual, partnership or association,
and any group formed for the purpose of acquiring, holding or disposing of
the common stock of the Bank and/or the Company, and the term "beneficial
ownership" shall have the same meaning as under Rule 13d-3 of the Securities
and Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended.
D. TERMINATION FOLLOWING CHANGE OF CONTROL
If (i) a Change of Control shall have occurred, and if Executive's
employment with the Bank and/or the Company is terminated within twelve (12)
months after such Change of Control, or Executive terminates employment with
the Bank and/or the Company pursuant to Xxxxxxxxx X.0. below, and unless such
termination is (a) because of his death, (b) for Cause or Disability (both as
defined below) or (c) by Executive other than for Good Reason (as defined
below), he shall be entitled to the benefits provided in Paragraph E.2.
below.
1. DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, he shall have been absent from or unable to
perform his duties with the Bank and/or the Company for a period of three
consecutive months, and if within 30 days after written notice of termination
is given (which notice may not be given prior to the expiration of the
three-month period) he shall not have recommenced the full-time performance
of his duties, the Bank and/or the Company may terminate his employment for
"Disability."
2. CAUSE. Termination of Executive's employment for "Cause" shall mean
termination by the Bank and/or the Company for cause as defined in its
Personnel Policy or by a regulatory authority for any reason within its
purview.
3. GOOD REASON. Termination by Executive of his employment for "Good
Reason" shall mean termination by him after any of the following events
occurs without his express written consent:
(i) a reduction in Executive's annual salary or benefits;
2
(ii) an adverse change in Executive's duties whereby he is
performing duties of a higher level employee than the duties being performed
by Executive at the time of the Change of Control;
(iii) Executive is required to work more than fifty (50) miles from
the Bank's Santa Xxxxx Way office;
(iv) Executive is transferred to a department or division and is
required to perform duties that Executive is not familiar or knowledgeable.
4. NOTICE OF TERMINATION. Any purported termination by the Bank and/or
the Company, or by Executive, for Good Reason shall be communicated by
written "Notice of Termination" to the other party hereto. A Notice of
Termination shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
5. DATE OF TERMINATION. The "Date of Termination" shall mean (i) if
Executive's employment is terminated by death, the date of death, (ii) if
Executive's employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that Executive shall not have recommenced the
full-time performance of his duties during such 30-day period), (iii) if
Executive's employment is terminated pursuant to subparagraph 2 or 3 above,
the date specified in the Notice of Termination, which shall be not less than
30 days after the date such Notice of Termination is given, and (iv) if
Executive voluntarily terminates employment pursuant to Paragraph D.6., the
date specified in the Notice of Termination, which shall be not less than 60
days after the Notice of Termination is given.
6. VOLUNTARY OR INVOLUNTARY TERMINATION. If Executive should
voluntarily or involuntarily terminate employment with the Bank and/or the
Company prior to March 12, 2002, Executive shall not (i) solicit or employ
any of the Bank's employees, or employees formerly employed by the Bank or
the Company for a one hundred eighty (180) day period prior to Executive's
voluntary termination, nor (ii) remove, transfer or otherwise take any loan
or other file at the Bank or the Company during the time from the Notice of
Termination to the effective date of the voluntary termination.
E. BENEFITS UPON TERMINATION
3
1. REGULAR COMPENSATION. If Executive's employment shall be terminated
by the Bank and/or the Company for Disability or for Cause, or because of his
death, or by a regulatory authority or by Executive other than for Good
Reason, within twelve (12) months after a Change of Control, or by the
Executive for Good Reason, the Bank and/or the Company shall pay him the full
accrued base salary and accrued incentive bonus through the Date of
Termination, less withholding required by law, at the rate in effect at the
time Notice of Termination is given or death occurs and the Bank and/or the
Company shall have no further obligation to him under this Agreement.
2. SEVERANCE BENEFITS. If Executive's employment shall be terminated
by the Bank and/or the Company other than for Disability, Cause or his death,
or by Executive for Good Reason within twelve (12) months of a Change of
Control, Executive shall be entitled to receive an amount equal to
Executive's base salary paid by the Bank and/or the Company to Executive for
the previous eighteen (18) months. Such amount shall be payable to Executive
in eighteen (18) equal monthly installments commencing the first of the month
following the Date of Termination or in a lump sum, as determined in the sole
discretion of Executive, less withholding as required by law. In addition,
the Bank and/or the Company shall continue payment of all of Executive's
benefits in effect on the date of Executive's termination including health
and other medical benefits for a period of eighteen (18) months from the Date
of Termination. Payment of the foregoing amounts shall discharge the Bank
and the Company from any further obligation and liability to Executive under
this Agreement.
Notwithstanding the foregoing, in the event that any payment or
benefit received or to be received by Executive in connection with the
termination of employment pursuant to the terms of this Agreement would not
be deductible (in whole or in part) by the Bank and/or the Company as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), the amount of the payment shall be reduced until no portion is not
deductible as a result of Section 280G of the Code.
F. GENERAL PROVISIONS
1. RETURN OF DOCUMENTS. Executive expressly agrees that all manuals,
documents, files, reports, studies, instruments or other materials used
and/or developed by Executive related to banking or of a banking nature
during the term of his
4
employment are solely the property of the Bank and/or the Company, and that
Executive has no right, title or interest therein. Upon termination of
Executive's employment, Executive shall promptly deliver possession of all of
said property to the Bank and/or the Company in good condition.
2. NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to be
properly given when personally served or forty-eight hours after deposit in
the United States mail, postage prepaid, in each case addressed to the Bank
and/or the Company as its head office location or to Executive at his last
residence address on the Bank or the Company's records. Either party may
change its address by written notice in accordance with this subparagraph.
3. BINDING EFFECT; SUCCESSORS. Except to the extent otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective executors, administrators, successors and
assigns. The Bank and/or the Company will require any successor to all or
substantially all of its assets (other than by way of merger) to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank and/or the Company would be required to perform it if no
such succession had taken place. Failure of the Bank and/or the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall entitle Executive to the benefits from the Bank and/or the
Company in the same amount and on the same terms as he would be entitled to
hereunder if he terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
4. 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.
5. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not part of this Agreement and
shall not be used in construing it.
5
6. SEVERABILITY. Should any provision of this Agreement for any reason
be declared invalid, void or unenforceable by a court of competent
jurisdiction, the validly 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.
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties relating to termination of employment after a Change of Control
as provided herein. It supersedes any and all other agreements, either oral
or in writing, between the parties hereto with respect to such subject
matter, and does not otherwise modify, alter or change the employment
relationship of Executive with the Bank and/or the Company. 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 concerning
its subject matter shall be valid or binding.
8. MODIFICATION; WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge
is agreed to in writing and signed by Executive and such officer of the Bank
and/or the Company as may be specifically designated or authorized by the
Board of Directors or by the Chief Executive Officer. 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.
9. 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 their obligations hereunder, or in the event of an alleged breach of
this Agreement by either 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.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
BANK OF SANTA XXXXX
By:
------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
BSM BANCORP
By:
------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
EXECUTIVE
---------------------------------------
F. Xxxx Xxxxxxxx
7
AGREEMENT
This AGREEMENT is entered into this 12th day of March, 1997, by and
between BANK OF SANTA XXXXX, a California corporation (hereinafter referred
to as the "Bank"), BSM BANCORP, a California corporation (hereinafter
referred to as the "Company") and XXXXX X. XXXXXX (hereinafter referred to as
the "Executive").
RECITALS
WHEREAS, Executive has been an Executive Officer of the Bank since 1992
and an Executive Officer of the Company since 1996;
WHEREAS, the Bank desires to continue to avail itself of the skill,
knowledge and experience of Executive in order to ensure the successful
operation of the Bank and the Company without distraction should the Bank
and/or the Company be sold, be merged out of existence, or otherwise be
acquired by another financial institution, individuals or others, and
Executive is terminated, or Executive's employment with the Bank and/or the
Company is adversely affected; and
WHEREAS, to induce Executive to remain in the employ of the Bank and the
Company, and to continue as an Executive Officer of the Bank and the Company,
the Bank and the Company are willing to provide benefits to Executive in the
event his or her employment is terminated or adversely affected after such a
change of control;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the parties hereto covenant and agree as follows:
0
A. TERM OF AGREEMENT.
This Agreement shall terminate upon the first to occur of (i) the
termination of Executive's employment with Bank and/or the Company for cause,
disability or voluntarily by Executive, and shall have occurred between the
date of this Agreement and March 12, 2002 (the "Term of this Agreement"), or
(ii) the termination of, or adverse effect on, Executive's employment with
Bank and/or the Company within twelve (12) months following a change of
control of the Company and/or the Bank, when the benefits provided for in
Paragraph E have been conferred and paid, or (iii) March 12, 2002.
B. EFFECT ON EMPLOYMENT
This Agreement is not intended to alter or otherwise change the current
employment relationship between Executive and the Bank and/or the Company
except as described in the following Paragraphs, and Executive further
acknowledges his employment at-will status with the Bank and the Company as
described under the Bank's Personnel Policy.
C. CHANGE OF CONTROL
No benefits shall be payable hereunder unless there shall have been a
Change of Control of the Bank and/or the Company and Executive's employment
with the Bank shall thereafter have been terminated in the manner set forth
in Paragraph D below, or Executive terminates employment for any of the
reasons set forth in paragraph D.3. below following such change of control.
For purposes of this Agreement, a "Change of Control" of the Bank and/or the
Company shall mean: (i) a merger with any Person (as defined below), where
the Bank and/or the Company is not the surviving corporation; (ii) a
consolidation with any Person, where the Bank and/or the Company is not the
surviving corporation; (iii) a transfer to any Person of all or substantially
all of the assets of the Bank and/or the Company; or (iv) an acquisition by
any Person of beneficial ownership of an aggregate of more than 25% of the
issued and outstanding shares of common stock of the Bank and/or the Company,
whether or not such Person or Persons are current shareholders of the Bank
and/or the Company at the time of such acquisition, coupled with or followed
by the election as directors of the Bank and/or the Company of persons who
were not directors at the time of such acquisition if such
1
persons shall become a majority of the Board of Directors of the Bank and/or
the Company. As used in this Agreement, the term "Person" shall include any
financial institution, corporation, individual, partnership or association,
and any group formed for the purpose of acquiring, holding or disposing of
the common stock of the Bank and/or the Company, and the term "beneficial
ownership" shall have the same meaning as under Rule 13d-3 of the Securities
and Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended.
D. TERMINATION FOLLOWING CHANGE OF CONTROL
If (i) a Change of Control shall have occurred, and if Executive's
employment with the Bank and/or the Company is terminated within twelve (12)
months after such Change of Control, or Executive terminates employment with
the Bank and/or the Company pursuant to Xxxxxxxxx X.0. below, and unless such
termination is (a) because of his death, (b) for Cause or Disability (both as
defined below) or (c) by Executive other than for Good Reason (as defined
below), he shall be entitled to the benefits provided in Paragraph E.2.
below.
1. DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, he shall have been absent from or unable to
perform his duties with the Bank and/or the Company for a period of three
consecutive months, and if within 30 days after written notice of termination
is given (which notice may not be given prior to the expiration of the
three-month period) he shall not have recommenced the full-time performance
of his duties, the Bank and/or the Company may terminate his employment for
"Disability."
2. CAUSE. Termination of Executive's employment for "Cause" shall mean
termination by the Bank and/or the Company for cause as defined in its
Personnel Policy or by a regulatory authority for any reason within its
purview.
3. GOOD REASON. Termination by Executive of his employment for "Good
Reason" shall mean termination by him after any of the following events
occurs without his express written consent:
(i) a reduction in Executive's annual salary or benefits;
2
(ii) an adverse change in Executive's duties whereby he is
performing duties of a higher level employee than the duties being performed
by Executive at the time of the Change of Control;
(iii) Executive is required to work more than fifty (50) miles from
the Bank's Santa Xxxxx Way office;
(iv) Executive is transferred to a department or division and is
required to perform duties that Executive is not familiar or knowledgeable.
4. NOTICE OF TERMINATION. Any purported termination by the Bank and/or
the Company, or by Executive, for Good Reason shall be communicated by
written "Notice of Termination" to the other party hereto. A Notice of
Termination shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
5. DATE OF TERMINATION. The "Date of Termination" shall mean (i) if
Executive's employment is terminated by death, the date of death, (ii) if
Executive's employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that Executive shall not have recommenced the
full-time performance of his duties during such 30-day period), (iii) if
Executive's employment is terminated pursuant to subparagraph 2 or 3 above,
the date specified in the Notice of Termination, which shall be not less than
30 days after the date such Notice of Termination is given, and (iv) if
Executive voluntarily terminates employment pursuant to Paragraph D.6., the
date specified in the Notice of Termination, which shall be not less than 60
days after the Notice of Termination is given.
6. VOLUNTARY OR INVOLUNTARY TERMINATION. If Executive should
voluntarily or involuntarily terminate employment with the Bank and/or the
Company prior to March 12, 2002, Executive shall not (i) solicit or employ
any of the Bank's employees, or employees formerly employed by the Bank or
the Company for a one hundred eighty (180) day period prior to Executive's
voluntary termination, nor (ii) remove, transfer or otherwise take any loan
or other file at the Bank or the Company during the time from the Notice of
Termination to the effective date of the voluntary termination.
E. BENEFITS UPON TERMINATION
3
1. REGULAR COMPENSATION. If Executive's employment shall be terminated
by the Bank and/or the Company for Disability or for Cause, or because of his
death, or by a regulatory authority or by Executive other than for Good
Reason, within twelve (12) months after a Change of Control, or by the
Executive for Good Reason, the Bank and/or the Company shall pay him the full
accrued base salary and accrued incentive bonus through the Date of
Termination, less withholding required by law, at the rate in effect at the
time Notice of Termination is given or death occurs and the Bank and/or the
Company shall have no further obligation to him under this Agreement.
2. SEVERANCE BENEFITS. If Executive's employment shall be terminated
by the Bank and/or the Company other than for Disability, Cause or his death,
or by Executive for Good Reason within twelve (12) months of a Change of
Control, Executive shall be entitled to receive an amount equal to
Executive's base salary paid by the Bank and/or the Company to Executive for
the previous eighteen (18) months. Such amount shall be payable to Executive
in eighteen (18) equal monthly installments commencing the first of the month
following the Date of Termination or in a lump sum, as determined in the sole
discretion of Executive, less withholding as required by law. In addition,
the Bank and/or the Company shall continue payment of all of Executive's
benefits in effect on the date of Executive's termination including health
and other medical benefits for a period of eighteen (18) months from the Date
of Termination. Payment of the foregoing amounts shall discharge the Bank
and the Company from any further obligation and liability to Executive under
this Agreement.
Notwithstanding the foregoing, in the event that any payment or
benefit received or to be received by Executive in connection with the
termination of employment pursuant to the terms of this Agreement would not
be deductible (in whole or in part) by the Bank and/or the Company as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), the amount of the payment shall be reduced until no portion is not
deductible as a result of Section 280G of the Code.
F. GENERAL PROVISIONS
1. RETURN OF DOCUMENTS. Executive expressly agrees that all manuals,
documents, files, reports, studies, instruments or other materials used
and/or developed by Executive related to banking or of a banking nature
during the term of his
4
employment are solely the property of the Bank and/or the Company, and that
Executive has no right, title or interest therein. Upon termination of
Executive's employment, Executive shall promptly deliver possession of all of
said property to the Bank and/or the Company in good condition.
2. NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to be
properly given when personally served or forty-eight hours after deposit in
the United States mail, postage prepaid, in each case addressed to the Bank
and/or the Company as its head office location or to Executive at his last
residence address on the Bank or the Company's records. Either party may
change its address by written notice in accordance with this subparagraph.
3. BINDING EFFECT; SUCCESSORS. Except to the extent otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective executors, administrators, successors and
assigns. The Bank and/or the Company will require any successor to all or
substantially all of its assets (other than by way of merger) to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank and/or the Company would be required to perform it if no
such succession had taken place. Failure of the Bank and/or the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall entitle Executive to the benefits from the Bank and/or the
Company in the same amount and on the same terms as he would be entitled to
hereunder if he terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
4. 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.
5. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not part of this Agreement and
shall not be used in construing it.
5
6. SEVERABILITY. Should any provision of this Agreement for any reason
be declared invalid, void or unenforceable by a court of competent
jurisdiction, the validly 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.
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties relating to termination of employment after a Change of Control
as provided herein. It supersedes any and all other agreements, either oral
or in writing, between the parties hereto with respect to such subject
matter, and does not otherwise modify, alter or change the employment
relationship of Executive with the Bank and/or the Company. 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 concerning
its subject matter shall be valid or binding.
8. MODIFICATION; WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge
is agreed to in writing and signed by Executive and such officer of the Bank
and/or the Company as may be specifically designated or authorized by the
Board of Directors or by the Chief Executive Officer. 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.
9. 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 their obligations hereunder, or in the event of an alleged breach of
this Agreement by either 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.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
BANK OF SANTA XXXXX
By:
----------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
BSM BANCORP
By:
----------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
EXECUTIVE
-------------------------------------------
Xxxxx X. Xxxxxx
7
AGREEMENT
This AGREEMENT is entered into this 12th day of March, 1997, by and
between BANK OF SANTA XXXXX, a California corporation (hereinafter referred
to as the "Bank"), BSM BANCORP, a California corporation (hereinafter
referred to as the "Company") and XXXXXXX X. XXXXX (hereinafter referred to
as the "Executive").
RECITALS
WHEREAS, Executive has been an Executive Officer of the Bank since 1978
and an Executive Officer of the Company since 1996;
WHEREAS, the Bank desires to continue to avail itself of the skill,
knowledge and experience of Executive in order to ensure the successful
operation of the Bank and the Company without distraction should the Bank
and/or the Company be sold, be merged out of existence, or otherwise be
acquired by another financial institution, individuals or others, and
Executive is terminated, or Executive's employment with the Bank and/or the
Company is adversely affected; and
WHEREAS, to induce Executive to remain in the employ of the Bank and the
Company, and to continue as an Executive Officer of the Bank and the Company,
the Bank and the Company are willing to provide benefits to Executive in the
event his or her employment is terminated or adversely affected after such a
change of control;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the parties hereto covenant and agree as follows:
0
A. TERM OF AGREEMENT.
This Agreement shall terminate upon the first to occur of (i) the
termination of Executive's employment with Bank and/or the Company for cause,
disability or voluntarily by Executive, and shall have occurred between the
date of this Agreement and March 12, 2002 (the "Term of this Agreement"), or
(ii) the termination of, or adverse effect on, Executive's employment with
Bank and/or the Company within twelve (12) months following a change of
control of the Company and/or the Bank, when the benefits provided for in
Paragraph E have been conferred and paid, or (iii) March 12, 2002.
B. EFFECT ON EMPLOYMENT
This Agreement is not intended to alter or otherwise change the current
employment relationship between Executive and the Bank and/or the Company
except as described in the following Paragraphs, and Executive further
acknowledges his employment at-will status with the Bank and the Company as
described under the Bank's Personnel Policy.
C. CHANGE OF CONTROL
No benefits shall be payable hereunder unless there shall have been a
Change of Control of the Bank and/or the Company and Executive's employment
with the Bank shall thereafter have been terminated in the manner set forth
in Paragraph D below, or Executive terminates employment for any of the
reasons set forth in paragraph D.3. below following such change of control.
For purposes of this Agreement, a "Change of Control" of the Bank and/or the
Company shall mean: (i) a merger with any Person (as defined below), where
the Bank and/or the Company is not the surviving corporation; (ii) a
consolidation with any Person, where the Bank and/or the Company is not the
surviving corporation; (iii) a transfer to any Person of all or substantially
all of the assets of the Bank and/or the Company; or (iv) an acquisition by
any Person of beneficial ownership of an aggregate of more than 25% of the
issued and outstanding shares of common stock of the Bank and/or the Company,
whether or not such Person or Persons are current shareholders of the Bank
and/or the Company at the time of such acquisition, coupled with or followed
by the election as directors of the Bank and/or the Company of persons who
were not directors at the time of such acquisition if such
1
persons shall become a majority of the Board of Directors of the Bank and/or
the Company. As used in this Agreement, the term "Person" shall include any
financial institution, corporation, individual, partnership or association,
and any group formed for the purpose of acquiring, holding or disposing of
the common stock of the Bank and/or the Company, and the term "beneficial
ownership" shall have the same meaning as under Rule 13d-3 of the Securities
and Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended.
D. TERMINATION FOLLOWING CHANGE OF CONTROL
If (i) a Change of Control shall have occurred, and if Executive's
employment with the Bank and/or the Company is terminated within twenty-four
(24) months after such Change of Control, or Executive terminates employment
with the Bank and/or the Company pursuant to Xxxxxxxxx X.0. below, and unless
such termination is (a) because of his death, (b) for Cause or Disability
(both as defined below) or (c) by Executive other than for Good Reason (as
defined below), he shall be entitled to the benefits provided in Paragraph
E.2. below.
1. DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, he shall have been absent from or unable to
perform his duties with the Bank and/or the Company for a period of three
consecutive months, and if within 30 days after written notice of termination
is given (which notice may not be given prior to the expiration of the
three-month period) he shall not have recommenced the full-time performance
of his duties, the Bank and/or the Company may terminate his employment for
"Disability."
2. CAUSE. Termination of Executive's employment for "Cause" shall mean
termination by the Bank and/or the Company for cause as defined in its
Personnel Policy or by a regulatory authority for any reason within its
purview.
3. GOOD REASON. Termination by Executive of his employment for "Good
Reason" shall mean termination by him after any of the following events
occurs without his express written consent:
(i) a reduction in Executive's annual salary or benefits;
2
(ii) an adverse change in Executive's duties whereby he is
performing duties of a higher level employee than the duties being performed
by Executive at the time of the Change of Control;
(iii) Executive is required to work more than fifty (50) miles from
the Bank's Santa Xxxxx Way office;
(iv) Executive is transferred to a department or division and is
required to perform duties that Executive is not familiar or knowledgeable.
4. NOTICE OF TERMINATION. Any purported termination by the Bank and/or
the Company, or by Executive, for Good Reason shall be communicated by
written "Notice of Termination" to the other party hereto. A Notice of
Termination shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
5. DATE OF TERMINATION. The "Date of Termination" shall mean (i) if
Executive's employment is terminated by death, the date of death, (ii) if
Executive's employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that Executive shall not have recommenced the
full-time performance of his duties during such 30-day period), (iii) if
Executive's employment is terminated pursuant to subparagraph 2 or 3 above,
the date specified in the Notice of Termination, which shall be not less than
30 days after the date such Notice of Termination is given, and (iv) if
Executive voluntarily terminates employment pursuant to Paragraph D.6., the
date specified in the Notice of Termination, which shall be not less than 60
days after the Notice of Termination is given.
6. VOLUNTARY OR INVOLUNTARY TERMINATION. If Executive should
voluntarily or involuntarily terminate employment with the Bank and/or the
Company prior to March 12, 2002, Executive shall not (i) solicit or employ
any of the Bank's employees, or employees formerly employed by the Bank or
the Company for a one hundred eighty (180) day period prior to Executive's
voluntary termination, nor (ii) remove, transfer or otherwise take any loan
or other file at the Bank or the Company during the time from the Notice of
Termination to the effective date of the voluntary termination.
E. BENEFITS UPON TERMINATION
3
1. REGULAR COMPENSATION. If Executive's employment shall be terminated
by the Bank and/or the Company for Disability or for Cause, or because of his
death, or by a regulatory authority or by Executive other than for Good
Reason, within twenty-four (24) months after a Change of Control, or by the
Executive for Good Reason, the Bank and/or the Company shall pay him the full
accrued base salary and accrued incentive bonus through the Date of
Termination, less withholding required by law, at the rate in effect at the
time Notice of Termination is given or death occurs and the Bank and/or the
Company shall have no further obligation to him under this Agreement.
2. SEVERANCE BENEFITS. If Executive's employment shall be terminated
by the Bank and/or the Company other than for Disability, Cause or his death,
or by Executive for Good Reason within twenty-four (24) months of a Change of
Control, Executive shall be entitled to receive an amount equal to
Executive's base salary paid by the Bank and/or the Company to Executive for
the previous twenty-four (24) months. Such amount shall be payable to
Executive in twenty-four (24) equal monthly installments commencing the first
of the month following the Date of Termination or in a lump sum, as
determined in the sole discretion of Executive, less withholding as required
by law. In addition, the Bank and/or the Company shall continue payment of
all of Executive's benefits in effect on the date of Executive's termination
including health and other medical benefits for a period of twenty-four (24)
months from the Date of Termination. Payment of the foregoing amounts shall
discharge the Bank and the Company from any further obligation and liability
to Executive under this Agreement.
Notwithstanding the foregoing, in the event that any payment or
benefit received or to be received by Executive in connection with the
termination of employment pursuant to the terms of this Agreement would not
be deductible (in whole or in part) by the Bank and/or the Company as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), the amount of the payment shall be reduced until no portion is not
deductible as a result of Section 280G of the Code.
F. GENERAL PROVISIONS
1. RETURN OF DOCUMENTS. Executive expressly agrees that all manuals,
documents, files, reports, studies, instruments or other materials used
and/or developed by Executive related to banking or of a banking nature
during the term of his employment are solely the property of the Bank and/or
the Company, and that
4
Executive has no right, title or interest therein. Upon termination of
Executive's employment, Executive shall promptly deliver possession of all of
said property to the Bank and/or the Company in good condition.
2. NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to be
properly given when personally served or forty-eight hours after deposit in
the United States mail, postage prepaid, in each case addressed to the Bank
and/or the Company as its head office location or to Executive at his last
residence address on the Bank or the Company's records. Either party may
change its address by written notice in accordance with this subparagraph.
3. BINDING EFFECT; SUCCESSORS. Except to the extent otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective executors, administrators, successors and
assigns. The Bank and/or the Company will require any successor to all or
substantially all of its assets (other than by way of merger) to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank and/or the Company would be required to perform it if no
such succession had taken place. Failure of the Bank and/or the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall entitle Executive to the benefits from the Bank and/or the
Company in the same amount and on the same terms as he would be entitled to
hereunder if he terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
4. 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.
5. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not part of this Agreement and
shall not be used in construing it.
6. SEVERABILITY. Should any provision of this Agreement for any reason
be declared invalid, void or unenforceable by a court of competent
jurisdiction, the validly
5
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.
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties relating to termination of employment after a Change of Control
as provided herein. It supersedes any and all other agreements, either oral
or in writing, between the parties hereto with respect to such subject
matter, and does not otherwise modify, alter or change the employment
relationship of Executive with the Bank and/or the Company. 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 concerning
its subject matter shall be valid or binding.
8. MODIFICATION; WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge
is agreed to in writing and signed by Executive and such officer of the Bank
and/or the Company as may be specifically designated or authorized by the
Board of Directors or by the Chief Executive Officer. 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.
9. 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 their obligations hereunder, or in the event of an alleged breach of
this Agreement by either 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.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
BANK OF SANTA XXXXX
By:
----------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
BSM BANCORP
By:
----------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
EXECUTIVE
-------------------------------------------
Xxxxxxx X. Xxxxx
7
AGREEMENT
This AGREEMENT is entered into this 12th day of March, 1997, by and
between BANK OF SANTA XXXXX, a California corporation (hereinafter referred
to as the "Bank"), BSM BANCORP, a California corporation (hereinafter
referred to as the "Company") and XXXXX XXXXXXXXX (hereinafter referred to as
the "Executive").
RECITALS
WHEREAS, Executive has been an Executive Officer of the Bank since 1996
and an Executive Officer of the Company since 1996;
WHEREAS, the Bank desires to continue to avail itself of the skill,
knowledge and experience of Executive in order to ensure the successful
operation of the Bank and the Company without distraction should the Bank
and/or the Company be sold, be merged out of existence, or otherwise be
acquired by another financial institution, individuals or others, and
Executive is terminated, or Executive's employment with the Bank and/or the
Company is adversely affected; and
WHEREAS, to induce Executive to remain in the employ of the Bank and the
Company, and to continue as an Executive Officer of the Bank and the Company,
the Bank and the Company are willing to provide benefits to Executive in the
event his or her employment is terminated or adversely affected after such a
change of control;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the parties hereto covenant and agree as follows:
0
A. TERM OF AGREEMENT.
This Agreement shall terminate upon the first to occur of (i) the
termination of Executive's employment with Bank and/or the Company for cause,
disability or voluntarily by Executive, and shall have occurred between the
date of this Agreement and March 12, 2002 (the "Term of this Agreement"), or
(ii) the termination of, or adverse effect on, Executive's employment with
Bank and/or the Company within twelve (12) months following a change of
control of the Company and/or the Bank, when the benefits provided for in
Paragraph E have been conferred and paid, or (iii) March 12, 2002.
B. EFFECT ON EMPLOYMENT
This Agreement is not intended to alter or otherwise change the current
employment relationship between Executive and the Bank and/or the Company
except as described in the following Paragraphs, and Executive further
acknowledges his employment at-will status with the Bank and the Company as
described under the Bank's Personnel Policy.
C. CHANGE OF CONTROL
No benefits shall be payable hereunder unless there shall have been a
Change of Control of the Bank and/or the Company and Executive's employment
with the Bank shall thereafter have been terminated in the manner set forth
in Paragraph D below, or Executive terminates employment for any of the
reasons set forth in paragraph D.3. below following such change of control.
For purposes of this Agreement, a "Change of Control" of the Bank and/or the
Company shall mean: (i) a merger with any Person (as defined below), where
the Bank and/or the Company is not the surviving corporation; (ii) a
consolidation with any Person, where the Bank and/or the Company is not the
surviving corporation; (iii) a transfer to any Person of all or substantially
all of the assets of the Bank and/or the Company; or (iv) an acquisition by
any Person of beneficial ownership of an aggregate of more than 25% of the
issued and outstanding shares of common stock of the Bank and/or the Company,
whether or not such Person or Persons are current shareholders of the Bank
and/or the Company at the time of such acquisition, coupled with or followed
by the election as directors of the Bank and/or the Company of persons who
were not directors at the time of such acquisition if such
1
persons shall become a majority of the Board of Directors of the Bank and/or
the Company. As used in this Agreement, the term "Person" shall include any
financial institution, corporation, individual, partnership or association,
and any group formed for the purpose of acquiring, holding or disposing of
the common stock of the Bank and/or the Company, and the term "beneficial
ownership" shall have the same meaning as under Rule 13d-3 of the Securities
and Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended.
D. TERMINATION FOLLOWING CHANGE OF CONTROL
If (i) a Change of Control shall have occurred, and if Executive's
employment with the Bank and/or the Company is terminated within twelve (12)
months after such Change of Control, or Executive terminates employment with
the Bank and/or the Company pursuant to Xxxxxxxxx X.0. below, and unless such
termination is (a) because of his death, (b) for Cause or Disability (both as
defined below) or (c) by Executive other than for Good Reason (as defined
below), he shall be entitled to the benefits provided in Paragraph E.2.
below.
1. DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, he shall have been absent from or unable to
perform his duties with the Bank and/or the Company for a period of three
consecutive months, and if within 30 days after written notice of termination
is given (which notice may not be given prior to the expiration of the
three-month period) he shall not have recommenced the full-time performance
of his duties, the Bank and/or the Company may terminate his employment for
"Disability."
2. CAUSE. Termination of Executive's employment for "Cause" shall mean
termination by the Bank and/or the Company for cause as defined in its
Personnel Policy or by a regulatory authority for any reason within its
purview.
3. GOOD REASON. Termination by Executive of his employment for "Good
Reason" shall mean termination by him after any of the following events
occurs without his express written consent:
(i) a reduction in Executive's annual salary or benefits;
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(ii) an adverse change in Executive's duties whereby he is
performing duties of a higher level employee than the duties being performed
by Executive at the time of the Change of Control;
(iii) Executive is required to work more than fifty (50) miles from
the Bank's Santa Xxxxx Way office;
(iv) Executive is transferred to a department or division and is
required to perform duties that Executive is not familiar or knowledgeable.
4. NOTICE OF TERMINATION. Any purported termination by the Bank and/or
the Company, or by Executive, for Good Reason shall be communicated by
written "Notice of Termination" to the other party hereto. A Notice of
Termination shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
5. DATE OF TERMINATION. The "Date of Termination" shall mean (i) if
Executive's employment is terminated by death, the date of death, (ii) if
Executive's employment is terminated for Disability, 30 days after Notice of
Termination is given (provided that Executive shall not have recommenced the
full-time performance of his duties during such 30-day period), (iii) if
Executive's employment is terminated pursuant to subparagraph 2 or 3 above,
the date specified in the Notice of Termination, which shall be not less than
30 days after the date such Notice of Termination is given, and (iv) if
Executive voluntarily terminates employment pursuant to Paragraph D.6., the
date specified in the Notice of Termination, which shall be not less than 60
days after the Notice of Termination is given.
6. VOLUNTARY OR INVOLUNTARY TERMINATION. If Executive should
voluntarily or involuntarily terminate employment with the Bank and/or the
Company prior to March 12, 2002, Executive shall not (i) solicit or employ
any of the Bank's employees, or employees formerly employed by the Bank or
the Company for a one hundred eighty (180) day period prior to Executive's
voluntary termination, nor (ii) remove, transfer or otherwise take any loan
or other file at the Bank or the Company during the time from the Notice of
Termination to the effective date of the voluntary termination.
E. BENEFITS UPON TERMINATION
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1. REGULAR COMPENSATION. If Executive's employment shall be terminated
by the Bank and/or the Company for Disability or for Cause, or because of his
death, or by a regulatory authority or by Executive other than for Good
Reason, within twelve (12) months after a Change of Control, or by the
Executive for Good Reason, the Bank and/or the Company shall pay him the full
accrued base salary and accrued incentive bonus through the Date of
Termination, less withholding required by law, at the rate in effect at the
time Notice of Termination is given or death occurs and the Bank and/or the
Company shall have no further obligation to him under this Agreement.
2. SEVERANCE BENEFITS. If Executive's employment shall be terminated
by the Bank and/or the Company other than for Disability, Cause or his death,
or by Executive for Good Reason within twelve (12) months of a Change of
Control, Executive shall be entitled to receive an amount equal to
Executive's base salary paid by the Bank and/or the Company to Executive for
the previous eighteen (18) months. Such amount shall be payable to Executive
in eighteen (18) equal monthly installments commencing the first of the month
following the Date of Termination or in a lump sum, as determined in the sole
discretion of Executive, less withholding as required by law. In addition,
the Bank and/or the Company shall continue payment of all of Executive's
benefits in effect on the date of Executive's termination including health
and other medical benefits for a period of eighteen (18) months from the Date
of Termination. Payment of the foregoing amounts shall discharge the Bank
and the Company from any further obligation and liability to Executive under
this Agreement.
Notwithstanding the foregoing, in the event that any payment or
benefit received or to be received by Executive in connection with the
termination of employment pursuant to the terms of this Agreement would not
be deductible (in whole or in part) by the Bank and/or the Company as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), the amount of the payment shall be reduced until no portion is not
deductible as a result of Section 280G of the Code.
F. GENERAL PROVISIONS
1. RETURN OF DOCUMENTS. Executive expressly agrees that all manuals,
documents, files, reports, studies, instruments or other materials used
and/or developed by Executive related to banking or of a banking nature
during the term of his
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employment are solely the property of the Bank and/or the Company, and that
Executive has no right, title or interest therein. Upon termination of
Executive's employment, Executive shall promptly deliver possession of all of
said property to the Bank and/or the Company in good condition.
2. NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to be
properly given when personally served or forty-eight hours after deposit in
the United States mail, postage prepaid, in each case addressed to the Bank
and/or the Company as its head office location or to Executive at his last
residence address on the Bank or the Company's records. Either party may
change its address by written notice in accordance with this subparagraph.
3. BINDING EFFECT; SUCCESSORS. Except to the extent otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective executors, administrators, successors and
assigns. The Bank and/or the Company will require any successor to all or
substantially all of its assets (other than by way of merger) to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank and/or the Company would be required to perform it if no
such succession had taken place. Failure of the Bank and/or the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall entitle Executive to the benefits from the Bank and/or the
Company in the same amount and on the same terms as he would be entitled to
hereunder if he terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
4. 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.
5. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not part of this Agreement and
shall not be used in construing it.
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6. SEVERABILITY. Should any provision of this Agreement for any reason
be declared invalid, void or unenforceable by a court of competent
jurisdiction, the validly 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.
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties relating to termination of employment after a Change of Control
as provided herein. It supersedes any and all other agreements, either oral
or in writing, between the parties hereto with respect to such subject
matter, and does not otherwise modify, alter or change the employment
relationship of Executive with the Bank and/or the Company. 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 concerning
its subject matter shall be valid or binding.
8. MODIFICATION; WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge
is agreed to in writing and signed by Executive and such officer of the Bank
and/or the Company as may be specifically designated or authorized by the
Board of Directors or by the Chief Executive Officer. 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.
9. 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 their obligations hereunder, or in the event of an alleged breach of
this Agreement by either 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
BANK OF SANTA XXXXX
By:
------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
BSM BANCORP
By:
------------------------------------
X.X. Xxxxx, Chairman of the Board
By:
------------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
EXECUTIVE
---------------------------------------
Xxxxx Xxxxxxxxx
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