EXHIBIT 10.24
EXECUTIVE SALARY CONTINUATION AGREEMENT
This Agreement is made and entered into effective as of the twenty-sixth
(26) day of April, 1995, by and between Mid-Peninsula Bank, a bank chartered
under the laws of the State of California (the "Employer"), and Xxxxxxxx X.
Xxxxxxx, an individual residing in the State of California (hereinafter referred
to as the "Executive").
RECITALS
WHEREAS, the Executive is an employee of the Employer and is serving
as its Senior Vice President;
WHEREAS, the Executive's experience and knowledge of the affairs of
the Employer and the banking industry are extensive and valuable;
WHEREAS, it is deemed to be in the best interests of the Employer to
provide the Executive with certain salary continuation benefits, on the terms
and conditions set forth herein, in order to reasonably induce the Executive to
remain in the Employer's employment; and
WHEREAS, the Executive and the Employer wish to specify in writing the
terms and conditions upon which this additional compensatory incentive will be
provided to the Executive, or to the Executive's spouse or the Executive's
designated beneficiaries, as the case may be;
NOW, THEREFORE, in consideration of the services to be performed in
the future, as well as the mutual promises and covenants contained herein, the
Executive and the Employer agree as follows:
AGREEMENT
1. TERMS AND DEFINITIONS.
1.1. ADMINISTRATOR. The Employer shall be the "Administrator"
and, solely for the purposes of ERISA, the "fiduciary" of this Agreement where a
fiduciary is required by ERISA.
1.2. ANNUAL BENEFIT. The term "Annual Benefit" shall mean an
annual sum of Thirty-Six Thousand Dollars ($36,000.00) multiplied by the
Applicable Percentage (defined below) and then reduced to the extent: (i)
required under the other provisions of this Agreement, including, but not
limited to, Paragraphs 5, 6 and 7 hereof;
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(ii) required by reason of the lawful order of any regulatory agency or body
having jurisdiction over the Employer; and (iii) required in order for the
Employer to properly comply with any and all applicable state and federal laws,
including, but not limited to, income, employment and disability income tax laws
(e.g., FICA, FUTA, SDI).
1.3. APPLICABLE PERCENTAGE. The term "Applicable Percentage"
shall mean that percentage listed on Schedule "A" attached hereto which is
adjacent to the number of complete years (with a "year" being the performance of
personal services for or on behalf of the Employer for a period of 365 days)
which have elapsed starting from the Effective Date of this Agreement and ending
on the date payments are to first begin under the terms of this Agreement.
Notwithstanding the foregoing or the percentages set forth on Schedule "A," but
subject to all other terms and conditions set forth herein, the "Applicable
Percentage" shall be: (i) provided payments have not yet begun hereunder, one
hundred percent (100%) upon the Executive's death; and (ii) notwithstanding
subclause (i) of this Paragraph, zero percent (O%) in the event the Executive
takes any action which prevents the Employer from collecting the proceeds of any
life insurance policy which the Employer may happen to own at the time of the
Executive's death and of which the Employer is the designated beneficiary.
Furthermore, notwithstanding the foregoing, or anything contained herein to the
contrary, in the event the Executive takes any action which prevents the
Employer from collecting the proceeds of any life insurance policy which the
Employer may happen to own at the time of the Executive's death and of which the
Employer is the designated beneficiary: (1) the Executive's estate or designated
beneficiary shall no longer be entitled to receive any of the amounts payable
under the terms of this Agreement, and (2) the Bank shall have the right to
recover from Executive's estate all of the amounts paid to the Executive's
estate (with respect to amounts paid prior to Executive's death or paid to
Executive's estate) or designated beneficiary (with respect to amounts paid to
the designated beneficiary) pursuant to the terms of this Agreement prior to and
after Executive's death.
1.4. BENEFICIARY. The term "beneficiary" or "designated
beneficiary" shall mean the person or persons whom the Executive shall designate
in a valid Beneficiary Designation, a copy of which is attached hereto as
Exhibit "C," to receive the benefits provided hereunder. A Beneficiary
Designation shall be valid only if it is in the form attached hereto and made a
part hereof and is received by the Administrator prior to the Executive's death.
1.5. CHANGE IN CONTROL. The term "Change in Control" shall mean
the occurrence of the any of the following events with respect to Employer (with
the term "Employer" being defined, when determining whether a "Change in
Control" has occurred, to include Mid-Peninsula Bank's current holding company,
Mid-Peninsula Bancorp, a California corporation, such that a "Change in Control"
of Mid-Peninsula Bancorp will be deemed to constitute a "Change in Control" of
the Employer): (i) a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
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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 the
Employer or any stock exchange on which the Employer's shares are listed which
requires the reporting of a change in control; (ii) any merger, consolidation or
reorganization of the Employer in which the Employer does not survive; (iii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions) of any assets of the Employer having an
aggregate fair market value of fifty percent (50%) of the total value of the
assets of the Employer, reflected in the most recent balance sheet of the
Employer; (iv) a transaction whereby any "person" (as such term is used in the
Exchange Act or any individual, corporation, partnership, trust or any other
entity) becomes the beneficial owner, directly or indirectly, of securities of
the Employer representing twenty-five percent (25%) or more of the combined
voting power of the Employer's then outstanding securities; or (v) a situation
where, in any one-year period, individuals who at the beginning of such period
constitute the Board of Directors of the Employer cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Employer's shareholders, of each new director is approved by
a vote of at least three-quarters (3/4) of the directors then still in office
who were directors at the beginning of the period.
1.6. THE CODE. The "Code" shall mean the Internal Revenue Code
of 1986, as amended (the "Code").
1.7. DISABILITY/DISABLED. The term "Disability" or
"Disabled" shall have the same meaning given such term in the principal
disability insurance policy covering the Executive, which is incorporated herein
by reference to the limited extent thereof. In the event the Executive is not
covered by a disability policy containing a definition of "Disability" or
"Disabled," these terms shall mean an illness or incapacity which, having
continued for a period of one hundred and eighty (180) consecutive days,
prevents the Executive from adequately performing the Executive's regular
employment duties. The determination of whether the Executive is Disabled shall
be made by an independent physician selected by mutual agreement of the parties.
1.8. EFFECTIVE DATE. The term "Effective Date" shall mean the
date upon which this Agreement was entered into by the parties, as first written
above.
1.9. ERISA. The term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
1.10. PLAN YEAR. The term "Plan Year" shall mean the
Employer's fiscal year.
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1.11. RETIREMENT. The term "Retirement" or "Retires" shall
refer to the date which the Executive acknowledges in writing to Employer to be
the last day she will provide any significant personal services, whether as an
employee or independent consultant or contractor, to Employer or to, for, or on
behalf of, any other business entity conducting, performing or making available
to any person or entity banking or other financial services of any kind. For
purposes of this Agreement, the phrase "significant personal services" shall
mean more than ten (10) hours of personal services rendered to one or more
individuals or entities in any thirty (30) day period.
1.12. SCHEDULE B ANNUITY. The term "Schedule B Annuity"
shall mean an "Annuity," as defined in this Paragraph 1.12, purchased by the
Bank within one month of the date the first payment is to be paid to the
Executive under the terms of this Agreement with that sum of money which equals:
(a) the amount set forth on Schedule B attached hereto which corresponds to the
number of complete years (i.e., twelve [12] month periods) which have elapsed
between the Effective Date hereof and the date on which the event triggering or
fixing an Executive's right to a Schedule B Annuity occurs; plus (b) an amount
equal to the amount of interest which would have been earned on the amount
described in the foregoing clause (a) of this Paragraph if said amount had been
invested in successive six month United States Treasury Bills starting from the
date on which the event triggering or fixing an Executive's right to a Schedule
B Annuity occurs and ending on the date the first payment to be made by the Bank
to the Executive under the terms of this Agreement is to occur (i.e., using the
six month T-Xxxx rate as the applicable rate for determining the "deemed
interest" to be credited). For purposes of this Agreement, the term "Annuity"
shall mean a commercially available, standard form annuity contract: (i) with an
insurance company having the highest available rating from Standard & Poor's;
and (ii) providing equal monthly payments over a period of fifteen years (one
hundred and eighty [180] months) (with the amount of each monthly payment to be
determined by reference to the Schedule B monetary amount which is to be
invested, as described above, and to begin as described below with respect to
the particular event which triggers the right to receive the Schedule B
Annuity). Notwithstanding the foregoing, or anything contained herein to the
contrary, the amount of the Annuity shall be limited (determined at the time of
its acquisition) to the extent: (i) required under the other provisions of this
Agreement, including, but not limited to, Paragraphs 5, 6 and 7 hereof; (ii)
required by reason of the lawful order of any regulatory agency or body having
jurisdiction over the Employer; and (iii) required in order for the Employer to
ensure proper compliance with any and all applicable state and federal laws,
including, but not limited to, income, employment and disability income tax laws
(e.g., FICA, FUTA, SDI). Furthermore, notwithstanding the foregoing, or
anything contained herein to the contrary, in the event the Executive takes any
action which prevents the Employer from collecting the proceeds of any life
insurance policy which the Employer may happen to own at the time of the
Executive's death and of which the Employer is the designated beneficiary: (1)
the Executive's estate or designated beneficiary shall no longer be entitled
to receive any of the amounts payable under the terms
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of the Annuity, and (2) all amounts paid prior to or after Executive's death
under the terms of the Annuity shall be recoverable in full by the Bank from
Executive's estate [with respect to amounts paid prior to Executive's death or
paid to Executive's estate] or designated beneficiary [with respect to amounts
paid to the designated beneficiary]). The selection of the company which is to
provide the Annuity and the terms of such Annuity shall, except as provided or
limited above, be made by the Bank as it determines to be appropriate, said
determinations to be made by the Bank in its sole and absolute discretion.
1.13. SURVIVING SPOUSE. The term "Surviving Spouse" shall
mean the person, if any, who shall be legally married to the Executive on the
date of the Executive's death.
1.14. TERMINATION FOR CAUSE. The term "Termination for
Cause" shall mean termination of the employment of the Executive by reason of
any of the following:
(a) A termination "for cause" as this term may be defined in any
written employment agreement entered into by and between the Employer and the
Executive;
(b) The willful breach of duty by the Executive in the course of
her employment;
(c) The habitual neglect by the Executive of her employment
responsibilities and duties;
(d) The Executive's deliberate violation of any state or federal
banking or securities laws, or of the Bylaws, rules, policies or resolutions of
the Employer, or of the rules or regulations of: (i) the Office of the
California Superintendent of Banks; (ii) the Federal Deposit Insurance
Corporation; or (iii) any other regulatory agency or governmental authority
having jurisdiction over the Employer;
(e) The determination by a state or federal banking agency
or other governmental authority having jurisdiction over the Employer that the
Executive is not suitable to act in the capacity for which she is employed by
the Employer;
(f) The Executive is convicted of any felony or a crime
involving moral turpitude or a fraudulent or dishonest act; or
(g) The Executive discloses without authority any secret or
confidential information not otherwise publicly available concerning the
Employer or takes any action which the Employer's Board of Directors determines,
in its sole discretion and
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subject to good faith, fair dealing and reasonableness, constitutes unfair
competition with or induces any customer to breach any contract with the
Employer.
2. SCOPE, PURPOSE AND EFFECT.
2.1. CONTRACT OF EMPLOYMENT. Although this Agreement is
intended to provide the Executive with an additional incentive to remain in the
employ of the Employer, this Agreement shall not be deemed to constitute a
contract of employment between the Executive and the Employer nor shall any
provision of this Agreement restrict or expand the right of the Employer to
terminate the Executive's employment. This Agreement shall have no impact or
effect upon any separate written Employment Agreement which the Executive may
have with the Employer, it being the parties' intention and agreement that
unless this Agreement is specifically referenced in said Employment Agreement
(or any modification thereto), this Agreement (and the Employer's obligations
hereunder) shall stand separate and apart and shall have no effect upon, nor be
affected by, the terms and provisions of said Employment Agreement.
2.2. FRINGE BENEFIT. The benefits provided by this Agreement
are granted by the Employer as a fringe benefit to the Executive and are not a
part of any salary reduction plan or any arrangement deferring a bonus or a
salary increase. The Executive has no option to take any current payments or
bonus in lieu of the benefits provided by this Agreement.
3. PAYMENTS UPON OR AFTER RETIREMENT.
3.1. PAYMENTS UPON RETIREMENT. If the Executive shall remain
in the continuous employment of the Employer until attaining sixty-five (65)
years of age, and provided an event triggering Schedule B Annuity payments has
not yet occurred, the Executive shall be entitled to be paid the Annual Benefit,
as defined above, in equal monthly installments, for a period of fifteen (15)
years (One Hundred Eighty (180) months), with each installment to be paid on
the first day of each month, beginning with the month following the month in
which the Executive Retires or upon such later date as may be mutually agreed
upon by the Executive and the Employer in advance of said Retirement date. At
the Employer's sole and absolute discretion, the Employer may increase the
Annual Benefit as and when the Employer determines the same to be appropriate in
order to reflect a substantial change in the cost of living. Notwithstanding
anything contained herein to the contrary, the Employer shall have no obligation
hereunder to make any such cost-of-living adjustment.
3.2. PAYMENTS IN THE EVENT OF DEATH AFTER RETIREMENT. The
Employer agrees that if the Executive Retires and begins to receive payments
pursuant to Paragraph 3.1 hereof, but shall die before receiving all of the One
Hundred Eighty (180)
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monthly payments to which she is entitled, the Employer will continue to make
such monthly payments to the Executive's designated beneficiary for the
remaining period. If a valid Beneficiary Designation is not in effect, then the
remaining amounts due to the Executive under the term of this Agreement shall be
paid to the Executive's Surviving Spouse. If the Executive leaves no Surviving
Spouse, the remaining amounts due to the Executive under the terms of this
Agreement shall be paid to the duly qualified personal representative, executor
or administrator of the Executive's estate.
4. PAYMENTS IN THE EVENT DEATH OR DISABILITY OCCURS PRIOR TO
RETIREMENT.
4.1. PAYMENTS IN THE EVENT OF DEATH PRIOR TO RETIREMENT.
Provided an event triggering Schedule B Annuity payments has not yet occurred,
and the Executive dies while actively employed by the Employer at any time after
the Effective Date of this Agreement, but prior to Retirement, the Employer
agrees to pay the Annual Benefit to the Executive's designated beneficiary in
equal monthly installments, for a period of fifteen (15) years (One Hundred
Eighty (180) months). If a valid Beneficiary Designation is not in effect, then
the remaining amounts due to the Executive under the term of this Agreement
shall be paid to the Executive's Surviving Spouse. If the Executive leaves no
Surviving Spouse, the remaining amounts due to the Executive under the terms of
this Agreement shall be paid to the duly qualified personal representative,
executor or administrator of the Executive's estate. Each installment shall be
paid on the first day of each month, beginning with the month following the
month in which the Executive's death occurs.
4.2. PAYMENTS IN THE EVENT OF DISABILITY PRIOR TO
RETIREMENT. In the event the Executive becomes Disabled while actively employed
by the Employer at any time after the date of this Agreement but prior to
Retirement, and provided an event triggering Schedule B Annuity payments has not
yet occurred, the Executive (or the Executive's designated beneficiary, or the
Executive's estate if no designated beneficiary has been selected, upon the
Executive's death) shall be entitled to the Schedule B Annuity, as defined
above, with payments thereunder to begin in the month following the month in
which the Executive attains sixty-five (65) years of age or, if earlier, the
month following the month in which the Executive dies.
5. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED PRIOR TO RETIREMENT.
As indicated in Paragraph 2 above, the Employer reserves the right to terminate
the Executive's employment, with or without cause but subject to any written
employment agreement which may then exist, at any time prior to the Executive's
Retirement. In the event that the employment of the Executive shall be
terminated, other than by reason of Disability, death or Retirement, prior to
the Executive's attaining sixty-five (65) years of age, then this Agreement
shall terminate upon the date of such termination of employment; provided,
however, that the Executive shall be entitled to the following benefits as may
be applicable depending upon the circumstances surrounding the Executive's
termination:
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5.1. TERMINATION WITHOUT CAUSE. If the Executive's
employment is terminated by the Employer without cause, and such termination is
not subject to the provisions of Paragraph 5.4 below, the Executive (or the
Executive's designated beneficiary, or the Executive's estate if no designated
beneficiary has been selected, upon the Executive's death) shall be entitled to
be paid the Schedule B Annuity, as defined above, with payments to begin with
the month following the month in which the Executive is terminated without
cause or upon such later date as may be mutually agreed upon by the Executive
and the Employer in advance of the effective date of the Executive's
termination.
5.2. VOLUNTARY TERMINATION BY THE EXECUTIVE. It is
acknowledged and agreed by the Executive that the purpose of this Agreement
is to ensure the Executive's continued employment with the Employer and that
if the Executive voluntarily terminates her employment with the Employer
(other than by reason of death, Disability or Retirement), then the Executive
shall have willingly forfeited any and all rights and benefits she may have
under the terms of this Agreement and that, furthermore, no amounts shall be
due or paid to the Executive by the Employer pursuant to the terms of this
Agreement.
5.3. TERMINATION FOR CAUSE. The Executive agrees that
if her employment with the Employer is terminated "for cause," as defined in
subparagraph 1.14 of this Agreement, she shall forfeit any and all rights and
benefits she may have under the terms of this Agreement and shall have no right
to be paid any of the amounts which would otherwise be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.
5.4. TERMINATION BY THE EMPLOYER ON ACCOUNT OF OR AFTER A
CHANGE IN CONTROL. In the event: (i) the Executive's employment with the
Employer is terminated by the Employer in conjunction with, or by reason
of, a "change in control" (as defined in subparagraph 1.5 above); or (ii) by
reason of the Employer's actions a material change occurs in the scope of the
Executive's position, title, responsibilities, duties, salary, benefits, or
locations of employment after a "change in control" (as defined in
subparagraph 1.5) occurs; or (iii) the Employer causes an event to occur
which reasonably constitutes or results in a demotion, a significant
diminution of responsibilities or authority, or a constructive termination
(by forcing a resignation or otherwise) of the Executive's employment after a
"change in control" (as defined in subparagraph 1.5) occurs, then the
Executive (or the Executive's designated beneficiary, or the Executive's
estate if no designated beneficiary has been selected, upon the Executive's
death) shall be entitled to be paid the Annual Benefit, as defined above, in
equal monthly installments, for a period of fifteen (15) years (One Hundred
Eighty (180) months), with installments to be paid on the first day of each
month, beginning with the month following the month in which the Executive is
terminated or any one of the actions referred to above occurs.
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6. ADDITIONAL LIMITATIONS ON THE AMOUNT OF THE ANNUAL BENEFIT/SCHEDULE B
ANNUITY. The Executive acknowledges and agrees that the parties have entered
into this Agreement based upon the certain financial and tax accounting
assumptions. Accordingly, with full knowledge of the potential consequences the
Executive agrees that, notwithstanding anything contained herein to the
contrary: (i) the amount of the Annual Benefit or the Schedule B Annuity, as the
case may be, shall be limited to that amount of the Annual Benefit or Schedule B
Annuity (determined without regard to this Paragraph 6) which will be deductible
by the Employer under the Code in the year in which payment is to be made to the
Executive; (ii) the Annual Benefit amount or the Schedule B Annuity, as the case
may be, shall be deemed to be the last payment made to the Executive and the
first for which an income tax deduction, if any, has been disallowed; and (iii)
any compensatory amounts for which a deduction is denied to the Employer shall,
at the Employer's election, serve to first reduce the Employer's obligation to
make the monthly Annual Benefit payments otherwise due and payable to the
Executive under the terms of this Agreement. The Executive recognizes that, in
this regard, limitations on deductibility may be imposed under, but not limited
to, Code Section 280G. Consistent with the foregoing, and in the event that any
payment or benefit received or to be received by the Executive, whether payable
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Employer (together with the Annual Benefit or the Schedule B
Annuity, the "Total Payments"), will not be deductible (in whole or in part) as
a result of Code Section 280G, the Annual Benefit or the Schedule B Annuity,
shall be reduced until no portion of the Total Payments is nondeductible as a
result of Section 280G of the Code (or the Annual Benefit/Schedule B Annuity is
reduced to zero (0)). For purposes of this limitation:
(a) No portion of the Total Payments, the receipt or enjoyment
of which the Executive shall have effectively waived in writing prior to the
date of payment of any future Annual Benefit or Schedule B Annuity payments,
shall be taken into account;
(b) No portion of the Total Payments shall be taken into
account, which in the opinion of the tax counsel selected by the Employer and
acceptable to the Executive, does not constitute a "parachute payment" within
the meaning of Section 280G of the Code;
(c) Future Annual Benefit/Schedule B Annuity payments shall be
reduced only to the extent necessary so that the Total Payments (other than
those referred to in clauses (a) or (b) above in their entirety) constitute
reasonable compensation for services actually rendered within the meaning of
Section 280G of the Code, in the opinion of tax counsel referred to in clause
(b) above; and
(d) The value of any non-cash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the Employer's
independent auditors in accordance with the principles of Section 280G of the
Code.
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7. RIGHT TO DETERMINE FINANCING METHODS. The Employer reserves the right
to determine, in its sole and absolute discretion, whether, to what extent and
by what method, if any, to provide for the payment of the amounts which may be
payable to the Executive, the Executive's spouse or the Executive's
beneficiaries under the terms of this Agreement. In the event that the Employer
elects to finance 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 interests 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 device used to finance its obligations
under this Agreement, at any time, in whole or in part. Consistent with
Paragraph 9 below, neither the Executive, the Executive's spouse nor the
Executive's beneficiaries shall have any right, title or interest in or to any
financing source or amount utilized by the Employer pursuant to this Agreement,
and any such financing source or amount shall not constitute security for the
performance of the Employer's obligations pursuant to this Agreement. In
connection with the foregoing, the Executive agrees to execute such documents
and undergo such medical examinations or tests which the Employer may request
and which may be reasonably necessary to facilitate any financing for this
Agreement including, without limitation, the Employer's acquisition of any
policy of insurance or annuity. Furthermore, a refusal by the Executive to
consent to, participate in and undergo any such medical examinations or tests
shall result in the immediate termination of this Agreement and the immediate
forfeiture by the Executive, the Executive's spouse and the Executive's
beneficiaries of any and all rights to payment hereunder.
8. CLAIMS PROCEDURE. The Employer shall, but only to the extent necessary
to comply with ERISA, be designated as the named fiduciary under this Agreement
and shall have authority to control and manage the operation and administration
of this Agreement. Consistent therewith, the Employer shall make all
determinations as to the rights to benefits under this Agreement. Any decision
by the Employer denying a claim by the Executive, the Executive's spouse, or the
Executive's beneficiary for benefits under this Agreement shall be stated in
writing and delivered or mailed, via registered or certified mail, to the
Executive, the Executive's spouse or the Executive's beneficiary, as the case
may be. Such decision shall set forth the specific reasons for the denial of a
claim. In addition, the Employer shall provide the Executive, the Executive's
spouse or the Executive's beneficiary with a reasonable opportunity for a full
and fair review of the decision denying such claim.
9. STATUS AS AN UNSECURED GENERAL CREDITOR. Notwithstanding anything
contained herein to the contrary: (i) neither the Executive, the Executive's
spouse or the Executive's designated beneficiaries shall have any legal or
equitable rights, interests or claims in or to any specific property or assets
of the Employer; (ii) none of the Employer's assets shall be held in or under
any trust for the benefit of the Executive, the Executive's spouse or the
Executive's designated beneficiaries or held in any way as security for the
fulfillment of the obligations of the Employer under this Agreement; (iii) all
of the
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Employer's assets shall be and remain the general unpledged and unrestricted
assets of the Employer; (iv) the Employer's obligation under this Agreement
shall be that of an unfunded and unsecured promise by the Employer to pay money
in the future; and (v) the Executive, the Executive's spouse and the Executive's
designated beneficiaries shall be unsecured general creditors with respect to
any benefits which may be payable under the terms of this Agreement.
10. DISCRETION OF BOARD TO ACCELERATE PAYOUT. Notwithstanding any of the
other provisions of this Agreement, the Board of Directors of the Bank may, if
determined in its sole and absolute discretion to be appropriate, accelerate the
payment of the amounts due under the terms of this Agreement, provided that
Executive (or Executive's spouse or designated beneficiaries): (i) consents to
the revised payout terms determined appropriate by the Bank's Board of
Directors; and (ii) does not negotiate or in anyway influence the terms of
proposed altered/accelerated payout (said decision to be made solely by the
Bank's Board of Directors and offered to the Executive [or Executive's spouse or
designated beneficiaries] on a "take it or leave it basis").
11. MISCELLANEOUS.
11.1. OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL. The
Executive acknowledges that she has been afforded the opportunity to consult
with independent counsel of her choosing regarding both the benefits granted to
him under the terms of this Agreement and the terms and conditions which may
affect the Executive's right to these benefits. The Executive further
acknowledges that she has read, understands and consents to all of the terms and
conditions of this Agreement, and that she enters into this Agreement with a
full understanding of its terms and conditions.
11.2. ARBITRATION OF DISPUTES. All claims, disputes and other
matters in question arising out of or relating to this Agreement or the breach
or interpretation thereof, other than those matters which are to be determined
by the Employer in its sole and absolute discretion or those matters subject to
the provisions of Article 8 hereof, shall be resolved by binding arbitration
before a representative member, selected by the mutual agreement of the parties,
of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"), presently
located at 000 Xxxx Xxxxxx, Xxxxx 000, xx Xxx Xxxxxxxxx, Xxxxxxxxxx. In the
event JAMS is unable or unwilling to conduct the arbitration provided for under
the terms of this Paragraph, or has discontinued its business, the parties agree
that a representative member, selected by the mutual agreement of the parties,
of the American Arbitration Association ("AAA"), presently located in San
Francisco, California, shall conduct the binding arbitration referred to in this
Paragraph. Notice of the demand for arbitration shall be filed in writing with
the other party to this Agreement and with JAMS (or AAA, if necessary). In no
event shall the demand for arbitration be made after the date when institution
of legal or equitable proceedings based on such claim, dispute or other matter
in question would be barred by the
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applicable statute of limitations. The arbitration shall be subject to such
rules of procedure used or established by JAMS, or if there are none, the rules
of procedure used or established by AAA. Any award rendered by JAMS or AAA
shall be final and binding upon the parties, and as applicable, their respective
heirs, beneficiaries, legal representatives, agents, successors and assigns, and
may be entered in any court having jurisdiction thereof. The obligation of the
parties to arbitrate pursuant to this clause shall be specifically enforceable
in accordance with, and shall be conducted consistently with, the provisions of
Title 9 of Part 3 of the California Code of Civil Procedure. Any arbitration
hereunder shall be conducted in San Francisco, California, unless otherwise
agreed to by the parties.
11.3. ATTORNEYS' FEES. In the event of any arbitration or
litigation concerning any controversy, claim or dispute between the parties
hereto, arising out of or relating to this Agreement or the breach hereof, or
the interpretation hereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The "prevailing party" means the party determined by
the arbitrator(s) or court, as the case may be, to have most nearly prevailed,
even if such party did not prevail in all matters, not necessarily the one in
whose favor a judgment is rendered.
11.4. NOTICE. Any notice required or permitted of either the
Executive or the Employer under this Agreement shall be deemed to have been duly
given, if by personal delivery, upon the date received by the party or its
authorized representative; if by facsimile, upon transmission to a telephone
number previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.
If to the Employer: Mid-Peninsula Bank
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Chairman of the Board
If to the Executive: Xx. Xxxxxxxx X. Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
12
11.5. ASSIGNMENT. Neither the Executive, the Executive's
spouse, nor any other beneficiary under this Agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, modify or otherwise encumber
any part or all of the amounts payable hereunder, nor, prior to payment in
accordance with the terms of this Agreement, shall any portion of such amounts
be: (i) subject to seizure by any creditor of any such beneficiary, by a
proceeding at law or in equity, for the payment of any debts, judgments, alimony
or separate maintenance obligations which may be owed by the Executive, the
Executive's spouse, or any designated beneficiary; or (ii) transferable by
operation of law in the event of bankruptcy, insolvency or otherwise. Any such
attempted assignment or transfer shall be void and shall terminate this
Agreement, and the Employer shall thereupon have no further liability hereunder.
11.6. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement
shall be binding upon and inure to the benefit of the Executive and the Employer
and, as applicable, their respective heirs, beneficiaries, legal
representatives, agents, successors and assigns. Accordingly, the Employer
shall not merge or consolidate into or with another corporation, or reorganize
or sell substantially all of its assets to another corporation, firm or person,
unless and until such succeeding or continuing corporation, firm or person
agrees to assume and discharge the obligations of the Employer under this
Agreement. Upon the occurrence of such event, the term "Employer" as used in
this Agreement shall be deemed to refer to such surviving or successor firm,
person, entity or corporation.
11.7. NONWAIVER. The failure of either party to enforce at
any time or for any period of time any one or more of the terms or conditions of
this Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.
11.8. PARTIAL INVALIDITY. If any term, provision, covenant,
or condition of this Agreement is determined by an arbitrator or a court, as the
case may be, to be invalid, void, or unenforceable, such determination shall not
render any other term, provision, covenant or condition invalid, void or
unenforceable, and the Agreement shall remain in full force and effect
notwithstanding such partial invalidity.
11.9. 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.
13
11.10. MODIFICATIONS. Any modification of this Agreement shall
be effective only if it is in writing and signed by each party or such party's
authorized representative.
11.11. PARAGRAPH HEADINGS. The paragraph headings used in this
Agreement are included solely for the convenience of the parties and shall not
affect or be used in connection with the interpretation of this Agreement.
11.12. NO STRICT CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any person.
11.13. GOVERNING LAW. The laws of the State of California,
other than those laws denominated choice of law rules, and, where applicable,
the rules and regulations of the Office of the California Superintendent of
Banks and the Federal Deposit Insurance Corporation, shall govern the validity,
interpretation, construction and effect of this Agreement.
IN WITNESS WHEREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Palo Alto, Santa
Xxxxx County, California.
THE EMPLOYER: THE EXECUTIVE:
Mid-Peninsula Bank,
A California State Chartered Bank
By: /s/Xxxxxx X. Xxxxxxxx /s/Xxxxxxxx X. Xxxxxxx
---------------------------------- ------------------------------
Xxxxxx X. Xxxxxxxx, Chairman Xxxxxxxx X. Xxxxxxx
14
SCHEDULE A
NUMBER OF COMPLETE
YEARS WHICH HAVE ELAPSED APPLICABLE PERCENTAGE
------------------------ ---------------------
1............................................... 10.00%
2............................................... 20.00%
3............................................... 30.00%
4............................................... 40.00%
5............................................... 50.00%
6............................................... 60.00%
7............................................... 70.00%
8............................................... 80.00%
9............................................... 90.00%
10..............................................100.00%
15
SCHEDULE B
SCHEDULE B ANNUITY AMOUNT
1. $ 5,471
2. $ 11,425
3. $ 17,906
4. $ 24,959
5. $ 32,636
6. $ 40,992
7. $ 50,086
8. $ 59,984
9. $ 70,756
10. $ 82,481
11. $ 95,243
12. $ 109,132
13. $ 124,249
14. $ 140,702
15. $ 158,610
16. $ 178,100
17. $ 199,314
18. $ 222,402
19. $ 247,531
20. $ 274,881
21. $ 304,649
16
SCHEDULE C
BENEFICIARY DESIGNATION
To the Administrator of the Mid-Peninsula Bank Executive Salary
Continuation Agreement:
Pursuant to the Provisions of my Executive Salary Continuation Agreement
with Mid-Peninsula Bank, permitting the designation of a beneficiary or
beneficiaries by a participant, I hereby designate the following persons and
entities as primary and secondary beneficiaries of any benefit under said
Agreement payable by reason of my death:
PRIMARY BENEFICIARY:
000 Xxxxxxxxx Xxxx.
Xxxxxx X. Xxxxx Xxxxxxxxx, XX 00000 Fiancee
------------------ -------------------- ----------------
Name Address Relationship
SECONDARY (CONTINGENT) BENEFICIARY:
Xxxxxx X. Xxxxxxx 0000-X Xxxxxxxx Xxxx
Xxxxxx X. Xxxxxxx Colo. Spgs., CO 80904 Parents
--------------------- ----------------------- ---------------
Name Address Relationship
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.
The Administrator shall pay all sums payable under the Agreement by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Administrator shall pay all amounts in
accordance with the terms of my Executive Salary Continuation Agreement. In the
event that a named beneficiary survives me and dies prior to receiving the
entire benefit payable under said Agreement, then and in that event, the
17
remaining unpaid benefit payable according to the terms of my Executive Salary
Continuation Agreement shall be payable to the personal representatives of the
estate of said beneficiary who survived me but died prior to receiving the total
benefit provided by my Executive Salary Continuation Agreement.
THE EXECUTIVE:
Dated: May 12, 1995 /s/Xxxxxxxx X. Xxxxxxx
---------------------- ---------------------------------------------
XXXXXXXX X. XXXXXXX
CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:
I,_____________________, being the spouse of Xxxxxxxx X. Xxxxxxx, after
being afforded the opportunity to consult with independent counsel of my
choosing, do hereby acknowledge that I have read, agree and consent to the
foregoing Beneficiary Designation which relates to the Executive Salary
Continuation Agreement entered into by my spouse effective as of _______,
1995. I understand that the above Beneficiary Designation may affect certain
rights which I may have in the benefits provided for under the terms of the
Executive Salary Continuation Agreement and in which I may have a marital
property interest.
Dated: ____________________________,199___.
______________________________________________
_________________________________
18
CERTIFICATE OF ACKNOWLEDGMENT
OF NOTARY PUBLIC
State of California )
) SS.
County of Santa Xxxxx )
On May 17, l995, before me, Xxxxx X. X'Xxxxxxx, Notary Public, State of
California, personally appeared Xxxxxxxx X. Xxxxxxx,
[X] personally known to me - OR
[ ] proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument and
acknowledged to me that she executed the same in her authorized capacity, and
that by her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/Xxxxx X. X'Xxxxxxx
----------------------------------------
[SEAL] Notary Public,
State of California
Capacity Claimed by Signer:
[X] Individual(s) Signing for Oneself/Themselves
[ ] Corporate Officer(s)
---------------------- ----------------------------
Title Company
---------------------- ----------------------------
Title Company
[ ] Partner(s)
----------------------------------------------------------------
Partnership
[ ] Trustees(s)
---------------------------------------------------------------
Trust
[ ] Attorney-in-Fact
------------------------------ -------------------------
Principal Principal
[ ] Other
--------------------------------------- ----------------------------
Entity(ies) Represented Entity(ies) Represented
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Title or Type of Document: Beneficiary Designation Date of Document: 5-17-96
Number of Pages: 2 Signer(s) Other Than Named Above: None
