AMENDED AND RESTATED SALARY PROTECTION AGREEMENT
AMENDED
AND RESTATED
This
Amended and Restated Salary Protection Agreement (“Agreement”) is made this
29th day
of December, 2008, by and between Xxxxxx X.
Xxxxxx (“Employee”) and MISSION COMMUNITY BANK (“Bank”) with
regard to the following:
RECITALS
WHEREAS,
Employee currently serves as the Bank’s Executive Vice President and Chief
Financial officer without benefit of an employment or similar
contract;
WHEREAS,
Bank and Employee are parties to a Salary Protection Agreement dated January 18,
2005 providing Employee certain benefits in the event of certain events
resulting in a change in control of the Bank (the "Salary Protection
Agreement"); and
WHEREAS,
the Bank and Employee wish to amend the terms of the Salary Protection
Agreement.
NOW,
THEREFORE, it is agreed as follows:
AGREEMENT
|
1.
|
For
good and valuable consideration, receipt of which is hereby acknowledged,
Bank undertakes to provide Employee with the salary continuation benefits
set forth herein upon the terms and conditions stated
below.
|
|
2.
|
For
the purpose of this Agreement the “salary continuation benefit” to which
Employee shall be entitled shall be a lump amount equal to six (6) months’
salary (subject to required tax withholdings) at the rate in effect for
Employee immediately prior to the occurrence of the applicable event set
forth in Paragraph 3 hereof.
|
|
3.
|
The
salary continuation benefit shall become immediately payable if Employee’s
employment is terminated, or if Employee’s salary is reduced by more than
ten percent (10%), upon the occurrence of, or within twelve (12) months
following, (i) a merger or consolidation where Mission Community Bancorp
("Bancorp"), the Bank or a corporation in which the shareholders of the
Bank or Bancorp immediately prior to the merger or consolidation hold less
than 50% of the voting power of the Bank or Bancorp after the merger
occurs is not the surviving corporation (association), or (ii) in the
event of a transfer of all, or substantially all, of the assets of the
Bank or Bancorp, or (iii) if there occurs a change of control by which one
person or entity or more than one person
or
|
3266.003/251419.1
entity
acting in concert acquire shares representing more than thirty-five percent
(35%) of the outstanding voting power of the Bank or Bancorp without the
approval of at least a majority of the Board of Directors.
|
4.
|
Should
legal action be necessary to enforce the terms of this Agreement, the
prevailing party shall be entitled to recover costs and reasonable
attorneys’ fees.
|
|
5.
|
This
Agreement shall be governed by and construed according to the laws of the
State of California and the parties hereto submit to the jurisdiction of
the courts of competent jurisdiction of the County of San Xxxx Obispo,
State of California.
|
|
6.
|
It
is the intention of Employee and Bank that the severance and other
benefits payable to the Employee under this Agreement either be exempt
from, or otherwise comply with, Section 409A (“Section 409A”) of the
Internal Revenue Code of 1986, as amended. Notwithstanding any
other term or provision of this Agreement, to the extent that any
provision of this Agreement is determined by Bank, with the advice of its
independent accounting firm or other tax advisors, to be subject to and
not in compliance with Section 409A, including, without limitation, the
definition of “change in control” or the timing of commencement and
completion of severance benefit and/or other benefit payments to the
Employee hereunder in connection with a merger, recapitalization, sale of
shares or other "change in control", or the amount of any such payments,
such provisions shall be interpreted in the manner required to comply with
Section 409A. Bank and Employee acknowledge and agree that such
interpretation could, among other matters, (i) limit the circumstances or
events that constitute a “change in control;” (ii) delay for a period of
six (6) months or more, or otherwise modify the commencement of severance
and/or other benefit payments; and/or (iii) modify the completion date of
severance and/or other benefit payments. Bank and Employee
further acknowledge and agree that if, in the judgment of Bank, with the
advice of its independent accounting firm or other tax advisors, amendment
of this Agreement is necessary to comply with Section 409A, Bank and
Employee will negotiate reasonably and in good faith to amend the terms of
this Agreement to the extent necessary so that it complies (with the most
limited possible economic effect on Bank and Employee) with Section
409A. For example, if this Agreement is subject to Section 409A
and it requires that severance and/or other benefit payments must be
delayed until at least six (6) months after Employee terminates
employment, then Bank and Employee would delay payments and/or promptly
seek a written amendment to this Agreement that would, if permissible
under Section 409A, eliminate any such payments otherwise payable during
the first six (6) months following Employee’s termination of employment
and substitute therefor a lump sum payment or an initial installment
payment, as applicable, at the beginning of the seventh (7th) month
following Employee’s termination of employment which in the case of an
initial installment payment would be equal in the aggregate to the amount
of all such payments thus
eliminated.
|
3266.003/251419.1
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first
hereinabove written.
Mission
Community Bank:
|
|
By:
|
/s/ Xxxxx X.
Xxxxxxxx
|
Xxxxx X. Xxxxxxxx
Chief Executive Officer
|
|
By:
|
/s/ Xxxxxxx X.
Xxx
|
|
|
Xxxxxxx
X. Xxx
|
|
|
Chairman
of the Board
|
|
|
By:
|
/s/ Xxxxxx X.
Xxxxxx
|
Xxxxxx X.
Xxxxxx
Employee
3266.003/251419.1
