Exhibit 10.4 Employment Agreement for Xxxxxxx Xxxxxxxxx
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the 31st day of August 2000, between Redlands Centennial Bank (hereinafter
referred to as "Employer"), and Xxxxxxx X. Xxxxxxxxx (hereinafter referred to as
"Executive").
WITNESSETH:
WHEREAS, Employer is desirous of employing Executive in the capacity
hereinafter stated and Executive is desirous of being employed in the Employ of
Employer in such capacity, for the period and on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties hereto, intending to be
legally bound, do hereby agree as follows:
EMPLOYMENT
Employer hereby employs Executive as its Executive Vice-President and
Chief Lending Officer, and Executive accepts the duties that are customarily
performed by the Executive Vice-President and Chief Credit Officer of a
state-chartered banking institution and accepts all other duties described
herein and agrees to discharge the same faithfully and to the best of his
ability and consistent with past performances and the highest and best standards
of the banking industry, in accordance with the policies of Employer's Board of
Directors as established, and in compliance with all laws and Employer's
Articles of Incorporation, Bylaws, Policies and Procedures. Executive shall
devote his business time and attention to the business and affairs of Employer
for which he is employed and shall perform the duties thereof to the best of his
ability. Except as permitted by the prior written consent of Employee's Board of
Directors, Executive shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person, firm or
corporation, whether for compensation or otherwise, which are in conflict with
Employer's interests. Executive shall perform such other duties as shall be from
time to time prescribed by Employer's Board of Directors.
Executive shall have such responsibility and duties and such authority
to transact business on behalf of Employer, as are customarily incident to the
office of Executive Vice-President and Chief Credit Officer of a state-chartered
banking institution.
TERM
Employer hereby employs Executive, and Executive hereby accepts
employment with Employer for the period of three (3) years (the "Term"),
commencing June 26, 2000, with such Term being subject to prior termination as
hereinafter provided. Where used herein, "Term" shall refer to the entire period
of employment of Executive by Employer, whether for the period provided
1
above, or whether terminated earlier as hereinafter provided, or extended by
mutual agreement in writing by Employer and Executive.
Such Term shall be automatically extended for additional periods of one
(1) year unless Executive or Employer shall give written notice not less than
thirty (30) days and not more than three (3) months prior to the expiration of
the Term, of intention not to extend the Term.
COMPENSATION
In consideration for all services to be rendered by Executive to
Employer, Employer agrees to pay Executive a starting base salary of One Hundred
Twenty-Five Thousand Dollars ($125,000) per year. Employer's Board of Directors
shall in their discretion determine any increases in Executive's base salary
after the first anniversary of the Term. Executive's salary shall be paid
semi-monthly. Employer shall deduct there from all taxes which may be required
to be deducted or withheld under any provision of the law (including, but not
limited to, social security payments and income tax withholding) now in effect
or which may become effective anytime during the term of this agreement.
Upon execution of this Agreement, Executive shall receive a signing
bonus of Fifteen Thousand Dollars ($15,000.00).
Executive shall receive use of a bank credit card and use of a social
country club membership.
BONUS AND SALARY CONTINUATION PLAN
Executive shall be entitled to participate in Employer's Incentive
Compensation Plan ("Bonus Plan"), which shall be at the discretion of the
President and CEO.
After six (6) months after commencement of employment, Employer shall
establish a Salary Continuation Plan that shall pay Executive a minimum of
Seventy Five Thousand Dollars ($75,000) per year for fifteen (15) years
commencing on the earlier to occur on Executive's death or Executive reaching
the age of sixty-five (65). Such Salary Continuation Plan shall be covered by a
separate agreement. The Salary Continuation Plan Agreement shall be attached as
an exhibit to this Agreement. Notwithstanding the foregoing, nothing contained
herein shall be deemed to grant Executive any rights or benefits under a Salary
Continuation Plan until Employer duly adopts such Plan. In the event of a Change
of Ownership or Control during the employment of the Executive, the Salary
Continuation Plan shall be vested according to the Plan.
STOCK OPTIONS
After the adoption of a new Employer stock option plan which is
anticipated to be in January 2001, Employer shall grant Executive stock options
to purchase fifteen thousand shares of Employer's common stock at the price per
share set at the market value at the time of the grant. Options shall have a
term of ten (10) years and are subject to a Stock Option Agreement to be
2
executed by the parties. Vesting will be twenty percent (20%) per year
commencing at the first anniversary date of the stock option agreement.
Vested options may be exercised at any time during the remaining term
of the stock option, provided Executive remains an employee of Employer.
Notwithstanding the preceding sentence, if Executive is terminated and such
termination is not for cause, then Executive shall have ninety (90) days to
exercise all options vested with Executive as of the termination date as
provided in the Stock Option Plan.
AUTOMOBILE REIMBURSEMENT
Employer agrees to provide Executive with an automobile for use during
employment. Said vehicle shall not exceed Forty Thousand Dollars ($40,000.00).
Employer agrees to reimburse Executive for all ordinary and necessary
expenses incurred by Executive on behalf of Employer, including automobile
maintenance, gasoline, entertainment, meals, conventions and travel expenses.
Employer shall provide for personal relocation expenses of Executive
incurred in a relocation of Executive to Redlands up to maximum of Five Thousand
Dollars ($5,000.00).
INSURANCE
Employer agrees to provide Executive with health and life insurance
benefits, on the same basis that are now or may hereinafter be in effect for all
other full-time employees. Provision of the insurance will commence on the
Effective Date and may be subject to Executive passing the necessary physical
examinations for qualification, if any. Employer may also apply for "key man"
life insurance with Employer as beneficiary of the policy.
VACATION
Executive shall be entitled to accrue up to four (4) weeks vacation
during each twelve (12) month period with at least two (2) weeks to be taken in
a single consecutive period. Vacation benefits shall not accrue above
one-hundred-sixty (160) hours at any time. Employer's Board of Directors, in its
discretion, may waive the provision with respect to unused vacation time.
TERMINATION
Employer shall have the right to terminate the employment of Executive
"at will" pursuant to California Labor Code Section 2922 by service of written
notice. Termination "at will" includes but is not limited to the following:
(a) physical or mental disability rendering Executive incapable of performing
his duties for a consecutive period of 180 days, or by death. In the event of
such disability, Employer will provide salary continuation for 180 days, less
accrued sick leave. Accrued sick leave is to be utilized until exhausted prior
to salary continuation provided herein; or
3
determination by Employer's Board of Directors that the continued employment of
Executive is not desired for any reason or no reason at all, solely within the
discretion of the Employer's Board of Directors.
Additionally, Employer shall have the right to terminate this Agreement for
cause for any of the following reasons by serving written notice upon Executive:
willful breach of, habitual neglect of, willful failure to perform, or
inability to perform, Executive's duties and obligations as Executive
Vice President and Chief Credit Officer; or
illegal conduct, constituting a crime involving moral turpitude,
conviction of a felony, or any conduct detrimental to the interests of
Employer;
In the event of termination for cause, Executive shall not receive any
further compensation, including severance payment of any kind, after
the date of termination. In the event this Agreement is terminated "at
will" or for any of the reasons other than for cause, Executive shall
be entitled to termination pay in an amount equal to twelve (12)
months of Executive's then base annual salary. Such termination pay
shall be paid in one lump sum and shall be considered to be in full
and complete satisfaction of any and all rights which Executive may
enjoy under the terms of this Agreement in addition to any pay in lieu
of vacation accrued to, but not taken as of the date of termination,
other than rights, if any, to exercise any of the stock options vested
prior to such termination. The insurance benefits provided herein
shall be extended at Employer's sole cost until the end of the month
in which Executive is terminated.
Executive shall give thirty (30) days prior notice, in writing, to
Employer in the event Executive resigns or voluntarily terminates
employment.
ACQUISITION OR DISSOLUTION OF EMPLOYER
This Employment Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Employer. Notwithstanding the foregoing, in the
event proceedings for liquidation of Employer commenced by regulatory
authorities, this Agreement and all rights and benefits hereunder shall
terminate. In the event of a Change of Ownership or Control occurs during the
employment of the Executive and if the Executive's position is either eliminated
or materially changed, the Executive shall receive an amount equal to twelve
(12) months of the then current annual salary in full and complete satisfaction
of any and all rights which Executive may enjoy hereunder other than the right,
if any, to fully exercise all of the stock options thus far granted, such
Options shall become fully vested according to the Stock Option Plan. The
Executive may choose to receive said amount in a lump sum or in monthly
payments. In the event of a Change of Control, the acquiring entity shall assume
all obligations under this Agreement and, in the event that any benefits
hereunder are subject to 280G and constitute an excess parachute payment
thereunder, shall reimburse the Executive for any excise taxes due on such
payment. Change of Ownership shall have occurred on the date of (i) a merger,
where the Bank is not the surviving corporation; (ii) a consolidation, where the
Bank is not the surviving corporation; (iii) a transfer to another entity of all
or substantially all of the assets of the Bank; (iv) an acquisition by a
financial institution,
4
company, individual or individuals acting as a group of more than fifty percent
(50%) of the then outstanding shares of the Bank are held by a person or group
of persons (whether or not acting in concert) not the holder of more than fifty
percent (50%) of the shares on the Commencement Date of this Agreement; or (v)
during any period of twenty-four consecutive months, individuals who at the
beginning of such period where members of the Board of Directors of the Bank
(the "Incumbent Board") shall cease to constitute a majority of the Board of
Directors of the Bank or any successor to the Bank, Provided that any person
becoming a director subsequent to the beginning of such period whose election or
nomination for election was approved by a vote of at least seventy-five percent
(75%) of all the directors compromising the Incumbent Board shall, for the
purposes hereof, considered as though such a person were a member of the
Incumbent Board.
INDEMNIFICATION
To the extent permitted by law, Employer shall indemnify Executive if
he was or is a party or is threatened to be made a party in any action brought
by a third party against Executive (whether or not Employer is joined as a party
defendant) against expenses, judgments, fines, settlements and other amounts
actual and reasonably incurred in connection with said action of Executive acted
in good faith and in a manner Executive reasonably believed to be in the best
interest of Employer (and with respect to a criminal proceeding if Executive had
not reasonable cause to believe his conduct was unlawful), provided that the
alleged conduct of Executive arose out of and was within the course and scope of
his employment as an officer or employee of Employer. Employer retains the right
to designate defense counsel in the event of such action.
TRADE SECRETS
During the Term, Executive will have access to and become acquainted
with what Executive and Employer acknowledge as trade secrets. Trade secrets and
confidential information, as used in this agreement, shall mean information or
materials which are related to the business and operation of the Company,
including, but not limited to: the methods, practices and procedures of the
Company which are disclosed to Employee or which Employee becomes aware of as an
employee of the Company, any other information or material which is proprietary
to or designated as a trade secret or confidential information by the Company,
which Employee may obtain knowledge through, of, or as a result of Employee's
relationship with the Company, access to the Company's premises, or
communications with the Company's employees.
Without limiting the generality of the foregoing, trade secrets and
confidential information includes, but is not limited to the following types of
information and other information of a similar nature (whether or not reduced to
writing or still in development); customer lists; rolodexes; confidential
operating manuals; procedures; marketing techniques; materials; marketing
timetables; strategic development plans; financial information; specifications;
techniques; data; documentation; diagrams; flow charts; research; development;
and processes.
Employee understands that trade secrets and confidential information
have been developed or obtained by the Company by the investment of significant
time, effort and expense, and that such trade secrets and confidential
information provide the Company with a significant competitive advantage in its
business.
5
NON-COMPETITION
During the term of this Agreement, Executive will not, directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer, director or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of Employer.
RETURN OF DOCUMENTS
Executive expressly agrees that all manuals, documents, files, reports,
studies, instruments or other materials used or developed by Executive during
the Term are solely the property of Employer, and Executive has no right, title
or interest therein. Upon termination of this Agreement, Executive or
Executive's representatives shall promptly deliver possession of all said
property to Employer in good condition.
NOTICES
Any notice, request, demand, or other communication required or
permitted hereunder shall be deemed to be properly given when personally served
in writing, when deposited in the U.S. mail, postage prepaid, or when
communicated to a public telegraph company for transmittal, addressed as
follows:
TO BANK: Redlands Centennial Bank
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Board of Directors
TO EXECUTIVE: Xx. Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
Any party hereto may change its or his address for purposes of this
Section by giving notice in accordance herewith.
BENEFIT OF AGREEMENT
This Agreement shall insure to the benefit of and be binding upon the
parties hereto and their respective executors, administrators, successors and
assigns.
APPLICABLE LAW
This Agreement is made and entered into in the State of California, and
the laws of said State shall govern the validity and interpretation hereof, and
the performance of the parties hereto and their respective duties and
obligations hereunder.
6
CAPTIONS AND PARAGRAPH HEADINGS
Captions and paragraph headings used herein are for convenience only
and are not a part of this Agreement and shall not be used in construing it.
INVALID PROVISIONS
Should any provision of this Agreement for any reason be declared
invalid, void, or unenforceable by court of competent jurisdiction, the validity
and binding effect of any remaining portions 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.
ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and is
supersedes any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of Executive by Employer, except
to the extent that it is contemplated that Executive and Employer may enter into
a stock option agreement and/or salary continuation agreement. Each party to
this Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not embodied herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or binding.
This Agreement may not be modified or amended by oral agreement, but only by an
Agreement in writing signed by the Employer and Executive.
CONFIDENTIALITY
This Agreement is to be held confidential. Willful breach of such
confidentiality by Executive may result in the termination of Executive for
cause pursuant to paragraph 9 above.
ARBITRATION
Any dispute regarding any aspect of this Agreement, including but no
limited to its formation, performance or breach ("arbitrable dispute"), shall be
submitted to arbitration in San Bernardino County, California, before a single
experienced employment arbitrator licensed to practice law in California and
selected in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association, as the exclusive forum for resolving such
claims or dispute. The arbitrator shall not have authority to modify or change
the Agreement in any respect. The prevailing party in any such arbitration shall
be awarded its costs, expenses, and actual attorney's fees incurred in
connection with the arbitration. Bank and Executive shall each be responsible
for payment of one-half the amount of the arbitrator's fee(s). The arbitrator's
decision and/or award will be fully enforceable and subject to an entry of
judgment by the Superior Court of the State of California for the County of Los
Angeles. Should any part to this Agreement hereafter institute any legal action
or administrative proceeding against the other with respect to any Claim waived
by this Agreement or pursue any arbitrable dispute by any method other than
arbitration, the responding party shall recover from the initiating party all
damages, costs, expenses, and attorneys' fees incurred as a result of such
action.
7
LEGAL COSTS
If either Executive or Employer commences an action against the other
arising out of or in connection with this Agreement, the prevailing party shall
be entitled to have and recover from the losing party reasonable attorney's fees
and costs of suit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
REDLANDS CENTENNIAL BANK
Dated: August 31, 2000 By: /s/ XXXXXXX X. XXXXXXX
---------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
\ EXECUTIVE
Dated: August 31, 2000 By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------
Xxxxxxx X. Xxxxxxxxx
8
