EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 16th day of April 2001 between CALIFORNIA
CENTER BANK (the "BANK"), a California banking corporation having a principal
place of business at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
and Seon Xxxx Xxx ("Executive") whose residence address is 00000 Xxxxxxxx
Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000.
W I T N E S S E T H
WHEREAS, the Bank is a California banking corporation duly organized,
validly exiting, and in good standing under the laws of the State of California,
with power to own property and carry on its business as it is now being
conducted;
WHEREAS, the Bank desires to avail itself of the skill, knowledge and
experience of Executive in order to insure the successful management of its
business; and
WHEREAS, the parties hereto desire to specify the terms of Executive's
employment with the Bank;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, it is agreed that from and after September 1, 2001 (the "Effective
Date"), the following terms and conditions shall apply to Executive's said
employment:
A. TERM OF EMPLOYMENT
1. Term. The Bank hereby employs Executive and Executive hereby accepts
-----
employment with the Bank for the initial period of three (3) years (the "Term")
commencing with the Effective Date, subject to earlier termination as
hereinafter provided. The Term may be extended for an additional term of three
(3) years by mutual agreement prior to the end of the initial Term. Where
used herein, "Term" shall refer to the entire period of employment of Executive
by the Bank hereunder, whether for the period provided above, or whether
terminated earlier as hereinafter provided.
2. Destination. Executive shall serve as the President and Chief Executive
------------
Officer of the Bank, and as a director of the Bank.
B. DUTIES OF EXECUTIVE
1. Duties. Executive shall perform the duties of President and Chief
-------
Executive Officer of the Bank, subject to the powers by law vested in the Board
of Directors of the Bank and in the Bank's shareholders. During the Term,
Executive shall perform exclusively the services herein contemplated to be
performed by Executive faithfully, diligently and to the best of Executive's
ability, consistent with the highest and best standards of the banking industry
and in compliance with all applicable laws and the Bank's Articles of
Incorporation, Bylaws and internal written polices.
1
2. Conflicts of interest. Except as permitted by the prior written consent
---------------------
of the Board of Directors of the Bank, Executive shall devote Executive's
entire productive time and Executive shall not directly of indirectly render
any services of business, commercial or professional nature, to any other
person, firm or corporation, whether for compensation or otherwise which are in
conflict with the Bank's interests.
C. COMPENSATION
1. Salary. For Executive's services hereunder, the Bank shall pay or cause
------
to be paid an annual base salary to Executive of Two Hundred Forty Thousand
Dollars ($240,000) for the first year of the Term, with annual increases based
on the Consumer Price Index of the Bureau of Labor Statistics of the Department
of Labor for all urban consumers of the Los Angeles metropolitan area, but in no
event to exceed seven percent (7%) per year. Said salary shall be payable in
equal installments in conformity with the Bank's normal payroll period.
2. Incentive Bonuses. Executive shall receive an incentive annual bonus
-----------------
equal to three percent (3%) of the amount of the Bank's pre-tax earnings for
that year which exceed the Bank's pre-tax earnings for previous year; provided,
however, that in no event shall such bonus be less than $40,000 nor more than
the amount of Executive's annual base salary. For the remaining eight months of
the Term (or for the year 2004, if the Term is extended), Executive shall
receive an incentive bonus equal to three percent (3%) of the amount of the
Bank's pre-tax earnings for 2004 which exceed the Bank's pre-tax earnings for
2003 (or two thirds of such amount, if the Term ends on August 31, 2004);
provided, however, that in no event shall such bonus be less than $40,000 (or
$26,667 if the Term ends on August 31, 2004) nor more than the amount of
Executive's annual base salary. For purposes of this section, "pre-tax earnings"
shall be defined to mean net earnings of the Bank before taxes (calculated in
accordance with generally accepted accounting principles ("GAAP"), after all
expenses and revenues have been paid, including but not limited to provisions or
allocations for possible loan losses, and shall exclude gains and losses on the
sale of securities and any other extraordinary income or losses).
D. EXECUTIVE BENEFITS
1. Vacation. Executive shall be entitled to a three (3) week vacation each
--------
year during the Term: provided, however, that during each year of the term,
Executive is required to and shall take at least two (2) weeks of said vacation,
which must be taken consecutively.
2. Automobile. During the Term hereunder, Executive shall be entitled to
----------
the unlimited use of a suitable full-size automobile, the make of which shall be
determined by mutual agreement. In addition, the Bank shall pay all operating
expenses in regard to Executive's automobile, provided Executive furnishes to
the Bank adequate records and other documentary evidence required by federal and
state statutes and regulations of such payments as deductible business expenses
of the Bank. The Bank shall also procure and maintain in force an automobile
insurance policy on such automobile, sufficient in amount and in coverage. The
coverage shall include, without limitation, $500,000 coverage for bodily injury
or death and $100,000 coverage for related property damage.
2
3. Group Medical and Life Insurance Benefits. The Bank shall provide for
-----------------------------------------
Executive and his dependents, at the Bank's expense, participation in medical,
accident and health insurance benefits equivalent to the maximum benefits
available from time to time under the California Bankers Association Group
insurance program for an employee of Executive's salary level. Executive shall
be provided with term life insurance benefits equivalent to the maximum
amount currently provided by the carrier.
4. Incentive Stock Option(s). The Board of Directors agrees to grant to
-------------------------
Executive, on or before September 1, 2001, a stock option(s) to purchase up to
60,000 shares of the Bank's authorized but unissued Common Stock, at the fair
market value of the stock an the date of grant, on such further terms and
conditions as shall be contained in a Stock Option Agreement(s) to be entered
into by and between the Bank and Executive pursuant to the terms of the Bank's
1996 Stock Option Plan. The Bank agrees that such options will be "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, to the maximum extent allowed by law.
5. Club Memberships. Executive shall be provided with membership in such
----------------
clubs as may be approved by the Board of Directors. The Bank agrees to pay
Executive's membership dues, as well as all expenses reasonable and necessary in
connection with the maintenance and utilization of said membership for business
related purposes by Executive throughout the Term.
E. REIMBURSEMENT FOR BUSINESS EXPENSES
Executive shall be entitled to reimbursement by the Bank for any ordinary
and necessary business expenses incurred by Executive in the performance of
Executive's duties and in acting for the Bank during the Term, which types of
expenditures shall be determined by the Board of Directors, Provided that:
(a) Each such expenditure is of a nature qualifying it as a proper
deduction on the federal and state income tax returns of the Bank as a business
expense and not as deductible compensation to Executive; and
(b) Executive furnishes to the Bank adequate records and other documentary
evidence required by federal and state statutes and regulations issued by the
appropriate taxing authorities for the substantiation of such expenditures as
deductible business expenses of the Bank and not as deductible compensation to
Executive.
F. TERMINATION
1. Termination. The Bank may terminate this Agreement at any time without
-----------
further obligation or liability to Executive, by action of the Board of
Directors, if Executive fails to perform or habitually neglects the duties which
he is required to perform hereunder and such fai1ure or neglect materially
adversely affects the Bank's operations or financial performance; if Executive
engages in illegal activity which materially adversely affects the Bank's
reputation in the community or which evidences the lack of Executive's fitness
or ability to perform Executive's dunes as determined by the Board of Directors
in good faith; if Executive engages in the falsification of reports or
material, intentional misrepresentation or omission of information supplied to
the Bank or to regulatory agencies; or if Executive commits any act which would
3
cause termination of coverage under the Bank's Bankers Blanket Bond as to
Executive (as distinguished from termination of coverage as to the Bank as a
whole). Such termination shall not prejudice any remedy which the Bank may have
at law, in equity, or under this Agreement.
2. Death or Disability. In the event of Executive's death or if Executive
-------------------
is found to be physically or mentally disabled (as hereinafter defined) by the
Board of Directors in good faith, this Agreement shall terminate without any
further liability or obligation to Executive. For purposes of this Agreement
only, physical or mental disability shall be defined as Executive being unable
to fully perform under this Agreement for a continuous period of ninety (90)
days. If there should be a dispute between the Bank and Executive as to
Executive's physical or mental disability for purposes of this Agreement, the
question shall be settled by the opinion of an impartial reputable physician or
psychiatrist agreed upon by the parties or their representative, of if the
parties cannot agree within ten (10) days after a request for designation of
such party, then by a physician or psychiatrist designated by the Los Angeles
County Medical Association. The certification of such physician or psychiatrist
as to the question in dispute shall be final and binding upon the parties
hereto.
3. Action by Supervisory Authority. If the Bank is closed or taken over by
-------------------------------
the Department of Financial Institutions or other supervisory authority,
including the Federal Reserve Board, such supervisory authority may immediately
terminate this Agreement without further liability or obligation to Executive by
the Bank.
4. Merger or Corporate Dissolution. In the event of (i) a merger where
-------------------------------
the Bank is not the surviving corporation, (ii) a consolidation, (iii) a
transfer of all or substantially all of the assets of the Bank, or (iv) any
other corporate reorganization where there is a change in ownership of at least
twenty-five percent (25%) except as may result from a transfer of shares to
another corporation in exchange for at least eighty percent (80%) control of
that corporation, this Agreement shall be terminated without further liability
to Executive by the Bank or the surviving bank, in the event of a merger, or the
transferee of assets, in the event of a purchase or sale; provided, however,
that in such event the Bank shall pay to Executive the amount specified in
Paragraph F.5 herein regarding termination without cause.
5. Termination Without Cause. Notwithstanding anything to the contrary
-------------------------
contained herein, it is agreed by the parties hereto that the Bank may at any
time and for any reason terminate this Agreement and Executive's employment
by the Bank by action of the Board of Directors. Such termination shall be
effective immediately upon the giving of notice to Executive from the Bank and
all benefits provided by the Bank hereunder to Executive shall thereupon cease,
except as provided in this Paragraph. Notwithstanding the foregoing, it is
agreed that in the event of such termination, Executive shall continue to be
paid Executive's Salary at the rate in effect as of the date of termination for
the remainder of the Term but not less than 12 months salary, which payments
shall be paid to Executive in accordance with the normal methods of payment as
specified hereinabove. Such action shall not be construed as a breach of this
Agreement, and the payment of the sum above stated shall constitute full and
complete performance by the Bank of its obligations hereunder.
6. Effect of Termination. In the event of the termination of this
---------------------
Agreement prior to the completion of the Term specified herein. Executive shall
be entitled to the salary earned by Executive prior to the date of termination
as provided for in this Agreement, computed pro rata up to and including that
--------
date; but Executive shall be entitled to no further compensation, except as
provided in Paragraph F.4 above for merger or corporate dissolution and in
Paragraph F.5 above for termination without cause. Executive further agrees that
in the event of any such
4
termination, he will resign form the Board of Directors of the Bank of the
effective date of the termination of this Agreement.
G. GENERAL PROVISIONS
1. Trade Secrets. During the term, Executive will have access to and become
-------------
acquainted with what Executive and the Bank acknowledge are trade secrets, to
wit, knowledge or data concerning the Bank, including its operations and
business, and the identity of customers of the Bank, including knowledge of
their financial condition, their financial needs, as well as their methods of
doing business. Executive shall not disclose any of the aforesaid trade,
secrets, directly or indirectly, or use them for any solicitation purposes,
either during the Term or for a period of six(6) months after termination of
this Agreement, except as required in the course of Executive's employment with
the Bank.
2. Indemnification. To the extent permitted by law and applicable
---------------
statutes, the Bank shall indemnify Executive and hold Executive harmless form
and against liability or loss arising out of Executive's actual or asserted
misfeasance or nonfeasance in the performance or Executive's duties or out of
any actual of asserted wrongful act against, or by, the Bank including but not
limited to judgements, fines, settlements and expenses incurred in the defense
of actions, proceedings and appeals therefrom. However, the Bank shall have no
duty to indemnify Executive with respect to any claim, issue or matter as to
which Executive has been adjudged to be liable to the Bank in the performance of
his duties, unless and only to the extent that the court in which such action
was brought shall determine upon application that, in view of all of the
circumstances of the case, Executive is fairly and reasonably entitled to
indemnification for the expenses which such court shall determine. The Bank
shall provide Executive, at the Bank's expense, with Directors' and Officers'
Liability Insurance to indemnify and insure the Bank and Executive form and
against the aforesaid liabilities. The provisions of this Paragraph shall apply
to the estate, executor, administrator, heirs, legatees or devisee of Executive.
3. Return of Documents. Executive expressly agrees that all manuals,
-------------------
documents, files, reports, studies, instruments or other materials used and/or
developed by Executive during the Term are solely the property of the Bank, and
that Executive has no right, title or interest therein. Upon termination of this
Agreement, Executive or Executive's representative shall promptly deliver
possession of all said property to the Bank in good condition.
4. Notices. All notices, demands or other communications hereunder shall be
-------
in writing and shall be delivered in person (professional courier acceptable);
or by United Stares mail, certified or registered, postage prepaid, with return
receipt requested; or by facsimile transmission; or otherwise actually
delivered, to the addresses for the parties appearing at the inception of this
Agreement. The persons or addresses to which mailings or deliveries shall be
made may change front time to time by notice given pursuant to the provisions of
this Paragraph G.4. Any notice, demand or other communication given pursuant to
this Agreement shall be deemed to have been given on the date actually
delivered, if delivered in person, three days following the date mailed, if
delivered by U.S. mail, or upon written confirmation of transmission, if
delivered by facsimile.
5. Governing Law. This Agreement is to be governed by and construed under
--------------
the laws of the State of California.
5
6. Review by Counsel. Executive represents and warrants the to Bank that he
-----------------
has had this Agreement reviewed by independent legal counsel of his choice, or
if he has not, that he has had the opportunity to do so, and hereby waives any
claim, objection or defense on the grounds that this Agreement has not been
reviewed by legal counsel of his choice.
7. Caption 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.
8. Invalid Provisions. Should any provision of this Agreement for any
------------------
reason be declared invalid, void, or unenforceable by any 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.
9. Entire Agreement. This Agreement contains the entire agreement of the
----------------
parties. It supersedes any and all other agreements either oral or in writing,
between the parties hereto with respect to the employment of Executive by the
Bank. 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
Bank and the Executive.
10. Receipt of Agreement. Each of the parties hereto acknowledges that he
--------------------
has read this Agreement in its entirety and does hereby acknowledge receipt of
a fully executed copy thereof. A fully executed copy shall be an original for
all purposes, and is a duplicate original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and the year first above written.
CALIFORNIA CENTER BANK
By /s/ Xxxxx Xxx Xxx
-----------------------------
Xxxxx Xxx Xxx
Chairman of the Board
/s/ Seon Xxxx Xxx
---------------------------
Seon Xxxx Xxx
6
