EMPLOYMENT AGREEMENT
This employment agreement (this "Agreement") is entered into as of this
1st day of April, 1999, by and between Six Rivers National Bank, a national bank
("Bank") and Xxxxxxx X. Xxxxxxx ("Employee") on the following terms and
conditions.
1. POSITION
Employee shall be Bank's Executive Vice President and Chief
Credit Officer ("CCO"). In the role of Chief Credit Officer, Employee shall have
the duties set forth in this Agreement and in the By-Laws of Bank, subject to
the direction of the Board of Directors of Bank. In addition to such other
duties as may be assigned to him, in his role as Chief Credit Officer Employee
shall be responsible for the following:
(a) Developing and implementing credit policies and
procedures.
(b) Presiding over regular meetings of lending personnel
for the purpose of loan reviews, training and communication of ideas, problems
and general information.
(c) Early identification of problem loans and the review
of such loans with loan officers, and taking such actions as are necessary to
timely and effectively deal with such loans.
(d) Ensuring the completeness of credit files, reviewing
the quality of loans, overseeing Bank's credit evaluation process and reporting
on loan matters to the Board of Directors.
(e) Performing loan review functions and client and
prospective client visits on a regular and ongoing basis.
(f) Interacting with Bank's Senior Vice Presidents/Branch
Administration regarding lending activities in Bank's branch offices.
(g) Developing new credit policies.
(h) In association with Bank's Chief Financial Officer,
supervising the Bank's delinquency control, loan loss management and reserve
policies.
(i) Supervising, along with the Bank's Government
Guaranteed Loan Group, Bank's Small Business Administration, and other
Government Guaranteed loan programs, exclusive of the residential loan programs.
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(j) Supervising, along with the Bank's Mortgage
Department Manager, the Bank's mortgage originations, servicing and secondary
marketing operations.
(k) Developing, in concert with the Bank's Compliance
Officer, consumer compliance policies and procedures as they relate to existing
and future regulations in matters relative to the lending function.
(l) Maintaining awareness of legal and regulatory
developments by participation in trade associations, contact with regulators,
legislators, et al., and extensive study of trade periodicals, regulatory
rulings and interpretations and legislative and regulatory proposals.
(m) Communicating with, educating and training the Bank's
staff in lending compliance and operational policies and procedures.
(n) Conveying to bank personnel the need to maintain the
delicate balance between long, established, prudent lending practices and the
equally critical need to comply with federal and state consumer protection
regulations.
(o) Analyzing the impact of regulations and litigation
and communicating with other senior management and affected department(s)
through bulletins, specialized training, review and revision of forms and
writing of policies and procedures.
(p) Preparing position papers, testimony and responses to
regulatory inquiries on specific subjects as necessary.
(q) Developing responses to examination report exceptions
for the Bank's Chief Executive Officer, appropriate bank consultants and
regulatory agencies.
(r) Participating in community activities and affairs and
public relations opportunities as a senior Bank official.
(s) Developing, reviewing and responding to internal loan
compliance audits.
(t) Reviewing loan forms, notices and loan related
advertising in concert with the Bank's Compliance Officer before distribution.
(u) Participating in the development of new and existing
clients.
2. EXCLUSIVITY
Employee agrees that throughout the term hereof he shall
diligently devote his full time and best efforts to Bank's business. Employee
agrees to perform his services conscientiously, efficiently and to the best of
his ability. Except with the prior consent of Bank's board of directors,
Employee will not engage directly or indirectly in any other business activity
(whether or not for pecuniary advantage) that is or may be competitive with or
might place him in a competing position to that of Bank or any company
affiliated with Bank. Notwithstanding the foregoing, Bank agrees that nothing
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contained herein shall prevent Employee from making passive investments in other
non-competing businesses. Employee agrees that he shall not engage in conduct
which is in contravention of Bank's conflict of interest policy.
3. TERM
Employee's employment under this Agreement shall commence on
April 1, 1999 (the "Effective Date") and shall continue thereafter for a period
of three years from the date thereof ("Term").
4. COMPENSATION
(a) SALARY
Bank shall pay Employee a base salary ("Base Salary")
of $105,000 per annum, less appropriate withholdings, taxes and similar
deductions, payable in equal installments on those days when Bank normally pays
its Employees. Not less than once each 12 months, the Chief Executive Officer of
Bank shall review the Base Salary of Employee for consideration of increasing
the Base Salary based upon the performance of Employee, market conditions for
salaries to individuals similarly employed, increases in the cost of living, and
similar factors.
(b) BONUS
At the end of each calendar year, the amount of bonus
compensation, if any, to be paid to Employee shall be determined in the
discretion of the Board of Directors and Chief Executive Officer of Bank based
upon the performance of Employee and the results of Bank's operations.
(c) BUSINESS EXPENSES
In accordance with Bank policy as it may exist from
time to time, and subject to the approval of all such expenses by the Chief
Executive Officer of Bank, Employee shall be entitled to reimbursement by Bank
for any ordinary, reasonable business expenses incurred by Employee in the
performance of Employee's duties and in acting for Bank during the term of this
Agreement, provided that Employee furnishes to Bank substantially adequate
records and other documentary evidence as required by Bank's policies or by
federal and state statutes and regulations with respect to the substantiation of
such expenditures as deductible business expenses of Bank.
(d) BENEFITS
During the term of his employment under this
Agreement, Employee shall be entitled to receive the following benefits:
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(i) Employee shall be eligible to participate in
all employee benefit plans maintained by Bank, including (without limitation)
any disability, health, accident and other insurance programs, paid vacations,
and similar plans or programs, subject to terms and conditions of each plan
currently in effect.
(ii) Employee shall receive from Bank a car
allowance of $500 per month.
(iii) Subject to availability at customary and
usual rates, Bank shall provide term insurance on the life of Employee in a
principal amount equal to three times Employee's Base Salary, up to a maximum
principal amount of $300,000. Employee shall be responsible for a portion of the
premium due on said insurance, as determined by Bank's benefit plan for other
full time employees.
(e) STOCK OPTIONS
Employee shall be eligible to participate in Bank's
Stock Option Plan (the "Plan"). Employee will be granted options in the
discretion of Bank's Board of Directors.
5. DISABILITY AND DEATH
(a) If employee suffers a physical or psychological
condition which renders him incapable of performing the essential functions of
his job with or without a reasonable accommodation prior to the termination of
this Agreement, then, to the extent permitted by law, Bank shall have the right
upon ten days written notice to terminate this Agreement and Employee's
employment hereunder.
(b) Immediately following the date on which Bank
terminates Employee's employment pursuant to Section 5(a) of this Agreement, or
earlier if required by law, Bank shall pay to Employee all incurred but
unreimbursed business expenses, accrued but unpaid salary, earned but unpaid
bonus, and accrued but unused vacation time, such salary and vacation time to
accrue until the last day of the month in which Employee's last working day
occurred. Thereafter, Bank's obligations shall terminate, but Employee shall
continue to be eligible to receive benefits under the disability plans, if any,
that Bank maintains as of the date of termination, provided that Employee
satisfies the requirements of such plans, if any.
(c) If Employee dies before receipt of the entire amount
specified in Section 5(b), then unpaid amounts shall be paid to Employee's
estate.
(d) In the event of Employee's death during the term of
this Agreement, this Agreement shall terminate. Immediately after the date of
death, or earlier if required by law, Bank shall pay to Employee's estate all
incurred but unreimbursed business expenses, accrued but unpaid salary, earned
but unpaid bonus, and accrued but unused vacation time, with such salary and
vacation to accrue until the last day of the month in which Employee's last
working day occurred.
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6. TERMINATION FOR CAUSE AND WITHOUT CAUSE
(a) Except as otherwise provided in this Agreement, this
Agreement may be terminated for cause immediately by Bank, at Banks option upon
notice to Employee, upon the occurrence of any of the following events. "Cause"
shall include but not be limited to the following items:
(i) A material breach by Employee of any of the
terms or provisions of this Agreement;
(ii) The repeated neglect by Employee of his
duties under this Agreement or any material act of dishonesty, intentional
misrepresentation or moral turpitude, including the misappropriation or
embezzlement of property of Bank or a customer of Bank, the unauthorized
intentional disclosure of confidential information, or a fraud by Employee in
the performance of his duties as an employee of Bank;
(iii) Employee is convicted of a misdemeanor
involving moral turpitude or a felony;
(iv) Conduct that would preclude Bank's ability
to bond Employee; or
(v) A written finding, order or directive from
any state or federal banking regulator with jurisdiction over Employer that
Employee has operated Bank in an unsafe manner or ordering the removal of
Employee as an executive officer of Bank.
In the event Employee is terminated for cause,
Employee shall be entitled to receive salary through the effective date of the
termination, any incurred but unreimbursed business expenses, and any accrued
but unused vacation time as of the date of termination. Employee shall not he
entitled to any other compensation.
(b) During the Term, this Agreement may be terminated
immediately without cause by Bank upon written notice except as otherwise
provided for elsewhere in this Agreement. For purposes of this provision,
"termination without cause" shall include (i) assignment of employee to duties
of substantially lesser responsibility to those described in Section 1 hereof,
(ii) a material adverse change in the position of Chief Credit Officer,
including title, lines of reporting, authority or responsibilities, or (iii)
adverse changes in levels of base salary.
(i) Upon notice by Employee, Bank shall have
right to correct any changes referenced above by Employee, within 30 days of
said notification, and restore Employee to the position described in Section 1
of this Agreement.
(ii) If Employee's employment is terminated
without cause by Bank under this section, Employee shall be entitled to receive
(within ten days of termination) salary through the effective date of the
termination, a lump sum amount equal to the total of payments of Base Salary
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remaining to be paid during the Term, any accrued but unused vacation pay as of
the date of termination, and any incurred but unreimbursed business expenses;
provided, however, that in the event the Office of the Comptroller of the
Currency ("OCC") does not approve the payment to Employee of a lump sum amount
equal to the total of payments of Base Salary remaining to be paid during the
Term, then the amount of the lump sum Base Salary payment to Employee as the
result of termination without cause shall be such lesser amount as is approved
by the OCC; provided further, however, that in no event shall the lump sum Base
Salary amount paid to Employee pursuant to this paragraph be less than the
smaller of (A) 18 months Base Salary or (B) the total of payments of Base Salary
remaining to be paid during the Term.
(c) During the Term, this Agreement may be terminated
without cause by Employee on 90 days notice to Bank. If this Agreement is
terminated without cause by Employee, Employee shall be entitled to receive
salary through the effective date of termination, any accrued but unused
vacation pay as of the date of termination, and any incurred but unreimbursed
business expenses.
(d) Unless otherwise agreed, if Employee is terminated
for any reason or resigns for any reason, Employee agrees to resign immediately
from the Board of Directors and all committees or other positions held with
Bank, effective as of the last date of employment.
7. TRANSITION AGREEMENT
This Agreement incorporates by reference the terms of the
Transition Agreement between Bank and Employee dated September 21, 1998
("Transition Agreement"). Nothing contained in this Agreement shall be deemed to
contradict or to be inconsistent with any of the terms of the Transition
Agreement. Any and all rights created pursuant to the Transition Agreement shall
be in addition to Employee's rights pursuant to this Agreement.
8. OWNERSHIP OF CONFIDENTIAL PROPRIETARY INFORMATION
All records of the accounts of customers, and any other
records and books relating in any manner whatsoever to the customers of Bank,
and all other files, books and records and other materials owned by Bank or used
by it in connection with the conduct of its business, whether prepared by
Employee or otherwise coming into his possession, shall be the exclusive
property of Bank regardless of who actually prepared the original material, book
or record. All such books and records and other materials shall be immediately
returned to Bank by Employee on any termination of his employment.
9. TRADE SECRETS
During the Term, Employee will have access to and become
acquainted with what Employee and Bank acknowledge are trade secrets, including
the names of customers and clients of Bank, their financial condition and
financial needs, financial information regarding Bank and other information
relating to Bank's products, services and methods of doing business.
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Employee agrees not to disclose any of Bank's trade secrets, directly or
indirectly, or use them in any way, either during the term of employment (except
as required in the course of employment with Bank) or for a period of twelve
months after the termination of this Agreement. Employee will not, for one year
following the termination of Employee's employment with Bank, solicit for
employment elsewhere individuals who are active, full-time employees of Bank.
10. INDEMNIFICATION
To the extent permitted by and consistent with Section 317 of
the California Corporations Code ("Section 317"), the Articles of Incorporation
and the Bylaws of Bank, Bank shall indemnify Employee for expenses, judgments,
fines, settlements and other amounts actually incurred by Employee in connection
with any proceeding to which Employee is a party by reason of the fact that
Employee is or was an agent of Bank (as defined in Section 317) if the
proceeding arose from acts or omissions in the course and scope of Employee's
employment other than willful misconduct or acts not covered by any
indemnification agreement between Bank and Employee. Bank shall advance on
behalf of Employee all costs, including attorneys' fees, as necessary with
respect to any such proceeding. In the event any applicable law shall require
the issuance of an undertaking by Employee, such shall be acceptable without
bond, collateral or any other security being given by Employee in connection
therewith. This provision shall survive the termination of this Agreement for
any reason.
11. ASSIGNMENT AND MODIFICATION
Except as required by the surviving entity in a change of
control, this Agreement and the rights and duties hereunder may not be assigned
by any party hereto without the prior written consent of the other, and the
parties expressly agree that any attempt to assign the rights of any party
hereunder without such consent will be null and void. Any modification of this
Agreement shall be made in a writing executed by both parties.
12. FURTHER ASSURANCE
From time to time each party will execute and deliver such
further instruments and will take such other action as the other party
reasonably may request in order to discharge and perform the obligations and
agreements hereunder.
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13. NOTICES
All notices required or permitted hereunder shall be in
writing and shall be delivered in person or sent by certified or registered
mail, return receipt requested, postage prepaid as follows:
To Bank: Chairman of the Board
Six Rivers National Bank
000 "X" Xxxxxx
Xxxxxx, XX 00000
To Employee: Xxxxxxx X. Xxxxxxx
Six Rivers National Bank
402 "F" Street
Eureka, CA 95501
or such other party and/or address as any of such parties may designate in a
written notice served upon the other parties in the manner provided herein. All
notices required or permitted hereunder shall be deemed duly given and received
on the date of delivery if delivered in person or on the second day next
succeeding the date of mailing if sent by certified or registered mail.
14. ARBITRATION
Except as otherwise specifically set forth herein, any
controversy or claim arising out of or relative to this Agreement, or the breach
thereof, or any claim relative to employment discrimination, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered shall be and may be entered in
any court having jurisdiction thereof. Such arbitration shall take place in
Humboldt County, California, unless otherwise agreed to in writing by the
parties. Employee understands and agrees that this Agreement is a waiver of
Employee's right to receive punitive damages to which Employee may otherwise be
entitled in a court action on a disputed termination or for claims of unlawful
discrimination or harassment allegedly occurring during the course of
employment. Only the arbitrator, not a judge or jury, will decide the claim or
dispute.
15. SUCCESSORS
This Agreement shall be binding upon, and shall inure to the
benefit of, the successors of the parties.
16. OCC APPROVAL
In the event that any of the provisions, or portions thereof,
of this Agreement require the advance approval of the OCC, such provisions shall
not be deemed to be effective unless and until such approval is obtained. In the
event that OCC approval is not obtained for any of the provisions, or portions
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thereof, of this Agreement, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
17. ENTIRE AGREEMENT
This Agreement and the Transition Agreement constitute the
entire agreement between the parties, and all prior negotiations,
representations, or agreements between the Parties, whether oral or written, are
merged into this Agreement and the Transition Agreement and shall be deemed
superseded and canceled.
18. GOVERNING LAW
This Agreement shall be construed in accordance with the laws
of the State of California.
19. EXECUTED COUNTERPARTS
This Agreement may be executed in one or more counterparts,
all of which together shall constitute a single agreement and each of which
shall be an original for all purposes.
20. SECTION HEADINGS
The various section headings are inserted for purposes of
convenience only and shall not affect the meaning or interpretation of tilts
Agreement or any section hereof.
21. CALENDAR DAYS/CLOSE OF BUSINESS
Unless the context so requires, all periods terminating on a
given day, period of days or date shall terminate on the close of business on
that day or date, and references to "days" shall refer to calendar days.
22. SEVERABILITY
In the event that any of the provisions, or portions thereof,
of this Agreement are held to be unenforceable or invalid by any court of
competent jurisdiction, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
23. ATTORNEYS' FEES
In the event that any party shall bring any arbitration,
action to enforce arbitration or any other legal action or proceeding
(collectively "action") arising out of or in connection with the performances
breach or interpretation of this Agreement, then the prevailing party in such
action as determined by the court or other body having jurisdiction shall be
entitled to recover from the losing party, as determined by the court or other
body having jurisdiction, all reasonable costs and expenses of the action,
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including reasonable attorneys' fees, court costs, costs of investigation and
other costs reasonably related to such action, in such amounts as may be
determined in the discretion of the court or other body having jurisdiction.
IN WITNESS WHEREOF, this Agreement is executed as of the day and year
first above written.
/s/ XXXXXXX X. XXXXXXX
-------------------------------------------
Xxxxxxx X. Xxxxxxx
SIX RIVERS NATIONAL BANK
By: /s/ XXXXXXX X. XXX
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Xxxxxxx X. Xxx
Title: Chairman of the Board
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