EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of December
20, 1995 between ELDORADO BANK ("Employer") and XXXXXXX X. XXXXX ("Employee").
R E C I T A L S
A. Employer desires to retain Employee in the full-time employ of
Employer on the terms of this Agreement.
B. Employee has advised Employer of Employee's willingness to remain in
the full-time employ of Employer on the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals, and the terms,
conditions and covenants contained herein, it is agreed as follows:
1. EMPLOYMENT. Employer hereby employs Employee and Employee hereby
accepts this employment and agrees to exercise and perform faithfully,
exclusively and to the best of Employee's ability on behalf of Employer the
powers and duties customarily exercised and performed by its Executive Vice
President and Chief Credit Officer on the terms and conditions set forth herein.
Employee acknowledges and agrees that Employee is hereby also making a moral
commitment to honor this Agreement and to further the Employer's best interests
during the full term of this Agreement.
2. EMPLOYEE'S SERVICES AND DUTIES.
2.1 During the term hereof, Employee shall:
(a) Observe and conform to the policies and directions
promulgated by Employer's Board of Directors from time to time;
(b) Assume and perform those duties customarily performed by the
Chief Credit Officer of a bank, including general executive duties and
other powers and duties pertaining by law, regulations or practice to the
office of Chief Credit Officer, or otherwise imposed by the Bylaws of
Employer; and
(c) Serve as a full-time employee, and devote Employee's ability
and attention to the business of Employer during the term of this
Agreement, and neither directly nor indirectly render any services of a
business, commercial or professional nature, whether as employee, partner,
officer, director or shareholder, to any other person, firm, corporation or
organization which in any manner competes with Employer, whether for
compensation or otherwise, nor engage in any activity which is adverse to
the Employers' business or welfare, without the prior written consent of
Employer.
The precise services to be performed by Employee may be
extended or curtailed, from time to time, at the discretion of the Board of
Directors of
Employer, provided such services shall at all times be of the nature
customarily performed by the Chief Credit Officer or an Executive Vice
President of a bank.
2.2 Nothing contained herein shall be construed to prevent Employee
from investing Employee's assets in any form or manner, or supervising these
investments, provided that such investment-related activities do not, in any
manner nor for any significant amount of time, interfere with Employee's
performance of services on behalf of Employer, and provided further the Employee
shall not acquire any direct or indirect ownership interest in any bank or
financial institution, other than Employer, where such ownership interest
exceeds one percent (1%) of the total ownership interests in such financial
institution. However, employee ownership restrictions in any bank or financial
institution other than Employer shall only apply to banks or financial
institutions that are located within the service areas of any of Employer's
offices and are in direct competition with Employer.
3. TERM. The term of Employee's employment by Employer pursuant to this
Agreement shall be for a period commencing on the date of this Agreement and
terminating as follows:
(a) During the period November 1 through December 31 of each
calendar year hereafter, commencing with calendar year 1996, either party may
give written notice to the other party that this Agreement shall terminate on
December 31 of the second calendar year following the calendar year in which
such written notice is given; or
(b) As provided in Sections 7 or 8 below.
4. COMPENSATION AND OTHER BENEFITS. As compensation, in full, for the
services to be rendered by Employee hereunder, Employer shall pay, and the
Employee shall accept, the following compensation:
(a) Employer shall pay to Employee an annual base salary of
$110,000 until March 1, 1996, at which time the annual base salary shall
increase to $118,000, payable in equal semi-monthly installments, less usual
withholding deductions, during the term hereof. Employer shall evaluate
Employee's base salary each calendar year, but any increase to such base salary
shall be at the sole discretion of Employer.
(b) Employer shall provide Employee with an automobile allowance
of $700 per month for the term of this Agreement.
(c) As additional compensation, Employee shall be entitled to
participate in the Eldorado Bank Executive Officer Bonus and Incentive Plan, the
Eldorado Bank Ten-Year Long-Term Deferred Compensation Plan and the Eldorado
Bank Two-Year Short-Term Deferred Compensation Plan as long as Employer
maintains such Plans, which Plans may be altered from time to time or terminated
by Employer at its sole discretion.
(d) During the term of Employee's employment under this
Agreement, Employee shall be entitled to receive all other benefits of
employment made available to other employees of Employer, including
participation in profit-sharing plans (specifically the Employee Stock Ownership
Plan and 401(k) Plan), and life, health and accident insurance benefits
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(including executive officers' insurance coverage) in the form, kind and amount
made available under group insurance coverage to employees (or executive
officers in the case of the executive officers' insurance) of Employer. Employee
shall be entitled to term life insurance coverage in the amount of $400,000 for
the term of this Agreement.
5. EXPENSES. Employee is authorized to incur reasonable expenses for
promoting the business of Employer as is customary for a Chief Credit Officer of
similar employers. Employee shall provide Employer with adequate records of all
expenses incurred by Employee under this Section.
6. VACATIONS. Employee shall be entitled to vacation benefits of four (4)
weeks for each calendar year of this Agreement.
7. TERMINATION PRIOR TO EXPIRATION OF TERM.
7.1 TERMINATION BY EMPLOYER FOR CAUSE. Employer, by vote or written
approval of the Board of Directors duly taken in accordance with the law and
Employer's Bylaws, may terminate this Agreement immediately, at which time all
obligations and liability of Employer under this Agreement shall cease (except
as to benefits then accrued), upon determination in good faith that Employee:
(i) has been adjudged guilty of a felony or a misdemeanor involving moral
turpitude by a court of competent jurisdiction; (ii) has committed any act which
would cause termination of coverage under the Employer's Bankers' Blanket Bond
as to Employee (as distinguished from termination of coverage as to the Employer
as a whole); (iii) was involved in criminal misfeasance or willful misconduct in
the performance of Employee's duties; or (iv) breached this Agreement or
Employer's Code of Conduct.
7.2 TERMINATION BY EMPLOYER WITHOUT CAUSE. Employer, by vote or
written approval of the Board of Directors duly taken in accordance with the law
and Employer's Bylaws, may terminate this Agreement and rights hereunder,
without cause or any reason whatsoever, upon a lump sum cash payment to Employee
in an amount equal to (i) six (6) months of Employee's then base salary being
paid pursuant to Section 4(a) above if such termination occurs prior to a
"Change in Control" (as defined in Section 7.6 below), and (ii) 12 months of
Employee's then base salary being paid pursuant to Section 4(a) above if such
termination occurs after a "Change in Control". Upon such payment, all
obligations and liability of Employer under this Agreement shall cease, except
as to Employee's accrued benefits to the date of termination.
7.3 ACQUISITION OR DISSOLUTION OF EMPLOYER. This Agreement shall not
be terminated by the voluntary or involuntary dissolution of Employer or by any
merger or consolidation where Employer is not the surviving or resulting
corporation, or upon any transfer of all or substantially all of the assets of
Employer. In the event of any such dissolution, merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon and
inure to the benefit of the surviving or resulting corporation or the
corporation to which such assets shall be transferred.
Notwithstanding the foregoing, in the event proceedings for
liquidation of Employer are commenced by regulatory authorities, this Agreement
and all rights and benefits hereunder shall terminate. However, Employee will
have the sole option to demand and receive
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the lesser of (i) six (6) months salary based upon the salary being paid to
Employee at the time of such termination, or (ii) the balance payable under this
Agreement.
7.4 DISABILITY OF EMPLOYEE. If Employee becomes disabled during the
term of this Agreement and such disability continues for a period of six (6)
months out of any six (6) month period, Employer may, at its option, after the
expiration of such six month period, terminate this Agreement by giving written
notice to Employee. While Employee is disabled, Employer shall pay to Employee
the monthly salary installments as provided in Section 4(a), but such
installments shall be reduced by all amounts paid to Employee on account of
disability insurance, worker's compensation or social security payments made to
Employee arising out of Employee's disability other than medical, hospital or
similar health insurance; provided, however, that such payments by Employer
shall cease upon the earlier of (a) the expiration of the term of this
Agreement, (b) the earlier termination of this Agreement pursuant to its
provisions, or (c) the continuation of Employee's disability for a period of six
(6) months. For the purpose of this Agreement, the term "disabled" shall be
defined as Employee's inability, through physical or mental illness or other
cause, to perform normal and customary duties which Employee is required to
perform under this Agreement. In determining whether Employee is disabled,
Employer may rely upon the written statement provided by a licensed physician
acceptable to Employer. Employee shall allow examination from time to time by
any licensed physician selected by Employer and agreed to by Employee. All such
examinations will be conducted within a reasonable time period.
7.5 RESIGNATION BY EMPLOYEE TO TAKE A POSITION ELSEWHERE. Upon the
receipt by Employer of a written resignation of Employee, this Agreement and the
rights hereunder shall terminate and the obligations and liability of Employer
under this Agreement shall cease except as to Employee's benefits accrued to the
date of resignation. Employee agrees to provide Employer at least thirty (30)
days' prior written notification of such resignation, which period can be
shortened at the sole right of Employer.
7.6 CHANGE IN CONTROL: TERMINATION BY EMPLOYEE FOR GOOD REASON. In
the event of a "Change in Control" (as defined below), Employee may, at any time
thereafter during the term of this Agreement, terminate Employee's employment
with Employer for "Good Reason" (as defined below), in which event Employee
shall be paid on the date on which the Waiver and Release Agreement referred to
below becomes effective, pursuant to paragraph 3(c) thereof, a cash lump sum
equal to the monthly amount being paid to Employee pursuant to Section 4(a)
above at the time of such termination, multiplied by twelve. For purposes
hereof:
(a) "Change in Control" shall mean:
(i) Any transaction or series of related transactions as a
result of which Eldorado Bancorp does not immediately thereafter own at
least fifty percent of the combined voting power of the outstanding
securities of Employer;
(ii) A sale of all or substantially all of the assets of
Employer to an entity of which less than fifty percent of the combined
voting power of the outstanding securities owned by Eldorado Bancorp;
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(iii) Any consolidation or merger of Eldorado Bancorp, as a
result of which consolidation or merger the shareholders of Eldorado
Bancorp immediately prior thereto own less than fifty percent of the
combined voting power of the outstanding securities of the surviving or
resulting entity immediately thereafter; or
(iv) A sale by shareholders of fifty percent or more of the
combined voting power of the outstanding securities of Eldorado Bancorp
pursuant to a tender offer or a series of related tender offers; and
(b) "Good Reason" shall mean:
(i) Employee being delegated or assigned duties by the Board of
Directors of Employer or the Chief Executive Officer by a communication in
writing which are wholly and clearly inconsistent with the position and
status of Executive Vice President;
(ii) Employee having had removed by the Board of Directors of
Employer or the Chief Executive Officer by a communication in writing
the authority or responsibility necessary to carry out the duties of
Executive Vice President;
(iii) Employee having a substantial alteration in the nature,
status or prestige of Employee's responsibilities due to the action of
the Board of Directors of Employer or the Chief Executive Officer,
which is verifiable by tangible evidence; or
(iv) Employee being relocated to an office more than twenty-five
(25) miles from Employer's executive offices.
Notice of any termination pursuant to this Section 7.6 shall be given
in writing by Employee to Employer within ninety (90) days of the occurrence of
the "Good Reason" upon which the termination is based, and such termination
shall be effective upon the delivery thereof. If Employee elects to terminate
this Agreement pursuant to this Section 7.6, and Employer tenders payment as
provided in this Section 7.6, Employer shall have no further obligation to
Employee by reason of Employee's employment (including this Agreement) or the
termination thereof, other than those obligations which had accrued pursuant to
Sections 4, 5 and 6 above as of the date of such termination in accordance with
the terms thereof, and Employee agrees that receipt of such payment shall
constitute a full and final release thereof and that, as a condition to such
payment, Employee will execute and deliver to Employer a Waiver and Release
Agreement, dated the date of termination, in the form attached hereto as Exhibit
A. Notwithstanding anything in this Agreement to the contrary, if any portion of
the payment pursuant to this Section 7.6, combined with any other payments or
benefits, is either nondeductible or subject to an excise tax under Internal
Revenue Code Sections 280G or 4999, respectively, the payment shall be reduced
to the extent necessary to make such sections inapplicable.
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7.7 MISCELLANEOUS PROVISIONS REGARDING TERMINATION.
(a) If this Agreement is terminated before the end of its term in
accordance with this Agreement, Employee shall be entitled to the compensation
earned by Employee up to the date of termination, and Employer and Employee
shall have no further obligation to each other. All other benefits specifically
provided for in this Agreement to which Employee is entitled shall cease as of
the date of termination, except for obligations which have accrued as of such
date.
(b) The Sections in this Agreement providing for Employer's right to
terminate this Agreement shall be interpreted wholly independent from and
without reference to one another, and shall not be construed to impair or in any
manner limit Employer's right to otherwise terminate this Agreement for valid
cause pursuant to the laws of the State of California.
(c) Any written notice to be given to Employee by Employer may be
given either by personal delivery to Employee, or by mail, registered or
certified, postage prepaid with return receipt requested, addressed to Employee
at Employee's then current residence. All notices so mailed shall be deemed
delivered on the third business day after being placed in the mail.
(d) Employee may exercise Employee's rights to exercise any stock
options vested prior to termination or resignation, if any, and as provided in a
Stock Option Plan and Stock Option Agreement to which Employee is a party.
8. DEATH DURING EMPLOYMENT. If Employee dies during the term of this
employment, Employer shall pay to the estate of Employee the compensation and
other rights hereunder which would otherwise be payable to Employee up to the
end of the following month in which death occurs, and Employer shall have no
further obligations or liability under this Agreement (except as to benefits
then accrued).
9. CONFIDENTIAL INFORMATION. Employee covenants and agrees that Employee
shall not use or disclose to others any information of Employer which is either
confidential or proprietary to Employer. Employee's obligations hereunder shall
survive the termination of this Agreement. For purposes hereof, information
shall no longer be confidential when it is generally known to the public.
10. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of Employer, its successors and assigns. Employee may not assign all or
any part of Employee's interest under this Agreement without the prior written
consent of Employer.
11. RECEIPT OF AGREEMENT. The parties hereto acknowledge that they have
each read this Agreement in its entirety and each hereby acknowledges receipt of
a fully executed copy thereof. A fully executed copy shall be an original for
all purposes and is a duplicate original.
12. CALIFORNIA LAW. This Agreement is to be governed by and construed
under the laws of the State of California, except to the extent that any federal
law regulating banks may apply.
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13. CAPTIONS AND SECTION HEADINGS. Captions and Section headings used
herein are for convenience only and are not a part of this Agreement and shall
not be used in construing it.
14. INVALID PROVISIONS. Should any part of this Agreement for any reason
be declared invalid, the validity and binding effect of any remaining portion
shall not be affected, and the remaining portion of this Agreement shall remain
in force and effect as if this Agreement had been executed with the invalid
provisions eliminated.
15. ENTIRE AGREEMENT. This Agreement contains the entire Agreement between
the parties with respect to the employment of Employee by Employer and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties. No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
16. WAIVER OF BREACH. The failure to enforce at any time any of the
provisions of this Agreement, or to require at any time performance by the other
party of any of the provisions hereof, shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement or
any part hereof or the right of either party thereafter to enforce each and
every provision in accordance with the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the day and year hereinabove set forth.
/s/ Xxxxxxx X. Xxxxx
---------------------------------------
XXXXXXX X. XXXXX
ELDORADO BANK
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Its: President & COO
-----------------------------------
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EXHIBIT A
WAIVER AND RELEASE AGREEMENT
This Waiver and Release Agreement (the "Waiver Agreement") is entered into
by and among Xxxxxxx X. Xxxxx ("Employee"), Eldorado Bank ("Bank"), and Eldorado
Bancorp, a California corporation ("Bancorp"), their officers, directors,
employees, agents, affiliates and subsidiaries (collectively, the "Company").
Terms not otherwise defined herein shall have the meanings ascribed to such
terms in the Agreement (as hereafter defined).
RECITALS
A. Employee and Bank have entered into an Employment Agreement effective
December 20, 1995 (the "Agreement").
B. A condition precedent to certain of Bank's obligations under the
Agreement is the execution of this Waiver Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties, intending to
be legally bound, agree and covenant as follows:
17. RELEASE.
17.1 In consideration for the execution of the Agreement, and the
agreements set forth therein, Employee agrees unconditionally and forever to
release and discharge the Company and its affiliated business entities, their
respective officers, directors, employees, representatives, attorneys, agents
and assigns from any and all claims, actions, causes of action, demands, rights
or damages of any kind or nature which Employee may now have, or ever have,
whether known or unknown, including any claims, causes of action or demands of
any nature arising out of or in any way relating to Employee's employment with,
or separation from, the Company on or before the date of execution of this
Waiver Agreement.
17.2 This release specifically includes, but is not limited to, any
claims for discrimination and/or violation of any statutes, rules, regulations
or ordinances, whether federal, state or local, including, but not limited to,
Title VII of the Civil Rights Act of 1964, as amended, age claims under the Age
Discrimination in Employment Act of 1967, as amended by the Older Workers
Benefits Protection Act of 1990, Section 1981 of Title 42 of the United States
Code, and the California Fair Employment and Housing Act.
17.3 Employee further agrees knowingly to waive the provisions and
protections of Section 1542 of the California Civil Code, which reads:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which, if known by him, must have
materially affected his settlement with the debtor.
18. REPRESENTATIONS OF EMPLOYEE.
18.1 Employee represents and agrees that, prior to the execution of
this Waiver Agreement, Employee has had the opportunity to discuss the terms of
this Waiver Agreement with legal counsel of Employee's choosing.
18.2 Employee affirms that no promise or inducement was made to cause
Employee to enter into this Waiver Agreement other than the execution of the
Agreement and the inducements provided therein. Employee further confirms that
Employee has not relied upon any other statement or representation by anyone
other than what is in this Waiver Agreement as a basis for Employee's agreement.
19. MISCELLANEOUS.
19.1 Except for the Agreement, this Waiver Agreement sets forth the
entire agreement between Employee and the Company, and shall be binding upon
both party's heirs, representatives and successors. This Waiver Agreement shall
be construed under the laws of the State of California, both procedurally and
substantively. Any and all disputes or claims arising out of, or in any way
related to, Employee's employment with, or separation from, the Company, as well
as any and all disputes or claims arising out of, or in any way related to, this
Waiver Agreement, including, without limitation, fraud in the inducement of this
Waiver Agreement, or relating to the general validity or enforceability of this
Waiver Agreement, shall be submitted to final and binding arbitration before an
arbitrator of the American Arbitration Association in Orange County, in
accordance with the rules of that body, and the prevailing party shall be
entitled to reasonable costs and attorneys' fees. Judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof. If
any portion of this Waiver Agreement is found to be illegal or unenforceable,
such action shall not affect the validity or enforceability of the remaining
paragraphs or subparagraphs of this Waiver Agreement.
19.2 Employee acknowledges that Employee has been advised that
Employee has twenty-one (21) days to consider this settlement, and that Employee
was informed that Employee has the right to consult with counsel regarding this
Waiver Agreement. To the extent Employee has taken less than twenty-one (21)
days to consider this Waiver Agreement, Employee acknowledges that Employee has
had sufficient time to consider the Waiver Agreement and to consult with
counsel, and that Employee does not desire additional time.
19.3 This Waiver Agreement is revocable by Employee for a period of
seven (7) days following Employee's execution of this Waiver Agreement. The
revocation by Employee of this Waiver Agreement must be in writing, must
specifically revoke this Waiver Agreement and must be received by the Company
prior to the eighth (8th) day following the execution of this Waiver Agreement
by Employee. This Waiver Agreement becomes effective, enforceable and
irrevocable on the eighth (8th) day following Employee's execution of the Waiver
Agreement.
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The undersigned agree to the terms of this Waiver Agreement and voluntarily
enter into it with the intent to be bound thereby.
Dated: _____________________, 199_ ______________________________
XXXXXXX X. XXXXX
Dated: _____________________, 199_ ELDORADO BANK
By:___________________________
Name:_________________________
Title:________________________
ELDORADO BANCORP
By:___________________________
Name:_________________________
Title:________________________
A-3
