EXHIBIT (10.26)
EXECUTIVE
This Agreement is made and entered into this 1 day of February 1999, by
and between Heritage Oaks Bank, a bank chartered under the laws of the State of
California (the "Employer"), and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual residing in the
State of California (hereinafter referred to as the "Executive").
RECITALS
WHEREAS, the Executive is an employee of the Employer and
is serving as its Executive Vice President - Chief Financial Officer.
WHEREAS, the Executive's experience and knowledge of the
affairs of the Employer and the banking industry are extensive and valuable;
WHEREAS, it is deemed to be in the best interest of the
Employer to provide the Executive with certain salary continuation benefits, on
the terms and conditions set forth herein, in order to reasonably induce the
Executive to remain in the Employer's employment; and
WHEREAS, the Executive and the Employer wish to specify in
writing the terms and conditions upon which this additional compensatory
incentive will be provided to the Executive or to the Executive's spouse or the
Executive's designated beneficiaries, as the case may be;
NOW, THEREFORE, in consideration of the services to be
performed in the future, as well as the mutual promises and covenants contained
herein, the Executive and the Employer agree as follows:
AGREEMENT
1. TERMS AND DEFINITIONS.
1.1 ADMINISTRATOR. The Employer shall be the
"Administrator" and, solely for the purposes of
ERISA, the "Fiduciary" of this Agreement where a
fiduciary is required by ERISA.
1.2. ANNUAL BENEFIT. The term "Annual Benefit" shall
mean the amount determined by first multiplying the
sum of Thirty Thousand Dollars
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($30,000) by the Applicable Percentage (defined
below), and by then subtracting from that amount
those additional as may be: (1) required under the
other provisions of this Agreement, including, but
not
limited to, Paragraphs 5 and 6 hereof; (ii) required by reason of
lawful order of any regulatory agency or body having jurisdiction over
the Employer; and (iii) required in order for the Employer to properly
comply with any and all applicable state and federal laws, including,
but not limited to income, employment and disability income tax laws
(e.g., FICA, FUTA, SDI).
1.3 APPLICABLE PERCENTAGE. The term "Applicable Percentage" shall mean that
percentage listed on Schedule "A" attached hereto which is adjacent to
the number of complete years (with a "year" being the performance of
personal services for or on behalf of he Employer for a period of 365
days) which have elapsed starting from the Effective date of this
Agreement and ending on the date payments are to first begin under the
terms of this Agreement. Notwithstanding the foregoing or the
percentages set forth on Schedule "A", but subject to all other terms
and conditions set forth herein, the "Applicable Percentage" shall be:
(i) subject to clause (ii) of this Paragraph 1.3, one hundred percent
(100%) in the event the Executive dies prior to Retirement as defined
in subparagraph 1. I I below; and (ii) notwithstanding the subclause
(i) of this Paragraph 1.3, zero percent (0%) the event the Executive
takes any action which prevents the Employer from collecting the
proceeds of any life insurance policy which the Employer may happen to
own at the time of the Executive's death and of which the Employer is
the designated beneficiary.
1.4 BENEFICIARY, Excepting the reference made at the end of Paragraphs 1.3
and 1. IO hereof, the term "beneficiary" or "designated beneficiary "
shall mean the person or persons whom the Executive shall designate in
a Vlid Beneficiary Designation, a copy of which is attached hereto as
Exhibit "B", to receive the benefits provided hereunder. A Beneficiary
Designate shall be valid only if it is in the form attached hereto and
made a part hereof and is received by the Administrator prior to the
Executive's death.
1.5 CHANGE IN Control. The term "Change in Control" shall mean, with
respect to the Employer or any corporation formed to act as a parent
or holding company of the Employer or its stock: (1) a change in
control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
in response to any other form or report to the regulatory agencies or
governmental authorities having jurisdiction over the Employer or any
stock exchange on which the Employer's shares are listed which requires
the reporting of a change in control; (ii) any merger, consolidation or
reorganization of the any sale lease employer in which the Employer
does not survive; (iii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in fair market value of fifty percent
(50%) of the total value of the
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assets of the Employer, reflected in the most recent balance sheet
of the Employer; (iv) a transaction whereby any "person" (as such
term is used in the Exchange Act or any individual, corporation,
partnership, trust or any other entity becomes the beneficial owner,
directly or indirect , or securitie's of the Employer representing
twenty-five (25%) or more of the combined voting power of the
Employer's then outstanding securities; or (v) a situation where, in
any one-year period, individuals who at the beginning of such period
constitute the Board of Directors of the Employer cease for any
reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Employer's
shareholders, of each new director is approved by a vote of at least
three-quarters (3/4) of the directors then still in office who were
directors at the beginning of the period.
1.6 THE CODE. The "Code" shall mean the Internal Revenue Code of 1986,
as amended (the "Code").
1.7 DISABILITY/DISABLED. The term "Disability" or "Disabled" shall have the
same meaning given such term in the principal disability insurance
policy covering the Executive, which is incorporated herein by
reference to the limited extent thereof In the event the Executive is
not covered by a disability policy containing a definition of
"Disability" or "Disabled," these terms shall mean an illness or
incapacity which, having continued for a period of one hundred and
eighty (I 80) consecutive days, thereafter prevents the Executive from
adequately performing the Executive's regular employment duties. The
determination of whether the Executive is Disabled shall be made by an
independent physician selected by mutual agreement of the parties.
1.8 EFFECTIVE DATE. The term "Effective Date" shall mean the date upon
which this Agreement was entered into by the parties, as first
written above.
1.9 ERISA. The term "ERISA" shall mean the Employee Retirement Income
I Security Act of 1974, as amended
1.10. LUMP SUM PAYOUT Amount. The term "Lump Sum Payout Amount" (also
referred to herein as the "LSPA") shall mean that dollar amount
determined by: (a) multiplying (i) the "Designated Dollar Amount"
listed on Schedule "C" corresponding to the year in which an event
occurs requiring payment of the LSPA to the Executive occurs under
this Agreement, by (ii) the "LSPA Percentage" listed on Schedule
corresponding to the year in which the event occurs requiring
payment of the LSPA to the Executive under this Agreement; and (b)
reducing this resulting amount as may be: (i) required under the
other provisions of this Agreement, including, but not limited to
Paragraph 4.2 (i.e., to take into account any previous Disability
payment which may have been paid under the terms of this Agreement),
Paragraph 5 and Paragraph 6 hereof, (ii) required by reason of the
lawful order of any regulatory agency or body having jurisdiction
over the Employer; and (iii) required in order for the Employer to
properly comply with any and all applicable state and federal laws,
including, but not limited to
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income, employment and disability income tax laws (e.g., FICA,
FUTA,- SDI), partnership, trust or any other entity) becomes the
beneficial owner, directly or indirectly, of securities of the
Employer representing twenty-five percent (25%) or more of the
combined voting power of the Employer's then outstanding securities-
or (v) a situation where, in any one-year period, individuals who at
the beginning of such period constitute the Board of Directors of
the Employer cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the
Employer's shareholders, of each new director is approved by a vote
of at least three quarters (3/4) of the directors then still in
office who were directors at the beginning of the period.
Notwithstanding the foregoing or the percentages set forth on Schedule "D but
subject to all other terms and conditions set forth herein, the "LSPA
Percentage" shall be zero percent (04b) in the event the Executive takes any
action which. prevents the Employer from collecting the proceeds of any life
insurance policy which the Employer may happen to own at the time of the
Executive's death and of which the Employer is the designated beneficiary.
1.11. RETIREMENT. The term "Retirement" or "Retires" shall refer to the date
on which, after the Executive attains sixty (60) years of age, the
Executive acknowledges in writing to Employer to be the last day he
will provide any significant personal services, whether as an employee
or independent consultant or contractor, to Employer or to, for, or on
behalf of, any other business entity conducting, performing or making
available to any person or entity banking or other financial services
of any kind. For purposes of this Agreement, the phrase "significant
personal services" shall mean more THAN ten (10) hours of personal
services rendered to one or more individuals or entitles in any thirty
(30) day period.
1.12 SURVIVING SPOUSE. The term "Surviving Spouse" shall mean the person, if
who shall be legally married to the Executive on the date of the
Executive's death.
1.3 TERMINATION FOR CAUSE. The term "Termination for Cause" shall
mean termination of the employment of the Executive by reason of
any of the following:
(A)A termination "for cause" as this term may be defined in any
written employment agreement entered into by and between the
Employer and the Executive;
(B)The willful breach of duty by the Executive in the course of
his employment;
(C)The habitual neglect by the Executive of his employment
responsibilities and duties;
(D)The Executive's deliberate violation of any state or federal
banking or securities laws, or of the Bylaws, rules, policies or
resolutions of the Employer, or of the rules
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or regulations of the: (i) The California Institute of Banking
(ii) Federal Deposit Insurance Corporation; (iii) Securities
and Exchange Commission; or (iv) any other regulatory agency
or governmental authority having jurisdiction over the
Employer;
(E)The determination by a state or federal banking agency or
other governmental authority having jurisdiction over the
Employer that the Executive is not suitable to act in the
capacity for which she is employed by the Employer;
(F)The Executive is convicted of any felony or a crime involving
moral turpitude or a fraudulent or dishonest act; or
(G)The Executive discloses without authority any secret or
confidential information not otherwise publicly available
concerning the Employer or takes any action which the Employer's
Board of Directors determines, in its sole discretion and subject
to good faith, fair dealing and reasonableness, constitutes
unfair competition with or induces any customer to breach any
contract with the Employer.
2. SCOPE, PURPOSE AND EFFECT.
2.1. CONTRACT OF EMPLOYMENT. Although this Agreement is intended to
provide in the employ of the Executive with an additional
incentive to remain Employer, this Agreement shall not be
deemed to constitute a contract of employment between the
Executive and the Employer nor shall any Provision of this
Agreement restrict or expand the right of the Employer to
terminate the Executive's employment. This Agreement shall
have no impact or effect upon any separate written Employment
Agreement which the Executive may have with the Employer, it
being the parties' intention and agreement that unless this
Agreement is specifically referenced in said Employment
Agreement (or any modification thereto), this Agreement (and
the Employer's obligations hereunder) shall stand separate and
apart and shall have no effect upon, nor be affected by, the
terms and provisions of said Employment Agreement.
2.2. FRINGE BENEFIT. The benefits provided by this Agreement are
granted by the Employer as a fringe benefit to the Executive and are
not a part of any salary reduction plan or any arrangement deferring a
bonus or a salary increase. The Executive has no option to take any
current payments or bonus in lieu of the benefits provided by this
Agreement.
31 PAYMENTS UPON OR AFTER RETIREMENT.
3.1. PAYMENTS UPON RETIREMENT. If the Executive shall remain in the
continuous employment of the Employer until attaining sixty
(60) of age, the Executive shall be entitled to be paid the
Annual Benefit, as defined
5
above, for a period of fifteen (I 5) years, with each
Annual Benefit amount to be paid in twelve (12) equal
monthly installments (paid on the first day of each month)
beginning with the month following the month in which the
Executive Retires or upon such later date as may be
mutually agreed upon by the Executive and the Employer in
advance of said Retirement date. At the Employer's sole and
absolute discretion. the Employer may increase the Annual
Benefit as and when the Employer determines the same to be
appropriate in order to reflect substantial change in the
cost of living. Notwithstanding anything contained herein
to the contrary, the Employer shall have no obligation
hereunder to make any such cost-of-living adjustment.
3.2. PAYMENTS IN THE EVENT, OF DEATH AFTER RETIREMENT. The Employer
agrees that if the Executive Retires, but shall die before
receiving all of the monthly payments to which he is entitled
hereunder, the Employer will continue to make such monthly
payments to the Executive's designated beneficiary for the
remaining period. If a valid Beneficiary Designation is not in
effect, then the remaining amounts due to the Executive under
the term of this Agreement shall be paid to the Executive's
Surviving spouse. If the Executive leaves no Surviving Spouse,
the remaining amounts due to the Executive under the terms of
this Agreement shall be paid to the duly qualified personal
representative, executor or administrator of the Executive's
estate.
4. PAYMENTS IN THE EVENT DEATH OR DISABILITY OCCURS PRIOR TO RETIREMENT
4.1.PAYMENTS IN THE EVENT OF DEATH PRIOR TO RETIREMENT. In the event the
Executive should die while actively employed by the Employer at any time
after the Effective Date of this Agreement, but prior to attaining sixty
(66) years of age or if the Executive chooses to work after attaining
sixty (60) years of age, but dies before Retirement, the Employer agrees
to pay the Annual Benefit to the Executive's designated beneficiary for a
period of fifteen (15) years, with each Annual Benefit amount to be paid
in twelve (12) equal monthly installments (paid on the first day of each
month), beginning with the month following the month in which the
Executive's death occurs. If a valid Beneficiary designation is not in
effect, then the remaining amounts due to the Executive under the terms
of this Agreement shall be paid to the Executive's Surviving Spouse in
the same manner. If the Executive leaves no Surviving Spouse, the
remaining amounts due to the Executive under the terms of this Agreement
shall be PAID to the duly qualified personal representative, executor or
administrator of the Executive's estate.
4.2. PAYMENTS IN THE EVENT OF PERMANENT DISABILITY PRIOR TO RETIREMENT.
In the event the Executive becomes Disabled while actively employed by
The Employer at any time after the date of this Agreement but prior to
Retirement, the Executive shall be entitled to be paid the Annual
Benefit, as defined above, for a period of fifteen (I 5)years, with
each Annual Benefit amount to be paid in twelve (12) equal monthly
installments paid on the first day of each month), beginning with the
month following
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the earlier of (1) the month in which the Executive formally retires
after reaching sixty (60) years of age, or (2) the date upon which
the Executive is no longer entitled to receive Disability benefits
under the Executive's principal Disability Insurance policy (or the
date of the Disability if no Disability policy exists), provided
that the Executive remains unable to return to and thereafter
fulfill the responsibilities associated with the employment position
held with The Employer prior to becoming Disabled by reason of such
Disability continuing. However, in the event the Executive's
Disability should cease and Executive is able to return to and
thereafter fulfill the responsibilities associated with the
employment position held with the Employer prior to becoming
Disabled, the Employer's obligation to make additional payments
under this Paragraph shall be suspended until such time as Executive
next becomes eligible to receive payments under the terms of this
Agreement. In the event the Employer's obligation to make additional
payments under this Paragraph is suspended as aforesaid, and the
Executive then becomes entitled to receive payments under the terms
of the Agreement, the aggregate amount paid prior to suspension
shall be treated, notwithstanding anything contained in this
Agreement to the contrary, as having satisfied the Employer's
payment obligations with respect to that number of initial monthly
payments as is equal to the aggregate amount previously paid out
under the terms of this Paragraph; provided, however, that the
Employer promptly begin making the remaining monthly payments
required under this Agreement to the Executive for as long as such
payments @Would otherwise be required after proper adjustment has
been made for the amounts previously paid to the Executive under
this Paragraph. For example, if the Executive receives $10,000
during a period of Disability, and the Executive returns to work
(such that future payments are suspended) and then becomes eligible
for the Retirement payout option described above (and is entitled to
receive $10,000 over the first twelve payments under such option),
the Employer shall be entitled to credit the prior payments as
having satisfied its obligation to make the first twelve payments
due to the Executive provided the Employer pays to the Executive, on
the first day of each successive month following the month in which
the Retirement occurs (as provided for above), the next monthly
payment amount required with respect to the payout option selected,
i.e., in this example, the amount to be paid as the first monthly
payment under the Retirement option would equal the amount payable
under the Retirement option for the thirteenth month (with the
second payment equaling the amount payable with respect to the
fourteenth month and so on), until such time as the Executive, etc.,
has received the 168 remaining payments due after making the
adjustment for payments made prior to suspension. In the event a
Lump Sum Payment Amount is to be paid under Paragraph 5, the SPA
shall be reduced as provided for in Paragraph 1. 10 above by the
aggregate amounts previously distributed to the Executive under the
terms of this Paragraph.
5. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED PRIOR TO RETIREMENT. As
indicated in Paragraph 2 above, the Employer reserves the right to terminate the
Executive's employment, with or without cause but subject to any written
employment agreement which may then exist, at any time prior to the Executive's
Retirement. In the event that the
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employment of the Executive shall be terminated, other than by reason of
Disability, Death or Retirement, prior to the Executive's attaining sixty
(60) years of age, then this Agreement shall terminate upon the date of such
termination of employment; provided, however, that the Executive shall be
entitled to the following benefits, which shall be paid in lieu of any other
payout options contained herein, depending. upon the circumstances
surrounding the Executive's termination:
5.1. TERMINATION WITHOUT CAUSE. If the Executive's employment is
terminated by the Employer without cause, the Executive shall be
entitled to be paid the Lump Sum Payment Amount, as defined above,
within ninety (90) days after the effective date of the Executive's
termination, or upon such later date as may be mutually agreed upon
by the Executive and the Employer in advance of the effective date of
the Executive's termination
5.2. VOLUNTARY TERMINATION BY THE EXECUTIVE. If the Executive's
employment is voluntarily terminated by the Executive, the Executive
shall be entitled to be paid the Lump Sum Payment Amount, as defined
above, within ninety (90) days after the effective date of the
Executive's termination, or upon such later date as may be mutually
agreed upon by the Executive and the Employer in advance of the
effective date of the Executive's termination.
5.3. TERMINATION FOR CAUSE. The Executive agrees that his employment
with the Employer is terminated "for cause," as defined in subparagraph
1. 13 of this Agreement, he forfeit any and all rights and benefits he
may have under the toughens of this Agreement and shall have no right to
be paid any of the amounts which would otherwise be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.
5.4. TERMINATION BY THE EMPLOYER ON ACCOUNT OF OR AFTER A CHANGE IN CONTROL.
In the event: (i) the executive's employment with the Employer is
terminated by the Employer in conjunction with, or by reason of, a
"change in control" (as defined in subparagraph 1.5 above); or (ii) by
reason of the. Employer's actions any adverse and material change
occurs in the scope of the Executive's position, responsibilities,
duties, salary, benefits, or location of employment after a "change in
control" (as defined in subparagraph 1.5) occurs or (iii) the Employer
causes an event to occur which reasonably constitutes or results in a
demotion, a significant diminution of responsibilities or authority, or
a constructive termination by forcing a resignation or otherwise) of
the Executive's employment after a "change in control." (as defined in
subparagraph 1.5) occurs, then the Executive shall be entitled to be
paid the Annual Benefit, as defined above, for a period of fifteen (I
5) years, with each Annual Benefit amount to be paid in twelve (12)
equal monthly installments paid on the first day of each month),
beginning with the month following the month in which the Executive is
terminated or the action referred to above occurs.
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6.ADDITIONAL LIMITATIONS ON THE AMOUNT OF THE ANNUAL BENEFIT. The Executive
acknowledges and agrees that the parties have entered into this Agreement based
Upon the certain financial and tax accounting assumptions. Accordingly with full
knowledge of the potential consequences the Executive agrees that,
notwithstanding anything contained herein to the contrary: (i) the amount of the
Annual Benefit or the SPA, as the case may be, shall be Limited to that amount
of the Annual Benefit or the SPA (determined without regard to this Paragraph 6)
which will be deductible by the Employer under the Code in the year in which
payment is to. be made to the Executive; (ii) the Annual Benefit or the SPA
amount shall be deemed to be the last payment made to the Executive and the
first for which an income tax deduction, if any, has been disallowed; and (iii)
any compensatory amounts for which a deductions is denied to the Employer shall,
at the Employer's elections, serve to first reduce the Employer's obligation to
pay the monthly Annual Benefit payments or the SPA to the Executive under the
terms of this Agreement. The Executive recognizes that, in this regard,
limitations on deductibility may be imposed under, but not limited to, Code
Section 280G. Consistent with the foregoing, and in the event that any payment
or benefit received or to be received by the Executive, whether payable pursuant
to the terms of this Agreement or any other plan, arrangement or agreement with
the Employer (together with the Annual Benefit or the SPA, (the "Total
Payments"), will not be deductible (in whole or in part) as a result of Code
Section 280G, the Annual Benefit or the SPA, as the case may be, shall be
reduced until no portion of the Total Payments is nondeductible as a result of
Section 28OG of the Code (or the Annual Benefit or SPA is reduced to zero (0)).
For purposes of this limitation:
(a) No portion of the Total Payments, the receipt or enjoyment of which the
Executive shall have effectively waived in writing prior to the date of payment
of a SPA or any future Annual Benefit payments, shall be taken into account;
(b) No portion of the Total Payments which, in the opinion of the tax counsel
selected by the Employer and acceptable to the Executive, does not constitute a
"parachute payment" within the meaning of Section 28OG of the Code shall be
taken into, account;
(c) Future Annual Benefit payments, or the SPA as the case may be, shall be
reduced--only to the extent necessary so that the Total Payments (other than
those referred to in clauses (a) or above in their entirety) constitute
reasonable compensation for services actually rendered within the meaning of
Section 28OG of the Code, in the opinion of tax counsel refined to in clause (b)
above; and
(d) The value of any noncash benefit or any deferred payment or benefit included
in the Total Payments shall be determined by the Employer's independent
auditor's in accordance with the principles of Section 28OG of the Code.
7. RIGHT TO DETERMINE FUNDING METHODS. The Employer reserves the right to
determine, in its sole and absolute discretion, whether, to what extent and by
what method, if any, to provide for the payment of the amounts which may be
payable to the Executive, the Executive's spouse or the Executive's
beneficiaries under the terms of this Agreement. In the
9
event that the Employer elects to fund this Agreement, in whole or in part,
through the use of life insurance or annuities, or both, the Employer shall
determine the ownership and beneficial interests of any such policy of life
insurance or annuity. The Employer further reserves the right, in its sole
and absolute discretion, to terminate any such policy, and any other device
used to fund its obligations under this Agreement, at any lime, in whole or,
in part. Consistent with Paragraph 9 below, neither the Executive, any right,
title or the Executive's spouse nor the beneficiaries shall have any right,
title or interest in or to any funding source or amount utilized by the
Employer pursuant to this Agreement, and any such funding source or amount
shall not constitute a security for the performance of the Employer's
obligations pursuant to this Agreement. In connection with the foregoing, the
Executive agrees to execute such documents and undergo such medical
examinations or tests which the Employer may request and which may be
reasonably necessary to facilitate any funding for this Agreement including,
without limitation, the Employer's acquisition of any policy of insurance or
annuity. Furthermore, a refusal by the Executive to consent to, participate
in and undergo any such medical examinations or tests shall result in the
immediate termination of this Agreement and the immediate forfeiture by the
Executive, the Executive's spouse and the Executive's beneficiaries of any
and all rights to payment hereunder. Notwithstanding anything contained
herein to the contrary, no interest shall accrue or be payable with respect
to any of the amounts payable under the terms of this Agreement.
8. CLAIMS PROCEDURE. The Employer shall, but only to the extent necessary to
comply with ERISA, be designated as the named fiduciary under this Agreement and
shall have authority to control and manage the operation and administration of
this Agreement. Consistent therewith, the Employer shall make all determinations
as to the rights to benefits under this Agreement. Any decision by the Employer
denying a claim by the Executive, the Executive's spouse, or the Executive's
beneficiary for benefits under this Agreement shall be stated in writing and
delivered or mailed, via registered or certified mail, to the Executive, the
Executive's spouse or the Executive's beneficiary, as the case may be. Such
decision shall set forth the specific reasons for the denial of a claim. In
addition, the Employer shall provide the Executive, the Executive's spouse or
the Executive's beneficiary with a reasonable opportunity for a full and fair
review of the decision denying such claim.
9. STATUS AS AN UNSECURED GENERAL CREDITOR. Notwithstanding anything contained
herein to the contrary: (i) neither the Executive, the Executive's spouse or the
Executive's beneficiary shall have any legal or equitable rights, interests or
claims in or to any Specific property or assets of the Employer; (ii) none of
the Employer's assets shall be held in or under any trust for the benefit of the
Executive, the Executive's spouse or the Executive's beneficiaries or held in
any way as security for the fulfillment of the obligations of the Employer under
this Agreement; (iii) all of the Employer's assets shall be and remain the
general unpledged and unrestricted assets of the Employer; (iv) the Employer's
obligation under this Agreement shall be that of an unfunded and unsecured
promise by the Employers to pay money in the future; and (v) the Executive, the
Executive's spouse and the Executive's beneficiaries shall be unsecured general
creditors with respect to any benefits which may be payable under the terms of
this Agreement.
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10. MISCELLANEOUS.
10.1 OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL. The Executive
acknowledges that he has been afforded the opportunity to consult with
independent counsel of his choosing regarding both the benefits granted
to him under the terms of this Agreement and the terms and conditions
which the Executive's right to these benefits. The Executive further
acknowledges that he has read, understands and consents to all of the
terms and conditions of this Agreement, and that he enters into this
Agreement with a full understanding of its terms and conditions.
10.2. ARBITRATION OF DISPUTES. All claims, disputes and other
matters in question arising out of or relating to this Agreement or
the breach or interpretation thereof, other than those matters
which are to be determined by the Employer in its sole and absolute
discretion, shall be resolved by. binding arbitration before a
representative member, selected by the mutual agreement of the
parties, of the Judicial Arbitration and Mediation Services, Inc.
("JAMS"), presently located at I I I Pine Suite, Suite 710, in
San Francisco, California. In the event JAMS is unable or
unwilling to conduct the arbitration provided for under THE terms
of this Paragraph, or has discontinued its business, the parties
agree that a. representative member, selected by the mutual
agreement of the parties, of the American. Arbitration Association
("AAA"), presently located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, shall conduct the binding Arbitration
referred to in this Paragraph. Notice of the demand for arbitration
shall be filed in writing with the other party to this Agreement
and with JAMS (or AAA, if necessary). In no event shall the demand
for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter
in question would be barred by the applicable statute of
limitations. The arbitration shall be subject to such rules of
procedure used or established by JAMS, or if there are NONE, the
rules of procedure used or established by AAA. Any award rendered
by JAMS or AAA shall be final and binding upon the parties, and as
applicable, their respective heirs, beneficiaries, legal
representatives, agents, successors and assigns, and may be entered
in any court having jurisdiction thereof. The obligation of the
parties to arbitrate pursuant to this clause shall be specifically
enforceable in accordance with, and shall be conducted consistently
with, the provisions of Title 9 of Part 3 of the California Code of
Civil Procedure. Any arbitration hereunder shall be conducted in
San Francisco, California, unless otherwise agreed to by the
parties.
10.3. Attorneys' FEES. In the event of any arbitration or
litigation concerning any controversy, claim or dispute between the
parties hereto, arising out of or relating to this Agreement or the
breach hereof, or the interpretation hereof, the prevailing party
shall be entitled to recover from the losing party reasonable
expenses, Attorney fees and costs incurred or collection of any
judgement or award rendered therein. The "prevailing party" means
the party determined by the arbitrator(s) or court, as the
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case may be, to have most nearly prevailed, even if such party did
not prevail in all matters, not necessarily the one in whose favor a
judgment is rendered.
10.4. NOTICE. Any notice required or permitted of either the Executive or the
Employer under this Agreement shall be deemed to have been duly given, if by
personal delivery, upon the date received by the party or its authorized
representation; if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via, U.S. first class mail, registered or certified postage
prepaid and return receipt requested, and addressed to the party at the
address given below for the receipt of notices, or such changed address as may
be requested in writing by a party.
If to the Employer: Heritage Oaks Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
If to the Executive: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ #▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10.5. ASSIGNMENT. Neither the Executive, the Executive's spouse nor any other
beneficiary under this Agreement shall have any power or right to transfer,
assign, anticipate, hypothecate, modify or otherwise encumber any part or all
of the amounts payable hereunder, nor, prior to payment in accordance with the
terms of this Agreement, shall any portion of such amounts be: (i) subject to
seizure by any creditor of any such beneficiary, by a proceeding at law or in
equity, for the payment of any debts, judgments, alimony or separate
maintenance obligations which may be owed by the Executive, the Executive's
spouse, or any designated beneficiary; or (ii) transferable by operation of
law in the event of bankruptcy, insolvency or otherwise. Any such attempted
assignment or transfer shall be void and shall terminate this Agreement, and
the Employer shall thereupon have no further liability hereunder.
10.6. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement shall be binding
upon and inure to the benefit of the Executive and the Employers and, as
applicable, their respective heirs, beneficiaries, legal representatives
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement.
Upon the occurrence of such event, the term "Employer" as used in this
Agreement shall be deemed to refer to such
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surviving or successor firm, person, entity of corporation.
10.7. NONWAIVER. The failure of either party to enforce at any time or
for any period of time any one or more of the terms or conditions of
this Agreement shall not be a waiver of such term(s) or condition(s)
of that party's right thereafter to enforce each and every term and
condition of this Agreement.
10.8. PARTIAL INVALIDITY. If any term, provision, covenant, or
condition of this Agreement is determined by an arbitrator or a
court, as the case maybe, to be invalid, void, or unenforceable,
such determination shall not render any other term, provision,
covenant or condition invalid, void or unenforceable, and the
Agreement shall remain in full force and effect notwithstanding
such partial invalidity.
10.9. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to
the subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect thereto. Each party to this
Agreement inducements, promises, or acknowledges that no other
representations, agreements, oral or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not set forth
herein, and that no other agreement, statement, Or Promise not contained
in this Agreement shall be valid or binding on either party.
10.10. MODIFICATIONS. Any modification of this Agreement shall be effective only
if it is in writing and signed by each party or such party's authorized
representative.
10.11 PARAGRAPH HEADINGS. The paragraph headings used in this Agreement are
included solely for the convenience of the parties and shall not affect or be
used in connection with the interpretation of this Agreement.
10.12. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.
10.13. GOVERNING LAW. The laws of the State of California, other than
those laws denominated choice of law rules, and, where applicable, the
rules and regulations of the: (i) Office of the California
Superintendent of Banks; (ii) Federal Deposit Insurance
13
Corporation; and (iii) Securities and Exchange Commission shall govern
the validity, interpretation, construction and effect of this Agreement.
IN WITNESS WTMREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Paso ▇▇▇▇▇▇,
San ▇▇▇▇ Obispo County, California.
THE EMPLOYER: THE EXECUTIVE:
HERITAGE OAKS BANK
By.
▇▇. ▇. ▇. ▇▇▇▇▇▇, Chairman ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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