Exhibit
10(ii)A(1)
EMPLOYMENT
CONTRACT
THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made as of the 1st day of
January 2008, between MONTEREY COUNTY BANK, a California
corporation ( Bank”), and CHARLES T. CHRIETZBERG, JR.
(“Executive”)
W I T N
E S S E T H
WHEREAS, Executive has served as the Chairman
and Chief Executive Officer of Bank since 1987 with distinction,
leading the Bank to a “Super Premier Performing” rating
each year since 2003; and
WHEREAS, the latest Employment Agreement
between Executive and Bank expires as of December 31, 2007;
and
WHEREAS, Bank desires that Executive continue
to be employed as Bank’s Chairman, President and Chief
Executive Officer, and to document the terms of such employment;
and
WHEREAS, Executive is willing to be employed as
Bank’s Chairman, President and Chief Executive Officer under
the terms and conditions herein stated.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter contained, and other good and
valuable consideration, it is hereby agreed by and between the
parties hereto as follows:
A.
TERM OF EMPLOYMENT
1. Term. Bank hereby
agrees to continue to employ Executive, and Executive hereby
accepts employment with Bank, for the period of three
(3) years, commencing on January 1, 2008, subject
however, to prior termination of this Agreement as hereinafter
provided (the “Term”). When used herein,
“Term” shall refer to the entire period of employment
of Executive by Bank hereunder commencing January 1, 2008 (the
“Effective Date”), whether for the period provided
above, or whether terminated earlier as hereinafter
provided.
B.
DUTIES OF EXECUTIVE
1. Duties. Executive
shall perform the duties of Chairman of the Board, President and
Chief Executive Officer of Bank, subject to the powers by law
vested in the Board of Directors of Bank and in
Bank’s shareholders, and shall serve as a Director of Bank if
elected by the shareholders. During the Term, Executive shall
perform exclusively the services herein contemplated to be
performed by Executive with due care, faithfully, diligently, to
the best of Executive’s ability and in compliance with all
applicable laws, policies adopted by the Board of Directors, and
Bank’s Articles of Incorporation and Bylaws.
2. Exclusivity .
Executive shall devote Executive’s entire productive time,
ability and attention to the business of Bank during the Term.
Executive shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person,
firm or corporation, whether for compensation or otherwise, without
prior consent evidenced by a resolution duly adopted by the Board
of Directors of the Bank, or the Executive Committee thereof.
Notwithstanding the foregoing, Executive may make investments of a
passive nature in any business or venture, provided however, that
such business or venture is neither in competition or
conflict,
3. Uniqueness
of Executive’s Services . The Executive hereby
represents that the services to be performed by him under the terms
of this contract are of a special, unique, unusual, extraordinary,
and intellectual character, which give them a peculiar value, the
loss of which cannot be reasonably or adequately compensated in
damages in an action at law. The Executive therefore expressly
agrees that the Bank, in addition to any other rights or remedies
which the Bank may possess, shall be entitled to injunctive and
other equitable relief to prevent a breach of this contract by the
Executive.
4. Physical
Examination . Executive shall take an annual physical
examination during each year during the Term of this contract. Said
physical examination(s) shall be conducted at the expense of
the Bank.
C.
COMPENSATION
1. Salary . For
Executive’s services hereunder, Bank shall pay or cause to be
paid as annual gross base salary to Executive the amount of not
less than $300,000 during each of the years of the Term, beginning
with the Effective Date. Executive shall also, so long as he serves
on the Board of Directors, be entitled to director’s fees on
the same basis as paid to outside directors, if the Board of
Directors does not exclude him from such directors fees. The
Board of Directors shall also, from time to time, and at least once
each calendar year grant such additional “merit”
increases, if any, in the base salary as are determined after
review to be appropriate in the discretion of the Board of
Directors. Executive’s salary shall be payable in equal
installments in conformity with Bank’s normal payroll periods
as in effect from time to time.
D.
EXECUTIVE BENEFITS
1. Vacation .
Executive shall be entitled to a vacation leave of four
(4) weeks during each year of the Term, of which two
(2) weeks must be taken consecutively in each calendar
year. Executive shall be entitled to vacation pay, in lieu of
up to two (2) weeks of vacation during each calendar year,
with the consent of the Board of Directors.
2. Automobile
Allowance . During the term hereunder, Bank shall provide
Executive, for Executive’s sole use, a suitable
full—size automobile, or if the Executive desires to use his
own automobile, Bank shall pay Executive a comparable auto
allowance (not less than $750 per month) as determined by the Board
of Directors. Bank shall pay all operating expenses of any nature
whatsoever with regard to such automobile. Executive shall
use reasonable efforts to furnish to Bank substantially adequate
records and other documentary evidence required by federal and
state statutes and regulations issued by the
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appropriate
taxing authorities substantiating the extent to which such payments
are deductible business expenses of Bank and not deductible
additional compensation to Executive. Bank shall also
procure, pay for and maintain in force adequate insurance coverage
for such automobile. Bank and Executive agree that the value of
Executive’s personal use of the automobile is twenty (20%) of
the annual cost of the automobile lease, repairs, and gasoline
which shall be treated for tax purposes as additional compensation
to Executive, subject to appropriate withholding.
3. Group Medical and
Life Insurance Benefits . Bank shall provide for Executive, at
Bank’s expense to the extent permitted by Bank policy,
participation in a comprehensive major medical, dental, and optical
plan, with accident benefits, equivalent to either (i) the
maximum available from time to time under the California Bankers
Association Group Insurance Program for an employee of
Executive’s salary level; or (ii) the benefits under an
insurance program adopted on a non—discriminatory basis for
the employees of the Bank generally. Life insurance benefits
shall be provided to Executive, at Bank’s expense to the
extent not prohibited by Bank policy during the term hereof in an
amount not less than $200,000, with Executive to designate
beneficiary thereunder.
4. Salary
Continuation Plan . Bank shall provide for Executive a
Salary Continuation Plan that provides for payments of $90,000 per
year, for Mr. Chrietzberg’s lifetime, if he remains with
the Bank until normal retirement, commencing age 65.
The Salary Continuation Plan shall provide the following with
regard to the division of death proceeds should
Mr. Chrietzberg die before his sixty-fifth (65 th )
birthday; his beneficiary(ies) shall be entitled to an amount equal
to $2,940,000 or the net at risk insurance portion of the proceeds,
whichever amount is less. The net at risk insurance portion
is the total proceeds less the cash value of the policy.
Should Mr. Chrietzberg die on or subsequent to his sixty-fifth
(65 th ) birthday, his beneficiary(ies) shall be
entitled to an amount equal to $1,000,000 plus the present value of
the remaining retirement benefits due to Mr. Chrietzberg or
the net at risk insurance portion of the proceeds, whichever is
less, and the Bank shall be entitled to the remainder of such
proceeds.
5. Bonus . For
the calendar year 2008, and for each full calendar year of the Term
completed by Executive pursuant to this Agreement, he shall be
entitled to an Incentive Bonus determined in accordance with this
paragraph. The Incentive Bonus shall equal the lesser of
(i) $300,000, or (ii) the sum of the ROA Bonus and the
ROE Bonus, determined in accordance with the
Exhibit D-4. This bonus shall be payable in
January of the year following completion of the year on which
it is based, or as soon thereafter as is practical after the
Bank’s certified public accountants have delivered their
report on the Bank’s condition and results of operations for
the year.
6. Sick Leave
. Executive shall be entitled to days of paid sick leave in
accordance with Bank policy.
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E.
BUSINESS EXPENSES AND REIMBURSEMENT .
1.
Business Expenses . Executive shall be entitled to
reimbursement by Bank for any ordinary and necessary business
expenses incurred by Executive in the performance of
Executive’s duties and in acting for Bank during the
Term. Types of expenses qualifying for such reimbursement
shall be determined by the Board of Directors. Executive shall
furnish to 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
payments as deductible business expenses of Bank and not as
deductible compensation to Executive; provided, however, that
reimbursement of such expenses shall not be dependent on proving
deductibility of such expenses for tax purposes if such expenses
are otherwise determined by the Board of Directors, in its sole
discretion, to be appropriate.
F.
TERMINATION .
1.
Termination With Cause . Except as otherwise provided
herein, this Agreement may be terminated by Bank, at Bank’s
option with notice to Executive, upon the occurrence of any of the
following events:
(a)
A material breach by Executive of any of the terms or provisions of
this Agreement;
(b)
Executive is convicted of illegal activity by a court of competent
jurisdiction or pleads guilty to or nolo contendere to, illegal
activity, which activity materially adversely affects Bank’s
reputation in the community or which evidences the lack of
Executive’s fitness or ability to perform Executive’s
duties, as determined by the Board of Directors in good faith;
or
(c)
Executive has committed any illegal or dishonest act which would
cause termination of coverage under Bank’s Bankers Blanket
Bond as to Employee, as distinguished from termination of coverage
as to Bank as a whole; or
(d)
Executive materially fails to perfo
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