<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 6, 1997
REGENCY BANCORP
(Exact name of registrant as specified in its charter)
California 33-82150 77-0378956
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
7060 N. Fresno, Fresno, California 93720
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (209) 438-2600
Not Applicable
(Former name or former address, if changed since last report).
Page 1 of 60 pages
The Exhibit Index is on Page 4.
<PAGE>
Item 5. OTHER EVENTS.
None
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
Not Applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not Applicable.
(c) EXHIBITS.
(99.1) Amended and Restated Executive Salary Continuation
Agreement Between Regency Bank and Steven F. Hertel
(99.2) Amended and Restated Executive Salary Continuation
Agreement Between Regency Bank and Robert J. Longatti
(99.3) Amended and Restated Executive Salary Continuation
Agreement Between Regency Bank and Steven R. Canfield
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REGENCY BANCORP
Date: October 6, 1997 /s/ Steven F. Hertel
-------------------------
Steven F. Hertel
President
3
<PAGE>
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
99.1 Amended and Restated Executive Salary Continuation
Agreement Between Regency Bank and Steven F. Hertel 5-23
99.2 Amended and Restated Executive Salary Continuation
Agreement Between Regency Bank and Robert J. Longatti 24-41
99.3 Amended and Restated Executive Salary Continuation
Agreement Between Regency Bank and Steven R. Canfield 42-60
4
<PAGE>
EXHIBIT 99.1
AMENDED AND RESTATED
EXECUTIVE SALARY CONTINUATION AGREEMENT
This Amended and Restated Executive Salary Continuation Agreement dated
September___, 1997, is made by and between Regency Bank, a bank chartered under
the laws of the State of California (the "Employer"), and Steven F. Hertel, an
individual residing in the State of California (hereinafter referred to as the
"Executive"), and amends and restates in its entirety that certain Executive
Salary Continuation Agreement between the Employer and the Executive dated
August 12, 1993 (the "Agreement").
R E C I T A L S
WHEREAS, the Executive is an employee of the Employer and is serving
as its President and Chief Executive 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 interests 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;
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;
WHEREAS, the Executive and the Employer desire to restate the
Agreement to include in one document, the Amendment dated September 21, 1995,
which revised the definition of "Change in Control", and further amend the
Agreement to (i) delete references to "Schedule B Annuity" in various provisions
of the Agreement and substitute the term "Annual Benefit" in lieu thereof, (ii)
delete Schedule B attached to the Agreement in its entirety, and (iii) re-
designate Schedule C as Schedule B and adjust all references thereto throughout
the Agreement; and
WHEREAS, it is the intent of the Employer and the Executive that the
Agreement shall remain in full force and effect from and after the date of the
Agreement with such amendments as are contained herein, and that the calculation
of the Applicable Percentage set forth in Schedule A shall continue to be based
upon such date of the Agreement.
-1-
<PAGE>
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:
-2-
<PAGE>
A G R E E M E N T
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 an annual
sum of One Hundred Thousand Dollars ($100,000.00) multiplied by the Applicable
Percentage (defined below) and then reduced to the extent: (i) required under
the other provisions of this Agreement, including, but not limited to,
Paragraphs 5, 7 and 8 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, 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 the 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) one hundred percent (100%) upon the occurrence of a
"change of control" as defined in subparagraph 1.5 below; and (ii)
notwithstanding subclause (i) of this Paragraph, zero percent (0%) 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.
1.4. BENEFICIARY. The term "beneficiary" or "designated beneficiary"
shall mean the person or persons whom the Executive shall designate in a valid
Beneficiary Designation, a copy of which is attached hereto as Exhibit "B," to
receive the benefits provided hereunder. A Beneficiary Designation 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 the
occurrence of any of the following events with respect to Employer (with the
term "Employer" being defined, when determining whether a "Change in Control"
has occurred, to include Regency Bank's current holding company, Regency
Bancorp, a California corporation, such that a "Change in Control" of Regency
Bancorp will be deemed to constitute a "Change in Control" of the Employer,
Regency Bank): (i) a change in control of a nature that would be required to be
-3-
<PAGE>
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
Employer in which the Employer does not survive; (iii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition (in one transaction or
a series of transactions) of any assets of the Employer having an aggregate fair
market value of fifty percent (50%) of the total value of the 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 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 anything else
contained herein to the contrary, there shall not be a "Change in Control" for
purposes of this Agreement if the event which would otherwise come within the
meaning of the term "Change in Control" involves the Employer's Employee Stock
Ownership Plan (the "ESOP") and the ESOP is the party which acquires "control"
or is the principal participant in the transaction constituting a "Change in
Control," as described above.
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 (180) consecutive days, 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. EARLY RETIREMENT DATE. The term "Early Retirement Date" shall
mean the Retirement (as defined below) of the Executive on a date which occurs
prior to the Executive attaining sixty (60) years of age but after the Executive
has attained fifty-five (55) years of age and has been employed by the Employer
for an aggregate of ten (10) years.
-4-
<PAGE>
1.9. EFFECTIVE DATE. The term "Effective Date" shall mean the date
upon which this Agreement was entered into by the parties, as first written
above.
1.10. ERISA. The term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
1.11. PLAN YEAR. The term "Plan Year" shall mean the Employer's
fiscal year.
1.12. RETIREMENT. The term "Retirement" or "Retires" shall refer
to the date which 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 entities in any thirty (30) day period.
1.13. SURVIVING SPOUSE. The term "Surviving Spouse" shall mean
the person, if any, who shall be legally married to the Executive on the date of
the Executive's death.
1.14. 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 or regulations of: (i) the Office of the
California Superintendent of Banks; (ii) the Federal Deposit Insurance
Corporation; or (iii) 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 he is employed by the
Employer;
(f) The Executive is convicted of any felony or a crime
involving
-5-
<PAGE>
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 the Executive with an additional incentive to remain in the employ of
the 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.
3. 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) years of age,
the Executive shall be entitled to be paid the Annual Benefit, as defined above,
in equal monthly installments, for a period of fifteen (15) years (One Hundred
Eighty (180) months), with each installment to be 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 a
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
One Hundred Eighty (180)
-6-
<PAGE>
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 (60)
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 in equal monthly installments,
for a period of fifteen (15) years (One Hundred Eighty (180) months). 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. Each installment shall be paid on the first day of
each month, beginning with the month following the month in which the
Executive's death occurs.
4.2. PAYMENTS IN THE EVENT OF 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: (i) solely for purpose of determining the duration of the Executive's
employment as may be required by this Agreement, continue to be treated during
such period of Disability as being gainfully employed by the Employer; and
(ii) be entitled to be paid the Annual Benefit, as defined above, in equal
monthly installments, for a period of fifteen (15) years (One Hundred Eighty
(180) months), with each installment to be paid on the first day of each month,
beginning with the month following the earlier of (1) the month in which the
Executive attains 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 and is, at such time, unable
to return to and thereafter fulfil the responsibilities associated with the
employment position held with the Employer prior to becoming Disabled by reason
of such Disability continuing. For purposes of this Paragraph, the Annual
Benefit amount shall be determined by reference to the earlier of the following
dates: (1) the first day of the month in which the Executive attains 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. Notwithstanding the foregoing, if the Executive chooses to elect either
the Retirement payout option set forth in Paragraph 3 hereof or the Early
Retirement payout option set forth in Paragraph 6 hereof, the Executive may
waive the
-7-
<PAGE>
payout provisions set forth in this subparagraph 4.2 and in lieu
thereof receive the Annual Benefit which the Executive would be entitled to
receive under the terms of Paragraphs 3 or 6, as the case may be, provided that
the Executive does, in fact, Retire from all employment responsibilities with
the Employer at the time of his executing this election.
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 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 as may be
applicable 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 Annual Benefit, as defined above, in equal monthly installments, for a
period of fifteen (15) years (One Hundred Eighty (180) months), with each
installment to be paid on the first day of each month, beginning with the month
following the month in which Executive is terminated without cause 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. It is acknowledged and
agreed by the Executive that the purpose of this Agreement is to assure the
Executive's continued employment with the Employer and that if the Executive
voluntarily terminates his employment with the Employer (other than by reason of
death, Disability or Retirement), then the Executive shall have willingly
forfeited any and all rights and benefits he may have under the terms of this
Agreement and that, furthermore, no amounts shall be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.
5.3. TERMINATION FOR CAUSE. The Executive agrees that if his
employment with the Employer is terminated "for cause," as defined in
subparagraph 1.14 of this Agreement, he shall forfeit any and all rights and
benefits he may have under the terms 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
-8-
<PAGE>
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, in equal monthly installments, for a period of
fifteen (15) years (One Hundred Eighty (180) months), with installments to be
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.
6. PAYMENTS IN THE EVENT THE EXECUTIVE ELECTS EARLY RETIREMENT. The
Executive shall have the right to elect to receive the Annual Benefit prior to
attaining sixty (60) years of age if he chooses to Retire on a date which
constitutes an Early Retirement Date as defined in subparagraph 1.8 above. In
the event the Executive elects to Retire on a date which constitutes an Early
Retirement Date, the Executive shall be entitled to be paid the Annual Benefit,
as defined above, in equal monthly installments, for a period of fifteen (15)
years (One Hundred Eighty (180) months), with each installment to be paid on the
first day of each month, beginning with the month following the month in which
the Early Retirement Date occurs.
7. 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 shall be limited to that amount of the Annual
Benefit (determined without regard to this Paragraph 7) 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 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 deduction is
denied to the Employer shall, at the Employer's election, serve to first reduce
the Employer's obligation to make the monthly Annual Benefit payments otherwise
due and payable 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, the "Total Payments"), will not be deductible
(in whole or in part) as a result of Code Section 280G, the Annual Benefit shall
be reduced until no portion of the Total Payments is nondeductible as a result
of Section 280G of the Code (or the Annual Benefit 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 any future
-9-
<PAGE>
Annual Benefit payments, shall be taken into account;
(b) No portion of the Total Payments shall be taken into account,
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 280G of the Code;
(c) Future Annual Benefit payments shall be reduced only to the
extent necessary so that the Total Payments (other than those referred to in
clauses (a) or (b) above in their entirety) constitute reasonable compensation
for services actually rendered within the meaning of Section 280G of the Code,
in the opinion of tax counsel referred to in clause (b) above; and
(d) The value of any non-cash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the Employer's
independent auditors in accordance with the principles of Section 280G of the
Code.
8. 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 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 time, in whole or in part. Consistent with
Paragraph 10 below, neither the Executive, the Executive's spouse nor the
Executive's 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 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.
9. 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
-10-
<PAGE>
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.
10. 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 Employer 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.
11. MISCELLANEOUS.
11.1. 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 may affect
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.
11.2. 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 Two Embarcadero
Center, Suite 1100, 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 417
Montgomery Street, in San Francisco, California, shall conduct the binding
arbitration referred to in this Paragraph. Notice of the
-11-
<PAGE>
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 Fresno, California, unless otherwise agreed to by the parties.
11.3. 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, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The "prevailing party" means the party determined by
the arbitrator(s) or court, as the 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.
11.4. 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 representative; 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: Regency Bank
P. O. Box 16279
Fresno, CA 93704
Attn: Chairman of the Board
If to the Executive: Mr. Steven F. Hertel
564 Chesapeake Circle
Fresno, CA 93720
11.5. ASSIGNMENT. Neither the Executive, the Executive's spouse,
nor any other
-12-
<PAGE>
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.
11.6. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement
shall be binding upon and inure to the benefit of the Executive and the Employer
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 surviving or successor firm,
person, entity or corporation.
11.7. 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) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.
11.8. PARTIAL INVALIDITY. If any term, provision, covenant, or
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, 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.
11.9. 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 acknowledges that no other representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding on either party.
11.10. 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.
-13-
<PAGE>
11.11. 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.
11.12. 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.
11.13. 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 Office of the California Superintendent of Banks
and the Federal Deposit Insurance Corporation, shall govern the validity,
interpretation, construction and effect of this Agreement.
IN WITNESS WHEREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Fresno, Fresno County,
California.
THE EMPLOYER: THE EXECUTIVE:
Regency Bank,
A California State Chartered Bank
By: /s/ David N. Price /s/ Steven F. Hertel
------------------------------- ------------------------
Vice Chairman of the Board Steven F. Hertel
-14-
<PAGE>
SCHEDULE A
NUMBER OF COMPLETE
YEARS WHICH HAVE ELAPSED APPLICABLE PERCENTAGE
------------------------ ---------------------
1. . . . . . . . . . . . . . . . . . . . 10.00%
2. . . . . . . . . . . . . . . . . . . . 20.00%
3. . . . . . . . . . . . . . . . . . . . 30.00%
4. . . . . . . . . . . . . . . . . . . . 40.00%
5. . . . . . . . . . . . . . . . . . . . 50.00%
6. . . . . . . . . . . . . . . . . . . . 60.00%
7. . . . . . . . . . . . . . . . . . . . 70.00%
8. . . . . . . . . . . . . . . . . . . . 80.00%
9. . . . . . . . . . . . . . . . . . . . 90.00%
10 . . . . . . . . . . . . . . . . . . . 100.00%
-15-
<PAGE>
SCHEDULE B
BENEFICIARY DESIGNATION
To the Administrator of the Regency Bank Amended and Restated Executive
Salary Continuation Agreement:
Pursuant to the provisions of my Amended and Restated Executive Salary
Continuation Agreement with Regency Bank, permitting the designation of a
beneficiary or beneficiaries by a participant, I hereby designate the following
persons and entities as primary and secondary beneficiaries of any benefit under
said Agreement payable by reason of my death:
PRIMARY BENEFICIARY:
564 E. Chesapeake
Susan E. Hertel Fresno, Ca. Spouse
- -------------------- ------------------- --------------------
Name Address Relationship
SECONDARY (CONTINGENT) BENEFICIARY:
Brian S. Hertel 1/2 Same Son
Bradley S. Hertel 1/2 Same Son
- --------------------- ------------------- ----------------------
Name Address Relationship
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.
The Administrator shall pay all sums payable under the Agreement by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Administrator shall pay all amounts in
accordance with the terms of my Amended and Restated Executive Salary
Continuation Agreement. In the event that a named beneficiary survives me and
dies prior to receiving the entire benefit payable under said Agreement, then
and in that event, the remaining unpaid benefit payable according to the terms
of my Amended and Restated Executive Salary Continuation Agreement shall be
payable to the personal representatives of the estate of said beneficiary who
survived me but died prior to receiving the total benefit provided by my Amended
and Restated Executive Salary Continuation Agreement.
Dated: September 23, 1997 /s/ Steven F. Hertel
--------------------------------
STEVEN F. HERTEL
-16-
<PAGE>
CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:
-------------------------------------
I, Susan E. Hertel, being the spouse of Steven F. Hertel, after being
afforded the opportunity to consult with independent counsel of my choosing, do
hereby acknowledge that I have read, agree and consent to the foregoing
Beneficiary Designation which relates to the Amended and Restated Executive
Salary Continuation Agreement entered into between Regency Bank and my spouse.
I understand that the above Beneficiary Designation may affect certain rights
which I may have in the benefits provided for under the terms of the Amended and
Restated Executive Salary Continuation Agreement and in which I may have a
marital property interest.
Dated: 9/23, 1997 /s/ Susan E. Hertel
- ------------------------ -------------------------------
Susan E. Hertel
-17-
<PAGE>
CERTIFICATE OF ACKNOWLEDGMENT
OF NOTARY PUBLIC
State of California )
) ss.
County of ________________ )
On ____________, 1997, before me, _______________, Notary Public, State of
California, personally appeared Steven F. Hertel and Susan E. Hertel,
/ / personally known to me - OR
/ / proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------------
Notary Public,
State of California
(Seal)
CAPACITY CLAIMED BY SIGNER:
/ / Individual(s) Signing for Oneself/Themselves
/ / Corporate Officer(s) ----------------- -----------------
Title Company
----------------- -----------------
Title Company
/ / Partner(s) --------------------------------------------------
Partnership
/ / Trustees(s)--------------------------------------------------
Trust
/ / Attorney-in-Fact ---------------------- -------------------
Principal Principal
<PAGE>
/ / Other ___________________________ ______________________________
Entity(ies) Represented Entity(ies) Represented
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Title or Type of Document:___________________ Date of Document:_______________
Number of Pages:___________________________
Signer(s) Other Than Named
Above:______________________________________________________________________
-19-
<PAGE>
EXHIBIT 99.2
AMENDED AND RESTATED
EXECUTIVE SALARY CONTINUATION AGREEMENT
This Amended and Restated Executive Salary Continuation Agreement dated
September ___, 1997, is made by and between Regency Bank, a bank chartered
under the laws of the State of California (the "Employer"), and Robert J.
Longatti, an individual residing in the State of California (hereinafter
referred to as the "Executive"), and amends and restates in its entirety that
certain Executive Salary Continuation Agreement between the Employer and the
Executive dated August 12, 1993 (the "Agreement").
R E C I T A L S
WHEREAS, the Executive is an employee of the Employer and is
serving as its Executive Vice President and Chief Credit 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 interests 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;
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;
WHEREAS, the Executive and the Employer desire to restate the
Agreement to include in one document the Amendment dated September 21, 1995,
which revised the definition of "Change in Control" and certain typographical
corrections; and
WHEREAS, it is the intent of the Employer and the Executive that
the Agreement shall remain in full force and effect from and after the date
of the Agreement with such amendments as are contained herein, and that the
calculation of the Applicable Percentage set forth in Schedule A shall
continue to be based upon such date of the Agreement.
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:
1
<PAGE>
A G R E E M E N T
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 an
annual sum of Sixty Thousand Dollars ($60,000.00) multiplied by the
Applicable Percentage (defined below) and then reduced to the extent: (i)
required under the other provisions of this Agreement, including, but not
limited to, Paragraphs 5, 7 and 8 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, 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 the 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 zero percent (0%) 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.
1.4. BENEFICIARY. The term "beneficiary" or "designated
beneficiary" shall mean the person or persons whom the Executive shall
designate in a valid Beneficiary Designation, a copy of which is attached
hereto as Exhibit "B," to receive the benefits provided hereunder. A
Beneficiary Designation 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
the occurrence of any of the following events with respect to Employer (with
the term "Employer" being defined, when determining whether a "Change in
Control" has occurred, to include Regency Bank's current holding company,
Regency Bancorp, a California corporation, such that a "Change in Control" of
Regency Bancorp will be deemed to constitute a "Change in Control" of the
Employer, Regency Bank): (i) 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 Employer
2
<PAGE>
in which the Employer does not survive; (iii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a
series of transactions) of any assets of the Employer having an aggregate
fair market value of fifty percent (50%) of the total value of the 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 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 anything else contained herein to the
contrary, there shall not be a "Change in Control" for purposes of this
Agreement if the event which would otherwise come within the meaning of the
term "Change in Control" involves the Employer's Employee Stock Ownership
Plan (the "ESOP") and the ESOP is the party which acquires "control" or is
the principal participant in the transaction constituting a "Change in
Control," as described above.
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 (180) consecutive days,
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. EARLY RETIREMENT DATE. The term "Early Retirement Date" shall
mean the Retirement (as defined below) of the Executive on a date which
occurs prior to the Executive attaining sixty-five (65) years of age but
after the Executive has attained sixty (60) years of age and has been
employed by the Employer for an aggregate of ten (10) years.
1.9. EFFECTIVE DATE. The term "Effective Date" shall mean the date
upon which this Agreement was entered into by the parties, as first written
above.
1.10. ERISA. The term "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.
1.11. PLAN YEAR. The term "Plan Year" shall mean the Employer's
fiscal year.
3
<PAGE>
1.12. RETIREMENT. The term "Retirement" or "Retires" shall
refer to the date which 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 entities in any thirty (30) day period.
1.13. SURVIVING SPOUSE. The term "Surviving Spouse" shall mean
the person, if any, who shall be legally married to the Executive on the date
of the Executive's death.
1.14. 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 or regulations of: (i) the
Office of the California Superintendent of Banks; (ii) the Federal Deposit
Insurance Corporation; or (iii) 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 he 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.
4
<PAGE>
2. SCOPE, PURPOSE AND EFFECT.
2.1. CONTRACT OF EMPLOYMENT. Although this Agreement is intended
to provide the Executive with an additional incentive to remain in the employ
of the 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.
3. 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-five (65)
years of age, the Executive shall be entitled to be paid the Annual Benefit,
as defined above, in equal monthly installments, for a period of fifteen (15)
years (One Hundred Eighty (180) months), with each installment to be paid on
the first 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 a 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 One Hundred Eighty (180) 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.
5
<PAGE>
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-five (65) years of age or if the Executive chooses to work after
attaining sixty-five (65) years of age, but dies before Retirement, the
Employer agrees to pay the Annual Benefit to the Executive's designated
beneficiary in equal monthly installments, for a period of fifteen (15) years
(One Hundred Eighty (180) months). 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. Each installment shall be paid on the first day of each
month, beginning with the month following the month in which the Executive's
death occurs.
4.2. PAYMENTS IN THE EVENT OF 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: (i) solely for purpose of determining the
duration of the Executive's employment as may be required by this Agreement,
continue to be treated during such period of Disability as being gainfully
employed by the Employer; and (ii) be entitled to be paid the Annual Benefit,
as defined above, in equal monthly installments, for a period of fifteen (15)
years (One Hundred Eighty (180) months), with each installment to be paid on
the first day of each month, beginning with month following the earlier of
(1) the month in which the Executive attains sixty-five (65) 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 and is, at such time, unable to return to and thereafter fulfil the
responsibilities associated with the employment position held with the
Employer prior to becoming Disabled by reason of such Disability continuing.
For purposes of this Paragraph, the Annual Benefit amount shall be determined
by reference to the earlier of the following dates: (1) the first day of the
month in which the Executive attains sixty-five (65) 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.
Notwithstanding the foregoing, if the Executive chooses to elect either the
Retirement payout option set forth in Paragraph 3 hereof or the Early
Retirement payout option set forth in Paragraph 6 hereof, the Executive may
waive the payout provisions set forth in this subparagraph 4.2 and in lieu
thereof receive the Annual Benefit which the Executive would be entitled to
receive under the terms of Paragraphs 3 or 6, as the case may be, provided
that the Executive does, in fact, Retire from all employment responsibilities
with the Employer at the time of his executing this election.
6
<PAGE>
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 employment of the
Executive shall be terminated, other than by reason of Disability, death or
Retirement, prior to the Executive's attaining sixty-five (65) 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 as may be applicable 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 Annual Benefit, as defined above, in equal monthly installments,
for a period of fifteen (15) years (One Hundred Eighty (180) months), with
each installment to be paid on the first day of each month, beginning with
the month following the month in which Executive is terminated without cause
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. It is acknowledged and
agreed by the Executive that the purpose of this Agreement is to assure the
Executive's continued employment with the Employer and that if the Executive
voluntarily terminates his employment with the Employer (other than by reason
of death, Disability or Retirement), then the Executive shall have willingly
forfeited any and all rights and benefits he may have under the terms of this
Agreement and that, furthermore, no amounts shall be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.
5.3. TERMINATION FOR CAUSE. The Executive agrees that if his
employment with the Employer is terminated "for cause," as defined in
subparagraph 1.14 of this Agreement, he shall forfeit any and all rights and
benefits he may have under the terms 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, in equal monthly
installments, for a period of fifteen (15) years (One Hundred Eighty (180)
months), with installments to be paid on the first day of each month,
beginning with
7
<PAGE>
the month following the month in which the Executive is terminated or the
action referred to above occurs.
6. PAYMENTS IN THE EVENT THE EXECUTIVE ELECTS EARLY RETIREMENT. The
Executive shall have the right to elect to receive the Annual Benefit prior
to attaining sixty-five (65) years of age if he chooses to Retire on a date
which constitutes an Early Retirement Date as defined in subparagraph 1.8
above. In the event the Executive elects to Retire on a date which
constitutes an Early Retirement Date, the Executive shall be entitled to be
paid the Annual Benefit, as defined above, in equal monthly installments, for
a period of fifteen (15) years (One Hundred Eighty (180) months), with each
installment to be paid on the first day of each month, beginning with the
month following the month in which the Early Retirement Date occurs.
7. 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 shall be limited to that amount of the
Annual Benefit (determined without regard to this Paragraph 7) 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 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 deduction is denied to the Employer shall, at the
Employer's election, serve to first reduce the Employer's obligation to make
the monthly Annual Benefit payments otherwise due and payable 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, the "Total Payments"), will not be deductible (in whole or in
part) as a result of Code Section 280G, the Annual Benefit shall be reduced
until no portion of the Total Payments is nondeductible as a result of
Section 280G of the Code (or the Annual Benefit 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 any future Annual Benefit payments, shall be taken into
account;
(b) No portion of the Total Payments shall be taken into account,
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 280G of the Code;
8
<PAGE>
(c) Future Annual Benefit payments shall be reduced only to the
extent necessary so that the Total Payments (other than those referred to in
clauses (a) or (b) above in their entirety) constitute reasonable
compensation for services actually rendered within the meaning of Section
280G of the Code, in the opinion of tax counsel referred to in clause (b)
above; and
(d) The value of any non-cash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the Employer's
independent auditors in accordance with the principles of Section 280G of the
Code.
8. 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 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 time, in whole or in part.
Consistent with Paragraph 10 below, neither the Executive, the Executive's
spouse nor the Executive's 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 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.
9. 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
<PAGE>
10. 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 Employer 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.
11. MISCELLANEOUS.
11.1. 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
may affect 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.
11.2. 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 Two Embarcadero
Center, Suite 1100, 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 417
Montgomery Street, in San Francisco, California, 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 Fresno,
10
<PAGE>
California, unless otherwise agreed to by the parties.
11.3. 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, attorneys' fees and costs incurred
in connection therewith or in the enforcement or collection of any judgment
or award rendered therein. The "prevailing party" means the party determined
by the arbitrator(s) or court, as the 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.
11.4. 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 representative; 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: Regency Bank
P. O. Box 16279
Fresno, CA 93704
Attn: Chairman of the Board
If to the Executive: Mr. Robert J. Longatti
30197 Titan Way
Coarsegold, CA 93614
11.5. 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.
11.6. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement
shall be binding upon and inure to the benefit of the Executive and the
Employer 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
11
<PAGE>
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 surviving or
successor firm, person, entity or corporation.
11.7. 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) or of
that party's right thereafter to enforce each and every term and condition of
this Agreement.
11.8. PARTIAL INVALIDITY. If any term, provision, covenant, or
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, 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.
11.9. 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 acknowledges that no other representations, inducements, promises,
or agreements, oral or otherwise, have been made by any party, or anyone
acting on behalf of any party, which are not set forth herein, and that no
other agreement, statement, or promise not contained in this Agreement shall
be valid or binding on either party.
11.10. 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.
11.11. 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.
11.12. 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.
11.13. 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 Office of the California Superintendent of Banks
and the Federal Deposit Insurance Corporation, shall govern the validity,
interpretation, construction and effect of this Agreement.
12
<PAGE>
IN WITNESS WHEREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Fresno, Fresno
County, California.
THE EMPLOYER: THE EXECUTIVE:
Regency Bank,
A California State Chartered Bank
By: /s/Steven F. Hertel /s/Robert J. Longatti
------------------------------ ------------------------------
Robert J. Longatti
____________________, Chairman
1GTD073
13
<PAGE>
SCHEDULE A
NUMBER OF COMPLETE
YEARS WHICH HAVE ELAPSED APPLICABLE PERCENTAGE
1. . . . . . . . . . . . . . . . 10.00%
2. . . . . . . . . . . . . . . . 20.00%
3. . . . . . . . . . . . . . . . 30.00%
4. . . . . . . . . . . . . . . . 40.00%
5. . . . . . . . . . . . . . . . 50.00%
6. . . . . . . . . . . . . . . . 60.00%
7. . . . . . . . . . . . . . . . 70.00%
8. . . . . . . . . . . . . . . . 80.00%
9. . . . . . . . . . . . . . . . 90.00%
10 . . . . . . . . . . . . . . . 100.00%
14
<PAGE>
SCHEDULE B
BENEFICIARY DESIGNATION
To the Administrator of the Regency Bank Amended and Restated Executive
Salary Continuation Agreement:
Pursuant to the provisions of my Amended and Restated Executive Salary
Continuation Agreement with Regency Bank, permitting the designation of a
beneficiary or beneficiaries by a participant, I hereby designate the
following persons and entities as primary and secondary beneficiaries of any
benefit under said Agreement payable by reason of my death:
PRIMARY BENEFICIARY:
Holly C. Longatti 30197 Titan Way spouse
- ------------------- ------------------------ ---------------------------
Name Address Coarsegold, Ca. Relationship
SECONDARY (CONTINGENT) BENEFICIARY:
1/2 To Adam R. Longatti
1.2 To Todd P. Longatti same sons
- ------------------- ------------------------ ---------------------------
Name Address Relationship
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.
The Administrator shall pay all sums payable under the Agreement by reason of
my death to the Primary Beneficiary, if he or she survives me, and if no
Primary Beneficiary shall survive me, then to the Secondary Beneficiary, and
if no named beneficiary survives me, then the Administrator shall pay all
amounts in accordance with the terms of my Amended and Restated Executive
Salary Continuation Agreement. In the event that a named beneficiary
survives me and dies prior to receiving the entire benefit payable under said
Agreement, then and in that event, the remaining unpaid benefit payable
according to the terms of my Amended and Restated Executive Salary
Continuation Agreement shall be payable to the personal representatives of
the estate of said beneficiary who survived me but died prior to receiving
the total benefit provided by my Amended and Restated Executive Salary
Continuation Agreement.
Dated: 9/26 , 1997 THE EXECUTIVE:
---------------------
--------------------------------
ROBERT J. LONGATTI
15
<PAGE>
CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:
I, Holly C. Longatti, being the spouse of Robert J. Longatti, after
being afforded the opportunity to consult with independent counsel of my
choosing, do hereby acknowledge that I have read, agree and consent to the
foregoing Beneficiary Designation which relates to the Amended and Restated
Executive Salary Continuation Agreement entered into between Regency Bank and
my spouse. I understand that the above Beneficiary Designation may affect
certain rights which I may have in the benefits provided for under the terms
of the Amended and Restated Executive Salary Continuation Agreement and in
which I may have a marital property interest.
Dated: Sept. 26 , 1997 /s/ Holly C. Longatti
---------------- --------------------------------
Holly C. Longatti
16
<PAGE>
CERTIFICATE OF ACKNOWLEDGMENT
OF NOTARY PUBLIC
State of California )
) ss.
County of ________________ )
On ____________, 1997, before me, _______________, Notary Public, State
of California, personally appeared Robert J. Longatti and Holly C. Longatti,
/ / personally known to me - OR
/ / proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------------------
Notary Public,
State of California
(Seal)
CAPACITY CLAIMED BY SIGNER:
/ / Individual(s) Signing for Oneself/Themselves
/ / Corporate Officer(s)_____________________ _______________________
Title Company
_____________________ _______________________
Title Company
/ / Partner(s)___________________________________________________________
Partnership
/ / Trustees(s)__________________________________________________________
Trust
/ / Attorney-in-Fact ______________________ ________________________
Principal Principal
<PAGE>
/ / Other ________________________________ ___________________________
Entity(ies) Represented Entity(ies) Represented
- ------------------------------------------------------------------------------
Title or Type of Document: ______________________ Date of Document:__________
Number of Pages: ________________ Signer(s) Other Than Named Above:__________
18
<PAGE>
EXHIBIT 99.3
AMENDED AND RESTATED
EXECUTIVE SALARY CONTINUATION AGREEMENT
This Amended and Restated Executive Salary Continuation Agreement dated
September ___, 1997, is made by and between Regency Bank, a bank chartered under
the laws of the State of California (the "Employer"), and Steven R. Canfield, an
individual residing in the State of California (hereinafter referred to as the
"Executive"), and amends and restates in its entirety that certain Executive
Salary Continuation Agreement between the Employer and the Executive dated
August 12, 1993 (the "Agreement").
R E C I T A L S
WHEREAS, the Executive is an employee of the Employer and is serving
as its Executive Vice President and 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 interests 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;
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;
WHEREAS, the Executive and the Employer desire to restate the
Agreement to include in one document the Amendment dated September 21, 1995,
which revised the definition of "Change in Control" and certain typographical
corrections; and
WHEREAS, it is the intent of the Employer and the Executive that the
Agreement shall remain in full force and effect from and after the date of the
Agreement with such amendments as are contained herein, and that the calculation
of the Applicable Percentage set forth in Schedule A shall continue to be based
upon such date of the Agreement.
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:
-1-
<PAGE>
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 an annual
sum of Sixty Thousand Dollars ($60,000.00) multiplied by the Applicable
Percentage (defined below) and then reduced to the extent: (i) required under
the other provisions of this Agreement, including, but not limited to,
Paragraphs 5, 7 and 8 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, 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 the 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 zero percent (0%) 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.
1.4. BENEFICIARY. The term "beneficiary" or "designated beneficiary"
shall mean the person or persons whom the Executive shall designate in a valid
Beneficiary Designation, a copy of which is attached hereto as Exhibit "B," to
receive the benefits provided hereunder. A Beneficiary Designation 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 the
occurrence of any of the following events with respect to Employer (with the
term "Employer" being defined, when determining whether a "Change in Control"
has occurred, to include Regency Bank's current holding company, Regency
Bancorp, a California corporation, such that a "Change in Control" of Regency
Bancorp will be deemed to constitute a "Change in Control" of the Employer,
Regency Bank): (i) 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
-2-
<PAGE>
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 Employer in which the Employer does not survive; (iii)
any sale, lease, exchange, mortgage, pledge, transfer or other disposition
(in one transaction or a series of transactions) of any assets of the
Employer having an aggregate fair market value of fifty percent (50%) of the
total value of the 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 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
anything else contained herein to the contrary, there shall not be a "Change
in Control" for purposes of this Agreement if the event which would otherwise
come within the meaning of the term "Change in Control" involves the
Employer's Employee Stock Ownership Plan (the "ESOP") and the ESOP is the
party which acquires "control" or is the principal participant in the
transaction constituting a "Change in Control," as described above.
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 (180) consecutive days, 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. EARLY RETIREMENT DATE. The term "Early Retirement Date" shall
mean the Retirement (as defined below) of the Executive on a date which occurs
prior to the Executive attaining sixty-five (65) years of age but after the
Executive has attained sixty (60) years of age and has been employed by the
Employer for an aggregate of ten (10) years.
1.9. EFFECTIVE DATE. The term "Effective Date" shall mean the date
upon which
-3-
<PAGE>
this Agreement was entered into by the parties, as first written above.
1.10. ERISA. The term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
1.11. PLAN YEAR. The term "Plan Year" shall mean the Employer's
fiscal year.
1.12. RETIREMENT. The term "Retirement" or "Retires" shall refer
to the date which 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 entities in any thirty (30) day period.
1.13. SURVIVING SPOUSE. The term "Surviving Spouse" shall mean the
person, if any, who shall be legally married to the Executive on the date of the
Executive's death.
1.14. 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 or regulations of: (i) the Office of the
California Superintendent of Banks; (ii) the Federal Deposit Insurance
Corporation; or (iii) 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 he 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
-4-
<PAGE>
(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 the Executive with an additional incentive to remain in the employ of
the 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.
3. 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-five (65) years of
age, the Executive shall be entitled to be paid the Annual Benefit, as defined
above, in equal monthly installments, for a period of fifteen (15) years (One
Hundred Eighty (180) months), with each installment to be 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 a 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
One Hundred Eighty (180) monthly payments to which he is entitled hereunder, the
Employer will continue to make such
-5-
<PAGE>
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-five
(65) years of age or if the Executive chooses to work after attaining sixty-five
(65) years of age, but dies before Retirement, the Employer agrees to pay the
Annual Benefit to the Executive's designated beneficiary in equal monthly
installments, for a period of fifteen (15) years (One Hundred Eighty (180)
months). 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. Each installment shall be paid on
the first day of each month, beginning with the month following the month in
which the Executive's death occurs.
4.2. PAYMENTS IN THE EVENT OF 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: (i) solely for purpose of determining the duration of the Executive's
employment as may be required by this Agreement, continue to be treated during
such period of Disability as being gainfully employed by the Employer; and
(ii) be entitled to be paid the Annual Benefit, as defined above, in equal
monthly installments, for a period of fifteen (15) years (One Hundred Eighty
(180) months), with each installment to be paid on the first day of each month,
beginning with the month following the earlier of (1) the month in which the
Executive attains sixty-five (65) 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 and is, at such time, unable
to return to and thereafter fulfil the responsibilities associated with the
employment position held with the Employer prior to becoming Disabled by reason
of such Disability continuing. For purposes of this Paragraph, the Annual
Benefit amount shall be determined by reference to the earlier of the following
dates: (1) the first day of the month in which the Executive attains sixty-five
(65) 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. Notwithstanding the foregoing, if the Executive
chooses to elect either the Retirement payout option set forth in Paragraph 3
hereof or the Early Retirement payout option set forth in Paragraph 6 hereof,
the Executive may waive the payout provisions set forth in this subparagraph 4.2
and in lieu thereof
-6-
<PAGE>
receive the Annual Benefit which the Executive would be entitled to receive
under the terms of Paragraphs 3 or 6, as the case may be, provided that the
Executive does, in fact, Retire from all employment responsibilities with the
Employer at the time of his executing this election.
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 employment of the Executive shall be
terminated, other than by reason of Disability, death or Retirement, prior to
the Executive's attaining sixty-five (65) 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 as may
be applicable 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 Annual Benefit, as defined above, in equal monthly installments, for a
period of fifteen (15) years (One Hundred Eighty (180) months), with each
installment to be paid on the first day of each month, beginning with the month
following the month in which Executive is terminated without cause 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. It is acknowledged and
agreed by the Executive that the purpose of this Agreement is to assure the
Executive's continued employment with the Employer and that if the Executive
voluntarily terminates his employment with the Employer (other than by reason of
death, Disability or Retirement), then the Executive shall have willingly
forfeited any and all rights and benefits he may have under the terms of this
Agreement and that, furthermore, no amounts shall be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.
5.3. TERMINATION FOR CAUSE. The Executive agrees that if his
employment with the Employer is terminated "for cause," as defined in
subparagraph 1.14 of this Agreement, he shall forfeit any and all rights and
benefits he may have under the terms 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.
-7-
<PAGE>
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, in equal monthly installments, for a period of
fifteen (15) years (One Hundred Eighty (180) months), with installments to be
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.
6. PAYMENTS IN THE EVENT THE EXECUTIVE ELECTS EARLY RETIREMENT. The
Executive shall have the right to elect to receive the Annual Benefit prior to
attaining sixty-five (65) years of age if he chooses to Retire on a date which
constitutes an Early Retirement Date as defined in subparagraph 1.8 above. In
the event the Executive elects to Retire on a date which constitutes an Early
Retirement Date, the Executive shall be entitled to be paid the Annual Benefit,
as defined above, in equal monthly installments, for a period of fifteen (15)
years (One Hundred Eighty (180) months), with each installment to be paid on the
first day of each month, beginning with the month following the month in which
the Early Retirement Date occurs.
-8-
<PAGE>
7. 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 shall be limited to that amount of the Annual
Benefit (determined without regard to this Paragraph 7) 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 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 deduction is
denied to the Employer shall, at the Employer's election, serve to first reduce
the Employer's obligation to make the monthly Annual Benefit payments otherwise
due and payable 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, the "Total Payments"), will not be deductible
(in whole or in part) as a result of Code Section 280G, the Annual Benefit shall
be reduced until no portion of the Total Payments is nondeductible as a result
of Section 280G of the Code (or the Annual Benefit 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 any future Annual Benefit payments, shall be taken into account;
-9-
<PAGE>
(b) No portion of the Total Payments shall be taken into account,
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 280G of the Code;
(c) Future Annual Benefit payments shall be reduced only to the
extent necessary so that the Total Payments (other than those referred to in
clauses (a) or (b) above in their entirety) constitute reasonable compensation
for services actually rendered within the meaning of Section 280G of the Code,
in the opinion of tax counsel referred to in clause (b) above; and
(d) The value of any non-cash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the Employer's
independent auditors in accordance with the principles of Section 280G of the
Code.
8. 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 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 time, in whole or in part. Consistent with
Paragraph 10 below, neither the Executive, the Executive's spouse nor the
Executive's 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 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.
9. 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
-10-
<PAGE>
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.
10. 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 Employer 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.
11. MISCELLANEOUS.
11.1. 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 may affect
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.
11.2. 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 Two Embarcadero
Center, Suite 1100, 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 417
Montgomery Street, in San Francisco, California, 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
-11-
<PAGE>
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 Fresno, California, unless
otherwise agreed to by the parties.
11.3. 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, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The "prevailing party" means the party determined by
the arbitrator(s) or court, as the 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.
11.4. 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 representative; 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: Regency Bank
P. O. Box 16279
Fresno, CA 93704
Attn: Chairman of the Board
If to the Executive: Mr. Steven R. Canfield
3597 West Loma Linda
Fresno, CA 93711
-12-
<PAGE>
11.5. 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.
11.6. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement
shall be binding upon and inure to the benefit of the Executive and the Employer
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 surviving or successor firm,
person, entity or corporation.
11.7. 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) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.
11.8. PARTIAL INVALIDITY. If any term, provision, covenant, or
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, 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.
11.9. 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 acknowledges that no other representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding on either party.
11.10. MODIFICATIONS. Any modification of this Agreement shall be
effective only
-13-
<PAGE>
if it is in writing and signed by each party or such party's authorized
representative.
11.11. 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.
11.12. 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.
11.13. 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 Office of the California Superintendent of Banks
and the Federal Deposit Insurance Corporation, shall govern the validity,
interpretation, construction and effect of this Agreement.
IN WITNESS WHEREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Fresno, Fresno County,
California.
THE EMPLOYER: THE EXECUTIVE:
Regency Bank,
A California State Chartered Bank
By: /s/ Steven F. Hertel /s/ Steven R. Canfield
--------------------------------- ------------------------------
Steven R. Canfield
-----------------------, Chairman
-14-
<PAGE>
SCHEDULE A
NUMBER OF COMPLETE
YEARS WHICH HAVE ELAPSED APPLICABLE PERCENTAGE
------------------------ ---------------------
1. . . . . . . . . . . . . . . . 10.00%
2. . . . . . . . . . . . . . . . 20.00%
3. . . . . . . . . . . . . . . . 30.00%
4. . . . . . . . . . . . . . . . 40.00%
5. . . . . . . . . . . . . . . . 50.00%
6. . . . . . . . . . . . . . . . 60.00%
7. . . . . . . . . . . . . . . . 70.00%
8. . . . . . . . . . . . . . . . 80.00%
9. . . . . . . . . . . . . . . . 90.00%
10 . . . . . . . . . . . . . . . 100.00%
-15-
<PAGE>
SCHEDULE B
BENEFICIARY DESIGNATION
To the Administrator of the Regency Bank Amended and Restated Executive
Salary Continuation Agreement:
Pursuant to the provisions of my Amended and Restated Executive Salary
Continuation Agreement with Regency Bank, permitting the designation of a
beneficiary or beneficiaries by a participant, I hereby designate the following
persons and entities as primary and secondary beneficiaries of any benefit under
said Agreement payable by reason of my death:
PRIMARY BENEFICIARY:
JAQUIE CANFIELD 3597 LOMA LINDA FRESNO, CA SPOUSE
- ----------------------------- --------------------------- ------------------
Name Address Relationship
SECONDARY (CONTINGENT) BENEFICIARY:
- ----------------------------- --------------------------- ------------------
Name Address Relationship
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.
The Administrator shall pay all sums payable under the Agreement by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Administrator shall pay all amounts in
accordance with the terms of my Amended and Restated Executive Salary
Continuation Agreement. In the event that a named beneficiary survives me and
dies prior to receiving the entire benefit payable under said Agreement, then
and in that event, the remaining unpaid benefit payable according to the terms
of my Amended and Restated Executive Salary Continuation Agreement shall be
payable to the personal representatives of the estate of said beneficiary who
survived me but died prior to receiving the total benefit provided by my Amended
and Restated Executive Salary Continuation Agreement.
Dated: SEPT. 30 , 1997 THE EXECUTIVE:
----------------------
/s/ STEVEN R. CANFIELD
----------------------------------------
STEVEN R. CANFIELD
-16-
<PAGE>
CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:
I, Jacquie Canfield, being the spouse of Steven R. Canfield, after being
afforded the opportunity to consult with independent counsel of my choosing, do
hereby acknowledge that I have read, agree and consent to the foregoing
Beneficiary Designation which relates to the Amended and Restated Executive
Salary Continuation Agreement entered into between Regency Bank and my spouse.
I understand that the above Beneficiary Designation may affect certain rights
which I may have in the benefits provided for under the terms of the Amended and
Restated Executive Salary Continuation Agreement and in which I may have a
marital property interest.
Dated: Sept. 30 , 1997
--------------------- /s/ Jacquie Canfield
--------------------------------------
Jacquie Canfield
-17-
<PAGE>
CERTIFICATE OF ACKNOWLEDGMENT
OF NOTARY PUBLIC
State of California )
) ss.
County of )
-------------------
On , 1997, before me, , Notary Public, State of
------------ ---------------
California, personally appeared Steven R. Canfield and Jacquie Canfield,
/ / personally known to me - OR
/ / proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by 2his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------------------
Notary Public,
State of California
[Seal]
CAPACITY CLAIMED BY SIGNER:
/ / Individual(s) Signing for Oneself/Themselves
/ / Corporate Officer(s)
------------------------ -------------------------
Title Company
------------------------ -------------------------
Title Company
/ / Partner(s)
----------------------------------------------------------------
Partnership
/ / Trustees(s)
----------------------------------------------------------------
Trust
/ / Attorney-in-Fact
----------------------------- ------------------------
Principal Principal
-18-
<PAGE>
/ / Other ---------------------------- --------------------------------------
Entity(ies) Represented Entity(ies) Represented
- -------------------------------------------------------------------------------
Title or Type of Document: Date of Document:
------------------------ -----------
Number of Pages: Signer(s) Other Than Named Above:
------- -----------------------
-19-
