exv10w19



 



EXHIBIT 10.19


EMPLOYMENT AGREEMENT



     This Employment Agreement (the “Agreement”) is entered into effective
March 1, 2004, by and between IndyMac Bank, F.S.B. (“Employer”) and Raymond
Matsumoto (“Officer”).


     1.     Term. Employer agrees to employ Officer and Officer agrees to serve
Employer and its affiliates, in accordance with the terms and conditions of
this Agreement, for a period of three (3) years, commencing on the date first
set forth above, unless Officer’s employment is earlier terminated as herein
provided.


     2.     Position, Duties and Responsibilities. Officer shall serve as an
Executive Vice President of Employer, or of one of Employer’s affiliated
companies, as determined by Employer. Officer agrees to devote Officer’s
full-time best efforts to the business and affairs of Employer and its
affiliates, to perform such executive and managerial duties as may be assigned
to Officer, and to diligently promote the business, affairs and interests of
Employer and its affiliates. If so requested by Employer, Officer agrees to
serve concurrently, and without additional compensation, as an officer of both
Employer and of one or more of Employer’s affiliates, including its
subsidiaries.


     3.     Outside Affiliations. During the term of this Agreement, Officer shall
not compete, either directly or indirectly, with the business of Employer or
its affiliates. Except as otherwise provided in this Agreement, Officer may
make and manage personal business investments of Officer’s choice and may serve
in any capacity with any civic, educational or charitable organization, or with
any governmental entity or trade association, provided that such activities do
not interfere with or conflict with Officer’s duties under this Agreement.
Officer may not sit on the board of directors of any civic, educational or
charitable organization without first obtaining Employer’s written consent.


     4.     Compensation and Benefits. In consideration of the performance of
Officer’s duties under this Agreement, Employer or its affiliates shall provide
to Officer the compensation set forth below. All compensation paid to Officer
by Employer or by any of its affiliates shall be aggregated in determining
whether Officer has received the benefits described herein, but without
prejudice to the allocation of costs among the entities to which Officer
renders services under this Agreement.


          4.1 Base Salary. Employer shall pay to Officer a base salary at the
annual rate set forth in Appendix A. Officer’s base salary shall be payable in
equal installments no less frequently than every month. Employer may, in its
sole discretion, increase Officer’s base salary during the term of this
Agreement, but Employer will not decrease Officer’s base salary below the
amount set forth in Appendix A.



          4.2 Incentive Compensation. For each calendar year during the term of
this Agreement, Employer shall pay to Officer an incentive compensation award
in an amount to be determined pursuant to the then-applicable Annual Incentive
Plan set forth in Appendix A. The terms of the Annual Incentive Plan shall be agreed upon
by Employer and Officer during the first




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quarter of each new calendar year
during the term of this Agreement. Any incentive compensation award payable to
Officer pursuant to the Annual Incentive Plan shall be paid no later than
thirty (30) days after completion and publication of the applicable audited
financial statements for the relevant calendar year. Except as otherwise
provided herein, any incentive compensation award described in the Annual
Incentive Plan, and Officer’s base salary to the extent that the incentive
compensation award is a percentage of Officer’s base salary, shall be prorated
to the extent that Officer is employed for less than twelve (12) full months
during the relevant calendar year.



          4.3 Stock Options and Restricted Stock. During the term of this
Agreement, Employer’s public company affiliate, IndyMac Bancorp, Inc., or any
successor public company (“Public Company”), may grant to Officer stock options
and/or restricted stock for such number of shares of the Public Company’s
common stock as the Compensation Committee of the Board of Directors of the
Public Company (“Compensation Committee”) in its sole discretion determines,
taking into account Officer’s and the Public Company’s performance and the
competitive practices then prevailing regarding the granting of stock options.
Subject to the foregoing, it is anticipated that the number of shares in
respect of each annual stock option and/or restricted stock grant, if any,
shall be comparable to the number of shares granted to officers of Employer at
a level similar to Officer’s level. The stock options and/or restricted stock
herein described shall be granted at the same time as the Public Company grants
stock options and/or restricted stock to its other officers.



          All stock options and restricted stock granted herein: (i) shall be
granted pursuant to the Public Company’s current stock option plan, or such
other stock option plan or plans as may come into effect during the term of
this Agreement, (ii) shall be priced and shall vest in accordance with the
terms set by the Compensation Committee or as otherwise set forth in this
Agreement, and (iii) shall be subject to such other reasonable terms and
conditions as may be determined by the Compensation Committee and set forth in
the agreement or other document evidencing the award.



          The effect of Officer’s termination on the vesting of any stock options or
restricted stock granted under this Agreement is described in Section 5.2. In
the event that vested options held by Officer immediately after such
termination represent shares of common stock in an amount equal to or greater
than 500,000, then the maximum period for the exercise of any options shall be
twelve (12) months. In the event that vested options held by Officer
immediately after such termination represent shares of common stock in an
amount equal to or greater than 100,000 but less than 500,000, then the maximum
period for the exercise of any options shall be six (6) months. In the event
that vested options held by Officer immediately after such termination
represent shares of common stock in an amount less than 100,000, then the
maximum period for their exercise shall be three (3) months.


          4.4 Additional Benefits. Officer shall be entitled to paid vacation,
subject to Employer’s vacation policies in effect from time to time. Officer
shall also be entitled to participate in Employer’s life and medical insurance
plans, and in any stock purchase, executive compensation, pension,
profit-sharing, deferred compensation, or other benefit or bonus plans that are
offered to Employer’s employees generally, or to officers of Employer at
a level similar to Officer’s level, subject to the terms and conditions,
including any applicable eligibility




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requirements, of any such plan. This
Agreement shall not affect or otherwise modify the provisions of any other
compensation, retirement or other benefit program or plan of Employer.


     5.     Termination of Employment. This Agreement, the compensation and benefits
provided under this Agreement, and Officer’s employment with Employer, are
terminable as herein provided.


          5.1 Grounds for Termination. Employer may, in its sole and absolute
discretion, terminate this Agreement and Officer’s employment on the following
grounds:



               5.1.1 Disability. In the event of Officer’s inability to perform his or
her duties (with or without reasonable accommodation) because of illness,
injury or similar incapacity for four (4) consecutive calendar months, or for
shorter periods aggregating eighty (80) or more business days in any twelve
(12)-month period (“Disability”), this Agreement and Officer’s employment may
be terminated by Employer by giving Notice of Termination as provided in
Section 9.1.



               5.1.2 Death. In the event of Officer’s death during the term of this
Agreement (“Death”), this Agreement and Officer’s employment shall immediately
and automatically terminate.



               5.1.3 Cause. Employer may terminate this Agreement and Officer’s
employment by giving Notice of Termination at any time for cause. “Cause”
means any act or omission to act by Officer which constitutes, in the sole
discretion of Employer, (i) a material breach of this Agreement that is
committed in bad faith or without reasonable belief that such act or omission
is in the best interests of Employer, (ii) Officer’s breach of the terms of any
promissory note executed by the Officer for any loan to the Officer made by
Employer pursuant to the Employer’s Loan Plan, including a failure to meet a
margin call, (iii) negligence or misconduct resulting in a material loss to
Employer, (iv) gross negligence, (v) an intentional and material failure to
perform Officer’s assigned duties, (vi) fraud, theft or dishonesty, (vii)
willful violation of any law, rule or regulation of a governmental authority,
other than traffic violations, (viii) regular alcohol or drug abuse, (ix) such
other conduct as is reasonably likely to cause Employer public disgrace or
disrepute, or (x) entry of an order by any state or federal regulatory agency
either removing Officer from Officer’s position with Employer or its affiliates
or prohibiting Officer from participating in the conduct of the affairs of
Employer or any of its affiliates.



               5.1.4 Poor Performance. Employer may terminate this Agreement and
Officer’s employment by giving Notice of Termination at any time for poor
performance. “Poor Performance” means a failure of Officer to properly meet,
in the sole discretion of Employer, the duties and responsibilities of
Officer’s position in a competent fashion.



               5.1.5 No Cause. Employer may, in its sole and absolute discretion,
terminate this Agreement and Officer’s employment by giving Notice of
Termination at any
time for no reason, or for any reason whatsoever other than Death,
Disability, Cause or Poor Performance (“No Cause”).




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               5.1.6 Resignation. Should Officer voluntarily resign Officer’s
employment, either by giving Notice of Termination during the term of this
Agreement or otherwise (“Resignation”), Officer’s employment shall terminate
immediately, unless Officer and Employer mutually agree on a later effective
date of termination.



          5.2 Benefits Upon Termination.



               5.2.1 Disability. Regardless of Officer’s position or years of service
with Employer or its affiliates, in the event that Officer’s employment
terminates by reason of Disability, as defined in Section 5.1.1, Officer shall
be entitled to receive (i) all accrued but unpaid vacation benefits as of the
Termination Date, as defined in Section 9.1, (ii) any other benefits already
vested as of the Termination Date under any of Employer’s applicable stock
option, pension, bonus or other similar plans in which Officer participated
immediately prior to termination (“Vested Benefits”), (iii) the immediate
vesting, to the extent not otherwise vested, of all outstanding stock options
or similar awards previously granted to Officer under Section 4.3, and (iv)
Officer’s incentive compensation award for the year in which Officer became
disabled, prorated to the Termination Date. Officer shall also be entitled to
receive the following benefits for a period of time commencing from the
Termination Date and continuing for the number of months remaining in the term
of this Agreement, or until Officer’s death, whichever first occurs: (v)
continuation of Officer’s base salary, reduced by 50%, minus the amount of any
cash payments due to Officer under the terms of Employer’s disability insurance
or other disability benefit plan funded by Employer or Employer’s tax-qualified
Defined Benefit Pension Plan, all subject to Section 5.2.8, and (vi)
continuation of benefits substantially equivalent to the life, disability and
medical insurance policies maintained by Employer on behalf of Officer and
Officer’s spouse and dependents, if any, immediately prior to the Notice of
Termination, but then only to the extent that Officer is not entitled to
comparable benefits from other employment.



               5.2.2 Death. Regardless of Officer’s position or years of service with
Employer or its affiliates, in the event of Officer’s Death, as defined in
Section 5.1.2, Employer shall pay to such person or persons as Officer shall
have designated in writing or, in the absence of such a designation, to
Officer’s estate, (i) all accrued but unpaid vacation benefits as of the date
of Death, (ii) any Vested Benefits, (iii) to the extent not otherwise vested,
all outstanding stock options or similar awards previously granted to Officer,
which will vest immediately upon Officer’s Death, and (iv) Officer’s incentive
compensation award for the year in which Death occurs, prorated to date of
Death. Employer shall also, within forty-five (45) days following Officer’s
Death, pay to Officer’s designee or to Officer’s estate an amount equal to two
times Officer’s last annual base salary. Employer shall also, for a period of
twelve (12) months following the date of Officer’s Death, pay the cost of any
continued coverage under Employer’s group medical insurance plan for the
benefit of Officer’s spouse and dependents, if any, should they elect continued
coverage under COBRA, provided they were covered under the plan immediately
prior to Officer’s Death.



               5.2.3 Cause. Regardless of Officer’s position or years of service with
Employer or its affiliates, in the event of Officer’s termination for Cause, as
defined in Section 5.1.3, Officer shall be entitled to payment of Officer’s
base salary through the Termination Date, to any accrued but unpaid vacation
benefits, and to any other Vested Benefits, but to no other payments or
benefits whatsoever.




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               5.2.4 Poor Performance. In the event of Officer’s termination for Poor
Performance, as defined in Section 5.1.4, the benefits payable to Officer shall
depend upon Officer’s position and years of continuous service to Employer or
its affiliates. If Officer had five (5) or fewer years of continuous service
as of the Termination Date, Officer shall be entitled to payment of Officer’s
base salary through the Termination Date, and to continuation of Officer’s base
salary, reduced by 50%, for the lesser of one year or the number of months
remaining in the term of this Agreement as of the Termination Date, subject to
Section 5.2.8.



               If Officer had more than five (5) years of continuous service as of the
Termination Date, or if Officer is a director, officer or principal stockholder
of Employer or of any of its affiliates as described in Section 16(a) of the
Exchange Act (“Section 16 Employee”), Officer shall be entitled to payment of
Officer’s base salary through the Termination Date, and to continuation of
Officer’s base salary for the lesser of one year or the number of months
remaining in the term of this Agreement as of the Termination Date, subject to
Section 5.2.8, and to the additional benefit described in Section 5.2.9, if
allowed by law.



               Regardless of Officer’s position or years of service, Officer shall also
be entitled to any accrued but unpaid vacation benefits, to any other Vested
Benefits, and to Officer’s incentive compensation award for the year in which
Officer was terminated, prorated to the Termination Date, but to no other
payments or benefits whatsoever.



               5.2.5 No Cause. In the event Officer’s employment is terminated for No
Cause, as defined in Section 5.1.5, the benefits payable to Officer shall
depend upon Officer’s position and years of continuous service to Employer or
its affiliates. If Officer had five (5) or fewer years of continuous service
as of the Termination Date, Officer shall be entitled to payment of Officer’s
base salary through the Termination Date, and to continuation of Officer’s base
salary for the lesser of one year or the number of months remaining in the term
of this Agreement as of the Termination Date, subject to Section 5.2.8.



               If Officer had more than five (5) years of continuous service as of the
Termination Date, or if Officer is a Section 16 Employee, Officer shall be
entitled to payment of Officer’s base salary through the Termination Date, to
continuation of Officer’s base salary, increased by 100%, for the lesser of one
year or the number of months remaining in the term of this Agreement as of the
Termination Date, subject to Section 5.2.8, and to the additional benefit
described in Section 5.2.9, if allowed by law.



               Regardless of Officer’s position or years of service, Officer shall also
be entitled to any accrued but unpaid vacation benefits, to any other Vested
Benefits, to Officer’s incentive compensation award for the year in which
Officer was terminated, prorated
to the Termination Date, and to the immediate vesting, to the extent not
otherwise vested, of all outstanding stock options or similar awards previously
granted to Officer under Section 4.3, but only to the extent that any such
outstanding stock options or similar awards would, by their terms, vest within
one (1) year of the Termination Date. In addition, Officer shall be entitled,
for a period of twelve (12) months following the Termination Date, to
continuation of benefits substantially equivalent to the life, disability and
medical insurance policies maintained by Employer on behalf of Officer and
Officer’s spouse and dependents, if any, immediately prior to




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the Notice of
Termination, but only to the extent that Officer is not entitled to comparable
benefits from other employment.


               5.2.6 Resignation. In the event of Officer’s Resignation, as defined in
Section 5.1.6, Officer shall be entitled to payment of Officer’s base salary
through the Termination Date, to any accrued but unpaid vacation benefits, and
to any other Vested Benefits, but to no other payments or benefits whatsoever.



               5.2.7 Change in Control. As used herein, a “Change in Control” shall be
deemed to have occurred if any person or entity other than IndyMac Bank Corp.,
Inc. becomes the beneficial owner, as defined in Rule 13d-3 under the Exchange
Act, of more than 50% of the combined voting power of the outstanding stock of
Employer, or acquires all or substantially all of the assets of Employer.



               If a Change in Control should occur during the term of this Agreement, and
should Officer’s employment be terminated within one (1) year following the
Change in Control (i) by reason of Officer’s Disability or Death, or (ii)
either for No Cause or because this Agreement expires and is not renewed by
Employer or its successor on terms that are substantially comparable to the
terms of this Agreement, then all outstanding stock options or similar awards
previously granted to Officer under Section 4.3 that have not already vested
shall vest on the Termination Date.



               If a Change in Control should occur during the term of this Agreement, and
should Officer’s employment continue without termination beyond the first
anniversary of the Change in Control, then all outstanding stock options or
similar awards previously granted to Officer under Section 4.3 that have not
already vested shall vest upon the first anniversary of the Change in Control.



               If a Change in Control should occur during the term of this Agreement, and
should Officer’s employment be terminated within two (2) years following the
Change in Control either for No Cause or because this Agreement expires and is
not renewed by Employer or its successor on terms that are substantially
comparable to the terms of this Agreement, then Officer shall be entitled, in
addition to the foregoing and in lieu of any other benefits described elsewhere
in this Agreement, to (i) any accrued but unpaid vacation benefits, (ii) any
other Vested Benefits, (iii) payment of Officer’s base salary through the
Termination Date, (iv) continuation of Officer’s base salary, increased by
100%, for a period of twelve (12) months following the Termination Date, (v)
Officer’s incentive compensation award, without proration, for the year in
which Officer was terminated, also increased by 100%, (vi) the additional
benefit described in Section 5.2.9, if allowed by law, and (vii) continuation,
for a period of twelve (12) months following the Termination Date, of benefits
substantially equivalent to the life, disability and medical insurance
policies maintained by Employer on behalf of Officer and Officer’s spouse and
dependents, if any, immediately prior to the Notice of Termination, but only to
the extent that Officer is not entitled to comparable benefits from other
employment.



               5.2.8 Other Employment. Employer’s obligation to pay salary continuation
benefits to Officer in the event of Officer’s termination for Disability, Poor
Performance or No Cause shall immediately cease in the event that Officer
obtains employment





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for compensation (whether as an employee, independent
contractor, consultant or otherwise) with any person or entity.


               5.2.9 Excise Tax. In the event it should be determined that any payment
or distribution by Employer as the result of Officer’s termination due to Poor
Performance or No Cause would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code, the affected payments or distributions shall
include gross-up for any excise taxes due under Section 280G of the Code or
similar “golden parachute” provisions, plus any excise, income, or payroll
taxes owed on the excise payment amount. In order to be eligible for this
benefit, Officer must have had more than five (5) years of continuous service
to Employer or its affiliates as of the Termination Date, or must be a Section
16 Employee. If the law prohibits any form of the foregoing benefit, then
Employer and Officer understand and agree that this Section 5.2.9 is of no
effect.



               5.2.10 Release of Claims. Employer’s obligation to pay any salary
continuation, benefits continuation or other non-vested benefits in the event
of the termination of Officer’s employment due to Disability, Poor Performance
or No Cause, as defined in Sections 5.1.1, 5.1.4 and 5.1.5, is expressly
conditional upon Officer first executing a general release of all claims or
causes of action, whether known or unknown, that Officer may have or hold
against Employer including, but not limited to, any claims for breach of
contract, for employment discrimination or harassment, for wrongful termination
or for other tortious conduct in connection with Officer’s employment or its
termination. Such release agreement shall be prepared by Employer, and shall
include an express waiver by Officer of California Civil Code section 1542.



     6.     No Solicitation, Non-Competition and Confidentiality. In order to
receive and retain the salary continuation, benefits continuation or other
non-vested benefits payable to Officer in the event of termination by reason of
Disability, Poor Performance or No Cause, as defined in Sections 5.1.1, 5.1.4
and 5.1.5, Officer agrees to the following:


          6.1 Non-Competition. During employment and for a period of one (1) year
after termination of employment, Officer shall not engage in any business,
whether as an employee, consultant, partner, principal, agent, representative
or stock holder (other than as a holder of less than one percent (1%) equity
interest), or in any other corporate or representative capacity, with any other
business that is engaged in any activity that competes with the business of
Employer or its affiliates, as conducted as of the date of the termination of
Officer’s employment.



          6.2 No Solicitation. During employment and for a period of one (1) year
after termination of employment, Officer shall not:



               6.2.1 Solicit, or cause to be solicited, any customers of Employer or its
affiliates for purposes of promoting or selling any products or services
competitive with those of Employer or its affiliates;





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               6.2.2 Solicit business from, or perform services for, any company or other
business entity which at any time during the two (2) year period immediately
preceding Officer’s termination of employment with Employer was a client of
Employer or its affiliates; or



               6.2.3 Solicit for employment, offer, or cause to be offered employment,
either on a full time, part-time or consulting basis, to any person who was
employed by Employer or its affiliates on the date Officer’s employment
terminated, unless Officer shall have received the prior written consent of
Employer.



          6.3 Confidentiality. Officer hereby acknowledges and agrees that Employer
and its affiliates have developed and own valuable information related to their
business, personnel and customers including, but not limited to, concepts,
ideas, customer lists, business lists, business and strategic plans, financial
data, accounting procedures, secondary marketing and hedging models, trade
secrets, computer programs and plans, and information related to officers,
directors, employees and agents. Officer hereby agrees that all such
information, and all codes, concepts, copies and forms relating to such
information, Employer’s plans and intentions with respect thereto, and any
information provided by Employer or its affiliates to Officer with respect to
any of the foregoing, shall be considered “Confidential Information” for the
purpose of this Agreement. Officer acknowledges and agrees that all such
Confidential Information is a valuable asset of Employer, and if developed by
Officer, is developed by Officer in the course of Officer’s employment with
Employer, and is the sole property of Employer. Officer agrees that Officer
will not divulge or otherwise disclose, directly or indirectly, any
Confidential Information concerning the business or policies of Employer or any
of its affiliates which Officer may have learned as a result of Officer’s
employment during the term of this Agreement or prior thereto as an employee,
officer or director of or consultant to Employer or any of its affiliates,
except to the extent such use or disclosure is (i) necessary or appropriate to
the performance of this Agreement and in furtherance of Employer’s best
interests, (ii) required by applicable law or in response to a lawful inquiry
from a governmental or regulatory authority, (iii) lawfully obtainable from
other sources, or (iv) authorized by Employer.



          6.4 Reimbursement. If any part of this Section 6 is challenged by Officer and
is determined to be invalid or unenforceable for any reason by a court of
competent jurisdiction, then Officer and Employer agree that these covenants
shall be of no effect, that Officer shall immediately return to Employer the
salary continuation, benefits continuation or other non-vested compensation
described in Section 5.2 that has been paid to Officer after termination of
Officer’s employment, and that Officer shall not be entitled to any further
sums from Employer.



     7.     Reimbursement of Business Expenses. During the term of this Agreement,
Employer shall promptly reimburse to Officer all business expenses reasonably
incurred by Officer in the performance of Officer’s duties under this Agreement
to the extent that such expenditures meet Internal Revenue Code requirements
for deductibility by Employer for federal income tax purposes, or are otherwise
in compliance with the rules and policies of Employer and are substantiated by
Officer in accordance with applicable requirements of the Code and Treasury
Regulations, and the applicable rules and policies of Employer.


     8.     Indemnity. To the extent permitted by applicable law and by Employer’s
articles, bylaws or other governing instruments, Employer shall defend and
indemnify Officer and hold Officer harmless for any acts or decisions made by
Officer in good faith and while


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performing approved services for Employer or
its affiliates, and Employer shall use reasonable efforts to obtain coverage
for Officer under liability insurance policies then in effect which cover the
other officers or directors of Employer.


     9.     Miscellaneous.


          9.1 Notice of Termination and Termination Date. Any termination of this
Agreement by Employer or by Officer (including any Resignation) shall be
communicated by a written Notice of Termination to the other party, stating the
specific termination provision in this Agreement relied upon, if any, and
setting forth in reasonable detail the facts and circumstances, if applicable,
claimed to provide a basis for termination. The effective date of termination
(“Termination Date”) shall be (i) the date specified in the Notice of
Termination, or (ii) in the event of Officer’s Death, the date of Death, or
(iii) in the event of Officer’s resignation without providing Notice of
Termination, Officer’s last day of employment, or (iv) in the event of a Change
in Control, either the date specified in the Notice of Termination or the last
day of the term of this Agreement should same not be renewed on substantially
comparable terms within two (2) years following the Change in Control.



          9.2 Successorship. This Agreement shall inure to the benefit of and shall
be binding upon Employer, its successors and assigns. This Agreement may not
be assigned without the prior written consent of the parties, other than in
connection with a merger or sale of Employer or the sale of substantially all
the assets of Employer, or similar transaction. Notwithstanding the foregoing,
Employer may, without Officer’s consent, assign, whether by assignment
agreement, merger, operation of law or otherwise, this Agreement to the Public
Company or to any successor or affiliate of Employer or the Public Company,
subject to such assignee’s express assumption of all obligations of Employer
hereunder. The failure of any successor to or assignee of the Employer’s
business and/or assets in such transaction to expressly assume all obligations
of Employer hereunder shall be deemed a termination for No Cause, pursuant to
Section 5.1.5.



          9.3 Notices. Any notices provided for in this Agreement shall be sent to
Employer at its corporate headquarters, Attention: General Counsel, with a copy
to the Human Resources department at the same address, or to such other address
as Employer may from time to time in writing designate, and to Officer at such
address as Officer may from time to time in writing designate (or Officer’s
business address of record in the absence of such designation). All notices
shall be deemed to have been given two (2) business days after
they have been deposited as certified mail, return receipt requested,
postage paid and properly addressed to the designated address of the party to
receive the notices.



          9.4 Entire Agreement. This instrument contains the entire agreement of
the parties relating to the subject matter hereof, and it replaces and
supersedes any prior agreements between the parties relating to said subject
matter; provided, however, that all provisions of Employer’s Employee Handbook
and any other written personnel policies of Employer shall be incorporated
herein by this reference, and Officer hereby expressly acknowledges that all
provisions of the Employee Handbook and other written policies are applicable
to Officer’s employment relationship with Employer, except to the extent that
any such provisions directly conflict with any term contained in this
Agreement; PROVIDED, FURTHER, THAT OFFICER





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HEREBY EXPRESSLY ACKNOWLEDGES THAT
OFFICER HAS EXECUTED EMPLOYER’S STANDARD MUTUAL AGREEMENT TO ARBITRATE CLAIMS
CONCURRENTLY HEREWITH, WHICH REQUIRES THAT ANY DISPUTE UNDER THIS AGREEMENT
WILL BE ARBITRATED. No modifications or amendments of this Agreement shall be
valid unless made in writing and signed by the parties hereto.


          9.5 Waiver. The waiver of the breach of any term or of any condition of
this Agreement shall not be deemed to constitute the waiver of any other breach
of the same or any other term or condition.



          9.6 California Law. This Agreement shall be construed and interpreted in
accordance with the laws of California, without reference to its conflict of
laws principles.



          9.7 Injunctive Relief. Employer and Officer acknowledge that the services
Officer is obligated to render under the provisions of this Agreement are of a
special, unique, unusual, extraordinary and intellectual character, which gives
this Agreement peculiar value to Employer. The loss of these services cannot
be reasonably or adequately compensated in damages in an action at law and it
would be difficult (if not impossible) to replace these services. By reason
thereof, if either party violates any of the material provisions of this
Agreement, the parties shall, in addition to any other rights and remedies
available under this Agreement, or under applicable law or the Mutual Agreement
to Arbitrate Claims, be entitled to seek injunctive relief, as permitted by
law, from a court or tribunal of competent jurisdiction, restraining the other
from committing or continuing any violation of this Agreement. The provisions
hereof shall survive the expiration, suspension or termination, for any reason,
of this Agreement.



          9.8 Severability. If any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless remain in
full force and effect, and if any provision is held invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.



          9.9 Regulatory Intervention. Notwithstanding anything in this Agreement
to the contrary, this Agreement is subject to the following terms and
conditions:



               9.9.1 If Officer is suspended and/or temporarily prohibited from
participating in the conduct of Employer’s affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818
(e)(3) and (g)(1)), Employer’s obligations hereunder shall be suspended as of
the date of service unless stayed by appropriate proceedings. If the charges
in the notice are dismissed, Employer shall (i) pay Officer all or part of the
compensation withheld while Employer’s contract obligations were suspended, and
(ii) reinstate any of Employer’s obligations which were suspended.



               9.9.2 If Officer is removed and/or permanently prohibited from
participating in the conduct of Employer’s affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818
(e)(4) and (g)(1)), all obligations of Employer under this Agreement shall
terminate as of the effective date of the order, but Officer’s vested rights
shall not be affected.





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               9.9.3 If Employer is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1813 (x)(1)), all obligations under
this Agreement shall terminate as of the date of default, but Officer’s vested
rights shall not be affected.



               9.9.4 All obligations under this Agreement shall be terminated, except to
the extent determined that continuation of the contract is necessary for the
continued operation of Employer, (i) by the Office of Thrift Supervision
(“OTS”) at the time the Federal Deposit Insurance Corporation (“FDIC”) enters
into an agreement to provide assistance to or on behalf of Employer under the
authority contained in Section 13(c) of the Federal Deposit Insurance Act (12
U.S.C. 1823 (c)); or (ii) by the OTS at the time the OTS approves a supervisory
merger to resolve problems related to operation of Employer or when Employer is
determined by the OTS to be in an unsafe or unsound condition. Any rights of
Officer that shall have vested under this Agreement shall not be affected by
such action.



               9.9.5 With regard to the provisions of this Section 9.9:



                       (i) Employer agrees to use its best efforts to oppose any such notice of
charges as to which there are reasonable defenses;



                       (ii) In the event the notice of charges is dismissed or otherwise resolved
in a manner that will permit Employer to resume its obligations to pay
compensation hereunder, Employer will promptly make such payment hereunder; and



                       (iii) During the period of suspension, the vested rights of the
contracting parties shall not be affected except to the extent precluded by
such notice.



               9.9.6 Any payments made to Officer by Employer pursuant to this Agreement,
or otherwise, are subject to and conditioned upon their compliance with 12
U.S.C. Section 1828(k) and any regulations promulgated thereunder.



EMPLOYER:




	 	 	 	 	 	 	 
	By:	 	 	 	Dated:	 	 
	 	 	


	 	 	 	

	 	 	
     Michael W. Perry	 	 	 	 
	 	 	
     Chairman and Chief Executive Officer	 	 	 	 
	 	 	 	 	 	 	 
	OFFICER:	 	 	 	 
	 	 	 	 	Dated:	 	 
	
	 	 	 	

	Name:	 	 	 	 



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APPENDIX A

PROFIT CENTER

ANNUAL INCENTIVE PLAN




	 	 	 
	Officer Name:	 	
Raymond Matsumoto
	Annual Base Rate for 2004:	 	
$215,000
	Target Annual Bonus for 2004:	 	
$225,000
	Target Quarterly Bonus for 2004:	 	
$0



Annual or Quarterly Incentive Awards:




	 	 	Officer shall be eligible for an Annual or Quarterly Incentive Awards (as applicable), which shall be comprised of the following
components:




	 	1.	 	Business Metrics
	 
	 	2.	 	Corporate Earnings per Share (Wrap)
	 
	 	3.	 	Safety and Soundness, Compliance, Internal Audit and Internal
Controls (Wrap)
	 
	 	4.	 	Subjective Assessment (Wrap)



These components shall be measured as follows: Measurement of Components
Intentionally Omitted.