exv10w5






Exhibit 10.5




EXECUTIVE EMPLOYMENT AGREEMENT




     This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of this 26th day
of March, 2007, by and between T&E Group, Inc, which is in the process of forming a holding company
that will own at least one federally chartered bank (“Bank”), and Pamela T. Davis, an individual
resident of the State of California (“Executive”).



     WHEREAS, the Executive has considerable experience, expertise and training in management
related to banking and services offered by the Bank;



     WHEREAS, the Bank desires for the Executive to be employed as the Executive Vice
President/Chief Credit Officer of the Bank, and Executive desires to accept employment, subject to
and on the terms and conditions set forth in this Agreement; and



     WHEREAS, both the Bank and the Executive have read and understood the terms and provisions set
forth in this Agreement and have been afforded a reasonable opportunity to review this Agreement
with their respective legal counsel.



     NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this
Agreement, the Executive and the Bank agree as follows:



A. DURATION




     1. This Agreement shall become effective (the “Effective Date”) upon the date that the Bank
opens for business and, subject to Paragraph 2 below, will expire and terminate by its own terms
five years after the Effective Date, unless earlier terminated as provided herein.



     2. Both the Bank and the Executive acknowledge and agree that the parties may agree to
continue the employment relationship upon such terms as they may mutually agree. Following the
initial five year term, this Agreement automatically shall renew annually for an additional one (1)
year term unless either party elects to terminate this Agreement by sending written notice of
non-renewal at least thirty (30) days prior to the expiration of the then current term. Both
parties acknowledge and agree that, in the event this Agreement does not renew, this Agreement
shall terminate automatically upon the expiration of the then current term without any additional
liability or obligation on the part of either party, except as expressly provided herein.



B. COMPENSATION




     3. All payments of salary and other compensation to the Executive shall be payable in
accordance with the Bank’s ordinary payroll and other policies and procedures.




     a. During the term of this Agreement, the Bank agrees to pay the Executive a base
salary of not less than $163,000 annually, appropriately prorated for partial months at the
commencement and end of the term of this Agreement.




     b. The Bank shall have the right to deduct from any payment of compensation to the
Executive hereunder any federal, state or local taxes required by law to be withheld with
respect to such payments and any other amounts specifically authorized to be withheld or
deducted by the Executive.



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     c. During the term of this Agreement, it is anticipated that the board of directors of
the Bank (“Board of Directors” or “Board”) or a delegated committee thereof will adopt an
executive incentive bonus plan based upon the asset growth and profitability of the Bank.
The Executive will be entitled to participate in such plan. The Executive shall also be
entitled to participate in any benefit programs applicable to all employees of the Bank or
to executive employees of the Bank in accordance with Bank policy and the provisions of said
benefit programs.




     d. The Executive shall receive options to purchase 35,000 shares of common stock of the
Bank at an exercise price of $10 per share. The options shall have a term of ten years from
the date of issuance, which shall be the Effective Date, and to the extent permitted by law,
shall be treated as incentive stock options. The options shall vest ratably over a period
of five years, beginning on the first anniversary date of the Effective Date; provided
however that the vesting of the options shall accelerate upon a change in control of the
Bank (as defined in the stock option agreement). The options shall be evidenced by a stock
option agreement, which shall have such terms as are consistent with those set forth above
and such additional terms as may be set forth in the stock option agreement or the stock
option plan pursuant to which the options are granted.



     4. The Bank and the Executive acknowledge and agree that the Bank shall provide the Executive
with an automobile allowance in the amount of $500 each month. The Bank further acknowledge and
agree that the Bank shall provide the Executive with a cellular phone and laptop computer for use
in the performance of his or her duties and obligations under this Agreement. The Bank also shall
reimburse the Executive for all reasonable expenses, including, but not limited to, travel
expenses, lodging expenses, and meals and entertainment expenses, that the Executive may incur in
the performance of his or her duties and obligations under this Agreement; provided, however, that
the Executive shall be required to submit receipts or other acceptable documentation to the cashier
of the Bank or such other officer designated by the Board of Directors to verify such expenses
prior to any reimbursements. In addition to the reimbursement of expenses listed in this
Paragraph, the Bank shall pay, or reimburse the Executive, for reasonable initiation fees for trade
association memberships deemed to be acceptable and appropriate by the Board of Directors.



     5. Subject to the provisions of Paragraph 9 of this Agreement, the Executive shall be entitled
to receive employee and dependent health insurance, dental insurance, vision insurance, paid sick
leave and four (4) weeks of paid vacation per year, and any additional benefits provided to all
Bank employees. The Bank shall cover the cost of health, dental and vision insurance for the
Executive and spouse or significant other. The Executive’s receipt of such benefits shall be in
accordance with the Bank’s employment policies.



     6. The Bank also shall provide the Executive with a salary continuation plan, with such terms
as are approved by Executive and the Board of Directors.



     7. The Bank also shall provide the Executive with term life insurance coverage in an initial
amount not to exceed 200% of the Executive’s base salary, and having a term not less than ten
years. If, during the term of this Agreement, the Bank adopts a plan providing life insurance
benefits to other Bank employees and the maximum coverage under such plan exceeds the maximum
permissible coverage provided by this Paragraph, then notwithstanding the provisions of this
Paragraph, the Executive shall be entitled to participate in the Bank’s life insurance benefit plan
to the full extent that it is available to other Bank employees.



     8. The Board of Directors or a delegated committee shall review the amount of the Executive’s
compensation, including his or her base salary, not less than annually and shall increase such



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base salary as a result of such review and to provide reasonable cost of living adjustments,
all in the discretion of the Board of Directors or such committee and consistent with safe and
sound banking practices; provided however that the Executive’s base salary, bonuses, vacation and
car allowance shall not be less than the amounts set forth in Paragraphs 3, 4, and 5 at any time
during the term of this Agreement.




     9. All employee benefits provided to the Executive by the Bank incident to the Executive’s
employment shall be governed by the applicable plan documents, summary plan descriptions or
employment policies, and may be modified, suspended or revoked at any time, in accordance with the
terms and provisions of the applicable documents.



     10. The parties hereto acknowledge that the compensation set forth herein and the other
covenants and agreements of the Bank contained herein are fair and adequate compensation for the
Executive’s services and for the covenants of the Executive as set forth herein.



C. RESPONSIBILITIES




     11. The Executive shall be employed as the Executive Vice President/Chief Credit Officer of
the Bank and shall faithfully devote his or her best efforts and his or her primary focus to his or
her position(s) with the Bank.



     12. The Executive acknowledges and agrees that the duties and responsibilities of the
Executive required by his or her position as the Executive Vice President/Chief Credit Officer of
the Bank are wholly within the discretion of its Board of Directors, and may be modified, or new
duties and responsibilities imposed by the Board of Directors, at any time, without the approval or
consent of the Executive. However, these new duties and responsibilities may not constitute
immoral or unlawful acts. In addition, the new duties and responsibilities must be consistent with
the Executive’s role as the Executive Vice President/Chief Credit Officer of a financial
institution.



     13. The Executive acknowledges and agrees that, during the term of this Agreement, he or she
has a fiduciary duty of loyalty to the Bank, and that he or she will not engage in any activity
during the term of this Agreement, which will or could, in any significant way, harm the business,
business interests, or reputation of the Bank or the reputation of the Board of Directors.



     14. The Executive shall not directly or indirectly engage in competition with the Bank at any
time during the existence of the employment relationship between the Bank and the Executive, and
the Executive will not on his or her own behalf, or as another’s agent or employee, engage in any
of the same or similar duties and/or Bank-related responsibilities required by the Executive’s
position with the Bank, other than as an employee of the Bank pursuant to this Agreement or as
specifically approved by the Board of Directors. In addition, without the prior written consent of
the Board of Directors, Executive shall not usurp for himself or herself any corporate opportunity
available to the Bank.



D. NONINTERFERENCE




     15. The Executive acknowledges that, as part of his or her employment with the Bank, he or she
will become familiar with the salary, pay scale, capabilities, experiences, skill and desires of
the Bank’s employees. The Executive agrees to maintain the confidentiality of such information.
The Executive further covenants and agrees that, for a period of one year subsequent to the
termination of this Agreement, whether such termination occurs at the insistence of the Bank or the
Executive, the Executive shall not recruit, hire, or attempt to recruit or hire, directly or by
assisting others, any employees of the Bank, nor shall the Executive contact or communicate with
any employees of the Bank for the purpose of



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inducing such employees of the Bank to terminate their employment with the Bank. For purposes
of this covenant, “employees of the Bank” shall refer to employees who are still actively employed
by or were employed by the Bank within the prior year at the time of the attempted recruiting or
hiring.




     16. In his or her position of employment, the Executive will be exposed to confidential
information and trade secrets (hereafter “Proprietary Information”) pertaining to, or arising from,
the business of the Bank and its affiliates (if any). The Executive hereby agrees and acknowledges
that such Proprietary Information is unique and valuable to the Bank’s business and that the Bank
would suffer irreparable injury if this information were publicly disclosed. Therefore, the
Executive agrees to keep in strict secrecy and confidence, both during and after the period of his
or her employment, any and all Proprietary Information which the Executive acquires, or to which
the Executive has access, during employment by the Bank, that has not been publicly disclosed by
the Bank. The Proprietary Information covered by this Agreement shall include, but shall not be
limited to: (i) the identities of the Bank’s existing and prospective customers or clients,
including names, addresses, credit status, and pricing levels; (ii) the buying and selling habits
and customs of the Bank’s existing and prospective customers or clients; (iii) non-public financial
information about the Bank; (iv) product and systems specifications, concepts for new or improved
products and other product or systems data; (v) the identities of, and special skills possessed by,
the Bank’s employees; (vi) the identities of and pricing information about the Bank’s suppliers and
vendors; (vii) training programs developed by the Bank; (viii) pricing studies, information and
analyses; (ix) current and prospective products and inventories; (x) financial models, business
projections and market studies; (xi) the Bank’s financial results and business conditions;
(xii) business plans and strategies; (xiii) special processes, procedures, and services of the Bank
and its suppliers and vendors; and (xiv) computer programs and software developed by the Bank or
its consultants. The provisions and agreements entered into herein shall survive the term of the
Employee’s employment to the extent reasonably necessary to accomplish their purpose in protecting
the interests of the Bank in any Proprietary Information disclosed to, or learned by, the Executive
while employed.



     17. The Executive expressly represents that he or she has no agreements with, or obligations
to, any party which conflict, or may conflict, with the interests of the Bank or with the
Executive’s duties as an employee of the Bank.



     18. The Executive acknowledges that the special relationship of trust and confidence between
him or her, the Bank, and its clients and customers creates a high risk and opportunity for the
Executive to misappropriate the relationship and goodwill existing between the Bank and its clients
and customers. The Executive further acknowledges and agrees that it is fair and reasonable for
the Bank to take steps to protect itself from the risk of such misappropriation. The Executive
further acknowledges that, at the outset of his or her employment with the Bank and throughout his
or her employment with the Bank, the Executive will be provided with access to and informed of
Proprietary Information, which will enable him or her to benefit from the Bank’s goodwill and
know-how.



     19. The Executive acknowledges that it would be inevitable in the performance of his or her
duties as a director, officer, employee, investor, agent or consultant of any person, association,
entity, or company which competes with the Bank, or which intends to or may compete with the Bank,
to disclose and/or use Proprietary Information, as well as to misappropriate the Bank’s goodwill
and know-how, to or for the benefit of such other person, association, entity, or company. The
Executive also acknowledges that, in exchange for the execution of the non-solicitation restriction
set forth in these NONINTERFERENCE provisions, he or she has received substantial, valuable
consideration, including: (i) confidential trade secret and proprietary information relating to
the identity and special needs of the Bank’s current and prospective customers, the Bank’s current
and prospective services, the Bank’s business projections and market studies, the Bank’s business
plans and strategies, the Bank’s studies and information concerning special services unique to the
Bank; (ii) employment; and (iii) compensation and



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benefits as described in this Agreement. The Executive further acknowledges and agrees that
this consideration constitutes fair and adequate consideration for the execution of the
non-solicitation restriction set forth herein.




     20. In consideration for the above-recited valuable consideration, as well as to protect the
vital interests described in these NONINTERFERENCE provisions, the Executive understands and agrees
that during the continuation of this Agreement and for a period of one year following the
termination of this Agreement by either party, for any reason (other than for termination of the
Executive for circumstances described in Paragraph 25(e), below), the Executive will not be or
become engaged in any way (directly or indirectly), as an individual proprietor, beneficiary,
trustee, owner, partner, stockholder, officer, director, executive, investor, lender, sales
representative, or in any other capacity, whatsoever, in any activity or endeavor which competes or
conflicts with the Bank’s business or the business of the Bank or the business of any of their
respective affiliates (if any), as such business has been conducted during the years of the
Executive’s employment with the Bank, within thirty (30) miles of any office of the Bank, or its
affiliates (if any). It is the parties’ desire that these restrictions be enforced to the fullest
extent allowed by law.



     21. The Executive agrees that the restrictions set forth in Paragraph 20 above are ancillary
to an otherwise enforceable agreement, are supported by independent valuable consideration, and
that the limitations as to time, geographical area, and scope of activity to be restrained by
Paragraph 20 are reasonable and acceptable, and do not impose any greater restraint than is
reasonably necessary to protect the goodwill and other business interests of the Bank. The
Executive further agrees that such restrictions do not create undue hardship for him or her or for
the public. The NONINTERFERENCE provisions in this Section D are not intended to be construed as a
general restraint from engaging in a lawful profession or a general covenant against competition.
Nothing herein will prohibit the Executive’s (i) beneficial ownership of less than 5% of the
publicly traded capital stock of a corporation listed on a national securities exchange so long as
this is not a controlling interest, or (ii) ownership of mutual fund investments. The Executive
may not avoid the purpose and intent of this paragraph by engaging in conduct within the
geographically limited area from a remote location through means such as telecommunications,
written correspondence, computer generated or assisted communications, or other similar methods.
The Executive agrees that if, at some later date, a court of competent jurisdiction determines that
the non-solicitation agreement set forth in this Section D does not meet the criteria set forth by
applicable law, then such agreement may be reformed by the court and enforced to the maximum extent
permitted under applicable law. The Executive understands that his or her obligations under this
Section D shall not be assignable by him or her.



     22. The Executive acknowledges that the covenants set forth in these NONINTERFERENCE
provisions are material conditions to the Bank’s willingness to execute and deliver this Agreement
and to provide Executive the compensation and benefits and other consideration provided hereunder.
The parties agree that the existence of any claim or cause of action of Executive against the Bank,
whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement
by the Bank of such covenants. It is specifically acknowledged that the periods following the
termination of employment stated in Paragraphs 15 and 20, during which the agreements and covenants
of Executive made in such Paragraphs are effective, are to be computed by excluding from such
computation any time during which Executive is in violation of any provision of Paragraph 15 or 20.
The covenants contained in these NONINTERFERENCE provisions will not be affected by any breach of
any other provision hereof by any party hereto. In addition, Executive’s obligations under these
NONINTERFERENCE provisions shall survive the termination of this Agreement and Executive’s
employment with the Bank. Executive’s obligations under these NONINTERFERENCE provisions are in
addition to, and not in limitation or preemption of, all other obligations of confidentiality which
he or she may have to Bank under general legal or equitable principles, or other the Bank policies.



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E. REMEDIES




     23. In the event that the Executive violates any of the provisions set forth in this Agreement
relating to NONINTERFERENCE, Executive acknowledges that the Bank would suffer immediate and
irreparable harm and would not have an adequate remedy at law for money damages. Accordingly,
Executive agrees that, without the necessity of proving actual damages or posting bond or other
security, the Bank shall be entitled to temporary or permanent injunction or injunctions to prevent
breaches of such performance and to specific enforcement of such covenants in addition to any other
remedy to which the Bank may be entitled, at law or in equity. In such a situation, the parties
agree that the Bank may pursue any remedy available, including declaratory relief, concurrently or
consecutively in any order as to any breach, violation, or threatened breach or violation of any of
the provisions set forth in this Agreement relating to NONINTERFERENCE, and the pursuit of any
particular remedy or remedies shall not be deemed an election of remedies or waiver of the right to
pursue any other remedy.



F. TERMINATION




     24. The Board of Directors shall be entitled to terminate this Agreement, for any reason, by
providing the Executive with thirty (30) days written notice of the termination. However, if this
Agreement is terminated by the Bank without Good Cause, as defined in this Agreement, the Bank
shall provide the Executive with the severance set forth in paragraph 34 of this Agreement.



     25. For purposes of this Agreement, “Good Cause” shall be defined as the occurrence of one of
the following events:




     a. The determination by the Board of Directors, in the exercise of its reasonable
judgment, that Executive has violated any provision of this Agreement or is grossly
negligent in the performance of his or her duties hereunder, and has failed to cure such
violation or the effects of such gross negligence within a reasonable period after written
notice to the Executive by the Bank specifying in reasonable detail the alleged violation;




     b. The determination by the Board of Directors, in the exercise of its reasonable
judgment, that (i) Executive has failed to follow the policies adopted by the Board of
Directors and has failed to cure such failure within a reasonable period after written
notice to the Executive by the Bank specifying in reasonable detail the alleged failure; or
(ii) Executive has engaged in such actions or omissions that would constitute unsafe or
unsound banking practices;




     c. The Executive is convicted of a misdemeanor involving moral turpitude or a felony;




     d. The determination by the Board of Directors, in the exercise of its reasonable
judgment, that the Executive has engaged in gross misconduct in the course and scope of his
or her employment with the Bank including indecency, immorality, gross insubordination,
dishonesty, unlawful harassment, use of illegal drugs, or fighting;




     e. The determination by the Board of Directors, in the exercise of its reasonable
judgment and in good faith, that the Executive’s job performance is substantially
unsatisfactory and that Executive has failed to cure such performance within a reasonable
period after written notice to the Executive by the Bank specifying in reasonable detail the
nature of the unsatisfactory performance; or



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     f. The Executive is prohibited from engaging in the business of banking by any
governmental regulatory agency having jurisdiction over the Bank.



     26. Executive shall be entitled to terminate this Agreement at any time, for any reason, with
or without cause, by providing thirty (30) days written notice to the Bank. The effective date of
such resignation shall be the 30th calendar day following the date the notice is given
or such other later date as may be set forth in the notice. Upon Executive’s resignation,
Executive shall be entitled to receive any base salary which has been earned by him or her through
the effective date of such resignation.



     27. If Executive dies during the term of this Agreement and while in the employ of the Bank,
this Agreement will terminate automatically, without notice, on the date of the Executive’s death
and the Bank shall not have any further obligation to Executive or his or her estate under this
Agreement (other than death benefits payable under any benefit plans to which Executive is a
party), except that the Bank shall pay Executive’s estate that portion of Executive’s base salary
accrued through the date on which Executive’s death occurred. To the maximum extent, and for the
term, permitted by the health benefit provisions of the Consolidated Omnibus Budget Reconciliation
Act (COBRA) of 1986, if Executive dies during the term of this Agreement and while in the employ of
the Bank, the Bank shall provide or maintain health insurance benefits, at the Bank’s expense, for
Executive’s spouse.



     28. This Agreement will terminate immediately, without notice, in the event the Executive is
prevented from performing his or her duties hereunder by reason of becoming physically or mentally
disabled. For purposes of this Agreement, the term “disabled” shall have the meaning set forth in
the Bank’s long-term disability plan or, if the Bank has no long-term disability plan in effect at
the time of the Executive’s disability, then “disabled” shall mean that Executive has become
physically or mentally incapable (excluding infrequent and temporary absences due to ordinary
illness) of performing the essential functions of his or her duties under this Agreement for a
continuous period of three (3) months, as determined by the Board of Directors upon the advice of a
qualified physician. In the event a dispute arises between Executive and the Bank concerning
Executive’s physical or mental ability to continue or return to the performance of his or her
duties, then Executive shall submit to an examination by a competent physician mutually agreeable
to the parties. The physician’s opinion as to the Executive’s capability to perform his or her
duties will be final and binding. During any period prior to termination during which the
Executive fails to perform his or her duties as a result of incapacity due to physical or mental
illness, the Executive shall continue to receive his or her full salary at the rate then in effect
for such period until his or her employment terminates pursuant to this Paragraph 28, provided that
payments so made to the Executive during such period shall be reduced by the sum of the amounts, if
any, payable to the Executive under any disability benefit plans of the Bank that were not
previously applied to reduce such payment.



     In the event of a termination pursuant to this Section 28, the Bank shall be relieved of all
its obligations under this Agreement, except that Bank shall pay to the Executive, or to his or her
estate in the event of his or her subsequent death, the Executive’s base salary under Paragraph
3(a) through the date on which such termination shall have occurred, reduced during such period by
the amount of any benefits received by Executive under any disability policy maintained by the Bank
and by any death benefits payable under the benefit plans referenced in Paragraph 7. All such
payments to the Executive or to his or her estate shall be made in the same manner as other payroll
obligations.



     29. Executive acknowledges that all memoranda, notes, records, reports, manuals, books,
papers, letters, client and customer lists, contracts, software programs, information and records,
drafts of instructions, guides and manuals, and other documentation (whether in draft or final
form), and other sales or financial information and aids relating to the Bank’s business, and any
and all other documents containing Propriety Information furnished to the Executive by any
representative of the Bank or



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otherwise acquired or developed by the Executive in connection with his or her duties under
this Agreement (collectively, the “Recipient Materials”) shall at all times be the property of the
Bank. Within three calendar days of the termination of this Agreement, the Executive shall return
to the Bank, all Recipient Materials (including all Proprietary Information) that is in his or her
possession, custody or control.




     30. The provisions of provisions of Paragraphs 15, 16, 20-23, 29-34, 39, 43 and 45 shall
survive the termination of this Agreement.



G. CHANGE OF CONTROL




     31. The parties acknowledge that the Executive has agreed to assume the position of Executive
Vice President/Chief Credit Officer and to enter into this Agreement based on his or her confidence
in the current owners of the Bank and the direction of the Bank provided by the current Board of
Directors. Upon a “Change of Control,” as defined below, the Executive may, at his or her option,
notify the Bank within sixty (60) days following such Change of Control that he or she intends to
terminate this Agreement based upon the Change of Control.



     In the event that Executive is terminated by the Bank within sixty (60) days following such
Change of Control for any reason other than for Good Cause, Executive shall be entitled to elect to
receive as severance the lump sum amount determined pursuant to Paragraph 32 upon written notice to
the Bank, in which case the severance provisions of Paragraph 34 shall not apply.



     32. In the event that the Executive elects to terminate this Agreement based upon the Change
of Control, the Bank shall pay to the Executive (or his beneficiaries if applicable), within thirty
(30) days of Bank’s receipt of a notice of the Executive’s election to terminate this Agreement, a
cash lump sum payment equal to 1.99 times his or her Base Amount as defined in section 280G(b)(3)
of the Internal Revenue Code of 1986, as amended (“Code”).



     In the event that any compensation payable under this Agreement is determined to be a
“parachute payment” subject to the excise tax imposed by Section 4999 of the Code or any successor
provision (the “Excise Tax”), the Bank agrees to pay to the Executive an additional sum (the “Gross
Up”) in an amount such that the net amount retained by the Executive, after receiving both the
payment and the Gross Up and after paying: (i) any Excise Tax on the payment and the Gross Up, and
(ii) any federal, state, and local income taxes on the Gross Up, is equal to the amount of the
payment.



     For purposes of determining the Gross Up, the Executive shall be deemed to pay federal, state,
and local income taxes at the highest marginal rate of taxation in his or her filing status for the
calendar year in which the payment is to be made based upon the Executive’s domicile on the date of
the event that triggers the Excise Tax. The determination of whether such Excise Tax is payable
and the amount of such Excise Tax shall be based upon the opinion of tax counsel selected by the
Bank, subject to the reasonable approval of the Executive. If such opinion is not finally accepted
by the Internal Revenue Service, then appropriate adjustments shall be calculated (with additional
Gross Up determined based on the principals outlined in the previous paragraph, if applicable) by
such tax counsel based upon the final amount of Excise Tax so determined together with any
applicable penalties and interest. The final amount shall be paid, if applicable, within thirty
(30) days after such calculations are completed, but in no event later than April 1st of
the year following the event that triggers the Excise Tax. Such compensation shall be payable in
equal disbursements in accordance with the Bank’s ordinary payroll policies and procedures.



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     33. As used in this Agreement, a “Change of Control” shall be deemed to have occurred in each
of the following instances:




     a. A reorganization, merger, consolidation or other corporate transaction involving the
Bank, in each case, with respect to which the shareholders of the Bank, immediately prior to
such transaction do not, immediately after the transaction, own more than fifty percent
(50%) of the combined voting power of the reorganized, merged or consolidated bank’s then
outstanding voting securities; provided, however that a Change of Control shall not be
deemed to have occurred upon the formation of a holding company for the Bank if each
shareholder of the Bank immediately prior to the formation of the holding company retains
substantially the same percentage ownership of the holding company following such formation
as he or she owned of the Bank prior the formation.




     b. The sale, transfer or assignment of all or substantially all of the assets of the
Bank to any third party.




     c. The acquisition by any individual, entity or “group,” within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Exchange Act (a “Person”), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities
of the Bank where such acquisition causes any such Person to own twenty percent (20%) or
more of the combined voting power of the Bank’s then outstanding capital stock then entitled
to vote generally in the election of directors; provided however, that a Change of Control
shall not be deemed to have occurred if a Person becomes the beneficial owner of twenty
percent of the combined voting power of the Bank’s then outstanding capital stock solely as
a result of the repurchase of voting securities by the Bank.




     d. During any period of two consecutive years, the persons who were directors of the
Bank immediately before the beginning of the two year period (the “Incumbent Directors”)
shall cease to constitute at least a majority of the Board of Directors; provided that any
individual becoming a director subsequent to the beginning of such two year period whose
election, or nomination for election by the Bank’s shareholders, was approved by at least
two-thirds of the directors then comprising the Incumbent Directors shall be considered as
though such individual were an Incumbent Director unless such individual’s initial
assumption of office occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act).



     Notwithstanding anything contained herein to the contrary, if Executive’s employment is
terminated and he or she reasonably demonstrates that such termination was at the request of a
third party who has indicated an intention of taking steps reasonably calculated to effect a Change
of Control and who effects a Change of Control, or such termination otherwise occurred in
connection with, or in anticipation of, a Change of Control which later actually occurs, then for
all purposes hereof, a Change of Control shall be deemed to have occurred on the day immediately
prior to the date of such termination of his or her employment.



H. SEVERANCE




     34. Except as otherwise expressly provided herein, if Bank terminates Executive’s employment
for any reason other than Good Cause (as defined in this Agreement), then Executive shall be
entitled to severance pay equal to the base salary that would have been due the Executive had he
remained employed for the remaining term of this Agreement, but in no event less than one year’s
base salary. In the event that the Executive is entitled to any payment under Section G, above, no
payment



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shall be due under this Section H. Any severance pay due to Executive pursuant to this
Section H shall be paid in accordance with the terms of normal payroll procedure of the Bank.




I. SEVERABILITY




     35. If any term or other provision of this Agreement is held to be illegal, invalid or
unenforceable by any rule of law or public policy: (A) such term or provision shall be fully
severable and this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were not a part hereof; (B) the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by such illegal, invalid or
unenforceable provision or by its severance from this Agreement; and (C) there shall be added
automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid
or unenforceable provision as may be possible and still be legal, valid and enforceable. If any
provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only as broad as is enforceable.



J. WAIVER




     36. The parties acknowledge and agree that the failure of either party to enforce any
provision of this Agreement shall not constitute a waiver of that particular provision, or of any
other provisions of this Agreement.



K. SUCCESSORS AND ASSIGNS




     37. The Executive acknowledges and agrees that this Agreement may be assigned by the Bank to
any successor-in-interest and shall inure to the benefit of, and be fully enforceable by, any
successor and/or assignee; and this Agreement will be fully binding upon, and may be enforced by
the Executive against, any successor and/or assignee of the Bank.



     38. The Executive acknowledges and agrees that his or her obligations, duties and
responsibilities under this Agreement are personal and shall not be assignable, and that this
Agreement shall be enforceable by the Executive only. In the event of the Executive’s death, this
Agreement shall be enforceable by the Executive’s estate, executors and/or legal representatives,
only to the extent provided herein.



L. CHOICE OF LAW




     39. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT SHALL BE
GOVERNED BY, THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO PROVISION THEREOF
REGARDING CONFLICT OF LAWS. IT IS STIPULATED THAT CALIFORNIA HAS A COMPELLING STATE INTEREST IN
THE SUBJECT MATTER OF THIS AGREEMENT, AND THAT THE EXECUTIVE HAS OR WILL HAVE REGULAR CONTACT WITH
THE STATE OF CALIFORNIA IN THE PERFORMANCE OF THIS AGREEMENT.



M. MODIFICATION




     40. The parties acknowledge and agree that this Agreement and the other agreements and plans
referenced herein constitute the complete and entire agreement between the parties; that each
executed this Agreement based upon the express terms and provisions set forth herein; that, in
accepting



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employment with the Bank, the Executive has not relied on any representations, oral or
written, which are not set forth in this Agreement; that no previous agreement, either oral or
written, shall have any effect on the terms or provisions of this Agreement; and that all previous
agreements, either oral or written, are expressly superseded and revoked by this Agreement. No
waiver shall be deemed a continuing waiver or a waiver of any subsequent breach or default, either
of a similar or different nature, unless expressly so stated in writing.




     41. Except as otherwise expressly provided in this Agreement, no conditions, usage of trade,
course of dealing or performance, understanding or agreement purporting to modify, vary, explain or
supplement the terms or conditions of this Agreement unless hereafter made (i) in writing,
(ii) referencing an express provision in this Agreement, (iii) signed by the party to be bound, ,
and (iv) in the case of the Bank, approved by a disinterested majority of the Board of Directors.



N. INDEMNIFICATION




     42. During the term of this Agreement, the Bank shall indemnify the Executive against all
judgments, penalties, fines, amounts paid in settlement and reasonable expenses (including, but not
limited to, attorneys’ fees) relating to his or her employment by the Bank to the fullest extent
permissible under the law, including, without limitation, federal and/or state banking laws and
regulations, the                      Financial Code, as amended, the                      Corporations Code, as
amended, and the Bank’s Articles of Incorporation. To the extent permitted by law, the Bank may
purchase such indemnification insurance as the Board of Directors may from time to time determine.



O. ARBITRATION




     43. Any dispute, controversy, or claim arising out of or relating to this Agreement or breach
thereof, or arising out of or relating in any way to the employment of the Executive or the
termination thereof, shall be submitted to arbitration in accordance with the Employment Dispute
Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the
arbitrator may be entered in any court of competent jurisdiction. In reaching his or her decision,
the arbitrator shall have no authority to ignore, change, modify, add to or delete from any
provision of this Agreement, but instead is limited to interpreting this Agreement.
Notwithstanding the arbitration provisions set forth in this Agreement, the Executive and the Bank
acknowledge and agree that nothing in this Agreement shall be construed to require the arbitration
of any claim or controversy arising under the NONINTERFERENCE provisions of this Agreement. These
provisions shall be enforceable by any court of competent jurisdiction and shall not be subject to
this Paragraph of the Agreement. The Executive and the Bank further acknowledge and agree that
nothing in this Agreement shall be construed to require arbitration of any claim for workers’
compensation or unemployment compensation.



P. LEGAL CONSULTATION




     44. Each party acknowledges that it has carefully read this Agreement, that it has had an
opportunity to consult with his, her or its attorney concerning the meaning, import and legal
significance of this Agreement, that it understands the terms of the Agreement, that all
understandings and agreements between Executive and the Bank relating to the subjects covered in
this Agreement are contained in it, and that it has entered into the Agreement voluntarily and not
in reliance on any promises or representations by the other than those contained in this Agreement.



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Q. MISCELLANEOUS




     45. The Executive shall make himself or herself available, upon the request of the Bank, to
testify or otherwise assist in litigation, arbitration, or other disputes involving the Bank, or
any of the directors, officers, employees, subsidiaries, or parent corporations of either, at no
additional cost during the term of this Agreement and at any time following the termination of this
Agreement.



     46. The Executive shall not be required to mitigate the amount of any payment provided for in
this Agreement by seeking other employment or otherwise, nor shall the amount of any payment
provided for in this Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the date of termination, or otherwise.



     47. In the event either party institutes arbitration or litigation to enforce or protect its
rights under this Agreement, the prevailing party in such arbitration or litigation shall be
entitled, in addition to all other relief, to reasonable attorneys fees, out-of-pocket costs,
disbursements, and arbitrator’s fees relating to such arbitration or litigation.



     48. This Agreement may be executed simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and the same Agreement.



     49. The Bank shall have no obligation to set aside, earmark or entrust any fund or money with
which to pay its obligations under this Agreement. The Executive or any successor-in-interest to
the Executive shall be and remain simply a general creditor of the Bank in the same manner as any
other creditor having a general unsecured claim. For purposes of the Code, the Bank intends this
Agreement to be an unfunded, unsecured promise to pay on the part of the Bank. For purposes of
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Bank intends that this
Agreement not be subject to ERISA. If it is deemed subject to ERISA, it is intended to be an
unfunded arrangement for the benefit of a select member of management, who is a highly compensated
employee of the Bank for the purpose of qualifying this Agreement for the “top hat” plan exception
under sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. At no time shall the Executive have or be
deemed to have any lien nor right, title or interest in or to any specific investment or to any
assets of the Bank. If the Bank elects to invest in a life insurance, disability or annuity policy
upon the life of the Executive, then the Executive shall assist the Bank by freely submitting to a
physical examination and supplying such additional information necessary to obtain such insurance
or annuities.



     50. When a reference is made in this Agreement to a Paragraph or a Section, such references
shall be to a Paragraph or a Section of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any particular provision in this
Agreement. Each use herein of the masculine, neuter or feminine gender shall be deemed to include
the other genders. Each use herein of the plural shall include the singular and vice versa, in
each case as the context requires or as is otherwise appropriate. The word “or” is used in the
inclusive sense. Any agreement or instrument defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement or instrument as from time to time
amended, modified or supplemented, including by waiver or consent. References to a person are also
to its permitted successors or assigns.



     51. Executive represents that his or her service as an employee of the Bank will not violate
any agreement: (i) he or she has made that prohibits him or her from disclosing any information he
or she



12









 




acquired prior to him or her becoming employed by the Bank; or (ii) he or she has made that
prohibits him or her from accepting employment with the Bank or that will interfere with his or her
compliance with the terms of this Agreement. Executive further represents that he or she has not
previously, and will not in the future, disclose to Bank any proprietary information or trade
secrets belonging to any previous employer. Executive acknowledges that the Bank has instructed
him or her not to disclose to it any proprietary information or trade secrets belonging to any
previous employer.




R. NOTICES




     52. All notices and other communications required or permitted to be given or delivered
hereunder or by reason of the provisions of this Agreement shall be in writing and shall be deemed
to have been given properly if (a) delivered personally, (b) delivered by a recognized overnight
courier service, (c) sent by United States mail, postage prepaid, or (d) sent by facsimile
transmission followed by a confirmation copy delivered by recognized overnight courier service the
next day. Such notices, requests, consents and other communications shall be sent to the
respective parties as follows (or at such other address for a party as shall be specified by like
notice to the other party):


If to the Bank:



                                                            

                                                            

                                                            

Attention: President



If to Executive:



                                                            

                                                            

                                                            




     53. Any notice or other communication given pursuant to this Agreement shall be effective (i)
in the case of personal delivery, telex or facsimile transmission, when received; (ii) in the case
of mail, upon the earlier of actual receipt or five (5) business days after deposit with the United
States Postal Service, first class certified or registered mail, postage prepaid, return receipt
requested; and (iii) in the case of a recognized overnight courier service, one (1) business day
after delivery to the courier service together with all appropriate fees or charges and
instructions for overnight delivery.



[signature page follows]




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[signature page to Employment Agreement]



EXECUTED AS OF THE DATE FIRST WRITTEN ABOVE IN                                         ,                     .








	 	 	 	 	 	 	 	 	 
	 	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	/s/ Pamela T. Davis	 	 
	 	 	 	 	 	 	 
	WITNESS
	 	 	 	 	 	 	 	 
	 	 	 	 	Print Name: Pamela T. Davis	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	United Business Holdings, Inc. (formerly known as the
T&E Group, Inc. and on behalf of the Bank in
formation)
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Thomas E. Hassey	 	 
	 

WITNESS

	 	 	 	Name:	 	Thomas E. Hassey	 	 
	 

	 	 	 	Title:	 	Chairman	 	 









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