Document:

Exhibit 10.67

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated
Employment Agreement is made and is effective as of December 15, 2006, by and
between Santa Lucia Bank ("Bank") and John C. Hansen
("Executive") and amends and restates in its entirety that certain Employment
Agreement dated November 11, 2004 between the parties.  

 

WHEREAS, Executive is
currently employed by the Bank in the capacity as Executive Vice President and
Chief Financial Officer, and Executive's background, expertise and efforts have
contributed to the success and financial strength of the Bank; and

 

WHEREAS, the Bank wishes
to assure itself of the continued opportunity to benefit from Executive's
services for the period provided in this Agreement, and Executive wishes to
serve in the employ of the Bank on a full-time basis solely in accordance with
the terms hereof for such purposes; and

 

WHEREAS, the Board of
Directors of the Bank ("Board") has determined that the best
interests of the Bank would be served by Executive's continued employment with
the Bank under the terms of this Agreement; 

 

NOW, THEREFORE, in order
to effect the foregoing, the parties hereto wish to enter into an employment
agreement on the terms and conditions set forth below.  Accordingly, in consideration of the premises
and the respective covenants and agreements of the parties herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.             Definitions.

 

(a)  "Agreement" means this
employment agreement and any amendments hereto complying with Section 13(a)
hereof.

 

(b)  "Board" means the Board of
Directors of the Bank unless the context otherwise requires.

 

(c)  "Cause" means:

 

(i)                                     Executive's
personal dishonesty, incompetence or willful misconduct;

 

(ii)                                  Executive's
breach of fiduciary duty involving personal profit;

 

(iii)          Executive's intentional failure to
perform Executive's duties for the Bank after a written demand for performance
is given to Executive by the Board which demand specifically identifies the manner
in which the Board believes that Executive has not performed his duties;

 

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(iv)          Executive's willful violation of any
law, rule, regulation or final cease and desist order (other than traffic
violations or similar minor offenses) to the extent detrimental to the Bank's
business or reputation; or

 

(v)           Executive's material breach of any
provision of this Agreement.

 

(d)  "Change in Control" means a
change of control of the Bank, or  Santa
Lucia Bancorp (“Bancorp”), of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act, whether or not the Bank or Bancorp is then subject to such
reporting requirement; provided, however, that a transaction in which the Bank
or Bancorp is the acquiror regardless of the form of the transaction shall not
be a Change in Control for purposes of this Agreement; provided further
however, that without limitation, a Change in Control shall be deemed to have
occurred if:

 

(i)            there is a transfer, voluntarily or
by hostile takeover, by proxy contest

(or similar action),
operation of law, or otherwise, of Control of the Bank or Bancorp;

 

(ii)           any Person is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act or any successor provisions thereof), directly or
indirectly, of securities of the Bank or Bancorp representing 20% or more of
the combined voting power of the Bank's or Bancorp’s then outstanding
securities (other than in the case of the ownership by Bancorp of Bank
securities);

 

(iii)          the individuals who were members of
the Board immediately prior to a meeting of the shareholders of the Bank or
Bancorp, which meeting involves a contest for the election of directors, do not
constitute a majority of the Board following such meeting or election;

 

(iv)          a merger is completed in which the
Bank or Bancorp is not the surviving entity (unless the stockholders of Bank or
Bancorp, as the case may be, immediately before such merger own immediately
after such merger more than a majority of the voting securities of the
surviving entity), a consolidation or sale of all or substantially all of the
assets of the Bank or Bancorp; or

 

(v)           there is a change, during any period
of two consecutive years, of a majority of the Board or of the board of
directors of Bancorp as constituted as of the beginning of such period, unless
the election of each director who is not a director at the beginning of such
period was approved by a vote of at least two-thirds of the directors then in
office who were directors at the beginning of such period.

 

(e)  "Code"  shall mean the Internal Revenue Code of 1986,
as amended.

 

(f)  "Control"  means the possession, direct or indirect, by
any Person or "group" (as defined in Section 13(d) of the Securities
Exchange Act) of the power to direct or cause the direction 

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of the management
policies of the Bank or Bancorp, whether through ownership of voting
securities, by contract or otherwise, and in any case means the ability to
determine the election of a majority of the directors of the Bank or Bancorp.

 

(g)  "Disability" means physical
or mental illness resulting in Executive's absence on a full-time basis from
Executive's duties with the Bank or Bancorp for 180 calendar days, subject to
the procedure described in Section 7(a).

 

(h)  "Expiration" means the
termination of this Agreement (including Executive's employment hereunder) and
of any further obligations of the parties (except as specified in this
Agreement) upon completion of the Term.

 

(i)  "Person" means an individual,
a group acting in concert, a corporation, a partnership, an association, a
joint stock company, a trust, any unincorporated organization, a government or
political subdivision thereof, or any other entity whatsoever.

 

(j)  "Term" means the initial
term of this Agreement and any extensions hereof, as provided in Section 4,
prior to a Change in Control.

 

(k)  "Termination" or
"Terminate(d)" means the termination of Executive's employment
hereunder for any of the following reasons unless the context indicates
otherwise:

 

(i)            Retirement by Executive;

 

(ii)           Death of Executive;

 

(iii)          Disability;

 

(iv)          Expiration;

 

(v)           Resignation;

 

(vi)          Termination Without Cause; and

 

(vii)         Termination for Cause.

 

 

(l)  "Termination Without Cause" or
"Terminate(d) Without Cause" means the cessation of Executive's
employment hereunder for any reason except:

 

(i)            A resignation by Executive;

 

(ii)           Termination for Cause;

 

(iii)          Retirement;

 

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(iv)          Disability;

 

(v)           Death; or

 

(vi)          Expiration.

 

(m)  “Total Salary” shall mean the total amount of
salary paid Executive in the prior 12 months.

 

2.             Employment. 
The Bank hereby agrees to continue to employ the Executive, and the Executive
hereby agrees to continue to serve the Bank, for the period stated in Section 4
hereof and upon the terms and conditions set forth herein.

 

3.             Position and Responsibilities.  The Executive shall serve as Executive Vice
President and Chief Financial Officer of the Bank and, subject to the
provisions of Section 5 below, shall have such responsibilities, duties and
authority as are generally associated with such positions and as may from time
to time be assigned to the Executive by the Board that are consistent with such
responsibilities, duties and authority. 
During the Term of this Agreement, the Executive shall devote all his
time, attention, skill and efforts during normal business hours to the business
and affairs of the Bank; provided, however, this provision shall not preclude
Executive from serving as a Director or member of a committee of any other
organization involving no conflict of interests with the interests of the Bank,
from engaging in charitable and community activities and from managing his
personal investments, provided that such activities do not materially interfere
with the regular performance of his duties and responsibilities under this
Agreement.

 

4.             Term of Agreement.  Subject to the terms and provisions of this
Agreement, this Agreement and the period of Executive's employment shall be
deemed to have commenced as of December 15, 2006, and shall continue for an
initial term expiring on December 31, 2007, unless extended as provided
herein.  Prior to a Change in Control,
the initial term shall automatically be extended for an additional one (1) full
calendar year without further action by the parties on January 1, 2008, and on
each succeeding January 1 thereafter; provided that each party, Bank or
Executive, may stop an automatic calendar year extension by serving written
notice upon the other within 90 calendar days prior to January 1, 2008, or
within 90 calendar days prior to January 1 of any succeeding year, as the case
may be, of such party's intention that this Agreement shall expire at the end
of such Term.  In the event the Bank
retains Executive as an employee following the expiration of the Term, such
employment, absent a written agreement to the contrary, will be on an at-will
basis with such compensation and upon such terms as the parties may then agree,
subject to termination at any time with or without cause, and without
liability.  If the Bank does not retain
Executive as an employee after the Expiration of the Term, Executive's employment
shall cease without further liability of the parties to each other.  Executive's employment shall also terminate,
and the Term of this Agreement will expire, upon Executive's resignation,
retirement, death or Disability, or upon Executive's Termination for Cause or
Termination Without Cause; provided further that the Term of the Agreement
shall be deemed to have terminated upon a Change in Control and the payment to
Executive of all amounts owed to him upon a Change in Control as provided in
Section 8(e) hereof.

 

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5.             Additional Duties.  With the approval of the Board, from time to
time, Executive may serve, or continue to serve, on the boards of directors of,
and hold any other offices or positions in, companies or charitable, political
or civic organizations, which, in such Board’s judgment, will not present any
material conflict of interest with the Bank and will not unfavorably affect the
performance of Executive’s duties pursuant to this Agreement.

 

6.             Salary, Bonus Payments and Related Matters. 

 

(a)  Salary.  During the period of the Executive's
employment hereunder, the Bank shall pay to the Executive a base salary of One
Hundred Forty Two Thousand Dollars ($142,000.00) per year, payable at regular
intervals in accordance with the Bank's normal payroll practices now or
hereafter in effect.  During the period
of the Executive’s employment hereunder, the Executive may receive such
discretionary increases in salary, if any, as may be granted to him from time
to time by the Board.  

 

(b)  Bonus Payments.  During the period of the Executive's
employment hereunder, the Executive may receive such discretionary bonuses, if
any, as may be granted to him from time to time by the Board.

 

(c)  Expenses.  During the period of the Executive's
employment hereunder, the Executive shall be entitled to receive prompt
reimbursement for all reasonable and customary expenses incurred by the
Executive in performing services hereunder in accordance with the general
policies and procedures established by the Bank.

 

(d)  Employee Benefits and Perks.  During the period of the Executive's
employment hereunder, the Executive shall be entitled to participate in all
employee benefits plans or arrangements of the Bank on the same basis as other
employees of the Bank including, without limitation, plans or arrangements
providing life insurance, disability insurance, sick leave, or retirement.  During the period of the Executive's
employment hereunder, the Executive shall also be entitled to (i) the
continuation of an automobile allowance of not less than the monthly amount
paid to Executive on November 1, 2006, (ii) use of the Bank provided credit
card(s), car telephone(s), pagers and such other perks (if such is (are) being
so provided) upon the terms and conditions previously in effect.

 

7.             Termination. 

 

(a)  Resignation, Retirement, Death or
Disability.  Executive's employment
hereunder shall cease at any time by Executive's resignation, retirement, death
or Disability.  Disability shall be
deemed to have occurred only after the following procedure has been satisfied:  If within 30 days after a written notice of
proposed Termination for Disability is given to Executive by the Bank,
Executive has not returned to the full-time performance of his duties, the Bank
may end Executive's employment by giving written notice of Termination for
Disability.  Such notice may be given by
the Bank following Executive's absence from Executive's duties by reason of
physical or mental disability for one hundred fifty (150) consecutive calendar
days.

 

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(b)  Termination for Cause.  Executive's employment shall cease upon a
good faith finding of Cause by the Board; provided, however, that Executive
shall be given written notice of the Board's finding of conduct by Executive
amounting to Cause for such termination. 
Said notice 

shall be accompanied by a
copy of a resolution duly adopted by the affirmative vote of not less than 

a majority of a quorum of
the Board at a duly-noticed meeting of the Board, finding that in the good
faith opinion of the Board, Executive was guilty of conduct amounting to Cause
and specifying the particulars thereof. 

 

(c)  Termination Without Cause.  Executive's employment may be terminated
Without Cause upon 30 days' notice for any reason, subject to the payment of
all amounts required by Section 8 hereof.

 

(d)  Expiration.  Executive's employment shall cease, or shall
continue on an at-will basis as provided in Section 4 hereof, upon the
expiration of the Term of this Agreement as provided in Section 4 hereof.

 

(e)  Supervisory Suspension.  If the Executive is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Sections 8(e) or (g) of the Federal Deposit Insurance
Act or similar statute, rule or regulation, the Bank's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings.  If the charges
in the notice are dismissed, the Bank shall, (i) pay the Executive all or part
of the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate (in whole or in part) any of its obligations which
were suspended.

 

(f)  Regulatory Removal.  If the Executive is removed and/or
permanently prohibited from participating in the conduct of the Bank's affairs
by an order issued under Sections 8(e) or (g) of the Federal Deposit Insurance
Act or similar statute, rule or regulation, all obligations of the Bank under
this Agreement shall terminate as of the effective date of the order.

 

8.             Payments to Executive Upon Termination or Change in
Control.

 

(a)  Death, Disability or Retirement.  In the event of Termination of this Agreement
due to Executive's death, Disability or retirement, Executive or Executive's
spouse and/or estate shall be entitled to all benefits generally available to
Bank employees, or their spouses and/or estates, as of the date of such death,
Disability or retirement, without reduction.

 

(b)  Resignation or Expiration.  In the event of Executive's resignation, or
upon Expiration, the Bank shall have no further obligations to Executive under
this Agreement or otherwise, except as may be expressly required by law.

 

(c)  Termination for Cause.  In the event Executive is Terminated for
Cause, the Bank shall have no further obligations to Executive under this Agreement
or otherwise, except as may be expressly required by law.

 

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(d)  Termination Without Cause Prior to a
Change in Control.  Upon the
occurrence of a Termination Without Cause prior to a Change in Control, the
Bank shall pay to Executive any amounts then owed to him under this Agreement,
within 30 days of the date of the notice required by Section 7(c) hereof.

 

(e)  Change in Control.  Concurrent with a Change in Control, the Bank
shall pay to Executive a lump sum payment equal to 2 times the amount of the
Total Salary paid to Executive.  Such
lump sum shall be paid concurrent with the Change in Control.

 

(f)  Source of Payments.  All payments provided in Section 8 shall be
paid in cash from the general funds of the Bank, and no special or separate
fund need be established and no other segregation of assets need be made to
assure payment.

 

(g)  Consistent Returns.  The Bank and Executive agree that the
payments being made under this Agreement represent reasonable compensation for
services and that neither the Bank nor Executive will file any returns or
reports which take a contrary position.

 

(h)  Reduction of Payment.  Notwithstanding anything in the foregoing to
the contrary, if the payments made to Executive upon a Change in Control or any
of the other payments provided for in this Agreement, together with any other
payments which Executive has the right to receive from the Bank would
constitute a "parachute payment" (as defined in Section 280G of the
Code) the payments pursuant to this Agreement shall be reduced to the largest
amount as will result in no portion of such payments being subject to the
excise tax imposed by Section 4999 of the Code; provided, however, that the
determination as to whether any reduction in the payments under this Agreement
pursuant to this proviso is necessary shall be made in good faith by the Bank’s
independent auditors or if such firm is no longer providing tax services to
Bank to such other tax advisor as shall be mutually acceptable to Bank and
Executive, and such determination shall be conclusive and binding on the Bank
and Executive with respect to the treatment of the payment for tax reporting
purposes.

 

(i)  Sole Remedy.  The receipt of the amounts described in this
Section 8, and attorneys’ fees  as set
forth in Section 12, if any, shall constitute Executive’s sole remedy for
breach of this Agreement against the Bank and its officers, directors,
employees and agents.

 

9.             Unauthorized Disclosure.  During the period of his employment hereunder
and for a period of one year following the cessation of such employment
(irrespective of the reason therefor), Executive shall not, except as required
by any court, supervisory authority or administrative agency, without the
written consent of the Board or a person authorized thereby, disclose to any
person, other than an employee of the Bank or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties as an employee of the Bank, any confidential information
obtained by him while in the employ of the Bank; provided, however, that
confidential information shall not include any information known generally to
the public (other than as a result of an unauthorized disclosure by the
Executive).  

 

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10.           Waivers not to be Continued.  Any waiver by a party of any breach of this
Agreement by the other party shall not be construed as a continuing waiver or
as a consent to any subsequent breach by the other party.

 

11.           Notices.  All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice.

 

A.                                   If
to the Bank, to:

Santa Lucia Bank

7480
El Camino Real

Atascadero,
CA  93422

Attn:
Chairman of the Board

 

B.            If to Executive, to:

John C. Hansen

Santa Lucia Bank

7480 El Camino Real

Atascadero, CA  93422

 

and to such other or
additional person or persons as either party shall have designated to the other
party in writing by like notice.

 

12.           Arbitration of Claims.  The parties agree that any and all disputes,
controversies or claims of any kind or nature, including but not limited to any
arising out of or in any way related to Executive’s employment with or
separation from the Bank or Bancorp, shall be submitted to binding arbitration
under the auspices and rules of the American Arbitration Association (“AAA”) in
Atascadero, California.  Included within
this provision are any claims alleging fraud in the inducement of this
Agreement, or relating to the general validity or enforceability of this
Agreement, or claims based on a violation of any local, state or federal law,
such as claims for discrimination or civil rights violations under Title VII of
the Civil Rights Act of 1964, the California Fair Employment and Housing Act,
the Age Discrimination in Employment Act and the Americans with Disabilities
Act.  The parties shall each bear their
own costs and attorneys’ fees incurred in conducting the arbitration and,
except for such disputes where Executive asserts a claim under a state or
federal statute prohibiting discrimination in employment (“a Statutory Claim”),
or unless required otherwise by applicable law, shall split equally the fees
and administrative costs charged by the arbitrator and AAA.  In disputes where Executive asserts a
Statutory Claim against the Bank, Executive shall be required to pay only the
AAA filing fee to the extent such filing fee does not exceed the fee to file a
complaint in state or federal court.  The
Bank shall pay the balance of the arbitrator’s fees and administrative costs.  The prevailing party in the arbitration, as
determined by the arbitrator, shall be entitled to recover his or its
reasonable attorneys’ fees and costs, including the costs or fees charged by
the arbitrator and AAA.  In disputes
where the Executive asserts a Statutory Claim, reasonable attorneys’ fees shall
be awarded by the arbitrator based on the same standard as such fees would be
awarded if the Statutory Claim had been asserted in state or federal
court.  

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Judgment
upon an award rendered by the arbitrator may be entered in any competent court
having jurisdiction over the dispute. Executive understands that arbitration is
in lieu of any and all other civil legal proceedings and that he is waiving any
right he may have to resolve disputes through court or trial by jury.

 

 

13.           General Provisions.

 

(a)  Entire Agreement.  This Agreement constitutes the entire
agreement by the parties with respect to the subject matter hereof, and
supersedes and replaces all prior agreements among or between the parties, unless
otherwise provided herein, including that certain employment agreement dated
August 1, 1998 other than any agreements between Executive and Bank pursuant to
the Bank’s or Bancorp’s Equity Plans and retirement plans including that
certain Salary Continuation Agreement 
dated as of April 15, 1998 together with all subsequent amendments
thereto.  No amendment, waiver or
termination of any of the provisions hereof shall be effective unless in
writing and signed by the party against whom it is sought to be enforced.  Any written amendment, waiver, or termination
hereof executed by the Bank and Executive shall be binding upon them and upon
all other Persons, without the necessity of securing the consent of any other
Person, and no Person shall be deemed to be a third-party beneficiary under
this Agreement.

 

(b)  Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.

 

(c)  No Waiver.  Except as otherwise expressly set forth
herein, no failure on the part of any party hereto to exercise and no delay in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.

 

(d)  Headings.  The headings of the Sections of this
Agreement have been inserted for convenience of reference only and shall in no
way restrict or modify any of the terms or provisions hereof.

 

(e)  Severability.  If for any reason any provision of this
Agreement is held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision of this
Agreement.  If any provision of this
Agreement shall be held invalid or unenforceable in part, such invalidity or
unenforceability shall in no way effect the rest of such provision not held so
invalid, and the rest of such provision, together with all other provisions of
this Agreement, shall to the full extent consistent with law continue in full
force and effect.

 

(f)  Governing Law.  This Agreement shall be governed and
construed and the legal relationships of the parties determined in accordance
with the laws of the United States and to the extent not inconsistent therewith
the laws of the State of California applicable to contracts executed and to be
performed solely in California.

 

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(g)  Advice of Counsel.  Executive acknowledges that  (i) the Agreement has been prepared by
Reitner, Stuart & Moore, counsel for the Bank and (ii) he has been
encouraged to consult with legal counsel of his choosing concerning the terms
of this Agreement prior to executing this Agreement.  Any failure by Executive to consult with
competent counsel prior to executing this Agreement shall not be a basis for
rescinding or otherwise avoiding the binding effect of this Agreement.  The parties acknowledge that they are
entering into this Agreement freely and voluntarily, with full understanding of
the terms of this Agreement. 
Interpretation of the terms and provisions of this Agreement shall not
be construed for or against either party on the basis of the identity of the
party who drafted the terms or provisions in question.

 

 

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the day and year first above written.

 

 

 

	
  ATTEST:

  	
   

  	
  SANTA LUCIA BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
   

  	
  Its: Chairman

  	
   

  	
   

  
	
   

  	
   

  	
  Print name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE EXECUTIVE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  John C. Hansen

  	
   

  	
   

  
										

 

 10Exhibit 10.68

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and
Restated Employment Agreement is made and is effective as of December 15, 2006,
by and between Santa Lucia Bank (“Bank”) and James M. Cowan (“Executive”) and
amends and restates in its entirety that certain Employment Agreement dated
November 11, 2004, between the parties.

WHEREAS, Executive
is currently employed by the Bank in the capacity as Senior Vice President and
Branch Administrator, and Executive’s background, expertise and efforts have
contributed to the success and financial strength of the Bank; and

WHEREAS, the Bank
wishes to assure itself of the continued opportunity to benefit from Executive’s
services for the period provided in this Agreement, and Executive wishes to
serve in the employ of the Bank on a full-time basis solely in accordance with
the terms hereof for such purposes; and

WHEREAS, the Board
of Directors of the Bank (“Board”) has determined that the best interests of
the Bank would be served by Executive’s continued employment with the Bank
under the terms of this Agreement;

NOW, THEREFORE, in
order to effect the foregoing, the parties hereto wish to enter into an
employment agreement on the terms and conditions set forth below.  Accordingly, in consideration of the premises
and the respective covenants and agreements of the parties herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:

1.             Definitions.

(a)   “Agreement” means this employment
agreement and any amendments hereto complying with Section 13(a) hereof.

(b)   “Board” means the Board of Directors
of the Bank unless the context otherwise requires.

(c)   “Cause” means:

(i)                                     Executive’s
personal dishonesty, incompetence or willful misconduct;

(ii)                                  Executive’s
breach of fiduciary duty involving personal profit;

(iii)          Executive’s
intentional failure to perform Executive’s duties for the Bank after a written
demand for performance is given to Executive by the Board which demand
specifically identifies the manner in which the Board believes that Executive
has not performed his duties;

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(iv)          Executive’s
willful violation of any law, rule, regulation or final cease and desist order
(other than traffic violations or similar minor offenses) to the extent
detrimental to the Bank’s business or reputation; or

(v)           Executive’s
material breach of any provision of this Agreement.

(d)   “Change in Control” means a change of
control of the Bank, or  Santa Lucia
Bancorp (“Bancorp”), of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act, whether or not the Bank or Bancorp is then subject to such
reporting requirement; provided, however, that a transaction in which the Bank
or Bancorp is the acquiror regardless of the form of the transaction shall not
be a Change in Control for purposes of this Agreement; provided further
however, that without limitation, a Change in Control shall be deemed to have
occurred if:

(i)            there
is a transfer, voluntarily or by hostile takeover, by proxy contest (or similar
action), operation of law, or otherwise, of Control of the Bank or Bancorp;

(ii)           any
Person is or becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act or any successor provisions thereof),
directly or indirectly, of securities of the Bank or Bancorp representing 20%
or more of the combined voting power of the Bank’s or Bancorp’s then outstanding
securities (other than in the case of the ownership by Bancorp of Bank
securities);

(iii)          the
individuals who were members of the Board immediately prior to a meeting of the
shareholders of the Bank or Bancorp, which meeting involves a contest for the election
of directors, do not constitute a majority of the Board following such meeting
or election;

(iv)          a
merger is completed in which the Bank or Bancorp is not the surviving entity
(unless the stockholders of Bank or Bancorp, as the case may be, immediately
before such merger own immediately after such merger more than a majority of
the voting securities of the surviving entity), a consolidation or sale of all
or substantially all of the assets of the Bank or Bancorp; or

(v)           there
is a change, during any period of two consecutive years, of a majority of the
Board or of the board of directors of Bancorp as constituted as of the
beginning of such period, unless the election of each director who is not a
director at the beginning of such period was approved by a vote of at least
two-thirds of the directors then in office who were directors at the beginning
of such period.

(e)   “Code”  shall mean the Internal Revenue Code of 1986,
as amended.

(f)    “Control”  means the possession, direct or indirect, by
any Person or “group” (as defined in Section 13(d) of the Securities Exchange
Act) of the power to direct or cause the direction

 2
 

of the management
policies of the Bank or Bancorp, whether through ownership of voting
securities, by contract or otherwise, and in any case means the ability to
determine the election of a majority of the directors of the Bank or Bancorp.

(g)   “Disability” means physical or mental
illness resulting in Executive’s absence on a full-time basis from Executive’s
duties with the Bank or Bancorp for 180 calendar days, subject to the procedure
described in Section 7(a).

(h)   “Expiration” means the termination of
this Agreement (including Executive’s employment hereunder) and of any further
obligations of the parties (except as specified in this Agreement) upon
completion of the Term.

(i)    “Person” means an individual, a group
acting in concert, a corporation, a partnership, an association, a joint stock
company, a trust, any unincorporated organization, a government or political
subdivision thereof, or any other entity whatsoever.

(j)    “Term” means the initial term of this
Agreement and any extensions hereof, as provided in Section 4, prior to a
Change in Control.

(k)   “Termination” or “Terminate(d)” means
the termination of Executive’s employment hereunder for any of the following
reasons unless the context indicates otherwise:

(i)            Retirement
by Executive;

(ii)           Death
of Executive;

(iii)          Disability;

(iv)          Expiration;

(v)           Resignation;

(vi)          Termination
Without Cause; and

(vii)         Termination
for Cause.

(l)    “Termination Without Cause” or “Terminate(d)
Without Cause” means the cessation of Executive’s employment hereunder for
any reason except:

(i)            A
resignation by Executive;

(ii)           Termination
for Cause;

(iii)          Retirement;

 3
 

(iv)          Disability;

(v)           Death;
or

(vi)          Expiration.

(m)  “Total Salary” shall mean the total amount of
salary paid Executive in the prior 12 months.

2.             Employment.  The Bank hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue to serve the Bank,
for the period stated in Section 4 hereof and upon the terms and conditions set
forth herein.

3.             Position and Responsibilities.  The Executive shall serve as Senior Vice
President and Branch Administrator of the Bank and, subject to the provisions
of Section 5 below, shall have such responsibilities, duties and authority as
are generally associated with such positions and as may from time to time be
assigned to the Executive by the Board that are consistent with such
responsibilities, duties and authority. 
During the Term of this Agreement, the Executive shall devote all his
time, attention, skill and efforts during normal business hours to the business
and affairs of the Bank; provided, however, this provision shall not preclude
Executive from serving as a Director or member of a committee of any other
organization involving no conflict of interests with the interests of the Bank,
from engaging in charitable and community activities and from managing his
personal investments, provided that such activities do not materially interfere
with the regular performance of his duties and responsibilities under this
Agreement.

4.             Term of Agreement.  Subject to the terms and provisions of this
Agreement, this Agreement and the period of Executive’s employment shall be
deemed to have commenced as of December 15, 2006, and shall continue for an
initial term expiring on December 31, 2007, unless extended as provided
herein.  Prior to a Change in Control,
the initial term shall automatically be extended for an additional one (1) full
calendar year without further action by the parties on January 1, 2008, and on
each succeeding January 1 thereafter; provided that each party, Bank or
Executive, may stop an automatic calendar year extension by serving written
notice upon the other within 90 calendar days prior to January 1, 2008, or
within 90 calendar days prior to January 1 of any succeeding year, as the case
may be, of such party’s intention that this Agreement shall expire at the end
of such Term.  In the event the Bank
retains Executive as an employee following the expiration of the Term, such
employment, absent a written agreement to the contrary, will be on an at-will
basis with such compensation and upon such terms as the parties may then agree,
subject to termination at any time with or without cause, and without
liability.  If the Bank does not retain
Executive as an employee after the Expiration of the Term, Executive’s
employment shall cease without further liability of the parties to each
other.  Executive’s employment shall also
terminate, and the Term of this Agreement will expire, upon Executive’s
resignation, retirement, death or Disability, or upon Executive’s Termination
for Cause or Termination Without Cause; provided further that the Term of the
Agreement shall be deemed to have terminated upon a Change in Control and the
payment to Executive of all amounts owed to him upon a Change in Control as
provided in Section 8(e) hereof.

 4
 

5.             Additional Duties.  With the approval of the Board, from time to
time, Executive may serve, or continue to serve, on the boards of directors of,
and hold any other offices or positions in, companies or charitable, political
or civic organizations, which, in such Board’s judgment, will not present any
material conflict of interest with the Bank and will not unfavorably affect the
performance of Executive’s duties pursuant to this Agreement.

6.               Salary, Bonus Payments and
Related Matters.

(a)   Salary.   During the period of the Executive’s
employment hereunder, the Bank shall pay to the Executive a base salary of One
Hundred Five Thousand Dollars ($105,000.00) per year, payable at regular
intervals in accordance with the Bank’s normal payroll practices now or
hereafter in effect.  During the period
of the Executive’s employment hereunder, the Executive may receive such
discretionary increases in salary, if any, as may be granted to him from time
to time by the Board.

(b)   Bonus Payments.   During the period of the Executive’s
employment hereunder, the Executive may receive such discretionary bonuses, if
any, as may be granted to him from time to time by the Board.

(c)   Expenses.  During the period of the Executive’s
employment hereunder, the Executive shall be entitled to receive prompt
reimbursement for all reasonable and customary expenses incurred by the
Executive in performing services hereunder in accordance with the general
policies and procedures established by the Bank.

(d)   Employee Benefits and Perks.  During the period of the Executive’s
employment hereunder, the Executive shall be entitled to participate in all
employee benefits plans or arrangements of the Bank on the same basis as other
employees of the Bank including, without limitation, plans or arrangements
providing life insurance, disability insurance, sick leave, or retirement.  During the period of the Executive’s
employment hereunder, the Executive shall also be entitled to (i) the
continuation of an automobile allowance of not less than the monthly amount
paid to Executive on November 1, 2006, (ii) use of the Bank provided credit
card(s), car telephone(s), pagers and such other perks (if such is (are) being
so provided) upon the terms and conditions previously in effect.

7.             Termination.

(a)   Resignation, Retirement, Death or
Disability.  Executive’s employment
hereunder shall cease at any time by Executive’s resignation, retirement, death
or Disability.  Disability shall be
deemed to have occurred only after the following procedure has been
satisfied:  If within 30 days after a written
notice of proposed Termination for Disability is given to Executive by the
Bank, Executive has not returned to the full-time performance of his duties,
the Bank may end Executive’s employment by giving written notice of Termination
for Disability.  Such notice may be given
by the Bank following Executive’s absence from Executive’s duties by reason of
physical or mental disability for one hundred fifty (150) consecutive calendar
days.

 5
 

(b)   Termination for Cause.  Executive’s employment shall cease upon a
good faith finding of Cause by the Board; provided, however, that Executive
shall be given written notice of the Board’s finding of conduct by Executive
amounting to Cause for such termination. 
Said notice shall be accompanied by a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of a quorum of the Board at
a duly-noticed meeting of the Board, finding that in the good faith opinion of
the Board, Executive was guilty of conduct amounting to Cause and specifying
the particulars thereof.

(c)   Termination Without Cause.  Executive’s employment may be terminated
Without Cause upon 30 days’ notice for any reason, subject to the payment of
all amounts required by Section 8 hereof.

(d)   Expiration.  Executive’s employment shall cease, or shall
continue on an at-will basis as provided in Section 4 hereof, upon the
expiration of the Term of this Agreement as provided in Section 4 hereof.

(e)   Supervisory Suspension.  If the Executive is suspended and/or
temporarily prohibited from participating in the conduct of the Bank’s affairs
by a notice served under Sections 8(e) or (g) of the Federal Deposit Insurance
Act or similar statute, rule or regulation, the Bank’s obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings.  If the charges
in the notice are dismissed, the Bank shall, (i) pay the Executive all or part
of the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate (in whole or in part) any of its obligations which
were suspended.

(f)    Regulatory Removal.  If the Executive is removed and/or
permanently prohibited from participating in the conduct of the Bank’s affairs
by an order issued under Sections 8(e) or (g) of the Federal Deposit Insurance
Act or similar statute, rule or regulation, all obligations of the Bank under
this Agreement shall terminate as of the effective date of the order.

8.             Payments to Executive Upon
Termination or Change in Control.

(a)   Death, Disability or Retirement.  In the event of Termination of this Agreement
due to Executive’s death, Disability or retirement, Executive or Executive’s
spouse and/or estate shall be entitled to all benefits generally available to
Bank employees, or their spouses and/or estates, as of the date of such death,
Disability or retirement, without reduction.

(b)   Resignation or Expiration.  In the event of Executive’s resignation, or
upon Expiration, the Bank shall have no further obligations to Executive under
this Agreement or otherwise, except as may be expressly required by law.

(c)   Termination for Cause.  In the event Executive is Terminated for
Cause, the Bank shall have no further obligations to Executive under this
Agreement or otherwise, except as may be expressly required by law.

 6
 

(d)   Termination Without Cause Prior to a
Change in Control.  Upon the
occurrence of a Termination Without Cause prior to a Change in Control, the
Bank shall pay to Executive any amounts then owed to him under this Agreement,
within 30 days of the date of the notice required by Section 7(c) hereof.

(e)   Change in Control.  Concurrent with a Change in Control, the Bank
shall pay to Executive a lump sum payment equal to 1 time the amount of the
Total Salary paid to Executive.  Such
lump sum shall be paid concurrent with the Change in Control.

(f)    Source of Payments.  All payments provided in Section 8 shall be
paid in cash from the general funds of the Bank, and no special or separate
fund need be established and no other segregation of assets need be made to
assure payment.

(g)   Consistent Returns.  The Bank and Executive agree that the
payments being made under this Agreement represent reasonable compensation for
services and that neither the Bank nor Executive will file any returns or
reports which take a contrary position.

(h)   Reduction of Payment.  Notwithstanding anything in the foregoing to
the contrary, if the payments made to Executive upon a Change in Control or any
of the other payments provided for in this Agreement, together with any other
payments which Executive has the right to receive from the Bank would
constitute a “parachute payment” (as defined in Section 280G of the Code) the
payments pursuant to this Agreement shall be reduced to the largest amount as
will result in no portion of such payments being subject to the excise tax
imposed by Section 4999 of the Code; provided, however, that the determination
as to whether any reduction in the payments under this Agreement pursuant to
this proviso is necessary shall be made in good faith by the Bank’s independent
auditors or if such firm is no longer providing tax services to Bank to such
other tax advisor as shall be mutually acceptable to Bank and Executive, and
such determination shall be conclusive and binding on the Bank and Executive
with respect to the treatment of the payment for tax reporting purposes.

(i)    Sole Remedy.  The receipt of the amounts described in this
Section 8, and attorneys’ fees  as set
forth in Section 12, if any, shall constitute Executive’s sole remedy for
breach of this Agreement against the Bank and its officers, directors,
employees and agents.

9.             Unauthorized Disclosure.  During the period of his employment hereunder
and for a period of one year following the cessation of such employment
(irrespective of the reason therefor), Executive shall not, except as required
by any court, supervisory authority or administrative agency, without the
written consent of the Board or a person authorized thereby, disclose to any
person, other than an employee of the Bank or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties as an employee of the Bank, any confidential
information obtained by him while in the employ of the Bank; provided, however,
that confidential information shall not include any information known generally
to the public (other than as a result of an unauthorized disclosure by the
Executive).

 7
 

10.           Waivers not to be Continued.  Any waiver by a party of any breach of this
Agreement by the other party shall not be construed as a continuing waiver or
as a consent to any subsequent breach by the other party.

11.           Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed, certified or registered mail, return
receipt requested, with postage prepaid, to the following addresses or to such
other address as either party may designate by like notice.

A.                                   If
to the Bank, to:

Santa Lucia Bank

7480 El Camino Real

Atascadero, CA  93422

Attn: Chairman of the Board

B.            If to Executive, to:

James M. Cowan

Santa Lucia Bank

7480 El Camino Real

Atascadero,
CA  93422

and to such other or
additional person or persons as either party shall have designated to the other
party in writing by like notice.

12.           Arbitration of Claims.  The parties agree that any and all disputes,
controversies or claims of any kind or nature, including but not limited to any
arising out of or in any way related to Executive’s employment with or
separation from the Bank or Bancorp, shall be submitted to binding arbitration
under the auspices and rules of the American Arbitration Association (“AAA”) in
Atascadero, California.  Included within
this provision are any claims alleging fraud in the inducement of this
Agreement, or relating to the general validity or enforceability of this
Agreement, or claims based on a violation of any local, state or federal law,
such as claims for discrimination or civil rights violations under Title VII of
the Civil Rights Act of 1964, the California Fair Employment and Housing Act,
the Age Discrimination in Employment Act and the Americans with Disabilities
Act.  The parties shall each bear their
own costs and attorneys’ fees incurred in conducting the arbitration and,
except for such disputes where Executive asserts a claim under a state or
federal statute prohibiting discrimination in employment (“a Statutory Claim”),
or unless required otherwise by applicable law, shall split equally the fees
and administrative costs charged by the arbitrator and AAA.  In disputes where Executive asserts a
Statutory Claim against the Bank, Executive shall be required to pay only the
AAA filing fee to the extent such filing fee does not exceed the fee to file a
complaint in state or federal court.  The
Bank shall pay the balance of the arbitrator’s fees and administrative
costs.  The prevailing party in the
arbitration, as determined by the arbitrator, shall be entitled to recover his
or its reasonable attorneys’ fees and costs, including the costs or fees
charged by the arbitrator and AAA.  In
disputes where the Executive asserts a Statutory Claim, reasonable attorneys’
fees shall be awarded by the arbitrator based on the same standard as such fees
would be awarded if the Statutory Claim had been asserted in state or federal
court.

 8
 

Judgment upon an award
rendered by the arbitrator may be entered in any competent court having
jurisdiction over the dispute. Executive understands that arbitration is in
lieu of any and all other civil legal proceedings and that he is waiving any
right he may have to resolve disputes through court or trial by jury.

13.           General Provisions.

(a)   Entire Agreement.  This Agreement constitutes the entire
agreement by the parties with respect to the subject matter hereof, and
supersedes and replaces all prior agreements among or between the parties,
unless otherwise provided herein, other than any agreements between Executive
and Bank pursuant to the Bank’s or Bancorp’s Equity Plans and retirement plans
including that certain Salary Continuation Agreement  dated as of January 18, 2001 together with
all subsequent amendments thereto.  No
amendment, waiver or termination of any of the provisions hereof shall be
effective unless in writing and signed by the party against whom it is sought
to be enforced.  Any written amendment,
waiver, or termination hereof executed by the Bank and Executive shall be
binding upon them and upon all other Persons, without the necessity of securing
the consent of any other Person, and no Person shall be deemed to be a third-party
beneficiary under this Agreement.

(b)   Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.

(c)   No Waiver.  Except as otherwise expressly set forth
herein, no failure on the part of any party hereto to exercise and no delay in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.

(d)   Headings.  The headings of the Sections of this
Agreement have been inserted for convenience of reference only and shall in no
way restrict or modify any of the terms or provisions hereof.

(e)   Severability.  If for any reason any provision of this
Agreement is held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision of this
Agreement.  If any provision of this
Agreement shall be held invalid or unenforceable in part, such invalidity or
unenforceability shall in no way effect the rest of such provision not held so
invalid, and the rest of such provision, together with all other provisions of
this Agreement, shall to the full extent consistent with law continue in full
force and effect.

(f)    Governing Law.  This Agreement shall be governed and
construed and the legal relationships of the parties determined in accordance
with the laws of the United States and to the extent not inconsistent therewith
the laws of the State of California applicable to contracts executed and to be
performed solely in California.

 9
 

(g)   Advice of Counsel.  Executive acknowledges that  (i) the Agreement has been prepared by
Reitner, Stuart & Moore, counsel for the Bank and (ii) he has been
encouraged to consult with legal counsel of his choosing concerning the terms
of this Agreement prior to executing this Agreement.  Any failure by Executive to consult with
competent counsel prior to executing this Agreement shall not be a basis for
rescinding or otherwise avoiding the binding effect of this Agreement.  The parties acknowledge that they are entering
into this Agreement freely and voluntarily, with full understanding of the
terms of this Agreement.  Interpretation
of the terms and provisions of this Agreement shall not be construed for or
against either party on the basis of the identity of the party who drafted the
terms or provisions in question.

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	
  ATTEST:

  	
   

  	
  SANTA LUCIA BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its: Chairman

  
	
   

  	
   

  	
  Print name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE EXECUTIVE

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  James M. Cowan

  
					

 

 10

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