Document:

EXHIBIT 10.31

 

AGREEMENT

 

This Agreement is entered into as of the 24th day of
March, 2005 by and between Ibis Technology Corporation, a Massachusetts
corporation (the “Company”) and William Schmidt (the “Executive”).

 

WHEREAS the Executive is Chief Financial Officer of
the Company and has been employed in such capacity since May 2004;

 

WHEREAS because of the skills and experience of the
Executive and his knowledge of the Company, his service to the Company is very
important to the future success of the Company;

 

WHEREAS the Executive desires to enter into this
Agreement to provide him with certain financial protection in the event that
his employment terminates for certain reasons in connection with or within a
period of time after a change of control of the Company; and

 

WHEREAS the Board of Directors of the Company has
determined that it is in the best interests of the Company to enter into this
Agreement.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
the Executive agree as follows:

 

1.             DEFINITIONS.

 

(a)           Cause.  As used herein, “Cause” shall mean a
termination for one or more of the following reasons, as determined by a
majority vote of the Board: 
(i) Executive’s continuing failure to render services to the
Company in accordance with his assigned duties and such failure of performance
continues for a period of more than 120 days after notice thereof has been
provided to the Executive by the Board; (ii) the Executive’s willful
misconduct or gross negligence; (iii) the Executive is convicted of a
felony, either in connection with the performance of his obligations to the
Company or which conviction materially adversely affects his ability to perform
such obligations, or materially adversely affects the business activities,
reputation, goodwill or image of the Company; (iv) willful disloyalty,
deliberate dishonesty, and breach of fiduciary duty; (v) the commission by
the Executive of an act of fraud, embezzlement or deliberate disregard of the
rules or policies of the Company which results in significant loss, damage or
injury to the Company; (vi) the Executive’s willful unauthorized
disclosure of any trade secret or confidential information of the Company; or
(vii) Executive’s willful commission of an act which constitutes unfair
competition with the Company or which induces any employee or customer of the
Company to break a contract with the Company.

 

In making any determination under this Section 1(a),
the Board shall act fairly and in utmost good faith and shall give the
Executive an opportunity to appear and be heard at a meeting of the Board or
any committee thereof and present evidence on his behalf.  For purposes of this Section, no act, or
failure to act, by the Executive shall be considered “willful” unless

 

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done, or admitted to be done, by the Executive in bad
faith and without reasonable belief that such action or omission was in the
best interest of the Company.

 

(b)           Change
Of Control.  As used herein, a “Change
of Control” shall be deemed to have occurred if (i) there is a sale or
transfer of all or substantially all of the assets of the Company in one or a
series of transactions; (ii) any “person,” as such term is used in
Section 13(d) of the Securities Exchange Act of 1934, as amended (or any
successor provision) (the “Exchange Act”), together with all “affiliates” and “associates”
(as such terms are defined in Rule 12b-2 under the Exchange Act or any
successor provision) of such person, shall become the “beneficial owner” or “beneficial
owners” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act or any
successor provision), directly or indirectly, of securities of the Company
representing in the aggregate thirty percent (30%) or more of either
(1) the then outstanding shares of common stock of the Company or
(2) the combined voting power of all then outstanding securities of the
Company having the right under ordinary circumstances to vote in an election of
the Board of Directors of the Company (hereafter referred to as an “Acquisition”);
PROVIDED, that, notwithstanding the foregoing, an Acquisition shall not be
deemed to have occurred for purposes of this clause (ii) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of common stock or other voting securities outstanding,
increases (x) the proportionate number of shares of common stock
beneficially owned by any person to thirty percent (30%) or more of the common
stock then outstanding or (y) the proportionate voting power represented
by the voting securities beneficially owned by any person to thirty percent
(30%) or more of the combined voting power of all then outstanding voting
securities; or (iii) there is a merger or consolidation between the
Company and an entity other than a subsidiary of the Company in which the
Company is not the continuing or surviving corporation and pursuant to which
the holders of the Company’s voting stock immediately prior to such merger or
consolidation would not be the holders immediately after such merger or
consolidation of at least 50% of the voting stock of the continuing or
surviving corporation.

 

©             Good
Reason.  As used herein, a “Good
Reason” shall mean a material change in the Executive’s authority, functions,
duties or responsibilities as Chief Financial Officer of the Company
(including, without limitation, material changes in the control or managerial
structure of the Company) which would cause his position with the Company to
become of less dignity, responsibility, importance or scope than his position
on the date hereof or as of any subsequent date prior to the Change of Control,
a reduction in the Executive’s salary or a material reduction in benefits from
the amount of salary paid or the value of the benefits available on the date
hereof or as of any subsequent date prior to the Change of Control, a transfer
of the principal location of the place of performance of the Executive’s duties
from the Danvers, Massachusetts area without the Executive’s consent, or the
failure of the Board of Directors of the Company to elect the Executive as
Chief Financial Officer of the Company at any time such elections are made, or
removal from such office of the Company, PROVIDED that such material change is
not in connection with a termination of the Executive’s employment for Cause,
and, PROVIDED, FURTHER, that any notice of termination by the Executive for
Good Reason shall be given by him within ninety (90) days of when he becomes
aware of such change, of such failure or removal.

 

 

2.             SEVERANCE
COMPENSATION.  In the event that at or
near the time of, in connection with, or within a period of two (2) years
after, a Change of Control, the Executive’s employment with the Company is
terminated either (i) by the Company other than for Cause or (ii) by
the Executive for a Good Reason, then the Company, within ten (10) days of the
applicable termination date, shall pay to the Executive, in addition to any
amounts due to Executive for services rendered prior to the termination date, a
lump sum amount equal to one (1) times the Executive’s highest Annual Salary
during the preceding three year period, including the year of such
termination.  Annual Salary shall mean
Executive’s annual base salary and bonus, excluding reimbursements and amounts
attributable to stock options and other non-cash compensation.

 

3.             CONTINUATION
OF BENEFITS.  In the event that at the
time of, in connection with, or within a period of (2) two years after a Change
in Control, the Executive’s employment with the Company is terminated either
(i) by the Company other than for Cause or (ii) by the Executive for
a Good Reason, then the Company shall arrange to provide the Executive with
life, disability, group dental and health insurance benefits substantially
similar to those the Executive was receiving, immediately prior to the
termination, until the earlier of (a) one (1) years following his
termination date, or (b) the date upon which she becomes eligible for such
coverage offered by a subsequent employer. 
Executive’s termination date shall be the date of any qualifying event
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and
the COBRA coverage that may be available to Executive, if any, shall be offset
by any period of coverage provided hereunder.

 

3A.          SPECIFIED
EMPLOYEE.  Notwithstanding the provisions
of Sections 2 and 3, if the Executive is a “specified employee” within the
meaning of Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as
amended (the “Code”), then payment of the amount described in Section 2(a)
shall be made on the date which is six (6) months after the applicable
termination date or, if earlier, the date of death of the Executive, and the
benefit described in Section 3 shall commence on the date which is six (6)
months after the applicable termination date and, subject to the other
provisions of Section 3, continue until thirty (30) months after the
applicable termination date.

 

4.             NO
DUPLICATION OF COMPENSATION OR BENEFITS. 
The Executive’s severance compensation and benefits set forth in
Sections 2 and 3 above shall replace, and be provided in lieu of, any
severance compensation and benefits that may be provided to Executive under any
other agreement, PROVIDED, that this prohibition against duplication shall not
be construed to otherwise limit Executive’s rights as to payments or benefits
provided under any pension plan (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended), deferred compensation,
stock, stock option or similar plan sponsored by the Company.

 

5.             ENFORCEABILITY;
REDUCTION.

 

(a)           If
any provision of this Agreement shall be deemed invalid or unenforceable as
written, this Agreement shall be construed, to the greatest extent possible, or
modified, to the extent allowable by law, in a manner which shall render it
valid and enforceable and any limitation on the scope or duration of any
provision necessary to make it valid and enforceable

 

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shall be deemed to be a part thereof.  No invalidity or unenforceability of any
provision contained herein shall affect any other portion of this Agreement.

 

(b)           Notwithstanding
anything provided herein, if the Executive is a “disqualified individual” (as
defined in Section 280G of the Internal Revenue Code (“Code”), and the
severance compensation and continuation of benefits provided for in
Sections 2 and 3 hereof (collectively “Severance Compensation”) together
with any other payments which the Executive has the right to receive from the
Company (or its affiliates and subsidiaries), would constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Code), the Severance
Compensation shall be reduced.  The
reduction shall be in an amount so that the present value of the total amount
received by the Executive from the Company (or its affiliates and subsidiaries)
will be one dollar ($1.00) less than three (3) times the Executive’s Base
Amount (as defined in Section 280G of the Code) so that no portion of the
amounts received by the Executive shall be subject to the excise tax imposed by
Section 4999 of the Code (excise tax).

 

The determination as to whether any reduction in
Severance Compensation is necessary and the amount of any such reduction shall
be made by the Company’s independent public accountants (the “Accounting Firm”)
which shall provide detailed supporting calculations both to the Company and to
the Executive within fifteen (15) business days of the Executive’s termination
date.  Any such determination by the
Accounting Firm shall be conclusive and binding upon the Executive and the
Company.  The Executive shall determine
which part of the Severance Compensation shall be eliminated or reduced
consistent with the requirements of this Section 5 and shall notify the
Company promptly in writing; PROVIDED, that if the Executive does not make such
determination within ten (10) business days of the receipt of the calculations
made by the Accounting Firm, the Company shall determine which part of the
Severance Compensation shall be eliminated or reduced consistent with the
requirements of this Section 5 and shall notify the Executive promptly in
writing of such election.

 

If through error or otherwise the Executive should
receive payments under this Agreement, together with other payments the
Executive has the right to receive from the Company (or its affiliates and
subsidiaries), in excess of one dollar ($1.00) less than three times his Base
Amount, the Executive shall immediately repay the excess to the Company upon
notification that an overpayment has been made.

 

6.             MITIGATION.  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
herein be reduced by any compensation earned by the Executive as the result of
employment by another employer or by retirement benefits after the termination
date or otherwise.

 

7.             NOTICES.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party’s address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission, (iii) sent by
overnight courier, or (iv) sent by registered or certified mail, return
receipt requested, postage prepaid.

 

 

If to the Company:

 

	
   

  	
  Ibis Technology Corporation

  
	
   

  	
   

  
	
   

  	
  32 Cherry Hill Drive

  
	
   

  	
   

  
	
   

  	
  Danvers, MA 01923

  
	
   

  	
   

  
	
   

  	
  Attn: Board of Directors

  

 

If to the Executive:

 

	
   

  	
  William Schmidt

  

 

All notices, requests, consents and other
communications hereunder shall be deemed to have been given either (i) if
by hand, at the time of the delivery thereof to the receiving party at the
address of such party set forth above, (ii) if made by telex, telecopy or
facsimile transmission, at the time that receipt thereof has been acknowledged
by electronic confirmation or otherwise, (iii) if sent by overnight
courier, on the next business day following the day such notice is delivered to
the courier service, or (iv) if sent by registered or certified mail, on
the 5th business day following the day such mailing is made.

 

8.             ENTIRE
AGREEMENT.  This Agreement embodies the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior oral or written agreements
and understandings relating to the subject matter hereof.  No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms
and provisions of this Agreement.

 

9.             MODIFICATIONS
AND AMENDMENTS.  The terms and provisions
of this Agreement may be modified or amended only by written agreement executed
by all parties hereto.

 

10.           WAIVERS
AND CONSENTS.  The terms and provisions
of this Agreement may be waived, or consent for the departure therefrom
granted, only by written document executed by the party entitled to the
benefits of such terms or provisions.  No
such waiver or consent shall be deemed to be or shall constitute a waiver or
consent with respect to any other terms or provisions of this Agreement,
whether or not similar.  Each such waiver
or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or
consent.

 

11.           ASSIGNMENT.  The rights and obligations under this
Agreement may not be assigned by either party hereto without the prior written
consent of the other party.

 

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12.           INDEPENDENT
ADVICE; BENEFIT.  The Executive agrees
and acknowledges that he has had the opportunity to seek independent advice
from legal, accounting and tax advisors of his own choosing in connection with
this Agreement.  All statements,
representations, warranties, covenants and agreements in this Agreement shall
be binding on the parties hereto and shall inure to the benefit of the
respective successors and permitted assigns of each party hereto.  Nothing in this Agreement shall be construed
to create any rights or obligations except among the parties hereto, and no person
or entity shall be regarded as a third-party beneficiary of this Agreement.

 

13.           GOVERNING
LAW.  This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
governed by the law of the Commonwealth of Massachusetts, without giving effect
to the conflict of law principles thereof.

 

14.           JURISDICTION
AND SERVICE OF PROCESS.  Any legal action
or proceeding with respect to this Agreement may be brought in the courts of
the Commonwealth of Massachusetts or of the United States of America for the District
of Massachusetts.  By execution and
delivery of this Agreement, each of the parties hereto accepts for itself and
in respect of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts.  Each of the
parties hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the party at its address set
forth in Section 7 hereof.

 

15.           NO
WAIVER OF RIGHTS, POWERS AND REMEDIES. 
No failure or delay by a party hereto in exercising any right, power or
remedy under this Agreement, and no course of dealing between the parties
hereto, shall operate as a waiver of any such right, power or remedy of the party.  No single or partial exercise of any right,
power or remedy under this Agreement by a party hereto, nor any abandonment or
discontinuance of steps to enforce any such right, power or remedy, shall
preclude such party from any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. 
The election of any remedy by a party hereto shall not constitute a
waiver of the right of such party to pursue other available remedies.  No notice to or demand on a party not expressly
required under this Agreement shall entitle the party receiving such notice or
demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.

 

16.           COUNTERPARTS.  This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IBIS TECHNOLOGY

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Authorized Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILLIAM SCHMIDTExhibit 10.4

 

EMPLOYMENT
AGREEMENT 

 

This Agreement is made and is effective as of June 1, 2003, by and
between Coast National Bank, a national banking association (“Coast”), and
Coast Bancorp, a California corporation (“Bancorp”) and Davina A. Palazzo (“Executive”).

 

WHEREAS, Executive is currently employed by Coast in the capacity as
Executive Vice President and Manager of the Small Business Lending Center, and
Executive’s background, expertise and efforts have contributed to the success
and financial strength of Coast; and

 

WHEREAS, Coast 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 Coast on a full-time basis
solely in accordance with the terms hereof for such purposes; and

 

WHEREAS, the Board of Directors of Coast (“Board”) has determined that
the best interests of Coast would be served by Executive’s continued employment
with Coast 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 15(a) hereof.

 

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

 

(c) “Cause” means:

 

(1) Executive commits any act of embezzlement, fraud,
dishonesty or breach of fiduciary duty;

 

(2) Executive commits any act of unauthorized disclosure of
any secrets

 

 

or

or confidential information of the Bank or induces any client, employee
or customer of the Bank to break any contract with the Bank;

 

(3) Executive engages in illegal activity
which materially adversely affects Coast’s reputation in the community or which
evidences the lack of Executive’s fitness or ability to perform Executive’s
duties as determined by the Board of Directors in good faith;

 

(4) Executive commits any act which would
cause termination of coverage under Coast’s Bankers’ Blanket Bond as to Executive
(as distinguished from termination of coverage as to Coast as a whole).

 

(d) “Change in Control” means a change of control of Coast or
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 Coast or Bancorp is then subject to such reporting requirement;
provided, however, that without limitation, a Change in Control shall be deemed
to have occurred if:

 

(1)           there
is a transfer, voluntarily or by hostile takeover, by proxy contest (or similar
action), operation of law, or otherwise, of control of Coast or Bancorp;

 

(2)           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 Bancorp representing 20% or more of
the combined voting power of Bancorp’s then outstanding securities;

 

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

 

(4)           a
merger or consolidation (in which Bancorp is not the surviving entity) or sale
of all or substantially all of the assets of Bancorp; or

 

(5)           there
is a change, during any period of two consecutive years, of a majority of the
Board of Directors of Bancorp as constituted as of the beginning

 

2

 

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 of the management policies of
Coast 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 Bancorp.

 

(g) “Disability” means physical or mental illness defined as
Executive being unable to fully perform the duties required under this
Agreement for a continuous period of ninety (90) days or a cumulative period of
one hundred twenty (120) days in any one calendar year. If there should be a
dispute between Coast and Executive as to Executive’s physical or mental
disability for purposes of this Agreement, the question shall be settled by the
opinion of an impartial reputable physician or psychiatrist agreed upon by the
parties or their representatives, or if the parties cannot agree within ten
(10) days after a request for designation of such party, then by a physician or
psychiatrist designated by the Los Angeles County Medical Association. The
certification of such physician or psychiatrist as to the question in dispute
shall be final and binding upon the parties hereto.

 

(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) “Failure to Perform Duties” means Executive fails to perform
or habitually neglects the duties which she is required to perform hereunder.

 

(j) “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.

 

(k) “Resign for Good Reason” or “Resignation for Good Reason”
has the meaning found in Section 7(e).

 

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

 

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

 

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(1)           Retirement
by Executive;

 

(2)           Death
of Executive;

 

(3)           Disability;

 

(4)           Expiration;

 

(5)           Resignation
for Good Reason;

 

(6)           Resignation
other than Resignation for Good Reason;

 

(7)           Termination
Without Cause; and

 

(8)           Termination
for Cause.

 

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

 

(1)           A
resignation by Executive;

 

(2)           Termination
for Cause;

 

(3)           
Retirement;

 

(4)           Disability;

 

(5)           Death;
or

 

(6)           Expiration.

 

2.             At-Will Employment.
Pursuant to the provisions of 12 U.S.C. Section 24 (i.e., The National Bank
Act) and notwithstanding any other provision to the contrary contained herein,
it is agreed by the parties hereto that the Executive’s employment by Coast
hereunder shall be at-will, and that Coast may at any time elect to terminate
this Agreement and Executive’s employment by Coast for any reason by action of
its Board.

 

3.             Position and
Responsibilities. The Executive shall serve as Executive Vice President and
Manager of the Small Business Lending Center of Coast 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.

 

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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 June
1, 2003 and shall continue for an initial term of five years thereafter until
12:00 midnight May 31, 2008, unless sooner terminated. In the event Coast 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 Coast
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 (unless resignation is for
Good Reason after a Change in Control), retirement, death or Disability, or
upon Executive’s Termination for Cause.

 

5.             Full Time, Exclusive
Employment. During the Term hereof, Executive shall devote exclusively all
of her business time, attention, skill and efforts to the faithful performance
of the business of Coast to the fullest extent necessary to properly discharge
her duties and responsibilities hereunder and consistent with the highest and
best standards of the banking industry and in compliance with all applicable
laws, regulations and rules as well as Coast’s Articles of Incorporation and
Bylaws. Further, 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 Coast and will not unfavorably affect the performance
of Executive’s duties pursuant to this Agreement.

 

6.             Compensation.

 

(a)   Salary.   For Executive’s
services hereunder, Coast shall pay or cause to be paid as annual base salary
(gross) to Executive at least the sums set forth in accordance with the
following schedule during the term of this Agreement: 

 

	
  June 1, 2003 - May 31, 2004

  	
   

  	
  $115,000.00;

  
	
  June 1, 2004 - May 31, 2005

  	
   

  	
  $125,000.00;

  
	
  June 1, 2005 - May 31, 2006

  	
   

  	
  $125,000.00;

  
	
  June 1, 2006 - May 31, 2007

  	
   

  	
  $140,000.00; and

  
	
  June 1, 2007 - May 31, 2008

  	
   

  	
  $140,000.00

  

 

Said salary shall be payable in equal installments in conformity with
Coast’s normal payroll practice, and shall be paid less all applicable taxes,
with holdings, and deductions.

 

(b)   Bonuses.   Executive may
receive an annual bonus in an amount to be determined by the Board of Directors
in its sole discretion.

 

5

 

(c) Vacation. Executive shall be entitled to up to four (4)
weeks of vacation each year during the Term, which vacation shall be taken at
such times as are agreed upon by Executive and the Board of Directors;
provided, however, that during each year of the Term, Executive is required to
and shall take at least two (2) weeks of said vacation (the “Mandatory Vacation”),
which shall be taken consecutively. Executive shall not be entitled to vacation
pay in lieu of vacation; provided, however, that any vacation days earned but
not used in any year may be carried over to future years, subject to any cap or
limitation on vacation benefit accrual that may be contained in Coast’s
Employee Policy Guide (which cap or limitation is hereby incorporated by
reference).

 

(d) Automobile. Commencing on the Effective Date and during the
entire Term hereunder, the Bank shall pay to Executive, as an automobile
allowance, the sum of Four Hundred Dollars ($400) per month.

 

(e) Group Medical and Life Insurance Benefits. Coast, as its
expense, shall provide for Executive medical, dental, accident, disability and
death benefits equivalent to the normal and customary benefits available from
time to time under the California Banker’s Association Group Insurance Program
(or equivalent) for an employee of Executive’s salary level.

 

(f)  Stock Option. In addition to those stock options
that have already been granted to the Executive prior to the commencement of
this Agreement, during the term of this Agreement, Bancorp may grant to
Executive stock options to purchase Bancorp’s common stock in such amount as
may be determined in the sole discretion of the Board of Directors of Bancorp
and pursuant to such terms as are contained in Bancorp’s Stock Option Plan or
Plans as may be in effect during the term of this Agreement.

 

(g) Club Membership. During the Term of this Agreement, Coast
shall provide the Executive with a membership to the San Luis Obispo Golf and
Country Club (“SLOGCC”) in San Luis Obispo, California, at no cost to the
Executive. Coast agrees to pay Executive’s dues in SLOGCC, all further
assessments by SLOGCC, and all other expenses reasonably and necessarily
incurred by Executive in connection with the Executive’s maintenance and use of
the Membership for business-related purposes during the Term of this Agreement.

 

The Parties acknowledge and agree that although the Membership shall be
held in the Executive’s name during the Term of this Agreement, the Membership
shall remain an asset of Coast during the term of this Agreement, and the
Executive may not sell, transfer, encumber or hypothecate in any manner the
Membership without Coast’s prior written authorization. The Parties also agree
that upon the cessation of the Executive’s employment with Coast under this
Agreement for any reason, including voluntary resignation or retirement, the
Executive shall purchase the Membership from Coast. The purchase price to the
Executive shall be equal to the 

 

6

 

purchase price of the Membership, payable to Coast in cash no later
than ninety (90) days after the Executive’s last day of active employment with
Coast. The Executive hereby consents to Coast’s assignment of its rights
hereunder in the event that Coast is acquired by or is merged with another
financial institution. 

 

The provisions of this Subsection 6(g) shall be binding on and inure to
the benefit of each Parties’ successors and heirs, and shall survive the
expiration of this Agreement and the termination of the Executive’s employment
with Coast.

 

(h) Employee Benefits and Perks. In addition to the foregoing,
during the period of the Executive’s employment hereunder, the Executive shall
be entitled to participate in all employee benefits plans or arrangements of
Coast not otherwise provided for in this Agreement on the same basis as other
employees of Coast including, without limitation, plans or arrangements
providing use of Coast provided credit card(s), car telephone(s), pager(s) and
such other perks (if such is (are) being so provided) upon the terms and
conditions previously in effect.

 

(i) 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 Coast.

 

7. Termination.

 

(a) Resignation, Retirement, Death or Disability. Executive’s
employment hereunder shall cease at any time by Executive’s resignation (other
than a resignation for Good Reason as provided in Section 7(e)), or by
Executive’s retirement, death or Disability. Disability shall be deemed to have
occurred only after following the procedure contained in Section 1(g) above.

 

(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;
provided, however, that after a Change in Control, such resolution may be
adopted only by the affirmative vote of not less than a majority of a committee
composed of at least three (3) disinterested outside directors of Coast. In the
absence of at least three (3) disinterested outside directors, a determination
of Cause shall be submitted to and made by an arbitrator(s) pursuant to Section
13 hereof.

 

7

 

(c) Termination for Failure to Perform Duties. Upon the good
faith determination by the Board that Executive’s conduct amounts to a Failure
to Perform Duties, the Board shall give Executive written notice of such
finding. Executive shall then have thirty (30) days in which to modify her job
performance and cease the behaviors leading to the Board’s determination of her
Failure to Perform Duties. Upon the expiration of said thirty (30) day period,
the Board shall review Executive’s job performance during that thirty (30) day
period, and determine whether Executive’s conduct still amounts to a Failure to
Perform Duties. Executive’s employment shall cease upon a good faith finding of
a Failure to Perform Duties by the Board at the end of the thirty (30) day
period; provided, however, that Executive shall be given written notice of the
Board’s finding of conduct by Executive amounting to a Failure to Perform
Duties. 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 a Failure to Perform
Duties and specifying the particulars thereof; provided, however, that after a
Change in Control, such resolution may be adopted only by the affirmative vote
of not less than a majority of a committee composed of at least three (3)
disinterested outside directors of Coast. In the absence of at least three (3)
disinterested outside directors, a determination of a Failure to Perform Duties
shall be submitted to and made by an arbitrator(s) pursuant to Section 13
hereof. A termination of Executive pursuant to this subparagraph 7(c) shall be
deemed to be a, “Termination for Cause.”

 

(d) Termination Without Cause. Executive’s employment may be
terminated immediately Without Cause upon written notice for any reason,
subject to the payment of all amounts including severance benefits required by
Section 8 hereof. Any termination shall be effective immediately unless another
time period is specified herein upon Coast’s giving of notice to Executive, and
all liability or obligation by Coast hereunder to Executive (except for severance
benefits, as may be provided below) shall thereupon cease. Such termination
shall not prejudice any remedy which Coast may have at law, in equity, or under
this Agreement.

 

(e) 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.

 

(f) Resignation for Good Reason. Following a Change in Control
during the Term hereof, Executive may, under the following circumstances,
regard Executive’s employment as being constructively terminated by Coast (and
in such case Executive’s employment shall terminate) and may, therefore, Resign
for Good Reason within 90 days of Executive’s discovery of the occurrence of
one or more of the following events, any of which shall constitute “Good Reason”
for such Resignation for Good Reason:

 

(1) Without Executive’s express written
consent, the assignment to Executive of any duties materially inconsistent with
Executive’s position, duties,

 

8

 

responsibilities and status with Coast immediately prior to the Change
in Control, or any subsequent removal of Executive from or any failure to
re-elect her to any such position;

 

(2) Without Executive’s express written
consent, the termination and/or material reduction in Executive’s facilities
(including office space and general location) and staff reporting and available
to Executive immediately prior to the Change in Control;

 

(3) A reduction by Coast of Executive’s base
salary or of any bonus compensation applicable to her as in effect immediately
prior to the Change in Control;

 

(4) A failure by Coast to maintain any of the
employee benefits and perks to which Executive was entitled immediately prior
to the Change in Control at a level substantially equal to or greater than the
value of those employee benefits and perks in effect immediately prior to the
Change in Control; or the taking of any action by Coast which would materially
affect Executive’s participation in or reduce Executive’s benefits under any
such benefits’ or perks’ plans, programs or policies, or deprive Executive of
any material fringe benefits enjoyed by her immediately prior to the Change in
Control;

 

(5) Coast requiring Executive to be based at
an office that is greater than 25 miles from where Executive’s office is
located immediately prior to the Change in Control, except for required travel
on Coast’s behalf to an extent substantially consistent with Executive’s
present business travel obligations;

 

(6) Any purported Termination of Executive’s
employment by Coast other than those effected in good faith pursuant to
Sections 7(a), 7(b) and 7(c) of this Agreement; or

 

(7) The failure of Coast to obtain the
assumption of this Agreement by any successor.

 

(g) Supervisory Suspension. If the Executive is suspended and/or
temporarily prohibited from participating in the conduct of Coast’s affairs by
a notice served under Sections 8(e) or (g) of the Federal Deposit Insurance Act
or similar statute, rule or regulation, Coast’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, Coast
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.

 

9

 

(h) Regulatory Removal. If the Executive is removed and/or
permanently prohibited from participating in the conduct of Coast’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 Coast under this
Agreement shall terminate as of the effective date of the order.

 

8. Payments to Executive Upon Termination.

 

(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
NO benefits from Coast and Coast shall have no further liability or obligation
to Executive, including any obligation to provide severance benefits pursuant
to this Section 8 below.

 

(b) Resignation Without Good Reason or Expiration. In the event
of Executive’s resignation (other than a Resignation for Good Reason), or upon
Expiration, Coast 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, Coast shall have no further obligations to Executive under this
Agreement or otherwise, except as may be expressly required by law.

 

(d) Termination Without Cause Prior to a Change in Control. Upon
the occurrence of a Termination Without Cause prior to a Change in Control, as
damages for breach of this Agreement, Coast shall as severance benefits to
Executive provide the following: (a) severance pay in a sum equivalent to
Executive’s then existing base salary for a period of twelve (12) months next
following Executive’s termination (in lieu of any payments otherwise due for
the balance of the Term), which payment shall be payable to Executive in one
lump sum payment on the effective date of termination of Executive’s employment
hereunder; and (b) continuation of insurance benefits provided to Executive
hereunder for a period not to exceed sixty (60) days after termination. The
parties agree that the provision of such severance benefits shall constitute
full and complete performance by Coast of its obligations hereunder.

 

(e) Termination Without Cause or Resignation for Good Reason, After
a Change in Control. If in the twenty-four (24) month period following a
Change in Control, Executive (i) Resigns for Good Reason or (ii) is otherwise
Terminated Without Cause, Coast shall pay to Executive a lump sum payment equal
to twelve (12) months base salary then in effect. Such lump sum shall be paid
not later than the tenth (10th) day following the date of Termination Without Cause
or a Resignation for Good Reason.

 

10

 

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

 

(g) Consistent Returns. Coast and Executive agree that the
payments being made under this Agreement represent reasonable compensation for
services and that neither Coast 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 following a
Termination Without Cause or Resignation For Good Reason or any of the other
payments provided for in this Agreement, together with any other payments which
Executive has the right to receive from Coast 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 Coast’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 Coast 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 13 in the event of
breach, if any, shall constitute Executive’s sole remedy under this Agreement
against Coast and its officers, directors, employees and agents.

 

9. Confidentiality and Trade Secrets.

 

(a) Trade Secrets. During the Term, Executive will have access
to and become acquainted with what Executive and Bank acknowledge are trade
secrets, to wit, knowledge or data concerning Bank, including its operations
and business, and the identity of customers of Bank, including knowledge of
their financial condition, their financial needs, as well as their methods of
doing business. Executive shall not disclose any of the aforesaid trade
secrets, directly or indirectly, or use them in any way, either during the Term
or for a period of twenty four (24) months after the termination of this
Agreement, except as required in the course of Executive’s employment with
Bank.

 

(b) Return of Documents. Executive expressly agrees that all
manuals, documents, files, reports, studies, instruments, software, computer
programs or similarly generated electronic materials or other materials used
and/or developed by Executive during the

 

11

 

Term are solely the property of Bank, and that Executive has no right,
title or interest therein. Upon termination of the Term of this Agreement,
Executive or Executive’s representative shall promptly deliver possession of
all of said property to Bank in good condition.

 

(c) Unauthorized Disclosure. During the period of her employment
hereunder and for a period of two years 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 Coast or a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by the Executive of her duties as an employee of Coast, any
confidential information obtained by her while in the employ of Coast;
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).

 

10. Business Protection Covenants.

 

(a) Agreement Not to Compete. Executive agrees that in the event
she is terminated without cause and receives the payment required by Section
8(d), unless otherwise approved in writing by Coast, for a period of twelve
(12) months from the date of her cessation of employment by Coast, Executive
shall not directly or indirectly enter into or in any manner take part in any
business, profession or endeavor which shall be competitive with the business
of Coast in San Luis Obispo County as an employee, officer, agent, independent
contractor, 10% or more owner of an entity, director or other business
representative; in addition, Executive agrees that for the twelve (12)months
period described herein, Executive shall not solicit any customer with whom
Coast has done business during the preceding twelve (12) months.

 

(b) Inducing Employees To Leave the Bank; Employment of Employees.
Any attempt on the part of the Executive to induce others to leave the Bank’s
employ, or the employ of any of its subsidiaries or affiliates, or any effort
by the Executive to interfere with the Bank’s relationship with its other
employees would be harmful and damaging to the Bank. The Executive agrees that
during the Term of employment and for a period of twelve (12) months
thereafter, the Executive will not in any way, directly or indirectly (i)
induce or attempt to induce any employee of the Bank or any of its subsidiaries
of affiliates to quit employment with the Bank or the relevant subsidiary or
affiliate; (ii) otherwise interfere with or disrupt the relationships between
the Bank and its subsidiaries and affiliates and their respective employees;
(iii) solicit, entice, or hire away any employee of the Bank or any of its
subsidiaries or affiliates; or (iv) hire or engage any employee of the Bank or
any subsidiary or affiliate or any former employee of the Bank or any
subsidiary or affiliate whose employment ceased less than one (1) year before
the date of such hiring or engagement.

 

(c) Nonsolicitation of Business. The Executive agrees that, in
the event she is

 

12

 

terminated without Cause and receives the payment required by Paragraph
8(d) for a period of twelve (12) months form the date of termination of
employment, the Executive will not divert or attempt to divert from the Bank or
any of its subsidiaries or affiliates, any business the Bank or a subsidiary or
affiliate had enjoyed or solicited from its customers, borrowers, depositors or
investors during the twelve (12) months prior to termination of his employment.

 

(d) Equitable Relief. The Executive acknowledges and agrees that
irreparable injury will result to the Bank in the event of a breach of any of
the provisions of this Section 10 and that the Bank will have no adequate
remedy at law with respect thereto. Accordingly, in the event of a material
breach of any part of this Section 10, and in addition to any other legal or
equitable remedy the Bank or its subsidiaries or affiliates may have, the Bank
and any relevant subsidiary or affiliate shall be entitled to the entry of a
preliminary and permanent injunction (including, without limitation, specific
performance) by a court of competent jurisdiction in San Luis Obispo County,
California, or elsewhere, to restrain the violation or breach thereof by the
Executive or any affiliates, agents, or any other persons acting for or with
the Executive in any capacity whatsoever, and the Executive submits to the
jurisdiction of such court in any such action.

 

(e) Severability. It is the desire and intent of the parties
that each of the provisions of Section 10 shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision in the provisions of Section 10 shall be adjudicated or found to be
invalid or unenforceable, such provisions shall be deemed amended to delete
therefrom the portion thus adjudicated or found to be invalid or unenforceable,
such deletion to apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication or fining is made. In addition,
should any court or arbitrator determine that any of the provisions of Section
10 shall be unenforceable with respect to scope, duration, or geographic area,
such court or arbitrator shall be empowered to substitute, to the extent
enforceable, provisions similar hereto or other provisions so as to provide to
the Bank, to the fullest extent permitted by applicable law, the benefits
intended by the particular paragraph at issue.

 

(f) Resignations. The Executive agrees that upon termination of
employment, for whatever reason, she will submit her resignations from all
offices and directorships with the Bank, Bancorp and all subsidiaries of it.

 

11. Waivers.
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.

 

12. 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,

 

13

 

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.

 

If to the Bancorp, to:

 

Coast Bancorp

500 Marsh Street

San Luis Obispo, California 93401

Attn: President

Facsimile: (805) 541-5758

 

If to Coast, to:

 

Coast National Bank

500 Marsh Street

San Luis Obispo, California 93401

Attn: President

Facsimile: (805) 541-5758

 

with a copy to:

 

Barnet Reitner, Esq.

REITNER & STUART

1319 Marsh Street

San Luis Obispo, California 93401

Facsimile: (805) 545-8599

 

If to Executive, to:

 

Davina A. Palazzo

c/o Coast National Bank

500 Marsh Street

San Luis Obispo, California 93401

 

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

 

13. Arbitration. Any dispute or controversy arising or in
connection with this Agreement shall, upon written request of one party to the
other, be submitted to and settled exclusively by arbitration in the State of
California and be governed by the California Arbitration Act as set forth in
the California Code of Civil Procedure. 
Judgment may be entered on the arbitrator’s award in any court of
competent jurisdiction. To the extent allowable by law, the cost of such
arbitration, including reasonable attorney’s fees, shall be borne by the losing
party

 

14

 

or in such proportions as the arbitrator(s) shall decide. Arbitration
shall be the exclusive remedy of Executive and the Company and the award of the
arbitrator(s) shall be final and binding upon the parties. All reasonable
costs, including reasonable attorney’s fees, incurred in enforcing an
arbitration award in court, or of seeking a court order to compel arbitration,
shall be borne by the losing party in such proceedings.

 

14. Indemnification. The Company will indemnify Executive to the
fullest extent permitted by the laws of the state of California and to the
extent not inconsistent with the foregoing, the Articles of Incorporation and
Bylaws of the Company as in effect on the date of the Change in Control of the
Company, in respect of all Executive’s services rendered to the Company and its
subsidiaries prior to the Date of Termination. Executive shall be entitled to
the protection of any insurance policies the Company now or hereafter maintains
generally for the benefit of its directors, officers and employees (but only to
the extent of the coverage afforded by the existing provisions of such
policies) to protect against all costs, charges and expenses whatsoever
incurred or sustained by Executive in connection with any action, suit or
proceeding to which Executive may be made a party by reason of her being or
having been a director, officer or employee of the Company or any of its
subsidiaries during her employment therewith.

 

15. 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. 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 Coast 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.

 

15

 

(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 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 the State of California.

 

(g) Assumption. Coast shall require any successor in interest
(whether direct or indirect or as a result of purchase, merger, consolidation,
Change in Control or otherwise) to all or substantially all of the business
and/or assets of Coast to expressly assume and agree to perform the obligations
under this Agreement in the same manner and to the same extent that Coast would
be required to perform it if no such succession had taken place.

 

(h) Advice of Counsel. Executive acknowledges that Coast has
been represented by Reitner & Stuart in connection with the preparation of
the Agreement and that she has been encouraged to consult with other legal
counsel of her choosing concerning the terms of this Agreement prior to
executing this Agreement. Executive represents that she has been represented by
Lisa Lazara, Esq. in connection with the preparation of the 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.

 

16

 

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

 

 

	
  ATTEST:

  	
  COAST NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/Stephanie Ragsdale

  	
   

  	
  By:

  	
  /s/ Jack Wauchope

  	
   

  
	
   

  	
   

  	
  Its:  Chairman/CEO

  
	
   

  	
   

  	
  print name: Jack Wauchope

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  COAST BANCORP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/Stephanie Ragsdale

  	
   

  	
  By:

  	
  /s/ Jack Wauchope

  	
   

  
	
   

  	
   

  	
  Its:  Chairman/CEO

  
	
   

  	
   

  	
  print name: Jack Wauchope

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Stehpanie Ragsdale

  	
   

  	
  /s/Davina Paalazzo

  	
   

  
	
  Witness

  	
   

  
							

 

17

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