Chief Financial Officer Employment Agreement

EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of December 22,1999 , by and between BYL Bank Group , a California banking corporation, with its headquarters office located at 1875 N. Tustin Ave., Orange, California 92865 (the "Bank"), and Gary Strachn, residing at 1655 Clark Avenue #225, Long Beach, California 90815 (the "Employee").


A. The Bank is a corporation organized for the purpose of carrying on the business of banking.


B. The Bank desires to avail itself of the skill, knowledge and experience of Employee in order to insure the successful management of its business;


C. The parties hereto desire to specify the terms of Employee's employment by Bank as a Senior Vice President and Chief Financial Officer in this written agreement which supersedes all prior agreements, whether written or oral; and


D. The employment, the duration thereof, the compensation to be paid to Employee, termination and other terms and conditions of employment provided in this Agreement were duly fixed, stated, approved and authorized for and on behalf of the Bank by action of its Board of Directors at a meeting held on December 22, 1999, at which meeting a quorum was present and voted.


NOW, THEREFORE, on the basis of the foregoing facts and in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:


1. TERM


(a) Subject to the provisions below, the Bank agrees to continue to employ Employee, and Employee agrees to be employed by the Bank, subject to the terms and conditions of this Agreement, for a period commencing on December 22, l999 and ending on December 31, 2000.


The term for which Employee is employed hereunder is hereinafter referred to as the "Employment Period".


(b) Subject to the notice provisions set forth in this paragraph, the term of this Agreement shall automatically be extended for one (1) additional year on January 1, 2001 after the expiration of the term described in Paragraph 1(a). The term shall not be automatically extended as provided in this paragraph if either party shall give written notice to the other, on or before September 30 of each year, that the Agreement shall not be automatically renewed on the next January 1. In the event either party shall give the other written notice as provided in this paragraph, the term of this Agreement shall thereafter terminate on the next following agreement termination date.


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2. DUTIES AND AUTHORITY


(a) During the Employment Period, Employee shall devote all his productive time, ability and attention to the business and affairs of the Bank. Employee shall not directly render service of a business, commercial or professional nature to any other person or organization without the consent of the Board of Directors of the Bank (the "Board of Directors"); provided, however, that nothing contained herein shall prohibit Employee, or require the Board of Directors to approve or consent to Employee serving a charitable or nonprofit organization or serving as an advisor or director of any corporation which does not compete with the business of the Bank. Employee agrees during the Employment Period to use his best efforts, skill and abilities to promote the Bank's interests and to serve as an Senior Vice President and Chief Financial Officer of the Bank. Employee's duties shall include all responsibilities assigned to the Senior Vice President. For the purposes of regulatory reporting, the position of Chief Financial Officer is considered an Executive Officer.


3. BANK'S AUTHORITY. Employee agrees to observe and comply with all laws and the Bank's rules and regulations as adopted by the Board of Directors regarding performance of his duties and to carry out and to perform all appropriate orders, directions and policies stated by the Board of Directors to him periodically, either orally or in writing.


4. COMPENSATION.


(a) The Bank agrees to pay to Employee during the term of this Agreement a base salary of $85,000 per annum, beginning on the effective date of this Agreement and payable on the first and fifteenth day of each month during the term of this Agreement; provided, however, that the base salary shall be reviewed annually by the Board of Directors, on or before January 31, and may be changed by mutual agreement of the parties. Any such change may be subject to review by the Bank's regulatory agencies.


(b) In addition to all other compensation referred to above, the Employee shall be entitled to participate in any and all other bonus plans, employee benefits and other plans that may be developed and adopted by the Bank.


(c) All compensation shall be subject to the customary withholding tax and other employment taxes as required with respect to compensation paid by a corporation to an employee.


(d) The Bank shall provide a car for Employee's use during the term, and shall pay all insurance, gas and maintenance expenses of such automobile. Any expenses of such automobile which are paid by the Bank and which are for the personal use of the automobile by Employee shall be taxable as income to Employee. The Employee shall use due care and reasonable efforts to furnish to the Bank adequate written records and other documentary evidence required by Federal and State laws and regulations substantiating the extent to which use of the automobile constitutes deductible business expenses of the Bank.


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(e) During the Employment Period, Employee shall be eligible to participate in any pension or profit-sharing plan, or similar employee benefit plan or retirement program of the Bank now or hereafter existing, to the extent that he is eligible under the provisions thereof and commensurate with his position in relationship to other participants. The Bank shall pay for cost of an annual physical examination of Employee.


(f) Employee shall accrue vacation at the rate of 8.3 hours per semi-monthly pay period (for a total of 200 hours or 25 days per year) and shall accumulate sick leave at the rate of 3.3 hours per semi-monthly pay period (for a total of 80 hours or 10 days per year). Notwithstanding any terms of the Bank's personnel policy to the contrary, any unused sick leave shall carry forward to the next year until used, but in no event shall any compensation for unused sick leave be due to Employee upon his resignation or upon the termination of this employment for any other reason, including his death or disability. Vacation time shall not accrue to more than 200 hours (25 days), except that under special circumstances up to 280 hours (35 days) of vacation may be accrued if such accrual is approved in advance by the Board of Directors in its discretion. Employee shall be required to take at least two consecutive weeks of vacation during each calendar year at a time mutually convenient to Employee and the Bank.


(g) The Bank agrees to provide medical and dental insurance for Employee on the same terms as provided for all Senior Vice President officers of the Bank. The Bank shall provide for Employee, at the Bank's expense, participation in medical, accident and health, and life insurance benefits equivalent to the maximum benefits available from time to time under the California Bankers Association Group insurance program for Employee's salary level, as long as Employee is insurable at a normal premium payment. Said coverage shall take effect as of the Effective Date hereof and shall continue throughout the Term. The Bank's liability to Employee for any breach of this paragraph shall be limited to the amount of premiums payable by the Bank to obtain the coverage contemplated herein.


5. REIMBURSEMENT OF EXPENSES.


The services required by the Bank will require Employee to incur business, entertainment and communityrelations expenses and the Bank hereby agrees to provide credit cards and charge accounts for Employee's use for such expenses. The Bank agrees to reimburse Employee for all out-of-pocket expenses which are business related, upon submission of appropriate documentation therefor and approval thereof by the Board of Directors or a committee thereof appointed for such purpose. The Board or a committee thereof shall review such expenses at least monthly so that reimbursement of appropriate expenses is not unreasonably delayed. Each expense, to be reimbursed, must be of a nature qualifying it as a proper deduction on the income tax returns of the Bank as ...