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EXHIBIT 10.10
CEO TERM SHEET
11/1/95
1. Term: 3 years
2. Base Salary: First year until 12/31/96 $190,000
Second year until 12/31/97 $210,000
Third year until 12/31/98 $230,000
3. Incentive Compensation:
5% of pretax net profit. However, in 1996 incentive
compensation may be based on other factors as
determined by the Board. This is a cash incentive.
2% of net pretax profits, provided that a minimum
return ratio of 1.5% of pretax profit to assets
must be achieved to actuate this compensation. May
be paid in the form of a deferred annuity or other
suitable insurance as determined by the Board.
Total cash compensation including incentive cash to
cap at $350,000 during term of contract.
4. Signing Bonus: Two months salary
5. Stock Options: A total of 200,000 shares: 100,000 shares on
signing which will vest immediately, 50,000 shares
on November 1, 1996 and 50,000 shares on November
1, 1997. Anti dilution protection at 6.5% in event
of issuance of new shares during term of contract.
All options become vested on change of control. NOL
saving provision, if necessary at 4.99%.
6. Perks: A Cadillac Seville or equivalent either leased or
owned based on tax considerations. Club membership
without golf. Luncheon club. Athletic club and a
portable PC.
7. Moving Expenses:
Transitional living and travel allowance, 6 months
maximum.
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8. Relocation Allowance:
A relocation allowance of up to $35,000 will be
paid. The allowance is intended to cover relocation
related expenses in addition to the transportation
of household goods.
9. Severance: 18 months of base salary plus any earned but unpaid
bonus in the event of termination without cause or
by change of control. All normal benefits will be
continued during the period.
10. Tracy Federal Bank, F.S.B.:
The bank is aware that Scott is a member of the
board of Tracy Federal Bank and may continue that
relationship for one year if necessary.
11. Approval: Pre-approval of the terms of this memorandum by
regulatory government agencies is required before
we can execute a final, binding agreement.
Mr. Montgomery will receive all other normal bank benefits.
Date: 11/1/95 Date: 11/1/95
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/s/ Howard P. Ladd /s/ Scott A. Montgomery
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Howard P. Ladd, Chairman Scott A. Montgomery
Mercantile National Bank