EMPLOYMENT AGREEMENT
Exhibit 10.5
THIS
AGREEMENT is dated as of March 16, 2009, between Belvedere SoCal ("SoCal"),
Professional Business Bank (the "Bank") and Xxxx Xxxx Xxxx ("Executive") for the
purposes set forth in this agreement (the "Agreement").
WHEREAS,
SoCal is a California corporation and bank holding company registered
under the
Bank Holding Company Act of 1956,
as
amended, subject to the supervision and regulation
of the Board of Governors of the Federal Reserve System ("FRB");
WHEREAS,
SoCal is the parent holding company of the Bank, which is a California
chartered
banking corporation and wholly-owned subsidiary of SoCal, subject to the
supervision and
regulation of the California Department of Financial Institutions ("DFI")
and
Federal Deposit
Insurance Corporation ("FDIC");
WHEREAS,
it is the intention of the parties to enter into an employment agreement
for the
purposes of securing Executive's services as the President and Chief Executive
Officer of SoCal and
of the Bank (together, the "Company").
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the Company and Executive agree as follows:
1. TERM.
Subject to the provisions for earlier termination hereinafter provided,
Executive's employment hereunder shall be for a term (the "Term") commencing on March 2009 (the
"Effective
Date") and ending on the third anniversary of the Effective
Date.
2. POSITION,
DUTIES AND RESPONSIBILITIES. During the Term, the Company will employ
Executive, and Executive agrees to be employed by the Company, as its President
and Chief Executive Officer. In such employment capacity, Executive will have
such duties and responsibilities as are normally associated with such position
and will report to the Board of Directors of the Company (the "Board"). In addition, during the Term,
subject to stockholder approval, Executive will he appointed as a member of the
Board; provided,
however, that the Company shall not be so obligated to nominate or
appoint Executive as a member of the Board if any of the events constituting
Cause (as defined below) have occurred. During the Term, Executive shall devote
her entire business time, attention and energies to the business and affairs of
the Company, to the performance of Executive's duties under this Agreement and
to the promotion of the Company's interests. Notwithstanding the foregoing,
subject to Section 13
below, nothing in this Agreement shall be construed to limit Executive's
ability to provide services to or participate in non-profit, charitable or civic
organizations or to manage personal investments, including personal investment
vehicles, to the extent that such activities do not materially interfere with
Executive's performance of her duties hereunder. Executive acknowledges that
Executive's services as President and Chief Executive Officer of the Company
shall constitute Executive's principal business activity. Executive will be
provided with an office at the Company's principal offices, but may also work
from any location Executive chooses as long as Executive has access to equipment
and other resources necessary to perform Executive's duties. Notwithstanding the
foregoing, the Company may from time to time require Executive to travel
temporarily to other locations on the Company's business. At the Company's
reasonable request, Executive will serve the Company and/or its subsidiaries and
affiliates in other capacities, in addition to the foregoing, which are
reasonably assigned and commensurate with Executive's level, authority, and
status.
3. BASE
COMPENSATION. During the
Term, the Company will pay Executive a base salary of $300,000 per year, less
payroll deductions and all required withholdings, payable in accordance with the Company's normal
payroll practices and prorated for any partial pay period of employment. Executive's base salary
shall be subject to (i) annual review and, (ii) in the sole discretion of the Board, increase (but
not decrease) pursuant to the Company's policies as in effect from time to time (the
"Base
Compensation").
4. ANNUAL
BONUS.
In addition to the base salary set forth above, during the Term.
Executive will be eligible to participate in the Company's incentive bonus plan
applicable to senior executives of the Company. The amount of Executive's annual
bonus will be based on the attainment of performance criteria established and
evaluated by the Board after consultation with Executive. Subject to the terms
of such performance criteria, Executive's target annual bonus shall be no less
than forty percent (40%) of Base Compensation per year, pro-rated for any
partial year of service in which an annual bonus is earned and any bonus that
becomes payable shall be paid no later than the last day of the applicable two
and one-half (2-V2) month "short- term deferral period" with respect to such
bonus, within the meaning of Treasury Regulation Section 1.409A-I (b)(4) (it
being understood that the actual annual bonus for any year may be more or less
than 40% of Base Compensation depending on the attainment of applicable
performance objectives). Each annual bonus shall be paid in cash or, at the
election of Executive made at least thirty (30) days prior to the payment date
(or such other date as may be determined by the Board), in whole or in part in a
number of fully vested shares of SoCal common stock equal to the dollar amount
of the bonus payable divided by the Fair Market Value (as defined in the SoCal
2007 Equity Incentive Plan (the "Plan"))
of a share of SoCal common stock on the date preceding the date on which
the bonus is paid. In the event that Executive elects to receive an annual bonus
in shares, SoCal shall issue such shares to Executive under the Plan and such
shares shall be subject to the terms and conditions of the Plan (including,
without limitation, the limits set forth in Section 3 and Section 6(c) of the
Plan) and an award agreement in a form prescribed by the Company. If the Company
is subject to the executive compensation limitations under the United States
Treasury Department's Troubled Asset Relief Program ("TARP") at the time
Executive receives a bonus under this section. any and all such bonuses and/or
portions thereof shall be subject to forfeiture and/or repayment by the
Executive to the Company if the payment of such bonus was based on materially
inaccurate financial statements or any other materially inaccurate performance
metric criteria.
5. STOCK OPTION.
(a) Initial Option.
On the date of the first Board Compensation Committee meeting following
the Effective Date ( the "Initial
Grant Date"), the Company shall grant to Executive nonqualified stock
options to purchase a number of shares of SoCal common stock equal to 3.0% of
the total number of shares of SoCal common stock outstanding as of the Initial
Grant Date (the "Initial Options").
50% of the total number of the initial Options shall be granted as Time
Vested Options, in accordance with and subject to the terms of the Time Vested
Options Stock. Option Agreement attached hereto as Exhibit A (the "initial Time Vested Options"), and 50% of the
total number of the Initial Options shall be granted as Performance Vested
Options, in accordance with and subject to the terms of the Performance Vested
Options Stock Option Agreement attached hereto as Exhibit B. In the
event that (i) any portion of the Initial Time-Vested Options remains
outstanding and unvested at the expiration of the Term, (ii) the Company does
not offer to continue Executive's employment with the Company on terms
substantially comparable in the aggregate as those provided under this Agreement
for a period of time ending no earlier than the fifth anniversary of the Vesting
Commencement Date of the Initial Time Vested Options, and (iii) Executive's
employment terminates upon expiration of the Term by reason of the Company not
offering to so continue Executive's employment, then any outstanding unvested
portion of the Initial Time-Vested Options shall vest in full immediately prior
to such termination of employment.
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(b) Subsequent
Acquisition Make-Whole Option. in addition, provided that Executive is
then employed by the Company, in the event that (i) the Company consummates an
acquisition transaction in which the holders of SoCal common stock immediately
prior to such transaction continue, immediately after such transaction, to
control more than 50% of the total outstanding shares of SoCal common stock (or
equity securities of the surviving entity if the Company is not the surviving
entity (any such equity securities, "New Equity")), and (ii) the
total number of shares of SoCal common stock (or New Equity) outstanding
immediately after the consummation of such acquisition transaction exceeds the
total number of shares of SoCal common stock outstanding immediately prior to
the consummation of such transaction, as determined in the sole and absolute
discretion of the Company (any such excess, the "Transaction Share Increase"),
then the Company (or the surviving entity) shall, on the thirtieth
calendar day (or, if not a trading day, the next succeeding trading day)
following the consummation of such acquisition, grant to Executive a
nonqualified option to purchase a number of shares of SoCal common stock (or New
Equity) equal to 3.0% of the Transaction Share Increase (the "Subsequent Acquisition Make-Whole Option"
and. together with the Initial Option, the "Options").
(c) Option Terms.
Each Option shall be granted at an exercise price per share set by the
Board Compensation Committee on the date of grant, which exercise price shall,
in no event, be less than the Fair Market Value on such date of grant. The terms
and conditions of the Options, including without limitation any applicable
vesting and forfeiture conditions, shall be set forth in Stock Option Agreements
in the forfeiture conditions attached hereto as Exhibit A and Exhibit
B, as applicable, to be entered into by the Company and Executive (the
"Option Agreement"). The
Options shall, subject to the provisions of this Section 5, be governed in all
respects by the terms of the Plan and the applicable Option
Agreement.
(d) Additional Equity
Participation. Executive shall also be eligible to participate in and
receive additional grants of equity-based awards commensurate with her position
and level in any stock option plan and restricted stock plan or other
equity-based or equity related compensation plan, programs or agreements of the
Company made available generally to its senior executives or directors; provided
that the amount, timing, and other terms of any future grant shall be determined
by the Board (or the Compensation Committee thereof) in its sole
discretion.
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6. BENEFITS AND VACATION. During the Term, (i)
Executive and her dependents shall be eligible on the first of the month
following the Effective
Date to participate in Company's medical and dental insurance programs at
the Company's expense, (ii) Executive shall be eligible to participate in all
incentive, savings and retirement plans, practices, policies and programs
maintained or sponsored by the Company from time to time which are applicable to
other senior executives of the Company, including without limitation, a Company
401(k) plan, subject to the terms and conditions thereof, and (iii) Executive
shall be eligible for standard benefits, such as paid time off and holidays, to
the extent applicable generally to other senior executives of the Company,
provided that, during the Term, Executive shall be entitled to no less than
twenty-two (22) vacation days per year (i.e., four weeks plus two
days of vacation), pro-rated for any partial year of service, in all cases,
subject to the terms and conditions of the applicable Company plans or policies.
In addition, without limiting the generality of the foregoing, the Company shall
make available to Executive a long-term disability insurance policy which it
provides for other senior executives of the Company on the same terms and
conditions as are made available to such other senior executives.
7. EXPENSES. During the Term, Executive shall be
entitled to receive prompt reimbursement of all reasonable business expenses
incurred by Executive in accordance with the Bank's expense reimbursement policy
applicable to its senior executives, as in effect from time to time. The amount
of any such expenses reimbursed in one year shall not affect the amount eligible
for reimbursement in any subsequent year and Executive's right to reimbursement
of any such expenses shall not be subject to liquidation or exchange for any
other benefit. In addition, the Company will pay Executive $1,000 per month,
less payroll deductions and all required withholdings, pro-rated for any partial
month of service, to compensate for the purchase or lease, operation and
maintenance, of an automobile. Further, Executive will be reimbursed for
reasonable legal fees and expenses, up to a maximum of $10,000, in connection
with the review, drafting and negotiation of this Agreement and any related
documents by an attorney of Executive's choosing, within 14 days after
substantiation of such expenses in accordance with applicable Company policy,
provided that Executive provides such substantiation within 60 days after the
month in which the expenses are incurred.
8. RELOCATION ASSISTANCE. The Company shall pay or
reimburse to Executive costs and expenses associated with Executive's relocation
to California in connection with her acceptance of employment and performance of
services under this Agreement
in an amount not to exceed $20,000. To the extent reimbursed, such costs
and expenses shall be paid
to Executive as soon as administratively possible, but in no event more than 30
days after, substantiation of such expenses in accordance with applicable
Company policy, provided that Executive provides such substantiation within 60
days after the month in which the expenses are incurred. In addition, the
Company shall pay or reimburse to Executive the costs of temporary housing for a
period of not more than 6 months following the Effective Date in an amount not
to exceed $3.500 per month, which expenses shall be substantiated by Executive
in accordance with applicable Company policy within 60 days after the month in
which the expenses are incurred and shall be paid or reimbursed to Executive no
later than 30 days after such substantiation.
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9. TERMINATION OF EMPLOYMENT.
(a) Termination Without
Cause; Resignation for Good Reason. The Company may terminate Executive's
employment without Cause (as defined below) at any time during the Term upon
thirty (30) days' written notice provided to Executive in accordance with
Section 12 below. Executive may terminate her employment for Good Reason in
accordance with Section 9(i) below. At the Company's sole discretion, Company
may require that Executive cease performing services hereunder during any notice
period following notice of a termination without Cause or for Good Reason.
Notwithstanding anything contained herein, in no event shall the expiration of
the Term or the Company's election not to renew the Term constitute a
termination of Executive's employment by the Company without Cause.
If
Executive has a "separation from service" (within the meaning of Section
409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the "Code"),
and Treasury Regulation. Section 1.409A-1(h)) ("Separation from Service") by
reason of a termination by the Company without Cause or by Executive for Good
Reason, the Company shall promptly or, in the case of obligations described in
clause (iv) below, as such obligations become due, pay or provide to Executive.
(i) Executive's earned but unpaid Base Compensation accrued through the date of
such Separation from Service (the "Termination Date"), (ii) accrued but unpaid
vacation time through the Termination Date, (iii) reimbursement of any business
expenses incurred by Executive prior to the Termination. Date that are
reimbursable under Section 7 above, (iv) any vested benefits and other amounts
due to Executive under any plan, program or policy of the Company, and (v) any
payment in lieu of notice of termination under this Section 9(a) (together, the
"Accrued Obligations"). In addition, subject to Section 9(f) below and
Executive's execution and non-revocation of a binding release in accordance with
Section 9(g) below, upon Executive's Separation from Service due to a
termination of Executive's employment by the Company without Cause, the Company
shall pay or provide to Executive (the "Severance"):
(x) a
lump-sum cash payment equal to the sum of (A) one year of Executive's Base
Compensation at the rate in effect as of the Termination Date, plus (B) a pro
rata portion of Executive's target annual bonus calculated by multiplying the
Executive's target bonus level for the bonus year in which the termination
occurs times a fraction, the numerator of which is the number of days elapsed in
the bonus year as of the Termination Date, and the denominator of which is 365;
provided,
however, that if a termination described in this Section 9(a) occurs
within twenty-four months after the consummation of an Acquisition (defined as
(i) any consolidation or merger of the Company with or into any other
corporation or other entity or person in which the stockholders of the Company
prior to such consolidation or merger own, directly or indirectly, less than
fifty percent (50%) of the continuing or surviving entity's voting power
immediately after such consolidation or merger, excluding any consolidation or
merger effected exclusively to change the domicile of the Company; or (ii) a
sale or other disposition of all or substantially all of the stock or assets of
the Company), then the payment pursuant to this Section 9(a)(x)(B) shall instead
equal a pro rata portion of Executive's maximum annual bonus for the calendar
year in which the Termination Date occurs, determined by multiplying the
applicable target or maximum annual bonus by a fraction, the numerator of which
equals the number of days elapsed in the calendar year of termination through
the Termination Date and the denominator of which equals 365,
and
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(y) at
the Company's expense, continuation of group healthcare coverage for Executive
and her legal dependents until the earlier of twelve months from the Termination
Date or such time as Executive becomes eligible to receive medical benefits
under another group health plan, provided that Executive properly elects
continuation healthcare coverage under Section 4980B of the Code and the
regulations thereunder; following such continuation period, any further
continuation of such coverage under applicable law shall be at Executive's sole
expense, provided, that if any plan pursuant to which such benefits are provided
is not, or ceases prior to the expiration of the period of continuation coverage
to be, exempt from the application of Section 409A of the Code under Treasury
Regulation Section 1.409A-1(a)(5), then an amount equal to each remaining
premium payment shall thereafter be paid to Executive as currently taxable
compensation in substantially equal monthly installments over the continuation
coverage period (or the remaining portion thereof). The Company shall also
provide Executive with executive outplacement services from a provider of her
choice in an amount not to exceed $10,000, which outplacement services shall be
provided or reimbursed to Executive promptly following the effectiveness of
Executive's release, but in no event later than the end of the second year
following Executive's Separation from Service.
Subject
to Sections 9(t) and 9(g) below, the Severance amounts described in Section
9(a)(x) above shall be paid to Executive no later than 60 calendar days
following the Termination Date, with the exact payment date to be determined by
the Company in its sole discretion, which payment schedule is intended to
satisfy the short-term deferral exemption under Treasury Regulation Section
1.409A-1(b)(4).
(b) Resignation.
Executive may terminate her employment without Good Reason at any time
upon thirty (30) days' written notice provided to Company in accordance with
Section 12 below, provided,
that the Company may, in its sole discretion, require that Executive
cease performing services during such notice period.
(c) Death; Disability.
If Executive dies during the Term or her employment is terminated due to
her total and permanent Disability, Executive or her estate, as applicable,
shall be entitled to receive the Accrued Obligations promptly or, in the case of
benefits described in Section 9(a)(iv) above, as such obligations become due,
For purposes of this Agreement, "Disability" shall have the meaning provided in
the Company's long-term disability insurance plan applicable to
Executive.
(d) Cause. The
Company may terminate Executive's employment for Cause by providing notice to
Executive in accordance with. Section 12 below. If the Company terminates
Executive's employment for Cause, Executive shall be entitled to receive the
Accrued Obligations promptly or, in the case of benefits described in Section
9(a)(iv) above, as such obligations become due.
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(e) Expiration
of Term. In the event that (i) the Company does not offer to continue
Executive's employment with the Company upon the expiration of the Term on terms
substantially similar to those provided under this Agreement, and (ii) Executive
is at that time willing and able to continue her employment with the Company on
such terms and conditions, if Executive's employment so terminates upon the
expiration of the Term and such termination constitutes a Separation from
Service, then, in addition to the Accrued Obligations, subject to Section 9(f)
below and Executive's execution and non-revocation of a binding release in
accordance with Section 9(g) below, the Company shall pay Executive a lump sum
amount equal to 50% of Executive's Base Compensation as in effect immediately
prior to such termination. Such amount shall be paid to Executive no later than.
60 calendar days following the Termination Date, with the exact payment date to
be determined by the Company in its sole discretion.
(f) Potential
Six-Month Delay. Notwithstanding anything to the contrary in this
Agreement, compensation and benefits that become payable in connection with a
termination of employment (if any), including without limitation any Severance
payments, shall be paid to Executive during the 6-month period following her
Separation from Service only to the extent that the Company reasonably
determines that paying such amounts at the time or times indicated in this
Agreement will not cause Executive to incur additional taxes under Section 409A
of the Code (together with Department of Treasury regulations issued thereunder,
"Section
409A").
If the payment of any such amounts is delayed as a result of the previous
sentence, then on the first business day following the end of such 6-month
period (or such earlier date upon which such amount can be paid under Section
409A without being subject to such additional taxes, including as a result of
Executive's death), the Company shall pay to Executive a lump- sum amount equal
to the cumulative amount that would have otherwise been payable to Executive
during such 6-month period.
(g) Release.
Executive's right to
receive the Severance payments and benefits set forth in this Section 9 is
conditioned on and subject to Executive's execution within 21 days (or, to the extent required by
applicable law, 45 days) following the Termination Date and non- revocation within 7 days thereafter of
a general release of claims against the Company, substantially in the foil!' attached
hereto as Exhibit
C.
(h) Termination
of Offices and Directorships. Upon termination of Executive's employment
for any reason, Executive shall be deemed to have resigned from all offices and
directorships, if any, then held with the Company or any affiliate, and shall
take all actions reasonably requested by the Company to effectuate the
foregoing.
(i) Definitions.
For purposes of this Agreement:
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(1) "Cause"
shall mean (A) Executive willfully fails to perform or habitually
neglects the duties which Executive is required to perform hereunder, which, to
the extent capable of cure, has not been cured within thirty (30) days after
Executive's receipt of written notice thereof from the Company describing such
failure in reasonable detail; (B) Executive willfully engages in illegal
activity which materially adversely affects the Company's reputation in the
community or which evidences Executive's lack of fitness or ability to perform
her duties as reasonably determined by the Board in good faith; (C) Executive
willfully engages in the falsification of reports or makes material, intentional
misrepresentations or omissions of information supplied to the Bank, SoCal or to
regulatory agencies; (D) Executive willfully commits act which would cause
termination of coverage under the Bank's Bankers' Blanket Bond; (E) Executive
willfully breaches a fiduciary duty, exhibits dishonesty or deliberately or
repeatedly disregards material policies or procedures of the Company; (F)
Executive breaches this Agreement in any material respect; (G) Executive
willfully engages in conduct or acts of moral turpitude that are materially
injurious to the Company or any of its subsidiaries and affiliates; (H)
Executive is suspended or temporarily or permanently removed or prohibited from
participating in the conduct of the business of the Company by the FDIC, DFI,
FRB or any other banking authority; or (1) the Bank is in default under the
provisions of 12 U.S.C. Section 1813(x)(1). For purposes of this Section 9(i),
no act or failure to act by Executive shall be considered "willful" if such act
is or was done (or is or was omitted to be done) in the good faith belief that
it is or was in the best interests of the Company. Prior to any purported
termination for Cause. Executive shall receive a written Notice of Termination
indicating the specific termination provision in this Agreement relied upon and
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision so
indicated.
(2) "Good Reason" shall mean the occurrence of any of
the following, without Executive's express written consent: (i) a material
reduction of Executive's duties or responsibilities; (ii) a material reduction
by the Company of Executive's Base Compensation as in effect immediately prior
to such reduction; (iii) the relocation of Executive's principal work location
to a facility or a location that constitutes a material change in the geographic
location at which Executive provides services (within the meaning of Section
409A); or (iv) a material breach by the Company of Sections 3, 4, 5, 6, 7 or 8
of this Agreement; provided,
that no resignation for Good Reason shall be effective unless and until
(A) Executive has first provided the Company with written notice specifically
identifying the acts or omissions constituting the grounds for "Good Reason"
within thirty (30) days after Executive has or should reasonably be expected to
have had knowledge of the occurrence thereof, (B) the Company has not cured such
acts or omissions within thirty (30) days of its actual receipt of such notice,
and (C) the effective date of Executive's termination for Good Reason occurs no
later than ninety (90) days after the initial existence of the facts or
circumstances constituting Good Reason.
10. INTERNAL REVENUE CODE SECTION 280G. If all or
any portion of the amounts payable to Executive under this Agreement, either
alone or together with other payments to which Executive is or may become
entitled, constitute "excess parachute payments" within the meaning of Section
280G of the Code, that are subject to the excise tax imposed by Section 4999 of
the Code (or similar tax and/or assessment), then Executive shall be responsible
for the payment of such excise taxes and the Company (and its successor) shall
he responsible for any loss of deductibility thereto; provided, however,
that the Company and Executive shall cooperate with each other and use
commercially reasonable efforts to minimize, to the greatest extent possible
(but subject to applicable law), the amount of excise taxes imposed under
Section 4999 of the Code by virtue of Section 280G of the Code. The
determination of the amount of any such excise taxes shall be made by the
independent accounting firm employed by the Company immediately prior to the
change in control or such other independent accounting firm or advisor as may be
selected by the Company, subject to Executive's approval, which shall not be
unreasonably withheld.
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11. Limitations under TARP. If the
Company is subject to the executive compensation limitations under TARP at the
time Executive is terminated pursuant to section 9(a), and if the payments made
to Executive under such sub-section, together with any other payments which
Executive has the right to receive from the Company, exceed the limits allowed
for Executive established under TARP, then the aggregate payments pursuant to
this Agreement, and any other agreement with Executive, shall be reduced to the
largest amount as will result in no portion of such payments violating the
executive compensation limitations under TARP; provided, however, that any
such restrictions or reductions imposed on Executive shall be limited to those
required by TARP or other applicable law and/or any authorized and effective
regulations thereunder, and that the Company will use reasonable efforts to
mitigate the impact of TARP or such other applicable law on Executive to the
extent consistent with TARP or such other applicable law (and the Company's
participation thereunder) and the best interests of its
stockholders.
12. NOTICE. Any notice or other communication
required or permitted under this Agreement shall be effective only if it is in
writing and delivered personally or sent by fax, email or registered or
certified mail, postage prepaid, addressed as follows (or if it is sent through
any other method agreed upon by the parties):
If to the
Company:
000 Xxxxx
Xxx Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attention:
Executive Chairman
If to
Executive: to Executive's most current business address or home address on file
with the Company's Human Resources Department, or to such other address as any
party hereto may designate by notice to the other in accordance with this
Section 12, and shall be deemed to have been given upon receipt.
w/ a copy
to:
H. Xxxxx
Xxxxxxx. Esq,
Shilepsky
O'Xxxxxxx Xxxxxxx LLP
Xxx
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx,
XX 00000-0000
Fax: 000
000 0000
Email:
xxxxxxxxxxxxxxxx.xxx
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13. COVENANTS.
(a) Noncompetition,
Nonsolicitation and Nondisclosure by Executive.
(i) Executive
hereby agrees that she shall not, during the Term, directly or indirectly,
whether as an employee, employer, consultant, agent, principal, stockholder,
officer, director, or in any other individual or representative capacity, engage
or participate in any competitive banking or financial services
business.
(ii) Executive
hereby agrees that she shall not, during the Term and for the twelve (12)-month
period immediately following termination of Executive's employment hereunder
(the "Restricted Period"),
solicit, encourage or assist, directly, indirectly or in any manner
whatsoever, any employees of the Company or its affiliates or subsidiaries
(including any former employees who voluntarily terminated employment with the
Company within a twelve (12)-month period prior to Executive's termination of
employment with the Company) to resign or to apply for or accept employment with
any other competitive banking or financial services business within the counties
in California in which the Company has located its offices. In addition,
Executive hereby agrees that she shall not, at any time, use any Proprietary
Information (as defined below) to solicit, encourage or assist, directly,
indirectly or in any manner whatsoever, any customer, person or entity that has
a business relationship with the Company or, during the twelve (12)-month period
prior to Executive's termination of employment with the Company, was engaged in
a business relationship with the Company, to terminate such business
relationship and engage in a business relationship with any other competitive
banking or financial services business within the counties in California in
which the Company has located its offices.
(b) Disclosure of information. Executive shall not,
at any time, without the prior
written consent of the Board or except as required by law to comply with legal
process including,
without limitation, by oral questions, interrogatories, requests for information
or documents, subpoena, civil investigative demand or similar process, disclose
to anyone any financial information, trade or business secrets, customer lists,
computer software or other information concerning the business
or operations of the Company or its affiliates or subsidiaries (the "Proprietary
Information"); provided, that Proprietary
Information shall not include information (i) in or which enters
the public domain (other than by breach of Executive's obligations hereunder), (ii)
acquired by Executive other than in connection with her employment, or (iii) that is disclosed to
Executive by a third party not obligated to the Company to keep such
information
confidential. Executive further recognizes and acknowledges that any financial
information concerning
any customers of the Company or its affiliates or subsidiaries is strictly
confidential and is a
valuable, special and unique asset of the Company's business which also
constitutes Proprietary
Information. Executive shall not, at any time, without such consent or
except as required by
law, disclose to anyone said financial information or any part thereof, for any
reason or purpose whatsoever. In the event Executive is required by law to
disclose such information described in this
Section 13(b), Executive will provide the Company with immediate notice of such request so that it
may consider seeking a protective order. If, in the absence of a protective order or the receipt of a
waiver hereunder, Executive is nonetheless, in the opinion of knowledgeable counsel, compelled to
disclose any of such information to any tribunal or any other party or else stand liable for
contempt or suffer other material censure or material penalty, then Executive may disclose (on an
"as needed" basis only) such information to such tribunal or other party without
liability hereunder. Notwithstanding the foregoing, Executive may disclose such
information concerning the business or operations of the Company and its
affiliates and subsidiaries as reasonably necessary in the proper performance of
Executive's duties and responsibilities hereunder or as may
be required by the FRB, DFI, FDIC or other regulatory agency having jurisdiction over the
operations of the Company in connection with an examination of the Company or other
proceeding conducted by such regulatory
agency.
10
(c) Non-Disparagement. During the Term and
for a period of twelve (12) months following termination of this Agreement and
Executive's employment hereunder, (i) Executive agrees that she shall not
publicly or privately disparage, defame or criticize the Company, its
affiliates, subsidiaries, officers or directors, and (ii) the Company agrees
that none of its officers or directors shall publicly or privately disparage,
defame or criticize Executive.
(d) Written, Printed or Electronic Material.
All written, printed and electronic material, notebooks and records
including, without limitation, computer disks used by Executive in performing
duties for the Company, other than Executive's personal address lists, telephone
lists, notes and diaries, are and shall remain the sole property of the Company.
Upon termination of Executive's employment or earlier request by the Company,
Executive shall promptly return all such materials (including all copies,
extracts and summaries thereof) to the Company.
(e) Breach of Covenants. Executive
acknowledges that a breach by her of any of the covenants or
restrictions contained in this Section 13 will cause irreparable damage to the
Company, the exact amount of which will be difficult to ascertain, and that the
remedies at law for any such breach will be inadequate. Accordingly. Executive
agrees that if she breaches or attempts to breach any such covenants or
restrictions, the Company shall be entitled to temporary or permanent injunctive
relief with respect to any such breach or attempted breach (in addition to any
other remedies, at law or in equity, as may be available to the Company),
without posting bond or other security.
14. INDEMNIFICATION. The Company shall defend and
indemnify Executive, to the extent permitted by law and in accordance with the
requirements of Section 409A, if she becomes a party or is threatened to be made
a party in any action brought by a third party against Executive (whether or not
the Bank or SoCal is joined as a party defendant) against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with said action if Executive acted in good faith and in a manner
Executive reasonably believed to be in the best interests of the Company (and,
with respect to a criminal proceeding, if Executive had no reasonable cause to
believe her conduct was unlawful), provided that the alleged conduct of
Executive arose out of and was within the course and scope of her employment as
an officer or director of the Company.
15. REPRESENTATIONS. Executive hereby represents
and warrants to the Company that (a) Executive is entering into this Agreement
voluntarily and that the performance of her obligations hereunder will not
violate any agreement between Executive and any other person, firm, organization
or other entity, and (h) Executive is not bound by the terms of any agreement
with any previous employer or other party to refrain from competing, directly or
indirectly, with the business of such previous employer or other party that
would be violated by her entering into this Agreement and/or providing services
to the Company pursuant to the terms of this Agreement.
11
16.
CODE SECTION 409A.
(a) To
the extent applicable, this Agreement shall be interpreted in accordance with
Section 409A. Notwithstanding any provision of this Agreement to the contrary,
in the event that following the Effective Date, the Company determines in good
faith that any compensation or benefits payable under this Agreement may not be
either exempt from or compliant with Section 409A, the Company shall consult
with Executive and adopt such amendments to this Agreement or adopt other
policies or procedures (including amendments, policies and procedures with
retroactive effect), or take any other commercially reasonable actions necessary
or appropriate to (i) preserve the intended tax treatment of the compensation
and benefits payable hereunder, to preserve the economic benefits of such
compensation and benefits, and/or (ii) to exempt the compensation and benefits
payable hereunder from Section 409A or to comply with the requirements of
Section 409A and thereby avoid the application of penalty taxes thereunder;
provided, however, that
this Section 16 does not, and shall not be construed so as to, create any
obligation on the part of the Company to adopt any such amendments, policies or
procedures or
to take any other such actions or to indemnify the Executive for any
failure to do so.
(b) To
the extent permitted under Section 409A, any separate payment or benefit under
this Agreement or otherwise shall not be deemed "nonqualified deferred
compensation" subject to Section 409A and. Section 9(f) hereof to the extent
provided in the exceptions in Treasury Regulation Section 1.409A-1(b)(4),
Section 1.409A-1(b)(9) or any other applicable exception or provision of Section
409A.
(c) To
the extent that any payments or reimbursements provided to Executive under this
Agreement. including, without limitation, the payments and benefits under
Sections 7 and 8, are deemed to constitute compensation to which Treasury
Regulation Section 1.409A-3(i)(1)(iv) would apply, such amounts shall be paid or
reimbursed to Executive reasonably promptly, but not later than December 31 of
the year following the year in which the expense was incurred. The amounts of
any such payments eligible for reimbursement in one year shall not affect the
payments or expenses that are eligible for payment or reimbursement in any other
taxable year, and Executive's right to such payments or reimbursement shall not
be subject to liquidation or exchange for any other benefit.
17. WITHHOLDING. The Company may withhold from
any amounts payable under this Agreement such federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any applicable law or
regulation.
18. ENTIRE AGREEMENT. As of the Effective Date,
this Agreement, together with the Option Agreement(s) and other attached
Exhibits, constitutes the final, complete and exclusive agreement between.
Executive and the Company with respect to the subject matter hereof and replaces
and supersedes any and all other agreements, offers or promises, whether oral or
written, made to Executive by the Company or any representative thereof.
Executiveagrees that any such agreement, offer or promise is hereby terminated
and will be of no further force or effect, and that upon her execution of this
Agreement, Executive will have no right or interest in or with respect to any
such agreement. offer or promise.
12
19. AMENDMENT.
The terms of this Agreement may not be amended or modified other than by a
written instrument executed by the parties hereto or their respective
successors.
20. ACKNOWLEDGEMENT.
Executive hereby acknowledges (a) that Executive has consulted with or has had
the opportunity to consult with independent counsel of her own choice concerning
this Agreement, and has been advised to do so by the Company, and (b) that
Executive has read and understands this Agreement, is fully aware of its legal
effect, and has entered into it freely based on her own judgment.
21. GOVERNING
LAW. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without regard to conflicts of laws
principles thereof.
22. NO
WAIVER. Failure by either party hereto to insist upon strict compliance
with any provision of this Agreement or to assert any right such party may have
hereunder shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
23. ASSIGNMENT.
This Agreement is binding on and for the benefit of the parties hereto and their
respective successors, heirs, executors, administrators and other legal
representatives. Neither this Agreement nor any right or obligation hereunder
may be assigned by Executive.
24. SEVERABILITY.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
25. CONSTRUCTION.
The parties hereto acknowledge and agree that each party has reviewed and
negotiated the terms and provisions of this Agreement and has had the
opportunity to contribute to its revision. Accordingly, the rule of construction
to the effect that ambiguities are resolved against the drafting party shall not
be employed in the interpretation of this Agreement. Rather, the terms of this
Agreement shall be construed fairly as to all parties hereto and not in favor or
against any party by the rule of construction abovementioned.
26. COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.
27. CAPTIONS. The captions of this Agreement
are not part of the provisions hereof, rather they are included for convenience
only and shall have no force or effect.
[SIGNATURE
PAGE FOLLOWS]
13
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
Company:
/s/
Xxxxxx
Xxxxx
Name: Xxxxxx
Xxxxx
Title: Compensation
Committee Chair, Board Director, Secretary
Executive:
/s/
Xxxx Xxxx
Xxxx
Xxxx Xxxx
Xxxx
14
EXHIBIT
A
[TIME
VESTED STOCK OPTION AGREEMENT)
15
EXHIBIT
B
[PERFORMANCE VESTED STOCK OPTION
AGREEMENT]
16
EXHIBIT
C
GENERAL
RELEASE
For a
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned does hereby release and forever discharge the
"Releasees"
hereunder, consisting of Belvedere SoCal, a California corporation (the
"SoCal),
Professional Business Bank, a California chartered banking corporation
(the "Bank",
and together with SoCal, the "Company"),
and each of their partners. associates, affiliates, successors, heirs,
assigns, agents, directors, officers, employees, shareholders. representatives,
lawyers, insurers, and all persons acting by, through, under or in concert with
them, or any of them, of and from any and all manner of action or actions, cause
or causes of action, in law or in equity, suits, debts, liens, contracts,
agreements, promises, liability, claims, demands, damages, losses, costs,
attorneys' fees or expenses, of any nature whatsoever, known or unknown, fixed
or contingent (hereinafter called "Claims"),
which the undersigned now has or may hereafter have against the
Releasees, or any of them, by reason of any matter, cause, or thing whatsoever
from the beginning of time to the date hereof. The Claims released herein
include, without limiting the generality of the foregoing, any Claims in any way
arising out of based upon, or related to the employment or termination from
employment of the undersigned by the Releasees, or any of them; any claim for
benefits under any stock option or other equity-based incentive plan of the
Releasees (or any related agreement to which any Releasee is a party); any
alleged breach of any express or implied contract of employment; any alleged
torts or other alleged legal restrictions on Releasee's right to terminate the
employment of the undersigned; the Age Discrimination in Employment Act, as
amended, 29 U.S.C. § 621, et seq.;
Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of
1991, 42 U.S.C. § 2000 et
seq.; Equal Pay Act, as amended, 29 U.S.C. § 206(d); the Civil Rights Act
of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C. §
2601 et
seq.; the Americans with Disabilities Act of 1990.42 U.S.C. § 12.101
et
seq.; the False Claims Act , 31 U.S.C. § 3729 et
seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C.
§ 1001 et seq.;
the Worker Adjustment and Retraining Notification Act, as amended. 29 U.S.C. §
2101 et seq.
the Fair Labor Standards Act, 29 U.S.C. § 215 et
seq., the Xxxxxxxx-Xxxxx Act of 2002; the California Fair Employment and
Housing Act, as amended, Cal. Lab. Code § 12940 et seq.;
the California Equal Pay Law, as amended, Cal. Lab. Code §§ 1197.5(a),1199.5;
the Xxxxx-Xxxxx-Xxxxxxx Family Rights Act of 1991, as amended, Cal. Gov't Code
§§12945.2. 19702.3; California Labor Code §§ 1101, 1102, 69 Ops. Cal. Atty. Gen.
80 (1986); California Labor Code §§ 1102.5(a),(b); the California WARN Act, Cal.
Lab. Code § 1400 et
seq.; the California False Claims Act, Cal. Gov't Code § 12650 et
seq.; the California Corporate Criminal Liability Act, Cal. Penal Code §
387; the California Labor Code; or any other federal, state or local laws of
similar effect. Notwithstanding the foregoing, this Release shall not operate to
release any Claims which the undersigned may have (i) to payments or benefits
under Section 5(a) or Section 9 of that certain Employment Agreement, dated as
of March , 2009, between the Company and the undersigned, (ii) to accrued or
vested benefits or rights she may have, if any, under any applicable employee
benefit plan of the Company or any equity compensation plan or equity
compensation agreement with the Company, (iii) to indemnification pursuant to
the Employment Agreement or corporate governance documents of the Company or
applicable law, or under any director' and officers' liability policies of the
Company.
17
THE
UNDERSIGNED ACKNOWLEDGES THAT SHE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:
"A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR."
THE
UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS SHE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON
LAW PRINCIPLES OF SIMILAR EFFECT.
IN
ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 990, THE UNDERSIGNED
IS HEREBY ADVISED AS FOLLOWS:
(1) SHE
HAS THE RIGHT TO CONSULT WITH AN ATTORNEY
BEFORE SIGNING THIS RELEASE;
(2) SHE
HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS
RELEASE BEFORE SIGNING IT; AND
(3)SHE
HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE
TO REVOKE IT, AND THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF
THAT REVOCATION PERIOD.
The
undersigned represents and warrants that there has been no assignment or other
transfer of any interest in any Claim which she may have against Releasees, or
any of them, and the undersigned agrees to indemnify and hold Releasees, and
each of them, harmless from any liability, Claims, demands, damages, costs,
expenses and attorneys' fees incurred by Releasees, or any of them, as the
result of any such assignment or transfer or any rights or Claims under any such
assignment or transfer. It is the intention of the parties that this indemnity
does not require payment as a condition precedent to recovery by the Releasees
against the undersigned under this indemnity.
The
undersigned agrees that if she hereafter commences any suit arising out of,
based upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder.
then the undersigned agrees to pay to Releasees, and each of them, in addition
to any other damages caused to Releasees thereby, all attorneys' fees incurred
by Releasees in defending or otherwise responding to said suit or
Claim.
The
undersigned further understands and agrees that neither the payment of any sum
of money nor the execution of this Release shall constitute or be construed as
an admission of any liability whatsoever by the Releasees. or any of them, who
have consistently taken the position that they have no liability whatsoever to
the undersigned.
18
IN
WITNESS WHEREOF, the undersigned has executed this Release this ____
day of
_______________, ____.
|
___________________
Xxxx
Xxxx. Xxxx
|
19
