Date) Dear
(Date)
Dear
As you
know, Bridge Bank, N.A. (the “Company”) has entered into a
Securities Purchase Agreement (the “SPA”), with the United States
Department of Treasury (“Treasury”) providing for the
Company’s sale of securities to Treasury under the TARP Capital Purchase Program
(the “CPP”).
As a
participant in the CCP and under the terms of the SPA, the Company is required
to ensure that its incentive compensation arrangements meet certain standards
and to make changes to its compensation arrangements with its senior executive
officers. In order for the Company to participate in the CPP and as a
condition to the closing of the investment contemplated by the SPA, you
previously signed (1) a wavier in which you agreed to forego your rights to
compensation in excess of that permitted for participants in the CPP and (2) a
consent in which you agreed to conforming changes to certain employment and
benefit arrangements as approved by the Compensation Committee of the Board of
Directors for the purpose of complying with the requirements of the SPA and the
CPP.
The
recently enacted American Recovery and Reinvestment Act of 2009, as it may be
amended from time to time (the “Act”), includes new
provisions relating to executive compensation limitations and conditions that
may be inconsistent with those to which you have previously
agreed. To comply with these requirements and in consideration of the
benefits that you will receive as a result of the Company’s participation in the
CPP, you agree as follows:
(1) No Golden Parachute Payments.
The Company is prohibited from paying any golden parachute payment to you during
any “Covered Period”. A “Covered Period” is any period
during which (A) you are a senior executive officer and (B) Treasury
holds an equity or debt position acquired from the Company in the
CPP.
(2) Recovery of Bonus and Incentive
Compensation. Any bonus and incentive compensation paid to you during a
Covered Period is subject to recovery or “clawback” by the Company if the
payments were based on materially inaccurate financial statements or any other
materially inaccurate performance metric criteria.
(3) No Bonus or Other Incentive
Compensation. During the Covered Period, the Company is
prohibited from paying or accruing any bonus, retention award or incentive
compensation during the time that you are the most highly compensated employee
of the Company with the exception of certain restricted stock awards permitted
by the Act.
(4) Compensation Program Amendments.
Each of the Company’s compensation, bonus, incentive and other benefit
plans, arrangements and agreements (including golden parachute, severance and
employment agreements) (collectively, “Benefit Plans”) with respect to you
is hereby amended to the extent necessary to give effect to provisions (1), (2)
and (3). For reference, certain affected Benefit Plans are set forth
in Appendix A to this letter, but this letter shall amend each Benefit Plan,
even if omitted from Appendix A.
(5) Modification of Bonus or Other
Incentive Compensation Programs. The Company is required to
review its Benefit Plans to ensure that they do not encourage senior executive
officers to take unnecessary and excessive risks that threaten the value of the
Company. To the extent any such review requires revisions to any Benefit Plan
with respect to you, you and the Company agree to negotiate such changes
promptly and in good faith.
(6) Definitions and
Interpretation. This letter shall be interpreted as follows:
“Senior executive officer”
means the Company’s “senior executive officers” as defined in subsection
111(a)(1) of EESA as amended by the Act.
“Golden parachute payment” is
used with same meaning as in Section 111(a)(2) of EESA as amended by the
Act.
“EESA” means the Emergency
Economic Stabilization Act of 2008 as implemented by guidance or regulation
issued by the Department of the Treasury.
The term “Company” includes any
entities treated as a single employer with the Company under 31 C.F.R. §
30.1(b).
The term “Covered Period” means the
period during which any obligation arising from financial assistance provided
under TARP remains outstanding.
Provisions
(1), (2), (3) and (5) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA
as amended by the Act (and, to the maximum extent consistent with the preceding,
to permit operation of the Benefit Plans in accordance with their terms before
giving effect to this letter). The definitions in this letter will be
interpreted in a manner consistent with any guidance or regulation issued by the
Department of the Treasury.
(5) Miscellaneous. To the extent
not subject to federal law, this letter will be governed by and construed in
accordance with the laws of the State of California. This letter may
be executed in two or more counterparts, each of which will be deemed to be an
original. A signature transmitted by facsimile will be deemed an original
signature.
The Board
appreciates the concessions you are making and looks forward to your continued
leadership during these extraordinary times.
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Yours
sincerely,
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Bridge
Bank, N.A.
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By:
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Executive
Vice President
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Chief
Risk Officer
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Intending
to be legally bound, I agree with and accept the foregoing terms on the date set
forth below.
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Date:
Appendix
A
to
Letter Agreement dated ,
2010
List of Benefit
Plans
