EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made effective as of the 21st day
of October, 1999, between FIRST PROFESSIONAL BANK, N.A. ("Employer") and XXXX
XXXXXX ("Executive").
RECITALS
WHEREAS, Employer desires to employ Executive as its Chief Executive
Officer, and Executive desires to be employed by Employer, on the terms and
subject to the conditions set forth in this Agreement:
NOW, THEREFORE, in consideration of the foregoing promises and the
terms, covenants and conditions set forth herein, the parties hereto agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, the definition set
forth on Exhibit B hereto shall apply unless the context clearly indicates
otherwise.
2. EMPLOYMENT AND TERM. Employer hereby employs Executive and Executive
hereby accepts employment, upon the terms and conditions set forth herein. The
term of this Agreement (the "Term") shall be for a period of one year,
commencing October 20, 1999 and ending on October 19, 2000, unless earlier
terminated in accordance with the provisions hereof. This Agreement shall
automatically renew for successive one-year periods thereafter, unless
terminated by either party giving written notice of termination to the other
party at least ninety (90) days prior to the expiration of the then-current
one-year term.
3. DUTIES. Executive shall serve as the Chief Executive Officer of
Employer and shall perform the duties and have the responsibilities set forth on
Exhibit A attached hereto and incorporated herein by reference, and shall have
the authority and perform such other duties, services and responsibilities
incident to such position as are customary of the Chief Executive Officer of a
bank, and such other reasonable duties and responsibilities as are determined
from time to time by the Board. Executive shall report to the Board, Executive
shall devote one hundred percent (100%) of his business time, attention and
skill to the performance of his duties hereunder, except that Executive is
permitted to spend a reasonable amount of business time to complete his
obligations under his Consulting Agreement with Xxxxxxx Consulting Group, and
shall perform his duties to the best of his ability and subject to the policies
and instructions of the Board. Executive will not, without the prior written
approval of Employer, engage in any other business activity which would
interfere with the performance of his duties, services, and responsibilities
hereunder or which is in violation of policies established from time to time by
the Board.
4. COMPENSATION.
(a) SALARY. Executive will receive an annual base salary of
One Hundred Fifty Thousand Dollars ($150,000) during the Term (the "Annual Base
Salary"), payable in equal bi-weekly installments. Salary payments shall be
subject to withholding and all other applicable taxes. Executive's Annual Base
Salary shall be reviewed at least annually by the Compensation Committee of the
Board and may be increased in the discretion of the Board based upon Executive's
performance. Employer's performance and profitability and other factors
generally used by Employer and in the industry in adjusting salaries of
executive employees.
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(b) ANNUAL BONUS. Executive may be eligible to receive an
annual bonus in an amount of up to 50% of his Annual Base Salary, based upon the
attainment of either (i) specific corporate budgetary and strategic objectives
or (ii) specific Individual performance objectives, any of which shall be set by
the Board. Bonuses, if any, may be payable in a combination of a lump sum cash
payment and the issuance of options to purchase shares of common stock of
Employer's parent company, Professional Bancorp, Inc. ("PBI"), to be allocated
as mutually agreed upon by the parties.
(c) STOCK OPTIONS. In consideration of Executive agreeing to
enter into this Agreement, on November 1, 1999, Employer caused PBI to grant to
Executive fully vested stock options to purchase 30,000 shares of PBI's common
stock at an exercise price of $11.16 per share. These 30,000 options shall be
exercisable on the earlier of: (i) the closing of the sale of all or
substantially all of the assets of Employer or PBI to, or the merger of Employer
or PBI with, a third party, (ii) on the fifteenth of the month anniversary date
of the effective date of this Agreement if Employer or PBI has not entered into
a Definitive Agreement to sell all or substantially all of its assets to or to
merge with a third party, or (iii) the date Employer terminates this Agreement
at will pursuant to Section 8(e) hereof or Employee terminates this Agreement
for Good Cause pursuant to Section 8(c) hereof. On the nine month anniversary
date of the effective date of this Agreement, if by such date PBI or Employer
has not entered into a Definitive Agreement to sell all or substantially all of
its assets to or to merge with a third party, Employer shall cause PBI to grant
to Executive fully vested and immediately exercisable options to purchase 20,000
shares of PBI's common stock at an exercise price determined pursuant to the
applicable stock option plan. Executive shall be eligible to receive additional
performance-based options, consistent with PBI's applicable stock option plans,
as determined by the Compensation Committee of the Board. All options are
subject to the terms of the applicable stock option plan(s).
(d) SEVERANCE. If Employer terminates this Agreement at will
pursuant to Section 8(e) hereof or if Employer terminates this Agreement for
Good Reason pursuant to Section 8 (c ) hereof, Employer will continue to pay
Executive the monthly base salary that he is earning at the time of the Notice
of Termination for twelve months following the date of the Notice of
Termination.
5. FRINGE BENEFITS.
(a) INCENTIVE PLANS/BENEFITS. Subject to the eligibility
requirements of each plan, Executive shall be entitled to participate in all
medical or health plans, dental and vision plans, life insurance plans,
disability plans, 401(K)/savings and retirement plans, welfare plans, incentive
plans, equity based plans and all other benefits generally available to
full-time officers or senior management employees of Employer in effect from
time to time. All insurance is subject to the terms of the policies in effect
and to Executive's insurability under such policies.
(b) AUTO ALLOWANCE. Executive shall be entitled to an auto
allowance of Five Hundred Dollars ($500) per month.
(c) VACATION. Executive shall receive twenty (20) paid
vacation days per year.
(d) BUSINESS EXPENSES. In accordance with the policies
relating to Employer's senior executive employees, Employer will reimburse
Executive for reasonable out-of-pocket expenses incurred by Executive in the
performance of his duties hereunder. All such reimbursements will be made upon
submission to Employer of written expense reports or other documentation which
describe and substantiate such business expenses and which are in such form as
Employer may from time to time prescribe for its executive employees.
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6. CONFIDENTIAL INFORMATION. Executive acknowledges that in his position with
Employer, he will be exposed to and receive information relating to the
confidential affairs of Employer, Employer's subsidiaries and PBI, including but
not limited to, Employer's, Employer's subsidiaries' and PBI's customer lists,
financial information, strategic plans, business and marketing plans and
strategies, information concerning Employer's, Employer's subsidiaries' and
PBI's products, promotions, customers, development, financing, expansion plans,
business policies and practices, and other information considered by Employer,
Employer's subsidiaries and PBI to be confidential, proprietary and in the
nature of trade secrets (the "Confidential Information"). Executive acknowledges
that the Confidential Information is a valuable, special and unique asset of
Employer's subsidiaries' and PBI's businesses. Executive agrees to keep all
Confidential Information confidential and shall not, during the Term or
thereafter, directly or indirectly disclose all or any part of the Confidential
Information in any manner whatsoever to any person, firm, corporation,
association or other than outside professionals employed by Employer or use such
Confidential Information for his own personal benefit, without the prior written
consent of Employer, unless such disclosure is made in the ordinary course of
Employer's business and is necessary and advances the best interests of
Employer.
7. EMPLOYER DOCUMENTS. Executive expressly agrees that all plans,
customer lists, reports, manuals, documents, files, studies, instruments and
other materials used and/or developed by Executive relating to Employer,
Employer's subsidiaries and PBI and their respective customers are solely the
property of the Employer, Employer's respective subsidiary or PBI and that
Executive has no right, title or interest therein. During Executive's employment
with Employer and after termination thereof, regardless of the reason therefor,
Executive shall hold fiduciary capacity for the benefit of Employer, all such
plans, lists, disks, documentation, programs, reports, memoranda, diaries,
notes, records, letters, manuals and all other documents and information of
Employer. Upon termination of Executive's employment for any reason, Executive
shall immediately deliver all such documents, without retaining any copies
thereof, to Employer.
8. TERMINATION OF EMPLOYMENT.
(a) DEATH OR INCAPACITY. This Agreement shall terminate
automatically upon Executive's death during the Term. This Agreement shall also
terminate on the date of the determination by the Board that the Incapacity of
Executive has occurred during the Term ("Incapacity Effective Date").
(b) CAUSE. Employer may terminate Executive's employment for
Cause, as defined herein.
(c) GOOD REASON. Executive may terminate his employment for
Good Reason, as defined herein.
(d) WRITTEN NOTICE. Executive may terminate this Agreement at
any time upon ninety (90) days' prior written notice to Employer.
(e) AT WILL. Employer may terminate this Agreement by written
notice to Executive at any time for any reason.
(f) NOTICE OF TERMINATION. Any termination (except by death)
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 14 of this Agreement. For purposes of this Agreement,
a "Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provision so indicated, (iii) in
the case of termination is pursuant to a resolution of the Board (which, in the
case of Cause, is pursuant to Section 8(b) hereof), and (iv) if the Date of
Termination (as defined below) is other than the date of such notice, specifies
the termination date. The failure by Executive or Employer, respectively,
hereunder or preclude Executive or Employer, respectively, from asserting such
fact or circumstance in enforcing Executive's or Employer's rights hereunder.
(g) DATE OF TERMINATION. "Date of Termination" means (I) if
Executive's employment is terminated by Employer for Cause, or by Employer other
than for Cause, death or Incapacity, the date of the Notice of Termination
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or any later date specified therein, as the case may be, (ii) if Executive's
employment is terminated by Executive for Good Reason, the Date of Termination
shall be thirty (30) days after the date of the Notice of Termination, however
Employer may specify an earlier date in its discretion after its receipt of the
notice from Executive, (iii) if Executive's employment is terminated by reason
of death or Incapacity, the Date of Termination shall be the date of death of
Executive or the Incapacity Effective Date, as the case may be, and (iv) if
Executive's employment is terminated by Written Notice by Executive, the Date of
termination shall be ninety (90) days after the date of the Notice of
Termination.
9. OBLIGATIONS OF EMPLOYER UPON TERMINATION.
(a) OBLIGATIONS UPON TERMINATION. Upon termination of this
Agreement for any reason, Employer's sole obligation to Executive (except as
otherwise expressly set forth herein) shall be to pay any accrued but unpaid
salary or bonus up to the Date of Termination, less withholding and other taxes
are required by law, and provide to Executive any other accrued amounts or
benefits required to be paid or provided or which Executive is eligible to
receive under any Employer plan in which Executive participated (such other
amounts and benefits shall be paid to Executive within thirty (30) days after
the Date of Termination; and any benefits shall be paid pursuant to the
applicable Employer plan.
(b) EXCISE TAX LIMITATION. To the extent that the payment and
benefits provided under this Agreement and payments or benefits provided to, or
for the benefit of, Executive under any other Employer plan or agreement (such
payments or benefits are collectively referred to as the "Payments") would be
subject to the excise tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended, the Payments shall be reduced (but
not below zero) if and to the extent necessary so that no Payment to be made or
benefit to be provided to Executive shall be subject to the Excise Tax.
10. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any Employer plan for
which Executive may qualify, nor shall anything herein limit or otherwise affect
such rights as Executive may have under any contract or agreement with Employer
or any of Employer's subsidiaries. Amounts which are vested benefits or which
Executive is otherwise entitled to receive under any Employer plan or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, program, contract or agreement except as explicitly modified by this
Agreement.
11. NON-SOLICITATION ON NON-COMPETITION. During the Term hereof,
Executive agrees that he shall not, directly or indirectly, either individually
or as an owner, partner, director, agent, employee, or otherwise, solicit,
endeavor to entice away from Employer or any of Employer's subsidiaries or
otherwise engage in any activity intended to disrupt or terminate the
relationship of Employer or nay of Employer's subsidiaries with any of their
clients, customers, employees or agents. During the Term hereof, Executive
agrees that he shall not, directly or indirectly, either individually or as an
owner, partner, director, agent, employee, consultant or otherwise, compete with
Employer or any of Employer's subsidiaries or PBI.
12. REMEDIES. Executive agrees that any breach by Executive of the
terns of Section 6, 7 or 11 hereof would result in irreparable injury and damage
to Employer and Employer's parents and/or subsidiaries for which Employer and
Employer's parents and subsidiaries would have no adequate remedy at law.
Therefore, in the event of Executive's breach or threatened breach of Section
6,7 or 11 hereof, Executive agrees that Employer and Employer's parents and
subsidiaries shall be entitled to an immediate preliminary restraining order and
an injunction restraining and enjoining Executive to prevent such breach or
threatened breach or continued breach by Executive and any and all persons or
entities acting for and/or with Executive, without having to prove damages, and
to all costs and expenses, including reasonable attorneys' fees and costs, in
addition to any other remedies to which Employer or Employer's subsidiaries may
be entitled at law or in equity. In addition to or in lieu of the above,
Employer or Employer's subsidiaries may pursue all other remedies available to
Employer and Employer's subsidiaries for such breach or threatened breach,
including the recovery of damages and reasonable attorneys' fees, from
Executive.
13. SUCCESSORS: BINDING AGREEMENT. This Agreement shall be binding upon
the respective successors, assigns, heirs and representative of the parties.
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14. NOTICES. Any notice, request or other information to be given or
served hereunder by any party to another shall be deemed given or served
hereunder by any party to another if in writing and delivered personally or sent
by prepaid registered or certified mail, return receipt requested, to:
If to Employer: First Professional Bank, N. A.
000 Xxxxxxxx
Xxxxx Xxxxxx, Xx. 00000
Attn: Mr. Xxxxxxx Xxxxxx,
Chairman of the Board
If to Executive: Xx. Xxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxx Xxxxxxx, Xx. 00000
Or to such other address as any party may designate for itself by notice to the
other party given in accordance with the provisions hereof.
15. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties with respect to the subject matter hereof and supersedes any and all
other agreements or understandings, written or oral, relating to such subject
matter. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, oral or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement or promise not contained in this
Agreement concerning its subject matter shall be valid or binding .
16. MODIFICATION: WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
agreed to in writing and signed by each party hereto. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.
17. NON-ASSIGNABILITY. Executive acknowledges that his services are
unique and personal. Accordingly, Executive may not assign any of his rights or
delegate his duties or obligations under this Agreement.
18. GOVERNING LAW. This Agreement shall be governed and construed and
the legal relationship and obligations of the parties determined in accordance
with the laws of the State of California.
19. SEVERABILITY. Should any provision of this Agreement for any reason
be declared invalid, void or unenforceable by a court of competent jurisdiction,
the validity and binding effect of any remaining portion shall not be affected,
and the remaining portions of this Agreement shall remain in full force and
effect as if this Agreement had been executed with said provision eliminated.
20. SURVIVAL. The provisions of Sections 6,7 and 11 shall survive the
termination or expiration of the Agreement.
21. ARBITRATION. In the event that any dispute shall arise between the
parties concerning the provisions of this Agreement by either of the parties
hereto, and the parties are unable to mutually adjust and settle same, such
dispute or disputes (other that dispute(s) concerning an alleged or threatened
breach be Executive of Section 6,7 or 11 hereof) shall be submitted to binding
arbitration in Santa Xxxxxx or Los Angeles, California pursuant to the
applicable commercial rules of the American Arbitration Association, and the
decision and determination of the arbitrators shall be final and binding upon
the parties.
22. KEY PERSON INSURANCE. Executive agrees to make all reasonable
effort to obtain any key person insurance requested by Employer.
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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
in its corporate name by an officer duly authorized to enter into and execute
this Agreement, and Executive has affixed his signature hereto, as of the date
and year first above written.
FIRST PROFESSIONAL BANK, N.A.
By:
---------------------------------------
Xxxxx X Xxxxxxxx, Chairman of the Board
---------------------------------------
Xxxx Xxxxxx
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FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
This First Amendment to Executive Employment Agreement I made effective
as of the 1st day of February, 2000 among FIRST PROFESSIONAL BANK, N.A. (the
"Bank") and PROFESSIONAL BANCORP, INC. ("PBI") (PBI and the Bank being
collectively referred to herein as "Employer") and Xxxx Xxxxxx ("Executive").
RECITALS
WHEREAS, the Bank and Executive entered into an Employment Agreement
dated effective as of the 21st day of October, 1999 (the "Employment
Agreement"); and
WHEREAS, PBI now desires to also employ Executive, and PBI, the Bank
and Executive desire to amend the Employment Agreement in certain respects.
NOW, THEREFORE, in consideration of the foregoing promises and the
terms covenants and conditions that are set forth herein, the parties here to
agree as follows:
1. SECTION 3. The first sentence of Section 3 of the Employment Agreement
is hereby amended to read as follows:
"Effective as of the date hereof, Executive shall serve as the
Chairman of the Board and Chief Executive Officer of both PBI and the
Bank and shall perform the duties and the responsibilities set forth in
Exhibit A attached hereto and incorporated herein in reference and
shall have the authority and perform such other duties, services and
responsibilities incident in such positions as are the customary of the
Chairman of the Board and Chief Executive Officer of a bank and a bank
holding company, and such other reasonable duties and responsibilities
that are determined from time to time by the Boards of Directors of the
Bank and PBI (collectively, the "Board").
2. SECTION 4(a). The first sentence of Section 4(a) of the Employment
Agreement is hereby amended to read as follows:
"Effective February 1, 2000, Executive shall receive an annual
base salary of Two Hundred Thousand Dollars ($200,000) during the
remainder of the Term (the "Annual Base Salary"), payable in equally,
bi-weekly installments."
3. SECTION 4(c). Section 4(c) is hereby amended and restated in its
entirety to read as follows:
"(c) STOCK OPTIONS. Effective February 1, 2000, the options to
purchase 30,000 shares of PBI's common stock granted to Executive on
November 1, 1999 are cancelled. In consideration of Executive agreeing
to enter into this First Amendment to Executive Employment Agreement,
PBI shall grant to Executive, effective February 1, 2000, stock options
to purchase 100,000 shares of PBI. Of these options, as many thereof as
possible shall be incentive stock options (as permitted by the
applicable plan), and the remainder shall be non-qualified options. The
options shall vest as follows: (i) option to purchase 50,000 shares
shall vest immediately on the effective date hereof, (ii) options to
purchase 25,000 shares shall vest on February 1, 2001, and (iii) the
remaining options to purchase $25,000 shares shall vest on February 1,
2002. The exercise price of the options hall be the average of the
closing sales prices of the shares of PBI during the 30 day period
immediately preceding February 1, 2000."
4. RATIFICATION. The remainder of the Employment Agreement is hereby
ratified in all respects.
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IN WITNESS WHEREOF, this First Amendment has been executed by Executive
and by duly authorized officers of the Bank and PBI effective as of the date
first written above.
FIRST PROFESSIONAL BANK, N.A.
--------------------------------
Xxxx Xxxxxx, Executive
By:
--------------------------------
Title:
-----------------------------
PROFESSIONAL BANCORP, INC.
By:
--------------------------------
Title:
-----------------------------
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