Exhibit 10.19
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 1st day of November, 1999,
among FIRST PROFESSIONAL BANK, N.A. (the "Bank") and PROFESSIONAL BANCORP, INC.
("PBI") (PBI and the Bank are collectively referred to herein as "Employer") and
XXXXX XXXXXXXX ("Executive").
RECITALS
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WHEREAS, PBI and the Bank both desire to employ Executive as their Senior
Vice President and Chief Financial Officer, and Executive desires to be employed
by PBI and the Bank, 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 definitions set
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forth on Exhibit B hereto shall apply unless the context clearly indicates
otherwise.
2. Employment and Term. Employer hereby employs Executive and Executive
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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 November 1, 1999 and ending on October 31, 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 Senior Vice President and Chief
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Financial Officer of PBI and the Bank 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
Senior Vice President and Chief Financial Officer of a bank and bank holding
company, and such other reasonable duties and responsibilities as are determined
from time to time by the Board. Executive shall report to the Chief Executive
Officer of the Bank and the Board of PBI. Executive shall devote one hundred
percent (100%) of his business time, attention and skill to the performance of
his duties hereunder, 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.
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(a) Salary. Executive will receive an annual base salary of One
Hundred Thirty Thousand Dollars ($130,000) 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.
(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 PBI, to be allocated as determined
by Employer.
(c) Stock Options. On the execution date hereof, in consideration of
Executive agreeing to enter into this Agreement, PBI shall grant to Executive
fully vested and immediately exercisable stock options to purchase 10,000 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 during the two-year period beginning on the date of
this Agreement, (i) PBI or the Bank sells all or substantially all of its assets
to, or merges with, a third party, and (ii) Executive's employment is terminated
thereafter (within such two-year period) by Employer for other than Cause or the
death or Incapacity of Executive or by Executive for Good Reason, then Employer
will continue to pay Executive the monthly base salary that he is earning at the
time of such termination for a period of nine months following the Date of
Termination.
5. Fringe Benefits.
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(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.
6. Confidential Information. Executive acknowledges that in his positions
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with Employer, he will be exposed to and receive information relating to the
confidential affairs of Employer and Employer's subsidiaries, including but not
limited to, Employer's and Employer's subsidiaries' customer lists, financial
information, strategic plans, business and marketing plans and strategies,
information concerning Employer's and Employer's subsidiaries' products,
promotions, customers, development, financing, expansion plans, business
policies and practices, and other information considered by Employer and
Employer's subsidiaries to be confidential, proprietary and in the nature of
trade secrets (the "Confidential
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Information"). Executive acknowledges that the Confidential Information is a
valuable, special and unique asset of Employer's and Employer's subsidiaries'
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 entity 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,
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customer lists, reports, manuals, documents, files, studies, instruments and
other materials used and/or developed by Executive relating to Employer and
Employer's subsidiaries and their respective customers are solely the property
of Employer and Employer's respective subsidiary 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 in a 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.
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(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 by Employer for Cause or for Incapacity, confirms that
such 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 to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason, Incapacity or Cause shall not serve to waive any right of Executive
or Employer, respectively, hereunder or preclude Executive
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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 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.
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(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 as
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 hereinafter referred to as the "Accrued Benefits"). Any salary
or bonus 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 payments 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
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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 at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice, program, contract or agreement except as explicitly
modified by this Agreement.
11. Non-Solicitation and Non-Competition. During the Term hereof,
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Executive agrees that he shall not, directly or indirectly, either individually
or as an owner, partner, director, agent, employee, consultant 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 any 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.
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12. Remedies. Executive agrees that any breach by Executive of the terms
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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 Sections
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
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the respective successors, assigns, heirs, and representatives of the parties.
14. Notices. Any notice, request or other information to be given or
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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 PBI: Professional Bancorp, Inc.
000 Xxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
ATTN: Xx. Xxxxx X. Xxxxxxxx, Chairman of the
Board
If to Bank: First Professional Bank, N.A.
000 Xxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
ATTN: Xx. Xxxx Xxxxxx, Chief Executive Officer
If to Executive: Xx. Xxxxx Xxxxxxxx
0000 Xxxxx Xxxx
Xxx Xxxxx, 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
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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,
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waived or discharged unless such modification, waiver or discharge is agreed to
in writing and signed by each party hereto. No waiver by any party hereto at
any time of any breach by any other party hereto of, or
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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
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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
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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
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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
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termination or expiration of this Agreement.
21. Arbitration. In the event that any dispute shall arise among the
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parties concerning the provisions of this Agreement or the performance of any
part of their obligations hereunder, or in the event of an alleged breach of
this Agreement by any of the parties hereto, and the parties are unable to
mutually adjust and settle same, such dispute or disputes (other than dispute(s)
concerning an alleged or threatened breach by Executive of Sections 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 arbitrator(s)
shall be final and binding upon the parties.
22. Key Person Insurance. Executive agrees to make all reasonable
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efforts to obtain any key person insurance requested by Employer.
IN WITNESS WHEREOF, PBI and the Bank have caused this Agreement to be
executed in their corporate names 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.
PROFESSIONAL BANCORP, INC.
By:________________________________________
Xxxxx X. Xxxxxxxx, Chairman of the Board
FIRST PROFESSIONAL BANK, N.A.
By:________________________________________
Xxxxx X. Xxxxxxxx, Chairman of the Board
___________________________________________
XXXXX XXXXXXXX
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EXHIBIT A
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POSITION DESCRIPTION
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER OF
FIRST PROFESSIONAL BANK, N.A. AND PROFESSIONAL BANCORP, INC.
. Prepares monthly, quarterly and annual financial statements for PBI and
the Bank.
. Prepares all public and regulatory reports required of PBI and the Bank
by law and any regulatory authorities, and ensures compliance by PBI and
the Bank with all reporting requirements of federal, state and local law
and applicable regulatory authorities.
. Maintains a good relationship with PBI's and the Bank's independent
public accountants and coordinates the accountants review of financial
statements and public reports of PBI and the Bank.
. Develops and recommends to the Board long-term strategies and visions for
PBI and the Bank that leads to creation of shareholder value.
. Develops and recommends to the Board annual business plans and budgets
and capital plans that support the Bank's long-term strategy.
. Consistently strives to achieve the Bank's financial and operating goals
and objectives.
EXHIBIT B
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DEFINITIONS
As used in this Agreement:
(a) "Board" means the Board of Directors of PBI and the Bank.
(b) "Cause" means (i) willful malfeasance or willful or reckless
misconduct by Executive in connection with his employment duties hereunder, (ii)
continuing refusal by Executive to perform his duties under this Agreement after
notice of such refusal to perform such duties was given to Executive by
Employer, (iii) failure of Executive to cure a material breach by Executive of
the provisions of this Agreement within fifteen (15) days after written
notification by Employer to Executive specifying the breach, (iv) the
determination by a state or federal banking agency or governmental authority
having jurisdiction over Employer or Employer's subsidiaries that Executive is
not suitable to act in the capacity for which he is employed by Employer, (v)
Executive's willful and intentional violation of any federal banking laws, or of
the Bylaws, rules, policies or resolutions of Employer, or of the rules or
regulations of the Federal Deposit Insurance Corporation, OCC or other
regulatory agency or governmental authority having jurisdiction over Employer or
Employer's subsidiaries, or (vi) the commission by Executive of any felony or a
misdemeanor involving moral turpitude. Termination for Cause shall only be made
by a resolution adopted in good faith by a majority of the Board at a meeting of
the Board called and held for that purpose (after ten (10) days prior written
notice of the meeting to Executive and reasonable opportunity for Executive to
be heard by the Board at the meeting prior to such vote.)
(c) "Good Reason" shall mean the failure of the Employer to cure any
material breach by Employer of any provision of this Agreement within fifteen
(15) days after written notification by Executive to Employer specifying the
breach.
(d) "Incapacity" means any permanent physical or mental illness or
disability of Executive which continues for a period of three consecutive months
or more and which at any time after such three-month period the Board shall
reasonably determine renders Executive incapable of substantially performing his
duties during the remainder of the Term.
