EXHIBIT 10.1
BRIDGE CAPITAL HOLDINGS LOGO APPEARS HERE BRIDGE BANK LOGO APPEARS HERE
EMPLOYMENT AGREEMENT
This Agreement is made and entered into on February 15, 2007, by and
among Bridge Capital Holdings ("BCH"), Bridge Bank, National Association
("Bank") and Xxxxxx X. Xxxxx ("Executive") for the purposes set forth
hereinafter ("Agreement").
RECITALS
WHEREAS, BCH 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 ("BGFRS");
WHEREAS, BCH is the parent holding company for the Bank, which is a
national banking association and wholly-owned subsidiary of BCH, subject to the
supervision and regulation of the Office of the Comptroller of the Currency
("OCC");
WHEREAS, Executive is currently the President and Chief Executive
Officer of the Bank pursuant to an offer of employment letter dated May 9, 2000
and a supplement letter thereto dated May 18, 2000, between L-Bank, in
organization (the predecessor to the Bank), and the Executive (the "Prior
Agreement");
WHEREAS, the Executive also serves as the President and Chief Executive
Officer of BCH and as a director of the Bank and BCH; and
WHEREAS, it is the intention of the parties to enter into an employment
agreement for the purposes of assuring the continued services of the Executive
as the President and Chief Officer of the Bank and as the President and Chief
Executive Officer of BCH.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, BCH, the Bank and the Executive agree as follows:
AGREEMENT
1. TERM OF EMPLOYMENT; TERMINATION OF PRIOR AGREEMENT AND WAIVER OF
RIGHTS AND BENEFITS AND RELEASE OF OBLIGATIONS THEREUNDER. Pursuant to this
Agreement, the Bank and BCH employ the Executive and the Executive hereby
accepts employment with the Bank and BCH, upon the terms and conditions
hereinafter set forth. The term of this Agreement shall be a period of three (3)
years from the date hereof, subject to the termination provisions of paragraph
16. Upon the occurrence of the third annual anniversary of the date of this
Agreement, and on each anniversary date thereafter, the term of this Agreement
shall be deemed automatically extended for an additional one (1) year term,
subject to the termination provisions of paragraph 16.
In consideration of the Executive's base salary and severance
benefits rights and such other benefits provided pursuant to this Agreement,
which the Executive and the Bank acknowledge and agree represents an increase in
compensation over the compensation provided under the Prior Agreement and is
adequate consideration for the termination of the Prior Agreement, BCH, the Bank
and the Executive agree that the Prior Agreement is hereby terminated effective
as of the date of this Agreement and that this Agreement is intended by the
parties hereto to supersede in full and constitute a complete replacement for
the Prior Agreement and any rights and benefits thereunder, but does not
supersede or replace the rights and benefits under (i) the Indemnification
Agreement dated March 20, 2003, specified in paragraph 5 of this Agreement, (ii)
the Supplemental Executive Retirement Plan dated August 1, 2004, specified in
paragraph 13(d) of this Agreement or (iii) any stock option agreement between
BCH and the Executive as specified in paragraph 12 of this Agreement. In
furtherance thereof and notwithstanding any provision of this Agreement or the
Prior Agreement to the contrary, the Executive, for himself, and his heirs,
beneficiaries, executors, administrators, trustees, and any other legal or
personal representatives, agents, successors or permitted assignees or
transferees, further expressly agrees to and does hereby waive and relinquish
any and all rights and benefits under the Prior Agreement and specifically
releases the Bank and BCH, and their respective directors, officers, employees,
agents, affiliates and successors, from any obligations, duties and liabilities
under the Prior Agreement including any matters covered or contemplated by
California Civil Code Section 1542 which reads as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his settlement
with the debtor."
2. DUTIES AND OBLIGATIONS OF EXECUTIVE. The Executive shall
serve as a director of the Bank and BCH and as the President and Chief Executive
Officer of the Bank and of BCH pursuant to this Agreement and shall perform the
customary duties of each such office in the commercial banking industry,
including the supervision, management and control over, and responsibility for,
the general management, operations and officers of BCH and the Bank, and such
additional duties not inconsistent therewith, as may from time to time be
reasonably requested of him by the Board of Directors of BCH.
3. DEVOTION TO BANK'S AND BCH'S BUSINESS.
(a) The Executive shall devote his full business time,
ability, and attention to the business of the Bank and BCH during the term of
this Agreement and shall not during the term of this Agreement engage in any
other business activities, duties, or pursuits whatsoever, or directly or
indirectly render any services of a business, commercial, or professional nature
to any other person or organization, whether for compensation or otherwise,
without the prior written consent of the Board of Directors of BCH. However, the
expenditure of reasonable amounts of time for educational, charitable, or
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professional activities shall not be deemed a breach of this Agreement if those
activities do not materially interfere with the services required of the
Executive under this Agreement. Nothing in this Agreement shall be interpreted
to prohibit the Executive from making passive personal investments. However, the
Executive shall not directly or indirectly acquire, hold, or retain any interest
in any business competing with or similar in nature to the business of the Bank
and BCH, except passive shareholder investments in other financial institutions
and their respective affiliates which do not exceed five percent (5%) of the
outstanding voting securities in the aggregate in any single financial
institution and its affiliates on a consolidated basis.
(b) The Executive hereby represents and agrees that the
services to be performed under the terms of this Agreement are of a special,
unique, unusual, extraordinary, and intellectual character that gives them a
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in an action at law. The Executive therefore expressly agrees that
the Bank and BCH, in addition to any other rights or remedies that the Bank and
BCH may possess, shall be entitled to injunctive and other equitable relief to
prevent or remedy a breach of this Agreement by the Executive.
4. NONCOMPETITION, NONSOLICITATION AND NONDISCLOSURE BY THE EXECUTIVE.
(a) The Executive shall not, during the term of this
Agreement, directly or indirectly, either as an employee, employer, consultant,
agent, principal, stockholder (except as permitted in paragraph 3 (a) of this
Agreement), officer, director, or in any other individual or representative
capacity, engage or participate in any competitive banking or financial services
business without the prior written consent of the Board of Directors of the Bank
or BCH.
(b) Following termination of this Agreement and the
Executive's employment hereunder and for a period of twelve (12) months
thereafter, the Executive shall not use any confidential, trade secret, or
proprietary information of the Bank or BCH, or their affiliates and
subsidiaries, including information described in paragraph 6 below, to solicit,
encourage or assist, directly, indirectly or in any manner whatsoever, (i) any
employees of the Bank, BCH or their affiliates and subsidiaries (including any
former employees who voluntarily terminated employment with the Bank within a
twelve (12) month period prior to the Executive's termination of employment with
the Bank or BCH) 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 Bank has located its headquarters or branch offices; or
(ii) any customer, person or entity that has a business relationship with the
Bank or during the twelve (12) month period prior to the Executive's termination
of employment with the Bank was engaged in a business relationship with the
Bank, 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 Bank has located its headquarters
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or branch offices.
(c) Following termination of this Agreement and the
Executive's employment hereunder and for a period of twelve (12) months
thereafter, the Executive will not (i) disclose or use in any manner whatsoever,
confidential, trade secret and proprietary information of the Bank, BCH, or
their affiliates and subsidiaries, including information described in paragraph
6 below except as expressly permitted thereunder; and (ii) assist (by disclosing
information described in paragraph 6 below except as expressly permitted
thereunder) any person or entity, directly, indirectly or in any manner
whatsoever, that engages in or seeks to engage in any competitive banking or
financial services business.
5. INDEMNIFICATION. The Executive entered into an indemnification
agreement with the Bank dated March 20, 2003, pursuant to which, to the extent
permitted by law and applicable regulations of the BGFRS and OCC, the Bank, and
as applicable BCH, shall indemnify the Executive if he was or is a party or is
threatened to be made a party in any action brought by a third party against the
Executive (whether or not the Bank or BCH is joined as a party defendant)
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with said action if the Executive acted in
good faith and in a manner the Executive reasonably believed to be in the best
interests of the Bank and BCH (and with respect to a criminal proceeding if the
Executive had no reasonable cause to believe his conduct was unlawful), provided
that the alleged conduct of the Executive arose out of and was within the course
and scope of his employment as an officer or Executive of the Bank and BCH.
6. DISCLOSURE OF INFORMATION. The Executive shall not, either before or
after termination of this Agreement, without the prior written consent of the
Board of Directors of BCH 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 Bank or BCH and their respective affiliates and
subsidiaries; provided, that such information shall not include information (i)
in or which enters the public domain (other than by breach of the Executive's
obligations hereunder); (ii) acquired by the Executive other than in connection
with his employment; or (iii) that is disclosed to the Executive by a third
party not obligated to BCH or the Bank to keep such information confidential.
The Executive further recognizes and acknowledges that any financial information
concerning any customers of the Bank or BCH and their respective affiliates and
subsidiaries, as it may exist from time to time, is strictly confidential and is
a valuable, special and unique asset of Bank's and BCH's business. The Executive
shall not, either before or after termination of this Agreement, 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 the Executive is required by law to disclose such information described in
this paragraph 6, the Executive will provide the Bank and BCH, and their counsel
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with immediate notice of such request so that they may consider seeking a
protective order. If, in the absence of a protective order or the receipt of a
waiver hereunder, the Executive is nonetheless, in the written 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 the Executive may disclose (on an "as
needed" basis only) such information to such tribunal or other party without
liability hereunder. Notwithstanding the foregoing, the Executive may disclose
such information concerning the business or operations of the Bank or BCH and
their respective affiliates and subsidiaries as may be required by the BGFRS,
OCC or other regulatory agency having jurisdiction over the operations of the
Bank or BCH in connection with an examination of the Bank or BCH or other
proceeding conducted by such regulatory agency.
7. WRITTEN, PRINTED OR ELECTRONIC MATERIAL. All written, printed or
electronic material, notebooks and records including, without limitation,
computer disks used by the Executive in performing duties for the Bank or BCH,
other than the Executive's personal address lists, telephone lists, notes and
diaries, are and shall remain the sole property of the Bank and BCH. Upon
termination of employment, the Executive shall promptly return all such material
(including all copies, extracts and summaries thereof) to the Bank or BCH.
8. SURETY BOND AND SEVERANCE BENEFIT. The Executive agrees that he will
furnish all information and take any other steps necessary from time to time to
enable the Bank to obtain or maintain a fidelity bond conditional on the
rendering of a true account by the Executive of all monies, goods, or other
property which may come into the custody, charge, or possession of the Executive
during the term of his employment. The surety company issuing the bond and the
amount of the bond must be acceptable to the Bank. All premiums on the bond
shall be paid by the Bank. The Bank, BCH or their respective successors, shall
have no obligation to pay or provide severance benefits to the Executive in
accordance with paragraph 16 (d) or 16(e), as applicable, of this Agreement in
the event that the Executive's employment is terminated in connection with the
Executive's non-insurability for surety bond coverage as determined in the sole
discretion of the Bank's insurer at any time during the term of this Agreement.
9. BASE SALARY. The Executive shall receive a salary at the rate of two
hundred fifty thousand dollars ($250,000) per annum, payable in installments
during the term of this Agreement of approximately ten thousand four hundred
sixteen dollars and sixty-six cents ($10,416.66) on the fifteenth and last day
of each month, subject to applicable adjustments for withholding taxes,
prorations for any partial employment period and such other applicable payroll
procedures of the Bank. The Executive shall receive such annual adjustments in
salary, if any, as may be determined by the BCH's Board of Directors, in its
sole discretion, resulting from the Board of Directors annual review of the
Executive's compensation each year during the term of this Agreement.
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10. SALARY CONTINUATION DURING DISABILITY. If the Executive for any
reason (except as expressly provided below) becomes temporarily or permanently
disabled so that he is unable to perform the duties under this Agreement, the
Executive shall be paid the base salary otherwise payable to Executive pursuant
to paragraph 9 of this Agreement, reduced by the amounts received by the
Executive from state disability insurance, or worker's compensation or other
similar insurance benefits through policies provided by the Bank or BCH, for a
period of six (6) months from the date of disability. For purposes of this
paragraph 10, "disability" shall be defined as provided in the Bank's or BCH's
disability insurance program.
11. INCENTIVE COMPENSATION. The Executive shall be entitled to receive
an annual incentive compensation payment pursuant to the terms of the Management
Incentive Compensation Plan in effect at the date of this Agreement and as
amended at any future date (the "Incentive Plan") or pursuant to any successor
incentive plan or arrangement adopted by the Bank or BCH for its officers.
Except as set forth in the Incentive Plan or in any successor incentive plan or
arrangement, no incentive compensation payments shall be prorated for a partial
year and the Executive shall not be entitled to receive incentive compensation
payments for any year during the term of this Agreement in which Executive was
not employed by the Bank or BCH for the full fiscal year. Notwithstanding any
provision of the Incentive Plan or any successor incentive plan or arrangement,
no right of continued employment or any modification of the "at will" nature of
the Executive's employment with BCH and/or the Bank shall be conferred upon the
Executive thereunder or result therefrom.
12. STOCK OPTIONS. The Executive acknowledges having received the grant
of stock options pursuant to the BCH Amended and Restated 2001 Stock Option Plan
and/or BCH 2006 Equity Incentive Plan (collectively, the "BCH Plans"). Any
future grant of stock options to the Executive pursuant to the BCH Plans shall
be determined by and in the sole discretion of the Board of Directors of BCH.
Any such future stock option grant shall be evidenced by a stock option
agreement in the form required by the BCH Plans. Notwithstanding any provision
of the BCH Plans or any such stock option agreement to the contrary, no right of
continued employment or any modification of the "at will" nature of the
Executive's employment with BCH and/or the Bank shall be conferred upon the
Executive thereunder or result therefrom.
13. OTHER BENEFITS. The Executive shall be entitled to those benefits
adopted by the Bank and BCH for all officers of the Bank and BCH, subject to
applicable qualification requirements and regulatory approval requirements, if
any. The Executive shall be further entitled to the following additional
benefits which shall supplement or replace, to the extent duplicative of any
part or all of the general officer benefits, the benefits otherwise provided to
the Executive:
(a) VACATION. The Executive shall be entitled to five (5)
weeks of annual vacation leave at his then existing rate of base salary each
year during the term of this Agreement. The Executive may be absent from his
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employment for vacation as long as such leave is reasonable and does not
jeopardize his responsibilities and duties specified in this Agreement. The
length of vacation should not exceed two (2) weeks without the approval of BCH's
Board of Directors. Vacation time will accrue in accordance with the Bank's
personnel policies.
(b) AUTOMOBILE ALLOWANCE AND INSURANCE. The Bank or BCH will
pay to the Executive an automobile allowance in the amount of one thousand two
hundred fifty dollars ($1,250) per month during the term of this Agreement. The
Bank or BCH shall reimburse the Executive for gasoline expenditures related to
business use of the automobile acquired or used by the Executive upon
presentation and approval of receipts, invoices or other appropriate evidence of
such expense in accordance with the policies of the Bank or BCH. The Executive
shall acquire or otherwise make available for his business and personal use an
automobile suitable to his position and maintain it in good condition and
repair. The Executive shall obtain and maintain public liability insurance and
property damage insurance policies with insurer(s) acceptable to the Bank and
BCH and with such coverages in such amounts as may be acceptable to the Bank and
BCH from time to time. Such insurance policies shall name the Bank and BCH as
additional insureds, subject to the requirement that the Executive's allowance
described above shall be increased in an amount equal to the additional premium
expense, if any, resulting from the Bank and BCH being named as additional
insureds. The Bank or BCH may, in its sole discretion, elect to provide and pay
for such insurance policies in lieu of the Executive maintaining such policies.
(c) INSURANCE. The Bank or BCH shall provide during the term
of this Agreement at no cost to the Executive group life, health (including
medical, dental, vision and hospitalization), accident and disability insurance
coverage for the Executive and his dependents through a policy or policies
provided by the insurer(s) selected by the Bank or BCH in its sole discretion.
(d) SUPPLEMENTAL COMPENSATION. The Bank and the Executive
acknowledge that they have entered into a Supplemental Executive Retirement Plan
dated August 1, 2004, which provides supplemental compensation benefits to the
Executive payable upon retirement or as otherwise set forth in such Plan.
Notwithstanding any provision of such Plan, no right of continued employment or
any modification of the "at will" nature of the Executive's employment with BCH
and/or the Bank shall be conferred upon the Executive thereunder or result
therefrom.
(e) FINANCIAL PLANNING. The Bank or BCH will reimburse the
Executive, upon presentation and approval of receipts, invoices or other
appropriate evidence of expense in accordance with the policies of the Bank or
BCH, for up to fifteen thousand dollars ($15,000) of the expense incurred by the
Executive for consultation in a year with financial planning and/or estate
planning professional(s) selected by the Executive and up to an additional five
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thousand dollars ($5,000) of such expense in each subsequent year thereafter
during the term of this Agreement for continuation of such consultation.
(f) COMPUTER, PRINTER AND BROADBAND INTERNET SERVICE. The Bank
or BCH will reimburse the Executive for the cost incurred by the Executive of a
computer, printer and broadband internet service maintained at the Executive's
primary residence upon presentation and approval of receipts, invoices or other
appropriate evidence of such expense in accordance with the policies of the Bank
or BCH.
(g) REIMBURSEMENT OF LEGAL EXPENSE. The Bank or BCH will
reimburse the Executive, upon presentation and approval of receipts, invoices or
other appropriate evidence of expense in accordance with the policies of the
Bank or BCH, for up to five thousand dollars ($5,000) of the expense incurred by
the Executive for consultation with an attorney in connection with the
negotiation and execution of this Agreement.
14. ANNUAL PHYSICAL EXAMINATION. The Bank or BCH shall pay or reimburse
the Executive for up to $500 of the cost, if any, in excess of applicable
insurance coverage specified in paragraph 13(c) of this Agreement for an annual
physical examination conducted by a California licensed physician selected by
the Executive, the results of which examination shall not be required to be
disclosed to BCH or the Bank. Any such reimbursement shall be made upon
presentation and approval of receipts, invoices or other appropriate evidence of
such expense in accordance with the policies of the Bank or BCH.
15. BUSINESS EXPENSES; MEMBERSHIPS. The Executive shall be reimbursed
for all ordinary and necessary expenses incurred by the Executive in connection
with his employment. The Executive shall also be reimbursed for reasonable
expenses incurred in activities associated with promoting the business of the
Bank and BCH, including expenses for entertainment, travel, conventions,
educational programs, and such expenses and dues for a fitness club membership,
membership in The Silicon Valley Capital Club and similar items. The Executive
may obtain a golf club membership at such time during the term of this Agreement
as the Board of Directors of BCH or the Bank may, in the exercise of its sole
discretion, deem appropriate. All such reimbursements shall be made upon
presentation and approval of receipts, invoices or other appropriate evidence of
such expense in accordance with the policies of the Bank or BCH.
16. TERMINATION OF AGREEMENT.
(a) AUTOMATIC TERMINATION. This Agreement shall terminate
automatically without further act of the parties and immediately upon the
occurrence of any one of the following events, subject to either party's right,
without any obligation whatsoever, to waive an event reasonably susceptible of
waiver, and the obligation of the Bank to pay the amounts which would otherwise
be payable to the Executive under this Agreement through the end of the month in
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which the event occurs, except that only in the event of termination based upon
subparagraphs (1), (4) or (10, to the extent of the Bank's or BCH's breach)
below shall the Executive be entitled to receive severance benefits based upon
automatic termination pursuant to paragraph 16 (d) of this Agreement:
(1) The occurrence of circumstances that make it
impossible or impractical for the Bank and
BCH to conduct or continue its business.
(2) The death of the Executive.
(3) The loss by the Executive of legal capacity.
(4) The loss by the Bank and BCH of legal
capacity to contract.
(5) The willful, intentional and material breach
or the habitual and continued neglect by the
Executive of his employment responsibilities
and duties.
(6) The continuous mental or physical incapacity
of the Executive, subject to disability
rights under this Agreement.
(7) The Executive's willful and intentional
violation of any state or federal banking or
securities laws, or of the bylaws, rules,
policies or resolutions of the Bank or BCH,
or the rules or regulations of the BGFRS,
Federal Deposit Insurance Corporation, OCC,
or other regulatory agency or governmental
authority having jurisdiction over the Bank
or BCH, which has a material adverse effect
upon the Bank or BCH.
(8) The written determination by a state or
federal regulatory agency or governmental
authority having jurisdiction over the Bank
or BCH that the Executive is not suitable to
act in the capacity for which he is employed
by the Bank or BCH.
(9) The Executive's conviction of (i) any felony
or (ii) a crime involving moral turpitude,
or the Executive's willful and intentional
commission of a fraudulent or dishonest act.
(10) A material breach of the terms or provisions
of this Agreement, which breach remains
uncured after thirty (30) days from the date
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notice of breach including the basis for the
good faith determination of breach is given
by the non-breaching party to another party.
(b) Termination by Bank or BCH. The Bank or BCH may, at its
election and in its sole discretion, terminate the Executive's employment and
this Agreement at any time and for any reason or for no reason, upon thirty (30)
days prior written notice to the Executive, without prejudice to any other
remedy to which the Bank or BCH may be entitled either at law, in equity or
under this Agreement. Unless otherwise agreed in writing between the Executive,
the Bank and BCH, the Executive shall immediately cease performing and
discharging the duties and responsibilities of his positions and remove himself
and his personal belongings from the Bank's and BCH's premises and the Executive
agrees to concurrently resign as a director of both the Bank and BCH. All rights
and obligations accruing to the Executive under this Agreement shall cease at
such termination, except that such termination shall not prejudice the
Executive's rights regarding employment benefits which shall have accrued prior
to such termination, including the right to receive the severance benefits
specified in paragraph 16 (d) below, and any other remedy which the Executive
may have at law, in equity or under this Agreement, which remedy accrued prior
to such termination.
(c) Termination by Executive. This Agreement may be terminated
by the Executive as follows:
(i) the Executive may terminate his employment and
this Agreement at any time and for any reason or no reason, upon thirty (30)
days prior written notice to the Bank or BCH. Unless otherwise agreed in writing
between the Executive, the Bank and BCH, the Executive shall immediately cease
performing and discharging the duties and responsibilities of his positions and
remove himself and his personal belongings from the Bank's and BCH's premises
and the Executive agrees to concurrently resign his positions as director of
both the Bank and BCH. All rights and obligations accruing to the Executive
under this Agreement shall cease at such termination, except that such
termination shall not prejudice the Executive's rights regarding employment
benefits which shall have accrued prior to such termination and any other remedy
which the Executive may have at law, in equity or under this Agreement, which
remedy accrued prior to such termination; or
(ii) the Executive may terminate his employment and
this Agreement at any time upon thirty (30) days prior written notice to the
Bank or BCH, based on the Executive's good faith determination of the existence
of "good reason" therefore, subject to the right of the Bank or BCH to cure the
matter alleged as the basis for the Executive's determination that "good reason"
exists as described herein. For purposes of this Agreement, "good reason" shall
mean that without the Executive's written consent there occurs (A) any material
adverse change in the nature and scope of the Executive's position, authorities,
responsibilities, duties, or a change of twenty (20) miles or more in the
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Executive's location of employment, or any material reduction in the Executive's
base salary, incentive compensation (including any material adverse change to
the terms of the Incentive Plan after the date of this Agreement) or other
benefits under this Agreement, or (B) any event which reasonably constitutes a
demotion, significant diminution or constructive termination (by resignation or
otherwise) of the Executive's employment. The Executive shall specify in any
such notice to the Bank or BCH the specific basis for his good faith
determination that "good reason" exists and the Bank or BCH shall have thirty
(30) days within which to cure any matter alleged by the Executive as the basis
for such "good reason" determination by the Executive. If, in the reasonable
good faith determination of the Executive, the matters alleged by the Executive
as "good reason" are cured within such thirty (30) day period, then the
Executive shall not be entitled to terminate his employment and this Agreement
based thereon. Unless otherwise agreed in writing between the Executive, the
Bank and BCH, upon termination, the Executive shall immediately cease performing
and discharging the duties and responsibilities of his positions and remove
himself and his personal belongings from the Bank's and BCH's premises and the
Executive agrees to concurrently resign his positions as director of both the
Bank and BCH.
(d) SEVERANCE BENEFITS - WITHOUT A CHANGE IN CONTROL. In the
event of automatic termination based upon paragraph 16 (a) (1), (4) or (10, to
the extent of the Bank's or BCH's breach), or termination by the Bank or BCH
pursuant to paragraph 16 (b), or termination at the election of the Executive
for "good reason" pursuant to paragraph 16 (c) (ii), then in each such case, the
Executive shall receive severance benefits consisting of (i) a cash payment in
an amount equal to one and one-half (1.5) times the Executive's (A) annual base
salary during the year the termination occurs and (B) average bonus or incentive
compensation amount paid to the Executive in the three (3) year period
immediately preceding the termination, less applicable withholding deductions
(in addition to base salary, incentive compensation, or other payments, if any,
due the Executive), payable in lump sum within thirty (30) days following such
termination; (ii) acceleration of vesting of any stock options granted to the
Executive pursuant to the BCH Plans; and (iii) continuation of group insurance
coverages specified in paragraph 13 (c) of this Agreement for the Executive and
his dependents pursuant to The Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA"), or under applicable California law pursuant to Assembly Xxxx No.
1401 ("Cal-COBRA"), with one hundred percent (100%) of premiums for the
insurance coverages payable by the Bank or BCH monthly to the Executive for a
period of eighteen(18) months from the date of termination. Notwithstanding the
foregoing or anything contained in this Agreement to the contrary, the
obligation of the Bank or BCH to pay the premium costs related to the COBRA or
Cal-COBRA continuation of insurance coverages shall terminate at the earlier of
the expiration of eighteen (18) months from the date of termination or the date
of commencement of comparable insurance coverages for the Executive by another
employer. After such expiration date, the Executive shall have such rights to
continue to participate under the Bank's or BCH's group health benefits plan at
the Executive's expense as may be available under COBRA or Cal COBRA. The
Executive agrees to notify the Bank or BCH as soon as practicable, but not less
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than ten (10) business days in advance of the commencement of such comparable
insurance coverages with another employer and to repay to the Bank or BCH any
amounts paid by the Bank or BCH to or for the benefit of the Executive that
overlap the coverages provided by the other employer. Notwithstanding the
foregoing or any other provision of this Agreement, if any part or all of the
severance benefits is subject to taxation under Section 409A of the Internal
Revenue Code of 1986, as amended, as determined by the Bank or BCH, with the
advice of its independent accounting firm or other tax advisors, then the
severance benefits shall be subject to modification as set forth in paragraph 17
of this Agreement.
Notwithstanding the foregoing, in the event of a "change in
control" as defined in paragraph 16 (e) below, the Executive shall not be
entitled to the severance benefits pursuant to this paragraph 16 (d) and any
rights of the Executive to severance benefits shall be limited to such rights as
are specified in paragraph 16 (e) below.
The Executive acknowledges and agrees that severance benefits
pursuant to this paragraph 16 (d) are in lieu of all damages, payments and
liabilities on account of the early termination of this Agreement and the sole
and exclusive remedy for the Executive for a termination specified in paragraph
16 (d).
(e) SEVERANCE BENEFITS - CHANGE IN CONTROL. In the event of a
"change in control" as defined herein and in connection with a change in control
or within thirty (30) months following consummation of a change in control (i)
the Executive's employment is terminated; or (ii) without the Executive's
written consent there occurs (A) any material adverse change in the nature and
scope of the Executive's position, authorities, responsibilities, duties, or a
change of twenty (20) miles or more in the Executive's location of employment,
or any material reduction in the Executive's base salary, incentive compensation
(including any material adverse change to the terms of the Incentive Plan after
the date of this Agreement) or other benefits under this Agreement, or (B) any
event which reasonably constitutes a demotion, significant diminution or
constructive termination (by resignation or otherwise) of the Executive's
employment, then the Executive shall be entitled to receive severance benefits.
An event constituting a "material adverse change in the nature and scope of
Executive's position, authorities, responsibilities, duties" or "a demotion,
significant diminution or constructive termination" shall be deemed to have
occurred if following a "change in control," the Executive is not the sole
President and Chief Executive Officer of both the successor entity to the Bank
and the successor entity to BCH, or any organization that owns a controlling
interest in either such successor entity.
The severance benefits payable pursuant to this paragraph 16
(e) shall consist of (i) a cash payment in an amount equal to two and one-half
times (2 1/2) the Executive's (A) annual base salary during the year the
termination or other event triggering a right to severance benefits hereunder
occurs and (B) average bonus or incentive compensation amount paid to the
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Executive in the three (3) year period immediately preceding the termination or
other event that triggers the right to receive the severance benefits hereunder,
less applicable withholding deductions (in addition to base salary, incentive
compensation, or other payments, if any, due the Executive), payable in lump sum
within thirty (30) days following such termination; and (ii) continuation of
group insurance coverages specified in paragraph 13 (c) of this Agreement for
the Executive and his dependents pursuant to The Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"), or under applicable California law
pursuant to Assembly Xxxx No. 1401 ("Cal-COBRA"), with one hundred percent
(100%) of premiums for the insurance coverages payable by the Bank or BCH
monthly to the Executive for a period of thirty (30) months from the date of
termination. Notwithstanding the foregoing or anything contained in this
Agreement to the contrary, the obligation of the Bank or BCH to pay the premium
costs related to the COBRA or Cal-COBRA continuation of insurance coverages
shall terminate at the earlier of the expiration of thirty (30) months from the
date of termination or the date of commencement of comparable insurance
coverages for the Executive by another employer. After such expiration date, the
Executive shall have such rights to continue to participate under the Bank's or
BCH's group health benefits plan at the Executive's expense as may be available
under COBRA or Cal COBRA. The Executive agrees to notify the Bank or BCH as soon
as practicable, but not less than ten (10) business days in advance of the
commencement of such comparable insurance coverages with another employer and to
repay to the Bank or BCH any amounts paid by the Bank or BCH to or for the
benefit of the Executive that overlap the coverages provided by the other
employer. Notwithstanding the foregoing or any other provision of this
Agreement, if any part or all of the severance benefits is subject to taxation
under Section 409A of the Internal Revenue Code of 1986, as amended, as
determined by the Bank or BCH, with the advice of its independent accounting
firm or other tax advisors, then the severance payment shall be subject to
modification as set forth hereafter in paragraph 17 of this Agreement.
The Executive acknowledges and agrees that severance benefits
pursuant to this paragraph 16 (e) are in lieu of all damages, payments and
liabilities on account of the events described above for which such severance
benefits may be due the Executive under paragraph 16 (e) of this Agreement. This
paragraph 16 (e) shall be binding upon and inure to the benefit of the Bank and
BCH and their respective successors and assigns, and the Executive and the
Executive's heirs, beneficiaries, successors, permitted assigns or transferees,
executors, administrators, trustees, and any other legal or personal
representatives.
Notwithstanding the foregoing, the Executive shall not be
entitled to receive severance benefits pursuant to this paragraph 16 (e) in the
event of an occurrence described in paragraph 16 (a), subparagraphs (5), (7),
(8), (9), or (10, to the extent of an Executive breach), or in the event the
Executive terminates employment in accordance with paragraph 16 (c) (i) and the
termination is not a result of or based upon the occurrence of any event
described in paragraph 16 (e) (ii) above.
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A "change in control" for purposes of this Agreement and
paragraph 16 (e), subject to the limitation of Section 409A of the Internal
Revenue Code of 1986, as amended, set forth in paragraph 17 of this Agreement,
shall mean the occurrence of any of the following events with respect to the
Bank or BCH: (i) a change in control of a nature that would be required to be
reported in response to Item 6 (e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
in response to any other form or report to the regulatory agencies or
governmental authorities having jurisdiction over the Bank or BCH or any stock
exchange on which BCH's shares are listed which requires the reporting of a
change in control; (ii) any merger, consolidation or reorganization of the Bank
or BCH in which the Bank or BCH does not survive; (iii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition (in one transaction or
a series of transactions) of any assets of the Bank or BCH having an aggregate
fair market value of fifty percent (50%) of the total value of the assets of the
Bank or BCH, reflected in the most recent consolidated audited or interim
unaudited balance sheet of BCH; (iv) a transaction whereby any "person" (as such
term is used in the Exchange Act) or any individual, corporation, partnership,
trust or any other entity is or becomes the beneficial owner, directly or
indirectly, of securities of BCH or Bank representing twenty-five percent (25%)
or more of the combined voting power of BCH's or Bank's then outstanding
securities; (v) a situation where, in any one-year period, individuals who at
the beginning of such period constitute the Board of Directors of the Bank or
BCH cease for any reason to constitute at least a majority thereof; or (vi) the
shareholder(s) of the Bank or BCH approve the sale or transfer of substantially
all of the Bank's or BCH's assets to parties that are not within a "controlled
group of corporations" (as that term is defined in Section 1563 of the Internal
Revenue Code of 1986, as amended) in which the Bank, or as applicable BCH, is a
member.
Notwithstanding the foregoing or anything else contained
herein to the contrary, (i) if the individuals who constitute the directors of
the Bank and BCH at the time a definitive agreement for a proposed transaction
described above (excepting therefrom the situation described in subparagraph (v)
above) is executed will, according to the terms of the definitive agreement,
constitute a majority of the members of the board of directors of the resulting
entity(ies) or acquiring person(s) that control(s) or is(are) the successor(s)
to the Bank and BCH immediately after the transaction, then before a transaction
or event that would otherwise constitute a change in control shall be deemed to
have occurred, such directors of the Bank and BCH may determine by majority vote
that the specific transaction or event does not constitute a change in control;
and (ii) there shall not be a change in control hereunder in the event that (A)
an Employee Stock Ownership Plan is sponsored by BCH which is the party that
acquires "control" or is the principal participant in the transaction
constituting a "change in control," as described above, or (B) a reorganization
is initiated by the Board of Directors of the Bank or BCH in which the Bank is
merged with and into another wholly-owned bank subsidiary of BCH to consolidate
operations under the charter of such other bank subsidiary.
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17. SECTION 409A LIMITATION. It is the intention of the Bank, BCH and
the Executive that the severance benefits payable to the Executive under this
Agreement either be exempt from, or otherwise comply with, Section 409A
("Section 409A") of the Internal Revenue Code of 1986, as amended.
Notwithstanding any other term or provision of this Agreement, to the extent
that any provision of this Agreement is determined by the Bank or BCH, with the
advice of its independent accounting firm or other tax advisors, to be subject
to and not in compliance with Section 409A, including, without limitation, the
definition of "change in control" or the timing of commencement and completion
of severance benefit and/or other benefit payments to the Executive hereunder,
or the amount of any such payments, such provisions shall be interpreted in the
manner required to comply with Section 409A. BCH, the Bank and the Executive
acknowledge and agree that such interpretation could, among other matters, (i)
limit the circumstances or events that constitute a "change in control;" (ii)
delay for a period of six (6) months or more, or otherwise modify the
commencement of severance and/or other benefit payments; and/or (iii) modify the
completion date of severance and/or other benefit payments.
The Bank and the Executive further acknowledge and agree that
if, in the judgment of the Bank or BCH, with the advice of its independent
accounting firm or other tax advisors, amendment of this Agreement is necessary
to comply with Section 409A, the Bank and the Executive will negotiate
reasonably and in good faith to amend the terms of this Agreement to the extent
necessary so that it complies (with the most limited possible economic effect on
the Bank, BCH and the Executive) with Section 409A. For example, if this
Agreement is subject to Section 409A and it requires that severance and/or other
benefit payments must be delayed until at least six (6) months after the
Executive terminates employment, then the Bank and the Executive would delay
payments and/or promptly seek a written amendment to this Agreement that would,
if permissible under Section 409A, eliminate any such payments otherwise payable
during the first six (6) months following the Executive's termination of
employment and substitute therefore a lump sum payment or an initial installment
payment, as applicable, at the beginning of the seventh (7th) month following
the Executive's termination of employment which in the case of an initial
installment payment would be equal in the aggregate to the amount of all such
payments thus eliminated.
18. GROSS-UP OF SECTION 280G AND 409A TAX. If all or any portion of the
amounts payable to the Executive under this Agreement, either alone or together
with other payments which the Executive has the right to receive from the Bank
or BCH, constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), that are
subject to the excise tax imposed by Section 4999 of the Code (or similar tax
and/or assessment), or any tax is imposed on the Executive under Section 409A,
the Bank or BCH (and its successor) shall increase the amounts payable under
this Agreement to the extent necessary to afford the Executive substantially the
same economic benefit under this Agreement as the Executive would have received
had no such excise tax under Section 280G or tax under Section 409A been imposed
on the payments due the Executive under this Agreement. The determination of the
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amount of any such taxes shall be made by the independent accounting firm
employed by the Bank or BCH, immediately prior to the change in control, or such
other independent accounting firm or advisor as may be mutually agreeable to the
Bank or BCH (and their respective successor), and the Executive in the exercise
of their reasonable good faith judgment. If, at a later date, it is determined
(pursuant to final regulations or published rulings of the Internal Revenue
Service, final judgment of a court of competent jurisdiction, or otherwise) that
the amount of any such taxes payable to the Executive is greater than the amount
initially so determined, then the Bank or BCH (or its successor) shall pay to
the Executive an amount equal to the sum of such additional taxes and any
interest, fines and penalties resulting from such underpayment, plus an amount
necessary to reimburse the Executive substantially for any income, excise or
other taxes payable by the Executive with respect to such amounts.
19. NOTICES. Any notices to be given hereunder shall be in writing and
may be transmitted by personal delivery or by U.S. mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to the Executive at the address listed in the Executive's personnel
file and to the Bank or BCH at its principal business office located at 00
Xxxxxxx Xxxx., Xxx Xxxx, Xxxxxxxxxx. A party may change the address for receipt
of notices by written notice in accordance with this paragraph 19. Notices
delivered personally shall be deemed communicated as of the date of actual
receipt; mailed notices shall be deemed communicated as of three (3) days after
the date of mailing.
20. ARBITRATION. All claims, disputes and other matters in question
arising out of or relating to this Agreement or the breach or interpretation
thereof, other than those matters which are to be determined by the Bank or BCH,
in its sole and absolute discretion, shall be resolved by binding arbitration
before a representative member, selected by the mutual agreement of the parties,
of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"), in accordance
with the rules and procedures of JAMS then in effect. In the event JAMS is
unable or unwilling to conduct such arbitration, or has discontinued its
business, the parties agree that a representative member, selected by the mutual
agreement of the parties, of the American Arbitration Association ("AAA"), shall
conduct such binding arbitration in accordance with the rules and procedures of
the AAA then in effect. Notice of the demand for arbitration shall be filed in
writing with the other party to this Agreement and with JAMS (or AAA, if
necessary). In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable statute of
limitations. Any award rendered by JAMS or AAA shall be final and binding upon
the parties, and as applicable, their respective heirs, beneficiaries, legal
representatives, agents, successors and assigns, and may be entered in any court
having jurisdiction thereof. The obligation of the parties to arbitrate pursuant
to this clause shall be specifically enforceable in accordance with, and shall
be conducted consistently with, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in San Jose, California, unless otherwise agreed to by the parties.
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21. ATTORNEYS' FEES AND COSTS. In the event of litigation, arbitration
or any other action or proceeding between the parties to interpret or enforce
this Agreement or any part thereof or otherwise arising out of or relating to
this Agreement, the prevailing party shall be entitled to recover its costs
related to any such action or proceeding and its reasonable fees of attorneys,
accountants and expert witnesses incurred by such party in connection with any
such action or proceeding. The prevailing party shall be deemed to be the party
which obtains substantially the relief sought by final resolution, compromise or
settlement, or as may otherwise be determined by order of a court of competent
jurisdiction in the event of litigation, an award or decision of one or more
arbitrators in the event of arbitration, or a decision of a comparable official
in the event of any other action or proceeding. Every obligation to indemnify
under this Agreement includes the obligation to pay reasonable fees of
attorneys, accountants and expert witnesses incurred by the indemnified party in
connection with matters subject to indemnification.
22. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
employment of the Executive by the Bank and BCH and contains all of the
covenants and agreements between the parties with respect to the employment of
the Executive by the Bank and BCH; provided, that, this Agreement does not
supersede or replace the rights and benefits under (i) the Indemnification
Agreement dated March 20, 2003, specified in paragraph 5 of this Agreement, (ii)
the Supplemental Executive Retirement Plan dated August 1, 2004, specified in
paragraph 13(d) of this Agreement or (iii) any stock option agreement between
BCH and the Executive as specified in paragraph 12 of this Agreement. Each party
to this Agreement acknowledges that no other 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 set forth herein, and that
no other agreement, statement, or promise not contained in this Agreement shall
be valid or binding on either party.
23. MODIFICATIONS. Any modification of this Agreement will be effective
only if it is in writing and signed by a party or its authorized representative.
24. WAIVER. The failure of a party to insist on strict compliance with
any of the terms, provisions, covenants, or conditions of this Agreement by
another party shall not be deemed a waiver of any term, provision, covenant, or
condition, individually or in the aggregate, unless such waiver is in writing,
nor shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
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25. PARTIAL INVALIDITY. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.
26. INTERPRETATION. This Agreement shall be construed without regard to
the party responsible for the preparation of the Agreement and shall be deemed
to have been prepared jointly by the parties. Any ambiguity or uncertainty
existing in this Agreement shall not be interpreted against either party, but
according to the application of other rules of contract interpretation, if an
ambiguity or uncertainty exists.
27. GOVERNING LAW AND VENUE. The laws of the State of California, other
than those laws denominated choice of law rules, shall govern the validity,
construction and effect of this Agreement. Any action which in any way involves
the rights, duties and obligations of the parties hereunder and is not resolved
by binding arbitration shall be brought in the courts of the State of California
and venue for any action or proceeding shall be in Santa Xxxxx County or in the
United States District Court for the Northern District of California, and the
parties hereby submit to the personal jurisdiction of said courts.
28. PAYMENTS DUE DECEASED EXECUTIVE. If the Executive dies prior to the
expiration of the term of his employment, any payments that may be due the
Executive from the Bank or BCH under this Agreement as of the date of death
shall be paid to the Executive's heirs, beneficiaries, successors, permitted
assigns or transferees, executors, administrators, trustees, or any other legal
or personal representatives.
29. ASSIGNMENT/BINDING EFFECT. Except as specifically set forth in this
Agreement, the Executive may not assign, delegate or otherwise transfer any of
the Executive's rights, benefits, duties or obligations under this Agreement
without the prior written consent of the Bank and BCH. This Agreement shall
inure to the benefit of and be binding upon the Bank and BCH and their
respective successors and assigns, and the Executive and the Executive's heirs,
beneficiaries, successors, permitted assigns or transferees, executors,
administrators, trustees, and any other legal or personal representatives.
30. EFFECT OF TERMINATION ON CERTAIN PROVISIONS. Upon the termination
of this Agreement, the obligations of the Bank, BCH and the Executive hereunder
shall cease except to the extent of the Bank's or BCH's obligation to make
payments, if any, to or for the benefit of the Executive following termination,
and provided that paragraphs 4, 5, 6, 7, 20, 21, 22, 24, 25, 26, 27, 28, 29 and
30 shall remain in full force and effect.
31. ADVICE OF COUNSEL AND ADVISORS. The Executive acknowledges and
agrees that he has read and understands the terms and provisions of this
Agreement and prior to signing this Agreement, he has had the advice of counsel
and/or such other advisors as he deemed appropriate in connection with his
review and analysis of such terms and provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written in the City of San Xxxx, County of Santa Xxxxx, State of
California.
BRIDGE BANK, NATIONAL ASSOCIATION EXECUTIVE
By: ______________________________ __________________________
Xxxxx X. Xxxxxx, M.D. (date) Xxxxxx X. Xxxxx (date)
Chairman of the Board
BRIDGE CAPITAL HOLDINGS
By: ______________________________
Xxxxx X. Xxxxxx, M.D. (date)
Chairman of the Board
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