COMPENSATION MODIFICATION AGREEMENT
THIS AGREEMENT (“Agreement”), made
this ____ day of January, 2009, by and between Pacific Coast
National Bancorp, Pacific Coast National Bank, its wholly owned
subsidiary (together, the “Corporation”), and
_______________________, a senior executive officer of the
Corporation (“Executive”).
WHEREAS, the Corporation has determined that
it is in the best interests of the Corporation and its shareholders
to participate in the Troubled Asset Relief Program Capital
Purchase Program (“CPP”) of the United States
Department of the Treasury (“UST”), pursuant to which
the Corporation will issue to UST preferred stock (the
“Preferred Stock”) in return for cash, along with a
warrant to acquire additional shares of preferred stock (the
“Warrant”); and
WHEREAS, in order for the Corporation to
participate in the CPP, the Corporation and its senior executive
officers who are subject to the Compensation Guidelines (as defined
below) must comply with Section 111(b) of the Emergency Economic
Stabilization Act of 2008 regarding executive compensation and
corporate governance and the related UST interim final regulations
(31 CFR Part 30) published in the Federal Register on October 20,
2008 (the “Compensation Guidelines”); and
WHEREAS, the Corporation is required to
deliver a certificate to UST at the closing of the CPP transaction
that it has complied with all the Compensation Guidelines; and
WHEREAS, the board of directors of the
Corporation has authorized and directed the Compensation Committee
to take any and all the actions required under the Compensation
Guidelines in order to enable the Corporation to deliver that
certificate and has authorized the execution of this Agreement on
behalf of the Corporation; and
WHEREAS, in order to comply with the
Compensation Guidelines for so long as UST holds securities of the
Corporation acquired in the CPP, the Corporation, through the
Compensation Committee, is required to review the
Corporation’s compensation plans and policies with senior
risk officers in order to identify and unilaterally eliminate any
bonus plans or other incentive compensation arrangements for senior
executive officers who are subject to the Compensation Guidelines
that encourage such officers to take unnecessary and excessive
risks that threaten the value of the financial institution; and
WHEREAS, in order to comply with the
Compensation Guidelines for so long as UST holds securities of the
Corporation acquired in the CPP, the Corporation, through the
Compensation Committee, must adopt appropriate provisions for the
recovery by the Corporation of any bonus or incentive compensation
paid to a senior executive officer who is subject to the
Compensation Guidelines based on financial statements or
performance metric criteria later determined to be materially
inaccurate; and
WHEREAS, in order to comply with the
Compensation Guidelines as long for so UST holds securities of the
Corporation acquired in the CPP, the Corporation is prohibited from
making any golden parachute payment (as defined under the
Compensation Guidelines) to any senior executive officer who is
subject to the Compensation Guidelines; and
WHEREAS, the Corporation is required to
deliver to UST in connection with the consummation of the CPP
transaction a waiver from each of its senior executive officers who
are subject to the Compensation Guidelines with respect to the
changes in the Corporation’s compensation plans, polices and
practices as required by the Compensation Guidelines; and
WHEREAS, the Compensation Committee has asked
Executive to execute the waiver in the form attached; and
WHEREAS, Executive believes the requirements
imposed under the Compensation Guidelines in order for the
Corporation to obtain government funds by participating in the CPP
are reasonable and in the best interests of the Corporation and its
shareholders and furthers the long-term best interests of the
Corporation and its senior executive officers, including
Executive.
NOW, THEREFORE, to allow the Corporation to
participate in the CPP for the mutual benefit of the Corporation,
its shareholders and Executive, and for other good and valuable
consideration, the Corporation and Executive hereby agree as
follows:
1.
GENERAL MODIFICATION OF EMPLOYMENT, COMPENSATION AND BENEFIT
AGREEMENTS, PLANS AND POLICIES : Until such time as
UST ceases to own any debt or equity securities of the Corporation
acquired pursuant to the CPP, the Corporation and Executive agree
that, notwithstanding any contract, plan, policy or agreement to
the contrary, all employment, compensation and benefit agreements,
plans and policies with respect t
