EXHIBIT 10.1
Employment and Confidentiality
Agreement
This Employment and Confidentiality Agreement
(the “Agreement”) is made between First Bank of Beverly
Hills (the “Bank”), a state chartered bank, and Joseph
W. Kiley, III (the “Employee”). The Bank is an
affiliate of Beverly Hills Bancorp, Inc. a Delaware corporation
(the “Company”).
Accordingly, on the basis of the
representations, warranties, and covenants contained in this
Agreement, the parties agree as follows effective as of
January 1, 2006 (the “Effective Date”):
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1.
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ARTICLE 1
– EMPLOYMENT AND TERM
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1.1.
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The Bank
earlier notified Employee that it was not renewing Employee’s
employment under the terms of the Employment, Confidentiality and
Contingent Severance Agreement dated January 1, 2003 (the
“Severance Agreement”). Accordingly, Employee’s
employment pursuant to that Severance Agreement will expire
December 31, 2005. Notwithstanding the fact that the Bank and
Employee are entering into a new employment relationship pursuant
to this Agreement, the pay and benefits Employee is to receive
under the terms of the Severance Agreement pursuant to
Section 4.2(b) and (c) thereof shall not be impacted or
otherwise affected by Employee’s entering into this Agreement
with the Bank and Employee shall begin to receive the pay and
benefits outlined in the Severance Agreement as a result of the
Bank’s non-renewal of the Severance Agreement commencing on
January 1, 2006. Likewise, Employee’s entitlement to
receive the 2004 continuous service bonus payments pursuant to the
Amended 2004 Annual Incentive Award Plan is not altered by this
Agreement and thus payable on January 1, 2006.
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1.2.
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Term .
The term of employment under this Agreement shall commence on the
Effective Date, and shall continue for a period of twelve
(12) months thereafter. Either the Bank or Employee may
terminate the employment relationship under this Agreement at any
time, with or without reason, upon thirty (30) days notice to
the other. If the Bank provides thirty (30) days notice to
terminate the employment relationship, then it will have no further
obligation to pay Employee his salary through the remainder of the
term of this Agreement. The Bank may, at its option, offer to
continue the employment relationship under this Agreement for an
additional 6 month term, upon written notice to
Employee.
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2.
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ARTICLE 2
– DUTIES OF THE EMPLOYEE
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2.1.
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Position and Duties
. The Bank will employ the Employee
as its President and Chief Executive Officer, and Employee accepts
such employment, on the terms and conditions set forth in this
Agreement. Employee will undertake and
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perform all duties as required of
the position. Employee will render such services and perform such
duties and acts in connection with any aspect of the Bank’s
business as may be lawfully required by the management or the Board
of Directors of the Bank. Employee shall perform the services
contemplated herein faithfully, diligently, to the best of
Employee’s ability, and in the best interests of the Bank.
Employee will also devote his full and exclusive business time and
efforts in rendering such services and to the extent of his
authority will endeavor to ensure that the Bank is in compliance
with all laws, rules, regulations and policies applicable to the
Bank. The Employee shall, at all times, adhere to and obey any and
all written internal rules and regulations governing the conduct of
the Bank’s employees as established and modified from time to
time.
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2.2.
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Exclusive
Services. During his
employment by the Bank, the Employee shall not, without the express
prior written consent of the Board of Directors of the Bank, engage
directly or indirectly in any outside employment or consulting of
any kind, whether or not the Employee receives remuneration for
such services. Further, the Employee shall not engage in any
activity that would impair the Employee’s ability to act and
exercise judgment in the best interest of the Bank.
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2.3.
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Subpoenas;
Cooperation in Defense of the Bank. If the Employee, during employment or
thereafter, is served with any subpoena or other compulsory
judicial or administrative process calling for production of
confidential information or if the Employee is otherwise required
by law or regulations to disclose confidential information, the
Employee will immediately, before making any such production or
disclosure, notify the Bank and provide it with such information as
may be necessary for the Bank to take such action as the Bank deems
necessary to protect its interests. The Employee agrees to
cooperate reasonably with the Bank, whether during employment or
thereafter, in the prosecution or defense of all threatened claims
or actual litigation in which the Bank is or may become a party,
whether now pending or hereafter brought, in which the Employee has
knowledge of relevant facts or issues. The Employee shall be
reimbursed for reasonable expenses for travel time due to
cooperating with the prosecution or defense of any litigation for
the Bank.
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2.4.
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Other
Obligations. The Employee
acknowledges that the Bank from time to time may have agreements
with other persons or with various governmental agencies that
impose obligations or restrictions on the Bank regarding inventions
or creative works made during the course of the Bank’s work
under such agreements, or that relate to the confidential nature of
such work. The Employee agrees to be bound by all such obligations
and restrictions of which the Employee is informed by the Bank and
to take all action necessary to discharge the obligations of the
Bank thereunder.
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3.
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ARTICLE 3
– COMPENSATION
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3.1.
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Base
Salary . Employee will
receive a base salary of $275,000.00 per year, less applicable
withholdings. This salary shall be payable semi-monthly in
accordance with the Bank’s regular payroll
practices.
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3.2.
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Bank
Employee Benefits .
Employee will be entitled to participate in the Bank’s
employee benefit plans, including the Amended 2004 Annual Incentive
Award Plan or its successor, 401(k) savings plan, medical, dental,
vision, long-term disability, and short term disability benefits or
insurance programs on the same basis as any of those benefits or
insurance programs are available generally to other officers of
similar position under the Bank’s then current personnel
policies. The Bank and the Company will not, without
Employee’s written consent, make any changes in
Employee’s rights or benefits thereunder, except to the
extent such changes are made applicable to all executive-level Bank
and Company employees on a non-discriminatory basis. The
Bank’s obligations to continue coverage of these benefits
under Section 4.2(c) of the above-referenced Severance
Agreement will be suspended during the period of time Employee
continues his employment pursuant to this Agreement. Upon the
termination of Employee’s employment pursuant to this
Agreement, the Bank’s obligations under Section 4.2(c)
of the Severance Agreement will commence and continue under the
provisions stated therein.
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3.3.
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Vacation . Employee will be eligible to earn vacation
time at a rate of 13.33 hours per month up to a total of 160 hours
in the calendar year. Vacation time not used in any calendar year
may be carried forward, provided, however, that, once the Employee
has accrued 200 hours, Employee shall not be eligible to accrue
additional vacation time until he has taken one or more days of
vacation.
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3.4.
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Reimbursement for Expenses
. To the extent Employee incurs
necessary and reasonable business expenses in the course of his
employment, the Bank will reimburse Employee for such expenses,
subject to the Bank’s then current policies regarding
reimbursement of such business expenses.
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3.5.
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Indemnity
and Insurance . Employee
shall receive all benefits and privileges to which the Employee is
entitled by law or pursuant to the Bylaws of the Bank or the
Company.
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3.6.
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2005 Bonus
Payment . Employee will
be eligible to receive a 2005 bonus in the amount of $175,000.00
pursuant to the Amended 2004 Annual Incentive Award Plan approved
by the Board on February 4, 2005. Said bonus payment will be
made to Employee on or before March 15, 2006.
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3.7.
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Continuous Service Bonus
Eligibility . Employee
will be eligible to receive a continuous service bonus in the
amount of $75,000.00 if Employee remains employed through
June 30, 2006. If the Bank terminates Employee’s
employment pursuant to this Agreement at any time prior to
June 30, 2006, Employee will remain eligible to receive this
continuous service bonus payment. Should Employee terminate his
employment relationship with the Bank prior to
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June 30, 2006, Employee will
forfeit his eligibility for the continuous service bonus payment.
If Employee is terminated for “cause” as defined in
Section 4.1 of this Agreement prior to June 30, 2006,
then Employee is not entitled to and forfeits his eligibility for
the continuous service bonus set forth in this Section 3.7. If
Employee remains employed with the Bank after June 30, 2006,
then, at the Bank’s Board of Directors’ sole
discretion, Employee may be provided a Bonus Opportunity in
addition to the bonus mentioned in this Section 3.7 as
provided in Section 3.2.
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4.
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ARTICLE 4
– TERMINATION FOR CAUSE
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4.1
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Termination
for Cause . Termination
for cause shall mean termination because of Employee’s
incompetence, personal dishonesty, willful misconduct, any breach
of fiduciary duty involving personal profit, habitual neglect of
duties, intentional failure to perform stated duties, willful
violation of any material law, rule or regulation, order or
material breach of any employment policy of the Bank or any
material breach of any provision of this Agreement. Written notice
delivered to Employee is a prerequisite to Termination for Cause
and such termination shall be effective on the delivery date of the
written notice. Employee shall have the right to receive
compensation or other benefits which have already vested or been
earned as of the date of notice of Termination for Cause, unless
expressly prohibited by the terms of any plan, program or agreement
governing such compensation or benefits. Employee shall receive no
other compensation or severance pay in the event of Termination for
Cause.
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5.
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ARTICLE 5
– CONFIDENTIALITY AND NON-SOLICITATION
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5.1.
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Non-disclosure of Confidential
and Trade Secret Information . Employee acknowledges that, in the course of
employment with the Bank, Employee will have access to and learn
confidential information. Confidential information includes but is
not limited to information about the Bank’s borrowers and
clients, the terms and conditions under which the Bank or its
affiliates deal with borrowers and clients, pricing information for
the purchase or sale of assets, financing and securitization
arrangements, research materials, manuals, computer programs,
formulas analyzing assets portfolios, techniques, data, marketing
plans and tactics, technical information, lists of asset sources,
the processes and practices of the Bank and related companies,
information contained in electronic or computer files, financial
information, salary and wage information, and other information
that is designated by the Bank or its affiliates as confidential or
that Employee knows or should know is confidential information
provided by third parties that the Bank or its affiliates are
obligated to keep confidential and all other proprietary
information of the Bank or its affiliates. Employee acknowledges
that all confidential information is and shall continue to be the
exclusive property of the Bank or its affiliates, whether or not
prepared in whole or in par
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