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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT is dated as of March 7, 2008, between
Belvedere SoCal ("SoCal"), Professional Business Bank, Spectrum
Bank (each a " Bank ," together, the "
Banks ,"
and the Banks together with SoCal, the " Company ") and Norman
0. Broyer (" Executive ") for the
purposes set forth in this agreement (the " Agreement
").
WHEREAS,
SoCal 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 ("
FRB
");
WHEREAS,
SoCal is the parent holding company of the Banks, which are
California chartered banking corporations and wholly-owned
subsidiaries of SoCal, subject to the supervision and
regulation of the California Department of Financial
Institutions ("DFI") and
Federal Deposit Insurance Corporation (" FDIC
");
WHEREAS,
it is the intention of the parties to enter into an employment
agreement for the purposes of securing Executive's services as
the President and Chief Risk Officer of the Banks, and as the
Chief Credit Officer of Professional Business
Bank.
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements contained herein, SoCal, the Banks and Executive
agree as follows:
1. TERM. Subject to the
provisions for earlier termination hereinafter provided,
Executive's employment hereunder shall be for a term (the "
Term ")
commencing upon the date of this Agreement (the " Effective Date ") and
ending on the third anniversary of the Effective Date.
2. POSITION, DUTIES AND
RESPONSIBILITIES. During the Term, the Banks will employ
Executive, and Executive agrees to be employed by the Banks, as
each Bank's President and Chief Risk Officer, and will also serve
as the Chief Credit Officer of Professional Business Bank. In such
capacity, Executive will have such duties and responsibilities as
are normally associated with this position and will report to the
Banks' Chief Executive Officer (currently, William Baribault), or
such individual's designee. During the Term, Executive shall devote
his entire business time, attention and energies to the business
and affairs of the Banks, to the performance of Executive's duties
under this Agreement and to the promotion of the Banks' interests.
Notwithstanding the foregoing, subject to Section 11 below, nothing
in this Agreement shall be construed to limit Executive's ability
to provide services to or participate in non-profit, charitable or
civic organizations or to manage personal investments, including
personal investment vehicles, to the extent that such activities do
not materially interfere with Executive's performance of his duties
hereunder. During the Term, Executive shall perform the services
required by this Agreement at Professional Business Bank's
principal place of business, currently located at 199 South Los
Robles Avenue, Suite 110, Pasadena, CA 91101. Notwithstanding the
foregoing, the Company may from time to time require Executive to
travel temporarily to other locations on the Company's business. At
the Company's reasonable request, Executive will serve the Company
and/or its subsidiaries and affiliates in other capacities
in addition to the foregoing. In the event that Executive serves in
any one or more of such additional capacities, Executive's
compensation will not be increased beyond that specified in this
Agreement. In addition, in the event Executive's service in one or
more of such additional capacities is terminated, Executive's
compensation, as specified in this Agreement, will not be
diminished or reduced in any manner as a result of such termination
for so long as Executive otherwise remains employed under the terms
of this Agreement.
3. BASE COMPENSATION.
During the Term, the Bank will pay Executive a base salary of
$250,000 per year, less payroll deductions and all required
withholdings, payable in accordance with the Company's normal
payroll practices and prorated for any partial pay period of
employment. Executive's base salary shall be subject to (i) annual
review and, (ii) in the sole discretion of the Board of Directors
of the Company (the "Board"), increase
pursuant to the Bank's policies as in effect from time to time (the
"Base
Compensation").
4. ANNUAL. BONUS. In
addition to the Base Compensation set forth above, during the Term,
Executive will be eligible to participate in the Company's
incentive bonus plan applicable to senior executives of the
Company. The amount of Executive's annual bonus will be based on
the attainment of performance criteria established and evaluated by
the Company in accordance with the terms of such bonus plan as in
effect from time to time, provided that, subject to the terms of
such bonus plan, Executive's target annual bonus shall be forty
percent (40%) of Base Compensation per year, pro-rated for any
partial year of service in which an annual bonus is earned. Each
annual bonus shall be paid in cash or, at the election of Executive
made at least thirty (30) days prior to the payment date (or such
other date as may be determined by the Board), in whole or in part
in a number of fully vested shares of SoCal common stock equal to
the dollar amount of the bonus payable divided by the Fair Market
Value (as defined in the SoCal 2007 Equity Incentive Plan (the
"Plan")) of
a share of SoCal common stock on the date preceding the date on
which the bonus is paid. In the event that Executive elects to
receive an annual bonus in shares, SoCal shall issue such shares to
Executive under the Plan and such shares shall be subject to the
terms and conditions of the Plan (including, without limitation,
the limits set forth in Section 3 and Section 6(c) of the Plan) and
an award agreement in a form prescribed by the
Company.
5. STOCK
OPTION.
(a)
Initial
Option. On
February 29, 2008, ( the "Initial Grant
Date"), the
Company granted to Executive a nonqualified stock option to
purchase a number of shares of SoCal common stock equal to
.90% of the total number of shares of SoCal common stock
outstanding as of the Initial Grant Date (the "Initial
Option").
(b)
Subsequent Acquisition Make-Whole
Option. In addition, provided that Executive is
then employed by the Company, in the event that, no later than
eighteen months after the Effective Date, (i) the Company
consummates an acquisition transaction in which the holders of
SoCal common stock immediately prior to such transaction
continue, immediately after such transaction, to control more
than 50% of the total outstanding shares of SoCal common stock
(or equity securities of the surviving entity if the Company
is not the surviving entity (any such equity securities,
"New
Equity")), and
(ii) the total number of shares of SoCal common stock (or New
Equity) outstanding
immediately after the consummation of such acquisition
transaction exceeds the total number of shares of SoCal common
stock outstanding immediately prior to the consummation of
such transaction, as determined in the sole and absolute
discretion of the Company (any such excess, the "Transaction Share
Increase"), then the Company (or the surviving entity)
shall, on the thirtieth calendar day (or, if not a trading
day, the next succeeding trading day) following the
consummation of such acquisition, grant to Executive a
nonqualified option to purchase a number of shares of SoCal
common stock (or New Equity) equal to 0.90% of the Transaction
Share Increase (the "Subsequent
Acquisition
Make-Whole Option" and, together with the Initial
Option and the Spectrum Make-Whole Option, the "Options").
(c)
Option
Terms. Each
Option shall be granted at an exercise price per share equal
to the Fair Market Value of a share of SoCal common stock on
the applicable date of grant. The terms and conditions of the
Options, including without limitation any applicable vesting
and forfeiture conditions, shall be set forth in Stock Option
Agreements substantially in the form attached hereto as
Exhibit
A, to be entered into by the Company and Executive (the
"Option
Agreement"). The Options shall, subject to the
provisions of this Section 5, be governed in all respects by
the terms of the Plan and the applicable Option
Agreement.
6. BENEFITS AND VACATION.
During the Term, (i) Executive and his dependents shall be eligible
as of the Effective Date to participate in the Bank's medical and
dental insurance programs at the Bank's expense, (ii) Executive
shall be eligible to participate in all incentive, savings and
retirement plans, practices, policies and programs maintained or
sponsored by the Bank from time to time which are applicable to
other senior executives of the Bank, including without limitation,
a 401(k) plan, subject to the terms and conditions thereof, and
(iii) Executive shall be eligible for standard benefits, such as
paid time off and holidays, to the extent applicable generally to
other senior executives of the Bank, provided that, during the
Term, Executive shall be entitled to no less than twenty (20)
vacation days per year (i.e., four weeks of
vacation), prorated for any partial year of service, in all
cases, subject to the terms and conditions of the applicable Bank
plans or policies. In addition, without limiting the generality of
the foregoing, the Bank shall make available to Executive any
long-term disability insurance policy which it may provide for
other senior executives of the Bank on the same terms and
conditions as are made available to such other senior
executives.
7. EXPENSES. During the
Term, Executive shall be entitled to receive prompt reimbursement
of all reasonable business expenses incurred by Executive in
accordance with the Bank's expense reimbursement policy applicable
to its senior executives, as in effect from time to time, including
expenses of up to $600 per month, pro-rated for any partial month
of service, associated with the purchase or lease, operation and
maintenance, of an automobile. To the extent that any such expenses
are deemed to constitute compensation to Executive, including
without limitation any auto reimbursement expenses, such expenses
shall be reimbursed by December 31 of the year following the year
in which the expense was incurred. The amount of any such expenses
reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year and Executive's right to
reimbursement of any such expenses shall not be subject to
liquidation or exchange for any other benefit.
8.
TERMINATION OF EMPLOYMENT.
(a)
Termination
Without Cause. The
Company may terminate Executive's employment without Cause (as
defined below) at any time during the Term upon thirty (30)
days' written notice provided to Executive in accordance with
Section 10 below, or in
the Company's sole discretion, payment of Executive's Base
Salary for such period in lieu of notice. If Executive has a
"separation from service" (within the meaning of Section
409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as
amended, and Treasury Regulation Section 1.409A-1(h))
("Separation
from Service") by the Company without Cause, the
Company shall promptly or, in the case of obligations
described in clause (iv) below, as such obligations become
due, pay or provide to Executive, (i) Executive's earned but
unpaid Base Compensation accrued through the date of such
Separation from Service (the "Termination
Date"), (ii) accrued but unpaid vacation time through
the Termination Date, (iii) reimbursement of any business
expenses incurred by Executive prior to the Termination Date
that are reimbursable under Section 7 above, (iv) any vested
benefits and other amounts due to Executive under any plan,
program or policy of the Company, and (v) any payment in lieu
of notice of termination under this Section 8(a) (together,
the "Accrued
Obligations"). In addition, subject to Section 8(e)
below and Executive's execution and non-revocation of a
binding release in accordance with Section 8(f) below, in the
event of a termination of Executive's employment by the
Company without Cause, the Company shall pay or provide to
Executive (the "Severance"):
(x)
a lump-sum cash payment equal to the sum of (A) Executive's
Base Compensation at the rate in effect as of the Termination
Date, plus (B) a pro rata portion of Executive's target annual
bonus for the calendar year in which the Termination Date
occurs, determined by multiplying the target annual bonus by a
fraction, the numerator of which equals the number of days
elapsed in the calendar year of termination through the
Termination Date and the denominator of which equals 365,
and
(y)
at the Company's expense, continuation of group healthcare
coverage for Executive and his legal dependents until the
earlier of twelve months from the Termination Date or such
time as Executive becomes eligible to receive medical benefits
under another group health plan, provided that Executive
properly elects continuation healthcare coverage under Section
4980B of the Internal Revenue Code and the regulations
thereunder; following such continuation period, any further
continuation of such coverage under applicable law shall be at
Executive's sole expense.
Subject
to Section 8(e) below, the Severance amounts described in
Section 8(a)(x) above shall be paid to Executive no
later
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