Exhibit 10.2

 

SHAREHOLDER AGREEMENT

 

This Shareholder Agreement (this “Agreement”) is made and entered into this
         day of                             , 2009, by and between 1st Pacific
Bancorp, a California corporation (“1st Pacific Bancorp”) and 1st Pacific Bank
of California, a California state-chartered bank and the wholly-owned subsidiary
of 1st Pacific Bancorp (“1st Pacific Bank,” and together with 1st Pacific
Bancorp, “1st Pacific”) on the one hand, and Ernest Auerbach, an individual
(“Shareholder”) on the other hand, with reference to the following facts:

 

RECITALS

 

A.                                   Shareholder has agreed to and intends to
purchase approximately fifteen million dollars ($15,000,000) of shares of the no
par value common stock of FB Bancorp (the “Stock Purchase”) and has deposited
the funds required for the Stock Purchase into First Business Bank, National
Association, a national banking association (“First Business Bank”).

 

B.                                     First Business Bank, FB Bancorp, a
California corporation (“FB Bancorp”), 1st Pacific Bancorp and 1st Pacific Bank
have entered into that certain Agreement and Plan of Merger dated as of this
date (the “Reorganization Agreement”), pursuant to which: (i) FB Bancorp and
First Business Bank will reorganize and FB Bancorp will become the bank holding
company for First Business Bank (the “Bank Holding Company Formation”);
(ii) immediately thereafter, FB Bancorp will cause the merger of a wholly-owned
merger subsidiary with and into 1st Pacific Bancorp (the “Merger”), with 1st
Pacific Bancorp as the resultant or surviving corporation in the Merger (the
“Surviving Corporation”); (iii) immediately thereafter, the Surviving
Corporation will merge with FB Bancorp (the “Bank Holding Company Merger”) with
the Surviving Corporation as the resultant or surviving bank holding company
(the “Surviving Bank Holding Company”) for First Business Bank and 1st Pacific
Bank; and (iv) immediately thereafter, the Surviving Bank Holding Company will
cause the merger of First Business Bank with 1st Pacific Bank (the “Bank
Merger”) with 1st Pacific Bank as the resultant or surviving bank in the Bank
Merger (the “Surviving Bank”).

 

C.                                     Shareholder is the largest shareholder in
each of First Business Bank and FB Bancorp and will benefit significantly from
the Reorganization Agreement and the transactions contemplated thereby.

 

D.                                    As a condition to its willingness to enter
into the Reorganization Agreement, and in reliance on Shareholder’s
representations, warranties, covenants and agreements hereunder, 1st Pacific has
requested that Shareholder agree, and Shareholder has agreed, to enter into this
Agreement and to perform Shareholder’s duties and obligations hereunder.

 

NOW, THEREFORE, in consideration of the promises and of the representations,
warranties and covenants, agreements and conditions contained herein and in the
Reorganization Agreement, the parties hereto agree as follows:

 

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AGREEMENT

 

1.                                      AGREEMENTS OF SHAREHOLDER

 

1.1.                            Agreement to Vote.  At any meeting of
shareholders of First Business Bank and/or FB Bancorp to approve the Stock
Purchase, the Merger, the Reorganization Agreement and the transactions
contemplated thereby, Shareholder shall vote or cause to be voted all shares of:
(i) common stock of FB Bancorp, no par value per share (“FB Bancorp Stock”) and
(ii) common stock of First Business Bank, $5.00 par value per share (“First
Business Bank Common Stock” and together with FB Bancorp Stock, “FBB Stock”),
owned by Shareholder and any other shares of FBB Stock hereafter acquired by
Shareholder in favor of, and to approve, the principal terms of the Stock
Purchase, Bank Holding Company Formation, Merger and any other matter
contemplated by the Reorganization Agreement which requires the approval of the
shareholders of First Business Bank and/or FB Bancorp.

 

1.2.                            Restrictions on Dispositions.  Shareholder
agrees that, except with the prior written consent of 1st Pacific Bancorp, which
may be withheld in its sole and absolute discretion, Shareholder will not pledge
nor otherwise encumber, sell, assign or otherwise dispose of any shares of FBB
Stock currently owned or acquired by Shareholder after the date of this
Agreement.

 

1.3.                            Cooperation.  Shareholder agrees to cooperate
fully with 1st Pacific in connection with the Bank Holding Company Formation and
the Stock Purchase, including providing all information reasonably requested by
the regulatory authorities on a timely basis in connection with Shareholder’s
applications for approval as the controlling shareholder of the Surviving Bank
Holding Company.

 

1.4.                            Covenant to Elect Former 1st Pacific Directors. 
Pursuant to Section 2.4 of the Reorganization Agreement, two board members of
1st Pacific Bancorp immediately prior to the effective time of the Merger (“1st
Pacific Directors”) will be invited to join the board of directors of Surviving
Corporation, which shall become the directors of Surviving Bank Holding
Company.  Shareholder agrees to vote, or cause to be voted, all shares of FBB
Stock owned by Shareholder and any other shares of FBB Stock hereafter acquired
by Shareholder, from time to time and at all times, in whatever manner as shall
be necessary to ensure that at each annual or special meeting of shareholders at
which an election of directors is held or pursuant to any written consent of the
shareholders, the 1st Pacific Directors shall be elected to the board of
directors of Surviving Corporation and Surviving Bank Holding Company; provided
however, that such obligation shall only apply if the 1st Pacific Directors are
nominated for re-election by the Surviving Corporation’s board of directors and
they consent to serve; and provided further, that such obligation shall
terminate upon the expiration of the Earn Out Period (as defined in the
Reorganization Agreement).

 

1.5.                            Reasonable Restrictions.  Shareholder agrees to
accept all reasonable regulatory restrictions imposed by any Federal or state
banking regulator including, but not limited to, the Office of the Comptroller
of the Currency, the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System and the California Department of
Financial Institutions, which regulates 1st Pacific Bank or First Business Bank,
or any of their respective holding companies or subsidiaries, as the case may
be, in connection with the Stock Purchase and the Holding Company Formation;
provided, however, Shareholder shall not be obligated to

 

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consummate the Stock Purchase or the Bank Holding Company Formation to the
extent that Shareholder reasonably determines, in good faith, that any one or
more restrictions, individually or when aggregated, as in effect or to be in
effect as of the closing of the Bank Holding Company Merger, with respect to
Shareholder would be material and adverse to Shareholder’s financial condition
or business plans, it being understood and agreed that any regulatory
requirement to increase Shareholder’s financial commitment to the consummation
of the Bank Holding Company Formation and Stock Purchase beyond fifteen million
dollars ($15,000,000) shall be deemed material and adverse to Shareholder.

 

1.6.                            General Conduct.  During the period from the
date of this Agreement to the Effective Time (as defined in the Reorganization
Agreement), except with the written consent of 1st Pacific Bancorp and 1st
Pacific Bank, which may be withheld in their sole and absolute discretion,
Shareholder will not voluntarily take any action that would: (i) adversely
affect the ability of Shareholder, First Business Bank or FB Bancorp to obtain
the Regulatory Approvals (as defined in the Reorganization Agreement) or
materially increase the period of time necessary to obtain such approvals;
(ii) adversely affect his ability to perform his covenants and agreements under
this Agreement; (iii) result in the representations and warranties contained in
Article V of the Reorganization Agreement not being true and correct on the date
of this Agreement or at any future date on or prior to the Closing Date (as
defined in the Reorganization Agreement) or in any of the conditions set forth
in Article IX of the Reorganization Agreement not being satisfied; or (iv) cause
or allow (to the extent of Shareholder’s power and authority as a shareholder)
First Business Bank or FB Bancorp to take any action that would result in the
representations and warranties contained in Article V of the Reorganization
Agreement not being true and correct on the date of this Agreement or at any
future date on or prior to the Closing Date (as defined in the Reorganization
Agreement) or in any of the conditions set forth in Article IX of the
Reorganization Agreement not being satisfied.

 

2.                                      REPRESENTATIONS AND WARRANTIES OF
SHAREHOLDER

 

Shareholder represents and warrants to and agrees with 1st Pacific as follows:

 

2.1.                            Capacity.  Shareholder has all the requisite
capacity and authority to enter into and perform Shareholder’s obligations under
this Agreement.

 

2.2.                            Binding Agreement.  This Agreement constitutes
the valid and binding obligation of Shareholder, except as the enforcement
hereof may be limited by general principles of equity.

 

2.3.                            Non-Contravention.  The execution and delivery
of this Agreement by Shareholder does not, and the performance by Shareholder of
Shareholder’s obligations hereunder and the consummation by Shareholder of the
transactions contemplated hereby will not, violate or conflict with or
constitute a default under any agreement, instrument, contract or other
obligation or any order; arbitration award, judgment or decree to which
Shareholder is a party or by which Shareholder is bound, or any statute, rule or
regulation to which Shareholder or any of Shareholder’s property is subject.

 

2.4.                            Ownership of Shares.  Schedule 1 hereto
correctly sets forth the number of shares of FB Bancorp Stock and First Business
Bank Common Stock owned by Shareholder, or with

 

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respect to which Shareholder has voting power or beneficial ownership, as of the
date hereof, divided by the type of stock.  Shareholder has good title to all of
the shares of FBB Stock indicated as owned by Shareholder in the capacity set
forth on Schedule 1 as of the date hereof and such shares of FBB Stock are so
owned free and clear of any liens, security interests, charges or other
encumbrances, except as set forth in Schedule 1.  Shareholder neither owns nor
has voting power over any equity or voting securities of First Business Bank or
FB Bancorp other than as set forth on Schedule 1.

 

2.5.                            Deposit.  Shareholder has deposited
approximately fifteen million dollars ($15,000,000) (the “Funds”) into an
account at First Business Bank, which Funds are designated for use in the Stock
Purchase.  Neither such account nor such Funds therein is currently restricted
or pledged in any manner and such Funds will not be withdrawn, pledged or
transferred without the written consent of 1st Pacific Bancorp, except to
consummate the Stock Purchase.  Shareholder has provided to 1st Pacific Bancorp
a full, complete and accurate copy of the bank statement evidencing the deposit
and status of the account as of the date of this Agreement.

 

3.                                      TERMINATION

 

3.1.                            Termination Date.  This Agreement shall
terminate and be of no further force and effect upon the earlier of: (i) the
termination of the Reorganization Agreement, or (ii) the expiration of the Earn
Out Period (as defined in the Reorganization Agreement).  Consummation of the
Merger and the other matters contemplated by the Reorganization Agreement shall
not terminate this Agreement.

 

3.2.                            Effect of Termination.  Upon the valid
termination of this Agreement in accordance with Section 3.1 hereof, the
respective obligations of the parties hereto shall immediately become void and
have no further force or effect.

 

4.                                      EQUITABLE RELIEF.  Shareholder
acknowledges and agrees that 1st Pacific’s remedies at law for breach of any of
the provisions of this Agreement may be inadequate and, in recognition of this
fact, Shareholder agrees that, in the event of such breach, in addition to any
remedies at law it may have, 1st Pacific, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy that may be available. Shareholder further acknowledges that
should Shareholder violate any of the provisions of this Agreement, it will be
difficult to determine the amount of damages resulting to 1st Pacific and that
in addition to any other remedies it may have, 1st Pacific shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
damages.

 

5.                                      ACKNOWLEDGEMENT.  Each of Shareholder
and 1st Pacific acknowledges and agrees that the covenants and agreements
contained in this Agreement have been negotiated in good faith by the parties,
are reasonable and are not more restrictive or broader than necessary to protect
the interests of the parties thereto, and would not achieve their intended
purpose if they were on different terms or for periods of time shorter than the
periods of time provided herein or applied in more restrictive geographical
areas than are provided herein. Shareholder further acknowledges that 1st
Pacific would not enter into the Reorganization Agreement and the transactions
contemplated thereby in the absence of the covenants and agreements contained in
this Agreement and that such covenants and agreements are essential to protect
the value of the Reorganization Agreement to 1st Pacific.

 

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6.                                      MISCELLANEOUS

 

6.1.                            Expenses.  Each party hereto shall pay its own
costs and expenses, including, without limitation, those of its attorneys and
accountants, in connection with this Agreement and transactions covered and
contemplated hereby.

 

6.2.                            Notices.  All notices, demands or other
communications hereunder shall be in writing and be made by (a) hand delivery;
(b) overnight mail; (c) United States mail, first class, certified or postage
prepaid; or (d) facsimile transmission, and shall be deemed to have been duly
given (i) on the date of service if delivered by hand or facsimile transmission
(provided that telecopied notices are also mailed by United States mail, first
class, certified or registered, postage prepaid); (ii) on the next day if
delivered by overnight mail; or first class, certified or registered, postage
prepaid, and properly addressed as follows:

 

(a)                                  If to 1st Pacific:

Ronald J. Carlson

President and Chief Executive Officer

1st Pacific Bank of California

9333 Genesee Avenue #300

San Diego, California

Phone:           (858) 875-2005

Fax:                         (858) 875-2016

 

(b)                                 If to Shareholder:

to the address noted on the final page hereof.

 

The persons or addresses to which mailings or deliveries shall be made may
change from time to time by notice given pursuant to the provisions of this
Section 6.2.

 

6.3.                            Successors and Assigns.  All terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective transferees, successors and assigns;
provided, however, that, except as otherwise contemplated herein, this Agreement
and all rights, privileges, duties and obligations of the parties hereto may not
be assigned or delegated by Shareholder without the prior written consent of 1st
Pacific and any purported assignment in violation of this Section 6.3 shall be
null and void.

 

6.4.                            Third Party Beneficiaries.  Each party hereto
intends that this Agreement shall not benefit, or create any right or cause of
action in or on behalf of, any person other than the parties hereto, except that
Ronald J. Carlson and Christopher Scripps McKellar shall be third party
beneficiaries of Sections 1.4, 4 and 6 and shall have the right to enforce the
obligations of such provisions. As used in this Agreement, the term “party” or
“parties” shall refer only to 1st Pacific Bancorp, 1st Pacific Bank and
Shareholder.

 

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6.5.                            Counterparts.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one instrument.

 

6.6.                            Governing Law/Venue.  This Agreement is made and
entered in the State of California and the laws of the State of California shall
govern the validity and interpretation hereof and the performance of the parties
hereto of their respective duties and obligations hereunder.  In an action or
suit brought by Shareholder or 1st Pacific to enforce any provision hereof, or
for damages for the breach hereof, such action or suit shall be commenced and
maintained exclusively in the state superior courts located in San Diego County,
California or Federal district courts located in San Diego County, California,
and the parties hereto agree not to challenge the selection of that venue in any
such proceeding for any reason, including, without limitation, on the grounds
that such venue is an inconvenient forum.

 

6.7.                            Captions.  The captions contained in this
Agreement are for convenience of reference only and do not form a part of this
Agreement.

 

6.8.                            Waiver and Modification.  No waiver of any term,
provision or condition of this Agreement, whether by conduct or otherwise, in
any one or more instances, shall be deemed to be construed as a further or
continuing waiver of any such term, provision or condition of this Agreement.
This Agreement may be modified or amended only by an instrument of equal
formality signed by the parties or their duly authorized agents, and if such
modification or amendment would effect Sections 1.4, 4 or 6, by Ronald J.
Carlson and Christopher Scripps McKellar as well.

 

6.9.                            Entire Agreement.  The making, execution and
delivery of this Agreement by the parties hereto have not been induced by any
representation, statements, warranties or agreements other than those expressed
herein. This Agreement, in addition to the applicable provisions of the
Reorganization Agreement, embodies the entire understanding of the parties and
there are no further or other agreements or understandings, written or oral, in
effect between the parties relating to the subject matter hereof, unless
expressly referred to by reference herein.

 

6.10.                     Severability.  Whenever possible, each provision of
this Agreement and every related document shall be interpreted in such manner as
to be valid under applicable law.  However, if any provision of any of the
foregoing shall be invalid or prohibited under said applicable law, it shall be
construed, interpreted and limited to effectuate its purpose to the maximum
legally permissible extent.  If it cannot be so construed and interpreted so as
to be valid under such law, such provision shall be ineffective to the extent of
such invalidity or prohibition without invalidating the remainder of such
provision or the remaining provisions of this Agreement, and this Agreement
shall be construed to the minimum extent possible to carry out its terms without
such invalid or unenforceable provision or portion thereof.

 

[The remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

 

1ST PACIFIC BANCORP

 

 

 

 

 

By:

 

 

 

Name:

Ronald J. Carlson

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

1ST PACIFIC BANK OF CALIFORNIA

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

Ronald J. Carlson

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

SHAREHOLDER

 

 

 

 

 

 

 

 

(Signature)

 

 

 

 

 

Ernest Auerbach

 

 

(Name)

 

 

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

 

(City, State and Zip Code)

 

 

 

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SCHEDULE 1

 

 

 

Number

 

 

 

Name

 

Shares

 

Type

 

Nature of Ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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