EXHIBIT 10.15

 

OPTION ANTI-DILUTION AGREEMENT

 

THIS OPTION ANTI-DILUTION AGREEMENT (this “Agreement”) is entered into effective
as of May 11, 2005 by and between 1st Century Bank, N.A. (the “Bank”), and Alan
I. Rothenberg (“Rothenberg”), an individual residing in the State of
California.  This Agreement is made with reference to the following facts and
circumstances:

 

RECITALS

 

A.            The Bank and Rothenberg entered into that certain Stock Option
Agreement, effective as of February 24, 2004 (the “Option Agreement”) for the
option to purchase three hundred seventy thousand (370,000) shares of common
stock of the Bank (the “Options”), post two-for-one stock split effective
February 28, 2005, under the Bank’s 2004 Director and Employee Stock Option Plan
(the “Plan”).

 

B.            The parties hereto now desire to provide Rothenberg with limited
anti-dilution protection with respect to the Options issued pursuant to the
Option Agreement and provide for such other matters as the parties hereto deem
appropriate.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.                                      Anti-Dilution Protection.

 

(a)           Upon the consummation of the Offering (as defined below), the Bank
shall grant to Rothenberg additional stock options under the Plan to purchase
shares of capital stock in the Bank equal to seven percent (7.0%) of the
additional shares of the capital stock of the Bank issued in connection with the
Offering (the “Additional Options”).

 

(b)           The Bank’s obligation to grant the Additional Options under this
Agreement shall continue until the earlier of the date of the dissolution or
liquidation of the Bank or the date of termination of Rothenberg’s “Continuous
Service” as such term is defined in the Plan.  For purposes of this Agreement,
the term “Offering” shall mean the first common stock offering consummated by
the Bank on a “best efforts” basis on or after the effective date of this
Agreement.

 

(c)           Any Additional Option grants made to Rothenberg pursuant to this
Agreement shall be made subject to the same terms and conditions as the Options,
including vesting, except that the exercise price of the Additional Options
shall be made at the then “Fair Market Value” (as such term is defined in the
Plan) of the underlying shares but in no event less than the gross offering
price of the Offering.

 

--------------------------------------------------------------------------------

 

(d)           Rothenberg hereby acknowledges that the Additional Options may
have a higher exercise price than the Options.

 

(e)           In the event the Plan does not have available a sufficient number
of unreserved shares of common stock to grant the Additional Options, the Bank
shall grant the maximum number of options available thereto under the Plan. 
Thereafter, the Bank shall use its best efforts to adopt a new option plan which
shall contain substantially the same terms and conditions as the Plan.  Subject
to the receipt of all required regulatory, Board of Directors and shareholder
approvals, and subject to compliance with all applicable securities laws, the
Bank shall issue such number of options under the new plan such that all
Additional Options have been issued as soon thereafter as possible; provided,
however, that this undertaking shall not require the Bank to register under the
Securities Act the new plan, any option or any stock issued or issuable pursuant
to any such option.  If, after reasonable efforts, the Bank is unable to obtain
from any such person the requisite authority or consent which counsel for the
Bank deems necessary for the lawful issuance and sale of stock under the new
plan or is otherwise unable to obtain a valid exemption from registration for
purposes of issuing options under such new plan, the Bank shall be relieved from
any liability for failure to issue and sell stock upon exercise of such options
unless and until such authority or consent is obtained or a valid exemption from
registration is obtained.

 

2.                                      Representations and Warranties of
Rothenberg.  Rothenberg hereby represents and warrants to the Bank that:

 

(a)           as of the date of this Agreement, the Options held by Rothenberg
are owned legally and beneficially by Rothenberg and have not been hypothecated,
sold or otherwise pledged by Rothenberg.

 

(b)           Rothenberg has had the opportunity to receive independent tax and
legal advice from attorneys of his choice with respect to the advisability of
executing this Agreement and is not relying on the Bank, any of its affiliates,
or their respective shareholders, directors, officers, employees, agents and/or
counsel for tax or legal advice.

 

The foregoing representations and warranties shall survive the execution and
delivery of this Agreement.

 

3.             No Employment or Service Contract.  This Agreement is not an
employment or service contract, and nothing in this Agreement shall be deemed to
create in any way whatsoever any obligation of Rothenberg to continue in the
employ of the Bank or any affiliate thereof, or of the Bank or any of its
affiliates to continue to employ Rothenberg.  In addition, nothing in this
Agreement shall obligate the Bank or any of its affiliates or their respective
shareholders, directors, officers and/or employees to continue any relationship
that Rothenberg might have as a director, officer or consultant for the Bank or
an affiliate thereof.

 

4.             Expenses.  Each party hereby acknowledges and agrees that such
party shall be liable for its own costs and expenses incurred in connection with
the negotiation, preparation, execution and performance of this Agreement.

 

--------------------------------------------------------------------------------

 

5.             Arbitration.  Any dispute or controversy arising under or in
connection with this Agreement, the inception or termination of the Rothenberg’s
employment, or any alleged discrimination or tort claim related to such
employment, including issues raised regarding the Agreement’s formation,
interpretation or breach, shall be settled exclusively by binding arbitration in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association (“AAA”). Without limiting the foregoing,
the following potential claims by the Rothenberg would be subject to arbitration
under the Arbitration Agreement:  claims for wages or other compensation due;
claims for breach of any contract or covenant (express or implied) under which
the Rothenberg believes he would be entitled to compensation or benefits; tort
claims related to such employment; claims for discrimination and harassment
(including, but not limited to, race, sex, religion, national origin, age,
marital status or medical condition, disability, sexual orientation, or any
other characteristic protected by federal, state or local law); claims for
benefits (except where an employee benefit or pension plan specifies that its
claims procedure shall culminate in an arbitration or other procedure different
from this one); and claims for violation of any public policy, federal, state or
other governmental law, statute, regulation or ordinance.  The arbitration will
be conducted in Los Angeles County.  The arbitration shall provide for written
discovery and depositions adequate to give the parties access to documents and
witnesses that are essential to the dispute.  The arbitrator shall have no
authority to add to or to modify this Agreement, shall apply all applicable law,
and shall have no lesser and no greater remedial authority than would a court of
law resolving the same claim or controversy.  The arbitrator shall issue a
written decision that includes the essential findings and conclusions upon which
the decision is based, which shall be signed and dated. Rothenberg and the Bank
shall each bear his or its own costs and attorneys’ fees incurred in conducting
the arbitration and, except in such disputes where Rothenberg asserts a claim
otherwise under a state or federal statute prohibiting discrimination in
employment (“a Statutory Claim”), or unless required otherwise by applicable
law, shall split equally the fees and administrative costs charged by the
arbitrator and AAA.  In disputes where Rothenberg asserts a Statutory Claim
against the Bank, Rothenberg shall be required to pay only the AAA filing fee to
the extent such filing fee does not exceed the fee to file a complaint in state
or federal court.  Rothenberg shall pay the balance of the arbitrator’s fees and
administrative costs.  Judgment may be entered on the arbitrator’s award in any
court having jurisdiction.

 

6.                                      Miscellaneous.

 

(a)           Cooperation.  Each party hereto agrees to perform any further
acts, and to execute and deliver (with acknowledgement, verification and/or
affidavit, if required) any further documents and instruments, as may be
reasonably necessary or advisable to implement and/or accomplish the provisions
of this Agreement and the transactions contemplated herein.

 

(b)           Amendment.  This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.

 

(c)           Entire Agreement.  This Agreement constitutes the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof.

 

--------------------------------------------------------------------------------

 

(d)           Assignment.  This Agreement is personal in nature and Rothenberg
may not assign its rights or delegate the performance of its duties under this
Agreement without the prior written consent of the Bank.  Any purported
assignment without such consent shall be void and of no force or effect.

 

(e)           Parties in Interest.  This Agreement shall be binding upon and
inure solely to the benefit of and be enforceable by each party and its
respective successors and permitted assigns.

 

(f)            Governing Law.  This Agreement shall be governed by and construed
under the laws of the State of California, except to the extent the laws of the
United States of America are mandatorily applicable.

 

(g)           Counterparts.  This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, each of the parties hereto that is not a natural person has
caused this Agreement to be executed on its behalf by its officers or other
persons thereunto duly authorized, all as of the day and year first above
written.

 

 

1st Century Bank, N.A.

 

 

 

 

 

 By:

/s/ Jeffrey M. Watson

 

 Name:

Jeffrey M. Watson

 

 Title:

Secretary

 

 

 

 

 

 

/s/ Alan I. Rothenberg

 

Alan I. Rothenberg

 

--------------------------------------------------------------------------------