Exhibit 10.1

 

PACIFIC MERCANTILE BANCORP

CHANGE IN CONTROL SEVERANCE PLAN

 

ARTICLE 1
ESTABLISHMENT AND PURPOSE

 

1.1                               Establishment of the Plan.  Pacific Mercantile
Bancorp (the “Company”) hereby establishes a change in control severance plan to
be known as the “Pacific Mercantile Bancorp Change in Control Severance Plan”
(the “Plan”).

 

1.2                               Purpose of the Plan.  The Plan is designed to
provide certain severance payments and other benefits to selected employees of
the Company and its Subsidiaries in the event that their employment (1) is
terminated by the Company without Cause or by the employee for Good Reason, and
(2) such termination occurs shortly prior to or within the one (1) year period
immediately following a Change in Control.  The Plan is intended as an unfunded
welfare benefit plan for purposes of ERISA, and a severance pay plan within the
meaning of Department of Labor Regulation 2510.3-2(b).

 

ARTICLE 2
DEFINITIONS

 

Whenever used in the Plan, the following terms shall have the meanings set forth
below (such defined terms are in addition to terms defined elsewhere in the
Plan) unless the context clearly indicates to the contrary:

 

(a)                                 “Base Salary” means, except as may otherwise
be specified in a Participant’s Participation Agreement, the salary of record
for the Participant in United States dollars as annual salary, whether or not
deferred, but excluding all other amounts received, including bonus and other
incentive compensation and benefits under pension, welfare and fringe benefit
plans.

 

(b)                                 “Benefit Payment” means the amount equal to
the excess of the monthly COBRA premium charged by the Company to terminated
employees, as in effect at the Effective Date of Termination, over the monthly
premium for such benefits charged to active employees, applicable to the
medical, dental and/or vision benefits for which Participant (and his or her
eligible dependents) was enrolled at the Effective Date of Termination.

 

(c)                                  “Board” means the Board of Directors of the
Company.

 

(d)                                 “Cause” means any of the following: (i) the
Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty
for personal profit, or falsification of any documents or records of the Company
or any Subsidiary; (ii) the Participant’s material failure to abide by the
Company’s or any Subsidiary’s code of conduct or other policies (including,
without limitation, policies relating to confidentiality and reasonable
workplace conduct); (iii) the Participant’s unauthorized use, misappropriation,
destruction or diversion of any tangible or intangible asset or corporate
opportunity of the Company or any Subsidiary (including, without limitation, the
Participant’s improper use or disclosure of the Company’s or any Subsidiary’s

 

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confidential or proprietary information); (iv) any intentional act by the
Participant which has a material detrimental effect on the Company’s or any
Subsidiary’s reputation or business; (v) the Participant’s repeated failure or
inability to perform any reasonable assigned duties after written notice from
the Company or any Subsidiary, and a reasonable opportunity to cure such failure
or inability; (vi) any material breach by the Participant of any employment,
service, non-solicitation, confidentiality or other similar agreement between
the Participant and the Company or any Subsidiary, as determined in good faith
by the Company, which breach is not cured pursuant to the terms of such
agreement; or (vii) the Participant’s conviction (including any plea of guilty
or nolo contendere) of any criminal act involving fraud, dishonesty,
misappropriation or moral turpitude, or which impairs the Participant’s ability
to perform his or her duties with the Company or any Subsidiary.  A
Participant’s service shall be deemed to have been terminated for Cause if,
after the Participant’s service has terminated, facts or circumstances are
discovered that would have justified a termination for Cause.

 

(e)                                  “Change in Control” means the occurrence or
consummation of any of the following events:

 

(i)                                     the consummation of a merger or
consolidation of the Company with or into another entity or any other corporate
reorganization, if persons who were not shareholders of the Company immediately
prior to such merger, consolidation or other reorganization own immediately
after such merger, consolidation or other reorganization fifty percent (50%) or
more of the voting power of the outstanding securities of each of (A) the
continuing or surviving entity and (B) any direct or indirect parent corporation
of such continuing or surviving entity;

 

(ii)                                  the sale, transfer or other disposition of
all or substantially all of the Company’s assets;

 

(iii)                               a change in the composition of the Board, as
a result of which fewer than fifty percent (50%) of the incumbent directors are
directors who either (A) had been directors of the Company on the date
twenty-four (24) months prior to the date of such change in the composition of
the Board (the “Original Directors”), or (B) were appointed by the Board, or
nominated for election to the Board, with the affirmative votes of at least a
majority of the aggregate of (1) the Original Directors who were in office at
the time of their appointment or nomination and (2) the directors whose
appointment or nomination was previously approved in a manner consistent with
this paragraph (B); or

 

(iv)                              any transaction as a result of which any one
person or more than one person acting as a group (but excluding Carpenter Fund
Manager GP, LLC and its affiliates) acquires ownership of stock of the Company
that, together with stock held by such person or group, constitutes more than
fifty percent (50%) of the total fair market value or total voting power of the
stock of the Company. If a person or group is considered either to own more than
fifty percent (50%) of the total fair market value or total voting power of the
stock of the Company, and such person or group acquires additional stock of the
Company, the acquisition of additional stock by such person or group shall not
be considered to cause a subsequent “Change in Control” of the Company.  For the
avoidance of doubt, the acquisition and/or ownership of

 

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stock of the Company by Carpenter Fund Manager GP, LLC and/or its affiliates
shall in no circumstance constitute a “Change in Control” for purposes of the
Plan.

 

(f)                                   “Change in Control Benefits” means the
benefits described in Article 4.

 

(g)                                  “Change in Control Benefits Period” means
the number of months specified in the Participation Agreement with respect to
which the Participant shall receive Change in Control Benefits.

 

(h)                                 “COBRA” means Section 4980B of the Code and
Section 601 et seq. of ERISA.

 

(i)                                     “Code” means the Internal Revenue Code
of 1986, as amended.

 

(j)                                    “Committee” means the Compensation
Committee of the Board.

 

(k)                                 “Disability” means a physical or mental
impairment which prevents a Participant from performing the essential functions
of the Participant’s position with the Company with or without reasonable
accommodation.

 

(l)                                     “Effective Date of Termination” means
the date on which a Participant’s Termination of Employment occurs.

 

(m)                             “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.

 

(n)                                 “Good Reason Termination” means the
termination of a Participant’s employment by a Participant pursuant to and in
accordance with the procedures set forth in Section 3.2(b).

 

(o)                                 “Good Reason” means, with respect to a
particular Participant, the occurrence of any one or more of the following
without the Participant’s express written consent:

 

(i)                                     a change in the Participant’s position
with the Company or a Subsidiary that materially reduces the Participant’s level
of authorities, responsibilities or duties (including, without limitation, any
change in the Participant’s position such that the Participant is no longer
employed in substantially the same position with substantially the same level of
authorities, responsibilities or duties at the ultimate parent corporation in an
affiliated group of companies);

 

(ii)                                  a reduction in the Participant’s Base
Salary by more than ten percent (10%); or

 

(iii)                               receipt by the Participant of notice that
the Participant’s principal workplace will be relocated by more than thirty-five
(35) miles from the Participant’s current workplace and to a location that is
further from the Participant’s then current principal residence than the
Participant’s then current principal workplace.

 

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(p)                                 “Involuntary Separation from Service” means
the termination of a Participant’s employment by the Company for any reason
other than Cause, death of the Participant, or Disability.

 

(q)                                 “Notice of Good Reason” means a written
notice stating all facts constituting a Good Reason.

 

(r)                                    “Participant” means an employee of the
Company or any Subsidiary who is part of a select group of management or highly
compensated employees, who has been informed in writing that he or she is
eligible for benefits under the Plan and who also enters into a Participation
Agreement.

 

(s)                                   “Participation Agreement” means an
agreement under this Plan in a form specified by the Company that is signed by
the Participant and an officer of the Company.

 

(t)                                    “Prorated Annual Bonus Award” means, for
any fiscal year, the annual bonus award that the Participant would have received
had the Participant remained employed for the entire fiscal year/performance
period, but prorated based on the actual Base Salary paid to the Participant
during such fiscal year for services rendered through the Effective Date of
Termination.  For the purposes of this definition, the Committee will not
exercise its discretion as to the subjective portion of the annual bonus award,
and any such subjective amount will be included in such annual bonus award at
target, subject to proration as described above.

 

(u)                                 “Release” means a release agreement approved
by the Company that is effective after the Effective Date of Termination, which
will require the Participant to waive and release: (i) all known and unknown
claims and rights directly or indirectly arising from his or her employment and
the termination of that employment, including any and all claims under
applicable state and federal laws, including but not limited to claims under
Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of
1991; Sections 1981 and 1983 of the Civil Rights Act of 1866; Executive Order
11246; the Age Discrimination in Employment Act of 1967, as amended by the Older
Workers Benefit Protection Act; the Family and Medical Leave Act; ERISA; the
Worker Adjustment and Retraining Notification Act (“WARN”) and California Labor
Code Sections 1400 through 1408 (“Cal-WARN”); the National Labor Relations Act;
the Occupational Safety and Health Act; the Genetic Information
Nondiscrimination Act of 2008; the Equal Pay Act; the Rehabilitation Act of
1973; the Americans With Disabilities Act of 1990; the California Government and
Business & Professions Codes; the California Family Rights Act; the United
States and California Constitutions; the Private Attorneys General Act of 2004;
and the California Fair Employment and Housing Act; (ii) any known or unknown
claims under common law, contract, or regulation; and (iii) any other known or
unknown claim or dispute that exists or may exist stemming from conduct or
events arising or occurring through the time Participant signs the release.  In
releasing these claims against the Company and its Subsidiaries, Participant
will also be releasing the officers, directors, shareholders, managers,
affiliates, agents and representatives, successors and assigns of the Company
and its Subsidiaries.  Notwithstanding the foregoing, it is not a condition for
Change in Control Benefits that a Participant agree to waive any rights to
benefits for worker’s compensation or unemployment compensation benefits;
benefits under COBRA; any rights under state or federal law which may not be
waived by a release agreement; or for any right to which Participant is vested
under the

 

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employee benefit plans of the Company or its Subsidiaries to the extent they are
identified in the Release; said claims shall be preserved.  Also, it shall not
be a condition for Change in Control Benefits that the Participant waive any
claims which arise from events occurring after the execution of the release of
claims.

 

(v)                                 “Subsidiary” means any entity in which the
Company owns a controlling interest.

 

(w)                               “Termination of Employment” with respect to a
Participant means the Participant’s “separation from service,” as defined under
Code Section 409A and Treasury Regulation Section 1.409A-1(h)(i), from the
Company and its Subsidiaries (as applicable).

 

ARTICLE 3
ELIGIBLE PARTICIPANTS.

 

3.1                               Designation of Eligibility.  The Board or the
Committee shall determine whether an employee is initially eligible as a
Participant, whether that Participant retains that eligibility to receive Change
in Control Benefits under the Plan and the level of Change in Control Benefits
to which that Participant may become entitled as provided herein.  Eligibility
decisions shall be made by official action of the Board or the Committee, or the
individual or subcommittee to whom a delegation is made by the Board or the
Committee.  Subject to Sections 3.2 and 3.3, eligibility shall be effective on
the date established by the Board or the Committee.  Participants who become
ineligible shall be informed in writing.  If a Participant is notified of
ineligibility or termination of the Plan, such notice shall be effective on the
first anniversary of the date that the Participant is notified of that
decision.  Each Participant must acknowledge and agree, by executing the
Participation Agreement: (a) to certain non-solicitation and confidentiality
provisions; (b) that the Plan supersedes entirely any prior agreement,
arrangement, plan or program for the payment of severance, salary continuation
or the provision of other benefits in connection with a Change in Control; and
(c) that Participant accepts the authority of the Board and the Committee under
Article 5.

 

3.2                               Eligibility for Change in Control Benefits. A
Participant will be eligible for Change in Control Benefits under the Plan only
if, during the period (a) commencing on the earlier of (i) the occurrence of a
Change in Control and (ii) public announcement of an intended or anticipated
Change in Control, provided that such Change in Control actually occurs, and
(b) ending on the date one (1) year following a Change in Control, one of the
following occurs:

 

(a)                                 Involuntary Separation from Service.  The
Participant has an Involuntary Separation from Service.

 

(b)                                 Good Reason Termination. A Good Reason
occurs and the Participant terminates employment with the Company pursuant to
and in accordance with the procedures set in this Section 3.2(b).  In the event
a condition arises which may constitute a Good Reason, the Participant shall
provide a Notice of Good Reason to the Company within 90 days of the initial
existence of the Good Reason.  Upon receiving a Notice of Good Reason, the
Company shall be permitted a period of 30 days to remedy the condition.  If such
condition is not remedied within such 30-day period, the Participant shall
terminate his or her employment within 60 days of (a)

 

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providing the Notice of Good Reason to the Company or (b) the Change in Control,
whichever is later.  In the event the Participant does not notify the Company
within 90 days of the initial existence of the Good Reason, or a Participant
does not terminate his or her employment within 60 days of the later of
providing the Notice of Good Reason to the Company or the Change in Control, the
Participant shall not be eligible for Change in Control Benefits under the Plan
as a result of any Termination of Employment resulting from or relating to such
Good Reason and any such Termination of Employment shall not constitute a Good
Reason Termination.

 

3.3                               Release.  A Participant will be are eligible
for Change in Control Benefits under the Plan only if, within 60 days after the
Effective Date of Termination, he or she has signed and not revoked (if
applicable) a Release, and such Release has become effective by its terms.  In
the event a Participant should fail to execute the Release within the above
timeframe after the Effective Date of Termination, or should revoke the Release
(if applicable), the Company shall not have any obligation to make the payments
provided under the Plan.  A Participant must also acknowledge in the
Participation Agreement that the Change in Control Benefits must be repaid, and
the payment of any future Change in Control Benefits, if any, will cease in the
event that the Company determines, in its sole discretion, that the Participant
has breached any post-employment obligations owed to the Company, including
those set forth in any non-solicitation and confidentiality provision signed by
the Participant.  Once payments have been made under the Plan, the Company shall
have no further severance obligations to the Participant, whether under another
agreement or plan, and no additional severance will be payable in connection
with the Participant’s Termination of Employment; provided however, that the
payment of benefits hereunder shall have no impact on retirement-type benefits
such as those accrued under any supplemental executive retirement plans,
deferred compensation plans or other pension benefit plans in which the
Participant also participates.

 

3.4                               Restrictions on Payments by the Company. 
Anything in the Plan to the contrary notwithstanding, any Change in Control
Benefits provided under the Plan are subject to and conditioned upon compliance
with all applicable state and federal laws, rules and regulations, including,
but not limited to, the following:

 

(a)                                 Clawback and Offset.  Any payments made
under the Plan may be subject to forfeiture or repayment (such forfeiture or
repayment a “clawback”), in the Plan Administrator’s sole discretion, if the
payment is based on performance metrics that are determined to be materially
inaccurate, manipulated or fraudulent in nature.  The Plan Administrator shall
have authority to determine the amount of the payment that may be forfeited or
subject to repayment and may determine, in its sole discretion, not to implement
a clawback, unless the clawback is mandated by applicable laws.  Unless
otherwise paid back to the Company by the Participant, the Company shall have
the right to offset the amount of the payment that is to be forfeited or repaid
under this Section 3.4(a) against any current amounts due to the Participant,
including, but not limited to, salary, incentive compensation, stock awards,
severance, deferred compensation or any other funds due to the Participant from
the Company.

 

(b)                                 Compliance with Banking Laws.  Any payments
made pursuant to the Plan shall be subject to and conditioned upon compliance
with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.  If
any payments contemplated to be made by the

 

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Company pursuant to the Plan may not be made in compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder on the Effective Date
of Termination, such payments may never be made by the Company.  In addition,
any payments contemplated to be made by the Company pursuant to the Plan shall
not be payable to the extent such payments are barred or prohibited by an action
or order issued to the Company or any of its Subsidiaries by the Federal Deposit
Insurance Corporation, the Federal Reserve Bank of San Francisco, the California
Department of Financial Institutions or such other applicable banking regulatory
agency.

 

ARTICLE 4
CHANGE IN CONTROL BENEFITS

 

Provided that the conditions of Article 3 are satisfied, a Participant shall be
entitled to receive the payments and benefits specified in the Participation
Agreement or as otherwise specified below, in each case without duplication. 
Unless otherwise specified in a Participation Agreement, payments shall be made
on the first regular payroll period following the sixtieth (60) day after the
Effective Date of Termination.

 

4.1                               Severance Payments.  A Participant shall be
entitled to receive a lump sum payment equal to (a) his or her monthly Base
Salary, multiplied by the Change in Control Benefits Period, plus (b) his or her
Prorated Annual Bonus Award, if any, for the plan year in which the Effective
Date of Termination occurs, prorated to the Effective Date of Termination.

 

4.2                               Benefits and Benefit Payment.  A Participant
shall be eligible to elect COBRA continuation benefits as to medical, dental,
and vision insurance benefits as provided by applicable law.  At the time
payment is made pursuant to the initial paragraph of this Article 4, the Company
shall also pay Participant, as an additional cash severance payment, a lump sum
equal to the Benefit Payment multiplied by the Change in Control Benefits
Period, but not to exceed 12 months.  Such payment shall be made only if and to
the extent that, as of the Effective Date of Termination, the Participant is
covered under the Company’s medical, dental or vision insurance benefits plans,
but shall be made regardless of whether the Participant elects COBRA coverage
under such plans, and shall be includible in the gross taxable income of the
Participant.  The Participant may, but shall not be required to, use such
additional cash severance payment for the payment of the cost of COBRA
continuation coverage.

 

4.3                               Outplacement Payment. In order to assist the
Participant with his or her transition, the Participant shall be entitled to
receive outplacement services at the level and for the period in place under the
Company’s outplacement program in effect on the Effective Date of Termination
for such period; provided, however, that in no event shall any such outplacement
services be provided beyond the last day of the second taxable year of the
Participant following the taxable year of the Participant in which the
Participant’s Separation from Service occurs.

 

4.4                               Vested Benefits.  All other benefits to which
the Participant has a vested right, as of the Effective Date of Termination,
shall be paid or provided according to the provisions of the governing plan or
program.

 

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4.5                               Changes in Benefits.  Any change to the Plan
that reduces the Change in Control Benefits described in this Article 4 with
respect to any Participation Agreement then in effect shall take effect one year
after that change is adopted by official action of the Board or the Committee. 
The previous sentence notwithstanding, the Plan may be modified and altered at
any time in order to comply with applicable laws, rules and regulations,
including applicable listing standards of any exchange on which the Company’s
common stock is listed.

 

4.6                               Tax Withholdings.  All payments described
herein or in the Participation Agreement shall be reduced by applicable
withholdings and paid pursuant to the Company’s ordinary payroll practices.  No
interest shall accrue on any such payments.

 

4.7                               Limitation on Excess Parachute Payments.  In
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of a Participant (whether paid or payable or distributed
or distributable pursuant to the terms of this Plan or otherwise) (a “Payment”)
would be nondeductible by the Company for federal income tax purposes because of
Section 280G of the Code, then the aggregate present value of amounts payable or
distributable to or for the benefit of the Participant pursuant to this Plan
(“Plan Payments”) shall be reduced (a “Reduction”) to the extent necessary, but
not below zero, so that no portion of the Plan Payments is nondeductible by the
Company pursuant to Code Section 280G.  The Reduction shall be applied before
any reduction of any other Payments that are not Plan Payments unless the plan
or agreement calling for such Payments expressly provides to the contrary making
specific reference to this Plan.  For purposes of this Section 4.7, present
value shall be determined in accordance with Section 280G(d)(4) of the Code.  In
the event a Reduction is required, the Plan Payments to be reduced will be
determined in a manner which has the least economic cost to the Participant and,
to the extent the economic cost is equivalent, will be reduced in the inverse
order of when payment would have been made to the Participant until the
Reduction is achieved.  The Company shall select a firm of certified public
accountants of national standing, (the “Accounting Firm”), which may be the firm
regularly auditing the financial statements of the Company or any affiliate of
the Company.  The Accounting Firm shall make all determinations required to be
made under this Section 4.7 and shall provide detailed supporting calculations
to the Company and the Participant within 30 days after the Effective Date of
Termination or such earlier time as is requested by the Company.  Any such
determination by the Accounting Firm shall be binding upon the Company and the
Participant.  The Accounting Firm shall determine which and how much of the Plan
Payment shall be eliminated or reduced consistent with the requirements of this
Section 4.7.

 

4.8                               Code Section 409A.

 

(a)                                 It is the Company’s intention that amounts
paid under the Plan shall not constitute “deferred compensation” as that term is
defined under Code Section 409A and the regulations promulgated thereunder,
because the amounts paid under the Plan are structured to comply with the
“short-term deferral” exception to Code Section 409A as described in Treasury
Regulations Section 1.409A-1(b)(4), and this Plan and any Participation
Agreement shall be interpreted and administered in accordance with such
intentions.

 

(b)                                 Notwithstanding the foregoing, the Company
does not warrant to any Participant that any amounts paid or benefits delivered
under the Plan will be exempt from, or

 

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paid in compliance with, Code Section 409A.  By executing a Participation
Agreement, each Participant acknowledges and agrees that he or she bears the
entire risk of any adverse federal, state or local tax consequences and penalty
taxes which may result from payments under the Plan on a basis contrary to the
provisions of Code Section 409A or comparable provisions of any applicable state
or local income tax laws, and that in no event will the Company or any
Subsidiary be required to pay any Participant any “gross up” with respect to any
amounts payable by the Participant pursuant to Section 409A or comparable state
or local tax laws.

 

(c)                                  Notwithstanding anything in this Plan or
any Participation Agreement to the contrary, if, as of the date of his
Termination of Employment, a Participant is deemed to be a “specified employee”
of the Company for purposes of Code Section 409A, if and to the extent that any
portion of the payments and benefits payable upon such Termination of Employment
is subject to Code Section 409A, such portion shall not be paid to the
Participant before the date that is six months after the Participant’s
Termination of Employment or, if earlier, the date of the Participant’s death. 
Any portion of the payments and benefits so delayed shall be paid in a single
lump sum without interest at the end of the required delay period.

 

(d)                                 In no event may a Participant, directly or
indirectly, designate the calendar year of a payment under this Plan, and where
a payment may occur in one year or the next, it shall be made in the second
year.

 

ARTICLE 5
ADMINISTRATION PROVISIONS.

 

5.1                               Modification, Amendment or Termination. The
Plan has been adopted by the Board.  The Board, the Committee, or a designee of
the Board or the Committee may modify, amend or terminate the Plan in its sole
discretion through a formal action of such individual or entity evidenced in
writing.  Any modifications or amendments to the Plan that adversely affect
rights of Participants in the Plan shall not be effective until one year
following the adoption of such modification or amendment.  Any communications or
other purported modifications to the Plan that have not been so adopted are
void.  Notwithstanding the foregoing, following a Change in Control, the Plan
cannot be modified, amended or terminated, or the eligibility or level of
participation of a Participant, as set forth in the applicable Participation
Agreement, revoked or modified for one year following such Change in Control.

 

5.2                               Claims and Appeals.

 

(a)                                 Filing Claims. Any Participant who believes
he or she is entitled to Change in Control Benefits may file a claim for
benefits with the Committee (or its designee).

 

(b)                                 Notification to Claimant. If a claim is
wholly or partially denied, the Committee (or its designee) will furnish written
or electronic notification (in accordance with Department of Labor Regulations
Section 2520.104b-1(c)) of the decision to the Participant within 90 days of
receipt of the claim in a manner calculated to be understood by the Participant.
Such notification shall contain the following information:

 

(1)  the specific reason or reasons for the denial;

 

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(2)  specific reference to pertinent Plan provisions upon which the denial is
based;

 

(3)  a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

 

(4)  a description of the Plan’s claims review procedures describing the steps
to be taken and the applicable time limits to submit claims for review,
including a statement of the Participant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

 

If special circumstances require an extension of time for the Committee (or its
designee) to process the claim, the 90-day period may be extended for an
additional 90 days. Prior to the termination of the initial 90-day period, the
Participant shall be furnished with a written or electronic notice setting forth
the reason for the extension. The notice shall indicate the special
circumstances requiring an extension of time and the date by which the Committee
(or its designee) expects to render the benefit determination.

 

(c)                                  Review Procedure. A Participant or his or
her authorized representative may, with respect to any denied claim:

 

(1)  request a full and fair review upon a written application filed within 60
days after receipt by the claimant of written or electronic notification of the
denial of his or her claim;

 

(2)  submit written comments, documents, records and other information relating
to the claim for benefits; and

 

(3)  upon request, and free of charge, be provided reasonable access to and
copies of documents and records and other information relevant to the claim for
benefits.

 

Upon receipt of a timely, written application for review, the Committee (or its
designee) shall undertake a review, taking into account all comments, documents,
records and information submitted by the Participant relating to the claim
without regard to whether the information was submitted or considered in the
initial benefit determination. If the Participant (or his or her duly authorized
representative) fails to appeal the initial benefit determination to the
Committee (or its designee) in writing within the prescribed period of time,
then the Committee’s (or its designee’s) adverse determination shall be final,
binding and conclusive.

 

Any request or submission must be in writing and directed to the Committee (or
its designee). The Committee (or its designee) will have the sole responsibility
for the review of any denied claim and will take all steps appropriate in light
of its findings.

 

(d)                                 Decision on Review. The Committee (or its
designee) will render a decision upon review no later than 60 days after receipt
of the request for a review. If special circumstances (such as the need to hold
a hearing on any matter pertaining to the denied claim) warrant additional time,
the decision will be rendered as soon as possible, but not later than 120

 

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days after receipt of the request for review. Written notice specifying the
circumstances requiring an extension will be furnished to the Participant prior
to the commencement of the extension. The decision on review will be in writing
and will include specific reasons for the decision, written in a manner
calculated to be understood by the Participant, as well as specific references
to the pertinent provisions of the Plan on which the decision is based,
including a statement of the Participant’s right to bring a civil action under
ERISA Section 502(a). If the decision on review is not furnished to the
Participant within the time limits prescribed above, the claim will be deemed
denied on review.

 

(e)           Exhaustion of Remedies. A Participant wishing to seek judicial
review of an adverse benefit determination under the Plan, whether in whole or
in part, must file any suit or legal action, including, without limitation, a
civil action under ERISA Section 502(a), within one year of the date the final
decision on the adverse benefit determination on review is issued or should have
been issued or lose any rights to bring such an action.  If any such judicial
proceeding is undertaken, the evidence presented shall be strictly limited to
the evidence timely presented to the Committee.  A Participant may bring an
action under ERISA only after he or she has exhausted the Plan’s claims and
appeal procedures.

 

5.3          Administration. The Committee shall serve as the “Plan
Administrator” of the Plan and the “named fiduciary” within the meaning of such
terms as defined in ERISA. The Plan Administrator shall have full power and
discretionary authority to determine eligibility for Change in Control Benefits
and to construe the terms of the Plan, including, but not limited to, the making
of factual determinations, the determination of all questions concerning
benefits and procedures for claim review and the resolution of all other
questions arising under the Plan. Change in Control Benefits under the Plan will
be payable only if the Plan Administrator determines in the Plan Administrator’s
sole discretion that the Participant is entitled to them.  The decisions of the
Plan Administrator shall be final and conclusive with respect to all questions
concerning the administration of the Plan upon all Participants, the Company,
and all persons claiming through them.

 

The Plan Administrator may delegate to other persons responsibilities for
performing certain of the duties of the Plan Administrator under the terms of
the Plan and may seek such expert advice as the Plan Administrator deems
reasonably necessary with respect to the Plan. The Plan Administrator shall be
entitled to rely upon the information and advice furnished by such delegatees
and experts, unless actually knowing such information and advice to be
inaccurate or unlawful. The Plan Administrator has discretionary authority to
grant or deny benefits under the Plan. In no event shall a Participant or any
other person be entitled to challenge a decision of the Plan Administrator in
court or in any other administrative proceeding unless and until the claim and
appeals procedures established under the Plan have been complied with and
exhausted.

 

5.4          Binding on Successors.  The Plan shall be binding on the Company’s
successors, including following a Change in Control.

 

5.5          No Assignment.  Change in Control Benefits payable under the Plan
shall not be subject to anticipation, alienation, pledge, sale, transfer,
assignment, garnishment, attachment,

 

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execution, encumbrance, levy, lien, or charge, and any attempt to cause such
Change in Control Benefits to be so subjected shall not be recognized, except to
the extent required by law.

 

5.6          No Employment Rights.  The Plan shall not confer employment rights
upon any person.  No person shall be entitled, by virtue of the Plan, to remain
in the employ of the Company and nothing in the Plan shall restrict the right of
the Company to terminate the employment of any employee or other person at any
time, for any reason and with or without notice or cause.

 

5.7          Plan Funding.  No employee shall acquire by reason of the Plan any
right in or title to any assets, funds, or property of the Company.  Any payment
that becomes due under the Plan is an unfunded obligation and shall be paid from
the general assets of the Company.  No employee, officer, director or agent of
the Company personally guarantees in any manner the payment of Change in Control
Benefits.

 

5.8          Applicable Law.  The Plan shall be governed and construed in
accordance with ERISA, and in the event that any reference shall be made to
state law, the laws of the State of California shall apply, without regard to
its conflicts of law provisions.

 

5.9          Severability. If any provision of the Plan is found, held or deemed
by a court of competent jurisdiction to be void, unlawful or unenforceable under
any applicable statute or other controlling law, the remainder of the Plan shall
continue in full force and effect.

 

5.10        No Duplication of Benefits.  The payments and benefits under this
Agreement are intended to constitute the exclusive payments in the nature of
severance or termination pay that shall be due to any Participant upon his or
Termination of Employment in connection with a Change in Control, and shall be
in lieu of and not in addition to any such other payments under any agreement,
plan, practice or policy of the Company and its Subsidiaries.  Accordingly, if a
Participant is a party to an employment, severance, termination, salary
continuation or other or similar agreement with, or is a participant in any
other severance plan, practice or policy of, the Company or any of its
Subsidiaries, the severance benefits to which the Participant is entitled under
this Plan shall be reduced (but not below zero) by the amount of severance pay
to which he or she is entitled under such other agreement, plan, practice or
policy.  The severance benefits to which a Participant is otherwise entitled
under this Plan shall be further reduced (but not below zero) by (i) any cash
payments to which the Participant may be entitled under any federal, state or
local plant-closing (or similar or analogous) law (including, without
limitation, pursuant to WARN and Cal-WARN); or (ii) the amount of short-term or
long-term disability benefits payable to the Participant under any plan, program
or arrangement of the Company or any of its Subsidiaries, in the event that the
severance benefits payable hereunder do not reduce the amount of short-term or
long-term disability benefits payable to the Participant under such plan,
program, or arrangement.

 

5.11        Effective Date. The Plan shall take effect as of January 22, 2014.

 

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