EXHIBIT 10.6

 

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2014 California United Bank

Executive Performance Cash Incentive Plan

I. PLAN PURPOSE

The purpose of the 2014 California United Bank (CUB/or Company) Performance Cash
Incentive Plan (“Plan”) is to reward employees participating in the Plan for any
or all of the following components included in achieving the Bank’s annual
financial plan and Bank profitability targets:

 

  •   Execution of strategic initiatives

 

  •   Bank Profitability

 

  •   Loan Growth

 

  •   Asset/Credit Quality

 

  •   Deposit Growth

 

  •   Efficiency Ratio

II. ELIGIBILITY FOR PARTICIPATION

Employees in the Bank whose positions are listed below are eligible for
consideration for an award under this Plan. Employees hired after September 1,
2014 of the Plan year are generally not eligible for an award. In order to
participate in this Plan and potentially earn an award, the participants must be
actively employed at CUB on the payment date as defined in the General Terms and
Conditions section of this Plan document. Awards shall be earned and determined
under the Plan in relation to the attainment of the performance targets set
forth below, as determined by the Compensation, Nominating and Corporate
Governance Committee (“Committee”) in its discretion. Newly hired employees,
transferred employees, or employees promoted to qualifying positions will become
eligible for participation in the Plan at the discretion of the Committee.

An employee is an eligible Plan participant upon being notified of his/her
participation by the Committee. Ongoing participation in the Plan is at the
discretion of the Committee.

Continued participation in the Plan is dependent upon the participant remaining
an employee in good standing as defined by CUB.

III. AWARDS

The performance targets described in this document and its attachments are for
Plan year 2014 and may be amended at the discretion of the Committee. The
following are the definitions as they relate to the three target categories. The
pool for the Plan is funded determined by the performance levels as defined
below:

Threshold Plan Target – In order for the Threshold Plan Target to be met, the
Bank should perform within 80%-100% of the Financial Plan, Bank growth and/or
profitability targets for the year. This component of the Plan provides
flexibility and recognizes that there may be extraordinary actions/events that
reflect long-term investment strategies which could impact short-term earnings.

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Meets Plan Target – In order for the Meets Plan Target to be met, the Bank
should perform at 100% of the Financial Plan, Bank growth and/or profitability
targets for the year.

Exceeds Plan Target – In order for the Exceeds Plan Target to be met, the Bank
should perform within 100% – 125% of the Financial Plan, Bank growth and/or
profitability targets for the year.

Participants

Senior Executives are eligible for consideration for an award calculated based
on a percentage of salary, which is determined based on measurement against
annual Bank- wide performance targets as outlined on Attachment A. The award, if
earned, is paid annually by no later than March 15 of the following year.

The Financial Scorecard (Exhibit A-1) provides the criteria that have been
approved as key performance metrics for the Plan year. The weighting of each of
the performance metrics will be adjusted to reflect individual areas of
responsibility for each participant.

IV. GENERAL TERMS AND CONDITIONS

The provisions of the Plan are subject to periodic review and possible change
throughout the Plan year, with the approval of the Committee.

In addition, CUB reserves the right to withdraw or withhold from the Plan any
transaction, product or service it might select, revise territories, establish
specific account, client or portfolio representation, and assign or reassign
specific accounts, clients or portfolios within a participant’s territory at any
time during the performance period, in its sole discretion. Notwithstanding
anything to the contrary, this Plan shall comply with applicable federal and
state statutes, regulations and guidelines as such may be applicable to the
Plan.

Payment of awards will be made by direct deposit to the participant’s checking
account or by check if the participant has not authorized direct deposit of
wages. Applicable withholdings will be deducted from all payments. Payments made
under this Plan will be used in the calculation of benefits only as required
under the applicable benefit plan.

Awards will be determined generally based on the provisions of this Plan
document, in the sole and absolute discretion of the Committee. The Committee
will review and approve all award recommendations prior to submission to Payroll
for payment. The Committee may adjust payments to reflect the impact of any
event that requires a restatement of the Company’s audited financial statements.

Please be advised that if CUB notifies you in writing that you have received
payments in error under this Plan, you shall be required to repay the aggregate
amount of such payments to CUB no later than fifteen days following your receipt
of such notice.

Non-Exclusivity

The Plan does not limit the authority of the Company, the Board, or the
Committee, to grant awards or authorize any other compensation to any person
under any other plan or authority.

 

This document is for the internal use of the Bank only. The contents of which
are not to be copied, distributed or reproduced in any manner without the
express permission of the Bank.

 

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Misconduct

If, at or before the time awards are paid, a Plan participant violates CUB
policy, or engages in fraudulent conduct or any other act which results in the
participant not being in good standing, the Plan participant may be determined
to be ineligible for an award, at the sole discretion of the Company. Further,
the Company reserves the right to suspend payment of awards pending any
misconduct investigation that the Committee determines could impact a Plan
participant’s eligibility for an award.

To qualify for an incentive award, a participant must have a satisfactory
performance rating and not be in a formal disciplinary status. If an adverse
performance rating is assigned to the participant, the Plan participant will not
be eligible for an incentive award under this Plan. The Committee also has the
discretion to determine that a participant on written warning or disciplinary
status at any time during the Plan year is not eligible to receive any or part
of an incentive award.

Changes in Employment Status

In the event a Plan participant dies, becomes disabled (as defined by CUB
Short-Term or Long-Term Disability Plan provisions), retires, or is on a leave
of absence (as defined by applicable CUB policies), he/she may be eligible for
an incentive award based on the Committee’s discretionary review of performance
results through the last date of the Plan participant’s active employment in the
Plan-eligible position during the performance measurement period.

In the event of death, the incentive award payment, if any, will be issued in
the name of the deceased and made payable to the estate.

Participants whose positions are eliminated may be eligible for prorated
incentive awards, in the sole discretion of the Committee based on such factors
as tenure in the qualifying position, overall performance level, and actual
results attained. Eligibility shall be strictly at the discretion of the
Committee. Participants who voluntarily terminate their employment with CUB
prior to the date of actual payment of any incentive awards under the Plan are
ineligible for an incentive award. In the event a participant’s employment is
involuntarily terminated for reasons other than position elimination,
eligibility for participation in the Plan automatically ceases at the time of
such termination.

Adoption and Administration

The Plan is effective commencing on January 1, 2014, and ending December 31,
2014.

General authority and on-going responsibility for Plan administration is held by
the Committee. Any exceptions to the provisions in this Plan require approval of
the Committee.

No agreements or understandings will modify this Plan unless they are in writing
and specifically approved by the Committee.

 

This document is for the internal use of the Bank only. The contents of which
are not to be copied, distributed or reproduced in any manner without the
express permission of the Bank.

 

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Plan Changes and Interpretation

The Bank reserves the right to make revisions to the Plan or to terminate the
Plan at any time at its sole and absolute discretion. Nothing contained in this
Plan shall vest any right in the incentive award payments until the payment is
actually calculated and paid. Nothing herein alters or revises the
employment-at-will agreement outlined at the time of hire.

The Plan shall not be construed to limit or prevent CUB from adopting or
changing, from time to time, any rules, standards, or procedures affecting a
participant’s employment with CUB or any CUB affiliate, including those which
affect incentive award payments, with or without notice to the Plan participant.

Proprietary Information

This highly confidential material describing and related to the Plan is the sole
property of CUB and shall be used only as expressly approved in writing by CUB.
This type of material is critical to maintaining and enhancing CUB’s competitive
advantage. Any unauthorized use or reproduction of this material is prohibited.

Ethical and Legal Standards

Plan participants are required to be familiar with, and abide by CUB’s Code of
Ethics and comply with the letter and spirit of its provisions at all times.

In addition, a Plan participant shall not pay, offer to pay, assign or give any
part of his/her compensation, incentive award or any other money to any agent,
customer, or representative of a customer or any other person as an inducement
or reward for assistance in making a sale. Moreover, no rights under this Plan
shall be assignable or subject to any pledge or encumbrance of any nature.

If a participant fails to comply with the CUB’s Code of Ethics or the provisions
included in this Plan document, or violates any other Bank policy, his/her
eligibility for an incentive award may be deferred, reduced, or denied at the
discretion of CUB’s management.

 

This document is for the internal use of the Bank only. The contents of which
are not to be copied, distributed or reproduced in any manner without the
express permission of the Bank.

 

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Receipt & Acknowledgement of the California United Bank

Performance Incentive Plan (“Plan”) effective January 1, 2014.

This is to acknowledge that I have received a copy of the Performance Incentive
Plan effective January 1, 2014. I agree to familiarize myself with the
information in this Plan, and by signing below, I am agreeing to the terms and
conditions described in the Plan. My signature also acknowledges that I have
read and understand the CUB Code of Ethics.

I also understand that:

 

  •   I must be employed in good standing with the CUB at the time the incentive
awards are paid in order to be eligible for any award for the applicable period.

 

  •   If, at or before the time the incentive awards are paid, I violate CUB
policy, or engage in fraudulent conduct or any other act which results in my not
being in good standing, awards I will not be eligible for an incentive award
unless CUB determines otherwise, in its sole discretion. Further, CUB reserves
the right to delay or suspend the decision to pay an incentive award pending any
misconduct investigation and to seek reimbursement of any incentive award
previously paid to me at such time as I was not in good standing.

 

  •   I further acknowledge and agree that if my employer, CUB, notifies me in
writing that I have received payments in error, I shall repay the aggregate
amount of such payments to my employer, CUB, no later than fifteen days
following my receipt of such notice.

 

  •   All the information, reports, and/or data provided to me by CUB are and
remain the sole property of CUB. Such information, reports, and/or data include,
without limitation, manuals, computer software, and electronically produced
data. I agree not to use or allow any other party to use information, reports,
and/or data in any manner that is detrimental or results in competitive
disadvantages to CUB.

 

  •   Management reserves the right to make revisions or to discontinue this
Plan at any time, in its sole and absolute discretion. Nothing herein alters or
revises the employment-at-will agreement as outlined in documents provided to me
at the time of hire.

Participant’s Name: (Print):                                       
                                      

Participant’s Signature:                                       
                                              

Date:                                                  

 

This document is for the internal use of the Bank only. The contents of which
are not to be copied, distributed or reproduced in any manner without the
express permission of the Bank.

 

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Attachment A

Senior Executive Plan Details

2014 California United Bank Performance Cash Incentive Plan

The Senior Executives include the following positions:

 

  •   President and CEO

 

  •   Chief Credit Officer and Chief Operating Officer

 

  •   Chief Financial Officer

 

  •   Commercial Banking Executive Managers

 

  •   General Counsel

These positions are eligible for consideration for an incentive award calculated
on a percentage of base salary* which is determined based on a number of
factors, including measurement against annual corporate performance targets as
outlined in the approved financial and strategic plan. This includes, but is not
limited to:

 

  •   Bank Profitability

 

  •   Credit Quality

 

  •   Production/Revenue

 

  •   Efficiency Ratio (non-interest income/strategic expense management)

 

  •   Regulatory Rating

 

  •   Strategic Initiatives

The Financial Scorecard (Exhibit A-1) details more specific areas of measurement
in each of the categories outlined above. For each participant, the weighting in
each of the performance categories is adjusted to reflect individual areas of
responsibility. The Scorecard is updated quarterly to reflect progress against
goals and the Bank plan in each of these areas.

In addition to comparison to the Bank’s financial plan for the year, there is
also a comparison to market peer banks to measure CUB performance relative to
market peers, which is considered in the overall assessment of Bank performance.

Target Opportunity

 

Position Title

 

Threshold Plan Target

 

Meets Plan Target

 

Exceeds Plan Target

President & CEO

  30% of base salary*   50% of base salary*   75% of base salary*

CCO & COO

  20% of base salary*   40% of base salary*   60% of base salary*

CFO

  20% of base salary*   40% of base salary*   60% of base salary*

Commercial Banking

Executive Manager(s)

  20% of base salary*   40% of base salary*   60% of base salary*

General Counsel

  20% of base salary*   40% of base salary*   60% of base salary*

 

* Equivalent of current annual base salary at time of award payout.

Recommendations for the President & CEO is the responsibility of the Committee.
The recommendations for the CCO & COO, CFO, Commercial Banking Executive
Manager(s) and General Counsel are generated by the President & CEO and approved
by the Compensation, Nomination and Corporate Governance Committee.

 

 

This document is for the internal use of the Bank only. The contents of which
are not to be copied, distributed or reproduced in any manner without the
express permission of the Bank.

 

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Attachment A

Senior Executive Plan Details

2014 California United Bank Performance Cash Incentive Plan

The Senior Executives include the following positions:

 

  •   President and CEO

 

  •   Chief Credit Officer and Chief Operating Officer

 

  •   Chief Financial Officer

 

  •   Commercial Banking Executive Managers

 

  •   General Counsel

These positions are eligible for consideration for an incentive award calculated
on a percentage of base salary* which is determined based on a number of
factors, including measurement against annual corporate performance targets as
outlined in the approved financial and strategic plan. This includes, but is not
limited to:

 

  •   Bank Profitability

 

  •   Credit Quality

 

  •   Production/Revenue

 

  •   Efficiency Ratio (non-interest income/strategic expense management)

 

  •   Regulatory Rating

 

  •   Strategic Initiatives

The Financial Scorecard (Exhibit A-1) details more specific areas of measurement
in each of the categories outlined above. For each participant, the weighting in
each of the performance categories is adjusted to reflect individual areas of
responsibility. The Scorecard is updated quarterly to reflect progress against
goals and the Bank plan in each of these areas.

In addition to comparison to the Bank’s financial plan for the year, there is
also a comparison to market peer banks to measure CUB performance relative to
market peers, which is considered in the overall assessment of Bank performance.

Target Opportunity

 

Position Title

 

Threshold Plan Target

 

Meets Plan Target

 

Exceeds Plan Target

CCO & COO

  20% of base salary*   40% of base salary*   60% of base salary*

CFO

  20% of base salary*   40% of base salary*   60% of base salary*

Commercial Banking

Executive Manager(s)

  20% of base salary*   40% of base salary*   60% of base salary*

General Counsel

  20% of base salary*   40% of base salary*   60% of base salary*

 

* Equivalent of current annual base salary at time of award payout.

 

This document is for the internal use of the Bank only. The contents of which
are not to be copied, distributed or reproduced in any manner without the
express permission of the Bank.

 

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The recommendations for the CCO & COO, CFO, Commercial Banking Executive
Manager(s) and General Counsel are generated by the President & CEO and approved
by the Compensation, Nomination and Corporate Governance Committee.

 

This document is for the internal use of the Bank only. The contents of which
are not to be copied, distributed or reproduced in any manner without the
express permission of the Bank.

 

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