**Exhibit 10.9**

 

**SEVERANCEAGREEMENT**

 

THIS SEVERANCEAGREEMENT (this “**Agreement**”) is made and entered into as of September 26, 2003,by and between National Mercantile Bancorp, a California corporation (the “**Company**”),and Robert Bartlett (“**Officer**”) with reference to the followingfacts:

 

A.            Officer is an officer of the Companyand/or one or more subsidiaries of the Company; and

 

B.            In order to induce Officer to remainemployed by the Company and/or its subsidiaries, the Company is willing toagree to pay severance to Officer under certain circumstances.

 

NOW, THEREFORE, inconsideration of the foregoing and of the respective covenants and agreementsof the parties herein contained, it is agreed as follows:

 

# 1.             Definitions.  For purposes of this Agreement, thefollowing terms when used in this Agreement shall have the meanings set forthbelow:

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## 1.1           “**Board**”shall mean the Board of Directors of the Company.

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## 1.2           “**Cause**”shall mean Officer, after the date of this Agreement, (i) has beenconvicted by a court of competent jurisdiction of any felony or any criminaloffense involving dishonesty, breach of trust or misappropriation, or hasentered a plea of *nolo**contendere* to such an offense; or(ii) has committed an act of fraud, embezzlement, theft, dishonesty or anyact which would cause termination of coverage under the Company’s Banker’sBlanket Bond as to Officer (as distinguished from termination of coverage as tothe Company as a whole); or (iii) has committed a willful violation of theCode of Conduct of any member of the Company Group or any law, rule orregulation governing the operation of the Company Group which the Boarddetermines in good faith will likely have or has had a material adverse effecton the business, interests or reputation of the Company Group or any Memberthereof; or (iv) has willfully refused to perform the duties assigned tohim; or (v) has committed a willful and unauthorized disclosure ofmaterial confidential information regarding the Company Group, which disclosurethe Board determines in good faith will likely have or has had a materialadverse effect on the Company Group or any member thereof.

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## 1.3           “**Changeof Control**” shall mean any transaction or series of relatedtransactions as a result of which

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### (i)            the Company consummates a reorganization,merger or consolidation, or sale or other disposition of all or substantiallyall of its assets (each a “**Business Combination**”), in each case *unless*immediately following the consummation of

 

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### such Business Combinationall of the following conditions are satisfied: (x) Persons, who, immediately prior to such Business Combination,were the beneficial owners of the Outstanding Voting Securities of the Company,beneficially own (within the meaning of Rule 13d-3 promulgated under theExchange Act, directly or indirectly, more than one-third of the combinedvoting power of the then Outstanding Voting Securities of the entity (the “**ResultingEntity**”) resulting from such Business Combination (including,without limitation, an entity which as a result of such transaction owns theCompany or all or substantially all of the Company’s assets either directly orthrough one or more subsidiaries); (y) no Person, other than the ExistingShareholder Group, beneficially owns (within the meaning of Rule l3d-3), directlyor indirectly, more than 20% of the then outstanding combined voting power ofthe Outstanding Voting Securities of the Resulting Entity, except to the extentthat such Person’s beneficial ownership of the Company immediately prior to theBusiness Combination exceeded such threshold; and (z) at leastone-half of the members of the board of directors of the Resulting Entitywere members of the Board at the time the Board authorized the Company to enterinto the definitive agreement providing for such Business Combination; or

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### (ii)           any Person acquires beneficialownership (within the meaning of Rule 13d-3) of more than 20% of thecombined voting power (calculated as provided in Rule l3d-3 in the case ofrights to acquire securities) of the then Outstanding Voting Securities of theCompany; provided, however, that for purposes of this clause, thefollowing acquisitions shall not constitute a Change of Control:  (x) any acquisition directly from theCompany, (y) any acquisition by the Company, (z) any acquisition byany employee benefit plan (or related trust) sponsored or maintained by theCompany or any entity controlled by the Company; or (zz) any acquisition by theExisting Shareholder Group.

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## 1.4           “**CompanyGroup**” shall mean at any time the Company and each subsidiary of theCompany at such time which is consolidated with the Company for financialreporting purposes.

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## 1.5           “**Disabilityof Officer**” shall mean if Officer is Disabled and such disabilitycontinues for a period of any six months out of a one-year period.  “**Disabled**”shall mean Officer’s inability, through physical or mental illness or othercause, to perform normal and customary duties which Officer is required toperform for the Company.  In determiningwhether Officer is Disabled, the Company may rely upon the written statementprovided by a licensed physician acceptable to the Company.  Officer shall allow examination from time totime by any licensed physician selected by the Company and agreed to by Officer.  All such examinations will be conductedwithin a reasonable time period.

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## 1.6           “**Exchange Act**”shall mean the Securities Exchange Act of 1934, as amended, or any successorstatute.

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## 1.7           “**ExistingShareholder Group**” shall mean Carl R. Pohlad, members of theimmediate family of Carl R. Pohlad, and any affiliated Person of CarlR. Pohlad or any member of his immediate family.

 

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## 1.8           “**GoodReason**” shall mean with respect to Officer (i) Officer beingdelegated or assigned material duties by the Board or the Chief ExecutiveOfficer of the Company, by a communication in writing, which are substantiallyinconsistent with the position and status held by Officer immediately prior tothe effective date of the Change of Control; or (ii) Officer having hadremoved by the Board or the Chief Executive Officer of the Company by acommunication in writing such authority and responsibility which is necessaryto carry out the duties of the position held by Officer immediately prior tothe effective date of the Change of Control; or (iii) Officer having asubstantial and adverse alteration in the nature, status, or prestige ofOfficer’s responsibilities due to the action of the Board or the ChiefExecutive Officer, which is verifiable by tangible evidence; or (iv) Officerbeing forced to relocate permanently to an office more than 25 miles from thelocation of the Company’s executive offices as in effect immediately prior tothe effective date of the Change of Control; or (v) Officer having his orher base compensation reduced by 10% or more from such base compensation ineffect on the date immediately preceding the effective date of the Change ofControl.  Notwithstanding the foregoing,the loss of one or more titles, and corresponding responsibility(ies), shallnot be deemed to be “**Good Reason**”under (i), (ii) or (iii) above provided that the Officer retains at least onetitle no less senior than Executive Vice President at the Company or at leastone subsidiary bank of the Company.

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## 1.9           **“OutstandingVoting Securities”** of any Person means the outstanding securities ofsuch Person entitling the holders thereof to vote generally in the election ofdirectors of such Person.

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## 1.10         “**Person**”shall have the meaning ascribed to such term in Section 3(a)(9) of theExchange Act, which definition shall include a “person” within the meaning ofSection 13(d)(3) of the Exchange Act.

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## 1.11         “**WithoutCause**” shall mean any termination of Officer’s employment by theCompany except for a termination (i) for Cause, (ii) as a result ofthe death of Officer, or (iii) as a result of the Disability of Officer.

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# 2.             Severance Payment.

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## 2.1           Except as provided in Section 2.2, if(i) Good Reason exists within one year following a Change of Control, andOfficer gives written notice to the Company within 90 days after the occurrenceof such Good Reason that Officer is terminating his or her employment with theCompany for Good Reason, or (ii) the Company terminates Officer’semployment Without Cause within one year following a Change of Control, theCompany will pay Officer in a lump sum an amount (the “**Severance Payment**”) equal to six timesOfficer’s base monthly salary as in effect at the time of termination or, ifgreater, immediately prior to the effective date of the Change of Control.  The Severance Payment shall be reduced byrequired deductions for applicable taxes and other withholdings and for anyoutstanding obligations owed by Officer to the Company that are then due andpayable, which deductions and withholdings are specifically authorized byOfficer.  The Severance Payment shall bein lieu of any other severance payments to which Officer would be entitledunder the plans or policies of the Company and any of its subsidiaries.  The Severance Payment will be paid at thetime of termination of the Officer’s employment with the Company.  Each Change of

 

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## Control and each GoodReason following a Change of Control shall give Officer a separate right togive the notice set forth in the first sentence of this Section 2.

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## 2.2           Notwithstanding any other provisionof this Agreement, the Company shall have no obligations to make the SeverancePayment if such Severance Payment is prohibited by applicable federal or statelaw, including without limitation Part 359 of the regulations of the FederalDeposit Insurance Corporation (12 CFR § 359 *etseq.*) or any successor provision.

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## 2.3           As a condition to the obligation ofthe Company to pay the Severance Payment, the Officer must execute and delivera release in form and substance satisfactory to the Company releasing theCompany Group and its directors, officers, employees and agents (“**Released Parties**”) from any and all claims the Officer mayhave against the Released Parties, whether such claims are known or unknown,absolute or contingent, other than claims under this Agreement, claims forsalary and other compensation and benefits accrued prior to termination, andrights under employee benefit plans.

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# 3.             IRC Provisions.  Notwithstanding any other provision of thisAgreement, if the Company reasonably determines that the payment of theSeverance Payment to Officer would be nondeductible by the Company for federalincome tax purposes because of Section 280G of the Internal Revenue Codeof 1986, as amended (the “**Code**”),the Severance Payment shall be reduced to an amount which maximizes theSeverance Payment without causing any portion of the same to be nondeductibleby the Company because of Section 280G of the Code.  Any such reduction shall be applied to theSeverance Payment or the other amounts due to Officer in such manner as Officermay reasonably specify within 30 days following notice from the Company of theneed for such reduction or, if Officer fails to so specify timely, asdetermined by the Company.

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# 4.             Employee Benefits.  All employee benefits provided by theCompany shall cease upon termination of Officer’s employment, whether for GoodReason, Without Cause, or for any other reason, and the Company shall have nofurther responsibility with respect thereto after such termination; provided,however, that: (a) nothing contained in this Agreement shall affect anyright Officer may have pursuant to the federal entitlement to continued grouphealth care coverage as provided in the Consolidated Omnibus BudgetReconciliation Act of 1985 (“**COBRA**”)or any successor legislation or comparable state law; (b) if Officer isentitled to receive a Severance Payment pursuant to Section 2 hereof, and ifOfficer elects under COBRA to continue to receive any benefits thereunder, theCompany shall reimburse Officer for the amount of such Officer’s COBRA paymentsfor the first six months after such termination; and (c) nothing shall alter ormodify the post termination rights of Officer under any employee benefit plan(such as the right to exercise vested options for a specified period under theStock Incentive Plan).

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# 5.             Term.  The Agreement shall commence on the date setforth above and shall terminate upon 12 months’ prior written notice to theOfficer.

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# 6.             Employment “At Will”.  Neither this Agreement nor the SeverancePayment payable hereunder shall be deemed to limit, replace or otherwise affectthe “at will” nature of

 

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# Officer’s employment withthe Company Group.  Officer’s employmentwith any member of the Company Group continues to be for an unspecified termand may be terminated at will at any time with or without cause or notice bysuch member of the Company Group or by Officer (but in the case of Officer,without the written consent of the Company Officer must terminate hisemployment with all members of the Company Group).  This employment “at-will” relationship cannot be changed absentan express intent as set forth in an individualized written employment contractsigned by both Officer and the Chief Executive Officer of the Company.

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# 7.             Mitigation.  Officer shall have no obligation to mitigatedamages based upon Officer’s termination pursuant to Section 2 of thisAgreement, and the Severance Payment shall not be reduced as a result ofOfficer obtaining other employment within nine months of Officer’stermination.

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# 8.             Counterparts.  This Agreement may be executed in any numberof counterparts, each of which shall be deemed an original, and all of which,together, shall constitute one and the same instrument.

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# 9.             Partial Invalidity.  Any provision of this Agreement which shallprove to be invalid, void or illegal shall in no way affect, impair orinvalidate any other provision hereof, and such other provisions shall remainin full force and effect.

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# 10.           Governing Law.  The terms and provisions of this Agreementshall be governed and construed pursuant to the laws of the State of Californiaexcept to the extent governed by federal law.

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# 11.           Construction.  Headings at the beginning of each sectionare solely for the convenience of the parties and are not a part of thisAgreement.  Whenever required by thecontext of this Agreement, the singular shall include the plural and the masculineshall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by oneof the parties, but rather as if both parties had prepared the same.  Unless otherwise indicated, all referencesto sections are to this Agreement.

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# 12.           Integration.  This Agreement represents the entire andintegrated agreement between the Company and Officer regarding the subjectmatter hereof and supersedes all prior negotiations, representations oragreements, either written or oral.

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# 13.           Successors and Assigns.  The terms, covenants and conditions hereincontained shall be binding upon and shall inure to the benefit of the heirs,successors and assigns of the parties hereto.

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# 14.           No Waiver.  No waiver by either party of any breach ordefault hereunder shall be deemed a waiver of any other breach or default, andno delay or forbearance by either party hereunder in enforcing any of itsrights or remedies shall be deemed a waiver of any such rights or remedies,unless such waiver is embodied in a writing signed by the authorizedrepresentative of the party to be bound.

 

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IN WITNESSWHEREOF, this Agreement has been executed effective on the day and yearhereinabove set forth.

 
| THE “COMPANY” | NATIONAL MERCANTILE BANCORP |
|-------------------------|-----------------------------|
|                    |                        |
|                    |                        |
|                    | By:                         | /s/ SCOTT A. MONTGOMERY |   |
|                    |                        | Scott A. Montgomery |
|                    |                        | Chief Executive Officer |
|                    |                        |
|                    |                        |
| “OFFICER”     | /s/ ROBERT  BARTLETT        |   |
|                    | Robert  Bartlett            |

 

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