Exhibit 10.10




 




SEVERANCE AGREEMENT




 




THIS SEVERANCE AGREEMENT

(this “Agreement”) is made and

entered into as of 11/14/2002, by and between National Mercantile Bancorp, a

California corporation (the “Company”),

and David Brown (“Officer”) with

reference to the following facts:




 




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

subsidiaries of the Company; and




 




B.            In order to induce Officer to remain employed by the

Company and/or its subsidiaries, the Company is willing to agree to pay

severance to Officer under certain circumstances.




 




NOW, THEREFORE, in

consideration of the foregoing and of the respective covenants and agreements

of the parties herein contained, it is agreed as follows:




 




1.             Definitions. For purposes of this Agreement, the

following terms when used in this Agreement shall have the meanings set forth

below:




 




1.1           “Board” shall

mean the Board of Directors of the Company.




 




1.2           “Cause” shall

mean Officer, after the date of this Agreement, (i) has been convicted by a

court of competent jurisdiction of any felony or any criminal offense involving

dishonesty, breach of trust or misappropriation, or has entered a plea of nolo contendere to such an offense; or

(ii) has committed an act of fraud, embezzlement, theft, dishonesty or any act

which would cause termination of coverage under the Company’s Banker’s Blanker

Bond as to Officer (as distinguished from termination of coverage as to the

Company as a whole); or (iii) has committed a willful violation of the Code of

Conduct of any member of the Company Group or any law, rule or regulation

governing the operation of the Company Group which the Board determines in good

faith will likely have or has had a material adverse effect on the business,

interests or reputation of the Company Group or any Member thereof, or (iv) has

willfully refused to perform the duties assigned to him; or (v) has committed a

willful and unauthorized disclosure of material confidential information

regarding the Company Group, which disclosure the Board determines in good faith

will likely have or has had a material adverse effect on the Company Group or

any member thereof.




 




1.3           “Change of Control”

shall mean any transaction or series of related transactions as a result of

which




 




(i)            the Company consummates a reorganization, merger or

consolidation, or sale or other disposition of all or substantially all of its

assets (each a “Business Combination”),

in each case unless immediately

following the consummation of such Business Combination all 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 the Exchange Act, directly or indirectly, more than one-third of the

combined voting power of the then Outstanding Voting Securities of the entity

(the “Resulting Entity”) resulting

from such Business Combination (including, without limitation, an entity which

as a result of such transaction owns the Company or all or substantially all of

the Company’s assets either directly or through one or more subsidiaries); (y)

no Person, other than the Existing Shareholder Group, beneficially owns (within

the meaning of Rule 13d-3), directly or indirectly, more than 20% of the then

outstanding combined voting power of the Outstanding Voting Securities of the

Resulting Entity, except to the extent that such Person’s beneficial ownership

of the Company immediately prior to the Business Combination exceeded such

threshold; and (z) at least one-half of the members of the board of directors

of the Resulting Entity were members of the Board at the time the Board

authorized the Company to enter into the definitive agreement providing for

such Business Combination; or




 




(ii)           any Person acquires beneficial ownership (within the

meaning of Rule 13d-3) of more than 20% of the combined voting power

(calculated as provided in Rule 13d-3 in the case of rights to acquire

securities) of the then Outstanding Voting Securities of the Company; provided,

however, that for purposes of this clause, the following acquisitions

shall not constitute a Change of Control (x) any acquisition directly from the

Company (or related trust) sponsored or maintained by the Company or any entity

controlled by the Company; or (zz) any acquisition by the Existing Shareholder

Group.




 




1.4           “Company Group”

shall mean at any time the Company and each subsidiary of the Company at such

time which is consolidated with the Company for financial reporting purposes.




 




1.5           “Disability of Officer”

shall mean if Officer is Disabled and such disability continues 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 other cause,

to perform normal and customary duties which Officer is required to perform for

the Company. In determining whether Officer is Disabled, the Company may rely

upon the written statement provide by a licensed physician acceptable to the

Company.  Officer shall allow

examination from time to time by any licensed physician selected by the Company

and agreed to by Officer.  All such

examinations will be conducted within a reasonable time period.




 




1.6           “Exchange Act”

shall mean the Securities Exchange Act of 1934, as amended, or any successor

statute.




 




1.7           “Existing Shareholder

Group” shall mean Carl R. Pohlad, members of the immediate family of

Carl R. Pohlad, and any affiliated Person of Carl R. Pohlad or any member of

his immediate family.




 




1.8           “Good Reason”

shall mean with respect to Officer (i) Officer being delegated or assigned

material duties by the Board or the Chief Executive Officer of the




 




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Company, by a communication in writing, which

are substantially inconsistent with the position and status held by Officer

immediately prior to the effective date of the Change of Control; or (ii)

Officer having had removed by the Board or the Chief Executive Officer of the

Company by a communication in writing such authority and responsibility which

is necessary to carry out the duties of the position held by Officer

immediately prior to the effective date of the Change of Control; or (iii)

Officer having a substantial and adverse alteration in the nature, status, or

prestige of Officer’s responsibilities due to the action of the Board or the

Chief Executive Officer, which is verifiable by tangible evidence; or (iv)

Officer being forced to relocate permanently to an office more than 25 miles

from the location of the Company’s executive offices as in effect immediately

prior to the effective date of the Change of Control; or (v) Officer having his

or her base compensation reduced by 10% or more from such base compensation in

effect on the date immediately preceding the effective date of the Change of

Control.  Notwithstanding the foregoing,

the loss of one or more titles, and corresponding responsibility(ies), shall

not be deemed to be “Good Reason” under (i), (ii) or (iii) above

provided that the Officer retains at least one title no less senior than

Executive Vice President and Chief Financial Officer at the Company or at least

one subsidiary bank of the Company.




 




1.9           “Outstanding Voting Securities” of any

Person means the outstanding securities of such Person entitling the holders

thereof to vote generally in the election of directors of such Person.




 




1.10         “Person”

shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange

Act, which definition shall include a “person” within the meaning of Section

13(d)(3) of the Exchange Act.




 




1.11         “Without

Cause” shall mean any termination of Officer’s employment by the

Company except for a termination (i) for Cause, (ii) as a result of the death

of Officer, or (iii) as a result of the Disability of Officer.




 




2.             Severance Payment.




 




2.1           Except as provided in Section 2.2, if (i) Good Reason

exists within one year following a Change of Control, and Officer gives written

notice to the Company within 90 days after the occurrence of such Good Reason

that Officer is terminating his or her employment with the Company for Good

Reason, or (ii) the Company terminates Officer’s employment Without Cause

within one year following a Change of Control, the Company will pay Officer in

a lump sum an amount (the “Severance Payment”) equal to nine times

Officer’s base monthly salary as in effect at the time of termination or, if

greater, immediately prior to the effective date of the Change of Control.  The Severance Payment shall be reduced by

required deductions for applicable taxes and other withholdings and for any

outstanding obligations owed by Officer to the Company that are then due and

payable, which deductions and withholdings are specifically authorized by

Officer.  The Severance Payment shall be

in lieu of any other severance payments to which Officer would be entitled

under the plans or policies of the Company and any of its subsidiaries.  The Severance Payment will be paid at the

time of termination of the Officer’s employment with the Company.  Each Change of




 




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Control and each Good Reason following a

Change of Control shall give Officer a separate right to give the notice set

forth in the first sentence of this Section 2.




 




2.2           Notwithstanding any other provision of this Agreement, the

Company shall have  no obligations to

make the Severance Payment if such Severance Payment is prohibited by

applicable federal or state law, including without limitation Part 359 of the

regulations of the Federal Deposit Insurance Corporation (12 CFR § 359 et seq.)

or any successor provision.




 




2.3           As a condition to the obligation of the Company to pay the

Severance Payment, the Officer must execute and deliver a release in form and

substance satisfactory to the Company releasing the Company Group and its

directors, officers, employees and agents (“Released Parties”) from any

and all claims the Officer may have against the Released Parties, whether such

claims are known or unknown, absolute or contingent, other than claims under

this Agreement, claims for salary and other compensation and benefits accrued

prior to termination, and rights under employee benefit plans.




 




3.             IRC Provisions. 

Notwithstanding any other provision of this Agreement, if the Company

reasonably determines that the payment of the Severance Payment to Officer

would be nondeductible by the Company for federal income tax purposes because

of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),

the Severance Payment shall be reduced to an amount which maximizes the

Severance Payment without causing any portion of the same to be nondeductible

by the Company because of Section 280G of the Code.  Any such reduction shall be applied to the Severance Payment or

the other amounts due to Officer in such manner as Officer may reasonably

specify within 30 days following notice from the Company of the need for such

reduction or, if Officer fails to so specify timely, as determined by the

Company.




 




4.             Employee Benefits.  All employee benefits provided by the Company shall cease upon

termination of Officer’s employment, whether for Good Reason, Without Cause, or

for any other reason, and the Company shall have no further responsibility with

respect thereto after such termination, provided, however, that: (a)

nothing contained in this Agreement shall affect any right Officer may have

pursuant to the federal entitlement to continued group health care coverage as

provided in the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)

or any successor legislation or comparable state law; (b) if Officer is

entitled to receive a Severance Payment pursuant to Section 2 hereof, and if

Officer elects under COBRA to continue to receive any benefits thereunder, the

Company shall reimburse Officer for the amount of such Officer’s COBRA payment

for the first six months after such termination; and (c) nothing shall alter or

modify the post termination rights of Officer under any employee benefit plan

(such as the right to exercise vested options for a specified period under the

Stock Incentive Plan).




 




5.             Term.  The

Agreement shall commence on the date set forth above and shall terminate upon

12 months prior written notice to the Officer.




 




6.             Employment “At Will”.  Neither this Agreement nor the Severance Payment payable hereunder

shall be deemed to limit, replace or otherwise affect the “at will” nature of




 




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Officer’s employment with the Company

Group.  Officer’s employment with any

member of the Company Group continues to be for an unspecified term and may be

terminated at will at any time with or without cause or notice by such member

of the Company Group or by Officer (but in the case of Officer, without the

written consent of the Company Officer must terminate his employment with all

members of the Company Group).  This

employment “at-will” relationship cannot be changed absent an express intent as

set forth in an individualized written employment contract signed by both

Officer and the Chief Executive Officer of the Company.




 




7.             Mitigation. 

Officer shall have no obligation to mitigate damages based upon

Officer’s termination pursuant to Section 2 of this Agreement, and the

Severance Payment shall not be reduced as a result of Officer obtaining other

employment within nine months of Officer’s termination.




 




8.             Counterparts. 

This Agreement may be executed in any number of counterparts, each of

which shall be deemed an original, and all of which, together, shall constitute

one and the same instrument.




 




9.             Partial Invalidity.  Any provision of this Agreement which shall prove to be invalid,

void, or illegal shall in no way affect, impair or invalidate any other

provision hereof, and such other provisions shall remain in full force and

effect.




 




10.           Governing Law. 

The terms and provisions of this Agreement shall be governed and

construed pursuant to the laws of the State of California except to the extent

governed by federal law.




 




11.           Construction. 

Headings at the beginning of each section are solely for the convenience

of the parties and are not a part of this Agreement.  Whenever required by the context of this Agreement, the singular

shall include the plural and the masculine shall include the feminine and vice

versa.  This Agreement shall not be

construed as if it had been prepared by one of the parties, but rather as if

both parties had prepared the same. 

Unless otherwise indicated, all references to sections are to this

Agreement.




 




12.           Integration. 

This Agreement represents the entire and integrated agreement between

the Company and Officer regarding the subject matter hereof and supersedes all

prior negotiations, representations or agreement, either written or oral.




 




13.           Successors and Assigns.  The terms, covenants and conditions herein contained shall be

binding upon and shall inure to the benefit of the heirs, successors and

assigns of the parties hereto.




 




14.           No Waiver. 

No waiver by either party of any breach or default hereunder shall be

deemed a waiver of any other breach or default, and no delay or forbearance by

either party hereunder in enforcing any of its rights or remedies shall be

deemed a waiver of any such rights or remedies, unless such waiver is embodied

in a writing signed by the authorized representative of the party to be bound.




 




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IN WITNESS WHEREOF, this

Agreement has been executed effective on the day and year hereinabove set

forth.




 




	

  THE “COMPANY”


  	

  NATIONAL MERCANTILE

  BANCORP


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  Scott G. Montgomery


  
	

   


  	

   


  	

   


  
	

   


  	

  Its:


  	

  President & CEO


  
	

   


  	

   


  	

   


  
	

  “OFFICER”


  	

  /s/ Scott G. Montgomery


  





 




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