Exhibit 10.5


 


EMPLOYMENT AGREEMENT


 


This
Agreement is made and is effective as of                      ,
2003, by and between Pacific City Bank (“Bank”) and Jung C. Chang (“Executive”).


 


WHEREAS,
Bank desires to employ Executive in the capacity of President and Chief
Executive Officer, and Executive’s background, expertise and efforts are
expected to contribute to the success and financial strength of the Bank; and


 


WHEREAS,
the Bank wishes to assure itself of the opportunity to benefit from Executive’s
services for the period provided in this Agreement, and Executive wishes to
serve in the employ of the Bank on a full-time basis solely in accordance with
the terms hereof for such purposes; and


 


WHEREAS,
the Board of Directors of the Bank (“Board”) has determined that the best
interests of the Bank would be served by Executive’s employment with the Bank
under the terms of this Agreement;


 


NOW,
THEREFORE, in order to effect the foregoing, the parties hereto wish to enter
into an employment agreement on the terms and conditions set forth below.
Accordingly, in consideration of the premises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:


 


1.                                      Definitions.


 


(a)                                  “Agreement”
means this employment agreement and any amendments hereto complying with Section 13(a) hereof.


 


(b)                                 “Board”
means the Board of Directors of the Bank unless the context otherwise requires.


 


(c)                                  “Cause”
means:


 


(i)                                     Executive’s personal dishonesty,
incompetence or willful misconduct;


 


(ii)                                  Executive commits an act or
acts or an omission to act which constitutes: (a) a willful breach of duty
in the course of Executive’s employment; (b) a habitual neglect of duty; (c) a
willful violation of any applicable banking law or regulation; or (d) a
willful violation of any policy, procedure, practice, method of operation or
specific mode of conduct established by the Board or as set forth in the Bank’s
Employee Manual, if any;


 


1

















 


(iii)                               Executive engages in
activity which, in the opinion of the Board, could materially adversely affect
Bank’s reputation in the community or which evidences the lack of Executive’s
fitness or ability to perform Executive’s duties as determined by the Board of
Directors, in good faith; or


 


(iv)                              Executive
commits any act or acts or an omission to act which


would cause
termination of coverage under the Bank’s Bankers Blanket Bond as to Executive
or as to Bank as a whole or any act, which would give rise to a colorable claim
by the Bank under its Bankers Blanket Bond as determined by the Board Directors
in good faith.


 


(d)                                 “Change in Control” shall mean a
change, in control of the Bank of a nature that would be required to be the
subject of prior approval by (A) the Federal Reserve Board pursuant to the
Bank Holding Bank Act of 1956, as amended, (B) the Federal Deposit
Insurance Corporation under the Change In Bank Control Act, (C) the
appropriate federal bank regulatory agency under the Bank Merger Act or (D) the
California Department of Financial Institutions pursuant to provisions of the
California Financial Code; provided, that without limitation, and without
consideration of regulatory exemptions from prior approval, such a Change in
Control  will be deemed to have occurred
if and when any of the following occur: (i) there is a transfer,
voluntarily or by hostile takeover or proxy contest, operation of law or
otherwise, of control of the Bank, (ii) individuals, who were members of
the Board of Directors of the Bank immediately prior to a meeting of the
shareholders of the Bank which meeting involved a contest for the election of
directors, do not constitute a majority of the Board of Directors of the Bank
following such election or meeting, (iii) an acquisition, directly or
indirectly, of more than 25% of the outstanding shares of any class of voting
securities of the Bank by any Person, (iv) a merger (in which the Bank is
not the surviving entity), consolidation or sale of all, or substantially all,
of the assets of the Bank, or (v) there is a change, during any period of
two consecutive years, of a majority of the Board of Directors of the Bank as
constituted as of the beginning of such period, unless the election of each
director who is not a director at the beginning of such period was approved by
a vote of at least two-thirds of the directors then in office who were
directors at the beginning of such period.   
For purposes of this definition, the term “Person” shall mean and
include any individual, corporation, partnership, group, association or other “person”,
as such term is used in Section 14(d) of the Securities Exchange Act
of 1934, other than the Bank or any employee benefit plan(s) sponsored by
the Bank.


 


(e)                                  “Code”
shall mean the Internal Revenue Code, as amended.


 


(f)                                    “Disability”
means physical or mental illness resulting in Executive’s absence on a
full-time basis from Executive’s duties with the Bank for 90 calendar days,
subject 


 


2

















 


to the
procedure described in Section 7(a).


 


(g)                                 “Expiration”
means the termination of this Agreement (including Executive’s employment
hereunder) and of any further obligations of the parties (except as specified
in this Agreement) upon completion of the Term.


 


(h)                                 “Good Reason” Termination by
Executive of Executive’s employment for “Good Reason” shall mean termination
based on:


 


(i)                                     an adverse
change in Executive’s status or position(s) as an executive officer of the
Bank as in effect immediately prior to the Change in Control, including,
without limitation, any adverse change in Executive’s status or position as a
result of a material diminution in Executive’s duties or responsibilities
(other than, if applicable, any such change directly attributable to the fact
that the Bank is no longer publicly owned) or the assignment to Executive of
any duties or responsibilities which, in Executive’s reasonable judgment, are
inconsistent with such status or position(s), or any removal of Executive from
or any failure to reappoint or reelect Executive to such position(s) (except
in connection with the termination of Executive’s employment for Cause,
Disability or Retirement or as a result of Executive’s death or by Executive
other than for Good Reason);


 


(ii)                                  a reduction by
the Bank in Executive’s base salary as in effect immediately prior to the
Change in Control;


 


(iii)                               the failure by
the Bank to continue in effect any Plan (as hereinafter defined) in which
Executive is participating at the time of the Change in Control  of the Bank (or Plans providing Executive
with at least substantially similar benefits) other than as a result of the
normal expiration of any such Plan in accordance with its terms as in effect at
the time of the Change in Control, or the taking of any action, or the failure
to act, by the Bank which would adversely affect Executive’s continued
participation in any of such Plans on at least as favorable a basis to
Executive as is the case on the date of the Change in Control  or which would materially reduce Executive’s
benefits in the future under any of such Plans or deprive Executive of any
material benefit under any Plan enjoyed by Executive at the time of the Change
in Control;


 


(iv)                              the failure by
the Bank to provide and credit Executive with the number of paid vacation days
to which Executive is then entitled in accordance with the Bank’s normal
vacation policy as in effect immediately prior to the Change in Control;


 


(v)                                 the Bank’s
requiring Executive to be based at an office that is greater than 25 miles from
where Executive’s office is located immediately prior


 


3

















 


to the Change in Control  except for required travel on the Bank’s
business to an extent substantially consistent with the business travel
obligations which Executive undertook on behalf of the Bank prior to the Change
in Control; or


 


(vi)                              the failure by
the Bank to obtain from any successor 
the assent to this Agreement contemplated by Section 13(g) hereof.


 


For purposes of this Agreement, “Plan” shall mean any compensation plan
such as an incentive, stock option or restricted stock plan or any employee
benefit plan such as a thrift, pension, profit sharing, medical, disability,
accident, life insurance plan or a relocation plan or policy or any other plan,
program or policy of the Bank intended to benefit employees.


 


(i)                                     “Person”
means an individual, a group acting in concert, a corporation, a partnership,
an association, a joint stock company, a trust, any unincorporated organization,
a government or political subdivision thereof, or any other entity whatsoever.


 


(j)                                     “Term”
means the term of this Agreement as provided in Section 4.


 


(k)                                  “Termination”
or “Terminate(d)” means the termination of Executive’s employment hereunder
for any of the following reasons unless the context indicates otherwise:


 


(i)                                     Retirement by
Executive;


 


(ii)                                  Death of
Executive;


 


(iii)                               Disability;


 


(iv)                              Expiration;


 


(v)                                 Termination
Without Cause; and


 


(vi)                              Termination for
Cause.


 


(l)                                     “Termination Without Cause”
or “Terminate(d) Without Cause” means the cessation of
Executive’s employment hereunder for any reason except:


 


(i)                                     A resignation
by Executive;


 


(ii)                                  Termination for
Cause;


 


4

















 


(iii)                               Retirement;


 


(iv)                              Disability;


 


(v)                                 Death;


 


(vi)                              Expiration; or


 


(vii)                           issuance
of an order referred to in Section 7(f).


 


2.                                      Employment. The Bank hereby agrees to employ the Executive,
and the Executive hereby agrees to serve the Bank, for the period stated in Section 4
hereof and upon the terms and conditions set forth herein.


 


3.                                      Position and Responsibilities. The Executive shall serve
as President and Chief Executive Officer of the Bank and shall have such
responsibilities, duties and authority as are generally associated with such
positions and as may from time to time be assigned to the Executive by the  Board that are consistent with such
responsibilities, duties and authority. During the Term of this Agreement, the
Executive shall devote all his time, attention, skill and efforts during normal
business hours to the business and affairs of the Bank.


 


4.                                      Term of Agreement. Subject to the
terms and provisions of this Agreement, this Agreement and the period of
Executive’s employment shall be deemed to have commenced as of                           ,
2003 and shall continue for an initial term of five (5) years thereafter
until 12:00 midnight                         ,
2008, unless sooner terminated.  If the
Bank does not intend to retain Executive as an employee after the Expiration of
the Term, the Bank shall give Executive not less than 90 days prior to the
expiration of the Term written notice of such decision and upon expiration of
the Term after such notice, Executive’s employment shall cease without further
liability of the parties to each other. Executive’s employment shall also
terminate, and the Term of this Agreement will expire, upon Executive’s
resignation, retirement, death or Disability, or upon Executive’s Termination
for Cause.


 


5.                                      Duties. During the Term hereof, Executive shall
devote exclusively all of his business time, attention, skill and efforts to
the faithful performance of the business of the Bank to the fullest extent
necessary to properly discharge his duties and responsibilities hereunder and
consistent with the highest and best standards of the banking industry and in
compliance with all applicable laws, regulations and rules as well as the
Bank’s Articles of Incorporation and Bylaws. 
Further, with the approval of the Board, from time to time, Executive
may serve, or continue to serve, on the boards of directors of, and hold any
other offices or positions in, companies or charitable, political or civic
organizations, which, in such Board’s judgment, will not present any material
conflict of interest with the Bank and will not unfavorably affect the
performance of Executive’s duties pursuant to this Agreement.


 


5

















 


6.                                      Salary, Bonus and Related Matters.


 


(a)                                  The Bank shall
pay to the Executive an annual base salary of One Hundred Fifty Five Thousand
Dollars  ($155,000)   which shall be adjusted pursuant to the  provisions of Subsection (b), below, after
the first year of the Term.  Executive’s
salary shall be payable at regular intervals in accordance with the Bank’s
normal payroll practices now or hereafter in effect.


 


(b)                                 Executive’s
salary shall be reviewed at least annually by the Board or a committee
designated by the Board, and shall be adjusted based upon Executive’s job
performance and the Bank’s financial condition and performance; provided,
however, that in no event shall Executive’s annual salary be less than the
amount specified by subsection (a), above, and such adjustments, if any, shall
be in the sole discretion of the Board.


 


(c)                                  The
Bank shall pay to Executive on the six-month anniversary of the Bank opening
for business a one-time performance bonus of $60,000 for Executive’s efforts in
opening the Bank.


 


The Bank shall
pay to the Executive an annual bonus equal to 5% of the Bank’s pre-tax net profit
for the preceding year.   Such annual
bonus shall be paid within 60 days of the year-end upon which the bonus payment
is based.  For purposes of such bonus,
pre-tax net profits shall be determined in accordance with generally accepted
accounting principles.


 


Executive may,
in the sole discretion of the Board  also
receive a discretionary bonus based on individual merit and performance.  The amount of the discretionary bonus, if
any,  shall be determined by the Board.


 


(d)                                 During
the period of the Executive’s employment hereunder, the Executive shall be
entitled to receive prompt reimbursement for all reasonable and customary
expenses incurred by the Executive in performing services hereunder in
accordance with the general policies and procedures established by the
Bank.  Executive shall provide the Bank
with detailed records (sufficient to document compliance with the Bank’s
policies and comply with the record-keeping requirements of state and federal
taxing authorities) of the nature and purpose of each expense submitted for
reimbursement or incurred by credit card. If the Board determines that any
expense claimed or incurred by Executive is not a proper business expense, or
if any such expense cannot properly be claimed as a deduction on the Bank’s
federal income tax return, Executive shall reimburse the Bank for the full
amount thereof.


 


(e)                                  During
the period of the Executive’s employment hereunder, the Executive shall be
entitled to participate in (A) all employee benefit plans or arrangements
of the Bank on the same basis as other employees of the Bank, including,
without


 


6

















 


limitation,
plans or arrangements providing medical insurance, dental insurance, life
insurance, disability insurance, sick leave, or retirement and (B) all
retirement and disability benefit plans or programs which may be subsequently
adopted, including matching funds contributions by the Bank (in an amount to be
determined in the sole discretion of the Board) if a 401k plan is ever established
by the Bank.


 


(f)                                    Executive
shall be entitled to two weeks of paid vacation during the first year of the
Term and three weeks of paid vacation during the second through fifth years of
the Term.  Executive shall comply with
Bank’s standard employee policies and practices in scheduling and taking
vacations.


 


(g)                                 Subject
to receipt of shareholder approval of a stock option plan, Executive shall be
granted an option to purchase  an amount
of  shares of the Bank’s common stock
equal to 4.5% of the shares sold by the Bank in its initial capital offering at
an exercise price of $10.00.  The option
will have a duration of ten years  with
1/5 of such options becoming vested immediately as of the grant of the option
with an additional 1/5 of the options  becoming
vested on the next four anniversary dates, respectively, of the grant of the
option.  The option will provide that, in
the event Executive ceases to be an executive officer of the Bank but remains
on the Board of Directors, the option will not terminate.


 


(h)                                 Bank
shall pay all expenses (including the lease payments, insurance as well as
payments for maintenance and related costs) incurred in a timely manner in
connection with Executive’s lease of an automobile in Executive’s discretion
subject to the Board’s approval that the automobile is customary in the banking
industry for an executive with Executive’s job title, duties, and needs to
perform Executive’s duties and conduct Bank business.


 


7.                                      Termination.


 


(a)                                  Executive’s
employment hereunder shall cease at any time by Executive’s resignation, or by
Executive’s retirement, death or Disability. Disability shall be deemed to have
occurred only after the following procedure has been satisfied: If within 30
days after a written notice of proposed Termination for Disability is given to
Executive by the Bank, Executive has not returned to the full-time performance
of his duties, the Bank may end Executive’s employment by giving written notice
of Termination for Disability. Such notice may be given by the Bank following
Executive’s absence from Executive’s duties by reason of physical or mental
disability for sixty (60) calendar days during any ninety (90) calendar day
period.


 


(b)                                 Executive’s
employment shall cease upon a good faith finding of Cause by the Board.


 


7

















 


(c)                                  Executive’s
employment may be terminated Without Cause for any reason, subject to the
payment of all amounts required by Section 8 hereof.


 


(d)                                 Executive’s
employment shall cease upon the expiration of the Term of this Agreement as
provided in Section 4 hereof.


 


(e)                                  If
the Executive is suspended and/or temporarily prohibited from participating in
the conduct of the Bank’s affairs by a notice served under Sections 8(e) or
(g) of the Federal Deposit Insurance Act or similar statute, rule or
regulation, the Bank’s obligations under this Agreement shall be suspended as
of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed,
the Bank shall, (i) pay the Executive all or part of the compensation
withheld while its obligations under this Agreement were suspended and (ii) reinstate
(in whole or in part) any of its obligations which were suspended.


 


(f)                                    If
the Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Sections 8(e) or
(g) of the Federal Deposit Insurance Act or similar statute, rule or
regulation, all obligations of the Bank under this Agreement shall terminate as
of the effective date of the order without any liability of the Bank to
Executive or any other Person.


 


8.                                      Payments
to Executive Upon Termination.


 


(a)                                  In
the event of Termination of this Agreement due to Executive’s death, Disability
or retirement, Executive or Executive’s spouse and/or estate shall be entitled
to all benefits generally available to Bank employees, or their spouses and/or
estates, as of the date of such death, Disability or retirement, without
reduction.


 


(b)                                 In
the event of Executive’s resignation or upon Expiration, the Bank shall have no
further obligations to Executive under this Agreement or otherwise, except as
may be expressly required by law.


 


(c)                                  In
the event Executive is Terminated for Cause, the Bank shall have no further
obligations to Executive under this Agreement or otherwise, except as may be
expressly required by law.


 


(d)                                 Upon
the occurrence of a Termination Without Cause, as damages for breach of this
Agreement, the Bank shall continue to provide Executive his base salary then in
effect, upon such terms and at such times as described herein, for a period
equal to the remaining portion of the Term.


 


(e)                                  Subject to Section 8(h) hereof,
if, within twelve (12) months after a Change in


 


8

















 


Control  of the Bank shall have
occurred, Executive’s employment by the Bank shall be terminated (a) by
the Bank other than for Cause, Disability or retirement or (b) by
Executive for Good Reason, then the Bank shall pay to Executive, no later than
the fifth day following the date of termination:


 


(I)                                    Executive’s
salary through the date of termination at the rate in effect just prior to the
time a notice of termination is given plus any benefits or awards (including
both the cash and stock components) which pursuant to the terms of any Plans
have been earned or become payable, but which have not yet been paid to
Executive (including amounts which previously had been deferred at Executive’s
request); and


 


(II)                                as severance
pay and in lieu of any further salary for periods subsequent to the date of
termination, an amount in cash equal to two (2) times Executive’s annual
salary and bonus, such salary to be at the rate of salary in effect immediately
prior to the date of termination (or, if greater, immediately prior to the
Change in Control  of the Bank) and such
bonus to be equal to the total bonus paid to Executive during the twelve-month
period immediately preceding the date of termination (or, if greater, during
the twelve-month period immediately preceding the Change in Control  of the Bank).


 


(f)                                    All
payments provided in Section 8 shall be paid in cash from the general
funds of the Bank, and no special or separate fund need be established and no
other segregation of assets need be made to assure payment.


 


(g)                                 The
Bank and Executive agree that the payments being made under this Agreement
represent reasonable compensation for services and that neither the Bank nor
Executive will file any returns or reports which take a contrary position.


 


(h)                                 Notwithstanding
anything in the foregoing to the contrary, if the payments made to Executive
following a Termination Without Cause or any of the other payments provided for
in this Agreement, together with any other payments which Executive has the
right to receive from the Bank would constitute a “parachute payment” (as
defined in Section 280G of the Code), the payments pursuant to this
Agreement shall be reduced to the largest amount as will result in no portion
of such payments being subject to the excise tax imposed by Section 4999
of the Code; provided, however, that the determination as to whether any
reduction in the payments under this Agreement pursuant to this provision is
necessary shall be made in good faith by the Bank’s independent auditors or if
such firm is no longer providing tax services to Bank to such other tax advisor
as shall be mutually acceptable to Bank and Executive, and such determination
shall be conclusive and binding on the Bank and Executive with respect to the
treatment of the payment for tax reporting purposes.


 


9

















 


(i)                                     The
receipt of the amounts described in this Section 8, and attorneys’ fees as
set forth in Section 12, if any, shall constitute Executive’s sole remedy
for breach of this Agreement against the Bank and its officers, directors,
employees and agents.


 


9.                                      Confidentiality and Trade Secrets.


 


(a)                                  During
the Term, Executive will have access to and become acquainted with what
Executive and Bank acknowledge are trade secrets, to wit, knowledge or data
concerning Bank, including its operations and business, and the identity of
customers of Bank, including knowledge of their financial condition, their
financial needs, as well as their methods of doing business.  Executive shall not disclose any of the
aforesaid trade secrets, directly or indirectly, or use them in any way, either
during the Term or for a period of twenty four (24) months after the
termination of the Term of this Agreement, except as required in the course of
Executive’s employment with Bank.


 


(b)                                 Executive
expressly agrees that all manuals, documents, files, reports, studies,
instruments, software, computer programs or similarly generated electronic
materials or other materials used and/or developed by Executive during the Term
are solely the property of Bank, and that Executive has no right, title or
interest therein.  Upon termination of
the Term of this Agreement, Executive or Executive’s representative shall
promptly deliver possession of all of said property to Bank in good condition.


 


(c)                                  During
the period of his employment hereunder and for a period of two years following
the cessation of such employment (irrespective of the reason therefore),
Executive shall not, except as required by any court, supervisory authority or
administrative agency, without the written consent of the Board or a person
authorized thereby, disclose to any person, other than an employee of the Bank
or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of his duties as an employee
of the Bank, any confidential information obtained by him while in the employ
of the Bank; provided, however, that confidential information shall not include
any information known generally to the public (other than as a result of an
unauthorized disclosure by the Executive).


 


10.                               Waivers not to be Continued. Any waiver by a
party of any breach of this Agreement by the other party shall not be construed
as a continuing waiver or as a consent to any subsequent breach by the other
party.


 


11.                               Notices. All notices, requests,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand or mailed, certified or
registered mail, with postage prepaid, to the following addresses or to such
other


 


10

















 


address as either party may designate by like notice.


 


A.                                   If to the Bank,
to:


 


Pacific City Bank


3701 Wilshire Boulevard, Suite 100


Los Angeles, California 90010


Attn:  Chairman of the Board


 


with a copy to:


 


John F. Stuart, Esq.


REITNER & STUART


1319 Marsh Street


San Luis Obispo, California 93401


Facsimile: 805/545-8599


 


B.                                     If to
Executive, to:


 


Mr. Jung C. Chang


2300 Maple Ave., # 205


Torrance, CA 90503


and to such other or additional person or persons as either party shall
have designated to the other party in writing by like notice.


 


12.                               Arbitration. Any dispute or
controversy arising or in connection with this Agreement shall, upon written
request of one party to the other, be submitted to and settled exclusively by
arbitration in the State of California and be governed by the California
Arbitration Act as set forth in the California Code of Civil Procedure.  Judgment may be entered on the arbitrator’s award
in any court of competent jurisdiction. The cost of such arbitration, including
reasonable attorney’s fees, shall be borne by the losing party or in such
proportions as the arbitrator(s) shall decide. Arbitration shall be the
exclusive remedy of Executive and the Company and the award of the arbitrator(s) shall
be final and binding upon the parties. All reasonable costs, including
reasonable attorney’s fees, incurred in enforcing an arbitration award in
court, or of seeking a court order to compel arbitration, shall be borne by the
losing party in such proceedings.


 


13.                               General Provisions.


 


(a)                                  This Agreement
constitutes the entire agreement by the parties with respect to the subject
matter hereof, and supersedes and replaces all prior agreements among or
between the parties, unless otherwise provided herein. No amendment, waiver or
termination of any of the provisions hereof shall be effective unless in
writing and signed by the party against whom it is sought to be enforced. Any
written


 


11

















 


amendment, waiver, or termination hereof
executed by the Bank and Executive shall be binding upon them and upon all
other Persons, without the necessity of securing the consent of any other
Person, and no Person shall be deemed to be a third-party beneficiary under
this Agreement.


 


(b)                                 This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
Agreement.


 


(c)                                  Except as otherwise
expressly set forth herein, no failure on the part of any party hereto to
exercise and no delay in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.


 


(d)                                 The headings of the
Sections of this Agreement have been inserted for convenience of reference only
and shall in no way restrict or modify any of the terms or provisions hereof.


 


(e)                                  If for any reason any
provision of this Agreement is held invalid or unenforceable, such invalidity
or unenforceability shall not affect the validity or enforceability of any
other provision of this Agreement. If any provision of this Agreement shall be
held invalid or unenforceable in part, such invalidity or unenforceability
shall in no way effect the rest of such provision not held so invalid, and the
rest of such provision, together with all other provisions of this Agreement,
shall to the full extent consistent with law continue in full force and effect.


 


(f)                                    This Agreement
shall be governed and construed and the legal relationships of the parties
determined in accordance with the laws of the State of California applicable to
contracts executed and to be performed solely in the State of California.


 


(g)                                 The Bank shall require
any successor in interest (whether direct or indirect or as a result of
purchase, merger, consolidation, change in control or otherwise) to all or
substantially all of the business and/or assets of the Bank to expressly assume
and agree to perform the obligations under this Agreement in the same manner
and to the same extent that the Bank would be required to perform it if no such
succession had taken place.


 


12

















 


(h)                                 Executive acknowledges
that he has been encouraged to consult with legal counsel of Executive’s
choosing concerning the terms of this Agreement prior to executing this
Agreement. Executive acknowledges that this Agreement has been prepared by
Reitner & Stuart, which has served as counsel to the Bank in this
matter and not as counsel to Executive. 
Any failure by Executive to consult with competent counsel prior to executing
this Agreement shall not be a basis for rescinding or otherwise avoiding the
binding effect of this Agreement. The parties acknowledge that they are
entering into this Agreement freely and voluntarily, with full understanding of
the terms of this Agreement. Interpretation of the terms and provisions of this
Agreement shall not be construed for or against either party on the basis of
the identity of the party who drafted the terms or provisions in question.


 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.


 


	
  ATTEST:

  	
   

  	
  PACIFIC
  CITY BANK

  

  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Chairman
  of the Board

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  Jung
  C. Chang

  



 


13














 


FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT


BY AND BETWEEN


PACIFIC CITY BANK


AND


JUNG CHAN CHANG


DATED: SEPTEMBER
18, 2003


 


This First Amendment to the Employment Agreement
(hereinafter the “Amendment”) is effective as of October 30, 2007, by and between PACIFIC CITY BANK, a
California banking corporation (hereinafter “BANK”) and JUNG CHAN CHANG
(hereinafter “EXECUTIVE”).  BANK and
EXECUTIVE shall hereinafter be collectively referred to as the “PARTIES”.


 


RECITALS


 


A.           On or about September 18, 2003, BANK and EXECUTIVE
entered into an Employment Agreement whereby Bank agreed to employ EXECUTIVE in
the capacity of President and Chief Executive Office of the BANK for the
initial term of five (5) years, beginning September 18, 2003 and
terminating on 12:00 midnight September 17, 2008, unless sooner terminated
in accordance with the terms of the Employment Agreement;


 


B.             The Board of Directors of the BANK (“Board”) has determined
that the best interest of the BANK would be served by extending the remaining
term of the EXECUTIVE’s Employment Agreement by additional two (2) years
from the initial five (5) years term;


 


C.             PARTIES now desire to amend the Employment Agreement which
would extend the employment term of the EXECUTIVE;


 


D.            Pursuant to Paragraph 13(a) of the Employment Agreement,
PARTIES hereby enter into this Amendment to the Employment Agreement to
effectuate the extension of the EXECUTIVE’s employment term;


 


E.              PARTIES acknowledge and agree that they are both entering
into this Amendment voluntarily after receiving independent legal advice from
their respective attorneys and with full understanding of the legal
ramifications of entering into this Amendment.


 


AMENDMENT


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the PARTIES
hereby agree to amend the Employment Agreement as follows:


 


1.               Extension of Employment Term. 
PARTIES hereby acknowledge and agree that the period of EXECUTIVE’s
employment with the BANK shall be extended for a period of two (2) additional
years from the expiration of the initial five (5) years term, to wit,
12:00 midnight September 17, 2008. 
Pursuant to this Amendment, EXECUTIVE’s employment shall continue until
12:00 midnight September 17, 2010,
unless sooner terminated under the terms and conditions set forth in the
original Employment 


 


1

















 


Agreement.


 


2.               Authorization.  PARTIES
hereby acknowledge, agree and warrant that they each have obtained or effected
all authorizations necessary for the valid execution, delivery and performance
of this Amendment, and that all such authorizations are in full force and
effect.


 


3.               Continuing Effectiveness. 
Except solely to the extent specifically herein amended (which is
limited to the extension of the term of the employment for additional 2 years),
all the terms, conditions and covenants contained in the original Employment
Agreement, effective September 18, 2003, shall continue unmodified and in
full force and effect.


 


4.               Choice of Law/Venue. 
This Amendment will be construed, interpreted and governed by the laws
of the State of California and shall be deemed to have been executed and
delivered within the Los Angeles County, State of California.  The jurisdiction for any dispute(s) concerning
this Amendment shall be the Los Angeles County Superior Court, using California
law.


 


5.               Attorney’s Fees.  In
the event of a lawsuit between the PARTIES hereto arising out of or relating to
this Amendment, or their respective rights and obligations hereunder, the
substantially prevailing party shall be entitled to recover reasonable
attorneys’ fees, costs and expenses actually incurred in connection with such
litigation as determined by the court in that proceeding.


 


6.               Entire Agreement.  This
Amendment contains the entire agreement between the PARTIES with regard to the
matters set forth herein and shall supersede all prior and contemporaneous oral
and written correspondences and discussions, if any, related to the matters set
forth in this Amendment.  This Amendment
may only be amended by an agreement, in writing, signed by both PARTIES.


 


IN WITNESS WHEREOF, the PARTIES hereto have executed this Amendment effective as
of the date first written above and below.


 


 


	
  Dated:
  October 30, 2007

  	
  PACIFIC CITY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman
  of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:
  October 30, 2007

  	
  THE EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Jung
  Chan Chang, CEO

  



 


2














 


SECOND
AMENDMENT TO EMPLOYMENT AGREEMENT


 


This Second Amendment to the Amended and
Restated Employment Agreement (the “Second Amendment”) is made and is effective
as of July 23, 2009, by and between Pacific City Bank (“Bank”) and Jung
Chan Chang (“Executive”).


 


RECITALS


 


This Second Amendment is
made with regard to the following facts:


 


A.                             Executive is
currently employed by the Bank pursuant to that certain Employment Agreement
dated as of September 18, 2003 by and between the Bank and the Executive,
first amended pursuant to that certain First Amendment to Employment Agreement,
entered into as of October 30, 2007 (collectively, the “Agreement”).


 


TERMS


 


In
consideration of the premises and the respective covenants and agreements of
the parties herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:


 


1.                                       The third (3rd) paragraph of Section 6(c) of
the Agreement is amended as follows:


 


(c)                                                                    Executive may, in the sole discretion of the Board also receive a
discretionary bonus based on individual merit and performance.  The amount of the discretionary bonus, if
any, shall be determined by the Board.  If
the Company is subject to the executive compensation limitations under the
United States Treasury Department’s Troubled Asset Relief Program (“TARP”) the
payment of any such discretionary bonus shall be subject to those restrictions
set forth under TARP.


 


2.                                       The fourth (4th) paragraph of Section 6(c) of
the Agreement is added to read as follows:


 


If the Company is subject to the executive
compensation limitations under the TARP at the time Executive receives a bonus
under this section, any and all such bonuses and/or portions thereof shall be
subject to forfeiture and/or repayment by the Executive to the Company if the
payment of such bonus was based on materially inaccurate financial statements
or any other materially inaccurate performance metric criteria.


 


1

















 


3.                                       Section 8(h) of
the Agreement is hereby removed in its entirety and amended to read as follows:


 


(h)                               Reduction of Payment; IRC Section 409A
Compliance.


 


(i)                                  Notwithstanding anything in the
foregoing to the contrary, if the payments made to Executive following a
Termination Without Cause, Change in Control or any of the other payments
provided for in this Agreement, together with any other payments which
Executive has the right to receive from the Bank would constitute a “parachute
payment” (as defined in Section 280G of the Code) the payments pursuant to
this Agreement shall be reduced to the largest amount as will result in no
portion of such payments being subject to the excise tax imposed by Section 4999
of the Code; provided, however, that the determination as to whether any
reduction in the payments under this Agreement pursuant to this proviso is
necessary shall be made in good faith by the Bank’s independent auditors or if
such firm is no longer providing tax services to Bank to such other tax advisor
as shall be mutually acceptable to Bank and Executive, and such determination
shall be conclusive and binding on the Bank and Executive with respect to the
treatment of the payment for tax reporting purposes.


 


(ii)                              If the Company is subject to the
executive compensation limitations under TARP at the time the Executive receives
payment(s) under sections 8(d) and/or 8(e) and any such
payment(s), together with any other payments which Executive has the right to
receive from the Company, exceed the limits allowed for Executive established
under TARP, then the aggregate payments pursuant to this Agreement, and any
other agreement with Executive, shall be reduced to the largest amount as will
result in no portion of such payments violating the executive compensation
limitations under TARP.


 


(iii)                          Notwithstanding any provision existing
in this Agreement or any amendment thereto, it is the intent of the Bank and
Executive that any payment or benefit provided pursuant to this Agreement shall
be made and paid in a manner, at a time and in a form which complies with the
applicable requirements of IRC Section 409A, in order to avoid any
unfavorable tax consequences resulting from any such failure to comply.
Furthermore, for the purposes of this Agreement, IRC Section 409A shall be
read to include any related or relevant IRS Notices (including but not limited
to Notice 2007-86).


 


(iv)                            In the event of any ambiguity in
terms, or in the event further clarification of any term or provision is
necessary, all interpretations and payouts of benefits based thereon shall be
in accordance with IRC 409A and any related notices or guidance thereon.


 


2

















 


4.                                       Capitalized
terms used herein and not otherwise defined shall have the same meaning as set
forth in the Agreement.


 


5.                                       This Second
Amendment may be entered into in one or more counterparts, all of which shall
be considered one and the same instrument, and it shall become effective when
one or more counterparts have been signed by each of the Parties and delivered
to the other Parties, it being understood that all Parties need not sign the
same counterpart.


 


6.                                       Except as
herein amended, the Agreement shall remain in full force and effect.


 


7.                                       This Second
Amendment shall be governed by and construed in accordance with the laws of the
State of California.


 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.


 


 


	
  ATTEST:

  	
   

  	
  PACIFIC CITY FINANCIAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Its: 

  	
   

  
	
   

  	
   

  	
  Print name: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  Jung Chan Chang

  
					



 


3