Exhibit 10.3


 


EMPLOYMENT
AGREEMENT


 


This Agreement
is made and entered into on December 5, 2008, by and among Manhattan
Bancorp (“MB”), Bank of Manhattan,
N.A. (the “Bank”) and Dean
Fletcher (“Executive”) for the
purposes set forth hereinafter (“Agreement”).


 


W I T N E S S E
T H


 


WHEREAS, MB is
a California corporation and bank holding company registered under the Bank
Holding Company Act of 1956, as amended, subject to the supervision and
regulation of the Board of Governors of the Federal Reserve System (“FRB”);


 


WHEREAS, MB is
the parent holding company for the Bank, which is a national banking
association and wholly-owned subsidiary of MB, subject to the supervision and
regulation of the Office of the Comptroller of the Currency (“OCC”);


 


WHEREAS,
Executive is currently Executive Vice President and Chief  Financial Officer of the Bank pursuant to an
Employment Agreement dated August 15, 2007 between the Bank and Executive
(the “Prior Agreement”);


 


WHEREAS,
Executive also serves as Executive Vice President and Chief Financial Officer
of MB; and


 


WHEREAS, it is
the intention of the parties to enter into an employment agreement for the
purposes of assuring the continued services of Executive as Executive Vice
President and Chief Financial Officer of the Bank and as  Executive Vice President and Chief Financial
Officer of MB.


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, MB, the Bank and Executive agree as follows:


 


A.            TERM OF EMPLOYMENT


 


The term of
this Agreement (“Term”) shall
commence August 15, 2007, the date the Bank opened for business (the “Effective Date”), and end three (3) years
thereafter, subject, however, to prior termination of this Agreement as
hereinafter provided.  Where used herein,
“Term” shall refer to the entire period of employment of Executive by the Bank
hereunder, whether for the period provided above, or whether terminated earlier
as hereinafter provided.  The Prior
Agreement is hereby terminated and replaced by this Agreement.  This does not replace or impair the Stock
Option Agreements between MB and Executive dated August 10, 2007, September 27,
2007 and November 20, 2008 (the “Stock
Option Agreements”), which shall remain in full force and effect.


 


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B.            DUTIES OF EXECUTIVE


 


1.             Duties.  Executive shall perform the duties of
Executive Vice President and Chief Financial Officer of the Bank and MB,
reporting directly to the President  and
Chief Executive Officer  of the Bank and
MB, and subject, at all times, to the powers vested by law in the Board (the “Board”) of the Bank and MB and their respective
shareholders.   During the Term,
Executive shall perform the services herein contemplated to be performed by
Executive faithfully, diligently and to the best of Executive’s ability,
consistent with the highest and best standards of the banking industry and in
compliance with all applicable laws and the Bank’s and MB’s Articles of
Association or Incorporation, Bylaws and internal written policies.


 


2.             Conflicts
of Interest.  Except as
permitted by the prior written consent of the Board of MB or Bank, Executive
shall devote Executive’s entire productive time, ability and attention to the
business of the Bank and MB during the Term and Executive shall not directly or
indirectly render any services of a business, commercial or professional
nature, to any other person, firm or corporation, whether for compensation or
otherwise, which are in conflict with the Bank’s or MB’s interests.  Notwithstanding the foregoing, Executive may
make investments of a passive nature in any business or venture, provided that
such business or venture is not in competition, directly or indirectly, in any
manner with the Bank or MB.


 


C.            COMPENSATION


 


1.             Salary.  For Executive’s services hereunder, the Bank
or MB shall pay or cause to be paid as annual base salary (the “Base Salary”) to Executive not less than
One Hundred Sixty Five Thousand Dollars ($165,000) for the first year of the
Term, with annual increases in the discretion of the Boards or the Bank’s and
MB’s Compensation Committees.  Base
Salary shall be payable in equal installments in conformity with the Bank’s
normal payroll period.


 


2.             Bonuses.
Any bonuses shall be as determined by the Boards of the Bank and MB, in their
sole discretion.


 


D.            EXECUTIVE BENEFITS


 


1.             Vacation.  Executive shall be entitled to vacation
during each year of the Term consistent with the Bank’s approved vacation
schedule and policy, which shall provide Executive with not less than four (4) weeks
vacation for each year of the Term. 
Executive is encouraged to use all accrued vacation benefits and will be
expected to take vacation in the year it is earned.  Accrual of any unused vacation shall be
determined in accordance with the Bank’s Personnel Policy as in effect from
time to time and shall be subject to any limitations set forth therein.


 


2.             Group
Medical and Other Insurance Benefits.  The Bank shall provide for Executive, at the
Bank’s expense, group medical and other insurance benefits in accordance with
the Bank’s Personnel Policy as in effect from time to time.  All coverage under this paragraph shall be in
existence or shall take effect as of the Effective Date hereof.  The Bank’s and MB’s liability to Executive
for any breach of this paragraph shall be limited to the amount of 


 


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premiums required hereunder to be payable by
the Bank to obtain or maintain, as applicable, the coverage contemplated
herein.


 


3.             Stock
Option. MB has granted Executive under the Stock Option
Agreements an option to purchase 44,814 of shares of MB’s authorized but
unissued Common Stock.  Such option has a
term of ten (10) years and shall vest in three installments of 33.33% per
year over a period of three (3) years, with the first such installment to
vest one year from the date of grant, and with subsequent installments vesting
two and three years thereafter.  To the
maximum extent permitted by law, the option will qualify as an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended.  Such stock option has
been granted to Executive, pursuant to MB’s Stock Option Plan (the “Plan”) and the Stock Option Agreement.


 


4.             Auto
Allowance.  During the
Term, Executive shall be entitled to receive One Thousand Dollars ($1,000) per
month as a car allowance..


 


E.             REIMBURSEMENT FOR BUSINESS EXPENSES


 


Executive
shall be entitled to reimbursement by the Bank or MB for any ordinary and
necessary business expenses incurred by Executive in the performance of
Executive’s duties in accordance with the Bank’s and MB’s reimbursement
policies in effect from time to time, provided that each such expenditure is of
a nature qualifying it as a proper deduction on the federal and state income
tax returns of the Bank and MB as a business expense and not as deductible
compensation to Executive; and Executive furnishes to the Bank and MB adequate
records and other documentary evidence required by federal and state statutes
and regulations issued by the appropriate taxing authorities for the
substantiation of such expenditures as deductible business expenses of the Bank
and not as deductible compensation to Executive.


 


F.             TERMINATION


 


1.             Termination
for Cause.  The Bank or MB
may terminate this Agreement at any time by action of its Board for cause (“Cause”). 
For purposes of this Agreement termination for “Cause” shall mean
termination because of Executive’s personal dishonesty, incompetence, willful
misconduct, any breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this
Agreement.  For purposes of this
Agreement, no act, or the failure to act, on Executive’s part shall be
considered “willful” unless done, or omitted to be done, not in good faith and
without reasonable belief that the action or omission was in the best interests
of the Bank or MB.  Termination under
this Paragraph shall not prejudice any remedy that the Bank or MB may have at
law, in equity, or under this Agreement.


 


2.             Death or
Disability.  In the event
of Executive’s death or if Executive is found to be physically or mentally
disabled (as hereinafter defined) by the Board of Bank or MB in good faith,
this Agreement shall terminate without any further liability or obligation by
the Bank to Executive.  For purposes of
this Agreement only, physical or mental disability shall be 


 


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defined as Executive having been unable to
fully perform under this Agreement for a continuous period of ninety (90) days
or a cumulative period of one-hundred eighty (180) days in any calendar year,
or, if applicable, such other periods as may be defined in the Bank’s Personnel
Policy or in applicable disability insurance policies as in effect from time to
time.  If there should be a dispute
between the Bank or MB and Executive as to Executive’s physical or mental
disability for purposes of this Agreement, the question shall be settled by the
opinion of an impartial reputable physician or psychiatrist agreed upon by the
parties or their representatives, or if the parties cannot agree within ten (10) days
after a request for designation of such party, then by a physician or
psychiatrist designated by the Los Angeles County Medical Association.  The certification of such physician or
psychiatrist as to the question in dispute shall be final and binding upon the
parties hereto.  The Bank or MB shall
bear the costs of such physician or psychiatrist selected to determine such
matter.


 


3.             Supervisory
Matters.  If Executive is
suspended and/or temporarily prohibited from participating in the conduct of
the Bank’s affairs by notice served under Section 8(e)(3) or 8(g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) and
(g)(1)), 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 may in its discretion:  (i) pay
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. 
If Executive is removed and/or permanently prohibited from participating
in the conduct of the Bank’s affairs by an order issued under Section 8(e)(3) or
i(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or
(g)(1)), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the parties shall not be
affected.  If the Bank is in default (as
defined in Section 3(x)(1) of the Federal Deposit Insurance Act (12
U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the parties shall not
be affected.  All obligations under this
Agreement shall be terminated, except to the extent that it is determined that
continuation of the Agreement is necessary for the continued operation of the
Bank; (i) by the Federal Deposit Insurance Corporation at the time that
the Federal Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in Section 11
of the Federal Deposit Insurance Act (12 U.S.C. Section 1821); or (ii) by
the Federal Deposit Insurance Corporation or the United States Comptroller of
the Currency or his or her designee, at the time that the Federal Deposit
Insurance Corporation or the United States Comptroller of the Currency or his
or her designee approves a supervisory merger to resolve problems related to
the operation of the Bank or when the Bank is in an unsafe or unsound
condition.  All rights of the parties
that have already vested, however, shall not be affected by such action.


 


4.             Termination
Without Cause. 
Notwithstanding anything to the contrary contained herein, it is agreed
by the parties hereto that the Bank or MB may at any time without Cause and for
any reason immediately terminate this Agreement and Executive’s employment by
the Bank by action of their respective Boards. 
Upon such termination by the Bank or MB all benefits provided by the
Bank or MB hereunder to Executive shall thereupon cease, except as provided in
this Subparagraph F.4 or Subparagraph F.5, and Executive shall be deemed to
have voluntarily resigned as a director, officer and employee of the Bank and
MB and any 


 


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corporation, partnership, venture, limited
liability company or other entity controlled by, controlling or under common
control with the Bank or MB, and shall deliver such written resignation as Bank
or MB may request.  Notwithstanding the
foregoing, it is agreed that in the event of such termination without Cause by
the Bank or MB upon the delivery to the Bank by Executive of a waiver and
release in substantially the form of Attachment “A” to this Agreement,
and Executive’s compliance with the terms thereof, Executive shall be entitled
to, upon the effective date of termination, payment of a lump sum equivalent to
six (6) months’ base salary as such base salary is in effect on the date
of termination of employment, plus continuation of Executive’s medical benefits
for a period of six (6) months following such termination, with Bank
continuing to pay Executive’s share of premiums and associated costs as if
Executive continued to be employed with the Bank and MB; provided,
however, that the Bank’s and MB’s obligation to provide such coverage shall be
terminated if Executive is eligible to receive comparable substitute coverage
from another employer at any time during such six-month period.  Executive agrees to advise the Bank and MB
immediately if such comparable substitute coverage is available from another
employer.  Notwithstanding any provision
to the contrary in this Subparagraph F.4, no severance benefits shall be
payable to Executive hereunder if Executive’s employment is terminated for any
of the reasons delineated in Subparagraphs F.1, F.2 or F.3 hereof or while
grounds for termination under such Subparagraphs exist, and no severance
benefits shall be payable to Executive under this Subparagraph F.4 if payments
are required to be made to Executive under Subparagraph F.5 hereof.


 


5.             Termination Following
Change in Control.


 


(a)           In the event a Change
in Control of the Bank or MB occurs (as defined below) and Executive’s
employment as Executive Vice President and Chief Financial Officer of the Bank
or MB is terminated without Cause by the Bank or MB, then Executive shall be
entitled, upon such termination of employment and upon delivery to the Bank of
an executed waiver and release in substantially the form of Attachment “A” to
this Agreement, to payment of a lump sum equivalent to one (1) times the
highest annual cash compensation amount paid to Executive by the Bank or MB
within the three years’ preceding the Change in Control and to the continuation
of Executive’s coverage under the group medical care provided at the time of
termination for a period of twelve (12) months following such termination;
provided, however, that the Bank’s obligation to provide such coverage shall be
terminated if Executive obtains comparable substitute coverage from another
employer at any time during such 12-month period.  Executive agrees to advise the Bank and MB
immediately if such comparable substitute coverage is obtained from another
employer.  Notwithstanding any provision
to the contrary in this Subparagraph F.5, no severance benefits shall be
payable to Executive hereunder if Executive’s employment is terminated for any
of the reasons delineated in Subparagraphs F.1, F.2 or F.3 hereof or while
grounds for termination under such Subparagraphs exist.


 


(b)           A “Change in Control” of the Bank occurs upon
the effective date of the first to occur of the following events:


 


(i)            Merger, Consolidation,
and Other Transactions.  Any (A) merger
where the Bank or MB, or a corporation in which the Bank’s or MB’s shareholders
as constituted immediately prior to the merger do not own at least 50% of such
corporation’s 


 


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common stock or 50% of the common stock of
the parent of such corporation following such merger in the same proportions as
their ownership interests in the Bank or MB prior to such transaction, is not
the surviving corporation; (B) a transfer of all or a substantial portion
(50% or more) of the assets of the Bank or MB to another corporation or other
person in which the Bank’s or MB’s shareholders as constituted immediately
prior to such transfer do not own at least 50% of the common stock or 50% of
the common stock of the parent of such corporation (or an equivalent economic
interest in the case of a transferee that is not a corporation) following such
transfer in the same proportions as their ownership interests in the Bank or MB
prior to such transaction; or (C) the liquidation or dissolution of the
Bank or MB, except for a liquidation or dissolution in which the assets and
liabilities of the Bank or MB are transferred to a transferee in which the
owners of the Bank’s or MB’s common stock as constituted immediately prior to
the transaction own at least 50% of the common stock or 50% of the common stock
of the parent of the transferee (or an equivalent economic interest in the case
of a transferee that is not a corporation) following such liquidation or
dissolution in the same proportions as their ownership interests in the Bank or
MB prior to such transaction; or


 


(ii)           Majority
Stockholder.  Any person (as such term is
used in Section 13(d) of the securities Exchange Act of 1934, as
amended (the “Exchange Act”)),
together with its affiliates (but excluding the Bank’s employee benefit plans
and the individuals who were the Bank’s or MB’s officers or directors on the
date of this Agreement or their affiliates), becomes the beneficial owner
(within the meaning of Rule 13(d)(3) under the Exchange Act) of more
than 50% of the Bank’s or MB’s outstanding common stock.


 


(iii)          Regulatory
Exception.  Notwithstanding anything else
to the contrary set forth herein, a “Change in Control” shall not include any
sale of stock or securities, merger, transfer of assets, consolidation,
liquidation, reorganization or other transaction instituted by or at the
request of the OCC, FRB or the Federal Deposit Insurance Corporation to resolve
any supervisory concerns respecting the Bank or MB.


 


(c)           Notwithstanding
anything to the contrary in this Subparagraph F.5, no severance benefits shall
be payable to Executive hereunder if Executive’s employment is terminated for
any of the reasons delineated in Subparagraphs F.1, F.2 or F.3 hereof or while
grounds for termination under such Subparagraphs exist.


 


6.             Golden Parachute Limitation.  Severance compensation under Subparagraphs
F.4 and F.5 hereof will be reduced as provided below to avoid the penalties
imposed on “parachute payments” under the Internal Revenue Code of 1986 (the “Code”).


 


(a)           If the present value of
all Executive’s severance compensation provided by MB or the Bank under
Subparagraph F.4 or F.5 hereof and outside this Agreement is high enough to
cause any such payment to be a “parachute payment” (as defined in Section 280G(b)(2) of
the Code), then one or more of such payments will be reduced by the minimum
amount required to prevent the severance compensation under this Agreement from
being a “parachute payment.”


 


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(b)           Executive may direct the Bank and MB regarding the order
of reducing severance compensation and other payments from the Bank or MB to
comply with this Subparagraph F.6.


 


7.             Section 409A
Limitation.  It is the
intention of Employer and Executive that the severance and other benefits
payable to Executive under this Agreement either be exempt from, or otherwise
comply with, Section 409A (“Section 409A”)
of the Internal Revenue Code of 1986, as amended.  Notwithstanding any other term or provision
of this Agreement, to the extent that any provision of this Agreement is
determined by Employer, with the advice of its independent accounting firm or
other tax advisors, to be subject to and not in compliance with Section 409A,
including, without limitation, the definition of “Change in Control” or the
timing of commencement and completion of severance benefit and/or other benefit
payments to Executive hereunder in connection with a merger, recapitalization,
sale of shares or other “Change in Control”, or the amount of any such
payments, such provisions shall be interpreted in the manner required to comply
with Section 409A.  Employer and
Executive acknowledge and agree that such interpretation could, among other
matters, (i) limit the circumstances or events that constitute a “change
in control;” (ii) delay for a period of six (6) months or more, or
otherwise modify the commencement of severance and/or other benefit payments;
and/or (iii) modify the completion date of severance and/or other benefit
payments.  Employer and Executive further
acknowledge and agree that if, in the judgment of Employer, with the advice of
its independent accounting firm or other tax advisors, amendment of this
Agreement is necessary to comply with Section 409A, Employer and Executive
will negotiate reasonably and in good faith to amend the terms of this
Agreement to the extent necessary so that it complies (with the most limited
possible economic effect on Employer and Executive) with Section 409A.  For example, if this Agreement is subject to Section 409A
and it requires that severance and/or other benefit payments must be delayed
until at least six (6) months after Executive terminates employment, then
Employer and Executive would delay payments and/or promptly seek a written
amendment to this Agreement that would, if permissible under Section 409A,
eliminate any such payments otherwise payable during the first six (6) months
following Executive’s termination of employment and substitute therefor a lump
sum payment or an initial installment payment, as applicable, at the beginning
of the seventh (7th) month following Executive’s termination of employment
which in the case of an initial installment payment would be equal in the
aggregate to the amount of all such payments thus eliminated.


 


G.            GENERAL PROVISIONS


 


1.             Trade Secrets.  During the Term, Executive will have access
to and become acquainted with what Executive and the Bank and MB acknowledge
are trade secrets, to wit, knowledge or data concerning the Bank and MB,
including their operations and methods of doing business, and the identity of
customers of the Bank and MB, including knowledge of their financial condition
and their financial needs.  Executive
shall not disclose any of the aforesaid trade secrets, directly or indirectly,
or use them in any way either during the Term or thereafter, except as required
in the course of Executive’s employment with the Bank or MB.


 


2.             Indemnification.  To the extent permitted by law, applicable
statutes and the Bylaws or resolutions of the Bank in effect from time to time,
the Bank and MB shall


 


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indemnify Executive against liability or loss
arising out of Executive’s actual or asserted misfeasance or non-feasance in
the performance of Executive’s duties or out of any actual or asserted wrongful
act against, or by, the Bank or MB including but not limited to judgments,
fines, settlements and legal and other expenses incurred in the defense of
actions, proceedings and appeals therefrom. 
However, the Bank and MB shall have no duty to indemnify Executive with
respect to any claim, issue or matter as to which Executive has been adjudged
to be liable to the Bank or MB in the performance of his duties, unless and
only to the extent that the court in which such action was brought shall
determine upon application that, in view of all of the circumstances of the
case, Executive is fairly and reasonably entitled to indemnification for the
expenses which such court shall determine. 
The Bank and MB shall endeavor to apply for and obtain Directors and
Officers Liability Insurance to indemnify and insure the Bank, MB and Executive
from and against the aforesaid liabilities. 
The provisions of this paragraph shall apply to the estate, executor,
administrator, heirs, legatees or devisees of Executive.  The obligations of the Bank and MB under this
Subparagraph G.2 shall continue through and after the Term of this Agreement.


 


3.             Return of Documents.  Executive expressly agrees that all manuals,
documents, files, reports, studies, instruments or other materials used and/or
developed by Executive during the Term are solely the property of the Bank and
MB, and that Executive has no right, title or interest therein.  Upon termination of this Agreement, Executive
or Executive’s representative shall promptly deliver possession of all of said
property to the Bank in good condition.


 


4.             Non-solicitation.  During the Term and for a period of one year
thereafter, Executive shall not, directly or indirectly, engage or participate
in the solicitation or any attempt to solicit employees of the Bank or MB to
work for any person, firm or business.


 


5.             Controlling Law.  This Agreement is to be governed by and
construed in accordance with the laws of the United States and, to the extent
not inconsistent therewith, the laws of the State of California.


 


6.             Invalid Provisions.  Should any provision of this Agreement for
any reason be declared invalid, void, or unenforceable by a court of competent
jurisdiction, the validity and binding effect of any remaining portion shall
not be affected, and the remaining portions of this Agreement shall remain in
full force and effect as if this Agreement had been executed with said
provision eliminated.


 


7.             Entire Agreement.  This Agreement and the Stock Option Agreement
contain the entire agreement of the parties. 
It supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of Executive by the Bank
and MB.  Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements,
oral or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not embodied herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or
binding.  This Agreement may not be
modified or amended by oral agreement, but only by an agreement in writing
signed by both the Bank and MB, and Executive.


 


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8.             Notice.  For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be personally delivered or (unless otherwise specified)
mailed by United States mail, or sent by facsimile, provided that the facsimile
cover sheet contains a notation of the date and time of transmission, and shall
be deemed received:  (i) if
personally delivered, upon the date of delivery to the address of the person to
receive such notice, (ii) if mailed in accordance with the provisions of
this Subparagraph G.8, three (3) business days after the date placed in
the United States mail, or (iii) if given by facsimile, when sent.  Notices shall be addressed to the Bank and MB
at their main office and to Executive at the address then maintained by the
Bank and MB in its records for Executive, or to such other respective addresses
as the parties hereto shall designate to the other by like notice.


 


9.             Arbitration.  Any dispute or controversy arising under
or in connection with this Agreement, the inception or termination of Executive’s
employment, or any alleged discrimination or statutory or tort claim related to
such employment, including issues raised regarding the Agreement’s formation,
interpretation or breach, shall be settled exclusively by binding arbitration
in Los Angeles, California in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association (“AAA”). 
Without limiting the foregoing, the following potential claims by
Executive could be subject to arbitration under the Arbitration Agreement:  claims for wages or other compensation due;
claims for breach of any contract or covenant (express or implied) under which
Executive believes he would be entitled to compensation or benefits; tort
claims related to such employment; claims for discrimination and harassment
(including, but not limited to, race, sex, religion, national origin, age,
marital status or medical condition, disability, sexual orientation, or any
other characteristic protected by federal, state or local law); claims for
benefits (except where an employee benefit or pension plan specifies that its
claims procedure shall culminate in an arbitration or other procedure different
from this one); and claims for violation of any public policy, federal, state
or other governmental law, statute, regulation or ordinance.  The arbitration will be conducted in Los
Angeles County.  The arbitration shall
provide for written discovery and depositions adequate to give the parties
access to documents and witnesses that are essential to the dispute.  The arbitrator shall have no authority to add
to or to modify this Agreement, shall apply all applicable law, and shall have
no lesser and no greater remedial authority than would a court of law resolving
the same claim or controversy.  The
arbitrator shall issue a written decision that includes the essential findings
and conclusions upon which the decision is based, which shall be signed and
dated.  Executive and the Bank and MB
shall each bear his or their own costs and attorneys’ fees incurred in
conducting the arbitration and, except in such disputes where Executive assets
a claim otherwise under a state or federal statute prohibiting discrimination
in employment (“a  Statutory Claim”), or unless required
otherwise by applicable law, shall split equally the fees and administrative
costs charged by the arbitrator and AAA between Executive, on the one hand, and
Bank and MB on the other hand.  In disputes
where Executive asserts a Statutory Claim against the Bank or MB, Executive
shall be required to pay only the AAA filing fee to the extent such filing fee
does not exceed the fee to file a complaint in state or federal court.  Executive shall pay the balance of the
arbitrator’s fees and administrative costs. 
Judgment may be entered on the arbitrator’s award in any court having
jurisdiction.


 


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


 


	
   

  	
   

  	
  BANK OF MANHATTAN, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Jeffrey M. Watson

  
	
   

  	
   

  	
   

  	
   Jeffrey M. Watson

  
	
   

  	
   

  	
   

  	
   President & Chief Executive Officer

  
	
  /s/ Dean Fletcher

  	
   

  	
   

  
	
  Dean Fletcher

  	
   

  	
  MANHATTAN BANCORP

  
	
  (“Executive”)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Jeffrey M. Watson

  
	
   

  	
   

  	
   

  	
   Jeffrey M. Watson

  
	
   

  	
   

  	
   

  	
  President & Chief Executive Officer

  



 


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WAIVER AND RELEASE AGREEMENT


 


This Waiver and Release Agreement (the “Waiver Agreement”) is entered into by and
between Dean Fletcher (“Employee”)
and Bank of Manhattan, N.A. and Manhattan Bancorp on their behalf and on behalf
of their parents, subsidiaries, affiliates and successors-in-interest
(collectively, “Employer”).


 


RECITALS


 


A.            Employee
and Employer have entered into an Employment Agreement dated as of December 5,
2008 (the “Agreement”).


 


B.            A
condition precedent to certain of Employer’s obligations under the Agreement is
the execution of this Waiver Agreement.


 


NOW, THEREFORE, in consideration of the
foregoing premises and the mutual covenants herein contained, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, agree and covenant as
follows:


 


RELEASE


 


In consideration for the payment of severance
and other compensation under the Agreement, Employee agrees unconditionally and
forever to release and discharge Employer its parents, subsidiaries,
affiliates, successors-in-interest, and their respective officers, directors, managers,
employees, members, shareholders, representatives, attorneys, agents and
assigns from any and all claims, actions, causes of action, demands, rights or
damages of any kind or nature which Employee may now have, or ever have,
whether known or unknown, that arise out of or in any way relate to Employee’s
employment with, or separation from, Employer on or before the date of
execution of this Waiver Agreement. 
Employee also confirms his resignation as a director, officer and
employee of Employer and any corporation, partnership, venture, limited
liability company or other entity controlled by, controlling or under common
control with Employer.


 


This release specifically includes, but is
not limited to, any claims for discrimination and/or violation of any statutes,
rules, regulations or ordinances, whether federal, state or local, including,
but not limited to, Title VII of the Civil Rights Act of 1964, as amended, age
claims under the Age Discrimination in Employment Act of 1967, as amended by
the Older Workers Benefits Protection Act of 1990, the Employee Retirement
Income Security Act of 1974, as amended, the California Fair Employment and
Housing Act, the California Labor Code, the Equal Pay Act, the Americans With
Disabilities Act, the Rehabilitation Act of 1973, the Racketeer Influenced and
Corrupt Organizations Act, the Financial Reform Recovery and Enforcement Act of
1989, and/or Section 1981 of Title 42 of the United State Code.


 


Employee further agrees knowingly to waive
the provisions and protections of Section 1542 of the California Civil
Code, which reads:


 


Attachment A


 

















 


A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time
of executing the release, which, if known by him, must have materially affected
his settlement with the debtor.


 


REPRESENTATIONS OF EMPLOYEE


 


Employee represents and agrees that, prior to
the execution of this Waiver Agreement, Employee has had the opportunity to
discuss the terms of this Waiver Agreement with legal counsel of Employee’s
choosing.


 


Employee affirms that no promise or
inducement was made to cause Employee to enter into this Waiver Agreement other
than the inducements provided in the Agreement. 
Employee further confirms that Employee has not relied upon any other
statement or representation by anyone other than what is in this Waiver
Agreement as a basis for Employee’s agreement.


 


MISCELLANEOUS


 


Except for the Agreement and any other
employee benefit plans expressly referred to in the Agreement as continuing
following Employee’s termination of employment with Employer, this Waiver
Agreement sets forth the entire agreement between Employee and Employer, and
shall be binding on both party’s heirs, representatives and successors.  This Waiver Agreement shall be construed
under the laws of the State of California, both procedurally and
substantively.  If any portion of this
Waiver Agreement is found to be illegal or unenforceable, such action shall not
affect the validity or enforceability of the remaining paragraphs or
subparagraphs of this Waiver Agreement.


 


Employee acknowledges that Employee has been
advised that Employee has twenty-one (21) days to consider this Waiver
Agreement, and that Employee was informed that Employee has the right to consult
with counsel regarding this Waiver Agreement. 
To the extent Employee has taken less than twenty-one (21) days to
consider this Waiver Agreement, Employee acknowledges that Employee has had
sufficient time to consider the Waiver Agreement and to consult with counsel,
and that Employee does not desire additional time.


 


This Waiver Agreement is revocable by
Employee for a period of seven (7) days following Employee’s execution of
this Waiver Agreement. The revocation by Employee of this Waiver Agreement must
be in writing, must specifically revoke this Waiver Agreement and must be
received by Employer prior to the eighth (8th) day following the execution of
this Waiver Agreement by Employee.  This
Waiver Agreement becomes effective, enforceable and irrevocable on the eighth
(8th) day following Employee’s execution of the Waiver Agreement.  No payment will be made to the undersigned
until such date.


 

















 


The undersigned agree to the terms of this
Waiver Agreement and voluntarily enters into it with the intent to be bound
hereby.


 


 




	
  DATED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dean Fletcher

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DATED:

  	
   

  	
   

  
	
   

  	
   

  	
  Bank of Manhattan, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jeffrey M. Watson

  
	
   

  	
   

  	
  President & Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  DATED:

  	
   

  	
  Manhattan Bancorp

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jeffrey M. Watson

  
	
   

  	
   

  	
  President & Chief Executive Officer