Exhibit 10.5.1


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of July 20, 2005 by
and between Commercial Capital Bancorp, Inc. (the “Holding Company”), a
corporation organized under the laws of the State of Nevada, with its
headquarters office located in the City of Irvine, Orange County, California,
and James R. Daley, a California resident
(the “Employee”).


 


The
Holding Company desires to enter into this Agreement with Employee pursuant to
which Employee would be employed as the Executive Vice President of the Holding
Company, on the terms and subject to the conditions set forth herein, and
Employee desires to be so employed.


 


On the basis of
the foregoing facts, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and in further consideration of the mutual
covenants and agreements contained herein, the parties agree as follows:


 


1.             Employee’s Representation to
Holding Company.


 


As a condition to
Holding Company’s willingness to enter into this Agreement with Employee,
Employee hereby represents that his employment hereunder and his performance of
the duties of those positions will not breach any agreement or obligation of
any kind to which Employee is now or expects to be subject at the time of
execution of this Agreement, including but not limited to agreements with or
other obligations to any of Employee’s current or prior employers or any other
entity to which Employee has provided services.


 


Employee
understands that the Holding Company prohibits the use of confidential
information belonging to any entity from being used in connection with Holding
Company’s business and Employee represents that he has not brought with him,
nor will he use, any confidential information from any entity.  Employee represents that Employee can fully
perform his duties under this Agreement, without using or disclosing any
confidential information belonging to any of Employee’s former employers.  Employee understands that as an employee of
the Holding Company, Employee will be expected to use all information that is
generally known and used by persons with training and experience comparable to
Employee’s and all information that is common knowledge in the industry or
otherwise legally in the public domain.


 


The Holding
Company agrees to indemnify and defend Employee in any action or proceeding
which is brought by another entity for breach of a confidentiality requirement
or obligation, provided that Employee is determined not to have breached any
such confidentiality requirement or obligation or this Section 1.


 


2.             Term.


 


(a)           Subject
to the provisions below, the Holding Company agrees to employ Employee, and
Employee agrees to be employed by the Holding Company, subject to the terms and
conditions of this Agreement, for a term of three (3) years (“the Term”) unless
employment is earlier terminated pursuant to the termination provisions of this
Agreement, commencing on the date first set forth above (the “Employment Period”).


 





















 


(b)           Subject
to the notice provisions of this paragraph, on the first annual anniversary of
the date first above written and each annual anniversary thereafter, the Term
of this Agreement shall automatically be extended for an additional one year,
unless the Holding Company or the Employee gives written notice to the other
party or parties hereto of such party’s or parties’ election not to extend the
Term, with such notice to be given not less than ninety (90) days prior to any
such anniversary date.  The Holding
Company’s Board of Directors (“Board of Directors”) will review this Agreement
annually for purposes of determining whether to extend the Agreement.  If any party gives timely notice that the
Term will not be extended, then this Agreement shall terminate at the conclusion
of its remaining Term.  References herein
to the Term of this Agreement and/or the Employment Period shall refer both to
the initial Term and successive Terms.


 


3.             Duties and Authority; Board
Representation.


 


(a)           During
the Employment Period, Employee shall devote all his productive time, ability
and attention to the business and affairs of the Holding Company and its
subsidiaries.  Employee shall not
directly render service of a business, commercial or professional nature to any
other person or organization other than the Holding Company and its
subsidiaries without the consent of the Board of Directors.  However, nothing in this paragraph prohibits
Employee from, or requires the Board of Directors to approve or consent to
Employee serving as an advisor or Board member of a charitable or nonprofit
organization or serving as an advisor or director of any corporation which does
not compete with the business of the Holding Company, so long as such service
does not materially interfere with the performance of employment duties.  Employee agrees that during the Employment
Period, he will use his best efforts, skill and abilities to promote the
Holding Company’s interests and to serve as the Executive Vice President of the
Holding Company. Employee shall perform such customary, appropriate and
reasonable executive duties as are normally assigned to the Executive Vice
President at other thrift holding companies, including such duties as are
delegated to him from time to time by the Board of Directors.  Employee shall report directly to the Holding
Company’s Chairman and Chief Executive Officer.


 


(b)           At
such time that a minimum of $1.0 billion of new Transaction Account Deposits
(as defined in the footnote to Section 5(c) hereof) have been on deposit at
Commercial Capital Bank, FSB (the “Bank”) for at least 60 days (calculated on
an average daily balance basis), with the concurrence of Employee, the Holding
Company agrees to take all action necessary to appoint or elect Employee as a
director of the Holding Company.


 


4.             Holding Company’s Authority.  Employee agrees to observe and comply with
the Holding Company’s rules and regulations as adopted by the Board of
Directors regarding performance of his duties and to carry out and to perform
orders, directions and policies stated by the Board of Directors to him
periodically, either orally or in writing.


 


5.             Compensation.


 


(a)           The
Holding Company, through the Bank, agrees to pay to Employee during each year
of this Agreement an annual base salary of $500,000, beginning on the date
first set forth above and payable in accordance with the Bank’s standard
biweekly payroll policy and subject to such withholding as required by law or
policy.  The base salary shall be
reviewed annually by the Bank’s Board of Directors, on or before January 31 of
each year for that year, and may be changed by mutual agreement of the parties.


 


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(b)           The
Holding Company, through the Bank, also agrees to pay a bonus of $500,000 upon
the execution of this Agreement, which is specifically conditioned on the
Employee’s continued employment with the Bank for three (3) years in accordance
with the terms of this Agreement. 
Employee hereby acknowledges and agrees that if either (i) he should
voluntarily elect to terminate his employment hereunder for other than good
reason (as defined herein or (ii) if Employee is terminated by the Holding
Company or the Bank for cause (as defined in each employment agreement), in
either circumstance, Employee shall immediately return to the Bank the portion
of the $500,000 bonus which is equal to the product of $500,000 times the
remaining percentage of the three year Term (calculated by the number of days
based on a 365 day year) that Employee did not fulfill with the Holding Company
and the Bank.


 


(c)           Pursuant to the Hawthorne Financial
Corporation 2001 Stock Incentive Plan which was assumed by the Holding Company
subsequent to its acquisition of Hawthorne Financial Corporation (“Plan”),
Employee is granted a restricted share right which entitles Employee to receive
shares of the Holding Company’s common stock upon the satisfaction of the
vesting requirements set forth in the table below.  Employee shall receive a Stock Issuance
Agreement issued pursuant to the Plan consistent with the restricted share
right referenced herein.


 


Vesting Schedule


 


	
  (Minimum Transaction Account Deposits(1)
  attributable to Employee which are on deposit in the Bank for at least 60
  days (calculated on an average daily balance basis)

  	
   

  	
  (Represents shares of the Holding Company’s
  common stock to be issued)(2)

  
	
  Less than $500
  million

  	
   

  	
  0

  
	
  $500 million

  	
   

  	
  40,000

  
	
  $1 billion

  	
   

  	
  40,000

  
	
  $1.5 billion

  	
   

  	
  40,000

  
	
  $2 billion

  	
   

  	
  40,000

  
	
  $2.5 billion

  	
   

  	
  40,000

  
	
  $3 billion

  	
   

  	
  40,000

  











(1)                                  For purposes of this Agreement “Transaction
Account Deposits” means savings accounts, money market accounts and demand
deposit accounts.


 


(2)                                  In accordance with the Plan, shares of
the Holding Company’s common stock may not be issued before one year from the
date of the grant of the restricted share right, regardless of the attainment
of the required performance goal.  The
date of the restricted share right is the date of this Agreement.


 


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(d)           The Holding Company, through the
Bank, agrees to pay to Employee $700,000 at such time as there is a minimum of
$100 million in Transaction Account Deposits (as defined in the footnote to
Section 5(c) hereof) attributable to Employee which are on deposit in the Bank
for at least 60 days (calculated on an average daily balance basis).


 


(e)           After the full vesting of the share
right awards pursuant to Section 5(c) hereof, the Employee will become eligible
to receive from the Bank a bonus or bonuses, and to receive from the Holding
Company stock options and restricted stock awards, in each case, in such amount
as, in such a manner as, and at such time as, the Board of Directors of the
Holding Company or the Bank, as the case may be, in its discretion, determines
is appropriate.


 


(f)            Following the completion of the services
provided to the Employee pursuant to Section 5(h), the Holding Company, through
the Bank, shall provide a car allowance of $1,000 per month during the
Employment Period.


 


(g)           The Holding Company, through the
Bank, agrees to pay the pro rata portion of the monthly dues (based on actual
business use as evidenced by receipts) for the Wilshire Country Club, or such
other facility as may be mutually agreed upon by the parties hereto.


 


(h)           The Holding Company understands that
it is the Employee’s intention and desire to work out of the Holding Company’s
headquarters office in Irvine, California and to relocate his personal
residence closer to the Holding Company’s headquarters.  In order to facilitate Employee’s move, for a
period of not more than six months from the date of this Agreement, the Holding
Company, through the Bank, agrees to provide Employee with a car service
selected by the Holding Company to transport Employee to and from his residence
to the Holding Company’s headquarters.


 


(i)            During the Employment Period,
Employee shall be eligible to participate in any retirement, pension or
profit-sharing plan, including any non-qualified, deferred compensation or
salary continuation plan, or similar employee benefit plan or retirement or
bonus program of the Holding Company and its subsidiaries, to the extent that
he is eligible under the provisions of the plan and commensurate with his
position in relationship to other participants and pursuant to the terms of the
plans or programs of the Holding Company and its subsidiaries.


 


(j)            The Holding Company, through the
Bank, shall provide medical, dental and other insurance, including key man life
and disability, for Employee on the same terms as provided for all executive
officers of the Holding Company and its subsidiaries.


 


6.             Reimbursement of Expenses.  The services required by the Holding Company
and its subsidiaries will require Employee to incur business, entertainment and
community relations expenses and the Holding Company or its subsidiaries hereby
agrees to provide credit cards and charge accounts for Employee’s use for such
expenses. The Holding Company or its subsidiaries agrees to reimburse Employee
for all out-of-pocket expenses which are business related, upon
submission of appropriate documentation and approval by the Chairman and Chief
Executive


 


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Officer of the Holding
Company.  Such expenses may include
membership fees and dues to organizations approved by the Board.  Each expense, to be reimbursed, must be of a
nature qualifying it as a proper deduction on the income tax returns of the
Holding Company as a business expense and not as deductible compensation to
Employee.  The records and other
documentary evidence submitted by Employee to the Holding Company or its
subsidiaries with each request for reimbursement of such expenses shall be in
the form required by applicable statutes and regulations issued by appropriate
taxing authorities for the substantiation of such expenditures as deductible business
expenses of the Holding Company and not as deductible compensation to Employee.


 


7.             Confidential Information.  Employee agrees that he shall not, without
the prior written permission of the Holding Company in each case, publish,
disclose or make available to any other person, firm or corporation, either
during or after the termination of this Agreement, any confidential information
which Employee may obtain during the Employment Period, or which Employee may
create prior to the end of the Employment Period relating to the business of
the Holding Company and its subsidiaries, or to the business of any customer or
supplier of any of them; provided, however, Employee may use such information
during the Employment Period for the benefit of the Holding Company and its
subsidiaries. Employee agrees to execute any and all such additional agreements
and instruments that the Holding Company may deem reasonably necessary in order
to protect the confidentiality of such confidential information or otherwise to
effectuate the purpose and intent of this Section 7.  Prior to or at the termination of this
Agreement, Employee shall return all documents, files, notes, writings and
other tangible evidence of such confidential information to the Holding Company
and its subsidiaries. This Section 7 shall survive the expiration or
termination of this Agreement.


 


8.             Covenant Not to Solicit
Customers or Fellow Employees.


 


(a)           Subject to Section 8(b) hereof,
Employee agrees that for a period of eighteen (18) months following the
termination of employment with the Holding Company, he will not solicit,
directly or indirectly, divert or attempt to divert for himself or for any
third party, the business of any customer with whom the Holding Company and its
subsidiaries had done business during the preceding one year period. Employee
recognizes and acknowledges that any customer list and financial information
concerning any of the Holding Company’s customers, as it may exist from time to
time, is a valuable, special and unique asset of the Holding Company’s
business.


 


(b)           To the extent that Employee has
terminated his employment with the Holding Company and desires to solicit the
business of any customer of the Holding Company who has had Transaction Account
Deposits attributed to the Employee for purposes of Section 5(c) hereof,
Employee agrees to observe the following time periods during which no
solicitation of such customers may be made:


 


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  Period of time from start of
  Agreement when termination occurs:

  	
   

  	
  Months
  Before Employee May Solicit Customer

  
	
  0 - 6 months

  	
   

  	
  None

  
	
  7 - 12 months

  	
   

  	
  3 months

  
	
  13 - 18 months

  	
   

  	
  6 months

  
	
  19 - 24 months

  	
   

  	
  12 months

  
	
  25 - 30 months

  	
   

  	
  15 months

  
	
  31 - 36 months

  	
   

  	
  18 months

  






 


(c)           Employee agrees not to solicit directly
or indirectly, divert or attempt to divert for himself or for any third party,
the services of any officer or employee of the Holding Company and its
subsidiaries during the period of 18 months following the termination of
employment with the Holding Company.


 


(d)           This Section 8 shall survive the
expiration or termination of this Agreement.


 


9.             Remedy.  Employee understands that, because of the
unique character of the services to be rendered by Employee hereunder, the
Holding Company would not have any adequate remedy at law for the breach or
threatened breach by Employee of any one or more of the covenants set forth in
this Agreement and therefore expressly agrees that the Holding Company in
addition to any other rights or remedies which may be available to it, shall be
entitled to injunctive and other equitable relief to prevent or remedy a breach
of this Agreement by Employee.


 


10.           Termination of Employee Without
Cause.


 


(a)           Upon the occurrence of an Event of
Termination (as herein defined) during Employee’s Term of employment under this
Agreement, the provisions of this Section shall apply.


 


(b)           As used in this Agreement, an “Event
of Termination” shall mean and include any one or more of the following: (i)
the termination by the Holding Company of Employee’s full-time employment
hereunder for any reason other than a termination governed by Section 13 below,
or Termination for Cause, as defined in Section 11 below; (ii) Employee’s
termination with good reason from the Holding Company’s employ in accordance
with Section 10(c) below upon any (A) failure to elect or reelect or to appoint
or reappoint Employee as Executive Vice President, unless consented to by the
Employee, (B) a material change in Employee’s function, duties, or
responsibilities with the Holding Company or its subsidiaries, which change
would cause Employee’s position to become one of substantially lesser
responsibility, importance, or scope from the position and attributes thereof
described in Section 3 above, unless consented to by Employee, (C) a relocation
of Employee’s principal place of employment by more than 30 driving miles from
its location at the effective date of this Agreement, unless consented to by
the Employee, (D) a material reduction in the benefits and perquisites to Employee
from those being provided as of the effective date of this Agreement, unless
consented to by Employee, (E) a liquidation or dissolution of the Holding
Company or its subsidiaries, or (F) breach of this Agreement by the Holding
Company.


 


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(c)           Upon the occurrence of any event of a
type described in clauses (ii)(A), (B), (C), (D), (E) or (F), of Section 10,
Employee shall have the right to terminate with good reason his employment
under this Agreement by delivering written notice to the Holding Company not
less than sixty (60) days following the occurrence of such event, which
termination with good reason shall be effective only if such event shall not be
cured within thirty (30) days after Holding Company’s receipt of such
notice.  The date of any Event of
Termination shall be referred to herein as the “Date of Termination.”


 


(d)           Upon the occurrence of an Event of
Termination by the Holding Company, the Holding Company, through the Bank,
shall pay to Employee an amount equal to his base salary for the remaining
portion of the Term (such payment, the “Severance Payment”), as severance pay
in lieu of and in substitution for any other claims for salary and continued
benefits hereunder (based on Employee’s base salary and benefits prevailing at
the time of termination).  At the
election of the Employee, the Severance Payment shall be made to Employee: (a)
in a lump sum on the Date of Termination, or (b) on a semi-monthly basis in
approximately equal installments over a period of thirty-six (36) months
following the Date of Termination, or (c) on an annual basis in approximately
equal installments over a period of thirty-six (36) months following the Date
of Termination.  Payment of the Severance
Payment shall be in addition to all other sums owed to Employee under
applicable law or this Agreement for all periods prior to the Date of
Termination, including, without limitation, sums owed in respect of accrued
paid time off (“PTO”), accrued bonus, if any, and reimbursable expenses.  Notwithstanding anything in this Agreement to
the contrary, no bonus shall be deemed to have been accrued unless and until
any such bonus has been duly authorized by the Holding Company’s Board of
Directors or a duly authorized committee thereof. Accrued bonuses shall mean
the bonus amount determined in accordance with Section 5(e).


 


(e)           With respect to any stock options
issued to the Employee that were outstanding on the Date of Termination, any
options which were not exercisable on the Date of Termination shall
automatically become exercisable upon the Date of Termination, and shall remain
exercisable in full for a period of thirty (30) days.


 


(f)            Upon the occurrence of an Event of
Termination, the Holding Company, through the Bank, will cause to be continued
for the Employee and his previously covered dependents life, medical, dental
and disability coverage that the Employee agrees is substantially equivalent to
the coverage maintained by the Holding Company or its subsidiaries for Employee
and his dependents prior to the Date of Termination at no cost to the Employee,
to the extent, if any, that the insurance carrier will allow, and except to the
extent such coverage may be changed in its application to all employees of the
Holding Company and its subsidiaries.  If
this coverage is not available, the Holding Company will cause the Bank to pay
to Employee an amount equal to the monthly premiums paid to the carrier for the
coverage that was in force prior to the Date of Termination for the remaining
Term of this Agreement.


 


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11.           Termination of Employee for Cause.  The Board of Directors may terminate Employee’s
employment at any time, but any termination by the Board of Directors for other
than cause shall not prejudice the Employee’s right to compensation or other
benefits under this Agreement.  The
Employee shall have no right to receive compensation or other benefits for any
period after termination for cause. 
Termination for cause shall include termination because of the Employee’s
personal dishonesty, incompetence, willful misconduct, 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 regulatory cease and desist order, or
material breach of any provision of this Agreement.


 


12.           Termination Upon Employee’s Death;
Effect of Termination on Other Plans. 
Notwithstanding anything herein contained, if Employee shall die, this
Agreement shall terminate one year from the date of Employee’s death, whereupon
Employee’s estate shall be entitled to receive, through the Bank, his salary,
accrued PTO, and any bonus earned up through the date of termination. Such
termination shall not affect any rights which Employee may have at the time of
his death pursuant to any of the Holding Company or its subsidiaries plans or
arrangements for insurance, PTO or stock options, or for any other death
benefit, bonus, or retirement benefit, which accrued rights thereafter shall be
enjoyed by Employee’s estate and continue to be governed by the provision of
such plans and arrangements to the extent they are not inconsistent with the
terms of this Agreement.  The Holding
Company, through the Bank, will cause to be continued for the Employee’s
previously covered dependants life, medical and dental coverage that is
substantially equivalent to the coverage maintained by the Holding Company or
its subsidiaries for Employee’s dependants prior to the employee’s death at no
cost to the Employee.  Such coverage
shall cease upon the expiration of the remaining Term of this Agreement.


 


13.           Change in Control.


 


(a)           For purposes of this Agreement, a “Change
in Control” of the Holding Company or its subsidiaries shall mean an event of a
nature that: (i) would be required to be reported in response to Item 1(a) of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”); or (ii) results in a Change in Control of the Holding Company or its
subsidiaries within the meaning of the Home Owners’ Loan Act of 1933, as
amended, the Federal Deposit Insurance Act and the Rules and Regulations
promulgated by the Office of Thrift Supervision (the “OTS”), as in effect on
the date hereof (provided, that in applying the definition of change in control
as set forth under the rules and regulations of the OTS, the Board of Directors
shall substitute its judgment for that of the OTS); or (iii) without limitation
such a Change in Control shall be deemed to have occurred at such time as (A)
any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of voting securities of the Holding
Company or its subsidiaries representing 20% or more of the Holding Company or
its subsidiaries outstanding voting securities or right to acquire such
securities except for any voting securities of the Bank purchased by the
Holding Company and any voting securities purchased by any employee benefit
plan of the Bank or the Holding Company, or (B) individuals who constitute the
Board of Directors on the date hereof (the “Incumbent Board”) cease for any
reason to constitute at least a majority thereof, provided that any person
becoming


 


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a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Holding Company’s stockholders
was approved by a Nominating Committee solely comprised of members who are
Incumbent Board members, shall be, for purposes of this clause (B), considered
as though he were a member of the Incumbent Board, (C) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Holding Company or its subsidiaries or similar transaction occurs
or is effectuated in which the Holding Company or its subsidiaries is not the
resulting entity; provided, however, that such an event listed above will be
deemed to have occurred or to have been effectuated upon the receipt of all
required federal regulatory approvals not including the lapse of any statutory
waiting periods, or (D) a proxy statement shall be distributed soliciting
proxies from stockholders of the Holding Company, by someone other than the
current management of the Holding Company, seeking stockholder approval of a
plan of reorganization, merger or consolidation of the Holding Company or its
subsidiaries with one or more corporations as a result of which the outstanding
shares of the class of securities then subject to such plan or transaction are
exchanged for or converted into cash or property or securities not issued by
the Holding Company or its subsidiaries shall be distributed; or (E) a tender
offer is made and accepted for 20% or more of the voting securities of the
Holding Company  or its subsidiaries then
outstanding.


 


(b)           If
a Change in Control has occurred pursuant to Section 13(a) above or the Board
Directors has determined that a Change in Control has occurred, Employee shall
be entitled to the benefits provided in paragraphs (c) and (d) of this Section
13 upon his subsequent termination of employment at any time during the Term of
this Agreement due to: (1) Employee’s dismissal or (2) Employee’s termination
for good reasons unless such termination is because of his death or Termination
for Cause.


 


(c)           Upon
Employee’s entitlement to benefits pursuant to Section 13(b), the Holding
Company, through the Bank, shall pay Employee, or in the event of his
subsequent death, his beneficiary or beneficiaries, or his estate, as the case
may be, as severance pay or liquidated damages, or both, a sum equal to the
greater of: (1) the payments due for the remaining Term of the Agreement; or
(2) three (3) times Employee’s highest annual compensation for the last five (5)
years (such payment, the “Severance Payment”). Such annual compensation shall
include Base Salary, commissions, bonuses, contributions or accruals on behalf
of Employee to any pension and profit sharing plans, including any
non-qualified, deferred compensation or salary continuation plans, any benefits
to be paid or received under any stock-based benefit plan, severance payments,
directors or committee fees and value of fringe benefits paid or to be paid to
the Employee during such years. At the election of the Employee, the Severance
Payment shall be made to Employee: (a) in a lump sum on the Date of
Termination, or, (b) on a semi-monthly basis in approximately equal
installments over a period of thirty-six (36) months following the, Date of
Termination or (c) on an annual basis in approximately equal installments over
a period of thirty-six (36) months following the Date of Termination.  Payment of the Severance Payment shall be in
addition to all other sums owed to Employee under applicable law for all periods
prior to the Date of Termination, including, without limitation, sums owed in
respect of accrued PTO, accrued bonus, if any, and reimbursable expenses.  Notwithstanding anything in this Agreement to
the contrary, no bonus shall be deemed to have been accrued unless and until
any such bonus has been duly authorized by the Holding Company’s Board of
Directors or a duly authorized committee thereof.  Such payments shall not be reduced in the
event Employee obtains other employment following termination of employment.


 


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(d)           Upon
the Employee’s entitlement to benefits pursuant to Section 13(b), the Holding
Company, through the Bank, will cause to be continued for the Employee and his
previously covered dependents life, medical, dental and disability coverage
that the Employee agrees is substantially equivalent to the coverage maintained
by the Holding Company for Employee and his dependents prior to his termination
at no cost to the Employee. Such coverage and payments shall cease upon the
expiration of thirty-six (36) months following the Date of Termination.


 


14.           Parachute
Payment Provision.  In each calendar year
that the Employee is entitled to receive payments or benefits under the
provisions of the Agreement, the Holding Company shall determine if an excess
parachute payment (as defined in Section 4999 of the Internal Revenue Code of
1986, as amended, and any successor provision thereto (the “Code”)) exists.
Such determination shall be made after taking any reductions permitted pursuant
to Section 280G of the Code and the regulations thereunder. Any amount
determined to be an excess parachute payment after taking into account such
reductions shall be hereafter referred to as the “Initial Excess Parachute
Payment.”  As soon as practicable after a
Change in Control, the Initial Excess Parachute Payment shall be determined.
Upon the Date of Termination following a Change in Control, the Holding Company
shall pay the Employee, subject to applicable withholding requirements under
applicable state or federal law, an amount equal to:


 


(i)            twenty
(20) percent of the Initial Excess Parachute Payment (or such other amount
equal to the tax imposed under Section 4999 of the Code); and


 


(b)           such
additional amount (tax allowance) as may be necessary to compensate the
Employee for the payment by the Employee of state and local and federal income
and excise taxes on the payment provided under Clause (a) and on any payments
under this Clause (b). In computing such tax allowance, the payment to be made
under Clause (a) shall be multiplied by the “gross up percentage”(“GUP”).  The GUP shall be determined as follows:


 




	
  GUP =

  	
   

  	
  Tax Rate

  	
   

  
	
   

  	
   

  	
  1-Tax Rate

  	
   

  






 


The “Tax Rate” for purposes of computing the GUP shall
be the sum of the highest marginal federal and state and local income and
employment-related tax rates, including any applicable excise tax rates,
applicable to the Employee in the year in which the payment under Clause (a) is
made.


 


(c)           Notwithstanding
the foregoing, if it shall subsequently be determined in a final judicial
determination or a final administrative settlement to which the Employee is a
party that the excess parachute payment as defined in Section 4999 of the Code,
reduced as described above, is more than the Initial Excess Parachute Payment
(such different amount being hereafter referred to as the “Determinative Excess
Parachute Payment”) then the Holding Company’s independent accountants shall
determine the amount (the “Adjustment Amount”) the Holding Company must pay to
the Employee in order to put the Employee in the same position as the


 


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Employee would have been if the Initial Excess Parachute Payment had
been equal to the Determinative Excess Parachute Payment. In determining the
Adjustment Amount, independent accountants of the Holding Company shall take
into account any and all taxes (including any penalties and interest) paid by
or for the Employee or refunded to the Employee or for the Employee’s benefit.
As soon as practicable after the Adjustment Amount has been so determined, the
Holding Company shall pay the Adjustment Amount to the Employee. In no event
however, shall the Employee make any payment under this paragraph to the
Holding Company.


 


(d)           For
purposes of the foregoing, in the event there is any disagreement between
Employee and the Holding Company as to whether one or more payments to which
Employee becomes entitled under this Agreement constitute parachute payments
under Code Section 280G or as to the determination of the Initial Excess
Parachute Payment or the Determinative Excess Parachute Payment, such dispute
will be resolved as follows:


 


(i)            In
the event temporary, proposed or final Treasury Regulations in effect at the
time under Code Section 280G (or applicable judicial decisions) specifically
address the status of any such payment or the method of valuation therefor, the
characterization afforded to such payment by the Treasury Regulations (or such
decisions) will, together with the applicable valuation methodology, be
controlling.


 


(ii)           In
the event Treasury Regulations (or applicable judicial decisions) do not
address the status of any payment in dispute, the matter will be submitted for
resolution to a nationally-recognized independent accounting firm mutually
acceptable to Employee and the Holding Company (“Independent Accountant”).  The resolution reached by the Independent
Accountant will be final and controlling; provided, however, that if in the
judgment of the Independent Accountant, the status of the payment in dispute
can be resolved through the obtainment of a private letter ruling from the
Internal Revenue Service, a formal and proper request for such ruling will be
prepared and submitted, and the determination made by the Internal Revenue
Service in the issued ruling will be controlling.  All expenses incurred in connection with the
retention of the Independent Accountant and (if applicable) the preparation and
submission of the ruling request shall be borne by the Holding Company.


 


15.           Modification.  This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by written instrument duly executed by each party.


 


16.           Notices.  Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested or delivered against receipt to the
party at the address set forth following the signature line of this Agreement
or to such other address as the party shall have furnished in writing.  Notice to the estate of Employee shall be
sufficient if addressed to Employee as provided in this Section 16. Any notice
or other communication given by certified mail shall be deemed given at the
time of certification thereof, except for a notice changing a party’s address
which shall be deemed given at the time of receipt thereof.


 


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17.           Dispute
Resolution Procedures.  Except with
respect to any claim for equitable relief (the pursuit of which shall not be
subject to the provisions of this Section 17), any controversy or claim arising
out of or this Agreement or the Employee’s employment with the Holding Company
or the termination thereof, including, but not limited to, any claim of
discrimination under state or federal law, shall be settled by binding
arbitration in accordance with the Rules of the American Arbitration
Association; and judgment upon the award rendered in such arbitration shall be
final and may be entered in any court having jurisdiction thereof. Notice of
the demand for arbitration shall be filed in writing with the other party to
this Agreement and with the American Arbitration Association. In no event shall
the demand for arbitration be made after the date when the institution of legal
or equitable proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitations. This
agreement to arbitrate shall be specifically enforceable under the prevailing
arbitration law. Any party desiring to initiate arbitration procedures
hereunder shall serve written notice on the other party. The parties agree that
an arbitrator shall be selected pursuant to these provisions within thirty (30)
days of the service of the notice of arbitration. In the event of any
arbitration pursuant to these provisions, the parties shall retain the rights
of all discovery provided pursuant to the California Code of Civil Procedure
and the Rules thereunder.  Any
arbitration initiated pursuant to these provisions shall be on an expedited
basis and the dispute shall be heard within one hundred twenty (120) days
following the serving of the notice of arbitration and a written decision shall
be rendered within sixty (60) days thereafter. All rights, causes of action,
remedies and defenses available under California law and equity are available
to the parties hereto and shall be applicable as though in a court of law. The
parties shall share equally all costs of any such arbitration.


 


18.           Miscellaneous.


 


(a)           This
Agreement is drawn to be effective in the State of California and shall be
construed in accordance with California laws, except to the extent superseded
by federal law. No amendment or variation of the terms of this Agreement shall
be valid unless made in writing and signed by Employee and a duly authorized
representative of the Bank.


 


(b)           Any
waiver by either party of a breach of any provision of this Agreement shall not
operate as to be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Agreement. The failure of a
party to insist upon strict adherence to any term of this Agreement on one or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Any waiver must be in writing.


 


(c)           Employee’s
rights and obligations under this Agreement shall not be transferable by
assignment or otherwise, such rights shall not be subject to commutation,
encumbrance or the claims of Employee’s creditors, and any attempt to do any of
the foregoing shall be void. The provisions of this Agreement shall be binding
upon and inure to the benefit of the Holding Company and its successors and
those who are its assigns under Section 13.


 


(d)           This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by a person not a party to this Agreement (except as provided in
subsection (c) above).


 


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(e)           The
headings in this Agreement are solely for the convenience of reference and
shall be given no effect on the construction or interpretation of this
Agreement.


 


(f)            This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with the laws
of the State of California, without giving effect to conflict of laws, except
where federal law governs.


 


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IN WITNESS WHEREOF, the Holding Company and Employee have executed
this Agreement to be effective as of the day and year written above.


 


 


	
  HOLDING COMPANY:

  	
  COMMERCIAL CAPITAL BANCORP 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen H. Gordon

  	
   

  
	
   

  	
   

  	
  Stephen H. Gordon 

  
	
   

  	
   

  	
  Chairman and Chief Executive Officer 

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  8105 Irvine Center Drive 

  
	
   

  	
   

  	
  Suite 1500

  
	
   

  	
   

  	
  Irvine, CA 92618

  
	
   

  	
   

  
	
  EMPLOYEE:

  	
   

  	
  /s/ James R. Daley

  	
   

  
	
   

  	
   

  	
  James R. Daley 

  
					



 


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