SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made as of this3._'1y of 

s~~~io~3, by, between, and among the following undersigned parties: 

The Federal Deposit Insurance Corporation as Receiver for 1st Centennial Bank, (the 

"FDIC-R"), and James R. Appleton, Bruce J. Bartells, Carole H. Beswick, Larry F. Jacinto, 

Ronald J. Jeffrey, William A. McCalmon, Patrick J. Meyer, Stanley C. Weisser, Douglas F. 

Welehir, Thomac: 0. Vessey, John Lang and Clifford N. Schoonover (collectively the "Settling 

Defendants"). Individually, the FDIC-R and the Settling Defendants may be referred to herein as 

a "Party" and collectively as the "Parties." 

RECITALS 

WIIEREAS: 

Prior to January 23, 2009, 1st Ccntcrmial Bank ("Bank") was a depository institution 

organized and existing under the laws of the State of California. 

On January 23, 2009, the Bank was closed by the California Department of .Financial 

Institutions and pursuant to 12 U.S.C. § 1821(c), the Federal Deposit Insurance Corporation was 

appointed as receiver. In accordance with 12 U.S.C. § 182l(d), the FDIC-R succeeded to all 

rights, titles, powers and privileges of the Bank, including those with respect to its assets. 

Among the assets to which the FDIC-R succeeded were any and all of the Bank's claims, 

· demands, and causes of actions against its former directors, officers and employees arising from 

the perfonnance, nonperformance and matmer of performance of their respective functions, 

duties and acts as directors and/or officers of the Bank. 

On August 25, 2011, the FDIC-R filed a First Amended Complaint for money damages 

against the Settling Defendants, who had each served at various times as directors and/or officers 

of the Bank. Those claims for damages arc now pending in the United States District Court for 

the Central District of California in FDIC as Receiver fnr Jst Centennial Bank v. Appleton, et al., 

Case No. CV-11-00476 (C.D. Cal.) (the "D&O Action"). The Settling Defendants have denied 

la-1221361 
liability in the D&O Action. 

On August 8, 2013, an insurance company (the "D&O Carrier'') and the Parties executed 

a Tenn Sheet. 

The undersigned Parties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty, trouble, a.lld expense of further litigation. 

NOW, THEREFORE, in consideration of the promises, undertakings, payments, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the 

undersigned Parties agree, each with the other: as follows: 

SECTION 1: Payment to FDIC-R 

A. As an essential covenant and condition to this Agreement, the Settling Defendants 

and the D&O Carrier, collectively: agree to pay the FDIC-R the sum of SEVEN MILLION TWO 

HUNDRED AND FIFTY THOUSAND DOLLARS ($7,250,000.00) (the ('Settlement funds"). 

The D&O Carrier shall pay $6,500,000.00 and the Settling Defendants, jointly and severally, 

shall collectively pay $750,000.00. The Settlement Funds shall be received by the FDIC-R by no 

later than September 9, 2013. 

B. The Settlement Funds shall be delivered to FDIC-R by direct wire transfer to the 

following account. 

BANK: Federal Home Loan Bank ofNew York, Main Office, 101 Park Avenue, 

New York, New York 10178-0599. (212) 681-6000 (telephone); 212-441-6890 (facsimile). 

(b)(4) ROUTINGNUMBER:f._·······-····· __ ____. 

FOR CREDIT TO: FDIC National Liquidation Account, Account #._I __ ......... .............. _ l..... m(~)(~) 

OBI: 1st Centennial Bank, Redlands, California (FIN 1 0030); Professional 

Liability (37100) DIF Fund; Contact- Gregory K. Conway (703) 516-1279. 

C. In the event that the Settlement funds payable by the Settling Defendants are not 

received by the FDIC-R by September 9, 2013, interest shall acc~c on the unpaid amount at the 

rate of 5 percent per annum from September 9, 2013 until the date of payment. However, if said 

Settlement Funds are not delivered to the FDIC-R by September 9, 2013, as a result of the FDIC2 
R's failure to execute this Agreement, no interest shall accrue until three days after the FDIC-R 

executes the Agreement. 

D. In the event that the Settlement Funds payable by the 0&0 Carrier are not 

received by the FDIC-R on or before September 9, 2013, then the FDIC-R may declare this 

Agreement null and void, and may pursue all remedies against the D&O Carrier and the Settling 

Defendants, including, among other things, enforcing the August 8, 2013 Term Sheet. In the 

event that the Settlement Funds payable by the Settling Defendants are not received by the 

FDIC-R on or before September 9, 2013, then, with respect to any Settling Defendant that tails 

to deliver his or her share of the Settlement Funds only, the FDIC-R, in its sole discretion, shall 

have the right at any time prior to receipt of such Settlement Funds (including all accrued 

interest) to declare this Agreement null and void, shall have the right to extend this Agreement 

for any period of time until it receives such Settlement Funds (including all accrued interest), 

and/or shall have the right to enforce this Agreement against the Settling Defendants failing to 

deliver their share of the Settlement Funds, in which event the non-delivering Settling Defendant . agrees to jurisdiction in the United States District Court for the Central District of California and 

agrees to pay all of the FDIC-R'~ reasonable attorney's fees expended in enforcing the tenns of 

this Agreement. Any decision by the FDIC-R to extend the terms of this Agreement or to accept 

a portion of the Settlement Funds shall not pr~judicc its rights to declare this Agreement null and 

void with respect to the non-delivering Settling Defendant, at any time prior to receipt of all 

Settlement Funds (including all accrued interest) or to enforce the terms of this Settlement 

Agreement; provided however, that in the event the ..FDIC-R declares this Agreement null and 

void, the FDIC-R will return all amounts paid to it under this Agreement. 

3 
SECTION II: Stipulation and Dismissal 

Upon execution of this Agreement by each of the undersigned Parties, and receipt of the 

Settlement Funds, plus any accrued interest, the FDIC~R shall within tluee days file a dismissal 

· of the D&O Action with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(l), with 

each Party to bear its own costs as these were originally incurred. 

SECTION III: Releases 

A. Release of the Settling Defendants by }'DIC-R. 

Effective upon receipt in full of the Settlement Funds a.11d the dismissal described in 

Sections I. and II. above, and except as provided in Paragraph III.C. below, the FDIC-R, for 

itself and its successors and assigns, hereby releases and discharges each of the Settling 

Defendants and their respective heirs, executors, administrators, representatives, successors and 

assigns, from any and all claims, demands, obligations, damages, actions, and causes of action, 

direct or indirect, in law or in equity, belonging to the FDIC-R, that arise from or relate to the 

performance, nonperfmmance, or manner of performance of the Settling Defendants' respective 

functions, duties and actions as officers and/or directors of the Bank, including, without 

limitation, the causes of action alleged in the D&O Action. 

B. Release of FDIC-R by the Settling Defendants. 

Effective simultaneously with the release granted in Paragraph III.A. above, the Settling 

Defendants, on behalf of themselves individually, and their respective heirs, executors, 

administrators, representatives, successors and assigns, hereby release and discharge the FDICR, and its employees, officers, directors, representatives~ successors and assigns, from any and 

all claims, demands, obligations, damages, actions, and causes of action, direct or indirect, in law 

or in equity, that arise from or relate to the Bank or to the performance, nonperformance, or 

manner of performance of the Settling Defendants' respective functions, duties and actions as 

officers and/or directors of the Bank or that arise from or relate to the Policy, including, without 

limitation, the causes of action alleged in the D&O Action. 

4 
C. Express Reservations from Releases by }""DIC-R. 

1. Notwithstanding any other provision, by this Agreement, the FDIC-R does not 

release, and expressly preserves fully and to the same extent as if the Agreement had not been 

·executed, any claims or causes of action: 

a. against the Settling Defendants or any other person or entity for liability, if 

any, incurred as the maker, endorser or guarantor of any promissory note or indebtedness 

payable or owed by them to the FDIC-R, the Bank, other financial institutions, or any other 

person or entity, including, without Hmitation, any claims acquired by the FDIC-R as successor 

in interest to the Bank or any person or entity other than Bank; 

b. against any person or entity not expre_ssly released by the FDIC-R in this 

Agreement; and 

c. which are not expressly released in Paragraphs liLA. above. 

2. Notwithstanding any other provision, nothing in this Agreement ~hall be 

construed or interpreted as limiting, waiving, releasing or compromising the jurisdiction and 

authority of the Federal Deposit Insurance Corporation in the exercise of its supervisory and/or 

regulatory authority or to diminish its ability to institute administrative enforcement proceedings 

seeking removal, prohibition or any other administrative enforcement action, which may arise by 

operation oflaw, rule or regulation. 

3. Notwithstanding any other provision, this Agreement does not purport to 

waive, or intend to waive, any claims which could be brought by the United States through either 

the Department of Justice, the United States Attorney>s Office for the Central District of 

California or any other federal judicial district. In addition, the FDIC-R specifically reserves the 

right to seck court ordered restitution pursuant to the relevant provisions of the Victim and 

Witness Protection Act, 18 U.S.C. § 3663, et. seq., if appropriate. 

D. Cal. Civ. Code Section 1542 

The Parties agree that the releases provided in this Agreement include and encompass a 

release and waiver of any and all rightq or benefits conferred by provisions of Section 1542 of 

5 
tht: California Civil Code and/or any other federal statute or common law principle of similar 

effect. In connection with this waiver, the Parties hereby acknowledge that they arc aware that 

they may hereafter discover claims or facts in addition to, or different from, those which they 

now know or believe to exist with respect to the subject matter of this Agreement. The Parties 

ackno~lcdge that they have been advised by counsel and arc familiar with the provisions of 

Section 1542 of the California Civil Code, which provides as follows: 

A general release does not extend to claims which the creditor does not know or 

suspect to exist in his or her favor at the time of executing the release, which if 

known by him or her must have materially affected his or her settlement with the 

debtor. 

SECTION IV: Waiver of Dividends and Litigation Proceeds 

To the extent, if any, that Settling Defendants are or were creditors or shareholders of the 

Bank and/or 1st Centennial Bancorp and by virtue thereof are or may have been entitled to a 

dividend, payment, or other distribution upon resolution of the receivership ofthe Bank or any 

proceeds in any litigation that has or could have been brought against the United States based on 

or arising out of, in whole or in part, the closing of the Bank, or any alleged acts or omissions by 

the Federal Deposit Insurance Corporation, FHLBB, OTS, RTC, FSLIC Resolution Fund or the 

United States Government in connection with the Bank or its receivership, they hereby 

knowingly assign to the FDIC-R any and all rights, titles and interest in and to any and all such 

dividends, payments or other distributions, or such proceeds. 

SECTION V: Representations and Acknowledgements 

A. No Admission of Liability. The undersigned Parties each acknowledge and 

agree th~t the matters set forth in this Agreement constitute the settlement and compromise of 

disputed claims, and that this Agreement is not an admission or evidence of liability by any of 

them regarding any claim. 

B. Execution in Counterparts. This Agreement may be executed in counterparts 

by one or more of the Parties named herein and all such counterparts when so executed shall 

6 
together constitute the final Agreement, as if one document had been signed by all Parties hereto; 

and each such counterpart, upon execution and delivery, including delivery of any counterpart by 

facsimile or email, shal1 be deemed a complete original, binding the party or parties subscribed 

thereto upon the execution by all Parties to this Agreement. 

C. Binding Effect. Each of the undersigned persons represents and warrants that 

they are a Party hereto or are authorized to sign this Agreement on behalf of the respective Party, 

and that they have the full power and authority to bind such Party to each and every provision of 

this Agreement. This Agreement shall be binding upon and inure to the benefit of the 

undersigned Parties and their respective heirs, executors, administrators, representatives, 

successors and assigns. 

D. Choice of Law. This Agreement shall be interpreted, construed and enforced 

. according to applicable federal law, or in its absence, the laws of the State of California. 

R. Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and understanding between and among the undersigned Parties concerning the matters 

set forth herein. This Agreement may not be amended or modified except by another written 

instnunent signed by the Party or Parties to be bound thereby, or by their respective authorized 

attomey(s) or other representative(s). 

F. Reasonable Cooperation. The undersigned Parties agree to cooperate in good 

faith to effectuate all the terms and conditions of this Agreement, including doing or causing 

their agents and attorneys to do, whatever is rea~onahly necessary to effectuate the signing, 

delivery, execution, filing, recording, and entry, of any documents necessary to conclude the 

D&O Action, and to otherwise perform the terms of this Agreement. 

G. Advice of Counsel. Each Party hereby acknowledges that it has consulted with 

and obtained the advice of counsel prior to executing this Agreement, and that this Agreement 

has been explained to that Party by its counsel. 

H. Agreement Not Confidential. Pursuant to 12 U.S.C. § 1821(s), this Agreement 

cannot be and shall not be deemed to be confidential. 

7 
I. Defendants' Financial Statements. Withln 3 days ofthe filing of the dismissal 

of the D&O Action, outside counsel for the FDIC-R will return to counsel for the Settling 

Defendants the original and all copies in their possession of the financial infonnation forms 

provided by the Settling Defendants, but nothing in this Agreement shall require the FDIC-R to 

return personal financial disclosure forms provided by the Settling Defendants in its possession. 

IN WITNESS WHEREOF, the Parties hereto hav~ caused this Agreement to be executed 

by each of them or their duly authori:;o:ed representatives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORAtiON 

AS RECEIVER FOR 1ST CEl'ilENNIAL BANK 

Date:tlf/t,P. 

SETIUNG DEFENDA!'ITS 

Date: ____ _ 

Date:---- --

Date: ____ _ 

Date: _____ _ 

Date: ____ _ 

BY: ----·lL. -:---~--_ ..... _ ......... _ ......... _ ......... _ ..... -----~~·· ······- - -- (b)(6) 

TITLE: Counsel 

PRINT NAME: Gregory K. Conway 

--------- -·- ·~ .. - James R. Appleton 

Bruce J. Bartells 

Carole H. Beswick 

Larry P. Jacinto 

. Ronald J. Jeffrey 

8 
Date: ____ _ 

William A. McCalmon 

Date: _____ _ 

Patrick J. Meyer 

Date: _____ _ 

Stanley C. Weisser 

Date: _____ _ 

Douglas F. Welebir 

Date: _____ _ 

Thomas 0. Vessey 

bate: _____ _ 

John Lang 

Date: _____ _ 

Clifford N. Schoonover 

9 
Aug 30 13 1 0:03a 

p.9 

(b)(6) 

I. Defendants' Financial Statements. Within3 days of the filing of the dismissal 

of the D&O Action, outside counsel for the FOIC-R will return to counseJ for the Settling 

Defendants the original and all copies in their possession of the financial information fonns 

provided by the Settling Defendants, but nothing in this Agreement shall require the FDIC-R to 

return personal financial disclosure forms provided by the Settling Defendants in its possession. 

IN WITl\ESS WHEREOF, the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates hereinafte r subscribed. 

FEDERAL DEPOSIT I~SLRANCE CORPORATION 

AS RECEIVER FOR 1 ST CENTENNIAL BANK 

Date: BY: ---

TITLE: Counsel 

PRINT NAME: Gregory K. Conway 

SETTLING DEFEJ\"DA~TS 

············································· ····· .. ··············• .......... . 

.., rr 

Date ft-. ~ \ a- ~~ < ~ 

' 

+ ~Jrum-·e- R~.-A~p-p~L-et_o_n~tvv----------~ 

i / IJ 

Date: _____ _ 

I3 ruce J. Bartells 

Date: - - --- Carote H. Aeswiek 

Da1e: - - ·- -- Larry F. Jacinto 

Date: 

Ronald J. Jeffrey 

8 
(b)(6) 

I. Defendants' Financial Statements. Within 3 days of the filing of the dismissal 

of the D&O Action, outside counsel for the FDIC-R wiU return to counsel for the Settling 

Defendants the original and all copies in their possession of the financial infonnation fonns 

provided by the Settling Defendants, but nothing in this Agreement shall require the FDIC-R to 

return personal fmancial disclosure forms provided by the Settling Defendants in its possession. 

IN WI1NESS WHEREOF; the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

AS RECEIVER FORt 51' CENTENNIAL BA..!~K 

Date: _____ _ BY: ------------------------- TITLE: Counsel 

PRINT NA.i\1E: Gregory K. Conway 

SETTLING DEFENDANTS 

Date: ----- James R. Appleton 

·····················L....-1 ~~------' Bruce<f'Bartells 

Date~ ----- Carole H. Beswick 

Date: ____ ........._.. 

La.rry F. Jacinto 

Date: .................. ~~--

Ronald J. Jeffrey 

8 
L Defendants' Financial Statements. Within 3 days of the filing of the dismissal 

of the D&O Action, outside counsel for the FDIC-R will return to counsel for the Settling 

Defendants the original and all copies in their possession of the financial information forms 

provided by the Settling Defendants, but nothing in this Agreement shall require the FDIC~R to 

retum personal financial disclosure forms provided by the Settling Defendants in its possession. 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed 

by each of th.e.m or their duly authorized representatives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

AS RECEIVER FOR 1sT CENTENNIAL BANK 

ate: --~--- BY: --------------------------- TITLE: Counsel 

PRJNT NAME: Gregory K. Conway 

SETTLING DEFENDANTS 

Date: ---- -- James R Appleton 

Date: ------ Bruce I . Bartells 

(b)(6) ............. ....... .. ............. ....... . ....... . I 

Date: t ·-3o ·- J~ ············ ....... ····················· .... :;:s ·········-=········=········=······= ······=········=· =---,_==------..J .. ;;; 

Carole H. Beswick 

Date: ----- - Larry F. Jacinto 

Date: 

------ Ronald J. Jeffrey 

8 
Date: __ _ 

Carole H. Beswick ./ 

... ~· 

..................................................................................... 

<b)< 6) ..................................................................................................................................................................................................................................... ....... I 

L_----r----r----

Larry F, .. Mdnto ( 

Dat.e: ____________ _ 

Date: ... ..... 

·Date:-········ ---- ~ ___ ........ 

Date: __ .;......._ 

/ 

/ /' 

R.o.nald J. Jeffrey 

W.

1 111a . m A 1'1cCalmon :'!.. · i:v. 

--- ---------

Patrick l Meyer 

Stanley C .. Weisser 

---. ______ .......,_·-···· 

Douglas F .. Welebir: 

Thomas (), Vessey 
08 / 30/2013 11:14 FAX 1410008/ 0009 

(b)(6) 

I. Defendants' Financial Statements. Within 3 days of the filing of the dismissal 

of the 0&0 Action, outside counsellor the FDJ.C-R will return to counsel for the Settling 

Defendants the original and all copies in their possession of the financial information fonns 

provided by the Settling Defendants, but nothing in this Agreement shall require the FDIC-R to 

return personal financial disclosure forms provided by the Settling Defendants in its possession. 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authoriz:ed representatives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

AS RECEIVER FOR I ST CENTENNIAL BANK 

Date: ------

SETTLING DEFENDANTS 

Date:------

Date: _____ _ 

Date: 

Date: --··-·- ·---

--------

Date: f- 3b __ -:::__!.> 

BY: - --------------------

TITLE: Counsel 

PRINT NAME: Gregory K. Conway 

James R. Appleton 

Bruce J. Bartells 

Carole H. Beswick 

Larr F. Jacinto 

8 
(b)(6) 

·························································-············ ··························!······· I ······································ .. ······································· . 

Date: 0 r:>_~o--;J. - . ...; L~~~=----- William A. McCalmon 

Date: _____ _ 

Patrick J. Meyer 

Date: _____ _ 

Stanley c_ Weisser 

Date: _____ _ 

Douglas F. Wclebir 

Date: ______ _ 

Thomas 0. Vessey 

Date: ______ _ 

iohn Lang 

Date: _____ _ 

Clifford N _ Schoonover 

9 
Aug 30 13 07:30a Patrick Meyer 9093359747 p.10 

Date: ___ _ _ _ 

Willi 

(b)(6) ...................................... ...................... ....................................................................... 

Date: _8 -~ -2£;>{-g 

Date: 

Stanley C. Weisser 

Date: 

- - ---- Douglas F. Welebi~ 

Date: - - - Thomac; 0. Vessey 

Date: _ _ _ _ _ 

JolmLang 

Date: - - ---- Clifford N. Schoonover 
Date: ____ _ 

William A. McCalmon 

Date: ___ _ _ 

Patrick J. Me ·er 

(b) ( 6) ............................................................................................................................................................................................................................ • .................................................................................................................. .. 

Date: ____ _ 

Douglas F. Welebir 

Date: ____ _ 

Thomas 0. Vessey 

Date: ~----

John Lang 

Date: ____ _ 

Clifford N. Schoonover 

9 

I (b~(~) I 

(b)(6) .. ..... c·:d ................................................. 1L ........ _ .. ___ ____. Ll ___ ··············································· J d6t::ll~\~6£ Bnv 
Date: ____ _ 

William A. McCalmon 

Date: ____ _ 

Patrick J. Meyer 

Date: ____ _ 

Stanley c. Weisset 

Date: ____ _ 

Thomas 0. Vessey 

Date: ____ _ 

Joh11Lang 

Clifford N. Schoonover 

9 
Date: ____ _ 

Willia111 A McCalmou 

Date: ···--- ----·----·-- ··-·· · ·· --- .. ···---- P;trick -J. Meyer 

Date: ____ _ _ 

Stanley C. Wcis:oer 

Dale:------

(b)(6) ------·-----------·-----.. ·-------......... " ..................... " ................... ..... , ........................ _,-................ .. 

ct· .. ·:\ ,'i-vr ) . \ "2- 'J :fi_ ....) 

Date: ' _ . . ....... ~ .. 

Thomas 0. Vessey 

\ 

Date: I 

\. 

Datl:: ---·--·--- Clifford N. Scho<.movcr 
04 / €1:1/2813 08:23 003gi381 8L1744137 HTLCORALLO 

RICEVuTO B3/09/2a l 3 22:51 BB39a818074487 

09/ 03 / 2013 13 : 52 FAX 121389254 54 )Jorrison I Foerst:er 2 

Date: ------ William A. McCalmon 

Date:----..:...--

Patrick J. Meyer 

Date;------

Stanley C." WeissexDme: _______ _ 

Douglas F. Welebir 

Date:-------

ThomasO. Vessey 

(b)(6) 

Date:------

Clifford N. Scboonov~ 

9 

PAG 0li01 

HTLCORALLO ~001.\ 0017 
p.2 

Date: _ ____ __ __ _ _ 

William A. McCalmon 

Date: ___ _ _ _ 

Patrick J. Meyer 

Date:------ Stanlev c. Weisser 

Date: _ ...... ····--- Douglas F. WcJebir 

Dale: - ··-···· ·- - - ----------· ·· ·- ··~----

Thomas 0. Vessey 

Date: - ··--········ ~Jo~~n~I~.an::=g:._ _________ l 

(b)(6) - o~;~:~~~;.'i; ~!3 +~~~fer l 

9