Document:

Exhibit 10.3

 

FIRST AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

This First Amended and
Restated Employment Agreement is made and entered into on March 26, 2009,
by and among Bank of Manhattan, N.A. (the “Bank”)
and Rick Sowers (“Executive”) for
the purposes set forth hereinafter (“Agreement”).

 

WITNESSETH

 

WHEREAS, Manhattan
Bancorp (“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 Operating Officer of the Bank
pursuant to an Employment Agreement dated January 22, 2009 between the
Bank and Executive (the “Prior Agreement”),
which Prior Agreement shall be amended and restated in its entirety by this
Agreement;

 

WHEREAS, it is the
intention of the parties to enter into an amended and restated employment
agreement for the purposes of amending certain provisions of the Prior
Agreement and assuring the continued services of Executive as Executive Vice
President and Chief Operating Officer of the Bank.

 

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

 

A.            TERM OF EMPLOYMENT

 

The term of this Agreement (“Term”)
shall commence January 22, 2009 (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 June 30, 2008 and November  20, 2008 (the “Stock Option Agreements”), which shall
remain in full force and effect.

 

B.            DUTIES OF EXECUTIVE

 

1.             Duties. 
Executive shall perform the duties of Executive Vice President and Chief
Operating Officer of the Bank, reporting directly to the President  and Chief Executive 

 

 

Officer
of the Bank, and subject, at all times, to the powers vested by law in the
Board (the “Board”) of the Bank and its
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 Articles of Association,
Bylaws and internal written policies.

 

2.             Conflicts of Interest.  Except as permitted by the prior written
consent of the Board of Bank, Executive shall devote Executive’s entire
productive time, ability and attention to the business of the Bank 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
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 shall pay or cause to be
paid as annual base salary (the “Base Salary”)
to Executive not less than One Hundred Eighty Five Thousand Dollars ($185,000)
for the first year of the Term, with annual increases in the discretion of the
Board or the Bank’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 Board of the Bank in its 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 liability to Executive for any
breach of this paragraph shall be limited to the amount of 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 options to purchase up to 52,000 of shares of
MB’s authorized but unissued 

 

 

Common
Stock, at the fair market value of such stock at the date of the grants of such
options.  Such options have terms of ten (10) years
from the respective dates of the granting thereof 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
options will qualify as “incentive stock options” 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 for any
ordinary and necessary business expenses incurred by Executive in the
performance of Executive’s duties in accordance with the Bank’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 as a business expense and not as deductible
compensation to Executive; and Executive furnishes to the Bank 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 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.  Termination under
this Paragraph shall not prejudice any remedy that the Bank 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 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 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 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 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 may at any
time without Cause and for any reason immediately terminate this Agreement and
Executive’s employment by the Bank by action of its Board.  Upon such termination by the Bank all
benefits provided by the Bank 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 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 resignations as Bank or MB may
request.  Notwithstanding the foregoing,
it is agreed that in the event of such termination without Cause by the Bank
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 twelve (12) 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
twelve (12) 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; provided, however, that the Bank’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
12-month period.  Executive agrees to
advise the Bank 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 Operating Officer
of the Bank is terminated without Cause by the Bank, 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 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
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 or
MB 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 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.”

 

(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 Bank, MB 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 Bank and MB, 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.  Bank, MB 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.  Bank, MB and Executive further acknowledge
and agree that if, in the judgment of Bank and MB, with the advice of its
independent accounting firm or other tax advisors, amendment of this Agreement
is necessary to comply with Section 409A, Bank, MB 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 Bank, MB 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
Bank, MB 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.

 

8.             EESA Provisions.

 

(a)           MB
has entered into agreements with the U.S. Treasury Department (“UST”) under which Manhattan Bancorp issued preferred shares
(“Preferred Shares”) and other securities
to the UST as part of the Troubled Assets Relief Program Capital Purchase
Program (“CPP”) established under the Emergency
Economic Stabilization Act of 2008 (“EESA”).  Executive is a Senior Executive Officer (as
such term is defined under EESA), has determined that MB’s participation in the
CPP is of material benefit to Executive, approved MB’s participation in the
CPP, requested that MB participate in the CPP and agrees to abide by all
existing and future terms of EESA, and any regulations thereunder, restricting
payment of compensation to Executive.

 

(b)           EESA
imposes certain restrictions on employment agreements, severance, bonus and
incentive compensation, stock options and awards, and other compensation and
benefit plans and arrangements (“Plans”)
maintained by MB, Bank and their affiliates and requires that such restrictions
remain in place for so long as the UST holds any debt or equity securities
issued by MB or Bank.  The parties hereby
agree that all Plans providing benefits to Executive shall be construed and
interpreted at all times that the UST maintains any debt or equity investment
in MB or Bank in a manner consistent with EESA, and all such Plans shall be

 

 

deemed to have been amended
as determined by MB and Bank so as to comply with the restrictions imposed by
EESA.  Executive recognizes that such
changes may result in the reduction or elimination of benefits otherwise
provided to Executive under this Agreement or any other Plan.  Notwithstanding any other terms of this
Agreement or any other Plan providing benefits to Executive, to the extent that
any provision of this Agreement or any other Plan is determined by MB or Bank,
to be subject to and not in compliance with EESA, including the timing, amount
or entitlement of Executive to any payment of severance, bonus or any other
amounts, such provisions shall be interpreted and deemed to have been amended
to comply with the terms of EESA. 
Without limiting the foregoing, any “golden parachute payment” or other
severance payments due in connection with termination of Executive’s employment
with MB or Bank provided under this Agreement or any other Plan, as defined for
purposes of EESA and Section 280(G)(e) of the Internal Revenue Code
of 1986, as amended (“Code”),
including any benefits payable under Subparagraphs F.4 and F.5, shall be
prohibited if such termination occurs while the Preferred Shares remain
outstanding and held by the UST.  The
parties hereto further agree that (i) Executive shall at no time be
entitled to receive any compensation based upon incentives that encourage
Executive to take unnecessary and excessive risks on behalf of Bank or MB; (ii) Executive
shall promptly repay Bank, MB or any other affiliated entity compensating
Executive, within thirty (30) days of demand, the amount of any bonus or
incentive compensation paid to Executive based upon statements of earnings,
gains or other criteria that are later determined to be materially inaccurate;
and (iii) all golden parachute payments to Executive are prohibited.

 

G.            GENERAL PROVISIONS

 

1.             Trade Secrets.  During the Term, Executive will have access
to and become acquainted with what Executive and the Bank acknowledge are trade
secrets, to wit, knowledge or data concerning the Bank, including their
operations and methods of doing business, and the identity of customers of the
Bank, 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.

 

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 shall 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 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
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 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 shall endeavor to
apply for and obtain Directors and Officers Liability Insurance to indemnify
and insure the Bank 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 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
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.  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 Executive.

 

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 at its
main office and to Executive at the address then maintained by the Bank 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 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 on the other hand. 
In disputes where Executive asserts a Statutory Claim against the Bank,
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.

 

 

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/ Rick Sowers

  	
   

  	
   

  	
   

  	
   

  
	
  Rick Sowers

  	
   

  	
   

  	
   

  	
   

  
	
  (“Executive”)

  	
   

  	
   

  	
   

  	
   

  

 

 

WAIVER AND RELEASE AGREEMENT

 

This Waiver and Release
Agreement (the “Waiver Agreement”)
is entered into by and between Rick Sowers (“Employee”)
and Bank of Manhattan, N.A. on its 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 March 26, 2009 (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:

 

 

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:

  	
   

  
	
   

  	
  Rick Sowers

  
	
   

  	
   

  
	
  DATED:

  	
   

  
	
   

  	
  Bank of Manhattan, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Jeffrey M. Watson

  
	
   

  	
  President & Chief Executive OfficerExhibit 10.1

 

CAPMARK
FINANCIAL GROUP INC.

 

SEVERANCE
PAY PLAN

 

AMENDMENT

 

Capmark Financial Group Inc. (the “Company”) adopted the Capmark
Financial Group Inc. Severance Pay Plan. (as amended, the “Plan”).  The Company hereby amends the Plan as
hereinafter set forth.  This Amendment is
effective on its execution date.

 

1. Subsection 5(a)(ii) is amended to
read as follows:

 

“(ii) Exempt Employees

 

(A) Executive Officers: For an
eligible Employee who is an Executive Officer, other than the Chief Executive
Officer of the Company, the benefit is the Employee’s Base Pay Rate, subject to
the limitation of subsection 5(b)(v).

 

(B) Other Exempt Employees:  For an eligible Employee who is an exempt
employee under the Fair Labor Standards Act (other than an Employee described
in subsection 5(a)(ii)(A) above), the benefit is three weeks of pay at the
Weekly Pay Rate for each year of service, with a minimum of six weeks and a
maximum of 40 weeks, subject to the limitation of subsection 5(b)(v).”

 

2. 
Subsection 5(a)(iii) is amended to add a sentence at the end
thereof to read as follows:

 

“This subsection shall not apply to an
eligible Employee whose benefit is determined under subsection 5(a)(ii)(A),
above.”

 

3. Subsection 5(e) is amended to read as
follows:

 

“(e) Payment. Benefit payments
shall be paid in one lump sum. All benefit payments shall be subject to
applicable federal, state and local income tax withholding, payroll taxes and
other applicable deductions.  If a
Participating Company rehires an Employee before expiration of the period
applied to calculate the Employee’s benefit amount, the Employee will be
required to repay to the Participating Company the amount of benefit
attributable to the period of time for which the Employee is reemployed.  An Employee’s benefit shall be paid as soon
as administratively reasonable after satisfaction of all conditions precedent
for 

 

1

 

receipt of the benefit, but in any event no later than December 31st of the second calendar year following the
calendar year in which the Employee’s separation from service occurs.”

 

 

EXECUTED this 24th day of March, 2009.

 

 

	
   

  	
  CAPMARK FINANCIAL GROUP INC.

  
	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda A. Pickles

  

 

2

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