Document:

EXHIBIT
10.14

 

OPTION ANTI-DILUTION AGREEMENT

 

THIS
OPTION ANTI-DILUTION AGREEMENT (this “Agreement”) is entered into
effective as of May 11, 2005 by and between 1st Century Bank, N.A. (the “Bank”),
and Richard S. Cupp (“Cupp”), an individual residing in the State of
California.  This Agreement is made with
reference to the following facts and circumstances:

 

RECITALS

 

A.                                   The Bank and Cupp entered into that certain Stock
Option Agreement, effective as of February 24, 2004 (the “Option Agreement”)
for the option to purchase two hundred seventy thousand (270,000) shares of
common stock of the Bank (the “Options”), post two-for-one stock split
effective February 28, 2005, under the Bank’s 2004 Director and Employee
Stock Option Plan (the “Plan”).

 

B.                                     The parties hereto now desire to provide Cupp
with limited anti-dilution protection with respect to the Options issued
pursuant to the Option Agreement and provide for such other matters as the
parties hereto deem appropriate.

 

AGREEMENT

 

NOW
THEREFORE, in consideration of the foregoing recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.              Anti-Dilution
Protection.

 

(a) 
Upon the consummation of the Offering (as defined below), the Bank shall grant
to Cupp additional stock options under the Plan to purchase shares of capital
stock in the Bank equal to five percent (5.0%) of the additional shares of the
capital stock of the Bank issued in connection with the Offering (the “Additional
Options”).

 

(b) 
The Bank’s obligation to grant the Additional Options under this Agreement
shall continue until the earlier of the date of the dissolution or liquidation
of the Bank or the date of termination of Cupp’s “Continuous Service” as such
term is defined in the Plan.  For
purposes of this Agreement, the term “Offering” shall mean the first common
stock offering consummated by the Bank on a “best efforts” basis on or after
the effective date of this Agreement.

 

(c) 
Any Additional Option grants made to Cupp pursuant to this
Agreement shall be made subject to the same terms and conditions as the
Options, including vesting, except that the exercise price of the Additional
Options shall be made at the then “Fair Market Value” (as such term is defined
in the Plan) of the underlying shares but in no event less than the gross
offering price of the Offering.

 

 

(d) 
Cupp hereby acknowledges that the Additional Options may have a higher exercise
price than the Options.

 

(e) 
In the event the Plan does not have available a sufficient number of unreserved
shares of common stock to grant the Additional Options, the Bank shall grant
the maximum number of options available thereto under the Plan.  Thereafter, the Bank shall use its best efforts
to adopt a new option plan which shall contain substantially the same terms and
conditions as the Plan.  Subject to the
receipt of all required regulatory, Board of Directors and shareholder
approvals, and subject to compliance with all applicable securities laws, the
Bank shall issue such number of options under the new plan such that all
Additional Options have been issued as soon thereafter as possible; provided,
however, that this undertaking shall not require the Bank to register under the
Securities Act the new plan, any option or any stock issued or issuable
pursuant to any such option.  If, after
reasonable efforts, the Bank is unable to obtain from any such person the
requisite authority or consent which counsel for the Bank deems necessary for
the lawful issuance and sale of stock under the new plan or is otherwise unable
to obtain a valid exemption from registration for purposes of issuing options
under such new plan, the Bank shall be relieved from any liability for failure
to issue and sell stock upon exercise of such options unless and until such
authority or consent is obtained or a valid exemption from registration is
obtained.

 

2.              Representations and
Warranties of Cupp.  Cupp hereby
represents and warrants to the Bank that:

 

(a) 
as of the date of this Agreement, the Options held by
Cupp are owned legally and beneficially by Cupp and have not been hypothecated,
sold or otherwise pledged by Cupp.

 

(b) 
Cupp has had the opportunity to receive independent tax and
legal advice from attorneys of his choice with respect to the advisability of
executing this Agreement and is not relying on the Bank, any of its affiliates,
or their respective shareholders, directors, officers, employees, agents and/or
counsel for tax or legal advice.

 

The foregoing representations and warranties shall
survive the execution and delivery of this Agreement.

 

3.              No Employment or
Service Contract.  This Agreement is
not an employment or service contract, and nothing in this Agreement shall be
deemed to create in any way whatsoever any obligation of Cupp to continue in
the employ of the Bank or any affiliate thereof, or of the Bank or any of its
affiliates to continue to employ Cupp. 
In addition, nothing in this Agreement shall obligate the Bank or any of
its affiliates or their respective shareholders, directors, officers and/or
employees to continue any relationship that Cupp might have as a director,
officer or consultant for the Bank or an affiliate thereof.

 

4.              Expenses.  Each party hereby acknowledges and agrees that
such party shall be liable for its own costs and expenses incurred in
connection with the negotiation, preparation, execution and performance of this
Agreement.

 

 

5.              Arbitration.  Any dispute or controversy arising under or
in connection with this Agreement, the inception or termination of the Cupp’s
employment, or any alleged discrimination 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 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 the Cupp would 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 the Cupp 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. Cupp and the
Bank shall each bear his or its own costs and attorneys’ fees incurred in
conducting the arbitration and, except in such disputes where Cupp asserts 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.  In disputes where
Cupp asserts a Statutory Claim against the Bank, Cupp 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. 
Cupp 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.

 

6.              Miscellaneous.

 

(a) 
Cooperation.  Each party
hereto agrees to perform any further acts, and to execute and deliver (with
acknowledgement, verification and/or affidavit, if required) any further
documents and instruments, as may be reasonably necessary or advisable to
implement and/or accomplish the provisions of this Agreement and the
transactions contemplated herein.

 

(b) 
Amendment.  This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.

 

(c) 
Entire Agreement.  This
Agreement constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof.

 

 

(d) 
Assignment.  This
Agreement is personal in nature and Cupp may not assign its rights or delegate
the performance of its duties under this Agreement without the prior written
consent of the Bank.  Any purported
assignment without such consent shall be void and of no force or effect.

 

(e) 
Parties in Interest. 
This Agreement shall be binding upon and inure solely to the benefit of
and be enforceable by each party and its respective successors and permitted
assigns.

 

(f) 
Governing Law.  This
Agreement shall be governed by and construed under the laws of the State of
California, except to the extent the laws of the United States of America are
mandatorily applicable.

 

(g) 
Counterparts.  This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.

 

IN WITNESS WHEREOF, each
of the parties hereto that is not a natural person has caused this Agreement to
be executed on its behalf by its officers or other persons thereunto duly
authorized, all as of the day and year first above written.

 

	
   

  	
  1st Century Bank, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey M. Watson

  
	
   

  	
   Name:

  	
   Jeffrey M. Watson

  
	
   

  	
   Title:

  	
   Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Richard S. Cupp

  
	
   

  	
  Richard S. CuppEXHIBIT
10.15

 

OPTION
ANTI-DILUTION AGREEMENT

 

THIS
OPTION ANTI-DILUTION AGREEMENT (this “Agreement”) is
entered into effective as of May 11, 2005 by and between 1st Century Bank,
N.A. (the “Bank”), and Alan I. Rothenberg (“Rothenberg”), an individual residing
in the State of California.  This
Agreement is made with reference to the following facts and circumstances:

 

RECITALS

 

A.            The Bank and Rothenberg entered into that certain Stock Option Agreement,
effective as of February 24, 2004 (the “Option Agreement”) for the option
to purchase three hundred seventy thousand (370,000) shares of common stock of
the Bank (the “Options”), post two-for-one stock split effective February 28,
2005, under the Bank’s 2004 Director and Employee Stock Option Plan (the “Plan”).

 

B.            The parties hereto now desire to provide Rothenberg with limited
anti-dilution protection with respect to the Options issued pursuant to the
Option Agreement and provide for such other matters as the parties hereto deem
appropriate.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing
recitals and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

 

1.                                      Anti-Dilution
Protection.

 

(a)           Upon the consummation of the
Offering (as defined below), the Bank shall grant to Rothenberg additional
stock options under the Plan to purchase shares of capital stock in the Bank
equal to seven percent (7.0%) of the additional shares of the capital stock of
the Bank issued in connection with the Offering (the “Additional Options”).

 

(b)           The Bank’s obligation to
grant the Additional Options under this Agreement shall continue until the
earlier of the date of the dissolution or liquidation of the Bank or the date
of termination of Rothenberg’s “Continuous Service” as such term is defined in
the Plan.  For purposes of this
Agreement, the term “Offering” shall mean the first common stock offering
consummated by the Bank on a “best efforts” basis on or after the effective date
of this Agreement.

 

(c)           Any Additional Option grants
made to Rothenberg pursuant to this Agreement shall be made subject to the same
terms and conditions as the Options, including vesting, except that the
exercise price of the Additional Options shall be made at the then “Fair Market
Value” (as such term is defined in the Plan) of the underlying shares but in no
event less than the gross offering price of the Offering.

 

 

(d)           Rothenberg hereby
acknowledges that the Additional Options may have a higher exercise price than
the Options.

 

(e)           In the event the Plan does
not have available a sufficient number of unreserved shares of common stock to
grant the Additional Options, the Bank shall grant the maximum number of
options available thereto under the Plan. 
Thereafter, the Bank shall use its best efforts to adopt a new option
plan which shall contain substantially the same terms and conditions as the
Plan.  Subject to the receipt of all
required regulatory, Board of Directors and shareholder approvals, and subject
to compliance with all applicable securities laws, the Bank shall issue such
number of options under the new plan such that all Additional Options have been
issued as soon thereafter as possible; provided, however, that this undertaking
shall not require the Bank to register under the Securities Act the new plan,
any option or any stock issued or issuable pursuant to any such option.  If, after reasonable efforts, the Bank is
unable to obtain from any such person the requisite authority or consent which
counsel for the Bank deems necessary for the lawful issuance and sale of stock
under the new plan or is otherwise unable to obtain a valid exemption from
registration for purposes of issuing options under such new plan, the Bank
shall be relieved from any liability for failure to issue and sell stock upon
exercise of such options unless and until such authority or consent is obtained
or a valid exemption from registration is obtained.

 

2.                                      Representations
and Warranties of Rothenberg.  Rothenberg hereby represents and warrants to the Bank that:

 

(a)           as of the date of
this Agreement, the Options held by Rothenberg are owned legally and
beneficially by Rothenberg and have not been hypothecated, sold or otherwise
pledged by Rothenberg.

 

(b)           Rothenberg has had the
opportunity to receive independent tax and legal advice from attorneys of his
choice with respect to the advisability of executing this Agreement and is not
relying on the Bank, any of its affiliates, or their respective shareholders,
directors, officers, employees, agents and/or counsel for tax or legal advice.

 

The foregoing representations and warranties shall
survive the execution and delivery of this Agreement.

 

3.             No Employment
or Service Contract.  This Agreement is not an employment or service contract, and nothing in
this  Agreement
shall  be  deemed
to  create  in
any  way  whatsoever
any  obligation  of
Rothenberg  to  continue
in  the  employ
of  the  Bank
or  any  affiliate
thereof,  or  of
the  Bank  or
any  of  its
affiliates  to  continue
to  employ  Rothenberg.  In
addition,  nothing  in
this  Agreement  shall
obligate  the  Bank
or  any  of
its  affiliates  or
their  respective  shareholders,
directors,  officers  and/or
employees  to  continue
any  relationship  that
Rothenberg  might  have
as  a  director,
officer  or  consultant
for  the  Bank
or  an  affiliate
thereof.

 

4.             Expenses.  Each
party hereby acknowledges and agrees that such party shall be liable for its
own costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Agreement.

 

 

5.             Arbitration.  Any
dispute or controversy arising under or in connection with this Agreement, the
inception or termination of the Rothenberg’s employment, or any alleged
discrimination 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 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 the
Rothenberg would 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 the Rothenberg 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. Rothenberg
and the Bank shall each bear his or its own costs and attorneys’ fees incurred
in conducting the arbitration and, except in such disputes where Rothenberg
asserts 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. 
In disputes where Rothenberg asserts a Statutory Claim against the Bank,
Rothenberg 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.  Rothenberg 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.

 

6.                                      Miscellaneous.

 

(a)           Cooperation.  Each party hereto agrees to perform any
further acts, and to execute and deliver (with acknowledgement, verification
and/or affidavit, if required) any further documents and instruments, as may be
reasonably necessary or advisable to implement and/or accomplish the provisions
of this Agreement and the transactions contemplated herein.

 

(b)           Amendment.  This Agreement may not be amended except by
an instrument in writing signed by each of the parties hereto.

 

(c)           Entire
Agreement.  This
Agreement constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof.

 

 

(d)           Assignment.  This Agreement is personal in nature and
Rothenberg may not assign its rights or delegate the performance of its duties
under this Agreement without the prior written consent of the Bank.  Any purported assignment without such consent
shall be void and of no force or effect.

 

(e)           Parties
in Interest.  This
Agreement shall be binding upon and inure solely to the benefit of and be
enforceable by each party and its respective successors and permitted assigns.

 

(f)            Governing
Law.  This Agreement shall be
governed by and construed under the laws of the State of California, except to
the extent the laws of the United States of America are mandatorily applicable.

 

(g)           Counterparts.  This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, each of the parties hereto that
is not a natural person has caused this Agreement to be executed on its behalf
by its officers or other persons thereunto duly authorized, all as of the day
and year first above written.

 

	
   

  	
  1st Century Bank, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   By:

  	
  /s/ Jeffrey M. Watson

  
	
   

  	
   Name:

  	
  Jeffrey M. Watson

  
	
   

  	
   Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Alan I. Rothenberg

  
	
   

  	
  Alan I. Rothenberg

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