Document:

Exhibit 10.4

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (“Agreement”) is entered into in Los Angeles, California as of August 1, 2016 (“Effective Date”) by and between Luther Burbank Savings (“Bank”), and Liana Prieto (“Prieto”).  Bank and Prieto are collectively referred to herein as “Parties.”

 

RECITALS

 

A.            Bank currently employs Prieto and Bank and Prieto desire to continue Bank’s employment of Prieto on the terms and conditions set forth herein.

 

B.            Prieto possesses the requisite knowledge, skill, and experience to serve as the general counsel of Bank.

 

In consideration of the mutual covenants, promises, and conditions set forth herein, Bank and Prieto agree as follows:

 

Article 1. Term and Title

 

1.1          General Counsel of Bank.  During the Term of Employment defined below, Prieto shall serve as the General Counsel of Bank.  The Parties contemplate that Prieto will report directly to the Chief Executive Officer (“CEO”).  In such position, Prieto shall have such duties, authority, and responsibility as shall be determined from time to time by the CEO, which duties, authority, and responsibility are consistent with Prieto’s position.

 

1.2          Other Positions.  During the Term of Employment defined below, Prieto shall serve as the Executive Vice President, General Counsel, and Assistant Secretary to the Luther Burbank Corporation and the Luther Burbank Mortgage Corporation.  In such positions, Prieto shall have such duties, authority, and responsibility as shall be determined from time to time by the CEO, which duties, authority, and responsibility are consistent with Prieto’s positions.

 

1.3          Term of Employment.  Subject to any earlier termination as provided in Article 8 herein below, Prieto’s employment under this Agreement shall commence on the Effective Date and shall continue for a three (3) year period (“Term”), also subject to any extension as set forth herein.  Upon expiration of the Term, and each subsequent term or extension thereof, this Agreement shall automatically be extended for an additional term of one (1) year, unless Prieto or Bank shall have notified the other party hereto of her or its election to terminate this Agreement not later than sixty (60) days prior to the end of such subsequent term or extension thereof (the Term, together with any extensions, until termination in accordance herewith, shall be referenced herein as the “Term of Employment”).  Nothing stated in this Agreement or represented orally or in writing to either Party shall create any obligation to renew this Agreement and the decision of Bank not to extend the Term or any subsequent term, shall not be deemed a termination of employment entitling Prieto to any severance compensation or separation benefits under either this Agreement or any Bank severance plan or practice then in effect.

 

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Article 2. Duties of Prieto

 

2.1          Compliance with Law.  Prieto hereby agrees to use her best efforts as General Counsel of Bank and agrees to perform such related duties as are customary for the general counsel of a financial institution or as may reasonably be required by Bank from time to time.  Prieto agrees during the term of this Agreement to remain knowledgeable of, and to comply with, all applicable rules and regulations relating to banking and to keep informed of, and to comply with, all applicable federal, state and local laws, regulations, and/or ordinances governing the conduct of Bank’s business.

 

2.2          Bank Management Obligations.  Pursuant to, and in accordance with, the policies and procedures of Bank, as may be amended from time to time in Bank’s discretion, Prieto shall be responsible for oversight of all legal matters of Bank and such other matters as are assigned to her from time to time consistent with the intent of this Agreement and sound business practices.

 

2.3          Full Time Employment.  Prieto shall devote her full energies, abilities, and productive time to the performance of the services contemplated under this Agreement, unless an alternative arrangement is agreed to by the CEO.  Prieto shall not engage in any business activities that would interfere or conflict with the performance of Prieto’s duties under this Agreement, without the prior written consent of the CEO of Bank.  Notwithstanding the above, Prieto will be permitted, to the extent such activities do not interfere with the performance by Prieto of her duties and responsibilities under this Agreement, to (a) manage Prieto’s personal, financial and legal affairs, (b) serve on nonprofit or professional association boards or committees, and (c) provide pro bono legal services to nonprofit organizations.

 

2.4          Location.  The principal place of Prieto’s employment shall be 1500 Rosecrans Avenue, Manhattan Beach, CA 90266; provided that, Prieto will be required to travel on Bank business during the Term of Employment.

 

Article 3. Prieto’s Compensation

 

3.1          Base Salary.  If, in the sound judgment of the CEO, Prieto performs her obligations under Article 2 hereof in the manner expected and is and remains an employee in good standing at Bank, Bank shall pay Prieto an annual rate of base salary of $340,000.00 in periodic installments in accordance with the Bank’s customary payroll practices, but no less frequently than monthly.  Prieto’s base salary shall be reviewed at least annually by the CEO and the Board’s Governance, Nominating, and Compensation Committee (the “GNCC”) who may, but shall not be required to, increase the base salary during the Term of Employment.

 

3.2          Corporate Annual Bonus.  Prieto will be eligible to earn an annual discretionary incentive bonus based on a percentage of her base salary (the “Incentive Bonus”), subject to the terms and conditions of the Luther Burbank Corporation and Subsidiaries Performance and Profitability Based Annual Incentive Plan (the “Bonus Plan”) and the achievement by the Bank’s performance goals.  The actual amount of the Incentive Bonus shall be determined by the GNCC, in its sole discretion.  The grant of the Incentive Bonus hereunder shall be subject to typical and reasonable performance measures in the sound judgment of the GNCC.  The target Incentive Bonus will be between 50% and 100% of Prieto’s base salary during the applicable

 

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year.  No portion of the Incentive Bonus will be payable if Prieto resigns or otherwise terminates employment before the end of the applicable calendar or fiscal year except as provided in Section 8.7.

 

Article 4. Phantom Stock Award and Vesting

 

4.1          Phantom Stock.  Luther Burbank Corp. (“LBC”) adopted the Luther Burbank Corporation and Subsidiaries Phantom Stock Plan as of January 1, 2011, including any amendments thereto (the “Plan”).  During the Term of Employment, Prieto shall be entitled to participate in the Plan in the same manner as any comparable employee in good standing of Bank.  LBC reserves the right to amend or cancel the Plan at any time in its sole discretion, subject to the terms of such Plan and applicable law.

 

Article 5. Prieto’s Benefits

 

5.1          Participation in Bank Benefit Plans.  Prieto shall be eligible to participate in those group employee benefit plans, including, without limitation, medical, dental, and life insurance, which Bank makes available to similarly situated employees from time to time, subject to all terms and conditions of those plans and amendments thereto, including, without limitation, any and all provisions concerning eligibility for participation.

 

5.2          Expenses.  Upon presentation of appropriate vouchers and receipts, Bank shall reimburse Prieto, in a manner similar to other senior Bank executives, for all reasonable business expenses incurred by Prieto.

 

5.3          Vacation.  During the Term of Employment, Prieto shall be entitled to twenty (20) days of vacation leave at full salary taken at the discretion of Prieto as time allows, so long as it is reasonable and does not conflict with the fulfillment of her responsibilities.

 

5.4          Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to Prieto pursuant to this Agreement or any other agreement or arrangement with the Bank which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, or government regulation (or any policy adopted by the Bank pursuant to any such law, government regulation or stock exchange listing requirement). The Bank will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulation.

 

Article 6. Safeguarding Customer Information

 

6.1          Customer Information.  Prieto will learn of, and come into possession of non-public personal information (“Customer Information”) regarding borrowers or prospective borrowers during the term of this Agreement.  Prieto agrees to take all reasonable measures to ensure the security and confidentiality of Customer Information, to protect against any anticipated threats or hazards to the security of such information and to protect against the unauthorized access to or use of Customer Information which could result in substantial harm or inconvenience to any borrower or prospective borrower.  Prieto agrees that she will use such

 

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Customer Information only for the limited purpose(s) for which it is disclosed, and for no other purpose.  Prieto further agrees to comply with all federal and state laws governing the disclosure of Customer Information.  “Customer Information,” as used herein, means any record containing non-public personal information pertaining to a borrower or prospective borrower, regardless of the form in which it is handled or maintained, and includes, without limitation, bank and credit card account numbers, income and credit information, and social security numbers.

 

6.2          Non-solicitation of Customers.  Prieto understands and acknowledges that because of her experience with and relationship to the Bank she will obtain information Customer Information that includes names, phone numbers, addresses, e-mail addresses, pricing information, and other information identifying facts and circumstances specific to customers.  Prieto understands and acknowledges that loss of such customer relationships and/or goodwill will cause significant and irreparable harm to Bank.  Prieto agrees that if her employment with Bank is terminated, with or without cause, during the Term, that for the remainder of the Term and for a period of six (6) months thereafter, she shall not attempt to contact or meet with the Bank’s current, former or prospective customers for purposes of offering or accepting goods or services similar to or competitive with those offered by the Bank.  This restriction shall only apply to customers about whom Prieto has trade secret or confidential information.

 

Article 7. Unfair Competition and Confidential Information

 

7.1          Confidential Information.  Prieto acknowledges that Bank owns proprietary Confidential Information which constitutes a valuable, special, and unique asset.  This Confidential Information has been compiled and developed by Bank over time at considerable expense and effort, has not been divulged to third parties, and is not known to Bank’s competitors, who could have obtained economic value from such information had it been known. As used herein, the term “Confidential Information” includes all information and materials belonging to, used by, or in the possession of Bank relating to its products, processes, services, technologies, inventions, patents, ideas, contracts, forms, records, data, processes, financial information, business strategies, pricing, marketing plans, customer lists, and trade secrets of every kind and character, but shall not include (a) information that was already within the public domain at the time the information was acquired by Prieto, or (b) information that subsequently becomes public through no act or omission of Prieto.  Prieto agrees that all Confidential Information is and shall continue to be the exclusive property of Bank, whether or not prepared in whole or in part by Prieto and whether or not disclosed to or entrusted to Prieto’s custody.  Prieto’s obligation to preserve the secrecy of Confidential Information shall survive the termination of this Agreement and her employment with Bank.  Upon termination of Prieto’s employment, Prieto agrees to return to Bank all files, papers, and materials of any kind containing or relating to Confidential Information.  Prieto further understands and acknowledges that the Bank’s ability to reserve these for the exclusive knowledge and use of the Bank is of great competitive importance and commercial value to the Bank, and that improper use or disclosure by Prieto is likely to result in unfair or unlawful competitive activity.

 

7.2          Non-Solicitation.  Prieto agrees that if her employment with Bank is terminated, with or without cause, during the Term, that for the remainder of the Term and for a period of six (6) months thereafter, she shall not induce or attempt to induce any employee of Bank to

 

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discontinue employment or association with Bank to obtain employment with a competitor of Bank or providing services to Prieto or any company affiliated with Prieto.

 

Article 8. Termination

 

8.1          Death or Disability.

 

a)            Prieto’s death or total disability during the Term of Employment shall result in the termination of Prieto’s employment for cause.  No compensation or benefits shall be paid except as set forth in Section 8.7(a) below and as provided in Exhibit A, the Luther Burbank Corporation and Subsidiaries Phantom Stock Plan.

 

b)            Bank and Prieto respectively shall each have the right to terminate the Term of Employment in the event of Prieto’s Disability.  “Disability” as used in this Agreement shall have the meaning set forth in Section 22(e)(3) of the Internal Revenue Code, which, as of the date of this Agreement, is as follows:

 

An individual is permanently and totally disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

 

A termination of Prieto’s employment by either party for Disability shall be communicated to the other party by written notice, and shall be effective on the tenth (10th) day after receipt of such notice by the other party (the “Disability Effective Date”), unless Prieto returns to full-time performance of her duties before the Disability Effective Date.

 

8.2          Termination by Bank.  Bank shall have the right to terminate Prieto’s employment for Cause.  “Cause” as used in this Agreement shall mean:

 

a)            Prieto’s charge of or conviction by, or entry of a plea of guilty or nolo contendere in a court of competent jurisdiction, for any crime involving moral turpitude or a felony in the jurisdiction involved;

 

b)            Prieto’s willful refusal or negligent failure to perform Prieto’s duties as required by this Agreement;

 

c)             Prieto’s gross negligence, insubordination, or material violation of any duty of loyalty or fiduciary duty to Bank or any other material misconduct on the part of Prieto;

 

d)            Prieto’s revocation of any approvals required by any federal or state banking regulator or the State Bar of California for Prieto to perform her assigned duties and responsibilities with Bank, including without limitation, Prieto’s suspension, removal or prohibition from participating in the conduct of Bank’s affairs by an order issued under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818(e)(3) and (g)(1)) or any comparable provision of federal or state law;

 

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e)             Prieto’s material failure to comply with all applicable federal, state, and local laws, regulations, and/or ordinances governing her duties with Bank; or

 

f)             Prieto’s material breach of any other provision of this Agreement.

 

Bank shall also have the right to terminate Prieto’s employment “Without Cause” at any time, with or without notice, subject solely to its remittance of the consideration set forth in Section 8.7(b) herein below.

 

8.3          Termination by Prieto.

 

a)            Prieto shall have the right to terminate the Employment Term for Good Reason (as defined below), upon thirty (30) days written notice to Bank delivered within thirty (30) days following the occurrence of an event constituting Good Reason; provided that Bank shall have thirty (30) days after the date such notice has been received by Bank in which to cure the conduct specified in such notice.  Prieto’s continued employment during such thirty (30) day period shall not constitute Prieto’s consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.  For purposes of this Agreement “Good Reason” shall mean:

 

i)              a significant material change in Prieto’s position or responsibilities, including a material change in duties that represents a substantial reduction in the position or responsibilities in effect immediately prior thereto; the assignment to Prieto of any significant duties or responsibilities that are materially inconsistent with such position or responsibilities; except in connection with the termination of Prieto’s employment for Cause, as a result of her Disability or death, or by Prieto other than for Good Reason;

 

ii)             a reduction in Prieto’s base salary or eligibility for target bonus other than in connection with a general reduction in wages for all senior executive employees.  Prieto’s actual bonus payment may be reduced in accordance with the Bonus Plan based on the company’s or her performance;

 

iii)            Bank requiring Prieto (without Prieto’s consent) to be based at any place outside of Los Angeles County, except for reasonably required travel on Bank’s business;

 

iv)           Bank’s failure to provide Prieto with the compensation, including salary, bonuses, and benefits as outlined in this Agreement;

 

v)            the failure of any successor to Bank to assume this Agreement pursuant to Section 11.2; or

 

vi)           any material breach by Bank of its obligations to Prieto under this Agreement.

 

b)            Prieto shall have the right to terminate her employment hereunder without Good Reason by providing Bank with a written notice of termination, and such termination shall not in and of itself be a breach of this Agreement.

 

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8.4          Bank’s Default.  If Bank is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act), all obligations under this Agreement shall terminate as of the date of default, except to the extent it is determined that continuation of the Agreement is necessary for the continued operation of Bank by:

 

(a)           the Office of the Comptroller of the Currency (the “OCC”), the California Department of Business Oversight (the “DBO”), the Federal Deposit Insurance Corporation (the “FDIC”), or the Federal Reserve Bank of San Francisco (the “FRBSF”) at such time as said regulatory agency enters into an agreement to provide assistance to or on behalf of Bank under the authority contained in 13(c) of the Federal Deposit Insurance Act or comparable federal or state law; or

 

(b)           the OCC, the FDIC, the DBO, or the FRBSF at such time as said regulatory agency approves a supervisory merger to resolve problems related to operation of Bank or when Bank is determined by the OCC, the FDIC, the DBO, or the FRBSF to be in an unsafe or unsound condition.

 

Any rights of Bank or Prieto that have already vested, however, shall not be affected by such action pursuant to section 163.39 of Title 12 of the Code of Federal Regulations.

 

8.5          Loan Files.  Upon termination of Prieto’s employment for any reason, all loan files, whether pending or closed, shall remain with, or promptly be returned to Bank, at Bank’s election, along with any Confidential Information in Prieto’s possession.  Prieto acknowledges and agrees that all such files and Confidential Information are the sole and exclusive property of Bank and no copies shall be retained by Prieto.

 

8.6          Computers/Equipment.  Immediately upon the termination of Prieto’s employment for any reason, any and all computer hardware and other equipment provided to Prieto by Bank shall be returned to Bank.

 

8.7          Effect of Termination upon Prieto’s Compensation.

 

a)            Termination for Cause.  In the event Prieto’s employment terminates for Cause, in accordance with Sections 8.1(a), 8.1(b), or 8.2, respectively, hereinabove, Prieto shall be entitled solely to her base salary, as defined in Section 3.1 hereinabove, through the effective date of such termination and a payment equal to the value of her then accrued, untaken vacation, and, if applicable, disability and other insurance benefits in accordance with the then effective plans and programs of Bank.  In the event Prieto’s employment terminates under Section 8.1, Prieto or her estate shall also receive a one-time separation bonus, to be paid within 100 days after termination, equal to 90 days of her base salary, less the amount of any disability benefit received from a Bank-sponsored disability plan during the 90 days following termination.

 

b)            Termination by Bank without Cause or by Prieto with Good Reason.  In the event Prieto’s employment is terminated by Bank without Cause or in the event Prieto terminates her employment for Good Reason in accordance with Section 8.3(a) above, at any time during the Term of Employment, Prieto shall be entitled to (1) a prorated Corporate Annual Bonus (as described in Section 3.2 above,) for the time worked in the current calendar year, (2) continuation until the end of the Term of all group employee benefits, including, without

 

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limitation, medical, dental, and life insurance, which Bank makes available to executives, (3) payment for her accrued, untaken vacation through the effective date of her termination, (4) payment of her base salary as described in Section 3.1, above, for the remainder of the Term, or, in the alternative, a one-time severance payment equal to twice the sum of the base salary and Incentive Bonus earned by Prieto during the prior calendar year paid in a lump sum within sixty (60) days following the Termination, whichever is greater, and (5) Prieto shall become one hundred percent (100%) vested in the Phantom Stock Account and such account shall be distributed in a lump sum within sixty (60) days following the Termination notwithstanding anything to the contrary under the Phantom Stock Plan.

 

c)             Golden Parachute Payments.            Bank shall have no obligation to make any Severance Payment or other payment that is prohibited by section 359 of Title 12 of the Code of Federal Regulations (12 C.F.R. § 359 (2011)).

 

d)            Release.  The Bank’s obligation to pay the severance benefits in this section, as applicable, is conditioned on Prieto’s execution and delivery to Bank, and non-revocation of a general release of claims in favor of Bank.

 

8.8          Resignation from Related Positions.  Upon termination of Prieto’s employment hereunder for any reason, Prieto shall be deemed to have resigned from all positions that Prieto holds as an officer of the Bank or any of its affiliates, including the positions identified in Section 1.2, above.

 

8.9          Other Exit Obligations.  Upon (a) voluntary or involuntary termination of Prieto’s employment or (b) the Bank’s request at any time during Prieto’s employment, Prieto shall (i) provide or return to Bank any and all Bank property and all Bank documents and materials belonging to the Bank and stored in any fashion, including but not limited to those that constitute or contain any Confidential Information or work product, that are in the possession or control of Prieto, whether they were provided to Prieto by Bank or any of its business associates or created by Prieto in connection with her employment by Bank; and (ii) delete or destroy all copies of any such documents and materials not returned to Bank that remain in Prieto’s possession or control, including those stored on any non-Bank devices, networks, storage locations and media in Prieto’s possession or control.

 

8.10        Cooperation. The parties agree that certain matters in which Prieto will be involved during the Employment Term may necessitate Prieto’s cooperation in the future. Accordingly, following the termination of Prieto’s employment for any reason, to the extent reasonably requested by the CEO or the Board, Prieto shall cooperate with the Bank in connection with matters arising out of Prieto’s service to the Bank; provided that, the Bank shall make reasonable efforts to minimize disruption of Prieto’s other activities. The Bank shall reimburse Prieto for reasonable expenses incurred in connection with such cooperation and, to the extent that Prieto is required to spend substantial time on such matters, the Bank shall compensate Prieto at an hourly rate based on Prieto’s base salary on the Termination Date.

 

8.11        Acknowledgement. Prieto acknowledges and agrees that the services to be rendered by her to the Bank are of a special and unique character; that Bank will obtain knowledge and skill relevant to the Bank’s industry, methods of doing business and marketing

 

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strategies by virtue of Prieto’s employment; and that the restrictive covenants and other terms and conditions of this Agreement are reasonable and reasonably necessary to protect the legitimate business interest of the Bank.

 

Prieto further acknowledges that the amount of her compensation reflects, in part, her obligations and the Bank’s rights under Articles 6, 7, and 8 of this Agreement; that she has no expectation of any additional compensation, royalties or other payment of any kind not otherwise referenced herein in connection herewith; that she will not be subject to undue hardship by reason of her full compliance with the terms and conditions of Articles 6, 7, and 8 of this Agreement or the Bank’s enforcement thereof.

 

8.12        Remedies. In the event of a breach or threatened breach by either Party hereto of Articles 6, 7, or 8 of this Agreement, the Parties hereby consent and agree that the aggrieved Party shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.

 

Article 9. Notices

 

9.1          Notices.  Any notice given hereunder by either Party to the other may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid, with return receipt requested.  Mailed notices shall be addressed to the Parties at the following addresses:

 

	
Bank:
    	
 
    	
Liana Prieto:
    
	
 
    	
 
    	
 
    
	
Luther Burbank Corporation
    	
 
    	
 
    
	
1500 Rosecrans Avenue, Suite 300
    	
 
    	
 
    
	
Manhattan Beach, CA 90266
    	
 
    	
 
    
	
ATTN: Chief Executive Officer
    	
 
    	
 
    
	
Email: legal@lbsavings.com
    	
 
    	
 
    

 

Each Party may change her or its address by written notice in accordance with this section of the Agreement.  Notices delivered personally shall be deemed communicated as of the actual date of receipt.  Mailed notices shall be deemed communicated no later than three (3) business days after deposit in the United States mail.

 

Article 10. Dispute Resolution

 

10.1        Negotiation.  The Parties will attempt in good faith to resolve through negotiation any dispute, claim, or controversy arising out of or relating to this Agreement.  Either Party may initiate negotiations by providing written notice to the other pursuant to the above.  Such notice shall set forth the subject of the dispute and the relief requested.  The recipients of such notice will respond in writing within ten (10) days with a statement of their respective positions on and

 

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recommended solution to the dispute.  If the dispute is not resolved by this exchange of correspondence, the Parties, and/or their representatives, will meet at a mutually agreeable time and place within twenty (20) days of the date of the initial notice in order to exchange relevant information and perspectives, and to attempt to resolve the dispute.

 

10.2        Mediation.  Either Party may commence mediation of a good faith dispute by providing to the Judicial Arbitration and Mediation Services (“JAMS”) and the other Party a written request for mediation.  Such request shall set forth the subject of the dispute and the relief requested.  The Parties will cooperate with JAMS and with one another in selecting a mediator from the JAMS panel of neutrals, and in scheduling the mediation proceedings which shall be conducted in Santa Rosa, California.  The Parties covenant that they will participate in the mediation in good faith.  All offers, promises, conduct, and statements, whether oral or written, made in the course of the mediation by any of the Parties and/or their respective agents, employees, experts, and attorneys, and by the mediator or any JAMS employees, are confidential, privileged, and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the Parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.

 

10.3        Consent to Judicial Reference.  Subject to the provisions of Sections 10.1 and 10.2 hereinabove, the Parties hereby consent and agree that (a) any and all disputes arising out of or related to this Agreement or any other matter in any way relating to or arising out of Prieto’s employment with Bank (collectively “Dispute”) shall be heard by a referee in accordance with the general reference provisions of California Code of Civil Procedure Section 638, sitting without a jury in the City of Los Angeles, County of Los Angeles, California, (b) such referee shall hear and determine all of the issues in any Dispute (whether of fact or of law), including issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure section 1281.8, including without limitation, entering restraining orders, entering temporary restraining orders, issuing temporary and permanent injunctions and appointing receivers, and shall report a statement of decision; provided that, if, during the course of any Dispute, any Party desires to seek such a provisional remedy at a time when a referee has not yet been appointed or is otherwise unavailable to hear the request for such provisional remedy, then such Party may apply to the Los Angeles County Superior Court for such provisional relief, and (c) pursuant to California Code of Civil Procedure section 644(a), judgment may be entered upon the decision of such referee in the same manner as if the Dispute had been tried directly by a court.  The Parties shall use their respective commercially reasonable and good faith efforts to agree upon and select such referee, provided that such referee must be a retired California state or federal judge, and further provided that if the Parties cannot agree upon a referee, the referee shall be appointed by the Presiding Judge of the Los Angeles County Superior Court.  The Parties acknowledge that this consent and agreement is a material inducement to enter into this Agreement and that each Party will continue to be bound by and to rely on this consent and agreement in their related future dealings.  The Parties shall share the cost of the referee and reference proceedings equally, except that the costs of the referee and reference proceedings to be paid by Prieto shall not exceed the amount Prieto would have had to pay in court costs to initiate or respond to a civil action had the matter been pursued in court.  Bank shall be responsible for all other costs payable; provided that, the referee may award attorneys’ fees and reimbursement of the referee and reference proceeding fees and costs to the prevailing party,

 

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whereupon all referee and reference proceeding fees and charges will be payable by the non-prevailing party (as so determined by the referee).  The Parties further warrant and represent that each has reviewed this consent and agreement with legal counsel of its own choosing, or has had an opportunity to do so, and that it knowingly and voluntarily gives this consent and enters into this agreement having had the opportunity to consult with legal counsel.  This consent and agreement is irrevocable, meaning that it may not be modified either orally or in writing, and this consent and agreement shall apply to any subsequent amendments, renewals, supplements or modifications to this Agreement or any other agreement or document entered into between the parties in connection with this Agreement.  In the event of litigation, this Agreement may be filed as evidence of the Parties’ consent and agreement to have Disputes heard and determined by a referee under California Code of Civil Procedure section 638.

 

Section 10.3 shall not apply to any claims or disputes arising out of or relating to any Bank plan subject to the Employee Retirement Income and Security Act (“ERISA”), which claims or disputes shall be subject to ERISA.

 

Article 11. Miscellaneous Provisions

 

11.1        Integration.  This Agreement supersedes any and all other agreements, either oral or in writing, between Bank and Prieto with respect to Prieto’s performance of services as an agent or employee of Bank, and contains all the covenants and agreements between the Parties with respect to such services in any manner whatsoever with the exception of the Indemnification Agreement executed between Bank and Prieto which remains in full force and effect.  Each Party to this Agreement acknowledges that no representations, inducements, promises, or agreements, oral or otherwise, have been made by the other Party which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding.

 

11.2        Assignment.  This Agreement may not be assigned by Prieto, but shall inure to the benefit of, and shall be binding upon, the successors and assigns of Bank.  Bank shall require any successor to all or substantially all of the business and/or assets of the Bank (whether direct or indirect, by purchase, merger, reorganization, sale, transfer of stock, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Bank would be required to perform it if no succession had taken place.

 

11.3        Receipt of Agreement.  Each of the Parties acknowledges that she or it has read this Agreement in its entirety and hereby acknowledges receipt of a fully-executed copy thereof.

 

11.4        Governing Law/Jurisdiction/Venue.  This Agreement shall be governed by and construed under the laws of the State of California, without regard to its conflicts of laws principles.  The Parties agree that any action taken to enforce the terms of this Agreement, including judicial action not inconsistent with the arbitration provisions hereunder, shall come under the jurisdiction of, and be properly heard and adjudicated in the Courts of the State of California and that venue shall be proper in the County of Los Angeles.

 

11.5        Captions and Section Headings.  Captions and section headings used herein are for convenience only and are not part of this Agreement and shall not be used in construing it.

 

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11.6        Amendments and Waiver.  This Agreement may be amended from time to time only by a writing signed by both Parties.  A waiver of any of the terms and conditions hereof shall not be construed as a waiver of any other provision, nor shall any waiver constitute a continuing waiver or commit a Party to providing a waiver in the future.

 

11.7        Survival.  The covenants, agreements, representations, and warranties made herein shall survive the termination of this Agreement, unless the context clearly provides otherwise.  Specific survival provisions shall not lessen the survival nature of provisions without such specificity.

 

11.8        Severability.  If a court or arbitrator of competent jurisdiction finds any provision in this Agreement to be invalid, illegal, or otherwise unenforceable, that determination will not affect any other provision of this Agreement.  The invalid provision will be severed from this Agreement and all remaining provisions will continue to be enforceable by their terms and of full force and effect.

 

11.9        Interpretation.  Any ambiguity in the language, words, phrases, gender identifiers, sentences, or provisions contained herein is not to be interpreted against a Party merely by reason of that Party having drafted, suggested, transcribed, or dictated such provision.  In interpreting this Agreement the intentions of the Parties, as expressed in this Agreement, shall be paramount and this Agreement shall be read as a whole document in order to ascertain the intentions of the Parties with respect to any particular word, phrase, sentence, or provision.  This Agreement shall not be deemed to have been prepared or drafted by one Party or another, and shall be construed accordingly.

 

11.10      Third-Party Beneficiary.  This Agreement has been made by, and is made solely for the benefit of Bank, Bank’s successors, and assigns.  Nothing in this Agreement is intended to confer any rights or remedies under or because of this Agreement on any persons or entities other than the Parties to it and Bank’s successors and assigns.  Nothing in this Agreement is intended to relieve or discharge the obligation or liability of any third persons or entities to any Party to this Agreement.

 

11.11      Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same instrument.  The Parties agree that a signed copy of this Agreement transmitted by one Party to the other by facsimile transmission shall be binding upon the sending Party to the same extent as a signed original of this Agreement.

 

11.12      Section 409A.

 

a)            General Compliance. This Agreement is intended to comply with Section 409A or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For

 

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purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A. Notwithstanding the foregoing, the Bank makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Bank be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Prieto on account of non-compliance with Section 409A.

 

b)            Specified Employees. Notwithstanding any other provision of this Agreement, if any payment or benefit provided to Prieto in connection with her termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Prieto is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six (6) month anniversary of the Termination Date or, if earlier, on Prieto’s death (the “Specified Employee Payment Date”) . The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to Prieto in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.

 

PRIETO ACKNOWLEDGES AND AGREES THAT SHE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. PRIETO ACKNOWLEDGES AND AGREES THAT SHE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HER CHOICE BEFORE SIGNING THIS AGREEMENT.

 

This Agreement is entered into by and between the Parties as of the above written Effective Date.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
LIANA PRIETO
    
	
 
    	
 
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
LUTHER BURBANK   SAVINGS   
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    

 

Attachments:

 

Exhibit A:                                      Luther Burbank Corporation and Subsidiaries Phantom Stock Plan, adopted January 1, 2011.

 

13Exhibit 10.5

 

LUTHER BURBANK SAVINGS I

Amended & Restated Salary Continuation Agreement

 

LUTHER BURBANK SAVINGS

AMENDED & RESTATED

SALARY CONTINUATION AGREEMENT

 

THIS AMENDED & RESTATED SALARY CONTINUATION AGREEMENT (the “Agreement”) is adopted this 25th day of April, 2006, by and between LUTHER BURBANK SAVINGS, a California corporation located in Santa Rosa, California (the “Bank”) and VICTOR S. TRIONE (the “Executive”) and is effective as of the 1st day of January, 2005.

 

This agreement amends and restates the prior Salary Continuation Agreement between the Bank and the Executive dated July 1, 1994 (the “Prior Agreement”).

 

The parties intend this Amended and Restated Agreement to be a material modification of the Prior Agreement such that all amounts earned and vested prior to December 31, 2004 shall be subject to the provisions of Section 409A of the Code and the regulations promulgated thereunder.

 

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development, and future business success of the Bank. This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.

 

Article 1 Definitions

 

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

 

1.1                             “Base Salary” means the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, and other fees, and automobile and other allowances paid to the Executive for employment rendered (whether or not such allowances are included in the Executive’s gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Executive pursuant to all qualified or non-qualified plans of the Bank and shall be calculated to include amounts not otherwise included in the Executive’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Bank; provided, however, that all such amounts will be included in compensation only to the 

 

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extent that had there been no such plan, the amount would have been payable in cash to the Executive.

 

1.2                             “Beneficiary” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive determined pursuant to Article 4.

 

1.3                             “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.

 

1.4                             “Board” means the Board of Directors of the Bank as from time to time constituted.

 

1.5                             “Code” means the Internal Revenue Code of 1986, as amended.

 

1.6                             “Compensation” means the total annual Base Salary that would be paid to an Executive during the Plan Year in which Separation from Service occurs.

 

1.7                             ‘‘Early Involuntary Termination” means the Executive has been notified in writing by the Bank of a Separation from Service before Normal Retirement Age for reasons other than:

 

(i) within thirty-six (36) months following a Change in Control; or (ii) due to death, Early Voluntary Termination, or Termination for Cause.

 

1.8                             “Early Termination” means Separation from Service before Normal Retirement Age except when such Separation from Service occurs: (i) within thirty-six (36) months following a Change in Control; or (ii) due to death or Termination for Cause.

 

1.9                             “Early Voluntary Termination” means Separation from Service before Normal Retirement Age except when such Separation from Service occurs: (i) within thirty-six (36) months following a Change in Control; or (ii) due to death, Early Involuntary Termination or Termination for Cause.

 

1.10                      “Effective Date” means July 1, 1994.

 

1.11                      “Normal Retirement Age” means the Executive attaining sixty-two (62).

 

1.12                      “Plan Administrator” means the plan administrator described in Article 6.

 

1.13                      “Plan Year” means each twelve-month period commencing on July 1 and ending on June 30 of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following June 30.

 

1.14                      “Separation from Service” means the termination of the Executive’s employment with the Bank for reasons other than death. Whether a Separation from Service takes place is determined based on the facts and circumstances surrounding the termination of the Executive’s employment and whether the Bank and the Executive intended for 

 

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the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if:

 

(a)                                 the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or

 

(b)                                 the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period).

 

1.15                      “Specified Employee” means a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Bank if any stock of the Bank is publicly traded on an established securities market or otherwise.

 

1.16                      “Termination for Cause” means Separation from Service for:

 

(a)                                 Gross negligence or gross neglect of duties to the Bank; or

(b)                                 Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Bank; or

(c)                                  Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Bank.

 

1.17                      “Years of Service” means the number of full fiscal years ending June 30 commencing from the Effective Date during which time the Executive is in the active service of the Bank.

 

Article 2

Distributions During Lifetime

 

2.1                               Normal Retirement Benefit. Upon the Executive reaching Normal Retirement Age while in the active service of the Bank, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

 

2.1.1                     Amount of Benefit. The annual benefit under this Section 2.1 is eighty percent (80%) of Compensation.

 

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2.1.2                     Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Separation from Service. The annual benefit shall be distributed to the Executive for twenty (20) years.

 

2.2                             Early Termination Benefit.  Upon Early Termination,  the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

 

2.2.1                     Amount of Benefit. The benefit under this Section 2.2 is the vested portion of the Normal Retirement Benefit described in Section 2.1.1.

 

2.2.2                     Vesting. The vested portion of the Normal Retirement Benefit shall be equal to the Normal Retirement Benefit multiplied by a fraction, the numerator of which is the Years of Service and the denominator of which is the number of years, including fractions of a year, which will elapse between the Effective Date and the Executive’s Normal Retirement Age. However, no portion of the Normal Retirement Benefit shall be vested in the event of an Early Voluntary Termination within five (5) years from the Effective Date.

 

2.2.3                     Distribution of Benefit. If the Executive has attained age fifty-five (55) while in the employ of the Bank and completed twenty (20) Years of Service, the Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Separation from Service. If the Executive has not attained age fifty-five (55) while in the employ of the Bank or has not completed twenty (20) Years of Service, the Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Normal Retirement Age. The annual benefit shall be distributed to the Executive for twenty (20) years.

 

2.3                             Restriction on Timing of Distribution. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.3 is applicable to the Executive, any distribution or series of distributions to be made due to a Separation from Service shall commence no earlier than the first day of the seventh month following the Separation from Service.

 

2.4                             Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the inclusion of any amount into the Executive’s income as a result of the failure of this non-qualified deferred compensation plan to comply with the requirements of Section 409A of the Code, to the extent such tax liability can be covered by the amount which the Bank 

 

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has accrued on its books with respect to the obligations described in this Article 2, a distribution shall be made as soon as is administratively practicable following the discovery of the plan failure.

 

2.5                             Change in Form or Timing of Distributions.  For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend the Agreement to delay the timing or change the form of distributions. Any such amendment:

 

(a)                     may not accelerate the time or schedule of any distribution, except as provided in Section 409A of the Code and the regulations thereunder;

(b)                     must, for benefits distributable under Section 2.1, be made at least twelve (12) months prior to the first scheduled distribution;

(c)                      must, for benefits distributable under Sections 2.1 and 2.2, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

(d)                     must take effect not less than twelve (12) months after the amendment is made.

 

Article 3

Distribution at Death

 

3.1                             Death During Active Service.  If the Executive dies while in the active service of the Bank, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1.  This benefit shall be distributed in lieu of the benefits under Article 2.

 

3.1.1                     Amount of Benefit. The benefit under this Section 3.1 is the Normal Retirement Benefit amount described in Section 2.1.1.

 

3.1.2                     Distribution of Benefit.  The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments for twenty (20) years commencing the first day of the month following receipt by the Bank of the Executive’s death certificate.

 

3.2                             Death During Distribution of a Benefit. If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts that would have been distributed to the Executive had the Executive survived.

 

3.3                             Death After Separation from Service But Before Benefit Distributions Commence. If the Executive is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit distributions shall commence within thirty (30) days following receipt by the Bank of the Executive’s death certificate.

 

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Article 4

Beneficiaries

 

4.1                             Beneficiary. The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefit distributions under this Agreement upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates.

 

4.2                             Beneficiary Designation: Change; Spousal Consent. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Plan Administrator or its designated agent. If the Executive names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Plan Administrator, must be signed by the Executive’s spouse and returned to the Plan Administrator. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death.

 

4.3                             Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

 

4.4                             No Beneficiary Designation. If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made to the personal representative of the Executive’s estate.

 

4.5                             Facility of Distribution. If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Executive’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount.

 

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Article 5

General Limitations

 

5.1                             Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is terminated due to a Termination for Cause.

 

5.2                             Suicide or Misstatement. No benefits shall be distributed if the Executive commits suicide within two years after the Effective Date of this Agreement, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

 

5.3                             Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

 

Article 6

Administration of Agreement

 

6.1                             Plan Administrator Duties. This Agreement shall be administered by a Plan Administrator which shall consist of the Chairman of the Board, Chief Executive Officer, and Chief Operating Officer, or such other committee or person(s) as the Board shall appoint. The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with the Agreement to the extent the exercise of such discretion and authority does not conflict with Section 409A of the Code and regulations thereunder.

 

6.2                             Agents. In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank.

 

6.3                             Binding Effect of Decisions.   The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement.

 

6.4                             Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.

 

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6.5                             Bank Information. To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, disability, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require.

 

Article 7

Claims And Review Procedures

 

7.1                             Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be distributed shall make a claim for such benefits as follows:

 

7.1.1                     Initiation - Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant.

 

7.1.2                     Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within 90 days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

 

7.1.3                     Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

 

(a)                           The specific reasons for the denial;

(b)                           A reference to the specific provisions of the Agreement on which the denial is based;

(c)                            A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed;

(d)                           An explanation of the Agreement ‘s review procedures and the time limits applicable to such procedures; and

(e)                            A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

 

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7.2                             Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows:

 

7.2.1                     Initiation - Written Request. To initiate the review, the claimant, within 60 days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.

 

7.2.2                     Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

 

7.2.3                     Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

7.2.4                     Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within 60 days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

 

7.2.5                     Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

 

(a)                                 The specific reasons for the denial;

(b)                                 A reference to the specific provisions of the Agreement on which the denial is based;

(c)                                  A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits ; and

(d)                                 A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

 

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Article 8

Amendments and Termination

 

8.1                             Amendments. This Agreement may be amended only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative or tax law, including without limitation Section 409A of the Code and any and all regulations and guidance promulgated thereunder.

 

8.2                             Plan Termination Generally. The Bank may unilaterally terminate this Agreement at any time. The amount of the benefit shall be frozen as of the date the Agreement is terminated. Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3.

 

8.3                             Plan Terminations Under Section 409A.  Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances:

 

(a)                                 Within thirty (30) days before, or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and further provided that all the Bank’s arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements;

 

(b)                                 Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Executive’s gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

 

(c)                                  Upon the Bank’s termination of this and all other non-account balance plans (as referenced in Section 409A of the Code or the regulations thereunder), provided that all distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and the Bank does not adopt any new non-account balance plans for a minimum of five (5) years following the date of such termination;

 

the Bank may distribute the amount which the Bank has accrued with respect to the Bank’s obligations under Article 2 hereof, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms.

 

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Article 9

Miscellaneous

 

9.1                             Binding Effect. This Agreement shall bind the Executive and the Bank, and their beneficiaries, survivors, executors, administrators and transferees.

 

9.2                             No Guarantee of Employment. This Agreement is not a contract for employment. It does not give the Executive the right to remain as an employee of the Bank, nor does it interfere with the Bank’s right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time.

 

9.3                             Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

 

9.4                             Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement. The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). Further, the Bank shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder.

 

9.5                             Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of the State of California, except to the extent preempted by the laws of the United States of America.

 

9.6                             Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive’s life or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.

 

9.7                             Reorganization. The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor bank.

 

9.8                             Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof.  No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein.

 

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9.9                             Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

 

9.10                      Alternative Action. In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement, the Bank or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank, provided that such alternative acts do not violate Section 409a of the Code.

 

9.11                      Headings. Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

 

9.12                      Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein.

 

9.13                      Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

 

John G. Biggs

Luther Burbank Savings

804 -4th Street

Santa Rosa, CA  95404

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive.

 

9.14                      Compliance with Section 409A. This Agreement shall at all times be administered and the provisions of this Agreement shall be interpreted consistent with the requirements of Section 409A of the Code and any and all regulations thereunder, including such regulations as may be promulgated after the Effective Date of this Agreement.

 

9.15                      Rescissions. Any modification to the terms of this Agreement that would inadvertently result in an additional tax liability on the part of the Executive, shall have no effect to the extent the change in the terms of the plan is rescinded by the earlier of a date before the right is exercised (if the change grants a discretionary right) and the last day of the calendar year during which such change occurred.

 

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IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement.

 

 

	
EXECUTIVE:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
LUTHER BURBANK SAVINGS
    
	

    Vitor S. Trione

 
    	
 
    	

    

 

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}]]