Document:

Exhibit 10.21

 

AMENDED
AND RESTATED

 

EXECUTIVE
SPLIT DOLLAR

 

LIFE
INSURANCE PLAN AND AGREEMENT

 

Between

 

COBIZ
BANK AND «EMPLOYEE_FIRST» «EMPLOYEE_MIDDLE» «EMPLOYEE_LAST»

 

THIS AMENDED AND RESTATED EXECUTIVE SPLIT DOLLAR
LIFE INSURANCE AGREEMENT (this “Agreement”) is made and entered into as of the
thirty-first day of December, 2007 (the “Effective Date”), by and between COBIZ
BANK, a state banking association having its principal place of business at 821
17th Street, Denver, CO 80202 (the “Corporation”), and «EMPLOYEE_FIRST»
«EMPLOYEE_MIDDLE» «EMPLOYEE_LAST», (the “Employee”) and replaces in its
entirety that certain Executive Split Dollar Life Insurance Agreement by and
between the Corporation and the Employee dated March1, 2004 (the “Original
Agreement”).

 

Recitals

 

A.            The Employee and the Corporation
entered into the Original Agreement and now desire to amend and restate the
same in its entirety in accordance with Section 20[a] thereof.

 

B.            The Employee remains a valued member
of a select group of management employees of the Corporation, and the
Corporation wishes to assist the Employee with «Gender_Pronoun» personal life
insurance program while the Employee remains in the employ of the Corporation.

 

C.            The Employee wishes to provide life
insurance protection for «Gender_Pronoun» family in the event of
«Gender_Pronoun» death, under one or more policies of life insurance insuring
«Gender_Pronoun» life (collectively, the “Policies” and individually a “Policy”),
which policy or policies have been issued by the insurer or insurers identified
on the attached Schedule A (collectively, the “Insurers” and individually an “Insurer”).

 

D.            The Corporation wishes to offer an
inducement to the Employee to remain in the employ of the Corporation in the
form of an arrangement under which the Corporation will pay the premiums due on
the Policies, a portion of the death benefits under which will be paid to the
beneficiary or beneficiaries designated by the Employee, as an additional
employment benefit for the Employee, provided that the Corporation shall be the
owner of the Policies and, as such, shall possess all incidents of ownership in
and to the Policies, and that all benefits under this Agreement shall terminate
coincident with the Employee’s separation from service.

 

 

Terms of Agreement

 

Therefore, in consideration of the mutual promises
set forth below, the parties agree as follows:

 

Section 1.              Definitions.  For purposes of
this Agreement, the following terms shall have the meanings specified:

 

[a]                                  “Affiliate”
shall mean any entity that directly or indirectly controls, or is controlled
by, or is under common control of the Corporation. For these purposes, “control”
means [i] for corporate entities, direct or
indirect ownership of 20 percent or more of the stock or shares entitled to
vote for the election of the board of directors; and, [ii]
for non-corporate entities, direct or indirect ownership of 20 percent or more
of the equity interests.

 

[b]                                 “Employee’s Beneficiaries” shall mean the person or persons designated by the Employee
under Section 3 as being entitled to receive the Employee Death Benefit,
provided that, to the extent that the Employee fails to designate any such
person or persons under Section 3, then the “Employee’s Beneficiaries”
shall mean, in the following order of priority, the Employee’s [i] spouse, [ii] lineal
descendants, [iii] parents, or [iv] estate.

 

[c]                                  “Employee Death Benefit” shall mean that portion of proceeds of the Policies payable
under Section 4[a] to the Employee’s Beneficiaries in the event of the
Employee’s death.

 

[d]                                 “Includible Compensation” shall mean the base compensation for service to the
Corporation or an Affiliate of the Corporation that is paid to the Employee in
the form of wages or salary currently includible in the Employee’s gross income
for federal income tax purposes, but such term shall not include overtime
payments, bonuses, commissions, contributions to employee benefit or welfare
plans, fringe benefits, director’s fees, or any amount includible in the
Employee’s income by virtue of this Agreement.

 

[e]                                  “Net Amount at Risk” with respect to the Employee under the Policies shall mean
the difference between the total death benefit and the cash value of the
Policies with respect to the Employee.

 

[f]                                    “Plan Administrator” shall have the meaning assigned to such term in Section 14.

 

Section 2.              Policy
Ownership.  The Corporation shall purchase the Policies
from the Insurers in such total face amounts as the Corporation shall determine
to be advisable and as shall permit the Corporation to satisfy its obligations
under this Agreement.  The parties agree
that they will take all necessary action to cause the Insurers to issue the
Policies and shall take such further action as may be necessary to cause the
Policies to conform to the provisions of 

 

 

2

 

this
Agreement.  The parties agree that the
Policies shall be subject to the terms and conditions of this Agreement and of
any endorsement to the Policies filed with each Insurer.  The Corporation shall be the sole and
absolute owner of the Policies and may exercise all ownership rights granted to
the owner under the terms of the Policies, except as may otherwise be
specifically provided in this Agreement.

 

Section 3.              Beneficiary
Designations.

 

[a]           Employee.  From time to time on or after the Effective
Date, the Employee may designate the person or persons to receive the Employee
Death Benefit, by specifying the same in a written notice delivered to the
Corporation in a form substantially similar to that attached as Schedule B.
Upon receipt of such notice (or within ten days after the date that any
previous written notice becomes ineffective for any reason), the Corporation
shall execute and deliver to the Insurers such forms as may be necessary to
designate the Employee’s Beneficiaries as being the beneficiary or
beneficiaries of the Policies in an amount equal to the Employee Death Benefit.
During the term of this Agreement, the Corporation shall not terminate, alter
or amend any such beneficiary designation without the express written consent
of the Employee.

 

[b]           Corporation.  Contemporaneously with the execution of this
Agreement. the Corporation has executed a beneficiary designation form for each
Policy, using the form required by the applicable Insurer for such
designations, for the balance of the proceeds of the Policies in excess of
Employee Death Benefit.

 

Section 4.              Payment
of Policy Proceeds.  In the event of the death of the Employee
while this Agreement and the Policies remain in effect, the death benefit, if
any, payable under the Policies on account of the death of the Employee shall
be paid as follows:

 

[a]           To the Employee’ s
Beneficiaries.  An amount
equal to the lesser of

 

[i]                                 125 percent of
the Employee’s Includible Compensation for the most recent calendar year; and

 

[ii]                             the Net Amount
at Risk with respect to the Employee under the Policies,

 

shall be paid directly by the Insurers to the
Employee’s Beneficiaries, in the manner and at such time or times as may be
provided in the death benefit payment provisions of such Policies.

 

[b]           Balance to the Corporation.  The balance of any such death benefit,
reduced by any indebtedness against such Policy existing at the death of the
Employee (including any interest due on such indebtedness), shall be paid to
the Corporation.

 

Section 5.              Settlement
Options.  As to their respective shares, the
Corporation and the Employee’s Beneficiaries may select any settlement option
provided in the Policies at the time of distribution.

 

Section 6.              Policy
Dividends.  To the extent an Insurer declares dividends
on a Policy, the Corporation shall have the right to choose the option or
combination of options it 

 

 

3

 

desires
from among those offered by the Insurer. 
The Corporation shall notify the Insurer of its choice.

 

Section 7.              Premium
Payments.  On or before the due date of each Policy
premium, or within the grace period provided under such Policy, the Corporation
shall pay the full amount of the premium with respect to such Policy to the
applicable Insurer.

 

Section 8.              Notice
to Employee of Taxable Cost.  The Corporation shall cause each Insurer to
furnish to the Plan Administrator and shall cause the Plan Administrator to
furnish the Corporation an annual report which shall include a statement of the
amount of compensation reportable by the Employee as taxable economic benefit
cost for federal and state income tax purposes, as a result of the Corporation’s
payment of the premium on each Policy.  Each
Insurer shall represent to the Corporation that it shall use for such purposes
such premium factors as may be authorized by and consistent with such guidance
as the Internal Revenue Service may publish from time to time and as shall
result in the least amount of such premiums being includible in the Employee’s
taxable income for federal and state income tax purposes.

 

Section 9.              Procedure
Upon Employee’s Death.  Upon the death of the Employee, while any
Policy and this Agreement are in force, the Corporation shall promptly take all
reasonable action requested by the Employee’s Beneficiaries to obtain payment
of the Employee’s Death Benefit.

 

Section 10.            Policy
Loans.  The Corporation may pledge or assign any
Policy, subject to the terms and conditions of this Agreement, for the sole
purpose of securing a loan from the applicable Insurer or from a third
party.  The amount of such loan,
including accumulated interest, shall not exceed the lesser of [a] the amount
of the premiums on the Policy paid by the Corporation pursuant to this
Agreement, or [b] the cash surrender value of the Policy (as determined by the
Insurer) as of the date through which premiums have been paid.  Interest charges on such loan shall be paid
by the Corporation.

 

Section 11.            Termination.  The term
of this Agreement shall begin on the Effective Date and shall terminate,
without notice or penalty to the Corporation, upon the first to occur of the
following events:

 

[a]                                  The total cessation of the business of the Corporation;

 

[b]                                 The bankruptcy, receivership or dissolution of the
Corporation;

 

[c]                                  The Employee’s separation from service with the Corporation;
and

 

[d]                                 The performance of this Agreement’s terms following the
death of the Employee.

 

Under no circumstances shall the
Corporation provide any benefit of life insurance coverage hereunder after the
Employee’s separation from service with the Corporation.

 

Section 12.            Effect
of Termination.  Upon the termination of this Agreement, the
Employee and the Employee’s Beneficiaries shall have no rights to or interest
in any Policy 

 

 

4

 

or any
amounts payable with respect to any Policy under either this Agreement or any
such Policy, and the Corporation shall be entitled to change the beneficiary
designation of each Policy otherwise governing (but for such termination) the
payment of the Employee Death Benefit, naming itself or any other person or
entity as revocable beneficiary thereof, and to exercise any other ownership
rights in and to the Policies, without regard to the provisions of this
Agreement.

 

Section 13.            Nature
of Employee’s Interest; Prohibition Against Assignment.  All amounts payable
to the Employee’s Beneficiaries as described in this Agreement shall be payable
solely from the death benefit proceeds of the Policies paid by the Insurers,
and nothing in this Agreement shall be construed to give the Employee or the
Employee’s Beneficiaries any right, title, interest, or claim in or to any
specific asset, fund, reserve, account, or property of any kind whatsoever
owned by the Employer or in which it may have any right, title, or interest now
or in the future, other than the death benefit proceeds of the Policies paid by
the Insurers.  Neither the Employee nor
the Employee’s Beneficiaries shall have any right to anticipate, transfer, or
encumber any part of such person’s interest under this Agreement or the
Policies.

 

Section 14.            Designation
of Plan Administrator.  Financial Designs, Ltd. is hereby designated
as the Plan Administrator of this Agreement. 
The Corporation delegates to the Plan Administrator, and the Plan
Administrator shall be responsible for, the general administration of this
Agreement, including the authority to receive all beneficiary designations
described in Section 3[a], and the authority to make any and all decisions
pertaining to the initial granting or denial of benefit claims.  The Corporation reserves the right at any
time to designate an alternate or successor Plan Administrator without the
Employee’s consent by delivering written notice to the Employee.  The Corporation is hereby designated as the
named fiduciary of this Agreement for purposes of the Employee Retirement
Income Security Act of 1974, as amended, and shall be responsible for its
overall supervision and management, all questions relating to the
interpretation of this Agreement and all decisions pertaining to the review of
denials of benefit claims.

 

Section 15.            Claims
Procedure.

 

[a]           Filing a Claim for
Benefits. Any beneficiary of a Policy shall make a claim for the
benefits provided under such Policy and this Agreement by contacting the Plan
Administrator at the following address:

 

Financial Designs, Ltd.

1775 Sherman Street, Suite 1800

Denver, Colorado 80203

Telephone: 
303-832-6100

Facsimile: 
303-832-7100

 

Upon receipt of any such claim, the Plan
Administrator shall contact the applicable Insurer and take all reasonable and
necessary actions to assist the beneficiary of such Policy under this Agreement
in filing a claim.

 

 

5

 

[b]           Claim Denial.  With respect to a claim for benefits under a
Policy, the applicable Insurer shall be the entity that reviews and makes
decisions on claim denials according to the terms of the Policy.

 

[c]           Notification to Claimant
of Decisions.  Within 90 days
after the filing of a claim, the applicable Insurer shall notify the claimant
in a written instrument that meets the requirements of Section 15[d]
below, whether the claim is upheld or denied in whole or in part or shall furnish
the claimant a written notice describing the specific circumstances requiring a
specified amount of additional time (but not more than 180 days from the date
the claim was filed) to reach a decision on the claim.

 

[d]           Content of Notice.  The Insurer shall provide, to any claimant
who is denied a claim for benefits, written notice setting forth, in a manner
calculated to be understood by the claimant, the following:

 

[1]                                  The specific
reason or reasons for the denial;

 

[2]                                  Specific
reference to pertinent Policy provision or provisions of this Agreement on
which the denial is based;

 

[3]                                  A description
of any additional material or information necessary for the claimant to perfect
the claim and an explanation of why such material or information is necessary;
and

 

[4]                                  An explanation
of the Agreement’s claim review procedure, as set forth in Sections 15 [d] and
[e] below.

 

[e]           Claims Review Procedure.  The purpose of the review procedure set forth
in this Section 15[e] and the following Section 15[f] is to provide a
method by which a claimant under a Policy may have a reasonable opportunity to
appeal and obtain a full and fair review of the denial of a claim. To
accomplish that purpose, the claimant or «Gender_Pronoun» duly authorized
representative:

 

[1]                                  May request
a review upon written application to the Insurer;

 

[2]                                  May review
pertinent Policy and Agreement documentation as provided in Section 18;
and

 

[3]                                  May submit
issues and comments in writing.

 

A claimant or «Gender_Pronoun» duly authorized
representative shall request a review by filing a written application for
review at any time within 60 days after receipt by the claimant of written
notice of the denial of the claim.

 

[f]            Decision on Review.  A decision on review of a denial of claim
shall be made in the following manner:

 

 

 

6

 

[1]                                  The decision on
review shall be made by the Insurer, which may, in its discretion, hold a
hearing on the denied claim. The Insurer shall make its decision promptly,
unless special circumstances (such as the need to hold a hearing) require an
extension of time for processing, in which case a decision shall be rendered as
soon as possible, but no later than 120 days after receipt of the request for
review.

 

[2]                                  The decision on
review shall be in writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by the claimant, and include
specific references to the pertinent Policy or provisions of this Agreement on
which the decision is based.

 

Section 16.            No
Contract of Employment.  Neither the terms of this Agreement nor the
benefits provided in accordance with this Agreement shall in any way be deemed
to constitute a contract for the employment of the Employee.  The terms of this Agreement shall not give
any employee the right to be retained in the employment of the Corporation.

 

Section 17.            Fringe
Benefit Only.  The benefits provided by this Agreement are a
fringe benefit only.  The Employee shall
have no option to receive cash from the Corporation in lieu of the benefits
provided under this Agreement.  Such
benefits are not being provided in lieu of a raise or bonus, or as part of a
salary reduction program.  No such
benefit shall be treated as compensation for purposes of any retirement plan of
the Corporation or any Affiliate of the Corporation.  The Corporation has no obligation to provide
any benefit to the Employee aside from the designation of beneficiaries under
such Policies as provided herein, including but without limitation, no
obligation to the Employee in the case of any Insurer’s default under such
Policies or any Insurer’s bankruptcy or other such event that results in the
nonpayment of amounts owed under any Policy.

 

Section 18.            Policy
Review.  A copy of the Policy and this Agreement may
be reviewed by the Employee, «Gender_Pronoun» Beneficiaries or «Gender_Pronoun»
assignees during normal working hours at the following address:

 

Financial
Designs, Ltd.

1775
Sherman Street, Suite 1800

Denver,
Colorado 80203

 

A copy of the Policy and this Agreement may be
obtained by the Employee, «Gender_Pronoun» Beneficiaries or «Gender_Pronoun»
assignee at a reasonable cost to such person.

 

Section 19.            No
Amendment or Termination Following Change of Control.  Notwithstanding any
other provision of this Agreement to the contrary, during the five years
following the date of a Change of Control with respect to the Corporation, this
Agreement may not be terminated and the provisions of this Agreement may not be
amended in any manner that would adversely affect the rights, expectancies, or
benefits of the Employee or the Employee’s Beneficiaries unless the Employee
consents in writing to such termination or amendment.  The 

 

 

7

 

Corporation
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the common stock or
assets of the Corporation expressly to assume all of the liabilities and
obligations of the Agreement.

 

For the purpose of this Section, a “Change of
Control” shall mean any of the following events:

 

[a]                                  the acquisition by any person or group of beneficial
ownership of  20 percent or more of
either the then outstanding stock or the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote generally in
the election of directors, except that (i) no
such person or group shall be deemed to own beneficially (a) any
securities acquired directly from the Corporation pursuant to a written
agreement with the Corporation, or (b) any
securities held by the Corporation or a subsidiary (as defined below) or any
employee benefit plan (or any related trust) of the Corporation or a subsidiary
(as defined below), and (ii) no
Change of Control shall be deemed to have occurred solely by reason of any such
acquisition by a corporation with respect to which, after such acquisition,
more than 60 percent of both the then outstanding common shares of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors are then beneficially owned, directly or indirectly, by the persons
who were the beneficial owners of the stock and voting securities of the
Corporation immediately before such acquisition;

 

[b]                                 individuals who, as of the Effective Date, constitute the
Board of  Directors of the Corporation
(the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board of Directors of the Corporation; provided that any
individual who becomes a director after the Effective Date whose election, or
nomination for election by the Corporation’s stockholders was approved by a
vote or written consent of at least two-thirds of the directors then comprising
the Incumbent Directors shall be considered as though such individual were an
Incumbent Director, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Corporation
(as such terms are used in Rule 14a-11 under the Securities Exchange Act
of 1934, as amended (“1934 Act”); or

 

[c]                                  approval by the stockholders of the Corporation of (i) a merger, reorganization or consolidation with
respect to which the individuals and entities who were the respective
beneficial owners of the stock and voting securities of the Corporation
immediately before such merger, reorganization or consolidation do not, after
such merger, reorganization or consolidation, beneficially own, directly or
indirectly, more than 60 percent of, respectively, the then outstanding common
shares and the combined voting power of the then outstanding voting securities
entitled 

 

 

8

 

to vote generally in the election of
directors of the Corporation resulting from such merger, reorganization or
consolidation, (ii) a liquidation or
dissolution of the Corporation or (iii) the
sale or other disposition of all or substantially all of the assets of the
Corporation.

 

[d]                                 For purposes of this definition, “person” means such term as
used in Securities Exchange Commission (“SEC”) Rule 13d-5(b) under
the 1934 Act; “beneficial owner” means such term as defined in SEC Rule 13d-3
under the 1934 Act; “group” means such term as defined in Section 13(d) of
the 1934 Act; “subsidiary” means a corporation as defined in Section 425(f) of
the Internal Revenue Code of 1986, as amended (“Code”) with the Corporation being
treated as the employer corporation for purposes of this definition of
subsidiary; and “stock” means the common stock of the Corporation.

 

Section 20.            General
Provisions.

 

[a]           Amendment.  This Agreement may not be amended, altered or
modified, except by a written instrument signed by the parties hereto, or their
respective successors or assigns, and may not be otherwise terminated except as
specifically provided elsewhere in this Agreement; provided, however, that the
Corporation unilaterally may amend this Agreement by providing notice to the
Employee of such amendment in order to modify the terms of the Agreement to
comply with law, as may reasonably be determined by the Corporation based on
new statutes, regulations, administrative pronouncements, cases, or other
governmental guidance, and the Corporation may make any other amendment to this
Agreement by providing notice to the Employee of such amendment to the extent
that such amendment does not materially alter the rights of the Employee
hereunder.

 

[b]           Continuation.  This Agreement shall be binding upon and
inure to the benefit of the Corporation and its successors and assigns, and the
Employee, «Gender_Pronoun» successors, assigns, heirs, executors,
administrators and beneficiaries.

 

[c]           Notice.  Any notice, consent or demand required or
permitted to be given under the provisions of this Agreement shall be in
writing, and shall be signed by the party giving or making the same.  If such notice, consent or demand is mailed
to a party hereto, it shall be sent by United States mail, postage prepaid,
addressed to such party’s last known address as shown on the records of the
Corporation.  The date of such mailing
shall be deemed the date of notice, consent or demand.

 

[d]           Governing Law.  This agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws of
the State of Colorado.

 

[e]           Headings &
Severability.  Headings at the
beginning of sections are for convenience of reference, shall not be considered
part of this Agreement, and shall not influence its construction.  The provisions of this Agreement shall be
construed as a whole in such manner as to carry out the provisions thereof and
shall not be construed separately without relation to the context.  Notwithstanding anything to the contrary, if
any provision of this Agreement shall be 

 

 

9

 

held
illegal or invalid for any reason, such determination shall not affect the
remaining provisions of this Agreement.

 

[f]            Interpretation.  Full power and authority to construe,
interpret and administer this Agreement is vested in the Corporation.  Any interpretation of the Agreement by the
Corporation or any administrative act by the Corporation will be final and binding
on the Employee.

 

[g]           Compliance with Code Section 409A.  The provisions of this Agreement shall be
read consistent with Code Section 409A and the final regulations issued
thereunder.  To the extent any provision
of this Agreement would result in taxation under Code Section 409A(a)(1)(A),
such provision shall have no effect.  To
the extent applicable, the Corporation may not accelerate the payment of
benefits provided under this Agreement except as expressly permitted under Code
Section 409A and the final regulations issued thereunder.

 

[h]           Economic Benefit Tax
Treatment.  This Agreement shall be interpreted and
enforced to comply with the split dollar final regulations so that it is
treated as an economic benefit transaction for tax purposes in which, at all
times, the only economic benefit to Employee shall be the value of the current
life insurance protection attributable to naming the beneficiary under the
Policy.  Employee shall not have any
current access to the Policy’s cash values within the meaning of the split
dollar final regulations or any other economic benefit other than the cost of
current life insurance protection.

 

[i]            No Anticipation or
Alienation.  The Employee’s
rights under this Agreement shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy of any kind.

 

[j]            Entire Agreement.
 This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and supersede all prior or contemporaneous understandings, negotiations or
discussions, whether oral or written of the parties hereto.

 

[k]           Counterparts.  This Agreement may be executed in several
counterparts, but all of which together shall constitute one and the same
Agreement. This Agreement may be signed and delivered by facsimile and any such
signature shall be deemed an original.

 

IN WITNESS WHEREOF, the parties have executed this
Agreement, in duplicate, as of the day and year first above written.

 

COBIZ BANK

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  «Employee_first»
  «Employee_middle»

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  «Employee_last»

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

10Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(the “Agreement”) is made and entered into as of this 5th day
of March, 2007 (the “Effective Date”), by and between 1st Century Bank,
National Association, Los Angeles, California (the “Bank”), on one hand,
and Donn B. Jakosky (the “Executive”), on the other hand.

 

WHEREAS, the parties hereto
wish to enter into an employment agreement to employ Executive as the Executive
Vice President and Chief Credit Officer of the Bank and to set forth certain
additional agreements between Executive and the Bank.

 

NOW, THEREFORE, in
consideration of the mutual covenants and representations contained herein, the
parties hereto agree as follows:

 

1.          At Will Employment. 
Executive’s employment with the Bank will be “at-will.” This means that
either Executive or the Bank may terminate the employment relationship at any
time, with or without Cause (defined below), or with or without notice.  Executive understands and agrees that neither
Executive’s job performance nor promotions, commendations, bonuses or the like
from the Bank give rise to or in any way serve as the basis for modification,
amendment, or extension, by implication or otherwise, of Executive’s employment
with the Bank.  The period of time
between the Effective Date and the termination of Executive’s employment
hereunder shall be referred to herein as the “Employment Period.”

 

2.          Position; Authority and Duties.

 

(a)        Positions and Reporting.  Executive shall serve as Executive Vice
President and Chief Credit Officer of the Bank. 
During the Employment Period, Executive shall report directly to the
President or the Chief Executive Officer of the Bank, as directed by the Board
of Directors of the Bank (the “Board”).

 

(b)        Authority and Duties.  Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are reasonably associated with Executive’s position as Executive Vice
President and Chief Credit Officer consistent with this Agreement and the bylaws
of the Bank.  Executive’s job duties will
primarily involve overseeing and managing the Bank’s loan portfolio, credit
policies and procedures, and loan grading, and communicating with the bank
regulators and internal examiners.

 

3.          Compensation and Benefits.

 

(a)        Salary.  During the Employment Period, the Bank shall
pay to Executive, as compensation for the performance of his duties and
obligations under this Agreement, a base salary at the rate of $15,000 per
month, payable in arrears semi-monthly in accordance with the normal payroll
practices of the Bank (the “Base Salary”). Such Base Salary shall be
subject to review initially within sixty (60) days after calendar year 2006,
and thereafter within sixty (60) days after each calendar year during the Employment
Period, for possible increases by the Board based on factors including, but not
limited to, market conditions and performance of Executive 

 

 

and the Bank, in its sole
discretion, but shall in no event be decreased from the levels set forth above
or from its then-existing level during the Employment Period.

 

(b)             Bonus.

 

(i)           Guaranteed Bonus.  On or before March 31, 2007, Executive
shall receive the following as a guaranteed bonus, whether or not he is
employed by the Bank on such date (the “Guaranteed Bonus”), unless
Executive’s employment shall have been terminated prior to such date for Cause
or unless Executive shall have resigned from the Bank prior to such date
without Good Reason:

 

(A)         A cash bonus of $75,000; and

 

(B)         A restricted stock award of 10,000
shares (in addition to the 30,000 shares awarded pursuant to Section 3(f) below),
which shall vest in increments of one-third on each anniversary of the March 31,
2007 grant date.

 

(ii)          Annual Bonus.  After payment of the Guaranteed Bonus, Executive
shall be entitled to receive annual bonus amounts in the form of cash and/or
restricted stock awards based upon the satisfaction of performance criteria
(the “Performance Goals”) that will be established at the beginning of
each calendar year by and at the discretion of the individual to whom Executive
reports (pursuant to Section 2(a) hereof), in consultation with
Executive and subject to the approval of the Board.  The relative amounts of cash and restricted
stock awards with which any annual bonus is payable shall be determined by the
Board. It is anticipated that increased levels of achievement of the agreed
upon Performance Goals will correlate to increased levels of annual bonus.
Performance Goals will include goals consistent with the Bank’s business plan
for the year, as established by the Bank’s management and subject to the review
and approval of the Board. The final determinations as to the actual corporate
and individual performance against the Performance Goals shall be made by the
Board in its sole good faith discretion. The Guaranteed Bonus and any bonus
payable thereafter shall be paid or granted, as appropriate, in one lump sum to
Executive at such time as other executive bonuses are paid.  The Board retains the discretion, but shall
have no obligation, to determine whether a pro-rata bonus is appropriate if
Executive is terminated or leaves the employ of the Bank prior to the annual
determination of bonuses.

 

(c)           Other Benefits.  During the Employment Period, Executive shall
receive such life insurance, disability insurance and health, dental and vision
and other insurance benefits, holiday, paid time off (“PTO”) benefits,
401(k) plan participation, and other benefits which the Bank extends, as a
matter of policy, to all of its executive employees, except as otherwise
provided herein, and shall be entitled to participate in all deferred
compensation and other incentive plans of the Bank, on the same basis as other
like employees of the Bank.  Without
limiting the generality of the foregoing, Executive shall be entitled to
twenty-three (23) days of PTO per year during the Employment Period, which
shall be scheduled in Executive’s discretion, subject to and taking into
account applicable banking laws and regulations and business needs.  Unused PTO may be accrued up to a maximum of
six (6) weeks of unused PTO, at which time Executive shall cease to
accrue unused PTO until used.

 

 

(d)           Business Expenses.  During the Employment Period, the Bank shall
promptly reimburse Executive for all documented reasonable business expenses
incurred by Executive in the performance of his duties under this Agreement, in
accordance with the Bank’s employee manual or policies adopted by the Board
from time to time.

 

(e)            Car Allowance.  The Bank shall provide Executive with an
automobile allowance of $500.00 per month during the Employment Period (the “Car
Allowance”).

 

(f)            Restricted Stock Award.

 

(i)           The Bank agrees to grant to Executive
a total of 30,000 shares of restricted stock, pursuant to a Notice of Grant and
Restricted Stock Agreement (the “Award Agreement”), under and subject to
the terms and conditions of the 1st Century Bank, N.A. Amended 2005 Equity
Incentive Plan.  Of the 30,000 shares of
restricted stock, 5,000 shares are vested as of December 31, 2006. An
additional 5,000 shares will vest on September 18, 2007, 10,000 shares
will vest on September 18, 2008, and 10,000 shares will vest on September 18,
2009.  The vesting of the last 25,000
shares of the 30,000 shares referred to herein is subject to Executive’s
continued employment with the Bank on the relevant vesting dates, unless
Executive is terminated without Cause (as defined in Section 4(a) of
this Agreement) or Executive terminates his employment for Good Reason (as
defined in Section 4(b) of this Agreement) pursuant to Section 5(a) hereof.

 

(ii)          In the event of any termination of
employment for any reason, Executive hereby grants to Bank the right and
option, for a period of thirty (30) days after the effective date of such
termination, to purchase any Shares owned by him on the effective date of such
termination that have been released from or are not otherwise subject to any
restriction on resales under the Plan at a price equal to 95% of the volume
weighted average closing price of the Bank’s common stock for the twenty (20)
trading days immediately prior to the effective date of termination of
employment as reported on any quotation service or exchange on which the Bank’s
common stock is then quoted or traded. 
For purposes of this subparagraph (h) terms not otherwise
defined shall have the meanings ascribed to them in the Plan.

 

4.             Termination of
Employment.

 

(a)          Termination for Cause.  The Board may terminate Executive’s
employment hereunder for Cause or without Cause.  For purposes of this Agreement termination
for “Cause” shall mean termination because (i) Executive: (A) committed
a significant act of dishonesty, deceit or breach of fiduciary duty in the
performance of his duties as an employee of the Bank; (B) grossly
neglected or willfully failed in any way to perform substantially the duties of
such employment after a written demand for performance is given to Executive by
the Board, which demand specifically identifies the manner in which such Board
believes Executive has failed to perform his duties; (C) has committed a
material breach of any provision of this Agreement; (D) willfully acted or
failed to act in any other way that materially and adversely affects the Bank; (E) is
removed and/or permanently prohibited from participating in the conduct of the
Bank’s affairs by an order issued under Section 8(e)(3) or 8(g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or
(g)(1)); or (ii) the Bank has received a final cease-and-desist order that
requires in substance that the Bank retain a qualified chief credit 

 

 

officer acceptable to
bank regulators with the experience, skill and other qualifications required to
ensure compliance with such order and the bank regulators have determined that
Executive does not meet these qualifications.

 

Termination under this Paragraph shall not prejudice
any remedy that the Bank may have at law, in equity, or under this Agreement.

 

(b)          Termination for Good Reason.  Executive shall have the right at any time to
terminate his employment with the Bank for any reason.  For purposes of this Agreement, and subject
to the Bank’s opportunity to cure as provided in Section 4(c) hereof,
Executive shall have “Good Reason” to terminate his employment hereunder
if such termination shall be the result of:

 

(i)            a material diminution during the
Employment Period in Executive’s title, duties or responsibilities as set forth
in Section 2 hereof, unless such events follow any of the circumstances
described in Section 4(a) regarding termination for Cause;

 

(ii)           a material breach by the Bank of the
compensation and benefits provisions set forth in Section 3 hereof;

 

(iii)          a material breach by the Bank of any
material terms of this Agreement; or

 

(iv)         the relocation of Executive’s principal
place of employment to any location more than 50 miles from the Bank’s
headquarters at the Effective Date.

 

(c)           Notice and Opportunity to Cure.  Notwithstanding the foregoing, it shall be a
condition precedent to the Bank’s right to terminate Executive’s employment for
Cause, and Executive’s right to terminate his employment for Good Reason that (1) the
party seeking the termination shall first have given the other party written
notice stating with specificity the reason for the termination (“breach”)
and (2) if such breach is susceptible of cure or remedy, a period of
thirty (30) days from and after the giving of such notice to cure the
breach.  With respect to terminations
because of a willful violation of any law, rule or regulation or issuance
of a final cease-and-desist order, or because of Executive’s personal
dishonesty or breach of fiduciary duty involving personal profit, the Bank will
not be required to provide a cure period.

 

(d)           Termination Upon Death or
Permanent Disability.  The Employment
Period shall automatically be terminated by the death of Executive. The
Employment Period may be terminated by the Bank if Executive shall be subject
to a “permanent disability” as such term is defined in the disability insurance
provided by the Bank, or if such insurance is not provided by the Bank, the
term shall mean that Executive has been unable to perform his duties under this
Agreement for a period of at least ninety (90) consecutive days or one-hundred
twenty (120) days in any one-hundred eighty (180) day period, and it is not
reasonable to believe that he would ever be able to resume his duties on a full
time basis.

 

(e)           Termination Due to a Significant
Change.  In the event this Agreement
or Executive’s employment is terminated without Cause by the Bank or for Good
Reason by Executive within twelve (12) months after the occurrence of a
Significant Change (as defined below), Executive shall be entitled to the
separation pay as described in Paragraph 5(a) below.

 

 

(f)            Definition of Significant Change.  A “Significant Change” shall be deemed
to have taken place if:

 

(i)           there shall be consummated any
consolidation or merger of the Bank, whether or not the Bank is the continuing
or surviving corporation, or pursuant to which a majority of the shares of the
Bank’s capital stock or a majority of the shares of the capital stock of a
target company acquired by the Bank (a “Target Company”) are converted into
cash, securities or other property, or any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Bank to another entity or the acquisition by the Bank of all or
substantially all of the assets of a Target Company, it being agreed that a Significant
Change shall not be deemed to have occurred in the event the Bank forms a
holding company as a result of which the holders of the Bank’s outstanding
capital securities immediately prior to the transaction hold, in approximately
the same relative proportions as they held prior to the transaction,
substantially all of the outstanding capital securities of a holding company
owning all of the Bank’s outstanding capital securities after the completion of
the transaction; or

 

(ii)          any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) shall, after the date hereof, become
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of securities of the Bank representing
40% or more of the voting power of all of the then outstanding securities of
the Bank having the right under ordinary circumstances to vote in an election
of the Board (including, without limitation, any securities of the Bank that
any such person has the right to acquire pursuant to any agreement, or upon
exercise of conversion rights, warrants or options, or otherwise, shall be
deemed beneficially owned by such person); or

 

(iii)         individuals who as of the Effective
Date constitute the entire Board and any new directors whose election by the
Bank’s shareholders, or whose nomination for election by the Board, shall have
been approved by a vote of at least a majority of the directors then in office
who either were directors at the date hereof or whose election or nomination
for election shall have been so approved shall cease for any reason to
constitute a majority of the members of the Board.

 

5.             Consequences of Termination.  The following are the separation pay and benefits
to which Executive is entitled upon termination of employment in all positions
with the Bank, and such payments and benefits shall be the exclusive payments
and benefits to which Executive is entitled upon such termination.  Except in the case of termination of
employment by the Bank with Cause, or due to death, the post-termination
payments and benefits shall only be provided if Executive first enters into a
form of release agreement reasonably satisfactory to the Bank releasing the
Bank from any and all claims, known and unknown, related to Executive’s
employment with the Bank or any other claims the Executive may have against the
Bank.

 

(a)          Termination Without Cause or for
Good Reason. In the event the Bank terminates Executive’s employment
hereunder without Cause (other than upon death or permanent disability) or
Executive terminates his employment for Good Reason, Executive shall become
immediately vested in any of the remaining 30,000 shares of restricted stock
granted to 

 

 

him under the Award
Agreement.  In addition, in the event of
termination of Executive’s employment hereunder (1) by the Bank without
Cause (other than upon death or permanent disability), (2) by Executive
for Good Reason, or (3) a termination by the Bank without Cause or Executive
for Good Reason within twelve (12) months following a Significant Change,
Executive shall be entitled to the following separation pay and benefits:

 

(i)            Separation Pay – a lump sum amount
equal to six (6) months of Executive’s annual Base Salary.  However, in the event Executive’s employment
is terminated  by the Bank without Cause
or Executive terminates his employment for Good Reason within twelve (12)
months following a Significant Change, Executive shall be entitled to receive
one (1) time the highest amount of the Base Salary, the Car Allowance, and
any bonus to which Executive is entitled pursuant to Section 3(b) hereof
(collectively, the “Cash Compensation”) paid to Executive by the Bank within
the three (3) years preceding the Significant Change.  The amount of the Cash Compensation shall be
annualized in the event a Significant Change occurs prior to September 18,
2007;

 

(ii)           Benefits Continuation – continuation
for six (6) months (the “Separation Period”) of coverage under the
group medical care, disability and life insurance benefit plans or arrangements
in which Executive is participating at the time of termination, with the Bank
continuing to pay its share of premiums and associated costs as if Executive
continued in the employ of the Bank; provided, however, that the Bank’s
obligation to provide such coverages shall be terminated if Executive obtains
comparable substitute coverage from another employer at any time during the
Separation Period.  Executive agrees to
advise the Bank immediately if such comparable substitute coverage is obtained
from another employer.  Executive shall
be entitled, at the expiration of the Separation Period, to elect continued
coverage under the Bank’s medical benefit plans pursuant to the terms of COBRA.

 

(b)           Termination Upon Disability.  In the event of termination of Executive’s
employment hereunder by the Bank on account of permanent disability, Executive
shall be entitled to the following separation pay and benefits.

 

(i)           Separation pay – Separation payments in
the form of continuation of Executive’s Base Salary as in effect immediately
prior to such termination for a period of six (6) months paid in equal
installments on the Bank’s regularly schedule payroll dates following the first
date of disability; and

 

(ii)          Benefits Continuation – the same
benefits as provided in Section 5(a)(ii) above, to be provided during
the Employment Period while Executive is suffering from a permanent disability
and for a period of six (6) months following the effective date of termination
of employment by reason of permanent disability.

 

(c)           Termination Upon Death.  In the event of termination of Executive’s
employment hereunder on account of Executive’s death, the Bank shall pay to
Executive’s beneficiary or beneficiaries or his estate, as the case may be, the
accrued Base Salary and accrued and unused PTO earned through the date of
death.  Such payment shall be made no
later than sixty (60) days after the date of death. In addition, Executive’s
beneficiary(ies) or his estate shall be entitled to the payment of benefits
pursuant to any life insurance policy of Executive, as 

 

 

provided for in Section 3(c) above.
Executive’s beneficiary or estate shall not be required to remit to the Bank
any payments received pursuant to any life insurance policy purchased pursuant
to Section 3(c) above.

 

(d)           Accrued Rights.  Notwithstanding the foregoing provisions of
this Section 5, in the event of termination of Executive’s employment
hereunder for any reason, Executive shall be entitled to (i) payment of
any unpaid portion of his Base Salary through the effective date of
termination,  (ii) payment of any
unreimbursed reasonable business expenses incurred pursuant to Section 3(d) above,
and (iii) payment of any accrued but unpaid benefits solely in accordance
with the terms of any employee benefit plan or program of the Bank (except for
the Guaranteed Bonus, remuneration under any other bonus plan is not
guaranteed).

 

(e)           Termination for Cause.  In the event the employment of Executive is
terminated by the Bank for Cause, the Bank shall provide Executive only salary
and PTO earned and unreimbursed business expenses incurred through the date of
termination.  No separation payment or
benefit shall be provided in such instance.

 

(f)            Nonassignability.  Neither Executive nor any other person or
entity shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of
the rights or benefits of Executive under this Section 5.  The terms of this Section 5(f) shall
not affect the interpretation of any provision of this Agreement.

 

(g)           Regulatory Restrictions.  The parties understand and agree that at the
time any payment would otherwise be made or benefit provided under
Sections 5 or 18, depending on the facts and circumstances existing at
such time, the satisfaction of such obligations by the Bank may be deemed by a
regulatory authority to be illegal, an unsafe and unsound practice, or for some
other reason not properly due or payable by the Bank.  Among other things, the regulations at
12 C.F.R. Part 30, Appendix A and at 12 C.F.R. Part 359
promulgated pursuant to Sections 18(k) and 39(a) of the Federal
Deposit Insurance Act, respectively, or similar regulations or regulatory
action following similar principles may apply at such time. The parties
understand, acknowledge and agree that, notwithstanding any other provision of
this Agreement, the Bank shall not be obligated to make any payment or provide
any benefit, and any such obligation of the Bank to do so under Sections 5
or 18 shall be extinguished if an appropriate regulatory authority disapproves
or does not acquiesce, if required, and the regulatory authority’s disapproval
or non-acquiescence is documented in a writing from the regulatory authority, a
copy of which is actually provided by the regulatory authority or the Bank to
Executive.

 

(h)           Conditions to Separation Benefits.  The Bank shall have the right to seek
repayment of the separation payments and benefits or to terminate payments or
benefits provided by this Section 5 in the event that Executive fails to
honor, in accordance with their terms, the provisions of Sections 6 or 9
hereof.

 

(i)            Suspension and Removal Orders.  If Executive is suspended and/or temporarily
prohibited from participating in the conduct of the Bank’s affairs by notice
served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)) or
successor provisions, the Bank’s obligations under this 

 

 

Agreement shall be
suspended as of the date of service, unless stayed by appropriate
proceedings.  If the charges in the
notice are dismissed, the Bank may in its discretion:  (i) pay Executive all or part of the
compensation withheld while its obligations under this Agreement were
suspended; and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.  If Executive is
removed and/or permanently prohibited from participating in the conduct of the
Bank’s affairs by an order issued under Section 8(e)(3) or 8(g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or
(g)(1)), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the parties shall not be
affected.

 

(j)            Termination by Default.  If the Bank is in default (as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act (12 U.S.C. Section 1813(x)(1)), all
obligations under this Agreement shall terminate as of the date of default, but
vested rights of the parties shall not be affected.

 

(k)           Supervisory Assistance or Merger.  All obligations under this Agreement shall be
terminated, except to the extent that it is determined that continuation of the
Agreement is necessary for the continued operation of the Bank:  (i) by the Comptroller of the Currency
(the “Comptroller”) or his or her designee, at the time that the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 11 of
the Federal Deposit Insurance Act (12 U.S.C. Section 1821); or (ii) by
the Comptroller or his or her designee, at the time that the Comptroller or his
or her designee approves a supervisory merger to resolve problems related to
the operation of the Bank or when the Bank is in an unsafe or unsound
condition.  All rights of the parties
that have already vested, however, shall not be affected by such action.

 

6.             Confidentiality.  Executive agrees that he will not at any time
during the Employment Period or at any time thereafter for any reason, in any
fashion, form or manner, either directly or indirectly, divulge, disclose or
communicate to any person, firm, corporation or other business entity, in any
manner whatsoever, any confidential information or trade secrets concerning the
business of the Bank, including, without limiting the generality of the
foregoing, the techniques, methods or systems of its operation or management,
any information regarding its financial matters, or any other material
information concerning the business of the Bank (including customer lists), any
of its customers, governmental relations, customer contacts, underwriting
methodology, loan program configuration and qualification strategies, marketing
strategies and proposals, its manner of operation, its plans or other material
data, or any other information concerning the business of the Bank, its
subsidiaries or affiliates, and the Bank’s good will (the “Business”).  The provisions of this Section 6 shall
not apply to (i) information disclosed in the performance of Executive’s
duties to the Bank based on his good faith belief that such a disclosure is in
the best interests of Bank; (ii) information that is, at the time of the
disclosure, public knowledge; (iii) information disseminated by the Bank
to third parties in the ordinary course of business; (iv) information
lawfully received by Executive from a third party who, based upon inquiry by
Executive, is not bound by a confidential relationship to the Bank or otherwise
improperly received the information; or (v) information disclosed under a
requirement of law or as directed by applicable legal authority having
jurisdiction over Executive.

 

 

Executive agrees that all
manuals, documents, files, reports, studies or other materials used and/or
developed by Executive for the Bank during the Term of this Agreement are
solely the property of the Bank, and that Executive has no right, title or
interest therein.  Upon termination of
Executive’s employment, Executive or Executive’s representative shall promptly
deliver possession of all such materials (including any copies thereof) to the
Bank.

 

7.             Keyman Life Insurance. The
Bank shall have the right to obtain and hold a “keyman” life insurance policy
on the life of Executive with the Bank as beneficiary of the policy. Executive
agrees to provide any information required for the issuance of such policy and
submit himself to any physical examination required for such policy.

 

8.             Unsecured General Creditor.  Neither Executive nor any other person or
entity shall have any legal right or equitable rights, interests or claims in
or to any property or assets of the Bank under the provisions of this
Agreement.  No assets of the Bank shall
be held under any trust for the benefit of Executive or any other person or
entity or held in any way as security for the fulfilling of the obligations of
the Bank under this Agreement. All of the Bank’s assets shall be and remain the
general, unpledged, unrestricted assets of the Bank. The Bank’s obligations
under this Agreement are unfunded and unsecured promises, and to the extent
such promises involve the payment of money, they are promises to pay money in
the future.  Executive and any person or
entity claiming through him shall be unsecured general creditors with respect
to any rights or benefits hereunder.

 

9.             Business
Protection Covenants.

 

(a)          Covenant Not to Compete.  Executive agrees that he will not, during the
Employment Period, voluntarily or involuntarily, directly or indirectly, (i) engage
in any banking or financial products or service business, loan origination or
deposit-taking business or any other business competitive with that of the
Bank, its subsidiaries or affiliates (“Competitive Business”), (ii) directly
or indirectly own any interest in (other than less than 3% of any publicly
traded company or mutual fund), manage, operate, control, be employed by, or
provide management or consulting services in any capacity to any firm,
corporation, or other entity (other than the Bank or its subsidiaries or
affiliates) engaged in any Competitive Business, or (iii) directly or
indirectly solicit or otherwise intentionally cause any employee, officer, or
member of the Board or any of its subsidiaries or affiliates to engage in any
action prohibited under (i) or (ii) of this Section 9(a).

 

(b)          Inducing Employees To Leave The
Bank; Employment of Employees.  Any
attempt on the part of Executive to induce others to leave the Bank’s employ,
or the employ of any of its subsidiaries or affiliates, or any effort by
Executive to interfere with the Bank’s relationship with its other employees
would be harmful and damaging to the Bank. 
Executive agrees that during the Employment Period and for a period of
twelve (12) months thereafter, Executive will not in any way, directly or
indirectly:  (i) induce or attempt
to induce any employee of the Bank or any of its subsidiaries of affiliates to
quit employment with the Bank or the relevant subsidiary or affiliate; (ii) otherwise
interfere with or disrupt the relationships between the Bank and its
subsidiaries and affiliates and their respective employees; (iii) solicit,
entice, or hire away any employee of the Bank or any of its subsidiaries or
affiliates; or (iv) hire or engage any employee of the Bank or any
subsidiary or affiliate, or any former employee of the 

 

 

Bank or any subsidiary or
affiliate whose employment with the Bank or the relevant subsidiary or
affiliate ceased less than one (1) year before the date of such hiring or
engagement.

 

(c)           Nonsolicitation of Business.  For a period of twelve (12) months from
the date of termination of employment, Executive will not utilize the
confidential proprietary or trade secret information to divert or attempt to
divert from the Bank or any of its subsidiaries or affiliates, any business the
Bank or a subsidiary or affiliate had enjoyed or solicited from its customers,
borrowers, depositors or investors during the twelve (12) months prior to
termination of his employment.

 

(d)           Bank’s Ownership of Intellectual
Property.  To the extent that
Executive has intellectual property rights of any kind in any pre-existing
works which are subsequently incorporated in any work or work product produced
in rendering services to the Bank, Executive hereby grants Bank a royalty-free,
irrevocable, world-wide, perpetual non-exclusive license (with the right to
sublicense), to make, have made, copy, modify, use, sell, license, disclose,
publish or otherwise disseminate or transfer such subject matter.  Similarly, Executive agrees that all
inventions, discoveries, improvements, trade secrets, original works of
authorship, developments, formulae, techniques, processes, and know-how,
whether or not patentable, and whether or not reduced to practice, that are
conceived, developed or reduced to practice during Executive’s employment with
the Bank, either alone or jointly with others, if on the Bank’s time, using the
Bank’s facilities, or relating to the Bank shall be owned exclusively by the
Bank, and Executive hereby assigns to the Bank all of Executive’s right, title
and interest throughout the world in all such intellectual property.  Executive agrees that the Bank shall be the
sole owner of all domestic and foreign patents or other rights pertaining
thereto, and further agrees to execute all documents that the Bank reasonably
determines to be necessary or convenient for use in applying for, prosecuting,
perfecting, or enforcing patents or other intellectual property rights,
including the execution of any assignments, patent applications, or other
documents that the Bank may reasonably request. 
This provision is intended to apply to the extent permitted by
applicable law and is expressly limited by Section 2870 of the California
Labor Code, which is set forth in its entirety in Exhibit A to this
Agreement.  By signing this Agreement,
Executive acknowledges that this paragraph shall constitute written notice of
the provisions of Section 2870.

 

(e)           Bank’s Ownership of Copyrights.  Executive agrees that all original works of
authorship not otherwise within the scope of Paragraph (d) above that are
conceived or developed during Executive’s employment with the Bank, either
alone or jointly with others, if on the Bank’s time, using Bank facilities, or
relating to the Bank, are “works for hire” to the greatest extent permitted by
law and shall be owned exclusively by the Bank, and Executive hereby assigns to
the Bank all of Executive’s right, title, and interest in all such original
works of authorship.  Executive agrees
that the Bank shall be the sole owner of all rights pertaining thereto, and
further agrees to execute all documents that the Bank reasonably determines to
be necessary or convenient for establishing in the Bank’s name the copyright to
any such original works of authorship.

 

10.          No Breach of Prior Agreement.  Executive represents that his performance of
all the terms of this Agreement and his duties as an executive of the Bank will
not breach any agreement with any former employer or other party.  Executive represents that he will not bring 

 

 

with him to the Bank or
use in the performance of his duties for the Bank any documents or materials of
a former employer that are not generally available to the public or have not
been legally transferred to the Bank.

 

11.           Resignations.  Executive agrees that upon termination of
employment, for any reason, he will submit his resignations from all offices
and directorships with the Bank and all of its subsidiaries.

 

12.           Other Agreements.  The parties further agree that to the extent
of any inconsistency between this Agreement and any employee manual or policy
of the Bank, that the terms of this Agreement shall supersede the terms of such
employee manual or policy.

 

13.           Notice.  For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be personally delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, or sent by facsimile, provided that the facsimile cover sheet
contains a notation of the date and time of transmission, and shall be deemed
received:  (i) if personally
delivered, upon the date of delivery to the address of the person to receive
such notice, (ii) if mailed in accordance with the provisions of this Section 13,
two (2) business days after the date placed in the United States
mail, (iii) if mailed other than in accordance with the provisions of this
Section 13 or mailed from outside the United States, upon the date of
delivery to the address of the person to receive such notice, or (iv) if
given by facsimile, when sent.  Notices
shall be addressed as follows:

 

If
to the Bank:

 

1st
Century Bank, National Association

1875 Century Park East

Suite 1400

Los Angeles, CA  90067

Attn:  Chairman of the Board

 

With
a copy to:

 

Manatt,
Phelps & Phillips, LLP

11355 West Olympic Avenue

Los Angeles, CA 90064

Attn: Gordon M. Bava, Esq.

 

If
to Executive, to:

 

Donn
B. Jakosky

5764 Green Meadow Drive            

Agoura Hills, CA 91301

 

or to such other respective
addresses as the parties hereto shall designate to the other by like notice,
provided that notice of a change of address shall be effective only upon
receipt thereof.

 

 

14.           Arbitration.  Any dispute or controversy arising under or in
connection with this Agreement, the inception or termination of Executive’s
employment, or any alleged discrimination or 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 Executive 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
Executive believes he would be entitled to compensation or benefits; tort
claims related to such employment; claims for discrimination and harassment
(including, but not limited to, race, sex, religion, national origin, age,
marital status or medical condition, disability, sexual orientation, or any
other characteristic protected by federal, state or local law); claims for
benefits (except where an employee benefit or pension plan specifies that its
claims procedure shall culminate in an arbitration or other procedure different
from this one); and claims for violation of any public policy, federal, state
or other governmental law, statute, regulation or ordinance.  The arbitration will be conducted in Los
Angeles County.  The arbitration shall
provide for written discovery and depositions adequate to give the parties
access to documents and witnesses that are essential to the dispute.  The arbitrator shall have no authority to add
to or to modify this Agreement, shall apply all applicable law, and shall have
no lesser and no greater remedial authority than would a court of law resolving
the same claim or controversy.  The
arbitrator shall issue a written decision that includes the essential findings
and conclusions upon which the decision is based, which shall be signed and
dated.  Executive and the Bank shall each
bear his or its own costs and attorneys’ fees incurred in conducting the
arbitration and, except in such disputes where Executive 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.  For such disputes
that do not involve Statutory Claims, if the Executive is determined to be the prevailing
party, the arbitrator shall have the discretion to order the Bank to reimburse
the Executive for his portion of the arbitrator’s fees and administrative costs
of AAA charged to the parties as a result of the arbitration, but not his
attorneys’ fees or other costs.  In
disputes where Executive asserts a Statutory Claim against the Bank or where
otherwise required by law, Executive shall be required to pay only the AAA
filing fee to the extent such filing fee does not exceed the fee to file a
complaint in state or federal court.  The
Bank 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.

 

15.           Waiver of Breach.  Any waiver of any breach of this Agreement
shall not be construed to be a continuing waiver or consent to any subsequent
breach on the part either of Executive or of the Bank.  No delay or omission in the exercise of any
power, remedy, or right herein provided or otherwise available to any party
shall impair or affect the right of such party thereafter to exercise the
same.  Any extension of time or other
indulgence granted to a party hereunder shall not otherwise alter or affect any
power, remedy or right of any other party, or the obligations of the party to
whom such extension or indulgence is granted except as specifically waived.

 

16.           Non-Assignment; Successors.  Neither party hereto may assign his or its
rights or delegate his or its duties under this Agreement without the prior
written consent of the other 

 

 

party; provided, however,
that: (i) this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Bank upon any sale of all or substantially
all of the Bank’s assets, or upon any merger, consolidation or reorganization
of the Bank with or into any other corporation, all as though such successors
and assigns of the Bank and their respective successors and assigns were the
Bank; and (ii) this Agreement shall inure to the benefit of and be binding
upon the heirs, assigns or designees of Executive to the extent of any payments
due to them hereunder.  As used in this
Agreement, the term “Bank” shall be deemed to refer to any such successor or
assign of the Bank referred to in the preceding sentence.

 

17.           Withholding of Taxes. All
payments required to be made by the Bank to Executive under this Agreement
shall be subject to the withholding and deduction of such amounts, if any,
relating to tax, and other payroll deductions as the Bank may reasonably
determine it should withhold and/or deduct pursuant to any applicable law or
regulation (including, but not limited to, Executive’s portion of social
security payments and income tax withholding) now in effect or which may become
effective any time during the term of this Agreement.

 

18.           Excise Tax Provision.  Notwithstanding anything elsewhere in this
Agreement to the contrary, if any of the payments or benefits provided for in
this Agreement, together with any other payments or benefits which Executive
has the right to receive from the Bank (or its affiliated companies), would
constitute a “parachute payment” as defined in Section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the “Code”) or any
successor provision, the parties agree that the payments or benefits provided
to Executive pursuant to this Agreement shall be reduced (in each case, in such
manner as Executive in his sole discretion shall determine) so that the present
value of the total amount received by Executive that would constitute a “parachute
payment” will be $1.00 less than three (3) times Executive’s base amount
(as defined in Section 280G of the Code) and so that no portion of the
payment or benefits received by Executive would be subject to the excise tax
imposed by Section 4999 of the Code.

 

19.           Indemnification.  To the fullest extent permitted by law,
regulation, and the Bank’s Articles of Incorporation and Bylaws, the Bank shall
pay as and when incurred all expenses, including legal and attorney costs,
incurred by, or shall satisfy as and when entered or levied a judgment or fine
rendered or levied against, Executive in an action brought by a third party
against Executive (whether or not the Bank is joined as a party defendant) to
impose a liability or penalty on Executive for an act alleged to have been committed
by Executive while an officer of the Bank, provided that Executive was acting
in good faith, within what Executive reasonably believed to be the scope of
Executive’s employment or authority and for a purpose which Executive
reasonably believed to be in the best interests of the Bank or the Bank’s
shareholders, and in the case of a criminal proceeding, that Executive had no
reasonable cause to believe that Executive’s conduct was unlawful.  Payments authorized hereunder include amounts
paid and expenses incurred in settling any such action or threatened
action.  All rights hereunder are limited
by any applicable state or Federal laws.

 

20.           Severability.  To the extent any provision of this Agreement
or portion thereof shall be invalid or unenforceable, it shall be considered
deleted therefrom (but only for so long as such provision or portion thereof
shall be invalid or unenforceable) and the remainder of such provision and of
this Agreement shall be unaffected and shall continue in full force and effect to

 

 

the fullest extent
permitted by law if enforcement would not frustrate the overall intent of the
parties (as such intent is manifested by all provisions of the Agreement
including such invalid, void, or otherwise unenforceable portion).

 

21.           Payment.  All amounts payable by the Bank to Executive
under this Agreement shall be paid promptly on the dates required for such
payment in this Agreement without notice or demand.

 

22.           Authority.  Each of the parties hereto hereby represents
that each has taken all actions necessary in order to execute and deliver this
Agreement.

 

23.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

24.           Governing Law.  This Agreement shall be construed,
interpreted and enforced in accordance with the National Bank Act and the laws
of the State of California, without giving effect to the choice of law
principles thereof.

 

25.           Entire Agreement.  This Agreement and written agreements, if
any, entered into concurrently herewith constitute the entire agreement by the
Bank and Executive with respect to the subject matter hereof and merges and
supersedes any and all prior discussions, negotiations, agreements or
understandings between Executive and the Bank with respect to the subject
matter hereof, whether written or oral. 
This Agreement may be amended or modified only by a written instrument
executed by Executive and the Bank. With regard to such amendments,
alterations, or modifications, facsimile signatures shall be effective as
original signatures.  Any amendment,
alteration, or modification requiring the signature of more than one party may
be signed in counterparts.

 

26.           Further Actions.  Each party agrees to perform any further acts
and execute and deliver any further documents reasonably necessary to carry out
the provisions of this Agreement.

 

27.           Time of Essence.  Time is of the essence of each and every
term, condition, obligation and provision hereof.

 

28.           No Third Party Beneficiaries.  This Agreement and each and every provision
hereof is for the exclusive benefit of the parties and not for the benefit of
any third party.

 

29.           Headings.  The headings in this Agreement are inserted only
as a matter of convenience, and in no way define, limit, or extend or interpret
the scope of this Agreement or of any particular provision hereof.

 

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written above.

 

	
   

  	
  1ST CENTURY BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan I. Rothenberg

  
	
   

  	
   

  	
  Alan I. Rothenberg

  
	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Donn B. Jakosky

  
	
   

  	
    Donn B. Jakosky

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