UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Professional Bancorp, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
743112104
(CUSIP Number)
JoAnn M. Strasser, Esq., Brown, Cummins & Brown Co., L.P.A., 3500 Carew Tower,
441 Vine Street, Cincinnati, Ohio 45202 (513) 381-2121
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 11, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Check the following box if a fee is being paid with the statement. [ ]
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of equity securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five percent or
less of such class.)
(See Rule 13d-7.)
(Continued on Following Pages)
(Page 1 of 20 Pages)
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* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities and
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
George E. Fern Co.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [XX]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
NUMBER OF SHARES 7. SOLE VOTING POWER 60,270
BENEFICIALLY OWNED 8. SHARED VOTING POWER 0
BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 60,270
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
60,270 shares of common stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.6%
14. TYPE OF REPORTING PERSON
CO
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Martin S. Goldfarb, M.D.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [XX]
3. SEC USE ONLY
4. SOURCE OF FUNDS
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
US
NUMBER OF SHARES 7. SOLE VOTING POWER 22,050
BENEFICIALLY OWNED 8. SHARED VOTING POWER 0
BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 22,050
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,050 shares of common stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
14. TYPE OF REPORTING PERSON
IN
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mark B. and Pamela G. Kuby
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [XX]
3. SEC USE ONLY
4. SOURCE OF FUNDS
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
US
NUMBER OF SHARES 7. SOLE VOTING POWER 0
BENEFICIALLY OWNED 8. SHARED VOTING POWER 26,250
BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON WITH 10. SHARED DISPOSITIVE POWER 26,250
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,250 shares of common stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.0%
14. TYPE OF REPORTING PERSON
IN
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Joel S. Moskowitz
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [XX]
3. SEC USE ONLY
4. SOURCE OF FUNDS
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
US
NUMBER OF SHARES 7. SOLE VOTING POWER 3,675
BENEFICIALLY OWNED 8. SHARED VOTING POWER 0
BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 3,675
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,675 shares of common stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.3%
14. TYPE OF REPORTING PERSON
IN
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ray T. Oyakawa
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [XX]
3. SEC USE ONLY
4. SOURCE OF FUNDS
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
US
NUMBER OF SHARES 7. SOLE VOTING POWER 10,000
BENEFICIALLY OWNED 8. SHARED VOTING POWER 0
BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 10,000
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,000 shares of common stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
14. TYPE OF REPORTING PERSON
IN
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Milton J. Schloss Sr. Trust, Milton J. Schloss Sr., Trustee
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [XX]
3. SEC USE ONLY
4. SOURCE OF FUNDS
PF*
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
US*
NUMBER OF SHARES 7. SOLE VOTING POWER 21,000
BENEFICIALLY OWNED 8. SHARED VOTING POWER 0
BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 21,000
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,000 shares of common stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.6%
14. TYPE OF REPORTING PERSON
IN*
- ------------------------------
* Information relates to Milton J. Schloss, Sr.
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Delaware Charter Guarantee & Trust, FBO Herbert Weiss IRA
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [XX]
3. SEC USE ONLY
4. SOURCE OF FUNDS
PF*
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
US*
NUMBER OF SHARES 7. SOLE VOTING POWER 10,500
BENEFICIALLY OWNED 8. SHARED VOTING POWER 0
BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 10,500
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,500 shares of common stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
14. TYPE OF REPORTING PERSON
IN*
- -------------------------
* Information relates to Herbert Weiss.
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<PAGE>
SCHEDULE 13D
Additional Information
Item 3 Source and Amount of Funds or Other Consideration:
This amendment is being filed to disclose the dissolution of the group.
Because the group is no longer in existence, for the purposes of Section 13(d)
or 13(g) of the Act, none of the Reporting Persons beneficially owns over 5% of
the common stock of the issuer. A schedule was filed on May 20, 1996 as a result
of the formation of a roup (the "Reporting Persons") as described in Rule
13d-5(b)(1) of the Exchange Act (the "Act"), under which Rule a group shall be
deemed to have acquired beneficial ownership, for purposes of Section 13(d) of
the Act, of all equity securities of an issuer owned by the group. This schedule
is not being filed to report the purchase of securities of the issuer and,
therefore, there is no material information with respect to the source or amount
of funds or other consideration used or to be used in making purchases. The
filing of this schedule shall not be construed as an admission by the Reporting
Persons that any of the Reporting Persons had ever been a beneficial owner of
the securities owned by the other Reporting Persons, and each Reporting person
affirmatively disclaims beneficial ownership of the securities owned by the
other Reporting Persons.
Item 4 Purpose of the Transaction:
As disclosed in the previously filed Schedule 13D, the group's purpose
was to elect a slate of director candidates and to urge the new board to
consider replacing one or more of the current executive officers. A settlement
agreement related to this purpose is filed as an exhibit hereto.
Item 6 Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer:
The Reporting Persons have agreed to dissolve the group described in
Item 3.
Item 7 Materials to be Filed as Exhibits:
Exhibit I - Joint Filing Agreement
Exhibit II - Settlement Agreement
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<PAGE>
SIGNATURES
After reasonable inquiry and to the best of the undersigneds' knowledge
and belief, the undersigned certify that the information set forth in this
Statement is true, complete and correct.
Dated: July 18, 1996 GEORGE E. FERN CO.
By: /s/
George J. Budig, President
Dated: July 23, 1996 /s/
Martin S. Goldfarb, M.D.
Dated: July 22, 1996 /s/
Mark B. Kuby
Dated: July 22, 1996 /s/
Pamela G. Kuby
Dated: July 18, 1996 /s/
Joel S. Moskowitz
Dated: July 18, 1996 /s/
Ray T. Oyakawa
Dated: July 19, 1996 MILTON J. SCHLOSS, SR. TRUST
By: /s/
Milton J. Schloss, Sr., Trustee
Dated: July 22, 1996 DELAWARE CHARTER GUARANTEE &
TRUST, FBO Herbert Weiss, IRA
By: /s/
Herbert B. Weiss
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<PAGE>
EXHIBIT I
Agreement
The undersigned hereby agree that the Schedule 13(D) to which this is
attached as Exhibit I is filed on behalf of each of them.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Dated: July 18, 1996 GEORGE E. FERN CO.
By: /s/
George J. Budig, President
Dated: July 23, 1996 /s/
Martin S. Goldfarb, M.D.
Dated: July 22, 1996 /s/
Mark B. Kuby
Dated: July 22, 1996 /s/
Pamela G. Kuby
Dated: July 18, 1996 /s/
Joel S. Moskowitz
Dated: July 18, 1996 /s/
Ray T. Oyakawa
Dated: July 19, 1996 MILTON J. SCHLOSS, SR. TRUST
By: /s/
Milton J. Schloss, Sr., Trustee
Dated: July 22, 1996 DELAWARE CHARTER GUARANTEE &
TRUST, FBO Herbert Weiss, IRA
By: /s/
Herbert B. Weiss
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<PAGE>
EXHIBIT II
Exhibit 1
AGREEMENT
THIS AGREEMENT is dated as of July ___, 1996, between and among
PROFESSIONAL BANCORP, INC. ("Bancorp"), FIRST PROFESSIONAL BANK NATIONAL
ASSOCIATION ("Bank"), JOEL W. KOVNER ("Kovner"), DANIEL S. RADER ("Rader"),
DAVID G. RODEFFER ("Rodeffer"), RICHARD A. BERGER ("Berger"), JAMES B. JACOBSON
("Jacobson"), ANTHONY R. KOVNER ("Anthony Kovner"), RONALD L. KATZ ("Katz") and
LYNN O. POULSON ("Poulson") (collectively, "Management") and the SHAREHOLDERS
PROTECTIVE COMMITTEE-PROFESSIONAL BANCORP (the "Committee").
Recitals
A. Bancorp, a Pennsylvania corporation, is a bank holding company, and
Bank is its wholly-owned subsidiary. The current members of the Board of
Directors of Bancorp (the "Current Board") are Kovner, Rodeffer, Berger,
Jacobson, Anthony Kovner, Katz and Poulson (collectively, the "Current
Directors").
B. Bancorp's annual shareholders meeting (the "Shareholders Meeting") is
the subject of a proxy contest in which Management and the Committee have each
submitted a slate of directors for nomination and election to the Board of
Bancorp. In addition, there are a number of other matters in dispute between
Management and the Committee and its members.
C. The parties wish to resolve all of their outstanding disputes and
provide for the transition of the business and affairs of Bancorp and the Bank
(the "Transition") in an orderly manner.
D. The Committee is a group of shareholders who filed a Form 13-D with
the Securities and Exchange Commission.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereby agree as follows:
1. Board Matters.
a. 1996 Annual Meeting Votes. Management hereby withdraws its
challenges to the proxies solicited by the Committee. Accordingly, the parties
agree that as a result of the votes cast at the Shareholders Meeting, the
following persons were elected as directors of Bancorp (the "New Board"):
(i) Committee designees: Julie P. Thompson ("Thompson"), Ray T. Oyakawa
("Oyakawa"), Joel S. Moskowitz ("Moskowitz"), and Alan S. Borstein ("Borstein");
and (ii) Management designees: Berger, Katz and Poulson. If for any reason any
Committee designee is unable to serve as a director of Bancorp (including
failure to obtain any required regulatory approval) or, as a result of
resignation or otherwise, is no longer a director of Bancorp, a majority of the
other designees of the Committee, after consulting with the Committee (if it is
still in existence), shall designate the replacement and all members of the New
Board shall vote for such replacement. If for any reason any Management
designee is unable to
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<PAGE>
serve as a director of Bancorp (including failure to obtain any required
regulatory approval) or is no longer a director of Bancorp, as a result of
resignation or otherwise, the other designees of Management shall designate the
replacement (who shall not be Kovner) and all members of the New Board shall
vote for such replacement; provided, however, that if two or more of the
original Management designees are unable to serve or are no longer directors of
Bancorp, the remaining members of the New Board shall designate their
replacements. The parties agree that Thompson and Poulson shall serve as
co-chairpersons of the New Board. Furthermore, as a result of such votes,
Bancorp's 1996 Non-Employee Director Stock Option Plan was not approved by the
shareholders and KPMG Peat Marwick LLP was approved as Bancorp's independent
public accountants.
b. Selection of Interim Bancorp Chief Executive Officer. The
parties agree that John S. Buchanan ("Buchanan") shall be appointed interim
President and Chief Executive Officer of Bancorp for a term of not less than
four (4) months at a salary of Twenty Thousand Dollars ($20,000) per month and
benefits as agreed to by the New Board, which salary and benefits shall be
allocated appropriately between Bancorp and Bank. Bancorp, Bank and Buchanan
shall enter into a letter agreement reflecting the terms set forth in this
paragraph. During the interim period, the New Board shall initiate a search for
a permanent President and Chief Executive Officer and Buchanan shall be one of
the possible candidates.
c. Election of Bank Directors. The New Board shall take all
efforts to promptly (i) cause the size of the board of directors of Bank to be
increased to nine (9) members (one seat to be designated for the President of
Bank); and (ii) cause the election as directors of Bank of eight persons: four
(4) designees of the Committee, Buchanan (for so long as he is the President of
Bank) and three (3) designees of Management (no person shall initially be
elected as the ninth director). It is the present intent of the Committee to
designate Thompson, Oyakawa, Moskowitz, and Borstein as its designees as
directors of Bank. If for any reason any designee is unable to serve as a
director of Bank (including failure to obtain any required regulatory approval)
or is no longer a director of Bank, as a result of resignation or otherwise, a
majority of the other designees of the Committee, after consulting with the
Committee (if it is still in existence), shall designate the replacement and all
members of the New Bank Board shall vote for such replacement. It is the present
intent of Management to designate Berger, Katz and Poulson as its designees as
directors of Bank. If for any reason any designee is unable to serve as a
director of Bank (including failure to obtain any required regulatory approval)
or is no longer a director of Bank, as a result of resignation or otherwise, the
other designees of Management shall designate the replacement (who shall not be
Kovner) and all members of the New Bank Board shall vote for such replacement;
provided, however, that if two or more of the original Management designees are
unable to serve or are no longer directors of Bank, the remaining members of the
New Bank Board shall designate their replacements. A majority of the designees
of the Committee may at any time designate a person to serve as the ninth
director, and all members of the New Bank Board shall vote for such designee.
d. Selection of Interim Bank Chief Executive Officer. The New
Board shall take all efforts to cause Buchanan promptly to be elected as the
interim President and Chief Executive Officer of the Bank for a term of not less
than four (4) months for no additional salary or benefits other than those
provided pursuant to paragraph 1(b). Bancorp, Bank and Buchanan shall enter into
a letter agreement reflecting the terms set forth in this paragraph. During the
interim period, the New Bank Board shall initiate a search for a permanent
President and Chief Executive Officer and Buchanan shall be one of the possible
candidates.
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<PAGE>
e. 1997 Bancorp Nominees. It is the intent of the parties,
provided the New Board is conducting the affairs of the corporation up to the
standards of a properly and smoothly functioning and effective board of
directors, that four (4) nominees selected by a majority of the four (4)
directors designated by the Committee pursuant to paragraph 1(a) or their
replacements (the "Four Committee Directors") and three (3) nominees selected by
the three (3) directors designated by Management pursuant to paragraph 1(a) or
their replacements, be nominated and elected as directors of Bancorp at the 1997
annual shareholders meeting (the "1997 Meeting") of Bancorp. The New Board shall
take all efforts to cause the nomination and election at such meeting of the
seven (7) nominees selected pursuant to the preceding sentence unless a majority
of the Four Committee Directors determine at least sixty (60) days prior to the
1997 Meeting, in their good faith reasonable discretion, that the New Board is
not conducting the affairs of the corporation up to the standards of a properly
and smoothly functioning and effective board of directors, in which case all
parties may proceed to nominate candidates in the manner prescribed in the
Bancorp ByLaws.
f. 1997 Bank Nominees. It is the intent of the parties, provided
the New Bank Board is conducting the affairs of the corporation up to the
standards of a properly and smoothly functioning and effective board of
directors, that four (4) nominees selected by a majority of the four (4)
directors designated by the Committee pursuant to paragraph 1(c) or their
replacements (the "Four Committee Bank Directors") and the three (3) directors
designated by Management pursuant to paragraph 1(c) or their replacements, be
nominated and elected as directors of Bank at the 1997 annual shareholder
meeting of Bank. The New Bank Board shall take all efforts to cause the
nomination and election at such meeting of the seven (7) nominees selected
pursuant to the preceding sentence unless a majority of the Four Committee Bank
Directors determine, in their good faith reasonable discretion, that the New
Bank Board is not conducting the affairs of the corporation up to the standards
of a properly and smoothly functioning and effective board of directors, in
which case the directors of Bancorp shall be free to cause the nomination of the
seven persons they choose. It is understood and agreed for the 1997 annual
shareholder meeting of Bank (i) that one of the two remaining directorships
shall be filled by the President of Bank and that the nomination and election of
such director shall be as determined by the directors of Bancorp; and (ii) that
the other remaining directorship shall remain vacant, unless filled pursuant to
the provisions of the last sentence of paragraph 1(c), in which case the
nomination and election of such director shall be as determined by a majority of
the designees of the Committee serving on the New Bank Board.
g. Reimbursement of Committee and Current Directors Fees and
Expenses. The Committee has demanded that the current directors of Bancorp and
Bank pay the Committee, as damages, its expenses, including legal fees and
expenses and proxy solicitation expenses. The amount of such expenses has not
yet been fully ascertained and has not yet been presented to Bancorp and/or
Bank. The current directors of Bancorp and Bank agree that as part of this
settlement the reasonable attorneys fees and expenses and proxy solicitation
expenses of the Committee should be paid by them subject to indemnity by Bancorp
and Bank. Bancorp and/or Bank, which are obligated to indemnify the current
Directors, agree in partial satisfaction of their obligation to indemnify the
current directors, to pay the reasonable attorneys fees and expenses and proxy
solicitation expenses of the Committee promptly on presentation, subject to the
approval of the New Board. Berger, Poulson and Katz, as interested Directors,
will abstain from such approval by the New Board. Bancorp and Bank further agree
to indemnify their current directors against all attorneys fees and expenses
incurred by their current directors (to Bryan Cave LLP, Horgan, Rosen, Beecham
and Coren, Harkin and Cunningham) in defense of the claims against the current
directors by the Committee and its members, subject to approval of the New
Board. Berger, Poulson and Katz will abstain from such approval by the New
Board. Bancorp and Bank, subject to prior review and approval by their current
boards of directors, agree to pay all reasonable fees and expenses incurred by
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<PAGE>
Bancorp or Bank on or before July 8, 1996 to Bryan Cave LLP (which include the
fees and expenses incurred in the defense of their current directors which are
subject to indemnity as provided herein), Horgan, Rosen, Beecham and Coren,
Harkin and Cunningham and D.F. King. In the event that after July 8, 1996,
Bancorp or Bank request Bryan Cave LLP or Horgan Rosen Beecham and Coren to
perform legal services, the billings of such firms for such services shall be
paid by Bancorp or Bank in the ordinary course of business.
h. Representation of Current Directors. The current directors of
Bancorp and Bank, respectively, represent that there have been no actions taken
out of the ordinary course of business by Bancorp or Bank since March 31, 1996
(including without limitation any changes in management compensation or other
management arrangements) and agree that they shall not take any such action
until such time as the New Board and New Bank Board are installed in accordance
with this Agreement and applicable law, except proxy and litigation related
expenses, and a contract with Michael Porcello.
i. Indemnification. The parties agree and confirm that the Current
Directors, New Board, and New Bank Board shall be entitled to the
indemnification benefits and coverage as provided in the applicable Articles and
By-Laws of Bancorp and Bank and applicable state and federal law; New Board and
New Bank Board agree to maintain Directors' and Officers' insurance.
j. Cooperation. Wherever this Agreement indicates that the New Board
shall take any action, it is understood and agreed that the parties shall all
use their best efforts to cause the New Board to take such action.
2. Transition Matters
a. Retiring Current Directors. The Current Directors not elected for
a new term pursuant to paragraph 1(a) shall make themselves available for
reasonable consultation and marketing and sales efforts for purposes of the
Transition.
b. Transition Consultant. The parties agree that Bank will hire an
independent strategic planning consultant on an interim basis to assist the New
Bank Board in developing a plan for the Transition for reasonable and customary
compensation as agreed between the consultant and the Bank.
c. Best Efforts to Effect Transition. All parties shall use their
best efforts to effectuate the Transition at Bancorp and Bank levels as soon as
possible in an orderly manner and to enable Bancorp and Bank to retain their
employees, depositors and customers. In particular, all parties will cooperate
with all regulatory authorities having jurisdiction over Bancorp or the Bank to
facilitate any required qualification of the new Directors and chief executive
officers of Bancorp and the Bank (and Management agrees to use its best efforts
to assist such individuals in obtaining any required regulatory approvals as
soon as is reasonably possible) and to keep both Bancorp and the Bank in good
standing with all regulatory authorities.
d. Press Release and Letter to Employees. Promptly after the
execution hereof, the parties shall issue the press release and letter to
employees pursuant to paragraph 9.
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<PAGE>
3. Kovner.
a. Kovner shall resign as Chairman of the Board, President and
Chief Executive Officer of Bancorp and the Bank, effective at 6:00 p.m., Pacific
time, on Tuesday July 9, 1996, and shall have no offices or responsibilities
with respect to Bancorp or the Bank except as set forth in Paragraph 3(c). The
above notwithstanding, if requested by the New Board, Kovner shall retain any
offices for such period as may be requested by the New Board. During any such
period, (i) Kovner shall call meetings of either Board at the request of a
majority of the other members of the respective Board of Directors; and (ii) at
any Board meeting of Bancorp or Bank, the designees of the Committee must
represent a majority of those present for there to be a quorum for purposes of
carrying on business. Kovner shall have ten (10) days to vacate his office and
shall continue to have secretarial support during that period.
b. Concurrently herewith, Kovner shall enter into a Settlement
Agreement and Release in the form attached hereto as Exhibit A. In addition,
Kovner shall not take, use or disclose, directly or indirectly, trade secrets or
other confidential or proprietary information of Bancorp or Bank. For a period
of five (5) years from the date hereof, Kovner shall not participate in any
proxy solicitation with respect to Bancorp except as directed by the then board
of directors of Bancorp.
c. Provided Kovner executes and does not cancel the Settlement
Agreement and Release referred to in paragraph 3(b) for a period of eight (8)
days thereafter and provided this Agreement is not cancelled pursuant to
paragraph 11, Kovner shall be paid by Bancorp and Bank as an independent
consultant to Bancorp and Bank for a period of thirty (30) months from the date
of this Agreement, as follows:
(i) Bank shall pay Kovner Twenty Thousand Eight Hundred Thirty-
Three Dollars ($20,833) per month for 30 months from the date of this Agreement
in lieu of all other compensation, benefits and entitlements from Bancorp or
Bank, except as provided below;
(ii) Bank shall honor all of its obligations to Kovner under his
Executive Salary Continuation Agreement of May 1, 1992 (the "Salary Continuation
Plan");
(iii) Kovner shall be entitled to have his current health
benefits continued, or to obtain at Bancorp's or Bank's expense comparable
benefits, at no material increased cost (excluding normal policy increases) for
the remainder of the period ending sixty (60) months from the date of this
Agreement;
(iv) Kovner shall be entitled to have his current disability
benefits continued, or to obtain at Bancorp's or Bank's expense comparable
benefits, at no material increased cost (excluding normal policy increases) for
the remainder of the period ending thirty-six (36) months from the date of this
Agreement;
(v) The exercise date of the options to purchase 354,579 shares
of Bancorp granted to Kovner by Bancorp shall be extended so that the options
can be exercised through December 31, 2000, to the extent permitted by the stock
option plans pursuant to which the options were granted. In the event such
extension is not permitted, Bancorp agrees to modify the applicable plan or
issue Kovner an equivalent number of warrants in exchange for the cancellation
of the options;
(vi) Kovner shall receive up to an aggregate of Twenty Five
Thousand Dollars ($25,000) in accrued vacation pay in accordance with Bank's and
- 16 -
<PAGE>
Bancorp's current practices and policies. Said accrued vacation shall be paid to
Kovner, at his election, on July 31, 1996 or January 2, 1997;
(vii) Bank shall continue to make Kovner's current automobile
available for twenty-four (24) months, and Kovner will have the right to
purchase the automobile at the end of such period for its fair market value;
(viii) Kovner shall have the right, at any time for up to twenty-
four (24) months from the date of this Agreement, to require Bancorp or
Bancorp's designee to purchase up to 25,000 shares of Bancorp presently owned by
Kovner at a price per share equal to the average closing price of Bancorp shares
for the 90 days preceding the date of notice of exercise, which right may be
exercised from time to time up to an aggregate of 25,000 shares, by serving
30 days written notice to Bancorp.
d. Kovner agrees that any loan that he, his family or any
affiliate or related entity has with Bancorp or Bank shall be repaid pursuant to
its current terms and shall be fully secured in accordance with all regulatory
requirements and normal Bank practices for unrelated loans. Bancorp and Bank
agree to renew such loans if the borrowers thereunder are in compliance with the
terms thereof for the remainder of the period ending thirty (30) months from the
date of this Agreement, at which time such loans shall be due and payable. Bank
or Bancorp may apply any payments due Kovner under this Agreement, including
under the Salary Continuation Plan, to the payment of any of these loans if
Kovner breaches this Agreement or he, his family or any of his affiliates or
related entities breaches any term of a loan. Any such application shall be
treated as a set-off which Bancorp or Bank may exercise in its or their sole
discretion.
- 17 -
<PAGE>
4. Rodeffer.
a. Rodeffer shall have the right to attend that portion of the
meeting of the New Board scheduled for 8:00 a.m., Pacific time, on Wednesday,
July 10, 1996, which deals with the status of his employment.
b. Rodeffer shall have the option, exercisable by giving written
notice to Buchanan at the offices of Bank on or before 12:00 noon, Pacific time,
on Thursday, July 11, 1996, to resign from all positions with Bancorp and Bank,
effective at 12:01 p.m., Pacific time, on Thursday, July 11, 1996. If Rodeffer
exercises such option:
(i) Rodeffer shall be entitled, provided the provisions in the
first sentence of section 4(a)(ii) have been met and provided this Agreement has
not been cancelled pursuant to paragraph 11, to a severance payment of One
Hundred Fifty Thousand Dollars ($150,000) payable in installments of Twelve
Thousand Five Hundred Dollars ($12,500) per month; and
(ii) Rodeffer shall enter into, and shall not have canceled for a
period of eight (8) days thereafter, a Settlement Agreement and Release in the
form attached hereto as Exhibit B. In addition, Rodeffer shall not take, use or
disclose, directly or indirectly, trade secrets or other confidential or
proprietary information of Bancorp or Bank (this shall not be construed to
prevent Rodeffer from engaging in any profession, trade or business in
competition with Bancorp or Bank).
5. Rader. Rader shall serve as Chief Financial Officer of Bancorp and
Bank at the pleasure of the New Board and the New Bank Board, respectively, and
shall enter into a two (2) year employment agreement on terms reasonably
consistent with his current terms of employment.
6. Other Employees. The new Boards of Bancorp and Bank shall adopt a
reasonable employee severance policy which will recognize service to the Bank,
which policy shall be approved by a majority of the New Board and the New Bank
Board, including Poulson and Berger.
7. Shareholder Meeting and Other Matters.
a. With respect to the Shareholders Meeting, the final tabulations
and minutes of the election will include all of the Committee's proxy votes as
cast with respect to the election of directors, the 1996 Non-Employee Director
Stock Option Plan and the approval of Bancorp's auditors, and the inspectors of
election shall be directed to issue a revised final report based on and
consistent with this sentence and paragraph 1 of this Agreement.
b. Based upon the advice of counsel, the parties agree that no group
was formed that constitutes a "control transaction" within the meaning of
15 Pa. C.S.A. ss. 2541-8, that no "control-share acquisition" has occurred for
purposes of the Pennsylvania Control-Share Acquisition Statutes (15 Pa. C.S.A.
ss. 2561-8), that no change of control notice is required to be filed with the
Federal Reserve Bank of San Francisco or the Federal Reserve Board, and that no
change of control notice is required to be filed with the Office of the
Comptroller of the Currency.
c. The parties shall instruct the firm of Bryan Cave LLP to
advise the appropriate regulatory authorities that, based on further information
made available to Bancorp and Bank, the firm, Bancorp and Bank are withdrawing
the letters of June 3, 1996, June 12, 1996 and June 17, 1996 and the factual and
legal assertions contained therein.
- 18 -
<PAGE>
8. Dismissal of Litigation and Releases. No party shall ask for a
postponement or continuance of the hearing before the United State District
Court or the Central District of California scheduled for July 12, 1996, even if
this Agreement is canceled pursuant to paragraph 11 below. The parties agree to
immediately cease all activities in connection with the litigation actions
listed on Exhibit C (other than the filing of any documents in the Federal Court
action listed thereon on July 5, 1996) (the "Litigation"). All of the Litigation
listed on Exhibit C shall promptly, after 12:00 noon, Pacific time, on July 11,
1996, be dismissed with prejudice and the parties shall cause the release
attached as Exhibit D (the "Release"), to be executed by all of the parties
thereto; provided, however, that the parties shall request the Federal Court to
retain jurisdiction to enforce this Agreement.
9. Press Release and Other Communications. The parties agree to
promptly issue a joint press release, in form acceptable to each party,
indicating that all outstanding matters have been resolved, and to issue a
jointly approved letter to employees. The parties agree that no party shall make
any comments or statements in any way detrimental to any other party.
10. Severability. If any provision of this Agreement shall be held or
deemed to be or shall, in fact, be inoperative, invalid or unenforceable as
applied in any particular case in any jurisdiction or jurisdictions because it
conflicts with any provisions of any Constitution, statute, rule of public
policy, or any other reason, such circumstance shall not have the effect of
rendering the provision in question inoperable or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions of this
Agreement invalid, inoperative or unenforceable to any extent whatever.
11. Cancellation of the Agreement.
a. The current Board of Directors of Bancorp (the "Current
Board") shall have the right to cancel this Agreement (other than the first
sentence of paragraph 8) at any time prior to 12:00 noon, Pacific Time on
Monday, July 8, 1996, by giving written notice to counsel for the Committee,
only if the Current Board determines in good faith, based upon a reasonable
investigation of the character and qualifications of Thompson, Moskowitz,
Borstein, and Buchanan, that it would be detrimental to Bancorp that Thompson,
Moskowitz or Borstein serve as directors of Bancorp or that Buchanan serve as
interim President and Chief Executive Officer of Bancorp. The Committee shall
make Thompson, Moskowitz, Borstein and Buchanan available to the Current Board
in person or by telephone, for purposes of interviewing them. Any statements
made in the course of such interviews shall be made in the context of settlement
negotiations and shall not be admissible in evidence or available for use for
any other purpose.
b. This Agreement shall be submitted to St. Paul Insurance
Company ("Insurer") for its consent to the terms of settlement contained herein.
If Insurer has not consented to the terms of this Agreement by 12:00 noon,
Pacific time, on July 11, 1996, this Agreement shall be cancelled unless Bancorp
elects to waive the requirement that the consent of Insurer be obtained. In
order to save Bancorp and Bank further expense, the parties have agreed not to
pursue further discovery in pending litigation and have agreed not to postpone
the hearing for July 12, 1996 in such litigation. Accordingly, if this Agreement
is cancelled because the consent of Insurer is not obtained and Bancorp does not
waive the requirement therefor:
(i) the parties shall stipulate that the challenges to the
proxies solicited by the Committee have been withdrawn, that the following
persons were elected as directors of Bancorp at the shareholders meeting:
- 19 -
<PAGE>
Thompson, Oyakawa, Moskowitz, Borstein, Berger, Katz and Poulson, that Bancorp's
1996 Non-Employee Director Stock Option Plan was not approved by the
shareholders and that KPMG Peat Marwick LLP was approved as Bancorp's
independent public accountants; and
(ii) no party shall take any action to, or otherwise attempt to,
alter or change the election results set forth in paragraph 11(b)(i).
12. Survival of Obligations. All covenants, warranties and other
provisions of this Agreement shall survive the cancellation, termination or
expiration of this Agreement.
13. Execution. For the convenience of the parties, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. On or
before 12:00 noon, Pacific time, on July 11, 1996, the Committee shall obtain
the signatures of a majority of its members authorizing the execution of this
Agreement on behalf of the Committee, and the Committee shall cause all of its
members to execute the Release as soon as practicable thereafter.
14. Successors and Assigns. This Agreement shall be binding upon the
parties and their respective successors and assigns.
15. Governing Law. The rights and obligations of the parties hereto
shall be governed by the laws of the State of California.
16. Attorneys' Fees. In the event of any dispute relating to this
Agreement, the prevailing party will be entitled to reasonable attorneys' fees
and costs.
- 20 -
<PAGE>
17. Further Assurances. Each party hereby agrees to execute and deliver
all such other documents or instruments and to take any action as may be
reasonably required in order to effectuate the intent, purposes and terms of
this Agreement.
IN WITNESS WHEREOF, the parties have set their hands as of the date
first above written.
PROFESSIONAL BANCORP, INC.
By: _________________________________
Title: ______________________________
FIRST PROFESSIONAL BANK
NATIONAL ASSOCIATION
By: _________________________________
Title: ______________________________
------------------------------------
JOEL W. KOVNER, Dr., P.H. MPH.
------------------------------------
DANIEL S. RADER
------------------------------------
DAVID G. RODEFFER, MPH.
------------------------------------
RICHARD A. BERGER
------------------------------------
JAMES B. JACOBSON
------------------------------------
ANTHONY R. KOVNER, Ph.D.
------------------------------------
RONALD L. KATZ
- 21 -
<PAGE>
------------------------------------
LYNN O. POULSON, J.D.
SHAREHOLDERS PROTECTIVE COMMITTEE-
PROFESSIONAL BANCORP
By: _________________________________
Title: ______________________________
The undersigned members of the New Board and New Bank Board hereby execute this
Agreement for the purpose of expressing their consent to all references to
activities by the New Board and New Bank Board as set forth herein, and hereby
approve this Agreement.
---------------------------------------
JULIE THOMPSON
---------------------------------------
RAY T. OYAKAWA, M.D.
---------------------------------------
JOEL MOSKOWITZ
---------------------------------------
ALAN S. BORSTEIN
- 22 -
<PAGE>
EXHIBIT A
SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS
THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS is made this ___ day of
July, 1996, between and among PROFESSIONAL BANCORP, INC. and FIRST PROFESSIONAL
BANK NATIONAL ASSOCIATION (collectively, "Employee") and JOEL W. KOVNER
("Employee").
BACKGROUND
Employee and Employer wish to resolve and permanently settle any and all
claims and all other issues relating to the ending of Employee's employment with
Employer, including any present or past claims by Employee against the Employer,
any and all related entities of Employer, the Professional Bancorp Shareholders
Protective Committee, and the directors, officers, employees and agents of all
of them (collectively, the "Employer Group").
NOW THEREFORE, Employer and Employee promise, agree and state as
follows:
1. Employee promises, agrees and states that:
a. Employee's employment by Employer ended on July ___, 1996.
b. Employee has not filed and will not file or appeal, any
lawsuit, administrative charge, or other claim about his
employment or its ending, or any lawsuit, charge or claim,
filed or appealed, shall be dismissed or withdrawn by
Employee permanently without right to refile or renew that
lawsuit, charge or claim.
c. Employee forever waives and releases the Employer Group from any
and all claims, including without limitation race, sex, national
origin, handicap, religious, benefit or age discrimination or
retaliation, under
(i) Title VII of the Civil Rights Act of 1964, (42 United
States Code beginning at Section 2000e),
(ii) the Employee Retirement Income Security Act or
ERISA, (29 United States Code beginning at Section
1001),
(iii) the Reconstruction Era Civil Rights Acts (42 United
States Code beginning at Section 1981),
(iv) the Age Discrimination in Employment Act "ADEA" (29
United States Code, Sections 621 through 634),
(v) Americans with Disabilities Act of 1990 "ADA" (42
United States Code beginning at Section 12111), and
(vi) the Family and Medical Leave Act of
1993 "FMLA" (29 United States Code
beginning at Section 2601).
- A-1 -
<PAGE>
d. Employee further forever waives and releases the Employer Group
from any and all claims, liabilities, damages, penalties,
obligations, actions and causes of action (hereinafter "Claims"),
whether past, present or future, whether now known or unknown, and
whether arising out of common law, constitution, statute or
regulation as long as the Claim arises out of an act or omission
occurring on or before the date of this Agreement, which includes
but is not limited to Claims arising out of or relating to
Employee's employment or Employee's termination, breach of
contract, defamation, misrepresentation, public policy, wrongful
or constructive termination, infliction of emotional distress, or
the California Fair Employment and Housing Act, as amended,
California Government Code ss. 12900, et seq., and the California
Labor Code, or any Pennsylvania fair employment or discrimination
laws or regulations.
e. Employee further forever waives and gives up any right to payment
of attorneys' fees.
f. Employee further forever waives and renounces any right to
reinstatement of employment, whether temporary or permanent, part-
time or full-time, in any capacity with Employer, and promises
never to apply for or otherwise seek employment with Employer.
g. As part of this general release, and not by way of limitation,
Employee expressly waives any right Employee may have under
ss. 1542 of the California Civil Code, which states:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in
his favor at the time of executing the release,
which if known by him must have materially
affected his settlement with the debtor."
h. Employee agrees not to apply for any unemployment benefits as a
result of his termination of employment with Employer.
i. Employee understands and agrees that Employee may later discover
facts in addition to or different from those which Employee now
knows or believes to be true with respect to the subject matters
of this Agreement, but that it is nevertheless Employee's
intention by signing this Agreement to fully, finally and forever
release any and all claims, whether now known or unknown,
suspected or unsuspected, which now exist, may exist or previously
have existed as set forth herein.
2. Employee also promises and agrees not to make any negative or
disparaging remarks about the Employer Group or to volunteer, start or encourage
any statement or action which could hurt the business or reputation of the
Employer Group.
3. In consideration of Employee's releases set forth herein, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, Employer agrees that, unless this Agreement is revoked by Employee
under Section 15(c) below, Employee shall receive the payments, benefits or
other considerations set forth in Section 3.c. of the Settlement Agreement dated
July __, 1996, to which this Agreement is an Exhibit (the "Settlement
Agreement").
- A-2 -
<PAGE>
4. Employee agrees that the execution by the Employer of the Settlement
Agreement and the amounts paid pursuant to the Settlement Agreement are paid in
exchange for Employee's promises and releases in Sections 1 and 2, are not
otherwise owed to Employee under any policy, obligation or benefit plan of the
Employer, and fully satisfy all of Employee's claims against the Employer and
the Employer Group.
5. Employer does not admit any violation of any federal or state
statute, the common law, or of Employee's rights. To the contrary, the Employer
denies any violation and makes this Agreement only to settle finally all claims
and issues relating to Employee's employment, resignation or termination.
6. Each party represents and acknowledges that in executing this
Agreement it/he did not rely and has not relied upon any promise, representation
or statement not in this Agreement and Release made by the other party or the
other party's attorneys about the subject matter, basis or effect of this
Agreement or otherwise.
8. The provisions of this Agreement and Release are severable; if any
part of it is found to be unenforceable, the remaining parts shall remain fully
valid and enforceable.
9. Each party has adequate knowledge of the facts and law with respect
to the advisability of making the settlement provided for within, with respect
to the advisability of executing this agreement, and with respect to the meaning
of California Civil Code Section 1542. Each party has made such investigation of
the facts pertaining to this settlement and this Agreement, and all of the
matters pertaining thereto, as the party deems necessary. Each party has read
this Agreement and understands the contents thereof.
10. This Agreement shall be deemed to have been executed and delivered
within the State of California and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
11. This Agreement is the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous oral and written agreements and discussions. This Agreement may
be amended only by an agreement in writing, signed by all parties hereto. In the
event of arbitration or litigation hereafter arising from or relating to this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees
and costs.
12. This Agreement is binding upon and shall inure to the benefit of the
parties hereto, and their respective successors.
13. This Agreement may be executed in counterparts, and when each party
has signed and delivered at least one such counterpart, each counterpart shall
be deemed an original, and, when taken together with the other signed
counterpart(s), shall constitute one Agreement which shall be binding upon and
effective as to all parties.
14. This Agreement is being made as part of the Settlement Agreement
among Employee and others to which this Agreement is an Exhibit. To the extent
that there is any conflict between the terms of this Agreement and the
Settlement Agreement, the Settlement Agreement shall control.
- A-3 -
<PAGE>
15. Employee is hereby advised:
a. to CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
AGREEMENT;
b. that EMPLOYEE HAS TWENTY-ONE (21) DAYS WITHIN WHICH TO
CONSIDER AND SIGN THIS AGREEMENT; and
c. that EMPLOYEE MAY CANCEL THIS AGREEMENT WITHIN SEVEN (7)
DAYS AFTER SIGNING THIS AGREEMENT; and that this Agreement
is not effective or enforceable until this seven (7) day
period has expired.
16. EMPLOYEE, BY SIGNING THIS AGREEMENT, UNDERSTANDS AND INTENDS TO
WAIVE ALL CLAIMS AGAINST THE EMPLOYER, THE PROFESSIONAL BANCORP SHAREHOLDERS
PROTECTIVE COMMITTEE, AND THEIR RESPECTIVE OFFICERS, EMPLOYEES AND OTHER AGENTS,
INCLUDING ALL CLAIMS FOR FEES. EMPLOYEE ADMITS EMPLOYEE ENTERS INTO THIS
AGREEMENT KNOWINGLY, VOLUNTARILY AND AFTER HAVING CONSULTED WITH OR HAVING THE
OPPORTUNITY TO CONSULT WITH AN ATTORNEY FOR A COMPLETE REVIEW OF THIS DOCUMENT.
Employee and Employer, by signing below, indicate their knowing and
voluntary agreement to the terms hereof.
PROFESSIONAL BANCORP, INC.
By:__________________________________
Title:_______________________________
FIRST PROFESSIONAL BANK NATIONAL
ASSOCIATION
By:___________________________________
Title:________________________________
--------------------------------------
JOEL W. KOVNER
- A-4 -
<PAGE>
EXHIBIT B
SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS
THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS is made this ___ day of
July, 1996, between and among PROFESSIONAL BANCORP, INC. and FIRST PROFESSIONAL
BANK NATIONAL ASSOCIATION (collectively, "Employee") and DAVID G. RODEFFER
("Employee").
BACKGROUND
Employee and Employer wish to resolve and permanently settle any and all
claims and all other issues relating to the ending of Employee's employment with
Employer, including any present or past claims by Employee against the Employer,
any and all related entities of Employer, the Professional Bancorp Shareholders
Protective Committee, and the directors, officers, employees and agents of all
of them (collectively, the "Employer Group").
NOW THEREFORE, Employer and Employee promise, agree and state as
follows:
1. Employee promises, agrees and states that:
a. Employee's employment by Employer ended on July ___, 1996.
b. Employee has not filed and will not file or appeal, any
lawsuit, administrative charge, or other claim about his
employment or its ending, or any lawsuit, charge or claim,
filed or appealed, shall be dismissed or withdrawn by
Employee permanently without right to refile or renew that
lawsuit, charge or claim.
c. Employee forever waives and releases the Employer Group from any
and all claims, including without limitation race, sex, national
origin, handicap, religious, benefit or age discrimination or
retaliation, under
(i) Title VII of the Civil Rights Act of 1964, (42 United
States Code beginning at Section 2000e),
(ii) the Employee Retirement Income Security Act or
ERISA, (29 United States Code beginning at Section
1001),
(iii) the Reconstruction Era Civil Rights Acts (42 United
States Code beginning at Section 1981),
(iv) the Age Discrimination in Employment Act "ADEA" (29
United States Code, Sections 621 through 634),
(v) Americans with Disabilities Act of 1990 "ADA" (42
United States Code beginning at Section 12111), and
(vi) the Family and Medical Leave Act of
1993 "FMLA" (29 United States Code
beginning at Section 2601).
- B-1 -
<PAGE>
d. Employee further forever waives and releases the Employer Group
from any and all claims, liabilities, damages, penalties,
obligations, actions and causes of action (hereinafter "Claims"),
whether past, present or future, whether now known or unknown, and
whether arising out of common law, constitution, statute or
regulation as long as the Claim arises out of an act or omission
occurring on or before the date of this Agreement, which includes
but is not limited to Claims arising out of or relating to
Employee's employment or Employee's termination, breach of
contract, defamation, misrepresentation, public policy, wrongful
or constructive termination, infliction of emotional distress, or
the California Fair Employment and Housing Act, as amended,
California Government Code ss. 12900, et seq., and the California
Labor Code, or any Pennsylvania fair employment or discrimination
laws or regulations.
e. Employee further forever waives and gives up any right to payment
of attorneys' fees.
f. Employee further forever waives and renounces any right to
reinstatement of employment, whether temporary or permanent, part-
time or full-time, in any capacity with Employer, and promises
never to apply for or otherwise seek employment with Employer.
g. As part of this general release, and not by way of limitation,
Employee expressly waives any right Employee may have under
ss. 1542 of the California Civil Code, which states:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in
his favor at the time of executing the release,
which if known by him must have materially
affected his settlement with the debtor."
h. Employee agrees not to apply for any unemployment benefits as a
result of his termination of employment with Employer.
i. Employee understands and agrees that Employee may later discover
facts in addition to or different from those which Employee now
knows or believes to be true with respect to the subject matters
of this Agreement, but that it is nevertheless Employee's
intention by signing this Agreement to fully, finally and forever
release any and all claims, whether now known or unknown,
suspected or unsuspected, which now exist, may exist or previously
have existed as set forth herein.
2. Employee also promises and agrees not to make any negative or
disparaging remarks about the Employer Group or to volunteer, start or encourage
any statement or action which could hurt the business or reputation of the
Employer Group.
3. In consideration of Employee's releases set forth herein, and for
other good and valuable consideration, the receipt of which is hereby
- B-2 -
<PAGE>
acknowledged, Employer agrees that, unless this Agreement is revoked by Employee
under Section 15(c) below, Employee shall receive the payments, benefits or
other considerations set forth in Section 4 of the Settlement Agreement dated
July __, 1996, to which this Agreement is an Exhibit (the "Settlement
Agreement").
4. Employee agrees that the execution by the Employer of the Settlement
Agreement and the amounts paid pursuant to the Settlement Agreement are paid in
exchange for Employee's promises and releases in Sections 1 and 2, are not
otherwise owed to Employee under any policy, obligation or benefit plan of the
Employer, and fully satisfy all of Employee's claims against the Employer and
the Employer Group.
5. Employer does not admit any violation of any federal or state
statute, the common law, or of Employee's rights. To the contrary, the Employer
denies any violation and makes this Agreement only to settle finally all claims
and issues relating to Employee's employment, resignation or termination.
6. Each party represents and acknowledges that in executing this
Agreement it/he did not rely and has not relied upon any promise, representation
or statement not in this Agreement and Release made by the other party or the
other party's attorneys about the subject matter, basis or effect of this
Agreement or otherwise.
8. The provisions of this Agreement and Release are severable; if any
part of it is found to be unenforceable, the remaining parts shall remain fully
valid and enforceable.
9. Each party has adequate knowledge of the facts and law with respect
to the advisability of making the settlement provided for within, with respect
to the advisability of executing this agreement, and with respect to the meaning
of California Civil Code Section 1542. Each party has made such investigation of
the facts pertaining to this settlement and this Agreement, and all of the
matters pertaining thereto, as the party deems necessary. Each party has read
this Agreement and understands the contents thereof.
10. This Agreement shall be deemed to have been executed and delivered
within the State of California and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
11. This Agreement is the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous oral and written agreements and discussions. This Agreement may
be amended only by an agreement in writing, signed by all parties hereto. In the
event of arbitration or litigation hereafter arising from or relating to this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees
and costs.
12. This Agreement is binding upon and shall inure to the benefit of the
parties hereto, and their respective successors.
13. This Agreement may be executed in counterparts, and when each party
has signed and delivered at least one such counterpart, each counterpart shall
be deemed an original, and, when taken together with the other signed
counterpart(s), shall constitute one Agreement which shall be binding upon and
effective as to all parties.
- B-3 -
<PAGE>
14. This Agreement is being made as part of the Settlement Agreement
among Employee and others to which this Agreement is an Exhibit. To the extent
that there is any conflict between the terms of this Agreement and the
Settlement Agreement, the Settlement Agreement shall control.
15. Employee is hereby advised:
a. to CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
AGREEMENT;
b. that EMPLOYEE HAS TWENTY-ONE (21) DAYS WITHIN WHICH TO
CONSIDER AND SIGN THIS AGREEMENT; and
c. that EMPLOYEE MAY CANCEL THIS AGREEMENT WITHIN SEVEN (7)
DAYS AFTER SIGNING THIS AGREEMENT; and that this Agreement
is not effective or enforceable until this seven (7) day
period has expired.
16. EMPLOYEE, BY SIGNING THIS AGREEMENT, UNDERSTANDS AND INTENDS TO
WAIVE ALL CLAIMS AGAINST THE EMPLOYER, THE PROFESSIONAL BANCORP SHAREHOLDERS
PROTECTIVE COMMITTEE, AND THEIR RESPECTIVE OFFICERS, EMPLOYEES AND OTHER AGENTS,
INCLUDING ALL CLAIMS FOR FEES. EMPLOYEE ADMITS EMPLOYEE ENTERS INTO THIS
AGREEMENT KNOWINGLY, VOLUNTARILY AND AFTER HAVING CONSULTED WITH OR HAVING THE
OPPORTUNITY TO CONSULT WITH AN ATTORNEY FOR A COMPLETE REVIEW OF THIS DOCUMENT.
Employee and Employer, by signing below, indicate their knowing and
voluntary agreement to the terms hereof.
PROFESSIONAL BANCORP, INC.
By:__________________________________
Title:_______________________________
FIRST PROFESSIONAL BANK NATIONAL
ASSOCIATION
By:___________________________________
Title:________________________________
--------------------------------------
DAVID G. RODEFFER
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<PAGE>
EXHIBIT C
1. Professional Bancorp, Inc. v. Martin B. Goldfarb, M.D., et al., No. 2727 in
the Philadelphia County, Pennsylvania Court of Common Pleas, Trial Division,
June Term 1996.
2. Professional Bancorp, Inc. v. George E. Fern Co., et al., Case No.
CV-96-3916 (KMW) (MCX) in the United States District Court for the Central
District of California.
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