October 11, 2017

Gary Putnam
17 S. Vanguard Court
San Diego, CA 92108

Dear Gary,

On October 10, 2017, you were informed that ABC Financial (the “Company”) has made the decision to eliminate your position as Controller effective today. This letter sets forth in writing the terms and conditions of an agreement for an amicable separation of your employment (the “Agreement”), which includes payments and benefits to which you would not otherwise be entitled under company policy or applicable law.

Your separation from employment will be effective as of the close of business today. You are being paid your final paycheck today, which will include your pay through October 31, 2017, as well as any accrued but unused vacation and any personal days. We do not pay for unused sick time under our company policy.

As consideration for your release of claims and other promises in this Agreement and your continued compliance with the terms of this Agreement, you will receive twenty-four (24) weeks of severance pay, less applicable withholdings, which will be paid in accordance with our regular biweekly pay cycle beginning as soon as feasible after the Effective Date of this Agreement (defined below).

As part of this separation agreement, you may qualify for unemployment benefits through the California Employment Development Department. ABC Financial will not contest your application for unemployment compensation.

As further consideration for this Agreement, you will receive outplacement assistance under the services of Alexander and Associates. You will participate in their Modified Executive Outplacement Program, which will assist you in finding gainful employment for a six-month period beginning with the Effective Date of this Agreement. Further details about this outplacement arrangement will be provided by Heidi Clair, your outplacement consultant.

Your group coverage for health, dental, and vision insurance will continue through the end of this month. You will be offered the opportunity to elect COBRA continuation coverage at your own expense beginning November 1 for the plans that are subject to this provision and in which you are eligible to participate. If you timely elect COBRA continuation coverage, we will pay, as additional consideration for this Agreement, your premiums for COBRA continuation coverage for you as a single participant for the months of November _____ through April _____ provided that you continue to remain eligible for coverage under COBRA.

You will be entitled to receive your vested retirement benefits in accordance with the terms of the Company’s plan.

All other benefits, compensation, and privileges of your employment not specified above will cease as of October 11, 2017. You affirm that you have been paid and/or have received all compensation, salary, wages, bonuses, commissions, expense reimbursements, and/or benefits to which you may be entitled. You further affirm that you have no known workplace injuries or occupational diseases not previously disclosed in writing to the Company.

In consideration for this Agreement, you hereby release ABC Financial and all of its affiliated or related entities as well as past and present officers, directors, employees, representatives, and agents of ABC Financial and any of its affiliated or related entities (collectively, the “Released Parties”) from: any and all claims, demands, debts, losses, obligations, liabilities, costs, expenses, attorneys’ fees, rights of action, and causes of action of any kind or character whatsoever, whether known or unknown, suspected or unsuspected, arising prior to the date of this Agreement, all of which are also referred to below as the “Released Claims.”

You understand and agree that the Released Claims include without limitation any rights or claims you may have that arise out of or are related to your employment with ABC Financial or the termination of that employment and any rights or claims under the Age Discrimination and Employment Act, 29 U.S.C. Section 621 et seq., Title VII of the Civil Rights Act of 1964, the California Fair Employment and Housing Act, as well as any other claims under any federal, state, or local law, or the common law, including without limitation any claims for breach of contract.

To effectuate a full and complete general release as described above, you expressly waive and relinquish all rights and benefits of Section 1542 of the Civil Code of the State of California. Section 1542 of the Civil Code of the State of California states as follows:

You have had the opportunity to discuss this waive of Section 1542 with counsel of your choosing. You acknowledge that you may hereafter discover facts different from, or in addition to, those which you know or believe to be true with respect to the Released Claims, and agree that this agreement and the releases contained herein shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of those facts.

Excluded from the Released Claims are any claims that by law cannot be waived in a private agreement between an employer and employee. Moreover, this Agreement does not prohibit you from filing a charge with the Equal Employment Opportunity Commission (the “EEOC”) or other federal agency, or the California Department of Fair Employment and Housing or other state agency, nor does this Agreement prohibit you from participating in any EEOC or other federal or state agency investigation. You do, however, agree to waive your right to any monetary recovery should any claim be pursued with the EEOC, state agency, or any other federal, state, or local administrative agency on your behalf arising out of or related to your employment with or separation from the Company.

You represent that you have not filed any charges, complaints, grievances, arbitrations, lawsuits, or claims against the Released Parties, with any local, state, or federal agency. Nothing in this Agreement prevents you from filing a claim for unemployment insurance after the Separation Date.

You acknowledge and agree that in the course of your employment with the Company, you have acquired: (i) confidential information including without limitation information received by the Company from third parties, under confidential conditions; (ii) other technical, product, business, financial, or development information from the Company, the use or disclosure of which reasonably might be construed to be contrary to the interests of the Company; or (iii) any other proprietary information or data, including but not limited to customer lists, which you may have acquired during your employment (collectively referred to as “Confidential Information”). You understand and agree that such Confidential Information was disclosed to you in confidence and for use only on behalf of the Company. You understand and agree that you: (i) will keep the Confidential Information confidential at all times; (ii) will not disclose or communicate Confidential Information to any third party; and (iii) will not make use of Confidential Information on your own behalf, or on behalf of any third party, without the express authorization of the Company. In view of the nature of your employment and the nature of the Confidential Information you received during the course of your employment, you agree that any unauthorized disclosure to third parties of Confidential Information or other violation, or threatened violation, of this Agreement would cause irreparable damage to the Company, and that, therefore, the Company and/or its affiliated companies, shall be entitled to an injunction prohibiting you from any such disclosure, attempted disclosure, violation, or threatened violation.

You affirm that you have returned all of the Company’s property, documents, and/or any Confidential Information in your possession or control. This includes without limitation any and all work product, notes, reports, files, memoranda, records, cardkey passes, door and file keys, safe combinations, laptop computers, computer access codes, disks and instructional or personnel manuals, and other physical or personal property that you received or prepared or helped to prepare in connection with your employment with the Company.

You and the Company acknowledge and agree that the terms and conditions set forth in any Confidential Information and Priority Rights Agreement (the “Confidential Information Agreement”) that you signed shall continue in full force and effect after the Separation Date, and its terms shall be incorporated by reference into this Agreement.

Except as otherwise provided by law, you agree that you shall not make any disparaging statements or comments to the media or third parties about the Company’s business, technologies, market position, employment policies and practices, employees (past and present), operations, products or services, either as a statement of fact or opinion, which impugns or potentially injures the reputations, goodwill and business relationships of the Company or other individuals involved. Nothing in this Agreement shall prohibit you from providing accurate information to any court or governmental entity or to any person or organization in response to legal process or as otherwise required by law.

This Agreement represents a compromise of claims and shall not be construed as an admission by any party of any liability or any contention or allegation made by any other party, or a suggestion that any claims or liabilities exist or would have any basis.

You agree that you will not disclose the terms of this Agreement to any third party, including without limitation other current, past, or future employees of the Company, except that you may disclose the terms to your spouse or significant other or to your attorney, accountant, or tax preparer (provided that each of the persons to whom you make disclosure agrees to maintain the strict confidentiality of the terms of this Agreement), or otherwise as may be required by law.

You will have a period of twenty-one (21) days from the date of this letter to review and consider this Agreement, with the assistance of counsel should you so choose, before signing it. You may take as much of this twenty-one-day period of time to consider this agreement as you wish prior to signing it.

You may revoke this agreement within seven (7) days after you sign it. Revocation may be made by delivering a written notice of revocation to me within the seven-day period. If you revoke this agreement in a timely fashion, it shall not become effective or enforceable, and all payments provided in this agreement other than your final paycheck, including without limitation severance payments, will not be made. The Effective Date of this Agreement will be the day after the seven-day revocation period expires following your signature of this Agreement.

If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect.

You represent and warrant that you have not previously assigned or transferred, or purported to assign or transfer, to any person, corporation, partnership, or any other type of entity, any of the Released Claims. You agree to indemnify and hold harmless against any claim, demand, obligation, liability, cost, expense, right of action, or cause of action arising out of or in connection with any such transfer or assignment. This Agreement will bind the heirs, personal representatives, successors, and assigns of both you and the Company, and inure to the benefit of both you and the Company, and their heirs, successors, and assigns.

This Agreement shall be governed by California law. It represents the entire agreement between the parties and supersedes all prior negotiations, representations, or agreements between the parties, either written or oral, on its subject matter (except for the Confidential Information Agreement referred to above, which remains in effect). You acknowledge that you have not relied on any representations, promises, or agreements of any kind made to you in connection with your decision to accept this Agreement, except for those set forth in this Agreement. This Agreement may be amended only by a document designated as an amendment to agreement and executed by the parties to it.

In the event of a breach of any provision of this Agreement, either party may institute an action specifically to enforce any term or terms of this Agreement and/or to seek any damages for its breach. The prevailing party in any such action shall be entitled to recover reasonable attorneys’ fees and costs.

It is unfortunate that this reduction in force is necessary. The Company and I thank you for your dedication to our Company over the past eight years. Please review this offer carefully, with the assistance of counsel if you choose. If you accept the offer, please sign below and return the original of this letter so that I receive it within twenty-one (21) days. Please contact me with any questions you may have.

Sincerely,

Addie Droz
Chief Financial Officer

I have read and understood the content of this letter, and I accept the offer by ABC Financial and agree to the terms of agreement contained in the letter.