Exhibit 10
EMPLOYMENT AGREEMENT
DATE: January 1, 2005
PARTIES: CAPITAL CORP. OF THE WEST, a California corporation, hereinafter
referred to as "Employer"; and
THOMAS T. HAWKER, herein after referred to as "Employee".
RECITALS:
1. Employee is currently employed as the Chief Executive Officer of
Employer under a written Employment Agreement dated January 1, 2002,
which will expire at the close of business on December 31, 2004.
2. The Parties desire to enter into a new Employment Agreement for an
additional four (4) year term.
AGREEMENT:
Employer hereby agrees to extend the employment of Employee, and Employee
hereby accepts said extension of employment with Employer, upon the terms and
conditions hereinafter set forth.
1. Duties.
Employee is hereby employed as the President and Chief Executive Officer
of Employer. Employee shall perform the customary duties of a Chief Executive
Officer of a California bank holding company, including but not limited to, the
supervision of Employer's business and all subsidiary corporations and
businesses owned or related to Employer and such kindred duties as may from time
to time be reasonably requested of Employee by the Board of Directors of
Employer. As used herein the term "business of Employer" shall include the
business of any of Employer's subsidiaries and related entities.
2. Appointment to Board of Directors.
Employer hereby agrees that Employee shall remain a member of the Board of
Directors of Employer for so long as Employee is elected to a position on the
board by the shareholders of Employer, or until this Agreement has been
terminated. During the period of Employee's election to the Board of Directors,
Employee shall serve as a member of any or all committees to which he is
appointed, except the audit, compensation/benefits and executive committees.
Employee also hereby agrees to accept appointment to other boards of directors
and committees of subsidiary and related organizations of Employer. Employee
shall fulfill all of Employee's duties as a board and committee member without
additional compensation. Upon the termination of this Agreement by either
Employee or Employer, Employee agrees to immediately resign from the Board of
Directors, from all committees and from all corporate offices of Employer and
from all of Employer's subsidiaries and related companies; further, all fringe
benefits, such as insurance, shall be terminated on the last day of service of
Employee, unless otherwise mandated by the terms of this Agreement, Employer's
personnel policy, or any other benefit policies in effect at the time of such
termination.
3. Term.
This Agreement shall be effective for a period of forty-eight (48) months.
Employment under this agreement shall commence on January 1, 2005 and unless
sooner terminated as provided herein, shall end on December 31, 2008 ("Term").
4. Extent of Service.
Employee shall donate his full time, attention, and energies to the
business of Employer, and shall not during the Term of this Agreement be engaged
in any other business activities, except personal investments, without the prior
written consent of Employer.
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5. Regular Compensation.
In consideration for the services which Employee is to render under this
Agreement, Employer shall pay to Employee a base salary ("Base Salary") of Three
Hundred Thirty Thousand Dollars ($330,000). The Base Salary shall be payable to
Employee in equal semi-monthly installments on the fifteenth and last working
day of each month during the period of employment. Cost of living adjustments
will be made effective January 1 of the second, third and fourth years in
amounts indicated by the Consumer Price Index for the Western Urban Area
published by the U.S. Department of Labor Statistics for the preceding twelve
(12) months.
6. Discretionary Incentive Compensation.
Employee shall be entitled to participate in any incentive programs which
may be adopted from time to time by Employer for Employee. Amounts awarded to
Employee under any said incentive program shall be determined at the sole
discretion of Employer, including the vesting of any incentive awards. If either
the Employer or Employee choose to terminate this Agreement, for reasons other
than those included in paragraph 19, on the conclusion of this Agreement, the
incentive award earned for the 2008 year will be paid in full as if Employee
were still employed.
7. Business Expenses.
Employee shall be reimbursed for all ordinary and necessary, documented
expenses reasonably incurred by Employee in connection with his employment
associated with managing the business of Employer and other expenses which may
be authorized from time to time by the Board of Directors of Employer, including
expenses for club membership, entertainment, travel and similar items. Travel
and other expenses for attendance at conventions and banking education programs
that are approved by the Board of Directors shall also be reimbursed. Employer
will pay for or will reimburse
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Employee for such expenses upon presentation by Employee from time to time of
receipts evidencing such expenditures.
8. Automobile.
Employer shall purchase or lease an automobile of the Employee's choice
for his use as Chief Executive Officer. Employer shall pay all fuel, operating,
maintenance and insurance cost as well as the financing costs based on the
average annual cost of funds to the bank. Employee shall be entitled to limited
use of the automobile for personal use, but shall primarily use it for business
purposes associated with his employment. As the Chief Executive Officer of
Employer, Employee has been provided an automobile for the convenience of
Employer. Employer expects the Employee will frequently visit Employer's various
business locations, customers, business partners, vendors, regulatory agencies,
ratings and market making agencies and travel for trade associations in which
Employer is actively engaged. For the security of the automobile and the
convenience of the Employer, Employee agrees to garage the automobile at his
personal residence. Employee is authorized to commence his work travel as set
forth above from such personal residence. In addition to the accumulation of
Employer paid operational expense referenced above the vehicle will be
depreciated over a five-year period at the rate of twenty percent per year.
Total annual expenses exceeding $14,400 (including depreciation) will result in
the temporary reduction of Employee's annual compensation by the difference
between such total expenses and $14,400.
9. Vacation.
During the term of employment Employee shall be entitled to vacation leave
at full salary at the discretion of Employee as time allows, so long as it is
reasonable and does not jeopardize his responsibilities, of twenty (20) business
days; provided that Employee shall take as a portion of his vacation leave at
least ten (10) consecutive business days.
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10. Disability.
If Employee becomes permanently disabled during the Term because of
sickness, physical or mental disability, so that he is unable to perform his
full duties hereunder, Employer agrees to continue the salary (i) ninety (90)
days from commencement of the disability, (ii) until Employee is able to return
to work, or (iii) when any payments commence to Employee under the separate
Salary Continuation Agreement executed between the parties, whichever is less.
11. Insurance.
Employer shall provide to Employee, his wife and qualifying children,
during the Term at Employer's expense the same medical insurance, dental
insurance, life insurance, and disability insurance coverage, if any, which may
be offered to Employer's other full-time employees under any benefit plans as
may be in effect from time to time.
The parties acknowledge that Employee's Base Salary has been set high
enough under this contract so that Employee may pay for life insurance. However,
Employee shall have the right to determine whether to maintain life insurance
and use part of his Base Salary to cover the premiums thereon, or to use the
Base Salary for other purposes. Employer shall have no duty under this agreement
to give Employee any additional compensation to cover life insurance premiums or
to maintain any life insurance on Employee's life.
12. Stock Options.
As part of the consideration for entering this agreement, the Board of
Directors has agreed to grant 7,000 incentive stock options each year on January
1 of 2005, 2006, 2007 and 2008 at the then market value provided employee is
still actively employed by employer on each of said dates. Each stock option
grant will vest 25% on grant and 25% each year thereafter.
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13. Retirement Plan.
Employee shall be entitled to participate in any retirement plans offered
to other employees of Employer such as Employee's participation in Employer's
401K plan.
14. Printed Material.
All written, printed, visual or audio materials used by Employee in
performing duties for Employer, other than Employee's personal notes and
diaries, are and shall remain the property of Employer. Upon termination of
employment on any basis, Employee shall return all such materials to Employer.
15. Disclosure of Information.
In the course of employment, Employee may have access to confidential
information and trade secrets relating to Employer's business. Except as
required in the course of employment by Employer, Employee shall not, without
Employer's prior written consent, directly or indirectly disclose to anyone any
confidential information relating to Employer or any financial information,
trade secrets or "know-how" which is germane to Employer's business and
operations. Employee recognizes and acknowledges that any financial information
concerning any of Employer's customers, as it may exist from time to time, is
strictly confidential and is a valuable, special and unique asset of Employer's
business. Employee shall not, either before or after termination of this
Agreement, disclose to anyone said financial information, or any part thereof,
for any reason or purposes whatsoever.
16. Prohibited Activities and Investments.
During the Term of this Agreement, Employee shall not, directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, principal stockholder (i.e., ten percent or more) or corporate officer,
directly, or in any
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other individual or representative capacity, engage or participate in any
business competitive with that of Employer.
17. Surety Bond.
Employee agrees to furnish all information and take any other steps
necessary to enable Employer to obtain and maintain a fidelity bond conditional
on the rendering of a true account by Employee of all moneys, goods, or other
property which may come into the custody, charge, or possession of Employee
during the Term of Employee's employment. The surety company issuing such bond
and the amount of the bond must be acceptable to Employer. All premiums on the
bond are to be paid by Employer. If Employee cannot personally qualify for a
surety bond at any time during the Term of this Agreement, Employer shall have
the option to terminate this Agreement immediately and said termination shall be
deemed to be a termination for cause.
18. Moral Conduct.
Employee agrees to conduct himself at all times with due regard to public
conventions and morals and to abide by and reflect in his personal actions all
of the "core values" adopted by Employer and its subsidiaries from time to time.
Employee further agrees not to do or commit any act that will reasonably tend to
degrade him or to bring him into public hatred, contempt or ridicule, or that
will reasonably tend to shock or offend any community in which Employer engages
in business, or to prejudice Employer or the banking industry in general.
19. Termination of Agreement.
(a) Termination for Cause.
Employer reserves the right to terminate this Agreement "for cause".
Termination for cause shall include termination because of Employee's (i)
personal dishonesty, (ii) incompetence, (iii) willful misconduct, (iv) breach of
fiduciary duty involving personal profit, (v) material breach of any of the
terms of this Agreement, (vi) substantial failure to perform assigned duties,
(vii) willful violation of any law, rule or regulation (other than
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traffic violations or similar offenses) or final cease-and-desist order, or
(viii) the willful or permanent breach by Employee of any obligations owed to
Employer pursuant to this Agreement. In addition, Employer reserves the right to
terminate this Agreement "for cause" in the event that actions are effected by
any regulatory agency having jurisdiction to remove or suspend Employee from
office, or upon the directive of any such regulatory agency that Employer must
remove Employee as its Chief Executive Officer, regardless of whether such
directive is given orally or in writing.
(b) Statutory Grounds for Termination.
Employee's employment under this Agreement shall terminate immediately
upon the occurrence of any of the following events, which events are described
in sections 2920 and 2921 of the California Labor Code:
(1) The occurrence of circumstances that make it impossible
or impractical for the business of Employer to be
continued.
(2) The death of Employee.
(3) The loss of Employee's legal capacity. This does not
affect Employee's rights under Section 10 of this
Agreement.
(4) The loss by Employer of legal capacity to contract.
(5) Subject to Section 10 of this Agreement, the continued
incapacity on the part of Employee under this Agreement,
unless waived by Employer.
(c) Termination for Bankruptcy.
This Agreement may be terminated immediately by either party at the option
of either party and without prejudice to any other remedy to which either party
may be entitled at law, in equity or under this Agreement if either party:
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(1) Files a petition in bankruptcy court or is adjudicated a
bankrupt;
(2) Institutes or suffers to be instituted against it or him
any procedure in bankruptcy court for reorganization or
rearrangement of his financial affairs;
(3) Has a receiver of his assets or property appointed
because of insolvency; or
(4) Makes a general assignment for the benefit of creditors.
(d) Automatic Termination in the Event of Acquisition of Employer.
This Agreement shall automatically terminate upon the consummation of any
event by which substantially all of the stock and/or assets of Employer are
acquired by a person, a group of persons, a financial institution or other
entity, and if the acquiring entity within a one (1) year period from date of
acquisition no longer desires that the Executive remain or if the acquiring
entity substantially changes the title, salary or position of the Executive.
In the event that termination should occur, Employee shall receive an
acquisition payment ("Acquisition Payment") in the amount equal to eighteen (18)
months Base Salary at the then current rate of compensation.
If termination occurs, the Employer will provide Executive benefit
continuation to include health, life and disability benefits during the eighteen
(18) month severance period.
In the event of any such acquisition of Employer and the consequent
automatic termination of this Agreement, no provision contained in this
Agreement should be construed to prevent Employee from negotiating a new
employment
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agreement with either Employer or the acquiror of Employer, should the parties
desire to do so.
It is mutually agreed by the parties that the above-referenced Acquisition
Payment shall be received by Employee in lieu of any and all claims and/or
damages which may be sustained by Employee due to the acquisition of Employer
and the termination of Employee's employment and will be accepted by Employee in
full satisfaction of all such claims and damages.
20. Severance Pay.
Upon early termination of this Agreement (i) pursuant to Section 19(d) of
this Agreement, (ii) by Employee for any reason, (iii) by Employer "for cause"
(pursuant to Section 19(a) of this Agreement), or (iv) because of the death,
incapacity or disability of Employee, Employee shall not receive any Severance
Payment of any sort or any bonus for the calendar year in which termination is
effected.
The parties acknowledge that it would be difficult to determine the
damages which Employee would suffer if his employment is terminated by Employer
without cause or on statutory grounds. Therefore it is agreed that if this
agreement is terminated early by Employer on any basis other than those listed
in the first paragraph of this Section 20, then Employee shall be entitled to
receive a cash payment ("Severance Payment") in the amount equal to one year's
Base Salary at the then current rate of compensation and benefit continuation to
include health, life and disability coverage for a period of one (1) year. It is
mutually agreed by the parties that the payment of the cash Severance Payment
set forth above shall be received by Employee in lieu of any and all claims
and/or damages which may be sustained by Employee by reason of his early
termination and will be accepted by Employee in full satisfaction of all such
claims and damages and as payment in full for all benefits received from
Employee's services. The parties understand and agree under no circumstances
would Employee be entitled
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to receive both the Acquisition Payment described in Subsection (2) of Section
19 and the Severance Payment described in this Section 20.
21. Notices.
Any notice to Employer required or permitted under this Agreement shall be
given in writing to Employer, either by personal service or by certified mail,
postage prepaid, addressed to the chairman of the Board of Directors of Employer
at its then principal place of business. Any such notice to Employee shall be
given in like manner and, if mailed, shall be addressed to Employee at
Employee's home address then shown on Employer's files. For the purpose of
determining compliance with any time limit in this Agreement, a notice shall be
deemed to have been duly given (a) on the date of service, if personally served
on the party to whom notice is to be given, or (b) the fifth business day after
mailing, if mailed to the party to whom notice is to be given in the manner
provided in this Section.
22. Nonassignability.
Neither this Agreement nor any right or interest hereunder shall be
assignable by Employee, his beneficiaries or legal representatives without
Employer's prior written consent; provided, however, that nothing in this
Section 22 shall preclude (i) Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of Employee or his estate from
assigning any rights hereunder to the person or persons entitled thereto.
23. No Attachment.
Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
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24. Binding Effect.
This Agreement shall be binding upon, and inure to the benefit of,
Employee and Employer and their respective permitted successors and assigns.
25. Modification and Waiver.
(a) Amendment of Agreement.
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) Waiver.
No term or condition of this Agreement shall be deemed to have been waived
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition for the future or as to any act other than that
specifically waived. No delay in exercising any rights shall be construed as a
waiver, nor shall a waiver on one occasion operate as a waiver of such right on
any future occasion.
26. Entire Agreement.
This Agreement supersedes any and all other agreements, either oral or in
writing, between the parties hereto with respect to the employment of Employee
by Employer. This Agreement contains all of the covenants and agreements between
the parties with respect to such employment in any manner whatsoever. Each party
to this Agreement acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party, or anyone acting
on behalf of any party, which are not embodied herein, and that no other
agreement,
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statement or promise not contained in this Agreement shall be valid and binding.
27. Partial Invalidity.
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.
28. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
29. Injunctive Relief.
Employer and Employee acknowledge and agree that the services to be
performed under this Agreement are of a special, unique, unusual, extraordinary
and intellectual character which give them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law.
Employer and Employee therefore expressly agree that Employer and Employee, in
addition to any other rights or remedies which Employer and Employee may
possess, shall be entitled to injunctive and other equitable relief to prevent a
breach of this Agreement by Employee and Employer.
30. Bank Regulatory Agencies.
The obligations and rights of the parties hereunder are expressly
conditioned upon the approval or non-disapproval of (i) this Agreement and/or
(ii) Employee, in the event such approvals are required, by those banking
regulatory agencies which have jurisdiction over Employer or any of its
subsidiaries.
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31. Duplicate Originals.
This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original, but all of which together constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the day and year first above written.
EMPLOYER: CAPITAL CORP OF THE WEST
______________________________ By____________________________________
Date Tom Van Groningen
Chairperson of the Board
EMPLOYEE:
______________________________ By____________________________________
Date Thomas T. Hawker
Chief Executive Officer