EXHIBIT 10.8
EXECUTIVE SALARY CONTINUATION AGREEMENT
THIS EXECUTIVE SALARY CONTINUATION AGREEMENT ("Agreement") is made and
entered into this ________________ day of __________, 1999, by and between
Capital Corporation of the West, a California corporation and County Bank, a
California banking corporation on the one hand (collectively the "Bank"), their
successors or assigns, and ___________________________________ on the other hand
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is employed by the Bank as its
[Position] ; and [Title] ;
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WHEREAS, the experience of the Executive, his knowledge of the affairs
of the Bank, and his reputation and contacts in the banking industry are so
valuable that assurance of his continued service is essential for the future
growth and profitability of the Bank and it is in the best interests of the Bank
to arrange terms of continued employment for the Executive so as to reasonably
assure his remaining in the Bank's employment during his lifetime or until the
age of retirement; and
WHEREAS, it is the desire of the Bank that the Executive's services be
retained as herein provided; and
WHEREAS, the Executive is willing to continue in the employ of the Bank
provided the Bank agrees to pay the Executive or his beneficiaries certain
benefits in accordance with the terms and conditions hereinafter set forth;
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NOW, THEREFORE, in consideration of the services to be performed in the
future as well as the mutual promises and covenants herein contained, it is
hereby agreed as follows:
ARTICLE 1.
1.1. BENEFICIARY. The term Beneficiary shall mean the person or persons
whom the Executive shall designate in writing to receive the benefits provided
hereunder.
1.2. DISABILITY. If the Executive is covered by a Bank-sponsored
disability insurance policy, the definition of disability shall be as defined
in such policy without regard to any waiting period. If Executive is not
covered by a Bank-sponsored disability policy, the term disability shall mean
the inability of the Executive to perform the duties and responsibilities of
his position with the Bank in a normal and regular manner, due to mental or
physical illness or injury, for a period of ninety (90) consecutive days, or
for fifty percent (50%) or more of the normal working days during a period of
one hundred eighty (180) consecutive days. Determination of the Executive's
disability shall be made by the Bank's Board of Directors, which
determination shall not be unreasonable or arbitrary and shall be supported
by medical opinion. In the event Executive is also a director of the Bank,
the Executive shall be ineligible to participate in such disability
determination. Executive shall, if requested by the Bank's Board of
Directors, submit to a mental or physical examination to assist the Board of
Directors in making its determination of disability hereunder. The
psychiatrist or physician performing such examination shall be selected by
the Bank and Executive, or the Executive's representative if Executive is not
able to participate in such selection.
1.3 NAMED FIDUCIARY AND PLAN ADMINISTRATOR. The Named Fiduciary and
Plan Administrator of this plan shall be the Bank.
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1.4 CHANGE OF CONTROL. A "Change of Control" shall be deemed to have
occurred if (i) a tender offer shall be made and consummated for the
ownership of 25% or more of the outstanding voting securities of the Bank;
(ii) the Bank shall be merged or consolidated with another bank or
corporation and as a result of such merger or consolidation less than 75% of
the outstanding voting securities of the surviving or resulting bank or
corporation shall be owned in the aggregate by the former shareholders of the
Bank, other than affiliates (within the meaning of the Securities Exchange
Act of 1934) of the party to such merger or consolidation, as the same shall
have existed immediately prior to such merger or consolidation; (iii) the
Bank shall sell substantially all of its assets to another bank or
corporation which is not a wholly owned subsidiary; or (iv) a person, within
the meaning of Section 3(a)(9) or of Section 13(d)(3) (as in effect on the
date hereof) of the Securities Exchange Act of 1934, shall acquire 25% or
more of the outstanding voting securities of the Bank (whether directly,
indirectly, beneficially or of record). For purposes hereof, ownership of
voting securities shall take into account and shall include ownership as
determined by applying the provisions of Rule 13d-3(d)(1)(i) (as in effect on
the date hereof) pursuant to the Securities Exchange Act of 1934.
1.5 CAUSE. The term "Cause" shall mean any act of embezzlement,
fraud, breach of fiduciary duty, dishonesty, deliberate or repeated disregard
of the policies and rules of the Bank as adopted by the Board of Directors or
a Committee thereof, egregious conduct resulting in the violation of any
banking statues or regulations, gross negligence adversely impacting the Bank
or any other willful misconduct relating to the Executive's duties.
ARTICLE 2.
2.1 EMPLOYMENT. The Bank agrees to employ the Executive in such
capacity as the Bank may determine from time to time. The Executive will
continue in the employ of the Bank
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in such capacity and with such duties and responsibilities as may be assigned
to him, and with such compensation as may be determined from time to time by
the Board of Directors of the Bank.
2.2 FULL EFFORTS. Executive shall devote his full business time and
efforts to the business and affairs of the Bank or the successor to the Bank
by which Executive is then employed pursuant to this Agreement; provided,
however, this provision shall not preclude Executive from serving as a
director or member of a committee of any other organization involving no
conflict of interests with the interests of the Bank, from engaging in
charitable and community activities, and from managing his personal
investments, provided that such activities do not materially interfere with
the regular performance of his duties and responsibilities under this
Agreement.
2.3 FRINGE BENEFIT. The salary continuation benefits provided by
this Agreement are granted by the Bank as a fringe benefit to the Executive
and are not part of any salary reduction plan or any arrangement deferring a
bonus or a salary increase. The Executive has no option to take any current
payment or bonus in lieu of these salary continuation benefits.
ARTICLE 3.
3.1 RETIREMENT. If the Executive shall continue in the employment of
the Bank until he attains the age of sixty-eight (68), he may retire from
active daily employment as of the first day of the month next following
attainment of age sixty-eight (68) or upon such later date as may be mutually
agreed upon by the Executive and the Bank ("Retirement Date").
3.2 PAYMENT. The Bank agrees that upon such Retirement Date it will
pay to the Executive the annual sum of Fifty-Thousand Dollars ($50,000),
payable monthly on the first day
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of each month following such Retirement Date for a period of one hundred
twenty (120) months; subject to the conditions and limitations set forth in
this Agreement.
3.3. DEATH AFTER RETIREMENT. The Bank agrees that if the Executive
dies after the Retirement Date but shall die before receiving the full amount
of monthly payments to which he is entitled under this Agreement, the Bank
will continue to make such monthly payments to the Executive's designated
Beneficiary for the remaining period. If a valid Beneficiary Designation is
not in effect, the payments shall be made to the Executive's surviving spouse
or, if none, said payments shall be made to the duly qualified personal
representative, executor or administrator of Executive's estate.
ARTICLE 4.
4.1. DEATH PRIOR TO RETIREMENT. In the event the Executive should
die while employed by the Bank at any time after the date of this Agreement
but prior to his Retirement Date, the Bank shall pay to the Executive's
designated Beneficiary a sum equal to the lesser of (i) the Net Insurance
Coverage for the appropriate Plan Year set forth in Schedule A (Participant
Balance Sheet and Policy Data) or (ii) the vested portion of the retirement
benefits in accordance with the provisions of Section 5.1.a. Said amount
shall be paid to the Executive's designated Beneficiary in a lump sum within
three (3) months of the Executive's date of death. If a valid Beneficiary
Designation is not in effect, the payments shall be made to the Executive's
surviving spouse or, if none, said payments shall be made to the duly
qualified personal representative, executor or administrator of Executive's
estate. Provided, however, that anything hereinabove to the contrary
notwithstanding, no death benefit shall be payable hereunder if it is
determined that the Executive has made any material misstatement of fact on
any application for life insurance purchased by the Bank.
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4.2. DISABILITY PRIOR TO RETIREMENT. In the event the Executive
should become disabled while actively employed by the Bank at any time after
the date of this Agreement but prior to his Retirement Date, the Executive
shall be vested in the amount to be determined in accordance with Section
5.1.a. Said amount shall be paid to the Executive in a lump sum within three
(3) months of the determination of disability. Said payment shall be in lieu
of any other retirement or death benefit under this Agreement.
ARTICLE 5.
5.1 TERMINATION OF EMPLOYMENT. The Bank reserves the right to
terminate the employment of the Executive at any time prior to his Retirement
Date. In the event that Executive's retirement is terminated for cause, as
defined above, then Executive shall not be entitled to any benefits pursuant
to this Agreement. In the event that the employment of the Executive shall
terminate prior to the Executive's Retirement Date, other than by reasons of
Executive's disability or death, then this Agreement shall terminate upon the
date of such termination of employment. Provided, however, that in the event
of termination prior to the Executive's Retirement Date, other than by
reasons of Executive's disability, death or cause, then Executive shall be
entitled to the benefits described below under the following circumstances.
a. The Executive will be considered to be vested in
40% of the retirement benefit payments described in
Section 3.2 of this Agreement after four (4) years
from the Executive's date of employment. The
Executive shall become vested thereafter in an
additional 30% of said retirement benefit payments
for each full succeeding year thereafter that
Executive remains an employee of the Bank and shall
be fully vested after six (6) continuous
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years from the Executive's date of employment.
If the Executive is employed by the Bank for a
period of less than four (4) continuous years,
the Executive shall not be considered to be
vested in any benefit hereunder and shall be
entitled to no benefits under this Agreement.
If the Executive's employment is terminated
under the provisions of Section 5.1, the Bank
will pay Executive's vested amount upon the
terms and conditions provided in this Agreement
and upon Executive attaining age sixty-eight
(68).
b. Anything hereinabove to the contrary
notwithstanding, if the Executive is not fully
vested in the amount set forth in Schedule A, he
will become fully vested in said amount in the
event of a Change of Control of the Bank and
Executive shall be entitled to the full amount set
forth in Schedule A, upon the terms and conditions
thereof, if termination of employment thereafter
occurs under this Section 5.1.
ARTICLE 6.
6.1 TERMINATION OF AGREEMENT BY REASON OF CHANGE IN LAW. The Bank is
entering into this Agreement upon the assumption that certain existing tax
laws will continue to be effective in substantially their current form. In
the event of any changes in such federal laws, which materially affect this
Agreement, the Bank shall have an option to terminate or modify this
Agreement. Provided, however, that the Executive shall be entitled to at
least the same amount as she would have been entitled to under Section 4.2
relating to disability. The payment of said amount shall be made upon such
terms and conditions and at such time as the Bank shall determine, but in no
event commencing later than the Executive's Retirement Date.
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ARTICLE 7.
7.1 NONASSIGNABLE. Neither the Executive, his spouse, nor any other
beneficiary under this Agreement shall have any power or right to transfer,
assign, anticipate, hypothecate, mortgage, commute, modify, or otherwise
encumber in advance any of the benefits payable hereunder, nor shall any of said
benefits be subject to seizure for the payment of any debts, judgments, alimony
or separate maintenance, owed by the Executive or his beneficiary or any of
them, or be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise.
ARTICLE 8.
8.1. CLAIMS PROCEDURE. The Bank shall notify the Executive or
Executive's beneficiary in writing, within sixty (60) days of written
application for benefits, of eligibility or non-eligibility for benefits
under the Agreement. If the Bank determines that the Executive or Executive's
beneficiary is not eligible for benefits or full benefits, a notice shall be
sent setting forth: (1) the specific reasons for such denial; (2) a specific
reference to the provisions of the Agreement on which the denial is based;
(3) a description of any additional information or material necessary for the
claimant to perfect his claim, and a description of why it is needed; and (4)
an explanation of the Agreement's claim review procedure and other
appropriate information as to the steps to be taken if the Executive or
Executive's beneficiary wishes to have the claim reviewed. If the Bank
determines that there are special circumstances requiring additional time to
make a decision, the Bank shall notify the Executive or Executive's
beneficiary of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to one additional period
of up to sixty (60) days.
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8.2 REVIEW PROCEDURE. If Executive or Executive's beneficiary is
determined by the Bank not to be eligible for benefits, or if the Executive
or Executive's beneficiary believes that she is entitled to greater or
different benefits, the Executive or Executive's beneficiary shall have the
opportunity to have such claim reviewed by the Bank by filing a petition for
review with the Bank within sixty (60) days after receipt of the notice
issued by the Bank. Said petition shall state the specific reasons which the
Executive or Executive's beneficiary believes, entitle him to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the
Bank of the petition, the Bank shall afford the Executive or Executive's
beneficiary (and counsel, if any) an opportunity to present her position to
the Bank orally or in writing, and the Executive or Executive's beneficiary
(or counsel) shall have the right to review the pertinent documents. The Bank
shall notify the Executive or Executive's beneficiary of its decision in
writing within the sixty (60) day period, stating specifically the basis of
its decision, written within the sixty (60) day period, stating specifically
the basis of its decision, written in a manner calculated to be understood by
the Executive or Executive's beneficiary and the specific provisions of the
Agreement on which the decision is based. If, because of the need for a
hearing, the sixty (60) day period is not sufficient, the decision may be
deferred for one additional period of up to sixty (60) days at the election
of the Bank, but notice of this deferral shall be given to the Executive or
Executive's beneficiary.
ARTICLE 9.
9.1. UNSECURED GENERAL CREDITOR. The Executive's rights are limited to
the right to receive payments as provided in this Agreement and the Executive's
position with respect thereto is that of a general unsecured creditor of the
Bank.
ARTICLE 10.
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10.1. REORGANIZATION. The Bank shall not voluntarily engage in a
Change of Control of the Bank unless and until such succeeding or continuing
corporation, bank, firm, or person agrees to assume and discharge the
obligations of the Bank under this Agreement. Upon the occurrence of such
event, the term "Bank" as used in this Agreement shall be deemed to refer to
such successor or survivor corporation, bank, firm or person.
ARTICLE 11.
11.1. NOT A CONTRACT OF EMPLOYMENT. This Agreement shall not be
deemed to constitute a contract of employment between the parties hereto, nor
shall any provision hereof restrict the right of the Bank to discharge the
Executive, or restrict the right of the Executive to terminate his employment.
ARTICLE 12.
12.1. LIQUIDATED DAMAGES. The parties hereto, before entering into
this Agreement, have been concerned with the fact that substantial damages
will be suffered by Executive in the event that the Bank shall fail to
perform according to this Agreement. In the event of nonperformance by the
Bank for a period of thirty (30) days or more from the time any such payment
was scheduled to be made pursuant to this Agreement, Executive shall
immediately be entitled to liquidated damages equal to one and one-half
(1-1/2) times the remaining payments due to Executive under this Agreement.
This provision shall not be applicable in the event that such nonpayment is
the result of prohibition of such payment by law, regulation or order of a
banking regulatory agency.
ARTICLE 13.
13.1. SUCCESSORS AND ASSIGNS; ASSIGNMENT. The rights and obligations of
this Agreement shall be binding upon and inure to the benefit of the successors,
assigns, heirs and
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personal representatives of the parties hereto. Executive may not assign this
Agreement or any of Executive's rights hereunder except with the prior
written consent of the Bank.
13.2. SEVERABILITY. If any provision of this Agreement, as applied to
either party or to any circumstance, is judged by a court to be void or
unenforceable, in whole or in part, the same shall in no way affect any other
provision of this Agreement, the application of such provision in any other
circumstances, or the validity or enforceability of this Agreement.
13.3. APPLICABLE LAW; JURISDICTION AND VENUE. This Agreement and all
matters or issues collateral hereto shall be governed by the laws of the State
of California applicable to contracts performed entirely therein. Executive and
Bank each consent to the jurisdiction of, and any action concerning this
Agreement shall be brought and tried in, the United States District Court for
the Eastern District of California or the Superior or Municipal Court for the
County of Merced.
13.4. WAIVER. A waiver by either party of any of the terms or
conditions of this Agreement in any one instance shall not be deemed or
construed to be a waiver of such terms or conditions for the future, or of any
subsequent breach thereof. All remedies, rights, undertakings, obligations, and
agreements contained in this Agreement shall be cumulative, and none of them
shall be in limitation of any other remedy, right, undertaking, obligation or
agreement of either party.
13.5. ATTORNEY'S FEES. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs
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incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.
13.6. HEADINGS. The headings in this Agreement are for convenience only
and shall not in any manner affect the interpretation or construction of the
Agreement or any of its provisions.
13.7. NOTICE. Any notice or other communication to be given under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if personally served, or if mailed, upon deposit in the United
States mail, first class postage prepaid, express or certified, return receipt
requested, and properly addressed to the parties as follows: if to Executive at
his last address shown in the Bank's records; if to Bank:
County Bank
550 West Main Street
Merced, California 95340
Attn: Chairman
Either party may designate a new address for purposes of this Section 13.7 by
giving the other notice of the new address as provided herein.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be duly
executed by its proper officer and the Executive has hereunto set his hand at
Merced, California, the day and year first above written.
COUNTY BANK EXECUTIVE
By:
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[Name]
Its:
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