Exhibit 10.1
EMPLOYMENT AGREEMENT
     This Employment Agreement (this “Agreement”) is entered into by and between
Capital Corp of the West, a California bank holding company (“CCOW” or
“Company”) and Richard Cupp, as of August 15, 2008 (the “Effective Date) and
shall be in effect for the period of one year, subject to renewal for such term
as may be agreed upon by the parties. This Agreement by and between the Company
and Executive (collectively referred to as the “Parties”) is intended, where
applicable, to comply with section 409A of the Internal Revenue Code of 1986, as
amended (“Code”). While following execution this Agreement shall be effective as
of the Effective Date, it shall not be executed by the parties or become
effective until all required regulatory approvals have been received.
     1. Duties and Executive Position.
     Executive is hereby employed as the President and Chief Executive Officer
of CCOW and Chief Executive Officer of County Bank. Executive shall perform the
customary duties of a Chief Executive Officer for a California bank holding
company, including but not limited to supervision of Company’s business and all
subsidiary corporations and businesses owned or related to Company and such
other duties as may from time to time be reasonably requested of Executive by
the Board of Directors of Company (“Board”). As used herein the term “business
of Company” shall include the business of any of Company’s subsidiaries and
related entities.
     2. Appointment to Company’s Board of Directors.
     Company hereby agrees that Executive shall remain a member of the Board for
so long as Executive is elected to a position on the Board by the shareholders
of Company and this Agreement has not been terminated. During the period of
Executive’s election to the Board, Executive shall serve as a member of any or
all committees to which he is appointed, except the current Audit Committee and
Compensation Committee and any future Board committees which require only
independent directors. Executive also hereby agrees to accept appointment to
other boards of directors and committees of subsidiary and related organizations
of Company, except such committees that require an independent director.
Executive shall fulfill all of Executive’s duties as a Board and committee
member without additional compensation. Except as otherwise expressly provided
by the terms of this Agreement, upon the termination of Executive’s employment
under this Agreement by either Executive or Company, Executive’s service on the
Board, all committees of the Company, all corporate offices of Company, and all
of Company’s subsidiaries and related companies shall be immediately terminated
without further corporate action; further, all fringe benefits, such as
insurance, shall be terminated on the last day of service of Executive, unless
otherwise expressly provided by the terms of this Agreement, Company’s personnel
policy, or any other benefit policies and programs in effect at the time of such
termination.
     3. Arbitration.
     To the fullest extent permitted by law all controversies between Executive
and Company, including whether any termination is with or without cause, will be
submitted for resolution to

 

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binding arbitration in accordance with the Employment Rules of the American
Arbitration Association. This means that, except as otherwise stated, both the
Company and the Executive understand that arbitration will be their exclusive
forum for resolving disputes between them, and that both parties waive their
entitlement, if any, to have controversies between them decided by a court or a
jury. This provision shall not apply to any claim or controversy with respect to
or arising out of any employee benefit plan or program of the Company to the
extent that such plan or program requires participants, beneficiaries and other
claimants to follow certain claims procedures specified therein.
     4. Extent of Service.
     Throughout his employment with the Company as President and Chief Executive
Officer, Executive shall donate his full time, attention, and energies to the
business of Company and shall not be engaged in any other business activities,
except personal investments, without the prior written consent of Company.
     5. Regular Compensation.
     In consideration for the services which Executive is to render under this
Agreement, Company shall pay to Executive a base salary (“Base Salary”) at the
annual rate of Five Hundred Thousand Dollars ($500,000). The Base Salary shall
be payable to Executive in equal semi-monthly installments on the company’s
normal payroll schedule.
     6. Annual Incentive Compensation.
     The maximum target bonus for the first year shall equal 150% times Base
Salary, comprised of three components: (i) the Guaranteed portion; (ii) the
Performance Criteria portion; and (iii) the Strategic Criteria portion. At the
end of the first twelve months, Executive shall be paid a bonus of $250,000 (the
“Guaranteed” portion) which is guaranteed. The remaining target bonus for the
first year shall be performance based comprised of $250,000 to be awarded based
on mutually agreed upon performance criteria (the “Performance Criteria”
portion) and $250,000 to be awarded based on achievement of strategic criteria
(the “Strategic Criteria” portion). The Performance Criteria and Strategic
Criteria shall be established not more than 30 days following the execution of
this Agreement. The target bonus to which Executive is entitled shall be paid
within 30 days of the first anniversary of the Effective Date of this Agreement
or within 30 days following the termination of Executive’s employment, whichever
is sooner.
     If this Agreement is renewed for a second year, the target bonus for the
second year shall equal 100% of Base Salary and shall be based entirely on
mutually agreed performance criteria. The award of the bonus for the second year
shall be based on the determination of the Compensation Committee of the Board
of Directors that Executive has met or exceeded the performance criteria.
     Executive shall also be entitled to participate in any incentive programs
which may be adopted from time to time by Company for Executive, subject to the
terms thereof. Amounts

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awarded to Executive under any said incentive program shall be determined at the
sole discretion of Company, including the vesting of any incentive awards.
     7. Business Expenses.
     Executive shall be reimbursed for all ordinary and necessary, documented
expenses in conformance with company policy. Request for reimbursement of other
expenses should be presented to the board in advance for approval. In addition,
the company will provide suitable housing and related housing expenses for the
Executive.
     8. Automobile.
     Company shall purchase or lease an automobile of the Executive’s choice for
his use as Chief Executive Officer at an “out the door” cost not to exceed
$55,000. Company shall pay all fuel, operating, maintenance, and insurance
costs. Executive 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 Company, Executive has been
provided an automobile for the convenience of Company. Company expects the
Executive will frequently visit Company’s various business locations, customers,
business partners, vendors, regulatory agencies, ratings and market making
agencies and travel for trade associations in which Company is actively engaged.
Upon termination of employment, automobile is to be returned to the company in
good condition on the final date of employment.
     9. Vacation.
     During his employment Executive shall be entitled to vacation leave at full
salary at the discretion of Executive as time allows, so long as it is
reasonable and does not jeopardize his responsibilities, of twenty (20) business
days per annum; provided that Executive shall take as a portion of his vacation
leave at least ten (10) consecutive business days per annum, unless otherwise
waived by the Board.
     10. Disability.
     If Executive becomes disabled (as defined in section 409A of the Code)
during his employment with Company pursuant to the terms of this Agreement,
Company agrees to continue Executive’s Base Salary (i) for ninety (90) days from
commencement of the disability or (ii) until Executive is able to return to work
whichever is less.
     11. Insurance.
     Company shall provide to Executive, for the benefit of Executive and his
eligible spouse, during Executive’s employment with Company pursuant to this
Agreement and at Company’s expense the same medical insurance, dental insurance,
and disability insurance coverage, if any, which may be offered to Company’s
other full-time Executives under any benefit plans as may be in effect from time
to time.

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     The parties acknowledge that Executive’s Base Salary has been set high
enough under this Agreement so that Executive may pay for additional life
insurance that would exceed the maximum company benefit. However, Executive
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. Company shall have no duty under this Agreement to give
Executive any additional compensation to cover life insurance premiums or to
maintain any life insurance on Executive’s life.
     12. Stock Options.
          (a) As part of the consideration for entering this Agreement, the
Board has agreed to grant Executive 100,000 incentive stock options on or about
the Effective Date. The stock option grant will vest as follows: 20% shall vest
12 months after the grant date. Thereafter the options will vest 20% per year on
the anniversary of the grant date. Options will be totally vested in five years.
Stock Options will immediately vest and become exercisable upon the following:
1. Termination by the Company without “cause” as defined in Section 19 below, 2.
Termination by the Executive for “good reason” as defined in Section 19 below or
3. Completion of this Agreement (as defined in Section 19(d)).
          (b) Such stock options shall be granted pursuant to and subject to the
terms of the 2002 Stock Option Plan, as amended and shall be subject to such
other terms as determined by the Board as may be set forth in the stock option
award agreement.
          (c) Additional annual stock option grants may be recommended by the
Compensation Committee subject to the approval of the Board of Directors.
     13. Retirement Plans. Executive shall be entitled to participate in any
retirement plans offered to other Executives of the company, such as Executive’s
participation in Company’s 401(k) plan and ESOP.
     14. Printed Material.
     All written, printed, electronic, visual or audio materials used by
Executive in performing duties for Company, other than Executive’s personal
notes and diaries, are and shall remain the property of Company. Upon
termination of employment on any basis, Executive shall return all such
materials to Company.
     15. Disclosure of Information.
     In the course of employment, Executive may have access to confidential
information and trade secrets relating to Company’s business. Except as required
in the course of employment by Company, Executive shall not, without Company’s
prior written consent, directly or indirectly disclose to anyone any
confidential information relating to Company or any financial information, trade
secrets or “know-how” that is germane to Company’s business and operations.

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Executive recognizes and acknowledges that any financial information concerning
any of Company’s customers, as it may exist from time to time, is strictly
confidential and is a valuable, special and unique asset of Company’s business.
Executive 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 Executive’s employment with Company pursuant to this Agreement,
Executive shall not, directly or indirectly, either as an Executive, Company,
consultant, agent, principal, partner, principal stockholder (i.e., ten percent
or more) or corporate officer, directly, or in any other individual or
representative capacity, engage or participate in any business competitive with
that of Company.
     17. Surety Bond.
     Executive agrees to furnish all information and take any other steps
necessary to enable Company to obtain and maintain a fidelity bond conditional
on the rendering of a true account by Executive of all moneys, goods, or other
property that may come into the custody, charge, or possession of Executive
during Executive’s employment. The surety company issuing such bond and the
amount of the bond must be acceptable to Company. All premiums on the bond are
to be paid by Company. If Executive cannot personally qualify for a surety bond
at any time during the Executive’s employment with Company pursuant to this
Agreement, Company shall have the option to terminate this Agreement immediately
and said termination shall be deemed to be a termination for cause under section
19(a) herein.
     18. Moral Conduct.
     Executive 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 Company and its subsidiaries from time to time.
Executive 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 Company engages
in business, or to prejudice Company or the banking industry in general.
     19. Termination of Agreement.
          (a) Termination for Cause.
     Company reserves the right to terminate this Agreement “for cause.”
Termination for cause shall include termination because of Executive’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
traffic violations or similar offenses) or final cease-and-desist order, or
(viii) the willful or permanent breach by Executive of any obligations owed to
Company pursuant to this Agreement. In addition,

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Company 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 Executive from office, or upon the directive of any such regulatory
agency that Company must remove Executive as its Chief Executive Officer,
regardless of whether such directive is given orally or in writing.
          (b) Statutory Grounds for Termination.
     Executive’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 Company to be continued.
    (2)  
The death of Executive.
    (3)  
The loss of Executive’s legal capacity. This does not affect Executive’s rights
under section 10 of this Agreement.
    (4)  
The loss by Company of legal capacity to contract.
    (5)  
Subject to section 10 of this Agreement, the continued incapacity on the part of
Executive under this Agreement, unless waived by Company.

          (c) Definition of Good Reason.
As used in this Agreement, the term Good Reason means the occurrence of any of
the following provided, however, that any such event or condition shall cease to
constitute a Good Reason two years following its initial existence:
(1) A material diminution in Executive’s Base Salary;
(2) A material diminution in Executive’s authority, duties, or responsibilities;
(3) A requirement that Executive report to a corporate officer or employee
instead of reporting directly to the Board of Directors of the Company.
(4) A change in the Executive’s principal work location to any location that is
more than 50 miles from Executive’s current work location on the date of this
Agreement; or
(5) Any other action or inaction that constitutes a material breach of this
Agreement by the Company.
Notwithstanding the foregoing, the Executive shall not be considered to have
terminated employment for Good Reason (i) unless he provides written notice to
the Company of the

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existence of the event or condition constituting Good Reason within 90 days of
its initial existence, or (ii) if the Company remedies such event or condition
within 30 days of receipt of such notice.
          (d) Completion of Agreement
     The Executive’s employment under this Agreement will terminate on the one
year anniversary of the effective date of this Agreement unless extended or
renewed by the written agreement of parties. “Completion of the Agreement” means
Executive’s performance of his duties under this Agreement through the later of
(i) the end of the first one year term or (ii) if the Company requests that the
parties renew or extend this Agreement on substantially the same terms, through
the end of the second one year term (or such shorter renewal term as the parties
mutually agree).
     20. Bonus Calculation and Severance Pay
          (a) (Bonus Calculation) If the Company terminates this Agreement
without cause, or if the Executive terminates the agreement for good reason, the
Executive will receive his base salary through the date of termination and the
annual target bonus; provided,
          (i) during the first one year term, the Executive will receive the
Guaranteed portion of $250,000 plus, if the Strategic Criteria are met, the
Strategic Criteria portion ($250,000), plus, any amount related to the
Performance Criteria portion (up to $250,000) which shall be determined by the
Board’s Compensation Committee; and
          (ii) after the first one year term, the Executive is eligible to
receive the target bonus of up to $500,000 which shall be determined by the
Board’s Compensation Committee based upon mutually agreed performance criteria.
Payment of incentive bonus under this Section 20(a) is in lieu of the annual
incentive bonus to which Executive would have been entitled under Section 6 if
this Agreement had continued to the end of its then current term. In no case
will Executive receive both an annual incentive bonus under Section 6 and any
payment under this Section 20(a) with respect to the same period of employment.
          (b) (Severance Pay) If the Company terminates this Agreement without
cause, or if Executive terminates the Agreement for Good Reason, or upon
Executive’s completion of the Agreement, the Executive also will receive a lump
sum severance payment of $500,000 plus, a performance based severance payment of
$250,000. The performance based severance award shall be conditioned on a
finding by the Compensation Committee of the Company’s Board of Directors that
Executive during the first year has achieved both the Performance Criteria and
the Strategic Criteria or after the first year that Executive has achieved
applicable performance criteria.

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          (c) For the avoidance of uncertainty: if the Executive refuses to
renew or extend this Agreement on substantially similar terms for a period not
to exceed one year at the request of the Company after the initial one year
term, Executive will be entitled to the annual incentive bonus under Section 6
for the first one year term but will not be entitled to any additional payment
under Section 20(a) or to any severance under Section 20(b); and if this
Agreement terminates (i) pursuant to Section 19(b) of this Agreement, (ii) by
Company “for cause” (pursuant to Section 19(a) of this Agreement), or
(iii) because of the death, incapacity or disability of Executive, Executive
shall not receive any annual incentive bonus under Section 6 or Section 20(a) or
any severance under Section 20(b).
          (d) Payments under the terms of this Section 20 are subject to
regulatory approval pursuant to Part 359 of the FDIC Rules and Regulations.
     21. Cooperation with Company After Termination of the Executive’s
Employment.
     Following termination of the Executive’s employment, Executive shall fully
cooperate with Company in all matters relating to the winding up of his pending
work on behalf of Company and the orderly transfer of any such pending work to
other employees of Company as may be designated by Company, including but not
limited to the successor President and Chief Executive Officer of Company.
     22. Notices.
     Any notice to Company required or permitted under this Agreement shall be
given in writing to Company, either by personal service or by certified mail,
postage prepaid, addressed to the chairman of the Board at its then principal
place of business. Any such notice to Executive shall be given in like manner
and, if mailed, shall be addressed to Executive at Executive’s home address then
shown on Company’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.
     23. Nonassignability.
     Neither this Agreement nor any right or interest hereunder shall be
assignable by Executive, his beneficiaries or legal representatives without
Company’s prior written consent; provided, however, that nothing in this
Section 23 shall preclude (i) Executive from designating a beneficiary to
receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of Executive or his estate from
assigning any rights hereunder to the person or persons entitled thereto.
     24. 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

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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.
     25. Binding Effect.
     This Agreement shall be binding upon and inure to the benefit of Executive
and Company and their respective permitted successors and assigns. This
Agreement shall not become effective and Executive shall have no rights
hereunder prior to receipt of all regulatory approvals from the Company’s
banking regulators.
     26. 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.
     27. Entire Agreement.
     The parties hereto acknowledge that each has read this Agreement,
understand it, and agree to be bound by its terms. The parties further agree
that this Agreement contains all of the covenants and agreements between the
parties with respect to the employment of Executive by Company. 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 is not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
and binding.
     28. Partial Invalidity.
     If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the provision shall be deemed
amended as necessary to conform to applicable laws or regulations, or if it
cannot be so amended without materially altering the intention of the parties,
the remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.

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     29. Governing Law.
     This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
     30. Injunctive Relief.
     Company and Executive 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.
Company and Executive therefore expressly agree that Company and Executive, in
addition to any other rights or remedies which Company and Executive may
possess, shall be entitled to injunctive and other equitable relief to prevent a
breach of this Agreement by Executive and Company.
     31. Company 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) Executive, in the event such approvals are required, by those banking
regulatory agencies which have jurisdiction over Company or any of its
subsidiaries.
     32. 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.
     33. Compliance with Internal Revenue Code Section 409A.
          (a) Company and Executive agree that, notwithstanding anything herein
to the contrary, this Agreement is intended to be interpreted and operated so
that the payment of the benefits set forth herein either shall either be exempt
from the requirements of section 409A of the Code or shall comply with the
requirements of such provision. References in this Agreement to section 409A of
the Code include rules, regulations, and guidance of general application issued
by the Department of the Treasury under section 409A of the Code. Executive
hereby acknowledges that he has been advised to seek and has sought the advice
of a tax advisor with respect to the tax consequences to Executive of all
payments pursuant to this Agreement, including any adverse tax consequences or
penalty taxes under Code section 409A and applicable State tax law. Executive
hereby agrees to bear the entire risk of any such adverse federal and State tax
consequences and penalty taxes in the event any payment pursuant to this
Agreement is deemed to be subject to Code Section 409A, that no representations
have been made to Executive relating to the tax treatment of any payment
pursuant to this Agreement under Code Section 409A and the corresponding
provisions of any applicable State income tax laws, and that in no event shall
the Company be liable to Executive for or with respect to any taxes, penalties
or interest which may be imposed upon Executive pursuant to Section 409A.

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          (b) If, on the date of Executive’s Separation from Service, Executive
is a “specified employee”, as defined in section 409A of the Code, of the
Company, and if any payments or benefits under this Agreement payable upon
Executive’s Separation from Service will result in additional tax or interest to
the Executive because of section 409A of the Code, then despite any provision of
this Agreement to the contrary the Executive will not be entitled to the
payments or benefits until the earlier of (x) the date that is six months and
one day after Executive’s Separation from Service for reasons other than the
Executive’s death, and (y) the date of the Executive’s death. After the end of
the period during which payments or benefits are delayed under this provision,
the entire amount of the delayed payments and benefits shall be paid to the
Executive in a single lump sum, without interest.
          (c) With respect to reimbursements and in-kind benefits made to
Executive pursuant to Sections 8 and 9, if any, which are not otherwise
excludible from Executive’s gross income, to the extent required to comply with
the provisions of section 409A of the Code, no reimbursement of such expenses
incurred by Executive during any taxable year of Executive shall be made after
the last day of the following taxable year, the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a taxable year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, and the right to reimbursement of such
expenses or such in-kind benefits shall not be subject to liquidation or
exchange for another benefit.

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     IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as
of the 27 day of OCT, 2008.

               COMPANY:  CAPITAL CORP OF THE WEST
      By:   /s/ Jerry Callister         Jerry Callister        Chairman — Board
of Directors                 EXECUTIVE:     /s/ Richard S. Cupp         Richard
S. Cupp             

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