Exhibit 10

 

EMPLOYMENT AGREEMENT

 

DATE:                                                           January 1, 2002

 

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 September 12, 2000, which
will expire at the close of business on December 31, 2001.

 

2.               The parties desire to enter into a new Employment Agreement for
an additional three (3) year term.

 

AGREEMENT:

 

Employer hereby agrees to extend the employment of Employee, and Employee hereby
accepts said extension of employment with Employer, upon 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

 

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Employer.  As used herein the term “business of Employer” shall include the
business of any 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 and all committees to which he is
appointed, except the audit committee.  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.

 

Provided Employee is still employed by Employer through December 31, 2001, this
Agreement shall be effective for a period of thirty-six (36) months thereafter,
and employment under this agreement shall commence on January 1, 2002 and unless
sooner terminated as provided herein, shall end on December 31, 2004 (“Term”).

 

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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.

 

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 Two
Hundred Sixty Thousand Dollars ($260,000).  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 and third 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 not to negotiate a subsequent Agreement, for reasons other
than those included in paragraph 19, on the conclusion of this Agreement, the
incentive award earned for the 2004 year will be paid in full as if Employee
were still employed.

 

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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 Employee for such expenses upon presentation by
Employee from time to time of receipts evidencing such expenditures.

 

8.                                       Automobile.

 

Employer shall provide an automobile for the use of employee.  Employer shall
pay all fuel, operating, maintenance and insurance costs associated with such
automobile.  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 various trade associations in which Employer is actively
engaged.  For the security of the automobile, the convenience of the Employer,
and the conservation of the time of Employee dedicated to the business of
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.

 

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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 at least
ten (10) consecutive business days.

 

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

 

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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
2002, 2003, and 2004 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.

 

13.                                 Retirement Plan.

 

Employer 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
Employers’ prior written consent, directly or indirectly disclose to anyone any
confidential information relating to Employer or any financial information,
trade

 

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secrets or “know-how” which is germane to Employer’s business and operations. 
Employee recognizes and acknowledges that any financial information concerning
any of Employers’ customers, as it may exist from time to time, is strictly
confidential and is a valuable, special and unique asset of Employers’
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 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.

 

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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 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.

 

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(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:

 

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.

 

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(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)
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 agreement
with either Employer or the acquirer 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

 

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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 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 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, or (b) the fifth business day after mailing, if

 

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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 representative 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.

 

24.                                 Binding Effect.

 

The Agreement shall be binding upon, and inure to the benefit of, Employee and
Employer and their respective permitted successors and assigns.

 

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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 estoppels against the enforcement of any provision of this
Agreement, except by written instrument of the party charge with such 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 may right 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 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, 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.

 

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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.

 

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.

 

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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:

/s/ James W. Tolladay

 

 

 

James W. Tolladay

 

 

Chairperson of the Board

 

 

 

 

EMPLOYEE:

/s/ Thomas T. Hawker

 

 

 

Thomas T. Hawker

 

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