Exhibit 99.1
CAPITAL CORP OF THE WEST
SEVERANCE AGREEMENT
This Severance Agreement is entered into as of the ____day of _________, 2004 by
and between Capital Corp of the West (CCOW) and ___________________.
I. Term Of Agreement
The initial term of this Agreement shall be for a period of two years,
commencing __________, 2004. On the first anniversary this Agreement, and on
each anniversary thereafter, the Agreement shall be extended automatically for
one additional year unless CCOW's Board of Directors gives notice to the
Executive in writing at least ninety (90) days before the anniversary that the
term of this Agreement will not be extended. If the Board of Directors
determines not to extend the term, it shall promptly notify the Executive.
Unless terminated earlier, this Agreement shall terminate when the Executive
reaches age sixty-five (65) or such age as shall be mutually agreed upon by the
Executive and Board. If the Board of Directors decides not to extend the term of
this Agreement, this Agreement shall nevertheless remain in force until its term
expires.
II. Change In Control Combined With Employment Termination
Termination of Executive Within One Year After a Change in Control.
If a Change in Control occurs during the term of this Agreement and if either of
the following also occurs, the Executive shall be entitled to severance
benefits.
1) Involuntary Termination Without Cause: the Executive's employment
with CCOW and Subsidiaries is involuntarily terminated within one
year after a Change in Control, except for termination under Section
6 (page 5) of this Agreement. For purposes of this Agreement,
"Subsidiary" means any entity in which CCOW directly or indirectly
beneficially owns 50% or more of the outstanding voting securities,
or
2) Voluntary Termination for Good Reason: the Executive terminates
his/her employment with CCOW and Subsidiaries for Good Reason (as
defined in Section 5 - page 4) within one year after a Change in
Control.
If the Executive is removed from office or if his/her employment
terminates after discussions with a third party regarding a Change in
Control commence, and if those discussions ultimately conclude with a
Change in Control, then for purposes of this Agreement the removal of the
Executive or termination of his/her employment shall be deemed to have
occurred after the Change in Control.
Definition of Change in Control. For purposes of this Agreement, "Change in
Control" means any of the following events occur -
1) Merger: CCOW merges into or consolidates with another corporation, or
merges another corporation into CCOW, and as a result less than a majority
of the combined voting power of the resulting corporation immediately
after the merger or consolidation is held by persons who were stockholders
of CCOW immediately before the merger or consolidation. For purposes of
this Agreement, the term "person" means an individual, corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, or other entity,
2) Acquisition of Significant Share Ownership: a report on Schedule 13D,
Schedule TO, or another form or schedule (other than Schedule 13G), is
filed or is required to be filed under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the filing
person or persons acting in concert has or have become the beneficial
owner of 25% or more of the combined voting power of CCOW's voting
securities (but this clause shall not apply to beneficial ownership of
voting shares held by a subsidiary in a fiduciary capacity or beneficial
ownership of voting shares held by an employee benefit plan of CCOW),
3) Change in Board Composition: during any period of two consecutive
years, individuals who constitute CCOW's board of directors at the
beginning of the two-year period cease for any reason to constitute at
least a majority thereof; provided, however, that for purposes of this
clause each director who is first elected by the board (or first nominated
by the board for election by stockholders) by a vote of at least
two-thirds of the directors who were directors at the beginning of the
period shall be deemed to have been a director at the beginning of the
two-year period, or
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4) Sale of Assets: CCOW sells to a third party substantially all of CCOW's
assets. For purposes of this Agreement, sale of substantially all of
CCOW's assets includes sale of the shares or assets of the Bank alone.
III. Severance Benefits
Severance. The benefits to which the Executive is entitled under Sections 1 and
2 (page 1) are -
1) Lump Sum Payment: CCOW shall make a lump sum payment to the Executive
in an amount in cash equal to the Executive's annual compensation. For
purposes of this Agreement, annual compensation means (a) the Executive's
annual base salary on the date of the Change in Control or the Executive's
termination of employment (at whichever date the Executive's current
annual base salary is greater), plus (b) the average of the bonuses and
incentive compensation earned for the three calendar years immediately
preceding the year in which the Change in Control occurs, regardless of
when the bonus or incentive compensation is paid. CCOW recognizes that the
bonus and incentive compensation earned by the Executive for a particular
year's service might be paid in the year after the calendar year in which
the bonus or incentive compensation is earned. The amount payable to the
Executive hereunder shall not be reduced to account for the time value of
money or discounted to present value. The payment required under this
Section is payable no later than 15 business days after the date the
Executive's employment terminates. If the Executive terminates employment
for Good Reason, the date of termination shall be the date specified by
the Executive in his/her notice of termination.
2) Benefit Plans: CCOW shall cause the Executive to become fully vested in
any qualified and non-qualified plans, programs or arrangements in which
the Executive participated if the plan, program, or arrangement does not
address the effect of a change in control. CCOW also shall contribute or
cause a subsidiary to contribute to the Executive's CCOW Bank 401(k)
Profit Sharing Plan account the matching and voluntary contributions, if
any, that would have been made had the Executive's employment not
terminated before the end of the plan year.
3) Insurance Coverage: CCOW shall cause to be continued life, health and
disability insurance coverage substantially identical to the coverage
maintained for the Executive before his termination. The insurance
coverage
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may cease when the Executive becomes employed by another employer or 12
months after the Executive's termination, whichever occurs first. At the
end of the 12-month period, the Executive shall have the option to
continue health insurance coverage at his own expense for a period not
less than the number of months by which the Consolidated Omnibus Budget
Reconciliation Act (COBRA) continuation period exceeds 12 months.
4) No Mitigation Required: CCOW hereby acknowledges that it will be
difficult and could be impossible (1) for the Executive to find reasonably
comparable employment after his employment terminates, and (2) to measure
the amount of damages the Executive suffers as a result of termination.
Additionally, CCOW acknowledges that its general severance pay plans do
not provide for mitigation, offset or reduction of any severance payment
received there under. Accordingly, CCOW further acknowledges that the
payment of severance benefits by CCOW under this Agreement is reasonable
and will be considered liquidated damages, and the Executive shall not be
required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment nor will any profits, income,
earnings or other benefits from any source whatsoever create any
mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise.
5) Good Reason: For purposes of this Agreement, "Good Reason" means the
occurrence of any of the following events or conditions without the
Executive's written consent -
(a) Reduction in Base Salary: Reduction in the Executive's base
salary, or
(b) Reduced or Discontinued Participation in Bonus, Incentive,
Compensation, and Other Plans: Reduction of the Executive's
bonus, incentive, and other compensation award opportunities
under CCOW's or Subsidiary's benefit plans, unless a
company-wide reduction of all officers' award opportunities
occurs simultaneously, or termination of the Executive's
participation in any officer or employee benefit plan
maintained by CCOW or Subsidiary, unless the plan is
terminated because of changes in law or loss of tax
deductibility to CCOW for contributions to the plan, or unless
the plan is terminated as a matter of policy applied equally
to all participants, or
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(c) Reduced Responsibilities or Status: Assignment to the
Executive of duties or responsibilities that are materially
inconsistent with the Executive's duties and responsibilities
immediately before the Change in Control, or any other action
by CCOW or its successor that results in a material reduction
or material adverse change in the Executive's position,
authority, duties or responsibilities, or
(d) Failure to Obtain Assumption Agreement: Failure to obtain an
assumption of CCOW obligations under this Agreement by any
successor to CCOW, regardless of whether such entity becomes a
successor as a result of a merger, consolidation, sale of
assets, or other form of reorganization, or
(e) Relocation of the Executive: Relocation of the CCOW's
principal executive offices, or requiring the Executive to
change his principal work location, to any location that is
more than 50 miles from the location CCOW's principal
executive offices on the date of this Agreement.
6) Termination For Which No Severance Benefits Are Payable.
(a) No Severance for Termination for Cause. Anything in this
Agreement to the contrary notwithstanding, under no
circumstance shall the Executive be entitled to severance
benefits if his employment terminates for Cause. For purposes
of this Agreement, "Cause" means the Executive shall have
committed any of the following acts -
1) Fraud, Embezzlement, Theft or Other Crime: an act of fraud,
embezzlement, or theft while employed by CCOW or a Subsidiary,
or conviction of the Executive for or plea of nolo contendere
to a felony or conviction of or plea of nolo contendere to a
misdemeanor involving moral turpitude, or the actual
incarceration of the Executive for 45 consecutive days or
more, or
2) Negligence and Other Actions: gross negligence,
insubordination, disloyalty, or dishonesty in the performance
of his duties as an officer of CCOW or Subsidiary; willful or
reckless failure by the Executive to adhere to CCOW's or
Subsidiary's written policies; intentional wrongful damage by
the Executive to the business or
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property of CCOW, including without limitation its reputation,
which in CCOW's sole judgment causes material harm to CCOW;
breach by the Executive of hi/her fiduciary duties to CCOW and
its stockholders, whether in hi/hers capacity as an officer or
as a director of CCOW or Subsidiary,
3) Removal: removal of the Executive from office or permanent
prohibition of the Executive from participating in the Bank's
affairs by an order issued under section 8(e)(4) or (g)(1) of
the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or
(g)(1), or
4) Disclosure of Trade Secrets: intentional wrongful
disclosure of secret processes or confidential information of
CCOW or affiliates, which in CCOW's sole judgment causes
material harm to CCOW or affiliates, or
5) Termination for Cause under an Employment Agreement: any
actions that have caused the Executive to be terminated for
cause under any employment agreement existing on the date
hereof or hereafter entered into between the Executive and
CCOW or a Subsidiary, or
6) Exclusion from Fidelity Coverage: the occurrence of any
event that results in the Executive being excluded from
coverage, or having coverage limited for the Executive as
compared to other executives of CCOW or affiliates, under a
blanket bond or other fidelity or insurance policy covering
directors, officers, or employees.
Definition of "Intentional": For purposes of this Agreement, no act
or failure to act on the part of the Executive shall be deemed to
have been intentional if it was due primarily to an error in
judgment or negligence. An act or failure to act on the Executive's
part shall be considered intentional if it is not in good faith and
if it is without a reasonable belief that the action or failure to
act is in the best interests of CCOW. Any act or failure to act
based upon authority granted by resolutions duly adopted by the
board of directors or based upon the advice of counsel for CCOW
shall be conclusively presumed to be in good faith and in the best
interests of CCOW.
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7) No Severance under this Agreement for the Executive's Death
or Disability. Anything in this Agreement to the contrary
notwithstanding, under no circumstance shall the Executive be
entitled to severance benefits under this Agreement if -
1) Death: the Executive dies while actively employed by
CCOW or a Subsidiary, or
2) Disability: the Executive becomes totally disabled
while actively employed by CCOW or a Subsidiary. For
purposes of this agreement, the term "totally disabled"
means that because of injury or sickness, the Executive
is unable to perform his duties. The benefits, if any,
payable to the Executive or his beneficiary(ies) or
estate relating to his/her death or disability shall be
determined solely by such benefit plans or arrangements
as CCOW or Subsidiary may have with the Executive
relating to death or disability, not by this Agreement.
It is mutually agreed by the parties that the above referenced Severance 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.
IV. Notices
Any notice to Employee required or permitted under this Agreement shall be given
in writing to Employee, either by personal service or by certified mail, postage
prepaid, 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.
V. Nonassignability
Neither this Agreement nor any right or interest hereunder shall be assignable
by Employee, his beneficiaries or legal representatives without Employer's prior
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written consent; provided, however, that nothing in this Section shall preclude
Employee from designating a beneficiary to receive any benefit payable hereunder
upon his/her death, or the executors, administrators, or other legal
representatives of Employee or his estate from assigning any rights hereunder to
the person or persons entitled thereto.
VI. 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.
VII. Binding Effect.
This Agreement shall be binding upon, and inure to the benefit of, Employee and
Employer and their respective successors.
VIII. 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.
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IV. Entire Agreement
This Agreement supersedes any and all other agreements, either oral or in
writing, between the parties hereto with respect to this Severance Agreement and
contains all of the covenants and agreements between the parties with respect to
this Severance Agreement. 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.
X. 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.
XI. Governing Law
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of California.
XII. This Agreement Is Not An Employment Contract
The parties hereto acknowledge and agree that (a) this Agreement is not an
employment agreement and (b) nothing in this Agreement shall give the Executive
any right or impose any obligations to continued employment by CCOW, nor shall
it give CCOW any rights or impose any obligations for the continued performance
of duties by the Executive for CCOW or any subsidiary or successor of CCOW.
In witness whereof, the parties hereto have duly executed this Agreement on the
day and year first above written.
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EMPLOYER CAPITAL CORP OF THE WEST
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Date Name
EMPLOYEE
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Date Name
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