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--12-31 false 0001127371 0001127371 2024-04-01 2024-04-01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 1, 2024

 

 

COMMUNITY WEST BANCSHARES

(Exact name of registrant as specified in its charter)

 

 

 

California   000-31977   77-0539125

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

7100 N. Financial Dr., Suite 101, Fresno, California 93720
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (559)298-1775

Central Valley Community Bancorp

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading

Symbol

 

Name of Each Exchange

on Which Registered

Common Stock, no par value   CWBC   NASDAQ

 

 

 


Item 2.01

Completion of Acquisition or Disposition of Assets.

Effective at 12.01 a.m. (Pacific Daylight Time) on April 1, 2024 (the “Effective Time”), Central Valley Community Bancorp (“Central Valley”) completed the previously announced merger transaction with Community West Banchares (“Community West”), in accordance with the terms and conditions of the Agreement and Plan of Reorganization and Merger, dated as of October 10, 2023, by and among Central Valley and Community West (the “Merger Agreement”). At the Effective Time, Community West merged with and into the Central Valley, with Central Valley being the surviving entity (the “Corporate Merger”). Following the Corporate Merger, Community West Bank, a wholly owned subsidiary of Community West, (“CWB”) merged with and into Central Valley Community Bank, a wholly-owned subsidiary of Central Valley, (“CVCB”) with CVCB being the surviving banking institution (the “Bank Merger”, and collectively with the Corporate Merger, the “Mergers”). Effective with the Mergers, the corporate name of the Central Valley and CVCB were changed to Community West Bancshares and Community West Bank, respectively. Pursuant to the Merger Agreement, holders of Community West common stock was converted into the right to receive 0.79 of a share of common stock of Central Valley for each share of Community West common stock held immediately prior to the Effective Time of the Mergers, with cash to be paid in lieu of any fractional shares of common stock of Central Valley (the “Merger Consideration”). At the Effective Time, (i) each outstanding unvested Community West restricted stock award automatically vested in full and will be entitled to the Merger Consideration, (ii) each outstanding unvested Community West stock option automatically vested in full, and each outstanding stock option was substituted for a stock option issued by Central Valley for the right to receive a number of shares of Central Valley’s common stock at an exercise price, both adjusted for the Merger Consideration. As a result of the Mergers, Central Valley will issue approximately 7,038,220 shares of Central Valley common stock and reserve 390,462 shares of common stock for the substituted Community West stock options.

The pre-Merger outstanding shares of Central Valley common stock remain outstanding and are not affected by the Merger. Following the Merger, the Company will have outstanding approximately 18,870,214 shares of its common stock with former shareholders of Community West owning 37% percent of the outstanding shares.

The Central Valley shares of common stock will continue to be listed for trading on the NASDAQ Capital Market under the name “Community West Bancshares” with “CWBC” as the new trading symbol.

The foregoing description of the Mergers and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is incorporated herein by reference from Exhibit 2.1 included with this report.

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Board of Directors

The bylaws of Central Valley and CVCB provide for a board of directors with a range of nine to 15 positions with the specific number fixed by resolution of the respective board of directors. On March 20, 2024, the respective boards of directors of Central Valley and CVCB approved a resolution to expand the number of directors to 15, to be effective on the consummation of the Mergers.

On March 20, 2024, the respective boards of directors of Central Valley and CVCB also resolved that, effective upon the consummation of the Mergers, as contemplated by the Merger Agreement, Robert H. Bartlein, Suzanne M. Chadwick, Tom L. Dobyns, James W. Lokey, Martin E. Plourd and Kirk B. Stovesand (“New Directors”), would be appointed to serve on the boards of directors of Central Valley and CVCB. In addition, pursuant to the Merger Agreement, these six new directors will be included on the list of nominees for directors presented by the Central Valley board of directors for which the Central Valley board of directors will solicit proxies at the Central Valley 2024 Annual Meeting.

Each of the New Directors will be entitled to receive the compensation that other directors of Central Valley receive, as determined by the board of directors from time to time. Each non-employee director who is not the Chairman of the Board of Directors currently receives an annual retainer of $46,800 plus stock awards valued at $30,000. The New Directors will receive their initial annual grant of stock awards at the time of the 2024 Annual Meeting. Such awards will be made pursuant to the Central Valley 2015 Equity Incentive Plan.

 

2


Other than the Merger Agreement and Martin E. Plourd’s employment agreement (discussed below) there are no arrangements between the New Directors and any other person pursuant to which the New Directors were selected as directors. There are no transactions in which any New Director has an interest requiring disclosure under Item 404(a) of Regulation S-K. There are no family relationships between any of the New Directors and any other director or executive officer of Central Valley.

Biographical Information. Biographical information related to the New Directors can be found in the Proxy Statement for the 2023 Annual Meeting filed by Community West with the SEC on April 17, 2023.

The following current directors (with their respective committee assignments indicated) of Central Valley and CVCB have retired from the board of directors effective on the consummation of the Mergers: Lou McMurray (Compensation Committee and Strategic Planning Committee), Gary D. Gall (Audit and Compliance Committee and Strategic Planning Committee) and Karen Musson (Nominating Committee, Compensation Committee and Strategic Planning Committee). Lou McMurray has been elected to serve as Director Emeritus to the Central Valley and CVCB board of directors effective on the consummation of the Mergers.

Executive Committee

The Central Valley board of directors have designated an Executive Committee consisting of the following members: Robert H. Bartlein, James W. Lokey, Daniel J. Doyle (Chair), Andriana D. Majarian and Steve D. McDonald. James J. Kim and Martin E. Plourd will serve as the initial advisors to the Executive Committee. The Executive Committee will possess and exercise such powers and functions of the board of directors as may be delegated by the board of directors subject to the Central Valley articles of incorporation and bylaws and applicable law.

Executive Management Team

Effective with the closing of the Mergers, Central Valley reorganized its management structure (see below). In addition. Martin E. Plourd will assume the position of President of the Central Valley and James J. Kim will continue as Chief Executive Officer of Central Valley and President and Chief Executive Officer of CVCB. Timothy J. Stronks, the former the Executive Vice President and Chief Operating Officer of Community West, will assume the position of Executive Vice President, Chief Risk Officer of the combined bank. William F. Filippin, the former President of CWB, will assume the position of Executive Vice President, Regional Executive. There are no transactions in which Mr. Plourd, Mr. Stronks and Mr. Filippin has an interest requiring disclosure under Item 404(a) of Regulation S-K. There are no family relationships between any of them and any other director or executive officer of Central Valley.

Biographical Information. Biographical information related to the former executives of Community West can be found in the Proxy Statement for the 2023 Annual Meeting filed by Community West with the SEC on April 17, 2023.

Employment Agreements

As previously described in the S-4 Registration Statement, Central Valley entered into an employment agreement with Martin E. Plourd, dated October 10, 2023, setting forth the terms of his employment with, and service to, Central Valley following the consummation of the Mergers. For a description of Mr. Plourd’s employment agreement, see the subsection in the S-4 Registration Statement entitled “—New Employment Agreements with Central Valley” in the section entitled “Interests of Community West Directors and Executive Officers in the Merger.” Such description is incorporated into this Item 5.02 by reference. Mr. Plourd’s employment agreement which is attached to this report as Exhibit 10.1 and incorporated herein by references.

Prior to the consummation of the Mergers, the Central Valley board of directors approved a number of employment agreements to take effect on the consummation of the Merger with former executives of Community West and current executive officers of Central Valley. Since these executive officer employment agreements take effect on the consummation of the Mergers they are entered in the name of Community West Bancshares and/or Community West Bank, the new corporate names for Central Valley and CVCB (hereinafter referred to in this discussion collectively as the “Company”).

 

3


As of the Effective Time, the Company entered into employment agreements with the following executive officers:

Shannon R. Livingston, Executive Vice President and Chief Financial Officer

Patrick A. Luis, Executive Vice President and Chief Credit Officer

Dawn M. Cagle, Executive Vice President, Chief Human Resources Officer

William F. Filippin, Executive Vice President, Regional Executive

Blaine C. Lauhon, Executive Vice President, Chief Administrative Officer

Jeffrey M. Martin, Executive Vice President, Chief Banking Officer

A. Kenneth Ramos, Executive Vice-President, Regional Executive

Timothy J. Stronks, Executive Vice President, Chief Risk Officer

The executive employment agreements provide for the following salaries (which may be increased from time to time):

 

Name

   Salary  

Shannon R. Livingston

   $ 330,000  

Patrick A. Luis

   $ 275,000  

Dawn M. Cagle

   $ 200,000  

William F. Filippin

   $ 330,000  

Blaine C. Lauhon

   $ 285,000  

Jeffrey M. Martin

   $ 250,000  

A. Kenneth Ramos

   $ 250,000  

Timothy J. Stronks

   $ 290,000  

All of the executive employment agreements provide for similar terms. In addition to the salaries listed above each executive officer is eligible to receive an annual incentive bonus under the Company Senior Management Incentive Plan which provides for an annual incentive bonus with a target amount as a percentage of the executive officer’s base salary as set forth in each respective employment agreement. Each executive officer will be provided with a company automobile or an automobile allowance as set forth in each respective employment agreement. Under the executive employment agreements the executive officer’s employment may be terminated for “cause” (as defined in the agreement). In the event of a “change in control” (as defined in the agreement) the executive will be entitled to a lump sum payment equal to the average monthly total cash compensation paid to executive during the most recent three previous years of employment or in the case of former employees of Community West or CWB three years from the effective date of the agreement (or in either case, a shorter period if less than three years) (“average monthly cash compensation”) multiplied by 18. Under the employment agreements the executive may terminate the agreement for “good reason” (as defined in the agreement). If the employer terminates the employment agreement without cause or the executive terminates the employment agreement for “good reason” (and provided there is not a “change in control”) then the executive will be entitled to monthly payments equal to the average monthly cash compensation for 12 months (or if earlier, until the executive obtains comparable employment as defined in the agreement).

The employment agreements are attached to this report as Exhibit 10.2 through 10.8 and incorporated herein by reference.

 

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Name Change.

At the Effective Time, Community West merged with and into Central Valley, with Central Valley being the surviving corporation under the new name “Community West Bancshares” Upon the filing of the Bank Holding Company Merger Agreement with the California Secretary of State which became effective on April 1, 2024 to effect the Corporate Merger (the “State Merger Agreement”), the Central Valley Articles of Incorporation was amended in accordance with California law to reflect the change in Central Valley’s corporate name to “Community West Bancshares”.

 

4


The foregoing descriptions of the amendment to Central Valley’s Articles of Incorporation is qualified in its entirety by reference to the full text of the amendment to Central Valley’s Articles of Incorporation (in the form of the State Merger Agreement), which is incorporated herein by reference from Exhibit 3.1 included with this report.

 

Item 8.01

Other Events.

On April 1, 2024, Central Valley issued a press release announcing the completion of the Mergers. A copy of the press release is attached to this report as Exhibit 99.1 and incorporated herein by reference.

Central Valley has scheduled its 2024 Annual Meeting of Shareholders for May 30, 2024 and established April 25, 2024 as the record date for the meeting.

 

Item 9.01

Financial Statements and Exhibits.

 

  (a)

Financial statements of businesses or funds acquired.

Central Valley will file any financial statements, as required by this Item, no later than 71 days after the date on which this Form 8-K is required to be filed.

 

  (b)

Pro forma financial information.

Central Valley will file any financial statements, as required by this Item, no later than 71 days after the date on which this Form 8-K is required to be filed.

 

  (d)

Exhibits

 

Exhibit No.

  

Description

2.1    Agreement and Plan of Reorganization and Merger by and among Central Valley Community Bancorp and Community West Bancshares, dated October 10, 2023, incorporated by reference to Exhibit 2.1 on Form 8-K filed with the SEC on October 10, 2023.
3.1    Bank Holding Company Merger Agreement, dated March 20, 2024, effective April 1, 2024.
10.1    Employment Agreement between Central Valley Community Bancorp and Martin E. Plourd, dated October 10, 2023.
10.2    Employment Agreement between Community West Bancshares and Community West Bank and Shannon R. Livingston, dated April 1, 2024.
10.3    Employment Agreement between Community West Bancshares and Community West Bank and Patrick A. Luis, dated April 1, 2024.
10.4    Employment Agreement between Community West Bank and Dawn M. Cagle, dated April 1, 2024.
10.5    Employment Agreement between Community West Bank and William F. Filippin, dated April 1, 2024.
10.6    Employment Agreement between Community West Bank and Blaine C. Lauhon, dated April 1, 2024.
10.7    Employment Agreement between Community West Bank and Jeffrey M. Martin, dated April 1, 2024.
10.8    Employment Agreement between Community West Bank and A. Kenneth Ramos, dated April 1, 2024.
10.9    Employment Agreement between Community West Bank and Timothy J. Stronks, dated April 1, 2024.
99.1    Central Valley Press Release dated April 1, 2024.
Exhibit 104    Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

5


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: April 3, 2024  

Community West Bancshares

  By:  

/s/ Shannon Livingston

    Shannon Livingston
    Executive Vice President and Chief Financial Officer
EX-3.1 2 d815127dex31.htm EX-3.1 EX-3.1

Exhibit 3.1

BANK HOLDING COMPANY MERGER AGREEMENT

This BANK HOLDING COMPANY MERGER AGREEMENT (this “Merger Agreement”), is made as of March 20, 2024, by and among Central Valley Community Bancorp, a California corporation and registered bank holding company (“CVCY”) (Entity No. 2078782), and Community West Bancshares, a California corporation and registered bank holding company (“CWBC”) (Entity No. 1994567).

RECITALS

WHEREAS, CVCY and CWBC have entered into that certain Agreement and Plan of Reorganization and Merger dated as of October 10, 2023 (the “Agreement”), providing, among other things, for the merger of CWBC with and into CVCY (the “Merger”), with CVCY as the surviving corporation; and

WHEREAS, the respective Boards of Directors of CVCY and CWBC have determined that the transactions contemplated by the Agreement, including the Merger, are advisable and in the best interests of their respective corporations and shareholders, and authorized and approved the execution and delivery of this Merger Agreement by their respective officers.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and the Agreement, subject to the conditions set forth herein and the Agreement, and intending to be legally bound hereby, the parties agree as follows:

AGREEMENT

Section 1. The Merger.

(a) Effective Time. The Merger shall become effective at 12:01 a.m. on April 1, 2024 (the “Effective Time”).

(b) Effect of the Merger. At the Effective Time, CWBC shall be merged with and into CVCY in accordance with the relevant provisions of the California General Corporation Law (“CGCL”). CVCY shall be the surviving corporation (the “Surviving Corporation”) in the Merger and will continue its corporate existence under the CGCL. At the Effective Time, the separate corporate existence of CWBC shall cease. The Merger shall be governed by, and shall have the effects set forth in, the CGCL.

(c) Name of the Surviving Corporation. The name of the Surviving Corporation shall be “Community West Bancshares.” Article I of the Amended and Restated Articles of Incorporation of the Surviving Corporation is hereby amended to read as follows: “The name of this corporation is Community West Bancshares.”

 

1


Section 2. Stock.

(a) Shares of CVCY. Each share of CVCY common stock issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and unaffected by the Merger.

(b) Shares of CWBC. At the Effective Time, by virtue of the Merger, and without any action on the part of the holders of CWBC common stock, each share of CWBC common stock issued and outstanding immediately prior to the Effective Time (other than shares as to which dissenters’ rights have been perfected) shall be converted into the right to receive, subject to adjustment and proration as provided in the Agreement, 0.7900 of a share of CVCY common stock (the “Exchange Ratio”), together with any cash in lieu of fractional shares equal to the fair value of such fractional shares. Any shares of CWBC common stock held by CWBC as treasury stock or owned, directly or indirectly, by CWBC, CVCY or any of CVCY’s subsidiaries (other than those held in a fiduciary capacity or as a result of debts previously contracted) shall automatically be cancelled and retired and shall cease to exist at the Effective Time of the Merger and no consideration shall be issued in exchange therefor. At the Effective Time, the stock transfer books of CWBC will be closed and no transfer of CWBC common stock theretofore outstanding will thereafter be made. From and after the Effective Date, the holders of certificates formerly representing shares of CWBC shall cease to have any rights with respect thereto other than the rights provided herein and any dissenters’ rights they have perfected pursuant to Chapter 13 of the CGCL.

(c) Stock Options. Immediately prior to the Effective Time, CWBC shall take such actions as may be necessary such that each CWBC stock option outstanding immediately prior to the Effective Time, whether vested or unvested, shall accelerate as a result of the Merger and shall survive the Merger without cancellation and, following the Effective Time, shall represent a stock option to acquire that number of whole shares of CVCY common stock (rounded up to the nearest whole number) equal to the product of: (i) the number of shares of CWBC common stock subject to such CWBC stock option; and (ii) the Exchange Ratio, at the exercise price per share of CVCY common stock (rounded down to the nearest whole cent) equal to the quotient obtained by dividing: (A) the exercise price per share of the CWBC stock option as of immediately prior to the Effective Time; by (B) the Exchange Ratio, provided that the exercise price and the number of shares of CVCY common stock will be determined in a manner consistent with the requirements of Sections 409A or 424 of the Internal Revenue Code, as applicable. Each Assumed Option (as defined in the Agreement) will have, and be subject to, substantially the same terms and conditions of such CWBC stock option immediately prior to the Effective Time.

(d) Restricted Stock Awards. At the Effective Time, any vesting conditions applicable to each outstanding restricted stock award of CWBC common stock shall, automatically and without any action on the part of the holder thereof, accelerate in full and such restricted share award shall become free of any restrictions, any repurchase right shall lapse, and the holder thereof shall be entitled to receive the Merger Consideration (as defined in the Agreement) at the Effective Time. Any share of CWBC restricted stock will vest at the Effective Time and will be treated as any other outstanding share of CWBC common stock entitled to the Merger consideration set forth in Section 2.(b) hereof.

 

2


(e) Fractional Shares. Notwithstanding any other provision hereof, no fractional shares of CVCY common stock shall be issued to holders of CWBC common stock. In lieu thereof, each such holder otherwise entitled to a fraction of a share of CVCY common stock shall receive, at the time of surrender of the certificate or certificates representing such holder’s CWBC common stock, an amount in cash determined by multiplying the fractional share interest to which such holder would otherwise be entitled by the amount equal to the closing price of CVCY common stock reported on the NASDAQ Capital Market on the last day on which CVCY common stock is traded immediately preceding the Effective Time. No such holder shall be entitled to dividends, voting rights, interest on the value of, or any other rights in respect of, a fractional share.

Section 3. Articles of Incorporation and Bylaws.

(a) Articles of Incorporation. From and after the Effective Time, the articles of incorporation of CVCY, as in effect immediately prior to the Effective Time and as amended effective as of the Effective Time to reflect the new name of the Surviving Corporation as set forth in Section 1(c) of this Merger Agreement, shall be the articles of incorporation of the Surviving Corporation until thereafter altered, amended or repealed in accordance with their terms and applicable law.

(b) Bylaws. From and after the Effective Time, the bylaws of CVCY as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation until thereafter altered, amended or repealed in accordance with their terms and applicable law.

Section 4. Officers and Directors.

(a) Directors. Effective as of the Effective Time, the number of directors that will comprise the full CVCY board of directors shall be fifteen (15). The members of the initial board of directors of the Surviving Corporation immediately after the Effective Time shall consist of nine (9) members of the CVCY board of directors immediately prior to the Effective Time and six (6) members of the CWBC board of directors immediately prior to the Effective Time, as determined by the mutual agreement of the parties to be appointed as directors of the Surviving Corporation, to hold office from the Effective Time until their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal.

(b) Officers. The executive officers of CVCY immediately prior to the Effective Time shall be the executive officers of the Surviving Corporation, with the Chief Executive Officer of CWBC immediately prior to the Effective Time being appointed as the President of the Surviving Corporation, to hold office from the Effective Time until their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal.

Section 5. Conditions to Completion of the Merger.

Completion of the Merger as provided herein is conditioned upon the satisfaction of the conditions set forth in the Agreement, any or all of which may be waived in accordance with the terms and provisions of the Agreement.

 

3


Section 6. General Provisions.

(a) Termination. This Merger Agreement shall terminate prior to the Effective Time in the event that the Agreement is terminated as provided therein. This Merger Agreement may also be terminated by mutual written consent of the parties hereto.

(b) Amendment. This Merger Agreement may be amended by CVCY and CWBC at any time prior to the Effective Time without the approval of the shareholders of CVCY or CWBC with respect to any of its terms except any change in its principal terms, the terms relating to the form or amount of consideration to be delivered to CWBC shareholders in the Merger or as may otherwise be required by the Agreement or by law. This Merger Agreement may not be amended, except by an instrument in writing signed on behalf of each of the parties hereto.

(c) Successors and Assigns. This Merger Agreement shall be binding upon and enforceable by the parties and their respective successors and permitted assigns. This Merger Agreement may not be assigned by any party, by operation of law or otherwise, without the prior written consent of the other party.

(d) Rules of Construction. Descriptive headings as to the contents of particular sections are for convenience only and do not control or affect the meaning, construction or interpretation of this Merger Agreement. Each use herein of the plural includes the singular and vice versa, in each case as the context requires or as it is otherwise appropriate. The word “or” is used in the inclusive sense. Any and all documents or instruments referred to herein are incorporated herein by reference hereto as though fully set forth herein verbatim. If there is any conflict between the terms of this Merger Agreement and the terms of the Agreement, the terms of the Agreement are to control.

(e) Counterparts. This Merger Agreement may be executed in multiple counterparts, and may be delivered by means of facsimile or email (or any other electronic means such as “.pdf” files), each of which shall be deemed to constitute an original, but all of which together shall be deemed to constitute one and the same instrument.

(f) Governing Law. This Merger Agreement shall be governed by the laws of the State of California (without giving effect to choice of law principles thereof).

(g) Further Assurances. The parties agree that they will, at any time and from time to time after the Effective Time, upon request by the other and without further consideration, do, perform, execute, acknowledge and deliver all such further acts, deeds, assignments, assumptions, transfers, conveyances, powers of attorney, certificates and assurances as may be reasonably required in order to fully complete the transactions contemplated hereby in accordance with this Merger Agreement or to carry out and perform any undertaking made by the parties hereunder.

 

4


(h) Severability. If any provision of this Merger Agreement is held to be illegal, invalid or unenforceable under present or future laws, then (i) this Merger Agreement is to be construed and enforced as if such illegal, invalid or unenforceable provision were not a part hereof; (ii) the remaining provisions of this Merger Agreement will remain in full force and effect and will not be affected by such illegal, invalid or unenforceable provision or by its severance from this Merger Agreement; and (iii) there will be added automatically as a part of this Merger Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid and enforceable.

[Remainder of this page intentionally left blank]

 

5


IN WITNESS WHEREOF, the parties have executed this Merger Agreement as of the date first written above.

 

CENTRAL VALLEY COMMUNITY BANCORP
By:  

/s/ James J. Kim

  James J. Kim, President and CEO
By:  

/s/ Steven D. McDonald

  Steven D. McDonald, Secretary
COMMUNITY WEST BANCSHARES
By:  

/s/ Martin E. Plourd

  Martin E. Plourd, President and CEO
By:  

/s/ Houria Amirkhani

  Houria Amirkhani, Assistant Corporate Secretary


CERTIFICATE OF APPROVAL

OF

BANK HOLDING COMPANY MERGER AGREEMENT

James J. Kim and Steven D. McDonald hereby certify that:

 

1.

They are the President and Chief Executive Officer, and the Secretary, respectively, of Central Valley Community Bancorp, a California corporation (“CVCY”).

 

2.

This certificate is attached to the Bank Holding Company Merger Agreement dated as of March 20, 2024 (the “Merger Agreement”), by and among CVCY and Community West Bancshares, a California corporation (“CWBC”), which provides for the merger of CWBC into CVCY (the “Merger”).

 

3.

The Merger Agreement in the form attached hereto was duly approved by the Board of Directors of CVCY.

 

4.

CVCY has two classes of stock authorized consisting of shares of common stock and preferred stock. The total number of outstanding shares of CVCY common stock entitled to vote on the Merger was 11,818,039. No shares of CVCY preferred stock are outstanding.

 

5.

The principal terms of the Merger Agreement in the form attached hereto were duly approved by the vote of the shareholders of CVCY which equaled or exceeded the vote required.

 

6.

The percentage vote required was more than 50% of the outstanding shares of CVCY common stock which were entitled to vote on the Merger.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Date: March 20, 2024

 

/s/ James J. Kim

James J. Kim, President and CEO

/s/ Steven D. McDonald

Steven D. McDonald, Secretary


CERTIFICATE OF APPROVAL

OF

BANK HOLDING COMPANY MERGER AGREEMENT

Martin E. Plourd and Houria Amirkhani hereby certify that:

 

1.

They are the President and Chief Executive Officer, and the Assistant Corporate Secretary, respectively, of Community West Bancshares, a California corporation (“CWBC”).

 

2.

This certificate is attached to the Bank Holding Company Merger Agreement dated as of March 20, 2024 (the “Merger Agreement”), by and among CWBC and Central Valley Community Bancorp, a California corporation (“CVCY”), which provides for the merger of CWBC into CVCY (the “Merger”).

 

3.

The Merger Agreement in the form attached hereto was duly approved by the Board of Directors of CWBC.

 

4.

CWBC has two classes of stock authorized consisting of shares of common stock and preferred stock. The total number of outstanding shares of CWBC common stock entitled to vote on the Merger was 8,836,858. No shares of CWBC preferred stock are outstanding.

 

5.

The principal terms of the Merger Agreement in the form attached hereto were duly approved by the vote of the shareholders of CWBC which equaled or exceeded the vote required.

 

6.

The percentage vote required was more than 50% of the outstanding shares of CWBC common stock which were entitled to vote on the Merger.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Date: March 20, 2024

 

/s/ Martin E. Plourd

Martin E. Plourd, President and CEO

/s/ Houria Amirkhani

Houria Amirkhani, Assistant Corporate Secretary
EX-10.1 3 d815127dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between Central Valley Community Bancorp, a California bank holding company (“Bancorp”), and Martin E. Plourd, an individual (“Executive”) as of October 10, 2023.

Bancorp desires to employ Executive, and Executive desires to be employed by Bancorp, as President of Bancorp on the terms, covenants and conditions hereinafter set forth.

AGREEMENT

1. Position. Executive is hereby employed as President of Bancorp. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Chief Executive Officer of Bancorp and the Board of Directors of Bancorp (“Board”).

2. Employment Term. The term of this Agreement shall commence upon the consummation the merger of Community West Bancshares (“CWBC”) with and into Bancorp (“Effective Date’) and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one-year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than one hundred and twenty (120) days prior to the then scheduled expiration of the Employment Term.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties delegated to him by the Board and the Chief Executive Officer of Bancorp from time to time, including, without limitation, in the areas of strategic leadership, shareholder relations, employee retention, client retention, mergers and acquisitions, and community and industry association representation.

4. Extent of Services. Executive shall devote substantially all of his working time and effort to the business of Bancorp and shall not during the Employment Term be engaged in any other business activities, except that Executive may devote reasonable time to supervision of his personal investments, to activities involving professional, charitable, educational, religious and similar types of organizations, and to similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Bancorp, and are in compliance with Bancorp’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.

5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of Five Hundred Twenty-Five Thousand Dollars ($525,000), which may be increased from time to time at the discretion of the Board (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Bancorp, as in effect from time to time, and shall be prorated for any partial periods. Executive shall not participate in any incentive-based compensation plans of Bancorp, including, without limitation, Bancorp’s Senior Management Incentive Plan. Notwithstanding the foregoing, the Board may consider incentive compensation which will be specifically authorized in writing by the Board in its sole and absolute discretion.


(b) Club Membership. Bancorp agrees to maintain a corporate club membership (“Club Membership”) that is mutually agreed upon by the Board and Executive. Unless proposed otherwise by Bancorp, Bancorp shall continue to pay Executive’s monthly dues at his existing club under his existing membership. If Bancorp purchases an equity Club Membership, the Club Membership shall be owned exclusively by Bancorp and shall list Executive as Bancorp’s designee under the Club Membership. Bancorp agrees to pay the initiation fee for a Club Membership purchased by Bancorp and, all membership dues and fees charged in connection with the Club Membership, and all business-related expenses incurred by Executive in connection with his Club Membership (whether owned by Executive or Bancorp) provided that any such payments shall be subject to applicable tax withholding. Notwithstanding the foregoing, Executive shall be responsible for any taxes related to any reportable income legally attributable to Executive in connection with the Club Membership costs and expenses. Following termination of this Agreement, Bancorp shall have no obligation with respect to the Club Membership.

(c) Automobile. Executive shall continue to have exclusive use of the car (the “Auto”) owned by Community West Bank, N.A.(the “Bank”) and used by Executive as of the Effective Date. Bancorp shall pay for all expenses associated with the Auto, including gas, insurance, and maintenance. Executive acknowledges his responsibility to claim personal use of the Auto for income reporting purposes. Executive shall procure and maintain in force an automobile insurance policy on such automobile, with coverage naming Bancorp as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Bancorp with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty (20) days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Bancorp as amended from time to time.

(e) Equity-Based Compensation. The Board, within its complete discretion, may grant Executive additional equity or equity-based compensation from time to time.

(f) General Expenses. Bancorp shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Bancorp relative to senior executives, pay or reimburse Executive for any and all necessary, customary, and usual expenses incurred by him for or on behalf of Bancorp in the normal course of business. Executive agrees that if at any time any payment made to Executive by Bancorp, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities based upon legal authority that existed at the time Executive incurred the reimbursed expense, Executive shall reimburse Bancorp to the full extent of such disallowance.

 

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(g) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental, life and other welfare benefit plans of Bancorp as may be in effect from time to time with respect to senior executives employed by Bancorp. Any such benefits shall be governed by the terms and conditions of the applicable benefit plan documents.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11, 12 and 13, and Bancorp shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11, 12 and 13.

(a) Termination by Bancorp for Cause. This Agreement may be terminated for Cause by Bancorp upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Board, acting in good faith, and the exercise of its reasonable judgment, and by the vote of two-thirds of its members, excluding Executive (if applicable), that Executive has (i) willfully failed to perform or habitually and continually neglected the duties which he is required to perform hereunder and has failed to cure such willful failure or habitual neglect of duties or the effects thereof within a reasonable period after written notice to Executive by Bancorp specifying in reasonable detail the alleged failure; or (ii) willfully failed to follow any policy of Bancorp which materially and demonstrably adversely affects the condition of Bancorp; or (iii) engaged in any activity in the course and scope of Executive’s employment with Bancorp in contravention of any policy of Bancorp, statute, regulation or governmental policy which materially and demonstrably adversely affects the condition of Bancorp, or its reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) in the course and scope of Executive’s employment with Bancorp willfully refused to follow any instruction from the Board the refusal of which constitutes an unsafe and unsound banking practice; or (v) been convicted of or pleaded guilty or nolo contendere to any felony; or (vi) committed any act which would cause termination of coverage under Bancorp’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to Bancorp as a whole. For purposes of this Section, the term “Bancorp” shall include all subsidiaries of Bancorp, including, without limitation, Central Valley Community Bank. Notwithstanding the foregoing, it shall be a condition precedent to Bancorp’s right to terminate Executive’s employment for Cause that: (i) Bancorp first give Executive written notice stating with specificity the circumstances constituting Cause (the “Breach”) , and (ii) if such Breach is susceptible to cure or remedy, a period of thirty (30) days from and after the giving of such written notice is provided to allow for Executive to cure or remedy the Breach (the “Cure Period”) and Executive does not cure or remedy the Breach within the Cure Period.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Bancorp is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Financial Protection and Innovation, or by any other supervisory authority.

 

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(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), this Agreement shall not be terminated, but instead, the surviving or resulting corporation, the transferee of Bank’s or Bancorp’s assets, or Bancorp shall be bound by and shall have the benefit of the provisions of this Agreement.

ii. Notwithstanding the foregoing, in the event that, within twelve (12) months before or after a Change in Control, either (a) Executive is terminated without Cause by Bancorp or its successor, or (b) Executive terminates this Agreement and his employment with Bancorp or its successor for Good Reason (as hereinafter defined), then Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average annual total cash compensation paid to Executive by Bancorp during the most recent three (3) previous calendar years of Bancorp (“Average Annual Cash Compensation Amount”) multiplied by two. In the event Executive has been employed less than three (3) years, the Average Annual Cash Compensation Amount shall be determined by using Executive’s compensation history with Bancorp to determine the annualized compensation for purposes of this paragraph. Payment under this Section 6(c)(ii) shall be made to Executive within thirty (30) days following the date Executive’s employment terminates. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), he shall not be entitled to the payments contemplated in Section 6(d).

iii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, whether through merger, consolidation, reorganization, or otherwise acquires ownership of stock of Bancorp that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the lesser of total fair market value or total voting power of the stock of Bancorp or the surviving entity is such transaction. However, if any one person or more than one person acting as a group, is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of Bancorp, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Bancorp acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Bancorp stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Bancorp shall not be considered in determining whether there has been a Change In Control. A “Change In Control” shall be interpreted in accordance with the foregoing and the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” in accordance with the foregoing or under Code Section 409A, the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Bancorp’s Option. Notwithstanding any other provision of this Agreement, Bancorp may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Bancorp’s intent to terminate this Agreement, in which case Executive shall be entitled to the balance due on the initial two-year agreement, and the compensation and benefits described in Section 6(j) below.

 

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(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(j) below. In addition, if Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the balance due on the initial two-year agreement as described in Section 6(d). For purposes of this Agreement, the term “Good Reason” shall mean (a) a diminution in Executive’s Base Salary, (b) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from the City of Goleta, California, or (c) any other action or inaction that constitutes a material breach by Bancorp of the terms of this Agreement. Notwithstanding the foregoing, it shall be a condition precedent to Executive’s right to terminate Executive’s employment for Good Reason that: (i) Executive first give Bancorp written notice stating with specificity the circumstances constituting Good Reason (the “Good Reason Condition”) within 90 days of the Good Reason Condition first occurring, and (ii) if such Good Reason Condition is susceptible to cure or remedy, a period of thirty (30) days from and after the giving of such written notice is provided to allow for Bancorp to cure or remedy the Good Reason Condition (the “Good Reason Cure Period”) and Bancorp does not cure or remedy the Good Reason Condition within the Good Reason Cure Period.

(f) Death. In the event of Executive’s death during the Employment Term and while Executive is in the employ of Bancorp, Executive’s employment with Bancorp shall terminate and Executive’s estate shall be entitled to all death benefits provided for and payable under any and all benefit plans of Bancorp to which Executive is a party and, in the event Executive’s death occurs during the Initial Term, Executive’s estate shall be entitled to receive from Bancorp a lump sum payment within thirty (30) days after the date of death equal to the balance due on the initial two-year agreement and the compensation and benefits described in Section 6(j).

(g) Disability. In the event Executive is prevented from performing his material duties under this Agreement, with or without reasonable accommodation, for a period of at least one hundred eighty days (180) days within any consecutive twelve (12) month period commencing at any time during the Initial Period (the “Disability Period”) by reason of Executive becoming physically or mentally disabled, Executive’s employment with Bancorp shall terminate and Executive shall be entitled to a lump sum payment within thirty (30) days after the date Executive is determined to be disabled and his employment is terminated equal to the balance due on the initial two-year agreement and the compensation and benefits described in Section 6(j). For purposes of this Agreement, the term “disabled” (i) shall have the meaning set forth in Bancorp’s long-term disability plan which is in effect at the time of Executive’s disability or (ii) if Bancorp has no long term disability plan in effect at the time of Executive’s disability, then “disabled” shall mean that Executive has become or is reasonably expected to become unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment for the Disability Period. If a dispute arises between Executive and Bancorp concerning whether Executive is disabled, then Executive and Bancorp shall agree upon a competent physician to conduct an examination of Executive and the physician’s opinion as to Executive’s ability to perform Executive’s duties under this Agreement shall be final and binding upon Executive and Bancorp. Executive shall continue to receive his compensation and other benefits under this Agreement during the period from his incapacity until he is determined to be disabled and Executive’s employment is terminated.

 

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(h) Limitation of Benefits under Certain Circumstances. If it shall be determined that the aggregate payments and benefits constituting parachute payments under Code Section 280G, which, but for the operation of this provision, would become payable or distributable by Bancorp to or for the benefit of Executive, pursuant to this Agreement, any other agreement, or any benefit plan (collectively, the ‘‘Total Payments’’), would result in any excess parachute payments becoming subject to the excise tax imposed by Code Section 4999, or any successor provision thereto, or any interest or penalties with respect to such excise tax (such excise tax, together with such interest and penalties, collectively, the ‘‘Excise Tax’’), then the Total Payments shall be reduced to an amount equal to one dollar less than the maximum amount that could be paid to Executive without giving rise to any Excise Tax; provided that the reduction contemplated by this Section shall be applied only if the net after-tax benefit to Executive after such reduction would be greater than the net after-tax benefit to Executive without such reduction (notwithstanding the application of any Excise Tax on the unreduced Total Payments).

(i) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Bancorp shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Bancorp within thirty (30)] days of termination a Severance and Release Agreement, as completed by Bancorp at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than thirty (30) days following termination (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(j) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon termination of this Agreement and termination of Executive’s employment with Bancorp shall be limited to the payment of all accrued salary, vacation, reimbursable expenses for which expense reports have been provided to Bancorp in accordance with Bancorp’s policies and this Agreement, and any other compensation or benefits that may be payable to Executive under any other benefit plan arrangement, including without limitation, the acceleration of vesting of outstanding stock options and restricted stock awards under all Bancorp employee benefit plans.

(k) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of Executive). Payments to which Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Bancorp, and Bancorp has stock which is publicly traded on an established securities market or otherwise.

 

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ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) that relate to Bancorp or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by Executive while employed by Bancorp (“Work Product”) belong to Bancorp or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after Executive’s employment with Bancorp) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Bancorp is any person or entity that controls, is controlled by, or is under common control with Bancorp.

8. Disclosure of Information.

(a) Confidential Information. Bancorp has and will develop and own certain Confidential Information, which has a great value in its business. Bancorp also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Bancorp or any of its Affiliates performs services or from whom Bancorp or any of its Affiliates obtains information. Confidential Information includes information disclosed to Executive during his employment, and information developed or learned by Executive during the course of his employment. “Confidential Information” is broadly defined and includes all information that has or could have commercial value or other utility in Bancorp’s business, or the businesses of Bancorp’s customers or Affiliates of Bancorp. Confidential Information also includes all information that could be detrimental to the interests of Bancorp or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Bancorp, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

 

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(b) Protection of Confidential Information. Executive agrees that at all times during and after his employment by Bancorp, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Bancorp or its Affiliates or Customers, except for the benefit of Bancorp, or its Affiliates or Customers and in the course of his employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Bancorp and its legal counsel with immediate notice of such request so that Bancorp may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Bancorp under this Agreement. Executive will not disclose to Bancorp, or use or induce Bancorp to use, any proprietary information or trade secrets of others. Executive represents and warrants that he has returned all property and confidential information belonging to all other prior employers and other entities except the Bank and its holding company.

(d) Return of Documents and Data. In the event Executive’s employment with Bancorp is terminated (voluntarily or otherwise), Executive agrees to inform Bancorp of all documents and other data relating to his employment which is in his possession and control and to deliver promptly all such documents and data to Bancorp.

(e) Obligations Following Termination. In the event Executive’s employment with Bancorp is terminated (voluntarily or otherwise), Executive agrees that he will protect the Confidential Information of Bancorp and its Affiliates and Customers and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for his benefit, or the benefit of any third party, or to the detriment of Bancorp or its Customers. In addition, after termination of his employment with Bancorp, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Bancorp, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Bancorp while the other employee is employed by Bancorp; (iii) induce or attempt to induce any other employee of Bancorp to terminate his or her employment with Bancorp; or (iv) interfere with the business of Bancorp by inducing any other individual or entity to sever its relationship with Bancorp.

 

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(f) Relief. Executive acknowledges that breach of this Section may cause Bancorp irreparable harm for which money is inadequate compensation. Executive therefore agrees that Bancorp will be entitled to seek injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies; provided that Bancorp first obtains any and all bonds and security that may be required under applicable law to seek such relief.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, Bancorp, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that he will furnish all information and take any steps necessary to enable Bancorp to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Bancorp. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond his control or (b) due to his actions or omissions, then Bancorp shall have the option to terminate this Agreement immediately; provided, however, that Executive shall be entitled to all benefits provided for under this Agreement as if Executive was terminated without Cause, including, the Section 6(c)(ii) Change In Control benefits, as applicable.

11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Bancorp, such provisions may affect the terms of this Agreement if during its term Bancorp should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Bancorp be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Bancorp intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event shall the Company reimburse Executive for that which may be imposed on Executive as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein).

 

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Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on his behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Bancorp shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Bancorp the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Bancorp indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that has been determined by Bancorp, in good faith, after consultation with legal counsel of Bancorp and with Executive, that Executive’s fraud or intentional misconduct was a material contributing factor to the basis for the application of the Payment Restriction to the facts and the Payment Restriction requires Bancorp to seek or demand repayment or return of any payments made to Executive , including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Bancorp or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4); provided, however, that such demand by Bancorp is delivered, in writing, to Executive within 18 months after the date such payment was made to Executive.

(d) Entire Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Bancorp and contains all of the covenants and agreements among the parties with respect to such employment. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

 

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(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Bancorp, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Bancorp’s assets and business, or with or into which Bancorp may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and his heirs and personal representatives. The rights and obligations of Executive under this Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Bancorp shall indemnify Executive to the maximum extent permitted under the Bylaws of Bancorp and/or the California Corporations Code. At all times during the Employment Term of this Agreement and for not less than six (6) years after the last date that Executive is affiliated with Bancorp and/or its Affiliates, Bancorp shall obtain and maintain in full force and effect Directors and Officers Liability Insurance to indemnify and insure Bancorp and Executive from and against liability or loss arising out of Executive’s actual or asserted negligence, misfeasance or nonfeasance in the performance of his duties or out of any actual or asserted wrongful act against, or by Bancorp and/or its Affiliates including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this Section shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be given in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses of each party maintained by Bancorp, but each party may change his or its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated upon the earlier of receipt or five (5) days after mailing.

 

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(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, each party is responsible for their own fees, with the exception that if the Executive is successful on a claim based on discrimination or breach of public policy, the Bancorp shall pay all fees and cost.

12. Mediation and Arbitration of Disputes. Any disputes regarding this Agreement, the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (9) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (10) Executive Order 11246 (affirmative action); (11) the Federal Rehabilitation Act (handicap discrimination); (12) the Americans with Disabilities Act (discrimination based on disability); and any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of receipt of notice of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. Any decision or judgement of the arbitrator shall be subject to full appellate review by a court of law. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Integration. It is contemplated that the Employment and Confidentiality Agreement dated November 2, 2011 (with any amendments, “Prior Agreement”), by and among Community West Bank, National Association, CWBC and Executive, shall terminate immediately before the Effective Date. Upon the Effective Date, this Agreement supersedes the Prior Agreement for all intents and purposes.

14. Executive’s Representations. Executive represents and warrants that he is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that he is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that his execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

 

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15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all taken together shall constitute one agreement.

[signature page follows]

 

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Executed as of the date first above written at Fresno, California.

 

BANCORP:
CENTRAL VALLEY COMMUNITY BANCORP
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ Martin E. Plourd

  Martin E. Plourd

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and between Central Valley Community Bancorp, a California bank holding company (“Bancorp”), and Martin E. Plourd, an individual (the “Executive”).

RECITALS

A. Bancorp and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Executive’s employment with Bancorp has been terminated and Bancorp and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Bancorp and Executive agree that Executive’s employment with Bancorp terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that he has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Bancorp shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Bancorp within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Bancorp.

(b) Vacation Pay. Bancorp has paid Executive on his Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for his execution of this Agreement. Bancorp and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.

4. No Actions by Executive. In consideration of the promises and covenants made by Bancorp in this Agreement, Executive agrees:


(a) Filing of Actions. That he has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Bancorp. “Released Parties” mean Bancorp, the Board of Directors of Bancorp, any members of such Board of Directors in any of their capacities, including individually, and Bancorp’s present or former executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Bancorp, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes he has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees he will not file any action against the Released Parties based upon any alleged violation of these Acts. Except as otherwise provided by applicable law, Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement, or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Bancorp in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Bancorp and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that he has not been retaliated against for reporting any allegations of wrongdoing by Bancorp and Released Parties, including any allegations of corporate fraud, or for claiming a work-related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies.

 

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7. Waiver.

(a) Executive acknowledges that this Agreement applies to all known or unknown, foreseen, or unforeseen, injury or damage arising out of or pertaining to his employment relationship with Bancorp and its termination, and expressly waives any benefits he may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, he will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that he consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which he does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

(b) Notwithstanding anything in this Agreement to the contrary, Executive is not releasing claims regarding the following: (i) Executive’s right, if any, to COBRA health benefits; (ii) vested rights Executive has with respect to any benefit or equity or stock agreement or plan, including, without limitation, Bancorp’s/Bank’s 401(k) Plan; (iii) Executive’s right to indemnification for his services for Bancorp or Bank; (iv) Executive’s coverage under Bancorp’s and/or the Bank’s insurance policies, including without limitation, Directors and Officers Liability Insurance; (v) social security, unemployment, and /or state disability insurance benefits pursuant to terms of applicable law; (vi) rights Executive may have under the ADEA ( as defined below); (vii) claims for event or acts occurring after the date this Agreement is signed; (vii) workers’ compensation insurance benefits under the terms of any workers’ compensation insurance policy of Bancorp or Bank; and (viii) any other rights of claims which are not subject to waiver or are not subject to an unsupervised waiver as a matter of law.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Bancorp if Executive believes he has been discriminated against on the basis of age. Bancorp denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that he will not file any claim or action against Bancorp or any of the Released Parties based on any alleged violations of the ADEA. Notwithstanding anything in this Agreement to the contrary, Executive shall not be deemed to have waived his right to and shall not be prohibited from bringing a charge or instituting legal action for the purpose of challenging the validity or enforceability of this Agreement under the ADEA.Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under the ADEA, including but not limited to, back pay, front pay, attorneys’ fees, damages, reinstatement r injunctive relief.

 

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Executive also understands and acknowledges that the ADEA requires Bancorp to provide Executive with at least twenty-one (21) calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that he was provided with and has used the Consideration Period or, alternatively, that he elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of Daniel J. Doyle, Chairman of the Board, at Bancorp’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period. Delivery of the revocation should be via facsimile to (559) 323-3310 with a hard copy to follow via first class mail.

9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Bancorp. Bancorp specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with his spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that his obligations to Bancorp contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Bancorp’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to his breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Bancorp and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations. Nothing in this Agreement prevents Executive from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that he has reason to believe is unlawful.

 

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12. Company Property. Within five calendar days of Bancorp’s written request, after Executive’s execution of this Agreement, Executive shall return to Bancorp all Bancorp property in his possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Bancorp’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Bancorp or by any of Bancorp’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals1. . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same agreement.

 

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BANCORP:
CENTRAL VALLEY COMMUNITY BANCORP
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

  Martin E. Plourd
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I, Martin E. Plourd, hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of twenty-one (21) days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this twenty-one (21) day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

 

      AGREED AND ACCEPTED
Date: _____________      

 

Martin E. Plourd

 

A-1

EX-10.2 4 d815127dex102.htm EX-10.2 EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and among Community West Bancshares, a California bank holding company (“Bancshares”), Community West Bank, a California banking corporation (“Bank,” and together with Bancshares sometimes referred to as the “Employer”), and Shannon R. Livingston, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President & Chief Financial Officer on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President & Chief Financial Officer of Bancshares and Bank. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Bancshares Board of Directors, the Bank Board of Directors (each a “Board” and together the “Boards”) and the Chief Executive Officer of Bancshares and Bank.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Bancshares or Bank, as amended from time to time (together, the “Bylaws”), by the Boards, by any duly authorized Committee of a Board, or by the Chief Executive Officer of Employer. Subject to the control of the Boards and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of Three hundred thirty thousand dollars ($330,000), which may be increased from time to time at the discretion of Bancshares or Bank, as the case may be, in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of fifty percent (50%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,500 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President & Chief Financial Officer. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Bancshares or Bank which materially adversely affects the condition of Bancshares or Bank; or (iii) engaged in any activity in contravention of any policy of Bancshares or Bank, statute, regulation or governmental policy which materially adversely affects the condition of Bancshares or Bank, or their reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from a Board unless Executive reasonably establishes that compliance with such instruction would cause the Bancshares, Bank or Executive to violate any statute, regulation or governmental policy or policy of Bancshares or Bank; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer during the most recent three (3) previous years of Employer (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed less than three (3) years, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in cash; however, no

 

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other non-cash payments or benefits shall be included when calculating the Average Monthly Cash Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive made on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Bank that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Bank. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Bank, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Bank acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Bank stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Bank shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Bank” shall include Bancshares. A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President & Chief Financial Officer, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Fresno, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing this Section (d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

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termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Bank or Bancshares, and Bank or Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Bancshares or Bank.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

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the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. The Change of Control Agreement between Executive and Central Valley Community Bank, dated September 22, 2023 (“Change of Control Agreement”), is hereby terminated and superseded for all purposes by this Agreement. Except for benefit arrangements other than the Change of Control Agreement, this Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Without limiting the generality of the foregoing, each party acknowledges and agrees that any salary continuation agreement, stock option agreements, stock grant agreements, life insurance arraignments and all other existing benefit arrangements shall continue in full force and effect in accordance with the terms in place prior to the date of this Agreement. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

 

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(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order

 

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11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANCSHARES
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ Shannon R. Livingston

  Shannon R. Livingston, Chief Financial Officer

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and among Community West Bancshares, a California bank holding company (“Bancshares”), Community West Bank, a California banking corporation (“Bank,” and together with Bancshares sometimes referred to as the “Employer”), and _______________, an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.


4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Bancshares, Bank, the Board of Directors of Bancshares, the Board of Directors of Bank, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Bank’s present or former Executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

 

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9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

 

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15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANCSHARES
By:  

 

Its:  

 

Date:  

 

COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I, ____________, hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

      AGREED AND ACCEPTED
     

 

 Date:        

            

 

A-1

EX-10.3 5 d815127dex103.htm EX-10.3 EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and among Community West Bancshares, a California bank holding company (“Bancshares”), Community West Bank, a California banking corporation (“Bank,” and together with Bancshares sometimes referred to as the “Employer”), and Parick A. Luis, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President & Chief Credit Officer on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President & Chief Credit Officer of Bancshares and Bank. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Bancshares Board of Directors, the Bank Board of Directors (each a “Board” and together the “Boards”) and the Chief Executive Officer of Bancshares and Bank.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Bancshares or Bank, as amended from time to time (together, the “Bylaws”), by the Boards, by any duly authorized Committee of a Board, or by the Chief Executive Officer of Employer. Subject to the control of the Boards and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of Two hundred seventy-five thousand dollars ($275,000), which may be increased from time to time at the discretion of Bancshares or Bank, as the case may be, in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of thirty-five percent (35%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,000 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President & Chief Credit Officer. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Bancshares or Bank which materially adversely affects the condition of Bancshares or Bank; or (iii) engaged in any activity in contravention of any policy of Bancshares or Bank, statute, regulation or governmental policy which materially adversely affects the condition of Bancshares or Bank, or their reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from a Board unless Executive reasonably establishes that compliance with such instruction would cause the Bancshares, Bank or Executive to violate any statute, regulation or governmental policy or policy of Bancshares or Bank; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer during the most recent three (3) previous years of Employer (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed less than three (3) years, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in cash; however, no

 

3


other non-cash payments or benefits shall be included when calculating the Average Monthly Cash Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive made on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Bank that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Bank. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Bank, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Bank acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Bank stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Bank shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Bank” shall include Bancshares. A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President & Chief Credit Officer, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Fresno, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing this Section (d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

5


termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Bank or Bancshares, and Bank or Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Bancshares or Bank.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

6


the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. The Change of Control Agreement between Executive and Central Valley Community Bank, dated April 30, 2021 (“Change of Control Agreement”), is hereby terminated and superseded for all purposes by this Agreement. Except for benefit arrangements other than the Change of Control Agreement, this Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Without limiting the generality of the foregoing, each party acknowledges and agrees that any salary continuation agreement, stock option agreements, stock grant agreements, life insurance arraignments and all other existing benefit arrangements shall continue in full force and effect in accordance with the terms in place prior to the date of this Agreement. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

 

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(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order

 

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11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANCSHARES
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ Patrick A. Luis

  Patrick A. Luis, Chief Credit Officer

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and among Community West Bancshares, a California bank holding company (“Bancshares”), Community West Bank, a California banking corporation (“Bank,” and together with Bancshares sometimes referred to as the “Employer”), and _______________, an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.


4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Bancshares, Bank, the Board of Directors of Bancshares, the Board of Directors of Bank, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Bank’s present or former Executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

 

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9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

 

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15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANCSHARES
By:  

 

Its:  

 

Date:  

 

COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I, ____________, hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

      AGREED AND ACCEPTED
     

 

 Date:        

            

 

A-1

EX-10.4 6 d815127dex104.htm EX-10.4 EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between Community West Bank, a California banking corporation (“Employer”), and Dawn M. Cagle, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President and Chief Human Resources Officer on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President and Chief Human Resources Officer of Employer. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Board of Directors of Employer (“Board”), and the Chief Executive Officer of Employer.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Employer, as amended from time to time (“Bylaws”), by the Board, by any duly authorized Committee of the Board, or by the Chief Executive Officer of Employer. Subject to the control of the Board and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of Two hundred thousand dollars ($200,000), which may be increased from time to time at the discretion of Employer in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of twenty percent (20%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,500 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President and Chief Human Resources Officer. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Employer which materially adversely affects the condition of Employer; or (iii) engaged in any activity in contravention of any policy of Employer, statute, regulation or governmental policy which materially adversely affects the condition of Employer, or its reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from the Board unless Executive reasonably establishes that compliance with such instruction would cause the Employer or Executive to violate any statute, regulation or governmental policy or policy of Employer; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer during the most recent three (3) previous years of Employer (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed less than three (3) years, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in cash; however, no other non-cash payments or benefits shall be included when calculating the Average Monthly Cash

 

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Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive made on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Employer that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Employer acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Employer stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Employer shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Employer” shall include its parent Community West Bancshares (“Bancshares”). A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President and Chief Human Resources Officer, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Fresno, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing this Section (d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

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termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Employer, and Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Employer.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

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the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. The Change of Control Agreement between Executive and Central Valley Community Bank, dated April 30, 2021 (“Change of Control Agreement”), is hereby terminated and superseded for all purposes by this Agreement. Except for benefit arrangements other than the Change of Control Agreement, this Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Without limiting the generality of the foregoing, each party acknowledges and agrees that any salary continuation agreement, stock option agreements, stock grant agreements, life insurance arraignments and all other existing benefit arrangements shall continue in full force and effect in accordance with the terms in place prior to the date of this Agreement. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

 

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(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order

 

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11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ Dawn M. Cagle

  Dawn M. Cagle, Chief Human Resources Officer

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and between Community West Bank, a California banking corporation (““Employer”), and _______________, an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.

4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding


against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Employer, Community West Bancshares, a California corporation (“Bancshares”), the Board of Directors of Bancshares, the Board of Directors of Employer, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Employer’s present or former executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

 

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10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

 

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16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I, ____________, hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

      AGREED AND ACCEPTED
     

 

 Date:        

            

 

A-1

EX-10.5 7 d815127dex105.htm EX-10.5 EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between Community West Bank, a California banking corporation (“Employer”), and William F. Filippin, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President and Regional Executive on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President and Regional Executive of Employer. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Board of Directors of Employer (“Board”), and the Chief Executive Officer of Employer.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Employer, as amended from time to time (“Bylaws”), by the Board, by any duly authorized Committee of the Board, or by the Chief Executive Officer of Employer. Subject to the control of the Board and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of three hundred thirty thousand dollars ($330,000), which may be increased from time to time at the discretion of Employer in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of thirty-five percent (35%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,500 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President and Regional Executive. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Employer which materially adversely affects the condition of Employer; or (iii) engaged in any activity in contravention of any policy of Employer, statute, regulation or governmental policy which materially adversely affects the condition of Employer, or its reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from the Board unless Executive reasonably establishes that compliance with such instruction would cause the Employer or Executive to violate any statute, regulation or governmental policy or policy of Employer; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer for services performed following the Effective Date during the most recent three (3) previous years (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed by Employer less than three (3) years from the Effective Date, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer for services performed from the Effective Date to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in

 

3


cash; however, no other non-cash payments or benefits shall be included when calculating the Average Monthly Cash Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive made on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Employer that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Employer acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Employer stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Employer shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Employer” shall include its parent Community West Bancshares (“Bancshares”). A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President and Regional Executive, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Goleta, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing this Section (d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

5


termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Employer, and Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Employer.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

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the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

 

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(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order 11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of

 

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the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ William F. Filippin

  William F. Filippin, Regional Executive 

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and between Community West Bank, a California banking corporation (““Employer”), and _______________, an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.

4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding


against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Employer, Community West Bancshares, a California corporation (“Bancshares”), the Board of Directors of Bancshares, the Board of Directors of Employer, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Employer’s present or former executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

 

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10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

 

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16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I, ____________, hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

      AGREED AND ACCEPTED
     

 

 Date:        

            

 

A-1

EX-10.6 8 d815127dex106.htm EX-10.6 EX-10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between Community West Bank, a California banking corporation (“Employer”), and Blaine C. Lauhon, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President and Chief Administrative Officer on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President and Chief Administrative Officer of Employer. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Board of Directors of Employer (“Board”), and the Chief Executive Officer of Employer.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Employer, as amended from time to time (“Bylaws”), by the Board, by any duly authorized Committee of the Board, or by the Chief Executive Officer of Employer. Subject to the control of the Board and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of Two hundred eighty-five thousand dollars ($285,000), which may be increased from time to time at the discretion of Employer in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of forty-five percent (45%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,500 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President and Chief Administrative Officer. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Employer which materially adversely affects the condition of Employer; or (iii) engaged in any activity in contravention of any policy of Employer, statute, regulation or governmental policy which materially adversely affects the condition of Employer, or its reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from the Board unless Executive reasonably establishes that compliance with such instruction would cause the Employer or Executive to violate any statute, regulation or governmental policy or policy of Employer; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer during the most recent three (3) previous years of Employer (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed less than three (3) years, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in cash; however, no other non-cash payments or benefits shall be included when calculating the Average Monthly Cash

 

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Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive made on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Employer that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Employer acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Employer stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Employer shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Employer” shall include its parent Community West Bancshares (“Bancshares”). A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President and Chief Administrative Officer, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Folsom, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing this Section (d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

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termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Employer, and Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Employer.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

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the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. The Change of Control Agreement between Executive and Central Valley Community Bank, dated April 30, 2021 (“Change of Control Agreement”), is hereby terminated and superseded for all purposes by this Agreement. Except for benefit arrangements other than the Change of Control Agreement, this Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Without limiting the generality of the foregoing, each party acknowledges and agrees that any salary continuation agreement, stock option agreements, stock grant agreements, life insurance arraignments and all other existing benefit arrangements shall continue in full force and effect in accordance with the terms in place prior to the date of this Agreement. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

 

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(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order

 

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11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ Blaine C. Lauhon

  Blaine C. Lauhon, Chief Administrative Officer

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and between Community West Bank, a California banking corporation (““Employer”), and      , an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.

4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding


against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Employer, Community West Bancshares, a California corporation (“Bancshares”), the Board of Directors of Bancshares, the Board of Directors of Employer, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Employer’s present or former executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

 

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10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

 

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16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I,      , hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

    AGREED AND ACCEPTED  
   

 

 

 Date:        

            

 

A-1

EX-10.7 9 d815127dex107.htm EX-10.7 EX-10.7

Exhibit 10.7

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between Community West Bank, a California banking corporation (“Employer”), and Jeff M. Martin, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President and Chief Banking Officer on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President and Chief Banking Officer of Employer. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Board of Directors of Employer (“Board”), and the Chief Executive Officer of Employer.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Employer, as amended from time to time (“Bylaws”), by the Board, by any duly authorized Committee of the Board, or by the Chief Executive Officer of Employer. Subject to the control of the Board and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of Two hundred eighty-five thousand dollars ($285,000), which may be increased from time to time at the discretion of Employer in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of forty-five percent (45%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,500 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President and Chief Banking Officer. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Employer which materially adversely affects the condition of Employer; or (iii) engaged in any activity in contravention of any policy of Employer, statute, regulation or governmental policy which materially adversely affects the condition of Employer, or its reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from the Board unless Executive reasonably establishes that compliance with such instruction would cause the Employer or Executive to violate any statute, regulation or governmental policy or policy of Employer; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer during the most recent three (3) previous years of Employer (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed less than three (3) years, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in cash; however, no other non-cash payments or benefits shall be included when calculating the Average Monthly Cash

 

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Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive made on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Employer that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Employer acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Employer stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Employer shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Employer” shall include its parent Community West Bancshares (“Bancshares”). A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President and Chief Banking Officer, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Sacramento, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing this Section (d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

5


termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Employer, and Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Employer.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

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the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. The Change of Control Agreement between Executive and Central Valley Community Bank, dated June 3, 2022 (“Change of Control Agreement”), is hereby terminated and superseded for all purposes by this Agreement. Except for benefit arrangements other than the Change of Control Agreement, this Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Without limiting the generality of the foregoing, each party acknowledges and agrees that any salary continuation agreement, stock option agreements, stock grant agreements, life insurance arraignments and all other existing benefit arrangements shall continue in full force and effect in accordance with the terms in place prior to the date of this Agreement. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

 

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(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order

 

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11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ Jeff M. Martin

  Jeff M. Martin, Chief Banking Officer

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and between Community West Bank, a California banking corporation (““Employer”), and      , an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.

4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding


against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Employer, Community West Bancshares, a California corporation (“Bancshares”), the Board of Directors of Bancshares, the Board of Directors of Employer, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Employer’s present or former executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

 

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10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

 

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16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I,      , hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

    AGREED AND ACCEPTED  
   

 

 

 Date:        

            

 

A-1

EX-10.8 10 d815127dex108.htm EX-10.8 EX-10.8

Exhibit 10.8

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between Community West Bank, a California banking corporation (“Employer”), and A. Kenneth Ramos, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President and Regional Executive on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President and Regional Executive of Employer. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Board of Directors of Employer (“Board”), and the Chief Executive Officer of Employer.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Employer, as amended from time to time (“Bylaws”), by the Board, by any duly authorized Committee of the Board, or by the Chief Executive Officer of Employer. Subject to the control of the Board and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of Two hundred fifty thousand dollars ($250,000), which may be increased from time to time at the discretion of Employer in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of thirty-five percent (35%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,500 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President and Regional Executive. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Employer which materially adversely affects the condition of Employer; or (iii) engaged in any activity in contravention of any policy of Employer, statute, regulation or governmental policy which materially adversely affects the condition of Employer, or its reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from the Board unless Executive reasonably establishes that compliance with such instruction would cause the Employer or Executive to violate any statute, regulation or governmental policy or policy of Employer; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer during the most recent three (3) previous years of Employer (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed less than three (3) years, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in cash; however, no other non-cash payments or benefits shall be included when calculating the Average Monthly Cash

 

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Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive made on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Employer that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Employer acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Employer stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Employer shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Employer” shall include its parent Community West Bancshares (“Bancshares”). A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President and Regional Executive, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Fresno, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing this Section (d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

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termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Employer, and Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Employer.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

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the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. The Change of Control Agreement between Executive and Central Valley Community Bank, dated June 3, 2022 (“Change of Control Agreement”), is hereby terminated and superseded for all purposes by this Agreement. Except for benefit arrangements other than the Change of Control Agreement, this Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Without limiting the generality of the foregoing, each party acknowledges and agrees that any salary continuation agreement, stock option agreements, stock grant agreements, life insurance arraignments and all other existing benefit arrangements shall continue in full force and effect in accordance with the terms in place prior to the date of this Agreement. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

 

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(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order

 

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11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ A. Kenneth Ramos

  A. Kenneth Ramos, Regional Executive

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and between Community West Bank, a California banking corporation (““Employer”), and _______________, an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.

4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding


against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Employer, Community West Bancshares, a California corporation (“Bancshares”), the Board of Directors of Bancshares, the Board of Directors of Employer, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Employer’s present or former executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

 

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10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

 

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16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

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ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I, ____________, hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

      AGREED AND ACCEPTED
     

 

 Date:        

            

 

A-1

EX-10.9 11 d815127dex109.htm EX-10.9 EX-10.9

Exhibit 10.9

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between Community West Bank, a California banking corporation (“Employer”), and Timothy J. Stronks, an individual (the “Executive”) as of April 1, 2024 (the “Effective Date”).

Employer desires to employ Executive, and Executive desires to be employed by Employer, as Executive Vice President and Chief Risk Officer on the terms, covenants and conditions hereinafter set forth:

AGREEMENT

1. Position. Executive is hereby employed as Executive Vice President and Chief Risk Officer of Employer. In this capacity, Executive shall have such duties and responsibilities as may be designated by the Board of Directors of Employer (“Board”), and the Chief Executive Officer of Employer.

2. Employment Term. The term of this Agreement shall commence on the Effective Date and continue through the second anniversary of the Effective Date (“Initial Term”), subject, however, to prior termination as set forth in Section 6 of this Agreement. At the end of the Initial Term, this Agreement shall renew automatically for additional consecutive one year periods (the Initial Term plus any such additional periods sometimes referred to as the “Employment Term”) unless either party furnishes the other party with written notice (“Nonrenewal Notice”) of its intention not to renew by no later than sixty (60) days prior to the then scheduled expiration of the Employment Term. Any Nonrenewal Notice given without Cause (as hereinafter defined) by Employer to Executive shall be treated as an early termination without Cause for purposes of Section 6(d) of this Agreement.

3. Executive Duties. Upon the Effective Date, Executive is hereby vested with such powers and duties as are designated by the Bylaws of Employer, as amended from time to time (“Bylaws”), by the Board, by any duly authorized Committee of the Board, or by the Chief Executive Officer of Employer. Subject to the control of the Board and the Chief Executive Officer, Executive shall have the authority set forth in Employer’s job description for Executive’s position, as may be amended from time-to-time by Employer. Executive shall report to the Chief Executive Officer.

4. Extent of Services. Executive shall devote substantially all of Executive’s time and effort to the business of Employer and shall not, during the Employment Term, be engaged in any other business activities, except Executive’s personal investments, activities involving professional, charitable, educational, religious and similar types of organizations, and similar activities, to the extent that such activities do not interfere with the performance of Executive’s duties under this Agreement, or conflict in any way with the business or interests of Employer, and are in compliance with Employer’s policies and procedures in effect from time to time applicable to employees with respect to actual or potential conflicts of interest.


5. Compensation and Benefits.

(a) Salary. Executive shall receive an annual salary of two hundred ninety thousand dollars ($290,000), which may be increased from time to time at the discretion of Employer in accordance with usual and customary practice (“Base Salary”). Executive’s Base Salary shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, and shall be prorated for any partial periods.

(b) Senior Management Incentive Plan. Executive shall be eligible to receive an annual incentive bonus under the Employer’s Senior Management Incentive Plan, as amended from time to time (the “Senior Management Incentive Plan”). The Senior Management Incentive Plan generally provides for an annual incentive bonus with a target amount of thirty percent (30%) of Base Salary for Executive’s position, based on Executive reaching certain subjective and objective goals, which bonus is payable in a lump sum not later than March 15th of the calendar year following the end of the year for which the bonus is earned. It is the intent of the parties to reduce the specific goals as established by the Boards to writing within 45 days of the Effective Date and by February 15th of each year thereafter.

(c) Automobile Allowance. Employer shall provide Executive with either (i) a company automobile (“Company Vehicle”), or (ii) an automobile allowance of $1,500 per month to cover Executive’s cost of an automobile (“Executive Vehicle”), subject to change from time-to-time within the reasonable discretion of the Chief Executive Officer. The automobile shall be approved by the Chief Executive Officer as being suitable for the Executive Vice President and Chief Risk Officer. Subject to reimbursement under Section 5(e) below, if applicable, Executive shall be responsible for paying all operation expenses of any nature whatsoever with regard to the automobile. Executive shall furnish Employer adequate records and other documentary evidence required by Employer. Executive shall also procure and maintain in force an automobile insurance policy on such automobile at Executive’s own expense, with coverage naming Employer as an additional insured with the minimum coverage of $1 million combined single limit of liability (including any umbrella insurance coverage maintained by Executive). Executive shall provide Employer with copy of the insurance policy.

(d) Vacation. Executive shall accrue twenty days of paid vacation per year. Such vacation leave shall accrue on a pro-rata monthly basis and shall be subject to the terms and provisions of the vacation policy of Employer as amended from time to time.

(e) General Expenses. Employer shall, upon submission and approval of written statements and bills in accordance with the regular procedures of Employer relative to senior executives, pay or reimburse Executive for any and all necessary, customary and usual expenses incurred by him while traveling for or on behalf of Employer and for any and all other necessary, customary or usual expenses incurred by Executive for or on behalf of Employer in the normal course of business. Executive agrees that, if at any time any payment made to Executive by Employer, whether for salary or whether as auto expense or business expense reimbursement, shall be disallowed in whole or in part as a deductible expense by the appropriate taxing authorities, Executive shall reimburse Employer to the full extent of such disallowance.

 

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(f) Other Benefits. During the Employment Term, Executive shall be eligible to participate, subject to the terms thereof, in all retirement benefit plans, and all medical, dental and other welfare benefit plans of Employer as may be in effect from time to time with respect to senior executives employed by Employer.

6. Termination. This Agreement may be terminated during the Employment Term in accordance with this Section 6. In the event of such termination, Executive shall be released from all obligations under this Agreement, except that Executive shall remain subject to Sections 7, 8, 11(a), 11(c), 11(f), 11(m), 12 and 13, and Employer shall be released from all obligations under this Agreement, except as otherwise provided in this Section and Sections 11(f), 11(m), 12 and 13.

(a) Termination by Employer for Cause. This Agreement may be terminated for Cause by Employer upon written notice, and Executive shall not be entitled to receive compensation or other benefits for any period after termination for Cause, except as otherwise required by applicable law or the terms of the applicable benefit plan or agreement. For purposes of this Agreement, “Cause” shall mean the determination by the Chief Executive Officer, acting in good faith, that Executive has (i) willfully failed to perform or habitually neglected the duties which Executive is required to perform hereunder; or (ii) willfully failed to follow any policy of Employer which materially adversely affects the condition of Employer; or (iii) engaged in any activity in contravention of any policy of Employer, statute, regulation or governmental policy which materially adversely affects the condition of Employer, or its reputation in the community, or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties; or (iv) willfully refused to follow any instruction from the Board unless Executive reasonably establishes that compliance with such instruction would cause the Employer or Executive to violate any statute, regulation or governmental policy or policy of Employer; or (v) been convicted of or pleaded guilty or nolo contendere to any felony, or (vi) committed any act which would cause termination of coverage under the Employer’s Bankers Blanket Bond as to Executive, as distinguished from termination of coverage as to the Employer as a whole.

(b) Automatic Termination Upon Closure or Take-Over. This Agreement shall terminate automatically if Employer is closed or taken over by the Federal Deposit Insurance Corporation, the California Department of Business Oversight, or by any other supervisory authority.

(c) Change In Control.

i. In the event of a Change in Control (as hereinafter defined), Executive shall be entitled to severance as follows: Executive shall be paid a lump sum payment equal to the average monthly total cash compensation paid to Executive by Employer for services performed following the Effective Date during the most recent three (3) previous years (“Average Monthly Cash Compensation Amount”) multiplied by eighteen (18). In the event Executive has been employed by Employer less than three (3) years from the Effective Date, the Average Monthly Cash Compensation Amount shall be determined by using Executive’s compensation history with Employer for services performed from the Effective Date to determine the monthly compensation formula for purposes of this paragraph. When calculating the Average Monthly Cash Compensation Amount, any annual incentive bonus payments that were issued in the form of stock pursuant to the Senior Management Incentive Plan shall be treated as if they were paid in

 

3


cash; however, no other non-cash payments or benefits shall be included when calculating the Average Monthly Cash Compensation Amount. Payment under this Section 6(c)(ii) shall be made to the Executive on or prior to the effective date of the Change of Control. In the event that Executive qualifies for the payment contemplated by this Section 6(c)(ii), Executive shall not be entitled to the payments contemplated in Section 6(f).

ii. For purposes of this Agreement, a “Change In Control” shall be deemed to have occurred on the date that any one person, or more than one person acting as a group, acquires, directly or indirectly, ownership of stock of Employer that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer. However, if any one person or more than one person acting as a group, is considered to own, directly or indirectly, more than fifty percent (50%) of the total fair market value or total voting power of the stock of Employer, the acquisition of additional stock by the same person or persons will not be considered to cause a Change In Control. Further, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which Employer acquires its stock in exchange for property will not be considered to cause a Change In Control. Transfers of Employer stock on account of death, gift, transfers between family members or transfers to a qualified retirement plan maintained by Employer shall not be considered in determining whether there has been a Change In Control. For purposes of defining the term “Change In Control,” the term “Employer” shall include its parent Community West Bancshares (“Bancshares”). A “Change In Control” shall be interpreted in accordance with the definition of “Change in Ownership” under Code Section 409A, and to the extent that an event or series of events does not constitute a “Change in Ownership” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder (“Code Section 409”), the event or series of events will not constitute a “Change In Control” under this Agreement.

(d) Early Termination Without Cause at Employer’s Option. Notwithstanding any other provision of this Agreement, Employer may terminate this Agreement early at any time and without Cause by giving Executive thirty (30) days’ written notice of Employer’s intent to terminate this Agreement, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Employer terminates this Agreement without Cause during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below.

(e) Termination by Executive for Good Reason. Executive may terminate this Agreement for Good Reason, in which case Executive shall be entitled to the compensation and benefits described in Section 6(i) below. In addition, if the Executive terminates this Agreement for Good Reason during the Initial Term, and Section 6(c)(ii) is not applicable, Executive shall be entitled to receive the additional severance described in Section 6(f) below. For purposes of this Agreement, the term “Good Reason” shall mean actions taken by the Employer resulting in one of the following events within six months prior to the termination of Executive’s employment: (a) a material diminution of Executive’s authority, duties or responsibilities as Executive Vice President and Chief Risk Officer, (b) a material diminution in Executive’s Base Salary, and/or (c) a material change in the geographic location of the office from which Executive must perform services to a location that is at least thirty (30) miles from Goleta, California.

 

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(f) Additional Severance If Applicable. If, during the Employment Term, the Employer terminates this Agreement without Cause or Executive terminates this Agreement for Good Reason, and provided Section 6(c)(ii) is not applicable, Executive shall be entitled to receive monthly severance payments for up to 12 months. Each monthly severance payment shall be equal to the Average Monthly Cash Compensation Amount. Such monthly severance payments shall be paid in periodic installments in accordance with the general payroll practices of Employer, as in effect from time to time, commencing on the first month following Executive’s termination and continuing for 12 months, or if earlier, until Executive obtains other comparable employment. The term “comparable employment” shall mean any employment in which Executive’s compensation (measured by any cash or non-cash payments or benefits) is comparable to Executive’s compensation under this Agreement. Any compensation comparison undertaken for the purposes of this Agreement shall be done without regard to any vested or unvested stock options or shares of restricted stock granted to Executive. For purposes of implementing subsection (6)(d), Executive agrees to furnish Employer with prompt written notice describing any subsequent employment Executive secures (including Executive’s compensation for such employment) following any termination under this Section.

(g) Limitation of Benefits under Certain Circumstances. Notwithstanding any other provision of this Agreement, if all or a portion of any benefit or payment under this Section 6, alone or together with any other compensation or benefit, will be a non-deductible expense to the Employer by reason of Code Section 280G, the Employer shall reduce the benefits and payments payable under this Section 6 as necessary to avoid the application of Section 280G. The Employer shall have the power to reduce benefits and payments under this Section 6 to zero, if necessary. The determination of any reduction in the payments and benefits to be made pursuant to Section 6 shall be based upon the opinion of independent counsel selected by Employer and paid by Employer. Such counsel shall be reasonably acceptable to Executive; shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the date of termination; and may use such actuaries or other consultants as such counsel deems necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified in Section 6 below zero.

(h) Severance and Release Agreement. The severance payments contemplated under this Section 6 are sometimes referred to in this Agreement as “Severance Payments.” Notwithstanding anything in this Agreement to the contrary, Employer shall have no obligation to make any Severance Payments unless Executive shall sign and deliver to Employer prior to a Change in Control or within thirty (30) days of termination, as the case may be, a Severance and Release Agreement, as completed by Employer at time of termination, in substantially the form attached hereto as Exhibit A, and provided that such Severance and Release Agreement becomes effective and irrevocable no later than the date of the Change in Control or sixty (60) days following termination, as applicable (the “Release Deadline”). If the Severance and Release Agreement does not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to the Severance Payments.

(i) Benefits Payable at Termination. Unless otherwise specifically stated in this Agreement or required by law, the compensation and benefits payable to Executive upon

 

5


termination of this Agreement and termination of Executive’s employment with Employer shall be limited to the payment of all accrued salary, vacation, and reimbursable expenses for which expense reports have been provided to Employer in accordance with Employer’s policies and this Agreement.

(j) Delay in Payment for Specified Employees. Notwithstanding anything to the contrary, if Executive is a Specified Employee as of the date of termination of employment, payments under this Agreement upon termination of employment may not be made before the date that is six months after termination of employment (or, if earlier than the end of the six-month period, the date of death of the Executive). Payments to which the Executive would otherwise be entitled during the first six months following termination of employment shall be accumulated and paid on the first day of the seventh month following termination of employment.

i. Executive shall be deemed to be a “Specified Employee” if, as of the date of Executive’s termination of employment, Executive is a Key Employee of Employer, and Bancshares has stock which is publicly traded on an established securities market or otherwise.

ii. If Executive meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding Section 416(i)(5)) at any time during a twelve month period ending on December 31 (the “Specified Employee Identification Date”), then Executive shall be treated as a Key Employee for the entire twelve month period beginning on the following April 1. Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Code Section 409A.

7. Work Product. Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to Employer or its Affiliates (as hereafter defined), research and development or existing or future products or services and which are conceived, developed or made by the Executive while employed by Employer (“Work Product”) belong to Employer or such Affiliates (as applicable). Executive shall promptly disclose such Work Product to the Boards and perform all actions reasonably requested by a Board (whether during or after the Executive’s employment with Employer) to establish and confirm such ownership (including, without limitation, executing assignments, consents, power of attorney and other instruments). For purposes of the Agreement, an “Affiliate” of Employer is any person or entity that controls, is controlled by, or is under common control with Employer.

8. Disclosure of Information.

(a) Confidential Information. Employer has and will develop and own certain Confidential Information, which has a great value in its business. Employer also has and will have access to Confidential Information of its customers. “Customers” shall mean any persons or entities for whom Employer performs services or from whom Employer obtains information. Confidential Information includes information disclosed to Executive during the course of Executive’s employment, and information developed or learned by Executive during the course of Executive’s employment. “Confidential Information” is broadly defined and includes all information which has or could have commercial value or other utility in Employer’s business or

 

6


the businesses of Employer’s customers or Affiliates of Employer. Confidential Information also includes all information which could be detrimental to the interests of Employer or its Affiliates or Customers if it were disclosed. By example and without limitation, Confidential Information includes all information concerning loan information, Customer data, including but not limited to Customer and supplier identities, Customer characteristics or agreements and Customer lists, applicant data, employment categories, job classifications, employment histories, job analyses and validations, preferences, credit history, agreements, and any personally identifiable information related to Customers, or Customer’s employees, customers or clients, including names, addresses, phone numbers, account numbers and social security numbers; any information provided to Executive by a Customer, including but not limited to electronic information, documents, software, and trade secrets; historical sales information; advertising and marketing materials and strategies; financial information related to Employer, Customers, Affiliates, Customer’s or Affiliate’s employees or any other party; labor relations strategies; research and development strategies and results, including new materials research; pending projects and proposals; production processes; scientific or technological data, formulae and prototypes; employee data, including but not limited to any personally identifiable information related to employees, and co-workers, their spouse-partner and/or family members such as names, addresses, phone numbers, account numbers, social security numbers, employment history, credit information, and the compensation of co-workers; anything contained in another employee’s personnel file; individually identifiable health information of other employees, and co-workers, their spouse-partner and/or family members, Customers, or any other party, including but not limited to any information related to a physical or mental health condition, the provision of health care, the payment of health care, or any information received from a health care provider, health care plan or related entity; pricing and product information; computer data information; products; supplier information and data; testing techniques; processes; formulas; trade secrets; inventions; discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending projects and proposals; business plans; computer processes; computer programs and codes; technological data; strategies; forecasts; budgets; and projections.

(b) Protection of Confidential Information. Executive agrees that at all times during and after Executive’s employment by Employer, Executive will keep confidential and not disclose to any third party or make any use of the Confidential Information of Employer or its Affiliates or Customers, except for the benefit of Employer, or its Affiliates or Customers and in the course of Executive’s employment. In the event Executive is required by law to disclose such information described in this Section 8, Executive will provide Employer and its legal counsel with immediate notice of such request so that Employer may consider seeking a protective order.

(c) No Prior Commitments. Executive has no other agreements, relationships, or commitments to any other person or entity that would conflict with Executive’s obligations to Employer under this Agreement. Executive will not disclose to Employer, or use or induce Employer to use, any proprietary information or trade secrets of others. Executive represents and warrants that Executive has returned all property and confidential information belonging to all other prior Employers and other entities.

(d) Return of Documents and Data. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data relating to Executive’s employment which is in Executive’s possession and control and to deliver promptly all such documents and data to Employer.

 

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(e) Obligations Following Termination. In the event Executive’s employment with Employer is terminated (voluntarily or otherwise), Executive agrees that Executive will protect the Confidential Information of Employer and its Affiliates and Customers, and will prevent their misappropriation or disclosure. Executive will not disclose or use any Confidential Information for Executive’s benefit, or the benefit of any third party, or to the detriment of Employer or its Customers. In addition, after termination of Executive’s employment with Employer, Executive will not, either directly or indirectly for a period of one (1) year after termination of employment, (i) solicit, recruit or attempt to recruit any officer of Employer, (ii) advise or recommend to any other person that such other person employ or attempt to employ any other employee of Employer while the other employee is employed by Employer; (iii) induce or attempt to induce any other employee of Employer to terminate Executive’s employment with Employer; or (iv) interfere with the business of Employer by inducing any other individual or entity to sever its relationship with Employer.

(f) Relief. Executive acknowledges that breach of this Section may cause Employer irreparable harm for which money is inadequate compensation. Executive therefore agrees that Employer will be entitled to injunctive relief to enforce this Section and this Agreement, in addition to damages and other available remedies, and Executive consents to such injunctive relief. In addition to any other rights and remedies Employer may have against Executive, any material violation of this Section 8 shall result in the forfeiture of any Severance compensation payable by Employer to Executive under this Agreement to the fullest extent permitted by law, including, without limitation, any Severance Payments to which Executive would otherwise be entitled upon termination of employment with Employer, including, without limitation, under Section 6.

(g) Survival. The terms and provisions of this Section 8 shall survive the expiration or termination of this Agreement for all intents and purposes.

9. Non-Competition by Executive. During the Employment Term, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any competing banking business; provided, however, Executive shall not be restricted by this Section from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers so long as such investment does not exceed one percent (1%) of the market value of the outstanding securities of such corporation.

10. Surety Bond. Executive agrees that Executive will furnish all information and take any steps necessary to enable Employer to obtain or maintain a fidelity bond conditional on the rendering of a true account by Executive of all monies, goods or other property which may come into the custody, charge or possession of Executive during the Employment Term. The surety company issuing the bond and the amount of the bond are to be paid by Employer. If Executive cannot qualify for a surety bond at any time during the Employment Term for any reason that is (a) not beyond Executive’s control or (b) due to Executive’s actions or omissions, then Employer shall have the option to terminate this Agreement immediately.

 

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11. General. This Agreement is further governed by the following provisions:

(a) Regulatory Compliance. This Agreement is drawn to be effective in the State of California and shall be construed in accordance with California laws, except to the extent superseded by federal law. The parties specifically acknowledge that while the restrictions contained in Section 131 of the Federal Deposit Insurance Corporation Improvement Act of 1991, relating to the payment of bonuses and increases for senior executive officers of institutions which are deemed “undercapitalized,” do not currently apply to Employer, such provisions may affect the terms of this Agreement if during its term Employer should be deemed undercapitalized by any state or federal regulatory authority (including, without limitation, the Federal Deposit Insurance Company and the Federal Reserve Board). Without limiting the generality of the foregoing, under no circumstances shall Employer be required to make any payments to Executive or take any other actions under this Agreement if such payments or actions would result in any violation of applicable law, rule, regulation or regulatory directive.

(b) Code Section 409A. Employer intends for all payments and benefits under this Agreement to comply with or be exempt from the requirements of Code Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Code Section 409A. For purposes of Section 6, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein). Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Any amount that Executive is entitled to be reimbursed or to have paid on Executive’s behalf under this Agreement that would constitute nonqualified deferred compensation subject to Code Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect Executive’s right to reimbursement of any such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, promptly, but not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit. Employer shall have no liability to Executive or any related party with respect to any taxes, penalties, interest or other costs or expenses Executive or any related party may incur with respect to or as a result of Code Section 409A or for damages for failing to comply with Code Section 409A.

(c) Clawback. Notwithstanding any provisions of this Agreement to the contrary, if any Payment Restrictions (as hereinafter defined) require the recapture or “clawback” of any payments made to Executive under this Agreement, Executive shall repay to Employer the aggregate amount of any such payments, with such repayment to occur no later than thirty (30) days following Executive’s receipt of a written notice from Employer indicating that payments received by Executive under this Agreement are subject to recapture or clawback pursuant to the Payment Restrictions. “Payment Restrictions” means any applicable state or federal statute, law, regulation, or regulatory interpretation or other guidance, or contractual arrangement with or required by a governmental authority that would require Employer to seek or demand repayment or return of any payments made to Executive for any reason, including, without limitation, FIL-66-02010 and any related or successor regulatory guidance, any regulatory or enforcement interpretations or guidance provided by the Securities Exchange Commission or other regulatory

 

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body under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Employer or its successors later obtaining information indicating that Executive has committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a) (4).

(d) Entire Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by Employer and contains all of the covenants and agreements among the parties with respect to such employment. Any modification, waiver or amendment of this Agreement will be effective only if it is in writing and signed by the party to be charged.

(e) Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(f) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

(g) Binding Effect of Agreement. This Agreement shall inure to the benefit of and be binding upon Employer, its successors and assigns, including without limitation, any person, partnership or corporation which may acquire all or substantially all of Employer’s assets and business, or with or into which Employer may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. The provisions of this Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives. The rights and obligations of Executive under Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to commutation, encumbrance or the claims of Executive’s creditors, and any attempt to do any of the foregoing shall be void.

(h) Indemnification. Employer shall indemnify Executive to the maximum extent permitted under the Bylaws and the California Corporations Code. If available at reasonable rates, Employer shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure Employer and Executive from and against liability or loss arising out of Executive’s actual or asserted misfeasance or nonfeasance in the good faith performance of Executive’s duties or out of any actual or asserted wrongful act against, or by Employer including, but not limited to, judgments, fines, settlements and expenses incurred in the defense of actions, proceedings and appeals therefrom. The provisions of this paragraph shall inure to the benefit of Executive’s estate, executor, administrator, heirs, legatees or devisees.

(i) Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

 

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(j) Heading. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

(k) Notices. Any notices to be given hereunder by one party to the other shall be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses indicated at the end of this Agreement, but each party may change its address by notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing.

(l) Calendar Days—Close of Business. Unless the context otherwise requires, all periods ending on a given day or date or upon the lapse of a period of days shall end on the close of the business on that day or date, and references to “days” shall be understood to refer to calendar days.

(m) Attorneys’ Fees and Costs. If any action at law or in equity, or any arbitration proceeding, is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Executive or it may be entitled.

(n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. This Agreement may be executed by a party’s signature transmitted by facsimile or electronic portable document format (.pdf), and copies of this Agreement so executed and delivered shall have the same force and effect as originals.

12. Mediation and Arbitration of Disputes. Any disputes regarding the employment relationship or its termination for whatever reason or events occurring during the employment relationship shall be subject to mediation followed by binding arbitration, to the extent permitted by law, pursuant to the employment dispute resolution rules and regulations of the American Arbitration Association. This includes any rights or claims the Executive may have under (1) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) Section 1981 of the Civil Rights Act of 1866 (discrimination); (3) the Age Discrimination in Employment Act (age discrimination)’ (4) the Equal Pay Act (equal pay); (5) the California Fair Employment and Housing Act (discrimination, including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (6) the California Labor Code (wages, benefits and other matters); (7) the Fair Labor Standards Act (wage and hour matters); (8) the Consolidated Omnibus Budget Reconciliation Act (insurance matters); (9) Executive Order 11246 (affirmative action); (10) the Federal Rehabilitation Act (handicap discrimination); (11) the Americans with Disabilities Act (discrimination based on disability); and (12) any other federal, state or local laws or regulations regarding employment discrimination.

Any request for arbitration must be made in writing within 365 calendar days of the occurrence-giving rise to the dispute. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable to the claim or claims asserted. It is the parties’ intention that the arbitrator’s decision shall not be subject to judicial review except for fraud or similar misconduct or unless an error appears on the face of

 

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the award, or the award causes substantial injustice. Unless the arbitrator orders otherwise (after taking into consideration Section 11(m) hereof), each party shall be responsible for compensating their attorneys and witnesses and bearing any other costs incurred by them. THE PARTIES ACKNOWLEDGE AND AGREE THEY ARE WAIVING THEIR RIGHT TO A COURT TRIAL OR A JURY TRIAL.

13. Executive’s Representations. Executive represents and warrants that Executive is free to enter into this Agreement and to perform each of the terms and covenants in it. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into or performing this Agreement, and that Executive’s execution and performance of this Agreement is not a violation or a breach of any other agreement between Executive and any other person or entity.

Executed as of the date first above written at Fresno, California.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

/s/ James J. Kim

  James J. Kim, Chief Executive Officer
EXECUTIVE:
By:  

/s/ Timothy J. Stronks

  Timothy J. Stronks, Chief Risk Officer

 

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EXHIBIT A

SEVERANCE AND RELEASE AGREEMENT

This Severance and Release Agreement (“Agreement”) is made by and between Community West Bank, a California banking corporation (““Employer”), and _______________, an individual (the “Executive”).

RECITALS

A. Employer and Executive are parties to that certain Employment Agreement, dated [INSERT DATE] (“Employment Agreement”).

B. Employer and Executive wish to enter into this Agreement pursuant to Section 6(h) of the Employment Agreement.

For and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Termination of Employment. Employer and Executive agree that Executive’s employment with Employer terminated on [INSERT DATE] (“Termination Date”). Executive acknowledges that Executive has been paid all wages and other sums due to him within the time frames required by law.

2. Compensation.

(a) Severance. Employer shall pay Executive severance pay in the amount of [INSERT AMOUNT], less statutory wage deductions, if and only if an original of this Agreement, duly executed by Executive, is delivered to Employer within thirty (30) days following the Termination Date. This amount shall be paid within thirty (30) days of timely delivery of an original of this Agreement, duly executed by Executive, to Employer.

(b) Vacation Pay. Employer has paid Executive on Executive’s Termination Date all accrued but unused vacation.

3. Sufficiency of Consideration. Executive acknowledges that the severance provided under Section 2(a) is a special benefit provided to him in return for Executive’s execution of this Agreement. Employer and Executive specifically agree that the consideration provided to Executive pursuant to Section 2(a) is good and sufficient consideration for this Agreement.

4. No Actions by Executive. In consideration of the promises and covenants made by Employer in this Agreement Executive agrees:

(a) Filing of Actions. That Executive has not filed and will refrain from filing, either on his own or from participating with any third party in filing, any action or proceeding


against any Released Parties (as defined in this Section) with any administrative agency, board, or court relating to the termination of Executive’s employment, or any acts related to Executive’s employment with Employer. “Released Parties” mean Employer, Community West Bancshares, a California corporation (“Bancshares”), the Board of Directors of Bancshares, the Board of Directors of Employer, any members of such Boards of Directors in any of their capacities, including individually, and Bancshares’s and Employer’s present or former executives, officers, directors, agents or affiliates.

(b) Dismissal. If any agency, board or court assumes jurisdiction of any action against the Released Parties arising out of the termination of Executive’s employment or any acts related to Executive’s employment with Employer, Executive will direct that agency, board or court to withdraw or dismiss the matter, with prejudice, and will execute any necessary paperwork to effect the withdrawal or dismissal, with prejudice.

(c) Discrimination. Executive acknowledges that Title VII of the Civil Rights Act of 1964, and as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended, section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Family Medical Leave Act, the California Family Rights Act and the California Fair Employment and Housing Act provide Executive the right to bring action against the Released Parties if Executive believes Executive has been discriminated against on the basis of race, age, ancestry, color, religion, sex, sexual orientation, medical condition, national origin, marital status, genetic information, veteran status, or physical or mental disability. Executive understands the rights afforded to Executive under these Acts and agrees Executive will not file any action against the Released Parties based upon any alleged violation of these Acts. Executive irrevocably and unconditionally waives any rights to assert a claim for relief available under these Acts, or any other state or federal laws related to employment discrimination, against the Released Parties including, but not limited to, present or future wages, mental or emotional distress, attorney’s fees, reinstatement or injunctive relief.

5. Compromise and Settlement. Executive, in consideration of the promises and covenants made by Employer in this Agreement, hereby compromises, settles and releases the Released Parties from any and all past, present, or future claims, demands, obligations or causes of action, whether based on tort, contract, or other theories of recovery arising from the employment relationship between Employer and Executive, and the termination of the employment relationship. Such claims include those Executive may have or has against the Released Parties. This Release does not apply to claims Executive may bring seeking workers’ compensation benefits under California Labor Code section 3600, et seg., but does apply to claims under California Labor Code sections 132a and 4553.

6. No Retaliation. Executive further agrees that Executive has not been retaliated against for reporting any allegations of wrongdoing by Employer and Released Parties, including any allegations of corporate fraud, or for claiming a work related injury or filing any workers’ compensation claim. The Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an investigation proceeding of any federal, state or local governmental agency. To the extent permitted by law, Executive agrees that if such an administrative claim is made, Executive shall not be entitled to recover any individual monetary relief or other individual remedies

 

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7. Waiver. Executive acknowledges that this Agreement applies to all known or reasonably foreseeable injury or damage arising out of or pertaining to Executive’s employment relationship with Employer and its termination, and expressly waives any benefits Executive may have under Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

Executive understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Executive should eventually suffer injury arising out of or pertaining to the employment relationship and its termination, Executive will not be able to make any claim against any of the Released Parties for those injuries. Furthermore, Executive acknowledges that Executive consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which Executive does not know exist and which, if known, would materially affect Executive’s decision to execute this Agreement, regardless of whether Executive’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

8. Waiver of Rights Under the Age Discrimination in Employment Act. Executive understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Executive the right to bring a claim against Employer if Executive believes Executive has been discriminated against on the basis of age. Employer denies any such discrimination. Executive understands the rights afforded to him under the ADEA and agrees that Executive will not file any claim or action against Employer or any of the Released Parties based on any alleged violations of the ADEA. Executive hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorneys fees, damages, reinstatement or injunctive relief.

Executive also understands and acknowledges that the ADEA requires Employer to provide Executive with at least [twenty-one (21) or forty-five (45) as applicable]calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Executive acknowledges that Executive was provided with and has used the Consideration Period or, alternatively, that Executive elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Executive also understands that Executive is entitled to revoke this Agreement at any time during the seven (7) days following Executive’s execution of this Agreement (“Revocation Period”). Executive also understands that any revocation of this Agreement must be in writing and delivered to the attention of James J. Kim, Chief Executive Officer, at Employer’s headquarters located at 7100 North Financial Drive, Suite 101, Fresno, California 93720 prior to the expiration of the revocation period.

9. No Admission of Liability. Executive acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Executive by Employer. Employer specifically asserts that all actions taken with regard to Executive were proper and lawful and affirmatively denies any wrongdoing of any kind.

 

3


10. Continuing Obligations. Executive agrees to keep the terms and amount of this Agreement completely confidential, except that Executive may discuss this Agreement with Executive’s spouse, attorney, accountant, or other professional person who may assist Executive in evaluating or reviewing this Agreement or the tax implications of this Agreement provided that any such other person is advised of the confidential nature of such information and agrees to maintain such information in confidence. Executive acknowledges and agrees that Executive’s obligations to Employer contained in Section 8 of the Employment Agreement continue after the Termination Date. Any violation of Section 8 of the Employment Agreement will constitute a material breach of this Agreement and Employer’s obligation to pay severance under Section 2 of this Agreement shall immediately cease following any such violation. The parties agree that any sums received by Executive pursuant to Section 2 of this Agreement prior to Executive’s breach of the Employment Agreement shall constitute sufficient consideration to support the releases given by Executive in Section 4 of this Agreement.

11. Non-Disparagement. Employer and Executive agree that neither will utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the other party or that damages the other party’s reputation. Executive also agrees not to utter, publish or otherwise disseminate any oral or written statement that disparages or criticizes the Released Parties, or that damages the Released Parties’ reputations.

12. Company Property. Promptly (but in no event more than five days) following Executive’s execution of this Agreement, Executive shall return to Employer all Employer property in Executive’s possession including, but not limited to, the original and all copies of any written, recorded, or computer-readable information about Employer’s practices, contracts, Executives, trade secrets, customer lists, procedures, or operations, cellular telephone, computer, keys, access materials, credit cards and company identification.

13. Representation by Attorney. Executive acknowledges that Executive has carefully read this Agreement; that Executive understands its final and binding effect; that Executive has been advised to consult with an attorney; that Executive has been given the opportunity to be represented by independent counsel in reviewing and executing this Agreement and that Executive has either chosen to be represented by counsel or has voluntarily declined such representation; and that Executive understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

14. No Reliance Upon Representation. Executive hereby represents and acknowledges that in executing this Agreement, Executive does not rely and has not relied upon any representation or statement made by Employer or by any of Employer’s past or present officers, directors, Executives, agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. Dispute Resolution. Each party shall bear its own attorney’s fees in the preparation and review of this Agreement. Should a dispute arise between the parties to enforce any provision of this Agreement, the parties agree to submit the dispute to binding arbitration pursuant to Section 12 of the Employment Agreement.

 

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16. Entire Agreement, Modification. This Agreement contains the entire Agreement between the parties hereto and supersedes all prior oral and/or written agreements if any. The terms of this release are contractual and not a mere recital. This Agreement may be modified only by the further written agreement of the parties.

17. Severability. If any part of this Agreement is determined to be illegal, invalid or unenforceable, the remaining parts shall not be affected thereby and the illegal, unenforceable or invalid part shall be deemed not to be part of this Agreement. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

18. Governing Law. Any action to enforce this Agreement or any dispute concerning the terms and conditions of this Agreement and the parties’ performance of the terms and conditions of this Agreement shall be governed by the laws of the State of California.

19. Counterpart Originals. This Agreement may be signed in counterparts.

 

EMPLOYER:
COMMUNITY WEST BANK
By:  

 

Its:  

 

Date:  

 

EXECUTIVE:
By:  

 

        
Date:  

 

 

5


ATTACHMENT “A”

WAIVER OF CONSIDERATION PERIOD

I, ____________, hereby acknowledge the following:

1. I have entered into that certain Severance and Release Agreement (“Agreement”) effective as of [INSERT DATE].

2. I understand that I have the right under the Age Discrimination in Employment Act to consider the Agreement for a period of [twenty-one (21) or forty-five (45) as applicable] days prior to signing the Agreement. I acknowledge that I have had a reasonable amount of time to consider the Agreement and hereby waive the remainder of this [twenty-one (21) or forty-five (45) as applicable] day period to consider the Agreement.

3. I understand that I have the right under the Age Discrimination in Employment Act to revoke the Agreement within seven (7) days of my signing the Agreement.

4. I understand that I have the right to consult, and have been advised to consult, with an attorney concerning my rights enumerated herein, and I understand the consequences of waiving those rights.

 

      AGREED AND ACCEPTED
     

 

 Date:        

            

 

A-1

EX-99.1 12 d815127dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

CENTRAL VALLEY COMMUNITY BANCORP COMPLETES COMMUNITY WEST BANCSHARES

MERGER, ADOPTS NAME, ANNOUNCES BOARD AND EXECUTIVE REORGANIZATION

Fresno, CA…April 1, 2024…The Board of Directors of Central Valley Community Bancorp (Central Valley), the parent company of Central Valley Community Bank (CVCB), headquartered in Fresno, California, announced today the successful completion of the merger with Community West Bancshares (Community West), the parent company of Community West Bank (the Bank), headquartered in Goleta, California, effective April 1, 2024. Community West Bancshares merged with and into Central Valley Community Bancorp, and Community West Bank merged with and into Central Valley Community Bank, creating a combined company in an all-stock merger transaction.

Community West shareholders receive 0.79 shares of Central Valley common stock for each share of Community West common stock, while Central Valley assumes Community West’s outstanding stock options. Based on the March 28, 2024 closing price of Central Valley’s common stock of $19.89 per share, the value of the merger consideration is approximately $143 million.

As of the close of the transaction, the resulting company, with total assets of approximately $3.5 billion, retains the banking offices of both banks, adding Community West Bank’s seven full-service Banking Centers on the Central Coast to Central Valley Community Bank’s 20 full-service Banking Centers located throughout the Greater Sacramento and San Joaquin Valley regions. Central Valley Community Bancorp assumes the name Community West Bancshares and its NASDAQ ticker symbol (CWBC), and Central Valley Community Bank assumes the name Community West Bank to reflect the combined company’s expanded territory. The resulting company’s Board of Directors consists of 15 directors: nine from Central Valley and six from Community West.

The Community West merger is the sixth for the resulting company, which previously acquired Folsom Lake Bank (2017), Sierra Vista Bank (2016), Visalia Community Bank (2013), Service 1st Bank (2008) and Bank of Madera County (2005).

James J. Kim is the CEO of the combined company and President and CEO of the Bank. Daniel J. Doyle is the Chairman of the Board of the resulting company, serving with Robert H. Bartlein, Vice Chairman, and Martin E. Plourd, President and Director. The Board also welcomes the addition of Suzanne M. Chadwick, Thomas L. Dobyns, James W. Lokey and Kirk B. Stovesand. Retiring from the Central Valley Board of Directors effective April 1, 2024, are Gary D. Gall, Karen A. Musson and Louis C. McMurray, who has been named Director Emeritus.

“Our combined company represents decades of unwavering commitment to our communities,” said Doyle. “We are grateful for the steadfast stewardship of our retiring directors, and we are honored to welcome new directors whose strengths enhance our Board’s leadership.”

 

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Merger Completion – Page 2

 

Joining the Bank’s Executive Management Team via the merger are two well-respected industry executives: William “Bill” F. Filippin, Executive Vice President (EVP) and Regional Executive for the Coast region, and T. Joseph Stronks, EVP and Chief Risk Officer. Teresa Gilio, EVP and Chief Administrative Officer, will retire after 15 years with the Bank, effective October 1, 2024. She will lead the systems integration expected to be completed mid-August 2024.

To provide focused leadership in strategic areas of the expanded Bank, several members of existing executive management will reorganize. These include: Blaine C. Lauhon who will serve as EVP and Chief Administrative Officer, Jeffrey M. Martin who will serve as EVP and Chief Banking Officer and A. Ken Ramos who will serve as EVP and Regional Executive for the Greater Sacramento and San Joaquin Valley regions. Shannon Livingston, EVP and Chief Financial Officer, Patrick A. Luis, EVP and Chief Credit Officer, and Dawn Cagle, EVP and Chief Human Resources Officer, will continue in their current executive roles and leadership positions.

“On behalf of our Board and the entire team, we thank Teresa Gilio for her leadership and unwavering dedication,” said Kim. “The success of our growing Bank is driven by our dedicated banking professionals and guided by our seasoned Executive Management Team, which shares unparalleled commitment to our clients and community.”

About Community West Bancshares and Bank

Community West Bancshares (the ”Company”) (NASDAQ: CWBC) and its wholly owned subsidiary, Community West Bank (the “Bank”), are headquartered in Fresno, California. The Company was established in 1979 with the vision to help businesses and communities by exceeding expectations at every opportunity, and opened its first Banking Center on January 10, 1980. Today, the Bank operates 27 full-service Banking Centers throughout Central California from Sacramento in the north, throughout the San Joaquin Valley and west to the Coast.

Members of the Community West Bancshares and Community West Bank Board of Directors are: Daniel J. Doyle (Chairman), Robert H. Bartlein (Vice Chairman), James J. Kim (CEO) of the Company and (President and CEO) of the Bank, Martin E. Plourd (President) of the Company and (Director) of the Bank, Suzanne M. Chadwick, Daniel N. Cunningham, Tom L. Dobyns, F. T. “Tommy” Elliott IV, Robert J. Flautt, James W. Lokey, Andriana D. Majarian, Steven D. McDonald, Dorothea D. Silva, William S. Smittcamp and Kirk B. Stovesand. Louis C. McMurray is Director Emeritus.

More information about Community West Bancshares and Community West Bank can be found at www.cvcb.com. Also, follow the Company on LinkedIn, X and Facebook.

###

 

– more –


Merger Completion – Page 3

 

Investor Contact    Media Contact
Shannon Livingston    Debbie Nalchajian-Cohen
Community West Bank,    P: 559.222.1322 or C: 559.281.1312
Formerly named Central Valley Community Bank   
P: 916.235.4617   

ATTACHMENTS

New logo reveal: Community West Bancshares and Community West Bank

Forward-Looking Statements – This press release contains certain forward-looking information about Central Valley, Community West and the combined company after the close of the merger and is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks, uncertainties and contingencies, many of which are difficult to predict and are generally beyond the control of Central Valley, Community West and the combined company. Central Valley and Community West caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. In addition to factors previously disclosed in reports filed by Central Valley and Community West with the SEC, risks and uncertainties for each institution and the combined institution include, but are not limited to, the expected business expansion may be less successful than projected; the integration of each party’s management, personnel and operations may not be successfully achieved or may be materially delayed or may be more costly or difficult than expected; deposit attrition, customer or employee loss and/or revenue loss as a result of the announcement of the proposed merger, and expenses related to the proposed merger may be greater than expected; and other risk factors described in documents filed by Central Valley and Community West with the SEC. All forward-looking statements included in this press release are based on information available at the time of this press release. We are under no obligation to, and expressly disclaim any such obligation to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.