Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made this 1st day
of July, 2006, by and between CHINO COMMERCIAL BANK, N.A. (the
“Bank”), having its offices at 14345 Pipeline Avenue,
Chino, California 91710, and DANN H. BOWMAN
(“Executive”), whose residence address is
[***].
WHEREAS, the Bank is a national
banking association, with power to own property and carry on its
business as it is now being conducted;
WHEREAS, the Bank desires to avail
itself of the skill, knowledge and experience of Executive in order
to insure the successful management of its business; and
WHEREAS, the parties hereto desire
to specify the terms and conditions of Executive’s employment
by the Bank;
NOW, THEREFORE, in consideration of
the mutual covenants hereinafter set forth, and intending to be
legally bound, it is agreed that from and after July 1, 2003 (the
“Effective Date”), the following terms and conditions
shall apply to Executive’s said employment:
A. TERM OF
EMPLOYMENT
1. Term
. The Bank hereby employs Executive and Executive hereby
accepts employment with the Bank for the period of three (3) years
(the “Term”) commencing with the Effective Date,
subject, however, to prior termination of this Agreement, as
hereinafter provided. Where used herein, “Term “ shall
refer to the entire period of employment of Executive by The Bank
hereunder, whether for the period provided above, or whether
terminated earlier as hereinafter provided.
B. DUTIES
OF EXECUTIVE
1.
Duties. Executive shall perform the
duties of President and Chief Executive Officer of the Bank,
subject to the powers by law vested in the Board of Directors of
the Bank and in the Bank’s shareholders. During the Term,
Executive shall perform exclusively the services herein
contemplated to be performed by Executive faithfully, diligently
and to the best of Executive’s ability, consistent with the
highest and best standards of the banking industry and in
compliance with all applicable laws and the Bank’s Articles
of Association and Bylaws.
2. Conflicts
of Interest. Except as permitted by the
prior written consent of the Board of Directors of the Bank,
Executive shall devote Executive’s entire productive time,
ability and attention to the business of the Bank during the Term
and Executive shall not directly or indirectly render any services
to any other person, firm or corporation, whether for compensation
or otherwise, which are in conflict with the Bank’s
interests. Notwithstanding the foregoing, Executive may make
investments of a passive nature in any business or venture,
provided however, that such business or venture is neither in
competition, directly or indirectly, in any manner with the Bank
nor a customer of the Bank.
[***] Certain information on this
page has been redacted.
C.
COMPENSATION
1. Salary
. For Executive’s services hereunder,
the Bank shall pay or cause to be paid as annual base salary to
Executive: One-Hundred, Sixty-Thousand, Dollars ($160,000)
for the first year of the Term, commencing July 1, 2006 and
continuing through June 30, 2007; One-Hundred, Sixty-Eight
Thousand, Dollars ($168,000) for the second year of the Term,
commencing July 1, 2007 and continuing through June 30, 2008; and
One-Hundred, Seventy-Six Thousand, Four-Hundred Dollars ($176,400)
for the year of the Term, commencing July 1, 2008 and continuing
through June 30, 2009. Said salary shall be payable in equal
installments in conformity with the Bank’s normal payroll
practice.
2. Bonuses.
(a) Incentive Bonus
Compensation Executive shall receive annual
incentive bonus compensation equal to five percent (5.0%) of the
net income (after Federal and State income taxes) of the Bank for
each fiscal year during the Term. For purposes of this Paragraph
C.2(a), net income shall be determined based upon the Bank’s
audited annual financial statements and such bonus shall be payable
to Executive upon certification of such financial statements by the
Bank’s independent accountants.
(b ) Discretionary Bonuses.
In addition, Executive may receive such bonuses, if any, as
the Board of Directors in its sole discretion shall
determine.
D.
EXECUTIVE BENEFITS
1. Vacation .
Executive shall be entitled to up to four (4) weeks of vacation for
each remaining year of the Term, which vacation shall be taken at
such times as are agreed upon by Executive and the Board of
Directors; provided, however, that during each year of the Term,
Executive is required to, and shall take at least two (2)
weeks” of said vacation (the “Mandatory
Vacation”), which shall be taken consecutively. Accrual for
unused vacation time shall be determined in accordance with the
Bank’s Personnel Policy as if in effect from time to
time.
2. Automobile. Commencing on
the Effective Date and during the entire Term hereunder, the Bank
shall pay to Executive an automobile allowance of Six Hundred
Dollars ($600) per month.
3. Group Medical and Life
Insurance Benefits. The Bank, at its expense,
shall provide for Executive medical, dental, accident and health,
and income continuation insurance benefits (including disability)
benefits in accordance with the Bank’s Personnel Policy as in
effect from time to time, except that in any event, Executive shall
be provided with term life insurance benefits of at least $500,000.
Said coverage shall be in existence or shall take effect as of the
Effective Date hereof and shall continue throughout the Term.
Executive shall be the individual owner of such life insurance
policy with all associated benefits. The Bank’s liability to
Executive for any breach of this Paragraph D.3 shall be limited to
the amount of premiums payable by the Bank to obtain the coverage
contemplated herein. Said coverage shall be in existence or shall
take effect as of the Effective Date and shall continue throughout
the Term.
2
4. .Stock Option.
No additional stock options are included in this
contract renewal over and above any options which may have been
previously awarded.
E.
REIMBURSEMENT FOR BUSINESS EXPENSES
Executive shall be entitled to
reimbursement by the Bank for ordinary and necessary business
expenses (the general nature of which shall be established by the
Board of Directors) incurred by Executive in the performance of
Executive’s duties when acting for the Bank during the Term,
provided that:
1. Each such expenditure is of a
nature qualifying it as a proper deduction on the Federal and State
income tax returns of the Bank as a business expense and not as
compensation to Executive; and
2. Executive furnishes to the Bank
adequate records and other documentary evidence required by Federal
and State statutes and regulations issued by the appropriate taxing
authorities for the substantiation of such expenditures as
deductible business expenses of the Bank and not as compensation to
Executive.
F.
TERMINATION
1. Termination for Cause.
The Bank may terminate this agreement at any rime
without further obligation or liability to Executive, by action of
the Board of Directors, if Executive: (a) fails to perform or
habitually neglects the duties which he is required to perform
hereunder; (b) engages in illegal activity which materially
adversely affects the Bank’s reputation in the community or
which evidences the lack of Executive’s fitness or ability to
perform Executive’s duties as determined by the Board of
Directors in good faith; (c) engages in the use or possession of
any controlled substance or in chronic abuse of alcoholic
beverages; (d) exhibits personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform his stated duties, or willful
violation of any law, rule, regulation (other than traffic
violations or similar offenses) or final cease-and-desist order; or
(e) commits any act which would cause termination of coverage under
the Bank’s Bankers’ Blanket Bond as to Executive (as
distinguished from termination of coverage as to the Bank as a
whole). Such termination shall not prejudice any remedy which the
Bank may have at law, in equity, or under this Agreement. The Bank
may also terminate this Agreement without further obligation or
liability to Executive in the event that the Bank is not licensed
to do business, does not receive a Certificate of Authority to
commence the business of banking from the Office of the Comptroller
of the Currency or fails to obtain insurance of accounts from the
Federal Deposit Insurance Corporation for any reason. Termination
pursuant to this Paragraph F.1 shall become effective immediately
upon notice to Executive of termination from the Bank.
2. Death Or Disability.
In the event of Executive’s death, or if
Executive
