Exhibit 10.1
SUPERVISORY AGREEMENT
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This Supervisory Agreement (Agreement) is made and effective this 24th day
of April 2009 (Effective Date), by and through the Board of Directors (Board) of
▇▇▇▇▇▇▇▇▇▇ West Financial Group, Inc., Solvang, California, OTS Docket No.
H-2621 (Holding Company), the holding company for Los Padres Bank, OTS Docket
No. 07935 (the Association), and the Office of Thrift Supervision (OTS), acting
by and through its Regional Director for the Western Region (Regional Director).
WHEREAS, based on its Report of Examination of the Holding Company issued
November 12, 2008, the OTS finds that the Holding Company has engaged in acts
and practices that are unsafe and unsound; and
WHEREAS, OTS is the primary federal regulator of the Holding Company
pursuant to the Home Owners' Loan Act (HOLA), 12 USC ▇▇.▇▇. 1461 et seq., and is
the Holding Company's appropriate Federal banking agency for purposes of the
Federal Deposit Insurance Act (FDIA), 12 USC ▇▇.▇▇. 1811 et seq.; and
WHEREAS, in furtherance of their common goal to ensure that the Holding
Company continues to address the unsafe and unsound acts and practices and
weaknesses and deficiencies identified by OTS, the Holding Company and OTS have
mutually agreed to enter into this Agreement; and
WHEREAS, on April 23rd 2009, the Holding Company's Board, at a duly
constituted meeting adopted a resolution (Board Resolution) that authorizes the
Holding Company to enter into this Agreement and directs compliance by the
Holding Company and its directors, officers, employees, and other
institution-affiliated parties with each and every provision of this Agreement.
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NOW THEREFORE, in consideration of the above premises, it is agreed as
follows:
Capital Plan
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1. Within thirty (30) days, the Holding Company shall submit to OTS for
review and approval a detailed capital plan to attain and maintain minimum
capital levels at the Association of: (a) Tier 1 Core Capital of six percent
(6%) and Total Risk Based Capital of eleven percent (11%) by June 30, 2009; and
(b) Tier 1 Core Capital of seven percent (7%) and Total Risk Based Capital of
twelve percent (12%) by September 30, 2009.
Capital Distributions
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2. Effective immediately, the Holding Company shall not declare, make, or
pay any dividends (on any class of stock) or other capital distributions, as
that term is defined in 12 CFR ss. 563.141, or redeem any capital stock without
receiving the prior written non-objection of OTS. The Holding Company's written
request for such non-objection shall be submitted to OTS at least thirty (30)
days prior to the anticipated date of the proposed dividend payment or capital
distribution.
Debt Limitations/Restrictions
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3. Effective immediately, the Holding Company shall not incur, issue,
renew, repurchase, or rollover any debt, increase any current lines of credit,
or guarantee the debt of any entity without receiving the prior written
non-objection of OTS. The Holding Company's written request for such
non-objection shall be submitted to OTS at least thirty (30) days prior to the
anticipated date of any such proposed action.
Notice of Change of Director or Senior Executive Officer
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4. Effective immediately, the Holding Company is required to notify the OTS
of the proposed addition of any individual to its board of directors or the
employment of any individual as a senior executive officer or changing of
responsibilities of any senior executive officer at least thirty (30) days
before such addition or employment or change becomes effective, as required by
12 CFR ss. 563.560(a)(1)(ii) and 12 USC ss. 1831i.
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Restrictions on Golden Parachute Payments
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5. Effective immediately, the Holding Company shall not make any golden
parachute payment(1) or prohibited indemnification payment(2) unless, with
respect to each such payment, the Holding Company has complied with the
requirements of 12 CFR Part 359.
Effective Date
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6. This Agreement is effective on the Effective Date as shown on the first
page.
Duration
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7. This Agreement shall remain in effect until terminated, modified or
suspended, by written notice of such action by OTS, acting by and through its
authorized representatives.
Time Calculations
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8. Calculation of time limitations for compliance with the terms of this
Agreement run from the Effective Date and shall be based on calendar days,
unless otherwise noted.
9. The Regional Director, or an OTS authorized representative, may extend
any of the deadlines set forth in the provisions of this Agreement upon written
request by the Holding Company that includes reasons in support for any
extension. Any OTS extension shall be made in writing.
Submissions and Notices
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10. All submissions, including progress reports, to OTS that are required
by or contemplated by the Agreement shall be submitted within the specified
timeframes.
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(1) The term "golden parachute payment" is defined at 12 CFR ss. 359.1(f).
(2) The term "prohibited indemnification payment" is defined at 12 CFR ss.
359.1(l).
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11. Except as otherwise provided herein, all submissions, requests,
communications, consents or other documents relating to this Agreement shall be
in writing and sent by first-class U.S. mail (or by reputable overnight carrier,
electronic facsimile transmission or hand delivery by messenger) addressed as
follows:
A. To OTS:
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▇.▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
With a Copy To:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Assistant Director
Office of Thrift Supervision, Western Region
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
B. To the Holding Company: Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇ West Financial Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
No Violations Authorized
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12. Nothing in this Agreement shall be construed as allowing the Holding
Company, its Board, officers or employees to violate any law, rule, or
regulation.
OTS Authority Not Affected
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13. Nothing in this Agreement shall inhibit, estop, bar or otherwise
prevent OTS from taking any other action affecting the Holding Company if at any
time OTS deems it appropriate to do so to fulfill the responsibilities placed
upon OTS by law.
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Other Governmental Actions Not Affected
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14. The Holding Company acknowledges and agrees that its execution of the
Agreement is solely for the purpose of resolving the matters addressed herein,
and does not otherwise release, discharge, compromise, settle, dismiss, resolve,
or in any way affect any actions, charges against, or liability of the Holding
Company that arise pursuant to this action or otherwise, and that may be or have
been brought by any governmental entity other than OTS.
Miscellaneous
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15. The laws of the United States of America shall govern the construction
and validity of this Agreement.
16. If any provision of this Agreement is ruled to be invalid, illegal, or
unenforceable by the decision of any Court of competent jurisdiction, the
validity, legality, and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby, unless the Regional Director in
his or her sole discretion determines otherwise.
17. All references to OTS in this Agreement shall also mean any of the
OTS's predecessors, successors, and assigns.
18. The section and paragraph headings in this Agreement are for
convenience only and shall ot affect the interpretation of this Agreement.
19. The terms of this Agreement represent the final agreement of the
parties with respect to the subject matters thereof, and constitute the sole
agreement of the parties with respect to such subject matters.
Enforceability of Agreement
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20. This Agreement is a "written agreement" entered into with an agency
within the meaning and for the purposes of Section 8 of the FDIA, 12 USC ss.
1818.
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Signature of Directors/Board Resolution
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21. Each Director signing this Agreement attests that he or she voted in
favor of a Board Resolution authorizing the consent of the Holding Company to
the issuance and execution of the Agreement. A copy of the Board Resolution
authorizing execution of this Agreement shall be delivered to OTS, along with
the executed original(s) of this Agreement.
WHEREFORE, OTS, acting by and through its Regional Director, and the Board
of the Holding Company, hereby execute this Agreement.
▇▇▇▇▇▇▇▇▇▇ West Financial Group, Inc. OFFICE OF THRIFT SUPERVISION
Solvang, California
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman ▇▇▇▇▇ ▇▇▇▇, Deputy Regional
Director Western Region
Date: See Effective Date on
page 1
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇, Director
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇, Director
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Director
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Director
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Director
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