EXHIBIT 99.7
AMERICAN RIVER BANKSHARES
SALARY CONTINUATION AGREEMENT (Restated)
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THIS SALARY CONTINUATION AGREEMENT (this "Agreement") is made and
entered into this ____ day of __________, 2006, by and between American River
Bankshares, a California corporation and bank holding company registered under
the Bank Holding Company Act of 1956, as amended, with its main office in Rancho
Cordova, California ("ARB") and Xxxxx X. Xxxxx (the "Executive"). This Agreement
is a restatement of the Agreement entered into between ARB and the Executive on
August 22, 2003 and is intended to be modified as necessary to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the "Code").
WHEREAS, ARB is the parent bank holding company for subsidiaries which
at the date of this Agreement include American River Bank, including is
divisions, Bank of Xxxxxx, a division of American River Bank and North Coast
Bank, a division of American River Bank and American River Financial (together,
"Subsidiaries");
WHEREAS, the Executive has contributed substantially to the success of
ARB and its Subsidiaries, and ARB desires that the Executive continue in its
employ;
WHEREAS, to encourage the Executive to remain an employee of ARB, it is
willing to provide salary continuation benefits to the Executive, which ARB will
pay from its general assets;
WHEREAS, none of the conditions or events included in the definition of
the term "golden parachute payment" that is set forth in ss.18(k)(4)(A) of the
Federal Deposit Insurance Act [12 U.S.C. ss.1828(k)(4)(A)] exists or, to the
best knowledge of ARB, is contemplated by this Agreement insofar as ARB is
concerned;
WHEREAS, ARB and its Board of Directors have consulted with and have
been advised by representatives of Xxxxx-Xxxxxxxxx Corporation regarding
compliance with applicable requirements of banking regulatory agencies having
jurisdiction over ARB and its Subsidiaries pertaining to this Agreement
including ARB's acquisition, ownership, control and title to and all rights and
benefits under one or more policies of insurance that ARB may elect to purchase
in connection with this Agreement, including, without limitation, Bulletin
2000-23 issued by the Office of the Comptroller of the Currency and
pronouncements by the Board of Governors of the Federal Reserve System and the
Federal Deposit Insurance Corporation related thereto;
WHEREAS, it is the intent of the parties hereto that this Agreement be
considered an unfunded arrangement maintained primarily to provide supplemental
retirement benefits for the Executive, and to be considered a nonqualified
benefit plan for purposes of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"); and
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WHEREAS, the Executive is fully advised of ARB's financial status and
the fact that the Executive has no interest in or rights under any insurance
policies ARB may elect to purchase in connection with this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Executive and ARB hereby agree as follows:
Article 1
Definitions
The following words and phrases used in this Agreement have the
meanings specified:
1.1 "Accrual Balance" means the amount required to be accrued by
ARB as required under generally accepted accounting principles to account for
benefits that may become payable to the Executive under this Agreement.
1.2 "Change in Control" means, with respect to the Executive, the
occurrence of a "Change in Control Event" described in Section 1.2.1 with
respect to a corporation that is a "Service Recipient" as defined in Section
1.2.4. The term "Change in Control" as defined in this Section 1.2 is intended
to comply with all relevant provisions of Proposed Treasury Regulation Section
1.409A-3(g)(5) relating to changes in the ownership or effective control of a
corporation and changes in the ownership of a substantial portion of the assets
of a corporation.
1.2.1 A "Change in Control Event" occurs on the date any of the
following events occur:
(a) Any one person, or more than one person acting as a
group ("Person"), acquires ownership of stock of a
corporation that, together with stock previously held
by such Person, raises the total ownership from less
than 50 percent of the total fair market value or
total voting power of such corporation to more than
50 percent of such value or power.
(b) Any Person acquires, during the 12-month period
ending on the date of the most recent acquisition,
ownership of 35 percent or more of the total voting
power of the stock of a corporation, without regard
to the stock owned by the Person before the
commencement of the 12-month period.
(c) A majority of the members of a corporation's board of
directors is replaced in a 12-month period by
directors who were not endorsed by a majority of the
board prior to the election or appointment of each
director.
(d) Any Person acquires, during the 12-month period
ending on the date of the most recent acquisition,
assets from a corporation with a gross fair market
value equal to or more than 40 percent of the total
gross fair market value of all the assets of such
corporation prior to such acquisition or
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acquisitions. Gross fair market value shall be
determined without regard to any liabilities
associated with the assets. However, this subsection
(d) shall not apply to the transfer of assets: (i) to
an entity that is controlled by the shareholders of
such corporation immediately after the transfer; (ii)
to a shareholder of such corporation with respect to
the shareholder's stock or in exchange for more
stock; (iii) to an entity of which such corporation
owns 50 percent or more of the total value or voting
power immediately after the transaction; (iv) to a
Person that owns, directly or indirectly, 50 percent
or more of the total value or voting power of all the
outstanding stock of such corporation immediately
following the transaction; or (v) to an entity, at
least 50 percent of the total value or voting power
of which is owned immediately following the
transaction, directly or indirectly, by a Person
which owns directly or indirectly, 50 percent or more
of the total value or voting power of all the
outstanding stock of such corporation.
1.2.2 If any Person controls a corporation under paragraph (a) or
(b) of Section 1.2.1, the acquisition of additional control by the same Person
shall not cause a Change in Control.
1.2.3 Persons will be considered to be acting as a group in
accordance with the provisions of Proposed Treasury Regulation Section
1.409A-3(g)(5)(vii)(C). For example, Persons will not be considered to be acting
as a group solely because they purchase or own stock of a corporation at the
same time, or as a result of the same public offering. However, Persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with a Service Recipient. Furthermore, if a person,
including an entity, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in
each corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the merged corporation.
1.2.4 The term "Service Recipient" includes all of the following:
(i) the corporation for which the Executive performs services (relating to the
compensation deferred under this Agreement) at the time of a Change in Control
Event; (ii) any corporation liable to pay deferred compensation under this
Agreement; (iii) any corporation which owns more than 50 percent of the total
fair market value and total voting power of any corporation described in clause
(i) or (ii); and (iv) any corporation in a chain of corporations in which each
corporation owns more than 50 percent of the total fair market value and total
voting power of another corporation in the chain ending in a corporation
described in clause (i) or (ii).
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Disability" shall have the meaning given such term in any
policy of disability insurance maintained by ARB for the benefit of employees
including the Executive; provided that the Executive must, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or to last for a continuous period of at least 12 months (i) be
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unable to engage in any substantial gainful activity or (ii) receive income
replacement benefits for a period of at least three months under an accident and
health plan covering other employees of ARB or its Subsidiaries.
1.5 "Early Termination" means the Termination of Employment before
Normal Retirement Age for reasons other than death, Disability, Termination for
Cause, or following a Change in Control.
1.6 "Early Termination Date" means the month, day, and year in
which Early Termination occurs.
1.7 "Effective Date" means August 22, 2003
1.8 "Intentional" shall mean an act or failure to act on the
Executive's part that is not in good faith and is without a reasonable belief
that the action or failure to act is in the best interests of ARB. No act or
failure to act on the part of the Executive shall be deemed to have been
intentional if it was due primarily to an error in judgment or negligence.
1.9 "Normal Retirement Age" means the Executive's 65th birthday.
1.10 "Normal Retirement Date" means the date on which the
Termination of Employment occurs after the Executive attains the Normal
Retirement Age.
1.11 "Plan Year" means a twelve-month period commencing on August
1st, and ending on the last day of July of each year. The initial Plan Year
shall commence on the Effective Date of this Agreement.
1.12 "Termination for Cause" shall mean the occurrence of any one
or more of the following:
(a) the willful, intentional and material breach of duty
by the Executive in the course of his employment;
(b) the habitual and continued neglect by the Executive
of his employment duties and obligations under this Agreement;
(c) the Executive's willful and intentional violation of
any State of California or federal banking or securities laws, or of the Bylaws,
rules, policies or resolutions of ARB or its Subsidiaries, or of the rules or
regulations of the Board of Governors of the Federal Reserve System, California
Department of Financial Institutions, Federal Deposit Insurance Corporation, or
other regulatory agency or governmental authority having jurisdiction over ARB
or its Subsidiaries;
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(d) the determination by a state or federal banking
agency or governmental authority having jurisdiction over ARB and its
Subsidiaries that the Executive is not suitable to act in the capacity for which
he is employed by ARB;
(e) the Executive is convicted of any felony or a crime
involving moral turpitude or commits a fraudulent or dishonest act;
(f) the Executive discloses without authority any secret
or confidential information concerning ARB or its Subsidiaries or takes any
action which ARB's Board of Directors determines, in its sole discretion and
subject to good faith, fair dealing and reasonableness, constitutes unfair
competition with or induces any customer to breach any contract with ARB or its
Subsidiaries; or
(g) the Executive breaches the terms or provisions of
this Agreement.
1.13 "Termination of Employment" means that the Executive ceases to
be employed by ARB or any affiliate of ARB for any reason whatsoever, other than
by reason of a leave of absence approved by ARB or such affiliate.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. Upon Termination of Employment on
or after the Normal Retirement Age for reasons other than death, ARB shall pay
to the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this
Section 2.1 is One Hundred Thousand Dollars ($100,000).
2.1.2 Payment of Benefit. ARB shall pay the annual benefit
under Section 2.1 of this Agreement to the Executive in 12 equal monthly
installments payable on the first day of each month commencing with the month
following the Executive's Normal Retirement Date. The annual benefit shall be
paid to the Executive for 15 years.
2.2 Early Termination Benefit. Upon Early Termination and provided
that the Executive's Early Termination Date occurs after the Executive's 62nd
birthday, ARB shall pay to the Executive the benefit described in this Section
2.2 in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The annual benefit under this
Section 2.2 is the Early Termination Benefit amount set forth on Schedule A for
the Plan Year ending immediately prior to the Early Termination Date.
2.2.2 Payment of Benefit. ARB shall pay the annual benefit
under Section 2.2 of this Agreement to the Executive in 12 equal monthly
installments payable on the first day of each month commencing with the month
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following the Early Termination Date. The annual benefit shall be paid to the
Executive for 15 years.
2.3 Disability Benefit. Upon Termination of Employment due to
Disability before Normal Retirement Age, ARB shall pay to the Executive the
benefit described in this Section 2.3 in lieu of any other benefit under this
Agreement.
2.3.1 Amount of Benefit. The annual benefit under this
Section 2.3 is the Disability Benefit amount set forth on Schedule A for the
Plan Year ending immediately prior to the date on which the Termination of
Employment occurs.
2.3.2 Payment of Benefit. ARB shall pay the Disability
Benefit to the Executive in 12 equal monthly installments payable on the first
day of each month commencing with the month following the Termination of
Employment due to Disability. The annual benefit shall be paid to the Executive
for 15 years.
2.4 Change in Control Benefit. If during the active service of the
Executive with ARB and within a period of two (2) years following consummation
of a Change in Control, (i) the Executive's employment is terminated in
connection with the Change in Control or (ii) without the Executive's consent
and in connection with the Change in Control there occurs (A) any adverse change
in the nature and scope of the Executive's salary or benefits, or (B) any event
which reasonably constitutes a constructive termination (by resignation or
otherwise) of the Executive's employment, then ARB shall pay to the Executive
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2.4.1 Amount of Benefit: The annual benefit under this
Section 2.4 is the Change in Control Benefit amount set forth in Schedule A for
the Plan Year ending immediately prior to the date on which the Termination of
Employment occurs.
2.4.2 Payment of Benefit: ARB shall pay the Change in
Control benefit under Section 2.4 of this Agreement to the Executive in 12 equal
monthly installments payable on the first day of each month commencing with the
seventh (7th) month following the occurrence of any event described in clause
(i) or (ii) of Section 2.4. The annual benefit shall be paid to the Executive
for 15 years.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies before the
Normal Retirement Age while in the active service of ARB, then ARB shall pay to
the Executive's beneficiary the benefit set forth in Section 2.1 as if the
Termination of Employment occurred on the date he would have attained the Normal
Retirement Age. The annual benefit under this Section 3.1 shall be the amount
specified in Section 2.1.1 and shall be payable as provided in Section 2.1.2,
commencing on the first day of the month following the date of the Executive's
death.
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3.2 Death During Benefit Period. If the Executive dies after any
benefit payments provided pursuant to Article 2 have commenced under this
Agreement but before receiving all such payments, ARB shall pay to the
Executive's beneficiary, in lieu of any other benefits under this Agreement, the
benefit set forth in Section 2.1 as if the Termination of Employment occurred on
the date he would have attained the Normal Retirement Age. The annual benefit
under this Section 3.2 shall be the amount specified in Section 2.1.1 and shall
be payable as provided in Section 2.1.2, commencing on the first day of the
month following the date of the Executive's death and continuing for the
remaining number of payment periods after taking into account the number of
benefit payments the Executive received prior to his death.
3.3 Death After Termination of Employment But Before Benefit
Payments Commence. If the Executive is entitled to any benefit payments under
Article 2 of this Agreement, but dies prior to the commencement of the benefit
payments, ARB shall pay to the Executive's beneficiary, in lieu of any other
benefit under this Agreement, the benefit set forth in Section 2.1 as if the
Termination of Employment occurred on the date he would have attained the Normal
Retirement Age. The annual benefit under this Section 3.3 shall be the amount
specified in Section 2.1.1 and shall be payable as provided in Section 2.1.2,
commencing on the first day of the month following the date of the Executive's
death.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing a written designation with ARB. The Executive may revoke
or modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
ARB during the Executive's lifetime. The Executive's beneficiary designation
shall be deemed automatically revoked if the beneficiary predeceases the
Executive, or if the Executive names a spouse as beneficiary and the marriage is
subsequently dissolved. If the Executive dies without a valid beneficiary
designation, all payments shall be made to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incapacitated, or to a person incapable of handling the
disposition of his or her property, ARB may pay such benefit to the guardian,
legal representative or person having the care or custody of such minor,
incapacitated person or incapable person. ARB may require proof of incapacity,
minority or guardianship as it may deem appropriate before distribution of the
benefit. Distribution shall completely discharge ARB from all liability for the
benefit.
Article 5
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, ARB shall not pay any benefit under this Agreement if
the Executive ceases to be employed by ARB as a result of a Termination for
Cause.
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5.2 Suicide or Misstatement. ARB shall not pay any benefit under
this Agreement if the Executive commits suicide within two (2) years after the
date of this Agreement, or if the Executive has made any material misstatement
of fact on any application for life insurance purchased by ARB.
5.3 Insolvency. If a receiver is appointed for ARB or any of the
Subsidiaries, all obligations under this Agreement shall terminate as of the
date that ARB or any of the Subsidiaries is(are) declared insolvent, subject to
any vested rights of the Executive under applicable law.
5.4 FDIC Open-Bank Assistance. All obligations under this
Agreement shall be terminated, subject to any vested rights of the Executive
under applicable law, except to the extent it is determined that continuation of
the contract is necessary for the continued operation of any of the
Subsidiaries, at the time the Federal Deposit Insurance Corporation enters into
an agreement to provide assistance to or on behalf of any of the Subsidiaries
under the authority contained in Section 13(c) of the Federal Deposit Insurance
Act [12 U.S.C. ss.1823(c)].
Article 6
Claims and Review Procedures
6.1 Claims Procedure. A person or beneficiary ("claimant") who has
not received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows
6.1.1 Initiation - Written Claim. The claimant initiates a claim by
submitting to ARB a written claim for the benefits.
6.1.2 Timing of ARB Response. ARB shall respond to such claimant
within 90 days after receiving the claim. If ARB determines that special
circumstances require additional time for processing the claim, ARB can extend
the response period by an additional 90 days by notifying the claimant in
writing, prior to the end of the initial 90-day period, that an additional
period is required. The notice of extension must set forth the special
circumstances and the date by which ARB expects to render its decision.
6.1.3 Notice of Decision. If ARB denies part or all of the claim,
ARB shall notify the claimant in writing of such denial. ARB shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth the following:
6.1.3.1 The specific reasons for the denial;
6.1.3.2 A reference to the specific provisions of the
Agreement on which the denial is based;
6.1.3.3 A description of any additional information or
material necessary for the claimant to perfect the claim and an explanation of
why it is needed;
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6.1.3.4 An explanation of the Agreement's review procedures
and the time limits applicable to such procedures; and
6.1.3.5 A statement of the claimant's right to bring a civil
action under ERISA Section 502(a) following an adverse benefit determination on
review.
6.2 Review Procedure. If ARB denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by ARB of the
denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review, the
claimant, within 60 days after receiving ARB's notice of denial, must file with
ARB a written request for review.
6.2.2 Additional Submissions - Information Access. The claimant
shall then have the opportunity to submit written comments, documents, records
and other information relating to the claim. ARB shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant's claim for benefits.
6.2.3 Considerations on Review. In considering the review, ARB shall
take into account all materials and information the claimant submits relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.
6.2.4 Timing of ARB Response. ARB shall respond in writing to such
claimant within 60 days after receiving the request for review. If ARB
determines that special circumstances require additional time for processing the
claim, ARB can extend the response period by an additional 60 days by notifying
the claimant in writing, prior to the end of the initial 60-day period, that an
additional period is required. The notice of extension must set forth the
special circumstances and the date by which ARB expects to render its decision.
6.2.5 Notice of Decision. ARB shall notify the claimant in writing
of its decision on review. ARB shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth
the following:
6.2.5.1 The specific reason for the denial;
6.2.5.2 A reference to the specific provisions of the
Agreement on which the denial is based;
6.2.5.3 A statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant's claim for benefits; and
6.2.5.4 A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
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Article 7
Miscellaneous
7.1 Amendments and Termination. This Agreement may be amended or
terminated only by a written agreement signed by ARB and the Executive.
7.2 Binding Effect. This Agreement shall bind the Executive, ARB,
and their beneficiaries, survivors, executors, successors, administrators and
transferees.
7.3 No Guarantee of Employment. This Agreement is not an
employment policy or contract for employment. It does not give the Executive the
right to remain an employee of ARB, nor does it interfere with ARB's right to
discharge the Executive. It also does not require the Executive to remain an
employee nor interfere with the Executive's right to terminate employment at any
time.
7.4 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner.
7.5 Successors; Binding Agreement. ARB will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of ARB, by an assumption
agreement in form and substance satisfactory to the Executive, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that ARB would be required to perform this Agreement if no such
succession had occurred. ARB's failure to obtain an assumption agreement before
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to the Change in Control Benefit provided in Section
2.4.
7.6 Tax Withholding. ARB shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
7.7 Applicable Law. This Agreement and all rights hereunder shall
be governed by the laws of the State of California, except to the extent
preempted by the laws of the United States of America.
7.8 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of ARB for the payment of benefits under this
Agreement. The benefits represent the mere promise by ARB to pay the benefits.
Rights to benefits are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on the Executive's life purchased by ARB is a general
asset of ARB as to which the Executive and beneficiary have no preferred or
secured claim, or any right, title or interest.
7.9 Entire Agreement. This Agreement constitutes the entire
agreement between ARB and the Executive as to the subject matter hereof. This
Agreement is intended to supersede any and all prior agreements between the
parties relating the subject matter hereof. No rights are granted to the
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Executive by virtue of this Agreement other than those specifically set forth
herein.
7.10 Administration. ARB shall have the power to administer this
Agreement, including but not limited to the power to:
(a) Interpret the provisions of the Agreement;
(b) Establish and revise the method of accounting for the
Agreement;
(c) Maintain a record of benefit payments; and
(d) Establish rules and prescribe any forms necessary or
desirable to administer the Agreement.
7.11 Named Fiduciary. ARB shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.
7.12 Severability. If for any reason any provision of this
Agreement is determined by ARB's Board of Directors, acting in good faith on
advice of counsel or other advisors, or is held by a court, arbiter or other
tribunal of competent jurisdiction, to be invalid, unenforceable or in violation
of any applicable law, rule or regulation, then this Agreement shall be modified
to the minimum extent necessary to render it valid, enforceable and in
compliance with applicable laws, rules and regulations, and as so modified, this
Agreement shall continue in full force and effect.
7.13 Headings. Caption headings and subheadings herein are included
solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement.
7.14 Notices. Any notices to be given hereunder shall be in writing
and may be transmitted by personal delivery or by U.S. mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to the Executive at the address listed in ARB's personnel file and
to ARB at its principal business office located at 0000 Xxxxxxxxx Xxxxx, Xxxxx
000, Xxxxxx Xxxxxxx, XX 00000. A party may change the address for receipt of
notices by written notice in accordance with this paragraph 7.14. Notices
delivered personally shall be deemed communicated as of the date of actual
receipt; mailed notices shall be deemed communicated as of three (3) days after
the date of mailing.
7.15 Arbitration. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
ARB in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
in accordance with the rules and procedures of JAMS then in effect. In the event
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JAMS is unable or unwilling to conduct such arbitration, or has discontinued its
business, the parties agree that a representative member, selected by the mutual
agreement of the parties, of the American Arbitration Association ("AAA"), shall
conduct such binding arbitration in accordance with the rules and procedures of
the AAA then in effect. Notice of the demand for arbitration shall be filed in
writing with the other party to this Agreement and with JAMS (or AAA, if
necessary). In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable statute of
limitations. Any award rendered by JAMS or AAA shall be final and binding upon
the parties, and as applicable, their respective heirs, beneficiaries, legal
representatives, agents, successors and assigns, and may be entered in any court
having jurisdiction thereof. The obligation of the parties to arbitrate pursuant
to this clause shall be specifically enforceable in accordance with, and shall
be conducted consistently with, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Sacramento, California, unless otherwise agreed to by the parties.
7.16 Attorneys' Fees and Costs. In the event of litigation,
arbitration or any other action or proceeding between the parties to interpret
or enforce this Agreement or any part thereof or otherwise arising out of or
relating to this Agreement, the prevailing party shall be entitled to recover
its costs related to any such action or proceeding and its reasonable fees of
attorneys, accountants and expert witnesses incurred by such party in connection
with any such action or proceeding. The prevailing party shall be deemed to be
the party which obtains substantially the relief sought by final resolution,
compromise or settlement, or as may otherwise be determined by order of a court
of competent jurisdiction in the event of litigation, an award or decision of
one or more arbitrators in the event of arbitration, or a decision of a
comparable official in the event of any other action or proceeding. Any
obligation to indemnify under this Agreement includes the obligation to pay
reasonable fees of attorneys, accountants and expert witnesses incurred by the
indemnified party in connection with matters subject to indemnification.
7.17 Internal Revenue Code Section 280G. If all or any portion of
the amounts payable to the Executive pursuant to this Agreement alone or
together with other payments which the Executive has the right to receive from
ARB, constitute "excess parachute payments" within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code"), that are subject
to the excise tax imposed by Section 4999 of the Code (or similar tax and/or
assessment), such amounts payable hereunder shall be reduced to the extent
necessary, after first applying any similar reduction in payments to be received
from any other plan or program sponsored by ARB from which the Executive has a
right to receive payments subject to Sections 280G and 4999 of the Code,
including without limitation any employment agreement made between ARB and the
Executive, so as to cause a reduction of any excise tax pursuant to Section 4999
of the Code to equal "zero".
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7.18 Review Procedure. Not less frequently than every three (3)
years during the term of this Agreement prior to the Executive commencing to
receive any benefits hereunder, ARB will review this Agreement and the benefits
that may become payable hereunder to determine whether to maintain the benefits
at the amounts specified in this Agreement or to increase the benefits. If ARB
determines, in its sole discretion, to increase the benefits, Schedule A shall
be appropriately modified.
IN WITNESS WHEREOF, the Executive and the Chairman of the Board of ARB
have executed this Salary Continuation Agreement in the City of Sacramento,
State of California, as of the day and year first written above.
EXECUTIVE: ARB:
AMERICAN RIVER BANKSHARES
By:
----------------------------- ---------------------------------
Xxxxx X. Xxxxx Xxxxxxx X. Xxxx
Chairman of the Board
107
BENEFICIARY DESIGNATION
AMERICAN RIVER BANKSHARES
SALARY CONTINUATION AGREEMENT
I, Xxxxx X. Xxxxx, designate the following as beneficiary of any
benefits to which I may be entitled under my Salary Continuation Agreement with
American River Bankshares dated August 22, 2003:
Primary:
--------------------------
Contingent:
--------------------------
Note: To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.
I understand that I may change these beneficiary designations by filing
a new written designation with American River Bankshares. I further understand
that the designations will be automatically revoked if the beneficiary
predeceases me, or if I have named my spouse as beneficiary and our marriage is
subsequently dissolved.
Signature:
--------------------------
Date: August ___, 2003
Accepted by American River Bankshares this _____day of August, 2003
By:
--------------------------------
Xxxxxxx X. Xxxx
Chairman of the Board
108
SCHEDULE A
AMERICAN RIVER BANKSHARES
SALARY CONTINUATION AGREEMENT
FOR XXXXX X. XXXXX
---------------------------------------------------------------------------------------------------------
Age At Early Change in
Plan Year Plan Termination Disability Control
Plan Ending Year Accrual Benefit Annual Benefit
Year 07/31 End Balance Payable(1) Benefit(2) ss.2.4(3)
---------------------------------------------------------------------------------------------------------
1 2004 44 $10,698 $0 $1,098 $64,970
---------------------------------------------------------------------------------------------------------
2 2005 45 $22,895 $0 $2,349 $64,970
---------------------------------------------------------------------------------------------------------
3 2006 46 $36,746 $0 $3,771 $64,970
---------------------------------------------------------------------------------------------------------
4 2007 47 $52,424 $0 $5,379 $64,970
---------------------------------------------------------------------------------------------------------
5 2008 48 $70,117 $0 $7,195 $64,970
---------------------------------------------------------------------------------------------------------
6 2009 49 $90,031 $0 $9,238 $64,970
---------------------------------------------------------------------------------------------------------
7 2010 50 $112,388 $0 $11,532 $64,970
---------------------------------------------------------------------------------------------------------
8 2011 51 $137,437 $0 $14,102 $64,970
---------------------------------------------------------------------------------------------------------
9 2012 52 $165,437 $0 $16,976 $64,970
---------------------------------------------------------------------------------------------------------
10 2013 53 $196,687 $0 $20,182 $64,970
---------------------------------------------------------------------------------------------------------
11 2014 54 $231,500 $0 $23,755 $64,970
---------------------------------------------------------------------------------------------------------
12 2015 55 $270,224 $0 $27,728 $64,970
---------------------------------------------------------------------------------------------------------
13 2016 56 $313,234 $0 $32,142 $64,970
---------------------------------------------------------------------------------------------------------
14 2017 57 $360,942 $0 $37,037 $64,970
---------------------------------------------------------------------------------------------------------
15 2018 58 $413,795 $0 $42,460 $64,970
---------------------------------------------------------------------------------------------------------
16 2019 59 $472,278 $0 $48,461 $64,970
---------------------------------------------------------------------------------------------------------
17 2020 60 $536,921 $0 $55,094 $64,970
---------------------------------------------------------------------------------------------------------
18 2021 61 $608,299 $0 $62,419 $64,970
---------------------------------------------------------------------------------------------------------
19 2022 62 $687,040 $70,498 $70,498 $64,970
---------------------------------------------------------------------------------------------------------
20 2023 63 $773,824 $79,404 $79,404 $64,970
---------------------------------------------------------------------------------------------------------
21 2024 64 $869,392 $89,210 $89,210 $64,970
---------------------------------------------------------------------------------------------------------
22 2025 65 $974,547 $100,000 $100,000 $64,970
---------------------------------------------------------------------------------------------------------
------------------------------------
(1) The total annual benefit for 15 years following Termination of Employment
using an assumed rate of return of 7%.
(2) The total annual benefit for 15 years following Termination of Employment
due to Disability using an assumed rate of return of 7%.
(3) The total annual benefit for 15 years following Change in Control using an
assumed rate of return of 0%.
109
