Exhibit 10.34
AMERICAN RIVER HOLDINGS
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (this "Agreement") is made and
entered into this 22nd day of August , 2003, by and between American River
Holdings, a California corporation and bank holding company registered under the
Bank Holding Company Act of 1956, as amended, with its main office in
Sacramento, California ("ARH") and Xxxxx X. Xxxxx (the "Executive").
WHEREAS, ARH is the parent bank holding company for subsidiaries which
at the date of this Agreement include American River Bank and North Coast Bank,
N.A. (together, "Bank Subsidiaries");
WHEREAS, the Executive has contributed substantially to the success of
ARH and its subsidiaries including the Bank Subsidiaries, and ARH desires that
the Executive continue in its employ;
WHEREAS, to encourage the Executive to remain an employee of ARH, it is
willing to provide salary continuation benefits to the Executive, which ARH 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 ARH, is contemplated by this Agreement insofar as ARH is
concerned;
WHEREAS, ARH 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 ARH and its subsidiaries including the Bank Subsidiaries
pertaining to this Agreement including ARH's acquisition, ownership, control and
title to and all rights and benefits under one or more policies of insurance
that ARH 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
WHEREAS, the Executive is fully advised of ARH's financial status and
the fact that the Executive has no interest in or rights under any insurance
policies ARH 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 ARH hereby agree as follows:
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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
ARH 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 the occurrence of any of the
following events with respect to ARH or its Bank Subsidiaries:
(a) a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or in response to any other form or report to the regulatory
agencies or governmental authorities having jurisdiction over ARH or its Bank
Subsidiaries, or any stock exchange on which ARH's shares are listed which
requires the reporting of a change in control;
(b) any merger, consolidation or reorganization of ARH or
its Bank Subsidiaries in which ARH or its Bank Subsidiaries does(do) not
survive;
(c) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of transactions) of any
assets of ARH or its Bank Subsidiaries having an aggregate fair market value of
fifty percent (50%) of the total value of the assets of ARH, reflected in the
most recent balance sheet of ARH;
(d) a transaction whereby any "person" (as such term is
used in the Exchange Act) or any individual, corporation, partnership, trust or
any other entity is or becomes the beneficial owner, directly or indirectly, of
securities of ARH representing twenty-five percent (25%) or more of the combined
voting power of ARH's then outstanding securities;
(e) a situation where, in any one-year period,
individuals who at the beginning of such period constitute the Board of
Directors of ARH cease for any reason to constitute at least a majority thereof,
except in the cases of retirement, disability or death and unless the election,
or the nomination for election by ARH's shareholder(s), of each new director is
approved by a vote of at least three-quarters (3/4) of the directors then still
in office who were directors at the beginning of the period; or
(f) the shareholder(s) of ARH approve the sale or
transfer of substantially all of ARH's assets to parties that are not within a
"controlled group of corporations" (as that term is defined in section 1563 of
the Code) in which ARH is a member.
Notwithstanding the foregoing or anything else contained herein to the
contrary, there shall not be a Change in Control for purposes of this Agreement
if the event which would otherwise come within the meaning of the term Change in
Control involves (i) an Employee Stock Ownership Plan sponsored by ARH which
plan is the party that acquires "control" or is the principal participant in the
transaction constituting a "change in control," as described above, or (ii) a
reorganization in which any of the Bank Subsidiaries is merged with and into
another bank subsidiary of ARH to consolidate operations under the charter of
such other bank subsidiary, or (iii) if the individuals who constitute the
directors of ARH at the time a specific transaction described in Section 1.2(b)
or 1.2(f) is first presented or disclosed to the Board of Directors of ARH will,
according to the terms of the definitive agreement for the transaction,
constitute a majority of the members of the board of directors of the resulting
corporation or acquiring person immediately after the transaction, then, before
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an event that would otherwise constitute a Change in Control shall be deemed to
have occurred, such Board of Directors of ARH may determine by majority vote
that the specific transaction does not constitute a Change in Control under
Section 1.2(b) or 1.2(f).
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Disability" shall have the same meaning given such term in
any policy of disability insurance maintained by ARH for the benefit of
employees including the Executive. In the absence of such a policy, the term
shall mean bodily injury or disease (mental or physical) which wholly and
continuously prevents the performance of the Executive's duties to ARH for at
least ninety (90) consecutive days.
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 ARH. 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 ARH 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 ARH
or its subsidiaries;
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(d) the determination by a state or federal banking
agency or governmental authority having jurisdiction over ARH and its
subsidiaries that the Executive is not suitable to act in the capacity for which
he is employed by ARH;
(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 ARH or its subsidiaries or takes any
action which ARH'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 ARH 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 ARH or any affiliate of ARH for any reason whatsoever, other than
by reason of a leave of absence approved by ARH 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, ARH 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). ARH's Board of Directors, in its
sole discretion, may increase the annual benefit under this Section 2.1.1.
However, any increase shall require the recalculation of Schedule A to this
Agreement.
2.1.2 Payment of Benefit. ARH shall pay the annual benefit 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 has attained age 62, ARH 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 benefit under this Section 2.2 is the
Early Termination Annual Benefit amount set forth on Schedule A for the Plan
Year ending immediately prior to the Early Termination Date. ARH's Board of
Directors, in its sole discretion, may increase the annual benefit under this
Section 2.2.1. However, any increase shall require the recalculation of Schedule
A.
2.2.2 Payment of Benefit. Provided that the Executive's Early
Termination Date occurs after the Executive's 62nd birthday, ARH shall pay the
annual benefit to the Executive in 12 equal monthly installments payable on the
first day of each month commencing with the first day of the month following the
Early Termination Date. The annual benefit shall be paid to the Executive for 15
years.
2.3 Disability Benefit. If the Executive terminates employment due
to Disability before Normal Retirement Age, ARH shall pay to the Executive the
benefit described in this Section 2.3 in lieu of any other benefit under this
Agreement.
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2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Disability Annual Benefit amount set forth on Schedule A for the Plan Year
ending immediately prior to the date on which the Termination of Employment
occurs (except during the first Plan Year, the benefit is the amount set forth
for Plan Year 1). ARH's Board of Directors, in its sole discretion, may increase
the annual benefit under this Section 2.3.1. However, any increase shall require
the recalculation of Schedule A.
2.3.2 Payment of Benefit. ARH shall pay the Disability Annual
Benefit amount to the Executive in 12 equal monthly installments payable on the
first day of each month commencing with the month following 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 a Change in Control occurs
during the active service of the Executive with ARH, and within a period of two
(2) years following consummation of such a Change in Control (i) there occurs a
Termination of Employment; or (ii) without the Executive's consent there occurs
(A) any adverse change in the nature and scope of 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
the Executive shall be entitled to receive and ARH 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 benefit under this Section 2.4 is the
Normal Retirement Age Accrual Balance of Nine Hundred Seventy-Four Thousand Five
Hundred Forty-Seven Dollars ($974,547) required by Section 2.1. In its sole
discretion, ARH's Board of Directors may increase the benefit under this Section
2.4.1. However, any increase shall require the recalculation of Schedule A.
2.4.2 Payment of Benefit: ARH 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 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.
2.5 Contradiction in Terms of Agreement and Exhibits. If there is
a contradiction in the terms of this Agreement and the Schedule A attached
hereto with the actual amount of a particular amount due the Executive pursuant
to Section 2.2, 2.3 or 2.4 hereof, then the actual amount of said benefit set
forth in this Agreement shall control.
2.6 Revisions to Schedule A. In the event that (i) ARH's Board of
Directors elects to increase the benefits specified in this Article 2, (ii) the
Executive commences to receive benefits other than on the date he attains the
Normal Retirement Age, or (iii) if this Agreement is modified as provided in
Section 7.12 in order to conform to applicable law, rules or regulations, then
Schedule A shall be appropriately modified.
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 ARH, then ARH 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, ARH 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, ARH 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 ARH. 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
ARH 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, ARH may pay such benefit to the guardian,
legal representative or person having the care or custody of such minor,
incapacitated person or incapable person. ARH may require proof of incapacity,
minority or guardianship as it may deem appropriate before distribution of the
benefit. Distribution shall completely discharge ARH from all liability for the
benefit.
Article 5
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, ARH shall not pay any benefit under this Agreement if
the Executive ceases to be employed by ARH as a result of a Termination for
Cause.
5.2 Suicide or Misstatement. ARH 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 ARH.
5.3 Insolvency. If a receiver is appointed for ARH or any of the
Bank Subsidiaries, all obligations under this Agreement shall terminate as of
the date that ARH or any of the Bank Subsidiaries is(are) declared insolvent,
subject to any vested rights of the Executive under applicable law.
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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 Bank
Subsidiaries, at the time the Federal Deposit Insurance Corporation enters into
an agreement to provide assistance to or on behalf of any of the Bank
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 ARH a written claim for the benefits.
6.1.2 Timing of ARH Response. ARH shall respond to such claimant
within 90 days after receiving the claim. If ARH determines that special
circumstances require additional time for processing the claim, ARH 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 ARH expects to render its decision.
6.1.3 Notice of Decision. If ARH denies part or all of the claim,
ARH shall notify the claimant in writing of such denial. ARH 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;
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 ARH denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by ARH of the
denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review, the
claimant, within 60 days after receiving ARH's notice of denial, must file with
ARH 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. ARH shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
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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, ARH 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 ARH Response. ARH shall respond in writing to such
claimant within 60 days after receiving the request for review. If ARH
determines that special circumstances require additional time for processing the
claim, ARH 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 ARH expects to render its decision.
6.2.5 Notice of Decision. ARH shall notify the claimant in writing
of its decision on review. ARH 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).
Article 7
Miscellaneous
7.1 Amendments and Termination. This Agreement may be amended or
terminated only by a written agreement signed by ARH and the Executive.
7.2 Binding Effect. This Agreement shall bind the Executive, ARH,
and their beneficiaries, survivors, executors, successors, administrators and
transferees.
7.3 No Guarantee of Employment. This Agreement is not an
employment policy or contract. It does not give the Executive the right to
remain an employee of ARH, nor does it interfere with ARH'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. ARH 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 ARH, 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 ARH would be required to perform this Agreement if no such
succession had occurred. ARH's failure to obtain an assumption agreement before
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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. ARH 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 ARH for the payment of benefits under this
Agreement. The benefits represent the mere promise by ARH 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 ARH is a general
asset of ARH 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 ARH and the Executive as to the subject matter hereof. No
rights are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
7.10 Administration. ARH 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. ARH 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 ARH'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 ARH's personnel file and
to ARH at its principal business office located at 0000 Xxxxx Xxxx Xxxxx, Xxxxx
000, Xxxxxxxxxx, XX 00000. A party may change the address for receipt of notices
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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
ARH 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
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
ARH, 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 ARH 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 ARH 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, ARH 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 ARH
determines, in its sole discretion, to increase the benefits, Schedule A shall
be appropriately modified.
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IN WITNESS WHEREOF, the Executive and the Chairman of the Board of ARH
have executed this Salary Continuation Agreement in the City of Sacramento,
State of California, as of the day and year first written above.
EXECUTIVE: ARH:
AMERICAN RIVER HOLDINGS
/s/ XXXXX X. XXXXX By: /s/ XXXXXXX X. XXXX
------------------------------------ -------------------------------------
Xxxxx X. Xxxxx Xxxxxxx X. Xxxx
Chairman of the Board
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BENEFICIARY DESIGNATION
AMERICAN RIVER HOLDINGS
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 Holdings dated August 22, 2003:
Primary: Xxxxxxxxx X. Xxxxx
------------------------------
Contingent: Xxxxxxxx and Xxxxxxx Xxxxx
------------------------------
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 Holdings. 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: /s/ XXXXX X. XXXXX
------------------------------
Date: August 22, 2003
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Accepted by American River Holdings this 26 day of August, 2003
----
By: /s/ XXXXXXX X. XXXX
--------------------------------------
Xxxxxxx X. Xxxx
Chairman of the Board
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SCHEDULE A
AMERICAN RIVER HOLDINGS
SALARY CONTINUATION AGREEMENT
FOR XXXXX X. XXXXX
---------- -------------- ---------- ---------- ---------- ------------ ------------
Age At Early
Plan Termination Disability Change in
Plan Plan Year Year Accrual Benefit Benefit Control
Year Ending End Balance Payable(1) Payable(2) Benefit(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 $ 137,435 $ 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%.
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