EXHIBIT 99.2
AMERICAN RIVER BANKSHARES
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is made and entered into on
September 20, 2006 by and between American River Bankshares, a California
corporation, (the "Employer") and Xxxxxxx X. Tow (the "Employee").
RECITALS
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WHEREAS, the Employee is currently the Executive Vice President & Chief
Credit Officer of the Employer; and
WHEREAS, it is the intention of the parties to enter into an employment
agreement for the purposes of assuring the continued services of the Employee
and more specifically define the parties' relationship; and
WHEREAS, it is the further intention of the parties that this Agreement
shall supersede any prior employment agreements and/or any prior severance
policies or agreements between the parties.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Employer and the Employee agree as follows:
AGREEMENT
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1. Employment Relationship. The Employer and the Employee
understand and agree that the employment relationship between them is employment
at-will which may be terminated by either party at any time with or without
notice and with or without cause. Nothing in this Agreement nor any subsequent
modification or variation hereto shall confer upon the Employee any right to
continued employment with the Employer or shall interfere with or restrain in
any way the right hereby expressly reserved by the Employer to terminate the
Employee's employment at any time, with or without cause, and with or without
notice. The provisions of paragraph 16 shall determine whether severance
obligations exist with regard to the termination of the employment relationship
but shall in no way alter the at-will relationship.
2. Duties and Obligations of Employee. The Employee shall serve
as the Executive Vice President & Chief Credit Officer of the Employer and shall
perform the customary duties of such office in the commercial banking industry,
including those listed below. Employee shall also perform such other duties and
in such other positions as are requested of him by the Employer.
(a) Providing leadership in planning and implementing the
conduct of the business and affairs of the Employer, subject to the direction of
the Chief Executive Officer of the Employer, and carrying out responsibilities
of the position as outlined in any job description approved by the Chief
Executive Officer.
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(b) Participating in community affairs which are
beneficial to the Employer.
(c) Maintaining a good relationship with the Board of
Director, the Chief Executive Officer, the management officers and the
shareholders of the Employer.
(d) Maintaining a good relationship with regulatory
agencies and governmental authorities having jurisdiction over the Employer and
its related and affiliated entities.
3. Devotion to Employer's Business.
(a) The Employee shall devote his full business time,
ability, and attention to the business of the Employer during the employment and
shall not engage in any other business activities, duties, or pursuits
whatsoever, or directly or indirectly render any services of a business,
commercial, or professional nature to any other person or organization, whether
for compensation or otherwise, without the prior written consent of the Board of
Directors of the Employer. However, the expenditure of reasonable amounts of
time for educational, charitable, or professional activities shall not be deemed
a breach of this Agreement if those activities do not materially interfere with
the services required of the Employee under this Agreement. Nothing in this
Agreement shall be interpreted to prohibit the Employee from making passive
personal investments. However, the Employee shall not directly or indirectly
acquire, hold, or retain any interest in any business competing with or similar
in nature to the business of Employer, except passive shareholder investments in
other financial institutions and their respective affiliates which do not exceed
five percent (5%) of the outstanding voting securities in the aggregate in any
single financial institution and its affiliates on a consolidated basis.
(b) The Employee agrees to conduct himself at all times
with due regard to public conventions and morals. The Employee further agrees
not to do or commit any act that will reasonably tend to shock or offend the
community, or to prejudice the Employer or the banking industry in general.
4. Noncompetition by the Employee. The Employee shall not during
the employment, directly or indirectly, either as an employee, employer,
consultant, agent, principal, stockholder, officer, director, or in any other
individual or representative capacity, engage or participate in any competitive
banking or financial services business without the prior written consent of the
Employer.
5. Indemnification.
(a) To the fullest extent permitted by law, the Employee
shall indemnify and hold the Employer and its related and affiliated entities
harmless from all liability for loss, damage, or injury to persons or property
resulting from the Employee's conduct.
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(b) To the fullest extent permitted by law, the Employer
shall indemnify the Employee if he was or is a party or is threatened to be made
a party in any action brought by a third party against the Employee (whether or
not the Employer is joined as a party defendant) against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with said action if the Employee acted in good faith and in a manner
the Employee reasonably believed to be in the best interest of the Employer (and
with respect to a criminal proceeding if the Employee had no reasonable cause to
believe his conduct was unlawful), provided that the alleged conduct of the
Employee arose out of and was within the course and scope of his employment as
an officer or employee of the Employer.
6. Disclosure of Information. The Employee shall not, either
before or after termination of this Agreement, without the prior written consent
of the Board of Directors of Employer, or except as required by law to comply
with legal process, disclose to anyone any financial information, trade or
business secrets, customer lists, computer software or other information not
otherwise publicly available concerning the business or operations of the
Employer and its related and affiliated entities. The Employee further
recognizes and acknowledges that any financial information concerning any
customers of the Employer and its related and affiliated entities as it may
exist from time to time, is strictly confidential and is a valuable, special and
unique asset of Employer's business. The Employee shall not, either before or
after termination of this Agreement, without such consent or except as required
by law, disclose to anyone said financial information or any part thereof, for
any reason or purpose whatsoever. In the event the Employee is required by law
to disclose such information described in this paragraph, the Employee will
provide the Employer and its counsel with immediate notice of such request so
that they may consider seeking a protective order. The Employee agrees to
execute such form of confidentiality agreement from time to time during the term
of this Agreement as the Employer may require to be executed by officers of the
Employer. Any conflict between this paragraph and such confidentiality agreement
shall be resolved in favor of the provisions of the confidentiality agreement.
7. Written, Printed or Electronic Material. All written, printed
or electronic material, notebooks and records including, without limitation,
computer disks used by the Employee in performing duties for the Employer are
and shall remain the sole property of the Employer. Upon termination of
employment, the Employee shall promptly return all such material (including all
copies, extracts and summaries thereof) to the Employer.
8. Surety Bond. The Employee agrees that he will furnish all
information and take any other steps necessary from time to time to enable the
Employer to obtain or maintain a fidelity or similar financial institution bond
which includes the Employee within the coverage provided conditional on the
rendering of a true account by the Employee of all monies, goods, or other
property which may come into the custody, charge, or possession of the Employee
during the term of his employment. The surety company issuing the bond and the
amount of the bond must be acceptable to the Employer. All premiums on the bond
shall be paid by the Employer. The Employer, or its successor, shall have no
obligation to pay or provide severance payments or severance benefits to the
Employee in accordance with paragraph 16 (d) or 16 (e), as applicable, of this
Agreement in the event that the Employee's employment is terminated in
connection with the Employee's failure to qualify for a surety bond at any time
during the term of this Agreement and such failure to qualify results from an
occurrence described in paragraph 16 (a) (5), (6), (7), (8), (9), (10) or (11,
to the extent of the Employee's breach).
9. Base Salary. In consideration for the services to be performed
hereunder, the Employee shall receive a salary at the rate of One Hundred Forty
Thousand Dollars ($140,000) per annum, payable in installments during the
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Employee's employment of Five Thousand Eight Hundred Thirty-Three Dollars and
Thirty-Three Cents ($5,833.33) on the first and fifteenth days of each month,
subject to applicable adjustments for withholding taxes, proration for any
partial employment period and such other applicable payroll procedures of the
Employer. The Employee shall receive such annual adjustments in salary, if any,
as may be determined by the Employer's Board of Directors, in its sole
discretion, resulting from the Board of Directors annual review of the
Employee's compensation.
10. Salary Continuation During Disability. If the Employee for any
reason (except as expressly provided below) becomes temporarily or permanently
disabled so that he is unable to perform the duties under this Agreement, the
Employer agrees to pay the Employee the base salary otherwise payable to
Employee pursuant to paragraph 9 of this Agreement, reduced by the amounts
received by the Employee from state disability insurance, or worker's
compensation or other similar insurance benefits through policies provided by
the Employer, for a period of six (6) months from the date of disability.
For purposes of this paragraph 10, "disability" shall be defined as
provided in the Employer's disability insurance program. Notwithstanding
anything herein to the contrary, the Employer shall have no obligation to make
payments for a disability resulting from the deliberate, intentional actions of
the Employee, such as, but not limited to, attempted suicide or chemical
dependence of the Employee.
11. Incentive Compensation. The Employee shall be entitled to
participate in the incentive compensation programs that may be sponsored by the
Employer, subject to the right of the Board of Directors in its sole discretion
to modify the terms and provisions of such programs in connection with its
review of the Employee's performance and the Employer's results of operations.
Under no circumstance shall a right to receive incentive compensation exist in
favor of or accrue to or for the benefit of the Employee prior to actual receipt
of a distribution, if any, under any program.
12. Stock Options/Employment Rights. The Employee has previously
been granted stock options and may be granted additional stock options in the
future in the discretion of the Board of Directors of the Employer. Any such
stock option grant shall be evidenced by a stock option agreement in the form
required by the applicable stock option plan. Notwithstanding any provision of
such stock option plan or any such stock option agreement to the contrary, no
rights of employment shall be conferred upon the Employee or result from any
such stock option plan or any such stock option agreement. Any employment rights
and corresponding duties of the Employee pursuant to his employment by the
Employer shall be limited to and interpreted solely in accordance with the terms
and provisions of this Agreement.
13. Other Benefits. The Employee shall be entitled to those
employee benefits adopted by the Employer for all employees of the Employer,
subject to applicable qualification requirements and regulatory approval
requirements, if any. The Employee shall be further entitled to the following
additional benefits which shall supplement or replace, to the extent duplicative
of any part or all of the general employee benefits, the benefits otherwise
provided to the Employee:
(a) Vacation. The Employee shall be entitled to four (4)
weeks of annual vacation leave and six (6) days of personal absence at his then
existing rate of base salary each year during the employment. The Employee may
be absent from his employment for vacation and personal absence as long as such
leave is reasonable and does not jeopardize his responsibilities and duties
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specified in this Agreement. The length of vacation should not exceed two (2)
weeks without the approval of the Employer's Chief Executive Officer. The
Employee shall take at least two (2) consecutive weeks of vacation each year
during the employment. Vacation time will accrue in accordance with the
Employer's personnel policies.
(b) Insurance. The Employer shall provide group life,
health (including medical, dental and hospitalization), accident and disability
insurance coverage for the Employee and his dependents through a policy or
policies provided by insurer(s) selected by the Employer in its sole discretion.
The Employer shall pay 70% of the cost of such insurance benefits.
14. Annual Physical Examination. The Employer shall provide
insurance coverage for or pay or reimburse the Employee for the cost of an
annual physical examination conducted by a California licensed physician
selected by the Employee and reasonably acceptable to the Employer.
15. Business Expenses. The Employee shall be reimbursed for all
ordinary and necessary expenses incurred by the Employee in connection with his
employment. The Employee shall also be reimbursed for reasonable expenses
incurred in activities associated with promoting the business of the Employer,
including expenses for entertainment, travel, conventions, educational programs,
and similar items, and with the prior approval of the Employer's Board of
Directors, expenses for club memberships. The Employer will pay for or will
reimburse the Employee for such expenses upon presentation by the Employee from
time to time of receipts or other appropriate evidence of such expenditures.
16. Termination of Agreement.
(a) Automatic Termination. This Agreement shall terminate
automatically without further act of the parties and immediately upon the
occurrence of any one of the following events, subject to either party's right,
without any obligation whatsoever, to waive an event reasonably susceptible of
waiver, and the obligation of the Employer to pay the amounts which would
otherwise be payable to the Employee under this Agreement through the end of the
month in which the event occurs, except that only in the event of termination
based upon subparagraphs (1), (4) or (11, to the extent of Employer's breach)
below shall the Employee be entitled to receive severance payments and severance
benefits based upon automatic termination pursuant to paragraph 16 (d) of this
Agreement:
(1) The occurrence of circumstances that make it
impossible or impractical for the Employer
to conduct or continue its business.
(2) The death of the Employee.
(3) The loss by the Employee of legal capacity.
(4) The loss by the Employer of legal capacity
to contract.
(5) The willful, intentional and material breach
of duty by the Employee in the course of his
employment.
(6) The habitual and continued neglect by the
Employee of his employment duties and
obligations under this Agreement.
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(7) The Employee'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 the Employer or its related and
affiliated entities, or the rules or
regulations of the Board of Governors of the
Federal Reserve System, California
Department of Financial Institutions, or the
Federal Deposit Insurance Corporation, or
other regulatory agency or governmental
authority having jurisdiction over the
Employer or its related and affiliated
entities.
(8) The determination by a state or federal
banking agency or governmental authority
having jurisdiction over the Employer or its
related and affiliated entities that the
Employee is not suitable to act in the
capacity for which he is employed by the
Employer.
(9) The Employee is convicted of any felony or a
crime involving moral turpitude or commits a
fraudulent or dishonest act.
(10) The Employee discloses without authority any
secret or confidential information
concerning the Employer or its related and
affiliated entities or takes any action
which the Employer'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 the Employer or its
related and affiliated entities.
(11) Either party materially breaches the terms
or provisions of this Agreement.
(b) Termination by Employer. The Employer may, at its
election and in its sole discretion, terminate this Agreement for any reason, or
for no reason, without prejudice to any other remedy to which the Employer may
be entitled either at law, in equity or under this Agreement. Upon such
termination, unless otherwise agreed in writing between the Employer and the
Employee, the Employee shall immediately cease performing and discharging the
duties and responsibilities of his position and remove himself and his personal
belongings from the Employer's premises. All rights and obligations accruing to
the Employee under this Agreement shall cease at such termination, except that
such termination shall not prejudice the Employee's rights regarding employment
benefits which shall have accrued prior to such termination, the right to
receive the severance pay specified in paragraph 16 (d) below, and any other
remedy which the Employee may have at law, in equity or under this Agreement,
which remedy accrued prior to such termination.
(c) Termination by Employee. This Agreement may be
terminated by the Employee for any reason, or no reason. Upon such termination,
all rights and obligations accruing to the Employee under this Agreement shall
cease, except that such termination shall not prejudice the Employee's rights
regarding employment benefits which shall have accrued prior to such termination
and any other remedy which the Employee may have at law, in equity or under this
Agreement, which remedy accrued prior to such termination. If this Agreement is
terminated by the Employee, the Employee shall not be entitled to any severance
pay.
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(d) Severance Pay - Termination by Employer. In the event
of termination by the Employer pursuant to paragraph 16 (b) or automatic
termination based upon paragraph 16 (a) (1), (4) or (11, to the extent of the
Employer's breach) of this Agreement, the Employee shall be entitled to receive
severance pay at the Employee's rate of base salary immediately preceding such
termination in an amount equal to six (6) months of the Employee's annual base
salary, less applicable withholding deductions. Such severance pay shall be paid
to the Employee in lump sum no sooner than six (6) months and no later than nine
(9) months following such termination.
Notwithstanding the foregoing, in the event of a "Change in
Control" as defined in paragraph 16 (f) below, the Employee shall not be
entitled to the severance pay pursuant to this paragraph 16 (d) and any rights
of the Employee to severance pay shall be limited to such rights as are
specified in paragraph 16 (e) below.
The Employee acknowledges and agrees that severance pay
pursuant to this paragraph 16 (d) is in lieu of all damages, payments and
liabilities on account of the early termination of this Agreement and is
intended as the sole and exclusive remedy for the Employee terminated at the
will of the Employer pursuant to paragraph 16 (b) or pursuant to certain
provisions of paragraph 16 (a) described herein. Should the Employee pursue any
other remedies or bring any actions or claims against the Employer, the Employee
shall have no right to any severance pay or other benefits under this Agreement
and the Employee agrees that any severance received by the Employee pursuant to
this paragraph 16(d) will be immediately returned to the Employer.
(e) Severance Pay - Change in Control. If, during the
active service of the Employee with the Employer and within a period of two (2)
years following consummation of a Change in Control, as defined in subsection
(f) of this Section 16, and in connection with the Change in Control, (i) the
Employee's employment is terminated or (ii) without the Employee's consent there
occurs (A) any adverse change in the nature and scope of the Employee's salary
or benefits or (B) any event which reasonably constitutes a constructive
termination (by resignation or otherwise) of the Employee's employment, then the
Employee shall be entitled to receive severance pay at the Employee's rate of
base salary immediately preceding such termination in an amount equal to twelve
(12) months of the Employee's annual base salary, less applicable withholding
deductions (in addition to salary, incentive compensation, or other payments, if
any, due the Employee). Such severance pay shall be paid to the Employee in lump
sum no sooner than six (6) months and no later than nine (9) months following
such termination.
The Employee acknowledges and agrees that severance pay
pursuant to this paragraph 16 (e) is in lieu of all damages, payments and
liabilities on account of the events described above for which such severance
pay may be due the Employee under paragraph 16 (e) of this Agreement. This
paragraph 16 (e) shall be binding upon and inure to the benefit of the Employee
and the Employer, and any successors or assigns thereof or any "person" as
defined herein. Should the Employee pursue any other remedies or bring any
actions or claims against the Employer or any successors or assigns thereof or
any "Person" as defined herein, the Employee shall have no right to any
severance pay or other benefits under this Agreement and the Employee agrees
that any severance received by the Employee pursuant to this paragraph 16(e)
will be immediately returned to the party paying such severance.
Notwithstanding the foregoing, the Employee shall not be
entitled to receive severance payments pursuant to this paragraph 16 (e) in the
event of an occurrence described in paragraph 16 (a), subparagraphs (5), (6),
(7), (8), (9), (10) or (11, to the extent of the Employee's breach), or in the
event the Employee terminates employment in accordance with paragraph 16 (c) and
the termination is not a result of or based upon the occurrence of any event
described in paragraph 16 (e) (ii) above.
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If all or any portion of the amounts payable to the Employee
under this Agreement, either alone or together with other payments which the
Employee has the right to receive hereunder, constitute "excess parachute
payments" within the meaning of Section 280G of 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 the Employer from which the Employee
has a right to receive payments subject to Sections 280G and 4999 of the Code
including, without limitation, any Salary Continuation Agreement made between
the Employer and the Employee, so as to cause a reduction of any excise tax
pursuant to Section 4999 of the Code to equal zero.
(f) To constitute a "Change in Control" as to the
Employee, a "Change in Control Event" described in subparagraph (1) of this
paragraph 16 (f) must relate to a corporation that is a "Service Recipient" as
defined in subparagraph (4) of this paragraph. The term "Change in Control" as
defined in this paragraph 16 (f) is intended to comply with all relevant
provisions of Proposed Treasury Regulation Section 1.409A-3(g)(5) and such final
regulation that may be adopted thereto 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) A "Change in Control Event" occurs on the
date any of the following events occur:
(i) 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.
(ii) 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.
(iii) 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.
(iv) 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 acquisitions.
Gross fair market value shall be
determined without regard to any
liabilities associated with the
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assets. However, this subparagraph
(iv) shall not apply to the
transfer of assets: (1) to an
entity that is controlled by the
shareholders of such corporation
immediately after the transfer; (2)
to a shareholder of such
corporation with respect to the
shareholder's stock or in exchange
for more stock; (3) to an entity of
which such corporation owns 50
percent or more of the total value
or voting power immediately after
the transaction; (4) 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 (5) 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.
(2) If any Person controls a corporation under
subparagraph 16 (f)(1)(i) or (ii), the
acquisition of additional control by the
same Person shall not cause a Change in
Control.
(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.
(4) The term "Service Recipient" includes all of
the following: (i) the corporation for which
the Employee performs services (relating to
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).
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(5) Notwithstanding the foregoing provisions, a
"Change in Control Event" shall not occur in
relation to (i) any changed position, title
or duties of the Employee or (ii) any
merger, consolidation, division or
reorganization of the Employer or any
subsidiary of the Employer or any change in
the Employee's employment in relation
thereto.
17. 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 Employee at the address listed in the Employee's personnel
file and to the Employer at its principal business office. A party may change
the address for receipt of notices by written notice in accordance with this
paragraph 17. 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.
18. Arbitration. To resolve employment disputes in an efficient
and cost-effective manner, the Employee and the Employer agree that any and all
claims arising out of or related to the Employee's employment that could be
filed in a court of law shall be submitted to final and binding arbitration, and
not to any other forum. The arbitration process shall be initiated by delivering
a written request for arbitration to the other party within the time limits that
would apply to the filing of a civil complaint in court. A late request will be
void. If the parties are unable to agree upon a neutral arbitrator, they will
obtain a list of arbitrators from a neutral dispute resolution service, and
strike names alternatively until one arbitrator remains. The arbitrator shall
conduct the arbitration in accordance with the procedures set forth in the most
recent version of the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association, except to the extent that any such rule
or procedure would invalidate the enforceability of this Agreement, and to the
extent that administration of the arbitration by American Arbitration
Association is required. Regardless of the outcome, the Employer shall pay all
the costs that are unique to the arbitration forum, namely the arbitrator's fee.
The arbitrator shall determine the prevailing party in the arbitration. Costs
and attorneys' fees shall be awarded to the prevailing party in accordance with
the same legal standards that would apply had the action been filed in court.
The arbitrator shall have the authority to order any legal or equitable remedy
that would be available in a civil or administrative action on the claim. The
arbitrator shall prepare a brief written decision that includes the essential
findings and conclusions upon which the award is based. This arbitration shall
be the exclusive means of resolving any claim arising out of the Employee's
employment, and no action will be filed in any court or other forum. However,
nothing in this agreement will affect National Labor Relations Board, Workers'
Compensation Appeals Board, Unemployment Insurance Appeals Board, Department of
Fair Employment and Housing or Equal Employment Opportunity Commission
proceedings, petitions for judicial review of a decision issued after an
administrative hearing or the ability of either party to seek injunctive relief
in an appropriate court of law. If any court of competent jurisdiction declares
that any part of this arbitration provision is illegal, invalid or
unenforceable, such a declaration will not affect the legality, validity or
enforceability of the remaining parts of the agreement and the illegal, invalid
or unenforceable part will no longer be part of this agreement. The parties
understand and agree that this arbitration provision shall be governed by and
interpreted under the Federal Arbitration Act. This arbitration agreement is a
waiver of all rights to a civil jury trial or participation in a civil class
action lawsuit for claims arising out of the Employee's employment.
19. 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
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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. Every
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.
20. Entire Agreement. With the exception of the parties' Deferred
Compensation Plan, Salary Continuation Agreement and Stock Option Agreement,
this Agreement supersedes any and all other agreements, either oral or in
writing, between the parties with respect to the employment of the Employee by
the Employer and contains all of the covenants and agreements between the
parties with respect to the employment of the Employee by the Employer. Each
party to this Agreement acknowledges that no other representations, inducements,
promises, or agreements, oral or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not set forth herein, and that
no other agreement, statement, or promise not contained in this Agreement shall
be valid or binding on either party.
21. Release of Rights. The Employee, for himself, and his heirs,
beneficiaries, executors, administrators, trustees, and any other legal or
personal representatives, agents, successors or permitted assignees or
transferees, further expressly agrees to and does hereby waive and relinquish
any and all rights and benefits under all agreements superseded by this
Agreement or otherwise waived under this Agreement and specifically releases the
Employer and its affiliates and subsidiaries, from any obligations, duties and
liabilities in relation thereto, including any matters covered or contemplated
by California Civil Code Section 1542 which reads as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
22. Modifications. Any modification of this Agreement will be
effective only if it is in writing and signed by a party or its authorized
representative.
23. Waiver. The failure of either party to insist on strict
compliance with any of the terms, provisions, covenants, or conditions of this
Agreement by the other party shall not be deemed a waiver of any term,
provision, covenant, or condition, individually or in the aggregate, unless such
waiver is in writing, nor shall any waiver or relinquishment of any right or
power at any one time or times be deemed a waiver or relinquishment of that
right or power for all or any other times.
24. Partial Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.
25. Interpretation. This Agreement shall be construed without
regard to the party responsible for the preparation of the Agreement and shall
be deemed to have been prepared jointly by the parties. Any ambiguity or
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uncertainty existing in this Agreement shall not be interpreted against either
party, but according to the application of other rules of contract
interpretation, if an ambiguity or uncertainty exists.
26. Governing Law and Venue. The laws of the State of California,
other than those laws denominated choice of law rules, shall govern the
validity, construction and effect of this Agreement. Any action which in any way
involves the rights, duties and obligations of the parties hereunder shall be
brought in the courts of the State of California and venue for any action or
proceeding shall be in Sacramento County or in the United States District Court
for the Eastern District of California, and the parties hereby submit to the
personal jurisdiction of said courts.
27. Payments Due Deceased Employee. If the Employee dies prior to
the expiration of the term of his employment, any payments that may be due the
Employee from the Employer under this Agreement as of the date of death shall be
paid to the Employee's heirs, beneficiaries, successors, permitted assigns or
transferees, executors, administrators, trustees, or any other legal or personal
representatives.
28. Assignment/Binding Effect. Except as specifically set forth in
this Agreement, the Employee may not assign, delegate or otherwise transfer any
of the Employee's rights, benefits, duties or obligations under this Agreement
without the prior written consent of the Employer. This Agreement shall inure to
the benefit of and be binding upon the Employer and its successors and assigns,
and the Employee and the Employee's heirs, beneficiaries, successors, permitted
assigns or transferees, executors, administrators, trustees, and any other legal
or personal representatives.
29. Effect of Termination on Certain Provisions. Upon the
termination of this Agreement, the obligations of the Employer and the Employee
hereunder shall cease except to the extent of the Employer's obligation to make
payments, if any, to or for the benefit of the Employee following termination,
and provided that paragraphs 1 (to the extent of waivers and releases therein),
5, 6, 7, 17, 18, 19, 20, 23, 24, 25, 26, and 27 shall remain in full force and
effect.
30. Advice of Counsel and Advisors. The Employee acknowledges and
agrees that he has read and understands the terms and provisions of this
Agreement and prior to signing this Agreement, he has read and had the advice of
counsel and/or such other advisors as he deemed appropriate in connection with
his review and analysis of such terms and provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written in the City of Sacramento, County of Sacramento, State
of California.
EMPLOYER: EMPLOYEE:
AMERICAN RIVER BANKSHARES
By: /s/ XXXXXXX X. XXXX /s/ XXXXXXX X. TOW
------------------------ ----------------------
Xxxxxxx X. Xxxx Xxxxxxx X. Tow
Chairman of the Board
By: /s/ XXXXX X. XXXXX
------------------------
Xxxxx X. Xxxxx
Chief Executive Officer
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