Exhibit 99.4
BANK OF XXXXXX, A DIVISION OF AMERICAN RIVER BANK
AMENDED SALARY CONTINUATION AGREEMENT
THIS AMENDED SALARY CONTINUATION AGREEMENT (this "Agreement") is made
and entered into this 21st day of February, 2008, by and between Bank of Xxxxxx,
a division of American River Bank with its main office in Jackson, California
(the "Bank"), and Xxxxx X. Standing, President of the Bank (the "Executive").
American River Bank is a California-chartered bank with its main office in
Sacramento, California. This Agreement is a restatement of the Agreement entered
into between Bank of Xxxxxx and later assumed by Bank of Xxxxxx, a division of
American River Bank and the Executive on April 1, 2004 and restated on June 2,
2006, and is intended to be modified as necessary to comply with Section 409A of
the Internal Revenue Code of 1986, as amended (the "Code") and Final Treasury
Regulations issued under Code section 409A Code 409A which became final on April
10, 2007.
WHEREAS, the Bank is a division of American River Bank and American
River Bank is a wholly-owned subsidiary of American River Bankshares, a
California corporation and bank holding company registered under the Bank
Holding Company Act of 1956, as amended, ("AMRB");
WHEREAS, the Executive has contributed substantially to the success of
the Bank, and the Bank desires that the Executive continue in its employ,
WHEREAS, to encourage the Executive to remain an employee of the Bank,
the Bank is willing to provide salary continuation benefits to the Executive,
payable out of the Bank's general assets,
WHEREAS, none of the conditions or events included in the definition of
the term "golden parachute payment" that is set forth in section 18(k)(4)(A)(ii)
of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in
Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)
(1)(ii)] exists or, to the best knowledge of the Bank, is contemplated insofar
as the Bank is concerned, and
WHEREAS, the parties hereto intend that this Agreement shall be
considered an unfunded arrangement maintained primarily to provide supplemental
retirement benefits for the Executive, and to be considered a non-qualified
benefit plan for purposes of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). The Executive is fully advised of the Bank's
financial status.
NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which art hereby
acknowledged, the parties hereto agree as follows.
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings specified.
1.1 "Accrual Balance" means the liability that should be accrued
by the Bank under generally accepted accounting principles ("GAAP") for the
Bank's obligation to the Executive under this Agreement, by applying Accounting
Principles Board Opinion No. 12, as amended by Statement of Financial Accounting
Standards No. 106, and the calculation method and discount rate specified
hereinafter. The Accrual Balance shall be calculated assuming a level principal
amount and interest as the discount rate is accrued each period. The principal
accrual is determined such that when it is credited with interest each month,
the Accrual Balance at Normal Retirement Age equals the present value of the
normal retirement benefits. The discount rate means the rate used by the Plan
Administrator for determining the Accrual Balance. The rate in based on the
yield on a 20-year corporate bond rated Aa by Xxxxx'x, rounded to the nearest
3%. The initial discount rate is 6.00%. In its sole discretion, the Plan
Administrator may adjust the discount rate to maintain the rate within
reasonable standards according to GAAP.
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1.2 "Beneficiary" means each designated person, or the estate of
the deceased Executive, entitled to benefits, if any, upon the death of the
Executive, determined according to Article 4.
1.3 "Beneficiary Designation Form" means the form established from
time to time by the Plan Administrator that the Executive completes, signs, and
returns to the Plan Administrator to designate one or more Beneficiaries.
1.4 "Change in Control" means, with respect to the Executive, the
occurrence of a "Change in Control Event" described in Section 1.4.1 with
respect to a corporation that is a "Service Recipient" as defined in Section
1.4.4. The term "Change in Control" as defined in this Section 1.4 is intended
to comply with all relevant provisions of Final Treasury Regulations 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.
1.4.1 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
Service Recipient 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 Service
Recipient 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 Service Recipient, 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 Service Recipient'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 Service Recipient 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 Service Recipient prior to such acquisition or
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 Service Recipient immediately after the
transfer; (ii) to a shareholder of such Service
Recipient with respect to the shareholder's stock or
in exchange for more stock; (iii) to an entity of
which such Service Recipient 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
Service Recipient 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
Service Recipient.
1.4.2 If any Person controls a corporation that is a
Service Recipient under paragraph (a) or (b) of Section 1.4.1, the acquisition
of additional control by the same Person shall not cause a Change in Control.
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1.4.3 Persons will be considered to be acting as a group in
accordance with the provisions of Final Treasury Regulations 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 Service Recipient 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.
1.4.4 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).
1.5 "Disability" shall have the meaning given such term in any
policy of disability insurance maintained by the Bank 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 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 the Bank.
1.6 "Effective Date" means April 1, 2004.
1.7 "Good Reason" shall have the same meaning specified in any
employment or severance agreement existing on the date hereof or catered into
after the date of this Agreement by the Executive and the Bank. If the term
"Good Reason" is not defined in an employment agreement or severance agreement,
it means:
(a) a material reduction in Executive's title or
responsibilities,
(b) a reduction in base salary as in effect on the date
of a Change in Control.
(c) relocation of the Bank's principal executive offices,
or requiring the Executive to change his principal work location, to any
location that is more than 15 miles from the location of the Bank's principal
executive offices on the date of this Agreement,
(d) the failure by the Bank to continue to provide the
Executive with compensation and benefits substantially similar to those provided
to him under any of the employee benefit plans in which the Executive becomes a
participant, or the taking of any action by the Bank that would directly or
indirectly materially reduce any of such benefits or deprive the Executive of
any material fringe benefit enjoyed by him at the time of the Change in Control,
or
(e) the failure of the Bank to obtain a satisfactory
agreement from any successor or assign of the Bank to assume and agree to
perform this Agreement, as contemplated in Section 7.5 hereof.
1.8 "Normal Retirement Age" means age 65.
1.9 "Normal Retirement Date" means the later of the Normal
Retirement Age and Termination of Employment with the Bank.
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1.10 "Person" means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or other entity.
1.11 "Plan Administrator" means the plan administrator described in
Article 8.
1.12 "Plan Year" means the calendar year ending on December 31.
1.13 "Termination for Cause" means the definition of termination
for cause specified in any severance or employment agreement existing on the
date hereof or hereafter entered into between the Executive and the Bank. If the
Executive is not a party to a severance or employment agreement containing a
definition of termination for cause, Termination for Cause means the Bank has
terminated the Executive's employment for any of the following reasons:
(a) gross negligence or gross neglect of duties,
(b) fraud, disloyalty or willful violation of any law or
significant Bank policy committed in the course of the Executive's employment
and resulting in an adverse effect on the Bank. No act or failure to act on the
Executive's part shall be considered "willful" unless the Executive acts without
good faith, or without good faith fails to act, and the Executive's action or
inaction is without a reasonable belief that his action or inaction is in the
Bank's best interests.
1.14 "Termination of Employment" means the Executive ceases to be
employed by the Bank for any reason whatsoever, excepting a leave of absence
approved by the Bank. For purposes of this Agreement, if there is a dispute over
the employment status of the Executive or the date of termination of the
Executive's employment, the Bank shall have the sole and absolute right to
decide the dispute, unless a Change in Control shall have occurred within 12
months before termination of employment.
1.15 The Executive shall be a "Specified Employee" if any stock of
AMRB (or any corporation or entity that would be considered as a single employer
with AMRB under Code section 414(b) or (c)) is publicly traded on an established
securities market or otherwise on the date of the Executive's Termination of
Employment and the Executive is treated as a "key employee" as of the date of
termination. The Executive shall be treated as a "key employee" for the 12 month
period beginning on April 1 of each year if he was a "key employee" of AMRB (or
any corporation or entity that would be considered as a single employer with
AMRB under Code section 414(b) or (c)), as defined under Code section
416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with regulations
thereunder and disregarding section 416(i)(5)) during the previous calendar
year.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. Upon the Executive's Termination of
Employment on or after the Normal Retirement Age for reasons other than death,
the Bank shall pay to the Executive the benefit described in this Section 2.1
instead of any other benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this
Section 2.1 is $32,000.
2.1.2 Payment of Benefits. Beginning with the month after
the Executive's Normal Retirement Date, the Bank shall pay the annual benefit
under Section 2.1 of this Agreement to the Executive in 12 equal monthly
installments on the first day of each month. The annual benefit shall be paid to
the Executive for 10 years. This payment schedule will be adjusted pursuant to
Section 2.6 if the Executive is a "Specified Employee" as defined in Section
1.15.
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2.2 Disability Benefit. If the Executive terminates employment
because of Disability before the Normal Retirement Age, the Bank shall pay to
the Executive the benefit described in this Section 2.2 instead of any other
benefit under this Agreement.
2.2.1 Amount of Benefit. The annual benefit under this
Section 2.2 is the Disability annual benefit amount set forth in Schedule A for
the Plan Year ending immediately before the date on which termination of the
Executive's employment occurs.
2.2.2 Payment of Benefit. Beginning with the month after
the month in which Termination of Employment because of Disability occurs, the
Bank shall pay the Disability annual benefit amount to the Executive in 12 equal
monthly installments on the first day of each month. The annual benefit shall be
paid to the Executive for 10 years. This payment schedule will be adjusted
pursuant to Section 2.6 if the Executive is a "Specified Employee" as defined in
Section 1.15.
2.3 Change-in-Control Benefit. If the Executive's employment with
the Bank terminates involuntarily within 12 months after a Change in Control or
if the Executive terminates employment voluntarily for Good Reason within 12
months after a Change in Control, the Bank shall pay to the Executive the
benefit described in this Section 2.3 instead of any other benefit under this
Agreement. However, no benefits shall be payable under this Agreement if
termination occurs under Article 5 of this Agreement.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the lesser of (a) the Normal Retirement Age Accrual Balance required by
Section 2.1 and (b) the amount that is one dollar less than the maximum amount
that may be paid to the Executive under this Agreement without causing the
Executive's total change-in-control benefits, whether payable under this
Agreement or otherwise, to exceed the Internal Revenue Code parachute payment
limitations under sections 280G and 4999 of the Internal Revenue Code. The
Executive understands and agrees that, under this Section 2.3, the Executive's
change-in-control benefit may be reduced in part or in whole as necessary to
avoid denial of the Bank's compensation deduction as a result of application of
section 280G of the Internal Revenue Code. All determinations made by the Bank
of the parachute payment limitations, the Executive's aggregate
change-in-control benefits, and the amount owing to the Executive under this
Section 2.3 shall be final and binding on the Executive.
2.3.2 Payment of Benefit: The Bank shall pay the
Change-in-Control benefit under Section 2.3 of this Agreement to the Executive
in a single lump sum no sooner than six (6) months and no later than nine (9)
months days following the occurrence of any event described in Section 2.3.
2.4 Petition for Payment of Normal Retirement Benefit or
Disability Benefit. If the Executive is entitled to the Disability benefit
provided by Section 2.2, or if the Executive is entitled to the normal
retirement benefit provided by Section 2.1 and the Executive shall have reached
the Normal Retirement Date, the Executive may petition the board of directors to
have the Accrual Balance amount corresponding to that particular benefit paid to
the Executive in a single lump sum. The board of directors shall have sole and
absolute discretion about whether to pay the remaining Accrual Balance in a lump
sum. If payment of the remaining Accrual Balance is paid in a single lump sum,
the Bank shall have no further obligations under this Agreement.
2.5 Change-in-Control Payout of Normal Retirement Benefit or
Disability Benefit Being Paid to the Executive at the Time of a Change in
Control. If a Change in Control occurs at any time during the entire salary
continuation benefit payment period and if at the time of that Change in Control
the Executive is receiving the benefit provided by Section 2.1.2 or Section
2.2.2, the Bank shall pay the remaining salary continuation benefits to the
Executive in a single lump sum within 30 days after the Change in Control,
unless the Change in Control occurs within six (6) months of the Termination of
Employment, in such case the Executive must wait until the expiration of six (6)
months after Termination of Employment to receive such lump sum payment. The
lump-sum payment due to the Executive as a result of a Change in Control shall
be an amount equal to the Accrual Balance amount corresponding to that
particular benefit then being paid.
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2.6 Delayed Payment For Specified Employees. Notwithstanding the
foregoing provisions of this Article 2, if the Executive is a "Specified
Employee" at the time benefit payments are scheduled to begin due to Executive's
Termination of Employment, payments shall not begin until at least six months
following the date of the Executive's Termination of Employment. If benefit
payments to the Executive are delayed pursuant to this section, the first
payment after the six month delay shall be equal to the sum of all payments that
would have been made to the Executive from the date of the Executive's
Termination of Employment to the first payment date. Subsequent payments shall
be in the amounts specified above, as applicable.
ARTICLE 3
DEATH BENEFITS
After the Executive's death, whether before or after Termination of
Employment, the Bank shall pay to the Executive's Beneficiary the benefit
described in the Endorsement Split Dollar Agreement attached to this Agreement
as Addendum A instead of any other benefit payable under this Agreement, in
accordance with the terms and conditions of the Endorsement Split Dollar
Agreement.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall have the right
to designate at any time a Beneficiary to receive any benefits payable under
this Agreement upon the death of the Executive. The Beneficiary designated under
this Agreement may be the same as or different from the beneficiary designation
under any other benefit plan of the Bank in which the Executive participates.
4.2 Beneficiary Designation: Change. The Executive shall designate
a Beneficiary by completing and signing the Beneficiary Designation Form and
delivering it to the Plan Administrator or its designated agent. 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. The Executive shall have the right to
change a Beneficiary by completing, signing, and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator's rules and
procedures, as in effect from firm to time. Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Plan Administrator shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Executive and accepted by the Plan Administrator before the Executive's death.
4.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received, accepted, and acknowledged in
writing by the Plan Administrator or its designated agent.
4.4 No Beneficiary Designation. If the Executive dies without a
valid beneficiary designation, or if all designated Beneficiaries predecease the
Executive, then the Executive's spouse shall be the designated Beneficiary. If
the Executive has no surviving spouse, the benefits shall be made to the
personal representative of the Executive's estate.
4.5 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, the Bank may pay such benefit to the
guardian, legal representative, or person having the care or custody of the
minor, incapacitated person, or incapable person. The Bank may require proof of
incapacity, minority, or guardianship as it may deem appropriate before
distribution of the benefit. Distribution shall completely discharge the Bank
from all liability for the benefit.
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ARTICLE 5
GENERAL LIMITATIONS
5.1 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement and this Agreement shall terminate if Termination of Employment (a) is
a result of Termination for Cause, or (b) occurs before Normal Retirement Age
(excepting Termination of Employment because of Disability or within 12 months
after a Change in Control). Likewise, the Bank shall not pay any benefits under
the Endorsement Split Dollar Agreement attached to this Agreement as Addendum A,
and the Endorsement Split Dollar Agreement also shall terminate, if Termination
of Employment (a) is a result of Termination for Cause, or (b) occurs before
Normal Retirement Age (excepting Termination of Employment because of Disability
or within 12 months after a Change in Control).
5.2 Suicide or Misstatement. The Bank shall not pay any benefit
under this Agreement if the Executive commits suicide within one year after the
date of this Agreement. In addition, the Bank shall not pay any benefit under
this Agreement if the Executive has made any material misstatement of fact on
any application or resume provided to the Bank, or on any application for any
benefits provided by the Bank to the Executive. 5.3 Removal. If the Executive is
removed from office or permanently prohibited from participating in the Bank's
affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations of the
Bank under this Agreement shall terminate as of the effective date of the order.
5.4 Default. Notwithstanding any provision of this Agreement to
the contrary, if the Bank is in "default" or "in danger of default," as those
terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12
U.S.C. 1813(x), all obligations under this Agreement shall terminate.
5.5 FDIC Open-Bank Assistance. All obligations under this
Agreement shall terminate, except to the extent determined that continuation of
the contract is necessary for the continued operation of the Bank, when the
Federal Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in Federal
Deposit Insurance Act section 13(c). 12 U.S.C. 1823(c). Rights of the parties
that have already vested shall not be affected by such action, however.
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 the Bank a written claim for the benefits.
6.1.2 Timing of Bank Response. The Bank shall respond to
such claimant within 90 days after receiving the claim. If the Bank determines
that special circumstances require additional time for processing the claim, the
Bank 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 the Bank expects to render its
decision.
6.1.3 Notice of Decision. If the Bank denies part or all of
the claim, the Bank shall notify the claimant or writing of such denial. The
Bank shall write the notification in a manner calculated to be understood by the
claimant. The notification shall set forth:
6.1.3.1 The specific reasons for the denial,
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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 the Bank denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Bank
of the denial, as follows:
6.2.1 Initiation: Written Request. To initiate the review,
the claimant, within 60 days after receiving the Bank's notice of denial, must
file with the Bank 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. The Bank 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,
the Bank 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 Bank Response. The Bank shall respond in
writing to such claimant within 60 days after receiving the request for review.
If the Bank determines that special circumstances require additional time for
processing the claim, the Bank 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 the Bank expects
to render its decision.
6.2.5 Notice of Decision. The Bank shall notify the
claimant in writing of its decision on review. The Bank shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall act forth:
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. Subject to Section 7.13 of this
Agreement (a) this Agreement may be amended solely by a written agreement signed
by the Bank and by the Executive, and (b) except for termination occurring under
Article 5, this Agreement may be terminated solely by a written agreement signed
by the Bank and by the Executive.
7.2 Binding Effect. This Agreement shall bind the Executive and
the Bank, 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 the Bank, nor does it interfere with the Bank'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
mold, transferred, assigned, pledged, attached, or encumbered in any manner.
7.5 Successors; Binding Agreement. By an assumption agreement in
form and substance satisfactory to the Executive, the Bank shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Bank to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform this Agreement if no
such succession had occurred. The Bank's failure to obtain such an assumption
agreement before the succession becomes effective shall be considered a breach
of this Agreement and shall entitle the Executive to the Change-in-Control
benefit specified in Section 2.5
7.6 Tax Withholding. The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
7.7 Applicable Law. Except to the extent preempted by the laws of
the United States of America, the validity, interpretation, construction, and
performance of this Agreement shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to the
principles of conflict of laws of such state.
7.8 Unfunded Arrangement. The Executive and the Executive's
Beneficiary are general unsecured creditors of the Bank for the payment of
benefits under this Agreement. The benefits represent the mere promise by the
Bank to pay such benefits. The 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
is a general asset of the Bank to which the Executive and Beneficiary have no
preferred or secured claim.
7.9 Entire Agreement. This Agreement and the Endorsement Split
Dollar Agreement attached hereto as Addendum A constitute the entire agreement
between the Bank and the Executive as to the subject matter hereof. No rights
are granted to the Executive by this Agreement other than those specifically set
forth herein.
7.10 Severability. If for any reason any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held invalid, and to the full extent consistent with law
each such other provision shall continue in full force and effect. If any
provision of this Agreement is held invalid in part, such invalidity shall not
affect the remainder of such provision not held invalid, and to the full extent
consistent with law the remainder of such provision, together with all other
provisions of this Agreement, shall continue in full force and effect.
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7.11 Headings. The captions and headings of sections herein are
included solely for convenience of reference and shall not affect the meaning of
interpretation of any provision of this Agreement.
7.12 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed, certified or registered mail, return
receipt requested, with postage prepaid, to the following addresses or to such
other address as either party may designate by like notice.
(a) If to the Bank to:
Board of Directors
Bank of Xxxxxx, a division of American River Bank,
c/o American River Bank
0000 Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
If to the Executive, to:
Xxxxx X. Standing
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxx 00000
and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.
7.13 Termination or Modification of Agreement Because of Changes in
Law. Rules or Regulations. The Bank is entering into this Agreement on the
assumption that certain existing tax laws, rules, and regulations will continue
in effect in their current form. If that assumption materially changes and the
change has a material detrimental effect on this Agreement, then the Bank
reserves the right to terminate or modify this Agreement accordingly, subject to
the written consent of the Executive, which shall not be unreasonably withheld.
This Section 7.13 shall become null and void if a Change in Control occurs.
7.14 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
the Bank 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.
7.15 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
55
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.
ARTICLE 8
ADMINISTRATION OF AGREEMENT
8.1 Plan Administrator Duties. This Agreement shall be
administered by a Plan Administrator consisting of the board or such committee
or person(s) as the board shall appoint. The Executive may be a member of the
Plan Administrator. The Plan Administrator shall also have the discretion and
authority to (a) make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Agreement and (b) decide or resolve
any and all questions, including interpretations of this Agreement, as may arise
in connection with the Agreement.
8.2 Agents. In the administration of this Agreement, the Plan
Administrator may employ agents and delegate to them such administrative duties
as it sees fit (including acting through a duly appointed representative) and
may from time to time consult with counsel, who may be counsel to the Bank.
8.3 Binding Effect of Decisions. The decision or action of the
Plan Administrator with respect to any question arising out of or in connection
with the administration, interpretation, and application of the Agreement and
the rules and regulations promulgated hereunder shall be final and conclusive
and binding upon all persons having any interest in the Agreement. No Executive
or Beneficiary shall be deemed to have any right vested or nonvested, regarding
the continued use of any previously adopted assumptions, including but not
limited to the discount rate and calculation method described in Section 1.1.
8.4 Indemnity of Plan Administrator. The Bank shall indemnify and
hold harmless the members of the Plan Administrator against any and all claims,
losses, damages, expenses, or liabilities arising from any action or failure to
act with respect to this Agreement, except in the case of willful misconduct by
the Plan Administrator or any of its members.
8.5 Bank Information. To enable the Plan Administrator to perform
its functions, the Bank shall supply full and timely information to the Plan
Administrator on all matters relating to the date and circumstances of the
retirement, Disability, death, or Termination of Employment of the Executive and
such other pertinent information as the Plan Administrator may reasonably
require.
IN WITNESS WHEREOF, the Executive and a duly authorized Bank director
have executed this Salary Continuation Agreement as of the date first written
above.
THE EXECUTIVE: THE BANK:
BANK OF XXXXXX, A DIVISION OF
AMERICAN RIVER BANK
/s/ Xxxxx X. Standing /s/ Xxxxxxx X. Xxxx
----------------------------------- -----------------------------------------
Xxxxx X. Standing By:
Xxxxxxx X. Xxxx
Chairman of the Board
56
BENEFICIARY DESIGNATION
BANK OF XXXXXX
SALARY CONTINUATION AGREEMENT
I, Xxxxx X. Standing, designate the following as beneficiary of any
death benefits under this Salary Continuation Agreement:
Primary: Xxxxxx Xxxx Standing
Contingent: Xxxxxxxx Xxxx Standing, II
Xxxxxx Xxxx Standing, Trustees
UA DTD. Dec. 21, 1999 "The Standing 1999
Revocable Trust"
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 the Bank. 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. Standing
Date: February 21, 2008
-----------------
Accepted by the Bank this 21st day of February, 2008.
/s/ Xxxxxxx X. Xxxx
---------------------------
By:
Xxxxxxx X. Xxxx
Chairman of the Board
57
Schedule A
Bank Of Xxxxxx
Salary Continuation Agreement
Participant Name: Xxxxx Standing
Early Disability
Termination Benefit
Plan Year Executive's Early Annual Benefit Payable/year
Ending Age at Accrual Termination Vested Payable @ After
Plan December Plan Year Balance Vesting Accrual Normal Termination of
Year 31st End @ 6%(1) Schedule(2) Balance Retirement Employment(3)
---- --------- ---------- -------- ------------- -------- --------- -------------
1 2004 61 41,794 0% 0 0 5,357
2 2005 62 100,176 0% 0 0 5,357
3 2006 63 162,061 0% 0 0 12,840
4 2007 64 227,660 0% 0 0 20,773
5 2008(4) 65 243,092 N/A 243,092 N/A 29,181
6 2009 66 210,136 N/A 210,136 N/A N/A
7 2010 67 189,709 N/A 189,709 N/A N/A
8 2011 68 168,056 N/A 168,056 N/A N/A
9 2012 69 145,105 N/A 145,105 N/A N/A
10 2013 70 120,776 N/A 120,776 N/A N/A
11 2014 71 94,988 N/A 94,988 N/A N/A
12 2015 72 67,652 N/A 67,652 N/A N/A
13 2016 73 38,676 N/A 38,676 N/A N/A
14 2017 74 7,962 N/A 7,962 N/A N/A
15 2018 75 0 N/A 0 N/A N/A
NOTES:
1 Accrual balance reflects payments at the beginning of each month after
retirement.
2 Participant is not vested till the normal retirement age.
3 Disability benefit is calculated as an annual payment stream of the accrual
balance that exists at the end of the year preceding the year in which
Termination of Employment because of Disability occurs, using a standard
discount rate (6.00%).
4 The projected retirement occurs on 03/23/2008, with the first normal
monthly retirement benefit commencing on 04/01/2008, subject to Section
2.6. The accrual balance at the end of 03/23/2008 will be $243,092.
58
