SEVERANCE AND RELEASE AGREEMENT
This Severance and Release Agreement ("Agreement") dated effective February 4,
2005, is made by and between North Valley Bancorp and Yolo Community Bank
(collectively, "Employer"), and Xxxx X. XxXxxxxxx, an individual ("Employee").
RECITALS
A. Employee was employed by Employer as its
President/Chief Executive Officer of Yolo Community Bank and Executive Vice
President of North Valley Bancorp pursuant to that certain Employment Agreement
between the parties dated August 31, 2004 ("Employment Agreement"), attached as
Exhibit "A". Employer terminated the Employment Agreement as provided in Section
16(b) of that agreement on February 4, 2005. Pursuant to Section 16(d) of the
Employment Agreement, Employee is entitled to severance upon his release of all
claims Employee may have against Employer and its affiliates.
B. For and in consideration of the mutual promises and
covenants in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
OPERATIVE PROVISIONS
1. Termination of Employment.
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(a) Employer and Employee agree that the termination of
Employee's employment was effective as of February 4, 2005. Employee
acknowledges Employer has paid to Employee his unpaid salary and vacation wages
through that date within the time frame required by law. In addition, Employer
shall pay Employee the sum of Thirteen Thousand Three Hundred Thirty-Three
Dollars and 34/100 ($13,333.34) for one month's salary in lieu of the thirty
(30) day notice requirement contained in Section 16(b) of the Employment
Agreement. These amounts shall be subject to all applicable state and federal
withholdings, and shall be paid at the expiration of the Revocation Period
referenced in Section 5 below. Employee acknowledges that no other sums are due
and owing to him except as set forth in this Agreement.
(b) In addition, Employee hereby resigns as a Director of
Yolo Community Bank Board of Directors.
2. Severance Payment.
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(a) In consideration of Employee's execution of and
compliance with this Agreement, Employer agrees to pay to Employee severance in
the gross sum of One Hundred Sixty Thousand Dollars ($160,000.00), representing
twelve (12) months' Base Salary pursuant to Section 16(d) of the Employment
Agreement. This amount shall be subject to all applicable state and federal
withholdings, and shall be paid in accordance with Employer's normal payroll
practices, except that no severance shall be paid until the expiration of the
Consideration Period and Revocation Period referenced in paragraph 5 below.
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(b) In addition, Employer shall pay to Employee the sum
of Nine Thousand Five Hundred Dollars ($9500.00), which represents the pro-rata
portion of Employee's incentive compensation, based on the four (4) full months
Employee worked in the last fiscal year. The pro-rata incentive bonus shall be
paid upon the expiration of the Revocation Period.
(c) The parties agree that since Employer's executive
incentive compensation plan is discretionary, no sums shall be due and owing to
Employee for the current fiscal year.
(d) Pursuant to that certain unexecuted agreement
entitled North Valley Bank Salary Continuation Agreement ("SERP Agreement"),
Employee shall also receive Thirty-Six Thousand One Hundred Ninety-Four Dollars
($36,194.00) as the present value of vested termination benefit payable at age
65. This amount shall be subject to all applicable state and federal
withholdings. This payment shall be paid at the expiration of the Consideration
Period and Revocation Period referenced in paragraph 5 below.
(e) Employee shall also receive, upon expiration of the
Revocation Period, the following benefits in lieu of thirty (30) days' notice,
pro rata through March 6, 2005:
(i) Vacation accrual from February 4, 2005
through March 6, 2005 in the amount of One Thousand Twenty-five and thirty-four
cents ($1025.34);
(ii) Automobile expense of Six Hundred Dollars
($600);
(iii) Club membership dues in the amount of Five
Hundred Fifty Dollars and Forty-eight cents ($550.48);
(iv) The sum of One Hundred Sixteen Dollars and
sixty-seven cents ($116.67), the equivalent of Employer's contribution on behalf
of Employee for the month of March into Employer's 401(k) Plan. Employer
acknowledges that it has made Employer's contribution on behalf of Employee for
the month of February;
(v) The sum of One Thousand One Hundred
Twenty-two Dollars and seventy-three cents ($1122.73), the equivalent of
Employee's COBRA continuation health care and dental care payment for
participation in Employer's group health and dental plans for March. Employer
acknowledges that Employee was covered under such plan through February.
(f) Employer and Employee entered into that certain
agreement entitled North Valley Bancorp Executive Deferred Compensation
Agreement effective December 2004 ("Nonqualified Deferred Compensation
Agreement"). The parties agree that the funds deferred pursuant to the
Nonqualified Deferred Compensation Agreement shall be paid out to Employee
pursuant to the terms of that agreement.
Employee specifically acknowledges that the severance paid to him pursuant to
this Section 2 is sufficient consideration for Employee's obligations under this
Agreement.
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3. Compromise and Settlement. Employee, in consideration of the
promises and covenants made by Employer in this Agreement, hereby compromises,
settles and releases Employer from any and all past, present, or future claims,
demands, obligations, or causes of action, whether based on tort, contract, or
other theories of recovery arising from the employment relationship between
Employer and Employee, and the termination of that employment relationship. Such
claims include those Employee may have or has, or which may later accrue to or
be acquired by Employee, against Employer or its predecessors, successors in
interest, assigns, parent and subsidiary organizations, affiliates, and
partners, and its past, present, and future shareholders, members, officers,
directors, agents, and employees, and their heirs and assigns. Such claims
specifically include but are not limited to claims for wages, wrongful
termination, constructive discharge, rights to stock options or grants or his
rights as a shareholder of Employer, fraud, mental or emotional distress,
misrepresentation, attorney's fees, or any claim for discrimination under
federal or state law including, but not limited to, discrimination based on age,
sex, race, national origin, disability, marital status, or any claims under
Title VII of the Civil Rights Act, the Employee Retirement Income Security Act,
the Age Discrimination in Employment Act, Labor Code sections 132a and 4553, or
the Fair Employment and Housing Act of California.
4. Unknown Claims. Employee acknowledges that this Agreement
applies to all known or unknown, foreseen or unforeseen, injury or damage
arising out of or pertaining to the employment relationship and its termination,
and expressly waives any benefit he may have under Section 1542 of the
California Civil Code, which provides 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."
Employee understands and acknowledges that the significance and consequence of
this waiver of California Civil Code Section 1542 is that even if he should
eventually suffer injury arising out of or pertaining to the employment
relationship and its termination, he will be unable to make any claim for those
injuries. Furthermore, Employee acknowledges that he consciously intends these
consequences even as to claims for injuries that may exist as of the date of the
Agreement but which he does not know exist and which, if known, would materially
affect Employee's decision to execute this Agreement, regardless of whether
Employee's lack of knowledge is the result of ignorance, oversight, error,
negligence, or any other cause.
5. Waiver of Rights Under the Age Discrimination in Employment
Act. Employee specifically understands and acknowledges that the Age
Discrimination in Employment Act of 1967, as amended (the "ADEA"), provides
Employee the right to bring a claim against Employer if Employee believes that
Employee has been discriminated against on the basis of age. Employer
specifically denies any such discrimination. Employee understands the rights
afforded to him under the ADEA and agrees that he will not file any claim or
action against Employer or any of the entities released in Section 3 affiliated
with Employer based on any alleged violations of the ADEA. Employee hereby
knowingly and voluntarily waives any right to assert a claim for relief under
this Act, including but not limited to back pay, front pay, attorneys fees,
damages, reinstatement or injunctive relief.
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Employee also understands and acknowledges that the ADEA requires Employer to
provide Employee with at least twenty-one (21) calendar days to consider this
Agreement ("Consideration Period") prior to its execution. Employee acknowledges
that he was provided with and has used the Consideration Period or,
alternatively, that he elected to sign the Agreement within the Consideration
Period and waives the remainder of the Consideration Period. Employee also
understands that Employee is entitled to revoke this Agreement at any time
during the seven (7) days following Employee's execution of this Agreement
("Revocation Period"). Employee also understands that any revocation of this
Agreement must be in writing and delivered to the attention of Xxxxxxx Xxxxxxx,
President of North Valley Bancorp, with a copy to Xxx X. Xxxxxx, General
Counsel, at Employer's office at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx,
prior to the expiration of the Revocation Period.
6. No Admission of Liability. Employee acknowledges that neither
this Agreement, nor payment of any consideration pursuant to this Agreement,
shall be taken or construed to be an admission or concession of any kind with
respect to alleged liability or alleged wrongdoing against Employee by Employer.
Employer specifically asserts that all actions taken with regard to Employee
were proper and lawful and affirmatively denies any wrongdoing of any kind.
7. Confidentiality. The parties acknowledge that federal
securities laws require that this Agreement be filed with the Securities and
Exchange Commission. Employee agrees, however, not to otherwise discuss or
publish the terms of this Agreement to any third party, except that Employee may
discuss this Agreement with his spouse, attorney, accountant, or other
professional person who may assist Employee in evaluating, reviewing, or
negotiating this Agreement or the tax implications of this Agreement. Employee
may also disclose this Agreement as may be required by way of legal process,
notice of which will be provided to Employer prior to disclosure.
8. No Reemployment; Return of Property. Employee specifically
agrees that Employee shall not seek reemployment with Employer or its parent or
subsidiaries or affiliate organizations, if any, at any time, nor shall Employer
at any time be under any obligation to rehire Employee. Employee has returned
all property belonging to Employer
9. Confidential Information.
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(a) Employee acknowledges that pursuant to Section 6 of
the Employment Agreement, he has a continuing obligation, even after termination
of the Employment Agreement, not to disclose to anyone any information relating
to Employer or any financial information, trade or business secrets, customer
lists, computer software or other information not otherwise publicly available
concerning the business operations of Employer. This includes, but is not
limited to, any financial information concerning any of Employer's customers, as
it may exist from time to time. All such information relating to either Employer
or its customers is strictly confidential and is a valuable, special, and unique
asset of Employer's business.
(b) Employee acknowledges and agrees that the covenants
contained in this Section 9 are material to this Agreement, and that a violation
of this Section shall constitute a material breach of this Agreement. Employer
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shall be entitled to receive injunctive relief to enforce these covenants, and
may seek any other remedy available to it by law.
10. References and Nondisparagement. Employer agrees that if it
receives any reference check inquiries relating to Employee, it will provide the
requesting party with Employee's position held, dates of employment, and, if
authorized, salary. Employer and Employee agree not to disparage each other.
11. Breach of Agreement. If Employee materially breaches this
Agreement, Employer shall have the right to withhold any payments due Employee
under this Agreement. If, however, a court of competent jurisdiction orders this
Agreement to be completely unenforceable, Employee shall repay to Employer the
total payments received under this Agreement within seven (7) calendar days from
the date of entry of the order.
12. Representation by Attorney. Employee acknowledges that
Employee has carefully read this Agreement; that Employee understands its final
and binding effect; that Employee has been given the opportunity to be
represented by independent counsel in negotiating and executing this Agreement
and that Employee has either chosen to be represented by counsel or has
voluntarily declined such representation; and that Employee understands the
provisions of this Agreement and knowingly and voluntarily agrees to be bound by
them.
13. No Reliance Upon Representations. Employee hereby represents
and acknowledges that in executing this Agreement, Employee does not rely and
has not relied upon any representation or statement made by Employer or by any
of Employer's past or present members, officers, directors, employees, agents,
representatives or attorneys with regard to the subject matter, basis or effect
of this Agreement.
14. No Pending Claim. Employee represents that Employee does not
currently have pending any complaint or action against Employer, or any of the
entities listed in Section 3, with any state, federal or local agency or court
based on any matters arising out of Employee's employment with Employer or its
termination, and will not do so at any time. Employee further represents that if
any such agency or court assumes jurisdiction of a complaint or action against
Employer, then Employee will direct that agency or court to withdraw from or
dismiss with prejudice the matter. Employee will not cooperate or participate in
the investigation or prosecution of any such complaint or action. Employee
further agrees not to participate in any way in any proceeding against Employer
except as may be required by law through a subpoena or similar court order.
Notwithstanding the foregoing, if Employee obtains against Employer a monetary
judgment or settlement for a claim released by him under this Agreement, the
total payments received by him shall be deducted from any such monetary judgment
or settlement.
15. Indemnification. Employer acknowledges that it has continuing
obligations toward Employee pursuant to that certain Indemnification Agreement
dated September 1, 2004 between Employer, Employee, North Valley Bank, and Yolo
Community Bank. Such obligations extend beyond the termination of Employee's
employment, as specifically set forth in Section 13 of the Indemnification
Agreement. Employer further acknowledges that as of the date of this Severance
Agreement, Employer has no knowledge of any facts to take, and therefore as of
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the date of this Agreement does not intend to take, any action against Employee
as a result of his employment with Employer or his holding of any officer or
director position with Employer, North Valley Bank, or Yolo Community Bank.
Employer reserves the right to take any such future action as may in its sole
discretion be necessary or appropriate to protect the interests of Employer,
North Valley Bank, or Yolo Community Bank, in the unlikely event that it
determines that facts exist that would support such an action.
16. Attorney's Fees. Each party shall bear its own attorney's fees
in the negotiation of this Agreement. Should any action be instituted to enforce
any provision of this Agreement, the prevailing party shall be entitled to
recover its costs and reasonable attorney's fees.
17. Entire Agreement. This Agreement and those surviving portions
of the Employment Agreement shall contain the entire agreement between the
parties, and they shall not be modified except in writing signed by the party to
be bound.
18. Severability. If a court of competent jurisdiction finds any
provision of this Agreement invalid or unenforceable as applied to any
circumstance, the remainder of this Agreement and the application of such
provision shall be interpreted so as best to effect the intent of the parties.
The parties further agree to replace any such void or unenforceable provision of
this Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the economic, business, or other purposes of the void or
unenforceable provision.
19. Counterpart Originals. This Agreement may be signed in
counterparts.
20. Governing Law. This Agreement shall be governed by the laws of
the State of California.
Date: March 3, 2005 Yolo Community Bank
By: /s/ XXX X. XXXXXX
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Xxx X. Xxxxxx
Corporate Secretary
Date: March 3, 2005 North Valley Bancorp
By: /s/ XXXXXXX XXXXXXX
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Xxxxxxx Xxxxxxx, President
Date: March 1, 2005
/s/ XXXX X. XXXXXXXXX
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Xxxx X. XxXxxxxxx
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