SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 31, 2000
NORTH VALLEY BANCORP
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-10652 94-2751350
(State or other jurisdiction (File Number) (IRS Employer
of incorporation) Identification No.)
880 EAST CYPRESS AVENUE 96002
REDDING, CALIFORNIA
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (530) 221-8400
This Form 8-K consists of 52 pages. The Exhibit Index is on Page 4.
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ITEM 5. OTHER EVENTS
North Valley Bancorp (the "Registrant") is a California corporation and
the registered bank holding company for North Valley Bank, a California banking
corporation with its headquarters in Redding, California. On October 3, 1999,
the Registrant entered into a certain Agreement and Plan of Reorganization and
Merger (the "Plan of Reorganization") with Six Rivers National Bank, a national
banking association with its headquarters in Eureka, California ("Six Rivers"),
and NVB Interim National Bank, an interim national banking association to be
formed at the direction of the Registrant to facilitate the business combination
contemplated by the parties. Under the terms of the Plan of Reorganization, Six
Rivers is expected to merge with and into NVB Interim National Bank and the
resulting national banking association will continue operations with the
national bank charter number of Six Rivers and the name "Six Rivers National
Bank" as a wholly owned subsidiary of the Registrant.
Upon consummation of the transactions described in the Plan of
Reorganization, currently expected to occur on or before July 31, 2000, unless
extended by the parties, the Registrant would have two banking subsidiaries:
North Valley Bank and Six Rivers National Bank. The closing of such transactions
is subject to the prior approval of the shareholders of the Registrant and Six
Rivers, respectively, plus the receipt of all applicable regulatory approvals.
Pursuant to the Plan of Reorganization, and with the cooperation of Six
Rivers, the Registrant has prepared and filed with the Commission a registration
statement on Form S-4 under and pursuant to the Securities Act of 1933
(registration number 333-93597) to serve as the joint proxy statement/prospectus
for the purpose of submitting the terms of the Plan of Reorganization to a vote
of the shareholders of the Registrant and to a vote of the shareholders of Six
Rivers at special meetings called for the purpose. As permitted by Form S-4, the
Registrant intends to incorporate by reference certain reports and other
information regarding the Registrant previously filed and to be filed with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Common Stock of Six Rivers is registered pursuant to
Section 12(g) of the Exchange Act and the reports and other information required
of Six Rivers under the Exchange Act are filed with the Office of the
Comptroller of the Currency, the federal agency vested with the powers,
functions and duties of the Commission with respect to national banks under
Section 12(i) of the Exchange Act. Six Rivers and the Registrant have agreed
that certain reports and other information regarding Six Rivers, including
reports and other information previously filed and to be filed with the
Comptroller of the Currency pursuant to the Exchange Act, should be incorporated
by reference into the Form S-4 intended to be filed with the Commission by the
Registrant in accordance with the Plan of Reorganization. To accomplish this
end, Six Rivers and the Registrant have also agreed that each such report or
other information, as and when filed by Six Rivers with the Comptroller of the
Currency, shall be filed with the Commission as an exhibit to a Form 8-K Current
Report of the Registrant.
In accordance with the above, copies of certain information of Six
Rivers are filed as exhibits to this report and are incorporated herein by this
reference as if set forth in full. Such information supplements the reports and
other information filed as exhibits to the Current Report on Form 8-K previously
filed by the Registrant on December 23, 1999.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
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99.12 Employment Agreement dated April 1, 1999, between Six
Rivers National Bank and Michael W. Martinez
99.13 Supplemental Executive Retirement Agreement dated February
1, 1999, between Six Rivers National Bank and Michael W.
Martinez
99.14 Employment Agreement dated April 1, 1999, between Six
Rivers National Bank and Margie L. Plum
99.15 Supplemental Executive Retirement Agreement dated February
1, 1999, between Six Rivers National Bank and Margie L.
Plum
99.16 Employment Agreement dated April 1, 1999, between Six
Rivers National Bank and Shelton J. Francis
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTH VALLEY BANCORP
(Registrant)
Date: January 31, 2000. By: /s/ SHARON L. BENSON
------------------------------
Sharon L. Benson
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
NO. IDENTITY PAGE NOS.
- -- -------- ---------
99.12 Employment Agreement dated April 1, 1999, between Six Rivers 5
National Bank and Michael W. Martinez
99.13 Supplemental Executive Retirement Agreement dated February 1, 16
1999, between Six Rivers National Bank and Michael W. Martinez
99.14 Employment Agreement dated April 1, 1999, between Six Rivers 25
National Bank and Margie L. Plum
99.15 Supplemental Executive Retirement Agreement dated February 1, 34
1999, between Six Rivers National Bank and Margie L. Plum
99.16 Employment Agreement dated April 1, 1999, between Six Rivers 43
National Bank and Shelton J. Francis
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EMPLOYMENT AGREEMENT
This employment agreement (this "Agreement") is entered into as of this
1st day of April, 1999, by and between Six Rivers National Bank, a national bank
("Bank") and Michael W. Martinez ("Employee") on the following terms and
conditions.
1. POSITION
Subject to the Office of the Comptroller of the Currency
("OCC") not objecting to Employee acting in both capacities, Employee shall be
Bank's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"). If
the OCC objects to Employee acting in both capacities, then Employee shall be
either Bank's Chief Executive Officer or its Chief Financial Officer. In the
roles of Chief Executive Officer and/or Chief Financial Officer, Employee shall
have the duties set forth in this Agreement and in the By-Laws of Bank, subject
to the direction of the Board of Directors of Bank.
(a) In addition to such other duties as may be assigned
to him, in his role as Chief Executive Officer Employee shall be responsible for
the overall, day-to-day operation and administration of Bank and shall assume
responsibility for and oversee the development and implementation of the
policies and procedures for the operating functions of Bank. Employee shall be
appointed to the board of directors of Bank and, subject to the vote of the
Shareholders of Bank, shall be renominated to and remain on the board of
directors during the term of this Agreement and any extensions thereof.
Employee's principal responsibilities and duties as CEO shall include the
following:
(i) Planning and developing investment, loan,
interest rate risk and loan loss reserve policies designed to ensure optimal
monetary returns in accordance with the availability of investment funds,
government restrictions, and sound financial practices;
(ii) Coordinating communication and reporting
activities of Bank between divisions, departments and branch offices to ensure
the availability of data required for efficient daily operations;
(iii) Delegating to subordinate corporate officers
authority for administering activities and operations under their control;
(iv) Reviewing reports and financial statements
to determine policy changes due to changes in economic conditions;
(v) Serving as Bank's representative in
professional, business and community organizations to promote Bank's products
and services;
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(vi) Studying the activities of related financial
industries such as insurance, real estate and securities;
(vii) Analyzing the financial services available
in the communities in which Bank operates and developing products and services
that are competitive with other financial services products and providers within
those communities;
(viii) Supervising the development of Bank's budget
and monitoring Bank's financial activities;
(ix) Ensuring that Bank's operations are
conducted in accordance with applicable laws and regulations;
(x) Operating Bank, its properties and related
interests in accordance with the management philosophy and basic objectives of
the Board of Directors.
(xi) Operating Bank on a profitable basis and in
accordance with the profit goals established by the Board;
(xii) Exercising diligence with respect to the
control of the costs of operation and other expenses directly or indirectly
involving interests of Bank;
(xiii) Achieving Bank's business development
objectives, including the growth of both loans and deposits and general banking
operations of Bank;
(xiv) Directing the development and implementation
of Bank's policies and procedures in the functional areas of credit
administration, loan and client development, finance and accounting, human
resources, and legal and regulatory compliance;
(xv) Overseeing the development and
implementation of and adherence to Bank's annual operating budget and business
plan;
(xvi) Serving as Bank's liaison officer for
examination teams from various regulatory agencies;
(xvii) Overseeing Bank's adherence to and
compliance with regulatory reporting requirements;
(xviii) Overseeing human resources management
compliance with labor laws and the effectiveness of human resources management
in the selection and evaluation of personnel;
(ixx) Supervising the officers and employees of
Bank;
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(xx) Reviewing and approving all compensation
recommendations for officers and employees; and
(xxi) Acting as an ex officio member of all
committees of the Board except the audit committee.
(b) Also in addition to such other duties as may be
assigned to him, in his role as Chief Financial Officer Employee shall direct
Bank's financial planning and accounting functions as well as its relationships
with shareholders and the financial community. Employee's principal
responsibilities and duties as CFO shall include the following:
(i) Supervising and directing Bank's budgeting
processes, internal audits, tax reporting, accounting functions, purchasing,
data processing, fixed asset purchases, service contracts, record retention
programs, investments and insurance coverage;
(ii) Supervising Bank's Information Services
Department in the development of the procedures and systems necessary to
maintain Bank's records and provide adequate accounting controls and services;
(iii) Supervising Bank employees who act as
custodians of Bank's funds, securities and other assets;
(iv) Reviewing Bank's financial position and
preparing and publishing Bank's periodic financial and operating reports;
(v) Analyzing, consolidating and directing
Bank's cost accounting procedures in conjunction with the production of
statistical and routine reports;
(vi) Overseeing and directing the preparation and
issuance of Bank's annual report to shareholders;
(vii) Directing and analyzing studies of general
economic, business and financial conditions and their impact on Bank's policies
and operations;
(viii) Maintaining awareness of legal and
regulatory developments through participation in trade associations, review of
trade periodicals, contact with regulators, and similar and related activities;
(ix) Participating in activities designed to
develop and maintain new and existing client relationships;
(x) Participating as a member of Bank's senior
management team; and
(xi) Participating as a member of Bank's
Asset-Liability Committee.
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2. EXCLUSIVITY
Employee agrees that throughout the term hereof he shall
diligently devote his full time and best efforts to Bank's business. Employee
agrees to perform his services conscientiously, efficiently and to the best of
his ability. Except with the prior consent of Bank's board of directors,
Employee will not engage directly or indirectly in any other business activity
(whether or not for pecuniary advantage) that is or may be competitive with or
might place him in a competing position to that of Bank or any company
affiliated with Bank. Notwithstanding the foregoing, Bank agrees that nothing
contained herein shall prevent Employee from making passive investments in other
non-competing businesses. Employee agrees that he shall not engage in conduct
which is in contravention of Bank's conflict of interest policy.
3. TERM
Employee's employment under this Agreement shall commence on
April 1, 1999 (the "Effective Date") and shall continue thereafter for a period
of three years from the date thereof ("Term").
4. COMPENSATION
(a) SALARY
Bank shall pay Employee a base salary ("Base Salary")
of $137,000 per annum, less appropriate withholdings, taxes and similar
deductions, payable in equal installments on those days when Bank normally pays
its Employees. Not less than once each 12 months, the board of directors shall
review the Base Salary of Employee for consideration of increasing the Base
Salary based upon the performance of Employee, market conditions for salaries to
individuals similarly employed, increases in the cost of living, and similar
factors.
(b) BONUS
At the end of each calendar year, the amount of bonus
compensation, if any, to be paid to Employee shall be determined in the sole
discretion of the Board of Directors of Bank based upon the performance of
Employee and the results of Bank's operations.
(c) BUSINESS EXPENSES
In accordance with Bank policy as it may exist from
time to time, and subject to the approval of all such expenses by the Board of
Directors of Bank, Employee shall be entitled to reimbursement by Bank for any
ordinary, reasonable business expenses incurred by Employee in the performance
of Employee's duties and in acting for Bank during the term of this Agreement,
provided that Employee furnishes to Bank substantially adequate records and
other documentary evidence as required by Bank's policies or by federal and
state statutes and regulations with respect to the substantiation of such
expenditures as deductible business expenses of Bank.
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(d) BENEFITS
During the term of his employment under this
Agreement, Employee shall be entitled to receive the following benefits:
(i) Employee shall be eligible to participate in
all employee benefit plans maintained by Bank, including (without limitation)
any disability, health, accident and other insurance programs, paid vacations,
and similar plans or programs, subject to terms and conditions of each plan
currently in effect.
(ii) Employee shall receive from Bank a car
allowance of $500 per month.
(iii) Subject to availability at customary and
usual rates, Bank shall provide term insurance on the life of Employee in a
principal amount equal to three times Employee's Base Salary, up to a maximum
principal amount of $300,000. Employee shall be responsible for a portion of the
premium due on said insurance, as determined by Bank's benefit plan for other
full time employees.
(e) STOCK OPTIONS
Employee shall be eligible to participate in Bank's
Stock Option Plan (the "Plan"). Employee will be granted options in the
discretion of Bank's Board of Directors.
5. DISABILITY AND DEATH
(a) If employee suffers a physical or psychological
condition which renders him incapable of performing the essential functions of
his job with or without a reasonable accommodation prior to the termination of
this Agreement, then, to the extent permitted by law, Bank shall have the right
upon ten days written notice to terminate this Agreement and Employee's
employment hereunder.
(b) Immediately following the date on which Bank
terminates Employee's employment pursuant to Section 5(a) of this Agreement, or
earlier if required by law, Bank shall pay to Employee all incurred but
unreimbursed business expenses, accrued but unpaid salary, earned but unpaid
bonus, and accrued but unused vacation time, such salary and vacation time to
accrue until the last day of the month in which Employee's last working day
occurred. Thereafter, Bank's obligations shall terminate, but Employee shall
continue to be eligible to receive benefits under the disability plans, if any,
that Bank maintains as of the date of termination, provided that Employee
satisfies the requirements of such plans, if any.
(c) If Employee dies before receipt of the entire amount
specified in Section 5(b), then unpaid amounts shall be paid to Employee's
estate.
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(d) In the event of Employee's death during the term of
this Agreement, this Agreement shall terminate. Immediately after the date of
death, or earlier if required by law, Bank shall pay to Employee's estate all
incurred but unreimbursed business expenses, accrued but unpaid salary, earned
but unpaid bonus, and accrued but unused vacation time, with such salary and
vacation to accrue until the last day of the month in which Employee's last
working day occurred.
6. TERMINATION FOR CAUSE AND WITHOUT CAUSE
(a) Except as otherwise provided in this Agreement, this
Agreement may be terminated for cause immediately by Bank, at Banks option upon
notice to Employee, upon the occurrence of any of the following events. "Cause"
shall include but not be limited to the following items:
(i) A material breach by Employee of any of the
terms or provisions of this Agreement;
(ii) The repeated neglect by Employee of his
duties under this Agreement or any material act of dishonesty, intentional
misrepresentation or moral turpitude, including the misappropriation or
embezzlement of property of Bank or a customer of Bank, the unauthorized
intentional disclosure of confidential information, or a fraud by Employee in
the performance of his duties as an employee of Bank;
(iii) Employee is convicted of a misdemeanor
involving moral turpitude or a felony;
(iv) Conduct that would preclude Bank's ability
to bond Employee; or
(v) A written finding, order or directive from
any state or federal banking regulator with jurisdiction over Employer that
Employee has operated Bank in an unsafe manner or ordering the removal of
Employee as an executive officer of Bank.
In the event Employee is terminated for cause,
Employee shall be entitled to receive salary through the effective date of the
termination, any incurred but unreimbursed business expenses, and any accrued
but unused vacation time as of the date of termination. Employee shall not he
entitled to any other compensation.
(b) During the Term, this Agreement may be terminated
immediately without cause by Bank upon written notice except as otherwise
provided for elsewhere in this Agreement. For purposes of this provision,
"termination without cause" shall include (i) assignment of employee to duties
of substantially lesser responsibility to those described in Section 1 hereof,
(ii) a material adverse change in the position of Chief Executive Officer,
including title, lines of reporting, authority or responsibilities, or (iii)
adverse changes in levels of base salary.
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(i) Upon notice by Employee, Bank shall have
right to correct any changes referenced above by Employee, within 30 days of
said notification, and restore Employee to the position described in Section 1
of this Agreement.
(ii) If Employee's employment is terminated
without cause by Bank under this section, Employee shall be entitled to receive
(within ten days of termination) salary through the effective date of the
termination, a lump sum amount equal to the total of payments of Base Salary
remaining to be paid during the Term, any accrued but unused vacation pay as of
the date of termination, and any incurred but unreimbursed business expenses;
provided, however, that in the event the Office of the Comptroller of the
Currency ("OCC") does not approve the payment to Employee of a lump sum equal to
the total of payments of Base Salary remaining to be paid during the Term, then
the amount of the payment to Employee as the result of termination without cause
shall be such lesser amount as is approved by the OCC; provided further,
however, that in no event shall the amount paid to Employee as the result of
termination without cause be less than the smaller of (A) 18 months Base Salary
or (B) the total of payments of Base Salary remaining to be paid during the
Term.
(c) During the Term, this Agreement may be terminated
without cause by Employee on 90 days notice to Bank. If this Agreement is
terminated without cause by Employee, Employee shall be entitled to receive
salary through the effective date of termination, any accrued but unused
vacation pay as of the date of termination, and any incurred but unreimbursed
business expenses.
(d) Unless otherwise agreed, if Employee is terminated
for any reason or resigns for any reason, Employee agrees to resign immediately
from the Board of Directors and all committees or other positions held with
Bank, effective as of the last date of employment.
7. TRANSITION AGREEMENT
This Agreement incorporates by reference the terms of the
Transition Agreement between Bank and Employee dated June 16, 1997 ("Transition
Agreement"). Nothing contained in this Agreement shall be deemed to contradict
or to be inconsistent with any of the terms of the Transition Agreement. Any and
all rights created pursuant to the Transition Agreement shall be in addition to
Employee's rights pursuant to this Agreement.
8. OWNERSHIP OF CONFIDENTIAL PROPRIETARY INFORMATION
All records of the accounts of customers, and any other
records and books relating in any manner whatsoever to the customers of Bank,
and all other files, books and records and other materials owned by Bank or used
by it in connection with the conduct of its business, whether prepared by
Employee or otherwise coming into his possession, shall be the exclusive
property of Bank regardless of who actually prepared the original material, book
or record. All such books and records and other materials shall be immediately
returned to Bank by Employee on any termination of his employment.
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9. TRADE SECRETS
During the Term, Employee will have access to and become
acquainted with what Employee and Bank acknowledge are trade secrets, including
the names of customers and clients of Bank, their financial condition and
financial needs, financial information regarding Bank and other information
relating to Bank's products, services and methods of doing business. Employee
agrees not to disclose any of Bank's trade secrets, directly or indirectly, or
use them in any way, either during the term of employment (except as required in
the course of employment with Bank) or for a period of twelve months after the
termination of this Agreement. Employee will not, for one year following the
termination of Employee's employment with Bank, solicit for employment elsewhere
individuals who are active, full-time employees of Bank.
10. INDEMNIFICATION
To the extent permitted by and consistent with Section 317 of
the California Corporations Code ("Section 317"), the Articles of Incorporation
and the Bylaws of Bank, Bank shall indemnify Employee for expenses, judgments,
fines, settlements and other amounts actually incurred by Employee in connection
with any proceeding to which Employee is a party by reason of the fact that
Employee is or was an agent of Bank (as defined in Section 317) if the
proceeding arose from acts or omissions in the course and scope of Employee's
employment other than willful misconduct or acts not covered by any
indemnification agreement between Bank and Employee. Bank shall advance on
behalf of Employee all costs, including attorneys' fees, as necessary with
respect to any such proceeding. In the event any applicable law shall require
the issuance of an undertaking by Employee, such shall be acceptable without
bond, collateral or any other security being given by Employee in connection
therewith. This provision shall survive the termination of this Agreement for
any reason.
11. ASSIGNMENT AND MODIFICATION
Except as required by the surviving entity in a change of
control, this Agreement and the rights and duties hereunder may not be assigned
by any party hereto without the prior written consent of the other, and the
parties expressly agree that any attempt to assign the rights of any party
hereunder without such consent will be null and void. Any modification of this
Agreement shall be made in a writing executed by both parties.
12. FURTHER ASSURANCE
From time to time each party will execute and deliver such
further instruments and will take such other action as the other party
reasonably may request in order to discharge and perform the obligations and
agreements hereunder.
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13. NOTICES
All notices required or permitted hereunder shall be in
writing and shall be delivered in person or sent by certified or registered
mail, return receipt requested, postage prepaid as follows:
To Bank: Chairman of the Board
Six Rivers National Bank
402 "F" Street
Eureka, CA 95501
To Employee: Michael W. Martinez
Six Rivers National Bank
402 "F" Street
Eureka, CA 95501
or such other party and/or address as any of such parties may designate in a
written notice served upon the other parties in the manner provided herein. All
notices required or permitted hereunder shall be deemed duly given and received
on the date of delivery if delivered in person or on the second day next
succeeding the date of mailing if sent by certified or registered mail.
14. ARBITRATION
Except as otherwise specifically set forth herein, any
controversy or claim arising out of or relative to this Agreement, or the breach
thereof, or any claim relative to employment discrimination, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered shall be and may be entered in
any court having jurisdiction thereof. Such arbitration shall take place in
Humbolt County, California, unless otherwise agreed to in writing by the
parties. Employee understands and agrees that this Agreement is a waiver of
Employee's right to receive punitive damages to which Employee may otherwise be
entitled in a court action on a disputed termination or for claims of unlawful
discrimination or harassment allegedly occurring during the course of
employment. Only the arbitrator, not a judge or jury, will decide the claim or
dispute.
15. SUCCESSORS
This Agreement shall be binding upon, and shall inure to the
benefit of, the successors of the parties.
16. OCC APPROVAL
In the event that any of the provisions, or portions thereof,
of this Agreement require the advance approval of the OCC, such provisions shall
not be deemed to be effective unless and until such approval is obtained. In the
event that OCC approval is not obtained for any of the provisions, or portions
thereof, of this Agreement, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
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17. SECTION 280G CUTBACK PROVISION
Notwithstanding any other provision of this Agreement, if any
payment to be made or benefit to be provided to Employee pursuant to this
Agreement, after taking into account all other payments or benefits provided by
Bank to Employee, would constitute a "parachute payment" as defined in Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), then the
payments to be made or benefits to be provided to Employee shall be reduced so
that the aggregate present value of all parachute payments does not exceed 299%
of Employee's "annualized includible compensation for the base period" (as such
term is defined in Section 280G(d)(1) of the Code). The determination of any
reduction in the payments or benefits to be provided to Employee shall be made
by Bank and any dispute with respect thereto shall be resolved in accordance
with Section 14 of this Agreement.
18. ENTIRE AGREEMENT
This Agreement and the Transition Agreement constitute the
entire agreement between the parties, and all prior negotiations,
representations, or agreements between the Parties, whether oral or written, are
merged into this Agreement and the Transition Agreement and shall be deemed
superseded and canceled.
19. GOVERNING LAW
This Agreement shall be construed in accordance with the laws
of the State of California.
20. EXECUTED COUNTERPARTS
This Agreement may be executed in one or more counterparts,
all of which together shall constitute a single agreement and each of which
shall be an original for all purposes.
21. SECTION HEADINGS
The various section headings are inserted for purposes of
convenience only and shall not affect the meaning or interpretation of tilts
Agreement or any section hereof.
22. CALENDAR DAYS/CLOSE OF BUSINESS
Unless the context so requires, all periods terminating on a
given day, period of days or date shall terminate on the close of business on
that day or date, and references to "days" shall refer to calendar days.
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23. SEVERABILITY
In the event that any of the provisions, or portions thereof,
of this Agreement are held to be unenforceable or invalid by any court of
competent jurisdiction, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
24. ATTORNEYS' FEES
In the event that any party shall bring any arbitration,
action to enforce arbitration or any other legal action or proceeding
(collectively "action") arising out of or in connection with the performances
breach or interpretation of this Agreement, then the prevailing party in such
action as determined by the court or other body having jurisdiction shall be
entitled to recover from the losing party, as determined by the court or other
body having jurisdiction, all reasonable costs and expenses of the action,
including reasonable attorneys' fees, court costs, costs of investigation and
other costs reasonably related to such action, in such amounts as may be
determined in the discretion of the court or other body having jurisdiction.
IN WITNESS WHEREOF, this Agreement is executed as of the day and year
first above written.
/s/ MICHAEL W. MARTINEZ
-----------------------------------------
Michael W. Martinez
SIX RIVERS NATIONAL BANK
By: /s/ WILLIAM T. KAY
-----------------------------------
William T. Kay
Title: Chairman of the Board
-----------------------------------
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SIX RIVERS NATIONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of February,
1999, by and between SIX RIVERS NATIONAL BANK, a national banking association
(the "Company"), and Michael W. Martinez (the "Employee").
INTRODUCTION
A. Employee is a member of a select group of management
or highly compensated employees of the Company.
B. The Company desires to retain the services of
Employee and in consideration of future services to be provided by Employee to
the Company the Company will pay to Employee certain future payments, subject to
the limits and conditions set forth in this Agreement.
AGREEMENT
Employee and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the meanings specified:
"ANNUAL RETIREMENT BENEFIT" means the product of
$21,514 multiplied by each full Year of Service, up to a maximum annual
benefit of $215,136.
"BENEFICIARY" means a person determined under Section
5.1 to receive benefit payments under this Agreement following
Employee's death.
"CAUSE" means (i) a material breach by Employee of
any of the terms or provisions of his Employment Agreement with the
Company, (ii) the repeated neglect by Employee of his duties under the
Employment Agreement or any material act of dishonesty, intentional
misrepresentation or moral turpitude, including the misappropriation or
embezzlement of property of the Company or a customer of the Company,
the unauthorized intentional disclosure of confidential information, or
a fraud by Employee in the performance of his duties as an employee of
the Company, (iii) Employee is convicted of a misdemeanor involving
moral turpitude or a felony, (iv) conduct that would preclude the
Company's ability to bond Employee, or (v) a written finding, order or
directive from any state or federal banking regulator with jurisdiction
over the Company that Employee has operated the Company in an unsafe
manner or ordering the removal of Employee as an executive officer of
the Company.
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"CHANGE OF CONTROL" means (i) the closing of any
merger, consolidation or sale of substantially all of the assets of the
Company in which the Company is not the surviving entity; provided,
however, if the Company's board of directors and officers remain in
their positions for at least twelve months following the transaction
with the same authority and control that existed prior to the
transaction then this provision shall not apply, (ii) a tender offer or
exchange offer for the outstanding shares of the Company as a result of
which the offeror acquires in excess of 50% of the Company's
outstanding shares, or (iii) a merger or consolidation of the Company
with another corporation that results in the former shareholders of the
Company, as they existed immediately prior to such merger or
consolidation, owning in the aggregate less than 50% of the outstanding
voting securities of the surviving or resulting corporation; provided,
however, if the Company's board of directors and officers remain in
their positions for at least twelve months following the transaction
with the same authority and control that existed prior to the
transaction then this provision shall not apply, or (iv) any other
transaction that, although different in form, accomplishes
substantially the same result as (i), (ii) or (iii).
"CODE" means the Internal Revenue Code of 1986, as
amended.
"EFFECTIVE DATE" means February 1, 1999.
"ELECTION FORM" means the Form attached as Exhibit 1.
"NORMAL RETIREMENT DATE" means the later of
Employee's sixty-fifth birthday or Termination of Employment.
"PLAN ADMINISTRATOR" means the Board of Directors of
Six Rivers National Bank or their appointee.
"TERMINATION OF EMPLOYMENT" means that the Employee
ceases to be employed by the Company for any reason whatsoever other
than by reason of a leave of absence which is approved by the Company.
For purposes of this Agreement, if there is a dispute over the
employment status of the Employee or the date of the Employee's
Termination of Employment, the Company's determination shall be
conclusive.
"YEAR OF SERVICE" means each computation period of
twelve consecutive months during which the Employee is employed on a
full-time basis by the Company, inclusive of any approved leave of
absence. The initial computation period shall begin on the Effective
Date and ends twelve months thereafter.
ARTICLE 2
RETIREMENT BENEFITS
2.1 RETIREMENT BENEFITS. Provided Employee meets the
requirements for retirement benefits under this Agreement, the Company will pay
to Employee the Annual Retirement Benefit for each of the fifteen years
following Employee's Normal Retirement Date. Retirement benefits payable under
this Agreement shall commence on the first day of the calendar month following
Employee's Normal Retirement Date and shall be payable in equal monthly
installments.
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2.2 VESTING UPON CHANGE OF CONTROL. In the event of a
Change of Control Employee shall be entitled to the maximum Annual Retirement
Benefit without regard to Employee's Years of Service.
ARTICLE 3
DEATH BENEFIT ELECTION
3.1 If Employee dies before receiving the full amount of
retirement benefits to which Employee is entitled under Section 2.1, the Bank
shall pay the remaining amount of retirement benefits to the Beneficiary.
Employee may elect to have the Beneficiary receive a lump sum payment equal to
the present value of the future retirement benefits determined as of the date of
Employee's death, which payment shall be paid within 30 days after the Bank
receives notice of Employee's death. For this purpose, the "present value of the
future retirement benefits" shall be determined by using a discount rate equal
to 120 percent of the applicable Federal rate (determined under Section 1274(d)
of the Code) in effect as of Employee's date of death, compounded semiannually.
The election available under this Article 3 must be made at the time this
Agreement is signed, by signing and delivering the Election Form to the Bank. If
Employee does not make the election, the unpaid retirement benefits to which
Employee is entitled as of his death shall be paid to the Beneficiary at the
times and in the amounts such payments would have been paid to Employee.
3.2 PRE-RETIREMENT DEATH BENEFIT. If the participant dies
prior to reaching age 65 no benefits of any kind will be payable under the terms
of this Agreement.
3.3 TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT OTHER
THAN FOR DEATH OR TERMINATION FOR CAUSE, BUT INCLUDING DISABILITY. If
termination of employment occurs other than for death or for cause, the
participant shall be entitled to a termination benefit, due and payable at his
otherwise Normal Retirement Date. The amount of the benefit shall be $21,514
multiplied by each full Year of Service up to a maximum annual benefit of
$215,136.
ARTICLE 4
FORFEITURE UPON TERMINATION FOR CAUSE
Notwithstanding any provision of this Agreement to the
contrary, Employee shall forfeit his entire benefit if his employment with the
Company is terminated for Cause.
ARTICLE 5
BENEFICIARIES
5.1 BENEFICIARY DESIGNATIONS. The Employee shall
designate a beneficiary by filing a written designation with the Company. The
Employee may revoke or modify the designation at any time by filing a new
designation. However, designations will only be effective if signed by the
Employee and accepted by the Company during the Employee's lifetime and the
designation of any person other than Employee's spouse must be accompanied by
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the written consent of Employee's spouse. The Employee's beneficiary designation
shall be deemed automatically revoked if the beneficiary predeceases the
Employee or if the Employee names a spouse as beneficiary and the marriage is
subsequently dissolved. If the Employee dies without a valid beneficiary
designation, all payments shall be made to Employee's estate.
5.2 FACILITY OF PAYMENT. If a benefit is payable to a
minor, to a person declared incompetent, or to a person incapable of handling
the disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person. The Company may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.
5.3 LUMP SUM BENEFIT OPTION. In lieu of receiving
installment and or delayed payments under any of the above numbered paragraphs,
the Executive (or the Executive's beneficiary in the event of the death of said
Executive) may petition the PLAN ADMINISTRATOR to receive a lump sum benefit.
The value of the lump sum benefit shall be the present value of the remaining
installment payments as determined by using a discount rate and methodology as
defined in Article 3.1 of this Agreement; it being understood that the PLAN
ADMINISTRATOR shall have the final authority to either grant or reject said
request.
ARTICLE 6
EXCESS PARACHUTE PAYMENT
Notwithstanding any other provision of this Agreement, if any
payment to be made or benefit to be provided to Employee pursuant to this
Agreement, after taking into account all other payments or benefits provided by
the Company to Employee, would constitute a "parachute payment" as defined in
Section 280G of the Code, then the payments to be made or benefits to be
provided to Employee shall be reduced so that the aggregate present value of all
parachute payments does not exceed 299% of Employee's "annualized includible
compensation for the base period" (as such term is defined in Section 280G(d)(1)
of the Code). The determination of any reduction in the payments or benefits to
be provided to Employee shall be made by the Company and the Company's
determination shall be conclusive and binding on Employee.
ARTICLE 7
CLAIMS AND REVIEW PROCEDURES
7.1 CLAIMS PROCEDURE. The Company shall notify any person
or entity that makes a claim under this Agreement (the "Claimant") in writing,
within ninety (90) days of Claimant's written application for benefits, of his
or her eligibility or non-eligibility for benefits under the Agreement. If the
Company determines that the Claimant is not eligible for benefits or full
benefits, the notice shall set forth (1) the specific reasons for such denial,
(2) a specific reference to the provisions of the Agreement on which the denial
is based, (3) a description of any additional information or material necessary
for the Claimant to perfect his or her claim, and a description of why it is
needed, and (4) an explanation of the Agreement's claims review procedure and
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other appropriate information as to the steps to be taken if the Claimant wishes
to have the claim reviewed. If the Company determines that there are special
circumstances requiring additional time to make a decision, the Company shall
notify the Claimant of the special circumstances and the date by which a
decision is expected to be made, and may extend the time for up to an additional
ninety (90) days.
7.2 REVIEW PROCEDURE. If the Claimant is determined by
the Company not to be eligible for benefits, or if the Claimant believes that he
or she is entitled to greater or different benefits, the Claimant shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
Claimant believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the Claimant (and counsel, if any) all opportunity to
present his or her position to the Company verbally or in writing, and the
Claimant (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the Claimant of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the Claimant and the specific provisions
of the Agreement on which the decision is based. If, because of the need for a
hearing, the sixty-day period is not sufficient, the decision may be deferred
for up to another sixty (60) days at the election of the Company, but notice of
this deferral shall be given to the Claimant.
ARTICLE 8
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only be a written
agreement signed by the Company and the Employee.
ARTICLE 9
MISCELLANEOUS
9.1 BINDING EFFECT. This Agreement shall bind the
Employee and the Company, and their beneficiaries, survivors, executors,
administrators and transferees.
9.2 NO EMPLOYMENT CONTRACT. Nothing contained in this
Agreement shall be construed to create any express or implied employment
contract between Employee and the Company nor to confer upon Employee the right
to continue to be employed by the Company in any capacity. In addition, nothing
contained herein, nor any action taken by either party pursuant to the terms
hereof, shall be construed to create any trust or fiduciary relationship between
the Company and Employee.
9.3 NON-TRANSFERABILITY. Except as may otherwise be
required by law, no amount payable at any time under this Agreement shall be
subject in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind or in any
manner be subject to the debts or liabilities of any persons and any attempt to
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so alienate or subject any such amount, whether payable currently or at a later
date, shall be void.
9.4 TAX WITHHOLDING. The Company shall withhold any tax
which is required to be withheld from the benefits provided under this
Agreement, including but not limited to FICA, Medicare and FUTA contributions
and income tax withholding on benefit payments.
9.5 APPLICABLE LAW. This Agreement and all rights
hereunder shall be governed by the laws of the State of California, except to
the extent preempted by the laws of the United States of America.
9.6 UNFUNDED ARRANGEMENT. The rights of Employee, any
designated Beneficiary, or any other person claiming through the Employee or his
designated Beneficiaries under this Agreement, shall be solely those of an
unsecured general creditor of the Company, and the Company's obligation shall be
an unfunded and unsecured promise to pay. Neither Employee nor his Beneficiaries
or other persons shall have any rights, interests or prior claims whatsoever in
any of the Company's assets. The Company's obligations under this Agreement
shall be satisfied from the general assets of the Company, and any asset which
may be used or acquired by the Company in connection with the liabilities it has
assumed under this Agreement shall not be deemed to be held under any trust or
escrow for the benefit of Employee or his Beneficiaries, nor shall it be
considered security for the performance of the obligations of the Company.
9.7 NOTICES. Any notice required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered personally or if deposited in the United States mail, registered or
certified mail, postage prepaid and return receipt requested, to the most recent
address of the party set forth in the records of the Company or to such other
address as may be designated by notice in writing pursuant to the terms of this
Section 9.7 to the other party to this Agreement.
9.8 ADMINISTRATION. No officer or employee of the Company
or any member of its Board of Directors shall be personally liable by reason of
this Agreement or any other instrument executed in connection with this
Agreement by such person or on his or her behalf or in his or her capacity as an
employee or member of the Board of Directors nor for any mistake of judgment
made in good faith, and the Company shall indemnify and hold harmless each such
officer, employee, or Director of the Company to whom any duty or power relating
to the administration or interpretation of this Agreement has been delegated,
against any cost or expense (including attorneys' fees) or liability (including
any sum paid in settlement of a claim with the approval of the Board of
Directors) arising out of any act or omission to act in connection with this
Agreement unless arising out of such person's own fraud or bad faith.
9.9 PROTECTIVE PROVISIONS. Employee shall cooperate with
the Company by furnishing any and all information requested by the Company in
order to facilitate the payment of benefits, taking physical examinations as the
Company may deem necessary and taking other relevant action as may be requested
by the Company. If Employee commits suicide during the first two years following
the Effective Date, or if Employee makes any material misstatement of
information or nondisclosure of medical history, then no benefits will be
payable to Employee or his Beneficiary, provided that, in the Company's sole
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discretion, benefits may be payable in an amount reduced to compensate the
Company for any loss, cost, damage or expense suffered or incurred by the
Company as a result in any way of misstatement or nondisclosure.
9.10 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the Company and the Employee as to the subject matter
hereof. No rights are granted to the Employee by virtue of this Agreement other
than those specifically set forth herein.
IN WITNESS WHEREOF, the Employee and a duly authorized Company
officer have signed this Agreement.
EMPLOYEE: COMPANY:
SIX RIVERS NATIONAL BANK
/s/ MICHAEL W. MARTINEZ BY /s/ MARJORIE PLUM
- ----------------------- -------------------------------------
Michael W. Martinez Marjorie Plum
TITLE Executive Vice President and Branch Administator
------------------------------------------------
Initials of WILLIAM T. KAY
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EXHIBIT 1
TO
SIX RIVERS NATIONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
LUMP SUM PAYMENT ELECTION
In the event of my death, I elect to have the present value of any unpaid
benefits paid to my Beneficiary in a lump sum payment in accordance with Article
3 of the Agreement.
Signature ______________________
Date ___________________________
Accepted by the Company this _____ day of __________________, 19__.
By _____________________________
Title __________________________
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EXHIBIT 2
TO
SIX RIVERS NATIONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Supplemental
Executive Retirement Agreement payable following my death:
Primary: _______________________________________________________________________
- --------------------------------------------------------------------------------
Contingent: ____________________________________________________________________
- --------------------------------------------------------------------------------
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE
TRUSTEE(S) AND THE EXACT NAME AND DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.
Signature ______________________
Date ___________________________
Accepted by the Company this _____ day of __________________, 19__.
By _____________________________
Title __________________________
24
EMPLOYMENT AGREEMENT
The employment agreement (the "Agreement") is entered into as of the
1st day of April, 1999, by and between Six Rivers National Bank, a national bank
("Bank") and Marjorie Plum ("Employee") on the following terms and conditions.
1. POSITION
Employee shall be Bank's Executive Vice President and Branch
Administrator. In the role of Branch Administrator, Employee shall have the
duties set forth in the Agreement and in the By-Laws of Bank, subject to the
direction of the Board of Directors of Bank. In addition to such other duties as
may be assigned to her, in her role as Branch Administrator Employee shall be
responsible for the following:
(a) Ensuring that branch management consistently deliver
products and services to selected client base profitably.
(b) Ensuring that branch budgets (Goals/Objectives) are
developed and tracked to ensure achievement.
(c) Ensuring that staff training is developed and
accomplished.
(d) Ensuring smooth interactively of the Bank's branch
network with all departments of the Bank.
(e) Coordinating communication between administration and
branches of the Bank.
(f) Participating in the development and integration of
the basic objectives, policies and operating plans of the Bank.
(g) Ensuring that all employees performance/salary
reviews are evaluated on a regular basis.
(h) Annually reviewing for appropriateness the cost and
benefits of the employee health insurance program.
(i) Annually validating employee salary schedule with
industry standards.
(j) Developing and implementing a program to provide
employee benefit statements.
(k) Developing and maintaining the Bank's personnel
policy.
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(l) Ensuring that current job descriptions exist for all
positions within the Bank.
(m) Interpreting laws and regulations impacting Bank
personnel and ensuring that they are being effectively administered within the
Bank.
(n) Creating and ensuring utilization of the Bank's new
employee orientation program.
(o) Developing and implementing an internal education
program focusing on product, services, delivery systems and equipment.
(p) Assisting in the development of a retirement program
for Bank employees (ESOP/401(k), etc.) and, upon creation of such a program,
ensuring ongoing implementation.
(q) Scheduling vacations, leaves and other absences of
Bank employees.
2. EXCLUSIVITY
Employee agrees that throughout the term hereof she shall
diligently devote her full time and best efforts to Bank's business. Employee
agrees to perform her services conscientiously, efficiently and to the best of
her ability. Except with the prior consent of Bank's board of directors,
Employee will not engage directly or indirectly in any other business activity
(whether or not for pecuniary advantage) that is or may be competitive with or
might place her in a competing position to that of Bank or any company
affiliated with Bank. Notwithstanding the foregoing, Bank agrees that nothing
contained herein shall prevent Employee from making passive investments in other
non-competing businesses. Employee agrees that she shall not engage in conduct
which is in contravention of Bank's conflict of interest policy.
3. TERM
Employee's employment under the Agreement shall commence on
April 1, 1999 (the "Effective Date") and shall continue thereafter for a period
of three years from the date thereof ("Term").
4. COMPENSATION
(a) SALARY
Bank shall pay Employee a base salary ("Base Salary")
of $77,500 per annum, less appropriate withholdings, taxes and similar
deductions, payable in equal installments on those days when Bank normally pays
its Employees. Not less than once each 12 months, the Chief Executive Officer of
Bank shall review the Base Salary of Employee for consideration of increasing
the Base Salary based upon the performance of Employee, market conditions for
salaries to individuals similarly employed, increases in the cost of living, and
similar factors.
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(b) BONUS
At the end of each calendar year, the amount of bonus
compensation, if any, to be paid to Employee shall be determined in the
discretion of the Board of Directors and Chief Executive Officer of Bank based
upon the performance of Employee and the results of Bank's operations.
(c) BUSINESS EXPENSES
In accordance with Bank policy as it may exist from
time to time, and subject to the approval of all such expenses by the Chief
Executive Officer of Bank, Employee shall be entitled to reimbursement by Bank
for any ordinary, reasonable business expenses incurred by Employee in the
performance of Employee's duties and in acting for Bank during the term of the
Agreement, provided that Employee furnishes to Bank substantially adequate
records and other documentary evidence as required by Bank's policies or by
federal and state statutes and regulations with respect to the substantiation of
such expenditures as deductible business expenses of Bank.
(d) BENEFITS
During the term of her employment under the
Agreement, Employee shall be entitled to receive the following benefits:
(i) Employee shall be eligible to participate in
all employee benefit plans maintained by Bank, including (without limitation)
any disability, health, accident and other insurance programs, paid vacations,
and similar plans or programs, subject to terms and conditions of each plan
currently in effect.
(ii) Employee shall receive from Bank a car
allowance of $500 per month.
(iii) Subject to availability at customary and
usual rates, Bank shall provide term insurance on the life of Employee in a
principal amount equal to three times Employee's Base Salary, up to a maximum
principal amount of $300,000. Employee shall be responsible for a portion of the
premium due on said insurance, as determined by Bank's benefit plan for other
full time employees.
(e) STOCK OPTIONS
Employee shall be eligible to participate in Bank's
Stock Option Plan (the "Plan"). Employee will be granted options in the
discretion of Bank's Board of Directors.
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5. DISABILITY AND DEATH
(a) If employee suffers a physical or psychological
condition which renders her incapable of performing the essential functions of
her job with or without a reasonable accommodation prior to the termination of
the Agreement, then, to the extent permitted by law, Bank shall have the right
upon ten days written notice to terminate the Agreement and Employee's
employment hereunder.
(b) Immediately following the date on which Bank
terminates Employee's employment pursuant to Section 5(a) of the Agreement, or
earlier if required by law, Bank shall pay to Employee all incurred but
unreimbursed business expenses, accrued but unpaid salary, earned but unpaid
bonus, and accrued but unused vacation time, such salary and vacation time to
accrue until the last day of the month in which Employee's last working day
occurred. Thereafter, Bank's obligations shall terminate, but Employee shall
continue to be eligible to receive benefits under the disability plans, if any,
that Bank maintains as of the date of termination, provided that Employee
satisfies the requirements of such plans, if any.
(c) If Employee dies before receipt of the entire amount
specified in Section 5(b), then unpaid amounts shall be paid to Employee's
estate.
(d) In the event of Employee's death during the term of
the Agreement, the Agreement shall terminate. Immediately after the date of
death, or earlier if required by law, Bank shall pay to Employee's estate all
incurred but unreimbursed business expenses, accrued but unpaid salary, earned
but unpaid bonus, and accrued but unused vacation time, with such salary and
vacation to accrue until the last day of the month in which Employee's last
working day occurred.
6. TERMINATION FOR CAUSE AND WITHOUT CAUSE
(a) Except as otherwise provided in the Agreement, the
Agreement may be terminated for cause immediately by Bank, at Banks option upon
notice to Employee, upon the occurrence of any of the following events. "Cause"
shall include but not be limited to the following items:
(i) A material breach by Employee of any of the
terms or provisions of the Agreement;
(ii) The repeated neglect by Employee of her
duties under the Agreement or any material act of dishonesty, intentional
misrepresentation or moral turpitude, including the misappropriation or
embezzlement of property of Bank or a customer of Bank, the unauthorized
intentional disclosure of confidential information, or a fraud by Employee in
the performance of her duties as an employee of Bank;
(iii) Employee is convicted of a misdemeanor
involving moral turpitude or a felony;
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(iv) Conduct that would preclude Bank's ability
to bond Employee; or
(v) A written finding, order or directive from
any state or federal banking regulator with jurisdiction over Employer that
Employee has operated Bank in an unsafe manner or ordering the removal of
Employee as an executive officer of Bank.
In the event Employee is terminated for cause,
Employee shall be entitled to receive salary through the effective date of the
termination, any incurred but unreimbursed business expenses, and any accrued
but unused vacation time as of the date of termination. Employee shall not she
entitled to any other compensation.
(b) During the Term, the Agreement may be terminated
immediately without cause by Bank upon written notice except as otherwise
provided for elsewhere in the Agreement. For purposes of the provision,
"termination without cause" shall include (i) assignment of employee to duties
of substantially lesser responsibility to those described in Section 1 hereof,
(ii) a material adverse change in the position of Branch Administrator,
including title, lines of reporting, authority or responsibilities, or (iii)
adverse changes in levels of base salary.
(i) Upon notice by Employee, Bank shall have
right to correct any changes referenced above by Employee, within 30 days of
said notification, and restore Employee to the position described in Section 1
of the Agreement.
(ii) If Employee's employment is terminated
without cause by Bank under this section, Employee shall be entitled to receive
(within ten days of termination) salary through the effective date of the
termination, a lump sum amount equal to the total of payments of Base Salary
remaining to be paid during the Term, any accrued but unused vacation pay as of
the date of termination, and any incurred but unreimbursed business expenses;
provided, however, that in the event the Office of the Comptroller of the
Currency ("OCC") does not approve the payment to Employee of a lump sum amount
equal to the total of payments of Base Salary remaining to be paid during the
Term, then the amount of the lump sum Base Salary payment to Employee as the
result of termination without cause shall be such lesser amount as is approved
by the OCC; provided further, however, that in no event shall the lump sum Base
Salary amount paid to Employee pursuant to this paragraph be less than the
smaller of (A) 18 months Base Salary or (B) the total of payments of Base Salary
remaining to be paid during the Term.
(c) During the Term, the Agreement may be terminated
without cause by Employee on 90 days notice to Bank. If the Agreement is
terminated without cause by Employee, Employee shall be entitled to receive
salary through the effective date of termination, any accrued but unused
vacation pay as of the date of termination, and any incurred but unreimbursed
business expenses.
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(d) Unless otherwise agreed, if Employee is terminated
for any reason or resigns for any reason, Employee agrees to resign immediately
from the Board of Directors and all committees or other positions held with
Bank, effective as of the last date of employment.
7. TRANSITION AGREEMENT
This Agreement incorporates by reference the terms of the
Transition Agreement between Bank and Employee dated June 16, 1997 ("Transition
Agreement"). Nothing contained in this Agreement shall be deemed to contradict
or to be inconsistent with any of the terms of the Transition Agreement. Any and
all rights created pursuant to the Transition Agreement shall be in addition to
Employee's rights pursuant to this Agreement.
8. OWNERSHIP OF CONFIDENTIAL PROPRIETARY INFORMATION
All records of the accounts of customers, and any other
records and books relating in any manner whatsoever to the customers of Bank,
and all other files, books and records and other materials owned by Bank or used
by it in connection with the conduct of its business, whether prepared by
Employee or otherwise coming into her possession, shall be the exclusive
property of Bank regardless of who actually prepared the original material, book
or record. All such books and records and other materials shall be immediately
returned to Bank by Employee on any termination of her employment.
9. TRADE SECRETS
During the Term, Employee will have access to and become
acquainted with what Employee and Bank acknowledge are trade secrets, including
the names of customers and clients of Bank, their financial condition and
financial needs, financial information regarding Bank and other information
relating to Bank's products, services and methods of doing business. Employee
agrees not to disclose any of Bank's trade secrets, directly or indirectly, or
use them in any way, either during the term of employment (except as required in
the course of employment with Bank) or for a period of twelve months after the
termination of the Agreement. Employee will not, for one year following the
termination of Employee's employment with Bank, solicit for employment elsewhere
individuals who are active, full-time employees of Bank.
10. INDEMNIFICATION
To the extent permitted by and consistent with Section 317 of
the California Corporations Code ("Section 317"), the Articles of Incorporation
and the Bylaws of Bank, Bank shall indemnify Employee for expenses, judgments,
fines, settlements and other amounts actually incurred by Employee in connection
with any proceeding to which Employee is a party by reason of the fact that
Employee is or was an agent of Bank (as defined in Section 317) if the
proceeding arose from acts or omissions in the course and scope of Employee's
employment other than willful misconduct or acts not covered by any
indemnification agreement between Bank and Employee. Bank shall advance on
behalf of Employee all costs, including attorneys' fees, as necessary with
respect to any such proceeding. In the event any applicable law shall require
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the issuance of an undertaking by Employee, such shall be acceptable without
bond, collateral or any other security being given by Employee in connection
therewith. The provision shall survive the termination of the Agreement for any
reason.
11. ASSIGNMENT AND MODIFICATION
Except as required by the surviving entity in a change of
control, the Agreement and the rights and duties hereunder may not be assigned
by any party hereto without the prior written consent of the other, and the
parties expressly agree that any attempt to assign the rights of any party
hereunder without such consent will be null and void. Any modification of the
Agreement shall be made in a writing executed by both parties.
12. FURTHER ASSURANCE
From time to time each party will execute and deliver such
further instruments and will take such other action as the other party
reasonably may request in order to discharge and perform the obligations and
agreements hereunder.
13. NOTICES
All notices required or permitted hereunder shall be in
writing and shall be delivered in person or sent by certified or registered
mail, return receipt requested, postage prepaid as follows:
To Bank: Chairman of the Board
Six Rivers National Bank
402 "F" Street
Eureka, CA 95501
To Employee: Marjorie Plum
Six Rivers National Bank
402 "F" Street
Eureka, CA 95501
or such other party and/or address as any of such parties may designate in a
written notice served upon the other parties in the manner provided herein. All
notices required or permitted hereunder shall be deemed duly given and received
on the date of delivery if delivered in person or on the second day next
succeeding the date of mailing if sent by certified or registered mail.
14. ARBITRATION
Except as otherwise specifically set forth herein, any
controversy or claim arising out of or relative to the Agreement, or the breach
thereof, or any claim relative to employment discrimination, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered shall be and may be entered in
any court having jurisdiction thereof. Such arbitration shall take place in
Humboldt County, California, unless otherwise agreed to in writing by the
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parties. Employee understands and agrees that the Agreement is a waiver of
Employee's right to receive punitive damages to which Employee may otherwise be
entitled in a court action on a disputed termination or for claims of unlawful
discrimination or harassment allegedly occurring during the course of
employment. Only the arbitrator, not a judge or jury, will decide the claim or
dispute.
15. SUCCESSORS
The Agreement shall be binding upon, and shall inure to the
benefit of, the successors of the parties.
16. OCC APPROVAL
In the event that any of the provisions, or portions thereof,
of the Agreement require the advance approval of the OCC, such provisions shall
not be deemed to be effective unless and until such approval is obtained. In the
event that OCC approval is not obtained for any of the provisions, or portions
thereof, of the Agreement, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
17. ENTIRE AGREEMENT
This Agreement and the Transition Agreement constitute the
entire agreement between the parties, and all prior negotiations,
representations, or agreements between the Parties, whether oral or written, are
merged into this Agreement and the Transition Agreement and shall be deemed
superseded and canceled.
18. GOVERNING LAW
The Agreement shall be construed in accordance with the laws
of the State of California.
19. EXECUTED COUNTERPARTS
The Agreement may be executed in one or more counterparts, all
of which together shall constitute a single agreement and each of which shall be
an original for all purposes.
20. SECTION HEADINGS
The various section headings are inserted for purposes of
convenience only and shall not affect the meaning or interpretation of tilts
Agreement or any section hereof.
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21. CALENDAR DAYS/CLOSE OF BUSINESS
Unless the context so requires, all periods terminating on a
given day, period of days or date shall terminate on the close of business on
that day or date, and references to "days" shall refer to calendar days.
22. SEVERABILITY
In the event that any of the provisions, or portions thereof,
of the Agreement are held to be unenforceable or invalid by any court of
competent jurisdiction, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
23. ATTORNEYS' FEES
In the event that any party shall bring any arbitration,
action to enforce arbitration or any other legal action or proceeding
(collectively "action") arising out of or in connection with the performances
breach or interpretation of the Agreement, then the prevailing party in such
action as determined by the court or other body having jurisdiction shall be
entitled to recover from the losing party, as determined by the court or other
body having jurisdiction, all reasonable costs and expenses of the action,
including reasonable attorneys' fees, court costs, costs of investigation and
other costs reasonably related to such action, in such amounts as may be
determined in the discretion of the court or other body having jurisdiction.
IN WITNESS WHEREOF, the Agreement is executed as of the day and year
first above written.
/s/ MARJORIE PLUM
-------------------------------------------
Marjorie Plum
SIX RIVERS NATIONAL BANK
By: /s/ WILLIAM T. KAY
--------------------------------------
William T. Kay
Title: Chairman of the Board
------------------------------------
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SIX RIVERS NATIONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of February,
1999, by and between SIX RIVERS NATIONAL BANK, a national banking association
(the "Bank"), and Margie L. Plum (the "Employee").
INTRODUCTION
A. Employee is a member of a select group of management
or highly compensated employees of the Bank.
B. The Bank desires to retain the services of Employee
and in consideration of future services to be provided by Employee to the Bank
the Bank will pay to Employee certain future payments, subject to the limits and
conditions set forth in this Agreement.
AGREEMENT
Employee and the Bank agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the meanings specified:
"ANNUAL RETIREMENT BENEFIT" means the product of
$13,019 multiplied by each full Year of Service, up to a maximum annual
benefit of $78,115.
"BENEFICIARY" means a person determined under Section
5.1 to receive benefit payments under this Agreement following
Employee's death.
"CAUSE" means (i) a material breach by Employee of
any of the terms or provisions of her Employment Agreement with the
Bank, (ii) the repeated neglect by Employee of her duties under the
Employment Agreement or any material act of dishonesty, intentional
misrepresentation or moral turpitude, including the misappropriation or
embezzlement of property of the Bank or a customer of the Bank, the
unauthorized intentional disclosure of confidential information, or a
fraud by Employee in the performance of her duties as an employee of
the Bank, (iii) Employee is convicted of a misdemeanor involving moral
turpitude or a felony, (iv) conduct that would preclude the Bank's
ability to bond Employee, or (v) a written finding, order or directive
from any state or federal banking regulator with jurisdiction over the
Bank that Employee has operated the Bank in an unsafe manner or
ordering the removal of Employee as an executive officer of the Bank.
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"CHANGE OF CONTROL" means (i) the closing of any
merger, consolidation or sale of substantially all of the assets of the
Bank in which the Bank is not the surviving entity; provided, however,
if the Bank's board of directors and officers remain in their positions
for at least twelve months following the transaction with the same
authority and control that existed prior to the transaction then this
provision shall not apply, (ii) a tender offer or exchange offer for
the outstanding shares of the Bank as a result of which the offeror
acquires in excess of 50% of the Bank's outstanding shares, or (iii) a
merger or consolidation of the Bank with another corporation that
results in the former shareholders of the Bank, as they existed
immediately prior to such merger or consolidation, owning in the
aggregate less than 50% of the outstanding voting securities of the
surviving or resulting corporation; provided, however, if the Bank's
board of directors and officers remain in their positions for at least
twelve months following the transaction with the same authority and
control that existed prior to the transaction then this provision shall
not apply, or (iv) any other transaction that, although different in
form, accomplishes substantially the same result as (i), (ii) or (iii).
"CODE" means the Internal Revenue Code of 1986, as
amended.
"EFFECTIVE DATE" means February 1, 1999.
"ELECTION FORM" means the Form attached as Exhibit 1.
"NORMAL RETIREMENT DATE" means the later of
Employee's sixty-fifth birthday or Termination of Employment.
"PLAN ADMINISTRATOR" means the Board of Directors of
Six Rivers National Bank or their appointee.
"TERMINATION OF EMPLOYMENT" means that the Employee
ceases to be employed by the Bank for any reason whatsoever other than
by reason of a leave of absence which is approved by the Bank. For
purposes of this Agreement, if there is a dispute over the employment
status of the Employee or the date of the Employee's Termination of
Employment, the Bank's determination shall be conclusive.
"YEAR OF SERVICE" means each computation period of
twelve consecutive months during which the Employee is employed on a
full-time basis by the Bank, inclusive of any approved leave of
absence. The initial computation period shall begin on the Effective
Date and ends twelve months thereafter.
ARTICLE 2
RETIREMENT BENEFITS
2.1 RETIREMENT BENEFITS. Provided Employee meets the
requirements for retirement benefits under this Agreement, the Bank will pay to
Employee the Annual Retirement Benefit for each of the fifteen years following
Employee's Normal Retirement Date. Retirement benefits payable under this
Agreement shall commence on the first day of the calendar month following
Employee's Normal Retirement Date and shall be payable in equal monthly
installments.
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2.2 VESTING UPON CHANGE OF CONTROL. In the event of a
Change of Control Employee shall be entitled to the maximum Annual Retirement
Benefit without regard to Employee's Years of Service.
ARTICLE 3
DEATH BENEFIT ELECTION
3.1 If Employee dies before receiving the full amount of
retirement benefits to which Employee is entitled under Section 2.1, the Bank
shall pay the remaining amount of retirement benefits to the Beneficiary.
Employee may elect to have the Beneficiary receive a lump sum payment equal to
the present value of the future retirement benefits determined as of the date of
Employee's death, which payment shall be paid within 30 days after the Bank
receives notice of Employee's death. For this purpose, the "present value of the
future retirement benefits" shall be determined by using a discount rate equal
to 120 percent of the applicable Federal rate (determined under Section 1274(d)
of the Code) in effect as of Employee's date of death, compounded semiannually.
The election available under this Article 3 must be made at the time this
Agreement is signed, by signing and delivering the Election Form to the Bank. If
Employee does not make the election, the unpaid retirement benefits to which
Employee is entitled as of her death shall be paid to the Beneficiary at the
times and in the amounts such payments would have been paid to Employee.
3.2 PRE-RETIREMENT DEATH BENEFIT. If the participant dies
prior to reaching age 65 no benefits of any kind will be payable under the terms
of this Agreement.
3.3 TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT OTHER
THAN FOR DEATH OR TERMINATION FOR CAUSE, BUT INCLUDING DISABILITY. If
termination of employment occurs other than for death or for cause, the
participant shall be entitled to a termination benefit, due and payable at her
otherwise Normal Retirement Date. The amount of the benefit shall be $13,019
multiplied by each full Year of Service up to a maximum annual benefit of
$78,115.
ARTICLE 4
FORFEITURE UPON TERMINATION FOR CAUSE
Notwithstanding any provision of this Agreement to the
contrary, Employee shall forfeit her entire benefit if her employment with the
Bank is terminated for Cause.
ARTICLE 5
BENEFICIARIES
5.1 BENEFICIARY DESIGNATIONS. The Employee shall
designate a beneficiary by filing a written designation with the Bank. The
Employee may revoke or modify the designation at any time by filing a new
designation. However, designations will only be effective if signed by the
Employee and accepted by the Bank during the Employee's lifetime and the
designation of any person other than Employee's spouse must be accompanied by
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the written consent of Employee's spouse. The Employee's beneficiary designation
shall be deemed automatically revoked if the beneficiary predeceases the
Employee or if the Employee names a spouse as beneficiary and the marriage is
subsequently dissolved. If the Employee dies without a valid beneficiary
designation, all payments shall be made to Employee's estate.
5.2 FACILITY OF PAYMENT. If a benefit is payable to a
minor, to a person declared incompetent, 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 such
minor, incompetent person or incapable person. The Bank may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Bank from all liability with respect to such benefit.
5.3 LUMP SUM BENEFIT OPTION. In lieu of receiving
installment and or delayed payments under any of the above numbered paragraphs,
the Executive (or the Executive's beneficiary in the event of the death of said
Executive) may petition the PLAN ADMINISTRATOR to receive a lump sum benefit.
The value of the lump sum benefit shall be the present value of the remaining
installment payments as determined by using a discount rate and methodology as
defined in Article 3.1 of this Agreement; it being understood that the PLAN
ADMINISTRATOR shall have the final authority to either grant or reject said
request.
ARTICLE 6
EXCESS PARACHUTE PAYMENT
Notwithstanding any other provision of this Agreement, if any
payment to be made or benefit to be provided to Employee pursuant to this
Agreement, after taking into account all other payments or benefits provided by
the Bank to Employee, would constitute a "parachute payment" as defined in
Section 280G of the Code, then the payments to be made or benefits to be
provided to Employee shall be reduced so that the aggregate present value of all
parachute payments does not exceed 299% of Employee's "annualized includible
compensation for the base period" (as such term is defined in Section 280G(d)(1)
of the Code). The determination of any reduction in the payments or benefits to
be provided to Employee shall be made by the Bank and the Bank's determination
shall be conclusive and binding on Employee.
ARTICLE 7
CLAIMS AND REVIEW PROCEDURES
7.1 CLAIMS PROCEDURE. The Bank shall notify any person or
entity that makes a claim under this Agreement (the "Claimant") in writing,
within ninety (90) days of Claimant's written application for benefits, of his
or her eligibility or non-eligibility for benefits under the Agreement. If the
Bank determines that the Claimant is not eligible for benefits or full benefits,
the notice shall set forth (1) the specific reasons for such denial, (2) a
specific reference to the provisions of the Agreement on which the denial is
based, (3) a description of any additional information or material necessary for
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the Claimant to perfect his or her claim, and a description of why it is needed,
and (4) an explanation of the Agreement's claims review procedure and other
appropriate information as to the steps to be taken if the Claimant wishes to
have the claim reviewed. If the Bank determines that there are special
circumstances requiring additional time to make a decision, the Bank shall
notify the Claimant of the special circumstances and the date by which a
decision is expected to be made, and may extend the time for up to an additional
ninety (90) days.
7.2 REVIEW PROCEDURE. If the Claimant is determined by
the Bank not to be eligible for benefits, or if the Claimant believes that he or
she is entitled to greater or different benefits, the Claimant shall have the
opportunity to have such claim reviewed by the Bank by filing a petition for
review with the Bank within sixty (60) days after receipt of the notice issued
by the Bank. Said petition shall state the specific reasons which the Claimant
believes entitle him or her to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Bank of the petition, the Bank shall
afford the Claimant (and counsel, if any) all opportunity to present his or her
position to the Bank verbally or in writing, and the Claimant (or counsel) shall
have the right to review the pertinent documents. The Bank shall notify the
Claimant of its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated to be
understood by the Claimant and the specific provisions of the Agreement on which
the decision is based. If, because of the need for a hearing, the sixty-day
period is not sufficient, the decision may be deferred for up to another sixty
(60) days at the election of the Bank, but notice of this deferral shall be
given to the Claimant.
ARTICLE 8
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only be a written
agreement signed by the Bank and the Employee.
ARTICLE 9
MISCELLANEOUS
9.1 BINDING EFFECT. This Agreement shall bind the
Employee and the Bank, and their beneficiaries, survivors, executors,
administrators and transferees.
9.2 NO EMPLOYMENT CONTRACT. Nothing contained in this
Agreement shall be construed to create any express or implied employment
contract between Employee and the Bank nor to confer upon Employee the right to
continue to be employed by the Bank in any capacity. In addition, nothing
contained herein, nor any action taken by either party pursuant to the terms
hereof, shall be construed to create any trust or fiduciary relationship between
the Bank and Employee.
9.3 NON-TRANSFERABILITY. Except as may otherwise be
required by law, no amount payable at any time under this Agreement shall be
subject in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind or in any
manner be subject to the debts or liabilities of any persons and any attempt to
so alienate or subject any such amount, whether payable currently or at a later
date, shall be void.
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9.4 TAX WITHHOLDING. The Bank shall withhold any tax
which is required to be withheld from the benefits provided under this
Agreement, including but not limited to FICA, Medicare and FUTA contributions
and income tax withholding on benefit payments.
9.5 APPLICABLE LAW. This Agreement and all rights
hereunder shall be governed by the laws of the State of California, except to
the extent preempted by the laws of the United States of America.
9.6 UNFUNDED ARRANGEMENT. The rights of Employee, any
designated Beneficiary, or any other person claiming through the Employee or her
designated Beneficiaries under this Agreement, shall be solely those of an
unsecured general creditor of the Bank, and the Bank's obligation shall be an
unfunded and unsecured promise to pay. Neither Employee nor her Beneficiaries or
other persons shall have any rights, interests or prior claims whatsoever in any
of the Bank's assets. The Bank's obligations under this Agreement shall be
satisfied from the general assets of the Bank, and any asset which may be used
or acquired by the Bank in connection with the liabilities it has assumed under
this Agreement shall not be deemed to be held under any trust or escrow for the
benefit of Employee or her Beneficiaries, nor shall it be considered security
for the performance of the obligations of the Bank.
9.7 NOTICES. Any notice required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered personally or if deposited in the United States mail, registered or
certified mail, postage prepaid and return receipt requested, to the most recent
address of the party set forth in the records of the Bank or to such other
address as may be designated by notice in writing pursuant to the terms of this
Section 9.7 to the other party to this Agreement.
9.8 ADMINISTRATION. No officer or employee of the Bank or
any member of its Board of Directors shall be personally liable by reason of
this Agreement or any other instrument executed in connection with this
Agreement by such person or on his or her behalf or in his or her capacity as an
employee or member of the Board of Directors nor for any mistake of judgment
made in good faith, and the Bank shall indemnify and hold harmless each such
officer, employee, or Director of the Bank to whom any duty or power relating to
the administration or interpretation of this Agreement has been delegated,
against any cost or expense (including attorneys' fees) or liability (including
any sum paid in settlement of a claim with the approval of the Board of
Directors) arising out of any act or omission to act in connection with this
Agreement unless arising out of such person's own fraud or bad faith.
9.9 PROTECTIVE PROVISIONS. Employee shall cooperate with
the Bank by furnishing any and all information requested by the Bank in order to
facilitate the payment of benefits, taking physical examinations as the Bank may
deem necessary and taking other relevant action as may be requested by the Bank.
If Employee commits suicide during the first two years following the Effective
Date, or if Employee makes any material misstatement of information or
nondisclosure of medical history, then no benefits will be payable to Employee
or her Beneficiary, provided that, in the Bank's sole discretion, benefits may
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be payable in an amount reduced to compensate the Bank for any loss, cost,
damage or expense suffered or incurred by the Bank as a result in any way of
misstatement or nondisclosure.
9.10 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the Bank and the Employee as to the subject matter
hereof. No rights are granted to the Employee by virtue of this Agreement other
than those specifically set forth herein.
IN WITNESS WHEREOF, the Employee and a duly authorized Bank
officer have signed this Agreement.
EMPLOYEE: COMPANY:
SIX RIVERS NATIONAL BANK
/s/ MARGIE L. PLUM BY /s/ MICHAEL W. MARTINEZ
- ------------------------------- -----------------------
Margie L. Plum MICHAEL W. MARTINEZ
TITLE President and Chief Executive Officer
Initials of WILLIAM T. KAY
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EXHIBIT 1
TO
SIX RIVERS NATIONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
LUMP SUM PAYMENT ELECTION
In the event of my death, I elect to have the present value of any unpaid
benefits paid to my Beneficiary in a lump sum payment in accordance with Article
3 of the Agreement.
Signature ______________________
Date ___________________________
Accepted by the Bank this _____ day of __________________, 19__.
By _____________________________
Title __________________________
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EXHIBIT 2
TO
SIX RIVERS NATIONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Supplemental
Executive Retirement Agreement payable following my death:
Primary: _______________________________________________________________________
- --------------------------------------------------------------------------------
Contingent: ____________________________________________________________________
- --------------------------------------------------------------------------------
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE
TRUSTEE(S) AND THE EXACT NAME AND DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with 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 ______________________
Date ___________________________
Accepted by the Bank this _____ day of __________________, 19__.
By _____________________________
Title __________________________
42
EMPLOYMENT AGREEMENT
This employment agreement (this "Agreement") is entered into as of this
1st day of April, 1999, by and between Six Rivers National Bank, a national bank
("Bank") and Shelton J. Francis ("Employee") on the following terms and
conditions.
1. POSITION
Employee shall be Bank's Executive Vice President and Chief
Credit Officer ("CCO"). In the role of Chief Credit Officer, Employee shall have
the duties set forth in this Agreement and in the By-Laws of Bank, subject to
the direction of the Board of Directors of Bank. In addition to such other
duties as may be assigned to him, in his role as Chief Credit Officer Employee
shall be responsible for the following:
(a) Developing and implementing credit policies and
procedures.
(b) Presiding over regular meetings of lending personnel
for the purpose of loan reviews, training and communication of ideas, problems
and general information.
(c) Early identification of problem loans and the review
of such loans with loan officers, and taking such actions as are necessary to
timely and effectively deal with such loans.
(d) Ensuring the completeness of credit files, reviewing
the quality of loans, overseeing Bank's credit evaluation process and reporting
on loan matters to the Board of Directors.
(e) Performing loan review functions and client and
prospective client visits on a regular and ongoing basis.
(f) Interacting with Bank's Senior Vice Presidents/Branch
Administration regarding lending activities in Bank's branch offices.
(g) Developing new credit policies.
(h) In association with Bank's Chief Financial Officer,
supervising the Bank's delinquency control, loan loss management and reserve
policies.
(i) Supervising, along with the Bank's Government
Guaranteed Loan Group, Bank's Small Business Administration, and other
Government Guaranteed loan programs, exclusive of the residential loan programs.
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(j) Supervising, along with the Bank's Mortgage
Department Manager, the Bank's mortgage originations, servicing and secondary
marketing operations.
(k) Developing, in concert with the Bank's Compliance
Officer, consumer compliance policies and procedures as they relate to existing
and future regulations in matters relative to the lending function.
(l) Maintaining awareness of legal and regulatory
developments by participation in trade associations, contact with regulators,
legislators, et al., and extensive study of trade periodicals, regulatory
rulings and interpretations and legislative and regulatory proposals.
(m) Communicating with, educating and training the Bank's
staff in lending compliance and operational policies and procedures.
(n) Conveying to bank personnel the need to maintain the
delicate balance between long, established, prudent lending practices and the
equally critical need to comply with federal and state consumer protection
regulations.
(o) Analyzing the impact of regulations and litigation
and communicating with other senior management and affected department(s)
through bulletins, specialized training, review and revision of forms and
writing of policies and procedures.
(p) Preparing position papers, testimony and responses to
regulatory inquiries on specific subjects as necessary.
(q) Developing responses to examination report exceptions
for the Bank's Chief Executive Officer, appropriate bank consultants and
regulatory agencies.
(r) Participating in community activities and affairs and
public relations opportunities as a senior Bank official.
(s) Developing, reviewing and responding to internal loan
compliance audits.
(t) Reviewing loan forms, notices and loan related
advertising in concert with the Bank's Compliance Officer before distribution.
(u) Participating in the development of new and existing
clients.
2. EXCLUSIVITY
Employee agrees that throughout the term hereof he shall
diligently devote his full time and best efforts to Bank's business. Employee
agrees to perform his services conscientiously, efficiently and to the best of
his ability. Except with the prior consent of Bank's board of directors,
Employee will not engage directly or indirectly in any other business activity
(whether or not for pecuniary advantage) that is or may be competitive with or
might place him in a competing position to that of Bank or any company
affiliated with Bank. Notwithstanding the foregoing, Bank agrees that nothing
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contained herein shall prevent Employee from making passive investments in other
non-competing businesses. Employee agrees that he shall not engage in conduct
which is in contravention of Bank's conflict of interest policy.
3. TERM
Employee's employment under this Agreement shall commence on
April 1, 1999 (the "Effective Date") and shall continue thereafter for a period
of three years from the date thereof ("Term").
4. COMPENSATION
(a) SALARY
Bank shall pay Employee a base salary ("Base Salary")
of $105,000 per annum, less appropriate withholdings, taxes and similar
deductions, payable in equal installments on those days when Bank normally pays
its Employees. Not less than once each 12 months, the Chief Executive Officer of
Bank shall review the Base Salary of Employee for consideration of increasing
the Base Salary based upon the performance of Employee, market conditions for
salaries to individuals similarly employed, increases in the cost of living, and
similar factors.
(b) BONUS
At the end of each calendar year, the amount of bonus
compensation, if any, to be paid to Employee shall be determined in the
discretion of the Board of Directors and Chief Executive Officer of Bank based
upon the performance of Employee and the results of Bank's operations.
(c) BUSINESS EXPENSES
In accordance with Bank policy as it may exist from
time to time, and subject to the approval of all such expenses by the Chief
Executive Officer of Bank, Employee shall be entitled to reimbursement by Bank
for any ordinary, reasonable business expenses incurred by Employee in the
performance of Employee's duties and in acting for Bank during the term of this
Agreement, provided that Employee furnishes to Bank substantially adequate
records and other documentary evidence as required by Bank's policies or by
federal and state statutes and regulations with respect to the substantiation of
such expenditures as deductible business expenses of Bank.
(d) BENEFITS
During the term of his employment under this
Agreement, Employee shall be entitled to receive the following benefits:
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(i) Employee shall be eligible to participate in
all employee benefit plans maintained by Bank, including (without limitation)
any disability, health, accident and other insurance programs, paid vacations,
and similar plans or programs, subject to terms and conditions of each plan
currently in effect.
(ii) Employee shall receive from Bank a car
allowance of $500 per month.
(iii) Subject to availability at customary and
usual rates, Bank shall provide term insurance on the life of Employee in a
principal amount equal to three times Employee's Base Salary, up to a maximum
principal amount of $300,000. Employee shall be responsible for a portion of the
premium due on said insurance, as determined by Bank's benefit plan for other
full time employees.
(e) STOCK OPTIONS
Employee shall be eligible to participate in Bank's
Stock Option Plan (the "Plan"). Employee will be granted options in the
discretion of Bank's Board of Directors.
5. DISABILITY AND DEATH
(a) If employee suffers a physical or psychological
condition which renders him incapable of performing the essential functions of
his job with or without a reasonable accommodation prior to the termination of
this Agreement, then, to the extent permitted by law, Bank shall have the right
upon ten days written notice to terminate this Agreement and Employee's
employment hereunder.
(b) Immediately following the date on which Bank
terminates Employee's employment pursuant to Section 5(a) of this Agreement, or
earlier if required by law, Bank shall pay to Employee all incurred but
unreimbursed business expenses, accrued but unpaid salary, earned but unpaid
bonus, and accrued but unused vacation time, such salary and vacation time to
accrue until the last day of the month in which Employee's last working day
occurred. Thereafter, Bank's obligations shall terminate, but Employee shall
continue to be eligible to receive benefits under the disability plans, if any,
that Bank maintains as of the date of termination, provided that Employee
satisfies the requirements of such plans, if any.
(c) If Employee dies before receipt of the entire amount
specified in Section 5(b), then unpaid amounts shall be paid to Employee's
estate.
(d) In the event of Employee's death during the term of
this Agreement, this Agreement shall terminate. Immediately after the date of
death, or earlier if required by law, Bank shall pay to Employee's estate all
incurred but unreimbursed business expenses, accrued but unpaid salary, earned
but unpaid bonus, and accrued but unused vacation time, with such salary and
vacation to accrue until the last day of the month in which Employee's last
working day occurred.
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6. TERMINATION FOR CAUSE AND WITHOUT CAUSE
(a) Except as otherwise provided in this Agreement, this
Agreement may be terminated for cause immediately by Bank, at Banks option upon
notice to Employee, upon the occurrence of any of the following events. "Cause"
shall include but not be limited to the following items:
(i) A material breach by Employee of any of the
terms or provisions of this Agreement;
(ii) The repeated neglect by Employee of his
duties under this Agreement or any material act of dishonesty, intentional
misrepresentation or moral turpitude, including the misappropriation or
embezzlement of property of Bank or a customer of Bank, the unauthorized
intentional disclosure of confidential information, or a fraud by Employee in
the performance of his duties as an employee of Bank;
(iii) Employee is convicted of a misdemeanor
involving moral turpitude or a felony;
(iv) Conduct that would preclude Bank's ability
to bond Employee; or
(v) A written finding, order or directive from
any state or federal banking regulator with jurisdiction over Employer that
Employee has operated Bank in an unsafe manner or ordering the removal of
Employee as an executive officer of Bank.
In the event Employee is terminated for cause,
Employee shall be entitled to receive salary through the effective date of the
termination, any incurred but unreimbursed business expenses, and any accrued
but unused vacation time as of the date of termination. Employee shall not he
entitled to any other compensation.
(b) During the Term, this Agreement may be terminated
immediately without cause by Bank upon written notice except as otherwise
provided for elsewhere in this Agreement. For purposes of this provision,
"termination without cause" shall include (i) assignment of employee to duties
of substantially lesser responsibility to those described in Section 1 hereof,
(ii) a material adverse change in the position of Chief Credit Officer,
including title, lines of reporting, authority or responsibilities, or (iii)
adverse changes in levels of base salary.
(i) Upon notice by Employee, Bank shall have
right to correct any changes referenced above by Employee, within 30 days of
said notification, and restore Employee to the position described in Section 1
of this Agreement.
(ii) If Employee's employment is terminated
without cause by Bank under this section, Employee shall be entitled to receive
(within ten days of termination) salary through the effective date of the
termination, a lump sum amount equal to the total of payments of Base Salary
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remaining to be paid during the Term, any accrued but unused vacation pay as of
the date of termination, and any incurred but unreimbursed business expenses;
provided, however, that in the event the Office of the Comptroller of the
Currency ("OCC") does not approve the payment to Employee of a lump sum amount
equal to the total of payments of Base Salary remaining to be paid during the
Term, then the amount of the lump sum Base Salary payment to Employee as the
result of termination without cause shall be such lesser amount as is approved
by the OCC; provided further, however, that in no event shall the lump sum Base
Salary amount paid to Employee pursuant to this paragraph be less than the
smaller of (A) 18 months Base Salary or (B) the total of payments of Base Salary
remaining to be paid during the Term.
(c) During the Term, this Agreement may be terminated
without cause by Employee on 90 days notice to Bank. If this Agreement is
terminated without cause by Employee, Employee shall be entitled to receive
salary through the effective date of termination, any accrued but unused
vacation pay as of the date of termination, and any incurred but unreimbursed
business expenses.
(d) Unless otherwise agreed, if Employee is terminated
for any reason or resigns for any reason, Employee agrees to resign immediately
from the Board of Directors and all committees or other positions held with
Bank, effective as of the last date of employment.
7. TRANSITION AGREEMENT
This Agreement incorporates by reference the terms of the
Transition Agreement between Bank and Employee dated September 21, 1998
("Transition Agreement"). Nothing contained in this Agreement shall be deemed to
contradict or to be inconsistent with any of the terms of the Transition
Agreement. Any and all rights created pursuant to the Transition Agreement shall
be in addition to Employee's rights pursuant to this Agreement.
8. OWNERSHIP OF CONFIDENTIAL PROPRIETARY INFORMATION
All records of the accounts of customers, and any other
records and books relating in any manner whatsoever to the customers of Bank,
and all other files, books and records and other materials owned by Bank or used
by it in connection with the conduct of its business, whether prepared by
Employee or otherwise coming into his possession, shall be the exclusive
property of Bank regardless of who actually prepared the original material, book
or record. All such books and records and other materials shall be immediately
returned to Bank by Employee on any termination of his employment.
9. TRADE SECRETS
During the Term, Employee will have access to and become
acquainted with what Employee and Bank acknowledge are trade secrets, including
the names of customers and clients of Bank, their financial condition and
financial needs, financial information regarding Bank and other information
relating to Bank's products, services and methods of doing business.
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Employee agrees not to disclose any of Bank's trade secrets, directly or
indirectly, or use them in any way, either during the term of employment (except
as required in the course of employment with Bank) or for a period of twelve
months after the termination of this Agreement. Employee will not, for one year
following the termination of Employee's employment with Bank, solicit for
employment elsewhere individuals who are active, full-time employees of Bank.
10. INDEMNIFICATION
To the extent permitted by and consistent with Section 317 of
the California Corporations Code ("Section 317"), the Articles of Incorporation
and the Bylaws of Bank, Bank shall indemnify Employee for expenses, judgments,
fines, settlements and other amounts actually incurred by Employee in connection
with any proceeding to which Employee is a party by reason of the fact that
Employee is or was an agent of Bank (as defined in Section 317) if the
proceeding arose from acts or omissions in the course and scope of Employee's
employment other than willful misconduct or acts not covered by any
indemnification agreement between Bank and Employee. Bank shall advance on
behalf of Employee all costs, including attorneys' fees, as necessary with
respect to any such proceeding. In the event any applicable law shall require
the issuance of an undertaking by Employee, such shall be acceptable without
bond, collateral or any other security being given by Employee in connection
therewith. This provision shall survive the termination of this Agreement for
any reason.
11. ASSIGNMENT AND MODIFICATION
Except as required by the surviving entity in a change of
control, this Agreement and the rights and duties hereunder may not be assigned
by any party hereto without the prior written consent of the other, and the
parties expressly agree that any attempt to assign the rights of any party
hereunder without such consent will be null and void. Any modification of this
Agreement shall be made in a writing executed by both parties.
12. FURTHER ASSURANCE
From time to time each party will execute and deliver such
further instruments and will take such other action as the other party
reasonably may request in order to discharge and perform the obligations and
agreements hereunder.
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13. NOTICES
All notices required or permitted hereunder shall be in
writing and shall be delivered in person or sent by certified or registered
mail, return receipt requested, postage prepaid as follows:
To Bank: Chairman of the Board
Six Rivers National Bank
402 "F" Street
Eureka, CA 95501
To Employee: Shelton J. Francis
Six Rivers National Bank
402 "F" Street
Eureka, CA 95501
or such other party and/or address as any of such parties may designate in a
written notice served upon the other parties in the manner provided herein. All
notices required or permitted hereunder shall be deemed duly given and received
on the date of delivery if delivered in person or on the second day next
succeeding the date of mailing if sent by certified or registered mail.
14. ARBITRATION
Except as otherwise specifically set forth herein, any
controversy or claim arising out of or relative to this Agreement, or the breach
thereof, or any claim relative to employment discrimination, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered shall be and may be entered in
any court having jurisdiction thereof. Such arbitration shall take place in
Humboldt County, California, unless otherwise agreed to in writing by the
parties. Employee understands and agrees that this Agreement is a waiver of
Employee's right to receive punitive damages to which Employee may otherwise be
entitled in a court action on a disputed termination or for claims of unlawful
discrimination or harassment allegedly occurring during the course of
employment. Only the arbitrator, not a judge or jury, will decide the claim or
dispute.
15. SUCCESSORS
This Agreement shall be binding upon, and shall inure to the
benefit of, the successors of the parties.
16. OCC APPROVAL
In the event that any of the provisions, or portions thereof,
of this Agreement require the advance approval of the OCC, such provisions shall
not be deemed to be effective unless and until such approval is obtained. In the
event that OCC approval is not obtained for any of the provisions, or portions
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thereof, of this Agreement, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
17. ENTIRE AGREEMENT
This Agreement and the Transition Agreement constitute the
entire agreement between the parties, and all prior negotiations,
representations, or agreements between the Parties, whether oral or written, are
merged into this Agreement and the Transition Agreement and shall be deemed
superseded and canceled.
18. GOVERNING LAW
This Agreement shall be construed in accordance with the laws
of the State of California.
19. EXECUTED COUNTERPARTS
This Agreement may be executed in one or more counterparts,
all of which together shall constitute a single agreement and each of which
shall be an original for all purposes.
20. SECTION HEADINGS
The various section headings are inserted for purposes of
convenience only and shall not affect the meaning or interpretation of tilts
Agreement or any section hereof.
21. CALENDAR DAYS/CLOSE OF BUSINESS
Unless the context so requires, all periods terminating on a
given day, period of days or date shall terminate on the close of business on
that day or date, and references to "days" shall refer to calendar days.
22. SEVERABILITY
In the event that any of the provisions, or portions thereof,
of this Agreement are held to be unenforceable or invalid by any court of
competent jurisdiction, the validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby.
23. ATTORNEYS' FEES
In the event that any party shall bring any arbitration,
action to enforce arbitration or any other legal action or proceeding
(collectively "action") arising out of or in connection with the performances
breach or interpretation of this Agreement, then the prevailing party in such
action as determined by the court or other body having jurisdiction shall be
entitled to recover from the losing party, as determined by the court or other
body having jurisdiction, all reasonable costs and expenses of the action,
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including reasonable attorneys' fees, court costs, costs of investigation and
other costs reasonably related to such action, in such amounts as may be
determined in the discretion of the court or other body having jurisdiction.
IN WITNESS WHEREOF, this Agreement is executed as of the day and year
first above written.
/s/ SHELTON J. FRANCIS
-------------------------------------------
Shelton J. Francis
SIX RIVERS NATIONAL BANK
By: /s/ WILLIAM T. KAY
--------------------------------------
William T. Kay
Title: Chairman of the Board
------------------------------------
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