SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
-----------------------------
For the Quarter ended September 30, 1996 Commission File No. 0-15450
SIERRAWEST BANCORP
(Exact Name of Registrant as Specified in its Charter)
California 68-0091859
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Reorganization)
10181 Truckee-Tahoe Airport Rd., P.O. Box 61000, 96160-9010
Truckee, California
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (916) 582-3000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of October 31, 1996: Common Stock - Authorized 10,000,000 shares of no par;
issued and outstanding - 2,742,819.
<PAGE>
10-Q Filing
September 30, 1996
Part I. Financial Information
Item 1. Financial Statements
Following are condensed consolidated financial statements for SierraWest Bancorp
("Bancorp", or together with its subsidiaries, the "Company") for the reportable
period ending September 30, 1996. These condensed consolidated financial
statements are unaudited, however, in the opinion of management, all adjustments
have been made for a fair presentation of the financial condition and earnings
of the Company in conformity with generally accepted accounting principles. The
accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
<TABLE>
SIERRAWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
September 30, 1996 and December 31, 1995
(Amounts in thousands of dollars)
ASSETS 09/30/96 12/31/95
- ------ -------- --------
<S> <C> <C>
Cash and due from banks $ 23,268 $ 18,689
Federal funds sold 12,900 20,500
Investment securities and investment in
mutual funds 34,447 29,734
Loans held for sale 37,200 16,529
Loans and leases, net of allowance for
possible loan and lease losses of $4,577
in 1996 and $3,845 in 1995 (Note 2) 263,384 219,595
Other assets 34,042 32,471
------ ------
TOTAL ASSETS $405,241 $337,518
======== ========
LIABILITIES
- -----------
Deposits $358,949 $293,154
Convertible debentures 9,035 10,000
Other liabilities 5,405 4,531
----- -----
TOTAL LIABILITIES 373,389 307,685
------- -------
SHAREHOLDER'S EQUITY
- --------------------
Common stock 11,758 10,709
Retained earnings 20,222 19,131
Unrealized loss on investment securities
available for sale, net of tax (128) (7)
---- --
TOTAL SHAREHOLDERS' EQUITY 31,852 29,833
------ ------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $405,241 $337,518
======== ========
</TABLE>
The accompanying notes are an integral part of these Condensed Consolidated
Statements of Condition.
<PAGE>
<TABLE>
SIERRAWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three and Nine Months Ended September 30, 1996 and 1995
(Amounts in thousands except per share amount
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
09/30/96 09/30/95 09/30/96 09/30/95
-------- -------- -------- --------
Interest Income:
<S> <C> <C> <C> <C>
Interest and fees on loans
and leases $ 8,018 $ 6,175 $22,001 $16,904
Interest on federal funds
sold 236 186 652 360
Interest on investment
securities and deposits 460 405 1,290 1,238
--- --- ----- -----
Total Interest Income 8,714 6,766 23,943 18,502
----- ----- ------ ------
Less Interest Expense:
Interest on deposits 3,075 2,075 8,363 5,188
Interest on convertible
debentures 195 212 592 638
Other interest expenses 5 (1) (42) 15
- -- --- --
Total Interest Expense 3,275 2,286 8,913 5,841
----- ----- ----- -----
Net Interest Income 5,439 4,480 15,030 12,661
Provision for Possible
Loan and Lease Losses 250 390 910 980
--- --- --- ---
Net Interest Income After
Provision for Possible
Loan and Lease Losses 5,189 4,090 14,120 11,681
Other Operating Income 1,825 1,977 5,246 6,058
Other Operating Expenses 5,472 5,020 16,302 15,159
----- ----- ------ ------
Income Before Provision
for Income Taxes 1,542 1,047 3,064 2,580
Provision for Income Taxes 602 424 1,168 993
--- --- ----- ---
NET INCOME $ 940 $ 623 $ 1,896 $ 1,587
======= ======= ======= =======
EARNINGS PER SHARE
Primary $ 0.33 $ 0.23 $ 0.68 $ 0.59
Weighted Average Shares
Outstanding 2,818 2,649 2,775 2,675
Fully diluted 0.28 0.20 0.60 0.53
Weighted Average Shares
Outstanding 3,755 3,676 3,739 3,687
Cash Dividends Paid Per
Share of Common Stock $ 0.15 $ 0.12 $ 0.30 $ 0.24
</TABLE>
The accompanying notes are an integral part of these Condensed Consolidated
Statements of Income.
<PAGE>
<TABLE>
SIERRAWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended September 30, 1996 and 1995
(Amounts in thousands of dollars)
Nine Nine
Months Months
Ended Ended
09/30/96 09/30/95
-------- --------
<S> <C> <C>
Cash Flow from Operating Activities:
Interest and Fees Received $ 23,475 $ 17,619
Service charges and commissions received 1,272 1,283
Servicing income received 4,220 4,679
Interest paid (8,973) (5,946)
Cash paid to suppliers and employees (14,695) (13,490)
Income taxes paid (1,090) (965)
Mortgage loans originated for sale 0 (25,176)
Government guaranteed loans originated
for sale (8,194) (18,724)
SBA loans sold 134 5,503
Mortgage loans sold 0 26,167
Other items 812 788
--- ---
Net Cash Used in Operating Activities $ (3,039) $ (8,262)
-------- --------
Cash Flow From Investing Activities:
Proceeds from:
Sales of mutual funds-available for sale 0 225
Maturities of investment securities-held to maturity 1,015 573
Maturities of investment securities-available for sale 10,230 1,198
Sales of investment securities-available for sale 8,239 8,484
Sales of investment securities-held to maturity
(Note 5) 0 999
Purchase of investment securities-available for sale (24,483) (4,092)
Loans and leases made net of principal collections (56,887) (37,303)
Capital expenditures (3,701) (1,944)
Decrease (increase) in other assets 458 (28)
--- ---
Net Cash Used in Investing Activities $(65,129) $(31,888)
-------- --------
Cash Flow from Financing Activities:
Net increase (decrease) in demand, interest bearing
and savings accounts 25,348 (3,003)
Net increase in time deposits 40,447 52,471
Dividend paid (805) (624)
Proceeds from issuance of common stock 157 77
Repurchase of common stock 0 (445)
- ----
Net Cash Provided by Financing Activities $ 65,147 $ 48,476
-------- --------
Net (decrease) increase in Cash and Cash Equivalents (3,021) 8,326
Cash and Cash Equivalents at Start of Year 39,189 26,049
------ ------
Cash and Cash Equivalents at September 30 $ 36,168 $ 34,375
======== ========
</TABLE>
The accompanying notes are an integral part of these Condensed Consolidated
Statements ofCash Flows.
<PAGE>
<TABLE>
SIERRAWEST BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For The Nine Months Ended September 30, 1996 and 1995
(Continued) (Amounts in thousands of dollars)
RECONCILIATION OF NET INCOME TO NET
CASH USED IN OPERATING ACTIVITIES
Nine Nine
Months Months
Ended Ended
09/30/96 09/30/95
-------- --------
<S> <C> <C>
Net Income: $ 1,896 $ 1,587
Adjustment to Reconcile Net income to Net
Cash Provided:
Depreciation and amortization 891 806
Provision for possible loan and lease losses 910 980
Provision for income taxes 1,168 993
Amortization of excess servicing on SBA loans 979 1,009
Amortization of purchased mortgage servicing
rights 129 129
Decrease in interest payable (60) (105)
Increase in accrued expenses 928 396
Amortization of premiums/discounts on loans (358) (345)
Decrease in taxes payable (1,090) (965)
Increase in loans originated for sale (8,060) (12,230)
(Increase) decrease in prepaid expenses (212) 53
Other items (160) (570)
---- ----
Total Adjustments (4,935) (9,849)
------ ------
Net Cash Used In Operating Activities $ (3,039) $ (8,262)
======== ========
</TABLE>
--------------------------------------------------------------------
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES
In 1996, $15.7 million of unguaranteed SBA loans and $4.3 million of guaranteed
SBA loans were transferred to held for sale status. Also in 1996, $965 thousand
of convertible debentures were converted to common stock, net of $73 thousand
unamortized offering costs.
For the nine months ended September 30, 1996 and 1995, $66,000 and $373,000 of
loans were transferred to other real estate owned.
In the 1995 period, $572,000 of assets formerly classified as in-substance
foreclosures were reclassified as loans.
In 1995, $20.0 million of unguaranteed SBA loans originated in earlier years
were transferred to held for sale status. Concurrently, $21.4 million of
guaranteed SBA loans were transferred to the Company's investment portfolio at
cost, which was lower than market.
The accompanying notes are an integral part of these Condensed Consolidated
Statements of Cash Flows.
<PAGE>
SierraWest Bancorp
Notes to Condensed Consolidated Financial Statements
September 30, 1996 and December 31, 1995
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in a condensed format and, therefore, do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. However, in the opinion of management, all adjustments,
consisting only of normal recurring adjustments, considered necessary for a
fair presentation have been reflected in the financial statements. The results
of operations for the nine months ended September 30, 1996, are not necessarily
indicative of the results to be expected for the full year.
2. LOANS AND LEASES
As of September 30, 1996, and December 31, 1995, the Bank's loan and lease
portfolio consisted of the following (in thousands):
<TABLE>
September December
30,1996 30, 1995
------- --------
<S> <C> <C>
Commercial.......................................$195,105 $155,176
Real Estate - Mortgage........................... 26,286 26,665
Real Estate - Construction....................... 32,730 31,718
Individual and Other............................. 5,726 6,530
Lease Receivables................................ 9,352 4,164
----- -----
Total gross loans and leases..................... 269,199 224,253
Unearned income on leases........................ (1,394) (808)
Net deferred loan costs/(fees)................... 156 (5)
Allowance for possible loan and lease losses..... (4,577) (3,845)
------ ------
Total net loans and leases...................... $263,384 $219,595
======== ========
Loans held for sale............................. $ 37,200 $ 16,529
======== ========
</TABLE>
Of total gross loans and leases at September 30, 1996, $5.7 million were
considered to be impaired. The allowance for possible loan and lease losses
included $432 thousand related to these loans. The average recorded investment
in impaired loans during the nine months ended September 30, 1996 was $5.7
million.
3. COMMITMENTS & CONTINGENT LIABILITIES
In the normal course of business, there are outstanding various commitments and
contingent liabilities, such as commitments to extend credit and letters of
credit, which are not reflected in the financial statements. Management does
not anticipate any material loss as a result of these transactions.
4. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
During the first quarter of 1996, the Company entered into an interest rate
swap agreement with a major bank (the "Bank") to reduce its exposure to
fluctuations in interest rates. The notional principal amount is $20 million,
and the term is three years. Under the agreement, the Bank pays a fixed rate of
8.17% and receives from the Company the prime rate. Net interest income or
expense resulting from the differential between the fixed and prime rates is
recorded on a current basis and any resultant accrual is settled quarterly. The
net interest expense recognized in the first nine months of 1996 was $9,333.
<PAGE>
SierraWest Bancorp
Notes to Condensed Consolidated Financial Statements
September 30, 1996 and December 31, 1995
5. INVESTMENT SECURITIES
Sales of investment securities classified as held to maturity in 1995 consisted
of a single security which was sold within 90 days of the maturity date. The
amortized cost at the date of sale was $998,203 and the loss realized was
$1,172.
<PAGE>
SIERRAWEST BANCORP AND SUBSIDIARIES
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
FINANCIAL CONDITION
Total assets increased by $67.7 million from $337.5 million at December 31,
1995, to $405.2 million at September 30, 1996. This increase included increases
of $64.4 million in loans and loans held for sale, net of the allowance for
possible loan and lease losses, $4.7 million in investment securities and
investment in mutual funds, $4.6 million in cash and due from banks, and $1.6
million in other assets. These increases were offset by decreases of $7.6
million in federal funds sold. Mutual funds, federal funds sold and unpledged
investment securities classified as available for sale (which consist primarily
of U. S. Treasury securities with a remaining maturity of less than two years
and col- lateralized mortgage obligations) are all sources of short-term
liquidity and can be used somewhat interchangeably to provide liquidity. Of the
Company's total investment securities, $9.0 million were pledged at September
30, 1996.
The following table summarizes the Company's deposit and loan portfolios as of
September 30, 1996, and December 31, 1995.
<TABLE>
Deposits: 09/30/96 12/31/95 Change
-------- -------- ------
<S> <C> <C> <C>
Non-interest bearing demand................. $ 69,479 $ 60,579 $ 8,900
Savings..................................... 13,326 13,693 (367)
Interest bearing transaction accounts....... 108,088 91,273 16,815
Time........................................ 168,056 127,609 40,447
------- ------- ------
TOTAL DEPOSITS............................ $358,949 $293,154 $ 65,795
======== ======== ========
Loans: 09/30/96 12/31/95 Change
-------- -------- ------
SBA......................................... $146,793 $116,529 $ 30,264
Other Commercial............................ 85,512 55,176 30,335
Real Estate................................. 59,016 58,383 634
Individual and Other........................ 5,726 6,530 (804)
Lease Receivables........................... 9,352 4,164 5,188
----- ----- -----
SUBTOTAL.................................. 306,399 240,782 65,617
Net deferred loan fees/costs and unearned
income on leases.......................... (1,238) (813) (425)
------ ---- ----
TOTAL GROSS LOANS AND LEASES.............. $305,161 $239,969 $ 65,192
======== ======== ========
</TABLE>
Included in SBA loans at September 30, 1996 are loans held for sale totaling
$37.2 million. Of the $30.3 million increase in commercial loans, $11.8 million
was generated in the Company's Nevada branches and $11.7 million was generated
out of the Company's new branch located in Sacramento, California. Loans held
for sale increased $20.7 million, primarily as a result of a change in SBA
regulations. In 1996, the SBA ruled that loans originated through the Preferred
Lender Program could be sold down to 10% of the principal balance. At December
31, 1995, loans held for sale reflected the previous regulation allowing sale
down to 20%. Pending approval from the SBA, the Company intends to securitize
these loans and sell the resulting securities to investors.
Unearned income on leases totaled $1.4 million at September 30, 1996 and $0.8
million at December 31, 1995.
The increase in time deposits includes a $10.9 million increase in out-of-area
certificates of deposit. The Company's new branches opened during 1995 generated
a net increase in deposits of $34.7 million during the first nine months of
1996.
Included in interest bearing transaction accounts are money market accounts
totaling $61.9 million and $50.6 million at September 30, 1996 and December 31,
1995, respectively.
The unrealized loss on investment securities available for sale, net of the
related tax effect, increased $121 thousand from $7 thousand at December 31,
1995 to $128 thousand at September 30, 1996. Of this ending balance, $117
thousand represents unrealized losses on mutual funds. Gross unrealized losses
on securities classified as available for sale represent 0.6% of the amortized
cost of the Company's available for sale securities at September 30, 1996.
The Company has completed construction of a new regional facility in Reno,
Nevada. Total costs incurred for the land and building through September 30,
1996 were $3.8 million. The final total cost of this facility is not expected to
exceed $4.1 million. Also under construction is a branch facility in Carson
City, Nevada to replace the leased branch currently in use. Total cost of the
land and building for the Carson City facility is estimated at $1.2 million with
completion expected in December, 1996. As of September 30, 1996 the Company has
incurred land and construction costs of $782 thousand on this facility.
Bancorp paid dividends of fifteen cents per share in April and September 1996.
In the first quarter of 1996, the names of both of the Bancorp's banking
subsidiaries were changed to SierraWest Bank. Effective October 1, 1996 the
operations of the Company's Nevada subsidiary were merged into the California
subsidiary.
Also in the first nine months of 1996, $965 thousand of the Company's 8%
convertible debentures were converted into 96,500 shares of common stock.
RESULTS OF OPERATIONS (Nine Months Ended September 30, 1996 and 1995)
Net income for the nine months ended September 30, 1996 increased by 19.5% from
$1,587 thousand for the nine months ended September 30, 1995 to $1,896 thousand
during the current nine month period. Net interest income increased by $2,369
thousand while the provision for loan and lease losses decreased by $70
thousand. The positive effect of these items on net income was partially offset
by a reduction of $812 thousand in other operating income, a $1,143 thousand
increase in other operating expenses and a $175 thousand increase in the
provision for income taxes.
Net Interest Income
The yield on average interest earning assets for the nine months ended September
30, 1996 was 6.25%. This compares to 7.32% for the first nine months of 1995.
The decrease reflects the decrease in the average prime rate during the
comparison periods and the funding of loan growth primarily through the issuance
of time deposits. In addition, related to market conditions in the Company's
service areas, the average rate paid on the Company's money market accounts has
increased during the comparison periods.
Yields and interest earned on loans, including loan fees for the nine months
ended September 30, 1996 and 1995, were as follows (in thousands except percent
amounts):
<TABLE>
Nine Nine
Months Months
Ended Ended
09/30/96 09/30/95
-------- --------
<S> <C> <C>
Average loans outstanding (1) $272,826 $192,393
Average yields 10.8% 11.8%
Amount of interest and origination fees earned $ 22,001 $ 16,904
</TABLE>
(1) Amounts outstanding are the average of daily balances for the periods.
Excluding loan fees of $858 thousand and $846 thousand for the nine months ended
September 30, 1996 and 1995, yields on average loans outstanding were 10.4% and
11.2%, respectively. The prime rate (upon which a large portion of the Company's
loan portfolio is based), averaged 8.3% for the 1996 period and 8.9% for the
1995 period.
The Company has experienced an increase in its overall cost of deposits from
2.99% for the nine months ended September 30, 1995 to 3.48% in the current
period. This includes the effect of the increase in rates on Money Market
accounts during the comparison period and an increase in the percentage of time
deposits to total deposits. Average time deposits were 46.1% and 35.3% of
average total deposits for the nine months ended September 30, 1996 and 1995,
respectively.
<PAGE>
Rates and amounts paid on average deposits including non-interest bearing
deposits for the nine months ended September 30, 1996 and 1995 were as follows
(in thousands except percent amount):
<TABLE>
Nine Nine
Months Months
Ended Ended
09/30/96 09/30/95
-------- --------
<S> <C> <C>
Average deposits outstanding (1) $321,348 $230,947
Average rates paid 3.5% 3.0%
Amount of interest paid or accrued $ 8,363 $ 5,188
</TABLE>
(1) Amounts outstanding are the average of daily balances for the periods.
The effective interest rate paid on NOW accounts, Money Market accounts and Time
Certificates of Deposits during the first nine months of 1996 and 1995 were as
follows:
<TABLE>
1996 1995
-------------------------------------------------------
MONEY MONEY
NOW MARKET TIME NOW MARKET TIME
-------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Average Balance
(in thousands)(1) $42,413 $ 56,612 $148,263 $ 35,779 $ 50,743 $ 81,503
Rate Paid 1.2% 3.4% 5.7% 1.3% 2.9% 5.8%
</TABLE>
(1) Amounts outstanding are the average of daily balances for the periods.
The increase in money market rates includes the effect of tiering money market
accounts at the Company's Nevada subsidiary and general market conditions in the
Company's service area.
Provision for Possible Loan and Lease Losses
In evaluating the Company's loan loss reserve, management considers the credit
risk in the various loan categories in its portfolio. Historically, most of the
Company's loan losses have been in its commercial lending portfolio which
includes SBA loans and local commercial loans. From inception of its SBA lending
program in 1983, the Company has sustained a relatively low level of losses from
these loans, averaging less than 0.5% of loans outstanding per year. Losses in
1994 for these loans were $373 thousand. During 1995, net losses in the SBA loan
portfolio increased to $575 thousand. For the first nine months of 1996, loan
losses net of recoveries totaled $178 thousand.
Most of the Company's non SBA commercial loan losses have been for loans to
businesses within the Tahoe basin area and during 1994 and 1995 at the Company's
SierraWest Bank subsidiary in Nevada. The Company believes that it has taken
steps to minimize its commercial loan losses, including centralization of
lending approval and processing functions. It is important for the Company to
maintain good relations with local business concerns and, to this end, it
supports small local businesses with commercial loans. To offset the added risk
these loans may represent, the Company typically charges a higher interest rate.
It also attempts to mitigate this risk through the loan review and approval
process.
The provision for loan losses was $910 thousand and $980 thousand for the first
nine months of 1996 and 1995, respectively. The provision in 1996 is primarily
attributable to growth in the loan portfolio. Excluding the guaranteed portions
of loans, loans increased $53.1 million and $34.0 million in the first nine
months of 1996 and 1995, respectively. The allowance for possible loan and lease
losses as a percentage of loans and leases was 1.50% at September 30, 1996,
1.60% at December 31, 1995, and 1.68% at September 30, 1995. The decrease in the
allowance for possible loan and lease losses as a percentage of loans from
September 30, 1995 reflects the higher level of guaranteed loans in the
portfolio resulting from the Company's decision to retain the guaranteed portion
of loans it originates. The Company will monitor its exposure to loan losses
each quarter and adjust its level of provision in the future to reflect changing
circumstances. The Company expects that its existing loan loss reserve will be
adequate to provide for any additional losses.
The following table sets forth the ratio of nonaccrual loans to total loans, the
allowance for possible loan and lease losses to nonaccrual loans and the ratio
of the allowance for possible loan and lease losses to total loans and leases,
as of the dates indicated.
<TABLE>
September 30 December 31
-------------- ------------------------
1996 1995 1995 1994 1993
-------------- ------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans to total loans 1.9% 1.8% 2.3% 1.4% 1.8%
Allowance for possible loan and lease
losses to nonaccrual loans 79.7% 93.7% 70.2% 142.9% 120.9%
Allowance for possible loan and lease
losses to total loans 1.5% 1.7% 1.6% 2.1% 2.2%
</TABLE>
If the guaranteed portions of loans on nonaccrual status, which total $1.95
million, are excluded from the calculations, the ratio of nonaccrual loans to
total loans and leases at September 30, 1996 declines to 1.2% and the allowance
for possible loan and lease losses to nonaccrual loans increases to 120.7%.
At September 30, 1995, excluding the guaranteed portions of loans on nonaccrual,
these same percentages are 1.3% and 127.8%, respectively.
The following table sets forth the amount of the Company's nonperforming loans
as of the dates indicated (amounts in thousands).
<TABLE>
September 30 December 31
--------------- ------------------------
1996 1995 1995 1994 1993
--------------- ------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans:
SBA............................. $5,484 $3,920 $5,351 $2,423 $2,517
Other........................... 261 71 125 59 355
Accruing loans past due 90
SBA............................. 1,037 1,285 816 1,754 496
Other........................... 1,049 234 207 9 1,029
Restructured loans (in
compliance with modified terms) 140 99 78 194 201
</TABLE>
The performance of the Company's loan portfolio is evaluated regularly by
management. The Company places a loan on nonaccrual status when one of the
following events occurs: any installment of principal or interest is 90 days or
more past due, unless, in management's opinion, the loan is well secured and the
collection of principal and interest is probable, or management determines the
ultimate collection of principal or interest on a loan to be unlikely. When a
loan is placed on nonaccrual status, the Company's general policy is to reverse
and charge against current income previously accrued but unpaid interest.
Interest income on such loans is subsequently recognized only to the extent that
cash is received and future collection of principal is deemed by management to
be probable.
Although the level of nonperforming assets will depend on the future economic
environment, as of October 31, 1996, in addition to the assets disclosed in the
above chart, management of the Company has identified approximately $69 thousand
in potential problem loans about which it has serious doubts as to the ability
of the borrowers to comply with the present repayment terms and which may become
nonperforming assets, based on known information about possible credit problems
of the borrower.
Interest income on nonaccrual loans which would have been recognized if all such
loans had been current in accordance with their original terms totaled $509
thousand for the nine months ended September 30, 1996. Interest income actually
recognized on nonaccrual loans for the nine months ended September 30, 1996 was
$216 thousand.
<PAGE>
The following table shows the loans outstanding, actual charge-offs, recoveries
on loans previously charged off, the allowance for possible loan and lease
losses and net loans charged off to average loans outstanding during the periods
and as of the dates indicated (amounts in thousands except percentage amounts).
<TABLE>
September 30 December 31
-------------------- -----------------------------
1996 1995 1995 1994 1993
-------------------- -----------------------------
<S> <C> <C> <C> <C> <C>
Average loans..............$272,826 $192,393 $203,231 $166,366 $159,463
Total gross loans at end of
period.................... 305,161 222,075 239,969 172,939 158,819
Allowance for possible loan
and lease losses: Balance
beginning of period.......$ 3,845 $ 3,546 $ 3,546 $ 3,472 $ 2,742
-------- -------- -------- -------- --------
Actual charge-offs:
SBA....................... 84 498 595 447 391
Commercial and industrial. 312 249 350 467 143
Real estate............... 0 40 40 60 190
Installment............... 25 27 40 101 42
-- -- -- --- --
Total.................... 421 814 1,025 1,075 766
--- --- ----- ----- ---
Less recoveries:
SBA....................... 68 8 20 74 14
Commercial and industrial. 165 12 26 187 52
Real estate............... 0 0 0 0 0
Installment............... 10 6 8 3 6
-- - - - -
Total................... 243 26 54 264 72
--- -- -- --- --
Net charge-offs............ 178 788 971 811 694
Allowance applicable to sold
loans..................... 0 0 0 0 (136)
Provision for possible loan and
lease losses.............. 910 980 1,270 885 1,560
--- --- ----- --- -----
Balance-end of period......$ 4,577 $ 3,738 $ 3,845 $ 3,546 $ 3,472
======== ======== ======== ======== ========
Net loans charged off to
average loans outstanding (1) 0.09% 0.55% 0.48% 0.49% 0.44%
</TABLE>
(1) Percentages for the nine months are based on annualized net charge-offs.
Included in total loans outstanding at September 30, 1996 and 1995 were SBA
loans totaling $146,793 thousand and $115,677 thousand, respectively.
<PAGE>
The following table sets forth management's historical allocation of the
allowance for possible loan and lease losses by loan category and percentage of
loans in each category. Percentage amounts are the percentage of loans in each
category to total loans at the dates indicated (in thousands except percentage
amounts).
<TABLE>
December 31,
-------------------------------------------------------
1995 1994 1993
----------------- ----------------- -----------------
Amount Percentage Amount Percentage Amount Percentage
----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
SBA loans............. $ 1,468 49% $ 2,372 56% $ 2,379 55%
Commercial and
industrial loans..... 1,592 24 627 18 541 17
Real estate loans..... 564 23 366 21 334 22
Consumer loans to
individuals (1)...... 221 4 181 5 218 6
--- - --- - --- -
Total............... $ 3,845 100% $ 3,546 100% $ 3,472 100%
======= === ======= === ======= ===
</TABLE>
<TABLE>
September 30,
-------------------------------------
1996 1995
----------------- -----------------
Amount Percentage Amount Percentage
----------------- -----------------
<S> <C> <C> <C> <C>
SBA loans............. $ 1,732 48% $ 2,025 52%
Commercial and
industrial loans..... 1,992 31 899 20
Real estate loans..... 559 18 509 23
Consumer loans to
individuals (1)...... 294 3 305 5
--- - --- -
Total............... $ 4,577 100% $ 3,738 100%
======= === ======= ===
</TABLE>
- -----------------------------------
(1) Includes equity lines of credit
In allocating the Company's loan loss reserve, management has considered the
credit risk in the various loan categories in its portfolio. While every effort
has been made to allocate the reserve to specific categories of loans,
management believes that any breakdown or allocation of the loan loss reserve
into loan categories lends an appearance of axactness which does not exist, in
that the reserve is utilized as a single unallocated reserve available for
losses on all types of loans.
Other Operating Income
Other operating income decreased $812 thousand during the first nine months of
1996 compared to the previous year's first nine months.
The gain on sale of SBA loans for the current nine month period declined from
$333 thousand at September 30, 1995 to $4 thousand. Sales of SBA loans for the
nine months ended September 30, 1996 totaled $134 thousand compared to $5.5
million in the 1995 period. In July 1995, the Company altered its strategy with
respect to the sale of SBA loans. Rather than continuing to sell the guaranteed
portion of the portfolio, the Company began to retain the guaranteed portion and
plans to securitize and sell portions of unguaranteed SBA loans. The Company's
loan portfolio currently includes $29.4 million in guaranteed portions of SBA
loans which are available for sale, an increase of $14 million over the balance
at December 31, 1995. The Company plans on selling approximately $4.3 million of
guaranteed portions of SBA loans during the fourth quarter of 1996 in order to
lower its holdings of loans to the hotel/motel industry. By selling these
guaranteed portions the Company is able to take advantage of new lending
opportunities in this industry while maintaining an acceptable level of loans to
this industry in its portfolio.
Net servicing income on SBA loans (the net of the servicing income generated on
sold SBA loans less the amortization of the gain recorded on the sale of these
same loans and the amortization of purchased SBA servicing rights) decreased by
$424 thousand from $3,536 thousand during the first nine months of 1995 to
$3,112 thousand for the nine months ended September 30, 1996. This decline
relates to payments on existing loans, including normal amortization and pre-
payments.
Mortgage banking income was $436 thousand in the first nine months of 1995. In
mid-1995, mortgage banking operations were terminated. This decrease has been
partially offset by an increase of $97 thousand in merchant credit card revenue,
a $45 thousand increase in building rental income and an increase of $167
thousand related to the sale of mutual funds and annuities through a third party
marketer. The Company rents out portions of its Truckee, CA administration
building.
In addition, included in other income in 1996 is an $84 thousand insurance
recovery on a 1995 foreclosure loss.
Other Operating Expense
The following table compares the various elements of non-interest expense as an
annualized percentage of total assets for the first nine months of 1996 and 1995
(in thousands except percentage amounts):
<TABLE>
Nine Months Salaries & Occupancy & Other
Ended Average Related Equipment Operating
September 30 Assets (1) Benefits (2) Expenses Expenses
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996 $366,612 3.1% 0.9% 1.7%
1995 $272,891 3.7% 1.1% 2.5%
</TABLE>
(1) Based on average daily balances.
(2) Excludes provision for payment of bonuses and contribution to KSOP plan.
Including these items, percentages are 3.3% and 3.9% for 1996 and 1995,
respectively.
The following table summarizes the principal elements of operating expenses and
discloses the increases (decreases) and percent of increases (decreases) for the
nine months ended September 30, 1996 and 1995 (amounts in thousands except
percentage amounts):
<TABLE>
Nine months ended Increase(decrease)
September 30 1996 over 1995
----------------- ---------------------
1996 1995 Amount Percentage
----------------- ---------------------
<S> <C> <C> <C> <C>
Salaries and related benefits $ 9,076 $ 7,860 $ 1,216 15.5%
Occupancy and equipment......... 2,575 2,232 343 15.4
Insurance....................... 183 208 (25) (12.0)
Postage......................... 254 235 19 8.1
Stationary and supplies......... 278 240 38 15.8
Telephone....................... 272 249 23 9.2
Advertising..................... 345 552 (207) (37.5)
Legal........................... 462 302 160 53.0
Consulting...................... 428 246 182 74.0
Audit and accounting fees....... 116 109 7 6.4
Directors' fees and expenses.... 331 631 (300) (47.5)
FDIC assessments................ 3 260 (257) (98.8)
Sundry losses................... 688 679 9 1.3
Other........................... 1,291 1,356 (65) (4.8)
----- ----- ---
$16,302 $15,159 $ 1,143 7.5%
======= ======= =======
</TABLE>
The increase in salary expense includes the effect of the four new branches
opened in 1995, partially offset by the termination of the Company's mortgage
operations. In addition the Company has increased the number of employees whose
compensation is partially commission based and has changed the commission
structure of many of its SBA loan production personnel. In total, commissions
and incentive pay have increased by $451 thousand during the comparison periods.
In addition, the Company has accrued bonus costs of $260 thousand in 1996 and
$51 thousand in 1995.
The increase in occupancy and equipment expense includes costs on the new
branches. The increase in legal expense during 1996 relates primarily to two
litigation matters. One matter went to trial in June, 1996 and was decided in
the Company's favor. Increased costs were incurred in the second matter, which
is ongoing and relates to a property acquired by the Company through
foreclosure. See Part II, Item 1 for a description of this matter. Consulting
costs during 1996 include $173 thousand related to costs associated with the
changing of the name of the Company's subsidiary banks. Advertising costs in
1995 were high primarily related to the new branch openings.
Directors' expense during the 1995 period included a $314 thousand pre-tax
charge for the Company's Director Emeritus Program. The decrease in FDIC
assessments resulted from a reduction in rates. Sundry losses in 1995 included a
$100 thousand business loss related to other real estate owned, $166 thousand
related to litigation matters and $223 thousand related to the termination of
mortgage operations. 1996 sundry losses include a charge of $352 thousand
related to a reduction in staffing effective May 1, 1996, $70 thousand on a
litigation matter and $114 thousand related to a servicing error on an SBA loan.
Provision for Income Taxes
Provision for income taxes have been made at the prevailing statutory rates and
include the effect of items which are classified as permanent differences for
federal and state income tax. The provision for income taxes was $1,168 thousand
and $993 thousand for the nine months ended September 30, 1996 and 1995,
respectively, representing 38.1% and 38.5% of income before taxation for the
respective periods.
Results of Operations (Three months ended September 30, 1996 and 1995)
Net income increased by $317 thousand from $623 thousand for the three months
ended September 30, 1995 to $940 thousand for the current quarter. The increase
included a $959 thousand increase in net interest income and a $140 thousand
reduction in the provision for loan and lease losses. These items were partially
offset by a $178 thousand increase in the provision for income taxes, a $152
thousand decrease in other operating income and a $452 thousand increase in
other operating expenses.
Net Interest Income
The yield on net interest earning assets decreased from 7.02% during the third
quarter of 1995 to 6.21% during the three months ended September 30, 1996. This
decrease in yield was offset by an increase of 37.5% in average interest earning
assets. Average interest earning assets totaled $348 million during the 1996
quarter and $253 million during the third quarter of 1995. As in the nine month
comparison, yield was negatively affected by an increase in the percentage of
average time deposits to total deposits and a decrease in the average prime
interest rate.
Yields and interest earned on loans, including loan fees for the nine months
ended September 30, 1996 and 1995 were as follows (in thousands except percent
amounts):
<TABLE>
Three Three
Months Months
Ended Ended
09/30/96 09/30/95
-------- --------
<S> <C> <C>
Average loans outstanding (1) $297,294 $211,264
Average yields 10.7% 11.6%
Amount of interest and origination fees earned $ 8,018 $ 6,175
</TABLE>
(1) Amounts outstanding are the average of daily balances for the periods.
Excluding loan fees of $366 thousand and $285 thousand for the three months
ended September 30, 1996 and 1995, respectively, yields on average loans
outstanding were 10.2% and 11.1%. The prime rate (upon which a large portion of
the Company's loan portfolio is based) was 8.25% for the 1996 quarter and
averaged 8.78% for the 1995 quarter. This decrease in prime is the major
component of the decrease in loan yields.
Rates and amounts paid on average deposits, including non-interest bearing
deposits for the three months ended September 30, 1996 and 1995, were as follows
(in thousands except percent amounts):
<TABLE>
Three Three
Months Months
Ended Ended
09/30/96 09/30/95
-------- --------
<S> <C> <C>
Average deposits outstanding (1) $350,698 $253,767
Average rate paid 3.5% 3.2%
Amount of interest paid or accrued $ 3,075 $ 2,075
</TABLE>
(1) Amounts outstanding are the average of daily balances for the periods.
<PAGE>
The effective interest rates paid on NOW accounts, Money Market accounts and
Time Certificates of Deposits during the third quarter of 1996 and 1995 were as
follows (in thousands except percent amounts):
<TABLE>
1996 1995
----------------------------------------------------------
MONEY MONEY
NOW MARKET TIME NOW MARKET TIME
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Average Balance (1) $46,445 $60,155 $163,004 $39,362 $47,073 $101,154
Average Rate Paid 1.2% 3.6% 5.7% 1.3% 3.1% 5.9%
</TABLE>
(1) Amount outstanding is the average of daily balances for the periods.
Time certificates of deposit represent 39.9% of average deposits during the
third quarter of 1995 and 46.5% during the 1996 quarter.
Provision for Possible Loan and Lease Losses
A detailed comparison analysis of the Company's non-performing loans and
charge-off history is reported in the nine month discussion. The provision
recorded during the third quarter of 1996 relates to loan growth during the
quarter.
Other Operating Income
The gain on sale of SBA loans was $23 thousand during the 1995 quarter,
resulting from total sales of $0.5 million. No sales were made during the
current quarter.
Net servicing income on SBA loans decreased from $1,161 thousand for the three
months ended September 30, 1995 to $1,001 thousand for the current quarter.
Mortgage banking income for the third quarter of 1995 totaled $176 thousand.
These decreases in other income, which in the aggregate totaled $359 thousand,
were partially offset by an $84 thousand insurance recovery and increased
revenues on the sale of mutual funds and annuities through a third party
marketer.
Other Operating Expense
The following table compares the various elements of non-interest expense as an
annualized percentage of total assets for the third quarter of 1996 and 1995 (in
thousands except percentage amounts):
<TABLE>
Three Months Salaries & Occupancy & Other
Ended Average Related Equipment Operating
September 30 Assets Benefits Expenses Expenses
- ------------ -------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
1996 396,253 2.9% 0.9% 1.5%
1995 296,222 3.7% 1.2% 2.2%
</TABLE>
(1) Based on average daily balances.
(2) Excludes provision for payment of bonuses and contribution to KSOP plan.
Including these items, percentages are 3.2% and 3.5% for 1996 and 1995,
respectively.
<PAGE>
The following table summarizes the principal elements of operating expenses and
discloses the increases (decreases) and percent of increases (decreases) for the
three months ended September 30, 1996 and 1995 (amounts in thousands except
percentage amounts):
<TABLE>
Three Months Increase
Ended (decrease)
September 30 1996 over 1995
-------------- -------------------
1996 1995 Amount Percentage
-------------- -------------------
<S> <C> <C> <C> <C>
Salaries and Related benefits.........$3,145 $2,596 $ 549 21.1%
Occupancy and Equipment............... 864 803 61 7.6
Insurance............................. 65 68 (3) (4.4)
Postage............................... 100 86 14 16.3
Stationary and supplies............... 107 94 13 13.8
Telephone............................. 93 99 (6) (6.1)
Advertising........................... 53 199 (146) (73.4)
Legal................................. 154 91 63 69.2
Consulting............................ 100 55 45 81.8
Directors' fees and expenses.......... 103 126 (23) (18.3)
Sundry losses......................... 177 328 (151) (46.0)
Other................................. 511 475 36 7.6
--- --- -- ---
$5,472 $5,020 $ 452 9.0%
====== ====== ====== ===
</TABLE>
The increase in salary and benefits includes commission and incentive costs of
$199 thousand and $175 thousand in accrued bonus expense. Sundry losses for the
1996 quarter include $70 thousand on a litigation matter and $114 thousand
related to a servicing error on an SBA loan.
Provision for Income Taxes
The provision for income taxes was $602 thousand and $424 thousand for the three
months ended September 30, 1996 and 1995, respectively, representing 39.0% and
40.5% of income before taxation for the respective periods.
<PAGE>
SierraWest Bancorp
10-Q Filing
September 30, 1996
Part II.
Item 1.Legal Proceedings.
During 1987, SierraWest Bank, formerly Truckee River Bank, ("SWB") took
title, through foreclosure, of a property located in Placer County which
subsequent to SWB's sale of the property was determined to be
contaminated with a form of hydrocarbons. At the time it owned the
property, SWB became aware of and investigated the status of certain
underground tanks that had existed on the property. SWB hired a
consultant to study the tanks and properly seal them. Several years
later, and after resale of the property, contamination was observed in
the area of at least one of the buried tanks and along an adjoining
riverbank of the Yuba River. SWB, at the time of resale of the property,
was not aware of this contamination adjacent to the tanks but was aware
of the existence of the tanks and disclosed this to its purchaser.
A formal plan of remediation has not been approved by the County of
Placer or the State Regional Water Quality Board but is being finalized
by an independent consultant retained for this purpose. As a result of
the discovery of the contamination, two civil lawsuits were instituted
against SWB and other prior owners by the current owner of the property,
Rainbow Holding Company, who is also SWB's borrower. One of the actions,
the state court matter, was dismissed by agreement of the parties. The
other matter, filed in the summer of 1995 in the U.S. District Court,
Eastern District of California, is ongoing, with the next status
conference anticipated in the next several months.
SWB's external and internal counsel on this matter believe that SWB's
share of the cost of remediation and the costs of defense will not be
material to SWB's or the Company's performance and will be within
existing reserves established by SWB for this matter. It is also expected
that clean-up of the property will be undertaken in the first half of
1997.
In addition, the Company is subject to some minor pending and threatened
legal actions which arise out of the normal course of business and, in
the opinion of Management and the Company's General Counsel, the
disposition of these claims currently pending will not have a material
adverse affect on the Company's financial position or results of
operations.
Item 2.Change in Securities. Not applicable.
Item 3.Defaults Upon Senior Securities. Not applicable.
Item 4.Submission of Matters to a Vote of Securities Holders. Not Applicable.
Item 5. Other Information. Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Incentive Stock Option Agreement between Sierra Tahoe Bancorp and
Claire H. Young, dated August 1, 1996.
10.2 Amendment No. 1 to Employment Agreement between SierraWest Bancorp
and William T. Fike, dated June 27, 1996.
10.3 Amendment No. 1 to Executive Salary Continuation Agreement between
SierraWest Bancorp and William T. Fike, dated June 27, 1996.
10.4 Amendment No. 1 to Executive Salary Continuation Agreement between
SierraWest Bancorp and David C. Broadley, dated June 27, 1996.
10.5 Amendment No. 1 to Executive Salary Continuation Agreement between
SierraWest Bancorp and Martin R. Sorensen, dated June 27, 1996.
10.6 Director's Amended and Restated Payment Continuation Agreement
between SierraWest Bancorp and William W. McClintock, dated June 27,
1996.
10.7 Director's Amended and Restated Payment Continuation Agreement
between SierraWest Bancorp and Jerrold T. Henley, dated June 27,
1996.
10.8 Director's Amended and Restated Payment Continuation Agreement
between SierraWest Bancorp and A. Morgan Jones, dated June 27, 1996.
10.9 Director's Amended and Restated Payment Continuation Agreement
between SierraWest Bancorp and Jack V. Leonesio, dated June 27,
1996.
10.10 Director's Amended and Restated Payment Continuation Agreement
between SierraWest Bancorp and Thomas M. Watson, dated June 27,
1996.
10.11 Director's Amended and Restated Payment Continuation Agreement
between SierraWest Bancorp and David W. Clark, dated June 27, 1996.
10.12 Director's Payment Continuation Agreement between SierraWest
Bancorp and Richard S. Gaston, dated June 27, 1996.
10.13 Director's Payment Continuation Agreement between SierraWest
Bancorp and John J. Johnson, dated June 27, 1996.
10.14 Director's Payment Continuation Agreement between SierraWest
Bancorp and Ralph J. Coppola, dated June 27, 1996.
10.15 Director's Payment Continuation Agreement between SierraWest
Bancorp and Ronald A. Johnson, dated June 27, 1996.
11. Statement regarding computation of per share earnings.
27. Financial Data Schedule
(b)Reports on Form 8-K.
There were no reports on Form 8-K filed for the quarter ended
September 30, 1996.
<PAGE>
10-Q Filing
September 30, 1996
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 thereunto duly authorized.
Date: 11/13/96 /s/ W.T. Fike
------------ ----------------------------
William T. Fike
President, Chief Executive Officer
Date: 11/13/96 /s/ David Broadley
------------ ---------------------------
David C. Broadley
Executive Vice President/Chief Financial Officer
<PAGE>
EXHIBIT 10.1
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF SIERRA TAHOE
BANCORP'S COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE SIERRA TAHOE
BANCORP 1996 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY THE
SHAREHOLDERS OF SIERRA TAHOE BANCORP.
SIERRA TAHOE BANCORP
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement (the "Agreement") is made and entered
into as of the 1st day of August, 1996, by and between Sierra Tahoe Bancorp, a
California corporation (the "Bancorp"), and Claire H. Young ("Optionee");
WHEREAS, pursuant to the Sierra Tahoe Bancorp 1996 Stock Option Plan (the
"Plan"), a copy of which is attached hereto, the Stock Option Committee has
authorized granting to Optionee an incentive stock option to purchase all or any
part of ten thousand (10,000) authorized but unissued shares of the Bancorp's
common stock for cash at the price of thirteen dollars and thirteen cents
($13.13) per share, such option to be for the term and upon the terms and
conditions hereinafter stated;
NOW, THEREFORE, it is hereby agreed:
1. Grant of Option. Pursuant to said action of the Stock Option Committee, the
Bancorp hereby grants to Optionee the option to purchase, upon and subject to
the terms and conditions of the Plan which is incorporated in full herein by
this reference, all or any part of ten thousand (10,000) shares of the Bancorp's
common stock (hereinafter called "stock") at the price of thirteen dollars and
thirteen cents ($13.13) per share, which price is not less than one hundred
percent (100%) of the fair market value of the stock (or not less than 110% of
the fair market value of the stock for Optionee-shareholders who own securities
possessing more than ten percent (10%) of the total combined voting power of all
classes of securities of the Bancorp) as of the date of action of the Stock
Option Committee granting this option.
2. Exercisability. This Option shall be exercisable as to two thousand (2,000)
shares on or after 12 months, an additional two thousand (2,000) shares on or
after 24 months, an additional two thousand (2,000) shares on or after 36
months, an additional two thousand (2,000) shares on or after 48 months, and an
additional two thousand (2,000) shares at 60 months. This option shall remain
exercisable as to all of such shares until August 1, 2006 [but not later than
ten (10) years from the date this option is granted] unless this option has
expired or terminated earlier in accordance with the provisions hereof. Shares
as to which this option becomes exercisable pursuant to the foregoing provision
may be purchased at any time prior to expiration of this option.
3. Exercise of Option. This option may be exercised by written notice
delivered to the Bancorp stating the number of shares with respect to which this
option is being exercised, together with cash or shares of the Bancorp's stock,
as applIcable, in the amount of the purchase price of such shares. Not less than
ten (10) shares may be purchased at any one time unless the number purchased is
the total number which may be purchased under this option and in no event may
the option be exercised with respect to fractional shares. Upon exercise,
Optionee shall make appropriate arrangements and shall be responsible for the
withholding of any federal and state taxes then due.
4. Cessation of Employment. Except as provided in Paragraphs 2 and 5 hereof,
if Optionee shall cease to be an employee of the Bancorp or a subsidiary
corporation for any reason other than Optionee's death or disability, [as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
from time to time (the "Code")], this option shall expire three (3) months
thereafter. During the three (3) month period this option shall be exercisable
only as to those installments, if any, which had accrued as of the date when
Optionee ceased to be an employee of the Bancorp or the subsidiary corporation.
5. Termination of Employment for Cause. If Optionee's employment with the
Bancorp or a subsidiary corporation is terminated for cause, this option shall
expire thirty (30) days from the date of such termination. Termination for cause
shall include, but not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of a crime involving
moral turpitude, and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.
6. Nontransferability; Death or Disability of Optionee. This option shall not
be transferable except by will or by the laws of descent and distribution and
shall be exercisable during Optionee's lifetime only by Optionee. If Optionee
dies while an employee of the Bancorp or a subsidiary corporation, or during the
three (3) month period referred to in Paragraph 4 hereof, this option shall
expire one (1) year after the date of Optionee's death or on the day specified
in Paragraph 2 hereof, whichever is earlier. After Optionee's death but before
such expiration, the persons to whom Optionee's rights under this optioN shall
have passed by will or by the applicable laws of descent and distribution or the
executor or administrator of Optionee's estate shall have the right to exercise
this option as to those shares for which installments had accrued under
Paragraph 2 hereof as of the date on which Optionee ceased to be an employee of
the Bancorp or a subsidiary corporation.
If Optionee terminates his or her employment because of disability, (as
defined in Section 22(e)(3) of the Code), Optionee may exercise this option to
the extent he or she is entitled to do so at the date of termination, at any
time within one (1) year of the date of termination, or before the expiration
date specified in Paragraph 2 hereof, whichever is earlier.
7. Employment. This Agreement shall not obligate the Bancorp or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
8. Privileges of Stock Ownership. Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock certificates to Optionee. Except as provided in the
Plan, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
9. Modification and Termination. The rights of Optionee are subject to
modification and termination upon the occurrence of certain events as provided
in Sections 13 and 14 of the Plan.
10. Notification of Sale. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
11. Representations of Optionee. No shares issuable upon the exercise of this
option shall be issued and delivered unless and until the Bancorp has complied
with all applicable requirements of California and federal law and of the
Securities and Exchange Commission and the California Department of Corporations
pertaining to the issuance and sale of such shares, and all applicable listing
requirements of the securities exchanges, if any, on which shares of the Bancorp
of the same class are then listed. Optionee agrees to ascertain that such
requirements shall have been complied with at the time of any exercise of this
option. In addition, if the Optionee is an "affiliate" for purposes of the
Securities Act of 1933, there may be additional restrictions on the resale of
stock, and Optionee therefore agrees to ascertain what those restrictions are
and to abide by the restrictions and other applicable federal and state
securities laws.
Furthermore, the Bancorp may, if it deems appropriate, issue stop transfer
instructions against any shares of stock purchased upon the exercise of this
option and affix to any certificate representing such shares the legends which
the Bancorp deems appropriate.
Optionee represents that the Bancorp, its directors, officers, employees and
agents have not and will not provide tax advice with respect to the option, and
Optionee agrees to consult with his or her own tax advisor as to the specific
tax consequences of the option, including the application and effect of federal,
state, local and other tax laws.
12. Notices. Any notice to the Bancorp provided for in this Agreement shall be
addressed to it in care of its President or Chief Financial Officer at its main
office and any notice to Optionee shall be addressed to Optionee's address on
file with the Bancorp or a subsidiary corporation, or to such other address as
either may designate to the other in writing. Any notice shall be deemed to be
duly given if and when enclosed in a properly sealed envelope and addressed as
stated above and deposited, postage prepaid, with the United States Postal
Service. In lieu of giving notice by mail as aforesaid, any written notice under
this Agreement may be given to Optionee in person, and to the Bancorp by
personal delivery to its President or Chief Financial Officer.
13. Incentive Stock Option. This Agreement is intended to be an incentive
stock option agreement as defined in Section 422 of the Code.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
OPTIONEE SIERRA TAHOE BANCORP
By /s/ Claire H. Young By /s/ W. T. Fike
------------------- ---------------
Claire H. Young William T. Fike
By /s/ Robert C. Silver
--------------------
Robert C. Silver
<PAGE>
EXHIBIT 10.2
AMENDMENT NO. 1
to
EMPLOYMENT AGREEMENT
by and between
SIERRAWEST BANCORP, a California corporation and Executive
This Amendment No. 1 is made this 27th day of June, 1996 by and between
SierraWest Bancorp, a California corporation (formerly known as Sierra Tahoe
Bancorp, hereinafter "Bancorp") and William T. Fike ("Executive"), and
amends the Employment Agreement entered into between Bancorp and Executive
dated as of October 1, 1994 as follows:
1. Paragraph 2.5 is amended in its entirety by replacing all language
in the paragraph with the following:
"Memberships and Other Major Purchases. Bancorp shall purchase and
hold in Executive's name for his use during the term of this
Agreement, a full membership in Montreux Country Club located in the
State of Nevada. It is agreed and understood that Executive has
provided, and will continue to provide, all requested particulars to
the Board Compensation Committee, regarding this membership and any
other membership or other major purchases which the Board may consider
purchasing for the benefit of Executive. The Board will consider and
approve or disapprove such requests in the reasonable exercise of its
business judgment. Executive specifically agrees that in the event his
employment is terminated for any reason pursuant to which he is not
entitled, under the provisions of this Agreement, to retain ownership
of the Montreux Country Club membership, or any other membership which
may have been purchased in his name, he will promptly take all action
necessary to transfer ownership of the membership to Bancorp."
2. Paragraph 3.4 is amended in its entirety by replacing all language
in the paragraph with the following:
"Termination Without Cause or Upon Change of Control or at the
Expiration of the Term. Bancorp may terminate Fike's employment
without any breach of this Agreement at any time and upon written
notice Without Cause, which for purposes of this Agreement means for
any reasons other than for Cause, upon Death or for Complete
Disability. Bancorp may also terminate Fike's employment without any
breach of this Agreement upon a Change of Control as defined herein.
In the event of Termination Without Cause or Termination upon a Change
of Control, or in the event that this Agreement expires at the end of
its term and the parties fail to extend, renew or replace it with
another employment agreement ("Termination at the Expiration of the
Term), Bancorp shall pay to Fike the following, in liquidation of all
its obligations under this Agreement: (i) his salary through the date
of termination at the rate in effect at that time; (ii) his accrued
but unpaid vacation and personal days through the date of termination;
(iii) an amount equal to any bonus he would have been awarded, paid on
a prorata basis, after the end of Bancorp's year and in conjunction
with other executive bonus payments; (iv) reimbursement for approved
unreimbursed expenses incurred pursuant to Section 2.4 herein; (v)
transfer to or retention of (as applicable) his ownership, without
penalty, of the automobile and club membership provided pursuant to
2.3(c) and 2.5 respectively of this Agreement; and (vi) an amount in
the nature of severance pay equal to 18 months' base salary, payable
in a lump sum as soon after the date of termination as is practicable.
Bancorp shall have no further obligation or liability to Fike, except
with respect to benefits already vested pursuant to the terms of the
respective benefit plans."
For the purposes hereof, "Change of Control" is defined as any one of
the following, provided however that Change of Control shall be
without the monetary assistance of the FDIC: (i) an acquisition (other
than directly from Bancorp) by an individual, entity or group
(excluding Bancorp or one of its employee benefit plans or an entity
controlled by Bancorp's shareholders) of 20% or more of Bancorp's
common stock or voting securities; (ii) a change in a majority of the
current Board of Directors (excluding any persons approved by a vote
of at least a majority of the Board other than in connection with an
actual or threatened proxy contest); (iii) liquidation or dissolution
of Bancorp or a merger, consolidation or sale of all or substantially
of the Bancorp's assets ("Business Combination") other than one in
which all or substantially all of Bancorp's shareholders receive 50%
or more of the stock of the company resulting from the Business
Combination, at least a majority of the board of directors of the
resulting corporation were members of the incumbent board, and after
which no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the Business
Combination.
3. Paragraph 3.6, subparagraph (iv) is hereby amended in its entirety
to read as follows:
"(iv) within the period up to 365 days following a Change of Control,
Fike concludes in good faith and so notifies Bancorp or its successor
on sixty (60) days' written notice that, because of changes following
the Change of Control, he can no longer properly or effectively
discharge his duties and responsibilities, whether as President and
CEO or otherwise as assigned and mutually agreed at that time.
If Fike terminates his employment for Good Reason, he shall be
entitled to those benefits he would have received in the event of
Termination Upon Change of Control."
4. Except as amended or modified herein, all other provisions of the
Employment Agreement between Bancorp and Executive remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective
as of 27th day of June, 1996.
SIERRAWEST BANCORP, a California banking corporation
By: /s/ Jerrold T. Henley Date: September 26, 1996
---------------------
Jerrold T. Henley
Chairman of the Board
/s/ W. T. Fike Date: September 26, 1996
--------------
William T. Fike
<PAGE>
EXHIBIT 10.3
AMENDMENT NO. 1
TO
EXECUTIVE SALARY CONTINUATION AGREEMENT
by and between
SIERRAWEST BANCORP, a California corporation (formerly known as Sierra
Tahoe Bancorp, hereinafter "Bancorp") and William T. Fike ("Executive").
This Amendment No. 1 is made this 27th day of June, 1996 by and between
Bancorp and Executive, and amends the Executive Salary Continuation
Agreement between the parties dated as of May 1, 1991 as follows:
1. Paragraph 2 is hereby amended by adding the following language at the
end of the first paragraph thereof: ", pursuant to the terms set
forth in 6 below."
2. Paragraph 2 is hereby further amended by substituting the following
language in its entirety for paragraph three of Paragraph 2:
"In lieu of receiving a lump sum payment of the Service Benefit, Executive
may elect, provided that he has served at least five (5) years and provided
further that such election is made at least two (2) years prior to
Employment Termination, to receive the benefit in installment payments
rather than a lump sum. Monthly installments shall begin ninety (90) days
after Employment Termination. If Executive shall have reached the age of 65
before retirement, such installments shall equal $50,000 annually, payable
in two hundred and forty (240) installments. If Executive shall retire or
his employment shall otherwise terminate prior to that time, such
installments shall equal that pro-rata share of $50,000 per annum as the
vested accumulated benefit bears to the total accumulated benefit described
in Schedule A as "TOTAL NEEDED." The appropriate monthly benefit is shown in
Schedule B. There is no installment option if Executive's employment is
terminated prior to five (5) years of continuous employment. Should
Executive pass away during any installment payout period, appropriate
installments will be paid to those persons designated by Executive to
receive such benefit or as otherwise directed by the qualified
representative of Executive's estate."
3. Paragraph 4 is hereby amended by adding the following language at
the end of the second sentence thereof: ", pursuant to the terms set
forth in 6 below."
4. Paragraph 10 is hereby amended by deleting the language in its
entirety and replacing it as follows:
"Except as hereafter set forth, Bancorp reserves the right to cancel
the Salary Continuation Program and/or to terminate this Agreement
("Termination/Cancellation") as to any unvested benefits under the Program
for any reason in its sole and absolute discretion; provided however, that
Executive shall be entitled to the accrued and vested amount set forth on
Schedule A attached hereto as determined by the date the
Termination/Cancellation occurs. Termination shall be effective on fifteen
(15) days prior written notice to Executive.
The foregoing notwithstanding, in the event of a Change of Control
(defined below), Executive shall be deemed to be fully vested in the Full
Accumulation Value as set forth in Schedule A as if Executive had served
through all years set forth on Schedule A. The Full Accumulation Value of
$50,000 per year for twenty (20) years shall be paid in two hundred and
forty (240) equal monthly installments beginning on the date which Executive
would otherwise have been entitled to be paid such sums under the provisions
of 2. In the event that Executive's employment is not terminated coincident
with a Change of Control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the provisions of 2,
interest shall be deemed to accrue on the Full Accumulation Value at the
prime rate minus one percent from the date the benefit vests until it is
paid, including accrued interest thereon. In addition, in the event that
Executive's employment is terminated in connection with, in anticipation of,
or following a Change of Control, Executive shall be excused from and shall
not be obligated to act as a consultant or otherwise be restricted in his
activities as provided in 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as any one
of the following, provided however that Change of Control shall be without
the monetary assistance of the FDIC: (i) an acquisition (other than directly
from Bancorp) by an individual, entity or group (excluding Bancorp or one of
its employee benefit plans or an entity controlled by Bancorp's
shareholders) of 20% or more of Bancorp's common stock or voting securities;
(ii) a change in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board other than in
connection with an actual or threatened proxy contest); (iii) liquidation or
dissolution of Bancorp or a merger, consolidation or sale of all or
substantially of the Bancorp's assets ("Business Combination") other than
one in which all or substantially all of Bancorp's shareholders receive 50%
or more of the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting corporation
were members of the incumbent board, and after which no person owns 20% or
more of the stock of the resulting corporation who did not own such stock
immediately before the Business Combination."
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections (i) and
(iii) above shall mean on or after the date of an executed Letter of Intent
or, if there is no written Letter of Intent, on or after the date of the
first act of due diligence inspection by a potential acquirer, provided that
the transaction contemplated by the Letter of Intent or due diligence
inspection in fact concludes no later than eighteen (18) months after that
date. Moreover, "following a Change of Control" shall mean termination by or
within 365 days of the conclusion of a Change of Control."
5. Paragraph 15 is hereby amended by adding the following language at
the end of the sentence as currently written:
". . . to obtain said policy(cies). Moreover, should Bancorp
elect to purchase a life insurance policy or annuity policy as
provided above, Executive agrees to make appropriate arrangements
so that Bancorp, as sole beneficiary of said policy, will be
notified timely by Executive's estate upon his death. Upon such
notification, which shall include receipt of a certified copy of
death certificate, Bancorp shall pay the sum of $5,000
("Notification Fee") to Executive's estate or designated
beneficiary."
6. Except as specifically modified herein, all other provisions of the
Salary Continuation Agreement entered into between the parties remains in
full force and effect.
Agreed to this 26th day of September, 1996,
/s/ W. T. Fike
--------------
EXECUTIVE
SIERRAWEST BANCORP,
a California banking corporation
By:/s/ Jerrold T. Henley
---------------------
Jerrold T. Henley
Its: Chairman of the Board
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
William T Fike
Date of Retirement..........08.04.2012
Plan Commencement...........05.01.1991
Retirement Benefit..........$50,000 per year for 20 years
Discount Rate...............10 percent
Years to Accrue.............21 yers 3 months
SCHEDULE A SCHEDULE B
Cash benefit Annual
Accumulated Benefit
ACCRUAL PER YEAR
<S> <C> <C> <C>
1991............................ 4,060 4,060 N/A
1992............................ 6,619 10,679 N/A
1993............................ 7,312 17,991 N/A
1994............................ 8,078 26,069 N/A
1995............................ 8,924 34,993 N/A
1996............................ 9,858 44,851 5,194
1997............................10,890 55,741 6,455
1998............................12,031 67,772 7,848
1999............................13,290 81,062 9,387
2000............................14,682 95,744 11,087
2001............................16,219 111,963 12,966
2002............................17,918 129,881 15,041
2003............................19,794 149,675 17,333
2004............................21,867 171,542 19,865
2005............................24,157 195,699 22,663
2006............................26,686 222,385 25,753
2007............................29,480 251,865 29,167
2008............................32,567 284,432 32,938
2009............................35,978 320,410 37,104
2010............................39,745 360,155 41,707
2011............................43,907 404,062 46,792
2012............................27,706 431,768 50,000
----------
TOTAL NEEDED $431,768
==========
</TABLE>
<PAGE>
EXHIBIT 10.4
AMENDMENT NO. 1
TO
EXECUTIVE SALARY CONTINUATION AGREEMENT
by and between
SIERRAWEST BANCORP, a California corporation (formerly known as Sierra
Tahoe Bancorp, hereinafter "Bancorp") and David C. Broadley
("Executive").
This Amendment No. 1 is made this 27th day of June, 1996 by and between
Bancorp and Executive, and amends the Executive Salary Continuation
Agreement between the parties dated as of December 26th, 1986 as follows:
1. Paragraph 2 is hereby amended by adding the following language at the
end of the first paragraph thereof: ", pursuant to the terms set
forth in 6 below."
2. Paragraph 2 is hereby further amended by substituting the following
language in its entirety for paragraph three of Paragraph 2:
"In lieu of receiving a lump sum payment of the Service Benefit, Executive
may elect, provided that he has served at least five (5) years and provided
further that such election is made at least two (2) years prior to
Employment Termination, to receive the benefit in installment payments
rather than a lump sum. Monthly installments shall begin ninety (90) days
after Employment Termination. If Executive shall have reached the age of 65
before retirement, such installments shall equal $40,000 annually, payable
in two hundred and forty (240) installments. If Executive shall retire or
his employment shall otherwise terminate prior to that time, such
installments shall equal that pro-rata share of $40,000 per annum as the
vested accumulated benefit bears to the total accumulated benefit described
in Schedule A as "TOTAL NEEDED." The appropriate monthly benefit is shown in
Schedule B. There is no installment option if Executive's employment is
terminated prior to five (5) years of continuous employment. Should
Executive pass away during any installment payout period, appropriate
installments will be paid to those persons designated by Executive to
receive such benefit or as otherwise directed by the qualified
representative of Executive's estate."
3. Paragraph 4 is hereby amended by adding the following language at the
end of the second sentence thereof: ", pursuant to the terms set
forth in 6 below."
4. Paragraph 10 is hereby amended by deleting the language in its
entirety and replacing it as follows:
"Except as hereafter set forth, Bancorp reserves the right to cancel the
Salary Continuation Program and/or to terminate this Agreement
("Termination/Cancellation") as to any unvested benefits under the Program
for any reason in its sole and absolute discretion; provided however, that
Executive shall be entitled to the accrued and vested amount set forth on
Schedule A attached hereto as determined by the date the
Termination/Cancellation occurs. Termination shall be effective on fifteen
(15) days prior written notice to Executive.
The foregoing notwithstanding, in the event of a Change of Control
(defined below), Executive shall be deemed to be fully vested in the Full
Accumulation Value as set forth in Schedule A as if Executive had served
through all years set forth on Schedule A. The Full Accumulation Value of
$40,000 per year for twenty (20) years shall be paid in two hundred and
forty (240) equal monthly installments beginning on the date which Executive
would otherwise have been entitled to be paid such sums under the provisions
of 2. In the event that Executive's employment is not terminated coincident
with a Change of Control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the provisions of 2,
interest shall be deemed to accrue on the Full Accumulation Value at the
prime rate minus one percent from the date the benefit vests until it is
paid, including accrued interest thereon. In addition, in the event that
Executive's employment is terminated in connection with, in anticipation of,
or following a Change of Control, Executive shall be excused from and shall
not be obligated to act as a consultant or otherwise be restricted in his
activities as provided in 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as any one
of the following, provided however that Change of Control shall be without
the monetary assistance of the FDIC: (i) an acquisition (other than directly
from Bancorp) by an individual, entity or group (excluding Bancorp or one of
its employee benefit plans or an entity controlled by Bancorp's
shareholders) of 20% or more of Bancorp's common stock or voting securities;
(ii) a change in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board other than in
connection with an actual or threatened proxy contest); (iii) liquidation or
dissolution of Bancorp or a merger, consolidation or sale of all or
substantially of the Bancorp's assets ("Business Combination") other than
one in which all or substantially all of Bancorp's shareholders receive 50%
or more of the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting corporation
were members of the incumbent board, and after which no person owns 20% or
more of the stock of the resulting corporation who did not own such stock
immediately before the Business Combination."
For purposes of this Agreement, "in connection with" or "in anticipation
of" a Change of Control with respect to subsections (i) and (iii) above
shall mean on or after the date of an executed Letter of Intent or, if there
is no written Letter of Intent, on or after the date of the first act of due
diligence inspection by a potential acquirer, provided that the transaction
contemplated by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date. Moreover,
"following a Change of Control" shall mean termination by or within 365 days
of the conclusion of a Change of Control."
5. Paragraph 15 is hereby amended by adding the following language at
the end of the sentence as currently written:
". . . to obtain said policy(cies). Moreover, should Bancorp
elect to purchase a life insurance policy or annuity policy as
provided above, Executive agrees to make appropriate arrangements
so that Bancorp, as sole beneficiary of said policy, will be
notified timely by Executive's estate upon his death. Upon such
notification, which shall include receipt of a certified copy of
death certificate, Bancorp shall pay the sum of $5,000
("Notification Fee") to Executive's estate or designated
beneficiary."
6. Except as specifically modified herein, all other provisions of the
Salary Continuation Agreement entered into between the parties remains
in full force and effect.
Agreed to this 27th day of September, 1996,
/s/ David C. Broadley
---------------------
EXECUTIVE
SIERRAWEST BANCORP,
a California banking corporation
By:/s/ W. T. Fike
---------------
William T. Fike
Its: President and Chief Executive Officer
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
David Broadley
Date of Retirement.......07.19.2008
Plan Commencement........01.01.1986
Retirement Benefit.......$40,000 per year for 20 years
Discount Rate............10 percent
Years to Accrue..........22 years 6 months
SCHEDULE A SCHEDULE B
Cash benefit Annual
ACCRUAL PER YEAR Accumulated Benefit
<S> <C> <C> <C>
1986.................... 4,306 4,306 N/A
1987.................... 4,757 9,063 N/A
1988.................... 5,255 14,318 N/A
1989.................... 5,805 20,123 N/A
1990.................... 6,413 26,536 3,073
1991.................... 7,085 33,621 3,893
1992.................... 7,827 41,448 4,800
1993.................... 8,646 50,094 5,801
1994.................... 9,552 59,646 6,907
1995....................10,552 70,198 8,129
1996....................11,657 81,855 9,479
1997 ...................12,877 94,732 10,970
1998....................14,226 108,958 12,618
1999....................15,715 124,673 14,437
2000....................17,361 142,034 16,448
2001....................19,179 161,213 18,669
2002....................21,187 182,400 21,122
2003....................23,406 205,806 23,833
2004....................25,857 231,663 26,827
2005....................28,564 260,227 30,135
2006....................31,555 291,782 33,789
2007....................34,860 326,642 37,826
2008....................18,776 345,418 40,000
----------
TOTAL NEEDED 345,418
==========
</TABLE>
NPV $40K/Yr.for 20 Yrs. at 10% Disc.
<PAGE>
EXHIBIT 10.5
AMENDMENT NO. 1
TO
EXECUTIVE SALARY CONTINUATION AGREEMENT
by and between
SIERRAWEST BANCORP, a California corporation (formerly known as Sierra
Tahoe Bancorp, hereinafter "Bancorp") and Martin R. Sorensen
("Executive").
This Amendment No. 1 is made this 27th day of June, 1996 by and between
Bancorp and Executive, and amends the Executive Salary Continuation
Agreement between the parties dated as of March 31, 1995 as follows:
1. Paragraph 2 is hereby amended by adding the following language at the
end of the first paragraph thereof: ", pursuant to the terms set
forth in 6 below."
2. Paragraph 2 is hereby further amended by substituting the following
language in its entirety for paragraph three of Paragraph 2:
"In lieu of receiving a lump sum payment of the Service Benefit, Executive
may elect, provided that he has served at least five (5) years and provided
further that such election is made at least two (2) years prior to
Employment Termination, to receive the benefit in installment payments
rather than a lump sum. Monthly installments shall begin ninety (90) days
after Employment Termination. If Executive shall have reached the age of 65
before retirement, such installments shall equal $50,000 annually, payable
in two hundred and forty (240) installments. If Executive shall retire or
his employment shall otherwise terminate prior to that time, such
installments shall equal that pro-rata share of $50,000 per annum as the
vested accumulated benefit bears to the total accumulated benefit described
in Schedule A as "TOTAL NEEDED." The appropriate monthly benefit is shown in
Schedule B. There is no installment option if Executive's employment is
terminated prior to five (5) years of continuous employment. Should
Executive pass away during any installment payout period, appropriate
installments will be paid to those persons designated by Executive to
receive such benefit or as otherwise directed by the qualified
representative of Executive's estate."
3. Paragraph 4 is hereby amended by adding the following language at
the end of the second sentence thereof: ", pursuant to the terms set
forth in 6 below."
4. Paragraph 10 is hereby amended by deleting the language in its
entirety and replacing it as follows:
"Except as hereafter set forth, Bancorp reserves the right to cancel
the Salary Continuation Program and/or to terminate this Agreement
("Termination/Cancellation") as to any unvested benefits under the Program
for any reason in its sole and absolute discretion; provided however, that
Executive shall be entitled to the accrued and vested amount set forth on
Schedule A attached hereto as determined by the date the
Termination/Cancellation occurs. Termination shall be effective on fifteen
(15) days prior written notice to Executive.
The foregoing notwithstanding, in the event of a Change of Control
(defined below), Executive shall be deemed to be fully vested in the Full
Accumulation Value as set forth in Schedule A as if Executive had served
through all years set forth on Schedule A. The Full Accumulation Value of
$50,000 per year for twenty (20) years shall be paid in two hundred and
forty (240) equal monthly installments beginning on the date which Executive
would otherwise have been entitled to be paid such sums under the provisions
of 2. In the event that Executive's employment is not terminated coincident
with a Change of Control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the provisions of 2,
interest shall be deemed to accrue on the Full Accumulation Value at the
prime rate minus one percent from the date the benefit vests until it is
paid, including accrued interest thereon. In addition, in the event that
Executive's employment is terminated in connection with, in anticipation of,
or following a Change of Control, Executive shall be excused from and shall
not be obligated to act as a consultant or otherwise be restricted in his
activities as provided in 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as any one
of the following, provided however that Change of Control shall be without
the monetary assistance of the FDIC: (i) an acquisition (other than directly
from Bancorp) by an individual, entity or group (excluding Bancorp or one of
its employee benefit plans or an entity controlled by Bancorp's
shareholders) of 20% or more of Bancorp's common stock or voting securities;
(ii) a change in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board other than in
connection with an actual or threatened proxy contest); (iii) liquidation or
dissolution of Bancorp or a merger, consolidation or sale of all or
substantially of the Bancorp's assets ("Business Combination") other than
one in which all or substantially all of Bancorp's shareholders receive 50%
or more of the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting corporation
were members of the incumbent board, and after which no person owns 20% or
more of the stock of the resulting corporation who did not own such stock
immediately before the Business Combination."
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections (i) and
(iii) above shall mean on or after the date of an executed Letter of Intent
or, if there is no written Letter of Intent, on or after the date of the
first act of due diligence inspection by a potential acquirer, provided that
the transaction contemplated by the Letter of Intent or due diligence
inspection in fact concludes no later than eighteen (18) months after that
date. Moreover, "following a Change of Control" shall mean termination by or
within 365 days of the conclusion of a Change of Control."
5. Paragraph 15 is hereby amended by adding the following language at
the end of the sentence as currently written:
". . . to obtain said policy(cies). Moreover, should Bancorp
elect to purchase a life insurance policy or annuity policy as
provided above, Executive agrees to make appropriate arrangements
so that Bancorp, as sole beneficiary of said policy, will be
notified timely by Executive's estate upon his death. Upon such
notification, which shall include receipt of a certified copy of
death certificate, Bancorp shall pay the sum of $5,000
("Notification Fee") to Executive's estate or designated
beneficiary."
6. Except as specifically modified herein, all other provisions of the
Salary Continuation Agreement entered into between the parties remains
in full force and effect.
Agreed to this 2nd day of October, 1996,
/s/ Martin Sorensen
-------------------
EXECUTIVE
SIERRAWEST BANCORP,
a California banking corporation
By:/s/ W. T. Fike
---------------
William T. Fike
Its: President and Chief Executive Officer
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Marty Sorensen
Date of Retirement...........02.23.2009
Plan Commencement............05.01.1994
Retirement Benefit...........$50,000 per year for 20 years
Discount Rate................10 percent
Years to Accrue..............14 years 10 months
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year
<S> <C> <C> <C>
1994....................... 8,767 8,767 N/A
1995.......................14,292 23,059 N/A
1996.......................15,789 38,848 N/A
1997.......................17,442 56,289 N/A
1998.......................19,268 75,558 N/A
1999.......................21,286 96,843 11,215
2000.......................23,515 120,358 13,938
2001.......................25,977 146,335 16,946
2002.......................28,697 175,032 20,269
2003.......................31,702 206,734 23,940
2004.......................35,022 241,756 27,996
2005.......................38,689 280,445 32,476
2006.......................42,740 323,185 37,426
2007.......................47,216 370,400 42,893
2008.......................52,160 422,560 48,934
2009....................... 9,210 431,770 50,000
----------
TOTAL NEEDED 431,769
==========
</TABLE>
<PAGE>
EXHIBIT 10.6
DIRECTOR'S AMENDED AND RESTATED
PAYMENT CONTINUATION AGREEMENT
This Amended and Restated Agreement is between and among SierraWest
Bancorp (formerly known as Sierra Tahoe Bancorp, hereinafter "Bancorp"), a
California corporation and William W. McClintock ("Director"), shall be
effective as of June 27, 1996, and is intended to and shall replace all
prior agreements between the parties relating to the subject matter hereof,
except as specifically otherwise provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
WHEREAS, the parties desire to replace their existing agreement dated
May 1, 1988 with this Agreement in its entirety
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
May 1, 1988 ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 2nd day of October, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ William W. McClintock By:/s/ W. T. Fike
------------------------- ---------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
William McClintock - Director benefit
Date of Retirement................05.01.2003
Plan Commencement.................05.01.1988
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1988....................... 616 616 N/A
1989....................... 1,005 1,621 N/A
1990....................... 1,110 2,731 N/A
1991....................... 1,226 3,957 N/A
1992....................... 1,355 5,312 N/A
1993....................... 1,497 6,809 878
1994....................... 1,653 8,462 1,091
1995....................... 1,827 10,289 1,327
1996....................... 2,018 12,307 1,587
1997....................... 2,229 14,536 1,875
1998....................... 2,463 16,999 2,192
1999....................... 2,720 19,719 2,543
2000....................... 3,005 22,724 2,930
2001....................... 3,320 26,044 3,359
2002....................... 3,668 29,712 3,832
2003....................... 1,306 31,018 4,000
---------
TOTAL NEEDED $ 31,018
NPV $4K/Yr.
</TABLE>
<PAGE>
EXHIBIT 10.7
DIRECTOR'S AMENDED AND RESTATED
PAYMENT CONTINUATION AGREEMENT
This Amended and Restated Agreement is between and among SierraWest
Bancorp (formerly known as Sierra Tahoe Bancorp, hereinafter "Bancorp"), a
California corporation and Jerrold T. Henley ("Director"), shall be
effective as of June 27, 1996, and is intended to and shall replace all
prior agreements between the parties relating to the subject matter hereof,
except as specifically otherwise provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and
advice to be valuable to it by virtue of Director's past experience as a
director of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
WHEREAS, the parties desire to replace their existing agreement dated
January 1, 1986 with this Agreement in its entirety
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
January 1, 1986 ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed
as giving Director or his beneficiary any greater rights of
those of any other unsecured creditor of Bancorp.
10. Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp
which shall succeed to substantially all the stock of its assets
in business.
11. Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's
signature thereon if in the opinion of counsel, such is required.
12. Suicide Exclusion. In the event that it is demonstrated to
Bancorp's reasonable certainty that, within two (2) years of
the Commencement Date, Director has taken his own life, any
and all amounts unpaid under this Agreement shall be deemed
to have lapsed and shall be terminated prior to any vesting.
In such event, Bancorp shall have no liability to Director
or any persons which otherwise would be entitled to benefits
under this Agreement.
13. Miscellaneous. The provisions of this agreement shall be
severable from each other. In the event that a court should
declare any provision unenforceable, the remaining
provisions of the agreement shall continue to be binding and
enforceable. This agreement shall be construed under the
laws of the State of California. Venue shall be appropriate
wherever allowed by law and in the County of Nevada (Truckee
Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This
Agreement may be executed in counterparts.
14. Attorneys Fees. In the event either party employs an
attorney to enforce any of the provisions hereof, or for the
purpose of declaring the effect of a provisions which
interpretation it contests, the prevailing party shall be
entitled to reasonable attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ Jerrold T. Henley By:/s/ W. T. Fike
--------------------- ---------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Jerrold T. Henley - Director benefit
Date of Retirement................05.01.2003
Plan Commencement.................05.01.1988
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumukated benefit
<S> <C> <C> <C>
1988....................... 616 616 N/A
1989....................... 1,005 1,621 N/A
1990....................... 1,110 2,731 N/A
1991....................... 1,226 3,957 N/A
1992....................... 1,355 5,312 N/A
1993....................... 1,497 6,809 878
1994....................... 1,653 8,462 1,091
1995....................... 1,827 10,289 1,327
1996....................... 2,018 12,307 1,587
1997....................... 2,229 14,536 1,875
1998....................... 2,463 16,999 2,192
1999....................... 2,720 19,719 2,543
2000....................... 3,005 22,724 2,930
2001....................... 3,320 26,044 3,359
2002....................... 3,668 29,712 3,832
2003....................... 1,306 31,018 4,000
---------
TOTAL NEEDED $ 31,018
NPV $4K/Yr.
=========
</TABLE>
<PAGE>
EXHIBIT 10.8
DIRECTOR'S AMENDED AND RESTATED
PAYMENT CONTINUATION AGREEMENT
This Amended and Restated Agreement is between and among SierraWest Bancorp
(formerly known as Sierra Tahoe Bancorp, hereinafter "Bancorp"), a
California corporation and A. Morgan Jones ("Director"), shall be effective
as of June 27, 1996, and is intended to and shall replace all prior
agreements between the parties relating to the subject matter hereof, except
as specifically otherwise provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
WHEREAS, the parties desire to replace their existing agreement dated
May 1, 1988 with this Agreement in its entirety
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
May 1, 1988 ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees.
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ A. Morgan Jones By:/s/ W.T. Fike
------------------- --------------
Director President
By:/s/ Thomas M. Watson
--------------------
Assistant Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Morgan Jones - Director benefit
Date of Retirement................05.01.2003
Plan Commencement.................05.01.1988
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumukated benefit
<S> <C> <C> <C>
1988....................... 616 616 N/A
1989....................... 1,005 1,621 N/A
1990....................... 1,110 2,731 N/A
1991....................... 1,226 3,957 N/A
1992....................... 1,355 5,312 N/A
1993....................... 1,497 6,809 878
1994....................... 1,653 8,462 1,091
1995....................... 1,827 10,289 1,327
1996....................... 2,018 12,307 1,587
1997....................... 2,229 14,536 1,875
1998....................... 2,463 16,999 2,192
1999....................... 2,720 19,719 2,543
2000....................... 3,005 22,724 2,930
2001....................... 3,320 26,044 3,359
2002....................... 3,668 29,712 3,832
2003....................... 1,306 31,018 4,000
--------
TOTAL NEEDED $ 31,018
NPV $4K/Yr.
=========
</TABLE>
<PAGE>
EXHIBIT 10.9
DIRECTOR'S AMENDED AND RESTATED
PAYMENT CONTINUATION AGREEMENT
This Amended and Restated Agreement is between and among SierraWest
Bancorp (formerly known as Sierra Tahoe Bancorp, hereinafter "Bancorp"), a
California corporation and Jack V. Leonesio ("Director"), shall be effective
as of June 27, 1996, and is intended to and shall replace all prior
agreements between the parties relating to the subject matter hereof, except
as specifically otherwise provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
WHEREAS, the parties desire to replace their existing agreement dated
May 1, 1988 with this Agreement in its entirety
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
May 1, 1988 ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ Jack V. Leonesio By:/s/ W. T. Fike
-------------------- ---------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Jack Leonesio- Director benefit
Date of Retirement................05.01.2003
Plan Commencement.................05.01.1988
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1988....................... 616 616 N/A
1989....................... 1,005 1,621 N/A
1990....................... 1,110 2,731 N/A
1991....................... 1,226 3,957 N/A
1992....................... 1,355 5,312 N/A
1993....................... 1,497 6,809 878
1994....................... 1,653 8,462 1,091
1995....................... 1,827 10,289 1,327
1996....................... 2,018 12,307 1,587
1997....................... 2,229 14,536 1,875
1998....................... 2,463 16,999 2,192
1999....................... 2,720 19,719 2,543
2000....................... 3,005 22,724 2,930
2001....................... 3,320 26,044 3,359
2002....................... 3,668 29,712 3,832
2003....................... 1,306 31,018 4,000
---------
TOTAL NEEDED $ 31,018
NPV $4K/Yr.
=========
</TABLE>
<PAGE>
EXHIBIT 10.10
DIRECTOR'S AMENDED AND RESTATED
PAYMENT CONTINUATION AGREEMENT
This Amended and Restated Agreement is between and among SierraWest
Bancorp (formerly known as Sierra Tahoe Bancorp, hereinafter "Bancorp"), a
California corporation and Thomas M. Watson ("Director"), shall be effective
as of June 27, 1996, and is intended to and shall replace all prior
agreements between the parties relating to the subject matter hereof, except
as specifically otherwise provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
WHEREAS, the parties desire to replace their existing agreement dated
May 1, 1988 with this Agreement in its entirety
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
May 1, 1988 ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ Thomas Watson By:/s/ W.T. Fike
----------------- -------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Thomas Watson - Director benefit
Date of Retirement................05.01.2003
Plan Commencement.................05.01.1988
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1988....................... 616 616 N/A
1989....................... 1,005 1,621 N/A
1990....................... 1,110 2,731 N/A
1991....................... 1,226 3,957 N/A
1992....................... 1,355 5,312 N/A
1993....................... 1,497 6,809 878
1994....................... 1,653 8,462 1,091
1995....................... 1,827 10,289 1,327
1996....................... 2,018 12,307 1,587
1997....................... 2,229 14,536 1,875
1998....................... 2,463 16,999 2,192
1999....................... 2,720 19,719 2,543
2000....................... 3,005 22,724 2,930
2001....................... 3,320 26,044 3,359
2002....................... 3,668 29,712 3,832
2003....................... 1,306 31,018 4,000
--------
TOTAL NEEDED $ 31,018
NPV $4K/Yr.
========
</TABLE>
<PAGE>
EXHIBIT 10.11
DIRECTOR'S AMENDED AND RESTATED
PAYMENT CONTINUATION AGREEMENT
This Amended and Restated Agreement is between and among SierraWest Bancorp
(formerly known as Sierra Tahoe Bancorp, hereinafter "Bancorp"), a
California corporation and David W. Clark ("Director"), shall be effective
as of June 27, 1996, and is intended to and shall replace all prior
agreements between the parties relating to the subject matter hereof, except
as specifically otherwise provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
WHEREAS, the parties desire to replace their existing agreement dated
October 29, 1990 with this Agreement in its entirety
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
October 29, 1990 ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ David W. Clark By:/s/ W. T. Fike
------------------ ---------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Dave Clark - Director benefit
Date of Retirement................05.01.2003
Plan Commencement.................05.01.1988
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1988....................... 616 616 N/A
1989....................... 1,005 1,621 N/A
1990....................... 1,110 2,731 N/A
1991....................... 1,226 3,957 N/A
1992....................... 1,355 5,312 N/A
1993....................... 1,497 6,809 878
1994....................... 1,653 8,462 1,091
1995....................... 1,827 10,289 1,327
1996....................... 2,018 12,307 1,587
1997....................... 2,229 14,536 1,875
1998....................... 2,463 16,999 2,192
1999....................... 2,720 19,719 2,543
2000....................... 3,005 22,724 2,930
2001....................... 3,320 26,044 3,359
2002....................... 3,668 29,712 3,832
2003....................... 1,306 31,018 4,000
---------
TOTAL NEEDED $ 31,018
NPV $4K/Yr.
=========
</TABLE>
<PAGE>
EXHIBIT 10.12
DIRECTOR'S
PAYMENT CONTINUATION AGREEMENT
This Agreement is by and between SierraWest Bancorp (formerly known as
Sierra Tahoe Bancorp, hereinafter "Bancorp"), a California corporation and
Richard S. Gaston ("Director"), shall be effective as of June 27, 1996, and
is intended to and shall replace all prior agreements between the parties
relating to the subject matter hereof, except as specifically otherwise
provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
December 20, 1995, ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves
the right to cancel the Payment Continuation Program
and/or to terminate this Agreement
("Termination/Cancellation") at any time and for any
reason as to any benefits not yet vested, in its sole
and absolute discretion; provided however that
Director shall be entitled to the vested amount set
forth on Schedule A attached hereto as determined by
the date the termination /cancellation occurs. In the
event of Termination/Cancellation, the vested amounts
will be paid in one lump sum at the time of Director's
termination from office as Director. Bancorp will
give fifteen (15) days prior written notice of
Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a
Change of Control (defined below), Director shall be
deemed to be fully vested in the Full Accumulation
Value as set forth in Schedule A as if Director had
served through all years as specified on Schedule A.
The Full Accumulation Value shall be paid in one lump
sum in the amount and when Director would otherwise
have been entitled to be paid under the provisions of
Paragraph 1. In the event that Director's service is
not terminated coincident with a change of control so
that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue
on the Full Accumulation Value at the prime rate minus
one percent from the date the benefit vests until it
is paid. In addition, in the event that Director's
termination occurs in connection with, in anticipation
of, or following a Change of Control, Director shall
be excused from and shall not be obligated to act as a
consultant or be restricted in his activities as
provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as any
one of the following, provided however that Change of Control shall
be without the monetary assistance of the FDIC: (i) an acquisition
(other than directly from Bancorp) by an individual, entity or group
(excluding Bancorp or one of its employee benefit plans or an entity
controlled by Bancorp's shareholders) of 20% or more of Bancorp's
common stock or voting securities; (ii) a change in a majority of
the current Board of Directors (excluding any persons approved by a
vote of at least a majority of the Board other than in connection
with an actual or threatened proxy contest); (iii) liquidation or
dissolution of Bancorp or a merger, consolidation or sale of all or
substantially of the Bancorp's assets ("Business Combination") other
than one in which all or substantially all of Bancorp's shareholders
receive 50% or more of the stock of the company resulting from the
Business Combination, at least a majority of the board of directors
of the resulting corporation were members of the incumbent board,
and after which no person owns 20% or more of the stock of the
resulting corporation who did not own such stock immediately before
the Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections (i)
and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on or
after the date of the first act of due diligence inspection by a
potential acquiror, provided that the transaction contemplated by
the Letter of Intent or due diligence inspection in fact concludes
no later than eighteen (18) months after that date. Moreover,
"following a Change of Control" shall mean Service Termination by or
within 365 days of the conclusion of a Change of Control as defined
above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash,
insurance, or otherwise the obligation undertaken by
this Agreement, or (ii) not fund the obligation in
advance. Should Bancorp elect to fund in advance the
benefits contemplated by this Agreement in whole or in
part through the median of life insurance or annuities
or both, then Bancorp shall be the owner and
beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole
discretion to terminate such life insurance or
annuities as well as any other funding program at any
time in whole or in part. At no time shall the
Director be deemed to have any right, title or
interest or any specified asset or assets of Bancorp
including but not by way of restriction any insurance
annuity contract or contracts of the proceeds thereof
except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy
or annuity policy on the life of the Director to fund
any obligations under this Agreement, Director agrees
to cooperate with the issuance of such policies to
sign any and all documents which may be required for
that purpose and to undergo any reasonable medical
examination or test which may be necessary or
otherwise required to obtain said policy(ies).
Moreover, should Bancorp elect to purchase a life
insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so
that Bancorp as sole beneficiary of such policy will
be notified timely by Director's estate upon
Director's death. Upon notification by Director's
estate pursuant to this provision, Bancorp shall pay
the sum of $5,000 (Notification Fee") to Director's
estate or designated beneficiary which shall include a
certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ Richard S. Gaston By:/s/ W. T. Fike
--------------------- ---------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Richard Gaston - Director benefit
Date of Retirement................12.20.2010
Plan Commencement.................12.20.1995
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1996....................... 940 940 N/A
1997....................... 1,039 1,979 N/A
1998....................... 1,148 3,127 N/A
1999....................... 1,268 4,395 N/A
2000....................... 1,401 5,795 N/A
2001....................... 1,547 7,343 947
2002....................... 1,709 9,052 1,167
2003....................... 1,888 10,940 1,411
2004....................... 2,086 13,026 1,680
2005....................... 2,304 15,331 1,977
2006....................... 2,546 17,876 2,305
2007....................... 2,812 20,689 2,668
2008....................... 3,107 23,795 3,068
2009....................... 3,432 27,227 3,511
2010....................... 3,791 31,019 4,000
---------
TOTAL NEEDED $ 31,019
=========
</TABLE>
<PAGE>
EXHIBIT 10.13
DIRECTOR'S
PAYMENT CONTINUATION AGREEMENT
This Agreement is by and between SierraWest Bancorp (formerly known as
Sierra Tahoe Bancorp, hereinafter "Bancorp"), a California corporation and
John J. Johnson ("Director"), shall be effective as of June 27, 1996, and is
intended to and shall replace all prior agreements between the parties
relating to the subject matter hereof, except as specifically otherwise
provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
March 28, 1996, ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ John J. Johnson By:/s/ W. T. Fike
------------------- ---------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
John Johnson - Director benefit
Date of Retirement................03.28.2011
Plan Commencement.................03.28.1996
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1996....................... 696 696 N/A
1997....................... 1,013 1,710 N/A
1998....................... 1,119 2,829 N/A
1999....................... 1,237 4,066 N/A
2000....................... 1,366 5,432 N/A
2001....................... 1,509 6,941 895
2002....................... 1,667 8,609 1,110
2003....................... 1,842 10,450 1,348
2004....................... 2,035 12,485 1,610
2005....................... 2,248 14,733 1,900
2006....................... 2,483 17,216 2,220
2007....................... 2,743 19,959 2,574
2008....................... 3,030 22,989 2,965
2009....................... 3,348 26,337 3,396
2010....................... 3,698 30,035 3,873
2011....................... 984 31,019 4,000
---------
TOTAL NEEDED $ 31,019
=========
</TABLE>
<PAGE>
EXHIBIT 10.14
DIRECTOR'S
PAYMENT CONTINUATION AGREEMENT
This Agreement is by and between SierraWest Bancorp (formerly known as
Sierra Tahoe Bancorp, hereinafter "Bancorp"), a California corporation and
Ralph J. Coppola ("Director"), shall be effective as of June 27, 1996, and
is intended to and shall replace all prior agreements between the parties
relating to the subject matter hereof, except as specifically otherwise
provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
March 28, 1996, ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ Ralph J. Coppola By:/s/ W. T. Fike
-------------------- --------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Ralph J. Coppola - Director benefit
Date of Retirement................03.28.2011
Plan Commencement.................03.28.1996
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1996....................... 696 696 N/A
1997....................... 1,013 1,710 N/A
1998....................... 1,119 2,829 N/A
1999....................... 1,237 4,066 N/A
2000....................... 1,366 5,432 N/A
2001....................... 1,509 6,941 895
2002....................... 1,667 8,609 1,110
2003....................... 1,842 10,450 1,348
2004....................... 2,035 12,485 1,610
2005....................... 2,248 14,733 1,900
2006....................... 2,483 17,216 2,220
2007....................... 2,743 19,959 2,574
2008....................... 3,030 22,989 2,965
2009....................... 3,348 26,337 3,396
2010....................... 3,698 30,035 3,873
2011....................... 984 31,019 4,000
---------
TOTAL NEEDED $ 31,019
=========
</TABLE>
<PAGE>
EXHIBIT 10.15
DIRECTOR'S
PAYMENT CONTINUATION AGREEMENT
This Agreement is by and between SierraWest Bancorp (formerly known as
Sierra Tahoe Bancorp, hereinafter "Bancorp"), a California corporation and
Ronald A. Johnson ("Director"), shall be effective as of June 27, 1996, and
is intended to and shall replace all prior agreements between the parties
relating to the subject matter hereof, except as specifically otherwise
provided herein.
RECITALS
WHEREAS, Bancorp continues to deem Director's future counsel and advice
to be valuable to it by virtue of Director's past experience as a director
of Bancorp and/or Sierra Bank of Nevada ("Bank"); and
WHEREAS, Bancorp desires to engage Director as a consultant and advisor
to Bancorp from time to time after termination of Director's active service
as a director ("Service Termination"); and
NOW THEREFORE, Bancorp and Director mutually agree as:
1. Benefit Granted.
a. Continuous Service. If Director maintains his service to
Bancorp as a Director continuously for five (5) years from
March 28, 1996, ("Commencement Date"), and at any time
thereafter resigns, is not reelected, is not reappointed or
is terminated from service as a director for any reason
other than Cause (defined below), he shall be entitled to
receive the appropriate vested benefit as set forth in
Schedule A attached hereto and incorporated herein ("Service
Benefit"). The Service Benefit vests according to the
schedule as set forth in Schedule A, is determined by
completed year of service calculated from the Commencement
Date up to a maximum benefit at fifteen (15) years, and is
paid following termination of service as Director, either in
a lump sum or in installments as hereinafter provided, in
consideration for Director's agreement to act as a
consultant for Bancorp as set forth in Paragraph 2.
For purposes of this Agreement, "Cause" whenever used shall
mean any one of the following: gross misconduct; conviction
of a felony by any criminal tribunal; willful and continuing
failure to substantially perform his duties as a director
after delivery of written demand, signed by a majority of the
Board of Directors, identifying the substantial failure to
perform; or willful conduct that results in Director's gain
or personal enrichment at the expense of Bancorp.
b. Early Termination From Service. In the event Director
leaves service as a director, whether voluntarily or for any
reason other than termination for cause, before the
expiration of five years of continuous service but after one
year of service, Director shall be eligible for 20% of the
benefit as set forth in Schedule A for each year of
completed service (so that as of the first year of completed
service Director is eligible for 20% of the vested one year
benefit as reflected on Schedule A, 40% of the vested two
year benefit as of the second year of completed service, and
so forth.) Payment of a Service Benefit resulting from
Early Termination will be made only in a lump sum.
c. Option to Pay Benefits In Installments; Election Date. In
lieu of receiving a lump sum payment of the Service Benefit,
Director may elect, provided that he has served at least
five (5) years and provided further that such election is
made at least two (2) years prior to Service Termination, to
receive the benefit in installment payments rather than a
lump sum. Monthly installments shall begin ninety (90) days
after Service Termination. If Director has served at least
15 years, installment payments shall equal $4,000 annually
for a period of fifteen (15) years, payable in one hundred
eighty (180) equal monthly installments. If Director has
served at least five (5) years but less than 15 years of
continuous service, such installments shall equal that pro-
rata share of Four Thousand Dollars per annum as the vested
accumulated benefit bears to the total accumulated benefit
described in Schedule A as "TOTAL NEEDED." The appropriate
monthly benefit is set forth in Schedule B. This amount is
also payable in one hundred eight (180) equal monthly
installments. There is no installment option if service is
terminated prior to five (5) years of continuous service.
Should Director pass away during any installment payout
period, appropriate installments will be paid to those
persons designated by Director to receive such benefit or as
otherwise directed by the qualified representative of
Director's estate.
d. Health Care Benefits. In addition to the benefits set forth
above, in the event of Service Termination at any time and
for any reason other than Cause, Director shall be eligible
to continue coverage, at his election and expense, under
Bancorp's group health plan as it exists at the time of
Service Termination or as it may be modified from time to
time. Director may elect to retain, increase or decrease
the coverage as it existed at the time of Service
Termination. Premiums for such coverage, both for
individual and dependent coverage as appropriate, shall be
at the rates charged as if Director had remained a director
in active service. If Director has elected monthly benefit
installment payments pursuant to 1(c) above, he may also
elect to have the monthly health benefit premium charges
deducted from those monthly benefit installment payments.
2. Consultant Obligation.
a. Upon Service Termination Director agrees to make himself
available for a five (5) year term to the management of
Bancorp and its subsidiaries, its various boards of
directors and other specified individuals that management or
the board may designate for the purpose of advising and
consulting with those individuals on behalf of Bancorp and
its subsidiaries. Director agrees that he will devote as
much time as is necessary and required by Bancorp, but not
to exceed twenty (20) hours per month, at an hourly fee of
one hundred fifty dollars ($150.00). It is expressly
understood that the compensation paid in the prior sentence
is in addition to the benefit paid pursuant to Paragraph 1
above, and is paid in consideration for the services of
Director as a consultant and advisor to Bancorp at Bancorp's
request.
b. Bancorp shall reimburse Director for his reasonable and
necessary travel and expenses incurred in such consulting or
advisory work. In the event Director is not residing in the
community where Bancorp's principal offices are located,
Bancorp agrees to reimburse Director for all reasonable
travel and expenses incurred by Director. Director agrees
that during his engagement he will keep himself informed
concerning the affairs of Bancorp and its subsidiaries by
reviewing annual or periodic reports and other data supplied
to Director by Bancorp. Director agrees to review these
items without charge to Bancorp.
3. Independent Contractor. The status of Director when engaged as
a consultant and contemplated by this Agreement shall be that
of Independent Contractor.
4. Death Benefit for Director. In the event Director should die while
actively serving as director at any time, Bancorp will pay $4,000
per year to Director's surviving spouse or designated nominee or
beneficiary. Such death benefit is payable on a monthly basis for a
period of one hundred and eighty (180) months.
5. Inability to Transfer Benefits. Neither the Director, the spouse, or
any other beneficiary under this agreement shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, or in
any way exercise any control or right over vested benefits granted
under this Agreement. None of said benefits shall be subject to
seizure for the payments of any debts, judgments, alimony or
separate maintenance which may be owed by the Director or his
beneficiary or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or
any beneficiary attempts an assignment, computation, hypothecation,
transfer or disposal of the benefit hereunder, Bancorp's
responsibilities, liabilities, and obligations shall forthwith
immediately cease and terminate as to any unvested benefits and this
Agreement shall be deemed to terminate as set forth in paragraph
7(a) below.
6. Nothing contained in this agreement shall be construed to alter,
abridge or in any manner affect the rights and privileges of the
Director to participate in and be covered by any pension profit
sharing group insurance bonus or similar employment benefits which
Bancorp may now have or hereafter adopt for which Director may be
determined to be eligible.
7. Benefits Not Accumulated; Cancellation; Notice.
a. Except as otherwise set forth herein, Bancorp reserves the
right to cancel the Payment Continuation Program and/or to
terminate this Agreement ("Termination/Cancellation") at any
time and for any reason as to any benefits not yet vested,
in its sole and absolute discretion; provided however that
Director shall be entitled to the vested amount set forth on
Schedule A attached hereto as determined by the date the
termination/cancellation occurs. In the event of
Termination/Cancellation, the vested amounts will be paid in
one lump sum at the time of Director's termination from
office as Director. Bancorp will give fifteen (15) days
prior written notice of Termination/Cancellation.
b. The foregoing notwithstanding, in the event of a Change of
Control (defined below), Director shall be deemed to be
fully vested in the Full Accumulation Value as set forth in
Schedule A as if Director had served through all years as
specified on Schedule A. The Full Accumulation Value shall
be paid in one lump sum in the amount and when Director
would otherwise have been entitled to be paid under the
provisions of Paragraph 1. In the event that Director's
service is not terminated coincident with a change of
control so that he is not yet entitled to receive immediate
payment of the Full Accumulation Value pursuant to the
provisions of &1, interest shall be deemed to accrue on the
Full Accumulation Value at the prime rate minus one percent
from the date the benefit vests until it is paid. In
addition, in the event that Director's termination occurs in
connection with, in anticipation of, or following a Change
of Control, Director shall be excused from and shall not be
obligated to act as a consultant or be restricted in his
activities as provided in Paragraph 2 of this Agreement.
For purposes of this Agreement, Change of Control is defined as
any one of the following, provided however that Change of Control
shall be without the monetary assistance of the FDIC: (i) an
acquisition (other than directly from Bancorp) by an individual,
entity or group (excluding Bancorp or one of its employee benefit
plans or an entity controlled by Bancorp's shareholders) of 20% or
more of Bancorp's common stock or voting securities; (ii) a change
in a majority of the current Board of Directors (excluding any
persons approved by a vote of at least a majority of the Board
other than in connection with an actual or threatened proxy
contest); (iii) liquidation or dissolution of Bancorp or a merger,
consolidation or sale of all or substantially of the Bancorp's
assets ("Business Combination") other than one in which all or
substantially all of Bancorp's shareholders receive 50% or more of
the stock of the company resulting from the Business Combination,
at least a majority of the board of directors of the resulting
corporation were members of the incumbent board, and after which
no person owns 20% or more of the stock of the resulting
corporation who did not own such stock immediately before the
Business Combination.
For purposes of this Agreement, "in connection with" or "in
anticipation of" a Change of Control with respect to subsections
(i) and (iii) above shall mean on or after the date of an executed
Letter of Intent or, if there is no written Letter of Intent, on
or after the date of the first act of due diligence inspection by
a potential acquiror, provided that the transaction contemplated
by the Letter of Intent or due diligence inspection in fact
concludes no later than eighteen (18) months after that date.
Moreover, "following a Change of Control" shall mean Service
Termination by or within 365 days of the conclusion of a Change of
Control as defined above.
8. Funding of Benefits.
a. Bancorp reserves the absolute right in its sole and
exclusive discretion either to: (i) fund by cash, insurance,
or otherwise the obligation undertaken by this Agreement, or
(ii) not fund the obligation in advance. Should Bancorp
elect to fund in advance the benefits contemplated by this
Agreement in whole or in part through the median of life
insurance or annuities or both, then Bancorp shall be the
owner and beneficiary of the policy.
b. Bancorp reserves the absolute right in its sole discretion
to terminate such life insurance or annuities as well as any
other funding program at any time in whole or in part. At
no time shall the Director be deemed to have any right,
title or interest or any specified asset or assets of
Bancorp including but not by way of restriction any
insurance annuity contract or contracts of the proceeds
thereof except to those rights listed in this agreement.
c. Any advance funding of obligations hereunder shall not in any
way be considered to constitute security for the performance
of the obligations of this Agreement. The obligation shall be
considered to be paid from current available resources and
otherwise unsecured.
d. If Bancorp elects to purchase a life insurance policy or
annuity policy on the life of the Director to fund any
obligations under this Agreement, Director agrees to
cooperate with the issuance of such policies to sign any and
all documents which may be required for that purpose and to
undergo any reasonable medical examination or test which may
be necessary or otherwise required to obtain said
policy(ies). Moreover, should Bancorp elect to purchase a
life insurance policy or annuity policy as provided above,
Director agrees to make appropriate arrangements so that
Bancorp as sole beneficiary of such policy will be notified
timely by Director's estate upon Director's death. Upon
notification by Director's estate pursuant to this
provision, Bancorp shall pay the sum of $5,000 (Notification
Fee") to Director's estate or designated beneficiary which
shall include a certified copy of the death certificate.
9. General Obligation. This Agreement shall not be construed as
giving Director or his beneficiary any greater rights of those
of any other unsecured creditor of Bancorp.
10.Agreement Binding. This Agreement shall be binding upon and insure
to the benefit of the Director and his personal representatives,
agents and assigns. To the extent consistent herewith, this
Agreement shall inure to any successor organization of Bancorp which
shall succeed to substantially all the stock of its assets in
business.
11.Beneficiaries; Election. Director reserves the right to change the
name of his named primary or contingent beneficiaries by separate
letter from time to time or upon properly notifying Bancorp or its
successor of this document in writing as to the recipient of such
benefits. Bancorp reserves the right to require a spouse's signature
thereon if in the opinion of counsel, such is required.
12.Suicide Exclusion. In the event that it is demonstrated to Bancorp's
reasonable certainty that, within two (2) years of the Commencement
Date, Director has taken his own life, any and all amounts unpaid
under this Agreement shall be deemed to have lapsed and shall be
terminated prior to any vesting. In such event, Bancorp shall have
no liability to Director or any persons which otherwise would be
entitled to benefits under this Agreement.
13.Miscellaneous. The provisions of this agreement shall be severable
from each other. In the event that a court should declare any
provision unenforceable, the remaining provisions of the agreement
shall continue to be binding and enforceable. This agreement shall
be construed under the laws of the State of California. Venue shall
be appropriate wherever allowed by law and in the County of Nevada
(Truckee Session). This Agreement represents the final expression of
the parties and may be modified only in writing. This Agreement may
be executed in counterparts.
14.Attorneys Fees. In the event either party employs an attorney to
enforce any of the provisions hereof, or for the purpose of
declaring the effect of a provisions which interpretation it
contests, the prevailing party shall be entitled to reasonable
attorney fees
Agreed and accepted this 26th day of September, 1996.
DIRECTOR SIERRAWEST BANCORP
By:/s/ Ronald Johnson By:/s/ W. T. Fike
------------------ ---------------
Director President
By:/s/ A. Morgan Jones
-------------------
Secretary
<PAGE>
<TABLE>
SIERRAWEST BANCORP
SALARY CONTINUATION PLAN
CALCULATION OF ANNUAL CONTRIBUTION
Ronald Johnson - Director benefit
Date of Retirement................03.28.2011
Plan Commencement.................03.28.1996
Retirement Benefit................$4,000 per year for 15 years
Discount Rate.....................10 percent
Years to Accrue...................15 years
SCHEDULE A SCHEDULE B
Accrual Cash benefit Annual
Per year Accumulated benefit
<S> <C> <C> <C>
1996....................... 696 696 N/A
1997....................... 1,013 1,710 N/A
1998....................... 1,119 2,829 N/A
1999....................... 1,237 4,066 N/A
2000....................... 1,366 5,432 N/A
2001....................... 1,509 6,941 895
2002....................... 1,667 8,609 1,110
2003....................... 1,842 10,450 1,348
2004....................... 2,035 12,485 1,610
2005....................... 2,248 14,733 1,900
2006....................... 2,483 17,216 2,220
2007....................... 2,743 19,959 2,574
2008....................... 3,030 22,989 2,965
2009....................... 3,348 26,337 3,396
2010....................... 3,698 30,035 3,873
2011....................... 984 31,019 4,000
---------
TOTAL NEEDED $ 31,019
=========
</TABLE>
<PAGE>
EXHIBIT 11
SierraWest Bancorp and Subsidiaries
Computation of Earnings Per Common Share
(Amounts in thousands except per share amounts)
<TABLE>
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
09/30/96 09/30/95 09/30/96 09/30/95
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Primary
Net income $ 940 $ 623 $ 1,896 $ 1,587
======== ======== ======== ========
Shares
Weighted average number of
common shares outstanding 2,691 2,574 2,653 2,602
Assuming exercise of options
reduced by the number of
shares which could have been
purchased with the proceeds
from exercise of such option 127 75 122 73
--- -- --- --
Weighted average number of
common shares outstanding as
adjusted 2,818 2,649 2,775 2,675
===== ===== ===== =====
Net income per share $ 0.33 $ 0.23 $ 0.68 $ 0.59
======== ======== ======== ========
Assuming full dilution
Earnings $ 940 $ 623 $ 1,896 $ 1,587
Add after tax interest expense
applicable to convertible
debenture 114 125 348 374
--- --- --- ---
Net income $ 1,054 $ 748 $ 2,244 $ 1,961
======== ======= ======== ========
Shares
Weighted average number of
common shares outstanding 2,691 2,574 2,653 2,602
Assuming conversion of
convertible debentures 918 1,000 948 1,000
Assuming exercise of options
reduced by the number of
shares which could have been
purchased with the proceeds
from exercise of such options 146 102 138 85
--- --- --- --
Weighted average number of
common shares outstanding as
adjusted 3,755 3,676 3,739 3,687
===== ===== ===== =====
Net income per share assuming
full dilution $ 0.28 $ 0.20 $ 0.60 $ 0.53
======== ======== ========= ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 23,268
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 12,900
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 32,081
<INVESTMENTS-CARRYING> 2,366
<INVESTMENTS-MARKET> 2,360
<LOANS> 305,161
<ALLOWANCE> 4,577
<TOTAL-ASSETS> 405,241
<DEPOSITS> 358,949
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,405
<LONG-TERM> 9,035
0
0
<COMMON> 11,758
<OTHER-SE> 20,094
<TOTAL-LIABILITIES-AND-EQUITY> 405,241
<INTEREST-LOAN> 22,001
<INTEREST-INVEST> 1,210
<INTEREST-OTHER> 732
<INTEREST-TOTAL> 23,943
<INTEREST-DEPOSIT> 8,363
<INTEREST-EXPENSE> 8,913
<INTEREST-INCOME-NET> 15,030
<LOAN-LOSSES> 910
<SECURITIES-GAINS> (8)
<EXPENSE-OTHER> 16,302
<INCOME-PRETAX> 3,064
<INCOME-PRE-EXTRAORDINARY> 1,896
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,896
<EPS-PRIMARY> .68
<EPS-DILUTED> .60
<YIELD-ACTUAL> 6.25
<LOANS-NON> 5,745
<LOANS-PAST> 2,086
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,845
<CHARGE-OFFS> 421
<RECOVERIES> 243
<ALLOWANCE-CLOSE> 4,577
<ALLOWANCE-DOMESTIC> 4,577
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
