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Exhibit 10 (a)

 
SEVERANCE AGREEMENT
AND RELEASE OF ALL CLAIMS
 
This Severance Agreement and Release of All Claims (“Agreement”) is made and
entered into by and between Larry V. Sorensen, Executive Vice President of
Sonoma National Bank (referred to herein as the “Bank”) and Chief Financial
Officer (referred to herein as “Officer”) of Northern Empire Bancshares, a
California Corporation (referred to herein as the “Company”) and the Company and
the Bank.
 
RECITALS
 
WHEREAS, Officer’s employment with the Company and the Bank shall cease by
mutual agreement of the parties, effective September 29, 2006 (the “Separation
Date”);

WHEREAS, Officer does not have pending against the Company or any of its
affiliated, related, parent or subsidiary corporations (including, without
limitation, the Bank) or any of its or their directors, officers, employees,
shareholders or agents (collectively referred to herein as the “Released
Parties”) and the Company does not have pending against Officer any claim,
charge or action in or with any federal, state or local court or administrative
agency; and

WHEREAS, Officer understands that Officer may have at least 21 days from the
Separation Date in which to consider the Agreement, and that after executing the
Agreement, Officer has an additional 7 days after signing to revoke the
Agreement. Officer further understands that this Agreement shall not become
effective or enforceable until the revocation period has expired.

WHEREAS, Officer and the Company and the Bank desire to settle fully and finally
all existing and/or potential differences between them;

NOW, THEREFORE, in consideration of the mutual covenants and promises herein and
other good and valuable consideration, receipt of which is hereby acknowledged,
it is agreed by and between the parties as follows:

AGREEMENT
 

 
1.
Severance Sum.

a.    As consideration supporting this Agreement, the Company agrees to pay
Officer the gross sum of Two Hundred Forty Thousand Dollars (“Severance Sum”),
which Officer otherwise would not be entitled to receive. The Severance Sum will
be paid in one lump sum payment. The Severance Sum shall be subject to all
applicable withholdings and deductions required by federal and state law.
Payment of the Severance Sum shall be made within 5 calendar days after the
7-day revocation period has expired.

b.    Officer agrees that payment of the Severance Sum and the accelerated
vesting of stock options under Paragraph 19 below shall constitute the entire
amount of economic consideration provided to Officer under this Agreement and
that Officer will not seek any further compensation for any claimed damage,
costs or attorneys’ fees in connection with the matters encompassed in this
Agreement.

c.    Conditional Nature of Severance Payment. Officer’s right to payment of the
Severance Sum set forth in 1(a) above (to the extent Officer is otherwise
entitled to such payment) and right to accelerated vesting under Paragraph 19
below, shall be conditioned upon the return of all Company and Bank property by
September 29, 2006, and upon Officer not directly or indirectly engaging in
(whether as an officer, consultant, agent, proprietor, principal, partner,
stockholder, corporate officer, director or otherwise), any of the following:
(1) the disclosure of any Company or Bank trade secrets, including but not
limited to, any formula, pattern, compilation, program, device, method,
technique, or process of the Company or Bank that is not generally known to the
public to any person, and particularly not to any firm, corporation or business
that competes with Company or Bank or is a customer of the Company or Bank (2)
divulging any confidential information of the Company or Bank to any person or
any such entity; (3) any act or conduct that would have the intended or
reasonably foreseeable effect of wrongfully interfering with or disrupting any
contractual or economic relationship(s) that the Company or Bank has with any
other person or entity.

Officer agrees that breach of any of the above conditions shall constitute a
material violation and breach of this Agreement.

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2.    Non-admission. This agreement and compliance with this Agreement shall not
be construed as an admission by either party of any liability whatsoever, or as
an admission by any Released Party of any violation of the rights of Officer or
any person, or a violation of any order, law, statute, duty or contract.

3.    Professional References. Any verbal or written request(s) for professional
references regarding Officer shall be directed to the Human Resources Department
of the Company, and only the following information will be provided by the
Company: (1) Officer’ employment dates, (2) title, and (3) salary. Officer
hereby authorizes the Company to provide such information upon request.

4.    Non-disparagement. Officer shall not disparage any of the Released
Parties, or any representative, customer or supplier of the Company or the Bank,
or any affiliate of the Company or the Bank. Similarly, the Bank and Company
agree that its officers and directors will not disparage Officer.
Notwithstanding the foregoing, any party may respond accurately and fully to any
question, inquiry or request for information when required by legal process.

5.    Confidentiality. Officer understands and agrees that this Agreement and
each of its terms, and the negotiations surrounding it, are confidential and
shall not be disclosed by Officer to any entity or person, for any reason, at
any time, without prior written consent of the Company, unless required by law.
Notwithstanding the foregoing, Officer may disclose the terms of this Agreement
to Officer’s spouse, and for legitimate business reasons, to legal, financial,
and tax advisors, who shall also be bound to maintain the confidentiality of
this Agreement and its terms.

6.    Confidential Information. Officer shall not, for the benefit of any person
or entity other than the Company or the Bank, disclose or use any information
regarding the Company’s or the Bank’s business, officers, employees or
customers, which was produced by any officer of the Company or the Bank in the
course of employment with the Company or the Bank or otherwise produced or
acquired by or on behalf of the Company or the Bank, and which is not properly
in the public domain.

 
7.
Releases.

a.    In exchange for the benefits described in Paragraph 1, Officer and
Officer’s successors and assigns, release and absolutely discharge the Released
Parties of and from any and all claims, demands, actions and causes of action,
which Officer now has, or at any other time had, or shall or may have against
any of the Released Parties, whether now known or unknown, including, but not
limited to, any and all claims for breach of contract; breach of the implied
covenant of good faith and fair dealing; inducement of breach; interference with
contract or prospective economic advantage; wrongful or unlawful demotion;
violation of public policy; invasion of privacy; intentional or negligent
infliction of emotional distress; intentional or negligent misrepresentation;
conspiracy; failure to pay wages, commissions, bonuses, benefits, vacation pay,
severance pay, attorneys' fees, or any other compensation of any sort;
defamation; discrimination or harassment on the basis of race, color, sex,
sexual orientation, religion, national origin, ancestry, age, disability,
medical condition or any other protected class or status; any claim under Title
VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e et. seq., the
Age Discrimination in Employment Act of 1967, as amended; the California Fair
Employment and Housing Act, as amended; violation of the Occupational Safety and
Health Act, or any other health/safety laws, statutes or regulations; violation
of the Employee Retirement Income Security Act of 1974; violation of the
Internal Revenue Code; violation of the federal Americans with Disabilities Act;
violation of the federal Family and Medical Leave Act or California’s Family
Rights Act; violation of Department of Labor regulations; violation of
California’s Labor Code or Business and Professions Code; violation of any other
applicable state, federal or local law; or any other alleged wrongful conduct by
the Released Parties, including any claim related in any way to Officer’s
employment or termination of employment with the Company or the Bank; provided,
however, that the release contained herein shall not be construed in any way to
release the Company or the Bank from any obligation to indemnify Officer
pursuant to agreement or applicable law, including, but not limited to, any
obligation regarding the advancement of costs.

b.    In addition, Officer expressly waives the provisions of Section 1542 of
the Civil Code of the State of California, which provides:

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

c.    The Officer understands and agrees that Officer:

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i.    Has had at least a full twenty-one (21) days within which to consider this
Agreement before executing it, or if Officer has executed this Agreement within
less than twenty-one (21) days of the date of delivery to Officer,
Officer acknowledges that such decision was entirely voluntary and that Officer
had the opportunity to consider this Agreement for the entire twenty-one
(21)-day period.
 
ii.    Has carefully read and fully understands all of the provisions of this
Agreement.

iii.    Is, through this Agreement, releasing the Released Parties from any and
all claims Officer may have against the Released Parties.

iv.    Knowingly and voluntarily agrees to all of the terms set forth in this
Agreement.

v.    Knowingly and voluntarily intends to be legally bound by the same.

vi.    Was advised and hereby is advised in writing to consider the terms of
this Agreement and consult with an attorney of Officer’s choice prior to
executing this Agreement.

vii.    Has a full seven (7) days following the execution of this Agreement to
revoke this Agreement and has been and hereby is advised in writing that this
Agreement shall not become effective or enforceable until the revocation period
has expired.

viii.    Understands that any rights or claims under the Age Discrimination in
Employment Act of 1967 (29 U.S.C. § 621, et seq.) that may arise after the date
this Agreement is executed are not waived.

d.    The Bank and the Company hereby release and absolutely discharge Officer
of and from any and all claims, demands, actions and causes of action, which the
Bank or Company now has, or at any other time had against Officer, whether now
known or unknown, that arise out of or are related to events, acts, conduct or
omissions occurring prior to its signing this Agreement, including, but not
limited to, all claims related to Officer’s employment with the Bank or Company
or the termination of that employment; provided however, that this release shall
not extend to: any claims that may arise after this Agreement is executed,
including (without limitation) any claims for breach of this Agreement; and any
claims arising at any time out of Officer’s obligations to protect the Company’s
or the Bank’s proprietary or confidential information pursuant to agreement or
applicable law.

8.    Acknowledgments and Representations. Officer acknowledges and represents
that he has not suffered any discrimination or harassment by any of the Released
Parties on account of his race, gender, national origin, religion, marital
status, age, or any disability, medical condition or other characteristic
protected by law. Officer acknowledges and represents that he has not been
denied any leave to which he may have been entitled by law, and that he has not
suffered any job-related wrongs or injuries for which he might still be entitled
to compensation or relief. He further acknowledges and represents that, except
as expressly provided in this Agreement, he has been paid all wages, bonuses,
compensation, benefits and other amounts that any of the Released Parties has
ever owed to him. He represents and warrants that all of the factual
representations he makes herein, all of which induce the Company to enter into
this Agreement, are true in all material respects.

9.    No Voluntary Assistance. Officer agrees that Officer will not in any
manner encourage or willingly assist any person, including any past, present, or
prospective employees or applicants for employment with the Company or the Bank,
in filing or pursuing any lawsuit, claim or action against any of the Released
Parties, in any state or federal court or before any state, federal, or
governmental agency, except as Officer may be required by statutorily authorized
process to give testimony or to provide documents at a legal proceeding, or to
cooperate in any agency or legal proceeding as authorized by law.

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9.    Assignment. Officer agrees that Officer will not assign, sell, transfer,
delegate, or otherwise dispose of, whether voluntarily or involuntarily, or by
operation of law, any rights or obligations under this Agreement. Any such
purported assignment, transfer, or delegation shall be null and void. Officer
represents that Officer has not previously assigned or transferred any claims or
rights released by Officer pursuant to this Agreement. Subject to the foregoing,
this Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, successors, attorneys, and permitted
assigns. This Agreement shall also inure to the benefit of any Released Party.
This Agreement shall not benefit any other person or entity as except as
specifically enumerated in this Agreement.

10.    Integration. This Agreement, including Exhibits A, B and C, sets forth
the entire agreement between the parties hereto and fully supersedes any and all
prior or contemporaneous agreements or understandings, written or oral, between
the parties hereto pertaining to the subject matter hereof.

11.     Modification. This Agreement may be modified, restated or otherwise
changed only by a writing signed by Officer and the President of the Company. No
oral representations or other acts shall give rise to an implied modification of
this Agreement.

12.    Choice of Law. The validity, performance and all other matters pertaining
to this Agreement shall be governed by the laws of the State of California,
without regard to the conflict of laws rules of said state.

13.    Waiver. The failure or delay of any party to enforce at any time any of
the provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce any such provision. No waiver shall be valid unless
in writing and signed by the party providing such waiver.

14.    Severability. If any provision of this Agreement or the application
thereof to any situation or circumstance shall be invalid or unenforceable, the
remainder of this Agreement or the application of such covenant, agreement, term
or provision to situations or circumstances other than those as to which it is
invalid or unenforceable shall not be affected; and each covenant, agreement,
term or provision of this Agreement shall be valid and enforceable to the
fullest extend permitted by applicable law. In such event, the parties shall
negotiate in good faith to substitute for any such invalid or unenforceable
provision a valid and enforceable provision which most nearly effects the
parties’ original intent in entering into this Agreement.

15.    Consultation of Counsel. Each of the parties acknowledges that they have
had the full opportunity to seek independent legal advice in respect to the
contents of this Agreement and that they sign this Agreement voluntarily after
having been offered such opportunity.

16.    Notice. Any notice required or desired to be given under this Agreement
shall be deemed given if in writing sent by registered mail to Officer’s last
known residence or to the Company’s principal office, to the attention of the
President of the Company, as the case may be.

17.    Arbitration. The parties agree that any dispute, controversy, or claim
arising out of or relating to this Agreement shall be resolved by binding
arbitration in accordance with the Rules of the American Arbitration Association
(the “AAA”) governing employment dispute resolution, which shall apply except as
modified below. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction. There shall be a single arbitrator agreed upon
mutually by the parties; but if they cannot agree upon the selection within
forty-five (45) days after demand for arbitration is given by one party to the
other, an arbitrator having reasonable experience in employment dispute
resolution matters shall be selected in accordance with the applicable rules of
the AAA. The arbitration shall be conducted in Sonoma County, California, or at
the AAA facility closest to Sonoma County, unless otherwise mutually agreed by
the parties. Each party shall pay its own attorneys’ fees and costs, except that
the Company shall pay the fees and expenses related to the arbitration that the
Officer would not generally be required to bear if Officer brought the same
action in a court otherwise having jurisdiction. The arbitrator shall prepare a
written decision and shall have the power to grant damages, remedies or relief
that would be available in a court otherwise having jurisdiction of the matter,
but no other damages, remedies or relief. Subject to the foregoing, the
arbitrator shall have the power to determine if any issue is arbitrable under
this Agreement. BY SIGNING BELOW, EACH PARTY ACKNOWLEDGES THAT THE ARBITRATION
PROVISION OF THIS AGREEMENT REQUIRES THE PARTY TO GIVE UP RIGHT TO HAVE THE
DISPUTE LITIGATED IN A COURT AND/OR THE RIGHT TO A JURY TRIAL. Nothing in this
Agreement is intended to prevent either Officer or the Company or the Bank from
obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of any such arbitration.

18.    Voluntary Agreement. Officer has fully reviewed the terms of this
Agreement, acknowledges that Officer understands the terms of this Agreement,
and states that Officer is entering into this Agreement knowingly, voluntarily
and in full settlement of any and all claims that Officer may have as a result
of Officer’s employment with Company or the Bank.

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19.    Vesting of Stock Options. Upon the effective date of this Agreement,
following all periods within which Officer may revoke this Agreement, all stock
options held by Officer shall become fully vested and exercisable by the
Officer, subject to (a) compliance with the Company’s Trading Policy (a copy of
which is attached as Exhibit A), including applicable ‘blackout periods’; (b)
securities laws and regulations applicable to Officer as an ‘affiliate’ of the
Company; and (c) the Company’s 1997 Stock Option Plan (a copy of which is
attached as Exhibit B) and Officer’s Stock Option Agreement(s) (a copy of which
is attached as Exhibit C), including any applicable exercise periods. It is
further understood and agreed that the Company is not providing any
representations or assurances as to any tax treatment with respect to the
exercise of any of Officer’s stock options or the sale of any shares received
upon exercise. Officer acknowledges that he has the opportunity to seek the
advice of his own tax advisor with respect to the tax effects and/or treatment
of any exercise of his stock options and/or sale of stock received upon
exercise.

20.    Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original.

Dated:
    September 26, 2006
  /s/ Larry V. Sorensen          Larry V. Sorensen                              
       
Dated:
    September 29 ,2006
  SONOMA NATIONAL BANK and NORTHERN EMPIRE BANCSHARES                    
By:
/s/ Deborah Meekins
        Deborah Meekins         President and Chief Executive Officer  

 

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