Exhibit 10.1

 

WESTERN SIERRA NATIONAL BANK

EXECUTIVE SURVIVOR INCOME AGREEMENT

 

THIS EXECUTIVE SURVIVOR INCOME AGREEMENT (this “Agreement”) is made as of this
13thday of July , 2005 by and between Western Sierra National Bank, and Anthony
J. Gould (the “Executive”).

 

To encourage the Executive to remain an employee of the Bank, the Bank is
willing to provide certain benefits to the Executive’s beneficiary(ies) under
the circumstances described in this Agreement. The Bank will pay the benefits
from its general assets, but only so long as one of the Bank’s general assets is
a life insurance policy on the Executive’s life.  The Executive and Bank agree
as follows:

 

ARTICLE 1

DEFINITIONS

 

Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:

 

1.1                                 “Bank” means: Western Sierra National Bank,
its parent, Western Sierra Bancorp, and any subsidiary of Western Sierra
National Bank or Western Sierra Bancorp.

 

1.2                                 “Change in Control” means: (i) a tender
offer made and consummated for the ownership of 50% or more of the outstanding
voting securities of the Bank; (ii) a merger or consolidation of the Bank with
another bank or corporation and as a result of such merger or consolidation less
than 50% of the outstanding voting securities of the surviving or resulting
entities or shareholders other than affiliates (within the meaning of the
Securities Exchange Act of 1934) of any party to such merger or consolidation,
as the same shall have existed immediately prior to such merger or
consolidation, (iii) a sale of substantially all of the Bank’s assets to another
bank or corporation which is not a wholly owned subsidiary; or (iv) an
acquisition of the Bank by a person, within the meaning of Section 3(a)(9) or of
Section 1(d)(3) (as in effect on the date hereof) of the Securities Exchange Act
of 1934, of 50% or more of the outstanding voting securities of the company
(whether directly, indirectly, beneficially or of record).  For purposes of this
agreement, ownership of voting securities shall take into account and shall
include ownership as determined by applying the provisions of
Rule 13d-3(d)(1)(1) (as in effect on the date hereof) pursuant to the Securities
Exchange Act of 1934.

 

1.3                                 “Disability” means the Executive suffers a
sickness, accident, or injury that is determined a doctor, selected by the Bank,
to be a disability rendering the Executive totally and permanently disabled.  At
the request of the Bank, the Executive must submit proof to the Bank of the
doctor’s determination.

 

1.4                                 “Normal Retirement Age” means the completion
of 10 Years of Service and the Executive attains 55 years of age.

 

1.5                                 “Termination for Cause” means the Bank
terminates the Executive’s employment for any of the following reasons:
(a) gross negligence or gross neglect of duties, (b) commission of a felony or
commission of a misdemeanor involving moral turpitude, (c) fraud, disloyalty, or
willful violation of any law or significant Bank policy committed in connection
with the Executive’s employment and resulting in an adverse effect on the Bank,
or (d) the Executive’s failure to correct material deficiencies in the
performance of assigned duties promptly after such deficiencies are described in
a writing delivered by the Bank to the Executive.

 

1.6                                 “Termination of Employment” with the Bank
means that the Executive shall have ceased to be employed by the Bank for any
reason whatsoever, excepting a leave of absence approved by the Bank.  For
purposes of this Agreement, if there is a dispute over the employment status of
the Executive or the date of termination of the Executive’s employment, the Bank
shall have the sole and absolute right to decide the dispute, unless a Change in
Control shall have occurred.

 

1.7                                 Years of Service: Years of Service shall
include the actual period of time that Executive has been employed by the Bank.

 

ARTICLE 2

ENTITLEMENT TO BENEFIT

 

2.1                                 Survivor Income Benefit.  Provided the Bank
receives payment from the insurance policy insuring Executive’s life, the Bank
shall pay to the Executive’s designated beneficiary(ies), in a single lump sum,
the survivor income benefit of $25,000 in the event of the death of Executive
under the following circumstances: (a) the death occurs while the Executive is
employed by the Bank; (b) the death occurs following a voluntarily or
involuntarily termination

 

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(exclusive of Termination for Cause) of Executive’s employment with the Bank
during the 24 month period following a Change in Control; (c) the death occurs
following the termination of Executive’s employment due to Disability and
Executive has not recovered from such Disability at the time of death; or
(d) the death occurs after Executive reaches Normal Retirement Age.  The Bank
shall make the payment within ninety (90) days of the presentation of claim and
affirmative determination of the right to such benefit, pursuant to Article 5
hereof.

 

ARTICLE 3

BENEFICIARIES

 

3.1                                 Beneficiary Designations.  The Executive
shall designate a beneficiary by filing a written designation with the Bank.  
The Executive’s beneficiary designation shall be deemed automatically revoked if
the beneficiary predeceases the Executive or if the Executive names a spouse as
beneficiary and the marriage is subsequently dissolved.  If the Executive dies
without a valid beneficiary designation, all payments shall be made to the
Executive’s estate.

 

3.2                                 Facility of Payment.  If a benefit is
payable to a minor, to a person declared incompetent, or to a person incapable
of handling the disposition of his or her property, the Bank may pay such
benefit to the guardian, legal representative, or person having the care or
custody of such minor, incompetent person, or incapable person. The Bank may
require proof of incompetence, minority, or guardianship as it may deem
appropriate before distribution of the benefit.  Such distribution shall
completely discharge the Bank from all liability for such benefit.

 

ARTICLE 4

GENERAL LIMITATIONS

 

4.1                                 Termination for Cause.  Notwithstanding any
provision of this Agreement to the contrary, the Bank shall not pay any benefit
under this Agreement if Termination of Employment is due to the Executive’s
actions resulting in Termination for Cause.

 

4.2                                 Suicide or Misstatement.  Notwithstanding
any provision of this Agreement to the contrary, the Bank shall not pay any
benefit under this Agreement if the Executive commits suicide within three years
after the date of this Agreement.  In addition, the Bank shall not pay any
benefit under this Agreement if the Executive has made any material misstatement
of fact on any application or resume provided to the Bank, or on any application
for any benefits provided by the Bank to the Executive.

 

4.3                                 Removal.  Notwithstanding any provision of
this Agreement to the contrary, if the Executive is removed from office or
permanently prohibited from participating in the conduct of the Bank’s affairs
by an order issued under section 8(e) (4) or (g) (1) of the Federal Deposit
Insurance Act, 12 U.S.C. 1818(e) (4) or (g) (1), all obligations of the Bank
under this Agreement shall terminate as of the effective date of the order.

 

4.4                                 Insolvency.  Notwithstanding any provision
of this Agreement to the contrary, if the Office of the Comptroller of the
Currency  appoints the Federal Deposit Insurance Corporation as receiver for the
Bank all obligations under this Agreement shall terminate as of the date of the
Bank’s declared insolvency.

 

4.5                                 Termination of Participation. 
Notwithstanding any provision of this Agreement to the contrary, this Agreement
shall terminate if the Executive’s employment with the Bank terminates before
the Normal Retirement Age for reasons other than Disability, voluntary or
involuntary termination within 24 months after a Change in Control (excepting
Termination for Cause).

 

ARTICLE 5

CLAIMS AND REVIEW PROCEDURES

 

5.1                                 Claims Procedure.  The Bank shall notify any
person or entity that makes a claim against the Agreement (the “Claimant”) in
writing, within ninety (90) days of Claimant’s written application for benefits,
of his or her eligibility or ineligibility for benefits under the Agreement.  If
the Bank determines that the Claimant is not eligible for benefits or full
benefits, the notice shall set forth (1) the specific reasons for such denial;
(2) a specific reference to the provisions of the Agreement on which the denial
is based; (3) a description of any additional information or material necessary
for the Claimant to perfect his or her claim, and a description of why it is
needed; and (4) an explanation of the Agreement’s claims review procedure; (5) a
statement of Claimant’s right to bring action under ERISA
Section 502(a) following an adverse benefit determination on review.  If the
Bank determines that there are special circumstances requiring additional time
to make a decision, the Bank shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.

 

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5.2                                 Review Procedure.  If the Claimant is
determined by the Bank not to be eligible for benefits, or if the Claimant
believes that he or she is entitled to greater or different benefits, the
Claimant shall have the opportunity to have such claim reviewed by the Bank by
filing a petition for review with the Bank within sixty (60) days after receipt
of the notice issued by the Bank.  Said petition shall state the specific
reasons which the Claimant believes entitle him or her to benefits or to greater
or different benefits.  Within sixty (60) days after receipt by the Bank of the
petition, the Company shall afford the Claimant (and counsel, if any) an
opportunity to present his or her position to the Bank orally or in writing, and
the Claimant (or counsel) shall have the right to view the pertinent documents. 
The Bank shall notify the Claimant of its decision in writing within the
sixty-day period.  The notice shall be written in a manner calculated to be
understood by the Claimant and shall set forth: (1) the specific reasons for the
denial; (2) a specific reference to the provisions of the Agreement on which the
denial is based; (3) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant (as defined by ERISA regulations) to the
Claimant’s claim for benefits; and (4) a statement of Claimant’s right to bring
action under ERISA Section 502(a) following an adverse benefit determination on
review.  If, because of the need for a hearing, the sixty-day period is not
sufficient, the decision may be deferred for up to another sixty-day period at
the election of the Bank, but notice of this deferral shall be given to the
Claimant.

 

ARTICLE 6

MISCELLANEOUS

 

6.1                                 Amendment and Termination.  The Bank may
amend or terminate this Agreement at any time if, because of legislative,
judicial, or regulatory action, continuation of the Agreement would (a) cause
benefits to be taxable to the Executive before actual receipt, or (b) result in
significant financial penalties or other significantly detrimental consequences
to the Bank (other than the financial impact of paying the benefits), or (c) the
insurance policy is cancelled.

 

6.2                                 Binding Effect.  This Agreement shall bind
the Executive and the Bank and their beneficiaries, survivors, executors,
administrators, and transferees.

 

6.3                                 No Guarantee of Employment.  This Agreement
is not a contract for employment.  It does not give the Executive the right to
remain an employee of the Bank, nor does it interfere with the Bank’s right to
discharge the Executive.  It also does not require the Executive to remain an
employee nor interfere with the Executive’s right to terminate employment at any
time.  Anything in this Agreement to the contrary notwithstanding, the Executive
acknowledges and agrees that his or her employment by the Bank is employment at
will, and his or her employment at will status is not affected by this
Agreement.

 

6.4                                 Non-Transferability.  Benefits under this
Agreement cannot be sold, transferred, assigned, pledged, attached, or
encumbered in any manner.

 

6.5                                 Tax Withholding.  The Bank shall withhold
any taxes that are required to be withheld from the benefits provided under this
Agreement.

 

6.6                                 Applicable Law.  Except to the extent
preempted by the laws of the United States of America, the validity,
interpretation, construction, and performance of this Agreement shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to the principles of conflict of laws of such
state.

 

6.7                                 Unfunded Arrangement.  The Executive’s
beneficiary(ies) are general unsecured creditors of the Bank for the payment of
benefits under this Agreement.  The benefits represent the mere promise by the
Bank to pay benefits.  The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors.  Any insurance on the Executive’s life
is a general asset of the Bank to which the Executive and the Executive’s
beneficiary(ies) have no preferred or secured claim or any other rights
whatsoever.

 

6.8                                 Entire Agreement.  This Agreement
constitutes the entire agreement between the Bank and the Executive concerning
the subject matter hereof.  No rights are granted to the Executive’s
beneficiary(ies) under this Agreement other than those specifically set forth
herein.

 

6.9                                 Administration.  The Bank shall have all
powers that are necessary to administer this Agreement

 

6.10                           Named Fiduciary.  For purposes of the Employee
Retirement Income Security Act of 1974, if applicable, the Bank shall be the
named fiduciary and plan administrator under this Agreement.  The named
fiduciary

 

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may delegate to others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals.

 

6.11                           Severability.  If for any reason any provision of
this Agreement is held invalid, such invalidity shall not affect any other
provision of this Agreement not held invalid, and to the full extent consistent
with law each such other provision shall continue in full force and effect.  If
any provision of this Agreement is held invalid in part, such invalidity shall
not affect the remainder of such provision, and to the full extent consistent
with law the remainder of such provision shall, together with all other
provisions of this Agreement, continue in full force and effect.

 

6.12                           Headings.  The captions and section headings in
this Agreement are included solely for convenience of reference and shall not
affect the meaning or interpretation of any provision of this Agreement.

 

6.13                           Notices.  All notices, requests, demands, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered mail,
return receipt requested, with postage prepaid, to the following addresses or to
such other address as either party may designate by like notice.

 

(a)

If to the Bank, to:

 

Board of Directors

 

Western Sierra National Bank

 

 

 

 

 

 

 

 

(b)

If to the Executive, to:

 

 

 

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

 

6.14                           Cooperation.  Executive agrees to cooperate to
facilitate the acquisition of life insurance policy and shall execute such
documents and undergo medical examinations or tests as required by insurer. 
Executive further agrees that Bank may, from time to time, wish to exchange the
life insurance policy on Executive’s life for another life insurance policy
insuring Executive’s life.  Provided that the policy is replaced (or intended to
be replaced) with a comparable life insurance policy, Executive agrees to
provide medical information and cooperate with medical insurance-related testing
required by a prospective insurer for implementing the policy or, if necessary,
for modifying or updating to a comparable insurer.

 

IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have
executed this Agreement as of the day and year first written above.

 

EXECUTIVE

 

BANK

 

 

Western Sierra National Bank

 

 

 

/s/ Anthony J. Gould

 

By:

   /s/   Pat J. Rusnak

 

Anthony J. Gould

 

 

Pat J. Rusnak

EVP / Chief Financial Officer

 

 

EVP/ Chief Operating Officer

 

 

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