Exhibit 10.59

 

SALARY CONTINUATION AGREEMENT

 

This Agreement is made and entered into this 1st day of June, 2002, by and
between Western Sierra National Bank, a national banking association (the
“Employer”), and Phillip S. Wood, an individual residing in the State of
California (hereinafter referred to as the “Executive”).

 

RECITALS

 

WHEREAS, the Executive is an employee of the Employer and is serving as its
Senior Vice President and Chief Administrative Officer;

 

WHEREAS, the Executive’s experience and knowledge of the affairs of the Employer
and the banking industry are extensive and valuable;

 

WHEREAS, it is deemed to be in the best interests of the Employer to provide the
Executive with certain salary continuation benefits, on the terms and conditions
set forth herein, in order to reasonably induce the Executive to remain in the
Employer’s employment; and

 

WHEREAS, the Executive and the Employer wish to specify in writing the terms and
conditions upon which this additional compensatory incentive will be provided to
the Executive, or to the Executive’s spouse or the Executive’s designated
benefi­ciaries, as the case may be;

 

NOW, THEREFORE, in consideration of the services to be performed in the future,
as well as the mutual promises and covenants contained herein, the Executive and
the Employer agree as follows:

 

AGREEMENT

 

1.                                      Terms and Definitions.

 

1.1.                            Administrator.  The Employer shall be the
“Administrator” and, solely for the purposes of ERISA, the “fiduciary” of this
Agreement where a fiduciary is required by ERISA.

 

1.2.                            Annual Benefit.  The term “Annual Benefit” shall
mean an annual sum of thirty thousand dollars ($30,000) multiplied by the
Applicable Percentage (defined below) and then reduced to the extent required:
(i) under the other provisions of this Agreement; (ii) by reason of the lawful
order of any regulatory agency or body having jurisdiction over the Employer;
and (iii) in order for the Employer to properly comply with any and all
applicable state and federal laws, including, but not limited to, income,
employment and disability income tax laws (eg., FICA, FUTA, SDI).

 

1.3.  Applicable Percentage.  The term “Applicable Percentage” shall mean that
percentage listed on Schedule “A” attached hereto which is adjacent to the
number of complete years (with a “year” being the performance of personal
services for or on behalf of the Employer as an employee for a period of 365
days) which have elapsed starting from the Effective Date of this Agreement and
ending on the date the Executive’s employment is terminated for purposes of this
Agreement.

 

1.4.                            Beneficiary.  The term “beneficiary” or
“designated beneficiary” shall mean the person or persons whom the Executive
shall designate in a valid Beneficiary Designation, a copy of which is attached
hereto as Exhibit “B”, to receive the benefits provided hereunder.  A
Beneficiary Designation shall be valid only if it is in the form attached hereto
and made a part hereof and is received by the Administrator prior to the
Executive’s death.

 

1.5.                            The Code.  The “Code” shall mean the Internal
Revenue Code of 1986, as amended (the “Code”).

 

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1.6.                            Disability/Disabled.  The term “Disability” or
“Disabled” shall have the same meaning given such term in the principal
disability insurance policy covering the Executive, which is incorporated herein
by reference.  In the event the Executive is not covered by a disability policy
containing a definition of “Disability” or “Disabled,” these terms shall mean an
illness or incapacity which, having continued for a period of one hundred and
eighty (180) consecutive days, prevents the Executive from adequately performing
the Executive’s regular employment duties.  The determination of whether the
Executive is Disabled shall be made by an independent physician selected by
mutual agreement of the parties.

 

1.7.                            Effective Date.  The term “Effective Date” shall
mean May 1 2002.

 

1.8.                            ERISA.  The term “ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended.

 

1.9.                            Plan Year.  The term “Plan Year” shall mean the
Employer’s calendar year.

 

1.10.                     Retirement.  The term “Retirement” or “Retires” shall
refer to the date on which the Executive attains the age of at least sixty-six
(66) and acknowledges in writing to the Employer to be the last day he will
provide any significant personal services, whether as an employee, director or
independent consultant or contractor, to the Employer.  For purposes of this
Agreement, the phrase “significant personal services” shall mean more than ten
(10) hours of personal services rendered to one or more individuals or entities
in any thirty (30) day period.

 

1.11                        Sale of Business.  The term “Sale of Business” shall
mean any (i) merger, consolidation or reorganization of the Employer’s parent or
Western Sierra Bancorp (“Parent”) in which (A) the Parent does not survive or
(B) the Parent survives with a resulting change in beneficial ownership of the
Parent of more than 50% of the voting shares of the Parent, (ii) sale of more
than 50% of the beneficial ownership of the voting shares of the Parent to any
person or group of persons acting in concert, or (iii) transfer or sale of more
than 50% of the total market value of the assets of the Parent as reflected in
the most recent published balance sheet of the Parent to another corporation
that is not a wholly-owned subsidiary of the Parent.  Notwithstanding anything
to the contrary, the merger of Employer with the Parent or any subsidiary of the
Parent shall not be deemed a “Sale of Business.”

 

1.12.                     Surviving Spouse.  The term “Surviving Spouse” shall
mean the person, if any, who shall be legally married to the Executive on the
date of the Executive’s death.

 

1.13.                     Termination for Cause.  The term “Termination for
Cause” shall mean the termination of the Executive by the Employer upon the
occurrence of any of the following events:

 

(i) the Executive is convicted of illegal activity by a court of competent
jurisdiction or pleads guilty to or nolo contendere to illegal activity, which
activity materially adversely affects the  Employer’s reputation in the
community or which evidences the lack of the Executive’s fitness or ability to
perform the Executive’s duty as determined by the Board of Directors in good
faith;

 

(ii) the Executive has committed any illegal or dishonest act which would cause
termination of coverage under the Employer’s Bankers’ Blanket Bond as to the
Executive, as distinguished from termination of coverage as to the Employer as a
whole;

 

(iii) the Executive materially fails to perform, or habitually neglects, the
Executive’s duties or commits a material act of malfeasance or misfeasance in
connection therewith;

 

(iv) an action is commenced by any bank regulatory agency having jurisdiction,
to remove or suspend the Executive from office, or a cease and desist order
under 12 U.S.C. 1818(b) or any similar Federal or state statute is issued
against the Executive or the Employer which calls for the Executive’s suspension
or removal from office;

 

(v) deliberate or repeated disregard of the policies and rules of the Employer
as adopted by the Employer’s board of directors;

 

(vi) unauthorized use or disclosure of any of the trade secrets or confidential
information of the Employer or Parent;

 

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(vii) competition with the Employer or the Parent or any of Parent’s
subsidiaries (collectively referred to “WSB Group”), inducement of any customer
of any entity in the WSB Group to breach a contract with any entity in the WSB
Group or inducement of any employee or agent of any entity in the WSB Group to
terminate his or her employment or agency relationship with such entity in the
WSB Group;

 

(vii) gross negligence adversely impacting the Employer or the Parent; or

 

(viii) willful breach of this Agreement or any other willful misconduct.

 

2.                                      Scope, Purpose and Effect.

 

2.1.                            Contract of Employment.  Although this Agreement
is intended to provide the Executive with an additional incentive to remain in
the employ of the Employer, this Agreement shall not be deemed to constitute a
contract of employment between the Executive and the Employer nor shall any
provision of this Agreement restrict or expand the right of the Employer to
terminate the Executive’s employment.  This Agreement shall have no impact or
effect upon any separate written employment agreement which the Executive may
have with the Employer, it being the parties’ intention and agreement that
unless this Agreement is specifically referenced in said employment agreement
(or any modification thereto), this Agreement (and the Employer’s obligations
hereunder) shall stand separate and apart and shall have no effect upon, nor be
affected by, the terms and provisions of said employment agreement.

 

2.2.                            Fringe Benefit.  The benefits provided by this
Agreement are granted by the Employer as a fringe benefit to the Executive and
are not a part of any salary reduction plan or any arrangement deferring a bonus
or a salary increase.  The Executive has no option to take any current payments
or bonus in lieu of the benefits provided by this Agreement.

 

3.                                      Payments Upon or After Retirement.

 

3.1.                            Payments Upon Retirement.  If the Executive
shall remain in the continuous employment of the Employer until Retirement, the
Executive shall be entitled to be paid the Annual Benefit, with the Applicable
Percent equal to 100% for a period of fifteen (15) years, in one hundred eighty
(180) equal monthly installments, with each installment to be paid on the first
day of each month, beginning with the month following the month in which the
Executive Retires or upon such later date as may be mutually agreed upon in
writing by the Executive and the Employer in advance of said Retirement Date.

 

3.2.                            Payments in the Event of Death After
Retirement.  The Employer and Executive  agree that if the Executive Retires,
but shall die before receiving all of the one hundred eighty (180) monthly
payments described in paragraph 3.1 above, the Employer will make the remaining
monthly payments, undiminished and on the same schedule as if the Executive had
not died, to the Executive’s designated beneficiary.  If a valid Beneficiary
Designation is not in effect, then the remaining amounts due to the Executive
under the term of this Agreement shall be paid to the Executive’s Surviving
Spouse.  If the Executive leaves no Surviving Spouse, the remaining amounts due
to the Executive under the terms of this Agreement shall be paid to the duly
qualified personal representative, executor or administrator of the Executive’s
estate.

 

4.                                      Payments in the Event Death or
Disability Occurs Prior to Retirement.

 

4.1.                            Payments in the Event of Death Prior to
Retirement.  In the event the Executive should die while actively employed by
the Employer at any time after the Effective Date of this Agreement, but prior
to Retirement, the Employer agrees to pay the Annual Benefit with the Applicable
Percentage equal to 100% for a period of fifteen (15) years in one hundred
eighty (180) equal monthly installments, with each installment to be paid on the
first of each month beginning with the month following the Executive’s death, to
the Executive’s designated beneficiary.  If a valid Beneficiary Designation is
not in effect, then the amounts due to the Executive under the terms of this
Agreement shall be paid to the Executive’s Surviving Spouse.  If the Executive
leaves no Surviving Spouse, the amounts due to the Executive under the terms of
this Agreement shall be paid to the duly qualified personal representative,
executor or administrator of the Executive’s estate.

 

4.2.                            Payments in the Event of Disability Prior to
Retirement.  In the event the Executive becomes Disabled while actively employed
by the Employer at any time after the Effective Date of this Agreement and

 

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remains Disabled at the earliest applicable commencement date of payments
pursuant to this Paragraph 4.2, the Executive shall: (i) continue to be treated
during such period of Disability as being gainfully employed but not actively
employed by the Employer and shall not have any applicable years of service
added during the time of disability for the purpose of determining the Annual
Benefit; and (ii) be entitled to be paid the Annual Benefit, with the Applicable
Percentage as set forth in Schedule A and as determined by the applicable years
of service at the time of disability, for fifteen (15) years in one hundred
eighty (180) equal monthly installments, with each installment to be paid on the
first day of each month, beginning with the month following the earlier of (1)
the month in which the Executive attains sixty-six (66) years of age; or (2) the
date upon which the Executive is no longer entitled to receive Disability
benefits under the Executive’s principal Disability insurance policy and does
not, at such time, return to and thereafter fulfill the responsibilities
associated with the employment position held with the Employer prior to becoming
Disabled by reason of such Disability continuing.

 

The Employer agrees that if the Executive shall die before receiving all of the
one hundred eighty (180) monthly payments described in this paragraph 4.2, the
Employer will make the remaining monthly payments to Executive’s designated
beneficiary.  If a valid beneficiary designation is not in effect, then the
remaining payments due to Executive shall be paid to Executive’s Surviving
Spouse.  If the Executive leaves no Surviving Spouse, the remaining amounts due
to Executive shall be paid to the duly qualified personal representative,
executor, or administrator of the Executive’s estate.

 

If the Executive dies after becoming Disabled and prior to being paid benefits
pursuant to the prior paragraph, the Employer will pay to Executive’s designated
beneficiary the Annual Benefit, with the Applicable Percentage as set forth in
Schedule A and as determined by the applicable years of service at the time of
the Disability, for a period of (15) years in equal monthly installments, with
each installment to be paid on the first day of each month, beginning with the
month following the date of Executive’s death.  If a valid Beneficiary
Designation is not in place, then the payments due to the Executive under this
paragraph shall be paid to the Executive’s Surviving Spouse.  If Executive
leaves no Surviving Spouse, the payments due to Executive under this paragraph
shall be paid to the duly qualified personal representative, executor, or
administrator of the Executive’s estate.

 

5.                                      Payments in the Event Employment is
Terminated Other than by Death, Disability, Termination for Cause or Retirement.

 

As indicated in Paragraph 2 above, the Employer reserves the right to terminate
the Executive’s employment, with or without cause but subject to any written
employment agreement which may then exist, at any time prior to the Executive’s
Retirement.  In the event that the employment of the Executive shall be
terminated for any reason, including voluntary termination by the Executive, but
other than by reason of (i) Disability except as provided in Paragraph 4.2, (ii)
death, (iii) Termination for Cause, (iv) Retirement or (v) termination for Sale
of Business, the Executive or his legal representative shall be entitled to be
paid the Annual Benefit, with the Applicable Percentage as set forth in Schedule
A and as determined by the applicable years of service at the time of
termination of employment with the Employer, for a period of 15 years in 180
equal monthly installments, with each installment to be paid on the first day of
each month, beginning with the month following the month in which the Executive
terminates employment and attains age 66, provided however in the event the
Executive dies before receiving all of the 180 payments, the Employer agrees to
make the payments, undiminished and on the same schedule as if the Executive had
not died, to the Executive’s designated beneficiary and if a valid Beneficiary
Designation is not in place, then the payments shall be paid to the Executive’s
Surviving Spouse, and if there is neither a valid Beneficiary Designation nor
Surviving Spouse, the payments shall be paid to the duly qualified personal
representative, executor, or administrator of the Executive’s estate.  In the
event Executive is entitled to benefit payments pursuant to this Paragraph 5 and
dies prior to age 66, then such benefits, undiminished and on the same schedule
as if the Executive had not died, are to be paid beginning with the month
following the Executive’s death to Executive’s designated beneficiary and if a
valid Beneficiary Designation is not in place, then the payments shall be paid
to the Executive’s Surviving Spouse, and if there is neither a valid Beneficiary
Designation nor Surviving Spouse, the payments shall be paid to the duly
qualified personal representative, executor, or administrator of the Executive’s
estate.

 

Notwithstanding anything to the contrary, the Executive shall not be entitled to
be paid any benefit pursuant to the prior paragraph if Executive voluntarily
terminates employment with the Employer prior to the end of the second
anniversary of the Effective Date.

 

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5.1                               Termination in a Sale of Business.  In the
event there is a Sale of Business and the Executive does not have a written
agreement in place for continued employment for a term of at least two years
beginning from the time of the completion of the Sale of Business, in a position
at least equivalent to Executive’s position and at least at the same then base
salary of Executive, then the Executive shall be entitled to be paid in cash in
a lump sum on the date of the consummation of the Sale of Business, the present
value of the aggregate amount of the Annual Benefit, with the Applicable
Percentage as set forth in Schedule A and as determined by the applicable years
of service of the Executive at the time of the consummation of the Sale of
Business plus an additional three years of service, being paid for a period of
fifteen (15) years in one hundred eighty (180) monthly installments beginning on
the first day of the month following the consummation of the Sale of Business. 
The present value of the amount shall be determined using the long term monthly
Applicable Federal Rate at the time of the consummation of the Sale of Business.

 

Notwithstanding the prior paragraph, no payment shall be made to Executive
pursuant to this Agreement to the extent that such payment when aggregated with
all other payments considered for purposes of calculating a parachute payment
results in an excess parachute payment as defined under Section 280G of the
Code.

 

If the Internal Revenue Service or any other tax authority makes any claim,
demand or assessment in any form based directly or indirectly, in whole or in
part, on the allegation that any payment under this Agreement and/or any other
payment by Employer to or for the benefit of the Executive at any time
constitutes a “parachute payment” under Section 280G of the Code or any similar
or successor provision of federal or state law, Executive agrees that Employer,
its successors and assigns shall have no obligation, whether for defense,
indemnification, reimbursement or otherwise, with respect to such claim, demand
or assessment.

 

Notwithstanding anything to the contrary, no benefit payments provided in this
Paragraph 5.1 shall be made to Executive, Executive’s designated beneficiary,
Surviving Spouse or Executive’s estate if the Executive is entitled to benefits
provided by any other Paragraph of this Agreement.

 

6.                                      Termination for Cause.

 

Notwithstanding anything to the contrary, in the event the termination of
employment of the Executive is Termination for Cause as defined in Paragraph
1.13, the Executive shall not be entitled to any benefits pursuant to this
Agreement.

 

7.                                      No Ownership Rights to the Employer’s
Assets.

 

The Employer reserves the right to determine, in its sole and absolute
discretion, whether, to what extent and by what method, if any, to provide for
the payment of the amounts which may be payable to the Executive, the
Executive’s spouse or the Executive’s beneficiaries under the terms of this
Agreement (“Benefits”).  The rights of the Executive or any beneficiary of the
Executive under this Agreement shall be solely those of an unsecured creditor of
the Employer.

 

In the event that the Employer, in its sole and absolute discretion, elects to
acquire an insurance policy, an annuity or any other asset to recoup the costs
or any portion thereof of the Benefits, then such insurance policy, annuity or
other asset shall not be deemed to be held under any trust for the benefit of
the Executive or his beneficiaries or to be security for the performance of the
obligations of the Employer under this Agreement, but shall be, and remain, a
general unpledged, unrestricted asset of the Employer.  The Executive and his
beneficiaries shall have no rights whatsoever with respect to, or any claim
against, any such insurance policy, annuity or other asset.  In connection with
the Employer electing to acquire any such insurance policy or annuity, the
Executive agrees to cooperate to facilitate such acquisition, and pursuant
thereto shall execute such documents and undergo such medical examinations or
tests as the Employer may reasonably request.

 

8.                                      Claims Procedure.

 

The Employer shall, but only to the extent necessary to comply with ERISA, be
designated as the named fiduciary under this Agreement and shall have authority
to control and manage the operation and administration of this Agreement. 
Consistent therewith, the Employer shall make all determinations as to the
rights to benefits under this Agreement.  Any decision by the Employer denying a
claim by the Executive, the Executive’s spouse, or the Executive’s bene­ficiary
for benefits under this Agreement shall be stated in writing and delivered or
mailed, via registered or certified mail, to the Executive, the Executive’s
spouse or the Execu­tive’s beneficiary, as the case may

 

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be.  Such decision shall set forth the specific reasons for the denial of a
claim.  In addition, the Employer shall provide the Executive, the Executive’s
spouse or the Executive’s beneficiary with a reasonable opportunity for a full
and fair review of the decision denying such claim.

 

9.                                      Status of an Unsecured General Creditor.

 

Notwithstand­ing anything contained herein to the contrary: (i) neither the
Executive, the Executive’s spouse nor the Executive’s bene­ficiary shall have
any legal or equitable rights, interests or claims in or to any specific
property or assets of the Employer; (ii) none of the Employer’s assets shall be
held in or under any trust for the benefit of the Executive, the Executive’s
spouse or the Executive’s beneficiary or held in any way as security for the
fulfillment of the obligations of the Employer under this Agreement; (iii) all
of the Employer’s assets shall be and remain the general unpledged and
unrestricted assets of the Employer; (iv) the Employer’s obligation under this
Agreement shall be that of an unfunded and unsecured promise by the Employer to
pay money in the future; and (v) the Executive, the Executive’s spouse and the
Executive’s beneficiary shall be unsecured general creditors with respect to any
benefits which may be payable under the terms of this Agreement.

 

10.                               Covenant Not to Interfere.

 

The Executive agrees not to take any action which prevents the Employer from
collecting the proceeds of any life insurance policy which the Employer may
happen to own at the time of the Executive’s death and of which the Employer is
the designated beneficiary.

 

11.                               Miscellaneous.

 

11.1.  Opportunity to Consult with Independent Counsel.  The Executive
acknowledges that he has been afforded the opportunity to consult with
independent counsel of his choosing regarding both the benefits granted to him
under the terms of this Agreement and the terms and conditions which may affect
the Executive’s right to these benefits.  The Executive further acknowledges
that he has read, understands and consents to all of the terms and conditions of
this Agreement, and that he enters into this Agreement with a full understanding
of its terms and conditions.

 

11.2.  Arbitration of Disputes.  All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. (“JAMS”),
located in the location nearest to Cameron Park.  In the event JAMS is unable or
unwilling to conduct the arbitration provided for under the terms of this
Paragraph, or has discontinued its business, the parties agree that a
repre­sentative member, selected by the mutual agreement of the parties, of the
American Arbitration Association (“AAA”), located in or nearest to Cameron
Park., shall conduct the binding arbitration referred to in this Paragraph. 
Notice of the demand for arbitration shall be filed in writing with the other
party to this Agreement and with JAMS (or AAA, if necessary).  In no event shall
the demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations.  The arbitration shall
be subject to such rules of procedure used or established by JAMS, or if there
are none, the rules of procedure used or established by AAA.  Any award rendered
by JAMS or AAA shall be final and binding upon the parties, and as applicable,
their respective heirs, benefici­aries, legal representatives, agents,
successors and assigns, and may be entered in any court having jurisdiction
thereof.  The obligation of the parties to arbitrate pursuant to this clause
shall be specifically enforceable in accordance with, and shall be conducted
consistently with, the provisions of Title 9 of Part 3 of the California Code of
Civil Procedure.  Any arbitration hereunder shall be conducted in the Sacramento
area, unless otherwise agreed to by the parties.

 

11.3.  Attorneys’ Fees.  In the event of any arbitration or litigation
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys’ fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein. 
The “prevailing party” means the party determined by the arbitra­tor(s) or
court, as the case

 

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may be, to have most nearly prevailed, even if such party did not prevail in all
matters, not necessarily the one in whose favor a judgment is rendered.

 

11.4.  Notice.  Any notice required or permitted of either the Executive or the
Employer under this Agreement shall be deemed to have been duly given, if by
personal delivery, upon the date received by the party or its authorized
representative; if by facsimile, upon transmission to a telephone number
previ­ously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

 

If to the Employer:

 

Western Sierra National Bank

4080 Plaza Goldorado Circle

Cameron Park, California 95682

Attention: Charles Bacchi

Chairman of the Board

 

If to the Executive:

 

Phillip S. Wood

Home address

Folsom, California

 

11.5.  Assignment.  Neither the Executive, the Executive’s spouse, nor any other
beneficiary under this Agreement shall have any power or right to transfer,
assign, hypothecate, modify or otherwise encumber any part or all of the amounts
payable hereunder, nor, prior to payment in accordance with the terms of this
Agreement, shall any portion of such amounts be: (i) subject to seizure by any
creditor of any such beneficiary, by a proceeding at law or in equity, for the
payment of any debts, judgments, alimony or separate maintenance obligations
which may be owed by the Executive, the Executive’s spouse, or any designated
beneficiary; or (ii) transferable by operation of law in the event of
bankruptcy, insolvency or otherwise.  Any such attempted assignment or transfer
shall be void and shall terminate this Agreement, and the Employer shall
thereupon have no further liability hereunder.

 

11.6.  Binding Effect/Merger or Reorganization.  This Agreement shall be binding
upon and inure to the benefit of the Executive and the Employer and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns.  Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement.  Upon
the occurrence of such event, the term “Employer” as used in this Agreement
shall be deemed to refer to such surviving or suc­cessor firm, person, entity or
corporation.

 

11.7.  Nonwaiver.  The failure of either party to enforce at any time or for any
period of time any one or more of the terms or conditions of this Agreement
shall not be a waiver of such term(s) or condition(s) or of that party’s right
thereafter to enforce each and every term and condition of this Agreement.

 

11.8.  Partial Invalidity.  If any term, provision, covenant or condition of
this Agreement is determined by an arbitrator or a court, as the case may be, to
be invalid, void, or unenforceable, such determination shall not render any
other term, provision, covenant or condition invalid, void or unen­forceable,
and the Agreement shall remain in full force and effect notwithstanding such
partial invalidity.

 

11.9.  Entire Agreement.  This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect thereto.  Each party to this
Agreement acknowledges that no other representations, inducements, promises or
agree­ments, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding on either party.

 

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11.10.  Modifications.  Any modification of this Agreement shall be effective
only if it is in writing and signed by each party or such party’s authorized
representative.

 

11.11.  Paragraph Headings.  The paragraph headings used in this Agreement are
included solely for the convenience of the parties and shall not affect or be
used in connection with the interpretation of this Agreement.

 

11.12.  No Strict Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.

 

11.13.  Governing Law.  The laws of the State of California, other than those
laws denominated choice of law rules, and, where applicable, the rules and
regulations of the Office of the Comptroller of the Currency or any other
regulatory agency or governmental authority having jurisdiction over the
Employer, shall govern the validity, interpretation, construction and effect of
this Agreement.

 

12.  Payment of Benefits Subject to Executive Not Competing with Employer

 

Notwithstanding anything to the contrary, the benefits payable to Executive
pursuant to this Agreement are conditioned upon the Executive not working as an
employee, independent contractor or consultant of or for a financial institution
located within a 35 mile radius of the head office of Employer for a period of
one year after Executive terminates employment with Employer.  In the event
Executive breaches such condition, Employer shall immediately terminate any and
all remaining payments for benefits due Executive or Executive’s beneficiaries
pursuant to this Agreement, and Employer shall have no liability to Executive or
Executive’s beneficiaries for any benefits or payments pursuant to this
Agreement.  Notwithstanding the foregoing, in the event of a Sale of Business,
this paragraph shall be of no force or effect.

 

13.  Right of the Employer to Pay a Lump Sum.

 

Unless expressly provided for herein, the Employer shall at its sole discretion
have the right to pay in a lump sum the then present value using the long term
monthly Applicable Federal Rate at such time of all payments vested and due the
Executive or the Executive’s beneficiary pursuant to this Agreement.

 

IN WITNESS WHEREOF, the Employer and the Executive have executed this Agreement
on the date first above-written in the City of Cameron Park, California.

 

Western Sierra National Bank

Phillip S. Wood

“Employer”

“Executive”

 

 

 

 

/s/ Charles Bacchi

 

/s/ Phillip S. Wood

 

Charles Bacchi

 

Chairman of the Board

 

 

8

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SCHEDULE A

 

NUMBER OF COMPLETE
YEARS OF SERVICE

 

APPLICABLE
PERCENTAGE

 

 

 

 

 

1

 

12.5

%

 

 

 

 

2

 

25.0

%

 

 

 

 

3

 

37.5

%

 

 

 

 

4

 

50.0

%

 

 

 

 

5

 

62.5

%

 

 

 

 

6

 

75.0

%

 

 

 

 

7

 

87.5

%

 

 

 

 

8 or more

 

100.0

%

 

9

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SCHEDULE B

 

BENEFICIARY DESIGNATION

 

TO:

The Administrator of

 

Western Sierra National Bank

 

Salary Continuation Agreement

 

Pursuant to the provisions of my Salary Continuation Agreement with Western
Sierra National Bank permitting the designation of a beneficiary or
beneficiaries by a participant, I hereby designate the following persons and
entities as primary and secondary beneficiaries of any benefit under said
Agreement payable by reason of my death:

 

NOTE:

To name a trust as beneficiary, please provide the name of the trustee and the
exact date of the trust agreement.

 

In the event the primary beneficiary is not the spouse of the Executive, the
spouse of the Executive will need to sign the Spousal Consent below and such
signature must be notarized.

 

Primary Beneficiary:

 

Beneficiary named

 

 

 

 

Name

 

Address

 

Relationship

 

Secondary (Contingent) Beneficiary:

 

Secondary Beneficiary named

 

 

 

 

Name

 

Address

 

Relationship

 

THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ANY PRIOR DESIGNATION OF PRIMARY BENEFICIARIES AND SECONDARY BENEFICIARIES IS
HEREBY REVOKED.

 

The Administrator shall pay all sums payable under the Agreement by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Administrator shall pay all amounts in
accordance with the terms of my Salary Continuation Agreement. In the event that
a named beneficiary survives me and dies prior to receiving the entire benefit
payable under said Agreement then and in that event, the remaining unpaid
benefit payable according to the terms of my Salary Continuation Agreement shall
be payable to the personal representatives of the estate of said beneficiary who
survived me but died prior to receiving the total benefit provided by my Salary
Continuation Agreement.

 

 

 

Phillip S. Wood

 

 

 

“Executive”

 

 

 

 

 

 

 

 

 

Dated:

7/2/02

 

/s/ Phillip S. Wood

 

 

10

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