Exhibit 10.38

(American River Bankshares LOGO) [arb002_v1.jpg]  

3100 Zinfandel Drive, Ste. 450, Rancho Cordova, CA 95670 | Tel: (916) 231-6700 |
Fax: (916) 851-0123

  

October 27, 2017

 

Mr. David Ritchie

31487 La Pasita

San Juan Capistrano, California

92675

 

Re:          Employment Agreement

 

Dear Mr. Ritchie:

 

This is your EMPLOYMENT AGREEMENT (the “Agreement”) with American River
Bankshares, a California corporation (“AMRB”), and American River Bank, a
California banking corporation (the “Bank”) (together, the “Company”). It sets
forth the terms of your employment with the Company, effective as of the
Effective Date (as defined below).

 

1.Your Position, Performance and Other Activities.

 

(a)          Position. You will be employed in the position of President and
Chief Executive Officer (“CEO”) of each of AMRB and the Bank and will report
directly to the Company’s Board of Directors (the “Board”). As of the Effective
Date, you will be appointed as a member of the Board. The Company will use all
reasonable efforts to cause you to be nominated for re-election to the Board
each time your Board term expires during the Term (as defined in Section 2). You
agree to serve as a member of the Board, as well as a member of any Board
committee to which you may be elected or appointed. You also agree that, unless
otherwise agreed to by you and the Company, you will be deemed to have resigned
from the Board and each Board committee voluntarily, without any further action
by you, as of the end of the Term or upon a termination of your employment with
the Company for any reason.

 

(b)          Authority, Responsibilities and Reporting. You will have the
authority, responsibilities and reporting relationships that correspond to your
position, including any particular authority, responsibilities and reporting
relationships consistent with your position that the Board may assign to you
from time to time and you shall perform your duties hereunder in compliance with
such policies of the Company as may be adopted from time to time.

 

(c)          Performance. During your employment, you will devote substantially
all of your business time and attention to the Company and will use good faith
efforts to discharge your responsibilities under this Agreement to the best of
your abilities. During the Term, your place of performance will be the
headquarters of the Company or such other place as the Board determines. Your
performance will be reviewed by the Board on an on-going basis and no less
frequently than annually.

 

(d)          Other Activities. During your employment, you will not render any
business, commercial or professional services to any party other than the
Company. However, you may (i) serve on corporate, civic or charitable boards,
(ii) manage personal investments, and (iii) deliver lectures, fulfill speaking
engagements and teach at educational institutions, so long as (A) these
activities do not interfere with your performance of your responsibilities under
this Agreement, (B) any service on a corporate, civic or charitable board is
disclosed contemporaneously upon commencement and then at least annually to the
Board and (C) no such services are provided to any competitor of the Company.

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2.Term of Your Employment.

 

(a)          Term; Renewal. Your employment under this Agreement shall be for a
term of two (2) years commencing on November 6, 2017 (the “Effective Date”) and
ending upon the earlier of (i)the close of business on November 5, 2019 (the
“End Date”), and (ii) the close of business on the effective date of termination
of your employment pursuant to Section 5 (the “Term”). On the End Date and on
each subsequent anniversary of the End Date thereafter, other than an End Date
occurring subsequent to a Change in Control Event (each, a “Renewal Date”), the
Term shall automatically renew for an additional one (1) year period, unless
either you or the Company provides the other party with written notice of
non-renewal of the Term at least sixty (60) days prior to the End Date or such
Renewal Date, as applicable. Notwithstanding the foregoing, your employment can
be terminated by either the Company or you providing advance written notice in
accordance with Section 5(e). If you remain employed by the Company following
the expiration of the Term (including pursuant to a non-renewal thereof), except
as otherwise expressly provided herein, your employment relationship with the
Company (if any) shall cease to be governed by the terms and conditions of this
Agreement and shall be on an at-will basis on such terms as may be prescribed by
the Company, unless otherwise agreed to by you and the Company in writing;
provided, however, that the provisions of Section 7 below shall survive the
expiration or termination of the Term in accordance with their terms.

 

(b)          Automatic Extension of Term Following a Change in Control Event. If
a Change of Control Event occurs prior to an End Date, unless a written notice
of non-renewal shall have been provided pursuant to Section 2(a) prior to a
public announcement of any definitive agreement contemplating a Change in
Control Event or a Termination Notice shall have been delivered in accordance
with Section 5(e) pursuant to Section 5(c), the Term then in effect shall
automatically renew for a period equal to 360 days minus the number of days
remaining in the Term then in effect on the effective date of the Change in
Control Event to and including the End Date for such Term.

 

3.Your Compensation.

 

(a)          Salary. During the Term, you will receive a base salary (as
increased from time to time, your “Salary”) payable in accordance with the
Company’s regular payroll practices. The amount of your Salary as of the
Effective Date and through 2018 shall be at the annualized rate of $265,000.
Your Salary will be reviewed at least annually commencing in 2019 and your
Salary may be increased, but not decreased, in the sole discretion of the
independent members of the Board, based on a recommendation from the
Compensation Committee (the “Comp Committee”).

 

(b)          Annual Cash Bonus. You will receive a guaranteed bonus for each of
fiscal years 2017 and 2018 based upon your continued full-time employment in the
fiscal year ending December 31, 2017 and 2018 in the amount of $160,000 payable
on March 1 2018 and 2019, respectively. Commencing with the fiscal year 2019,
you will be eligible to receive an annual bonus (your “Bonus”) for each fiscal
year of the Company commencing with, and based upon your continued employment
in, the fiscal year ending December 31 of the relevant fiscal year, pursuant to
an annual bonus plan. The amount of the Bonus and the performance goals
applicable to the Bonus shall be determined in accordance with the terms and
conditions of said bonus plan as in effect from time to time, as determined by
the independent members of the Board in sole discretion, based on a
recommendation from the Comp Committee.

 

(c)          Equity Based Incentives. Prior to December 31, 2017, you will
receive an award of restricted stock pursuant to the Company’s 2010 Equity
Inventive Plan (the “2010 Equity Plan”) covering a number of shares determined
by dividing the Reference Value (as defined) by the reported closing stock price
of AMRB’s common stock on the NASDAQ Global Select Market (the “Initial
Restricted Stock Award”). The Initial Restricted Stock Award shall be subject to
forfeiture in such amounts and such scheduled lapse as shall be determined by
the Board and such other terms and conditions specified in the 2010 Equity Plan
and the restricted stock award pursuant to which the Initial Restricted Stock
Award is made. The “Reference Value” shall equal the product of the closing
price as reported on the NYSE for a share of your current employer’s common
stock times the verified number of shares of your current employer’s restricted
stock or RSUs held by you on the Effective Date. Commencing in the fiscal year
2018 and thereafter, based upon your continued employment in the relevant fiscal
year ending on December 31 of the relevant fiscal year, you will be eligible to
participate in the 2010 Equity Plan and such additional or successor equity
based incentive plans that may be adopted by the Company from time to time in
such amounts and subject to such terms and conditions as shall be determined in
the discretion of the Board.

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4.Other Employee Benefits. During the Term:

 

(a)          Vacation. You shall be entitled to four (4) weeks (twenty (_20_)
business days) paid vacation per year (prorated for partial years), of which two
weeks shall be taken consecutively, and to such paid holidays as are observed by
the Company from time to time, all in accordance with the Company’s policies and
practices that are applicable to the Company’s senior executives. Unused
vacation will be carried over from year to year and/or paid out as provided in
the Company’s vacation plans and polices in effect from time to time subject to
and in accordance with the Company’s vacation policy in effect from time to time
during the Term.

 

(b)          Business Expenses. You will be reimbursed for all reasonable
business expenses incurred by you in performing your responsibilities under this
Agreement. Reimbursements will be made pursuant to the Company’s normal
practices and procedures for senior executives.Relocation Costs. Recognizing
that you will be relocating your principal residence from Southern California to
Northern California, the Company will reimburse you up to $[50,000] for
reasonable relocation related expenses including moving, storage, and transport
of furniture, fixtures, personal items and vehicles, the cost of temporary
housing in Sacramento County for up to 9 months, and travel for you and your
spouse between Southern and Northern California. Payments will be made against
presentation of written evidence of the incurrence of such costs, including
without limitation invoices, cancelled checks, ticket stubs, etc.

 

(c)          Facilities. You will be provided with office space, facilities,
secretarial support and other business services consistent with your position on
a basis that is at least as favorable as that provided to similarly situated
senior executives of the Company.

 

(d)          Employee Benefit Plans. (i) You shall be eligible to participate in
all incentive plans, practices, policies and programs, and all savings and
retirement plans, policies and programs in effect from time to time, in each
case that are applicable generally to senior executives of the Company; (ii) you
and your eligible family members shall be eligible for participation, at the
Company’s expense, in the welfare benefit plans, practices, policies and
programs (including, if applicable, medical, dental, vision, disability,
employee life, group life and accidental death insurance plans and programs)
maintained for the Company’s senior executives from time to time; provided,
however, that if your participation in such plans and programs at the Company’s
expense would violate applicable law or would result in fines or penalties to
the Company (including, without limitation, pursuant to the Patient Protection
and Affordable Care Act or Section 2716 of the Public Health Service Act or any
other health care law), then you and the Company shall in good faith negotiate
replacement benefits and/or replacement compensation to be paid or provided to
you in lieu of such participation at the Company’s expense; and (iii) you shall
be entitled to such fringe benefits and perquisites as are provided by the
Company to its senior executives from time to time, in accordance with the
policies, practices, and procedures of the Company.

 

(e)          Automobile Allowance. The Company will provide you with an
automobile and will reimburse you the cost of your related automobile expenses,
including automobile insurance thereon, fuel and maintenance.

 

(f)          Liability Insurance. The Company shall maintain (i) a directors’
and officers’ liability insurance policy, or an equivalent errors and omissions
liability insurance policy, and (ii) an employment practices liability insurance
policy. Each such policy shall cover you with scope, exclusions, amounts and
deductibles no less favorable to you than those applicable to the Company’s
senior executive officers and directors on the Effective Date, or any more
favorable as may be available to any other director or senior executive officer
of the Company, while you are employed with the Company.

 

(g)          Indemnification Agreements. Each of AMRB and the Bank agree to
enter into an indemnification agreement with you as of the Effective Date in the
form of agreement included in the AMRB Current Report on Form 8-K, filed with
the Securities and Exchange Commission on January 22, 2010, as Exhibit 99.1 and
99.2, respectively.

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(h)          Deferred Compensation Agreement. You shall be eligible to
participate in the American River Bankshares Deferred Compensation Plan to defer
a portion of your Salary and Bonus on the terms and conditions provided in such
plan.

 

5.Termination of Your Employment.

 

(a)          No Reason Required. You or the Company may terminate your
employment at any time for any reason, or for no reason, subject to compliance
with Section 5(e).

 

(b)          Termination by the Company for Cause.

 

(i)            “Cause” means any of the following:

 

(A)          Your continued failure, either due to willful action or as a result
of gross neglect, to substantially perform your duties and responsibilities to
the Company under this Agreement (other than any such failure resulting from
your incapacity due to physical or mental illness) that, if capable of being
cured, has not been cured within thirty (30) days after written notice is
delivered to you by the Company, which notice specifies in reasonable detail the
manner in which the Company believes you have not substantially performed your
duties and responsibilities;

 

(B)          Your engagement in conduct which is demonstrably and materially
injurious to the Company, or that materially harms the reputation or financial
position of the Company, unless the conduct in question was undertaken in good
faith on an informed basis with due care and with a rational business purpose
and based upon the honest belief that such conduct was in the best interest of
the Company;

 

(C)          Your indictment or conviction of, or plea of guilty or nolo
contendere to, a felony or any other crime involving dishonesty, fraud or moral
turpitude;

 

(D)          Your being found liable in any SEC or other civil or criminal
securities law action or entering any cease and desist order with respect to
such action (regardless of whether or not you admit or deny liability) where the
conduct which is the subject of such action is demonstrably and materially
injurious to the Company;

 

(E)          Your material breach of your fiduciary duties to the Company;

 

(F)          Your (1) obstructing or impeding, (2) endeavoring to influence,
obstruct or impede, or (3) failing to materially cooperate with, any
investigation authorized by the Board or any governmental or self-regulatory
entity (an “Investigation”). However, your failure to waive attorney-client
privilege relating to communications with your own attorney in connection with
an Investigation shall not constitute “Cause”;

 

(G)          Your removing, concealing, destroying, purposely withholding,
altering or by any other means falsifying any material which is requested in
connection with an Investigation;

 

(H)          Your disqualification, bar, prohibition, order or similar
restriction imposed against you by any governmental or self-regulatory authority
from serving as an officer or director of any member of the Company or your loss
of any governmental or self-regulatory license that is reasonably necessary for
you to perform your responsibilities to the Company under this Agreement, if (i)
the disqualification, bar or loss continues for more than 30 days and (ii)
during that period the Company uses its good faith efforts to cause the
disqualification or bar to be lifted or the license replaced. While any
disqualification, bar or loss continues during your employment, you will serve
in the capacity contemplated by this Agreement to whatever extent legally
permissible and, if your employment is not permissible, you will be placed on
leave (which will be paid to the extent legally permissible);

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(I)          Your unauthorized use or disclosure of confidential or proprietary
information or related materials, or your violation of any of the terms of the
Confidentiality Agreements (as defined below) or the Company’s standard
confidentiality policies and procedures, in each case, which results or could
reasonably be expected to result in reputational, economic, financial or other
injury to the Company or its subsidiaries or affiliates;

 

(J)          Your violation, as determined by the Board in good faith, of the
Company’s (1) workplace violence policy or (2) policies on discrimination,
unlawful harassment or substance abuse; or

 

(K)          Your material breach of this Agreement that has not been cured
within thirty (30) days after written notice is delivered to you by the Company,
which notice specifies in reasonable detail the manner in which the Company
believes this Agreement has been breached.

 

For purposes of this definition, no act or omission by you will be “willful”
unless it is made by you in bad faith or without a reasonable belief that your
act or omission was in the best interests of the Company.

 

(c)          Your Termination for Good Reason.

 

(i)            “Good Reason” means the occurrence (without your express written
consent) of any of the following:

 

(A)          a reduction in, or the assignment to you of, duties substantially
inconsistent with your position, authority, responsibilities or status as Chief
Executive Officer of the Company (except in connection with a for Cause
termination);

 

(B)          a change in the principal geographic location at which you must
perform the services under this Agreement of more than 30 miles outside of
Sacramento County, California, exclusive of required business travel; or

 

(C)          material breach by the Company of this Agreement.

 

For purposes of this Agreement, Good Reason shall not be deemed to exist unless
(1) your termination of employment for Good Reason occurs within 90 days
following the initial existence of one of the conditions specified in clauses
(A) through (C) above, (2) you provide the Company with written notice of the
existence of such condition within 60 days after the initial existence of the
condition, and (3) the Company fails to remedy the condition within 30 days
after its receipt of such notice.

 

(d)          Termination on Disability or Death.

 

(i)            The term “Disability” means your absence from your
responsibilities with the Company on a full-time basis for 90 consecutive days
or 180 days in any consecutive 12 month period as a result of incapacity due to
mental or physical illness or injury. If the Company determines in good faith
that your Disability has occurred, the Company may give you a Termination Notice
(as defined below). If within 30 days of the Termination Notice you do not
return to full-time performance of your responsibilities, your employment will
terminate. If you do return to full-time performance in that 30-day period, the
Termination Notice will be cancelled for all purposes of this Agreement. Except
as provided in this Section 5(d), your incapacity due to mental or physical
illness or injury will not affect the Company’s obligations under this
Agreement.

 

(ii)           Your employment will terminate automatically on your death.

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(e)          Advance Notice Generally Required.

 

(i)            To terminate your employment, either you or the Company must
provide a Termination Notice to the other. A “Termination Notice” is a written
notice that states the specific provision of this Agreement on which such
termination is based, including, if applicable, the specific clause of the
definition of Cause and a reasonably detailed description of the facts that
permit termination under that clause. The failure to include any fact in a
Termination Notice that contributes to a showing of Cause does not preclude the
Company from asserting that fact in enforcing its rights under this Agreement.

 

(ii)           You and the Company agree to provide 30 days’ advance Termination
Notice of any termination, unless your employment is terminated by the Company
for Cause or because of your Disability or death. Accordingly, the effective
date of termination of your employment will be 30 days after Termination Notice
is given, except that (A) the effective date will be the date of the Company’s
Termination Notice if your employment is terminated by the Company for Cause,
although the Company may provide a later effective date in the Termination
Notice, (B) the effective date will be 30 days after Termination Notice is given
if your employment is terminated because of your Disability, and (C) the
effective date will be the time of your death if your employment is terminated
because of your death. The Company may elect to place you on paid leave for all
or part of the advance Termination Notice period. Notwithstanding the foregoing,
if you give the Company Termination Notice, the Company in its sole discretion
may waive the 30-day notice requirement and accelerate the effective date of
termination of your employment to any earlier date. In the event of a
termination for Good Reason, the provisions of Section 5(c) above shall control
over any inconsistent provisions in this Section 5(e)(ii).

 

(f)          Non-Renewal. Notwithstanding anything contained herein, in no event
shall the expiration of the Term or the Company’s election not to renew or
extend the Term or your employment with the Company constitute a termination of
your employment by the Company without Cause or by you for Good Reason. For the
avoidance of doubt, nothing contained in this Section 5(f) shall preclude or
limit the Company’s ability, in its sole discretion, to pay or provide you with
severance or termination pay and/or benefits in connection with a termination of
your employment upon or following the expiration of the Term or the Company’s
election not to renew or extend the Term.

 

6.The Company’s Obligations in Connection with Your Termination.

 

(a)          General Effect. On termination, your employment will end and the
Company will have no further obligations to you except as provided in this
Section 6.

 

(b)          By the Company Without Cause or by You for Good Reason. If the
Company terminates your employment without Cause or you terminate your
employment for Good Reason, in either case, other than within twelve (12) months
following a “Change in Control” (as defined below), subject to Section 6(f):

 

(i)             The Company will pay you the following as of the end of your
employment: (A) your unpaid Salary through the date of termination, (B) your
Salary for any accrued but unused vacation, and (C) any accrued expense
reimbursements and other cash entitlements (together, your “Accrued
Compensation”), in each case, as and when such amounts would otherwise been paid
had your employment not been terminated or such earlier time as may be required
by law. In addition, the Company will timely pay you any amounts and provide to
you any benefits that are required, or to which you are entitled, under any
plan, contract or arrangement of the Company (together, the “Other Benefits”).

 

(ii)            The Company will pay you an amount equal to one year of your
then-current annual Salary, to be paid on the Company’s regular pay cycle and
through the Company’s payroll over a 12-month period commencing on the date of
the termination of employment.

 

(iii)          The Company will pay you an amount equal to a pro-rated portion
of your prior year’s Bonus based on the number of days worked during the year of
termination, payable in a lump-sum within thirty (30) days following the date of
termination of employment.

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(iv)          All outstanding and then unvested stock options, restricted stock
and other equity awards granted to you under any of the Company’s equity
incentive plans (or awards substituted therefore covering the securities of a
successor company) (each, an “Equity Award”) which are at such time subject to
vesting solely based on your continued employment with the Company (each, a
“Time-Vesting Equity Award”) shall be deemed to have vested as if your
employment has continued for one (1) year following the actual termination date.
All other outstanding and unvested Equity Awards (each, a “Performance-Vesting
Equity Award”) shall be treated in accordance with the terms of the plan
document and applicable award agreement governing such Performance-Vesting
Equity Award.

 

(v)           If you timely elect to continue your Company-provided health
insurance coverage pursuant to the federal COBRA law, the Company will pay
directly or, at its election, reimburse you for the cost of such COBRA premiums,
at the same level as you maintain as of the date of termination, through the end
of the COBRA period (18 months), or until such time as you qualify for health
insurance benefits through a new Company, whichever occurs first (the “COBRA
Period”). The reimbursement shall be for 100% of your COBRA premiums, as well as
for your eligible dependents’ COBRA premiums, and the coverage to be provided on
this basis shall be health and dental coverage. Notwithstanding the foregoing,
if (x) any plan pursuant to which such benefits are provided is not, or ceases
prior to the expiration of the period of continuation coverage to be, exempt
from the application of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) under Treasury Regulation Section 1.409A-1(a)(5), or (y)
the Company is otherwise unable to continue to cover you under its group health
plans without incurring penalties (including without limitation, pursuant to the
Patient Protection and Affordable Care Act or Section 2716 of the Public Health
Service Act or any other health care law), then, in either case, an amount equal
to each remaining COBRA premium under such plans shall thereafter be paid to you
in substantially equal monthly installments over the COBRA Period (or the
remaining portion thereof) (the benefits under this Section 6(b)(v), the “COBRA
Benefit”).

 

(c)          By the Company For Cause or by You for Any Reason other than for
Good Reason. If the Company terminates your employment for Cause or you
terminate your employment for any reason other than for Good Reason as set forth
in Section 6(b) or 6(e), the Company will pay your Accrued Compensation and
provide your Other Benefits, as and when such amounts would otherwise been paid
had your employment not been terminated or such earlier time as may be required
by law.

 

(d)          Your Disability or Death. If your employment terminates because of
Disability or death, the Company will pay or provide you or your estate (1) your
Accrued Compensation and your Other Benefits, as and when such amounts would
otherwise been paid had your employment not been terminated or such earlier time
as may be required by law, and (2) subject to Section 6(f), an amount equal to a
pro-rated portion of your prior year’s Bonus based on the number days worked
during the year of termination, payable in a lump-sum within thirty (30) days
following the date of termination of employment. In such event, all Equity
Awards granted to you after the Effective Date shall be treated as provided in
Section 6(b)(iv).

 

(e)          Change in Control; Termination in Connection with a Change in
Control. If within twelve (12) months following a Change in Control, the Company
terminates your employment without Cause or you terminate your employment for
Good Reason, in either case, subject to Section 6(f):

 

(i)          The Company will pay you your Accrued Compensation and provide your
Other Benefits, as and when such amounts would otherwise have been paid had your
employment not been terminated or such earlier time required by law.

 

(ii)          In lieu of the amounts set forth in Sections 6(b)(ii) and (iii)
above, the Company will pay you an amount equal to two (2) times the sum of (a)
your then-current annual Salary and (b) the average of your annual Bonus for the
full fiscal years during which you provide service hereunder up to the three
year average of your annual Bonus for the three fiscal years prior to the year
in which the Change of Control occurs, payable in a lump-sum within thirty (30)
days following the date of termination.

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(iii)          The Company shall provide you with the COBRA Benefit on the terms
and conditions set forth in Section 6(b)(v) above.

 

(iv)          In the event of any Change in Control, (a) your Time-Vesting
Equity Awards shall fully and automatically vest as of the date of such Change
in Control and (b) your Performance-Vesting Equity Awards shall be treated in
accordance with the terms of the plan document and applicable award agreement
governing such Performance-Vesting Equity Award.

 

(v)          For purposes of this Agreement, a “Change in Control” shall mean
any transaction or series of related transactions as a result of which:

 

(A)          the Company consummates a reorganization, merger or consolidation,
or sale or other disposition of all or substantially all of its assets (each a
“Business Combination”), in each case, unless immediately following the
consummation of such Business Combination all of the following conditions are
satisfied:

 

(1)          Persons, who, immediately prior to such Business Combination, were
the beneficial owners of the Outstanding Voting Securities of the Company,
beneficially own (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or
indirectly, more than 50% of the combined voting power of the then Outstanding
Voting Securities of the entity (the “Resulting Entity”) resulting from such
Business Combination (including, without limitation, an entity which as a result
of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries);

 

(2)          no Person beneficially owns (within the meaning of Rule 13d-3),
directly or indirectly, more than 50% of the then outstanding combined voting
power of the Outstanding Voting Securities of the Resulting Entity, except to
the extent that such Person’s beneficial ownership of the Company immediately
prior to the Business Combination exceeded such threshold;

 

(3)          at least one-half of the members of the board of directors of the
Resulting Entity were members of the Board at the time the Board authorized the
Company to enter into the definitive agreement providing for such Business
Combination; or

 

(B)          any Person acquires beneficial ownership (within the meaning of
Rule 13d-3) of more than 50% of the combined voting power (calculated as
provided in Rule 13d-3 in the case of rights to acquire securities) of the then
Outstanding Voting Securities of the Company and has greater beneficial
ownership than the existing stockholders of the Company as of the date hereof;
provided, however, that for purposes of this clause, the following acquisitions
shall not constitute a Change of Control: (x) any acquisition directly from the
Company, (y) any acquisition by the Company, or (z) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any entity controlled by the Company.

 

(C)          “Person” shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act, which definition shall include a “person” within
the meaning of Section 13(d)(3) of the Exchange Act.

 

(D)          “Outstanding Voting Securities” of any Person means the outstanding
securities of such Person entitling the holders thereof to vote generally in the
election of directors of such Person.

 

(vi)          The payments and vesting provisions set forth in this Agreement,
including under this subsection (e), shall: (A) with respect to the treatment of
Equity Awards under this Section 6, take precedence over any conflicting
provision under any award agreement applicable to such Equity Awards, unless
such award agreement is more favorable to you, in which case the award agreement
shall govern; and (B) be subject to the provisions set forth in Annex A.

8

 

(f)          Release. Notwithstanding anything to the contrary herein, the
Company will not be required to make the payments or provide the benefits stated
in this Section 6 (other than your Accrued Compensation and Other Benefits)
unless you execute and deliver to the Company (and do not revoke within the
applicable time period) a general release of claims substantially in the form
attached hereto as Annex B (the “Release”) within thirty (30) days following the
date of termination of your employment. If the Release is executed and delivered
and no longer subject to revocation as provided in the preceding sentence, then
the following shall apply:

 

(i)          To the extent any such cash payment or continuing benefit to be
provided is not “deferred compensation” for purposes of Section 409A of the Code
(“Section 409A”), then such payment or benefit shall commence upon the first
scheduled payment date immediately after the date the Release is executed and no
longer subject to revocation (the “Release Effective Date”). The first such cash
payment shall include payment of all amounts that otherwise would have been due
prior to the Release Effective Date under the terms of this Agreement had such
payments commenced immediately upon the termination of your employment, and any
payments made thereafter shall continue as provided herein. The delayed benefits
shall in any event expire at the time such benefits would have expired had such
benefits commenced immediately following the termination of your employment.

 

(ii)          To the extent any such cash payment or continuing benefit to be
provided is “deferred compensation” for purposes of Section 409A, then such
payments or benefits shall be made or commence upon the thirty-first (31st) day
following the termination of your employment. The first such cash payment shall
include payment of all amounts that otherwise would have been due prior thereto
under the terms of this Agreement had such payments commenced immediately upon
the termination of your employment, and any payments made thereafter shall
continue as provided herein. The delayed benefits shall in any event expire at
the time such benefits would have expired had such benefits commenced
immediately following the termination of your employment.

 

7.Confidentiality; Non-Solicitation; Non-Disparagement.

 

(a)          You acknowledge and agree that you are bound by the Company’s
standard confidentiality policies and procedures in effect from time to time and
any confidentiality or non-disclosure agreements you may execute at the request
of the Company from time to time. Notwithstanding the foregoing, however,
nothing in those policies, procedures, or agreements shall prevent your truthful
testimony as a witness, participation in an Investigation, or disclosure of
wrongdoing to law enforcement or regulatory agencies of competent jurisdiction,
including, without limitation, the Equal Employment Opportunity Commission
(EEOC), National Labor Relations Board (NLRB), Occupational Safety and Health
Administration (OSHA), the Securities and Exchange Commission, the Board of
Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance
Corporation (FDIC) or California Department of Business Oversight (DBO), or
prohibit you from divulging confidential or proprietary information to the
extent required by order of court or agency of competent jurisdiction.

(b)          The Company and you agree that neither of us will make any
statement that would libel, slander or disparage you or any member of the
Company or any of their respective past or present officers, directors,
employees or agents.

 

8.Effect on Other Agreements; Entire Agreement.

 

This Agreement is the entire agreement between you and the Company with respect
to the relationship contemplated by this Agreement and supersedes any earlier
agreement, written or oral, with respect to the subject matter of this
Agreement. You agree that, effective as of the Effective Date, this Agreement
replaces, terminates and supersedes the Prior Agreement, and that the Prior
Agreement is hereby terminated and shall be of no further force or effect. In
entering into this Agreement, no party has relied on or made any representation,
warranty, inducement, promise or understanding that is not in this Agreement.
You hereby acknowledge that you are not subject to any obligation which would in
any way restrict the performance of your duties hereunder.

9

 

9.Successors.

 

(a)          Payments on Your Death. If you die and any amounts are or become
payable under this Agreement, the Company will pay those amounts to your estate.

 

(b)          Assignment by You. You may not assign this Agreement without the
Company’s consent. Also, except as required by law, your right to receive
payments or benefits under this Agreement may not be subject to execution,
attachment, levy or similar process. Any attempt to effect any of the preceding
in violation of this Section 9(b), whether voluntary or involuntary, will be
void.

 

(c)          Assumption by any Surviving Company. Before the effectiveness of
any merger, consolidation, statutory share exchange or similar transaction
(including an exchange offer combined with a merger or consolidation) involving
the Company (a “Reorganization”) or any sale, lease or other disposition
(including by way of a series of transactions or by way of merger,
consolidation, stock sale or similar transaction involving one or more
subsidiaries) of all or substantially all of the Company’s consolidated assets
(a “Sale”), other than a Reorganization or Sale pursuant to which this Agreement
will be assumed by the Surviving Company by operation of law, the Company will
cause (1) the Surviving Company to unconditionally assume this Agreement in
writing and (2) a copy of the assumption to be provided to you. After the
Reorganization or Sale, the Surviving Company will be treated for all purposes
as the Company under this Agreement. The “Surviving Company” means (i) in a
Reorganization, the entity resulting from the Reorganization or (ii) in a Sale,
the entity that has acquired all or substantially all of the assets of the
Company.

 

10.Disputes.

 

(a)          Employment Matters. This Section 10 applies to any controversy or
claim between you and the Company arising out of or relating to or concerning
this Agreement or any aspect of your employment with the Company or the
termination of that employment (together, an “Employment Matter”). This
includes, but is not limited to, any and all employment-related claims or
controversies, such as breach of employment agreement, breach of the covenant of
good faith and fair dealing, negligent supervision or hiring, wrongful discharge
in violation of public policy, unpaid wages under the state and federal wage
payment laws, breach of privacy claims, intentional or negligent infliction of
emotional distress claims, fraud, misrepresentations, defamation, and any claims
that could be asserted under all state and federal anti-discrimination laws,
including, but not limited to, the California Fair Employment and Housing Act,
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Americans with Disabilities Act, the California Labor Code, and the
Family and Medical Leave Act. You specifically agree to arbitrate all claims for
discrimination and marital status, sexual orientation, disability, political
activity, or any other statutorily-protected basis under the procedure set forth
in the this Section 10 and not through a court of law. This Agreement is further
intended to apply to any claim you may have against any of the Company’s
officers, directors, employees, agents, or any of its affiliated or related
entities, and to any and all past and future employment relationships you may
have with the Company regardless of job position or title.

 

(b)          Mandatory Arbitration. Any controversy arising out of or relating
to this Agreement, its enforcement or interpretation, or because of an alleged
breach, default, or misrepresentation in connection with any of its provisions,
or any other controversy arising out of your employment, including, but not
limited to, any state or federal statutory claims, shall be submitted to
arbitration in the County of Sacramento, California, before a sole arbitrator
selected from Judicial Arbitration and Mediation Services, Inc., Sacramento,
California, or its successor (“JAMS”), or if JAMS is no longer able to supply
the arbitrator, such arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Code of Civil Procedure § 1280 et seq. as the exclusive forum for the
resolution of such dispute; provided, however, that in the event that
provisional injunctive relief is not available, or is not available in a timely
manner, through such arbitration, then provisional injunctive relief may, but
need not, be sought by either party to this Agreement in a court of law while
arbitration proceedings are pending, and any provisional injunctive relief
granted by such court shall remain effective until the matter is finally
determined by the Arbitrator. Either you or the Company may initiate the
arbitration process by delivering a written request for arbitration to the other
party within the time limits that would apply to the filing of civil complaint
in state or federal district court, as applicable to the claim at issue. A late
request will be void. Final resolution of any dispute through arbitration may
include any remedy or relief which the Arbitrator deems just and equitable,
including any and all remedies provided by applicable state or federal statutes.
At the conclusion of the arbitration, the Arbitrator shall issue a written
decision that sets forth the essential findings and conclusions upon which the
Arbitrator’s award or decision is based. Any award or relief granted by the
Arbitrator hereunder shall be final and binding on the parties hereto and may be
enforced by any court of competent jurisdiction. The parties hereto acknowledge
and agree that they are hereby waiving any rights to trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in connection with any matter whatsoever arising out of or in
any way connected with this Agreement or your employment. The parties hereto
agree that the Company shall be responsible for payment of the forum costs of
any arbitration hereunder, including the Arbitrator’s fee. You and the Company
further agree that in any proceeding to enforce the terms of this Agreement, the
prevailing party shall be entitled to its or his reasonable attorneys’ fees and
costs (other than forum costs associated with the arbitration) incurred by it or
him in connection with resolution of the dispute in addition to any other relief
granted. Notwithstanding this provision, the parties hereto may mutually agree
to mediate any dispute prior to or following submission to arbitration.

10

 

(c)          Enforcement of Arbitration Awards. You or the Company may bring an
action or special proceeding in a state or federal court of competent
jurisdiction sitting in the County of Los Angeles, California to enforce any
arbitration award under Section 10(b).

 

(d)          Jurisdiction and Choice of Forum. You and the Company irrevocably
submit to the exclusive jurisdiction of any state or federal court located in
the County of Sacramento, California over any Employment Matter that is not
otherwise arbitrated or resolved according to Section 10(b). This includes any
action or proceeding to compel arbitration or to enforce an arbitration award.
Both you and the Company (i) acknowledge that the forum stated in this Section
10(d) has a reasonable relation to this Agreement and to the relationship
between you and the Company and that the submission to the forum will apply even
if the forum chooses to apply non-forum law, (ii) waive, to the extent permitted
by law, any objection to personal jurisdiction or to the laying of venue of any
action or proceeding covered by this Section 10(d) in the forum stated in this
Section, including any objection on the grounds of forum non conveniens or the
like, (iii) agree not to commence any such action or proceeding in any forum
other than the forum stated in this Section 10(d), and (iv) agree that, to the
extent permitted by law, a final and non-appealable judgment in any such action
or proceeding in any such court will be conclusive and binding on you and the
Company.

 

(e)          Waiver of Jury Trial. To the extent permitted by law, you and the
Company waive any and all rights to a jury trial with respect to any Employment
Matter. Notwithstanding the provisions of this Agreement, you shall have the
right to file a claim for workers’ compensation and unemployment insurance
benefits with the appropriate state agencies, unfair labor practice charges with
the National Labor Relations Board, or an administrative charge with the Equal
Employment Opportunity Commission, California Department of Fair Employment and
Housing, or any similar state agency.

 

(f)          Governing Law. This Agreement, and all questions relating to its
validity, interpretation, performance and enforcement, as well as the legal
relations hereby created between the parties hereto, shall be governed by and
construed under, and interpreted and enforced in accordance with, the laws of
the State of California, notwithstanding any California or other conflict of law
provision to the contrary.

 

11.General Provisions.

 

(a)          Construction. References (A) to Sections are to sections of this
Agreement unless otherwise stated; (B) to any contract (including this
Agreement) are to the contract as amended, modified, supplemented or replaced
from time to time; (C) to any statute, rule or regulation are to the statute,
rule or regulation as amended, modified, supplemented or replaced from time to
time (and, in the case of statutes, include any rules and regulations
promulgated under the statute) and to any section of any statute, rule or
regulation include any successor to the section; (D) to any governmental
authority include any successor to the governmental authority; (E) to any plan
include any programs, practices and policies; (F) to any entity include any
corporation, limited liability company, partnership, association, business trust
and similar organization and include any governmental authority; and (G) to any
affiliate of any entity are to any person or other entity directly or indirectly
controlling, controlled by or under common control with the first entity.

11

 

(i)            The various headings in this Agreement are for convenience of
reference only and in no way define, limit or describe the scope or intent of
any provisions or Sections of this Agreement.

 

(ii)          Unless the context requires otherwise, (A) words describing the
singular number include the plural and vice versa, (B) words denoting any gender
include all genders and (C) the words “include”, “includes” and “including” will
be deemed to be followed by the words “without limitation.”

 

(iii)          It is your and the Company’s intention that this Agreement not be
construed more strictly with regard to you or the Company.

 

(b)          Withholding. You and the Company will treat all payments to you
under this Agreement as compensation for your employment. Accordingly, the
Company may withhold from any payment any taxes that are required to be withheld
under any law, rule or regulation.

 

(c)          Severability. If any provision of this Agreement is found by any
court of competent jurisdiction (or legally empowered agency) to be illegal,
invalid or unenforceable for any reason, then (1) the provision will be amended
automatically to the minimum extent necessary to cure the illegality or
invalidity and permit enforcement and (2) the remainder of this Agreement will
not be affected.

 

(d)          No Set-off or Mitigation. Except if your employment is terminated
by the Company for Cause, your and the Company’s respective obligations under
this Agreement will not be affected by any set-off, counterclaim, recoupment or
other right you or any member of the Company may have against each other or
anyone else. You do not need to seek other employment or take any other action
to mitigate any amounts owed to you under this Agreement.

 

(e)          Notices. All notices, requests, demands and other communications
under this Agreement must be in writing and will be deemed given (1) on the
business day sent, when delivered by hand or facsimile transmission (with
confirmation) during normal business hours, (2) on the business day after the
business day sent, if delivered by a nationally recognized overnight courier or
(3) on the third business day after the business day sent if delivered by
registered or certified mail, return receipt requested, in each case to the
following address or number (or to such other addresses or numbers as may be
specified by notice that conforms to this Section 11(e)):

 

If to you, to your address then on file with the Company’s payroll department
with a copy to:

 

Mr. David Ritchie

31487 La Pasita

San Juan Capistrano, California 92675

 

If to the Company or any other member of the Company, to:

 

American River Bankshares
3100 Zinfandel Drive

Rancho Cordova, California 95670

Attention: Chairman of the Board

Facsimile:

 

With a copy to (which shall not constitute notice):

 

Manatt, Phelps & Phillips, LLP

11355 Olympic Boulevard

Los Angeles, California 90064

Attention: Gordon M. Bava

Facsimile: (310) 914-5772
Email: gbava@manatt.com

12

 

(f)          Consideration. This Agreement is in consideration of the mutual
covenants contained in it. You and the Company acknowledge the receipt and
sufficiency of the consideration to this Agreement and intend this Agreement to
be legally binding.

 

(g)          Amendments and Waivers. Any provision of this Agreement may be
amended or waived but only if the amendment or waiver is in writing and signed,
in the case of an amendment, by you and the Company or, in the case of a waiver,
by the party that would have benefited from the provision waived. Except as this
Agreement otherwise provides, no failure or delay by you or the Company to
exercise any right or remedy under this Agreement will operate as a waiver, and
no partial exercise of any right or remedy will preclude any further exercise.

 

(h)          Legal Counsel; Mutual Drafting. Each party recognizes that this is
a legally binding contract and acknowledges and agrees that they have had the
opportunity to consult with legal counsel of their choice. Each party has
cooperated in the drafting, negotiation and preparation of this Agreement.
Hence, in any construction to be made of this Agreement, the same shall not be
construed against either party on the basis of that party being the drafter of
such language. You agree and acknowledge that you have read and understand this
Agreement, are entering into it freely and voluntarily, and have been advised to
seek counsel prior to entering into this Agreement and have had ample
opportunity to do so.

 

(i)          Golden Parachute/Bank Regulatory Limitation. The parties understand
and agree that at the time any payment would otherwise be made or benefit
provided under Section 6 of this Agreement, depending on the facts and
circumstances existing at such time, the satisfaction of such obligations by the
Company may be deemed by a regulatory authority to be illegal, an unsafe and
unsound practice, or for some other reason not properly due or payable by the
Company. Among other things, applicable banking laws, regulations and published
guidance and policies of the appropriate regulatory authorities (including, but
not limited to, Section 39(a) of the Federal Deposit Insurance Act 12 C.F.R.
Part 208 Appendix D-1, § III, Guidance on Sound Incentive Compensation Policies,
75 Fed. Reg. 36,395 (June 25, 2010) or similar regulations or regulatory action
following similar principles may apply at such time. You understand, acknowledge
and agree that, notwithstanding any other provision of this Agreement, the
Company shall not be obligated to make any payment or provide any benefit under
Section 6 of this Agreement where (i) an appropriate regulatory authority does
not approve or acquiesce as required or objects to the making of such payment or
benefit or (ii) the Company has been informed in writing by a representative of
the appropriate regulatory authority that it is the position of such regulatory
authority that making such payment or providing such benefit would constitute an
unsafe and unsound practice, violate a written agreement with the regulatory
authority, violate an applicable rule or regulation, or would cause the
representative of the regulatory authority to recommend enforcement action
against the Company.

 

(j)          Key Employee Delay on Payments. Notwithstanding the timing of
payments set forth in Agreement, if the Company determines that you are a
“specified employee” within the meaning of Section 409A, as may be amended and
that, as a result of such status, any portion of the payment under this
Agreement would be subject to additional taxation, the Company will delay paying
any portion of such payment until the earliest permissible date on which
payments may commence without triggering such additional taxation (with such
delay not to exceed six (6) months), with the first such payment to include the
amounts that would have been paid earlier but for the above delay.

 

(k)          Third-Party Beneficiaries. Subject to Section 9, this Agreement
will be binding on, inure to the benefit of and be enforceable by the parties
and their respective heirs, personal representatives, successors and assigns.
This Agreement does not confer any rights, remedies, obligations or liabilities
to any entity or person other than you and the Company and your and the
Company’s permitted successors and assigns, although (i) this Agreement will
inure to the benefit of the Company and (ii) Section 9(a) will inure to the
benefit of the most recent persons named in a notice under that Section.

13

 

12.Compliance with Section 409A.

 

(a)          General. It is the intention of both the Company and you that the
benefits and rights to which you could be entitled pursuant to this Agreement
comply with Section 409A to the extent that the requirements of Section 409A are
applicable thereto, and the provisions of this Agreement shall be construed in a
manner consistent with that intention. If you or the Company believes, at any
time, that any such benefit or right that is subject to Section 409A does not so
comply, it shall promptly advise the other and shall negotiate reasonably and in
good faith to amend the terms of such benefits and rights such that they comply
with Section 409A (with the most limited possible economic effect on you and on
the Company). Notwithstanding the foregoing, the Company does not make any
representation to you that the payments or benefits provided under this
Agreement are exempt from, or satisfy, the requirements of Section 409A, and the
Company shall have no liability or other obligation to indemnify or hold
harmless the you or any beneficiary for any tax, additional tax, interest or
penalties that you or any beneficiary may incur in the event that any provision
of this Agreement, or any amendment or modification thereof, or any other action
taken with respect thereto, is deemed to violate any of the requirements of
Section 409A.

 

(b)          Distributions on Account of Separation from Service. If and to the
extent required to comply with Section 409A, no payment or benefit required to
be paid under this Agreement on account of termination of your employment shall
be made unless and until you incur a “separation from service” within the
meaning of Section 409A.

 

(c)          No Acceleration of Payments. Neither the Company nor you,
individually or in combination, may accelerate any payment or benefit that is
subject to Section 409A, except in compliance with Section 409A and the
provisions of this Agreement, and no amount that is subject to Section 409A
shall be paid prior to the earliest date on which it may be paid without
violating Section 409A.

 

(d)          Treatment of Each Installment as a Separate Payment and Timing of
Payments. For purposes of applying the provisions of Section 409A to this
Agreement, each separately identified amount to which you are entitled under
this Agreement shall be treated as a separate payment. In addition, to the
extent permissible under Section 409A, any series of installment payments under
this Agreement shall be treated as a right to a series of separate payments.
Whenever a payment under this Agreement specifies a payment period with
reference to a number of days, the actual date of payment within the specified
period shall be within the sole discretion of the Company.

 

(e)          Taxable Reimbursements and In-Kind Benefits.

 

(i)          Any reimbursements by the Company to you of any eligible expenses
under this Agreement that are not excludable from your income for Federal income
tax purposes (the “Taxable Reimbursements”) shall be made by no later than the
earlier of the date on which they would be paid under the Company’s normal
policies and the last day of the calendar year following the year in which the
expense was incurred.

 

(ii)          The amount of any Taxable Reimbursements, and the value of any
in-kind benefits to be provided to you, during any calendar year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year (except for any life-term or other
aggregate limitation applicable to medical expenses).

 

(iii)          The right to Taxable Reimbursement, or in-kind benefits, shall
not be subject to liquidation or exchange for another benefit.

 

13.Counterparts.

 

This Agreement may be executed in counterparts, each of which will constitute an
original and all of which, when taken together, will constitute one agreement.
However, this Agreement will not be effective until the date both parties have
executed this Agreement.

 

Very truly yours,

14

 

AMERICAN RIVER BANKSHARES   AMERICAN RIVER BANK       /s/ Charles D. Fite   /s/
Charles D. Fite

Name: Charles D. Fite

Title: Chairman

 

Name: Charles D. Fite

Title: Chairman

 

ACCEPTED AND AGREED TO:

 

/s/ David Ritchie  

Name: David Ritchie

 

Dated: October 27, 2017

15

 

Annex A

 

Limitation on Payments Following a Change in Control

 

In the event that any payment or benefit received or to be received by Mr. David
Ritchie (“Executive”) pursuant to that certain Employment Agreement (the
“Agreement”), dated September 21, 2017, by and between Executive, American River
Bankshares and American River Bank (together, the “Company”) or otherwise
(“Payments”) would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and
(ii) but for this Annex A, be subject to the excise tax imposed by Section 4999
of the Code, any successor provisions, or any comparable federal, state, local
or foreign excise tax (“Excise Tax”), then such Payments shall be either (A)
provided in full pursuant to the terms of the Agreement and any other applicable
agreements and plans, or (B) provided as to such lesser extent which would
result in no portion of such Payments being subject to the Excise Tax (“Reduced
Amount”), whichever of the foregoing amounts, taking into account the applicable
federal, state, local and foreign income, employment and other taxes and the
Excise Tax (including, without limitation, any interest or penalties on such
taxes), results in the receipt by Executive, on an after-tax basis, of the
greater amount of aggregate payments and benefits provided for hereunder or
otherwise, notwithstanding that all or some portion of such Payments may be
subject to the Excise Tax; provided, however, if Executive’s net after-tax
benefit of receiving the Payments in full would be less than $10,000 greater
than Executive’s net after-tax benefit of receiving the Reduced Amount,
Executive shall be provided the Reduced Amount instead of the Payments in full.
Unless the Company and Executive otherwise agree in writing, any determination
required under this Annex A shall be made by independent tax counsel designated
by the Company and reasonably acceptable to Executive (“Independent Tax
Counsel”), whose determination shall be conclusive and binding upon Executive
and the Company for all purposes. For purposes of making the calculations
required under this Annex A, Independent Tax Counsel may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code; provided that Independent Tax Counsel shall assume
that Executive pays all taxes at the highest marginal rate unless Executive’s
actual effective marginal tax rate at the relevant time is less than the highest
marginal rate, in which case such lower rate shall be used by Independent Tax
Counsel. The Company and Executive shall furnish to Independent Tax Counsel such
information and documents as Independent Tax Counsel may reasonably request in
order to make a determination under this Annex A. The Company shall bear all
costs that Independent Tax Counsel may reasonably incur in connection with any
calculations contemplated by this Annex A. In the event that (ii)(B) above
applies, then based on the information provided to Executive and the Company by
Independent Tax Counsel, and notwithstanding any other provision of the
Agreement or any other plan, arrangement or agreement to the contrary, the
reduction of such Payments shall be made as follows: (A) if none of the Payments
constitute non-qualified deferred compensation (within the meaning of Section
409A of the Code), then such reduction and/or repayment shall occur in the
manner the Executive elects in writing prior to the date of Payment; or (B) if
any Payment constitutes non-qualified deferred compensation or if the Executive
fails to elect an order in the event that none of the Payments constitutes
non-qualified deferred compensation (within the meaning of Section 409A of the
Code), then the Payments to be reduced will be determined in a manner which
maximizes the Executive’s economic position and, to the extent the economic cost
is equivalent between one or more Payments, such Payments will be reduced in the
inverse order of when payment would have been made to the Executive, until the
aggregate Payments payable to the Executive equal the Reduced Amount. 

 

 

Annex B

 

General Release

 

For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned does hereby release and forever discharge the
“Releasees” hereunder, consisting of American River Bankshares, a California
corporation, and American River Bank, a California banking corporation
(together, the “Company”), and their partners, associates, parents,
subsidiaries, affiliates, successors, heirs, assigns, agents, directors,
officers, employees, equityholders, representatives, lawyers, insurers, and all
persons acting by, through, under or in concert with them, or any of them, of
and from any and all manner of action or actions, cause or causes of action, in
law or in equity, suits, debts, liens, contracts, agreements, promises,
liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses,
of any nature whatsoever, known or unknown, fixed or contingent (hereinafter
called “Claims”), which the undersigned now has or may hereafter have against
the Releasees, or any of them, by reason of any matter, cause, or thing
whatsoever from the beginning of time to the date hereof.  The Claims released
herein include, without limiting the generality of the foregoing, any Claims in
any way arising out of, based upon, or related to the employment or termination
from employment of the undersigned by the Releasees, or any of them; any claim
for benefits under any stock option or other equity-based incentive plan of the
Releasees (or any related agreement to which any Releasee is a party); any
alleged breach of any express or implied contract of employment; any alleged
torts or other alleged legal restrictions on Releasee’s right to terminate the
employment of the undersigned; and any alleged violation of any federal, state
or local statute or ordinance including, without limitation, Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the
Americans With Disabilities Act. Notwithstanding the foregoing, this Release
shall not operate to release any Claims which the undersigned may have with
respect to (i) payments and other express obligations of the Company under that
certain Employment Agreement, dated as of September 21, 2017, between the
Company and the undersigned (“Employment Agreement”); (ii) accrued or vested
benefits the undersigned may have, if any, as of the date hereof under any
employee benefit plan of the Company or, with respect to any outstanding equity
awards held by the undersigned, under any equity incentive plan, stock award or
option agreement, as any such stock award or option agreement may be amended by
the Employment Agreement, if such amendment is more favorable to the
undersigned; (iii) payments and other obligations of the Company with respect to
indemnification of the undersigned under the Company’s Articles of
Incorporation, and Bylaws, as each may be amended from time to time, and under
any indemnification agreement between the Company and the undersigned.
Additionally, notwithstanding the foregoing, the undersigned does not release
the undersigned’s rights under this Release and any Claims that cannot be
released as a matter of law, including, without limitation, the undersigned’s
right to communicate directly with, cooperate with, or provide information to,
any federal, state or local government regulator.

 

THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT.

 

IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:

 

(1)          HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
RELEASE;

 

(2)          HE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING
IT; AND

 

 

(3)          HE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND
THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION
PERIOD.

 

The undersigned represents and warrants that there has been no assignment or
other transfer of any interest in any Claim which he may have against Releasees,
or any of them, and the undersigned agrees to indemnify and hold Releasees, and
each of them, harmless from any liability, Claims, demands, damages, costs,
expenses and attorneys’ fees incurred by Releasees, or any of them, as the
result of any such assignment or transfer of any rights or Claims under any such
assignment or transfer.  It is the intention of the parties that this indemnity
does not require payment as a condition precedent to recovery by the Releasees
against the undersigned under this indemnity.

 

The undersigned agrees that if he hereafter commences any suit arising out of,
based upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder,
then the undersigned agrees to pay to Releasees, and each of them, in addition
to any other damages caused to Releasees thereby, all attorney’s fees incurred
by Releasees in defending or otherwise responding to said suit or Claim.

 

The undersigned further understands and agrees that neither the payment of any
sum of money nor the execution of this Release shall constitute or be construed
as an admission of any liability whatsoever by the Releasees, or any of them,
who have consistently taken the position that they have no liability whatsoever
to the undersigned.

 

IN WITNESS WHEREOF, the undersigned has executed this Release this __ day of
__________, _____.

 

  David Ritchie