EXHIBIT 10.86

 

SEVERANCE AGREEMENT

 

This Severance Agreement (“Agreement”), which is entered into by and between
Western Sierra Bancorp (Hereinafter “Bancorp”), and Kirk Dowdell (hereinafter
“Executive”) is made with reference to the following facts:

 

RECITAL

 

WHEREAS, Bancorp desires to provide Executive with severance compensation and
Executive desires severance compensation, in the event there is a change in
control of Bancorp.

 

NOW, THEREFORE, in consideration of the representations, warranties and
covenants set forth herein, the parties, intending to be bound thereby, hereby
agree as follows:

 

ARTICLE 1.

SEVERANCE

 

1.1          Severance Payment.  In the event of (i) any merger or consolidation
where Bancorp is (A) not the surviving or resulting corporation or (B) the
shareholders of Bancorp at the time immediately prior to such merger will own
less than fifty percent (50%) on a direct or indirect basis of the voting equity
interests of the surviving corporation after such merger, (ii) the transfer of
all or substantially all of the assets of Bancorp, or (iii) a sale of the equity
securities of Bancorp representing more than fifty percent (50%) of the
aggregate voting power of all outstanding equity securities of Bancorp to any
person or entity, or any group of persons and/or entities acting in concert (any
of these events shall be referred to as an “Acquisition”), this Agreement shall
continue in full force and effect.  In the event that an Acquisition occurs and
that Executive: (i) is not retained by the resulting corporation for a period of
eighteen (18) months in a position comparable to that of the highest level
executive vice-president of the resulting corporation or position accepted by
Executive, or (ii) the resulting corporation reduces Executive’s base salary
from Executive’s base salary at the time immediately prior to the Acquisition at
any time during the eighteen (18) month period following the consummation of the
Acquisition, then Bancorp shall pay to Executive a sum equal to his monthly base
salary, measured by the month immediately preceding the consummation of the
Acquisition, multiplied by the lesser eighteen (18) or the number of full or
partial calendar months remaining between the consummation of the Acquisition
and the Executive’s sixty-fifth (65th) birthday, which shall be paid to
Executive in a lump sum, which sall be payable within ten (10) days of
termination of Executives employment with the resulting corporation.

 

The election provided for herein shall be in writing, and shall be delivered to
Bancorp’s principal executive office.  The payment provided for herein shall be
considered to be in full and complete satisfaction of any and all rights which
Executive may enjoy other than (i) rights under the Executive’s Salary
Continuation Agreement, and (ii) rights, if any, to exercise any stock options
which vested prior to such termination.

 

1.2          Dissolution of Bancorp.  This Agreement shall not be terminated by
the voluntary or involuntary dissolution of Bancorp.  Notwithstanding the
foregoing, in the event proceedings for liquidation of Bancorp are commenced by
regulatory authorities, this Agreement and all rights and benefits hereunder
shall terminate.

 

1.3          Term of Agreement. This Agreement shall continue until 12/31/08
(hereinafter “Termination Date”).  The Termination Date may be amended or
extended by written agreement of the parties.  This Agreement shall apply to any
Acquisition that is consummated prior to the Termination Date provided that
Executive is employed by Bancorp at the date of public announcement of the
Acquisition.

 

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ARTICLE 2.

GENERAL PROVISIONS

 

2.1.         Headings.  The subject headings of the paragraphs and subparagraphs
of this Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.

 

2.2          Entire Agreement.  This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, representations, and
understandings of the parties.  No supplement, modification, or amendment of
this Agreement  shall be binding unless executed in writing by all of the
parties.  No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver.  No waiver shall be binding
unless executed in writing by the party making the waiver.

 

2.3          Parties in Interest.              Nothing in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any person other than the parties to it and
their respective successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.

 

2.4          Successors and Assigns.   This Agreement shall be binding on, and
shall inure to the benefit of, the parties to it, and their respective heirs,
legal representatives, successors, and assigns.

 

2.5          Counterparts.       This Agreement may be executed in any number of
counterparts and each such counterpart shall be deemed to be an original
instrument.

 

2.6          Attorneys’ Fees and Costs.                If any party to this
Agreement shall take any action to enforce this Agreement or bring any action or
commence any arbitration for any relief against any other party, declaratory or
otherwise, arising out of this Agreement, the losing party shall pay to the
prevailing party a reasonable sum for attorneys’ fees incurred in bringing such
suit or arbitrations and/or enforcing any judgment granted therein, all of which
shall be deemed to have accrued upon the commencement of such action or
arbitration and shall be paid whether or not such action or arbitration is
prosecuted to judgment.  Any judgment or order entered in such action or
arbitration shall contain a specific provision providing for the recovery of
attorneys’ fees and costs incurred in enforcing such judgment.  For purposes of
this section, attorneys’ fees shall include, without limitation, fees incurred
in the following:  (a) post-judgment motions and collection actions; (b)
contempt proceedings; (c) garnishment, levy and debtor and third party
examinations; (d) discovery; and (e) bankruptcy litigation.

 

2.7          Jurisdiction and Venue.                     Any suit involving any
dispute or matter arising under this Agreement may only be brought in the
appropriate United States District Court in California or any California State
Court having jurisdiction over the subject matter of the dispute or matter.  All
parties hereby consent to the exercise of personal jurisdiction by any such
court with respect to any such proceeding.

 

2.8          Governing Law.    This Agreement shall be construed in accordance
with, and governed by, the laws of the State of California, the United States of
America.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year set forth below.

 

 

WESTERN SIERRA BANCORP

 

 

By:

/ s/ Kirk Dowdell

 

 

By:

/ s/ Gary D. Gall

 

 

Executive

 

 

 

Gary D. Gall, President/CEO

 

 

 

 

 

 

 

Dated:

January 16, 2004

 

 

Dated:

  January 16, 2004

 

 

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