Exhibit 10.4

TRICO BANCSHARES

TRANSACTION BONUS AGREEMENT

THIS TRANSACTION BONUS AGREEMENT (this “Agreement”) is made and entered into on
and effective as of August 7, 2014, by and between TriCo Bancshares, a
California corporation (“TriCo”), and Richard P. Smith (“Executive”).

RECITALS

WHEREAS, the Compensation Committee of the Board of Directors of TriCo (the
“Committee”) has determined that Executive, in his position as President and
Chief Executive Officer of TriCo, has played and continues to play an
instrumental role in the negotiation and completion of TriCo’s acquisition of
North Valley Bancorp (“North Valley”) and its subsidiary North Valley Bank by
means of statutory mergers (collectively, the “Merger”) to be effected pursuant
to an Agreement and Plan of Merger and Reorganization by and between TriCo and
North Valley dated January 21, 2014 (the “Merger Agreement”), and that Executive
will have increased duties and responsibilities as President and Chief Executive
Officer of the combined businesses following the Merger; and

WHEREAS, the Committee has determined that it is in the best interests of TriCo
and its shareholders for Executive to be paid bonuses for such services based
upon the completion of the Merger and cost savings in the operation of the North
Valley business following the Merger, and has authorized TriCo to enter into the
bonus arrangements with Executive set forth in this Agreement;

ACCORDINGLY, it is the desire of TriCo and Executive to enter into this
Agreement under which TriCo will pay Executive a bonus upon the completion of
the Merger and an additional bonus based on cost savings in the operation of the
North Valley business through the end of TriCo’s fiscal year ending December 31,
2015, subject to the terms and conditions of this Agreement;

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

1. Merger Completion Bonus. Provided that Executive continues in employment with
TriCo through the Effective Date of the Merger, TriCo will pay to Executive a
cash bonus in the amount of Two Hundred Twenty-Five Thousand Dollars ($225,000)
(the “Transaction Bonus”) on TriCo’s next regular payroll date following such
Effective Date, subject to the terms and conditions of this Agreement. If
Executive’s employment with TriCo terminates for any reason (including death,
disability, by TriCo with or without Cause or by Executive for any reason) prior
to the Effective Date of the Merger, or if the Merger does not occur on or
before December 31, 2014, Executive shall not earn and shall not receive a
Transaction Bonus hereunder.

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2. Performance Bonus.

(a) Provided that Executive continues in employment with TriCo through the last
day of TriCo’s fiscal year ending December 31, 2015, TriCo will pay to Executive
a cash bonus in the amount of Two Hundred Twenty-Five Thousand Dollars
($225,000) (the “Performance Bonus”) subject to TriCo achieving the cost savings
set forth on Exhibit A hereto from the operation of the North Valley business on
or before the end of TriCo’s fiscal year ending December 31, 2015 (the
“Performance Period”), subject to the terms and conditions of this Agreement. In
the sole and absolute discretion of the Committee, extraordinary cost items may
be included in or excluded from the computation of such cost savings, and
adjustments may be made to the cost savings target due to changes in business
conditions, in order to prevent any unintended enlargement or dilution of
Executive’s rights under this Agreement.

(b) If Executive’s employment with TriCo terminates for any reason (including
death, disability, by TriCo with or without Cause or by Executive for any
reason) prior to the last day of TriCo’s fiscal year ending December 31, 2015,
Executive shall not earn and shall not receive a Performance Bonus hereunder.

(c) TriCo shall pay the Performance Bonus in cash on or before March 15, 2016.

3. Withholding and Employment Taxes. All amounts payable to Executive hereunder
shall be subject to all federal, state, local and other withholding and
employment taxes as required by applicable law.

4. Termination. This Agreement shall terminate, and, notwithstanding any other
provision of this Agreement, no Transaction Bonus or Performance Bonus shall be
earned or paid hereunder, upon the earlier of (i) termination of Executive’s
employment with TriCo prior to the Effective Date of any Merger, or
(ii) December 31, 2014, if no Merger has occurred prior to such date.
Additionally, this Agreement shall terminate (following the occurrence of a
Merger and payment in full of any Transaction Bonus earned), and,
notwithstanding any other provision of this Agreement, no Performance Bonus
shall be earned or paid hereunder upon termination of Executive’s employment
with TriCo for any reason prior to December 31, 2015.

5. No Right to Continued Employment. Although this Agreement is intended to
provide Executive with additional incentives to remain in the employ of TriCo,
this Agreement shall not be deemed to constitute a contract of employment
between Executive and TriCo nor shall any provision of this Agreement restrict
the right of TriCo to terminate Executive’s employment or restrict the right of
Executive to terminate employment. Executive’s employment with TriCo shall
continue to governed by the terms and conditions of the Amended Employment
Agreement between TriCo and Executive dated March 28, 2013, as such Amended
Employment Agreement may be amended from time to time by the parties (the
“Employment Agreement”).

6. Assignment Prohibited. Executive shall have no power or right to transfer,
assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber
in advance any Transaction Bonus or Performance Bonus payable hereunder. In the
event Executive attempts assignment, commutation, hypothecation, transfer or
disposal of all or any portion of any Transaction Bonus or Performance Bonus
payable hereunder, such attempted assignment, commutation, hypothecation,
transfer or disposal of any Transaction Bonus or Performance Bonus shall be
void, and TriCo shall have no obligation to make payment of such Transaction
Bonus or Performance Bonus pursuant to this Agreement.

 

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7. Successors. This Agreement shall inure to the benefit of, and be enforceable
by, TriCo and its successors and assigns and Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

8. Notices. All notices and other communications of any kind that either
Executive or TriCo may be required or may desire to serve on the other party
hereto in connection with this Agreement shall be in writing and shall be
delivered in accordance with the provisions of Section 9 of the Employment
Agreement.

9. Arbitration of Claims. All claims, disputes and other matters in question
arising out of or relating to this Agreement or the breach or interpretation
thereof shall be resolved by binding arbitration under the California
Arbitration Act in accordance with the provisions of Section 13 of the
Employment Agreement, including but not limited to such provisions pertaining to
venue, costs and attorneys’ fees, and entry of judgment upon an arbitration
award in any court of competent jurisdiction.

10. Headings. The captions and headings in this Agreement are included for ease
of reference only and will be disregarded in interpreting or construing this
Agreement.

11. Amendment. This Agreement may be amended or revoked only with the mutual
written consent of Executive and TriCo.

12. Severability. If an arbitrator, court or other body of competent
jurisdiction determines that any provision of this Agreement is invalid or
unenforceable, that provision will be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, or, if it is not
possible to so adjust such provision, this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted. The
invalidity and unenforceability of any particular provision of this Agreement
shall not affect any other provision hereof, and all other provisions of the
Agreement shall be valid and enforceable to the fullest extent possible.

13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California as such laws are
applied to agreements between California residents entered into and to be
performed entirely within California, without regard or reference to the rules
of conflicts of law that would require the application of the laws of any other
jurisdiction.

14. Entire Agreement. This Agreement, together with applicable provisions of the
Employment Agreement, is the complete agreement of the parties on the subject
set forth herein. This Agreement, together with the Employment Agreement,
supersedes any prior or contemporaneous oral or written agreement or
understanding on such subject. No party is relying on any representations, oral
or written, on the subject of the effect, enforceability, or meaning of this
Agreement, except as specifically set forth in this Agreement.

 

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15. Opportunity To Consult With Own Advisors. Executive acknowledges that he has
been afforded the opportunity to consult with independent advisors of his own
choosing, including, without limitation, legal counsel, accountants and tax
advisors, regarding (i) the Transaction Bonus and Performance Bonus available to
Executive under the terms of this Agreement, (ii) the terms and conditions which
may affect the amount of and Executive’s right to any Transaction Bonus or
Performance Bonus, and (iii) the personal tax effects of any Transaction Bonus
or Performance Bonus payable to Executive under the terms of this Agreement,
including, without limitation, the effects of any federal or state taxes,
Sections 280G and 409A of the Code, and any other taxes, costs, expenses or
liabilities whatsoever related to any Transaction Bonus or Performance Bonus,
which in any of the foregoing instances Executive acknowledges and agrees shall
be the sole responsibility of Executive notwithstanding any other term or
provision of this Agreement. Executive further acknowledges and agrees that
TriCo shall have no liability whatsoever related to any such personal tax
effects or other personal costs, expenses, or liabilities applicable to
Executive and further specifically waives any right for Executive and his or her
heirs, beneficiaries, legal representatives, agents, successors, and assigns to
claim or assert liability on the part of TriCo related to the matters described
above in this section. Executive further acknowledges and agrees that Executive
has read, understands and consents to all of the terms and conditions of this
Agreement, and that Executive enters into this Agreement with a full
understanding of its terms and conditions.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
effective as of the date set forth in the first paragraph hereof.

 

TRICO BANCSHARES       EMPLOYEE

By

 

/s/ William J. Casey

     

/s/ Richard P. Smith

 

William J. Casey

Chairman

      Richard P. Smith

Address of TriCo:

    Address of Employee:

63 Constitution Drive

    _____________________

Chico, California 95973

    _____________________

 

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EXHIBIT A

PERFORMANCE BONUS CRITERIA AND FORMULA

Performance Bonus is to be paid if and only if Noninterest Expense cost savings
of $14.543 million or more are achieved in the operation of the North Valley
business during the Performance Period from the current annual run rate of such
Noninterest Expenses, which is $36.144 million. Such current annual run rate and
projected cost savings of such Noninterest Expenses are set forth in the Pro
Forma Income Statement for Cost and Revenue Synergies attached hereto.

 

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