Exhibit 10.21


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (this “Agreement”) by and between Western
Sierra Bancorp (“Bancorp”) and Patrick J. Rusnak (“Executive”), is dated May 3,
2005. (the “Effective Date”)


 


1.                                      PURPOSE OF
AGREEMENT.  This Agreement sets forth
the terms of Executive’s employment with Bancorp and provides Executive with a
contingent signing bonus and severance benefits in certain circumstances as set
forth in the Agreement.


 


2.                                      TERM OF
AGREEMENT.  This Agreement starts on
the Effective Date and expires on the third anniversary of the Effective Date.


 


3.                                      NO TERM OF
EMPLOYMENT.  Notwithstanding the term
of this Agreement, Bancorp may terminate Executive’s employment at any time for
any lawful reason or for no reason at all, subject to the provisions of this
Agreement.  Executive’s employment with
Bancorp is “at will.”


 


4.                                      DUTIES AND
EXECUTIVE POSITION.  As of the
Effective Date, Executive shall be employed as Executive Vice President/Chief
Operating Officer, and will perform such duties as may be designated by Bancorp’s
board of directors (the “Board”) or the Chief Executive Officer of Bancorp, to
whom Executive will directly report (the “Supervisor”).


 


Executive agrees that to the best of Executive’s
ability and experience, Executive will at all times loyally and conscientiously
perform all of the duties and obligations required of Executive pursuant to the
express and implicit terms of this Agreement and as directed by the Board or
the Supervisor.  Executive shall devote
Executive’s entire working time, attention and efforts to Bancorp’s business
and affairs, shall faithfully and diligently serve Bancorp’s interests and
shall not engage in any business or employment activity that is not on Bancorp’s
behalf (whether or not pursued for gain or profit) except for (i) activities
approved in writing in advance by the Board and (ii) passive investments that
do not involve Executive providing any advice or services to the businesses in
which the investments are made.


 


5.                                      COMPENSATION.  For all services performed under this
Agreement, Bancorp agrees to pay the following compensation and benefits:


 


Base
Salary.  Executive’s
base salary is $16,666.67 per month ($200,000 on an annualized basis) (the “Base
Salary”) and shall increase to $18,333.34 per month ($220,000 on an annualized
basis) beginning November 1, 2005, provided that Executive is still actively
employed by the Bancorp at such time. 
Executive’s base salary shall further increase to $20,000 per month
($240,000 on an annualized basis) beginning May 1, 2006, provide Executive is
still actively employed by the Bancorp at such time and has met the goals (“Goals”)
outlined in Appendix A to this Agreement. 
The Board shall in good faith determine whether Executive has satisfied
such Goals, and its decision shall be final and definitive.


 





















 


Contingent
Signing Bonus and Participation in the Senior Management Incentive Compensation
Plan.  Executive
upon successfully completing 90 days of active employment with Bancorp shall be
paid a $21,000 signing bonus as additional incentive compensation.  Executive
shall be entitled participate in the Senior Management Incentive Compensation
Plan and earn additional incentive compensation as set forth in such plan.


 


Paid
Time Off and Special Sick Time Off.  Executive shall be entitled to 26 days paid
time off per year for vacation, personal time off and short-term illnesses to
be used in accordance with the Bancorp’s Employee Handbook.  Executive shall receive five days per year of
employment with Bancorp, which will accumulate each year up to a maximum of 45
days, to cover time off due to illnesses of four or more consecutive days under
doctor’s care.


 


Stock
Options.  Subject
to the successful completion of 90 days of active employment with Bancorp,
Bancorp shall grant to Executive an option to purchase upon exercise 30,000
shares of Bancorp common stock at a per share option price equal to the market
price of the Bancorp common stock at the date of grant by the Board and with
such vesting conditions as determined by the Board.


 


Automobile
Allowance. 
Executive shall be paid an additional $400 per month compensation for
Executive’s automobile allowance.


 


Other
Benefits. 
Executive is entitled to participate, under the terms of the respective
plans, in other benefit plans and perquisites generally available to Bancorp’s
executives and employees.  Executive
shall be entitled to medical, dental, vision, chiropractic, employee assistance
plan, life, accidental disability, disability and long term disability coverage
on such terms as such is provided by Bancorp to its executive officers.  Bancorp shall pay 100% of Executive’s monthly
premiums for Executive and Executive’s dependents upon Executive becoming
eligible for such coverage beginning on the first of the month, following the
completion of 90 days of employment with Bancorp.


 


6.                                      TERMINATION.  Executive’s employment may be terminated
before the expiration of this Agreement as described in this Section, in which
event Executive’s compensation and benefits shall terminate except as otherwise
provided in this Agreement.


 


For
Cause.  Upon
Bancorp’s termination of Executive for Cause. 
For Cause shall mean


 


(a)                                  Dishonest or
fraudulent conduct by Executive with respect to the performance of Executive’s
duties with Bancorp;


 


(b)                                 Conduct
by Executive that materially discredits Bancorp or any of its subsidiaries or
is materially detrimental to the reputation of Bancorp or any of its
subsidiaries, including but not limited to conviction or a plea of nolo
contendere of Executive of a felony or crime involving moral turpitude;


 


(c)                                  Executive’s
willful misconduct or gross negligence in performance of Executive’s duties
under this Agreement, including but not limited to Executive’s refusal to
comply in any material respect with the legal directives of the Board or the
Supervisor, if such misconduct or negligence has not been remedied or is not


 


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being remedied to the Board’s reasonable satisfaction
within thirty (30) days after written notice, including a detailed description
of the misconduct or negligence, has been delivered by the Board to Executive;


 


(d)                                 An order or
directive from a state or federal banking regulatory agency requesting or
requiring removal of Executive or a finding by any such agency that Executive’s
performance threatens the safety or soundness of Bancorp or any of its
subsidiaries; or


 


(e)                                  Material
breach of Executive’s fiduciary duties to Bancorp if such breach has not been
remedied or is not being remedied to the Board’s reasonable satisfaction within
thirty (30) days after written notice, including a detailed description of the
breach, has been delivered by the Board to Executive.


 


Without
Cause.  Upon
Bancorp’s termination of Executive without Cause, with or without notice, at
any time in Bancorp’s sole discretion, for any reason other than for
Cause.  A Change in Control does not in
itself constitute Termination Without Cause.


 


Death or
Disability.  For
purposes of this Agreement, disability (“Disability”) shall mean either that the Executive is (i) unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
twelve (12) months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than
three (3) months under an accident and health plan sponsored by the Bank.


 


Resignation.  Upon Executive’s voluntary resignation,
written notice of which Executive must give Bancorp at least 60 days in advance
of his resignation.


 


Change
in Control.  For
purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred when any of the following events take place:


 


(a)                                  A Change In
Ownership Of The Bancorp.  A
change in ownership of the Bancorp occurs on the date that any person (or group
of persons) acquires ownership of stock of the Bancorp that, together with
stock held by such person or group, constitutes more than fifty percent (50%)
of the total fair market value or total voting power of the stock of the
Bancorp.


 


(b)                                  A Change in
Effective Control of the Bancorp. 
A change in effective control of the Bancorp occurs on the date that:


 


1.                                       Any
person (or group of persons) acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such person
or persons) ownership of stock of the Bancorp possessing thirty-five percent
(35%) or more of the total voting power of the stock of the Bancorp; or


 


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2.                                       A
majority of members of the Bancorp’s Board is replaced during any twelve (12)
month period by directors whose appointment or election is not endorsed by a
majority of the members of the Bancorp’s Board prior to the date of the
appointment or election.


 


(c)                                  A Change in
Ownership of a Substantial Portion of the Bancorp’s Assets.  A change in the ownership of a substantial
portion of the Bancorp’s assets occurs on the date that any person (or group of
persons) acquires (or has acquired during the twelve (12) month period ending
on the date of the most recent acquisition by such person or persons) assets
from the Bancorp that have a total gross fair market value equal to, or more
than, forty percent (40%) of the total gross fair market value of all of the
assets of the Bancorp immediately prior to such acquisition or acquisitions.


 


7.                                      PAYMENT UPON
TERMINATION.  Upon termination of
Executive’s employment for any of the reasons set forth in Section 6 above,
Executive will receive payment for all Base Salary and paid time off and other
benefits accrued as of the date of Executive’s termination (“Earned
Compensation”), which shall be paid no later than the end of the business day
of such termination unless an earlier time is required by applicable law, in
which case it shall be paid at such earlier time.  In the event of termination for death or
Disability, Executive’s estate or Executive, respectively shall receive in
addition to Earned Compensation, accrued paid time off and medical, dental,
vision, chiropractic insurance coverage for Executive and/or Executive’s
dependents, as applicable for three months following the date of death or Disability
at Bancorp’s expense.  In the event of
Executive’s termination of employment for Cause or resignation without proper
notice, Executive shall receive Earned Compensation and any accrued paid time
off to the date of resignation.


 


8.                                      SEVERANCE
BENEFIT.  In the event of Executive’s
termination Without Cause prior to the second anniversary of this Agreement, in
addition to receiving Earned Compensation, Executive will receive a severance
benefit equal to one month of Base Salary, based on Executive’s Base Salary
just prior to termination (the “Severance Benefit”) for each month Executive is
actively employed by the Bancorp up to a maximum Severance Benefit of six
months Base Salary.  In the event of
Executive’s termination without Cause after the second anniversary of this
Agreement, in addition to receiving Earned Compensation, Executive will receive
a severance benefit equal to one month of Base Salary, based on Executive’s
Base Salary just prior to termination (the “Severance Benefit”) for each month
Executive is actively employed by the Bancorp up to a maximum Severance Benefit
of 12 months Base Salary.  The Severance
Benefit shall be paid in installments over the number of months of continued
base salary, starting on the next regular payday following termination. Receipt
of the Severance Benefit is conditioned on Executive having executed the
Separation Agreement in substantially the form attached hereto as Exhibit B and
the revocation period having expired without Executive having revoked the
Separation Agreement.  Receipt and
continued receipt of the Severance Benefit is further conditioned on Executive
not being in material violation of any material term of this Agreement or in
material violation of any material term of the Separation Agreement.  Executive shall not be required to mitigate
the amount of any payments under this Section (whether by seeking new employment
or otherwise), and the amount of Severance Benefits shall not be reduced by any
income or funds that Executive may receive from another party.  In addition to any Severance Benefit paid by
the


 


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Bancorp, the Executive shall receive medical, dental,
vision, and chiropractic insurance coverage for Executive and Executive’s
dependents for three months following the date of termination without Cause at
Bancorp’s expense.


 


9.                                      CHANGE IN CONTROL
BENEFIT.  After a Change in Control,
if either (i) the Executive is not retained by the resulting corporation for a
period of 18 months in a position comparable to that of the highest level
executive vice president of the resulting corporation or a position with the
resulting corporation that is acceptable to Executive, or (ii) as a condition
of accepting or performing the functions of the position under (i) above, the
Executive is required to relocate his residence or increase his daily commuting
distance to greater than 40 miles,  or
(iii) the resulting company reduces Executive’s Base Salary from Executive’s
Base Salary immediately prior to the Change in Control at any time during the
18 month period immediately following the consummation of the Change in Control
(either event shall constitute a “Triggering Event”), then Executive shall be
paid the 18 months of Executive’s Base Salary, based on Executive’s Base Salary
just prior to the Change in Control (“Change in Control Benefit”).  Executive shall also be entitled to any
Earned Compensation in addition to the Change in Control Benefit upon a
Triggering Event.  The Change in Control
Benefit and Earned Compensation shall be paid to Executive in a lump sum within
5 calendar days following the Triggering Event.


 


10.                               CONFIDENTIAL
INFORMATION.  The parties acknowledge
that in the course of Executive’s duties, Executive will have access to and
become knowledgeable with certain proprietary and confidential information of
Bancorp and its subsidiaries not known by its existing or potential
competitors.  Executive acknowledges that
such information constitutes valuable, special, and unique assets of the
business of Bancorp.  Executive agrees to
hold in a fiduciary capacity, not use for Executive’s benefit, and not
disclose, communicate, or divulge in any manner during the period of Executive’s
employment with Bancorp or at any time thereafter, any such data and
confidential information of any kind, nature, or description concerning any
matters affecting or relating to Bancorp’s business, its customers, or its
services.  Executive agrees that all
memoranda, notes, records, papers, customer files, other documents, and all
copies thereof relating to Bancorp’s operations or business or matters related
to any of Bancorp’s customers, some of which may be prepared by Executive.  Executive further agrees that all media,
electronic or otherwise associated therewith containing such confidential
information held by or in the control of Executive, shall be Bancorp’s property
(“Bancorp Property”).  Upon termination
of employment, Executive shall promptly return all the Bancorp Property to
Bancorp.


 


11.                               DISPUTE RESOLUTION.  Except where such matters are deemed governed
by ERISA, the parties agree to submit any dispute arising under this Agreement
to final, binding, private arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction in Sacramento, California. 
This includes not only disputes about the meaning or performance of the
Agreement, but disputes about its negotiation, drafting, or execution.  Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction.  There shall be three arbitrators, one to be
chosen directly by each party, and the third arbitrator to be selected by the
two arbitrators so chosen.  If any
arbitration proceeding is brought for the enforcement of this Agreement or
because of an alleged dispute, breach or default in connection with this
Agreement, (i) the nonprevailing party shall pay the fees of the arbitrators
and all other


 


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costs of the
arbitration, including the cost of any record or transcripts of the
arbitrations and administrative fees; and (ii) the prevailing party shall be
entitled to recover reasonable attorney’s fees and any other costs and expenses
incurred in that action or proceeding, in addition to any other relief to which
it or he may be entitled.


 


12.                               NOTICES.  All notices, requests, demands, and other
communications provided for by this Agreement will be in writing and shall be
deemed sufficient upon receipt, when delivered personally or by a
nationally-recognized delivery service (such as Federal Express), or three (3)
business days after being deposited in the U.S. mail as certified mail, return
receipt requested, with postage prepaid, if such notice is addressed to the
party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.


 


	
  To Bancorp:

  	
  Western Sierra Bancorp

  
	
   

  	
  4080 Plaza Goldroado Circle

  
	
   

  	
  Cameron Park, California 95682

  
	
   

  	
  Attention: Gary D. Gall, Chief Executive Officer

  
	
   

  	
   

  
	
  To Executive:

  	
  Patrick J. Rusnak

  
	
   

  	
  111 Heaton Court

  
	
   

  	
  Granite Bay, California 95746

  



 


13.                               GENERAL PROVISIONS.


 


Governing
Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by federal ERISA, as applicable, and otherwise by the laws of the
State of California.


 


Saving
Provision.  If any
part of this Agreement is held to be unenforceable, it shall not affect any
other part. If any part of this Agreement is held to be unenforceable as
written, it shall be enforced to the maximum extent allowed by applicable law.


 


Survival
Provision. The confidential information and dispute
resolution provisions of this Agreement shall survive after termination of this
Agreement, and shall be enforceable regardless of any claim Employee may have
against Bancorp.  Also, if any benefits
provided in Section 8 of this Agreement are still owed, or obligations or
claims pursuant to Section 10 or 11 are still pending, at the time of
termination of this Agreement, this Agreement shall continue in force, with
respect to those obligations or claims, until such benefits are paid in full or
claims are resolved in full.  The
obligation in Section 10 shall survive this Agreement for an indefinite period.


 


Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.


 


Entire
Agreement.  This
Agreement constitutes the sole agreement of the parties regarding Executive’s
benefits in the event of termination or Change in Control and together with
Bancorp’s employee handbook governs the terms of Executive’s employment.  Where there is a conflict between the
employee handbook and this Agreement, the terms of this Agreement shall govern.


 


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Previous
Agreements.  This
Agreement replaces and supersedes all prior oral and written agreements between
the Executive and Bancorp, or any affiliates or representatives of Bancorp
regarding the subject matters set forth herein.


 


Waiver.  No waiver of any provision of this Agreement
shall be valid unless in writing, signed by the party against whom the waiver
is sought to be enforced.  The waiver of
any breach of this Agreement or failure to enforce any provision of this Agreement
shall not waive any later breach.


 


Assignment.  Executive shall not assign or transfer any of
Executive’s rights pursuant to this Agreement, wholly or partially, to any
other person or to delegate the performance of its duties under the terms of
this Agreement.  The rights and obligations
of Bancorp under this Agreement shall inure to the benefit of and be binding in
each and every respect upon the direct and indirect successors and assigns of
Bancorp, regardless of the manner in which the successors or assigns succeed to
the interests or assets of Bancorp.  This
Agreement shall not be terminated by the voluntary or involuntary dissolution
of Bancorp, by any merger, consolidation or acquisition where Bancorp is not
the surviving corporation, by any transfer of all or substantially all of Bancorp’s
assets, or by any other change in Bancorp’s structure or the manner in which
Bancorp’s business or assets are held. 
Executive’s employment shall not be deemed terminated upon the
occurrence of one of the foregoing events. 
In the event of any merger, consolidation or transfer of assets, this
Agreement shall be binding upon and shall inure to the benefit of the surviving
corporation or the corporation to which the assets are transferred.


 


Attorneys’
Fees.  If either
party institutes a proceeding to enforce its rights under, or to recover
damages for breach of, this Agreement, the prevailing party shall be awarded
all costs and expenses of the proceeding, including, but not limited to,
attorneys’ fees, filing and service fees, witness fees, and arbitrator’s fees.
If arbitration is commenced, the arbitrator will have full authority and
complete discretion to determine the “prevailing party” and the amount of costs
and expenses to be awarded under this paragraph.


 


14.                               ADVICE OF COUNSEL.  TERMS AND PROVISIONS OF THIS AGREEMENT. THIS
AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR
PREPARATION HEREOF.


 


	
  WESTERN SIERRA
  BANCORP

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gary D. Gall

  	
   

  	
  /s/ Patrick J. Rusnak

  	
   

  
	
   

  	
  Gary D. Gall, Chief Executive Officer

  	
   

  	
  Patrick J. Rusnak

  



 


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EXHIBIT B


 


EMPLOYMENT SEPARATION AGREEMENT

AND RELEASE OF CLAIMS


 


This is a confidential
agreement between you, Patrick J. Rusnak, and us, Western Sierra Bancorp.  This agreement is dated for reference
purposes                           ,
20      , which is the date we delivered this
agreement to you for your consideration. 
For purposes of this Agreement Western Sierra Bancorp together with each
of its subsidiaries or affiliates is referred to as “Bancorp.”


 


1.                                      TERMINATION OF
EMPLOYMENT.  Your employment
terminates [or was terminated] on                               ,
20       (the “Separation Date”).


 


2.                                      PAYMENTS.  In exchange for your agreeing to the release
of claims and other terms in this agreement, we will pay you the Severance
Benefit specified in Section 8 of the Employment Agreement between you and
Western Sierra Bancorp dated                         
, 2005 (the “Employment Agreement”).  You
acknowledge that we are not obligated to make these payments to you unless you
agree to comply with the terms of this agreement.


 


3.                                      COBRA
CONTINUATION COVERAGE.  Your normal
employee participation in Bancorp’s group health coverage will terminate three
months following your termination (“Separation Date”).  Continuation of group health coverage
thereafter will be made available to you and your dependents pursuant to
federal law (COBRA).  As long as you
timely elect COBRA continuation coverage, Bancorp will waive the requirement
that you pay for the cost of continuation coverage through the Separation
Date.  Continuation of group health
coverage thereafter is entirely at your expense, as provided under COBRA.


 


4.                                      TERMINATION OF
BENEFITS.  Except as provided in
paragraph 3 above, your participation in all employee benefit plans and
programs ended on the Separation Date. 
Your rights under any pension benefit or other plans in which you may
have participated will be determined in accordance with the written plan
documents governing those plans.


 


5.                                      FULL PAYMENT.  You acknowledge having received full payment
of all compensation of any kind (including wages, salary, vacation, sick leave,
commissions, bonuses and incentive compensation) that you earned as a result of
your employment by Bancorp.


 


6.                                      NO FURTHER
COMPENSATION.  Any and all agreements
to pay you bonuses or other incentive compensation are terminated, except for
any payments earned during active employment as determined in accordance with
the written plan documents governing those plans.  You understand and agree that you have no
right to receive any further payments for bonuses or other incentive
compensation.  Bancorp owes no further
compensation or benefits of any kind, except as described above.


 


7.                                      RELEASE OF
CLAIMS.


 


(a)                                  You
hereby release (i) Bancorp and its subsidiaries, affiliates, and benefit plans,
(ii) each of Bancorp’s past and present shareholders, Executives, directors,
agents, employees, representatives, administrators, fiduciaries and attorneys,
and (iii) the


 


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predecessors, successors, transferees and assigns of
each of the persons and entities described in this sentence, from any and all
claims of any kind, known or unknown, that arose on or before the date you
signed this agreement.


 


(b)                                 The
claims you are releasing include, without limitation, claims of wrongful
termination, claims of constructive discharge, claims arising out of employment
agreements, representations or policies related to your employment, claims arising
under federal, state or local laws or ordinances prohibiting discrimination or
harassment or requiring accommodation on the basis of age, race, color,
national origin, religion, sex, disability, marital status, sexual orientation
or any other status, claims of failure to accommodate a disability or religious
practice, claims for violation of public policy, claims of retaliation, claims
of failure to assist you in applying for future position openings, claims of
failure to hire you for future position openings, claims for wages or
compensation of any kind (including overtime claims), claims of tortious
interference with contract or expectancy, claims of fraud or negligent
misrepresentation, claims of breach of privacy, defamation claims, claims of
intentional or negligent infliction of emotional distress, claims of unfair
labor practices, claims arising out of any claimed right to stock or stock
options, claims for attorneys’ fees or costs, and any other claims that are
based on any legal obligations that arise out of or are related to your
employment relationship with us.


 


(c)                                  You
specifically waive any rights or claims that you may have under the California
Labor Code, the Civil Rights Act of 1964 (including Title VII of that Act), the
Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967 (ADEA),
the Americans with Disabilities Act of 1990 (ADA), the Fair Labor Standards Act
of 1938 (FLSA), the Family and Medical Leave Act of 1993 (FMLA), the Worker
Adjustment and Retraining Notification Act (WARN), the Employee Retirement
Income Security Act of 1974 (ERISA), the National Labor Relations Act (NLRA),
and all similar federal, state and local laws.


 


(d)                                 You
agree not to seek any personal recovery (of money damages, injunctive relief or
otherwise) for the claims you are releasing in this agreement, either through
any complaint to any governmental agency or otherwise.  You agree not to start any lawsuit or
arbitration asserting any of the claims you are releasing in this
agreement.  You represent and warrant
that you have not initiated any complaint, charge, lawsuit or arbitration
involving any of the claims you are releasing in this agreement.  You agree not to apply for future employment
with Bancorp and that Bancorp has no obligation to consider you for future
employment.


 


(e)                                  You
represent and warrant that you have all necessary authority to enter into this
agreement (including, if you are married, on behalf of your marital community)
and that you have not transferred any interest in any claims to your spouse or
to any third party.


 


(f)                                    This
agreement does not affect your rights, if any, to receive pension plan
benefits, medical plan benefits, unemployment compensation benefits or workers’
compensation benefits.  This agreement
also does not affect your rights, if any, under agreements, bylaw provisions,
insurance or otherwise, to be indemnified,


 


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defended or held harmless in connection with claims
that may be asserted against you by third parties.


 


(g)                                 You
understand that you are releasing potentially unknown claims, and that you have
limited knowledge with respect to some of the claims being released.  You acknowledge that there is a risk that,
after signing this agreement, you may learn information that might have
affected your decision to enter into this agreement.  You assume this risk and all other risks of
any mistake in entering into this agreement. 
You agree that this release is fairly and knowingly made.


 


(h)                                 You
are giving up all rights and claims of any kind, known or unknown, except for
the rights specifically given to you in this agreement.


 


8.                                      NO ADMISSION OF
LIABILITY.  Neither this agreement
nor the payments made under this agreement are an admission of liability or
wrongdoing by Bancorp.


 


9.                                      BANCORP
MATERIALS. You represent and warrant that you have, or no later than the
Separation Date will have, returned all keys, credit cards, documents and other
materials that belong to us.


 


10.                               NONDISCLOSURE AGREEMENT.  You will comply with the covenant regarding
confidential information in Section 10 of the Employment Agreement.


 


11.                               NO DISPARAGEMENT.
You may not disparage Bancorp or Bancorp’s business or products, and may not
encourage any third parties to sue Bancorp.


 


12.                               COOPERATION REGARDING
OTHER CLAIMS.  If any claim is
asserted by or against Bancorp as to which you have relevant knowledge, you
will reasonably cooperate with us in the prosecution or defense of that claim,
including by providing truthful information and testimony as reasonably
requested by us.


 


13.                               NO INTERFERENCE. You
will not, apart from good faith competition, interfere with Bancorp’s
relationships with customers, employees, vendors, or others.


 


14.                               INDEPENDENT LEGAL
COUNSEL.  You are advised and
encouraged to consult with an attorney before signing this agreement.  You acknowledge that you have had an adequate
opportunity to do so.


 


15.                               CONSIDERATION PERIOD.  You have 21 days from the date this agreement
is given to you to consider this agreement before signing it. You may use as
much or as little of this 21-day period as you wish before signing. If you do
not sign and return this agreement within this 21-day period, you will not be
eligible to receive the benefits described in this agreement.


 


16.                               REVOCATION PERIOD AND
EFFECTIVE DATE.  You have 7 calendar
days after signing this agreement to revoke it. To revoke this agreement after
signing it, you must deliver a written notice of revocation to Bancorp’s
President before the 7-day period expires. This agreement shall not become
effective until the 8th calendar day after you sign it.  If you revoke this agreement it will not
become effective or enforceable and you will not be entitled to the benefits
described in this agreement.


 


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17.                               GOVERNING LAW.  This agreement is governed by the laws of the
State of California that apply to contracts executed and to be performed
entirely within the State of California.


 


18.                               DISPUTE RESOLUTION.  Except where such matters are deemed governed
by ERISA, the parties agree to submit any dispute arising under this agreement
to final, binding, private arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction in Sacramento, California. 
This includes not only disputes about the meaning or performance of the
agreement, but disputes about its negotiation, drafting, or execution.  Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction.  There shall be three arbitrators, one to be
chosen directly by each party, and the third arbitrator to be selected by the
two arbitrators so chosen.  If any
arbitration proceeding is brought for the enforcement of this agreement or
because of an alleged dispute, breach or default in connection with this
agreement, (i) the nonprevailing party shall pay the fees of the arbitrators
and all other costs of the arbitration, including the cost of any record or
transcripts of the arbitrations and administrative fees; and (ii) the
prevailing party shall be entitled to recover reasonable attorney’s fees and
any other costs and expenses incurred in that action or proceeding, in addition
to any other relief to which it or he may be entitled.


 


19.                               ATTORNEYS’ FEES.  If either party institutes a proceeding to
enforce its rights under, or to recover damages for breach of, this agreement,
the prevailing party shall be awarded all costs and expenses of the proceeding,
including, but not limited to, attorneys’ fees, filing and service fees,
witness fees, and arbitrator’s fees.  If
arbitration is commenced, the arbitrator will have full authority and complete
discretion to determine the “prevailing party” and the amount of costs and
expenses to be awarded under this paragraph.


 


20.                               FINAL AND COMPLETE
AGREEMENT.  This agreement is the
final and complete expression of all agreements between us on all subjects and
supersedes and replaces all prior discussions, representations, agreements,
policies and practices. You acknowledge you are not signing this agreement
relying on anything not set out herein.


 


	
   

  	
  WESTERN SIERRA BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Gary D. Gall, Chief Executive Officer

  



 


 


I, THE UNDERSIGNED, HAVING BEEN ADVISED TO CONSULT WITH AN ATTORNEY,
HEREBY AGREE TO BE BOUND BY THIS AGREEMENT AND CONFIRM THAT I HAVE READ AND
UNDERSTOOD EACH PART OF IT.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Patrick J. Rusnak

  
	
   

  	
   

  	
   

  
	
   

  	
  Date

  



 


4-B





















 


Appendix
A


 


Goals/Expectations:


 


The following is a list of goals and expectations for the position of
Chief Operating Officer for Western Sierra Bancorp.  It is understood that to truly enhance the
organization, our COO must understand and embrace our current status while
providing guidance and support to enhance the organization, both culturally and
financially.


 


Defining Success:


 


1.     Get
to know the financials forward and backwards as well as the mission and
objective of the WSBA so you can represent the Bank to Investors.


 


2.     Become
the resident expert on the financials so that you can represent the Bank to the
board and related committees on all aspects of Bank performance.


 


3.     Gain
an understanding of the charters, history and relationships of the holding
company with its banks and develop a working relationship with those CEO’s.


 


4.     Using
the proper metrics, assist in managing the banks implementation of board stated
goals in a way that assures continued profitability and growth.


 


5.     Act
as a confidant, buffer and intermediary between the office of CEO and
management.


 


6.     Gain
the respect and confidence of the Board and Management in a way that allows you
to influence decisions made regarding goals, key hires, terminations, and Bank
policies.


 


7.     Oversee
the search, evaluation and implementation of all Merger and Acquisition
activity.


 


8.     Create5
an atmosphere of confidence and respect with management and the board in order
to step in as interim CEO, if needed


 


9.     Strategically
organize and manage the holding company as a true back office for the
subsidiaries including enhancing the management information systems in the
spirit of “best practices”.


 


10.   Insure
that WSBA is taking care of its employees in a way that balances profitability
with proper management principles.


 


5-B