exv10w23



 






Exhibit 10.23




Salary Continuation Agreement




     THIS SALARY CONTINUATION AGREEMENT (the “Agreement”) is made and entered into effective April
1, 2006 and amended September 27, 2007, by and between REDDING BANK OF COMMERCE, a California
Corporation (the “Bank”), and PATRICK J. MOTY (the “Executive”).


WHEREAS, the Executive’s competent and faithful efforts on behalf of the Bank have resulted in
substantial growth and profits to the Bank, and the Bank desires that the Executive continue in its
employ;



WHEREAS, the Company values the efforts, abilities, and accomplishments of the Executive,
recognizes that his future services are vital to its continued growth and profits, and wants to
encourage the Executive to remain an employee of the Bank. The Bank is willing to provide salary
continuation benefits to the Executive, which the Bank will pay from its general assets.




ARTICLE 1

Definitions



In consideration of the mutual promises, covenants, and agreements contained herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:




          1.1 “Change in Control” means (i) a Change in the Ownership of the Relevant Corporation, (ii)
a Change in the Effective Control of the Relevant Corporation, or (iii) or a Change in the
Ownership of a Substantial Portion of the Assets of the Relevant Corporation, as those terms are
defined herein. The events giving rise to the Change in Control must be objectively determinable,
and the Board, in a ministerial capacity, shall certify there is a Change in Control only when the
events giving rise to the Change in Control are objectively determinable. The Board shall not have
any discretionary authority to certify that there has been a Change in Control except as provided
in the preceding sentence. Notwithstanding anything to the contrary, (i) the term “Change in
Control” shall be interpreted in accordance with Section 409A; (ii) any event which constitutes a
“Change in Control” under Section 409A shall constitute a “Change in Control” for purposes of this
Agreement; (iii) and any event which does not constitutes a “Change in Control” under Section 409A
shall not constitute a “Change in Control” for purposes of this Agreement.




               1.1.1 “Change in the Effective Control of the Relevant Corporation” means either of the
following:



               i. That one person, or more than one person acting as a group, 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 Relevant Corporation possessing thirty-five percent
(35%) or more of the total voting power of the stock of the Relevant Corporation, provided that no
other corporation is a majority shareholder of the Relevant Corporation; or



               ii. That a majority of the members of the board of directors of the Relevant Corporation are
replaced during any twelve (12) month period by directors whose appointment or election is not
endorsed by a majority of the board members of the Relevant Corporation prior to the date of the
appointment or election, provided that no other corporation is a majority shareholder of the
Relevant Corporation.



               1.1.2 “Change in the Ownership of the Relevant Corporation” means that any one person, or more
than one person acting as a group, acquires ownership of stock of the Relevant Corporation 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 Relevant Corporation. However,
if any one person, or more than one person acting as a group, is considered to own more than fifty
percent (50%) of the total fair market value or total voting power of the stock of the Relevant
Corporation, the acquisition of additional stock by the same person or persons is not considered to
cause a Change in the Ownership of the Relevant Corporation (or to cause a Change in the Effective
Control of the Relevant Corporation as defined herein).



 









 




An increase in the percentage of stock owned by any one person, or persons acting as a group, as a
result of a transaction in which the Relevant Corporation acquires its stock in exchange for
property will be treated as an acquisition of stock for purposes of this Agreement. A Change in
the Ownership of the Relevant Corporation only occurs when there is a transfer of stock of the
Relevant Corporation (or issuance of stock of the Relevant Corporation) and stock in the Relevant
Corporation remains outstanding after the transaction.




               1.1.3 “Change in the Ownership of a Substantial Portion of the Assets of the Relevant
Corporation” means that any one person, or more than one person acting as a group, 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 Relevant Corporation 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 Relevant Corporation immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the Relevant Corporation, or the
value of the assets being disposed of, determined without regard to any liabilities associated with
such assets.



               1.1.4 “Relevant Corporation” means (i) the corporation for whom the Executive is performing
services at the time of the Change in Control event; (ii) the corporation that is liable for the
payment of the deferred compensation under this Plan; or (iii) a corporation that is a majority
shareholder of a corporation identified in sections (i) or (ii) above, or any corporation in a
chain of corporations in which each corporation is a majority shareholder of another corporation in
the chain, ending in a corporation identified in sections (i) or (ii) above. A majority
shareholder is a shareholder owning more than fifty percent (50%) of the total fair market value
and total voting power of such corporation. Stock underlying a vested option is considered owned
by the individual who holds the vested option, and the stock underlying an unvested option is not
considered owned by the individual who holds the unvested option. However, if a vested option is
exercisable for stock that is not substantially vested, the stock underlying the option is not
treated as owned by the individual who holds the option.”



               1.1.5 “Persons Acting as a Group.” Persons will not be considered to be acting as a group
solely because they purchase assets or stock of the same corporation at the same time, or, in the
case of stock, in the same public offering. However, persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of assets, or similar business transaction with the corporation. If a person,
including an entity shareholder, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of assets, or similar transaction, such shareholder is
considered to be acting as a group with other shareholders in a corporation only to the extent of
the ownership that corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.



          1.2 “Code” means the Internal Revenue Code of 1986, as from time to time amended.




          1.3 “Disability.” Notwithstanding anything to the contrary, under no circumstances shall
Executive be deemed to have a “Disability” for purposes of Sections 1.3 or 2.3 of the Agreement,
unless Executive (i) is 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 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 12
months, receiving income replacement benefits for a period of not less than 3 months under an
accident and health plan covering Bank employees.




          1.4 “Early Termination” means the Termination of Employment before the Normal Retirement Age
for reasons other than death, Disability, Termination for Cause or following a Change in Control.




          1.5 “Early Termination Date” means the month, day and year in which Early Termination occurs.




          1.6 “Effective Date” means September 30, 2007.




          1.7 “Executive Beneficiary” means the beneficiary designated by the Executive pursuant to
Article 4.1.




          1.8 “Normal Retirement Age” means the Executive’s 65th birthday.




          1.9 “Normal Retirement Date” means the later of the Normal Retirement Age or Termination of
Employment.




 









 








          1.10 “Plan Year” means a twelve (12) month period commencing on January 1, 2007 and ending on
December 31 of each year.




          1.11 “Termination for Cause” As defined in Article 5.




          1.12 “Termination of Employment” means that the Executive ceases to be employed by the Bank,
and actually separates from service to the Bank, for any reason, voluntary or involuntary, other
than by reason of a leave of absence approved by the Bank.




ARTICLE 2

Benefits




          2.1 Normal Retirement Benefit. Upon Termination of Employment on or after the Normal
Retirement Age for reasons other than death, the Bank shall pay to the Executive the benefit
described in this Section 2.1 in lieu of any other benefit under this agreement.




               2.1.1 Amount of Benefit. The “Normal Retirement Annual Benefit” to be paid to the Executive
under this Section 2.1 is One Hundred Fifty Thousand Dollars ($150,000.00). The Bank’s Board of
Directors, in its sole discretion, may increase the annual benefit under this section 2.1.1;
however any increase shall require the recalculation of Schedule A attached hereto.



               2.1.2 Payment of Benefit. The Bank shall pay the annual benefit to the Executive in twelve
(12) equal monthly installments payable on the first day of each month commencing with the month
following the Executive’s Normal Retirement Date. The annual benefit shall be paid to the
Executive for life. In the event Executive is a “specified employee,” as defined in Section 409A
of the Code, at Termination of Employment, payments made under this Section shall commence on the
date which is six (6) months after the date of Executive’s Termination of Employment.



               2.1.3 Benefit Increases. Commencing on the first anniversary of the first benefit payment,
and continuing on each subsequent anniversary, the Bank’s Board of Directors, in its sole
discretion, may increase the Normal Retirement Benefit.



               2.1.4 Deferred Compensation Account. Solely for purposes of determining the benefits set
forth in Sections 2.2, 2.3, and 3.2, the Bank shall calculate a Deferred Compensation Account. The
amount of the Deferred Compensation Account shall be an amount determined to be the present value
of the benefit under this Section 2.1 based on the then designated deferred compensation rate and
the life expectancy of the Executive on the day in which any benefit under any of Sections 2.2,
2.3, or 3.2 becomes vested, as determined by tables in IRS Publication 590.



          2.2 Early Termination Benefit. Upon Early Termination, the Bank shall pay to the
Executive the benefit described in this Section 2.2 in lieu of any other benefit under this
agreement.




               2.2.1 Amount of Benefit. The benefit to be paid to the Executive under this Section 2.2 is
the Early Termination Lump Sum set forth on Schedule A, or the amount accrued in the Deferred
Compensation Account on the early termination date, whichever is greater. The Bank’s Board of
Directors, in its sole discretion, may, at any time, increase the benefit under this Section 2.2.1;
however, any such increase shall require a recalculation of Schedule A.



               2.2.2 Payment of Benefit. The Bank shall pay this benefit to the Executive in a lump sum
within sixty (60) days following Early Termination. In the event Executive at any time becomes a
“specified employee,” as defined in Section 409A of the Code, the lump sum payment made under this
Section shall be made on the date which is six (6) months after the date of Executive’s Termination
of Employment. Executive may elect to receive the benefit under this Section 2.2.2 in sixty equal
monthly installments, so long as such election is made in writing at the time that this agreement
is executed and attached to this Agreement with the Early Termination Lump Sum set forth on
Schedule A.



          2.3 Disability Benefit. If the Executive terminates employment due to Disability
prior to Normal Retirement Age, the Bank shall pay to the Executive the benefit described in this
Section 2.3 in lieu of any other benefit under this Agreement.




 









 








               2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the Disability Annual Benefit
set forth in Schedule A for the Plan Year, or an annuity (assuming the then current deferred
compensation rate) with the value of the amount accrued in the Deferred Compensation Account upon
disability, whichever is greater. The Bank’s Board of Directors, in its sole discretion, may, at
any time, increase the benefit under this Section 2.3.1; however, any such increase shall require
the recalculation of Schedule A.



               2.3.2 Payment of Benefit. The Bank shall pay this annual benefit to the Executive in twelve
(12) monthly installments payable on the first day of each month commencing with the month
following the Executive’s termination of employment due to disability. The annual benefit shall be
paid to the Executive for life.



          2.4 Change in Control Benefit. Upon a Change in Control, the Bank shall pay to the
Executive the benefit described in this Section 2.4 in lieu of any other benefits under this
Agreement.




               2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the Change of Control Annual
Benefit set forth in Schedule A.



               2.4.2 Payment of Benefit. The Bank shall pay this annual benefit to the Executive in twelve
(12) monthly installments payable on the first day of each month commencing with the month
following the Executive’s Normal Retirement Age. The annual benefit shall be paid to the Executive
for life.



               2.4.3 Excess Parachute Payment. Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not pay any benefit under this Agreement to the extent the benefit would
create an excise tax under the excess parachute rules of Section 280G of the code.



ARTICLE 3

Death Benefits




          3.1 Death during Active Service. If the Executive dies while in the active service of
the Bank, the Bank shall pay to the Executive Beneficiary the Normal Retirement Annual Benefit for
a period of twenty years in lieu of any other benefit under this Agreement. The Normal Retirement
Annual Benefit shall be paid to the Executive Beneficiary in twelve (12) equal monthly installments
payable on the first day of each month commencing with the month following the Executive’s Death,
for a period of twenty years.




               3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is the Normal Retirement
Benefit amount described in Section 2.1.1.



               3.1.2 Payment of Benefit. The Bank shall pay the annual benefit to the Executive’s
beneficiary in twelve (12) equal monthly installments payable on the first day of each month
commencing with the month following the Executive’s death. The annual benefit shall be paid to the
Executive’s Beneficiary for a period of twenty years.



          3.2 Death during Payment of a Lifetime Benefit. If the Executive dies after any
lifetime benefit payments have commenced under this Agreement but before the value of the Deferred
Compensation Account is fully paid, the Bank shall pay all remaining benefits to the Executive
Beneficiary at the same time and in the same amounts they would have been paid to the Executive had
the Executive lived to his full life expectancy, as determined by tables in IRS Publication 590,
but not less than twenty years.




 









 








          3.3 Death After Termination of Employment But Before Payment of a Lifetime Benefit
Commences. If the Executive is entitled to a lifetime benefit under this Agreement, but dies
prior to the commencement of payments of such benefit, the Bank shall pay the same benefit to the
Executive Beneficiary that the Executive would have received had he lived to his full life
expectancy, as determined by tables in IRS Publication 590, but not less than 20 years. Such
benefits shall commence on the first day of the month following the date of the Executive’s death.




ARTICLE 4

Beneficiaries




          4.1 Beneficiary Designations. The Executive shall designate an Executive Beneficiary
by filing a written beneficiary designation with the Bank. The Executive may revoke or modify the
designation at any time by filing a new designation. However, designations will only be effective
if signed by the Executive and received by the Bank during the Executive’s lifetime. The
Executive’s beneficiary designation shall be deemed automatically revoked if the Executive
Beneficiary predeceases the Executive, or if the Executive names a spouse as Executive Beneficiary
and the marriage is subsequently dissolved. If the Executive dies without a valid Executive
Beneficiary, all payments which would have been paid to Executive’s Beneficiary shall be made to
the Executive’s estate.




          4.2 Facility of Payment. If a benefit is payable to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of his or her property, the Bank,
in its discretion, may pay such benefit to the guardian, legal representative or person having the
care or custody of such minor, incapacitated person or incapable person.




ARTICLE 5

General Limitations





	5.1	 	Termination for Cause. Notwithstanding any provisions of this Agreement to the
contrary, the Bank shall not pay any benefit under this Agreement if the Bank terminates the
Executive’s employment for:






	 	•	 	Willful breach of, habitual neglect of, willful failure to perform, or
inability to perform, Executive duties and obligations as President and
Chief Executive Officer.
	 
	 	•	 	Illegal conduct, constituting a crime involving moral turpitude,
conviction of a felony, or any conduct detrimental to the interests of the
Employer.
	 
	 	•	 	Physical or mental disability rendering Executive incapable of performing
his duties for a consecutive period of 180 days (during which time Executive
shall continue to receive his base salary and other benefits, provided his
accrued sick leave has first been exhausted), or by death; or
	 
	 	•	 	Determination by Employer’s Board of Directors that the continued
employment of Executive is detrimental to the best interests of the
Employer, or for any reason whatsoever as determined by Employer’s Board of
Directors and in the sole and absolute discretion of the Employer’s Board of
Directors.





          5.2 Suicide or Misstatement. The Bank shall not pay any benefit under this Agreement
if the Executive commits suicide within three (3) years after the date of September 30, 2007. In
addition, the Bank shall not pay any benefit under this Agreement if the Executive has made any
material misstatement of fact on an employment application or resume provided to the Bank, or on
any application for any benefits provided by the Executive to the Bank.




 









 








ARTICLE 6

Claims and Review Procedures




          6.1 Claims Procedure. The Bank shall notify any person or entity that makes a claim
under this Agreement (the “Claimant”) in writing, within ninety (90) days of Claimant’s written
application for benefits, of his or her eligibility or non-eligibility for benefits under the
Agreement. If the Bank determines that the Claimant is not eligible for benefits or full benefits,
the notice shall set forth (1) the specific reasons for such denial, (2) a specific reference to
the provisions of the Agreement on which the denial is based, (3) a description of any additional
information or material necessary for the Claimant to perfect his or her claim, and a description
of why it is needed, (4) an explanation of this Agreement’s claims review procedure and other
appropriate information as to the steps to be taken if the Claimant wishes to have the claim
reviewed, and (5) a time within which review must be requested. If the Bank determines that there
are special circumstances requiring additional time to make a decision, the Bank shall notify the
Claimant of the special circumstances and the date by which a decision is expected to be made, and
may extend the time for up to an additional ninety (90) days.




          6.2 Review Procedure. If the Claimant is determined by the Bank not to be eligible
for benefits, or if the Claimant believes that he or she is entitled to greater or different
benefits, the Claimant shall have the opportunity to have such claim reviewed by the Bank by filing
a petition for review with the Bank within sixty (60) days after receipt of the notice issued by
the Bank. Said petition shall state the specific reasons which the Claimant believes entitle him
or her to benefits or to greater or different benefits.



Within sixty (60) days after receipt by the Bank of the petition, the Bank shall afford the
Claimant (and counsel, if any) an opportunity to present his or her position to the Bank verbally
or in writing and the Claimant (or counsel) shall have the right to review the pertinent documents.
The Bank shall notify the Claimant of its decision in writing within the sixty (60) day period,
stating the basis of its decision, written in a manner calculated to be understood by the Claimant
and referencing the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty (60) day period is not sufficient, the decision may be
deferred for up to another sixty (60) days at the election of the Bank, but notice of this deferral
shall be given to the Claimant.




ARTICLE 7

General Terms




          7.2 Purpose. The Plan is intended to constitute an unfunded arrangement maintained by
the Bank primarily for the purpose of providing deferred compensation plan for a select group of
management or highly compensated employees, as described in sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974 (“ERISA”).




          7.3 Amendments and Termination. This Agreement may be amended or terminated only by a
written agreement signed by the Bank and the Executive. Notwithstanding the preceding, the Bank
may amend or terminate this Agreement at any time upon notice to the Executive if, pursuant to
legislative, judicial or regulatory action, continuation of this Agreement without such amendment
would: (1) cause benefits to be taxable to the Executive prior to actual receipt; or (ii) result in
significant financial penalties or other significantly detrimental ramifications to the Bank (other
than the financial impact of paying any provided benefits).




          7.4 Binding Effect. This Agreement shall bind the Executive and the Bank, and their
beneficiaries, survivors, executors, successors, administrative and transferees.




          7.5 No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of the Bank, nor does it
limit or restrict the Bank’s right to discharge the Executive. It also does not require the
Executive to remain an employee nor does it limit or restrict the Executive’s right to terminate
employment at any time.




          7.6 Non-Transferability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.




 









 








          7.7 Reorganization. The Bank shall not merge or consolidate into or with another
company, or reorganize, or sell substantially all of its assets to another company, firm, or person
unless such succeeding or continuing company, firm, or person agrees to assume and discharge the
obligations of the Bank under this Agreement or unless any such activity would constitute a Change
of Control. Upon the occurrence of such event, the term “Bank” as used in this Agreement shall be
deemed to refer to the successor or survivor company.




          7.8 Tax Withholding. The Bank shall withhold any taxes that are required to be
withheld from the benefits provided under this Agreement.




          7.9 Applicable Law. The Agreement and all rights hereunder shall be governed by the
laws of California, except to the extent preempted by the laws of the United States of America.




          7.10 Interpretation of Plan. To the extent not preempted by federal law, the Plan
shall be governed and construed under the laws of the state of California (other than its choice of
law rules) as in effect from time to time. Notwithstanding any provision to the contrary, this
Plan shall be interpreted and construed to comply with Section 409A and the applicable provisions
of ERISA.




          7.11 Unfunded Arrangement. The Executive and the Executive Beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits
represent the mere promise by the Bank to pay such benefits.



The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the
Executive’s life is a general asset of the Bank to which the Executive and Executive Beneficiary
have no preferred or secured claim.




          7.12 Entire Agreement. This Agreement constitutes the entire agreement between the
Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive by
virtue of this Agreement other than those specifically set forth herein.




          7.13 Administration. The Bank shall have powers which are necessary to administer
this Agreement, including but not limited to:




               7.13.1 Establishing and revising the method of accounting for the Agreement;



               7.13.2 Maintaining a record of benefit payments; and



               7.13.3 Establishing rules and prescribing any forms necessary or desirable to administer the
Agreement.



          7.14 Named Fiduciary. The Bank shall be the named fiduciary and Plan administrator
under this Agreement. It may delegate to others certain aspects of the management and operational
responsibilities including the employment of advisors and the delegation of ministerial duties to
qualified individuals.




          7.15 Attorney’s Fees and Costs. If any action at law or in equity, including
arbitration, is necessary to enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys’ fees, costs, and expert witness fees, in addition to any
other relief to which that party may be entitled.




 









 








               IN WITNESS WHEREOF, the Executive and the Bank have signed this Agreement.



	 	 	 
	EXECUTIVE
	 	BANK OF COMMERCE HOLDINGS
	 	 	 
	By /s/ Patrick J. Moty
	 	By /s/ Kenneth R. Gifford, Jr.
	 
	 	 
	PATRICK J. MOTY
	 	KENNETH R. GIFFORD, JR.,
	 
	 	Chairman
	 
	 	By /s/ David H. Scott
	 
	 	 
	 
	 	DAVID H. SCOTT, Secretary
	 	 	 
	 
	 	REDDING BANK OF COMMERCE
	 	 	 
	 
	 	By /s/ Kenneth R. Gifford, Jr.
	 
	 	 
	 
	 	KENNETH R. GIFFORD, JR.,

Chairman

By /s/ David H. Scott
	 
	 	 
	 
	 	DAVID H. SCOTT, Secretary






 









 






BENEFICIARY DESIGNATION




PATRICK J. MOTY



I designate the following as beneficiary of any death benefits under this Agreement:



 Primary: Eva M. Moty



Contingent:                                                                    
                   
              



I understand that I may change these beneficiary designations by filing a new written designation
with the Bank. I further understand that the designations will be automatically revoked if the
named beneficiary predeceases me, or, if I have named by spouse as beneficiary and our marriage is
subsequently dissolved.




Signature: /s/ Patrick J. Moty

Date: September 27, 2007



Received this ___27___day of ___September                      2007.



By: Kenneth R. Gifford, Jr.



Title: Chairman




 









 








Election of Payment

For Early Termination Benefit

PATRICK J. MOTY



I, Patrick J. Moty hereby elect to receive any Early Termination Benefit, as described in Section
2.2 of the September 27, 2007 Salary Continuation Agreement, in the following form:





	o	 	A lump sum payment to be made after Early Termination, as provided in Section 2.2
	 
	þ	 	In sixty (60) equal monthly installments, to begin sixty (60) days after Early
Termination, unless I become a “specified employee,” as defined in Section 409A
of the Code, then such installments shall begin six (6) months after Early
Termination.