Document:

Exhibit

10.57

 

NOTWITHSTANDING

ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF WESTERN SIERRA BANCORP’S

COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE WESTERN SIERRA BANCORP

1999 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY THE SHAREHOLDERS OF

WESTERN SIERRA BANCORP.

 

WESTERN

SIERRA BANCORP

NONQUALIFIED STOCK

OPTION AGREEMENT

 

This Nonqualified

Stock Option Agreement (the “Agreement”) is made and entered into as of the

31st day of December, 2002, by and between Western Sierra Bancorp, a California

corporation (the “Bancorp”), and William Eames, (“Optionee”);

 

WHEREAS, pursuant

to the Western Sierra Bancorp 2002 Stock Option Plan (the “Plan”), a copy of

which is attached hereto, the Board of Directors of the Bancorp has authorized

granting to Optionee a nonqualified stock option to purchase all or any part of

Four Hundred  (400) authorized but

unissued shares of the Bancorp’s common stock at the price of Twenty-Six

Dollars and Fifty Cents ($26.50) per share, such option to be for the term and

upon the terms and conditions hereinafter stated;

 

NOW, THEREFORE, it

is hereby agreed:

 

1. 

Grant of Option.  Pursuant to said action of the Board of Directors, the Bancorp

hereby grants to Optionee the option to purchase, upon and subject to the terms

and conditions of the Plan which is incorporated in full herein by this

reference, all or any part of Four Hundred 

(400) shares of the Bancorp’s common stock (hereinafter called “stock”)

at the price of Twenty-Six Dollars and Fifty Cents ($26.50) per share, which

price is not less than one hundred percent (100%) of the fair market value of

the stock as of the date of action of the Board of Directors granting this

option.

 

2. 

Exercisability.  This option shall be exercisable as to:

 

	

  Number of Shares

  	

   

  	

  Vesting

  Date

  
	

  400

  	

   

  	

  Immediate

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  

 

This option shall remain

exercisable as to all vested shares until December 31, 2012 (but not later than

ten (10) years from the date this option is granted) unless this option has

expired or terminated earlier in accordance with the provisions hereof or in

the Plan.  Subject to paragraphs 4 and

5, shares as to which this option becomes exercisable pursuant to the foregoing

provision may be purchased at any time prior to expiration of this option.

 

3. 

Exercise of Option.  This option may be exercised by written notice (substantially in

the form as that which is attached as Exhibit A) delivered to the Bancorp

stating the number of shares with respect to which this option is being exercised,

together with (a) cash in the amount of the purchase price of such shares, or

(b) subject to applicable law, with the Bancorp’s stock previously acquired by

Optionee and held by Optionee for a period of at least six months.  Notwithstanding the foregoing, in the event

Optionee does exercise the option by utilizing (b) above, Optionee should

obtain tax advice as to the consequences of such action.  Not less than ten (10) shares may be

purchased at any one time unless the number purchased is the total number which

may be purchased under this option and in no event may the option be exercised

with respect to fractional shares.  Upon

exercise, Optionee shall make appropriate arrangements and shall be responsible

for the withholding of any federal and state taxes then due.

 

4. 

Cessation of Directorship or Employment.  Except as provided in Paragraphs 2 and 5

hereof, if Optionee shall cease to be a director or an employee of the Bancorp

or a subsidiary corporation for any reason other than Optionee’s death or

disability [as defined in Section 22(e)(3) of the Internal Revenue Code of

1986, as amended from time to time (the “Code”)], this option shall expire

three (3) months thereafter.  During the

three (3) month period this option shall be exercisable only as to those

installments, if any, which had accrued as of the date when Optionee ceased to

be a director or an employee of the Bancorp or a subsidiary corporation.  If Optionee is both a director and an

employee, then such option shall expire three (3) months after the latter of

the date of termination of Optionee’s directorship or employment.

 

5. 

Termination of Employment for Cause.  If Optionee’s employment with the Bancorp or

a subsidiary corporation is terminated for cause, this option shall expire

thirty (30) days from the date of such termination.  Termination for cause shall include, but not be limited to,

termination for malfeasance or gross misfeasance in the performance of duties

or conviction of a crime involving moral turpitude, and, in any event, the

determination of the Board of Directors with respect thereto shall be final and

conclusive.

 

6. 

Nontransferability; Death or Disability of Optionee.  This option shall not be transferable except

by will or by the laws of descent and distribution and shall be exercisable

during Optionee’s lifetime only by Optionee. 

If Optionee dies while serving as a director or an employee of the

Bancorp or a subsidiary corporation, or during the three (3) month period

referred to in Paragraph 4 hereof, this option shall expire one (1) year after

the date of Optionee’s death or on the day specified in Paragraph 2 hereof,

whichever is earlier.  After Optionee’s

death but before such expiration, the persons to whom Optionee’s rights under

this option shall have passed by will or by the laws of descent and

distribution or the executor or administrator of Optionee’s estate shall have

the right to exercise this option as to those shares for which installments had

 

1

 

accrued under Paragraph 2

hereof as of the date on which Optionee ceased to be a director or an employee

of the Bancorp or a subsidiary corporation.

 

If Optionee

terminates his or her directorship or employment because of disability (as

defined in Section 22(e)(3) of the Code), Optionee may exercise this option to

the extent he or she is entitled to do so at the date of termination, at any

time within one (1) year of the date of termination, or before the expiration

date specified in Paragraph 2 hereof, whichever is earlier.

 

7. 

Employment. 

This Agreement shall not obligate the Bancorp or a subsidiary

corporation to employ Optionee for any period, nor shall it interfere in any

way with the right of the Bancorp or a subsidiary corporation to reduce

Optionee’s compensation.

 

8. 

Privileges of Stock Ownership.  Optionee shall have no rights as a

shareholder with respect to the Bancorp’s stock subject to this option until

the date of issuance of stock certificates to Optionee.  Except as provided in the Plan, no

adjustment will be made for dividends or other rights for which the record date

is prior to the date such stock certificates are issued.

 

9. 

Modification and Termination.  The rights of Optionee are subject to

modification and termination upon the occurrence of certain events as provided

in Sections 13 and 14 of the Plan.

 

10. 

Notification of Sale.  Optionee agrees that Optionee, or any person acquiring shares

upon exercise of this option, will notify the Bancorp not more than five (5)

days after any sale or other disposition of such shares.

 

11. 

Representations of Optionee.  No shares issuable upon the exercise of this

option shall be issued and delivered unless and until the Bancorp has complied

with all applicable requirements of California and federal law and of the

Securities and Exchange Commission and the California Department of

Corporations pertaining to the issuance and sale of such shares, and all

applicable listing requirements of the securities exchanges, if any, on which

shares of the Bancorp of the same class are then listed.  Optionee agrees to ascertain that such

requirements shall have been complied with at the time of any exercise of this

option.  In addition, if the Optionee is

an “affiliate” for purposes of the Securities Act of 1933, there may be

additional restrictions on the resale of stock, and Optionee therefore agrees

to ascertain what those restrictions are and to abide by the restrictions and

other applicable federal and state securities laws.

 

Furthermore, the

Bancorp may, if it deems appropriate, issue stop transfer instructions against

any shares of stock purchased upon the exercise of this option and affix to any

certificate representing such shares the legends which the Bancorp deems

appropriate.

 

Optionee

represents that the Bancorp, its directors, officers, employees and agents have

not and will not provide tax advice with respect to the option, and Optionee

agrees to consult with his or her own tax advisor as to the specific tax

consequences of the option, including the application and effect of federal,

state, local and other tax laws.

 

12. 

Notices. 

Any notice to the Bancorp provided for in this Agreement shall be

addressed to it in care of its President or Chief Financial Officer at its main

office and any notice to Optionee shall be addressed to Optionee’s address on

file with the Bancorp or a subsidiary corporation, or to such other address as

either may designate to the other in writing. 

Any notice shall be deemed to be duly given if and when enclosed in a

properly sealed envelope and addressed as stated above and deposited, postage

prepaid, with the United States Postal Service.  In lieu of giving notice by mail as aforesaid, any written notice

under this Agreement may be given to Optionee in person, and to the Bancorp by

personal delivery to its President or Chief Financial Officer.

 

IN WITNESS WHEREOF, the

parties hereto have executed this Agreement as of the day and year first above

written.

 

	

  OPTIONEE

  	

  WESTERN

  SIERRA BANCORP

  
	

   

  	

   

  
	

  By 

  	

     /s/ William Eames

  	

   

  	

  By

  	

     /s/ Gary Gall

  
	

   

  	

  William Eames

  	

   

  	

   

  	

  Gary Gall, President

  & CEO

  
	

   

  	

   

  
	

   

  	

  By

  	

     /s/ Chuck Bacchi

  
	

   

  	

   

  	

  Chuck Bacchi, Chairman

  
						

 

2Exhibit
10.58

 

SALARY CONTINUATION AGREEMENT

 

This Agreement is made
and entered into this 22nd day of June, 2002, by and between Central
California Bank, a California banking corporation (the “Employer”), and
Frederick Rowden, an individual residing in the State of California
(hereinafter referred to as the “Executive”).

 

RECITALS

 

WHEREAS, the Executive is
an employee of the Employer and is serving as its President and Chief Executive
Officer;

 

WHEREAS, the Executive’s
experience and knowledge of the affairs of the Employer and the banking
industry are extensive and valuable;

 

WHEREAS, it is deemed to
be in the best interests of the Employer to provide the Executive with certain
salary continuation benefits, on the terms and conditions set forth herein, in
order to reasonably induce the Executive to remain in the Employer’s
employment; and

 

WHEREAS, the Executive
and the Employer wish to specify in writing the terms and conditions upon which
this additional compensatory incentive will be provided to the Executive, or to
the Executive’s spouse or the Executive’s designated benefi­ciaries, as the
case may be;

 

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

 

AGREEMENT

 

1.                                      Terms and Definitions.

 

1.1.                            Administrator.  The Employer shall be the “Administrator”
and, solely for the purposes of ERISA, the “fiduciary” of this Agreement where
a fiduciary is required by ERISA.

 

1.2.                            Annual Benefit.  The term “Annual Benefit” shall mean an
annual sum of fifty thousand dollars ($50,000) multiplied by the Applicable
Percentage (defined below) and then reduced to the extent required: (i) under
the other provisions of this Agreement; (ii) by reason of the lawful order of
any regulatory agency or body having jurisdiction over the Employer; and (iii)
in order for the Employer to properly comply with any and all applicable state
and federal laws, including, but not limited to, income, employment and
disability income tax laws (eg., FICA, FUTA, SDI).

 

1.3.  Applicable Percentage.  The term “Applicable Percentage” shall mean
that percentage listed on Schedule “A” attached hereto which is adjacent to the
number of complete years (with a “year” being the performance of personal
services for or on behalf of the Employer as an employee for a period of 365
days) which have elapsed starting from the Effective Date of this Agreement and
ending on the date the Executive’s employment is terminated for purposes of
this Agreement.

 

1.4.                            Beneficiary.  The term “beneficiary” or “designated beneficiary” shall mean the
person or persons whom the Executive shall designate in a valid Beneficiary
Designation, a copy of which is attached hereto as Exhibit “B”, to receive the
benefits provided hereunder.  A
Beneficiary Designation shall be valid only if it is in the form attached
hereto and made a part hereof and is received by the Administrator prior to the
Executive’s death.

 

1.5.                            The Code.  The “Code” shall mean the Internal Revenue Code of 1986, as
amended (the “Code”).

 

1

 

1.6.                            Disability/Disabled.  The term “Disability” or “Disabled” shall
have the same meaning given such term in the principal disability insurance
policy covering the Executive, which is incorporated herein by reference.  In the event the Executive is not covered by
a disability policy containing a definition of “Disability” or “Disabled,”
these terms shall mean an illness or incapacity which, having continued for a
period of one hundred and eighty (180) consecutive days, prevents the Executive
from adequately performing the Executive’s regular employment duties.  The determination of whether the Executive is
Disabled shall be made by an independent physician selected by mutual agreement
of the parties.

 

1.7.                            Effective Date.  The term “Effective Date” shall mean August
1, 2001.

 

1.8.                            ERISA. 
The term “ERISA” shall mean the Employee Retirement Income Security Act
of 1974, as amended.

 

1.9.                            Plan Year.  The term “Plan Year” shall mean the Employer’s calendar year.

 

1.10.                     Retirement.  The term “Retirement” or “Retires” shall refer to the date on
which the Executive attains the age of at least sixty-seven (67) and
acknowledges in writing to the Employer to be the last day he will provide any
significant personal services, whether as an employee, director or independent
consultant or contractor, to the Employer. 
For purposes of this Agreement, the phrase “significant personal
services” shall mean more than ten (10) hours of personal services rendered to
one or more individuals or entities in any thirty (30) day period.

 

1.11                        Sale of Business.  The term “Sale of Business” shall mean any
(i) merger, consolidation or reorganization of the Employer’s parent or Western
Sierra Bancorp (“Parent”) in which (A) the Parent does not survive or (B) the
Parent survives with a resulting change in beneficial ownership of the Parent
of more than 50% of the voting shares of the Parent, (ii) sale of more than 50%
of the beneficial ownership of the voting shares of the Parent to any person or
group of persons acting in concert, or (iii) transfer or sale of more than 50%
of the total market value of the assets of the Parent as reflected in the most
recent published balance sheet of the Parent to another corporation that is not
a wholly-owned subsidiary of the Parent. 
Notwithstanding anything to the contrary, the merger of Employer with
the Parent or any subsidiary of the Parent shall not be deemed a “Sale of
Business.”

 

1.12.                     Surviving Spouse.  The term “Surviving Spouse” shall mean the
person, if any, who shall be legally married to the xecutive on the date of the
Executive’s death.

 

1.13.                     Termination for Cause.  The term “Termination for Cause” shall mean
the termination of the Executive by the Employer upon the occurrence of any of
the following events:

 

(i) the Executive
is convicted of illegal activity by a court of competent jurisdiction or pleads
guilty to or nolo contendere to illegal activity, which activity materially adversely
affects the  Employer’s reputation in
the community or which evidences the lack of the Executive’s fitness or ability
to perform the Executive’s duty as determined by the Board of Directors in good
faith;

 

(ii) the Executive
has committed any illegal or dishonest act which would cause termination of
coverage under the Employer’s Bankers’ Blanket Bond as to the Executive, as
distinguished from termination of coverage as to the Employer as a whole;

 

(iii) the
Executive materially fails to perform, or habitually neglects, the Executive’s
duties or commits a material act of malfeasance or misfeasance in connection
therewith;

 

(iv) an action is
commenced by any bank regulatory agency having jurisdiction, to remove or
suspend the Executive from office, or a cease and desist order under 12 U.S.C.
1818(b) or any similar Federal or state statute is issued against the Executive
or the Employer which calls for the Executive’s suspension or removal from
office;

 

(v) deliberate or
repeated disregard of the policies and rules of the Employer as adopted by the
Employer’s board of directors;

 

(vi) unauthorized
use or disclosure of any of the trade secrets or confidential information of
the Employer or Parent;

 

(vii) competition
with the Employer or the Parent or any of Parent’s subsidiaries (collectively
referred to “WSB Group”), inducement of any customer of any entity in the WSB
Group to breach a contract with any entity in the WSB Group or inducement of
any employee or agent of any entity in the WSB Group to terminate his or her
employment or agency relationship with such entity in the WSB Group;

 

2

 

(vii) gross
negligence adversely impacting the Employer or the Parent; or

 

(viii) willful
breach of this Agreement or any other willful misconduct.

 

2.                                      Scope, Purpose and Effect.

 

2.1.                            Contract of Employment.  Although this Agreement is intended to
provide the Executive with an additional incentive to remain in the employ of
the Employer, this Agreement shall not be deemed to constitute a contract of
employment between the Executive and the Employer nor shall any provision of
this Agreement restrict or expand the right of the Employer to terminate the
Executive’s employment.  This Agreement
shall have no impact or effect upon any separate written employment agreement
which the Executive may have with the Employer, it being the parties’ intention
and agreement that unless this Agreement is specifically referenced in said
employment agreement (or any modification thereto), this Agreement (and the
Employer’s obligations hereunder) shall stand separate and apart and shall have
no effect upon, nor be affected by, the terms and provisions of said employment
agreement.

 

2.2.                            Fringe Benefit.  The benefits provided by this Agreement are
granted by the Employer as a fringe benefit to the Executive and are not a part
of any salary reduction plan or any arrangement deferring a bonus or a salary
increase.  The Executive has no option
to take any current payments or bonus in lieu of the benefits provided by this
Agreement.

 

3.                                      Payments Upon or After Retirement.

 

3.1.                            Payments Upon Retirement.  If the Executive shall remain in the
continuous employment of the Employer until Retirement, the Executive shall be
entitled to be paid the Annual Benefit, with the Applicable Percent equal to
100% for a period of fifteen (15) years, in one hundred eighty (180) equal
monthly installments, with each installment to be paid on the first day of each
month, beginning with the month following the month in which the Executive
Retires or upon such later date as may be mutually agreed upon in writing by
the Executive and the Employer in advance of said Retirement Date.

 

3.2.                            Payments in the Event of Death After Retirement.  The Employer and Executive  agree that if the Executive Retires, but
shall die before receiving all of the one hundred eighty (180) monthly payments
described in paragraph 3.1 above, the Employer will make the remaining monthly
payments, undiminished and on the same schedule as if the Executive had not
died, to the Executive’s designated beneficiary.  If a valid Beneficiary Designation is not in effect, then the
remaining amounts due to the Executive under the term of this Agreement shall
be paid to the Executive’s Surviving Spouse. 
If the Executive leaves no Surviving Spouse, the remaining amounts due
to the Executive under the terms of this Agreement shall be paid to the duly
qualified personal representative, executor or administrator of the Executive’s
estate.

 

4.                                      Payments in the Event Death or Disability Occurs Prior
to Retirement.

 

4.1.                            Payments in the Event of Death Prior to Retirement.  In the event the Executive should die while
actively employed by the Employer at any time after the Effective Date of this
Agreement, but prior to Retirement, the Employer agrees to pay the Annual
Benefit with the Applicable Percentage equal to 100% for a period of fifteen
(15) years in one hundred eighty (180) equal monthly installments, with each
installment to be paid on the first of each month beginning with the month
following the Executive’s death, to the Executive’s designated
beneficiary.  If a valid Beneficiary
Designation is not in effect, then the amounts due to the Executive under the
terms of this Agreement shall be paid to the Executive’s Surviving Spouse.  If the Executive leaves no Surviving Spouse,
the amounts due to the Executive under the terms of this Agreement shall be
paid to the duly qualified personal representative, executor or administrator
of the Executive’s estate.

 

4.2.                            Payments in the Event of Disability Prior to
Retirement.  In the event
the Executive becomes Disabled while actively employed by the Employer at any
time after the Effective Date of this Agreement and remains Disabled at the
earliest applicable commencement date of payments pursuant to this Paragraph
4.2, the Executive shall: (i) continue to be treated during such period of
Disability as being gainfully employed but not actively employed by the
Employer and shall not have any applicable years of service added during the
time of disability for the purpose of determining the Annual Benefit; and (ii)
be entitled to be paid the Annual Benefit, with the Applicable Percentage as
set forth in Schedule A and as determined by the applicable years of service at
the time of disability, for fifteen (15) years in one hundred eighty (180)
equal monthly installments, with each installment to be paid on the first day
of each month, beginning with the month following the earlier of (1) the month
in which the

 

3

 

Executive attains
sixty-seven (67) years of age; or (2) the date upon which the Executive is no
longer entitled to receive Disability benefits under the Executive’s principal
Disability insurance policy and does not, at such time, return to and
thereafter fulfill the responsibilities associated with the employment position
held with the Employer prior to becoming Disabled by reason of such Disability
continuing.

 

The Employer agrees that
if the Executive shall die before receiving all of the one hundred eighty (180)
monthly payments described in this paragraph 4.2, the Employer will make the
remaining monthly payments to Executive’s designated beneficiary.  If a valid beneficiary designation is not in
effect, then the remaining payments due to Executive shall be paid to
Executive’s Surviving Spouse.  If the
Executive leaves no Surviving Spouse, the remaining amounts due to Executive
shall be paid to the duly qualified personal representative, executor, or
administrator of the Executive’s estate.

 

If the Executive dies
after becoming Disabled and prior to being paid benefits pursuant to the prior
paragraph, the Employer will pay to Executive’s designated beneficiary the
Annual Benefit, with the Applicable Percentage as set forth in Schedule A and
as determined by the applicable years of service at the time of the Disability,
for a period of (15) years in equal monthly installments, with each installment
to be paid on the first day of each month, beginning with the month following
the date of Executive’s death.  If a
valid Beneficiary Designation is not in place, then the payments due to the
Executive under this paragraph shall be paid to the Executive’s Surviving
Spouse.  If Executive leaves no
Surviving Spouse, the payments due to Executive under this paragraph shall be
paid to the duly qualified personal representative, executor, or administrator
of the Executive’s estate.

 

5.                                      Payments in the Event Employment is Terminated Other
than by Death, Disability, Termination for Cause or Retirement.

 

As indicated in Paragraph
2 above, the Employer reserves the right to terminate the Executive’s
employment, with or without cause but subject to any written employment
agreement which may then exist, at any time prior to the Executive’s
Retirement.  In the event that the
employment of the Executive shall be terminated for any reason, including
voluntary termination by the Executive, but other than by reason of (i)
Disability except as provided in Paragraph 4.2, (ii) death, (iii) Termination
for Cause, (iv) Retirement or (v) termination for Sale of Business, the
Executive or his legal representative shall be entitled to be paid the Annual
Benefit, with the Applicable Percentage as set forth in Schedule A and as
determined by the applicable years of service at the time of termination of
employment with the Employer, for a period of 15 years in 180 equal monthly
installments, with each installment to be paid on the first day of each month,
beginning with the month following the month in which the Executive terminates
employment and attains age 67, provided however in the event the Executive dies
before receiving all of the 180 payments, the Employer agrees to make the
payments, undiminished and on the same schedule as if the Executive had not
died, to the Executive’s designated beneficiary and if a valid Beneficiary
Designation is not in place, then the payments shall be paid to the Executive’s
Surviving Spouse, and if there is neither a valid Beneficiary Designation nor
Surviving Spouse, the payments shall be paid to the duly qualified personal
representative, executor, or administrator of the Executive’s estate.  In the event Executive is entitled to
benefit payments pursuant to this Paragraph 5 and dies prior to age 67, then
such benefits, undiminished and on the same schedule as if the Executive had
not died, are to be paid beginning with the month following the Executive’s
death to Executive’s designated beneficiary and if a valid Beneficiary
Designation is not in place, then the payments shall be paid to the Executive’s
Surviving Spouse, and if there is neither a valid Beneficiary Designation nor
Surviving Spouse, the payments shall be paid to the duly qualified personal
representative, executor, or administrator of the Executive’s estate.

 

Notwithstanding anything
to the contrary, the Executive shall not be entitled to be paid any benefit
pursuant to the prior paragraph if Executive voluntarily terminates employment
with the Employer prior to the end of the second anniversary of the Effective
Date.

 

5.1                               Termination in a Sale of Business.  In the event there is a Sale of Business and
the Executive does not have a written agreement in place for continued
employment for a term of at least two years beginning from the time of the
completion of the Sale of Business, in a position at least equivalent to an
executive vice president of Employer and at least at the same then base salary
of Executive, then the Executive shall be entitled to be paid in cash in a lump
sum on the date of the consummation of the Sale of Business, the present value
of the aggregate amount of the Annual Benefit, with the Applicable Percentage
as set forth in Schedule A and as determined by the applicable years of service
of the Executive at the time of the consummation of the Sale of Business plus
an additional three years of service, being paid for a period of fifteen (15)
years in one hundred eighty (180) monthly installments beginning on the first
day of the month following the consummation of the Sale of Business.  The present value of the amount shall be
determined using the long term monthly Applicable Federal Rate at the time of
the consummation of the Sale of Business.

 

4

 

Notwithstanding the prior
paragraph, no payment shall be made to Executive pursuant to this Agreement to
the extent that such payment when aggregated with all other payments considered
for purposes of calculating a parachute payment results in an excess parachute
payment as defined under Section 280G of the Code.

 

If the Internal Revenue
Service or any other tax authority makes any claim, demand or assessment in any
form based directly or indirectly, in whole or in part, on the allegation that
any payment under this Agreement and/or any other payment by Employer to or for
the benefit of the Executive at any time constitutes a “parachute payment”
under Section 280G of the Code or any similar or successor provision of federal
or state law, Executive agrees that Employer, its successors and assigns shall
have no obligation, whether for defense, indemnification, reimbursement or
otherwise, with respect to such claim, demand or assessment.

 

Notwithstanding anything
to the contrary, no benefit payments provided in this Paragraph 5.1 shall be
made to Executive, Executive’s designated beneficiary, Surviving Spouse or
Executive’s estate if the Executive is entitled to benefits provided by any
other Paragraph of this Agreement.

 

6.                                      Termination for Cause.

 

Notwithstanding anything
to the contrary, in the event the termination of employment of the Executive is
Termination for Cause as defined in Paragraph 1.13, the Executive shall not be
entitled to any benefits pursuant to this Agreement.

 

7.                                      No Ownership Rights to the Employer’s Assets.

 

The Employer reserves the
right to determine, in its sole and absolute discretion, whether, to what
extent and by what method, if any, to provide for the payment of the amounts
which may be payable to the Executive, the Executive’s spouse or the
Executive’s beneficiaries under the terms of this Agreement (“Benefits”).  The rights of the Executive or any
beneficiary of the Executive under this Agreement shall be solely those of an
unsecured creditor of the Employer.

 

In the event that the
Employer, in its sole and absolute discretion, elects to acquire an insurance
policy, an annuity or any other asset to recoup the costs or any portion
thereof of the Benefits, then such insurance policy, annuity or other asset
shall not be deemed to be held under any trust for the benefit of the Executive
or his beneficiaries or to be security for the performance of the obligations
of the Employer under this Agreement, but shall be, and remain, a general
unpledged, unrestricted asset of the Employer. 
The Executive and his beneficiaries shall have no rights whatsoever with
respect to, or any claim against, any such insurance policy, annuity or other
asset.  In connection with the Employer
electing to acquire any such insurance policy or annuity, the Executive agrees
to cooperate to facilitate such acquisition, and pursuant thereto shall execute
such documents and undergo such medical examinations or tests as the Employer
may reasonably request.

 

8.                                      Claims Procedure.

 

The Employer shall, but
only to the extent necessary to comply with ERISA, be designated as the named
fiduciary under this Agreement and shall have authority to control and manage
the operation and administration of this Agreement.  Consistent therewith, the Employer shall make all determinations
as to the rights to benefits under this Agreement.  Any decision by the Employer denying a claim by the Executive,
the Executive’s spouse, or the Executive’s bene­ficiary for benefits under this
Agreement shall be stated in writing and delivered or mailed, via registered or
certified mail, to the Executive, the Executive’s spouse or the Execu­tive’s
beneficiary, as the case may be.  Such
decision shall set forth the specific reasons for the denial of a claim.  In addition, the Employer shall provide the
Executive, the Executive’s spouse or the Executive’s beneficiary with a
reasonable opportunity for a full and fair review of the decision denying such
claim.

 

9.                                      Status of an Unsecured General Creditor.

 

Notwithstand­ing anything
contained herein to the contrary: (i) neither the Executive, the Executive’s
spouse nor the Executive’s bene­ficiary shall have any legal or equitable
rights, interests or claims in or to any specific property or assets of the
Employer; (ii) none of the Employer’s assets shall be held in or under any
trust for the benefit of the Executive, the Executive’s spouse or the
Executive’s beneficiary or held in any way as security for the fulfillment of
the obligations of the Employer under this Agreement; (iii) all of the
Employer’s assets shall be and remain the general unpledged and unrestricted
assets of the Employer; (iv) the Employer’s obligation under this Agreement
shall be that of an unfunded and unsecured promise by the Employer to pay money
in the future; and (v) the

 

5

 

Executive, the
Executive’s spouse and the Executive’s beneficiary shall be unsecured general
creditors with respect to any benefits which may be payable under the terms of
this Agreement.

 

10.                               Covenant Not to Interfere.

 

The Executive agrees not
to take any action which prevents the Employer from collecting the proceeds of
any life insurance policy which the Employer may happen to own at the time of
the Executive’s death and of which the Employer is the designated beneficiary.

 

11.                               Miscellaneous.

 

11.1.  Opportunity to Consult with Independent
Counsel.  The
Executive acknowledges that he has been afforded the opportunity to consult
with independent counsel of his choosing regarding both the benefits granted to
him under the terms of this Agreement and the terms and conditions which may
affect the Executive’s right to these benefits.  The Executive further acknowledges that he has read, understands
and consents to all of the terms and conditions of this Agreement, and that he
enters into this Agreement with a full understanding of its terms and
conditions.

 

11.2.  Arbitration of Disputes.  All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. (“JAMS”),
located in the location nearest to Cameron Park.  In the event JAMS is unable or unwilling to conduct the
arbitration provided for under the terms of this Paragraph, or has discontinued
its business, the parties agree that a repre­sentative member, selected by the
mutual agreement of the parties, of the American Arbitration Association
(“AAA”), located in or nearest to Cameron Park., shall conduct the binding
arbitration referred to in this Paragraph. 
Notice of the demand for arbitration shall be filed in writing with the
other party to this Agreement and with JAMS (or AAA, if necessary).  In no event shall the demand for arbitration
be made after the date when institution of legal or equitable proceedings based
on such claim, dispute or other matter in question would be barred by the
applicable statute of limitations.  The
arbitration shall be subject to such rules of procedure used or established by
JAMS, or if there are none, the rules of procedure used or established by AAA.  Any award rendered by JAMS or AAA shall be
final and binding upon the parties, and as applicable, their respective heirs,
benefici­aries, legal representatives, agents, successors and assigns, and may
be entered in any court having jurisdiction thereof.  The obligation of the parties to arbitrate pursuant to this
clause shall be specifically enforceable in accordance with, and shall be
conducted consistently with, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure.  Any
arbitration hereunder shall be conducted in the Sacramento area, unless
otherwise agreed to by the parties.

 

11.3.  Attorneys’ Fees.  In the event of any arbitration or
litigation concerning any controversy, claim or dispute between the parties
hereto, arising out of or relating to this Agreement or the breach hereof, or
the interpretation hereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorneys’ fees and costs incurred
in connection therewith or in the enforcement or collection of any judgment or
award rendered therein.  The “prevailing
party” means the party determined by the arbitra­tor(s) or court, as the case
may be, to have most nearly prevailed, even if such party did not prevail in
all matters, not necessarily the one in whose favor a judgment is rendered.

 

11.4.  Notice.  Any notice required or permitted of either
the Executive or the Employer under this Agreement shall be deemed to have been
duly given, if by personal delivery, upon the date received by the party or its
authorized representative; if by facsimile, upon transmission to a telephone
number previ­ously provided by the party to whom the facsimile is transmitted
as reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

 

If
to the Employe:

 

Central
California Bank

14685
Mono Way

Sonora,
California 95370

Attention:
David Thornton

Chairman
of the Board

 

6

 

also
to:

 

Western
Sierra Bancorp

4070
Plaza Goldorado Circle

Cameron
Park, California 95682

Attention:
Charles Bacchi

Chairman
of the Board

 

If
to the Executive:

 

Frederick
Rowden

(home
address)

Sonora,
California

 

11.5.  Assignment.  Neither the Executive, the Executive’s
spouse, nor any other beneficiary under this Agreement shall have any power or
right to transfer, assign, hypothecate, modify or otherwise encumber any part
or all of the amounts payable hereunder, nor, prior to payment in accordance
with the terms of this Agreement, shall any portion of such amounts be: (i)
subject to seizure by any creditor of any such beneficiary, by a proceeding at
law or in equity, for the payment of any debts, judgments, alimony or separate
maintenance obligations which may be owed by the Executive, the Executive’s
spouse, or any designated beneficiary; or (ii) transferable by operation of law
in the event of bankruptcy, insolvency or otherwise.  Any such attempted assignment or transfer shall be void and shall
terminate this Agreement, and the Employer shall thereupon have no further
liability hereunder.

 

11.6.  Binding Effect/Merger or Reorganization.  This Agreement shall be binding upon and
inure to the benefit of the Executive and the Employer and, as applicable,
their respective heirs, beneficiaries, legal representatives, agents,
successors and assigns.  Accordingly,
the Employer shall not merge or consolidate into or with another corporation,
or reorganize or sell substantially all of its assets to another corporation, firm
or person, unless and until such succeeding or continuing corporation, firm or
person agrees to assume and discharge the obligations of the Employer under
this Agreement.  Upon the occurrence of
such event, the term “Employer” as used in this Agreement shall be deemed to
refer to such surviving or suc­cessor firm, person, entity or corporation.

 

11.7.  Nonwaiver.  The failure of either party to enforce at
any time or for any period of time any one or more of the terms or conditions
of this Agreement shall not be a waiver of such term(s) or condition(s) or of
that party’s right thereafter to enforce each and every term and condition of
this Agreement.

 

11.8.  Partial Invalidity.  If any term, provision, covenant or
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, to be invalid, void, or unenforceable, such determination shall
not render any other term, provision, covenant or condition invalid, void or
unen­forceable, and the Agreement shall remain in full force and effect
notwithstanding such partial invalidity.

 

11.9.  Entire Agreement.  This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect thereto.  Each party to this Agreement acknowledges that no other
representations, inducements, promises or agree­ments, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
set forth herein, and that no other agreement, statement or promise not
contained in this Agreement shall be valid or binding on either party.

 

11.10.  Modifications.  Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or such party’s
authorized representative.

 

11.11.  Paragraph Headings.  The paragraph headings used in this
Agreement are included solely for the convenience of the parties and shall not
affect or be used in connection with the interpretation of this Agreement.

 

11.12.  No Strict Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.

 

11.13.  Governing Law.  The laws of the State of California, other
than those laws denominated choice of law rules, and, where applicable, the
rules and regulations of the Federal Deposit Insurance Corporation or any other
regulatory agency or governmental authority having jurisdiction over the
Employer, shall govern the validity, interpretation, construction and effect of
this Agreement.

 

7

 

12.  Payment of Benefits Subject to Executive
Not Competing with Employer

 

Notwithstanding anything
to the contrary, the benefits payable to Executive pursuant to this Agreement
are conditioned upon the Executive not working as an employee, independent
contractor or consultant of or for a financial institution located within a 35 mile
radius of the head office of Employer for a period of one year after Executive
terminates employment with Employer.  In
the event Executive breaches such condition, Employer shall immediately
terminate any and all remaining payments for benefits due Executive or
Executive’s beneficiaries pursuant to this Agreement, and Employer shall have
no liability to Executive or Executive’s beneficiaries for any benefits or
payments pursuant to this Agreement.  Notwithstanding the foregoing, in
the event of a Sale of Business, this paragraph shall be of no force or effect.

 

13.  Right of the Employer to Pay a Lump Sum.

 

Unless expressly provided
for herein, the Employer shall at its sole discretion have the right to pay in
a lump sum the then present value using the long term monthly Applicable
Federal Rate at such time of all payments vested and due the Executive or the
Executive’s beneficiary pursuant to this Agreement.

 

IN WITNESS WHEREOF, the
Employer and the Executive have executed this Agreement on the date first
above-written in the City of Cameron Park, California.

 

	
  Central
  California Bank

  	
  Frederick
  Rowden

  
	
  “Employer”

  	
  “Executive”

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ David Thorton

  	
   

  	
  /s/ Frederick
  Rowden

  	
   

  
	
  David Thornton

  	
   

  
	
  Chairman
  of the Board

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Western
  Sierra Bancorp

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Charles Bacchi

  	
   

  	
   

  
	
  Charles
  Bacchi

  	
   

  
	
  Chairman
  of the Board

  	
   

  

 

8

 

SCHEDULE
A

 

	
  NUMBER OF COMPLETE

  YEARS OF SERVICE

  	
   

  	
  APPLICABLE

  PERCENTAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  12.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  25.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  37.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  50.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  62.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  75.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  87.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  8 or more

  	
   

  	
  100.0

  	
  %

  

 

9

 

SCHEDULE
B

 

BENEFICIARY
DESIGNATION

 

	
  TO:

  	
  The
  Administrator of

  
	
   

  	
  Central
  California Bank

  
	
   

  	
  Salary
  Continuation Agreement

  

 

Pursuant to the
provisions of my Salary Continuation Agreement with Central California Bank
permitting the designation of a beneficiary or beneficiaries by a participant,
I hereby designate the following persons and entities as primary and secondary
beneficiaries of any benefit under said Agreement payable by reason of my
death:

 

	
  NOTE:

  	
  To
  name a trust as beneficiary, please provide the name of the trustee and the
  exact date of the trust agreement.

  

 

In the
event the primary beneficiary is not the spouse of the Executive, the spouse of
the Executive will need to sign the Spousal Consent below and such signature
must be notarized.

 

Primary
Beneficiary:

 

	
  (named beneficiary)

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Address

  	
   

  	
  Relationship

  

 

Secondary
(Contingent) Beneficiary:

 

	
  (named secondary beneficiary)

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Address

  	
   

  	
  Relationship

  

 

THE
RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED. ANY
PRIOR DESIGNATION OF PRIMARY BENEFICIARIES AND SECONDARY BENEFICIARIES IS
HEREBY REVOKED.

 

The Administrator shall
pay all sums payable under the Agreement by reason of my death to the Primary
Beneficiary, if he or she survives me, and if no Primary Beneficiary shall
survive me, then to the Secondary Beneficiary, and if no named beneficiary
survives me, then the Administrator shall pay all amounts in accordance with
the terms of my Salary Continuation Agreement. In the event that a named
beneficiary survives me and dies prior to receiving the entire benefit payable
under said Agreement then and in that event, the remaining unpaid benefit
payable according to the terms of my Salary Continuation Agreement shall be
payable to the personal representatives of the estate of said beneficiary who
survived me but died prior to receiving the total benefit provided by my Salary
Continuation Agreement.

 

	
   

  	
   

  	
  Frederick
  Rowden

  	
   

  
	
   

  	
   

  	
  “Executive”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
  7/22/02

  	
   

  	
  /s/ Frederick Rowden

  	
   

  
					

 

10

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