Document:

exv10w22

 

Exhibit 10.22

EMPLOYMENT AGREEMENT

   This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of September 27, 2007,
between Bank of Commerce Holdings, formerly called Redding Bancorp and Redding Bank of Commerce
(hereinafter referred to as “Employer”), and Patrick J. Moty (hereinafter referred to as
“Executive”).

WITNESSETH:

   WHEREAS, Employer desires to employ Executive in the capacity hereinafter stated, and
Executive desires to continue in the employ of Employer in such capacity, for the period and on the
terms and conditions set forth herein:

   NOW, THEREFORE, in consideration of the promises and of the mutual covenants and conditions
herein contained, the parties hereto, intending to be legally bound do hereby agree as follows:

     1. EMPLOYMENT DUTIES AND AUTHORITY

Employer hereby employs Executive as its President and Chief Executive Officer, and Executive
accepts such employment. Executive agrees to perform the duties that are customarily performed by
the President and Chief Executive Officer of a financial services holding company and a state
chartered banking institution and accepts all other duties described herein or as prescribed by the
Employer’s Board of Directors, and agrees to discharge the same faithfully and to the best of his
ability and the highest and best standards of the banking industry, in accordance with the policies
of the Employer’s Articles of Incorporation, Bylaws, Policies and Procedures. Executive shall
devote his full business time and attention to the business and affairs of Employer for which he is
employed and shall perform the duties thereof to the best of his ability. Except as permitted by
the prior written consent of the Employer’s Board of Directors, Executive shall not directly or
indirectly render any services of a business, commercial or professional nature to any other
person, firm or corporation, whether for compensation or otherwise, which are in conflict with
Employer’s interests. Executive shall have such responsibility and duties and such authority to
transact business on behalf of Employer, as are customarily incident to the office of President and
Chief Executive Officer of a financial services holding company and a state chartered banking
institution.

     2. EXECUTIVE COMPENSATION 

In consideration for all services to be rendered by Executive to Employer, Employer agrees to pay
Executive a starting base salary of $225,000.00 per year. Employer’s Board of Directors shall in
its sole and absolute discretion determine any increases in Executive’s base salary annually.
Executive’s salary shall be paid semi-monthly. Employer shall deduct there from all taxes which
may be required to be deducted or withheld under any provision of the law (including, but not
limited to, social security payments and income tax withholding) now in effect or which may become
effective anytime during the term of this Agreement. Executive shall be entitled to participate in
any and all other employee benefits and plans that may be developed and adopted by Employer and in
which Executive is eligible to participate under the terms of such plans, including Employer’s
Profit Sharing Plan. Employer agrees to provide Executive with an automobile allowance of $650.00
per month. Employer agrees to reimburse Executive for all ordinary and customary expenses for
entertainment, meals, travel, cellular phone, and incidental business expense in accordance with
Employer’s policy. Reasonable costs incurred for professional education, publications, seminars,
meetings and special social entertainment shall also be reimbursed in accordance with Employer’s
policy.

Employer agrees to reimburse Executive for reasonable business expenses associated with
participation on the Employer’s Board of Directors.

The Employer may pay Executive profit sharing in such amount as the Board of Directors, in its
discretion, determines is appropriate.

     3. COUNTRY CLUB MEMBERSHIP

 

 

Employer agrees to reimburse Executive for reasonable country club membership dues, in accordance
with Employer’s policy.

     4. INSURANCE

Employer agrees to provide Executive with health and life insurance benefits that are now or may
hereinafter be in effect for all other full-time employees subject to the eligibility requirements
of the plans. Employer may also obtain a “key-man” life insurance policy on the life of Executive
which shall be a general asset of the employer and to which Executive and the Executive’s
beneficiary will have no preferred or secured claim.

     5. VACATION

Executive shall be entitled to accrue five (5) weeks vacation during each year of which at least
two (2) weeks must be taken in a consecutive period. Vacation benefits shall not accrue above six
weeks at any time. Once this six week maximum is reached, vacation will stop accruing until
vacation is taken.

     6. TERMINATION

Employer shall have the right to terminate this Agreement for any of the following reasons by
serving written notice upon Executive:

	 	(a)	 	Willful breach of, habitual neglect of, willful failure to perform, or
inability to perform, Executive duties and obligations as President and Chief
Executive Officer.
	 
	 	(b)	 	Illegal conduct, constituting a crime involving moral turpitude,
conviction of a felony, or any conduct detrimental to the interests of the
Employer.
	 
	 	(c)	 	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
	 
	 	(d)	 	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.

In the event this Agreement is terminated for any of the reasons specified in the paragraphs (a),
(b), or (c) above, Executive shall be paid six months total compensation package calculated as of
the date of the Executive’s termination, plus any accrued profit sharing and vacation accrued to,
but not taken as of date of the termination. In the event this Agreement is terminated for any
reason specified in paragraph (d) above, Executive shall be entitled to severance pay in an amount
equal to twelve months of Executive’s then total compensation package to be paid in one lump sum.
In the event this Agreement is terminated for any of the reasons specified above, the Executive
agrees to resign from all board memberships of the Company immediately.

Total compensation package is defined as current salary, profit sharing, insurance, automobile
expense, country club membership and other ordinary and customary perquisites.

In either case, the health insurance benefits provided herein shall be extended at the Employer’s
sole cost for the twelve months after which the Executive is terminated.

 

 

The total compensation package and benefits referenced in the preceding paragraph are collectively
referred to herein as “Severance.” Executive acknowledges and agrees that any Severance provided
upon termination is in lieu of all damages, payments and liabilities on account of the early
termination of this Agreement and is the sole and exclusive remedy for Executive other than rights,
if any, to exercise any of the stock options vested prior to such termination, and shall only be
paid subject to Executive’s execution of a complete release of all claims Executive may have
against the Employer, its officers, directors, agents, employees, predecessors, successors,
parents, subsidiaries, and affiliates. If upon termination of employment Executive chooses to
arbitrate any claims pursuant to Section 15, Executive shall be deemed to have waived Executive’s
right, if any, to severance.

Executive shall give ninety (90) days prior notice, in writing, to Employer in the event Executive
resigns or voluntarily terminates employment, or takes early retirement.

     7. CHANGE OF CONTROL BENEFITS

In the event there is a Change of Control, as that term is defined in the Executive Salary
Continuation Agreement between the Employer and Executive, and the Executive’s responsibilities and
duties are diminished in any capacity the Executive is entitled to terminate this Agreement and
will be paid severance pay equal to two (2) years of total compensation package as of the date of
the Executive’s termination. Executive acknowledges and agrees that such payment is in lieu of all
damages, payments and liabilities on account of the early termination of this Agreement and is the
sole and exclusive remedy for Executive (other than rights, if any, to exercise any of the stock
options vested prior to such termination), and shall only be paid subject to Executive’s execution
of a complete release of all claims Executive may have against the Employer, its officers,
directors, agents, employees, predecessors, successors, parents, subsidiaries, and affiliates. If
upon termination of employment Executive chooses to arbitrate any claims pursuant to Section 15,
Executive shall be deemed to have waived Executive’s right, if any, to severance.

     8. CONFIDENTIAL INFORMATION AND NONDISCLOSURE

          (a) Confidential Information. Employer has and will develop and own certain Confidential
Information, which has a great value in its business. Employer also has and will have access to
Confidential Information of its customers. “Customers” shall mean any persons or entities for whom
Employer performs services or from whom Employer obtains information. Confidential Information
includes information disclosed to Executive during the course of his employment, and information
developed or learned by Executive during the course of his employment. Confidential Information is
broadly defined and includes all information which has or could have commercial value or other
utility in Employer’s business or the businesses of Employer’s customers. Confidential Information
also includes all information which could be detrimental to the interests of Employer or its
customers if it were disclosed.

By example and without limitation, Confidential Information includes all information concerning
loan information, Customer data, including but not limited to Customer and supplier identities,
Customer characteristics or agreements and Customer lists, applicant data, employment categories,
job classifications, employment histories, job analyses and validations, preferences, credit
history, agreements, and any personally identifiable information related to Customers; any
information provided to Executive by a Customer, including but not limited to electronic
information, documents, software, and trade secrets; historical sales information; advertising and
marketing materials and strategies; financial information related to Employer, Customers,
Customer’s employees or any other party; labor relations strategies; research and development
strategies and results, including new materials research; pending projects and proposals;
production processes; scientific or technological data, formulae and prototypes; employee data;
pricing and product information; computer data information; inventory levels and products; supplier
information and data; testing techniques; processes; formulas; trade secrets; inventions;
discoveries; improvements; specifications; data, know-how, and formats; marketing plans; pending
projects and proposals; business plans; computer processes; computer programs and codes;
technological data; strategies; forecasts; budgets; and projections.

          (b) Protection of Confidential Information. Executive agrees that at all times during and
after his employment by Employer, Executive will keep confidential and not disclose to any third
party or make any use of the Confidential Information of Employer or its customers, except for the
benefit of Employer or its customers and in the course of his employment. In the event Executive
is required by law to disclose such information described in this paragraph, Executive will provide
Employer and its legal counsel with immediate notice of such request so that Employer may consider

 

 

seeking a protective order. For purposes of this Agreement, the disclosure of any Confidential
Information, at any time except as required by law shall be considered to be “unfair competition”.

Executive also agrees not to remove or permit the removal of Confidential Information from
Employer’s place of business without the express written authorization of an Officer of Employer or
its authorized representative. Executive acknowledges that he is aware that the unauthorized
disclosure of Confidential Information of Employer or its customers may be highly prejudicial to
their interests, an invasion of privacy, and an improper disclosure of trade secrets and financial
information in violation of state and federal law.

          (c) Return of Property. In the event Executive’s employment with Employer is terminated
(voluntarily or otherwise), Executive agrees to inform Employer of all documents and other data
relating to his employment which is in his possession and control and to deliver promptly all such
documents and data to Employer.

          (d) Sanctions for Unauthorized Taking of Trade Secrets. Executive understands that taking of
Employer’s trade secrets is a crime under California Penal Code section 449(c) and could also
result in civil liability under California’s Uniform Trade Secrets Act (Civil Code sections
3426-3426.11), and that willful misappropriation may result in an award against Executive of triple
the amount the Employer’s damages and Employer’s attorney fees for collecting such damages.

          (e) Injunctive Relief. Executive acknowledges that breach of this Section may cause Employer
irreparable harm for which money is inadequate compensation. Executive therefore agrees that
Employer will be entitled to injunctive relief, without the necessity of posting a bond, to enforce
this Section and this Agreement, in addition to damages and other available remedies, and Executive
consents to such injunctive relief pursuant to Section 15 below.

          (f) Solicitation of Bank Customers. Executive agrees that in the event his employment with the
Bank shall terminate for any reason, he shall not, for a period of one year, make known to, or call
on, solicit or take away, or attempt to call on, solicit or take away on behalf of any person, firm
or corporation which is in competition, either directly or indirectly, with the Bank, any existing
customers of the Bank or individuals or entities with whom the Bank is negotiating for the Bank’s
services. This provision may be enforced either through injunction or specific performance of this
Agreement by the Bank. In the event of a Change in Control, Executive shall be unconditionally
released from all of his duties and obligations under this paragraph.

     9. INDEMNIFICATION

To the extent permitted by law, Employer shall indemnify Executive if he was or is a party or is
threatened to be made a party in any such action brought by a third party against Executive
(whether or not Employer is joined as a party defendant) against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred with said action if Executive acted
in good faith and in a manner Executive reasonably believed to be in the best interest of Employer
(and with respect to a criminal proceeding if Executive had no reasonable cause to believe his
conduct was unlawful), provided that the alleged conduct of Executive arose out of and was within
the course and scope of his employment as an officer or employee of Employer.

     10. NOTICES

Any notice, request, demand, or other communication required or permitted hereunder shall be deemed
to be properly given when personally served in writing, when deposited in the U.S. mail, postage
prepaid, or when communicated to a public telegraph company for transmittal, addressed as follows:

	 	 	 
	To Employer:

	 	Redding Bank of Commerce

1901 Churn Creek Road

Redding, California 96002

Attention: Board of Directors

 

 

	 	 	 
	To Executive:

	 	Patrick J. Moty

4480 Bechelli Lane

Redding, California 96002

Any party hereto may change its or his address for purposes of this Section by giving notice in
accordance herewith.

     11. BENEFIT OF AGREEMENT

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective executors, administrators, successors and assigns.

     12. APPLICABLE LAW

This Agreement is made and entered into in the State of California, and the laws of said State
shall govern the validity and interpretation hereof.

CAPTIONS AND PARAGRAPH HEADINGS 

Captions and paragraph headings used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.

     13. INVALID PROVISIONS

Should any provision of this Agreement for any reason be declared invalid, void, or unenforceable
by a court of competent jurisdiction, the validity and binding effect of any remaining portions
shall not be affected and the remaining portions of this Agreement shall remain in full force and
effect as if this Agreement had been executed with said provision eliminated.

     14. ENTIRE AGREEMENT

This Agreement and the Executive Salary Continuation Agreement, and contain the entire Agreement of
the parties and supersede any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of Executive by Employer, except to the extent that
it is contemplated that Executive and Employer may enter into a stock option agreement. Each party
to this Agreement acknowledges that no representations, promises, or agreements, oral or otherwise,
have been made by any party, or anyone acting on behalf of any party, which is not embodied herein,
and that no other agreement, statement, or promise not contained in this Agreement shall be valid
or binding. This Agreement may not be modified or amended by oral agreement, but only by an
agreement in writing signed by the Employer and Executive.

     15. Negotiation – Mediation

The parties will attempt in good faith to resolve promptly any dispute, controversy, or claim
arising out of or relating to this contract or any claimed breach thereof by direct negotiation
between principals of the parties who have authority to settle the controversy. To facilitate such
negotiations, it is agreed that a disputing party shall give the other party written notice of the
dispute providing reasonable particularity with respect to all issues deemed to be controverted or
disputed. Within ten (10) days after such notice is given, the principals of the parties shall
meet at a mutually acceptable time and place, and thereafter as often as those individuals
reasonably deem necessary to exchange relevant information and attempt to resolve all disputes.

If the disputes have not been resolved within thirty (30) days after the disputing party gives
notice, or if the party receiving notice declines to meet, either party may initiate mediation of
the controversy, claim or dispute in accordance with the following mediation provisions. Upon
failure of the negotiations as set forth above, the parties to this contract agree to mediate any
dispute, controversy or claim arising out of this contract or relating to the work undertaken
pursuant to this contract prior to resorting to arbitration as hereinafter provided. Mediation is
a process in which parties attempt to resolve a

 

 

dispute by submitting it to an impartial, neutral
mediator who is authorized to facilitate the resolution of the dispute, but who is not empowered to
impose a settlement on the parties. The parties shall attempt to mutually agree upon an impartial
mediator, which mediator shall be appointed jointly and compensated equally by the parties. In the
event the parties are unable to agree on an impartial mediator, then and in that event each party
shall submit to the other a list with two (2) names of retired judges who will mediate in Shasta
County, and have no ongoing professional or business relationship with either of the parties.

From the lists, the parties shall, in turn, beginning with the Executive, cross unacceptable names
from the list until such time as a potential mediator remains. The potential remaining mediator
shall then be contacted to determine if he/she is available and willing to act as mediator. Should
none of the original list of mediators be available, new lists shall be prepared and the process
again undertaken.

Following mediation or in the event that for any reason no mediation has been held, all disputes,
controversies or claims shall be resolved by binding arbitration as hereinafter set forth.

If a party commences an arbitration or court action based on a dispute or claim as to which this
section applies, without first attempting to resolve the matter through mediation, then and in that
event, such party shall not be entitled to recover attorney’s fees, costs or expert fees, even if
they would otherwise be available to that party in any such arbitration or court action.

     16.     Arbitration

Any controversy among parties arising from or relating to the performance or interpretation of this
contract is subject to binding arbitration. The parties hereto are bound, each to the other, by
this arbitration clause. The parties therefore agree that any dispute, controversy or claim, in
law or equity, arising between themselves out of this contract pursuant to this contract which is
not settled through mediation must be decided by neutral binding arbitration and not by court
action, except as provided by the California Law for Judicial Review of Arbitration Proceedings.

On the demand of the arbitrator or any party to an arbitration initiated under the arbitration
provisions of this contract, each party hereto shall be bound by this arbitration provision and
agrees to join in, become a party to, and be bound by such arbitration.

Arbitration shall be conducted under and pursuant to the provisions of California Code of Civil
Procedure § 1280, et seq., including the provisions of § 1283.05, as are in effect at the time of
the arbitration, and judgment may be entered on the award as therein provided.

If any party refuses or neglects to appear at or participate in arbitration after reasonable
notice, the arbitrator may decide the controversy in accordance with whatever evidence is presented
by the party or parties who do participate.

The arbitrator may award any remedy that is just and equitable in the arbitrator’s opinion. The
arbitrator will award to the prevailing party or parties such sums as are proper to compensate for
the time, expense, and trouble of arbitration, including arbitration fees, attorney fees and costs,
and expert fees. The arbitrator will retain jurisdiction of a controversy even if a party or
parties to the dispute will not or cannot be joined in the arbitration proceedings.

     17.     ATTORNEYS’ FEES AND COSTS 

In the event of litigation, arbitration or any other action or proceeding between the parties to
interpret or enforce this Agreement or any part thereof or otherwise arising out of or relating to
this Agreement, the prevailing party shall be entitled to recover its costs related to any such
action or proceeding and its reasonable fees of attorneys, accountants and expert witnesses
incurred by such party in connection with any such action or proceeding. The prevailing party
shall be deemed to be the party which obtains substantially the relief sought by final resolution,
compromise or settlement, or as may otherwise be determined by order of a court of competent
jurisdiction in the event of litigation, an award or decision of one or more arbitrators in the
event of arbitration, or a decision of a comparable official in the event of any other action or
proceeding.

 

 

EXECUTIVE AND EMPLOYER AGREE THAT BY ENTERING INTO THIS AGREEMENT, EXECUTIVE AND EMPLOYER KNOWINGLY
AND VOLUNTARILY WAIVE THEIR RIGHTS TO A TRIAL BY A JUDGE OR JURY.

	 	 	 
	 

	 	IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date and year
first above written.

	 	 	 	 	 	 	 
	EMPLOYER:

	 	 	 	EXECUTIVE:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BANK OF COMMERCE HOLDINGS

	 	 	 	PATRICK J. MOTY	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By: /s/ Kenneth R. Gifford, Jr.

	 	 	 		 	 
	 

	 	 	 	 	 	 
	Name: Kenneth R. Gifford, Jr.

	 	 	 	/s/ Patrick J. Moty	 	 
	 

	 	 	 	 	 	 
	Title: Chairman

	 	 	 	Patrick J. Motyexv10w23

 

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.

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