Document:

ex10-20.htm

Exhibit 10.20

 

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of December 1, 2014 between Bank of Commerce Holdings (the “Company”) and Redding Bank of Commerce (the “Bank” and together with the Company the “Employer”) and James A. Sundquist (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 Executive Vice President, Chief Financial Officer, and Executive accepts such employment. Executive agrees to perform the duties that are customarily performed by a Chief Financial 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 Chief Financial Officer of a financial services holding company and a state-chartered banking institution.

 

2.     TERM

 

Employer hereby employs Executive, and Executive hereby accepts employment with Employer commencing December 1, 2014. The term of the Agreement shall be for the period of three years beginning December 1, 2014 and automatically extending for a one-year period (the “Term”), with such Term being subject to prior termination as herein provided. 

 

 

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Where used herein, “Term” shall refer to the entire period of employment of Executive by Employer, whether for the period provided above, or whether terminated earlier as hereinafter provided, or extended by mutual agreement in writing by Employer and Executive.

 

3.     EXECUTIVE COMPENSATION

 

In consideration for all services to be rendered by Executive to Employer, effective December 1, 2014, Employer agrees to pay Executive base salary of $225,000.00 per year. The President and Chief Executive Officer of the Company will present to the Directors’ Executive Compensation Committee for approval any increases in Executive’s base salary annually following an annual performance evaluation.

 

Executive’s salary shall be paid semi-monthly. Employer shall deduct therefrom 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 Cash Incentive (“Profit Sharing”) Plan.

 

Employer agrees to provide Executive with an automobile allowance of $600.00 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.

 

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 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.

 

 

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6.     TERMINATION

 

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

 

	 	
(a)
	
Breach of, habitual neglect of, failure to perform, or inability to perform, Executive duties and obligations as Chief Financial 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 paragraphs (a) or (b), above (determined to be ‘cause’), Executive shall only be paid any accrued salary calculated as of the date of the Executive’s termination, plus vacation accrued to but not taken as of date of the termination.

 

In the event this Agreement is terminated for any reason specified in paragraphs (c) or (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.

 

Total compensation package is defined as current salary, cash incentive profit sharing, and insurance.

 

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 18, Executive shall be deemed to have waived Executive’s right, if any, to severance.

 

 

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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 IN CONTROL BENEFITS

 

In the event there is a Change in Control and in the event of diminution in salary or job duties, the Bank shall pay, in a lump-sum, to the Executive severance equal to two (2) year’s salary at that salary rate being paid to Executive at the time of the Change in Control together with an amount equal to one (1) year’s profit sharing, with the amount of such profit sharing payment to be that amount which is the average profit sharing received by the Executive for the three (3) prior years. If the Executive has been under employment for less than three (3) years, the profit sharing payment will be based on the average profit sharing received by the Executive during such lesser time period. Executive shall also receive, at the Bank’s expense, a continuation of health benefits then being provided to the Executive for a period of one (1) year. 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, within ninety (90) days after his separation from service with Employer, subject to Executive’s execution and delivery to Employer, within such ninety (90) day period, 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 the ninety (90) day period referred to in the immediately preceding sentence begins in one calendar year and ends in the following calendar year, then the payment shall be made in the latter calendar year. If upon termination of employment Executive chooses to arbitrate any claims pursuant to Section 17, Executive shall be deemed to have waived Executive’s right, if any, to severance.

 

“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. 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.

 

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.

 

 

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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.

 

 

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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 this Section 9(e).

 

(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.

 

 

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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:                        James A. Sundquist

1430 Birchwood Lane

Sacramento, California 95822

 

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.

 

13.     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.

 

14.     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.

 

15.     ENTIRE AGREEMENT

 

This Agreement contains 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.

 

 

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16.     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.

 

 

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17.     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.

 

18.     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.

 

 

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

 

 

EMPLOYER:

	
BANK OF COMMERCE HOLDINGS
	
REDDING BANK OF COMMERCE

	
 
	
 

	
 
	
 

	By: /s/ Lyle L. Tullis	By: /s/ Lyle L. Tullis
	Name:     Lyle L. Tullis	Name: Lyle L. Tullis
	Title: Chairman of the Board	Title: Chairman of the Board

 

 

EXECUTIVE: 

 

JAMES A. SUNDQUIST

 

 

/s/ James A. Sundquist

James A. Sundquist

 

 

Page # 10ex10-21.htm

Exhibit 10.21

 

SEVERANCE AND RELEASE AGREEMENT

 

This Severance and Release Agreement (“Agreement”), is made by and among Redding Bank of Commerce (“Employer”), Bank of Commerce Holdings (“Company”) and Patrick J. Moty (“Employee”).

 

1.     Retirement from Employment. Employee agrees that he shall retire from Employer effective December 31, 2014. Employee acknowledges that Employer has paid to Employee all sums owing to him, including wages, accrued but unused vacation, reimbursable business expenses and benefits accrued or incurred through December 15, 2014 within the time frame required by law. Employee shall be entitled to the Early Termination benefits as defined and described in that certain Salary Continuation Agreement between Employer and Employee dated effective April 1, 2006 and amended September 30, 2007 (“Salary Continuation Agreement”), all in accordance with the terms of the Salary Continuation Agreement. 

 

2.     Severance Payment. In consideration of Employee’s execution of and compliance with this Agreement, Employer and Company agree to provide Employee with the following severance:

 

(a)     Employer shall pay Employee the gross sum of One Million Twenty-three Thousand Dollars ($1,023,000). This amount shall be subject to all applicable state and federal withholdings. The first Thirty-three Thousand Dollars ($33,000) shall be paid upon the effective date of this Agreement. This Agreement shall become effective on the eighth (8th) day following Employee’s signature below, assuming Employee has not revoked his acceptance as provided in Section 5. The balance shall be paid in the gross amounts (subject to federal and state withholdings) as follows:

 

	 	
(i)
	
One Hundred Twenty-five Thousand Dollars ($125,000) shall be paid on July 1, 2015;

 

	 	
(ii)
	
Two Thousand Five Hundred Dollars ($2,500) shall be paid on July 15, 2015 and on the 15th day of each month thereafter through December 15, 2019; and

 

	 	
(iii)
	
The balance of Seven Hundred Thirty Thousand Dollars ($730,000) shall be paid in 59 equal monthly installments of Twelve Thousand One Hundred Sixty-six Dollars and sixty-six cents ($12,166.66) on the 15th day of each month beginning January 15, 2020 and continuing, with the final payment of Twelve Thousand One Hundred Sixty-seven Dollars and six cents ($12,167.06) due and payable on December 15, 2024. 

 

	 	
(iv)
	
The parties may by mutual agreement modify the payment schedule in the future. Any such modification shall, however, be compliant with Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and U.S. Treasury regulations promulgated thereunder (“Section 409A Rules”). 

 

 

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(b)     Employee and Company entered into that certain Incentive Stock Option Agreement dated March 1, 2012 (“Stock Option Agreement”). Company agrees to allow Employee to accelerate the vesting of his option to purchase 36,000 shares of common stock in Company. The vesting date shall be December 31, 2014. All other terms of the Stock Option Agreement shall remain in full force and effect. Except for the options provided in the Stock Option Agreement, Employee acknowledges that he has no other options or rights to acquire the capital stock of Company. 

 

In no event, however, shall any severance except the initial Thirty-three Thousand Dollars ($33,000) be paid or provided to Employee until the effective date of the Supplemental Release in Exhibit “A”, attached. Employee shall be obligated to sign the Supplemental Release no earlier than January 1, 2015 and no later than January 5, 2015. The parties specifically agree that the consideration paid to Employee in accordance with this Agreement is good and sufficient consideration for this Agreement. Employee understands that this Agreement shall remain binding upon Employee, and that even if Employee should later refuse to sign the Supplemental Release and thereby forfeits his right to receive the balance of the severance described in paragraph (a) above, the releases given by Employee in this Agreement shall remain in full force and effect.

 

3.     Release of Claims. Employee, in consideration of the promises and covenants made by Employer and Company in this Agreement, hereby compromises, settles and releases Employer and Company from any and all past, present, or future claims, demands, obligations, or causes of action, whether based on tort, contract, or other theories of recovery which Employee may have against Employer or Company on account of or arising out of any matter, cause, or event, including, but not limited to, any rights to indemnification or reimbursement from Employer or Company, whether pursuant to Employer’s or Company’s articles of incorporation, bylaws, contract, or otherwise. Such claims include those Employee may have or has, or which may later accrue to or be acquired by Employee, against Employer, Company, their predecessors, successors in interest, assigns, parent and subsidiary organizations, affiliates, and partners, and Employer’s, Company’s, and their past, present, and future shareholders, officers, directors, agents, and employees, and their heirs and assigns (collectively, the “Released Parties”). Such claims specifically include but are not limited to claims for wages, wrongful termination, constructive discharge, fraud, mental or emotional distress, misrepresentation, attorney’s fees, or any claim for discrimination under federal or state law including, but not limited to, discrimination based on age, sex, race, national origin, disability, marital status or any claims under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, Labor Code sections 132a and 4553, or the Fair Employment and Housing Act of California. Employee further acknowledges that he has suffered no work related injury or illness. 

 

 

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4.     Unknown Claims. Employee acknowledges that this Agreement applies to all known or unknown, foreseen or unforeseen, injury or damage, and expressly waives any benefit he may have under Section 1542 of the California Civil Code, which provides as follows:

 

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

 

Employee understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if he should eventually suffer injury, he will be unable to make any claim for those injuries. Furthermore, Employee acknowledges that he consciously intends these consequences even as to claims for injuries that may exist as of the date of the Agreement but which he does not know exist and which, if known, would materially affect Employee’s decision to execute this Agreement, regardless of whether Employee’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

 

5.     Waiver of Rights Under the Age Discrimination in Employment Act. Employee specifically understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Employee the right to bring a claim against Employer if Employee believes that Employee has been discriminated against on the basis of age. Employer specifically denies any such discrimination. Employee understands the rights afforded to him under the ADEA and agrees that he will not file any claim or action against any of the Released Parties based on any alleged violations of the ADEA. Employee hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorney’s fees, damages, reinstatement or injunctive relief. Employee is advised to consult with independent legal counsel prior to executing a waiver of rights under the ADEA.

 

Employee also understands and acknowledges that the ADEA requires Employer to provide Employee with at least twenty-one (21) calendar days to consider this Agreement (“Consideration Period”) prior to its execution. Employee acknowledges that he was provided with and has used the Consideration Period or, alternatively, that he elected to sign the Agreement within the Consideration Period and waives the remainder of the Consideration Period. Employee also understands that Employee is entitled to revoke this Agreement at any time during the seven (7) days following Employee’s execution of this Agreement (“Revocation Period”). Employee also understands that any revocation of this Agreement must be in writing and delivered to the attention of Randall S. Eslick, President and CEO, Bank of Commerce Holdings, 1504 Eureka Road, Suite 100, Roseville, CA 95661 prior to the expiration of the Revocation Period. 

 

6.     No Admission of Liability. Employee acknowledges that neither this Agreement, nor payment of any consideration pursuant to this Agreement, shall be taken or construed to be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing against Employee by Employer or Company. Employer and Company specifically assert that all actions taken with regard to Employee were proper and lawful and affirmatively deny any wrongdoing of any kind.

 

7.     Cooperation. Employee shall cooperate with Employer and Company and provide such assistance to Employer or Company on matters within his experience and expertise as may be reasonably requested of Employee from time to time. Employee’s obligations under this Section shall terminate once the severance described in Section 2 is paid in full. 

 

 

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8.     Confidential Information. Employee acknowledges that during his employment he received Confidential Information as that term is defined in Section 8 of the Amended and Restated Employment Agreement dated November 19, 2013 by and between Employer and Employee (“Employment Agreement”). Employee agrees to remain bound by the obligations set forth in Section 8(a) through (e) of the Employment Agreement.

 

9.     Covenant Not to Compete.

 

(a)     Covenant Not to Compete.   From January 1, 2015 through March 31, 2016, Employee shall not have any indirect or direct ownership interest (of record or beneficial) in or perform services as an employee, consultant, independent contractor, manager, officer or director in, or otherwise aid or assist in any manner, any individual, firm, corporation, company, partnership, proprietorship or other business that engages in any market in Shasta County in the State of California in the business of banking. Nothing in this Agreement shall, however, preclude Employee from purchasing or owning less than one percent (1%) of the publicly traded securities of any corporation. 

 

(b)     Solicitation of Business. From January 1, 2015 through March 31, 2016, Employee shall not, directly or indirectly, solicit or assist in soliciting any business from any present or past customer or vendor of Employer or Company, or request or advise any present or future customer or vendor of Employer or Company to withdraw, curtail or cancel its business dealings with Employer or Company; or commit any other act or assist others to commit any other act which might injure either Employer or Company.

 

(c)     Solicitation of Employees. From January 1, 2015 through March 31, 2016, Employee shall not directly or indirectly: (a) solicit or encourage any employee of Employer or Company to leave the employ of Employer or Company; or (b) hire any employee who has left the employment of Employer or Company if such hiring is proposed to occur within one year after the termination of such employee’s employment with Employer or Company. 

 

(d)     Employee acknowledges and agrees that the covenants contained in this Section 9 are material to this Agreement, and that a violation of this Section shall constitute a material breach of this Agreement. Employer shall be entitled to receive injunctive relief to enforce these covenants, and may seek any other remedy available to it by law. 

 

10.     References; Nondisparagement. Employer agrees that if it receives any reference check inquiries relating to Employee, it will provide the requesting party with Employee’s position held, dates of employment, and, if authorized, salary. Neither party shall disparage the other.

 

11.     IRC Section 409A – Required Delay in Payments. If Employee is a “specified employee” as defined in the Section 409A Rules, then any amounts subject to the Section 409A Rules that are otherwise required to be paid to him upon his separation from service (as defined in the Section 409A Rules) shall not be paid until the date that is six (6) months after the date of his separation from service or, if earlier, the date of his death. The parties agree that all payments made pursuant to this Agreement shall be paid in accordance with the Section 409A Rules. The parties shall modify the payment schedule if necessary so that it is in full compliance with the Section 409A Rules. 

 

 

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12.     Continued Payments upon Death. If Employee shall die prior to the payment in full of the severance set forth in Section 2(a) above, Employer shall continue to make such payments to Employee’s estate until the severance has been paid in full pursuant to the terms of this Agreement. 

 

13.     Breach of Agreement. If Employee materially breaches this Agreement, Employer and Company’s obligations to pay severance under Section 2 of this Agreement shall immediately cease. The parties agree that any sums or other consideration received by Employee pursuant to Section 2 prior to his breach of the Agreement shall constitute sufficient consideration to support the releases given by Employee in Sections 3, 4 and 5.   If, however, a court of competent jurisdiction orders this Agreement to be completely unenforceable, Employee shall repay to Employer the total payments received and return all other consideration under this Agreement within seven (7) calendar days from the date of entry of the order.

 

14.     Representation by Attorney. Employee acknowledges that Employee has carefully read this Agreement; that Employee understands its final and binding effect; that Employee has been given the opportunity to be represented by independent counsel in negotiating and executing this Agreement and that Employee has either chosen to be represented by counsel or has voluntarily declined such representation; and that Employee understands the provisions of this Agreement and knowingly and voluntarily agrees to be bound by them.

 

15.     No Reliance Upon Representations. Employee hereby represents and acknowledges that in executing this Agreement, Employee does not rely and has not relied upon any representation or statement made by any of the Released Parties or their representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

 

16.     No Pending Claim. Employee represents that Employee does not currently have pending any complaint or action against any of the Released Parties with any state, federal or local agency or court based on any matters arising out of Employee’s employment with Employer or its termination, and will not do so at any time. Employee further represents that if any such agency or court assumes jurisdiction of a complaint or action against any of the Released Parties, then Employee will direct that agency or court to withdraw from or dismiss with prejudice the matter. Employee will not cooperate or participate in the investigation or prosecution of any such complaint or action. Employee further agrees not to participate in any way in any proceeding against any of the Released Parties except as may be required by law through a subpoena or similar court order. Notwithstanding the foregoing, if Employee obtains against any of the Released Parties a monetary judgment or settlement for a claim released or purported to be released by him under this Agreement, the total value of payments and other consideration received by him shall be deducted from any such monetary judgment or settlement.

 

 

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17.     Attorney’s Fees. Each party shall bear its own attorney’s fees in the negotiation of this Agreement. Should any action be instituted to enforce any provision of this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorney’s fees.

 

18.     Entire Agreement. This Agreement, the Salary Continuation Agreement, the Stock Option Agreement, and the surviving portions of the Employment Agreement shall contain the entire agreement between the parties, and it shall not be modified except in writing signed by the party to be bound.

 

19.     Severability. If a court of competent jurisdiction finds any provision of this Agreement invalid or unenforceable as applied to any circumstance, the remainder of this Agreement and the application of such provision shall be interpreted so as best to effect the intent of the parties. The parties further agree to replace any such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.

 

20.     Counterpart Originals. This Agreement may be signed in counterparts.

 

 

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21.     Governing Law. This Agreement shall be governed by the laws of the State of California.

 

 

	
 
	
EMPLOYER

	 	REDDING BANK OF COMMERCE
	 	 
	 	 
	Date: December 16, 2014	By: /s/ Randall S. Eslick
	 	             Randall S. Eslick
	 	             President and CEO
	 	 
	 	COMPANY
	 	BANK OF COMMERCE HOLDINGS
	 	 
	Date: December 16, 2014	By: /s/ Randall S. Eslick
	 	             Randall S. Eslick
	 	             President and CEO
	 	 
	 	EMPLOYEE
	 	PATRICK J. MOTY
	 	 
	 	 
	Date: December 16, 2014	/s/ Patrick J. Moty
	 	Patrick J. Moty

 

 

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EXHIBIT A

 

SUPPLEMENTAL RELEASE

 

 

1.     Acknowledgment of Condition. Pursuant to Section 2 of that certain Severance and Release Agreement (“Agreement”) among Redding Bank of Commerce (“Employer”), Bank of Commerce Holdings (“Company”) and Patrick J. Moty (“Employee”), Employee acknowledges that Employee is obligated to execute this Supplemental Release before receiving the severance pursuant to the terms of the Agreement. Employee must execute this Supplemental Release no earlier than January 1, 2015 and no later than January 5, 2015. This Supplemental Release shall become effective on the eighth (8th) day following Employee’s signature below, assuming Employee has not revoked his acceptance as provided in Section 4 below. Capitalized terms shall be given the meanings assigned to them in the Severance and Release Agreement. 

 

Employee further acknowledges that Employer has paid to Employee all sums owing to Employee by Employer, including but not limited to wages, accrued but unused vacation, reimbursable business expenses and benefits accrued or incurred through the date of this Supplemental Release within the time frame required by law. 

 

2.     Release of Claims.    Employee, in consideration of the promises and covenants made by Employer and Company in the Agreement, hereby compromises, settles and releases Employer and Company from any and all past, present, or future claims, demands, obligations, or causes of action, whether based on tort, contract, or other theories of recovery which Employee may have against Employer or Company on account of or arising out of any matter, cause, or event, including, but not limited to, any rights to indemnification or reimbursement from Employer or Company, whether pursuant to Employer’s or Company’s articles of incorporation, bylaws, contract, or otherwise. Such claims include those Employee may have or has, or which may later accrue to or be acquired by Employee, against Employer, Company, their predecessors, successors in interest, assigns, parent and subsidiary organizations, affiliates, and partners, and Employer’s, Company’s, and their past, present, and future shareholders, officers, directors, agents, and employees, and their heirs and assigns (collectively, the “Released Parties”). Such claims specifically include but are not limited to claims for wages, wrongful termination, constructive discharge, fraud, mental or emotional distress, misrepresentation, attorney’s fees, or any claim for discrimination under federal or state law including, but not limited to, discrimination based on age, sex, race, national origin, disability, marital status or any claims under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, Labor Code sections 132a and 4553, or the Fair Employment and Housing Act of California. Employee further acknowledges that he has suffered no work related injury or illness.

 

 

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3.     Unknown Claims. Employee acknowledges that this Supplemental Release applies to all known or unknown, foreseen or unforeseen, injury or damage, and expressly waives any benefit he may have under Section 1542 of the California Civil Code, which provides as follows:

 

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

 

Employee understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if Employee should eventually suffer injury, Employee will be unable to make any claim for those injuries. Furthermore, Employee acknowledges that Employee consciously intends these consequences even as to claims for injuries that may exist as of the date of the Supplemental Release but which Employee does not know exist and which, if known, would materially affect Employee’s decision to execute this Supplemental Release, regardless of whether Employee’s lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

 

4.     Waiver of Rights Under the Age Discrimination in Employment Act. Employee specifically understands and acknowledges that the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), provides Employee the right to bring a claim against Employer if Employee believes that Employee has been discriminated against on the basis of age. Employer specifically denies any such discrimination. Employee understands the rights afforded to Employee under the ADEA and agrees that he will not file any claim or action against any of the Released Parties based on any alleged violations of the ADEA. Employee hereby knowingly and voluntarily waives any right to assert a claim for relief under this Act, including but not limited to back pay, front pay, attorney’s fees, damages, reinstatement or injunctive relief. Employee is advised to consult with independent legal counsel prior to executing a waiver of rights under the ADEA.

 

Employee also understands and acknowledges that the ADEA requires Employer to provide Employee with at least twenty-one (21) calendar days to consider this Supplemental Release (“Consideration Period”) prior to its execution. Employee acknowledges that he was provided with and has used the Consideration Period or, alternatively, that he elected to sign the Supplemental Release within the Consideration Period and waives the remainder of the Consideration Period. Employee also understands that Employee is entitled to revoke this Supplemental Release at any time during the seven (7) days following Employee’s execution of this Supplemental Release (“Revocation Period”). Employee also understands that any revocation of this Supplemental Release must be in writing and delivered to the attention of Randall S. Eslick, President and CEO, Bank of Commerce Holdings, 1504 Eureka Road, Suite 100, Roseville, CA 95661 prior to the expiration of the Revocation Period.

 

5.     Return of Property. Employee acknowledges all property belonging to Employer has been returned, including, but not limited to proprietary Employer documents, cellular phone, identification badge, and office keys. Employee acknowledges that Employee has no personal property that is in the possession of Employer. 

 

6.     No Reemployment. Employee specifically agrees that Employee shall not seek employment with any of the Released Parties at any time, nor shall any of the Released Parties be under any obligation to hire Employee. Employee agrees to waive any right to seek any legal or administrative remedy of any kind should any of the Released Parties refuse to hire Employee at any time in the future. Employee will not hold or seek to hold any position as a director or committee member of Employer or Company at any time.   

 

 

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7.     Governing Law. This Supplemental Release shall be governed by the laws of the State of California.

 

	
 
	
 EMPLOYEE

	
 
	
 PATRICK J. MOTY

	
 
	
 

	
 
	
 

	
Date: January 2, 2015
	
 /s/ Patrick J. Moty

	 	               Patrick J. Moty

 

 

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