Document:

Exhibit 10.3

 

Option No.        

 

DYNTEK, INC.

 

STOCK OPTION AGREEMENT

 

Type of
Option (check one):   o   Incentive         o   Nonqualified

 

This Stock Option Agreement (the “Agreement”) is
entered into as of the          day of                                   ,
200    , by and between Dyntek, Inc., a Delaware
corporation (the “Company”), and                                                                         
(the “Optionee”) pursuant to the Company’s 2005 Stock Incentive Plan (the “Plan”).
Any capitalized term not defined herein shall have the same meaning ascribed to
it in the Plan.

 

1.                                      Grant of
Option. 
The Company hereby grants to Optionee an option (the “Option”) to
purchase all or any portion of a total of                                                   (           )
shares (the “Shares”) of the Common Stock of the Company at a purchase price of                              ($            )
per share  (the “Exercise
Price”), subject to the terms and conditions set forth herein and the provisions
of the Plan.  If the box marked “Incentive”
above is checked, then this Option is intended to qualify as an “incentive
stock option” as defined in Section 422 of the Internal Revenue Code of
l986, as amended (the “Code”).  If this
Option fails in whole or in part to qualify as an incentive stock option, or if
the box marked “Nonqualified” is checked, then this Option shall to that extent
constitute a nonqualified stock option.

 

2.                                      Vesting of
Option. 
The right to exercise this Option shall vest in installments, and this
Option shall be exercisable from time to time in whole or in part as to any
vested installment (“Vested Shares”).                                  
percent (    %) of the Shares shall become Vested Shares on
the first anniversary of the “Vesting Commencement Date,” and thereafter, the
balance of the Shares shall become Vested Shares in a series of           
(    ) successive equal               
installments for each full                       
period of Continuous Service provided by the Optionee after the Vesting
Commencement Date, such that 100% of the Shares shall become Vested Shares on
the               
anniversary of the “Vesting Commencement Date.” 
For these purposes, the Vesting Commencement Date shall be                               .

 

No additional Shares shall vest after the date of
termination of Optionee’s “Continuous Service” (as defined below), but this
Option shall continue to be exercisable in accordance with Section 3
hereof with respect to that number of shares that have vested as of the date of
termination of Optionee’s Continuous Service.

 

For purposes of this Agreement, the term “Continuous
Service” means (i) employment by either the Company or any parent or
subsidiary corporation of the Company, or by a corporation or a parent or
subsidiary of a corporation issuing or assuming a stock option in a transaction
to which Section 424(a) of the Code applies, which is uninterrupted
except for vacations, illness (except for permanent disability, as defined in Section 22(e)(3) of
the Code), or leaves of absence which are approved in writing by the Company or
any of such other employer corporations, if applicable, (ii) service as a
member of the Board of Directors of the Company until Optionee resigns, is
removed from office, or Optionee’s term of office expires and he or she is not
reelected, or (iii) so long as Optionee is engaged as a Service Provider,
as defined in the Plan.

 

 

3.                                      Term of Option.  The right of
the Optionee to exercise this Option shall terminate upon the first to occur of
the following:

 

(a)                                  the expiration of ten (10) years from the date of this
Agreement;

 

(b)                                 the
expiration of one (1) year from the date of termination of Optionee’s
Continuous Service if such termination is due to permanent disability of the
Optionee (as defined in Section 22(e)(3) of the Code);

 

(c)                                  the
expiration of one (1) year from the date of termination of Optionee’s
Continuous Service if such termination is due to Optionee’s death or if death
occurs during either the three-month or one-month period following termination
of Optionee’s Continuous Service pursuant to Section 3(d) or Section 3(e) below,
as the case may be;

 

(d)                                 the
expiration of three (3) months from the date of termination of Optionee’s
Continuous Service if such termination occurs for any reason other than
permanent disability, death, voluntary resignation or cause; provided, however,
that if Optionee dies during such three-month period the provisions of Section 3(c) above
shall apply;

 

(e)                                  the
expiration of one (1) month from the date of termination of Optionee’s
Continuous Service if such termination occurs due to voluntary resignation;
provided, however, that if Optionee dies during such one-month period the
provisions of Section 3(c) above shall apply;

 

(f)                                    the termination of Optionee’s Continuous Service, if such
termination is for cause; or

 

(g)                                 upon the consummation of a “Change in Control” (as defined
in Section 2.4 of the Plan), unless otherwise provided pursuant to Section 9
below.

 

4.                                      Exercise
of Option.  On or after the
vesting of any portion of this Option in accordance with Sections 2 or 9
hereof, and until termination of the right to exercise this Option in
accordance with Section 3 above, the portion of this Option that has
vested may be exercised in whole or in part by the Optionee (or, after his or
her death, by the person designated in Section 5 below) upon delivery of
the following to the Company at its principal executive offices:

 

(a)                                  a
written notice of exercise which identifies this Agreement and states the
number of Shares then being purchased (but no fractional Shares may be
purchased), with any partial exercise being deemed to cover first vested Shares
and then the earliest vesting installments of unvested Shares;

 

(b)                                 a
check or cash in the amount of the Exercise Price (or payment of the Exercise
Price in such other form of lawful consideration as the Administrator may
approve from time to time under the provisions of Section 5.3 of the
Plan);

 

(c)                                  a check or cash in the amount reasonably requested by the
Company to satisfy the Company’s withholding obligations under federal, state
or other applicable tax laws with respect

 

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to the taxable income, if any, recognized by the
Optionee in connection with the exercise of this Option (unless the Company and
Optionee shall have made other arrangements for deductions or withholding from
Optionee’s wages, bonus or other compensation payable to Optionee, or by the
withholding of Shares issuable upon exercise of this Option, provided such
arrangements satisfy the requirements of applicable tax laws); and

 

(d)                                 a letter, if requested by the Company, in such form and
substance as the Company may require, setting forth the investment intent of
the Optionee, or person designated in Section 5 below, as the case may be.

 

5.                                      Death of
Optionee; No Assignment.  The rights of the Optionee under this
Agreement may not be assigned or transferred except by will or by the laws of
descent and distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee.  Any
attempt to sell, pledge, assign, hypothecate, transfer or dispose of this
Option in contravention of this Agreement or the Plan shall be void and shall
have no effect.  If the Optionee’s
Continuous Service terminates as a result of his or her death, and provided
Optionee’s rights hereunder shall have vested pursuant to Section 2
hereof, Optionee’s legal representative, his or her legatee, or the person who
acquired the right to exercise this Option by reason of the death of the
Optionee (individually, a “Successor”) shall succeed to the Optionee’s rights
and obligations under this Agreement. 
After the death of the Optionee, only a Successor may exercise this
Option.

 

6.                                      Representations
of Optionee.  Optionee acknowledges receipt of a copy of the Plan and understands
that all rights and obligations connected with this Option are set forth in
this Agreement and in the Plan.

 

7.                                      Adjustments Upon Changes in Capital Structure.  In the event
that the outstanding shares of Common Stock of the Company are hereafter
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of a
recapitalization, stock split, combination of shares, reclassification, stock
dividend or other change in the capital structure of the Company, then
appropriate adjustment shall be made by the Administrator to the number of
Shares subject to the unexercised portion of this Option and to the Exercise
Price per share, in order to preserve, as nearly as practical, but not to
increase, the benefits of the Optionee under this Option, in accordance with
the provisions of Section 4.2 of the Plan.

 

8.                                      Change in
Control. In the event of a Change in
Control (as defined in Section 2.4 of the Plan):

 

(a)                                  The
right to exercise this Option shall accelerate automatically and vest in full
(notwithstanding the provisions of Section 2 above) effective as of
immediately prior to the consummation of the Change in Control unless this
Option is to be assumed by the acquiring or successor entity (or parent
thereof) or a new option or New Incentives are to be issued in exchange
therefor, as provided in subsection (b) below.  If vesting of this Option will accelerate
pursuant to the preceding sentence, the Administrator in its discretion may
provide, in connection with the Change in Control transaction, for the purchase
or exchange of this Option for an amount of cash or other property having a
value equal to the difference (or “spread”) between:  (x) the value of the cash or other
property that the Optionee would have received pursuant to the Change in
Control transaction in exchange for the Shares issuable upon exercise of this
Option had this Option been exercised immediately prior to the Change in
Control, and (y) the aggregate Exercise Price for such Shares.  If the vesting of this Option will accelerate
pursuant to this subsection (a), then the Administrator shall cause
written notice of the Change in Control transaction to be given to the Optionee
not less than fifteen (15) days prior to the anticipated effective date of the
proposed transaction.

 

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(b)                                 The
vesting of this Option shall not accelerate if and to the extent that:  (i) this Option (including the unvested
portion thereof) is to be assumed by the acquiring or successor entity (or
parent thereof) or a new option of comparable value is to be issued in exchange
therefor pursuant to the terms of the Change in Control transaction, or (ii) this
Option (including the unvested portion thereof) is to be replaced  by the acquiring or successor entity (or
parent thereof) with other incentives of comparable value under a new incentive
program (“New Incentives”) containing such terms and provisions as the
Administrator in its discretion may consider equitable.  If this Option is assumed, or if a new option
of comparable value is issued in exchange therefor, then this Option or the new
option shall be appropriately adjusted, concurrently with the Change in
Control, to apply to the number and class of securities or other property that
the Optionee would have received pursuant to the Change in Control transaction
in exchange for the Shares issuable upon exercise of this Option had this Option
been exercised immediately prior to the Change in Control, and appropriate
adjustment also shall be made to the Exercise Price such that the aggregate
Exercise Price of this Option or the new option shall remain the same as nearly
as practicable.

 

(c)                                  If
the provisions of subsection (b) above apply, then this Option, the
new option or the New Incentives shall continue to vest in accordance with the
provisions of Section 2 hereof and shall continue in effect for the
remainder of the term of this Option in accordance with the provisions of Section 3
hereof.  However, in the event of an
Involuntary Termination (as defined below) of Optionee’s Continuous Service
within twelve (12) months following such Change in Control, then vesting of
this Option, the new option or the New Incentives shall accelerate in full
automatically effective upon such Involuntary Termination.

 

(d)                                 For
purposes of this Section 11, the following terms shall have the meanings
set forth below:

 

(i)                                     “Involuntary
Termination” shall mean the termination of Optionee’s Continuous Service by
reason of:

 

(A)                              Optionee’s
involuntary dismissal or discharge by the Company, or by the acquiring or
successor entity (or parent or any subsidiary thereof employing the Optionee)
for reasons other than Misconduct (as defined below), or

 

(B)                                Optionee’s
voluntary resignation following (x) a change in Optionee’s position with the
Company, the acquiring or successor entity (or parent or any subsidiary
thereof) which materially reduces Optionee’s duties and responsibilities or the
level of management to which Optionee reports, (y) a reduction in Optionee’s
level of compensation (including base salary, fringe benefits and target bonus
under any performance based bonus or incentive programs) by more than ten
percent (10%), or (z) a relocation of Optionee’s principal place of employment
by more than thirty (30) miles, provided and only if such change, reduction or
relocation is effected without Optionee’s written consent.

 

(ii)                                  “Misconduct”
shall mean (A) the commission of any act of fraud, embezzlement or
dishonesty by Optionee which materially and adversely affects the business of
the Company, the acquiring or successor entity (or parent or any subsidiary
thereof), (B) any unauthorized use or disclosure by Optionee of confidential
information or trade secrets of the

 

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Company, the acquiring or successor entity (or parent or any subsidiary
thereof), (C) the continued refusal or omission by the Optionee to perform
any material duties required of him if such duties are consistent with duties
customary for the position held with the Company, the acquiring or successor
entity (or parent or any subsidiary thereof), (D) any material act or
omission by the Optionee involving malfeasance or gross negligence in the
performance of Optionee’s duties to, or material deviation from any of the
policies or directives of, the Company or the acquiring or successor entity (or
parent or any subsidiary thereof), (E) conduct on the part of Optionee
which constitutes the breach of any statutory or common law duty of loyalty to
the Company, the acquiring or successor entity (or parent or any subsidiary
thereof), or (F) any illegal act by Optionee which materially and
adversely affects the business of the Company, the acquiring or successor
entity (or parent or any subsidiary thereof), or any felony committed by
Optionee, as evidenced by conviction thereof. 
The provisions of this Section shall not limit the grounds for the
dismissal or discharge of Optionee or any other individual in the service of
the Company, the acquiring or successor entity (or parent or any subsidiary
thereof).

 

9.                                      Limitation of
Company’s Liability for Nonissuance.  The Company agrees to use its reasonable best
efforts to obtain from any applicable regulatory agency such authority or
approval as may be required in order to issue and sell the Shares to the
Optionee pursuant to this Option. 
Inability of the Company to obtain, from any such regulatory agency,
authority or approval deemed by the Company’s counsel to be necessary for the
lawful issuance and sale of the Shares hereunder and under the Plan shall
relieve the Company of any liability in respect of the nonissuance or sale of
such shares as to which such requisite authority or approval shall not have
been obtained.

 

10.                               No Employment
Contract Created.  Neither the granting of this Option nor the
exercise hereof shall be construed as granting to the Optionee any right with
respect to continuance of employment by the Company or any of its
subsidiaries.  The right of the Company
or any of its subsidiaries to terminate at will the Optionee’s employment at
any time (whether by dismissal, discharge or otherwise), with or without cause,
is specifically reserved.

 

11.                               Rights as Stockholder.  The Optionee
(or transferee of this option by will or by the laws of descent and
distribution) shall have no rights as a stockholder with respect to any Shares
covered by this Option until such person has duly exercised this Option, paid
the Exercise Price and become a holder of record of the Shares purchased.

 

12.                               “Market Stand-Off”
Agreement. 
Optionee agrees that, if requested by the Company or the managing
underwriter of any proposed public offering of the Company’s securities,
Optionee will not sell or otherwise transfer or dispose of any Shares held by
Optionee without the prior written consent of the Company or such underwriter,
as the case may be, during such period of time, not to exceed 180 days
following the effective date of the registration statement filed by the Company
with respect to such offering, as the Company or the underwriter may specify.

 

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13.                               Notice of
Disqualifying Disposition.  To obtain certain tax benefits afforded to
Incentive Options, an Optionee must hold the shares issued upon the exercise of
an Incentive Option for two years after the date of grant of the Option and one
year from the date of exercise.  By
executing this Agreement, Optionee hereby agrees to promptly notify the Company’s
Chief Financial Officer of any disposition of Shares within one year from the
date this Option is exercised or within two years of the date of grant of this
Option.

 

14.                               Interpretation.  This Option
is granted pursuant to the terms of the Plan, and shall in all respects be
interpreted in accordance therewith.  The
Administrator shall interpret and construe this Option and the Plan, and any
action, decision, interpretation or determination made in good faith by the
Administrator shall be final and binding on the Company and the Optionee.  As used in this Agreement, the term “Administrator”
shall refer to the committee of the Board of Directors of the Company appointed
to administer the Plan, and if no such committee has been appointed, the term
Administrator shall mean the Board of Directors.

 

15.                               Notices.  Any notice, demand or request required or permitted
to be given under this Agreement shall be in writing and shall be deemed given
when delivered personally or three (3) days after being deposited in the
United States mail, as certified or registered mail, with postage prepaid, (or
by such other method as the Administrator may from time to time deem
appropriate), and addressed, if to the Company, at its principal place of
business, Attention: the Chief Financial Officer, and if to the Optionee, at
his or her most recent address as shown in the employment or stock records of
the Company.

 

16.                               Governing Law.  The
validity, construction, interpretation, and effect of this Option shall be
governed by and determined in accordance with the laws of the State of
California except for matters related to corporate law, in which case the
provisions of the Delaware General Corporation Law shall govern.

 

17.                               Severability.  Should any
provision or portion of this Agreement be held to be unenforceable or invalid
for any reason, the remaining provisions and portions of this Agreement shall
be unaffected by such holding.

 

18.                               Attorneys’ Fees.  If any party
shall bring an action in law or equity against another to enforce or interpret
any of the terms, covenants and provisions of this Agreement, the prevailing
party in such action shall be entitled to recover from the other party
reasonable attorneys’ fees and any expert witness fees.

 

19.                               Counterparts.  This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall be deemed one instrument.

 

Signature Page Follows

 

 

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

 

 

	
  THE COMPANY:

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  
	
  Dyntek, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Type or print name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

7Exhibit 10.1

 

WESTERN SIERRA NATIONAL BANK

EXECUTIVE SURVIVOR INCOME AGREEMENT

 

THIS EXECUTIVE SURVIVOR INCOME AGREEMENT (this “Agreement”) is made as of this 13thday of July , 2005 by and between
Western Sierra National Bank, and Anthony J. Gould (the “Executive”).

 

To encourage the
Executive to remain an employee of the Bank, the Bank is willing to provide
certain benefits to the Executive’s beneficiary(ies) under the circumstances
described in this Agreement. The Bank will pay the benefits from its general
assets, but only so long as one of the Bank’s general assets is a life
insurance policy on the Executive’s life. 
The Executive and Bank agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Whenever
used in this Agreement, the following words and phrases shall have the meanings
specified:

 

1.1                                 “Bank” means: Western Sierra National Bank, its
parent, Western Sierra Bancorp, and any subsidiary of Western Sierra National
Bank or Western Sierra Bancorp.

 

1.2                                 “Change in Control” means: (i) a tender offer made and
consummated for the ownership of 50% or more of the outstanding voting
securities of the Bank; (ii) a merger or consolidation of the Bank with
another bank or corporation and as a result of such merger or consolidation
less than 50% of the outstanding voting securities of the surviving or
resulting entities or shareholders other than affiliates (within the meaning of
the Securities Exchange Act of 1934) of any party to such merger or
consolidation, as the same shall have existed immediately prior to such merger
or consolidation, (iii) a sale of substantially all of the Bank’s assets
to another bank or corporation which is not a wholly owned subsidiary; or (iv) an
acquisition of the Bank by a person, within the meaning of Section 3(a)(9) or
of Section 1(d)(3) (as in effect on the date hereof) of the
Securities Exchange Act of 1934, of 50% or more of the outstanding voting
securities of the company (whether directly, indirectly, beneficially or of
record).  For purposes of this agreement,
ownership of voting securities shall take into account and shall include
ownership as determined by applying the provisions of Rule 13d-3(d)(1)(1) (as
in effect on the date hereof) pursuant to the Securities Exchange Act of 1934.

 

1.3                                 “Disability”
means the Executive suffers a sickness, accident, or injury that is determined
a doctor, selected by the Bank, to be a disability rendering the Executive
totally and permanently disabled.  At the
request of the Bank, the Executive must submit proof to the Bank of the doctor’s
determination.

 

1.4                                 “Normal
Retirement Age” means the completion of 10 Years of Service and
the Executive attains 55 years of age.

 

1.5                                 “Termination
for Cause” means the Bank terminates the Executive’s employment for
any of the following reasons: (a) gross negligence or gross neglect of
duties, (b) commission of a felony or commission of a misdemeanor
involving moral turpitude, (c) fraud, disloyalty, or willful violation of
any law or significant Bank policy committed in connection with the Executive’s
employment and resulting in an adverse effect on the Bank, or (d) the
Executive’s failure to correct material deficiencies in the performance of
assigned duties promptly after such deficiencies are described in a writing
delivered by the Bank to the Executive.

 

1.6                                 “Termination
of Employment” with the Bank means that the Executive shall have
ceased to be employed by the Bank for any reason whatsoever, excepting a leave
of absence approved by the Bank.  For
purposes of this Agreement, if there is a dispute over the employment status of
the Executive or the date of termination of the Executive’s employment, the
Bank shall have the sole and absolute right to decide the dispute, unless a
Change in Control shall have occurred.

 

1.7                                 Years of Service: Years of Service shall include the actual
period of time that Executive has been employed by the Bank.

 

ARTICLE 2

ENTITLEMENT TO BENEFIT

 

2.1                                 Survivor Income Benefit. 
Provided the Bank receives payment from the insurance policy insuring
Executive’s life, the Bank shall pay to the Executive’s designated
beneficiary(ies), in a single lump sum, the survivor income benefit of $25,000
in the event of the death of Executive under the following circumstances: (a) the
death occurs while the Executive is employed by the Bank; (b) the death
occurs following a voluntarily or involuntarily termination

 

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(exclusive
of Termination for Cause) of Executive’s employment with the Bank during the 24
month period following a Change in Control; (c) the death occurs following
the termination of Executive’s employment due to Disability and Executive has
not recovered from such Disability at the time of death; or (d) the death
occurs after Executive reaches Normal Retirement Age.  The Bank shall make the payment within ninety
(90) days of the presentation of claim and affirmative determination of the
right to such benefit, pursuant to Article 5 hereof.

 

ARTICLE 3

BENEFICIARIES

 

3.1                                 Beneficiary Designations.  The
Executive shall designate a beneficiary by filing a written designation with
the Bank.   The Executive’s beneficiary
designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. 
If the Executive dies without a valid beneficiary designation, all
payments shall be made to the Executive’s estate.

 

3.2                                 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 may pay
such benefit to the guardian, legal representative, or person having the care
or custody of such minor, incompetent person, or incapable person. The Bank may
require proof of incompetence, minority, or guardianship as it may deem
appropriate before distribution of the benefit. 
Such distribution shall completely discharge the Bank from all liability
for such benefit.

 

ARTICLE 4

GENERAL LIMITATIONS

 

4.1                                 Termination for Cause. 
Notwithstanding any provision of this Agreement to the contrary, the
Bank shall not pay any benefit under this Agreement if Termination of
Employment is due to the Executive’s actions resulting in Termination for
Cause.

 

4.2                                 Suicide or Misstatement. 
Notwithstanding any provision of this Agreement to the contrary, the
Bank shall not pay any benefit under this Agreement if the Executive commits
suicide within three years after the date of this Agreement.  In addition, the Bank shall not pay any benefit
under this Agreement if the Executive has made any material misstatement of
fact on any application or resume provided to the Bank, or on any application
for any benefits provided by the Bank to the Executive.

 

4.3                                 Removal. 
Notwithstanding any provision of this Agreement to the contrary, if the
Executive is removed from office or permanently prohibited from participating
in the conduct of the Bank’s affairs by an order issued under section 8(e) (4) or
(g) (1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e) (4) or
(g) (1), all obligations of the Bank under this Agreement shall terminate
as of the effective date of the order.

 

4.4                                 Insolvency. 
Notwithstanding any provision of this Agreement to the contrary, if the
Office of the Comptroller of the Currency 
appoints the Federal Deposit Insurance Corporation as receiver for the
Bank all obligations under this Agreement shall terminate as of the date of the
Bank’s declared insolvency.

 

4.5                                 Termination of
Participation.  Notwithstanding any provision of this
Agreement to the contrary, this Agreement shall terminate if the Executive’s
employment with the Bank terminates before the Normal Retirement Age for
reasons other than Disability, voluntary or involuntary termination within 24
months after a Change in Control (excepting Termination for Cause).

 

ARTICLE 5

CLAIMS AND REVIEW PROCEDURES

 

5.1                                 Claims Procedure.  The
Bank shall notify any person or entity that makes a claim against the Agreement
(the “Claimant”) in writing, within ninety (90) days of Claimant’s written
application for benefits, of his or her eligibility or ineligibility 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; and (4) an explanation of the Agreement’s
claims review procedure; (5) a statement of Claimant’s right to bring
action under ERISA Section 502(a) following an adverse benefit
determination on review.  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-day period.

 

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5.2                                 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 Company shall
afford the Claimant (and counsel, if any) an opportunity to present his or her
position to the Bank orally or in writing, and the Claimant (or counsel) shall
have the right to view the pertinent documents. 
The Bank shall notify the Claimant of its decision in writing within the
sixty-day period.  The notice shall be
written in a manner calculated to be understood by the Claimant and shall set
forth: (1) the specific reasons for the denial; (2) a specific
reference to the provisions of the Agreement on which the denial is based; (3) a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant (as defined by ERISA regulations) to the Claimant’s claim
for benefits; and (4) a statement of Claimant’s right to bring action
under ERISA Section 502(a) following an adverse benefit determination
on review.  If, because of the need for a
hearing, the sixty-day period is not sufficient, the decision may be deferred
for up to another sixty-day period at the election of the Bank, but notice of
this deferral shall be given to the Claimant.

 

ARTICLE 6

MISCELLANEOUS

 

6.1                                 Amendment and Termination.  The
Bank may amend or terminate this Agreement at any time if, because of
legislative, judicial, or regulatory action, continuation of the Agreement
would (a) cause benefits to be taxable to the Executive before actual
receipt, or (b) result in significant financial penalties or other
significantly detrimental consequences to the Bank (other than the financial
impact of paying the benefits), or (c) the insurance policy is cancelled.

 

6.2                                 Binding Effect.  This
Agreement shall bind the Executive and the Bank and their beneficiaries,
survivors, executors, administrators, and transferees.

 

6.3                                 No Guarantee of Employment.  This
Agreement is not a contract for employment. 
It does not give the Executive the right to remain an employee of the
Bank, nor does it interfere with the Bank’s right to discharge the
Executive.  It also does not require the
Executive to remain an employee nor interfere with the Executive’s right to
terminate employment at any time. 
Anything in this Agreement to the contrary notwithstanding, the
Executive acknowledges and agrees that his or her employment by the Bank is
employment at will, and his or her employment at will status is not affected by
this Agreement.

 

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

 

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

 

6.6                                 Applicable Law. 
Except to the extent preempted by the laws of the United States of
America, the validity, interpretation, construction, and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without giving effect to the principles of conflict of
laws of such state.

 

6.7                                 Unfunded Arrangement.  The
Executive’s beneficiary(ies) 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
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 the Executive’s
beneficiary(ies) have no preferred or secured claim or any other rights
whatsoever.

 

6.8                                 Entire Agreement.  This
Agreement constitutes the entire agreement between the Bank and the Executive
concerning the subject matter hereof.  No
rights are granted to the Executive’s beneficiary(ies) under this Agreement
other than those specifically set forth herein.

 

6.9                                 Administration.  The
Bank shall have all powers that are necessary to administer this Agreement

 

6.10                           Named Fiduciary.  For
purposes of the Employee Retirement Income Security Act of 1974, if applicable,
the Bank shall be the named fiduciary and plan administrator under this
Agreement.  The named fiduciary

 

3

 

may
delegate to others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals.

 

6.11                           Severability.  If for
any reason any provision of this Agreement is held invalid, such invalidity
shall not affect any other provision of this Agreement not held invalid, and to
the full extent consistent with law each such other provision shall continue in
full force and effect.  If any provision
of this Agreement is held invalid in part, such invalidity shall not affect the
remainder of such provision, and to the full extent consistent with law the
remainder of such provision shall, together with all other provisions of this
Agreement, continue in full force and effect.

 

6.12                           Headings.  The
captions and section headings in this Agreement are included solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement.

 

6.13                           Notices.  All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid, to the following addresses or to such other address as either party
may designate by like notice.

 

	
  (a)

  	
  If
  to the Bank, to:

  
	
   

  	
  Board
  of Directors

  
	
   

  	
  Western
  Sierra National Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (b)

  	
  If
  to the Executive, to:

  

 

 

 

and to such other or
additional person or persons as either party shall have designated to the other
party in writing by like notice.

 

6.14                           Cooperation. 
Executive agrees to cooperate to facilitate the acquisition of life
insurance policy and shall execute such documents and undergo medical examinations
or tests as required by insurer. 
Executive further agrees that Bank may, from time to time, wish to
exchange the life insurance policy on Executive’s life for another life
insurance policy insuring Executive’s life. 
Provided that the policy is replaced (or intended to be replaced) with a
comparable life insurance policy, Executive agrees to provide medical
information and cooperate with medical insurance-related testing required by a
prospective insurer for implementing the policy or, if necessary, for modifying
or updating to a comparable insurer.

 

IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have executed this
Agreement as of the day and year first written above.

 

	
  EXECUTIVE

  	
   

  	
  BANK

  
	
   

  	
   

  	
  Western
  Sierra National Bank

  
	
   

  	
   

  	
   

  
	
  /s/ Anthony J. Gould

  	
   

  	
  By:

  	
     /s/   Pat
  J. Rusnak

  	
   

  
	
  Anthony J. Gould

  	
   

  	
   

  	
  Pat J. Rusnak

  
	
  EVP
  / Chief Financial Officer

  	
   

  	
   

  	
  EVP/
  Chief Operating Officer

  

 

 

4

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