Exhibit 10.9
CHANGE OF CONTROL AGREEMENT
This Agreement is dated as of April 10, 2001, and is by and among TRI COUNTIES
BANK ("Employer"), a California corporation having its principal place of
business at 63 Constitution Drive, Chico, California 95973, Employer's parent,
TRICO BANCSHARES, ("TriCo") and ("Employee").
WHEREAS, Employer desires to retain and assure Employee's services and
loyalty during the any pending Change of Control of Employer, as defined herein
and is willing to provide severance benefits in excess of its regular severance
benefits in such event;
WHEREAS, Employee desires to continue in the employ of Employer under the
terms and subject to the conditions hereinafter set forth.
NOW THEREFORE, the parties hereto agree as follows:
1. TERM OF AGREEMENT
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The initial term of this Agreement shall be for two years. On each anniversary
of this Agreement, this Agreement shall automatically renew for an additional
one (1) year period, unless terminated by either party ninety (90) days prior to
such anniversary date.
2. DUTIES OF EMPLOYMENT
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Employee hereby agrees to devote his full and exclusive time and attention to
the business of Employer and its subsidiaries (collectively, "Employer"), to
faithfully perform the duties assigned to him by the Board of Directors
consistent with his office, and to conduct himself in such a way as shall best
serve the interests of Employer.
3. CHANGE IN CONTROL
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3.1 In the event of a "Change in Control" of Employer or TriCo, as defined
herein, and in the event that, within ninety days of the Change of Control,
either: (i) Employee's employment is terminated; or (ii) Employee gives written
notice that he wishes to invoke the provisions of this Section 3; or (iii) a
substantial and material change occurs in Employee's title and/or
responsibilities, subject to the provisions of Section 3.3, Employee shall be
entitled to receive his salary at the rate then in effect for a period of
[eighteen (18) months/two (2)] years following the occurrence of the events set
forth herein, as well as an amount equal to 150% of the annual bonuses earned by
the Employee for the last complete calendar year or year of employment,
whichever is greater paid in eighteen equal monthly installments, provided,
however, that the present value of said payments shall not be more than two
hundred ninety-nine percent (299%) of Employee's compensation as defined by
Section 280G of the Internal Revenue Code of 1954, as amended. Employer shall be
relieved of its obligation to make payments under this Section if, at the time
it is to make such payment, it is insolvent, in conservatorship or receivership,
is in a troubled condition, is operating under a supervisory agreement with any
regulatory agency having jurisdiction, has been given a financial soundness
rating of "4" or "5", or is subject to a proceeding to terminate or suspend
federal deposit insurance.
3.2 For purposes of this Section 3, a "Change in Control" of Employer shall
occur:
3.3
(a) upon Employer's knowledge that any person (as such term is used in
Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
is or becomes "the beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of shares of Employer or TriCo, representing more
than 50% of the combined voting power of the then outstanding securities
Employer or TriCo; or
(b) upon the first purchase of the common stock of Employer or TriCo
pursuant to a tender or exchange offer (other than a tender or exchange offer
made by Employer or TriCo); or
(c) upon the approval by the stockholders of Employer or TriCo of a merger
or consolidation (other than a merger of consolidation in which Employer or
TriCo is the surviving corporation and which does not result in any
reclassification or reorganization of the then outstanding securities or
Employer or TriCo), a sale or disposition of all or substantially all of the
assets of Employer or TriCo, or a plan of liquidation or dissolution of Employer
or TriCo; or
(d) if, during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of Employer or TriCo
cease for any reason to constitute at least a majority thereof, unless the
election or nomination for the election by the stockholders of Employer or TriCo
of each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
3.4 Anything in this Agreement to the contrary notwithstanding, prior to the
payment of any compensation or benefits payable under Section 3.1 hereof, the
certified public accountants of Employer immediately prior to a Change of
Control (the "Certified Public Accountants") shall determine as promptly as
practical and in any event with 20 business days following the sale of Employer
whether any payment or distribution by Employer to or for the benefit of
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement, any other agreements or otherwise) (a "Payment")
would more likely than not be nondeductible by the Company for Federal income
purposes because of section 280G of the Internal Revenue Code of 1 986, as
amended (the "Code"), and if it is, then the aggregate present value of amounts
payable or distributable to or for the benefit of Employer pursuant to this
Agreement (such payments or distributions pursuant to this Agreement are
thereinafter referred to as "Agreement Payments") shall be reduced (but not
below zero) to the reduced Amount. For purposes of this Section, the "Reduced
Amount" shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any payment to be
nondeductible by Employer because of said Section 280G of the Code.
If under this Section the certified Public Accountants determine that any
payment would more likely than not be nondeductible by Employer because of
Section 280G of the Code, Employer shall promptly give Employee notice to the
effect and a copy of the detailed calculation thereof and of the Reduced Amount,
and the Employee may then elect, in his sole discretion, which and how much of
the Agreement Payments or any other payments shall be eliminated or reduced (as
long as after such election the aggregate present value of the Agreement
Payments or any other payments equals the Reduced Amount), and shall advise the
Employer in writing of his election within 20 business days of his receipt of
notice. If no such election is made by Employee within such 20-day period,
Employer may elect which and how much of the Agreement Payments or any other
payments shall be eliminated or reduced (as long as after such election the
Aggregate present value of the Agreement Payments equals the Reduced Amount) and
shall notify Employee promptly of such election. For purposes of this Section,
present value shall be determined in accordance with Section 280G(d)(4) of the
Code. All determinations made by the Certified Public Accountants shall be
binding upon Employer and Employee and the payment to Employee shall be made
within 20 days of sale of Employer. Employer may suspend for a period of up to
30 days after the sale of Employer the Payment and any other payments or
benefits due to Employee until the Certified Public Accountants finish the
determination and Employee (or Employer, as the case may be) elects how to
reduce the Agreement Payments or any other payments, if necessary. As promptly
as practicable following such determination and the elections hereunder,
Employer shall pay to or distribute to or for the benefit of Employee such
amounts as are then due to Employee under this Agreement.
As a result of the uncertainty in the application of Section 280G of the
Code, it is possible that Agreement Payments may have been made by Employer
which should not have been made ("Overpayment"), in each case, consistent with
the calculation of the Reduced Amount hereunder. In the event that the Certified
Public Accountants, based upon the assertion of a deficiency by the Internal
Revenue Service against Employer or Employee which said Certified Public
Accountants believe has a high probability of success, determines that an
Overpayment has been made, any such Overpayment shall be treated for all
purposes as a loan to Employee which Employee shall repay to Employer together
with interest at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by
Employee to Employer in and to the extent such payment would not reduce the
amount which is subject to taxation under Section 4999 of the Code. In the event
that the Certified Public Accountants, based upon controlling precedent,
determine that an Underpayment has occurred, any such Underpayment shall be
promptly paid by Employer to or for the benefit of Employee together with
interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code.
4. COVENENT TO PROTECT TRADE SECRETS
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4.1 The parties hereto recognize that the services performed and to be performed
by Employee are special and unique and that by reason of this employment
Employee has acquired and will continue to acquire confidential information
regarding the strategic plans, business plans, trade secrets, policies,
finances, customers and other business affairs of Employer (collectively "Trade
Secrets"). Employee hereby agrees not to divulge such Trade Secrets to anyone,
either during his employment with Employer or for a period of three years
following the termination of his employment. Employee further agrees that all
memoranda, notes, records, reports, letters, and other documents made, compiled,
received, held, or used by Employee while employed by Employer concerning any
phase of the business of Employer shall be Employer's property and shall be
delivered by Employee to Employer on the termination of his employment, or at
any earlier time on the request of the Board of Directors.
4.2 Employee and Employer agree that in consideration of the payment of the
amounts payable to Employee hereunder, Employee specifically covenants to comply
with all of the restrictions and obligations contained in this Section 4 except
as otherwise specifically provided for herein. Employee and Employer further
agree that they have discussed the restrictions and obligations contained in
this Section 4 and stipulate that they are reasonable.
4.3 The agreement of Employee contained in this Section 4 shall be enforceable
both at law and in equity, by injunction and otherwise; and the rights and
remedies of Employer hereunder with respect thereto shall be cumulative and not
alternative and shall not be exhausted by any one or more uses thereof.
5. TERMINATION
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This Agreement is terminable as follows:
5.1 By Employer, upon the death or permanent physical or mental disability of
Employee. (For purposes hereof, permanent physical or mental disability shall be
deemed to have occurred when Employee has been unable, with reasonable
accommodation, to perform the essential functions of his job (i) for a period of
six (6) consecutive months or (ii) on 80% or more of the normal working days
during any nine (9) consecutive months.)
5.2 By Employer, without prior notice, for Employee's dishonesty, disloyalty,
willful misconduct, dereliction of duty or conviction of a felony or other crime
the subject matter of which is related to his duties for Employer.
5.3 By Employer, upon ninety (90) days prior written notice without cause, or by
Employer pursuant to Section 1.2 hereof, provided, however this agreement may
not be termination pursuant to this Section 5.3 at any time there is a pending
or threaten Change of Control of Employer.
6. SCOPE OF AGREEMENT: WAIVERS AND AMENDMENTS
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The scope of this Agreement is limited to the specific provisions set forth
herein and is not intended to encompass all the terms and conditions of the
relationship between Employee and Employer and any and all matters related
thereto. The effects of the termination of Employee's employment under
circumstances other than after a Change of Control and as specifically set forth
herein shall be subject to the policies of Employer and any other written
agreement between Employee and Employer and/or TriCo. Neither this Agreement nor
any term or condition hereof, including without limitation, the terms and
conditions of this Section, any be waived or modified in whole or in part as
against Employer or Employee, as the case may be, except by written instrument
signed by an authorized officer of Employer and by Employee, expressly stating
that it is intended to operate as a waiver or modification of this Agreement,
and any such written waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
hereof.
7. NOTICE
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Any notice hereunder shall be in writing and shall be deemed effective five (5)
days after it has been mailed, by certified mail, in the case of Employer or
TriCo addressed to the address above written, or such other address as Employee
knows to be the then corporate office of Employer or TriCo, to the attention of
the President of Employer or TriCo and, in the case of Employee, to Employee's
address as contained in the personnel records of Employer.
8. SEVERABILITY
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If any term or provision of this Agreement or the application thereof to any
person, property or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of such term
or provision to persons, property or circumstances other than those as to which
it is invalid or unenforceable, shall not be effected thereby, and each term
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
9. NO RESTRICTIONS
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Employee hereby represents and warrants that he is not now and will not be
subject to any agreement, restriction, lien, encumbrance, or right, title or
interest in any one, limiting in any way the scope of this Agreement or in any
way inconsistent with this Agreement.
10. NO ASSIGNMENT: BINDING EFFECT
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This Agreement shall be binding upon and inure to the benefit of Employer, its
successors or assigns. Except as to the obligation of Employee to render
personal services which shall be non-assignable, this Agreement shall be binding
upon and inure to the heirs, executors, administrators, and assigns of Employee.
11. HEADINGS
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The captions and headings contained herein have been inserted for convenience or
reference only and shall not affect the meaning or interpretation of this
Agreement.
12. GOVERNING LAW AND CHOICE OF FORUM
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This Agreement shall be construed and enforced in accordance with the laws of
the State of California and shall be enforced in the State or Federal Courts
sitting in California.
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Employee
TRICO BANCSHARES
By:
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William J. Casey, Chairman of the Board
TRI COUNTIES BANK
By:
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William J. Casey, Chairman of the Board