Exhibit 10.26
Participation Agreement
The 2005 North Bay Bancorp Supplemental Executive Retirement Plan
Participant: JOHN NERLAND
Eligibility Date: December 12, 2005
The above named Participant is authorized to receive benefits pursuant to The
2005 North Bay Bancorp Supplemental Executive Retirement Plan as described
below. Benefit accrual shall commence as of the Eligibility Date listed above.
Applicable Percentage Schedule:
After September 30, 2007 20%
After September 30, 2008 40%
After September 30, 2009 60%
After September 30, 2010 80%
After September 30, 2011 100%
Benefit Amount: Unless an alternate method of payment is selected using the
attached Distribution Election Form, the Company shall pay to the Participant
pursuant to the Plan during the Participant's lifetime, an amount equal to the
Participant's vested Applicable Percentage of Seventy Five Thousand Dollars
($75,000.00) per year in twelve (12) equal monthly installments.
(a) The amount of Participant Benefits payable under the Plan shall be
increased annually at the rate of two percent (2%) per year from the
date of commencement of payments of the Benefits until the death of
the Participant.
(b) Notwithstanding the Participant's vested Applicable Percentage, if the
Participant elects Early Retirement or in the event of any election by
Participant to commence payments of vested Participant Benefits prior
to the Participant's attainment of the Normal Retirement Date, the
Participant Benefits shall be the greater of (i) the Actuarial
Equivalent or (ii) that amount calculated as follows: The
Participant's Benefits shall be decreased by a percentage calculated
by subtracting the Participant's age as of the date payments are to
commence (which cannot be earlier than the Early Retirement Date) from
sixty-five (65), the age at which payment of Participant Benefits
would otherwise commence by the terms of the Plan, and multiplying the
result by a factor of five (5) (for example, a 15% reduction of the
Participant Benefits would occur if the Participant's age as of the
date payments are to commence is sixty-two (62), based on the
following calculation: 65-62=3x5=15%).
Normal Retirement Date: Attainment of age sixty-five (65).
Early Retirement Date: Attainment of age sixty-two (62).
Risk of Forfeiture:
Participant acknowledges that in the course of employment Participant has become
privy to confidential information of the Company including customer deposit,
loan, sales and marketing information, customer account records, proprietary
processing techniques, information regarding vendors and products, training and
operations memoranda and similar information, personnel records, pricing
information, financial information, and trade secrets concerning or relating to
the business, accounts, customers and employees and affairs of the Company (the
foregoing constituting "Confidential Information"). On account of the foregoing
and Participant's position of trust and confidence with the Company, Participant
agrees that in the event Participant voluntarily terminates employment and such
termination occurs after Participant has achieved an Applicable Percentage of
one hundred percent (100%) and such termination is not subject to the provisions
of Section 4.5 of the Plan, Participant shall forfeit any and all rights and
benefits, including Participant Benefits payable under the Plan, Participant may
have under the terms of this Participation Agreement and shall have no right to
be paid any of the amounts which would otherwise be due or paid to Participant
by the Company pursuant to the terms of this Participation Agreement if
Participant violates any of the following provisions prior to attaining Normal
Retirement Age.
(a) Participant shall not utilize Confidential Information, either
directly or indirectly, to call on, solicit, or take away as a client,
customer or prospective client or customer, or attempt to call on,
solicit or take away as a client, customer or prospective client or
customer, any person or entity that was a client, customer or
prospective client or customer of the Company. For purposes of this
Agreement "prospective client or customer" shall include any person or
entity with whom the Company has had contact for the purpose of
soliciting business within six months prior to Participant's voluntary
termination of employment or whom the Company intended to contact for
the purpose of soliciting business within six months after termination
of employment, of which contact or intended contact Participant had
knowledge while employed by the Company. Participant acknowledges that
it would be extremely difficult or impractical to determine whether
Participant used Confidential Information in connection with the
activity prohibited by this provision and that it is reasonable to
presume, based upon Participant's period of service to the Company,
that Participant used Confidential Information in connection with any
violation of this provision.
(b) Participant shall not, either directly or indirectly, on Participant's
own behalf or in the service or on behalf of others, solicit, divert ,
attempt to solicit, divert or induce or attempt to induce to
discontinue employment with the Company any person employed by the
Company, whether or not such employee is a full time employee or a
temporary employee of the Company and whether or not such employment
is for a determined period or is at will.
(c) Participant shall not, either directly or indirectly, use, disclose or
make available Confidential Information to any person or entity, nor
shall Participant use, disclose, make available or cause to be used,
disclosed or made available, or permit or allow, either on
Participant's own behalf or on behalf of others, any use or disclosure
of such Confidential Information.
Participant acknowledges and agrees that (i) a breach by Participant
of any of the foregoing covenants will result in the Company incurring
certain costs and damages in an amount that would be extremely
difficult or impractical to ascertain, (ii) the forfeiture of
Participant's rights and benefits under this Agreement bear a
reasonable relationship to the damages which the Company may suffer by
reason of Participant's breach, and (iii) the forfeiture of
Participant's rights and benefits under this Agreement is reasonable
and equitable considering that absent forfeiture of such rights and
benefits the Company will be in the position of paying benefits to
Participant while suffering damages on account of Participant's
breach.
Participant: ___________________________________________
John Nerland
North Bay Bancorp: ___________________________________________
(Signature of Authorized Executive)
Susan Fonseca SVP, Human Resources
------------------------------------
(Print Name and Title)
Date: __________________________