EXHIBIT 99.2
AMERICAN RIVER BANKSHARES
1998 DEFERRED COMPENSATION PLAN (Restated)
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Effective May 1, 1998, American River Bankshares established an unfunded plan
for the purpose of providing deferred compensation for a select group of
management and highly compensated employees. Following the release of proposed
regulations under Section 409A of the Code on October 4, 2005, the Plan has been
restated to comply with the requirements of Section 409A and to clarify certain
provisions of the Plan.
RECITALS
WHEREAS, Employees eligible to participate in this Plan are employed by
Employer; and
WHEREAS, Employer desires to amend the Plan to comply with Section 409A and the
Employees desire the Employer to pay deferred compensation to or for the benefit
of Employees, or a designated Beneficiary, or both;
NOW, THEREFORE, the Employer hereby restates this Plan, effective January 1,
2005.
SECTION 1
DEFINITIONS
1.1 "Account" shall mean the separate account(s) established under
this Plan for each participating Employee. The Employer shall furnish each
Employee with a statement of his or her account balance at least annually.
1.2 "Beneficiary" shall mean the Beneficiary designated by the
Employee under Section 4, to receive the Employee's deferred compensation
benefits in the event of his or her death.
1.3 "Change in Control" shall mean, with respect to an Employee,
the occurrence of a "Change in Control Event" described in Subsection 1.3(a)
with respect to a corporation that is a "Service Recipient" as defined in
Subsection 1.3(d). The term "Change in Control" as defined in this Section 1.3
is intended to comply with all relevant provisions of Proposed Treasury
Regulation Section 1.409A-3(g)(5) relating to changes in the ownership or
effective control of a corporation and changes in the ownership of a substantial
portion of the assets of a corporation.
(a) A "Change in Control Event" occurs on the date any of the
following events occur:
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(i) Any one person, or more than one person acting as a
group ("Person"), acquires ownership of stock of a corporation that,
together with stock previously held by such Person, raises the total
ownership from less than 50 percent of the total fair market value or
total voting power of such corporation to more than 50 percent of such
value or power.
(ii) Any Person acquires, during the 12-month period
ending on the date of the most recent acquisition, ownership of 35
percent or more of the total voting power of the stock of a
corporation, without regard to the stock owned by the Person before the
commencement of the 12-month period.
(iii) A majority of the members of a corporation's board of
directors is replaced in a 12-month period by directors who were not
endorsed by a majority of the board prior to the election or
appointment of each director.
(iv) Any Person acquires, during the 12-month period
ending on the date of the most recent acquisition, assets from a
corporation with a gross fair market value equal to or more than 40
percent of the total gross fair market value of all the assets of such
corporation prior to such acquisition or acquisitions. Gross fair
market value shall be determined without regard to any liabilities
associated with the assets. However, this subsection (iv) shall not
apply to the transfer of assets: (1) to an entity that is controlled by
the shareholders of such corporation immediately after the transfer;
(2) to a shareholder of such corporation with respect to the
shareholder's stock or in exchange for more stock; (3) to an entity of
which such corporation owns 50 percent or more of the total value or
voting power immediately after the transaction; (4) to a Person that
owns, directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of such corporation
immediately following the transaction; or (5) to an entity, at least 50
percent of the total value or voting power of which is owned
immediately following the transaction, directly or indirectly, by a
Person which owns directly or indirectly, 50 percent or more of the
total value or voting power of all the outstanding stock of such
corporation.
(b) If any Person controls a corporation under subsections (a)(i)
or (ii), the acquisition of additional control by the same Person shall not
cause a Change in Control.
(c) Persons will be considered to be acting as a group in
accordance with the provisions of Proposed Treasury Regulation Section
1.409A-3(g)(5)(vii)(C). For example, Persons will not be considered to be acting
as a group solely because they purchase or own stock of a corporation at the
same time, or as a result of the same public offering. However, Persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with a Service Recipient. Furthermore, if a person,
including an entity, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in
each corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the merged corporation.
(d) The term "Service Recipient" includes all of the following:
(i) the corporation for which an Employee performs services (relating to
Compensation deferred under this Agreement) at the time of a Change in Control
Event; (ii) any corporation liable to pay deferred compensation under this Plan;
(iii) any corporation which owns more than 50 percent of the total fair market
value and total voting power of any corporation described in clause (i) or (ii);
and (iv) any corporation in a chain of corporations in which each
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corporation owns more than 50 percent of the total fair market value and total
voting power of another corporation in the chain ending in a corporation
described in clause (i) or (ii).
1.4 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations promulgated thereunder.
1.5 "Committee" shall mean the Compensation Committee of the Board
of Directors of the Employer or any other committee designated by the Board of
Directors of the Employer to administer this Plan in accordance with Section 7
hereof.
1.6 "Compensation" shall mean the "base salary" and "cash bonuses"
as those terms are defined in Section 3.1.
1.7 "Effective Date" shall mean May 1, 1998, unless otherwise
specified by the Employer in a resolution approving and adopting this Plan.
1.8 "Employee" shall mean each employee of the Employer who is
selected to participate in this Plan pursuant to Section 2. References to
Employee shall include references to an Employee's Beneficiary where the context
so requires.
1.9 "Employer" shall mean American River Bankshares, any
successor, and any subsidiary that receives services from an Employee.
1.10 "Plan Year" shall mean the year beginning each January 1 and
ending December 31; notwithstanding the foregoing, the initial Plan Year shall
mean the period beginning with the Effective Date and ending on December 31,
1998.
1.11 "Plan" shall mean the American River Bankshares 1998 Deferred
Compensation Plan.
1.12 "Permanent Disability" shall have the meaning given such term
in the Employer's Disability Plan; provided that the Executive must, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or to last for a continuous period of at least 12 months (i)
be unable to engage in any substantial gainful activity or (ii) receive income
replacement benefits for a period of at least three months under an accident and
health plan covering other employees of the Employer. An Employee will not be
considered to have a Permanent Disability unless he or she furnishes proof of
such condition sufficient to satisfy the Committee, in its sole discretion.
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1.13 "Separation from Service" shall mean the termination of the
employment relationship between the Employee and the Employer. No Separation
from Service occurs while an Employee is on military leave, sick leave, or other
bona fide leave of absence until the period of leave exceeds six months or, if
longer, the length of absence to which the Employee has a right under contract
or statute or is otherwise permitted by the Employer.
1.14 "Unforeseeable Emergency" shall mean a severe financial
hardship of an Employee or Beneficiary resulting from (i) an illness or accident
of the Employee or Beneficiary, of a spouse of the Employee or Beneficiary, or
of a dependent (as defined by Code ss. 152(a)) of the Employee or Beneficiary;
(ii) the loss of property of the Employee or Beneficiary due to casualty; or
(iii) any other similar extraordinary and unforeseeable circumstance arising as
a result of an event or events beyond the control of the Employee or a
Beneficiary. The Committee, in its sole discretion, shall determine whether a
hardship constitutes an Unforeseeable Emergency based on all relevant facts and
circumstances. By way of example and not limitation, an Unforeseeable Emergency
shall include, but not be limited to (i) the need to pay funeral expenses of a
spouse or dependent, (ii) the need to pay expenses for medical care for an
Employee, the Employee's spouse, or any dependent of the Employee, or (iii)
payments necessary to prevent the eviction of an Employee from the Employee's
principal residence or foreclosure on the mortgage on that residence.
SECTION 2
ELIGIBILITY
2.1 Eligibility. Eligibility to participate in the Plan shall be
limited to full-time, executive and senior management officers of the Employer
with the title of chief executive officer, president, executive vice president,
or senior vice president, and who have been selected by the Committee to
participate in the Plan. The Committee shall designate Employees who shall be
covered by this Plan in a separate Acknowledgment, in the form attached hereto
as Appendix 1, for each such Employee. Participation in the Plan shall commence
as of the date such Acknowledgment is signed by the Employee and delivered to
the Employer, provided that deferral of compensation under the Plan shall not
commence until the Employee has complied with the election procedures set forth
in Section 3.3. Nothing in the Plan or in the Acknowledgment shall be construed
to require any contributions to the Plan on behalf of the Employee by the
Employer.
SECTION 3
DEFERRED COMPENSATION
3.1 Deferred Compensation. (a) Each participating Employee may
elect, in accordance with Section 3.3 of this Plan, to defer annually the
receipt of a portion of the Compensation for active service otherwise payable to
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him or her by the Employer during each year or portion of a year that the
Employee shall be employed by the Employer. Any Compensation deferred by
Employee pursuant to Section 3.3 shall be recorded by the Employer in an
Account, maintained in the name of the Employee, which Account shall be credited
with a dollar amount equal to the total amount of Compensation deferred during
each Plan Year under the Plan, together with earnings thereon credited in
accordance with Section 3.10, less taxes payable by the Employer on account of
such earnings. All deferrals shall be fully vested at all times. Deferral
elections shall be subject to a minimum dollar amount and maximum percentage
amounts as follows: (i) the minimum annual deferral amount is $5,000 which shall
be withheld from the employee's "base salary" or "cash bonus", and (ii) the
maximum deferral percentage amount is 80% of the Employee's "base salary" and
100% of the Employee's "cash bonus". For purposes of this Section 3.1 and
Appendix 3 hereto, "base salary" means an Employee's regular annual compensation
for a Plan Year, determined as of the first day of that year, excluding bonuses,
commissions, overtime, incentive payments, non-monetary awards, compensation
deferred pursuant to any other plans of the Employer and other special
compensation. For purposes of this Section 3.1 and Appendix 3 hereto, "cash
bonus" shall mean amounts (if any) awarded under the bonus policies maintained
by the Employer.
(b) Amounts deferred under the Plan shall be calculated and
withheld from the Employee's base salary and/or cash bonus after such
compensation has been reduced to reflect salary reduction contributions to the
Employer's Code Section 401(k) (savings) plan.
3.2 Payment of Account Balances. (a) The Employee shall elect
whether he or she will receive distribution of his or her entire Account,
subject to tax withholding requirements, (i) upon reaching a specified age; (ii)
upon passage of a specified number of years; (iii) upon Separation from Service,
or (iv) upon the earlier or latter to occur of (A) Separation from Service or
(B) passage of a specified number of years, as elected by the Employee. The
Employee shall also elect to receive all amounts payable to him or her in a lump
sum or in equal monthly installments over a designated period of sixty (60), one
hundred twenty (120) or one hundred eighty (180) months, pursuant to the
provisions of Section 3.2(e). A designation of the date and form of
distribution, pursuant to the requirements of Section 3.4, shall be required as
a condition of participation in this Plan.
(b) Distributions shall be made to the maximum extent allowable
under the election made by the Employee, except no distribution shall be made
(i) in violation of Section 3.8 below or (ii) to the extent that the receipt of
such distribution, when combined with the receipt of all other "applicable
employee remuneration" (as defined in Code Section 162(m)(4)), would cause any
remuneration received by the Employee to be nondeductible by the Employer under
Code Section 162(m)(1). The portion of any distribution amount that is not
distributed by operation of this Section 3.2(b) shall be distributed at the
earliest date on which the amount not distributed or any portion of the amount
not distributed may be distributed without causing any remuneration received by
the Employee to be nondeductible by the Employer under Code ss. 162(m)(1).
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(c) Upon termination of an Employee's employment with the Employer
by reason of Permanent Disability prior to the date when payment of Account
balances otherwise would commence under the provisions of this Section 3.2, the
Employee or the Employee's designated Beneficiary shall be entitled to receive
all amounts credited to the Account of the Employee as of the date of his or her
Permanent Disability (notwithstanding any contrary election to receive
distributions under the first sentence of Section 3.2(a)). Said amounts shall be
payable pursuant to the provisions of Section 3.2(e).
(d) In the event that the Employee dies prior to commencement or
completion of distribution of the entire balance of the Employee's Account, the
balance of the Account on the date of death shall be payable to Employee's
Beneficiary pursuant to the provisions of Section 3.2(e).
(e) The Employer shall distribute or direct distribution of the
balance of amounts previously credited to the Employee's Account, in a lump sum
or in monthly installments as designated by the Employee pursuant to Section
3.4. Distribution of the lump sum or the first installment shall be made or
commence within thirty (30) days following the date elected pursuant to Section
3.2(a) except as provided in Section 3.8. Subsequent installments, if any, shall
be made on the first day of each month following the first installment, or as
soon thereafter as administratively practicable, as determined by the Employer.
The amount of each installment shall be calculated by dividing the Account
balance as of the date of the distribution by the number of installments
remaining pursuant to the Employee's distribution election. Each installment, if
any, shall take into account earnings credited to the balance of the Account
remaining unpaid.
3.3 Election to Defer Compensation. (a) Each election of an
Employee to defer Compensation as provided in Section 3.1 of this Plan shall be
in writing, signed by the Employee, and delivered to Employer, together with all
other documents required under the provisions of this Plan, at least twenty (20)
days prior to the beginning of the Plan Year with respect to which the
Compensation to be deferred is otherwise payable to Employee; however, an
Employee may elect to defer "performance-based compensation" (as defined by
Section 409A of the Code) as late as six (6) prior to the end of the performance
period (i.e. by June 30, 2006 for 2006 performance-related compensation).
(b) An Employee who is hired or promoted during a Plan Year to a
position of eligibility and who is selected by the Committee for participation
in the Plan shall have twenty (20) days from the date of such selection in which
to submit the required election documents for the then-current Plan Year. Only
Compensation attributable to services performed after the required election
documents are received by the Employer may be deferred.
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(c) A deferral election shall be irrevocable with respect to any
Compensation covered by such election, including Compensation payable in the
Plan Year in which an election suspending or modifying the prior deferral
election is delivered to the Employer. A deferral election shall continue in
force for each successive year until or unless (i) suspended or modified by the
filing of a new election in accordance with the requirements of this Section 3.3
or (ii) cancelled pursuant to Section 3.7(b).
(d) The Employer shall withhold the amount or percentage of base
salary specified to be deferred in equal amounts for each payroll period and
shall withhold the amount or percentage of cash bonus specified to be deferred
at the time or times such bonus is or otherwise would be paid to the Employee.
(e) The election to defer Compensation shall be in the form
attached as Appendix 3.
3.4 Distribution Election. (a) Each distribution election of an
Employee as provided in Section 3.2 of this Plan shall be in writing, signed by
the Employee and delivered to Employer, together with all documents required
under the provisions of this Plan, at least twenty (20) days prior to the
beginning of the Plan Year with respect to which the distribution election is to
apply.
(b) An Employee who is hired or promoted during a Plan Year to a
position of eligibility and who is selected by the Committee for participation
in the Plan shall have twenty (20) days from the date of such selection in which
to submit the required election documents for the then-current Plan Year.
(c) Any distribution election made by an Employee shall be
irrevocable with respect to any Compensation covered by such election.
(d) An Employee's distribution election shall be in the form
attached hereto as Appendix 2.
3.5 Modification of Distribution Election. (a) Before December 31,
2006 an Employee may modify a distribution election relating to any amount
deferred before December 31, 2006, except that during 2006 the Employee may not
(i) postpone a payment that would otherwise be received in 2006 or (ii) cause a
payment to be made in 2006. A modification under this Subsection 3.5(a) shall be
in writing, signed by the Employee and delivered to the Employer on or before
December 31, 2006 using the form attached hereto as Appendix 4.
(b) After December 31, 2006 an Employee may modify a distribution
election only if the following requirements are met:
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(i) The modification must be delivered to the Employer at
least 12 months before the scheduled date of the payment to be modified.
Consequently, no modification of payments to be made upon reaching a specified
age or upon passage of a specified number of years may occur within 12 months of
the specified age or the end of the specified number of years;
(ii) The modification must defer the payment for at least
five (5) years from the date payment would otherwise have begun; and
(iii) The modification must be in writing, signed by the
Employee and delivered to the Employer using the form attached hereto as
Appendix 5.
3.6 Payment Upon Change in Control. Notwithstanding any other
provision of this Plan, an Employee shall receive distribution of his or her
Account, pursuant to the provisions of Section 3.2(e), commencing within thirty
(30) days following a Change in Control. Alternatively, an Employee may elect to
continue to participate in the Plan following a Change in Control if the Plan
remains in effect thereafter and the Employee notifies the Employer in writing,
not less than twenty (20) days prior to the effective date of the Change in
Control, of the Employee's election to remain a participant in the Plan.
3.7 Unforeseeable Emergency. Upon the Committee's determination
(following petition by the Employee) that an Employee has suffered an
Unforeseeable Emergency:
(a) The Employer shall distribute to the Employee that portion of
his or her Account balance that is reasonably necessary to satisfy the severe
financial need and to pay taxes reasonably expected as a result of the
distribution. The Committee shall take into account the extent the hardship
could be relieved through (i) compensation from insurance; (ii) cancellation of
further deferrals under this Plan and any other deferred compensation plan in
which the Employee participates (whether maintained by the Employer or any other
employer); (iii) distributions or loans available without tax penalty from any
benefit plan in which the Employee participates (whether maintained by the
Employer or any other employer); (iv) loans from commercial sources on
reasonable commercial terms; and (v) liquidation of the participant's assets (to
the extent such liquidation would not in itself cause severe financial
hardship). For purposes of this paragraph, an Employee's assets shall be deemed
to include those assets of the Employee's spouse and minor children that are
reasonably available to the Employee.
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(b) The Employee's deferral election shall be canceled with
respect to all Compensation earned after the date of the Unforeseeable
Emergency. The Employee shall be ineligible to defer any additional Compensation
under the Plan until the first day of the Plan Year following the second
anniversary of the date of the distribution. To resume deferrals, the Employee
must submit a new deferral election meeting the requirements of Section 3.3.
3.8 Payments to Key Employees. (a) If (i) any stock of the
Employer is traded on an established securities market, (ii) an Employee is
considered a Key Employee, and (iii) the Employee receives a distribution
because of a Separation from Service then (a) the Employee shall not receive any
distribution until the date which is six months after the date of Separation
from Service and (b) each scheduled distribution that becomes payable because of
the Separation from Service shall be delayed six months.
(b) Each year on December 31 the Employer shall designate an
Employee as a Key Employee if, at any time during the year, the Employee
satisfied the definition of Key Employee set forth in Code Section 416(i),
without regard to Section 416(i)(5). Designation as a Key Employee shall apply
for the 12 month period beginning April 1 after the designation. For example,
designation as a Key Employee on December 31, 2005 would apply from April 1,
2006 to March 31, 2007.
3.9 Employee's Rights Unsecured. The right of the Employee or his
or her designated Beneficiary to receive a distribution hereunder shall be an
unsecured claim against the general assets of the Employer, and neither the
Employee nor his or her designated Beneficiary shall have any rights in or
against any amount credited to his or her Account or any other specific assets
of the Employer. Nothing contained in this Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any kind or a
fiduciary relationship between the Plan and the Employer or any other person.
3.10 Investment of Account. The balance held in the Account shall
accrue interest at a rate per annum during a Plan Year equal to four percent
(4%) greater than the yield on five (5) year United States Treasury Bond as of
the beginning of each Plan Year, which interest should be determined and added
to the Account at the end of each calendar month during a Plan Year.
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SECTION 4
DESIGNATION OF BENEFICIARY
4.1 Beneficiary Designation. Employee may designate a Beneficiary
or Beneficiaries to receive any amount due hereunder by Employee via written
notice thereof to Employer at any time prior to his or her death and may revoke
or change the Beneficiary designated therein without the Beneficiary's consent
by written notice delivered to Employer at any time and from time to time prior
to Employee's death. If Employee is married and a resident of a community
property state, one half of any amount due hereunder which is the result of an
amount contributed to the Plan during such marriage is the community property of
the Employee's spouse and Employee may designate a Beneficiary or Beneficiaries
to receive only the Employee's one-half interest. If Employee shall have failed
to designate a Beneficiary, or if no such Beneficiary shall survive him or her,
then such amount shall be paid to his or her estate. Designations of
Beneficiaries shall be in the form attached hereto as Appendix 6.
SECTION 5
UNSECURED GENERAL OBLIGATION
5.1 No Account Segregation. No special or separate fund shall be
established and no other segregation of assets shall be made to assure the
payment of any benefits hereunder. All Account balances shall be subject to the
claims of general creditors of the Employer in the event the Employer becomes
insolvent. The obligations of the Employer to pay benefits under the Plan
constitute an unfunded, unsecured general obligation and promise to pay and
Employees shall have no greater rights than general creditors of the Employer.
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SECTION 6
AMENDMENT AND TERMINATION
6.1 Amendment. The Employer shall have the right to amend this
Plan at any time and from time to time, including a retroactive amendment, if
required to comply with applicable law or rules and regulations of governmental
or regulatory authorities, including, without limitation, the United States
Internal Revenue Service or Department of Labor, California State Franchise Tax
Board, Federal Deposit Insurance Corporation or California Commissioner of
Financial Institutions. Any such amendment shall become effective upon the date
stated therein, and shall be binding on all Employees, except as otherwise
provided in such amendment; provided, however, that said amendment shall not
affect adversely benefits payable to an affected Employee without the Employee's
written approval.
6.2 At-will Termination. The Employer may terminate this Plan at
will. Termination of this Plan shall cease all future deferrals, but shall not
accelerate the payment of benefits unless subsection (a) or (b) applies.
(a) If the following conditions are satisfied, all Employee
Accounts will be distributed to Employees within thirty (30) days of the
termination of the Plan:
(i) All other arrangements sponsored by the Employer that
would be aggregated with this Plan under Prop. Reg. ss. 1.409A-1(c) if an
Employee participated in such arrangement or arrangements, must also be
terminated;
(ii) No payment of benefits may occur within 12 months of
the termination of this Plan and all other arrangements (other than benefit
payments that would be payable without regard to the termination);
(iii) All Employee Accounts must be paid to Employees
within 24 months of the termination; and
(iv) For the five-year period following the date of
termination, the Employer may not adopt a new arrangement that would be
aggregated as provided in condition (i) with any terminated arrangement.
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(b) Plan Termination Upon Dissolution or Bankruptcy. If the
Employer terminates this Plan within 12 months of a corporate dissolution taxed
under Code ss. 331, or at any time with the approval of a U.S. Bankruptcy Court
pursuant to 11 U.S.C. ss. 503(b)(1)(A), then all Employee Accounts shall be paid
to Employees in lump sums and included in the gross income of each Employee in
the latest of (i) the calendar year in which the plan termination occurs, (ii)
the calendar year in which the amount is no longer subject to a substantial risk
of forfeiture or (iii) the first calendar year in which the payment is
administratively practicable.
SECTION 7
ADMINISTRATION
7.1 Administration. The Committee shall administer and interpret
this Plan in accordance with the provisions of the Plan. Any determination or
decision by the Committee shall be conclusive and binding on all persons who at
any time have or claim to have any interest whatever under this Plan.
7.2 Liability of Committee; Indemnification. To the maximum extent
permitted by law, the Committee shall not be liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this Plan unless attributable to his or her own bad faith or willful misconduct.
The Committee may employ legal counsel, consultants, actuaries and agents as
they may deem desirable in the administration of the Plan and may rely on the
opinion of such counsel or the computations of such consultant engaged by the
Committee prior to their finalization.
7.3 Expenses. The costs of the establishment of the Plan and the
adoption of the Plan by Employer, including but not limited to legal and
accounting fees, and the expenses of administering the Plan shall be borne by
the Employer.
SECTION 8
GENERAL AND MISCELLANEOUS
8.1 Notices. All notices and other communications provided for in
this Plan shall be given or made by personal delivery or by certified or
registered mail, postage prepaid and return receipt requested, or by a
nationally recognized overnight courier service, to the address set forth below.
All such notices or communications shall be deemed to have been duly given when
received by Employer or Employee, or their respective authorized representatives
at the address set forth below in the case of the Employer and in Appendix 1 in
the case of the Employee, or such changed addresses as may be designated in
writing by either party to the other from time to time.
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American River Bankshares
3100 Zinfandel Drive, Suite 450
Rancho Cordova, CA 95670
Attn: Chairman of the Board
8.2 Rights Against Employer. Except as expressly provided by the
Plan, the establishment of this Plan shall not be construed as giving to any
Employee or to any person whomsoever, any legal, equitable or other rights
against the Employer, or against its officers, directors, agents or
shareholders, or as giving to any Employee or Beneficiary any equity or other
interest in the assets, business or shares of Employer stock or giving any
Employee the right to be retained in the employment of the Employer. Neither
this plan nor any action taken hereunder shall be construed as giving to any
Employee the right to be retained in the employ of the Employer or as affecting
the right of the Employer to dismiss any Employee. Any benefit payable under the
Plan shall not be deemed salary or other compensation for the purpose of
computing benefits under any employee benefit plan or other arrangement of the
Employer for the benefit of its Employees.
8.3 Assignment or Transfer. No right, title or interest of any
kind in the Plan shall be transferable or assignable by any Employee or
Beneficiary or be subject to alienation, anticipation, encumbrance, garnishment,
attachment, execution or levy of any kind, whether voluntary or involuntary, nor
subject to the debts, contracts, liabilities, engagements, or torts of the
Employee or Beneficiary. Any attempt to alienate, anticipate, encumber, sell,
transfer, assign, pledge, garnish, attach or otherwise subject to legal or
equitable process or encumber or dispose of any interest in the Plan shall be
void.
8.4 Severability. If any provision of this Plan shall be declared
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions of this Plan but shall be fully severable, and
this Plan shall be construed and enforced as if said illegal or invalid
provision had never been inserted herein.
8.5 Construction. The article and section headings and numbers are
included only for convenience of reference and are not to be taken as limiting
or extending the meaning of any of the terms and provisions of this Plan.
Whenever appropriate, words used in the singular shall include the plural or the
plural may be rear as the singular. When used herein, the masculine gender
includes the feminine gender.
8.6 Governing Law. The validity and effect of this Plan and the
rights and obligations of all persons affected hereby shall be construed and
determined in accordance with the laws of the State of California unless
superseded by federal law.
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8.7 Payment Due to Incompetence. If the Committee receives
evidence that an Employee or Beneficiary entitled to receive any payment under
the Plan is physically or mentally incompetent to receive such payment, the
Committee may, in its sole and absolute discretion, direct the payment to any
other person or legal representative legally appointed by a court of competent
jurisdiction or to any other person determined by the Employer to be a proper
recipient on behalf of such person otherwise entitled to payment, or any of
them, in such manner and proportion as the Employer may deem proper. Any such
payment shall be in complete discharge of the Employer's obligations under this
Plan.
8.8 Taxes. The Employer may withhold from any benefits payable
under this Plan, all federal, state, city or other taxes as shall be required
pursuant to any law, regulation or ruling of any governmental authority. All
amounts deferred pursuant to this Plan shall constitute "wages" for social
security, Medicare and related tax purposes during the year deferred.
8.9 Arbitration. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the Parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
in accordance with the rules and procedures of JAMS then in effect. In the event
JAMS is unable or unwilling to conduct such arbitration, or has discontinued its
business, the Parties agree that a representative member, selected by the mutual
agreement of the Parties, of the American Arbitration Association ("AAA"), shall
conduct such binding arbitration in accordance with the rules and procedures of
the AAA then in effect. Notice of the demand for arbitration shall be filed in
writing with the other party to this Agreement and with JAMS (or AAA, if
necessary). In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable statute of
limitations. Any award rendered by JAMS or AAA shall be final and binding upon
the Parties, and as applicable, their respective heirs, beneficiaries, legal
representatives, agents, successors and assigns, and may be entered in any court
having jurisdiction thereof. The obligation of the Parties to arbitrate pursuant
to this clause shall be specifically enforceable in accordance with, and shall
be conducted consistently with, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Sacramento, California, unless otherwise agreed to by the Parties.
8.10 Binding Effect. This Plan shall be binding upon and inure to
the benefit of the Employer and its successors and assigns and the Employee and
the Employee's Beneficiary designee, their respective heirs, personal
representatives, executors, administrators and legatees.
26
APPENDIX 1
ACKNOWLEDGEMENT
The undersigned Employee hereby acknowledges that the Employer has selected him
or her as a participant in the American River Bankshares 1998 Deferred
Compensation Plan, subject to all terms and conditions of the Plan, a copy of
which has been received, read, and understood by the Employee in conjunction
with executing this Acknowledgement. The Employee acknowledges that he or she
has had satisfactory opportunity to seek legal counsel and ask questions
regarding his or her participation in the Plan and has received satisfactory
answers to any questions asked. The Employee also acknowledges that he or she
has sufficient knowledge and experience in financing and business matters to be
capable of evaluating the merits and risks of participation in the Plan. The
Employee understands that his or her participation in the Plan shall not begin
until this Acknowledgement has been signed by the Employee and returned to the
Employer.
EMPLOYEE AMERICAN RIVER BANKSHARES
Dated: ___________________________ Dated: ___________________________
Signed: ___________________________ Signed: ___________________________
Charles D. Fite
Chairman of the
Board of Directors
Employee's Address:
___________________________________
___________________________________
___________________________________
27
APPENDIX 2
DISTRIBUTION ELECTION
Pursuant to Section 3.4 of the American River Bankshares 1998 Deferred
Compensation Plan (the "Plan"), I hereby elect to have all amounts credited to
my Account during the period of my participation in the Plan, together with any
earnings credited thereon, distributed to me on the terms elected below.
I elect to have any distribution of my Account paid to me:
_______ upon reaching age: ______
_______ upon the passage of _____ years
_______ upon Separation from Service
_______ upon the earlier to occur of Separation from Service
or passage of _____ years
_______ upon the later to occur of Separation from Service of
passage of _____ years
I elect to have any distribution of my Account paid to me in:
_______ a lump sum
_______ sixty (60) monthly installments determined as of each
installment date by dividing the entire amount in my
Account (including earnings) by the number of
installments then remaining to be paid, with the
final installment to be the entire remaining balance
in the Account.
_______ one hundred twenty (120) monthly installments
determined as of each installment date by dividing
the entire amount in my Account (including earnings)
by the number of installments then remaining to be
paid, with the final installment to be the entire
remaining balance in the Account.
_______ one hundred eighty (180) monthly installments
determined as of each installment date by dividing
the entire amount in my Account (including earnings)
by the number of installments then remaining to be
paid, with the final installment to be the entire
remaining balance in the Account.
Dated: _________________________
Signed: _________________________
28
APPENDIX 3
DEFERRAL ELECTION
I understand that, under Section 3.1 of the American River Bankshares 1998
Deferred Compensation Plan (the "Plan"), the minimum annual deferral amount is
$5,000 of base salary or cash bonus and the maximum annual deferral amount is
80% of base salary and 100% of cash bonus for the Plan Year in question. I
elect, pursuant to Section 3.3 of the Plan, to make the following compensation
deferral(s):
______% of base salary or cash bonus (but not to exceed
eighty percent (80%) of base salary or one hundred
percent (100%) of cash bonus), payable to me by
Employer [minimum = $5,000], or
$______ of base salary or cash bonus payable to me by
Employer (but not to exceed eighty percent (80%) of
base salary or one hundred percent (100%) of cash
bonus) [minimum = $5,000],
and
______% of any cash bonus payable to me by Employer, or
$______ of any cash bonus payable to me by Employer, or
all of any cash bonus payable to me by Employer
except for $_______
This election shall take effect for the Plan Year beginning the ___ day of
___________, ____. It may be terminated or modified by me only with written
notice. The election shall remain in effect for each successive Plan Year until
a termination, modification or subsequent election is submitted. The deferral of
compensation hereby elected is subject to all of the terms and conditions of the
Plan, a copy of which I have been given by the Employer, and which I have read
and understood.
Dated: _________________________
Signed: _________________________
29
APPENDIX 4
MODIFICATION OF DISTRIBUTION ELECTION (before December 31, 2006)
Pursuant to Section 3.5(a) of the American River Bankshares 1998 Deferred
Compensation Plan (the "Plan"), I hereby elect to have all amounts previously
credited to my Account during the period of my participation in the Plan,
together with any earnings credited thereon, distributed to me on the terms
elected below.
I elect to have any distribution of my Account paid to me:
_______ upon reaching age: ______
_______ upon the passage of _____ years
_______ upon Separation from Service
_______ upon the earlier to occur of Separation from Service
or passage of _____ years
_______ upon the later to occur of Separation from Service of
passage of _____ years
I elect to have any distribution of my Account paid to me in:
_______ a lump sum
_______ sixty (60) monthly installments determined as of each
installment date by dividing the entire amount in my
Account (including earnings) by the number of
installments then remaining to be paid, with the
final installment to be the entire remaining balance
in the Account.
_______ one hundred twenty (120) monthly installments
determined as of each installment date by dividing
the entire amount in my Account (including earnings)
by the number of installments then remaining to be
paid, with the final installment to be the entire
remaining balance in the Account.
_______ one hundred eighty (180) monthly installments
determined as of each installment date by dividing
the entire amount in my Account (including earnings)
by the number of installments then remaining to be
paid, with the final installment to be the entire
remaining balance in the Account.
Dated: _________________________
Signed: _________________________
30
APPENDIX 5
MODIFICATION OF DISTRIBUTION ELECTION (after December 31, 2006)
Pursuant to Section 3.5(b) of the American River Bankshares 1998 Deferred
Compensation Plan (the "Plan"), I hereby elect to postpone previously elected
payments as provided below. I understand that if this election does not comply
with the following three requirements it is void and unenforceable under the
Plan:
(a) This Subsequent Election shall not take effect until 12 months
after the date on which it is made.
(b) Any payment with respect to which this Subsequent Election
applies must be deferred for at least five years from the date the payment would
otherwise have been made.
(c) No Subsequent Election relating to payments to be made upon
reaching a specified age or upon the passage of a specified number of years may
be entered into within 12 months of the specified age or the end of the
specified number of years.
Under these rules:
___ If my previous election was to receive a distribution upon reaching a
specified age, this Subsequent Election may not allow a distribution of the
amount specified until five years following the date the specified age will
be reached. For example, if a distribution was to be made in the year of my
65th birthday, this election must postpone the distribution until the year
of my 70th birthday.
___ If my previous election was to receive a distribution upon the passage of a
specified number of years, this Subsequent Election may not allow a
distribution of the amount specified until the passage of five years in
addition to the number of years previously elected. For example, if a
distribution was to be made in 2015, this election must postpone the
distribution until 2020.
___ If my previous election was to receive a distribution upon Separation from
Service, this Subsequent Election may not allow a distribution of the
amount specified until five years following Separation from Service.
___ There must be no possibility that this Subsequent Election will allow a
distribution to be made within 5 years after the date the distribution
would be made under my previous election. For example, if I previously
elected to receive a distribution on Separation from Service I cannot make
a Subsequent Election for distribution at age 70, even if I plan on
retiring at age 65, because the five year rule would be violated if, for
instance, I didn't retire until age 66.
___ If the date payments will begin is deferred for at least five years, I may
choose to have the entire amount distributed in a lump sum or under any of
the other installment options provided by the Plan, regardless of my
previous form of payment election.
I elect
___ to have ______% of the balance of my Account as of the ___ day
of ___________, ____,
___ to have $______________of my Account as of the ___ day of __________, ____,
distributed to me
31
_______ upon reaching age: ______
_______ upon the passage of _____ years
_______ upon the passage of _____ years after Separation
from Service
______ upon the earlier to occur of the passage of _____
years after Separation from Service or the passage of
_____ years
______ upon the later to occur of the passage of _____
years after Separation from Service or the passage of
____ years
I elect to have this distribution of my Account paid to me in:
______ a lump sum
______ sixty (60) monthly installments determined as of each
installment date by dividing the entire amount in my
Account (including earnings) by the number of
installments then remaining to be paid, with the
final installment to be the entire remaining balance
in the Account.
______ one hundred twenty (120) monthly installments
determined as of each installment date by dividing
the entire amount in my Account (including earnings)
by the number of installments then remaining to be
paid, with the final installment to be the entire
remaining balance in the Account.
______ one hundred eighty (180) monthly installments
determined as of each installment date by dividing
the entire amount in my Account (including earnings)
by the number of installments then remaining to be
paid, with the final installment to be the entire
remaining balance in the Account.
Dated: _________________________
Signed: _________________________
32
APPENDIX 6
BENEFICIARY DESIGNATION
In the event I should die prior to the receipt of all money accrued to my credit
under this election, I elect to have the balance paid to the following named
individual(s) in the following percentage(s):
100% to my spouse _________________________________
_______% _________________________________
_______% _________________________________
Dated: _________________________
Signed: _________________________
33