EXHIBIT
10.7(b)
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into as of the ___ day
of January, 2007, by and between Umpqua Holdings Corporation, an
Oregon corporation (“Umpqua”) and Glen C. Terry
(“Employee”). This Agreement is effective subject
to and as of the closing of the merger (the “Merger”)
between Umpqua and North Bay Bancorp (the “Company”)
pursuant to an Agreement and Plan of Reorganization dated January
___, 2007. The closing date of the Merger is the
“Effective Date.”
BACKGROUND
WHEREAS, the
Employee possesses valuable knowledge and skills that have
contributed to the operation of the Company and its subsidiary The
Vintage Bank (the “Bank”);
WHEREAS, the
Company is currently negotiating a definitive agreement (the
“Merger Agreement”) with Umpqua Holdings Corporation
(“Umpqua”) pursuant to which the Company would merge
with and into Umpqua (the “Merger”);
WHEREAS, Umpqua
has expressed an unwillingness to enter into the Merger Agreement,
unless the Employment Agreement is amended to assure Umpqua that
Employee will continue as an employee post-Merger;
WHEREAS, the
Company and Umpqua desire to continue Employee’s employment
and the Employee is willing to continue to be employed by Umpqua
following the Merger;
WHEREAS,
Employee desires to realize certain benefits under the Employment
Agreement that would result from the Merger and therefore is
willing to amend and restate the Employment Agreement as set forth
herein.
WHEREAS, Umpqua
and the Employee desire to enter into this Agreement upon the terms
and subject to the conditions hereinafter set forth and, upon the
Effective Date, in place of that certain Employment Agreement
entered into between the Bank and Employee as of June ___, 2006
(the “Employment Agreement”) and that this Agreement
shall replace the Employment Agreement;
NOW, THEREFORE,
in consideration of the premises, agreements and mutual covenants
set forth herein, the parties hereto hereby agree as
follows:
1.
Employment
1.1
General
.
Umpqua,
either directly or through its Umpqua Bank subsidiary, hereby
employs the Employee as Senior Vice President of Umpqua Bank /
Manager of Commercial Banking Center Napa and Solano Counties, on
the terms and subject to the conditions contained in this
Agreement, and the Employee hereby accepts such employment on the
terms and subject to the conditions contained in this
Agreement.
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1.2
Duties of
Employee . During the Term of
this Agreement, the Employee shall diligently perform all duties
and responsibilities reasonably accorded to and expected of a
Senior Vice President of Umpqua, and as may be assigned to him by
the Board of Directors of Umpqua (the “Board of
Directors”), Umpqua Bank’s President--California Region
or Umpqua’s Executive Vice President / Regional Manager, to
whom Employee shall directly report. Employee shall exercise
such power and authority as may from time to time be delegated to
him thereby. The Employee shall devote his full business time
and attention to the business and affairs of Umpqua as necessary to
perform his duties and responsibilities hereunder, render such
services to the best of his ability and use his best efforts to
promote the interests of Umpqua and shall not, without the consent
of the Board of Directors, render to others services of any kind
for compensation, or engage in any other business activity that
would interfere with the performance of his duties under this
Agreement. The Employee shall faithfully adhere to, execute
and fulfill all policies established by Umpqua.
1.3
Place of
Performance . Except for required travel
for Umpqua’s business, the Employee shall perform his duties
and responsibilities from the office of Umpqua at 1500 Soscol
Avenue, Napa, California.
1.4
Prior
Employment Agreement .
Employee agrees
that he will not be entitled to any further benefits under the
Employment Agreement, except that Employee is entitled to those
benefits listed on Exhibit B as a result of the Merger. This
Agreement sets forth the terms of Employee’s employment with
Umpqua and provides Employee benefits in certain circumstances
where Employee’s employment is terminated or another Change
in Control (defined below) occurs.
2.
Term
.
Subject
to the provisions of Section 4 of this Agreement, the parties
acknowledge that the term of Employee's employment under this
Agreement shall commence on the Effective Date of and continue
hereunder until January 4, 2010 (the “Term”).
Notwithstanding the term of this Agreement, Umpqua may
terminate Employee’s employment at any time for any lawful
reason or for no reason at all, subject to the provisions of this
Agreement. Unless the Employee shall have notified the Company, or
the Company shall have notified the Employee, not less than sixty
(60) days prior to the expiration of the Term of such party's
election not to continue the Term of this Agreement, upon
expiration of the Term, the Employee's employment shall continue
pursuant to the terms of Umpqua’s standard form of Employment
Agreement for similarly situated executives in effect at the end of
the Term. The election by the Company not to continue the
Term of Employee's employment shall not be deemed a termination
without cause pursuant to Section 4.1(b) hereof.
3.
Compensation
.
3.1
Salary
.
During
the Term of the Employee's employment hereunder, the Employee shall
receive an annual salary equal to Employee’s salary with
Company in effect immediately prior to the Effective Date, which
Employee and Umpqua acknowledge will be between of $175,000.00 and
$183,750.00 as determined by Company’s Compensation
Committee, and which shall be payable at such times and in such
manner as Umpqua's normal payroll schedule may from time to time
provide. Following the Effective Date, Employee’s
annual salary shall be subject to annual adjustment as may be
determined by Umpqua in its sole and absolute
discretion.
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3.2
Incentive
Compensation; Change in Control Payment; Retention
Bonus .
(a)
The Employee
shall be eligible to receive as additional compensation to be paid
at a time or times and in a manner consistent with Umpqua's normal
practices for the payment of annual bonuses: (i) for the period
commencing January 1, 2007 through the Effective Date (the
“Pre-Merger Period”), an amount equal to 50% of
Employee’s salary received for the Pre-Merger Period, and
(ii) for the period commencing the day immediately following the
Effective Date through December 31, 2007 (the “Post-Merger
Period”) incentive compensation as determined pursuant to
Umpqua’s Commercial Banking Center Manager Incentive Plan (as
amended in 2007) substantially similar to the form attached hereto
as Exhibit C (the “Umpqua Incentive Plan”) with
a targeted percentage of 30% of salary received during the
Post-Merger Period. For each year during his employment
hereunder after 2007, Employee shall be eligible to receive as
additional compensation, incentive compensation pursuant to an
Umpqua CBC Incentive Plan for such year, targeted at 30% of annual
salary to be paid at a time or times and in a manner consistent
with Umpqua's normal practices for the payment of bonuses.
The amounts Employee shall be eligible to receive under this
Section 3.2(a) are referred to herein as “Incentive
Compensation.”
(b)
On January 2,
2008, Umpqua shall pay the Employee $175,000 (the “Change in
Control Payment”).
(c)
In addition to
eligibility for Incentive Compensation pursuant to Section 3.2(a),
if Employee is employed by Umpqua (i) as of January 2, 2009,
Employee shall be eligible to receive on such date, a bonus in the
amount of $85,000.00; and (ii) as of January 4, 2010, Employee
shall be eligible to receive on such date, a bonus in the amount of
$85,000 (collectively, the “Retention
Bonus”).
3.3
Benefits
.
During his employment
hereunder, the Employee shall be entitled to participate in all
plans adopted for the general benefit of Umpqua's management
employees, including medical plans and 401(k) plan, to the extent
that the Employee is and remains eligible to participate therein
and subject to the eligibility provisions of such plans in effect
from time to time. In the event Employee’s employment
hereunder is terminated and the Employee is entitled to
compensation pursuant to Section 4.4(b), the Employee shall be
entitled to continue to participate in Umpqua’s medical plan
until the earlier of (a) expiration of the applicable payment
period set forth in Section 4.4(b)(i) or (b) the date Employee
obtains new employment.
3.4
Vacation;
Sick Leave . During each calendar
year of his employment hereunder, the Employee shall be entitled to
four weeks vacation in accordance with Umpqua’s vacation
policy set forth in Umpqua’s Employee Handbook as in effect
from time to time. Employee may be absent from his employment
only at such time as Umpqua’s President--California Region or
Executive Vice President / Regional Manager shall determine from
time to time unless such absence is on account of physical or
mental illness or injury. Employee may attend work-related
banking conferences, seminars and affiliation meetings and such
work-related attendance shall not be vacation time. Subject
to the right of Umpqua to terminate the Employee’s employment
hereunder as provided in Section 4.1(c), the Employee shall be
entitled to a sick leave accrual in accordance with Umpqua’s
Employee Handbook as in effect from time to time.
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3.5
Withholding
.
Notwithstanding any
provision in this Agreement to the contrary, all payments required
to be made by Umpqua to the Employee hereunder or otherwise arising
out of, related or incidental to or in connection with the
Employee's employment hereunder shall be subject to withholding of
such amounts relating to taxes as Umpqua may reasonably determine
it should withhold pursuant to any applicable law or
regulation.
3.6
Reimbursement of
Expenses . Subject to Umpqua’s
reimbursement policies in effect from time to time, Umpqua agrees
to reimburse the Employee for all reasonable business travel and
other out-of-pocket expenses incurred by the Employee in the
discharge of his duties hereunder. All reimbursable expenses
shall be appropriately documented in reasonable detail by the
Employee upon submission of any request for reimbursement, and in a
format and manner consistent with Umpqua's expense reporting
policy, as well as applicable federal and state tax record keeping
requirements.
3.7
Automobile; Club
Membership . Umpqua will pay to Employee
an automobile allowance in the amount of five hundred dollars
($500) per month. Umpqua will reimburse Employee monthly
membership dues, assessments and minimum charges for Napa Valley
Country Club (provided Employee purchases a membership) and Green
Valley Country Club through the monthly expense report pursuant to
Umpqua’s reimbursement policy in an amount not to exceed
$1,000. Subject to Section 3.6, expenses related to client and
prospective client entertainment including golf, dinner and events
at Napa Valley Country Club and Green Valley Country Club are
reimbursable expenses. The Employee shall be responsible for
insurance and maintenance costs associated with such
automobile’s operation. Employee shall procure and
maintain an automobile liability insurance policy on the
automobile, with coverage including Employee for at least a minimum
of $300,000 for bodily injury or death to any one person in any one
accident, and $100,000 for property damage in any one accident.
The Employer shall be named as an additional insured and
Employee shall provide Employer copies of policies evidencing
insurance and Employer’s inclusion as an additional
insured.
3.8
Absence
Policy . Employee shall abide
by Umpqua’s Absence Policy as in effect from time to time
during the Term of this Agreement.
4.
Termination
4.1
By
Company .
(a)
With Cause . Notwithstanding any provision in this
Agreement to the contrary, the Employee's employment hereunder may
be terminated by Umpqua at any time for "Cause," and such
termination shall be effective immediately upon written notice to
the Employee. For purposes of this Agreement, "Cause" for the
termination of the Employee's employment hereunder shall be deemed
to exist if, in the reasonable judgment of the Board of Directors:
(i) the Employee commits fraud, theft, embezzlement or other
material act of dishonesty against Umpqua, or any subsidiary or
affiliate thereof; (ii) the Employee is convicted of a felony or a
misdemeanor which may be reasonably interpreted to be harmful
to Umpqua’s reputation; (iii) the Employee compromises trade
secrets or other proprietary information of Umpqua, or any
subsidiary or affiliate thereof; (iv) the Employee breaches any
non-solicitation agreement with Umpqua, or any subsidiary or
affiliate thereof; (v) the Employee breaches any of the terms of
this Agreement (other than those referenced in clauses (iii) and
(iv) of this Section 4.1(a)) and fails to cure such breach within
ten (10) days after the receipt of written notice of
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such breach
from Umpqua; (vi) the Employee engages in any grossly negligent act
or willful misconduct that causes, or could be reasonably expected
to cause, harm to the business, operations or reputation of Umpqua,
or any subsidiary or affiliate thereof; (vii) the Employee breaches
any fiduciary duty to Umpqua; or (viii) Umpqua, or any subsidiary
or affiliate thereof, is ordered to terminate this Agreement by any
governmental regulatory agency with supervisory authority over
Umpqua, or any subsidiary or affiliate thereof.
(b)
Without Cause . Umpqua may at any time, in its sole
and absolute discretion, terminate the employment of the Employee
hereunder without Cause, or otherwise without any cause, reason or
justification, provided that Umpqua provides to the Employee
written notice (the "Termination Notice") of such termination.
In the event of any such termination by Umpqua, the
Employee's employment with Umpqua shall cease and terminate on the
date specified in the Termination Notice.
(c)
For Disability of the Employee . If, as a result of
physical or mental illness or injury, the Employee shall have been
unable, in the reasonable judgment of the Board of Directors, to
perform the essential functions of his position on a full-time
basis for a period of sixty (60) consecutive days, or for a total
of ninety (90) days in any twelve-month period (a "Disability"),
then thirty (30) days after written notice to the Employee (which
notice may be given before or after the end of the aforementioned
periods, but which shall not be effective earlier than the last day
of the applicable period), Umpqua may terminate the
Employee’s employment hereunder if the Employee is unable to
resume his full-time duties at the conclusion of such notice
period.
4.2
Death of
the Employee . This Agreement shall
immediately cease and terminate upon the death of
Employee.
4.3
Termination by
Employee . The Employee may
terminate his employment under this Agreement upon not less than
ninety (90) days prior written notice to Umpqua. Upon
learning that the Employee is terminating his employment under this
Agreement, Umpqua may, in its sole discretion but subject to its
other obligations under this Agreement, relieve Employee of his
duties under this Employment Agreement, and assign Employee other
reasonable duties and responsibilities to be performed until the
termination becomes effective.
4.4
Compensation Upon Early
Termination.
(a)
As a Result
of Death, Cause or Resignation without Good Reason
. If the
Employee’s employment under this Agreement is terminated
prior to the scheduled expiration of the Term by reason of his
death, termination by Umpqua for Cause or resignation by the
Employee without Good Reason, the Employee shall be entitled to be
paid solely (i) the Employee's salary then in effect through the
effective date of termination, (ii) any accrued but unused vacation
pursuant to Section 3.4, (iii) any amounts due pursuant to Section
3.6, (iv) those benefits, if any, that have vested by operation of
state or federal law or under any written term of a plan
(“Vested Benefits”), and (v) health care coverage
continuation rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA Rights”), and Umpqua
shall have no further liability or other obligation of any kind
whatsoever to the Employee. For purposes of this Agreement,
“Good Reason” exists if (i) Employee is required to
relocate to an office that is 35 miles or more from the office at
1500 Soscol Avenue, Napa, California, and does not consent to such
relocation or (ii) Employee’s annual base salary is reduced.
In the case of
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termination as
a result of the death of Employee, Employee shall also be entitled
to receive any unpaid Change in Control Payment or Retention Bonus
and any amounts due pursuant to this Section 4.4(a) shall be paid
to the Employee's estate, heirs (at law), devisees, legatees or
other proper and legally entitled descendants, or the personal
representative, executor, administrator or other proper legal
representative on behalf of such descendants.
(b)
By Umpqua
other than for Cause or by Employee for Good Reason
. Except
as otherwise expressly provided in Section 4.4(d), if, prior to the
scheduled expiration of the Term, Umpqua terminates the
Employee’s employment without Cause or Employee terminates
the Employee’s employment for Good Reason, the Employee shall
be entitled to receive and be paid solely (i) the Employee's salary
then in effect until the expiration of twelve (12) months following
the effective date of the termination of Employee's employment
payable over such period at Umpqua's regular and customary
intervals for the payment of salaries as in effect from time to
time if Employee has been employed by Umpqua (with credit for years
of service with Company) for more than five (5) years but less than
ten (10) years; or the Employee's salary then in effect until the
expiration of eighteen (18) months following the effective date of
the termination of Employee's employment payable over such period
at Umpqua's regular and customary intervals for the payment of
salaries as in effect from time to time if Employee has been
employed by Umpqua for more than ten (10) years (“Severance
Pay”), (ii) a pro rata portion of Employee’s Incentive
Compensation, if any during the applicable period Employee was
employed by Umpqua (which portion of the Incentive Compensation
shall be reasonably determined by the Board of Directors as of the
date of termination of the Term and paid when otherwise payable
pursuant to Section 3.2, (iii) any accrued but unused vacation
pursuant to Section 3.4, (iv) any amounts due pursuant to Section
3.6, (v) any Vested Benefits, (vi) any COBRA Rights, and (vii) any
unpaid Change in Control Payment and Retention Bonus, and Umpqua
shall have no further liability or other obligation of any kind
whatsoever to the Employee. The payment of Severance Pay
shall constitute liquidated damages in lieu of any and all claims
by the Employee against Umpqua, shall be in full and complete
satisfaction of any and all rights which the Employee may enjoy
hereunder, and shall constitute consideration for a full and
unconditional release of any and all liability of Umpqua or any of
its shareholders, benefit plans, affiliate companies, subsidiaries,
and the directors, officers, employees, trustees and agents of such
entities and their successors or assigns, arising out of this
Agreement or out of the employment relationship between the
Employee and Umpqua (in the form of Exhibit A, hereafter the
“Release”). Payment of the Severance Pay is
expressly conditioned upon receipt by Umpqua of the Release
executed by the Employee. For the avoidance of doubt, in the
event of termination of employment by Umpqua without Cause Employee
shall not be entitled to participate in any severance pay plan made
generally available to other employees of Umpqua as in effect from
time to time.
(c)
Disability
. Upon
termination of Employee’s employment hereunder pursuant to
Section 4.1(c) as a result of Employee’s Disability, Employee
shall be entitled to receive and be paid solely (i) the
Employee’s salary then in effect for a period of sixty (60)
days following termination of employment (reduced by the amount of
any state disability insurance benefits and workers compensation
benefits he receives during that period) payable at Umpqua’s
regular and customary intervals for the payment of salaries as in
effect from time to time, (ii) any accrued but unused vacation
pursuant to Section 3.4, (iii) any amounts due pursuant to Section
3.6, (iv) any Vested Benefits, (v) any COBRA rights and (vi) any
unpaid Change in Control Payment or Retention Bonus.
Following expiration of the sixty (60) day period, the
Employee shall be entitled to receive and be paid solely a salary
at a rate commensurate with the benefit Employee is eligible to
receive under any long
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