EXHIBIT 10.3
SECOND AMENDED EMPLOYMENT AGREEMENT
This Second Amended Employment Agreement (the "Agreement") is
entered
into as of February 20, 2004, by and
between Sutter Holding Company, Inc., a
Delaware corporation ("Employer"), and
William G. Knuff, III ("Employee").
Recitals
WHEREAS, Employee and Employer entered into that certain
employment
agreement dated August 1, 2002 (the
"Original Agreement") which set forth the
terms of the Employee's initial employment
until August 31, 2004.
WHEREAS, on February 12, 2003, Employee and Employer amended
the
Original Agreement to pay an annual base
salary of five hundred thousand dollars
($500,000), not to exceed the lesser of (i)
1.0% annually of Employer's reported
gross asset value, or (ii) 5.0% annually of
Employer's reported total
shareholders' equity.
NOW, THEREFORE, in consideration of the mutual covenants
contained
herein, the parties agree as follows:
1.
Engagement. Employer hereby engages Employee to perform
services
and duties for Employer in the capacities
of Co-Chairman, Co-Chief Executive
Officer, and Chief Financial Officer.
Employee accepts such engagement and
hereby agrees to perform the duties,
undertake the responsibilities and exercise
the authority customarily performed,
undertaken and exercised by persons
situated in a similar executive capacity.
Excluding discretionary periods of
vacation and sick leave to which the
Employee is entitled, the Employee agrees
to devote reasonable attention and time to
the business and affairs of Employer
to the extent necessary to discharge the
responsibilities assigned to the
Employee hereunder. Employer acknowledges
that Employee is engaged in several
business activities and ventures, and that
performance of Employee's duties
under this Agreement is not intended to be
a full-time commitment.
2. Term. The term of employment under this Agreement shall be for
the
period commencing on the date hereof, and
ending August 31, 2009; provided,
however, that the term of this Agreement
shall be automatically extended for one
(1) year on each anniversary of this
Agreement unless either Employer or
Employee shall have given written notice to
the other at least ninety (90) days
prior thereto that the term of this
Agreement shall not be so extended.
3. Compensation.
(A) Salary. In consideration of the services to be rendered by
Employee, Employer shall pay Employee an
annual base salary of five hundred
thousand dollars (US $500,000), not to
exceed the lesser of (i) 1.0% annually of
Employer's reported gross asset value, or
(ii) 5.0% annually of Employer's
reported total shareholder's equity,
payable monthly based upon the ending
balance sheet for the previous quarter. For
purposes of clarity, the annual
salary of $500,000 shall be hereinafter
referred to as "Base Salary", and the
actual annual salary paid after adjusting
for either (i) or (ii) above, as the
case may be, shall be hereinafter referred
to as "Effective Salary." Employer
may in its discretion from time to time
increase, but may not decrease,
Employee's Base Salary. Both Employer and
Employee note that it is possible for
the Employee's actual salary to decrease,
without any action on the part of the
Employer's Board of Directors, since it is
calculated based on Employer's
quarterly reported gross asset value and
shareholder's equity, which are subject
to periodic fluctuation. Without any
necessary action to be taken by the
Employer's Board of Directors, Base Salary
shall be adjusted annually based on
changes in the U.S. Consumer Price Index
("CPI") with a starting point of
January 1, 2003.
(B) Other Incentive Compensation. Employee will be eligible to
participate in any stock option or grant
plan established by the Employer, and
shall be granted stock options annually or
from time to time thereunder as
approved by the Employer's Board of
Directors.
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(C) Change of Control. For purposes of this Agreement, a
"Change
of Control", is defined as either (i)
Employee's loss of voting control of
Employer, which is defined as any point in
time when Employee's control of
voting stock, combined with the control of
voting stock of Employer's other
officers and directors currently employed,
is less than that of any other
entity's (i.e. institution, trust or
individual) voting control; or (ii)
Employee's loss of or material reduction in
compensation, or managerial scope
and control of Employer. In the event of a
Change of Control as defined in (i)
above, notwithstanding any vesting
provisions, all stock options granted to
Employee shall immediately vest, and
additional stock options (with an exercise
price equal to the prevailing market price
of the Employer's stock on the
effective date of the change of control,
and with an expiration date that is ten
years from the effective date of the change
of control) equal to 2% of the
Employer's then outstanding shares shall be
immediat
