NORTH VALLEY BANCORP EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

 

                                                                  Exhibit 10(oo)

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                              NORTH VALLEY BANCORP

                    EXECUTIVE DEFERRED COMPENSATION AGREEMENT

 

       THIS AGREEMENT is made this 31st day of December, 2004, by and between

NORTH VALLEY BANCORP, a California corporation, located in Redding, California

(the "Company"), and LEO J. GRAHAM (the "Executive").

 

                                  INTRODUCTION

 

       To encourage the Executive to remain an employee of the Company, the

Company is willing to provide to the Executive a deferred compensation

opportunity. The Company will pay the Executive's benefits from the Company's

general assets.

 

                                    AGREEMENT

 

       The Executive and the Company agree as follows:

 

                                    Article 1

                                   Definitions

 

       Whenever used in this Agreement, the following words and phrases shall

have the meanings specified:

 

       1.1      "Anniversary Date" means December 31 of each year.

 

       1.2      "Change of Control" A "change in control" of Employer for

purposes of this Agreement shall mean the occurrence of any of the following

events with respect to Employer (with the term "Employer" being defined for such

a change in control to be North Valley Bancorp): (i) a change in control of a

nature that would be required to be reported in response to Item 6(e) of

Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of

1934, as amended (the "Exchange Act"), or in response to any other form or

report to the regulatory agencies or governmental authorities having

jurisdiction over Employer or any stock exchange on which Employer's shares are

listed which requires the reporting of a change in control; (ii) any merger,

consolidation or reorganization of Employer in which Employer does not survive;

(iii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition

(in one transaction or a series of transactions) of any assets of Employer

having an aggregate fair market value of fifty percent (50%) of the total value

of the assets of Employer, reflected in the most recent balance sheet of

Employer; (iv) a transaction whereby any "person" (as such term is used in the

Exchange Act or any individual, corporation, partnership, trust or any other

entity) is or becomes the beneficial owner, directly or indirectly, of

securities of Employer representing 50% or more of the combined voting power of

Employer's then outstanding securities; (v) if in any one year period,

individuals who at the beginning of such period constitute the Board of

Directors of Employer cease for any reason to constitute at least a majority

thereof, unless the election, or the nomination for election by Employer's

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shareholders, of each new director is approved by a vote of a least

three-quarters of the directors then still in office who were directors at the

beginning of the period; (iv) a majority of the members of the Board of

Directors of Employer in office prior to the happening of any event determines

in its sole discretion that as a result of such event there has been a change in

control. Notwithstanding the foregoing or anything else contained herein to the

contrary, there shall not be a "change in control" for purposes of this

Agreement if the event which would otherwise come within the meaning of the term

"change in control" involves an Employee Stock Ownership Plan or similar plan

sponsored by Employer which is the party that acquires "control" or is the

principal participant in the transaction constituting a "change in control," as

described above.

 

       1.3      "Code" means the Internal Revenue Code of 1986, as amended.

 

       1.4      "Compensation" means the total salary and bonus paid to the

Executive during a Plan Year.

 

       1.5      "Deferral Account" means the Company's accounting of the

Executive's accumulated Deferrals plus accrued interest.

 

       1.6      "Deferrals" means the amount of the Executive's Compensation,

which the Executive elects to defer according to this Agreement.

 

       1.7      "Disability" means, if the Executive is covered by a Company

sponsored disability policy, total disability as defined in such policy without

regard to any waiting period. If the Executive is not covered by such a policy,

Disability means the Executive suffering a sickness, accident or injury, which,

in the judgment of a physician satisfactory to the Company, prevents the

Executive from performing substantially all of the Executive's normal duties for

the Company. As a condition to any Disability benefits, the Company may require

the Executive to submit to such physical or mental evaluations and tests as the

Company's Board of Directors deems appropriate.

 

       1.8      "Effective Date" means December 31, 2004.

 

       1.9      "Election Form" means the Form attached as Exhibit 1.

 

       1.10     "Benefit Election Form" means the Form attached as Exhibit 2.

 

       1.11     "Normal Retirement Age" means the Executive's 65th birthday.

 

       1.12     "Normal Retirement Date" means the later of the Normal

Retirement Age or Termination of Employment.

 

       1.13     "Plan Year" means the calendar year.

 

       1.14     "Termination of Employment" means that the Executive ceases to

be employed by the Company for any reason whatsoever other than by reason of a

leave of absence, which is approved by the Company. For purposes of this

 

                                       2

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Agreement, if there is a dispute over the employment status of the Executive or

the date of the Executive's Termination of Employment, the Company shall have

the sole and absolute right to decide the dispute.

 

                                    Article 2

                                Deferral Election

 

       2.1      Initial Election. The Executive shall make an initial deferral

election under this Agreement by filing with the Company a signed Election Form

within thirty (30) days after the Effective Date of this Agreement. The Election

Form shall set forth the amount of Compensation to be deferred and shall be

effective to defer only Compensation earned after the date the Election Form is

received by the Company.

 

       2.2      Election Changes

 

                2.2.1  Generally. Upon the Company's approval, the Executive may

       modify the amount of Compensation to be deferred annually by filing a new

       Election Form with the Company prior to the beginning of the Plan Year in

       which the Compensation is to be deferred. The modified deferral election

       shall not be effective until the calendar year following the year in

       which the subsequent Election Form is received and approved by the

       Company.

 

                2.2.2  Hardship. If an unforeseeable financial emergency arising

       from the death of a family member, divorce, sickness, injury, catastrophe

       or similar event outside the control of the Executive occurs, the

       Executive, by written instructions to the Company, may reduce future

       deferrals under this Agreement.

 

 

                                    Article 3

                                Deferral Account

 

       3.1      Establishing and Crediting. The Company shall establish a

Deferral Account on its books for the Executive and shall credit to the Deferral

Account the following amounts:

 

                3.1.1  Deferrals. The Compensation deferred by the Executive as

       of the time the Compensation would have otherwise been paid to the

       Executive.

 

                3.1.2  Interest. On each Anniversary Date of this Agreement

       prior to any payment of pre-retirement or post-retirement benefits, and

       during the payment of any pre-retirement benefits or post-retirement

       benefits, interest is to be accrued on the account balance and compounded

       at an annual rate equal to the Wall Street Journal Prime Rate plus one

       and one half percent on the first business day of the Plan Year,

       compounded monthly.

 

       3.2      Statement of Accounts. The Company shall provide to the

Executive, within 120 days after each Anniversary Date, a statement setting

forth the Deferral Account balance.

 

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       3.3      Accounting Device Only. The Deferral Account is solely a device

for measuring amounts to be paid under this Agreement. The Deferral Account is

not a trust fund of any kind. The Executive is a general unsecured creditor of

the Company for the payment of benefits. The benefits represent the mere Company

promise to pay such benefits. The Executive's rights are not subject in any

manner to anticipation, alienation, sale, transfer, assignment, pledge,

encumbrance, attachment, or garnishment by the Executive's creditors.

 

                                    Article 4

                                Lifetime Benefits

 

       4.1      Normal Retirement Benefit. Upon the Normal Retirement Date, the

Company shall pay to the Executive the benefit described in this Section 4.1 in

lieu of any other benefit under this Agreement.

 

                4.1.1  Amount of Benefit. The benefit under this Section 4.1 is

       the Deferral Account balance at the Executive's Normal Retirement Date.

 

                4.1.2  Payment of Benefit. The Company shall pay the annual

       benefit to the Executive in 12 equal monthly installments payable on the

       first day of each month commencing with the month following the

       Executive's Normal Retirement Date. The annual benefit shall be paid to

       the Executive for 20 years, or as elected on the Election Form (Exhibit

       2). The Company shall credit interest pursuant to Section 3.1.2 on the

       remaining account balance during any applicable installment period.

 

       4.2      Early Retirement Benefit. Upon Termination of Employment prior

to the Normal Retirement Age for reasons other than death, Change of Control or

Disability, the Company shall pay to the Executive the benefit described in this

Section 4.2 in lieu of any other benefit under this Agreement.

 

                4.2.1  Amount of Benefit. The benefit under this Section 4.2 is

       the Deferral Account balance at the Executive's Termination of

       Employment.

 

                4.2.2  Payment of Benefit. The Company shall pay the annual

       benefit to the Executive in 12 equal monthly installments payable on the

       first day of each month commencing with the month following the

       Executive's Termination of Employment. The annual benefit shall be paid

       to the Executive for 20 years, or as elected on the Election Form

       (Exhibit 2). The Company shall credit interest pursuant to Section 3.1.2

       on the remaining account balance during any applicable installment

       period.

 

       4.3      Disabil