UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
California 0-31525 68-0352144
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(State or other jurisdiction (Commission (IRS Employer
Of incorporation) File Number) Identification No.)
3100 Zinfandel Drive, Suite 450, Rancho Cordova, California 95670
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(Address of principal executive offices) (Zip Code)
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Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communication pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Solicitation material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Page 1 of 12 Pages
The Index to Exhibits is on Page 3
Item 1.01. Entry into a Material Definitive Agreement.
On October 23, 2005, the registrants Board of Director's approved the American River Bankshares 2005 Executive Annual Incentive Plan (the "Plan"). The Plan lays out the performance metrics and the incentive opportunities for the Executive Officers of the registrant for 2005. The foregoing description is qualified by reference to the Agreement attached as Exhibit 99.1.
The Board also approved an increase in the Board's meeting attendance fees and the monthly retainers for the registrants Board Members for 2005. The monthly attendance fee for Board Meetings will be $300.00; the monthly attendance fee for Board Committee Meetings will be $200.00. The monthly retainer fee for Board Members, excluding the Chairman, will be $600.00; the monthly retainer for the Chairman will be $1,000. In addition, committee chairs will receive an additional $200.00 per month retainer.
The Board also approved the annual salaries for the Executive Officers of the registrant for 2005 as follows: David Taber, Chief Executive Officer, $250,000; Mitchell Derenzo, Chief Financial Officer, $140,000; Douglas Tow, Chief Credit Officer, $140,000; Kevin Bender, Chief Information Officer, $105,000; Gregory Patton, President of American River Bank, $135,000; Raymond Byrne, President of North Coast Bank, a division of American River Bank, $125,000; and Larry Standing, President of Bank of Amador, a division of American River Bank $150,000.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
(99.1) American River Bankshares 2005 Executive Annual Incentive Plan Document.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AMERICAN RIVER BANKSHARES
/s/ MITCHELL A. DERENZO
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October 26, 2005 Mitchell A. Derenzo, Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit No. Description Page
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99.1 American River Bankshares 2005
Executive Annual Incentive Plan Document. 4-12
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EXHIBIT 99.1
American River Bankshares
2005 Executive Annual Incentive Plan Document
Establishment and Purpose of the Plan
The 2005 Executive Annual Incentive Plan for American River Bankshares (AMRB) is established as of January 1, 2005. The Plan is designed to promote exemplary performance and enhance shareholder value by focusing eligible employees on key AMRB metrics and providing rewards for excellent performance as measured by those metrics.
Eligibility
The following positions are eligible for this Plan:
o Chief Executive Officer, American River Bankshares
o Chief Financial Officer, American River Bankshares
o Chief Credit Officer, American River Bankshares
o Chief Information Officer, American River Bankshares
o Regional Bank President
Other positions may be added at the discretion of the AMRB Board of Directors (the Board). Employees in these positions who have been employed in excess of three (3) months by the end of the fiscal year are eligible. Employees with over three months but less than one year of service at the end of the fiscal year will receive a pro-ration of any earned incentive.
To be eligible for incentive payout, participants must:
a) be employed on the last day of the fiscal year and on the date
of the incentive payout, or
b) have ceased employment from AMRB for one of the reasons cited
in the section titled "Changes in Employment Status".
Performance Period
The period of the Plan is AMRB's fiscal year, January 1 to December 31.
Performance Metrics
The Compensation Committee of the AMRB Board of Directors (the Committee), or their delegated authority, will recommend the AMRB performance metrics and assign a weight to each metric. The Chief Executive Officer of AMRB will recommend the Regional Bank (Bank) performance measures and weights. The Board will approve all metrics.
The annual schedule of performance metrics and weights are found in Attachment
A. Each metric will be assessed for incentive independently, as long as the
funding threshold is achieved (see "Funding Threshold").
American River Bankshares
2005 Executive Annual Incentive Plan Document
The four AMRB officers' incentives will be based on the combined performance of the organization as a whole. The Regional Presidents' incentives will be based 80% on their own Bank performance and 20% on AMRB performance.
Funding Threshold
A minimum level of AMRB performance must be achieved before any incentives will be paid for AMRB metrics. The Committee will recommend, and the Board will approve, the threshold performance level(s) each year.
A minimum level of Bank performance must be achieved before any incentives will be paid to the Regional Bank Presidents for Bank performance. The Chief Executive Officer of AMRB will recommend, and the Board will approve, the threshold performance level(s) each year.
The annual metrics for minimum performance are found in Attachment B.
Incentive Opportunities
Each position has a Target Incentive established as a percent of base salary:
The incentive amount will be adjusted by a "multiplier", depending on the level of performance for each metric. No incentive will be paid on any metric that falls below 85% of Target. Incentives will be "capped" at 110.0% of Target.
American River Bankshares
2005 Executive Annual Incentive Plan Document
The following is the established schedule for each metric:
If performance on a metric falls below 85%, no incentive will be paid for that metric. The performance of any metric will not affect the payout for the other metrics, except in the case of the Funding Threshold as described previously.
Note: This schedule represents a step calculation. To determine the correct multiplier, actual performance as a percent of target will be rounded to the nearest whole number. For example, actual performance of 89.5 to 94.49 will correspond to a multiplier of 80%.
Incentive Calculation
Incentives are calculated as a percentage of base salary. Base salary for purposes of this Plan excludes other types of pay including commissions, bonuses, incentives, expenses, and any other "extraordinary" pay. For participants who have been employed less than a full year, or have terminated for any reason outlined in the section titled "Change in Employment Status", incentive will be calculated on base salary actually earned during the year.
An example calculation is found in Attachment C.
Payment of Incentive
Incentives will be paid no later than 75 days following the end of the fiscal year.
To the extent required by law at the time the incentive is paid, all applicable federal, state and local taxes will be withheld. Any payroll deductions required by benefit plan document(s) will also be withheld.
American River Bankshares
2005 Executive Annual Incentive Plan Document
Change in Employment Status
If a participant's employment terminates during the Plan year because of death, disability, retirement, or change of control, the participant will be entitled to a pro-rata portion of the incentive. If termination occurs for any other reason, no incentive will be payable for the Plan year.
For purposes of this Plan, a participant may be eligible for retirement status if he or she has attained age 65 and has worked for AMRB or the Bank at least 5 years.
Plan Administration
The Committee will administer the Annual Incentive Plan, and have the authority to:
o Interpret Plan provisions.
o Amend or terminate the Plan.
o Establish the funding threshold, if any, and the performance
metrics.
o Ensure performance metrics are met before incentives are paid.
Amendment, Modification and Termination of the Plan
The Board may amend, modify, or terminate the Plan at any time. Any changes will be communicated to the participants as soon as practical.
Plan Does Not Create Employee Rights
Nothing in this Plan shall alter or amend AMRB's or the Bank's employment at-will policy.
American River Bankshares
2005 Executive Annual Incentive Plan Document
Attachment A Performance Metrics
The incentive for each metric will be paid independently of the other metrics, according to the performance achieved.
2005 AMRB Performance Metrics: Targets and Weights
2005 American River Bank Performance Metrics: Targets and Weights
* This metric will not have a multiplier. If the target is met, the individual will receive 5% of the target incentive. If the target is not met, the individual will receive no incentive for this metric.
Note: The Performance Metrics indicated in this Incentive Plan Document are merely goals set for the Executive Management Team of AMRB and are not projected results. These goals may materially differ from actual results. In addition the targets for Return on Average Assets, Return on Tangible Equity and Earnings Per Share are calculated on a pre-incentive, after tax basis.
American River Bankshares
2005 Executive Annual Incentive Plan Document
Attachment A Performance Metrics (continued)
2005 North Coast Bank Performance Metrics: Targets and Weights
2005 Bank of Amador Performance Metrics: Targets and Weights
* This metric will not have a multiplier. If the target is met, the individual will receive 5% of the target incentive. If the target is not met, the individual will receive no incentive for this metric.
Note: The Performance Metrics indicated in this Incentive Plan Document are merely goals set for the Executive Management Team of AMRB and are not projected results. These goals may materially differ from actual results. In addition the targets for Return on Average Assets, Return on Tangible Equity and Earnings Per Share are calculated on a pre-incentive, after tax basis.
American River Bankshares
2005 Executive Annual Incentive Plan Document
Attachment B Funding Threshold
If any of the following metrics fall below 70% of Target, NO INCENTIVE will be paid for any AMRB metric.
2005 AMRB Minimum Performance Standards
If ROAE for the Bank follows below 70% of Target, NO INCENTIVE will be paid for any of that Bank's metrics.
2005 American River Bank Minimum Performance Standards
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Metric 70% 0f Target
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ROAE | 12.24%
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2005 North Coast Bank Minimum Performance Standards
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Metric 70% 0f Target
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ROAE | 14.58%
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2005 Bank of Amador Minimum Performance Standards
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Metric 70% 0f Target
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ROAE | 7.78%
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American River Bankshares
2005 Executive Annual Incentive Plan Document
Attachment C
Incentive Calculation Example
Incentive Targets
Position: Chief Financial Officer
Base Salary: $140,000
Target Incentive @ 35% $49,000
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Target Target
Incentive Incentive
Metric Weight as % of Base $$
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American River Bankshares
2005 Executive Annual Incentive Plan Document
Attachment C
Incentive Calculation Example (Continued)
Year-End Example
Position: Chief Financial Officer
Base Salary: $140,000
Target Incentive @ 35% $49,000
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Actual
Incentive % Incentive % Actual
Metric Target Actual % of Target at Target Multiplier of Base Incentive
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ROAA | 1.58% | 1.58% | 100.00% | 8.05% | 100.00% | 8.05% | $11,270
--------------------- | ------------- | ------------- | ------------- | ------------ | ------------- | ------------- | ----------
ROTE | 21.58% | 17.00% | 78.78% | 8.05% | 0.00% | 0.00% | $0
--------------------- | ------------- | ------------- | ------------- | ------------ | ------------- | ------------- | ----------
EPS | $1.76 | $1.84 | 104.55% | 8.05% | 102.50% | 8.25% | $11,552
--------------------- | ------------- | ------------- | ------------- | ------------ | ------------- | ------------- | ----------
Core Deposits | 13.86% | 17.00% | 122.66% | 2.80% | 110.00% | 3.08% | $4,214
--------------------- | ------------- | ------------- | ------------- | ------------ | ------------- | ------------- | ----------
Net Loan Growth | 15.81% | 15.00% | 94.88% | 2.80% | 90.00% | 2.52% | $3,528
--------------------- | ------------- | ------------- | ------------- | ------------ | ------------- | ------------- | ----------
Classified Loans | <25.0% | 10.00% | 100.00% | 1.75% | 100.00% | 1.75% | $2,450
--------------------- | ------------- | ------------- | ------------- | ------------ | ------------- | ------------- | ----------
Leadership/Teamwork | 100.00% | 105.00% | 105.00% | 3.50% | 102.50% | 3.59% | $5,023
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Base Salary $ 140,000
Total Incentive 27.17% $ 38,037
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Total Cash Compensation $ 178,037
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