PLUMAS BANK EXECUTIVE SALARY CONTINUATION AGREEMENT
Exhibit 10.1
PLUMAS BANK
EXECUTIVE SALARY CONTINUATION AGREEMENT
EXECUTIVE SALARY CONTINUATION AGREEMENT
This Amended and Restated Executive Salary Continuation Agreement (Agreement) is entered into this
17th day of December, 2008, by and between Plumas Bank, a corporation organized under the laws of
the State of California (the “Employer”), and Xxxxxx X. Xxxxxx, an individual residing in the State
of California (hereinafter referred to as the “Executive”).
RECITALS
WHEREAS, the Executive is in the employ of the Employer, and has faithfully served the Employer for
many years. It is the consensus of the Board of Directors (Board) and its compensation committee
that the Executive’s services have been of exceptional merit and an invaluable contribution to the
profits and position of the Employer in its field of activity; and
WHEREAS, the Employer and the Executive are parties to that certain Executive Salary Continuation
Agreement, dated August 23, 2005, which provides for the payment of certain benefits; and
WHEREAS, it is deemed to be in the best interests of the Employer to provide the Executive with
certain salary continuation benefits, on the terms and conditions set forth herein, in order to
reasonably induce the Executive to remain in the Employer’s employment; and
WHEREAS, section 885 of the American Jobs Creation Act of 2004 amended the Internal Revenue Code
(Code) to add section 409A implementing detailed rules regarding deferred compensation; and
WHEREAS, Notice 2005-1 was subsequently issued by the Treasury Department providing additional
guidance on transitioning a plan of deferred compensation, such as this Agreement, into compliance
with Code section 409A. Notice 2005-1 announced that a deferred compensation plan subject to Code
section 409A must be operated in good faith compliance with the provisions of Code
section 409A and Notice 2005-1 during the 2005 calendar year. Supplemental guidance from the IRS
has extended the good faith compliance period through December 31, 2008. Final Treasury
Regulations were issued on April 10, 2007 and are effective January 1, 2009; and
WHEREAS, the Treasury Department issued Notice 2007-86 extending transitional guidance regarding
Code section 409A whereby a plan may be amended by December 31, 2008 to provide new payment
elections with respect to the time and form of payment of deferred compensation subject to
section 409A and that such amendment will not be treated as a change in the time or form of payment
under Code section 409A(a)(4) or an acceleration of a
payment under section 409A(a)(3), provided the plan is so amended on or before December 31, 2008
and the amendment may only apply to amounts that would not otherwise be payable in 2008 nor cause
an amount to be paid in 2008 that would not otherwise be payable in 2008.
ACCORDINGLY, it is the desire of the Employer and the Executive to enter into this amended and
restated Agreement in good faith compliance with the requirements of Code section 409A and the
final Treasury regulations.
NOW, THEREFORE, in consideration of the services to be performed in the future, as well as the
mutual promises and covenants contained herein, the Executive and the Employer agree as follows:
AGREEMENT
ARTICLE I. TERMS AND DEFINITIONS
| 1.01 | Administrator. The Employer shall be the “Administrator” and, solely for the
purposes of ERISA, the “fiduciary” of this Agreement where a fiduciary is required by ERISA. |
| 1.02 | Annual Benefit. The term “Annual Benefit” shall mean an annual sum of sixty-two
thousand dollars ($62,000) multiplied by the Applicable Percentage (defined below) and then
reduced to the extent required: (i) under the other provisions of this Agreement; (ii) by
reason of the lawful order of any regulatory agency or body having jurisdiction over the
Employer; and (iii) in order for the Employer to properly comply with any and all applicable
state and federal laws, including, but not limited to, income, employment and disability
income tax laws (e.g., FICA, FUTA, SDI). |
| 1.03 | Applicable Percentage. The term “Applicable Percentage” shall mean that percentage
listed on Schedule “A” attached hereto which is adjacent to the number of complete years (with
a “year” being the performance of personal services for or on behalf of the Employer as an
employee for a period of three hundred sixty-five (365) days) which have elapsed starting from
the Effective Date of this Agreement and ending on the date payments are to first begin under
the terms of this Agreement. In the event that Executive’s employment with Employer is
terminated other than by reason of disability, Normal Retirement, Retirement or voluntary
termination on the part of Executive, Executive shall be deemed for purposes of determining
the number of complete years to have completed a year of service in its entirety for any
partial year of service after the last anniversary date of the Effective Date during which the
Executive’s employment is terminated. |
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| 1.04 | Code. “Code” shall mean the Internal Revenue Code of 1986, as amended. |
| 1.05 | Disability/Disabled. The term “Disability” or “Disabled” shall mean the Executive:
(i) is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by
reason of any medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a period of not less than three (3)
months under an accident and health plan covering employees or directors of the Employer.
Medical determination of Disability may be made by either the Social Security Administration
or by the provider of an accident or health plan covering employees or directors of the
Employer provided that the definition of “disability” applied under such disability insurance
program complies with the requirements of the preceding sentence. Upon the request of the
plan administrator, the Executive must submit proof to the plan administrator of the Social
Security Administration’s or the provider’s determination. |
| 1.06 | Early Retirement Date. The term “Early Retirement Date” shall mean the Retirement
(as defined below) of the Executive on a date which occurs after the date Executive reaches
age sixty (60) and prior to the date Executive reaches age sixty-five (65). |
| 1.07 | Effective Date. The term “Effective Date” shall mean the date upon which this
Agreement was entered into by the parties, as first written above. |
| 1.08 | ERISA. The term “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended. |
1.09 Plan Year. The term “Plan Year” shall mean the Employer’s calendar year.
| 1.10 | Retirement/Retires. The term “Retirement” or “Retires” shall mean the date
acknowledged in Executive’s written notice to the Employer of the Executive’s Termination of
Employment. |
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| 1.11 | Specified Employee. The term “Specified Employee” shall mean an employee who at the
time of Termination of Employment is a key employee of the Employer, if any stock of the
Employer is publicly traded on an established securities market or otherwise. For purposes of
this Agreement, an employee is a key employee if the employee meets the requirements of Code
section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder
and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on
December 31 (the “identification period”). If the employee is a key employee during an
identification period, the employee is treated as a key employee for purposes of this
Agreement during the twelve (12) month period that begins on the first day of April following
the close of the identification period. |
| 1.12 | Termination of Employment. “Termination of Employment” shall mean termination of the
Executive’s employment with the Employer for reasons other than death or Disability. Whether
a Termination of Employment has occurred is determined based on whether the facts and
circumstances indicate that the Employer and the Executive reasonably anticipated that no
further services would be performed after a certain date or that the level of bona fide
services the Executive would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than twenty percent (20%) of the
average level of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding thirty-six (36) month period (or the full period of
services to the Employer if the Executive has been providing services to the Employer less
than thirty-six (36) months). |
| 1.13 | Unforeseeable Emergency. The term “Unforeseeable Emergency” shall mean a severe
financial hardship to the Executive resulting from an illness or accident of the Executive,
the Executive’s spouse, the Beneficiary, or the Executive’s dependent (as defined in section
152(a) of the Code), loss of the Executive’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events beyond the control
of the Executive. |
ARTICLE II. SCOPE, PURPOSE AND EFFECT
| 2.01 | Contract of Employment. Although this Agreement is intended to provide the Executive
with an additional incentive to remain in the employ of the Employer, this Agreement shall not
be deemed to constitute a contract of employment between the Executive and the Employer nor
shall any provision of this Agreement restrict or expand the right of the Employer to
terminate the Executive’s employment. This Agreement shall
have no impact or effect upon any separate written Employment Agreement which the Executive
may have with the Employer, it being the parties’ intention and agreement that unless this
Agreement is specifically referenced in said Employment Agreement (or any modification
thereto), this Agreement (and the Employer’s obligations hereunder) shall stand separate
and apart and shall have no effect upon, nor be affected by, the terms and provisions of
said Employment Agreement. |
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| 2.02 | Fringe Benefit. The benefits provided by this Agreement are granted by the Employer
as a fringe benefit to the Executive and are not a part of any salary reduction plan or any
arrangement deferring a bonus or a salary increase. The Executive has no option to take any
current payments or bonus in lieu of the benefits provided by this Agreement. |
ARTICLE III. PAYMENTS UPON OR AFTER RETIREMENT
| 3.01 | Payments Upon Retirement. If the Executive shall remain in the continuous employment
of the Employer until attaining sixty-five (65) years of age, the Executive shall be entitled
to be paid, as his normal retirement benefit, the Annual Benefit, as defined above, for a
period of fifteen (15) years, in one hundred eighty (180) equal monthly installments, with
each installment to be paid on the first day of each month, beginning with the month following
the month in which the Executive Retires. |
| 3.02 | Payments in the Event of Death After Retirement. In the event of Executive’s death
following Retirement, no death benefit shall be provided under this Agreement. |
ARTICLE IV. PAYMENTS IN THE EVENT OF DEATH OR DISABILITY
OCCURS PRIOR TO RETIREMENT
OCCURS PRIOR TO RETIREMENT
| 4.01 | Payments in the Event of Death Prior to Retirement. In the event of Executive’s
death prior to Retirement, no death benefit shall be provided under this Agreement. |
| 4.02 | Payments in the Event of Disability Prior to Retirement. In the event the Executive
becomes Disabled while actively employed by the Employer at any time after the date of this
Agreement but prior to Retirement, the Executive shall: (i) continue to be treated during
such period of Disability as being gainfully employed by the Employer, but shall not add
applicable years of service for the purpose of determining the Annual Benefit; and (ii) be
entitled to be paid the Annual Benefit for fifteen (15) years, as determined by the applicable
years of service at the time of Disability in one hundred eighty (180) equal monthly
installments, with each installment to be paid on the first day of each month, beginning with
the month following the earlier of (1) the month in which the Executive attains sixty-five (65)
years of age; or (2) the date upon which the Executive is no longer entitled to receive
disability benefits under the Executive’s principal disability insurance policy. Upon
Executive’s death, no further payments will be made under this Article 4.02. |
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ARTICLE V. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED
OTHER THAN BY DISABILITY, RETIREMENT OR A CHANGE IN CONTROL
OF THE EMPLOYER
OTHER THAN BY DISABILITY, RETIREMENT OR A CHANGE IN CONTROL
OF THE EMPLOYER
| 5.01 | Payments in the Event Employment is Terminated Other than by Death, Disability,
Retirement or a Change of Control of the Employer. As indicated in Article 2 above, the
Employer reserves the right to terminate the Executive’s employment, with or without cause,
but subject to any written employment agreement which may then exist, at any time prior to the
Executive’s Retirement. In the event that the employment of the Executive shall be terminated
for any reason, including voluntary Termination of Employment by the Executive, but other than
by reason of Disability, Retirement, or a Change of Control of the Employer as set forth in
Article 5.02, the Executive or his legal representative shall be entitled to be paid the
Annual Benefit for a period of fifteen (15) years, as determined by the applicable years of
service at the time of the Executive’s Termination of Employment with the Employer, in one
hundred eighty (180) equal monthly installments, with each installment to be paid on the first
day of each month, beginning with the month following the month in which the Executive attains
sixty-five (65) years of age. |
| 5.02 | Termination of Employment in the Event of a Change of Control. A “Terminating Event”
shall be defined as a change in the ownership or effective control of the Employer, or in the
ownership of a substantial portion of the assets of the Employer, as such change is defined in
section 409A of the Code and regulations thereunder. |
In the event the Executive’s employment terminates with the Employer or Employer’s
successor within twenty-four (24) months of a Terminating Event and the Executive gives
written notice to the Employer or the Employer’s successor within thirty (30) calendar days
of such Termination of Employment that the termination is for the reason that a Terminating
Event has occurred, the Executive or his legal representative shall be entitled to be paid
the Annual Benefit with the Applicable Percentage equal to one hundred percent (100%), for
a period of fifteen (15) years, in one hundred eighty (180) equal monthly installments,
with each installment to be paid on the first day of each month, beginning with the month
following the month in which the Executive terminates employment.
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The Executive and Employer acknowledge that limitations on deductibility of the Annual
Benefit for federal income tax purposes may be imposed under, but not limited to section
280G of the Code, and any successor to section 280G of the Code. The increase in the
Applicable Percentage pursuant to the application of this Article 5.02 shall be limited to
such increase in the Applicable Percentage (which increase shall not result in the
Applicable Percentage being greater than one hundred percent (100%)) that results in the
greatest amount of the Annual Benefit that is deductible by the Employer for federal income
tax purposes after taking into account all other compensation payments to or for the
benefit of the Executive that are included in determining the deductibility of such
payments under section 280G of the Code or any successor to section 280G of the Code. In
the event that prior to the application of this Article 5.02, all other compensation
payments to or for the benefit of Executive results in the limitation of the deductibility
by Employer of such payments under section 280G or any successor to section 280G of the
Code, then this Article 5.02 shall not be applicable.
ARTICLE VI. PAYMENTS IN THE EVENT THE EXECUTIVE
ELECTS EARLY RETIREMENT
ELECTS EARLY RETIREMENT
The Executive shall have the right to elect to receive the Annual Benefit prior to attaining
sixty-five (65) years of age if he chooses to Retire on a date which constitutes an Early
Retirement Date as defined in Article 1.08 above. In the event the Executive elects to Retire on a
date which constitutes an Early Retirement Date, the Executive shall be entitled to be paid the
Annual Benefit for a period of fifteen (15) years determined by the applicable years of service at
the time of early retirement, as defined above, in one hundred eighty (180) equal monthly
installments, with each installment to be paid on the first day of each month, beginning with the
month following the month in which Early Retirement Date occurs.
ARTICLE VII.
| 7.01 | Hardship Distribution. The Employer may make a hardship distribution under the
circumstances described in Article 7.02 below. Any such distribution shall require the
adjustment described in Article 7.03 to any amounts to be paid under Articles 3, 4, 5 or 6. |
| 7.02 | Application for and Amount of Hardship Distribution. If an Unforeseeable Emergency
occurs, the Executive may petition the Board to receive a distribution from the Agreement (a
“Hardship Distribution”). The Board, in its sole discretion, may grant such petition. If
granted, the Executive shall receive, within sixty (60) days, a Hardship Distribution from the
Agreement only to the extent deemed necessary by the Board to
remedy the Unforeseeable Emergency, plus an amount necessary to pay taxes reasonably
anticipated as a result of the distribution. In any event, the maximum amount which may be
paid out pursuant to this Article is the vested Annual Benefit as of the day that the
Executive petitioned the Board to receive a Hardship Distribution under this Article. |
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| 7.03 | Benefit Adjustment. At the time of any Hardship Distribution, the vested Annual
Benefit shall be reduced by the amount of the Hardship Distribution and the benefits to be
paid under Articles 3, 4, 5 or 6 hereof shall reflect such reduced amount. |
ARTICLE VIII.
Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a
Specified Employee, the provisions of this Article shall govern any distributions hereunder, which
would otherwise be made to the Executive due to a Termination of Employment. Such distributions
shall not be made during the first six (6) months following Termination of Employment unless the
Executive dies prior to the end of such six (6) month period. Rather, any distribution which would
otherwise be paid to the Executive during such period shall be accumulated and paid to the
Executive in a lump sum on the first day of the seventh (7th) month following the
Termination of Employment. All subsequent distributions shall be paid in the manner otherwise
specified herein.
ARTICLE IX.
If, pursuant to Code section 409A, the Federal Insurance Contributions Act or other State, local or
foreign tax, the Executive becomes subject to tax on the amounts deferred hereunder, then the
Employer may make a limited distribution to the Executive in accordance with the provisions of
Treasury Regulations section 1.409A-3(j)(vi), (vii) and (xi). Any such distribution will decrease
the Executive’s benefit hereunder.
ARTICLE X.
Except as provided in Article 15.13, all changes in the form or timing of distributions hereunder
must be made by written amendment to this Agreement and must comply with the following
requirements. The changes:
| (a) | may not accelerate the time or schedule of any distribution, except as
provided in Code section 409A and the regulations thereunder; |
| (b) | must, for benefits distributable under Articles 3 and 6, be made at least
twelve (12) months prior to the first scheduled distribution; |
| (c) | must, for benefits distributable under Articles 3, 5 and 6, delay the
commencement of distributions for a minimum of five (5) years from
the date the first distribution was originally scheduled to be made; and |
| (d) | must take effect not less than twelve (12) months after the election is made. |
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ARTICLE XI. RIGHT TO DETERMINE FUNDING METHODS
The Employer reserves the right to determine, in its sole and absolute discretion, whether, to what
extent and by what method, if any, to provide for the payment of the amounts which may be payable
to the Executive or the Executive’s beneficiaries under the terms of this Agreement. In the event
that the Employer elects to fund this Agreement, in whole or in part, through the use of life
insurance or annuities, or both, the Employer shall determine the ownership and beneficial
interests of any such policy of life insurance or annuity. The Employer further reserves the
right, in its sole and absolute discretion, to terminate any such policy, and any other device used
to fund its obligations under this Agreement, at any time, in whole or in part. Consistent with
Article 13 below, neither the Executive, the Executive’s spouse nor the Executive’s beneficiaries
shall have any right, title or interest in or to any funding source or amount utilized by the
Employer pursuant to this Agreement, and any such funding source or amount shall not constitute
security for the performance of the Employer’s obligations pursuant to this Agreement. In
connection with the foregoing, the Executive agrees to execute such documents and undergo such
medical examinations or tests which the Employer may request and which may be reasonably necessary
to facilitate any funding for this Agreement including, without limitation, the Employer’s
acquisition of any policy of insurance or annuity. Furthermore, a refusal by the Executive to
consent to, participate in and undergo any such medical examinations or tests shall result in the
immediate termination of this Agreement and the immediate forfeiture by the Executive and the
Executive’s beneficiaries of any and all rights to payment hereunder.
ARTICLE XII. CLAIMS PROCEDURE
The Employer shall, but only to the extent necessary to comply with ERISA, be designated as the
named fiduciary under this Agreement and shall have authority to control and manage the operation
and administration of this Agreement. Consistent therewith, the Employer shall make all
determinations as to the rights to benefits under this Agreement. Any decision by the Employer
denying a claim by the Executive or the Executive’s beneficiary for benefits under this Agreement
shall be stated in writing and delivered or mailed, via registered or certified mail, to the
Executive, the Executive’s spouse or the Executive’s beneficiary, as the case may be. Such
decision shall set forth the specific reasons for the denial of a claim. In addition, the Employer
shall provide the Executive or the Executive’s beneficiary with a reasonable opportunity for a full
and fair review of the decision denying such claim.
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ARTICLE XIII. STATUS OF AN UNSECURED GENERAL CREDITOR
Notwithstanding anything contained herein to the contrary: (i) neither the Executive, the
Executive’s spouse or the Executive’s beneficiary shall have any legal or equitable rights,
interests or claims in or to any specific property or assets of the Employer; (ii) none of the
Employer’s assets shall be held in or under any trust for the benefit of the Executive or the
Executive’s beneficiary or held in any way as security for the fulfillment of the obligations of
the Employer under this Agreement; (iii) all of the Employer’s assets shall be and remain the
general unpledged and unrestricted assets of the Employer; (iv) the Employer’s obligation under
this Agreement shall be that of an unfunded and unsecured promise by the Employer to pay money in
the future; and (v) the Executive and the Executive’s beneficiary shall be unsecured general
creditors with respect to any benefits which may be payable under the terms of this Agreement.
ARTICLE XIV. COVENANT NOT TO INTERFERE
The Executive agrees not to take any action which prevents the Employer from collecting the
proceeds of any life insurance policy which the Employer may happen to own at the time of the
Executive’s death and of which the Employer is the designated beneficiary.
ARTICLE XV. MISCELLANEOUS
| 15.01 | Opportunity to Consult with Independent Counsel. The Executive acknowledges that he
has been afforded the opportunity to consult with independent counsel of his choosing
regarding both the benefits granted to him under the terms of this Agreement and the terms and
conditions which may affect the Executive’s right to these benefits. The Executive further
acknowledges that he has read, understands and consents to all of the terms and conditions of
this Agreement, and that he enters into this Agreement with a full understanding of its terms
and conditions. |
| 15.02 | Arbitration of Disputes. 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”),
presently located at 000 Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx. In the event JAMS
is unable or unwilling to conduct the arbitration provided for under the terms of this
paragraph, 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”), presently located at 000 Xxxxxxxxxx Xxxxxx, |
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Xxx Xxxxxxxxx,
Xxxxxxxxxx, shall conduct the binding arbitration referred to in this
paragraph. 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. The arbitration shall be subject to such rules of procedure used or
established by JAMS, or if there are none, the rules of procedure used or established by
AAA. 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 Northern California, unless otherwise agreed to by the parties.
| 15.03 | Attorneys’ Fees. In the event of any arbitration or litigation concerning any
controversy, claim or dispute between the parties hereto, arising out of or relating to this
Agreement or the breach hereof, or the interpretation hereof, the prevailing party shall be
entitled to recover from the losing party reasonable expenses, attorneys’ fees and costs
incurred in connection therewith or in the enforcement or collection of any judgment or award
rendered therein. The “prevailing party” means the party determined by the arbitrator(s) or
court, as the case may be, to have most nearly prevailed, even if such party did not prevail
in all matters, not necessarily the one in whose favor a judgment is rendered. |
| 15.04 | Notice. Any notice required or permitted of either the Executive or the Employer
under this Agreement shall be deemed to have been duly given, if by personal delivery, upon
the date received by the party or its authorized representative; if by facsimile, upon
transmission to a telephone number previously provided by the party to whom the facsimile is
transmitted as reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day after mailing
via U.S. first class mail, registered or certified, postage prepaid and return receipt
requested, and addressed to the party at the address given below for the receipt of notices,
or such changed address as may be requested in writing by a party. |
If to the Employer:
|
Plumas Bank | |
| 00 X. Xxxxxx Xxx. | ||
| Xxxxxx, XX 00000 | ||
| Attn: Xx. Xxxxxx X. Xxxx | ||
If to the Executive:
|
Xxxxxx X. Xxxxxx | |
| 0000 Xxxxxxxx Xxxx | ||
| Xxxxxx XX 00000 |
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| 15.05 | Assignment. Neither the Executive nor any other beneficiary under this Agreement
shall have any power or right to transfer, assign, hypothecate, modify or otherwise encumber
any part or all of the amounts payable hereunder, nor, prior to payment in accordance with the
terms of this Agreement, shall any portion of such amounts be: (i) subject to seizure by any
creditor of any such beneficiary, by a proceeding at law or in equity, for the payment of any
debts, judgments, alimony or separate maintenance obligations which may be owed by the
Executive, the Executive’s spouse, or any designated beneficiary; or (ii) transferable by
operation of law in the event of bankruptcy, insolvency or otherwise. Any such attempted
assignment or transfer shall be void and shall terminate this Agreement, and the Employer
shall thereupon have no further liability hereunder. |
| 15.06 | Binding Effect/Merger or Reorganization. This Agreement shall be binding upon and
inure to the benefit of the Executive and the Employer and, as applicable, their respective
heirs, beneficiaries, legal representatives, agents, successors and assigns. Accordingly, the
Employer shall not merge or consolidate into or with another corporation, or reorganize or
sell substantially all of its assets to another corporation, firm or person, unless and until
such succeeding or continuing corporation, firm or person agrees to assume and discharge the
obligations of the Employer under this Agreement. Upon the occurrence of such event, the term
“Employer” as used in this Agreement shall be deemed to refer to such surviving or successor
firm, person, entity or corporation. |
| 15.07 | Nonwaiver. The failure of either party to enforce at any time or for any period of
time anyone or more of the terms or conditions of this Agreement shall not be a waiver of such
term(s) or condition(s) or of that party’s right thereafter to enforce each and every term and
condition of this Agreement. |
| 15.08 | Partial Invalidity. If any term, provision, covenant or condition of this Agreement
is determined by an arbitrator or a court, as the case may be, to be invalid, void, or
unenforceable, such determination shall not render any other term, provision, covenant or
condition invalid, void or
unenforceable, and the Agreement shall remain in full force and effect notwithstanding such
partial invalidity. |
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| 15.09 | Entire Agreement. This Agreement supersedes any and all other agreements, either
oral or in writing, between the parties with respect to the subject matter of this Agreement
and contains all of the covenants and agreements between the parties with respect thereto.
Each party to this Agreement acknowledges that no other representations, inducements, promises
or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not set forth herein, and that no other agreement, statement or promise
not contained in this Agreement shall be valid or binding on either party. |
| 15.10 | Amendments. Except as otherwise provided in this Article or Articles 15.14 and
15.15, below, this Agreement may be amended only by a written agreement signed by the Employer
and the Executive. However, the Employer may unilaterally amend this Agreement to conform
with written directives to the Employer from its auditors or banking regulators or to comply
with legislative changes or tax law, including without limitation section 409A of the Code and
any and all Treasury regulations and guidance promulgated thereunder. |
| 15.11 | Paragraph Headings. The paragraph headings used in this Agreement are included
solely for the convenience of the parties and shall not affect or be used in connection with
the interpretation of this Agreement. |
| 15.12 | No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no rule of
strict construction will be applied against any person. |
| 15.13 | Governing Law. The laws of the State of California, other than those laws
denominated choice of law rules, and, where applicable, the rules and regulations of: (i) the
California Department of Financial Institutions; (ii) the Board of Governors of Federal
Reserve System; (iii) the Federal Deposit Insurance Corporation; or (iv) any other regulatory
agency or governmental authority having jurisdiction over the Employer, shall govern the
validity, interpretation, construction and effect of this Agreement. |
| 15.14 | Plan Termination Generally. Except as otherwise provided in Article 15.15, this
Agreement may be terminated only by a written agreement signed by the Employer and the
Executive. The benefit hereunder shall be the vested Annual Benefit as of the date the
Agreement is terminated. Except as provided in Article 15.15, the termination of this
Agreement shall not cause a distribution of benefits under this Agreement. Rather,
after such termination benefit distributions will be made at the earliest distribution
event permitted under Articles 3, 4, 5 or 6. |
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| 15.15 | Plan Terminations Under Section 409A. Notwithstanding anything to the contrary
herein, this Agreement may be terminated by the Employer or its successor, and distributions
hereunder accelerated as provided below in the following circumstances: |
| (a) | Within thirty (30) days before or twelve (12) months after a change in the
ownership or effective control of the Employer, or in the ownership of a substantial
portion of the assets of the Employer as described in section 409A(2)(A)(v) of the
Code, provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that all the
Employer’s arrangements which are substantially similar to the Agreement are
terminated so the Executive and all participants in the similar arrangements are
required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of the such terminations; |
| (b) | Upon the Employer’s dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Agreement are included in the Executive’s
gross income in the latest of: (i) the calendar year in which the Agreement
terminates; (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
distribution is administratively practical; or |
| (c) | Upon the Employer’s termination of this and all other arrangements that would
be aggregated with this Agreement pursuant to Treasury Regulations section 1.409A-1(c)
if the Executive participated in such arrangements (“Similar Arrangements”), provided
that: (i) the termination and liquidation does not occur proximate to a downturn in
the financial health of the Employer, (ii) all termination distributions are made no
earlier than twelve (12) months and no later than twenty-four (24) months following
such termination, and (iii) the Employer does not adopt any new arrangement that would
be a Similar Arrangement for a minimum of three (3) years following the date the
Employer takes all necessary action to irrevocably terminate and liquidate the
Agreement; |
the Employer may distribute the vested Annual Benefit, determined as of the date of the
termination of the Agreement, to the Executive in a lump sum subject to the above terms.
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| 15.16 | Compliance with Code Section 409A. This Agreement shall be interpreted and
administered consistent with Code section 409A. |
IN WITNESS WHEREOF, the Employer and the Executive have executed this Agreement on the date first
above-written in the City of Quincy, Plumas County, California.
THE EMPLOYER:
|
THE EXECUTIVE: | |||
PLUMAS BANK |
||||
A California Corporation |
||||
/s/ Xxxxxx X. Xxxx
|
/s/ Xxxxxx X. Xxxxxx | |||
Chairman of the Board |
||||
/s/ Xxxxxxxx X. Xxxxxx |
||||
Vice-Chairman of the Board |
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SCHEDULE A
| NUMBER OF COMPLETED | ||||
| YEARS OF SERVICE | APPLICABLE | |||
| WHICH HAVE ELAPSED | PERCENTAGE | |||
1 |
4.5 | % | ||
2 |
9.0 | % | ||
3 |
13.5 | % | ||
4 |
18.0 | % | ||
5 |
22.5 | % | ||
6 |
27.0 | % | ||
7 |
31.5 | % | ||
8 |
36.0 | % | ||
9 |
41.5 | % | ||
10 |
45.0 | % | ||
11 |
49.5 | % | ||
12 |
54.0 | % | ||
13 |
58.5 | % | ||
14 |
63.0 | % | ||
15 |
67.5 | % | ||
16 |
72.0 | % | ||
17 |
76.5 | % | ||
18 |
81.0 | % | ||
19 |
85.5 | % | ||
20 |
90.0 | % | ||
21 |
92.0 | % | ||
22 |
94.0 | % | ||
23 |
96.0 | % | ||
24 |
98.0 | % | ||
25 or more years |
100 | % | ||
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