409A Amendment to the Pacific State Bank Salary Continuation Agreement for
409A
Amendment
to
the
Pacific
State Bank
___________________
Pacific
State Bank (“Company”) and __________________(“Executive”) originally entered
into the Pacific State Bank Salary Continuation Agreement (“Agreement”) on
September 30, 2003. Pursuant to Article 7 of the Agreement, the
Company and the Executive hereby adopt this 409A Amendment, effective January 1,
2005.
RECITALS
This
Amendment is intended to bring the Agreement into compliance with the
requirements of Internal Revenue Code Section 409A. Accordingly, the
intent of the parties hereto is that the Agreement shall be operated and
interpreted consistent with the requirements of Section
409A. Therefore, the following changes shall be made:
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1.
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Section
1.1, “Change of Control”, shall be deleted in its entirety and replaced
with the following Section 1.1:
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“Change in Control” shall mean
a change in ownership or control of the Company as defined in Treasury
Regulation §1.409A-3(i)(5) or any subsequently applicable Treasury
Regulation.
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2.
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The
following provision regarding “Separation from Service” distributions
shall be added as a new subsection 14 under Article 1, as
follows:
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“Separation from
Service” Notwithstanding anything to the contrary in this
Agreement, to the extent that any benefit under this Agreement is payable
upon a “Termination of Employment,” “Termination of Service,” or other
event involving the Executive’s cessation of services, such payment(s) shall not
be made unless such event constitutes a “Separation from Service” as defined in
Treasury Regulations Section 1.409A-1(h).
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3.
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Section
2.2.1, “Amount of Benefit”, shall be amended to delete the Vesting
Schedule in its entirety and to replace it with the
following:
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Plan
Year % Vested in Accrual
Balance
1-10 10%
per year (100% maximum)
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4.
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Section
2.5.3, “Excess Parachute Payment”, shall be deleted in its entirety and
intentionally left blank.
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5.
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A
new Section 2.6 shall be added as
follows:
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Restriction on Timing of
Distribution. Notwithstanding any provision of this Agreement to
the contrary, distributions under this Agreement may not commence earlier than
six (6) months after the date of a Separation from Service (as described
under the “Separation from Service” provision herein) if, pursuant to Internal
Revenue Code Section 409A, the participant hereto is considered a “specified
employee” (under Internal Revenue Code Section 416(i)) of the Company if
any stock of the Company is publicly traded on an established securities market
or otherwise. In the event a distribution is delayed pursuant to this
Section, the originally scheduled distribution shall be delayed for six (6)
months, and shall commence instead on the first day of the seventh month
following Separation from Service. If payments are scheduled to be
made in installments, the first six (6) months of installment payments shall be
delayed, aggregated, and paid instead on the first day of the seventh month,
after which all installment payments shall be made on their regular
schedule. If payment is scheduled to be made in a lump sum, the lump
sum payment shall be delayed for six (6) months and instead be made on the first
day of the seventh month.
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6.
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A
new Section 8.11 shall be added as
follows:
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Certain Accelerated
Payments. The Company may make any accelerated distribution
permissible under Treasury Regulation 1.409A-3(j)(4) to the Executive of
deferred amounts, provided that such distribution(s) meets the requirements of
Section 1.409A-3(j)(4).
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7.
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A
new Section 8.12 shall be added as
follows:
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Subsequent Changes to Time and Form
of Payment. The Company may permit a subsequent change to the
time and form of benefit distributions. Any such change shall be
considered made only when it becomes irrevocable under the terms of the
Agreement. Any change will be considered irrevocable not later than
thirty (30) days following acceptance of the change by the Plan Administrator,
subject to the following rules:
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(1)
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the
subsequent deferral election may not take effect until at least twelve
(12) months after the date on which the election is
made;
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(2)
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the
payment (except in the case of death, disability, or unforeseeable
emergency) upon which the subsequent deferral election is made is deferred
for a period of not less than five (5) years from the date such payment
would otherwise have been paid; and
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(3)
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in
the case of a payment made at a specified time, the election must be made
not less than twelve (12) months before the date the payment is scheduled
to be paid.
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Therefore,
the foregoing changes are agreed to.
_______________________________ __________________________________
For the
Company
Date___________________________ Date______________________________
