Exhibit 10.8

 

OAK VALLEY COMMUNITY BANK

DIRECTOR RETIREMENT AGREEMENT

 

 

THIS AGREEMENT between, OAK VALLEY COMMUNITY BANK, a state-chartered commercial
bank located in Oakdale, California (the "Company"), and H. RANDOLPH HOLDER (the
"Director")

 

INTRODUCTION

 

To encourage the Director to remain a member of the Company’s Board of
Directors, the Company is willing to provide retirement benefits to the
Director. The Company will pay the benefits from its general assets.

 

AGREEMENT

 

The Director 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

“Change of Control” means:

(a)     A change in the ownership of the capital stock of the Company or the
Holding Company, whereby a corporation, person, or group acting in concert
(hereinafter this Agreement shall collectively refer to any combination of these
three [a corporation, person, or group acting in concert] as a “Person”) as
described in Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), acquires, directly or indirectly, beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
number of shares of capital stock of the Company or Holding Company which
constitutes fifty percent (50%) or more of the combined voting power of the
Company’s or Holding Company’s then outstanding capital stock then entitled to
vote generally in the election of directors; or

(b)     The persons who were members of the Board of Directors of the Company or
Holding Company immediately prior to a tender offer, exchange offer, contested
election or any combination of the foregoing, cease to constitute a majority of
the Board of Directors; or

(c)     The adoption by the Board of Directors of the Company or of the Holding
Company of a merger, consolidation or reorganization plan involving the Company
or Holding Company in which the Company or the Holding Company is not the
surviving entity, or a sale of all or substantially all of the assets of the
Company or Holding Company. For purposes of this Agreement, a sale of all or
substantially all of the assets of the Company or Holding Company shall be
deemed to occur if any Person acquires (or during the 12-month period ending on
the date of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair market
value equal to fifty percent (50%) or more of the fair market value of all of
the respective gross assets of the Company or Holding Company immediately prior
to such acquisition or acquisitions; or

 

 
 

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(d)     A tender offer or exchange offer is made by any Person which results in
such Person beneficially owning (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) either fifty percent (50%) or more of the Company’s or
Holding Company’s outstanding shares of Common Stock or shares of capital stock
having fifty percent (50%) or more the combined voting power of the Company’s or
Holding Company’s then outstanding capital stock (other than an offer made by
the Company or the Holding Company), and sufficient shares are acquired under
the offer to cause such person to own fifty percent (50%) or more of the voting
power; or

(e)     Any other transactions or series of related transactions occurring which
have substantially the same effect as the transactions specified in any of the
preceding clauses of this subsection (1.1).

 

1.1.1     “Permitted Transfers” means that a Shareholder, defined as the
existing owners of all issued and outstanding stock of the Company as of the
date of this Agreement, may make the following transfers and such transfers
shall be deemed not to be a Change of Control under Section 1.1:

(a)       To any trust created solely for the benefit of any Shareholder or any
spouse of or any lineal descendant of any Shareholder;

(b)       To any individual or entity by bona fide gift;

(c)       To any spouse or former spouse pursuant to the terms of a decree of
divorce;

(d)       To any officer or employee of the Company pursuant to any incentive
stock option plan established by the Shareholders;

(e)        To any family member; or

(f)       After receipt of any necessary regulatory approvals, to any Company or
partnership a majority of the stock or interests of which Company or partnership
are owned by any of the Shareholders.

 

 

1.2

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

 

1.3     "Disability" means the Director’s suffering a sickness, accident or
injury which has been determined by the carrier of any individual or group
disability insurance policy covering the Director, or by the Social Security
Administration, to be a disability rendering the Director totally and
permanently disabled. For this purpose, totally and permanently disabled means
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months). The Director must submit proof to the Company of the carrier’s or
Social Security Administration’s determination upon the request of the Company.

 

1.4     "Early Termination" means the Termination of Service before Normal
Retirement Age for reasons other than death, Disability, Termination for Cause
or following a Change of Control.

 

 
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1.5     "Early Termination Date" means the month, day and year in which Early
Termination occurs.

 

1.6     "Effective Date" means July 1, 2016.

 

1.7     “Involuntary Termination of Service” means, following a Change of
Control, the Director is removed from the Board of Directors without his
consent.

 

1.8     "Normal Retirement Age" means the later of the Director’s 72nd birthday
or ten (10) Years of Service.

 

1.9     "Normal Retirement Date" means the later of Normal Retirement Age or
Termination of Service.

 

1.10   "Plan Year" means each calendar year from January 1 through December 31.
The initial Plan Year shall commence on the date of this Agreement, and end on
December 31st of that year.

 

1.11   “Specified Employee” means an employee who, as of the date of his
Termination of Employment, is a “key employee” of the Company or any member of a
controlled group that includes the Company, any stock of which is actively
traded on an established securities market or otherwise. An Employee is a key
employee if he meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or
(iii) (applied in accordance with applicable regulations thereunder and without
regard to Code Section 416(i)(5)) at any time during the 12-month period ending
on December 31 of any Plan Year. Such Employee shall be treated as a key
employee for the entire 12-month period beginning on the Specified Employee
Effective Date.

 

1.12   "Termination for Cause" See Section 5.2.

 

1.13   "Termination of Service" means that the Director ceases to be a member of
the Company’s Board of Directors for any reason, voluntarily or involuntarily,
other than by reason of a leave of absence approved by the Company.

 

1.14   “Years of Service” means the total number of calendar years during which
the Director serves on the Board of Directors.

 

Article 2

Lifetime Benefits

2.1      Normal Retirement Benefit. Upon Termination of Service on or after the
Normal Retirement Date for reasons other than death, the Company shall pay to
the Director the benefit described in this Section 2.1 in lieu of any other
benefit under this Article.

 

2.1.1       Amount of Benefit. The annual benefit under this Section 2.1 is
twelve thousand dollars ($12,000). The Company's Board of Directors, in its sole
discretion, may increase the annual benefit under this Section 2.1.1; however,
any increase shall require the recalculation of Schedule A.

 

 
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2.1.2        Payment of Benefit. The Company shall pay the annual benefit to the
Director in 12 equal monthly installments payable on the first day of each month
commencing with the month following the Director’s Normal Retirement Date. The
annual benefit shall be paid to the Director for ten (10) years. Payment to
Specified Employees shall be made on the first day of the seventh (7th) month
following Termination of Employment.

 

2.2           Early Termination Benefit. Upon Early Termination, the Company
shall pay to the Director the benefit described in this Section 2.2 in lieu of
any other benefit under this Agreement.

 

2.2.1        Amount of Benefit. The benefit under this Section 2.2 is the Early
Termination Lump Sum Benefit set forth in Schedule A for the Plan Year ending
immediately prior to the Early Termination Date, determined by vesting the
Director in one hundred percent (100%) of the Accrual Balance on Schedule A. Any
increase in the annual benefit under Section 2.1.1 shall require the
recalculation of this benefit on Schedule A.

 

2.2.2        Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within sixty (60) days following Termination of Service.
Payment to Specified Employees shall be made on the first day of the seventh
(7th) month following Termination of Employment.

 

2.3           Disability Benefit. If the Director incurs a Termination of
Service due to a Disability prior to Normal Retirement Age, the Company shall
pay to the Director the benefit described in this Section 2.3 in lieu of any
other benefit under this Agreement.

 

2.3.1       Amount of Benefit. The benefit under this Section 2.3 is the
Disability Lump Sum Benefit set forth in Schedule A for the Plan Year ending
immediately prior to the date in which Termination of Service occurs, determined
by vesting the Director in one hundred percent (100%) percent of the Accrual
Balance on Schedule A. Any increase in the annual benefit under Section 2.1.1
would require the recalculation of the Disability benefit on Schedule A.

 

2.3.2        Payment of Benefit. The Company shall pay the benefit amount to the
Director in a lump sum within sixty (60) days following the Termination of
Service.

 

2.4          Change of Control Benefit. Upon Involuntary Termination of Service
within twenty-four (24) months following a Change of Control, the Company shall
pay to the Director the benefit described in this Section 2.4 in lieu of any
other benefit under this Agreement.

 

 
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2.4.1       Amount of Benefit. The annual benefit under this Section 2.4 is the
Change of Control Annual Benefit set forth in Schedule A for the Plan Year
ending immediately prior to the date in which Termination of Service occurs,
determined by vesting the Director in the one hundred percent (100%) of the
Normal Retirement Benefit described in Section 2.1.1. Any increase in the annual
benefit under Section 2.1.1 would require the recalculation of the Change of
Control benefit on Schedule A.

 

2.4.2        Payment of Benefit. The Company shall pay the annual benefit amount
to the Director in 12 equal monthly installments payable on the first day of
each month commencing with the month following the Termination of Service unless
the Director is a Specified Employee in which case the Company shall pay the
annual benefit commencing with the seventh (7th) month following Termination of
Employment. . The annual benefit shall be paid to the Director for ten (10)
years.

 

 

Article 3

Death Benefits

 

Upon the Director’s death prior to Termination of Service, the Company shall pay
to the Director's beneficiary the sum of (i) the Accrual Balance on Schedule A
for the Plan Year ending immediately prior to the date of the Director’s death,
plus (ii) the benefit described in the Split Dollar Agreement and Endorsement
attached as Addendum A between the Company and the Director. The Company shall
pay the benefit in (i) above to the Director’s beneficiary in a lump sum within
60 days following the Director’s death.

 

Article 4

Beneficiaries

 

4.1     Beneficiary Designations. The Director shall designate a beneficiary by
delivering a written designation to the Company. The Director may revoke or
modify the designation at any time by delivering a new designation. However,
designations will only be effective if signed by the Director and delivered to
and received by the Company during the Director's lifetime. The Director's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Director or if the Director names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Director dies without a valid
beneficiary designation, all payments shall be made to the personal
representative of the Director's estate.

 

4.2     Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent or to a person incapable of handling the disposition of his
or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.

 

 
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Article 5

General Limitations

 

5.1     Excess Parachute Payment. Notwithstanding any provision of this
Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would create an excise tax under the excess
parachute rules of Section 280G of the Code. To the extent possible, such
benefit payment shall be reduced to allow payment within the fullest extent
permissible under applicable law.

 

5.2      Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement if
the Company terminates the Director's service for:

 

(a)           Gross negligence or gross neglect of duties; or

(b)           Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Director's service
and resulting in an adverse effect on the Company.

 

5.3     Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.

 

Article 6

Claims and Review Procedures

 

6.1      Claims Procedure. A Participant or beneficiary (“claimant”) who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:

6.1.1       Initiation – Written Claim. The claimant initiates a claim by
submitting to the Company a written claim for the benefits.

6.1.2       Timing of Company Response. The Company shall respond to such
claimant within 90 days after receiving the claim. If the Company determines
that special circumstances require additional time for processing the claim, the
Company can extend the response period by an additional 90 days by notifying the
claimant in writing, prior to the end of the initial 90-day period, that an
additional period is required. The notice of extension must set forth the
special circumstances and the date by which the Company expects to render its
decision.

 

 
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6.1.3       Notice of Decision. If the Company denies part or all of the claim,
the Company shall notify the claimant in writing of such denial. The Company
shall write the notification in a manner calculated to be understood by the
claimant. The notification shall set forth:

6.1.3.1     The specific reasons for the denial,

6.1.3.2     A reference to the specific provisions of the Plan on which the
denial is based,

6.1.3.3     A description of any additional information or material necessary
for the claimant to perfect the claim and an explanation of why it is needed,

6.1.3.4     An explanation of the Plan’s review procedures and the time limits
applicable to such procedures, and

6.1.3.5     A statement of the claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

 

6.2      Review Procedure. If the Company denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Company of
the denial, as follows:

6.2.1       Initiation – Written Request. To initiate the review, the claimant,
within 60 days after receiving the Company’s notice of denial, must file with
the Company a written request for review.

6.2.2       Additional Submissions – Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Company shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

6.2.3      Considerations on Review. In considering the review, the Company
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

6.2.4       Timing of Company Response. The Company shall respond in writing to
such claimant within 60 days after receiving the request for review. If the
Company determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by an
additional 60 days by notifying the claimant in writing, prior to the end of the
initial 60-day period, that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the
Company expects to render its decision.

6.2.5      Notice of Decision. The Company shall notify the claimant in writing
of its decision on review. The Company shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:

6.2.5.1     The specific reasons for the denial,

6.2.5.2     A reference to the specific provisions of the Plan on which the
denial is based,

6.2.5.3     A statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits, and

6.2.5.4     A statement of the claimant’s right to bring a civil action under
ERISA Section 502(a).

 

 
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Article 7

Amendments and Termination

 

This Agreement may be amended or terminated only by a written agreement signed
by the Company and the Director. Provided, however, unless otherwise agreed to
by the Company and the Director, this Agreement will automatically terminate
upon the Director’s Termination of Service prior to the Normal Retirement Age
and payment in full by the Company of any benefits due to the Director under
Sections 2.2, 2.3 or 2.4.

 

Notwithstanding the previous paragraph in this Article 7, the Company may amend
or terminate this Agreement at any time if, pursuant to legislative, judicial or
regulatory action, continuation of the Agreement would (i) cause benefits to be
taxable to the Director prior to actual receipt, or (ii) result in significant
financial penalties or other significantly detrimental ramifications to the
Company (other than the financial impact of paying the benefits).

 

Article 8

Miscellaneous

 

8.1     Binding Effect. This Agreement shall bind the Director and the Company,
and their beneficiaries, survivors, executors, successors, administrators and
transferees.

 

8.2     No Guarantee of Service. This Agreement is not a contract for services.
It does not give the Director the right to remain in the service of the Company,
nor does it interfere with the shareholder's rights to discharge the Director.
It also does not require the Director to remain in the service of the Company
nor interfere with the Director's right to terminate services at any time.

 

8.3     Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

 

8.4     Reorganization. The Company shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term “Company” as
used in this Agreement shall be deemed to refer to the successor or survivor
company.

 

8.5     Tax Withholding. The Company shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.

 

8.6     Applicable Law. The Agreement and all rights hereunder shall be governed
by the laws of the State of California, except to the extent preempted by the
laws of the United States of America.

 

8.7     Unfunded Arrangement. The Director and beneficiary are general unsecured
creditors of the Company for the payment of benefits under this Agreement. The
benefits represent the mere promise by the Company to pay such benefits. The
rights to benefits are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on the Director's life is a general asset of the
Company to which the Director and beneficiary have no preferred or secured
claim.

 

 
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8.8      Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Director as to the subject matter hereof. No rights
are granted to the Director by virtue of this Agreement other than those
specifically set forth herein.

 

8.9      Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:

 

 

(a)

Interpreting the provisions of the Agreement;

 

 

(b)

Establishing and revising the method of accounting for the Agreement;

 

 

(c)

Maintaining a record of benefit payments; and

        (d) Establishing rules and prescribing any forms necessary or desirable
to administer the Agreement.

     

8.10     Named Fiduciary. The Company shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the Service of advisors and the delegation of ministerial duties to
qualified individuals.

 

IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this amended and restated Agreement.

 

DIRECTOR:  

 

COMPANY:

 

    OAK VALLEY COMMUNITY BANK          

/s/  H. RANDOLPH HOLDER

 

By

/s/ Richard A. McCarty

 

         

H. RANDOLPH HOLDER

 

Title

Senior Executive Vice President/ Chief Administrative Officer

 

 

 
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BENEFICIARY DESIGNATION

 

OAK VALLEY COMMUNITY BANK

DIRECTOR RETIREMENT AGREEMENT

 

H. RANDOLPH HOLDER

 

I designate the following as beneficiary of any death benefits under this
Agreement:

 

Primary:

 Betty Holder

 

 

   

 

Contingent:

 Susan C. Holder

       

 

Note:

To name a trust as beneficiary, please provide the name of the trustee(s) and
the exact name and date of the trust agreement.

 

I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.

 

 

Signature  /s/ H. Randolph Holder                             

 

Date                10/13/16                                                 

 

 

Received by the Company this 18th day of October, 2016.

 

 

By  /s/ Richard A. McCarty                                     

 

Title  Senior Executive Vice President/ Chief Administrative Officer  

 

 
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ADDENDUM A

 

OAK VALLEY COMMUNITY BANK

SPLIT DOLLAR AGREEMENT

 

 

THIS AGREEMENT is made and entered into this 4th day of October, 2016, by and
between OAK VALLEY COMMUNITY BANK, a state-chartered commercial bank located in
Oakdale, California (the "Company"), and H. RANDOLPH HOLDER (the "Director").
This Agreement shall append the Split Dollar Endorsement entered into on October
4, 2016, by and between the aforementioned parties.

 

 

INTRODUCTION

 

To encourage the Director to remain a member of the Company’s Board of
Directors, the Company is willing to divide the death proceeds of a life
insurance policy on the Director's life. The Company will pay life insurance
premiums from its general assets.

 

Article 1

General Definitions

 

The following terms shall have the meanings specified:

 

1.1        “Insurer” means each life insurance carrier in which there is a Split
Dollar Policy Endorsement attached to this Agreement.

 

1.2        “Policy” means the specific life insurance policy issued by the
Insurer.

 

1.3        “Insured” means the Director.

 

1.4       “Termination of Service” means the Director ceases to be a member of
the Company’s Board of Directors, for any reason whatsoever, other than by
reason of a leave of absence approved by the Company.

 

Article 2

Policy Ownership/Interests

 

2.1        Company Ownership. The Company is the sole owner of the Policy and
shall have the right to exercise all incidents of ownership. The Company shall
be the direct beneficiary of the remaining death proceeds after the Director’s
interest is paid pursuant to Article 2.2 below.

 

2.2       Director's Interest. The Director shall have the right to designate
the beneficiary of death proceeds of the Policy in the amount of eighty thousand
dollars ($80,000) while the Director is an active Director with the bank. When
the Director terminates service per section 1.4 the benefit under this agreement
ceases.

 

 
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2.3        Option to Purchase. The Company shall not sell, surrender or transfer
ownership of the Policy while this Agreement is in effect without first giving
the Director or the Director’s transferee the option to purchase the Policy for
a period of sixty (60) days from written notice of such intention. The purchase
price shall be an amount equal to the cash surrender value of the Policy. This
provision shall not impair the right of the Company to terminate this Agreement.

 

Article 3

Premiums

 

3.1         Premium Payment. The Company shall pay any premiums due on the
Policy.

 

3.2        Economic Benefit. The Company shall determine the economic benefit
attributable to the Director based on the amount of the current term rate for
the Director's age multiplied by the aggregate death benefit payable to the
Director's beneficiary. The "current term rate" is the minimum amount required
to be imputed under Revenue Rulings 64-328 and 66-110, or any subsequent
applicable authority.

 

 

Article 4

Assignment

 

The Director may assign without consideration his interests in the Policy and in
this Agreement to any person, entity or trust. In the event the Director
transfers all of the Director’s interest in the Policy, then all of the
Director's interest in the Policy and in the Agreement shall be vested in the
Director’s transferee, who shall be substituted as a party hereunder and the
Director shall have no further interest in the Policy or in this Agreement.

 

 

Article 5

Insurer

 

The Insurer shall be bound only by the terms of the Policy. Any payments the
Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and demands of all entities or persons. The
Insurer shall not be bound by or be deemed to have notice of the provisions of
this Agreement.

 

 
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Article 6

Claims Procedure

 

6.1      Claims Procedure. A Participant or beneficiary (“claimant”) who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:

6.1.1       Initiation – Written Claim. The claimant initiates a claim by
submitting to the Company a written claim for the benefits.

6.1.2       Timing of Company Response. The Company shall respond to such
claimant within 90 days after receiving the claim. If the Company determines
that special circumstances require additional time for processing the claim, the
Company can extend the response period by an additional 90 days by notifying the
claimant in writing, prior to the end of the initial 90-day period, that an
additional period is required. The notice of extension must set forth the
special circumstances and the date by which the Company expects to render its
decision.

6.1.3       Notice of Decision. If the Company denies part or all of the claim,
the Company shall notify the claimant in writing of such denial. The Company
shall write the notification in a manner calculated to be understood by the
claimant. The notification shall set forth:

6.1.3.1     The specific reasons for the denial,

6.1.3.2     A reference to the specific provisions of the Plan on which the
denial is based,

6.1.3.3     A description of any additional information or material necessary
for the claimant to perfect the claim and an explanation of why it is needed,

6.1.3.4     An explanation of the Plan’s review procedures and the time limits
applicable to such procedures, and

6.1.3.5     A statement of the claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

 

6.2       Review Procedure. If the Company denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Company of
the denial, as follows:

6.2.1       Initiation – Written Request. To initiate the review, the claimant,
within 60 days after receiving the Company’s notice of denial, must file with
the Company a written request for review.

6.2.2       Additional Submissions – Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Company shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

6.2.3      Considerations on Review. In considering the review, the Company
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

6.2.4       Timing of Company Response. The Company shall respond in writing to
such claimant within 60 days after receiving the request for review. If the
Company determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by an
additional 60 days by notifying the claimant in writing, prior to the end of the
initial 60-day period, that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the
Company expects to render its decision.

 

 
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6.2.5       Notice of Decision. The Company shall notify the claimant in writing
of its decision on review. The Company shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:

6.2.5.1     The specific reasons for the denial,

6.2.5.2     A reference to the specific provisions of the Plan on which the
denial is based,

6.2.5.3     A statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits, and

6.2.5.4     A statement of the claimant’s right to bring a civil action under
ERISA Section 502(a).

 

Article 7

Amendments and Termination

 

This Agreement may be amended or terminated only by a written agreement signed
by the Company and the Director. However, unless otherwise agreed to by the
Company and the Director, this Agreement will automatically terminate upon the
Director’s Termination of Service.

 

Notwithstanding the previous paragraph in this Article 7, the Company may amend
or terminate this Agreement at any time if, pursuant to legislative, judicial or
regulatory action, continuation of the Agreement would result in significant
financial penalties or other significantly detrimental ramifications to the
Company (other than the financial impact of paying the benefits).

 

Article 8

Miscellaneous

 

8.1        Binding Effect. This Agreement shall bind the Director and the
Company, their beneficiaries, survivors, executors, administrators and
transferees, and any Policy beneficiary.

 

8.2        No Guarantee of Service. This Agreement is not a contract for
services. It does not give the Director the right to remain in the service of
the Company, nor does it interfere with the shareholder's rights to discharge
the Director. It also does not require the Director to remain in the service of
the Company nor interfere with the Director's right to terminate services at any
time.

 

8.3        Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of California,
except to the extent preempted by the laws of the United States of America.

 

8.4       Reorganization. The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Company.

 

 
13

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8.5        Notice. Any notice, consent or demand required or permitted to be
given under the provisions of this Split Dollar Agreement by one party to
another shall be in writing, shall be signed by the party giving or making the
same, and may be given either by delivering the same to such other party
personally, or by mailing the same, by United States certified mail, postage
prepaid, to such party, addressed to his or her last known address as shown on
the records of the Company. The date of such mailing shall be deemed the date of
such mailed notice, consent or demand.

 

8.6        Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Director as to the subject matter hereof. No rights
are granted to the Director by virtue of this Agreement other than those
specifically set forth herein.

 

8.7        Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:

 

(a)      Interpreting the provisions of the Agreement;

 

(b)      Establishing and revising the method of accounting for the Agreement;

 

(c)      Maintaining a record of benefit payments; and

 

(d)      Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.

 

8.8      Named Fiduciary. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company shall be the named fiduciary
and plan administrator under the Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the
plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals

 

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

 

 

COMPANY:

 

  OAK VALLEY COMMUNITY BANK  

 

 

 

 

 

 

 

 

 

By

/s/ Richard A. McCarty

 

 

Title

Senior Executive Vice President/ Chief Administrative Officer

 

 

 

 

 

          DIRECTOR:              /s/ H. RANDOLPH HOLDER     H. RANDOLPH HOLDER  

 

 
14 

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Distribution Options

Director Retirement Plan

 

H. Randolph Holder

 

Event

Benefit Amount

Distribution Method

 

Normal Retirement (age 72)

Change of Control

 

Normal Retirement Benefit

10 years of monthly payments

Termination for Cause

No Benefit

N/A

Early Termination

Vested Portion of Accrual Balance

Immediate Lump Sum Payment

Disability

100% of the Accrual Balance

Immediate Lump Sum Payment

Pre-Retirement Death

 

Death Benefits equal to:

 

Present Value of Normal Retirement Benefit ($80,000) +

 

100% of Accrual Balance

 

Lump Sum Tax-Free

 

 

Immediate Lump Sum Taxable

Post-Retirement Death

Death Benefits equal to:

 

100% of Accrual Balance

Immediate Lump Sum Taxable

 

 
 

--------------------------------------------------------------------------------

 

 

Schedule A- Holder

 

Values

 

Discount

   

Benefit

   

Accrual

   

Early

           

Change in

         

as of

 

Rate

   

Level

   

Balance

   

Termination

   

Disability

   

Control

   

Death Benefit

                                                                           

Annual Amount

   

Accrual Starts

   

Lump Sum Payable

   

Lump Sum Payable

   

Annual Amount For 10

   

Lump Sum

               

For 10 years at age 72

   

7/1/2016

   

at Termination

   

at Termination

   

years at Termination

   

Payable at Death

 

 Dec

2016

    4.50%     $ 12,000     $ 2,756     $ 2,756     $ 2,756     $ 12,000     $
2,756  

 Dec

2017

    4.50%     $ 12,000     $ 8,594     $ 8,594     $ 8,594     $ 12,000     $
8,594  

 Dec

2018

    4.50%     $ 12,000     $ 14,951     $ 14,951     $ 14,951     $ 12,000     $
14,951  

 Dec

2019

    4.50%     $ 12,000     $ 21,864     $ 21,864     $ 21,864     $ 12,000     $
21,864  

 Dec

2020

    4.50%     $ 12,000     $ 29,368     $ 29,368     $ 29,368     $ 12,000     $
29,368  

 Dec

2021

    4.50%     $ 12,000     $ 37,503     $ 37,503     $ 37,503     $ 12,000     $
37,503  

 Dec

2022

    4.50%     $ 12,000     $ 46,311     $ 46,311     $ 46,311     $ 12,000     $
46,311  

 Dec

2023

    4.50%     $ 12,000     $ 55,836     $ 55,836     $ 55,836     $ 12,000     $
55,836  

 Dec

2024

    4.50%     $ 12,000     $ 66,124     $ 66,124     $ 66,124     $ 12,000     $
66,124  

 Dec

2025

    4.50%     $ 12,000     $ 77,225     $ 77,225     $ 77,225     $ 12,000     $
77,225  

 Dec

2026

    4.50%     $ 12,000     $ 89,121     $ 89,121     $ 89,121     $ 12,000     $
89,121  

 Dec

2027

    4.50%     $ 12,000     $ 97,058     $ 97,058     $ 97,058     $ 12,000     $
97,058  

 

15