Exhibit 10.23

 

Quaker City Bank Deferred Compensation Plan, amended and restated March 30,
1999.

 

QUAKER CITY FEDERAL SAVINGS AND LOAN ASSOCIATION

 

DEFERRED COMPENSATION PLAN

(Amended and Restated March 30, 1999)

 

THIS QUAKER CITY FEDERAL SAVINGS AND LOAN ASSOCIATION DEFERRED COMPENSATION PLAN
is effective January 1, 1992, as amended and restated as of March 30, 1999.

 

RECITALS

 

A. Effective January 1, 1992, the Association adopted the Quaker City Federal
Savings and Loan Association Deferred Compensation Plan, as amended and restated
effective November 18, 1993 (the “Original Plan”), which fully restated and
superseded the Deferred Director Fee Plan adopted January 1, 1981 and was
intended to supersede and include all other existing deferred compensation
arrangements maintained by the Association.

 

B. This Plan, as amended and restated effective March 30, 1999, fully restates
and supersedes the Original Plan. It is an unfunded deferred compensation plan
primarily for the benefit of a select group of highly compensated, upper and
middle management employees and directors. The Plan governs all deferred
compensation arrangements by and between the Association and the Participants
herein, including all deferrals, interest accruals, elections and distributions
in respect thereto.

 

I.

DEFINITIONS

 

Capitalized terms not otherwise defined herein have the meanings set forth
below.

 

“Accrual Date” has the meaning ascribed to that term in Article III.

 

“Association” means Quaker City Federal Savings and Loan Association.

 

“Bancorp” means the Association’s parent corporation, Quaker City Bancorp, Inc.

 

“Beneficiary” means the one or more persons or other entities last designated by
a Participant to receive the distributions due the Participant under this Plan,
in the event the Participant dies before all such distributions have been paid
to the Participant.

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“Board” means the Board of Directors of the Association.

 

“Change in Control” means the following and shall be deemed to occur if any of
the following events occurs:

 

(a) Any Person becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of either
the then outstanding securities or the combined voting power of the
Association’s or Bancorp’s then outstanding securities entitled to vote
generally; or

 

(b) Individuals who, as of the effective date hereof, constitute the Board of
Directors of the Association or Bancorp (as applicable, the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board of Directors
of the Association or Bancorp, as applicable, provided that any individual who
becomes a director after the effective date hereof whose election, or nomination
for election by the Association’s or Bancorp’s shareholders (as applicable), is
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered to be a member of the Incumbent Board unless
that individual was nominated or elected by any person, entity or group having
the power to exercise, through beneficial ownership, voting agreement and/or
proxy, twenty percent (20%) or more of either the outstanding securities or the
combined voting power of the Association’s or Bancorp’s (as applicable) then
outstanding voting securities entitled to vote generally in the election of
directors, in which case that individual shall not be considered to be a member
of the Incumbent Board unless such individual’s election or nomination for
election by the Association’s or Bancorp’s (as applicable) shareholders is
approved by a vote of at least two-thirds (2/3) of the directors then comprising
the Incumbent Board; or

 

(c) Consummation by the Association or Bancorp of the sale or other disposition
by the Association or Bancorp, as applicable, of all or substantially all of the
Association’s or Bancorp’s assets or a merger, consolidation or other
reorganization (each a “Reorganization”) of the Association or Bancorp with any
Person, other than

 

(i) a Reorganization that would result in the voting securities of the
Association or Bancorp outstanding immediately prior thereto (or, in the case of
a Reorganization that is preceded or accomplished by an acquisition or series of
related acquisitions by any Person, by tender or exchange offer or otherwise, of
voting securities representing five percent (5%) or more of the combined voting
power of all securities of the Association or Bancorp, immediately prior to such
acquisition or the first acquisition in such series of acquisitions) continuing
to represent, either by remaining outstanding or by being converted into voting
securities of another entity, more than fifty percent (50%) of the combined
voting power of the voting securities of the Association, Bancorp or such other
entity outstanding immediately after such Reorganization (or series of related
transactions involving such a Reorganization), or

 

(ii) a Reorganization effected to implement a recapitalization or
reincorporation of the Association or Bancorp (or similar transaction) that does
not result in a material change in beneficial ownership of the voting securities
of the Association, Bancorp or their successor; or

 

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(d) Approval by the shareholders of the Association or Bancorp, or an order by a
court of competent jurisdiction, of a plan of liquidation of the Association or
Bancorp, as applicable.

 

“Compensation” means any and all salaries, fees, bonuses or other compensation
payable to a Participant by the Association (including, without limitation,
director’s fees, senior officer deferred compensation, and deferred incentive
compensation awarded under the Association’s Long Term Incentive Plan for the
President of the Association).

 

“Deferred Compensation” means all Compensation with respect to which a
Participant has filed a valid Notice of General Election or Notice of Special
Election.

 

“Eligible Employee” means any officer or other highly compensated employee of
the Association who is designated by the Board as eligible to be a Participant
in this Plan.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange Act” means the Securities and Exchange Act of 1934, as amended.

 

“General Election” has the meaning ascribed to that term in Section 2.1.

 

“Initial Election Deadline” has the meaning ascribed to that term in Section
4.1(a).

 

“Notice of Alternative Distribution” means a written notice, in substantially
the form attached hereto as Exhibit C or such other form as may be adopted from
time to time by the Association.

 

“Notice of General Election” means a written notice, in substantially the form
attached hereto as Exhibit B or such other form as may be adopted from time to
time by the Association, of a Participant’s election to defer the receipt of
Compensation under the General Election provisions of this Plan.

 

“Notice of Special Election” means a written notice, in such form as may be
adopted from time to time by the Association, of a Participant’s election to
defer the receipt of bonus Compensation under the Special Election provisions of
this Plan.

 

“Participant” means any director or Eligible Employee of the Association who is
designated as a Participant by the Board and elects to defer Compensation under
the terms of this Plan.

 

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“Person” means any person, entity or group, within the meaning of Section 13(d)
or 14(d) of the Exchange Act, but excluding (a) the Association, Bancorp, and
their subsidiaries and (b) any employee stock ownership or other employee
benefit plan maintained by the Association or Bancorp.

 

“Plan” means this Quaker City Federal Savings and Loan Association Deferred
Compensation Plan, as amended and restated effective March 30, 1999.

 

“Reorganization” has the meaning ascribed to that term under the definition of
“Change in Control.”

 

“Special Election” has the meaning ascribed to that term in Section 2.2.

 

“Special Ledger Account” means an appropriate record maintained by the
Association, setting forth the name of each Participant and the amount, in
dollars, of such Participant’s Deferred Compensation and interest payable
thereon to date, under the terms and conditions of this Plan.

 

“Stock” means shares of Quaker City Bancorp, Inc. Common Stock, par value $.01
per share.

 

“Stock Units” means that number of whole shares of Stock into which Deferred
Compensation could be converted, according to the procedures set forth in
Article IV.

 

“Stock Unit Account” means an appropriate record maintained by the Association,
setting forth the name of each Participant who has made a Stock Unit Election
and the number of Stock Units attributable thereto.

 

“Stock Unit Election” means an election made pursuant to Article IV.

 

“Termination Date” means (a) the date on which an Eligible Employee ceases to be
an employee of the Association for any reason whatsoever or (b) the date that a
director ceases to be a director of the Association for any reason whatsoever,
as applicable. With respect to any Eligible Employee who is also a director of
the Association, the Termination Date of such Eligible Employee’s employment may
differ from the Termination Date of his or her directorship.

 

“Window Period” means a period beginning on the third (3rd) business day
following the date of release of the quarterly and/or annual statements of sales
or earnings by Bancorp and ending on the twenty-fourth (24th) calendar day
following such date.

 

II.

PARTICIPATION

 

2.1 General Election. Each Participant may elect to defer, until his or her
Termination Date (unless otherwise provided in this Plan), any Compensation that
may otherwise be payable to the Participant (a “General Election”), by filing a
Notice of General Election with the Association at any time before the end of
the calendar year immediately preceding the year in which the Participant’s
entitlement to such Compensation is to be earned; provided, that the total
amount deferred by a Participant will be limited in any calendar year, if
necessary, to satisfy Social Security

 

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tax (including Medicare), income tax withholding for Compensation that cannot be
deferred, and employee benefit plan withholding requirements, as determined by
the Association in its discretion.

 

2.2 Special Election. Each Participant who is an Eligible Employee may elect to
defer, for a period of not less than seven (7) years (unless otherwise provided
in this Plan) and to be distributed on a date certain in a lump-sum, any
Compensation that may otherwise be payable to the Participant (a “Special
Election”), by filing a Notice of Special Election with the Association any time
during the final Window Period of the calendar year immediately preceding the
year in which the Participant’s entitlement to such Compensation is to be
earned. A Notice of Special Election will apply only to Compensation payable to
the Participant in the next succeeding calendar year. Accordingly, a Participant
who has filed a Notice of Special Election to defer Compensation in any one
calendar year will not be deemed to have elected to defer Compensation in any
other calendar year.

 

2.3 Liability Not Guaranteed. Upon the making of a General Election or a Special
Election, the Deferred Compensation subject to such election will become a
liability of the Association, subject to the provisions of this Plan. SUCH
LIABILITY OF THE ASSOCIATION IS NOT GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER WHATSOEVER.

 

III.

INTEREST ACCRUAL

 

Except with respect to amounts credited to Stock Unit Accounts pursuant to
Article IV, on June 30 and December 31 of each year (each an “Accrual Date”),
interest will be credited to each Participant’s Special Ledger Account on all
amounts therein, at a rate equal to 300 basis points over the United States
Treasury ten-year note rate last quoted prior to the Accrual Date on notes
falling due ten (10) years thereafter either on March 1 or August 1, as the case
may be, and as reported in the Wall Street Journal at the close of trading on
the date last preceding the Accrual Date. For example, if the Treasury Notes
that mature August 1, 2002 were quoted as yielding 6.5% per annum on the last
trading date prior to June 30, 1992, then the interest to be credited to a
Participant’s Special Ledger Account would be calculated at the rate of 9.5% per
annum for the six-month period concluding with the June 30, 1992 Accrual Date.
Interest will be computed and, once credited to a Special Ledger Account, will
then bear interest (together with all other amounts credited to the Special
Ledger Account) to be credited as of the next Accrual Date.

 

IV.

STOCK UNIT ELECTIONS

 

4.1   Stock Unit Elections.

 

(a) Initial Election. Each Participant who has made a General Election and/or
Special Election on or before December 16, 1993 (the “Initial Election
Deadline”), may, by delivering written notice to the Association on or before
the Initial Election Deadline, elect to have all or any portion of the amounts
previously credited to such Participant’s Special Ledger Account credited to a
Stock Unit Account established for the Participant under this Article IV (a
“Stock Unit

 

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Election”). If a Participant elects to have only a portion of the amounts
previously credited to his or her Special Ledger Account credited to a Stock
Unit Account, the balance of the Participant’s deferred amounts will remain in
his or her Special Ledger Account and will continue to accrue interest pursuant
to Article III.

 

(b) Subsequent Elections. Effective for calendar year 1994 and subsequent
calendar years, each Participant may elect to have any Deferred Compensation
credited to a Stock Unit Account under this Article IV, by filing a Stock Unit
Election with the Association at any time during the final Window Period of the
calendar year immediately preceding the year in which the Participant’s
entitlement to such Deferred Compensation is to be earned. Any Deferred
Compensation credited to a Stock Unit Account under this Article IV will remain
in the participant’s Stock Unit Account until normal distribution pursuant to
Section 4.3, except in the event of a Change in Control, in which case Section
10.3 will apply.

 

(c) Election Changes. A Stock Unit Election is irrevocable for a period of
twelve (12) months following the date thereof. Thereafter, a Participant may, by
delivering written notice to the Association, change the amount of or suspend
future credits to the Participant’s Stock Unit Account. Any such change will be
effective as of the first quarterly date following notice to the Association.
Following any suspension of a Stock Unit Account, a Participant may make a new
Stock Unit Election to again credit Deferred Compensation to his or her Stock
Unit Account; provided, however, that the Participant may not make such a change
more often than once in any 12-month period and may not commence participation
in his or her Stock Unit Account within twelve (12) months of the date of
suspension.

 

(d) Special Rules for Participants Subject to Exchange Act Section 16(b). With
respect to any Participant who is subject to Section 16(b) of the Exchange Act,
following any suspension of such Participant’s participation in his or her Stock
Unit Account pursuant to Section 4.1(c), any subsequent Stock Unit Election by
the Participant must be made during a Window Period.

 

4.2 Credits to Stock Unit Accounts. At the direction of a Participant in
accordance with Section 4.1, all or a portion of the Participant’s Special
Ledger Account will periodically be converted into Stock Units and credited to
the Participant’s Stock Unit Account, according to the following provisions:

 

(a) Initial Elections. For each Participant who makes a Stock Unit Election
pursuant to Section 4.1(a), the Association will (i) credit the Participant’s
Stock Unit Account, as of the later to occur of the date of the Participant’s
Stock Unit Election or the initial public issuance of Stock, with a number of
Stock Units determined by dividing the amount of the Participant’s Deferred
Compensation subject to initial Stock Unit Election by the initial issuance
price of the Stock, and (ii) charge the Participant’s Special Ledger Account
with the aggregate value thereof. If so directed by the Participant, any amount
remaining in the Participant’s Special Ledger Account after such charge will be
converted, together with future amounts credited thereto, into additional Stock
Units at the next quarterly conversion date, pursuant to the provisions of
Section 4.2(b).

 

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(b) Subsequent Elections. For each Participant who makes a Stock Unit Election
pursuant to Section 4.1(b), the Association will (i) credit the Participant’s
Stock Unit Account, quarterly as of March 31, June 30, September 30 and December
31 of each year, with a number of Stock Units determined by dividing the amount
of the Participant’s Deferred Compensation subject to the Stock Unit Election by
the average of the reported sales price per share of the Stock, as traded on
NASDAQ or such other market on which the Stock is traded, over the last two
weeks of the applicable quarter; and (ii) charge the Participant’s Special
Ledger Account with the aggregate value thereof. If so directed by the
Participant, any amount remaining in the Participant’s Special Ledger Account
after such charge will be converted, together with future amounts credited
thereto, into additional Stock Units at the next quarterly conversion date.

 

(c) Additional Credits. The Association will credit to each Participant’s
Special Ledger Account the dollar amount of all cash dividends (or the fair
market value of dividends paid in property) that the Participant would have
received had the Participant been the beneficial owner of the number of shares
of Stock equal to the number of Stock Units in his or her Stock Unit Account as
of the applicable record dates. In the event of a stock dividend or stock split
of the Stock, the Association will credit each Participant’s Stock Unit Account
with a number of Stock Units equal to the number of full shares of Stock that
the Participant would have received in such stock dividend or stock split had
the Participant been the beneficial owner of the number of shares of Stock equal
to the number of Stock Units in his or her Stock Unit Account as of the
applicable record date.

 

4.3 Distributions.

 

(a) Distribution Upon Termination. Promptly following a Participant’s
Termination Date, the Association will distribute the Participant’s Stock Unit
Account to the Participant in ten (10) equal annual installments of shares of
Stock, commencing in the first month following the Participant’s Termination
Date; provided, however, that a Participant may elect to have any or all of such
shares distributed in equal annual installments over a shorter period of time or
in a single lump-sum distribution, by delivering a Notice of Alternative
Distribution to the Association prior to the date the Participant is first
eligible to receive benefits under this Plan. Until complete distribution of a
Participant’s Stock Unit Account pursuant to this Section 4.3, the Association
will continue to credit the Participant’s Stock Unit Account and Special Ledger
Account with all amounts to which the Participant is entitled pursuant to
Section 4.2(c).

 

(b) Employee Director Participants. For each Eligible Employee Participant who
also serves as a director of the Association, the distribution of his or her
Stock Unit Account that is attributable to Deferred Compensation, other than
director’s fees, will commence in the month following the Participant’s
employment Termination Date; and the distribution of the portion of the
Participant’s Stock Unit Account that is attributable to director’s fees will
commence in the month following the Participant’s directorship Termination Date.

 

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V.

ACCOUNTING

 

The Association will account for all Deferred Compensation in Special Ledger
Accounts. It will segregate Deferred Compensation for each Participant into
separate categories, including without limitation the following:

 

(a) Deferred Compensation under General Elections;

 

(b) Deferred Compensation under Special Elections;

 

(c) Deferred director’s fees; and

 

(d) Stock Unit Accounts.

 

The Association will prepare and maintain separate records for each of the
foregoing categories, in a form determined by the Association, and will
separately record interest accruals with respect thereto.

 

VI.

REVOCATIONS

 

6.1 General Elections. Participants may revoke General Elections at any time by
delivering written notice to the Association, but only with respect to, and to
the extent of, Compensation not yet earned.

 

6.2 Special Elections. Participants may not revoke Special Elections.

 

6.3 Stock Unit Elections. Participants may amend or revoke Stock Unit Elections
in accordance with the provisions set forth in Section 4.1(c).

 

VII.

REPORTING

 

Under procedures established by the Board, the Association will report to each
Participant, on a semi-annual basis as of each June 30 and December 31, the
status of such Participant’s Special Ledger Account and Stock Unit Account. The
Association will deliver such reports to the Participants within 30 days after
the end of each semi-annual period. To challenge the accuracy of any such
report, a Participant must file a written objection with the Association no
later than ninety (90) days after the Participant’s receipt thereof. If a
Participant fails to file such an objection, he or she will be deemed to have
waived any objection to the subject report, and will be bound by the Special
Ledger Account and Stock Unit Account accounting reflected therein.

 

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VIII.

DISTRIBUTIONS

 

8.1 General Elections. Except with respect to amounts for which Stock Unit
Elections have been made, all Deferred Compensation, and interest thereon, that
is subject to General Elections will be paid according to the following
provisions:

 

(a) Payment Period. Deferred Compensation and interest thereon will be
distributed to a Participant in 120 equal monthly installments, commencing in
the first month following the Participant’s Termination Date; provided, however,
that a Participant may elect to have any or all of such Participant’s Deferred
Compensation and interest paid in equal monthly installments over a shorter
period of time or in a single lump-sum distribution, by delivering a Notice of
Alternative Distribution to the Association prior to the date the Participant is
first eligible to receive benefits under this Plan. Deferred Compensation
subject to different payment elections will be separately accounted for on the
Special Ledger Account and will be separately reported.

 

(b) Interest Rate Adjustments. Interest that is attributable to Deferred
Compensation payable in installments may fluctuate from time to time. The
Association may increase or decrease the amount of a Participant’s monthly
payments to reflect such interest rate adjustments, to the extent reasonably
necessary to assure that full payment of the Participant’s benefits under this
Plan will be completed in not more than 120 months after the Participant’s
Termination Date.

 

(c) Employee Director Participants. For each Eligible Employee Participant who
also serves as a director of the Association, the payment of his or her Deferred
Compensation, other than director’s fees, and interest thereon will commence in
the month following the Participant’s employment Termination Date; and the
payment of his or her deferred director’s fees and interest thereon will
commence in the month following the Participant’s directorship Termination Date.

 

8.2 Special Elections. All Deferred Compensation, and interest thereon, subject
to Special Elections will be distributed to a Participant on the earlier to
occur of (a) the date certain specified in the applicable Notice of Special
Election, or (b) the month following the Participant’s Termination Date.

 

8.3 Stock Unit Elections. Benefits payable to a Participant with respect to
amounts credited to a Stock Unit Account will be distributed in accordance with
the provisions set forth in Section 4.3.

 

8.4 Hardship Distributions. Notwithstanding the foregoing provisions of this
Article, a Participant may request the distribution of all or any portion of the
Participant’s benefits under this Plan at any time prior to his or her
Termination Date or scheduled Special Election payment date, by delivering a
written request therefor to the Association. The Association, in its sole
discretion, will determine whether such early distribution will be made. In the
event that a Participant receives an early distribution pursuant to this
Section, he or she will not be eligible to make any further

 

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elections to defer Compensation under this Plan or any other unfunded deferred
compensation plan established by the Association, for a period of sixty (60)
months after the date of the early distribution.

 

8.5 Participants’ Rights Unsecured; No Assignment. All Participants will be
entirely vested in the amounts credited to their Special Ledger Account pursuant
to the terms of this Plan. However, the rights of Participants to receive
distributions hereunder in Stock or in cash will be unsecured claims against the
general assets of the Association. From time to time, the Association may (but
will be under no obligation to) acquire, through an irrevocable grantor’s trust,
shares of outstanding Stock, in anticipation of distributions under this Plan.
In no event, however, will any Participant have any rights in or against any
shares of Stock so acquired or in any cash or other investments held in such a
trust. All such Stock, cash and/or other investments will constitute general
assets of the Association and may be disposed of by the Association at such time
and for any and all purposes as it may deem appropriate. Participants may not
encumber, assign or otherwise transfer any Deferred Compensation or other
benefits payable under this Plan.

 

IX.

BENEFICIARIES

 

9.1 Designation of Beneficiaries. A Participant may designate as his or her
Beneficiary one or more persons or other entities, by delivering written notice
thereof to the Association; provided, however, that if at the time of election a
Participant is married, no designation of a Beneficiary other than the
Participant’s spouse will be valid, unless consented to in writing by such
spouse. A Participant may change his or her Beneficiary from time to time;
provided that no change will become effective until it is received in writing by
the Association.

 

9.2 Distributions to Beneficiaries. In the event of a Participant’s death, all
benefits due the Participant under this Plan will be paid to the Participant’s
Beneficiary, in the same manner as they would have been paid to the Participant
under Article IV and/or Article VIII, as applicable. If a Participant designates
more than one Beneficiary, the Association may, in its discretion, issue
distribution checks or shares of Stock, as applicable, to the Beneficiaries in
their joint names, and will not be required to issue separate checks or shares
of Stock to more than one Beneficiary. In the absence of a Beneficiary
designation, or in the event no designated Beneficiary is living at the time any
payment is to be made hereunder, then payment will be made to the estate of the
Participant.

 

X.

DISCONTINUANCE; AMENDMENT

 

10.1 Discontinuance. The Association may discontinue this Plan at any time with
respect to Compensation to be earned in the future.

 

10.2 Amendment. The Association may amend, modify or supplement the terms of
this Plan at any time, but only to the extent that any such amendment,
modification or supplement does not act to impair any vested rights of any
Participant, including any vested rights to defer, pursuant to existing
elections, Compensation theretofore earned and deferred in reliance on the
provisions of

 

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this Plan. Except as required for compliance with ERISA, the provisions of
Articles II, III and IV, and any other provisions of the Plan relating to the
allocation of benefits to Participants, may be amended no more frequently than
once every six (6) months.

 

10.3 Change in Control.

 

(a) Distribution of Benefits. In the event of a Change in Control and subject to
the provisions of Section 10.3(b), this Plan will become irrevocable as to the
terms pursuant to which benefits will be distributed to Participants and their
Beneficiaries.

 

(b) Termination of Stock Unit Elections. As of the effective time and date of
any Change in Control, the provisions of Article IV will automatically terminate
and all amounts credited to Stock Unit Accounts will be transferred to the
applicable Special Ledger Accounts, unless provision is made by the Board in
writing in connection with such transaction for the continuance of Article IV,
with appropriate adjustments as to the number and kind of securities covered by
Stock Unit Elections, in which event the provisions of Article IV and the Stock
Unit Accounts will continue in the manner and under the terms so provided. If
Article IV terminates by reason of the occurrence of a Change in Control,
transfers from the Stock Unit Accounts will be effected by valuing the number of
Stock Units to be transferred, based on the reported sales price per share of
the Stock on NASDAQ or such other market on which the Stock is traded over the
last two weeks immediately preceding the Change in Control, and then crediting
the aggregate value thereof to the Participants’ Special Ledger Accounts;
provided, however, that in the event the Change in Control is in the form of a
sale of all or substantially all of the Association’s or Bancorp’s assets,
transfers from the Stock Unit Accounts will be effected by valuing the number of
Stock Units to be transferred, based on the reported sales price per share of
the Stock on NASDAQ or such other market on which the Stock is traded on the
closing date of such sale, and then crediting the aggregate value thereof to the
Participants’ Special Ledger Accounts. Effective as of the date of transfer,
amounts credited to the Participants’ Special Ledger Accounts pursuant to this
Section 10.3(b) will accrue interest pursuant to Article III.

 

XI.

CONSENTS

 

Appended hereto as Exhibit A is a form of consent to be executed by all
Participants. This Plan, as amended from time to time, will be deemed effective,
however, upon its execution by the President and Secretary of the Association,
pursuant to appropriate resolution of the Board as being consistent with the
powers vested in the Association.

 

XII.

NON-ALIENATION OF BENEFITS

 

No right or benefit under this Plan will be subject to anticipation, alienation,
sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same will be null and
void. No right or benefit under this Plan will in any manner be liable for or
subject to the debts, contracts, liabilities or torts of any Participant or his
or her Beneficiary, as the case may be. If any Participant or his or her
Beneficiary becomes bankrupt or

 

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attempts to anticipate, alienate, assign, pledge, encumber or charge any right
or benefit hereunder, then the Association, in its sole and absolute discretion,
may cancel such right or benefit (or any part thereof) to or for the benefit of
such Participant or Beneficiary, in such manner as the Association shall direct.

 

XIII.

GENERAL PROVISIONS

 

13.1 Notices. Any notice or other communication required or permitted to be
given to the Association will be deemed delivered if it is in writing and hand
delivered to the Secretary or Chief Executive Officer of the Association or
deposited in the United States mails, postage prepaid, by certified or
registered mail, return receipt requested, to the address of the Association, as
follows:

 

Quaker City Savings and Loan Association

7021 South Greenleaf Avenue

Whittier, California 90602

Attention: Corporate Secretary

 

Any notice or other communication required or permitted to be given to a
Participant will be deemed delivered if it is in writing and hand delivered to
the Participant or deposited in the United States mails, postage prepaid, by
certified or registered mail, return receipt requested, to the last known
address of the Participant. The Association and all Participants may designate
an address for the giving of written notice hereunder by giving notice of such
address in the manner aforesaid.

 

13.2 Assignment. The rights and obligations of the Association under this Plan
will inure to the benefit of the Association, its successors and assigns, and
will be binding upon the successors and assigns of the Association. The election
by a Participant to defer Compensation under this Plan cannot be assigned by the
Participant.

 

13.3 Waiver. Failure to insist on compliance with any of the terms, covenants or
conditions hereof will not be deemed a waiver of such terms, covenants or
conditions, nor will any waiver or relinquishment of any right or power
hereunder at any one time or times be deemed a waiver or relinquishment of such
rights or powers at any other time or times.

 

13.4 Governing Law. The parties hereto agree that this Plan has been executed in
the State of California and will be governed by the laws thereof to the extent
not preempted by ERISA.

 

13.5 Effect of Headings. The headings of the sections of this Plan are included
for purposes of convenience only and will not affect the construction or
interpretation of any of the provisions of this Plan.

 

13.6 Severability. In the event that any provision of this Plan or any part of
any provision of this Plan will be determined to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability will not affect
the legality, validity or enforceability of any other provision or part hereof.

 

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13.7 Entire Agreement and Modification. This Plan constitutes the entire
deferred compensation plan for directors and Eligible Employees and supersedes
any and all prior and contemporaneous agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. No supplement,
modification or waiver of this Plan or any provisions hereof will be binding
unless executed in writing by the parties to be bound thereby.

 

Executed at Whittier, California, as of March 30, 1999.

 

QUAKER CITY FEDERAL SAVINGS AND LOAN

ASSOCIATION

By:

 

            /s/    FREDERIC R. MCGILL

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

    Frederic R. McGill     President

By:

 

            /s/    KATHRYN M. HENNIGAN

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

    Kathryn M. Hennigan     Corporate Secretary

 

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QUAKER CITY BANK DEFERRED COMPENSATION PLAN AMENDMENT

 

Adopted by the Board of Directors of Quaker City Bank on June 21, 2001.

 

WHEREAS, Section III of the Quaker City Bank Deferred Compensation Plan (amended
and restated March 30, 1999) currently reads as follows: “Except with respect to
amounts credited to Stock Unit Accounts pursuant to Article IV, on June 30 and
December 31 of each year (each an “Accrual Date”), interest will be credited to
each Participant’s Special Ledger Account on all amounts therein, at a rate
equal to 300 basis points over the United States Treasury ten-year note rate
last quoted prior to the Accrual Date on notes falling due ten (10) years
thereafter either on March 1 or August 1, as the case may be, and as reported in
the Wall Street Journal at the close of trading on the date last preceding the
Accrual Date. For example, if the Treasury Notes that mature August 1, 2002 were
quoted as yielding 6.5% per annum on the last trading day prior to June 30,
1992, then the interest to be credited to a Participant’s Special Ledger Account
would be calculated at the rate of 9.5% per annum for the six-month period
concluding with the June 30, 1992 Accrual Date. Interest would be computed and,
once credited to a Special Ledger Account, will then bear interest (together
with all other amounts credited to the Special Ledger Account) to be credited as
of the next Accrual Date”; and

 

WHEREAS, no United States Treasury ten-year note rate on notes falling due on
August 1, 2011 is available.

 

THEREFORE BE IT RESOLVED, that the above Section III of the Quaker City Bank
Deferred Compensation Plan (amended and restated March 30, 1999) is hereby
amended to read “Except with respect to amounts credited to Stock Unit Accounts
pursuant to Article IV, on June 30 and December 31 of each year (each an
“Accrual Date”), interest will be credited to each Participant’s Special Ledger
Account on all amounts therein, at a rate equal to 300 basis points over the
average United States Treasury ten-year note rate as reported in the Federal
Reserve HR-15 report for the month of May or November, with the May rate to be
used for interest accrual for the then-current January through June six-month
period, and the November rate to be used for interest accrual for the
then-current July through December six-month period. Interest would be computed
and, once credited to a Special Ledger Account, will then bear interest
(together with all other amounts credited to the Special Ledger Account) to be
credited as of the next Accrual Date.”

 

Executed at Whittier, California, on June 21, 2001.

 

            /s/    KATHRYN M. HENNIGAN

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

Kathryn M. Hennigan Corporate Secretary

 

 

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