EXHIBIT 10.1

RETIREMENT AND CONSULTING AGREEMENT

THIS RETIREMENT AND CONSULTING AGREEMENT (this “Agreement”) is entered into as
of September 1, 2020 and effective as of October 1, 2020 (“Effective Date”) by
and between Bancorp 34, Inc., a Maryland corporation (the “Company”), and Jill
Gutierrez (“Executive”).
WHEREAS, Executive is retiring from the Company and Bank 34 (the “Bank”) and
therefore resigning as an employee of the Company, the Bank and their
affiliates, effective as of September 30, 2020;
WHEREAS, in order to provide for continuity, and to assure that Executive’s
knowledge and business expertise remain available to the Company and the Bank,
and are not provided to other banks and financial services companies competing
with the Company and the Bank, the Company desires to engage Executive as a
consultant on the terms set forth in this Agreement; and
WHEREAS, Executive desires to provide such consulting services to the Company on
the terms set forth in this Agreement
NOW, THEREFORE, in consideration of the foregoing premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
the Company and Executive hereby agree as follows:
1. Retirement and Resignation as Employee.  Effective as of the close of
business on September 30, 2020 (the “Separation Date”), and as a result of her
retirement, Executive’s status as an employee of the Company, the Bank and all
subsidiaries and affiliates of the Company and the Bank shall terminate, and
Executive hereby resigns from any and all positions held as an employee at the
Company, the Bank, and any subsidiaries and/or affiliates of the Company and the
Bank, including without limitation, Executive’s position as President and Chief
Executive Officer of the Company and the Bank (“Retirement”).
2. Expiration of Employment Agreements.  Executive acknowledges and agrees that
as of the Separation Date, and as a result of her Retirement, the Employment
Agreement dated as of February 9, 2017 by and between Executive and the Company
(the “Company Employment Agreement”) and the Employment Agreement dated as of
February 9, 2017 by and between Executive and the Bank (the “Bank Employment
Agreement”) shall terminate and be of no further force or effect.  Executive
further agrees that as a result of her Retirement, Executive shall not be
entitled to, and hereby waives any claim to, any payments or other benefit under
the Employment Agreement.
3. Benefits Available to Executive as Former Employee.  Executive is entitled to
certain benefits as a former employee of the Company and the Bank pursuant to
the plans and agreements maintained by the Company and the Bank for her benefit
(other than the Company Employment Agreement and the Bank Employment Agreement),
including but not limited to tax-qualified plans and nonqualified plans, equity
plans and such other plans and arrangements that may provide post-retirement
benefits to senior management of the Company and the Bank.

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For the avoidance of doubt, Executive’s unvested equity awards will continue to
vest for so long as she remains in service as a member of the board of directors
of the Company and/or the Bank (each, a “Board”) and her vested stock options
will continue to be exercisable for so long as she remains a member of the
Board(s) and will remain exercisable for the longer of (i) one year after her
retirement date as an Executive or (ii) three months after she is no longer a
member of the Board, provided that her incentive stock options will convert to
non-statutory stock options three months after her termination of employment as
an executive.  In addition, Executive’s Split Dollar Life Insurance Agreement
will remain in effect until Executive terminates service as a member of the
Bank’s Board.  Moreover,  Executive will not be considered to have a “separation
from service” for purposes of benefit commencement under the Deferred
Compensation Agreement, until she terminates service as a consultant, and then
such benefits will be paid in accordance with the terms of such document (i.e.,
such benefits may be delayed until six months after her Consulting Term ends if
Executive is deemed to be a “specified employee”.  Notwithstanding the
foregoing, Executive will be eligible for any executive discretionary bonus paid
for the 2020 year.
4. Board Service.  The parties agree that Executive shall continue as a member
of the Board of each of the Company and the Bank through the annual meeting of
stockholders of the Company following the year ending December 31, 2020 (the
“Annual Meeting”), at which time, unless she has been re-nominated by the
Governance/Nominating Committee and the Company Board and elected by the
Company’s stockholders, her term of office as a director of the Company and the
Bank shall expire.  Except as provided in the foregoing as to the Company and
the Bank, Executive’s service on the boards of directors of all other
subsidiaries of the Company or the Bank shall terminate as of the Separation
Date, and this Agreement shall constitute any required notice of Executive’s
resignation as a director.
5. Consulting Term.  The Company hereby agrees to engage Executive as a
consultant during the period commencing on October 1, 2020 and, unless
terminated earlier pursuant to Section 8, continuing through December 31,2020
(the “Consulting Separation Date”).  The period from October 1, 2020 to the
Consulting Separation Date shall be referred to as the “Consulting Term.”  On or
before the end of the Consulting Term, the Company may choose to extend the
Consulting Term for an additional three-month period in the discretion of the
Chief Executive Officer and upon the acceptance of the Executive, and in the
event of such extension, the new term shall become the Consulting Term.  Any
extension beyond one additional three-month period shall require the approval of
the Board.
6. Consulting Services. 
(a) During the Consulting Term, Executive shall make herself available to
provide such advisory services as are reasonably requested by the Company’s
Board, including, without limitation, advising with respect to: (i) existing and
new customer relationships, (ii) expansion strategies for existing and new
market areas, (iii) strategies for developing and implementing new banking
products and services, (iv) merger and acquisition opportunities, and (v) such
other banking-related services or advice as the Board may reasonably request
(the “Consulting Services”).  In no event shall Executive be required to render
less than eight hours of service a week under this Agreement. Executive agrees
to provide the Consulting Services at such times and locations as the Company
reasonably requires.  Executive agrees to use her best efforts to perform the
Consulting Services in a professional and competent manner.  Executive is
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not hereby being granted nor will she have any authority, apparent or otherwise,
to bind or commit the Company, the Bank or any subsidiary or affiliate of the
Company or the Bank in any manner after the Separation Date.
(b) The Company and Executive acknowledge and agree that because the Consulting
Services required hereunder shall be no less than 20 percent of the average
level of bona fide services performed by Executive as Chief Executive Officer of
the Company and the Bank and their affiliates, in the aggregate, over the
immediately preceding 36-month period during which Executive was an employee of
the Company and the Bank and their affiliates, the Executive has not had a
“Separation from Service” from the Company and the Bank for purposes of Section
409A of the Internal Revenue Code (“Code”) and Treasury Regulation section
1.409A-1(h)(ii).
7. Consulting Compensation and Expense.
(a) In consideration for the services agreed to be performed during the
Consulting Term, Executive shall receive a monthly retainer (the “Retainer”) of
$10,000 which shall be paid monthly in arrears.  During any period that
Executive receives the monthly Retainer set forth herein, Executive shall also
receive fees for services as a member of the board of directors of the Company
and/or the Bank.
(b) Executive shall pay and be responsible for all of her home office expenses,
including postage, printing, and cell phone expenses.  The Company shall
reimburse Executive for other reasonable expenses incurred in connection with
rendering the Consulting Services hereunder in accordance with policies adopted
by the Company from time to time.  The expense reimbursements described herein
are intended to satisfy the requirements for a “reimbursement plan” described in
Treasury Regulation Section 1.409A-3(i)(1)(iv)(A) and shall be administered to
satisfy such requirements.   During the Consulting Term, Executive will continue
to drive the bank-owned Toyota and the Bank will continue to cover the
maintenance and repair expenses of the Toyota.
8. Termination of the Consulting Term.
(a) Death.  Executive’s engagement hereunder shall terminate upon her death.
(b) Disability.  If Executive becomes physically or mentally disabled during the
Term such that she is unable to provide the Consulting Services for a period of
two (2) consecutive months in any three (3) month period (a “Disability”), the
Company, at its option, may suspend the compensation described in Section 7
above until such time as Executive is able to provide the Consulting Services,
at which time, said payments would be reinstated for the remainder of the
Consulting Term, if any.
(c) Termination by Company For Cause. The Company may terminate this Agreement
and Executive’s engagement hereunder as a consultant for Cause.  For purposes of
this Agreement, “Cause” shall mean personal dishonesty, willful misconduct,
breach of fiduciary duty involving personal profit, material breach of the
Company’s or the Bank’s Code of Ethics, willfully engaging in actions that in
the reasonable opinion of the Board will likely cause substantial financial harm
or substantial injury to the business reputation of the Company or the
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Bank, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than routine traffic violations or similar
offenses) or final cease-and-desist or regulatory order, or material breach of
any provision of the Agreement.  For the avoidance of doubt, if the Company
terminates this Agreement for Cause, Executive shall not receive any further
payments of the Retainer.
9. Confidential Information.  Executive recognizes and acknowledges that the
knowledge of the business activities, plans for business activities, and all
other proprietary information of the Company and the Bank, as it may exist from
time to time, is valuable, special and unique assets of the business of the
Company and the Bank.  Executive will not, during or after her Separation Date
or her Consulting Separation Date, whichever is later, disclose any knowledge of
the past, present, planned or considered business activities or any other
similar proprietary information of the Company and the Bank, to any person,
firm, corporation, or other entity for any reason or purpose whatsoever unless
expressly authorized by the Board or required by law.  Notwithstanding the
foregoing, Executive may disclose any knowledge of banking, financial and/or
economic principles, concepts or ideas which are not solely and exclusively
derived from the business plans and activities of the Company and the Bank. 
Further, Executive may disclose information regarding the business activities of
the Company and the Bank, to any bank regulator having regulatory jurisdiction
over the activities of the Company and the Bank pursuant to a formal regulatory
request.  In the event of a breach or threatened breach by Executive of the
provisions of this Section, the Company and the Bank, will be entitled to seek
injunctive relief restraining Executive from disclosing, in whole or in part,
the knowledge of the past, present, planned or considered business activities of
the Company and the Bank, or any other similar proprietary information, or from
rendering any services to any person, firm, corporation, or other entity to whom
such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed.  Nothing herein will be construed as prohibiting the Company and the
Bank, from pursuing any other remedies available to the Company and Bank for
such breach or threatened breach, including the recovery of damages from
Executive.
10. Non-Competition and Non-Solicitation.  Executive hereby covenants and agrees
that, for a period equal to the longer of (i) the period that Executive performs
Consulting Services for the Company or (ii) one year following her Separation
Date, she shall not, without the written consent of the Company, either directly
or indirectly:
(a) solicit, offer employment to, or take any other action intended (or that a
reasonable person acting in like circumstances would expect) to have the effect
of causing any officer or employee of the Company or the Bank, or any of their
respective subsidiaries or affiliates, to terminate her or her employment and
accept employment or become affiliated with, or provide services for
compensation in any capacity whatsoever to, any business whatsoever that
competes with the business of the Company or the Bank;
(b) solicit, provide any information, advice or recommendation or take any other
action intended (or that a reasonable person acting in like circumstances would
expect) to have the effect of causing any customer of the Company or the Bank,
or any subsidiary or affiliate of the Company or the Bank to terminate an
existing business or commercial relationship with the Company, the Bank or any
subsidiary or affiliate of the Company or the Bank; or
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(c) become an officer, employee, consultant, director, independent contractor,
agent, joint venturer, partner, shareholder or trustee of any savings bank,
savings and loan association, savings and loan or savings bank holding company,
credit union, bank or bank holding company (including any affiliate of any of
the foregoing).  Notwithstanding the foregoing, after January 1, 2011, this
restriction shall only apply with respect to a savings bank, savings and loan
association, savings and loan or savings bank holding company, credit union,
bank or bank holding company (including any affiliate of any of the foregoing)
that: (i) has a headquarters or a branch office within any county in which the
Company or the Bank has business operations or has filed an application for
regulatory approval to establish an office (the “Restricted Territory”) or (ii)
otherwise competes with the Company or the Bank.  Notwithstanding anything to
the contrary herein, Executive shall not be prohibited from owning up to one
percent of the outstanding equity securities of a corporation that is publicly
traded on a national securities exchange or in the over-the-counter market so
long as Executive, other than with respect to such ownership, shall not engage
in any activity with such person that otherwise would violate this Section
10(c).
The parties hereto agree that money damages would not be an adequate remedy for
any breach of Section 9 or this Section 10, and any breach of the terms of
Section 9 or in this Section 10 would result in irreparable injury and damage to
the Company for which the Company would not have an adequate remedy at law. 
Therefore, in the event of a breach or a threatened breach of Section 9 or in
this Section 10, the Company, in addition to any other rights and remedies
existing in its favor at law or in equity, shall be entitled to specific
performance or immediate injunctive or other equitable relief from a Court in
order to enforce, or prevent any violations of, the provisions of Section 9 or
this Section 10 (without posting a bond or other security), without having to
prove damages.  The terms of this Section 10 shall not prevent the Company from
pursuing any other available remedies for any breach or threatened breach of
this Agreement.

11. Status.  Executive and Company agree that Executive shall perform the
Consulting Services as an independent contractor and shall have no power or
authority to bind the Company, the Bank or any subsidiary or affiliate thereof. 
Company will report all fees paid to Executive by filing a Form 1099-MISC with
the Internal Revenue Service as required by law.  Because the Consulting
Services will be performed by Executive as an independent contractor and not an
employee, unless otherwise required by the law, Company will not make any
withholdings from any payments hereunder.  Executive agrees to accept exclusive
liability for complying with all applicable local, state and federal laws
governing self-employed individuals, including obligations such as payment of
taxes, social security, disability and other contributions based on the
Retainer.  Except for benefits to which Executive became entitled as an employee
of Company and Bank prior to the Separation Date, Executive will not receive any
employee benefits under any Company-sponsored benefit plans or participate in
Company-sponsored health insurance for the period that Executive serves as a
consultant.  Executive further agrees to indemnify and hold harmless the Company
against any and all liabilities to any taxing authority for any taxes (except
the Company’s share of Social Security, if any), interest or penalties with
regard to or arising from the payment of fees.
12. Release of Claims.
(a) Claims Released.  In consideration of the Company’s obligations hereunder
and acceptance of Executive’s retirement and resignation, Executive, Executive’s
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heirs, successors, and assigns, hereby knowingly and voluntarily release and
forever discharge the Company and its subsidiaries and affiliates, together with
all of their respective current and former officers, directors, consultants,
agents, representatives and employees, and each of their predecessors,
successors and assigns (collectively, the “Releasees”), from any and all debts,
demands, actions, causes of actions, accounts, covenants, contracts, agreements,
claims, damages, omissions, promises, and any and all claims and liabilities
whatsoever, of every name and nature, known or unknown, suspected or
unsuspected, both in law and equity (“Claims”), which Executive ever had, now
has, or may hereafter claim to have against the Releasees by reason of any
matter, cause or thing whatsoever arising from the beginning of time to the time
Executive executes this Agreement (the “General Release”).  This General Release
of Claims shall apply to any Claim of any type, including, without limitation,
any and all Claims of any type that Executive may have arising under the common
law, under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Age Discrimination in Employment Act (“ADEA”), the Older Workers
Benefit Protection Act, the Americans With Disabilities Act, the Family and
Medical Leave Act, the Employee Retirement Income Security Act (“ERISA”), the
Sarbanes-Oxley Act of 2002, the New Mexico Human Rights Act (or any other
similar statute of New Mexico or another jurisdiction that may be applicable in
this case and which is designed to protect employees from prohibited
discrimination) each as amended, and any other Federal, state or local statutes,
regulations, ordinances or common law, or under any policy, agreement, contract,
understanding or promise, written or oral, formal or informal, between any of
the Releasees and Executive, and shall further apply, without limitation, to any
and all Claims in connection with, related to or arising out of Executive’s
employment, or the termination of Executive’s employment, with the Company;
provided, however, that this General Release shall not apply to or impair
(i) claims for vested benefits (excluding any severance or termination benefits,
which are specifically waived hereunder) pursuant to any other Company or Bank
employee benefit plan, as defined in ERISA, in which Executive was a participant
before the Separation Date; (ii) any rights to indemnification Executive may
have under the by-laws of the Company or applicable law; or (iii) any claims
that may arise from any violation of this Agreement. For the purpose of
implementing a full and complete release, Executive understands and agrees that
this Agreement is intended to include all claims, if any, which Executive may
have and which Executive does not now know or suspect to exist in Executive’s
favor against the Company or any of the Releasees and that this Agreement
extinguishes those claims.
(b) Claims not Released.  Nothing in this Agreement prohibits or prevents
Executive from filing a charge with or participating, testifying or assisting in
any investigation, hearing or other proceeding before the U.S. Equal Employment
Opportunity Commission, the National Labor Relations Board or a similar agency
enforcing federal, state or local anti-discrimination laws. However, to the
maximum extent permitted by law, Executive agrees that if such an administrative
claim is made to such an anti-discrimination agency, Executive shall not be
entitled to recover any individual monetary relief or other individual remedies.
In addition, nothing in this Agreement, including but not limited to the release
of claims and the confidentiality clauses, prohibits Executive from: (1)
reporting possible violations of federal law or regulations, including any
possible securities laws violations, to any governmental agency or entity,
including but not limited to the U.S. Department of Justice, the U.S. Securities
and Exchange Commission, the Company’s or the Bank’s primary federal regulator,
the U.S. Congress, any agency Inspector General, or any other applicable agency;
(2) making any other disclosures that are protected under the whistleblower
provisions of federal law or regulations; or
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(3) otherwise fully participating in any federal whistleblower programs,
including but not limited to any such programs managed by the U.S. Securities
and Exchange Commission, the Company’s or the Bank’s primary federal regulator
and/or the Occupational Safety and Health Administration. Moreover, nothing in
this Agreement prohibits or prevents Executive from receiving individual
monetary awards or other individual relief by virtue of participating in such
federal whistleblower programs.
13. Notices.  Any notice, report or payment required or permitted to be given or
made under this Agreement by one party to the other shall be deemed to have been
duly given or made if personally delivered or, if mailed, when mailed by
registered or certified mail, postage prepaid, to the other party at the
following addresses (or at such other address as shall be given in writing by
one party to the other):

 
 
If to Executive:
 
 
 
 
 
To the last known address in the Bank’s personnel records.
 
 
 
 
 
 
 
 
If to the Company:
 
 
 
 
 
Bancorp 34, Inc.
 
 
500 10th Street
 
 
Alamogordo, NM  88310
 
 
Attn:  Randal L. Rabon, Chairman of the Board

 
 
with a copy to:
 
 
 
 
 
Ned Quint, Esquire
 
 
Luse Gorman, PC
 
 
5335 Wisconsin Ave., N.W., Suite 780
 
 
Washington, D.C. 20015

 
14. Entire Agreement.  This Agreement (a) contains the complete and entire
understanding and agreement of Executive and the Company with respect to the
subject matter hereof; and (b) supersedes all prior and contemporaneous
understandings, conditions and agreements, oral or written, express or implied,
respecting the engagement of Executive in connection with the subject matter
hereof.
15. Modification or Waiver.  The provisions of this Agreement may be amended and
waived only with the prior written consent of the Company and Executive.  No
course of dealing between the parties to this Agreement shall be deemed to
affect or to modify, amend or discharge any provision or term of this
Agreement.  No delay on the part of the Company or Executive in the exercise of
any of their respective rights or remedies shall operate as a waiver thereof,
and no single or partial exercise by the Company or Executive of any such right
or remedy shall preclude other or further exercises thereof.  A waiver of right
or remedy on any one occasion shall not be construed as a bar to or waiver of
any such right or remedy on any other occasion.
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16. Severability.  Whenever possible each provision and term of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such applicable law, then such provision or
term shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement.
17. 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 shall be applied against any party.
18. Executive’s Representations.  Executive represents and warrants to the
Company that (i) her execution, delivery and performance of this Agreement does
not and shall not conflict with, or result in the breach of or violation of, any
other agreement, instrument, order, judgment or decree to which she is a party
or by which she is bound, (ii) she is not a party to or bound by any employment
agreement, non-competition agreement or confidentiality agreement with any other
person or entity that would prevent her from performing under this Agreement and
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of the parties hereto,
enforceable in accordance with its term.
19. Counterparts.  This Agreement may be executed and delivered by each party
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original and both of which taken together shall constitute
one and the same agreement.
20. Successors and Assigns.  This Agreement will be binding upon and inure to
the benefit of the Company and any successor to the Company, including without
limitation any persons acquiring directly or indirectly all or substantially all
of the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor shall thereafter
be deemed the “Company” for purposes of this Agreement) and such successor shall
deliver a written affirmation of its obligations hereunder to Executive.  This
Agreement will inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
and legatees, but otherwise will not be assignable, transferable or delegable by
Executive.  This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as otherwise
expressly provided in this Section 20.

21. Governing Law.  The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of New Mexico.

22. Arbitration.  Any dispute or controversy arising under or in connection with
this Agreement, other than a dispute or controversy arising under Sections 9 or
10, shall be settled exclusively by arbitration, conducted before a single
arbitrator sitting in a location selected by the employee within Albuquerque,
New Mexico, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator’s award in any court
having jurisdiction; provided, however, that Executive shall be entitled to seek
specific
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performance of her right to be paid the Retainer during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
23. Delivery by Facsimile.  This Agreement, the agreements referred to herein,
and each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of facsimile or other
electronic means, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person.
24. Survivorship.  Any provision of this Agreement that by its terms is intended
to continue to apply after any termination or expiration of the Consulting Term
or the Agreement shall survive such termination or expiration and continue to
apply in accordance with its terms.
[Signature Page Follows]
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IN WITNESS WHEREOF, Executive and the Company have caused this Agreement to be
duly executed and delivered on the date and year first above written.

 
 
Bancorp 34, Inc.
 
 
 
 
 
 
 
 
By: /s/ Randal L. Rabon 
 
 
Its: Chairman of the Board
 
 
 
 
 
 
 
 
 
 
 
 /s/ Jill Gutierrez 
 
 
Jill Gutierrez

 

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