Exhibit 10.1

 

SOLERA NATIONAL BANCORP, INC.

 

2012 LONG-TERM INCENTIVE PLAN

 

1.              Purpose.

 

The purpose of the Plan is to assist the Company in attracting, retaining,
motivating, and rewarding certain key employees, officers, directors, and
consultants of the Company and its Affiliates and promoting the creation of
long-term value for stockholders of the Company by closely aligning the
interests of such individuals with those of such stockholders. Capitalized terms
not defined elsewhere in the text are defined in Section 19.

 

2.              Administration.

 

(a)                                 Committee Composition; Authority. This Plan
will be administered by the Committee or by the Board acting as the Committee,
and may delegate such administration as set forth in Section 2(a)(xv) below.
Subject to the general purposes, terms and conditions of this Plan, and to the
direction of the Board, the Committee will have full power to implement and
carry out this Plan, except, however, the Board or where applicable, the
Committee will establish the terms for the grant of an Award to Insiders. The
Committee will have the authority to:

 

(i)                                     construe and interpret this Plan, any
Award Agreement and any other agreement or document executed pursuant to this
Plan;

 

(ii)                                  prescribe, amend and rescind rules and
regulations relating to this Plan or any Award;

 

(iii)                               select Eligible Persons to receive Awards;

 

(iv)                              determine the form and terms and conditions,
not inconsistent with the terms of the Plan, of any Award granted hereunder.
Such terms and conditions include, but are not limited to, the Exercise Price,
the time or times when Awards may vest and be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Award or the
Shares relating thereto, based in each case on such factors as the Committee
will determine;

 

(v)                                 determine the number of Shares or other
consideration subject to Awards;

 

(vi)                              determine the Fair Market Value in good faith
and interpret the applicable provisions of this Plan and the definition of Fair
Market Value in connection with circumstances that impact the Fair Market Value,
if necessary;

 

(vii)                           determine whether Awards will be granted singly,
in combination with, in tandem with, in replacement of, or as alternatives to,
other Awards under this Plan or any other incentive or compensation plan of the
Company or any subsidiary of the Company;

 

(viii)                        grant waivers of Plan or Award conditions;

 

(ix)                              determine the vesting, exercisability and
payment of Awards;

 

(x)                                 correct any defect, supply any omission or
reconcile any inconsistency in this Plan, any Award or any Award Agreement;

 

(xi)                              determine whether an Award has been earned;

 

(xii)                           reduce or waive any criteria with respect to
Performance Objectives;

 

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(xiii)                        adjust Performance Goals to take into account
changes in law and accounting or tax rules as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual items, events or
circumstances to avoid windfalls or hardships provided that such adjustments are
consistent with the regulations promulgated under Section 162(m) of the Code
with respect to Eligible Persons whose compensation is subject to Section 162(m)
of the Code;

 

(xiv)                       make all other determinations necessary or advisable
for the administration of this Plan; and

 

(xv)                          delegate any of the foregoing as permitted by
applicable law to one or more executive officers pursuant to a specific
delegation, in which case references to “Committee” in this Section 2(a) will
refer to such delegate(s), except with respect to Insiders.

 

(b)                                 Committee Interpretation and Discretion. Any
determination made by the Committee with respect to any Award will be made in
its sole discretion at the time of grant of the Award or, unless in
contravention of any express term of the Plan or Award, at any later time, and
such determination will be final and binding on the Company and all Persons
having an interest in any Award under the Plan. Any dispute regarding the
interpretation of the Plan or any Award Agreement will be submitted by the
Participant or the Company to the Committee for review. The resolution of such a
dispute by the Committee will be final and binding on the Company and the
Participant. The Committee may delegate to one or more executive officers the
authority to review and resolve disputes with respect to Awards held by
Participants who are not Insiders, in which case references to “Committee” in
this Section 2(b) will refer to such delegate(s).

 

(c)                                  Section 162(m) of the Code and Section 16
of the Exchange Act. When necessary or desirable for an Award to qualify as
“performance-based compensation” under Section 162(m) of the Code, the Committee
will include at least two individuals who are “outside directors” (as defined
under Section 162(m) of the Code) and at least two (or a majority if more than
two individuals then serve on the Committee) such “outside directors” will
approve the grant of such Award and timely determine (as applicable) the
Performance Period and any Performance Objectives upon which vesting or
settlement of any portion of such Award is to be subject. When required by
Section 162(m) of the Code, prior to settlement of any such Award at least two
(or a majority if more than two individuals then serve on the Committee) such
“outside directors” then serving on the Committee will determine and certify in
writing the extent to which such Performance Objectives have been timely
achieved and the extent to which the Shares or cash subject to such Award have
thereby been earned. Awards granted to Insiders must be approved by two or more
“non-employee directors” (as defined in the regulations promulgated under
Section 16 of the Exchange Act). With respect to Participants whose compensation
is subject to Section 162(m) of the Code, and provided that such adjustments are
consistent with the regulations promulgated under Section 162(m) of the Code,
the Committee may adjust the Performance Goals to account for changes in law and
accounting and to make such adjustments as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual items, events or
circumstances to avoid windfalls or hardships, including without limitation (i)
restructurings, discontinued operations, extraordinary items, and other unusual
or non-recurring charges, (ii) an event either not directly related to the
operations of the Company or not within the reasonable control of the Company’s
management, or (iii) a change in accounting standards required by generally
accepted accounting principles.

 

(d)                                 Section 409A. The Committee will take into
account compliance with Section 409A of the Code in connection with any grant of
an Award under the Plan, to the extent applicable.

 

(e)                                  Documentation. The Award Agreement for a
given Award, the Plan and any other documents may be delivered to, and accepted
by, a Participant or any other Person in any manner (including electronic
distribution or posting) that meets applicable legal requirements.

 

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3.              Shares Available Under the Plan.

 

(a)                                 Number of Shares Available. Subject to
Section 10 and any other applicable provisions hereof, the total number of
Shares reserved and available for delivery in connection with Awards under the
Plan as of adoption of the Plan by the Board, is 250,000 Shares plus (i) the
number of Shares authorized for issuance or transfer under the Prior Plan that
are not subject to awards outstanding or previously exercised as of the
Effective Date (reduced by the number of Shares that become subject to grants
under the Prior Plan after the Effective Date), and (ii) to the extent that an
award outstanding under the Prior Plan as of the Effective Date, or granted
under the Prior Plan after the Effective Date, expires or is canceled,
forfeited, settled in cash, or otherwise terminated without a delivery to the
grantee of the full number of shares to which the award related, the number of
shares that are undelivered. Shares delivered under the Plan will consist of
authorized and unissued shares or previously issued Shares reacquired by the
Company on the open market or by private purchase.

 

(b)                                 Lapsed, Returned Awards. Shares subject to
Awards, and Shares issued under the Plan under any Award, will again be
available for grant and issuance in connection with subsequent Awards under this
Plan to the extent such Shares: (i) are subject to issuance upon exercise of an
Option or SAR granted under this Plan but which cease to be subject to the
Option or SAR for any reason other than exercise of the Option or SAR (ii) are
subject to Awards granted under this Plan that are forfeited; or (iii) are
subject to Awards granted under this Plan that otherwise terminate without such
Shares being issued.  To the extent an Award under the Plan is paid out in cash
rather than Shares, such cash payment will not result in reducing the number of
Shares available for issuance under the Plan. Shares used to pay the Exercise
Price of an Award or withheld to satisfy the tax withholding obligations related
to an Award will become available for future grant or sale under the Plan.

 

(c)                                  Award Limits. No Participant will be
eligible to receive more than 150,000 Shares in any calendar year under this
Plan pursuant to the grant of Awards.

 

(d)                                 Minimum Share Reserve. At all times the
Company will reserve and keep available a sufficient number of Shares as will be
required to satisfy the requirements of all outstanding Awards granted under
this Plan.

 

4.              Options.

 

(a)                                 General.  The Committee may grant Options to
Eligible Persons and will determine whether such Options will be Incentive Stock
Options (or ISOs) or Nonqualified Stock Options (or NQSOs), the number of Shares
subject to the Option, the Exercise Price of the Option, the period during which
the Option may vest and be exercised, and all other terms and conditions of the
Option, subject to the terms of this Section 4. The provisions of separate
Awards of Options will be set forth in separate Award Agreements, which
agreements need not be identical.

 

(b)                                 Option Grant. Each Option granted under this
Plan will identify the Option as an ISO or an NQSO. An Option may be, but need
not be, awarded upon satisfaction of such Performance Goals during any
Performance Period as are set out in advance in the Participant’s Award
Agreement. If the Option is being earned upon the satisfaction of Performance
Goals subject to Section 8 hereof, then the Committee will: (x) determine the
nature, length and starting date of any Performance Period for each Option; and
(y) select from among the Performance Objectives to be used to measure the
performance, if any. Performance Periods may overlap and Participants may
participate simultaneously with respect to Options that are subject to different
Performance Goals and other criteria.

 

(c)                                  Date of Grant. The date of grant of an
Option will be the date on which the Committee makes the determination to grant
such Option, or a specified future date. The Award Agreement and a copy of this
Plan will be delivered to the Participant within a reasonable time after the
granting of the Option.

 

(d)                                 Exercise Period and Expiration Period.
Options may be vested and exercisable within the times or upon the conditions as
set forth in the Award Agreement governing such Option; provided, however, that
no Option will be exercisable after the expiration of ten (10) years from the
date the Option is granted; and provided further that no ISO granted

 

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to a Ten Percent Stockholder will be exercisable after the expiration of five
(5) years from the date the ISO is granted. The Committee also may provide for
Options to become exercisable at one time or from time to time, periodically or
otherwise, in such number of Shares or percentage of Shares as the Committee
determines.

 

(e)                                  Exercise Price. The Exercise Price of an
Option will be determined by the Committee when the Option is granted; provided
that: (i) the Exercise Price of an Option will be not less than one hundred
percent (100%) of the Fair Market Value of one Share on the date of grant and
(ii) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not
be less than one hundred ten percent (110%) of the Fair Market Value of one
Share on the date of grant.

 

(f)                                   Payment for Shares. Payment for Shares
acquired pursuant to Options granted hereunder will be made in full upon
exercise of an Option (i) in immediately available funds in United States
dollars, or by certified or bank cashier’s check; (ii) by delivery of a notice
of “net exercise” to the Company, pursuant to which the Participant will receive
the number of Shares underlying the Option so exercised reduced by the number of
Shares equal to the aggregate Exercise Price of the Option divided by the Fair
Market Value on the date of exercise; (iii) by delivery of Shares having a Fair
Market Value equal to the Exercise Price; (iv) by a broker-assisted cashless
exercise in accordance with procedures approved by the Committee, whereby
payment of the Option Exercise Price or tax withholding obligations may be
satisfied, in whole or in part, with Shares subject to the Option by delivery of
an irrevocable direction to a securities broker (on a form prescribed by the
Committee) to sell Shares and to deliver all or part of the sale proceeds to the
Company in payment of the aggregate Exercise Price and, if applicable, the
amount necessary to satisfy the Company’s withholding obligations; or (v) by any
other means approved by the Committee. Anything herein to the contrary
notwithstanding, if the Committee determines that any form of payment available
hereunder would be in violation of Section 402 of the Sarbanes-Oxley Act of
2002, such form of payment will not be available.

 

(g)                                  Termination of Employment or Service.
Except as otherwise provided by the Committee in an Award Agreement:

 

(i)                                     If the Participant is Terminated for any
reason except for Cause or the Participant’s death or Disability, then the
Participant may exercise such Participant’s Options only to the extent that such
Options would have been exercisable by the Participant on the Termination Date
no later than one hundred eighty (180) days after the Termination Date (or such
shorter time period or longer time period not exceeding five (5) years as may be
determined by the Committee, with any exercise beyond three (3) months after the
Termination Date deemed to be the exercise of an NQSO), but in any event no
later than the expiration date of the Options.

 

(ii)                                  If the Participant is Terminated because
of the Participant’s death (or the Participant dies within ninety (90) days
after a Termination other than for Cause or because of the Participant’s
Disability), then the Participant’s Options may be exercised only to the extent
that such Options would have been exercisable by the Participant on the
Termination Date and must be exercised by the Participant’s legal
representative, or authorized assignee, no later than twelve (12) months after
the Termination Date (or such shorter time period not less than six (6) months
or longer time period not exceeding five (5) years as may be determined by the
Committee), but in any event no later than the expiration date of the Options;
provided that the Committee will have the authority, in its sole discretion, to
accelerate the vesting of any such Options.

 

(iii)                               If the Participant is Terminated because of
the Participant’s Disability, then the Participant’s Options may be exercised
only to the extent that such Options would have been exercisable by the
Participant on the Termination Date and must be exercised by the Participant (or
the Participant’s legal representative or authorized assignee) no later than six
(6) months after the Termination Date (with any exercise beyond (A) three
(3) months after the Termination Date when the Termination is for a Disability
that is not a “permanent and total disability” as defined in Section 22(e)(3) of
the Code, or (B) twelve (12) months after the Termination Date when the
Termination is for a Disability that is a “permanent and total disability” as
defined in Section 22(e)(3) of the Code, deemed to be exercise of an NQSO), but
in any event no later than the expiration date of the Options; provided that the
Committee will have the authority, in its sole discretion, to accelerate the
vesting of any such Options.

 

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(iv)                              If the Participant is terminated for Cause,
then the Participant’s Options (whether or not vested) will immediately expire
as of the Termination Date, or at such later time and on such conditions as are
determined by the Committee, but in any event no later than the expiration date
of the Options. Unless otherwise provided in the Award Agreement, Cause will
have the meaning set forth in the Plan.

 

(h)                                 Limitations on ISOs. With respect to Options
granted as ISOs, to the extent that the aggregate Fair Market Value of the
Shares with respect to which such ISOs are exercisable for the first time by the
Participant during any calendar year (under all plans of the Company and any
parent or subsidiary) exceeds $100,000 such Options will be treated as NQSOs.
For purposes of this Section 4(h), ISOs will be taken into account in the order
in which they were granted. The Fair Market Value of the Shares will be
determined as of the time the Option with respect to such Shares is granted. In
the event that the Code or the regulations promulgated thereunder are amended
after the Effective Date to provide for a different limit on the Fair Market
Value of the Shares permitted to be subject to ISOs, such different limit will
be automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment. The Committee may not grant ISOs to any
non-employee directors of the Company.

 

(i)                                     Delegation. The Committee may, to the
extent permitted by applicable law, delegate to one or more executive officers
pursuant to a specific delegation the authority to grant Options to Participants
other than Insiders, subject to the foregoing provisions of this Section 4
(substituting references to “the Committee” by “the Committee’s delegate(s)” as
the context requires).

 

(j)                                    No Disqualification. Notwithstanding any
other provision in this Plan, no term of this Plan relating to ISOs will be
interpreted, amended or altered, nor will any discretion or authority granted
under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any
ISO under Section 422 of the Code.

 

5.              Restricted Stock Awards.

 

(a)                                 General. A Restricted Stock Award may be
granted to Eligible Persons in such form and having such terms and conditions as
the Committee deems appropriate. The provisions of separate Awards of Restricted
Stock will be set forth in separate Award Agreements, which agreements need not
be identical.

 

(b)                                 Vesting and Transferability. Restricted
Stock will vest in such manner, on such date or dates, or upon the achievement
of Performance Goals or other conditions, in each case as may be determined by
the Committee and set forth in an Award Agreement. In addition to any other
restrictions set forth in a Participant’s Award Agreement, until such time as
the Restricted Stock Award has vested pursuant to the terms of the Award
Agreement, the Participant will not be permitted to sell, assign, transfer,
pledge, or otherwise encumber the shares of Restricted Stock.

 

(c)                                  Voting Rights; No Dividend Rights. Unless
otherwise determined by the Committee and set forth in a Participant’s Award
Agreement, to the extent permitted or required by law, as determined by the
Committee, Participants holding shares of Restricted Stock granted hereunder may
be granted the right to exercise full voting rights with respect to those
unvested shares of Restricted Stock. Unless otherwise set forth in a
Participant’s Award Agreement, the Participant will not be entitled to receive
dividends on unvested shares of Restricted Stock.

 

(d)                                 Other Restrictions. The Committee may impose
such other conditions and/or restrictions on any Restricted Stock Awards granted
pursuant to this Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each share of
Restricted Stock, restrictions based upon the achievement of specific
Performance Goals, time-based restrictions on vesting following the attainment
of the Performance Goals, time-based restrictions, and/or restrictions under
applicable laws or under the requirements of any stock exchange or market upon
which such Shares are listed or traded, or holding requirements or sale
restrictions placed on the Shares by the Company upon vesting of such Restricted
Stock Awards. To the extent deemed appropriate by the Committee, the Company may
retain the certificates representing shares of Restricted Stock in the Company’s
possession until such time as all conditions and/or restrictions

 

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applicable to such shares have been satisfied or lapse. Except as otherwise
provided in this Section 5, shares of Restricted Stock covered by each
Restricted Stock Award will become freely transferable by the Participant after
all conditions and restrictions applicable to such shares have been satisfied or
lapse (including satisfaction of any applicable tax withholding obligations).

 

(e)                                  Termination of Employment or Service.
Except as may be set forth in the Participant’s Award Agreement, vesting ceases
on such Participant’s Termination Date (unless determined otherwise by the
Committee).

 

(f)                                   Delegation. The Committee may, to the
extent permitted by applicable law, delegate to one or more executive officers
pursuant to a specific delegation the authority to grant Restricted Stock Awards
to Participants other than Insiders, subject to the foregoing provisions of this
Section 5 (substituting references to “the Committee” by “the Committee’s
delegate(s)” as the context requires).

 

6.              Restricted Stock Units.

 

(a)                                 General. A Restricted Stock Unit or RSU may
be granted to Eligible Persons covering a number of Shares that may be settled
in cash, or by issuance of those Shares. All Awards of RSUs will be made
pursuant to an Award Agreement.

 

(b)                                 Terms of RSU Awards. The Committee will
determine the terms of an RSU Award including, without limitation: (i) the
number of Shares subject to the RSU Award; (ii) the time or times during which
the RSUs may be settled; (iii) the consideration to be distributed on settlement
of the RSUs; and (iv) the effect of the Participant’s Termination on each RSU.
An RSU may be awarded upon satisfaction of such Performance Goals based on
Performance Objectives during any Performance Period as are set out in advance
in the Participant’s Award Agreement. If the RSU is being earned upon
satisfaction of Performance Goals, then the Committee will: (x) determine the
nature, length and starting date of any Performance Period for the RSU;
(y) select from among the Performance Objectives to be used to measure the
performance, if any; and (z) determine the number of Shares deemed subject to
the RSU. Performance Periods may overlap and Participants may participate
simultaneously with respect to RSUs that are subject to different Performance
Periods and different Performance Goals and other criteria.

 

(c)                                  Form and Timing of Settlement. Payment of
earned RSUs will be made as set forth in the Award Agreement; provided that each
such payment will be made no later than March 15th of the calendar year
following the calendar year in which vesting occurs (which payment schedule is
intended to comply with the “short-term deferral” exemption from the application
of Section 409A of the Code). The Committee, in its sole discretion, may settle
earned RSUs in cash, Shares, or a combination of both. A Participant will not be
entitled to dividends, if any, with respect to Shares underlying RSUs prior to
the actual delivery of Shares.

 

(d)                                 Termination of Employment or Service. Except
as may be set forth in the Participant’s Award Agreement, vesting ceases on such
Participant’s Termination Date (unless determined otherwise by the Committee).

 

(e)                                  Delegation. The Committee may, to the
extent permitted by applicable law, delegate to one or more executive officers
pursuant to a specific delegation the authority to grant RSUs to Participants
other than Insiders, subject to the foregoing provisions of this Section 6
(substituting references to “the Committee” by “the Committee’s delegate(s)” as
the context requires).

 

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7.              Stock Appreciation Rights.

 

(a)                                 General. A Stock Appreciation Right or SAR
may be granted to Eligible Persons and such Award may be settled in cash or
Shares. All SARs will be made pursuant to an Award Agreement.

 

(b)                                 Terms of SARs. The Committee will determine
the terms of each SAR including, without limitation: (i) the number of Shares
subject to the SAR; (ii) the Exercise Price and the time or times during which
the SAR may be settled; (iii) the consideration to be distributed on settlement
of the SAR; and (iv) the effect of the Participant’s Termination on each SAR.
The Exercise Price of the SAR will be determined by the Committee when the SAR
is granted. A SAR may be awarded upon satisfaction of such Performance Goals
based on Performance Objectives during any Performance Period as are set out in
advance in the Participant’s Award Agreement. If the SAR is being earned upon
the satisfaction of Performance Goals, then the Committee will: (x) determine
the nature, length and starting date of any Performance Period for each SAR; and
(y) select from among the Performance Objectives to be used to measure the
performance, if any. Performance Periods may overlap and Participants may
participate simultaneously with respect to SARs that are subject to different
Performance Goals and other criteria.

 

(c)                                  Exercise Period and Expiration Date. The
Award Agreement governing the SARs will set forth the expiration date of the
SARs; provided that no SAR will be exercisable after the expiration of ten (10)
years from the date the SAR is granted. The Committee may also provide for SARs
to become exercisable at one time or from time to time, periodically or
otherwise (including, without limitation, upon the attainment during a
Performance Period of Performance Goals based on Performance Objectives), in
such number of Shares or percentage of the Shares subject to the SAR as the
Committee determines.

 

(d)                                 Form of Settlement. Upon exercise of a SAR,
a Participant will be entitled to receive payment from the Company in an amount
determined by multiplying (x) the difference between the Fair Market Value of a
Share on the date of exercise over the Exercise Price multiplied by (y) the
number of Shares with respect to which the SAR is exercised. At the discretion
of the Committee, the payment from the Company for the SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof. The portion
of a SAR being settled may be paid currently or on a deferred basis with such
interest or dividend equivalent, if any, as the Committee determines, provided
that the terms of the SAR and any deferral satisfy the requirements of Section
409A of the Code.

 

(e)                                  Termination of Employment or Service.
Except as may be set forth in the Participant’s Award Agreement, vesting ceases
on such Participant’s Termination Date (unless determined otherwise by the
Committee).

 

(f)                                   Delegation. The Committee may, to the
extent permitted by applicable law, delegate to one or more executive officers
pursuant to a specific delegation the authority to grant SARs to Participants
other than Insiders, subject to the foregoing provisions of this Section 7
(substituting references to “the Committee” by “the Committee’s delegate(s)” as
the context requires).

 

8.              Performance Awards.

 

(a)                                 General. The Committee has the authority, at
the time of grant of any Award described in this Plan (other than Options and
SARs granted with an Exercise Price equal to or greater than the Fair Market
Value per Share on the date of grant), to designate such Award as a Performance
Award in order to qualify such Award as “performance-based compensation” under
Section 162(m) of the Code. In addition, the Committee has the authority to make
an Award of a cash bonus to any Eligible Person and designate such Award as a
Performance Award in order to qualify such Award as “performance-based
compensation” under Section 162(m) of the Code.

 

(b)                                 Eligibility. The Committee will, in its sole
discretion, designate within the first ninety (90) days of a Performance Period
(or, if longer or shorter, within the maximum period allowed under Section
162(m) of the Code) which Participants will be eligible to receive Performance
Awards in respect of such Performance Period. However, designation of a

 

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Participant eligible to receive an Award hereunder for a Performance Period will
not in any manner entitle the Participant to receive payment in respect of any
Performance Award for such Performance Period. The determination as to whether
or not such Participant becomes entitled to payment in respect of any
Performance Award will be decided solely in accordance with the provisions of
this Section 8.

 

(c)                                  Discretion of Committee with Respect to
Performance Awards. With regard to a particular Performance Period, the
Committee has full discretion to select the length of such Performance Period
(provided any such Performance Period will be not less than one fiscal quarter
in duration), the type(s) of Performance Awards to be issued, the Performance
Objectives that will be used to establish the Performance Goal(s), the kind(s)
and/or level(s) of the Performance Goal(s) that is (are) to apply to the Company
and the Performance Formula. Within the first ninety (90) days of a Performance
Period (or, if longer or shorter, within the maximum period allowed under
Section 162(m) of the Code), the Committee will, with regard to the Performance
Awards to be issued for such Performance Period, exercise its discretion with
respect to each of the matters enumerated in the immediately preceding sentence
of this Section 8(c) and record the same in writing.

 

(d)                                 Payment of Performance Awards.

 

(i)                                     Condition to Receipt of Payment. Unless
otherwise provided in the Award Agreement, a Participant must be employed by the
Company or any of its Affiliates on the last day of a Performance Period to be
eligible for payment in respect of a Performance Award for such Performance
Period.

 

(ii)                                  Limitation. A Participant will be eligible
to receive payment in respect of a Performance Award only to the extent that:
(A) the Performance Goals for such period are achieved; and (B) the Performance
Formula as applied against such Performance Goals determines that all or some
portion of such Participant’s Performance Award has been earned for the
Performance Period.

 

(iii)                               Certification. Following the completion of a
Performance Period, the Committee will review and certify in writing whether,
and to what extent, the Performance Goals for the Performance Period have been
achieved and, if so, calculate and certify in writing the amount of the
Performance Awards earned for the period based upon the Performance Formula. The
Committee will then determine the actual size of each Participant’s Performance
Award for the Performance Period and, in so doing, may apply Negative Discretion
in accordance with Section 8(d)(iv) hereof, if and when it deems appropriate.

 

(iv)                              Use of Discretion. In determining the actual
size of an individual Performance Award for a Performance Period, the Committee
may reduce or eliminate the amount of the Performance Award earned under the
Performance Formula in the Performance Period through the use of Negative
Discretion if, in its sole judgment, such reduction or elimination is
appropriate. The Committee will not have the discretion to (A) grant or provide
payment in respect of Performance Awards for a Performance Period if the
Performance Goals for such Performance Period have not been attained or (B)
increase a Performance Award above the maximum amount payable under Section
8(d)(vi) of the Plan.

 

(v)                                 Timing of Award Payments. Performance Awards
granted for a Performance Period will be paid to Participants as soon as
administratively practicable following completion of the certifications required
by this Section 8, but in no event later than March 15th of the calendar year
following the calendar year in which the Performance Period is completed (which
is intended to comply with the “short-term deferral” exemption from the
application of Section 409A of the Code).

 

(vi)                              Maximum Award Payable. Notwithstanding any
provision contained in this Plan to the contrary, the maximum Performance Award
payable to any one Participant under the Plan for a Performance Period
(excluding any Options and SARs) is 50,000 Shares or, in the event such
Performance Award is paid in cash, the equivalent cash value thereof on the
first or last day of the Performance Period to which such Award relates, as

 

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determined by the Committee. The maximum amount that can be paid in any calendar
year to any Participant pursuant to a cash bonus Award described in the last
sentence of Section 8(a) is $150,000.

 

9.              Other Stock-Based Awards.

 

The Committee is authorized, subject to limitations under applicable law, to
grant to Eligible Persons such other Awards that may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based upon or
related to Shares, as deemed by the Committee to be consistent with the purposes
of the Plan. The Committee may also grant Shares as a bonus (whether or not
subject to any vesting requirements or other restrictions on transfer), and may
grant other awards in lieu of obligations of the Company or an Affiliate of the
Company to pay cash or deliver other property under this Plan or under other
plans or compensatory arrangements, subject to such terms as will be determined
by the Committee. The terms and conditions applicable to such Awards will be
determined by the Committee and evidenced by Award Agreements, which agreements
need not be identical.

 

10.       Adjustments for Recapitalizations and Change in Control Events; Change
in Control.

 

(a)                                 Capitalization Adjustments. The aggregate
number of Shares that may be granted or purchased pursuant to Awards (as set
forth in Section 3 hereof), the maximum number of Shares that may be issued to
an individual or to an Eligible Person in any one calendar year set forth in
Sections 3(c) and 8(d)(vi), the number of Shares covered by each outstanding
Award, and the price per Share or Exercise Price in each such Award will be
equitably and proportionally adjusted or substituted, as determined by the
Committee, as to the number, price, or kind of a Share or other consideration
subject to such Awards (i) in the event of changes in the outstanding Shares or
in the capital structure of the Company by reason of stock dividends, stock
splits, reverse stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the date of grant of any such Award (including
any Change in Control); or (ii) in the event of any change in applicable laws or
circumstances that results in or could result in, in either case, as determined
by the Committee in its sole discretion, any substantial dilution or enlargement
of the rights intended to be granted to, or available for, Participants in the
Plan.

 

(b)                                 Adjustments Upon Change in Control. Upon the
occurrence of a Change in Control, the Board or the Committee, in its sole
discretion, without the consent of any Participant or holder of an Award, and on
such terms and conditions as it deems appropriate, may take any one or more of
the following actions in connection with such Change in Control:

 

(i)                                     provide for either (A) the termination
of any Award in exchange for an amount of cash, if any, equal to the amount that
would have been attained upon the realization of the Participant’s rights (and,
for the avoidance of doubt, if as of the date of the occurrence of such
transaction or event, the Board determines in good faith that no amount would
have been attained upon the realization of the Participant’s rights, then such
Award may be terminated by the Board without payment) or (ii) the replacement of
such Award with other rights or property selected by the Board in its sole
discretion;

 

(ii)                                  provide that such Award be assumed by a
successor or survivor entity, or a parent or subsidiary thereof, or be exchanged
for similar rights or awards covering the equity of the successor or survivor,
or a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of equity interests and prices;

 

(iii)                               make adjustments in the number and type of
Shares (or other securities or property) subject to outstanding Awards, and in
the number and kind of outstanding Awards or in the terms and conditions of, and
the vesting criteria included in, outstanding Awards, or both;

 

(iv)                              provide that such Award be payable,
notwithstanding anything to the contrary in the Plan or the applicable Award
Agreement; and/or

 

9

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(v)                                 provide that the Award cannot become payable
after such event, i.e., will terminate upon such event.

 

Notwithstanding the foregoing, any such action contemplated under this Section
10(b) will be effective only to the extent that such action will not cause any
Award that is designed to satisfy Section 409A of the Code to fail to satisfy
such section.

 

(c)                                  Effect of a Change in Control. Unless
otherwise provided in an Award Agreement, notwithstanding any provision of the
Plan to the contrary:

 

(i)                                     In the event of a Change in Control, all
Options and SARs will become immediately exercisable with respect to 100% of the
Shares subject to such Options or SARs, and any unvested Restricted Stock Awards
and RSUs will be immediately vested and fully earned.

 

(ii)                                  With respect to Performance Awards, in the
event of a Change in Control, all incomplete Performance Periods in respect of
such Award in effect on the date the Change in Control occurs will end on the
date of such Change in Control and the Committee will (A) determine the extent
to which Performance Goals with respect to each such Performance Period have
been met based upon such audited or unaudited financial information then
available as it deems relevant and (B) may cause to be paid to the applicable
Participant partial or full Awards with respect to Performance Goals for each
such Performance Period based upon the Committee’s determination of the degree
of attainment of Performance Goals or, if not determinable, assuming that the
applicable “target” levels of performance have been attained, or on such other
basis determined by the Committee.

 

11.       Privileges of Stock Ownership; Share Restrictions.

 

No Participant will have any of the rights of a stockholder with respect to any
Awards until the Shares subject to the Award are issued to the Participant.
After Shares are issued to the Participant, the Participant will be a
stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased by the Company.

 

12.       Transferability.

 

Unless determined otherwise by the Committee pursuant to this Section 12, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by (a) a will or (b) by the laws of descent or
distribution.  If the Committee makes an Award transferable, including, without
limitation, by instrument to an inter vivos or testamentary trust in which the
Awards are to be passed to beneficiaries upon the death of the trustor (settlor)
or by gift or domestic relations order to a Permitted Transferee, such award may
contain such additional terms and conditions as the Committee deems appropriate.
All Awards will be exercisable: (i) during the Participant’s lifetime only by
(A) the Participant, or (B) the Participant’s guardian or legal representative;
(ii) after the Participant’s death, by the legal representative of the
Participant’s heirs or legatees; and (iii) in the case of all awards except
ISOs, by a Permitted Transferee (for awards made transferable by the Committee)
or such Person’s guardian or legal representative.

 

13.       No Obligation to Employ.

 

Nothing in this Plan or any Award granted under this Plan will confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company or of any of its Affiliates
or limit in any way the right of the Company or of any of its Affiliates to
terminate Participant’s employment or other relationship at any time.

 

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14.       Compliance with Laws.

 

(a)                                 General. An Award will not be effective
unless such Award is in compliance with all applicable federal and state
securities and exchange control laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to:
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Shares with
the Securities and Exchange Commission or to effect compliance with the
registration, qualification or listing requirements of any foreign or state
securities laws, exchange controls, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.

 

(b)                                 Federal Deposit Insurance Corporation.
Notwithstanding any other provision herein to the contrary, this Plan will be
administered in accordance with the provisions of the Federal Deposit Insurance
Corporation’s Statement of Policy on Applications for Deposit Insurance as such
policy relates to stock benefit plans.

 

(c)                                  Minimum Capital Requirements.
Notwithstanding any provision of this Plan or any Award Agreement to the
contrary, all Options and SARs granted under the Plan will expire, to the extent
not exercised, within 45 days following the receipt of notice from the Bank’s
primary federal regulator (“Regulator”) that: (i) the Bank has not maintained
its minimum capital requirements (as determined by the Regulator); and (ii) the
Regulator is requiring termination or forfeiture of Awards. Upon receipt of such
notice from the Regulator, the Company will promptly notify each Participant
that all Options and SARs under this Plan have become fully exercisable and
vested to the full extent of such Options and SARs and that the Participant must
exercise any Options and SARs granted to him or her prior to the end of the
45-day period or such earlier period as may be specified by the Regulator or
forfeit such Options and SARs.  In case of forfeiture due to termination of
Options and SARs by the Regulator, no Participant will have a cause of action,
of any kind or nature, with respect to the forfeiture against the Company or any
of its Affiliates.  Neither the Company nor any of its Affiliates will be liable
to any Participant due to the failure or inability of the Company or any of its
Affiliates to provide adequate notice to the Participant.

 

15.       Withholding Taxes.

 

(a)                                 Withholding Generally. Whenever Shares are
to be issued in satisfaction of Awards granted under this Plan, the Company may
require the Participant to remit to the Company, or to any Affiliate of the
Company employing the Participant, an amount sufficient to satisfy applicable
U.S. federal, state, and local withholding tax requirements or any other tax
liability legally due from the Participant prior to the delivery of Shares
pursuant to exercise or settlement of any Award. Whenever payments in
satisfaction of Awards granted under this Plan are to be made in cash, such
payment will be net of an amount sufficient to satisfy applicable U.S. federal,
state, and local withholding tax requirements or any other tax liability legally
due from the Participant.

 

(b)                                 Withholding of Shares. The Committee, as
permitted by applicable law, in its sole discretion and pursuant to such
procedures as it may specify from time to time and to limitations of local law,
may require or permit a Participant to satisfy such tax withholding obligation
or any other tax liability legally due from the Participant, in whole or in part
by (without limitation) (i) paying cash, (ii) electing to have the Company
withhold otherwise deliverable cash or Shares having a Fair Market Value equal
to the minimum statutory amount required to be withheld, or (iii) delivering to
the Company already-owned Shares having a Fair Market Value equal to the minimum
amount required to be withheld. The Fair Market Value of the Shares to be
withheld or delivered will be determined as of the date that the taxes are
required to be withheld.

 

11

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16.       Amendment of the Plan or Awards.

 

(a)                                 Amendments. The Board and the Committee may
amend the Plan or any terms of any one or more Awards at any time and from time
to time.

 

(b)                                 Stockholder Approval; No Impairment.
Notwithstanding anything herein to the contrary, no amendment to the Plan or any
Award under the Plan will be effective without stockholder approval to the
extent that such approval is required pursuant to applicable law or the
applicable rules of each national securities exchange on which the Shares are
listed. Additionally, no amendment to the Plan or any Award under the Plan will
impair a Participant’s rights under any Award unless the Participant consents in
writing (it being understood that no action taken by the Board or the Committee
that is expressly permitted under the Plan, including, without limitation, any
actions described in Section 10 hereof, will constitute an amendment to the Plan
or an Award under the Plan for such purpose). Notwithstanding the foregoing,
subject to the limitations of applicable law, if any, and without an affected
Participant’s consent, the Board or the Committee may amend the terms of the
Plan or any one or more Awards under the Plan from time to time as necessary to
bring such Awards into compliance with Section 409A of the Code.

 

(c)                                  No Repricing of Awards Without Stockholder
Approval. Notwithstanding Sections 16(a) above, or any other provision of the
Plan, the repricing of Options or SARs is not permitted without stockholder
approval. For this purpose, a “repricing” means any of the following (or any
other action that has the same effect as any of the following): (i) changing the
terms of an Option or SAR to lower its Exercise Price or base price (other than
on account of capital adjustments resulting from stock splits, etc., as
described in Section 10(a)); (ii) any other action that is treated as a
repricing under generally accepted accounting principles; and (iii) repurchasing
for cash or canceling an Option or SAR in exchange for another Award at a time
when its Exercise Price or base price is greater than the Fair Market Value of
the underlying Shares, unless the cancellation and exchange occurs in connection
with a Change in Control event set forth in Section 10.

 

17.       Termination or Suspension of the Plan.

 

The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan will terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board. No Awards may be
granted under the Plan while the Plan is suspended or after it is terminated;
provided, however, that following any suspension or termination of the Plan, the
Plan will remain in effect for the purpose of governing all Awards then
outstanding hereunder until such time as all Awards under the Plan have been
terminated, forfeited, or otherwise canceled, or earned, exercised, settled, or
otherwise paid out, in accordance with their terms.

 

18.       Miscellaneous.

 

(a)                                 Certificates. Shares acquired pursuant to
Awards granted under the Plan may be evidenced in such a manner as the Committee
will determine. If certificates representing Shares are registered in the name
of the Participant, the Committee may require that (i) such certificates bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Shares, (ii) the Company retain physical possession of the
certificates, and (iii) the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Shares. Notwithstanding the foregoing, the
Committee may determine, in its sole discretion, that the Shares will be held in
book-entry form rather than delivered to the Participant pending the release of
any applicable restrictions.

 

(b)                                 Clawback/Recoupment Policy. Notwithstanding
anything contained herein to the contrary, all Awards granted under the Plan
will be and remain subject to any incentive compensation clawback or recoupment
policy currently in effect or as may be adopted by the Board and, in each case,
as may be amended from time to time. No such policy adoption or amendment will
in any event require the prior consent of any Participant.

 

(c)                                  Effective Date of the Plan. The Plan will
become effective as of the Effective Date, but no Award shall be exercised (or,
in the case of a Restricted Stock Award, shall be granted) unless and until the
Plan has been approved by

 

12

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the stockholders of the Company, which approval shall be within twelve (12)
months before or after the date the Plan is adopted by the Board.

 

(d)                                 No Liability of Committee Members. No member
of the Committee will be liable personally by reason of any contract or other
instrument executed by such member or on his behalf in his capacity as a member
of the Committee or for any mistake of judgment made in good faith, and the
Company will indemnify and hold harmless each member of the Committee and each
other employee, officer, or director of the Company to whom any duty or power
relating to the administration or interpretation of the Plan may be allocated or
delegated, against all costs and expenses (including legal fees) and liabilities
(including sums paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan, unless arising out of such Person’s
own fraud or willful misconduct; provided, however, that approval of the Board
will be required for the payment of any amount in settlement of a claim against
any such Person. The foregoing right of indemnification will not be exclusive of
any other rights of indemnification to which such Persons may be entitled under
the Company’s certificate of incorporation or bylaws, each as may be amended
from time to time, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.

 

(e)                                  Non-Exclusivity of the Plan. Neither the
adoption of this Plan by the Board, the submission of this Plan to the
stockholders of the Company for approval, nor any provision of this Plan will be
construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock awards and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

 

(f)                                   Use of Proceeds. The proceeds received
from the sale of Shares pursuant to Awards or upon exercise thereof, will be
used for general corporate purposes.

 

(g)                                  Governing Law. The Plan will be governed by
and construed in accordance with the internal laws of the State of Delaware
without regard to its conflict of laws rules, except as superseded by applicable
Federal law.

 

(h)                                 No Trust or Fund Created. Neither the Plan
nor an Award will create or be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Company and a Participant or
any other Person. To the extent that a Participant acquires the right to receive
payments from the Company pursuant to an Award, such right will be no greater
than the right of any general unsecured creditor of the Company.

 

(i)                                     Reliance on Reports. Each member of the
Committee and each member of the Board will be fully justified in relying,
acting, or failing to act, and will not be liable for having so relied, acted,
or failed to act in good faith, upon any report made by the independent public
accountant of the Company and its Affiliates and upon any other information
furnished in connection with the Plan by any Person or Persons other than such
member. In no event will any Person who is or has been a member of the Board, be
liable for any determination made or other action taken or any omission to act
in reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good faith.

 

(j)                                    Insider Trading Policy. Each Participant
who receives an Award will comply with any policy adopted by the Company from
time to time covering transactions in the Company’s securities by employees,
officers and directors of the Company and its Affiliates.

 

(k)                                 Titles and Headings. The titles and headings
of the sections in the Plan are for convenience of reference only, and in the
event of any conflict, the text of the Plan, rather than such titles or
headings, will control.

 

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19.       Definitions.

 

As used in this Plan, and except as elsewhere defined herein, the following
terms will have the following meanings:

 

(a)                                 “Affiliate” means, with respect to any
Person, any other Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such Person.

 

(b)                                 “Award” means any Option, Restricted Stock,
RSU, SAR, Performance Award, or other Share-based award granted under the Plan.

 

(c)                                  “Award Agreement” means, with respect to
each Award, the written or electronic agreement between the Company and the
Participant setting forth the terms and conditions of the Award, which will be
in substantially a form (which need not be the same for each Participant) that
the Committee (or in the case of Award Agreements that are not used by Insiders,
the Committee’s delegate(s)) has from time to time approved, and will comply
with and be subject to the terms and conditions of this Plan.

 

(d)                                 “Bank” means Solera National Bank, a
national bank.

 

(e)                                  “Board” means the Board of Directors of the
Company.

 

(f)                                   “Cause” means, in the absence of an Award
Agreement or employment or other service agreement between a Participant and the
Service Recipient otherwise defining Cause,

 

(i)                                     a Participant’s conviction of or
indictment for any crime (whether or not involving the Company or its
Affiliates) (A) constituting a felony or (B) that has, or could reasonably be
expected to result in, an adverse impact on the performance of the Participant’s
duties to the Service Recipient, or otherwise has, or could reasonably be
expected to result in, an adverse impact on the business or reputation of the
Company or its Affiliates;

 

(ii)                                  conduct of the Participant, in connection
with his or her employment, that has resulted, or could reasonably be expected
to result, in material injury to the business or reputation of the Company or
its Affiliates;

 

(iii)                               any material violation of the policies of
the Company or its Affiliates, including but not limited to those relating to
sexual harassment or the disclosure or misuse of confidential information, or
those set forth in the manuals or statements of policy of the Company or its
Affiliates; or

 

(iv)                              willful neglect in the performance of the
Participant’s duties for the Service Recipient or willful or repeated failure or
refusal to perform such duties.

 

In the event that there is an Award Agreement or employment or other service
agreement between a Participant and the Service Recipient defining Cause,
“Cause” will have the meaning provided in such agreement, and a Termination by
the Service Recipient for Cause hereunder will not be deemed to have occurred
unless all applicable notice and cure periods in such agreement are complied
with.

 

(g)                                  “Change in Control” means the happening of
any of the following events:

 

(i)                                     the acquisition by any one Person, or
more than one Person acting as a group, of ownership of Shares of the Company
that, together with Shares held by such Person or group, constitutes more than
fifty percent (50%) of the total Fair Market Value or total voting power of the
Shares of the Company;

 

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(ii)                                  the acquisition by any one Person, or more
than one Person acting as a group, of all or substantially all of the Company’s
assets during the 12-month period ending on the date of the most recent
acquisition.  For purposes of this Plan, “substantially all” means at least 60%
of the assets of the Company immediately before such acquisition(s); or

 

(iii)                               when a majority of the members of the Board
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board before the
date of the appointment or election.

 

The events described in this Section 19(g) will be interpreted to mean only
events that constitute a change in control event under Treasury Regulation
§1.409A-3(a)(5).

 

(h)                                 “Code” means the Internal Revenue Code of
1986, as amended from time to time, including regulations thereunder and
successor provisions and regulations thereto.

 

(i)                                     “Committee” means the Compensation
Committee of the Board or such other committee consisting of two or more
individuals appointed by the Board to administer the Plan and each other
individual or committee of individuals designated to exercise authority under
the Plan.

 

(j)                                    “Company” means Solera National
Bancorp, Inc., a Delaware corporation, or any successor corporation.

 

(k)                                 “Disability” will, in the absence of an
Award Agreement or employment or other service agreement between a Participant
and the Service Recipient otherwise defining Disability, have the same meaning
as set forth in Treasury Regulation § 1.409A-3(i)(4). In the event that there is
an Award Agreement or employment or other service agreement between a
Participant and the Service Recipient defining the term disability, “Disability”
will have the meaning provided in such agreement.

 

(l)                                     “Effective Date” means the date as of
which this Plan is adopted by the Board.

 

(m)                             “Eligible Person” means (i) each employee of the
Company or of any of its Affiliates, including each such employee who may also
be a director of the Company or any of its Affiliates; (ii) each non-employee
director of the Company or of any of its Affiliates; (iii) each other natural
Person who provides substantial services to the Company or of any of its
Affiliates and who is designated as eligible by the Committee; and (iv) any
natural Person who has been offered employment or service by the Company or of
any of its Affiliates; provided that such prospective service provider may not
receive any payment or exercise any right relating to an Award until such Person
has commenced employment or service with the Company or its Affiliates. An
employee on an approved leave of absence may be considered as still in the
employ of the Company or its Affiliates for purposes of eligibility for
participation in the Plan.

 

(n)                                 “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, including rules and regulations
thereunder and successor provisions and rules and regulations thereto.

 

(o)                                 “Exercise Price” means, with respect to an
Option, the price at which a holder may purchase the Shares issuable upon
exercise of an Option and with respect to a SAR, the price at which the SAR is
granted to the holder thereof.

 

(p)                                 “Expiration Date” means the date upon which
the term of an Option or SAR expires, as determined under Sections 4(d) or
7(c) hereof, as applicable.

 

(q)                                 “Fair Market Value” means (i) during such
time as the Shares are registered under Section 12 of the Exchange Act, the
closing sales price of the Shares (or the closing bid, if not sales were
reported) as quoted by an established stock exchange or automated quotation
system on the day for which such value is to be determined, or, if there was no
quoted price for

 

15

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such day, then for the last preceding business day on which there was a quoted
price as reported in The Wall Street Journal or such other sources as the Board
or Committee deems reliable, or (ii) during any such time as the Shares are not
listed upon an established stock exchange or automated quotation system, the
mean between dealer “bid” and “ask” prices of the Shares in the over-the-counter
market on the day for which such value is to be determined, as reported by the
National Association of Securities Dealers, Inc., in The Wall Street Journal or
such other source as the Board or the Committee deems reliable, or (iii) during
any such time as the Shares cannot be valued pursuant to (i) or (ii) above,
(A) with respect to ISOs, the fair market value of the Shares as determined in
good faith by the Board or the Committee within the meaning of Section 422 of
the Code or (B) the fair market value of the Shares as determined in good faith
by the Board or the Committee using a “reasonable application of a reasonable
valuation method” within the meaning of Treasury Regulation §
1.409A-1(b)(5)(iv)(B) or other applicable valuation rules under the Code or
other applicable law.

 

(r)                                    “Incentive Stock Option” or “ISO” means
an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code.

 

(s)                                   “Insider” means an officer or director of
the Company or any other Person whose transactions in Shares are subject to
Section 16 of the Exchange Act.

 

(t)                                    “Negative Discretion” means the
discretion authorized by the Plan to be applied by the Committee to eliminate or
reduce the size of a Performance Award in accordance with Section 8(d)(iv) of
the Plan; provided that the exercise of such discretion would not cause the
Performance Award to fail to qualify as “performance-based compensation” under
Section 162(m) of the Code.

 

(u)                                 “Nonqualified Stock Option” or “NQSO” means
an Option not intended to qualify as an ISO.

 

(v)                                 “Option” means a conditional right, granted
to a Participant under Section 4 hereof, to purchase Shares at a specified
Exercise Price during specified time periods.

 

(w)                               “Participant” means an Eligible Person who has
been granted an Award under the Plan, or if applicable, such other Person who
holds an Award.

 

(x)                                 “Performance Award” means an Award granted
to a Participant under Section 8 hereof, which Award is subject to the
achievement of Performance Goals during a Performance Period. A Performance
Award will be designated as a “Performance Share” or a “Performance Unit” at the
time of grant.

 

(y)                                 “Performance Formula” means, for a
Performance Period, the one or more objective formulas applied against the
relevant Performance Goal to determine, with regard to the Performance Award of
a particular Participant, whether all, some portion but less than all, or none
of the Performance Award has been earned for the Performance Period.

 

(z)                                  “Performance Goals” means, for a
Performance Period, the one or more goals established by the Committee for the
Performance Period based upon the Performance Objectives. The Committee is
authorized at any time during the first ninety (90) days of a Performance Period
(or, if longer or shorter, within the maximum period allowed under
Section 162(m) of the Code), or at any time thereafter (but only to the extent
the exercise of such authority after such period would not cause the Performance
Awards granted to any Participant for the Performance Period to fail to qualify
as “performance-based compensation” under Section 162(m) of the Code), in its
sole and absolute discretion, to adjust or modify the calculation of a
Performance Goal for such Performance Period to the extent permitted under
Section 162(m) of the Code in order to prevent the dilution or enlargement of
the rights of Participants based on the following events: (i) asset write-downs;
(ii) litigation or claim judgments or settlements; (iii) the effect of changes
in tax laws, accounting principles, or other laws or regulatory rules affecting
reported results; (iv) any reorganization and restructuring programs;
(v) extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 (or any successor or pronouncement thereto) and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual

 

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report to stockholders for the applicable year; (vi) acquisitions or
divestitures; and (vii) any other specific unusual or nonrecurring events, or
objectively determinable category thereof.

 

(aa)                          “Performance Objectives” means any of the
objectives selected by the Committee and specified in an Award Agreement, from
among the following objective measures, either individually, alternatively or in
any combination, applied to the Company as a whole or any business unit or
subsidiary, either individually, alternatively, or in any combination, on a GAAP
or non-GAAP basis, and measured, to the extent applicable on an absolute basis
or relative to a pre-established target, to determine whether the Performance
Goals established with respect to applicable Awards have been satisfied:

 

(i)                                                             revenue;

(ii)                                                          net revenue;

(iii)                                                       earnings (which may
include earnings before interest and taxes, earnings before taxes, and net
earnings);

(iv)                                                      “efficiency ratio”
determined as the ratio of total non-interest operating expenses (less
amortization of intangibles) divided by total revenues (less net security
gains);

(v)                                                         non-interest income
to total revenue ratio;

(vi)                                                      net interest margin;

(vii)                                                   credit quality measures
(including non-performing asset ratio, net charge-off ratio, and reserve
coverage of non-performing loans);

(viii)                                                risk measures;

(ix)                                                      loan growth;

(x)                                                         deposit growth;

(xi)                                                      non-interest income
growth;

(xii)                                                   interest income;

(xiii)                                                operating income;

(xiv)                                               operating margin;

(xv)                                                  operating profit;

(xvi)                                               controllable operating
profit, or net operating profit;

(xvii)                                            net profit;

(xviii)                                         gross margin;

(xix)                                               operating expenses or
operating expenses as a percentage of revenue;

(xx)                                                  net income;

(xxi)                                               earnings per share;

(xxii)                                            total stockholder return;

(xxiii)                                         market share;

(xxiv)                                        return on assets or net assets;

(xxv)                                           the Company’s stock price;

(xxvi)                                        growth in stockholder value
relative to a pre-determined index;

(xxvii)                                     return on equity;

(xxviii)                                  return on invested capital;

(xxix)                                        cash flow (including free cash
flow or operating cash flows)

(xxx)                                           cash conversion cycle;

(xxxi)                                        economic value added;

 

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(xxxii)                                     individual confidential business
objectives;

(xxxiii)                                  credit rating;

(xxxiv)                                 strategic plan development and
implementation;

(xxxv)                                    succession plan development and
implementation;

(xxxvi)                                 improvement in workforce diversity;

(xxxvii)                              tangible common equity or return on
tangible common equity

(xxxviii)                           customer indicators; and

(xxxix)                                 attainment of objective operating goals
and employee metrics.

 

The Committee may, in recognition of unusual or non-recurring items such as
acquisition-related activities or changes in applicable accounting rules,
provide for one or more equitable adjustments (based on objective standards) to
the Performance Objectives to preserve the Committee’s original intent regarding
the Performance Objectives at the time of the initial Award grant. It is within
the sole discretion of the Committee to make or not make any such equitable
adjustments.

 

(bb)                          “Performance Period” means the period of service
determined by the Committee (or its delegate(s), with respect to Participants
who are not Insiders) during which fiscal quarters or years of service or
performance is to be measured for the Award.

 

(cc)                            “Permitted Transferee” means any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships) of the Eligible Person, any Person sharing the Eligible Person’s
household (other than a tenant or employee), a trust in which these Persons (or
the Eligible Person) have more than 50% of the beneficial interest, a foundation
in which these Persons (or the Eligible Person) control the management of
assets, and any other entity in which these Persons (or the Eligible Person) own
more than 50% of the voting interests.

 

(dd)                          “Person” means any individual, corporation,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, or other entity.

 

(ee)                            “Plan” means this Solera National Bancorp, Inc.
2012 Long-Term Incentive Plan.

 

(ff)                              “Prior Plan” means the Solera National
Bancorp, Inc. 2007 Stock Incentive Plan as amended April 17, 2008.

 

(gg)                            “Regulator” has the meaning set forth in
Section 14(c) of this Plan.

 

(hh)                          “Restricted Stock” means Shares that are subject
to restrictions.

 

(ii)                                  “Restricted Stock Award” means an Award
granted to a Participant pursuant to Section 5 or Section 8 of the Plan.

 

(jj)                                “Restricted Stock Unit” or “RSU” means an
Award granted to a Participant pursuant to Section 6 or Section 8 hereof, and
which is a notional unit representing the right to receive one Share (or cash in
an amount equal to the Fair Market Value of one Share for each RSU, if so
determined by the Committee) for each RSU on a specified settlement date.

 

(kk)                          “Securities Act” means the Securities Act of 1933,
as amended from time to time, including rules and regulations thereunder and
successor provisions and rules and regulations thereto.

 

(ll)                                  “Service Recipient” means, with respect to
a Participant holding a given Award, either the Company or an Affiliate of the
Company by which the original recipient of such Award is, or following a
Termination was

 

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most recently, principally employed or to which such original recipient
provides, or following a Termination was most recently providing, services, as
applicable.

 

(mm)                  “Shares” means the Company’s common stock, par value $0.01
per share, and such other securities as may be substituted for such stock
pursuant to Section 10 hereof.

 

(nn)                          “Stock Appreciation Right” or “SAR” means an Award
granted to a Participant pursuant to Section 7 or Section 8 hereof, and which is
conditional right to receive an amount equal to the value of the appreciation in
the Shares over a specified period. Except in the event of extraordinary
circumstances, as determined in the sole discretion of the Committee, or
pursuant to Section 10(b) above, SARs will be settled in Shares.

 

(oo)                          “Ten Percent Stockholder” means a Person who, at
the time the Award is granted, owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates.

 

(pp)                          “Termination” means, for purposes of this Plan
with respect to a Participant, the termination of a Participant’s employment or
service, as applicable, with Service Recipient; provided, however, that, if so
determined by the Committee at the time of any change in status in relation to
the Service Recipient (e.g., a Participant ceases to be an employee and begins
providing services as a consultant, or vice versa), such change in status will
not be deemed a Termination hereunder. Unless otherwise determined by the
Committee, in the event that any Service Recipient ceases to be an Affiliate of
the Company (by reason of sale, divestiture, spin-off, or other similar
transaction), unless a Participant’s employment or service is transferred to
another entity that would constitute a Service Recipient immediately following
such transaction, such Participant will be deemed to have suffered a Termination
hereunder as of the date of the consummation of such transaction.
Notwithstanding anything herein to the contrary, a Participant’s change in
status in relation to the Service Recipient will not be deemed a Termination
hereunder with respect to any Awards constituting nonqualified deferred
compensation subject to Section 409A of the Code that are payable upon a
Termination unless such change in status constitutes a “separation from service”
within the meaning of Section 409A of the Code. Any payments in respect of an
Award constituting nonqualified deferred compensation subject to Section 409A of
the Code that is payable upon a Termination will be delayed for such period as
may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the
Code. On the first business day following the expiration of such period, the
Participant will be paid, in a single lump sum without interest, an amount equal
to the aggregate amount of all payments delayed pursuant to the preceding
sentence, and any remaining payments not so delayed will continue to be paid
pursuant to the payment schedule applicable to such Award.

 

(qq)                          “Termination Date” means the effective date on
which the Participant ceased to provide services for purposes of the Plan as
determined in the sole discretion of the Company, or in the case of Insiders,
the Committee.

 

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