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Exhibit 10.15
 
FARMERS & MERCHANTS BANK OF CENTRAL CALIFORNIA
 
EXECUTIVE RETIREMENT PLAN – PERFORMANCE COMPONENT
 
1.
Purpose of the Plan.  The purpose of this Plan is to serve as part of a program
to attract, retain and reward a select group of the Bank’s executive officers by
providing retirement benefits in excess of the limitations on contributions or
benefits imposed by the IRC.  The provisions of this Plan have been amended and
restated effective as of January 1, 2009.

 
2.
Definitions.  As used in this Plan, the following terms shall have the meanings
indicated below:

 
“Bank” shall mean Farmers & Merchants Bank of Central California and any of its
subsidiaries.
 
“Board of Directors” shall mean the Board of Directors of the Bank.
 
“Bonus Factor” shall mean, in respect of any Participant, the num factor
determined by the Committee for purposes of such Participant’s participation in
the Plan.  A Participant may be awarded additional Bonus Factors in the
Plan.  In such event, each additional Bonus Factor shall be separate and
independent of any prior or subsequent Bonus Factor awarded to such Participant
under the Plan.
 
“Termination for Cause” shall mean the Bank terminating the Participant’s
employment for conviction of a felony resulting in a material economic adverse
effect on the Bank.
 
“Change of Control” shall mean a change of control of the Holding Company. Such
a Change of Control  will be deemed to have occurred immediately before any of
the following occur: (i) individuals, who were members of the Board of Directors
of the Holding Company immediately prior to a meeting of the shareholders of the
Holding Company which meeting involved a contest for the election of directors,
do not constitute a majority of the Board of Directors of the Holding Company
following such election or meeting, (ii) an acquisition, directly or indirectly,
of more than 35% of the outstanding shares of any class of voting securities of
the Holding Company by any Person, (iii) a merger (in which the Holding Company
is not the surviving entity), consolidation or sale of all, or substantially
all, of the assets of the Holding Company, or (iv) there is a change, during any
period of one year, of a majority of the Board of Directors of the Holding
Company as constituted as of the beginning of such period, unless the election
of each director who is not a director at the beginning of such period was
approved by a vote of at least a majority of the directors then in office who
were directors at the beginning of such period.  If the events or circumstances
described in (i)-(iv), above, shall occur to or be applicable to the Bank, then
such Change of Control shall be deemed for all purposes of this agreement to
also be a “Change of Control” of the Holding Company.  For purposes of this
agreement, the term “Person” shall mean and include any individual, corporation,
partnership, group, association or other “person”, as such term is used in
Section 14(d) of the Securities Exchange Act of 1934, other than the Holding
Company, the Bank, any other wholly owned subsidiary of the Holding Company or
any employee benefit plan(s) sponsored by the Holding Company, Bank or other
subsidiary of the Holding Company. Notwithstanding the foregoing, a Change of
Control shall not be deemed to have occurred unless the change also constitutes
the occurrence of a “change in control event,” as defined in Treasury Regulation
Section 1.409A-3(i)(5), with respect to the Participant.
 
 
 

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“Committee” shall mean the Personnel Committee of the Board of Directors or such
other committee that the Board of Directors may designate from time to time.
 
“Disability” shall mean when a Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is by reason
of  any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of Bank.  Disability shall be determined by a physician acceptable to
both the Committee and the Participant, and shall be interpreted to comply with
the definition of “disability” under Section 409A and the regulations
thereunder.
 
“Full Year of Service” shall mean any year (measured beginning with the first
day of the Participation Period) in which an individual completes at least 1,400
hours of employment with the Bank or the Holding Company.
 
“Holding Company” shall mean Farmers & Merchants Bancorp.
 
“Market Value Per Share” shall mean either:
 
 
(1)
The average per share price of the common stock of the Holding Company over the
90 day period preceding any event triggering a Deferred Bonus calculation, not
to exceed 20.0 times the trailing twelve months earnings divided by the average
number of shares outstanding over the preceding 90 day period.

 
However, given that the stock of the Holding Company is thinly traded, the Board
of Directors shall reserve the right at any time to ask for an independent
valuation of the common stock of the Holding Company using a valuation
methodology that assumes a change of control and which shall not be limited to
the 20.0 times limitation of the preceding sentence.
 
or
 
 
(2)
In the event of a Change of Control, the price per share paid by the acquirer.

 
“Normal Retirement Age” shall mean the Participant’s sixty-fifth (65th)
birthday.
 
“Participant” shall mean (i) the President, (ii) any of the Executive Vice
Presidents, and (iii) any of the Senior Vice Presidents of the Bank who is
selected for participation in the Plan based on the recommendation of the
Committee and the approval of the Board of Directors.
 
“Participation Period” shall mean, in respect of any Participant, the period
beginning on the first day of the quarter in which he or she is selected to
become a Participant or, in the case of an additional Bonus Factor, the first
day of the quarter in which such additional Bonus Factor is awarded, and ending,
in either case, on the earlier of (i) the last day of the quarter in which his
or her employment with the Bank terminates (irrespective of the reason or basis
for such termination) or (ii) immediately prior to the date on which a Change of
Control is consummated.
 
 
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“Plan” shall mean the Farmers & Merchants Bank of Central California Executive
Retirement Plan as set forth in this document, as successor of any prior plans
of the same name, and as the same may be amended or supplemented from time to
time.
 
“Retirement Account” shall mean the account maintained on the books of the Bank
as described in Section 6.
 
“Retirement Date” shall mean the day on or after the Participant’s Normal
Retirement Age when the Participant’s Employment is Terminated.
 
“Termination of Employment” or “Employment is Terminated” shall mean the
Participant has a separation from service with the Bank for any reason,
voluntary or involuntary, other than death, as defined under Treasury Regulation
Section 1.409A-l(h).  Subject to the foregoing, whether a separation from
service has occurred is determined based on whether the facts and circumstances
indicate that the Bank and the Participant reasonably anticipated that no
further services would be performed after a certain date or that the level of
bona fide services the Participant would perform after such date (as an employee
or independent contractor) would permanently decrease to no more than 20 percent
of the average level of bona fide services performed over the immediately
preceding 36-month period (or the full period in which the Participant provided
services to the Bank if the Participant has been providing services for less
than 36 months). A Participant will not be deemed to have experienced a
separation from service if such Participant is on military leave, sick leave, or
other bona fide leave of absence, to the extent such leave does not exceed a
period of six months or, if longer, such longer period of time during which a
right to re-employment is protected by either statute or contract. If the period
of leave exceeds six months and the individual does not retain a right to
re-employment under an applicable statute or by contract, the separation from
service will be deemed to occur on the first date immediately following such
six-month period.
 
 
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3.
Retirement Compensation – Existing Participants.  Participants in the Plan as of
January 1, 2005 will be eligible to earn Retirement Compensation comprised of
both an Earnings Component and a Market Value Component, calculated as follows:

 
Market Value Component
 
The difference between (A) and (B):
 
 
  (A)
The product of the Market Value Per Share of the outstanding common stock of the
Holding Company times the total number of such shares outstanding at the time

 
 
 
minus

 
 
 
the Shareholders’ Equity (exclusive of Accumulated Other Comprehensive Income or
Loss) per the Holding Company’s GAAP financial statements,

 
 
 
multiplied by

 
 
 
the Participant’s Bonus Factor.

 
 
  (B)
$219,329,850 (the Market Value/Book Value differential as of December 31, 2004),

 
 
 
multiplied by

 
 
 
the Participant’s Bonus Factor.

 

Earnings Component
 
 
 
The cumulative net income of the Holding Company after January 1, 2005,

 
 
 
multiplied by

 
 
 
the Participant’s Bonus Factor.

 
Exhibits 1 and 2 attached to this Plan provide an example of how the preceding
formula would be calculated under a hypothetical financial scenario.  Such
Exhibits are provided for example purposes only and are not a guarantee or a
prediction of future results or future economic values.
 
 
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4.
Retirement Compensation – New Participants.  Participants who join the Plan
after January 1, 2005, or Participants as of January 1, 2005 who receive
additional Bonus Factors after January 1, 2005, will be eligible to earn
Retirement Compensation comprised of both an Earnings Component and a Market
Value Component, calculated as follows:

 

Market Value Component
 
The difference between (A) and (B):
 
 
  (A)
The product of the Market Value Per Share of the outstanding common stock of
the Holding Company times the total number of such shares outstanding at the
time,

 
 
 
minus

 
 
 
the Shareholders’ Equity (exclusive of Accumulated Other Comprehensive Income or
Loss) per the Holding Company’s GAAP financial statements,

 
 
 
multiplied by

 
 
 
the Participant’s Bonus Factor.

 
 
  (B)
The Market Value Per Share at the Beginning of Participant’s Participation
Period times the total number of such shares outstanding at the Beginning of
Participant’s Participation Period,

 
 
 
minus

 
 
 
the Shareholders’ Equity (exclusive of Accumulated Other Comprehensive Income or
Loss), per the Holding Company’s GAAP financial statements at the Beginning of
Participant’s Participation Period

 
 
 
multiplied by

 
 
 
the Participant’s Bonus Factor.

 
Earnings Component
 
 
 
The cumulative net income of the Holding Company after the Beginning of
Participant’s Participation Period

 
 
 
multiplied by

 
 
 
the Participant’s Bonus Factor.

 
 
Exhibits 1 and 3 attached to this Plan provide an example of how the preceding
formula would be calculated under a hypothetical financial scenario.  Such
Exhibits are provided for example purposes only and are not a guarantee or a
prediction of future results or future economic values.

 
 
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5.
Vesting.  A Participant’s entitlement to his or her Retirement Account balance
shall vest based on the Participant’s Full Years of Service with the Bank,
measured beginning with the quarter in which he or she is selected to become a
Participant (Participants receiving Bonus Factors in this Plan as of January 1,
2005 will receive vesting credit with respect to these Bonus Factors for all
years of participation in any of the Bank’s previous Plans), as set forth in the
vesting schedule below.  The receipt of an additional Bonus Factor shall result
in a new vesting schedule for such additional Bonus Factor.   In the event of
(i) a Change of Control or (ii) the termination of the Participant’s employment
at the Bank due to his or her death or Disability, his or her Retirement Account
balance shall become 100% vested.

 
 
Vesting Schedule – Pre 2011 Awards

 

      
Percentage of
   
Post-Award Full Years of Service
 
Bonus Vested
             
Less than 2 years
    0%    
2 years to less than 3 years
    25%    
3 years to less than 4 years
    50%    
4 years to less than 5 years
    75%    
5 years or more
    100%  

 
 
Vesting Schedule – 2011 and Later Awards

 

      
Percentage of
   
Post-Award Full Years of Service
 
Bonus Vested
               
Less than 1 year
    0%    
1 year to less than 2 years
    50%    
2 years or more
    100%  

 
6.
Retirement Account.  The Bank shall establish a Retirement Account on its books
for the Participant comprised of a separate Market Value Component and Earnings
Component.  Incremental amounts calculated under Sections 3 and 4 will be
credited to this account and transferred to the rabbi trust established under
Section 20 (b) upon the earlier of a Change of Control or the end of each
calendar month. During the Participation Period, declines in the Holding
Company’s stock price could cause a Participant’s Market Value Component account
balance to decline or even show a negative balance, however, any negative
balance will not represent a liability on the part of the Participant nor an
offset to any other amount due under the Earnings Component.  At the end of the
Participation Period, the Participant’s Market Value Component account balance
will no longer be subject to movements in the Holding Company’s stock price, but
will continue to be credited with earnings, as defined in Section 7.  A
Participant shall be entitled to the amount set forth in the Retirement Account
applicable to him or her, subject to the terms and conditions of this Agreement,
including the vesting rules set forth in Section 5, the forfeiture rules set
forth in Section 10 and the payment rules set forth in Section 11.

 
7.
Earnings on Retirement Account Balances.   Earnings will be credited to each
Participant’s Retirement Account balance, and transferred to the rabbi trust
established under Section 20 (b), at the end of each calendar month: (a) from
January 1, 2005 until such time as the account balances are transferred to the
rabbi trust at Prime-3.0%; and (b) thereafter at a rate equivalent to the
pre-tax investment earnings rate for such month achieved in the rabbi trust.

 
 
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8.
Notice of Bonus Factor and Statement of Accounts. As soon as practicable
following a determination by the Committee to grant a Bonus Factor to a
Participant, the Committee shall give written notice to the Participant of the
amount of the Bonus Factor.  Such notice shall enclose a copy of the Plan.  The
Bank shall also provide to the Participant, within sixty (60) days after each
calendar year-end, a statement setting forth the Participant’s account balance.

 
9.
Accounting Device Only.  The Retirement Account is solely a device for measuring
amounts to be paid under this Plan.  It is not a trust fund of any kind.  The
Participant is a general unsecured creditor of the Bank for the payment of
benefits.  The benefits represent the mere Bank promise to pay such benefits.
The Participant’s rights are not subject in any manner to anticipation,
alienation, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by the Participant’s creditors.

 
10.
Forfeiture.  Except in the event of (i) Change of Control, (ii) death or (iii)
Disability, on termination of a Participant’s status as a Participant (whether
upon the Participant’s Retirement Date or Termination of Employment without
Cause), that portion of the Retirement Account that is not vested upon the
occurrence of such event shall be forfeited by the Participant.  Notwithstanding
anything to the contrary, in the event of the Participant’s Termination for
Cause, all entitlement and other rights of Participant to any Retirement Account
component, whether or not vested, shall be cancelled, terminated and forfeited
in their entirety.  Amounts forfeited by any individual Participant will, in the
sole discretion of the Committee, either (i) remain in the Plan and be used to
offset future Plan credits required under Section 6 for the remaining
Participants, or (ii) withdrawn from the Plan (and the rabbi trust).

 
11.           Payment.
 
 
a)
Retirement.  Upon the Participant attaining his or her Retirement Date (i.e.,
Termination of Employment at or after Normal Retirement Age), the Bank shall pay
the vested portion of Participant’s Retirement Account in accordance with the
Participant’s Election on the attached Payment Election.

 
 
b)
Disability.  If Participant’s Termination of Employment is due to Disability,
the Bank shall pay the full amount of the Participant’s Retirement Account in
accordance with the Participant’s Election on the attached Payment Election for
a Retirement under subsection a) above (if Termination of Employment is at or
after Normal Retirement Age) or as elected on Appendix B for a Termination
without Cause under subsection e) below (if Termination of Employment is before
Normal Retirement Age), notwithstanding any contrary election on Appendix B.

 
 
c)
Death.   Notwithstanding any distribution election, in the event of the
Participant’s death (i) while employed by the Bank or the Holding Company, the
full amount of Participant’s Retirement Account shall be paid to the
Participant’s heirs, devisees or designated beneficiaries in one lump sum
payment within sixty (60) days following the Participant’s death, or (ii) while
receiving payments of his Retirement Account as a result of his prior
Termination of Employment, the remaining portion of Participant’s vested
Retirement Account which had not been previously paid out shall be paid to the
Participant’s heirs, devisees or designated beneficiaries in one lump sum
payment within sixty (60) days following the Participant’s death.

 
 
d)
Change of Control.  In the event of a Change of Control, the Bank shall pay the
full amount of the Participant’s Retirement Account (or the remaining portion of
the Participant’s Retirement Account if payments had already commenced as a
result of a prior Termination of Employment)  in a lump sum immediately prior to
the Change of Control.

 
 
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e)
Termination without Cause.  In the event of the Participant’s Termination of
Employment with the Bank other than for Cause before Normal Retirement Age, the
Bank shall pay the vested portion of Participant’s Retirement Account in
accordance with the Participant’s Election on the attached Payment Election.

 
12.
Beneficiary Designation.  The Participant shall have the right, at any time to
submit a Beneficiary Designation Form designating primary and secondary
beneficiaries to whom payment under this Plan shall be made in the event of
death prior to complete distribution of the benefits due and payable under the
Plan. Each beneficiary designation shall become effective only when receipt
thereof is acknowledged in writing by the Bank. The Participant’s Beneficiary
designation shall be deemed automatically revoked if the Beneficiary predeceases
the Participant or if the Participant names a spouse as beneficiary and the
marriage is subsequently dissolved.  If the Participant dies without a valid
beneficiary designation, all payments shall be made to the Participant’s estate.

 
13.
Assignment of Rights.  Neither the Participant nor any designated beneficiary
shall have any right to sell, assign, transfer, or otherwise convey the right to
receive any payments hereunder without the prior written consent of the Bank.

 
14
Domestic Relations Orders.  Notwithstanding any other provision of this Plan
regarding the time or form of payment to the contrary, the Committee may in its
sole discretion pay, or direct payment of all or any portion of the
Participant’s Retirement Account directly to an alternate payee in order to
comply with a domestic relations order (“DRO”) as defined in Code Section
414(p)(1)(B).  The Committee may, but is not required to, establish regular
procedures for reviewing and commenting on draft DROs before issuance by the
family court and for advising the Participant and alternate payee regarding the
changes which are required in a DRO issued by the court to make it acceptable to
the Plan.  To facilitate any payment to be made in compliance with a DRO, the
Committee shall have the right, but shall not be required, to establish a
separate account for the alternate payee and may, but shall not be required, to
allow the alternate payee to self-direct the deemed investment thereof subject
to such conditions as it deems appropriate.  Any payment made under this Section
to an alternate payee shall reduce the Retirement Account of the Participant by
the amount thereof, and shall fully discharge the Bank’s obligation under this
Plan or otherwise with respect to such amount.  No payment made by the Bank to
an alternate payee with respect to a Participant shall constitute a waiver of
the Bank’s right to refuse to accept another DRO concerning any remaining
account of the Participant, nor shall the fact of such payment affect in any way
the applicability of this Section to any other Participant.   Any payments made
under a DRO to an alternate payee shall be net of any applicable
withholding.  This Section (and any DRO) shall be interpreted and applied in a
manner that complies with the applicable provisions of Section 409A of the Code
and the applicable regulations and other guidance promulgated thereunder.

 
15.
Unfunded and Unsecured Obligation of Bank. The Bank is not required to earmark
or otherwise set aside any funds or other assets or in any way secure payment of
its obligations under the Plan.  Any asset which may be set aside by the Bank
for accounting purposes or in a rabbi trust is not to be treated as held in
trust for any Participant or for his or her account.  Each Participant shall
have only the rights of a general, unsecured creditor of the Bank with respect
to any of his or her rights under the Plan.

 
 
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16.
Claims Procedure.  Any claim pertaining to a Participant’s benefits under the
Plan shall be filed with the Chairman of the Committee for the consideration of
the Committee.  Written notice of the disposition of a claim shall be furnished
the Participant within 30 days after the application therefore is filed.  In the
event the claim is denied, the specific reasons for such denial shall be set
forth, pertinent provisions of the Plan shall be cited and, where appropriate,
an explanation as to how the Participant can perfect his or her claim will be
provided.

 
17.
No Contract of Employment.  Nothing contained herein shall be construed to be a
contract of employment for any term of years, nor as conferring upon the
Participant the right to continue to be employed by the Bank, in any capacity,
nor in any way vary the Bank’s policy of at-will employment. It is expressly
understood by the parties hereto that this Plan relates exclusively to the
compensation as set forth in this agreement.

 
18.
Construction of Agreement.  Any payments under this Plan shall be independent
of, and in addition to, those under any other retirement plan, program, or
agreement which may be in effect between the parties hereto, or any other
compensation payable to the Participant or the Participant’s designated
beneficiary by the Bank.  All legal issues pertaining to the Plan shall be
determined in accordance with the laws of the State of California except as
preempted by Federal law.

 
19.
Amendment and Termination.  The Bank shall have the right at any time to modify,
alter or amend this Plan, in whole or in part, provided that the amendment shall
not reduce any Participant’s interest in the Plan, calculated as of the date on
which the amendment is adopted. Upon Plan termination, the Bank may accelerate
the distribution of Retirement Account balances only in accordance with the
requirements of Section 409A and the regulations issued thereunder.  Bank
reserves the right to change this Plan, including reducing any Participant’s
interest in this Plan in order to make such Plan compliant with Section 409A.

 
 
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20.
The Committee.

 
 
a)
The Committee shall, for the purpose of administering the Plan, choose a
secretary and an assistant secretary (either of whom is hereafter referred to as
“Secretary”) who shall keep minutes of the Committee’s proceedings and all
records and documents pertaining to the Committee’s administration of the Plan.
The Secretary may execute any certificates or other written direction on behalf
of the Committee. A majority of the members of the Committee shall constitute a
quorum.

 
 
b)
The Committee on behalf of the Participants shall be charged with the general
administration of the Plan and shall have all powers necessary to accomplish
those purposes including, but not by way of limitation, the following:

 
 
-
to construe, interpret, and administer the Plan;

 
 
-
to make determinations under the Plan;

 
 
-
to establish a rabbi trust for the Plan and to deposit amounts calculated under
Sections 6 and 7 into such trust established by the Committee (provided,
however, that notwithstanding anything in the Plan or other agreement to the
contrary, in no event shall a contribution be made to a trust for the purpose of
restricting assets to the provision of benefits under the Plan in connection
with a change in the financial health of the Bank or any affiliated entity in a
manner that would result in the inclusion of amounts in the gross income of the
Participants pursuant to Section 409A(b) of the Code);

 
 
-
to maintain the necessary records for the administration of the Plan; and

 
 
-
to make and publish such rules for the regulation of the Plan as are not
inconsistent with the terms hereof.

 
Decisions and determinations by the Committee shall be final and binding upon
all parties and shall be given the maximum deference allowed by law.
 
 
c)
The members of the Committee shall serve without bond and without compensation
(except for director fees) for their services hereunder. All expenses of the
Committee shall be paid by the Bank. The Bank shall furnish the Committee with
such clerical and other assistance as is necessary in the performance of its
duties. No member of the Committee shall be liable for the act or omission of
any other member of the Committee nor for any act or omission on his or her own
part, excepting only his or her own willful misconduct or gross negligence. The
Bank shall indemnify and hold harmless each member of the Committee against any
and all expenses and liabilities arising out of his or her membership on the
Committee, excepting only expenses and liabilities arising out of his or her own
willful misconduct or gross negligence.

 
 
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21.
Gross-Up Payment.  Upon a Change of Control, a Participant shall be entitled to
a “Gross-Up Payment” under the terms and conditions set forth herein, and such
payment shall include the Excise Tax reimbursement due pursuant to subsection a)
and any federal and state tax reimbursements due pursuant to subsection b).

 
 
a)
In the event that any payment or benefit (as those terms are defined within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the “Code”)) paid, payable, distributed or distributable to a Participant
(hereinafter referred to as “Payments”) pursuant to the terms of this Plan or
otherwise in connection with or arising out a Change of Control would be subject
to the Excise Tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Participant with respect to such Excise Tax, then
the Participant will be entitled to receive an additional payment (“Gross-Up
Payment”) in an amount equal to the total Excise Tax, interest and penalties
imposed on the Participant as a result of the Payment and the Excise Taxes on
any federal and state tax reimbursements as set forth in subsection b).

 
 
b)
If the Bank is obligated to pay the Participant pursuant to subsection a), the
Bank also shall pay the Participant an amount equal to the “total presumed
federal and state taxes” that could be imposed on the Participant with respect
to the Excise Tax reimbursements due to the Participant pursuant to subsection
a) and the federal and state tax reimbursements due to the Participant pursuant
to this subsection.  For purposes of the preceding sentence, the “total presumed
federal and state taxes” that could be imposed on the Participant shall be
conclusively calculated using a combined tax rate equal to the sum of the (a)
the highest individual income tax rate in effect under (i) Federal tax law and
(ii) the tax laws of the state in which the Participant resides on the date that
the payment is computed and (b) the hospital insurance portion of FICA.

 
 
c)
No adjustments will be made in this combined rate for the deduction of state
taxes on the federal return, the loss of itemized deductions or exemptions, or
for any other purpose for paying the actual taxes.

 
 
d)
It is further intended that in the event that any payments would be subject to
other “penalty” taxes (in addition to the Excise Tax in subsection a)) imposed
by Congress or the Internal Revenue Service that these taxes would also be
included in the calculation of the Gross-Up Payment, including any federal and
state tax reimbursements pursuant to subsection b).

 
 
e)
An initial determination as to whether a Gross-Up Payment is required pursuant
to the Plan and the amount of such Gross-Up Payment shall be made at the Bank’s
expense by an accounting firm appointed by the Bank prior to any Change of
Control.  The accounting firm shall provide its determination, together with
detailed supporting calculations and documentation to the Bank and the
Participant prior to submission of the proposed change of control to the Holding
Company’s shareholders, Board of Directors or appropriate regulators for
approval.  If the accounting firm determines that no Excise Tax is payable by
the Participant with respect to a Payment or Payments, it shall furnish the
Participant with an opinion reasonably acceptable to the Participant that no
Excise Tax will be imposed with respect to any such Payment or Payments.  Within
ten (10) days of the delivery of the determination to the Participant, the
Participant shall have the right to dispute the determination.  The existence of
the dispute shall not in any way affect the Participant’s right to receive the
Gross-Up Payment in accordance with the determination.  Upon the final
resolution of a dispute, the Bank or its successor shall promptly pay to the
Participant any additional amount required by such resolution.  If there is no
dispute, the determination shall be binding, final and conclusive upon the Bank
and the Participant, except to the extent that any taxing authority subsequently
makes a determination that the Excise Tax or additional Excise Tax is due and
owing on the payments made to the Participant.  If any taxing authority
determines that the Excise Tax or additional Excise Tax is due and owing, the
entity acquiring control of the Bank shall pay the Excise Tax and any penalties
assessed by such taxing authority.

 
 
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f)
Notwithstanding anything contained in this Section to the contrary, in the event
that according to the determination, an Excise Tax will be imposed on any
Payment or Payments, the Bank or its successor shall pay to the applicable
government taxing authorities as Excise Tax withholding, the amount of the
Excise Tax that the Bank has actually withheld from the Payment or Payments.

 
Payment of these amounts will be made in a lump sum immediately prior to the
Change of Control.   In the event that it is determined under subsection e) that
additional Excise Tax is due and owing, any reimbursement of taxes required to
be made by the entity acquiring control of the Bank or Holding Company shall be
made no later than the end of the calendar year next following the calendar year
in which the Participant remits the related taxes.
 
22.
Section 409A.  This Plan is intended to be consistent with the provisions of
Section 409A of the Code and its provisions shall be interpreted consistent with
such intent.

 
 
a)
Distribution Elections.  If otherwise payable under the Plan, a Participant’s
Retirement Account balance shall be distributed as elected by Participant on
Appendix B for a Retirement under subsection a) of Section 11 (if Termination of
Employment is at or after Normal Retirement Age) or as elected on Appendix B for
a Termination without Cause under subsection e) of Section 11 (if Termination of
Employment is before Normal Retirement Age), provided that such election has
been made prior to the calendar year in which the Participant performs the
services for which the contributions to the Participant’s Retirement Account are
made (or otherwise in accordance with the requirements of Section 409A), and in
accordance with such procedures as shall be established by the Bank.  If no such
election has been made for either of such payment events, the Participant shall
be deemed to have elected to receive payment upon such payment event in a lump
sum on the later of (A) the 15th day of the month following the six-month
anniversary of the date of Termination of Employment or (B) January 15th of the
year following the date of Termination of Employment.  The Bank has the
discretion to establish sub-accounts for one or more Participants and to
maintain separate payment elections in respect of each such sub-account provided
that such elections comply with the payment election requirements of Section
409A.  The Bank also has the discretion to permit changes in payment elections
provided such changes are made in accordance with the requirements of Section
409A and such procedures as shall be established by the Bank.

 
 
b)
Distributions To A Specified Employee.  Notwithstanding any provision to the
contrary in the Plan, a distribution to which a Participant would otherwise be
entitled upon a Termination of Employment will be delayed until one day
following the expiration of the six (6)-month period from the date of the
Participant’s Termination of Employment if the Bank in good faith determines
that the Participant is a “specified employee,” as defined in Section 409A and
regulations issued thereunder, at the time of such Termination of Employment,
and that the delayed commencement is required in order to avoid a prohibited
distribution under Code Section 409A(a)(2).  In the event that a delay of any
payment is required under this provision, such payment shall be accumulated and
paid in a single lump sum on the delayed payment date, and any remaining
payments due under the Plan shall be paid in accordance with the normal payment
dates specified for them herein.

 
 
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23.
Headings.  Headings and subheadings in this Plan are inserted for convenience or
reference only and are not to be considered in the construction of the
provisions hereof.

 
24.
Intent. To the extent that this Plan may be construed to be a plan maintained to
provide deferred compensation, it is intended to be limited to a “select group
of management or highly compensated employees” within the meaning of Section
201(2) of ERISA. The Plan is intended to be exempt from the participation,
vesting, funding, and fiduciary requirements of Title 1 of ERISA, to the fullest
extent permitted under the law. The Plan shall at all times be “unfunded” within
the meaning of ERISA.

 
25.
Gender and Number. Where the context permits, words in any gender shall, include
any other gender; words in the singular shall include the plural, and the plural
shall include the singular.

 
IN WITNESS WHEREOF, the Bank has caused this Plan, as amended and restated, to
be duly executed this 5th day of November 2010.
 
FARMERS & MERCHANTS BANK OF CENTRAL CALIFORNIA
 

By:  /s/ Kent A. Steinwert     Chairman, President and C.E.O.               By: 
/s/ Stewart C. Adams, Jr.     Chairman of the Personnel Committee of the Board

 
 
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