Exhibit 10.2 Salary Continuation Agreement with William R. Kitchen

 

Salary continuation Agreement

This Salary Continuation Agreement (the “Agreement”) by and between Valley
Business Bank, a California corporation (hereinafter referred to as the
“Employer”), and Bill Kitchen (hereinafter referred to as the “Executive”),
effective as of the 16th day of November, 2011, formalizes the agreements and
understanding between the Employer and the Executive.

WITNESSETH:

WHEREAS, the Executive is employed by the Employer;

WHEREAS, the Employer recognizes the valuable services the Executive has
performed for the Employer and wishes to encourage the Executive’s continued
employment and to provide the Executive with additional incentive to achieve
corporate objectives;

WHEREAS, the Employer wishes to provide the terms and conditions upon which the
Employer shall pay additional retirement benefits to the Executive;

WHEREAS, the Employer and the Executive intend this Agreement shall at all times
be administered and interpreted in compliance with Code Section 409A; and

WHEREAS, the Employer intends this Agreement shall at all times be administered
and interpreted in such a manner as to constitute an unfunded nonqualified
deferred compensation arrangement, maintained primarily to provide supplemental
retirement benefits for the Executive, a member of select group of management or
highly compensated employee of the Employer;

NOW THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the Employer and the Executive agree as follows:

ARTICLE 1

DEFINITIONS

For the purpose of this Agreement, the following phrases or terms shall have the
indicated meanings:

1.1              “Accrued Benefit” means the dollar value of the liability that
should be accrued by the Employer, under Generally Accepted Accounting
Principles, for the Employer’s obligation to the Executive under this Agreement,
calculated by applying by applying Accounting Standards Codification 710-10 and
the Discount Rate.

1.2              “Administrator” means the Board or its designee.

1.3              “Affiliate” means any business entity with whom the Employer
would be considered a single employer under Code Section 414(b) and 414(c). Such
term shall be interpreted in a manner consistent with the definition of “service
recipient” contained in Code Section 409A.

1.4              “Board” means the Board of Directors of the Employer.

1.5              “Cause” means any of the following acts or circumstances: gross
negligence or gross neglect of duties to the Employer; conviction of a felony or
of a gross misdemeanor involving moral

 

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1.6              turpitude in connection with the Executive’s employment with
the Employer; or fraud, disloyalty, dishonesty or willful violation of any law
or significant Employer policy committed in connection with the Executive's
employment and resulting in a material adverse effect on the Employer.

1.7              “Change in Control” means a change in the ownership or
effective control of the Employer, or in the ownership of a substantial portion
of the assets of the Employer, as such change is defined in Code Section 409A
and regulations thereunder.

1.8              “Claimant” means a person who believes that he or she is being
denied a benefit to which he or she is entitled hereunder.

1.9              “Code” means the Internal Revenue Code of 1986, as amended.

1.10          “Disability” means a condition of the Executive whereby the
Executive either: (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Employer. The Administrator
will determine whether the Executive has incurred a Disability based on its own
good faith determination and may require the Executive to submit to reasonable
physical and mental examinations for this purpose. The Executive will also be
deemed to have incurred a Disability if determined to be totally disabled by the
Social Security Administration or in accordance with a disability insurance
program, provided that the definition of disability applied under such
disability insurance program complies with the initial sentence of this Section.

1.11          “Discount Rate” means the rate used by the Administrator for
determining the Accrued Benefit. The initial Discount Rate is six per cent (6%).
The Administrator may adjust the Discount Rate to maintain the rate within
reasonable standards according to Generally Accepted Accounting Principles and
applicable bank regulatory guidance.

1.12          “Early Retirement” means Separation from Service after Early
Retirement Age and before Normal Retirement Age.

1.13          “Early Retirement Age” means the date the Executive attains age
sixty-six (66).

1.14          “Early Involuntary Termination” means that the Executive, prior to
Early Retirement Age, experiences a Separation from Service, following receipt
of a written notification from the Employer that such Separation from Service
has occurred for reasons other than Cause, Disability, Early Voluntary
Termination, or within twenty-four (24) months following a Change in Control.

1.15          “Early Voluntary Termination” means that the Executive, prior to
Early Retirement Age, experiences a Separation from Service for reasons other
than Cause, Disability, Early Involuntary Termination, or within twenty-four
(24) months following a Change in Control.

1.16          “Effective Date” means November 16th, 2011.

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

1.18          “Normal Retirement Age” means the date the Executive attains age
sixty-eight (68).

1.19          “Plan Year” means each twelve (12) month period commencing on
January 1 and ending on December 31 of each year. The initial Plan Year shall
commence on the Effective Date and end on the following December 31.

 

 

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1.20          “Separation from Service” means a termination of the Executive’s
employment with the Employer and its Affiliates for reasons other than death (or
Disability occurring before the Executive reaches age sixty-five (65)). A
Separation from Service may occur as of a specified date for purposes of the
Agreement even if the Executive continues to provide some services for the
Employer or its Affiliates after that date, provided that the facts and
circumstances indicate that the Employer and the Executive reasonably
anticipated at that date that either no further services would be performed
after that date, or that the level of bona fide services the Executive would
perform after such date (whether as an employee or as an independent contractor)
would permanently decrease to no more than twenty percent (20%) of the average
level of bona fide services performed over the immediately preceding thirty-six
(36) month period (or the full period during which the Executive performed
services for the Employer, if that is less than thirty-six (36) months). A
Separation from Service will not be deemed to have occurred while the Executive
is on military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six (6) months or, if longer, the period
for which a statute or contract provides the Executive with the right to
reemployment with the Employer. If the Executive’s leave exceeds six (6) months
but the Executive is not entitled to reemployment under a statute or contract,
the Executive incurs a Separation of Service on the next day following the
expiration of such six (6) month period. In determining whether a Separation of
Service occurs the Administrator shall take into account, among other things,
the definition of “service recipient” and “employer” set forth in Treasury
regulation §1.409A-1(h)(3). The Administrator shall have full and final
authority, to determine conclusively whether a Separation from Service occurs,
and the date of such Separation from Service.

1.21          “Specified Employee” means an individual that satisfies the
definition of a “key employee” of the Employer as such term is defined in Code
§416(i) (without regard to Code §416(i)(5)), provided that the stock of the
Employer is publicly traded on an established securities market or otherwise, as
defined in Code §1.897-1(m). If the Executive is a key employee at any time
during the twelve (12) months ending on December 31, the Executive is a
Specified Employee for the twelve (12) month period commencing on the first day
of the following April.

 

ARTICLE 2

PAYMENT OF BENEFITS

2.1 Normal Retirement Benefit. Upon Separation from Service after Normal
Retirement Age, the Employer shall pay the Executive an annual benefit in the
amount of Eighty Thousand Dollars ($80,000). The annual benefit will be paid in
equal monthly installments commencing on the first day of the month following
Separation from Service and continuing for fifteen (15) years, subject to the
conditions and limitations hereinafter set forth.

2.2 Early Retirement Benefit. If Early Retirement occurs, the Employer shall pay
the Executive the annual benefit determined according to the table below. The
annual benefit will be paid in equal monthly installments commencing on the
first day of the month following Separation from Service and continuing for
fifteen (15) years.

Executive’s Age at Separation from Service Annual Benefit 66 $50,000 67 $62,000

 

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2.3 Early Involuntary Termination Benefit. If Early Involuntary Termination
occurs, the Employer shall pay the Executive the Accrued Benefit in one hundred
eighty (180) equal monthly installments commencing on the first day of the month
following Normal Retirement Age.

2.4 No Benefit for Early Voluntary Termination. If Early Voluntary Termination
occurs, the Executive shall receive no benefit.

2.5 Disability Benefit. In the event the Executive suffers a Disability prior to
age sixty-five (65) the Employer shall pay the Executive the Accrued Benefit in
one hundred eighty (180) equal monthly installments commencing on the first day
of the month following the Executive’s sixty-fifth (65th) birthday.

2.6 Change in Control Benefit. If a Change in Control occurs, followed within
twenty-four (24) months by Separation from Service prior to Early Retirement
Age, the Employer shall pay the Accrued Benefit in one hundred eighty (180)
equal monthly installments commencing on the first day of the month following
Separation from Service.

2.7 Death Prior to Commencement of Benefit Payments. In the event the Executive
dies prior to Separation from Service, no benefit shall be paid hereunder. The
Employer may provide a benefit pursuant to a split dollar or other death benefit
agreement.

2.8 Death Subsequent to Commencement of Benefit Payments. In the event the
Executive dies while receiving payments, but prior to receiving all payments due
and owing hereunder, the Employer shall stop making payments hereunder.

2.9 Termination for Cause. If the Employer terminates the Executive’s employment
for Cause, then the Executive shall not be entitled to any benefits under the
terms of this Agreement.

2.10 Restriction on Commencement of Distributions.  Notwithstanding any
provision of this Agreement to the contrary, if the Executive is considered a
Specified Employee at the time of Separation from Service, the provisions of
this Section shall govern all distributions hereunder. Distributions which would
otherwise be made to the Executive due to Separation from Service shall not be
made during the first six (6) months following Separation from Service. Rather,
any distribution which would otherwise be paid to the Executive during such
period shall be accumulated and paid to the Executive in a lump sum on the first
day of the seventh month following Separation from Service, or if earlier, upon
the Executive’s death. All subsequent distributions shall be paid as they would
have had this Section not applied.

2.11 Acceleration of Payments. Except as specifically permitted herein, no
acceleration of the time or schedule of any payment may be made hereunder.
Notwithstanding the foregoing, payments may be accelerated, in accordance with
the provisions of Treasury Regulation §1.409A-3(j)(4) in the following
circumstances: (i) as a result of certain domestic relations orders; (ii) in
compliance with ethics agreements with the federal government; (iii) in
compliance with the ethics laws or conflicts of interest laws; (iv) in limited
cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay
employment-related taxes; or (vi) to pay any taxes that may become due at any
time that the Agreement fails to meet the requirements of Code Section 409A.

 

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2.12 Delays in Payment by Employer. A payment may be delayed to a date after the
designated payment date under any of the circumstances described below, and the
provision will not fail to meet the requirements of establishing a permissible
payment event. The delay in the payment will not constitute a subsequent
deferral election, so long as the Employer treats all payments to similarly
situated Participants on a reasonably consistent basis.

(a) Payments subject to Code Section 162(m). If the Employer reasonably
anticipates that the Employer’s deduction with respect to any distribution under
this Agreement would be limited or eliminated by application of Code Section
162(m), then to the extent deemed necessary by the Employer to ensure that the
entire amount of any distribution from this Agreement is deductible, the
Employer may delay payment of any amount that would otherwise be distributed
under this Agreement. The delayed amounts shall be distributed to the Executive
at the earliest date the Employer reasonably anticipates that the deduction of
the payment of the amount will not be limited or eliminated by application of
Code Section 162(m).

 

(b) Payments that would violate Federal securities laws or other applicable law.
A payment may be delayed where the Employer reasonably anticipates that the
making of the payment will violate Federal securities laws or other applicable
law provided that the payment is made at the earliest date at which the Employer
reasonably anticipates that the making of the payment will not cause such
violation. The making of a payment that would cause inclusion in gross income or
the application of any penalty provision of the Internal Revenue Code is not
treated as a violation of law.

 

(c) Solvency. Notwithstanding the above, a payment may be delayed where the
payment would jeopardize the ability of the Employer to continue as a going
concern.

2.13 Treatment of Payment as Made on Designated Payment Date. Any payment under
this Agreement made after the required payment date shall be deemed made on the
required payment date provided that such payment is made by the latest of: (i)
the end of the calendar year in which the payment is due; (ii) the 15th day of
the third calendar month following the payment due date; (iii) if Employer
cannot calculate the payment amount on account of administrative impracticality
which is beyond the Executive’s control, the end of the first calendar year
which payment calculation is practicable; and (iv) if Employer does not have
sufficient funds to make the payment without jeopardizing the Employer’s
solvency, in the first calendar year in which the Employer’s funds are
sufficient to make the payment.

2.14 Facility of Payment. If a distribution is to be made to a minor, or to a
person who is otherwise incompetent, then the Administrator may make such
distribution: (i) to the legal guardian, or if none, to a parent of a minor
payee with whom the payee maintains his or her residence; or (ii) to the
conservator or administrator or, if none, to the person having custody of an
incompetent payee. Any such distribution shall fully discharge the Employer and
the Administrator from further liability on account thereof.

2.15 Excise Tax Limitation. Notwithstanding any provision of this Agreement to
the contrary, if any benefit payment hereunder would be treated as an “excess
parachute payment” under Code Section 280G, the Employer shall reduce such
benefit payment to the extent necessary to avoid treating such benefit payment
as an excess parachute payment. The Executive shall be entitled to only the
reduced benefit and shall forfeit any amount over and above the reduced amount.

 

 

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2.16 Changes in Form of Timing of Benefit Payments. The Employer and the
Executive may, subject to the terms hereof, amend this Agreement to delay the
timing or change the form of payments. Any such amendment:

(a) must take effect not less than twelve (12) months after the amendment is
made;

(b) must, for benefits distributable due solely to the arrival of a specified
date, or on account of Separation from Service or Change in Control, delay the
commencement of distributions for a minimum of five (5) years from the date the
first distribution was originally scheduled to be made;

(c) must, for benefits distributable due solely to the arrival of a specified
date, be made not less than twelve (12) months before distribution is scheduled
to begin; and

(d) may not accelerate the time or schedule of any distribution.

ARTICLE 3

ADMINISTRATION

3.1 Administrator Duties. The Administrator shall be responsible for the
management, operation, and administration of the Agreement. When making a
determination or calculation, the Administrator shall be entitled to rely on
information furnished by the Employer or Executive. No provision of this
Agreement shall be construed as imposing on the Administrator any fiduciary duty
under ERISA or other law, or any duty similar to any fiduciary duty under ERISA
or other law.

3.2 Administrator Authority. The Administrator shall enforce this Agreement in
accordance with its terms, shall be charged with the general administration of
this Agreement, and shall have all powers necessary to accomplish its purposes.
Such powers include, but are not limited to, the following:

(a) To construe and interpret the terms and provisions of this Agreement and to
reconcile any inconsistency;

(b) To compute and certify the amount payable to the Executive; to determine the
time and manner in which such benefits are paid; and to determine the amount of
any withholding taxes to be deducted;

(c) To maintain all records that may be necessary for the administration of this
Agreement;

(d) To provide for the disclosure of all information and the filing or provision
of all reports and statements to the Executive and governmental agencies as
required by law;

(e) To make and publish such rules for the regulation of this Agreement and
procedures for the administration of this Agreement so long as no such rules or
procedures are not inconsistent with the terms hereof;

(f) To administer this Agreement’s claims procedures;

(g) To approve the forms and procedures for use under this Agreement; and

(h) To employ others, including actuaries, attorneys, accountants, independent
fiduciaries, recordkeepers and administrative consultants, to render advice or
perform services with respect to the responsibilities of the Administrator under
the Agreement.

3.3 Binding Effect of Decision. The decision or action of the Administrator with
respect to any question arising out of or in connection with the administration,
interpretation or application of this Agreement and the rules and regulations
promulgated hereunder shall be final, conclusive and binding upon all persons
having any interest in this Agreement.

 

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3.4 Compensation, Expenses and Indemnity. The Administrator shall serve without
compensation for services rendered hereunder. The Administrator is authorized at
the expense of the Employer to employ such legal counsel and/or recordkeeper as
it may deem advisable to assist in the performance of its duties hereunder.
Expense and fees in connection with the administration of this Agreement shall
be paid by the Employer.

3.5 Employer Information. The Employer shall supply full and timely information
to the Administrator on all matters relating to the Executive’s compensation,
death, Disability or Separation from Service, and such other information as the
Administrator reasonably requires.

3.6 Termination of Participation. If the Administrator determines in good faith
that the Executive no longer qualifies as a member of a select group of
management or highly compensated employees, as determined in accordance with
ERISA, the Administrator shall have the right, in its sole discretion, to cease
further benefit accruals hereunder.

3.7 Compliance with Code Section 409A. The Employer and the Executive intend
that the Agreement comply with the provisions of Code Section 409A to prevent
the inclusion in gross income of any amounts deferred hereunder in a taxable
year prior to the year in which amounts are actually paid to the Executive. This
Agreement shall be construed, administered and governed in a manner that affects
such intent, and the Administrator shall not take any action that would be
inconsistent therewith.

ARTICLE 4

Claims and Review Procedures

4.1 Claims Procedure. A Claimant who has not received benefits under this
Agreement that he or she believes should be distributed shall make a claim for
such benefits as follows.

(a) Initiation – Written Claim. The Claimant initiates a claim by submitting to
the Administrator a written claim for the benefits. If such a claim relates to
the contents of a notice received by the Claimant, the claim must be made within
sixty (60) days after such notice was received by the Claimant. All other claims
must be made within one hundred eighty (180) days of the date on which the event
that caused the claim to arise occurred. The claim must state with particularity
the determination desired by the Claimant.

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

(c) Notice of Decision. If the Administrator denies part or all of the claim,
the Administrator shall notify the Claimant in writing of such denial. The
Administrator shall write the notification in a manner calculated to be
understood by the Claimant. The notification shall set forth: (i) the specific
reasons for the denial; (ii) a reference to the specific provisions of this
Agreement on which the denial is based; (iii) a description of any additional
information or material necessary for the Claimant to perfect the claim and an
explanation of why it is needed; (iv) an explanation of this Agreement’s review
procedures and the time limits applicable to such procedures; and (v) a
statement of the Claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

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4.2 Review Procedure. If the Administrator denies part or all of the claim, the
Claimant shall have the opportunity for a full and fair review by the
Administrator of the denial as follows.

(a) Initiation – Written Request. To initiate the review, the Claimant, within
sixty (60) days after receiving the Administrator’s notice of denial, must file
with the Administrator a written request for review.

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

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

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

(e) Notice of Decision. The Administrator shall notify the Claimant in writing
of its decision on review. The Administrator shall write the notification in a
manner calculated to be understood by the Claimant. The notification shall set
forth: (a) the specific reasons for the denial; (b) a reference to the specific
provisions of this Agreement on which the denial is based; (c) a statement that
the Claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the Claimant’s claim for
benefits; and (d) a statement of the Claimant’s right to bring a civil action
under ERISA Section 502(a).

ARTICLE 5

AMENDMENT AND TERMINATION

5.1 Agreement Amendment Generally. Except as provided in Section 5.2, this
Agreement may be amended only by a written agreement signed by both the Employer
and the Executive.

5.2 Amendment to Insure Proper Characterization of Agreement. Notwithstanding
anything in this Agreement to the contrary, the Agreement may be amended by the
Employer at any time, if found necessary in the opinion of the Employer, i) to
ensure that the Agreement is characterized as plan of deferred compensation
maintained for a select group of management or highly compensated employees as
described under ERISA, ii) to conform the Agreement to the requirements of any
applicable law or iii) to comply with the written instructions of the Employer’s
auditors or banking regulators.

5.3 Agreement Termination Generally. Except as provided in Section 5.4, this
Agreement may be terminated only by a written agreement signed by the Company
and the Director. Such termination shall not cause a distribution of benefits
under this Agreement. Rather, upon such termination benefit distributions will
be made at the earliest distribution event permitted under Article 2.

 

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5.4 Effect of Complete Termination. Notwithstanding anything to the contrary in
Section 5.3, and subject to the requirements of Code Section 409A and Treasury
Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely
terminate and liquidate the Agreement. In the event of such a complete
termination, the Employer shall pay the Accrued Benefit balance to the
Executive. Such complete termination of the Agreement shall occur only under the
following circumstances and conditions.

(a) Corporate Dissolution or Bankruptcy. The Employer may terminate and
liquidate this Agreement within twelve (12) months of a corporate dissolution
taxed under Code Section 331, or with the approval of a bankruptcy court
pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the
Agreement are included in the Executive’s gross income in the latest of: (i) the
calendar year which the termination occurs; (ii) the calendar year in which the
amount is no longer subject to a substantial risk of forfeiture; or (iii) the
first calendar year in which the payment is administratively practicable.

(b) Change in Control. The Employer may terminate and liquidate this Agreement
by taking irrevocable action to terminate and liquidate within the thirty (30)
days preceding or the twelve (12) months following a Change in Control. This
Agreement will then be treated as terminated only if all substantially similar
arrangements sponsored by the Employer which are treated as deferred under a
single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and
liquidated with respect to each participant who experienced the Change in
Control so that the Executive and any participants in any such similar
arrangements are required to receive all amounts of compensation deferred under
the terminated arrangements within twelve (12) months of the date the Employer
takes the irrevocable action to terminate the arrangements.

(c) Discretionary Termination. The Employer may terminate and liquidate this
Agreement provided that: (i) the termination does not occur proximate to a
downturn in the financial health of the Employer; (ii) all arrangements
sponsored by the Employer and Affiliates that would be aggregated with any
terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated;
(iii) no payments, other than payments that would be payable under the terms of
this Agreement if the termination had not occurred, are made within twelve (12)
months of the date the Employer takes the irrevocable action to terminate this
Agreement; (iv) all payments are made within twenty-four (24) months following
the date the Employer takes the irrevocable action to terminate and liquidate
this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a
new arrangement that would be aggregated with any terminated arrangement under
Treasury Regulations §1.409A-1(c) if the Executive participated in both
arrangements, at any time within three (3) years following the date the Employer
takes the irrevocable action to terminate this Agreement.

ARTICLE 6

MISCELLANEOUS

6.1 No Effect on Employment Rights. This Agreement constitutes the entire
agreement between the Employer and the Executive as to the subject matter
hereof. No rights are granted to the Executive by virtue of this Agreement other
than those specifically set forth herein. Nothing contained herein will confer
upon the Executive the right to be retained in the service of the Employer nor
limit the right of the Employer to discharge or otherwise deal with the
Executive without regard to the existence hereof.

6.2 State Law. To the extent, not governed by ERISA, the provisions of this
Agreement shall be construed and interpreted according to the internal law of
the State of California without regard to its conflicts of laws principles.

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6.3 Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall affect the remaining
parts hereof, but this Agreement shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.

6.4 Nonassignability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

6.5 Unsecured General Creditor Status. Payment to the Executive hereunder shall
be made from assets which shall continue, for all purposes, to be part of the
general, unrestricted assets of the Employer and no person shall have any
interest in any such asset by virtue of any provision of this Agreement. The
Employer’s obligation hereunder shall be an unfunded and unsecured promise to
pay money in the future. In the event that the Employer purchases an insurance
policy insuring the life of the Executive to recover the cost of providing
benefits hereunder, the Executive shall not have any rights whatsoever in said
policy or the proceeds therefrom

6.6 Life Insurance. If the Employer chooses to obtain insurance on the life of
the Executive in connection with its obligations under this Agreement, the
Executive hereby agrees to take such physical examinations and to truthfully and
completely supply such information as may be required by the Employer or the
insurance company designated by the Employer.

6.7 Unclaimed Benefits. The Executive shall keep the Employer informed of the
Executive’s current address. If the location of the Executive is not made known
to the Employer within three years after the date upon which any payment of any
benefits may first be made, the Employer shall delay payment of the Executive’s
benefit payment(s) until the location of the Executive is made known to the
Employer; however, the Employer shall only be obligated to hold such benefit
payment(s) for the Executive until the expiration of three (3) years. Upon
expiration of the three (3) year period, the Employer may discharge its
obligation by payment to the Executive’s estate. If there is no estate in
existence at such time or if such fact cannot be determined by the Employer, the
Executive shall thereupon forfeit all rights to any benefits provided under this
Agreement.

6.8 Removal. Notwithstanding anything in this Agreement to the contrary, the
Employer shall not distribute any benefit under this Agreement if the Executive
is subject to a final removal or prohibition order issued pursuant to Section
8(e) of the Federal Deposit Insurance Act. Furthermore, any payments made to the
Executive pursuant to this Agreement shall, if required, comply with 12 U.S.C.
1828, FDIC Regulation 12 CFR Part 359 and any other regulations or guidance
promulgated thereunder.

6.9 Notice. Any notice, consent or demand required or permitted to be given to
the Employer or Administrator under this Agreement shall be sufficient if in
writing and hand-delivered or sent by registered or certified mail to the
Employer’s principal business office. Any notice or filing required or permitted
to be given to the Executive under this Agreement shall be sufficient if in
writing and hand-delivered or sent by mail to the last known address of the
Executive. Any notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark or on the receipt
for registration or certification.

6.10 Headings and Interpretation. Headings and sub-headings in this Agreement
are inserted for reference and convenience only and shall not be deemed part of
this Agreement. Wherever the fulfillment of the intent and purpose of this
Agreement requires and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.

 

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6.11 Alternative Action. In the event it becomes impossible for the Employer or
the Administrator to perform any act required by this Agreement due to
regulatory or other constraints, the Employer or Administrator may perform such
alternative act as most nearly carries out the intent and purpose of this
Agreement and is in the best interests of the Employer, provided that such
alternative act does not violate Code Section 409A.

6.12 Coordination with Other Benefits. The benefits provided for the Executive
under this Agreement are in addition to any other benefits available to the
Executive under any other plan or program for employees of the Employer. This
Agreement shall supplement and shall not supersede, modify, or amend any other
such plan or program except as may otherwise be expressly provided herein.

6.13 Inurement. This Agreement shall be binding upon and shall inure to the
benefit of the Employer, its successor and assigns, and the Executive, the
Executive’s successors, heirs, executors and administrators.

6.14 Tax Withholding. The Employer may make such provisions and take such action
as it deems necessary or appropriate for the withholding of any taxes which the
Employer is required by any law or regulation to withhold in connection with any
benefits under the Agreement. The Executive shall be responsible for the payment
of all individual tax liabilities relating to any benefits paid hereunder.

6.15 Aggregation of Agreement. If the Employer offers other non-account balance
deferred compensation plans, this Agreement and those plans shall be treated as
a single plan to the extent required under Code Section 409A.

IN WITNESS WHEREOF, the Executive and a representative of the Employer have
executed this Agreement document as indicated below:

Executive: Employer:

Executive: Employer:         By:   EVP/Chief Credit Officer Its: President/Chief
Executive Officer

 

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