Employee Supplemental Compensation Benefits Agreement - Kenneth Shannon



 Exhibit 10.18 
  
 EMPLOYEE SUPPLEMENTAL COMPENSATION BENEFITS 
 AGREEMENT 
  
 THIS AGREEMENT, made and entered into effective the first day of January, 2003, by and between Greater Bay Bancorp, a California banking corporation (hereinafter referred to as the “Employer”), and Kenneth Shannon, an
individual residing in the State of California (hereinafter referred to as the “Employee”). 
  
 WITNESSETH: 
  
 WHEREAS, the Employee has been and continues to be a valued employee of the Employer; and 
  
 WHEREAS, since December 16, 2002, the Employee has been eligible to participate in an Employee Supplemental Compensation Benefits Plan, which
participation is to be reflected in this Agreement; 
  
 WHEREAS, the Employee’s experience, knowledge of the affairs of the Employer, reputation, and contacts in the industry are extensive and valuable, and assurance of the Employee’s continued services is important to the
future growth and profits of the Employer, such that it is in the best interests of the Employer to arrange terms of continued employment for the Employee that will encourage the Employee to remain in the Employer’s employment during the
Employee’s lifetime or until the age of retirement; 
  
 ACCORDINGLY, it is the desire of the Employer and the Employee to enter into this Agreement under which the Employer will agree to make certain payments to the Employee at retirement pursuant to this Agreement and to terminate any
and all prior agreements and understandings between the Employer and the Employee regarding similar benefits; 
  
 FURTHERMORE, it is the intent of the parties hereto that this Agreement be considered part of an unfunded arrangement maintained primarily to
provide supplemental retirement benefits for a select group of highly compensated or management employees of Employer including the Employee (“Executive Plan”) for purposes of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Employer’s obligations under this Agreement shall be that of an unfunded unsecured promise to provide the benefits to the Employee set forth herein, and, except for the contributions, if any, to a secular trust to be
established by the Employee as grantor, the Employee and the Employee’s beneficiaries shall be unsecured general creditors with respect to any benefits provided under the terms of this Agreement. The Employee is fully advised of the
Employer’s financial status and has had substantial input into the design and operation of the Executive Plan; and 







 NOW, THEREFORE, in consideration of services to be performed by the Employee in the future as well
as of the mutual promises and covenants herein contained, the Employee and the Employer agree as follows: 
  

	I.	EMPLOYMENT 

  
 Although this Agreement is intended to provide the Employee with an additional incentive to remain in the employ of the Employer, this Agreement shall not
be deemed to constitute a contract of employment between the Employee and the Employer nor shall any provision of this Agreement restrict or expand the right of the Employer to terminate the Employee’s employment. This Agreement shall have no
impact or effect upon any separate employment agreement that the Employee may have with the Employer, written or otherwise; it being the parties’ intention and agreement that unless this Agreement is specifically referenced in any such
employment agreement (or any modification thereto), this Agreement (and the Employer’s obligations hereunder) shall stand separate and apart from, and shall have no effect upon, or be affected by, the terms and provisions of any such employment
agreement. 
  

	II.	ADDITIONAL BENEFIT 

  
 The supplemental compensation benefits provided by this Agreement are granted by the Employer as an additional benefit to the Employee and are not part of
any Salary reduction plan or an arrangement deferring a bonus or a salary increase. The Employee has no option to take any current payment or bonus in lieu of these supplemental compensation benefits except as set forth hereinafter. No death
benefits are provided under this Agreement, except for any Supplemental Benefits provided through a secular trust pursuant to Paragraph IX. No benefits, other than any Supplemental Benefits provided through a secular trust pursuant to Paragraph IX,
are payable under this Agreement following the death of the Employee to any beneficiary, devisee, heir, successor or estate. 
  

	III.	NORMAL RETIREMENT DATE AND EARLY RETIREMENT DATE 

  

	 	A.	Normal Retirement Date: 

  
 “Normal Retirement Date” shall mean the first day of the month following the Employee’s termination of employment with Employer other than
by reason of Cause (as defined in Subparagraph VII.C below) or the Employee’s death, provided that the Employee remains in continuous active employment with the Employer through the date on which the Employee attains age sixty-two (62) years.

  

 2 









	 	B.	Early Retirement Date: 

  
 “Early Retirement Date” shall mean the first day of the month following the Employee’s termination of employment with Employer prior to the
Employee attaining age sixty-two (62) years, other than by reason of Cause (as defined in Subparagraph VII.C below) or the Employee’s death, provided that the Employee remains in continuous active employment with the Employer through the date
on which the Employee attains age fifty-nine and one-half (59 1/2) years. 
  

	IV.	NORMAL RETIREMENT BENEFIT 

  
 If the Employee’s employment with the Employer terminates upon the Normal Retirement Date, the Employer shall pay the Employee an annual benefit
equal to One Hundred Fifteen Thousand Four Hundred Fifty Nine and 00/100th Dollars ($115,459.00). Said benefit shall
be paid in equal monthly installments of Nine Thousand Six Hundred Twenty One and 58/100th Dollars ($9,621.58) (each
1/12 of the annual benefit) on the first day of each month beginning with the Normal Retirement Date and continuing through the first day of the month in which the Employee’s death occurs. The annual and monthly benefit amounts set forth above
shall be increased by three percent (3%) on the first anniversary of the Normal Retirement Date, and the adjusted annual and monthly benefit amounts shall be increased by three percent (3%) each year thereafter on each subsequent anniversary of the
Normal Retirement Date. 
  

	V.	EARLY RETIREMENT BENEFIT 

  
 If the Employee’s employment with the Employer terminates upon the Early Retirement Date, the Employer shall pay the Employee an annual benefit equal
to the Applicable Percentage (as defined in and determined as of the Employee’s last day of active employment in accordance with Paragraph VI) of the annual normal retirement benefit amount specified in Paragraph IV reduced by a factor of
five-twelfths of one percent (5/12 %) per month for each month that the Early Retirement Date precedes the first day of the month following the month in which the Employee attains age sixty-two (62) years. Said benefit shall be paid in equal monthly
installments (each 1/12 of the annual benefit) on the first day of each month beginning with the Early Retirement Date and continuing through the first day of the month in which the Employee’s death occurs. These annual and monthly benefit
amounts shall be increased by three percent (3%) on the first anniversary of the Early Retirement Date, and the adjusted annual and monthly benefit amounts shall be increased by three percent (3%) each year thereafter on each subsequent anniversary
of the Early Retirement Date. 
  
 Example: Assuming that the
Applicable Percentage is 100%, and the Early Retirement Date is the first day of the month following the month in which the Employee attains age sixty (60) years, the early retirement benefit would be 10% (5/12 % x 24 months) less than the normal
retirement benefit specified in Paragraph IV. 
  

 3 









	VI.	APPLICABLE PERCENTAGE 

  
 The term “Applicable Percentage” shall mean that percentage listed on Schedule “A” attached hereto that is adjacent to the last
calendar year end through which the Employee has remained in continuous active employment with the Employer immediately prior to the Employee’s termination of employment with the Employer following the date of this Agreement. 
  

	VII.	OTHER TERMINATION OF EMPLOYMENT 

  

	 	A.	Termination by the Employer without Cause: 

  
 If the Employee’s employment is terminated by the Employer without Cause (as defined in Subparagraph VII.C below) prior to the date on which the
Employee attains age fifty-nine and one-half (59 1/2) years, and such termination is not subject to the
provisions of Paragraph VIII below, the Employee shall be entitled to be paid a retirement benefit that is the Applicable Percentage (as defined in and determined as of the Employee’s last day of active employment in accordance with Paragraph
VI) of the amount specified in Paragraph IV and in the form and duration specified in Paragraph IV, commencing on the first day of the month following the date on which the Employee attains age sixty-two (62) years. 
  

	 	B.	Voluntary Termination by the Employee: 

  
 If the Employee voluntarily terminates his or her employment with the Employer prior to the date on which the Employee attains age fifty-nine and one-half
(59 1/2) years, and such termination is not subject to the provisions of Paragraph VIII below, then

  

	 	(i)	If the Applicable Percentage (as defined in and determined as of the Employee’s last day of active employment in accordance with Paragraph VI) is one hundred percent (100%),
the Employee shall be entitled to be paid a retirement benefit in the amount, form and duration specified in Paragraph IV, commencing on the first day of the month following the date on which the Employee attains age sixty-two (62) years.


  

	 	(ii)	If the Applicable Percentage (as defined in and determined as of the Employee’s last day of active employment in accordance with Paragraph VI) is less than one hundred percent
(100%), the Employee shall not be entitled to receive any retirement benefits under this Agreement. 

  

 4 









	 	C.	Termination by the Employer for Cause: 

  
 If the Employee’s employment is terminated by the Employer for Cause at any time, the Employee shall not be entitled to receive any retirement
benefits under this Agreement. 
  
 The term “Cause”
shall mean any of the following that has a material adverse effect upon the Employer: 
  

	 	(i)	The Employee’s deliberate violation of any state or federal banking or securities law; or 

  

	 	(ii)	The Employee’s deliberate violation of the Bylaws, rules, policies or resolutions of the Employer; or 

  

	 	(iii)	The Employee’s deliberate violation of the rules or regulations of the California Department of Financial Institutions, the Federal Deposit Insurance Corporation, the Federal
Reserve Board of Governors, the Office of the Comptroller of the Currency or any other regulatory agency or governmental authority having jurisdiction over the Employer; or 

  

	 	(iv)	The Employee’s conviction of any felony; or 

  

	 	(v)	The Employee’s conviction of a crime involving moral turpitude, fraudulent conduct or dishonest conduct. 

  

	 	D.	Termination by Reason of the Employee’s Disability Prior to Age 62: 

  
 In the event the Employee’s employment with the Employer terminates as the result of the Employee’s Disability
prior to the Employee attaining age sixty-two (62) years, the Employee shall be entitled to be paid a normal retirement benefit in the amount, form and duration specified in Paragraph IV, commencing on the first day of the month following the
Employee’s attaining age sixty-two (62) years. In the event the Employee’s employment with the Employer terminates as the result of the Employee’s Disability prior to the Employee attaining age sixty-two (62) years, the Employee may
elect to receive an early retirement benefit (in lieu of the normal retirement benefit) in the amount (but not less than $0), form and duration determined under Paragraph V, except that the Applicable Percentage shall be deemed to be 100%,
commencing on the first day of any month elected by the Employee following the Employee’s termination of employment with Employer (even if prior to the Employee’s attaining age fifty-nine and one-half (59 1/2) years). The Employee shall make any such election in writing delivered to the Employer or its successor not later
than the earlier of (a) six (6) months prior to the termination of the Employee’s employment with Employer or (b) one (1) year 
  

 5 








 prior to the date on which the early retirement benefit is to commence. Any election made after the
earlier of such dates shall not take effect, and the last such election, if any, made on or before the earlier of such dates shall be effective. 
  
 The term “Disability” shall have the same meaning given such term in any policy of long-term disability insurance maintained by the Employer for
the benefit of its employees including the Employee at the time of the Employee’s termination of employment. In the absence of such a long-term disability insurance policy, the term “Disability” shall mean bodily injury or disease
(mental or physical) which wholly and continuously prevents the performance of the Employee’s duties on behalf of the Employer for at least ninety (90) days. 
  

	VIII.	CHANGE IN CONTROL 

  

	 	A.	Definition of Change In Control: 

  
 The term “Change in Control” shall mean the first to occur of any of the following events: 
  

	 	(i)	Any “person” (as such term is used in sections 13 and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the beneficial
owner (as that term is used in section 13(d) of the Exchange Act), directly or indirectly, of twenty-five percent (25%) or more of the capital stock of the Employer entitled to vote in the election of directors, other than a group of two or more
persons not (1) acting in concert for the purpose of acquiring, holding or disposing of such stock or (2) otherwise required to file any form or report with any governmental agency or regulatory authority having jurisdiction over the Employer which
requires the reporting of any change in control; 

  

	 	(ii)	During any period of not more than two (2) consecutive years during which the Employer continues in existence, not including any period prior to the effective date of this
Agreement, individuals who, at the beginning of such period, constitute the Board of Directors of the Employer, and any new director (other than a director designated by a person who has entered into an agreement with the Employer to effect a
transaction described in clause (i), (iii), (iv) or (v) of this Subparagraph VIII.A) whose appointment to such Board of Directors or nomination for election to such Board of Directors was approved by a vote of at least three-fourths (3/4ths) of the
directors then still in office, either were directors at the beginning of such period or whose appointment or nomination for election was previously so approved, cease for any reason to constitute at least a majority of such Board of Directors;


  

 6 









	 	(iii)	The effective date of any consolidation or merger of the Employer (after all requisite shareholder, applicable regulatory and other approvals and consents have been obtained), other
than (a) a consolidation or merger of the Employer in which the holders of the voting capital stock of the Employer immediately prior to the consolidation or merger hold more than fifty percent (50%) of the voting capital stock of the surviving
entity immediately after the consolidation or merger or (b) a consolidation or merger of the Employer with one or more other persons that are within a “controlled group of corporations” (as that term is defined in section 1563 of the
Internal Revenue Code of 1986, as amended (the “Code”)) in which the Employer is a member (or for noncorporate entities have a similar relationship to the Employer) immediately prior to the consolidation or merger;


  

	 	(iv)	The shareholders of the Employer approve any plan or proposal for the liquidation or dissolution of the Employer; or 

  

	 	(v)	The shareholders of the Employer approve the sale or transfer of substantially all of the Employer’s assets respectively, to one or more persons that are not within a
“controlled group of corporations” (as that term is defined in section 1563 of the Code) in which the Employer is a member (or for noncorporate entities do not have a similar relationship to the Employer) immediately prior to the sale or
transfer. 

  

	 	B.	Termination by the Employer in Connection with a Change in Control: 

  

	 	(i)	In the event the Employee’s employment with the Employer is terminated by the Employer “in connection with a Change in Control” (as defined below), the Employee shall
be entitled to be paid a normal retirement benefit in the amount, form and duration specified in Paragraph IV, commencing on the first day of the month following the later of the Employee’s termination of employment with Employer or the
Employee’s attaining age sixty-two (62) years. In the event the Employee’s employment with the Employer is terminated by the Employer “in connection with a Change in Control” (as defined below), the Employee may elect to receive
an early retirement benefit (in lieu of the normal retirement benefit) in the amount, form and duration determined under Paragraph V, except that the Applicable Percentage shall be deemed to be 100%. Such early retirement benefit shall commence on
the first day of any month elected by the Employee following the later of the Employee’s termination of employment with Employer or the Employee’s attaining age fifty-nine and one-half (59 1/2) years. The Employee shall make any such election in writing delivered to the Employer or its successor not later than the earlier of (a) six (6) months
prior to the termination of the Employee’s 

  

 7 








 employment with Employer or (b) one (1) year prior to the date on which the early retirement benefit is
to commence. Any election made after the earlier of such dates shall not take effect, and the last such election, if any, made on or before the earlier of such dates shall be effective. 
  

	 	(ii)	For purposes of this Paragraph VIII, a termination shall be deemed to be “in connection with a Change in Control” if, within two (2) years following the occurrence
of a Change in Control: (a) the Employee’s employment with the Employer is terminated by the Employer other than a Termination for Cause; or (b) by reason of the Employer’s actions, any adverse and material change occurs in the scope of
the Employee’s position, responsibilities, duties, salary, benefits or location of employment; or (c) the Employer causes an event to occur which reasonably constitutes or results in a demotion, a significant diminution of responsibilities or
authority, or a constructive termination (by forcing a resignation or otherwise) of the Employee’s employment. 

  

	 	C.	Section 280G Benefits Adjustment: 

  
 If all or any portion of the amounts payable to the Employee under this Agreement, either alone or together with other payments which the Employee has the
right to receive from the Employer, constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), that are subject to the excise tax imposed by Section
4999 of the Code (or similar tax and/or assessment), the Employer (and its successor) shall increase the amounts payable under this Agreement to the extent necessary to afford the Employee substantially the same economic benefit under this Agreement
as the Employee would have received had no such excise tax been imposed on the payments due the Employee under this Agreement. The determination of the amount of any such excise taxes shall be made initially by the independent accounting firm
employed by the Employer immediately prior to the occurrence of the event constituting a Change in Control. 
  
 If, at a later date, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of
competent jurisdiction, or otherwise) that the amount of excise taxes payable to the Employee is greater than the amount initially so determined, then the Employer (or its successor) shall pay to the Employee an amount equal to the sum of (i) such
additional excise taxes, and (ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse the Employee substantially for any income, excise or other taxes payable by the Employee with respect
to the amounts specified in (i) and (ii) above, and the reimbursement provided by this clause (iii). 
  

 8 









	IX.	SUPPLEMENTAL BENEFIT THROUGH SECULAR TRUST 

  
 In addition to the retirement, termination and Change in Control benefits described in Paragraphs IV, V, VII and VIII above, the Employer shall provide to
Employee or Employee’s beneficiary the supplemental benefits specified in Schedule “C” of this Agreement (the “Supplemental Benefits”). The Employee has established a secular trust, identified as the Kenneth Shannon Secular
Trust Agreement dated as of [date of secular trust agreement], a copy of which is attached hereto as Schedule “D” (the “Trust”). The Employer shall make contributions to the Trust as specified in Schedule
“C” of this Agreement. The contributions shall be deposited into an account, which constitutes the Trust Fund as defined in the Trust. Notwithstanding anything, contained herein to the contrary, the Trust Fund shall not be subject to the
claims of the Employer’s general creditors except as may be expressly stated in the Trust. In the event of a conflict between the provisions of the Trust and this Agreement, the provisions of the Trust shall control. 
  

	X.	RESTRICTIONS ON FUNDING 

  
 Except as provided in Paragraph IX above, the Employer shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its
obligations under this Agreement. The Employee, and any successor in interest, shall be and remain simply a general creditor of the Employer in the same manner as any other creditor having a general claim for matured and unpaid compensation.

  
 The Employer reserves the absolute right, at its sole
discretion, either to set aside, earmark or entrust assets relating to the obligations undertaken by this Agreement or to refrain from setting aside, earmarking or entrusting any such assets, and to determine the extent, nature and method of such
setting aside, earmarking or entrusting. Should the Employer elect to set aside, earmark or entrust assets relating to this Agreement, in whole or in part, through the purchase of life insurance, mutual funds, disability policies or annuities, the
Employer reserves the absolute right, in its sole discretion, to dispose of such assets, to discontinue making payments related to such assets, or otherwise to terminate any arrangement by which such setting aside, earmarking or entrusting is made,
at any time, in whole or in part. At no time shall any Employee have any lien, right, title or interest in any specific investment or assets of the Employer. 
  

If the Employer elects to invest in a life insurance, disability or annuity policy on the life of the Employee, then the Employee shall assist the
Employer by freely submitting to a physical exam and supplying such additional information necessary to obtain such insurance or annuities. 
  
 Notwithstanding anything hereinabove to the contrary, the Employer and the Employee acknowledge and agree that the Employer shall establish, not later
than the effective date of any Change in Control that may occur, a Rabbi Trust or multiple Rabbi Trusts (collectively, the “Trust”) upon such terms and conditions as the Employer in its sole 
  

 9 








 discretion deems appropriate and in compliance with applicable provisions of the Code in order to permit
the Employer to make contributions and/or transfer assets to the Trust to discharge its obligations pursuant to this Agreement. The principal of the Trust and any earnings thereon shall be held separate and apart from other funds of the Employer to
be used exclusively for discharge of the Employer’s obligations pursuant to this Agreement, except that the principal of the Trust and any earnings thereon shall continue to be subject to the claims of the Employer’s general creditors
until paid to the Employee in such manner and at such times as specified in this Agreement. 
  

	XI.	MISCELLANEOUS 

  

	 	A.	Alienability and Assignment Prohibition: 

  
 The Employee shall have no power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any of
the benefits payable hereunder nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed by the Employee, nor be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Employee attempts assignment, commutation, hypothecation, transfer or disposal of the benefits hereunder, such attempted assignment, commutation, hypothecation, transfer or disposal of the benefits shall be
void, and the Employer shall have no obligation to make any payment pursuant to it.  
  

	 	B.	Binding Obligation of the Employer and any Successor in Interest: 

  
 The Employer shall not merge or consolidate into or with another entity or sell substantially all of its assets to another entity, firm or person until
such entity, firm or person expressly agrees, in writing, to assume and discharge the duties and obligations of the Employer under this Agreement. This Agreement shall be binding upon the parties hereto, their successors, beneficiaries, heirs and
personal representatives. 
  

	 	C.	Amendment or Revocation: 

  
 It is agreed by and between the parties hereto that, during the lifetime of the Employee, this Agreement may be amended or revoked at any time or times,
in whole or in part, by the mutual written consent of the Employee and the Employer. 
  

 10 









	 	D.	Gender: 

  
 Whenever in this Agreement words are used in the masculine, feminine or neuter gender, they shall be read and construed as being in others of the
masculine, feminine or neuter gender, whenever they should so apply. 
  

	 	E.	Effect on Other Employee Benefit Plans: 

  
 Nothing contained in this Agreement shall affect the right of the Employee to participate in or be covered by any qualified or non-qualified pension,
profit-sharing, group, bonus or other supplemental compensation or fringe benefit plan constituting a part of the Employer’s existing or future compensation structure. However, any payments made under this Agreement shall not constitute
compensation for purposes of determining benefits under any other plan or arrangement. 
  

	 	F.	Headings: 

  
 Headings and subheadings in this Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement. 

 

	 	G.	Applicable Law: 

  
 The validity and interpretation of this Agreement shall be governed by the laws of the State of California, other than those laws denominated choice of
law rules and except to the extent that state law is preempted by ERISA or other federal law, and, where applicable, shall be governed by the rules and regulations of the California Commissioner of Financial Institutions, the Federal Deposit
Insurance Corporation, the Federal Reserve Board of Governors and the Office of the Comptroller of the Currency. 
  

	 	H.	12 U.S.C. § 1828(k): 

  
 Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. §
1828(k) and any regulations promulgated thereunder. 
  

	 	I.	Entire Agreement: 

  
 This Agreement, including the schedules and exhibits attached hereto and incorporated herein by this reference, contains all of the covenants and
agreement, and supersedes any and all other agreements, either oral or in writing, between the parties with respect to the subject matter of this Agreement. Each party to this Agreement acknowledges that no other representations, inducements,
promises, or 
  

 11 








 agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party,
which are not set forth herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party. 
  

	 	J.	Partial Invalidity: 

  
 If any term, provision, covenant, or condition of this Agreement is determined by an arbitrator or a court, as the case may be, to be invalid, void, or
unenforceable, such determination shall not render any other term, provision, covenant, or condition invalid, void, or unenforceable, and this Agreement shall remain in full force and effect notwithstanding such partial invalidity. 
  

	 	K.	Not a Contract of Employment: 

  
 This Agreement shall not be deemed to constitute a contract of employment between the parties hereto, nor shall any provision hereof restrict the right of
the Employer to discharge the Employee, or restrict the right of the Employee to terminate employment. 
  

	 	L.	Notices: 

  
 Any notice required or permitted of either the Employee or the Employer under this Agreement shall be deemed to have been duly given, if by personal
delivery, upon the date received by the party or its authorized representative; if by facsimile, upon transmission to a telephone number previously provided by the party to whom the facsimile is transmitted as reflected in the records of the party
transmitting the facsimile and upon reasonable confirmation of such transmission; and if by mail, on the third day after mailing via U.S. first class mail, registered or certified, postage prepaid and return receipt requested, and addressed to the
party at the address given below for the receipt of notices, or such changed address as may be requested in writing by a party. 
  

			
	 If to the Employer:
	 	 Greater Bay Bancorp

	 	 	 1870 Broadway

	 	 	 Redwood City, CA 94063

	 	 	 Attention: Human Resources

		
	 If to the Employee:
	 	 Kenneth Shannon

	 	 	 Address

	 	 	 City, State, Zip


  

 12 









	 	M.	Opportunity To Consult With Independent Advisors: 

  
 The Employee acknowledges that the Employee has been afforded the opportunity to consult with independent advisors of his or her choosing, including,
without limitation, legal counsel, accountants and tax advisors, regarding (i) the benefits granted to the Employee under the terms of this Agreement, (ii) the terms and conditions which may affect the amount of and the Employee’s right to
these benefits, (iii) the benefits Employee is waiving under prior plans and agreements, and (iv) the personal tax effects of the benefits granted to the Employee under the terms of this Agreement, including, without limitation, the effects of any
federal or state taxes, Section 280G of the Code, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Employee acknowledges and agrees shall be the sole responsibility
of the Employee notwithstanding any other term or provision of this Agreement. The Employee further acknowledges and agrees that the Employer shall have no liability whatsoever related to any such personal tax effects or other personal costs,
expenses, or liabilities applicable to the Employee and further specifically waives any right for the Employee and his or her heirs, beneficiaries, legal representatives, agents, successors, and assigns to claim or assert liability on the part of
the Employer related to the matters described above in this subparagraph. The Employee further acknowledges and agrees that the Employee has read, understands and consents to all of the terms and conditions of this Agreement, and that the Employee
enters into this Agreement with a full understanding of its terms and conditions. 
  

	XII.	ADMINISTRATIVE PROVISIONS AND CLAIMS PROCEDURE 

  

	 	A.	Named Fiduciary and Plan Administrator: 

  
 The “Named Fiduciary and Plan Administrator” of the Executive Plan, of which this Agreement is a part, shall be Greater Bay Bancorp until its
resignation or removal by the Employer’s Board of Directors. As Named Fiduciary and Plan Administrator, Greater Bay Bancorp shall be responsible for the management, control and administration of the Executive Plan. The Named Fiduciary and Plan
Administrator shall have sole discretion and authority to interpret the Executive Plan and this Agreement and to decide all questions regarding eligibility for and the amount of any benefits to be provided under the Executive Plan and this
Agreement. The Named Fiduciary and Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the Executive Plan, including the employment of advisors and the delegation of ministerial duties to
qualified individuals. 
  

 13 









	 	B.	Claims Procedure: 

  
 In the event a dispute arises over benefits under the Executive Plan or this Agreement and benefits are not paid to the Employee and a claimant feels that
he or she is entitled to receive such benefits, then a written claim for benefits must be made to the Named Fiduciary and Plan Administrator named above. The Named Fiduciary and Plan Administrator shall give any such written claim a full and fair
review. If the claim is denied, in whole or in part, the Named Fiduciary and Plan Administrator will furnish the claimant with a written notice of this denial. This written notice must be provided to the claimant within a reasonable period of time
(generally 90 days) after the receipt of the claim by the Named Fiduciary and Plan Administrator. There may be times when this 90-day period will be extended. Such an extension may be made, however, only where there are special circumstances that
are communicated to the claimant in writing within the initial 90-day period. If there is an extension, the Named Fiduciary and Plan Administrator will render a decision as soon as possible, but not later than 180 days after receipt by the Named
Fiduciary and Plan Administrator of the written claim. The written notice of denial must provide a specific reason or reasons for such denial, specific reference to the provisions of the Executive Plan or this Agreement upon which the denial is
based, and a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary. The written notice of denial shall further indicate the additional steps to be
taken by the claimant if a further review of the claim denial is desired. A claim shall be deemed denied if the Named Fiduciary and Plan Administrator fail act on the claim within the initial 90-day period or any extension thereof. If the claimant
does not request a review of the denial of his or her claim in accordance with the procedures set forth below, the decision of the Named Fiduciary and Plan Administrator on such claim shall be final and binding on all parties. 
  

	 	C.	The Claims Review Procedure: 

  
 If a claim for benefits is denied or deemed denied, and the claimant desires a second review, the claimant must file a request for review, in writing,
with the Named Fiduciary and Plan Administrator. SUCH A REQUEST FOR REVIEW MUST BE SUBMITTED NO LATER THAN 60 DAYS AFTER THE CLAIMANT RECEIVES WRITTEN NOTIFICATION OF THE DENIAL OF THE ORIGINAL CLAIM FOR BENEFITS, OR IF NO WRITTEN DENIAL OF THE
ORIGINAL CLAIM WAS PROVIDED, NO LATER THAN 60 DAYS AFTER THE DEEMED DENIAL OF THE CLAIM. The claimant may review all pertinent documents relating to the denial of the claim and submit any issues and comments, in writing, to the Named Fiduciary and
Plan Administrator. The Named Fiduciary and Plan Administrator will give the request for review a full and fair review. If the claim is denied on such second review, the Named 
  

 14 








 Fiduciary and Plan Administrator will provide you with written notice of this denial within 60 days of
the Named Fiduciary and Plan Administrator’s receipt of the written request for review. There may be times when this 60-day period may be extended. Such an extension may only be made, however, where there are special circumstances which are
communicated to the claimant in writing within the initial 60-day period. If there is an extension, a decision shall be made as soon as possible, but not later than 120 days after receipt by the Named Fiduciary and Plan Administrator of your claim
for review. The Named Fiduciary and Plan Administrator’s decision on your request for review will be communicated to you in writing and will include specific references to the pertinent provisions of the Executive Plan or this Agreement on
which the decision is based. If the Named Fiduciary and Plan Administrator’s decision on review is not furnished to the claimant within the time limitations described above, the claim will be deemed denied on review. The decision of the Named
Fiduciary and Plan Administrator on such a review shall be final and binding on all parties. 
  

	 	D.	Arbitration: 

  
 All claims, disputes and other matters in question arising out of or relating to this Agreement or the breach or interpretation thereof, other than those
matters which are to be determined by the Named Fiduciary and Plan Administrator in its sole and absolute discretion, shall be resolved by binding arbitration before an arbitrator, selected by the mutual agreement of the parties, from the Judicial
Arbitration and Mediation Services, Inc. (“JAMS”), in San Francisco, California. In the event JAMS is unable or unwilling to conduct the arbitration provided for under the terms of this Paragraph, or has discontinued its business, the
parties agree that an arbitrator, selected by the mutual agreement of the parties, from the American Arbitration Association (“AAA”), in San Francisco, California, shall conduct the binding arbitration referred to in this Paragraph. Notice
of the demand for arbitration shall be filed in writing with the other party to this Agreement and with JAMS (or AAA, if necessary). In no event shall the demand for arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. The arbitration shall be subject to commercial rules and procedures used or established by JAMS, or if there are none, the
commercial rules and procedures used or established by AAA. Notwithstanding anything to the contrary in the JAMS (or AAA) rules and procedures, the arbitration shall provide for (i) written discovery and depositions adequate to give the parties
access to documents and witnesses that are essential to the dispute and (ii) a written decision by the arbitrator that includes the essential findings and conclusions upon which the decision is based. Subject to Subparagraph XII.E below, the parties
shall bear their own costs and attorneys’ fees incurred in conducting the arbitration, and shall split equally the fees and administrative costs charged by the arbitrator and JAMS (or AAA) unless required 
  

 15 








 otherwise by applicable law. Any award rendered by JAMS (or AAA) shall be final and binding upon the
parties, and as applicable, their respective heirs, beneficiaries, legal representatives, agents, successors and assigns, and may be entered in any court having jurisdiction thereof. Any arbitration hereunder shall be conducted in Palo Alto,
California, unless otherwise agreed to by the parties. 
  

	 	E.	Attorneys Fees: 

  
 In the event of any arbitration or litigation concerning any controversy, claim or dispute between the parties hereto, arising out of or relating to this
Agreement or the breach hereof, or the interpretation hereof, the prevailing party shall be entitled to recover from the non-prevailing party reasonable expenses, attorneys’ fees and costs incurred in connection therewith or in the enforcement
or collection of any judgment or award rendered therein. The “prevailing party” means the party determined by the arbitrator(s) or court, as the case may be, to have most nearly prevailed, even if such party did not prevail in all matters,
not necessarily the one in whose favor a judgment is rendered. 
  

	XIII.	DISCRETION OF THE BOARD TO ACCELERATE PAYOUT 

  
 Notwithstanding any of the other provisions of this Agreement, the Board of Directors of the Employer may, if determined in its sole and absolute
discretion to be appropriate, accelerate the payment of the amounts due under the terms of this Agreement, provided that the Employee: (i) consents to the revised payment terms determined appropriate by the Employer’s Board of Directors; and
(ii) does not negotiate or in anyway influence the terms of proposed altered/accelerated payment (said decision to be made solely by the Employer’s Board of Directors and offered to the Employee on a “take it or leave it” basis).

  

 16 








 IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the
original thereof on the first day set forth hereinabove, and that, upon execution, each has received a conforming copy. 
  

					
	 	 	GREATER BAY BANCORP
			
	 	 	By:	 	/S/    KIMBERLY S. BURGESS        
	
	 	 	 	

	 Witness
	 	 	 	 Kimberly S. Burgess

	 	 	 	 	 Executive Vice President &

	 	 	 	 	 Chief Administrative Officer

			
	 	 	 	 	/S/    KENNETH SHANNON        
	
	 	 	 	

	 Witness
	 	 	 	 Kenneth Shannon


  

 17 








 SCHEDULE A 
  


				
	 End of Year
 Prior to Termination

	 	Applicable
Percentage

	 
	12/31/02	 	0	%
	12/31/03	 	0	%
	12/31/04	 	0	%
	12/31/05	 	0	%
	12/31/06	 	0	%
	12/31/07	 	20	%
	12/31/08	 	40	%
	12/31/09	 	60	%
	12/31/10	 	80	%
	12/31/11	 	100	%

  

 18 








 SCHEDULE B 
  
 WAIVER OF PRIOR PLAN BENEFITS 
  
 Not Applicable 
  

 19 








 SCHEDULE C 
  

SUPPLEMENTAL BENEFITS 
  
 In addition to the Employee Benefits specified elsewhere in this Agreement, the Employee shall be entitled to receive the following
supplemental benefits (the “Supplemental Benefits”): 
  
 Secular Trust Defined Benefit. Provided that the Employee has not exercised the Employee’s withdrawal rights under the Trust, the Employer shall make pre-tax contributions to the Trust, pursuant to
paragraph IX of the Agreement, based on the table below. Contributions shall be grossed up for the maximum marginal tax so that the net contribution made to the Trust shall have no incremental tax impact on the Employee. All taxes due on the
contribution shall be considered. This will include (but not be limited to) the taxes outlined below with the rates applicable as of the date of this Amendment. 
  


																
	 Net Annual
 Contribution to Trust

	  	Federal Tax
Rate

	 	 	State Tax
Rate

	 	 	FICA Tax
Rate

	 	 	Medicare Tax
Rate

	 
	 2003
	  	$	83,922	  	38.60	%*	 	9.30	%	 	7.65	%**	 	1.45	%
	 2004
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2005
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2006
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2007
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2008
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2009
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2010
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2011
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2012
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2013
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 
	 2014
	  	$	83,922	  	 	 	 	 	 	 	 	 	 	 	 



	*	Reducing to 37.6% in 2004 and 2005 and to 35% in 2006 and thereafter. 


	**	The Social Security portion of the FICA tax only applies in years where the Employee has not otherwise reached the maximum tax. The Medicare tax only applies in years where the
Employee has otherwise reached the maximum non Medicare portion of the FICA tax. 

  
 The aggregate amount of the foregoing contributions shall be subject to adjustment, from time to time, to ensure that the Trust is
adequately funded to afford the Employee with a projected defined benefit equal to the Applicable Percentage of Sixty Nine Thousand Two Hundred Seventy Six and 00/100th Dollars ($69,276.00) per annum 
  

 20 








 for twenty-three (23) years commencing the year in which the Employee attains age sixty-two (62) with
annual increases of 3% thereafter. In the event that contributions made by the Employer to the Trust as provided above are determined to be insufficient to fund the foregoing Supplemental Benefits, the Employer shall make such further contributions
to the Trust as may be necessary to fund fully such Supplemental Benefits. Such determination and adjusting contributions, if required, may be made from time to time at the discretion of the Employer, but in all events not later than the date on
which the Employee becomes eligible to begin receiving a retirement benefit under this Agreement. Provided that the foregoing final adjusting contribution, if required, has been made, the Employer shall have no obligation to make further
contributions to the Trust once the Employee becomes eligible to begin receiving a retirement benefit under this Agreement. 
  
 Notwithstanding anything herein or in the Agreement to the contrary, the obligation of the Employer to make the contributions to the Trust
as specified above shall terminate automatically upon the forfeiture or other termination of the Employee’s right to receive a retirement benefit, as provided in this Agreement. 
  

 21 








 SCHEDULE D 
  

SECULAR TRUST AGREEMENT 
  

 22