Exhibit 10.95


 


FIRST AMENDED AND RESTATED


SANTA LUCIA BANK


SALARY CONTINUATION AGREEMENT


 


This
First Amended and Restated Santa Lucia Bank Salary Continuation Agreement
(hereinafter “Agreement”) is made and entered into effective as of December 17,
2008, by and between Santa Lucia Bank,
a bank organized and existing under the laws of the state of California
(hereinafter the “Bank” or “Employer”) and John C. Hansen,
an executive of the Bank (hereinafter “Executive”);


 


WHEREAS it is the parties’ intent to comply with the final regulations
under Internal Revenue Code Section 409A, issued on April 10, 2007 by
the Internal Revenue Service (IRS) and the Treasury Department;


 


WHEREFORE, the Bank and Executive hereby agree to amend and restate the
original Santa Lucia Bank Salary Continuation Agreement effective as of April 15,
1998 (hereinafter “Original Agreement”), and thereafter amended by virtue of a January 10,
2001 Amendment, an August 1, 2003 Amendment,  a January 21, 2004 Amendment, and
finally, an April 12, 2007 Amendment, and further agree that this First
Amended and Restated Santa Lucia Bank Salary Continuation Agreement shall
amend, supersede and replace the Original Agreement (as amended) in its
entirety;


 


WHEREFORE, the parties hereby agree to the following;


 


RECITALS


 


WHEREAS, Executive has been and continues to be a valued Executive of
the Bank, and is now serving the Bank;


 


WHEREAS, Executive’s experience and knowledge of the affairs of the
Employer and the banking industry are extensive and valuable;


 


WHEREAS, it is deemed to be in the best interests of the Employer to
provide Executive with certain fringe benefits, on the terms and conditions set
forth herein, in order to reasonably induce Executive to remain in the Employer’s
employment; and


 


WHEREAS, Executive and the Employer wish to specify in writing the
terms and conditions upon which this additional compensatory incentive will be
provided to Executive;


 


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


 


1

















 


AGREEMENT


 


1.0                               Terms and Definitions.


 


For the purposes of this
Agreement, the following terms shall have the meanings indicated below, unless
the context clearly indicates otherwise. In the event any provision of this
Agreement is ambiguous, then it shall be interpreted in a manner that is
consistent with Internal Revenue Code Section 409A. Subject to the
forgoing, the terms below shall be defined as follows:


 


1.1                               Accrued
Liability Balance. The term “Accrued Liability Balance” shall mean the
amount accrued by the Bank to fund the future benefit expense associated with
this Agreement, as of the end of the month preceding the Executive’s Separation
from Service. The Bank shall account for this benefit using Generally Accepted
Accounting Principles, regulatory accounting guidance of the Bank’s primary
federal regulator, and other applicable accounting guidance, including but not
limited to Accounting Principles Board Opinion Number 12 (“APB 12”) as amended
by Statement of Financial Accounting Standards Number 106 (“FAS 106”) and the
Discount Rate. Accordingly, the Bank shall establish a liability retirement
account for the Executive into which appropriate accruals shall be made using
the applicable Discount Rate.  Any one of
a variety of amortization methods may be used to determine the Accrual Balance.  However, once chosen, the method must be
consistently applied.  For illustrative
purposes ONLY, a sample table showing possible prospective Accrued Liability
Balance numbers shall be attached hereto as Exhibit “A”; however this Exhibit A
is merely a sample of the potential Accrued Liability Balance based on a future
given date and using a sample discount rate. 
The actual Accrued Liability Balance will be determined based on the
actual Discount Rates in effect over time.


 


1.2                               Administrator.  The Bank shall be the “Administrator”
and, solely for the purposes of ERISA as discussed herein, the “fiduciary” of
this Agreement where a fiduciary is required by ERISA.


 


1.3                               Bank.  
For the purpose of
this Agreement, the term “Bank” or “Employer” shall be read so as to include
the Santa Lucia Bank holding company, Santa Lucia Bancorp, when permissible.


 


1.4                               Board
of Directors.   The “Board of
Directors” shall mean the Board of Directors for the Bank, hereinafter “the
Board”.


 


1.5                               The Code. 
The “Code” shall mean
the Internal Revenue Code of 1986, as amended.


 


1.6                               Discount Rate Discount Rate.  The
term “Discount Rate” means the rate used by the Plan Administrator for in any
specified year to accrue benefits under this Plan; however, the Plan
Administrator, in its sole discretion, may adjust the Discount Rate to maintain
the rate within reasonable standards according to GAAP (Generally Accepted
Accounting Principles).


 


2

















 


1.7                               Early Retirement. 
The term “Early
Retirement” shall mean the Executive’s Separation From Service on or after
attaining the “Early Retirement Age” of sixty-two (62), but before attaining
the Normal Retirement Age, and for any reason other than for Cause.


 


1.8                               Effective Date. 
The term “Effective
Date” shall mean the date first written above.


 


1.9                               ERISA.  The term “ERISA” shall mean the Employee Retirement Income Security Act
of 1974, as amended.


 


1.10                        Executive Benefit. 
The term “Executive
Benefit” shall mean the benefit amounts determined pursuant to Paragraphs 1
through 6 (including sub-paragraphs, as applicable), forfeited, reduced or
adjusted to the extent:  (a) required
under the other provisions of this Agreement; (b) required by reason of
the lawful order of any regulatory agency or body having jurisdiction over the
Employer; or (c) required in order for the Employer to comply with any and
all applicable state and federal laws, including, but not limited to, income,
employment and disability income tax laws (e.g., FICA,
FUTA, SDI).


 


1.11                        IRC 409A. The term “IRC 409A” shall refer to the final
regulations issued by the IRS and the Treasury Department under Section 409A
of the Code.


 


1.12                        Normal Retirement/ Normal
Retirement Age.  The term “Normal Retirement” shall mean the Executive’s Separation From
Service on or after attaining the “Normal Retirement Age” of sixty-five (65)
for any reason other than for Cause.


 


1.13                        Plan Year. 
The “Plan Year” shall
mean the calendar year.


 


1.14                        Separation
From Service/ Termination of Employment.  The terms “Separation From Service”
(Separates From Service) and “Termination of Employment” shall be used
interchangeably for the purposes of this Agreement and shall be interpreted in
accordance with the provisions of IRC 409A. Currently, IRC 409A provides that,
whether a termination of employment has occurred is determined based on whether
the facts and circumstances indicate that the Bank and the Executive reasonably
anticipate that no further services will be performed after a certain date or
that the level of bona fide services the employee will perform after such date
(whether as an employee or as an independent contractor) will permanently
decrease to no more than twenty (20%) percent of the average level of bona fide
services performed (as an employee or an independent contractor) over the
immediately preceding thirty-six (36) month period (or the full period of
services to the employer  if the employee
has been providing services to the employer less than 36 months). There shall
be no Separation From Service while the Executive is on military leave, sick
leave or other bona fide leave of absence, as long as such leave does not
exceed six (6) months, or if longer, so long as the individual retains a
right to re-employment with the service recipient under an applicable statute
or by contract.


 


1.15                        Specified
Employee. The term “Specified Employee” shall be defined in accordance
with IRC 409A. At present, and in accordance with IRC 409A, the term “Specified


 


3

















 


Employee” means an employee who, as of the date of the employee’s Separation
from Service, is a key employee of an employer of which any stock is publicly
traded on an established securities market or otherwise. An employee is a key
employee if the employee meets the requirements of section 416(i)(1)(A)(i),
(ii), or (iii) (applied in accordance with the regulations thereunder and
disregarding section 416(i)(5)) at any time during the twelve (12) month period
ending on a specified employee identification date. If Executive is a key
employee as of a specified employee identification date, then Executive shall
be treated as a key employee for the entire twelve (12) month period beginning
on the specified employee effective date.


 


1.16                        Termination
for Cause. The term “Termination for Cause” shall mean  Executive’s Termination of employment by
reason of any of the following:


 


A.                                   Executive’s
personal dishonesty, incompetence or willful misconduct;


 


B.                                     Executive’s
breach of fiduciary duty involving personal profit;


 


C.                                     Executive’s
intentional failure to perform Executive’s duties for the Bank after a written
demand for performance is given to Executive by the Board which demand
specifically identifies the manner in which the Board believes that Executive
has not performed his duties;


 


D.                                    Executive’s willful
violation of any law, rule, regulation or final cease and desist order (other
than traffic violations or similar minor offenses) to the extent detrimental to
the Bank’s business or reputation; or


 


E.                                      Executive’s
material breach of any provision of this Agreement.


 


2.                                      Scope, Purpose and Effect.


 


2.1                               Contract
of Employment.  Although this
Agreement is intended to provide Executive 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 Executive and the Employer nor
shall any provision of this Agreement restrict or expand the right of the
Employer to terminate Executive’s employment. 
This Agreement shall have no impact or effect upon any separate written
Employment Agreement which Executive may have with the Employer, it being the
parties’ intention and agreement that unless this Agreement is specifically
referenced in said Employment Agreement (or any modification thereto), this
Agreement (and the Employer’s obligations hereunder) shall stand separate and
apart and shall have no effect on or be affected by, the terms and provisions
of said Employment Agreement.


 


2.2                               Fringe Benefit. 
The benefits provided
by this Agreement are granted by the Bank as a fringe benefit to Executive and
are not a part of any salary reduction plan or any arrangement deferring a
bonus or a salary increase. Executive has no option to take any current
payments or bonus in lieu of the benefits provided by this Agreement.


 


4

















 


2.3                               Prohibited Payments. 
Notwithstanding
anything in this Agreement to the contrary, if any payment made under this
Agreement is a “golden parachute payment” as defined in Section 28(k) of
the Federal Deposit Insurance Act (12 U.S.C. section 1828(k) and Part 359
of the Rules and Regulations of the Federal Deposit Insurance
Corporation  (collectively, the “FDIC
Rules”) or is otherwise prohibited, restricted or subject to the prior approval
of a Bank Regulator, no payment shall be made hereunder without complying with
said FDIC Rules.


 


2.4                               Additional
Prohibited Payments.  If the Bank is subject to the executive
compensation limitations under the United States Treasury Department’s Troubled
Asset Relief Program (“TARP”) at
the time Executive becomes entitled to any payment under this Agreement, and if
such payment, together with any other payments which Executive has the right to
receive from the Bank, exceed the limits allowed for Executive established
under TARP, then the aggregate payments to Executive pursuant to this Agreement
and any other agreement with Executive shall be reduced to the largest amount
as will result in no portion of such payments violating the executive
compensation limitations under TARP.


 


3.                                      Delay in Payments for Specified Employee in the Event of a  Separation From Service.


 


3.1                               Internal Revenue Code Section 409A
Compliance. It
is the intent of the parties to comply with all applicable Internal Revenue
Code Sections, including, but not limited to, IRC 409A. Furthermore, for the
purposes of this Agreement, IRC Section 409A shall be read to include any
related or relevant IRS Notices or clarifications. While it is understood that
a general IRC 409A savings clause will not be effective, the parties intend
that any ambiguities regarding any terms or payouts contained herein shall be
interpreted in a manner consistent with IRC 409A.


 


Thus, for any benefits payable pursuant to this Agreement due to a
Separation From Service, if the individual is a Specified Employee (as defined
herein and by IRC 409A) as of the date of the Separation From Service, and the
Employer’s stock is publicly traded on an established securities market or
otherwise, any such benefit shall be withheld for six (6) months following
such Separation From Service in order to comply with IRC 409A. In addition, for
any individual affected by this six (6) month delay in payment imposed by
IRC 409A, and if and/or when applicable, the aggregate amount of the first
seven (7) months of installments shall be paid at the beginning of the
seventh month following the date of Separation From Service. Monthly
installment payments shall continue thereafter if called for.


 


4.                                      Executive Benefits Payments.


 


4.1                               Payments
Upon Normal Retirement.  In the event Executive Separates From Service
on or after qualifying for Normal Retirement (for any reason other than for
Cause or because of death), then Executive shall be entitled to be paid an
annual Executive Benefit equal to Thirty Thousand Dollars ($30,000).  This annual Executive Benefit shall be paid
in twelve (12) substantially equal monthly installments on the first day of
each month, beginning with the month following the month in which Executive
Separates From Service and continuing until the death of the Executive.


 


5

















 


4.2                               Payments
Upon Early Retirement.   As
Executive has already attained the Early Retirement Age, in the event he
Separates From Service prior to attaining the Normal Retirement Age for any
reason other than for Cause (or due to death), then Executive shall be entitled
to be paid an  Executive Benefit
calculated as follows: an annual lifetime annuity based on the Accrued
Liability Balance as of the date of Early Retirement, taking into consideration
the discount rate and mortality assumptions in use by the Bank as of the Early
Retirement Date. This annual amount shall remain consistent for the duration of
the benefit. This annual Executive Benefit shall be paid in twelve (12)
substantially equal monthly installments, with payments commencing on the first
day of the first month following Executive’s Separation From Service and
continuing until the death of the Executive. For illustrative purposes ONLY, a
sample table showing possible prospective Accrued Liability Balance figures and
resulting Early Retirement Benefit amounts is attached hereto as Exhibit “A”;
however this Exhibit A is merely a sample of the potential Executive
Benefit based on a given Early Retirement date and using a sample discount
rate. The actual Accrued Liability Balance and resulting benefit will be
determined at the time of Early Retirement, if applicable.


 


4.3                               Termination
for Cause.  In the event
Executive’s Employment with the Employer is Terminated at any time for Cause
(including after qualifying for Early or Normal Retirement) as defined herein,
then he shall forfeit any and all rights and benefits he may have under the
terms of this Agreement and shall have no right to be paid any of the amounts
which would otherwise be due or paid to the Executive by the Employer pursuant
to the terms of this Agreement.


 


4.4                               Death.
There are no death benefits payable under this Agreement (such benefits are
described by a Life Insurance Endorsement Method Split Dollar Plan Agreement,
if any), nor will Executive Benefit Payments be made after the Executive dies,
regardless of whether such death occurs before or after termination, and
regardless of whether payments have already begun pursuant to this Agreement.


 


5.0                               IRS
Section 280G Issues.   If all
or any portion of the amounts payable to Executive under this Agreement, either
alone or together with other payments which Executive 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), Executive shall be responsible for the payment
of such excise tax and Employer (and its successor) shall be responsible for
any loss of deductibility related thereto; provided, however, that Employer and
Executive shall cooperate with each other and use all reasonable efforts to
minimize to the fullest extent possible (and in accordance with IRC 409A)  the amount of excise tax imposed by Section 4999
of the Code.  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 by Executive is greater than
the amount initially so determined, then Executive shall pay an amount equal to
the sum of such additional excise taxes and any interest, fines and penalties
resulting from such underpayment.  The
determination of the amount of any such excise taxes shall be made by the
independent accounting firm employed by the Employer immediately prior to the
change in control or such other


 


6

















 


independent accounting firm or advisor as may be mutually agreeable to
Employer and Executive in the exercise of their reasonable good faith judgment.


 


6.0                               Administrative
and Claims Provision.


 


6.1                               Named
Fiduciary and Plan Administrator.  The
“Named Fiduciary and Plan Administrator” of this executive plan shall be the
Bank until its resignation or removal by the Board of Directors. As Named
Fiduciary and Plan Administrator, the Bank shall be responsible for the
management, control and administration of this executive plan. The Named Fiduciary
may delegate to others certain aspects of the management and operation
responsibilities of the plan, including employment of advisors and the
delegation of ministerial duties to qualified individuals.


 


6.2                               Claims
Procedure.  In the event a
dispute arises over the benefits under this Agreement and benefits are not paid
to the Employee (or to the Employee’s beneficiary[ies], if applicable) and such
claimants feel they are entitled to receive such benefits, then a written claim
must be made to the Employer (as the plan administrator) in accordance with the
following procedures:


 


A.                                   Written Claim.  The claimant may file a written request for
such benefit with the Administrator.


 


B.                                     Claim
Decision.  Upon receipt of such claim, 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
for reasonable cause 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.


 


If the claim is denied in whole or in part, 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)                                  The
specific reference to pertinent provisions of the 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 such material or
information is necessary;


(iv)                              Appropriate
information as to the steps to be taken if the claimant wishes to submit the
claim for review and the time limits applicable to such procedures; and


(v)                                 A
statement of the claimant’s right to bring a civil action under ERISA


 


7

















 


Section 502(a) following an adverse
benefit determination on review.


 


C.                                     Request for
Review.  Within sixty (60) days after
receiving notice from the Administrator that a claim has been denied (in part
or all of the claim), then claimant (or their duly authorized representative)
may file with the Administrator, a written request for a review of the denial
of the claim.


 


The claimant (or his duly authorized representative) 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.


 


D.                                    Decision on
Review.  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 an extension of time for
processing the claim, written notice of the extension shall be furnished to the
claimant prior to the termination of the initial sixty (60) day period. In no
event shall such extension exceed a period of sixty (60) days from the end of
the initial period. The notice of extension must set forth the special
circumstances requiring an extension of time and the date by which the
Administrator expects to render its decision.


 


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.


 


The Administrator shall notify the claimant in writing of its decision
on review.  The Committee 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 the Agreement on which the denial is
based;


(iii)                               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


(iv)                              A
statement of the claimant’s right to bring a civil action under ERISA Section 502(a).


 


7.0                               Attorneys’
Fees.  If any legal action or
other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in


 


8

















 


connection with any of the provisions of this Agreement, the successful
or prevailing party or parties shall be entitled to recover reasonable
attorneys’ fees and other costs incurred in that action or proceeding in
addition to any other relief to which it or they may be entitled. The “prevailing
party” means any party determined by the arbitrator(s) or court to be
entitled to money payments from the other, not necessarily the party in whose
favor a judgment is rendered.


 


8.0                               Status
as an Unsecured General Creditor and Rabbi Trust.  Notwithstanding anything contained herein
to the contrary:  (i) Executive
shall have no legal or equitable rights, interests or claims in or to any
specific property or assets of the Employer as a result of this Agreement; (ii) none
of the Bank’s assets shall be held in or under any trust for the benefit of
Executive or held in any way as security for the fulfillment of the obligations
of the Bank under this Agreement; (iii) all of the Bank’s assets shall be
and remain the general unpledged and unrestricted assets of the Bank; (iv) the
Bank’s obligation under this Agreement shall be that of an unfunded and
unsecured promise by the Bank to pay money in the future; and (v) Executive
shall be an unsecured general creditor with respect to any benefits which may
be payable under the terms of this Agreement.


 


Notwithstanding subparagraphs (i) through (v) above, the Bank
and Executive acknowledge and agree that, in the event of a Change in Control,
upon request of Executive, or in the Bank’s discretion if Executive does not so
request and the Bank nonetheless deems it appropriate, the Bank shall
establish, not later than the effective date of the Change in Control, a Rabbi
Trust or multiple Rabbi Trusts (the “Trust” or “Trusts”) upon such terms and
conditions as the Bank, in its sole discretion, deems appropriate and in
compliance with applicable provisions of the Code, in order to permit the Bank
to make contributions and/or transfer assets to the Trust or Trusts to
discharge its obligations pursuant to this Agreement.  The principal of the Trust or Trusts and any
earnings thereon shall be held separate and apart from other funds of the Bank
to be used exclusively for discharge of the Bank’s obligations pursuant to this
Agreement and shall continue to be subject to the claims of the Bank’s general
creditors until paid to Executive in such manner and at such times as specified
in this Agreement.


 


9.0                               Miscellaneous.


 


9.1                               Opportunity
To Consult With Independent Advisors. 
Executive acknowledges that he has been afforded the opportunity to
consult with independent advisors of his choosing including, without
limitation, accountants or tax advisors and counsel regarding both the benefits
granted to him under the terms of this Agreement and the (i) terms and
conditions which may affect Executive’s right to these benefits and (ii) personal
tax effects of such benefits 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 Executive acknowledges and agrees shall be the
sole responsibility of Executive, provided, however, that Employer and
Executive shall cooperate with each other and use all reasonable efforts to
minimize to the fullest extent possible the amount of excise tax imposed by Section 280G
and 4999 of the Code. In the event the parties are unable to eliminate such
excise taxes, Executive further acknowledges and agrees that the Bank shall
have no liability whatsoever related to any such personal tax effects or other
personal costs, expenses, or liabilities applicable to Executive and further
specifically waives any right for himself or herself, and his or


 


9

















 


her heirs, beneficiaries, legal
representatives, agents, successor and assign to claim or assert liability on
the part of the Bank related to the matters described above in this paragraph.
Executive further acknowledges that he has read, understands and consents to
all of the terms and conditions of this Agreement, and that he enters into this
Agreement with a full understanding of its terms and conditions.


 


9.2                               Notice.  Any notice required or permitted of either
Executive or the Bank 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
  Bank:

  	
  7480 El Camino Real

  
	
   

  	
  Atascadero, CA 93422

  
	
   

  	
  FAX (805) 466-1058

  
	
   

  	
   

  
	
  If to the
  Executive:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


9.3                               Assignment.  Executive shall have no power or right to
transfer, assign, anticipate, hypothecate, modify or otherwise encumber any
part or all of the amounts payable hereunder, nor, prior to payment in
accordance with the terms of this Agreement, shall any portion of such amounts
be:  (i) subject to seizure by any
creditor of Executive, by a proceeding at law or in equity, for the payment of
any debts, judgments, alimony or separate maintenance obligations which may be
owed by Executive; or (ii) transferable by operation of law in the event
of bankruptcy, insolvency or otherwise. Any such attempted assignment or
transfer shall be void. In the event Executive or any beneficiary attempts
assignment, communication, hypothecation, transfer or disposal of the benefits
hereunder, any such attempted transfer 
or assignment shall be void.


 


9.4                               Binding
Effect/Merger or Reorganization. 
This Agreement shall be binding upon and inure to the benefit of Executive
and the Bank.  Accordingly, the Bank
shall not merge or consolidate into or with another corporation, or reorganize
or sell substantially all of its assets to another corporation, firm or person,
unless and until such succeeding or continuing corporation, firm or person
agrees to assume and discharge the obligations of the Bank under this
Agreement.  In the alternative, the
holding company may agree to assume and discharge the obligation of the Bank
under this Agreement. Upon the occurrence of such event, the term “Bank” as
used in this Agreement shall be deemed to refer to such surviving or successor
firm, person, entity or corporation, or the holding company, as the case may
be.


 


10

















 


9.5                               Nonwaiver.  The failure of either party to enforce at any
time or for any period of time any one or more of the terms or conditions of
this Agreement shall not be a waiver of such term(s) or condition(s) or
of that party’s right thereafter to enforce each and every term and condition
of this Agreement.


 


9.6                               Partial
Invalidity. If any terms, 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 the
Agreement shall remain in full force and effect notwithstanding such partial
invalidity.


 


9.7                               Entire
Agreement.  This Agreement
supersedes any and all other agreements, either oral or in writing, between the
parties with respect to the subject matter of this Agreement and contains all
of the covenants and agreements between the parties with respect thereto.  Each party to this Agreement acknowledges
that no other representations, inducements, promises, or 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.


 


9.8                               Modifications.  Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or such party’s
authorized representative, and only to the extent that it is compliant with all
applicable codes and statutes, including but not limited to IRS Code Section 409A.


 


9.9                               Paragraph
Headings.  The paragraph headings
used in this Agreement are included solely for the convenience of the parties
and shall not affect or be used in connection with the interpretation of this
Agreement.


 


9.10                        No
Strict Construction.  The
language used in this Agreement shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any person.


 


9.11                        Governing
Law.  The laws of the State of
California, other than those laws denominated choice of law rules, and where
applicable, the rules and regulations of the Board of Governors of the
Federal Reserve System, Federal Deposit Insurance Corporation, Office of the
Comptroller of the Currency, or any other regulatory agency or governmental
authority having jurisdiction over the Bank shall govern the validity,
interpretation, construction and effect of this Agreement.


 


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


 


11

















 


10.0                        Termination
or Modification of Agreement by Reason of Changes in the Law, Rules or
Regulations.


 


The Bank is entering into this Agreement upon the assumption that
certain existing tax laws, the Code, rules and regulations will continue
in effect in their current form. If any said assumptions should change and said
change has a detrimental effect on this Executive plan, then the Bank reserves
the right to terminate or modify this Agreement accordingly.


 


IN WITNESS WHEREOF, the Bank and Executive have executed this Agreement
on the date first above-written in the City of Atascadero, California.


 


Santa Lucia Bank


 


	
  By:

  	
  /s/ Larry H. Putnam

  	
   

  	
  Date:

  	
  December 17, 2008

  
	
   

  	
  Signature & Title

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Executive

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John C. Hansen

  	
   

  	
  Date:

  	
  12/17/08

  
	
   

  	
  Signature & Title

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Larry H. Putnam

  	
   

  	
  /s/ Cindy Dilbeck

  
	
  Witness

  	
  Witness

  



 


12