BANK’34


Director Retirement Agreement





 



 


BANK’34


DIRECTOR RETIREMENT AGREEMENT


 


This DIRECTOR RETIREMENT
AGREEMENT (this “Agreement”) is entered into this 1st day of February, 2010, by and between BANK’34,
a federally-chartered savings and loan located in Alamogordo, New Mexico (the “Bank”), and (the “Director”).


 


The purpose of this
Agreement is to provide specified benefits to the Director, a member of a select group of management or highly compensated employees
who contribute materially to the continued growth, development and future business success of the Bank. This Agreement shall be
unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”),
as amended from time to time.


 


Article 1


Definitions


 


Whenever used in this
Agreement, the following words and phrases shall have the meanings specified:


 


		1.1	“Accrual Balance”
                                         means the liability that should be accrued by the Bank, under Generally Accepted Accounting
                                         Principles (“GAAP”), for the Bank’s obligation to the Director under
                                         this Agreement, by applying Accounting Principles Board Opinion Number 12 as amended
                                         by Statement of Financial Accounting Standards Number 106 and the 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.



 


		1.2	“Beneficiary” means each designated person or entity, or the estate of the deceased
Director, entitled to any benefits, if any, upon the death of the Director.



 


		1.3	“Beneficiary Designation Form” means the form established from time to time
by the Plan Administrator that the Director completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.



 


		1.4	“Board” means the Board of Directors of the Bank, as from time to time constituted.



 


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



 


		1.6	“Code” means the
                                         Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder,
                                         including such regulations and guidance as may be promulgated alter the Effective Date.



 




    	 



    	 



    

 


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Director Retirement Agreement


 






 


		1.7	“Disability” means the Director: (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees or directors of the Bank. Medical determination of Disability may be made
by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the
Bank provided that the definition of “disability” applied under such insurance program complies with the requirements
of the preceding sentence. Upon the request of the Plan Administrator, the Director must submit proof to the Plan Administrator
of the Social Security Administration’s or the provider’s determination.



 


		1.8	“Discount Rate”
                                         means the rate used by the Plan Administrator for determining the Accrual Balance.
                                         The initial Discount Rate is six percent (6%). However, the Plan Administrator, in its
                                         discretion, may adjust the Discount Rate to maintain the rate within reasonable Standards
                                         according to GAAP and/or applicable bank regulatory guidance.



 


		1.9	“Early Retirement”
                                         means a Separation from Service occurring before the Normal Retirement Date but after
                                         the Director has completed eight (8) Years of Service, except when such Separation from
                                         Service occurs: (i) within twenty-four (24) months following a Change in Control; or
                                         (ii) due to death, Disability, or Termination for Cause.



 


		1.10	“Effective Date” means February 1, 2010.



 


		1.11	“Normal Retirement Age”
                                         means age seventy (70).



 


		1.12	“Normal
                                         Retirement Date” means the later of Normal Retirement Age orSeparation
                                         from Service.



 


		1.13	“Plan Administrator” means the Board or such committee or person as the Board
shall appoint.



 


		1.14	“Plan Year” means each twelve (12) month period commencing on July 1 and ending
on June 30 of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following
June 30.



 


		1.15	“Separation from Service” means termination
of the Director’s performance of services with the Bank for reasons other than death. Whether a Separation from Service
has occurred is determined in accordance with the requirements of Code Section 409A based on whether the facts and circumstances
indicate that the Bank and Director reasonably anticipated that no further services would be performed after a certaindate
or that the level of bona fide services the Director would perform alter 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 (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36)
month period (or the full period of services to the Bank if the Director has been providing services to the Bank less than thirty-six
(36) months).



 




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Director Retirement Agreement


 






 


		1.16	“Specified Employee” means an employee who at the time of Separation from Service
is a key employee of the Bank, if any stock of the Bank is publicly traded on an established securities market or otherwise. For
purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code 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 December 31 (the “identification period”). If the employee is a key employee during
an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month
period that begins on the first day of April following the close of the identification period.



 


		1.17	“Termination for Cause”
                                         means a Separation from Service due to:



 


		(a)	personal dishonesty;



		(b)	incompetence;



		(c)	willful misconduct;



		(d)	breach of fiduciary duty involving personal profit;



		(e)	material breach of the Bank’s Code of Ethics;



		(f)	intentional failure to perform stated duties; or



		(g)	willful violation of any law, rule or regulation (other than traffic violations or similar offenses), any felony conviction,
any violation of law involving moral turpitude, or any violation of a final cease-and-desist order.



 


Notwithstanding the foregoing,
the Director’s Termination for Cause will not become effective unless the Bank has delivered to the Director a copy of a
resolution duly adopted by the affirmative vote of a majority of the independent directors of the Board (other than the Director),
at a meeting of the Board called and held for the purpose of finding that, in the good faith opinion of the Board (after reasonable
notice to the Director and an opportunity for the Director to be heard before the Board), the Director was guilty of the conduct
described above and specifying the particulars of such conduct.


 


		1.18	“Years of Service” means the twelve (12) consecutive month period beginning
on the Director’s date of hire and any twelve (12) month anniversary thereof during the entirety of which time the Director
is an employee and/or independent contractor of the Bank. Service with a subsidiary or other entity controlled by the Bank before
the time such entity became a subsidiary or under such control shall not be considered “credited service.”



 




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Director Retirement Agreement


 






 


Article 2 


Distributions During Lifetime


 


		2.1	Normal Retirement Benefit. Upon the Normal Retirement Date, the Bank shall distribute to the Director the benefit described
in this Section 2.1 in lieu of any other benefit under this Article.



 


		2.1.1	Amount of Benefit. The annual benefit under this Section 2.1 is Twenty-Four Thousand Dollars
($24,000),



 


		2.1.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the
                                                                 Director in twelve (12) equal monthly installments commencing on the first day of the month following the Normal Retirement
                                                                 Date. The annual benefit shall be distributed to the Director for fifteen (15) years.



 


		2.2	Early Retirement Benefit. If Early Retirement occurs, the Bank shall distribute to the Director
the benefit described in this Section 2.2 in lieu of any other benefit under this Article.



 


		2.2.1	Amount of Benefit. The benefit under this Section 2.2 is the Accrual Balance determined
as of the end of the month preceding Separation from Service.



 


		2.2.2	Distribution of Benefit. The Bank shall distribute the benefit to the Director in _______________
( ) monthly installments commencing on the first day of the month following Separation from Service. If there is more than one
monthly installment, the monthly installments shall be equal to the extent possible.



 


		2.3	Disability Benefit. If the Director experiences a Disability prior to the Normal Retirement
Age, the Bank shall distribute to the Director the benefit described in this Section 2.3 in lieu of any other benefit under this
Article.



 


		2.3.1	Amount of Benefit The benefit under this Section 2.3 is the Accrual Balance determined as
of the end of the month preceding Disability .



 


		2.3.2	Distribution of Benefit. The Bank shall distribute the benefit to the Director in
__________________ ________ ( ) monthly installments commencing on the first day of the month following Disability. If there is
more than one monthly installment, the monthly installments shall be equal to the extent possible.



 


		2.4	Change in Control Benefit. If a Change in Control occurs, followed within twenty-four (24)
months by Separation from Service, provided, however, that such Separation from Service is prior to the Normal Retirement Age,
the Bank shall distribute to the Director the benefit described in this Section 2.4 in lieu of any other benefit under this Article.



 




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Director Retirement Agreement


 






 


		2.4.1	Amount of Benefit. The benefit under this Section 2.4 is the Accrual Balance determined as of the end of the month preceding
Separation from Service.



 


		2.4.2	Distribution of Benefit. The Bank shall distribute the benefit to the Director in a lump sum within thirty (30) days
following Separation from Service.



 


		2.5	Change in Control during Distribution of Benefits. If a Change in Control occurs during
the period in which the Director is receiving installment payments pursuant to this Article 2 or Article 3 below, then within thirty
(30) days of such Change in Control, the Bank shall pay the remaining Accrual Balance determined as of the date of the Change in
Control to the Director in a lump sum in lieu of any other installment payments.



 


		2.6	Restriction on Commencement of Distributions. Notwithstanding any provision of this Agreement
to the contrary, if the Director is considered a Specified Employee, the provisions of this Section 2.6 shall govern all distributions
hereunder. If benefit distributions which would otherwise be made to the Director due to Separation from Service are limited because
the Director is a Specified Employee, then such distributions shall not be made during the first six (6) months following Separation
from Service. Rather, any distribution which would otherwise be paid to the Director during such period shall be accumulated and
paid to the Director in a lump sum on the first day of the seventh month following Separation from Service. All subsequent distributions
shall be paid in the manner specified.



 


		2.7	Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the
Federal Insurance Contributions Act or other state, local or foreign tax, the Director becomes subject to tax on the amounts deferred
hereunder, then the Bank may make a limited distribution to the Director in a manner that conforms to the requirements of Code
section 409A. Any such distribution will decrease the Director’s benefits distributable under this Agreement.



 


		2.8	Change in Form or Timing of Distributions. For distribution of benefits under this Article
2, the Director and the Bank may, subject to the terms of Section 8.1, amend this. Agreement to delay the timing or change the
form of distributions; Any such amendment:



 


		(a)	may not accelerate the time or schedule of any distribution, except as provided in Code Section
409A;



		(b)	must, for benefits distributable
                                         under Sections 2.1, 2.2 and 2.4, delay the commencement of distributions for a minimum
                                         of five (5) years from the date the first distribution was originally scheduled to be
                                         made; and



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



 




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Director Retirement Agreement


 






 


Article 3 


Distribution at Death


 


		3.1	Death During Active Service. If the Director dies prior to Separation from Service, the
Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed in lieu
of any benefit under Article 2.



 


		3.1.1	Amount of Benefit. The benefit under this Section 3.1 is the Accrual Balance determined at the time of the Director’s
death.



 


		3.1.2	Distribution of Benefit. The Bank shall distribute the benefit to the Director in ___________________
( ) monthly installments commencing on the first day of the fourth month following the Director’s death. If there is more
than one monthly installment, the monthly installments shall be equal to the extent possible. The Beneficiary shall be required
to provide to the Bank the Director’s death certificate.



 


		3.2	Death During Distribution of a Benefit. If the Director dies after any benefit distributions
have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the
remaining benefits at the same time and in the same amounts they would have been distributed to the Director had the Director
survived.



 


		3.3	Death Before Benefit Distributions Commence. If the Director is entitled to benefit distributions
under this Agreement but dies prior to the date that commencement of said benefit distributions are scheduled to be made under
this Agreement, the Bank shall distribute to the Beneficiary the same benefits to which the Director was entitled prior to death,
except that the benefit distributions shall be paid in the manner specified in Section 3.1.2 and shall commence on the first day
of the fourth month following the Director’s death.



 


Article 4 


Beneficiaries


 


		4.1	In General. The Director shall have the right, at any time, to designate a Beneficiary
to receive any benefit distributions under this Agreement upon the death of the Director. The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Director
participates.



 


		4.2	Designation. The Director shall
                                         designate a Beneficiary by completing and signing the Beneficiary Designation Form and
                                         delivering it to the Plan Administrator or its designated agent. If the Director names
                                         someone other than the Director’s spouse as a Beneficiary, the Plan Administrator
                                         may, in its sole discretion, determine that spousal consent is required to be provided
                                         in a form designated by the Plan Administrator, executed by the Director’s spouse
                                         and returned to the Plan Administrator. The Director’s beneficiary designation
                                         shall be deemed automatically revoked if the Beneficiary predeceases the Director or
                                         if the Director names a spouse as Beneficiary and the marriage is subsequently dissolved.
                                         The Director shall have the right to change a Beneficiary by completing, signing and
                                         otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s
                                         rules and procedures. Upon the acceptance by the Plan Administrator of a new Beneficiary
                                         Designation Form, all Beneficiary designations previously filed shall be cancelled. The
                                         Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form
                                         filed by the Director and accepted by the Plan Administrator prior to the Director’s
                                         death.



 




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Director Retirement Agreement


 






 


		4.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective
until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.



 


		4.4	No Beneficiary Designation. If the Director dies without a valid beneficiary designation,
or if all designated Beneficiaries predecease the Director, then the Director’s spouse shall be the designated Beneficiary.
If the Director has no surviving spouse, any benefit shall be paid to the Director’s estate.



 


		4.5.	Facility of Distribution. If the Plan Administrator determines in its discretion that a
benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition
of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative
or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require
proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution
of a benefit shall be a distribution for the account of the Director and the Beneficiary, as the case may be, and shall completely
discharge any liability under this Agreement for such distribution amount.



 


Article 5.


General Limitations


 


		5.1	Termination for Cause. Notwithstanding any provision of this Agreement to the contrary,
the Bank shall not distribute any benefit under this Agreement if the Director’s services with the Bank are terminated by
the Bank or an applicable regulator due to a Termination for Cause.



 


		5.2	Suicide or Misstatement. No benefit shall be distributed if the Director commits suicide
within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Director
and owned by the Bank denies coverage (i) for material misstatements of fact made by the Director on an application for such life
insurance, or (ii) for any other reason; provided, however that the Bank shall evaluate the reason for the denial, and upon advice
of legal counsel and in its sole discretion, consider judicially challenging any denial.



 




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Director Retirement Agreement


 






 


		5.3	Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall
not distribute any benefit under this Agreement if the Director is subject to a final removal or prohibition order issued by an
appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act, Notwithstanding anything herein
to the contrary, any payments made to the Director pursuant to this Agreement, or otherwise, shall be subject to and conditioned
upon compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other.
regulations or guidance promulgated thereunder.



 


Article 6


Administration of Agreement


 


		6.1	Plan Administrator Duties. The Plan Administrator shall administer this Agreement according
to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate
rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations
of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does
not conflict with Code Section 409A.



 


		6.2	Agents. In the administration of this Agreement, the Plan Administrator may employ agents
and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative,
and may from time to time consult with counsel who may be counsel to the Bank.



 


		6.3	Binding Effect of Decisions. Any decision or action of the Plan 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 and conclusive and binding upon all persons having any interest in this
Agreement.



 


		6.4	Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the Plan Administrator
against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to
this Agreement, except in the case of willful misconduct by the Plan Administrator.



 


		6.5	Bank Information. To enable the Plan Administrator to perform its functions, the Bank shall
supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Director’s
death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require.



 




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		6.6	Annual Statement. The Plan Administrator shall provide to the Director, within one hundred
twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement.



 


Article 7 


Claims And Review Procedures


 


		7.1	Claims Procedure. An Director or Beneficiary (“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:



 


		7.1.1	Initiation – Written Claim. The claimant initiates a claim by submitting to the Plan 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 (I80) 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.



 


		7.1.2	Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant
within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require additional
time for processing the claim, the Plan 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 Plan Administrator expects to render its decision.



 


		7.1.3	Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan
Administrator shall notify the claimant in writing of such denial. The Plan 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 description of any additional information or material necessary for the claimant to perfect the
claim and an explanation of why it is needed;



		(d)	An explanation of this Agreement’s review procedures and the time limits applicable to such
procedures; and



		(e)	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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		7.2	Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant
shall have the opportunity for a full and fair review by the Plan Administrator of the denial as follows:



 


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



 


		7.2.2	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 Plan 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.



 


		7.2.3	Considerations on Review. In considering the review, the Plan 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.



 


		7.2.4	Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to
such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan 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 Plan Administrator
expects to render its decision.



 


		7.2.5	Notice of Decision. The
                                         Plan Administrator shall notify the claimant in writing of its decision on review. The
                                         Plan 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).



 




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Article 8 


Amendments and Termination


 


		8.1	Amendments. This Agreement may be amended only by a written agreement signed by the Bank
and the Director. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its
auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Code Section 409A.



 


		8.2	Plan Termination Generally. This Agreement may be terminated only by a written agreement
signed by the Bank and the Director. The benefit shall be the Accrual Balance as of the date this Agreement is terminated. Except
as provided in Section 8.3, the termination of this Agreement 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 or
Article 3.



 


		8.3	Plan Terminations Under Code Section 409A. Notwithstanding anything to the contrary in Section
8.2, if the Bank terminates this Agreement in the following circumstances:



 


		(a)	Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all
distributions are made no later than twelve (12) months following such termination of this Agreement and further provided that
all the Bank’s arrangements which are substantially similar to this Agreement are terminated so the Director and all participants
in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within
twelve (12) months of such termination;



		(b)	Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the
amounts deferred under this Agreement are included in the Director’s gross income in the latest of (i) the calendar year
in which this Agreement terminates; (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 distribution is administratively practical; or



		(c)	Upon the Bank’s termination of this and all other arrangements that would be aggregated with
this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Director participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial
health of the Bank, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four
(24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement
for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate
the Agreement;



 


the Bank may distribute the Accrual
Balance, determined as of the date of the termination of this Agreement, to the Director in a lump sum subject to the above terms.


 




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Article 9


Miscellaneous


 


		9.1	Binding Effect. This Agreement shall bind the Director and the Bank and their beneficiaries,
survivors, executors, administrators and transferees.



 


		9.2	No Guarantee of Employment. This Agreement is not a contract for employment. It does not
give the Director the right to remain as a director or a service provider of the Bank nor interfere with the Bank’s right
to terminate the services of the Director. It does not require the Director to remain a director nor interfere with the Director’s
right to terminate his or her services at any time.



 


		9.3	Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any manner.



 


		9.4	Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to be
withheld, including but not limited to taxes owed under Code Section 409A from the benefits provided under this Agreement. The
Director acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate
taxing authorities. The Bank shall satisfy all applicable reporting requirements, including those under Code Section 409A.



 


		9.5	Applicable Law. This Agreement and all rights hereunder shall be governed by the laws of
the State of New Mexico, except to the extent preempted by the laws of the United States of America.



 


		9.6	Unfunded Arrangement. The Director and the Beneficiary are general unsecured creditors of
the Bank for the; distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute
such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors. Any insurance on the Director’s life or other informal funding asset
is a general asset of the Bank to which the Director and Beneficiary have no preferred or secured claim.



 


		9.7	Reorganization. The Bank shall not merge or consolidate into or with another bank, or reorganize,
or sell substantially all of its assets to another bank, firm or person unless such succeeding or continuing bank, firm or person
agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such an event, the term
“Bank” as used in this Agreement shall be deemed to refer to the successor or survivor entity.



 


		9.8	Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the
Director as to the subject matter hereof. No rights are granted to the Director by virtue of this Agreement other than those specifically
set forth herein.



 




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		9.9	Interpretation. 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.



 


		9.10	Alternative Action. In the event it shall become impossible for the Bank or the Plan Administrator
to perform any act required by this Agreement due to regulatory or other constraints, the Bank or Plan 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 Bank,
provided that such alternative act does not violate Code Section 409A.



 


		9.11	Heading. Article and section headings are for convenient reference only and shall not control
or affect the meaning or construction of any provision herein.



 


		9.12	Validity. If any provision of this Agreement shall be illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as
if such illegal or invalid provision had never been included herein.



 


		9.13	Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator
under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the address
below:



 


	 	BANK’34	 
	 	C/O___________________	 
	 	500 10th STREET	 
	 	ALAMOGORDO, NM 88310	 


 


Such 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 on the receipt for registration
or certification.


 


Any notice or filing required
or permitted to be given to the Director under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail
to the last known address of the Director.


 


		9.14	Deduction Limitation on Benefit Payments. If the Bank reasonably anticipates that the Bank’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 Bank to ensure that the entire amount of any distribution from this Agreement is deductible,
the Bank may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be
distributed to the Director (or the Beneficiary in the event of the Director’s death) at the earliest date the Bank reasonably
anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).



 




    	13



    	 



    

 


BANk’34


Director Retirement Agreement


 






 


		9.15	Compliance with Section 409A. This Agreement shall be interpreted and administered consistent
with Code Section 409A.



 


IN WlTNESS WHEREOF,
the Director and a duly authorized representative of the Bank have signed this Agreement.


 


	DIRECTOR:	 	BANK:	 
	 	 	 	 
	 	 	By:	 
	 	 	Title:	 


 


The individual Director Retirement Agreements provide as follows:


 


At Section 2.2.2, the directors elected as follows:


 


Director Burt – one (1) monthly installment


Director Harris – lump sum


Director Rabon – lump sum


 


At Section 2.3.2, the directors elected as follows:


 


Director Burt  – one (1) monthly
installment


Director Harris – lump sum


Director Rabon – 120 monthly installments


 


At Section 3.1.2, the directors elected as follows:


 


Director Burt – one (1) monthly installment


Director Harris – lump sum


Director Rabon – lump sum


 






    	14



    	 



    

 

 


FIRST
AMENDMENT TO


BANK ‘34


DIRECTOR
RETIREMENT AGREEMENT


 


THIS
FIRST AMENDMENT (the “Amendment”) is adopted September 6, 2013, by Bank ‘34, located in Alamogordo, New Mexico
(the “Bank”) and                                   (the “Director”).


 


WHEREAS,
the Bank and the Director are party to a Director Retirement Agreement adopted February 1, 2010 (the “Agreement”);
and


 


WHEREAS,
the Bank and the Director desire to fix the benefit to be paid to the Director under the Agreement;


 


NOW,
THEREFORE, the Bank and the Director adopt the following amendments to the Agreement:


 


Section
1.1 of the Agreement shall be deleted and replaced by the following:


 


		1.1	“Accrual
                                         Balance” means ________________ Dollars ($74,238.71).



 


Section
2.1.1 of the Agreement shall be deleted and replaced by the following:


 


		2.1.1	Amount of Benefit. The annual benefit under this Section 2.1 is the amount necessary to
fully amortize the Accrual Balance over fifteen (15) years of equal monthly payments, calculated using the Discount Rate in effect
as of September 1, 2013.



 


Section
2.2 of the Agreement shall be deleted and replaced by the following:


 


		2.2	Early Retirement Benefit. Upon Separation
from Service occurring prior to Normal Retirement Age, the Bank shall distribute to the Director the benefit described in this
Section 2.2 in lieu of any other benefit described under this Article.



 


IN
WITNESS WHEREOF, the Director and a duly authorized representative of the Bank have executed this Amendment as indicated below:


 


	Director	Bank


 


	 	 	 	By:	 
	 	 	Its: