**Exhibit 10.92**

 

**SANTA LUCIA BANK**

**SALARY CONTINUATION AGREEMENT**

** **

ThisSanta Lucia Bank Salary Continuation Agreement (hereinafter “Agreement”) ismade and entered into effective as of December 17, 2008, by and between **Santa Lucia Bank**, a bank organized and existing under thelaws of the state of California (hereinafter the “Bank” or “Employer”) and **Larry H. Putnam** , an executive of the Bank (hereinafter “Executive”);

 

WHEREFORE, the parties hereby agree to the following;

 

# **RECITALS**

# ** **

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

 

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

 

WHEREAS, it is deemed to be in the best interests of the Employer toprovide Executive with certain fringe benefits, on the terms and conditions setforth herein, in order to reasonably induce Executive to remain in the Employer’semployment; and

 

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

 

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

 

**AGREEMENT**

 

**1.0****                              ****Terms and Definitions****.**

 

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

 

**1.1****                               AccruedLiability Balance.** The term “Accrued Liability Balance” shall mean theamount accrued by the Bank to fund the future benefit expense associated withthis Agreement, as of the end of the month preceding the Executive’s Separationfrom Service. The Bank shall account for this benefit using Generally AcceptedAccounting Principles, regulatory accounting guidance of the Bank’s primaryfederal regulator, and other applicable accounting guidance, including but notlimited to Accounting Principles Board Opinion Number 12 (“APB 12”) as amendedby Statement of Financial Accounting Standards Number 106 (“FAS 106”) and the

 

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Discount Rate. Accordingly, the Bank shall establish a liabilityretirement account for the Executive into which appropriate accruals shall bemade using the applicable Discount Rate. Notwithstanding the forgoing, the accruals shall be made as consistentlyas possible over the span of this Agreement (thus, the benefit shall be accruedfor as evenly as possible each year).

 

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

 

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

 

**1.4****                               Boardof Directors.** The “Board ofDirectors” shall mean the Board of Directors for the Bank, hereinafter “theBoard”.

 

**1.5****                              ****The Code****. **The “Code” shall meanthe Internal Revenue Code of 1986, as amended.

 

**1.6****                               Discount Rate.**  Theterm “Discount Rate” means the rate used by the Plan Administrator for in anyspecified year to accrue benefits under this Plan; however, the Plan Administrator,in its sole discretion, may adjust the Discount Rate to maintain the ratewithin reasonable standards according to GAAP (Generally Accepted AccountingPrinciples).

 

**1.7****                              ****Effective Date****. **The term “EffectiveDate” shall mean the date first written above.

 

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

 

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

 

**1.10**                        **IRC 409A****.** The term “IRC 409A” shall refer to the finalregulations issued by the IRS and the Treasury Department under Section 409Aof the Code.

 

**1.11****                       ****Normal Retirement / NormalRetirement Age.**** **The term “Normal Retirement” shall mean the Executive’s Separation FromService on or after attaining the Normal Retirement Age of Sixty-Five (65) forany reason other than “For Cause” (or because of death).

 

**1.12****                       ****Plan Year****. **The “Plan Year” shallmean the calendar year.

 

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**1.13****                        SeparationFrom Service/ Termination of Employment.**  The terms “Separation From Service”(Separates From Service) and “Termination of Employment” shall be usedinterchangeably for the purposes of this Agreement and shall be interpreted inaccordance with the provisions of IRC 409A. Currently, IRC 409A provides that,whether a termination of employment has occurred is determined based on whetherthe facts and circumstances indicate that the Bank and the Executive reasonablyanticipate that no further services will be performed after a certain date orthat the level of bona fide services the employee will perform after such date(whether as an employee or as an independent contractor) will permanentlydecrease to no more than twenty (20%) percent of the average level of bona fideservices performed (as an employee or an independent contractor) over theimmediately preceding thirty-six (36) month period (or the full period ofservices to the employer if the employee has been providing services to theemployer less than 36 months). There shall be no Separation From Service whilethe Executive is on military leave, sick leave or other bona fide leave ofabsence, as long as such leave does not exceed six (6) months, or iflonger, so long as the individual retains a right to re-employment with theservice recipient under an applicable statute or by contract.

 

**1.14****                        SpecifiedEmployee.** The term “Specified Employee” shall be defined in accordancewith IRC 409A. At present, and in accordance with IRC 409A, the term “SpecifiedEmployee” means an employee who, as of the date of the employee’s Separationfrom Service, is a key employee of an employer of which any stock is publiclytraded on an established securities market or otherwise. An employee is a keyemployee if the employee meets the requirements of section 416(i)(1)(A)(i),(ii), or (iii) (applied in accordance with the regulations thereunder anddisregarding section 416(i)(5)) at any time during the twelve (12) month periodending on a specified employee identification date. If Executive is a keyemployee as of a specified employee identification date, then Executive shallbe treated as a key employee for the entire twelve (12) month period beginningon the specified employee effective date.

 

**1.15****                        Terminationfor Cause.**The term “Termination for Cause” shall mean Termination ofExecutive’s employment by reason of any of the following:

 

A.                                   Executive’s personaldishonesty, incompetence or willful misconduct;

 

B.                                     Executive’sbreach of fiduciary duty involving personal profit;

 

C.                                     Executive’s intentionalfailure to perform Executive’s duties for the Bank after a written demand forperformance is given to Executive by the Board which demand specificallyidentifies the manner in which the Board believes that Executive has notperformed his duties;

 

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

 

E.                                      Executive’smaterial breach of any provision of this Agreement.

 

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**2.****                                     ****Scope, Purpose and Effect****.**

 

**2.1****                               Contractof Employment.**  Although thisAgreement is intended to provide Executive with an additional incentive toremain in the employ of the Employer, this Agreement shall not be deemed toconstitute a contract of employment between Executive and the Employer norshall any provision of this Agreement restrict or expand the right of theEmployer to terminate Executive’s employment. This Agreement shall have no impact or effect upon any separate writtenEmployment Agreement which Executive may have with the Employer, it being theparties’ intention and agreement that unless this Agreement is specificallyreferenced in said Employment Agreement (or any modification thereto), thisAgreement (and the Employer’s obligations hereunder) shall stand separate andapart and shall have no effect on or be affected by, the terms and provisionsof said Employment Agreement.

 

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

 

**2.3****                              ****Prohibited Payments.**** **Notwithstandinganything in this Agreement to the contrary, if any payment made under thisAgreement is a “golden parachute payment” as defined in Section 28(k) ofthe Federal Deposit Insurance Act (12 U.S.C. section 1828(k) and Part 359of the Rules and Regulations of the Federal Deposit Insurance Corporation (collectively,the “FDIC Rules”) or is otherwise prohibited, restricted or subject to theprior approval of a Bank Regulator, no payment shall be made hereunder withoutcomplying with said FDIC Rules.

 

**2.4****                               AdditionalProhibited Payments.**If the Bank is subject to the executivecompensation limitations under the United States Treasury Department’s TroubledAsset Relief Progra**m** (“TARP”) atthe time Executive becomes entitled to any payment under this Agreement, and ifsuch payment, together with any other payments which Executive has the right toreceive from the Bank, exceed the limits allowed for Executive establishedunder TARP, then the aggregate payments to Executive pursuant to this Agreementand any other agreement with Executive shall be reduced to the largest amountas will result in no portion of such payments violating the executivecompensation limitations under TARP.

 

**3.****                                     ****Delay in Payments for Specified Employee in the Event of a SeparationFrom Service**.

 

**3.1****                              ****Internal Revenue Code Section 409ACompliance****.**Itis the intent of the parties to comply with all applicable Internal RevenueCode Sections, including, but not limited to, IRC 409A. Furthermore, for thepurposes of this Agreement, IRC Section 409A shall be read to include anyrelated or relevant IRS Notices or clarifications. While it is understood thata general IRC 409A savings clause will not be effective, the parties intendthat any ambiguities regarding any terms or payouts contained herein shall beinterpreted in a manner consistent with IRC 409A.

 

Thus, for any benefits payable pursuant to this Agreement due to aSeparation From

 

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Service, ifthe individual is a Specified Employee (as defined herein and by IRC 409A) asof the date of the Separation From Service, and the Employer’s stock ispublicly traded on an established securities market or otherwise, any suchbenefit shall be withheld for six (6) months following such SeparationFrom Service in order to comply with IRC 409A. In addition, for any individualaffected by this six (6) month delay in payment imposed by IRC 409A, andif and/or when applicable, the aggregate amount of the first seven (7) monthsof installments shall be paid at the beginning of the seventh month followingthe date of Separation From Service. Monthly installment payments shallcontinue thereafter if called for.

 

**4.****                                     ****Executive Benefits Payments****.**

 

**4.1****                               Inthe Event Executive Does not Separate From Service with the Bank Until on orAfter Normal Retirement.** In theevent Executive does not Separate From Service until on or after the attainingthe Normal Retirement Age of Sixty-Five (65) (and for any reason other than “ForCause”), then Executive (or his designated Beneficiaries) shall be entitled tobe paid an annual Executive Benefit equal to Twenty Thousand Dollars($20,000).  This annual Executive Benefitshall be paid in twelve (12) substantially equal monthly installments on thefirst day of each month, beginning with the month following the month in whichExecutive Separates From Service and continuing until the death of theExecutive or for a period of Fifteen (15) Years, whichever is the later tooccur.

 

**4.2****                               Paymentsin the Event Executive Separates From Service Prior to Normal Retirement.**  In the event Executive Separates From Serviceprior to qualifying for Normal Retirement (and for any reason other than forCause or due to death), then Executive shall be entitled to be paid thefollowing annual amount, based on the date of his Separation From Service:

 
| **Date of Separation From Service** | ** ** | **Annual Benefit Amount** | ** ** |
|---------------------------------------------------------|------------|-------------------------------------|------------|
| January 1, 2008 through  December 31, 2008    |       | $                                   | 14,000     |   |
| January 1, 2009 through  December 31, 2009    |       | $                                   | 16,000     |   |
| January 1, 2010 through  December 31, 2010    |       | $                                   | 18,000     |   |
| January 1, 2011 and thereafter                     |       | $                                   | 20,000     |   |

 

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 FromService and continuing until the death of the Executive or for a period ofFifteen (15) Years, whichever is the later to occur.

 

**4.3****                               Terminationfor Cause.**  In the eventExecutive’s Employment with the Employer is Terminated at any time for Cause,then he shall forfeit any and all rights and benefits he may have under theterms of this Agreement and shall have no right to be paid any of the amountswhich would otherwise be due or paid to the Executive by the Employer pursuantto the terms of this Agreement.

 

**4.4****                               Death.**In the event Executive dies while employed by the Bank and prior to attainingthe Normal Retirement Age of Sixty-Five (65), then Executive’s designated

 

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Beneficiary(ies) shall be entitled to receive an annual Executive Benefit equal to TwentyThousand Dollars ($20,000). This annual Executive Benefit shall be paid intwelve (12) substantially equal monthly installments on the first day of eachmonth, beginning with the month following the month in which Executive dies andcontinuing for a period of Fifteen (15) Years.

 

In the event Executive dies after becoming entitled tobenefits under this Agreement pursuant to the provisions of Paragraphs 4.1 or4.2 but prior to receiving any or all such benefit payments, then Executive’sdesignated Beneficiary(ies) (pursuant to section 8.0) shall be entitled toreceive any and all such outstanding payments in the same amount and on thesame payment schedule as Executive would have received had he survived.

 

**5.0****                               IRSSection 280G Issues.** If allor any portion of the amounts payable to Executive under this Agreement, eitheralone or together with other payments which Executive has the right to receivefrom the Employer, constitute “excess parachute payments” within the meaning ofSection 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 (orsimilar tax and/or assessment), Executive shall be responsible for the paymentof such excise tax and Employer (and its successor) shall be responsible forany loss of deductibility related thereto; provided, however, that Employer andExecutive shall cooperate with each other and use all reasonable efforts tominimize to the fullest extent possible (and in accordance with IRC 409A)  the amount of excise tax imposed by Section 4999of the Code.  If, at a later date, it isdetermined (pursuant to final regulations or published rulings of the InternalRevenue Service, final judgment of a court of competent jurisdiction, orotherwise) that the amount of excise taxes payable by Executive is greater thanthe amount initially so determined, then Executive shall pay an amount equal tothe sum of such additional excise taxes and any interest, fines and penaltiesresulting from such underpayment.  Thedetermination of the amount of any such excise taxes shall be made by the independentaccounting firm employed by the Employer immediately prior to the change incontrol or such other independent accounting firm or advisor as may be mutuallyagreeable to Employer and Executive in the exercise of their reasonable goodfaith judgment.

 

**6.0****                               Administrativeand Claims Provision.**

 

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

 

**6.2****                               ClaimsProcedure.**  In the event adispute arises over the benefits under this Agreement and benefits are not paidto the Employee (or to the Employee’s beneficiary[ies], if applicable) and suchclaimants feel they are entitled to receive such benefits, then a written claimmust be made to the Employer (as the plan administrator) in accordance with thefollowing procedures:

 

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

 

B.                                     ClaimDecision.  Upon receipt of such claim, the Administratorshall respond to such claimant within ninety (90) days after receiving theclaim.  If the Administrator determinesthat 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 theend of the initial ninety (90) day period, that an additional period isrequired. The notice of extension must set forth the special circumstances andthe date by which the Administrator expects to render its decision.

 

If the claim is denied in whole or in part, the Administrator shallnotify the claimant in writing of such denial. The Administrator shall writethe notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

 

(i)                                     Thespecific reasons for the denial;

(ii)                                  Thespecific reference to pertinent provisions of the Agreement on which the denialis based;

(iii)                               Adescription of any additional information or material necessary for theclaimant to perfect the claim and an explanation of why such material orinformation is necessary;

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

(v)                                 Astatement of the claimant’s right to bring a civil action under ERISA Section 502(a) followingan adverse benefit determination on review.

 

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

 

The claimant (or his duly authorized representative) shall then havethe opportunity to submit written comments, documents, records and otherinformation relating to the claim.  TheAdministrator shall also provide the claimant, upon request and free of charge,reasonable access to, and copies of, all documents, records and otherinformation relevant (as defined in applicable ERISA regulations) to the claimant’sclaim for benefits.

 

D.                                    Decision onReview.  The Administrator shallrespond in writing to such claimant within sixty (60) days after receiving therequest for review.  If the Administratordetermines that special circumstances require an extension of time forprocessing the claim, written notice of the extension shall be

 

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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 forththe special circumstances requiring an extension of time and the date by whichthe Administrator expects to render its decision.

 

In considering the review, the Administrator shall take into accountall materials and information the claimant submits relating to the claim,without regard to whether such information was submitted or considered in theinitial benefit determination.

 

The Administrator shall notify the claimant in writing of its decisionon review.  The Committee shall write thenotification in a manner calculated to be understood by the claimant.  The notification shall set forth:

 

(i)                                      The specificreasons for the denial;

(ii)                                   A reference tothe specific provisions of the Agreement on which the denial is based;

(iii)                                A statement thatthe claimant is entitled to receive, upon request and free of charge,reasonable access to,  and copies of, all documents, records and otherinformation relevant (as defined in applicable ERISA regulations) to theclaimant’s claim for benefits; and

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

 

**7.0****                               Attorney’sFees.** If any legal action orother proceeding is brought for the enforcement of this Agreement, or becauseof an alleged dispute, breach, default or misrepresentation in connection withany of the provisions of this Agreement, the successful or prevailing party orparties shall be entitled to recover reasonable attorneys’ fees and other costsincurred in that action or proceeding in addition to any other relief to whichit or they may be entitled. The “prevailing party” means any party determinedby 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****                               BeneficiaryDesignation**

 

**8.1**                               **Beneficiary Designation.** Ifapplicable, Executive shall have the right, at any time, to designate anyperson or persons as his Beneficiary or Beneficiaries (both primary as well assecondary) to whom benefits under this Agreement shall be paid in the event ofhis death prior to complete distribution to the Executive of the benefits dueunder this Agreement. Each Beneficiary designation shall be in a written formand will be effective only when filed with the Administrator during theExecutive’s lifetime.

 

**8.2****                               Amendmentsto Beneficiary Designation**. Any beneficiary designation may be changedby the Executive without the consent of any designated Beneficiary by thefiling of a new Beneficiary designation with the Administrator. The filing of anew Beneficiary designation form

 

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will cancelall Beneficiary designations previously filed. If an Executive’s compensationis community property, any Beneficiary designation shall be valid or effectiveonly as permitted under applicable law.

 

**8.3**                               **No Beneficiary Designation.** In theabsence of an effective beneficiary designation, or if all stated Beneficiariespredecease the Executive or die prior to complete distribution of the Executive’sBenefit, then the Executive’s designated Beneficiary shall be deemed to be theExecutive’s estate.

 

**8.4**                               **Doubt as to Beneficiary.** If thereis a doubt as to the proper Beneficiary to receive payments pursuant to thisAgreement, then the Company shall have the right to withhold such paymentsuntil this matter is resolved.

 

**8.5**                               **Effect of Payment to the Beneficiary.**The payment to the deemed Beneficiary shall fully and completely discharge theCompany from all further obligations under this Agreement.

 

**9.0****                               Statusas an Unsecured General Creditor and Rabbi Trust. **Notwithstanding anything contained hereinto the contrary:  (i) Executiveshall have no legal or equitable rights, interests or claims in or to anyspecific property or assets of the Employer as a result of this Agreement; (ii) noneof the Bank’s assets shall be held in or under any trust for the benefit ofExecutive or held in any way as security for the fulfillment of the obligationsof the Bank under this Agreement; (iii) all of the Bank’s assets shall beand remain the general unpledged and unrestricted assets of the Bank; (iv) theBank’s obligation under this Agreement shall be that of an unfunded andunsecured promise by the Bank to pay money in the future; and (v) Executiveshall be an unsecured general creditor with respect to any benefits which maybe payable under the terms of this Agreement.

 

Notwithstanding subparagraphs (i) through (v) above, the Bankand 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 sorequest and the Bank nonetheless deems it appropriate, the Bank shallestablish, not later than the effective date of the Change in Control, a RabbiTrust or multiple Rabbi Trusts (the “Trust” or “Trusts”) upon such terms andconditions as the Bank, in its sole discretion, deems appropriate and incompliance with applicable provisions of the Code, in order to permit the Bankto make contributions and/or transfer assets to the Trust or Trusts todischarge its obligations pursuant to this Agreement.  The principal of the Trust or Trusts and anyearnings thereon shall be held separate and apart from other funds of the Bankto be used exclusively for discharge of the Bank’s obligations pursuant to thisAgreement and shall continue to be subject to the claims of the Bank’s generalcreditors until paid to Executive in such manner and at such times as specifiedin this Agreement.

 

**10.0****                        Miscellaneous.**

 

**10.1****                        OpportunityTo Consult With Independent Advisors.** Executive acknowledges that he has been afforded the opportunity toconsult with independent advisors of his choosing including, withoutlimitation, accountants or tax advisors and counsel regarding both

 

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the benefits granted to him under the termsof this Agreement and the (i) terms and conditions which may affectExecutive’s right to these benefits and (ii) personal tax effects of suchbenefits including, without limitation, the effects of any federal or statetaxes, Section 280G of the Code, and any other taxes, costs, expenses orliabilities whatsoever related to such benefits, which in any of the foregoinginstances Executive acknowledges and agrees shall be the sole responsibility ofExecutive, provided, however, that Employer and Executive shall cooperate witheach other and use all reasonable efforts to minimize to the fullest extentpossible the amount of excise tax imposed by Section 280G and 4999 of theCode. In the event the parties are unable to eliminate such excise taxes,Executive further acknowledges and agrees that the Bank shall have no liabilitywhatsoever related to any such personal tax effects or other personal costs,expenses, or liabilities applicable to Executive and further specificallywaives any right for himself or herself, and his or her heirs, beneficiaries,legal representatives, agents, successor and assign to claim or assertliability on the part of the Bank related to the matters described above inthis paragraph. Executive further acknowledges that he has read, understandsand consents to all of the terms and conditions of this Agreement, and that heenters into this Agreement with a full understanding of its terms andconditions.

 

**10.2****                        Notice.**  Any notice required or permitted of eitherExecutive or the Bank under this Agreement shall be deemed to have been dulygiven, if by personal delivery, upon the date received by the party or itsauthorized representative; if by facsimile, upon transmission to a telephonenumber previously provided by the party to whom the facsimile is transmitted asreflected in the records of the party transmitting the facsimile and uponreasonable confirmation of such transmission; and if by mail, on the third dayafter mailing via U.S. first class mail, registered or certified, postageprepaid and return receipt requested, and addressed to the party at the addressgiven below for the receipt of notices, or such changed address as may berequested in writing by a party.

 
|   |   | If to the Bank:      |   | 7480 El Camino Real                                                                                                                                                                                                                                                                                                            |
|--------|--------|----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                 |   | Atascadero, CA  93422                                                                                                                                                                                                                                                                                                     |
|   |   |                 |   | FAX  (805) 466-1058                                                                                                                                                                                                                                                                                                       |
|   |   |                 |   |                                                                                                                                                                                                                                                                                                                           |
|   |   | If to the Executive: |   |                                                       |
|   |   |                 |   |                                                                                                                                                                                                                                                                                                                           |
|   |   |                 |   |                                                       |

 

**10.3****                        Assignment.**  Executive shall have no power or right totransfer, assign, anticipate, hypothecate, modify or otherwise encumber anypart or all of the amounts payable hereunder, nor, prior to payment inaccordance with the terms of this Agreement, shall any portion of such amountsbe:  (i) subject to seizure by anycreditor of Executive, by a proceeding at law or in equity, for the payment ofany debts, judgments, alimony or separate maintenance obligations which may beowed by Executive; or (ii) transferable by operation of law in the eventof bankruptcy, insolvency or otherwise. Any such attempted assignment ortransfer shall be void. In the event Executive or any beneficiary attemptsassignment, communication, hypothecation, transfer or disposal of the benefitshereunder, any such attempted transfer or assignment shall be void.

 

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**10.4****                        BindingEffect/Merger or Reorganization.** This Agreement shall be binding upon and inure to the benefit ofExecutive and the Bank.  Accordingly, theBank shall not merge or consolidate into or with another corporation, orreorganize or sell substantially all of its assets to another corporation, firmor person, unless and until such succeeding or continuing corporation, firm orperson agrees to assume and discharge the obligations of the Bank under thisAgreement.  In the alternative, theholding company may agree to assume and discharge the obligation of the Bankunder this Agreement. Upon the occurrence of such event, the term “Bank” asused in this Agreement shall be deemed to refer to such surviving or successorfirm, person, entity or corporation, or the holding company, as the case maybe.

 

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

 

**10.6****                        PartialInvalidity.** If any terms, provision, covenant, or condition of thisAgreement is determined by an arbitrator or a court, as the case may be, to beinvalid, void, or unenforceable, such determination shall not render any otherterm, provision, covenant or condition invalid, void or unenforceable, and theAgreement shall remain in full force and effect notwithstanding such partialinvalidity.

 

**10.7****                        EntireAgreement.**  This Agreementsupersedes any and all other agreements, either oral or in writing, between theparties with respect to the subject matter of this Agreement and contains allof the covenants and agreements between the parties with respect thereto.  Each party to this Agreement acknowledgesthat no other representations, inducements, promises, or agreements, oral orotherwise, have been made by any party, or anyone acting on behalf of anyparty, 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 eitherparty.

 

**10.8****                        Modifications.**  Any modification of this Agreement shall beeffective only if it is in writing and signed by each party or such party’sauthorized representative, and only to the extent that it is compliant with allapplicable codes and statutes, including but not limited to IRS Code Section 409A.

 

**10.9****                        ParagraphHeadings.**  The paragraph headingsused in this Agreement are included solely for the convenience of the partiesand shall not affect or be used in connection with the interpretation of thisAgreement.

 

**10.10****                 No StrictConstruction.**  The language usedin this Agreement shall be deemed to be the language chosen by the partieshereto to express their mutual intent, and no rule of strict constructionwill be applied against any person.

 

**10.11****                 Governing Law.**  The laws of the State of California, otherthan those laws denominated choice of law rules, and where applicable, the rules andregulations of the Board of Governors of the Federal Reserve System, FederalDeposit Insurance Corporation, Office of the

 

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Comptroller of the Currency, or any other regulatory agency orgovernmental authority having jurisdiction over the Bank shall govern thevalidity, interpretation, construction and effect of this Agreement.

 

**10.12****                 Gender. **Whenever in this Agreement words are usedin the masculine, feminine or neuter gender, they shall be read and construedas in the masculine, feminine or neuter gender, whenever they should so apply.

 

**11.0****                        Terminationor Modification of Agreement by Reason of Changes in the Law, Rules orRegulations.**

 

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

 

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

 
| **Santa Lucia Bank**       |                |              |
|----------------------------|---------------------|-------------------|
|                       |                |              |
|                       |                |              |
| By:                        | /s/ John C. Hansen  |              | Date: | 12/17/08 |
| Signature & Title |                |              |
|                       |                |              |
|                       |                |              |
| **Executive**              |                |              |
|                       |                |              |
|                       |                |              |
| By:                        | /s/ Larry H. Putnam |              | Date: | December 17, 2008 |
| Signature & Title |                |              |
|                       |                |              |
|                       |                |              |
| /s/ John C. Hansen         |                | /s/ Cindy Dilbeck |
| Witness                    |                | Witness           |

 

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