**Exhibit 10.94**

 

**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 **John C. Hansen**, 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 of the Bank, and isnow serving the Bank;

 

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

 

WHEREAS,it is deemed to be in the best interests of the Employer to provide Executivewith certain fringe benefits, on the terms and conditions set forth herein, inorder 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 conditionsupon which this additional compensatory incentive will be provided toExecutive;

 

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

 

**AGREEMENT**

 

**1.0****                              ****Termsand Definitions****.**

 

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

 

**1.1****         ****AccruedLiability Balance.** The term “Accrued Liability Balance” shallmean the amount accrued by the Bank to fund the future benefit expenseassociated with this Agreement, as of the end of the month preceding theExecutive’s Separation from Service. The Bank shall account for this benefitusing Generally Accepted Accounting Principles, regulatory accounting guidanceof the Bank’s primary federal regulator, and other applicable accountingguidance, including but not limited to Accounting Principles Board OpinionNumber 12 (“APB 12”) as amended by Statement of Financial Accounting StandardsNumber 106 (“FAS 106”) and the

 

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DiscountRate. Accordingly, the Bank shall establish a liability retirement account forthe Executive into which appropriate accruals shall be made using theapplicable 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). For illustrative purposes ONLY, a sample table showing possibleprospective Accrued Liability Balance numbers shall be attached hereto as Exhibit “A”;however this Exhibit A is merely a sample of the potential AccruedLiability Balance based on a future given date and using a sample discount rateemployed by the Bank on the Effective Date of this Agreement. The actualAccrued Liability Balance will be determined as of the date of Separation FromService.

 

**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 of thisAgreement, the term “Bank” or “Employer” shall be read so as to include the SantaLucia Bank holding company, Santa Lucia Bancorp, when permissible.

 

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

 

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

 

**1.6****         ****DiscountRate.**  The term “Discount Rate” means the rate usedby the Plan Administrator for in any specified year to accrue benefits underthis Plan; however, the Plan Administrator, in its sole discretion, may adjustthe Discount Rate to maintain the rate within reasonable standards according toGAAP (Generally Accepted Accounting Principles).

 

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

 

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

 

**1.9****         ****Executive Benefit****. **The term “Executive Benefit”shall mean the benefit amounts determined pursuant to Paragraphs 1 through 6herein (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**        **IRC409A****.** The term “IRC 409A” shall refer to the finalregulations issued by the IRS and the Treasury Department under Section 409Aof the Code.

 

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**1.11****       ****PlanYear****. **The “Plan Year”shall mean the calendar year.

 

**1.12****       ****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. IRC 409A currently 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 employeehas been providing services to the employer less than 36 months). There shallbe no Separation From Service while the Executive is on military leave, sickleave or other bona fide leave of absence, as long as such leave does notexceed six (6) months, or if longer, so long as the individual retains aright to re-employment with the service recipient under an applicable statuteor by contract.

 

**1.13****       ****Specified Employee.**  The term “Specified Employee” shall bedefined in accordance with IRC 409A. At present, and in accordance with IRC409A, the term “Specified Employee” means an employee who, as of the date ofthe employee’s Separation from Service, is a key employee of an employer ofwhich any stock is publicly traded on an established securities market orotherwise. An employee is a key employee if the employee meets the requirementsof section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with theregulations thereunder and disregarding section 416(i)(5)) at any time duringthe twelve (12) month period ending on a specified employee identificationdate. If Executive is a key employee as of a specified employee identificationdate, then Executive shall be treated as a key employee for the entire twelve(12) month period beginning on the specified employee effective date.

 

**1.14****       ****TerminationFor Cause.******The term “Termination ForCause” shall mean termination of Executive’s employment by reason of any of thefollowing:

 

A.            Executive’spersonal dishonesty, incompetence or willful misconduct;

 

B.            Executive’s breach offiduciary duty involving personal profit;

 

C.                                     Executive’sintentional failure to perform Executive’s duties for the Bank after a writtendemand for performance is given to Executive by the Board which demandspecifically identifies the manner in which the Board believes that Executivehas not performed his duties;

 

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

 

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

 

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

 

**2.1****         ****Contractof Employment****.**  Although this Agreement is intended toprovide Executive with an additional incentive to remain in the employ of theEmployer, this Agreement shall not be deemed to constitute a contract ofemployment between Executive and the Employer nor shall any provision of thisAgreement restrict or expand the right of the Employer to terminate Executive’semployment.  This Agreement shall have noimpact or effect upon any separate written Employment Agreement which Executivemay have with the Employer, it being the parties’ intention and agreement thatunless this Agreement is specifically referenced in said Employment Agreement(or any modification thereto), this Agreement (and the Employer’s obligationshereunder) shall stand separate and apart and shall have no effect on or beaffected by, the terms and provisions of said Employment Agreement.

 

**2.2****         ****FringeBenefit****. **The benefitsprovided by this Agreement are granted by the Bank as a fringe benefit toExecutive and are not a part of any salary reduction plan or any arrangementdeferring a bonus or a salary increase. Executive has no option to take anycurrent payments or bonus in lieu of the benefits provided by this Agreement.

 

**2.3****         ****ProhibitedPayments.**** **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 InsuranceCorporation  (collectively, the “FDICRules”) or is otherwise prohibited, restricted or subject to the prior approvalof a Bank Regulator, no payment shall be made hereunder without complying withsaid FDIC Rules.

 

**2.4****         ****AdditionalProhibited Payments.******If the Bank is subject tothe executive compensation limitations under the United States TreasuryDepartment’s Troubled Asset Relief Program (“TARP”) at the time Executivebecomes entitled to any payment under this Agreement, and if such payment,together with any other payments which Executive has the right to receive fromthe Bank, exceed the limits allowed for Executive established under TARP, thenthe aggregate payments to Executive pursuant to this Agreement and any otheragreement with Executive shall be reduced to the largest amount as will resultin no portion of such payments violating the executive compensation limitationsunder TARP.

 

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

 

**3.1****         ****Internal Revenue Code Section 409ACompliance****.**It is theintent of the parties to comply with all applicable Internal Revenue CodeSections, 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.

 

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Thus,for any benefits payable pursuant to this Agreement due to a Separation FromService, if the individual is a Specified Employee (as defined herein and byIRC 409A) as of the date of the Separation From Service, and the Employer’sstock is publicly traded on an established securities market or otherwise, anysuch benefit shall be withheld for six (6) months following suchSeparation From Service in order to comply with IRC 409A. In addition, for anyindividual affected by this six (6) month delay in payment imposed by IRC409A, and if 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.****            ****ExecutiveBenefits Payments****.**

 

**4.1****         ****Inthe Event Executive Does not Separate From Service with the Bank Until on orAfter Attaining Seventy Years of Age****. **In the event Executive does not Separate From Service until on or afterattaining age Seventy (70) (and for any reason other than for Cause), thenExecutive (or his designated Beneficiaries) shall be entitled to be paid anannual Executive Benefit equal to Forty-Five Thousand Dollars ($45,000). Thisannual Executive Benefit shall be paid in twelve (12) substantially equalmonthly installments on the first day of each month, beginning with the monthfollowing the month in which Executive Separates From Service and continuinguntil the death of the Executive or for a period of Fifteen (15) Years,whichever is the later to occur.

 

**4.2****         ****Paymentsin the Event Executive Separates From Service Prior to Attaining Age Seventyfor any Reason Other Than a Termintation For Cause (or due to death).**  In the event Executive  Separates From Service prior to attaining theage of Seventy (70) for any reason other than due to a Termination For Cause ordeath, then Executive shall be entitled to be paid the Accrued LiabilityBalance as of the date of Separation From Service. This Accrued LiabilityBalance shall be paid out monthly over a period of  Fifteen (15) Years (180 months). Paymentsshall commence on the first day of the first month following the month in whichExecutive Separates From Service and shall continue for One Hundred and Eighty(180) months. For illustrative purposes ONLY, a sample table showing possibleAccrued Liability Balance figures and resultant benefit payment amounts isattached hereto as “Exhibit A”. This Exhibit A is merely a sampleAccrued Liability Balance using a sample discount rate. The actual AccruedLiability Balance and resulting benefit will be determined at the time ofSeparation From Service, if applicable.

 

**4.3****         ****Terminationfor Cause****.**  In the event Executive’s Employment with theEmployer is Terminated at any time for Cause, then he shall forfeit any and allrights and benefits he may have under the terms of this Agreement and shallhave no right to be paid any of the amounts which would otherwise be due orpaid to the Executive by the Employer pursuant to the terms of this Agreement.

 

**4.4****         ****Death****.**In the eventExecutive dies while employed by the Bank and prior to attaining the age ofSeventy (70), then Executive’s designated Beneficiary(ies) shall be entitled toreceive an annual Executive Benefit equal to Forty-Five Thousand Dollars($45,000). This annual

 

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Executive Benefit shall be paid in twelve (12) substantially equalmonthly installments on the first day of each month, beginning with themonth following the month in which Executive dies and continuing 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 all or any portion of the amounts payableto Executive under this Agreement, either alone or together with other paymentswhich Executive has the right to receive from the Employer, constitute “excessparachute payments” within the meaning of Section 280G of the InternalRevenue Code of 1986, as amended (the “Code”), that are subject to the excisetax imposed by Section 4999 of the Code (or similar tax and/orassessment), Executive shall be responsible for the payment of such excise taxand Employer (and its successor) shall be responsible for any loss ofdeductibility related thereto; provided, however, that Employer and Executiveshall cooperate with each other and use all reasonable efforts to minimize tothe 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 theindependent accounting firm employed by the Employer immediately prior to thechange in control or such other independent accounting firm or advisor as maybe mutually agreeable to Employer and Executive in the exercise of their reasonablegood faith judgment.

 

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

 

**6.1****         ****NamedFiduciary and Plan Administrator.**** **The “Named Fiduciary andPlan Administrator” of this executive plan shall be the Bank until itsresignation or removal by the Board of Directors. As Named Fiduciary and PlanAdministrator, the Bank shall be responsible for the management, control andadministration of this executive plan. The Named Fiduciary may delegate toothers certain aspects of the management and operation responsibilities of theplan, including employment of advisors and the delegation of ministerial dutiesto qualified individuals.

 

**6.2****         ****ClaimsProcedure.**  In the eventa dispute arises over the benefits under this Agreement and benefits are notpaid to the Employee (or to the Employee’s beneficiary[ies], if applicable) andsuch claimants feel they are entitled to receive such benefits, then a writtenclaim must be made to the Employer (as the plan administrator) in accordancewith the following procedures:

 

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

 

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with the Administrator.

 

B.                                     Claim Decision.  Upon receipt of such claim, theAdministrator shall respond to such claimant within ninety (90) days afterreceiving the claim.  If theAdministrator determines that special circumstances require additional time forprocessing the claim, the Administrator can extend the response period by anadditional ninety (90) days for reasonable cause by notifying the claimant inwriting, prior to the end of the initial ninety (90) day period, that anadditional period is required. The notice of extension must set forth thespecial circumstances and the date by which the Administrator expects to renderits decision.

 

Ifthe claim is denied in whole or in part, the Administrator shall notify theclaimant in writing of such denial. The Administrator 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)                                  The specificreference to pertinent provisions of the Agreement on which the denial isbased;

(iii)                               A descriptionof any additional information or material necessary for the claimant to perfectthe claim and an explanation of why such material or information 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)                                 A statement ofthe 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.

 

Theclaimant (or his duly authorized representative) shall then have theopportunity 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 theclaimant’s claim for benefits.

 

D.                                    Decision onReview.  The Administrator shall respondin writing to such claimant within sixty (60) days after receiving the requestfor review.  If the Administratordetermines that special circumstances require an extension of time forprocessing the claim, written notice of the extension shall be furnished to theclaimant prior to the termination of the initial sixty (60)

 

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dayperiod. In no event shall such extension exceed a period of sixty (60) daysfrom the end of the initial period. The notice of extension must set forth thespecial circumstances requiring an extension of time and the date by which theAdministrator expects to render its decision.

 

Inconsidering the review, the Administrator shall take into account all materialsand information the claimant submits relating to the claim, without regard towhether such information was submitted or considered in the initial benefitdetermination.

 

TheAdministrator shall notify the claimant in writing of its decision onreview.  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 statementthat the 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 ofthe claimant’s right to bring a civil action under ERISA Section 502(a).

 

**7.0****         ****Attorney’sFees.**   If anylegal action or other proceeding is brought for the enforcement of thisAgreement, or because of an alleged dispute, breach, default ormisrepresentation in connection with any of the provisions of this Agreement,the successful or prevailing party or parties shall be entitled to recoverreasonable attorneys’ fees and other costs incurred in that action orproceeding 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 beentitled to money payments from the other, not necessarily the party in whosefavor a judgment is rendered.

 

**8.0****         ****BeneficiaryDesignation**

 

**8.1**          **Beneficiary Designation****.** If applicable,Executive shall have the right, at any time, to designate any person or personsas his Beneficiary or Beneficiaries (both primary as well as secondary) to whombenefits under this Agreement shall be paid in the event of his death prior tocomplete distribution to the Executive of the benefits due under thisAgreement. Each Beneficiary designation shall be in a written form and will beeffective only when filed with the Administrator during the Executive’slifetime.

 

**8.2****         ****Amendments to BeneficiaryDesignation**. Any beneficiary designation may be changed by theExecutive without the consent of any designated Beneficiary by the filing of anew Beneficiary designation with the Administrator. The filing of a newBeneficiary designation form will cancel all Beneficiary designationspreviously filed. If an Executive’s compensation is

 

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community property, anyBeneficiary designation shall be valid or effective only as permitted underapplicable law.

 

**8.3**          **No Beneficiary Designation****.** In the absenceof 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 there is adoubt 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 theBeneficiary****.** The payment to the deemedBeneficiary shall fully and completely discharge the Company from all furtherobligations under this Agreement.

 

**9.0****         ****Status as an Unsecured GeneralCreditor and Rabbi Trust.**** **Notwithstanding anything contained herein to the contrary:  (i) Executive shall have no legal orequitable rights, interests or claims in or to any specific property or assetsof the Employer as a result of this Agreement; (ii) none of the Bank’sassets shall be held in or under any trust for the benefit of Executive or heldin any way as security for the fulfillment of the obligations of the Bank underthis Agreement; (iii) all of the Bank’s assets shall be and remain thegeneral unpledged and unrestricted assets of the Bank; (iv) the Bank’sobligation under this Agreement shall be that of an unfunded and unsecuredpromise by the Bank to pay money in the future; and (v) Executive shall bean unsecured general creditor with respect to any benefits which may be payableunder the terms of this Agreement.

 

Notwithstandingsubparagraphs (i) through (v) above, the Bank and Executiveacknowledge and agree that, in the event of a Change in Control, upon requestof Executive, or in the Bank’s discretion if Executive does not so request andthe Bank nonetheless deems it appropriate, the Bank shall establish, not laterthan the effective date of the Change in Control, a Rabbi Trust or multipleRabbi Trusts (the “Trust” or “Trusts”) upon such terms and conditions as theBank, in its sole discretion, deems appropriate and in compliance withapplicable provisions of the Code, in order to permit the Bank to makecontributions and/or transfer assets to the Trust or Trusts to discharge itsobligations pursuant to this Agreement. The principal of the Trust or Trusts and any earnings thereon shall beheld separate and apart from other funds of the Bank to be used exclusively fordischarge of the Bank’s obligations pursuant to this Agreement and shallcontinue to be subject to the claims of the Bank’s general creditors until paidto Executive in such manner and at such times as specified in this Agreement.

 

**10.0****       ****Miscellaneous.**

 

**10.1****       ****OpportunityTo Consult With Independent Advisors.**  Executive acknowledges that he has beenafforded the opportunity to consult with independent advisors of his choosingincluding, without limitation, accountants or tax advisors and counselregarding both the benefits granted to him under the terms of this Agreementand the (i) terms and conditions

 

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which may affect Executive’s right to these benefits and (ii) personaltax effects of such benefits including, without limitation, the effects of anyfederal or state taxes, Section 280G of the Code, and any other taxes,costs, expenses or liabilities whatsoever related to such benefits, which inany of the foregoing instances Executive acknowledges and agrees shall be thesole responsibility of Executive, provided, however, that Employer andExecutive shall cooperate with each other and use all reasonable efforts to minimizeto the fullest extent possible the amount of excise tax imposed by Section 280Gand 4999 of the Code. In the event the parties are unable to eliminate suchexcise taxes, Executive further acknowledges and agrees that the Bank shallhave no liability whatsoever related to any such personal tax effects or otherpersonal costs, expenses, or liabilities applicable to Executive and furtherspecifically waives any right for himself or herself, and his or her heirs,beneficiaries, legal representatives, agents, successor and assign to claim orassert liability on the part of the Bank related to the matters described abovein this 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 andinure to the benefit of Executive and the Bank. Accordingly, the Bank shall not merge or consolidate into or withanother corporation, or reorganize or sell substantially all of its assets toanother corporation, firm or person, unless and until such succeeding orcontinuing corporation, firm or person agrees to assume and discharge theobligations of the Bank under this Agreement. In the alternative, the holding company may agree to assume anddischarge the obligation of the Bank under this Agreement. Upon the occurrenceof such event, the term “Bank” as used in this Agreement shall be deemed torefer to such surviving or successor firm, person, entity or corporation, orthe holding company, as the case may be.

 

**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 ofthis 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 anyother term, provision, covenant or condition invalid, void or unenforceable,and the Agreement shall remain in full force and effect notwithstanding suchpartial invalidity.

 

**10.7****       ****EntireAgreement.**  ThisAgreement supersedes any and all other agreements, either oral or in writing,between the parties with respect to the subject matter of this Agreement andcontains all of the covenants and agreements between the parties with respectthereto.  Each party to this Agreementacknowledges that no other representations, inducements, promises, oragreements, oral or otherwise, have been made by any party, or anyone acting onbehalf of any party, which are not set forth herein, and that no otheragreement, statement, or promise not contained in this Agreement shall be validor binding on either party.

 

**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.**  Theparagraph headings used in this Agreement are included solely for theconvenience of the parties and shall not affect or be used in connection withthe interpretation of this Agreement.

 

**10.10****     ****NoStrict Construction.**  Thelanguage used in this Agreement shall be deemed to be the language chosen bythe parties hereto to express their mutual intent, and no rule of strictconstruction will be applied against any person.

 

**10.11****     ****GoverningLaw.**  The laws ofthe State of California, other than those laws denominated choice of law rules,and where applicable, the rules and regulations of the Board of Governorsof the Federal Reserve System, Federal Deposit Insurance Corporation, Office ofthe

 

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Comptrollerof the Currency, or any other regulatory agency or governmental authorityhaving jurisdiction over the Bank shall govern the validity, interpretation,construction and effect of this Agreement.

 

**10.12****     ****Gender.**** **Whenever in this Agreementwords are used in the masculine, feminine or neuter gender, they shall be readand construed as in the masculine, feminine or neuter gender, whenever theyshould so apply.

 

**11.0****       ****Termination or Modificationof Agreement by Reason of Changes in the Law, Rules or Regulations.**

 

TheBank is entering into this Agreement upon the assumption that certain existingtax laws, the Code, rules and regulations will continue in effect in theircurrent form. If any said assumptions should change and said change has adetrimental effect on this Executive plan, then the Bank reserves the right toterminate or modify this Agreement accordingly.

 

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

 

**SantaLucia 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 |

 

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