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c48411_ex10-1.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 10.1 

AGREEMENT 

 AGREEMENT, dated February 8, 2007, between ZYGO CORPORATION, a Delaware corporation with an office at Laurel Brook Road, Middlefield, Connecticut 06455 (the “Company”), and CARL A. ZANONI, residing at 99 Long Hill Road,
Middlefield, Connecticut 06455 (“Zanoni”).

W I T N E S S E T H : 

 WHEREAS, Zanoni is a founder of the Company and has been critically involved in the development of many of the Company’s products and product strategies since its formation, including serving currently as the Senior Vice
President, Technology of the Company; and 

 WHEREAS, the Company desires to prohibit the ability of Zanoni to compete with the Company, after he ceases to be employed by the Company, and Zanoni agrees to so restrict his activities, all upon the terms and conditions herein
set forth.

 NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows: 

          1.       AGREEMENT
NOT TO COMPETE. 

                    (a)      Zanoni agrees that commencing upon the first calendar date that Zanoni ceases to be employed by the Company (the “Commencement
Date”) through and including the fourth anniversary of such date (such four year period being referred to herein as the “Non-Competition Period”), Zanoni shall, not directly or indirectly, as owner, partner, joint venturer,
stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in any capacity whatsoever engage in, become financially interested in, be employed by, render any consultation or business advice with respect to,
or have any connection with, any business engaged in the research, development, testing, design, manufacture, sale, lease, marketing, utilization or exploitation of any products or services which are designed for the same purpose as, are similar to,
or are otherwise competitive with, products or services of the Company or any of its subsidiaries in any geographic area where, at the time of the termination of his employment hereunder, the business of the Company or any of its subsidiaries was
being conducted or was proposed to be conducted in any manner whatsoever; provided, however, that Zanoni may own securities of any corporation which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any
one time one percent (1%) of any class of stock or securities of such corporation; provided, further, that in the event Zanoni’s employment is terminated by the Company for “justifiable cause” (as defined in subsection (b) below),
then the Company, at its sole option and discretion, shall have the right to cancel this Agreement (including the payments contemplated in Section 2 hereof) without further obligation on the part of either party, except as otherwise provided by law.
Notwithstanding the foregoing (but subject to the second proviso above), Zanoni agrees that his employment with the Company shall cease at the close of business on February 28, 2009, if not earlier terminated by Zanoni or the Company. 

- 1 - 

               (b)      As used herein, the term “justifiable cause” shall mean and be limited to: Zanoni’s willful and material breach (after
reasonable notice and a 10 day opportunity to cure, if possible) prior to the Commencement Date of the performance of his employment duties taken as a whole; willful or purposeful misconduct on the part of Zanoni that is materially damaging or
detrimental to the Company; Zanoni’s conviction (which, through lapse of time or otherwise, is not subject to appeal) of any crime or offense (i) involving money or other property of the Company or its subsidiaries or (ii) which constitutes a
felony in the jurisdiction involved; Zanoni’s performance of any act or his failure to act, for which if he were prosecuted and convicted, a crime or offense involving money or property of the Company or its subsidiaries, or which constitutes a
felony in the jurisdiction involved, would have occurred; Zanoni’s willful disclosure (after 10 days notice) to any person, firm or corporation other than the Company, its subsidiaries and its and their directors, officers and employees, of any
confidential information or trade secret of the Company or any of its subsidiaries; or Zanoni’s willful attempt to secure any personal profit in connection with the business of the Company or any of its subsidiaries. For purpose of this
subparagraph, the term “confidential information” means information, technical data, or know-how of a proprietary nature or which is otherwise confidential or non-public, including but not limited to, that which relates to patents, patent
applications, computer object or source code, algorithms, research, product plans, business plans, financial data, products, services, customers, markets, manufacturing processes, developments, inventions, processes, designs, drawings, engineering,
hardware configuration information, marketing or finances; provided such term does not include information which (i) is or becomes generally available to the public other than as a result of a breach of this agreement by Zanoni, (ii) becomes
available to Zanoni on a non-confidential basis from a source other than the Company, which source is not prohibited from transmitting the information to Zanoni by any legal, contractual or fiduciary obligations, or (iii) is required to be disclosed
by Zanoni as a result of legal process, the failure for which to disclose would result in Zanoni being held liable for contempt or suffering other censure or penalty. 

               (c)      If any portion of the restriction set forth in this Section 1 should, for any reason whatsoever, be declared invalid by a court of
competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected. 

               (d)      Zanoni acknowledges that the Company conducts business on a worldwide basis, that its sales and marketing prospects are for continued
expansion into world markets and that, therefore, the territorial and time limitations set forth in this Section 1 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. In the event any
such territorial or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Zanoni agrees to the reduction of the territorial or time limitation to the area or period which such court deems reasonable. 

         2.    COMPENSATION.

                 (a)      In consideration of Zanoni’s agreement not to compete with the Company as provided herein, the Company agrees to pay, or cause to be paid, to Zanoni, and Zanoni agrees to accept, the following amounts (the
“Non-Competition Payments”): 

- 2 - 

	               	          (i)
               On the Commencement Date, an amount equal to the base annual salary
          then being paid to Zanoni by the Company (the “Base Amount”),
          payable in one lump sum. However, said Base Amount will not be less
          than $274,300; 

                 (ii)
               During the first year of the Non-Competition Period, an amount equal
          to the sum of 85% of the Base Amount; 

                 (iii)
               During the second year of the Non-Competition Period, an amount equal
          to the sum of 65% of the Base Amount; 

                 (iv)
               During the third year of the Non-Competition Period, an amount equal
          to the sum of 45% of the Base Amount; and 

                 (v)      During
          the fourth year of the Non-Competition Period, an amount equal to the
    sum of 25% of the Base Amount. 

The Non-Competition Payments payable during each year of the Non-Competition Period (i.e., each of the payments referred to in items (ii)-(v) above) shall be paid in equal quarterly installments, commencing on the first business
day of each such year and subsequent quarters. 

                 (b)      Notwithstanding the foregoing, in the event this Agreement terminates at any time during the Non-Competition Period as a result of the death of Zanoni, the estate (or beneficiaries) of Zanoni shall receive from the Company a
lump sum cash payment equal to the lesser of the Base Amount or the aggregate remaining Non-Competition Payments otherwise required to be made hereunder. For clarification, this lump sum payment shall be in addition to all Non-Competition Payments
(i) paid by the Company to Zanoni prior to his death or (ii) which have accrued and are owing to Zanoni (based on the schedule set forth in subparagraph 2(a) above) through the date of his death, but which have not yet been paid. 

        3.      CONSULTANCY.

                   Zanoni
and the Company understand that the Company may, but is under no obligation to,
retain Zanoni as an independent consultant subsequent to the Commencement Date,
upon such terms and conditions as shall be mutually agreed to  between Zanoni
and the Company. The termination of Zanoni’s consulting services, if applicable,
shall not terminate the obligations of Zanoni or the Company under this Agreement.
The foregoing in no way shall imply a continuing obligation on  the part of the
Company to employ Zanoni for any period of time subsequent to the execution of
this Agreement. 

      4.         BOARD
POSITION 

                   It is understood and agreed that without the prior written consent of the Company and its Board, Zanoni shall not seek re-election as a director of the Company at any time commencing with and after the Annual Stockholders
Meeting expected to be held in November 2008. 

- 3 - 

      5.         REPRESENTATIONS
AND AGREEMENTS OF ZANONI.

                   Zanoni represents and warrants that he is free to enter into this Agreement and that there are no contracts or understandings, restrictive covenants or other restrictions, whether written or oral, preventing him from satisfying
his obligations hereunder.

      6.         NO
AUTHORITY. 

                   The parties hereto intend, and it is agreed, that subsequent to the Commencement Date (whether or not during the Non-Competition Period), Zanoni shall not act as, or be deemed to be, or otherwise represent himself to others to
be, an employee of the Company. During such time, Zanoni shall have no authority to sign contracts for or otherwise bind, obligate or commit the Company without the express written authorization from the Company. Zanoni understands and agrees that
subsequent to the Commencement Date (whether or not during the Non-Competition Period), he will not be eligible to participate in any plan or program maintained for employees of the Company, except as specifically otherwise set forth in an agreement
with the Company or provided by applicable state and federal laws. 

      7.         NON-SOLICITATION.

                   Zanoni agrees that until such time as this Agreement is terminated or expires pursuant to its terms and for a period of one (1) year thereafter, Zanoni shall not, directly or indirectly, request or cause contracting parties,
suppliers or customers with whom the Company or any of its subsidiaries has a business relationship to cancel or terminate any such business relationship with the Company or any of its subsidiaries or solicit, interfere with or entice from the
Company any employee or person who ceased to be employed by the Company for not more than twelve months prior thereto (provided, however, Zanoni may solicit former employees with the express written approval of the Company). If any portion of the restrictions set forth in this Section 7 should, for any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected.

      8.         AMENDMENT
OR ALTERATION.

                   No amendment or alteration of the terms of this Agreement shall be valid unless made in writing and signed by both of the parties hereto.

      9.         GOVERNING
LAW.

                   This Agreement shall be governed by the laws of the State of Connecticut applicable to agreements made and to be performed therein and both parties agree to submit to the jurisdiction of the laws of Connecticut.

- 4 - 

      10.       SEVERABILITY. 

                   The
holding of any provision of this Agreement to be invalid or unenforceable by
a court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect.

      11.       NOTICES.

                   Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand or overnight courier, or sent by certified mail, return receipt requested, to the addresses set forth above or
such other address as either party may from time to time designate in writing to the other, and shall be deemed given as of the date of the delivery or mailing.

      12.       WAIVER
OR BREACH.

                   It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

      13.        ENTIRE
AGREEMENT AND BINDING EFFECT.

                   This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs,
successors and assigns. Any proposed purchaser or transferee of all or substantially all the stock or assets of the Company shall be required, as a condition to any such purchase or transfer, to agree to be substituted for the Company hereunder and
to be bound by the terms and conditions of the Company hereunder, as if originally a party hereto. 

      14.       SURVIVAL.

                   The termination of the Non-Competition Payments shall not affect the enforceability of Sections 4, 6, 7 and 16 hereof.

      15.       FURTHER ASSURANCES.

                   The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

      16.       ARBITRATION.

                   Any controversy or claim between the parties hereto regarding, arising out of or related to this Agreement shall be settled by arbitration in the state of Connecticut in accordance with the Rules of the American Arbitration
Association, and judgment upon the award rendered in the arbitration may be entered in any court having jurisdiction thereof. 

     - 5 - 

      17.        HEADINGS.

                    The Section headings appearing in this Agreement are for the purposes of easy reference and shall not be considered a part of this Agreement or in any way modify, amend or affect its provisions.

* * * 

- 6 - 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

	 	ZYGO CORPORATION 

      

      By: /s/ J. Bruce Robinson  

      Name: J. Bruce Robinson, 

      Title: President and CEO 

      

      /s/ Carl A. Zanoni  

      CARL A. ZANONI 

 

- 7 -Exhibit 10.8

 

Exhibit 10.8

PLUMAS BANK

DIRECTOR RETIREMENT AGREEMENT

     THIS DIRECTOR RETIREMENT AGREEMENT (the “Agreement”) is adopted this 21st day of March, 2007,
by and between PLUMAS BANK, a California corporation located in Quincy, California (the “Company”)
and JOHN FLOURNOY (the “Director”).

     The purpose of this Agreement is to provide specified benefits to the Director who contributes
to the continued growth, development, and future business success of the Company.

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 Company, under
Generally Accepted Accounting Principles (“GAAP”), for the Company’s obligation to the
Director under this Agreement, by applying Accounting Principles Board Opinion Number 12 (“APB
12”) as amended by Statement of Financial Accounting Standards Number 106 (“FAS 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. The Accrual
Balance shall be reported annually by the Company to the Director.
	 
	1.2	 	“Beneficiary” means each designated person, or the estate of the deceased Director,
entitled to benefits, if any, upon the death of the Director determined pursuant to Article 4.
	 
	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 Company as from time to time constituted.
	 
	1.5	 	“Change in Control” means a change in the ownership or effective control of the
Company, or in the ownership of a substantial portion of the assets of the Company, as such
change is defined in Section 409A of the Code and regulations thereunder.
	 
	1.6	 	“Code” means the Internal Revenue Code of 1986, as amended.

 

 

	1.7	 	“Disability” means 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
directors of the Company. Medical determination of Disability may be made by either the
Social Security Administration or by the provider of an accident or health plan covering
directors of the Company. 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	 	“Effective Date” means May 17, 2006.
	 
	1.10	 	“Normal Retirement Age” means the earlier of (i) Director attaining age sixty-five
(65) and completing fifteen (15) Years of Service; or (ii) the date the Director is required
to retire pursuant to the Company’s mandatory retirement policy for Directors.
	 
	1.11	 	“Normal Retirement Date” means the later of Normal Retirement Age or Separation from
Service.
	 
	1.12	 	“Plan Administrator” means the plan administrator described in Article 6.
	 
	1.13	 	“Plan Year” means each twelve-month period commencing on October 1st and ending on
September 30th of each year. The initial Plan Year shall commence on the Effective
Date of this Agreement and end on the following September 30, 2006.
	 
	1.14	 	“Separation from Service” means the termination of the Director’s service as a
director of the Company for reasons other than death.
	 
	1.15	 	“Termination for Cause” means Separation from Service for:

	 	(a)	 	Gross negligence or gross neglect of duties to the Company; or
	 
	 	(b)	 	Conviction of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Director’s service with the Company; or
	 
	 	(c)	 	Fraud, disloyalty, dishonesty or willful violation of any law or significant
Company policy committed in connection with the Director’s service and resulting in a
material adverse effect on the Company.

 

 

	1.16	 	“Years of Service” means the twelve consecutive month period beginning on the date
the Director’s service on the Board commences and any twelve (12) month anniversary thereof,
during the entirety of which time the Director is a director of the Company. Service with a
subsidiary or other entity controlled by the Company before the time such entity became a
subsidiary or under such control shall not be considered “credited service” unless the Plan
Administrator specifically agrees to credit such service. In addition and solely for the
purpose of determining the amount of benefits to be distributed hereunder the Plan
Administrator in its discretion may also grant additional Years of Service in such
circumstances where it deems such additional service appropriate.

Article 2

Distributions During Lifetime

	2.1	 	Normal Retirement Benefit. Upon the Normal Retirement Date, the Company 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 Ten
Thousand Dollars ($10,000).
	 
	 	2.1.2	 	Distribution of Benefit. The Company shall distribute the annual
benefit to the Director in twelve (12) equal monthly installments commencing on the
first day of the month following Separation from Service. The annual benefit shall be
distributed to the Director for fifteen (15) years.

	2.2	 	Disability Benefit. If the Director experiences a Disability which results in a
Separation from Service prior to Normal Retirement Age, the Company 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 annual benefit under this Section 2.3 is Ten
Thousand Dollars ($10,000) multiplied by the applicable percentage in the vesting
schedule set forth below.

	 	 	 
	Years of Service	 	 
	Completed at Separation	 	 
	from Service	 	Vesting Percentage
	1
	 	6.67%
	2
	 	13.33%
	3
	 	20.00%
	4
	 	26.67%
	5
	 	33.33%
	6
	 	40.00%

 

 

	 	 	 
	Years of Service	 	 
	Completed at Separation	 	 
	from Service	 	Vesting Percentage
	7
	 	46.67%
	8
	 	53.33%
	9
	 	60.00%
	10
	 	66.67%
	11
	 	73.33%
	12
	 	80.00%
	13
	 	86.67%
	14
	 	93.33%
	15
	 	100.00%

	 	2.2.2	 	Distribution of Benefit. The Company shall distribute the annual
benefit to the Director in twelve (12) equal monthly installments commencing on the
first day of the month following Separation from Service. The annual benefit shall be
distributed to the Director for fifteen (15) years.

	2.3	 	Change in Control Benefit. Upon a Change in Control, followed by a Separation from
Service, the Company 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 one hundred
percent (100%) of the Normal Retirement Benefit amount described in Section 2.1.1.
	 
	 	2.3.2	 	Distribution of Benefit. The Company shall distribute the annual
benefit to the Director in twelve (12) equal monthly installments commencing on the
first day of the month following Separation from Service. The annual benefit shall be
distributed to the Director for fifteen (15) years.
	 
	 	2.3.3	 	Excess Parachute Payments. Notwithstanding any provision of this
Agreement to the contrary, and to the extent allowed by Code Section 409A, if any
distribution(s) made under this Section 2.3 would be treated as an “excess parachute
payment” under Code Section 280G, the Company shall reduce such distribution(s) to the
extent necessary to avoid treating the distribution(s) as an excess parachute payment.

	2.5	 	Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the
inclusion of any amount into the Director’s income as a result of the failure of this
non-qualified deferred compensation plan to comply with the requirements of Section 409A of
the Code, to the extent such tax liability can be covered by the Director’s vested Accrual
Balance without further to comply with the requirements of Section 409a of the Code, a
distribution shall be made as soon as is administratively practicable following the discovery
of the plan failure.

 

 

	2.6	 	Change in Form or Timing of Distributions. For distribution of benefits under this
Article 2, the Director and the Company may, subject to the terms of Section 8.1, amend the
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 Section 409A of the Code and the regulations there under;
	 
	 	(b)	 	must, for benefits distributable under Sections 2.1, 2.2 and
2.3, 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.

Article 3

Distribution at Death

	3.1	 	Death During Active Service. If the Director dies while in the active service of the
Company, the Company shall distribute to the Beneficiary the death benefit in a lump sum of
$30,000 within 30 days of the Director’s death.
	 
	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 Company shall distribute to the Beneficiary a death benefit in a lump sum equal to the
amount of $30,000 less the aggregate amount of benefits previously paid pursuant to this
Agreement within 30 days of the Director’s death.
	 
	3.3	 	Death After Separation from Service But Before Benefit Distributions Commence. If
the Director is entitled to benefit distributions under this Agreement, but dies prior to the
commencement of said benefit distributions, the Company shall distribute to the Beneficiary
the death benefit in a lump sum of $30,000 within 30 days of the Director’s death.

Article 4

Beneficiaries

	4.1	 	Beneficiary. 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 Company in which the Director
participates.

 

 

	4.2	 	Beneficiary Designation: Change; Spousal Consent. 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 his or her
spouse as a Beneficiary, a spousal consent, in the form designated by the Plan
Administrator, must be signed 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, as in effect from time
to time. 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.
	 
	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, the
benefits shall be made to the personal representative of 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 Director’s Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Agreement for such
distribution amount.

Article 5

General Limitations

	5.1	 	Termination for Cause. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not distribute any benefit under this Agreement if the Director’s
service with the Company is terminated due to a Termination for Cause.

 

 

	5.2	 	Suicide or Misstatement. No benefits shall be distributed if the Director commits
suicide within two years after the Effective Date of this Agreement, or if an insurance
company which issued a life insurance policy covering the Director and owned by the Company
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.
	 
	5.3	 	Removal. Notwithstanding any provision of this Agreement to the contrary, the
Company 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.

Article 6

Administration of Agreement

	6.1	 	Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s) as the Board
shall appoint. 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 the Agreement to the extent the exercise of such discretion and
authority does not conflict with Section 409A of the Code and regulations thereunder.
	 
	6.2	 	Agents. In the administration of this Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as it sees fit, (including acting
through a duly appointed representative), and may from time to time consult with counsel who
may be counsel to the Company.
	 
	6.3	 	Binding Effect of Decisions. The decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the administration,
interpretation and application of the Agreement and the rules and regulations promulgated
hereunder shall be final and conclusive and binding upon all persons having any interest in
the Agreement.
	 
	6.4	 	Indemnity of Plan Administrator. The Company shall indemnify and hold harmless the
members of 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 or any of its members.
	 
	6.5	 	Company Information. To enable the Plan Administrator to perform its functions, the
Company shall supply full and timely information to the Plan Administrator on all matters
relating to the date and circumstances of the retirement, Disability, death, or Separation
from Service of the Director, and such other pertinent information as the Plan Administrator
may reasonably require.

 

 

	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. A Director or Beneficiary (“claimant”) who has not received
benefits under the 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 (180) 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 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 90 days by notifying the claimant in writing, prior to the end of the
initial 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 the 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; and
	 
	 	(d)	 	An explanation of the Agreement’s review procedures and the
time limits applicable to such procedures.

 

 

	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 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 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 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 60 days by notifying the claimant in writing, prior to
the end of the initial 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 the 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 to the claimant’s claim for benefits;
and
	 
	 	(d)	 	A statement of the claimant’s right to bring a civil action.

 

 

Article 8

Amendments and Termination

	8.1	 	Amendments. This Agreement may be amended only by a written agreement signed by the
Company and the Director. However, the Company may unilaterally amend this Agreement to
conform with written directives to the Company from its auditors or banking regulators or to
comply with legislative or tax law, including without limitation Section 409A of the Code and
any and all regulations and guidance promulgated thereunder.
	 
	8.2	 	Plan Termination Generally. This Agreement may be terminated only by a written
agreement signed by the Company and Director. However, the Company may unilaterally terminate
this Agreement to conform with written directives to the Company from its auditors or banking
regulators or to comply with legislative or tax law, including without limitation Section 409A
of the Code and any and all regulations and guidance promulgated there under. In the event
the Company unilaterally terminates this Agreement, the Director shall be entitled to receive
from the Company an amount equal to the Accrual Balance as of the date the Agreement is
terminated. Except as provided in Section 8.3, the termination of this Agreement shall not
cause any early distribution of benefits under this Agreement. Rather, upon such termination,
benefit distributions will be made in accordance with the distribution schedules set forth
under Article 2 or Article 3, as applicable.
	 
	8.3	 	Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in
Section 8.2, if the Company 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 the Agreement and further provided that all the Company’s
arrangements which are substantially similar to the 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 the termination of the arrangements;
	 
	 	(b)	 	Upon the Company’s dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Agreement are included in the Director’s
gross income in the latest of (i) the calendar year in which the 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 Company’s termination of this and all other non-account balance plans
(as referenced in Section 409A of the Code or the regulations thereunder), provided
that all distributions are made no earlier than twelve (12) months and no later than
twenty-four (24) months following such termination, and the Company does not adopt any
new non-account balance plans for a minimum of five (5) years following the date of
such termination;

	 	 	The Company shall distribute the Accrual Balance, determined as of the date of the
termination of the Agreement, to the Director in a lump sum subject to the above terms.

Article 9

Miscellaneous

	9.1	 	Binding Effect. This Agreement shall bind the Director and the Company, and their
beneficiaries, survivors, executors, administrators and transferees.
	 
	9.2	 	No Guarantee of Service. This Agreement is not a contract for service. It does not
give the Director the right to remain as a director of the Company, nor does it interfere with
the Company’s right to discharge the Director. It also does not require the Director to
remain a director nor interfere with the Director’s right to terminate service 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 Company shall withhold any taxes that are
required to be withheld, including but not limited to taxes owed under Section 409A of the
Code and regulations thereunder, from the benefits provided under this Agreement. The
Director acknowledges that the Company’s sole liability regarding taxes is to forward any
amounts withheld to the appropriate taxing authority(ies). Further, the Company shall satisfy
all applicable reporting requirements, including those under Section 409A of the Code and
regulations thereunder.
	 
	9.5	 	Applicable Law. The Agreement and all rights hereunder shall be governed by the laws
of the State of California, 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 Company for the distribution of benefits under this Agreement. The benefits
represent the mere promise by the Company 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 Company to which the Director and
Beneficiary have no preferred or secured claim.

 

 

	9.7	 	Reorganization. The Company 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 Company under this Agreement. Upon the occurrence of such event, the term
“Company” as used in this Agreement shall be deemed to refer to the successor or survivor
bank.
	 
	9.8	 	Entire Agreement. This Agreement constitutes the entire agreement between the
Company 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.
	 
	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 Company or the
Plan Administrator to perform any act required by this Agreement, the Company or Plan
Administrator may in its discretion perform such alternative act as most nearly carries out
the intent and purpose of this Agreement and is in the best interests of the Company, provided
that such alternative acts do not violate Section 409A of the Code.
	 
	9.11	 	Headings. Article and section headings are for convenient reference only and shall
not control or affect the meaning or construction of any of its provisions.
	 
	9.12	 	Validity. In case 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 and invalid provision has
never been inserted herein.
	 
	9.13	 	Notice. Any notice or filing required or permitted to be given to the Company 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:

Plumas Bank

35 South Lindan Avenue

Quincy, CA 95971

	 	 	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	 	Compliance with Section 409A. This Agreement shall at all times be administered and
the provisions of this Agreement shall be interpreted consistent with the requirements of
Section 409A of the Code and any and all regulations thereunder, including such regulations as
may be promulgated after the Effective Date of this Agreement.

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

	 	 	 	 	 
	DIRECTOR:	 	COMPANY:
	 	 	PLUMAS BANK
	 
	 	 	 	 
	/s/ John Flournoy

	 	By
	 	Daniel West
	 

	 	 	 	 
	John Flournoy
	 	 	 	 
	 	 	Title Chairman

 

 

PLUMAS BANK

Director Retirement Agreement

BENEFICIARY DESIGNATION FORM

{  }     New Designation

{  }     Change in Designation

I, JOHN FLOURNOY, designate the following as Beneficiary under the Agreement:

	 	 	 	 	 	 	 
	Primary:
	 	 	 	 	 	 
	 

	 	 	%	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	%	 	 	 
	 

	 	 	 	 	 	 
	Contingent:
	 	 	 	 	 	 
	 

	 	 	%	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	%	 	 	 
	 

	 	 	 	 	 	 

Notes:

	 	•	 	Please PRINT CLEARLY or TYPE the names of the beneficiaries.
	 
	 	•	 	To name a trust as Beneficiary, please provide the name of the trustee(s) and the
exact name and date of the trust agreement.
	 
	 	•	 	To name your estate as Beneficiary, please write “Estate of [your name]”.
	 
	 	•	 	Be aware that none of the contingent beneficiaries will receive anything unless ALL of
the primary beneficiaries predecease you.

I understand that I may change these beneficiary designations by delivering a new written
designation to the Plan Administrator, which shall be effective only upon receipt and
acknowledgment by the Plan Administrator prior to my death. I further understand that the
designations will be automatically revoked if the Beneficiary predeceases me, or, if I have named
my spouse as Beneficiary and our marriage is subsequently dissolved.

	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 
	Signature:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 

SPOUSAL CONSENT (Required if someone other than Spouse named beneficiary):

I consent to the beneficiary designation above, and acknowledge that if I am named Beneficiary and
our marriage is subsequently dissolved, the designation will be automatically revoked.

	 	 	 	 	 	 	 
	Spouse Name:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 
	Signature:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 

Received by the Plan Administrator this                      day of                                         , 2   
  

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:

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