Document:

Employment Agreement between James Sundquist and the Registrant

 EXHIBIT 10.15 
  
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT (the “Agreement”) is made and entered into as of October 28, 2003 (the “Effective Date”) by and between FIRST
CALIFORNIA BANCSHARES, a California corporation (“Company”) and JAMES A. SUNDQUIST (“Employee”) (collectively sometimes referred to as the “Parties”): 
  
 WHEREAS, the Parties desire to enter into an agreement for the purpose of retaining Employee’s services as
Executive Vice-President and Chief Financial Officer of Company’s banking subsidiary, Placer Sierra Bank (the “Bank”); and 
  
 WHEREAS, the Parties intend this Agreement to supersede any and all previous agreements between the Employee and Company (and each of its parent
companies, shareholders, subsidiaries, divisions and affiliates, including the Bank), if any, including, but not limited to, that certain Employment Agreement entered into between Employee and the Bank as of January 1, 2003; 
  
 NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS: 
  
 1. Employment and Duties. Employee is hereby employed by
Company to serve as Executive Vice-President and Chief Financial Officer of the Bank. Employee shall report to, and shall be subject to the direction of, the Chief Financial Officer of Company. Subject to the foregoing, Employee shall be responsible
for performing such duties as are customarily and ordinarily performed by the executive vice-president and chief financial officer of a bank. Employee will also perform such duties as he may, from time to time, be called upon to assist companies
affiliated with Company, and such other attendant duties as he may, from time to time, be reasonably requested to perform by the Chief Financial Officer of Company. 
  
 2. Extent of Services. 
  
 (a) Exclusive Employment. Employee shall devote his full time, ability and attention to
the business of Company and its parent companies, subsidiaries, divisions and affiliates, during the Employment Term, and shall neither directly nor indirectly render any services of a business, commercial or professional nature to any other person,
firm, corporation or organization for compensation without the prior written consent of the Chief Financial Officer of Company. 
  
 (b) Employee Investment Activities. Nothing contained herein shall be construed as preventing Employee from (i)
investing his personal assets in businesses which do not compete with Company or the Bank in such form or manner as will not require any services on the part of Employee in the operation or the affairs of the companies in which such investments are
made and in which his participation is solely that of an investor, (ii) purchasing securities in any corporation whose securities are regularly traded provided that such purchase shall not result in Employee collectively owning beneficially at any
time five percent or more of the equity securities of any corporation engaged in a business competitive to that of Company or the Bank, and (iii) participating in conferences, preparing or publishing papers or books or 

  

 
teaching so long as the Chief Financial Officer of Company approves of such activities prior to Employee’s engaging in them. 
  
 3. Term of Employment. Subject to prior termination of
this Agreement as hereinafter provided in section 6, Company hereby employs Employee, and Employee hereby accepts employment with Company, for a period of three (3) years beginning on the Effective Date and ending on the third anniversary of the
Effective Date (the “Initial Employment Term”). The Initial Employment Term shall be extended automatically for additional 1 year periods (each a “Renewal Term”), unless written notice that this Agreement will not be extended is given by either Party to the other at least sixty (60) days prior to the expiration of the Initial
Employment Term or any Renewal Term. As used herein, “Employment Term” means the Initial Employment Term together with any Renewal Terms. 
  
 4. Termination of Prior Employment Agreements. Company and Employee agree that as of the Effective Date, all prior employment
agreements between Employee and the Bank (and/or any parent company, shareholder, subsidiary, division or affiliate thereof) including but not limited to the January 1, 2003 Employment Agreement between Employee and the Bank, are hereby canceled,
terminated, rescinded and superceded. It is expressly agreed by the Parties hereto that the Bank is a third party beneficiary of this Agreement, and is released from any obligations under any prior employment agreements with Employee.

  
 5. Compensation and Benefits. In
consideration of Employee’s services to Company during the Employment Term, Company agrees to compensate Employee, subject to such limitations as may exist under any federal or state banking law or regulation, as follows: 
  
 (a) Base Compensation. Company shall
pay or cause to be paid to Employee a base compensation of $180,000 per year for the period ending December 31, 2003 (hereinafter the “Base Salary”), less payroll taxes and withholding required by federal, state or local law and any
additional withholding to which Employee agrees in writing. Said Base Salary shall be payable in semi-monthly installments in accordance with Company’s normal payroll procedures. The Board shall review the Base Salary not less than sixty (60)
days prior to January 1, 2004, and thereafter not less than sixty (60) days prior to each new calendar year, and shall determine, in its sole, absolute and unreviewable discretion, whether to increase the Base Salary for the subsequent twelve (12)
months of the Employment Term. Any increase in Base Salary so determined by the Board shall become effective as of January 1 of the respective calendar year. The Base Salary shall be prorated for any partial year in which this Agreement is in
effect. 
  
 (b) Executive Incentive
Bonus. In addition, Employee shall be eligible to participate in Company’s Executive Incentive Plan, in accordance with the terms and conditions of said plan, as Company, in its sole and absolute discretion, may establish from time to
time, which shall be no less favorable than the executive incentive compensation arrangements for Company’s or the Bank’s other executives at the Executive Vice President level. 
  
 (c) Deferred Compensation. In the event
Company should establish a deferred compensation plan, Employee shall be eligible to participate in said plan, in accordance with the terms and conditions of said plan, as Company, in its sole and absolute discretion, may establish from time to
time. 
  

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 (d) General Expenses. Company shall, upon submission and approval of
written statements and bills in accordance with the then regular procedures of Company, reimburse Employee for any and all reasonable necessary, customary and usual expenses incurred by him while traveling for or on behalf of Company, and any and
all other necessary, customary or usual expenses (including entertainment) incurred by Employee for or on behalf of Company in the normal course of business, as determined to be appropriate by Company. 
  
 (e) Health, Life and Disability Insurance.
Company shall provide for Employee’s participation, at Company’s expense, in group medical, dental, vision, life and disability insurance benefits equivalent to the maximum benefits available under the group insurance programs
maintained by Company for its employees. Employee shall have the right, in Employee’s discretion, to designate the beneficiary or beneficiaries of any such insurance. Company reserves the right to modify and amend such benefits from time to
time. As provided under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) respecting continuation of any insurance coverage, Employee shall, upon a loss of any such coverage for himself under Company’s health,
dental, and/or vision plans (if any) resulting from (1) termination of Employee’s employment (for any reason other than for gross misconduct) or (2) a reduction in his hours, be entitled to exercise his COBRA rights. Employee shall pay all
premiums for any such continuation coverage(s) elected by Employee. In addition, Employee’s current stand alone disability policy shall remain in effect during the term of the Agreement and the Company shall continue to pay such contributions
as necessary to maintain this policy in the form of Exhibit “B” hereto. 
  
 (f) Automobile Allowance. During the Employment Term, Employee shall be entitled to an automobile allowance in the
amount of $900 per month (less payroll taxes and withholding required by federal, state or local law). In addition, Company shall pay the amounts charged by Employee for fuel for business related travel on a credit card provided by Company to
Employee. Except for this automobile allowance and payment of fuel charges, Company shall not be obligated to pay any other expenditure with respect to the ownership or operation of Employee’s automobile, and Employee will be responsible for
all out-of-pocket automobile expenses, including, but not limited to, registration, insurance, repairs and maintenance. Employee shall procure and maintain an automobile liability insurance policy on the automobile, with coverage including Employee
for at least $100,000 for bodily injury or death to any one person, $300,000 for bodily injury or death in any one accident, and $50,000 for property damage in any one accident. Company shall be named as an additional insured and Employee shall
provide Company with copies of policies evidencing insurance and Company’s inclusion as an additional insured. 
  
 (g) Vacation. Employee shall be entitled to four weeks (20 days) paid vacation leave per year, which shall accrue on a daily
basis. Such vacation leave shall be taken at such time or times as are mutually agreed upon by Employee and the Board and in accordance with Company’s vacation leave policy, provided, that at least two (2) weeks of such vacation shall be taken
consecutively. Employee acknowledges that the requirement of two (2) consecutive weeks of vacation is required by sound banking practice. For each calendar year, the Board shall decide, in its discretion, either (1) to pay Employee for any unused
vacation time for such calendar year or (2) to carry over any unused vacation time for such calendar year to the next 

  

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calendar year, provided, however, that Employee shall not accrue additional vacation time at any time that the Employee has accrued and unused vacation time
of seven (7) weeks. 
  
 (h) Other
Benefits. Employee shall be entitled to participate during the Employment Term in all employee benefit, welfare and other plans, practices, policies and programs generally applicable to similarly situated employees of Company as are in
effect from time to time, in accordance with the applicable terms and conditions thereof. Company reserves the right to modify and amend such benefits, plans, practices, policies and programs from time to time. 
  
 6. Termination of Agreement. This Agreement may be terminated
with or without cause during the Employment Term in accordance with this section 6. 
  
 (a) Termination for Good Reason. Employee may terminate this Agreement for “Good Reason”. “Good Reason”
shall mean the occurrence (without Employee’s express written consent) of any one of the following acts by Company or its successor: 
  
 (i) The assignment to Employee of duties or title inconsistent with Employee’s status as Executive Vice-President and Chief
Financial Officer or a substantial adverse alteration in the nature or stature of Employee’s responsibilities from those described herein, which is not cured by Company within seven (7) business days after Employee delivers written notice to
Company of such assignment or alteration; 
  
 (ii) A reduction by Company of Employee’s then current Base Salary; 
  
 (iii) Any material breach by Company of any provisions of this Agreement, which breach is not cured by Company within seven (7)
business days after Employee delivers written notice of such breach to Company. 
  
 In the event that Employee terminates this Agreement for Good Reason, Employee shall be eligible to receive severance pay consisting of a single sum severance payment equal to twelve (12) months of his then current
Base Salary, as defined in section 5(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and withholding required by any federal, state or local law, any additional withholding to which Employee
has agreed, and any outstanding obligations owed by the Employee to Company) and any and all stock options previously granted to Employee under any stock option plan of Company or any affiliate of Company and held by Employee at the date of
termination shall become fully vested and shall be exercisable for a period of two (2) years after the date of termination. Provided, however, that Company shall be obligated to pay Employee’s incentive bonus under Company’s Executive
Incentive Compensation Plan at the same time as it makes payment of any other incentive bonuses paid to other officers of Company under such plan and shall not be obligated to make such payment to Employee at any earlier time. No portion of such
severance pay shall be payable, nor shall stock options become fully vested nor exercise period be extended, until eight days after delivery to Company of a duly executed release in the form of Exhibit “A” hereto (“Release”).
Employee shall not deliver the executed Release to Company prior to the date his employment with Company terminates. 
  

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 Such severance pay, vesting of stock options and extension of exercise period shall constitute liquidated
damages in lieu of any and all claims by Employee against Company and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and agents, arising out
of this Agreement or out of the employment relationship or termination of the employment relationship between Employee and Company, and shall be in full and complete satisfaction of any and all rights which Employee may enjoy hereunder, and is
expressly conditioned upon receipt by Company of an executed, unconditional Release from Employee in the form of Exhibit “A”. 
  
 In the event that Employee terminates this Agreement for Good Reason, Employee also shall be entitled to receive (i) those benefits, if any, that have
vested by operation of state or federal law or under any written term of a plan (“Vested Benefits”), and (ii) health care coverage continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA Rights”). 
  
 (b)
Termination Upon Change in Control. “Change in Control” shall mean the occurrence of any of the following events: 
  
 (i) The consummation of a plan of dissolution or liquidation of Company; 
  
 (ii) The consummation of a plan of reorganization,
merger or consolidation involving Company, except for a reorganization, merger or consolidation where (A) the shareholders of Company immediately prior to such reorganization, merger or consolidation own directly or indirectly more than 50% of the
combined voting power of the outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation (the “Surviving Corporation”) and the individuals who were members of the Board immediately prior to
the execution of the agreement providing for such reorganization, merger or consolidation constitute at least 50% of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a
majority of the voting securities of the Surviving Corporation, or (B) Company is reorganized, merged or consolidated with a corporation in which any shareholder owning at least 50% of the combined voting power of the outstanding voting securities
of Company immediately prior to such reorganization, merger or consolidation, owns at least 50% of the combined voting power of the outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation;

  
 (iii) The sale of all or substantially
all of the assets of Company to another person or entity; 
  
 (iv) The acquisition of beneficial ownership of stock representing more than fifty percent (50%) of the voting power of Company then outstanding by another person or entity. 
  
 In the event of a Change in Control and, during the twelve month period
following such Change in Control, Employee terminates employment with Company (pursuant to section 6(e) below) following a reduction in the Employee’s duties or title, Employee shall be eligible to receive severance pay consisting of a single
sum severance payment equal to twelve (12) months 

  

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of his then current Base Salary, as defined in section 5(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll
taxes and withholding required by any federal, state or local law, any additional withholding to which Employee has agreed, and any outstanding obligations owed by the Employee to Company) and any and all stock options previously granted to Employee
under any stock option plan of Company or any affiliate of Company and held by Employee at the date of termination shall become fully vested and shall be exercisable for a period of two (2) years after the date of termination. Provided, however,
that Company shall be obligated to pay Employee’s incentive bonus under Company’s Executive Incentive Compensation Plan at the same time as it makes payment of any other incentive bonuses paid to other officers of Company under such plan
and shall not be obligated to make such payment to Employee at any earlier time. No portion of such severance pay shall be payable, nor shall stock options become fully vested nor exercise period be extended, until eight days after delivery to
Company of a duly executed Release in the form of Exhibit “A” hereto. Employee shall not deliver the executed Release to Company prior to the date his employment with Company terminates. 
  
 Such severance pay, vesting of stock options and extension of exercise period
shall constitute liquidated damages in lieu of any and all claims by Employee against Company and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers,
employees and agents, arising out of this Agreement or out of the employment relationship or termination of the employment relationship between Employee and Company, and shall be in full and complete satisfaction of any and all rights which Employee
may enjoy hereunder, and is expressly conditioned upon receipt by Company of an executed, unconditional Release from Employee in the form of Exhibit “A”. 
  
 Notwithstanding anything to the contrary provided herein, in the event the amounts payable to Employee in the event of a
Change in Control would, if they included such termination payments and stock option vesting accelerations to be made pursuant to this section 6(b), constitute Excess Parachute Payments for purposes of Sections 280G(b) and 4999 of the Internal
Revenue Code of 1986, as amended, (“IRC”) or any successor statute) (after application of IRC section 280G(b)(4)), the amount payable under this section 6(b) shall be reduced by the amount necessary to cause Employee to receive no Excess
Parachute Payments. 
  
 In the event that Employee is terminated
pursuant to this section 6(b), Employee shall be entitled to receive Vested Benefits, as defined hereinabove, and COBRA rights, as defined hereinabove. 
  
 (c) Early Termination by Company Without Cause. This Agreement and Employee’s employment may be terminated by Company
without cause, for any reason whatsoever or for no reason at all, in the sole, absolute and unreviewable discretion of Company, upon written notice by Company to Employee. 
  
 In the event that Employee is terminated by Company without cause, Employee shall be eligible to receive severance pay
consisting of a single sum severance payment equal to twelve (12) months of his then current Base Salary, as defined in section 5(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and
withholding required by any federal, state or local law, any additional withholding to which Employee has 

  

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agreed, and any outstanding obligations owed by the Employee to Company) and any and all stock options previously granted to Employee under any stock option
plan of Company or any affiliate of Company and held by Employee at the date of termination shall become fully vested and shall be exercisable for a period of two (2) years after the date of termination. Provided, however, that Company shall be
obligated to pay Employee’s incentive bonus under Company’s Executive Incentive Compensation Plan at the same time as it makes payment of any other incentive bonuses paid to other officers of Company under such plan and shall not be
obligated to make such payment to Employee at any earlier time. No portion of such severance pay shall be payable, nor shall stock options become fully vested nor exercise period extended, until eight days after delivery to Company of a duly
executed Release in the form of Exhibit “A” hereto. Employee shall not deliver the executed Release to Company prior to the date his employment with Company terminates. 
  
 Such severance pay, vesting of stock options and extension of exercise period shall constitute liquidated damages in lieu of
any and all claims by Employee against Company and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and agents, arising out of this Agreement or
out of the employment relationship or termination of the employment relationship between Employee and Company, and shall be in full and complete satisfaction of any and all rights which Employee may enjoy hereunder, and is expressly conditioned upon
receipt by Company of an executed, unconditional Release from Employee in the form of Exhibit “A”. 
  
 In the event that Employee is terminated pursuant to this section 6(c), Employee shall also be entitled to receive Vested Benefits, as defined
hereinabove, and COBRA rights, as defined hereinabove. 
  
 (d) Early Termination by Company for Cause. This Agreement and Employee’s employment may be terminated for cause by Company upon written notice to Employee, and Employee shall not be entitled to receive Base Salary or any
other compensation or other benefits for any period after termination for cause. Employee understands and agrees that his satisfactory performance of this Agreement requires conformance with reasonable standards of diligence, competence, skill,
judgment and efficiency of a person holding a position that is analogous to the position of executive vice-president and chief financial officer of a bank similar to the Bank, and as prescribed by California and federal banking laws and regulations,
and that failure to conform to such standards is cause for termination of this Agreement by Company. Termination for cause pursuant to this section 6(d) shall include, but is not limited to, the following: 
  
 (i) Any act of material dishonesty; 
  
 (ii) Any material breach of this Agreement;

  
 (iii) Any breach of a fiduciary duty
(involving personal profit); 
  
 (iv) Any
habitual neglect of, or habitual negligence in carrying out, those duties contemplated under Sections 1 and 2 of this Agreement; 
  

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 (v) Any willful violation of any law, rule or regulation, which, by virtue of bank
regulatory restrictions imposed as a result thereof, would have a material adverse effect on the business or financial prospects of Company or the Bank; 
  
 (vi) Any conviction of any felony which may be reasonably interpreted to be harmful to Company’s or the Bank’s
reputation; 
  
 (vii) Any failure by
Employee to qualify at any time during the Employment Term for any fidelity bond as described in section 8 of this Agreement; 
  
 (viii) The requirement to comply with any final cease-and-desist order or written agreement with any applicable state or federal
bank regulatory authority which requests or orders Employee’s dismissal or limits Employee’s employment duties; 
  
 (ix) Any conduct which constitutes unfair competition with Company or any parent company, shareholder, subsidiary, division or
affiliate; or 
  
 (x) The inducement of
any client, customer, agent or employee to break any contract or terminate the agency or employment relationship with Company or any parent company, shareholder, subsidiary, division or affiliate. 
  
 Termination for cause by Company shall not constitute a waiver of any
remedies that may otherwise be available to Company under law, equity, or this Agreement. 
  
 In the event that Employee is terminated pursuant to this section 6(d), Employee shall be entitled to receive Vested Benefits, as defined hereinabove, and COBRA rights, as defined hereinabove. 
  
 (e) Early Termination by Employee.
Employee (for other than Good Reason as defined in section 6(a)) may terminate this Agreement upon 90 days’ written notice to Company. Employee shall continue to perform his duties under this Agreement until the end of such 90 day period,
provided however, that Company may, at its option, immediately terminate this Agreement, upon notice to Employee, and in the event that Company so elects to terminate this Agreement, Company shall continue to pay Employee his normal compensation
through the end of such 90 day period. Thereafter, Employee shall not be entitled to receive compensation or other benefits under this Agreement, provided, however, that Employee shall be entitled to receive Vested Benefits, as defined hereinabove,
and COBRA rights, as defined hereinabove. 
  
 (f) Early Termination Upon Disability. This Agreement and all benefits hereunder shall terminate if Employee is not able, as a result of an illness or other physical or mental disability, to perform the essential
functions of his position as required by this Agreement for a period of ninety (90) consecutive days or in excess of one hundred eighty (180) days in any one (1) year period, notwithstanding reasonable accommodation by Company to Employee’s
known physical or mental disability, solely in accordance with, and to the extent required by, the Americans with Disabilities Act, 29 U.S.C. Sections 12101-213 or any other state or local law governing the employment of disabled persons (the
“ADA”) provided such accommodation would not impose an undue hardship on the operation of Company’s business or a direct threat to 

  

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the Employee or others pursuant to the ADA. In the event of termination of this Agreement by Company pursuant to this section 6(f): 
  
 (i) Employee shall be entitled to disability benefits
provided by the disability insurance coverage identified in section 5(e) of this Agreement; and 
  
 (ii) All other benefits provided for under this Agreement shall cease as of the date of termination (except insofar as the group
insurance benefits provided under section 5(e) may be continued or convertible by Employee as provided under COBRA or other laws applicable at the time of termination). 
  
 (iii) Employee shall also be entitled to receive Vested Benefits, as defined hereinabove. 

 
 For purposes of this Agreement, physical or mental disability shall mean
the inability of Employee to fully perform under this Agreement for a continuous period of ninety (90) days, as determined in the case of physical disability by a physician, or in the case of mental disability by a psychiatrist, both of whom must be
licensed to practice medicine in California and are to be selected with the approval of Company and Employee. Upon demand by Company, Employee shall act promptly to select such physician or psychiatrist jointly with Company and shall consent to
undergo any reasonable examination or test. Recurrent disabilities will be treated as separate disabilities if they result from unrelated causes or if they result from the same or related cause or causes and are separated by a continuous period of
at least twelve (12) full months during which Employee was able to perform his duties hereunder equal to at least eighty percent (80%) of his capacity prior to disability. Otherwise, recurrent disabilities will be treated as a continuation of
previous disabilities for the purpose of determining the limitations established in this Section. 
  
 (g) Death During Employment. This Agreement and all benefits hereunder shall terminate immediately upon the death of
Employee, except that Employee’s heirs or estate shall also be entitled to receive Vested Benefits, as defined hereinabove, and Employee’s dependants may be entitled to COBRA rights, as defined hereinabove. 
  
 (h) Termination by Company Without Notice. The
Company shall provide ninety (90) days written notice to Employee if the Company intends not to renew this Agreement at the expiration of the Employment Term. If the Company does not provide such notice, the Company shall pay Employee his
then-current Base Salary for a period of three (3) months after the Employment Term payable in conformity with the Company’s normal payroll procedures. 
  
 7. Survival of Obligations. The provisions of Sections 6, 10, 11, 12, 13, 14, 16 and 28 of this Agreement shall survive Employee’s
termination of employment and the termination of this Agreement. Other provisions of this Agreement shall survive any termination of Employee’s employment to the extent necessary to the intended preservation of each Party’s respective
rights and obligations. 
  
 8. Fidelity Bond.
Employee agrees that he will furnish all information and take any other steps necessary to enable Company to obtain or maintain a fidelity bond conditional on the rendering of a true account by Employee of all moneys, goods, or other property which
may 

  

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come into the custody, charge or possession of Employee during the Employment Term. The surety company issuing the bond and the amount of the bond must be
acceptable to Company and satisfy all banking laws and regulations. All premiums on the bond are to be paid by Company or the Bank. If Employee cannot qualify for a fidelity bond at any time during the term of this Agreement, Company shall have the
option to terminate this Agreement immediately, which shall constitute a termination for cause as defined in section 6(d) hereof. 
  
 9. Compliance with Company and Bank Policies. Employee agrees to observe and comply with the rules and regulations of Company and the
Bank respecting the performance of his duties and to carry out and perform orders, directions and policies communicated to him from time to time. Employee agrees to comply with all rules and policies contained in any applicable Employee Handbook
which has been or will be issued by Company and/or the Bank. Should a conflict arise between this Agreement and the Employee Handbook, the terms of this Agreement shall control. 
  
 10. Company and Bank Property. All records, financial statements and similar documents obtained,
reviewed or compiled by Employee in the course of the performance by him of services for Company and/or the Bank, whether or not confidential information or trade secrets, shall be the exclusive property of Company and/or the Bank, as applicable.
Employee agrees to hold as Company’s and the Bank’s property, all memoranda, books, papers, letters, formulas and other data, and all copies thereof and therefrom, in any way relating to Company’s or the Bank’s business and
affairs, whether made by him or otherwise coming into his possession, and on termination of his employment, or on demand of Company, at any time to deliver the same to Company. Employee shall have no rights in such documents upon any termination of
his employment. 
  
 11. Proprietary
Information. 
  
 (a) Employee
recognizes and acknowledges that Company and its parent companies, shareholders, subsidiaries, divisions and affiliates possess trade secrets and other confidential and/or proprietary information concerning their respective business affairs and
methods of operation which constitute valuable, confidential, and unique assets of the business of Company and its parent companies, shareholders, subsidiaries, divisions and affiliates (“Proprietary Information”), which Company and its
parent companies, shareholders, subsidiaries, divisions and affiliates have developed through a substantial expenditure of time and money and which are and will continue to be utilized in the business of Company and its parent companies,
shareholders, subsidiaries, divisions and affiliates and which are not generally known in the trade. As used herein, Propriety Information includes the following: 
  
 (i) Customer lists, including information regarding the identity of clients and client contacts,
client accounts, the business needs and preferences of clients, and information regarding business and contractual arrangements with clients. As used herein, “Customer List” is not limited to physical writings or compilations, and includes
information which is contained in or reproduced from the memory of any employee. 
  
 (ii) Business plans, objectives and strategies, and marketing plans and information; 
  

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 (iii) Financial information, sales information and pricing information, including
information regarding vendors, suppliers and others doing business with Company, or any parent company, shareholder, subsidiary, division or affiliate thereof; 
  

(iv) Personal identities and information regarding skills and compensation of the personnel of Company, or any parent company,
shareholder, subsidiary, division or affiliate thereof; 
  
 (v) Company or Bank manuals and handbooks, computer programs and data; 
  
 (vi) Any other confidential information which gives Company, or any parent company, shareholder, subsidiary, division or affiliate
thereof, an opportunity to claim a competitive advantage or has economic value. 
  
 (b) During his employment with Company, Employee will not use, copy, transmit or otherwise disclose Company’s or the
Bank’s Proprietary Information for any purpose other than for the benefit of Company or the Bank, and Employee will make all reasonable efforts to protect the confidential nature of such information. Employee will not disclose Company’s or
the Bank’s Proprietary Information to anyone not entitled to such disclosure without the advance written permission of the Chief Financial Officer of Company. 
  
 (c) Upon termination of his employment, Employee will immediately deliver to Company all of
Company’s or the Bank’s Proprietary Information. Employee will not retain any copies of Company’s or the Bank’s Proprietary Information after termination of his employment without the express written consent of the Chief
Financial Officer of Company. 
  
 (d)
After termination of his employment, Employee will not use Company’s or the Bank’s Proprietary Information for any purpose, or disclose or communicate the same to any person, firm or corporation for any purpose. 
  
 (e) In the event Employee should receive, during the
Employment Term, or thereafter, any subpoena, search warrant or other court process requiring Employee to produce any documents containing Proprietary Information as defined herein, Employee shall immediately provide a copy of such request to
Company. 
  
 (f) Notwithstanding anything
in this Agreement to the contrary, information (i) already in the public domain; (ii) independently developed by the Employee; (iii) obtained from a source not subject to a confidentiality obligation to Company, the Bank or a third party; or (iv)
that becomes public knowledge (other than by acts of the Employee in violation of this Agreement), shall not be deemed to be Proprietary Information as described in this section 11. 
  
 12. Non-Solicitation. During his employment with Company, and for a period of one year immediately following
his employment with Company, Employee shall not, directly or indirectly, solicit or attempt to solicit any employee of Company, or of any parent company, shareholder, subsidiary, division or affiliate thereof, to terminate his or her employment with
said company, or to work for any other business, person or company. 
  

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 13. Equitable Relief. Employee acknowledges that any breach or threatened breach by
him of the provisions of Sections 10, 11 or 12 of this Agreement will result in immediate and irreparable harm to Company, for which there will be no adequate remedy at law, and that Company will be entitled (subject to section 28) to equitable
relief to restrain Employee from violating the terms of these sections, or to compel Employee to cease and desist all unauthorized use and disclosure of the Confidential Information, without posting bond or other security. Nothing in this section
shall be construed as prohibiting Company from pursuing any other remedies available to it for such breach or threatened breach, including recovery of damages from Employee. 
  
 14. Property of Others. Employee represents that his performance under this Agreement does not
and will not breach any agreement to keep in confidence confidential information or trade secrets, if any, acquired by Employee in confidence prior to this Agreement. There are no agreements, written or oral, conveying rights in any research
conducted by Employee. Employee represents, as part of the consideration for entering into this Agreement, that he has not brought and will not bring to Company or the Bank or use in the performance of his responsibilities at Company or the Bank any
equipment, supplies, facility or trade secret information of any current or former employer or organization with which he provided services which are not generally available to the public, unless he has obtained written authorization for their
possession and use. 
  
 15. Non-Competition by
Employee. Employee shall not, during his employment with Company, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, shareholder, corporate officer, director, or in any other individual or
representative capacity, work for, or engage or participate in the business of, any competing company, bank, bank holding company or financial holding company or financial institution or financial services business without the prior written consent
of the Board. 
  
 16. Indemnification.
Company shall indemnify, defend and hold harmless Employee, to the maximum extent permitted under the Bylaws of Company and governing laws and regulations, against expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Employee in connection with any threatened or pending action, suit or proceeding to which Employee is made a party by reason of is position as an officer or agent of Company or by reason of his service
at the request of Company, if Employee acted in good faith and in a manner reasonably believed to be in best interests of Company. If available at rates determined by Company, in its sole discretion, to be reasonable, Company shall endeavor to apply
for and obtain Directors’ and Officers’ Liability Insurance to indemnify and insure Company and Employee from such liability or loss. Employee shall indemnify Company from and against all costs, expenses (including attorney’s fees),
liability and damages arising out of any act of misconduct, other than actions taken in good faith and in a manner reasonably believed to be in the best interests of Company, by Employee during the term of this Agreement. Nothing in this
Indemnification section shall interfere with or restrict the right of Employee to statutory indemnification under the laws of the State of California including but not limited to those rights provided in California Labor Code section 2802 and
California Corporations Code section 317, and any amendments thereto. 
  

 - 12 - 

 Notwithstanding the foregoing, in any administrative proceeding or civil action initiated by any federal
banking agency, Company may only reimburse, indemnify or hold harmless Employee if Company is in compliance with any applicable statute, rule, regulation or policy of the Federal Deposit Insurance Corporation, Office of the Comptroller of the
Currency, Board of Governors of the Federal Reserve System, or the California Department of Financial Institutions regarding permissible indemnification payments. 
  
 17. Breach. Breach by either Party of any of its respective obligations under Sections 1, 2, 5, 7, 9,
10,11, 12, 14 or 15 of this Agreement shall be deemed a material breach of that Party’s obligations hereunder, provided, however, that no breach of a monetary obligation shall be deemed a material breach until the Party allegedly in breach has
failed to cure said breach within seven (7) business days after the aggrieved Party delivers written notice of such breach to the other Party. 
  
 18. Survival of Agreement in Event of Merger. This Agreement shall not be terminated by any merger in which Company is not the
surviving or resulting corporation, or on any transfer of all or substantially all of Company’s assets. In the event of any such merger or transfer of assets, the provisions of this Agreement shall be binding on and inure to the benefit of the
surviving business entity or the business entity to which such assets shall be transferred. This section shall not serve to diminish Employee’s rights pursuant to sections 6(a) and 6(b) above. 
  
 19. Tax Consequences. Employee is urged to review with
his own tax advisors the federal and state tax consequences of the transactions contemplated by this Agreement. Employee is relying solely on such advisors (if any) and not on any statements or representations of Company or any of its agents.

  
 20. Withholding. All payments provided
for hereunder shall be reduced by payroll taxes and withholding required by any federal, state or local law, and any additional withholding to which Employee has agreed in writing. 
  
 21. Notices. Any notices to be given hereunder by either Party to the other may be effected in writing either
by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Notices to Company shall be given to Company at its then current principal office, c/o Chairman of the Board of Directors. Notices to Employee
shall be sent to Employee’s last known personal residence. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) calendar days after mailing. 
  
 22. Entire Agreement. This Agreement supersedes any and
all other agreements, either oral or in writing, between the Parties (or between Employee and California Community Bancshares, Inc., or any parent company, shareholder, subsidiary, division or affiliate thereof) with respect to the employment of
Employee (excluding only stock option agreements) and contains all of the covenants and agreements between the Parties with respect to such employment. Each Party to this Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any Party, or anyone acting on behalf of any Party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid and binding.

  

 - 13 - 

 23. Amendment. This Agreement may be changed or modified, or any provisions hereof waived,
only by a writing signed by the Party against whom enforcement of any waiver, change or modification is sought. 
  
 24. Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or non-enforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or
illegal or unenforceable term or condition had never been contained herein. 
  
 25. Choice of Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except to the extent preempted by the laws of the United
States. Any action or proceeding brought upon, or arising out of, this Agreement or its termination shall be brought in a forum located within the State of California, and Company and Employee hereby agree to be subject to service of process in
California. 
  
 26. Waiver. The
Parties hereto shall not be deemed to have waived any of their respective rights under this Agreement unless the waiver is in writing and signed by such waiving Party. No delay in exercising any rights shall be a waiver nor shall a waiver on one
occasion operate as a waiver of such right on a future occasion. 
  
 27. Interpretation. This Agreement shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against any of the Parties hereto. Captions and section headings used herein are for
convenience and ready reference only and shall not be used in the construction or interpretation thereof. 
  
 28. Arbitration. In the event of any dispute, claim or controversy between the Employee and Company (or any of Company’s parent
companies, shareholders, subsidiaries, divisions and/or affiliates and/or any of its or their respective officers, partners, directors, members, managers, employees, agents or employees) arising out of this Agreement or the Employee’s
employment with Company, Employee and Company agree to submit such dispute, claim or controversy to final and binding arbitration before the American Arbitration Association (“AAA”) in accordance with the AAA National Rules for the
Resolution of Employment Disputes. The claims governed by this arbitration provision include, but are not limited to, claims for breach of contract, civil torts and employment discrimination such as violation of the Fair Employment and Housing Act,
Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act and other employment laws. 
  
 (a) The arbitration shall be conducted by a single arbitrator selected either by mutual agreement of the Employee and Company or,
if they cannot agree, from an odd-numbered list of experienced employment law arbitrators provided by the American Arbitration Association. Each Party shall strike one arbitrator from the list alternately until only one arbitrator remains.

  
 (b) Each Party shall have the right to
conduct reasonable discovery, as determined by the arbitrator. 
  

 - 14 - 

 (c) The arbitrator shall have all powers conferred by law and a judgment may be
entered on the award by a court of law having jurisdiction. The arbitrator shall render a written arbitration award that contains the essential findings and conclusions on which the award is based. The award and judgment shall be binding and final
on both Parties. 
  
 (d) Company will pay
the arbitrator’s fees and costs as well as any AAA administrative fees. The Parties shall each pay the fees of their own attorneys and the expenses of their own witnesses. 
  
 (e) This agreement to arbitrate shall continue during Employment Term and thereafter regarding any
employment-related disputes. 
  
 (f) The
Employee and Company understand that by signing this Agreement, they give up their right to a civil trial and their right to a trial by jury. 
  
 IN WITNESS WHEREOF, this Agreement is entered into as of the Effective Date. 
  

									
	 “COMPANY”
 FIRST
CALIFORNIA BANCSHARES
	 	 	 	 “EMPLOYEE”
 JAMES A.
SUNDQUIST

			
	 /s/    RENEE
ARTERY        

	 	 	 	 /s/    JAMES A.
SUNDQUIST        

	 By:
	 	Renee Artery	 	 	 	JAMES A. SUNDQUIST
	 Title:
	 	EVP - HR DIRECTOR	 	 	 	 	 	 

  

 - 15 - 

 EXHIBIT A  
  

RELEASE AGREEMENT 
  
 This Release Agreement (“Release”) was given to me, JAMES A. SUNDQUIST (“Employee”), this
             day of
                            , 200  , by FIRST CALIFORNIA BANCSHARES, a California
corporation (the “Company”). At such time as this Release becomes effective and enforceable (i.e., the revocation period set forth below has expired), and assuming such Employee is otherwise eligible for payments under the terms of that
certain Employment Agreement between Employee and Company dated October     , 2003 (the “Agreement”), Company agrees to pay Employee, pursuant to the terms of the Agreement, a single sum severance payment in the
amount of $                     (less payroll taxes and withholding required by any federal, state or local law, any additional withholding to
which Employee has agreed, and any outstanding obligations owed by the Employee to Company). Company further agrees to pay to Employee Employee’s pro rated incentive bonus, if any, to which Employee is entitled pursuant to the terms of
Company’s Executive Incentive Plan (less payroll taxes and withholding required by any federal, state or local law and any additional withholding to which Employee has agreed), provided that Company shall be obligated to pay Employee’s
incentive bonus under Company’s Executive Incentive Compensation Plan at the same time as it makes payment of any other incentive bonuses paid to other officers of Company under such plan and shall not be obligated to make such payment to
Employee at any earlier time. 
  
 Employee is also entitled to
receive (i) those benefits, if any, that have vested by operation of state or federal law or under any written term of a plan (“Vested Benefits”), and (ii) health care coverage continuation rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended. 
  
 In consideration of
the receipt of the promise to pay such amount, Employee hereby agrees, for himself, his heirs, executors, administrators, successors and assigns (hereinafter referred to as the “Releasors”), to fully release and discharge Company and each
of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective officers, partners, directors, members, managers, employees and agents, and each of their respective predecessors, successors, heirs and
assigns (hereinafter referred to as the “Releasees”) from any and all claims, suits, causes of action, debts, obligations, costs, losses, liabilities, damages and demands under any federal, state or local law or laws, or contract, tort or
common law, whether or not known, suspected or claimed, which the Releasors have, or hereafter may have, against the Releasees arising out of or in any way related to Employee’s employment (or other contractual relationship) with Company and/or
the termination of that relationship. The claims released herein include claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Americans with Disabilities
Act, the U.S. Pregnancy Discrimination Act, the U.S. Family and Medical Leave Act, the U.S. Fair Labor Standards Act, the U.S. Equal Pay Act, The Workers Adjustment and Notification Act, the California Fair Employment and Housing Act, and the
California Labor Code. Notwithstanding the foregoing, this Agreement does not waive rights or claims under the Age Discrimination in Employment Act that may arise after the date this Release is executed. 
  

 - 16 - 

 It is understood and agreed that this Release extends to all such claims and/or potential claims, and
that Employee, on behalf of the Releasors, hereby expressly waives all rights with respect to all such claims under California Civil Code section 1542, which provides as follows: 
  
 A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his settlement with the debtor. 
  
 The monies to be paid to the Employee in this Release are in addition to any sums to which he would be entitled without signing this Release. 

 
 Employee acknowledges that he has read and does understand the provisions
of this Release. Employee acknowledges that he affixes his signature hereto voluntarily and without coercion, and that no promise or inducement has been made other than those set out in this Release and that he executes this Release without reliance
on any representation by any Releasee. 
  
 Employee understands
that this Release involves the relinquishment of his legal rights, and that he has the right to, and has been given the opportunity to, consult with an attorney of his choice. Employee acknowledges that he has been (and hereby is) advised by Company
that he should consult with an attorney prior to executing this Release. 
  
 This document does not constitute, and shall not be admissible as evidence of, an admission by any Releasee as to any fact or matter. 
  
 In case any part of this Release is later deemed to be invalid, illegal or otherwise unenforceable, Employee agrees that the
legality and enforceability of the remaining provisions of this Release will not be affected in any way. 
  
 Employee acknowledges that he has been given a period of twenty-one (21) days from receipt of this Release within which to consider this Release and
decide whether or not to execute this Release. If Employee executes this Release at any time prior to the end of the 21 day period, such early execution was a knowing and voluntary waiver of Employee’s right to consider this Release for at
least 21 days, and was due to his belief that he had ample time in which to consider this Release. 
  
 Employee may, within seven (7) days of his execution and delivery of this Release, revoke this Release by a written document received by Company on or
before the end of the seven (7) day period. The Release will not be effective until said revocation period has expired. No payments will be made hereunder if the Employee revokes this Release. 
  

					
	 Dated:
	 	  

	 	 	 	 	 	  

	 	 	 	 	 	 	 	 	JAMES A. SUNDQUIST

  

 - 17 -Employment Agreement between Robert Muttera and Placer Sierra Bank

 EXHIBIT 10.16 
  
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT (the “Agreement”) is made and entered into as of January 1, 2003 (the “Effective Date”) by and between PLACER
SIERRA BANK, a California banking corporation (“Bank”) and ROBERT H. MUTTERA (“Employee”) (collectively sometimes referred to as the “Parties”): 
  
 WHEREAS, the Parties desire to enter into an agreement for the purpose of retaining Employee’s services as
Executive Vice-President and Chief Credit Officer of Bank; and 
  
 WHEREAS, the Parties intend this Agreement to supersede any and all previous employment agreements between the Employee and Bank (and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, including
California Community Bancshares, Inc.), if any; 
  
 NOW,
THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS: 
  
 1.
Employment and Duties. Employee is hereby employed by Bank as Executive Vice-President and Chief Credit Officer of Bank. Employee shall be responsible for performing such duties as are customarily and ordinarily performed by the
executive vice-president and chief credit officer of a bank. Employee will also perform such duties as he may, from time to time, be called upon to assist companies affiliated with Bank, and such other attendant duties as he may, from time to time,
be reasonably requested to perform by the Board of Directors of Bank (the “Board”). 
  
 2. Extent of Services. 
  
 (a) Exclusive Employment. Employee shall devote his full time, ability and attention to the business of Bank and its
parent companies, subsidiaries, divisions and affiliates, during the Employment Term, and shall neither directly nor indirectly render any services of a business, commercial or professional nature to any other person, firm, corporation or
organization for compensation without the prior written consent of the Board. 
  
 (b) Employee Investment Activities. Nothing contained herein shall be construed as preventing Employee from (i) investing his personal assets in businesses which do not compete with Bank in such
form or manner as will not require any services on the part of Employee in the operation or the affairs of the companies in which such investments are made and in which his participation is solely that of an investor, (ii) purchasing securities in
any corporation whose securities are regularly traded provided that such purchase shall not result in Employee collectively owning beneficially at any time five percent or more of the equity securities of any corporation engaged in a business
competitive to that of Bank, and (iii) participating in conferences, preparing or publishing papers or books or teaching so long as Bank approves of such activities prior to Employee’s engaging in them. 
  
 3. Term of Employment. Subject to prior termination of this
Agreement as hereinafter provided in section 6, Bank hereby employs Employee, and Employee hereby accepts 

  

 
employment with Bank, for a period of three (3) years beginning on the Effective Date and ending on the third anniversary of the Effective Date (the
“Employment Term”). 
  
 4. Termination of
Prior Employment Agreements. Bank and Employee agree that as of the Effective Date, all prior employment agreements between Employee and Bank (and/or any parent company, shareholder, subsidiary, division or affiliate thereof, including
California Community Bancshares, Inc.) including but not limited to the February 29, 2000 Employment Agreement between Employee and Sacramento Commercial Bank, are hereby canceled, terminated, rescinded and superceded. It is expressly agreed by the
Parties hereto that California Community Bancshares, Inc. is a third party beneficiary of this Agreement, and is released from any obligations under any prior employment agreements with Employee. 
  
 5. Compensation and Benefits. In consideration of
Employee’s services to Bank during the Employment Term, Bank agrees to compensate Employee, subject to such limitations as may exist under any federal or state banking law or regulation, as follows: 
  
 (a) Base Compensation. Bank shall pay
or cause to be paid to Employee a base compensation of $ 180,000 per year for the first twelve (12) months of the Employment Term (hereinafter the “Base Salary”), less payroll taxes and withholding required by federal, state or local law
and any additional withholding to which Employee agrees in writing. Said Base Salary shall be payable in semi-monthly installments in accordance with Bank’s normal payroll procedures. The Board shall review the Base Salary not less than sixty
(60) days prior to the first and each subsequent anniversary date of the Effective Date and shall determine, in its sole, absolute and unreviewable discretion, whether to increase the Base Salary for the subsequent twelve (12) months of the
Employment Term. Any increase in Base Salary so determined by the Board shall become effective as of such anniversary date. The Base Salary shall be prorated for any partial year in which this Agreement is in effect. 
  
 (b) Executive Incentive Bonus. In
addition to the Base Salary, Employee shall be eligible to participate in an Executive Incentive Plan in accordance with the terms and conditions of said plan, as the Bank, in its sole and absolute discretion, may establish from time to time which
shall be no less favorable than the Executive Incentive Plans for Bank’s other executives. 
  
 (c) Deferred Compensation. In the event the Bank should establish a deferred compensation plan, Employee shall be
eligible to participate in said plan, in accordance with the terms and conditions of said plan, as the Bank, in its sole and absolute discretion, may establish from time to time. 
  
 (d) General Expenses. Bank shall, upon submission and approval of written statements
and bills in accordance with the then regular procedures of Bank, reimburse Employee for any and all reasonable necessary, customary and usual expenses incurred by him while traveling for or on behalf of Bank, and any and all other necessary,
customary or usual expenses (including entertainment) incurred by Employee for or on behalf of Bank in the normal course of business, as determined to be appropriate by Bank. 
  

 - 2 - 

 (e) Health, Life and Disability Insurance. Bank shall provide for
Employee’s participation, at Bank’s expense, in group medical, dental, vision, life and disability insurance benefits equivalent to the maximum benefits available under the group insurance programs maintained by Bank for its employees.
Employee shall have the right, in Employee’s discretion, to designate the beneficiary or beneficiaries of any such insurance. Bank reserves the right to modify and amend such benefits from time to time. As provided under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) respecting continuation of any insurance coverage, Employee shall, upon a loss of any such coverage for himself under Bank’s health, dental, and/or vision plans (if any) resulting
from (1) termination of Employee’s employment (for any reason other than for gross misconduct) or (2) a reduction in his hours, be entitled to exercise his COBRA rights. Employee shall pay all premiums for any such continuation coverage(s)
elected by Employee. In addition, Employee’s current stand alone disability policy shall remain in effect during the term of the Agreement and Bank shall continue to pay such contributions as necessary to maintain this policy in the form of
Exhibit “B” hereto. 
  
 (f)
Automobile Allowance. During the Employment Term, Employee shall be entitled to an automobile allowance in the amount of $900 per month (less payroll taxes and withholding required by federal, state or local law). Except for this
automobile allowance, Bank shall not be obligated to pay any other expenditure with respect to the ownership or operation of Employee’s automobile, and Employee will be responsible for all out-of-pocket automobile expenses, including, but not
limited to, registration, insurance, repairs and maintenance. However, Employee shall also have use of a gas credit card for gasoline and other minor automobile expenditures. Employee shall procure and maintain an automobile liability insurance
policy on the automobile, with coverage including Employee for at least $100,000 for bodily injury or death to any one person, $300,000 for bodily injury or death in any one accident, and $50,000 for property damage in any one accident. The Bank
shall be named as an additional insured and Employee shall provide Bank with copies of policies evidencing insurance and Bank’s inclusion as an additional insured. 
  
 (g) Vacation. Employee shall be entitled to four weeks (20 days) paid vacation leave
per year, which shall accrue on a daily basis. Such vacation leave shall be taken at such time or times as are mutually agreed upon by Employee and the Board and in accordance with Bank’s vacation leave policy, provided, that at least two (2)
weeks of such vacation shall be taken consecutively. Employee acknowledges that the requirement of two (2) consecutive weeks of vacation is required by sound banking practice. For each calendar year, the Board shall decide, in its discretion, either
(1) to pay Employee for any unused vacation time for such calendar year or (2) to carry over any unused vacation time for such calendar year to the next calendar year, provided, however, that Employee shall not accrue additional vacation time at any
time that the Employee has accrued and unused vacation time of seven (7) weeks. 
  
 (h) Other Benefits. Employee shall be entitled to participate during the Employment Term in all employee benefit, welfare
and other plans, practices, policies and programs generally applicable to similarly situated employees of Bank as are in effect from time to time, in accordance with the applicable terms and conditions thereof. Bank reserves the right to modify and
amend such benefits, plans, practices, policies and programs from time to time. 
  

 - 3 - 

 6. Termination of Agreement. This Agreement may be terminated with or without cause during
the Employment Term in accordance with this section 6. 
  
 (a) Termination for Good Reason. Employee may terminate this Agreement for “Good Reason”. “Good Reason” shall mean the occurrence (without Employee’s express written consent) of any one of the
following acts by Bank or its successor: 
  
 (i) The assignment to Employee of duties or title inconsistent with Employee’s status as Executive Vice-President and Chief Credit Officer or a substantial adverse alteration in the nature or stature of Employee’s
responsibilities from those described herein, which is not cured by Bank within seven (7) business days after Employee delivers written notice to Bank of such assignment or alteration; 
  
 (ii) A reduction by Bank of Employee’s then current Base Salary; 
  
 (iii) Any material breach by Bank of any provisions
of this Agreement, which breach is not cured by Bank within seven (7) business days after Employee delivers written notice of such breach to Bank. 
  
 In the event that Employee terminates this Agreement for Good Reason, Employee shall be eligible to receive a single sum severance payment equal to twelve
(12) months of his then current Base Salary, as defined in section 5 (a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and withholding required by any federal, state or local law, any
additional withholding to which Employee has agreed, and any outstanding obligations owed by the Employee to Bank) and any and all stock options previously granted to Employee under any stock option plan of Bank or any affiliate of Bank and held by
Employee at the date of termination shall become fully vested and shall be exercisable for a period of two (2) years after the date of termination. No portion of such severance pay shall be payable, nor shall stock options become fully vested, until
eight days after delivery to Bank of a duly executed release in the form of Exhibit “A” hereto (“Release”). 
  
 Such severance pay shall constitute liquidated damages in lieu of any and all claims by Employee against Bank and each of its parent companies,
shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and agents, arising out of this Agreement or out of the employment relationship or termination of the employment relationship
between Employee and Bank, and shall be in full and complete satisfaction of any and all rights which Employee may enjoy hereunder, and is expressly conditioned upon receipt by Bank of an executed, unconditional Release from Employee in the form of
Exhibit “A”. 
  
 In the event that Employee terminates
this Agreement for Good Reason, Employee also shall be entitled to receive (i) those benefits, if any, that have vested by operation of state or federal law or under any written term of a plan (“Vested Benefits”), and (ii) health care
coverage continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA Rights”). 
  

 - 4 - 

 (b) Termination Upon Change in Control. “Change in Control” shall
mean the occurrence of any of the following events: 
  
 (i) The consummation of a plan of dissolution or liquidation of Bank; 
  
 (ii) The consummation of a plan of reorganization, merger or consolidation involving Bank, except for a reorganization, merger or
consolidation where (A) the shareholders of Bank immediately prior to such reorganization, merger or consolidation own directly or indirectly more than 50% of the combined voting power of the outstanding voting securities of the corporation
resulting from such reorganization, merger or consolidation (the “Surviving Corporation”) and the individuals who were members of the Board immediately prior to the execution of the agreement providing for such reorganization, merger or
consolidation constitute at least 50% of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, or (B) Bank is
reorganized, merged or consolidated with a corporation in which any shareholder owning at least 50% of the combined voting power of the outstanding voting securities of Bank immediately prior to such reorganization, merger or consolidation, owns at
least 50% of the combined voting power of the outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation; 
  
 (iii) The sale of all or substantially all of the assets of Bank to another person or entity; 
  
 (iv) The acquisition of beneficial ownership of stock
representing more than fifty percent (50%) of the voting power of Bank then outstanding by another person or entity. 
  
 In the event of a Change in Control and, during the twelve month period following such Change in Control, Employee terminates employment with Bank
(pursuant to section 6(e) below) following a reduction in the Employee’s duties or title, Employee shall be eligible to receive a single sum severance payment equal to twelve (12) months of his then current Base Salary, as defined in section
5(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and withholding required by any federal, state or local law, any additional withholding to which Employee has agreed, and any outstanding
obligations owed by the Employee to Bank) and any and all stock options previously granted to Employee under any stock option plan of Bank or any affiliate of Bank and held by Employee at the date of termination shall become fully vested and shall
be exercisable for a period of two (2) years after the date of termination. No portion of such severance pay shall be payable, nor shall stock options become fully vested, until eight days after delivery to Bank of a duly executed Release in the
form of Exhibit “A” hereto. 
  
 Such severance pay shall
constitute liquidated damages in lieu of any and all claims by Employee against Bank and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and
agents, arising out of this Agreement or out of the employment relationship or termination of the employment relationship between Employee and Bank, and shall be in full and complete satisfaction of any and all rights which Employee may enjoy
hereunder, and is expressly conditioned upon receipt by Bank of an executed, unconditional Release from Employee in the form of Exhibit “A”. 
  

 - 5 - 

 Notwithstanding anything to the contrary provided herein, in the event the amounts payable to Employee in
the event of a Change in Control would, if they included such termination payments and stock option vesting accelerations to be made pursuant to this section 6(b), constitute Excess Parachute Payments for purposes of Sections 280G(b) and 4999 of the
Internal Revenue Code of 1986, as amended, (“IRC”) or any successor statute) (after application of IRC section 280G(b)(4)), the amount payable under this section 6(b) shall be reduced by the amount necessary to cause Employee to receive no
Excess Parachute Payments. 
  
 In the event that Employee is
terminated pursuant to this section 6(b), Employee shall be entitled to receive Vested Benefits, as defined hereinabove, and COBRA rights, as defined hereinabove. 
  
 (c) Early Termination by Bank Without Cause. This Agreement and Employee’s employment may
be terminated by Bank without cause, for any reason whatsoever or for no reason at all, in the sole, absolute and unreviewable discretion of Bank, upon written notice by Bank to Employee. 
  
 In the event that Employee is terminated by Bank without cause, Employee shall be eligible to receive a single sum severance
payment equal to twelve (12) months of his then current Base Salary, as defined in section 5(a), plus any incentive bonus prorated, if necessary, for a partial year of employment (less payroll taxes and withholding required by any federal, state or
local law, any additional withholding to which Employee has agreed, and any outstanding obligations owed by the Employee to Bank) and any and all stock options previously granted to Employee under any stock option plan of Bank or any affiliate of
Bank and held by Employee at the date of termination shall become fully vested and shall be exercisable for a period of two (2) years after the date of termination. No portion of such severance pay shall be payable, nor shall stock options become
fully vested, until eight days after delivery to Bank of a duly executed Release in the form of Exhibit “A” hereto. 
  
 Such severance pay shall constitute liquidated damages in lieu of any and all claims by Employee against Bank and each of its parent companies,
shareholders, subsidiaries, divisions and affiliates, and each of their respective directors, partners, officers, employees and agents, arising out of this Agreement or out of the employment relationship or termination of the employment relationship
between Employee and Bank, and shall be in full and complete satisfaction of any and all rights which Employee may enjoy hereunder, and is expressly conditioned upon receipt by Bank of an executed, unconditional Release from Employee in the form of
Exhibit “A”. 
  
 In the event that Employee is
terminated pursuant to this section 6(c), Employee shall also be entitled to receive Vested Benefits, as defined hereinabove, and COBRA rights, as defined hereinabove. 
  
 (d) Early Termination by Bank for Cause. This Agreement and Employee’s employment may be
terminated for cause by Bank upon written notice to Employee, and Employee shall not be entitled to receive Base Salary or any other compensation or other benefits for any period after termination for cause. Employee understands and agrees that his
satisfactory performance of this Agreement requires conformance with reasonable standards of 

  

 - 6 - 

 
diligence, competence, skill, judgment and efficiency of a person holding a position that is analogous to the position of executive vice-president and chief
credit officer of a bank similar to Bank, and as prescribed by California and federal banking laws and regulations, and that failure to conform to such standards is cause for termination of this Agreement by Bank. Termination for cause pursuant to
this section 6(d) shall include, but is not be limited to, the following: 
  
 (i) Any act of material dishonesty; 
  
 (ii) Any material breach of this Agreement; 
  
 (iii) Any breach of a fiduciary duty (involving personal profit); 
  
 (iv) Any habitual neglect of, or habitual negligence in carrying out, those duties contemplated under
Sections 1 and 2 of this Agreement; 
  
 (v) Any willful violation of any law, rule or regulation, which, by virtue of bank regulatory restrictions imposed as a result thereof, would have a material adverse effect on the business or financial prospects of Bank; 

 
 (vi) Any conviction of any felony which may be
reasonably interpreted to be harmful to the Bank’s reputation; 
  
 (vii) Any failure by Employee to qualify at any time during the Employment Term for any fidelity bond as described in section 8 of this Agreement; 
  
 (viii) The requirement to comply with any final cease-and-desist order or written agreement with any
applicable state or federal bank regulatory authority which requests or orders Employee’s dismissal or limits Employee’s employment duties; 
  
 (ix) Any conduct which constitutes unfair competition with the Bank or any parent company, shareholder, subsidiary, division or
affiliate; or 
  
 (x) The inducement of
any client, customer, agent or employee to break any contract or terminate the agency or employment relationship with the Bank or any parent company, shareholder, subsidiary, division or affiliate. 
  
 Termination for cause by Bank shall not constitute a waiver of any remedies
that may otherwise be available to Bank under law, equity, or this Agreement. 
  
 In the event that Employee is terminated pursuant to this section 6(d), Employee shall be entitled to receive Vested Benefits, as defined hereinabove, and COBRA rights, as defined hereinabove. 
  
 (e) Early Termination by Employee. Employee
(for other than Good Reason as defined in section 6(a)) may terminate this Agreement upon 90 days’ written notice to Bank. Employee shall continue to perform his duties under this Agreement until the end of such 90 day period, provided however,
that Bank may, at its option, immediately terminate this Agreement, upon notice to Employee, and in the event that Bank so elects to terminate this Agreement, Bank 

  

 - 7 - 

 
shall continue to pay Employee his normal compensation through the end of such 90 day period. Thereafter, Employee shall not be entitled to receive
compensation or other benefits under this Agreement, provided, however, that Employee shall be entitled to receive Vested Benefits, as defined hereinabove, and COBRA rights, as defined hereinabove. 
  
 (f) Early Termination Upon Disability. This
Agreement and all benefits hereunder shall terminate if Employee is not able, as a result of an illness or other physical or mental disability, to perform the essential functions of his position as required by this Agreement for a period of ninety
(90) consecutive days or in excess of one hundred eighty (180) days in any one (1) year period, notwithstanding reasonable accommodation by Bank to Employee’s known physical or mental disability, solely in accordance with, and to the extent
required by, the Americans with Disabilities Act, 29 U.S.C. Sections 12101-213 or any other state or local law governing the employment of disabled persons (the “ADA”) provided such accommodation would not impose an undue hardship on the
operation of Bank’s business or a direct threat to the Employee or others pursuant to the ADA. In the event of termination of this Agreement by Bank pursuant to this section 6(f): 
  
 (i) Employee shall be entitled to disability benefits provided by the disability insurance coverage
identified in section 5(e) of this Agreement; and 
  
 (ii) All other benefits provided for under this Agreement shall cease as of the date of termination (except insofar as the group insurance benefits provided under section 5(e) may be continued or convertible by Employee as provided
under COBRA or other laws applicable at the time of termination). 
  
 (iii) Employee shall also be entitled to receive Vested Benefits, as defined hereinabove. 
  
 For purposes of this Agreement, physical or mental disability shall mean the inability of Employee to fully perform under this Agreement for a continuous
period of ninety (90) days, as determined in the case of physical disability by a physician, or in the case of mental disability by a psychiatrist, both of whom must be licensed to practice medicine in California and are to be selected with the
approval of Bank and Employee. Upon demand by Bank, Employee shall act promptly to select such physician or psychiatrist jointly with Bank and shall consent to undergo any reasonable examination or test. Recurrent disabilities will be treated as
separate disabilities if they result from unrelated causes or if they result from the same or related cause or causes and are separated by a continuous period of at least twelve (12) full months during which Employee was able to perform his duties
hereunder equal to at least eighty percent (80%) of his capacity prior to disability. Otherwise, recurrent disabilities will be treated as a continuation of previous disabilities for the purpose of determining the limitations established in this
Section. 
  
 (g) Death During
Employment. This Agreement and all benefits hereunder shall terminate immediately upon the death of Employee, except that Employee’s heirs or estate shall also be entitled to receive Vested Benefits, as defined hereinabove, and
Employee’s dependants may be entitled to COBRA rights, as defined hereinabove. 
  

 - 8 - 

 (h) Termination by Bank Without Notice. The Bank shall provide ninety (90)
days written notice to Employee if the Bank intends not to renew this Agreement at the end of the Employment Term. If the Bank does not provide such notice, the Bank shall pay Employee his then-current Base Salary for a period of three (3) months
after the Employment Term payable in conformity with the Bank’s normal payroll procedures. 
  
 7. Survival of Obligations. The provisions of Sections 6, 10, 11, 12, 13,14,16 and 28 of this Agreement shall survive Employee’s
termination of employment and the termination of this Agreement. Other provisions of this Agreement shall survive any termination of Employee’s employment to the extent necessary to the intended preservation of each Party’s respective
rights and obligations. 
  
 8. Fidelity Bond.
Employee agrees that he will furnish all information and take any other steps necessary to enable Bank to obtain or maintain a fidelity bond conditional on the rendering of a true account by Employee of all moneys, goods, or other property which
may come into the custody, charge or possession of Employee during the Employment Term. The surety company issuing the bond and the amount of the bond must be acceptable to Bank and satisfy all banking laws and regulations. All premiums on the bond
are to be paid by Bank. If Employee cannot qualify for a fidelity bond at any time during the term of this Agreement, Bank shall have the option to terminate this Agreement immediately, which shall constitute a termination for cause as defined in
section 6(d) hereof. 
  
 9. Compliance with Bank
Policies. Employee agrees to observe and comply with the rules and regulations of Bank respecting the performance of his duties and to carry out and perform orders, directions and policies communicated to him from time to time. Employee
agrees to comply with all rules and policies contained in any applicable Employee Handbook which has been or will be issued by Bank. Should a conflict arise between this Agreement and the Employee Handbook, the terms of this Agreement shall control.

  
 10. Bank Property. All records, financial
statements and similar documents obtained, reviewed or compiled by Employee in the course of the performance by him of services for Bank, whether or not confidential information or trade secrets, shall be the exclusive property of Bank. Employee
agrees to hold as Bank’s property, all memoranda, books, papers, letters, formulas and other data, and all copies thereof and therefrom, in any way relating to Bank’s business and affairs, whether made by him or otherwise coming into his
possession, and on termination of his employment, or on demand of Bank, at any time to deliver the same to Bank. Employee shall have no rights in such documents upon any termination of his employment. 
  
 11. Proprietary Information. 
  
 (a) Employee recognizes and acknowledges that Bank
and its parent companies, shareholders, subsidiaries, divisions and affiliates possess trade secrets and other confidential and/or proprietary information concerning their respective business affairs and methods of operation which constitute
valuable, confidential, and unique assets of the business of Bank and its parent companies, shareholders, subsidiaries, divisions and affiliates (“Proprietary Information”), which Bank and its parent companies, shareholders, subsidiaries,
divisions and affiliates have developed through a substantial expenditure of time and money and which are and 

  

 - 9 - 

 
will continue to be utilized in the business of Bank and its parent companies, shareholders, subsidiaries, divisions and affiliates and which are not
generally known in the trade. As used herein, Propriety Information includes the following: 
  
 (i) Customer lists, including information regarding the identity of clients and client contacts, client accounts, the business
needs and preferences of clients, and information regarding business and contractual arrangements with clients. As used herein, “Customer List” is not limited to physical writing or compilations, and includes information which is contained
in or reproduced from the memory of any employee. 
  
 (ii) Business plans, objectives and strategies, and marketing plans and information; 
  
 (iii) Financial information, sales information and pricing information, including information regarding vendors, suppliers and
others doing business with Bank, or any parent company, shareholder, subsidiary, division or affiliate thereof; 
  
 (iv) Personal identities and information regarding skills and compensation of the personnel of Bank, or any parent company,
shareholder, subsidiary, division or affiliate thereof; 
  
 (v) Bank manuals and handbooks, computer programs and data; 
  
 (vi) Any other confidential information which gives Bank, or any parent company, shareholder, subsidiary, division or affiliate
thereof, an opportunity to claim a competitive advantage or has economic value. 
  
 (b) During his employment with Bank, Employee will not use, copy, transmit or otherwise disclose Bank’s Proprietary
Information for any purpose other than for the benefit of Bank, and Employee will make all reasonable efforts to protect the confidential nature of such information. Employee will not disclose Bank’s Proprietary Information to anyone not
entitled to such disclosure without the advance written permission of the Chairman of the Board. 
  
 (c) Upon termination of his employment, Employee will immediately deliver to Bank all of Bank’s Proprietary Information.
Employee will not retain any copies of Bank’s Proprietary Information after termination of his employment without the express written consent of the Chairman of the Board. 
  
 (d) After termination of his employment, Employee will not use Bank’s Proprietary Information
for any purpose, or disclose or communicate the same to any person, firm or corporation for any purpose. 
  
 (e) In the event Employee should receive, during the Employment Term, or thereafter, any subpoena, search warrant or other court
process requiring Employee to produce any documents containing Proprietary Information as defined herein, Employee shall immediately provide a copy of such request to Bank. 
  

 - 10 - 

 (f) Notwithstanding anything in this Agreement to the contrary, information (i)
already in the public domain; (ii) independently developed by the Employee; (iii) obtained from a source not subject to a confidentiality obligation to Bank or a third party; or (iv) that becomes public knowledge (other than by acts of the Employee
in violation of this Agreement), shall not be deemed to be Proprietary Information as described in this section 11. 
  
 12. Non-Solicitation. During his employment with Bank, and for a period of one year immediately following his employment with Bank,
Employee shall not, directly or indirectly, solicit or attempt to solicit any employee of Bank, or of any parent company, shareholder, subsidiary, division or affiliate thereof, to terminate his or her employment with said company, or to work for
any other business, person or company. 
  
 13.
Equitable Relief. Employee acknowledges that any breach or threatened breach by him of the provisions of Sections 10,11 and 12 of this Agreement will result in immediate and irreparable harm to Bank, for which there will be no
adequate remedy at law, and that Bank will be entitled (subject to section 28) to equitable relief to restrain Employee from violating the terms of these sections, or to compel Employee to cease and desist all unauthorized use and disclosure of the
Confidential Information, without posting bond or other security. Nothing in this section shall be construed as prohibiting Bank from pursuing any other remedies available to it for such breach or threatened breach, including recovery of damages
from Employee. 
  
 14. Property of Others.
Employee represents that his performance under this Agreement does not and will not breach any agreement to keep in confidence confidential information or trade secrets, if any, acquired by Employee in confidence prior to this Agreement. There
are no agreements, written or oral, conveying rights in any research conducted by Employee. Employee represents, as part of the consideration for entering into this Agreement, that he has not brought and will not bring to Bank or use in the
performance of his responsibilities at Bank any equipment, supplies, facility or trade secret information of any current or former employer or organization with which he provided services which are not generally available to the public, unless he
has obtained written authorization for their possession and use. 
  
 15. Non-Competition by Employee. Employee shall not, during his employment with Bank, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, shareholder, corporate officer,
director, or in any other individual or representative capacity, work for, or engage or participate in the business of, any competing company, bank, bank holding company or financial holding company or financial institution or financial services
business without the prior written consent of the Board. 
  
 16. Indemnification. Bank shall indemnify, defend and hold harmless Employee, to the maximum extent permitted under the Bylaws of Bank and governing laws and regulations, against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by Employee in connection with any threatened or pending action, suit or proceeding to which Employee is made a party by reason of his position as an officer or agent
of Bank or by reason of his service at the request of Bank, if Employee acted in 

  

 - 11 - 

 
good faith and in a manner reasonably believed to be in the best interests of Bank. If available at rates determined by Bank, in its sole discretion, to be
reasonable, Bank shall endeavor to apply for and obtain Directors’ and Officers’ Liability Insurance to indemnify and insure Bank and Employee from such liability or loss. Employee shall indemnify Bank from and against all costs, expenses
(including attorney’s fees), liability and damages arising out of any act of misconduct, other than actions taken in good faith and in a manner reasonably believed to be in the best interests of Bank, by Employee during the term of this
Agreement. Nothing in this Indemnification section shall interfere with or restrict the right of Employee to statutory indemnification under the laws of the State of California including but not limited to those rights provided in California Labor
Code section 2802 and California Corporations Code section 317, and any amendments thereto. 
  
 Notwithstanding the foregoing, in any administrative proceeding or civil action initiated by any federal banking agency, Bank may only reimburse, indemnify or hold harmless Employee if Bank is in compliance with any
applicable statute, rule, regulation or policy of the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, or the California Department of Financial Institutions
regarding permissible indemnification payments. 
  
 17.
Breach. Breach by either Party of any of its respective obligations under Sections 1, 2, 5, 9, 10, 11, 12, 14, and 15 of this Agreement shall be deemed a material breach of that Party’s obligations hereunder, provided,
however, that no breach of a monetary obligation shall be deemed a material breach until the Party allegedly in breach has failed to cure said breach within seven (7) business days after the aggrieved Party delivers written notice of such breach to
the other Party. 
  
 18. Survival of Agreement
in Event of Merger. This Agreement shall not be terminated by any merger in which Bank is not the surviving or resulting corporation, or on any transfer of all or substantially all of Bank’s assets. In the event of any such merger or
transfer of assets, the provisions of this Agreement shall be binding on and inure to the benefit of the surviving business entity or the business entity to which such assets shall be transferred. This section shall not serve to diminish
Employee’s rights pursuant to section 6 (a) and 6(b) above. 
  
 19. Tax Consequences. Employee is urged to review with his own tax advisors the federal and state tax consequences of the transactions contemplated by this Agreement. Employee is relying solely on such advisors (if any)
and not on any statements or representations of Bank or any of its agents. 
  
 20. Withholding. All payments provided for hereunder shall be reduced by payroll taxes and withholding required by any federal, state or local law, and any additional withholding to which Employee
has agreed in writing. 
  
 21. Notices. Any
notices to be given hereunder by either Party to the other may be effected in writing either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Notices to Bank shall be given to Bank at its then
current principal office, c/o Chairman of the Board of Directors. Notices to Employee shall be sent to Employee’s last known personal residence. Notices delivered personally shall be deemed 

  

 - 12 - 

 
communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) calendar days after mailing. 
  
 22. Entire Agreement. This Agreement supersedes any and all
other agreements, either oral or in writing, between the Parties (or between Employee and California Community Bancshares, Inc., or any parent company, shareholder, subsidiary, division or affiliate thereof) with respect to the employment of
Employee (excluding only stock option agreements) and contains all of the covenants and agreements between the Parties with respect to such employment. Each Party to this Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any Party, or anyone acting on behalf of any Party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid and binding.

  
 23. Amendment. This Agreement may be changed or
modified, or any provisions hereof waived, only by a writing signed by the Party against whom enforcement of any waiver, change or modification is sought. 
  
 24. Severability. In the event that any term or condition contained in this Agreement shall, for any reason, be held by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or non-enforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid
or illegal or unenforceable term or condition had never been contained herein. 
  
 25. Choice of Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except to the extent preempted by the laws of the United
States. Any action or proceeding brought upon, or arising out of, this Agreement or its termination shall be brought in a forum located within the State of California, and Bank and Employee hereby agree to be subject to service of process in
California. 
  
 26. Waiver. The Parties
hereto shall not be deemed to have waived any of their respective rights under this Agreement unless the waiver is in writing and signed by such waiving Party. No delay in exercising any rights shall be a waiver nor shall a waiver on one occasion
operate as a waiver of such right on a future occasion. 
  
 27.
Interpretation. This Agreement shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against any of the Parties hereto. Captions and section headings used herein are for convenience and ready
reference only and shall not be used in the construction or interpretation thereof. 
  
 28. Arbitration. In the event of any dispute, claim or controversy between the Employee and Bank (or any of Bank’s parent companies, shareholders, subsidiaries, divisions and/or affiliates and/or
any of its or their respective officers, partners, directors, members, managers, employees, agents or employees) arising out of this Agreement or the Employee’s employment with Bank, Employee and Bank agree to submit such dispute, claim or
controversy to final and binding arbitration before the American Arbitration Association (“AAA”) in accordance with the AAA National Rules for the Resolution of Employment Disputes. The claims governed by this arbitration provision
include, but are not limited to, claims for breach of 

  

 - 13 - 

 
contract, civil torts and employment discrimination such as violation of the Fair Employment and Housing Act, Title VII of the Civil Rights Act, the Age
Discrimination in Employment Act, the Americans with Disabilities Act and other employment laws. 
  
 (a) The arbitration shall be conducted by a single arbitrator selected either by mutual agreement of the Employee and Bank or, if
they cannot agree, from an odd-numbered list of experienced employment law arbitrators provided by the American Arbitration Association. Each Party shall strike one arbitrator from the list alternately until only one arbitrator remains. 

 
 (b) Each Party shall have the right to conduct
reasonable discovery, as determined by the arbitrator. 
  
 (c) The arbitrator shall have all powers conferred by law and a judgment may be entered on the award by a court of law having jurisdiction. The arbitrator shall render a written arbitration award that contains the essential findings
and conclusions on which the award is based. The award and judgment shall be binding and final on both Parties. 
  
 (d) Bank will pay the arbitrator’s fees and costs as well as any AAA administrative fees. The Parties shall each pay the fees
of their own attorneys and the expenses of their own witnesses. 
  
 (e) This agreement to arbitrate shall continue during Employment Term and thereafter regarding any employment-related disputes. 
  
 (f) The Employee and Bank understand that by signing this Agreement, they give up their right to a
civil trial and their right to a trial by jury. 
  
 IN WITNESS
WHEREOF, this Agreement is entered into as of the Effective Date. 
  

							
	 “BANK”
 PLACER SIERRA
BANK
	 	 	 	 “EMPLOYEE”
 ROBERT H.
MUTTERA

				
	 	 	  

	 	 	 	 /s/    ROBERT H.
MUTTERA        

	By:	 	  
 /s/    Harvey
Ferguson        

	 	 	 	ROBERT H. MUTTERA
	 Title:
	 	CEO President	 	 	 	 

  

 - 14 - 

 EXHIBIT A 
  

RELEASE AGREEMENT 
  
 This Release Agreement (“Release”) was given to me, ROBERT H. MUTTERA (“Employee”), this
                     day of
                    , 200    , by PLACER SIERRA BANK, a California banking corporation (“Bank”). At such
time as this Release becomes effective and enforceable (i.e., the revocation period set forth below has expired), and assuming such Employee is otherwise eligible for payments under the terms of that certain Employment Agreement between Employee and
Bank dated January 1, 2003 (the “Agreement”), Bank agrees to pay Employee, pursuant to the terms of the Agreement, a single sum severance payment (including prorated incentive bonus, if applicable) in the amount of $
                     (less payroll taxes and withholding required by any federal, state or local law, any additional withholding to which
Employee has agreed, and any outstanding obligations owed by the Employee to Bank). 
  
 Employee is also entitled to receive (i) those benefits, if any, that have vested by operation of state or federal law or under any written term of a plan (“Vested Benefits”), and (ii) health care coverage
continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. 
  
 In consideration of the receipt of the promise to pay such amount, Employee hereby agrees, for himself, his heirs, executors, administrators, successors
and assigns (hereinafter referred to as the “Releasors”), to fully release and discharge Bank and each of its parent companies, shareholders, subsidiaries, divisions and affiliates, and each of their respective officers, partners,
directors, members, managers, employees and agents, and each of their respective predecessors, successors, heirs and assigns (hereinafter referred to as the “Releasees”) from any and all claims, suits, causes of action, debts, obligations,
costs, losses, liabilities, damages and demands under any federal, state or local law or laws, or contract, tort or common law, whether or not known, suspected or claimed, which the Releasors have, or hereafter may have, against the Releasees
arising out of or in any way related to Employee’s employment (or other contractual relationship) with Bank and/or the termination of that relationship. The claims released herein include claims under Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the U.S. Pregnancy Discrimination Act, the U.S. Family and Medical Leave Act, the U.S. Fair Labor Standards Act, the U.S.
Equal Pay Act, The Workers Adjustment and Notification Act, the California Fair Employment and Housing Act, and the California Labor Code. Provided, however, that this Agreement does not waive rights or claims under the Age Discrimination in
Employment Act that may arise after the date this Release is executed. 
  

 - 15 - 

 It is understood and agreed that this Release extends to all such claims and/or potential claims, and
that Employee, on behalf of the Releasors, hereby expressly waives all rights with respect to all such claims under California Civil Code section 1542, which provides as follows: 
  
 A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his settlement with the debtor. 
  
 The monies to be paid to the Employee in this Release are in addition to any sums to which he would be entitled without signing this Release. 

 
 Employee acknowledges that he has read and does understand the provisions
of this Release. Employee acknowledges that he affixes his signature hereto voluntarily and without coercion, and that no promise or inducement has been made other than those set out in this Release and that he executes this Release without reliance
on any representation by any Releasee. 
  
 Employee understands
that this Release involves the relinquishment of his legal rights, and that he has the right to, and has been given the opportunity to, consult with an attorney of his choice. Employee acknowledges that he has been (and hereby is) advised by Bank
that he should consult with an attorney prior to executing this Release. 
  
 This document does not constitute, and shall not be admissible as evidence of, an admission by any Releasee as to any fact or matter. 
  
 In case any part of this Release is later deemed to be invalid, illegal or otherwise unenforceable, Employee agrees that the
legality and enforceability of the remaining provisions of this Release will not be affected in any way. 
  
 Employee acknowledges that he has been given a period of twenty-one (21) days from receipt of this Release within which to consider this Release and
decide whether or not to execute this Release. If Employee executes this Release at any time prior to the end of the 21 day period, such early execution was a knowing and voluntary waiver of Employee’s right to consider this Release for at
least 21 days, and was due to his belief that he had ample time in which to consider this Release. 
  
 Employee may, within seven (7) days of his execution and delivery of this Release, revoke this Release by a written document received by Bank on or before
the end of the seven (7) day period. The Release will not be effective until said revocation period has expired. No payments will be made hereunder if the Employee revokes this Release. 
  

									
					
	Dated:	 	  

	 	 	 	 	 	  

	 	 	 	 	 	 	 	 	ROBERT H. MUTTERA

  

 - 16 - 

 EXHIBIT B 
  

Noncancellable and guaranteed renewable to age 65 
 Conditionally renewable after age 65 – Premiums __ change 
  

					
	 	 	 [GRAPHIC]
  
 The Guardian
 Life Insurance Company
 of America
  
 201 Park Avenue South
 New York, NY 10003
  
 A Mutual Company
 Established
1860
	 	 

  
 Guardian hereby furnishes
insurance to the extent set out in this policy. All of the provisions on this and the pages which follow are part of this policy. 
  

					
			
	/s/    Herbert N. Grolneck         	 	 	 	/s/    Arthur Ferrara        
	
	 	 	 	

	Secretary	 	 	 	President

  
 You means the person insured.
We or Guardian means The Guardian Life Insurance Company of America. 
  
 Noncancellable and guaranteed renewable to age 65 
  
 You may renew this policy at the end of each term until you are age 65. During that time, we cannot change the premium or cancel this policy. 
  
 Conditional right to renew after age 65 — Premiums can change 
  
 After you are age 65, you may renew this policy at the end of each term as long as you are at
work full time. There is no age limit. But you must be at work at least thirty hours each week for at least ten months each year. 
  
 Your premium will be at our rates then in effect for persons of your age and class of risk. We have the right to change such premiums on a class basis on any policy
anniversary. 
  
 Notice of ten day right to review policy

  
 You have ten days to review this policy from the date you receive it.
Within that time, you can deliver or mail it to our home office or to any Guardian agent or agency for a prompt refund of all premiums. This policy will then be void from the start. 
  
 Professional Disability Income Policy 
 Participating 
  
 Form No. NC95 
  

 This policy is a legal contract between 
 you and Guardian. READ IT WITH CARE. 
  
 INDEX 
  
 The major provisions of this policy appear on the following pages: 
  

			
		
	 Renewal provisions
	  	Pages one and seven
		
	 Exclusions and limitations
	  	Page three
		
	 Definitions
	  	Page three
		
	 Benefit provisions
	  	Pages four and five
		
	 Claim provisions
	  	Page six
		
	 General provisions
	  	Page eight

  

			
	 	  	Page

	 Age
	  	seven
	 Benefit period
	  	three
	 Capital sum benefit
	  	four
	 Consideration
	  	eight
	 Dividends (participation)
	  	eight
	 Effective date
	  	eight
	 Election of directors
	  	eight
	 Entire contract
	  	eight
	 Elimination period
	  	three
	 Grace period
	  	seven
	 Incontestable
	  	eight
	 Injury
	  	three
	 Legal actions
	  	six
	 Medical care requirement
	  	three
	 Military suspension
	  	seven
	 Misstatement of age
	  	six
	 Monthly indemnity
	  	three
	 Notice of claim
	  	six
	 Payment of claims
	  	six
	 Policy anniversary
	  	seven
	 Presumptive total disability
	  	five
	 Recurrent disability
	  	four
	 Rehabilitation benefit
	  	five
	 Reinstatement
	  	seven
	 Sickness
	  	three
	 Termination
	  	seven
	 Total disability defined
	  	three
	 Total disability benefit
	  	four
	 Transplant benefit
	  	five
	 Waiver of premium benefit
	  	five

  
 Additional benefits, if
any, are shown in the schedule page 
 and are described in the rider forms attached to this policy. 
  

 Page two 

 S C H E D U L E    P A G E 
  

					
			
	 INSURED–  ROBERT H MUTTERA
	 	 	 	POLICY NUMBER–    G-511492
			
	 OWNER–  ROBERT H MUTTERA
	 	 	 	DATE OF ISSUE–       10/18/89
			
	 LOSS PAYEE–  ROBERT H MUTTERA
	 	 	 	  
 TERM–  12 MONTHS

  
 PREMIUM DISCOUNT
CLASS–   PREFERRED NONSMOKER 
  
 ANNUAL PREMIUM FOR:

  

						
	 –  BASIC BENEFITS
	  	–	  	$	1,109.16.
	 –  RESIDUAL INDEMNITY RIDER (AR575)
	  	–	  	$	229.16.
	 TOTAL ANNUAL PREMIUM
	  	–	  	$	1,338.32.
	 TERM PREMIUM
	  	–	  	$	1,338.32.

  
 — ELIMINATION
PERIOD — 
  
 3 MONTHS 
  
 — BENEFIT PERIOD — 
  
 TO AGE    65 IF DISABILITY BEGINS BEFORE AGE 60 
 60 MONTHS IF DISABILITY BEGINS AT OR AFTER AGE 60 BUT BEFORE AGE 61 
 48
MONTHS IF DISABILITY BEGINS AT OR AFTER AGE 61 BUT BEFORE AGE 62 
 42 MONTHS IF DISABILITY BEGINS AT OR AFTER AGE 62 BUT BEFORE AGE 63 
 36 MONTHS IF DISABILITY BEGINS AT OR AFTER AGE 63 BUT BEFORE AGE 64 
 30
MONTHS IF DISABILITY BEGINS AT OR AFTER AGE 64 BUT BEFORE AGE 65 
 24 MONTHS IF DISABILITY BEGINS AT OR AFTER AGE 65 BUT BEFORE AGE 75 
 12 MONTHS IF DISABILITY BEGINS AT OR AFTER AGE 75 
  
 — LIFETIME EXTENSION FOR TOTAL DISABILITY FROM AGE 60 — 
  

IF YOU BECOME TOTALLY DISABLED BEFORE YOU ARE AGE 60 AND REMAIN CONTINUOUSLY TOTALLY DISABLED TO AGE 65, WE WILL THEN EXTEND THE BENEFIT PERIOD FOR THE REST OF
YOUR LIFE WHILE YOU ARE TOTALLY DISABLED. THIS EXTENSION APPLIES ONLY TO THE BASIC BENEFITS OF THIS POLICY AND DOES NOT APPLY TO ANY OPTIONAL BENEFIT RIDER. 
  

					
	AR595	 	–10/17/89–	 	 SCHEDULE PAGE 1
  

CONTINUED......       

  

 POLICY NUMBER – G-511492 
  
 — TABLE OF BASIC BENEFITS — 
  

				
	 –  MONTHLY INDEMNITY
	  	$	3,400.
	 –  MAXIMUM REHABILITATION BENEFIT
	  	$	40,800.
	 –  CAPITAL SUM
	  	$	40,800.

  
 — TABLE OF
OPTIONAL BENEFITS — 
  
 THE RENEWAL PROVISION OF EACH OPTIONAL RIDER MAY
DIFFER FROM THAT OF THIS POLICY. SEE EACH RIDER FOR DETAILS. 
  
 –  RESIDUAL DISABILITY (FORM AR575) 
  
 — BENEFITS AND PREMIUMS AFTER AGE 65 — 
  
 IF YOU RENEW THIS
POLICY WHEN YOU ARE AGE 65, WE WILL ISSUE A NEW SCHEDULE PAGE AT THAT TIME. BENEFITS WILL BE LIMITED TO THOSE SHOWN IN THE TABLE OF BASIC BENEFITS ABOVE. 
  
 PREMIUMS FOR THIS POLICY MAY INCREASE ON RENEWAL AT OR AFTER AGE 65 AND WILL BE AT OUR RATES THEN IN EFFECT FOR PERSONS OF YOUR AGE AND CLASS OF RISK. 

 

					
	AR595	 	–10/17/89–	 	SCHEDULE PAGE 2

  

 Exclusions and limitations 
  

			
		
	 Preexisting
 condition
 limitation
	  	We will not cover loss that begins in the first two years after the date of issue from a preexisting condition.
		
	 	  	A preexisting condition means a physical or mental condition:
		
	 	  	 •      which was misrepresented or not disclosed in your application;
and
  
 •      for which you received a physician’s advice or treatment within two years before the date of issue; or
  

•      which caused symptoms within one year before the date of issue for which a prudent
person would usually seek medical advice or treatment.

		
	 Medical care
 requirement
	  	We will not pay benefits under this policy for any period of disability during which you are not under the care of a physician.
		
	 	  	We will waive the medical care requirement during any claim under this policy upon reasonable proof that your sickness or injury no longer requires regular care of a physician under prevailing
medical standards. Such waiver will not restrict our rights under the provision of this policy called “Physical examinations.”
	
	Definitions
		
	 Benefit
 period
	  	The benefit period is shown in the schedule page. It is the longest period of time for which we will pay indemnity for continuous disability from the same cause.
		
	 Elimination
 period
	  	The elimination period is shown in the schedule page. It is a consecutive number of days for which we will not pay benefits at the start of a claim. You must be disabled on all of those
days.
		
	 Injury
	  	Injury means accidental bodily injury which occurs while this policy is in force.
		
	 Loss payee
	  	You are the loss payee unless some other person is named in the schedule page. We will pay all benefits to the loss payee.
		
	 Monthly
 indemnity
	  	The monthly indemnity is shown in the schedule page. It is the amount we will pay for each month of total disability.
		
	 Owner
	  	You are the owner unless some other person is named in the schedule page. The owner has the right to renew this policy; to request a change in benefits; to change the loss payee; to receive
dividends, if any are declared; and to vote for our directors.
		
	 Physician
	  	Physician means a legally qualified physician other than yourself, who is not a loss payee or owner under this policy.
		
	 Sickness
	  	Sickness means a sickness or disease, including a pregnancy, which is first diagnosed and treated while this policy is in force.
		
	 Total
 disability
	  	Total disability means that, because of sickness or injury, you are not able to perform the major duties of your occupation.
		
	 	  	Occupation means your regular occupation or profession at the time you become disabled.
		
	 	  	If you have limited your professional practice to a recognized specialty in medicine, dentistry, law, or accounting, we will deem your specialty to be your occupation.
		
	 	  	You will be totally disabled even if you are at work in some other capacity so long as you are not able to work in your occupation.

  

 Page three 

 Benefit provisions 
  

			
		
	Total disability benefit	  	When you are totally disabled, we will pay the monthly indemnity as follows:
	 	  	 •      You must become totally disabled while this policy is in force.

		
	 	  	 •      You must remain so disabled to the end of the elimination period. No indemnity is payable during
that period.

		
	 	  	 •      After that, monthly indemnity will be payable at the end of each month while you are totally
disabled.

		
	 	  	 •      Monthly indemnity will stop at the end of the benefit period or, if earlier, on the date you are no
longer totally disabled.

		
	 	  	We will not increase the rate of monthly indemnity because you are totally disabled from more than one cause at the same time.
		
	 Fractional
 month
	  	 We will pay benefits at the rate of 1/30 of the monthly indemnity for each day for which we are liable when you are disabled for less than a full
month.

		
	 Interrupted
 elimination
 period
	  	 We will allow a break in the elimination period if you make a brief recovery before it ends. But the break may not last longer than six months or, if less, the
length of the elimination period.

		
	 	  	 Then if you are again disabled from the same or a different cause, we will combine the two periods of disability to determine when benefits
begin.

		
	 Waiver of
 elimination
 period
	  	 We will waive the elimination period if you become disabled within five years after the end of a prior period of disability which lasted more-than six months and
for which we paid benefits.

		
	 Recurrent
 periods of
 disability
	  	 We will consider recurrent periods of disability from the same cause or causes to be one continuous period of disability unless each period is separated by a
recovery of six months or more.

		
	 Capital sum
 benefit
	  	The capital sum is shown in the schedule page. This lump sum is in addition to any other indemnity payable under this policy.
		
	 	  	If you suffer a capital loss and survive it for 30 days, we will pay the capital sum for each such loss. But we will not pay for more than two such losses in your lifetime.
		
	 Capital
 loss
	  	 A capital loss means the entire loss of the sight in one eye, with no possible recovery; or the complete loss of a hand or foot by severance through or above the
wrist or ankle.

		
	 	  	 Such loss must occur while this policy is in force and must result from sickness or injury.

		
	 	  	 If this policy has terminated, we will pay for a capital loss which results from an injury sustained while this policy was in force and which occurs within 90 days
after the date of that injury.

  

 Page four 

			
	 Presumptive
 total
 disability
 benefit
	  	 We will always consider you to be totally disabled, even if you are at work, if sickness or injury results in your loss of:
  
 •      the sight
of both eyes; or
  
 •      the hearing of both ears; or
  
 •      the power of speech; or
  
 •      the use of any two limbs.

		
	 	  	We will waive any unexpired part of the elimination period from the date of Loss. We will pay the monthly indemnity each month while such loss continues from the date of loss to the end of the
benefit period.
		
	 	  	You must give us satisfactory proof of loss. But you do not have to be under the continuing care of a physician.
		
	 Rehabilitation
 benefit
	  	If you enroll in a rehabilitation program while you are totally disabled, we will pay a benefit to meet some of the costs you may incur. All of the following conditions apply:
		
	 	  	 •      We must agree to the program in writing before you enroll.

		
	 	  	 •      The program must be a formal plan of retraining that will help you return to work in your
occupation.

		
	 	  	 •      It must be directed by an organization or individual who is licensed or accredited to provide
vocational training or education to persons who are totally disabled.

		
	 	  	 •      We will pay only those costs which are not otherwise covered by health care insurance, workers’
compensation, or any public fund or program. But we will not pay more than the maximum rehabilitation benefit shown in the schedule page.

		
	 Transplant
 benefit
	  	If you are totally disabled because of the transplant of a part of your body to another person, we will deem you to be disabled as the result of sickness.
		
	 Waiver of
 premium
 benefit
	  	if you are totally disabled for at least 90 consecutive days, we will refund any premiums paid during those 90 days. Then we will waive any later premium that falls due while you are
continuously so disabled or within 90 days after you recover.
		
	 	  	On each waiver, we will renew this policy for another term of the same length as that in effect when claim began. If that term was less than twelve months and you are still disabled and eligible
for waiver on a policy anniversary, we will then change the term to twelve months.
		
	 	  	You have the right to resume payment of premiums when you recover and the waiver of premium benefit ends. At that time, you can change the term back to its original length if you
wish.
		
	 	  	Nothing in this provision will change the conditions for renewal after age 65 that require you to be at work full time.

  

 Page five 

 Claim provisions 
  

			
		
	Notice of claim	  	You must give us notice of claim within 30 days after any loss which is covered by this policy occurs or starts, or as soon after that as is reasonably possible. Notice, with sufficient
information to identify you, will be deemed notice to us if given to us at our home office, 201 Park Avenue South, New York, New York 10003, or to an authorized Guardian agent.
		
	Claim forms	  	When we get your notice of claim, we will send claim forms for filing proof of loss. If we do not send you such forms within 15 days after your notice, you may submit a written statement, within
the time fixed in this policy for filing proof of loss, which proves the nature and extent of the loss for which claim is made.
		
	Time for filing proof of loss	  	We are liable for benefits at the end of each month while you are disabled beyond the elimination period until the benefit period ends or, if earlier, the date you recover.
		
	 	  	You must give us proof of loss at our home office or at any agency office:
		
	 	  	 •      for loss from disability within 90 days after the end of the period for which we are liable;
and

		
	 	  	 •      for any other loss within 90 days after the date of loss.

		
	 	  	If you cannot reasonably give us proof within such time, we will not deny or reduce claim if you give us proof as soon as possible. But we will not pay benefits in any case if proof is delayed
for more than a year, unless you have lacked legal capacity.
		
	Time of payment of claims	  	Subject to due written proof of loss, we will pay all accrued indemnity for disability each month. Any amounts unpaid when our liability ends will be paid immediately after we receive due
written proof of loss.
		
	 	  	We will pay benefits for any other covered loss immediately after we receive due written proof of loss.
		
	Payment of Claims	  	We will pay all benefits of this policy to the loss payee.
		
	 	  	If you are the loss payee, any accrued benefits unpaid at your death will be paid to your estate.
		
	 	  	If any benefit of this policy becomes payable to your estate or to a minor or incompetent person, we may pay such benefit, up to $ 1,000, to any of your relatives by blood or marriage who we
believe has a right to it. Any payment made in good faith under this provision will fully discharge Guardian to the extent of such payment.
		
	Physical examination	  	We shall have the right and opportunity to have you medically examined at our expense when and as often as we may reasonably require while you claim to be disabled under this
policy.
		
	Legal actions	  	No one can bring an action at law or in equity under this policy until 60 days after written proof has been furnished as required by this policy. In no case can an action be brought against
Guardian more than three years after written proof must be furnished.
		
	Misstatement of age	  	If your age has been misstated, the benefits will be what the premium paid would have bought at the correct age. If we would not have issued this policy at your correct age, there will be no
insurance and we will owe only a refund of all premiums paid for the period not covered by this policy.

  

 Page six 

 SUPPLEMENT TO APPLICATION TO 
 THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA 

  
 Use this space to amplify and extend answers to questions in your application dated              
                                        
                           
  

					
	Question No.	 	 	 	Additional answers

  
 I represent that the answers as
amplified and extended above are true and complete to the best of my knowledge and belief and are a part of my above described application to THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA. 
  

							
	Signed at	  	  

	  	X	  	  

	 	  	 	  	 	  	Signature of proposed Insured

							
	Date	  	  

	  	 	  	 

  

 Residual disability rider 
  
 This rider is part of this policy and subject to all its conditions. It provides indemnity when you are at work at reduced earnings as a
result of sickness or injury. 
  
 Under the terms of this rider, we will determine
whether you are residually disabled solely on the basis of your ability to earn income after you become sick or injured. We will compute benefits solely in relation to earned income that you receive on a cash basis. 
  

							
	Premium and renewal	  	The premium for this rider is shown in the schedule page. You may not renew this rider after you are age 65.
		
	 	  	Amendments to this policy
		
	 Elimination
 period
	  	The elimination period will begin on the date you become sick or injured. You may be totally or residually disabled on each day after that to satisfy the elimination period under the
benefit provisions of this policy or rider.
		
	Waiver of premium	  	You may be totally or residually disabled to meet the conditions for waiver of premium of this policy.
		
	 	  	Definitions
		
	 Residual
 disability
	  	Residual disability means that you are at work and are not totally disabled under the terms of this policy; but, because of sickness or injury, you are not able to earn at a rate of
at least 80% of your prior income.
		
	 Residual
 indemnity
	  	The residual indemnity is a reduced amount of the monthly indemnity for this policy. We derive it as follows:
				
	 	  	residual indemnity =  	 	loss of income	  	 x monthly indemnity

	 	 	 	
	 
	 	  	 	prior income	  
		
	 	  	If you have a social insurance substitute rider, we will add the SIS benefit to the monthly indemnity in this equation in each month when the SIS benefit is payable.
		
	 Income
	  	Income means your gross earned income, less business expenses, but before any other deductions. It includes salaries, wages, fees, commissions, bonuses, business profits or other
payments for your personal services. It does not include unearned income from savings, investments, or real property.
		
	 	  	 Prior income means your average monthly income for the tax year with the highest earnings in the three years just prior to the date on which you
became disabled.

		
	 	  	 Current income means all income which you receive on a cash basis in each month while you are residually disabled.

		
	 	  	Loss of income means the difference between your prior income and your current income.
		
	 Expenses
	  	Expenses mean the regular business expenses which you may deduct from gross earned income for federal tax purposes.
		
	 	  	 Prior expenses mean your average monthly expenses for the same tax year on which your prior income is based.

		
	 	  	 Current expenses mean your expenses in each month while you are residually disabled.

		
	 	  	During a claim under this rider, the current expenses you deduct from gross earned income may not exceed your prior expenses, except as adjusted by this rider.
		
	Adjustment of prior expenses	  	While you are disabled under this rider, we will adjust your prior expenses to reflect any increase in fixed expenses that you then incur under the terms of a lease or other contract
which was in effect at the start of claim.

  

			
	 Form No. AR575
	 	(continued)

  

 Provisions relating to premium and renewal 
  

			
		
	 Age
	  	When we refer to a specific age—such as to age 65—we mean your age as of the policy anniversary that first occurs on or after the birthday on which you attain that
age.
		
	 Policy anniversary
	  	A policy anniversary is the recurrence each year of the date of issue.
		
	 Premium and
 grace period
	  	The term premium is shown in the schedule page. Premiums are due on the first day of each term. You have a grace period of 31 days in which to pay each premium due after the first
one.
		
	 	  	This policy will stay in force during the grace period. If you have not paid the premium by the end of the grace period, this policy will lapse at 12:01 AM the next day.
		
	 	  	If you die, we will refund to your estate that part of any premium which applies to the period after your date of death.
		
	 Termination of
 this policy at
 or after age 65
	  	 If you are not at work full time at the end of any term when you are age 65 or older, except by reason of total disability, this policy will
terminate.
  
 Termination will not prejudice any claim for total
disability:

		
	 	  	 •      which begins while this policy is in force; or

		
	 	  	 •      which begins within 31 days after the date of termination as the result of an accident that occurred
while this policy is in force.

		
	 	  	If we accept any premium after you are age 65, this policy will stay in force to the end of the term which that premium covers.
		
	 Reinstatement
	  	If this policy has lapsed at the end of the grace period, you can still keep it in force by paying the first overdue premium within 45 days of the time it was due.
		
	 	  	After that, you can reinstate this policy under the following conditions:
		
	 	  	 •      You must complete an application.

		
	 	  	 •      You must pay all overdue premiums, for which we will issue a conditional
receipt.

		
	 	  	 •      We will place this policy back in force on the date we approve your application. But if we have not
approved or refused your application in writing within 45 days after we have given a receipt, this policy will be reinstated on that 45th day. If we refuse to place this policy back in force, we will refund your premium.

		
	 	  	In any case, this policy will be reinstated on the date that we or our agent accept a premium and do not ask for an application.
		
	 	  	The reinstated policy will cover only loss that begins after the date of reinstatement. In all other respects, you and we will have the same rights under this policy as before it lapsed, subject
to any provisions endorsed on or attached to it in connection with reinstatement.
		
	 Suspension during
 military service
	  	We will suspend this policy on the date you go on active duty in the military service of any country or international authority. Such duty will not include temporary active duty by reservists
for military training that lasts 90 days or less. We will refund that part of any premium paid for the period of such suspension.
		
	 	  	If your active duty does not last longer than five years, you can place this policy back in force without evidence of good health or earned income as of the date of your discharge. To do so, you
must apply in writing and pay the premium, both within 90 days after active duty ends.
		
	 	  	We will base your premium on your age and class of risk when this policy was first issued. If you were disabled on or before your date of discharge, you must have recovered for at least six
months before we will cover a later disability from the same cause.
		
	 Term changes
	  	On any premium due date, you can change the term to twelve months or six months or three months. But we will not allow any change which would result in a premium not being due on a policy
anniversary.

  

 Page seven 

 General contract provisions 
  

			
	 Consideration
	  	We have issued this policy in consideration of the representations in your application and payment of the first term premium. A copy of your application is attached and is a part of this
policy.
		
	 Effective date
 of insurance
	  	Insurance takes effect on the date of issue for the term shown in the schedule page. Each term of this policy starts and ends at 12:01 AM standard time in the place where you
live.
		
	 	  	Preliminary term: If the schedule page shows a preliminary term and premium, this policy will be in force from the start of that period to the date of issue. All of your rights under this
policy will begin on the first day of that term instead of on the date of issue. But this will not change the policy anniversary.
		
	 Entire contract;
 changes
	  	This policy, with its riders and attached papers, if any, is the entire contract of insurance. No change in this policy will be valid unless it has been endorsed on or attached to this policy in
writing by the president, a vice president, or the secretary of Guardian.
		
	 	  	No agent has authority to change this policy or to waive any of its provisions.
		
	 Incontestable
	  	 (a)      After this policy has been in force for two years during your lifetime, we cannot use any misstatements
in your application to void this policy or to deny a claim for disability that starts after the end of those two years.

		
	 	  	 (b)      We cannot reduce or deny a claim for any disability that starts after two years from the date of issue
on the grounds that a sickness or physical condition had existed before the date of issue, unless we have excluded it by name or specific description before the date of loss.

		
	 Conformity with
 state laws
	  	Any provision of this policy which, on the date of issue, is in conflict with the laws of the state in which you reside on such date is hereby amended to conform to the minimum requirements of
such laws.
	
	Provisions relating to mutual insurance
		
	 Participation
	  	This policy will be entitled to participate in the divisible surplus of Guardian. Dividends will be paid in such manner, under such conditions, and to such extent as our board of directors may
from time to time determine.
		
	 Election of
 directors
	  	The annual election of directors is held at our home office on the second Wednesday in December. Owners of Guardian policies may vote for directors according to the insurance law of the State of
New York. For details, write to the Secretary, 201 Park Avenue South, New York, New York 10

  

 Page eight

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