Document:

Exhibit
10.1

 

SAN RAFAEL BANCORP

 

EMPLOYEE INCENTIVE STOCK
OPTION AND

STOCK APPRECIATION RIGHT
PLAN

 

1.  PURPOSE

 

The purpose of this Stock Option Plan (“Plan”) is to
provide a means whereby employees of San Rafael Bancorp (“Corporation”), or of
other corporations which are or may hereafter become subsidiaries of the
Corporation, within the meaning of Section 425(f) of the Internal Revenue Code
of 1954, as amended (“Subsidiaries”), may be given an opportunity to purchase
shares of common stock (“Common Stock”) of the Corporation.  The Plan is intended to advance the
interests of the Corporation and the Subsidiaries by encouraging stock
ownership on the part of key employees, by enabling the Corporation and the
Subsidiaries to secure and retain the services of highly qualified persons as
employees, and by providing such employees with an additional incentive to make
every effort to enhance the success of the Corporation and the Subsidiaries.

 

2.  AGGREGATE LIMITATION ON
AWARDS

 

Authorized and unissued shares of Common Stock may be
issued under the Plan.  The maximum
number of shares of Common Stock that may be issued shall be Twenty-Seven
Thousand (27,000) shares, subject to adjustment as provided in subsection 7(g)
of this Plan.  For purposes of
calculating the aggregate number of shares of Common Stock which may be issued
under the Plan:

 

(a)                                  Shares
of Common Stock applicable to the unexercised portions of options which have
terminated or expired, except as provided in subsection (b) below, may again be
made subject to stock options (“Options”) under the Plan, if at such time
Options may still be granted under the Plan;

 

(b)                                 
Shares covered by the Options terminated upon the exercise of a Stock
Appreciation Right shall not be available for granting further Options under
this Plan; and

 

(c)                                  Only
the net shares issued (including the shares, if any, withheld for tax
withholding requirements) shall be counted when shares of Common Stock are used
as full or partial payment for shares issued upon exercise of an Option.

 

1

 

3.  ADMINISTRATION

 

(a)                                  The
Plan shall be administered by the Board of Directors of the Corporation, or by
a committee of the Board to which such administration is delegated by the Board
(the “Committee”).  Such Committee shall
be comprised of three (3) or more individual directors.  Minutes of the meetings of the Board or the
Committee with respect to the grant of Options and the administration of the
Plan shall be kept as minutes of any other meeting, and the names of the
directors who vote or who abstain from voting shall be noted therein.  References herein to the Board shall be
deemed to mean the Committee if authority has been delegated to it, except that
the authority to terminate, modify or amend the Plan may not be delegated to
the Committee.

 

(b)                                 The
Board shall have plenary authority in its discretion to:

 

(1)                                  determine
the employees of the Corporation and/or the Subsidiaries who are within that
class set forth herein as “participants;”

 

(2)                                  grant
awards provided in the Plan in such form and amount as the Board shall
determine;

 

(3)                                  impose
such limitations, restrictions and conditions upon any such award as the Board
shall deem appropriate; and

 

(4)                                  interpret
the Plan, and to prescribe, amend, and rescind rules and regulations relating
to it, and make all other determinations and take all other action necessary or
advisable for the implementation and administration of the Plan.

 

To the extent that Options are granted hereunder as “incentive stock
options,” the Plan shall be administered so as to qualify such options as
incentive stock options, as defined in Section 422 and other applicable
sections of the Internal Revenue Code of 1986, as now in force or hereafter
amended (the “Code”), and the regulations promulgated thereunder.  All questions of interpretation and
application of the Plan and of any options granted under it shall be determined
by the Board and such determination shall be final and binding upon all
persons.  No member of the Board shall
be liable for any action or determination made in good faith, and the members
shall be entitled to indemnification and reimbursement in the manner and to the
extent permitted by applicable law.

 

2

 

4.  PARTICIPANTS

 

All employees who have worked for the Corporation or
the Subsidiaries for at least one (1) year shall be eligible to participate in
the Plan, as and when selected by the Board.

 

5.  TYPES OF AWARDS UNDER THE
PLAN.

 

Awards under the Plan may be in the form of any one or
both of the following:

 

(a)                                  Options,
as described in Section 6, which may be designated as “incentive stock
options,” as defined in Section 422 of the Code, or as “non-incentive
stock options,” as may be determined by the Board; and/or

 

(b)                                 Stock
Appreciation Rights, as described in Section 8.

 

6.  AWARD OF STOCK OPTIONS.

 

Options may be granted under the Plan from time to
time, but not after March 19, 2006.  
The grant of options hereunder shall be subject to the following limitations:

 

(a)                                  No
“incentive stock option,” as defined in Section 422 of the Code, may be granted
hereunder to any participant who, on the date such option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Corporation, or its parent or subsidiary
corporations, if any, unless the exercise price of such option is equal to at
least one hundred and ten percent (110%) of the fair market value of the shares
of the Corporation’s Common Stock on the date such option is granted.

 

(b)                                 The
aggregate fair market value (determined as of the date an option is granted) of
the shares with respect to which “incentive stock options,” as defined in
Section 422 of the Code, are exercisable for the first time by any optionee
during any calendar year shall not exceed one hundred thousand dollars
($100,000).  Fair market value for this
purpose shall be determined in the manner provided in subsection 7(a) of this
Plan.

 

In making any determination as to the employees of the Corporation or
the Subsidiaries to whom options shall be granted and as to the number of
shares to be covered by

 

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such options, the Board shall take into account the duties of the respective
participants, their present and potential contributions to the success,
profitability and sound growth of the Corporation or the Subsidiaries, and such
other factors as the Board shall deem relevant in connection with accomplishing
the purposes of the Plan.

 

7.  TERMS AND CONDITIONS OF
OPTIONS

 

Except as may be otherwise provided in any agreement
containing stock option provisions which is specifically approved by the Board,
options granted pursuant to the Plan shall be evidenced by stock option agreements
in such form, not inconsistent with the Plan, as the Board shall from time to
time approve.  Each option agreement
shall designate whether the option is granted as an “incentive stock option” or
as a “non-incentive stock option”.  Such
stock option agreements shall contain the substance of the following terms and
conditions:

 

(a)                                  Option
Price.  The option price to be paid
upon exercise of the option shall be not less than the fair market value of the
shares of the Common Stock of the Corporation on the date such option is
granted.  The Board may determine the
fair market value of the shares of Common Stock of the Corporation is equal to
the book value of the Shares, determined in accordance with generally accepted
accounting principles, as of the end of the most recently ended fiscal
quarter.  Financial statements audited
by the Corporation’s certified public accountants and covered by its opinion
that such statements conform to GAAP or certified as conforming to GAAP by the
chief financial officer of the Corporation may be used to establish such book
value.

 

(b)                                 Term
of Option.  Each option granted
under the Plan shall expire ten (10) years from the date the option is granted,
unless a shorter period is determined by the Board.

 

(c)                                  Exercise
of Option.  Each option may be
exercised upon such terms and conditions as the Board shall determine.  If an option is exercisable only in
installments, such installments shall be cumulative.  In no event, however, shall the Corporation be required to issue
fractional shares.

 

(d)                                 Manner
of Exercise.

 

(1)                                  To
the extent that the right to purchase shares has accrued hereunder, options may
be exercised from time to time by written notice to the Corporation stating the
number of shares with respect to which the Option is being exercised, and the
time of the delivery thereof, which shall not be less than fifteen (15) days
and not more than thirty (30) days after the giving of such notice, unless an
earlier date shall have been mutually agreed upon.  Shares of

 

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Common Stock purchased under Options shall, at the
time of the notice specifying the date of delivery, be paid for in full, in
cash or, with the prior written consent of the Corporation, in whole or in part
through the surrender of previously owned shares of  Common Stock.  To the
extent payment is being made with cash, the optionee shall deliver a certified
or official bank check or the equivalent thereof acceptable to the
Corporation.  If shares of Common Stock
are tendered as payment, such shares shall be valued at their fair market
value, determined as provided in subsection 7(a) above, as of the date of the
notice given to the Corporation by the optionee with respect to such exercise.

 

(2)                                  At
the time specified in the notice for delivery of the certificate, the
Corporation shall, without transfer or issue tax to the optionee (or other
person entitled to exercise the option), deliver to the optionee (or other
person entitled to exercise the option) at the principal office of the
Corporation, or such other place as shall be mutually acceptable, a certificate
or certificates for such shares; provided, however, that the time of such
delivery may be postponed by the Corporation for such period as may be required
for it with reasonable diligence to comply with any requirements of law.  If the optionee (or other person entitled to
exercise the Option) fails to pay for all or any part of the number of shares
specified in such notice or fails to accept delivery of such shares upon tender
of delivery thereof, the right to exercise the Option with respect to such
undelivered shares may be terminated. 
The Board may require that a partial exercise of an option may be for no
less than a stated minimum number of shares.

 

(e)                                  Non-Assignability
of Option Rights.  No Option shall
be assignable or transferable otherwise than by will or the laws of descent and
distribution.  During the life of an
optionee, an Option shall be exercisable only by the optionee.

 

(f)                                    Termination
of Employment.   In the event that
an optionee is no longer an employee of the Corporation or one of the
Subsidiaries, his or her option shall terminate immediately; provided, however,
that any remaining tandem Stock Appreciation Rights shall be considered
exercised under subsection 8(f) of this Plan.

 

(g)                                 Adjustments
or Changes in Stock.

 

(1)                                  In
the event that the outstanding shares of Common Stock are hereafter increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Corporation or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split, combination of shares, dividend payable in
common stock, or acquisition, or any similar transaction, in which the

 

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Corporation receives no additional consideration other
than shares or other securities, appropriate adjustment shall be made by the
Board in the number and kind of shares for the purchase of which options may be
granted under the Plan.  In addition,
the Board shall make appropriate adjustment in the number and kind of shares as
to which outstanding options or portions thereof then unexercised, shall be
exercisable, so that any participant’s proportionate interest in the
Corporation by reason of rights under unexercised portions of such option shall
be maintained as before the occurrence of such event.  Such adjustment in outstanding options shall be made without
change in the total price applicable to the unexercised portion of the option
and with a corresponding adjustment, if necessary, in the option price per
share.

 

(2)                                  In
the event of a dissolution or liquidation of the Corporation, a merger,
consolidation, acquisition, or other reorganization involving the Corporation
or a principal subsidiary, in which the Corporation or such principal
subsidiary is not the surviving or resulting corporation, or a sale by the
Corporation of all or substantially all of its assets, the Board shall cause the
termination of all options outstanding hereunder as of the effective date of
such transaction, provided, however, that not less than thirty (30) days
written notice of the expected effective date of such transaction shall be
given to each optionee, and each optionee shall have the right, on the
effective date of such termination, to exercise his or her option as to all or
any part of the shares covered thereby, including shares as to which such
option would not otherwise be exercisable. 
In any event, the surviving or resulting corporation may, in its
absolute and uncontrolled discretion, tender options to purchase its shares on
its terms and conditions.

 

(h)                                 Restrictions
on Shares; Notification of Sale.

 

(1)                                  Each
option agreement shall contain an agreement by the optionee that if he or she
at any time contemplates the disposition of any of the stock acquired pursuant
to the plan, he or she shall first notify the Corporation of such proposed
disposition and shall thereafter cooperate with the Corporation in complying
with all applicable requirements of law which, in the opinion of the
Corporation, must be satisfied prior to the making of such disposition.

 

(2)                                  The
Agreements setting forth the terms and conditions of Options granted under this
Plan may required that a participant acquire Common Stock upon exercise only
for investment and not for resale or distribution, and restrict

 

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transfer of the Common
Stock so received as may be necessary under applicable securities laws.

 

(i)                                     Withholding
Taxes.  Whenever the Corporation
proposes or is required to issue or transfer shares of Common Stock under the
Plan, the Corporation shall have the right to require the optionee to remit to
the Corporation an amount sufficient to satisfy any Federal, state and/or local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. 
Alternatively, the Corporation may issue or transfer such shares of
Common Stock net of the number of shares sufficient to satisfy the withholding
tax requirements.  For withholding tax
purposes, the shares of Common Stock shall be valued as provided in subsection
7(a) on the date the withholding obligation is incurred.

 

8.  STOCK APPRECIATION RIGHTS

 

(a)                                  Award
of Stock Appreciation Rights. 
Concurrently with or subsequent to the award of any Option, the Board
may, subject to the provisions of the Plan and such other terms and conditions
as the Board may prescribe, award to the optionee a related tandem Stock
Appreciation Right permitting the optionee to be paid the appreciation on the
Option in lieu of exercising the Option. 
The number of shares covered by such Stock Appreciation Rights shall not
exceed the number of shares covered by the related Option.   Stock Appreciation Rights shall be
evidenced by written agreements in such form as the Board may from time to time
determine.

 

(b)                                 Exercise
of Stock Appreciation Rights.  An
optionee who has been granted a Stock Appreciation Right may, from time to
time, to the extent the related option is exercisable, elect to exercise the
Stock Appreciation Right for all or part of the shares covered by such Stock
Appreciation Right and thereby become entitled to receive, in cash, in Common
Stock, or such combination thereof as the Board shall determine, an amount or
payment as determined pursuant to subsections 8(d) and 8(e).  An exercise of an Option as to a number of
shares shall cause a correlative reduction in the Stock Appreciation Rights
held by the participant with respect to such Option of the same number of
shares, and the exercise of a Stock Appreciation Right for a number of shares
shall cause a correlative reduction in the number of shares covered by the
related Option.  Stock Appreciation
Rights shall be exercisable only to the same extent and subject to the same
conditions as the Options related thereto are exercisable, and only when the
fair market value of a share of Common Stock, determined as provided in
subsection 7(a) of this Plan exceeds the exercise price of the related
Option.  The Board may, in its
discretion, prescribe additional conditions to the exercise of any Stock
Appreciation Rights.

 

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(c)                                  Manner
of Exercise of Stock Appreciation Rights. 
An optionee wishing to exercise a Stock Appreciation Right shall give
written notice of such exercise to the Corporation, stating the number of
shares as to which Stock Appreciation Rights are being exercised, which notice
shall be forwarded to the Board.  The date
the Corporation receives the written notice of exercise hereunder is referred
to herein as the Exercise Date.  Upon
receipt of such notice, the Board shall determine whether the Stock
Appreciation Right shall be paid in cash or Common Stock or a combination of
cash and shares.  Upon such
determination, the Corporation shall, without transfer or issue tax to the
optionee or other person entitled to exercise the Stock Appreciation Right,
deliver to the person exercising such right (i) a certificate or certificates
for shares of the Corporation’s Common Stock, (ii) a certified or official bank
check, or (iii) a combination of (i) and (ii) as the case may be.

 

(d)                                 Amount
of Payment.  The amount of payment,
in cash or shares, to which an optionee shall be entitled upon the exercise of
a Stock Appreciation Right shall be equal to 100% of the amount, if any, by
which the fair market value of a share of Common Stock on the Exercise Date,
determined as provided in subsection 7(a) of this Plan, exceeds the exercise
price of the Option related to said Stock Appreciation Right, times the number
of shares of Common Stock as to which the Stock Appreciation Right is being
exercised.

 

(e)                                  Form
of Payment.  Cash shall be paid by
delivery of the Corporation’s check. 
Shares shall be paid by delivery of a certificate or certificates for
the number of shares determined by dividing the amount of payment determined
pursuant to subsection 8(d) by the fair market value of a share of Common Stock
on the Exercise Date of such Stock Appreciation Right.  As soon as practicable after exercise, the
Company shall deliver to the optionee a certificate or certificates for such
shares of Common Stock.  All such shares
shall be issued with the restrictions specified in subsection 7(h).

 

(f)                                    Term.  A Stock Appreciation Right may be exercised
only while the related Option is exercisable. 
If, as of the date on which an Option to which a Stock Appreciation
Right related expires, any part of such related Option has not been and on that
date is not exercised, all remaining related equivalent Stock Appreciation
Rights shall be considered exercised as of that date and any positive amount
determined under subsection (d) above shall be paid to the optionee in cash.

 

(g)                                 Termination
of Employment.  Upon termination of
the optionee’s employment, including by reason of disability or death, Stock
Appreciation Rights shall immediately and automatically terminate; provided,
however, that any remaining tandem Stock Appreciation Rights shall be
considered exercised under subsection (f) above.

 

8

 

(h)                                 Assignability.  No Stock Appreciation Right shall be
assignable or transferable otherwise than by will or the laws of descent and
distribution.  During the life of a participant,
a Stock Appreciation Right shall be exercisable only by the participant.

 

9.  EFFECTIVE DATE AND
TERMINATION OF PLAN

 

(a)                                  Effective
Date.  The Plan shall become
effective, and options and Stock Appreciation Rights may be granted hereunder,
upon approval by the Board of Directors of the Corporation, and Options and
Stock Appreciation Rights may be exercised hereunder upon the approval of the
Plan and related matters by the shareholders of the Corporation.

 

(b)                                 Termination
of Plan.  The Plan shall terminate
on March 19, 2006, and no further options may be granted under the Plan.  Termination of the Plan shall not, without
the written consent of the optionee, alter or impair any of the rights or
obligations under any Option or Stock Appreciation Rights theretofore granted
under the Plan.

 

10.  AMENDMENTS

 

The Plan may be terminated at any time, or from time
to time may be modified or amended, by the shareholders of the
Corporation.  In addition, the Board may
terminate the Plan at any time and from time to time modify or amend the Plan
in such respects as it shall deem advisable, or to conform to any requirements
of the laws and regulations relating to the Corporation or in any other
respect; provided, however, that no such action of the Board may, without the
approval of the shareholders, amend the Plan in any manner which would have the
effect of preventing options issued under the Plan from being “incentive stock
options” as defined in Section 422 of the Code, or alter the provisions of the
Plan so as to (a) increase, other than pursuant to the adjustment provisions of
Section 7(g) hereof, the maximum number of shares as to which options may be
granted under the Plan; (b) add a new class of participants; (c) decrease the
exercise price specified by Section 7(a) hereof; (d) extend the term of the
Plan or the maximum term of options granted hereunder; or (e) withdraw the
administration of the Plan from the Board. 
The foregoing authority and power of the Board to terminate or modify or
amend the Plan may not be delegated to the Committee pursuant to Section 3(a)
of this Plan.

 

9

 

11.  USE OF PROCEEDS

 

The proceeds from
the sale of Common Stock pursuant to the exercise of options will be used for
the Corporation’s general corporate purposes.

 

12.  NO OBLIGATION TO EXERCISE
OPTION

 

The grant of an
option hereunder shall impose no obligation upon the optionee to exercise such
option.

 

13.  RESTRICTION ON ISSUANCE OF
SHARES

 

The Corporation
shall not be obligated to issue any shares pursuant to any stock option and any
shares issued pursuant thereto shall not be validly issued until there has been
compliance with the laws, rules and regulations relating to the issuance of
such shares.

 

14.  RIGHTS AS A SHAREHOLDER

 

Optionees shall have no rights as Shareholders with
respect to any shares of Common Stock of the Corporation until the date of
issuance of a stock certificate to such optionee for such shares.  No adjustment shall be made for dividends or
other rights for which the record date is prior to the date of such issuance,
except as otherwise provided in Section 7(g) hereof.

 

15.                                 RIGHT
TO TERMINATE EMPLOYMENT

 

Nothing in the Plan or in any agreement entered into
pursuant to the Plan shall confer upon any participant the right to continue in
the employment of the Corporation or any of the Subsidiaries or effect any
right which the Corporation or any of the Subsidiaries may have to terminate
the employment of such participant.

 

10Exhibit
10.2

 

PENSION PLAN

 

FOR KIT
M. COLE

 

Effective January 1, 2002

 

Section 1.                                            Purpose
of the Plan.

 

Tamalpais Bank (the “Bank”) hereby establishes this Pension Plan
(“Plan”) for its Chairperson/CEO, Kit Cole, effective as of January 1,
2002.  The purpose of the Plan is to
provide an incentive for Kit M. Cole (“Cole”) to continue as
Chairperson/CEO.  This Plan is intended
to be an unfunded deferred compensation plan for a select group of management
or highly compensated employees within the meaning of Sections 201(2),
301(a)(3) and 401(a)(l) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”).

 

Section 2.                                            Definitions.

 

Except as otherwise indicated, all definitions in this Plan shall have
the meanings indicated below.

 

2.1                                 “Bank” means Tamalpais Bank, or any
predecessor or successor corporation, which has been designated by the Board as
participating in the Plan, and which has accepted such designation and has
agreed to be bound by the terms of the Plan.

 

2.2                                 “Beneficiary” means any person or entity
determined as such under Section 6 who is entitled to receive payments under
the Plan because of the death of Cole.

 

2.3                                 “Board” means the Board of Directors of
Tamalpais Bank, or any predecessor or successor company.

 

1

 

2.4                                 “Cause”
means, for purposes of this Plan, (i) a criminal act or omission by Cole; or
(ii) Cole’s fraud, dishonesty, or willful misperformance in rendering services
to the Bank.

 

2.5                                 “Change
in Control” shall be deemed to take place on the occurrence of any of the
following events:   (i) a merger or
consolidation of the Bank, in which the Bank is not the surviving organization
and a majority of the capital stock of the surviving organization is owned by
persons who were not shareholders of the Bank immediately prior to such merger
or consolidation; (ii) a transfer of all or substantially all of the assets of
the Bank to an unrelated entity; (iii) any other corporate reorganization in
which there is a change in ownership of the outstanding shares of the Bank
wherein twenty-five percent (25%) or more of the outstanding shares are
transferred to any “person” (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act); or (iv) the election to the Board of candidates
who were not recommended for election by members of the Board in office
immediately prior to the election, if such candidates constitute a majority of
those elected in that particular election.

 

2.6                                 “Disability”
or “Disabled” means a condition of Cole resulting from a medically determinable
physical or mental impairment so that Cole is unable to perform the material
and substantive duties of Cole’s position or profession, which condition shall
be determined by the Bank on the basis of such medical evidence as the Bank
deems warranted under the circumstances.

 

2.7                                 “Effective
Date” means January 1, 2002.

 

2.8                                 “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

2.9                                 “Plan”
means the Pension Plan for Kit M. Cole as set forth in this document.

 

2.10                           “Plan
Year” means the calendar year.

 

2

 

2.11                           “Year
of Service” means a calendar year of continuous service with the Bank. 

 

Section 3.                                            Administration
of the Plan.

 

3.1                                 The
Plan shall be administered by the Board. 
All decisions required to be made involving the interpretation,
application and administration of the Plan shall be resolved by the Board.

 

Section 4.                                            Pension
Plan Benefit.

 

4.1                                 The
benefit under this Plan shall be equal to payments of $100,000 per year
commencing January 1, 2005, for a period of fifteen (15) years.

 

4.2                                 The
benefit described in paragraph 4.1 shall vest and be non-forfeitable at the
rate of one-third of the total benefit (331/3%)
for each year of service performed and completed by Cole commencing January 1,
2002.  Should Cole voluntarily terminate
employment or be terminated by the Bank for Cause prior to December 31, 2004,
she shall be entitled to receive payments for fifteen years equal to $100,000
times the percentage of the benefit that is then vested.   Should Cole be terminated by the Bank other
than for Cause prior to December 31, 2004, Cole shall become fully vested and
entitled to payment of benefits as if she had died or become Disabled under
Section 4.3.

 

4.3                                 Notwithstanding
the foregoing, should Cole become Disabled or die, or should there be a Change
in Control, prior to her termination of employment and prior to December 31,
2004, her benefit hereunder shall become fully vested and she (or her Beneficiary)
shall be entitled to receive the full benefit payments of $100,000 for fifteen
years in accordance with Section 5.1 below; provided, however, should there be
a Change in Control this provision will not be effective if, and to the extent,
Cole and the entity or individual that causes the Change in Control agree in
writing that vesting will not be accelerated.

 

3

 

Section 5.                                            Distribution
of Benefits.

 

5.1                                 Benefit
payments will commence upon Cole’s retirement on January 1, 2005, and each
yearly payment will be made in equal monthly installments during each year of
the fifteen year payment period.

 

5.2                                 Should
Cole become Disabled, be terminated other than for cause, or should there be a
Change in Control, prior to December 31, 2004, monthly benefit payments of
$8,333.33 will commence within 60 days after such Disability, termination or
Change in Control and shall be completed after 180 monthly payments have been
made.

 

5.3                                 Should
Cole’s employment terminate prior to December 31, 2004 on account of her death,
monthly benefit payments will commence in the first calendar year after the
year of death, and each year thereafter, as provided in Section 5.1.

 

5.4                                 Should
Cole’s employment be terminated for Cause, or should she voluntarily terminate
employment, prior to December 31, 2004, monthly benefit payments will commence
in the first day of the month following such termination of employment, payable
monthly over a period of fifteen years, based upon the percentage of vested
benefit determined under paragraph 4.2.

 

5.5                                 If
Cole is already receiving distribution of her benefit and dies before complete
distribution of all of her benefit, the remaining benefit payments shall
continue to be paid to Cole’s Beneficiary as provided in this Plan.

 

Section 6.                                            Beneficiary.

 

6.1                                 Cole
may designate, in writing, a Beneficiary or Beneficiaries to receive the
payment of her benefit payments in the event of her death. A designation of
Beneficiary may be revoked or changed at any time by filing a new written
designation with the Bank.

 

4

 

6.2                                 If
Cole fails to designate, in writing, a Beneficiary or Beneficiaries to receive
payment of her benefits in the event of her death, or if no validly designated
Beneficiary survives Cole, Cole’s Beneficiary or Beneficiaries shall be the
following in order:

 

(a)                                  Children,
equally; or

 

(b)                                 estate.

 

Section 7.                                            Cole’s
Rights.

 

Cole’s (or a
Beneficiary’s) right to receive a distribution hereunder shall be an unsecured
claim against the general assets of the Bank, and neither Cole nor the
Beneficiary shall have any rights in or against any specific assets of the
Bank.

 

Notwithstanding
the foregoing paragraph, the Bank may establish and maintain a “Rabbi” Trust,
which shall be an irrevocable trust in which the Bank may deposit amounts for
purposes of this Plan. Any Trust assets shall be administered in accordance
with the terms of the Trust, but such assets shall be subject to the claims of
the Bank’s creditors in the event of the bankruptcy or insolvency of the Bank,
until paid to Cole or her Beneficiaries. The Trust shall constitute an unfunded
arrangement providing deferred compensation to a select group of management or
highly compensated employees for purposes of Title I of the ERISA.

 

Section 8.                                            Miscellaneous
Provisions.

 

8.1                                 This
Plan does not confer upon Cole the right to be retained in the Bank’s employ,
and Cole shall remain subject to discharge, discipline and termination to the
same extent as if this Plan did not exist. 
This Plan creates no rights or obligations other than those expressed
herein.

 

8.2                                 No
right or interest of any kind in any Plan asset shall be transferable or
assignable by Cole or her Beneficiary(ies), or be subject to alienation, encumbrance,

 

5

 

garnishment, attachment, execution or levy of any
kind, voluntary or involuntary. This prohibition shall not apply to the
creation, assignment or recognition of a right to any interest payable
hereunder with respect to Cole pursuant to a domestic relations order that
satisfies the requirements of a Qualified Domestic Relations Order (“QDRO”) as
that term is defined in Section 414(p) of the Internal Revenue Code (the
“Code”) as if this Plan were qualified under Section 401(a) of the Code.
Payment pursuant to such domestic relations order may be made as soon as
administratively feasible following determination by Cole that said order
satisfies the requirements of a QDRO.

 

8.3                                 If
the Bank shall at any time be merged or consolidated into or with any other
entity, or if substantially all of its assets are transferred to another
entity, the provisions of this Plan shall be binding upon and inure to the
benefit of the entity resulting from such merger or consolidation to which such
assets shall be transferred, and this provision shall apply in the event of any
subsequent merger, consolidation, or transfer.

 

8.4                                 In
the event the Bank must liquidate due to insolvency or events resulting in an
act of bankruptcy, this Plan shall terminate and all obligations to Cole shall
be considered as payable immediately.

 

8.5                                 Except
as provided by federal law, all questions pertaining to the validity,
construction and administration of the Plan shall be determined under the laws
of California.

 

Section 9.                                            Amendments
and Termination.

 

9.1                                 The
Bank may at any time amend or terminate this Plan in whole or in part with
Cole’s consent.

 

6

 

Section 10.                               Expenses.

 

Costs of administration
of the Plan shall be paid by the Bank as may be determined by the Board. 

 

Section 11.                                      Execution.

 

To record the
adoption of this Plan, the Bank and Cole have caused its appropriate officers
to affix its company name and seal hereto this 1 day of May, 2002.

 

	
   

  	
  Tamalpais Bank

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Carolyn
  Horan

  	
   

  
	
   

  	
   

  	
  Carolyn Horan, Vice Chairman

  
	
   

  	
   

  
	
   

  	
  Kit M. Cole

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Kit M. Cole

  	
   

  
					

 

7

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