Document:

EXHIBIT 10.1

 

FEDERAL HOME LOAN BANK OF BOSTON

 

2010 EXECUTIVE INCENTIVE PLAN

March 2010-Revised

 

Purpose:

 

The
Federal Home Loan Bank of Boston (Bank) has established a 2010 Executive
Incentive Plan (EIP) which is designed to reward and retain corporate officers
during turbulent economic conditions and an atypical period of financial
performance challenges as evidenced by the lack of dividend payments to members,
suspension of the repurchase of excess capital stock and lack of funding for
the AHP program.  Payout opportunities
for 2010 EIP participants are generally based on the Bank’s current financial
situation, not the competitive market. 
It is intended that in subsequent EIP performance periods opportunities
will increase to competitive levels as the Bank’s financial performance
improves, e.g. from 50% of recommended payouts to 75% when the Bank resumes meaningful
dividend payments and to 100% when the Bank resumes repurchase of excess stock.

 

Guiding
Principles:

 

The
2010 EIP is intended to:

 

·                  Recognize that the Bank’s
current overall focus is a return to earnings generation to a level that allows
payment of dividends, resumption of the purchase of excess capital stock, and
funding of the AHP program.

·                  Reinforce and reward the
Bank’s commitment to conservative, prudent, sound risk management practices and
preservation of the par value of the Bank’s capital stock.

·                  Reflect a reasonable
assessment of the Bank’s financial situation and prospects while rewarding
achievement of identified remediation milestones and the Bank’s financial plan
and strategic objectives as spelled out in the Bank’s 2010 Business Plan.

·                  Tie a significant percentage
of incentive awards to the long-term financial condition and performance of the
Bank.

·                  Recognize the importance of
individual performance through metrics linked to the objectives of the
participant’s principal functions.

·                  Recognize that continued
enhancements and upkeep of the Bank’s operational infrastructure are critical
to the Bank’s long-term condition.

 

 

Incentive
Goals:

 

The
incentive goals for all participants, with the exception of those participants
in Enterprise Risk Management, are summarized in the following table with more
detail following in Appendix A:

 

	
   

  	
   

  	
  Weight

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Goal

  	
   

  	
  Pres.

  	
   

  	
  Tier I

  	
   

  	
  Tiers II & III

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Excess

  
	
  Pre-assessment
  Core Net Income

  	
   

  	
  25%

  	
   

  	
  20%

  	
   

  	
  10%

  	
   

  	
  $212.0 MM

  	
   

  	
  $249.0 MM

  	
   

  	
  $286.0 MM

  
	
  Member
  Outreach 

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  45% of membership 

  	
   

  	
  60% of membership

  	
   

  	
  75% of membership

  
	
  Advance
  Restructures 

  	
   

  	
  0%

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  125

  	
   

  	
  150

  	
   

  	
  175

  
	
  Growth
  in Membership

  	
   

  	
  0%

  	
   

  	
  5%

  	
   

  	
  5%

  	
   

  	
  4 New Members

  	
   

  	
  6 New Members

  	
   

  	
  8 New Members

  
	
  2010
  Average CDA and ESA Advances Balances 

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  $2.5 Billion

  	
   

  	
  $2.619 Billion

  	
   

  	
  $2.852 Billion

  
	
  Remediation
  of 2009 Report of Examination Findings

  	
   

  	
  25%

  	
   

  	
  20%

  	
   

  	
  20%

  	
   

  	
  70% Clearance

  	
   

  	
  85% Clearance

  	
   

  	
  100% Clearance

  
	
  Individual,
  Department-Specific Component 

  	
   

  	
  0%

  	
   

  	
  0%

  	
   

  	
  15%

  	
   

  	
  As defined 

  	
   

  	
  As defined

  	
   

  	
  As defined

  
	
  Discretionary
  Component 

  	
   

  	
  30%

  	
   

  	
  25%

  	
   

  	
  20%

  	
   

  	
  As documented by supervisor

  	
   

  	
  As documented by supervisor

  	
   

  	
  As documented by supervisor

  

 

2

 

Incentive
goals for Enterprise Risk Management participants in Tiers I, II and III
are summarized in the following table with more detail following in Appendix A

 

	
   

  	
   

  	
  Weight

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Goal

  	
   

  	
  Tier I

  	
   

  	
  Tiers II & III

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Excess

  
	
  Pre-assessment
  Core Net Income

  	
   

  	
  10%

  	
   

  	
  5%

  	
   

  	
  $212.0 MM

  	
   

  	
  $249.0 MM

  	
   

  	
  $286.0 MM

  
	
  Member
  Outreach

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  45% of membership

  	
   

  	
  60% of membership

  	
   

  	
  75% of membership

  
	
  Advance
  Restructures

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  125

  	
   

  	
  150

  	
   

  	
  175

  
	
  Growth
  in Membership

  	
   

  	
  5%

  	
   

  	
  5%

  	
   

  	
  4 New Members

  	
   

  	
  6 New Members

  	
   

  	
  8 New Members

  
	
  2010
  Average CDA and ESA Advances Balances

  	
   

  	
  10%

  	
   

  	
  10%

  	
   

  	
  $2.5 Billion

  	
   

  	
  $2.619 Billion

  	
   

  	
  $2.852 Billion

  
	
  Remediation
  of 2009 Report of Examination Findings

  	
   

  	
  30%

  	
   

  	
  25%

  	
   

  	
  70% Clearance

  	
   

  	
  85% Clearance

  	
   

  	
  100% Clearance

  
	
  Individual,
  Department-Specific Component

  	
   

  	
  0%

  	
   

  	
  15%

  	
   

  	
  As defined

  	
   

  	
  As defined

  	
   

  	
  As defined

  
	
  Discretionary
  Component

  	
   

  	
  25%

  	
   

  	
  20%

  	
   

  	
  As documented by supervisor

  	
   

  	
  As documented by supervisor

  	
   

  	
  As documented by supervisor

  

 

3

 

Incentive Opportunity

 

Eligible participants will be assigned an incentive award opportunity
that combines short and long-term incentives and is expressed as a percentage
of the incumbent’s 2010 actual annual base salary, as illustrated in the chart
below.

 

	
   

  	
   

  	
  Combined Short and Long-Term Incentive

  	
   

  
	
   

  	
   

  	
  Opportunity as a Percent of Base Salary

  	
   

  
	
   

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Excess

  	
   

  
	
  President

  	
   

  	
  15.00

  	
  %

  	
  30.00

  	
  %

  	
  45.00

  	
  %

  
	
  Tier I

  	
   

  	
  11.00

  	
  %

  	
  22.00

  	
  %

  	
  33.0

  	
  %

  
	
  Tier II

  	
   

  	
  8.75

  	
  %

  	
  17.50

  	
  %

  	
  26.25

  	
  %

  
	
  Tier III

  	
   

  	
  6.25

  	
  %

  	
  12.50

  	
  %

  	
  18.75

  	
  %

  

 

Goal achievement and individual awards for the goals on pages two and
three will be calculated at the conclusion of 2010 based on results as of December 31,
2010.  Participants will be eligible to
receive sixty (60) percent of such award in a cash payment, subject to the
final approval of the board and the review of the Federal Housing Finance
Agency (FHFA), if required, on the first pay day in March 2011.  Except as otherwise described under EIP
Administration, the participant must be employed by the Bank on the date of
payment of the award to receive the award.  
The chart below illustrates the Threshold, Target and Excess payout
potentials for this short-term award, by tier.

 

	
  2010 Short-Term Incentive Opportunity

  	
   

  
	
  Tier

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Excess

  	
   

  
	
  President

  	
   

  	
  9.00

  	
  %

  	
  18.00

  	
  %

  	
  27.00

  	
  %

  
	
  Tier
  I

  	
   

  	
  6.60

  	
  %

  	
  13.20

  	
  %

  	
  19.80

  	
  %

  
	
  Tier
  II

  	
   

  	
  5.25

  	
  %

  	
  10.50

  	
  %

  	
  15.75

  	
  %

  
	
  Tier
  III*

  	
   

  	
  6.25

  	
  %

  	
  12.50

  	
  %

  	
  18.75

  	
  %

  

 

*100% of payout
opportunity to be paid following year-end 2010; no long-term opportunity

 

Participants will be eligible to receive the remaining forty (40)
percent of the award opportunity as cash on the first pay day in March 2013,
if the following conditions are satisfied:

 

·                  The Bank’s Retained Earnings at year-end 2012
are at a minimum of $400 million less dividends paid in 2010 through 2012, and

·                  The participant is in employment with the
Bank on the payment date, as described below in EIP Administration, and

·                  Subject to the final approval of the board
and review of the FHFA, if required:

 

The chart below illustrates the Threshold, Target and Excess payout
potentials for the long-term award described above, by tier.

 

4

 

	
  2010 Long-Term Incentive Opportunity Payable after
  Year-End 2012

  	
   

  
	
  Tier

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Excess

  	
   

  
	
   

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  
	
  President

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  6.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  12.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  18.0

  	
  %

  
	
  Tier
  I

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  4.4

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  8.8

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  13.2

  	
  %

  
	
  Tier
  II

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  3.5

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  7.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  10.5

  	
  %

  
	
  Tier
  III

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  

 

Eligible
Participants

 

The
following individuals are participants in the EIP for 2010:

 

	
  President

  	
   

  	
  Tier I

  	
   

  	
  Tier II

  	
   

  	
  Tier III

  
	
  Edward A.
  Hjerpe, III

  	
   

  	
  Janelle K. Authur

  	
   

  	
  Daniel H. Devine

  	
   

  	
  Bryan Gulachenski

  
	
   

  	
   

  	
  Earl W. Baucom

  	
   

  	
  Brian G. Donahue

  	
   

  	
  Paul T. Pouliot

  
	
   

  	
   

  	
  George H. Collins*

  	
   

  	
  John F.
  Henderson, Jr.*

  	
   

  	
  Allison Santoro

  
	
   

  	
   

  	
  M. Susan Elliott

  	
   

  	
  Kelly A. LaCava

  	
   

  	
  Edward A. Schultze*

  
	
   

  	
   

  	
  Frank Nitkiewicz

  	
   

  	
  Rachele McDonough

  	
   

  	
  Kenneth A. Willis

  
	
   

  	
   

  	
  General Counsel

  	
   

  	
  Paul Peduto

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Kevin Whittaker*

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Technology
  Officer

  	
   

  	
   

  

 

*Denotes participant in
Enterprise Risk Management Department

 

EIP Administration

 

The EIP is administered by the Personnel Committee of the Board of
Directors (Committee), which shall have full power and binding authority to
construe, interpret, and administer the EIP, and to adjust it for extraordinary
circumstances.  Extraordinary circumstances
may include changes in business strategy, termination or commencement of
business lines, impact of severe economic fluctuations, significant growth or
consolidation of the membership base, or significant regulatory or other
changes impacting the Bank or Bank System.

 

The Committee reserves the right at any time to amend, suspend or
terminate the EIP in whole or in part, for any reason, and without the consent
of any EIP participant.

 

The Bank’s President and Chief Executive Officer will determine
participation in the EIP with the concurrence of the Committee.

 

EIP awards shall not be considered earned or payable, in whole or in
part, to any participant for any reason until they are finally determined by
the Bank’s President and Chief Executive Officer with the concurrence of the
Committee following the end of the plan years.

 

Any individual hired or promoted into an eligible position during 2010 that
is granted an award shall have any such incentive award prorated based on
months of EIP participation, providing

 

5

 

he/she has served a minimum of six months in that role in 2010 and
otherwise satisfies the EIP’s requirements.

 

Except as described below, any EIP participant who terminates
employment for any reason, whether voluntarily or involuntarily, before the
applicable award payment date will not be entitled to any award, except as
otherwise determined by the Bank’s President and Chief Executive Officer, with
the concurrence of the Committee, at their sole discretion and subject to
review of the FHFA, if required(1).

 

·                  EIP participants who terminate employment
with the Bank by reason of death or disability or who are eligible to retire(2) from
employment with the Bank prior to the March 2011 short-term award payment
date may receive a pro rata payment of the sixty (60) percent short-term
incentive opportunity as determined and recommended by the Bank’s President and
Chief Executive Officer, with the concurrence of the Committee and at their
sole discretion and subject to the review of the FHFA, if required, based on
the months of completed service as an EIP participant during 2010.  To be eligible, the participant must complete
at least six months of service in 2010 and otherwise satisfy the EIP’s
requirements. Participants who die, become disabled, or retire during 2010 will
not be eligible for any long-term incentive award.

 

·                  EIP participants who terminate employment
with the Bank by reason of death or disability prior to the long-term award
payment date in March 2013, or who terminate prior to the long-term award
payment date and are eligible to retire from employment with the Bank, may
become eligible to receive a pro rata payment of the forty (40) percent
long-term incentive opportunity based on the number of months of completed
service as an EIP participant during the two year period following the plan
year, subject to the granting of awards based on 2012 year-end results
described above, the recommendation of the Bank’s President and Chief Executive
Officer, with the concurrence of the Committee and at their sole discretion,
and subject to review of the FHFA, if required.

 

Awards to retiring or disabled participants or beneficiaries will be
paid at the same time as awards to all active participants.  Beneficiaries of such payments will be the
same as identified in the Bank’s group insurance plan.

 

The Bank may make such provisions, as it deems appropriate, for
withholding payroll taxes in connection with payment of EIP awards.

 

(1) Where the EIP refers to the participant’s termination of employment
for purposes of receiving any payment, whether such a termination has occurred
will be determined in accordance with Section 409A of the Internal Revenue
Code and applicable regulations thereunder.

(2) Eligibility to retire is defined as employees who are i)
eligible for normal retirement as defined in the Pentegra Defined Benefit Plan
for Financial Institutions or ii) meet the Rule of 70 as defined in the
Pentegra Defined Benefit Plan for Financial Institutions, including credited
service in the FHLB system, but excluding any other credited service at another
Pentegra participating employer.

 

6

 

The Bank also has several other incentive programs for staff at the
Bank designed to motivate employees to become more innovative and productive.
The Bank’s President and Chief Executive Officer is responsible for the
administration of each of these programs and has the authority to construe,
implement, and administer programs, as appropriate.

 

7

 

Appendix A — Goal Definitions

 

Profitability
Goal

 

Pre-assessment
Core Net Income =

Net
Income – (Prepayment Fees – Historical Prepayment Fee Amortization)

+
(Debt Retirement Costs – Historical Debt Retirement Cost Amortization)

–
Net Fair Value Adjustments + OTTI Credit Losses + REFCorp Expense + AHP Expense

 

Net Income = 2010 net income reported in accordance
with GAAP in the United States.

 

Historical Prepayment Fee Amortization = the
current-period, straight-line amortization of all historical prepayment fees (whether
recognized at time of prepayment or as a yield adjustment on a modified loan) over
the original remaining lives of the prepaid assets.

 

Historical Debt Retirement Cost Amortization = the
current-period, straight-line amortization of all historical debt retirement
costs over the original remaining lives of the retired liabilities.

 

Net Fair Value Adjustments = the net unrealized
gains and losses as recognized under GAAP attributable to hedges, whether
economic hedges or SFAS 133-qualifying hedges, plus trading securities gains
and losses.

 

OTTI
Credit Losses = the absolute value of the full-year amount of the credit loss
portion of overall losses attributable to other-than-temporary impairments of
securities.

 

In
the event that the Bank is required to adjust current period net income to
correct prior period accounting errors, positive adjustments to net income
resulting from the correction of prior period accounting errors are to be
excluded from Pre-assessment Core Net Income, while negative adjustments are to
be retained in Pre-assessment Core Net Income.

 

The exclusion of
prepayment fee income and associated debt retirement and swap unwind expense
from the Pre-assessment Core Net Income metric removes the potential for “windfall”
compensation in the event of heavy prepayment fee income and removes a
potential disincentive to prudently respond to prepayment events by excluding
the otherwise punitive cost of debt retirement and swap unwind expense.  The exclusion of net unrealized fair value
adjustments is consistent with the way that management projects its financial
performance and reflects the fact that these adjustments are merely timing
adjustments to net income that have no net impact to the Bank’s net income if
gains or losses are never realized.  OTTI
Credit Losses are excluded from Pre-assessment Core Net Income because they
cannot be controlled by management.

 

8

 

Member
Outreach Goal

EIP
participants, individually or as groups, will meet during the year with
representatives from member institutions to develop Bank/member relationships
and create new business opportunities. These meetings can range from one-on-one
meetings to large group meetings.

 

Advance
Restructures Goal

To
address member need to extend liabilities without increasing funding
liabilities, the Bank introduced in late 2009 the Advance Restructuring
solution, which allows members to extend the maturities of their current
advances without booking prepayment fees in the current period.    This
goal will be measured by the number of individual advances restructured during
2010 through the Bank’s Advances Restructuring product or as part of a
member-directed restructure which does not blend the prepayment fee into the
new advance interest rate.

 

Mission-Related
Advances Goal

The
focus of the mission-related metric will be to expand member lending activities
in the communities they serve through the Bank’s Community Development Advances
(CDA) and Economic Stimulus Advance (ESA). (i)

 

Remediation
of 2009 Report of Examination Findings Goal

To achieve the required
improvement in the 2010 FHFA Examination, the exam goal requires that
management work towards clearance of the 2009 Examination findings that
identified weaknesses. We have targeted the 2009 weakness findings, and have
established awards of 70% clearance for a threshold award, 85% clearance for a
target award, and 100% clearance for an excess award.  While management has put in place remediation
plans and in many cases has already implemented the plans, this component of
the EIP recognizes both the need to ensure ongoing improvement and the need to
address not only the specifics of the 2009 findings, but also the broad-based
intent on the part of the finding.  For
the purposes of this goal, the term clearance is defined as a 2009 finding not
being repeated as a weakness in the 2010 examination.

 

Individual,
Department-Specific Component

EIP participants are
responsible for significant department-specific initiatives and projects that
contribute to the success of the bank. The Individual, Department-Specific
Component provides for recognition of the participant’s successful completion
of those initiatives.

 

Payments awarded under the
Individual, Department-Specific Component will take into consideration the
participant’s achievement of one to three individual, department-specific
initiatives, established at the beginning of the plan year. The initiatives may
be non-financial, operational objectives or may add additional weight to a
profitability or growth goal. Revisions to these initiatives may be considered
on a case-by-case basis during the year but must be approved, in writing, by
the President and Chief Executive Officer.

 

Payments under the Individual,
Department-Specific Component will be based on the individual’s combined,
overall performance on the one to three individual, department-specific
initiatives, as evaluated by the participant’s manager.  The initiatives may be shared within a department
or across multiple departments, but the manager’s assessment will be based on
the participant’s individual contribution as well as the overall achievement of
the initiative.

 

9

 

Managers may select a payout
percentage for individual, department-specific objectives from a range of
threshold to a maximum payout at excess to recognize the degree to which the
EIP participant accomplished these results. 
If the individual, department-specific initiative(s) are not
substantially achieved, the manager may award zero for this component.  Managers need to provide reasonable
documentation as the basis for any award recommended under this component.

 

Discretionary Component

It is understood that the
success of the bank in achieving its goals as set forth in the Plan requires
individual contribution.  Payments
awarded under the Discretionary Component will take into consideration and
recognize an individual participant’s achievement of and contribution toward
Bank, department, or individual goals or initiatives, as assessed by the
President and Chief Executive Officer or the participant’s manager and
recommended to the Personnel Committee.

 

For Tier I participants,
the Discretionary Component may include the President and Chief Executive
Officer’s or the manager’s assessment of achievement of a participant’s
individual and department-specific goals, including operational initiatives,
established at the beginning of the plan year. 
It also may include an evaluation of the participant’s contributions in
areas such as expense control and operational efficiency, risk management and
control, Board communication, and succession planning.  There may also be a subjective element in
this component so that the President and Chief Executive Officer or manager can
award a participant’s leadership, work ethic, attitude, or other such similar
intangible attribute that contributes to the Bank’s success.

 

The President and Chief
Executive Officer or participant’s manager may recommend a payout percentage
for the Discretionary Component from a range of threshold to a maximum payout
at excess to recognize the degree of achievement and contribution.  The President and Chief Executive Officer or
manager may also recommend zero award for this component.  The President and Chief Executive Officer or
manager needs to provide reasonable documentation to the Personnel Committee
that states the basis for whatever award is recommended under the Discretionary
Component for Tier I participants.

 

For
Tier II and III participants, the manager will assess, recommend and document a
payout percentage as discussed above for Tier I participants, as applicable,
but excluding the achievement of the one to three individual,
department-specific initiatives awarded under the Individual,
Department-Specific Component.

 

For the President and
Chief Executive Officer, the Personnel Committee will assess, recommend and
document a payout percentage as discussed above for Tier I participants. At the
end of the plan year, the President and Chief Executive Officer will provide
the Personnel Committee with a self-assessment of individual, Bank and personal
achievements to be used in determining the Discretionary Component award.

 

10

 

(i) This
goal is measured using the following advance product types:  868, 877, 878, 879, 903, 904, 905, 910, 913,
914 and 915 and any new housing and community development product codes
introdued during the Plan year.

 

11Exhibit 10.84

 

SECOND EXECUTIVE
SALARY CONTINUATION AGREEMENT

 

This Second Executive Salary Continuation Agreement (the “Agreement”) is made effective April 1, 2010 (the “Effective Date”), and is entered into by and between Central
Valley Community Bank (the “Bank”) and Tom
Sommer (the “Executive”), each a “Party” and together the “Parties.”

 

RECITALS

 

A.                                   The
Executive is a valued executive of the Bank, and currently serves as the Bank’s
Senior Vice President and Chief Credit Officer.

 

B.                                     The
Bank’s Board of Directors (the “Board”) has
determined that the Executive’s services to the Bank are valuable.  The Bank and the Executive desire to enter
into this Agreement under which the Bank has agreed to make certain payments to
the Executive at retirement.  These
payments shall be in addition to Executive’s right to payments under that
certain Executive Salary Continuation Agreement dated March 1, 2007, as
amended on March 1, 2008 (the “First Salary Continuation
Agreement”).

 

C.                                     The
Parties intend that this Agreement shall constitute an unfunded arrangement
maintained primarily to provide supplemental retirement benefits for the
Executive under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).  The parties further intend that this
Agreement shall constitute a nonqualified deferred compensation arrangement
under the Internal Revenue Code (“Code”).  The Executive is fully advised of the Bank’s
financial status and has had substantial input in the design of and benefits
provided under this Agreement.

 

AGREEMENT

 

In consideration of the mutual promises, covenants, and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

I.                                         EMPLOYMENT

 

The Bank agrees to employ the Executive in such capacity as the Bank
may from time to time determine. The Executive will continue in the employ of
the Bank in such capacity and with such duties and responsibilities as may be
assigned to him, and with such compensation as may be determined from time to
time by the Board. At all times, unless modified in writing, the Executive’s
employment shall be at-will.  Subject to
the terms of this Agreement, either the Bank or the Executive may terminate the
employment relationship at any time, for any reason or for no reason.

 

II.                                     FRINGE BENEFITS

 

The salary continuation benefits provided by this Agreement are granted
by the Bank as a fringe benefit to the Executive and are not part of any salary
reduction plan or an arrangement deferring a bonus or a salary increase. The
Executive has no option to take any current payment or bonus in lieu of salary
continuation benefits.

 

 

III.                                 RETIREMENT BENEFIT AND EARLY RETIREMENT BENEFIT

 

For
purposes of this section, “Retirement” and
“Retire” mean that the Executive remains
in the continuous employ of the Bank from the Effective Date and then retires
from active employment (and his Employment Terminates) with the Bank, after April 1,
2013.

 

A.            Retirement
Benefit.

 

If the Executive Retires on or after April 1,
2016, the Bank shall pay the Executive an annual retirement benefit equal to
Ten Thousand Dollars and No/100 ($10,000.00), in equal monthly installments
(each of which shall be 1/12 of the annual benefit), for a period of one
hundred and eighty (180) months, commencing on the first day of the month
following the date of the Executive’s Retirement.  Beginning with the thirteenth month that
benefits are paid, and continuing thereafter until paid in full, the annual
benefit shall be increased each year by three percent (3%) from the previous
year’s benefit to account for cost of living increases.  In the event of the Executive’s death prior
to the date all payments have been made, Section IV of this Agreement
shall control. Any benefit payable under this Section shall be subject to
reduction or elimination as provided in Sections VII or VIII.

 

B.            Early
Retirement Benefit.

 

If the
Executive Retires on or after April 1, 2013 and prior to April 1,
2016, the Bank shall pay the Executive an annual early retirement benefit,
based on the month of retirement, equal to:

 

	
  Retirement

  	
   

  	
  Annual

  	
   

  	
  Retirement

  	
   

  	
  Annual

  	
   

  	
  Retirement

  	
   

  	
  Annual

  	
   

  
	
  Month

  	
   

  	
  Amount

  	
   

  	
  Month

  	
   

  	
  Amount

  	
   

  	
  Month

  	
   

  	
  Amount

  	
   

  
	
  Apr 2013

  	
   

  	
  $

  	
  5,000.00

  	
   

  	
  May 2014

  	
   

  	
  $

  	
  6,805.56

  	
   

  	
  Jun
  2015

  	
   

  	
  $

  	
  8,611.11

  	
   

  
	
  May 2013

  	
   

  	
  $

  	
  5,138.89

  	
   

  	
  Jun
  2014

  	
   

  	
  $

  	
  6,944.44

  	
   

  	
  Jul
  2015

  	
   

  	
  $

  	
  8,750.00

  	
   

  
	
  Jun 2013

  	
   

  	
  $

  	
  5,277.78

  	
   

  	
  Jul
  2014

  	
   

  	
  $

  	
  7,083.33

  	
   

  	
  Aug
  2015

  	
   

  	
  $

  	
  8,888.89

  	
   

  
	
  Jul 2013

  	
   

  	
  $

  	
  5,416.67

  	
   

  	
  Aug
  2014

  	
   

  	
  $

  	
  7,222.22

  	
   

  	
  Sep
  2015

  	
   

  	
  $

  	
  9,027.78

  	
   

  
	
  Aug 2013

  	
   

  	
  $

  	
  5,555.56

  	
   

  	
  Sep
  2014

  	
   

  	
  $

  	
  7,361.11

  	
   

  	
  Oct
  2015

  	
   

  	
  $

  	
  9,166.67

  	
   

  
	
  Sep 2013

  	
   

  	
  $

  	
  5,694.44

  	
   

  	
  Oct
  2014

  	
   

  	
  $

  	
  7,500.00

  	
   

  	
  Nov
  2015

  	
   

  	
  $

  	
  9,305.56

  	
   

  
	
  Oct 2013

  	
   

  	
  $

  	
  5,833.33

  	
   

  	
  Nov
  2014

  	
   

  	
  $

  	
  7,638.89

  	
   

  	
  Dec
  2015

  	
   

  	
  $

  	
  9,444.44

  	
   

  
	
  Nov 2013

  	
   

  	
  $

  	
  5,972.22

  	
   

  	
  Dec
  2014

  	
   

  	
  $

  	
  7,777.78

  	
   

  	
  Jan
  2016

  	
   

  	
  $

  	
  9,583.33

  	
   

  
	
  Dec 2013

  	
   

  	
  $

  	
  6,111.11

  	
   

  	
  Jan
  2015

  	
   

  	
  $

  	
  7,916.67

  	
   

  	
  Feb
  2016

  	
   

  	
  $

  	
  9,722.22

  	
   

  
	
  Jan 2014

  	
   

  	
  $

  	
  6,250.00

  	
   

  	
  Feb
  2015

  	
   

  	
  $

  	
  8,055.56

  	
   

  	
  Mar
  2016

  	
   

  	
  $

  	
  9,861.11

  	
   

  
	
  Feb 2014

  	
   

  	
  $

  	
  6,388.89

  	
   

  	
  Mar
  2015

  	
   

  	
  $

  	
  8,194.44

  	
   

  	
  Apr
  2016

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  Mar 2014

  	
   

  	
  $

  	
  6,527.78

  	
   

  	
  Apr
  2015

  	
   

  	
  $

  	
  8,333.33

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr 2014

  	
   

  	
  $

  	
  6,666.67

  	
   

  	
  May 2015

  	
   

  	
  $

  	
  8,472.22

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The
early retirement benefit shall be paid in lieu of any other benefit under this
Agreement, in equal monthly installments (each of which shall be 1/12 of the
annual benefit) for a period of one hundred and eighty (180) months, commencing
on the first day of the month following the date of the Executive’s
Retirement.  Beginning with the
thirteenth month that benefits are paid, and continuing thereafter until paid
in full, the annual benefit shall be increased each year by three percent (3%)
from the previous year’s benefit to account for cost of living increases.  In the event of the Executive’s death prior
to the date all payments have been made, Section IV of this Agreement
shall control.  Any benefit payable under
this Section shall be subject to reduction or elimination as provided in
Sections VII or VIII.  If the Executive
Retires before April 1, 2013, this Agreement shall immediately terminate
and the Executive shall not be entitled to receive any benefits under this
Agreement.

 

 

IV.                                DEATH BENEFIT

 

In the event of the Executive’s death, whether
or not Executive has already begin to receive payments under this Agreement,
the Bank shall pay to the Designated Beneficiary a lump sum amount equal to
Executive’s Accrual Balance (or remaining Accrual Balance, as the case may be)
in lieu of any other benefit under this Agreement.  The term “Accrual
Balance” means the liability accrued by the Bank under Generally
Accepted Accounting Principles for the Bank’s obligation to the Executive under
this Agreement, applying the discount rate described in Section X(L).  The Accrual Balance shall be calculated on a
monthly basis.  The term “Designated Beneficiary” means the person, entity, or estate
of the Executive, designated by the Executive to receive any benefits that may
become payable under this Agreement following the Executive’s death, provided
that if there is no Designated Beneficiary, then the Executive’s Designated
Beneficiary shall be the Executive’s surviving spouse, i.e.,
the person to whom the Executive was legally married on the date of death.  If there is no surviving spouse, then the
Designated Beneficiary shall be the Executive’s estate.

 

V.                                    TERMINATION OF EMPLOYMENT AND DISABILITY

 

“Termination of Employment”
or “Employment Terminates” means that the
Executive’s employment with the Bank is terminated and the Executive actually
separates from service with the Bank and does not continue in his prior
capacity.  Termination of Employment does
not include the Executive’s military leave, sick leave or other bona fide leave
of absence (such as temporary employment with the government) if the period of
leave does not exceed six months, or if longer, so long as his right to
reemployment with the Bank is provided either in contract or by statute.  Notwithstanding the foregoing, Executive’s
employment shall be deemed to have terminated, and Executive shall have
suffered an Employment Termination, when the Parties reasonably anticipate that
Executive will have a permanent reduction in the level of bona fide services
provided to the Bank, to a level of service that is less than fifty percent
(50%) of the average level of bona fide services provided by Executive to the
Bank in the immediately preceding thirty-six (36) month period. Notwithstanding
anything to the contrary, the terms “Termination of Employment”
and “Employment Terminates” shall be
construed in accordance with Code Section 409A, together with regulations
and guidance promulgated thereunder, as amended from time to time (collectively
referred to as “Code Section 409A”).

 

A.            Voluntary
Termination of Employment.

 

In the event of the Executive’s Voluntary
Termination prior to Retirement or prior to a Change In Control, this Agreement
shall immediately terminate and the Executive shall not be entitled to receive
any benefits under this Agreement.  “Voluntary Termination” means the Executive’s Employment
Terminates prior to Retirement by Executive’s voluntary action.

 

 

B.            Involuntary Termination of
Employment.

 

In the event of the Executive’s Involuntary Termination prior to
Retirement, the Bank shall pay the Executive an involuntary termination
benefit, in lieu of any other benefit under this Agreement.  The involuntary termination benefit shall be
an amount equal to the present value (determined as of the first day of the
month in which Involuntary Termination occurs) of the annual early retirement
benefit that Executive would have received for fifteen (15) years had Executive
Retired on the first day of the month in which Involuntary Termination occurs,
as described in Section III(B) above. 
The involuntary termination benefit shall be paid in a lump sum,
determined by using the assumptions set forth in Section X(L) and the
payment shall be made on the date the Executive attains age sixty-five
(65).  “Involuntary
Termination” means the Executive’s
Employment Terminates by action of the Bank prior to Retirement, and such
Termination of Employment is not For Cause.  
Any benefit payable under this Section shall be subject to
reduction or elimination as provided in Sections VII or VIII.

 

C.            Termination
of Employment For Cause.

 

In the
event the Executive’s Employment Terminates For Cause prior to Retirement, then
this Agreement shall immediately terminate and the Executive shall forfeit all
benefits and shall not be entitled to receive any benefits under this
Agreement.  “For Cause”
shall mean any of the following actions by the Executive that result in an
adverse effect on the Bank: (1) gross negligence or gross neglect; (2) the
commission of a felony or gross misdemeanor involving moral turpitude, fraud,
or dishonesty; (3) the willful violation of any law, rule, or regulation
(other than a traffic violation or similar offense); (4) an intentional
failure to perform stated duties; or (5) a breach of fiduciary duty involving
personal profit.  If a dispute arises as
to whether Termination of Employment was For Cause, such dispute shall be
resolved by arbitration as set forth in this Agreement.

 

D.            Disability.

 

In the event the Executive becomes Disabled on
or after April 1, 2013 and prior to Retirement or Termination of
Employment, and Executive’s Employment Terminates because of such Disability,
the Bank shall pay the Executive an annual disability benefit in an amount
determined by calculating the annual amount payable if the Executive’s Accrual
Balance, determined as of the first day of the month in which the Executive’s
Employment Terminates due to Disability, is paid over fifteen (15) years with
interest accruals.  The Accrual Balance
shall be calculated on a monthly basis as described in Section IV above.

 

The disability benefit shall be paid in lieu
of any other benefit under this Agreement, in equal monthly installments (each
of which shall be 1/12 of the annual benefit) for a period of one hundred and
eighty (180) months, commencing on the first day of the month following the
date of the Executive’s Termination of Employment.  Beginning with the thirteenth month that
benefits are paid, and continuing thereafter until paid in full, the annual
benefit shall be increased each year by three percent (3%) from the previous
year’s benefit to account for cost of living increases.  In the event of the Executive’s death prior
to the date all payments have been made, Section IV of this Agreement
shall control. Any benefit payable under this Section shall be subject to
reduction or elimination as provided in Sections VII or VIII.

 

 

“Disabled” or “Disability” shall mean that the Executive (1) is unable
to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months; or (2) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan covering
Bank employees.  If there is a dispute
regarding whether the Executive is Disabled, such dispute shall be resolved by
a mutually agreeable physician. Such resolution shall be binding upon all
Parties to this Agreement.  The
determination of Disability shall be made in a uniform and nondiscriminatory
manner applied to all Bank employees under similar circumstances.  Notwithstanding anything to the contrary, the
term “Disability” shall be construed in
accordance with Code Section 409A.

 

VI.                                CHANGE IN CONTROL

 

Upon a
Change In Control, the Bank shall pay the Executive a lump sum payment equal to
the present value (calculated using the assumptions set forth in Section X(L),
determined as of the date of payment) of one hundred percent (100%) of the
benefit that the Executive would have received under Section III(A) had
the Executive been employed by the Bank until April 1, 2016.  The lump sum payment shall be made on the
first day of the month following the date of Change In Control.  Change In Control benefit projections are
included in Exhibit A attached hereto. 
The payment of a lump sum pursuant to this Section shall be in lieu
of any other benefit under this Agreement. 
Any benefit payable under this Section shall be subject to
reduction or elimination as provided in Sections VII, VIII and XIII.

 

A “Change In Control” shall be deemed
to have occurred on the date that any one person, or more than one person
acting as a group, acquires ownership of stock of the Bank that, together with
stock held by such person or group, constitutes more than fifty percent (50%)
of the total fair market value or total voting power of the stock of the
Bank.  However, if any one person or more
than one person acting as a group, is considered to own more than fifty percent
(50%) of the total fair market value or total voting power of the stock of the
Bank, the acquisition of additional stock by the same person or persons will
not be considered to cause a Change In Control. 
Further, an increase in the percentage of stock owned by any one person,
or persons acting as a group, as a result of a transaction in which the Bank
acquires its stock in exchange for property will not be considered to cause a
Change In Control.  Transfers of Bank
stock on account of death, gift, transfers between family members or transfers
to a qualified retirement plan maintained by the Bank shall not be considered
in determining whether there has been a Change In Control.  For purposes of this Section, the term “Bank” shall include any holding company, meaning any
corporation that is a majority shareholder of the Bank.  A “Change In Control”
shall be interpreted in accordance with the definition of “Change in
Ownership” under Code Section 409A, and to the extent that an
event or series of events does not constitute a “Change in
Ownership” under Code Section 409A, the event or series of
events will not constitute a “Change In Control”
under this Agreement.

 

 

VII.                            SPECIFIED
EMPLOYEE REQUIREMENTS

 

A.            Six-Month
Delay.

 

Notwithstanding anything to the contrary, if Executive is a Specified
Employee as of the date of Termination of Employment, payments under this
Agreement upon Termination of Employment may not be made before the date that
is six months after Termination of Employment (or, if earlier than the end of
the six-month period, the date of death of the Executive).  Payments to which the Executive would
otherwise be entitled during the first six months following Termination of
Employment, but for this Six-Month Delay provision, shall be accumulated and
paid on the first day of the seventh month following Termination of Employment.

 

B.            Specified
Employee.

 

Executive shall be deemed to be a “Specified Employee”
if, as of the date of Executive’s Termination of Employment, Executive is a Key
Employee of the Bank and the Bank has stock which is publicly traded on an
established securities market or otherwise.

 

C.            Key
Employee.

 

If Executive meets each of the requirements of Internal Revenue Code Section 416(i)(1)(A)(i),
(ii), or (iii) (applied in accordance with the regulations thereunder and
disregarding section 416(i)(5)) at any time during a twelve month period ending
on December 31 (the “Specified Employee
Identification Date”), then Executive shall be treated as a Key
Employee for the entire twelve month period beginning on the following April 1.  Such April 1 date shall be the “Specified Employee Effective Date” for purposes of Section 409A.

 

VIII.                        TARP
RESTRICTIONS

 

A.            Notwithstanding
anything to the contrary, the benefits provided in this Agreement shall be
subject at all times to the Emergency Economic Stabilization Act of 2008, as
modified or amended from time to time, including the American Recovery and
Reinvestment Act of 2009 (“EESA”) and the
rules, regulations and guidance issued under EESA from time to time (the “EESA Guidance”).  The “EESA Guidance” shall include, without limitation, the rules and
regulations issued from time to time by the Department of the Treasury (the “Department”), including the TARP Standards for Corporate
Governance issued under 31 CFR Part 30 as published in the Federal
Register on June 15, 2009, as amended from time to time.

 

B.            Executive
is currently, or may in the future become, subject to the provisions of EESA
and/or the EESA Guidance for the period required by EESA and the EESA
Guidance.  Executive expressly
acknowledges, understands and agrees that Executive’s rights to payments and
compensation under this Agreement, under the First Salary Continuation
Agreement and under any other compensation plan or arrangement of the Bank
(this Agreement, the First Salary Continuation Agreement and any and all such
arrangements, collectively, the “Benefit Plans”)
will or may in the future be limited or forfeited to ensure that such Benefit
Plans comply with and are administered in accordance with the provisions of
EESA and the EESA Guidance.

 

 

C.            In
accordance with EESA and the EESA Guidance, the compensation payable to the
Executive under this Agreement may be subject to (i) the clawback of any
bonus, retention or incentive compensation paid or granted to the Executive
under any Benefit Plan based on statements of earnings, revenues, gains or
other criteria that are later found to be materially inaccurate or as otherwise
provided under the EESA Guidance; and (ii) the potential for the
reduction, elimination or forfeiture of the amounts payable to the Executive
under this Agreement or otherwise as a result of the limitations on golden
parachute payments under EESA and the EESA Guidance.

 

D.            Executive
hereby expressly consents to any modifications and limitations of this Agreement
and any other Benefit Plan to the extent necessary to ensure compliance with
EESA and the EESA Guidance, and voluntarily waives any claim against the Bank
or its affiliates for any changes to the Executive’s compensation or benefits
that are required in order to comply with EESA or the EESA Guidance.

 

IX.                                RESTRICTIONS
ON FUNDING

 

The Bank shall have no obligation to set aside, earmark or entrust any
fund or money with which to pay its obligations under this Agreement. To the
extent the Executive or any successor in interest becomes eligible to receive
benefits under this Agreement, he or she shall be and remain simply a general
creditor of the Bank in the same manner as any other creditor having a general
claim for matured and unpaid compensation.  The Bank reserves the absolute right, in its
sole discretion, to purchase life insurance in conjunction with the benefits
provided under this Agreement.  The Bank
further reserves the absolute right, in its sole discretion, to establish a
grantor trust which may be used to hold Bank assets to be maintained as
reserves against the Bank’s unfunded, unsecured obligations hereunder.  Such reserves shall at all times be subject
to the claims of the Bank’s creditors. 
If a trust or other vehicle is established, the Bank’s obligations
hereunder shall be reduced to the extent assets are utilized to meet its
obligations.  Any trust established by
the Bank and the assets held in trust shall conform in substance to the terms
of the model trust described in Revenue Procedure 92-64, 1992-33 IRB 11
(8-17-92).  The Bank reserves the
absolute right, in its sole discretion, to terminate any life insurance
purchased or any grantor trust established for these purposes at any time, in
whole or in part.  At no time shall the
Executive have any lien or right, title or interest in or to any specific
investment or to any assets of the Bank. 
If the Bank elects to invest in a life insurance, disability or annuity
policy upon the life of the Executive, then the Executive shall assist the Bank
by freely submitting to a physical exam and supplying such additional
information necessary to obtain such insurance or annuities.

 

X.                                    MISCELLANEOUS

 

A.            Prohibition
Against Alienation or Assignment.

 

The Executive, his surviving spouse, and any
other beneficiary(ies) under this Agreement shall not have any power or right
to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber in advance any benefit which may become payable hereunder.  

 

 

No benefits shall be subject to seizure for
the payment of any debts, judgments, alimony or separate maintenance owed by
the Executive or the Executive’s beneficiary(ies), or be transferable by
operation of law in the event of bankruptcy, insolvency or otherwise. In the
event the Executive or any beneficiary attempts to assign, commute,
hypothecate, transfer or dispose of the benefits which may become payable
hereunder, the Bank’s liabilities shall forthwith cease and terminate.

 

B.            Binding
Obligation of the Bank and Any Successor in Interest.

 

The Bank shall not merge or consolidate into
or with another bank or sell substantially all of its assets to another bank,
firm or person until such bank, firm or person agrees, in writing, to assume
and discharge the Bank’s duties and obligations under this Agreement. This
Agreement shall be binding upon the Parties, their successors, beneficiaries,
heirs and personal representatives.

 

C.            Amendment
or Revocation.

 

It is agreed by and between the Parties that,
during the lifetime of the Executive, this Agreement may be amended or revoked
at any time or times, in whole or in part, by the mutual written consent of the
Executive and the Bank.

 

D.            Gender.

 

Whenever in this Agreement words are used in
the masculine, feminine or neuter gender, they shall be read and construed as
in the masculine, feminine or neuter gender, whenever they should so apply.

 

E.             Effect
on Other Bank Benefit Plans.

 

Except as provided in Section VIII,
nothing contained in this Agreement shall affect the Executive’s right or shall
create any rights to participate in or be covered by any qualified or
non-qualified pension, profit-sharing, group, bonus or other supplemental
compensation or fringe benefit plan sponsored or offered by the Bank.

 

F.             Headings.

 

Headings and subheadings in this Agreement are
inserted for reference and convenience only and shall not be deemed a part of
this Agreement.

 

G.            Applicable
Law.

 

The validity and interpretation of this
Agreement shall be governed by applicable federal law and the laws of the State
of California.

 

 

H.            12
U.S.C. § 1828(k).

 

Any payments made to the Executive pursuant to
this Agreement, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. § 1828(k) or any regulations promulgated
thereunder.

 

I.              Partial
Invalidity.

 

If any term, provision, covenant, or condition
of this Agreement is determined by an arbitrator or a court to be invalid,
void, or unenforceable, such determination shall not render any other term,
provision, covenant, or condition invalid, void, or unenforceable, and the
Agreement shall remain in full force and effect notwithstanding such partial
invalidity.

 

J.             Not
a Contract of Employment.

 

This Agreement shall not be deemed to
constitute a contract of employment between the Parties, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive, or
restrict the right of the Executive to terminate employment. At all times, the
Executive’s employment shall remain at-will.

 

K.            Effective
Date.

 

This Agreement shall be effective on the
Effective Date specified above.

 

L.             Present
Value.

 

All present value calculations under this
Agreement shall be based on the following discount rate:

 

	
  Discount
  Rate:

  	
   

  	
  The discount
  rate as used in the APB 12 calculations for this Agreement. The initial rate
  shall be six percent (6%).

  

 

M.           Contradiction
in Terms of Agreement and Exhibits.

 

If there is a contradiction in the terms of
this Agreement and the exhibits attached hereto with respect to the benefits
payable, then the terms set forth in the Agreement shall control.

 

XI.                                ERISA PROVISIONS

 

A.            Named
Fiduciary and Plan Administrator.

 

The “Named Fiduciary and Plan
Administrator” of this Agreement shall be Central Valley Community
Bank.  The Board, in its discretion, may
appoint one or more individuals to serve in this capacity.  As Named Fiduciary and Plan Administrator,
the Bank shall be responsible for the management, control and administration of
the Agreement.  The Named Fiduciary may
delegate to others certain aspects of the management and operation, including
the employment of advisors and the delegation of ministerial duties to
qualified individuals.

 

 

B.            Claims
Procedure and Arbitration.

 

In the event a dispute arises with respect to
benefits under this Agreement and the disputed benefits are not paid, then the
Executive or his beneficiaries may make a written claim to the Named Fiduciary
and Plan Administrator named above within sixty (60) days from the date
payments are refused.  The Named
Fiduciary and Plan Administrator shall review the written claim and, if the
claim is denied in whole or in part, they shall respond in writing within sixty
(60) days of receipt of such claim, stating specific reasons for the denial,
and providing references to the provisions of this Agreement upon which the
denial is based and any additional material or information necessary to perfect
the claim.  Such written notice shall
further indicate the additional steps to be taken by claimant(s) if a
further review of the claim is desired. 
A claim shall be deemed denied if the Named Fiduciary and Plan
Administrator fail to take any action within the prescribed sixty (60) day
period.

 

If claimants desire a second review they shall
notify the Named Fiduciary and Plan Administrator in writing within sixty (60)
days of the initial claim denial. 
Claimants may review this Agreement or any documents relating thereto
and submit any written issues and comments that may be appropriate.  In their sole discretion, the Named Fiduciary
and Plan Administrator shall then review the second claim and provide a written
decision within sixty (60) days of receipt of such claim.  This decision shall likewise state the
specific reasons for the decision and shall include reference to specific
provisions of this Agreement upon which the decision is based.

 

If claimants continue to dispute the benefit
denial based upon completed performance of this Agreement or the meaning and
effect of the terms and conditions thereof, then claimants may submit the
dispute to an arbitrator for final arbitration. 
The arbitrator shall be selected by mutual agreement of the Bank and the
claimants.  The arbitrator shall operate
under any generally recognized set of arbitration rules.  The Parties agree that they and their heirs,
personal representatives, successors and assigns shall be bound by the decision
of such arbitrator with respect to any controversy properly submitted to it for
determination.

 

Where a dispute arises as to benefits
forfeited as a result of the Bank’s discharge of the Executive For Cause, such
dispute shall likewise be submitted to arbitration as described above and the
Parties agree to be bound by the arbitrator’s decision.

 

XII.                            TERMINATION OR MODIFICATION OF AGREEMENT BY REASON
OF CHANGES IN THE LAW, RULES OR REGULATIONS

 

The Bank is entering into this Agreement upon the assumption that
certain existing tax laws, rules and regulations will continue in effect
in their current form.  If any such
assumptions should change and the change has a detrimental effect on this
Agreement, then the Bank reserves the right to terminate or modify this
Agreement.  This paragraph shall become
null and void effective immediately upon a Change In Control.

 

 

XIII.                        CODE SECTION 280G

 

Notwithstanding any provision of this Agreement to the contrary, if all
or a portion of any benefit payment under this Agreement, alone or together
with any other compensation or benefit, will be a non-deductible expense to the
Bank by reason of Code Section 280G, the Bank may, in its sole discretion,
reduce the benefits payable under this Agreement as necessary to avoid the
application of Section 280G.  The
Bank shall have the power to reduce benefits payable under this Agreement to
zero, if necessary.

 

XIV.                       COMPETITION AFTER TERMINATION OF EMPLOYMENT

 

The Bank shall not pay any benefit under this Agreement if the
Executive, without the prior written consent of the Bank, engages in, becomes
interested in, directly or indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation, or becomes
associated with, in the capacity of employee, director, officer, principal,
agent, trustee or in any other capacity whatsoever, any enterprise conducted in
the trading area (a 50 mile radius) of the business of the Bank, which enterprise
is, or may deemed to be, competitive with any business carried on by the Bank
as of the date of termination of the Executive’s employment or his Retirement.
This section shall not apply following a Change In Control.

 

XV.                           PROHIBITION AGAINST ACCELERATION

 

Notwithstanding anything to the contrary, neither the time nor
scheduling of payments under this Agreement may be accelerated unless such
acceleration is permissible under Code Section 409A, other applicable law
and the terms of this Agreement.

 

IN WITNESS WHEREOF, the Parties acknowledge that each has carefully
read this Agreement and executed the original on the date written below and
that, upon execution, each has received a conforming copy.

 

	
  BANK:

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
  CENTRAL VALLEY COMMUNITY BANK

  	
   

  	
  TOM SOMMER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Daniel Doyle

  	
   

  	
  /s/ Tom Sommer

  
	
  Name: Daniel Doyle 

  	
   

  	
  Tom Sommer

  
	
  Title: President and Chief Executive
  Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  5/7/10

  
	
  Date:

  	
  5/7/10

  	
   

  	
   

  
						

 

 

Exhibit A

 

 

	
  CLARKCONSULTING

  	
   

  	
  Salary
  Continuation Plan

  	
   

  	
  Plan Year Reporting

  

 

Hypothetical Termination Benefits
Schedule

 

Thomas Leon Sommer

	
  Birth Date: 2/23/1948 

  	
   

  	
  Early
  Voluntary Termination 

  	
   

  	
  Disability

  	
   

  	
  Change
  in Control

  	
   

  
	
  Plan Anniversary Date: 4/1/2011
  

  Normal Retirement: 3/31/2016,  Age 68 

  Normal Retirement Payment: Monthly for15 years

  	
   

  	
  Annual
  Benefit       (3)

  Amount Payable at

  Separation from Service

  	
   

  	
  Annual Benefit         (3)

  Amount Payable at

  Separation from Service

  	
   

  	
  Lump Sum
  Benefit

  Amount Payable at

  Separation from Service

  	
   

  
	
  Values

  	
   

  	
  Discount

  Rate

  	
   

  	
  Benefit

  Level (2)

  	
   

  	
  Accrual

  Balance

  	
   

  	
  Vesting

  	
   

  	
  Based On

  Benefit

  	
   

  	
  Vesting

  	
   

  	
  Based On

  Benefit

  	
   

  	
  Vesting

  	
   

  	
  Based On

  Accrual

  	
   

  
	
  as of

  	
   

  	
  (1)

  	
   

  	
  (2)

  	
   

  	
  (3)

  	
   

  	
  (4)

  	
   

  	
  (5)

  	
   

  	
  (6)

  	
   

  	
  (7)

  	
   

  	
  (8)

  	
   

  	
  (9)

  	
   

  
	
  Apr
  2010(1)

  	
   

  	
  6.00

  	
  %

  	
  10,000

  	
   

  	
   

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  100

  	
  %

  	
  119,088

  	
   

  
	
  Mar
  2011

  	
   

  	
  6.00

  	
  %

  	
  10,000

  	
   

  	
  18,121

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  100

  	
  %

  	
  119,088

  	
   

  
	
  Mar
  2012

  	
   

  	
  6.00

  	
  %

  	
  10,000

  	
   

  	
  37,360

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  100

  	
  %

  	
  119,088

  	
   

  
	
  Mar
  2013

  	
   

  	
  6.00

  	
  %

  	
  10,000

  	
   

  	
  57,786

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  0.00

  	
  %

  	
  0

  	
   

  	
  100

  	
  %

  	
  119,088

  	
   

  
	
  Mar
  2014

  	
   

  	
  6.00

  	
  %

  	
  10.000

  	
   

  	
  77,692

  	
   

  	
  50.00

  	
  %

  	
  5,000

  	
   

  	
  50.00

  	
  %

  	
  5,000

  	
   

  	
  100

  	
  %

  	
  119,088

  	
   

  
	
  Mar
  2015

  	
   

  	
  6.00

  	
  %

  	
  10.000

  	
   

  	
  97,540

  	
   

  	
  66.67

  	
  %

  	
  6,667

  	
   

  	
  66.67

  	
  %

  	
  6,667

  	
   

  	
  100

  	
  %

  	
  119,088

  	
   

  
	
  Mar
  2016

  	
   

  	
  6.00

  	
  %

  	
  10,000

  	
   

  	
  119,088

  	
   

  	
  100.00

  	
  %

  	
  10,000

  	
   

  	
  100.00

  	
  %

  	
  10,000

  	
   

  	
  100

  	
  %

  	
  119,088

  	
   

  

 

	
  (1)

  	
  The first line reflects
  just the initial values as of April 1, 2010.

  
	
   

  	
   

  
	
  (2)

  	
  The benefit amount
  includes a 3.00% guaranteed inflator during the payout period.

  
	
   

  	
   

  
	
  (3)

  	
  Beginning on the first
  anniversary during the applicable installment period and each anniversary
  thereafter, the annual benefit amount shall increase by 3.00%. The annual
  benefit amoun

  will be distributed in
  12 equal monthly payments for a total of 180 monthly payments.

  
	
   

  	
   

  
	
  *

  	
  The purpose of this
  hypothetical illustration is to show the participant’s annual benefit based
  on various termination assumptions. Actual benefits are based on the terms
  and provisions of the plan agreement. Consequently, actual benefits may
  differ from those shown on this Hypothetical Termination Benefits Schedule.

  

 

	
  Salary
  Continuation Plan for Central Valley Community Bank -  Fresno, CA 

  60194 58636 464918 v10.04.06 04/07/2010:08 SCP-E,F

  	
   

  	
   

  	
   

  	
  Securities offered through Clark Securities, Inc., DBA
  CCFS, Inc. in Texas 

  Member FINRA & SIPC, Dallas, TX 75201, (800) 999-3125.

  

 

5

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