Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.7    
  

 
  BUTTE COMMUNITY BANK
  SALARY CONTINUATION AGREEMENT    
  

        This Salary Continuation Agreement (Agreement) is entered into by and between Butte Community Bank (Bank), a state commercial bank located in Paradise,
California, and John Coger (Employee), to be effective as of April 14, 1998. 

 
 

RECITALS    
  

        A.    The
Bank has employed the Employee as the Senior Vice President and Chief Financial Officer since 1990. 

        B.    The
Bank desires to continue to employ the Employee as the Senior Vice President and Chief Financial Officer. 

        C.    In
order to encourage the Employee to remain an employee of the Bank, the Bank is willing to provide salary continuation benefits to the Employee as set forth in this
Agreement. 

 
 

AGREEMENT    
  

        In consideration of the promises and mutual covenants contained herein, the Bank and the Employee agree as follows: 

 
 

ARTICLE 1. GENERAL    
  

1.01.    Purpose. 

        The
purpose of this Agreement is to provide additional deferred compensation benefits to the Employee, who is a member of a select group of management or highly compensated employees, by
providing for the payment of deferred compensation after the Employee's termination of employment provided that the Employee satisfies the conditions set forth in this Agreement. The board of
directors of the Bank has determined that the overall compensation paid to the Employee under this Agreement and the other compensation arrangements provided to the Employee by the Bank is reasonable
compensation for the services rendered and to be rendered to the Bank by the Employee in view of such services and the compensation paid by other employers to their employees under similar
circumstances. 

1.02.    Income Tax Status. 

        The
Agreement is intended to be an unfunded, nonqualified deferred compensation and death benefit plan that is governed by Internal Revenue Code sections 61, 83, 402(b),
404(a)(5), and 451, such that neither the Employee nor the Employee's Beneficiary(ies) will have any taxable income by virtue of the operation of the Agreement earlier than the first taxable year in
which the deferred compensation benefits under the Agreement are paid. 

1.03.    ERISA Status. 

        This
Agreement is intended to qualify as an unfunded plan of deferred compensation that is maintained by an employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees as those terms are defined under the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). It is understood
that the amounts payable to the Employee under this Agreement are strictly from the general assets of the Bank and that the Employee has no greater rights to the general assets of the Bank than any
other unsecured general creditor. Similarly, the Bank may, in its sole and absolute discretion, establish a "rabbi trust" as a means of setting aside a portion of its general assets for the
payment of benefits under this Agreement. However, the Bank shall be under no obligation to establish such a trust nor shall the Bank establish such a trust if its establishment or existence would in
any way 

 

cause this Agreement to be anything other than an unfunded plan of deferred compensation under ERISA. For purposes of ERISA, the Bank shall be the named fiduciary and administrator under this
Agreement. 

1.04.    Limitation Of Rights. 

        Neither
this Agreement, nor any modifications hereof, nor the payment of any benefits hereunder shall be construed as an employment contract, nor as giving to the Employee any right to
be employed by the Bank, nor as modifying the terms of any employment contract between the Employee and the Bank. 

1.05.    Other Agreements. 

        Neither
this Agreement, nor any modifications hereof, nor the payment of any benefits hereunder shall be construed as a modification of any other deferred compensation plan being
maintained by the Bank. Any deferred compensation payable under this Agreement shall not be deemed salary or other compensation to the Employee for the purpose of computing benefits to which the
Employee may be entitled under any pension plan or other arrangement of the Bank for the benefit of its employees. Nothing contained in this Agreement shall affect any right which the Employee may
otherwise have to participate in any other plan of deferred compensation that the Bank may now or hereafter maintain for the benefit of its employees. 

 
 

ARTICLE 2. GENERAL DEFINITIONS    
  

2.01.    Beneficiary. 

        "Beneficiary"
means the person entitled to receive benefits under the Agreement in the event of the death of the Employee, as designated by the Employee on such form as is acceptable to
and filed with the Bank, all as set forth in the Beneficiary Designations paragraph, below. 

2.02.    Cause. 

        "Cause"
means conduct evincing such willful or wanton disregard of the Bank's interest as is found in deliberate violation or disregard of standards of behavior which the Bank has the
right to expect of an employee, or in carelessness or negligence of such a degree or occurrence as to manifest equal culpability, wrongful intent, or evil design, or to show an intentional and
substantial disregard of the Bank's interest or the Employee's duties and obligations to the Bank, including, but not limited to, the following: 

        A.    Conviction
of a crime, the nature of which reflects a possibility of serious consequences related to the continued assignment or employment of the Employee; 

        B.    Careless,
negligent, or improper use of the Bank's property, equipment or funds, including unauthorized removal, or use for private purpose, or use involving damage or
unreasonable risk of damage to property; 

        C.    Unauthorized
release of the Bank's confidential information or official records; 

        D.    Falsifying
information related to employment application, payroll, or any work related record or report; 

        E.    Intoxication
or incapacity on duty due to the use of alcohol or drugs, including driving under the influence; 

        F.    Willful
or negligent violation of rules and regulations, resolutions, and other related ordinances including personnel, safety, and other policies; 

2

 

        G.    Any
personal act or conduct that is discriminatory in nature towards another person's race, creed, color, national origin, sex (including sexual harassment), age,
religious beliefs or political affiliations; or 

        H.    Being
absent without authorized leave or excessive absenteeism (regardless of the reason). 

2.03.    Change Of Control. 

        "Change
of Control" means either (i) a person (as such term is used in section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) acquires more than fifty
percent (50%) of the combined voting power of the then outstanding securities of the Bank as a result of a tender or exchange offer, open market or privately negotiated purchases or otherwise,
(ii) the consolidation or merger of the Bank where the Bank is not the surviving corporation immediately after the merger, or (iii) any sale, lease, exchange or other transfer of all or
substantially all assets of the Bank. 

2.04.    Code. 

        "Code"
means the Internal Revenue Code of 1986, as it may be amended from time to time. Reference to any provision of the Code includes reference to any comparable or succeeding
provisions of any legislation that amends, supplements or replaces such provision. 

2.05.    Disability. 

        "Disability"
means the Employee's permanent and total disability as defined in Code section 22(e)(3). As a condition to any benefits under this Agreement, the Bank, in its sole
and absolute discretion, may require the Employee to submit to such physical or mental evaluations and tests as the Bank deems appropriate in order to determine if the Employee has a Disability. For
purposes of this Agreement, if there is a dispute over the disability status of the Employee, the Bank shall have the sole and absolute right to resolve this issue for purposes of this Agreement. 

2.06.    ERISA. 

        "ERISA"
means the Employee Retirement Income Security Act of 1974, Public Law 93-406, enacted September 2, 1974, as it may be amended from time to time. 

2.07.    Normal Retirement Age. 

        "Normal
Retirement Age" means age sixty-five (65). 

2.08.    Termination Of Employment. 

        "Termination
of Employment" means that the Employee ceases to be employed as a common law employee of the Bank for any reason whatsoever. For purposes of this Agreement, if there is a
dispute over the employment status of the Employee or the date of the Employee's Termination of Employment, the Bank shall have the sole and absolute right to resolve this issue for purposes of this
Agreement. A Termination of Employment will not occur if the Employee is on a leave of absence approved by the Bank or for periods of military service for which employment rights are prescribed by
USERRA. Notwithstanding the foregoing, if the Employee does not return to active employment with the Bank within thirty (30) days following the end of the leave of absence, or such longer
period as may be prescribed by law, the Employee's Termination of Employment shall be deemed to have occurred as of the date when the Employee's leave of absence began unless such failure to return
was the result of the Employee's death. 

2.09.    USERRA. 

        "USERRA"
means the Uniformed Services Employment And Reemployment Rights Act of 1994, as it may be amended from time to time. 

3

  

2.10.    Year Of Service. 

        "Year
of Service" means the total number of calendar years that the Employee has been employed as a common law employee by the Bank. The Employee shall be credited with a Year of Service
for each calendar year as to which the Employee was employed as a common law employee of the Bank on both the first day and the last day of the calendar year; provided, however, that: 

        A.    The
Employee shall be credited with a Year of Service for the Employee's initial calendar year as a common law employee of the Bank if the Employee served as a common law
employee of the Bank on the last day of the calendar year; and 

        B.    The
Employee shall be credited with a Year of Service for the Employee's last calendar year as a common law employee of the Bank if the Employee's Termination of Service
during such last calendar year occurs on or after the Employee's Normal Retirement Age. 

        If
the Employee is rehired by the Bank after the Employee's Termination of Employment, the Employee's service prior to being rehired shall not be taken into account for purposes of
determining the Employee's Years of Service. If the Employee is on a leave of absence for a period of military service for which employment rights are prescribed by USERRA, Years of Service shall
include such a period to the extent required by USERRA. Years of Service shall be expressed in whole years only and no credit shall be given for a partial year. 

 
 

ARTICLE 3. BENEFITS    
  

3.01.    Normal Retirement Benefit. 

        Subject
to the provisions of the Entitlement paragraph, below, if the Employee's Termination of Employment occurs on or after the Employee's Normal Retirement Age, the deferred
compensation benefit payable under this Agreement to the Employee shall be a monthly benefit in an amount equal to Six thousand two hundred fifty dollars ($ $6,250.00) per month for a period of One
Hundred Eighty (180) months. This benefit shall be payable on the first day of each month commencing with the month following the Employee's Termination of Employment. 

3.02.    Early Retirement Benefit. 

        Subject
to the provisions of the Entitlement paragraph, below, if the Employee's Termination of Employment occurs before the Employee's Normal Retirement Age for reasons other than the
Employee's death, Disability, or a Change of Control, the deferred compensation benefit payable under this Agreement to the Employee shall be a monthly benefit for a period of one hundred eighty (180)
months in the amount determined pursuant to the following provisions as of the date of the Employee's Termination of Employment. This benefit shall be payable on the first day of each month commencing
with the month following the Employee's Normal Retirement Age. 

        A.    Percentage Of Compensation Benefit. 

        Subject
to the provisions of the Vesting Percentage paragraph below, the amount of the Employee's benefit under this paragraph shall be equal to the vested portion of the amount of the
Employee's base monthly compensation from the Bank multiplied by the compensation percentage shown in the following table based upon the Employee's base monthly compensation from and position with the
Bank at the time of the Employee's Termination of Employment; provided, 

4

 

however, that no benefit shall be payable under this paragraph if the Employee's Years of Service are less than the applicable required minimum Years of Service shown in the following table: 

	Class
 
	 	Position
	 	Minimum

Years Of

Service
	 	Compensation

Percentage
	 
	I	 	President or CEO	 	0	 	40	%
	II	 	Senior Vice President	 	3	 	40	%
	III	 	Vice President or Branch Manager	 	4	 	40	%

        B.    Vesting Percentage. 

        The
amount of the Employee's benefit under this paragraph shall be equal to the vested portion of the amount determined under the Percentage Of Compensation Benefit paragraph, above, as
determined by the Employee's Years of Service as of the Employee's Termination of Employment according to the following table: 

	Years Of Service
	 	Percent Vested
	 
	Less than 5	 	0	%
	5	 	50	%
	6	 	60	%
	7	 	70	%
	8	 	80	%
	9	 	90	%
	10 or more	 	100	%

3.03.    Disability Benefit. 

        Subject
to the provisions of the Entitlement paragraph, below, if the Employee's Termination of Employment occurs before the Employee's Normal Retirement Age because of the Employee's
Disability, the deferred compensation benefit payable under this Agreement to the Employee shall be a monthly benefit for a period of one hundred eighty (180) months in the amount determined under the
Early Retirement Benefit paragraph, above, as of the date of the Employee's Termination of Employment; provided, however, that the vesting percentage in the Vesting Percentage paragraph shall be
deemed to be one hundred percent (100%). This benefit shall be payable on the first day of each month commencing with the month following the Employee's Termination of Employment. 

3.04.    Change Of Control Benefit. 

        Subject
to the provisions of the Entitlement paragraph, below, if the Employee's Termination of Employment occurs before the Employee's Normal Retirement Age and within twelve
(12) months after a Change of Control, for reasons other than the Employee's death or Disability, the deferred compensation benefit payable under this Agreement to the Employee shall be a
monthly benefit for a period of one hundred eighty (180) months in the amount determined under the Early Retirement Benefit paragraph, above, as of the date of the Employee's Termination of
Employment; provided, however, that the vesting percentage in the Vesting Percentage paragraph shall be deemed to be one hundred percent (100%). This benefit shall be payable on the first day of each
month commencing within six (6) months of the date of the Employee's Termination of Employment. 

3.05.    Death Benefit. 

        A.    Death Before Termination Of Employment. 

        If
the Employee dies prior to the Employee's Termination of Employment, the deferred compensation benefit payable under this Agreement to the Employee's Beneficiary shall be a 

5

 

monthly benefit in an amount equal to Six thousand two hundred fifty dollars ($ 6,250) per month for a period of one hundred eighty (180) months. This benefit shall be payable on the first day of
each month commencing with the month following the Employee's death. If the Employee's Beneficiary dies prior to receiving all such payments, then any remaining payments shall be paid to the
Beneficiary's estate. 

        B.    Death During Benefit Period.

        If
the Employee dies after the benefit payments have commenced under this Agreement but before the Employee has received all such payments to which the Employee is entitled, the Bank
shall pay such remaining benefits to the Employee's Beneficiary at the same times and in the same amounts they would have been paid to the Employee had the Employee survived. If the Employee's
Beneficiary dies prior to receiving all such payments, then any remaining payments shall be paid to the Beneficiary's estate. 

        C.    Death Before Benefit Period.

        If
the Employee has become entitled to benefits under this Agreement, but the Employee dies before the commencement of such benefit payments, the Bank shall pay such benefits to the
Employee's Beneficiary at the same times and in the same amounts they would have been paid to the Employee had the Employee survived. This benefit shall be payable on the first day of each month
commencing with the month following the Employee's death. If the Employee's Beneficiary dies prior to receiving all such payments, then any remaining payments shall be paid to the Beneficiary's
estate. 

        D.    Beneficiary Designations.

        The
Employee shall notify the Bank of the name, date of birth and current address of the Employee's designated Beneficiary and when any change in the address of the Employee's designated
Beneficiary
occurs. The Employee shall have the right, at any time, to revoke such designation or to substitute another such Beneficiary without the consent of any person. However, Beneficiary designations will
be effective only if signed by the Employee and accepted by the Bank during the Employee's lifetime. If the Employee's Beneficiary on file with the Bank is the Employee's spouse and the Employee's
marriage to such spouse is subsequently dissolved other than by the Employee's death, such Beneficiary designation shall be deemed automatically revoked. If, upon the death of the Employee, there is
no valid Beneficiary designation on file with the Bank or the Employee's Beneficiary has predeceased the Employee, the Employee's surviving spouse, or if there is none, the Employee's estate, shall be
the Employee's Beneficiary. 

3.06.    Benefit Enhancements.

        The
Bank's board of directors may, in its sole and absolute discretion, increase the amount of the benefit payments to the Employee or the Employee's Beneficiary under this Agreement
commencing any time, and from time to time, effective on or after the first anniversary of the first benefit payment under this Agreement. 

3.07.    Acceleration Of Payments.

        The
Bank may, in its sole and absolute discretion, pay the present value of the remaining annual installments to the Employee or the Employee's Beneficiary in a lump sum, at any time,
using an eight percent (8.0%) discount rate. 

6

 

3.08.    Entitlement.

        A.    Excess Parachute Payments.

        Notwithstanding
any provision of this Agreement to the contrary, no benefit shall be payable under this Agreement to any person to the extent that the benefit would result in the
disallowance of an income tax deduction or an excise tax under Code section 280G or Code section 4999. 

        B.    Termination For Cause.

        Notwithstanding
any provision of this Agreement to the contrary, no benefit shall be payable under this Agreement to any person if the Employee's Termination of Employment is for Cause. 

        C.    Competition After Termination Of Employment.

        Notwithstanding
any provision of this Agreement to the contrary, except in the event of the Employee's Termination of Employment because of a Change of Control, if the board of directors
of the Bank, in its sole and absolute discretion, determines that the Employee has at any time violated the following non-competition provisions, then no benefits (or no further benefits
if benefit payments have commenced) shall be payable under this Agreement to any person. 

        1.    In
the course of the Employee's employment with the Bank, the Employee will have access to trade secrets, confidential information, confidential forms, records, data,
specifications, plans, processes and ideas owned by the Bank or provided to the Bank in a confidential manner by the person supplying such information to the Bank. The Employee shall not, without the
prior written consent of the Bank, directly or indirectly, disclose or use any such information, except as required in the course of the Employee's employment by the Bank. 

        2.    During
the Employee's employment with the Bank and for two (2) years following the Employee's Termination of Employment, the Employee shall not, without the prior
written consent of the Bank, engage in, become interested in, directly or indirectly, as a sole proprietor, as a partner in a partnership, as a member of a limited liability company, or as a
substantial shareholder in a corporation, or become 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 fifty (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 the Employee's Termination of Employment. 

        3.    During
the Employee's employment with the Bank and for two (2) years following the Employee's Termination of Employment, the Employee shall not, without the prior
written consent of the Bank, directly or indirectly, induce or influence, or seek to induce or influence, any person who is engaged, as an employee, agent, independent contractor or otherwise, by the
Bank, to terminate such person's engagement by the Bank. 

        4.    The
Employee shall not commit, cause to be committed, or permit to be committed, any act which may be held under the laws of the state of California to constitute unfair
competition. 

        D.    Suicide Or Misstatement.

        Notwithstanding
any provision of this Agreement to the contrary, no benefit shall be payable under this Agreement to any person if the Employee commits suicide within two
(2) years after the date of this Agreement or if the Employee has made any material misstatement of fact on any application for life insurance purchased by the Bank. 

7

 

3.09.    Source Of Benefits.

        A.    All
benefits payable pursuant to this Agreement shall be paid from the general assets of the Bank and the Bank shall be under no obligation to segregate any of its assets
in connection with the Agreement benefits nor to fund or otherwise secure its obligation to pay such benefits. 

        B.    If
the Bank elects to provide for the payment of its obligations hereunder through the purchase of any contract of insurance, any investment product or the establishment
of a trust or otherwise, neither the Employee nor any Beneficiary who acquires a right to receive payments hereunder shall have rights or interest in any such contract, product, trust or other
arrangement greater than those of an unsecured general creditor of the Bank. 

        C.    All
amounts of compensation deferred under the Agreement, all property and rights purchased with such amounts, and all income attributable to such amount, property or
rights, shall remain, until made available to the Employee or the Employee's Beneficiary, solely the property and rights of the Bank, without being restricted to the provision of benefits under the
Agreement, subject only to the claims of the general creditors of the Bank. 

3.10.    Repayment Of Overpayment Of Benefits.

        By
accepting payment of proceeds under this Agreement, the Employee or the Employee's Beneficiary receiving the payment agrees that, in the event of overpayment, the Employee or the
Employee's Beneficiary will promptly repay the amount of overpayment without interest; provided that, if the Employee or the Employee's Beneficiary has not repaid the overpayment within thirty
(30) days after notice, the Employee or the Employee's Beneficiary will also pay an amount equal to simple interest at the rate determined by the Bank on the unpaid amount from the date of
overpayment to the date of repayment, and in addition will pay all legal fees, court costs and the reasonable time value of the Bank, or any of its employees or agents, related to the collection of
such overpayment. 

3.11.    Recovery Of Estate Taxes.

        If
the Employee's gross estate for federal estate tax purposes includes any amount determined by reference to and on account of this Agreement, and if the Beneficiary is other than the
Employee's estate, then the Employee's estate shall be entitled to recover from the Beneficiary receiving such benefit under the terms of this Agreement an amount by which the total estate tax due by
the Employee's estate, exceeds the total estate tax which would have been payable if the value of such benefit had not been included in the Employee's gross estate. If there is more than one person
receiving such benefit, the right of recovery shall be against each such person. In the event the Beneficiary has a liability hereunder, the Beneficiary may petition the Bank for a lump sum payment in
an amount not to exceed the Beneficiary's liability hereunder. 

3.12.    Withholding.

        The
Bank may withhold from any benefit payable under the Agreement all federal, state or local taxes that may be required to be withheld pursuant to applicable law. 

3.13.    Payments To Incapacitated Individuals.

        If
a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Bank may make all benefit
distributions to the persons or institutions which are providing for the care and maintenance of the distributee and continue to make distributions to them until a duly appointed legal representative
of the distributee makes a claim for the payment. If a valid claim is made by a duly appointed legal representative of the distributee, the Bank shall pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated person or incapable person. The Bank may require proof of incapacity, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. 

8

 

Payments made pursuant to the terms of this Payments To Incapacitated Individuals paragraph shall constitute a distribution to the Employee or Beneficiary entitled thereto, and shall immediately
discharge the Bank of any further liability therefor. 

3.14.    Bank Merger.

        If
the Bank merges or consolidates with or into another entity, or transfers substantially all of the assets of the Bank to another entity, the Agreement shall be continued by the
surviving entity resulting from such merger or consolidation, or the entity to which the assets have been transferred, and such entity shall succeed to all rights, powers and duties of the Bank
hereunder. If the Employee's
employment is continued by such successor, the Employee shall be deemed not to have a Termination of Employment with the Bank for any purposes of this Agreement on account of such merger,
consolidation or transfer of assets unless and until the Employee's employment with such successor employer is terminated. In the case of any of the foregoing events, such successor employer shall be
treated as the "Bank" under this Agreement effective as of the effective date of such event. 

 
 

ARTICLE 4. BENEFIT CLAIMS AND APPEALS    
  

4.01.    Request For Information.

        Any
Employee or Beneficiary may request such information concerning the Employee's or Beneficiary's rights or benefits under this Agreement as is required to be disclosed under
Part 1, Subtitle B, Title I of ERISA. The Bank shall respond, in writing, within a reasonable time, not to exceed thirty (30) days, unless the failure to respond results from matters
reasonably beyond the Bank's control. 

4.02.    Claim For Benefits.

        Claims
for benefits shall be processed as soon as administratively feasible and without unreasonable delay due to causes beyond the control of the Bank. A written ruling on each claim
for benefits shall be delivered to the Employee or Beneficiary making the claim. If the claim is denied in any respect, the ruling shall set forth the specific reasons for such denial, written in a
manner calculated to be understood by the Employee or Beneficiary, including: 

        A.    Specific
references to pertinent Agreement provisions on which the denial is based; 

        B.    A
description of any additional material or information necessary for the claimant to perfect the claim; 

        C.    An
explanation of why such material or information is needed; and 

        D.    An
explanation of the Agreement's review procedure for denied claims. 

        Such
ruling shall be made within thirty (30) days from the date the claim is received by the Bank. If information upon which the ruling is based is not available, the Bank shall
make prompt effort to secure all information needed and make its ruling. If the claim is not acted upon within one hundred twenty (120) days of the claim, the claimant may proceed to the review
stage as if the claim had been denied. 

4.03.    Review Of Denied Claim.

        If
a claim for benefits has been denied by the Bank, then within ninety (90) days after receipt of the ruling (or two hundred ten (210) days of the claim if the claim has
not been acted upon within one hundred twenty (120) days of the claim), the Employee or Beneficiary making the claim or the Employee's or Beneficiary's authorized representative may
file a written request for review on a form furnished by the Bank, giving the Employee or Beneficiary thirty (30) days notice thereof, and notifying said claimant that said claimant may
submit a written statement and documents, or appear personally 

9

 

at such or both, to give whatever facts or evidence the claimant feels bears upon the claim, review pertinent documents and records and submit issues and comments in writing. The Bank shall make a
full and fair review of the record, including the written and oral information submitted by the claimant. Within thirty (30) days, the Bank shall render a decision and if the claim is again
denied, the Bank shall set forth the specific reasons for such denial written in a manner calculated to be understood by the Employee or Beneficiary. Such ruling shall contain the same information
required by the Claim For Benefits paragraph, above. 

4.04.    Resolution Of Disputes.

        Any
claim under this Agreement that has not been resolved under the preceding provisions of this Agreement shall be resolved pursuant to the provisions of this Resolution Of Disputes
paragraph. 

        A.    Negotiation/Mediation.

        If
any dispute arises over performance under the terms of this Agreement, the parties shall use their best efforts for a period of thirty (30) days to resolve the dispute by
agreement through negotiation or mediation. To commence the dispute resolution process, any party may serve written notice on the other parties specifically identifying the dispute and requesting that
efforts at resolution begin. If the parties are unable to agree after reasonable negotiations among them, mediation shall be initiated upon written request by any party and a mediator shall be
selected by the parties from the Retired Judges Registry maintained by the California Judges Association, the Sacramento Arbitration and Mediation Services or with Judicat (Mediator). The parties
shall submit to the Mediator all written, documentary and other evidence and such oral testimony as is necessary for a proper resolution of the dispute.
When and as requested by the Mediator, the parties shall meet promptly in good faith efforts to resolve the dispute. 

        B.    Binding Arbitration.

        If
the parties' good faith efforts at resolving the dispute by agreement through negotiation or mediation are unsuccessful, within the thirty (30) day period set forth in the
Negotiation/Mediation paragraph, above, or such longer period as mutually agreed by the parties, such dispute between the parties shall be submitted to, and conclusively determined by, binding
arbitration in accordance with this Binding Arbitration paragraph. 

        1.    The
parties agree that the Mediator selected pursuant to the Negotiation/Mediation paragraph, above, shall serve as the Arbitrator; provided, however, that if such
Mediator is unable or unwilling to serve, then an Arbitrator shall be selected by the parties from the list of individuals affiliated with Judicial Arbitration and Mediation Services, Inc. If
the parties are unable to agree upon an Arbitrator, each party shall select an Arbitrator and the Arbitrators so selected shall select a third Arbitrator. 

        2.    Any
arbitration hearing shall be conducted in Butte County, California. The law applicable to the arbitration of any dispute shall be the law of the State of California,
excluding its laws of evidence. Except as otherwise provided in this Agreement, the arbitration shall be governed by the rules of arbitration of the American Arbitration Association. 

        3.    In
no event shall the Arbitrator's award include any component of punitive or exemplary damages. The parties shall equally bear all costs of arbitration. 

4.05.    Time.

        The
filing of claims or receipt of notices of rulings and any event starting a time period shall be deemed to commence with personal delivery signed for by the claimant or by affidavit
of personal service, or the date of actual receipts for certified or registered mail (or date returned if delivery is refused or a claimant has moved without giving the Bank a forwarding address). 

10

  

 
 

ARTICLE 5. PLAN ADMINISTRATION    
  

5.01.    Employment Records.  

        The Bank shall maintain permanent employment records to show dates of employment and Termination of Employment, compensation, and such other information as
necessary or appropriate in the administration of the Agreement for the Employee. 

5.02.    Reports And Disclosure.

        The
Bank shall prepare, file and distribute, in a timely manner, all reports and information to be disclosed to the Employee as may be required by ERISA. 

5.03.    Powers And Duties Of The Bank.

        The
Bank shall administer the Agreement in accordance with its terms and shall have the power and discretion to construe the terms of the Agreement, resolve any ambiguities in the
Agreement, and to determine all questions arising in connection with the administration, interpretation and application of the Agreement. Any such determination by the Bank shall be conclusive and
binding upon all persons. The Bank may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary
or advisable to carry out the purpose of the Agreement; provided, however, that any such procedure, discretionary act, interpretation or construction shall be consistent with the intent set forth in
the Income Tax Status and ERISA Status paragraphs above. 

 
 

ARTICLE 6. MISCELLANEOUS    
  

6.01.    Binding Effect.

        This
Agreement shall be binding upon and inure to the benefit of the Bank, its successors and assigns, the Employee and the Employee's spouse, heirs, executors, administrators and legal
representatives. 

6.02.    Amendment.

        No
waiver or modification of any part of this Agreement shall be valid unless the amendment is in writing signed by the Bank and the Employee. Notwithstanding any other provision of this
Agreement to the contrary, the Bank may amend this Agreement at any time, without the consent of the Employee, effective as of any date, if the Bank determines in its sole and absolute discretion that
the amendment is necessary or appropriate in order to either (i) maintain the status of the Agreement as set forth in the Income Tax Status paragraph or ERISA Status paragraph above or
(ii) if the Agreement would otherwise result in significant financial penalties or be otherwise significantly detrimental to the Bank (other than the financial impact of paying the benefits
under the Agreement), regardless of the effect of any such amendment on the Employee or the benefits with respect to the Employee. 

6.03.    Alienation.

        No
benefits under this Agreement shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge. Any attempt to so anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void. Nor shall any such benefits in any manner be liable for or subject to the debts, contracts, liabilities, domestic
relations orders or torts of the person entitled to such benefits except to the extent required by ERISA. 

6.04.    Applicable Law.

        This
Agreement shall be construed, administered and governed in all respects by the laws of the United States of America to the extent applicable, and otherwise by the laws of the state
of California. 

11

 

6.05.    Enforcement.

        If
any action at law or in equity, or if the services of any attorney are necessary to enforce or interpret the terms of this Agreement, then, except as provided in the Resolution Of
Disputes paragraph, above, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which that party may be entitled. 

6.06.    Severability.

        If
any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective
without being impaired or invalidated in any way. 

6.07.    Waiver.

        Failure
to insist upon strict compliance with any provision of this Agreement shall not be deemed to be a waiver of such provision or any other provision; waiver of breach of any
provision of this Agreement shall not be deemed to be a waiver of any other provision or of any subsequent breach of such provision. 

6.08.    Headings.

        The
paragraph headings appearing in this Agreement shall not be deemed to govern, limit, modify, or in any way effect, the scope, meaning or intent of this Agreement. 

6.09.    Entire Agreement.

        This
Agreement constitutes the entire agreement between the Bank and the Employee as it relates to the salary continuation benefits under this Agreement. This Agreement supersedes all
prior and contemporaneous agreements, understandings and representations between the parties, whether written or oral with respect to the subject matter hereof. 

        In
witness whereof, the Bank and the Employee have caused this Agreement to be executed on this 14th day of April 1998. 

	 	 	BUTTE COMMUNITY BANK
	 	 	 	 
	

 	
 	

By:	

/s/  DONALD W LEFORCE      

	 	 	Its:	Chairman of the Board of Directors

12

 
 
 

BUTTE COMMUNITY BANK
  SALARY CONTINUATION AGREEMENT
  BENEFICIARY DESIGNATION    
  

Employee Name: John Coger  

        Pursuant to the provisions of the Butte Community Bank Salary Continuation Agreement (Agreement) between Butte Community Bank (Bank) and the undersigned, an
employee of the Bank, I understand that I have the right to designate a beneficiary to receive the benefits under the Agreement that are payable in the event of my death. I wish to designate the
following beneficiaries as the recipients of any benefits which may arise under the Agreement as a result of my death:

	Primary:	 	Name	 	Colleen C Coger
	 	 
	 	 	Date of Birth	 	12-20-53
	 	 
	 	 	Relationship	 	wife
	 	 
	 	 	Address	 	2188 DeMille Road, Paradise CA
	 	 
	

Contingent:	
 	

Name	
 	

 	
 	

 
	 	 	 	 	
	 	 
	 	 	Date of Birth	 	 	 	 
	 	 	 	 	
	 	 
	 	 	Relationship	 	 	 	 
	 	 	 	 	
	 	 
	 	 	Address	 	 	 	 
	 	 	 	 	
	 	 

        I
understand that I may change these beneficiary designations by filing a new written beneficiary designation with the Bank. A new beneficiary designation shall not be effective until it
is received and accepted by the Bank. 

        I
further understand that my beneficiary designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary, in the event of the
dissolution of our marriage. 

        Dated
this 15th day of April 1998. 

	 	 	 
	 	 	/s/  JOHN F. COGER      
 Employee

        Accepted
by the Bank this 15th day of April 1998. 

	 	 	BUTTE COMMUNITY BANK
	 	 	 	 
	 	 	 	 
	

 	
 	
By:	

/s/  K C ROBBINS      

	 	 	Its:	President

13

 
 
 

SPOUSE'S CONSENT FOR MARRIED DIRECTORS    
  

        I have read the foregoing Beneficiary Designation executed by my spouse as an employee of the Bank, and I have reviewed a copy of the Butte Community Bank Salary
Continuation Agreement between the Bank and my spouse. I confirm that I understand the terms, provisions and conditions of the Agreement. I consent to my spouse's participation in the Agreement as set
forth in the Agreement and the foregoing Beneficiary Designation. 

        Dated
this 15th day of April 1998. 

	 	 	 
	 	 	 
	 	 	/s/  COLLEEN C COGER      
 Spouse

14

 
 
 

AMENDMENT
  TO THE BUTTE COMMUNITY BANK SALARY
  CONTINUATION AGREEMENT
  DATED APRIL 14, 1998    
  

        This Amendment, made and entered into this 10th day of January, 2002, by and between Butte Community Bank, a bank organized and existing under the laws of the
State of California, hereinafter referred to as the "Bank," and John F. Coger, an Employee of the Bank, hereinafter referred to as the "Employee," shall effectively amend the Butte Community Bank
Salary Continuation Agreement dated April 14, 1998, as specifically set forth herein pursuant to Article 6.02 of said agreement. Said Agreement shall be amended as follows: 

	1.)
	Delete
Article 3.01 in its entirety and replace it with the following: 

Subject
to the provisions of the Entitlement paragraph, below, if the Employee's Termination of Employment occurs on or after the Employee's Normal Retirement Age, the deferred compensation benefit
payable under this Agreement to the Employee shall be an annual benefit equal to One Hundred Thousand and 00/100ths Dollars ($100,000.00)* for two hundred forty (240) months or until the death
of the Employee, whichever event last occurs. This benefit shall be payable monthly on the first day of each month commencing with the month following the Employee's Termination of Employment. 

	*(i)
	Cost of Living Increase: 

For
each year that the Executive shall receive a benefit, said benefit amount shall be increased by three percent (3%) from the previous years benefit amount. 

	2.)
	Delete
the reference to One Hundred Eighty (180) months in Articles 3.02, 3.03, and 3.04 and replace it with, "two hundred forty (240) months or until the death of the
Employee, whichever event shall last occur."

	3.)
	Delete
Article 3.05(A) in its entirety and replace it with the following: 

If
the Employee dies prior to the Employee's Termination of Employment, the deferred compensation benefit payable under this Agreement to the Employee's Beneficiary shall be an annual benefit equal to
One Hundred Thousand and 00/100ths Dollars ($100,000.00)* for a period of two hundred forty (240) months. This benefit shall be payable on the first day of each month commencing with the month
following the Employee's death. If the Employee's Beneficiary dies prior to receiving all such payments, then any remaining payments shall be paid to the Beneficiary's estate. 

	*(i)
	Cost of Living Increase: 

For
each year that the Executive shall receive a benefit, said benefit amount shall be increased by three percent (3%) from the previous years benefit amount. 

        This
Amendment shall be effective the 18th day of December, 2001. To the extent that any term, provision, or paragraph of said agreement is not specifically amended herein, or in any
other amendment thereto, said term, provision, or paragraph shall remain in full force and effect as set forth in said April 14, 1998 Agreement. 

15

 

        IN
WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Amendment and executed the original thereof on the first day set forth hereinabove, and that, upon
execution, each has received a conforming copy. 

	 
	 	 
	 
	 

	 	 	BUTTE COMMUNITY BANK

Paradise, California
	 	 	 	 	 
	

 	
 	

 	

 	

 
	/s/  K C ROBBINS      	 	By:	/s/  DON LEFORCE      	Chairman
	
 Witness	 	 	
 Title
	 	 	 	 	 
	 	 	 	 	 
	CARLA GEYER	 	 	/s/  JOHN F. COGER      	 
	
 Witness	 	 	
 John F. Coger

16

QuickLinks

Exhibit 10.7

BUTTE COMMUNITY BANK SALARY CONTINUATION AGREEMENT

RECITALS

AGREEMENT

ARTICLE 1. GENERAL

ARTICLE 2. GENERAL DEFINITIONS

ARTICLE 3. BENEFITS

ARTICLE 4. BENEFIT CLAIMS AND APPEALS

ARTICLE 5. PLAN ADMINISTRATION

ARTICLE 6. MISCELLANEOUS

BUTTE COMMUNITY BANK SALARY CONTINUATION AGREEMENT BENEFICIARY DESIGNATION

SPOUSE'S CONSENT FOR MARRIED DIRECTORS

AMENDMENT TO THE BUTTE COMMUNITY BANK SALARY CONTINUATION AGREEMENT DATED APRIL 14, 1998QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.8  

 
 

EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
  
    EXECUTIVE AGREEMENT    
  

        THIS AGREEMENT is made and entered into this 14th day of August, 2000, by and between Butte Community Bank, a bank organized and existing under the laws of the
State of California (hereinafter referred to as the "Company"), and John Coger, an Executive of the Company (hereinafter referred to as the "Executive"). 

        WHEREAS,
the Executive is now in the employ of the Company and has for many years faithfully served the Company, it is the consensus of the Board of Directors (hereinafter referred to as
the "Board") that the Executive's services have been of exceptional merit, in excess of the compensation paid and an invaluable contribution to the profits and position of the Company in its field of
activity. The Board further believes that the Executive's experience, knowledge of corporate affairs, reputation and industry contacts are of such value, and the Executive's continued services so
essential to the Company's future growth and profits, that it would suffer severe financial loss should the Executive terminate services with the Bank; 

        ACCORDINGLY,
the Board has adopted the Butte Community Bank Executive Supplemental Retirement Plan (hereinafter referred to as the "Executive Plan") and it is the desire of the Company
and the Executive to enter into this Agreement under which the Company will agree to make certain payments to the Executive upon the Executive's retirement or to the Executive's beneficiary(ies) in
the event of the Executive's death pursuant to the Executive Plan; 

        FURTHERMORE,
it is the intent of the parties hereto that this Executive Plan be considered an unfunded arrangement maintained primarily to provide supplemental retirement benefits for
the Executive, and to be considered a non-qualified benefit plan for purposes of the Employee Retirement Security Act of 1974, as amended ("ERISA"). The Executive is fully advised of the
Company's financial status and has had substantial input in the design and operation of this benefit plan; and 

        NOW
THEREFORE, in consideration of services the Executive has performed in the past and those to be performed in the future, and based upon the mutual promises and covenants herein
contained, the Company and the Executive agree as follows: 

I.    DEFINITIONS  

        A.    Effective Date:    

        The
Effective Date of the Executive Plan shall be July 1, 2000. 

        B.    Plan Year and Anniversary Date:    

        Any
reference to the "Plan Year" shall mean a calendar year from January 1st to December 31st. In the year of implementation, the term "Plan Year" shall mean the period
from the Effective Date to December 31st of the year of the Effective Date. Anniversary Date shall mean December 31st of each year. 

        C.    Retirement Date:    

        Retirement
Date shall mean retirement from service with the Company which becomes effective on the first day of the calendar month following the month in which the Executive reaches age
sixty (60) or such later date as the Executive may actually retire. 

        D.    Early Retirement Date:    

        Early
Retirement Date shall mean a Termination of Employment prior to the Normal Retirement Age (Subparagraph I [K]) for reasons other than death, Change of
Control or Disability. 

 

        E.    Termination of Employment:    

        Termination
of Employment means the Executive ceasing to be employed by the Company for any reason whatsoever. 

        F.    Pre-Retirement Account:    

        A
Pre-Retirement Account shall be established as a liability reserve account on the books of the Company for the benefit of the Executive. Prior to the Executive's
Termination of Employment, or the Executive's retirement, early or otherwise, whichever event shall first occur, such liability reserve account shall be increased or decreased each Plan Year, until
the aforestated event occurs, by the Index Retirement Benefit (Subparagraph I [G]). This Pre-Retirement Account shall have a pre-existing balance of Two
Hundred Seventy Eight and no/100ths Dollars ($278.00) as of December 31, 1999. The Company shall provide to the Executive, within one hundred and twenty (120) days after each Anniversary
Date, a statement setting forth the Pre-Retirement Account Balance. 

        G.    Index Retirement Benefit:    

        The
Index Retirement Benefit for each Executive in the Executive Plan for each Plan Year shall be equal to the excess (if any) of the Index (Subparagraph I [H])
for that Plan Year over the Opportunity Cost Expense (Subparagraph I [I]) for that Plan Year, minus the after-tax interest expense pursuant to Section III
(B) of this Agreement. 

        H.    Index:    

        The
Index for any Plan Year shall be the aggregate annual after-tax income from the life insurance contract(s) described hereinafter as defined by FASB Technical Bulletin
85-4. This Index shall be applied
as if such insurance contract(s) were purchased on the Assumed Purchase Date or Issue Date set forth hereinbelow. 

	Insured:	 	John Coger
	Insurance Carrier:	 	Alexander Hamilton Life Ins Co.
	Policy Number:	 	AH5025492
	Policy Type:	 	Flexible Premium Adjustable Life
	Product Name:	 	Executive Security Plan IV
	Issue Date:	 	July 10, 1998
	Classification:	 	Non-Smoker
	Initial Face Amount:	 	$440,000
	Premium Paid:	 	$165,000
	Number of Premium Payments:	 	One

        If
such contracts of life insurance are actually purchased by the Company, then the actual policies as of the dates they were actually purchased shall be used in calculations under this
Executive Plan. If such contracts of life insurance are not purchased or are subsequently surrendered or lapsed, then the Company shall receive annual policy illustrations that assume the
above-described policies were purchased or had not subsequently surrendered or lapsed. Said illustration shall be received from the respective insurance companies and will indicate the increase in
policy values for purposes of calculating the amount of the Index. 

        In
either case, references to the life insurance contracts are merely for purposes of calculating a benefit. The Company has no obligation to purchase such life insurance and, if
purchased, the Executive and the Executive's beneficiary(ies) shall have no ownership interest in such policy and shall always have no greater interest in the benefits under this Executive Plan than
that of an unsecured creditor of the Company. 

2

 

        I.    Opportunity Cost:    

        The
Opportunity Cost for any Plan Year shall be calculated by taking the sum of the amount of premiums for the life insurance policies described in the definition of "Index" plus the
amount of all previous years' after-tax Opportunity Cost, and multiplying that sum by the average rate of return on the average Federal Funds for the Plan Year as quoted in the Wall Street
Journal net of the Company's highest marginal tax rate (combined federal and state) for each Plan Year. This rate shall be adjusted annually. 

        J.    Change of Control:    

        Change
of Control means the transfer of shares of the Company's voting common stock such that one entity (or one person acquires or is deemed to acquire when applying Section 318
of the Internal Revenue Code of 1986, as amended) more than fifty percent (50%) of the Company's outstanding voting common stock followed within twelve (12) months by the Executive's
Termination of Employment for reasons other than death, disability or retirement. 

        K.    Normal Retirement Age:    

        Normal
Retirement Age shall mean the date on which the Executive attains age sixty (60). 

II.    INDEX BENEFITS  

        A.    Retirement Benefits:    

        Subject
to Paragraph VI (A) hereinafter, an Executive who remains in the employ of the Company until the Normal Retirement Age (Subparagraph I [K])
shall be entitled to receive the balance in the Pre-Retirement Account in two hundred and forty (240) equal monthly installments commencing thirty (30) days following the
Executive's retirement. In addition to these payments and commencing in conjunction therewith, the Index Retirement Benefit (Subparagraph I [G]) for each Plan Year subsequent
to the Executive's retirement, and including the remaining portion of the Plan Year following said retirement, shall be paid to the Executive until the Executive's death. 

        B.    Early Retirement:    

        Subject
to Paragraph VI (A), should the Executive retire early as defined in the Early Retirement Date Provision (Subparagraph I [D]) the Executive shall
be entitled to receive on the date of said early retirement, the balance in the Pre-Retirement Account paid in two hundred and forty (240) monthly installments commencing at the
Normal Retirement Age (Subparagraph I [K]). In addition to these payments and commencing in conjunction therewith, the Index Retirement Benefit for each Plan Year subsequent to
the year in which the Executive attains Normal Retirement Age, and including the remaining portion of the Plan Year in which the Executive attains Normal Retirement Age, shall be paid to the Executive
until the Executive's death. 

        C.    Termination of Employment:    

        Subject
to Paragraph VI (A), should an Executive suffer a Termination of Service the Executive shall be entitled to receive the balance in the Pre-Retirement Account
payable to the Executive in Two Hundred and Forty (240) equal monthly installments commencing thirty (30) days following the Executive's Normal Retirement Age (Subparagraph I
[K]). In addition to these payments and commencing in conjunction therewith, the Index Retirement Benefit for each Plan Year subsequent to the year in which the Executive
attains Normal Retirement Age, and including the remaining portion of the Plan Year in which the Executive attains Normal Retirement Age, shall be paid to the Executive until the Executive's death. 

3

 

        D.    Death:    

	(i)
	Should
the Executive die prior to having received the full balance of the Pre-Retirement Account, the unpaid balance of the
Pre-Retirement Account shall be paid in the remaining installments (Subparagraph II [A]) to the beneficiary selected by the Executive and filed with the Bank; and

	(ii)
	When
the Executive dies, in addition to the payment the Executive's designated beneficiary may receive described in II (C) (i) hereinabove, the
Executive's designated beneficiary shall begin receiving an amount of money equal to what the Executive's Index Retirement Benefit would have been had the Executive received fifteen (15) Index
Retirement Benefit plan payments after his retirement, or had the Executive lived and received said payments until age seventy-five (75), whichever event allows for the greater number of
payments to the Executive's beneficiary(ies). This amount of money shall be paid at the times and in the amounts that the Executive would have received said Index Retirement Benefits; and

	(iii)
	In
any event, in the absence of or a failure to designate a beneficiary, the amounts described herein shall be paid to the personal representative of
the Executive's estate. 

        E.    Death Benefit:    

        Except
as set forth above, there is no death benefit provided under this Agreement. 

        F.    Disability Benefit:    

        In
the event the Executive becomes disabled and the Executive's employment is terminated because of such disability, he shall immediately begin receiving the benefits in Subparagraph II
(A) above. Such benefit shall begin without regard to the Executive's Normal Retirement Age and the Executive shall be one hundred percent (100%) vested in the entire benefit amount. Disability
means the Executive's inability to perform substantially all normal duties of the Executive, as determined by the Company's Board of Directors, in its sole discretion. As a condition to any benefits,
the Company may require the Executive to submit to such physical or mental evaluations and tests as the Board of Directors deems appropriate. 

III.  DEFERRAL BENEFITS  

        A.    Deferral Election:    

        The
Executive may elect to defer up to One Hundred Percent (100%) of total compensation each year for a maximum of ten (10) years. At the end of the ten (10) year period,
the Board shall have the option of extending the deferral period for any amount of time it shall deem to be appropriate. The Executive will make the election to defer by filing with the Company,
within thirty (30) days after the Effective Date of this Agreement, a written statement setting forth the amount of the deferrals and the Executive's election of payment as set forth in Exhibit
"B". Said Deferral Declaration is attached hereto as Exhibit "B" and fully incorporated herein by reference. The Deferral
Declaration shall be effective to defer only compensation earned after the date the Deferral Declaration is received by the
Company. The Executive may modify the amount of compensation to be deferred annually by filing a new Deferral Declaration with the Company prior to the
beginning of the Plan Year in which the compensation is to be deferred. The modified Deferral Election shall not be effective until the calendar year following the year in which the subsequent  Deferral Election is received and approved by the Company. 

        B.    Deferred Compensation Account:    

        The
Company shall establish a Deferred Compensation Account in the name of the Executive and credit that account with the deferrals. Deferrals herein are defined as compensation deferred 

4

 

by the Executive as of the time the compensation would have otherwise been paid to the Executive. The Company shall also credit interest to the Deferred Compensation Account balance. On the
Anniversary Date of each year and immediately prior to the payment of any benefits, interest is to be accrued on the account balance and compounded at an annual rate on each Anniversary Date and
immediately prior to the payment of any benefits at an annual rate equal to the Company's prime lending rate plus fifty (50) basis points on each Anniversary Date. The Deferred Compensation
Account shall have a pre-existing liability balance equal to Twenty Thousand Nine Hundred and no/100ths Dollars ($20,900.00) as of June 30, 2000. 

        C.    Statement of Accounts:    

        The
Company shall provide to the Executive, within one hundred twenty (120) days after each Anniversary Date, a statement setting forth the Deferred Compensation Account Balance. 

        D.    Retirement, Termination of Service, Disability, Change of Control or Death:    

	(i)
	Retirement: Upon the Executive's Retirement Date, the Company shall pay the Executive's Deferred
Compensation Account balance as elected by the Executive at least one (1) year prior to receiving said benefit on his Deferral Declaration said
payments to commence on the first day of the month following the Executive's Retirement Date. If the Executive fails to make said election, then the payments shall be made in two hundred and forty
(240) equal monthly installments commencing as set forth herein. The Company shall continue to credit interest as set forth hereinabove on the remaining account balance during any applicable
installment period.

	(ii)
	Termination of Service or Early Retirement Benefit: Upon the Executive's Termination of Service or Early
Retirement, for reasons other than death, Change of Control or Disability, the Company shall pay the Executive the Deferral Account balance at said Termination of Service or Early Retirement Date,
said payments to commence on the first day of the month following the Executive's Normal Retirement Age. Said amount shall be payable as elected by the Executive at least one (1) year prior to
being entitled to receive said benefit on the Deferral Declaration. If the Executive fails to make said election, then the amount shall be payable in
two hundred and forty (240) equal monthly installments. The Company shall continue to credit interest as set forth hereinabove on the remaining account balance during any applicable installment
period.

	(iii)
	Disability: If the Executive terminates employment due to disability as set forth hereinabove, the
Company shall pay the Executive the Deferred Compensation Account Balance at said termination due to disability, said payments to commence on the first day of the month following said termination due
to disability payable as elected by the Executive in the Deferral Declaration at least one (1) year prior to receiving said benefit. If Executive
fails to make said election, then the payments shall be made in two hundred and forty (240) monthly payments commencing as set forth herein. If the Executive fails to make said election, then
the amount shall be payable in two hundred and forty (240) equal monthly installments. The Company shall continue to credit interest as set forth hereinabove on the remaining account balance
during any applicable installment period.

	(iv)
	Change of Control: Upon a change in control prior to the expiration of the Deferral Period set forth
hereinabove, the Company shall credit the Deferred Compensation Account in the amount which would have been deferred by the Executive for the entire Deferral Period and thereafter pay to the Executive
the balance of the Deferred Compensation Account. Such payment shall be made, at the election of the Executive, within thirty (30) days after such occurrence or at the same time and in the same
amounts as specified on the Deferral Declaration. 

5

  

	(v)
	Death: Should the Executive die while there is a balance in the Executive's Deferred Compensation
Account, such balance shall be paid to the Executive's beneficiary(ies) in two hundred and forty (240) monthly installments commencing on the first day of the month following the Executive's
death. The Company shall continue to credit interest as set forth hereinabove on the remaining account balance during any applicable installment period. 

        E.    Hardship:    

        If
an unforeseeable financial emergency arising from the death of a family member, divorce, sickness, injury, catastrophe or similar event outside the control of the Executive occurs,
the Executive, by written instructions to the Company, may reduce future referrals under this Agreement. Upon the Board's determination that the Executive has suffered an unforeseeable financial
emergency as described herein, the Company shall distribute to the Executive all or a portion of the Deferred Compensation Account Balance as determined by the Company, but in no event shall the
distribution be greater than is necessary to relieve the financial hardship. 

IV.    RESTRICTIONS UPON FUNDING  

        The Company shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Executive Plan. The
Executive, their beneficiary(ies), or any successor in interest shall be and remain simply a general creditor of the Company in the same manner as any other creditor having a general claim for matured
and unpaid compensation. 

        The
Company reserves the absolute right, at its sole discretion, to either fund the obligations undertaken by this Executive Plan or to refrain from funding the same and to determine the
extent, nature and method of such funding. Should the Company elect to fund this Executive Plan, in whole or in part, through the purchase of life insurance, mutual funds, disability policies or
annuities, the Company reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall any Executive be deemed to have any lien nor
right, title or interest in or to any specific funding investment or to any assets of the Company. 

        If
the Company elects to invest in a life insurance, disability or annuity policy upon the life of the Executive, then the Executive shall assist the Company by freely submitting to a
physical exam and supplying such additional information necessary to obtain such insurance or annuities. 

V.    BENEFICIARIES  

	A.
	Beneficiary Designations:

        The
Executive shall designate a beneficiary by filling a written designation with the Company. Said Beneficiary Designation is attached
hereto, marked as Exhibit "A", and fully incorporated herein by reference. The Executive may revoke or modify the designation at any time by filing a new designation. However, designations will only
be effective if signed by the Executive and accepted by the Company during the Executive's lifetime. The Executive's beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and the marriage is subsequently dissolved. If the Executive dies without a valid beneficiary designation, all payments
shall be made to the Executive's estate. 

	B.
	Facility of Payment:

        If
a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Company may require proof of incompetence, minority or 

6

 

guardianship, as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Company from all liability with respect to such benefit. 

VI.    GENERAL LIMITATIONS  

        Notwithstanding any provision of this Agreement to the contrary, the Company shall not pay any benefit under this Agreement that is in excess of the Executive
Deferrals if any of the following events occur: 

	A.
	Termination for Cause:

        If
the Company terminates the Executive's employment for: 

          (i)  Gross
negligence or gross neglect of duties to the Company; 

        (ii)  Commission
of a felony or of a gross misdemeanor involving moral turpitude involving the Executive's employment by the Company; or 

        (iii)  Fraud,
disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Executive's employment and resulting in an
adverse effect on the Company. 

	B.
	Suicide:

        If
the Executive commits suicide within two years after the date of this Agreement, or if the Executive has made any material misstatement of fact on any application for life insurance
purchased by the Company, no death benefit shall be payable under this Agreement. 

        Regardless
of Paragraph VI or any provision to the contrary, no benefit will be paid to the extent the benefit would create excess parachute payments under Section 280G of
the Code. 

VII.    CLAIMS AND REVIEW PROCEDURES  

	A.
	Claims Procedure:

        The
Company shall notify any person or entity that makes a claim against the Agreement (the "Claimant") in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or non-eligibility for benefits under the Agreement. If the Company determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth: 

          (i)  The
specific reasons for such denial; 

        (ii)  A
specific reference to the provisions of the Agreement on which the denial is based; 

        (iii)  A
description of any additional information or material necessary for the Claimant to perfect his or her claim, and a description of why it is needed; and 

        (iv)  An
explanation of the Agreement's claims review procedure and other appropriate information as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Company determines that there are special circumstances requiring additional time to make a decision, the Company shall notify the Claimant of the special circumstances and the date
by which a decision is expected to be made, and may extend the time for up to an additional ninety-day period. 

	B.
	Review Procedure:

        If
the Claimant is determined by the Company not to be eligible for benefits, or if the Claimant believes that he or she is entitled to greater or different benefits, the Claimant shall
have 

7

 

the opportunity to have such claim reviewed by the Company by filing a petition for review with the Company within sixty (60) days after receipt of the notice issued by the Company. Said
petition shall state the specific reasons, which the Claimant believes, entitle him or her to benefits or to greater or different benefits. Within sixty (60) days after receipt by the Company
of the petition, the Company shall afford the Claimant (and counsel, if any) an opportunity to present his or her position to the Company orally or in writing, and the Claimant (or counsel) shall have
the right to review the pertinent documents. The Company shall notify the Claimant of its decision in writing within the sixty-day period, stating specifically the basis of its decision,
written in a manner calculated to be understood by the Claimant and the specific provisions of the Agreement on which the decision is based. If, because of the need for a hearing, the
sixty-day period is not sufficient, the decision may be deferred for up to another sixty-day period at the election of the Company, but notice of this deferral shall be given
to the Claimant. 

VIII.    AMENDMENTS AND TERMINATION  

        A.    This
Agreement may be amended or terminated only by a written agreement signed by the Company and the Executive. 

        B.    The
Company may amend or terminate this Agreement at any time if, pursuant to legislative, judicial or regulatory action, continuation of the Agreement would: 

          (i)  Cause
benefits to be taxable to the Executive prior to actual receipt, or 

        (ii)  Result
in significant financial penalties or other significantly detrimental ramifications to the Company (other than the financial impact of paying the benefits). 

        In
no event shall this Agreement be terminated under this Section VIII (B) without payment to the Executive of the Deferral Account balance attributable to the Executive's
Deferrals and interest credited on such amounts. 

IX.    MISCELLANEOUS  

	A.
	Binding Effect:

        This
Agreement shall bind the Executive and the Company, and their beneficiaries, survivors, executors, administrators and transferees. 

	B.
	No Guarantee of Employment:

        This
Agreement is not a contract for employment. It does not give the Executive the right to remain an employee of the Company, nor does it interfere with the shareholders' rights to
replace the Executive. It also does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time. 

	C.
	Non-Transferability:

        Benefits
under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. 

	D.
	Tax Withholding:

        The
Company shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement. 

8

 

	E.
	Applicable Law:

        The
Agreement and all rights hereunder shall be governed by the laws of the State of California, except to the extent preempted by the laws of the United States of America. 

	F.
	Recovery of Estate Taxes:

        If
the Executive's gross estate for federal estate tax purposes includes any amount determined by reference to and on account of this Agreement, and if the beneficiary is other than the
Executive's estate, then the Executive's estate shall be entitled to recover from the beneficiary receiving such benefit under terms of the Agreement, an amount by which the total estate tax due by
the Executive's estate, exceeds the total estate tax which would have been payable if the value of such benefit had not been included in the Executive's gross estate. If there is more than one person
receiving such benefit, the right of recovery shall be against each such person. In the event the beneficiary has a liability hereunder, the beneficiary may petition the Company for a lump sum payment
in an amount not to exceed the beneficiary's liability hereunder. 

	G.
	Unfunded Arrangement:

        The
Executive and the Executive's beneficiary are general unsecured creditors of the Company for the payment of benefits under this Agreement. The benefits represent the mere promise by
the Company to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive's life is a general asset of the Company to which the Executive and the
Executive's beneficiary have no preferred or secured claim. 

	H.
	Reorganization:

        The
Company shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of the assets to another company, firm, or person unless such succeeding
or continuing company, firm, or person agrees to assume and discharge the obligation of the Company under this Agreement. 

	I.
	Entire Agreement:

        This
Agreement constitutes the entire agreement between the Company and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement
other than those specifically set forth herein. 

	J.
	Administration:

        The
Company shall have powers that are necessary to administer this Agreement, including but not limited to: 

          (i)  Interpreting
the provisions of the Agreement; 

        (ii)  Establishing
and revising the method of accounting for the Agreement; 

        (iii)  Maintaining
a record of benefit payments; and 

        (iv)  Establishing
rules and prescribing any forms necessary or desirable to administer the Agreement. 

	K.
	Named Fiduciary:

        For
purposes of the Employee Retirement Income Security Act of 1974, if applicable, the Company shall be the named fiduciary and plan administrator under the Agreement. The named
fiduciary may delegate to others certain aspects of the management and operation responsibilities 

9

 

of the plan including the employment of advisors and the delegation of ministerial duties to qualified individuals. 

	L.
	Supersede and Future Agreement:

        This
Agreement shall supersede the Butte Community Bank Executive Deferred Compensation Agreement dated the 1st day of July, 1998, and shall constitute the entire agreement of the
parties pertaining to this particular Executive Supplemental Retirement Plan Agreement. 

	M.
	Exhibit C:

        An
illustration of the projected amount of the Retirement Benefits set forth hereinabove is attached hereto and marked as Exhibit "C". The numbers referred to in said Exhibit "C" are not
actual or representative of any actual Retirement Benefits that may be received by the participant per the terms of this Agreement. Exhibit "C" is attached hereto merely for illustrative purposes only
and the Bank does not make any promises or other representations regarding any said amounts set forth therein. 

        IN
WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read the Agreement and executed the original thereof on the 14th day of August, 2000, and that, upon execution,
each has received a conforming copy. 

	 	 	BUTTE COMMUNITY BANK

Paradise, CA
	

/s/  K C ROBBINS      	
 	

By:	
 	

/s/  DON LEFORCE      	
 	

Chairman
	
	 	 	 	

	Witness	 	 	 	 	 	Title
	

/s/  K C ROBBINS      
	
 	

By:	
 	

/s/  JOHN F. COGER      

	Witness	 	 	 	John Coger

10

 
 
 

EXHIBIT "A"    
  

BENEFICIARY DESIGNATION FORM

FOR THE EXECUTIVE SUPPLEMENTAL

RETIREMENT PLAN AGREEMENT  

PRIMARY DESIGNATION:  

	Name
	 	Address
	 	Relationship

	Colleen C Coger	 	2188 DeMille Rd Paradise CA 95969	 	wife
	

	    	 	 	 	 
	

	    	 	 	 	 
	

	    	 	 	 	 
	
SECONDARY (CONTINGENT) DESIGNATION:
	    	 	 	 	 
	

	    	 	 	 	 
	

	    	 	 	 	 
	

All
sums payable under the Executive Supplemental Retirement Plan Executive Agreement by reason of my death shall be paid to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary (Contingent) Beneficiary. 

	

/s/  JOHN F. COGER      
 John Coger	
 	

11-10-00
 Date

11

 
 
 

EXHIBIT "B"    
  

DEFERRAL DECLARATION  

I.    AUTHORIZATION AND AMOUNT OF DEFERRAL  

        The undersigned John Coger, an Executive of the Butte Community Bank hereby elects to defer $10,000 ($ or percent) of the Executive's income for the year 2000 and
all subsequent years thereafter pursuant to the Executive Supplemental Retirement Plan Executive Agreement dated the            day
of                        , 2000, unless modified by the Executive
accordingly. The undersigned is a party to the above-referenced Agreement. 

II.    DISTRIBUTION ELECTION  

        Pursuant to the Provisions of my Executive Supplemental Retirement Plan Executive Agreement with Butte Community Bank, I hereby elect to have any distribution of
the balance in my Deferral Account paid to me in installments as designated below: 

	o	 	Lump sum.
	

o	
 	

Five (5) annual installments with the amount of each installment determined as of each installment date by dividing the entire amount in my Benefit Account by the number of installments then remaining to be paid, with the final installment to be
the entire remaining balance in the Benefit Account.
	

o	
 	

Ten (10) annual installments with the amount of each installment determined as of each installment date by dividing the entire amount in my Benefit Account by the number of installments then remaining to be paid, with the final installment to be
the entire remaining balance in the Benefit Account.
	

o	
 	

Fifteen (15) annual installments with the amount of each installment determined as of each installment date by dividing the entire amount in my Benefit Account by the number of installments then remaining to be paid, with the final installment
to be the entire remaining balance in the Benefit Account.
	

ý	
 	

Twenty (20) annual installments with the amount of each installment determined as of each installment date by dividing the entire amount in my Benefit Account by the number of installments then remaining to be paid, with the final installment to
be the entire remaining balance in the Benefit Account.
	

o	
 	

The aforestated length of time for payments in monthly installments.

III.    DISTRIBUTION ELECTION UPON A CHANGE OF CONTROL  

	o	 	Lump sum within thirty (30) days of Change of Control.
	

ý	
 	

Pursuant to election made in Paragraph II above.

	

Date:	
 	

11-10-00
	
 	

Executive:	
 	

/s/  JOHN F. COGER      
 John Coger

12

 
 
 

AMENDMENT
  TO THE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
  EXECUTIVE AGREEMENT    

        This
Amendment, made and entered into this 10th day of January, 2002, by and between Butte Community Bank, a bank organized and existing under the laws of the State of California,
hereinafter referred to as the "Bank," and John F. Coger, an Employee of the Bank, hereinafter referred to as the "Employee," shall effectively amend the Executive Supplemental Retirement Plan
Executive Agreement, as specifically set forth herein pursuant to Paragraph VIII of said agreement. The Agreement shall be amended as follows: 

	1.)
	Subparagraph
III (D) (v) shall be amended to include the following language as the last sentence of said Subparagraph: 

"If
the Executive dies while employed by the Bank prior to the Executive's Normal Retirement Age (Subparagraph I [K], then said Deferred Compensation Account balance to be paid
at death hereunder shall assume that the Executive deferred fees as set forth herein until the Executive's Normal Retirement Age and subject to a maximum amount of said deferral as approved by the
Board of the Bank in its sole discretion for said time period from death to the Executive's Normal Retirement Age." 

        This
Amendment shall be effective the 21st day of December, 2001. To the extent that any term, provision, or paragraph of said agreement is not specifically amended herein, or in any
other amendment thereto, said term, provision, or paragraph shall remain in full force and effect as set forth in said August 14, 2000 Agreement (effective July 1, 2000). 

        IN
WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Amendment and executed the original thereof on the first day set forth hereinabove, and that, upon
execution, each has received a conforming copy. 

	 	 	BUTTE COMMUNITY BANK

Paradise, California	 	 
	

/s/  CRAIG LARSON      	
 	

By:	
 	

/s/  DON LEFORCE      
	
	 	 	 	

	Witness	 	 	 	 	 	Title
	

/s/  K C ROBBINS      
 Witness	
 	

/s/  JOHN F COGER      
 John F. Coger

13

QuickLinks

EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN EXECUTIVE AGREEMENT

EXHIBIT "A"

EXHIBIT "B"

AMENDMENT TO THE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN EXECUTIVE AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]