Russell A. Colombo

Employment Agreement

Change in Control Agreement

Salary Continuation Agreement

 

EX-1.1 2 ex10_1.htm EXHIBIT 10.1


 

EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

 

This Agreement is made and is effective as of January 23, 2009, by and between Bank of Marin, a California state chartered bank ("Bank"), its parent corporation, Bank of Marin Bancorp, a California corporation (“Bancorp”) (collectively, the “Company”) and Russell A. Colombo ("Executive").

 

WHEREAS, Company desires to employ Executive in the capacity of President and Chief Executive Officer, and Executive's background, expertise and efforts are expected to contribute to the success and financial strength of the Company; and

 

WHEREAS, the Company wishes to assure itself of the opportunity to benefit from Executive's services for the period provided in this Agreement, and Executive wishes to serve in the employ of the Company on a full-time basis solely in accordance with the terms hereof for such purposes; and

 

WHEREAS, the parties previously entered into that certain Change of Control Agreement dated October 26, 2007 (the “Change of Control Agreement”) providing Executive certain benefits in the event of a significant corporate event;

 

WHEREAS, the Board of Directors of the Company ("Board") has determined that the best interests of the Company would be served by Executive's employment with the Company under the terms of this Agreement;

 

NOW, THEREFORE, in order to effect the foregoing, the parties hereto wish to enter into an employment agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

 

 

1.

Definitions.

 

 

(a)

"Agreement" means this employment agreement and any amendments hereto complying with Section 13(a) hereof.

 

 

(b)

"Board" means the Board of Directors of the Company unless the context otherwise requires.

 

 

(c)

Bonus”  means the Executive’s contemplated annual incentive payment for the year of Termination calculated using the then current percentage of base salary as defined in the Company’s files.  The initial percentage will be fifty percent (50%) as provided for in Section 5(c).

 

 

 

 

1


 

 

 

 

(d)

"Cause" means:

 

(i)         Executive's personal dishonesty, incompetence or willful misconduct;

 

(ii)         Executive commits an act or acts or an omission to act which constitutes: (a) a willful breach of duty in the course of Executive’s employment; (b) a habitual neglect of duty; (c) a willful violation of any applicable banking law or regulation; or (d) a willful violation of any policy, procedure, practice, method of operation or specific mode of conduct established by the Board or as set forth in the Company’s Employee Handbook or other policy;

 

(iii)        Executive engages in activity which, in the opinion of the Board, could materially adversely affect Company’s reputation in the community or which evidences the lack of Executive’s fitness or ability to perform Executive’s duties as determined by the Board, in good faith; or

 

(iv)        Executive commits any act or acts or an omission to act which would cause termination of coverage under the Company’s Bankers Blanket Bond as to Executive or as to Company as a whole or any act, which would give rise to a colorable claim by the Company under its Bankers Blanket Bond as determined by the Board in good faith.

 

 

(e)

COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.

 

 

(f)

Confidential Information” means all of Company’s Trade Secrets, as defined in California Civil Code §§3426, et seq., and by this Agreement also expressly includes, but is not limited to: business plans; financial statements/records and budgets; marketing and sales strategies; data, compilations, or lists of past and current client or potential client names, addresses, telephone numbers, fax numbers, email addresses, financial information, and other personal or demographic information related to clients or potential clients; business know-how and show-how; software source code and object code; database applications; and other secret or proprietary information or compilations of information relating to Company’s business.

 

 

(g)

"Code" shall mean the Internal Revenue Code, as amended.

 

 

(h)

"Disability" means physical condition or mental illness resulting in Executive's inability to perform the essential functions of his position with or without reasonable accommodation and shall be deemed to have occurred only after Executive becomes eligible to receive benefit payments pursuant to the Company’s long-term disability insurance plan.

 

 

(i)

"Expiration" means the termination of this Agreement (including Executive's employment hereunder) and of any further obligations of the parties (except as specified in this Agreement) upon completion of the Term.

 

 

 

 

2


 

 

 

 

(j)

"Person" means an individual, a group acting in concert, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization, a government or political subdivision thereof, or any other entity whatsoever.

 

 

(k)

"Term" means the term of this Agreement as provided in Section 4.

 

 

(l)

"Termination" or "Terminate(d)" means the termination of Executive's employment hereunder for any of the following reasons unless the context indicates otherwise:

 

 

(i)

Retirement by Executive;

 

 

(ii)

Death of Executive;

 

 

(iii)

Disability;

 

 

(iv)

Expiration;

 

 

(v)

Termination Without Cause;

 

 

(vi)

Termination for Cause; and

 

 

(vii)

Resignation by Executive.

 

 

(m)

"Termination Without Cause" or "Terminate(d) Without Cause" means the cessation of Executive's employment hereunder for any reason except:

 

 

(i)

Resignation;

 

 

(ii)

Termination for Cause;

 

 

(iii)

Retirement;

 

 

(iv)

Disability;

 

 

(v)

Death; or

 

 

(vi)

Expiration.

 

 

 

 

3


 

 

 

 

(n)

Catch-Up Bonus” means a bonus payable pursuant to either Section 7(a) or (b) in an amount equal to the value of any unvested stock option and/or of any restricted stock award in which the restrictions are not yet fully lapsed.  For purposes of any unvested stock option, “value” shall be determined by subtracting the exercise price of such option from the “average closing price” and multiplying such result by the number of unvested shares subject to such option.  For purposes of any restricted stock award where all restrictions are not yet lapsed, “value” shall be determined by multiplying the “average closing price” by the number of shares that are still restricted in such award.  “Average Closing Price” means the average of the daily closing price of a share of Bancorp’s common stock reported over NASDAQ Global Market during the ten (10) consecutive trading days immediately preceding Executive’s death or Disability, as the case may be..

 

2.          Employment. Notwithstanding any other provision to the contrary contained herein, it is agreed by the parties hereto that the Executive’s employment by the Company hereunder shall be at-will, and that the Company may at any time elect to terminate this Agreement and Executive’s employment for any reason by the affirmative vote of a majority of a quorum of the authorized number of its directors.  In this Agreement, notwithstanding the foregoing, in the event of any Termination Without Cause pursuant to Section 6 of this Agreement, all severance and other benefits provided for in Section 7 of this Agreement shall be provided by the Company to the Executive and no other severance or other benefits shall be due or owing Executive.

 

3.          Position and Responsibilities. The Company and Executive agree that, subject to the provisions of this Agreement, the Company shall employ and the Executive shall serve as President and Chief Executive Officer of Bank of Marin and Bank of Marin Bancorp for the Term of this Agreement.  Executive shall have such responsibilities, duties and authority as are generally associated with such positions and as may from time to time be assigned to the Executive by the Board that are consistent with such responsibilities, duties and authority.  Subject to adjustment by the Board at anytime, attached as Exhibit A is the current list of duties for Executive. During the Term of this Agreement, the Executive shall devote all his time, attention, skill and efforts during normal business hours to the business and affairs of the Company.

 

4.          Term of Agreement. Subject to the terms and provisions of this Agreement, this Agreement and the period of Executive's employment shall be deemed to have commenced as of December 1, 2008 and shall have a two year term subject to automatic annual one year renewals on December 1st of each year, unless either the Company or the Executive gives advance written notice of intent not to renew this Agreement by July 1.  Upon Expiration of the Term after such notice, Executive's employment shall cease without further liability of the parties to each other.  Executive's employment shall also terminate, and the Term of this Agreement will expire, upon Executive's resignation, retirement, death or Disability, or upon Executive's Termination for Cause.

 

 

5.

Salary, Bonus and Related Matters.

 

(a)   Salary. The Company shall pay to the Executive a base salary of Two Hundred Eighty-One Thousand and Thirty-Six Dollars and 00/100 ($281,036.00) annually. Executive’s salary shall be payable at regular intervals in accordance with the Company's normal payroll practices now or hereafter in effect.

 

 

 

 

4


 

 

 

(b)   Adjustments to Salary. Executive's base salary will be annually reviewed in April of each year in accordance with the Company’s standard policy and may be adjusted, based upon such annual performance evaluation, on the anniversary of the effective date of this Agreement.

 

 

(c)   Annual Incentive Payment. Executive has the potential to earn an annual incentive payment of up to fifty percent (50%) of his base salary.  The amount of this annual incentive payment, if any, in any such year shall be based on performance and be determined by the Board, in its sole discretion.

 

(d)   Reimbursement. During the period of the Executive's employment hereunder, the Company will reimburse the Executive in accordance with the Company reimbursement policies for all reasonable, ordinary and necessary business expenses.  In addition, the Company will (i) provide an automobile allowance of Eight Hundred Dollars ($800) per month, (ii) reimburse the Executive’s monthly membership dues for the Marin Country Club and (iii) reimburse necessary air travel expense for Executive’s spouse up to a maximum of $2,000 per year.

 

(e)   Benefit Plans. During the period of the Executive's employment hereunder, the Executive shall be entitled to participate in any current or future benefits plans available to employees or senior officers of the Company in accordance with the terms of such plans, as they may be modified or eliminated from time to time.

 

(f)          Benefits Not in Lieu of Compensation. No benefit or perquisite provided to the Executive will be deemed to be in lieu of base salary, incentive payment or other compensation.

 

(g)         Equipment. The Company will provide the Executive with all equipment needed to perform his duties and such equipment may be modified or eliminated from time to time.

 

 

6.

Termination.

 

(a)         Resignation, Retirement, Death or Disability.  Executive's employment hereunder shall cease at any time by Executive's resignation, or by Executive's retirement, death or Disability.

 

 

 

 

5


 

 

 

(b)   Termination for Cause.  Executive's employment shall cease upon a good faith finding of Cause by the Board; provided, however, that Executive shall be given written notice of the Board's finding of conduct by Executive amounting to Cause for such termination.  Said notice shall be accompanied by a copy of a resolution duly adopted by the affirmative vote of not less than a majority of a quorum of the Board at a duly-noticed meeting of the Board, finding that in the good faith opinion of the Board, Executive was guilty of conduct amounting to Cause and specifying the particulars thereof; provided, however, that after a Change in Control (as defined in the Change in Control Agreement), such resolution may be adopted only by the affirmative vote of not less than a majority of a committee composed of at least three (3) disinterested outside directors of the Company.  In the absence of at least three (3) disinterested outside directors, a determination of Cause shall be submitted to and made by an arbitrator(s) pursuant to Section 12 hereof.

 

(c)   Termination Without Cause.  Executive’s employment may be terminated Without Cause pursuant to this Section 6(c) upon 30 days’ notice for any reason, subject to the payment of all amounts required by Section 7 hereof.

 

(d)   Expiration.  Executive’s employment shall cease upon the expiration of the Term of this Agreement as provided in Section 4 hereof.

 

(e)   Supervisory Suspension.  If the Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s or Bancorp’s affairs by a notice served under Sections 8(e) or (g) of the Federal Deposit Insurance Act or similar statute, rule or regulation, the Company’s obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Company shall, (i) pay the Executive all of the compensation withheld while its obligations under this Agreement were suspended unless a lesser sum is provided for as part of any such dismissal and (ii) reinstate any of its obligations which were suspended except to the extent limited by an such dismissal.

 

(f)          Regulatory Removal.  If the Executive is removed and/or permanently prohibited from participating in the conduct of the Bancorp’s or Bank’s affairs by an order issued under Sections 8(e) or (g) of the Federal Deposit Insurance Act or similar statute, rule or regulation, all obligations of the Company under this Agreement shall terminate as of the effective date of the order.

 

 

7.

Payments to Executive Upon Termination.

 

(a)         Death.  In the event of Termination of this Agreement due to Executive's death, Executive's spouse and/or estate (“Beneficiary”) shall be entitled to a sum equal to three (3) months of base salary at the then effective rate paid to Executive as well as a payment equal to the Executive’s pro-rata Bonus (computed solely on a time basis) up to the date of such death without reduction.  An example of such pro-rata Bonus computation is attached as Exhibit B.  The rights of a Beneficiary in connection with any stock grant, stock award or stock option granted to Executive shall be governed by the plan pursuant to which any such grant, award or option was granted and any related agreement.  In the event that Executive shall have died with any unvested stock option and/or any restricted stock grant for which the restrictions have not fully lapsed, Beneficiary shall also be entitled to a Catch-Up Bonus.

 

 

 

 

6


 

 

 

(b)   Disability.  In the event of Termination of this Agreement due to Executive’s Disability, the Executive or Beneficiary shall be entitled to be paid all benefits in accordance with the terms and procedures of the Company’s long-term disability policy.  In addition, the Company will also pay an amount equal to Executive’s pro-rata Bonus (computed solely on a time basis) up to the date of such disability without reduction.  An example of such pro-rata Bonus computation is attached as Exhibit B.    The rights of Executive or a Beneficiary in connection with any stock grant, stock award or stock option granted to Executive shall be governed by the plan pursuant to which any such grant, award or option was granted and any related agreement.  In the event of Executive’s  shall have become Disabled with any unvested stock option and/or any restricted stock grant for which the restrictions have not fully lapsed, Executive  or his Beneficiary, as the case may be, shall also be entitled to a Catch-Up Bonus.

 

(c)   Retirement.  In the event of Termination of this Agreement due to Executive's retirement, Executive shall be entitled to all benefits generally available to Company employees as of the date of such retirement, without reduction.

 

(d)   Resignation.  In the event of Executive's resignation or upon Expiration, the Company shall have no further obligations to Executive under this Agreement, except as may be expressly required by law.  Executive’s rights under each employee benefit plan in which he participates will be determined in accordance with the terms of the plan.

 

(e)   Cause. In the event Executive is Terminated for Cause, the Company shall have no further obligations to Executive under this Agreement or otherwise, except as may be expressly required by law.

 

(f)    Without Cause.  Upon the occurrence of a Termination Without Cause, as severance pay and in lieu of damages for breach of this Agreement, in the event that the Termination of this Agreement occurs, the Company shall pay to Executive, in the aggregate, a lump sum equal to twelve months base salary then in effect, less applicable state and federal withholdings.  Such lump sum shall be paid six months after Executive’s Termination Without Cause or shall be paid at such earlier time as permitted by Section 409A of the Code.  On the date of such payment, the Company shall also pay an amount equal to the Executive’s pro-rata Bonus earned up to the date of Termination.  For purposes of the preceding sentence, the concept of an “earned” pro-rata Bonus contemplates a proration based on both time and performance.  Thus, the Bonus will be pro-rated on a time basis (up to the date of Termination) and a performance basis (using the results up to the date of Termination of the Executive’s Annual Goals and Objective for such year as a percentage of the same Annual Goals and Objectives adjusted for the pro-rated time period). In no event will the results of such performance proration result in a bonus (i) greater than the Executive would have received on a time proration basis only, nor (ii) less than an amount equal to 50% of the time pro-rated amount.   An example of such pro-rata Bonus computation is attached as Exhibit B.  In addition the Company will pay the Executive’s health premiums under COBRA for eighteen (18) months and will pay dental/vision premiums under COBRA for eighteen (18) months; provided, however, that Company’s obligations to pay for COBRA benefits shall cease immediately upon Executive becoming employed or obtaining other health insurance coverage.

 

 

 

 

7


 

 

 

(g)   All payments provided in this Section 7 shall be paid in cash from the general funds of the Bank, and no special or separate fund need be established and no other segregation of assets need be made to assure payment.  Bancorp shall have no obligation under this Agreement to make any payments to Executive and Executive agrees that all payments under this Agreement, including this Section 7, shall be the sole responsibility of the Bank.

 

(h)   The Company and Executive agree that the payments being made under this Agreement represent reasonable compensation for services and that neither the Company nor Executive will file any returns or reports which take a contrary position.

 

(i)          The receipt of the amounts described in this Section 7, if any, shall constitute Executive’s sole remedy for breach of this Agreement against the Company and its officers, directors, employees and agents.

 

(j)    Limitation of Payment.  This Agreement, and any payments or benefits hereunder (including the indemnification benefits provided for in Section 12), are made expressly subject to and conditioned upon compliance with all federal and state law, regulations and policies relating to the subject matter of this Agreement, including but not limited to the provisions of law codified at 12 U.S.C. §1828(k), the regulations of the FDIC codified as 12 C.F.R. Part 359, and any successor or similar federal or state law or regulation applicable to the Company.  Executive acknowledges that he understands the sections of law and regulations cited above and that the Company’s obligations to make payments hereunder are expressly relieved if such payments violate any federal or state law or regulation applicable to the Company.

 

8.          Limitation of Benefit/Golden Parachute Adjustment.   Notwithstanding anything in the foregoing to the contrary, if any payments provided for in this Agreement, together with any other payments which Executive has the right to receive from the Company would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Code), the payments pursuant to this Agreement shall be reduced to the largest amount as will result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code, provided, however, that the determination as to whether any reduction in the payments under this Agreement pursuant to this proviso is necessary shall be made in good faith by the firm providing tax services to the Company, and such determination shall be conclusive and binding on the Company and Executive with respect to the treatment of the payment for tax reporting purposes.

 

 

 

 

8


 

 

 

 

9.

Confidentiality, Non-Solicitation and Non-Interference.

 

(a)         Executive agrees and covenants to take all reasonable steps necessary to protect all Confidential Information from disclosure to, or use by, any unauthorized person or entity.

 

(b)         Executive agrees to return all Confidential Information to Company upon Termination.

 

(c)         Executive agrees that he shall not at any time, directly or indirectly, take any action that will or may have the effect of discouraging any past or present client, customer, supplier, service provider, licensee, licensor, business prospect, or other business associate of Company (collectively "Client(s) and/or Associate(s)") from entering into or maintaining, or causing any Client or Associate to terminate or cease, a relationship with Company, or which would in any other way, directly or indirectly, disrupt, damage, impair, or interfere with the business or contractual relations of Company with its Clients or Associates.

 

(d)         To safeguard Company’s Confidential Information and the relationships Company has developed with its Clients and Associates and employees over many years and with great expense, Executive covenants and agrees that he will not at any time during Executive’s employment, or within twelve (12) months following termination of employment, directly or indirectly, whether on his own behalf or on behalf of any other person or entity, solicit the business of any current Client or Associate, or employee of Company, other than for the sole and exclusive benefit of Company. Executive expressly acknowledges and agrees that this non-solicitation clause is necessary and appropriate to protect the legitimate business interests and Confidential Information of Company.

 

(e)         If Executive learns or has been notified that a Client or Associate has been solicited, either intentionally or unintentionally, by Executive during the term of this Agreement or within twelve (12) months following Executive’s termination of employment, Executive agrees to refrain from accepting or doing any business with said solicited Client or Associate for a period of twelve (12) months from the date of the solicitation.

 

 

 

 

9


 

 

 

10.        Waivers not to be Continued. Any waiver by a party of any breach of this Agreement by the other party shall not be construed as a continuing waiver or as consent to any subsequent breach by the other party.

 

11.        Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice.

 

 

A.

If to the Company, to:

 

Bank of Marin Bancorp

504 Redwood Blvd., #100

Novato, CA  94947

Facsimile: 415/884-9153

 

with a copy to:

 

John F. Stuart, Esq.

REITNER, STUART & MOORE

1319 Marsh Street

San Luis Obispo, California 93401

Facsimile: 805/545-8599

 

 

B.

If to Executive, to:

 

Russell A. Colombo

504 Redwood Blvd., #100

Novato, CA 94947

Facsimile: 415/884-9153

 

and to such other or additional person or persons as either party shall have designated to the other party in writing by like notice.

 

12.        Arbitration. The parties agree that any and all disputes, controversies or claims of any kind or nature, including but not limited to any arising out of or in any way related to Executive’s employment with or separation from the Company, shall be submitted to binding arbitration under the auspices and rules of the American Arbitration Association (“AAA”) in Fresno County, California.  Included within this provision are any claims alleging fraud in the inducement of this Agreement, or relating to the general validity or enforceability of this Agreement, or claims based on a violation of any local, state or federal law, such as claims for discrimination or civil rights violations under Title VII of the Civil Rights Act of 1964, the California Fair Employment and Housing Act, the Age Discrimination in Employment Act and the Americans with Disabilities Act.  The parties shall each bear their own costs and attorneys’ fees incurred in conducting the arbitration and, except for such disputes where Executive asserts a claim under a state or federal statute prohibiting discrimination in employment (“a Statutory Claim”), or unless required otherwise by applicable law, shall split equally the fees and administrative costs charged by the arbitrator and AAA.  In disputes where Executive asserts a Statutory Claim against the Company, Executive shall be required to pay only the AAA filing fee to the extent such filing fee does not exceed the fee to file a complaint in state or federal court.  The Company shall pay the balance of the arbitrator’s fees and administrative costs.  The prevailing party in the arbitration, as determined by the arbitrator, shall be entitled to recover his or its reasonable attorneys’ fees and costs, including the costs or fees charged by the arbitrator and AAA.  In disputes where the Executive asserts a Statutory Claim, reasonable attorneys’ fees shall be awarded by the arbitrator based on the same standard as such fees would be awarded if the Statutory Claim had been asserted in state or federal court.  Judgment upon an award rendered by the arbitrator may be entered in any competent court having jurisdiction over the dispute. Executive understands that arbitration is in lieu of any and all other civil legal proceedings and that he is waiving any right he may have to resolve disputes through court or trial by jury.

 

 

 

 

10


 

 

 

 

13.

General Provisions.

 

(a)         Except for the Change of Control Agreement, this Agreement constitutes the entire agreement by the parties with respect to the subject matter hereof, and supersedes and replaces all prior agreements among or between the parties, unless otherwise provided herein. No amendment, waiver or termination of any of the provisions hereof shall be effective unless in writing and signed by the party against whom it is sought to be enforced. Any written amendment, waiver, or termination hereof executed by the Company and Executive shall be binding upon them and upon all other Persons, without the necessity of securing the consent of any other Person, and no Person shall be deemed to be a third-party beneficiary under this Agreement.

 

(b)         This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement.

 

(c)         Except as otherwise expressly set forth herein, no failure on the part of any party hereto to exercise and no delay in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

 

(d)         The headings of the Sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof.

 

(e)         If for any reason any provision of this Agreement is held invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, such invalidity or unenforceability shall in no way effect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent consistent with law continue in full force and effect.

 

 

 

 

11


 

 

 

(f)          This Agreement shall be governed and construed and the legal relationships of the parties determined in accordance with the laws of the State of California applicable to contracts executed and to be performed solely in the State of California.

 

(g)         The Company shall require any successor in interest (whether direct or indirect or as a result of purchase, merger, consolidation, change in control or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform the obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

(h)         Executive acknowledges that he has been encouraged to consult with legal counsel of Executive’s choosing concerning the terms of this Agreement prior to executing this Agreement. Executive acknowledges that this Agreement has been prepared by Reitner, Stuart & Moore, which has served as counsel to the Company in this matter and not as counsel to Executive.  Any failure by Executive to consult with competent counsel prior to executing this Agreement shall not be a basis for rescinding or otherwise avoiding the binding effect of this Agreement. The parties acknowledge that they are entering into this Agreement freely and voluntarily, with full understanding of the terms of this Agreement. Interpretation of the terms and provisions of this Agreement shall not be construed for or against either party on the basis of the identity of the party who drafted the terms or provisions in question.

 

 

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

 

ATTEST:

BANK OF MARIN BANCORP

 

 

         /S/ N. Boatright             

   /S/ J. Sklar                     

 

By: Joel Sklar, M.D.           

 

Its: Chairman of the Board   

 

 

 

 

 

THE EXECUTIVE

 

 

   /S/ N. Boatright                   

   /S/ Russell A. Colombo    

Witness

 

 

 

 

 

12


 

 

 

EXHIBIT A

 

In addition to such responsibilities, duties and authority set forth in the Articles of Incorporation and Bylaws of Bank and the Articles of Incorporation and Bylaws of Bancorp and as are generally associated with the positions of President and Chief Executive Officer, Executive will be expected to (i) plan, develop, and direct operational and financial policies and practices to ensure that the Company’s objectives, goals, and institutional growth are met and are in accordance with the polices of the Board of Directors and government regulations and (ii) plan and develop investment, loan, interest, and reserve policies to ensure optimum monetary returns in accordance with availability of investment funds, government restrictions, and sound financial practices.  In addition, the Executive will serve on the Board of Directors of the Bank of Marin and Bank of Marin Bancorp.

 

With the prior approval of the Board, from time to time, Executive may serve, or continue to serve, on the boards of directors of, and hold any other offices or positions in charitable, political,  civic organizations or business entities, which, in such Board’s judgment, will not present any material conflict of interest with the Company and will not unfavorably affect the performance of Executive’s duties pursuant to this Agreement. Any such approval shall not be unreasonably withheld.   Subject to the provisions of the Bank’s code of conduct, nothing contained herein will be deemed to limit the ability of Executive to make passive investments.

 

In addition, to the extent permitted by law and consistent with the oversight responsibilities of the Board, Executive shall have the full authority and support of the Board to hire and fire all officers and employees of the Company from time to time.

 

Further, Executive shall have the full authority of the Company and the Board to execute contracts, leases and other related documents for the purchase of capital equipment and improvements, provided such expenditures and obligations are contained in and within the annual budget for the Company, which has been adopted or approved by the Board.

 

 

 

 

 

13


 

 

 

EXHIBIT B

 

 

Example section 7. (a) & (b)

 

Event date April 6th

 

(current salary $281,036) x (current bonus percent 50%) = (maximum bonus potential $140,518) $140,518 x (time prorated period 96/365 days 26.3%) = $36,956

 

 

Example section 7. (f)

 

 

Example 1

 

Event date April 6th

 

(current salary $281,036) x (current bonus Percent 50%) = (maximum bonus potential $140,518) x (time prorated period 96/365 days 26.3%) = (time prorated bonus $36,956) x (performance measurement for the prorated time period 88% = 88%) = $32,521

 

Example 2

 

Event date April 6th

 

(current salary $281,036) x (current bonus Percent 50%) = (maximum bonus potential $140,518) x (time prorated period 96/365 days 26.3%) = (time prorated bonus $36,956) x (performance measurement for the prorated time period 38% = 50%) = $18,478


 

14


EX-10.1 2 ex10_1.htm EXHIBIT 10.1


 

EXHIBIT 10.1

AGREEMENT

 

This Agreement is made and is effective as of October 26, 2007 by and between Bank of Marin (“Company”) and _____________ (“Executive”).

 

WHEREAS, Executive is currently employed by the Company and its parent company Bank of Marin Bancorp, a California corporation (“Bancorp”)  in the capacities of ______________ of each of Company and Bancorp, and Executive’s background, expertise and efforts have contributed to the success and financial strength of the Company; and

 

WHEREAS, the Company wishes to assure itself of the continued opportunity to benefit from Executive’s services and Executive wishes to serve in the employ of the Company for such purposes;

 

WHEREAS, the Board of Directors of the Company (“Board”) has determined that the best interests of the Company would be served by setting forth the benefits which the Company will provide to Executive if the Executive remains employed by the Company up to and including the consummation of a Change in Control of the Company; and

 

WHEREAS, the Company wishes to provide a specific incentive to Executive to remain in the employ of the Company through and including the consummation of any Change in Control of the Company, as defined herein.

 

NOW, THEREFORE, in order to effect the foregoing, the parties hereto wish to enter into an Agreement on the terms and conditions set forth below.  This Agreement (“Agreement”) therefore sets forth those benefits which the Company will provide to Executive in the event of a “Change in Control of the Company” (as defined in paragraph 2) under the circumstances described below or in contemplation of a Change in Control as discussed in Paragraph 1 below.  Accordingly, in consideration of the premises and the respective covenants and Agreements of or in contemplation of a Change in Control as discussed in Paragraph 1 below herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.   TERM.  The term of this Agreement shall be one year from the date hereof, subject to annual automatic renewal, but the Agreement may be terminated by the Company following 90 days written notification without liability to the Executive prior to the occurrence of a Change of Control. If such termination occurs, Executive shall not be entitled to any of the benefits provided hereunder; provided, however, a termination of this Agreement, in contemplation of but prior to a Change in Control shall be presumed to be a termination following a Change in Control if such termination is reasonably proximate in time to the public announcement of said Change in Control. If a Change in Control of the Company should occur while Executive is still an employee of the Company, then this Agreement shall continue in effect from the date of such Change in Control of the Company for so long as Executive remains an employee of the Company, but in no event for more than one year following the consummation of a Change in Control of the Company; provided, however, that the expiration of the term of this Agreement shall not adversely affect Executive’s rights under this Agreement which have accrued prior to such expiration. If no Change in Control of the Company occurs before Executive’s status as an employee of the Company is terminated, this Agreement shall expire on such date.

 

 

 

 

1


 

 

 

2.   CHANGE IN CONTROL. For purposes of this Agreement, a “Change in Control of the Company” shall be deemed to have occurred upon the consummation of (A) any change in the ownership of the Company (as defined in Treasury Regulation §1.409A-3(i)(5)(v)), (B) a change in effective control of the Company (as defined in Treasury Regulation §1.409A-3(i)(5)(vi)), or (C) a change in the ownership of a substantial portion of the assets of the Company (as defined in Treasury Regulation §1.409A-3(i)(5)(vii)).  Such treasury regulations presently provide as follows: (A) A change in the ownership of a corporation occurs on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulation §1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation.  (B) A change in effective control of the corporation occurs only on either of the following dates: (1) The date any one person, or more than one person acting as a group (as determined under Treasury Regulation §1.409A-3(i)(5)(v)(B)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing 30 percent or more of the total voting power of the stock of such corporation, or (2) The date a majority of members of the corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors before the date of the appointment or election, provided that for purposes of this paragraph the term corporation refers solely to the relevant corporation identified in Treasury Regulation §1.409A-3(i)(5)(ii) for which no other corporation is a majority shareholder for purposes of that paragraph.  (C) A change in the ownership of a substantial portion of a corporation’s assets occurs on the date that any one person, or more than one person acting as a group (as determined in Treasury Regulation §1.409A-3(i)(5)(v)(B)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all the assets of the corporation immediately before such acquisition or acquisitions (or such higher amount specified by the plan no later than the date by which the time and form of payment must be established under §1.409A-2).  For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

3.   TERMINATION FOLLOWING CHANGE IN CONTROL.  If a Change in Control of the Company shall have occurred while Executive is still an employee of the Company, Executive shall be entitled to the payments and benefits provided in paragraph 4 hereof upon the subsequent termination of Executive’s employment, within one year following the consummation of a Change in Control of the Company, by Executive or by the Company unless such termination is (a) because of  death, “Disability” or “Retirement” (as defined below), (b) by the Company for “Cause” (as defined below), or (c) by Executive other than for “Good Reason” (as defined below), in any of which events Executive shall not be entitled to receive benefits under this Agreement.

 

 

 

 

2


 

 

 

(i) Disability.  If, as a result of Executive’s incapacity due to physical or mental illness,  Executive shall have been absent from her duties with the Company on a full-time basis for 90 days, the Company may terminate this Agreement for “Disability.”

 

(ii) Retirement.  Retirement shall mean the voluntary termination by Executive of her employment for other than “Good Reason” (as defined below) which termination qualifies as retirement in accordance with any pension plan adopted by the Company, pursuant to the Company’s normal retirement policies, or in accordance with any retirement arrangement established with Executive’s consent with respect to Executive; provided, however, that no mandatory retirement, whether under any pension plan or in accordance with any such other retirement arrangement, shall constitute Retirement for purposes of this Agreement, unless Executive has previously consented thereto in writing.

 

(iii)  Cause.   Executive’s employment shall cease following a Change in Control upon a good faith finding of Cause by the Board.  “Cause” hereunder means the following:

 

(A)  Executive’s personal dishonesty, incompetence or willful misconduct, including but not limited to a breach of the Company’s or Bancorp’s code of ethics or code of conduct;

 

(B)  Executive’s breach of fiduciary duty involving personal profit;

 

(C)  Executive’s intentional failure to perform Executive’s duties for the Company after a written demand for performance is given to Executive by the Board which demand specifically identifies the manner in which the Board believes that Executive has not performed her duties;

 

(D)  Executive’s willful violation of any law, rule, regulation or final cease and desist order (other than traffic violations or similar minor offenses) to the extent detrimental to the Company’s business or reputation; or

 

(E)   the willful engaging by Executive in gross misconduct materially and demonstrably injurious to the Company.

 

Notwithstanding any of the foregoing, Executive remains an “at will” employee of the Company and the Company can without cause terminate Executive’s employment prior to any Change in Control in the discretion of the Board of Directors of the Company.

 

(iv)  Resignation for Good Reason.  Following a Change in Control during the Term hereof, Executive may, under the following circumstances, regard Executive's employment as being constructively terminated by the Company (and in such case Executive's employment shall terminate) and may, therefore, Resign for Good Reason within one year of Executive's discovery of the occurrence of one or more of the following events, any of which shall constitute "Good Reason" for such Resignation for Good Reason:

 

 

 

 

3


 

 

 

(A)  Without Executive's express written consent, an adverse change in Executive’s position or title, the assignment to the Executive of any duties or responsibilities inconsistent with the Executive’s position or removal of the Executive from or any failure to re-elect the Executive to any such positions;

 

(B)  A reduction of the Executive’s base salary;

 

(C)  A 20%, or greater, reduction in non-salary benefits;

 

(D)  Failure of the Company to obtain the assumption of this Agreement by any successor; or;

 

(E)  Requirement by the Company that the Executive be based anywhere other than within 40 miles of the Company’s current headquarters in Novato, California

 

(v)  Notice of Termination.  Any termination by the Company pursuant to subparagraphs (i), (ii) or (iii) above or by Executive pursuant to subparagraph (iv) above shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

 

(vi)  Date of Termination.  “Date of Termination” shall mean

 

(A)  if this Agreement is terminated for Disability, thirty days after Notice of Termination is given,

 

(B)  if Executive’s employment is terminated pursuant to subparagraph (iv) above, the date specified in the Notice of Termination,

 

(C)  if Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given (or, if a Notice of Termination is not given, the date of such termination), and

 

(D)  if Executive is entitled to compensation pursuant to paragraph 4, the date determined pursuant to such paragraph.

 

4.    COMPENSATION DURING DISABILITY OR UPON TERMINATION.

 

(i) If, after a Change in Control of the Company, Executive shall fail to perform her duties because of a Disability, Executive shall continue to receive her full base salary monthly at the rate then in effect until her employment is terminated pursuant to paragraph 3(i) hereof.

 

 

 

 

4


 

 

 

(ii)  If, after a Change in Control of the Company, Executive’s employment shall be terminated for Cause, the Company shall pay Executive her full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and the Company shall have no further obligations to Executive under this Agreement.

 

(iii)  If, after a Change in Control of the Company, the Company shall terminate Executive’s employment (other than pursuant to paragraph 3(i) or 3(iii) hereof or by reason of death or Retirement as provided in Paragraph 3(ii)) or Executive shall terminate her employment for Good Reason, Executive shall be entitled to payments pursuant to this paragraph 4:

 

The Company shall pay to Executive as severance pay (and without regard to the provisions of any benefit plan) in a lump sum on the fifth day following the Date of Termination, the following amounts:

 

 

(x)

The average salary of the Executive for the last three full years of service multiplied by Executive’s Seniority Factor; and

 

 

(y)

The Executive’s annual bonus for the previous year; and

 

 

(z)

Executive’s health premiums under COBRA for 18 months and Dental/Vision premiums under COBRA for 12 months.

 

Based on Executive’s position as ___________, the Seniority Factor shall be X.X.

 

(iv)  Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this paragraph 4 be reduced by any compensation earned by Executive as the result of employment by another employer after the Date of Termination, or otherwise.

 

(v)  The provisions of this Agreement, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish Executive’s existing rights, or rights which would accrue solely as a result of the passage of time, under any employee benefit plan of the Company, any employment Agreement or other contract, plan or arrangement of the Company, except to the extent necessary to prevent double payment under any severance plan or program of the Company in effect at the Date of Termination.

 

5.    SUCCESSOR’S BINDING AGREEMENT

 

(i)  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by Agreement in form and substance satisfactory to Executive expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

 

 

 

5


 

 

 

(ii)  This Agreement shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees. If Executive should die while any amounts would still be payable to Executive hereunder if Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, if there be no such designee, to Executive’s estate.

 

6.   NO EMPLOYMENT AGREEMENT.  In consideration of the foregoing obligations of the Company, Executive agrees to be bound by the terms and conditions of this Agreement and to remain in the employ of the Company during any period following any public announcement by any person of any proposed transaction or transactions which, if effected, would result in a Change in Control of the Company until a Change in Control of the Company has taken place or, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control of the Company.  Subject to the foregoing including but not limited to the provisions contained in Paragraph 1 that a termination in contemplation of a Change in Control entitles Executive to the amounts provided in Section 4, nothing contained in this Agreement shall impair or interfere in any way with Executive’s right to terminate her employment or the right of the Company to terminate Executive’s employment with or without cause prior to a Change in Control of the Company.  Nothing contained in this Agreement shall be construed as a contract of employment between the Company and Executive or as a right for Executive to continue in the employ of the Company, or as a limitation of the right of the Company to discharge Executive with or without cause prior to a Change in Control of the Company.

 

7.   NOTICE.  For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the last page of this Agreement, provided that all notices to the Company should be directed to the attention of the Chairman of the Company’s Compensation Committee, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

8.   FURTHER ASSURANCES.  Each party hereto agrees to furnish and execute such additional forms and documents, and to take such further action, as shall be reasonable and customarily required in connection with the performance of this Agreement or the payment of benefits hereunder.

 

9.   MISCELLANEOUS.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Executive and such officer as may be specifically designated by the Board of Directors of the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No Agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.  This Agreement contains the entire Agreement among the parties and supersedes and replaces any prior Agreement between the parties concerning the subject matter hereof.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California.

 

 

 

 

6


 

 

 

10.  VALIDITY.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

11.  COUNTERPARTS.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

12.  ARBITRATION.  Any dispute or controversy arising or in connection with this Agreement shall, upon written request of one party to the other, be submitted to and settled exclusively by arbitration pursuant to the rules of the American Arbitration Association.  Judgment may be entered on the arbitrator's award in any court of competent jurisdiction.  The cost of such arbitration, including reasonable attorney’s fees, shall be borne by the losing party or in such proportions as the arbitrator(s) shall decide.  Arbitration shall be the exclusive remedy of Executive and the Company and the award of the arbitrator(s) shall be final and binding upon the parties.  All reasonable costs, including reasonable attorney’s fees, incurred in enforcing an arbitration award in court, or of seeking a court order to compel arbitration, shall be borne by the losing party in such proceedings.

 

13.  ADVICE OF COUNSEL.  Executive acknowledges that he has been encouraged to consult with legal counsel of her choosing concerning the terms of this Agreement prior to executing this Agreement.  Any failure by Executive to consult with competent counsel prior to executing this Agreement shall not be a basis for rescinding or otherwise avoiding the binding effect of this Agreement.  The parties acknowledge that they are entering into this Agreement freely and voluntarily, with full understanding of the terms of this Agreement.  Interpretation of the terms and provisions of this Agreement shall not be construed for or against either party on the basis of the identity of the party who drafted the terms or provisions in question.

 

14.  REDUCTION OF PAYMENT.  Notwithstanding anything in the foregoing to the contrary, if the severance payment or any of the other payments provided for in this Agreement, together with any other payments which Executive has the right to receive from the Company would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended, or such similar set of laws (the “Code”)), the payments pursuant to this Agreement shall be reduced to the largest amount as will result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code, provided, however, that the determination as to whether any reduction in the payments under this Agreement pursuant to this proviso is necessary shall be made in good faith by Perry-Smith LLP or if such firm is no longer providing tax services to Company to such other advisor as shall be mutually acceptable to Company and Executive, and such determination shall be conclusive and binding on the Company and Executive with respect to the treatment of the payment for tax reporting purposes.

 

 

 

 

7


 

 

 

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

 

ATTEST:

 

BANK OF MARIN

 

 

Pell Plaza

 

 

504 Redwood Boulevard, Suite 100

 

 

Novato, CA 94947

 

 

 

 

 

 

 

 

 

Witness

 

President  & CEO

 

 

Russell A. Colombo

 

 

 

 

 

 

 

 

THE EXECUTIVE

 

 

Pell Plaza

 

 

504 Redwood Boulevard, Suite 100

 

 

Novato, CA 94947

 

 

 

 

 

 

 

 

 

Witness

 

XXXXXXXXXX

 

   

8


BACK TO TOP

EX-10.1 3 ex10_1.htm EXHIBIT 10.1

 


EXHIBIT 10.1

 

BANK OF MARIN

SALARY CONTINUATION AGREEMENT BY AND BETWEEN BANK OF MARIN AND RUSSELL COLOMBO, DATED JANUARY 1, 2011

 

This SALARY CONTINUATION AGREEMENT (this “Agreement”) is adopted this 1st day of January, 2011, by and between Bank of Marin, a state-chartered commercial bank located in Novato, California (the “Bank”), and Russell Colombo (the “Executive”).

 

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Bank.  This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.

 

Article 1

Definitions

 

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

 

1.1

Account Value” means the amount shown on Schedule A under the heading Account Value.  The parties expressly acknowledge that the Account Value may be different than the liability that should be accrued by the Bank, under Generally Accepted Accounting Principles (“GAAP”), for the Bank’s obligation to the Executive under this Agreement.  The Account Value on any date other than the end of a Plan Year shall be determined by adding the prorated increase attributable for the current Plan Year to the Account Value for the previous Plan Year.

 

1.2

Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive pursuant to Article 4.

 

1.3

Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.

 

1.4

Board” means the Board of Directors of the Bank as from time to time constituted.

 

1.5

Change in Control” means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Code Section 409A and regulations thereunder.

 

1.6

Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, including such regulations and guidance as may be promulgated after the Effective Date.

 

 

 


 

 

1.7

Disability” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Bank.  Medical determination of Disability may be made by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the Bank provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.  Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

 

1.8

Domestic Relations Order” means any judgment, decree, or order (including approval of a property settlement agreement) which (i) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of the Participant, (ii) is made pursuant to a state domestic relations law (including a community property law) and (iii) meets the requirements of Code Section 414(p)(1)(B).

 

1.9

Early Termination” means the Executive’s Separation from Service before attainment of Normal Retirement Age except when such Separation from Service occurs within twenty-four (24) months following a Change in Control or due to death or Termination for Cause.

 

1.10

Effective Date” means January 1, 2011.

 

1.11

Normal Retirement Age” means the Executive’s age sixty-five (65).

 

1.12

Plan Administrator” means the Board or such committee or person as the Board shall appoint.

 

1.13

Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.  The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following December 31.

 

1.14

Schedule A” means the schedule attached to this Agreement and made a part hereof.  Schedule A shall be updated upon a change in any of the benefits under Articles 2 or 3.

 

1.15

Separation from Service” means termination of the Executive’s employment with the Bank for reasons other than death or Disability.  Whether a Separation from Service has occurred is determined in accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than thirty-six (36) months).

 

 

 


 

 

1.16

Specified Employee” means an employee who at the time of Separation from Service is a key employee of the Bank, if any stock of the Bank, or any includable parent company or subsidiary under Code Section 409A, is publicly traded on an established securities market or otherwise.  For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of 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 the twelve (12) month period ending on December 31 (the “identification period”).  If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.

 

1.17

Termination for Cause” means Separation from Service for:

 

 

(a)

Gross negligence or gross neglect of duties to the Bank;

 

(b)

Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Bank; or

 

 

(c)

Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Bank.

 

1.18

“Trust” or “Trusts” shall have the meaning given such terms in Section 9.6.

 

 

 


 

 

Article 2

Distributions During Lifetime

 

2.1

Normal Retirement Benefit.  Upon Separation from Service after attaining Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

 

 

2.1.1

Amount of Benefit.  The annual benefit under this Section 2.1 is Eighty Nine Thousand Dollars ($89,000).

 

 

2.1.2

Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Separation from Service.  The annual benefit shall be distributed to the Executive for seven (7) years.

 

2.2

Early Termination Benefit.  If Early Termination occurs, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

 

 

2.2.1

Amount of Benefit.  The annual benefit under this Section 2.2 is the amount set forth on Schedule A as of the end of the Plan Year preceding Separation from Service.

 

 

2.2.2

Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Normal Retirement Age.  The annual benefit shall be distributed to the Executive for seven (7) years.

 

2.3

Disability Benefit.  If the Executive experiences a Disability prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article.

 

 

2.3.1

Amount of Benefit.  The annual benefit under this Section 2.3 is the amount set forth on Schedule A as of the end of the Plan Year preceding Disability.

 

 

2.3.2

Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Normal Retirement Age.  The annual benefit shall be distributed to the Executive for seven (7) years.

 

2.4

Change in Control Benefit.  If a Change in Control occurs followed within twenty-four (24) months by Separation from Service prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article.

 

 

2.4.1

Amount of Benefit.  The benefit under this Section 2.4 is the amount set forth on Schedule A as of the end of the Plan Year preceding Separation from Service.

 

 

2.4.2

Distribution of Benefit.  The Bank shall distribute the benefit to the Executive in a lump sum within sixty (60) days following Separation from Service.

 

 

 


 

 

 

2.4.3

Parachute Payments.  Notwithstanding any provision of this Agreement to the contrary, and to the extent allowed by Code Section 409A, if any benefit payment under this Section 2.4 would be treated as an “excess parachute payment” under Code Section 280G, the Bank shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment.

 

2.5

Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 2.5 shall govern all distributions hereunder.  If benefit distributions which would otherwise be made to the Executive due to Separation from Service are limited because the Executive is a Specified Employee, then such distributions shall not be made during the first six (6) months following Separation from Service.  Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service.  All subsequent distributions shall be paid in the manner specified.

 

2.6

Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred hereunder, then the Bank may make a limited distribution to the Executive in a manner that conforms to the requirements of Code section 409A.  Any such distribution will decrease the Executive’s benefits distributable under this Agreement.

 

2.7

Change in Form or Timing of Distributions.  For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend this Agreement to delay the timing or change the form of distributions.  Any such amendment:

 

 

(a)

may not accelerate the time or schedule of any distribution, except as provided in Code Section 409A;

 

(b)

must, for benefits distributable under Sections 2.2 and 2.3, be made at least twelve (12) months prior to the first scheduled distribution;

 

 

(c)

must, for benefits distributable under Sections 2.1, 2.2 and 2.4, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

 

(d)

must take effect not less than twelve (12) months after the amendment is made.

 

2.8

Domestic Relations Orders.  The Bank shall fulfill any Domestic Relations Order which the Executive presents to the Plan Administrator.  The maximum amount which may be paid out pursuant to this Section 2.8 is the Account Value balance as of the day a Domestic Relations Order is presented.  At the time the Bank fulfills a Domestic Relations Order, the Account Value balance shall be reduced by the amount paid to fulfill the Domestic Relations Order, and the benefits to be paid under Sections 2.1, 2.2, 2.3 or 2.4 or Article 3 hereof shall reflect such reduced amount.

 

 

 


 

 

Article 3

Distribution at Death

 

3.1

Death During Active Service.  If the Executive dies prior to Separation from Service, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1.  This benefit shall be distributed in lieu of any benefit under Article 2.

 

 

3.1.1

Amount of Benefit.  The benefit under this Section 3.1 is the amount set forth on Schedule A as of the end of the Plan Year preceding the Executive’s death.

 

 

3.1.2

Distribution of Benefit.  The Bank shall distribute the benefit to the Beneficiary in a lump sum on the first day of the fourth month following the Executive’s death.  The Beneficiary shall be required to provide the Executive’s death certificate to the Bank.

 

3.2

Death During Distribution of a Benefit.  If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the remaining Account Value in a lump sum on the first day of the fourth month following the Executive’s death.  The Beneficiary shall be required to provide the Executive’s death certificate to the Bank.

 

3.3

Death Before Benefit Distributions Commence. If the Executive is entitled to benefit distributions under this Agreement but dies prior to the date that commencement of said benefit distributions are scheduled to be made under this Agreement, the Bank shall distribute to the Beneficiary the Account Value in a lump sum on the first day of the fourth month following the Executive’s death.  The Beneficiary shall be required to provide the Executive’s death certificate to the Bank.

 

Article 4

Beneficiaries

 

4.1

In General.  The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Executive participates.

 

4.2

Designation.  The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned to the Plan Administrator.  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.  The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death.

 

 

 


 

 

4.3

Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

 

4.4

No Beneficiary Designation.  If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.  If the Executive has no surviving spouse, any benefit shall be paid to the Executive's estate.

 

4.5

Facility of Distribution.  If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.

 

Article 5

General Limitations

 

5.1

Termination for Cause.  Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is terminated by the Bank or an applicable regulator due to a Termination for Cause.

 

5.2

Suicide or Misstatement.  No benefit shall be distributed if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank ultimately denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

 

5.3

Removal/Golden Parachute. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.  Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject to compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other regulations or guidance promulgated thereunder.

 

 

 


 

 

Article 6

Administration of Agreement

 

6.1

Plan Administrator Duties.  The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administra­tion of this Agreement and (ii) decide or resolve any and all ques­tions, including interpretations of this Agreement, as may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A.

 

6.2

Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Bank.

 

6.3

Binding Effect of Decisions.  Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

 

6.4

Indemnity of Plan Administrator.  The Bank shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.

 

6.5

Bank Information.  To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circum­stances of the Executive’s death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require.

 

6.6

Annual Statement. The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement.

 

Article 7

Claims And Review Procedures

 

7.1

Claims Procedure.  An Executive or Beneficiary (“claimant”) who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows:

 

 

7.1.1

Initiation – Written Claim.  The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

 

 

 


 

 

 

7.1.2

Timing of Plan Administrator Response.  The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim.  If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

 

 

7.1.3

Notice of Decision.  If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial.  The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

 

 

(a)

The specific reasons for the denial;

 

(b)

A reference to the specific provisions of this Agreement on which the denial is based;

 

 

(c)

A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed;

 

(d)

An explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and

 

 

(e)

A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

 

7.2

Review Procedure.  If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial as follows:

 

 

7.2.1

Initiation – Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.

 

 

7.2.2

Additional Submissions – Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

 

 

7.2.3

Considerations on Review.  In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

 

7.2.4

Timing of Plan Administrator Response.  The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review.  If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

 

 

 


 

 

 

7.2.5

Notice of Decision.  The Plan Administrator shall notify the claimant in writing of its decision on review.  The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

 

 

(a)

The specific reasons for the denial;

 

(b)

A reference to the specific provisions of this Agreement on which the denial is based;

 

 

(c)

A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits; and

 

(d)

A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

 

Article 8

Amendments and Termination

 

8.1

Amendments.  This Agreement may be amended only by a written agreement signed by the Bank and the Executive.  However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Code Section 409A.

 

8.2

Plan Termination Generally.  This Agreement may be terminated only by a written agreement signed by the Bank and the Executive.  The benefit shall be the Account Value as of the date this Agreement is terminated.  Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.  Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3.

 

8.3

Plan Terminations Under Code Section 409A.  Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances:

 

 

(a)

Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of this Agreement and further provided that all the Bank's arrangements which are substantially similar to this Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of such termination;

 

(b)

Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under this Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which this Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or

 

 

 


 

 

 

(c)

Upon the Bank’s termination of this and all other arrangements that would be aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements (“Similar Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Bank, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate the Agreement;

 

the Bank may distribute the Account Value, determined as of the date of the termination of this Agreement, to the Executive in a lump sum subject to the above terms.

 

Article 9

Miscellaneous

 

9.1

Binding Effect.  This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, administrators and transferees.

 

9.2

No Guarantee of Employment.  Although this Agreement is intended to provide Executive with an additional incentive to remain in the employ of the Bank, this Agreement shall not be deemed to constitute a contract of employment between Executive and the Bank nor shall any provision of this Agreement restrict or expand the right of the Bank to terminate Executive’s employment.  This Agreement shall have no impact or effect upon any separate written employment agreement which Executive may have with the Bank, it being the parties’ intention and agreement that unless this Agreement is specifically referenced in said employment agreement (or any modification thereto), this Agreement (and the Bank’s obligations hereunder) shall stand separate and apart and shall have no effect on or be affected by, the terms and provisions of said employment agreement.

 

9.3

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

 

9.4

Tax Withholding and Reporting.  The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Code Section 409A from the benefits provided under this Agreement.  The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.  The Bank shall satisfy all applicable reporting requirements, including those under Code Section 409A.

 

9.5

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

 

 

 


 

 

9.6

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

 

Notwithstanding the paragraph immediately above, the Bank and Executive acknowledge and agree that, in the event of a Change in Control, upon request of Executive, or in the Bank’s discretion if Executive does not so request and the Bank nonetheless deems it appropriate, the Bank shall establish, not later than the effective date of the Change in Control, a Rabbi Trust or multiple Rabbi Trusts (the “Trust” or “Trusts”) upon such terms and conditions as the Bank, in its sole discretion, deems appropriate and in compliance with applicable provisions of the Code, in order to permit the Bank to make contributions and/or transfer assets to the Trust or Trusts to discharge its obligations pursuant to this Agreement.  The principal of the Trust or Trusts and any earnings thereon shall be held separate and apart from other funds of the Bank to be used exclusively for discharge of the Bank’s obligations pursuant to this Agreement and shall continue to be subject to the claims of the Bank’s general creditors until paid to Executive in such manner and at such times as specified in this Agreement.

 

9.7

Reorganization. The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm or person unless and until such succeeding or continuing bank, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement.  Upon the occurrence of such an event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor bank, firm, person or other entity.

 

9.8

Entire Agreement. This Agreement constitutes the entire agreement between the Bank 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.

 

9.9

Interpretation.  Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

 

9.10

Alternative Action.  In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Bank or Plan Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank, provided that such alternative act does not violate Code Section 409A.

 

9.11

Headings.  Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any provision herein.

 

9.12

Validity.  If any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been included herein.

 

 

 


 

 

9.13

Notice.  Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the address below:

 

Bank of Marin

504 Redwood Blvd Suite 100

Novato, CA 94947

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive.

 

9.14

Deduction Limitation on Benefit Payments.  If the Bank reasonably anticipates that the Bank’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Bank to ensure that the entire amount of any distribution from this Agreement is deductible, the Bank may delay payment of any amount that would otherwise be distributed under this Agreement.  The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive's death) at the earliest date the Bank reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

 

9.15

Compliance with Code Section 409A.  It is the intent of the parties to comply with the all applicable Code sections, including, but not limited to, Code Section 409A.  Furthermore, for the purpose of this Agreement, Code Section 409A shall be read to specifically include any related or relevant IRS Notices or clarifications.  While it is understood that a general Code Section 409A savings clause will not be effective, the parties intend that any ambiguities regarding any terms or payouts contained herein shall be interpreted in a manner consistent with Code Section 409A.  Further, this Agreement shall be administered in a manner consistent with Code Section 409A.

 

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

 

EXECUTIVE

BANK

 

 

 

 

By: /s/ Russell A. Colombo

By: /s/ Robert Gotelli

 

 

Russell A. Colombo

Title: SVP, Director of HR