This
Deferred Fee Agreement (Agreement) is entered into this 30th day of
April, 2009 by and between Plumas Bank (Bank), and Alvin
Blickenstaff (Director).
WHEREAS,
the Director is on the Bank’s board of directors, and has
faithfully served the Bank for many years. It is the consensus of
the board of directors (Board) and its compensation committee that
the Director’s services have been of exceptional merit and an
invaluable contribution to the profits and position of the Bank in
its field of activity; and
WHEREAS, it
is deemed to be in the best interests of the Bank to provide the
Director with certain benefits, on the terms and conditions set
forth herein, in order to reasonably induce the Director to remain
on the Bank’s board of directors; and
WHEREAS,
section 885 of the American Jobs Creation Act of 2004 amended the
Internal Revenue Code (Code) to add section 409A implementing
detailed rules regarding deferred compensation.
ACCORDINGLY,
it is the desire of the Bank and the Director to enter into this
Agreement in good faith compliance with the requirements of Code
section 409A, and the final Treasury regulations.
NOW,
THEREFORE, in consideration of the services to be performed in the
future, as well as the mutual promises and covenants contained
herein, the Director and the Bank agree as follows:
ARTICLE I.
TERMS AND DEFINITIONS
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1.01 .
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Change In Control
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“Change In
Control” means the first to occur of any of the following
events:
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A.
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Change In The Ownership Of The
Bank .
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The date that any one person, or
more than one person acting as a group, acquires ownership of stock
in the Bank that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair market
value or total voting power of the stock of the Bank. For this
purpose, acquisition of additional stock of the Bank by any one
person or persons acting as a group does not constitute a Change In
Control if the same person or persons are considered to own more
than fifty percent (50%) of the total fair market value or total
voting power of the stock of the Bank immediately prior to the
acquisition.
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B.
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Change In The Effective Control Of
The Bank .
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The date that either:
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1.
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Any one person, or more than one
person acting as a group, acquires (or has acquired during the
twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the
Bank possessing at least thirty-five percent (35%) or more of the
total voting power of the stock of the Bank; or
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2.
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A majority of members of the Board
is replaced during any twelve (12) month period by directors
whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or
election.
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C.
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Change In Ownership Of A
Substantial Portion Of The Bank’s Assets
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The date that any one person, or
more than one person acting as a group, acquires (or has acquired
during the twelve (12) month period ending on the date of the
most recent acquisition by such person or persons) assets from the
Bank that have a total gross fair market value equal to more than
forty percent (40%) of the total gross fair market value of the
assets of the Bank immediately prior to such acquisition or
acquisitions. For this purpose, the fair market value of the assets
of the Bank shall be determined without regard to any liabilities
associated with such assets. A transfer of assets by the Bank does
not constitute a Change In Control if the assets are transferred
to:
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1.
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A person, or more than one person
acting as a group, that is a shareholder of the Bank immediately
prior to the transfer in exchange for its stock;
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2.
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An entity, fifty percent (50%) or
more of the total voting power of which, is owned, directly or
indirectly, by the Bank immediately after the transfer of
assets;
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3.
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A person, or more than one person
acting as a group, that owns, directly or indirectly, fifty percent
(50%) or more of the total voting power of all of the outstanding
stock of the Bank immediately after the transfer of assets;
or
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4.
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An entity, at least fifty percent
(50%) or more of the voting power of which is owned, directly or
indirectly, by a person described in paragraph 3 of this subsection
immediately after the transfer of assets.
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1.02.
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Code . “Code” shall mean the
Internal Revenue Code of 1986, as amended.
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1.03.
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Disability/Disabled
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“Disability” or
“Disabled” shall mean the Director: (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 an accident or health
plan covering employees or directors of the Bank provided that the
definition of “disability” applied under such
disability insurance program complies with the requirements of the
preceding sentence. Upon the request of the plan administrator, the
Director must submit proof to the plan administrator of the Social
Security Administration’s or the provider’s
determination.
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1.04.
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“ Election Form
” means
the Form attached as Exhibit 1.
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1.05.
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“ Fees
” means the total directors fees
payable to the Director.
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1.06.
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“ Specified Employee
” means
an employee who at the time of Termination of Service is a key
employee of the Bank, if any stock of the Bank 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.
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1.07.
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Specified Time
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“Specified
Time” shall mean the date, if any, elected by the Director on
the Election Form on which payment of the Director’s deferral
account will commence to the Director absent earlier payment to the
Director upon one of the events described in Article IV, V, or
VI.
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1.08.
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Termination of
Service . “Termination of
Service” shall mean the expiration of the Director’s
contract, if the expiration constitutes a good faith and complete
termination of the contractual relationship. An expiration does not
constitute a good faith and complete termination of the contractual
relationship if the Bank anticipants a renewal of a contractual
relationship or the Director becoming an employee of the Bank. The
Bank is considered to anticipate the renewal of the contractual
relationship with the Director if it intends to contract again for
the services provided under the expired contract, and neither the
Bank nor the Director has eliminated the Director as a possible
provider of services under any new contract. Further, a Bank is
considered to intend to contract again for the services provided
under an expired contract if the Bank’s doing so is
conditioned only upon incurring a need for the services, the
availability of funds, or both.
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1.09.
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Unforeseeable Financial
Emergency .
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A.
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“Unforeseeable Financial
Emergency” means a severe financial hardship to a Director
resulting from (i) an illness or accident of the Director, the
Director’s spouse, the Director’s beneficiary, or the
Director’s dependent (as defined in Code section 152(a),
without regard to Code section 152(b)(1), (b)(2), and (d)(1)(B));
(ii) a loss of the Director’s property due to casualty
(including, but not limited to, the need to rebuild a home
following damage to a home not otherwise covered by insurance); or
(iii) such other similar extraordinary and unforeseeable
circumstances arising as a result of event beyond the control of
the Director, all as determined in the sole and absolute discretion
of the Bank.
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B.
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Such extraordinary and
unforeseeable circumstances may, depending on the facts and
circumstances, include, but are necessarily not limited to
(i) imminent foreclosure of or eviction from the
Director’s primary residence; (ii) the need to pay for
medical expenses, including nonrefundable deductibles, as well as
the costs of prescription drug medication; and (iii) the need
to pay for the funeral expenses of a spouse, a beneficiary, or a
dependent (as defined in Code section 152(b)(1), (b)(2), and
(d)(1)(B)). The purchase of a home and the payment of college
tuition do not constitute an Unforeseeable Financial
Emergency.
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ARTICLE II.
DEFERRAL ELECTION
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2.01.
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Initial Election
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The Director must
complete, sign and deliver an Election Form irrevocably electing
the amount of Fees to be deferred to the Bank, and the Bank must
receive and accept such completed and signed Election Form no later
than the last day of the calendar year immediately preceding the
calendar year in which the services giving rise to the Fees to
which the deferral election relates are to be performed. If the
Director does not deliver an Election Form on a timely basis with
respect to a calendar year, the Director shall be deemed to have
elected to defer zero (0) Fees for such calendar year.
Notwithstanding the foregoing, in the year in which the Agreement
is first implemented, the Director may make an irrevocable election
to defer Fees for services to be performed subsequent to the
election within thirty (30) days of the effective date of this
Agreement, provided that such election shall only be effective for
Fees earned after the election is made.
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2.02.
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Election Changes
. The Director may not
modify or revoke a deferral election during a calendar year by
changing the amount of Fees deferred except in the case of an
Unforeseeable Financial Emergency pursuant to the Unforeseeable
Financial Emergencies article, below. A valid deferral election
shall apply only to the calendar year specified on the applicable
Election Form. The Director must deliver an Election Form to the
Bank prior to each calendar year to defer Fees.
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2.03.
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Termination Of Participation And
Deferrals .
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If the Bank determines in good
faith that the Director no longer qualifies as a member of a select
group of management or highly compensated employees, as membership
in such group is determined in accordance with sections 201(2),
301(a)(3) and 401(a)(1) of Employee Retirement Income Security Act
of 1974, as amended (ERISA), the Bank shall have the right, in its
sole discretion, to (i) terminate any deferral election the
Director has made as of the end of the calendar year in which the
Director’s status changes; (ii) prevent the Director
from making future deferral elections; and/or,
(iii) immediately distribute the balance of the
Director’s Deferral Account to a separate nonqualified
deferred compensation plan and terminate the Director’s
participation in the Agreement.
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ARTICLE
III. DEFERRAL ACCOUNT
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3.01.
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Establishing and
Crediting . The Bank shall establish a deferral
account (Deferral Account) on its books for the Director, and shall
credit to the Deferral Account the following amounts:
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A.
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Deferrals . The Fees deferred by the Director
as of the time the Fees would have otherwise been paid to the
Director.
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B.
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Interest . On a quarterly basis and
immediately prior to the payment of any benefits, interest shall be
credited to the Deferral Account with an annual interest rate equal
to the floating Wall Street Journal Prime Rate as of the first
business day of the month for such month or part thereof that
interest is to be credited minus one percent (1%) per annum.
Interest on the Deferral Account shall be compounded quarterly.
Interest shall continue to accrue on the Deferral Account until all
benefits have been paid.
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3.02.
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Statement of
Accounts . The Bank shall provide to the
Director, within one hundred twenty (120) days after each
anniversary of this Agreement, a statement setting forth the
Deferral Account balance.
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3.03.
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Accounting Device
Only . The Deferral Account is solely a
device for measuring amounts to be paid under this Agreement. The
Deferral Account is not a trust fund of any kind. The Director is a
general unsecured creditor of the Bank for the payment of benefits.
The benefits represent the mere Bank promise to pay such benefits.
The Director’s rights to such benefits are not subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by the
Director’s creditors.
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ARTICLE IV.
LIFETIME BENEFITS
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4.01.
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Specified Time
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Upon a Specified Time,
the Bank shall distribute to the Director the benefit described in
this Section 4.01.
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A.
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Amount of Benefit
. The benefit under
this Section 4.01 is the Deferral Account balance elected to
be paid at the Specified Time including interest to the time of
payment as provided in Section 3.01B.
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B.
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Payment of Benefit
. The Bank shall pay
the benefit to the Director in a lump sum within fifteen
(15) days following the Specified Time.
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4.02.
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Termination Benefit
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Upon the
Director’s Termination of Service prior to the Specified
Time, the Bank shall distribute to the Director the benefit
described in this Section 4.02.
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A.
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Amount of Benefit
. The benefit under
this Section 4.02 is the Deferral Account balance at the date
of the Director’s Termination of Service including interest
to the time of payment as provided in
Section 3.01B.
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B.
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Payment of Benefit
. The Bank shall pay
the benefit to the Director in a lump sum within fifteen
(15) days following the Director’s Termination of
Service.
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4.03.
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Disability Benefit
.
Upon the
Director’s Termination of Service due to Disability prior to
the Specified Time, the Bank shall pay to the Director the benefit
described in this Section 4.03.
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A.
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Amount of Benefit
. The benefit under
this Section 4.03 is the Deferral Account balance at the date
of the Director’s Termination of Service due to Disability
including interest to the time of payment as provided in
Section 3.01B.
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B.
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Payment of Benefit
. The Bank shall pay
the benefit to the Director in a lump sum within
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