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Notice of Internet Availability of Proxy Materials

In accordance with SEC rules and regulations, we have elected to furnish our proxy materials, including this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, primarily via the Internet. Accordingly, on or about April 14, 2023, we mailed to our shareholders a “Notice Regarding the Availability of Proxy Materials," or the Notice, that contains instructions on how to access our proxy materials on the Internet, how to vote on the proposals to be voted upon at the Annual Meeting, and how to request paper copies of this Proxy Statement and the 2022 Annual Report. Shareholders may request to receive all future proxy materials from us in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage shareholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of our annual shareholder meetings and to reduce our costs.

Revocability of Proxies

A Proxy for use at the Meeting is provided with this Proxy Statement. Any shareholder who executes and delivers such Proxy has the right to revoke it at any time before it is exercised by filing with the Secretary of the Company an instrument revoking it or a duly executed proxy bearing a later date, or by attending the Meeting and voting in person. (Any shareholder who holds shares in certificate or registered book entry form and attends the Meeting may simply revoke his or her previously submitted proxy and vote their shares at that time. Shareholders whose shares are held by a broker or are otherwise not registered in their own names will need additional documentation from their record holder to vote any shares personally at the Meeting.)  Subject to such revocation, all shares represented by a properly executed Proxy received in time for the Meeting will be voted by the proxy holders whose names are set forth in the accompanying Proxy in accordance with the instructions on the Proxy. If no instruction is specified with respect to a matter to be acted upon, the shares represented by the Proxy will be voted “FOR” the election of the nominees for directors set forth herein, “FOR” Proposals 2, 3 and 4 and, if any other business is properly presented at the Meeting, in accordance with the recommendations of the Board of Directors.

Solicitation of Proxies

The solicitation of the Proxy accompanying this Proxy Statement is made by our Board of Directors, and we will bear the costs of such solicitation, including preparation, printing and mailing costs. The proxies will be solicited principally through the mail, but our officers, directors and regular employees may solicit proxies personally or by telephone. Arrangements will be made with brokerage firms and other custodians, nominees and fiduciaries to forward these proxy solicitation materials to shareholders whose stock in the Company is held of record by such entities, and we will reimburse such brokerage firms, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection therewith.

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VOTING SECURITIES

There were 15,197,158 shares of the Company’s common stock issued and outstanding on March 31, 2023, which has been set as the record date for the purpose of determining the shareholders entitled to notice of and to vote at the Meeting. The presence, in person or by proxy, of at least a majority of the total number of outstanding shares of our common stock is necessary to constitute a quorum at the Meeting for the transaction of business. Abstentions and broker non-votes are each included in the determination of the number of shares present for determining a quorum but are not counted on any matters brought before the Meeting.

Each shareholder is entitled to one vote on each proposal per share of common stock held as of the record date. Shareholders do not have cumulative voting rights in connection with the election of directors. The election of six Class II directors to serve until the 2025 Annual Meeting of Shareholders, requires approval by a “plurality” of the votes cast by the shares of common stock entitled to vote in the election. This means that the six nominees who receive the highest number of properly cast votes will be elected as directors even if those nominees do not receive a majority of the votes cast. Shares represented by proxies that are marked with instructions to “withhold authority” for the election of one or

more director nominees or that are not voted (whether by abstention, broker non-vote or otherwise) will not be counted in determining the number of votes cast for those persons.

For all other matters, including the approval of the 2023 Equity Based Compensation Plan, the ratification of the appointment of our accountants, the advisory vote on executive compensation and the advisory vote on the frequency of holding an advisory vote on executive compensation, a majority of votes cast shall decide the outcome of each matter submitted to the shareholders at the Meeting. Abstentions will be included in the vote totals and, as such, will have the same effect on proposals as a negative vote. Broker non-votes (i.e., the submission of a proxy by a broker or nominee specifically indicating the lack of discretionary authority to vote on the matter), if any, will not be included in vote totals and, as such, will have no effect on any proposal.

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PROPOSAL 1

ELECTION OF DIRECTORS

Our Bylaws currently provide that the number of directors shall be not fewer than seven nor more than thirteen until changed by a bylaw amendment duly adopted by the vote or written consent of our shareholders. The Bylaws further provide that the exact number of directors shall be fixed from time to time, within the foregoing range, by a bylaw or amendment thereof or by a resolution duly adopted by the vote or written consent of our shareholders or by our Board of Directors. The exact number of directors is presently fixed at twelve.

Pursuant to the Company’s Articles of Incorporation, the Board of Directors is divided into two classes, designated Classes I and II. The directors serve staggered two-year terms, so that directors of only one class are elected at each Annual Meeting of Shareholders. At the Meeting, shareholders will be asked to elect the following Class II directors for an additional term of two years to serve until 2025 and their successors are elected and have qualified:

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Since shareholders do not have cumulative voting rights in the election of directors, a plurality of the votes cast is required for the election of directors. See “VOTING SECURITIES” above. In the event that any of the nominees should be unable to serve as a director, it is intended that the Proxy will be voted for the election of such substitute nominee, if any, as shall be designated by the Board of Directors. Management has no reason to believe that any nominee will become unavailable.

Board of Directors’ Recommendation

Your Board of Directors unanimously recommends a vote “FOR”

each of the nominees listed in this proxy statement.

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The following table sets forth information as of March 31, 2023, with respect to (i) each of the persons nominated by the Board of Directors for election as directors, all of whom are also current directors of the Company, (ii) each of our directors and executive officers, and (iii) our directors and executive officers as a group. Additional information

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CORPORATE GOVERNANCE

General

The Board of Directors believes that it is important to encourage the highest level of corporate ethics and responsibility and has fully implemented the corporate governance requirements of Nasdaq and the Securities and Exchange Commission (the “SEC”).

Code of Ethics

We have adopted a Code of Ethics which applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The Code of Ethics requires that our directors, officers and employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner and otherwise act with integrity and in the Company’s best interests. Under the terms of the Code of Ethics, directors, officers and employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Ethics. The Code of Ethics may be found on our web site, “www.sierrabancorp.com” on the “Investor Relations” tab under the topic “Governance Documents.”  We intend to post notice of any waiver from, or amendment to, any provision of our Code of Ethics on this web site.

Procedures for Reporting Concerns about Accounting, Internal Accounting Controls or Auditing Matters

As a mechanism to encourage compliance with the Code of Ethics, we have established procedures for (i) receiving, retaining and addressing complaints regarding accounting, internal accounting controls or auditing matters; (ii) allowing employees to anonymously report any problems they may detect with respect to such matters; and (iii) reporting any suspected violations of the Code or of law. The Code of Ethics also prohibits the Company from retaliating against any director, officer or employee who makes a good faith report of a suspected violation of the Code or of law (even if the report is mistaken), or against anyone who assists in the investigation of a reported violation.

Director Independence

General. The Board has determined that all of its directors, and director nominees, other than the Chief Executive Officer and Michele Gil, are “independent” as that term is defined by Nasdaq rules. The overwhelming majority of the members of our Board of Directors have historically been independent, and our Audit, Nominating and Governance, and Compensation Committees are comprised solely of independent directors in accordance with SEC and Nasdaq requirements.

Executive Sessions. The directors meet regularly in executive session without any members of management present.

Director Attendance

Board and Committee Meeting Attendance. During the fiscal year ended December 31, 2022, our Board of Directors held a total of 6 meetings. Each incumbent director who served as a director during 2022 attended at least 75% of the aggregate of (a) the total number of such meetings and (b) the total number of meetings held by all committees of the Board on which such director served during 2022.

Director Attendance at Annual Meetings of Shareholders. The Board believes it is important for all directors to attend the annual meeting of shareholders in order to show their support for the Company and to provide an opportunity for shareholders to communicate any concerns to them. The Company’s policy is to encourage, but not require, attendance by each director at the Company’s annual meeting of shareholders. All then serving directors attended our Annual Meeting of Shareholders in 2022, with Ms. Scearcy, Ms. Abundis and Ms. Castle attending the meeting virtually.

Shareholder Communications with Board of Directors

Shareholders may communicate with the Board of Directors or with any individual director by mailing a communication to our principal executive offices addressed to the Board of Directors or to the individual director. All of such communications, except those clearly of a marketing nature, will be forwarded unopened directly to the appropriate director or presented to the full Board of Directors at the next regularly scheduled Board meeting.

Director Nomination Procedures, Qualifications and Related Matters

Procedure for Consideration of Director Nominees. Prior to making any recommendations to the Board of Directors concerning the nomination of directors for each year’s annual meeting, the Nominating and Governance Committee (the “Governance Committee”) shall (i) evaluate the performance, attendance records of, and any loans or other transactions between the Company or the Bank and each of the current Board members proposed for reelection, and on that basis consider the appropriateness of such members standing for reelection; (ii) review the composition and size of the Board in order to ensure that the Board is comprised of members reflecting the proper expertise, skills, attributes and personal and professional backgrounds for service as directors of the Company; (iii) consider the need to augment the Board for any specific purpose; (iv) review and consider any additional requests from outside parties to serve as directors; (v) if a new nominee is needed, determine the specific skills and experience desired in a new director; and (vi) in such case, identify potential nominees who have such skills and experience, determine whether the potential nominees are shareholders of the Company, investigate the potential nominee’s background, develop personal knowledge about the candidate, develop a consensus of the committee members with respect to which potential nominee would be best suited for the position, determine whether the candidate is interested, and vote on the recommendation.

The Governance Committee shall consider recommendations from directors, officers and employees of the Company and the Bank, as well as persons recommended by shareholders of the Company, and shall evaluate persons recommended by directors, officers or employees in the same manner as those recommended by shareholders in selecting Board nominees.

Director Qualifications. In considering a possible candidate for election as a director, the Governance Committee shall be guided by the principle that each director should: (i) be an individual of the highest ethical character and integrity; (ii) have substantial experience which is of particular relevance to the Company; (iii) have the ability and willingness to devote sufficient time to the affairs of the Company; (iv) have a meaningful financial stake in the Company so as to assure that every director’s interests are aligned with those of the shareholders; (v) be knowledgeable about the business activities and market areas in which the Company and its subsidiaries engage; (vi) have a general appreciation regarding major issues facing public companies of a size and operational scope similar to the Company, including contemporary governance concerns, regulatory obligations of a public issuer, strategic business planning, competition in a global economy, and basic concepts of corporate accounting and finance; (vii) live or work within 25 miles of an existing or proposed office of the Bank; (viii) have an excellent personal and professional reputation in and commitment to one or more communities in which the Company does business; (ix) serve or have served as chief executive officer or in another position of active leadership with a business or professional interest located within the market areas served by the Company and its subsidiaries; (x) have an inquiring mind, a willingness to ask hard questions, and the ability to work constructively with others; (xi) have the ability and desire to exercise independent thinking when considering matters brought before the Board, and not be unduly influenced by the opinions of others; (xii) have no conflict of interest that would interfere with his or her performance as a director; and (xiii) have the capacity and desire to represent the best interests of the shareholders as a whole and not primarily a specific interest group or constituency.

While the Board and the Governance Committee believe that every director should possess as many of the foregoing attributes as possible, the Governance Committee has not recommended, and the Board has not established, any specific group of such attributes to be considered “minimum qualifications” for serving as a director.

In considering the desirability of any particular candidate as a potential director, the Governance Committee shall also consider the contributions that a candidate can be expected to make to the collective functioning of the Board based upon the totality of the candidate’s credentials, experience and expertise, the composition of the Board at the time, and other relevant circumstances, including the fit of the individual’s skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to the needs of the Company.

Board Diversity, Qualifications and Experience. As currently comprised, the Board of Directors is a diverse group of individuals drawn from various market sectors and industry groups with a presence in the Company’s markets.  The board, including nominees, includes five female directors and three directors that are also members of an under-represented community.  The Board considers diversity as one of many factors in evaluating the composition of the Board but has no set policy in this regard.

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Board members are individuals with knowledge and experience who serve and represent the communities we serve. Current Board representation provides backgrounds in accounting, banking, farming, legal, manufacturing, and retail. The expertise of these individuals covers accounting and financial reporting, corporate management, strategic planning, business acquisitions, legal matters, marketing, retail, and small business operations. What follows is a brief description of the particular experience, attributes and qualifications of each member of the Company’s Board of Directors that led to the conclusion that these individuals should serve as directors of the Company.

Morris A. Tharp is an original proponent of the Bank and has served as Chairman of the Board of the Bank and of Sierra Bancorp since their formations in 1977 and 2000, respectively. He also serves as Chairman of the Nominating and Governance Committee (“Governance Committee”) and has served on the Audit Committee and Compensation Committee for many years. Mr. Tharp is a native of Porterville and following his schooling, joined his father in the family business of E.M. Tharp, Inc. Over the years, he has purchased the family business and is now sole owner. For many years he has been very involved in community activities. Mr. Tharp was selected to serve on the Board because of his involvement in the formation of the Bank, his lengthy experience as a bank director and accumulated knowledge of the Company’s operations, his leadership qualities and management expertise gained by owning and running his own company, and his involvement in the local community.

Susan M. Abundis, who self-identifies as Hispanic,joined the Boards of both Bank of the Sierra and Sierra Bancorp on December 17, 2020.  Ms. Abundis serves as the Chairperson of the Board Credit Committee and also serves on the Finance and Sustainability and Nominating and Governance Committees. Ms. Abundis has 40 years of banking experience and is currently on the Board of Trustees at Community Medical Center, California Health Sciences University, and Tesoro Viejo Conservancy. Most recently, she was Chief Operating Officer at Wellness Clinic at California Health Sciences University in Clovis. Her last banking role was as Managing Director–Division Credit Manager at Bank of the West–BNP, where she started as an Area Manager and Senior Vice President. Abundis also held several jobs at Bank of America culminating in her position as Market President, Area Manager and Senior Vice President. Originally from Chowchilla, she currently resides in Fresno, earned her bachelor’s degree at California State University Fresno (“CSUF”), and a Graduate Degree of Banking at the University of Washington’s Pacific Coast Banking School. Among her many professional awards, Abundis was named Woman of the Year by both Soroptimist of Ventura and Girl Scouts of America–Tres Condados of Ventura County, Common Thread Award – Ag One at CSUF, Women Worth Watching 2014, and the

Marjoree Mason Center’s list of Top Ten Women of the Year. Ms. Abundis was selected to serve on the Board because of her extensive banking industry knowledge and network and her involvement in the local community.

Albert L. Berra has been a director of the Bank and of Sierra Bancorp since their formations in 1977 and 2000, respectively. He has served on numerous committees of the Bank and the Company throughout that time and is currently Chairman of the Compensation Committee and a member of both the Audit and Governance Committees. A native of Porterville, Dr. Berra attended the University of California, Berkeley after high school and went on to St. Louis University to complete his dental and orthodontic training. After service in the U.S. Army, Dr. Berra returned to Porterville to establish his orthodontic practice, which he operated continuously since his return until he retired and sold his practice in 2014. He also runs a farming operation in the area. Dr. Berra is involved in many community activities. In selecting Dr. Berra as a nominee this year, the Board considered his involvement in the formation of the Bank, his lengthy experience as a bank director and accumulated knowledge of the Company’s operations, his experience operating his own business, his agricultural expertise, and his active involvement in the local community.

Julie G. Castle joined the Boards of both Bank of the Sierra and Sierra Bancorp on December 17, 2020.  Ms. Castle currently serves as the Audit Committee Chairperson and also serves on the Compensation and Nominating and Governance Committees. Ms. Castle’s career has included over 35 years of financial services experience, including 11 years in the roles of President and/or CEO and 10 years of board service for a variety of companies.  Most recently, Ms. Castle served as President, Chief Banking Officer, and Board Member for Rabobank, N.A., a $15 billion national bank.  In addition to serving on the Rabobank, N.A. board, she was a board member of First Interstate Bank, Zions Trust, N.A., and the Pacific Coast Banking School, as well as a member of various non-profit boards.  She has held leadership and executive roles at institutions large and small including Bank of America, First Interstate Bank, Zions Bancorporation, and Cannon Financial Institute.  Ms. Castle earned a B.S. degree from UC Davis and a Graduate Degree of Banking at the University of Washington’s Pacific Coast Banking School.  In selecting Ms. Castle as a nominee this year, the Board considered her extensive banking industry knowledge and her strong financial acumen.  

Vonn R. Christenson was appointed to the Boards of the Bank and of Sierra Bancorp effective September 15, 2016. Mr. Christenson currently serves as the Chairperson of the Finance and Sustainability Committee and also serves on the Compensation and Nominating and Governance Committees. Mr. Christenson graduated from Brigham Young University with honors in 2003 and earned his J.D. at Harvard Law School in 2006. After working for a time as an attorney in Orange County, California, Mr. Christenson joined the Christenson Law Firm in Porterville, California, specializing in business and contract disputes, personal injury, and intellectual property litigation. Mr. Christenson is also the CEO and Co-Founder of Zero Nox, Inc., which provides a platform for clean energy technologies to come to market, specializing in microgrids and electric powertrain solutions for off-highway vehicles. He currently resides in Porterville and is actively involved in the community including with the Porterville Optimist Club, and the Porterville Unified School District Academy of Law, Justice & Ethics Advisory Board. In selecting Mr. Christenson as a nominee this year, the Board considered Mr. Christenson’s active involvement in the local community, his stellar educational background, and his ability to add a unique legal perspective to Board discussions.

Laurence S. Dutto, Ph.D., was appointed to the Boards of the Bank and of Sierra Bancorp effective September 15, 2016. Dr. Dutto currently serves on the Risk, Nominating and Governance and Finance and Sustainability Committees. Dr. Dutto, a resident of Visalia, California, is a retired college administrator with extensive hands-on agricultural experience. His decorated 30-year career at College of the Sequoias in Visalia, California includes service as Provost of the Tulare College Center, Dean of Academic Services, Dean of Technical Education, Agriculture Division Chair, and Faculty Academic Senate President. His prior experience includes 15 years working on his family’s dairy farm, and he currently is in a partnership with his sister growing almonds. In selecting Dr. Dutto as a nominee this year, the Board considered his management and administrative expertise and his community connections, and his ability to help strengthen the Bank’s ties to the local agricultural community.

Michele M. Gil (Andujo) was elected as a director May 25, 2022. Mrs. Gil currently serves on the Risk and Finance and Sustainability Committees. Mrs. Gil is Managing Partner and majority equity owner with more than 20 years of recruiting and management experience at the Los Angeles-based Chrisman & Company, a national executive search consultancy to financial and related industries. She leads the firm’s board of directors practice as well as searches for senior/executive management positions, including C-level positions, for prominent clients in banking and financial services. Clients include regional and community banks, investment banks, wealth management firms, FinTech’s, credit unions, as well as other sectors in the financial services industry. Mrs. Gil has experience working with bank regulatory

agencies (FDIC, OCC, Federal Reserve and DFP&I). She consults with boards of directors and executive teams on issues concerning succession planning, leadership development and human capital strategies.  Mrs. Gil holds a Bachelor of Science degree from the University of Southern California. She has served on the Diversity & Inclusion Advisory Committee and the Women in Banking Committee for the Western Bankers Association and has been a guest speaker to financial institutions and banking associations.  She currently serves as a board member of the International Bankers Association of California. Mrs. Gil was selected to serve on the board due in part to her management and leadership expertise gained by owning and operating her company, her involvement in the banking industry as a recruiter, and her involvement in the local community.

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James C. Holly is a founding Director and Vice Chairman of the Board of both the Bank and Sierra Bancorp, and currently serves as a member of the Compensation, Nominating and Governance and Credit Committees. He served as President and Chief Executive Officer of the Bank and Sierra Bancorp from their formations in 1977 and 2000, respectively, until January 1, 2014, when Mr. McPhaill was appointed President and Chief Operating Officer of both entities. Mr. Holly continued to serve as Chief Executive Officer of both entities until he retired on March 31, 2015 and was appointed Vice Chairman of the Board effective April 1, 2015. He was born and raised in Racine, Wisconsin and received both a BBA and an MBA degree from the University of Wisconsin. Mr. Holly is also a graduate of the Southwestern Graduate School of Banking at Southern Methodist University and served as a Commissioned Officer in the U.S. Army (Armor). He began his banking career with United California Bank, now Wells Fargo Bank. After 10 years as a branch manager, Mr. Holly left United California Bank and joined in the effort to organize Bank of the Sierra of which he served as President and Chief Executive Officer from its inception in 1977 until January 1, 2014, and served as Chief Executive Officer until his retirement in March 2015. He is a current director of the Sequoia Parks Conservancy, a philanthropic and educational organization, and a director of River Island Country Club. Mr. Holly was selected to serve on the Board because of his leadership capabilities; his long tenure and strong track record as President and CEO of the Bank; his deep understanding of bank lending, operations, and financial management resulting from his banking background; his extensive network in the banking industry; his knowledge of the local economy; and his involvement in the local community.

Kevin J. McPhaill has been a director of the Bank and of Sierra Bancorp since January 1, 2015 and was appointed President and Chief Executive Officer of the Company and the Bank effective April 1, 2015. Mr. McPhaill is a native and current resident of Visalia, California, and his educational background includes a bachelor’s degree from Fresno Pacific University, a master’s degree in business administration from Fresno State, and the successful completion of post-graduate training at the Southwestern Graduate School of Banking at Southern Methodist University. He has been employed by Bank of the Sierra since June 2001, starting as the regional manager of the Hanford area, then progressing to Executive Vice President and Chief Banking Officer of the Company and the Bank in 2006, to President and Chief Operating Officer of the Company and the Bank in 2014, and to his current positions on April 1, 2015. Mr. McPhaill serves as a member of the Risk, Credit and Finance and Sustainability Committees. McPhaill is involved in the local community and is active in financial education outreach efforts to primary and secondary schools in the Bank’s market areas. Mr. McPhaill also sits on the Tulare County Economic Development Corporation’s Board of Directors. Mr. McPhaill was selected to serve on the Board because of his leadership abilities; his extensive experience at the Bank and other financial institutions; his knowledge of the Bank’s culture; his lending, operations, and management experience; and his insight into key factors that drive the Bank’s financial success.

Ermina Karim was elected as a director May 25, 2022. Ms. Karim currently serves as a member of the Risk, Nominating and Governance and Credit Committees. Ms. Karim holds a Bachelor of Science degree in Journalism and Economics from Northwestern University. She has worked in a number of industries including journalism, finance and non-profits with roles such as reporter, editor, Vice President of equity capital markets and CEO. Ms. Karim has experience with several companies ranging in size and complexity, including International Financing Review, Credit Suisse, The Tribune, and the San Luis Obispo Chamber of Commerce. In addition to her vocational background, Ms. Karim serves on a number of boards including: President’s Local Economic Development Council Cal Poly, French Hospital Medical Center and REACH (Regional Economic Action Coalition Central Coast of California) among others. Ms. Karim has lived and worked in San Luis Obispo for several years and was recognized as a Top 20 Under 40 by the San Luis Obispo Tribune, 40 Under 40 by the Pacific Coast Business Times and Top Women in Business by the Pacific Coast Business Times. In selecting Ms. Karim as a nominee this year, the Board considered her extensive involvement in the local community, her experience in the financial services industry, and her leadership skills. 

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Lynda B. Scearcy has been a director of the Bank and of Sierra Bancorp since December 2007. She has been a valuable member of the Audit Committee since that time and is currently designated as an audit committee financial expert, while also chairing the Risk Committee. Ms. Scearcy also serves on the Nominating and Governance Committee.  Scearcy received her undergraduate degree from the University of Florida and her Master’s Degree in Taxation from San Joaquin College of Law. Ms. Scearcy is a retired tax professional. She was previously the tax partner at McKinley Scearcy Associates, an accounting and consulting firm which she joined in 1983. McKinley Scearcy Associates sold to H&R Block in November 2014, and Ms. Scearcy retired from the firm in September 2017. She is deeply committed to the community, as demonstrated by her involvement with, among others, the Rotary Club of Porterville (Past President), Porterville Chamber of Commerce (Past Treasurer), Tule River Economic Development Corporation (Past Treasurer) and Tulare County Office of Education Foundation (Past Board Member). Ms. Scearcy was selected to serve on the Board because of her strong educational background, her experience as a partner and leader at her accounting and consulting firm, her deep understanding of accounting and tax issues, her financial acumen, and her strong commitment to and involvement in the local community.

Gordon T. Woods was an original proponent of the Bank and has been a director of the Bank and of Sierra Bancorp since their formations in 1977 and 2000, respectively.  He is currently a member of the Audit, Nominating and Governance and Credit Committees. He attended Arizona State University and the University of Arizona on scholarship, majoring in chemical engineering, and is a U.S. Army veteran. His professional experience includes employment as a chemical engineer, as well as executive positions with divisions of Gulf Oil Company and Ford Motor Company. In 1969 he moved to Porterville and established Hydrokleen Systems, a designer and manufacturer of water and waste treatment systems, and in 1989 he established Gordon T. Woods Construction, an engineering construction company building industrial and municipal water and wastewater systems. He is currently CEO of both of those companies. Mr. Woods has been active in numerous service organizations in Porterville and has also served on the Porterville City Council, including two years as Mayor and two years as Mayor Pro-Tem. In selecting Mr. Woods as a nominee this year, the Board considered his involvement in the formation of the Bank, his lengthy experience as a bank director and accumulated knowledge of the Company’s operations, his experience in executive positions at international companies, his success at owning and operating his own businesses, his financial acumen, and his involvement in the local community.

Consideration of Shareholder Recommendations. In considering any additional requests from outside parties to serve as directors, including parties recommended by shareholders, the Governance Committee shall follow the same principles outlined above, and shall request of any potential nominee such information, including a completed Directors’ and Officers’ Questionnaire of the same type completed by each of the Company’s existing directors and executive officers each year in connection with the preparation of the Company’s proxy materials, as the committee deems necessary to enable it to properly evaluate such person’s qualifications and to be aware of any information concerning such person which might require disclosure to shareholders pursuant to SEC rules concerning proxy statements.

A shareholder wishing to submit recommendations for director candidates for election at an annual meeting of shareholders must do so in writing by December 16^th of the previous calendar year, and must include the following in the written recommendation: (i) a statement that the writer is a shareholder and is proposing a candidate for consideration; (ii) the name and contact information for the candidate; (iii) a statement of the candidate’s business and educational experience; (iv) information regarding the candidate’s qualifications to be a director; (v) the number of shares of the Company’s stock owned either beneficially or of record by the candidate and the length of time such shares have been so owned; (vi) the written consent of the candidate to serve as a director if nominated and elected; (vii) information regarding any relationship or understanding between the proposing shareholder and the candidate; (viii) a statement that the proposed candidate has agreed to furnish to the Company all information (including a completed Directors’ and Officers’ Questionnaire as described above) as the Company deems necessary to evaluate such candidate’s qualifications to serve as a director; and (ix) as to the shareholder giving the notice, the name and address of the shareholder and the number of shares of the Company’s stock which are owned beneficially or of record by the shareholder.

Nominations by Shareholders. The procedure and requirements for shareholders to nominate directors (as opposed to making recommendations as described above) are set forth in our Bylaws, which provide in pertinent part as follows:

“Nominations for election of members of the Board of Directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors. Notice of intention to make any nominations by a shareholder shall be made in writing and shall be delivered or mailed to and received by the Secretary of the Corporation not less than one hundred twenty (120) calendar days in advance of the date corresponding to that on which the Corporation’s proxy statement was released to the shareholders in connection with the previous year’s annual meeting of shareholders; provided, however, that in the event that no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than thirty (30) days from the date contemplated at the time of the previous year’s proxy statement, notice by the shareholder must be received by the Secretary of the Corporation not later than the close of business on the later of (i) one hundred and twenty (120) days prior to such annual meeting; or (ii) ten (10) days after the date the notice of such meeting is sent to shareholders pursuant to Section 2.2(d) of these Bylaws…. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the number of shares of voting stock of the Corporation owned by each proposed nominee; (d) the name and residence address of the notifying shareholder and the beneficial owner, if any, on whose behalf the nomination is made; and (e) the number of shares of voting stock of the Corporation owned beneficially and of record by the notifying shareholder and such beneficial owner.”

For our 2024 Annual Meeting of Shareholders, written notice of intention to make any nominations must be received no later than December 16, 2023.

Board Leadership Structure. The Company is focused on corporate governance practices, and independent Board oversight is valued as an essential component of strong corporate performance to enhance shareholder value. Our commitment to independent oversight is demonstrated by the fact that all but two of our current directors are independent. In addition, all current members of the Board’s Audit, Compensation, and Nominating & Governance Committees are independent.

The Company currently has an independent Chairman separate from the Chief Executive Officer, and our corporate governance guidelines specify that these two positions should be kept separate except in unusual circumstances. Such circumstances have not occurred in the Company’s history. The Board believes it is important to maintain flexibility in its leadership structure, but firmly supports having an independent director in a board leadership position. If for any reason it were necessary for the Chairman to also hold the office of Chief Executive Officer temporarily, the Board would appoint an independent lead director to serve in an independent leadership position during this time. Having an independent Chairman or lead director enables non-management directors to raise issues and concerns for Board consideration without immediately involving management. The Chairman provides independent leadership of the Board and also serves as a liaison between the Board and senior management. The Board has determined that the current structure, an independent Chair, separate from the Chief Executive Officer, is the most appropriate structure at this time, while ensuring that, at all times, there will be an independent director in a Board leadership position.

Board Role in Risk Oversight. Risk is inherent with every business, and how well a firm manages risk can ultimately determine its success. The Company faces a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk, regulatory risk, market risk and reputational risk. Management is responsible for the day-to-day identification and measurement of these risks, while the Board, as a whole and through its committees, is responsible for oversight of management actions in addressing those risks.

The Risk Committee is responsible for overseeing the Company’s enterprise risks and establishing a risk appetite statement for the full Board to review and approve.  The Risk Committee receives regular reports regarding the Company’s compliance risks, including Bank Secrecy Act/Anti-Money Laundering, Cyber Security, Information Security, Operational Risks, Business Continuity and Vendor Risk.  In addition, the Risk Committee reviews the Company’s business continuity program, model validation program and coordinates with other Committees on other key risks.

The Audit Committee is responsible for overseeing the Company’s financial reporting risk and the entire audit function, and it evaluates the effectiveness of internal and external audit efforts. It receives a status report from the Company’s Director of Internal Audit on at least a quarterly basis regarding the adequacy and effectiveness of internal control systems, including the design and operating effectiveness of the Company’s internal controls over financial reporting. The Director of Internal Audit will also present annually to the Board an internal audit plan for the coming year. It is the Committee’s responsibility to review and approve the internal audit plan and to ensure it meets the needs of the organization.

The Credit Committee is responsible for overseeing, establishing and monitoring risk tolerances with respect to credit risk, including concentrations.  The Finance and Sustainability Committee is responsible for the oversight of interest rate risk, liquidity risk, and capital risk. The Finance and Sustainability Committee also oversees the Company’s insurance program and addresses Environmental, Social and Governance risk items, including oversight of the Company’s Community Reinvestment Act compliance.

The Board considers the most significant risks facing the Company and the Company’s general risk management strategy, to ensure that risks undertaken by the Company are consistent with the Board’s stated risk appetite. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Chairman of the Board and other independent directors work together to provide strong, independent oversight of the Company’s management and affairs directly and through its standing committees and, when necessary, special meetings of independent directors.  The Bank believes this structure and division of responsibility is an effective approach in identifying and mitigating risks. Although seemingly well suited to this purpose, the Company will continue to regularly reevaluate the Board leadership structure to ensure appropriateness in the face of various situations and circumstances.

Employee, Officer and Director Hedging.

The Company does not allow directors and executive officers to enter into short sales of common stock or similar hedging or other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities or where potential gains are linked to a decline in the price of our stock. Recipients of equity awards also may not enter into any agreement that has the effect of transferring or exchanging any economic interest in an award for any other consideration. Further, directors and executive officers, as well as all officers of the Company, are prohibited from pledging Company securities as collateral for a loan or holding Company securities in a margin account.

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COMMITTEES OF THE BOARD

Audit Committee

General. The Board has a standing Audit Committee, composed of directors Berra, Castle (Chairperson), Scearcy, Tharp and Woods, each of whom is an independent director as defined by the rules of Nasdaq. Each member of the Audit Committee also meets the independence criteria prescribed by applicable law and the rules of the SEC for Audit Committee membership. Each Audit Committee member meets Nasdaq’s financial knowledge requirements and has substantial experience as an executive officer (or equivalent) or owner of his or her respective business or profession. In addition, at least one member of the Audit Committee has the requisite financial sophistication required under the rules of Nasdaq for one such member. The Board has designated Lynda Scearcy and Julie Castle as “audit committee financial experts” under SEC rules.

During the fiscal year ended December 31, 2022, the Audit Committee held a total of 8 meetings. The purpose of this committee, with respect to its audit duties, is to meet with the Company’s outside auditors in order to fulfill the legal and technical requirements necessary to adequately protect the Company’s directors, shareholders, employees and depositors. It is also the responsibility of the Audit Committee to select the Company’s independent registered public accounting firm and to make certain that this firm has the necessary freedom and independence to freely examine all Company records. Further, the Audit Committee pre-approves all audit and permissible non-audit services to be performed by the independent public accountants, with certain de minimis exceptions. Each year the committee reviews the risk assessment of the Company and assigns priorities for the coming year to have internal audit reviews conducted by in-house internal audit, or third-party outsourced vendors for branch, loan, operational, information systems and compliance.  The committee approves the contractual basis of each internal audit engagement letter and arrangement under consideration.

Further, as part of its regular meeting schedule, the committee reviews annual and quarterly SEC reports and discusses those reports with Management and the independent accountants as appropriate. The committee also meets with the audit partner in charge of the engagement, who presents the audited consolidated financial reports to the committee upon completion of the annual engagement. The committee receives and reviews management letters and all reports of external independent firms which have been contracted to perform agreed upon procedures for the benefit of the Company and the committee.

Additionally, the committee reviews all Reports of Examination prepared by regulators regarding safety and soundness, compliance, or other examinations performed by such agencies. As part of its responsibilities, the committee also reviews all management-initiated responses to internal audit engagements conducted by independent consultant firms or examinations by regulatory agencies. The Audit Committee has ultimate responsibility for determining matters of interpretation with respect to the audit and accounting related portions of our Code of Ethics, and for making all final decisions concerning any disciplinary actions relating to those portions of the Code.  Finally, the Audit Committee establishes procedures and monitors the Company’s whistleblower program with respect to complaints about the Company’s accounting, internal controls, auditing matters, violations of the Code of Ethics and allegations of fraud or corruption.

Audit Committee Charter. The Board of Directors has adopted an Audit Committee charter, which outlines the purpose of the Audit Committee, delineates the membership requirements, and addresses the key responsibilities of the committee. The charter may be found on our web site, “www.sierrabancorp.com” on the “Investor Relations” tab under the topic “Governance Documents.”

Audit Committee Report. The Audit Committee has reviewed and discussed with management our audited consolidated financial statements as of and for the fiscal year ended December 31, 2022. The committee has discussed with our independent public accountants, which are responsible for expressing an opinion on the conformity of our audited consolidated financial statements with generally accepted accounting principles, the matters required to be discussed by the Public Company Accounting Oversight Board’s (“PCAOB”) Auditing Standard No. 1301, including their judgments as to the quality of our financial reporting. The committee has received written disclosures and a letter from our independent public accountants as required by the Public Company Accounting Oversight Board (PCAOB) Rule 3526 and discussed with the independent public accountants the firm’s independence from management and from the Company. In

considering the independence of our independent public accountants, the committee took into consideration the amount and nature of the fees paid the firm for non-audit services, as described under “Proposal 2” below. The Audit Committee also reviewed management’s report on its assessment of the effectiveness of the Company’s internal control over financial reporting and the independent registered public accounting firm’s report on the effectiveness of the Company’s internal control over financial reporting.

In reliance on the review and discussions described above, the committee recommends to the Board of Directors that the year-end audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for filing with the SEC.

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Submitted by:

Julie G. Castle, Chairperson             Lynda B. Scearcy

Albert L. Berra                                 Morris A. Tharp

Gordon T. Woods

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Nominating and Governance Committee

General. The Board has a standing Nominating and Governance Committee (the “Governance Committee”), comprised of directors Tharp (Chairperson), Berra, Christenson, Dutto, Holly, Scearcy, Woods, Abundis, Castle, and Karim, each of whom qualifies as an independent director under the Nasdaq rules. The Governance Committee met once during 2022. The primary functions of this committee are to (i) identify qualified candidates for director, evaluate the incumbent directors whose terms expire at each upcoming annual meeting, and recommend to the Board the director nominees for each annual meeting of shareholders; (ii) determine desired Board member skills and attributes and annually review and update the criteria for evaluating candidates for directors; (iii) annually evaluate the size and composition of the Board and each committee in light of the Company’s operating requirements and existing corporate governance trends; (iv) conduct searches as needed for prospective directors with the desired skills and attributes, and conduct reviews as appropriate into the background and qualifications of director candidates; (v) consider bona fide candidates recommended by shareholders for nomination for election to the Board in accordance with the policies and procedures set forth in the Governance Committee’s charter; (vi) retain and compensate third party search firms to assist in identifying or evaluating potential nominees to the Board, if necessary; (vii) assess and report annually to the Board concerning the effectiveness and performance of the Board and Board committees as well as the effectiveness of the relationship between the Board and management, and identify areas in which the Governance Committee or management believes the Board could improve; (viii) monitor the orientation and continuing education program for directors; (ix) annually review and assess the adequacy of the Company’s Corporate Governance Guidelines in light of applicable legal and regulatory requirements; (x) annually review and assess the adequacy of the Company’s Code of Ethics; (xi) have ultimate responsibility for determining matters of interpretation with respect to the non-audit related portions of the Code of Ethics and for making all final decisions concerning any disciplinary actions relating to those portions of the Code; (xii) review and oversee matters relating to the independence of Board and committee members; and (xiii) periodically review the Company’s succession plans and make recommendations to the Board of Directors with respect to management and director succession.

The Board and the Governance Committee have adopted specific policies and procedures concerning the director nomination process, in accordance with which the Governance Committee considers various matters and criteria and on that basis recommends the proposed slate of nominees to the full Board. The specific procedures and criteria which the Governance Committee follows and considers in making its decisions concerning recommended nominations for directors are described above under “CORPORATE GOVERNANCE – Director Nomination Procedures, Qualifications and Related Matters.” Prior to 2020, we had not paid fees to any third party to identify or evaluate or assist in identifying or evaluating potential nominees. However, in 2020 the Company used a third-party search firm to identify potential new directors.  Such third-party firm expanded the search both geographically and with a focus on additional financial services expertise and identified several candidates from whom two directors (Julie Castle and Susan Abundis) were selected.  In early 2022, an executive with the search firm (Michele Gil) was interviewed by the Committee and nominated as a Class I director for election at the 2022 Annual Meeting of Shareholders. Further, a candidate identified in the 2020 search was selected as a potential candidate in 2022 with the proposal to expand the size of the Board.  The Committee interviewed

the candidate and recommended to the full Board to nominate Ms. Karim as a Class II director with the proposal to expand the size of the Board at the 2022 Annual Meeting of Shareholders.  

Governance Committee Charter. The Board of Directors has adopted a Nominating and Governance Committee charter, which outlines the purpose of the Governance Committee, delineates the membership requirements, and addresses the key responsibilities of the committee. The charter may be found on our web site, “www.sierrabancorp.com” on the “Investor Relations” tab under the topic “Governance Documents.”

Compensation Committee

General. The Board has a Compensation Committee, of which directors Berra (Chairperson), Castle, Christenson, Holly, and Tharp are members. The Compensation Committee met two times during 2022. All of the current and former members of the Compensation Committee are independent directors under Nasdaq rules. The primary functions of this committee are to (i) consider and make recommendations to the Board of Directors concerning the Company’s incentive compensation plans and equity-based compensation plans in which directors and executive officers may participate; (ii) approve option grants or restricted stock awards to the Company’s Named Executive Officers, as defined herein, unless the Board of Directors, in its discretion, should decide to take such actions instead of the Committee with respect to any such awards; (iii) annually evaluate the performance of the Company’s Chief Executive Officer (the “CEO”)  in light of the goals and objectives of the Company’s executive compensation plans and the CEO’s individual performance goals, and make recommendations to the Board of Directors concerning his compensation levels based on this evaluation; (iv) annually review and make recommendations to the Board concerning the compensation arrangements for all executive officers; (v) monitor compensation trends, solicit independent advice where appropriate, and ensure that executive compensation plans are sufficient to attract and retain high quality executives; (vi) review and make recommendations to the Board concerning any salary continuation agreements or other contractual arrangements with any officers; (vii) annually review the compensation paid to non-employee directors and make recommendations to the Board regarding such compensation, provided that no member of the Committee may act to fix his or her own compensation except for uniform compensation paid to directors for their services as a director; (viii) review executive officer compensation for compliance with applicable laws and regulations; (ix) have the authority to retain and terminate any compensation consultant to be used to assist in the evaluation of the CEO, other executive officers, and director compensation; (x) produce an annual report on executive compensation, and review and approve the Compensation Discussion and Analysis appearing in the Proxy Statement; (xi) review and make recommendations to the Board concerning salary ranges for graded personnel, as well as personnel policies and any similar documents relating to personnel matters which require Board approval; and (xii) annually review group health insurance and workers compensation insurance, and make recommendations to the Board with regard to carriers and potential changes in coverage.

Compensation Committee Charter. The Board of Directors has adopted a Compensation Committee charter, which outlines the purpose of the Compensation Committee, delineates the membership requirements, and addresses the key responsibilities of the Committee. The charter may be found on our web site, “www.sierrabancorp.com” on the “Investor Relations” tab under the topic “Governance Documents.”

Compensation Committee Interlocks and Insider Participation in Compensation Decisions. The persons named above were the only persons who served on the Compensation Committee during the fiscal year ended December 31, 2022. None of these individuals has been an officer or employee of the Company or any of its subsidiaries within the past three fiscal years. None of our executive officers serves as a member of the Board of Directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board of Directors or our Compensation Committee.

Compensation Committee Report. In performing its oversight role, the Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with management. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement to be filed on Schedule 14A with the SEC.

In addition, the Compensation Committee reviewed the compensation structure for employees of the Company and concluded that none of the elements comprising such compensation encourages behavior that would lead to excessive risks for the Company.

Submitted by the Compensation Committee of the Board of Directors.

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Albert L. Berra, Chairman                Vonn R. Christenson

James C. Holly        Julie G. Castle

Morris A. Tharp

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Risk Committee

General. The Risk Committee of the Board is comprised of Directors Scearcy (Chairperson), Karim, Gil, Dutto and McPhaill. The Risk Committee met seven times in 2022 and is responsible for oversight and establishment of risk appetite guidance for the Company. The Committee receives a report from the Chief Risk Officer on the levels of residual risk present in the Company and whether the levels are consistent with risk appetite. The Committee evaluates the responses from management in addressing risks and implications for operations, information security, compliance, and financial performance. The Committee also has oversight responsibility for the Company’s enterprise risk management framework, approval of risk management policies including an annual review of the Risk Appetite Statement and, assessment of management’s implementation of the risk management framework. The Committee reviews management’s assessment of the aggregate level of risk across each of the traditionally defined categories of risk: liquidity, credit, regulatory, operational, interest rate, market, strategic, and reputational.

Risk Committee Charter. The Board of Directors has adopted a Risk Committee charter, which outlines the purpose of the Risk Committee, delineates the membership requirements, and addresses the key responsibilities of the Committee. The charter may be found on our web site, “www.sierrabancorp.com” on the “Investor Relations” tab under the topic “Governance Documents.”

Credit Committee

General. The Credit Committee of the Board, previously the Senior Loan Committee, consists of Directors Abundis (Chairperson), Holly, Karim, Woods, and McPhaill. The Credit Committee met 12 times in 2022. The Credit Committee is responsible for overseeing credit policy, monitoring asset quality, reviewing credit risk, reviewing and approving the Allowance for Credit Losses and related Provision for Credit Losses, and reviewing certain credit-related actions.

Credit Committee Charter. The Board of Directors has adopted a Credit Committee charter, which outlines the purpose of the Credit Committee, delineates the membership requirements, and addresses the key responsibilities of the Committee. The charter may be found on our web site, “www.sierrabancorp.com” on the “Investor Relations” tab under the topic “Governance Documents.”

Finance and Sustainability Committee

General. The Finance and Sustainability Committee was added as a committee of the Company in March 2022. The Finance and Sustainability Committee members are Abundis, Christenson (Chairperson), Dutto, Gil, and McPhaill. The Finance and Sustainability Committee is responsible for overseeing the Company’s balance sheet position and sensitivity to interest rate risk, the Company’s investment portfolio including setting specific parameters, the Company’s liquidity risk, and the Company’s capital management. In addition, the Finance and Sustainability Committee establishes guidelines for the Company’s initiatives and reporting surrounding Environmental, Social, and Governance risks, including oversight of the Company’s Community Reinvestment Act activities and oversight of certain social risks associated with human capital activities. The Finance and Sustainability Committee also oversees the Company’s insurance program. The Finance and Sustainability Committee met four times in 2022.

Finance and Sustainability Committee Charter. The Board of Directors has adopted a Finance and Sustainability Committee charter, which outlines the purpose of the Finance and Sustainability Committee, delineates the membership requirements, and addresses the key responsibilities of the Committee. The charter may be found on our web site, “www.sierrabancorp.com” on the “Investor Relations” tab under the topic “Governance Documents.”

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy and Objectives

Our primary objectives with respect to executive compensation are to attract and retain the most talented and dedicated executives possible, and to align their interests with those of our shareholders.  To that end, we strive to maintain compensation plans that are competitive relative to those of similar publicly-traded banking institutions, and to provide a substantial level of at-risk compensation for our executives that depends in part on the Company’s financial performance.  Compensation for our Named Executive Officers consists primarily of the following elements, which are discussed in greater detail below: base salary; annual discretionary bonuses based on performance guidelines; and longer-term incentive awards including restricted stock and stock option grants, and salary continuation agreements. The Compensation Committee periodically evaluates and adjusts the types and weighting of these components to support Company objectives.  The Compensation Committee and the Board also believe it is important to ensure that the compensation of the CEO is equitable and reasonable in relation to that of the other Named Executive Officers, and that the compensation of the other Named Executive Officers is reasonable in relation to each other given their respective duties and responsibilities, experience, and certain other relevant factors.  

Process for Making Compensation Decisions

Roles of the Compensation Committee.   The Compensation Committee reviews executive compensation and makes recommendations to the Board with regard to appropriate target compensation levels and compensation component weightings for all of the Named Executive Officers in alignment with our compensation philosophy and consistent with employment agreements. Compensation includes the primary components listed in the previous paragraph, as well as any perquisites, or special or supplemental benefits.  In making its recommendations to the Board, the Compensation Committee evaluates compensation arrangements and mix of short-term and long-term compensation for comparable positions at peer institutions (where such data is publicly available), the relative financial performance of the Company, recommendations of the CEO (in the case of the other Named Executive Officers), internal fairness, the past performance and future goals of the CEO, and independent analysis performed by the committee.  The specific factors considered are detailed below under “Targeted Compensation” and “Elements of Executive Compensation.”  The Compensation Committee has the authority to engage consultants and request other information as needed to fairly measure and evaluate the overall compensation of the Named Executive Officers. The Compensation Committee last engaged a compensation consultant in 2021 when it engaged Pearl Meyer to perform an executive compensation review. For 2022, the Compensation Committee directed Company personnel to utilize publicly available data to update the peer compensation study, using the same peer group and methodology, as performed in 2021 by Pearl Meyer.

Role of the Chief Executive Officer.  The CEO annually reviews the performance of the Named Executive Officers other than himself, and presents his conclusions and recommendations based on those reviews to the Compensation Committee.  In 2022, the CEO considered the updated peer compensation study and the stated objectives of the Compensation Committee and the Board in formulating his recommendations for base salary adjustments, target bonus amounts, and equity awards. The Compensation Committee will discuss the CEO’s recommendations before using its discretion in making its recommendations to the Board, related to the compensation of the Named Executive Officers. The CEO is not a member of the Compensation Committee but is invited to attend meetings of the Committee as necessary to provide input and recommendations on compensation for the other Named Executive Officers.  The CEO leaves the meeting prior to the Committee’s discussion and determination of the components of his own amount and mix of compensation.

Targeted Compensation

As noted, a peer compensation study is used to assist in establishing targeted compensation levels for all Named Executive Officers.  As in the past, the peer group criteria is subject to modification for future compensation studies if the peer group does not continue to provide a representation of similarly sized banks within our geography. The intention is to use a peer group of similarly sized banks in Western states or in communities of similar size.  For the most recently completed  executive compensation review, the peer group was comprised of 17 publicly-traded bank holding companies or banks headquartered primarily in Western states, with total assets ranging from approximately $2.1 billion to $7.3 billion, with a median asset size of $4.0 billion (the “Peer Group”) and a similar mix of loans.¹  The 2022 Peer Group is identical to the peers from the 2021 study, except that peers that did not file a Proxy for the most recent year were removed. Specifically, three peer institutions were removed as they were acquired by another institution since the last compensation study was performed and consequently, did not file a proxy to report compensation data in the most recent year.  The peer executive compensation review provides an analysis of peer base salary, short-term incentives (including discretionary bonuses), and long-term incentives (including the value of restricted stock, stock option awards, and increases in pension values) (collectively, “Total Direct Compensation”), for Peer Group officers with similar positions equivalent to the Named Executive Officers, if available, or for similarly compensated officers regardless of title for whom compensation information is publicly disclosed. Because the most recent available peer compensation data was from 2021, an annualized adjustment of 3% was made to the peer compensation data consistent with the approach used in prior years.  

Another element in assessing appropriate levels of Total Direct Compensation for the Named Executive Officers is the Company’s financial performance and size relative to peer institutions.  Using a 5-year average for Return on Average Assets and Return on Average Equity, the Company’s results were at the 63^rd and 58^th percentiles, respectively, relative to peer institutions.  In addition, the Company’s total assets were at the 42^nd percentile of the peer group.

Based on the Company’s net income and financial performance metrics, as well as overall financial performance relative to peer institutions, compensation data in the peer study, recommendations of the CEO (in the case of the other Named Executive Officers), individual performance, and other independent analysis performed by the Compensation Committee, the committee selected a target range, as adjusted for restricted stock grants, between the 50^th and 75^th percentiles of Total Compensation for Peer Group officers as a general target for Total Compensation. After applying the principle of internal equity and in consideration of prior position-specific experience, Total Compensation established by the Compensation Committee for an individual Named Executive Officer might exceed or fall short of the target range. With regard to the components of Total Compensation, the goal of the Compensation Committee was to maintain a substantial level of “at risk” compensation while striving to ensure that neither base salary nor potential short-term incentive compensation are substantially below the Peer Group median.

The aforementioned variables being duly analyzed and considered, the Compensation Committee came to a unanimous conclusion concerning appropriate 2023 targets for base salaries and short-term incentive compensation for the Named Executive Officers. The Compensation Committee then presented its recommendations to the Board, which unanimously approved those recommendations, with Mr. McPhaill abstaining. This ultimately resulted in 2023 base salaries being increased by 5% each for the Named Executive Officers. For comparison, the 2022 base salaries were left unchanged over 2021 except for the Chief Credit Officer/Chief Risk Officer who received a raise of 6.4% in August 2021 upon an expansion of responsibilities for the Chief Risk Officer position.  The incentive bonus potential for 2023 was established as 75% of base salary for the CEO and 50% of base salary for the other Named Executive Officers, which is unchanged from 2022.  

¹ The Peer Group consists of the following banks and bank holding companies: Allegiance Bancshares, Inc., Houston, Tx; Bank of Marin Bancorp, Novato, California; Baycom Corp, Walnut Creek, California; CBTX, Inc., Houston, TX; Central Pacific Financial Corp, Honolulu, HI; Central Valley Community Bancorp, Fresno, California; Farmers & Merchants Bancorp, Lodi, California; First Western Financial, Inc., Denver, CO; FS Bancorp, Inc., Terrace, WA; Guaranty Bancshares, Inc., Addison, TX; Hamni Financial Corporation, Los Angeles, CA; Heritage Commerce Corp, San Jose, California; Northrim Bancorp, Inc., Anchorage, AK; Preferred Bank, Los Angeles, California; RBB Bancorp, Los Angeles, California; South Plains Financial, Inc., Lubbock, TX; and Territorial Bancorp, Inc., Honolulu, HI.

Prior to 2020, it was the practice of the Compensation Committee to grant the Named Executive Officers equity-based compensation in the form of 5,000 stock options in the first quarter of each year.  

Starting in August 2020, restricted stock awards were granted to the Named Executive Officers in order to better align the interests of the executives with shareholders’ interests and to provide a retention benefit.  The amount of these August 2020 restricted award grants were $600,000 for the Chief Executive Officer and $400,000 each to the Chief Financial Officer, Chief Banking Officer and Chief Administrative Officer.  Shortly after the hiring of the new Chief Credit Officer in December 2020, he was granted $400,000 of restricted stock awards in March 2021.  All of these initial restricted stock grants were time-based and vest ratably over 5 years. The initial restricted stock grants made to the named executive officers in 2020, or in March 2021 in the case of Mr. Boyle, were equal to approximately one year of expected base salary at such time.  

In November 2021, the Compensation Committee recommended to the Board the grant of additional restricted stock awards to the Named Executive Officers, which unanimously approved those recommendations, again, with Mr. McPhaill abstaining.  The amount of the restricted stock awards granted in November 2021 was $125,000 for the Chief Executive Officer and $75,000 each to the other Named Executive Officers.  Half of the restricted award grant is time-based and will vest ratably over three years.  The remaining half of the restricted stock award is performance-based and vests at the end of three years.  With respect to the performance-based restricted stock awards, 100% vests if the Company’s 3-year average ROE is at the 50^th percentile as compared to the peer average ROE over the same 3-year period.  None of the performance-based awards vest if actual performance is below the 30^th percentile as compared to peers and 150% of the performance-based awards will vest if actual performance is at or above the 75^th percentile as compared to peers. Vesting for actual performance between the different performance targets is determined by interpolation.  The total restricted stock awards granted to the CEO was approximately 21% of his base salary for 2021 and the total restricted stock awards granted to the other Named Executive Officers was approximately 19% of each of their base salaries for 2021.

In November 2022, the Compensation Committee recommended to the Board the grant of additional restricted stock awards to the Named Executive Officers, which unanimously approved those recommendations, again, with Mr. McPhaill abstaining.  The amount of the restricted stock awards granted in November 2022 was $250,000 for the Chief Executive Officer and $150,000 each to the other Named Executive Officers.  Half of the restricted award grant is time-based and will vest ratably over three years.  The remaining half of the restricted stock award is performance-based and vests at the end of three years.  With respect to the performance-based restricted stock awards, 100% vests if the Company’s 3-year average ROE is at the 50^th percentile as compared to the peer average ROE over the same 3-year period.  None of the performance-based awards vest if actual performance is below the 30^th percentile as compared to peers and 150% of the performance-based awards will vest if actual performance is at or above the 75^th percentile as compared to peers. Vesting for actual performance between the different performance targets is determined by interpolation.  The total restricted stock awards granted to the CEO was approximately 41% of his base salary for 2022 and the total restricted stock awards granted to the other Named Executive Officers ranged from approximately 36% to 39% of each of their base salaries for 2022.

Factoring in base salaries, assuming a full incentive bonus payout, and the current value of stock grants at target performance, the potential Total Direct Compensation for Named Executive Officers for 2022 was at the following percentile rankings relative to the Peer Group’s adjusted 2022 compensation data (as noted above, the adjusted Peer estimate incorporates a 3% annual increase ):  the 35^th percentile for the CEO, the 51^st percentile for the CFO, the 38^th  percentile for the CBO, the 67^th percentile for the CAO and the 60^th percentile for the CCO/CRO.

Employment Agreements

In December 2018, the Company entered into employment agreements with the Chief Executive Officer and the Chief Banking Officer that commenced on January 1, 2019 with initial terms of three years, with evergreen renewals for one-year terms subsequent to the initial term unless either the executive or the Company provides notification of non-renewal to the other party at least six months in advance of the renewal date.  Similar agreements were entered into with the Company’s new executive officers upon commencement of their employment, Mr. Treece’s employment agreement became effective in January 2020, Ms. Johnson’s employment became effective in February 2020, and Mr. Boyle’s

employment agreement became effective in December 2020.  The agreements specified minimum annual base salaries as well as annual discretionary bonuses of up to 75% of annual base salary for Mr. McPhaill and 50% of annual base salary for the other Named Executive Officers.  Mr. Treece’s and Ms. Johnson’s employment agreements also authorized the grant of 20,000 stock options to vest ratably over 5-years and Mr. Boyle’s employment agreement authorized the grant of $400,000 of restricted stock to vest ratably over 5-years. The agreements also note the basic terms and conditions of other benefits, delineate permitted outside activities, and provide indemnification for the executives for certain circumstances.  Each agreement includes noncompetition, non-solicitation and nondisclosure conditions applicable to the executives.

The employment agreements automatically terminate in certain circumstances, including the following:  the death or incapacity of the executive; termination of the executive’s employment for cause; or, a change in control of Sierra Bancorp.  For such automatic terminations, there is no further obligation on the part of the Company to make payments or provide any benefits pursuant to an agreement except in the case of a change in control of the Company.  Furthermore, the agreements stipulate that the Company may terminate the employment of the named executive officer with 30 days prior written notice to the executive, and the executive may terminate his agreement and his employment with the Company at any time with 90 days prior written notice to the Company.  Under the Employment Agreements, as amended on January 19, 2023, in the event of a change in control, or if the Company initiates termination of employment for a reason other than one which constitutes an automatic termination, the Company will provide the executive(s) with the payments and benefits that are outlined below under “EXECUTIVE OFFICER AND DIRECTOR COMPENSATION – Potential Payments Upon Termination or Change in Control.” An executive’s receipt of severance benefits of any kind pursuant to his employment agreement is conditioned upon his execution of the full and complete release of any and all claims against Sierra Bancorp and Bank of the Sierra and their respective affiliates, directors, officers, employees, agents, attorneys, insurers, and successors in interest, arising from or in any way related to executive’s employment or termination of executive’s employment.

Elements of Executive Compensation

Base Salary. Base salaries for our executives are dependent on the scope of their responsibilities, taking into account competitive market compensation paid by similar companies for comparable positions. Base salaries are reviewed and adjusted annually, as necessary, to realign them with market levels based upon individual responsibilities, work experience and job performance.

Discretionary Annual Incentive Bonus. The Board of Directors has the authority to award discretionary annual cash bonuses to the Named Executive Officers based on the recommendations of the Compensation Committee.  The Board has adopted an incentive bonus plan for Named Executive Officers that is dependent on individual performance, as determined by the Compensation Committee and the Board with input from the CEO in the case of the other Named Executive Officers, and the Company’s financial performance relative to Board-approved targets.  Earnings targets and individual performance goals are carefully established to provide a challenge, while at the same time being realistically achievable without engaging in activities posing excessive risk. The Board establishes potential levels for incentive bonuses at the start of each fiscal year, based on the recommendations of the Compensation Committee.

Bonuses for any given calendar year are typically accrued as an expense by the Company during the year for which they are applicable but are not paid until March of the following year, subsequent to our receipt of the final audit report and after the review and approval of bonus recommendations made by the Compensation Committee to the Board of Directors.  For 2022, the Company’s incentive bonus plan specified a potential bonus level of 75% of base salary for the President/CEO, and 50% of base salary for other Named Executive Officers.  However, the plan also specified that the potential levels were guidelines only, and that all payments made pursuant to the plan are ultimately made at the discretion of the Board of Directors.  The 2022 incentive plan had a 70% weighting for Company performance; a 20% weighting for the Company’s performance relative to peers; and a 10% weighting for individual performance. For the 10% individual performance component, the team’s achievement of a Satisfactory or better rating on its 2022 Community Reinvestment Act Performance Evaluation was used. As a Satisfactory rating was achieved, this component was deemed to have been met in full. The 70% Company performance target used an earnings target for 2022 of at least $36.0 million in net income for a potential full bonus payout of the Company performance portion of the bonus, and minimum net income of $18.0 million for the company performance portion of the performance target.  If actual net income was between those two targets, the potential payout ratio for the Company performance portion of the bonus would have been equal to net income for the year divided by $36.0 million.  For 2022, net income relative to our 2022 earnings targets was 93.5% and therefore,

this component of the incentive bonus was reduced. The 20% component that measured Company performance relative to peers evaluated the 3-year average Return on Average Assets and 3-year Return on Average Equity against a peer group consisting of publicly-traded bank holding companies between $1.5 billion and $6.0 billion in asset size for each year.  The three-year Return on Average Assets exceeded peer performance, whereas the Return on Average Equity was lower than peer performance.  Combined, this part of the incentive bonus was reduced by 0.7%.   When combined all components of the 2022 executive incentive bonus, the overall payout was made at 94.8% of target.

For 2023, the incentive plan payouts are based upon 80% for achievement of target net income, and 20% will be discretionary based on individual performance. If target net income is exceeded, the payout can be increased by 50% of the percentage excess up to an achievement of 20% of overachievement of the net income component.  Therefore, if target net income is exceeded by 10%, the component of the executive incentive plan tied to achievement of target net income will be increased by 50% of the 10% excess, or 5%.      

Equity Incentives and Stock Ownership.  Our 2017 Stock Incentive Plan (the “2017 Plan”) authorizes the Board of Directors or the Compensation Committee in their discretion to grant directors, consultants and employees of the Company restricted stock awards and/or options to purchase shares of our common stock.  Prior to 2020, the Company had exclusively granted stock options to directors and employees of the Company.  

Starting in August 2020, the Compensation Committee elected to shift from issuing stock options to restricted stock as its primary long-term equity incentive vehicle.  The Board and the Compensation Committee feel that restricted stock better aligns the interests of our executives with those of our shareholders, the unvested shares act as a retention vehicle for our executives as the Company no longer uses a Supplemental Employee Retirement Plan for its Named Executive Officers other than for the CEO, and restricted stock provides a long-term balance to the shorter-term nature of base salary and discretionary annual bonuses.  As three of the five named executive officers are relatively new to the Company, the Compensation Committee further determined that a substantial restricted stock award would provide a strong retention vehicle that better aligns with our peers.  

As described above, in November 2022, the Compensation Committee recommended the grant of additional restricted stock awards to the Named Executive Officers to the Board, which unanimously approved those recommendations. The amount of the restricted stock awards granted in November 2022 was $250,000 for the Chief Executive Officer and $150,000 each to the other Named Executive Officers.  Half of the restricted award grants in November 2022 were time-based and the remaining half were performance-based.  Further detail on the vesting of these awards is described above.

Additional details concerning the 2017 Plan and awards held at December 31, 2022 by the Named Executive Officers are set forth below under “EXECUTIVE OFFICER AND DIRECTOR COMPENSATION – Grants of Plan-Based Awards” and “Outstanding Equity Awards at Fiscal Year End.”  

We do not have requirements for our executives with regard to specific levels of stock ownership, but there is an expectation that vested restricted stock will be held by executives, net of shares sold to cover taxes.  Further, the combination of vested and unvested restricted stock will act as both a retention incentive as well as better align the interests of executives with those of shareholders.

Salary Continuation Agreements. The only active Named Executive Officer with a salary continuation agreement is our Chief Executive Officer. We entered into a salary continuation agreement with our CEO that provides an annual benefit of $150,000 per year for 15 years, with payments commencing after retirement from the Company.  The benefit amount and term was determined by the CEO’s position and scope of responsibility, as well as the amount of the annual expense accrual required to accumulate the appropriate liability for payment obligations.  Expense accruals associated with salary continuation agreements are reflected in compensation tables as a change in pension value.  No benefits are payable in the event of a voluntary termination prior to a specified retirement date, or an involuntary termination for cause.  However, the salary continuation benefit becomes fully vested and payable upon a change in control if followed by resignation or other termination of employment.  The material terms of the salary continuation agreement is described below under “EXECUTIVE OFFICER AND DIRECTOR COMPENSATION – Potential Payments Upon Termination or Change in Control – Salary Continuation and Split Dollar Agreements.”  

Deferred Compensation Plan. Executive officers are eligible to participate in a non-qualified deferred compensation plan, the “409A Plan,” whereby they can elect to defer all or part of their cash compensation for payment after retirement or termination of employment. Deferred compensation amounts are not taxed until received by the participant. Deferred compensation balances are unsecured obligations of the Company, and are credited/charged by the Company for gains/losses pegged to participant-directed investment allocations. Investment allocation options include equity funds, real estate funds, bond funds and a fixed income alternative. The Company offsets deferred compensation accruals with tax-advantaged income/losses on separate account Company-owned life insurance that is invested in options similar to those selected by deferred compensation plan participants. No above-market or preferential earnings are provided by the Company with respect to these plans. Further details on the 409A Plan are described below under “EXECUTIVE OFFICER AND DIRECTOR COMPENSATION – Deferred Compensation.”

Perquisites and Other Programs. The Company provides its executive officers with perquisites and personal benefits that it believes are reasonable and consistent with its overall compensation strategy to attract and retain qualified executives and facilitate the performance of their duties. The Company maintains a 401(k) employee savings and retirement plan, which is offered to all employees.  After the end of each calendar year a discretionary contribution to the 401(k) plan is considered by the Board of Directors.  This has typically resulted in a Company contribution to plan participants in the range of 50% to 95% of the lesser of the following:  the participant’s actual contribution; 6% of the participant’s gross cash compensation during the preceding calendar year; or, 6% of the IRS annual compensation limit for purposes of company contributions ($305,000 in 2022). For 2022, the Company contribution was 80% and for 2021 it was 95%.  Other benefits available to all employees include medical, dental, and vision insurance.  Executive officers may also be provided with club memberships, an automobile allowance, mileage reimbursement, use of a Company-owned automobile, and/or use of a cell phone or a cell-phone allowance.  Reportable annual benefits of $10,000 or more are described in the Summary Compensation Table below.

Conclusion. The Compensation Committee intends to continue to link executive compensation to corporate performance and shareholder return, while avoiding forms of compensation that might encourage behavior which could have an adverse impact on the Company.  The various pay vehicles offered to our executives are balanced to compensate them for current performance and provide motivation for them to contribute to our overall future success, and we believe that our executive compensation policies and programs serve the best interests of our Company and our shareholders.

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Executive Employment Agreements. As discussed above under “Employment Agreements,” the Company has entered into employment agreements, as amended, with each of its executive officers. In the event of a change in control, the agreements, as amended, specify that the executive shall receive a cash payment in an amount equal to two times the executive’s annualized base salary that is in effect during the year the termination occurs, plus the maximum bonus potential for the year. The executive shall also receive a continuation of group health, vision and dental insurance coverages, and reimbursement for 50% of the cost of insurance for the executive’s dependents, for a period of 12 months from the date of termination. If the Company terminates the executive’s employment for a reason other than a change in control, the death or incapacity of the executive, or for cause, the agreements specify that the executive shall receive a cash payment in an amount equal to the executive’s annualized base salary during the year the termination occurs, as well as a continuation of group health, vision and dental insurance coverages and reimbursement for 50% of the cost of insurance for executive’s dependents, for a period of 12 months from the date of termination.

Salary Continuation and Split Dollar Agreements. The Company entered into a salary continuation agreement with Mr. McPhaill in January 2007 (amended in April 2015 in conjunction with his promotion to President and Chief Executive Officer), which entitles him to an annual benefit of $150,000 for 15 years subsequent to his retirement at age 65 or later, subject to certain restrictions. No benefits are payable in the event of a voluntary termination prior to his 65^th birthday (except in connection with a change in control as discussed below), or termination for cause. In the event of cessation of employment due to disability or termination without cause prior to his designated retirement age, Mr. McPhaill’s benefit would be a lump sum payment equal to the amount accrued on the Company’s books for such liability as of the end of the month preceding termination of employment. The actual accrual balance at December 31, 2022 is shown in the Pension Benefits table above. This accrual balance is currently expected to reach $1.061million by the end of 2030, but is subject to change depending on the discount rate utilized. Mr. McPhaill’s benefit will be fully accrued in May 2037, at which time it will be $1.523 million. Mr. McPhaill’s revised salary continuation agreement also provides a lump sum death benefit of $1.523 million in the event of his death prior to retirement from the Company; or, in the event of death after salary continuation benefits have commenced or after he becomes eligible for such benefits to be paid, there will be no lump sum death benefit but his beneficiary will receive, or continue to receive, the same benefits under his salary continuation agreement to which he was entitled at the time of his death. In the event of a change in control of the Company’s common stock followed within 12 months by Mr. McPhaill’s resignation or termination of his employment for any reason other than death, he would be fully vested in his retirement benefits and would begin to receive such benefits within the month following termination (subject to the requirements of Section 409A of the Internal Revenue Code).

The Company accrues monthly for post-retirement benefit obligations under the salary continuation agreement in a systematic and orderly way using an appropriate discount rate. The Company also purchased single-premium life insurance policies when the salary continuation agreement were originally established, in part to provide tax advantaged income to offset the annual cost of the accruals. These policies name the Company as beneficiary and the proceeds or cash surrender value of the policies will ultimately reimburse the Company for the original investments in the policies, as well as for payments made under the salary continuation agreement. The Company may purchase additional life insurance from time to time such that the aggregate amount is appropriate in relation to the accruals and ultimate obligations under the salary continuation agreement. The amounts expensed in 2022 for the Named Executive Officers for salary continuation arrangements are included as part of “Changes in Pension Value” in the Summary Compensation Table and were roughly offset by income from Company-owned life insurance policies.

Compensation of Directors

All directors received an annual retainer in 2022 of $30,000 plus per-meeting fees for their attendance, with exception of Directors Gil and Karim who received a proportionate retainer following their election to the Board at the 2022 Annual Meeting of Shareholders on May 25, 2022.  Additional retainers of $20,000, $10,000 and $10,000 were paid to the Board Chairman, Vice Chairman and Audit Committee Chairman, respectively. The per-meeting fee for attendance at the start of 2022 was $1,000 each for board meetings for both Sierra Bancorp and Bank of the Sierra, while per meeting fees of $800 per meeting were paid for committee meetings of both Sierra Bancorp and Bank of the Sierra. The Board Chairperson received an additional $500 per board meeting fee and Committee Chairpersons received an additional $400 to $500 per committee meeting fee. In July 2022, the Committee membership and Committee Chairperson roles were changed and with such changes, the number of committees each director was assigned was changed to three and all

committee chairs were changed with the exception of the Compensation Committee.  With these changes, the per meeting board fees were increased to $1,250 and the committee fees were increased to $1,000 per meeting.  The Board Chairperson fee was increased to $625 per meeting and the Committee Chairperson per meeting fee was increased to $500.  

In 2021, the Compensation Committee hired a third-party consultant, Pearl Meyer, to perform a Director Compensation Review.   The same peer group as used for the executive compensation study (described above) was used. For 2022, similar to the executive compensation peer group, the Compensation Committee directed Company personnel to utilize publicly available data to update the peer Director Compensation study, using the same peer group and methodology, as performed in 2021 by Pearl Meyer.

The Company instituted a Director Retirement Plan on October 1, 2002 and entered into associated agreements with its non-employee directors at that time. A supplemental plan for independent directors was adopted effective January 1, 2007. Current directors who qualify as plan participants are directors Tharp, Berra and Woods. The plans provide a combined annual benefit of $50,000 to each participant for a period of 10 years, commencing at retirement, disability, or a “change in control.”  In the event of death prior to any of those events, the plans provide a combined death benefit of $393,220, which is equal to the Company’s accrued liability for each plan participant. In case of death after the commencement of any benefit payments made pursuant to retirement disability, or a change in control, the death benefit is bifurcated according to the different terms of the 2002 and 2007 agreements. The earlier agreements provide for the payment of a lump sum benefit equal to the present value of the remaining payments under those agreements, discounted at 8%, while the latter agreements stipulate that the normal benefit due under those agreements will continue to be paid. The Company’s liability for potential payments under the director retirement agreements is fully accrued, and directors with retirement agreements are completely vested and eligible for their full benefits under those agreements. In October 2002, the Company entered into a salary continuation agreement with Mr. Holly that was fully vested as of his retirement as the Company’s CEO on March 31, 2015.

The Company also purchased single-premium life insurance policies covering most of the non-employee directors when the Director Retirement Plan was first implemented, in part to provide tax-advantaged income to offset the annual cost of the expense accruals. Those policies name the Company as beneficiary and the proceeds or cash surrender value of the policies will ultimately reimburse the Company for its original investment in the policies, as well as for certain payments made under the retirement agreements. The Company may purchase additional life insurance from time to time such that the aggregate amount is appropriate in relation to the accruals and ultimate obligations under the retirement agreements. In addition to such single-premium life insurance policies described above, in January 2003, the Board also approved a split-dollar benefit to director Berra in the amount of $400,000 as a result of transitioning his then current benefit from a predecessor director annuity plan to the Director Retirement Plan.

The table below summarizes the compensation paid to non-employee directors for the year ended December 31, 2022. Compensation paid to Mr. McPhaill, the only director who is also a Named Executive Officer, is set forth above in the various sections concerning compensation paid to Named Executive Officers.

Director Summary Compensation Table