Exhibit 10.18 Quaker City Bank Retirement Benefit Equalization Plan
Quaker City Bank
Retirement Benefit Equalization Plan
Effective: January 1, 2000
Table of Contents
ARTICLE 1 - PURPOSE.................................................. 1
ARTICLE 2 - DEFINITIONS.............................................. 2
2.1 Bank....................................................... 2
2.2 Board of Directors......................................... 2
2.3 Change-in-Control.......................................... 2
2.4 Code....................................................... 2
2.5 Compensation............................................... 3
2.6 Compensation Committee..................................... 3
2.7 Disability................................................. 3
2.8 Effective Date............................................. 3
2.9 ERISA...................................................... 3
2.10 Participant................................................ 3
2.11 Plan....................................................... 4
2.12 Plan Administrator......................................... 4
2.13 Plan Year.................................................. 4
2.14 Quaker ESOP................................................ 4
2.15 Quaker 401(k) Plan......................................... 4
2.16 Quaker SERP................................................ 4
2.17 Retirement Plan............................................ 4
2.18 Spouse..................................................... 4
2.19 Year of Service............................................ 5
ARTICLE 3 - BANK CONTRIBUTIONS....................................... 6
3.1 Bank Matching Contributions................................ 6
3.2 Bank ESOP Contribution..................................... 6
3.3 Bank Retirement Plan Contributions......................... 6
3.4 Special Contribution Credit................................ 7
3.5 Interest on Plan Benefits.................................. 7
3.6 Time for Crediting Bank Contributions...................... 8
3.7 Rules Regarding Reductions................................. 8
3.8 Forms of Payment Options................................... 8
3.9 Election of Form of Payment Option......................... 8
ARTICLE 4 - RIGHT TO BANK CONTRIBUTIONS..............................10
4.1 Vesting in Bank Contributions..............................10
ARTICLE 5 - AMENDMENT AND TERMINATION................................11
5.1 Amendment..................................................11
5.2 Termination................................................11
ARTICLE 6 - ADMINISTRATION...........................................12
ARTICLE 7 - GENERAL PROVISIONS.......................................13
7.1 No Funding Obligation......................................13
7.2 Non-Alienation of Benefits.................................13
7.3 Limitation of Rights.......................................13
7.4 Applicable Laws............................................14
7.5 Gender and Number..........................................14
Exhibit 10.18
QUAKER CITY BANK
RETIREMENT BENEFIT EQUALIZATION PLAN
ARTICLE 1 - PURPOSE
Effective January 1, 2000, Quaker City Bank ("Bank") hereby adopts the Quaker
City Bank Retirement Benefit Equalization Plan ("Plan") to equalize the
retirement benefits payable to certain employees and former employees under the
Quaker City Bank Employees' Retirement Plan, the Quaker City Bank 401(k) Plan
and the Quaker City Bank ESOP. The Plan is intended to be an unfunded plan
maintained by the Bank primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of ERISA.
ARTICLE 2 - DEFINITIONS
2.1 Bank
----
"Bank" means Quaker City Bank
2.2 Board of Directors
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"Board of Directors" means the Board of Directors of the Bank.
2.3 Change-in-Control
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"Change-in-Control" shall mean with respect to the Bank or it's parent
("Company"), an event of a nature that; (i) would be required to be
reported in response to Item 1 of the current report on Form 8-K, as in
effect on the date hereof, pursuant to Sections 13 of 1 5(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"); or (ii) results in a
Change in Control of the Bank or the Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the
Office of Thrift Supervision ("OTS") (or its predecessor agency), as in
effect on the date hereof (provided that in applying the definition of
change in control as set forth under the rules and regulations of the OTS,
the Board shall substitute its judgment for that of the OTS); or (iii)
without limitation such a Change in Control shall be deemed to have
occurred at such time as (A) any "person" (as the term is used in Sections
13 (d) and (14(d) of the Exchange Act) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Bank or the Company representing 20% or more of the
Bank's or the Company's outstanding securities except for any securities of
the Bank or the Company purchased by any employee benefit plan of the Bank
or (B) individuals who constitute the Board of the Company on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent
to the date hereof whose election was approved by a vote of at least three-
quarters of the directors comprising the Incumbent Board, or whose
nomination for election by the Company's stockholders was approved by the
same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (B), considered as though he were a member of the
Incumbent Board; or (C) a plan of reorganization, merger, consolidation,
sale of all or substantially all of the assets of the Bank or the Company
or similar transaction occurs in which the Bank or Company is not the
resulting entity.
2.4 Code
-----
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 Compensation
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"Compensation" of a Participant for any Plan Year shall mean his total salary
and wages, including bonuses, commissions, overtime payments, incentives and
other monetary remuneration, if any, which are paid to the Participant by the
Bank during the taxable year ending with or within the Plan Year and which are
reported as wages on the Participant's Form W-2 and including amounts not
includable in gross income by reason of Code Section 125 (cafeteria plans),
402(e)(3) (401(k) plans), 402(h) or 403(b). Compensation shall include elective
deferrals under non-qualified plans maintained by the Bank regardless of whether
such deferrals are included in gross income. Elective deferrals to non-
qualified plans will be included as Compensation for the Plan Year of deferral.
Compensation shall exclude reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation not
specifically included in the preceding paragraph, any compensation paid or
payable by reason of services performed after the date an employee ceased to be
a Participant, distributions of non-qualified plan benefits and welfare benefits
(including severance pay).
For purposes of Section 3.2(a)(1), Compensation shall include elective deferrals
under non-qualified plans maintained by the Bank. Elective deferrals to non-
qualified plans will be included as Compensation for the Plan Year of deferral.
2.6 Compensation Committee
----------------------
"Compensation Committee" or "Committee" means the committee designated or
appointed by the Board of Directors of the Bank to administer the Plan.
2.7 Disability
----------
"Disability" has the same meaning as under the Quaker City Bank Retirement
Plan.
2.8 Effective Date
---------------
"Effective Date" means January 1, 2000.
2.9 ERISA
-----
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.10 Participant
------------
"Participant" refers to an employee of the Bank who (a) is a member of a
select group of management or highly compensated employees (within the
meaning of Section 201(2) of ERISA) and (b) has been approved by the
Compensation Committee to participate in this Plan. The Compensation
Committee shall notify employees of their inclusion in this Plan. The Plan
Administrator shall maintain a list of Participants, which may be amended
from time to time. An eligible employee shall become a Participant on the
first day of the month on or after becoming eligible and selected to
participate in the Plan.
2.11 Plan
-----
"Plan" means the Quaker City Bank Retirement Benefit Equalization Plan, as
set forth herein and as amended from time to time.
2.12 Plan Administrator
------------------
"Plan Administrator" means the Compensation Committee.
2.13 Plan Year
---------
"Plan Year" means the calendar year.
2.14 Quaker ESOP
-----------
"Quaker ESOP" means the Quaker City Bank Employee Stock Ownership Plan.
2.15 Quaker 401(k) Plan
------------------
"Quaker 401(k) Plan" means the Quaker City Bank 401(k) Plan.
2.16 Quaker SERP
-----------
"Quaker SERP" means the Quaker City Bank Supplemental Executive Retirement
Plan.
2.17 Retirement Plan
---------------
"Retirement Plan" means Quaker City Bank Employees' Retirement Plan.
2.18 Spouse
------
"Spouse" means the person to whom the Participant is married on his
distribution date or on his date of death, if earlier.
2.19 Valuation Date.
---------------
"Valuation Date" shall mean the last of each calendar quarter which is
also a business day, as of which the fair market value of Participants'
account shall be determined.
2.20 Year of Service
---------------
"Year of Service" for vesting purposes to determine a Participant's right
to benefits under this Plan shall be determined and credited in the same
manner as under the Retirement Plan.
ARTICLE 3 - BANK CONTRIBUTIONS
3.1 Bank Matching Contributions
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For each Plan Year, the Bank shall make a contribution on behalf of each
Participant equal to (a) minus (b) where:
(a) equals the product of (1) and (2) where
(1) equals the Plan Participant's Compensation for the Plan Year not
limited by Code Section 401(a)(17), and
(2) equals the rate (expressed as a percentage of Compensation) at
which the Bank matching contributions would be made on the
Participant's behalf for the Plan Year under the Quaker 401(k)
Plan, except for the limits imposed on the Quaker 401(k) Plan
under Code Sections 401(a)(17), 401(k), 401(m), 402(g) and 415;
and
(b) equals the Bank matching contribution actually made to the Quaker
401(k) Plan on behalf of the Participant for the Plan Year.
3.2 Bank ESOP Contribution
----------------------
The Bank shall make a contribution on behalf of each Participant equal to
(a) minus (b) where:
(a) equals the product of (1) and (2) where
(1) equals the Plan Participant's Compensation, not limited by Code
Section 401(a)(17), and
(2) equals the fair market value of allocations, pursuant to Sections
4.1 and 4.2 of the Quaker ESOP, on behalf of any Quaker ESOP
participant affected neither by the limitations of Code Section
401(a)(17) nor by the limitations of Code Section 415, divided by
the Participant's cash compensation (as defined in the Quaker
ESOP); and
(b) equals the fair market value of Bank contributions actually made on
behalf of the Plan Participant pursuant to Sections 4.1 and 4.2 of the
Quaker ESOP.
3.3 Bank Retirement Plan Contributions
----------------------------------
The Bank shall make a contribution on behalf of each Participant equal to
the applicable value of the contribution credits not made under the
Retirement Plan due to limitations imposed on the Retirement Plan pursuant
to Code Sections 415 and 401(a)(17).
3.4 Special Contribution Credit
---------------------------
Effective as of January 1, 2000, in lieu of receiving any benefit under the
Quaker SERP, former Quaker SERP Participants may sign a written agreement
with the Bank to receive a Special Contribution Credit to this Plan. Such
Special Contribution Credit will be approved by the Compensation Committee
and listed in Appendix A of the Plan. In order to
receive this Special Contribution Credit, a Participant must sign a written
agreement waiving any right to a benefit under the former Quaker SERP.
3.5 Earnings on Plan Benefits
-------------------------
(a) Each Participant's account shall be adjusted as of each Valuation
Date. The adjustments made shall be those adjustments reflecting
income, gains and losses that would have been made to the
Participant's account had the dollar value of the account been
invested in the investments selected by the Participant pursuant to
the provisions of Section 3.5(b).
(b) For purposes of determining the adjustments for investment experience
set forth in Section 3.5(a) above, the dollar value of each
Participant's account shall be deemed to be invested in accordance
with the Participant's investment designation in one or more
investments established by the Committee pursuant to rules established
by the Committee. The Committee may, at its discretion, establish
alternative investments or eliminate any previously established
investments at any time and from time to time. In accordance with
rules established by the Committee, each Participant may elect the
investments in which his or her account is deemed invested.
(c) In the event that the Committee elects not to permit deemed investment
elections pursuant to section 3.5(b), a Participant's benefits under
this Plan shall be credited with interest at a rate equal to the
interest crediting rate under Section 4.4 of the Retirement Plan or
such other rate as selected by the Compensation Committee.
3.6 Valuation of Accounts
---------------------
A Participant's account under the Plan shall be valued by the Committee as
of each Valuation Date. A Participant's account shall be calculated by
starting with the balance of the account as of the prior Valuation Date
(assuming a $0 balance for the initial Valuation Date) and by (a) adding to
the Participant's account those amounts of Bank contributions, if any,
credited to the account of such Participant since the last Valuation date,
(b) making the adjustments to such Participant's account set forth in
Section 3.5(a) above since the last Valuation Date, and (c) subtracting the
aggregate amount of distributions or withdrawals made since the last
Valuation Date to or with respect to such Participant. Notwithstanding the
foregoing, Bank contributions made pursuant to Sections 3.1, 3.2 and 3.3,
shall be credited to a Participant's account as of each December 31.
3.7 Rules Regarding Reductions
--------------------------
For purposes of calculating the amounts under this Article, the following
rules shall apply:
(a) Any portion of the Participant's benefits under the Retirement Plan,
Quaker 401(k) Plan and/or the Quaker ESOP which is payable (or has
been paid) to another person pursuant to a court order shall be
treated as payable to the Participant.
(b) The Participant's benefit under this Plan shall be determined without
regard to whether or not benefits under the Retirement Plan, Quaker
401(k) Plan or Quaker ESOP (collectively the "Bank's Other Plans")
have commenced, whether or not
such benefits under the Bank's Other Plan's have been paid in full and
without regard to the actual form of payment elected by the
Participant under the Bank's Other Plans.
3.8 Forms of Payment Options
------------------------
A Participant may elect to receive payment of his benefit under this Plan
as
(a) a single lump sum payment; or
(b) installment payments no more frequently than monthly over a period of
from 1 to 10 years.
Benefits distributed pursuant to (a) or (b) above shall either be paid or
commence to be paid as soon as administratively practicable following a
Participant's termination from service or as soon as administratively
practicable in the next calendar year following a Participant's termination from
service.
3.9 Election of Form of Payment Option
----------------------------------
A Participant may elect the form of payment as described in Section 3.8 by
executing a valid payment election form. A Participant may change his
election at any time, but such a change in election must be made at least
12 months prior to termination of employment to constitute a valid
election. A Participant's election shall be valid even if not made at least
12 months prior to termination of employment if it is made within 30 days
of first entering the Plan.
In the event that a Participant's election or change of election is not
valid, the next preceding valid election form (made at least 12 months
prior to termination of employment or within 30 days of first entering the
Plan) shall determine the Participant's payment form.
In the event a Participant does not have a valid election form or if no
election has been made, then payment of a Participant's benefits under this
Plan shall be made in the form of a single lump sum payment as soon as
administratively practicable following the Participant's termination from
service.
ARTICLE 4 - RIGHT TO BANK CONTRIBUTIONS
4.1 Vesting in Bank Contributions
-----------------------------
A Participant shall have a nonforfeitable right to all Bank Contributions
made to his or her account under this Plan upon being credited with five
Years of Service.
Additionally, upon a Change-in-Control as defined in Section 2.3, a
Participant shall be fully vested regardless of the number of Years of
Service credited.
ARTICLE 5 - AMENDMENT AND TERMINATION
5.1 Amendment
---------
The Bank reserves the right in its discretion to amend this Plan at any
time in whole or in part, by a formally approved resolution at a regularly
scheduled meeting provided, however, that no amendment shall result in the
forfeiture of any Participant's benefits accrued (vested or not vested)
prior to the date the Bank adopts the amendment. In the alternative, the
Bank may, by a formally approved resolution, delegate to one or more
officers of the Bank the authority to amend the Plan, in which case the
signature of the authorized officer(s) on the Plan amendment shall be
sufficient to effectuate the amendment. The Bank or its designee shall
notify Participants of any amendments which affect the amount or timing of
benefits within 90 days of the effective date of such amendments.
5.2 Termination
-----------
The Bank may terminate this Plan at any time by a formally approved
resolution at a regularly scheduled meeting. In the alternative, the Bank
may, by a formally approved resolution, delegate to one or more officers of
the Bank the authority to terminate the Plan in which the signature of the
authorized officer(s) on the document terminating the Plan shall be
sufficient to effectuate the termination. Termination shall not result in
the forfeiture of any Participant's benefits earned prior to the date the
Bank adopts a resolution terminating the Plan. The Bank or its designee
shall notify Participants of the termination of the Plan within 90 days of
the effective date of such termination. In the event that this Plan is
terminated, each Participant shall become fully vested in his benefit.
5.3 Amendment of Plan Following a Change in Control.
Notwithstanding the provisions of Section 5.1 of the Plan for a period of
60 months following the date of a Change of Control, no amendment to the
Plan shall be effective unless such amendment is consented to in writing by
a majority of Plan Participants.
ARTICLE 6 - ADMINISTRATION
6.1 This Plan shall be adopted by the Board of Directors of the Bank and shall
be administered by the Compensation Committee.
6.2 The Compensation Committee shall have the sole authority, in its
discretion, to adopt, amend and rescind such rules and regulations as it
deems advisable in the administration of the Plan, to construe and
interpret the Plan, and the rules and regulations, and to make all other
determinations and interpretations of the Plan. All decisions,
determinations, and interpretations of the Compensation Committee shall be
final and binding on all persons, except as otherwise provided by law.
Compensation Committee members who are Participants shall abstain from
voting on any Plan matters that would cause them to be in constructive
receipt of benefits under the Plan. The Compensation Committee may delegate
its responsibilities as it deems necessary.
6.3 If a Participant believes benefits have been incorrectly calculated or
denied, such person may file a claim with the Compensation Committee. The
Compensation Committee shall follow the claims procedures set forth in the
Retirement Plan.
6.4 All Plan administrative expenses shall be paid by the Bank.
6.5 The Bank shall indemnify the Compensation Committee and each Compensation
Committee member against any and all claims, losses, damages, expenses
(including reasonable counsel fees), and liability arising from any action,
failure to act, or other conduct in the member's official capacity, except
when due to the individual's own gross negligence or willful misconduct.
6.6 In the event that the Committee determines that a Participant's employment
performance is no longer at a level which merits continued active
participation in the Plan, the Committee may terminate such Participant's
active participation in the Plan (without necessarily terminating such
Participant's employment) as of the date specified by the Committee. After
the effective date of a Participant's termination of active participation
in the Plan, such Participant shall not accrue any additional benefits
under Sections 3.1, 3.2, 3.3 or 3.4 hereof; nevertheless, such a
Participant shall be entitled to interest on plan benefits as provided in
Section 3.5 hereof.
ARTICLE 7 - GENERAL PROVISIONS
7.1 No Funding Obligation
---------------------
The amounts accrued by a Participant hereunder are not held in a trust or
escrow account and are not secured by any specific assets of the Bank or in
which the Bank has an interest. This Plan shall not be construed to require
the Bank to fund any of the benefits provided hereunder nor to establish a
trust for such purpose. The Bank may make such arrangements as it desires
to provide for the payment of benefits including the use of a trust meeting
the requirements of IRS Revenue Procedure 92-64. Neither the Participant,
the Spouse nor any other person shall have any rights against the Bank with
respect to any portion of the Participant's benefits except as a general
unsecured creditor of the Bank. No Participant has an interest in his
benefits until the Participant actually receives payment.
Upon a Change-in-Control, as defined in Section 2.3, all Participants shall
immediately become 100% vested as provided in Section 4.1. Notwithstanding
anything to the contrary in this Section 7.1, within 30 days following a
Change-in-Control as defined in Section 2.3, the Bank will be required to
contribute an amount equal to the total vested account balances of all
Participants as of the date of the Change in Control to an independent
trustee pursuant to the terms of an irrevocable rabbi trust which the Bank
shall establish for the benefit of such Participants. Such rabbi trust
shall be in substantially the same form as that attached hereto as Exhibit
"A".
7.2 Non-Alienation of Benefits
--------------------------
No benefit under this Plan may be sold, assigned, transferred, conveyed,
hypothecated, encumbered, anticipated, or otherwise disposed of, and any
attempt to do so shall be void. No such benefit shall, prior to receipt
thereof by a Participant or Spouse, be in any manner subject to the debts,
contracts, liabilities, engagements, or torts of such Participant.
7.3 Limitation of Rights
--------------------
Nothing in this Plan shall be construed to limit in any way the right of
the Bank to terminate a Participant's employment at any time, for any
reason whatsoever, with or without cause; nor shall be evidence of any
agreement or understanding, express or implied, that the Bank (a) will
employ a Participant in any particular position, (b) will ensure
participation in any incentive programs, or (c) will grant any awards from
such programs.
7.4 Applicable Laws
---------------
This Plan shall be construed and its provisions enforced and administered
in accordance with the laws of the State of California except as otherwise
provided in ERISA.
7.5 Gender and Number
-----------------
Except when otherwise indicated by the context, any masculine terminology
shall also include the feminine and the definition of any term in the
singular shall also include the plural.
7.6 Assumption of Plan. The Bank expressly agrees that it shall not merge or
------------------
consolidate into or with another corporation, or sell substantially all of
its assets to another corporation, firm or person until such corporation,
firm or person expressly agrees in writing to assume and discharge the
duties and obligations of the Bank under this Plan. The powers, duties,
rights and obligations of the Bank under this Plan may be assigned (i) to
any company into which the Bank may be merged, or with which it may be
consolidated, or (ii) to any company resulting from any merger,
reorganization or consolidation to which the Bank is a party, or (iii) to
any company to which the business of the Bank may be transferred, to the
extent affected Participants transfer their employment to such Bank. If
such an assignment occurs, the successor-in-interest to the Bank shall
assume the powers, duties, rights and obligations of the Bank in writing.
7.7 Binding Effect. The provisions of this Plan shall be binding upon the
--------------
Bank, the Participants, all affiliated companies employing any
Participants, and any successor-in-interest, beneficiary, heir or personal
representative to the Bank, any Participant or any affiliated bank
("Affiliated Bank").
7.8 Notices. All notices, requests, or other communications (hereinafter
-------
collectively referred to as "Notices") required or permitted to be given
hereunder or which are given with respect to this Plan shall be in writing
and may be personally delivered, or may be sent by United States registered
mail, postage prepaid, return receipt requested and addressed as follows:
To the Bank,
and any Affiliated Bank
or the Committee at: Quaker City Bank
7021 Greenleaf Avenue
Whittier, CA 90602-1300
To Participant at: The Participant's residential
mailing address as reflected
in the Bank's or Affiliated
Bank's employment
records
A Notice which is delivered personally shall be deemed given as of the date
of personal delivery, and a Notice mailed as provided herein shall be
deemed given on the date received. Any Participant may change his or her
address for purposes of Notices hereunder pursuant to a Notice to the
Committee, given as provided herein, advising the Committee of such change.
The Bank, any Affiliated Bank and/or the Committee may at any time change
its address for purposes of Notices hereunder pursuant to a Notice to all
affected Participants, given as provided herein, advising such Participants
of such change.
7.9 Severability. In the event that any provision of this Plan is found to be
------------
invalid or otherwise unenforceable by a court or other tribunal of
competent jurisdiction, such invalidity or unenforcability shall not be
construed as rendering any other provision contained herein invalid or
unenforceable, and all such other provisions shall be given full force and
effect to the same extent as though the invalid and unenforceable
provision was not contained herein.
7.10 Tax Effect of Plan. Neither the Bank nor any Affiliated Bank warrants any
------------------
tax benefit or any financial benefit under this Plan. Without limiting the
foregoing, the Bank and each Affiliated Bank and their directors,
officers, employees and agents shall be held harmless by the Participant
from, and shall not be subject to any liability on account of, any Federal
or State tax consequences or any consequences under ERISA of any
determination as to the amount of plan benefits to be paid, the method by
which plan benefits are paid, the persons to whom plan benefits are paid,
or the commencement or termination of the payment of plan benefits.
This Plan is hereby adopted by the Bank on this 21st day of September, 2000.
QUAKER CITY BANK
By /s/ Frederic R. McGill
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Its President
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