THE 2005
NORTH BAY BANCORP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective October 1, 2005
TABLE OF CONTENTS
Page
ARTICLE I PURPOSE; EFFECTIVE DATE 1
ARTICLE II DEFINITIONS 1
2.1 Actuarial Equivalent 1
2.2 Applicable Percentage 1
2.3 Basic Benefit 1
2.4 Board 1
2.5 Change in Control 1
2.6 Committee 2
2.7 Company 2
2.8 Disability/Disabled 2
2.9 Retirement 2
2.10 Normal Retirement Date 2
2.11 Early Retirement Date 2
2.12 Early Retirement Benefit 3
2.13 Participant 3
2.14 Participation Agreement 3
2.15 Supplemental Retirement Benefit 3
ARTICLE III ELIGIBILITY AND PARTICIPATION 3
3.1 Eligibility and 3
ARTICLE IV SUPPLEMENTAL RETIREMENT BENEFITS 4
4.1 Retirement on or After Normal Retirement Date 4
4.2 Retirement on or After Early Retirement Date
but Before Normal Retirement Date 4
4.3 Termination Without Cause 4
4.4 Voluntary Termination 4
4.5 Termination Pursuant to a Change in Control 4
4.6 Termination Following the Determination of Disability 5
4.7 Termination for Cause 5
4.8 Death of Participant During Active Employment 5
ARTICLE V FORM AND PAYMENT OF BENEFITS 5
5.1 Internal Revenue Code Section 409A Compliance 5
5.2 Reduction for Early Commencement of Benefits 6
5.3 Form of Benefit Payment 6
5.4 Modifying Form of Benefit Payment 6
5.5 Withholding of Payroll Taxes 7
5.6 Payment to Guardian 7
ii
TABLE OF CONTENTS
(Continued)
Page
ARTICLE VI ADMINISTRATION 7
6.1 Committee and Duties 7
6.2 Agents 7
6.3 Binding Effect of Decisions 7
6.4 Indemnity of Committee 7
ARTICLE VII BENEFICIARY DESIGNATION 7
7.1 Designation 7
7.2 Amendments to Beneficiary Designation 8
7.3 No Participant Designation 8
7.4 Effect of Payment 8
ARTICLE VIII CLAIMS PROCEDURE 8
8.1 Claim 8
8.2 Arbitration of Disputes 8
ARTICLE IX MISCELLANEOUS 9
9.1 Unfunded Plan 9
9.2 Unsecured General Creditor 9
9.3 Trust Fund 9
9.4 Nonassignability 10
9.5 Not a Contract of Employment 10
9.6 Protective Provisions 10
9.7 Terms 10
9.8 Captions 10
9.9 Governing Law 10
9.10 Validity 10
9.11 Notice 10
9.12 Successors 11
9.13 IRS Section 280G Issues 11
EXHIBIT 1: Participation Agreement
EXHIBIT 2: Distribution Election Form
EXHIBIT 3: Beneficiary Agreement
iii
THE 2005
NORTH BAY BANCORP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
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PURPOSE AND EFFECTIVE DATE
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The purpose of this Supplemental Executive Retirement Plan (the "Plan") is
to memorialize the Company's supplemental executive retirement plan pursuant to
which the Company entered into Executive Supplemental Compensation Agreements
with key employees and to provide supplemental retirement benefits for certain
key employees of North Bay Bancorp and subsidiaries or affiliates thereof who
are employed by the Company on, or after October 1, 2005. It is intended that
the Plan will aid in retaining and attracting individuals of exceptional ability
by providing them with these benefits. It is intended that the Plan and related
Participation Agreements (including those Participation Agreements entered into
in place of the Executive Supplemental Compensation Agreements previously
entered into by the Company pursuant to its supplemental executive retirement
plan meet the requirements of Internal Revenue Code Section 409A. This Plan
shall be effective as of October 1, 2005.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following terms shall have the meanings
indicated, unless the context clearly indicates otherwise:
2.1 Actuarial Equivalent. "Actuarial Equivalent" means equivalence in value
between two or more forms and/or times of payment based on a determination by an
actuary chosen by the Committee, using sound actuarial assumptions at the time
of such determination.
2.2 Applicable Percentage. The term "Applicable Percentage" shall mean that
percentage of the Supplemental Retirement Benefits that the Participant is
entitled to receive based on the circumstances surrounding the termination of
Employment. The Applicable Percentage of Supplemental Retirement Benefits shall
accrue on the schedule incorporated in the Participation Agreement.
2.3 Basic Benefit. The term "Basic Benefit" shall have the meaning set
forth in Section 5.3(A).
2.4 Board. "Board" means the Board of Directors of North Bay Bancorp.
2.5 Change in Control. Change in Control shall be defined as follows:
1
(A) The acquisition of more than fifty percent (50%) of the value or
voting power of the Company's stock by a person or group;
(B) The acquisition in a period of twelve (12) months or less of at
least thirty-five percent (35%) of the Company's stock by a
person or group;
(C) The replacement of a majority of the Company's Board of Directors
in a period of twelve (12) months or less by directors who were
not endorsed by a majority of the current board members; or
(D) The acquisition in a period of twelve (12) months or less of
forty percent (40%) or more of the Company's assets by an
unrelated entity.
For the purpose of this Agreement, transfers made on account of deaths or
gifts, transfers between family members or transfers to a qualified retirement
plan maintained by the Company shall not be considered in determining whether
there has been a Change in Control.
2.6 Committee. "Committee" means the Compensation Committee of the Board.
2.7 Company. "Company" means North Bay Bancorp, any subsidiaries or
affiliates thereof, or any successors thereto.
2.8 Disability/Disabled. For the purpose of this Plan, a Participant will
be considered disabled if:
(A) He is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
(12) months, or
(B) He is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health
plan covering employees of Participant's employer.
2.9 Retirement. The term "Retirement" or "Retires" shall refer to the date
which the Participant acknowledges in writing to Company to be the last day the
Participant will provide any significant personal services, whether as an
employee or independent consultant or contractor, to Company (for any reason
other than Termination for Cause, because of a Disability, or Following a Change
of Control, as defined herein). For purposes of this Plan, the phrase
"significant personal services" shall mean more than ten (10) hours of personal
services rendered to one or more individuals or entities in any thirty (30) day
period.
2
2.10 Normal Retirement Date. "Normal Retirement Date" shall mean the date
specified in the Participation Agreement on which the Participant terminates
employment with the Company (for any reason other than Termination for Cause,
because of a Disability, or Following a Change of Control), if such termination
date occurs on or after such Participant's Normal Retirement Date.
2.11 Early Retirement Date. "Early Retirement Date" means the date
specified in the Participation Agreement on which a Participant terminates
employment with the Company (for any reason other than Termination for Cause,
because of a Disability, or Following a Change of Control), if such termination
date occurs on or after such Participant's Early Retirement Date.
2.12 Early Retirement Benefit. "Early Retirement Benefit", except as may
otherwise be provided in the Participation Agreement, means the Actuarial
Equivalent of the Supplemental Retirement Benefit based on the actual Early
Retirement Date.
2.13 Participant. "Participant" means any individual who is participating
in or has participated in this Plan, and who has not yet received his full
benefit hereunder, as provided in Article III.
2.14 Participation Agreement. "Participation Agreement" means the agreement
filed by a Participant and approved by the Board pursuant to Article III.
2.15 Supplemental Retirement Benefit. "Supplemental Retirement Benefit"
means the benefit specified in the Participation Agreement.
ARTICLE III
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ELIGIBILITY AND PARTICIPATION
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3.1 Eligibility and Participation.
(A) Eligibility. Eligibility to participate in the Plan is limited to
those key employees of the Company that are designated, from time
to time, by the Board.
(B) Participation. An employee's participation in the Plan shall be
effective upon notification of such person by the Committee of
eligibility to participate, completion of a Participation
Agreement by such person, and acceptance of the Participation
Agreement by the Committee. Participation in the Plan shall
continue until such time as the Participant terminates employment
with the Company and as long thereafter as the Participant is
eligible to receive benefits under this Plan.
3
ARTICLE IV
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SUPPLEMENTAL RETIREMENT BENEFITS
--------------------------------
4.1 Retirement on or After Normal Retirement Date. The Applicable
Percentage of the Supplemental Retirement Benefit (as identified in the
Participant Agreement) for a Participant whose employment with the Company
terminates on or after the Normal Retirement Date shall be one hundred percent
(100%). Unless selected otherwise in accordance with the terms of paragraph 5.3,
this Supplemental Retirement Benefit shall be paid monthly, with payments to
commence on the first day of the month following the Participant's Normal
Retirement Date and continuing until the death of the Participant.
4.2 Retirement on or After Early Retirement Date but Before Normal
Retirement Date. The Participant may elect to retire on or after a date that
constitutes an Early Retirement Date and receive the Actuarial Equivalent of the
Applicable Percentage of the Supplemental Retirement Benefit based on the actual
Early Retirement Date. Unless selected otherwise in accordance with the terms of
paragraph 5.3, this Supplemental Retirement Benefit shall be paid monthly, with
payments to commence on the first day of the month following the Participant's
Early Retirement Date and continuing until the death of the Participant.
4.3 Termination Without Cause. If the Participant's employment is
terminated by the Company without Cause, the Participant shall be eligible to
receive the Actuarial Equivalent of the Applicable Percentage of the
Supplemental Retirement Benefits as of the effective date of Termination with
payments to commence thirty (30) days after the later of the Normal Retirement
Date or the date of termination, and continuing until the death of the
Participant. Participant shall have the ability to select an alternate payment
form in accordance with the terms of paragraph 5.3.
4.4 Voluntary Termination. If the Participant's employment is terminated by
voluntary resignation prior to the Early Retirement Date, and such resignation
is not subject to the provisions of paragraph 4.5 below, the Participant shall
be entitled to be paid the Actuarial Equivalent of the Applicable Percentage of
the Supplemental Retirement Benefit as of the effective date of Termination with
payments to commence thirty (30) days after the Normal Retirement Date, and
shall continue until the death of the Participant. Participant's Supplemental
Retirement Benefit shall be subject to forfeiture prior to the commencement of
payments if so provided in the Participation Agreement.
4.5 Termination Pursuant to a Change in Control. In the event a Participant
is terminated "Pursuant to a Change in Control", the Applicable Percentage shall
be one hundred percent (100%). A termination shall be deemed to be "Pursuant to
a Change in Control" if, within two (2) years following the occurrence of a
Change in Control, the Participant's employment with the Company is terminated
by (i) the Company without Cause or (ii) the Participant on account of (y)
Participant's position, responsibilities or working conditions being
substantially diminished or (z) a material reduction in the Participant's
compensation or benefits. At the Participant's option, this Benefit shall be
paid monthly, with payments to commence on the first day of the month following
the Participant's Early Retirement Date (reduced to actuarial equivalent in
accordance with the terms of paragraph 5.2) or the Normal Retirement Date, and
continuing until the death of the Participant. In the event Participant fails to
select a payment start date, payments shall begin one month following the
Participant's Normal Retirement Date.
4
4.6 Termination Following the Determination of Disability. The Applicable
Percentage for a Participant whose employment with the Company terminates
because of Disability shall be the Applicable Percentage as of the date of
termination. Unless selected otherwise in accordance with the terms of paragraph
5.3, payments shall commence thirty (30) days after the later of the Normal
Retirement Date or the date of termination and shall continue until the death of
the Participant.
4.7 Termination For Cause. If a Participant is terminated for Cause, as
defined below, Participant shall forfeit any and all benefits payable under this
Plan. For the purpose of this Plan, Cause shall be defined as any of the
following:
(A) The Participant commits fraud, theft or embezzlement against the
Company;
(B) The Participant commits a felony or a crime involving moral
turpitude;
(C) The Participant compromises trade secrets or other proprietary
information of the Company;
(D) The Participant breaches any non-solicitation agreement with the
Company;
(E) The Participant breaches of the material terms of any employment
agreement entered into with the Company, and if give the right in
any such employment agreement, fails to cure said breach in
accordance therewith;
(F) The Participant breaches any of the material terms of his
Participation Agreement;
(G) The Participant engages in any grossly negligent act or willful
misconduct that causes, or could be reasonably expected to cause,
harm to the business, operations or reputation of the Company;
(H) The Company is ordered to terminate any employment agreement with
the Participant by any governmental agency with supervisory
authority over the Company.
4.8 Death of Participant During Active Employment. In the event Participant
dies while actively employed by Company, then no death benefits shall be payable
under this Agreement (other than a survivor benefit qualified for under
paragraphs 4.1 through 4.7 above and selected pursuant to paragraph 5.3). Such
benefits are described by a Joint Beneficiary Designation Agreement, if any.
ARTICLE V
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FORM AND PAYMENT OF BENEFITS
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5.1 Internal Revenue Code Section 409A Compliance. It is the intent of the
parties to comply with all applicable Internal Revenue Code Sections, including,
but not limited to, IRC 409A. Thus, for any benefits payable pursuant to this
Plan, if the Participant is a Key Employee, as defined by the Internal Revenue
Service, and said Company is publicly traded at the time of "separation from
service" (as defined by IRC 409A), any such benefit payment described herein
shall be withheld for six (6) months following such separation from service, in
order to comply with IRC 409A.
5
5.2 Reduction for Early Commencement of Benefits. If a Participant receives
a Supplemental Retirement Benefit under this Plan before the Participant's
Normal Retirement Date, the monthly Supplemental Retirement Benefit shall,
except as may otherwise be provided in the Participation Agreement, be reduced
to its Actuarial Equivalent value.
5.3 Form of Benefit Payment. The Supplemental Retirement Benefit shall be
paid in the basic form provided in (A) below, unless the Participant selects an
alternate form of payment. The basic and alternative forms of payment are as
follows:
(A) Basic Form of Benefit Payments. Unless an alternate selection is
made, payments made pursuant to this Plan shall be made as
follows: Monthly single life annuity for the Participant's life
in the amount specified in the Participation Agreement ("Basic
Benefit").
(B) Alternative Forms of Benefit Payment.
(i) A joint and survivor annuity of the Actuarial Equivalent
Value equal to the Basic Benefit with payment continued to
the survivor in the same amount as the amount paid to the
Participant.
(ii) A joint and survivor annuity of the Actuarial Equivalent
Value equal to the Basic Benefit with payment continued to
the survivor in one-half of the amount paid to the
Participant.
(iii) Any other Actuarial Equivalent method as approved by the
Board and selected in accordance with the provisions of the
appropriate IRS requirements, including but not limited to
IRC 409A.
5.4 Modifying Form of Benefit Payment. A Participant may modify the form of
Benefit Payment, however any such modification (i) may not take effect until at
least twelve (12) months after the date on which the election is made, and (ii)
the first payment to which such election is made must be deferred for a period
of at least five (5) years from the date the payment would otherwise have been
made.
5.5 Withholding of Payroll Taxes. The Company shall withhold from payments
made hereunder any taxes required to be withheld from a Participant's age under
federal, state or local law. However, a Participant's designated Beneficiary may
elect not to have withholding for federal income tax purposes pursuant to
Section 3405(a) (2) of the Internal Revenue Code, or any successor provision
thereto.
6
5.6 Payment to Guardian. If a Plan benefit is payable to a minor or a
person declared incompetent or to a person incapable of handling the disposition
of his property, the Committee may direct payment of such Plan benefit to the
guardian, legal representative or such person having the care and custody of
such minor, incompetent or person. The Committee may require proof of
incompetency, minority, incapacity or guardianship as it may deem appropriate
prior to distribution of the Plan benefit. Such distribution shall completely
discharge the Committee and the Company from all liability with respect to such
benefit.
ARTICLE VI
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ADMINISTRATION
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6.1 Committee and Duties. This Plan shall be administered by the Committee.
The Committee shall have the authority to make, amend, interpret, and enforce
all appropriate rules and regulations for the administration of this Plan and
decide or resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan.
6.2 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative duties as
it sees fit, and may from time to time consult with counsel who may be counsel
to the Company.
6.3 Binding Effect of Decisions. The decision or action of the Committee in
respect of any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.
6.4 Indemnity of Committee. The Company shall indemnify and hold harmless
the members of the Committee against any and all claims, loss, damage, expense,
or liability arising from any action or failure to act with respect to this
Plan, except in the case of gross negligence or willful misconduct.
ARTICLE VII
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BENEFICIARY DESIGNATION
-----------------------
7.1 Beneficiary Designation. Each Participant shall have the right, at any
time, to designate any person or persons as his Beneficiary or Beneficiaries
(both primary as well as secondary) to whom benefits under this Plan shall be
paid in the event of his death prior to complete distribution to the Participant
of the benefits due under the Plan. Each Beneficiary designation shall be in a
written form prescribed by the Committee, and will be effective only when filed
with the Committee during the Participant's lifetime.
7.2 Amendments to Beneficiary Designation. Any Beneficiary designation may
be changed by a Participant without the consent of any designated Beneficiary by
the filing of a new Beneficiary designation with the Committee. The filing of a
new Beneficiary designation form will cancel all Beneficiary designations
previously filed. If a Participant's Compensation is community property, any
Beneficiary designation shall be valid or effective only as permitted under
applicable law.
7
7.3 No Participant Designation. In the absence of an effective Beneficiary
designation, or if all designated Beneficiaries predecease the Participant or
die prior to complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be the Participant's
estate.
7.4 Effect of Payment. The payment to the deemed Beneficiary shall
completely discharge the Company's obligations under this Plan.
ARTICLE VIII
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CLAIMS PROCEDURE
----------------
8.1 Claim. The Company shall, but only to the extent necessary to comply
with ERISA, be designated as the named fiduciary under this Plan and shall have
authority to control and manage the operation and administration of this Plan.
Consistent therewith, the Company shall make all determinations as to the rights
to benefits under this Plan. Any decision by the Company denying a claim by the
Participant, the Participant's spouse, or the Participant's beneficiary for
benefits under this Plan shall be stated in writing and delivered or mailed, via
registered or certified mail, to the Participant, the Participant's spouse or
the Participant's beneficiary, as the case may be. Such decision shall set forth
the specific reasons for the denial of a claim. In addition, the Company shall
provide the Participant, the Participant's spouse or the Participant's
beneficiary with a reasonable opportunity for a full and fair review of the
decision denying such claim.
8.2 Arbitration of Disputes. All unresolved claims, disputes and other
matters in question arising out of or relating to this Plan or the breach or
interpretation thereof, other than those matters which are to be determined by
the Company in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
located in San Francisco, California. In the event JAMS is unable or unwilling
to conduct the arbitration provided for under the terms of this Paragraph, or
has discontinued its business, the parties agree that a representative member,
selected by the mutual agreement of the parties, of the American Arbitration
Association ("AAA"), located in San Francisco, California, shall conduct the
binding arbitration referred to in this Paragraph. Notice of the demand for
arbitration shall be filed in writing with the other party to this Plan and with
JAMS (or AAA, if necessary). In no event shall the demand for arbitration be
made after the date when institution of legal or equitable proceedings based on
such claim, dispute or other matter in question would be barred by the
applicable statute of limitations. The arbitration shall be subject to such
rules of procedure used or established by JAMS, or if there are none, the rules
of procedure used or established by AAA. Any award rendered by JAMS or AAA shall
be final and binding upon the parties, and as applicable, their respective
heirs, beneficiaries, legal representatives, agents, successors and assigns, and
may be entered in any court having jurisdiction thereof. The obligation of the
parties to arbitrate pursuant to this clause shall be specifically enforceable
in accordance with, and shall be conducted consistently with, the provisions of
Title 9 of Part 3 of the California Code of Civil Procedure. Any arbitration
hereunder shall be conducted in Napa, California, unless otherwise agreed to by
the parties.
8
ARTICLE IX
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MISCELLANEOUS
-------------
9.1 Unfunded Plan. This Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
"management or highly compensated employees" within the meaning of Sections 201,
301, and 401 of the Employee Retirement Income Security act of 1974, as amended
("ERISA"), and therefore to be exempt from the provisions of Parts 2, 3, and 4
of Title I ERISA. Accordingly, the Plan shall terminate and no further benefits
shall be paid hereunder in the event it is determined by a court of competent
jurisdiction or by an opinion of counsel that the Plan constitutes an employee
pension benefit plan within the meaning of Section 3(2) of ERISA which is not so
exempt.
9.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors, and assigns shall have no legal or equitable rights, interest
or claims in any property or assets of the Company, nor shall they be
Beneficiaries of, or have any rights, claims or interests in any life insurance
policies, annuity contracts, or the proceeds therefrom owned or which may be
acquired by the Company. Except as may be provided in Section 8.3, such
policies, annuity contracts or other assets of the Company shall not be held
under any trust for the benefit of Participants, their Beneficiaries, heirs,
successors or assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan. Any and all of the
Company's assets and policies shall be, and remain, the general, unpledged,
unrestricted assets of the Company. The Company's obligation under the Plan
shall be that of an unfunded and unsecured promise to pay money in the future.
9.3 Trust Fund. The Company shall be responsible for the payment of all
benefits provided under the Plan. At its discretion, the Company may establish
one or more trusts, with such trustee as the Board may approve, for the purpose
of providing for the payment of such benefits. Such trust or trusts may be
irrevocable, but the assets thereof shall be subject to the claims of the
Company's creditors. To the extent any benefits provided under the Plan are
actually paid from any such trust, the Company shall have no further obligation
with respect thereto, but to the extent not so paid, such benefits shall remain
the obligation of, and shall be paid by, the Company.
9.4 Nonassignabiliy. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of actual receipt
the amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No part of the amount payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.
9
9.5 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between the Company
and the Participant, and the Participant (or his Beneficiary) shall have no
rights against the Company except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give a Participant the
right to be retained in the service of the Company or to interfere with the
right of the Company to discipline or discharge him at any time.
9.6 Protective Provisions. A Participant will cooperate with the Company by
furnishing any and all information requested by the Company, in order to
facilitate the payment of benefit hereunder, and by taking such physical
examinations as the Company may deem necessary and taking such other action as
may be requested by the Company.
9.7 Terms. Whenever any words are used herein in the masculine, they shall
be construed as though they were used in the feminine in all cases where they
would so apply; and wherever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or
singular, as the case may be, in all cases where they would so apply.
9.8 Captions. The captions of the articles, sections, and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
9.9 Governing Law. The provisions of this Plan shall be construed,
interpreted, and governed in all respects in accordance with applicable federal
law and, to the extent not preempted by such federal law, in accordance with the
laws of the State of California.
9.10 Validity. If any provision of this Plan shall be held illegal or
invalid for any reason, the remaining provisions shall nevertheless continue in
full force and effect without being impaired or invalidated in any way.
9.11 Notice. Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient in writing and hand delivered, or
sent by registered or certified mail, to any member of the Committee, or to the
Company's statutory agent. Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark
on the receipt for registration or certification.
9.12 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Company and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Company, and successors of
any such corporation or other business entity.
10
9.13 IRC Section 280G Issues. Unless otherwise provided in a Participant's
Participation Agreement or other agreement between the Participant and the
Company, if all or any portion of the amounts payable to the Participant under
this Plan, either alone or together with other payments which the Participant
has the right to receive from the Company, constitute "excess parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), that are subject to the excise tax imposed by
Section 4999 of the Code (or similar tax and/or assessment), Participant shall
be responsible for the payment of such excise tax and Company shall be
responsible for any loss of deductibility related thereto; provided, however,
that Company and Participant shall cooperate with each other and use all
reasonable efforts to minimize to the fullest extent possible the amount of
excise tax imposed by Section 4999 of the Code. If, at a later date, it is
determined (pursuant to final regulations or published rulings of the Internal
Revenue Service, final judgment of a court of competent jurisdiction, or
otherwise) that the amount of excise taxes payable by the Participant is greater
than the amount initially so determined, then the Participant shall pay an
amount equal to the sum of such additional excise taxes and any interest, fines
and penalties resulting from such underpayment. The determination of the amount
of any such excise taxes shall be made by the independent accounting firm
employed by the Company immediately prior to the change in control or such other
independent accounting firm or advisor as may be mutually agreeable to Company
and Participant in the exercise of their reasonable good faith judgment.
NORTH BAY BANCORP
By:________________________________ By: ______________________________
Signature and Date Secretary and Date
Title:______________________________
11
EXHIBIT 1
Participation Agreement
The 2005 North Bay Bancorp Supplemental Executive Retirement Plan
Participant: (INSERT NAME)
-----------------------------------------------
Eligibility Date: (INSERT DATE OF ELIGIBILITY)
------------------------------------------
The above named Participant is authorized to receive benefits pursuant to The
2005 North Bay Bancorp Supplemental Executive Retirement Plan as described
below. Benefit accrual shall commence as of the Eligibility Date listed above.
Applicable Percentage Schedule: [insert]
Benefit Amount: Unless an alternate method of payment is selected using the
attached Distribution Election Form, the Company shall pay to the Participant
pursuant to the Plan during the Participant's lifetime, an amount equal to
___________________________ ($________) per year in twelve (12) equal monthly
installments. The amount of Participant Benefits payable under the Plan shall be
increased annually at the rate of two percent (2%) per year from the date of
commencement of payments of the Benefits until the death of the Participant.
Normal Retirement Date: Attainment of age _____ (___).
Early Retirement Date: Attainment of age ______ (___).
Risk of Forfeiture:
Participant acknowledges that in the course of employment Participant has become
privy to confidential information of the Company including customer deposit,
loan, sales and marketing information, customer account records, proprietary
processing techniques, information regarding vendors and products, training and
operations memoranda and similar information, personnel records, pricing
information, financial information, and trade secrets concerning or relating to
the business, accounts, customers and employees and affairs of the Company (the
foregoing constituting "Confidential Information"). On account of the foregoing
and Participant's position of trust and confidence with the Company, Participant
agrees that in the event Participant voluntarily terminates employment and such
termination occurs after Participant has achieved an Applicable Percentage of
one hundred percent (100%) and such termination is not subject to the provisions
of Section 4.5 of the Plan, Participant shall forfeit any and all rights and
benefits, including Participant Benefits payable under the Plan, Participant may
have under the terms of this Participation Agreement and shall have no right to
be paid any of the amounts which would otherwise be due or paid to Participant
by the Company pursuant to the terms of this Participation Agreement if
Participant violates any of the following provisions prior to attaining Normal
Retirement Age.
12
(a) Participant shall not utilize Confidential Information, either
directly or indirectly, to call on, solicit, or take away as a
client, customer or prospective client or customer, or attempt to
call on, solicit or take away as a client, customer or
prospective client or customer, any person or entity that was a
client, customer or prospective client or customer of the
Company. For purposes of this Agreement "prospective client or
customer" shall include any person or entity with whom the
Company has had contact for the purpose of soliciting business
within six months prior to Participant's voluntary termination of
employment or whom the Company intended to contact for the
purpose of soliciting business within six months after
termination of employment, of which contact or intended contact
Participant had knowledge while employed by the Company.
Participant acknowledges that it would be extremely difficult or
impractical to determine whether Participant used Confidential
Information in connection with the activity prohibited by this
provision and that it is reasonable to presume, based upon
Participant's period of service to the Company, that Participant
used Confidential Information in connection with any violation of
this provision.
(b) Participant shall not, either directly or indirectly, on
Participant's own behalf or in the service or on behalf of
others, solicit, divert , attempt to solicit, divert or induce or
attempt to induce to discontinue employment with the Company any
person employed by the Company, whether or not such employee is a
full time employee or a temporary employee of the Company and
whether or not such employment is for a determined period or is
at will.
(c) Participant shall not, either directly or indirectly, use,
disclose or make available Confidential Information to any person
or entity, nor shall Participant use, disclose, make available or
cause to be used, disclosed or made available, or permit or
allow, either on Participant's own behalf or on behalf of others,
any use or disclosure of such Confidential Information.
Participant acknowledges and agrees that (i) a breach by Participant
of any of the foregoing covenants will result in the Company incurring
certain costs and damages in an amount that would be extremely
difficult or impractical to ascertain, (ii) the forfeiture of
Participant's rights and benefits under this Agreement bear a
reasonable relationship to the damages which the Company may suffer by
reason of Participant's breach, and (iii) the forfeiture of
Participant's rights and benefits under this Agreement is reasonable
and equitable considering that absent forfeiture of such rights and
benefits the Company will be in the position of paying benefits to
Participant while suffering damages on account of Participant's
breach.
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Waiver and Release of Claims: [If Applicable]
(a) The Participant is a party to that certain _____________Agreement
made with the Company or its predecessor dated_____(the "Prior Plan
Agreement");
(b) The Plan and the benefits provided under the Plan substitute for
the Prior Plan Agreement and the benefits provided thereunder;
(c) The Prior Plan Agreement and the benefits otherwise to be provided
thereunder are hereby terminated effective as of the date of this Plan;
(d) The Participant hereby waives and relinquishes for himself or
herself, and his or her heirs, beneficiaries, legal representatives,
agents, successors and assigns, any and all right, entitlement and interest
that the Participant has or may have pursuant to the Prior Plan Agreement
and the benefits thereunder;
(e) The Participant accepts the benefits afforded by the Participation
Agreement in full and complete satisfaction and substitution for the
benefits otherwise provided by the Prior Plan Agreement; and
(f) The Participant (i) has had an opportunity to consult with legal,
tax and financial advisors of the Participant's own choice in determining
whether to enter into the Agreement and this Waiver, (ii) understands the
benefits that were to be provided to the Participant and to his or her
surviving spouse or beneficiaries under the Prior Plan Agreement and the
terms and conditions that applied to such benefits, (iii) understands that
the effect of this Waiver is to terminate, waive and relinquish forever all
rights, entitlements and interests that the Participant has or may have
under the Prior Plan Agreement and the benefits thereunder as a condition
to receiving benefits under the Plan; and (iv) the Participant is entering
into the Participation Agreement and this Waiver voluntarily and with full
appreciation of the effects of doing so.
Participant:
---------------------------------------------------
(Signature)
---------------------------------------------------
(Print Name)
North Bay Bancorp:
----------------------------------------------
(Signature of Authorized Executive)
----------------------------------------------
(Print Name and Title)
Date:
---------------------------------------------------
14
EXHIBIT 2
Distribution Election Form
The 2005 North Bay Bancorp Supplemental Executive Retirement Plan
(Effective as of _________, 200__)
I understand the significance of, and want to comply with, all applicable
Internal Revenue Code Sections, including, but not limited to, IRC 409A. Thus,
for any benefits payable pursuant to this Plan, if I am a Key Employee, as
defined by the Internal Revenue Service, and the Company is publicly traded at
the time of "separation from service" (as defined by IRC 409A), any such benefit
payment to be made pursuant to this Plan shall be withheld for six (6) months
following such separation from service, in order to comply with IRC 409A.
Pursuant to the Provisions of the Plan, I hereby elect to have my Supplemental
Retirement Benefit paid to me as designated below:
In the event of a Change in Control, I elect to have my benefit payments
commence on the following Date:
__________ On the first day of the month following my Early Retirement
Date (reduced to Actuarial Equivalent in accordance with the
terms of paragraph 5.2) OR (Verify for existing
Participants)
__________ On the first day of the month following the my Normal
Retirement Date.
I further elect to have my Supplemental Retirement Benefit paid to me as
designated below:
_________ A monthly single life annuity for the Participant's life.
_________ A joint and survivor annuity with an Actuarial Equivalent
Value equal to the Basic Benefit with payment continued to
the survivor in the same amount as the amount paid to the
Participant.
_________ A joint and survivor annuity with an Actuarial Equivalent
Value equal to the Basic Benefit with payment continued to
the survivor and one-half of the amount paid to the
Participant.
_________ Alternate form as approved by the Board and selected in
accordance with the provisions of the appropriate IRS
requirements, including but not limited to IRC 409A, as
follows:
________________________________________________________
In addition, I have been advised and understand that I may modify the Form
of Benefit Payment, however any such modification (i) may not take effect
until at least twelve (12) months after the date on which the election is
made, and (ii) the first payment to which such election is made must be
deferred for a period of at least five (5) years from the date the payment
would otherwise have been made.
Signed__________________________ Print Name ____________________
Dated ________________
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EXHIBIT 3
Beneficiary Designation Form
The 2005 North Bay Bancorp Supplemental Executive Retirement Plan
I. PRIMARY DESIGNATION
-------------------
(You may refer to the beneficiary designation information prior
to completion of this form.)
A. Person(s) as a Primary Designation:
-----------------------------------
(Please indicate the percentage for each beneficiary.)
Name__________________________ Relationship___________________ / _______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name__________________________ Relationship___________________ / _______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name__________________________ Relationship___________________ / _______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
B. Estate as a Primary Designation:
--------------------------------
My Primary Beneficiary is The Estate of ______________________________________
as set forth in the last will and testament dated the _____ day of
_____________, _____ and any codicils thereto.
C. Trust as a Primary Designation:
-------------------------------
Name of the Trust: ____________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee: __________________________________________________________
Beneficiary(ies) of the Trust (please indicate the percentage for each
beneficiary):
___________________________________________________________________________
___________________________________________________________________________
Is this an Irrevocable Life Insurance Trust? ________ Yes ________ No
(If yes and this designation is for a Split Dollar agreement, an Assignment of
Rights form should be completed.)
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II. SECONDARY (CONTINGENT) DESIGNATION
----------------------------------
A. Person(s) as a Secondary (Contingent) Designation:
--------------------------------------------------
(Please indicate the percentage for each beneficiary.)
Name__________________________ Relationship___________________ / _______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name__________________________ Relationship___________________ / _______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name__________________________ Relationship___________________ / _______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
B. Estate as a Secondary (Contingent) Designation:
-----------------------------------------------
My Secondary Beneficiary is The Estate of _____________________________________
as set forth in my last will and testament dated the _____ day of ___________,
_____ and any codicils thereto.
C. Trust as a Secondary (Contingent) Designation:
----------------------------------------------
Name of the Trust: ____________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee: __________________________________________________________
Beneficiary(ies) of the Trust (please indicate the percentage for each
beneficiary):
___________________________________________________________________________
___________________________________________________________________________
All sums payable under this Agreement by reason of my death shall be paid to the
Primary Beneficiary(ies), if he or she survives me, and if no Primary
Beneficiary(ies) shall survive me, then to the Secondary (Contingent)
Beneficiary(ies). This beneficiary designation is valid until the participant
notifies the bank in writing.
- ---------------------------------- ----------------------------------------
Participant's Signature Date
17