This excerpt taken from the BSRR 8-K filed Feb 21, 2007.
(e) Compensatory Arrangements of Certain Officers
On February 15, 2007 the Board of Directors approved and adopted the Companys 2007 Stock Incentive Plan (the 2007 Plan), subject to the approval of the Companys shareholders. The 2007 Plan provides for the issuance of both incentive and nonqualified stock options to officers and employees, and of nonqualified stock options to non-employee directors, of the Company and its subsidiaries. The 2007 Plan also provides for the issuance of restricted stock awards to these same classes of eligible participants, which awards may be granted on such terms and conditions as are established by the Board of Directors or the Compensation Committee in its discretion.
The maximum number of shares to be issued under the 2007 Plan is 1,500,000 shares of the Companys authorized but unissued common stock, subject to adjustment for stock splits and dividends. This maximum number covers both restricted stock awards and stock options to be granted under the 2007 Plan, and will also include all outstanding options under the Companys 1998 Stock Option Plan (1998 Plan), which options will be transferred to the 2007 Plan upon shareholder approval thereof. The 1998 Plan will be terminated at that time.
All options under the 2007 Plan must be granted at an exercise price of not less than 100% of the fair market value of the stock on the date of grant, and will be exercisable in installments as provided in individual stock option agreements. In the event of a Change in Control as defined in the 2007 Plan, all outstanding options thereunder shall become exercisable in full (subject to certain notification requirements), and shall terminate if not exercised within a specified period of time, unless such options are assumed by the successor corporation or substitute options are granted. Options will terminate in the event an optionee ceases to be employed by or to serve as a director of the Company or its subsidiaries, and the vested portion thereof must be exercised within 30 days after such cessation of employment or service.
The above summary is qualified in its entirety by reference to the 2007 Plan, a copy of which is attached as Exhibit 10.29 to this Form 8-K and is incorporated herein by reference. A complete description of all material terms of the 2007 Plan will also be included in the Companys proxy statement relating to the 2007 Annual Meeting of Shareholders at which shareholder approval of the 2007 Plan will be solicited.
This excerpt taken from the BSRR 8-K filed Jan 8, 2007.
(e) Compensatory Arrangements of Certain Officers
Effective January 1, 2007, Bank of the Sierra (the Bank), a wholly-owned subsidiary of Sierra Bancorp, entered into a Director Retirement Agreement with each of the following non-employee directors: Albert Berra, Robert Fields, Vince Jurkovich, Morris Tharp, Robert Tienken, and Gordon Woods. The terms of each of such non-employee directors agreements are identical, and one sample agreement is attached hereto as Exhibit 10.1.
These agreements provide for payments of $25,000 per year for ten years to each of the named directors (or designated beneficiaries) at retirement, upon disability, or in the event of a change in control, provided that the triggering event occurs on or after the later of age 70 or five years from the date of the agreement. If the triggering event occurs prior to that time, the annual payment is a reduced amount, based on the Banks accrued liability under the agreement at the end of the plan year immediately prior to termination of service. Each agreement also includes a pre-retirement death benefit, which is a lump-sum amount equal to the Banks accrued liability as of the end of the month immediately prior to death. These agreements supplement similar agreements dated October 1, 2002, which also provide for payments of $25,000 per year under similar circumstances, but without reduced amounts in the event of earlier triggering events.
The Bank has also entered into a Salary Continuation Agreement with Kevin McPhaill, Executive Vice President and Chief Banking Officer for Sierra Bancorp and Bank of the Sierra. The Salary Continuation Agreement, effective January 1, 2007, provides for payments to Mr. McPhaill of $100,000 per year for fifteen years, subsequent to his retirement at age 65 or in the event of separation of service subsequent to a change in control. The agreement specifies a reduced benefit equal to the accrual balance as of the end of the month preceding termination of employment, in the event of an early involuntary termination or disability. In addition, it includes a benefit of $992,467 in lieu of any other benefit in the event of death prior to retirement.
At the same time, the Banks Salary Continuation Agreement with Kenneth Taylor, Executive Vice President and Chief Financial Officer, dated October 1, 2002, was amended to increase his annual retirement benefit to $100,000 per year for fifteen years, with a $334,100 pre-retirement death benefit in addition to the split-dollar death benefit already in place. The agreement was also modified to conform to the requirements of Section 409A of the Internal Revenue Code.
It is expected that the expense accruals associated with the agreements discussed herein will be entirely offset by earnings on $6 million in single-premium life insurance purchased by the Bank on December 22, 2006, although no assurance can be made in that regard.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS