EX-99.1 4 dex991.htm GREATER BAY BANCORP 2004 VOLUNTARY DEFERRED COMPENSATION PLAN Greater Bay Bancorp 2004 Voluntary Deferred Compensation Plan

Exhibit 99.1

 

LOGO

 

GREATER BAY BANCORP

 

2004 VOLUNTARY DEFERRED COMPENSATION PLAN

 

TABLE OF CONTENTS

 

     Page

ARTICLE 1         INTRODUCTION

    1

1.01    Name of Plan

    1

1.02    Intent and Status of Plan

    1

ARTICLE 2         DEFINITIONS

    2

2.01    Annual Bonus Compensation

    2

2.02    Annual Bonus Compensation Deferral Date

    2

2.03    Basic Compensation

    2

2.04    Basic Compensation Deferral Date

    2

2.05    Beneficiary

    2

2.06    Board

    2

2.07    Change in Control

    2

2.08    Code

    3

2.09    Commencement Date

    3

2.10    Committee

    3

2.11    Company

    3

2.12    Compensation

    3

2.13    Compensation Deferral Election Form

    3

2.14    Deferred Compensation Account

    3

2.15    Disability

    4

2.16    Effective Date

    4

2.17    Eligible Employee

    4

2.18    ERISA

    4

2.19    Investment Funds

    4

2.20    Investment Reference Rate of Return

    4

2.21    Participant

    4

2.22    Participating Company

    4

2.23    Plan

    4

2.24    Plan Year

    5

2.25    Retirement Eligible Date

    5

 

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TABLE OF CONTENTS

(continued)

 

     Page

2.26    Valuation Date

    5

ARTICLE 3         ELIGIBILITY AND PARTICIPATION

    6

3.01    Eligibility Requirements

    6

3.02    Participation

    6

3.03    Termination of Participation

    6

ARTICLE 4         DEFERRED COMPENSATION ACCOUNTS

    7

4.01    Establishment of Deferred Compensation Accounts

    7

4.02    Compensation Deferral

    7

4.03    Crediting Investment Returns

    8

4.04    Vesting of Accounts

    9

ARTICLE 5         PAYMENT OF DEFERRED COMPENSATION

    10

5.01    In General

    10

5.02    Election of Time and Form of Payment

    10

5.03    Changing Payment Elections

    10

5.04    Payment Upon Termination of Employment

    10

5.05    Hardship Payments

    11

5.06    Payment Upon Change in Control Termination

    11

5.07    Payment Upon Disability Termination

    11

5.08    Payment Upon Participant’s Death

    12

5.09    Designation of Beneficiaries

    12

ARTICLE 6         FINANCING AND UNFUNDED STATUS

    13

6.01    Costs Borne by the Participating Companies

    13

6.02    Source of Benefit Payments and Medium of Financing the Plan

    13

6.03    Unfunded Status

    13

6.04    Rabbi Trust

    13

ARTICLE 7         ADMINISTRATION

    14

7.01    General Administration

    14

7.02    Committee Procedures

    14

7.03    Facility of Payment

    14

 

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TABLE OF CONTENTS

(continued)

 

     Page

7.04    Indemnification of Committee Members

    14

7.05    Claims Procedures

    15

ARTICLE 8         TAX MATTERS

    17

8.01    No Guarantee of Tax Consequences

    17

8.02    Income Tax Withholding

    17

8.03    FICA Tax Withholding

    17

8.04    Tax Indemnification by Participants

    17

8.05    Payment Upon Taxation or ERISA Coverage

    17

ARTICLE 9         PARTICIPATING COMPANY PARTICIPATION

    18

9.01    Adoption of Plan

    18

9.02    Participating Company Accounting

    18

9.03    Withdrawal from the Plan by a Participating Company

    18
ARTICLE 10         AMENDMENT AND TERMINATION OF PLAN    19

10.01    Amendment

    19

10.02    Termination

    19

ARTICLE 11         GENERAL PROVISIONS

    20

11.01    Limitation of Rights

    20

11.02    Receipt and Release

    20

11.03    No Assignment or Alienation of Benefits

    20

11.04    Successors

    20

11.05    Governing Law

    20

11.06    Headings

    20

11.07    Gender and Number

    21

11.08    Severability of Provisions

    21

 

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ARTICLE 1

 

INTRODUCTION

 

1.01 Name of Plan.

 

Greater Bay Bancorp hereby establishes, as of the Effective Date, the Greater Bay Bancorp 2004 Voluntary Deferred Compensation Plan.

 

1.02 Intent and Status of Plan.

 

The Plan is intended to be an unfunded plan maintained by the Company and any other Participating Companies primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees of the Participating Companies (and intended to be within the exemptions therefore in, without limitation, sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA and section 2520.104-23 of the Labor Regulations). The Plan is intended to be “unfunded” for purposes of both ERISA and the Code. The Plan is not intended to be qualified under section 401(a) of the Code.

 

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ARTICLE 2

 

DEFINITIONS

 

Each following word, term and phrase shall have the following respective meanings whenever such word, term or phrase is capitalized and used in any Article of this Plan unless the context clearly indicates otherwise:

 

2.01 “Annual Bonus Compensation” means the portion of a Participant’s Compensation that is earned for services performed for a Participating Company during a Plan Year and that is to be paid (whether during or following the end of the Plan Year) to the Participant as an annual bonus or as other annual incentive compensation pursuant to a Participating Company’s plan, program or agreement.

 

2.02 “Annual Bonus Compensation Deferral Date” means a date selected by the Committee for each Plan Year that is on or before December 1st of such Plan Year.

 

2.03 “Basic Compensation” means the base salary portion of a Participant’s Compensation for a Plan Year.

 

2.04 “Basic Compensation Deferral Date” means the Effective Date in the initial Plan Year and January 1 of each Plan Year thereafter.

 

2.05 “Beneficiary” means one or more individuals, trusts, estates or other entities designated in accordance with Section 5.09 to receive benefits under the Plan upon the death of a Participant.

 

2.06 “Board” means the Board of Directors of the Company.

 

2.07 “Change in Control” shall mean the first to occur of any of the following events:

 

  (a) any “person” (as such term is used in sections 13 and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the beneficial owner (as that term is used in section 13(d) of the Exchange Act), directly or indirectly, of twenty-five percent (25%) or more of the capital stock of the Company entitled to vote in the election of directors, other than a group of two or more persons not (1) acting in concert for the purpose of acquiring, holding or disposing of such stock or (2) otherwise required to file any form or report with any governmental agency or regulatory authority having jurisdiction over the Company which requires the reporting of any change in control;

 

  (b) during any period of not more than two (2) consecutive years during which the Company continues in existence, not including any period prior to the effective date of this Plan, individuals who, at the beginning of such period, constitute the Board of Directors of the Company, and any new director (other than a director designated by a person who has entered into an agreement with Company to effect a transaction described in clause (a), (c), (d) or (e) of this Section 2.07 whose appointment to such Board of Directors or nomination for election to such Board of Directors was approved by a vote of at least three-fourths (3/4ths) of the directors then still in office, either were directors at the beginning of such period or whose appointment or nomination for election was previously so approved, cease for any reason to constitute at least a majority of such Board of Directors;

 

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  (c) the effective date of any consolidation or merger of the Company (after all requisite shareholder, applicable regulatory and other approvals and consents have been obtained), other than (i) a consolidation or merger of the Company in which the holders of the voting capital stock of the Company immediately prior to the consolidation or merger hold more than fifty percent (50%) of the voting capital stock of the surviving entity immediately after the consolidation or merger or (ii) a consolidation or merger of the Company with one or more other persons that are within a “controlled group of corporations” (as that term is defined in section 1563 of the Internal Revenue Code in which the Company is a member (or for non-corporate entities have a similar relationship to the Company) immediately prior to the consolidation or merger;

 

  (d) The shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or

 

  (e) The shareholders of the Company approve the sale or transfer of substantially all of the Company’s assets respectively, to one or more persons that are not within a “controlled group of corporations” (as that term is defined in section 1563 of the Code) in which the Company is a member (or for non-corporate entities do not have a similar relationship to the Company) immediately prior to the sale or transfer.

 

2.08 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

2.09 “Commencement Date” means the date elected by a Participant for the lump sum payment or the commencement of installment payments of the Participant’s Deferred Compensation Account, which date shall be first day of a calendar month meeting the requirements specified in Section 5.02.

 

2.10 “Committee” means the Benefits Administration Committee of the Company or such other committee, person or persons as the Board may specify from time to time.

 

2.11 “Company” means Greater Bay Bancorp, a California corporation, and any business organization or corporation into which Greater Bay Bancorp may be merged or consolidated or by which it may be succeeded.

 

2.12 “Compensation” means the cash compensation that is earned by a Participant for service as an Eligible Employee during a given Plan Year.

 

2.13 “Compensation Deferral Election Form” means a written administrative form provided by the Committee on which a Participant may elect to defer Compensation (either Basic Compensation or Annual Bonus Compensation) in accordance with Article 4 hereof.

 

2.14

“Deferred Compensation Account” means the separate book account established by the Committee pursuant to Article 4 of this Plan for each Participant to which shall be credited (added) the Participant’s Compensation deferrals pursuant to Section 4.02 (net of any amount applied to withholding taxes pursuant to Section 8.03), from which any payments shall be subtracted, and which shall be adjusted for hypothetical earnings thereon as described in Section 4.03 hereof (which may be additions or subtractions). All amounts (including investments and any assets represented thereby and hypothetical earnings thereon) that may be credited to a Deferred Compensation Account are credited solely for computation purposes and are at all times assets of the Participating

 

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Company and subject to the claims of the Participating Company’s general creditors. A Participant’s Deferred Compensation Account shall be utilized solely as a device for the determination and measurement of the amounts to be paid as deferred Compensation benefits to the Participant or his or her Beneficiary pursuant to the Plan. No Participant or Beneficiary shall have at any time any interest in or to any investment or asset that may be referenced in such Deferred Compensation Account. A Participant’s Deferred Compensation Account shall not constitute or be treated as a trust or trust fund of any kind.

 

2.15 “Disability” means a bodily injury or disease (mental or physical) of a Participant which:

 

  (a) Is included within the definition given to the term “disability” in any policy of long-term disability insurance maintained by a Participating Company for the benefit of its employees, including the Participant, at the time of the Participant’s termination of employment; or

 

  (b) In the absence of such a long-term disability insurance policy, wholly and continuously prevents the Participant from performing the Participant’s duties on behalf of a Participating Company for at least ninety (90) days.

 

Whether or not a Participant meets either of the above conditions will be determined by the Committee in its sole and absolute discretion.

 

2.16 “Effective Date” means July 1, 2004, the date the Plan is established.

 

2.17 “Eligible Employee” means any employee of the Participating Company who meets the eligibility criteria established in Section 3.01.

 

2.18 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

2.19 “Investment Funds” means one or more mutual funds, indexes or other investments designated by the Committee, in its sole discretion, which the Participants may select to determine the deemed income, gains, losses and expenses on the balances in their Deferred Compensation Accounts. The Committee may from time to time, in its sole discretion, designate additional Investment Funds or terminate the designation of any existing Investment Fund or Investment Funds.

 

2.20 “Investment Reference Rate of Return” with respect to each Investment Fund means the investment return (whether positive or negative and with no floor or ceiling) on such Investment Fund from the most recently preceding Valuation Date to the current Valuation Date.

 

2.21 “Participant” means an Eligible Employee participating in the Plan pursuant to the provisions of Article 3 hereof.

 

2.22 “Participating Company” means the Company and any subsidiary or affiliate of the Company considered a single employer with the Company pursuant to Section 4001(a)(14) of ERISA that adopts the Plan with the Company’s consent as described in Section 9.01.

 

2.23 “Plan” means this Greater Bay Bancorp 2004 Deferred Compensation Plan as established and set forth herein (together with any and all supplements hereto), and as amended from time to time.

 

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2.24 “Plan Year” means the period beginning on the Effective Date and ending on December 31, 2004 (the initial Plan Year), and each twelve (12) consecutive month period thereafter beginning on a January 1 and ending on the following December 31 (the calendar year).

 

2.25 “Retirement Eligible Date” means the earliest date, if any, on which a Participant continues to be an employee of a Participating Company after (a) reaching age 65, or (b) reaching age 55 and having a minimum of ten (10) years of combined service with the Participating Companies.

 

2.26 “Valuation Date” with respect to each Investment Fund means each business day on which the Investment Fund is traded on a national securities exchange or on which value of the Investment Fund is otherwise readily available.

 

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ARTICLE 3

 

ELIGIBILITY AND PARTICIPATION

 

3.01 Eligibility Requirements.

 

Each regular full-time employee of a Participating Company whose annualized rate of Basic Compensation during a calendar year is greater than or equal to one hundred fifty thousand dollars ($150,000), which amount may be increased from time to time by the Committee in its sole discretion, shall be eligible to participate in this Plan for the Plan Year coinciding with or contained within such calendar year if the employee holds one or more of the following corporate titles or management committee designations or is designated by the Committee to be an Eligible Employee for such Plan Year:

 

  (a) President;

 

  (b) Chief Executive Officer;

 

  (c) Executive Vice President;

 

  (d) Senior Vice President;

 

  (e) Member of the Company’s Senior Management Committee (SMC)

 

3.02 Participation.

 

Each Eligible Employee shall become a Participant in the Plan as of the first day of the first Plan Year for which he or she makes an election to defer Compensation under the Plan or, if later, the date on which he or she first becomes an Eligible Employee.

 

3.03 Termination of Participation.

 

A Participant’s participation in the Plan shall terminate when the Participant’s employment with all Participating Companies has terminated for any reason and the Participant has received payment in full of the balance in his or her Deferred Compensation Account.

 

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ARTICLE 4

 

DEFERRED COMPENSATION ACCOUNTS

 

4.01 Establishment of Deferred Compensation Accounts.

 

The Committee shall establish and maintain for each Participant under the Plan a book account (the “Deferred Compensation Account” as defined in Section 2.14 hereof) for the purposes of determining deferred Compensation payable to the Participant by each Participating Company. The Deferred Compensation Accounts shall be governed by the provisions of this Article 4.

 

4.02 Compensation Deferral.

 

  (a) Deferral Elections. The following provisions apply to Compensation deferral elections made by Eligible Employees becoming Participants under the Plan.

 

  (i) Basic Compensation Deferral Elections. With respect to each Plan Year, an Eligible Employee may make an election prior to the Basic Compensation Deferral Date on which such Plan Year begins to defer a specified whole percentage (that is not more than fifty percent (50%)) of the Basic Compensation that would otherwise be payable to the Eligible Employee during such Plan Year. Any such election shall be made on a Compensation Deferral Election Form delivered to the Committee or its designate before such Basic Compensation Deferral Date. No such election may be made, revoked, changed or modified on or after the applicable Basic Compensation Deferral Date.

 

  (ii) Basic Compensation Deferral Elections by New Eligible Employees. In the case of an individual who first becomes an Eligible Employee during a Plan Year, such Eligible Employee may make an election no later than thirty (30) days following the date he or she first becomes an Eligible Employee to defer a specified whole percentage (that is not more than fifty percent (50%)) of the Basic Compensation that would otherwise be payable to the Eligible Employee after the later of (i) the date he or she first becomes an Eligible Employee or (ii) the date such Compensation Deferral Election Form is received by the Committee or its designate through the remainder of the Plan Year. Any such election shall be made on a Compensation Deferral Election Form delivered to the Committee or its designate no later than thirty (30) days following the date he or she first becomes an Eligible Employee. No such election may be made, revoked, changed or modified after the end of such thirty (30) day period.

 

  (iii)

Bonus Compensation Deferral Elections by Participants. With respect to each Plan Year, an Eligible Employee may make an election prior to the Annual Bonus Compensation Deferral Date for such Plan Year to defer a specified dollar amount or a specified whole percentage (that is not more than one hundred percent (100%)) of the Annual Bonus Compensation that would otherwise be payable to the Eligible Employee for service during such Plan Year (whether such payment otherwise would be made during or following the end of such Plan Year). Any such election shall be made on a Compensation Deferral Election Form delivered to the Committee or its designate before such Annual Bonus Compensation Deferral Date. No such election may be made, revoked, changed

 

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or modified on or after the applicable Annual Bonus Compensation Deferral Date.

 

  (iv) Additional Conditions on Deferral Elections. An Eligible Employee may make separate elections for each Plan Year for deferral of Basic Compensation and for deferral of Annual Bonus Compensation. An Eligible Employee’s election, if any, to defer Basic Compensation for any Plan Year when applied to his or her annual rate of Basic Compensation for such Plan Year must equal or exceed five thousand dollars ($5,000), and an Eligible Employee’s election, if any, to defer Annual Bonus Compensation for any Plan Year must equal or exceed five thousand dollars ($5,000). Each Compensation Deferral Election Form that is delivered to make an election shall be duly executed by the Eligible Employee and shall contain such other information and signatures, including spousal consent if applicable, as the Committee may require. An Eligible Employee who fails to submit to the Committee a fully and properly completed and executed Compensation Deferral Election Form pertaining to his or her Basic Compensation and/or Annual Bonus Compensation for a Plan Year by the due date specified above shall receive his or her full Basic Compensation and/or Annual Bonus Compensation, respectively, in cash for that Plan Year.

 

  (b) Withholding and Crediting of Deferred Compensation. A Participating Company shall withhold payment of the amounts elected for deferral by each Participant hereunder from Compensation that otherwise would be payable to such Participant. The Committee shall credit amounts equal to such withheld amounts (net of any amount applied to withholding taxes pursuant to Section 8.03) to the Participant’s Deferred Compensation Account.

 

4.03 Crediting Investment Returns.

 

  (a) At the time an Eligible Employee first becomes a Participant and at such other times as the Committee may specify, the Participant must elect, in such form as may be prescribed by the Committee or its designate, the Investment Funds in which amounts added to the Participant’s Deferred Compensation Account shall be deemed to be invested for purposes of adjusting the balance in such Deferred Compensation Account to reflect income, gains, losses and expenses in accordance with subsection 4.03(c). Such investment election shall designate the portion of the Participant’s Compensation deferrals that are to be treated as invested in each Investment Fund. If a Participant fails to make an investment election, the Participant’s Deferred Compensation Account shall be deemed invested in such default Investment Fund as the Committee may designate.

 

  (b) A Participant’s investment election shall remain in effect until the Participant files a change in investment election with the Committee or its designate in accordance with procedures established by the Committee. A Participant may change his investment election with respect to existing Deferred Compensation Account balances and/or with respect to amounts to be deferred in the future. A change in investment election shall be made in such manner and with such frequency as may be prescribed from time to time by the Committee.

 

  (c)

As of each Valuation Date, each Participant’s Deferred Compensation Account will be credited with the Investment Reference Rate of Return (positive or negative) for each

 

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Investment Fund applied to the portion of the Participant’s Deferred Compensation Account, if any, deemed to be invested in such Investment Fund in accordance with the Participant’s investment elections. The adjustments made as of each Valuation Date to the Participant’s Deferred Compensation Account shall be made in any equitable, uniform and nondiscriminatory manner as the Committee, in its sole discretion, may direct, provided that such method is selected for the purpose of recognizing the timing of deferrals, payments, investment income, gains and losses, expenses, and other temporal events affecting the account values. A Participant’s account shall continue to be adjusted under this subsection 4.03(c) until completely distributed.

 

4.04 Vesting of Accounts.

 

Participants’ Deferred Compensation Accounts will always be fully vested.

 

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ARTICLE 5

 

PAYMENT OF DEFERRED COMPENSATION

 

5.01 In General.

 

The Participating Companies shall make payment of Compensation deferred under this Plan, as adjusted hereunder, pursuant to the provisions of this Article 5, subject to the provisions of Article 7.

 

5.02 Election of Time and Form of Payment.

 

Each time a Participant makes a deferral election pursuant to Section 4.02, the Participant must specify the Commencement Date and form of payment for the amount to be deferred pursuant to that election. A Participant may make separate (different) elections of Commencement Dates and forms of payment each Plan Year for deferred Basic Compensation attributable to that Plan Year and for deferred Annual Bonus Compensation attributable to that Plan Year. A Participant may not elect a Commencement Date for any deferred Compensation that is prior to January 1 of the third calendar year beginning after the end of Plan Year in which the deferred Compensation would be paid but for the deferral election. The Participant may elect to receive payment of Compensation deferred pursuant to a specific election in a single lump sum on the Commencement Date or in annual installments over a period of to up to five (5) years beginning with the Commencement Date. Any payment in installments shall commence as of the Commencement Date, and shall be made thereafter on each anniversary of the Commencement Date for the remainder of the installment period. The amount of each annual installment shall be determined as of the Valuation Date immediately preceding the date as of which such annual installment shall be paid by dividing the balance in the Participant’s Deferred Compensation Account as of such Valuation Date (following adjustments as of such Valuation Date pursuant to Section 4.03) by the number of annual installments remaining to be paid hereunder; provided, that the last annual installment shall be the entire amount credited to the Participant’s Deferred Compensation on the final payment date.

 

5.03 Changing Payment Elections.

 

A Participant who continues to be an Eligible Employee may change the Commencement Date and/or form of payment specified in any Compensation deferral election by filing with the Committee, at least one year prior to the previously elected Commencement Date, a written change election in such form as the Committee shall specify. A Participant may make a change election only once with respect to each deferral election made pursuant to Section 4.02.

 

5.04 Payment Upon Termination of Employment.

 

  (a) If a Participant terminates employment with all Participating Companies on or after his or her Retirement Eligible Date for reasons other than death, Disability or Change in Control, then the balance in the Participant’s Deferred Compensation Account will be paid to the Participant in accordance with Participant’s election hereunder, subject to any provisions of this Plan to the contrary.

 

  (b)

If a Participant terminates employment with all Participating Companies prior to his or her Retirement Eligible Date for reasons other than death, Disability or Change in

 

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Control, then the balance in the Participant’s Deferred Compensation Account will be paid to the Participant in a lump sum as soon as practicable following such termination of employment.

 

5.05 Hardship Payments.

 

At the request of a Participant, the Committee may, in its sole discretion, commence payment of all or any portion of a Participant’s Deferred Compensation Account at any date earlier than the Commencement Date elected by the Participant based on the Committee’s determination that the Participant has incurred an unforeseeable financial emergency. The amount of any such payment shall not exceed the lesser of

 

  (a) The balance in Participant’s Deferred Compensation Account; or

 

  (b) The amount needed to satisfy such unforeseeable financial emergency, to the extent that the unforeseeable financial emergency may not be relieved:

 

  (i) Through reimbursement or compensation by insurance or otherwise; or

 

  (ii) By liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship.

 

An “unforeseeable financial emergency” is a substantial financial hardship to the Participant resulting from:

 

  (a) Sudden and unexpected illness or accident of the Participant or of a dependent of the Participant;

 

  (b) Loss of the Participant’s property due to casualty; or

 

  (c) Such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant as determined by the Committee.

 

Payment resulting from an unforeseeable financial emergency shall be made as soon as administratively practicable following the date on which the Committee approves the payment, or over such periods of time as the Committee may consider necessary or appropriate to meet the conditions of such financial emergency.

 

5.06 Payment Upon Change in Control Termination.

 

If a Participant’s employment with the Participating Companies terminates within two (2) years following a Change in Control, then the balance in the Participant’s Deferred Compensation Account shall be paid in full in a single lump sum to the Participant within ninety (90) days following such termination of employment.

 

5.07 Payment Upon Disability Termination.

 

If a Participant’s employment with the Participating Companies terminates as the result of the Participant’s Disability, then the balance in the Participant’s Deferred Compensation Account shall be paid in full in a single lump sum to the Participant (including, if

 

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applicable, as specified in Section 7.03), within ninety (90) days following the later of such termination of employment or the date on which the Committee determines that the Participant has incurred a Disability.

 

5.08 Payment Upon Participant’s Death.

 

If a Participant dies, then the balance in the Participant’s Deferred Compensation Account shall be paid in full in a single lump sum to the Participant’s Beneficiary or Beneficiaries as soon as administratively practicable following the Committee’s receipt of the appropriate documents confirming the date of the Participant’s death.

 

5.09 Designation of Beneficiaries.

 

The Participant may designate in writing (on a form provided by the Committee, meeting such requirements as may be established by the Committee, and delivered to the Committee or its designate before the Participant’s death) primary and contingent Beneficiaries to receive any Deferred Compensation Account balance which may be payable hereunder following the Participant’s death and the proportions in which such Beneficiaries are to receive such payments. The Participant may change such designations from time to time. The last written designation delivered to the Committee or its designate prior to the Participant’s death will control. If the Participant fails to specifically designate such a Beneficiary, or if no designated Beneficiary survives the Participant for ninety (90) days, then the Participant’s remaining Deferred Compensation Account balance shall be paid to the Participant’s surviving spouse if such spouse is then living; or, if such spouse is not living, then to the executors or administrators of the estate of the Participant. The Committee may determine the identity of such persons and shall incur no responsibility by reason of any payment made in accordance with any such determination made in good faith.

 

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ARTICLE 6

 

FINANCING AND UNFUNDED STATUS

 

6.01 Costs Borne by the Participating Companies.

 

The costs of administration of the Plan shall be borne by the Participating Companies. However, the Committee may elect to charge some or all of the Plan costs to reduce the accounts of Participants.

 

6.02 Source of Benefit Payments and Medium of Financing the Plan.

 

The benefits provided under the Plan shall be paid solely from the general assets of the Participating Companies. The Participating Companies may maintain one or more specific accounts with a financial institution to invest funds and hold assets to be used for the payment of benefits under the Plan, but any such accounts, funds or assets shall not be considered to be assets of the Plan. No Participant or Beneficiary or other person shall have any claim against, right to, or security or other interest in, any fund, account or asset of the Participating Companies from which any payment under the Plan may be made.

 

6.03 Unfunded Status.

 

This Plan is intended to be unfunded for purposes of both ERISA and the Code. This Plan does not require any segregated or separate assets. All amounts of compensation deferred under the Plan, all property and rights purchased with such amounts, and all income attributable to such amounts, property or rights, shall remain (until paid or otherwise made available to a Participant or Beneficiary) solely the property and rights of a Participating Company (without being restricted to the provision of benefits under the Plan) subject only to the claims of the general creditors of the Participating Company. Nothing contained in this Plan shall be construed to establish a trust for the benefit of any Participant or Beneficiary.

 

6.04 Rabbi Trust.

 

The foregoing notwithstanding, o or before the occurrence of a Change in Control, the Company and the Participating Companies shall create an irrevocable trust substantially in the form attached as Exhibit              to this Plan, the assets of which shall subject to the claims of general creditors of the Company and the Participating Companies (the “Rabbi Trust”), and transfer to such Rabbi Trust cash or other liquid assets having a value equal to all amounts credited to the Deferred Compensation Accounts of all Participants.

 

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ARTICLE 7

 

ADMINISTRATION

 

7.01 General Administration.

 

The Committee shall be the administrator of the Plan. The Committee shall be responsible for the management, control and administration of the Plan. The Committee shall have full power and authority to manage, control and administer the Plan in all of its detail (including administering the claims procedures set forth herein) and shall have all powers necessary or appropriate to discharge its duties under this Plan, subject to applicable requirements of law. The Committee shall have sole discretion and authority to interpret the Plan and to decide all questions regarding eligibility for and the amount of any benefits to be provided under the Plan. The Committee may delegate to others certain aspects of the management and operation responsibilities of the Plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals. Participants and Beneficiaries shall provide the Committee with such information and evidence, and shall sign such documents, as may reasonably be requested from time to time for the purpose of administration of the Plan.

 

7.02 Committee Procedures.

 

The Committee may act at a meeting, or in writing without a meeting. The Committee may adopt such by-laws, rules and regulations, as it deems necessary, appropriate or desirable for the conduct of its affairs and the administration of the Plan. All decisions shall be made by majority vote of the members of the Committee. No member of the Committee who is a Participant in this Plan shall vote on a matter before the Committee (whether in a meeting or by written action) relating specifically to such member of the Committee or to the amount, payment, timing, form or other aspect of the benefits of such Committee member under this Plan.

 

7.03 Facility of Payment.

 

Whenever, in the Committee’s opinion, a person entitled to receive any payment of a benefit hereunder is under a legal disability or is incapacitated in any way so as to be unable to manage his or her own financial affairs, the Committee may direct payments to such person or to his legal representative or to a relative or friend of such person for his or her benefit, or the Committee may direct the payment for the benefit of such person in such manner as the Committee considers advisable. Any payment of a benefit in accordance with the provisions of this Section shall completely discharge the Committee and the Participating Companies from any liability for such payment or benefit under the Plan.

 

7.04 Indemnification of Committee Members.

 

The Participating Companies shall indemnify and hold harmless each member of the Committee and its designees against any and all liability, claims, damages and expense (including all expenses reasonably incurred in the Committee’s defense in the event that

 

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the Participating Companies fail to provide such defense upon their written request) which the Committee member may incur while acting in good faith in the administration of the Plan.

 

7.05 Claims Procedures.

 

  (a) Submission of Claim. In the event a dispute arises over benefits under the Plan and benefits are not paid to a Participant or Beneficiary and a claimant feels that he or she is entitled to receive such benefits, then the claimant must submit a written claim for benefits to the Committee. The Committee shall give any such written claim a full and fair review.

 

  (b) Denial of Claim. If the claim is denied, in whole or in part, the Committee will furnish the claimant with a written notice of this denial. This written notice must be provided to the claimant within a reasonable period of time (generally ninety (90) days) after the receipt of the claim by the Committee. There may be times when this ninety (90) day period will be extended. Such an extension may be made, however, only where there are special circumstances that are communicated to the claimant in writing within the initial 90-day period. If there is an extension, the Committee will render a decision as soon as possible, but not later than one hundred eighty (180) days after receipt by the Committee of the written claim. Each written notice of denial must provide (1) a specific reason or reasons for such denial, (2) specific reference to the provisions of the Plan upon which the denial is based, and (3) a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary. The written notice of denial shall further indicate the additional steps to be taken by the claimant if a further review of the claim denial is desired. A claim shall be deemed denied if the Committee fails to act on the claim within the initial 90-day period or any extension thereof. If the claimant does not request a review of the denial of his or her claim in accordance with the procedures set forth below, the decision of the Committee on such claim shall be final and binding on all parties.

 

  (c)

Claims Review Procedure. If a claim for benefits is denied or deemed denied, and the claimant desires a second review, the claimant must file a request for review, in writing, with the Committee. SUCH A REQUEST FOR REVIEW MUST BE SUBMITTED NO LATER THAN SIXTY (60) DAYS AFTER THE CLAIMANT RECEIVES WRITTEN NOTIFICATION OF THE DENIAL OF THE ORIGINAL CLAIM FOR BENEFITS, OR IF NO WRITTEN DENIAL OF THE ORIGINAL CLAIM WAS PROVIDED, NO LATER THAN SIXTY (60) DAYS AFTER THE DEEMED DENIAL OF THE CLAIM. The claimant may review all pertinent documents relating to the denial of the claim and submit any issues and comments, in writing, to the Committee. The Committee will give the request for review a full and fair review. If the claim is denied on such second review, the Committee will provide the claimant with written notice of this denial within sixty (60) days of the Committee’s receipt of the written request for review. There may be times when this sixty (60) day period may be extended. Such an extension may only be made, however, where there are special circumstances that are communicated to the claimant in writing within the initial sixty (60) day period. If there is an extension, a decision shall be made as soon as possible, but not later than one hundred twenty (120) days after receipt by the Committee of the request for review. The Committee’s decision on the request for review will be communicated to the claimant in writing and will include specific references to the pertinent provisions of the Plan on which the decision

 

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is based. If the Committee’s decision on review is not furnished to the claimant within the time limitations described above, the claim will be deemed denied on review. The decision of the Committee on such a review shall be final and binding on all parties.

 

  (d) Arbitration. All claims, disputes and other matters in question arising out of or relating to this Plan, other than those matters which are to be determined by the Committee in its sole and absolute discretion, shall be resolved by binding arbitration before an arbitrator, selected by the mutual agreement of the parties, from the Judicial Arbitration and Mediation Services, Inc. (“JAMS”), 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 an arbitrator, selected by the mutual agreement of the parties, from the American Arbitration Association (“AAA”), 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 the dispute 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 commercial rules and procedures used or established by JAMS, or if there are none, the commercial rules and procedures used or established by AAA. Notwithstanding anything to the contrary in the JAMS (or AAA) rules and procedures, the arbitration shall provide for (i) written discovery and depositions adequate to give the parties access to documents and witnesses that are essential to the dispute and (ii) a written decision by the arbitrator that includes the essential findings and conclusions upon which the decision is based. Subject to paragraph 7.05(e) below, the parties shall bear their own costs and attorneys’ fees incurred in conducting the arbitration, and shall split equally the fees and administrative costs charged by the arbitrator and JAMS (or AAA) unless required otherwise by applicable law. 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. Any arbitration hereunder shall be conducted in Palo Alto, California, unless otherwise agreed to by the parties.

 

  (e) Attorneys Fees. In the event of any arbitration or litigation concerning any controversy, claim or dispute arising out of or relating to this Plan, the prevailing party shall be entitled to recover from the non-prevailing party reasonable expenses, attorneys’ fees and costs incurred in connection therewith or in the enforcement or collection of any judgment or award rendered therein. The “prevailing party” means the party determined by the arbitrator(s) or court, as the case may be, to have most nearly prevailed, even if such party did not prevail in all matters, not necessarily the one in whose favor a judgment is rendered.

 

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ARTICLE 8

 

TAX MATTERS

 

8.01 No Guarantee of Tax Consequences.

 

The Company and the Participating Companies make no commitment or guarantee that any additions to Deferred Compensation Accounts or other benefits hereunder provided or to be provided to or for the benefit of a Participant or Beneficiary will be excludable from the Participant’s or Beneficiary’s gross income for federal or state income tax purposes, or that any other federal or state tax treatment will apply to or be available to any Participant or Beneficiary.

 

8.02 Income Tax Withholding.

 

The Company and the Participating Companies shall withhold from any amount paid under this Plan any and all federal, state and local income taxes and any other taxes that are required to be withheld from such payment under applicable law.

 

8.03 FICA Tax Withholding.

 

The Company and the Participating Companies shall withhold, from the portion of a Participant’s Compensation that otherwise would be deferred under this Plan, the Participant’s share of FICA and other employment taxes imposed on such Compensation at the time it is deferred.

 

8.04 Tax Indemnification by Participants.

 

If any addition to a Participant’s Deferred Compensation Account hereunder is taxable to the Participant, such Participant shall indemnify and reimburse the Company and the Participating Companies for any liability they may incur for failure to withhold federal or state income tax from such addition. However, such indemnification and reimbursement shall not exceed the amount of additional federal and state income tax and interest that the Participant would have owed if the amount had been paid to the Participant as cash Compensation.

 

8.05 Payment Upon Taxation or ERISA Coverage.

 

If, for any reason, all or any portion of a Participant’s Deferred Compensation Account under this Plan becomes taxable to the Participant prior to receipt, a Participant may petition the Committee for payment of that portion of his or her Deferred Compensation Account that has become taxable. Within ninety (90) days following the grant of such a petition, which grant shall not be unreasonably withheld, the Company or Participating Company shall pay to the Participant an amount equal to the taxable portion of his or her Deferred Compensation Account, and the Participant’s Deferred Compensation Account shall be reduced by such payment. The Committee shall also direct the payment of the entire balance in a Participant’s Deferred Compensation Account in the event of a judicial or administrative decision, or an opinion of Company’s counsel (made without regard to any termination of employment), that such Participant is not a member of a “select group of management or highly compensated employees” within the meaning of Title I of ERISA.

 

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ARTICLE 9

 

PARTICIPATING COMPANY PARTICIPATION

 

9.01 Adoption of Plan.

 

Any subsidiary or affiliate of the Company that would be considered a single employer with the Company pursuant to Section 4001(a)(14) of ERISA may, with the approval of the Company and under such terms and conditions as the Committee may prescribe, adopt the Plan by submitting to the Company a resolution of its Board of Directors to that effect. The Company may amend the Plan as necessary or desirable to reflect the adoption of the Plan by any such subsidiary or affiliate employer, provided however, that an adopting employer other than the Company shall not have the authority to amend or terminate the Plan under Article 9.

 

9.02 Participating Company Accounting.

 

The Committee shall maintain a bookkeeping account in the name of each Participating Company which, pursuant to rules established by the Committee, will reflect:

 

  (a) Amounts of deferred Compensation credited to the Deferred Compensation Account of each Participant employed or formerly employed by that Participating Company;

 

  (b) Income, gains, losses, and expenses allocated to the Deferred Compensation Account of each Participant employed or formerly employed by that Participating Company; and

 

  (c) Payments to Participants employed or formerly employed by that Participating Company (or to their Beneficiaries) as benefits payable under the Plan.

 

9.03 Withdrawal from the Plan by a Participating Company.

 

Any Participating Company shall have the right, at any time, upon the approval of and under such conditions as may be provided by the Committee, to withdraw from the Plan by delivering to the Committee written notice of its election so to withdraw. Upon receipt of such notice by the Committee, the portion of the Deferred Compensation Accounts of each Participant and Beneficiary attributable to amounts deferred while the Participant was employed by such withdrawing Participating Company, plus any net earnings, gains, losses and expenses on such amounts both before and after withdrawal, shall be and remain the obligation of such withdrawing Participating Company, and the Company and the other Participating Companies shall have no obligation to such Participants and Beneficiaries with respect to such amounts.

 

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ARTICLE 10

 

AMENDMENT AND TERMINATION OF PLAN

 

10.01  Amendment.

 

The Company shall have the right to amend the Plan (without the consent of any Participant or Beneficiary) at any time and from time-to-time, and all Participants and Beneficiaries shall be bound thereby; provided, however, that no amendment shall decrease the Deferred Compensation Account of any Participant or Beneficiary as of the date of amendment or divest any Participant or Beneficiary of any portion of his or her Deferred Compensation Account as of such date. Each Plan amendment shall be set forth in an instrument executed by the Company in the same manner as this Plan, and each Participating Company shall be deemed to have adopted such amendment.

 

10.02  Termination.

 

The Plan may be discontinued or terminated with respect to the Company or any Participating Company at any time by action of the Company or the Participating Company. Discontinuance or termination of the Plan shall not have the effect of depriving any Participant or Beneficiary of any Deferred Compensation Account balance under the Plan as of the date of discontinuance or termination of the Plan.

 

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ARTICLE 11

 

GENERAL PROVISIONS

 

11.01  Limitation of Rights.

 

Neither the establishment of this Plan nor any amendment thereof, nor the payment of any benefits, will be construed as giving to any Eligible Employee, Participant, Beneficiary, or other person any legal or equitable right against the Participating Companies, except as provided herein. Neither the establishment of this Plan nor any amendment thereof, nor the payment of benefits, nor any action taken with respect to this Plan shall confer upon any person the right to be continued in the employment of any of the Participating Companies or any of their subsidiaries or affiliates.

 

11.02  Receipt and Release.

 

Any payment to or on behalf of any Participant or his or her legal representative or Beneficiary in accordance with the provisions of this Plan shall be, to the extent thereof, in full satisfaction of all claims against the Company and all Participating Companies, and the Company or any Participating Company may require such Participant, legal representative or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.

 

11.03  No Assignment or Alienation of Benefits.

 

The rights of a Participant, Beneficiary or any other person to payment of benefits under this Plan cannot be assigned, transferred, anticipated, conveyed, pledged, alienated, commuted or encumbered except by will or the laws of descent or distribution; nor shall any such right be in any manner subject to levy, attachment, execution, garnishment or any other seizure under legal, equitable or other process for payment of any debts, judgments, alimony, or separate maintenance, or reached or transferred by operation of law in the event of bankruptcy, insolvency or otherwise. Provided, however, that a Participant shall have the right to designate in writing and in accordance with the provisions of Section 5.09 hereof primary and contingent Beneficiaries to receive benefit payments subsequent to the death of the Participant.

 

11.04  Successors.

 

The provisions of this Plan shall be binding upon and inure to the benefit of the Company and the Participating Companies, and their successors, and assigns, and each Participant and his or her Beneficiaries, heirs, executors, administrators and legal representatives. The term successors as used herein shall include any corporate or other business entity that shall, whether by merger, consolidation, purchase or otherwise, acquire all or substantially all of the assets of the Company or any Participating Company, and successors of any such corporation or other business entity.

 

11.05  Governing Law.

 

The provisions of this Plan shall be interpreted and construed according to the laws of the State of California, except to the extent preempted by ERISA or other United States federal law.

 

11.06  Headings.

 

The headings and subheadings of articles and sections are included solely for convenience of reference, and if there be any conflict between such headings and the text of the Plan, then the text of the Plan shall control.

 

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11.07  Gender and Number.

 

Whenever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in each other gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply.

 

11.08  Severability of Provisions.

 

The provisions of this Plan are severable, and should any provision be ruled illegal, unenforceable, void or invalid, all other provisions not so ruled shall remain in full force and effect.

 

IN WITNESS WHEREOF, the Company has caused this Plan to be duly executed for and on behalf of the Company by its duly authorized officers on this the          day of                     , 2004.

 

GREATER BAY BANCORP
By:    
Title:    

 

ATTEST    
       

 

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