SIERRA BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
103
15.
BENEFIT PLANS
Salary Continuation Agreements, Directors’ Retirement and Officer Supplemental Life Insurance Plans
The Company has entered into salary continuation agreements with its executive officers, and has
established retirement plans for qualifying members of the Board of Directors. The plans provide for
annual benefits for up to fifteen years after retirement or death. The benefit obligation under these plans
totaled $5,159,000 and $4,952,000 and was fully accrued for the years ended December 31, 2014 and
2013, respectively. The expense recognized under these arrangements totaled $320,000 and $288,000,
and $292,000 for the years ended December 31, 2014, 2013 and 2012, respectively. Salary continuation
benefits paid to former directors or executives of the Company or their beneficiaries totaled $112,000 for
the year ended December 31, 2014 and $83,000 for each of the years ended December 31, 2013 and 2012.
The Company also provides benefits to former executives of Sierra National Bank under salary
continuation plans that were in effect at the time Sierra National Bank was merged into Bank of the Sierra.
The benefit obligation under these plans totaled $0, $89,000 and $145,000, and was fully accrued for the
years ended December 31, 2014, and 2013, respectively. Benefits paid to former executives of SNB under
this plan totaled $83,000 for the year ended December 31, 2014 and $67,000, for each of the years ended
December 31, 2013, and 2012, respectively. Certain officers of the Company have supplemental life
insurance policies with death benefits available to the officers’ beneficiaries.
In connection with these plans the Company has purchased, or acquired through the merger, single
premium life insurance policies with cash surrender values totaling $38,303,000 and $35,250,000 at
December 31, 2014 and 2013, respectively.
Officer and Director Deferred Compensation Plan
The Company has established a deferred compensation plan for certain members of the management
group and a deferred fee plan for directors for the purpose of providing the opportunity for participants to
defer compensation. The Company bears the costs for the plan’s administration and the interest earned on
participant deferrals. The related administrative expense was not material for the years ended December
31, 2014, 2013 and 2012. In connection with this plan, life insurance policies with cash surrender values
totaling $4,686,000 and $4,174,000 at December 31, 2014 and 2013, respectively, are included on the
consolidated balance sheet in other assets.
401(k) Savings Plan
The 401(k) savings plan (the “Plan”) allows participants to defer, on a pre-tax basis, up to 15% of their
salary (subject to Internal Revenue Service limitations) and accumulate tax-deferred earnings as a
retirement fund. The Bank may make a discretionary contribution to match a specified percentage of the
first 6% of the participants’ contributions annually. The amount of the matching contribution was 75%,
60% and 50% for the years ended December 31, 2014, 2013 and 2012 respectively. The matching
contribution is discretionary, vests over a period of five years from the participants’ hire date, and is
subject to the approval of the Board of Directors. The Company contributed $477,000, $360,000 and
$302,000 to the Plan in 2014, 2013 and 2012, respectively.
