122 / 146
SIERRA BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
106
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
$5,213,000 and $5,159,000 and was fully accrued for the years ended December 31, 2015 and 2014,
respectively. The expense recognized under these arrangements totaled $345,000, $320,000 and $288,000
for the years ended December 31, 2015, 2014 and 2013, respectively. Salary continuation benefits paid to
former directors or executives of the Company or their beneficiaries totaled $291,000, $112,000 and
$83,000 for the years ended December 31, 2015, 2014 and 2013. The Company also provided 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 was
fully accrued and was zero for each the years ended December 31, 2015 and 2014 and was $89,000 for the
year ended December 31, 2013. Benefits paid to former executives of SNB under this plan totaled $0,
$83,000 and $67,000 for the years ended December 31, 2015, 2014 and 2013, 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 $39,275,000 and $38,303,000 at December 31,
2015 and 2014, 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, 2015, 2014 and 2013. In connection with this plan, life insurance policies with cash surrender values
totaling $4,865,000 and $4,686,000 at December 31, 2015 and 2014, 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%, for both of the
years ended December 21, 2015 and 2014, and 60% for the year ended December 31, 2013. 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 $543,000, $477,000, and $360,000 to
the Plan in 2015, 2014 and 2013, respectively.