California Bank of Commerce NOTES TO FINANCIAL STATEMENTS 13.  RELATED PARTY TRANSACTIONS During the normal course of business, the Bank enters into transactions with related parties, including  Directors, executive officers and affiliates. The following is a summary of the aggregate activity involving related party borrowers during the year  ended December 31, 2011: At December 31, 2011, the Bank’s deposits from related parties totaled $3,186,000. The Bank also leases its head office from a company owned by a member of the Board of Directors. Rental payments under this agreement totaled $434,357 for the year ended December 31, 2011 and  $431,368 for the year ended December 31, 2010. Profit Sharing Plan In 2007, the Bank adopted the California Bank of Commerce Profit Sharing 401(k) Plan. All full-time  employees 21 years of age or older with 3 months of service are eligible to participate in the 401(k)  Plan. Eligible employees may elect to make tax deferred contributions up to the maximum amount  allowed by law. The Bank may make additional contributions to the plan at the discretion of the Board  of Directors. Bank contributions vest at a rate of 20% annually for all employees. The Bank did not  make a contribution to the 401(k) Plan during the years ended December 31, 2011 or 2010. Salary Continuation and Retirement Plan The Board of Directors approved a salary continuation plan for the Chief Executive Officer (CEO)  during 2007. Under the Plan, once the CEO reaches age 65, the Bank is obligated to provide the  CEO with annual benefits for twenty years after retirement. The estimated present value of these  future benefits is accrued from the effective date of the plan until the CEO’s expected retirement  date based on a discount rate of 6.5%. The expense recognized under this plan for the years ended  December 31, 2011 and 2010 totaled $63,864 and $57,025, respectively. Accrued compensation  payable under the salary continuation plan totaled $256,663 and $192,799 at December 31, 2011  and 2010, respectively, and is included in accrued interest payable and other liabilities on the Bank’s  balance sheet. 46 14.  EMPLOYEE BENEFIT PLANS Balance, December 31, 2010  $ 3,959,567 Disbursements 2,267,679 Amounts repaid  (1,233,726) Balance, December 31, 2011  $ 4,993,520 Undisbursed commitments to related parties, December 31, 2011  $ 1,488,774