Sierra Bancorp Establishes Director Emeritus Program With Retirement Benefits

New Retirement Program Aims to Enhance Director Retention

Sierra Bancorp disclosed that it has adopted a formal retirement benefits program designed to support the continued recruitment and retention of highly qualified directors across its organization. The Retirement Plan for Directors Emeritus, which became effective on July 23, 2026, establishes a structured approach to providing retirement income for non-employee board members who voluntarily transition to emeritus status. The company stated that the plan is intended to help ensure both Sierra Bancorp and Bank of the Sierra maintain their ability to attract and retain experienced directors over the long term.

The establishment of the Director Emeritus position represents a formal recognition of the contributions made by retiring board members and offers a mechanism to maintain relationships with individuals who have provided substantial service to the organization. By creating this structured program, Sierra Bancorp has moved beyond informal arrangements to implement a standardized approach that applies consistently across both the parent company and its subsidiary bank.

Eligibility Requirements and Director Emeritus Status

To qualify for benefits under the plan, directors must meet two key requirements as outlined in the disclosure. First, an Eligible Director must voluntarily retire from the board of either Sierra Bancorp or Bank of the Sierra after completing the minimum number of service years specified within the plan document. Second, the retiring director must enter into a formal Director Emeritus Agreement with the applicable entity, either the parent company or the subsidiary bank. This dual-requirement structure ensures that only those meeting both conditions receive the retirement benefits provided under the plan.

The plan's structure reflects a deliberate choice to require formal documentation through the Director Emeritus Agreement, which is referenced in the disclosure as being attached to the plan document filed with the Securities and Exchange Commission. This contractual approach establishes clear expectations and terms for both the company and the retiring directors, providing legal certainty regarding the rights and obligations of each party.

Retirement Benefit Structure and Payment Terms

The disclosure specifies that annual retirement benefits under the plan equal fifty percent of the annual cash retainer amount paid to the director during the immediately preceding 12-month period, excluding committee retainers. This calculation method ties the benefit amount directly to the director's most recent compensation from the company, adjusted downward by half. The benefit calculation is measured from the date of retirement, establishing a clear reference point for determining the payment amount.

Annual benefits are payable for a period of three years following a director's retirement, subject to the conditions contained in the plan and the individual Director Emeritus Agreement. This three-year benefit window provides retiring directors with meaningful income support during their transition away from active board service while establishing a defined endpoint for the company's financial obligation. The disclosure notes that benefits remain subject to the plan's conditions, indicating that circumstances could affect benefit eligibility or payment.

Scope of Application Across Corporate Structure

The retirement plan applies to non-employee directors serving on the boards of both Sierra Bancorp and Bank of the Sierra, its wholly owned subsidiary. This dual application ensures that directors across the corporate structure are treated consistently and have access to the same retirement benefits program regardless of which board they serve on. The inclusion of subsidiary board members demonstrates Sierra Bancorp's commitment to recognizing service across its entire organizational structure.

The plan's applicability to both entities may reflect the integrated nature of operations between the parent company and the subsidiary bank, as well as the practice of board members serving on multiple boards within the corporate structure. By extending the program across both organizations, Sierra Bancorp has created a unified approach to director retention that recognizes contributions at all levels of the corporate governance structure.

Administrative Oversight and Plan Management

The disclosure indicates that the Board of Directors of Sierra Bancorp, or a committee designated by the Board, will serve as the administrator of the retirement plan. This administrative structure places plan oversight within the existing corporate governance framework, allowing the full board or an appropriate subcommittee to manage the program's implementation and operations. The administrative responsibility includes interpreting plan terms, determining director eligibility, and overseeing benefit payments to qualified retirees.

The assignment of administrative duties to the board or a board-designated committee ensures that plan management remains within the organization's established decision-making structure. This approach maintains continuity with existing governance practices while establishing clear accountability for the program's proper administration and compliance with its terms.

Plan Documentation and Formal Structure

Sierra Bancorp filed the complete Retirement Plan for Directors Emeritus as Exhibit 10.1 to its disclosure, making the full plan document publicly available to investors and other stakeholders. The disclosure notes that the description of the plan's terms and conditions does not purport to be complete and is qualified by reference to the full plan document. This language is standard SEC disclosure practice and directs readers to consult the complete plan document for comprehensive understanding of all provisions and requirements.

The formal filing of the plan document as an exhibit to the company's SEC disclosure reflects the materiality of the program to shareholders and the importance of providing complete transparency regarding the company's commitments. The creation of a written plan document, as opposed to informal arrangements, establishes a clear and enduring framework that governs the retirement benefits program and protects both the company and participating directors through documented terms and conditions.

Strategic Considerations for Director Compensation

The retirement benefit plan represents a component of Sierra Bancorp's overall approach to director compensation and retention strategy. By offering post-retirement income support, the company has created an incentive structure designed to attract experienced candidates who may view board service as a long-term commitment. The three-year benefit window provides sufficient duration to support a meaningful transition period while establishing a manageable long-term financial commitment for the company.

The fifty percent retainer replacement rate positions the benefit as a supplementary retirement income source rather than a complete replacement for the director's previous annual retainer. This approach balances the company's desire to provide meaningful retirement support with the practical constraint of managing long-term financial obligations. Directors considering retirement would have visibility into the income support available through this program as they evaluate their board tenure.

Investor Considerations Regarding the Plan

Investors examining Sierra Bancorp's governance and financial obligations may consider the implications of the new retirement benefits program for the company's long-term costs and commitments. The program creates a defined financial obligation to qualifying retired directors, the magnitude of which depends on the number of directors who eventually participate and the cash retainer amounts in effect during their final service year. While the specific financial impact is not quantified in the disclosure, investors can estimate potential costs based on the current number of board members and existing retainer amounts.

The establishment of this formal program may also reflect market practices within the banking industry regarding director retention and compensation strategies. As a publicly traded financial institution, Sierra Bancorp operates within a competitive environment for board talent and may have implemented this program in response to industry trends or to address specific retention challenges. The immediate share price impact was not clear from available public information.

Timing and Effective Date

The Retirement Plan for Directors Emeritus became effective on July 23, 2026, the same date that Sierra Bancorp established the Director Emeritus position. The company disclosed this action on July 27, 2026, through its regulatory filing. The four-day delay between the plan's effective date and the public disclosure represents the standard timeframe for filing current reports regarding significant corporate actions.

The July 2026 timing of the plan's adoption may reflect strategic business planning by Sierra Bancorp's board and management. The establishment of this program during the summer months may have been driven by planned director transitions, governance reviews, or the implementation of broader compensation strategy changes. The disclosure provides investors with notice of the program's existence and terms, allowing stakeholders to factor this information into their assessment of the company's governance and financial position.