AMENDED AND RESTATED TEMECULA VALLEY BANK SPLIT DOLLAR AGREEMENT
EXHIBIT
10.28
AMENDED
AND RESTATED
TEMECULA
VALLEY BANK
THIS
AGREEMENT is adopted this 29th
day of
December 2006, by and between TEMECULA VALLEY BANK, a commercial bank, located
in Temecula, California (the "Company"), and XXXXXX
X. XXXXXXXX
(the
"Executive"). This Agreement amends and restates the Split Dollar Agreement
originally entered into on September 30, 2004, and shall append the Split Dollar
Endorsement entered into on that date.
INTRODUCTION
To
encourage the Executive to remain an employee of the Company, the Company is
willing to divide the death proceeds of a life insurance policy on the
Executive's life. The Company will pay life insurance premiums from its general
assets.
AGREEMENT
The
Company and the Executive agree as follows:
Article
1
General
Definitions
The
following terms shall have the meanings specified:
1.1 “Insured”
means
the Executive.
1.2 “Insurer”
means
each life insurance carrier in which there is a Split Dollar Policy Endorsement
attached to this Agreement.
1.3 “Policy”
means
the specific life insurance policy or policies issued by the
Insurer.
1.4 “Salary
Continuation Agreement”
means
that Salary Continuation Agreement between the Company and the Executive entered
into on even date herewith or as subsequently amended.
1.5 “Change
in Control”
means:
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(a)
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A
change in the ownership of the capital stock of the Company, whereby
another corporation, person, or group acting in concert (hereinafter
this
Agreement shall collectively refer to any combination of these three
[another corporation, person, or group acting in concert] as a “Person”)
as described in Section 14(d)(2) of the Securities Exchange Act of
1934,
as amended (the “Exchange Act”), acquires, directly or indirectly,
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under
the Exchange Act) of a number of shares of capital stock of the Company
which constitutes twenty-five percent (25%) or more of the combined
voting
power of the Company’s then outstanding capital stock then entitled to
vote generally in the election of directors; or
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(b)
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The
persons who were members of the Board of Directors of the Company
immediately prior to a tender offer, exchange offer, contested election
or
any combination of the foregoing, cease to constitute a majority
of the
Board of Directors; or
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(c)
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The
adoption by the Board of Directors of the Company of a merger,
consolidation or reorganization plan involving the Company in which
the
Company is not the surviving entity, or a sale of all or substantially
all
of the assets of the Company. For purposes of this Agreement, a sale
of
all or substantially all of the assets of the Company shall be deemed
to
occur if any Person acquires (or during the 12-month period ending
on the
date of the most recent acquisition by such Person, has acquired)
gross
assets of the Company that have an aggregate fair market value equal
to
twenty-five percent (25%) or more of the fair market value of all
of the
respective gross assets of the Company immediately prior to such
acquisition or acquisitions; or
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(d)
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A
tender offer or exchange offer is made by any Person which results
in such
Person beneficially owning (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) either twenty-five percent (25%) or more
of the
Company’s outstanding shares of Common Stock or shares of capital stock
having twenty-five (25%) or more the combined voting power of the
Company’s then outstanding capital stock (other than an offer made by the
Company), and sufficient shares are acquired under the offer to cause
such
person to own twenty-five (25%) or more of the voting power;
or
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(e)
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Any
other transactions or series of related transactions occurring which
have
substantially the same effect as the transactions specified in any
of the
preceding clauses of this Section
1.5.
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Notwithstanding
the above, certain transfers are permitted within Section 318 of the Code and
such transfers shall not be deemed a Change in Control under this Section 1.5.
Article
2
Policy
Ownership/Interests
2.1 Company
Ownership.
The
Company is the sole owner of the Policy and shall have the right to exercise
all
incidents of ownership. The Company shall be the beneficiary of the remaining
death proceeds of the Policy after the Interest of the Executive or the
Executive’s transferee has been paid according to Section 2.2
below.
2.2 Executive's
Interest.
The
Executive shall have the right to designate the beneficiary of the death
proceeds. The Executive shall also have the right to elect and change settlement
options that may be permitted. Upon the termination of this Agreement pursuant
to Article 7, the Executive, the Executive’s transferee or the Executive’s
beneficiary shall have no rights or interests in the Policy and no death benefit
shall be paid under this Section 2.2.
2.2.1 Death
During Active Service.
If the
Executive dies while in the active service of the Company, the Executive's
beneficiary shall receive $793,974 (Seven Hundred Ninety-three Thousand Nine
Hundred Seventy-four Dollars).
2.2.2 Death
During Payment of a Benefit under the Salary Continuation Agreement.
If
the
Executive Dies after any benefit payments have commenced under Article 2 of
the
Salary Continuation Agreement but before receiving all such payments, the Bank
shall cease paying the remaining Salary Continuation benefit, if any, and the
Executive’s beneficiary shall receive a Split Dollar benefit equal to the
remaining Accrued Liability Balance, as defined in the Salary Continuation
Agreement.
2.2.3 Death
After Termination of Employment But Before Commencement of Payment under the
Salary Continuation Plan. If
the
Executive is entitled to a benefit under Article 2 of the Salary Continuation
Agreement, but dies prior to the commencement of said benefit payments, the
Company shall pay no benefit under the Salary Continuation Agreement and the
Executive's beneficiary shall receive the split dollar death benefit described
in Section 2.2.1 of this Agreement.
2.2.4 Death
After Payment of all Benefits Under the Salary Continuation
Agreement.
If the
Executive Dies after all benefit payments have been made under Article 2 of
the
Salary Continuation Agreement, no benefits shall be paid under this
Agreement.
2.3 Comparable
Coverage upon Change in Control.
Upon a
Change in Control, the Company shall not amend, terminate or otherwise abrogate
the Executive’s Interest in the Policy unless the Company replaces the Policy
with a comparable insurance policy to cover the benefit provided under this
Agreement and the Company and the Executive execute a new Split Dollar Policy
Endorsement for said comparable insurance policy. The Policy or any comparable
policy shall be subject to the claims of the Company’s creditors.
Article
3
Premiums
3.1 Premium
Payment.
The
Company shall pay any premiums due on the Policy.
3.2 Economic
Benefit.
The
Company shall determine the economic benefit attributable to the Executive
based
on the amount of the current term rate for the Executive's age multiplied by
the
aggregate death benefit payable to the Executive's beneficiary. The "current
term rate" is the minimum amount required to be imputed under Revenue Rulings
64-328 and 66-110, or any subsequent applicable authority.
3.3 Imputed
Income. The
Company shall impute the economic benefit to the Executive on an annual
basis.
Article
4
Assignment
The
Executive may assign without consideration all of the Executive’s interests in
the Policy and in this Agreement to any person, entity or trust. In the event
the Executive transfers all of the Executive’s interest in the Policy, then all
of the Executive's interest in the Policy and in the Agreement shall be vested
in the Executive’s transferee, who shall be substituted as a party hereunder and
the Executive shall have no further interest in the Policy or in this
Agreement.
Article
5
Insurer
The
Insurer shall be bound only by the terms of the Policy. Any payments the Insurer
makes or actions it takes in accordance with the Policy shall fully discharge
it
from all claims, suits and demands of all entities or persons. The Insurer
shall
not be bound by or be deemed to have notice of the provisions of this
Agreement.
Article 6
Claims
and Review Procedure
6.1 Claims
Procedure.
Any
person or entity who has not received benefits under the Agreement that he
or
she believes should be paid (the “claimant”) shall make a claim for such
benefits as follows:
6.1.1 Initiation
- Written Claim.
The
claimant initiates a claim by submitting to the Company a written claim for
the
benefits.
6.1.2 Timing
of Company Response.
The
Company shall respond to such claimant within 90 days after receiving the claim.
If the Company determines that special circumstances require additional time
for
processing the claim, the Company can extend the response period by an
additional 90 days by notifying the claimant in writing, prior to the end of
the
initial 90-day period that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the
Company expects to render its decision.
6.1.3 Notice
of Decision.
If the
Company denies part or all of the claim, the Company shall notify the claimant
in writing of such denial. The Company shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set
forth:
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(a)
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The
specific reasons for the denial,
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(b)
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A
reference to the specific provisions of this Agreement on which
the denial
is based,
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(c)
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A
description of any additional information or material necessary
for the
claimant to perfect the claim and an explanation of why it is needed,
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(d)
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An
explanation of this Agreement’s review procedures and the time limits
applicable to such procedures, and
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(e)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) (00 Xxxxxx Xxxxxx Code section 1132(a)) following
an
adverse benefit determination on review.
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6.2 Review
Procedure.
If the
Company denies part or all of the claim, the claimant shall have the opportunity
for a full and fair review by the Company of the denial, as
follows:
6.2.1 Initiation
- Written Request.
To
initiate the review, the claimant, within 60 days after receiving the Company’s
notice of denial, must file with the Company a written request for review.
6.2.2 Additional
Submissions - Information Access.
The
claimant shall then have the opportunity to submit written comments, documents,
records and other information relating to the claim. The Company shall also
provide the claimant, upon request and free of charge, reasonable access to,
and
copies of, all documents, records and other information relevant (as defined
in
applicable ERISA regulations) to the claimant’s claim for benefits.
6.2.3 Considerations
on Review.
In
considering the review, the Company shall take into account all materials and
information the claimant submits relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination.
6.2.4 Timing
of Company Response.
The
Company shall respond in writing to such claimant within 60 days after receiving
the request for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can extend the
response period by an additional 60 days by notifying the claimant in writing,
prior to the end of the initial 60-day period that an additional period is
required. The notice of extension must set forth the special circumstances
and
the date by which the Company expects to render its decision.
6.2.5 Notice
of Decision.
The
Company shall notify the claimant in writing of its decision on review. The
Company shall write the notification in a manner calculated to be understood
by
the claimant. The notification shall set forth:
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(a)
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The
specific reasons for the denial,
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(b)
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A
reference to the specific provisions of this Agreement on which
the denial
is based,
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(c)
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A
statement that the claimant is entitled to receive, upon request
and free
of charge, reasonable access to, and copies of, all documents,
records and
other information relevant (as defined in applicable ERISA regulations)
to
the claimant’s claim for benefits, and
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(d)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
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Article
7
Amendments
and Termination
7.1 This
Agreement may be amended or terminated only by a written agreement signed by
the
Company and the Executive. In the event that the Company decides to maintain
the
Policy after the termination of the Agreement, the Company shall be the direct
beneficiary of the entire death proceeds of the Policy.
7.2 Notwithstanding
any provision of this Agreement to the contrary, the Company shall not pay
any
benefit under this Agreement if the Company terminates the Executive's
employment for:
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(a)
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Willful
breach of duty in the course of employment or habitual neglect
of
employment responsibilities and duties;
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(b)
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Conviction
of any felony or crime involving moral turpitude, fraud or dishonesty;
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(c)
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Willful
violation of any state or federal banking or securities law,
the rules or
regulations of any banking agency, or any material Company
rule, policy or
resolution resulting in an adverse effect on the Company;
or
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(d)
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Disclosure
to any third party by the Executive, without authority or permission,
of
any secret or confidential information of the
Company.
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7.3 Suicide
or Misstatement.
The
Company shall not pay any benefit under this Agreement if the Executive commits
suicide within three years after the date of this Agreement. In addition, the
Company shall not pay any benefit under this Agreement if the Executive has
made
any material misstatement of fact on an employment application or resume
provided to the Company, or on any application for any benefits provided by
the
Company to the Executive.
Article
8
Miscellaneous
8.1 Binding
Effect.
This
Agreement shall bind the Executive and the Company and their beneficiaries,
survivors, executors, administrators and transferees, and any Policy
beneficiary.
8.2 No
Guarantee of Employment.
This
Agreement is not an employment policy or contract. It does not give the
Executive the right to remain an employee of the Company, nor does it interfere
with the Company's right to discharge the Executive. It also does not require
the Executive to remain an employee nor interfere with the Executive's right
to
terminate employment at any time.
8.3
Applicable Law.
The
Agreement and all rights hereunder shall be governed by and construed according
to the laws of the State of California, except to the extent preempted by the
laws of the United States of America.
8.4 Reorganization.
The
Company shall not merge or consolidate into or with another company, or
reorganize, or sell substantially all of its assets to another company, firm
or
person unless such succeeding or continuing company, firm or person agrees
to
assume and discharge the obligations of the Company.
8.5 Notice.
Any
notice, consent or demand required or permitted to be given under the provisions
of this Split Dollar Agreement by one party to another shall be in writing,
shall be signed by the party giving or making the same, and may be given either
by delivering the same to such other party personally, or by mailing the same,
by United States certified mail, postage prepaid, to such party, addressed
to
his or her last known address as shown on the records of the Company. The date
of such mailing shall be deemed the date of such mailed notice, consent or
demand.
8.6 Entire
Agreement. This
Agreement constitutes the entire agreement between the Company and the Executive
as to the subject matter hereof. No rights are granted to the Executive by
virtue of this Agreement other than those specifically set forth
herein.
8.7 Administration.
The
Company shall have powers which are necessary to administer this Agreement,
including but not limited to:
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(a)
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Interpreting
the provisions of this Agreement;
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(b)
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Establishing
and revising the method of accounting for this
Agreement;
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(c)
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Maintaining
a record of benefit payments;
and
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(d)
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Establishing
rules and prescribing any forms necessary or desirable to administer
this
Agreement.
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8.8 Named
Fiduciary. The
Company shall be the named fiduciary and administrator under the Agreement.
The
named fiduciary 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.
IN
WITNESS WHEREOF, the Executive and the Company consent to this Agreement on
the
date above written.
EXECUTIVE: COMPANY:
TEMECULA
VALLEY
BANK
| By: /s/ Xxxxxx X. Xxxxxxxx | By: /s/ Xxxxxx X. Xxxxxxx | ||
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| Executive Vice President and Chief Financial Officer |
