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EXHIBIT 10.16
VALLEY INDEPENDENT BANK
EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT
This Executive Supplemental Compensation Agreement (the "Agreement")
is made and entered into as of June 1,1999 by and between Valley Independent
Bank a subsidiary of VIB Corp with its principal offices located in the City of
El Centro, Imperial County, California (the "Employer"), and _________________,
an individual residing in the State of California (the "Executive").
RECITALS
WHEREAS, the Executive has been an employee of the Employer since
___________________, and is currently serving as its ___________________; and
WHEREAS, the Employer desires to establish a compensation benefit
program as a fringe benefit for executive officers of the Employer in order to
attract and retain individuals with extensive and valuable experience; and
WHEREAS, the Executive's experience and knowledge of the affairs of
the Employer and its industry are extensive and valuable; and
WHEREAS, it is deemed to be in the best interests of the Employer to
provide the Executive with certain fringe benefits, on the terms and conditions
set forth herein, in order to reasonably induce the Executive to remain in the
Employer's employment and to compensate the Executive for valuable services
heretofore rendered to the Employer; and
WHEREAS, the Executive and the Employer wish to specify in writing
the terms and conditions upon which this additional compensatory incentive will
be provided to the Executive, or to the Executive's spouse or the Executive's
designated beneficiaries, as the case may be.
NOW, THEREFORE, in consideration of the services to be performed by
the Executive in the future, as well as the mutual promises and covenants
contained herein, the Executive and the Employer agree as follows:
AGREEMENT
1. Terms and Definitions.
1.1. Administrator. The Employer shall be the "Administrator" and,
solely for the purposes of ERISA as defined in subparagraph
1.9 below, the "fiduciary" of this Agreement where a fiduciary
is required by ERISA.
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1.2. Applicable Percentage. The term "Applicable Percentage" shall
mean that percentage listed on Schedule "A" attached hereto
which is adjacent to the number of calendar years which shall
have elapsed from the date of the Executive's commencement of
service to the Employer. Notwithstanding the foregoing or the
percentage set forth on Schedule A, but subject to all other
terms and conditions set forth herein, the "Applicable
Percentage shall be: (i) provided payments have not yet begun
hereunder, one hundred percent (100%) upon the occurrence of a
"Change in Control" as defined in subparagraph 1.4 below, or
the Executive's death, or Disability (as defined in
subparagraph 1.6 below); and (ii) notwithstanding subclause
(i) of this subparagraph 1.2, zero percent (0%) in the event
the Executive takes any intentional action which prevents the
Employer from collecting the proceeds of any life insurance
policy which the Employer may happen to own at the time of the
Executive's death and of which the Employer is the designated
beneficiary. Furthermore, notwithstanding the foregoing, or
anything contained in this Agreement to the contrary, in the
event the Executive takes any intentional action which
prevents the Employer from collecting the proceeds of any life
insurance policy which the Employer may happen to own at the
time of the Executive's death and of which the Employer is the
designated beneficiary: (1) the Executive's estate or
designated beneficiary shall no longer be entitled to receive
any of the amounts payable under the terms of this Agreement,
and (2) the Employer shall have the right to recover from the
Executive's estate all of the amounts paid to the Executive's
estate (with respect to amounts paid prior to the Executive's
death or paid to the Executive's estate) or designated
beneficiary (with respect to amounts paid to the designated
beneficiary) pursuant to the terms of this Agreement prior to
and after Executive's death.
1.3. Beneficiary. The term "beneficiary" or "designated
beneficiary" shall mean the person or persons whom the
Executive shall designate in a valid Beneficiary Designation,
a copy of which is attached hereto as Schedule "C," to receive
the benefits provided hereunder. A Beneficiary Designation
shall be valid only if it is in the form attached hereto and
made a part hereof, is completed and signed by the Executive,
and is received by the Administrator prior to the Executive's
death.
1.4. Change in Control. The term "Change in Control" shall mean the
occurrence of any of the following events with respect to the
Employer (with the term "Employer", for purposes of this
Paragraph 1.4, being deemed to include any parent holding
company owning, directly or indirectly, substantially all of
the outstanding voting capital stock of the Employer): (i) the
consummation of a merger pursuant to which shares of the
Employer's capital stock are converted into cash, securities
or other property (other than a merger of the Employer in
which the holders of the Employer's capital stock immediately
prior to the merger have the same proportionate ownership of
the common stock of the surviving corporation immediately
after the merger); (ii) the consummation of any sale or other
transfer of all or substantially all the assets of the
Employer; or (iii) any "person" (as defined in Sections 13(d)
and 14(d) of the Securities Exchange Act
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of 1934, as amended (the "Exchange Act")) shall become the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of forty-nine percent
(49%) or more of the Employer's outstanding capital stock.
1.5. The Code. The "Code" shall mean the Internal Revenue Code of
1986, as amended (the "Code").
1.6. Disability/Disabled. The term "Disability" or "Disabled" shall
have the same meaning given such terms in any policy of
disability insurance maintained by the Employer for the
benefit of employees including the Executive. In the absence
of such a policy which extends coverage to the Executive in
the event of disability, the terms shall mean the Executive
suffering a sickness, accident or injury which, in the
judgment of a physician satisfactory to the Employer, prevents
the Executive from performing substantially all of the
Executive's normal duties for the Employer. As a condition to
any benefits, the Employer may require the Executive to submit
to such physical or mental evaluations and tests as the
Employer's Board of Directors deems appropriate.
1.7. Early Retirement Date. The term "Early Retirement Date" shall
mean the Retirement, as defined below, of the Executive on a
date which occurs prior to the Executive attaining sixty-two
(62) years of age, but after the Executive has attained
fifty-five (55) years of age.
1.8. Effective Date. The term "Effective Date" shall mean the date
first written above.
1.9. ERISA. The term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
1.10. Executive Benefits. The term "Executive Benefits" shall mean
the benefits determined in accordance with Schedule "B", and
reduced or adjusted to the extent: (i) required under the
other provisions of this Agreement, including, but not limited
to, Paragraphs 5, 6 and 7 hereof; (ii) required by reason of
the lawful order of any regulatory agency or body having
jurisdiction over the Employer; or (iii) required in order for
the Employer to properly comply with any and all applicable
state and federal laws, including, but not limited to, income,
employment and disability income tax laws (e.g., FICA, FUTA,
SDI).
1.11 Final Average Compensation. The term "Final Average
Compensation" means the Executives average monthly gross cash
compensation from the Employer paid to the Executive over the
twelve (12) month period prior to the Executives termination
of employment with the Employer.
1.12 Plan Year . The term "Plan Year" shall mean the Employer's
fiscal year.
1.13 Retirement. The term "Retirement" or "Retires" shall refer to
the date which the Executive acknowledges in writing to
Employer to be the last day he will provide
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any significant personal services, whether as an employee or
independent consultant or contractor, to Employer. For
purposes of this Agreement, the phrase "significant personal
services" shall mean more than ten (10) hours of personal
services rendered to one or more individuals or entities in
any thirty (30) day period.
1.14 Surviving Spouse. The term "Surviving Spouse" shall mean the
person, if any, who shall be legally married to the Executive
on the date of the Executive's death.
1.15 Termination for Cause. The term "Termination for Cause" shall
mean termination of the employment of the Executive by reason
of any of the following:
(a) The willful, intentional and material breach or
habitual and continued neglect by the Executive of
his/her responsibilities and duties;
(b) The continuous mental or physical incapacity of the
Executive subject to disability rights under this
Agreement;
(c) The determination by a state or federal agency or
other governmental authority having jurisdiction over
the Employer that the Executive is not suitable to
act in the capacity for which he/she is employed by
the Employer;
(d) The Executive's conviction of any felony or a crime
involving moral turpitude or the Executive's willful
and intentional commission of a fraudulent or
dishonest act;
(e) The Executive's willful and intentional disclosure,
without authority, of any secret or confidential
information not otherwise publicly available
concerning the Employer or taking any action which
the Employer's Board of Directors determines, in its
sole discretion and subject to good faith, fair
dealing and reasonableness, constitutes unfair
competition with or inducement of any customer to
breach any contract with the Employer; or
(f) The Executive's willful and intentional violation of
any federal banking or securities laws, or of the
Bylaws, rules, policies or resolutions of the
Employer, or the rules or regulations of the Federal
Deposit Insurance Corporation, the Federal; Reserve,
the California Department of Financial Institutions,
or any other regulatory agency or governmental
authority having jurisdiction over the Employer,
which has a material adverse effect upon the
Employer.
2. Scope, Purpose and Effect
2.1. Contract of Employment. Although this Agreement is intended to
provide the Executive with an additional incentive to remain
in the employ of the Employer,
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this Agreement shall not be deemed to constitute a contract of
employment between the Executive and the Employer nor shall
any provision of this Agreement restrict or expand the right
of the Employer to terminate the Executive's employment. This
Agreement shall have no impact or effect upon any separate
written Employment Agreement which the Executive may have with
the Employer, it being the parties' intention and agreement
that unless this Agreement is specifically referenced in said
Employment Agreement (or any modification thereto), this
Agreement (and the Employer's obligations hereunder) shall
stand separate and apart from, and shall have no effect on or
be affected by, the terms and provisions of said Employment
Agreement.
2.2. Fringe Benefit. The benefits provided by this Agreement are
granted by the Employer as a fringe benefit to the Executive
and are not a part of any salary reduction plan or any
arrangement deferring a bonus or a salary increase. The
Executive has no option to take any current payments or bonus
in lieu of the benefits provided by this Agreement.
3. Payments Upon Early Retirement or Retirement and After Retirement.
3.1. Payments Upon Early Retirement. The Executive shall have the
right to Retire on a date which constitutes an Early
Retirement Date as defined in subparagraph 1.7 above.
(a) If the Executive elects to Retire on a date which
constitutes an Early Retirement Date, the Executive
shall be entitled to be paid the Applicable
Percentage of the Executive Benefits, in
substantially equal monthly installments on the first
day of each month, beginning with the month following
the month in which the Early Retirement Date occurs,
and continuing for one hundred and eighty (180)
months.
3.2. Payments Upon Retirement.
(a) If the Executive remains in the employment of the
Employer until attaining sixty-two (62) years of age,
the Executive shall be entitled to be paid the
Applicable Percentage of the Executive Benefits, in
substantially equal monthly installments on the first
day of each month, beginning with the month following
the month in which the Executive retires or upon such
later date as may be mutually agreed upon by the
Executive and the Employer in advance of said
Retirement date, payable for the period of one
hundred eighty (180) months. At the Employer's sole
and absolute discretion, the Employer may increase
the Executive Benefits as and when the Employer
determines the same to be appropriate.
3.3. Payments in the Event of Death After Retirement.
(a) If the Executive Retires, but shall die before
receiving all of the Executive
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Benefits, the Employer will pay to the Executive's
designated beneficiary(ies) the Applicable Percentage
of the balance, if any, of the Executive's Benefits
in up to one hundred eighty (180) monthly installment
payments in the amounts that otherwise would have
been paid to the Executive if still alive, if any,
minus the number of annual installment payments made
to the Executive prior to the Executive's death.
(b) If the Executive retires, the Executive shall be
entitled to receive the payments specified in
subparagraph 3.3 above.
(c) If a valid Beneficiary Designation is not in effect,
then the remaining amounts due to the Executive under
the terms of this Agreement shall be paid to the
Executive's Surviving Spouse. If the Executive leaves
no Surviving Spouse, the remaining amounts due to the
Executive under the terms of this Agreement shall be
paid to the duly qualified personal representative,
executor or administrator of the Executive's estate.
4. Payments in the Event Death Prior to Retirement.
4.1. Payments in the Event of Death Prior to Retirement.
(a) If the Executive dies at any time after the Effective
Date of this Agreement but prior to Retirement, the
Employer agrees to pay to the Executive's designated
beneficiary(ies) the Applicable Percentage of the
benefit up to one hundred eighty (180) monthly
installment payments in the amounts that otherwise
would have been paid to the Executive if still alive.
(b) If a valid Beneficiary Designation is not in effect,
then the remaining amounts due to the Executive under
the terms of this Agreement shall be paid to the
Executive's Surviving Spouse. If the Executive leaves
no Surviving Spouse, the remaining amounts due to the
Executive under the terms of this Agreement shall be
paid to the duly qualified personal representative,
executor or administrator of the Executive's estate.
5. Payments in the Event Employment is Terminated Prior to Retirement. As
indicated in subparagraph 2.1 above, the Employer reserves the right to
terminate the Executive's employment, with or without cause but subject
to any written employment agreement which may then exist at any time
prior to the Executive's Retirement. In the event that the employment
of the Executive shall be terminated, other than by reason of death,
Disability or Retirement, prior to the Executive's attaining sixty-two
(62) years of age, then this Agreement shall terminate upon the date of
such termination of employment; provided, however, that the Executive
shall be entitled to the following benefits as may be applicable
depending upon the circumstances surrounding the Executive's
termination:
5.1. Termination Without Cause. If the Executive's employment is
terminated by the
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Employer without cause, and such termination is not subject to
the provisions of subparagraph 5.4 below, the Executive shall
be entitled to be paid the Applicable Percentage of the
Executive Benefits, as defined above, in substantially equal
monthly installments on the first day of each month, beginning
with the month following the month in which the Executive
attains fifty-five (55) years of age or any month thereafter,
as requested in writing by the Executive and delivered to the
Employer or its successor thirty (30) days prior to the
commencement of installment payments; provided, however, that
in the event the Executive does not request a commencement
date as specified, such installments shall be paid on the
first day of each month, beginning with the month following
the month in which the Executive attains sixty-two (62) years
of age. The installments shall be payable monthly for one
hundred eighty (180) months.
5.2. Voluntary Termination by the Executive. If the Executive's
employment is terminated by voluntary resignation and such
resignation is not subject to the provisions of subparagraph
5.4 below, the Executive shall be entitled to be paid the
Applicable Percentage of the Executive Benefits, as defined
above, in substantially equal monthly installments on the
first day of each month, beginning with the month following
the month in which the Executive attains fifty-five (55) years
of age or any month thereafter, as requested in writing by the
Executive and delivered to the Employer or its successor
thirty (30) days prior to the commencement of installment
payments; provided, however, that in the event the Executive
does not request a commencement date as specified, such
installments shall be paid on the first day of each month,
beginning with the month following the month in which the
Executive attains sixty-two (62) years of age. The
installments shall be payable monthly for one hundred eighty
(180) months.
5.3. Termination for Cause. If the Executive's employment with the
Employer is terminated "for cause" based on Paragraph 1. 15 of
this Agreement, and such termination is not subject to the
provisions of Paragraph 5.4 below, the Executive shall forfeit
all Executive Benefits.
5.4. Termination by the Employer on Account of or After a Change in
Control. In the event that there has been a Change of Control
and subsequently there has occurred (without the prior written
consent of the Executive) of (i) the permanent assignment of
the Executive by the Employer employing the Executive to
duties materially inconsistent with, or which substantially or
materially alter the nature or status of, the Executive's
responsibilities immediately prior to a Change in Control of
the Employer; (ii) reduction by the Employer in the
Executive's base salary as in effect on the date of a Change
in Control of the Employer as the same may be increased from
time to time during the term of this Agreement; (iii) any
failure by the Employer to continue in effect without
substantial change any compensation, incentive, welfare or
benefit plan or arrangement, or any plan or arrangement
whereby the Executive may acquire securities of the Employer,
in which the Executive is participating at the time of a
Change in Control of the Employer (or any other plans
providing the Executive with substantially similar
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benefits, including, but not limited to, the Employer's
Management Incentive Plan, Employees' Stock Option Plan,
retirement income plan, automobile benefits and life
insurance, medical, dental, accident and disability plans)
(collectively, "Benefit Plans"), or the taking of any action
by the Employer that would adversely affect the Executive's
participation in or materially reduce the Executive's benefits
under any such Benefit Plan or deprive the Executive of any
material fringe benefit enjoyed by the Executive at the time
of the Change in Control of the Employer, unless an equitable
substitute arrangement (embodied in an ongoing substitute or
alternative Benefit Plan) has been made for the benefit of the
Executive with respect to the Benefit Plan in question; (iv)
the Employer requires the Executive to relocate, to any place
other than the El Centro, California, metropolitan area; (v)
any material breach by the Employer of any provision of this
Agreement; (vi) any failure by the Employer to obtain the
assumption of this Agreement by any successor or assign of the
Employer; (vii) any purported termination of the Executive's
employment that is not effected pursuant to a notice of
termination given in accordance with requirements for notices
described at Paragraph 11.4 of this Agreement and which shall
indicate those specific termination provisions in this
Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Executive's employment; or (viii) the
Employer requires the Executive to travel a substantial amount
of time, except for travel related to corporate meetings and
temporary assignments, to an extent substantially inconsistent
with the Executive's business travel obligations at the time
of a Change in Control of the Employer, then, the Executive
may elect to terminate the Executive's employment by the
Employer and shall thereupon be entitled to be paid the
Applicable Percentage of the Executive Benefits, as defined
above in Paragraph 1.2, in substantially equal monthly
installments on the first day of each month, beginning with
the month following the month in which the Executive elects to
terminate the Executives employment with the employer or any
month thereafter, as requested in writing by the Executive and
delivered to the Employer or its successor thirty (30) days
prior to the commencement of installment payments; provided,
however, that in the event the Executive does not request a
commencement date as specified, such installments shall be
paid on the first day of each month, beginning with the month
following the month in which the Executive attains sixty-two
(62) years of age. The installments shall be payable for the
period of one hundred eighty (180) months.
5.5. Payments in the Event of Death Following Termination. If the
Executive shall die prior to receiving all of the applicable
benefits described in this Paragraph 5 to which the Executive
is entitled, then the Employer will make such payments to the
Executive's designated beneficiary. If a valid Beneficiary
Designation is not in effect, then the remaining amounts due
to the Executive shall be paid to the Executive's Surviving
Spouse. If the Executive leaves no Surviving Spouse, the
remaining amounts due to the Executive shall be paid to the
duly qualified personal representative, executor or
administrator of the Executive's estate.
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6. Section 280G Adjustment. The Executive acknowledges and agrees that the
parties have entered into this Agreement based upon certain financial
and tax accounting assumptions. Accordingly, with full knowledge of the
potential consequences, the Executive agrees that, notwithstanding
anything contained herein to the contrary, in the event that any
payment or benefit received or to be received by the Executive, whether
payable pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Employer (together with the Executive
Benefits, the "Total Payments"), will not be deductible (in whole or in
part) as a result of Code Section 280G or other applicable provisions
of the Code, the Total Payments shall be reduced until no portion of
the Total Payments is nondeductible as a result of Section 280G or such
other applicable provisions of the Code. For purposes of this
limitation:
(a) No portion of the Total Payments, the receipt or
enjoyment of which the Executive shall have
effectively waived in writing prior to the date of
payment of any future Executive Benefits payments,
shall be taken into account;
(b) No portion of the Total Payments shall be taken into
account, which in the opinion of the tax counsel
selected by the Employer and acceptable to the
Executive, does not constitute a "parachute payment"
within the meaning of Section 280G of the Code;
(c) Any reduction of the Total Payments shall be applied
to reduce any payment or benefit received or to be
received by the Executive pursuant to the terms of
this Agreement and any other plan, arrangement or
agreement with the Employer in the order determined
by mutual agreement of the Employer and the
Executive;
(d) Future payments shall be reduced only to the extent
necessary so that the Total Payments (other than
those referred to in clauses (a) or (b) above in
their entirety) constitute reasonable compensation
for services actually rendered within the meaning of
Section 28OG of the Code, in the opinion of tax
counsel referred to in clause (b) above; and
(e) The value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments
shall be determined by independent auditors selected
by the Employer and acceptable to the Executive in
accordance with the principles of Section 28OG of the
Code.
7. Right To Determine Funding Methods. The Employer reserves the right to
determine, in its sole and absolute discretion, whether, to what extent
and by what method, if any, to provide for the payment of the amounts
which may be payable to the Executive, the Executive's spouse or the
Executive's beneficiaries under the terms of this Agreement. In the
event that the Employer elects to fund this Agreement, in whole or in
part, through the use of life insurance or annuities, or both, the
Employer shall determine the ownership and beneficial interests of any
such policy of life insurance or annuity.
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The Employer further reserves the right, in its sole and absolute
discretion, to terminate any such policy, and any other device used to
fund its obligations under this Agreement, at any time, in whole or in
part. Consistent with Paragraph 9 below, neither the Executive, the
Executive's spouse nor the Executive's beneficiaries shall have any
right, title or interest in or to any funding source or amount utilized
by the Employer pursuant to this Agreement, and any such funding source
or amount shall not constitute security for the performance of the
Employer's obligations pursuant to this Agreement. In connection with
the foregoing, the Executive agrees to execute such documents and
undergo such medical examinations or tests which the Employer may
request and which may be reasonably necessary to facilitate any funding
for this Agreement including, without limitation, the Employer's
acquisition of any policy of insurance or annuity. Furthermore, a
refusal by the Executive to consent to, participate in and undergo any
such medical examinations or tests shall result in the immediate
termination of this Agreement and the immediate forfeiture by the
Executive, the Executive's spouse and the Executive's beneficiaries of
any and all rights to payment hereunder.
8. Claims Procedure. The Employer shall, but only to the extent necessary
to comply with ERISA, be designated as the named fiduciary under this
Agreement and shall have authority to control and manage the operation
and administration of this Agreement. Consistent therewith, the
Employer shall make all determinations as to the rights to benefits
under this Agreement. Any decision by the Employer denying a claim by
the Executive, the Executive's spouse, or the Executive's beneficiary
for benefits under this Agreement shall be stated in writing and
delivered or mailed, via registered or certified mail, to the
Executive, the Executive's spouse or the Executive's beneficiary, as
the case may be. Such decision shall set forth the specific reasons for
the denial of a claim. In addition, the Employer shall provide the
Executive, the Executive's spouse or the Executive's beneficiary with a
reasonable opportunity for a full and fair review of the decision
denying such claim.
9. Status as an Unsecured General Creditor. Notwithstanding anything
contained herein to the contrary: (i) neither the Executive, the
Executive's spouse or the Executive's designated beneficiaries shall
have any legal or equitable rights, interests or claims in or to any
specific property or assets of the Employer as a result of this
Agreement; (ii) none of the Employer's assets shall be held in or under
any trust for the benefit of the Executive, the Executive's spouse or
the Executive's designated beneficiaries or held in any way as security
for the fulfillment of the obligations of the Employer under this
Agreement; (iii) all of the Employer's assets shall be and remain the
general unpledged and unrestricted assets of the Employer; (iv) the
Employer's obligation under this Agreement shall be that of an unfunded
and unsecured promise by the Employer to pay money in the future; and
(v) the Executive, the Executive's spouse and the Executive's
designated beneficiaries shall be unsecured general creditors with
respect to any benefits which may be payable under the terms of this
Agreement.
Notwithstanding subparagraphs (i) through (v) above, the Employer and
the Executive acknowledge and agree that, in the event of a Change in
Control, and at the written request of the Executive, or in the
Employer's discretion if the Executive does not so
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request and the Employer nonetheless deems it appropriate, the Employer
shall establish, not later than the effective date of the Change in
Control, a Rabbi Trust or Multiple Rabbi Trusts (the "Trust" or
"Trusts") upon such terms and conditions as the Employer, in its sole
discretion, deems appropriate and in compliance with applicable
provisions of the Code, in order to permit the Employer to make
contributions and/or transfer assets to the Trust or Trusts to
discharge its obligations pursuant to this Agreement. The principal of
the Trust or Trusts and any earnings thereon shall be held separate and
apart from other funds of the Employer to be used exclusively for
discharge of the Employer's obligations pursuant to this Agreement and
shall continue to be subject to the claims of the Employer's general
creditors until paid to the Executive or its beneficiaries in such
manner and at such times as specified in this Agreement.
10. Discretion of Board to Accelerate Payout. Notwithstanding any of the
other provisions of this Agreement, the Board of Directors of the
Employer may, if determined in its sole and absolute discretion to be
appropriate, accelerate the payment of the amounts due under the terms
of this Agreement, provided that Executive (or Executive's spouse or
designated beneficiaries): (i) consents to the revised payout terms
determined appropriate by the Employer's Board of Directors; and (ii)
does not negotiate or in anyway influence the terms of proposed
altered/accelerated payout (said decision to be made solely by the
Employer's Board of Directors and offered to the Executive [or
Executive's spouse or designated beneficiaries] on a "take it or leave
it basis").
11. Miscellaneous.
11.1. Opportunity To Consult With Independent Advisors. The
Executive acknowledges that he has been afforded the
opportunity to consult with independent advisors of his
choosing including, without limitation, accountants or tax
advisors and counsel regarding both the benefits granted to
him under the terms of this Agreement and the (i) terms and
conditions which may affect the Executive's right to these
benefits and (ii) personal tax effects of such benefits
including, without limitation, the effects of any federal or
state taxes, Section 280G of the Code, and any other taxes,
costs, expenses or liabilities whatsoever related to such
benefits, which in any of the foregoing instances the
Executive acknowledges and agrees shall be the sole
responsibility of the Executive notwithstanding any other term
or provision of this Agreement. The Executive further
acknowledges and agrees that the Employer shall have no
liability whatsoever related to any such personal tax effects
or other personal costs, expenses, or liabilities applicable
to the Executive and further specifically waives any right for
the Executive, himself, and his heirs, beneficiaries, legal
representatives, agents, successors, and assigns to claim or
assert liability on the part of the Employer related to the
matters described above in this subparagraph 11. 1. The
Executive further acknowledges and agrees that he has read,
understands and consents to all of the terms and conditions of
this Agreement, and that he enters into this Agreement with a
full understanding of its terms and conditions.
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11.2. Arbitration of Disputes. All claims, disputes and other
matters in question arising out of or relating to this
Agreement or the breach or interpretation thereof, other than
those matters which are to be determined by the Employer in
its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the
mutual agreement of the parties, of the Judicial Arbitration
and Mediation Services, Inc. ("JAMS"). In the event JAMS is
unable or unwilling to conduct the arbitration provided for
under the terms of this Paragraph, or has discontinued its
business, the parties agree that a representative member,
selected by the mutual agreement of the parties, of the
American Arbitration Association ("AAA"), shall conduct the
binding arbitration referred to in this Paragraph. Notice of
the demand for arbitration shall be filed in writing with the
other party to this Agreement and with JAMS (or AAA, if
necessary). In no event shall the demand for arbitration be
made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of
limitations. The arbitration shall be subject to such rules of
procedure used or established by JAMS, or if there are none,
the rules of procedure used or established by AAA. Any award
rendered by JAMS or AAA shall be final and binding upon the
parties, and as applicable, their respective heirs,
beneficiaries, legal representatives, agents, successors and
assigns, and may be entered in any court having jurisdiction
thereof. The obligation of the parties to arbitrate pursuant
to this clause shall be specifically enforceable in accordance
with, and shall be conducted consistently with, the provisions
of Title 9 of Part 3 of the California Code of Civil
Procedure. Any arbitration hereunder shall be conducted in El
Centro, California, unless otherwise agreed to by the parties.
11.3. Attorney Fees. In the event of any arbitration or litigation
concerning any controversy, claim or dispute between the
parties hereto, arising out of or relating to this Agreement
or the breach hereof, or the interpretation hereof, the
prevailing party shall be entitled to recover from the
non-prevailing party reasonable expenses, attorneys' fees and
costs incurred in connection therewith or in the enforcement
or collection of any judgment or award rendered therein. The
"prevailing party" means the party determined by the
arbitrator(s) or court, as the case may be, to have most
nearly prevailed, even if such party did not prevail in all
matters, not necessarily the one in whose favor a judgment is
rendered.
11.4. Notice. Any notice required or permitted of either the
Executive or the Employer under this Agreement shall be deemed
to have been duly given, if by personal delivery, upon the
date received by the party or its authorized representative;
if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is
transmitted as reflected in the records of the party
transmitting the facsimile and upon reasonable confirmation of
such transmission; and if by mail, on the third day after
mailing via U.S. first class mail, registered or certified,
postage prepaid and return receipt requested, and addressed to
the party at the address given below for the receipt of
notices, or such changed address as may be requested in
writing by a party.
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If to the Employer
Valley Independent Bank
0000 Xxxx Xxxxxx
Xx Xxxxxx, XX 00000
If to the Executive:
______________________________
______________________________
______________________________
11.5. Assignment. Neither the Executive, the Executive's spouse, nor
any other beneficiary under this Agreement shall have any
power or right to transfer, assign, anticipate, hypothecate,
modify or otherwise encumber any part or all of the amounts
payable hereunder, nor, prior to payment in accordance with
the terms of this Agreement, shall any portion of such amounts
be: (i) subject to seizure by any creditor of any such
beneficiary, by a proceeding at law or in equity, for the
payment of any debts, judgments, alimony or separate
maintenance obligations which may be owed by the Executive,
the Executive's spouse, or any designated beneficiary; or (ii)
transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. Any such attempted assignment or
transfer shall be void and shall terminate this Agreement, and
the Employer shall thereupon have no further liability
hereunder.
11.6. Binding Effect/Merger or Reorganization. This Agreement shall
be binding upon and inure to the benefit of the Executive and
the Employer and, as applicable, their respective heirs,
beneficiaries, legal representatives, agents, successors and
assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or
sell substantially all of its assets to another corporation,
firm or person, unless and until such succeeding or continuing
corporation, firm or person agrees to assume and discharge the
obligations of the Employer under this Agreement. Upon the
occurrence of such event, the term "Employer" as used in this
Agreement shall be deemed to refer to such surviving or
successor firm, person, entity or corporation.
11.7. Nonwaiver . The failure of either party to enforce at any time
or for any period of time any one or more of the terms or
conditions of this Agreement shall not be a waiver of such
term(s) or condition(s) or of that party's right thereafter to
enforce each and every term and condition of this Agreement.
11.8. Partial Invalidity. If any term, provision, covenant, or
condition of this Agreement is determined by an arbitrator or
a court, as the case may be, to be invalid, void, or
unenforceable, such determination shall not render any other
term, provision, covenant or condition invalid, void or
unenforceable, and the Agreement shall remain in full force
and effect notwithstanding such partial invalidity.
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11.9. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties
with respect to the subject matter of this Agreement and
contains all of the covenants and agreements between the
parties with respect thereto. Each party to this Agreement
acknowledges that no other representations, inducements,
promises, or agreements, oral or otherwise, have been made by
any party, or anyone acting on behalf of any party, which are
not set forth herein, and that no other agreement, statement,
or promise not contained in this Agreement shall be valid or
binding on either party.
11.10. Modifications. Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or
such party's authorized representative.
11.11. Paragraph Headings. The paragraph headings used in this
Agreement are included solely for the convenience of the
parties and shall not affect or be used in connection with the
interpretation of this Agreement.
11.12. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict
construction will be applied against any person.
11.13. Governing Law. The laws of the State of California, other than
those laws denominated choice of law rules, shall govern the
validity, interpretation, construction and effect of this
Agreement.
IN WITNESS WHEREOF, the Employer and the Executive have executed
this Agreement on the date first above-written in the City of El Centro,
Imperial County, California.
THE EMPLOYER THE EXECUTIVE
VALLEY INDEPENDENT BANK
By:_____________________________ ______________________________________
Its:____________________________
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SCHEDULE A
CALENDAR YEAR APPLICABLE PERCENTAGE
------------- ---------------------
July 15, 1974 to December 31, 1998 60%
December 31, 1999 70%
December 31, 2000 80%
December 31, 2001 90%
December 31, 2002 100%
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SCHEDULE B
1. EXECUTIVE BENEFIT DETERMINATION
The Executive Benefits shall be determined based on the following:
(a) The Executive Benefit hereunder when calculated as a one
hundred eighty (180) month annuity for the Executive beginning
at the Benefit Commencement Date using reasonable actuarial
assumptions (as determined by the Employer in its discretion)
shall equal seventy percent (70%) of the Executives final
average compensation.
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SCHEDULE C
BENEFICIARY DESIGNATION
To the Administrator of the Valley Independent Bank Executive
Supplemental Compensation Agreement:
Pursuant to the Provisions of my Executive Supplemental Compensation
Agreement with Valley Independent Bank, permitting the designation of a
beneficiary or beneficiaries by a participant, I hereby designate the following
persons and entities as primary and secondary beneficiaries of any benefit under
said Agreement payable by reason of my death:
PRIMARY BENEFICIARY
----------------------- --------------------- ----------------------
Name Address Relationship
SECONDARY (CONTINGENT)
BENEFICIARY:
----------------------- --------------------- ----------------------
Name Address Relationship
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY
RESERVED. ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND
SECONDARY BENEFICIARIES ARE HEREBY REVOKED.
The Administrator shall pay all sums payable under the Agreement by
reason of my death to the Primary Beneficiary, if he or she survives me, and if
no Primary Beneficiary shall survive me, then to the Secondary Beneficiary, and
if no named beneficiary survives me, then the Administrator shall pay all
amounts in accordance with the terms of my Executive Supplemental Compensation
Agreement. In the event that a named beneficiary survives me and dies prior to
receiving the entire benefit payable under said Agreement, then and in that
event, the remaining unpaid benefit payable according to the terms of my
Executive Supplemental Compensation Agreement.
Dated
--------------------------- ---------------------------------
CONSENT OF THE EXECUTIVE'S SPOUSE TO THE ABOVE BENEFICIARY DESIGNATION:
I ___________________________________ being the spouse of ____________________,
after being afforded the opportunity to consult with independent counsel of my
choosing, do hereby acknowledge that I have read, agree and consent to the
foregoing Beneficiary Designation which relates to the Executive Supplemental
Compensation Agreement entered into by my spouse effective as of
____________________________, 1999. I understand that the above Beneficiary
Designation may affect certain rights which I may have in the benefits provided
for under the terms of the Executive Supplemental Compensation Agreement and in
which I may have a marital property interest.
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Dated
--------------------------- ---------------------------------
