Exhibit 99.102
NORTH VALLEY BANCORP
SALARY CONTINUATION PLAN
FOR XXXX XXXXXXX
Amended and Restated
Effective January 1, 2005
Purpose
This instrument evidences the rights of Xxxx Xxxxxxx under the North
Valley Bancorp Salary Continuation Plan.
The Plan amends and restates the Salary Continuation Agreement between
North Valley Bank and Xx. Xxxxxxx dated as of October 23, 2001 (the "Salary
Continuation Agreement").
Article 1
Definitions
Whenever used in this instrument, the following words and phrases shall
have the meanings specified:
1.1 "Change in Control" means the occurrence of any of the
following events with respect to the Company or the Employer: (i) a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or in response to any other form
or report to the regulatory agencies or governmental authorities having
jurisdiction over the Company or any stock exchange on which the Company's
shares are listed which requires the reporting of a change in control; (ii) any
merger, consolidation or reorganization of the Company or the Employer in which
the Company or the Employer does not survive; (iii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a series
of transactions) of any assets of the Company or the Employer having an
aggregate fair market value of fifty percent (50%) of the total value of the
assets of the Company or the Employer, reflected in the most recent balance
sheet of the Company or the Employer; (iv) a transaction whereby any "person"
(as such term is used in the Exchange Act or any individual, corporation,
partnership, trust or any other entity) is or becomes the beneficial owner,
directly or indirectly, of securities of Employer representing fifty percent
(50%) or more of the combined voting power of the Company's or the Employer's
then outstanding securities; (v) if in any one year period, individuals who at
the beginning of such period constitute the Board of Directors of the Company
cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's shareholders, of each
new director is approved by a vote of a least three-quarters of the directors
then still in office who were directors at the beginning of the period; (iv) a
majority of the members of the Board of Directors of the Company in office prior
to the happening of any event determines in its sole discretion that as a result
of such event there has been a change in control. Notwithstanding the foregoing
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or anything else contained herein to the contrary, there shall not be a "change
in control" for purposes of this instrument if the event which would otherwise
come within the meaning of the term "change of control" involves (a) an Employee
Stock Ownership Plan or similar plan sponsored by the Company which is the party
that acquires "control" or is the principal participant in the transaction
constituting a "change in control," as described above; or (b) the merger or
consolidation or other restructuring of an Employer with another Employer
participating in the Plan.
1.4 "Code" means the Internal Revenue Code of 1986, as amended,
and the regulations issued thereunder.
1.5 "Company" means North Valley Bancorp, and any successor.
1.6 "Effective Date" means January 1, 2005.
1.7 "Employer" means the Company and any affiliate of the Company
that adopts the Plan with the approval of the Company and that employed Xx.
Xxxxxxx, and any successor.
1.8 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.9 "Section 409A" means Code section 409A and the Treasury
regulations or other authoritative guidance issued thereunder. Whenever the
terms "subject to Section 409A" or "to the extent permitted by Section 409A" (or
any such similar reference so as to indicate that a Plan provision is subject to
Section 409A) are used, such terms shall be interpreted to mean that the
applicable Plan provision shall be effective only if and to the extent such
provision would not trigger penalty taxes or interest under Section 409A.
Article 2
Lifetime Benefits
2.3 2.1 Benefit. The Company shall pay Xx. Xxxxxxx $7,882 each month
for 180 months commencing on February 1, 2006.
Article 3
Death Benefits
3.1 Death Before Benefit Payments Commence. Subject to Section
3.4, if Xx. Xxxxxxx dies prior to the payment or commencement of his lifetime
benefit under this instrument, no benefits shall be payable under this
instrument. Rather, the Rabbi Trust shall pay to Xx. Xxxxxxx'x Trust the benefit
described in the Split Dollar Agreement and Endorsement attached as Addendum A
between the Rabbi Trust and Xx. Xxxxxxx'x Trust.
3.2 Death During Benefit Period. Subject to Section 3.4, if Xx.
Xxxxxxx dies after the benefit payments have been made or commenced under this
instrument but before receiving all such payments, no further benefits shall be
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payable under this instrument. Rather, the Rabbi Trust shall pay to Xx.
Xxxxxxx'x Trust the benefit described in the Split Dollar Agreement and
Endorsement attached as Addendum A between the Rabbi Trust and Xx. Xxxxxxx'x
Trust.
3.3 Death After Benefit Period. If Xx. Xxxxxxx dies after the
benefit payments have all been made under this instrument, no further benefits
shall be payable under this instrument and no benefits shall be payable under
the Split Dollar Agreement and Endorsement attached as Addendum A between the
Rabbi Trust and Xx. Xxxxxxx'x Trust.
3.4 Death Benefits in the Absence or Inadequacy of Split Dollar
Agreement. If the proceeds under Xx. Xxxxxxx'x Split Dollar Agreement and
Endorsement are restricted due to the inadequacy of Net Death Proceeds under the
policy(ies) held thereunder (as defined in the Split Dollar Agreement) or are
insufficient because the Company has amended or terminated the Split Dollar
Agreement without Xx. Xxxxxxx'x consent, then any such shortfall shall be paid
by the Company in a present value lump sum to the beneficiaries identified under
the Split Dollar Agreement, together with additional payments to such
beneficiaries to make them whole for any additional income or estate taxes that
are payable as a result of the monies being distributed under this instrument
rather than under the Split Dollar Agreement; provided, however, that the
additional payments for taxes shall only be due if the inadequacy of Net Death
Proceeds is caused by the Company's failure to exercise reasonable care to
ensure the adequacy of such Net Death Proceeds or is caused by the Company
amending or terminating the Split Dollar Agreement without Xx. Xxxxxxx'x
consent.
Article 4
Claims and Review Procedures
4.1 Claims Procedure. This Section 4.1 is based on final
regulations issued by the Department of Labor and published in the Federal
Register on November 21, 2000 and codified at 29 C.F.R. ss.2560.503-1. If any
provision of this Section 4.1 conflicts with the requirements of those
regulations, the requirements of those regulations will prevail.
(a) Initial Claim. Xx. Xxxxxxx or any beneficiary or other person
that believes he or she is entitled to any benefit (a "Claimant") under this
instrument may file a claim with the Company. The Company will review the claim
itself or appoint another individual or entity to review the claim.
(i) Benefit Claims. The Claimant will be notified within
ninety (90) days after the claim is filed whether the claim is allowed or
denied, unless the Claimant receives written notice from the Company or
appointee of the Company before the end of the ninety (90) day period stating
that special circumstances require an extension of the time for decision, such
extension not to extend beyond the day which is one hundred eighty (180) days
after the day the claim is filed.
(ii) Xxxxxx and Content of Denial of Initial Claims. If
the Company denies a claim, it must provide to the Claimant, in writing or by
electronic communication:
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(A) The specific reasons for the denial;
(B) A reference to the Plan provision or
insurance contract provision upon which the denial is based;
(C) A description of any additional information
or material that the Claimant must provide in order to perfect the claim;
(D) An explanation of why such additional
material or information is necessary;
(E) Notice that the Claimant has a right to
request a review of the claim denial and information on the steps to be taken if
the Claimant wishes to request a review of the claim denial; and
(F) A statement of the Claimant's right to bring
a civil action under section 502(a) of ERISA following a denial on review of the
initial denial.
(b) Review Procedures.
(i) Benefit Claims. A request for review of a
denied claim must be made in writing to the Company within sixty (60) days after
receiving notice of denial. The decision upon review will be made within sixty
(60) days after the Company's receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision will be rendered not later than one hundred twenty (120) days after
receipt of a request for review. A notice of such an extension must be provided
to the Claimant within the initial sixty (60) day period and must explain the
special circumstances and provide an expected date of decision.
The reviewer will afford the Claimant an
opportunity to review and receive, without charge, all relevant documents,
information and records and to submit issues and comments in writing to the
Company. The reviewer will take into account all comments, documents, records
and other information submitted by the Claimant relating to the claim regardless
of whether the information was submitted or considered in the initial benefit
determination.
(ii) Xxxxxx and Content of Notice of Decision on
Review. Upon completion of its review of an adverse initial claim determination,
the Company will give the Claimant, in writing or by electronic notification, a
notice containing:
(A) its decision;
(B) the specific reasons for the
decision;
(C) the relevant Plan provisions or
insurance contract provisions on which its decision is based;
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(D) a statement that the Claimant is
entitled to receive, upon request and without charge, reasonable access to, and
copies of, all documents, records and other information in the Plan's files
which is relevant to the Claimant's claim for benefits;
(E) a statement describing the
Claimant's right to bring an action for judicial review under ERISA section
502(a); and
(F) if an internal rule, guideline,
protocol or other similar criterion was relied upon in making the adverse
determination on review, a statement that a copy of the rule, guideline,
protocol or other similar criterion will be provided without charge to the
Claimant upon request.
(c) Calculation of Time Periods. For purposes of the time
periods specified in this Section, the period of time during which a benefit
determination is required to be made begins at the time a claim is filed in
accordance with the Plan's procedures without regard to whether all the
information necessary to make a decision accompanies the claim. If a period of
time is extended due to a Claimant's failure to submit all information
necessary, the period for making the determination will be tolled from the date
the notification is sent to the Claimant until the date the Claimant responds.
(d) Failure of Company to Follow Procedures. If the
Company fails to follow the claims procedures required by this Section, a
Claimant will be deemed to have exhausted the administrative remedies available
under the Plan and will be entitled to pursue any available remedy under ERISA
section 502(a) on the basis that the Company (on behalf of the Plan) has failed
to provide a reasonable claims procedure that would yield a decision on the
merits of the claim.
(e) Failure of Claimant to Follow Procedures. A
Claimant's compliance with the foregoing provisions of this Section is a
mandatory prerequisite to the Claimant's right to commence any legal action with
respect to any claim for benefits under the Plan.
Article 5
Miscellaneous
5.1 Binding Effect. This instrument shall bind Xx. Xxxxxxx and the
Company, and their beneficiaries, survivors, executors, successors,
administrators and transferees.
5.2 Amendment. The Company may amend this instrument only with Xx.
Xxxxxxx'x express written consent.
5.3 Non-Transferability. Benefits under this instrument cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner.
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5.4 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 under this instrument. Upon the occurrence of such event, the term
"Company" as used in this instrument shall be deemed to refer to the successor
or survivor company.
7.5 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this instrument.
5.6 Applicable Law. This instrument and all rights hereunder shall
be governed by the laws of California, except to the extent preempted by the
laws of the United States of America.
5.7 Unfunded Arrangement. Xx. Xxxxxxx is a general unsecured
creditor of the Company for the payment of benefits under this instrument. The
benefits represent the mere promise by the Company to pay such benefits. The
rights to benefits are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on Xx. Xxxxxxx'x life is a general asset of the Company
to which Xx. Xxxxxxx has no preferred or secured claim.
5.8 Entire Agreement. This instrument constitutes the entire
agreement between the Company and Xx. Xxxxxxx as to the subject matter hereof.
The terms of this instrument shall supersede, and Xx. Xxxxxxx shall have no
rights under, his prior Salary Continuation Agreement and the general terms of
the Plan document to which this instrument relates. This instrument shall for
all purposes be deemed to constitute a full discharge of the Company's
obligation to Xx. Xxxxxxx under the Plan and under his prior Salary Continuation
Agreement, and any conflicts between this instrument and the Plan or his prior
Salary Continuation Agreement shall be controlled by this instrument. No rights
are granted to Xx. Xxxxxxx by virtue of this instrument other than those
specifically set forth herein.
5.7 Reimbursement of Expenses in Enforcing Rights. All reasonable
costs and expenses, including, without limitation, fees and disbursements of
actuaries, accountants and counsels incurred by Xx. Xxxxxxx in seeking in good
faith to enforce rights pursuant to this instrument shall be paid on behalf of
or reimbursed to Xx. Xxxxxxx promptly by the Company. Except in the case of a
Change in Control, Xx. Xxxxxxx shall be responsible to reimburse the Company for
amounts expended by the Company under this Section if an enforcement action is
initiated by Xx. Xxxxxxx hereunder and Xx. Xxxxxxx does not substantially
prevail on the merits of such enforcement action.
5.8 Prohibited Acceleration/Distribution Timing. This Section
shall take precedence over any other provision of this instrument to the
contrary. No provision of this instrument shall be followed if following the
provision would result in the acceleration of the time or schedule of any
payment from the Plan (i) as would require income tax to Xx. Xxxxxxx prior to
the date on which the amount is distributable to or on behalf of Xx. Xxxxxxx
hereunder or (ii) which would result in penalties to Xx. Xxxxxxx under Section
409A. In addition, if the timing of any distribution election would result in
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any tax or other penalty (other than ordinarily payable Federal, state or local
income or payroll taxes), which tax or penalty can be avoided by payment of the
distribution at a later time, then the distribution shall be made (or commence,
as the case may be) on (or as soon as practicable after) the first date on which
such distributions can be made (or commence) without such tax or penalty.
IN WITNESS WHEREOF, a duly authorized officer of the Company and Xx.
Xxxxxxx have signed this instrument on this 28th day of December, 2005.
COMPANY:
NORTH VALLEY BANCORP
By /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
Title President and CEO
/s/ XXXX XXXXXXX
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XXXX XXXXXXX
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