EXHIBIT 10.23
FIRST AMENDMENT
TO THE
VALLEY INDEPENDENT BANK
AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT
FOR
XXXXX X. XXXXXXX
THIS AMENDMENT is adopted this 1st day of July, 2002, by and between
VALLEY INDEPENDENT BANK, located in El Centro, California (the "Company") and
XXXXX X. XXXXXXX (the "Executive").
The Company and the Executive executed the VALLEY INDEPENDENT BANK
AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT on November 13, 2000 (the
"Agreement"). The undersigned hereby amends, in part, said Agreement to update
the Executive's Normal Retirement Benefit according to the terms of Section
2.1.1 of the Agreement, which will also change the amounts on Schedule A
attached to said Agreement, to clarify the Change of Control and Death Benefit
and to update the Agreement for recent regulatory changes. Therefore, the
following revisions shall be made:
Article 1.3 of the Agreement shall be deleted in its entirety and
replaced by Article 1.3 below.
1.3 "Disability" means the Executive suffering a sickness, accident or
injury which has been determined by the carrier of any individual or
group-disability insurance policy covering the Executive, or by the Social
Security Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Company of the
carrier's or Social Security Administration's determination upon the request of
the Company.
Article 2.1.1 of the Agreement shall be deleted in its entirety and
replaced by Article 2.1.1 below.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1
is $170,448 (One Hundred Seventy Thousand Four Hundred Forty-eight
Dollars). Commencing at the end of the first Plan Year, and each Plan
Year thereafter, the annual benefit shall be increased 6 percent from the
previous Plan Year to a projected annual benefit of $256,291 (Two Hundred
Fifty-six Thousand Two Hundred Ninety-one Dollars) at Normal Retirement
Age. Each February this benefit shall be reviewed and any additional
increase in the annual benefit shall require the recalculation of
Schedule A.
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Article 2.4.1 of the Agreement shall be deleted in its entirety and
replaced by Article 2.4.1 below.
2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the
Change of Control Annual Benefit set forth in Schedule A for the Plan Year in
which Termination of Employment occurs, determined by vesting the Executive in
the Normal Retirement Benefit Level for the current Plan Year.
Article 2.4.4 below shall be added to the Agreement.
2.4.4 Benefit Increases. Commencing on the first anniversary of
the first benefit payment, and continuing on each subsequent anniversary,
the Company's Board of Directors shall increase this Change of Control
annual benefit by 3 percent (3%).
Article 3.1 of the Agreement shall be deleted in its entirety and
replaced by Article 3.1 below.
3.1 Death Benefit. The Company shall pay to the Executive's beneficiary
the death benefit described in the Split Dollar Agreement and Endorsement
attached as Addendum A between the Company and the Executive.
Articles 6.1 and 6.2 of the Agreement shall be deleted in its entirety
and replaced by Articles 6.1 and 6.2 below.
6.1 Claims Procedure. Any Executive or beneficiary who has not received
benefits under this Agreement that he or she believes should be paid
("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:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement
on which the denial is based,
(c) A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation
of why it is needed,
(d) An explanation of the Agreement's review procedures and
the time limits applicable to such procedures, and
56
(e) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a) following an adverse benefit
determination on review.
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:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement
on which the denial is based,
(c) 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
(d) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
Schedule A of the Agreement shall be deleted in its entirety and replaced
by the attached Schedule A.
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IN WITNESS OF THE ABOVE, the Executive and the Company hereby consent to
this First Amendment.
EXECUTIVE: VALLEY INDEPENDENT BANK
/s/ XXXXX X. XXXXXXX BY /s/ XXXXXX X. XXXX
-------------------------------- ------------------------------------
XXXXX X. XXXXXXX
TITLE PRESIDENT & CEO
--------------------------------
58
SCHEDULE A
FIRST AMENDMENT TO THE
VALLEY INDEPENDENT BANK
AMENDED AND RESTATED
SALARY CONTINUATION AGREEMENT
XXXXX X. XXXXXXX
----------------------------- ---------------------------------------------------------------------------
EARLY DISABILITY CHANGE OF
EARLY TERMINATION ANNUAL CONTROL
PLAN TERMIN- ANNUAL BENEFIT ANNUAL
YEAR ATION BENEFIT PAYABLE BENEFIT
ENDING BENEFIT ACCRUAL VESTING PAYABLE WITHIN PAYABLE
DECEMBER LEVEL BALANCE SCHEDULE IMMEDIATELY ONE YEAR IMMEDIATELY
----------------------------- ---------------------------------------------------------------------------
Rollover 302,904
----------------------------- ---------------------------------------------------------------------------
2002 170,448 390,661 80% 136,358 256,291 170,448
----------------------------- ---------------------------------------------------------------------------
2003 180,675 592,526 90% 162,608 256,291 180,675
----------------------------- ---------------------------------------------------------------------------
2004 191,515 831,908 100% 191,515 256,291 191,515
----------------------------- ---------------------------------------------------------------------------
2005 203,006 1,119,093 100% 203,006 256,291 203,006
----------------------------- ---------------------------------------------------------------------------
2006 215,187 1,469,637 100% 215,187 256,291 215,187
----------------------------- ---------------------------------------------------------------------------
2007 228,098 1,910,256 100% 228,098 256,291 228,098
----------------------------- ---------------------------------------------------------------------------
2008 241,784 2,500,507 100% 241,784 256,291 241,784
----------------------------- ---------------------------------------------------------------------------
May 2009* 256,291 2,928,249 100% 256,291 256,291 256,291
----------------------------- ---------------------------------------------------------------------------
*Final Plan Year ends in the month in which Normal Retirement Age is attained.
Assumes an implementation date of July 1, 2002. The first line of calculations
reflects 6 months of data, July 2002 through December 2002.
Benefit amount based on a beginning compensation of $170,448 inflating at 6.00%
each year to $256,291 at retirement. Annual Benefit payment of $256,291 is 100%
of projected final compensation. Benefit amount also includes a 3.00% guaranteed
inflator during the payout period.
59
FIRST AMENDMENT
TO THE
VALLEY INDEPENDENT BANK
SPLIT DOLLAR AGREEMENT
FOR
XXXXX X. XXXXXXX
THIS AMENDMENT is adopted this 1st day of July, 2002, by and between
VALLEY INDEPENDENT BANK, located in El Centro, California (the "Company") and
XXXXX X. XXXXXXX (the "Executive").
The Company and the Executive executed the VALLEY INDEPENDENT BANK SPLIT
DOLLAR AGREEMENT and SPLIT DOLLAR POLICY ENDORSEMENT on November 13, 2000 (the
"Agreement"). The undersigned hereby amends, in part, said Agreement to update
the split dollar death benefit under the Agreement and to update the Agreement
for recent regulatory changes. Therefore, the following revisions shall be made:
Article 2.2 of the Agreement shall be deleted in its entirety and
replaced by Article 2.2 below.
2.2 Executive's Interest. The Executive shall have the right to
designate the beneficiary of death proceeds of the Policy in the amount
of $2,928,249. The Executive shall also have the right to elect and
change settlement options that may be permitted.
Articles 6.1 and 6.2 of the Agreement shall be deleted in its entirety
and replaced by Articles 6.1 and 6.2 below.
6.1 Claims Procedure. Any Executive or beneficiary who has not received
benefits under this Agreement that he or she believes should be paid
("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
60
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:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement
on which the denial is based,
(c) A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation
of why it is needed,
(d) An explanation of the Agreement's review procedures and
the time limits applicable to such procedures, and
(e) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a) following an adverse benefit
determination on review.
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:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement
on which the denial is based,
61
(c) 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
(d) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
The Split Dollar Policy Endorsement shall be replaced by the attached
Split Dollar Policy Endorsement.
IN WITNESS OF THE ABOVE, the Executive and the Company hereby consent to
this First Amendment.
EXECUTIVE: VALLEY INDEPENDENT BANK
/s/ XXXXX X. XXXXXXX BY /s/ XXXXXX X. XXXX
-------------------------------- ------------------------------------
XXXXX X. XXXXXXX
TITLE PRESIDENT & CEO
---------------------------------
62
ADDENDUM A SPLIT DOLLAR POLICY ENDORSEMENT
VALLEY INDEPENDENT BANK SPLIT DOLLAR AGREEMENT
Policy No. 00-000-000 and 00-000-000 Insured: Xxxxx X. Xxxxxxx
Supplementing and amending the application for insurance to Northwestern Mutual
Life Insurance Company (the "Insurer"), the applicant requests and directs that:
BENEFICIARIES
1. VALLEY INDEPENDENT BANK, a state-chartered commercial bank located in
El Centro, California (the "Company"), shall be the beneficiary of death
proceeds remaining after payment is made pursuant to paragraph (2) below.
2. The beneficiary of death proceeds in the amount of $2,928,249 shall be
designated by the Insured or the Insured's transferee.
OWNERSHIP
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his rights and interests in the Policy with respect to that portion of the death
proceeds designated in paragraph (2) of this endorsement, and to exercise all
settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a
63
full discharge and release therefore to the Insurer. The owner accepts and
agrees to this split dollar endorsement.
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at El Centro, California, this 1st day of July, 2002.
VALLEY INDEPENDENT BANK
By /s/ Xxxxxx X. Xxxx
-----------------------------
Title President & CEO
--------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship and Social Security Number: ________________________________
Contingent Beneficiary (if the Primary is deceased): __________________________
Relationship and Social Security Number: ________________________________
Signed at El Centro, California, this 1st day of July, 2002.
THE INSURED:
/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
64
FIRST AMENDMENT
TO THE
VALLEY INDEPENDENT BANK
EXECUTIVE BONUS AGREEMENT
FOR
XXXXX X. XXXXXXX
THIS AMENDMENT is adopted this 1st day of July, 2002, by and between
VALLEY INDEPENDENT BANK, located in El Centro, California (the "Company") and
XXXXX X. XXXXXXX (the "Executive").
The Company and the Executive executed the VALLEY INDEPENDENT BANK
EXECUTIVE BONUS AGREEMENT on November 13, 2000 (the "Agreement"). The
undersigned hereby amends, in part, said Agreement to define the Bonus Award in
lieu of a schedule that was previously attached to the Agreement and update for
recent regulatory changes. Therefore, the following revisions shall be made:
Article 1.4 of the Agreement shall be deleted in its entirety and
replaced by Article 1.4 below.
1.4 "Disability" means the Executive suffering a sickness, accident or
injury which has been determined by the carrier of any individual or
group-disability insurance policy covering the Executive, or by the Social
Security Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Company of the
carrier's or Social Security Administration's determination upon the request of
the Company.
Article 2.1.1 of the Agreement shall be deleted in its entirety and
replaced by Article 2.1.1 below.
1.1 Bonus Award. The Company shall pay the Executive a cash Bonus for
each Plan Year until the Executive's death unless this Agreement is terminated.
The amount of the bonus shall be equal to the Executive's economic benefit under
a separate Split Dollar Agreement dated November 13, 2000, between the Executive
and the Company, divided by one minus the Company's combined marginal income tax
rate for the calendar year immediately preceding such payment. The Company shall
pay such Bonus award prior to December 31 of each year.
Article 5 of the Agreement shall be deleted in its entirety and replaced
by Article 5 below.
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive. However, this Agreement will
automatically terminate upon the termination of the separate Split Dollar
Agreement executed November 13, 2000, between the Executive and the Company.
The following Article 7 shall be added to the Agreement.
65
Article 7
Claims and Review Procedure
7.1 Claims Procedure. Any Executive or beneficiary who has not received
benefits under this Agreement that he or she believes should be paid
("claimant") shall make a claim for such benefits as follows:
7.1.1 Initiation - Written Claim. The claimant initiates a claim
by submitting to the Company a written claim for the benefits.
7.1.2 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.
7.1.3 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:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement
on which the denial is based,
(c) A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation
of why it is needed,
(d) An explanation of the Agreement's review procedures and
the time limits applicable to such procedures, and
(e) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a) following an adverse benefit
determination on review.
7.2 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:
7.2.1 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.
7.2.2 Additional Submissions - Information Access. The claimant
shall then have the opportunity to submit written comments, documents,
records and other information relating to
66
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.
7.2.3 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.
7.2.4 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.
7.2.5 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:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement
on which the denial is based,
(c) 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
(d) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
Schedule A of the Agreement shall be deleted in its entirety.
IN WITNESS OF THE ABOVE, the Executive and the Company hereby consent to
this First Amendment.
EXECUTIVE: VALLEY INDEPENDENT BANK
/s/ XXXXX X. XXXXXXX BY /s/ XXXXXX X. XXXX
-------------------------------- ------------------------------------
XXXXX X. XXXXXXX
TITLE PRESIDENT & CEO
---------------------------------
67
