EXHIBIT 10.29
AMENDED AND RESTATED
TEMECULA VALLEY BANK, N.A.
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is adopted this 30th day of September, 2004, by and
between the TEMECULA VALLEY BANK, N.A., a national banking association located
in Temecula, California (the "Company") and DONALD A. PITCHER (the "Executive"),
amending, restating and replacing the Amended and Restated Temecula Valley Bank,
N.A., Salary Continuation Agreement dated January 1, 2002 which previously
amended and restated the Temecula Valley Bank, N.A., Salary Continuation
Agreement dated January 1, 2000.
INTRODUCTION
WITNESSETH:
WHEREAS, the Executive is in the employ of the Company, serving as its
Senior Vice President and Chief Financial Officer; and
WHEREAS, the experience, knowledge of the affairs of the Company, and
reputation and contacts in the industry of the Executive are so valuable that
assurance of the Executive's continued service is essential for the future
growth and profits of the Company, and it is in the best interest of the Company
to arrange terms of continued employment for the Executive so as to reasonably
assure the Executive's remaining in the Company's employment during the
Executive's lifetime or until the age of retirement; and
WHEREAS, it is the desire of the Company that the Executive's services be
retained as herein provided; and
WHEREAS, the Executive is willing to continue in the employ of the Company
provided the Company agrees to pay to the Executive or the Executive's
beneficiaries certain benefits in accordance with the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the services to be performed in the
future, as well as the mutual promises and covenants herein contained, it is
agreed as follows:
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
1.1 "Change of Control" means
(a) 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
(b) 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
(c) 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 (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
(d) 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 (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
(e) 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 1.1.
Notwithstanding the above, certain transfers are permitted within Section
318 of the Code and such transfers shall not be deemed a Change of Control under
this Section 1.1.
1.2 "Code" means the Internal Revenue Code of 1986, as amended.
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.
1.4 "Early Termination" means the Termination of Employment before Normal
Retirement Age for reasons other than death, Disability, Termination for Cause
or following a Change of Control.
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1.5 "Early Termination Date" means the month, day and year in which Early
Termination occurs.
1.6 "Effective Date" means January 1, 2004.
1.7 "Normal Retirement Age" means the Executive's 65th birthday.
1.8 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Employment.
1.9 "Plan Year" means a twelve-month period commencing on January 1 and
ending on December 31 of each year. The initial Plan Year shall commence on the
effective date of this Agreement.
1.10 "Termination for Cause" See Section 5.1.
1.11 "Termination of Employment" means that the Executive ceases to be
employed by the Company for any reason whatsoever other than by reason of a
leave of absence, which is approved by the Company. For purposes of this
Agreement, if there is a dispute over the employment status of the Executive or
the date of the Executive's Termination of Employment, the Company shall have
the sole and absolute right to determine the termination date.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. Upon Termination of Employment on or after
the Normal Retirement Age for reasons other than death, the Company shall pay to
the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is
$60,000 (Sixty Thousand Dollars). The Board of Directors may in its sole and
absolute discretion unilaterally increase the annual benefit amount at the end
of each Plan Year from the date of this Agreement to the Executive's Normal
Retirement Date. If the Board of Directors increase this annual benefit, then
the Schedule A attached hereto shall also be recalculated to increase the
benefits under Article 2 of this Agreement.
2.1.2 Payment of Benefit. The Company shall pay the annual benefit to the
Executive in 12 equal monthly installments payable on the first day of each
month commencing with the month following the Executive's Normal Retirement Age.
The Company shall pay this annual benefit to the Executive for 15 years.
2.1.2.1 Lump Sum Option. At any time after installment payments have
commenced under Section 2.1.2 of this Agreement, Executive may petition the
Board or the Plan Administrator to receive the unpaid balance of the Normal
Retirement Benefit, in lieu of installment payments, in a present value lump
sum. Such petition shall be submitted to the Board, or the Plan Administrator,
in writing not less than 13 months prior to the date on which the Executive
wishes to receive the lump sum distribution.
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2.1.2.2 Payment of Lump Sum. Subject to approval by the Board or the Plan
Administrator, the Company shall pay the lump sum to the Executive within 30
days after the designated payment date requested by the Executive, less any
applicable taxes or withholding required by state or federal law, and less a 7%
penalty imposed by the Company for the right to receive the Normal Retirement
Benefit in a lump sum.
2.1.2.3 Calculation of Lump Sum Payment. Calculation of any lump sum
payable under this Section 2.1.2.1 shall be the present value of the Normal
Retirement Benefit based upon 15 years of monthly installment payments, which
are to be calculated commencing with the date of the first payment received by
the Executive under Section 2.1 of this Agreement, less any monthly payments
already received by the Executive under Section 2.1 of this Agreement.
2.1.3 Benefit Increases. Commencing on the first anniversary of
the first benefit payment, and continuing on each subsequent anniversary,
the Company's Board of Directors, in its sole discretion, may increase the
benefit.
2.2 Early Termination Benefit. Upon Early Termination, the Company shall
pay to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the Early
Termination amount set forth in Schedule A for the Plan Year ending immediately
prior to the Early Termination Date, except, however, the Executive shall not be
entitled to any benefit if he voluntarily terminates his employment prior to the
end of the fifth Plan Year. Any increase in the annual benefit under Section 2.1
shall require the recalculation of this benefit as set forth in Schedule A.
2.2.2 Payment of Benefit. The Company shall pay the annual benefit to the
Executive in 12 equal monthly installments payable on the first day of each
month commencing with the month following the Executive's Normal Retirement
Date. The Company shall pay this annual benefit to the Executive for 15 years.
2.3 Disability Benefit. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Company shall pay to the
Executive the benefit described in this Section 2.3 in lieu of any other benefit
under this Agreement.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Disability amount set forth in Schedule A for the Plan Year ending immediately
prior to the date in which the Termination of Employment occurs. Any increase in
the annual benefit under Section 2.1 shall require the recalculation of this
benefit amount as set forth in Schedule A.
2.3.2 Payment of Benefit. The Company shall pay the annual benefit to the
Executive in 12 equal monthly installments payable on the first day of each
month commencing with the month following Termination of Employment. The Company
shall pay this annual benefit to the Executive for 15 years.
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2.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Executive the benefit described in this Section 2.4 in lieu of any
other benefit under this Agreement.
2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the Change
of Control Lump Sum set forth in Schedule A for the Plan Year ending immediately
prior to the date in which Termination of Employment occurs, determined by
vesting the Executive one hundred percent (100%) in the present value of the
stream of payments of the Normal Retirement Benefit described in Section 2.1.
Any increase in the annual benefit under Section 2.1 shall require the
recalculation of this benefit as set forth in Schedule A.
2.4.2 Payment of Benefit. The company shall pay the benefit to the
Executive in a lump sum within 60 days of a Change of Control.
2.4.3 How Change of Control Benefit Determined. In determining the Change
of Control benefit under this Section 2.4, Executive shall receive a lump sum
payment which is calculated to be the present value of the Normal Retirement
Benefit based upon 15 years of monthly installment payments, which are to be
calculated commencing with Executive's Normal Retirement Age and ending 15 years
later.
Article 3
Death Benefits
The Company shall not pay a death benefit under this Agreement. A death
benefit may be provided according to the terms of a separate Split Dollar
Agreement entered into by the Company and the Executive.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and received by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incapacity,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
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Article 5
General Limitations
5.1 Termination for Cause. 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:
(a) any act of embezzlement, fraud, breach of fiduciary duty or dishonesty;
(b) deliberate or repeated disregard of the policies and rules of Company
as adopted by Company's Board of Directors;
(c) unauthorized use or disclosure of any of the trade secrets or
confidential information of Company;
(d) competition with Company, inducement of any customer of the Company to
breach a contract with the Company, or inducement of any principal for whom the
Company acts as agent to terminate such agency relationship;
(e) gross negligence adversely impacting the Company; or
(f) willful breach of this Agreement or any other willful misconduct.
5.2 Competition After Termination of Employment. No benefits shall be
payable if the Executive, without the prior written consent of the Company,
engages in, becomes interested in, directly or indirectly, as a sole proprietor,
as a partner in a partnership, or as a substantial shareholder in a corporation,
or becomes associated with, in the capacity of employee, director, officer,
principal, agent, trustee or in any other capacity whatsoever, any enterprise
conducted in the trading area (a 50 mile radius) of the business of the Company
within 2 years of Termination of Employment, which enterprise is, or may deemed
to be, competitive with any business carried on by the Company as of the date of
termination of the Executive's employment or his retirement. This section shall
not apply following a Change of Control.
5.3 Suicide or Misstatement. No benefits shall be payable if the
Executive commits suicide within two years after the date of this Agreement, or
if the Executive has made any material misstatement of fact on any application
for life insurance purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. Any person or entity who has not received benefits
under the Plan 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.
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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 Plan 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 Plan'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.
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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 Plan 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).
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, successors,
administrators and transferees.
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 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of California, except to the extent preempted
by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. 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 the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
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8.7 Recovery of Estate Taxes. If the Executive's gross estate for federal
estate tax purposes includes any amount determined by reference to and on
account of this Agreement, and if the beneficiary is other than the Executive's
estate, then the Executive's estate shall be entitled to recover from the
beneficiary receiving such benefit under the terms of the Agreement, an amount
by which the total estate tax due by the Executive's estate, exceeds the total
estate tax which would have been payable if the value of such benefit had not
been included in the Executive's gross estate. If there is more than one person
receiving such benefit, the right of recovery shall be against each such person.
In the event the beneficiary has a liability hereunder, the beneficiary may
petition the Company for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.
8.8 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.
8.9 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting for the
Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
8.10 Named Fiduciary. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company shall be the named fiduciary
and plan 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 a duly authorized Company officer
consent to this Agreement.
EXECUTIVE: COMPANY:
TEMECULA VALLEY BANK, N.A.
__________________________________ By ___________________________________
Donald Pitcher
Title _________________________________
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BENEFICIARY DESIGNATION
TEMECULA VALLEY BANK, N.A.
AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT
I, Donald Pitcher, designate the following as beneficiary of benefits under the
Agreement payable following my death:
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Primary:
- ----------------------------------------------------------- -----%
- ----------------------------------------------------------- -----%
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Contingent:
- ----------------------------------------------------------- -----%
- ----------------------------------------------------------- -----%
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Notes:
o Please PRINT CLEARLY or TYPE the names of the beneficiaries.
o To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.
o To name your estate as beneficiary, please write "Estate of _[your
name]_".
o Be aware that none of the contingent beneficiaries will receive
anything unless ALL of the primary beneficiaries predecease you.
I understand that I may change these beneficiary designations by delivering a
new written designation to the Company, which shall be effective only upon
receipt and acknowledgment by the Company prior to my death. I further
understand that the designations will be automatically revoked if the
beneficiary predeceases me, or, if I have named my spouse as beneficiary and our
marriage is subsequently dissolved.
Name: _______________________________
Signature: _______________________________ Date: _______
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SPOUSAL CONSENT (Required if Spouse not named beneficiary):
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I consent to the beneficiary designation above, and acknowledge that if I am
named beneficiary and our marriage is subsequently dissolved, the designation
will be automatically revoked.
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Spouse Name: _______________________________
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Signature: _______________________________ Date: _______
Received by the Company this ________ day of ______________, 2___
By: _________________________________
Title: _____________________________