EX-10.24 6 v83414exv10w24.txt EXHIBIT 10.24 EXHIBIT 10.24 SECOND AMENDMENT TO THE VALLEY INDEPENDENT BANK AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT FOR JACK BRITTAIN, JR. THIS AMENDMENT is adopted this 1st day of July, 2002, by and between VALLEY INDEPENDENT BANK, located in El Centro, California (the "Company") and JACK BRITTAIN, JR. (the "Executive"). The Company and the Executive executed the VALLEY INDEPENDENT BANK AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT on November 13, 2000, and FIRST AMENDMENT thereto on September 5, 2001 (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 Agreement regarding 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 $177,840 (One Hundred Seventy-seven Thousand Eight Hundred Forty 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 $283,450 (Two Hundred Eighty-three Thousand Four Hundred Fifty 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. 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 68 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 (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. 69 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. IN WITNESS OF THE ABOVE, the Executive and the Company hereby consent to this Second Amendment. 70 EXECUTIVE: VALLEY INDEPENDENT BANK /s/ JACK BRITTAIN, JR BY /s/ DENNIS L. KERN -------------------------------- ------------------------------------ JACK BRITTAIN, JR. TITLE PRESIDENT & CEO --------------------------------- 71 SCHEDULE A SECOND AMENDMENT TO THE VALLEY INDEPENDENT BANK AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT JACK BRITTAIN, JR.
----------------------------------------------------------------------------------------------------- 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 282,815 ----------------------------------------------------------------------------------------------------- 2002 177,840 359,274 90% 160,056 283,450 177,840 ----------------------------------------------------------------------------------------------------- 2003 188,510 534,796 100% 188,510 283,450 188,510 ----------------------------------------------------------------------------------------------------- 2004 199,821 742,106 100% 199,821 283,450 199,821 ----------------------------------------------------------------------------------------------------- 2005 211,810 989,022 100% 211,810 283,450 211,810 ----------------------------------------------------------------------------------------------------- 2006 224,519 1,286,504 100% 224,519 283,450 224,519 ----------------------------------------------------------------------------------------------------- 2007 237,990 1,651,057 100% 237,990 283,450 237,990 ----------------------------------------------------------------------------------------------------- 2008 252,269 2,110,717 100% 252,269 283,450 252,269 ----------------------------------------------------------------------------------------------------- 2009 267,406 2,726,184 100% 267,406 283,450 267,406 ----------------------------------------------------------------------------------------------------- June 2010* 283,450 3,238,556 100% 283,450 283,450 283,450 -----------------------------------------------------------------------------------------------------
*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 $177,840 inflating at 6.00% each year to $283,450 at retirement. Annual Benefit payment of $283,450 is 100% of projected final compensation. Benefit amount also includes a 3.00% guaranteed inflator during the payout period. 72 FIRST AMENDMENT TO THE VALLEY INDEPENDENT BANK SPLIT DOLLAR AGREEMENT FOR JACK BRITTAIN, JR. THIS AMENDMENT is adopted this 1st day of July, 2002, by and between VALLEY INDEPENDENT BANK, located in El Centro, California (the "Company") and JACK BRITTAIN, JR. (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 $3,238,556. 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 73 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 (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: 74 (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). 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/ JACK BRITTAIN, JR. BY /s/ DENNIS L. KERN -------------------------------- ------------------------------------ JACK BRITTAIN, JR. TITLE PRESIDENT & CEO --------------------------------- 75 ADDENDUM A SPLIT DOLLAR POLICY ENDORSEMENT VALLEY INDEPENDENT BANK SPLIT DOLLAR AGREEMENT Policy No. 15-121-225 and 15-067-915 Insured: Jack Brittain, Jr. 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 $3,238,556 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 76 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/ Dennis L. Kern -------------------------------- 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/ Jack Brittain, Jr. -------------------------------- Jack Brittain, Jr. 77 FIRST AMENDMENT TO THE VALLEY INDEPENDENT BANK EXECUTIVE BONUS AGREEMENT FOR JACK BRITTAIN, JR. THIS AMENDMENT is adopted this 1st day of July, 2002, by and between VALLEY INDEPENDENT BANK, located in El Centro, California (the "Company") and JACK BRITTAIN, JR. (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. 78 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 79 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/ JACK BRITTAIN, JR. BY /s/ DENNIS L. KERN -------------------------------- ------------------------------------ JACK BRITTAIN, JR. TITLE PRESIDENT & CEO --------------------------------- 80