THE 2005 HERITAGE COMMERCE CORP SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN Effective January 1, 2005
Exhibit 10.19
THE
2005
Effective
January 1, 2005
| TABLE OF CONTENTS |
PAGE
|
| ARTICLE I PURPOSE AND EFFECTIVE DATE |
1
|
| ARTICLE II DEFINITIONS |
1
|
| 2.1 Acturial Equivalent |
1
|
| 2.2 Applicable Percentage |
1
|
| 2.3 Board |
1
|
| 2.4 Change in Control |
1
|
| 2.5 Committee |
1
|
| 2.6 Disbility/Disabled |
1
|
| 2.7 Retirement |
2
|
| 2.8 Normal Retirement Date |
2
|
| 2.9 Early Retirement Date |
2
|
| 2.10 Early Retirement Benefit |
2
|
| 2.11 Employer |
2
|
| 2.12 Participant |
2
|
| 2.13 Participation Agreement |
2
|
| 2.14 Supplemental Retirement Benefit |
2
|
| ARTICLE III ELIGIBILITY AND PARTICPATION |
2
|
| 3.1 Eligibility and Particpation |
2
|
| ARTICLE IV SUPPLEMENTAL RETIREMENT BENEFITS |
3
|
| 4.1 Retirement on or After Normal Retirement Date |
3
|
| 4.2 Retirement on or After Early Retirement Date but Before Normal Retirement Date |
3
|
| 4.3 Termination Without Case |
3
|
| 4.4 Voluntary Termination |
3
|
| 4.5 Termination Pursuant to a Change in Control |
3
|
| 4.6 Termination Following the Determination of Disability |
3
|
| 4.7 Termination For Cause |
3
|
| 4.8 Death of Participant During Active Employment |
4
|
| ARTICLE V FORM AND PAYMENT OF BENEFITS |
4
|
| 5.1 Internal Revenue Code Section 409A Compliance |
4
|
| 5.2 Reduction for Early Commencement of Benefits |
4
|
| 5.3 Form of Benefit Payment |
4
|
| 5.4 Modifying Form of Benefit Payment |
4
|
| 5.5 Withholding of Payroll Taxes |
4
|
| 5.6 Payment to Guardian |
4
|
| ARTICLE VI ADMINISTRATION |
5
|
| 6.1 Committee and Duties |
5
|
| 6.2 Agents |
5
|
| 6.3 Binding Effects of Decisions |
5
|
| 6.4 Indemnity of Committee |
5
|
| ARTICLE VII BENEFICIARY DESIGNATION |
5
|
| 7.1 Beneficiary Designation |
5
|
| 7.2 Admendments to Beneficiary Designation |
5
|
| 7.3 No Participant Designation |
5
|
| 7.4 Effect of Payment |
5
|
| ARTICLE VIII CLAIMS PROCEDURE |
5
|
| 8.1 Claim |
5
|
| 8.2 Arbitration of Disputes |
6
|
| ARTICLE IX MISCELLANEOUS |
6
|
| 9.1 Unfunded Plan |
6
|
| 9.2 Unsecured General Creditor |
6
|
|
9.3 Trust
Fund
|
6
|
| 9.4 Nonassignability |
6
|
| 9.5 Not a Contract of Employment |
6
|
| 9.6 Protective Provisions |
6
|
| 9.7 Terms |
7
|
| 9.8 Captions |
7
|
| 9.9 Governing Law |
7
|
| 9.10 Validity |
7
|
| 9.11 Notice |
7
|
| 9.12 Successors |
7
|
| 9.13 IRS Section 280G Issue |
7
|
| EXHIBIT 1: Participation Agreement | |
| EXHIBIT 2: Distribution Election Form | |
| EXHIBIT 3: Beneficiary Agreement |
i
THE
2005
ARTICLE
I
PURPOSE AND EFFECTIVE DATE
The
purpose of this Supplemental Executive Retirement Plan (the “Plan”) is to
provide supplemental retirement benefits for certain key employees of Heritage
Commerce Corp, Heritage Bank of Commerce and subsidiaries or affiliates thereof
(the “Employer”) who are employed by the Employer on, or after January 1,
2005. It is intended that the Plan will aid in retaining and
attracting individuals of exceptional ability by providing them with these
benefits. This Plan shall be effective as of January 1,
2005.
ARTICLE
II
DEFINITIONS
For the
purposes of this Plan, the following terms shall have the meanings indicated,
unless the context clearly indicates otherwise:
2.1 Actuarial
Equivalent. “Actuarial Equivalent” means equivalence in value
between two or more forms and/or times of payment based on a determination by an
actuary chosen by the Committee, using sound actuarial assumptions at the time
of such determination,
2.2 Applicable
Percentage. The term “Applicable Percentage” shall mean that
percentage of the Supplemental Retirement Benefits that the Participant is
entitled to receive based on the circumstances surrounding the termination of
Employment. The Applicable Percentage of Supplemental Retirement
Benefits shall accrue on the schedule incorporated in the Participation
Agreement.
2.3 Board. “Board”
means the Board of Directors of Heritage Commerce Corp.
2.4 Change in
Control. Change in Control shall be defined as follows:
(A) The
acquisition of more than fifty percent (50%) of the value or voting power of the
Bank’s stock by a person or group;
(B) The
acquisition in a period of twelve (12) months or less of at least thirty- five
percent (35%) of the Bank’s stock by a person or group:
(C) The
replacement of a majority of the Bank’s board in a period of twelve (12) months
or less by Directors who were not endorsed by a majority of the current board
members; or
(D) The
acquisition in a period of twelve (12) months or less of forty percent (40%) or
more of the Bank’s assets by an unrelated entity.
For the
purpose of this Agreement, transfers made on account of deaths or gifts,
transfers between family members or transfers to a qualified retirement plan
maintained by the Bank shall not be considered in determining whether there has
been a Change in Control,
2.5 Committee. “Committee”
means the Compensation and Benefits Committee of the Board of Directors of
Heritage Commerce Corp.
2.6 Disability/Disabled. For
the purpose of this Plan, a Participant will be considered disabled if:
(A) He is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months, or
1
(B) He is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees of Participant’s employer.
2.7 Retirement. The
term “Retirement” or “Retires” shall refer to the date which the Participant
acknowledges in writing to Employer to be the last day the Participant will
provide any significant personal services, whether as an employee or independent
consultant or contractor, to Employer (for any reason other than Termination for
Cause, because of a Disability, or Following a Change of Control, as defined
herein). For purposes of this Plan, the phrase “significant personal
services” shall mean more than ten (10) hours of personal services rendered to
one or more individuals or entities in any thirty (30) day
period.
2.8 Normal Retirement
Date. “Normal Retirement Date” shall mean the dare specified
in the Participation Agreement on which the Participant terminates employment
with the Employer (for any reason other than Termination for Cause, because of a
Disability, or Following a Change of Control).
2.9 Early Retirement
Date. “Early Retirement Date” means the date on which a
Participant terminates employment with the Employer (for any reason other than
Termination for Cause, because of a Disability, or Following a Change of
Control), if such termination date occurs on or after such Participant’s
attainment of age fifty-five (55).
2.10 Early Retirement
Benefit. “Early Retirement Benefit” means the Actuarial
Equivalent of the Supplemental Retirement Benefit based on the actual Early
Retirement Date.
2.11 Employer. “Employer”
means Heritage Commerce Corp, Heritage Bank of Commerce, any subsidiaries or
affiliates thereof, or any successors thereto.
2.12 Participant. “Participant”
means any individual who is participating in or has participated in this Plan,
and who has not yet received his full benefit hereunder, as provided in
Article III.
2.13 Participation
Agreement. “Participation Agreement” means the agreement filed
by a Participant and approved by the Board pursuant to
Article III.
2.14 Supplemental Retirement
Benefit. “Supplemental Retirement Benefit” means the benefit
specified in the Participation Agreement.
ARTICLE
III
ELIGIBILITY AND
PARTICIPATION
3.1 Eligibility and
Participation.
(A) Eligibility. Eligibility
to participate in the Plan is limited to those key employees of the Employer
that are designated, from time to time, by the Board.
(B) Participation. An
employee’s participation in the Plan shall be effective upon notification of
such person by the Committee of eligibility to participate, completion of a
Participation Agreement by such person, and acceptance of the Participation
Agreement by the Committee. Participation in the Plan shall continue
until such time as the Participant terminates employment with the Employer and
as long thereafter as the Participant is eligible to receive benefits under this
Plan.
2
ARTICLE
IV
SUPPLEMENTAL RETIREMENT
BENEFITS
4.1 Retirement on or After
Normal Retirement Date. The Applicable Percentage of the
Supplemental Retirement Benefit (as identified in the Participant Agreement) for
a Participant whose employment with the Employer terminates on or after the
Normal Retirement Date shall be one hundred percent (100%). Unless
selected otherwise in accordance with the terms of paragraph 5.3, this
Normal Retirement Benefit shall be paid monthly, with payments to commence on
the first day of the month following the Participant’s Normal Retirement Date
and continuing until the death of the Participant.
4.2 Retirement on or After Early
Retirement Date but Before Normal Retirement Date. The
Participant may elect to retire on a date that constitutes an Early Retirement
Date and receive the Actuarial Equivalent of the Applicable Percentage of the
Supplemental Retirement Benefit based on the actual Early Retirement
Date. Unless selected otherwise in accordance with the terms of
paragraph 5.3, this Early Retirement Benefit shall be paid monthly, with
payments to commence on the first day of the month following the Participant’s
Early Retirement Date and continuing until the death of the
Participant.
4.3 Termination Without
Cause. If the Participant’s employment is terminated by the
Employer Without Cause, the Participant shall be eligible to receive the
Actuarial Equivalent of the Applicable Percentage of the Supplemental Retirement
Benefits as of the effective date of Termination with payments to commence
thirty (30) days after the later of the Participant’s attainment of age
sixty-two (62) or the date of termination, and continuing until the death of the
Participant. (Participant shall have the ability to select an
alternate payment form in accordance with the terms of
paragraph 5.3).
4.4 Voluntary
Termination. If the Participant’s employment is terminated by
voluntary resignation other than for Early Retirement, and such resignation is
not subject to the provisions of paragraph 4.5 below, the Participant shall
be entitled to be paid the Actuarial Equivalent of the Applicable Percentage of
the Supplemental Retirement Benefit as of the effective date of
Termination. Unless selected otherwise pursuant to the terms of
paragraph 5.3, payments shall commence thirty (30) days after the later of
the Participant’s attainment of age sixty-two (62) or the date of termination,
and shall continue until the death of the Participant.
4.5 Termination Pursuant to a
Change in Control. In the event a Participant is terminated
“Pursuant to a Change in Control,” the Applicable Percentage shall be one
hundred percent (100%). A termination shall be deemed to be “Pursuant
to a Change in Control” if, within two (2) years following the occurrence of a
Change in Control, the Participant’s employment with the Employer is terminated
by either the Participant or the Employer other than because of a Termination
for Cause (as defined below in paragraph 4.7). At the
Participant’s option, this Benefit shall be paid monthly, with payments to
commence on the first day of the month following the Participant’s Early
Retirement Date (reduced to actuarial equivalent in accordance with the terms of
paragraph 5.2) or the Normal Retirement Date, and continuing until the
death of the Participant. In the event Participant fails to select a
payment start date, payments shall begin one month following the Participant’s
Early Retirement Date.
4.6 Termination Following the
Determination of Disability. The Applicable Percentage for a
Participant whose employment with the Employer terminates because of Disability
shall be one hundred percent (100%). Unless selected otherwise in
accordance with the terms of paragraph 5.3, payments shall commence thirty
(30) days after the later of the Participant’s attainment of age sixty-two (62)
or the date of termination and shall continue until the death of the
Participant.
4.7 Termination For
Cause. If a Participant is terminated For Cause, as defined
below, Participant shall forfeit any and all benefits payable under this
Plan. For the purpose of this Plan, For Cause shall be defined as any
of the following:
(A) The
willful, intentional and material breach or the habitual and continued neglect
by the Executive of his employment responsibilities and duties;
(B) The
Executive’s willful and intentional violation of (i) any state, federal,
banking or securities laws, or of the Bylaws, rules, policies or resolutions of
Employer, or the rules or regulations of the California Commissioner of
Financial Institutions, Board of Governors or the Federal Reserve System,
Federal Deposit Insurance Corporation, or other regulatory agency or
governmental authority having jurisdiction over the Employer, which has a
material adverse effect upon the Employer:
3
(C) The
Executive’s final conviction after exhaustion of all appeals of (i) any
felony or (ii) a crime involving moral turpitude, or the Executive’s
willful and intentional commission of a fraudulent or dishonest act, which in
any of the foregoing circumstances has a material adverse effect upon the
Employer.
4.8 Death of Participant During
Active Employment. In the event Participant dies while
actively employed by Employer, then no death benefits shall be payable under
this Agreement (other than a survivor benefit qualified for under
paragraphs 4.1 through 4.7 above and selected pursuant to
paragraph 5.3). Such benefits are described by a Joint
Beneficiary Designation Agreement, if any.
ARTICLE
V
FORM AND PAYMENT OF BENEFITS
5.1 Internal Revenue Code
Section 409A Compliance. It is the intent of the parties to
comply with all applicable Internal Revenue Code Sections. including,
but not limited to, IRC 409A. Thus, for any benefits payable
pursuant to this Plan, if the Participant is a Key Employee, as defined by the
Internal Revenue Service, and said Company is publicly traded at the time of
“separation from service” (as defined by IRC 409A), any such benefit
payment described herein shall be withheld for six (6) months following such
separation from service, in order to comply with IRC 409A.
5.2 Reduction for Early
Commencement of Benefits. If a Participant receives a
Supplemental Retirement Benefit under this Plan before the Participant’s Normal
Retirement Date, the monthly Supplemental Retirement Benefit shall be reduced to
its Actuarial Equivalent value.
5.3 Form of Benefit
Payment. The Supplemental Retirement Benefit shall be paid in
the basic form provided below, unless the Participant selects an alternate form
of payment. The basic and alternative forms of payment are as
follows:
(A) Basic Form of Benefit
Payments. Unless an alternate selection is made, payments made
pursuant to this Plan shall be made as follows: Monthly single life
annuity for the Participant’s life.
(B) Alternative Forms of Benefit
Payment.
(i) A joint
and survivor annuity of the Actuarial Equivalent Value equal to the Basic
Benefit with payment continued to the survivor in the same amount as the amount
paid to the Participant.
(ii) A joint
and survivor annuity of the Actuarial Equivalent Value equal to the Basic
Benefit with payment continued to the survivor and one-half of the amount paid
to the Participant.
(iii) Any other
Actuarial Equivalent method as approved by the Board and selected in accordance
with the provisions of the appropriate IRS requirements, including but not
limited to IRC 409A.
5.4 Modifying Form of Benefit
Payment. A Participant may modify the form of Benefit Payment,
however any such modification (i) may not take effect until at least twelve
(12) months after the date on which the election is made, and (ii) the
first payment to which such election is made must be deferred for a period of at
least five (5) years from the date the payment would otherwise have been
made.
5.5 Withholding of Payroll
Taxes. The Employer shall withhold from payments made
hereunder any taxes required to be withheld from a Participant’s age under
federal, state or local law. However, a Beneficiary may elect not to
have withholding for federal income tax purposes pursuant to
Section 3405(a)(2) of the Internal Revenue Code, or any successor provision
thereto.
5.6 Payment to
Guardian. If a Plan benefit is payable to a minor or a person
declared incompetent or to a person incapable of handling the disposition of his
property, the Committee may direct payment of such Plan benefit to the guardian,
legal representative or such person having the care and custody of such minor,
incompetent or person. The Committee may require proof of
incompetency, minority, incapacity or guardianship as it may deem appropriate
prior to distribution of the Plan benefit. Such distribution shall
completely discharge the Committee and the Employer from all liability with
respect to such benefit.
4
ARTICLE
VI
ADMINISTRATION
6.1 Committee and
Duties. This Plan shall be administered by an Administrative
Committee which shall consist of not less than three persons appointed by the
Chairman of the Board. Any member of the Committee may be removed at
any time by the Board. Any member may resign by delivering his
written resignation to the Board. Upon the existence of any vacancy,
the Board may appoint a successor. The Committee shall have the
authority to make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and decide or resolve any and
all questions including interpretations of this Plan, as may arise in connection
with the Plan. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. A majority vote
of the Committee members constituting a quorum shall control any
decision.
6.2 Agents. In
the administration of this Plan, the Committee may, from time to time, employ
agents and delegate to them such administrative duties as it sees fit, and may
from time to time consult with counsel who may be counsel to the
Employer.
6.3 Binding Effect of
Decisions. The decision or action of the Committee in respect
of any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.
6.4 Indemnity of
Committee. The Employer shall indemnify and hold harmless the
members of the Committee against any and all claims, loss,
damage. expense, or liability arising from any action or failure to
act with respect to this Plan, except in the case of gross negligence or willful
misconduct.
ARTICLE
VII
BENEFICIARY
DESIGNATION
7.1 Beneficiary
Designation. Each Participant shall have the right, at any
time, to designate any person or persons as his Beneficiary or Beneficiaries
(both primary as well as secondary) to whom benefits under this Plan shall be
paid in the event of his death prior to complete distribution to the Participant
of the benefits due under the Plan. Each Beneficiary designation
shall be in a written form prescribed by the Committee, and will be effective
only when filed with the Committee during the Participant’s
lifetime.
7.2 Amendments to Beneficiary
Designation. Any Beneficiary designation may be changed by a
Participant without the consent of any designated Beneficiary by the filing of a
new Beneficiary designation with the Committee. The filing of a new
Beneficiary designation form will cancel all Beneficiary designations previously
filed. If a Participant’s Compensation is community property, any
Beneficiary designation shall be valid or effective only as permitted under
applicable law.
7.3 No Participant
Designation. In the absence of an effective Beneficiary
designation, or if all designated Beneficiaries predecease the Participant or
die prior to complete distribution of the Participant’s benefits, then the
Participant’s designated Beneficiary shall be deemed to be the Participant’s
estate.
7.4 Effect of
Payment. The payment to the deemed Beneficiary shall
completely discharge the Employer’s obligations under this Plan.
ARTICLE
VIII
CLAIMS
PROCEDURE
8.1 Claim. The
Employer shall, but only to the extent necessary to comply with ERISA, be
designated as the named fiduciary under this Plan and shall have authority to
control and manage the operation and administration of this
Plan. Consistent therewith, the Employer shall make all
determinations as to the rights to benefits under this Plan. Any
decision by the Employer denying a claim by the Participant, the Participant’s
spouse, or the Participant’s beneficiary for benefits under this Plan shall be
stated in writing and delivered or mailed, via registered or certified mail, to
the Participant, the Participant’s spouse or the Participant’s beneficiary, as
the case may be. Such decision shall set forth the specific reasons
for the denial of a claim. In addition, the Employer shall provide
the Participant, the Participant’s spouse or the Participant’s beneficiary with
a reasonable opportunity for a full and fair review of the decision denying such
claim.
5
8.2 Arbitration of
Disputes. All unresolved claims, disputes and other matters in
question arising out of or relating to this Plan or the breach or interpretation
thereof, other than those matters which are to be determined by the Employer in
its sole and absolute discretion, shall be resolved by binding arbitration
before a representative member, selected by the mutual agreement of the parties,
of the Judicial Arbitration and Mediation Services, Inc. (“JAMS”), located in
San Francisco, California. In the event JAMS is unable or unwilling
to conduct the arbitration provided for under the terms of this Paragraph, or
has discontinued its business, the parties agree that a representative member,
selected by the mutual agreement of the parties, of the American Arbitration
Association (“AAA”), located in San Francisco, California, shall conduct the
binding arbitration referred to in this Paragraph. Notice of the
demand for arbitration shall be filed in writing with the other party to this
Plan and with JAMS (or AAA, if necessary). In no event shall the
demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. The
arbitration shall be subject to such rules of procedure used or established by
JAMS, or if there are none, the rules of procedure used or established by
AAA. Any award rendered by JAMS or AAA shall be final and binding
upon the parties, and as applicable, their respective heirs, beneficiaries,
legal representatives, agents, successors and assigns, and may be entered in any
court having jurisdiction thereof. The obligation of the parties to
arbitrate pursuant to this clause shall be specifically enforceable in
accordance with, and shall be conducted consistently with, the provisions of
Title 9 of Part 3 of the California Code of Civil
Procedure. Any arbitration hereunder shall be conducted in San Jose,
California, unless otherwise agreed to by the parties.
ARTICLE
IX
MISCELLANEOUS
9.1 Unfunded
Plan. This Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
“management or highly compensated employees” within the meaning of
Sections 201, 301, and 401 of the Employee Retirement Income Security act
of 1974, as amended (“ERISA”), and therefore to be exempt from the provisions of
Parts 2, 3, and 4 of Title 1 ERISA. Accordingly, the Plan
shall terminate and no further benefits shall be paid hereunder in the event it
is determined by a court of competent jurisdiction or by an opinion of counsel
that the Plan constitutes an employee pension benefit plan within the meaning of
Section 3(2) of ERISA which is not so exempt.
9.2 Unsecured General
Creditor. Participants and their Beneficiaries, heirs,
successors, and assigns shall have no legal or equitable rights, interest or
claims in any property or assets of the Employer, nor shall they be
Beneficiaries of, or have any rights, claims or interests in any life insurance
policies, annuity contracts, or the proceeds therefrom owned or which may be
acquired by the Employer. Except as may be provided it
Section 8.3, such policies, annuity contracts or other assets of the
Employer shall not be held under any trust for the benefit of Participants,
their Beneficiaries, heirs, successors or assigns, or held in any way as
collateral security for the fulfilling of the obligations of the Employer under
this Plan. Any and all of the Employer’s assets and policies shall
be, and remain, the general, unpledged, unrestricted assets of the
Employer. The Employer’s obligation under the Plan shall be that of
an unfunded and unsecured promise to pay money in the future.
9.3 Trust
Fund. The Employer shall be responsible for the payment of all
benefits provided under the Plan. At its discretion, the Employer may
establish one or more trusts, with such trustee as the Board may approve, for
the purpose of providing for the payment of such benefits. Such trust
or trusts may be irrevocable, but the assets thereof shall be subject to the
claims of the Employer’s creditors. To the extent any benefits
provided under the Plan are actually paid from any such trust, the Employer
shall have no further obligation with respect thereto, but to the extent not so
paid, such benefit shall remain the obligation of, and shall be paid by, the
Employer.
9.4 Nonassignability. Neither
a Participant nor any other person shall have any right to commute, sell,
assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are,
expressly declared to be unassignable and nontransferable. No part of
the amount payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant’s or any other person, nor be transferable by
operation of law in the event of a Participant a or any other person’s
bankruptcy or insolvency.
9.5 Not a Contract of
Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between the Employer and the
Participant, and the Participant (or his Beneficiary) shall have no rights
against the Employer except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give a
Participant the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discipline or discharge him at any
time.
9.6 Protective
Provisions. A Participant will cooperate with the Employer by
furnishing any and all information requested by the Employer, in order to
facilitate the payment of benefit hereunder, and by taking such physical
examinations as the Employer may deem necessary and taking such other action as
may be requested by the Employer.
6
9.7 Terms. Whenever
any words are used herein in the masculine, they shall be construed as though
they were used in the feminine in all cases where they would so apply; and
wherever any words are used herein in the singular or in the plural, they shall
be construed as though they were used in the plural or singular, as the case may
be, in all cases where they would so apply.
9.8 Captions. The
captions of the articles, sections, and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.
9.9 Governing
Law. The provisions of this Plan shall be construed,
interpreted, and governed in all respects in accordance with applicable federal
law and, to the extent not preempted by such federal law, in accordance with the
laws of the State of California.
9.10 Validity. If
any provision of this Plan shall be held illegal or invalid for any reason, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.
9.11 Notice. Any
notice or filing required or permitted to be given to the Committee under the
Plan shall be sufficient in writing and hand delivered, or sent by registered or
certified mail, to any member of the Committee, or to the Employer’s statutory
agent. Such notice shall be deemed given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
9.12 Successors. The
provisions of this Plan shall bind and inure to the benefit of the Employer and
its successors and assigns. The term successors as used herein shall
include any corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise acquire all or substantially all of the
business and assets of the Employer, and successors of any such corporation or
other business entity.
9.13 IRS Section 280G
Issues. If all or any portion of the amounts payable to the
Participant under this Plan, either alone or together with other payments which
the Participant has the right to receive from the Employer, constitute “excess
parachute payments” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), that are subject to the excise
tax imposed by Section 4999 of the Code (or similar tax and/or assessment),
Participant shall be responsible for the payment of such excise tax and Employer
(and its successor) shall be responsible for any loss of deductibility related
thereto; provided, however, that Employer and Participant shall cooperate with
each other and use all reasonable efforts to minimize to the fullest extent
possible the amount of excise tax imposed by Section 4999 of the
Code. If, at a later date, it is determined (pursuant to final
regulations or published rulings of the Internal Revenue Service, final judgment
of a court of competent jurisdiction, or otherwise) that the amount of excise
taxes payable by the Participant is greater than the amount initially so
determined, then the Participant shall pay an amount equal to the sum of such
additional excise taxes and any interest, fines and penalties resulting from
such underpayment. The determination of the amount of any such excise
taxes shall be made by the independent accounting firm employed by the Employer
immediately prior to the change in control or such other independent accounting
firm or advisor as may be mutually agreeable to Employer and Participant in the
exercise of their reasonable good faith judgment.
By:_____________________________ By:__________________________________
Signature and
Date Secretary and
Date
Title:____________________________
7