409A Amendment to the Temecula Valley Bank Executive Deferred Compensation Agreement for Martin E. Plourd
Exhibit
10.1
409A
Amendment
to
the
Temecula
Valley Bank
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Temecula Valley Bank (“Company”) and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (“Executive”) originally entered into the Temecula Valley Bank
Executive Deferred Compensation Agreement (“Agreement”) on July 27, 2005.
Pursuant to Article 9 of the Agreement, the Company and the Executive hereby
adopt this 409A Amendment, effective July 27, 2005.
RECITALS
This Amendment is intended to bring the
Agreement into compliance with the requirements of Internal Revenue Code Section
409A. Accordingly, the intent of the parties hereto is that the Agreement shall
be operated and interpreted consistent with the requirements of Section 409A. In
addition, the Agreement has been modified to provide for distribution upon only
two events (Separation from Service and death before Separation from Service).
Therefore, the following changes shall be made:
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1.
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Section
1.1, “Change of Control,” shall be deleted in its entirety and Section 1.1
shall intentionally be left blank.
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2.
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Section
1.6, “Disability,” shall be deleted in its entirety and Section 1.6 shall
intentionally be left blank.
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3.
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Section
1.7, “Early Termination,” shall be deleted in its entirety and Section 1.7
shall intentionally be left blank.
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4.
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Section
1.10, “Normal Retirement Age,” shall be deleted in its entirety and
Section 1.10 shall intentionally be left
blank.
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5.
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The
following provision regarding “Separation from Service” distributions
shall be added as a new Section 1.13 under Article 1, as
follows:
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Separation from
Service:
Notwithstanding
anything to the contrary in this Agreement, to the extent that any benefit under
this Agreement is payable upon a “Termination of Employment,” “Termination of
Service,” or other event involving the Executive’s cessation of services, such
payment(s) shall not be made unless such event constitutes a “Separation from
Service” as defined in Treasury Regulations Section 1.409A-1(h).
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6.
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Section
2.2, “Subsequent Deferral Elections,” shall be deleted in its entirety and
replaced with the following Section
2.2:
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Deferral Elections – In
General:
In any
Plan Year during which Executive defers compensation (as defined herein),
Executive shall file a Deferral Election Form for any compensation deferred.
Such form shall be filed with the Plan Administrator no later than the close of
the Executive’s taxable year next preceding the service year, and such election
is effective only to defer compensation that has not yet been earned by the
Executive at the time of the election.
A deferral
election submitted for a particular year may continue to be valid for succeeding
years until changed or modified. Deferral elections, once made, however, are
irrevocable as of the last permissible date on which such deferral elections may
be made.
Initial Deferral
Election(s):
Upon
notification of eligibility in this Agreement during the initial Plan Year, and
if Executive elects to defer compensation, Executive shall deliver to the Plan
Administrator:
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(a)
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a
Deferral Election Form, signed and
dated;
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(b)
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a
Beneficiary Form, signed and dated.
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Executive
shall deliver such forms to the Plan Administrator within thirty (30) days of
notification of eligibility, and shall set forth on the forms the amount of
compensation to be deferred.
Subsequent Changes to Time
and Form of Payment:
The
Company may permit a subsequent change to form and timing of payments (a
“subsequent deferral election”). Any such change shall be considered made only
when it becomes irrevocable under the terms of the Agreement. Any subsequent
deferral election will be considered irrevocable not later than thirty (30) days
following acceptance of the change by the Plan Administrator, subject to the
following rules:
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(1)
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the
subsequent deferral election may not take effect until at least twelve
(12) months after the date on which the election is
made;
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(2)
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the
payment (except in the case of death, disability, or unforeseeable
emergency) upon which the subsequent deferral election is made is deferred
for a period of not less than five years from the date such payment would
otherwise have been paid; and
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(3)
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in
the case of a payment made at a specified time, the election must be made
not less than twelve (12) months before the date the payment is scheduled
to be paid.
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7.
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A
new Section 2.3 shall be added as
follows:
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Hardship. Upon the
occurrence of an “unforeseeable emergency” as that term is defined in Treasury
Regulation § 1.409A-3(i)(3), the Company may reduce deferrals under this
Agreement to the extent that such action is permitted by said
Regulation.
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8.
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Section
3.1.2 shall be amended as follows:
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a.
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all
references to “ten percent (10%)” shall be deleted and replaced with the
words “five percent (5%)”.
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b.
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The
following sentence shall be appended to Section 3.1.2: “Notwithstanding
anything to the contrary herein, the Company may, in its sole discretion,
adjust the interest rate specified herein on an annual basis upon the
recommendation of the CEO or CFO. Any such adjustment shall take into
consideration all relevant factors, including performance of the Company’s
BOLI portfolio.”
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Sections
4.1 through 4.5 shall be deleted in their entirety and replaced with the
following new Sections 4.1 through 4.3, as follows:
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9.
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Section
4.1 through 4.4 shall be deleted in their entirety and replaced with the
following Section, which shall read as
follows:
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a.
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4.1
Separation from
Service. Upon Executive’s Separation from Service from
the Company at any time, the Company shall pay the Executive the benefit
described in this Section in lieu of any other benefit under this
Agreement:
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4.1.1
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Amount of
Benefit. The benefit under this Section 4.1 is an amount
equal to the Executive’s Deferral Account
balance.
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4.1.2
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Form and Timing of
Payment. The Company shall pay the benefit under this
Section 4.1 to the Executive in a single lump sum ninety (90) days
following Executive’s Separation from Service, subject to terms of Section
4.3.
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10.
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Section
4.5 shall be deleted in its entirety and replaced with the following
Section 4.2:
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4.2 Unforeseeable
Emergency. Upon the occurrence of an “unforeseeable emergency”
as that term is defined in Treasury Regulation § 1.409A-3(i)(3), the Company may
make any distributions to the Executive authorized by and in accordance with
said Treasury Regulation.
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11.
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A
new Section 4.3 shall be added as
follows:
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4.3 Restriction on Timing of
Distribution. Notwithstanding any provision of this Agreement
to the contrary, distributions under this Agreement may not commence earlier
than six (6) months after the date of a Separation from Service (as described
under the “Separation from Service” provision herein) if, pursuant to Internal
Revenue Code Section 409A, the participant hereto is considered a “specified
employee” (under Internal Revenue Code Section 416(i)) of the Bank if any stock
of the Bank is publicly traded on an established securities market or otherwise.
In the event a distribution is delayed pursuant to this Section, the originally
scheduled distribution shall be delayed for six (6) months, and shall commence
instead on the first day of the seventh month following Separation from Service.
If payments are scheduled to be made in installments, the first six (6) months
of installment payments shall be delayed, aggregated, and paid instead on the
first day of the seventh month, after which all installment payments shall be
made on their regular schedule. If payment is scheduled to be made in a lump
sum, the lump sum payment shall be delayed for six (6) months and instead be
made on the first day of the seventh month.
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12.
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A
new Section 10.11 shall be added as
follows:
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10.11 Certain Accelerated
Payments. The Bank may make any accelerated distribution
permissible under Treasury Regulation 1.409A-3(j)(4) to the Executive of
deferred amounts, provided that such distribution(s) meets the requirements of
Section 1.409A-3(j)(4).
Therefore,
the foregoing changes are agreed to.
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
EVP/CFO
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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For
the Company
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Date 12-19-2008
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Date 12/19/08
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Base Salary Election for Plan
Year 2009
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Amount
of Deferral
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[initial
and complete one]
_____ I
elect to defer [option: ______% or $______] of my base salary (amount not
to exceed 80%).
__X__ I
elect not to defer any of my base salary.
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Printed
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇
Date: 12/19/08
Received
by the Plan Administrator this 19 day of December, 2008.
By: /s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Title: EVP/CFO
Bonus Election for Plan
Year 2009
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Amount
of Deferral
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[initial
and complete one]
_____ I
elect to defer [option: ______% or $______] of my bonus (amount not to
exceed 100%).
__X__ I
elect not to defer any of my bonus, if any.
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Printed
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇
Date: 12/19/08
Received
by the Plan Administrator this 19th day of
December, 2008.
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
{ } New
Designation
{ } Change
in Designation
I,
__________________________________, designate the following as Beneficiary under
the Plan:
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Primary:
________________________________________________________
________________________________________________________
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_______% _______%
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Contingent:
________________________________________________________
________________________________________________________
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_______% _______%
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Notes:
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·
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Please
PRINT CLEARLY or TYPE the names of the
beneficiaries.
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·
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To
name a trust as Beneficiary, please provide the name of the trustee(s) and
the exact name and date of the trust
agreement.
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·
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To
name your estate as Beneficiary, please write “Estate
of [your
name] ”.
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·
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Be
aware that none of the contingent beneficiaries will receive anything
unless ALL of the primary beneficiaries predecease
you.
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I
understand that I may change these beneficiary designations by delivering a new
written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my
death.
Name: ___________________________________
Signature: ___________________________________ Date: ____________
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SPOUSAL
CONSENT (Required if Spouse not named Beneficiary):
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.
Spouse
Name: _____________________________________
Signature: ________________________________________ Date: ________________
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Received
by the Plan Administrator this _______ day of ___________________,
2______
By: ________________________________
Title: ________________________________
8-K DISCLOSURE
NOTICE
Institutions
subject to SEC regulation may be required to disclose certain information
regarding this amendment within four days
following implementation of this or any other executive or director compensation
program. Institutions should consult with SEC counsel as to applicability of
this requirement to this amendment.
IMPORTANT NOTICE ABOUT THE
PRACTICE OF LAW AND ACCOUNTING
Nothing in
this document should be construed as tax, legal, or accounting advice.
Renaissance Bank Advisors does not practice law or accounting. The attached 409A
Amendment contains recommended changes intended to facilitate discussion between
you and your legal and/or tax advisor. RBA strongly recommends that you seek
review by outside counsel before signing this amendment.