Document:

Exhibit
10.6

 

BUSINESS
BANK OF CALIFORNIA

SPLIT DOLLAR AGREEMENT

 

THIS AGREEMENT is adopted
this             
day of
                                  ,
2003, by and between BUSINESS BANK OF CALIFORNIA, a state-chartered commercial
bank located in San Bernardino, California (the “Company”), and ALAN J. LANE
(the “Executive”).

 

INTRODUCTION

 

To encourage the
Executive to remain an employee of the Company, the Company is willing to
divide the death proceeds of a life insurance policy on the Executive’s life.  The Company will pay life insurance premiums
from its general assets.

 

AGREEMENT

 

The Company and the
Executive agree as follows:

 

Article 1

General Definitions

 

The following terms shall
have the meanings specified:

 

1.1                               “Cause” means: (a) regulatory suspension or removal
of the Executive from duty with the Company; (b) gross and consistent
dereliction of duty by the Executive; (c) breach of fiduciary duty involving
personal profit by the Executive; (d) willful violation of any banking law or regulation; or (e) conviction of a
felony or crime of moral turpitude.

 

1.2                               “Change of
Control” means the
occurrence of any of the following:

 

(a)               an
“acquisition of control” of the Company as such term is used under the Change
in Bank Control Act, as amended (12 U.S.C. § 1817(j)), and related
regulations of the Federal Reserve Board, which is not rebutted in the manner
provided for therein;

(b)              any
merger, consolidation or share exchange of the Company where the Company is not
the survivor of such merger or consolidation, 
the Company issues an amount of capital stock (other than in a bona fide
public offering) equal in voting power to 50% or more of the then outstanding
common stock of the Company, or the then outstanding common stock of the
Company is converted into or exchanged for cash or any other form or kind of
security, regardless of the issuer thereof;

(c)               the
Company shall sell all or a majority of its assets or its deposit liabilities;

 

 

(d)              three
or more persons other than those nominated by the Board of Directors of the
Company shall be elected to the Board of Directors of the Company; or

(e)               the
Company shall have entered into any understanding or agreement which if
consummated would reasonably lead to the occurrence of one or more of the
foregoing items (a) through (d).

 

1.3                               “Death
Proceeds Benefit” has the meaning
set forth on Exhibit A hereto.

 

1.4                               “Due to
Change of Control” means a Termination of Employment that occurs
within twelve (12) months following a Change of Control for any reason other than
Cause or Due to Disability.

 

1.5                               “Due to
Disability” means a Termination of Employment that occurs due to the
Executive’s suffering a sickness, accident or injury which has been determined
by the carrier of any individual or group disability insurance policy covering
the Executive, by the Social Security Administration or, at the request of the
Executive, by a licensed physician selected by the Company, 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.

 

1.6                               “Insurer”
means each life insurance carrier for which there is a Split Dollar Policy
Endorsement/Beneficiary Designation attached to this Agreement.

 

1.7                               “Involuntary” means
terminated by the Company (rather than by the Executive) prior to the Normal
Retirement Age for any reason other than (a) Cause, (b) Due to Disability or
(c) or Due to Change of Control.

 

1.8                               “Normal
Retirement Age” means the Executive attaining 55 years of age.

 

1.9                               “Policy”
means the specific life insurance policy or policies issued by the Insurer.

 

1.10                           “Termination
of Employment” means the Executive ceasing to be employed by the
Company for any reason whatsoever, other than by reason of an approved leave of
absence.

 

Article 2

Policy Ownership/Interests

 

2.1                               Company
Ownership.  The Company is
the sole owner of the Policy and shall have the right to exercise all incidents
of ownership.  The Company shall be the
beneficiary of the remaining death proceeds of the Policy after the interest of
the Executive or the Executive’s transferee has been paid according to Section
2.2 below.

 

2.2                               Executive’s
Interest.  The beneficiary designated by the Executive
on the Split

 

2

 

Dollar Policy Endorsement/Beneficiary
Designation attached hereto as Exhibit B shall have the right to receive
the Death Proceeds Benefit (in the amount set forth in Exhibit A)
provided that the death of the Executive occurs: (a) while the Executive is
employed by the Company, (b) after a Termination of Employment that occurs on
or after the Normal Retirement Age for any reason other than for Cause, or (c)
after a Termination of Employment that occurs prior to the Normal Retirement
Age that is (i) Due to Disability, (ii) Due to Change of Control or (iii)
Involuntary.  The Executive shall also
have the right to elect and change settlement options that may be permitted by
the Insurer.  Unless one of the
foregoing conditions is met, then the Executive, the Executive’s beneficiary
and their respective successors and assigns shall have no rights or interest in
the Policy and no Death Proceeds Benefit shall be paid under this Section 2.2.

 

2.3                               Option to
Purchase.  The Company shall
not sell, surrender or transfer ownership of the Policy while this Agreement is
in effect without first giving the Executive or the Executive’s transferee the
option to purchase the Policy for a period of 60 days from written notice of
such intention.  The purchase price
shall be an amount equal to the cash surrender value of the Policy. This
provision shall not impair the right of the Company to terminate this
Agreement.

 

2.4                               Comparable
Coverage.  Upon execution of
this Agreement, the Company shall maintain the Policy in full force and effect
and in no event shall the Company amend, terminate or otherwise abrogate the
Executive’s interest in the Policy, unless this Agreement is terminated in
accordance with Article 7 or the Company replaces the Policy with a comparable
insurance policy to cover the benefit provided under this Agreement and the
Company and the Executive execute a new Split Dollar Policy
Endorsement/Beneficiary Designation for said comparable insurance policy.  The Policy or any comparable policy shall be
subject to the claims of the Company’s creditors.

 

Article 3

Premiums

 

3.1                               Premium
Payment.  The Company shall
pay any premiums due on the Policy; provided that Company shall be under no
obligation to set aside, earmark or otherwise segregate any funds with which to
pay its obligations under this Agreement, including, without limitation,
payment of premiums.

 

3.2                               Economic
Benefit.  The Company shall
determine the economic benefit attributable to the Executive based on the
amount of the current term rate for the Executive’s age multiplied by the
aggregate death benefit payable to the Executive’s beneficiary.  The “current term rate” is the minimum
amount required to be imputed under Revenue Rulings 64-328 and 66-110, or any
subsequent applicable authority.

 

3.3                                 Imputed
Income.  The Company shall
impute the economic benefit to the Executive on an annual basis.

 

3

 

Article 4

Assignment

 

The Executive shall not have any right to assign his rights and duties
hereunder without the prior written consent of the Company.

 

Article 5

Insurer

 

The Insurer shall
be bound only by the terms of the Policy. 
Any payments the Insurer makes or actions it takes in accordance with
the Policy shall fully discharge it from all claims, suits and demands of all
entities or persons.  The Insurer shall
not be bound by or be deemed to have notice of the provisions of this
Agreement.

 

Article 6

Claims
and Review Procedure

 

6.1                                 Claims
Procedure.  Any person or
entity who has not received benefits under this Agreement that he or she
believes should be paid (the “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 this 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 this 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.

 

4

 

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 this 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).

 

5

 

Article 7

Amendments and Termination

 

This Agreement may
be amended or terminated only by a written agreement signed by the Company and
the Executive; provided, however, that this Agreement will automatically
terminate upon the first to occur of (a) the distribution of the death proceeds
in accordance with Article 2, (b) the Executive’s employment is terminated
prior to the Normal Retirement Age by the Executive other than Due to
Disability or Due to Change of Control or (c) anything herein to the contrary
notwithstanding, the Executive experiences a Termination of Employment for
Cause at any time.

 

Article 8

Miscellaneous

 

8.1                               Binding
Effect.  This Agreement shall
bind the Executive and the Company and their beneficiaries, survivors,
executors, administrators and transferees, and any Policy beneficiary.

 

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                               Applicable
Law.  The Agreement and all
rights hereunder shall be governed by and construed according to the laws of
the State of California, except to the extent preempted by the laws of the
United States of America.

 

8.4                               Reorganization.  The Company shall not merge or consolidate
into or with another company, or reorganize, or sell substantially all of its
assets to another company, firm or person unless such succeeding or continuing
company, firm or person agrees to assume and discharge the obligations of the
Company.

 

8.5                               Notice.  Any notice, consent or demand required or
permitted to be given under the provisions of this Split Dollar Agreement by
one party to another shall be in writing, shall be signed by the party giving
or making the same, and may be given either by delivering the same to such
other party personally, or by mailing the same, by United States certified
mail, postage prepaid, to such party, addressed to his or her last known
address as shown on the records of the Company.  The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

 

8.6                               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.

 

8.7                               Administration.  The Company shall have powers
which are necessary to

 

6

 

administer this Agreement, including but not limited to:

 

(a)                                Interpreting
the provisions of this Agreement;

(b)           Establishing and revising the method
of accounting for this Agreement;

(c)           Maintaining a record of benefit
payments; and

(d)           Establishing rules and prescribing any
forms necessary or desirable to administer this Agreement.

 

8.8                               Named
Fiduciary.  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.

 

8.9                               Withholding.  The Company may withhold from any payment to
be made hereunder such amount as
it may be required to withhold under any applicable federal, state or other
law, and transmit such withheld amounts to the applicable taxing authority.

 

8.10                         Counterparts.  This Agreement may be executed
simultaneously in any number of counterparts. 
Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.  This Agreement may be executed and delivered
by facsimile transmission of an executed counterpart.

 

8.11                         No Trust.  Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the Company and the Executive, the
Executive’s designated beneficiary or any other person.

 

8.12                         Headings.  Headings in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.

 

8.13                         Confidentiality.  The terms and conditions of this Agreement,
except as such may be disclosed in financial statements and tax returns, or in
connection with estate planning, are and shall forever remain confidential
until the death of Executive and the Executive agrees that he shall not reveal
the terms and conditions contained in this Agreement at any time to any person or entity, other than his
financial and professional advisors unless required to do so by a court of
competent jurisdiction.

 

8.14                         Arbitration; Jury Trial Waiver.

 

8.14.1                  Except as otherwise expressly provided herein
or in any other subsequent written agreement between the Executive and the
Company, any controversy or claim between the Executive and the
Company, or between the respective successors or assigns of either, or between
the Executive and any of the Company’s officers, employees, agents or
affiliated entities, arising out of or relating to this Agreement or any
representations, negotiations, or discussions leading up to this Agreement or
any relationship that results from any of the

 

7

 

foregoing,
whether based on contract, an alleged tort, breach of warranty, or other legal
theory (including claims of fraud, misrepresentation, suppression of material
fact, fraud in the inducement, and breach of fiduciary obligation), and whether
based on acts or omissions occurring or existing prior to, at the time of, or
after the execution of this Agreement and whether asserted as an original or
amended claim, counterclaim, cross-claim, or otherwise, shall be settled by binding
arbitration pursuant to the Federal Arbitration Act (“FAA”),
9 U.S.C. Section 1, et seq.; provided, however, that resort to arbitration
as provided in this Section 8.13 may only be had after exhaustion of the claims
procedure described in Article 6.  The
arbitration shall be administered by the American Arbitration Association
(“AAA”) under its Commercial Arbitration Rules (the “Rules”), and judgment on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.  Any dispute
regarding whether a particular claim is subject to arbitration will be decided
by the arbitrator.  Any court of
competent jurisdiction may compel arbitration of claims pursuant to this
Agreement.

 

8.14.2                  The arbitrator shall be a practicing attorney
or retired judge.  The arbitrator’s
award must be based on substantial evidence, and the arbitrator shall award
only such remedy or relief as a court of competent jurisdiction could properly
award under applicable law.  The
initiation of arbitration in the manner provided in the Rules shall be deemed
the commencement of an action for purposes of any applicable statute of
limitation.  The arbitrator is empowered
to decide (by documents only, or after a preliminary hearing, at the
arbitrator’s discretion) any pre-hearing motion which is substantially similar
to a motion to dismiss for failure to state a claim or a motion for summary
judgment.  Claims of or on behalf of
other persons shall not be considered by the arbitrator or consolidated with
the arbitration proceedings pursuant to this paragraph, unless all parties
consent in writing.  At the written
request of a party made prior to the time the award is made, the arbitrator
shall specify the factual and legal bases for the award.

 

8.14.3                  The arbitrator may award to the prevailing
party pre-and post-award expenses of the arbitration, including the
arbitrator’s fees and travel expenses, administrative fees, out-of-pocket
expenses such as copying and telephone, court costs, witness fees,
stenographer’s fees, and (if allowed by applicable law) attorneys’ fees.  Otherwise, the parties will share equally
the arbitrator’s fee and travel expenses and administrative fees, and each
party will bear its own expenses.

 

8.14.4                  This agreement to arbitrate disputes will
survive the payment of all obligations under this Agreement, the termination of
this Agreement and termination or performance of any transactions contemplated
hereby between the Executive and the Company, and will continue in full force
and effect unless the Executive and the Company otherwise expressly agrees in
writing.  The Executive and the Company
acknowledge that the transaction contemplated by this Agreement involves
“commerce,” as that term is defined in the FAA.

 

8

 

8.14.5      By entering into this Agreement, the
Executive and the Company agree and acknowledge that:

 

(a)   by
agreeing to arbitrate disputes, the Executive and the Company are giving up the
right to trial in a court and THE RIGHT TO TRIAL BY JURY of all claims that are
subject to arbitration under this Agreement;

(b)   grounds
for appeal of the arbitrator’s decision are very limited; and

(c)   in some
cases the arbitrator may be employed by, or may have worked closely with, a
business in the same or a related type of business as the business engaged in by
the Executive or the Company.

 

8.14.6     THE EXECUTIVE AND THE COMPANY HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY OF ALL DISPUTES, CONTROVERSIES AND CLAIMS BY,
BETWEEN OR AGAINST THE EXECUTIVE OR THE COMPANY, WHETHER THE DISPUTE,
CONTROVERSY OR CLAIM IS SUBMITTED TO ARBITRATION OR IS DECIDED BY A COURT.

 

[Signature Page Follows]

 

9

 

IN WITNESS WHEREOF, the parties execute this Agreement
the day and year first above written.

 

	
  EXECUTIVE:

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  BUSINESS BANK OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
   

  	
  By  

  	
   

  	
   

  
	
  Alan J. Lane

  	
   

  
	
   

  	
  Title 

  	
   

  	
   

  
						

 

10

 

Exhibit A

 

Death Proceeds Benefit

 

A.            If
the death of the Executive occurs:

 

(a)           while the Executive is employed by
the Company;

(b)           after a Termination of Employment
that occurs on or after the Normal Retirement Age for any reason other than for
Cause; or

(c)           after a Termination of Employment
that occurs prior to the Normal Retirement Age that is (i) Due to Disability or
(ii) Due to Change of Control;

 

then the “Death Proceeds Benefit” shall be a
portion of the death proceeds from the Policy equal to One Million Dollars
($1,000,000).

 

OR

 

B.            If
the death of the Executive occurs after a Termination of Employment that (i)
occurs prior to the Normal Retirement Age and (ii) is Involuntary, then
the “Death Proceeds Benefit” shall be a portion of the death proceeds from the
Policy based on the age of the Executive at time of the Termination of
Employment determined as follows:

 

	
  Age of the Executive

  	
   

  	
  Death Proceeds
  Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  41

  	
   

  	
  $

  	
  0

  	
   

  
	
  42

  	
   

  	
  $

  	
  71,400

  	
   

  
	
  43

  	
   

  	
  $

  	
  142,800

  	
   

  
	
  44

  	
   

  	
  $

  	
  214,200

  	
   

  
	
  45

  	
   

  	
  $

  	
  285,600

  	
   

  
	
  46

  	
   

  	
  $

  	
  357,000

  	
   

  
	
  47

  	
   

  	
  $

  	
  428,400

  	
   

  
	
  48

  	
   

  	
  $

  	
  499,800

  	
   

  
	
  49

  	
   

  	
  $

  	
  571,200

  	
   

  
	
  50

  	
   

  	
  $

  	
  642,600

  	
   

  
	
  51

  	
   

  	
  $

  	
  714,000

  	
   

  
	
  52

  	
   

  	
  $

  	
  785,400

  	
   

  
	
  53

  	
   

  	
  $

  	
  856,800

  	
   

  
	
  54

  	
   

  	
  $

  	
  928,200

  	
   

  

 

11

 

Exhibit B

 

Beneficiary Designation

 

Primary Beneficiary(ies):

 

	
  Full Name:

  	
  Debbie Lane

  
	
  Relationship to Insured:
      Wife

  
	
  Full Address:

  	
   41090 Avenida Verde

  
	
   

  	
   Temecula, CA 92591

  
	
  Date of Birth:
         /      /                  

  
	
  Social Security Number:
                   -       -                 

  
	
   

  	
   

  
	
  Full Name:

  	
                                                                                              

  
	
  Relationship to
  Insured:                                                                          

  
	
  Full Address:

  
	
   

  	
   

  
	
  Date of Birth:
         /      /                  

  
	
  Social Security Number:
                   -       -                 

  
	
   

  
	
  Full Name:

  	
                                                                                              

  
	
  Relationship to
  Insured:                                                                                            

  
	
  Full
  Address:                                                                                                             

  
	
   

  	
   

  
	
  Date of Birth:
         /      /                  

  
	
  Social Security
  Number:                 -       -                 

  

 

 

*If more than one
beneficiary is named above, the beneficiaries will share equally in any
benefits, unless you have otherwise provided above.  Further, if you have named more than one beneficiary and one or
more of the beneficiaries is deceased at the time of your death, any remaining
beneficiary(ies) will share equally, unless you have provided otherwise above.
If no primary beneficiary survives you, then the contingent beneficiary
designated below will receive any benefits due upon your death.  In the event you have no designated
beneficiary upon your death, any benefits due will be paid to your estate.  In the event that you are naming a
beneficiary that is not a person, please provide pertinent information
regarding the designation.

 

Contingent Beneficiary (if
the Primary(ies) were deceased):

 

	
  Full
  Name:

  	
  Alan Lane, Jr., Adam Lane,
  Christopher Lane, Katelyn Lane,

  	
   

  
	
   

  	
  Mary Lane (equally)

  	
   

  
	
  Relationship
  to Insured:  children

  	
   

  
	
  Full
  Address:

  	
  41090 Avenida Verde

  	
   

  
	
   

  	
  Temecula, CA 92591

  	
   

  
	
  Date
  of Birth: 
                 /        /                

  	
   

  
	
  Social
  Security
  Number:                  -       -                  

  	
   

  
	
   

  	
   

  
	
  Dated
  this          day of
                   ,
  200    .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Alan J. Lane

  	
   

  
						

 

12Exhibit
10.7

 

BUSINESS
BANK OF CALIFORNIA

SPLIT DOLLAR AGREEMENT

 

 

THIS AGREEMENT is adopted this
         day of
                             ,
2003, by and between BUSINESS BANK OF CALIFORNIA, a state-chartered commercial
bank located in San Bernardino, California (the “Company”), and CHARLES O. HALL
(the “Executive”).

 

INTRODUCTION

 

To encourage the
Executive to remain an employee of the Company, the Company is willing to
divide the death proceeds of a life insurance policy on the Executive’s
life.  The Company will pay life
insurance premiums from its general assets.

 

AGREEMENT

 

The Company and the Executive agree as follows:

 

Article 1

General Definitions

 

The following terms shall
have the meanings specified:

 

1.1
                              “Cause” means: (a) regulatory suspension or removal
of the Executive from duty with the Company; (b) gross and consistent
dereliction of duty by the Executive; (c) breach of fiduciary duty involving
personal profit by the Executive; (d) willful violation of any banking law or
regulation; or (e) conviction of a felony or crime of moral turpitude.

 

1.2                               “Change of
Control” means the
occurrence of any of the following:

 

(a)                                  an “acquisition of control” of the Company as
such term is used under the Change in Bank Control Act, as amended (12 U.S.C. § 1817(j)),
and related regulations of the Federal Reserve Board, which is not rebutted in
the manner provided for therein;

(b)                                 any merger, consolidation or share exchange
of the Company where the Company is not the survivor of such merger or
consolidation,  the Company issues an
amount of capital stock (other than in a bona fide public offering) equal in
voting power to 50% or more of the then outstanding common stock of the
Company, or the then outstanding common stock of the Company is converted into
or exchanged for cash or any other form or kind of security, regardless of the
issuer thereof;

(c)                                  the Company shall sell all or a majority of
its assets or its deposit liabilities;

 

 

(d)                                 three or more persons other than those
nominated by the Board of Directors of the Company shall be elected to the
Board of Directors of the Company; or

(e)                                  the Company shall have entered into any
understanding or agreement which if consummated would reasonably lead to the
occurrence of one or more of the foregoing items (a) through (d).

 

1.3                               “Death
Proceeds Benefit” has the meaning
set forth on Exhibit A hereto.

 

1.4                               “Due to
Change of Control” means a Termination of Employment that occurs
within twelve (12) months following a Change of Control for any reason other
than Cause or Due to Disability.

 

1.5                               “Due to
Disability” means a Termination of Employment that occurs due to the
Executive’s suffering a sickness, accident or injury which has been determined
by the carrier of any individual or group disability insurance policy covering
the Executive, by the Social Security Administration or, at the request of the
Executive, by a licensed physician selected by the Company, 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.

 

1.6                               “Insurer”
means each life insurance carrier for which there is a Split Dollar Policy
Endorsement/Beneficiary Designation attached to this Agreement.

 

1.7                               “Involuntary” means
terminated by the Company (rather than by the Executive) prior to the Normal
Retirement Age for any reason other than (a) Cause, (b) Due to Disability or
(c) or Due to Change of Control.

 

1.8                                 “Normal Retirement Age” means the Executive
attaining 55 years of age.

 

1.9                               “Policy”
means the specific life insurance policy or policies issued by the Insurer.

 

1.10                         “Termination of Employment”
means the Executive ceasing to be employed by the Company for any reason whatsoever,
other than by reason of an approved leave of absence.

 

Article 2

Policy Ownership/Interests

 

2.1           Company
Ownership.  The Company is
the sole owner of the Policy and shall have the right to exercise all incidents
of ownership.  The Company shall be the
beneficiary of the remaining death proceeds of the Policy after the interest of
the Executive or the Executive’s transferee has been paid according to Section
2.2 below.

 

2.2                               Executive’s
Interest.  The beneficiary designated by the Executive
on the Split

 

2

 

Dollar Policy Endorsement/Beneficiary
Designation attached hereto as Exhibit B shall have the right to receive
the Death Proceeds Benefit (in the amount set forth in Exhibit A)
provided that the death of the Executive occurs: (a) while the Executive is
employed by the Company, (b) after a Termination of Employment that occurs on
or after the Normal Retirement Age for any reason other than for Cause, or (c)
after a Termination of Employment that occurs prior to the Normal Retirement
Age that is (i) Due to Disability, (ii) Due to Change of Control or (iii)
Involuntary.  The Executive shall also
have the right to elect and change settlement options that may be permitted by
the Insurer.  Unless one of the
foregoing conditions is met, then the Executive, the Executive’s beneficiary
and their respective successors and assigns shall have no rights or interest in
the Policy and no Death Proceeds Benefit shall be paid under this Section 2.2.

 

2.3                               Option to
Purchase.  The Company shall
not sell, surrender or transfer ownership of the Policy while this Agreement is
in effect without first giving the Executive or the Executive’s transferee the
option to purchase the Policy for a period of 60 days from written notice of
such intention.  The purchase price
shall be an amount equal to the cash surrender value of the Policy. This
provision shall not impair the right of the Company to terminate this
Agreement.

 

2.4                               Comparable
Coverage.  Upon execution of
this Agreement, the Company shall maintain the Policy in full force and effect
and in no event shall the Company amend, terminate or otherwise abrogate the
Executive’s interest in the Policy, unless this Agreement is terminated in
accordance with Article 7 or the Company replaces the Policy with a comparable
insurance policy to cover the benefit provided under this Agreement and the
Company and the Executive execute a new Split Dollar Policy
Endorsement/Beneficiary Designation for said comparable insurance policy.  The Policy or any comparable policy shall be
subject to the claims of the Company’s creditors.

 

Article 3

Premiums

 

3.1                               Premium
Payment.  The Company shall
pay any premiums due on the Policy; provided that Company shall be under no
obligation to set aside, earmark or otherwise segregate any funds with which to
pay its obligations under this Agreement, including, without limitation,
payment of premiums.

 

3.2                               Economic
Benefit.  The Company shall
determine the economic benefit attributable to the Executive based on the
amount of the current term rate for the Executive’s age multiplied by the
aggregate death benefit payable to the Executive’s beneficiary.  The “current term rate” is the minimum
amount required to be imputed under Revenue Rulings 64-328 and 66-110, or any
subsequent applicable authority.

 

3.3                                 Imputed
Income.  The Company shall
impute the economic benefit to the Executive on an annual basis.

 

3

 

Article 4

Assignment

 

The Executive shall not have
any right to assign his rights and duties hereunder without the prior written
consent of the Company.

 

Article 5

Insurer

 

The Insurer shall be
bound only by the terms of the Policy. 
Any payments the Insurer makes or actions it takes in accordance with
the Policy shall fully discharge it from all claims, suits and demands of all
entities or persons.  The Insurer shall
not be bound by or be deemed to have notice of the provisions of this
Agreement.

 

Article 6

Claims and Review Procedure

 

6.1                                 Claims
Procedure.  Any person or
entity who has not received benefits under this Agreement that he or she
believes should be paid (the “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 this 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 this
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.

 

4

 

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 this 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).

 

5

 

Article 7

Amendments and Termination

 

This Agreement may be
amended or terminated only by a written agreement signed by the Company and the
Executive; provided, however, that this Agreement will automatically terminate
upon the first to occur of (a) the distribution of the death proceeds in
accordance with Article 2, (b) the Executive’s employment is terminated prior
to the Normal Retirement Age by the Executive other than Due to Disability or
Due to Change of Control or (c) anything herein to the contrary
notwithstanding, the Executive experiences a Termination of Employment for
Cause at any time.

 

Article 8

Miscellaneous

 

8.1           Binding
Effect.  This Agreement shall
bind the Executive and the Company and their beneficiaries, survivors,
executors, administrators and transferees, and any Policy beneficiary.

 

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                                Applicable Law.  The Agreement and all rights hereunder shall
be governed by and construed according to the laws of the State of California,
except to the extent preempted by the laws of the United States of America.

 

8.4                                 Reorganization.  The Company shall not merge or consolidate
into or with another company, or reorganize, or sell substantially all of its
assets to another company, firm or person unless such succeeding or continuing
company, firm or person agrees to assume and discharge the obligations of the
Company.

 

8.5                               Notice.  Any notice, consent or demand required or
permitted to be given under the provisions of this Split Dollar Agreement by
one party to another shall be in writing, shall be signed by the party giving
or making the same, and may be given either by delivering the same to such
other party personally, or by mailing the same, by United States certified
mail, postage prepaid, to such party, addressed to his or her last known
address as shown on the records of the Company.  The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

 

8.6                               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.

 

8.7                               Administration.  The Company shall have powers
which are necessary to

 

6

 

administer this Agreement, including but not limited to:

 

(a)        Interpreting
the provisions of this Agreement;

(b)       Establishing
and revising the method of accounting for this Agreement;

(c)        Maintaining
a record of benefit payments; and

(d)       Establishing
rules and prescribing any forms necessary or desirable to administer this
Agreement.

 

8.8                                 Named
Fiduciary.  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.

 

8.9                                 Withholding.  The Company may withhold from any payment to
be made hereunder such amount as it may be required to withhold under any
applicable federal, state or other law, and transmit such withheld amounts to
the applicable taxing authority.

 

8.10                           Counterparts.  This Agreement may be executed
simultaneously in any number of counterparts. 
Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.  This Agreement may be executed and delivered
by facsimile transmission of an executed counterpart.

 

8.11                           No Trust.  Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between
the Company and the Executive, the Executive’s designated beneficiary or any
other person.

 

8.12                           Headings.  Headings in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.

 

8.13                           Confidentiality.  The terms and conditions of this Agreement,
except as such may be disclosed in financial statements and tax returns, or in
connection with estate planning, are and shall forever remain confidential
until the death of Executive and the Executive agrees that he shall not reveal
the terms and conditions contained in this Agreement at any time to any person
or entity, other than his financial and professional advisors unless required
to do so by a court of competent jurisdiction.

 

8.14                           Arbitration;
Jury Trial Waiver.

 

8.14.1                                          Except as otherwise expressly provided herein
or in any other subsequent written agreement between the Executive and the
Company, any controversy or claim between the Executive and the
Company, or between the respective successors or assigns of either, or between
the Executive and any of the Company’s officers, employees, agents or
affiliated entities, arising out of or relating to this Agreement or any
representations, negotiations, or discussions leading up to this Agreement or
any relationship that results from any of the

 

7

 

foregoing,
whether based on contract, an alleged tort, breach of warranty, or other legal
theory (including claims of fraud, misrepresentation, suppression of material
fact, fraud in the inducement, and breach of fiduciary obligation), and whether
based on acts or omissions occurring or existing prior to, at the time of, or
after the execution of this Agreement and whether asserted as an original or
amended claim, counterclaim, cross-claim, or otherwise, shall be settled by binding
arbitration pursuant to the Federal Arbitration Act (“FAA”), 9
U.S.C. Section 1, et seq.; provided, however, that resort to arbitration as
provided in this Section 8.13 may only be had after exhaustion of the claims
procedure described in Article 6.  The
arbitration shall be administered by the American Arbitration Association
(“AAA”) under its Commercial Arbitration Rules (the “Rules”), and judgment on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.  Any dispute
regarding whether a particular claim is subject to arbitration will be decided
by the arbitrator.  Any court of
competent jurisdiction may compel arbitration of claims pursuant to this
Agreement.

 

8.14.2                                          The arbitrator shall be a practicing attorney
or retired judge.  The arbitrator’s
award must be based on substantial evidence, and the arbitrator shall award
only such remedy or relief as a court of competent jurisdiction could properly
award under applicable law.  The
initiation of arbitration in the manner provided in the Rules shall be deemed
the commencement of an action for purposes of any applicable statute of
limitation.  The arbitrator is empowered
to decide (by documents only, or after a preliminary hearing, at the
arbitrator’s discretion) any pre-hearing motion which is substantially similar
to a motion to dismiss for failure to state a claim or a motion for summary
judgment.  Claims of or on behalf of
other persons shall not be considered by the arbitrator or consolidated with
the arbitration proceedings pursuant to this paragraph, unless all parties
consent in writing.  At the written
request of a party made prior to the time the award is made, the arbitrator
shall specify the factual and legal bases for the award.

 

8.14.3                                          The arbitrator may award to the prevailing
party pre-and post-award expenses of the arbitration, including the
arbitrator’s fees and travel expenses, administrative fees, out-of-pocket
expenses such as copying and telephone, court costs, witness fees,
stenographer’s fees, and (if allowed by applicable law) attorneys’ fees.  Otherwise, the parties will share equally
the arbitrator’s fee and travel expenses and administrative fees, and each
party will bear its own expenses.

 

8.14.4                                          This agreement to arbitrate disputes will
survive the payment of all obligations under this Agreement, the termination of
this Agreement and termination or performance of any transactions contemplated
hereby between the Executive and the Company, and will continue in full force
and effect unless the Executive and the Company otherwise expressly agrees in
writing.  The Executive and the Company
acknowledge that the transaction contemplated by this Agreement involves
“commerce,” as that term is defined in the FAA.

 

8

 

8.14.5                                          By entering into this Agreement, the Executive
and the Company agree and acknowledge that:

 

(a)                                  by agreeing to arbitrate disputes, the
Executive and the Company are giving up the right to trial in a court and THE
RIGHT TO TRIAL BY JURY of all claims that are subject to arbitration under this
Agreement;

(b)                                 grounds for appeal of the arbitrator’s
decision are very limited; and

(c)                                  in some cases the arbitrator may be employed
by, or may have worked closely with, a business in the same or a related type
of business as the business engaged in by the Executive or the Company.

 

8.14.6                                      THE EXECUTIVE AND THE COMPANY HEREBY WAIVE THE RIGHT TO TRIAL
BY JURY OF ALL DISPUTES, CONTROVERSIES AND CLAIMS BY, BETWEEN OR AGAINST THE
EXECUTIVE OR THE COMPANY, WHETHER THE DISPUTE, CONTROVERSY OR CLAIM IS SUBMITTED TO ARBITRATION
OR IS DECIDED BY A COURT.

 

[Signature Page Follows]

 

9

 

 

IN WITNESS WHEREOF, the parties execute this Agreement
the day and year first above written.

 

	
  EXECUTIVE:

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUSINESS BANK OF CALIFORNIA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Charles O. Hall

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title 

  	
   

  	
   

  
								

 

10

 

Exhibit A

 

Death Proceeds Benefit

 

A.                                   If the death of the Executive occurs:

 

(a)                                  while the Executive is employed by the
Company;

(b)                                 after a Termination of Employment that occurs
on or after the Normal Retirement Age for any reason other than for Cause; or

(c)                                  after a Termination of Employment that occurs
prior to the Normal Retirement Age that is (i) Due to Disability or (ii) Due to
Change of Control;

 

then the “Death Proceeds Benefit” shall be a
portion of the death proceeds from the Policy equal to One Million Dollars
($1,000,000).

 

OR

 

B.                                     If the death of the Executive occurs after a
Termination of Employment that (i) occurs prior to the Normal Retirement Age and
(ii) is Involuntary, then the “Death Proceeds Benefit” shall be a portion of
the death proceeds from the Policy based on the age of the Executive at time of
the Termination of Employment determined as follows:

 

	
  Age of the Executive

  	
   

  	
  Death
  Proceeds Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  48

  	
   

  	
  $

  	
  0

  	
   

  
	
  49

  	
   

  	
  $

  	
  142,900

  	
   

  
	
  50

  	
   

  	
  $

  	
  285,800

  	
   

  
	
  51

  	
   

  	
  $

  	
  428,700

  	
   

  
	
  52

  	
   

  	
  $

  	
  571,600

  	
   

  
	
  53

  	
   

  	
  $

  	
  714,500

  	
   

  
	
  54

  	
   

  	
  $

  	
  857,400

  	
   

  

 

11

 

Exhibit B

 

Beneficiary Designation

 

Primary Beneficiary(ies):

 

 

	
  Full Name:

  	
         Susan
  M. Hall (as to 75%)

  
	
  Relationship to Insured:
      Wife

  
	
  Full Address:

  	
  1059 Rancho Lindo Drive

  
	
   

  	
  Petaluma, CA 94952

  
	
  Date of Birth:
       10 
  /  11  /  1953

  
	
  Social Security Number:
        011- 44- 8686

  
	
   

  	
   

  
	
  Full Name:

  	
  Eric G. Hall (as to 25%)

  
	
  Relationship to
  Insured:                Son

  
	
  Full Address:

  	
  29058 Elder Creek

  
	
   

  	
       Highland,
  CA 92346

  
	
  Date of Birth:
            12  / 
  19  /1983

  
	
  Social Security Number:
       609 -26 - 4349

  
	
   

  
	
  Full Name:

  	
                                                                                              

  
	
  Relationship to
  Insured:                                                                                            

  
	
  Full
  Address:                                                                                                             

  
	
   

  	
   

  
	
  Date of Birth:
         /      /                  

  
	
  Social Security
  Number: 
                   -       -                 

  

 

*If more than one
beneficiary is named above, the beneficiaries will share equally in any
benefits, unless you have otherwise provided above.  Further, if you have named more than one beneficiary and one or
more of the beneficiaries is deceased at the time of your death, any remaining
beneficiary(ies) will share equally, unless you have provided otherwise above.
If no primary beneficiary survives you, then the contingent beneficiary
designated below will receive any benefits due upon your death.  In the event you have no designated
beneficiary upon your death, any benefits due will be paid to your estate.  In the event that you are naming a
beneficiary that is not a person, please provide pertinent information
regarding the designation.

 

Contingent Beneficiary (if
the Primary(ies) were deceased):

 

	
  Full
  Name: 
                                                                                                

  	
   

  
	
  Relationship
  to
  Insured                                                                             

  	
   

  
	
  Full
  Address:                                                                                             

  	
   

  
	
   

  	
                                                                                           

  	
   

  
	
  Date
  of Birth: 
                 /        /                

  	
   

  
	
  Social
  Security
  Number:                  -       -                  

  	
   

  
			

 

	
  Dated
  this          day of
                   ,
  200    .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Charles O. Hall

  	
   

  
			

 

12

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