Document:

Exhibit

10.39

 

Schedule B

Clovis Community Bank Split Dollar Agreement and Endorsement

 

 

 Participants and Their

Executive Interest in Clovis Community Bank Split Dollar Agreement and

Endorsement

 

	

  Participant

  	

   

  	

  Dates of signature

  	

   

  	

  Executive Interest

  
	

  Daniel N. Cunningham

  	

   

  	

  May 15, 2002

  	

   

  	

  $

  	

  424,366

  
	

  Steven McDonald

  	

   

  	

  May 15, 2002

  	

   

  	

  $

  	

  422,416

  
	

  Louis McMurray

  	

   

  	

  May 15, 2002

  	

   

  	

  $

  	

  379,127

  
	

  Wanda Lee Rogers

  	

   

  	

  May 15, 2002

  	

   

  	

  $

  	

  250,167

  
	

  William S. Smittcamp

  	

   

  	

  May 15, 2002

  	

   

  	

  $

  	

  422,416EXHIBIT 10.40

 

CENTRAL VALLEY COMMUNITY

BANK

EMPLOYEE AND DIRECTOR

PREFERRED INTEREST BONUS PLAN

 

                Central Valley Community Bank

(the “Bank”) hereby establishes an employee bonus plan (the “Plan”), pursuant

to which preferred limited liability company interests (“Preferred Interests”)

in Central Valley Community Realty, LLC, a Delaware limited liability company

(“CVC Realty”), are to be distributed to certain employees and directors of the

Bank and its direct and indirect subsidiaries.

ARTICLE I

PURPOSE OF PLAN

                CVC Realty is a recently formed

indirect subsidiary of the Bank.  The

assets of CVC Realty will consist primarily of real estate related assets,

including mortgage loan participations. 

It is expected that CVC Realty will reinvest the proceeds received upon

repayment of the principal and interest of such assets in similar real estate

related assets to the extent not otherwise distributed to the members of CVC

Realty.

                CVC Realty intends to conduct

its operations so as to qualify as a real estate investment trust (a “REIT”)

for Federal income tax purposes.  As a

condition to qualifying as a REIT, CVC Realty must have at least 100 equity

owners.  In order to meet this requirement,

the Bank has decided to distribute Preferred Interests in CVC Realty to directors

of the Bank and to certain key employees of the Bank as an employee benefit

under the Plan.

ARTICLE II

DEFINITIONS

2.1           Administrator.  The individual or individuals designated by

the Board from time to time to administer the Plan.  The initial Administrator shall be the Compensation Committee of

the Bank.

2.2           Affiliate.  Each corporation that is designated as an

Affiliate by the Bank pursuant to Section 4.2.

2.3            Bank.  Central Valley Community Bank, a California

state bank,

and its successors and assigns.

2.4           Board.  The Board of Directors of the Bank.

2.5           CVC Realty

Limited Liability Company Operating Agreement.  The Limited Liability Company Operating Agreement of CVC Realty,

as amended, restated or otherwise modified from time to time.

2.6           Code.  The Internal Revenue Code of 1986, as

amended.

2.7           Director.  Each member of the Board.

 

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2.8           Eligible Employee.  An Employee of the Bank or an Affiliate who

is compensated through the Bank’s or such Affiliate’s regular payroll, works

full time (i.e., 40 hours per week) and who meets one of the following

additional criteria:

(a)                                  has the title of “Assistant Vice

President or higher;” or

(b)                                 has a Salary Grade of 5 or higher.

For

purposes of the Plan, the employment relationship shall be treated as

continuing intact while the individual is on sick leave or other leave of

absence approved by the Bank.

2.9           Employee.  An officer of the Bank and any other common

law employee of the Bank or an Affiliate who is paid through the Bank’s or such

Affiliate’s regular payroll.

2.10         CVC Realty.  Central Valley Community Realty, LLC, a

California limited liability company, and its successors and assigns.

2.11         Grant Date.  Each date, as determined by the

Administrator, upon which Preferred Interests are granted to one or more

Directors and Eligible Employees who have elected to become Participants in

accordance with Article III.

2.12         Joinder Agreement.  An agreement, in substantially the form

attached hereto as Attachment A, entered into between CVC Realty and a

Director or an Eligible Employee, or an assignee of any Director or Employee,

whereby such Director or Eligible Employee agrees to be bound by and subject to

the terms of the CVC Realty Limited Liability Company Agreement.

2.13         Participant.  A Director or an Eligible Employee who has

elected to participate in the Plan in accordance with Article III.

2.14         Participation

Agreement.  An acceptance form, in

substantially the form attached hereto as Attachment B, submitted by a

Director or an Eligible Employee to the Administrator, whereby such Director or

Eligible Employee elects to participate in the Plan.

2.15         Plan.  The Central Valley Community Bank Employee

Preferred Interest Bonus Plan, as amended, restated or otherwise modified from

time to time.

2.16         Preferred

Interests.  Equity interests in CVC

Realty designated as “Preferred Interests,” having the designations,

preferences, rights and duties described in the CVC Realty Limited Liability

Company Agreement, and a par value of $250 with a 6% preferred dividend.

Capitalized

terms used, but not otherwise defined in, this Agreement shall have the same

meaning as set forth in the CVC Realty Limited Liability Company Operating

Agreement.

 

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ARTICLE III

GRANT AND ACCEPTANCE OF PREFERRED INTERESTS

3.1           Participation and

General Conditions.  The

Administrator shall provide written notice of eligibility, together with a copy

of the Plan, the CVC Limited Liability Company Agreement, the Participation

Agreement and the Joinder Agreement, to each Director and each Eligible

Employee, not less than ten (10) days before the applicable Grant

Date.  Each Director and each Eligible

Employee may elect to become a Participant by completing and duly executing

(1) the Participation Agreement and (2) the Joinder Agreement and

returning such completed and executed agreements to the Administrator before

the applicable Grant Date.  NO GRANT OF

A PREFERRED INTEREST UNDER THE PLAN SHALL BE EFFECTIVE UNLESS AND UNTIL THE

RELEVANT PARTICIPANT HAS DULY COMPLETED, EXECUTED AND DELIVERED TO THE

ADMINISTRATOR THE PARTICIPATION AGREEMENT AND THE JOINDER AGREEMENT.

3.2           Grant of

Preferred Interests.  On each Grant

Date, (1) each (a) Director and each Eligible Employee having the title of

Assistant Vice President or higher and who has elected to become a Participant

in accordance with Section 3.1 and (b) shall, without further action of

the Administrator, be granted two Preferred Interests under the Plan, (2) each additional

Eligible Employee who works full time (as defined in Section 2.8 above) shall,

without further action of the Administrator, be granted one Preferred Interest

under the Plan, and (3) the Bank shall direct CVC Realty to issue and

deliver to each such Participant (or such Participant’s transferee), the

applicable number of certificates representing the applicable number of

Preferred Interests, registered in the name of such Participant or such

Participant’s transferee, as the case may be.

3.3           Incorporation of

Terms of the CVC Realty Limited Liability Company Agreement.  The provisions of Articles VIII

and IX of the CVC Realty Limited Liability Company Agreement shall be

deemed incorporated herein.

ARTICLE IV

ADMINISTRATION OF THE PLAN

4.1           General Authority.  The Plan shall be administered by the

Administrator.  The express grant in the

Plan of any specific power to the Administrator shall not be construed as

limiting any power or authority of the Administrator.  The Administrator shall not be liable for any act done in good

faith with respect to the Plan or any Participation Agreement or Joinder

Agreement.  The interpretation and

construction by the Administrator of any terms or provisions of the Plan or of

any rule or regulation promulgated in connection herewith shall, to the fullest

extent permitted by law, be conclusive and binding on all persons.  In addition to all other authority vested

with the Administrator under the Plan, the Administrator shall have the

discretionary authority to:

(a)                                  Interpret all provisions of the Plan;

(b)                                 Designate Employees as “Eligible

Employees” for purposes of the Plan;

(c)                                  Prescribe the form of any Participation

Agreement and notice and manner for executing or giving the same;

(d)                                 Adopt, amend, or rescind rules for Plan

administration; and

(e)                                  Make all determinations it deems

advisable for the administration of the Plan.

 

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4.2           Indemnification

of the Administrator.  In addition

to such other rights of indemnification as members of the Board, the

Administrator shall be indemnified by the Bank against (1) the reasonable

expenses (as such expenses are incurred), including attorneys’ fees actually

and necessarily incurred in connection with the defense of any action, suit or

proceeding (or in connection with any appeal therein), to which they or any of

them may be a party by reason of any action taken or failure to act under or in

connection with the Plan; and (2) against all amounts paid by them in

settlement thereof (provided such settlement is approved by independent legal

counsel selected by the Bank) or paid by them in satisfaction of a judgment in

any such action, suit or proceeding, except in relation to matters as to which

it shall be adjudged in such action, suit or proceeding that the Administrator

is liable for gross negligence or misconduct in the performance of their

duties; provided that within 60 days after institution of any such action,

suit or proceeding the Administrator shall in writing offer the Bank the opportunity,

at its own expense, to handle and defend the same.

4.3           Designation of

Affiliates.  The Bank may from time

to time designate, a “parent” corporation, or a “majority-owned subsidiary” in

each case within the meaning of such terms as used in Rule 701(b)

promulgated by the Securities and Exchange Commission under the Securities Act

of 1933, as amended, as an Affiliate for purposes of the Plan.  Such designation shall be evidenced by the

express inclusion of such corporation as an Affiliate within  the meaning of Section 2.2, the

intentional act of the Bank or the Administrator to communicate in writing the

grant of Preferred Interests hereunder to employees of such corporation, or

such other written document that is intended to evidence such designation.  The Bank or Administrator may rescind the

designation of a corporation as an Affiliate by adopting a writing that is

intended to evidence such rescission.

ARTICLE

V

PUT OPTIONS

5.1           General.  Subject to the terms of this Section, at the

sole option of the Participant, or, if applicable, the Participant’s

assignee(s), heir(s), devisee(s), legal representative(s) or other successor(s)

in interest (individually, an “Assignee,” and collectively, the “Assignee(s)”)

the Bank agrees to repurchase the Preferred Interests of the Participant or the

Participant’s Assignee(s) as the case may be, upon the happening of (a) the

death of the Participant, (b) the death of the Assignee, (c) the termination of

the Participant’s employment by the Bank for any reason other than death, or

(d) if the Participant is a member of the Board of Directors of the Bank, upon

the termination of later of (i) the termination of the Participant’s employment

with the Bank, if applicable, or (ii) the termination of the Participant’s

tenure of the Board of Directors of the Bank.

5.2           Exercise.  The put option shall be exercised by the

Participant and the Participant’s Assignee(s), as the case may be, providing

written notice to the Bank on or before 30 days following the happening of any

event described in Section 5.1 above.

5.3           Price and Terms.  The option price shall be the sum of (a)

$250 per Preferred Interest and (b) any accrued but unpaid Preferred Return in

respect of the Preferred Interest computed as of the day of closing.  The option price shall be payable in full in

cash at closing, which shall occur as promptly as practicable after the receipt

of notice by the Bank from the Participant or Participant’s Assignee(s), as the

case may be.

 

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5.4           Limitation.  Notwithstanding any other provision of this

Article V, the exercise of the put option granted in this Article V is

expressly subject to the good faith determination by the Bank that such

exercise will not have an adverse impact on the continuing status of the

Company as a real estate investment trust (“REIT”) within the meaning of

Section 856 et

seq. of the Internal Revenue Code of 1986, as amended.  The Bank shall have the power, in good

faith, to postpone or refuse to consummate any purchase of Preferred Interests

that would threaten the Company’s status as a REIT under the Code, or cause the

Company to fail to meet the requirements of REIT status under the Code.

ARTICLE VI

GENERAL PROVISIONS

6.1           Effect on

Employment.  Neither the adoption of

the Plan, its operation, nor any documents describing or referring to the Plan

(or any part thereof) shall confer upon any employee any right to continue in

the employ of the Bank or an Affiliate or in any way affect any right and power

of the Bank or an Affiliate to terminate the employment of any employee at any

time with or without assigning a reason therefor.

6.2           Costs.  All costs and expenses incurred in

administering the Plan shall be paid by the Bank.

6.3           Rules of

Construction.  Headings are given to

the articles and sections of the Plan solely as a convenience to facilitate

reference.  The masculine gender when

used herein refers to both masculine and feminine.  The reference to any statute, regulation or other provision of

law shall be construed to refer to any amendment to or successor of such

provision of law.

6.4           Governing Law.  The internal laws of the State of California

shall apply to all matters arising under the Plan.  The Plan is not intended to be subject to the Employee Retirement

Income Security Act of 1974, as amended.

6.5           Amendment.  The Board may amend the Plan at any time;

provided, however, that, without the consent of such Participant, the Board may

not amend the Plan in a manner that adversely affects the rights of a Participant

under the Plan unless the Board shall have determined that changes in

applicable accounting rules or a change in applicable laws renders such an

amendment desirable, in which case the Board may approve such amendment.

6.6           Termination.  The Board may terminate the Plan at any time

or for any reason; provided, however, that no such termination may adversely

affect the rights of any Participant with respect to previous grants of

Preferred Interests under the Plan, unless the Board shall have determined that

changes in applicable accounting rules or a change in applicable laws renders

such termination desirable, in which case the Board may approve such

termination.  The Plan shall terminate

upon the earliest to occur of (1) the termination of the Plan by the Board

in accordance with this Section 5.6 or (2) fifteen (15) years

from the effective date.  The

termination of the Plan shall be effected in accordance with procedures

established by the Administrator.

 

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6.7           Governmental

Regulations.  Notwithstanding

anything to the contrary set forth herein, the Bank’s obligation to purchase

and deliver Preferred Interests pursuant to the Plan is subject to all

applicable laws, rules and regulations, including all applicable federal and

state securities laws, and the obtaining of all such approvals of any

governmental or regulatory authority as may be deemed necessary or appropriate

by the Board.

                IN WITNESS

WHEREOF, the undersigned officer has duly executed the Plan this 17th

day of June, 2002, to be effective as of such date.

	

   

  	

  CENTRAL

  VALLEY COMMUNITY BANK

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/Daniel

  J. Doyle

  
	

   

  	

  Name:

  	

  Daniel

  J. Doyle

  
	

   

  	

  Title:

  	

  President

  & Chief Executive Officer

  

 

 

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