DEFERRED COMPENSATION BENEFITS AGREEMENT
THIS AMENDED DEFERRED COMPENSATION BENEFITS AGREEMENT entered into this 14th day
of September, 1998, by and between SOUTHWEST VIRGINIA SAVINGS BANK, FSB,
(hereinafter referred to as the "savings bank") and Xxxxxxx X. Xxxxxx, of the
County of Roanoke in the Commonwealth of Virginia (hereinafter referred to as
the "Employee").
W I T N E S S E T H :
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WHEREAS SOUTHWEST VIRGINIA SAVINGS BANK, FSB AND XXXXXXX X. XXXXXX entered into
a Deferred Compensation Benefits Agreement on 27th May, 1988: and that agreement
was amended on 19th day of May, 1993; and
WHEREAS the parties hereto have mutually agreed to certain amendments:
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties hereto agree as follows:
1. Promise to Pay
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In addition to the benefits available under the Employees' Retirement Plan
of Southwest Virginia Savings Bank, FSB, as the same has been or may
hereafter be amended or restated, or any successor thereto (hereinafter
referred to as the "Qualified Plan"), and notwithstanding any other
agreements between the parties, the savings bank hereby establishes a
non-qualified plan to provide supplemental retirement benefits commencing
the first month after the Employee retires, dies or otherwise terminates
her employment due to disability or change of control or ownership of the
savings bank, whichever occurs first, and continuing as hereinafter set
forth.
2. Retirement Date
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The Normal Retirement Date of the Employee shall be the first day of the
month coinciding with or next following the date on which the Employee
attains the age of sixty-five (65). However, the Employee may elect to take
an early retirement. The Early Retirement Date of the Employee shall be the
first day of the month coinciding with or next following the date on which
the Employee attains the age of fifty-five (55) and completes fifteen (15)
years of service with the savings bank. Furthermore, the Employee, at the
request of the savings bank, may remain in the active employ of the savings
bank after her Normal Retirement Date for such period or periods as from
time to time shall be mutually agreed upon. In the event that the Employee
continues her employment with the savings bank beyond her Normal Retirement
Date, her Delayed Retirement Date shall be the first day of the month
coinciding with or next following the actual date the Employee retires from
the employment of the savings bank.
3. Supplemental Retirement Benefit
-------------------------------
On her Normal Retirement Date or Early Retirement Date the employee shall
be entitled to receive in monthly installments for two hundred forty (240)
months a Supplemental Retirement Benefit determined according to whichever
shall be applicable of subparagraphs (a), (b) or (c) hereof.
(a) If the Employee has remained continuously in the employ of the savings
bank until her Normal Retirement Date, the Supplemental Retirement
Benefit to which she will be entitled pursuant to this Paragraph 3
shall be an amount equal to (1) minus (2) where
(1) is the "Basic Floor Benefit" equal to 75% of the high five-year
average salary as defined in the Qualified Plan; and where
(2) is an "adjusted Pension Benefit" which is the actuarial
equivalent of the normal form of benefit under the Qualified Plan
payable in the form of a life annuity in monthly installments to
the Employee with a provision that if the Employee should die
after the commencement of the monthly installments but before two
hundred forty (240) installments have fallen due, the remainder
of such two hundred forty (240) monthly installments would be
paid to the Employee's beneficiaries.
The Supplemental Retirement Benefit determined according to the terms of this
subparagraph 3 (a) shall be payable to the Employee
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in the form of monthly installments commencing on the Employee's Normal
Retirement Date and continuing throughout two hundred forty (240) months;
provided however that in the event
(1) the Employee dies; and
(2) the payment of monthly installments have theretofore
commenced to the Employee; and
(3) two hundred forty (240) monthly installments have not fallen
due; then
the monthly installments shall be paid to the Employee's beneficiaries for the
balance of the period until the remainder of such two hundred forty (240)
monthly installments have been paid.
(b) If the Employee elects to take an early retirement, the Supplemental
Retirement Benefit to which the Employee shall be entitled pursuant to
this Paragraph 3 shall be her Accrued Benefit as of this Early
Retirement Date.
(1) Year means the Plan Year of the Qualified Plan, for the purposes
of this subparagraph (b).
(2) Continuous Participation means those complete Years of the
Employee's participation in this Agreement from the effective
date of this Agreement.
(3) Accrued Benefit is defined as the Supplemental Retirement Benefit
computed in subparagraph 3 (a) above multiplied by a fraction not
greater than one (1) of (i) over (ii) where
(i) is the number of Years of Continuous Participation; and
where
(ii) is the total number of Years of Continuous Participation
that the Employee would have completed had she continued in
the employ of the savings bank until her Normal Retirement
Date,
reduced further by one-fifteenth (1/15) for each of the first five (5) years and
one-thirtieth (1/30) for each of the next five (5) years by which the starting
date of such benefit precedes the Normal Retirement Date, and reduced
actuarially for each additional year thereafter.
(4) The Supplemental Retirement Benefit determined according to
the terms of this subparagraph 3 (b) shall be payable to the
Employee in the form of monthly installments commencing on
the Employee's Early Retirement Date and continuing
throughout the two hundred forty (240) months; provided
however, that in the event
(1) the Employee dies; and
(2) the payment of monthly installments have theretofore
commenced to the Employee; and
(3) two hundred forty (240) monthly installments have not
fallen due; then
the monthly installments shall be paid to the Employee's beneficiaries for the
balance of the period until the remainder of such two hundred forty (240)
monthly installments have been paid.
(c) If the employment of the Employee with the savings bank shall
terminate due to disability or change of control or ownership of the
savings bank prior to her Normal Retirement Date the Supplemental
Retirement Benefit to which the Employee shall be entitled pursuant to
this Paragraph 3 shall be her Accrued Benefit as of her Termination
Date.
(1) Year means the Plan Year of the Qualified Plan, for the purposes
of this subparagraph (c).
(2) Continuous Participation means those complete Years of the
Employee's participation in this Agreement from the effective
date of this Agreement.
(3) Termination Date means June 30 of the Year ending immediately
prior to the Year in which the Employee's employment with the
savings bank terminates.
(4) Accrued Benefit is defined as the Supplemental Retirement Benefit
computed in subparagraph 3 (a) above multiplied by a fraction not
greater than one (1) of (i) over (ii) where
(i) is the number of Years of Continuous Participation; and
where
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(ii) is the total number of Years of Continuous Participation
that the Employee would have completed had she continued in
the employ of the savings bank until her Normal Retirement
Date.
(5) Time of Payment. The Accrued Benefit will be paid to the Employee
as a monthly annuity upon her Normal Retirement Date.
(d) Notwithstanding anything herein to the contrary, if the Employee
terminates employment after attainment of her Normal Retirement Date,
her Supplemental Retirement Benefit payable monthly will be calculated
in accordance with the terms of subparagraph 3 (a) plus .8% of the
monthly Qualified Plan benefit for each full month of deferral of
commencement of retirement payments after age 65.
4. Pre-Retirement Death Benefit
----------------------------
If the Employee shall die prior to her Normal Retirement Date, her
beneficiaries, as determined in accordance with Paragraph 5 hereof, shall
be entitled to receive, in the manner specified in subparagraph 4 (b) and
Paragraph 6 hereof, such benefits determined as follows:
(a) The monthly Pre-Retirement Death Benefit to be payable pursuant to
this Paragraph 4 shall be one hundred percent (100%) of the amount of
net death benefit received by the savings bank from the life insurance
policy or policies plus net taxes saved by the savings bank based upon
the payout of the principal funds.
(b) Benefit payments referred to in subparagraph 4 (a) shall commence upon
the first month following the date of the death of the Employee and
shall be paid over a period of sixty (60) months.
5. Beneficiary of Death Benefit
----------------------------
In the event that the Employee shall die prior to receipt of any benefit to
which he is entitled hereunder, or of all such benefits, any benefits
remaining unpaid shall be paid to such beneficiary or beneficiaries as the
Employee may designate by filing with the savings bank a notice in writing,
but in the absence of any such designation, such unpaid benefits shall be
so paid to her surviving spouse, if any. If the unpaid amounts are not
fully paid out to the Employee's designated beneficiaries or to her
surviving spouse, then the balance remaining unpaid shall be computed and
paid in single lump sum to the Employee's estate.
6. Installment Payment of Death Benefit
------------------------------------
Whenever the Employee's beneficiaries, other than her estate, shall become
entitled to receive any benefit hereunder, the benefit shall be paid to
such beneficiaries in monthly installments.
(a) in the event that no monthly installment payments have theretofore
commenced to the Employee, over a period of sixty (60) months; or
(b) in the event that payment of monthly installments shall have
theretofore commenced to Employee, and two hundred forty (240) monthly
installments have not fallen due, for the balance of the period until
the remainder of such two hundred forty (240) monthly installments
have been paid.
7. Non-Assignable Rights
---------------------
Except as otherwise provided by this Agreement, it is agreed that neither
the Employee nor her spouse, nor other beneficiary, shall have any right to
commute, sell, assign, transfer or otherwise convey the right to receive
any payments hereunder, which payments and the right thereto are expressly
declared to be non-assignable and non-transferable.
8. Independence of Agreement
-------------------------
The benefits payable under this Agreement shall be independent of, and in
addition to, any other employment agreement that may exist from time to
time between the parties hereto, or any other compensation payable by the
savings bank to the Employee, whether as salary, bonus, or otherwise. This
Agreement shall not be deemed to constitute a contract of employment
between the parties hereto, nor shall any provision hereof restrict the
right of the savings bank to discharge the Employee, or
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restrict the right of the Employee to terminate his employment with the
savings bank.
9. Non-Secured Promise
-------------------
The rights of the Employee under this Agreement and of any beneficiary of
the Employee shall be solely those of an unsecured creditor of the savings
bank. Any insurance policy or any other asset acquired or held by the
savings bank in connection with the liabilities assumed by it hereunder
shall not, except as otherwise expressly provided, be deemed to be security
for the performance of the obligations of the savings bank, but shall be,
and remain, a general, unpledged, unrestricted asset of the savings bank.
10. Change of Business Form
-----------------------
The savings bank agrees that it will not merge or consolidate with any
other corporation or organization, or permit its business activities to be
taken over by any organization, unless and until the succeeding or
continuing corporation or other organization shall expressly assume the
rights and obligations of the savings bank as herein set forth. The savings
bank further agrees that it will not cease doing business activities or
terminate its existence other than as heretofore set forth in this
Paragraph 10, without having made adequate provision for fulfilling its
obligations hereunder. In the event of any default with respect to the
provisions of this Paragraph 10, the Employee (or other obligee or
obligees) shall have a continuing lien on all the savings bank's assets,
including already transferred assets, until such default be corrected.
11. Amendment of Agreement
----------------------
This Agreement may be revoked or amended in whole or in part by a writing
signed by both of the parties hereto.
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