409A Amendment to the Centra Bank, Inc. Executive Supplemental Retirement Plan Executive Agreement for Douglas J. Leech, Jr.
Exhibit 10.37
409A Amendment
to the
Centra Bank, Inc.
Executive Supplemental Retirement Plan Executive Agreement for
Xxxxxxx X. Xxxxx, Xx.
to the
Centra Bank, Inc.
Executive Supplemental Retirement Plan Executive Agreement for
Xxxxxxx X. Xxxxx, Xx.
Centra Bank, Inc. (“Bank”) and Xxxxxxx X. Xxxxx, Xx. (“Executive”) originally entered into the
Centra Bank, Inc. Executive Supplemental Retirement Plan Executive Agreement (“Agreement”) on April
20, 2000. Pursuant to Subparagraph V (C) of the Agreement, the Bank and the Executive hereby adopt
this 409A Amendment, effective January 1, 2005.
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.
Therefore, the following changes shall be made:
| 1. | Subparagraph I (E), “Termination of Service”, shall be deleted in its entirety and replaced with the following Subparagraph I (E): |
Termination of Service shall mean the Executive’s voluntary resignation of service by the
Executive or the Bank’s discharge of the Executive with or without cause, prior to age sixty
(60).
| 2. | Subparagraph I (J), “Change of Control”, shall be deleted in its entirety and replaced with the following Subparagraph I (J): |
Change in Control:
“Change in Control” shall mean a change in ownership or control of the Bank as defined in
Treasury Regulation §1.409A-3(i)(5) or any subsequently applicable Treasury Regulation.
| 3. | The following provision regarding “Separation from Service” distributions shall be added as a new subparagraph (L) under Section I, as follows: |
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).
An Executive who remains in the employ of the Bank until the Normal Retirement Age
[Subparagraph I (K)] shall be entitled to receive the balance in the Pre-Retirement Account
in fifteen (15) equal annual installments commencing thirty (30) days following the
Executive’s retirement. In addition to these payments and commencing in conjunction
therewith, the Index Retirement Benefit [Subparagraph I (G)] for each Plan Year
subsequent to the Executive’s retirement, and including the remaining portion of the Plan
Year following said retirement, shall be paid annually to the Executive until the
Executive’s death.
Notwithstanding the foregoing, the total amount of said benefit [i.e., the Pre-Retirement
Account and the Index Retirement Benefit combined for fifteen (15) years, or the Index
Retirement Benefit alone after the Pre-Retirement Account Benefit expires in fifteen (15)
years] to be received by the Executive said benefit shall be guaranteed minimum of One
Hundred Fifty Thousand Dollars and NO/100 ($150,000.00) for so long as the Executive
receives a benefit hereunder.
An illustration of the calculation of the Retirement Benefits as set forth herein is
attached hereto and marked as Exhibit “A”. Except for the $150,000.00 minimum benefit set
forth hereinabove, the numbers referred to in said Exhibit A are not actual nor
representative of any Retirement Benefits that may be actually calculated per this Executive
Agreement. Exhibit A is attached hereto merely for illustrative purposes.
| 5. | Subparagraph II (B), “Early Retirement”, shall be deleted in its entirety and replaced with the following Subparagraph II (B): |
Should the Executive elect Early Retirement or be discharged by the Bank subsequent to
attaining age sixty (60), but prior to Normal Retirement Age, the Executive shall be
entitled to receive the balance in the Pre-Retirement Account paid in fifteen (15) equal
annual installments commencing thirty (30) days following the Executive’s early retirement.
In addition to these payments and commencing in conjunction therewith, the Index Retirement
Benefit for each Plan Year subsequent to the year in which the Executive retires early, and
including the remaining portion of the Plan Year in which the Executive retires early, shall
be paid annually to the Executive until the Executive’s death.
Notwithstanding the foregoing, the total amount of said benefit (i.e., the Pre-Retirement
Account and the Index Retirement Benefit combined, or the Index Retirement Benefit alone
after the Pre-Retirement Account Benefit expires) to be received by the Executive in the
first fifteen (15) years of receipt of said benefit shall be a guaranteed minimum of One
Hundred Fifty Thousand Dollars and NO/100 ($150,000.00). After the Executive has received
fifteen (15) annual benefit payments as set forth herein, then there shall not be any
minimum guaranteed benefit and the Executive shall continue to receive only those benefits
set forth hereinabove.
An illustration of the calculation of the Early Retirement Benefits as set forth herein is
attached hereto and marked as Exhibit “A”. Except for the $150,000.00 minimum benefit set
forth hereinabove, the numbers referred to in said Exhibit A are not actual nor
representative of any Early Retirement Benefits that may be actually calculated per this
Executive Agreement. Exhibit A is attached hereto merely for illustrative purposes.
Should the Executive suffer a Termination of Service, the Executive shall be entitled to
receive the balance in the Pre-Retirement Account payable to the Executive in fifteen (15)
equal annual installments commencing thirty (30) days following the Executive’s termination.
In addition to these payments and commencing in conjunction therewith, the Index Retirement
Benefit for each Plan Year subsequent to the year in which the Executive is terminated, and
including the remaining portion of the Plan Year in which the Executive is terminated, shall
be paid annually to the Executive until the Executive’s death.
Notwithstanding the foregoing, the total amount of said benefit (i.e., the Pre-Retirement
Account and the Index Retirement Benefit combined, or the Index Retirement Benefit alone
after the Pre-Retirement Account Benefit expires) to be received by the Executive in the
first fifteen (15) years of receipt of said benefit shall be a guaranteed minimum of One
Hundred Fifty Thousand Dollars and NO/100 ($150,000.00). After the Executive
has received fifteen (15) annual benefit payments as set forth herein, then there shall not
be any minimum
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guaranteed benefit and the Executive shall continue to receive only those
benefits set forth hereinabove.
An illustration of the calculation of Termination of Service as set forth herein is attached
hereto and marked as Exhibit “A”. Except for the $150,000.00 minimum benefit set forth
hereinabove, the numbers referred to in said Exhibit A are not actual nor representative of
any Termination of Service Benefits that may be actually calculated per this Executive
Agreement. Exhibit A is attached hereto merely for illustrative purposes.
In the event the Executive becomes Disabled prior to Normal Retirement Age, he shall begin
receiving one hundred percent (100%) of the benefit in Subparagraph II (A) above on the
first occur of the (i) termination of the Bank’s long term Disability benefits; or (ii)
Executive’s attainment of Age sixty-five (65). “Disability” shall mean Executive: (i) is
unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of
any medically determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees of the Bank. Medical determination of
Disability may be made by either the Social Security Administration or by the provider of an
accident or health plan covering employees of the Bank, provided that the definition of
Disability applied under such Disability insurance program complies with the requirements of
Section 409A. Upon the request of the Plan Administrator, the Executive must submit proof
to the Plan Administrator of Social Security Administration’s or the provider’s
determination.
8. A new Subparagraph II (G) shall be added as follows:
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.
| 9. | A new Subparagraph II (H) shall be added as follows: |
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).
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| 10. | Section IV, “Change of Control”, shall be deleted in its entirety and replaced with the following Section IV: |
CHANGE IN CONTROL
Upon a Change in Control [Subparagraph I (J)], the Executive shall receive the benefits
promised in Subparagraph II (A) of this Executive Plan upon attaining Normal Retirement Age
in the same form and with the same timing as described in Subparagraph II (A). The
Executive will also remain eligible for all promised death benefits in this Executive Plan.
In addition, no sale, merger, or consolidation of the Bank shall take place unless the new
or surviving entity expressly acknowledges the obligations under this Executive Plan and
agrees to abide by its terms.
| 11. | A new Subparagraph V (L) shall be added as follows: |
The Bank may permit a subsequent change to the time and form of benefit distributions. Any
such change shall be considered made only when it becomes irrevocable under the terms of the
Agreement. Any change will be considered irrevocable not later than thirty (30) days
following acceptance of the change by the Plan Administrator, subject to the following
rules:
| (1) | the subsequent deferral election may not take effect until at least twelve (12) months after the date on which the election is made; | ||
| (2) | 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 (5) years from the date such payment would otherwise have been paid; and | ||
| (3) | 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. |
| Therefore, the foregoing changes are agreed to. | ||||||||||
| /s/ Xxxxx X. Xxxxxx, Xx. VP and CFO | /s/ Xxxxxxx X. Xxxxx, Xx. | |||||||||
| For the Bank | Xxxxxxx X. Xxxxx, Xx. | |||||||||
Date
|
December 24, 2008
|
Date | December 24, 2008
|
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