EXHIBIT 10.5
AMENDED AND RESTATED
SUPPLEMENTAL INCOME AGREEMENT
THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered
into as of the 1st of July, 1989 and amended and restated this 14th day of
December, 1995 by and between Home Savings Bank, SSB, a mutual state savings
bank chartered under the laws of the State of North Carolina (the "Bank"), and
Xxxxxx X. Xxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, after July 1, 1989, the Bank converted its charter to a state
savings bank charter and changed its name from "Home Savings and Loan
Association of Washington," to "Home Savings Bank, SSB;"
WHEREAS, the Employee has been an employee of the Bank since June 17, 1985;
WHEREAS, the value of the Employee is such that assurance of her continued
service is essential to the future growth and profits of the Bank; and
WHEREAS, the Bank desires to retain the services of the Employee, and
realizes that if the Employee were to terminate her employment, the Bank would
suffer a substantial financial loss.
NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:
Section 1. Deferral Election. During the period of the Employee's
--------- -----------------
employment by the Bank, the Employee shall defer monthly a portion of her cash
compensation otherwise receivable by the Employee from the Bank.
Section 2. Retirement Benefits. Except as otherwise specifically provided
--------- -------------------
herein, upon the earlier of (a) the occurrence of the Employee's 65th birthday
(the "Retirement Age") and (b) the date of the Employee's retirement after her
60th birthday but before the Retirement Age ("Early Retirement Date"), the Bank
will pay the Employee $6,375 annually for a continuous period of fifteen (15)
years. The first annual payment will be made on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Retirement Age or Early Retirement
Date shall occur. Such annual payment shall be increased five percent (5%) for
each full year of service of the Employee occurring after July 1, 1990, except
that there will be no increases in benefits after the Employee reaches
Retirement Age and also no increases in benefits for more than ten (10) years of
additional service.
In the event that the Employee should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Employee has designated the Bank in writing
(the "Beneficiaries"). In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of eight percent (8%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, any amount remaining unpaid at the Employee's death
shall be commuted on the basis of eight percent (8%) per annum compounded
interest and shall be paid in a single sum to the Employee's estate.
Section 3. Pre-Retirement Death Benefits. Should the Employee die prior
--------- -----------------------------
to Retirement Age, the Bank will pay $6,375 annually for a continuous period of
fifteen (15) years to her Beneficiary or Beneficiaries. Such annual payment
shall be increased five percent (5%) for each full year of service of the
Employee occurring after July 1, 1990, except that there will be no increases in
benefits after the Employee reaches Retirement Age and also no increases in
benefits for more than ten (10) years of additional service. The first annual
payment will be made on a date to be determined by the Bank, but in no event
later than the first day of the sixth calendar month following the calendar
month in which the Employee's death occurred. In the event of the death of the
last living Beneficiary before all annual installment payments have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of eight percent (8%) per
annum compound interest and shall be paid in a single sum to the estate of the
last Beneficiary to die. In the absence of any such beneficiary designation,
any amount remaining unpaid at the Employee's death shall be commuted on the
basis of eight percent (8%) per annum compound interest and shall be paid in a
single sum to the Employee's estate.
Section 4. Termination of Employment.
--------- -------------------------
Should the Employee's employment by the Bank terminate other than by reason
of death, retirement upon the occurrence of the Retirement Age or retirement
upon the occurrence of the Early Retirement Date, the Employee or her
Beneficiary (or Beneficiaries), as applicable, shall be entitled upon the
occurrence of the earlier of the Retirement Age and the Employee's death to
receive the percentage of the annual installment payment stated in Section 2 of
this Agreement determined under the following table:
PERCENTAGE OF THE ANNUAL
FULL NUMBER OF YEARS SERVED INSTALLMENT PAYMENT
AS EMPLOYEE FROM DATE OF STATED IN SECTION 2 OF THIS
EMPLOYMENT UNTIL TERMINATION AGREEMENT TO WHICH THE
OF EMPLOYMENT EMPLOYEE IS ENTITLED
---------------------------- -------------------------------
Under 15 0%
15 50%
16 55%
17 60%
18 65%
19 75%
20 80%
21 85%
22 90%
23 95%
24 100%
2
Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the sixth calendar month following
the calendar month in which the Retirement Age or the Employee's death, as
applicable, occurs.
Notwithstanding the foregoing, should the Employee's employment be
terminated for any reason coincident with or within twenty-four (24) months
following a merger of the Bank with or into another business entity or a sale by
the Bank of a majority or more of its assets, then the Employee shall be deemed
to have retired as of her Early Retirement Date and the provisions of Section 2
shall be deemed applicable, except that the Early Retirement Date shall be
deemed the date that such merger or asset sale shall be consummated.
Section 5. General Provisions.
--------- ------------------
A. Except as otherwise provided by this Agreement, it is agreed that
neither the Employee, any Beneficiary nor any other person claiming
any right or interest under this Agreement through the Employee or any
Beneficiary shall have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder.
B. The benefits and rights provided under this Agreement are independent
of, and in addition to, those benefits and rights provided under any
other agreements between the parties hereto. This Agreement shall not
be deemed to constitute an agreement of employment between the parties
hereto or as restricting the right of the Bank to discharge the
Employee or the right of the Employee to terminate her employment.
C. The rights of the Employee under this Agreement and of any Beneficiary
shall be solely those of an unsecured creditor of the Bank. Any asset
acquired by the Bank in connection with its plans to fund its
liabilities hereunder shall not be deemed to be held under any trust
for the benefit of the Employee or her Beneficiaries or to be
considered security for the performance of the obligations of the Bank
but shall be, and remain, a general, unpledged, unrestricted asset of
the Bank.
D. This Agreement and the Bank obligations hereunder shall be binding
upon its successors and permitted assigns. The Bank may not assign its
rights or obligations hereunder without the Employee's prior written
consent. In addition, the Bank agrees it shall not enter into any
agreement providing for the merger of the Bank with and into another
business entity or the sale of more than a majority of the Bank's
assets to another business entity, person or group of persons that
does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every
obligation of the Bank to the Employee under this Agreement. In the
case of an asset sale, such assumption shall not relieve the Bank of
its liability to fulfill such obligations.
3
E. This Agreement may be revoked or amended in whole or in part by a
writing signed by both of the parties hereto.
F. This Agreement shall be subject to and construed under the laws of the
State of North Carolina.
Section 6. Claims and Review Procedures.
--------- ----------------------------
A. General. For the purposes of implementing a claims procedure under
-------
this Agreement as required by the Employee Retirement Income Security
Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
hereby designated as the named fiduciary and Plan Administrator of
this unfunded, nonqualified deferred compensation plan. If any person
believes he is being denied any rights or benefits under the
Agreement, such person may file a claim in writing with the Plan
Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 6.
B. Claims Procedure. If any claim filed hereunder is wholly or partially
----------------
denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner
calculated to be understood by the claimant and will contain:
(I) specific reasons for the denial,
(ii) specific reference to pertinent provisions of the Agreement on
which the Plan Administrator based its denial,
(iii) a description of any additional material or information
necessary for the claimant to perfect such claim and an
explanation of why such material or information is necessary,
and
(iv) information as to the steps to be taken if the claimant wishes
to submit a request for review.
Such notification will be given within ninety (90) days after the
claim is received by the Plan Administrator (or within 180 days, if
special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is
given to the claimant within the initial ninety (90) day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and the claimant
may request a review of his claim in accordance with Section 6.C.
hereof.
C. Review Procedure. Within sixty (60) days after the date on which a
----------------
claimant receives a written notice of a denied claim (or, if
applicable, within sixty (60) days
4
after the date on which such denial is considered to have occurred)
the claimant (or his duly authorized representative) may:
(I) file a written request with the Plan Administrator for a review
of his denied claim and of pertinent documents; and
(ii) submit written issues and comments to the Plan Administrator.
The Plan Administrator will notify the claimant of its decision in
writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain specific reasons for
the decision as well as specific references to perti nent provisions
of the Agreement. The decision on review will be made within sixty
(60) days after the request for review is received by the Plan
Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request
(such as an election by the Plan Administrator to hold a hearing), and
if written notice of such extension and circumstances is given to the
claimant within the initial sixty (60) day period.
IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Employee has hereunto set her hand and seal, all on the day
and year first above written.
HOME SAVINGS BANK, SSB
Attest:
/s/ Xxxx Xxxxx By: /s/ Xxxxxx X. Xxxx
------------------------ -----------------------------
Xxxx Xxxxx Xxxxxx X. Xxxx
Secretary
Title: President
[Corporate Seal] EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxx
---------------------------- (Seal)
Xxxxxx X. Xxxxxxx
5
AMENDED AND RESTATED
SUPPLEMENTAL INCOME AGREEMENT
THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered
into as of the 1st of July, 1989 and amended and restated this 14th day of
December, 1995 by and between Home Savings Bank, SSB, a mutual state savings
bank chartered under the laws of the State of North Carolina (the "Bank"), and
Xxxxxxx X. Xxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, after July 1, 1989, the Bank converted its charter to a state
savings bank charter and changed its name from "Home Savings and Loan
Association of Washington" to "Home Savings Bank, SSB;"
WHEREAS, the Employee has been an employee of the Bank since January 17,
1983;
WHEREAS, the value of the Employee is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and
WHEREAS, the Bank desires to retain the services of the Employee, and
realizes that if the Employee were to terminate his employment, the Bank would
suffer a substantial financial loss.
NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:
Section 1. Deferral Election. During the period of the Employee's
--------- -----------------
employment by the Bank, the Employee shall defer monthly a portion of his cash
compensation otherwise receivable by the Employee from the Bank.
Section 2. Retirement Benefits. Except as otherwise specifically provided
--------- -------------------
herein, upon the earlier of (a) the occurrence of the Employee's 65th birthday
(the "Retirement Age") and (b) the date of the Employee's retirement after his
60th birthday but before the Retirement Age ("Early Retirement Date"), the Bank
will pay the Employee $9,250 annually for a continuous period of fifteen (15)
years. The first annual payment will be made on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Retirement Age or Early Retirement
Date shall occur. Such annual payment shall be increased five percent (5%) for
each full year of service of the Employee occurring after July 1, 1990, except
that there will be no increases in benefits after the Employee reaches
Retirement Age and also no increases in benefits for more than ten (10) years of
additional service.
In the event that the Employee should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Employee has designated the Bank in writing
(the "Beneficiaries"). In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of eight percent (8%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, any amount remaining unpaid at the Employee's death
shall be commuted on the basis of eight percent (8%) per annum compounded
interest and shall be paid in a single sum to the Employee's estate.
Section 3. Pre-Retirement Death Benefits. Should the Employee die prior
--------- -----------------------------
to Retirement Age, the Bank will pay $9,250 annually for a continuous period of
fifteen (15) years to his Beneficiary or Beneficiaries. Such annual payment
shall be increased five percent (5%) for each full year of service of the
Employee occurring after July 1, 1990, except that there will be no increases in
benefits after the Employee reaches Retirement Age and also no increases in
benefits for more than ten (10) years of additional service. The first annual
payment will be made on a date to be determined by the Bank, but in no event
later than the first day of the sixth calendar month following the calendar
month in which the Employee's death occurred. In the event of the death of the
last living Beneficiary before all annual installment payments have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of eight percent (8%) per
annum compound interest and shall be paid in a single sum to the estate of the
last Beneficiary to die. In the absence of any such beneficiary designation,
any amount remaining unpaid at the Employee's death shall be commuted on the
basis of eight percent (8%) per annum compound interest and shall be paid in a
single sum to the Employee's estate.
Section 4. Termination of Employment.
--------- -------------------------
Should the Employee's employment by the Bank terminate other than by reason
of death, retirement upon the occurrence of the Retirement Age or retirement
upon the occurrence of the Early Retirement Date, the Employee or his
Beneficiary (or Beneficiaries), as applicable, shall be entitled upon the
occurrence of the earlier of the Retirement Age and the Employee's death to
receive the percentage of the annual installment payment stated in Section 2 of
this Agreement determined under the following table:
FULL NUMBER OF YEARS SERVED INSTALLMENT PAYMENT
AS EMPLOYEE FROM DATE OF STATED IN SECTION 2 OF THIS
EMPLOYMENT UNTIL TERMINATION AGREEMENT TO WHICH THE
OF EMPLOYMENT EMPLOYEE IS ENTITLED
--------------------------- ------------------------------
Under 20 0%
20 50%
21 55%
22 60%
23 65%
24 75%
25 80%
26 85%
27 90%
28 95%
29 100%
2
Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the sixth calendar month following
the calendar month in which the Retirement Age or the Employee's death, as
applicable, occurs.
Notwithstanding the foregoing, should the Employee's employment be
terminated for any reason coincident with or within twenty-four (24) months
following a merger of the Bank with or into another business entity or a sale by
the Bank of a majority or more of its assets, then the Employee shall be deemed
to have retired as of his Early Retirement Date and the provisions of Section 2
shall be deemed applicable, except that the Early Retirement Date shall be
deemed the date that such merger or asset sale shall be consummated.
Section 5. General Provisions.
--------- ------------------
A. Except as otherwise provided by this Agreement, it is agreed that
neither the Employee, any Beneficiary nor any other person claiming
any right or interest under this Agreement through the Employee or any
Beneficiary shall have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder.
B. The benefits and rights provided under this Agreement are independent
of, and in addition to, those benefits and rights provided under any
other agreements between the parties hereto. This Agreement shall not
be deemed to constitute an agreement of employment between the parties
hereto or as restricting the right of the Bank to discharge the
Employee or the right of the Employee to terminate his employment.
C. The rights of the Employee under this Agreement and of any Beneficiary
shall be solely those of an unsecured creditor of the Bank. Any asset
acquired by the Bank in connection with its plans to fund its
liabilities hereunder shall not be deemed to be held under any trust
for the benefit of the Employee or his Beneficiaries or to be
considered security for the performance of the obligations of the Bank
but shall be, and remain, a general, unpledged, unrestricted asset of
the Bank.
D. This Agreement and the Bank obligations hereunder shall be binding
upon its successors and permitted assigns. The Bank may not assign its
rights or obligations hereunder without the Employee's prior written
consent. In addition, the Bank agrees it shall not enter into any
agreement providing for the merger of the Bank with and into another
business entity or the sale of more than a majority of the Bank's
assets to another business entity, person or group of persons that
does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every
obligation of the Bank to the Employee under this Agreement. In the
case of an asset sale, such assumption shall not relieve the Bank of
its liability to fulfill such obligations.
3
E. This Agreement may be revoked or amended in whole or in part by a
writing signed by both of the parties hereto.
F. This Agreement shall be subject to and construed under the laws of the
State of North Carolina.
Section 6. Claims and Review Procedures.
--------- ----------------------------
A. General. For the purposes of implementing a claims procedure under
-------
this Agreement as required by the Employee Retirement Income Security
Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
hereby designated as the named fiduciary and Plan Administrator of
this unfunded, nonqualified deferred compensation plan. If any person
believes he is being denied any rights or benefits under the
Agreement, such person may file a claim in writing with the Plan
Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 6.
B. Claims Procedure. If any claim filed hereunder is wholly or partially
----------------
denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner
calculated to be understood by the claimant and will contain:
(i) specific reasons for the denial,
(ii) specific reference to pertinent provisions of the Agreement on
which the Plan Administrator based its denial,
(iii) a description of any additional material or information
necessary for the claimant to perfect such claim and an
explanation of why such material or information is necessary,
and
(iv) information as to the steps to be taken if the claimant wishes
to submit a request for review.
Such notification will be given within ninety (90) days after the
claim is received by the Plan Administrator (or within 180 days, if
special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is
given to the claimant within the initial ninety (90) day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and the claimant
may request a review of his claim in accordance with Section 6.C.
hereof.
C. Review Procedure. Within sixty (60) days after the date on which a
claimant receives a written notice of a denied claim (or, if
applicable, within sixty (60) days
4
after the date on which such denial is considered to have occurred)
the claimant (or his duly authorized representative) may:
(i) file a written request with the Plan Administrator for a review
of his denied claim and of pertinent documents; and
(ii) submit written issues and comments to the Plan Administrator.
The Plan Administrator will notify the claimant of its decision in
writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain specific reasons for
the decision as well as specific references to perti nent provisions
of the Agreement. The decision on review will be made within sixty
(60) days after the request for review is received by the Plan
Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request
(such as an election by the Plan Administrator to hold a hearing), and
if written notice of such extension and circumstances is given to the
claimant within the initial sixty (60) day period.
IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Employee has hereunto set his hand and seal, all on the day
and year first above written.
HOME SAVINGS BANK, SSB
Attest: By: /s/ Xxxxxx X. Xxxx
------------------------------
Xxxxxx X. Xxxx
/s/ Xxxx Xxxxx Title: President
------------------------
Xxxx Xxxxx
Secretary
[Corporate Seal] EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
5
AMENDED AND RESTATED
SUPPLEMENTAL INCOME AGREEMENT
THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME AGREEMENT, made and entered
into as of the 1st of July, 1989 and amended and restated this 14th day of
December, 1995 by and between Home Savings Bank, SSB, a mutual state savings
bank chartered under the laws of the State of North Carolina (the "Bank"), and
Xxxxxx X. Xxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, after July 1, 1989, the Bank converted its charter to a state
savings bank charter and changed its name from "Home Savings and Loan
Association of Washington," to "Home Savings Bank, SSB;"
WHEREAS, the Employee has been an employee of the Bank since September 1,
1972;
WHEREAS, the value of the Employee is such that assurance of his continued
service is essential to the future growth and profits of the Bank; and
WHEREAS, the Bank desires to retain the services of the Employee, and
realizes that if the Employee were to terminate his employment, the Bank would
suffer a substantial financial loss.
NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto mutually agree as follows:
Section 1. Deferral Election. During the period of the Employee's
--------- -----------------
employment by the Bank, the Employee shall defer monthly a portion of his cash
compensation otherwise receivable by the Employee from the Bank.
Section 2. Retirement Benefits. Except as otherwise specifically provided
--------- -------------------
herein, upon the earlier of (a) the occurrence of the Employee's 65th birthday
(the "Retirement Age") and (b) the date of the Employee's retirement after his
60th birthday but before the Retirement Age ("Early Retirement Date"), the Bank
will pay the Employee $19,250 annually for a continuous period of fifteen (15)
years. The first annual payment will be made on a date to be determined by the
Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Retirement Age or Early Retirement
Date shall occur. Such annual payment shall be increased five percent (5%) for
each full year of service of the Employee occurring after July 1, 1990, except
that there will be no increases in benefits after the Employee reaches
Retirement Age and also no increases in benefits for more than ten (10) years of
additional service.
In the event that the Employee should die after becoming entitled to
receive annual installment payments under this Agreement but before all of such
payments have been paid, the Bank will pay all remaining payments to such
beneficiary or beneficiaries as the Employee has designated the Bank in writing
(the "Beneficiaries"). In the event of the death of the last living
Beneficiary before all remaining unpaid payments have been made, the balance of
any payments at the time of such Beneficiary's death shall be commuted on the
basis of eight percent (8%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, any amount remaining unpaid at the Employee's death
shall be commuted on the basis of eight percent (8%) per annum compounded
interest and shall be paid in a single sum to the Employee's estate.
Section 3. Pre-Retirement Death Benefits. Should the Employee die prior
--------- -----------------------------
to Retirement Age, the Bank will pay $19,250 annually for a continuous period of
fifteen (15) years to his Beneficiary or Beneficiaries. Such annual payment
shall be increased five percent (5%) for each full year of service of the
Employee occurring after July 1, 1990, except that there will be no increases in
benefits after the Employee reaches Retirement Age and also no increases in
benefits for more than ten (10) years of additional service. The first annual
payment will be made on a date to be determined by the Bank, but in no event
later than the first day of the sixth calendar month following the calendar
month in which the Employee's death occurred. In the event of the death of the
last living Beneficiary before all annual installment payments have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of eight percent (8%) per
annum compound interest and shall be paid in a single sum to the estate of the
last Beneficiary to die. In the absence of any such beneficiary designation,
any amount remaining unpaid at the Employee's death shall be commuted on the
basis of eight percent (8%) per annum compound interest and shall be paid in a
single sum to the Employee's estate.
Section 4. Termination of Employment.
--------- -------------------------
Should the Employee's employment by the Bank terminate other than by reason
of death, retirement upon the occurrence of the Retirement Age or retirement
upon the occurrence of the Early Retirement Date, the Employee or his
Beneficiary (or Beneficiaries), as applicable, shall be entitled upon the
occurrence of the earlier of the Retirement Age and the Employee's death to
receive the percentage of the annual installment payment stated in Section 2 of
this Agreement determined under the following table:
PERCENTAGE OF THE ANNUAL
FULL NUMBER OF YEARS SERVED INSTALLMENT PAYMENT
AS EMPLOYEE FROM DATE OF STATED IN SECTION 2 OF THIS
EMPLOYMENT UNTIL TERMINATION AGREEMENT TO WHICH THE
OF EMPLOYMENT EMPLOYEE IS ENTITLED
---------------------------- -----------------------------------------------
Under 20 0%
20 50%
21 55%
22 60%
23 65%
24 75%
25 80%
26 85%
27 90%
28 95%
29 100%
2
Such annual payments shall commence on a date to be determined by the Bank,
but in no event later than the first day of the sixth calendar month following
the calendar month in which the Retirement Age or the Employee's death, as
applicable, occurs.
Notwithstanding the foregoing, should the Employee's employment be
terminated for any reason coincident with or within twenty-four (24) months
following a merger of the Bank with or into another business entity or a sale by
the Bank of a majority or more of its assets, then the Employee shall be deemed
to have retired as of his Early Retirement Date and the provisions of Section 2
shall be deemed applicable, except that the Early Retirement Date shall be
deemed the date that such merger or asset sale shall be consummated.
Section 5. General Provisions.
--------- ------------------
A. Except as otherwise provided by this Agreement, it is agreed that
neither the Employee, any Beneficiary nor any other person claiming
any right or interest under this Agreement through the Employee or any
Beneficiary shall have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder.
B. The benefits and rights provided under this Agreement are independent
of, and in addition to, those benefits and rights provided under any
other agreements between the parties hereto. This Agreement shall not
be deemed to constitute an agreement of employment between the parties
hereto or as restricting the right of the Bank to discharge the
Employee or the right of the Employee to terminate his employment.
C. The rights of the Employee under this Agreement and of any Beneficiary
shall be solely those of an unsecured creditor of the Bank. Any asset
acquired by the Bank in connection with its plans to fund its
liabilities hereunder shall not be deemed to be held under any trust
for the benefit of the Employee or his Beneficiaries or to be
considered security for the performance of the obligations of the Bank
but shall be, and remain, a general, unpledged, unrestricted asset of
the Bank.
D. This Agreement and the Bank obligations hereunder shall be binding
upon its successors and permitted assigns. The Bank may not assign its
rights or obligations hereunder without the Employee's prior written
consent. In addition, the Bank agrees it shall not enter into any
agreement providing for the merger of the Bank with and into another
business entity or the sale of more than a majority of the Bank's
assets to another business entity, person or group of persons that
does not specifically provide that such successor by merger or
purchaser(s) of assets shall assume and satisfy each and every
obligation of the Bank to the Employee under this Agreement. In the
case of an asset sale, such assumption shall not relieve the Bank of
its liability to fulfill such obligations.
3
E. This Agreement may be revoked or amended in whole or in part by a
writing signed by both of the parties hereto.
F. This Agreement shall be subject to and construed under the laws of
the State of North Carolina.
Section 6. Claims and Review Procedures.
--------- ----------------------------
A. General. For the purposes of implementing a claims procedure under
-------
this Agreement as required by the Employee Retirement Income Security
Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
hereby designated as the named fiduciary and Plan Administrator of
this unfunded, nonqualified deferred compensation plan. If any person
believes he is being denied any rights or benefits under the
Agreement, such person may file a claim in writing with the Plan
Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 6.
B. Claims Procedure. If any claim filed hereunder is wholly or partially
----------------
denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner
calculated to be understood by the claimant and will contain:
(i) specific reasons for the denial,
(ii) specific reference to pertinent provisions of the Agreement on
which the Plan Administrator based its denial,
(iii) a description of any additional material or information
necessary for the claimant to perfect such claim and an
explanation of why such material or information is necessary,
and
(iv) information as to the steps to be taken if the claimant wishes
to submit a request for review.
Such notification will be given within ninety (90) days after the
claim is received by the Plan Administrator (or within 180 days, if
special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is
given to the claimant within the initial ninety (90) day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and the claimant
may request a review of his claim in accordance with Section 6.C.
hereof.
C. Review Procedure. Within sixty (60) days after the date on which a
----------------
claimant receives a written notice of a denied claim (or, if
applicable, within sixty (60) days
4
after the date on which such denial is considered to have occurred)
the claimant (or his duly authorized representative) may:
(i) file a written request with the Plan Administrator for a review
of his denied claim and of pertinent documents; and
(ii) submit written issues and comments to the Plan Administrator.
The Plan Administrator will notify the claimant of its decision in
writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain specific reasons for
the decision as well as specific references to perti nent provisions
of the Agreement. The decision on review will be made within sixty
(60) days after the request for review is received by the Plan
Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request
(such as an election by the Plan Administrator to hold a hearing), and
if written notice of such extension and circumstances is given to the
claimant within the initial sixty (60) day period.
IN WITNESS WHEREOF, the Bank has caused this Amended and Restated
Supplemental Income Agreement to be signed in its corporate name by its duly
authorized officer, and impressed with its corporate seal, attested by its
Secretary, and the Employee has hereunto set his hand and seal, all on the day
and year first above written.
HOME SAVINGS BANK, SSB
Attest: By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxx Xxxxx Title: Executive Vice President
-----------------------------
Xxxx Xxxxx
Secretary
[Corporate Seal] EMPLOYEE:
/s/ Xxxxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxx
5
HOME SAVINGS BANK, SSB
SUPPLEMENTAL INCOME AGREEMENT
AS AMENDED AND RESTATED DECEMBER 14, 1995
____________________
1996 Amendment
____________________
WHEREAS, Home Savings Bank, SSB (the "Bank") has entered into a
Supplemental Income Agreement (the "Agreement"), originally effective July 1,
1989, as amended and restated effective December 14, 1995, with the following
officers: Xxxxxx X. Xxxx, Xxxxxxx X. Xxxxxxx, and Xxxxxx X. Xxxxxxx (the
"Officers"); and
WHEREAS, the Bank has authorized an amendment to the Agreement with
each Officer in order to address issues arising from the Bank's upcoming
conversion from mutual to stock form;
NOW, THEREFORE, pursuant to Section 5.E. of each Agreement, the
Agreement with each Officer is hereby amended as follows, effective immediately
on execution hereof:
1. Section 2 of each Agreement shall be amended by revising clause
(b) of its first sentence in its entirety to provide as follows:
(b) the date of the Employee's retirement before the Retirement
Age but after both attaining age 55 and completing at least 10
years of service with the Bank ("Early Retirement Date")
2. The next-to-the-last paragraph of Section 4 of each Agreement
shall be amended in its entirety to provide as follows:
Except as otherwise provided in Section 2 with respect to the
Employee's retirement at the Early Retirement Date: in the event
that the employment of the Employee terminates, for any reason
other than his death, prior to the time he is first entitled to
receive payments under this Agreement, the Employee or his
Beneficiaries, as applicable, shall be entitled, upon the
occurrence of the Employee's 55th birthday or prior death, to
receive such annual payments.
3. The last paragraph of Section 4 of the Agreement shall be amended
in its entirety to provide as follows:
Except as otherwise provided in Sections 2 or 3 as applicable,
in the event that, on or before the occurrence of an Employee's
Retirement Date or Early Retirement Date, a "Termination of
Protected Employment" occurs following a "Change in Control" (as
these terms are defined in the next two paragraphs), then the
Employee shall be deemed to have retired as of his Early
Retirement Date and
1996 Amendment
Supplemental Income Agreement
Page 2
the provisions of Section 2 shall be deemed applicable, except
that the Early Retirement Date shall be deemed to be the date that
such Change in Control shall occur.
4. Section 4 of the Agreement shall be amended further by adding the
following two paragraphs immediately at the end thereof:
For purposes of this Agreement, "Change in Control" shall mean
any one of the following events: (i) the acquisition of ownership,
holding, or power to vote more than 25% of the voting stock of the
Bank or NewSouth Bancorp, Inc. (the "Company"), (ii) the
acquisition of the ability to control the election of a majority
of the Bank's or the Company's directors, (iii) the acquisition of
a controlling influence over the management or policies of the
Bank or of the Company by any person or by persons acting as a
"group" (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934), or (iv) during any period of two
consecutive years, individuals (the "Continuing Directors") who at
the beginning of such period constitute the Board of Directors of
the Bank or of the Company (the "Existing Board") cease for any
reason to constitute at least two-thirds thereof, provided that
any individual whose election or nomination for election as a
member of the Existing Board was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. Notwithstanding the foregoing,
the Company's ownership of the Bank shall not of itself constitute
a Change in Control for purposes of the Agreement. For purposes of
this paragraph only, the term "person" refers to an individual or
a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization
or any other form of entity not specifically listed herein.
For purposes of this Agreement, a "Termination of Protected
Employment" shall occur if: (I) The Employee is terminated without
Just Cause, with "Just Cause" meaning, in the good faith
determination of the Bank's Board of Directors, the Employee's
personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, or rule or
regulation (other than traffic violations or similar offenses) or
final cease-and-desist order; provided that no act, or failure to
act, on the Employee's part shall be considered "willful" unless
he has acted, or failed to act, with an absence of good faith and
without a reasonable belief that his action or failure to act was
in the best interests of the Bank or of the Company; or (II) the
Employee voluntarily terminates employment for an event that
constitutes "Good Reason", which shall mean any of the following
events, that has not been consented to in advance by the Employee
in writing: (i) the requirement that the Employee move his
personal residence, or perform his principal executive functions,
more than 30 miles from his primary office as of
1996 Amendment
Supplemental Income Agreement
Page 3
the later of the Effective Date and the most recent voluntary
relocation by the Employee; (ii) a material reduction in the
Employee's base compensation in effect on the date of the Change
in Control; (iii) the failure by the Bank to continue to provide
the Employee with compensation and benefits in effect on the date
of the Change in Control, or with benefits substantially similar
to those provided to him under any of the employee benefit plans
in which the Employee now or hereafter becomes a participant, or
the taking of any action by the Bank which would directly or
indirectly reduce any of such benefits or deprive the Employee of
any material fringe benefit enjoyed by him; (iv) the assignment to
the Employee of duties and responsibilities materially different
from those normally associated with his position; (v) a failure to
reelect the Employee to the Board of Directors of the Bank, if the
Employee has served on such Board at any time during the term of
the Agreement; (vi) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting
responsibilities) in connection with his employment with the Bank;
or (vii) a material reduction in the secretarial or other
administrative support of the Employee.
5. Section 5 of the Agreement shall be amended by adding the
following paragraphs immediately at the end thereof:
Notwithstanding any other provision of this Agreement that may
be contrary or inconsistent herewith, not later than ten business
days after a Change in Control, the Bank shall (i) deposit in a
grantor trust (the "Trust") that is designed in accordance with
Revenue Procedure 92-64 and has a trustee independent of the Bank,
the Company and any successor to their interest, an amount equal
to the present value of all benefits that may become payable under
this Agreement, unless the Employee has previously provided a
written release of any claims under this Agreement, and (ii)
provide the trustee of the Trust with a written direction to hold
said amount and any investment return thereon in a segregated
account for the benefit of the Employee, and to follow the
procedures set forth in the next paragraph as to the payment of
such amounts from the Trust.
At any time or from time to time after a Change in Control,
the Employee may provide the trustee of the Trust with a written
schedule directing that the trustee pay to the Employee an amount
designated in the schedule as being payable pursuant to this
Agreement. Within three business days after receiving said notice,
the trustee of the Trust shall send a copy of the schedule to the
Bank via overnight and registered mail (return receipt requested).
On the fifth business day after mailing said notice to the Bank,
the trustee of the Trust shall pay the Employee the amount
designated therein in immediately available funds, unless prior
thereto the Bank provides the trustee with a written notice
directing the trustee to withhold such payment. In the latter
event, the trustee shall submit the
1996 Amendment
Supplemental Income Agreement
Page 4
dispute to non-appealable binding arbitration for a determination
of the amount payable to the Employee pursuant to this Agreement,
and the costs of such arbitration (including any attorneys' fees
incurred by the Employee) shall be paid by the Bank. The trustee
shall choose the arbitrator to settle the dispute, and such
arbitrator shall be bound by the rules of the American Arbitration
Association in making his determination. The parties and the
trustee shall be bound by the results of the arbitration and,
within three days of the determination by the arbitrator, the
trustee shall pay from the Trust the amounts required to be paid
to the Employee and/or the Bank, and in no event shall the trustee
be liable to either party for making the payments as determined by
the arbitrator.
Upon the receipt of the Employee's written release of all
claims under this Agreement, the trustee of the Trust shall pay to
the Bank the entire balance remaining in the segregated account
maintained for the benefit of the Employee. The Employee shall
thereafter have no further interest in the Trust pursuant to this
Agreement.
6. Nothing contained herein shall be held to alter, vary or affect
any of the terms, provisions, or conditions of the Agreement entered into
thereunder, other than as stated above.
1996 Amendment
Supllemental Income Agreement
Page 5
WHEREFORE, on this 23rd day of October, 1996, the Bank hereby executes
this 1996 Amendment to the Plan.
HOME SAVINGS BANK, SSB
By /s/ Xxxxxxxxx X. Howdy
----------------------------------
Its Chairman of the Board
October 23, 1996
------------------
Date Attest: Xxxxxxx X. Xxxx (Seal)
-----------------------------
Witness:
Xxxxxx X. Ipoch /s/ Xxxxxx X. Xxxx
------------------ ------------------------------------
Xxxxxx X. Xxxx
Witness:
Xxxxxx X. Ipoch /s/ Xxxxxxx X. Xxxxxxx
------------------ ------------------------------------
Xxxxxxx X. Xxxxxxx
Witness:
Xxxxxx X. Ipoch /s/ Xxxxxx X. Xxxxxxx
------------------ ------------------------------------
Xxxxxx X. Xxxxxxx
