AMENDMENT TO SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFIT AGREEMENT
AMENDMENT
TO SUPPLEMENTAL EXECUTIVE
RETIREMENT
BENEFIT AGREEMENT
THIS
AMENDMENT is made
on this 14th day of
March, 2005 by and among HARLEYSVILLE
MANAGEMENT SERVICES, LLC (the
“Company”), a
limited liability company, and XXXXXX
X. XXXXXX, XX. (the
“Employee”).
WITNESSETH:
WHEREAS, the
Employee and The Harleysville National Bank and Trust Company (the “Bank”)
entered into a Supplemental Executive Retirement Benefit Agreement on June 20,
2002 (the “SERP
Agreement”).
WHEREAS, the
Bank assigned all of its rights and duties under the SERP Agreement to the
Company on June 12, 2004.
WHEREAS, the
SERP Agreement provides that if the Employee retires from the Company’s
employment on or after his 65th
birthday, the Company will pay a monthly supplemental retirement income to the
Employee, each monthly payment of which will equal the Employee’s “Monthly
Retirement Benefit” (as defined in the SERP Agreement).
WHEREAS, the
SERP Agreement provides that such monthly payments will start on the first day
of the first month after the effective date of the Employee’s retirement, and
will continue until the later of (i) the first day of the month during which the
Employee dies or (ii) the date of the 120th monthly
payment, and that if the Employee dies before receiving the minimum 120 monthly
payments, the remaining payments will be made to the Employee’s designated
beneficiary.
WHEREAS, the
SERP Agreement does not permit the Employee or the Company to vary the time or
form of payment of these retirement benefits, and benefits under the SERP
Agreement are payable solely from the general assets of the Company, and not
from any trust, escrow, or other segregated fund.
WHEREAS,
the
Employee has attained age sixty-five (65);
WHEREAS, the
Bank, the Employee, and Harleysville National Corporation (“HNC”)
entered into a Consulting Agreement and General Release as of November 12, 2004
(the “Consulting
Agreement”), which
provides, inter
alia, that
the Employee will end his employment and retire from all offices and positions
with HNC, the Company, and their subsidiaries (other than his position as
chairman of the Board of Directors of HNC and the Company and a member of the
board of directors of HNC and the Company) effective April 1, 2005, and that the
Employee will provide consulting services to HNC and the Company from April 1,
2005 through March 31, 2008.
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WHEREAS, Section
409A of the Internal Revenue Code (the “Code”), which
was added to the Code by the American Jobs Creation Act of 2004, generally
provides that unless a “nonqualified deferred compensation plan” for an employee
includes certain specified provisions and is operated in accordance with such
provisions during the taxable year, all compensation deferred under such plan
for such year and all prior years will be includible in the employee’s gross
income for such year for federal income-tax purposes.
WHEREAS, Section
409A of the Code generally requires that a “nonqualified deferred compensation
plan” provide that compensation deferred under the plan may not be distributed
before the earliest of certain specified dates—one of which, in the case of a
“specified employee,” is the date six (6) months after the date of the
employee’s separation from service (or, if earlier, the date of death of the
employee).
WHEREAS, the
Company and the Employee desire to amend the SERP Agreement as set forth below
in order to assure compliance with the requirements of Section 409A of the
Code.
AGREEMENT:
(1)
Section 2(a) of the SERP Agreement shall be amended and completely restated to
read as follows:
“If the
Employee retires from employment with the Company on or after his sixty-fifth
(65th)
birthday, in addition to any other retirement benefits to which Employee may be
entitled whether from the Company or otherwise, each month the Company shall pay
to him a supplemental retirement income equal to his “Monthly Retirement
Benefit” as defined below. Said supplemental retirement income shall be payable
in monthly payments commencing the first day of the seventh (7th) month
after the month in which falls the effective date of the Employee’s said
retirement, and continuing the first day of each month thereafter so long as
Employee shall live. On the date of the first monthly retirement income payment,
the Company shall also pay to the Employee an amount equal to the sum of the
monthly retirement income payments which the Employee would have received prior
to such date if the Company had been obligated to pay monthly retirement income
payments commencing the first day of the first month after the month in which
falls the effective date of the Employee’s said retirement. Notwithstanding the
foregoing to the contrary, the Company is obligated hereunder to make a minimum
of one hundred twenty (120) such monthly retirement income payments. If the
Employee dies before receiving said minimum number of monthly payments, the
remaining payments shall be made to the Employee’s designated beneficiary.”
(2) The
amendment set forth in Section (1) shall be effective immediately. Except as
otherwise provided in Section (1) above, the SERP Agreement shall continue in
effect without change, and is hereby deemed to be re-executed and reaffirmed by
the Company and the Employee.
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IN
WITNESS WHEREOF, the
Company has caused this Amendment to the SERP Agreement to be executed on its
behalf and its seal to be affixed by duly authorized individuals, and the
Employee has hereunto set his hand and sale, as of the day and year first above
written.
HARLEYSVILLE
MANAGEMENT
ATTEST: SERVICES,
LLC
__/s/
Xxxxxxx X. High__ By:___/s/
Xxxxx X. Wagner__________
Title:
___EVP
& CFO _______ Title:
___Treasurer_______________
Employee:
___/s/
Xxxxxx X. Xxxxx, Xx.______________
Xxxxxx
X. Xxxxxx, Xx.
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