FIRST AMENDMENT TO THE TWO RIVER COMMUNITY BANK SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT DATED JANUARY 1, 2005 FOR ALAN B. TURNER
Exhibit
10.20
TWO RIVER
COMMUNITY BANK
FIRST
AMENDMENT
TO
THE
TWO
RIVER COMMUNITY BANK
DATED
JANUARY 1, 2005
FOR
XXXX
X. XXXXXX
THIS FIRST AMENDMENT is executed on
this 31st day of
October, 2008, to be deemed to have been effective as of January 1, 2005, by and
between Two River Community Bank, a New Jersey-chartered commercial bank the
principal address of which is 0000 Xxxxxxx 00 Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, and Xxxx X. Xxxxxx (the “Executive”).
WHEREAS, Two River Community Bank and
the Executive executed that certain Supplemental Executive Retirement Agreement
(the “Agreement”) dated January 1, 2005, which Agreement had an Effective Date
of November 1, 2004; and
WHEREAS, Two River Community
Bank and the Executive wish to amend the Agreement as, and to the extent, set
forth in this First Amendment for the purpose of
bringing the Agreement into full compliance with Section 409A of the Internal
Revenue Code and the Treasury Regulations which have been implemented under
Section 409A of the Code.
NOW, THEREFORE, the Agreement is
amended as follows:
The following Section 1.0 shall be
added to the Agreement immediately preceding Section 1.1:
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1.0
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“Bank” means,
for all purposes of this Agreement, Two River Community Bank and all of
those entities (including, as of the date of this Amendment, Community
Partners Bancorp and The Town Bank) which are within the same controlled
group of corporations within the meaning of Section 1563(a) of the Code as
is Two River Community Bank and which are, with Two River Community Bank,
deemed to be a single employer by the application of Section 414(b) of the
Code, all of which entities (including Two River Community Bank) shall be
conclusively deemed for all purposes of the Agreement to be a single
entity and a single recipient of the services provided by the Executive to
any such entity, or any combination of such
entities.
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Section
1.13 of the Agreement shall be deleted in its entirety and replaced by the
following:
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TWO RIVER
COMMUNITY BANK
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1.13 “Separation
from Service” means the
termination of the Executive’s employment
with
the Bank under circumstances which meet the standards set forth in this
Section 1.13, for reasons other than death. Whether a Separation
from Service takes place shall be determined in accordance with the
applicable provisions of Code Section 409A and all related United States
Department of the Treasury guidance or Regulations, and shall be based
upon whether the facts and circumstances surrounding the termination of
the Executive’s employment indicate that the Bank and the Executive
reasonably anticipate that the Executive either (i) will provide no significant
services in any capacity for the Bank or any affiliate following such
termination, or (ii) will, as an employee or
independent contractor, provide services to the Bank or any
affiliate of the Bank following such
termination of employment at an annual rate which
is not more than twenty percent (20%) of the services rendered, on
average, during the immediately preceding thirty six (36) full calendar
months (or the full period
for which the Executive provided services to the Bank (whether as an
employee or as an independent contractor) if the Executive has, at the
time of the termination of the Executive’s employment, been providing
services for a period of less than thirty six (36) months).
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The Executive’s employment
relationship will be treated as continuing intact while the Executive is on military leave,
sick leave, or other bona fide leave of absence if the period of such
leave of absence does not exceed six (6) months, or if longer,
for
so long as
the Executive’s right to reemployment
with the Bank is provided either by
statute or by contract. If the period of leave exceeds six (6)
months and there is no right to reemployment, a Separation from
Service
will be deemed to have occurred as of the first day immediately following
such six (6) month period.
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The following Section 1.13a shall be
added to the Agreement immediately following Section 1.13:
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1.13a
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“Specified
Employee” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any stock of
the Bank is publicly traded on an established securities market or
otherwise, as conclusively determined by the Plan Administrator based on
the twelve (12) month period ending each December 31 (the “identification
period”). If the Executive is determined to be a Specified
Employee for an identification period, the Executive shall be treated as a
Specified Employee for purposes of this Agreement during the twelve (12)
month period that begins on the first day of the fourth month following
the close of the identification period.
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Sections
2.1 and 2.1.2 of the Agreement shall be deleted in their entirety and replaced
by the following:
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2.1
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Normal Retirement
Benefit. Upon Normal Retirement Age, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in
lieu of any other benefit under this
Article.
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2.1.2
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Distribution of
Benefit. The Bank shall distribute the annual benefit to
the Executive in twelve (12) equal monthly installments commencing on the
first day of the month following the Executive’s sixty-fifth (65th)
birthday. The annual benefit shall be distributed for fifteen
(15) years.
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2
Sections
2.3 and 2.3.1 of the Agreement shall be deleted in their entirety and replaced
by the following:
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2.3
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Disability
Benefit. Upon
Disability prior to Normal Retirement Age, the Bank shall distribute to
the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.
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2.3.1
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Amount
of Benefit. The
benefit under this Section 2.3 is the Disability benefit set forth on
Schedule A for the Plan Year that ended immediately prior to the date on
which Disability occurs.
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Section 2.4.3 of the Agreement shall
be deleted in its entirety and replaced by the following:
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2.4.3
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Parachute
Payments. The Bank and the Executive (i) acknowledge
that a separate Excise Tax Reimbursement Agreement pertaining to Section
280G of the Code and the excise tax imposed on excess parachute payments
under Section 4999 of the Code has been executed by the Bank and the
Executive, the terms of which are applicable to all compensation payments,
including the compensation payments made under this Agreement, which may
be subject to Section 280G of the Internal Revenue Code of 1986, and (ii)
acknowledge their respective intentions to fully abide by the terms of the
Excise Tax Reimbursement Agreement.
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Section
2.5 of the Agreement shall be deleted in its entirety and replaced by the
following:
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2.5
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Restriction on Timing
of Distributions. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified
Employee at Separation from Service, the provisions of this Section 2.5
shall govern all distributions hereunder. Benefit distributions
that are made due to a Separation from Service occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Separation from Service, rather any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner
specified.
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The
following Sections 2.6 and 2.7 shall be added to the Agreement immediately
following Section 2.5:
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2.6
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Distributions Upon
Income Inclusion Under Section 409A of the Code. If any
amount is required to be included in income by the Executive prior to
receipt due to a failure of this Agreement to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of that
portion the amount the Bank has accrued with respect to the Bank’s
obligations hereunder that is required
to be included in the Executive’s income. Upon the grant of
such a petition, which grant shall not be unreasonably withheld, the Bank
shall distribute to the Executive immediately available funds in an amount
equal to the portion of the amount the Bank has accrued with respect to
the Bank’s obligations hereunder required to be included in income as a
result of the failure of this Agreement to meet the requirements of Code
Section 409A and related Treasury guidance or Regulations, which amount
shall not exceed the Executive's unpaid amount the Bank has accrued with
respect to the Bank’s obligations hereunder. If the petition is
granted, such distribution shall be made within ninety (90) days of the
date when the Executive's petition is granted. Such a
distribution shall affect and reduce the Executive’s benefits to be paid
under this Agreement.
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TWO RIVER
COMMUNITY BANK
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2.7
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Change in Form or
Timing of Distributions. All changes in the form or
timing of distributions hereunder must comply with the following
requirements. The
changes:
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(a)
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may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
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(b)
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must,
for benefits distributable under Sections 2.1 and 2.3, be made at least
twelve (12) months prior to the first scheduled
distribution;
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(c)
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must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be
made; and
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(d)
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must
take effect not less than twelve (12) months after the election is
made.
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Section
5.4 of the Agreement shall be amended as follows:
The words
and parenthetical expression “…twenty four (24)…” shall be deleted, and shall be
replaced by the words and parenthetical expression “…twelve (12)…”, it being the
intention of the Bank and the Executive to shorten the term of the Non-compete
Provision to twelve (12) months.
Article 8 of the Agreement shall be
deleted in its entirety and replaced by the following:
Article
8
Amendments
and Termination
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8.1
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Amendments. This
Agreement may be amended only by a written agreement signed for Two River
Community Bank and the Executive. However, Two River Community
Bank may unilaterally amend this Agreement to conform with written
directives to the Bank from its counsel, auditors or banking regulators,
or to comply with legislative changes or tax law, including without
limitation Section 409A of the Code and any and all Treasury regulations
and guidance promulgated
thereunder.
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TWO RIVER
COMMUNITY BANK
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8.2
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Plan Termination
Generally. This Agreement may be terminated only by a
written agreement signed for Two River Community
Bank and by the Executive. The benefit hereunder shall be the
amount that Two River Community Bank has accrued with respect to Two River
Community Bank’s obligations hereunder as of the date the Agreement is
terminated. Except as provided in Section 8.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, after such termination benefit distributions
will be made at the earliest distribution event permitted under Article 2
or Article 3.
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8.3
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Plan Terminations
Under Section 409A. Notwithstanding anything to the
contrary in Section 8.2, if this Agreement terminates in the following
circumstances:
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(a)
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Within
thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of the Agreement and further provided that
all the Bank's arrangements which are substantially similar to
the Agreement are terminated so the Executive and all participants in the
similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12)
months of the termination of the
arrangements;
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(b)
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Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
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(c)
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Upon
the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii)
all termination distributions are made no earlier than twelve (12) months
and no later than twenty-four (24) months following such termination, and
(iii) the Bank does not adopt any new arrangement that would be a Similar
Arrangement for a minimum of three (3) years following the date the Bank
takes all necessary action to irrevocably terminate and liquidate the
Agreement;
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then Two
River Community Bank may distribute the amount that Two River Community Bank has
accrued with respect to its obligations hereunder, determined as of the date of
the termination of the Agreement, to the Executive in a lump sum subject to the
above terms.
The following Section 9.10 shall be
added to the Agreement immediately following Section 9.9:
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TWO RIVER
COMMUNITY BANK
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9.10
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Compliance with Code
Section 409A. This Agreement shall be interpreted and
administered in a manner consistent with Code Section
409A.
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IN WITNESS OF THE ABOVE, the
Bank and the Executive hereby consent to this First Amendment.
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EXECUTIVE:
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TWO
RIVER COMMUNITY BANK
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/s/Xxxx
X. Xxxxxx
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By
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/s/Xxxxxxx
X. Xxxxxx
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Xxxx
X. Xxxxxx
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Title |
Chairman
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