EXECUTIVE SALARY CONTINUATION AGREEMENT THAT SUPERCEDES AND REPLACES THE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN AGREEMENT EFFECTIVE JANUARY 25, 2002, AS AMENDED
Exhibit
10.1
EXECUTIVE
SALARY CONTINUATION AGREEMENT THAT
SUPERCEDES
AND REPLACES
THE
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN AGREEMENT
EFFECTIVE
JANUARY 25, 2002, AS AMENDED
THIS
AGREEMENT, made and entered into this ____ day of July, 2007, by and
between Summit Community Bank, a bank, organized and existing under the laws
of
the State of West Virginia (hereinafter referred to as the “Bank”), and
_________________, an Executive of the Bank (hereinafter referred to as the
“Executive”).
WHEREAS,
the Bank and the Executive are parties to an Executive Supplemental
Retirement Plan Agreement effective the 25th day
of January, 2002, and thereafter amended, that provides for the payment of
certain benefits. This Executive Salary Continuation Agreement and
the benefits provided hereunder shall supercede and replace the existing
Executive Supplemental Retirement Plan Agreement and the benefits provided
thereby;
WHEREAS,
the Executive has been and continues to be a valued Executive of the
Bank;
WHEREAS,
the purpose of this Agreement is to further the growth and development of the
Bank by providing the Executive with supplemental retirement income, and thereby
encourage the Executive’s productive efforts on behalf of the Bank and the
Bank’s shareholders, and to align the interests of the Executive and those
shareholders.
WHEREAS,
it is the desire of the Bank and the Executive to enter into this Agreement
under which the Bank will agree to make certain payments to the Executive at
retirement or the Executive’s Beneficiary in the event of the Executive’s death
pursuant to this Agreement;
WHEREAS,
the Bank intends this Amendment and Restatement to comply with Final Regulations
and Transition Relief promulgated by the Internal Revenue Service pursuant
to
Code Section 409A, and accordingly, notwithstanding any other provisions of
this
Amended and Restated Agreement, this amendment applies only to amounts that
would not otherwise be payable in 2007 and shall not cause an amount to be
paid
in 2007 that would not otherwise be payable in such year, and to the extent
necessary to qualify under such Transition Relief to not be treated as a change
in the form and timing of a payment under section 409A(a)(4) or an acceleration
of a payment under section 409A(a)(3), the Executive, by executing this
Agreement, shall be deemed to have elected the form and timing of distribution
provisions of this Amended and Restated Agreement, on or before December 31,
2007.
ACCORDINGLY,
it is intended that the Agreement be “unfunded” for purposes of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) and not be
construed to provide income to the participant or beneficiary under the Internal
Revenue Code of 1986, as amended (the “Code”), particularly Section 409A of the
Code and guidance or regulations issued thereunder, prior to actual receipt
of
benefits; and
THEREFORE,
it is agreed as follows:
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I.
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EFFECTIVE
DATE
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Except
as
otherwise provided herein, the Effective Date of this Agreement shall be January
1, 2006.
II. FRINGE
BENEFITS
The
salary continuation benefits provided by this Agreement are granted by the
Bank
as a fringe benefit to the Executive and are not part of any salary reduction
plan or an arrangement deferring a bonus or a salary increase. The
Executive has no option to take any current payment or bonus in lieu of these
salary continuation benefits except as set forth hereinafter.
III. DEFINITIONS
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A.
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Retirement
Date:
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If
the
Executive remains in the continuous employ of the Bank until at least the
Executive’s Normal Retirement Age, (except as otherwise set forth in Paragraph
IX,) and provided that no determination of Disability of Executive, at any
time
prior to Executive’s Normal Retirement Age, has been made, (regardless of any
return to active service of Executive subsequent to any such determination
of
Disability,) the Executive’s Retirement Date shall be the date on which the
Executive attains the age of sixty-five (65) years or has a Separation from
Service, whichever is later.
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B.
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Normal
Retirement Age:
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Normal
Retirement Age shall mean the date on which the Executive attains age
___________ (___).
C. Plan
Year:
Any
reference to “Plan Year” shall mean a calendar year from January 1 to December
31. In the year of implementation, the term “Plan Year” shall mean
the period from the effective date to December 31 of the year of the effective
date.
D. Termination
of Employment:
Termination
of Employment shall mean voluntary resignation of employment by the Executive,
the Bank’s discharge of the Executive without cause (Subparagraph III [E]),
prior to the Normal Retirement Age (Subparagraph III [B]).
E. Separation
from Service:
“Separation
from Service” shall mean that the Executive has experienced a Termination of
Employment from the Bank. Where the Executive continues to perform
services for the Bank following a Termination of Employment, however, and the
facts and circumstances indicate that such services are intended by the Bank
and
the Executive to be more than “insignificant” services, a Separation from
Service will not be deemed to have occurred and any amounts deferred under
this
Agreement may not be paid or made available to the Executive. The
determination of whether such services are considered “insignificant” will be
based upon all facts and circumstances relating to the termination and upon
any
applicable rules and regulations issued under Section 409A of the
Code. Military leave, sick leave, or other bona fide leaves of
absence are not generally considered terminations of employment and whether
or
not any such leave of absence is a “Separation from Service” shall be determined
in accordance with any applicable rules and regulations issued under Section
409A of the Code.
F. Discharge
for Cause:
The
term
“for cause” shall mean for the conviction of Executive for commission of a
felony against the Bank or any Affiliate. If a dispute arises as to
discharge “for cause,” such dispute shall be resolved by arbitration as set
forth in this Executive Plan. In the alternative, if the Executive is
permitted to resign due to inappropriate conduct as defined above, the Board
of
Directors may vote to deny all benefits. A majority decision by the
Board of Directors is required for forfeiture of the Executive’s
benefits.
G.
Change
of Control:
“Change
of Control” shall mean (a) a change of ownership of the Bank or its parent
Company (“Company”) that would have to be reported to the Securities and
Exchange Commission as a Change of Control, including but not limited to the
acquisition by any “person” and/or entity as defined by securities regulations
and law, (other than the Company or the Bank or the Company or Bank employee
benefit plan) of direct or indirect “beneficial ownership” as defined, of
twenty-five percent (25%) or more of the combined voting power of the Bank’s or
the Company’s then outstanding securities; or (b) the failure during any period
of three (3) consecutive years of individuals who at the beginning of such
period constitute the Board of Bank or Company for any reason to constitute
at
least a majority thereof, unless the election of each director who was not
a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds (2/3) of the directors at the
beginning of the period; or (c) the consummation of a “Business Combination” as
defined in the Articles of Incorporation of Summit Financial Group,
Inc. With respect to (a) and (c) above, the date of a Change of
Control shall be deemed to be the date of the earlier of the date of (i)
consummation of the transaction involving the Change in Control, or (ii) the
execution of a definitive agreement by the Bank or Company involving a
transaction deemed to be a Change in Control.
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H.
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Restriction
on Timing of Distribution:
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Notwithstanding
any provision of this Agreement to the contrary, distributions under this Plan
to the Executive may not commence earlier than six (6) months after the date
of
a Separation from Service, as that term is used under Section 409A if, pursuant
to Code Section 409A, the Executive is considered a “specified employee” under
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 under this Plan is delayed pursuant to this paragraph, the
originally scheduled payment shall be delayed until six months after the date
of
Separation from Service and shall commence instead on the first day of the
seventh month following Separation from Service. If payments are
scheduled under this Plan 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 Separation from Service, after which all
installment payments shall be made on their regular schedule. If
payment is scheduled under this Plan to be made in a lump sum, the lump payment
shall be delayed until six months after the date of Separation from Service
and
instead be made on the first day of the seventh month after the date of
Separation from Service.
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I.
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Beneficiary:
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The
Executive shall have the right to name a Beneficiary of the Death
Benefit. Such Beneficiary shall also be the Beneficiary respecting
any distribution upon death under Paragraph XI. The Executive shall
have the right to name such Beneficiary at any time prior to the Executive’s
death and submit it to the Plan Administrator (or Plan Administrator’s
representative) on the form provided. Once received and acknowledged
by the Plan Administrator, the form shall be effective. The Executive
may change a Beneficiary designation at any time by submitting a new form to
the
Plan Administrator. Any such change shall follow the same rules as
for the original Beneficiary designation and shall automatically supersede
the
existing Beneficiary form on file with the Plan Administrator.
If
the
Executive dies without a valid Beneficiary designation on file with the Plan
Administrator, death benefits shall be paid to the Executive’s
estate.
If
the
Plan Administrator determines in its discretion that a benefit is to be paid
to
a minor, to a person declared incompetent, or to a person incapable of handling
the disposition of that person’s property, the Plan Administrator may direct
distribution of such benefit to the guardian, legal representative or person
having the care or custody of such minor, incompetent person or incapable
person. The Plan Administrator may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of
the
benefit. Any distribution of a benefit shall be a distribution for
the account of the Executive and the Beneficiary, as the case may be, and shall
be a complete discharge of any liability under the Agreement for such
distribution amount.
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J.
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Disability:
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“Disability”
shall mean the 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. 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.
IV. RETIREMENT
BENEFIT AND POST-RETIREMENT DEATH BENEFIT
Subject
to the provisions in the following paragraph of this Article IV, upon attainment
of the Retirement Date, (as set forth in Subparagraph III [A,] subject to the
provisions of Paragraph IX,) the Bank shall pay the Executive an annual benefit
equal to __________ ________ ($______), the “Retirement
Benefit.” Said Retirement Benefit shall be paid in equal monthly
installments (1/12th of the
annual
benefit) until the death of the Executive. Said payment shall be made
the first day of the month following (i) the date of such Separation from
Service, (ii) the date of attainment of Normal Retirement Age or (iii) if
applicable, in accordance with the Restriction on Timing of Distribution,
whichever is latest. Upon the death of the Executive after attainment
of the Retirement Date, (as set forth in III [A,] subject to the provisions
of
Paragraph IX,) if there is a balance in the accrued liability retirement
account, such balance shall be paid in a lump sum to the
Beneficiary. Said payment due hereunder shall be made the first day
of the second month following the Executive’s death.
Notwithstanding
the foregoing paragraph of this Article IV, in the event that Executive is
vested in his or her Retirement Benefit 25% or less, the Executive shall receive
a lump sum payment equal to the present value of the accrued liability
retirement account in lieu of the annual benefit set forth in the preceding
paragraph. Said lump sum payment shall be made to Executive within
thirty (30) days following attainment of Normal Retirement Age.
V. DEATH
BENEFIT PRIOR TO RETIREMENT
In
the
event the Executive should die while actively employed by the Bank at any time
after the date of this Agreement but prior to the Executive’s Separation from
Service, and prior to any determination of Disability (and as provided in
Paragraph X,) the Bank will pay the accrued balance on the date of death, of
the
Executive’s accrued liability retirement account in a lump sum, thirty (30) days
following the Executive’s death to the Beneficiary. Said payment due
hereunder shall be made by the first day of the second month following the
Executive’s death.
VI. BENEFIT
ACCOUNTING/ACCRUED LIABILITY RETIREMENT ACCOUNT
Notwithstanding
any provision herein to the contrary, the provisions of this Paragraph VI,
shall
be effective beginning January 1, 2006. Prior to the date on which
Executive attains Executive’s Normal Retirement Age, and during the time that
Executive continues in the employment of Bank, (or after Separation from Service
but before Executive has attained Normal Retirement Age if a Change in Control
has occurred and Executive has thereafter had a Termination of Employment as
set
forth in Paragraph IX,) and provided this Agreement is in effect, the Bank
shall
account for this benefit using Generally Accepted Accounting Principles
(“GAAP”). Prior to the date on which Executive attains Executive’s
Normal Retirement Age and during the time that Executive continues in the
employment of Bank, and prior to any determination of Disability of Executive
prior to Executive attaining Normal Retirement Age, (or after Separation from
Service but before Executive has attained Executive’s Normal Retirement Age if a
Change in Control has occurred and Executive has had a Termination of Employment
as set forth in Paragraph IX) and provided this Agreement is in effect, the
Bank
shall establish an accrued liability retirement account for the Executive into
which appropriate reserves shall be accrued sufficient so that if the account
were increased ratably each year prior to Executive attaining Normal Retirement
Age and during which Executive continued in the employment of Bank (or after
Separation from Service but before Executive has attained Executive’s Normal
Retirement Age if a Change in Control has occurred and Executive has had a
Termination of Employment as set forth in Paragraph IX) and using a compound
interest rate as set forth in Schedule A attached hereto and incorporated herein
by reference; provided, however, that such interest rate set forth on Schedule
A
may be changed, for purposes of the calculation of the accrued liability
retirement account hereunder, by the Compensation Committee of Bank at any
time
and from time to time but only in good faith and in a manner that the
Compensation Committee of the Bank reasonably determines to be consistent with
industry standards at the time of such change of interest rate herein,
sufficient funds would be available to pay the Retirement Benefit to Executive,
still assuming a compound interest rate as set forth on Schedule A (again
provided, however, as stated above, that such interest rate may be changed,
for
purposes of the calculation of the accrued liability retirement account
hereunder, by the Compensation Committee of the Bank at any time and from time
to time but only in good faith and in a manner that the Compensation Committee
of the Bank reasonably determines to be consistent with industry standards
at
the time of such change of interest rate herein,) for the life expectancy of
Executive, based upon the United States Life Insurance Company mortality
tables (or tables of a reasonably comparable life
insurance company if such mortality tables are no longer available) mortality
tables in effect from time to time as such accruals are made.
VII. Vesting
The
Executive shall be vested in the Retirement Benefit in accordance with the
following schedule from the Effective Date of the original
Agreement.
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Total
Years of Employment
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with
the Bank from
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Effective
Date of
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Original Agreement
)
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Vested
(to a maximum of 100%)
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1 ____%
2 ____%
3 ____%
4 ____%
5 ____%
6 ____%
7 ____%
8 ____%
9 ____%
10 ____%
11 ____%
12 ____%
13 ____%
14 ____%
15 ____%
16 ____%
17 ____%
18 ____%
19 ____%
20
or
more 100%
VIII. TERMINATION
OF EMPLOYMENT
Subject
to the provisions of Paragraph IX, (and no payment shall be made hereunder
if
the provisions of Paragraph IX are applicable,) in the event that the employment
of the Executive shall terminate prior to Normal Retirement Age, and prior
to
any determination of Disability, by the Executive’s voluntary action, or by the
Executive’s discharge by the Bank without cause, then this Agreement shall
terminate upon the date of Separation from Service and the Bank shall pay to
the
Executive an amount of money equal to the present value of the vested percentage
of the Retirement Benefit, as provided in Paragraph IV, as of the date of said
Separation from Service. This compensation shall be paid in one lump
sum thirty (30) days following the Executive’s Separation from Service or, if
the Restriction on Timing of Distribution is applicable, then in accordance
with
the Restriction on Timing of Distribution.
In
the
event the Executive’s death should occur after such termination but prior to the
payment provided for in this paragraph, the balance shall be paid, in a lump
sum
to the Beneficiary. Said payment due hereunder shall be made the
first day of the second month following the decease of the Executive, provided,
however, that in no event shall such payment be made later than the fifteenth
day of the third month after the Executive’s Separation from Service and if the
fifteenth day of the third after the Executive’s Separation from Service is
later than the first day of the second month following the decease of the
Executive, such payment shall be made to such Beneficiary on the fifteenth
day
of the third month following the Executive’s Separation from
Service.
In
the
event the Executive shall be discharged for cause at any time, or should the
Board vote to deny all benefits as set forth in Subparagraph III [F], this
Agreement shall terminate and all benefits provided herein shall be
forfeited.
IX. CHANGE
OF CONTROL
If
the
Executive subsequently suffers a Termination of Employment (voluntarily or
involuntarily), or Separation from Service except for cause, anytime subsequent
to a Change of Control, (provided that there has been no determination of
Disability prior to such Termination of Employment,) then the
Executive shall receive the benefits stated and in accordance with Paragraph
IV,
herein upon attaining Normal Retirement Age, as if the Executive had been
continuously employed by the Bank until the Executive’s Normal Retirement
Age. Said payment shall be made in accordance with Code Section
409A. The Executive will also remain eligible for all promised death
benefits in this Agreement. 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 Agreement and agrees to abide
by its terms.
X. DISABILITY
In
the
event that a determination of Disability is made respecting the Executive,
during any period of employment prior to Executive attaining Normal Retirement
Age (and the Executive, notwithstanding any other provision of this Agreement,
including but not limited to any provision of Subparagraph III [J,] shall not
be
considered disabled for purposes of this Paragraph X if the Executive has had
a
Separation from Service or Termination of Employment prior to such Disability,
without returning to active employment with the Bank and being actively employed
with the Bank at the time of such Disability, even if such Separation of Service
or Termination of Employment has taken place after a Change in Control and
Executive, although no longer employed by Bank, may be eligible for a Retirement
Benefit pursuant to Paragraph IX or otherwise), the Bank shall establish an
account (hereinafter sometimes referred to as the “Disability Account”) in an
amount equal to the balance as of the date of Disability of Executive of the
accrued liability retirement account established on the Executive’s behalf
pursuant to this Agreement, (provided that the Bank shall be required to do
so
only once for each Executive, and with respect to an Executive who has a
determination of Disability prior to Normal Retirement Age and who returns
to
active employment with the Bank and a subsequent determination of Disability,
also prior to Normal Retirement Age, is made respecting the Executive, the
Bank
shall not be required to establish a Disability Account other than any
Disability Account established upon the first determination of Disability of
the
Executive.) Interest at a rate equivalent to the Xxxxx’x Seasoned Baa
Corporate Bond Yield per annum then in effect (or if no such rate is then
published or in effect, then at the rate equivalent to the yield of reasonably
comparable instruments selected by the Compensation Committee of the Bank)
shall
be accrued and added to the Disability Account and distributions subtracted
therefrom until complete distribution hereunder. Upon Executive
attaining Normal Retirement Age after a determination of Disability, the Bank
shall distribute to the Executive, (commencing on the first day of the month
following the date the Executive attains the Executive’s Normal Retirement Age,
and subject to the ‘Restriction on Timing of Distribution’ as defined in this
Agreement,) the Disability Account of Executive in One Hundred Twenty (120)
equal monthly installments. Notwithstanding the foregoing, if the
Executive would have been vested in his or her Retirement Benefit under this
Plan 25% or less upon attaining Normal Retirement Age after continuous
employment with the Bank, if no Disability had occurred, then the Disability
Account shall not be paid to Executive upon attaining Normal Retirement Age
in
installments, but shall be paid to Executive in a lump sum on the first day
of
the month following the date on which Executive attains Normal Retirement Age,
subject, however, to the Restriction on Timing of Distribution, if
applicable. In the event of the death of Executive after a
determination of Disability and regardless of whether Executive has attained
Normal Retirement Age, any portion of any Disability Account of Executive not
yet distributed to Executive hereunder shall be distributed, in a lump sum
thirty (30) days following the Executive’s death to the
Beneficiary. Said payment due hereunder shall be made by the first
day of the second month following the Executive’s death. After a
determination of Disability prior to Executive’s Normal Retirement Age, no other
benefits than those set forth in this Paragraph X will be owed or payable to
the
Executive or any Beneficiary under this Agreement under any circumstances,
including but not limited to, during the period of Disability, upon death,
upon
attaining Normal Retirement Age or Retirement Date, or in the event of any
subsequent return to active service or subsequent period of
Disability.
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XI.
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RESTRICTION
UPON FUNDING
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The
Bank
shall have no obligation to set aside, earmark or entrust any fund or money
with
which to pay its obligations under this Executive Plan. The
Executive, their beneficiary(ies), or any successor in interest shall be and
remain simply a general creditor of the Bank in the same manner as any other
creditor having a general claim for matured and unpaid
compensation.
The
Bank
reserves the absolute right, at its sole discretion, to either fund the
obligations undertaken by this Executive Plan or to refrain from funding the
same and to determine the extent, nature and method of such
funding. Should the Bank elect to fund this Executive Plan, in whole
or in part, through the purchase of life insurance, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in
part. At no time shall any Executive be deemed to have any lien,
right, title or interest in any specific funding investment or assets of the
Bank.
If
the
Bank elects to invest in a life insurance, disability or annuity policy on
the
life of the Executive, then the Executive shall assist the Bank by freely
submitting to a physical exam and supplying such additional information
necessary to obtain such insurance or annuities.
XII. MISCELLANEOUS
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A.
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Alienability
and Assignment Prohibition:
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Neither
the Executive, nor the Executive’s surviving spouse, nor any other
beneficiary(ies) under this Executive Plan shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber in advance any of the benefits payable hereunder nor shall
any of said benefits be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance owed by the Executive or the
Executive’s beneficiary(ies), nor be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise. In the event the
Executive or any beneficiary attempts assignment, commutation, hypothecation,
transfer or disposal of the benefits hereunder, the Bank’s liabilities shall
forthwith cease and terminate.
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B.
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Binding
Obligation of the Bank and any Successor in
Interest:
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The
Bank
shall not merge or consolidate into or with another bank or sell substantially
all of its assets to another bank, firm or person until such bank, firm or
person expressly agree, in writing, to assume and discharge the duties and
obligations of the Bank under this Executive Plan. This Executive
Plan shall be binding upon the parties hereto, their successors, beneficiaries,
heirs and personal representatives.
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C.
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Amendment
or Revocation:
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It
is
agreed by and between the parties hereto that, during the lifetime of the
Executive, this Agreement may be amended or revoked at any time or times, in
whole or in part, by the mutual written consent of the Executive and the
Bank. Any such amendment shall not be effective to decrease or
restrict any Executive’s accrued benefit under this Agreement, determined as of
the date of amendment, unless agreed to in writing by the Executive, and
provided further, no amendment shall be made, or if made, shall be effective,
if
such amendment would cause the Agreement to violate Code Section
409A. In the event this Agreement is terminated, such termination
shall not cause a distribution of benefits, except under limited circumstances
as permitted under Section 409A (i.e., 30 days before or 12 months after a
Change of Control event, upon termination of all arrangements of the same type,
or upon corporate dissolution or bankruptcy).
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D.
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Gender:
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Whenever
in this Executive Plan words are used in the masculine or neuter gender, they
shall be read and construed as in the masculine, feminine or neuter gender,
whenever they should so apply.
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E.
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Headings:
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Headings
and subheadings in this Executive Plan are inserted for reference and
convenience only and shall not be deemed a part of this Executive
Plan.
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F.
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Applicable
Law:
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The
laws
of the State of West Virginia shall govern the validity and interpretation
of
this Agreement.
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G.
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Partial
Invalidity:
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If
any
term, provision, covenant, or condition of this Executive Plan is determined
by
an arbitrator or a court, as the case may be, to be invalid, void, or
unenforceable, such determination shall not render any other term, provision,
covenant, or condition invalid, void, or unenforceable, and the Executive Plan
shall remain in full force and effect notwithstanding such partial
invalidity.
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H.
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Not
a Contract of Employment:
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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 Bank
to
discharge the Executive, or restrict the right of the Executive to terminate
employment.
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I.
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Tax
Withholding:
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The
Bank
shall withhold any taxes that are required to be withheld, under federal, state
or local tax laws, including without limitation under Section 409A of the Code
and regulations thereunder, from the benefits provided under this
Agreement. The Executive acknowledges that the Bank’s sole liability
regarding taxes is to forward any amounts withheld to the appropriate taxing
authority(ies).
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J.
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Opportunity
to Consult with Independent
Advisors:
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The
Executive acknowledges that he has been afforded the opportunity to consult
with
independent advisors of his choosing including, without limitation, accountants
or tax advisors and counsel regarding both the benefits granted to him under
the
terms of this Agreement and the: (i) terms and conditions which may
affect the Executive’s right to these benefits; and (ii) personal tax effects of
such benefits including, without limitation, the effects of any federal or
state
taxes, Section 280G of the Code, Section 409A of the Code and guidance or
regulations thereunder, and any other taxes, costs, expenses or liabilities
whatsoever related to such benefits, which in any of the foregoing instances
the
Executive acknowledges and agrees shall be the sole responsibility of the
Executive notwithstanding any other term or provision of this
Agreement. The Executive further acknowledges and agrees that the
Bank shall have no liability whatsoever related to any such personal tax effects
or other personal costs, expenses, or liabilities applicable to the Executive
and further specifically waives any right for himself or herself, and his or
her
heirs, beneficiaries, legal representative, agents, successor and assign to
claim or assert liability on the part of the Bank related to the matters
described above in this paragraph. The Executive further acknowledges
that he has read, understands and consents to all of the terms and conditions
of
this Agreement, and that he enters into this Agreement with a full understanding
of its terms and conditions.
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K.
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Permissible
Acceleration Provision:
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Under
Section 409A(a)(3), a payment of deferred compensation may not be accelerated
except as provided in regulations by the Code. Certain permissible
payment accelerations include payments necessary to comply with a domestic
relations order, payments necessary to comply with certain conflict of interest
rules, payments intended to pay employment taxes, and certain de minimis
payments related to the Executive’s termination of the Executive’s interest in
the plan.
|
|
L.
|
Supersede
and Replace Entire Agreement:
|
This
Agreement shall supersede the Executive Supplemental Retirement Plan Agreement
effective the 25th day of January, 2002, and shall replace
the entire Agreement of the parties pertaining to this particular Executive
Supplemental Retirement Plan Agreement.
|
XIII.
|
ADMINISTRATIVE AND CLAIMS
PROVISION
|
|
|
A.
|
Plan
Administrator:
|
The
“Plan
Administrator” of this Executive Plan shall be Summit Financial
Group. As Plan Administrator, the Bank shall be responsible for the
management, control and administration of the Executive Plan. The
Plan Administrator may delegate to others certain aspects of the management
and
operation responsibilities of the Executive Plan including the employment of
advisors and the delegation of ministerial duties to qualified
individuals.
B. Claims
Procedure:
a. Filing
a Claim for Benefits:
Any
insured, beneficiary, or other individual, (“Claimant”) entitled to benefits
under this Executive Plan will file a claim request with the Plan
Administrator. The Plan Administrator will, upon written request of a
Claimant, make available copies of all forms and instructions necessary to
file
a claim for benefits or advise the Claimant where such forms and instructions
may be obtained. If the claim relates to disability benefits, then
the Plan Administrator shall designate a sub-committee to conduct the initial
review of the claim (and applicable references below to the Plan Administrator
shall mean such sub-committee).
b. Denial
of Claim:
A
claim
for benefits under this Executive Plan will be denied if the Bank determines
that the Claimant is not entitled to receive benefits under the Executive
Plan. Notice of a denial shall be furnished the Claimant within a
reasonable period of time after receipt of the claim for benefits by the Plan
Administrator. This time period shall not exceed more than ninety
(90) days after the receipt of the properly submitted claim. In the
event that the claim for benefits pertains to disability, the Plan Administrator
shall provide written notice within forty-five (45) days. However, if
the Plan Administrator determines, in its discretion, that an extension of
time
for processing the claim is required, such extension shall not exceed an
additional ninety (90) days. In the case of a claim for disability
benefits, the forty-five (45) day review period may be extended for up to thirty
(30) days if necessary due to circumstances beyond the Plan Administrator’s
control, and for an additional thirty (30) days, if necessary. Any
extension notice shall indicate the special circumstances requiring an extension
of time and the date by which the Plan Administrator expects to render the
determination on review.
c. Content
of Notice:
|
|
The
Plan Administrator shall provide written notice to every Claimant
who is
denied a claim for benefits which notice shall set forth the
following:
|
|
|
(i.)
|
The
specific reason or reasons for the
denial;
|
|
|
(ii.)
|
Specific
reference to pertinent Executive Plan provisions on which the denial
is
based;
|
|
|
(iii.)
|
A
description of any additional material or information necessary for
the
Claimant to perfect the claim, and any explanation of why such material
or
information is necessary; and
|
|
|
(iv.)
|
Any
other information required by applicable regulations, including with
respect to disability benefits.
|
|
|
d.
|
Review
Procedure:
|
|
|
The
purpose of the Review Procedure is to provide a method by which a
Claimant
may have a reasonable opportunity to appeal a denial of a claim to
the
Plan Administrator for a full and fair review. The Claimant, or
his duly authorized representative,
may:
|
|
|
(i.)
|
Request
a review upon written application to the Plan Administrator. Application
for review must be made within sixty (60) days of receipt of written
notice of denial of claim. If the denial of claim pertains to
disability, application for review must be made within one hundred
eighty
(180) days of receipt of written notice of the denial of
claim;
|
|
|
(ii.)
|
Review
and copy (free of charge) pertinent Executive Plan documents, records
and
other information relevant to the Claimant’s claim for
benefits;
|
|
|
(iii.)
|
Submit
issues and concerns in writing, as well as documents, records, and
other
information relating to the claim.
|
|
|
e.
|
Decision
on Review:
|
|
|
A
decision on review of a denied claim shall be made in thefollowing
manner:
|
|
|
(i.)
|
The
Plan Administrator may, in its sole discretion, hold a hearing on
the
denied claim. If the Claimant’s initial claim is for disability
benefits, any review of a denied claim shall be made by members of
the
Plan Administrator other than the original decision maker(s) and
such
person(s) shall not be a subordinate of the original decision
maker(s). The decision on review shall be made promptly, but
generally not later than sixty (60) days after receipt of the application
for review. In the event that the denied claim pertains to
disability, such decision shall not be made later than forty-five
(45)
days after receipt of the application for review. If the Plan
Administrator determines that an extension of time for processing
is
required, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial sixty (60) day
period. In no event shall the extension exceed a period of
sixty (60) days from the end of the initial period. In the
event the denied claim pertains to disability, written notice of
such
extension shall be furnished to the Claimant prior to the termination
of
the initial forty-five (45) day period. In no event shall the
extension exceed a period of thirty (30) days from the end of the
initial
period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which
the
Plan Administrator expects to render the determination on
review.
|
|
|
(ii.)
|
The
decision on review shall be in writing and shall include specific
reasons
for the decision written in an understandable manner with specific
references to the pertinent Executive Plan provisions upon which
the
decision is based.
|
|
|
(iii.)
|
The
review will take into account all comments, documents, records and
other
information submitted by the Claimant relating to the claim without
regard
to whether such information was submitted or considered in the initial
benefit determination. Additional considerations shall be
required in the case of a claim for disability benefits. For
example, the claim will be reviewed without deference to the initial
adverse benefits determination and, if the initial adverse benefit
determination was based in whole or in part on a medical judgment,
the
Plan Administrator will consult with a health care professional with
appropriate training and experience in the field of medicine involving
the
medical judgment. The health care professional who
is consulted on appeal will not be the same individual who was
consulted during the initial determination or the subordinate of
such
individual. If the Plan Administrator obtained the advice of
medical or vocational experts in making the initial adverse benefits
determination (regardless of whether the advice was relied upon),
the Plan
Administrator will identify such
experts.
|
|
|
(iv.)
|
The
decision on review will include a statement that the Claimant is
entitled
to receive, upon request and free of charge, reasonable access to,
and
copies of, all documents, records or other information relevant to
the
Claimant’s claim for benefits.
|
|
|
f.
|
Exhaustion
of Remedies:
|
|
|
A
Claimant must follow the claims review procedures under this Executive
Plan and exhaust his or her administrative remedies before taking
any
further action with respect to a claim for
benefits.
|
|
C.
|
Arbitration:
|
If
claimants continue to dispute the benefit denial based upon completed
performance of this Executive Plan or the meaning and effect of the terms and
conditions thereof, then claimants may submit the dispute to an Arbitrator
in
West Virginia for final arbitration. The Arbitrator shall be selected
by mutual agreement of the Bank and the claimants. The Arbitrator
shall operate under the rules then in effect of the American Arbitration
Association. The parties hereto agree that they and their heirs,
personal representatives, successors and assigns shall be bound by the decision
of such Arbitrator with respect to any controversy properly submitted to it
for
determination.
Where
a
dispute arises as to the Bank’s discharge of the Executive “for cause,” such
dispute shall likewise be submitted to arbitration as above described and the
parties hereto agree to be bound by the decision thereunder.
XIV. TERMINATION
OR MODIFICATION OF AGREEMENT BY REASON OFCHANGES IN THE LAW, RULES OR
REGULATIONS
The
Bank
is entering into this Agreement upon the assumption that certain existing tax
laws, rules and regulations will continue in effect in their current
form. If any said assumptions should change and said change has a
detrimental effect on this Executive Plan, then the Bank reserves the right
to
terminate or modify this Agreement accordingly, but only to the extent necessary
to conform this Agreement to the provisions and requirements of any applicable
law (including ERISA and the Code, including, but not limited to Section 409A
of
the Code and regulations thereunder).
Upon
a
Change of Control, the provisions of Paragraph IX respecting assumption of
the
obligations of this Agreement by the successor entity shall apply.
IN
WITNESS WHEREOF, the parties hereto acknowledge that each has carefully
read this Agreement and executed the original thereof on the first day set
forth
hereinabove, and that, upon execution, each has received a conforming
copy.
SUMMIT
COMMUNITY BANK
Moorefield,
West Xxxxxxxx
By:
Witness
(Bank Officer other
than
Insured) Title
Witness
SCHEDULE
A
to
EXECUTIVE
SALARY CONTINUATION AGREEMENT
BETWEEN
SUMMIT COMMUNITY BANK
AND
_______________
This
Schedule A to the Executive Salary
Continuation Agreement between Summit Community Bank and _____________________
sets forth the rate of interest under Section VI of the Agreement for purposes
of determining the accrued liability reserve and is incorporated as a part
of
the Agreement. This Schedule A is effective January 1, 2006, and
shall remain in effect unless amended or revised according to the provisions
set
forth in Section VI of the Agreement.
Interest
Rate 6.28%
BENEFICIARY
DESIGNATION FORM
FOR
THE EXECUTIVE SALARY CONTINUATION
AGREEMENT
THAT SUPERSEDES AND REPLACES THE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
AGREEMENT EFFECTIVE JANUARY 25, 2002, AS AMENDED
|
I.
|
PRIMARY
DESIGNATIONS
|
||||||||||||||||||||
|
A.
|
Person(s)
as a Primary Designation:
(Please
indicate the percentage for each beneficiary.)
|
||||||||||||||||||||
|
1.
|
Name:
|
Relationship:
|
SS#:
|
%
|
|||||||||||||||||
|
Address:
|
|||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
||||||||||||||||||
|
2.
|
Name:
|
Relationship:
|
SS#:
|
%
|
|||||||||||||||||
|
Address:
|
|||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
||||||||||||||||||
|
3.
|
Name:
|
Relationship:
|
SS#:
|
%
|
|||||||||||||||||
|
Address:
|
|||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
||||||||||||||||||
|
4.
|
Name:
|
Relationship:
|
SS#:
|
%
|
|||||||||||||||||
|
Address:
|
|||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
||||||||||||||||||
|
II.
|
ESTATE
AND/OR TRUST AS PRIMARY DESIGNATIONS
|
||||||||||||||||||||
|
A.
|
Estate
as a Primary Designation:
An
Estate can still be listed even if there is no
will.
|
||||||||||||||||||||
|
My
Primary Beneficiary is The Estate of
|
as
set forth in the Last Will and
|
||||||||||||||||||||
|
(Insert
full name)
|
|||||||||||||||||||||
|
Testament
dated the
|
day
of
|
,
200
|
and
any codicils thereto.
|
||||||||||||||||||
|
B.
|
Trust
as a Primary Designation:
|
||||||||||||||||||||
|
Name
of the Trust:
|
|||||||||||||||||||||
|
Execution
Date of the Trust:
|
Name
of the Trustee:
|
||||||||||||||||||||
|
Beneficiary
of the Trust:
(please
indicate the
percentage for each beneficiary):
|
|||||||||||||||||||||
|
Name(s):
|
|||||||||||||||||||||
|
Name(s):
|
|||||||||||||||||||||
|
Is
this an Irrevocable Life
Insurance Trust? □
Yes
□ No
|
|||||||||||||||||||||
|
(If
yes and this designation is for a Joint Beneficiary Designation Agreement,
an Assignment of Rights form must be
completed.)
|
|||||||||||||||||||||
|
III.
|
SECONDARY
(CONTINGENT) DESIGNATIONS
|
|||||||||||||||||||
|
A.
|
Person(s)
as a Secondary (Contingent) Designation:
(Please
indicate the percentage for each beneficiary in the event of the
Primary’s
Death.)
|
|||||||||||||||||||
|
1.
|
Name:
|
Relationship:
|
SS#:
|
%
|
||||||||||||||||
|
Address:
|
||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
|||||||||||||||||
|
2.
|
Name:
|
Relationship:
|
SS#:
|
%
|
||||||||||||||||
|
Address:
|
||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
|||||||||||||||||
|
3.
|
Name:
|
Relationship:
|
SS#:
|
%
|
||||||||||||||||
|
Address:
|
||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
|||||||||||||||||
|
4.
|
Name:
|
Relationship:
|
SS#:
|
%
|
||||||||||||||||
|
Address:
|
||||||||||||||||||||
|
(Street)
|
(City)
|
(State)
|
(Zip)
|
|||||||||||||||||
|
IV.
|
ESTATE
AND/OR TRUST AS SECONDARY (CONTINGENT)
DESIGNATIONS
|
|||||||||||||||||||
|
A.
|
Estate
as a Secondary (Contingent) Designation:
|
|||||||||||||||||||
|
My
Primary Beneficiary is The Estate of
|
as
set forth in the last will and
|
|||||||||||||||||||
|
Testament
dated the
|
day
of
|
,
200
|
and
any codicils thereto.
|
|||||||||||||||||
|
B.
|
Trust
as a Secondary (Contingent) Designation:
|
|||||||||||||||||||
|
Name
of the Trust:
|
||||||||||||||||||||
|
Execution
Date of the Trust:
|
Name
of the Trustee:
|
|||||||||||||||||||
|
Beneficiary
of the Trust:
(please
indicate the
percentage for each beneficiary):
|
||||||||||||||||||||
|
Name(s):
|
||||||||||||||||||||
|
Name(s):
|
||||||||||||||||||||
|
Is
this an Irrevocable Life
Insurance Trust? □
Yes
□ No
|
||||||||||||||||||||
|
(If
yes and this designation is for a Joint Beneficiary Designation Agreement,
an Assignment of Rights form must be
completed.)
|
||||||||||||||||||||
|
V.
|
SIGN
AND DATE
|
This
Beneficiary Designation Form is valid until the participant notifies the bank
in
writing.
Executive Date
