Amendment To Salary Continuation Agreement

First Amendment to Salary Continuation Agreement

 

Exhibit 10.20(a)

 

FIRST AMENDMENT TO

SALARY CONTINUATION AGREEMENT

 

THIS AMENDMENT (the “Amendment”) is adopted March 29, 2016, by First South Bank, located in Washington, North Carolina (the “Employer”), and Bruce W. Elder (the “Executive”).

 

The Employer and the Executive executed a Salary Continuation Agreement dated June 3, 2014 (the “Agreement”) which provides deferred compensation benefits to the Executive under certain circumstances. The parties wish to amend the Agreement to increase the benefits provided pursuant to the Agreement. The parties agree and acknowledge that this Amendment (i) shall be interpreted in accordance with Internal Revenue Code Section 409A and (ii) increases the amount of benefits provided under the Agreement, but does not change the payment schedule thereunder.

 

NOW, THEREFORE, the Employer and the Executive adopt the following amendments to the Agreement:

 

Section 2.1 of the Agreement shall be deleted and replaced by the following:

 

2.1           Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of Forty-Two Thousand Dollars ($42,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing for fifteen (15) years, subject to the conditions and limitations hereinafter set forth.

 

Sections 2.4, 2.5 and 2.6 of the Agreement shall be deleted and replaced by the following:

 

2.4           Change in Control Benefit. If a Change in Control occurs, followed within twenty-four (24) months by Separation of Service prior to Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of Forty-Two Thousand Dollars ($42,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Normal Retirement Age and continuing for fifteen (15) years.

 

2.5           Death Prior to Separation from Service and Disability. In the event the Executive dies prior to Separation from Service and Disability, the Employer shall pay the Beneficiary an annual benefit in the amount of Forty-Two Thousand Dollars ($42,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following the Executive’s death and continuing for fifteen (15) years.

 

 

 

  

2.6           Death after Separation from Service or Disability and before Normal Retirement Age. In the event the Executive dies after Separation from Service or Disability, and before Normal Retirement Age, the Employer shall pay the Beneficiary an annual benefit in the amount of Forty-Two Thousand Dollars ($42,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following the Executive’s death and continuing for fifteen (15) years.

 

The Schedule A originally attached to the Agreement shall be replaced by the Schedule A attached hereto.

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Employer have executed this Amendment as indicated below:

 

Executive   Employer
     
/s/ Bruce W. Elder   By: /s/ L. Steven Lee
    Its: Compensation Committee Chairman

 

 

 

 

Salary Continuation Plan

Schedule A - Exhibit 10.20(a)

 

Bruce W. Elder                   
Birth Date: xx/xx/1962     Early Termination   Disability   Change in Control   Death 

Plan Anniversary Date: Dec. 31

Normal Retirement Date:
05/12/2027, Age 65

Normal Retirement Payment:
Monthly for 15 Years

      Amount Payable Monthly
for 15 Years Upon
Separation
   Amount Payable Monthly
for 15 Years Upon
Separation
   Amount Payable Lump
Sum Upon Death
 
Values As Of  Age  Annual Benefit 1   Annual Benefit 1,2   Annual Benefit 1,2   Annual Benefit 1,2 
                        
4/1/2016  53   0    5,327    42,000    42,000 
12/31/2016  54   0    8,480    42,000    42,000 
12/31/2017  55   0    12,205    42,000    42,000 
12/31/2018  56   16,334    16,334    42,000    42,000 
12/31/2019  57   19,977    19,977    42,000    42,000 
12/31/2020  58   23,442    23,442    42,000    42,000 
12/31/2021  59   26,739    26,739    42,000    42,000 
12/31/2022  60   29,876    29,876    42,000    42,000 
12/31/2023  61   32,859    32,859    42,000    42,000 
12/31/2024  62   35,698    35,698    42,000    42,000 
12/31/2025  63   38,398    38,398    42,000    42,000 
12/31/2026  64   40,967    40,967    42,000    42,000 
5/12/2027  65   42,000    42,000    42,000    42,000 

 

The first line represents the plan values as of April 1, 2016.

1 The annual benefit amount will be distributed in 12 equal monthly payments for a total of 180 monthly payments.

2 Note that accounting rules may require an additional accrual at the time this benefit is triggered.

 

IF THERE IS A CONFLICT BETWEEN THIS SCHEDULE A AND THE AGREEMENT, THE TERMS AND PROVISIONS OF THE AGREEMENT SHALL PREVAIL. IF A TRIGGERING EVENT OCCURS, REFER TO THE AGREEMENT TO DETERMINE THE ACTUAL BENEFIT AMOUNT BASED ON THE DATE OF THE EVENT.

  

Bruce W. Elder: /s/ Bruce W. Elder   By: /s/ L. Steven Lee

 

Date:   3/29/16   Title: Chairman Compensation Committee

 

    Date: 3/29/16