BANK OF TAZEWELL COUNTY
SALARY CONTINUATION AGREEMENT
Prepared 01-30-06
c 2006 Xxxxx Consulting
This document is provided to assist your legal counsel in documenting your
specific arrangement. The laws of the various states may differ considerably,
and this specimen is for general information only. It is not a form to be
signed, nor is it to be construed as legal advice. Failure to accurately
document your arrangement could result in significant losses, whether from
claims of those participating in the arrangement, from the heirs and
beneficiaries of participants, or from regulatory agencies such as the Internal
Revenue Service, the Department of Labor, or bank examiners. License is hereby
granted to your legal counsel to use these materials in documenting solely your
arrangement.
In general, if your bank is subject to SEC regulation, implementation of this or
any other executive or director compensation program may trigger rules requiring
certain disclosures on Form 8-K within four days of implementing the program.
Consult with your SEC attorney, if applicable, to determine your
responsibilities under the disclosure rules.
IMPORTANT NOTICE ON CODE SECTION 409A COMPLIANCE
Consult with your legal and tax advisors to determine the impact of the new
Internal Revenue Code Section 409A to your particular situation. The Treasury
Department on September 29th, 2005 issued proposed regulations implementing the
requirements of Section 409A which apply to nonqualified deferred compensation
arrangements. The effective date for the proposed regulations is January 1,
2007; however, they can be fully relied upon by plan sponsors until the
regulations become final.
BANK OF TAZEWELL COUNTY
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (the "Agreement") is adopted this 8th
day of February, 2006, by and between the BANK OF TAZEWELL COUNTY, a
state-chartered commercial bank located in Tazewell, Virginia (the "Bank") and
X. XXXXXX XXXXXXXX (the "Executive").
The purpose of this Agreement is to provide specified benefits to the Executive,
a member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development, and future business
success of the Bank. This Agreement shall be unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended from time to time.
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
1.1 "Beneficiary" means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the Executive
determined pursuant to Article 4.
1.2 "Beneficiary Designation Form" means the form established from time to time
by the Plan Administrator that the Executive completes, signs, and returns to
the Plan Administrator to designate one or more Beneficiaries.
1.3 "Board" means the Board of Directors of the Bank as from time to time
constituted.
1.4 "Change in Control" means a change in the ownership or effective control of
the Bank, or in the ownership of a substantial portion of the assets of the
Bank, as such change is defined in Section 409A of the Code and regulations
thereunder. Change of Control does not mean the merger of Bank of Tazewell
County with and into the National Bank of Blacksburg as contemplated in an
Agreement to Merge dated December 20, 2005.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Disability" means 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
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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 the
Social Security Administration's or the provider's determination.
1.7 "Early Termination" means Separation from Service before Normal Retirement
Age except when such Separation from Service occurs: (i) following a Change in
Control; or (ii) due to death, Disability, or Termination for Cause.
1.8 "Effective Date" means January 1, 2006.
1.9 "Normal Retirement Age" means the Executive attaining age sixty-five (65).
1.10 "Plan Administrator" means the plan administrator described in Article 6.
1.11 "Plan Year" means each twelve-month period commencing on January 1, 2006
and ending on December 31 of each year. The initial Plan Year shall commence on
the Effective Date of this Agreement and end on the following December 31.
1.12 "Schedule A" means the schedule attached to this Agreement and made a part
hereof. Schedule A shall be updated upon a change in any of the benefits under
Articles 2 or 3.
1.13 "Separation from Service" means the termination of the Executive's
employment with the Bank for reasons other than death or Disability. Whether a
Separation from Service takes place is determined based on the facts and
circumstances surrounding the termination of the Executive's employment and
whether the Bank and the Executive intended for the Executive to provide
significant services for the Bank following such termination. A termination of
employment will not be considered a Separation from Service if:
(a) the Executive continues to provide services as an employee of the Bank at an
annual rate that is twenty percent (20%) or more of the services rendered, on
average, during the immediately preceding three full calendar years of
employment (or, if employed less than three years, such lesser period) and the
annual remuneration for such services is twenty percent (20%) or more of the
average annual remuneration earned during the final three full calendar years of
employment (or, if less, such lesser period), or
(b) the Executive continues to provide services to the Bank in a capacity other
than as an employee of the Bank at an annual rate that is fifty percent (50%) or
more of the services rendered, on average, during the immediately preceding
three full calendar years of employment (or if employed less than three years,
such lesser period) and the annual remuneration for such services is fifty
percent (50%) or more of the average annual remuneration earned during the final
three full calendar years of employment (or if less, such lesser period).
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1.14 "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.
1.15 "Termination for Cause" means Separation from Service for:
(a) Gross negligence or gross neglect of duties to the Bank; or (b) Conviction
of a felony or of a gross misdemeanor involving moral turpitude in connection
with the Executive's employment with the Bank; or (c) Fraud, disloyalty,
dishonesty or willful violation of any law or significant Bank policy committed
in connection with the Executive's employment and resulting in a material
adverse effect on the Bank.
Article 2
Distributions During Lifetime
2.1 Normal Retirement Benefit. Upon the Executive reaching Normal Retirement Age
while in the active service of the Bank, the Bank shall distribute to the
Executive the benefit described in this Section 2.1 in lieu of any other benefit
under this Article.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is Twenty
Eight Thousand Two Hundred Twenty-Five Dollars ($28,225).
2.1.2 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 Normal Retirement Age. The annual benefit shall be
distributed to the Executive for the greater of fifteen (15) years, or the
Executive's lifetime.
2.2 Early Termination Benefit. Upon Early Termination, the Bank shall distribute
to the Executive the benefit described in this Section 2.2 in lieu of any other
benefit under this Article.
2.2.1 Amount of Benefit. The annual benefit under this Section 2.2 is the Early
Termination Benefit set forth on Schedule A for the Plan Year immediately
preceding the date that Separation from Service occurs; provided, however, if
the Executive Separates from Service on December 31st of a Plan Year, then the
Bank shall distribute the Early Termination Benefit set forth on Schedule A for
the Plan Year in which such Separation from Service occurs.
2.2.2 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 Normal Retirement Age. The annual benefit shall be
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distributed to the Executive for the greater of fifteen (15) years, or the
Executive's lifetime.
2.3 Disability Benefit. If the Executive experiences a 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.
2.3.1 Amount of Benefit. The annual benefit under this Section 2.3 is the
Disability Benefit set forth on Schedule A for the Plan Year immediately
preceding the date that Separation from Service occurs; provided, however, if
the Executive Separates from Service on December 31st of a Plan Year, then the
Bank shall distribute the Disability Benefit set forth on Schedule A for the
Plan Year in which such Separation from Service occurs.
2.3.2 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 Normal Retirement Age. The annual benefit shall be
distributed to the Executive for the greater of fifteen (15) years, or the
Executive's lifetime.
2.4 Change in Control Benefit. Upon a Change in Control followed by Separation
from Service, the Bank shall distribute to the Executive the benefit described
in this Section 2.4 in lieu of any other benefit under this Article.
2.4.1 Amount of Benefit. The annual benefit under this Section 2.4 is the Change
in Control Benefit set forth on Schedule A for the Plan Year immediately
preceding the date that Separation from Service occurs; provided, however, if
the Executive Separates from Service on December 31st of a Plan Year, then the
Bank shall distribute the Change in Control Benefit set forth on Schedule A for
the Plan Year in which such Separation from Service occurs.
2.4.2 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 Separation from Service. The annual benefit shall be
distributed to the Executive for the greater of fifteen (15) years, or the
Executive's lifetime.
2.4.3 Excess Parachute Payment Gross-up. If any benefit payable under this
Agreement would create an excise tax under the excess parachute rules of Section
280G of the Code, the Bank shall pay to the Executive an additional amount (the
"Gross- up") equal to:
the Executive's excise penalty tax amount
divided by the sum of
(one minus the sum of the penalty tax rate plus the Executive's marginal income
tax rate)
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The Gross-up shall be paid in equal annual payments for the greater of
fifteen (15) years or the Executive's lifetime.
2.5 Restriction on Timing of Distribution. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee
at Separation from Service under such procedures as established by the Bank in
accordance with Section 409A of the Code, benefit distributions that are made
upon Separation from Service may not commence earlier than six (6) months after
the date of such Separation from Service. Therefore, in the event this Section
2.5 is applicable to the Executive, any distribution or series of distributions
to be made due to a Separation from Service shall commence no earlier that the
first day of the seventh month following the Separation from Service.
2.6 Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the
inclusion of any portion of the Account Value into the Executive's income as a
result of the failure of this non-qualified deferred compensation plan to comply
with the requirements of Section 409A of the Code, to the extent such tax
liability can be covered by the Executive's vested Account Value, a distribution
shall be made as soon as is administratively practicable following the discovery
of the plan failure.
2.7 Change in Form or Timing of Distributions. For distribution of benefits
under this Article 2, the Executive and the Bank may, subject to the terms of
Section 8.1, amend the Agreement to delay the timing or change the form of
distributions. Any such amendment:
(a) may not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations thereunder; (b) must,
for benefits distributable under Section 2.1, be made not less than twelve (12)
months prior to the Executive's Normal Retirement Age. (c) must, for benefits
distributable under Sections 2.1, 2.2, and 2.3 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 (d) must take effect not
less than twelve (12) months after the amendment is made.
Article 3
Distribution at Death
3.1 Death During Active Service. If the Executive dies while in the active
service of the Bank, the Bank shall distribute to the Beneficiary the benefit
described in this Section 3.1. This benefit shall be distributed in lieu of the
benefits under Article 2.
3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is the Death
Benefit set forth on Schedule A for the indicated date which is the same date or
most recently precedes the date that the Executive's death occurs.
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3.1.2 Distribution of Benefit. The Bank shall distribute the annual benefit to
the Beneficiary in twelve (12) equal monthly installments for fifteen (15) years
commencing the first day of the month following receipt by the Bank of the
Executive's death certificate.
3.2 Death During Distribution of a Benefit. If the Executive dies after any
benefit distributions have commenced under this Agreement but before receiving
all such distributions, the Bank shall distribute to the Beneficiary the
remaining monthly installments at the same time and in the same amounts that
would have been distributed to the Executive had the Executive survived;
provided, however, for benefits payable under Section 2.1, if the Executive has
received less than one hundred eighty (180) equal consecutive monthly
installments, the Beneficiary shall continue to receive the same amounts and at
the same time until the sum of the monthly installments to the Beneficiary and
Executive equal one hundred eighty (180).
3.3 Death After Separation from Service But Before Benefit Distributions
Commence. If the Executive is entitled to benefit distributions under this
Agreement, but dies prior to the commencement of said benefit distributions, the
Bank shall distribute to the Beneficiary the same benefits that the Executive
was entitled to prior to death except that the benefit distributions shall
commence within thirty (30) days following receipt by the Bank of the
Executive's death certificate for a total of on hundred eighty (180) equal
consecutive monthly installments.
Article 4
Beneficiaries
4.1 Beneficiary. The Executives shall have the right, at any time, to designate
a Beneficiary(ies) to receive any benefit distributions under this Agreement
upon the death of the Executive. The Beneficiary designated under this Agreement
may be the same as or different from the beneficiary designation under any other
plan of the Bank in which the Executive participates.
4.2 Beneficiary Designation: Change. The Executives shall designate a
Beneficiary by completing and signing the Beneficiary Designation Form, and
delivering it to the Plan Administrator or its designated agent. The Executive's
beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Executive or if the Executive names a spouse as Beneficiary and
the marriage is subsequently dissolved. The Executives shall have the right to
change a Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator's rules and
procedures, as in effect from time to time. Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Plan Administrator shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Executive and accepted by the Plan Administrator prior to the Executive's death.
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4.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing by the
Plan Administrator or its designated agent.
4.4 No Beneficiary Designation. If the Executive dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Executive, then the Executive's spouse shall be the designated Beneficiary. If
the Executive has no surviving spouse, the benefits shall be made to the
personal representative of the Executive's estate.
4.5 Facility of Distribution. If the Plan Administrator determines in its
discretion that a benefit is to be distributed 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
Executive's Beneficiary, as the case may be, and shall be a complete discharge
of any liability under the Agreement for such distribution amount.
Article 5
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this Agreement to
the contrary, the Bank shall not distribute any benefit under this Agreement if
the Executive's employment with the Bank is terminated due to a Termination for
Cause.
5.2 Suicide or Misstatement. No benefits shall be distributed if the Executive
commits suicide within two years after the Effective Date of this Agreement, or
if an insurance company which issued a life insurance policy covering the
Executive and owned by the Bank denies coverage (i) for material misstatements
of fact made by the Executive on an application for such life insurance, or (ii)
for any other reason.
5.3 Removal. Notwithstanding any provision of this Agreement to the contrary,
the Bank shall not distribute any benefit under this Agreement if the Executive
is subject to a final removal or prohibition order issued by an appropriate
federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance
Act.
Article 6
Administration of Agreement
6.1 Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s)
as the Board shall appoint. The Plan Administrator shall administer this
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Agreement according to its express terms and shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Agreement and (ii) decide or resolve
any and all questions including interpretations of this Agreement, as may arise
in connection with the Agreement to the extent the exercise of such discretion
and authority does not conflict with Section 409A of the Code and regulations
thereunder.
6.2 Agents. In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Bank.
6.3 Binding Effect of Decisions. The decision or action of the Plan
Administrator with respect to any question arising out of or in connection with
the administration, interpretation and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement.
6.4 Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless
the members of the Plan Administrator against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.
6.5 Bank Information. To enable the Plan Administrator to perform its functions,
the Bank shall supply full and timely information to the Plan Administrator on
all matters relating to the date and circumstances of the retirement,
Disability, death, or Separation from Service of the Executive, and such other
pertinent information as the Plan Administrator may reasonably require.
6.6 Annual Statement. The Plan Administrator shall provide to the Executive,
within one hundred twenty (120) days after the end of each Plan Year, a
statement setting forth the benefits to be distributed under this Agreement.
Article 7
Claims And Review Procedures
7.1 Claims Procedure. An Executive or Beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be
distributed shall make a claim for such benefits as follows:
7.1.1 Initiation - Written Claim. The claimant initiates a claim by submitting
to the Plan Administrator a written claim for the benefits. If such a claim
relates to the contents of a notice received by the claimant, the claim must be
made within sixty (60) days after such notice was received by the claimant. All
other claims must be made within one hundred eighty (180) days of the date on
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which the event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the claimant.
7.1.2 Timing of Plan Administrator Response. The Plan Administrator shall
respond to such claimant within 90 days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by
an additional 90 days by notifying the claimant in writing, prior to the end of
the initial 90-day period, that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the
Plan Administrator expects to render its decision.
7.1.3 Notice of Decision. If the Plan Administrator denies part or all of the
claim, the Plan Administrator shall notify the claimant in writing of such
denial. The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the Agreement on which the denial
is based; (c) A description of any additional information or material necessary
for the claimant to perfect the claim and an explanation of why it is needed;
(d) An explanation of the Agreement's review procedures and the time limits
applicable to such procedures; and (e) A statement of the claimant's right to
bring a civil action under ERISA Section 502(a) following an adverse benefit
determination on review.
7.2 Review Procedure. If the Plan Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial, as follows:
7.2.1 Initiation - Written Request. To initiate the review, the claimant, within
60 days after receiving the Plan Administrator's notice of denial, must file
with the Plan Administrator a written request for review.
7.2.2 Additional Submissions - Information Access. The claimant shall then have
the opportunity to submit written comments, documents, records and other
information relating to the claim. The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant's claim for benefits.
7.2.3 Considerations on Review. In considering the review, the Plan
Administrator shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.
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7.2.4 Timing of Plan Administrator Response. The Plan Administrator shall
respond in writing to such claimant within 60 days after receiving the request
for review. If the Plan Administrator determines that special circumstances
require additional time for processing the claim, the Plan Administrator can
extend the response period by an additional 60 days by notifying the claimant in
writing, prior to the end of the initial 60-day period, that an additional
period is required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to render its
decision.
7.2.5 Notice of Decision. The Plan Administrator shall notify the claimant in
writing of its decision on review. The Plan Administrator shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the Agreement on which the denial
is based; (c) A statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant (as defined in applicable ERISA regulations) to
the claimant's claim for benefits; and (d) A statement of the claimant's right
to bring a civil action under ERISA Section 502(a).
Article 8
Amendments and Termination
8.1 Amendments. This Agreement may be amended only by a written agreement signed
by the Bank and the Executive. However, the Bank may unilaterally amend this
Agreement to conform with written directives to the Bank from its auditors or
banking regulators or to comply with legislative or tax law, including without
limitation Section 409A of the Code and any and all regulations and guidance
promulgated thereunder.
8.2 Plan Termination Generally. This Agreement may be terminated only by a
written agreement signed by the Bank and the Executive. The benefit shall be the
Early Termination benefit as set forth on Schedule A 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, upon such termination benefit distributions will be made at the earliest
distribution event permitted under Article 2 or Article 3.
8.3 Plan Terminations Under Section 409A. Notwithstanding anything to the
contrary in Section 8.2, if the Bank terminates this Agreement in the following
circumstances:
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(a) 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;
(b) 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 (c) Upon the Bank's
termination of this and all other non-account balance plans (as referenced in
Section 409A of the Code or the regulations thereunder), provided that all
distributions are made no earlier than twelve (12) months and no later than
twenty-four (24) months following such termination, and the Bank does not adopt
any new non-account balance plans for a minimum of five (5) years following the
date of such termination;
the Bank may distribute the actuarial equivalent of the present value of the
Early Termination benefit, determined as of the date of the termination of the
Agreement, to the Executive in a lump sum subject to the above terms.
Article 9
Miscellaneous
9.1 Binding Effect. This Agreement shall bind the Executive and the Bank,
and their beneficiaries, survivors, executors, administrators and transferees.
9.2 No Guarantee of Employment. This Agreement is not a contract for employment.
It does not give the Executive the right to remain as an employee of the Bank,
nor does it interfere with the Bank's right to discharge the Executive. It also
does not require the Executive to remain an employee nor interfere with the
Executive's right to terminate employment at any time.
9.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
9.4 Tax Withholding and Reporting. The Bank shall withhold any taxes that are
required to be withheld, including but not limited to taxes owed under Section
409A of the Code and regulations thereunder, from the benefits provided under
this Agreement. Executive acknowledges that the Bank's sole liability regarding
taxes is to forward any amounts withheld to the appropriate taxing
authority(ies). Further, the Bank shall satisfy all applicable reporting
11
requirements, including those under Section 409A of the Code and regulations
thereunder.
9.5 Applicable Law. The Agreement and all rights hereunder shall be governed by
the laws of the Commonwealth of Virginia, except to the extent preempted by the
laws of the United States of America.
9.6 Unfunded Arrangement. The Executive and the Beneficiary are general
unsecured creditors of the Bank for the distribution of benefits under this
Agreement. The benefits represent the mere promise by the Bank to distribute
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
or other informal funding asset is a general asset of the Bank to which the
Executive and Beneficiary have no preferred or secured claim.
9.7 Reorganization. The Bank shall not merge or consolidate into or with another
bank, or reorganize, or sell substantially all of its assets to another bank,
firm, or person unless such succeeding or continuing bank, firm, or person
agrees to assume and discharge the obligations of the Bank under this Agreement.
Upon the occurrence of such event, the term "Bank" as used in this Agreement
shall be deemed to refer to the successor or survivor bank.
9.8 Entire Agreement. This Agreement constitutes the entire agreement between
the Bank and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
9.9 Interpretation. Wherever the fulfillment of the intent and purpose of this
Agreement requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.
9.10 Alternative Action. In the event it shall become impossible for the Bank or
the Plan Administrator to perform any act required by this Agreement, the Bank
or Plan Administrator may in its discretion perform such alternative act as most
nearly carries out the intent and purpose of this Agreement and is in the best
interests of the Bank, provided that such alternative acts do not violate
Section 409A of the Code.
9.11 Headings. Article and section headings are for convenient reference only
and shall not control or affect the meaning or construction of any of its
provisions.
9.12 Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Agreement shall be construed and enforced as if
such illegal and invalid provision has never been inserted herein.
9.13 Notice. Any notice or filing required or permitted to be given to the Bank
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or Plan Administrator under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:
Bank of Tazewell County
c/o National Bankshares, Inc.
Attn: Xxxxx X. Xxxxx
P.O. Box 90002 Blacksburg, VA 24062-9002
Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.
Any notice or filing required or permitted to be given to the Executive under
this Agreement shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the Executive.
9.14 Compliance with Section 409A. This Agreement shall at all times be
administered and the provisions of this Agreement shall be interpreted
consistent with the requirements of Section 409A of the Code and any and all
regulations thereunder, including such regulations as may be promulgated after
the Effective Date of this Agreement.
9.15 Rescissions. Any modification to the terms of this Agreement that would
inadvertently result in an additional tax liability on the part of the
Executive, shall have no effect to the extent the change in the terms of the
plan is rescinded by the earlier of a date before the right is exercised (if the
change grants a discretionary right) and the last day of the calendar year
during which such change occurred.
IN WITNESS WHEREOF, the Executive and a duly authorized representative of the
Bank have signed this Agreement.
Executive: BANK:
National Bankshares, Inc.
/S/ X. XXXXXX XXXXXXXX By /S/ XXXXX X. XXXXX
---------------------- --------------------------------
X. Xxxxxx Xxxxxxxx Title PRESIDENT, CHAIRMAN & CEO
13
BANK OF TAZEWELL COUNTY
Salary Continuation Agreement
================================================================================
BENEFICIARY DESIGNATION FORM
{ } New Designation
{ } Change in Designation
I, __________________________, designate the following as Beneficiary under the
Agreement:
Primary:
----------------------------------------------------------- -----%
----------------------------------------------------------- -----%
Contingent:
----------------------------------------------------------- -----%
----------------------------------------------------------- -----%
Notes:
? Please PRINT CLEARLY or TYPE the names of the beneficiaries.
? To name a trust as Beneficiary, please provide the name of the trustee(s) and
the exact name and date of the trust agreement. ? To name your estate as
Beneficiary, please write "Estate of [your name]". ? Be aware that none of the
contingent beneficiaries will receive anything unless ALL of the primary
beneficiaries predecease you.
I understand that I may change these beneficiary designations by delivering a
new written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death. I
further understand that the designations will be automatically revoked if the
Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and our
marriage is subsequently dissolved.
Name: _______________________________
Signature: _______________________________ Date: _______
Received by the Plan Administrator this ________ day of _________________, 2___
By: _________________________________
Title: _________________________________
