Exhibit 10.1
THE PEOPLES NATIONAL BANK
Salary Continuation Agreement
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THE PEOPLES NATIONAL BANK
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (the "Agreement") is adopted this
24th day of October, 2006, by and between THE PEOPLES NATIONAL BANK, a national
commercial bank located in Easley, South Carolina (the "Bank") and Xxxxxx Xxxxxx
Xxx, Xx. (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, with respect to an Executive, a "change in
ownership" or a "change in effective control" of the Bank or an
affiliated corporation, as described in Treasury Regulations Section
1.409A-3(g)(5) (which events are collectively referred to herein as
"Change in Control events"). Notwithstanding any provision herein to
the contrary, to qualify as a Change in Control, the occurrence of the
Change in Control event must be objectively determinable and any
requirement that any person, such as the Board or the Compensation
Committee, certify the occurrence of a Change in Control event must be
strictly ministerial and not involve any discretionary authority. To
constitute a Change in Control with respect to an Executive, the Change
in Control event must relate to (i) the corporation for which the
Executive is performing services at the time of the Change in Control;
(ii) the corporation that is liable for the payment of the deferred
compensation; or (iii) a corporation that is a majority shareholder of
a corporation identified in subparagraph (i) or (ii) above, or any
corporation in a chain of corporations in which each corporation is a
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majority shareholder of another corporation in the chain, ending in a
corporation identified in subparagraph (i) or (ii) above.
(a) A "change in ownership" of a corporation occurs on the date
that any one person, or more than one person acting as a
group, acquires ownership of stock of the corporation that,
together with stock held by such person or group, constitutes
more than 50 percent of the total fair market value or total
voting power of the stock of such corporation. However, if any
one person, or more than one person acting as a group, is
considered to own more than 50 percent of the total fair
market value or total voting power of the stock of a
corporation, the acquisition of additional stock by the same
person or persons is not considered to cause a change in
ownership of the corporation (or to cause a change in the
effective control of the corporation (within the meaning of
paragraph (b) below)).
(b) Notwithstanding that a corporation has not undergone a change
in ownership under paragraph (a) above, a "change in effective
control" of a corporation occurs on the date that either:
(i) Any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month
period ending on the date of the most recent
acquisition by such person or persons) ownership of
stock of the corporation possessing 35 percent or
more of the total voting power of the stock of such
corporation; or
(ii) A majority of members of the corporation's board of
directors is replaced during any 12-month period by
directors whose appointment or election is not
endorsed by a majority of the members of the
corporation's board of directors prior to the date of
the appointment or election.
For purposes of this paragraph (b), the term corporation refers solely
to the relevant corporation identified in the opening paragraph of this
Section 1.4, for which no other corporation is a majority shareholder.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Disability" means the Executive's inability as a result of physical or
mental incapacity to substantially perform his duties for the Bank on a
full-time basis for a period of six (6) months as determined by an
independent physician selected with the approval of both the Executive
and the Bank.
1.7 "Early Termination" means Separation from Service before Normal
Retirement Age except when such Separation from Service occurs
following a Change in Control or due to death, Disability, or
Termination for Cause.
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1.8 "Effective Date" means October 1, 2006.
1.9 "Final Pay" means the Executive's highest annualized base salary
(before reduction for compensation deferred pursuant to all qualified,
non-qualified, and Code Section 125 plans) from the three (3) years
prior to Separation from Service, including the year such Separation
from Service occurs.
1.10 "Normal Retirement Age" means the Executive attaining age sixty-five
(65).
1.11 "Normal Retirement Date" means the later of Normal Retirement Age or
Separation from Service.
1.12 "Plan Administrator" means the plan administrator described in Article
6.
1.13 "Plan Year" means each twelve-month period commencing on October 1st
and ending on September 30th of each year. The initial Plan Year shall
commence on the Effective Date of this Agreement and end on the
following September 30th.
1.14 "Projected Benefit" means fifteen percent (15%) of Projected Final Pay.
1.15 "Projected Final Pay" means Final Pay increased by four percent (4%)
annually, until Normal Retirement Age.
1.16 "Separation from Service" means the termination of the Executive's
employment with the Bank and all affiliated entities within the meaning
of Sections 414(b) and 414(c) of the Code, for reasons other than
death. 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, illness, 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
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average annual remuneration earned during the final three full
calendar years of employment (or if less, such lesser period).
1.17 "Specified Employee" means a key employee (as defined in Section 416(i)
of the Code without regard to paragraph 5 thereof) of the Bank or any
affiliated entity within the meaning of Sections 414(b) and 414(c) of
the Code, if any stock of such entity is publicly traded on an
established securities market or otherwise.
1.18 "Termination for Cause" means Separation from Service for:
(a) any act that constitutes, on the part of the Executive,
continued failure to implement or follow the directives,
policies or procedures of the Board, willful violation of any
state or federal law or regulation applicable to the Bank,
mis-, mal- or non-feasance of duty, conduct inappropriate to
the Executive's office, or a willful violation of this
Agreement which is demonstrably likely to lead to injury to
the business or reputation of the Bank; or
(b) any act that resulted or was intended to result in direct or
indirect gain to or personal enrichment of the Executive at
the expense, direct or indirect, of the Bank; or
(c) any act that constitutes, on the part of the Executive, fraud,
dishonesty, moral turpitude, gross negligence, or intentional
damage to the property or business of the Bank; or
(d) the conviction (from which no appeal may be or is timely
taken) of the Executive of a felony; or
(e) the suspension or removal of the Executive by federal or state
banking regulatory authorities acting under lawful authority
pursuant to provisions of federal or state law or regulation
which may be in effect from time to time;
provided, however, that in the case of clauses (a) and (b) above, such
conduct shall not constitute Cause:
(x) unless (i) there shall have been delivered to the
Executive a written notice setting forth with
specificity the reasons that the Board believes the
Executive's conduct meets the criteria set forth in
clause (a) or clause (b), (ii) the Executive shall
have been provided the opportunity to be heard in
person by the Board (with assistance of the
Executive's counsel if the Executive so desires), and
(iii) after such hearing, the termination is
evidenced by a resolution adopted in good faith by
two-thirds of the members of the Board (other than
the Executive); provided further, however, that, if
the Executive's employment is terminated by operation
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of the Bylaws of the Bank as the result of a
Disqualification Notice (as defined in the Bylaws),
as used in this paragraph (x), "Board of the Company"
shall mean the board of directors of Peoples
Bancorporation, Inc.
Article 2
Distributions During Lifetime
2.1 Normal Retirement Benefit. Upon the Normal Retirement Date, 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 fifteen percent (15%) of Final Pay.
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 Date. The annual benefit shall be
distributed to the Executive for fifteen (15) years.
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 benefit under this Section 2.2 is the
vested percentage, determined as of the end of the Plan Year
preceding Separation from Service, of the benefit described in
Section 2.1.1 subject to the following vesting schedule:
Percent
Date Vested
---- ------
10/31/2006 - 10/30/2007 0.32%
10/31/2007 - 10/30/2008 2.08%
10/31/2008 - 10/30/2009 5.07%
10/31/2009 - 10/30/2010 9.11%
10/31/2010 - 10/30/2011 14.06%
10/31/2011 - 10/30/2012 19.79%
10/31/2012 - 10/30/2013 26.17%
10/31/2013 - 10/30/2014 33.12%
10/31/2014 - 10/30/2015 40.56%
10/31/2015 - 10/30/2016 48.44%
10/31/2016 - 10/30/2017 51.55%
10/31/2017 - 10/30/2018 54.42%
10/31/2018 - 10/30/2019 57.11%
10/31/2019 - 10/30/2020 59.62%
10/31/2020 - 10/30/2021 62.01%
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10/31/2021 - 10/30/2022 64.31%
10/31/2022 - 10/30/2023 66.53%
10/31/2023 - 10/30/2024 68.72%
10/31/2024 - 10/30/2025 70.92%
10/31/2025 - 10/30/2026 73.17%
10/31/2026 - 10/30/2027 75.52%
10/31/2027 - 10/30/2028 78.04%
10/31/2028 - 10/30/2029 80.84%
10/31/2029 - 10/30/2030 84.06%
10/31/2030 - 10/30/2031 87.98%
10/31/2031 - 7/7/2032 93.22%
7/8/2032 or Later 100.00%
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
distributed to the Executive for fifteen (15) years.
2.3 Disability Benefit. If Executive experiences a Disability which results
in a Separation from Service 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 benefit under this Section 2.3 is the
vested percentage, determined as of the end of the Plan Year
preceding Separation from Service, of the benefit described in
Section 2.1.1 subject to the following vesting schedule:
Percent
Date Vested
---- ------
10/31/2006 - 10/30/2007 3.20%
10/31/2007 - 10/30/2008 10.38%
10/31/2008 - 10/30/2009 16.88%
10/31/2009 - 10/30/2010 22.78%
10/31/2010 - 10/30/2011 28.13%
10/31/2011 - 10/30/2012 32.98%
10/31/2012 - 10/30/2013 37.38%
10/31/2013 - 10/30/2014 41.40%
10/31/2014 - 10/30/2015 45.07%
10/31/2015 - 10/30/2016 48.44%
10/31/2016 - 10/30/2017 51.55%
10/31/2017 - 10/30/2018 54.42%
10/31/2018 - 10/30/2019 57.11%
10/31/2019 - 10/30/2020 59.62%
10/31/2020 - 10/30/2021 62.01%
10/31/2021 - 10/30/2022 64.31%
10/31/2022 - 10/30/2023 66.53%
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10/31/2023 - 10/30/2024 68.72%
10/31/2024 - 10/30/2025 70.92%
10/31/2025 - 10/30/2026 73.17%
10/31/2026 - 10/30/2027 75.52%
10/31/2027 - 10/30/2028 78.04%
10/31/2028 - 10/30/2029 80.84%
10/31/2029 - 10/30/2030 84.06%
10/31/2030 - 10/30/2031 87.98%
10/31/2031 - 7/7/2032 93.22%
7/8/2032 or Later 100.00%
2.3.2 Distribution of Benefit. The Bank shall distribute the 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 fifteen (15) years.
2.4 Change in Control Benefit. Upon a Change in Control followed by a
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 benefit under this Section 2.4 is one
hundred percent (100%) of the Projected Benefit.
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 Normal Retirement Age. The annual benefit shall be
distributed to the Executive for fifteen (15) years.
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 which would otherwise be
paid to the Executive within the first six months following the
Separation from Service shall be accumulated and paid to the Executive
in a lump sum on the first day of the seventh month following the
Separation from Service. All subsequent distributions shall be paid in
the manner specified.
2.6 Distributions Upon Income Inclusion Under Section 409A of the Code.
Upon the inclusion of any portion of the benefits 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
liability accrued to satisfy the Bank's obligations to Executive
pursuant to this Agreement, a distribution shall be made as soon as is
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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 Sections 2.1, 2.2, 2.3
and 2.4, be made at least twelve (12) months prior to the
first scheduled distribution;
(c) must, for benefits distributable under Sections 2.1, 2.2, 2.3
and 2.4, delay the commencement of distributions for a minimum
of five (5) years from the date the first distribution was
originally scheduled to be made; and
(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 benefit under this Section 3.1 is the
Projected Benefit.
3.1.2 Distribution of Benefit. The Bank shall distribute the benefit
to the Beneficiary in a lump sum within sixty (60) days
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 benefits at the same time and in the same
amounts that would have been distributed to the Executive had the
Executive survived.
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.
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Article 4
Beneficiaries
4.1 Beneficiary. The Executive 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 Executive 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 Executive 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.
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 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.
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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 (2) 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.
5.4 Forfeiture Provision. While Executive is employed by the Bank and
during the period of time the Executive is receiving any benefit
payments pursuant to this Agreement, the Executive will not, for
himself or on behalf of, or in conjunction with any other person or
persons, company, partnership, limited liability company,
proprietorship, trust, company, bank, financial services institution,
or other entity, directly or indirectly, own, manage, operate, control,
be employed by, consult with, participate in, or be connected in any
manner with the ownership, employment, management, operation,
consulting or control of any financial services institution that
competes with Bank. In the event of any actual breach by the Executive
of the provisions of this forfeiture provision, all payments under this
Agreement payable to the Executive shall irrevocably terminate and no
further amount shall be due or payable to the Executive pursuant to
this Agreement. Executive specifically acknowledges that the
restrictions as set forth above are reasonable and bear a valid
connection with the business operations of Bank, and specifically
admits that Executive is capable of obtaining suitable employment not
in competition with Bank. If anyone of the restrictions contained
herein shall for any reason be held to be excessively broad as to
duration or geographical area, it shall be deemed amended by limiting
and reducing it so as to be valid and enforceable to the extent
compatible with applicable state law as it shall then appear. Executive
acknowledges that the Bank would not have entered into this Agreement
without the forfeiture provision contained herein. This forfeiture
provision shall not prohibit the Executive from owning stock in any
publicly traded company provided Executive's ownership is five percent
(5%) or less of the issued and outstanding stock of such publicly
traded company and the Executive has no corporate responsibility other
than the Executive's rights as a stockholder.
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Article 6
Administration of Agreement
6.1 Plan Administrator Duties. This Agreement shall be administered by a
Plan Administrator which shall consist of the Compensation Committee of
the Board, or such committee or person(s) as the Board shall appoint.
The Plan Administrator shall administer this 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.
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Article 7
Claims 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 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.
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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.
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
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(d) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
7.3 Special Procedures Applicable to Disability Claims. If a claim for
benefits under the Agreement is contingent on a determination by the
Plan Administrator that the Executive suffers from a Disability, the
claimant shall receive a written response to the initial claim from the
Plan Administrator within 45 days, rather than 90 days. If special
circumstances require an extension, the Plan Administrator shall notify
the claimant within the 45-day processing period that additional time
is needed. If the Plan Administrator requests additional information so
it can process the claim, the claimant will have at least 45 days in
which to provide the information. Otherwise, the initial extension
cannot exceed 30 days. If circumstances require further extension, the
Plan Administrator will again notify the claimant, this time before the
end of the initial 30-day extension. The notice will state the date a
decision can be expected. In no event will a decision be postponed
beyond an additional 30 days after the end of the first 30-day
extension. The claimant may request a review of the Plan
Administrator's decision regarding the Disability claim within 180
days, rather than 60 days. The review must be conducted by a fiduciary
different from the fiduciary who originally denied the claim, and the
fiduciary also cannot be subordinate to the fiduciary who originally
denied the claim. If the original denial of the claim was based on a
medical judgment, the reviewing fiduciary must consult with an
appropriate health care professional who was not consulted on the
original claim and who is not subordinate to someone who was The review
must identify the medical or vocational experts consulted on the
original claim. The claimant may request, in writing, a list of those
medical or vocational experts. The claimant will receive notice of the
reviewing fiduciary's final decision regarding the Disability claim
within 45 days, rather than 60 days, of the request for review.
7.4 Legal Action. A claimant's compliance with the foregoing provisions of
this Article 7 is a mandatory prerequisite to a claimant's right to
commence any legal action with respect to any claim for benefits under
this Agreement.
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 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
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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:
(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 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.
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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. The 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 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 State of South Carolina, 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.
9.10 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.
9.11 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.
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9.12 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.
9.13 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.
9.14 Notice. Any notice or filing required or permitted to be given to the
Bank 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:
The Peoples National Bank
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
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.
9.15 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 and similar guidance thereunder, including such
regulations as may be promulgated after the Effective Date of this
Agreement.
IN WITNESS WHEREOF, the Executive and a duly authorized representative
of the Bank have signed this Agreement.
Executive: BANK:
THE PEOPLES NATIONAL BANK
By:
-----------------------------------------
-----------------------
Xxxxxx Xxxxxx Xxx, Xx.
Title:
--------------------------------------
17
{ } New Designation
{ } Change in Designation
I, Xxxxxx Xxxxxx Xxx, Xx., designate the following as Beneficiary under the
Agreement:
Primary:
----------------------------------------------- -----%
----------------------------------------------- -----%
Contingent:
----------------------------------------------- -----%
----------------------------------------------- -----%
Notes:
o Please PRINT CLEARLY or TYPE the names of the beneficiaries.
o To name a trust as Beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.
o To name your estate as Beneficiary, please write "Estate of
[your name]".
o 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: Xxxxxx Xxxxxx Xxx, Xx.
Signature: _______________________________ Date: _______
Received by the Plan Administrator this ________ day of __________________, 2___
By: _________________________________
Title: _________________________________
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