BAR HARBOR BANKSHARES SUPPLEMENTAL EXECUTIVE RETIREMENT PLANAddendum or Modifications |
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Exhibit 10.7
BAR HARBOR
BANKSHARES
As adopted
BAR HARBOR
BANKSHARES
Table of Contents ARTICLE 1 DESIGNATION AND PURPOSE
1.1 Designation ARTICLE 2 DEFINITIONS ARTICLE 3 ELIGIBILITY 3.1 Eligibility to Participate ARTICLE 4 RETIREMENT BENEFITS
4.1 Normal Retirement Benefit ARTICLE 5 DEATH BENEFIT
5.1 Death Before Benefit Commencement ARTICLE 6 UNFORESEEABLE EMERGENCY 6.1 Withdrawal for Unforeseeable Emergency ARTICLE 7 OTHER PLAN PROVISIONS
7.1 Funding ARTICLE 8 REEMPLOYMENT AND TERMINATION OF BENEFIT PAYMENTS
8.1 Reemployment ARTICLE 9 ADMINISTRATION
9.1 Plan Administrator ARTICLE 10 BENEFIT CLAIMS PROCEDURE
10.1 Claims Procedure ARTICLE 11 AMENDMENT 11.1 Right to Amend ARTICLE 12 MISCELLANEOUS
12.1 Titles are for Reference Only ANNEX A Schedule of Benefits
BAR HARBOR
BANKSHARES Pursuant to a resolution of its board of directors, Bar Harbor Bankshares, a Maine corporation, has adopted this supplemental executive retirement plan.
ARTICLE 1 1.1 Designation . The Plan is designated the "Bar Harbor Bankshares Supplemental Executive Retirement Plan – Code Section 409A". 1.2 Purpose . The purpose of the Plan is to provide certain eligible employees of Bar Harbor Bankshares and its affiliated companies with retirement income pursuant to an unfunded, deferred compensation arrangement maintained solely for a select group of management or highly compensated employees. 1.3 Code Section 409A . Effective as of January 1, 2003, Bar Harbor Bankshares adopted the "Bar Harbor Bankshares Supplemental Executive Retirement Plan" (the "Grandfathered Plan") for the purpose of providing deferred compensation for a select group of management or highly compensated employees. Bar Harbor Bankshares intends that the Grandfathered Plan be treated as a grandfathered plan that is exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") because it relates solely to deferred compensation that was both earned and vested prior January 1, 2005. This Plan shall be deemed to be subject to the requirements of Code Section 409A and shall relate solely to deferred compensation that is either earned or vested on or after January 1, 2005. 1.4 Effective Date . The effective date of this Plan is January 1, 2005.
ARTICLE 2 When used herein, each of the words and phrases defined hereinafter shall have the following meaning unless a different meaning is clearly required by the context of the Plan. "Accrued Benefit" shall mean the excess of: (a) the monthly retirement benefit which a Participant is entitled to receive if the payment of his or her benefit commences prior to his or her Normal Retirement Date, as set forth in Section A.3 of Annex A; over (b) the monthly retirement benefit which was both earned and vested by the Participant prior to January 1, 2005 under the terms of the Grandfathered Plan. "Beneficiary" shall mean the person or persons named by the Participant as his or her beneficiary pursuant to the provisions of Section 7.4. "Cause" shall be deemed to exist only in the event the Participant is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Participant in his or her relationship with the Company. "Change in Control" shall mean the occurrence of any one of the following events: (a) Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Principal Company representing more than fifty percent (50%) of the combined voting power of the Principal Company’s then outstanding securities, other than as a result of an issuance of securities initiated by the Principal Company in the ordinary course of its business; or (b) The Principal Company is party to a Business Combination (as hereinafter defined) unless, following consummation of the Business Combination, more than fifty percent (50%) of the outstanding voting securities of the resulting entity are beneficially owned, directly or indirectly, by the holders of the Principal Company’s outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or (c) The stockholders of the Principal Company approve a plan of complete liquidation of the Principal Company or an agreement for the sale or disposition by the Principal Company of substantially all of the Principal Company’s assets to another person or entity which is not a wholly-owned subsidiary of the Principal Company. For purposes of the foregoing, a "Business Combination" means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets or any combination of the foregoing transactions. No internal reorganization of the board of directors of the Principal Company or any affiliate’s board membership will be deemed to be a Change in Control for purposes of the foregoing. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Company" shall mean the Principal Company and any other corporation or other entity which has assumed the obligations of the Plan with respect to its employees with the consent of the Principal Company, and any successor thereof. "Disabled Participant" shall mean a Participant who has a condition: (a) which causes the Participant to be 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 which can be expected to last for a continuous period of not less than twelve months; or (b) which results in the Participant receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. Disability shall be deemed to exist only when a written application has been filed with the Plan Administrator by or on behalf of the Participant and, with respect to a condition described in subparagraph (a), when such disability is certified to the Plan Administrator by a licensed physician approved by the Plan Administrator. "Disability Retirement Date" shall mean the date on which the Plan Administrator determines that a Participant is a Disabled Participant. "Early Retirement Date" shall mean the date on which a Participant reaches age fifty (50). "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "Good Reason" shall mean, unless the Participant consents to such action, a reduction in the Participant’s compensation that does not apply generally to all senior executive officers of the Company, a material reduction in the duties of the Participant, or a change in the principal worksite of the Participant to a location that is more than fifty (50) miles from Bar Harbor, Maine. "Grandfathered Plan" shall mean the Bar Harbor Bankshares Supplemental Executive Retirement Plan which is maintained by the Company for the purpose of providing deferred compensation for a select group of management or highly compensated employees, and which is intended to be treated as a grandfathered plan that is exempt from the requirements of Code Section 409A because it relates solely to deferred compensation that was both earned and vested prior January 1, 2005. "Key Employee" shall mean an employee of the Company who is a key employee, as defined for purposes of Section 416(i) of the Code. For this purpose, a key employee includes an employee: (a) who is a five percent owner of the Company; (b) who is an officer of the Company and who has annual compensation greater than $130,000 (as adjusted by the Secretary of the Treasury); or (c) who is a one percent owner of the Company and who has annual compensation greater than $150,000 (as adjusted by the Secretary of the Treasury). "Normal Retirement Benefit" shall mean the excess of: (a) the monthly retirement benefit which a Participant is entitled to receive if the payment of his or her benefit commences on or after his or her Normal Retirement Date, as set forth in Section A.2 of Annex A; over (b) the monthly retirement benefit which was both earned and vested by the Participant prior to January 1, 2005 under the terms of the Grandfathered Plan. "Normal Retirement Date" shall mean the date on which a Participant reaches the age set forth in Section A.1 of Annex A. "Participant" shall mean an individual who is designated in Article 3 of the Plan as being eligible to participate in the Plan. "Plan" shall mean the Bar Harbor Bankshares Supplemental Executive Retirement Plan – Code Section 409A as of its original effective date, including any amendments thereto. "Plan Administrator" shall mean the board of directors of the Principal Company. The Plan Administrator shall be a named fiduciary with respect to the Plan. "Plan Year" shall mean the twelve month period ending on December 31 of each year. "Present Value" shall mean the lump sum present value of a benefit which a Participant or Beneficiary is entitled to receive under the Plan, determined as of a particular date and calculated using reasonable actuarial assumptions (as determined by the Plan Administrator). "Principal Company" shall mean Bar Harbor Bankshares. "Retirement Benefit" shall mean a Normal Retirement Benefit, an Early Retirement Benefit, a Disability Retirement Benefit or a Vested Deferred Benefit, each as defined in Article 4. "Unforeseeable Emergency" shall mean a severe financial hardship to the Participant resulting from: (a) an illness or accident of the Participant, the Participant's spouse, or a dependent of the Participant (as defined in Section 152 of the Code, without regard to Section 152(b)(1),(b)(2) and (d)(1)(B)); (b) loss of the Participant's property due to casualty; or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The determination of an Unforeseeable Emergency shall be made by the Plan Administrator in its sole discretion, based on such information as the Plan Administrator shall deem to be necessary.
ARTICLE 3 3.1 Eligibility to Participate . The following individuals shall be Participants in the Plan: Joseph M. Murphy Notwithstanding the foregoing, however, an individual shall not be a Participant in the Plan unless the individual is a member of a select group of management or highly compensated employees within the meaning of Sections 201, 301 and 401 of ERISA. 3.2 Duration of Participation . Each individual named in Section 3.1 shall remain a Participant in the Plan for as long as he or she is entitled to any benefits under the Plan.
ARTICLE 4 4.1 Normal Retirement Benefit . A Normal Retirement Benefit shall be payable to an eligible Participant who separates from service on or after his or her Normal Retirement Date (as set forth in Section A.1 of Annex A) in an amount equal to his or her Normal Retirement Benefit. The Normal Retirement Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the date on which the Participant separates from service, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain; provided, however, if the Participant is a Key Employee, the Normal Retirement Benefit shall not commence prior to six months after the date of the Participant’s separation from service. 4.2 Early Retirement Benefit . An Early Retirement Benefit shall be payable to an eligible Participant who separates from service on or after his or her Early Retirement Date and prior to his or her Normal Retirement Date in an amount equal to his or her Accrued Benefit. The Early Retirement Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the date on which the Participant separates from service, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain; provided, however, if the Participant is a Key Employee, the Early Retirement Benefit shall not commence prior to six months after the date of the Participant’s separation from service. Notwithstanding the above, if an eligible Participant separates from service on or after his or her Early Retirement Date and prior to his or her Normal Retirement Date and within three years after a Change in Control, and if the eligible Participant initiates the separation from service for Good Reason or the Company initiates the separation from service without Cause, then the amount of his or her Early Retirement Benefit shall be equal to his or her Normal Retirement Benefit. 4.3 Disability Retirement Benefit . A Disability Retirement Benefit shall be payable to an eligible Participant who becomes a Disabled Participant prior to his or her Normal Retirement Date and who is employed by the Company at the time he or she becomes a Disabled Participant. The amount of the Disability Retirement Benefit shall be equal to his or her Accrued Benefit. The Disability Retirement Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the Participant's Disability Retirement Date, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain or until the Participant ceases to be a Disabled Participant (whichever occurs first). Notwithstanding the above, if an eligible Participant becomes a Disabled Participant prior to his or her Normal Retirement Date, while employed by the Company, and within three years after a Change in Control, then the amount of his or her Disability Retirement Benefit shall be equal to his or her Normal Retirement Benefit. If an eligible Participant ceases to be a Disabled Participant, the Participant’s Disability Retirement Benefit shall cease. Thereafter, if the Participant subsequently becomes eligible to receive a Normal Retirement Benefit, an Early Retirement Benefit or a Vested Deferred Benefit, the amount of each monthly payment of such Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit shall be adjusted by the same amount so that the Present Value of the adjusted monthly payments of such Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit shall equal the excess (if any) of: (a) the Present Value of the unadjusted Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit payable under the Plan, reduced by (b) the Present Value of the amounts previously received by the Participant as a Disability Retirement Benefit from the Plan. 4.4 Vested Deferred Benefit . A Vested Deferred Benefit shall be payable to an eligible Participant who separates from service prior to his or her Early Retirement Date and who is not eligible to receive a Disability Retirement Benefit in an amount equal to his or her Accrued Benefit. The Vested Deferred Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the Participant's Early Retirement Date, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain; provided, however, if the Participant is a Key Employee, the Vested Retirement Benefit shall not commence prior to six months after the date of the Participant’s separation from service. Notwithstanding the above, if an eligible Participant separates from service prior to his or her Early Retirement Date and within three years after a Change in Control, and if the eligible Participant initiates the separation from service for Good Reason or the Company initiates the separation from service without Cause, then the amount of his or her Vested Deferred Benefit shall be equal to his or her Normal Retirement Benefit. 4.5 Change in Form of Distribution . Anything herein to the contrary notwithstanding, a Participant may elect to have his or her Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit paid in a lump sum distribution equal to the Present Value of such benefit rather than in installments , subject to the following requirements: (a) Any election pursuant to this Section 4.5: (i) cannot become effective until twelve months after the date on which the election is made; and (ii) must delay the date of the lump sum distribution for five years from the date the first installment payment would otherwise have been made. (b) In no event can an election made pursuant to this Section 4.5 constitute an acceleration for purposes of Code Section 409A. A Participant may make an election described in this Section 4.5 by submitting an election form to the Plan Administrator.
4.6 One-Time Election Opportunity . (a) In Notice 2006-79, Section 3.02, the Internal Revenue Service stated that, with respect to deferred compensation subject to Code Section 409A, a nonqualified deferred compensation arrangement may be amended to allow a participant to make a new payment election with respect to the form of payment of his or her deferred compensation, and such election will not be treated as a change in the form of payment of the deferred compensation under Code Section 409A(a)(4) or an acceleration of a payment under Code Section 409A(a)(3), provided that : (i) the amendment is adopted and effective on or before December 31, 2007; (ii) the participant makes an election regarding the form of payment of his or her deferred compensation on or before December 31, 2007; (iii) the election applies only to amounts that would not otherwise be payable in 2007 and does not cause an amount to be paid in 2007 that would not otherwise be payable in 2007; and (iv) the election otherwise satisfies the constructive receipt rule and other provisions of the Code and common law doctrines. Pursuant to Notice 2006-79, Section 3.02, on or before December 31, 2007, a Participant may elect to have his or her Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit paid in a lump sum distribution equal to the Present Value of such benefit rather than in installments.
ARTICLE 5 5.1 Death Before Benefit Commencement . A death be |
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