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FIRST AMENDMENT TO THE PBI BANK SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Addendum or Modifications

FIRST AMENDMENT 

TO THE 

PBI BANK 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN | Document Parties: PORTER BANCORP, INC. You are currently viewing:
This Addendum or Modifications involves

PORTER BANCORP, INC.

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Title: FIRST AMENDMENT TO THE PBI BANK SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Date: 3/26/2009
Industry: Regional Banks     Sector: Financial

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Exhibit 10.7

FIRST AMENDMENT

TO THE

PBI BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

DATED AUGUST 31, 2004

FOR

EXECUTIVE

THIS FIRST AMENDMENT is adopted this              day of                      , 2008, effective as of January 1, 2005, by and between PBI BANK (f/k/a Ascencia Bank), a state-chartered commercial bank located in Louisville, Kentucky (the “Company”), and EXECUTIVE (the “Executive”).

The Company and Executive executed the Ascencia Bank Supplemental Executive Retirement Plan effective as of August 31, 2004 (the “Agreement”).

The undersigned hereby amend the Agreement for the purpose of bringing the Agreement into compliance with Section 409A of the Internal Revenue Code. Therefore, the following changes shall be made:

Section 1.4 of the Agreement shall be deleted in its entirety and replaced by the following:

 

1.4

Change of Control ” means the occurrence of a “Change in Ownership,” a “Change in Effective Control” or a “Change in Asset Control” as each is defined below. The Change of Control must relate to the Company or a corporation that is a majority shareholder of Company. A majority shareholder is a shareholder owning more than 50% of the total fair market value and total voting power of the corporation. Code Section 318(a) applies to determine stock ownership.

(I) Change in Ownership . A Change in Ownership occurs on the date that any one person, or more than one person acting as a group, acquires ownership of stock of the Company 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 the Company.

(II) Change in Effective Control . A Change in Effective Control of the Company occurs on the date that either:

(A) 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 Company possessing 30 percent or more of the total voting power of the stock of the Company; or

(B) A majority of members of the Board of Directors of the Company’s ultimate parent corporation, or of Company if there is no parent corporation, is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.

A Change in Effective Control also may occur in any transaction in which either of the two corporations involved in the transaction has a Change in Effective Control or a Change in Asset Control.

(III) Change in Asset Control . A Change in Asset Control of the Company occurs on the date that 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) assets from the Company or a parent corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

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(A) There is no Change of Control under this subsection (III) when there is a transfer to an entity that is controlled by the shareholders of the corporation immediately after the transfer, as provided in this subsection (III). A transfer of assets by a corporation is not treated as a Change in Asset Control if the assets are transferred to:

(1) A shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock;

(2) An entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the corporation;

(3) A person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the corporation; or

(4) A person, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in subsection (A)(3) above.

(B) For purposes of this subsection (III) and except as otherwise provided, a person’s status is determined immediately after the transfer of the assets.

Section 1.6 of the Agreement shall be deleted in its entirety and replaced by the following:

 

1.6 

Disability ” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Company. 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 or directors of the Company provided that the definition of “disability” applied under such disability insurance program complies with the requirements of the preceding sentence. 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.

The following Section 1.17a shall be added to the Agreement immediately following Section 1.17:

 

1.17a 

Specified Employee ” means a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Company if any stock of the Company is publicly traded on an established securities market or otherwise, determined in accordance with Treasury Regulation Section 1.409A-1(i).

Section 1.19 of the Agreement shall be deleted in its entirety and replaced by the following:

 

1.19 

Termination of Employment ” means date the Company and the Executive reasonably anticipate that (i) the Executive will not perform any further services for the Company or any other entity considered a single employer with the Company under Section 414(b) or (c) of the Code, but substituting “at least 50%” for “at least 80%” (the “Employer Group”), or (ii) the level of bona fide services performed after that date (as an employee or independent contractor, except that service as a member of the board of directors of an Employer Group entity is not counted unless benefits under this Plan are aggregated with benefits under any other Employer Group plan or agreement in which the Executive also participates as a director) will permanently decrease to less than 20% of the average level of bona fide services performed over the previous 36 months (or if shorter over the duration of service). The Executive will not be treated as having a Termination of Employment while on military leave, sick leave or other bona fide leave of absence if the leave does not exceed six months or, if longer, the period during which the Executive has a reemployment

 

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right with the Company by statute or contract. If a bona fide leave of absence extends beyond six months, a Termination of Employment will be deemed to occur on the first day after the end of such six month period, or on the day after the Executive’s statutory or contractual reemployment right lapses, if later. Notwithstanding the


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