Exhibit 10.28
HERITAGE BANKSHARES,
INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT
AGREEMENT
WITH MICHAEL S.
IVES
THIS SUPPLEMENTAL EXECUTIVE
RETIREMENT AGREEMENT, (the “Agreement”) by and between
HERITAGE BANKSHARES, INC. (together with its affiliates and
successors, the “Corporation”) and MICHAEL S. IVES
(“Executive”), is made effective this 23
rd day of September, 2009.
INTRODUCTION
The Corporation has entered into
this Agreement with Executive for the purpose of supplementing the
retirement benefits payable to Executive and in recognition of the
contribution that Executive has made to the Corporation since his
employment in 2005.
This Agreement is intended to be
unfunded and maintained primarily for the purpose of providing
deferred compensation for the Executive who is included within the
definition of a “select group of management or highly
compensated employees” (as such phrase is used in ERISA.)
This Agreement must be administered and construed in a manner that
is consistent with that intent.
This Agreement is intended to
satisfy the requirements of Code section 409A and Treasury
Regulations issued thereunder. Each provision and term of this
Agreement should be interpreted, and each action taken hereunder
should be carried out, in accordance with that intent.
This Agreement is also intended to
comply with the compensation restrictions under the provisions of
the Emergency Economic Stabilization Act of 2008
(“EESA”) as amended by the American Recovery and
Reinvestment Act of 2009 (“AARA”) applicable to
financial institutions under the Troubled Asset Relief Program
(“TARP”).
ARTICLE I
DEFINITIONS
The following phrases or terms have
the indicated meanings:
Beneficiary means the person or
persons designated in writing by the Executive in a form attached
hereto as Schedule A. If the Executive fails to designate a
beneficiary in the manner prescribed by the Board, Beneficiary
means the Executive’s estate. The Executive may amend or
change his Beneficiary designation by submitting a new Schedule
A
Benefit Amount means Twenty-Five
Thousand Dollars ($25,000.00), which amount shall be and is fully
accrued as of the Effective Date.
1
Board means the Board of Directors
of the Corporation.
A Change in Control occurs on the
first to occur of (i) 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% of the total fair market value or
total voting power of the stock of the Corporation; (ii) the
date that any one person or 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 30% or more of the total voting power of the
stock of the Corporation; (iii) a majority of the members of
the Board’s being replaced during any 12 month period by
directors whose appointment or election is not endorsed by a
majority of the members of the Board before the date of the
appointment or election; or (iv) the date that any one person
or group acquires assets (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such
person or group) from the Corporation that have a total gross fair
market value equal to or more than 40% of the total gross fair
market value of all the assets of the Corporation immediately
before such acquisition. This definition of Change in Control shall
be interpreted in a manner that is consistent with Treasury
Regulation section 1.409A-3(i)(5).
Code means the Internal Revenue Code
of 1986, as amended.
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1.06
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Disability or Disabled
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Disability or Disabled means the
Executive is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months.
The Effective Date of this Agreement
is September 23, 2009.
ERISA means the Employee Retirement
Income Security Act of 1974, as amended.
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1.09
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Separation from Service
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Separation from Service means the
Executive’s separation from service with the Corporation,
within the meaning of Treasury Regulations under Code section 409A,
for any reason.
2
Specified Employee means the
Executive if, as of December 31 of any calendar year, he
satisfies the requirement of Code section 416(i)(1)(A)(i), (ii), or
(iii) (applied in accordance with Treasury Regulations
thereunder and disregarding Code section 416(i)(5)). If the
Executive meets the criteria set forth in the preceding sentence as
of a given December 31, he will be considered a Specified
Employee for purposes of this Agreement for the 12-month period
commencing on the next following April 1.
ARTICLE II
BENEFITS
(a) If the Executive is continuously
employed by the Corporation from the Effective Date through his
attainment of age 67, his Benefit Amount shall be paid each year
for ten years, in equal monthly installments (i.e., $2,083.33)
beginning on the first day of the month following his Separation
from Service with the Corporation after attaining age 67, except as
provided in Subsections (b), (c), and (d) below.
Notwithstanding the foregoing, if the Executive is a Specified
Employee on the date of such Separation from Service, the payments
described in the preceding sentence shall begin on the first day of
the month immediately following the six-month anniversary of the
Executive’s Separation from Service. Installments that would
have been paid during such six-month period had Executive not been
a Specified Employee will be included in the first
payment.
(b) If Executive’s employment
terminates due to death, or Executive is determined by the
Board
