Exhibit 10.1
PREMIERWEST
BANK
SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN AGREEMENT
(SERP)
THIS SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN AGREEMENT (this “ Agreement ”)
is effective as of April 1, 2009, by and between PremierWest
Bancorp, an Oregon corporation (“ Bancorp ”),
PremierWest Bank, an Oregon-chartered, FDIC-insured bank with its
main office in Medford, Oregon (the “ Bank, ”
and collectively with Bancorp, “ PremierWest
”), and
James M. Ford (“ Executive ”).
WHEREAS, the Executive has
contributed substantially to the success of the Bank and its parent
corporation, Bancorp, and the Bank desires that the Executive
continue in its employ;
WHEREAS, to encourage the
Executive to remain an employee of the Bank, the Bank is willing to
provide supplemental retirement benefits to the Executive, payable
out of the Bank’s general assets;
WHEREAS, none of the conditions or
events included in the definition of the term “golden
parachute payment” contained in section 18(k)(4)(A)(ii) of
the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and
in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12
CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Bank,
is contemplated insofar as the Bank is concerned;
WHEREAS, this Agreement
constitutes a plan of deferred compensation;
WHEREAS, the Executive is being
offer this plan of deferred compensation for the first time
effective April 1, 2009, and has not previously been eligible to
participate under this Agreement;
WHEREAS, this Agreement is
intended to comply with § 409A of the Internal Revenue Code of
1986, as amended (the “Code”) and any ambiguity
hereunder shall be interpreted in such a way as to comply, to the
extent necessary, with Code § 409A and the regulations
thereunder; and
NOW THEREFORE, in consideration of
the foregoing premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement,
the following terms shall have the meanings specified:
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1.1
“ Adjusted Base Salary ” means the highest
amount of Base Salary paid to the Executive during employment with
the Bank.
1.2
“ Base Salary ” means the annual base
compensation, not including any bonuses or benefits, paid to the
Executive.
1.3
“ Cause ” for an Executive’s termination
for Cause will exist upon the occurrence of one or more of the
following events:
(a)
Fraudulent Conduct. An intentional act of fraud,
embezzlement, or theft by Executive in the course of his employment
with PremierWest Bancorp or the Bank. No act or failure to act on
Executive’s part shall be deemed to have been intentional if
it was due primarily to an error in judgment or negligence. An act
or failure to act on Executive’s part shall be considered
intentional if it is not in good faith and it is without a
reasonable belief that the action or failure to act is in
PremierWest’s best interests,
(b)
Material Breach of Employment Agreement. A material breach
by Executive of his Employment Agreement if such breach is not
remedied or is not being remedied to the Board or the Bank
Board’s satisfaction within 30 days after written notice,
including a detailed description of the breach, has been delivered
by the respective board to Executive,
(c)
Gross Negligence/Insubordiation. Gross negligence or
insubordination by Executive in the performance of his duties as an
officer of PremierWest Bankcorp or the Bank if such gross
negligence or insubordination is not remedied or is not being
remedied to the Board or the Bank Board’s satisfaction within
30 days after written notice, including a detailed description of
the gross negligence or insubordination, has been delievered by the
respective board to Executive,
(d)
Breach of Fiduciary Duties . A breach by Executive of his
fiduciary duties to PremierWest Bancorp and its stockholders or
misconduct involving dishonesty, in either case whether in his
capacity as an officer of PremierWest Bancorp or the Bank,
(e)
Criminal Conviction . Conviction of Executive for a felony
or conviction of a misdemeanor involving moral turpitude,
(f)
Violation of Law . Intentional violation of any law or
significant policy of PremierWest Bancorp or the Bank committed in
connection with Executive’s employment, which has a material
adverse effect on PremierWest Bancorp or the Bank, or
(g)
FDIC Removal Order . Removal of Executive from office or
permanent prohibition of Executive from participating in the
conduct of PremierWest Bank’s affairs by an order issued
under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance
Act, 12 U.S.C. 1818(e)(4) or (g)(1).
1.4
“ Change in Control ” means if any one of the
following events occurs:
(a)
Merger . Bancorp merges into or consolidates with another
corporation, or merges another corporation into Bancorp, and as a
result less than 50% of the combined voting
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power of the resulting corporation
immediately after the merger or consolidation is held by Persons
who were the holders of Bancorp’s voting securities
immediately before the merger or consolidation.
(b)
Acquisition of Significant Share Ownership . (1) A report on
Schedule 13D or another form or schedule (other than Schedule 13G)
is filed or is required to be filed under sections 13(d) or 14(d)
of the Securities Exchange Act of 1934, if the schedule discloses
that the filing person or persons acting in concert has or have
become the beneficial owner of 30% or more of a class of
Bancorp’s voting securities, but this paragraph (b) shall not
apply to beneficial ownership of voting shares of Bancorp held in a
fiduciary capacity by an entity in which Bancorp directly or
indirectly beneficially owns 50% or more of the outstanding voting
securities;
(c)
Change in Board Composition . During any period of two
consecutive years, individuals who constitute Bancorp’s board
of directors at the beginning of the two-year period cease for any
reason to constitute at least a majority thereof; provided,
however , that for purposes of this paragraph (c) each director
who is first elected by the board (or first nominated by the board
for election by stockholders) by a vote of at least two-thirds
(2/3) of the directors who were directors at the beginning of the
period shall be deemed to have been a director at the beginning of
the two-year period; or
(d)
Sale of Assets . Bancorp sells to a third party all or
substantially all of Bancorp’s assets. For this purpose, sale
of all or substantially all of Bancorp’s assets includes sale
of the shares or substantially all of the assets of the Bank.
1.5
“ 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 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 12 months, receiving income
replacement benefits for a period of not less than 3 months under
an accident and health plan covering employees of the Bank The
Executive must submit proof to the Bank of the carrier’s or
Social Security Administration’s determination upon the
request of the Bank.
1.6
“ Disability Retirement ” means termination of
the Executive’s employment due to Disability.
1.7
“ Early Retirement ” means the Executive’s
Termination of Employment with the Bank before Normal Retirement
Age for reasons other than death, Disability, Termination under
Article 5 of this Agreement, termination without Cause or
termination with Good Reason, and any termination other than
termination for Cause more than six (6) months after a Change in
Control.
1.8
“ Early Retirement Date ” means the month, day
and year in which Early Retirement occurs.
1.9 “
Effective Date ” means the date indicated in the first
paragraph hereof.
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1.10
“ Good Reason ” for Executive’s
Termination of Employment by resignation will exist upon the
occurrence, without Executive’s consent, of one or more of
the following events, if Executive has informed PremierWest in
writing of the circumstances described below in this Section that
could give rise to Termination of Employment for Good Reason and
PremierWest has not removed the circumstances within 30 days of the
written notice:
(a) Reduction in Base Salary. A
reduction of Executive’s Base Salary,
(b) Reduced Participation in
Bonus, Incentive, Compensation, and Other Plans . A reduction
of Executive’s bonus, incentive, and other compensation award
opportunities under PremierWest Bancorp’s benefit plans and
the Bank’s benefit plans, unless in the case of either, a
company-wide reduction of all officers’ award opportunities
occurs simultaneously,
(c)
Participation in Benefit Plans . Discontinuance of
Executive’s participation in any officer or employee benefit
plan maintained by PremierWest Bancorp or by the Bank, unless the
plan is discontinued by reason of law or loss of tax deductibility
to PremierWest with respect to contributions to the plan, or is
discontinued as a matter of PremierWest Bancorp policy or
PremierWest Bank policy applied equally to all participants in the
plan,
(d)
A Reduction in Responsibilities or Status (other than such
changes, made after the Executive has announced his intention to
retire or within twelve months of his Normal Retirement Date, as
are consistent with his anticipated retirement) based on one of the
following:
(1)
Assignment to Executive of duties or responsibilities that are
materially inconsistent with Executive’s position as stated
in Executive’s Employment Agreement or that represent a
material reduction of his authority,
(2)
Any other action by PremierWest that results in a material
reduction or material adverse change in Executive’s position,
authority, duties or responsibilities,
(3) Failure
to appoint or reappoint Executive to the position stated in his
Employment Agreement, or
(4)
Following a Change in Control, failure to retain Executive in an
executive officer position with authority, duties or
responsibilities consistent with that of an executive officer.
(Subsections (d)(1), (2) and (3) do not apply following a Change
in Control),
(e)
Failure to Obtain Assumption Agreement . The failure of a
successor or assign of the Bank to assume and agree to perform this
Agreement and the Executive’s Employment Agreement, if
assignment and assumption does not occur automatically under
operation of law,
(f)
Termination without Compliance with this Agreement .
Termination by PremierWest of Executive’s employment without
the notice required under Executive’s
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Employment Agreement,
(g)
Material Breach . A material breach of Executive’s
Employment Agreement by PremierWest that is not corrected within a
reasonable time, or
(h)
Relocation of Executive . Requiring Executive to change his
principal work location, to any location that is more than 15 miles
from the location of PremierWest Bancorp’s principal
executive offices on the date of this Agreement.
1.11
“Normal Retirement Date ” means the
Executive’s 65 th birthday.
1.12
“ Person ” means an individual, corporation,
partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or other
entity.
1.13
“ Plan Year ” means a twelve-month period
commencing on January 1, and ending on the last day of December of
each year. The initial Plan Year shall commence on the Effective
Date of this Agreement.
1.14
“ Termination of Employment ” with the Bank
means a separation from service under Code § 409A and the
regulations thereunder, as such regulations may change from time to
time, or any successor provision of the Code and regulations.
ARTICLE 2
LIFETIME BENEFITS
2.1
Normal Retirement Benefit . Upon the Executive’s
Termination of Employment on or after the Normal Retirement Date
for reasons other than death or Disability, the Bank shall pay to
the Executive the benefit described in this Section 2.1 instead of
any other benefit under this Agreement.
2.1.1
Amount of Benefit . The annual benefit under this Section
2.1 shall be calculated as a percentage of Base Salary. The
applicable percentage is the percentage corresponding to the Plan
Year in which the Normal Retirement Date occurs as shown on
Schedule A. In its sole discretion, the Bank’s board of
directors may increase the applicable percentage and such increase
shall be reflected on a revised Schedule A.
2.1.2
Payment of Benefit . The payment of benefits under this
Section 2.1 shall begin on the first day of the seventh month after
the Executive’s Termination of Employment. The Bank shall pay
the annual benefit to the Executive in 12 equal monthly
installments on the first day of each month for a period of 15
years (with 6 monthly payments accumulated and paid on the
commencement date and one payment made each month thereafter for
the next 14 years and 6 months). The monthly payments made
hereunder shall be considered a series of separate payments for
purposes of Code § 409A.
2.2
Early Retirement Benefit . Upon Early Retirement the Bank
shall pay to the Executive the benefit described in this Section
2.2 instead of any other benefit under this Agreement.
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2.2.1
Amount of Benefit . The annual benefit under this Section
2.2 is calculated as a percentage of Base Salary. The applicable
percentage is the percentage corresponding to the Plan Year in
which Early Retirement occurs as shown on Schedule A. In its sole
discretion, the Bank’s board of directors may increase the
applicable percentage and such increase shall be reflected on a
revised Schedule A.
2.2.2
Payment of Benefit. The payment of the benefits under this
Section shall begin on the later of: (i) six months after
Termination of Employment or (ii) Normal Retirement Date. The Bank
shall pay the annual benefit to the Executive in 12 equal monthly
installments on the first day of each month for a period of 15
years and, if clause 2.2.2(i) applies, with six monthly payments
accumulated and paid on the commencement date and one payment made
each month thereafter for 14 years and six months. The monthly
payments made hereunder shall be considered a series of separate
payments for purposes of Code § 409A.”
2.3
Premature Termination Benefit . If the Executive’s
employment with the Bank is terminated by the Bank without Cause or
by the Executive for Good Reason, the Bank shall pay to the
Executive the benefit described in this Section 2.3 instead of any
other benefit under this Agreement.
2.3.1
Amount of Benefit . The annual benefit under this Section
2.3 is calculated as a percentage of the Adjusted Base Salary. The
applicable percentage is the percentage corresponding to the Plan
Year in which the Normal Retirement Date would occur, as shown on
Schedule A corresponding to the Plan Year three (3) years after the
Plan Year in which the Termination of Employment occurs. In its
sole discretion, the Bank’s Board of Directors may increase
the applicable percentage and such increase shall be reflected on a
revised Schedule A.
2.3.2
Payment of Benefit. The payment of benefits under this
Section shall begin on the first day of the seventh month aft
