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Exhibit 10.1
AMENDED AND RESTATED COMMUNITY NATIONAL BANK SUPPLEMENTAL EMPLOYEE
RETIREMENT PLAN THIS AGREEMENT is adopted as of the 9th day
of December, 2008, by COMMUNITY NATIONAL BANK (hereinafter called
the "Employer").
RECITALS A. Effective January 1, 1999, the Employer established the
Community National Bank Supplemental Employee Retirement Plan (the
“Plan”), to provide additional retirement benefits for
a select group of management and highly compensated employees;
and
B. The Employer wishes to amend the Plan to ensure continued
compliance with all applicable requirements of the Internal Revenue
Code of 1986, as amended (the “Code”), including (1)
Section 409A thereof and (2) sections 162(m) and 280G thereof, as
amended by the Emergency Economic Stabilization Act of 2008
(“EESA”), if and to the extent that the Employer
becomes subject to the provisions of the EESA; and
C. The Employer intends that the Plan shall at all times continue
to be administered and interpreted in such a manner as to
constitute an unfunded deferred compensation plan for a select
group of management or highly compensated employees, so as to
qualify for all available exemptions from the provisions of
ERISA.
NOW, THEREFORE, in consideration of the premises, the Employer
hereby amends and restates the Plan effective (except where
otherwise specifically provided herein) as of January 1, 2005.
ARTICLE ONE DEFINITIONS
The following words used in this Agreement shall have the following
meanings unless a different meaning is plainly implied by the
context:
1.1 "Account" means the account maintained for a
Participant under the Plan.
1.2 "Average Bonus" means the average annual bonus
paid by the Employer to a Participant for the 5 calendar years,
during the 10 calendar year period immediately preceding such
Participant's termination of employment, for which such bonus was
highest.
1.3 "Beneficiary" means the person or persons
designated in writing by the Participant to receive benefits which
are payable upon or after such Participant's death. If no such
person is designated, or all such persons die before all such
benefits have been paid, the Beneficiary shall be the Participant's
Surviving Spouse, provided that such spouse is not living apart
from the Participant pursuant to a written separation agreement or
decree of separate maintenance at the time of the Participant's
death. If no such spouse survives, or if the Participant and his or
her spouse are so living apart at the time of his death, the
Beneficiary shall be the Participant's descendants per stirpes,
including descendants by adoption or, if no such descendant
survives, the Participant's estate. Any designated Beneficiary may
renounce any part or all of the benefits otherwise payable to him
pursuant to such designation. If the Participant's beneficiary
designation specifically provides for the possibility of a
renunciation by the Beneficiary, benefits (or the portion thereof
which is renounced) shall be paid to the contingent Beneficiary
named by the Participant. If the said designation does not
specifically provide for such a renunciation, then the benefits (or
the portion thereof which has been renounced) shall be distributed
as though the renouncing Beneficiary had died immediately before
the Participant. A Participant's beneficiary designation shall be
given effect only if, and to the extent that, to do so would not
(i) contravene any law, regulation or court order by which the Plan
is bound or (ii) render the Plan or Employer liable to any other
person. The beneficiary designation must also, in order to be
effective, be delivered to the Plan Administrator prior to the
Participant's death.
1.4 "Code" means the Internal Revenue Code of
1986, as amended from time to time. References to any section of
the Code shall include any successor provision thereto.
1.5 "Declared Rate" means the rate of interest, or
the investment earnings, to be credited to a Participant's Account
pursuant to Section 4.2. The Declared Rate for a Plan Year shall be
determined by resolution of the Board of Directors of the Employer,
within 45 days after the last day of such Plan Year. Unless and
until such rate is so determined, the Declared Rate shall be equal
to the Declared Rate for the immediately preceding Plan Year. If
and to the extent that the Employer has set aside funds, in a
separate trust, to provide for the payment of benefits hereunder,
then the Declared Rate with respect to such funds shall be equal to
the net rate of return (including realized and unrealized
appreciation or depreciation) for the year in question, as
determined by the Plan Administrator.
1.6 "Disability" means a physical and/or mental
incapacity of such a nature that it prevents an individual from
engaging in or performing the principal duties of his or her
customary employment or occupation on a continuing or sustained
basis.
1.6A “EESA” means the Emergency Economic
Stabilization Act of 2008 (“EESA”), as amended from
time to time.
1.7 "Eligible Employee" means any Employee of the
Employer who is selected to participate herein in accordance with
the provisions of Section 2.1 hereof.
1.8 "Employee" means any director, officer or
other management or highly compensated employee of the
Employer.
1.9 "Employer" means Community National Bank.
1.10 "Employment Agreement" means a written
employment agreement between the Employer and the Participant, as
amended from time to time.
1.11 "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.12 "Participant" means an Eligible Employee who
is participating in the Plan.
1.13 "Plan" means the target benefit pension plan
set forth in this document, as amended from time to time.
1.14 "Plan Administrator" means the Employer.
1.15 "Plan Year" means the calendar year.
1.15A “Regulations” means any and all
regulations and other guidance issued by the Internal Revenue
Service and/or the U.S. Treasury Department that describes the
scope, requirements and effective date of Section 162(m), 280G or
409A of the Code.
1.16 "Replacement Percentage" means seventy five
percent (75%) of the Participant's Average Bonus.
1.16A “Restricted Deferral” means any
deferral of compensation (including investment earnings or losses
thereon) that is subject to the requirements of section 162(m),
280G or 409A of the Code, as interpreted by the Regulations.
1.17 "Retirement" means an Eligible Employee's
retirement at age 65 or such other age as is mutually agreed, in
writing, between the Employer and the Eligible Employee. For
purposes of determining whether a Participant is entitled to a
distribution of benefits attributable to a Restricted Deferral,
"Retirement" means an Eligible Employee's termination of employment
upon retirement at age 65 or such other age as is mutually agreed,
in writing, between the Employer and the Eligible Employee.
1.18 "Retirement Date" means a Participant's 65th
birthday.
1.18A “Section” means the cited section of
the Code, as amended from time, including any successor
thereto.
1.18B “Specified Employee” means a specified
employee described in Section 409A(a)(2)(B)(i) of the Code.
1.19 "Surviving Spouse" means a person who (a)
survives the Participant and (b) on the date of the Participant's
death, is legally married to the Participant in accordance with the
laws of the State in which they are domiciled.
1.19A “Unforeseeable Emergency” shall have
the meaning ascribed to such term in subsection (a)(2)(B)(ii) of
Code Section 409A.
1.20 "Years of Service" means the Participant's
Years of Service as defined in the Employer's 401(k) Plan.
ARTICLE TWO ELIGIBILITY REQUIREMENTS
2.1 Eligibility
(a) An Employee is eligible to become a
Participant in the Plan if (i) such Employee is designated as a
Participant by the Plan Administrator in writing and (ii) such
Employee is an executive officer of the Employer. As a condition of
participation, the Plan Administrator may require the Employee to
execute a participation agreement in (or similar to) the form
annexed hereto as Exhibit C.
(b) Once an Employee becomes a Participant, he
shall remain a Participant until termination of employment with the
Employer, and thereafter until all benefits to which he (or his
Beneficiary) is entitled under the Plan have been
paid.
ARTICLE THREE PLAN ADMINISTRATION
3.1 Responsibility for Administration of the
Plan
(a) The Plan Administrator shall be responsible
for the management, operation and administration of the Plan. The
Plan Administrator may employ others to render advice with regard
to its responsibilities under this Plan. It may also allocate its
responsibilities to others and may exercise any other powers
necessary for the discharge of its duties.
(b) The primary responsibility of the Plan
Administrator is to administer the Plan for the benefit of the
Participants and their Beneficiaries, subject to the specific terms
of the Plan. The Plan Administrator shall administer the Plan in
accordance with its terms and shall have the power to determine all
questions arising in connection with the administration,
interpretation and application of the Plan. Any such determination
shall be conclusive and binding upon all persons. The Plan
Administrator shall have all powers and discretion necessary or
appropriate to accomplish its duties under the Plan. At all times,
and notwithstanding any other provision of this Plan, the Plan
shall be interpreted and administered in such a manner as to comply
fully with all applicable requirements of Sections 162(m), 280G and
409A.
3.2 Indemnity by Employer
To the extent not insured against by any insurance company pursuant
to the provisions of any applicable insurance policy, the Employer
shall indemnify and hold harmless the Plan Administrator and its
agents and representatives from any and all claims, demands, suits
or proceedings in connection with the Plan which may be brought by
any Employee, Participant, former Participant, Beneficiary or legal
representative, or by any other person, corporation, entity,
government or agency thereof, provided, however, that such
indemnification shall not apply to any liability arising out of any
such person's acts of willful misconduct in connection with the
Plan.
3.3 Plan Administrator
The Plan Administrator shall be the "administrator" (as defined in
Section 3(16)(A) of ERISA) of the Plan, and shall be responsible
for the performance of (a) all reporting and disclosure obligations
under ERISA, and (b) all other obligations required or permitted to
be performed by the Plan Administrator under ERISA. The Plan
Administrator may appoint one or more persons to discharge the
duties of the Plan Administrator.
3.4 Information from Employer
The Employer shall supply full and timely information to the Plan
Administrator on all matters as may be required properly to
administer the Plan. The Plan Administrator may rely upon the
correctness of all such information supplied by the Employer and
shall have no duty or responsibility to verify such information.
The Plan Administrator shall also be entitled to rely conclusively
upon all tables, valuations, certifications, opinions and reports
furnished by any actuary, accountant, controller, counsel or other
person employed or engaged by the Employer or Plan Administrator
with respect to the Plan.
ARTICLE FOUR CREDITS TO THE PARTICIPANT'S ACCOUNT
4.1 Employer Credits
(a) The Employer shall credit to a Participant's
Account, for the first Plan Year for which he or she is a
Participant, a dollar amount equal to the level annual deposit
required to provide for such Participant an annuity for life,
commencing at his or her Retirement Date and payable monthly, in an
amount equal to the target benefit computed under paragraph 1 of
Exhibit A hereto, and using the actuarial assumptions specified in
paragraph 2 of Exhibit A hereto. For each succeeding Plan Year for
which the Participant is entitled to a credit, the Employer shall
credit to the Participant's Account a dollar amount equal to the
level annual deposit which, if made each year from such succeeding
year through and until the last Plan Year beginning before the
Participant's Retirement Date, will (when added to the projected
future value (at Retirement Date) of the Participant's Account, as
of the first day of such year, and using the actuarial assumptions
specified in paragraph 2 of Exhibit A hereto) provide the annuity
described in the preceding sentence. The credit shall be made as of
the last day of the Plan Year in question.
(b) The following persons shall be entitled to
receive an Employer credit, pursuant to this Section 4.1:
(i) Any Participant who is still
an Eligible Employee on the last day of the Plan Year in
question.
(ii) Any Participant who terminated
employment during the Plan Year by reason of Retirement.
(iii) Any Participant who terminated
employment during the Plan Year by reason of Disability.
4.2 Interest Credits
(a) Until a Participant's Account balance becomes
payable in accordance with Article Five, as of the last day of each
Plan Year, an interest credit, equal to the Declared Rate
multiplied by the amount standing to the credit of the
Participant's Account as of the end of such year, but disregarding
any Employer credit for such year pursuant to Section 4.1(a), shall
be made to the Participant's Account.
(b) In addition, if the Account balance (or any
portion thereof) becomes payable on a date other than the last day
of a Plan Year, a prorated credit, based upon the Declared Rate for
such year, the amount so paid and the number of days in the Plan
Year preceding such date, shall be made to the Participant's
Account. If the Declared Rate has not yet been determined for such
year, then interest shall be credited at the rate of 7.5% per
annum.
ARTICLE FIVE PAYMENT OF BENEFITS
5.1 Payment of Benefits on Retirement
(a) All amounts credited to the Participant's
Account shall become payable to such Participant, as of the date of
such Participant's Retirement.
(b) The amount credited to the Participant's
Account shall be paid to the Participant either (i) in a single sum
or (ii) in substantially equal, semi-annual installment payments
over the Participant's life expectancy, as elected in writing by
the Participant within 30 days after the date on which he or she
begins to participate hereunder. If no such election is delivered
to the Plan Administrator by such date, then the benefit shall be
paid in a single sum.
Except as otherwise permitted by this Section and subsection (a)(4)
of Code Section 409A, and in any transitional relief accorded by
the Internal Revenue Service under Code Section 409A, a
Participant’s election as to the time and form of payment
shall be irrevocable and any change must comply with this
Section. A Participant may change the time and/or form
of payment specified in a previous election by executing and
delivering to the Employer a new election but only if (i) except
for distribution due to the Participant’s death, Disability
or an Unforeseeable Emergency, the distribution of the
Participant’s deferrals will be further deferred by a period
of at least five (5) years from the time the deferrals would have
otherwise been distributed to the Participant; and (ii) the change
in the election is made at least twelve (12) months prior to the
date of the first scheduled payment under the Plan. Any
change in an election shall not take effect until 12 months after
the date such change election is made.
Life expectancy shall be determined (as of the date on which
payments begin) from the unisex tables contained in Treasury
regulation 1.72-9, as amended from time to time, and shall be
rounded to the nearest whole number of years. In addition to such
installment payments of principal, the Employer will pay, with the
second and each subsequent installment, interest on the unpaid
balance of principal, in accordance with Section 4.2(b) hereof, for
the 6 month period since the due date of the immediately preceding
installment payment.
For purposes of determining whether a Participant is entitled to a
distribution of benefits attributable to a Restricted Deferral, the
Plan shall comply with all applicable distribution requirements
under Section 162(m), 280G or 409A(a)(2) of the Code and the
Regulations including, in the case of a Specified Employee, the
provisions of Section 409A(a)(2)(B)(i).
5.2 Payment of Benefits on Disability
If the Plan Administrator determines, on the basis of medical
evidence provided by or on behalf of a Participant, that such
Participant has suffered a Disa
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