CHITTENDEN CORPORATION CHIEF EXECUTIVE OFFICER SUPPLEMENTAL EXECUTIVE RETIREMENT PLANEmployee Benefits Plan Agreement |
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Exhibit 10.4
CHITTENDEN CORPORATION CHIEF EXECUTIVE OFFICER
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AS AMENDED AND RESTATED JANUARY 1, 2005
I. Purpose
Chittenden Corporation (“Chittenden”) finds it desirable to provide a non-qualified supplemental retirement plan for its Chief Executive Officer. The plan is intended to: (1) offset the effect of certain regulatory restrictions on contributions to qualified pension and savings plans, and (2) recognize that the Chief Executive Officer may have an insufficient working career at Chittenden to realize a pension benefit that is an acceptable portion of the Chief Executive Officer’s working salary and benefits. To compensate for these factors and to reward a Chief Executive Officer’s performance, Chittenden will provide a Supplemental Pension for the Chief Executive Officer under the terms and conditions contained herein.
The Plan is hereby amended and restated to comply with Internal Revenue Code Section 409A, added by the American Jobs Creation Act of 2004, effective January 1, 2005. As provided herein, Plan provisions in effect as of December 31, 2004, shall continue to apply with respect to the Chief Executive Officer’s Accrued Benefit attributable to allocations prior to January 1, 2005. Accordingly, such Accrued Benefits will not be subject to the requirements of Code Section 409A. Thus, any changes hereunder which have been made in order to comply with Code Section 409A shall apply only to deferred compensation earned on and after January 1, 2005, unless explicitly stated otherwise. This is an amended and restated version of the plan as it was originally effective January 1, 1993 and previously amended and restated August 19, 1998 and June 19, 2002
II. Definitions
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(a) |
Accrued Benefit shall mean all sums allocated pursuant to Paragraphs IV and VIII including interest credited thereon pursuant to Paragraph V. |
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(b) |
Board shall mean the Board of Directors of the Chittenden Corporation. |
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(c) |
Chief Executive Officer shall mean Paul Perrault. |
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(d) |
Code shall mean the Internal Revenue Code of 1986, as amended from time to time. |
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(e) |
Disability shall mean a condition that causes the Chief Executive Officer to become (a) 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 at least 12 months, or (b) entitled, by reason of such medical or physical impairment, to income replacement benefits for a period of at least 3 months under the long term disability plan sponsored by Chittenden. |
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(f) |
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. |
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(g) |
Gross Salary shall mean the total of all salary, benefits, and bonuses paid to the Chief Executive Officer by the Corporation or its subsidiaries and reported in box 1 (wages, tips, other compensation) of form W-2 together with that portion of compensation not reported in box 1 of the form W-2 (i.e., Flexible Medical/Dental premiums, Health Care/Dependent Care Flexible spending accounts, Qualified Transportation Fringe contributions, employee 401(k) pre-tax contributions, employee deferrals under the Supplemental Executive Savings Plan and deferrals under the Deferred Compensation Plan) less gains on sale of stock options or receipt of restricted shares which must be reported in this box for purposes of tax reporting. |
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(h) |
Plan shall mean this Chief Executive Officer Supplemental Executive Retirement Plan as set forth herein and as may be amended from time to time. |
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(i) |
ROE shall mean return on average common shareholders’ equity calculated on an annual basis as of December 31st. |
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(j) |
Unforeseeable Emergency shall mean a severe financial hardship of the Chief Executive Officer or his named beneficiary resulting from illness or accident of the Chief Executive Officer or beneficiary, the Chief Executive Officer’s or beneficiary’s spouse, or the Chief Executive Officer’s or beneficiary’s dependent (as defined in Code Section 152(a)); loss of the Chief Executive Officer’s or beneficiary’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Chief Executive Officer or beneficiary, as provided under Code Section 409A and associated regulations. |
III. Plan Construction
This is a defined contribution, non-qualified retirement plan. This means that Chittenden will allocate a specific amount to a notional account calculated in accordance with Paragraph IV below but the Plan will not pay a specific benefit. The notional account will earn interest in accordance with Paragraph V. Further, this Plan is intended to be a “top hat plan” under ERISA which is unfunded and is maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, and shall be interpreted and administered to the extent possible in a manner consistent with that intent. Benefits under the Plan are not protected by the Pension Benefit Guaranty Corporation. Any assets funding the Plan are subject to the claims of the general creditors of Chittenden. Benefits paid under this Plan cannot be rolled over into any tax-qualified retirement plan.
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IV. Allocations
Allocations to the Plan shall be made on an annual basis each January. The amount of the annual allocation shall be a certain percentage of Gross Salary based on the ROE of Chittenden as of December 31st of each year determined in accordance with the following schedule:
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ROE % |
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% of Gross Salary |
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10 |
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20 |
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11 |
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23 |
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12 |
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26 |
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13 |
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29 |
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14 |
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32 |
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15 |
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35 |
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16 |
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38 |
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17 |
