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Exhibit 10.1 FINAL COPY FIRST PRIORITY
FINANCIAL CORP.
DEFERRED COMPENSATION PLAN
First Priority Financial Corp. (the
"Company"), hereby adopts the First Priority Financial Corp.
Deferred Compensation Plan (the "Plan"), for the benefit of a
select group of executives of the Company. The Plan is an unfunded
arrangement for the benefit of executives. The Plan is effective as
of January 1, 2009. ARTICLE 1.
DEFINITIONS 1.01 Account . The
bookkeeping accounts established for each Participant as provided
in Section 5.01 hereof. As provided in Section 5.01,
separate bookkeeping accounts shall be established for the
Participant’s Deferrals, the "Deferral Account," and the
Company Contributions made on behalf of a Participant, the "Company
Contributions Account." 1.02
Administrator . Such person or entity as determined by the
Compensation Committee of the Board, or in the absence of such
determination, the Company. 1.03
Affiliate . A business entity that is either a wholly owned
subsidiary of the Company or considered to be under common control
with the Company pursuant to the provisions of Code
Sections 414(b), (c), (m), or (o).
1.04 Board . The Board of
Directors of the Company. 1.05
Cause . An Executive’s termination of employment with
the Company shall be considered to occur for Cause upon any of the
following events:
(a) the
Executive is convicted of or enters a plea of guilty or nolo
contendere to a felony or a crime involving fraud or moral
turpitude;
(b) the
Executive repeatedly fails to follow the lawful written
instructions of the Board. which is described by written notice
provided to the Executive and which if susceptible to cure, is not
cured by the Executive within a reasonable period of time stated in
such written notice;
(c) a
government regulatory agency recommends that the Company relieve
the Executive of his or her duties;
(d) the
Executive willfully violates any material statute or regulation
(other than traffic violations or similar offenses), or any final
cease and desist order applicable to the Company;
(e) the
Executive engages in an activity that results in a breach of
fiduciary duty involving receipt of personal profit by the
Executive at the expense of the Company; or
(f) the
Executive commits an act of willful misconduct, intentionally fails
to perform stated lawful duties, or performs his or her duties in
an incompetent manner, which is
FINAL COPY described by written notice provided to the
Executive and which if susceptible to cure, is not cured by the
Executive within a reasonable period of time stated in such written
notice. 1.06 Change in Control
. A "change in ownership," "change in effective control," or
"change in the ownership of a substantial portion of the
company’s assets" as defined under Code Section 409A and
the regulations and guidance promulgated thereunder.
1.07 Code . The Internal
Revenue Code of 1986, as amended.
1.08 Company Contributions .
The contributions to be credited to an Executive’s Plan
accounts as described in Section 3.02 hereof.
1.09 Company Contribution Date
. The last day of the Plan Year for which the Company Contribution
is being made. 1.10
Compensation . The Executive’s annual base salary.
1.11 Deferrals . The portion
of the Compensation that a Participant elects to defer in
accordance with Section 3.01 hereof.
1.12 Deferral Date . The date
the Deferrals will be credited to the Executive’s Account,
which date shall be the date it would otherwise have been payable
to the Executive. 1.13 Deferral
Election . The separate written agreement, submitted to the
Administrator, by which an Executive elects to participate in the
Plan and to make Deferrals. 1.14
Disability . The inability 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. 1.15 Effective
Date . January 1, 2009. 1.16
Executive . An executive of the Company or an Affiliate
selected by the Board to participate in the Plan.
1.17 Interest Rate . An annual
rate of return determined by the Board in its sole discretion.
1.18 Participant . An
Executive who is a Participant as provided in ARTICLE 2.
1.19 Plan Year .
January 1 to December 31.
1.20 Profitability Date . The
last day of the Plan Year in which the Company completes three
(3) calendar quarters of profitability, all of which must be
within such Plan Year; provided that the Company also achieves
profitability for the entire Plan Year. The Company’s
profitability shall be determined assuming that distributions
attributable to such Plan Year have been made.
FINAL COPY 1.21
Restricted Stock . Common stock of the Company which is
granted to a Participant and contributed to his or her Company
Contribution Account pursuant to the First Priority Bank Restricted
Share Plan subject to restrictions as set forth in the
Participant’s Restricted Stock Agreement.
1.22 Restricted Stock
Agreement . An agreement between the Company and a Participant
which sets forth the terms and conditions under which shares of the
common stock of the Company shall be granted to such Participant.
1.23 Retirement . A voluntary
Separation from Service following the attainment of at least
(i) five (5) years of employment with the Company and
(ii) sixty-five (65) years of age. Notwithstanding the
foregoing, an Executive shall not be considered to have Retired if
the Executive would have been involuntarily terminated for Cause
absent such Retirement. 1.24
Separation from Service . The termination of the
Executive’s employment with the Company and each of its
Affiliates. Whether a Separation from Service takes place is
determined by the Company based on the facts and circumstances
surrounding the termination of the Executive’s employment and
whether the Company and the Executive intended for the Executive to
provide significant services for the Company following such
termination.
(a) A
termination of employment will be presumed to constitute a
Separation from Service if the Executive continues to provide
services as an employee of the Bank in an annualized amount that is
less than 20% of the services rendered, on average, during the
immediately preceding three years of employment (or, if employed
less than three years, such lesser period).
(b) The
Executive will be presumed to have not incurred a Separation from
Service if the Executive continues to provide services to the Bank
in an annualized amount that is 50% or more of the services
rendered, on average, during the immediately preceding three years
of employment (or if employed less than three years, such lesser
period).
(c) A
Separation from Service will not have occurred if immediately
following the Executive’s termination of employment, the
Executive becomes an employee of any Affiliate of the Company,
unless the services to be performed would be in amount that would
result in the presumption that a Separation from Service had
occurred. 1.25 Specified
Employee . A key employee (as defined in Code
Section 416(i) 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. ARTICLE 2.
ELIGIBILITY AND PARTICIPATION 2.01
Eligible Executives . The Board shall determine in its sole
discretion which executives of the Company and its Affiliates shall
be eligible for participation in the Plan. In making this
determination, the Board shall only permit participation in the
Plan by executives who are members of a select group of management
or highly compensated employees who
FINAL COPY contribute materially to the continued growth,
development, and future business success of the Company.
2.02 Commencement of
Participation . Each Executive shall become a Participant in
the Plan on the date the Executive’s Deferral Election first
becomes effective.
(a) A
Participant who is no longer an Executive shall not be permitted to
submit a Deferral Election and all Deferrals and Company
Contributions for such Participant shall cease as of the end of the
Plan Year in which such Participant is determined to no longer be
an Executive.
(b) Amounts
credited to the Participant’s Account described in
subsection (a) shall continue to be held, pursuant to the
terms of the Plan and shall be distributed as provided in
ARTICLE 6. ARTICLE 3.
CONTRIBUTIONS 3.01 Deferrals .
(a) The
Company shall credit to the Participant’s Account an amount
equal to the amount designated in the Participant’s Deferral
Election for that Plan Year. Such amounts shall not be made
available to such Participant, except as provided in
ARTICLE 6, and shall reduce such Participant’s
Compensation from the Company or Affiliate in accordance with the
provisions of the applicable Deferral Election; provided, however,
that all such amounts shall be subject to the rights of the general
creditors of the Company and Affiliates as provided in
ARTICLE 8.
(b) Each
Executive shall deliver a Deferral Election to the Administrator
before any Deferrals may become effective. Such Deferral Election
shall be void with respect to any Deferral unless submitted before
the beginning of the calendar year during which the amount to be
deferred will be earned. Notwithstanding the foregoing, in the year
in which an Executive is first eligible to participate, such
Deferral Election shall be filed within thirty (30) days of
the date on which an Executive is first eligible to participate,
respectively, with respect to Compensation earned during the
remainder of the calendar year.
(c) On
or after the first day of any Plan Year, a Participant’s
Deferral Election with respect to that Plan Year shall be
irrevocable. A Participant’s Deferral Election applies to the
Participant’s Compensation for all future Plan Years,
commencing with the Plan Year for which the Participant makes the
election, unless the Participant makes a new election or revokes or
modifies an existing election. A Participant may change a Deferral
Election by delivering to the Administrator a written revocation or
modification of such election with respect to Compensation that
relate to services yet to be performed. The revocation or
modification of the Deferral Election shall be effective as of the
first day of the Plan Year following the date the Participant
delivers the revocation or modification to the Administrator.
(d) The
Deferral Election shall contain the following:
FINAL COPY
(i) the
Participant’s designation as to the amount of Compensation to
be deferred;
(ii) the
beneficiary or beneficiaries of the Participant; and
(iii) such
other information as the Administrator may require.
(e) The
maximum amount that may be deferred each Plan Year is one hundred
percent (100%) of the Participant’s base salary.
3.02 Company Contributions .
(a) On
each Company Contribution Date, there shall be credited to the
Participant’s Company Contributions Account a number of
shares of Restricted Stock equal to 100% of the amount of Deferrals
for the Plan Year divided by the greater of (i) the average
fair market value of a share of Company common stock for the Plan
Year or (ii) $10. Such grant of Restricted Stock shall be made
pursuant to the First Priority Bank Restricted Share Plan subject
to restrictions as set forth in the Participant’s Restricted
Stock Agreement or such other equity plan adopted by the Company.
(b) Notwithstanding
the foregoing:
(i) in
the event a Participant experiences an involuntary Separation from
Service without Cause or a Separation from Service for Disability,
death, or Retirement prior to the last day of a Plan Year, the
Company Contribution Date shall be the date of such Separation from
Service and on such date the Company shall credit to the
Participant’s Company Contributions Account a number of
shares of Restricted Stock equal to 100% of the amount of Deferrals
for the Plan Year divided by the greater of (i) the average
fair market value of a share of Company common stock for the period
beginning on the first day of the Plan Year and ending on the date
of such Separation from Service or (ii) $10; and
(ii) in
the event of a Change in Control prior to the last day of a Plan
Year, the Company Contribution Date shall be the date of such
Change in Control and on such date the Company shall credit to the
Participant’s Company Contributions Account a number of
shares of Restricted Stock equal to 100% of the amount of Deferrals
for the Plan Year divided by the greater of (i) the average
fair market value of a share of Company common stock for the period
beginning on the first day of the Plan Year and ending on the date
immediately prior to the announcement date of such Change in
Control or (ii) $10. 3.03 Time of
Contributions . Deferrals shall be credited to the Account of
the appropriate Participant as of the Deferral Date.
3.04 Interest . Each Deferral
credited to a Participant’s Account shall accrue simple
interest daily from the date thereof until the date of distribution
at the Interest Rate.
FINAL COPY ARTICLE 4.
VESTING 4.01 Vesting . The
Deferrals and Company Contributions for each Plan Year shall vest
separately in accordance with the following.
(a) A
Participant shall become one hundred percent (100%) vested in the
Deferrals for a Plan Year on the Profitability Date; provided that
the Profitability Date occurs on or before the five (5) year
anniversary of the last day of such Plan Year.
(b) If
the Profitability Date occurs on or before the five (5) year
anniversary of the last day of a Plan Year, a Participant shall
become one hundred percent (100%) vested in the Company
Contributions for such Plan Year on the later of (i) the three
(3) year anniversary of the Profitability Date or
(ii) the five (5) year anniversary of the date on which
such Company Contributions are credited to the Participant’s
Account. For the avoidance of doubt, Company Contributions shall
not vest ratably.
(c) The
Deferrals and Company Contributions for a given Plan Year shall be
forfeited if the Profitability Date occurs after the five
(5) year anniversary of the last day of such Plan Year.
(d) Upon
a Separation from Service, the portion of a Participant’s
Account that has not yet vested pursuant to this Section 4.01
shall be forfeited; provided, however, that a Participant shall
become one hundred percent (100%) vested in his or her entire
Account upon an involuntary Separation from Service without Cause
or a Separation from Service for Disability, death, or Retirement.
(e) A
Participant shall become one hundred percent (100%) vested in his
or her entire Account upon a Change in Control. ARTICLE 5.
ACCOUNTS 5.01 Accounts . The
Administrator shall establish and maintain an Account in the name
of each Participant, which shall be divided into a separate
Deferral Account and Company Contributions Account. The
Administrator shall adjust the amounts credited to each
Participant’s Account to reflect Deferrals, Company
Contributions, interest earned pursuant to Section 3.04,
distributions, and any other appropriate adjustments. Each
Partici
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