Exhibit 10 (ix)
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MONROE BANCORP
EXECUTIVES' DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1999)
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MONROE BANCORP
EXECUTIVES' DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1999)
TABLE OF CONTENTS
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ARTICLE
PAGE
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INTRODUCTION .....................................................
1
I.
DEFINITIONS
..................................................... 1
1.1 Accounting
Date.......................................... 1
1.2
Board....................................................
1
1.3
Committee................................................
1
1.4
Company..................................................
1
1.5 Incentive
Compensation................................... 1
1.6 Deferral
Account......................................... 1
1.7
Disability...............................................
1
1.8 Effective
Date........................................... 1
1.9
Employee.................................................
1
1.10
Employer.................................................
2
1.11
Participant..............................................
2
1.12
Participant Salary Deferral Contributions................
2
1.13
Participation Agreement..................................
2
1.14
Plan ....................................................
2
1.15
Plan Year................................................
2
1.16
Rabbi Trust..............................................
2
II.
ELIGIBILITY AND PARTICIPATION.....................................
2
III. CONTRIBUTIONS
AND ALLOCATIONS..................................... 2
3.1
Participant Salary Deferral Contributions................
2
3.2
Participation Agreement..................................
3
3.3 Allocation
of Contributions and Earnings................. 4
IV. INVESTMENT
OF CONTRIBUTIONS.......................................
4
4.1
Investments..............................................
4
4.2 Unsecured
Contractual Rights............................. 5
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V.
DISTRIBUTIONS.....................................................
5
5.1 Time of
Payment of Benefits.............................. 5
5.2 Method of
Payment of Benefits............................ 5
5.3 Benefit
Payment Elections................................ 5
5.4 Death of
the Participant and Beneficiary Designation..... 6
VI. PLAN
ADMINISTRATION...............................................
6
6.1
Administration by the Committee..........................
7
6.2 Powers and
Responsibilities of the Committee............. 7
6.3
Liabilities..............................................
8
6.4 Claims
Procedure......................................... 8
6.5 Income and
Employment Tax Withholding.................... 9
VII. AMENDMENT AND
TERMINATION OF THE PLAN............................. 9
7.1 Amendment
of the Plan.................................... 9
7.2
Termination of the
Plan.................................. 9
VIII.
MISCELLANEOUS.....................................................
9
8.1 Governing
Law............................................ 9
8.2 Headings
and Gender...................................... 9
8.3
Participant's Rights; Acquittance........................
9
8.4
Spendthrift Clause.......................................
9
8.5
Counterparts............................................. 10
8.6 No
Enlargement of Employment Rights...................... 10
8.7
Limitations on Liability................................. 10
8.8 Incapacity
for Participant or Beneficiary................ 10
8.9 Corporate
Successors..................................... 10
8.10
Evidence................................................. 10
8.11
Action by Employer....................................... 10
8.12
Severability............................................. 10
SIGNATURES
..................................................... 11
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INTRODUCTION
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The purpose of this Plan is to permit a select group of management
or
highly compensated Employees to elect to
defer incentive compensation from the
Employers without regard to the limitations
imposed by the Internal Revenue Code
on the benefits which may accrue to those
Employees under the Employers'
tax-qualified retirement plans. It is the
intention of the Company that the Plan
shall constitute an unfunded arrangement
maintained for the purpose of providing
deferred compensation for that select group
of management or highly compensated
Employees for federal income tax purposes
and for purposes of Title I of the
Employee Retirement Income Security Act of
1974, as amended.
ARTICLE I
DEFINITIONS
-----------
Whenever the initial letter of the following words or phrases
is
capitalized in this Plan, those words and
phrases shall have the meanings stated
below unless a different meaning is plainly
required by the context:
1.1 "Accounting Date" means the last day of each month (and any
other
date selected by the Committee).
1.2 "Board" means the Board of Directors of the Company.
1.3 "Committee" means the Compensation Committee of the Board.
1.4 "Company" means Monroe Bancorp.
1.5 "Incentive Compensation" means the Participant's annual bonuses
and
other forms of compensation payable by an
Employer and designated as Incentive
Compensation by the Board or Committee,
including any Participant Salary
Deferral Contributions made on behalf of
the Participant under this Plan or
salary reductions made pursuant to a plan
which qualifies under Section 401(k)
of the Internal Revenue Code and/or Section
125 of the Internal Revenue Code.
1.6 "Deferral Account" means the individual bookkeeping account
maintained for each Participant in
accordance with Section 3.3(a).
1.7 "Disability" means any mental or physical disability that
would
render the Participant unable to perform
his duties as an executive officer of
an Employer.
1.8 "Effective Date" means January 1, 1999.
1.9 "Employee" means any individual who is a "common-law employee"
of
an Employer.
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1.10 "Employer" means the Company and any other entity the
Company
allows to adopt and become a participating
Employer under the Plan.
1.11 "Participant" means an Employee who is a salaried
executive
officer of an Employer and who becomes a
Participant pursuant to the provisions
of Article II of the Plan.
1.12 "Participant Salary Deferral Contributions" means
contributions
made to the Plan pursuant to Section 3.1 by
an Employer, at the election of the
Participant, in lieu of Incentive
Compensation, under a Participation Agreement
between the Participant and an Employer.
Although the term "contribution" is
used for ease of reference, credits to
Participants' Deferral Accounts under the
Plan are merely credits to a bookkeeping
account.
1.13 "Participation Agreement" means one or more written
agreements
between the Participant and an Employer
pursuant to which the Participant elects
to make Participant Salary Deferral
Contributions, designates his
beneficiary(ies), elects a form of
distribution and elects the time at which his
benefit will be distributed under the
Plan.
1.14 "Plan" means the deferred compensation plan embodied herein,
as
amended from time to time, known as the
Monroe Bancorp Executives' Deferred
Compensation Plan.
1.15 "Plan Year" means the 12-month period beginning each January 1
and
ending on the following December 31.
1.16 "Rabbi Trust" means the rabbi trust established by the
Company
with a corporate trustee to provide for the
benefits created by this Plan.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
-----------------------------
Any duly elected and serving executive officer of an Employer
is
eligible to become a Participant in the
Plan provided the Employee is designated
as a Participant by the Committee in
writing. A designated Employee will become
a Participant as of the later of the
Effective Date or the date specified by the
Committee. A Participant may be removed as
an active Participant by the
Committee effective as of any date, so that
he will not be entitled to make
deferrals under Article III on or after
that date.
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
-----------------------------
3.1 Participant Salary Deferral Contributions.
(a) Salary
Deferral Elections. Subject to the terms and
limitations of this Article III, an Employer shall
reduce a Participant's Incentive Compensation and
make a Salary Deferral Contribution on behalf of each
Participant with respect to whom a Participation
Agreement is in effect. The Participation Agreement
shall specify the percentage (or dollar
2
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amount) of the Participant's Incentive Compensation
to be deferred as is mutually agreed upon between the
Participant and the Committee. Such percentage (or
dollar amount) shall remain in effect thereafter
until another percentage (or dollar amount) is agreed
upon by the Participant and the Committee in
accordance with the provisions of Section 3.2 or
until the Committee notifies the Participant that the
Participant is no longer eligible to make
contributions under this Section 3.1.
(b) Limit on
Contributions. A Participant may defer up to
100% of his Incentive Compensation.
3.2 Participation Agreement.
(a)
Requirement for Participation Agreement. As a
condition to an Employer's and the Committee's
obligation to credit Participant Salary Deferral
Contributions for the benefit of a Participant
pursuant to Section 3.1, the Participant must execute
a Participation Agreement with the Committee (on such
forms as shall be prescribed by the Committee) in
which it is agreed that the Participant's Employer
will withhold payment of all or a portion of the
Participant's Incentive Compensation and shall credit
such amount withheld to the Participant's Deferral
Account at the times set forth in Section 3.3.
(b) Timing of
Execution and Delivery of Participation
Agreement. A Participation Agreement must be executed
by the Participant and the Committee on or prior to
December 31 of the calendar year preceding the
calendar year the Participant is entitled to receive
the Incentive Compensation with respect to which the
Participant Salary Deferral Contributions specified
in the Participation Agreement relate. For example,
to defer Incentive Compensation earned in 2002 and
payable in 2003, a Participation Agreement must be
executed on or before December 31, 2002. This
provision will be effective for any Incentive
Compensation paid on or after January 1, 1999,
including elections made prior to that date.
(c)
Modification of Participant Salary Deferral
Contributions. At any time, a Participant and the
Committee may execute and deliver an amended
Participation Agreement which increases, decreases,
commences or terminates Participant Salary Deferral
Contributions which are attributable to the
Participant's Incentive Compensation. Provided,
however, such amended Participation Agreement must be
executed by the Participant and the Committee on or
prior to December 31 of the calendar year preceding
the calendar year the Participant is entitled to
receive the Incentive Compensation with respect to
which the Participant Salary Deferral Contributions
specified in the Participation Agreement relate.
3
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3.3 Allocation of Contributions and Earnings.
(a) Deferral
Account. The Committee shall establish and
maintain a Deferral Account in the name of each
Participant, to which the Committee shall credit all
amounts to be allocated to each Participant pursuant
to Sections 3.1 and 3.2 and from which the Committee
shall debit all amounts paid to the Participant or
his designated beneficiary pursuant to Article V.
(b)
Accounting. As of each Accounting Date the
Participants' Deferral Accounts will be adjusted as
follows:
(i) First, by
charging a Participant's Deferral
Account with any payments made to or on
behalf of that Participant or his designated
beneficiary since the last Accounting Date.
(ii)
Second, by adjusting the balances in all the
Participants' Deferral Accounts, pro rata,
so that the total of the Deferral Account
balances equal the adjusted net worth of the
Rabbi Trust fund (as determined below) as of
that Accounting Date.
(iii)
Finally, by crediting each Participant's
Deferral Account with any Participant Salary
Deferral Contributions that are to be
allocated to his Deferral Account as of that
Accounting Date.
The "adjusted net worth of the Rabbi Trust fund" as
of any Accounting Date means the fair market value of
all the property held by the trustee under that trust
on that date, less an amount equal to the
contributions made to the trustee since the previous
Accounting Date.
(c) Crediting
of Contributions. Participant Salary
Deferral Contributions shall be credited to a
Participants'
Deferral Account as of the last day of
the month in which the deferred amount is contributed
to the Rabbi Trust. Deferred amounts will be
contributed to the Rabbi Trust as soon as practicable
following the date withheld from the Participant's
Incentive Compensation.
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
---------------------------
4.1 Investments. All contributions under the Plan shall be credited
to
each Partici-pant's Deferral Account as
provided in Section 3.3. No provision of
the Plan shall impose or be deemed to
impose any obligation upon the Company,
other than an unsecured contractual
obligation to make a cash payment to
Participants and their beneficiaries in
accordance with the terms of the Plan.
Benefits payable under the Plan shall be
paid directly by the Company from its
general assets to the extent not paid from
the Rabbi Trust.
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4.2 Unsecured Contractual Rights. The Plan at all times shall
be
unfunded and shall constitute a mere
promise by the Company to make benefit
payments in the future. Notwith-standing
any other provision of this Plan,
neither a Participant nor his designated
beneficiary shall have any preferred
claim on, or any beneficial ownership
interest in, any assets of the Company
prior to the time benefits are paid as
provided in Article V, including any
Incentive Compensation deferred by the
Participant. All rights created under
this Plan shall be mere unsecured
contractual rights of the Participant against
the Company.
ARTICLE V
DISTRIBUTIONS
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5.1 Time of Payment of Benefits. All amounts credited to a
Participant's Deferral Account shall be or
shall commence to be distributed to
or for the benefit of a Participant (or his
designated beneficiary) on a date
selected by the Participant in his
Participation Agreement or upon his earlier
death or Disability.
5.2 Method of Payment of Benefits. The balance of a
Participant's
Deferral Account shall be paid by the
Company in cash or kind, as determined by
the Committee, in one of the following
methods effectively elected by the
Participant in his Participation
Agreement:
(a) A single
lump sum.
(b) Monthly
installments payable over a period not in
excess of 10 years as shall be elected by the
Participant.
(c) A
combination of the methods specified in subsections
(a) and (b).
5.3 Benefit Payment Elections.
(a) In order
to be effective, a Participant's election of
the manner in which his benefits shall be distributed
(including benefits which become payable as a result
of the Participant's death) must be made by
delivering a Participation Agreement or an amended
Participation Agreement to the Committee not later
than 60 days prior to the beginning of the Plan Year
in which the distribution event occurs. If the
Participant does not elect a form of distribution
under Section 5.2, or such election is not timely or
properly made under this Section 5.3, his Employer
shall pay the entire benefit in the form of a single
lump sum.
(b) In the
event a Participant properly elects and is
eligible to receive his Deferral Account in the form
specified in Section 5.2(b), the Participant must
specify in his written election the number of years
over which the monthly installments are to be
distributed.
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(c) In the
event a Participant properly elects and is
eligible to receive his Deferral Account in the form
specified in Section 5.2(c), the Participant must
specify in his written election the percentage of the
account which will be distributed in a single lump
sum and the percentage of the account which will be
distributed in installments, including the number of
years over which such installments shall be
distributed.
5.4 Death of the Participant and Beneficiary Designation.
(a) Form and
Time of Payment. In the event of a
Participant's death, the balance in his Deferral
Account shall be paid to his designated beneficiary
in a single lump sum. Such distribution shall be made
as soon as practicable following the date of the
Participant's death.
(b)
Designation of Beneficiaries. The Participant may
designate a primary and contingent beneficiary or
beneficiaries on forms provided by the Committee,
which for this purpose may include the Participation
Agreement. Such designation may be changed at any
time for any reason by the Participant. If the
Participant fails to designate a beneficiary, or if
such designation shall for any reason be illegal or
ineffective, or if the designated beneficiary(ies)
shall not survive the Participant, his benefits under
the Plan shall be paid: (i) to his surviving spouse;
(ii) if there is no surviving spouse, to the duly
appointed and qualified executor or other personal
representative of the Participant to be distributed
in accordance with the Participant's will or
applicable intestacy law; or (iii) in the event that
there shall be no such representative duly appointed
and qualified within 45 days after the date of death
of the Participant, then to such persons as, at the
date of his death, who would be entitled to share in
the distribution of the Participant's estate under
the provisions of the applicable statutes then in
force governing the descent of intestate property, in
the proportions specified in such statute. The
Committee may determine the identity of the
distributees, and in so doing may act and rely upon
any information it may deem reliable upon reasonable
inquiry, and upon any affidavit, certificate, or
other document believed by it to be genuine, and upon
any evidence believed by it to be sufficient.
ARTICLE VI
PLAN ADMINISTRATION
-------------------
6.1 Administration by the Committee. The Committee shall be
responsible
for administering the Plan. Except as the
Company shall otherwise expressly
determine, the Committee shall be charged
with the full power and the
responsibility for administering the Plan
in all its details.
6.2 Powers and Responsibilities of the Committee.
6
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(a) The
Committee shall have all powers necessary to
administer the Plan, including the power to construe
and interpret the Plan documents; to decide all
questions relating to an individual's eligibility to
participate i
