Description of
SENIOR OFFICERS DEFERRED COMPENSATION
PLAN
of
Arrow Financial
Corporation
Arrow Financial Corporation (the
“Company”) maintains an unfunded Senior Officers
Deferred Compensation Plan (the “Plan”). Under
the Plan, any Senior Officer (as defined below) may elect in
writing on or before December 31 of any year to defer receipt
of all or any portion of the Senior Officer’s compensation
for the following calendar year. Once made, a deferral
continues to be in effect for all ensuing calendar years unless and
until the Senior Officer, by written notice, amends the election
(to defer a greater or lesser amount of compensation) or terminates
the election or until such person ceases to be a Senior Officer.
An amendment or termination of a deferral election, or
cessation of participation due to a change in status, will take
effect only as of the commencement of the ensuing calendar
year.
Under the Plan, a Senior Officer is
defined to include any full-time employee of the Company or any
subsidiary of the Company who is designated as a “Senior
Officer” by the Company. It is intended that amounts
deferred under the Plan, and accumulated interest thereon, will not
be deemed taxable income to the participating Senior Officer, and
will not be deductible compensation from the standpoint of the
Company or its subsidiaries, until such amounts are actually
distributed.
The Company maintains for each Senior
Officer participating in the Plan a separate Plan account.
The account is credited with the dollar amount of deferrals,
together with accrual of interest thereon from time to time at a
rate equal to the highest rate currently being paid on individual
retirement accounts by the Company’s subsidiary, Glens Falls
National Bank and Trust Company.
Upon a Senior Officer’s Termination
of Employment, deferred amounts and accumulated interest thereon in
the Senior Officer’s Plan account are distributed to the
Senior Officer in a single lump sum or, if the Senior Officer shall
have so designated in his initial deferral election, in such number
of equal annual installments and over such periods as shall have
been designated, not to exceed five (5) years. Such
distribution or distributions are to commence on the first business
day of the month following the six month anniversary of the Senior
Officer’s Termination of Employment.
A Senior Officer will be permitted one
opportunity to change the form of payment initially elected under
the Plan provided that (i) such election will not take effect until
12 months after the date on which the election is made; (ii) the
commencement of the payment or payments must be deferred for at
least 5 years after the date such payment or payments would
otherwise h
