Maryland | 000-50345 | 20-0154352 | ||
(State of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
2995 Crain Highway | ||
Waldorf, Maryland | 20601 | |
(Address of Principal Executive Offices) | (Zip Code) |
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o | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
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o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF 240.14a-12) | ||
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o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 SFR 240.14d-2 (b)) | ||
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o | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e- 4 (c)) |
Name of Officer | Cash Bonus | Number of Options | Exercise Price | |||||||||
James W. Cornelsen
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$ | 63,000 | 19,700 | $ | 10.44 | |||||||
Joseph Burnett
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$ | 25,000 | 8,800 | $ | 10.44 | |||||||
Christine Rush
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$ | 24,000 | 8,300 | $ | 10.44 |
(a) | Not applicable | ||
(b) | Not applicable | ||
(c) | Exhibits |
10.1 | Second Amendment to Executive Employment Agreement dated December 30, 2005 between Old Line Bank and James W. Cornelsen |
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10.2 | Second Amendment to Executive Employment Agreement dated December 30, 2005 between Old Line Bank and Joseph Burnett | ||
10.3 | Second Amendment to Executive Employment Agreement dated December 30, 2005 between Old Line Bank and Christine Rush | ||
10.4 | Salary Continuation Agreement dated January 3, 2006 between Old Line Bank and James W. Cornelsen | ||
10.5 | Supplemental Life Insurance Agreement dated January 3, 2006 between Old Line Bank and James W. Cornelsen | ||
10.6 | Salary Continuation Agreement dated January 3, 2006 between Old Line Bank and Joseph E. Burnett | ||
10.7 | Supplemental Life Insurance Agreement dated January 3, 2006 between Old Line Bank and Joseph E. Burnett | ||
10.8 | Salary Continuation Agreement dated January 3, 2006 between Old Line Bank and Christine M. Rush | ||
10.9 | Supplemental Life Insurance Agreement dated January 3, 2006 between Old Line Bank and Christine M. Rush |
OLD LINE BANCSHARES, INC.
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January 6, 2006 | By: | /s/ James W. Cornelsen | ||
James W. Cornelsen, President | ||||
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Second Amendment to Executive Employment Agreement dated December 30, 2005 between Old Line
Bank and James W. Cornelsen
Second Amendment to Executive Employment Agreement dated December 30, 2005 between Old Line
Bank and Joseph Burnett
Second Amendment to Executive Employment Agreement dated December 30, 2005 between Old Line
Bank and Christine Rush
Salary Continuation Agreement dated January 3, 2006 between Old Line Bank and James W.
Cornelsen
Supplemental Life Insurance Agreement dated January 3, 2006 between Old Line Bank and James
W. Cornelsen
Salary Continuation Agreement dated January 3, 2006 between Old Line Bank and Joseph E.
Burnett
Supplemental Life Insurance Agreement dated January 3, 2006 between Old Line Bank and Joseph
E. Burnett
Salary Continuation Agreement dated January 3, 2006 between Old Line Bank and Christine M.
Rush
Supplemental Life Insurance Agreement dated January 3, 2006 between Old Line Bank and
Christine M. Rush
WITNESS/ATTEST: | OLD LINE BANK. | ||||
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/s/ Christine M. Rush
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By: | /s/ Charles A. Bongar, Jr. | (SEAL) | ||
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Name: Charles A. Bongar, Jr. | ||||
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Title: Chairman of Compensation Committee | ||||
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WITNESS:
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/s/ Christine M. Rush
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/s/ James W. Cornelsen | (SEAL) | |||
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JAMES W. CORNELSEN |
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WITNESS/ATTEST: | OLD LINE BANK. | ||||
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/s/ Christine M. Rush
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By: | /s/ Charles A. Bongar, Jr. | (SEAL) | ||
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Name: Charles A. Bongar, Jr. | ||||
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Title: Chairman of Compensation Committee | ||||
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WITNESS:
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/s/ Christine M. Rush
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/s/ Joseph Burnett | (SEAL) | |||
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JOSEPH BURNETT |
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WITNESS/ATTEST: | OLD LINE BANK | ||||
/s/ James W. Cornelsen
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By: | /s/ Charles A. Bongar, Jr. | (SEAL) | ||
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Name: Charles A. Bongar, Jr. | ||||
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Title: Chairman of Compensation Committee | ||||
WITNESS:
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/s/ James W. Cornelsen
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/s/ Christine Rush | (SEAL) | |||
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CHRISTINE RUSH |
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1.1 | Beneficiary means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive determined pursuant to Article 4. | |
1.2 | Beneficiary Designation Form means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries. | |
1.3 | Board means the Board of Directors of the Bank as from time to time constituted. | |
1.4 | Change in Control means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Section 409A of the Code and regulations thereunder. | |
1.5 | Code means the Internal Revenue Code of 1986, as amended. | |
1.6 | Disability means the Executive (i) is 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 not less than twelve (12) months, or (ii) is, 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 not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the |
Executive must submit proof to the Plan Administrator of the Social Security Administrations or providers determination. | ||
1.7 | Early Termination means Separation from Service before Normal Retirement Age for reasons other than death, Disability, Termination for Cause, or following a Change in Control. | |
1.8 | Effective Date means January 1, 2006. | |
1.9 | Normal Retirement Age means the Executive attaining age sixty-five (65). | |
1.10 | Normal Retirement Date means the later of Normal Retirement Age or Separation from Service. | |
1.11 | Plan Administrator means the plan administrator described in Article 6. | |
1.12 | Plan Year means each twelve-month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following December 31. | |
1.13 | Schedule A means the schedule attached to this Agreement and made a part hereof. Schedule A shall be updated upon a change in any of the benefits under Articles 2 or 3. | |
1.14 | Separation from Service means the termination of the Executives employment with the Bank for reasons other than death or Disability. Whether a Separation form Service takes place is determined based on the facts and circumstances surrounding the termination of the Executives employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if: |
(a) | the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or | ||
(b) | the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). |
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1.15 | Specified Employee means a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Bank if any stock of the Bank is publicly traded on an established securities market or otherwise. | |
1.16 | Termination for Cause means Separation from Service for: |
(a) | Gross negligence or gross neglect of duties to the Bank; or | ||
(b) | Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executives employment with the Bank; or | ||
(c) | Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executives employment and resulting in a material adverse effect on the Bank. |
2.1 | Normal Retirement Benefit . Upon the Normal Retirement Date, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article. |
2.1.1 | Amount of Benefit . The annual benefit under this Section 2.1 is One Hundred Thirty One Thousand Six Hundred Seven Dollars ($131,607). | ||
2.1.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Date. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.2 | Early Termination Benefit . Upon the Executives Early Termination, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article. |
2.2.1 | Amount of Benefit . The annual benefit under this Section 2.2 is the Early Termination Benefit set forth on Schedule A for the Plan Year in which Separation from Service occurs. | ||
2.2.2 | Distribution of Benefit . The Bank shall distribute the benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.3 | Disability Benefit . If the Executives Disability results in Separation from Service prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article. |
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2.3.1 | Amount of Benefit . The annual benefit under this Section 2.3 is the Disability Benefit set forth on Schedule A for the Plan Year in which the Separation from Service occurs. | ||
2.3.2 | Distribution of Benefit . The Bank shall distribute the benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.4 | Change in Control Benefit . Upon a Change in Control followed by the Executives Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article. |
2.4.1 | Amount of Benefit . The annual benefit under this Section 2.4 is the Change of Control Benefit set forth on Schedule A for the Plan Year in which the Separation from Service occurs. | ||
2.4.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing within thirty (30) days following Separation from Service. The annual benefit shall be distributed to the Executive for fifteen (15) years. | ||
2.4.3 | Excess Parachute Payment Gross-up . If any benefit payable under this Agreement would create an excise tax under the excess parachute rules of Section 280G of the Code, the Bank shall pay to the Executive an additional amount (the Gross-up) equal to: |
2.5 | Restriction on Timing of Distribution . Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.5 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following the Separation from Service shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent distributions shall be paid in the manner specified. |
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2.6 | Distributions Upon Income Inclusion Under Section 409A of the Code . Upon the inclusion of any portion of the account value into the Executives income as a result of the failure of this non-qualified deferred compensation plan to comply with the requirements of Section 409A of the Code, to the extent such tax liability can be covered by the Executives vested account value, a distribution shall be made as soon as is administratively practicable following the discovery of the plan failure. | |
2.7 | Change in Form or Timing of Distributions . For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend the Agreement to delay the timing or change the form of distributions. Any such amendment: |
(a) | may not accelerate the time or schedule of any distribution, except as provided in Section 409A of the Code and the regulations thereunder; | ||
(b) | must, for benefits distributable under Article 2, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and | ||
(c) | must take effect not less than twelve months after the amendment is executed. |
3.1 | Death During Active Service . If the Executive dies while in the active service of the Bank, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed in lieu of the benefits under Article 2. |
3.1.1 | Amount of Benefit . The benefit under this Section 3.1 is the benefit set forth on Schedule A for the Plan Year in which the Executives death occurs. | ||
3.1.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments commencing within sixty (60) days following receipt by the Bank of the Executives death certificate. The annual benefit shall be distributed to the Beneficiary for a period of fifteen (15) years. |
3.2 | Death During Distribution of a Benefit . If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive survived. | |
3.3 | Death After Separation from Service But Before Benefit Distributions Commence . If the Executive is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit |
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distributions shall commence within thirty (30) days following receipt by the Bank of the Executives death certificate. |
4.1 | Beneficiary . The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefit distributions under this Agreement to a Beneficiary upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates. | |
4.2 | Beneficiary Designation: Change . The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Plan Administrator or its designated agent. The Executives beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrators rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executives death. | |
4.3 | Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent. | |
4.4 | No Beneficiary Designation . If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executives spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made to the personal representative of the Executives estate. | |
4.5 | Facility of Distribution . If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that persons property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Executives Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount. |
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5.1 | Termination for Cause . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if Executives employment with the Bank is terminated due to a Termination for Cause. | |
5.2 | Suicide or Misstatement . No benefits shall be distributed if the Executive commits suicide within two years after the Effective Date of this Agreement, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason. | |
5.3 | Removal . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act. |
6.1 | Plan Administrator Duties . This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or person(s) as the Board shall appoint. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with the Agreement. | |
6.2 | Agents . In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank. | |
6.3 | Binding Effect of Decisions . The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. | |
6.4 | Indemnity of Plan Administrator . The Bank shall indemnify and hold harmless the |
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members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. |
6.5 | Bank Information . To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require. | |
6.6 | Annual Statement . The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement. |
7.1 | Claims Procedure . An Executive or Beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be distributed shall make a claim for such benefits as follows: |
7.1.1 | Initiation Written Claim . The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant. | ||
7.1.2 | Timing of Plan Administrator Response . The Plan Administrator shall respond to such claimant within 90 days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. | ||
7.1.3 | Notice of Decision . If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the |
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denial is based; | |||
(c) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; | ||
(d) | An explanation of the Agreements review procedures and the time limits applicable to such procedures; and | ||
(e) | A statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
7.2 | Review Procedure . If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows: |
7.2.1 | Initiation Written Request . To initiate the review, the claimant, within 60 days after receiving the Plan Administrators notice of denial, must file with the Plan Administrator a written request for review. | ||
7.2.2 | Additional Submissions Information Access . The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits. | ||
7.2.3 | Considerations on Review . In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. | ||
7.2.4 | Timing of Plan Administrator Response . The Plan Administrator shall respond in writing to such claimant within 60 days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. | ||
7.2.5 | Notice of Decision . The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; |
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(c) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits; and | ||
(d) | A statement of the claimants right to bring a civil action under ERISA Section 502(a). |
8.1 | Amendments . This Agreement may be amended only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative or tax law, including without limitation Section 409A of the Code and any and all regulations and guidance promulgated thereunder. | |
8.2 | Plan Termination Generally . The Bank may unilaterally terminate this Agreement at any time. The benefit shall be the Accrual Balance as of the date the Agreement is terminated. Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3. | |
8.3 | Plan Terminations Under Section 409A . Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances: |
(a) | Within thirty (30) days before, or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and provided that all the Banks arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements; | ||
(b) | Upon the Banks dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Executives gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practical; or | ||
(c) | Upon the Banks termination of this and all other non-account balance plans (as referenced in Section 409A of the Code or the regulations thereunder), provided that all distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and the Bank does not adopt any new non-account balance plans for a minimum of five (5) years following the date of such termination; |
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the Bank may distribute the Deferral Account balance, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms. |
9.1 | Binding Effect . This Agreement shall bind the Executive and the Bank, and their beneficiaries, survivors, executors, administrators and transferees. | |
9.2 | No Guarantee of Employment . This Agreement is not a contract for employment. It does not give the Executive the right to remain as an employee of the Bank, nor does it interfere with the Banks right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executives right to terminate employment at any time. | |
9.3 | Non-Transferability . Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. | |
9.4 | Tax Withholding and Reporting . The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement. Executive acknowledges that the Banks sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). Further, the Bank shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder. | |
9.5 | Applicable Law . The Agreement and all rights hereunder shall be governed by the laws of the State of Maryland, except to the extent preempted by the laws of the United States of America. | |
9.6 | Unfunded Arrangement . The Executive and Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executives life or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim. | |
9.7 | Reorganization . The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term Bank as used in this Agreement shall be deemed to refer to the successor or |
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survivor bank. | ||
9.8 | Entire Agreement . This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. | |
9.9 | Interpretation . Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural. | |
9.10 | Alternative Action . In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement, the Bank or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank. | |
9.11 | Headings . Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions. | |
9.12 | Validity . In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein. | |
9.13 | Notice . Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: |
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Chief Financial Officer | |||
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Old Line Bank | |||
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P.O. Box 1890 | |||
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Waldorf, Md. 20604 | |||
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Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. | ||
Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive. | ||
9.14 | Compliance with Section 409A . This Agreement shall at all times be administered and the provisions of this Agreement shall be interpreted consistent with the requirements of Section 409A of the Code and any and all regulations thereunder, including such regulations as may be promulgated after the Effective Date of this Agreement. |
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9.15 | Rescissions . Any modification to the terms of this Agreement that would inadvertently result in an additional tax liability on the part of the Executive, shall have no effect to the extent the change in the terms of the plan is rescinded by the earlier of a date before the right is exercised (if the change grants a discretionary right) and the last day of the calendar year during which such change occurred. |
EXECUTIVE: | BANK: | |||
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OLD LINE BANK | |||
/s/ James W. Cornelsen
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By | Christine M. Rush | ||
James Cornelsen
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Title Chief Financial Officer |
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| Please PRINT CLEARLY or TYPE the names of the beneficiaries. | ||
| To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement. | ||
| To name your estate as Beneficiary, please write Estate of _[your name]_ . | ||
| Be aware that none of the contingent beneficiaries will receive anything unless ALL of the primary beneficiaries predecease you. |
Name:
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James W. Cornelsen | |||||||
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Signature:
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/s/ James W. Cornelsen | Date: | 01/03/05 | |||||
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By:
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/s/ Christine M. Rush
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Title:
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Chief Financial Officer
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Early | ||||||||||||||||||||
Termination | Disability | Change in | Pre-Retirement | |||||||||||||||||
Separation | Annual | Annual | Control Annual | Annual Death | ||||||||||||||||
Occurring After | Age | Benefit(1) | Benefit(1) | Benefit(2) | Benefit | |||||||||||||||
1/1/2006
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51 | $ | 0 | $ | 0 | $ | 68,389 | $ | 131,607 | |||||||||||
1/1/2007
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52 | $ | 9,698 | $ | 9,698 | $ | 71,809 | $ | 131,607 | |||||||||||
1/1/2008
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53 | $ | 19,396 | $ | 19,396 | $ | 75,399 | $ | 131,607 | |||||||||||
1/1/2009
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54 | $ | 29,094 | $ | 29,094 | $ | 79,169 | $ | 131,607 | |||||||||||
1/1/2010
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55 | $ | 38,793 | $ | 38,793 | $ | 83,128 | $ | 131,607 | |||||||||||
1/1/2011
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56 | $ | 48,491 | $ | 48,491 | $ | 87,284 | $ | 131,607 | |||||||||||
1/1/2012
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57 | $ | 58,189 | $ | 58,189 | $ | 91,648 | $ | 131,607 | |||||||||||
1/1/2013
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58 | $ | 67,887 | $ | 67,887 | $ | 96,231 | $ | 131,607 | |||||||||||
1/1/2014
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59 | $ | 77,585 | $ | 77,585 | $ | 101,042 | $ | 131,607 | |||||||||||
1/1/2015
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60 | $ | 87,283 | $ | 87,283 | $ | 106,095 | $ | 131,607 | |||||||||||
1/1/2016
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61 | $ | 96,982 | $ | 96,982 | $ | 111,399 | $ | 131,607 | |||||||||||
1/1/2017
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62 | $ | 106,680 | $ | 106,680 | $ | 116,969 | $ | 131,607 | |||||||||||
1/1/2018
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63 | $ | 116,378 | $ | 116,378 | $ | 122,818 | $ | 131,607 | |||||||||||
1/1/2019
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64 | $ | 126,076 | $ | 126,076 | $ | 128,959 | $ | 131,607 | |||||||||||
6/23/2019(3)
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65 | $ | 131,607 | $ | 131,607 | $ | 131,607 | $ | 131,607 |
(1) | Payments are made in 180 equal monthly installments commencing within 60 days following Normal Retirement Age. Refer to Section 2.2 for Early Termination, and 2.3 for Disability. | |
(2) | Payments are made in 180 equal monthly installments commencing at Separation of Service. Refer to Section | |
2.4 for Change in Control. | ||
(3) | This is the date the Executive reaches Normal Retirement Age. |
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Whenever used in this Agreement, the following terms shall have the meanings specified: | ||
1.1 | Banks Interest means the benefit set forth in Section 2.1. | |
1.2 | Beneficiary means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive. | |
1.3 | Beneficiary Designation Form means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries. | |
1.4 | Board means the Board of Directors of the Bank as from time to time constituted. | |
1.5 | Code means the Internal Revenue Code of 1986, as amended. | |
1.6 | Disability means the Executive (i) is 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 not less than twelve (12) months, or (ii) is, 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 not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administrations or providers determination. | |
1.7 | Executives Interest means the benefit set forth in Section 2.2. |
1.8 | Insurer means the insurance company issuing the Policy on the life of the Executive. | |
1.9 | Net Death Proceeds means the total death proceeds of the Policy minus the greater of (i) the cash surrender value or (ii) the aggregate premiums paid by the Bank. | |
1.10 | Plan Administrator means the plan administrator described in Article 11. | |
1.11 | Policy or Policies means the individual insurance policy or policies adopted by the Bank for purposes of insuring the Executives life under this Agreement. | |
1.14 | Separation from Service means the termination of the Executives employment with the Bank for reasons other than death or Disability. Whether a Separation from Service takes place is determined based on the facts and circumstances surrounding the termination of the Executives employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if: |
(a) | the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or | ||
(b) | the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). |
2.1 | Banks Interest . The Bank shall own the Policies and shall have the right to exercise all incidents of ownership and, subject to Article 3, the Bank may terminate a Policy without the consent of the Executive. The Bank shall be the beneficiary of the remaining death proceeds of the Policies after the Executives Interest is determined according to Section 2.2 below. | |
2.2 | Executives Interest . The Executive, or the Executives assignee, shall have the right to designate the Beneficiary of an amount of death proceeds as specified in the table below: |
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Plan Years | Benefit Amount | |
2005-2009
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45% of the Net Death Proceeds | |
2010-2011
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50% of the Net Death Proceeds | |
2012-2013
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55% of the Net Death Proceeds | |
2014
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60% of the Net Death Proceeds | |
2015
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65% of the Net Death Proceeds | |
2016 and subsequent years
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70% of the Net Death Proceeds |
The Executive shall also have the right to elect and change settlement options with respect to the Executives Interest by providing written notice to the Bank and the Insurer. | ||
2.3 | Forfeiture of Benefit . The Executive will forfeit his or her benefit if: (i) the Executive violates any of the provisions detailed in Article 5; (ii) the Executive becomes gainfully employed by an entity other than the Bank following a Separation from Service due to Disability; or (iii) the Executive provides written notice to the Bank declining further participation in the Agreement. |
3.1 | Insurance Policies . If the Executive is entitled to a benefit, the Bank may provide such benefit through the Policies purchased at the commencement of this Agreement, or may provide comparable insurance coverage to the Executive through whatever means the Bank deems appropriate. If the Executive waives or forfeits his or her right to the benefit, the Bank shall choose to cancel the Policy or Policies on the Executive, or may continue such coverage and become the direct beneficiary of the entire death proceeds. | |
3.2 | Offer to Purchase . If the Bank discontinues a Policy while the Executive is employed by the Bank at the date of discontinuance or while the Executive has a benefit that has not been forfeited, the Bank shall give the Executive at least thirty (30) days to purchase such Policy. The purchase price shall be the fair market value of the Policy, as determined under Treasury Reg. §1.61-22(g)(2) or any subsequent applicable authority. Such notification shall be in writing. |
4.1 | Premium Payment . The Bank shall pay all premiums due on all Policies. | |
4.2 | Economic Benefit . The Bank shall determine the economic benefit attributable to the Executive based on the life insurance premium factor for the Executives age multiplied by the aggregate death benefit payable to the Beneficiary. The life insurance premium factor is the minimum factor applicable under guidance published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any subsequent authority. |
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4.3 | Imputed Income . The Bank shall impute the economic benefit to the Executive on an annual basis, by adding the economic benefit to the Executives W-2, or if applicable, Form 1099. |
5.1 | Excess Parachute or Golden Parachute Payment . If the payments and benefits pursuant to this Agreement, either alone or together with other payments and benefits which the Executive has the right to receive from the Bank, would constitute an excess parachute payment under Section 280G of the Code, or would be a prohibited golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the appropriate federal banking agency has not given written consent to pay pursuant to 12 C.F.R. §359.4, the payments and benefits pursuant to this Agreement shall be reduced, in the manner determined by the Executive in the case of the application of Section 280G of the Code, by the amount, if any, which is the minimum necessary to result in (i) no portion of the payments and benefits under this Agreement being non-deductible to the Bank pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code, and (ii) no adverse consequence to the Bank under or pursuant to such banking regulations. All benefits payable under this Agreement shall also be subject to limitations or prohibitions imposed by subsequent changes or amendments to the cited laws and regulations except to the extent that any benefits payable under this Agreement are grandfathered or otherwise exempt or excluded from the change or amendment. | |
5.2 | Termination for Cause . Notwithstanding any provision of this Agreement to the contrary, the Executive shall forfeit any right to a benefit under this Agreement if the Bank terminates the Executives employment for cause. Termination of the Executives employment for Cause shall mean termination because of personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order or material breach of any provision of the Agreement. For purposes of this paragraph, no act or failure to act on the Executives part shall be considered willful unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executives action or omission was in the best interest of the Bank. | |
5.3 | Removal . Notwithstanding any provision of this Agreement to the contrary, the Executives rights in the Agreement shall terminate if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act (FDIA). | |
5.4 | Suicide or Misstatement . No benefits shall be payable if the Executive commits suicide within two years after the date of this Agreement, or if the insurance company denies coverage (i) for material misstatements of fact made by the Executive on any application for life insurance purchased by the Bank, or (ii) for any other reason. |
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6.1 | Beneficiary . The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefits payable under the Agreement upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other Agreement of the Bank in which the Executive participates. | |
6.2 | Beneficiary Designation; Change . The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Bank or its designated agent. The Executives beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Banks rules and procedures, as in effect from time to time. Upon the acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Bank shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Bank prior to the Executives death. | |
6.3 | Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Bank or its designated agent. | |
6.4 | No Beneficiary Designation . If the Executive dies without a valid designation of beneficiary, or if all designated Beneficiaries predecease the Executive, then the Executives surviving spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made payable to the personal representative of the Executives estate. | |
6.5 | Facility of Payment . If the Bank determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that persons property, the Bank may direct payment of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Bank may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Executive and the Executives Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount. |
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9.1 | Claims Procedure . The Executive or Beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows: |
9.1.1 | Initiation Written Claim . The claimant initiates a claim by submitting to the Bank a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant. | ||
9.1.2 | Timing of Bank Response . The Bank shall respond to such claimant within 90 days after receiving the claim. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision. | ||
9.1.3 | Notice of Decision . If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; | ||
(c) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; | ||
(d) | An explanation of the Agreements review procedures and the time limits |
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applicable to such procedures; and | |||
(e) | A statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
9.2 | Review Procedure . If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows: |
9.2.1 | Initiation Written Request . To initiate the review, the claimant, within 60 days after receiving the Banks notice of denial, must file with the Bank a written request for review. | ||
9.2.2 | Additional Submissions Information Access . The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits. | ||
9.2.3 | Considerations on Review . In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. | ||
9.2.4 | Timing of Banks Response . The Bank shall respond in writing to such claimant within 60 days after receiving the request for review. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision. | ||
9.2.5 | Notice of Decision . The Bank shall notify the claimant in writing of its decision on review. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; | ||
(c) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits; and | ||
(d) | A statement of the claimants right to bring a civil action under ERISA Section 502(a). |
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11.1 | Plan Administrator Duties . This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or persons as the Board may choose. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with this Agreement. |
11.2 | Agents . In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank. |
11.3 | Binding Effect of Decisions . The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement. |
11.4 | Indemnity of Plan Administrator . The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. |
11.5 | Information . To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the Base Salary of the Executive, the date and circumstances of the retirement, Disability, death or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require. |
12.1 | Binding Effect . This Agreement shall bind the Executive and the Bank, their |
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beneficiaries, survivors, executors, administrators and transferees and any Beneficiary. |
12.2 | No Guarantee of Employment . This Agreement is not an employment policy or contract. It does not give the Executive the right to remain an Executive of the Bank, nor does it interfere with the Banks right to discharge the Executive. It also does not require the Executive to remain an Executive nor interfere with the Executives right to terminate employment at any time. |
12.3 | Applicable Law . The Agreement and all rights hereunder shall be governed by and construed according to the laws of the State of Maryland, except to the extent preempted by the laws of the United States of America. |
12.4 | Reorganization . The Bank shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm or person unless such succeeding or continuing company, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term Bank as used in this Agreement shall be deemed to refer to the successor or survivor company. |
12.5 | Notice . Any notice or filing required or permitted to be given to the Bank under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: |
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Chief Financial Officer | |
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Old Line Bank | |
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P.O. Box 1890 | |
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Waldorf, Md. 20604 |
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification. | |||
Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive. |
12.6 | Entire Agreement . This Agreement, along with the Executives Beneficiary Designation Form, constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive under this Agreement other than those specifically set forth herein. |
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EXECUTIVE: | BANK: | |||
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Old Line Bank | |||
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/s/ James W. Cornelsen
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JAMES CORNELSEN
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By Christine M. Rush | |||
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Title Chief Financial Officer |
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1.1 | Beneficiary means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive determined pursuant to Article 4. | |
1.2 | Beneficiary Designation Form means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries. | |
1.3 | Board means the Board of Directors of the Bank as from time to time constituted. | |
1.4 | Change in Control means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Section 409A of the Code and regulations thereunder. | |
1.5 | Code means the Internal Revenue Code of 1986, as amended. | |
1.6 | Disability means the Executive (i) is 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 not less than twelve (12) months, or (ii) is, 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 not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the |
Executive must submit proof to the Plan Administrator of the Social Security Administrations or providers determination. | ||
1.7 | Early Termination means Separation from Service before Normal Retirement Age for reasons other than death, Disability, Termination for Cause, or following a Change in Control. | |
1.8 | Effective Date means January 1, 2006. | |
1.9 | Normal Retirement Age means the Executive attaining age sixty-five (65). | |
1.10 | Normal Retirement Date means the later of Normal Retirement Age or Separation from Service. | |
1.11 | Plan Administrator means the plan administrator described in Article 6. | |
1.12 | Plan Year means each twelve-month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following December 31. | |
1.13 | Schedule A means the schedule attached to this Agreement and made a part hereof. Schedule A shall be updated upon a change in any of the benefits under Articles 2 or 3. | |
1.14 | Separation from Service means the termination of the Executives employment with the Bank for reasons other than death or Disability. Whether a Separation form Service takes place is determined based on the facts and circumstances surrounding the termination of the Executives employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if: |
(a) | the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or | ||
(b) | the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). |
1
1.15 | Specified Employee means a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Bank if any stock of the Bank is publicly traded on an established securities market or otherwise. | |
1.16 | Termination for Cause means Separation from Service for: |
(a) | Gross negligence or gross neglect of duties to the Bank; or | ||
(b) | Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executives employment with the Bank; or | ||
(c) | Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executives employment and resulting in a material adverse effect on the Bank. |
2.1 | Normal Retirement Benefit . Upon the Normal Retirement Date, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article. |
2.1.1 | Amount of Benefit . The annual benefit under this Section 2.1 is Twenty Three Thousand One Hundred Seventy-Seven Dollars ($23,177). | ||
2.1.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Date. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.2 | Early Termination Benefit . Upon the Executives Early Termination, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article. |
2.2.1 | Amount of Benefit . The annual benefit under this Section 2.2 is the Early Termination Benefit set forth on Schedule A for the Plan Year in which Separation from Service occurs. | ||
2.2.2 | Distribution of Benefit . The Bank shall distribute the benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.3 | Disability Benefit . If the Executives Disability results in Separation from Service prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article. |
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2.3.1 | Amount of Benefit . The annual benefit under this Section 2.3 is the Disability Benefit set forth on Schedule A for the Plan Year in which the Separation from Service occurs. | ||
2.3.2 | Distribution of Benefit . The Bank shall distribute the benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.4 | Change in Control Benefit . Upon a Change in Control followed by the Executives Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article. |
2.4.1 | Amount of Benefit . The annual benefit under this Section 2.4 is the Change of Control Benefit set forth on Schedule A for the Plan Year in which the Separation from Service occurs. | ||
2.4.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing within thirty (30) days following Separation from Service. The annual benefit shall be distributed to the Executive for fifteen (15) years. | ||
2.4.3 | Excess Parachute Payment Gross-up . If any benefit payable under this Agreement would create an excise tax under the excess parachute rules of Section 280G of the Code, the Bank shall pay to the Executive an additional amount (the Gross-up) equal to: |
2.5 | Restriction on Timing of Distribution . Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.5 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following the Separation from Service shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent distributions shall be paid in the manner specified. |
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2.6 | Distributions Upon Income Inclusion Under Section 409A of the Code . Upon the inclusion of any portion of the account value into the Executives income as a result of the failure of this non-qualified deferred compensation plan to comply with the requirements of Section 409A of the Code, to the extent such tax liability can be covered by the Executives vested account value, a distribution shall be made as soon as is administratively practicable following the discovery of the plan failure. | |
2.7 | Change in Form or Timing of Distributions . For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend the Agreement to delay the timing or change the form of distributions. Any such amendment: |
(a) | may not accelerate the time or schedule of any distribution, except as provided in Section 409A of the Code and the regulations thereunder; | ||
(b) | must, for benefits distributable under Article 2, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and | ||
(c) | must take effect not less than twelve months after the amendment is executed. |
3.1 | Death During Active Service . If the Executive dies while in the active service of the Bank, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed in lieu of the benefits under Article 2. |
3.1.1 | Amount of Benefit . The benefit under this Section 3.1 is the benefit set forth on Schedule A for the Plan Year in which the Executives death occurs. | ||
3.1.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments commencing within sixty (60) days following receipt by the Bank of the Executives death certificate. The annual benefit shall be distributed to the Beneficiary for a period of fifteen (15) years. |
3.2 | Death During Distribution of a Benefit . If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive survived. | |
3.3 | Death After Separation from Service But Before Benefit Distributions Commence . If the Executive is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit |
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distributions shall commence within thirty (30) days following receipt by the Bank of the Executives death certificate. |
4.1 | Beneficiary . The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefit distributions under this Agreement to a Beneficiary upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates. | |
4.2 | Beneficiary Designation: Change . The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Plan Administrator or its designated agent. The Executives beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrators rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executives death. | |
4.3 | Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent. | |
4.4 | No Beneficiary Designation . If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executives spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made to the personal representative of the Executives estate. | |
4.5 | Facility of Distribution . If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that persons property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Executives Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount. |
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5.1 | Termination for Cause . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if Executives employment with the Bank is terminated due to a Termination for Cause. | |
5.2 | Suicide or Misstatement . No benefits shall be distributed if the Executive commits suicide within two years after the Effective Date of this Agreement, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason. | |
5.3 | Removal . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act. |
6.1 | Plan Administrator Duties . This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or person(s) as the Board shall appoint. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with the Agreement. | |
6.2 | Agents . In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank. | |
6.3 | Binding Effect of Decisions . The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. | |
6.4 | Indemnity of Plan Administrator . The Bank shall indemnify and hold harmless the |
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members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. | ||
6.5 | Bank Information . To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require. | |
6.6 | Annual Statement . The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement. |
7.1 | Claims Procedure . An Executive or Beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be distributed shall make a claim for such benefits as follows: |
7.1.1 | Initiation Written Claim . The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant. | ||
7.1.2 | Timing of Plan Administrator Response . The Plan Administrator shall respond to such claimant within 90 days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. | ||
7.1.3 | Notice of Decision . If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the |
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denial is based; | |||
(c) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; | ||
(d) | An explanation of the Agreements review procedures and the time limits applicable to such procedures; and | ||
(e) | A statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
7.2 | Review Procedure . If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows: |
7.2.1 | Initiation Written Request . To initiate the review, the claimant, within 60 days after receiving the Plan Administrators notice of denial, must file with the Plan Administrator a written request for review. | ||
7.2.2 | Additional Submissions Information Access . The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits. | ||
7.2.3 | Considerations on Review . In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. | ||
7.2.4 | Timing of Plan Administrator Response . The Plan Administrator shall respond in writing to such claimant within 60 days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. | ||
7.2.5 | Notice of Decision . The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; |
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(c) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits; and | ||
(d) | A statement of the claimants right to bring a civil action under ERISA Section 502(a). |
8.1 | Amendments . This Agreement may be amended only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative or tax law, including without limitation Section 409A of the Code and any and all regulations and guidance promulgated thereunder. | |
8.2 | Plan Termination Generally . The Bank may unilaterally terminate this Agreement at any time. The benefit shall be the Accrual Balance as of the date the Agreement is terminated. Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3. | |
8.3 | Plan Terminations Under Section 409A . Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances: |
(a) | Within thirty (30) days before, or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and provided that all the Banks arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements; | ||
(b) | Upon the Banks dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Executives gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practical; or | ||
(c) | Upon the Banks termination of this and all other non-account balance plans (as referenced in Section 409A of the Code or the regulations thereunder), provided that all distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and the Bank does not adopt any new non-account balance plans for a minimum of five (5) years following the date of such termination; |
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the Bank may distribute the Deferral Account balance, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms. |
9.1 | Binding Effect . This Agreement shall bind the Executive and the Bank, and their beneficiaries, survivors, executors, administrators and transferees. | |
9.2 | No Guarantee of Employment . This Agreement is not a contract for employment. It does not give the Executive the right to remain as an employee of the Bank, nor does it interfere with the Banks right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executives right to terminate employment at any time. | |
9.3 | Non-Transferability . Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. | |
9.4 | Tax Withholding and Reporting . The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement. Executive acknowledges that the Banks sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). Further, the Bank shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder. | |
9.5 | Applicable Law . The Agreement and all rights hereunder shall be governed by the laws of the State of Maryland, except to the extent preempted by the laws of the United States of America. | |
9.6 | Unfunded Arrangement . The Executive and Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executives life or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim. | |
9.7 | Reorganization . The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term Bank as used in this Agreement shall be deemed to refer to the successor or |
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survivor bank. | ||
9.8 | Entire Agreement . This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. | |
9.9 | Interpretation . Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural. | |
9.10 | Alternative Action . In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement, the Bank or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank. | |
9.11 | Headings . Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions. | |
9.12 | Validity . In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein. | |
9.13 | Notice . Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: |
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Chief Financial Officer | |||
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Old Line Bank | |||
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P.O. Box 1890 | |||
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Waldorf, Md. 20604 |
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. | ||
Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive. | ||
9.14 | Compliance with Section 409A . This Agreement shall at all times be administered and the provisions of this Agreement shall be interpreted consistent with the requirements of Section 409A of the Code and any and all regulations thereunder, including such regulations as may be promulgated after the Effective Date of this Agreement. |
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9.15 | Rescissions . Any modification to the terms of this Agreement that would inadvertently result in an additional tax liability on the part of the Executive, shall have no effect to the extent the change in the terms of the plan is rescinded by the earlier of a date before the right is exercised (if the change grants a discretionary right) and the last day of the calendar year during which such change occurred. |
EXECUTIVE: | BANK: | |||||
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OLD LINE BANK | |||||
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/s/ Joseph E. Burnett
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By | /s/ Christine M. Rush | ||||
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Joseph E. Burnett
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Title Chief Financial Officer | |||||
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{ }
{ } |
New Designation
Change in Designation |
Primary:
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% | |||
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% | |||
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Contingent:
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% | |||
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% | |||
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| Please PRINT CLEARLY or TYPE the names of the beneficiaries. | ||
| To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement. | ||
| To name your estate as Beneficiary, please write Estate of _[your name]_ . | ||
| Be aware that none of the contingent beneficiaries will receive anything unless ALL of the primary beneficiaries predecease you. |
Name:
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Joseph E. Burnett | |||||||
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Signature:
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/s/ Joseph E. Burnett | Date: | 01/03/06 | |||||
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By:
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/s/ Christine M. Rush | |||
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Title:
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Chief Financial Officer | |||
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Early | ||||||||||||||||||||
Separation | Termination | Disability | Change in | Pre-Retirement | ||||||||||||||||
Occurring | Annual | Annual | Control Annual | Annual Death | ||||||||||||||||
After | Age | Benefit(1) | Benefit(1) | Benefit(2) | Benefit | |||||||||||||||
1/1/2006
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60 | $ | 0 | $ | 0 | $ | 18,234 | $ | 23,177 | |||||||||||
1/1/2007
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61 | $ | 4,611 | $ | 4,611 | $ | 19,145 | $ | 23,177 | |||||||||||
1/1/2008
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62 | $ | 9,223 | $ | 9,223 | $ | 20,103 | $ | 23,177 | |||||||||||
1/1/2009
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63 | $ | 13,834 | $ | 13,834 | $ | 21,108 | $ | 23,177 | |||||||||||
1/1/2010
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64 | $ | 18,446 | $ | 18,446 | $ | 22,163 | $ | 23,177 | |||||||||||
12/10/2010(3)
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65 | $ | 23,177 | $ | 23,177 | $ | 23,177 | $ | 23,177 |
(1) | Payments are made in 180 equal monthly installments commencing within 60 days following Normal Retirement Age. Refer to Section 2.2 for Early Termination, and 2.3 for Disability. | |
(2) | Payments are made in 180 equal monthly installments commencing at Separation of Service. Refer to Section 2.4 for Change in Control. | |
(3) | This is the date the Executive reaches Normal Retirement Age. |
1
OLD LINE BANK
Supplemental Life Insurance Agreement |
Exhibit 10.7 |
Whenever used in this Agreement, the following terms shall have the meanings specified: |
1.1 | Banks Interest means the benefit set forth in Section 2.1. | |
1.2 | Beneficiary means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive. | |
1.3 | Beneficiary Designation Form means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries. | |
1.4 | Board means the Board of Directors of the Bank as from time to time constituted. | |
1.5 | Code means the Internal Revenue Code of 1986, as amended. | |
1.6 | Disability means the Executive (i) is 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 not less than twelve (12) months, or (ii) is, 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 not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administrations or providers determination. | |
1.7 | Executives Interest means the benefit set forth in Section 2.2. |
1.8 | Insurer means the insurance company issuing the Policy on the life of the Executive. | |
1.9 | Net Death Proceeds means the total death proceeds of the Policy minus the greater of (i) the cash surrender value or (ii) the aggregate premiums paid by the Bank. | |
1.10 | Plan Administrator means the plan administrator described in Article 11. | |
1.11 | Policy or Policies means the individual insurance policy or policies adopted by the Bank for purposes of insuring the Executives life under this Agreement. | |
1.14 | Separation from Service means the termination of the Executives employment with the Bank for reasons other than death or Disability. Whether a Separation from Service takes place is determined based on the facts and circumstances surrounding the termination of the Executives employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if: |
(a) | the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or | ||
(b) | the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). |
2.1 | Banks Interest . The Bank shall own the Policies and shall have the right to exercise all incidents of ownership and, subject to Article 3, the Bank may terminate a Policy without the consent of the Executive. The Bank shall be the beneficiary of the remaining death proceeds of the Policies after the Executives Interest is determined according to Section 2.2 below. | |
2.2 | Executives Interest . The Executive, or the Executives assignee, shall have the right to designate the Beneficiary of an amount of death proceeds equal to seventy-five percent (75%) of the Net Death Proceeds. The Executive shall also have the right to elect and |
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change settlement options with respect to the Executives Interest by providing written notice to the Bank and the Insurer. | ||
2.3 | Forfeiture of Benefit . The Executive will forfeit his or her benefit if: (i) the Executive violates any of the provisions detailed in Article 5; (ii) the Executive becomes gainfully employed by an entity other than the Bank following a Separation from Service due to Disability; or (iii) the Executive provides written notice to the Bank declining further participation in the Agreement. |
3.1 | Insurance Policies . If the Executive is entitled to a benefit, the Bank may provide such benefit through the Policies purchased at the commencement of this Agreement, or may provide comparable insurance coverage to the Executive through whatever means the Bank deems appropriate. If the Executive waives or forfeits his or her right to the benefit, the Bank shall choose to cancel the Policy or Policies on the Executive, or may continue such coverage and become the direct beneficiary of the entire death proceeds. | |
3.2 | Offer to Purchase . If the Bank discontinues a Policy while the Executive is employed by the Bank at the date of discontinuance or while the Executive has a benefit that has not been forfeited, the Bank shall give the Executive at least thirty (30) days to purchase such Policy. The purchase price shall be the fair market value of the Policy, as determined under Treasury Reg. §1.61-22(g)(2) or any subsequent applicable authority. Such notification shall be in writing. |
4.1 | Premium Payment . The Bank shall pay all premiums due on all Policies. | |
4.2 | Economic Benefit . The Bank shall determine the economic benefit attributable to the Executive based on the life insurance premium factor for the Executives age multiplied by the aggregate death benefit payable to the Beneficiary. The life insurance premium factor is the minimum factor applicable under guidance published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any subsequent authority. | |
4.3 | Imputed Income . The Bank shall impute the economic benefit to the Executive on an annual basis, by adding the economic benefit to the Executives W-2, or if applicable, Form 1099. |
5.1 | Excess Parachute or Golden Parachute Payment . If the payments and benefits pursuant to this Agreement, either alone or together with other payments and benefits which the |
2
Executive has the right to receive from the Bank, would constitute an excess parachute payment under Section 280G of the Code, or would be a prohibited golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the appropriate federal banking agency has not given written consent to pay pursuant to 12 C.F.R. §359.4, the payments and benefits pursuant to this Agreement shall be reduced, in the manner determined by the Executive in the case of the application of Section 280G of the Code, by the amount, if any, which is the minimum necessary to result in (i) no portion of the payments and benefits under this Agreement being non-deductible to the Bank pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code, and (ii) no adverse consequence to the Bank under or pursuant to such banking regulations. All benefits payable under this Agreement shall also be subject to limitations or prohibitions imposed by subsequent changes or amendments to the cited laws and regulations except to the extent that any benefits payable under this Agreement are grandfathered or otherwise exempt or excluded from the change or amendment. | ||
5.2 | Termination for Cause . Notwithstanding any provision of this Agreement to the contrary, the Executive shall forfeit any right to a benefit under this Agreement if the Bank terminates the Executives employment for cause. Termination of the Executives employment for Cause shall mean termination because of personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order or material breach of any provision of the Agreement. For purposes of this paragraph, no act or failure to act on the Executives part shall be considered willful unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executives action or omission was in the best interest of the Bank. | |
5.3 | Removal . Notwithstanding any provision of this Agreement to the contrary, the Executives rights in the Agreement shall terminate if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act (FDIA). | |
5.4 | Suicide or Misstatement . No benefits shall be payable if the Executive commits suicide within two years after the date of this Agreement, or if the insurance company denies coverage (i) for material misstatements of fact made by the Executive on any application for life insurance purchased by the Bank, or (ii) for any other reason. |
6.1 | Beneficiary . The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefits payable under the Agreement upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other Agreement of the Bank in which the Executive participates. |
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6.2 | Beneficiary Designation; Change . The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Bank or its designated agent. The Executives beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Banks rules and procedures, as in effect from time to time. Upon the acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Bank shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Bank prior to the Executives death. | |
6.3 | Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Bank or its designated agent. | |
6.4 | No Beneficiary Designation . If the Executive dies without a valid designation of beneficiary, or if all designated Beneficiaries predecease the Executive, then the Executives surviving spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made payable to the personal representative of the Executives estate. | |
6.5 | Facility of Payment . If the Bank determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that persons property, the Bank may direct payment of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Bank may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Executive and the Executives Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount. |
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9.1 | Claims Procedure . The Executive or Beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows: |
9.1.1 | Initiation Written Claim . The claimant initiates a claim by submitting to the Bank a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant. | ||
9.1.2 | Timing of Bank Response . The Bank shall respond to such claimant within 90 days after receiving the claim. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision. | ||
9.1.3 | Notice of Decision . If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; | ||
(c) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; | ||
(d) | An explanation of the Agreements review procedures and the time limits applicable to such procedures; and | ||
(e) | A statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
9.2 | Review Procedure . If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows: |
9.2.1 | Initiation Written Request . To initiate the review, the claimant, within 60 days after receiving the Banks notice of denial, must file with the Bank a written |
5
request for review. | |||
9.2.2 | Additional Submissions Information Access . The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits. | ||
9.2.3 | Considerations on Review . In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. | ||
9.2.4 | Timing of Banks Response . The Bank shall respond in writing to such claimant within 60 days after receiving the request for review. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision. | ||
9.2.5 | Notice of Decision . The Bank shall notify the claimant in writing of its decision on review. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; | ||
(c) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits; and | ||
(d) | A statement of the claimants right to bring a civil action under ERISA Section 502(a). |
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11.1 | Plan Administrator Duties . This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or persons as the Board may choose. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with this Agreement. | |
11.2 | Agents . In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank. | |
11.3 | Binding Effect of Decisions . The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement. | |
11.4 | Indemnity of Plan Administrator . The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. | |
11.5 | Information . To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the Base Salary of the Executive, the date and circumstances of the retirement, Disability, death or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require. |
12.1 | Binding Effect . This Agreement shall bind the Executive and the Bank, their beneficiaries, survivors, executors, administrators and transferees and any Beneficiary. | |
12.2 | No Guarantee of Employment . This Agreement is not an employment policy or contract. It does not give the Executive the right to remain an Executive of the Bank, nor does it interfere with the Banks right to discharge the Executive. It also does not require the Executive to remain an Executive nor interfere with the Executives right to terminate employment at any time. |
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12.3 | Applicable Law . The Agreement and all rights hereunder shall be governed by and construed according to the laws of the State of Maryland, except to the extent preempted by the laws of the United States of America. | |
12.4 | Reorganization . The Bank shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm or person unless such succeeding or continuing company, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term Bank as used in this Agreement shall be deemed to refer to the successor or survivor company. | |
12.5 | Notice . Any notice or filing required or permitted to be given to the Bank under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: |
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification. | ||
Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive. | ||
12.6 | Entire Agreement . This Agreement, along with the Executives Beneficiary Designation Form, constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive under this Agreement other than those specifically set forth herein. |
EXECUTIVE: | BANK: | |||||
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Old Line Bank | ||||||
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/s/ Joseph E. Burnett
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By | Christine M. Rush | ||||
JOSEPH BURNETT
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Title | Chief Financial Officer |
8
OLD LINE BANK
Salary Continuation Agreement |
Exhibit 10.8 |
1.1 | Beneficiary means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive determined pursuant to Article 4. | |
1.2 | Beneficiary Designation Form means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries. | |
1.3 | Board means the Board of Directors of the Bank as from time to time constituted. | |
1.4 | Change in Control means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Section 409A of the Code and regulations thereunder. | |
1.5 | Code means the Internal Revenue Code of 1986, as amended. | |
1.6 | Disability means the Executive (i) is 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 not less than twelve (12) months, or (ii) is, 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 not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the |
Executive must submit proof to the Plan Administrator of the Social Security Administrations or providers determination. | ||
1.7 | Early Termination means Separation from Service before Normal Retirement Age for reasons other than death, Disability, Termination for Cause, or following a Change in Control. | |
1.8 | Effective Date means January 1, 2006. | |
1.9 | Normal Retirement Age means the Executive attaining age sixty-five (65). | |
1.10 | Normal Retirement Date means the later of Normal Retirement Age or Separation from Service. | |
1.11 | Plan Administrator means the plan administrator described in Article 6. | |
1.12 | Plan Year means each twelve-month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following December 31. | |
1.13 | Schedule A means the schedule attached to this Agreement and made a part hereof. Schedule A shall be updated upon a change in any of the benefits under Articles 2 or 3. | |
1.14 | Separation from Service means the termination of the Executives employment with the Bank for reasons other than death or Disability. Whether a Separation form Service takes place is determined based on the facts and circumstances surrounding the termination of the Executives employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if: |
(a) | the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or | ||
(b) | the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). |
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1.15 | Specified Employee means a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Bank if any stock of the Bank is publicly traded on an established securities market or otherwise. | |
1.16 | Termination for Cause means Separation from Service for: |
(a) | Gross negligence or gross neglect of duties to the Bank; or | ||
(b) | Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executives employment with the Bank; or | ||
(c) | Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Executives employment and resulting in a material adverse effect on the Bank. |
2.1 | Normal Retirement Benefit . Upon the Normal Retirement Date, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article. |
2.1.1 | Amount of Benefit . The annual benefit under this Section 2.1 is Fifty Six Thousand Six Hundred Fifty-Eight Dollars ($56,658). | ||
2.1.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Date. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.2 | Early Termination Benefit . Upon the Executives Early Termination, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article. |
2.2.1 | Amount of Benefit . The annual benefit under this Section 2.2 is the Early Termination Benefit set forth on Schedule A for the Plan Year in which Separation from Service occurs. | ||
2.2.2 | Distribution of Benefit . The Bank shall distribute the benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.3 | Disability Benefit . If the Executives Disability results in Separation from Service prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article. |
2
2.3.1 | Amount of Benefit . The annual benefit under this Section 2.3 is the Disability Benefit set forth on Schedule A for the Plan Year in which the Separation from Service occurs. | ||
2.3.2 | Distribution of Benefit . The Bank shall distribute the benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Executives Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. |
2.4 | Change in Control Benefit . Upon a Change in Control followed by the Executives Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article. |
2.4.1 | Amount of Benefit . The annual benefit under this Section 2.4 is the Change of Control Benefit set forth on Schedule A for the Plan Year in which the Separation from Service occurs. | ||
2.4.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing within thirty (30) days following Separation from Service. The annual benefit shall be distributed to the Executive for fifteen (15) years. | ||
2.4.3 | Excess Parachute Payment Gross-up . If any benefit payable under this Agreement would create an excise tax under the excess parachute rules of Section 280G of the Code, the Bank shall pay to the Executive an additional amount (the Gross-up) equal to: |
2.5 | Restriction on Timing of Distribution . Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.5 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following the Separation from Service shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent distributions shall be paid in the manner specified. |
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2.6 | Distributions Upon Income Inclusion Under Section 409A of the Code . Upon the inclusion of any portion of the account value into the Executives income as a result of the failure of this non-qualified deferred compensation plan to comply with the requirements of Section 409A of the Code, to the extent such tax liability can be covered by the Executives vested account value, a distribution shall be made as soon as is administratively practicable following the discovery of the plan failure. | |
2.7 | Change in Form or Timing of Distributions . For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend the Agreement to delay the timing or change the form of distributions. Any such amendment: |
(a) | may not accelerate the time or schedule of any distribution, except as provided in Section 409A of the Code and the regulations thereunder; | ||
(b) | must, for benefits distributable under Article 2, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and | ||
(c) | must take effect not less than twelve months after the amendment is executed. |
3.1 | Death During Active Service . If the Executive dies while in the active service of the Bank, the Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed in lieu of the benefits under Article 2. |
3.1.1 | Amount of Benefit . The benefit under this Section 3.1 is the benefit set forth on Schedule A for the Plan Year in which the Executives death occurs. | ||
3.1.2 | Distribution of Benefit . The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments commencing within sixty (60) days following receipt by the Bank of the Executives death certificate. The annual benefit shall be distributed to the Beneficiary for a period of fifteen (15) years. |
3.2 | Death During Distribution of a Benefit . If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive survived. | |
3.3 | Death After Separation from Service But Before Benefit Distributions Commence . If the Executive is entitled to benefit distributions under this Agreement, but dies prior to the commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit |
4
distributions shall commence within thirty (30) days following receipt by the Bank of the Executives death certificate. |
4.1 | Beneficiary . The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefit distributions under this Agreement to a Beneficiary upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates. | |
4.2 | Beneficiary Designation: Change . The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Plan Administrator or its designated agent. The Executives beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrators rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executives death. | |
4.3 | Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent. | |
4.4 | No Beneficiary Designation . If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executives spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made to the personal representative of the Executives estate. | |
4.5 | Facility of Distribution . If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that persons property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Executives Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount. |
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5.1 | Termination for Cause . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if Executives employment with the Bank is terminated due to a Termination for Cause. | |
5.2 | Suicide or Misstatement . No benefits shall be distributed if the Executive commits suicide within two years after the Effective Date of this Agreement, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason. | |
5.3 | Removal . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act. |
6.1 | Plan Administrator Duties . This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or person(s) as the Board shall appoint. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with the Agreement. | |
6.2 | Agents . In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank. | |
6.3 | Binding Effect of Decisions . The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. | |
6.4 | Indemnity of Plan Administrator . The Bank shall indemnify and hold harmless the |
6
members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. | ||
6.5 | Bank Information . To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require. | |
6.6 | Annual Statement . The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement. |
7.1 | Claims Procedure . An Executive or Beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be distributed shall make a claim for such benefits as follows: |
7.1.1 | Initiation Written Claim . The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant. | ||
7.1.2 | Timing of Plan Administrator Response . The Plan Administrator shall respond to such claimant within 90 days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. | ||
7.1.3 | Notice of Decision . If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the |
7
denial is based; | |||
(c) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; | ||
(d) | An explanation of the Agreements review procedures and the time limits applicable to such procedures; and | ||
(e) | A statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
7.2 | Review Procedure . If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows: |
7.2.1 | Initiation Written Request . To initiate the review, the claimant, within 60 days after receiving the Plan Administrators notice of denial, must file with the Plan Administrator a written request for review. | ||
7.2.2 | Additional Submissions Information Access . The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits. | ||
7.2.3 | Considerations on Review . In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. | ||
7.2.4 | Timing of Plan Administrator Response . The Plan Administrator shall respond in writing to such claimant within 60 days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. | ||
7.2.5 | Notice of Decision . The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; |
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(c) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits; and | ||
(d) | A statement of the claimants right to bring a civil action under ERISA Section 502(a). |
8.1 | Amendments . This Agreement may be amended only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative or tax law, including without limitation Section 409A of the Code and any and all regulations and guidance promulgated thereunder. | |
8.2 | Plan Termination Generally . The Bank may unilaterally terminate this Agreement at any time. The benefit shall be the Accrual Balance as of the date the Agreement is terminated. Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3. | |
8.3 | Plan Terminations Under Section 409A . Notwithstanding anything to the contrary in Section 8.2, if the Bank terminates this Agreement in the following circumstances: |
(a) | Within thirty (30) days before, or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following such termination of the Agreement and provided that all the Banks arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements; | ||
(b) | Upon the Banks dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Executives gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practical; or | ||
(c) | Upon the Banks termination of this and all other non-account balance plans (as referenced in Section 409A of the Code or the regulations thereunder), provided that all distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and the Bank does not adopt any new non-account balance plans for a minimum of five (5) years following the date of such termination; |
9
the Bank may distribute the Deferral Account balance, determined as of the date of the termination of the Agreement, to the Executive in a lump sum subject to the above terms. |
9.1 | Binding Effect . This Agreement shall bind the Executive and the Bank, and their beneficiaries, survivors, executors, administrators and transferees. | |
9.2 | No Guarantee of Employment . This Agreement is not a contract for employment. It does not give the Executive the right to remain as an employee of the Bank, nor does it interfere with the Banks right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executives right to terminate employment at any time. | |
9.3 | Non-Transferability . Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. | |
9.4 | Tax Withholding and Reporting . The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Section 409A of the Code and regulations thereunder, from the benefits provided under this Agreement. Executive acknowledges that the Banks sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). Further, the Bank shall satisfy all applicable reporting requirements, including those under Section 409A of the Code and regulations thereunder. | |
9.5 | Applicable Law . The Agreement and all rights hereunder shall be governed by the laws of the State of Maryland, except to the extent preempted by the laws of the United States of America. | |
9.6 | Unfunded Arrangement . The Executive and Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executives life or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim. | |
9.7 | Reorganization . The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm, or person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term Bank as used in this Agreement shall be deemed to refer to the success or |
10
survivor bank. | ||
9.8 | Entire Agreement . This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. | |
9.9 | Interpretation . Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural. | |
9.10 | Alternative Action . In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement, the Bank or Plan Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank. | |
9.11 | Headings . Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions. | |
9.12 | Validity . In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein. | |
9.13 | Notice . Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: |
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. | ||
Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive. | ||
9.14 | Compliance with Section 409A . This Agreement shall at all times be administered and the provisions of this Agreement shall be interpreted consistent with the requirements of Section 409A of the Code and any and all regulations thereunder, including such regulations as may be promulgated after the Effective Date of this Agreement. |
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9.15 | Rescissions . Any modification to the terms of this Agreement that would inadvertently result in an additional tax liability on the part of the Executive, shall have no effect to the extent the change in the terms of the plan is rescinded by the earlier of a date before the right is exercised (if the change grants a discretionary right) and the last day of the calendar year during which such change occurred. |
EXECUTIVE: | BANK: | |||||
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OLD LINE BANK | ||||||
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/s/ Christine M. Rush
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By | /s/ James W. Cornelsen | ||||
Christine Rush
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Title | President |
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Primary:
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% | ||||||
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% | ||||||
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Contingent:
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| Please PRINT CLEARLY or TYPE the names of the beneficiaries. | ||
| To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement. | ||
| To name your estate as Beneficiary, please write Estate of _[your name]_ . | ||
| Be aware that none of the contingent beneficiaries will receive anything unless ALL of the primary beneficiaries predecease you. |
Name:
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Christine M. Rush | |||
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Signature:
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/s/ Christine M. Rush | Date: 01/03/06 | ||
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By:
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/s/ James W. Cornelsen | |||
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Title:
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President |
Early Termination | Disability | Change in | Pre-Retirement | |||||||||||||||||
Separation | Annual Benefit | Annual Benefit | Control Annual | Annual Death | ||||||||||||||||
Occurring After | Age | (1) | (1) | Benefit (2) | Benefit | |||||||||||||||
1/1/2006
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49 | $ | 0 | $ | 0 | $ | 27,033 | $ | 56,658 | |||||||||||
1/1/2007
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50 | $ | 3,696 | $ | 3,696 | $ | 28,384 | $ | 56,658 | |||||||||||
1/1/2008
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51 | $ | 7,392 | $ | 7,392 | $ | 29,804 | $ | 56,658 | |||||||||||
1/1/2009
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52 | $ | 11,088 | $ | 11,088 | $ | 31,294 | $ | 56,658 | |||||||||||
1/1/2010
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53 | $ | 14,784 | $ | 14,784 | $ | 32,858 | $ | 56,658 | |||||||||||
1/1/2011
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54 | $ | 18,480 | $ | 18,480 | $ | 34,501 | $ | 56,658 | |||||||||||
1/1/2012
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55 | $ | 22,176 | $ | 22,176 | $ | 36,226 | $ | 56,658 | |||||||||||
1/1/2013
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56 | $ | 25,872 | $ | 25,872 | $ | 38,038 | $ | 56,658 | |||||||||||
1/1/2014
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57 | $ | 29,568 | $ | 29,568 | $ | 39,940 | $ | 56,658 | |||||||||||
1/1/2015
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58 | $ | 33,264 | $ | 33,264 | $ | 41,937 | $ | 56,658 | |||||||||||
1/1/2016
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59 | $ | 36,960 | $ | 36,960 | $ | 44,033 | $ | 56,658 | |||||||||||
1/1/2017
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60 | $ | 40,656 | $ | 40,656 | $ | 46,235 | $ | 56,658 | |||||||||||
1/1/2018
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61 | $ | 44,352 | $ | 44,352 | $ | 48,547 | $ | 56,658 | |||||||||||
1/1/2019
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62 | $ | 48,048 | $ | 48,048 | $ | 50,974 | $ | 56,658 | |||||||||||
1/1/2020
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63 | $ | 51,744 | $ | 51,744 | $ | 53,523 | $ | 56,658 | |||||||||||
1/1/2021
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64 | $ | 55,440 | $ | 55,440 | $ | 56,199 | $ | 56,658 | |||||||||||
3/6/2021 (3)
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65 | $ | 56,658 | $ | 56,658 | $ | 56,658 | $ | 56,658 |
(1) | Payments are made in 180 equal monthly installments commencing within 60 days following Normal Retirement Age. Refer to Section 2.2 for Early Termination, and 2.3 for Disability. | |
(2) | Payments are made in 180 equal monthly installments commencing at Separation of Service. Refer to Section 2.4 for Change in Control. | |
(3) | This is the date the Executive reaches Normal Retirement Age. |
1
OLD LINE BANK
Supplemental Life Insurance Agreement |
Exhibit 10.9 |
Whenever used in this Agreement, the following terms shall have the meanings specified: | ||
1.1 | Banks Interest means the benefit set forth in Section 2.1. | |
1.2 | Beneficiary means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive. | |
1.3 | Beneficiary Designation Form means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries. | |
1.4 | Board means the Board of Directors of the Bank as from time to time constituted. | |
1.5 | Code means the Internal Revenue Code of 1986, as amended. | |
1.6 | Disability means the Executive (i) is 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 not less than twelve (12) months, or (ii) is, 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 not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administrations or providers determination. | |
1.7 | Executives Interest means the benefit set forth in Section 2.2. |
1.8 | Insurer means the insurance company issuing the Policy on the life of the Executive. | |
1.9 | Net Death Proceeds means the total death proceeds of the Policy minus the greater of (i) the cash surrender value or (ii) the aggregate premiums paid by the Bank. | |
1.10 | Plan Administrator means the plan administrator described in Article 11. | |
1.11 | Policy or Policies means the individual insurance policy or policies adopted by the Bank for purposes of insuring the Executives life under this Agreement. | |
1.14 | Separation from Service means the termination of the Executives employment with the Bank for reasons other than death or Disability. Whether a Separation from Service takes place is determined based on the facts and circumstances surrounding the termination of the Executives employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank following such termination. A termination of employment will not be considered a Separation from Service if: |
(a) | the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned during the final three full calendar years of employment (or, if less, such lesser period), or | ||
(b) | the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). |
2.1 | Banks Interest . The Bank shall own the Policies and shall have the right to exercise all incidents of ownership and, subject to Article 3, the Bank may terminate a Policy without the consent of the Executive. The Bank shall be the beneficiary of the remaining death proceeds of the Policies after the Executives Interest is determined according to Section 2.2 below. | |
2.2 | Executives Interest . The Executive, or the Executives assignee, shall have the right to designate the Beneficiary of an amount of death proceeds equal to thirty percent (30%) of the Net Death Proceeds. The Executive shall also have the right to elect and change |
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settlement options with respect to the Executives Interest by providing written notice to the Bank and the Insurer. | ||
2.3 | Forfeiture of Benefit . The Executive will forfeit his or her benefit if: (i) the Executive violates any of the provisions detailed in Article 5; (ii) the Executive becomes gainfully employed by an entity other than the Bank following a Separation from Service due to Disability; or (iii) the Executive provides written notice to the Bank declining further participation in the Agreement. |
3.1 | Insurance Policies . If the Executive is entitled to a benefit, the Bank may provide such benefit through the Policies purchased at the commencement of this Agreement, or may provide comparable insurance coverage to the Executive through whatever means the Bank deems appropriate. If the Executive waives or forfeits his or her right to the benefit, the Bank shall choose to cancel the Policy or Policies on the Executive, or may continue such coverage and become the direct beneficiary of the entire death proceeds. | |
3.2 | Offer to Purchase . If the Bank discontinues a Policy while the Executive is employed by the Bank at the date of discontinuance or while the Executive has a benefit that has not been forfeited, the Bank shall give the Executive at least thirty (30) days to purchase such Policy. The purchase price shall be the fair market value of the Policy, as determined under Treasury Reg. §1.61-22(g)(2) or any subsequent applicable authority. Such notification shall be in writing. |
4.1 | Premium Payment . The Bank shall pay all premiums due on all Policies. | |
4.2 | Economic Benefit . The Bank shall determine the economic benefit attributable to the Executive based on the life insurance premium factor for the Executives age multiplied by the aggregate death benefit payable to the Beneficiary. The life insurance premium factor is the minimum factor applicable under guidance published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any subsequent authority . | |
4.3 | Imputed Income . The Bank shall impute the economic benefit to the Executive on an annual basis, by adding the economic benefit to the Executives W-2, or if applicable, Form 1099. |
5.1 | Excess Parachute or Golden Parachute Payment . If the payments and benefits pursuant to this Agreement, either alone or together with other payments and benefits which the |
2
Executive has the right to receive from the Bank, would constitute an excess parachute payment under Section 280G of the Code, or would be a prohibited golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the appropriate federal banking agency has not given written consent to pay pursuant to 12 C.F.R. §359.4, the payments and benefits pursuant to this Agreement shall be reduced, in the manner determined by the Executive in the case of the application of Section 280G of the Code, by the amount, if any, which is the minimum necessary to result in (i) no portion of the payments and benefits under this Agreement being non-deductible to the Bank pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code, and (ii) no adverse consequence to the Bank under or pursuant to such banking regulations. All benefits payable under this Agreement shall also be subject to limitations or prohibitions imposed by subsequent changes or amendments to the cited laws and regulations except to the extent that any benefits payable under this Agreement are grandfathered or otherwise exempt or excluded from the change or amendment. | ||
5.2 | Termination for Cause . Notwithstanding any provision of this Agreement to the contrary, the Executive shall forfeit any right to a benefit under this Agreement if the Bank terminates the Executives employment for cause. Termination of the Executives employment for Cause shall mean termination because of personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order or material breach of any provision of the Agreement. For purposes of this paragraph, no act or failure to act on the Executives part shall be considered willful unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executives action or omission was in the best interest of the Bank. | |
5.3 | Removal . Notwithstanding any provision of this Agreement to the contrary, the Executives rights in the Agreement shall terminate if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act (FDIA). | |
5.4 | Suicide or Misstatement . No benefits shall be payable if the Executive commits suicide within two years after the date of this Agreement, or if the insurance company denies coverage (i) for material misstatements of fact made by the Executive on any application for life insurance purchased by the Bank, or (ii) for any other reason. |
6.1 | Beneficiary . The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefits payable under the Agreement upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other Agreement of the Bank in which the Executive participates. |
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6.2 | Beneficiary Designation; Change . The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Bank or its designated agent. The Executives beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Banks rules and procedures, as in effect from time to time. Upon the acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Bank shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Bank prior to the Executives death. | |
6.3 | Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Bank or its designated agent. | |
6.4 | No Beneficiary Designation . If the Executive dies without a valid designation of beneficiary, or if all designated Beneficiaries predecease the Executive, then the Executives surviving spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made payable to the personal representative of the Executives estate. | |
6.5 | Facility of Payment . If the Bank determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that persons property, the Bank may direct payment of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Bank may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Executive and the Executives Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount. |
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9.1 | Claims Procedure . The Executive or Beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows: |
9.1.1 | Initiation Written Claim . The claimant initiates a claim by submitting to the Bank a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant. | ||
9.1.2 | Timing of Bank Response . The Bank shall respond to such claimant within 90 days after receiving the claim. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision. | ||
9.1.3 | Notice of Decision . If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; | ||
(c) | A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; | ||
(d) | An explanation of the Agreements review procedures and the time limits applicable to such procedures; and | ||
(e) | A statement of the claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
9.2 | Review Procedure . If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows: |
9.2.1 | Initiation Written Request . To initiate the review, the claimant, within 60 days after receiving the Banks notice of denial, must file with the Bank a written |
5
request for review. | |||
9.2.2 | Additional Submissions Information Access . The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits. | ||
9.2.3 | Considerations on Review . In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. | ||
9.2.4 | Timing of Banks Response . The Bank shall respond in writing to such claimant within 60 days after receiving the request for review. If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision. | ||
9.2.5 | Notice of Decision . The Bank shall notify the claimant in writing of its decision on review. The Bank shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: |
(a) | The specific reasons for the denial; | ||
(b) | A reference to the specific provisions of the Agreement on which the denial is based; | ||
(c) | A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimants claim for benefits; and | ||
(d) | A statement of the claimants right to bring a civil action under ERISA Section 502(a). |
6
11.1 | Plan Administrator Duties . This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or persons as the Board may choose. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with this Agreement. | |
11.2 | Agents . In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank. | |
11.3 | Binding Effect of Decisions . The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement. | |
11.4 | Indemnity of Plan Administrator . The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. | |
11.5 | Information . To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the Base Salary of the Executive, the date and circumstances of the retirement, Disability, death or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require. |
12.1 | Binding Effect . This Agreement shall bind the Executive and the Bank, their beneficiaries, survivors, executors, administrators and transferees and any Beneficiary. | |
12.2 | No Guarantee of Employment . This Agreement is not an employment policy or contract. It does not give the Executive the right to remain an Executive of the Bank, nor does it interfere with the Banks right to discharge the Executive. It also does not require the Executive to remain an Executive nor interfere with the Executives right to terminate employment at any time. |
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12.3 | Applicable Law . The Agreement and all rights hereunder shall be governed by and construed according to the laws of the State of Maryland, except to the extent preempted by the laws of the United States of America. | |
12.4 | Reorganization . The Bank shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm or person unless such succeeding or continuing company, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term Bank as used in this Agreement shall be deemed to refer to the successor or survivor company. | |
12.5 | Notice . Any notice or filing required or permitted to be given to the Bank under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: |
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification. | ||
Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive. | ||
12.6 | Entire Agreement . This Agreement, along with the Executives Beneficiary Designation Form, constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive under this Agreement other than those specifically set forth herein. |
EXECUTIVE: | BANK: | |||||
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Old Line Bank | ||||||
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/s/ Christine M. Rush
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By | /s/ James E. Cornelsen | ||||
Christine Rush
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Title | President |
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