FIRST AMENDMENT TO THEBANK OF THE JAMES SALARY CONTINUATION AGREEMENT

Contract Categories: Human Resources - Salary Continuation Agreements
EX-10.2 3 d239503dex102.htm EX-10.2 EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO

THE BANK OF THE JAMES

SALARY CONTINUATION AGREEMENT

THIS AMENDMENT (the “Amendment”) is adopted October 1st, 2016, by and between Bank of the James (the “Bank”), and J. Todd Scruggs (the “Executive”).

The Bank and the Executive executed a Salary Continuation Agreement August 6, 2009 (the “Agreement”) which provides deferred compensation benefits to the Executive under certain circumstances. The Bank and the Executive now wish to amend the Agreement to increase the benefits provided pursuant to the Agreement. The parties agree and acknowledge that this Amendment (i) shall be interpreted in accordance with Internal Revenue Code Section 409A and (ii) increases the amount of benefits provided under the Agreement, but does not change the payment schedule thereunder.

NOW, THEREFORE, the Bank and the Executive adopt the following amendments to the Agreement:

Section 2.1.1 of the Agreement shall be deleted in its entirety and replaced with the following.

2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is One Hundred Seventy Thousand Two Hundred Sixty-Four Dollars ($170,484).

Section 2.2.1 of the Agreement shall be deleted in its entirety and replaced with the following.

2.2.1 Amount of Benefit. The lump benefit under this Section 2.2 is the Early Termination benefit set forth on Schedule A for the end of the Plan Year immediately before Separation from Service.

Section 2.3.1 of the Agreement shall be deleted in its entirety and replaced with the following.

2.3.1 Amount of Benefit. The lump sum benefit under this Section 2.3 is the Disability benefit set forth on Schedule A for the end of the Plan Year immediately before Disability.

Section 2.4.1 of the Agreement shall be deleted in its entirety and replaced with the following.

2.4.1 Amount of Benefit. The lump sum benefit under this Section 2.4 is the Change in Control benefit set forth on Schedule A for the end of the Plan Year immediately before Separation from Service.

Section 3.1.1 of the Agreement shall be deleted in its entirety and replaced with the following.

3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is the Death benefit set forth on Schedule A for the end of the Plan Year immediately before the Executive’s death.

Section 8.3 of the Agreement shall be deleted in its entirety and replaced with the following.

8.3 Effect of Complete Termination. Notwithstanding anything to the contrary in Section 8.2, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely terminate and liquidate the Agreement. In the event of a complete termination under subsection (a) or (c) below, the Employer shall pay the Executive the Accrued Benefit. In the event of a complete termination under subsection (b) below, the Employer shall pay the Executive the benefit described in Section 2.4. Such complete termination of the Agreement shall occur only under the following circumstances and conditions.

(a) Corporate Dissolution or Bankruptcy. The Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (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 practicable.

(b) Change in Control. The Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single plan under Treasury Regulations §1.409A-l(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable action to terminate the arrangements.

(c) Discretionary Termination. The Employer may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Employer; (ii) all arrangements sponsored by the Employer and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-l(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Employer takes the irrevocable action to

terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Employer takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-l(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Employer takes the irrevocable action to terminate this Agreement.

The Schedule A originally attached to the Agreement shall be replaced by the Schedule A attached hereto.

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have executed this Amendment as indicated below:

 

Executive         Bank  
      By:  
        Its:   President & CEO

Salary Continuation Agreement

Schedule A

J. Todd Scruggs

 

Birth Date: xx/xx/1967

Plan Anniversary Date:

Dec. 31

Normal Retirement Date:

12/9/2032, Age 65

Normal Retirement Payment:

Monthly for 15 Years

      Early Termination
Amount Payable In a Lump
Sum at Separation of
Service		      Disability
Amount Payable In a Lump
Sum at Normal Retirement
Age		      Change in Control
Amount Payable In a Lump
Sum at Separation of
Service		      Death
Amount Payable Monthly
for 15 Years Upon Death		  
           

Values As Of

    Age      Lump Sum Benefit      Lump Sum Benefit      Lump Sum Benefit      Annual Benefit 1  

10/1/2016

      48         209,291         553,518         1,445,764         170,484   

12/31/2016

      49         222,881         580,706         1,456,155         170,484   

12/31/2017

      50         279,321         685,479         1,466,961         170,484   

12/31/2018

      51         339,242         784,165         1,478,200         170,484   

12/31/2019

      52         402,858         877,118         1,489,888         170,484   

12/31/2020

      53         470,399         964,671         1,502,043         170,484   

12/31/2021

      54         542,105         1,047,138         1,514,685         170,484   

12/31/2022

      55         618,234         1,124,814         1,527,833         170,484   

12/31/2023

      56         699,059         1,197,977         1,541,506         170,484   

12/31/2024

      57         784,869         1,266,890         1,555,727         170,484   

12/31/2025

      58         875,971         1,331,799         1,570,516         170,484   

12/31/2026

      59         972,692         1,392,938         1,585,896         170,484   

12/31/2027

      60         1,075,379         1,450,524         1,601,892         170,484   

12/31/2028

      61         1,184,399         1,504,766         1,618,528         170,484   

12/31/2029

      62         1,300,143         1,555,856         1,635,829         170,484   

12/31/2030

      63         1,423,026         1,603,978         1,653,823         170,484   

12/31/2031

      64         1,553,488         1,649,304         1,672,535         170,484   

12/9/2032

      65         1,691,997         1,691,997         1,691,997         170,484   

The first line represents the plan values as of October 1, 2016.

 

1  The annual benefit amount will be distributed in 12 equal monthly payments for a total of 180 monthly payments.

Salary Continuation Agreement

Schedule A

IF THERE IS A CONFLICT BETWEEN THIS SCHEDULE A AND THE AGREEMENT, THE TERMS AND PROVISIONS OF THE AGREEMENT SHALL PREVAIL. IF A TRIGGERING EVENT OCCURS, REFER TO THE AGREEMENT TO DETERMINE THE ACTUAL BENEFIT AMOUNT BASED ON THE DATE OF THE EVENT.

 

J. Todd Scruggs       By  
Date 10-16-18       Title   President & CEO
      Date   October 18, 2016