FIRST AMENDMENT TO SALARY CONTINUATION AGREEMENT

EX-10.22(A) 3 v436109_ex10-22a.htm EXHIBIT 10.22(A)

 

Exhibit 10.22(a)

 

FIRST AMENDMENT TO

SALARY CONTINUATION AGREEMENT

 

THIS AMENDMENT (the “Amendment”) is adopted March 29, 2016, by First South Bank, located in Washington, North Carolina (the “Employer”), and Scott C. McLean (the “Executive”).

 

The Employer and the Executive executed a Salary Continuation Agreement dated June 3, 2014 (the “Agreement”) which provides deferred compensation benefits to the Executive under certain circumstances. The parties 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 Employer and the Executive adopt the following amendments to the Agreement:

 

Section 2.1 of the Agreement shall be deleted and replaced by the following:

 

2.1           Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of Twenty-Seven Thousand Dollars ($27,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing for fifteen (15) years, subject to the conditions and limitations hereinafter set forth.

 

Sections 2.4, 2.5 and 2.6 of the Agreement shall be deleted and replaced by the following:

 

2.4           Change in Control Benefit. If a Change in Control occurs, followed within twenty-four (24) months by Separation of Service prior to Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of Twenty-Seven Thousand Dollars ($27,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Normal Retirement Age and continuing for fifteen (15) years.

 

2.5           Death Prior to Separation from Service and Disability. In the event the Executive dies prior to Separation from Service and Disability, the Employer shall pay the Beneficiary an annual benefit in the amount of Twenty-Seven Thousand Dollars ($27,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following the Executive’s death and continuing for fifteen (15) years.

 

 

 

  

2.6           Death after Separation from Service or Disability and before Normal Retirement Age. In the event the Executive dies after Separation from Service or Disability, and before Normal Retirement Age, the Employer shall pay the Beneficiary an annual benefit in the amount of Twenty-Seven Thousand Dollars ($27,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following the Executive’s death and continuing for fifteen (15) years.

 

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 Employer have executed this Amendment as indicated below:

 

Executive   Employer
       
/s/ Scott C. McLean   By: /s/ L. Steven Lee
    Its: Compensation Committee Chairman

 

 

 

  

Salary Continuation Plan

Schedule A - Exhibit 10.22(a)

  

Scott McLean                   
Birth Date:  xx/xx/1964     Early Termination   Disability   Change in Control   Death 

Plan Anniversary Date: Dec. 31

Normal Retirement Date:
05/11/2029, Age 65

Normal Retirement Payment:
Monthly for 15 Years

      Amount Payable Monthly
for 15 Years Upon
Separation
   Amount Payable Monthly
for 15 Years Upon
Separation
   Amount Payable Lump
Sum Upon Death
 
Values As Of  Age  Annual Benefit 1   Annual Benefit 1,2   Annual Benefit 1,2   Annual Benefit 1,2 
                        
4/1/2016  51   0    3,104    27,000    27,000 
12/31/2016  52   0    4,927    27,000    27,000 
12/31/2017  53   0    7,253    27,000    27,000 
12/31/2018  54   9,466    9,466    27,000    27,000 
12/31/2019  55   11,572    11,572    27,000    27,000 
12/31/2020  56   13,575    13,575    27,000    27,000 
12/31/2021  57   15,480    15,480    27,000    27,000 
12/31/2022  58   17,293    17,293    27,000    27,000 
12/31/2023  59   19,017    19,017    27,000    27,000 
12/31/2024  60   20,658    20,658    27,000    27,000 
12/31/2025  61   22,219    22,219    27,000    27,000 
12/31/2026  62   23,703    23,703    27,000    27,000 
12/31/2027  63   25,116    25,116    27,000    27,000 
12/31/2028  64   26,460    26,460    27,000    27,000 
5/11/2029  65   27,000    27,000    27,000    27,000 

 

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

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

2 Note that accounting rules may require an additional accrual at the time this benefit is triggered.

 

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.

 

Scott McLean:   /s/ Scott McLean   By: /s/ L. Steven Lee

 

Date: 3/29/16   Title: Chairman Compensation Committee

 

        Date:  3/29/16