On August 12, 1993, Union Trust Company (the "Bank"), a wholly-owned subsidiary of Union Bankshares Company, entered into deferred compensation agreements (the "Agreements") with certain of its executive employees, including Mr. Peter A. Blyberg, President and Chief Executive Officer, Mr. John P. Lynch, Executive Vice President, and Ms. Rebecca J. Sargent, Senior Vice President and Senior Financial Services Officer, pursuant to which, subject to continued employment with the Bank and certain other conditions, such executive employees were entitled to receive certain retirement and disability benefits. Pursuant to the Agreements with the Bank, Mr. Blyberg, Mr. Lynch, and Ms. Sargent were entitled to receive monthly payments of $4,152.17, $2,174.50, and $2,113.00, respectively, for a period of ten years following retirement after reaching the normal retirement age of 65. This amount was originally designed to approximate 70% of each executive's final salary (as computed u sing prior year averages with offsets for Bank contributions to other retirement plans for these executives) as of the date on which the Agreements were executed. Under the terms of the Agreements, Mr. Blyberg, Mr. Lynch and Ms. Sargent could also elect to retire early after reaching the age of 60 years, in which event he or she would be entitled to receive a proportionately reduced monthly benefit. The Agreements also contained other death and disability benefits. A copy of a form of the Agreement is attached as Exhibit 10.2. |
On December 23, 1999, the Bank amended the Agreements such that each executive would be entitled to receive, at the executive's normal retirement date, 70% of his or her final salary as determined by the average of the highest three years of salary from the five year period prior to retirement, for a period of fifteen years following either death or retirement after reaching the age of 65 years, whichever occurred first. Under the amended Agreements, Mr. Blyberg, Mr. Lynch and Ms. Sargent may elect to retire early after reaching the age of 60 years, in which event he or she would be entitled to receive a proportionately reduced monthly benefit. In addition to the foregoing benefits, under the terms of the amended Agreements, in the event that Mr. Blyberg or Mr. Lynch is permanently disabled prior to attaining the age of 64 years, he would be entitled to receive a disability benefit in the amount of $2,000 and $1,500, respectively, per month from the date of the disabili ty until reaching the age of 65. Upon reaching age 65, he would be entitled to receive the deferred compensation benefit described above. The obligations of the Bank under these amended Agreements is unfunded, but the Bank has purchased insurance contracts on the lives of all covered employees in amounts which are estimated to be sufficient to fund all amounts payable under the amended Agreements. A copy of a form of amendment to the Agreements is attached as Exhibit 10.6. |
| | 10.2 | | Form of Deferred Compensation Agreement between Union Trust Company and each of Mr. Peter A. Blyberg, President and Chief Executive Officer, Mr. John P. Lynch, Executive Vice President, |
