Exhibit 10(h)
PEOPLES BANK
DIRECTORS' AND OFFICERS' DEFERRAL PLAN
By a vote of the Peoples Bank Board of Directors, (hereinafter referred to as
the, "Bank") on the 18th day of December, 2001, the Bank has established the
Peoples Bank Directors' and Officers' Deferral Plan (hereinafter referred to as
the, "Benefit Plan") to allow eligible Directors and Officers the opportunity to
participate in the Plan and defer all or a portion of their fees or salary in
accordance therewith;
It is the intent of the Bank that this Benefit Plan be considered an
unfunded arrangement maintained primarily to provide supplemental retirement
benefits, and to be considered a non-qualified benefit plan for purposes of the
Employee Retirement Security Act of 1974, as amended ("ERISA").
I. ELIGIBILITY
Those individuals selected by the Board of Directors and designated in
resolutions of the Board and members of the Board of Directors shall be
eligible to become a participant in this Benefit Plan (hereinafter referred
to as the, "Participant").
II. FEES AND COMPENSATION
The fees covered under this Benefit Plan shall be any and all amounts paid
to the Participant for the Participant's services, including but not
limited to annual fees, meeting fees, and committee fees. Participants may
elect to defer no more than one hundred percent (100%) of fees and
compensation. The deferred fees covered under this Benefit Plan shall be
credited to the Participant subject to the election requirement of
Subparagraph III (A) hereinbelow.
III. DEFERRED COMPENSATION
A. Election of Participant's Deferred Compensation:
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The Participant shall at the same time as entering this Benefit Plan
file a written statement with the Bank notifying the Bank as to the
percent (%) or dollar amount of fees and compensation as defined in
Paragraph II that are to be deferred and the actual investments [as
defined in Subparagraph VI (G)] (hereinafter referred to as the,
"Election Form"). A copy of the said Election Form is attached hereto
and marked as Exhibit "A-1". The election to defer fees and
compensation may only be
made for fees and compensation not yet earned as of the date of said
election. Signed written statements filed under this section, unless
modified or revoked, shall be valid for all succeeding years. Any
modification or revocation of a signed written statement must be in
writing, made one (1) year prior to receiving benefits hereunder, and
shall be effective for calendar years succeeding the year in which the
modification or revocation is made.
B. Payment of Participant's Deferred Compensation:
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At all times, the Participant shall be one hundred percent (100%)
vested in the Participant's Deferred Compensation Account [as defined
in Subparagraph IV (A)(i)]. Payment of the Participant's Deferred
Account balance shall commence on the first day of the calendar month
following the end of the Participant's term of office due to
resignation, removal, failure to be re-elected, retirement, or
hardship as further set forth hereinbelow, and shall continue, if
applicable, as set forth in the Participant's Election Form.
(i) Retirement: Retirement age for Directors and Officers shall be
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age seventy (70) or such other date as the Participant may
actually retire.
(ii) Early Withdrawal: The Bank shall permit early withdrawals under
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certain circumstances. The Participant may submit an application
for an in-service early withdrawal to the Board of Directors. If,
in the discretion of the Board, the Participant is permitted to
take an early withdrawal, the Board shall cause the Trustee to
pay an in-service distribution to such Participant from the
Participant's Account. Such distribution shall be paid in a
single-sum cash payment as soon as administratively feasible,
after the Board determines that the Participant is permitted to
take an early withdrawal. The amount of such single-sum cash
payment shall be limited to the amount reasonably necessary to
meet the Participant's requirements resulting from any reason for
an early withdrawal.
C. Investment of Participant's Deferred Compensation:
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The Participant shall at the same time as entering this Benefit Plan
notifying the Bank on the Election Form as to the percent (%) of
deferred compensation that is to be allocated among the "actual
investment" choices as defined in Subparagraph VI (G) herein. The
Participant may make changes to the allocation of their "actual
investments" quarterly.
D. Bank Contributions:
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The Bank may make matching or other contributions to this Benefit Plan
for the benefit of the Participant from time to time at the discretion
of the Bank. The Participant shall be one hundred percent (100%)
vested in the Bank's Contributions
hereunder.
E. Payment of Bank's Contributions:
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The vested amounts in the Participant's Deferred Compensation Account
attributed to bank contributions shall be paid under the same terms
and conditions as payment of the Participant's deferred compensation
[Subparagraph III (B)].
F. Investment of Bank's Contribution to the Participant's Deferred
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Compensation Account:
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The Bank's contribution to the Participant's Deferred Compensation
Account, if any, shall be invested under the same terms and conditions
as the investment of the Participant's Deferred Compensation
[Subparagraph III (C)].
IV. PARTICIPANT'S DEFERRED COMPENSATION ACCOUNT
AND RABBI TRUST
A. Rabbi Trust:
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The Bank shall establish a Rabbi Trust for the Benefit Plan. The Bank
shall pay all deferral amounts and matching contributions, if any, to
the Rabbi Trust. Said Trustee shall make actual investments and
payments in accordance with this Benefit Plan.
(i) Participant's Deferred Compensation Account:
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The Trustee shall establish and maintain an account on behalf of
each Participant. A Participant's Account shall be credited with
(i) the amount of Fees and Compensation the Participant elects to
defer under the Election Form, (ii) other Bank Contributions, if
any, and (iii) earnings or losses attributable to the Account.
Each Account of a Participant shall be maintained until the value
thereof has been distributed to or on behalf of such Participant
or the Participant's beneficiary(ies). The value of said account
shall be calculated quarterly.
V. DEATH OF DIRECTOR
A. Prior to Commencement of Payments:
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In the event of the death of the Participant prior to commencement of
payments, within thirty (30) days after the Participant's death, the
Participant's Deferred Compensation Account balance as of the date of
death shall be paid as set forth in the Election Form, or in a lump
sum, at the discretion of the Bank, to such individual or individuals
as the Participant may have designated in writing and filed with the
Bank. In the event no designation is made, the Participant's account
balance shall be paid as set forth herein to the duly qualified
executor or administrator of the Participant's estate.
B. Subsequent to Commencement of Payments:
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In the event of the death of the Participant after commencement of
payments but prior to the Participant receiving all payments due the
Participant under this Benefit Plan, within thirty (30) days after the
Participant's death, the remaining Deferred Compensation Account
balance as of the date of death shall be paid as set forth in the
Election Form, or in a lump sum, at the discretion of the Bank, to
such individual or individuals as the Participant may have designated
in writing and filed with the Bank. In the event no designation is
made, the Participant's account balance shall be paid as set forth
herein to the duly qualified executor or administrator of the
Participant's estate.
VI. MISCELLANEOUS
A. Amendment or Revocation:
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It is understood that, during the lifetime of the Participant, this
Benefit Plan may be amended or revoked at any time or times, in whole
or in part, by the mutual written consent of the Participant, the
Bank, and the Trustee.
B. Gender:
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Whenever in this Benefit Plan words are used in the masculine or
neuter gender, they shall be read and construed as in the masculine,
feminine or neuter gender, whenever they should so apply.
C. Effect on Other Bank Benefit Plans:
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Nothing contained in this Benefit Plan shall affect the right of the
Participant to participate in or be covered by any qualified or
non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part
of the Bank's existing or future compensation structure.
D. Headings:
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Headings and subheadings in this Benefit Plan are inserted for
reference and convenience only and shall not be deemed a part of this
Benefit Plan.
E. Partial Invalidity:
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If any term, provision, covenant, or condition of this Benefit Plan is
determined by an arbitrator or a court, as the case may be, to be
invalid, void, or unenforceable, such determination shall not render
any other term, provision, covenant, or condition invalid, void, or
unenforceable, and this Benefit Plan shall remain in full force and
effect notwithstanding such partial invalidity.
F. Continuation as Participant:
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Neither this Benefit Plan nor the payments of any benefits thereunder
shall be construed as giving to the Participant any right to be
retained as a member of the Board of Directors of the Bank.
G. Actual Investments:
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Each Participant will be allowed to select from a restricted list the
funds to be used to determine the "investment allocation" of their
Deferred Compensation Account. The performance of the deemed
investments will be used to determine the earnings or losses to credit
to the Participant's Deferred Compensation Account. The Participant
will be allowed to change their investment allocation quarterly.
VII. CHANGE OF CONTROL
The Participant shall be one hundred percent (100%) vested in all
benefits provided in this Benefit Plan upon a Change of Control. A
Change of Control shall be as defined in Subsection XIII (d) in the
Rabbi Trust for the Peoples Bank Directors' and Officers' Deferral
Plan.
VIII. ADMINISTRATION AND CLAIMS
A. Plan Administrator:
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The Plan Administrator of this Benefit Plan shall be the Peoples Bank
until its resignation or removal by the Board. As Plan Administrator,
the Peoples Bank shall be responsible for the management and
administration of this Benefit Plan. The Plan Administrator may
delegate to others certain aspects of the management and operation
responsibilities of this Benefit Plan including the employment of
advisors and the delegation of ministerial duties to qualified
individuals.
B. Claims Procedure and Arbitration:
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In the event a dispute arises over benefits under this Benefit Plan
and benefits are not paid to the Participant (or to the Participant's
beneficiary(ies) in the case of the
Participant's death) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to the Plan
Administrator named above within sixty (60) days from the date
payments are refused. The Plan Administrator shall review the written
claim and if the claim is denied, in whole or in part, they shall
provide in writing within sixty (60) days of receipt of such claim the
specific reasons for such denial, reference to the provisions of this
Benefit Plan upon which the denial is based and any additional
material or information necessary to perfect the claim. Such written
notice shall further indicate the additional steps to be taken by
claimants if a further review of the claim denial is desired. A claim
shall be deemed denied if the Plan Administrator fails to take any
action within the aforesaid sixty-day period.
If claimants desire a second review they shall notify the Plan
Administrator in writing within sixty (60) days of the first claim
denial. Claimants may review This Benefit Plan or any documents
relating thereto and submit any written issues and comments it may
feel appropriate. In their sole discretion, the Plan Administrator
shall then review the second claim and provide a written decision
within sixty (60) days of receipt of such claim. This decision shall
likewise state the specific reasons for the decision and shall include
reference to specific provisions of this Benefit Plan upon which the
decision is based.
If claimants continue to dispute the benefit denial, then claimants
may submit the dispute to an Arbitrator for final arbitration. The
Arbitrator shall be selected by mutual agreement of the Bank and the
claimants. The Arbitrator shall operate under any generally recognized
set of arbitration rules. The parties hereto agree that they and their
heirs, personal representatives, successors and assigns shall be bound
by the decision of such Arbitrator with respect to any controversy
properly submitted to it for determination.
PEOPLES BANK
Newton, North Carolina
By: /s/ Robert C. Abernethy
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Chairman of the Board