THE DIME BANK
FORM OF SALARY CONTINUATION AGREEMENT, AS AMENDED AND RESTATED
WHEREAS THIS AGREEMENT AMENDS AND RESTATES the prior The Dime Bank Salary
Continuation Agreement (the "Prior Agreement") between the Bank and the
Executive dated June 9, 1995, this SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
(the "Agreement") is adopted this 28th day of June, 2007, by and between THE
DIME BANK, a state-chartered commercial bank located in Honesdale, Pennsylvania
(the "Bank") and ______________ (the "Executive").
The parties intend this Agreement to be a material modification of the
Prior Agreement such that all amounts earned and vested prior to December 31,
2004 shall be subject to the provisions of Section 409A of the Code and the
regulations promulgated thereunder.
The purpose of this Agreement is to provide specified benefits to the
Executive, a member of a select group of management or highly compensated
employees who contribute materially to the continued growth, development, and
future business success of the Bank. This Agreement shall be unfunded for tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended from time to time.
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
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 that any of the following events occur:
(a) the acquisition of the beneficial interest of at least
twenty-five percent (25%) of the Company's voting securities or
all or substantially all of the assets of the Company by a single
person or entity or a group of affiliated persons or entities;
(b) the merger, consolidation or combination of the Company with an
unaffiliated corporation in which the Board of Directors of the
Company immediately prior to such a merger, consolidation or
combination constitute less than a majority of the Board of
Directors of the surviving, new or combined entity; or
(c) during any period of two consecutive years during the term of the
Agreement, persons who, at the beginning of such a period,
constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof.
Furthermore, the date of a Change in Control shall mean the earlier of
(i) the first date on which a person, entity or group of affiliated
persons or entities, acquire the beneficial interest of twenty-five
percent (25%) or more of the Company's voting securities; (ii) the date
of the transfer of all or substantially all of the Company's assets;
(iii) the date on which a merger, consolidation or combination is
consummated; or (iv) the date on which persons who formerly constituted
a majority of the Board of Directors of the Company cease to be a
majority.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Company" means Dimeco, Inc.
1.7 "Disability" means, if the Executive is covered by a Bank-sponsored
disability policy, total disability as defined in such policy without
regard to any waiting period. If the Executive is not covered by such a
policy, Disability means the Executive suffering a sickness, accident
or injury, which, in the judgment of a physician satisfactory to the
Bank, prevents the Executive from performing substantially all of the
Executive's normal duties for the Bank. As a condition to receiving any
Disability benefits, the Bank may require the Executive to submit to
such physical or mental evaluations and tests as the Bank's Board of
Directors deems appropriate.
1.8 "Early Termination" means Separation from Service before Normal
Retirement Age except when such Separation from Service occurs: (i)
following a Change in Control; or (ii) due to death, Disability, or
Termination for Cause.
1.9 "Effective Date" means June 9, 1995 and the effective date of this
restatement is January 1, 2007.
1.10 "Normal Retirement Age" means the Executive attaining age sixty-five
(65).
1.11 "Normal Retirement Date" means the later of Normal Retirement Age
or the date of a Separation from Service.
1.12 "Plan Administrator" means the plan administrator described in Article
6.
1.13 "Plan Year" means each twelve (12) month period commencing on
January 1 and ending on December 31 of each year.
1.14 "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.
1.15 "Separation from Service" means the termination of the Executive's
employment with the Bank. Whether a Separation from Service takes place
is determined in accordance with the requirements of Code Section 409A
and related Treasury guidance or Regulations based on the facts and
circumstances surrounding the termination of the Executive's employment
and whether the Bank and the Executive intended for the Executive to
provide significant services for the Bank following such termination. A
Separation from Service will not have occurred 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 (3) full calendar years of employment (or, if
employed less than three (3) 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 (3) 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 (3) full calendar
years of employment (or if employed less than three (3) 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 (3) full calendar years of
employment (or if less, such lesser period).
The Executive's employment relationship will be treated as continuing
intact while the Executive is on military leave, sick leave, or other
bona fide leave of absence if the period of such leave of absence does
not exceed six (6) months, or if longer, so long as the Executive's
right to reemployment with the Bank is provided either by statute or by
contract. If the period of leave exceeds six (6) months and there is no
right to reemployment, a Separation from Service will be deemed to have
occurred as of the first date immediately following such six (6) month
period.
1.16 "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, as determined by the Plan Administrator based on
the twelve (12) month period ending each December 31 (the
"identification period"). If the Executive is determined to be a
Specified Employee for an identification period, the Executive shall be
treated as a Specified Employee for purposes of this Agreement during
the twelve (12) month period that begins on the first day of the fourth
month following the close of the identification period.
1.17 "Termination for Cause" has the meaning set forth in Section 5.1.
Article 2
Distributions During Lifetime
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 _______________ Dollars ($_______). Prior to the Normal
Retirement Date, the Bank's Board may, in its sole discretion,
increase the annual benefit under this Section 2.1.1; however,
any increase shall require the recalculation of Schedule A.
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 Separation from Service. The annual benefit shall be
distributed to the Executive for fifteen (15) years.
2.2 Early Termination Benefit. Upon the occurrence of an 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 benefit under this Section 2.2 is the
Early Termination Benefit set forth in Schedule A for the Plan
Year preceding Separation from Service. Any increase in the
annual benefit under Section 2.1.1 shall require the
recalculation of this benefit on Schedule A.
2.2.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Executive in twelve (12) equal installments
commencing on the first day of the month at the later of (a)
the seventh month after the Executive's Separation from
Service, or (b) the month immediately after the month in which
the Executive attains the Normal Retirement Age. The annual
benefit shall be distributed for fifteen (15) years.
2.3 Disability Benefit. If the Executive experiences a Disability which
results in a 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.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Disability Benefit set forth in Schedule A for the Plan Year
ending prior to Separation from Service (except during the
first Plan Year, the benefit is the amount set forth for Plan
Year 1).
2.3.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Executive in twelve (12) equal installments
commencing the first day of the month at the later of (a) the
seventh month after the Executive's Separation from Service,
or (b) the month immediately after the month in which the
Executive attains the Normal Retirement Age. The annual
benefit shall be distributed for fifteen (15) years.
2.4 Change in Control Benefit. Upon a Change in Control followed by a
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 benefit under this Section 2.4 is the
Change in Control Benefit set forth in Schedule A for the Plan
Year ending prior to Separation from Service.
2.4.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Executive in twelve (12) equal installments
commencing the first day of the month at the seventh month
after the Executive's Separation from Service. The annual
benefit shall be distributed for fifteen (15) years.
2.4.3 Parachute Payments. Notwithstanding any provision of this
Agreement to the contrary, and to the extent allowed by Code
Section 409A, if any benefit payment under this Section 2.4
would be treated as an "excess parachute payment" under Code
Section 280G, the Bank shall reduce such benefit payment to
the extent necessary to avoid treating such benefit payment as
an excess parachute payment.
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. No such delay or continued delay in distributions
shall be required following the death of the Executive.
2.6 Distributions Upon Income Inclusion Under Section 409A of the Code. If
any amount is required to be included in income by the Executive prior
to receipt due to a failure of this Agreement to meet the requirements
of Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of
that portion of the amount the Bank has accrued with respect to the
Bank's obligations hereunder that is required to be included in the
Executive's income. Upon the grant of such a petition, which grant
shall not be unreasonably withheld, the Bank shall distribute to the
Executive immediately available funds in an amount equal to the portion
of the amount the Bank has accrued with respect to the Bank's
obligations hereunder required to be included in income as a result of
the failure of this Agreement to meet the requirements of Code Section
409A and related Treasury guidance or Regulations, which amount shall
not exceed the Executive's unpaid amount the Bank has accrued with
respect to the Bank's obligations hereunder. If the petition is
granted, such distribution shall be made within ninety (90) days of the
date when the Executive's petition is granted. Such a distribution
shall affect and reduce the Executive's benefits to be paid under this
Agreement.
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 Sections 2.2.2(b) and
2.3.2(b) be made at least twelve (12) months prior to the first
scheduled distribution;
(c) 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
(d) must take effect not less than twelve (12) months after the
amendment is made.
Article 3
Distribution at Death
3.1 Death During Active Service. If the Executive dies prior to a
Separation from Service with 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
Normal Retirement Benefit amount described in Section 2.1.1.
3.1.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Beneficiary in twelve (12) equal monthly
installments for fifteen (15) years commencing 60 days
following the Bank's receipt of the Executive's death
certificate.
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 that 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 distributions shall commence the first day of the month
following the Executive's death.
Article 4
Beneficiaries
4.1 Beneficiary. The Executive shall have the right, at any time, to
designate a Beneficiary to receive any benefit distributions under this
Agreement upon the death of the Executive. The Beneficiary designated
under this Agreement may be the same as or different from the
beneficiary designated under any other plan of the Bank in which the
Executive participates.
4.2 Beneficiary Designation: Change; Spousal Consent. 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. If the Executive names someone other than the
Executive's spouse as a Beneficiary, the Plan Administrator may, in its
sole discretion, determine that spousal consent is required to be
provided in a form designated by the Plan Administrator, executed by
such Executive's spouse and returned to the Plan Administrator. The
Executive's 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 Administrator's
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 Executive's 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 Executive's spouse shall be the designated
Beneficiary. If the Executive has no surviving spouse, the benefits
shall be made to the personal representative of the Executive's 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 person's 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 Beneficiary, as the case may be, and shall be a complete discharge
of any liability under the Agreement for such distribution amount.
Article 5
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not pay any benefit under this
Agreement if the Bank or an applicable banking regulator terminates the
Executive's employment for:
(a) Gross negligence or gross neglect of duties;
(b) Commission of a felony or of a gross misdemeanor involving moral
turpitude;or
(c) Fraud, disloyalty, dishonesty or willful violation of any law or
significant Bank policy committed in connection with the
Executive's employment and resulting in an adverse effect on the
Bank.
5.2 Suicide or Misstatement. No benefits shall be distributed if the
Executive commits suicide within two (2) 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 for material misstatements of fact made by the Executive on an
application for such life insurance.
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. Notwithstanding
anything herein to the contrary, any payments made to the Executive
pursuant to the Agreement, or otherwise, shall be subject to and
conditioned upon compliance with 12 USC 1828(k) and FDIC Regulation 12
CFR Part 359, Golden Parachute Indemnification Payments and any
regulations promulgated thereunder.
Article 6
Claims and Review Procedures
6.1 For all claims other than disability benefits:
6.1.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under this Agreement that he or she believes
should be paid shall make a claim for such benefits as
follows:
6.1.1.1 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.
6.1.1.2 Timing of Bank Response. The Bank shall respond to
such Claimant within ninety (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 ninety (90) days
by notifying the Claimant in writing, prior to the
end of the initial ninety (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.
6.1.1.3 Notice of Decision. If the Bank denies part or the
entire 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
this 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 this Agreement's review
procedures and the time limits applicable to
such procedures, and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a)
following an adverse benefit determination
on review.
6.1.2 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:
6.1.2.1 Initiation - Written Request. To initiate the
review, the Claimant, within sixty (60) days after
receiving the Bank's notice of denial, must file
with the Bank a written request for review.
6.1.2.2 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
Claimant's claim for benefits.
6.1.2.3 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.
6.1.2.4 Timing of Bank Response. The Bank shall respond in
writing to such Claimant within sixty (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
sixty (60) days by notifying the Claimant in
writing, prior to the end of the initial sixty (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.
6.1.2.5 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
this 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 Claimant's claim for
benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a)
following an adverse benefit determination
on review.
6.2 For disability claims:
6.2.1 Claims Procedures. Any individual ("Claimant") who has not
received benefits under this Agreement that he or she believes
should be paid shall make a claim for such benefits as
follows:
6.2.1.1 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.
6.2.1.2 Timing of Bank Response. The Bank shall notify the
Claimant in writing or electronically of any
adverse determination as set out in this Section.
6.2.1.3 Notice of Decision. If the Bank denies part or the
entire 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
this 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 Agreement's review
procedures and the time limits applicable to
such procedures,
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a)
following an adverse benefit determination
on review,
(f) Any internal rule, guideline, protocol, or
other similar criterion relied upon in
making the adverse determination, or a
statement that such a rule, guideline,
protocol, or other similar criterion was
relied upon in making the adverse
determination and that the Claimant can
request and receive free of charge a copy of
such rule, guideline, protocol or other
criterion from the Bank, and
(g) If the adverse benefit determination is
based on a medical necessity or experimental
treatment or similar exclusion or limit,
either an explanation of the scientific or
clinical judgment for the determination,
applying the terms of this Agreement to the
Claimant's medical circumstances, or a
statement that such explanation will be
provided free of charge upon request.
6.2.1.4 Timing of Notice of Denial/Extensions. The Bank
shall notify the Claimant of denial of benefits in
writing or electronically not later than forty-five
(45) days after receipt of the claim by the Bank.
The Bank may elect to extend notification by two
thirty (30) day periods subject to the following
requirements:
(a) For the first thirty (30) day extension,
the Bank shall notify the Claimant (1) of
the necessity of the extension and the
factors beyond the Bank's control requiring
an extension; (2) prior to the end of the
initial forty-five (45) day period; and
(3) of the date by which the Bank expects
to render a decision.
(b) If the Bank determines that a second thirty
(30) day extension is necessary based on
factors beyond the Bank's control, the Bank
shall follow the same procedure in (a)
above, with the exception that the
notification must be provided to the
Claimant before the end of the first thirty
(30) day extension period.
(c) For any extension provided under this
section, the Notice of Extension shall
specifically explain the standards upon
which entitlement to a benefit is based, the
unresolved issues that prevent a decision on
the claim, and the additional information
needed to resolve those issues. The Claimant
shall be afforded forty-five (45) days
within which to provide the specified
information.
6.2.2 Review Procedures - Denial of Benefits. If the Bank denies
part or the entire claim, the Claimant shall have the
opportunity for a full and fair review by the Bank of the
denial, as follows:
6.2.2.1 Initiation of Appeal. Within one hundred eighty
(180) days following notice of denial of benefits,
the Claimant shall initiate an appeal by submitting
a written notice of appeal to Bank.
6.2.2.2 Submissions on Appeal - Information Access. The
Claimant shall be allowed to provide written
comments, documents, records, and other information
relating to the claim for benefits. The Bank shall
provide to 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
Claimant's claim for benefits.
6.2.2.3 Additional Bank Responsibilities on Appeal. On
appeal, the Bank shall:
(a) 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;
(b) Provide for a review that does not afford
deference to the initial adverse benefit
determination and that is conducted by an
appropriate named fiduciary of the Bank who
is neither the individual who made the
adverse benefit determination that is the
subject of the appeal, nor the subordinate
of such individual;
(c) In deciding an appeal of any adverse benefit
determination that is based in whole or in
part on a medical judgment, including
determinations with regard to whether a
particular treatment, drug, or other item is
experimental, investigational, or not
medically necessary or appropriate, consult
with a health care professional who has
appropriate training and experience in the
field of medicine involved in the medical
judgment;
(d) Identify medical or vocational experts whose
advise was obtained on behalf of the Bank in
connection with a Claimant's adverse benefit
determination, without regard to whether the
advice was relied upon in making the benefit
determination; and
(e) Ensure that the health care professional
engaged for purposes of a consultation under
subsection (c) above shall be an individual
who was neither an individual who was
consulted in connection with the adverse
benefit determination that is the subject of
the appeal, nor the subordinate of any such
individual.
6.2.2.4 Timing of Notification of Benefit Denial - Appeal
Denial. The Bank shall notify the Claimant not
later than forty-five (45) days after receipt of
the Claimant's request for review by the Bank,
unless the Bank determines that special
circumstances require an extension of time for
processing the claim. If the Bank determines that
an extension is required, written notice of such
shall be furnished to the Claimant prior to the
termination of the initial forty-five (45) day
period, and such extension shall not exceed
forty-five (45) days. The Bank shall indicate the
special circumstances requiring an extension of
time and the date by which the Bank expects to
render the determination on review.
6.2.2.5 Content of Notification of Benefit Denial. The Bank
shall provide the Claimant with a notice calculated
to be understood by the Claimant, which shall
contain:
(a) The specific reason or reasons for the
adverse determination;
(b) Reference to the specific plan provisions
on which the benefit determination 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 relevant
information (as defined in applicable ERISA
regulations);
(d) A statement of the Claimant's right to bring
an action under ERISA Section 502(a);
(e) Any internal rule, guideline, protocol, or
other similar criterion relied upon in
making the adverse determination, or a
statement that such a rule, guideline,
protocol, or other similar criterion was
relied upon in making the adverse
determination and that the Claimant can
request and receive free of charge a copy of
such rule, guideline, protocol or other
criterion from the Bank;
(f) If the adverse benefit determination is
based on a medical necessity or experimental
treatment or similar exclusion or limit,
either an explanation of the scientific or
clinical judgment for the determination,
applying the terms of this Agreement to the
Claimant's medical circumstances, or a
statement that such explanation will be
provided free of charge upon request; and
(g) The following statement: "You and your Bank
may have other voluntary alternative dispute
resolution options such as mediation. One
way to find out what may be available is to
contact your local U.S. Department of Labor
Office and your state insurance regulatory
agency."
Article 7
Amendments and Termination
7.1 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 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.
7.2 Plan Termination Generally. Except as provided herein, this Agreement
may be terminated only by written agreement signed by the Bank and the
Executive. Upon such Plan termination, the benefit shall be the amount
the Bank has accrued with respect to the Bank's obligations hereunder
as of the date the Agreement is terminated. Except as provided in
Section 7.3, 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.
7.3 Plan Terminations Under Section 409A. Notwithstanding anything to
the contrary in Section 7.2, if the Bank terminates this Agreement in
the following circumstances:
(a) Within thirty (30) days before, or twelve (12) months after a
transaction described in Code Section 409A(2)(A)(v), i.e., 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,
provided that all distributions are made no later than twelve
(12) months following such termination of the Agreement and
further provided that all the Bank's 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 Bank's dissolution or with the approval of a bankruptcy
court provided that the amounts deferred under the Agreement are
included in the Executive's 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 distribution is administratively practical; or
(c) Upon the Bank's 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;
in which case, the Bank may distribute the amount the Bank has accrued
with respect to the Bank's obligations hereunder, determined as of the
date of the termination of the Agreement, to the Executive in a lump
sum subject to the above terms.
Article 8
Administration of Agreement
8.1 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
administer this Agreement according to its express terms and 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 to the extent the exercise of such discretion and
authority does not conflict with Section 409A of the Code and
regulations thereunder.
8.2 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.
8.3 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.
8.4 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.
8.5 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 Disability, death, or Separation from Service of
the Executive, and such other pertinent information as the Plan
Administrator may reasonably require.
Article 9
Miscellaneous
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 Bank's right to
discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's 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 from the benefits provided under this
Agreement. The Executive acknowledges that the Bank's 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 Commonwealth of Pennsylvania except to the
extent preempted by the laws of the United States of America.
9.6 Unfunded Arrangement. The Executive and the 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 Executive's 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. Neither the Bank nor the Company shall 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 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 due to regulatory or other constraints, 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, provided that such alternative acts
do not violate Section 409A of the Code.
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:
▇.▇. ▇▇▇ ▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Attention: Corporate Secretary
-------------------------------
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 Deduction Limitation on Benefit Payments. If the Bank reasonably
anticipates that the Bank's deduction with respect to any distribution
from this Agreement would be limited or eliminated by application of
Code Section 162(m), then to the extent deemed necessary by the Bank to
ensure that the entire amount of any distribution from this Agreement
is deductible, the Bank may delay payment of any amount that would
otherwise be distributed from this Agreement. The delayed amounts shall
be distributed to the Executive (or the Beneficiary in the event of the
Executive's death) at the earliest date the Bank reasonably anticipates
that the deduction of the payment of the amount will not be limited or
eliminated by application of Code Section 162(m).
9.15 Compliance with Section 409A. The Bank shall administer the Plan in
good faith compliance with the provisions of this Agreement, which
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. Notwithstanding anything herein to the contrary, the Bank
shall be under no obligation to indemnify the Executive for any tax
liabilities incurred by the Executive with respect to the Agreement,
including but not limited to Code Section 409A.
IN WITNESS WHEREOF, the Executive and a duly authorized representative
of the Bank have signed this Agreement.
Executive: THE DIME BANK
--------------------------------- By
-----------------------------------
Title:
-----------------------------------