AMENDMENT TO THE WILLIAM L. WALL CHANGE IN CONTROL PROTECTIVE AGREEMENT
Exhibit
10.12(a)
AMENDMENT
TO THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the “Executive”)
entered into a change in control protective agreement with First South Bank (the
“Bank”) and First South Bancorp, Inc. effective April 20, 2006 (the
“Agreement”); and
WHEREAS, the parties to the
Agreement desire to amend the Agreement to conform with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and
guidance issued with respect to 409A of the Code; and
WHEREAS, Section 9 of the
Agreement provides that the Agreement may be amended or modified at any time by
means of a written instrument signed by the parties.
NOW, THEREFORE, the Bank, the
Company and the Executive agree to amend the Agreement effective December 18,
2008 as follows:
FIRST
CHANGE
The
following new Section 13 shall be added to the Agreement:
“13. SECTION 409A OF THE CODE.
(a) This
Agreement is intended to comply with the requirements of Section 409A of the
Code, and specifically, with the “short-term deferral exception” under Treasury
Regulation Section 1.409A-1(b)(4) and the “separation pay exception” under
Treasury Regulation Section 1.409A-1(b)(9)(iii), and shall in all respects be
administered in accordance with Section 409A of the Code. If any
payment or benefit hereunder cannot be provided or made at the time specified
herein without incurring sanctions on Employee under Section 409A of the Code,
then such payment or benefit shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed. For purposes of
Section 409A of the Code, all payments to be made upon a termination of
employment under this Agreement may only be made upon a “separation from
service” (within the meaning of such term under Section 409A of the Code), each
payment made under this Agreement shall be treated as a separate payment, the
right to a series of installment payments under this Agreement (if any) is to be
treated as a right to a series of separate payments, and if a payment is not
made by the designated payment date under this Agreement, the payment shall be
made by December 31 of the calendar year in which the designated date
occurs. To the extent that any payment provided for hereunder would
be subject to additional tax under Section 409A of the Code, or would cause the
administration of this Agreement to fail to satisfy the requirements of Section
409A of the Code, such provision shall be deemed null and void to the extent
permitted by applicable law, and any such amount shall be payable in accordance
with subparagraph (b) of this Agreement below. In no event shall
Employee, directly or indirectly, designate the calendar year of
payment.
(b) If
when separation from service occurs Employee is a “specified employee” within
the meaning of Section 409A of the Code, and if the cash severance payment under
Section 3 of this Agreement would be considered deferred compensation under
Section 409A of the Code, and, finally, if an exemption from the six-month delay
requirement of Section 409A(a)(2)(B)(i) of the Code is not available (i.e., the
“short-term deferral exception” under Treasury Regulations Section
1.409A-1(b)(4) or the “separation pay exception” under Treasury Section
1.409A-1(b)(9)(iii)), the Bank or the Company will make the maximum severance
payment possible in order to comply with an exception from the six month
requirement and make any remaining severance payment under Section 3 of this
Agreement to Employee in a single lump sum without interest on the first payroll
date that occurs after the date that is six (6) months after the date on which
Employee separates from service.
(c) If
(x) under the terms of the applicable policy or policies for the insurance or
other benefits specified in Section 3 of this Agreement it is not possible to
continue coverage for Employee and his dependents, or (y) when a separation from
service occurs Employee is a “specified employee” within the meaning of Section
409A of the Code, and if any of the continued insurance coverage or other
benefits specified in Section 3 of this Agreement would be considered deferred
compensation under Section 409A of the Code, and, finally, if an exemption from
the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not
available for that particular insurance or other benefit, the Bank or the
Company shall pay to Employee in a single lump sum an amount in cash equal to
the present value of the Bank’s projected cost to maintain that particular
insurance benefit had Employee’s employment not terminated. The
lump-sum payment shall be made thirty (30) days after employment termination or,
if Section 13(b) of this Agreement applies, on the first payroll date that
occurs after the date that is six (6) months after the date on which Employee
separates from service.
(d) References
in this Agreement to Section 409A of the Code include rules, regulations, and
guidance of general application issued by the Department of the Treasury under
Internal Revenue Section 409A of the Code.”
SECOND
CHANGE
Section 2
of the Agreement shall be amended by adding the following
paragraph:
“In the
event the Employee elects to terminate his employment for Good Reason, he must
notify the Bank or the Company within ninety (90) days after the initial
existence of an event that qualifies as Good Reason and the Bank or the Company
must be given an opportunity, not less than thirty (30) days, to effectuate a
cure for such asserted “Good Reason” by the Employee.”
IN WITNESS WHEREOF, the Bank
has caused this Amendment to be executed by its duly authorized officer, and
Executive has signed this Amendment, on the 18th day of December,
2008.
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ATTEST:
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FIRST SOUTH BANK
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇▇▇ ▇.
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Chairman
of the Board
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ATTEST:
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FIRST SOUTH BANCORP,
INC.
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/s/ ▇▇▇▇▇▇▇▇▇ ▇.
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Chairman
of the Board
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WITNESS:
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EXECUTIVE
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