ex10_06.htm


    Exhibit 10.06

    
      
        

      

    

    
       

      CAPITAL
BANK

      DEFINED
BENEFIT SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

      (Amended
and Restated Effective December 18, 2008)

      


      This
Capital Bank Defined Benefit Supplemental Executive Retirement Plan (the “Plan”)
was adopted by Capital Bank Corporation (the “Corporation”) AND Capital Bank
(the “Bank”), effective as of May 24, 2005. This amendment and restatement of
the Plan was adopted effective December 18, 2008 to make certain amendments to
the Plan in order to ensure its compliance with Code Section 409A.

      


      The Plan
is established and is to be maintained for the benefit of a select group of the
Employer's management or highly compensated employees. The purposes of the Plan
are to offer benefits to supplement retirement benefits under the Employer's
tax-qualified retirement plan and to prevent Participants from entering into
competitive business ventures with the Employer, from appropriating confidential
information proprietary to the Employer to his personal benefit, or otherwise
from acting in a manner that is injurious to the Employer's
interests.

      


      The Plan
is intended to be a top-hat plan (i.e., an unfunded nonqualified deferred
compensation plan maintained for a select group of man­agement or highly
compensated employees) pursuant to Sections 201(2), 301(a)(3), and 401(a)(1) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The
Plan is also a nonqualified deferred compensation plan subject to Code Section
409A and applicable regulations and other guidance thereunder.

      


      ARTICLE
I-DEFINITIONS

      


      The
following terms, as used herein, unless a different meaning clearly is implied
by the context, shall have the following meanings:

      


      1.1           BENEFICIARY
means any person or persons so designated in ac­cordance with the provisions
of Article V.

      


      1.2           BENEFIT
means the total supplemental retirement amount, after all offsets and vesting
provisions, accrued and to be paid for the benefit of the Participant as
deter­mined under the Plan.

      


      1.3           BENEFIT
COMMENCEMENT DATE means the date on which Benefits under the Plan are to
commence following the Participant's termination of employment with the Employer
as provided herein.

      


      1.4           BENEFIT
PERCENTAGE means a percentage of each Participant’s Compensation as established
by the Board to be used for purposes of calculating the Participant’s Target
Benefit under the Plan.

      


      1.5           BOARD
means the Board of Directors of the Employer or a committee designated by the
Board of Directors that will be responsible for the administration and oversight
of the Plan.

      


      1.6           CODE
means the Internal Revenue Code of 1986 and the regulations thereunder, as
amended from time to time.

      


      1.7           COMPENSATION
means the average annualized salary received by a Participant within the three
(3) years prior to the Participant’s termination of employment with the Employer
or current salary if employed less than three years with Employer. For purposes
of this Plan, the term Compensation excludes any compensation from bonuses,
profit sharing, deferred compensation, stock options, restricted stock or any
other similar forms of wages or compensation paid in addition to the
Participant’s annualized base salary for a given year.

      


      1.8           EFFECTIVE
DATE means the effective date of this Plan, which shall be May 24, 2005. The
Amended and Restated Plan set forth herein was adopted December 18,
2008.

      


      1.9           EMPLOYER
means Capital Bank Corporation and subsidiaries, or its successors and assigns,
unless otherwise herein provided, or any other corpo­ration or business
organization that, with the consent of Capital Bank Corporation or its
successors or assigns, assumes the Employer's obligations
hereunder.


      
        
           


        

        
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      1.10           ERISA
means the Employee Retirement Income Security Act of 1974 and the regulations
thereunder, as amended from time to time.

      


      1.11           NORMAL
RETIREMENT DATE means the date on which a Participant attains fifty-eight (58)
years of age.

      


      1.12           PARTICIPANT
means a member of a select group of the Employer's management or highly
compensated employees within the meaning of Sections 201 (2), 301 (a)(3), and
401 (a)(1) of ERISA. Participants will be approved by the Employer’s Board of
Directors or a committee of the Board of Directors designated such authority by
the Board of Directors. The Board (or appropriate committee) shall also
determine the effective date of a Participant’s eligibility for accruing Years
of Service under the Plan.

      


      1.13           PIA
means the Primary Insurance Amount under Social Security. When determined at an
age other than Social Security retirement age, PIA reflects future compensation
(from age at determination to Social Security retirement age) equal to
compensation in the last calendar year before the determination date. For the
year of determination, PIA reflects the greater of actual compensation or
compensation in the last calendar year before the determination
date.

      


      1.14           PLAN
means this Capital Bank Defined Benefit Supplemental Executive Retirement Plan,
as amended from time to time.

      


      1.15           PLAN
YEAR means the twelve (12) month period ending on December 31 of each year
during which the Plan is in effect.

      


      1.16           QUALIFIED
PLAN means the Capital Bank 401(k) Retirement Plan, as it may be amended from
time to time.

      


      1.17           YEARS
OF SERVICE means the number of years a Participant has performed at least 1,000
hours of service for the Employer in the calendar year in which the Board
approved the employee as a Participant in the Plan and each subsequent year the
employee remained a Participant in the Plan as well as any credit for service
for prior years under Section 3.7.

      


      ARTICLE
II-BENEFITS

      


      2.1           PARTICIPANT’S
TARGET BENEFIT. A Participant's “Target Benefit” to be paid under this Plan
shall be an amount equal to a Participant’s Benefit Percentage multiplied by the
Participant’s Compensation (as such term is defined in Section 1.7) reduced by
the following offset amounts: (i) the maximum allowed Employer matching
contributions to the Qualified Plan without regard to whether the Participant
actually participated at a level to receive the maximum matching contribution
unless the reason for participating at a lower level is due to the constraints
under any law or regulation in order that the Qualified Plan maintains its
qualified plan status under ERISA accumulated over the Participant’s employment
with Employer plus an annualized earnings credit to the matching contribution of
2% annually. The accumulated amount of matching contributions and earnings will
then be divided by the Benefit Period as defined in Section 4.2 to determine the
annual offset amount; (ii) benefits provided under any future retirement plan or
program which provides Employer-paid retirement benefits from a defined benefit
plan other than this Plan for the Participant; (iii) Employer-paid costs
provided under any future retirement plan or program which provides benefits
under a defined contribution benefit plan and (iv) 50% of the Participant’s
estimated annualized PIA benefit at the date of termination of employment with
Employer.

      


      All
calculations performed with respect to determining a Participant's Target
Benefit shall be performed using reasonable actuarial and other assumptions,
consistently ap­plied and consistent with one another. The Employer may, in
its discretion, attach as a schedule hereto prescribed actuarial and other
assumptions that will be used to determine the Participant's Benefit under the
Plan.

      


      2.2           BENEFICIARY'S
BENEFIT. The Beneficiary’s Benefit payable hereunder shall be paid in a lump sum
the amount of which shall be determined by the provisions of Sections 3.2 and
4.3 depending on whether the Participant’s death occurs while employed by the
Employer or after termination of employment with the Employer.


      
        
           


        

        
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      All lump
sum payments made as a result of a Participant’s death shall be calculated by
present valuing to the payment date using a discount rate equal to the yield of
a ten year constant maturity US Treasury security, a stream of payments assuming
the Participant’s Benefit would commence or continue on the date of the
Participant’s death and be payable for the number of periods described in
Section 4.3.

      


      ARTICLE
III-ENTITLEMENT TO BENEFITS

      


      3.1           RETIREMENT.
If the Participant terminates employment with the Employer for reasons other
than death or Disability, the Participant's Benefit shall be payable according
to the provisions of Article IV unless the Participant forfeits rights to his or
her Benefits under the Plan pursuant to Section 3.7.

      


      3.2           DEATH.
If a Participant dies prior to his or her termination of employ­ment with
the Employer, the Participant’s Benefit shall become fully vested and be payable
to the Participant's designated Beneficiary in accordance with the provisions of
Section 2.2 and Article IV.

      


      3.3           VESTING.
Provided there has not been a Change in Control as defined in Section 3.5 below
and that the Participant has not terminated employment due to death or
Disability, a Participant’s Benefit amount accrued under the Plan shall vest and
become payable in accordance with the following vesting schedule (the “Vesting
Schedule”):

      


      
        
          	 
      	
                  Years
      of Service

                	 
      	
                  Vested
      Benefit

                	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                  0–3
      Years of Service

                	 
      	
                  0%

                	 
      
	 
      	
                  4
      Years of Service

                	 
      	
                  20%

                	 
      
	 
      	
                  5
      Years of Service

                	 
      	
                  40%

                	 
      
	 
      	
                  6
      Years of Service

                	 
      	
                  60%

                	 
      
	 
      	
                  7
      Years of Service

                	 
      	
                  80%

                	 
      
	 
      	
                  8
      Years of Service

                	 
      	
                  100%

                	 
      


        

      

      


      Accordingly,
any Participant who terminates employment with the Employer, prior to a Change
in Control, for any reason other than death or Disability without eight (8) or
more Years of Service shall be entitled only to a percentage of the total
Benefit potentially payable to the Participant under the Plan as corresponds to
the Participant’s Vested Benefit percentage set forth in the above Vesting
Schedule.

      


      3.4           DISABILITY.
In the event a Participant terminates employment with the Employer due to
Disability, the Participant shall become 100% vested in any Participant’s Target
Benefit earned as of the date of Disability. In such cases, the Participant’s
annual Target Benefit amount as determined under the Plan shall be paid to the
disabled Participant for a period of years equal to the total Years of Service
the Participant earned under the Plan up to a maximum of seventeen (17) years.
For example, a Participant who terminates due to a Disability after five (5)
Years of Service would be entitled to 100% of the Participant’s Target Benefit
amount to be paid out for a period of five (5) years. In the event a Participant
becomes Disabled following termination of employment with the Employer, Benefits
shall be paid out in accordance with Article IV based on the Participant’s
Vested Benefit at the time of termination. For purposes of this Plan, the term
“Disability” shall mean any physical or mental impairment which, in the opinion
of the Board, results in a Participant being “disabled” or constitutes a
“disability” as such terms are defined in Code Section 409A(a)(2)(C) and the
regulations thereunder.

      


      3.5           CHANGE
IN CONTROL.

      


      (a)           Definition of Change in
Control. For purposes of this Plan, the term "Change in Control" shall
mean any of the following:

      


      (i)           Any
“person” (as such term is used in Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Act”)) acquiring “beneficial ownership”
(as such term is used in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Corporation, the parent holding company of the Bank,
representing more than fifty percent (50%) of the total fair market value or
total voting power of the Corporation’s then outstanding voting securities, but
excluding for this purpose an acquisition by the Corporation or by an employee
benefit plan (or related trust) of the Corporation.

      

        
          
             


          

          
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      (ii)           The
shareholders of the Corporation approve a reorganization, share exchange, merger
or consolidation related to the Corporation following which the owners of the
total voting power of the Corporation immediately prior to the closing of such
transaction do not beneficially own, directly or indirectly, more than forty
percent (40%) of the total Voting Power of the Corporation.

      


      (iii)           A
majority of the Corporation’s Board is replaced during any 12-month period by
Directors whose appointment or election is not endorsed by a majority of the
members of the Corporation’s Board prior to the date of such appointment or
election.

      


      (iv)           The
shareholders of the Corporation approve a complete liquidation or dissolution of
the Corporation, or a sale or other disposition of all or greater than 60% of
the assets of the Corporation.

      


      In no
event, however, will a “Change in Control” include a transaction, or series of
transactions, whereby the Corporation or the Bank becomes a subsidiary of a
holding company if the shareholders of the holding company are substantially the
same as the shareholders of the Corporation prior to such transaction or series
of transactions.

      


      (b)           Benefits upon a Change in
Control. In the event of a Change in Control while a Participant is
employed by Employer, a Participant’s annual Benefit to be paid under this Plan
shall be deemed fully vested for purposes of Section 3.3 and shall be payable
for a period of seventeen (17) years regardless of the Participant’s actual
Years of Service with the Employer.

      


      3.6           PRIOR
SERVICE. The Board (or appropriate Committee of the Board) may provide
Participants with credit for Years of Service for periods prior to the Effective
Date of the Plan.

      


      3.7           FORFEITURE.
Notwithstanding any other provisions of this Plan to the contrary, the
Participant and his or her Beneficiary shall forfeit all then unpaid Benefits
under the Plan upon the occurrence of any of the following events: (i) without
the Employer's prior written consent, the Participant becomes within two (2)
years following termination of employment with Employer a senior officer,
independent contractor, advisor, director, or ten percent (10%) or more
shareholder, directly or indirectly, of a for-profit enterprise engaged in the
business of banking within thirty (30) miles of the Participant’s principal
business office at any time within the three years prior to the termination of
Participant’s employment with Employer; (ii) the Participant makes any
materially disparaging public disclosures about the Employer following the
termination of his or her employment relationship with the Employer; (iii) the
Board determines that the Participant’s separation from employment by Employer
is based on fraud, dishonesty, conviction of, or pleading guilty to, a felony,
or embezzlement from the Employer; or (iv) without the Employer's prior written
consent, the Participant uses any of the Employer's propri­etary information
for business gain following his or her termination of employment with the
Employer. The provisions of this Section shall not be applicable in the event of
a Change of Control.

      


      ARTICLE
IV-DISTRIBUTION OF BENEFITS

      


      4.1           AMOUNT.
The total annual Benefit payable to the Participant (or his or her Beneficiary
or Beneficiaries) shall be determined by taking the Participant’s Target Benefit
determined under Section 2.1 and multiplying that amount by the applicable
vesting percentage determined in accordance with the Vesting Schedule under
Section 3.3 of the Plan. A Participant’s annual Benefit amount shall be divided
into four (4) equal payments and paid to Participants on the last business day
of each calendar year quarter, unless the Plan otherwise provides.

      


      4.2           BENEFIT
PERIOD. A Participant’s annual Benefits to be paid in accordance with Section
4.1 shall be paid to the Participant in quarterly payments for a number of years
equal to the number of Years of Service the Participant has earned with the
Employer not to exceed a maximum of seventeen (17) Years of Service.
Notwithstanding any other provisions of this Plan to the contrary, in the event
of a Change in Control while the Participant is employed by the Employer, the
Participant shall receive credit for seventeen (17) Years of Service with the
Employer and Benefits due under this Plan shall be calculated and paid out
accordingly.

      

        
          
             


          

          
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4.3           COMMENCEMENT
AND TIMING OF BENEFIT PAYMENTS.

      


      (a)           Normal Retirement. The
anticipated Normal Retirement Age for commencement of Benefit payments is the
date on which a Participant attains fifty-eight (58) years of age. Except as
otherwise provided herein, Benefits under the Plan shall commence being paid to
a Participant as soon as practicable but in no event later than ninety (90) days
following the later of the date the Participant (i) terminates employment with
the Employer, or (ii) attains age 58. Commencement of Benefits under this Plan
to be paid to a “Specified Employee” (as such term is defined in Code Section
409A(a)(2)(B)(i) and the regulations thereunder) following termination of
employment shall be delayed for the six-month period following termination to
the extent required to comply with Section 409A of the Code. Any Benefits to a
Specified Employee delayed to comply with Code Section 409A shall be paid to
such Participant in a lump sum amount on the first business day of the seventh
month following termination. In the event of a Participant’s death following
commencement of Benefit payments due to Normal Retirement, all remaining Benefit
payments shall continue to be paid to the Participant’s designated Beneficiary
at the same rate and on the same schedule as in existence at the time of the
Participant’s death.

      


      (b)           Early Retirement.
Notwithstanding the foregoing normal retirement benefits, a Participant may,
prior to commencing participation in the Plan, instead elect to have Benefits
commence as soon as practicable following a Participant’s termination of
employment prior to attaining age fifty-eight (58) provided the Participant’s
annual Benefit is reduced to reflect such early retirement election. For such
purposes, the reduction factor to be applied to the Participant’s normal
retirement Benefits shall be calculated by multiplying two percent (2%) times
the number of whole years away from age 58 the Participant is at the time of
termination. This reduction factor shall then be multiplied by the vested annual
Benefit amount determined in accordance with Section 4.1 above to determine the
Participant’s early retirement benefit under the Plan. Such early retirement
Benefits shall be paid in accordance with Section 4.1 and shall commence being
paid to a Participant as soon as practicable but in no event later than ninety
(90) days following the date the Participant terminates employment with the
Employer; provided, however, that any Benefits to be paid to a “Specified
Employee” following termination shall be automatically delayed for the six month
(or other minimum) period required in order to comply with Section 409A of the
Code. A Participant’s election to commence benefits prior to age 58 must be made
at the time an individual first becomes a Participant in the Plan and is
irrevocable unless Section 409A would permit a Participant to amend or make a
subsequent deferral election.

      


      (c)           Benefits for Participants
Dying While Employed by
the Employer; Benefits upon a Change of Control. In the event of a
Participant’s death while employed by Employer or in the event of a consummation
of a Change of Control as defined in Section 3.5(a), the payment of Benefits due
under the Plan shall be paid in a lump sum to Participant (or Participant’s
Beneficiary, as applicable) as soon as practical but in no event later than
ninety (90) days following such event. In such cases, a Participant’s lump sum
Benefit shall be calculated as if payable for seventeen (17) years regardless of
the Participant’s actual Years of Service with the Employer. The lump sum amount
shall be present valued to the payment date using a discount rate equal to the
yield of a ten year constant maturity treasury security and assuming Benefits
would have been paid over the seventeen years after an event covered by this
section occurred.

      


      (d)           Death after Termination of
Employment. In the event of the death of a Participant following
termination of employment with the Employer but prior to commencement of any
Retirement Benefits hereunder, any Benefits due under this Plan shall be paid to
the designated Beneficiary in a lump sum as soon as practicable but in no event
later than ninety (90) days following the Participant’s death. The lump sum
Benefit shall be calculated based on the Participant’s actual Years of Service
with the Employer reduced for Benefits already paid the Participant, if any,
present valued to the payment date using a discount rate equal to the yield of a
ten year constant maturity treasury security.

      


      (e)           Disability. In the event a
Participant becomes permanently Disabled, Benefits due under this Plan shall be
determined in accordance with Section 3.4 and paid to the Participant on a
quarterly basis commencing as soon as practicable but in no event later than
ninety (90) days following the Employer’s certification of the Participant’s
Disability.

      

        
          
             


          

          
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4.4           METHOD
OF PAYMENT.

      


      (a)            Form of Benefits. All
distributions under the Plan shall be made in cash.

      


      (b)           Timing and Manner of Distribution.
Normal retirement payments shall commence upon the later of a
Participant’s termination of employment or the attainment of age fifty-eight
(58) and shall be paid in quarterly amounts as provided above unless the Plan
expressly provides for an alternative time and manner of distribution. Quarterly
payments due under the Plan shall equal the amount determined in accordance with
Section 4.1 above which shall be paid to Participants on the last business day
of each calendar quarter.

      


      4.5           TAXES.
The withholding of taxes will be in accordance with Section 409A of the Code;
however, unless otherwise specified by Section 409A of the Code or the
applicable regulations thereunder, no federal or state withholding taxes will be
withheld from any Benefits payable under this Plan unless instructed by the
Participant and the Employer agrees to process distributions in a manner
consistent with its recurring payment process which facilitates the withholding
of taxes.

      


      ARTICLE
V-BENEFICIARIES; PARTICIPANT DATA

      


      5.1           DESIGNATION
OF BENEFICIARIES. The Participant from time to time may designate any person or
persons (who may be named contingently or successively) to receive such Benefits
as may be payable under the Plan upon or after the Participant's death, and such
designation may be changed from time to time by the Participant by filing a new
designation. Each designation by the Participant will revoke all prior
designations by the Participant, shall be in the form prescribed by the
Employer, and will be effective only when filed in writing with the Employer
during the Participant's lifetime. In the absence of a valid Beneficiary
designation, or if, at the time any Benefit payment is due to a Beneficiary,
there is no living Beneficiary validly named by the Participant, the Employer
shall pay any such Benefit payment to the Participant's spouse, if any, or the
Participant’s estate, if the Participant has no spouse.

      


      5.2           INFORMATION
TO BE FURNISHED BY PARTICIPANT AND BENEFI­CIARIES; INABILITY TO LOCATE
PARTICIPANT OR BENEFICIARIES. Any communication, statement, or notice addressed
to the Participant or to a Beneficiary at his or her last post office address as
shown on the Employer's records shall be binding on the Participant or
Benefi­ciary for all purposes of the Plan. The Employer shall not be obliged
to search for the Participant or any Beneficiary beyond the sending of a
registered letter to such last known address. If the Employer notifies the
Participant or any Beneficiary that he or she is entitled to an amount under the
Plan and the Participant or Beneficiary fails to claim such amount or make his
or her location known to the Employer within three (3) years thereafter, then,
except as otherwise required by law, if the location of one or more of the next
of kin of the Participant is known to the Employer, the Employer may direct
distribution of such amounts to any one or more or all of such next of kin in
such proportions as the Employer determines. If the location of none of the
foregoing persons can be determined, the Employer shall have the right to direct
that the amount payable shall be deemed to be a forfeiture and paid to the
Employer, except that the dollar amount of the forfeiture, unad­justed for
imputed interest in the interim, shall be paid by the Employer if a claim for
the benefit subsequently is made by the Participant or Beneficiary to whom it
was payable. If a benefit payable to the Participant or Beneficiary is subject
to escheat pursuant to applicable state law, the Employer shall not be liable to
any person for any payment made in accordance with such law.

      


      ARTICLE
VI-ADMINISTRATION AND RECORDKEEPING

      


      6.1           ADMINISTRATIVE
AND RECORDKEEPING AUTHORITY. Except as otherwise specifically provided herein,
the Board of the Employer shall have the sole responsibility for, and sole
control of, the operation, administration, and recordkeeping of the Plan and
shall have the power and authority to take all action and to make all decisions
and interpretations that may be necessary or appropriate in order to administer
and operate the Plan, including, without limiting the generality of the
foregoing, the power, duty, and responsibility to:

      


      (a)           Exercise
discretion in interpreting or construing the Plan and resolve all questions or
disputes that may arise hereunder, including the power to determine the status
and rights of a Participant (or a Participant’s Beneficiaries and their
respective benefits), and to remedy any ambiguities, inconsistencies, or
omissions in the Plan;


      
        
           


        

        
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      (b)           Adopt
such rules of procedure and regulations as, in its opinion, may be necessary for
the proper and efficient administration of the Plan and as are consistent with
the Plan;

      


      (c)           Implement
the Plan in accordance with its terms and the rules and regulations adopted as
above; and

      


      (d)           Make
determinations concerning the crediting and distribution of each Participant's
Benefits.

      


      6.2           UNIFORMITY
OF DISCRETIONARY ACTS. Whenever, in the adminis­tration or operation of the
Plan, discretionary actions by the Employer are required or permitted, such
action shall be consistently and uni­formly applied to all persons similarly
situated, and no such action shall be taken that shall discriminate in favor of
any particular person or group of persons. Review of all discretionary acts,
determinations, or decisions by the Board (or committee appointed by the Board
for such purposes) shall be limited to review under an arbitrary and capricious
standard.

      


      6.3           LITIGATION.
In any action or judicial proceeding affecting the Plan, it shall be necessary
to join as a party only the Employer. Except as may be otherwise required by
law, neither the Participant nor any Beneficiary shall be entitled to any notice
or service of process, and any final judgment entered in such action shall be
binding on all persons interested in, or claiming under, the Plan.

      


      6.4           CLAIMS
PROCEDURE. Any person claiming a benefit under the Plan (a “Claimant”) shall
present the claim, in writing, to the Board of the Employer, and said Board
shall respond in writing. If the claim is denied, the written notice of denial
shall state, in a manner calculated to be understood by the
Claimant:

      


      (a)           The
specific reason or reasons for denial, with specific refer­ences to the Plan
provisions on which the denial is based;

      


      (b)           A
description of any additional material or information necessary for the Claimant
to perfect his or her claim and an explanation of why such material or
information is necessary; and

      


      (c)           An
explanation of the Plan's claims review procedure.

      


      The
written notice denying or granting the Claimant's claim shall be provided to the
Claimant within ninety (90) days after the Employer's receipt of the claim,
unless special circumstances require an extension of time for processing the
claim. If such an extension is required, written notice of the extension shall
be furnished by the Board of the Employer to the Claimant within the initial
ninety (90) day period, and in no event shall such an extension exceed a period
of ninety (90) days from the end of the initial ninety (90) day period. Any
extension notice shall indicate the special circumstances requiring the
extension and the date on which the Board of the Employer expects to render a
decision on the claim. Any claim not granted or denied within the period noted
above shall be deemed to have been denied. Any Claimant (or such Claimant's
authorized representative) whose claim is denied or deemed to be denied under
the preceding sentence may, within sixty (60) days after the Claimant's receipt
of notice of the denial or after the date of the deemed denial, request a review
of the denial by notice given, in writing, to the Employer. Upon such a request
for review, the claim shall be reviewed by the Employer (or its designated
representa­tive), which may, but shall not be required to, grant the
Claimant a hearing. In connection with the review, the Claimant may have
representation, may examine pertinent documents, and may submit issues and
com­ments in writing.

      


      The
decision on review normally shall be made within sixty (60) days of the receipt
by the Board of the Employer of the request for review. If an extension of time
is required due to special circumstances, the Claimant shall be notified, in
writing, by the Board (or appropriate committee of the Board) of the Employer,
and the time limit for the decision on review shall be extended to one hundred
twenty (120) days. The decision on review shall be in writing and shall state,
in a manner calculated to be understood by the Claimant, the specific reasons
for the decision and shall include references to the relevant Plan provisions on
which the decision is based. The written decision on review shall be given to
the Claimant within the sixty (60) day (or, if applicable, the one hundred
twenty (120) day) time limit discussed above. If the decision on review is not
communicated to the Claimant within the sixty (60) day (or, if applicable, the
one hundred twenty (120) day) period discussed above, the claim shall be deemed
to have been denied upon review. All decisions on review shall be final and
binding with respect to all concerned parties.


      
        
           


        

        
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      ARTICLE
VII-AMENDMENT

      


      7.1           RIGHT
TO AMEND. The Board, by written instrument, shall have the right to amend the
Plan at any time with respect to any provisions hereof, and all parties hereto
or claiming any interest hereunder shall be bound by such amendment; provided,
however, that no such amendment shall deprive the Participant or any Beneficiary
of a right accrued hereunder whether vested or unvested prior to the date of the
amendment, including the right to receive the payment of his or her Benefit upon
a benefit entitlement event, or earlier as pro­vided herein.

      


      7.2           AMENDMENT
REQUIRED BY LAW. Notwithstanding the provisions of Section 7.1, the Plan may be
amended at any time, retroactively if required, if found necessary, in the
opinion of the Board, in order to ensure that the Plan is characterized as a
non-qualified plan of deferred compensation maintained for a select group of
management or highly compensated employees as described under Code Section 451
and ERISA Sections 201 (2), 301 (a)(3), and 401 (a)(1) and to conform the Plan
to the provisions and requirements of any applicable law (including ERISA and
the Code).

      


      ARTICLE
VIII-TERMINATION

      


      8.1           EMPLOYER'S
RIGHT TO TERMINATE PLAN. The Board of Directors of the Employer reserves the
right, at any time, to terminate the Plan; provided, however, that no such
termination shall deprive the Participant or any Beneficiary of a right accrued
here­under prior to the date of termination and provided that, upon
termination, the Participant shall become fully and immediately vested in his or
her Benefit notwithstanding the Vesting Schedule set forth in Section 3.3 above.
Benefits shall be distributable to the Participant pursuant to the terms of
Article IV and payable for the applicable benefit period unless otherwise
expressly permitted as part of the termination in accordance with Code Section
409A.

      


      8.2           AUTOMATIC
TERMINATION OF PLAN. Except in the case of an adoption by a successor to the
Employer as provided in Section 8.3, the Plan shall terminate automatically with
respect to accrual of future Benefits upon the dissolution of the Employer or
upon the Employer's merger into or consolidation with any other corporation or
business organization that does not specifically adopt and agree to continue the
Plan; provided, however, that no such termination shall deprive the Participant
or any Beneficiary of a right accrued here­under prior to the date of
termination and provided that, upon termination, the Participant shall become
fully and immediately vested in his or her Benefit. In no event, however, shall
such automatic termination of the Plan provided in this Section entitle any
Participant to accelerated distribution or receipt of Benefits under this Plan
to the extent such distributions are prohibited by Code Section 409A. Upon an
automatic termination, a Participant’s Benefits shall remain distributable to
Participants pursuant to Article IV unless Code Section 409A would otherwise
permit.

      


      8.3           SUCCESSOR
TO EMPLOYER. Any corporation or other business organization that is a successor
to the Employer by reason of a consoli­dation, merger, or purchase of
substantially all of the assets of the Employer shall have the right to become a
party to the Plan by adopting the same by resolution of the entity's board of
directors or other appro­priate governing body. If within thirty (30) days
from the effective date of such consolidation, merger, or sale of assets, such
new entity does not become a party hereto, as above provided, the Plan shall be
terminated automatically and the provisions of Section 8.2 shall become
operative.

      


      ARTICLE
IX-MISCELLANEOUS

      


      9.1           LIMITATIONS
ON LIABILITY OF EMPLOYER. Neither the establish­ment of the Plan or any
modification thereof, nor the creation of any account under the Plan, nor the
payment of any benefits under the Plan shall be construed as giving to the
Participant or any other person any legal or equitable right against the
Employer or any officer or employee thereof, except as provided by law or by any
Plan provision.

      

        
          
             


          

          
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9.2           CONSTRUCTION.
If any provision of the Plan is held to be illegal or void, such illegality or
invalidity shall not affect the remaining provisions of the Plan, but shall be
fully severable, and the Plan shall be construed and enforced as if said illegal
or invalid provisions had never been inserted herein. For all purposes of the
Plan, where the context permits, the singular shall include the plural, and the
plural shall include the singular. Headings of Articles and Sections herein are
inserted only for convenience of reference and are not to be considered in the
construction of the Plan. The laws of the state of North Carolina shall govern,
control, and determine all questions of law arising with respect to the Plan and
the interpretation and validity of its respective provisions, except where those
laws are preempted by the laws of the United States. Participation under the
Plan will not give a Participant the right to be retained in the service of the
Employer or any right or claim to any benefit under the Plan unless such right
or claim has specifically accrued hereunder.

      


      The Plan
is intended to be and at all times shall be interpreted and administered so as
to qualify as an unfunded plan of deferred compen­sation, and no provision
of this Plan shall be interpreted so as to give any individual any right in any
assets of the Employer which right is greater than the rights of any general
unsecured creditor of the Employer.

      


      9.3           SPENDTHRIFT
PROVISION. No amount payable to a Participant or any Beneficiary under the Plan
will, except as otherwise specifically provided by Code Section 409A or other
applicable law, be subject in any manner to anticipation, alienation,
attachment, garnishment, sale, transfer, assignment (either at law or in
equity), levy, execution, pledge, encumbrance, charge, or any other legal or
equitable process, and any attempt to do so will be void. Nor will any benefit
hereunder be in any manner liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of the person entitled thereto. Further, the
withholding of taxes from Plan benefit payments; the recovery under the Plan of
overpayment of benefits previously made to the Participant or any Beneficiary,
if applicable; the transfer of benefit rights from the Plan to another plan; or
the direct deposit of Plan benefit payments to an account in a banking
institution (if not actually part of an arrangement constituting an assignment
or alienation) shall not be con­strued as an assignment or
alienation.

      


      In the
event that the Participant's or any Beneficiary's benefits hereunder are
garnished or attached by order of any court, the Employer may bring an action
for a declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid under the Plan. During the pendency
of said action, any benefits that become payable shall be held as credits to the
Participant's or Beneficiary's account or, if the Employer prefers, paid into
the court as they become payable, to be distributed by the court to the
recipient as it deems proper at the close of said action.

      


      9.4           COMPLIANCE
WITH CODE SECTION 409A. This Plan is intended to comply with Code
Section 409A so that no payments to Participant hereunder will be subject
to the additional tax imposed by Code Section 409A. Any ambiguities with
respect to any provisions in this Plan shall be construed and interpreted and
the Plan and all Plan Benefits shall be administered to ensure compliance with
Code Section 409A. If any provision of the Agreement would otherwise frustrate
or conflict with such intent, such provision shall be interpreted and deemed
amended so as to avoid such conflict to the maximum extent permissible by Code
Section 409A. In accordance with Section 1.409A-3(d) of the Treasury
Regulations issued under Code Section 409A, a distribution under this Plan shall
be treated as made on the designated payment date if the payment is made
(i) at such date or a later date within the same calendar year, or if
later, by the 15th day of the third month following the date designated in the
Plan (provided the Participant may not, directly or indirectly, designate the
year of payment), or (ii) at a date no earlier than 30 days before the
designated payment date (provided the Participant may not directly or indirectly
designate the taxable year of the payment). Any reference to a Participant’s
termination of employment, termination of service, separation from service, or
similar term shall mean the Participant’s “Separation from Service” with the
Employer as such term is defined under Code Section 409A. For purposes of Code
Section 409A, each installment payment under the Plan shall be regarded as a
separate payment. Notwithstanding anything in this Agreement to the contrary, if
the Participant is a “Specified Employee” of a public company as such term is
defined in Code Section 409A(a)(2)(B) and if payment of any amount under this
Agreement is required to be delayed for a period of six months after Separation
from Service in accordance with Code Section 409A, then payment of such amount
shall be delayed as required by Code Section 409A and instead paid on the first
business day of the seventh month following the Participant’s Separation from
Service.

      

        
          
             


          

          
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