Document:

EX-10.6

 

EXHIBIT 10.6

FIRST AMENDMENT

TO THE

CAPITAL BANK & TRUST COMPANY

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

DATED JULY 10, 2006

FOR

SALLY P. KIMBLE

     THIS FIRST AMENDMENT is adopted this 20th day of December, 2006, effective as of July 10,
2006, except as otherwise provided herein, by and among CAPITAL BANK & TRUST COMPANY, a
state-chartered bank located in Nashville, Tennessee (the “Bank”); CAPITAL BANCORP, INC., a
Tennessee corporation (the “Corporation”) and Sally P. Kimble (the “Executive”).

     The Bank, the Corporation and the Executive executed the Capital Bank & Trust Company
Supplemental Executive Retirement Plan Agreement effective as of July 10, 2006 (the “Agreement”).

     The undersigned hereby amend the Agreement for the purpose of bringing the Agreement into
compliance with Section 409A of the Internal Revenue Code. Therefore, the following changes shall
be made:

     Section 1.1.1 of the Agreement shall be deleted in its entirety and replaced by the following:

	1.1.1	 	“Change in Control” means any of the following:

	 	(a)	 	any person (as such term is used in Sections 13d and 14d-2 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), other than the Corporation, a
subsidiary of the Corporation, and employee benefit plan (or related trust) maintained
by the Corporation or a direct or indirect subsidiary of the Corporation or affiliates
of the Corporation (as defined in Rule 12b-2 under the Exchange Act), becomes the
beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation or the Bank representing more
than thirty-five percent (35%) of the combined voting power of the Corporation’s or
Bank’s then outstanding securities (other than a person owing ten percent (10%) or
more of the total voting power of stock on the date hereof);
	 
	 	(b)	 	during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Corporation or the
Bank, cease for any reason to constitute a majority thereof, unless the election of
each new director was approved in advance by a vote of at least a majority of the
directors then still in office who were directors at the beginning of the period;

 

 

	 	(c)	 	consummation of a merger, consolidation or other business combination of the
Corporation or the Bank with any other Person or affiliate thereof, other than a
merger, consolidation or business combination which would result in the outstanding
common stock of the Corporation or the Bank immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into common stock of
the surviving entity, or a parent or affiliate thereof) at least fifty percent (50%)
of the outstanding common stock of the Corporation or the Bank, or such entity or
parent or affiliate thereof outstanding immediately after such merger, consolidation
or business combination; or
	 
	 	(d)	 	consummation of a plan of complete liquidation of the Corporation or the Bank
or an agreement for the sale or disposition by the Corporation or the Bank of all or
substantially all of the Corporation’s or the Bank’s assets.

          The following Section 1.1.8a shall be added to the Agreement immediately following Section
1.1.8:

	1.1.8a	 	 “Specified Employee” means a key employee (as defined in Section 416(i) of the Code without
regard to paragraph 5 thereof) of the Bank (including any affiliate of the Bank that together
with the Bank is considered a single employer under Code Section 414(b)) if any stock of the
Bank is publicly traded on an established securities market or otherwise.

          Section 1.1.9 of the Agreement shall be deleted in its entirety and replaced by the following:

	1.1.9	 	“Termination of Employment” means the separation from service with the Bank and its
affiliates as contemplated under Code Section 409A(a)(2)(A)(i) for reasons other than death.
Whether a Termination of Employment takes place is determined 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 change in the Executive’s employment status will not be
considered a Termination of Employment if:

	 	(k)	 	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
	 
	 	(l)	 	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 ).

          Section 2.1.3 of the Agreement shall be deleted in its entirety, effective November 1,
2006, and replaced with the following:

	2.1.3	 	Benefit Increases. Commencing on the first anniversary of the first benefit payment and
continuing on each subsequent anniversary of that date, this annual benefit shall increase by
three percent (3%) from the immediately preceding anniversary date.

          Sections 2.2.3 and 2.3.3 of the Agreement shall be deleted in their entirety.

          The following Sections 2.5, 2.6 and 2.7 shall be added to the Agreement immediately following
Section 2.4.2:

	2.5	 	Restriction on Timing of Distributions. Notwithstanding any provision of this Agreement to
the contrary, if the Executive is considered a Specified Employee at Termination of Employment
under such procedures as established by the Bank in accordance with Section 409A of the Code,
benefit distributions that are made upon Termination of Employment may not commence earlier
than six (6) months after the date of such Termination of Employment. 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 (6) months following the Termination of Employment
shall be accumulated and paid to the Executive in a lump sum as soon as practicable following
the six-month anniversary of the Termination of Employment. All subsequent distributions
shall be paid in the manner specified.

	2.6	 	Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the inclusion of
any amount into the Executive’s income as a result of the failure of this non-qualified
deferred compensation plan to comply with the requirements of Section 409A of the Code, to the
extent such tax liability can be covered by the amount the Bank has accrued with respect to
the Bank’s obligations hereunder, a distribution shall be made as soon as is administratively
practicable following the discovery of the plan failure.

	2.7	 	Change in Form or Timing of Distributions. All changes in the form or timing of
distributions hereunder must comply with the following requirements. The changes:

	 	(p)	 	may not accelerate the time or schedule of any distribution,
except as provided in Section 409A of the Code and the regulations thereunder;
	 
	 	(q)	 	must, for benefits distributable under Sections 2.1, 2.2, 2.3
and 2.4, 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

 

 

	 	(r)	 	must take effect not less than twelve (12) months after the
election is made.

Article 6 of the Agreement shall be deleted in its entirety and replaced by the following:

Article 6

Claims and Review Procedures

	6.6	 	Claims Procedure: As used in this Article, “Plan Administrator” shall mean the Bank until
its resignation or removal by the Board of Directors of the Bank.

	 	6.6.1	 	Notice of Denial. If a claimant is denied a claim for benefits under the
Agreement, the Plan Administrator shall provide to the claimant written notice of the
denial within ninety (90) days (forty-five (45) days with respect to a denial of any
claim for benefits due to the Executive’s Disability) after the Plan Administrator
receives the claim, unless special circumstances require an extension of time for
processing the claim. If such an extension of time is required, written notice of the
extension shall be furnished to the claimant prior to the termination of the initial
90-day period. In no event shall the extension exceed a period of ninety (90) days
(thirty (30) days with respect to a claim for benefits due to the Executive’s
Disability) from the end of such initial period. With respect to a claim for benefits
due to the Executive’s Disability, an additional extension of up to thirty (30) days
beyond the initial 30-day extension period may be required for processing the claim.
In such event, written notice of the extension shall be furnished to the claimant
within the initial 30-day extension period. Any extension notice shall indicate the
special circumstances requiring the extension of time, the date by which the Plan
Administrator expects to render the final decision, the standards on which entitlement
to benefits are based, the unresolved issues that prevent a decision on the claim and
the additional information needed to resolve those issues.
	 
	 	6.6.2	 	Contents of Notice of Denial. If a claimant is denied a claim for benefits
under the Agreement, the Plan Administrator shall provide to such claimant written
notice of the denial which shall set forth:

	 	(a)	 	the specific reasons for the denial;
	 
	 	(b)	 	specific references to the pertinent provisions of the
Agreement on which the denial is based;
	 
	 	(c)	 	a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary;
	 
	 	(d)	 	an explanation of the Agreement’s claim review procedures,
and the time limits applicable to such procedures, including a statement of
the claimant’s right to bring a civil action under Section 502(a) of ERISA

 

 

	 	 	 	following an adverse benefit determination on review;
	 
	 	(e)	 	in the case of a claim for benefits due to the Executive’s
Disability, if an internal rule, guideline, protocol or other similar
criterion is relied upon in making the adverse determination, either the
specific rule, guideline, protocol or other similar criterion; or a statement
that such rule, guideline, protocol or other similar criterion was relied upon
in making the decision and that a copy of such rule, guideline, protocol or
other similar criterion will be provided free of charge upon request; and
	 
	 	(f)	 	in the case of a claim for benefits due to the Executive’s
Disability, if a denial of the claim is based on a medical necessity or
experimental treatment or similar exclusion or limit, an explanation of the
scientific or clinical judgment for the denial, an explanation applying the
terms of the Agreement to the claimant’s medical circumstances or a statement
that such explanation will be provided free of charge upon request.

	 	6.6.3	 	Right to Review. After receiving written notice of the denial of a claim, a
claimant or his representative shall be entitled to:

	 	(a)	 	request a full and fair review of the denial of the claim by
written application to the Plan Administrator (or Appeals Fiduciary in the
case of a claim for benefits payable due to the Executive’s Disability);
	 
	 	(b)	 	request, free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to the claim;
	 
	 	(c)	 	submit written comments, documents, records, and other
information relating to the denied claim to the Plan Administrator or Appeals
Fiduciary, as applicable; and
	 
	 	(d)	 	a review that takes into account all comments, documents,
records, and other information submitted by the claimant relating to the
claim, without regard to whether such information was submitted or considered
in the initial benefit determination.

For purposes of this Article 6, the term “Appeals Fiduciary” means an individual or
group of individuals appointed to review appeals of claims for benefits payable due
to the Executive’s Disability.

	 	6.6.4	 	Application for Review.

	 	(a)	 	If a claimant wishes a review of the decision denying his
claim to benefits under the Agreement, other than a claim described in clause
(b) of this Section 6.1.4, he must submit the written application to the Plan
Administrator within sixty (60) days after receiving written notice of the
denial.
	 
	 	(b)	 	If the claimant wishes a review of the decision denying his
claim to benefits under the Agreement due to the Executive’s Disability, he

 

 

	 	 	 	must submit the written application to the Appeals Fiduciary within one
hundred eighty (180) days after receiving written notice of the denial.
With respect to any such claim, in deciding an appeal of any denial 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),
the Appeals Fiduciary shall:

	 	(i)	 	consult with a health care professional who
has appropriate training and experience in the field of medicine
involved in the medical judgment; and
	 
	 	(ii)	 	identify the medical and vocational experts
whose advice was obtained on behalf of the Agreement in connection
with the denial without regard to whether the advice was relied upon
in making the determination to deny the claim.

	 	 	 	Notwithstanding the foregoing, the health care professional consulted pursuant to
this clause (b) shall be an individual who was not consulted with respect to the
initial denial of the claim that is the subject of the appeal or a subordinate of
such individual.
	 
	 	6.6.5	 	Hearing. Upon receiving such written application for review, the Plan
Administrator or Appeals Fiduciary, as applicable, may schedule a hearing for purposes
of reviewing the claimant’s claim, which hearing shall take place not more than thirty
(30) days from the date on which the Plan Administrator or Appeals Fiduciary received
such written application for review.
	 
	 	6.6.6	 	Notice of Hearing. At least ten (10) days prior to the scheduled hearing,
the claimant and his representative designated in writing by him, if any, shall
receive written notice of the date, time, and place of such scheduled hearing. The
claimant or his representative, if any, may request that the hearing be rescheduled,
for his convenience, on another reasonable date or at another reasonable time or
place.
	 
	 	6.6.7	 	Counsel. All claimants requesting a review of the decision denying their
claim for benefits may employ counsel for purposes of the hearing.
	 
	 	6.6.8	 	Decision on Review. No later than sixty (60) days (forty-five (45) days
with respect to a claim for benefits due to the Executive’s Disability) following the
receipt of the written application for review, the Plan Administrator or the Appeals
Fiduciary, as applicable, shall submit its decision on the review in writing to the
claimant involved and to his representative, if any, unless the Plan Administrator or
Appeals Fiduciary determines that special circumstances (such as the need to hold a
hearing) require an extension of time, to a day no later than one hundred twenty (120)
days (ninety (90) days

 

 

	 	 	 	with respect to a claim for benefits due to the Executive’s Disability) after the
date of receipt of the written application for review. If the Plan Administrator
or Appeals Fiduciary determines that the extension of time is required, the Plan
Administrator or Appeals Fiduciary shall furnish to the claimant written notice of
the extension before the expiration of the initial sixty (60) day (forty-five (45)
days with respect to a claim for benefits due to the Executive’s Disability)
period. The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Plan Administrator or Appeals Fiduciary
expects to render its decision on review. In the case of a decision adverse to the
claimant, the Plan Administrator or Appeals Fiduciary shall provide to the claimant
written notice of the denial which shall include:

	 	(a)	 	the specific reasons for the decision;
	 
	 	(b)	 	specific references to the pertinent provisions of the
Agreement on which the decision 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 to the claimant’s claim for
benefits;
	 
	 	(d)	 	an explanation of the Agreement’s claim review procedures,
and the time limits applicable to such procedures, including a statement of
the claimant’s right to bring an action under Section 502(a) of ERISA
following the denial of the claim upon review;
	 
	 	(e)	 	in the case of a claim for benefits due to the Executive’s
Disability, if an internal rule, guideline, protocol or other similar
criterion is relied upon in making the adverse determination, either the
specific rule, guideline, protocol or other similar criterion; or a statement
that such rule, guideline, protocol or other similar criterion was relied upon
in making the decision and that a copy of such rule, guideline, protocol or
other similar criterion will be provided free of charge upon request;
	 
	 	(f)	 	in the case of a claim for benefits due to the Executive’s
Disability, if a denial of the claim is based on a medical necessity or
experimental treatment or similar exclusion or limit, an explanation of the
scientific or clinical judgment for the denial, an explanation applying the
terms of the Agreement to the claimant’s medical circumstances or a statement
that such explanation will be provided free of charge upon request; and
	 
	 	(g)	 	in the case of a claim for benefits due to the Executive’s
Disability, a statement regarding the availability of other voluntary
alternative dispute resolution options.

     Article 7 of the Agreement shall be deleted in its entirety and replaced by the following:

 

 

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 auditors or banking regulators or to comply with
legislative changes or tax law, including without limitation Section 409A of the Code and any
and all Treasury regulations and guidance promulgated thereunder.
	 
	 	 	No amendment shall provide for or otherwise permit any acceleration of the time or schedule
of any payment under the Agreement in a manner that would be prohibited under Code Section
409A(a)(3).

	7.2	 	Plan Termination Generally. The Bank and Executive may terminate this Agreement at any time.
The benefit payable hereunder 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, after 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, this Agreement terminates in the following circumstances:

	 	(a)	 	Within thirty (30) days before or twelve (12) months after a Change in
Control, 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;

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.

          Section 8.12 shall be deleted in its entirety and replaced by the following:

	8.12	 	Tax Withholding and Reporting. The Bank shall withhold any taxes that, in its reasonable
judgment, are required to be withheld, including but not limited to taxes owed under Section
409A of the Code and regulations thereunder and employment (e.g. FICA) taxes due to be paid by
the Bank pursuant to Code Section 3121(v) (i.e., FICA taxes on the present value of payments
hereunder which are no longer subject to vesting). 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. Executive agrees
that appropriate amounts for withholding may be deducted from the cash salary, bonus or other
payments due to the Executive by the Bank to satisfy the employee-portion of such obligations.
If insufficient cash wages are available or if the Executive so desires, Executive shall
remit payment in cash for the withholding amounts.

         The following Section 8.18 shall be added to the Agreement immediately following Section 8.17:

	8.18	 	Compliance with Section 409A. This Agreement shall at all times be administered and the
provisions of this Agreement 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.

         IN WITNESS OF THE ABOVE, the Bank, the Corporation and the Executive hereby consent to this
First Amendment.

	 	 	 	 	 	 	 
	EXECUTIVE:	 	BANK:	 	 
	 	 	CAPITAL BANK & TRUST COMPANY	 	 
	 
	 	 	 	 	 	 
	/s/ Sally P, Kimble

	 	By
	 	/s/ Albert J. Dale III	 	 
	 

	 	 	 	 	 	 
	Sally P. Kimble

	 	Title
	 	Chairman Compensation Committee	 	 

 

 

	 	 	 	 	 	 	 
	 	 	CORPORATION:	 	 
	 	 	CAPITAL BANCORP, INC.	 	 
	 
	 

	 	By
	 	/s/ Albert J. Dale III	 	 
	 

	 	 	 	 	 	 
	 

	 	Title
	 	Chairman Compensation CommitteeEX-10.7

 

EXHIBIT 10.7

Capital Bancorp, Inc.

Director Deferred Stock Compensation Plan

 

Effective December 20, 2006

 

 

Article 1.

DEFINITIONS

     The following sections of this Article 1 provide basic definitions of terms used
throughout this Plan, and whenever used herein in a capitalized form, except as otherwise expressly
provided, the terms will be deemed to have the following meanings:

	1.1	 	“Account”. The record of a Participant’s interest in this Plan represented by the
Deferrals, with all earnings thereon credited to such Account on behalf of the Participant
under this Plan and all losses, expenses, withdrawals and distributions thereon debited from
such Account.
	 
	1.2	 	“Affiliate”. (i) any entity that, directly or indirectly, is controlled by the
Company, (ii) any entity in which the Company has a significant equity interest, (iii) an
affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the
Exchange Act, and (iv) any entity in which the Company has at least twenty percent (20%) of
the combined voting power of the entity’s outstanding voting securities, in each case as
designated by the Board as being a participating employer in the Plan.
	 
	1.3	 	“Bank.” Capital Bank & Trust, Company, a Tennessee banking corporation and
wholly-owned subsidiary of the Company.
	 
	1.4	 	“Beneficiary”. The person or persons designated pursuant to Article 7 herein, by a
Participant to receive such payments as may become payable hereunder after the death of a
Participant.
	 
	1.5	 	“Board”. The board of directors of the Company and the board of directors of the
Bank.
	 
	1.6	 	“Change in Control”. A change in ownership of the Company, a change in effective
control of the Company, or a change in ownership of a substantial portion of the assets of the
Company all within the meaning of IRS Code Section 1.409A-3(g)(5)(v) through (vii) or any
successor thereto.
	 
	1.7	 	“Committee”. The committee appointed by the Board to manage and control the
operation and administration of this Plan.
	 
	1.8	 	“Company”. Capital Bancorp, Inc. and any Affiliates that adopt the Plan, with the
company’s approval, for their directors, or any successor entity by operation of law or any
successor entity which affirmatively adopts the Plan, the trust, if any, and the obligations
of Capital Bancorp, Inc. with respect to the Plan.
	 
	1.9	 	“Company Stock”. The common stock of Capital Bancorp, Inc., no par value, or any
security into which Company Stock may be converted by reason of

 

 

	 	 	any transaction or event of the type referred to in Section 4.5 hereof or a Change in
Control.
	 
	1.10	 	“Deferrals”. The portion of a Participant’s Director Compensation to be paid during
a Plan Year, for which a Participant elects to have payment deferred into a future Plan Year.
In the event of a Participant’s Termination of Director Service prior to the end of a Plan
Year, such year’s Deferral shall be the actual amount deferred and withheld prior to such
Termination of Director Service.
	 
	1.11	 	“Deferral Election” or “Election”. An irrevocable election made by a Director in
accordance with the requirements of the Plan to reduce such Participant’s Director
Compensation, as the case may be, for a Plan Year.
	 
	1.12	 	“Deferral Election Form”. The form established from time to time by the Committee
that an Eligible Director completes, signs and returns to the Committee to make a Deferral
Election.
	 
	1.13	 	“Deferral Amount”. The percentage or dollar amount of a Participant’s Director
Compensation for a Plan Year, which pursuant to such Participant’s Deferral Election, is to be
deferred in accordance with this Plan.
	 
	1.14	 	“Director”. A member of the Board.
	 
	1.15	 	“Director Compensation”. The Director Compensation paid to a Director for service as
a Director by the Company in the form of either a retainer or fee.
	 
	1.16	 	“Effective Date”. December 20, 2006.
	 
	1.17	 	“Internal Revenue Code” or “Code”. The Internal Revenue Code of 1986, as amended
from time to time.
	 
	1.18	 	“Market Value”. The closing market price of Capital Bancorp, Inc. Company Stock.
	 
	1.19	 	 “Notice Date”. The date established by the Committee as the deadline for it to
receive a Deferral Election or any other notification with respect to an administrative matter
in order to be effective under this Plan. Notwithstanding anything to the contrary, the
Notice Date with respect to a Deferral Election will be such date as will be determined by the
Committee (1) before January 1 of the year during which Director Compensation to be deferred
will be earned by the Participant, and (2) in the year in which a newly-elected Director first
becomes eligible to participate in the Plan, such Director may make a Deferral Election within
thirty (30) days after the date on which such Director first becomes eligible for
participation.
	 
	1.20	 	“Participant”. A Director who voluntarily elects to participate in this Plan after
completing the eligibility requirements and properly filing a Deferral Election

 

 

	 	 	Form. An individual will remain a Participant until the distribution of the balance of all
of such Participant’s Account.
	 
	1.21	 	“Plan”. This Capital Bancorp, Inc. Director Deferred Stock Compensation Plan, as it
may be validly amended from time to time.
	 
	1.22	 	“Plan Year”. The annual accounting period of this Plan which ends on each December
31.
	 
	1.23	 	“Spouse”. The person to whom a Participant is validly married under the laws of the
State of the Participant’s primary residence; provided however, if the Participant is legally
separated from a person who would otherwise be such Participant’s Spouse (but for this
provision), then such person will cease to be such Participant’s Spouse. For this purpose, a
common law Spouse is a Spouse only if the Participant resides in a State that legally
recognizes common law marriages. A person to whom a Participant was formerly married is not a
Spouse.
	 
	1.24	 	“Termination of Director Service”. Occurs when a Director ceases to serve as a member
of the Board of Directors of the Company, whether by operation of the Bylaws of the Company,
voluntary resignation, removal by the Board or nonelection by the Shareholders, provided the
Director is considered to have separated from service within the meaning of Code Section 409A.
	 
	1.25	 	“Unforeseeable Financial Emergency”. A severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s Spouse, or a
dependent (as defined in Code Section 152(a)) of the participant, loss of the participant’s
property; due to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant, all as determined in the
sole discretion of the Committee and consistent with Code Section 409A.

 

 

Article 2

PARTICIPATION

	2.1	 	Eligibility. All Directors are eligible to participate in the Plan.
	 
	2.2	 	Participation. Each Director may elect to become a Participant under the Plan by
completing, signing and returning to the Committee a Deferral Election Form provided for that
purpose by the Committee, no later than the designated Notice Date.

 

 

Article 3

PARTICIPANT DEFERRAL ELECTIONS

	3.1	 	Director Deferral Election. A Director may elect to defer a portion of such
Director’s Director Compensation under the Plan. A Director who desires to make a Deferral
will file a Deferral Election Form pursuant to procedures specified by the Committee (i)
specifying the applicable Deferral Amount, and (ii) authorizing such Director’s Director
Compensation payable for a Plan Year to be reduced and deferred hereunder.
	 
	3.2	 	Election Procedures. If properly received by the Committee on or before the relevant
Notice Date, a Deferral Election will be effective with respect to Director Compensation paid
after the election is made and with respect to the Plan Years to which the Deferral Election
applies as stated on the Deferral Election Form. Consistent with the above, the Committee may
establish rules and procedures for making Deferral Elections, provided such rules and
procedures are not more permissive than the terms and provisions of this Plan.
	 
	3.3	 	Election to Modify or Terminate Future Contributions. All Deferral Elections
hereunder are irrevocable after the Notice Date. A Participant who desires to modify or
terminate the amount of future Director Compensation being deferred under the Plan must
complete a new Deferral Election Form, and any election to increase, decrease or terminate
Deferrals of Director Compensation shall not be effective until the calendar year following
the calendar year in which such change in deferral elections is made, except as otherwise
provided herein and permitted by Code Section 409A.
	 
	3.4	 	Vesting. A Participant will be fully vested at all times in his or her Account.

 

 

Article 4

DEFERRALS AND ACCOUNTS

	4.1	 	Deferrals. A Participant’s Deferrals under Article 4 herein shall be credited to
an Account maintained for each Participant as described in Section 4.2. All amounts credited
to a Participant’s Account will be treated as a reduction of Director Compensation otherwise
payable to such Participant. Distributions pursuant to Articles 5 and 6 shall be debited
against a Participant’s Account.
	 
	4.2	 	Valuation of Accounts. The Account is a bookkeeping account, the value of which
shall be based upon the Market Value of Company Stock. Deferrals will be credited to the
Account in the form of units, each reflecting one share of Company Stock. Fractional units
will also be credited to such account, if applicable. The number of such credited units will
be determined by dividing the value of the Director Compensation that would have been paid
during a calendar quarter had it not been deferred, by the Market Value per share of the
Company Stock on the last day of that calendar quarter on which shares of Company Stock
traded. The Account shall be credited with additional units upon payment of any dividends on
Company Stock based on the number of units credited on the record date for such dividends, and
such dividends shall be credited as units as if the dividends were immediately reinvested in
such Company Stock. Notwithstanding the foregoing, the terms of this Plan place no obligation
upon the Company to invest or to continue to invest any portion of the amounts in the
Participant’s Account, to invest in or to continue to invest in any specific asset, to
liquidate any particular investment, or to apply in any specific manner the proceeds from the
sale, liquidation, or maturity of any particular investment. It is understood and agreed that
the Company assumes no risk of any decrease in the value of Company Stock or the Participant’s
Account, and the Company’s sole obligations are to maintain the Participant’s Account and make
cash payments or transfer Company Stock to the Participant as herein provided.
	 
	4.3	 	Appreciation of Deferral Account Balance. Credits to a Participant’s Account in
accordance with this Article 4 shall continue until the Account balance is paid in full to the
Participant or the Participant’s Beneficiary.
	 
	4.4	 	Statement of Account. The Company shall provide periodically to each Participant
(but not less frequently than once each calendar year) a statement setting forth the Account
balance of such Participant.
	 
	4.5	 	Adjustments. The number of shares of Common Stock credited to a Participant’s Account
shall be appropriately adjusted and modified upon the occurrence of any dividend or other
distribution (whether in the form of cash, shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares or other securities of the

 

 

	 	 	Company, issuance of warrants or other rights to purchase shares or other securities of the
Company, or other similar corporate transaction or event in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under this
Plan The determination of the Committee as to such adjustments or modifications, if any,
shall be binding and conclusive.

 

 

Article 5

WITHDRAWALS

	5.1	 	Withdrawals for Hardship. At the request of a Participant in the event of an
Unforeseeable Financial Emergency, the Committee may, in its sole discretion, accelerate and
pay all or part of the value of the Participant’s Account and cease current year Deferrals to
the extent permitted under Code Section 409A. An accelerated distribution hereunder for an
Unforeseeable Financial Emergency must be limited to only that amount necessary to relieve the
Unforeseeable Financial Emergency (plus any appropriate taxes). Amounts distributed to a
Participant hereunder will be subject to applicable tax withholding.
	 
	5.2	 	Withdrawal Processing.

	 	5.2.1	 	Minimum Amount. There is no minimum payment for hardship
withdrawal.
	 
	 	5.2.2	 	Application by Participant. To apply for hardship withdrawal, a
Participant must submit to the Committee a withdrawal request, in accordance with such
uniform and nondiscriminatory procedure as will be established by the Committee.
	 
	 	5.2.3	 	Approval by Committee. The Committee is responsible for determining
that a withdrawal request conforms to the requirements described in this Article and
notifying the Company of any payments to be made in a timely manner. The Committee’s
decision to allow a Participant to withdraw all or part of such Participant’s Account
in connection with a financial need will be based on the facts and circumstances of
each case. However, in no event will the amount withdrawn exceed the lesser of the
amount which the Committee deems necessary to satisfy such financial need (plus any
appropriate taxes) or the balance of such Participant’s Account. Any request to make
a withdrawal by a member of the Committee may be approved only by disinterested
members of the Committee, or if none, by the Board.
	 
	 	5.2.4	 	Time of Processing. The Company will make payment to the
Participant as soon as is administratively feasible following approval of the
withdrawal request; provided however, if such payment will result in any portion of
the payment (or any other amount paid to such Participant during the same Plan Year)
not being deductible by reason of Code section 162(m), the Committee may defer payment
to the earliest later payment date on which such payment would not be nondeductible,
provided that the Committee determines that the Participant continues to have an
Unforeseeable Financial Emergency

 

 

	 		 	on the date of actual payment.
	 
	 	5.2.5	 	Medium and Form of Payment. The medium of payment for all
withdrawals is shares of Company Stock (based on the number of whole units in a
participant’s account) plus a nominal cash payment determined by multiplying (i) any
fractional unit, by (ii) the Market Value per share on the most recent day preceding
the distribution date on which shares of Company Stock traded.

 

 

Article 6

DISTRIBUTIONS

	6.1	 	Distribution of Account Balance. Distribution of the value of a Participant’s
Account balance for any Plan Year in which the Participant made a Deferral shall be made
beginning in a specified year (the “Year Certain”) or following Termination of Director
Services, as stated on the Deferral Election, and shall be paid in a lump sum or in annual
installments over a period of no more than ten (10) years, as specified by the Participant on
the Deferral Election Form for that Plan Year. If a Participant makes different Deferral
Elections for different Plan Years, then there may be different distribution periods for
different Plan Years. If the timing of distribution or a payment form is not specified on a
Deferral Election Form for any particular Plan Year in which the Participant made a Deferral,
the Participant’s Account balance for that Plan Year shall be distributed in a lump sum in
Company stock plus a nominal cash payment related to any fractional share held in the account
within 60 calendar days after the Participant’s Termination of Director Service. If any
distribution will result in any portion of the payment (or any other amount paid to such
Participant during the same Plan Year) not being deductible by reason of Code section 162(m),
the Committee may defer payment to the earliest date on which the Committee reasonably
anticipates such payment will be deductible.
	 
	6.2	 	Form of Payment. Distributions of a Participant’s Account balance will be made in
the form of shares of Company Stock plus a nominal cash payment determined by multiplying (i)
any fractional unit in the Account, by (ii) the Market Value per share as of the most recent
day preceding the distribution date on which shares of Company Stock traded.
	 
	6.3	 	Time of Payment.

	 
	 	6.3.1	 	Year Certain Deferrals. If the Participant remains a Director until the Year
Certain elected, all amounts relating to a Year Certain deferral will be paid in a
single distribution in January of the Year Certain elected, or in up to ten (10) annual
installments payable each January commencing with the Year Certain elected, as
designated by the Participant on the Deferral Election Form. Annual installments will
be paid in an amount determined by dividing (i) the number of units credited to the
Account, by (ii) the number of then remaining annual installment payments. The nominal
cash payment for a fractional unit will be paid with the single distribution or first
annual installment. 
	 
	 	6.3.2	 	Timing of Distribution Upon Termination of Director Service. Distributions
shall commence, or be paid in a lump sum if so elected by

 

 

	 	 	 	the Participant on his Deferral Election Form, in January of the year following
Termination of Director Service, if they have not commenced earlier under Section
6.3.1. Annual installments shall be paid in an amount determined by dividing (i)
the number of units credited to the Account, by (ii) the number of then remaining
annual installment payments.
	 
	 	6.3.3	 	Death of a Participant Subsequent to Commencement of Distribution Payments. In
the event of the death of a Participant subsequent to the commencement of payments
hereunder but prior to completion of such payments, the installments shall continue and
shall be paid to the designated Beneficiary as if the Participant had survived.

	6.4	 	One Permitted Delay of Payment Elected. A Participant will be permitted to timely
elect a later Year Certain, or to change the number of annual installments (up to the maximum
permitted under Section 6.1 herein) for previous Deferrals, provided that the payment delay
election must be made at least one full calendar year prior to the date on which such
distribution would otherwise have been made in the absence of such payment delay election and
each payment must be delayed for at least five years later than the original payment date, and
any such delay election must be made in such manner as is provided for by the Committee and
consistent with Code Section 409A.
	 
	6.5	 	Section 16(b) Restrictions. Notwithstanding any other provision of this Plan, the
Committee shall adopt such procedures as it may determine are necessary to ensure that with
respect to any Participant who is actually or potentially subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended, the crediting of deemed shares to such
Participant’s Account is not deemed to be a non-exempt purchase for purposes of Section 16(b).

 

 

Article 7

BENEFICIARY

	7.1	 	Beneficiary Designation. A Participant shall designate a Beneficiary to receive
benefits under the Plan on the Deferral Election Form provided by the Committee. If more than
one Beneficiary is named, the share and/or precedence of each Beneficiary shall be indicated.
A Participant shall have the right to change the Beneficiary at any time by submitting to the
Committee a new Deferral Election Form on which the new Beneficiary is named.
	 
	7.2	 	Proper Beneficiary. If the Committee has any doubt as to the proper Beneficiary to
receive payments hereunder, the Committee shall have the right to withhold such payments until
the matter is finally adjudicated. However, any payment made by the Committee, in good faith
and in accordance with this Plan, shall fully discharge the Company from all further
obligations with respect to that payment.
	 
	7.3	 	Minor or Incompetent Beneficiary. In making any payments to or for the benefit of
any minor or an incompetent Beneficiary, the Committee, in its sole and absolute discretion,
may make a distribution to a legal or natural guardian or other relative of a minor or court
appointed committee of such incompetent. Alternatively, it may make a payment to any adult
with whom the minor or incompetent temporarily or permanently resides. The receipt by a
guardian, committee, relative or other person shall be a complete discharge to the Company.
Neither the Company nor the Committee shall have any responsibility to see to the proper
application of any payments so made.
	 
	7.4	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Section 7.1 above, or if all designated Beneficiaries predecease the Participant
or die prior to complete distribution of the Participant’s benefits, then the Participant’s
designated Beneficiary shall be deemed to be his or her surviving Spouse. If the Participant
has no surviving Spouse, the benefits remaining under the Plan to be paid to a Beneficiary
shall be payable to the executor or personal representative of the Participant’s estate.

 

 

Article 8

ADMINISTRATION OF THE PLAN

	8.1	 	Majority Vote. All resolutions or other actions taken by the Committee shall be
by vote of a majority of those present at a meeting at which a majority of the members are
present, or in writing by all the members at the time in office if they act without a meeting.
Such resolutions or actions shall be confirmed in writing by a Board resolution.
	 
	8.2	 	Finality of Determination. Subject to the Plan, the Committee shall, from time to
time, establish rules, forms and procedures for the administration of the Plan. Except as
herein otherwise expressly provided, the Committee shall have the exclusive right and
discretion to interpret the Plan and to decide any and all matters arising thereunder or in
connection with the administration of the Plan, and it shall endeavor to act, whether by
general rules or by particular decisions, so as not to discriminate in favor of or against any
person. The interpretations, decisions, actions, factual determinations and records of the
Committee shall be conclusive and binding upon the Company and all persons having or claiming
to have any right or interest in or under the Plan, and cannot be overruled by a court of law
unless arbitrary or capricious.
	 
	8.3	 	Certificates and Reports. The members of the Committee and the officers and
directors of the Company shall be entitled to rely on all certificates and reports made by any
duly appointed accountants, and on all opinions given by any duly appointed legal counsel,
which legal counsel may be counsel for the Company.
	 
	8.4	 	Indemnification and Exculpation. The Company shall indemnify and hold harmless each
current and former member of the Committee and each current and former member of the Board
against any and all expenses and liabilities (to the extent not indemnified under any
liability insurance contract or other indemnification agreement) which the person incurs on
account of any act or failure to act in connection with the good faith administration of the
Plan. Expenses against which a member of the Committee shall be indemnified hereunder shall
include, without limitation, the amount of any settlement or judgment, costs, counsel fees,
and related charges reasonably incurred in connection with a claim asserted, or a proceeding
brought or settlement thereof. The foregoing right of indemnification shall be in addition to
any other rights to which any such member of the Committee may be entitled as a matter of law,
but shall be conditioned upon the person’s notifying the Company of the claim of liability
within 60 days of the notice of that claim and offering the Company the right to participate
in and control the settlement and defense of the claim. The foregoing provision will not be
applicable to any person if the loss, cost, liability, or expense is due to such person’s
gross negligence or willful misconduct.

 

 

	8.5	 	Expenses. The expenses of administering the Plan shall be borne by the Company.

 

 

Article 9

CLAIMS PROCEDURE

	9.1	 	Written Claim. Benefits shall be paid in accordance with the provisions of this
Plan. The Participant, or a designated Beneficiary or any other person claiming through the
Participant shall make a written request for benefits under this Plan. This written claim
shall be mailed or delivered to the Committee. Such claim shall be reviewed by the Committee
or a delegate.
	 
	9.2	 	Denied Claim. If the claim is denied, in full or in part, the Committee shall
provide a written notice within ninety (90) days setting forth the specific reasons for
denial, and any additional material or information necessary to perfect the claim, and an
explanation of why such material or information is necessary, and appropriate information and
explanation of the steps to be taken if a review of the denial is desired.
	 
	9.3	 	Review Procedure. If the claim is denied and a review is desired, the Participant
(or Beneficiary) shall notify the Committee in writing within sixty (60) days after receipt of
the written notice of denial. In requesting a review, the Participant or Beneficiary may
request a review of pertinent documents with regard to the benefits created under this
agreement, may submit any written issues and comments, may request an extension of time for
such written submission of issues and comments, and may request that a hearing be held, but
the decision to hold a hearing shall be within the sole discretion of the Committee.
	 
	9.4	 	Committee Review. The decision on the review of the denied claim shall be rendered
by the Committee within sixty (60) days after the receipt of the request for review (if no
hearing is held) or within sixty (60) days after the hearing if one is held. The decision
shall be written and shall state the specific reasons for the decision including reference to
specific provisions of this Plan on which the decision is based.

 

 

Article 10

NATURE OF COMPANY’S OBLIGATION

	10.1	 	Company’s Obligation. The Company’s obligations under this Plan shall be an
unfunded and unsecured promise to pay. The Company shall not be obligated under any
circumstances to fund its financial obligations under this Plan.
	 
	10.2	 	Creditor Status. Any assets which the Company may acquire or set aside to help cover
its financial liabilities are and must remain general assets of the Company subject to the
claims of its creditors. Neither the Company nor this Plan gives a Participant or Beneficiary
any beneficial ownership interest in any asset of the Company. In the event that the Company
elects to invest funds to offset Account balances under the terms of this Plan, title to and
beneficial ownership of such assets shall at all times remain with the Company.

 

 

Article 11

AMENDMENT AND TERMINATION

	11.1	 	Prior to a Change in Control. The Company reserves the right to amend this Plan
from time to time by action of the Board. No such action may reduce or relieve the Company of
any obligation with respect to the balance of an Account maintained under this Plan with
respect to a Participant (or Beneficiary) as of the date of such amendment, without the
written consent of such affected Participant (or Beneficiary).
	 
	11.2	 	Change in Control. Upon the occurrence of a Change in Control, the Board may elect
to terminate the Plan and distribute Accounts, provided that all distributions are made within
12 months of the Change in Control and all plans aggregated with the Plan are also so
terminated, subject to compliance with Code Section 409A.
	 
	11.3	 	Termination. The Company, by action of the Board, reserves the right to
prospectively terminate this Plan, provided the Company pays to each Participant and
Beneficiary their full Account within two years of the termination and all plans aggregated
with the Plan under Code Section 409A are also so terminated. Upon termination, all Accounts
shall be paid in shares of Company Stock plus a nominal cash payment determined by multiplying
(i) any fractional unit in the account, by (ii) the closing stock price on the trading day
preceding the distribution date, in a lump sum on the date specified by the Company. In
accordance with Code Section 409A, no payments will be made within the first 12 months after
plan termination other than for payments that would have been made but for the termination of
the Plan and affected Participants will not be included in any similar, new plan for at least
five years.

 

 

Article 12

MISCELLANEOUS PROVISIONS

	12.1	 	Corporate Action. Any action required of or permitted by the Company under this
Plan will be by resolution of its Board, the Committee or any person or persons authorized by
resolution of the Committee.
	 
	12.2.	 	Interests not Transferable. Except insofar as prohibited by applicable law, no
sale, transfer, alienation, assignment, pledge, collateralization or attachment of any
benefits under this Plan shall be valid or recognized by the Company. Neither the
Participant, Spouse, or designated Beneficiary shall have any power to hypothecate, mortgage,
commute, modify, or otherwise encumber in advance any of the benefits payable hereunder, nor
shall any of said benefits be subject to seizure for the payment of any debts, judgements,
alimony maintenance, owed by the Participant or Beneficiary, or be transferable by operation
of law in the event of bankruptcy, insolvency, or otherwise.
	 
	12.3	 	Effect on Other Benefit Plans. The treatment under other Director benefits plans
maintained by the Company of amounts credited or paid under this Plan will be determined
pursuant to the provisions of such plans.
	 
	12.4	 	Legal Fees and Expenses. After a Change in Control, the Company will pay all
reasonable legal fees and expenses which the Participant or a Beneficiary may incur as a
result of the Company’s contesting the validity, enforceability, or the Participant’s (or the
Beneficiary’s) interpretation of, or determinations made under, this Plan.
	 
	12.5	 	Right to Offset. Prior to a Change in Control, any amount owed to the Company by a
Participant of whatever nature may be offset by the Company from the value of any benefit
otherwise payable hereunder as of the date payment would otherwise be made to the Participant.
	 
	12.6	 	Facility of Payment. If a Participant or Beneficiary is declared an incompetent or
is a minor and a conservator, guardian, or other person legally charged with his or her care
has been appointed, any benefits to which such Participant or Beneficiary is entitled will be
payable to such conservator, guardian, or other person legally charged with his or her care.
The decision of the Committee in such matters will be final, binding, and conclusive upon the
Company and upon each Participant, Beneficiary, and every other person or party interested or
concerned. The Company and the Committee will not be under any duty to see to the proper
application of such payments.
	 
	12.7	 	Merger. This Plan will be binding and enforceable with respect to the obligation of
the Company against any successor to the Company by operation of law or by express assumption
of the Plan, and such successor will be substituted hereunder for the Company.

 

 

	12.8	 	Gender and Number. Except when the context indicates to the contrary, when used
herein, masculine terms will be deemed to include the feminine, and singular the plural.
	 
	12.9	 	Invalidity of Certain Provisions. If any provision of this Plan will be held invalid
or unenforceable, such invalidity or unenforceability will not affect any other provisions
hereof and this Plan will be construed and enforced as if such provisions, to the extent
invalid or unenforceable, had not been included.
	 
	12.10	 	Headings. The headings or articles are included solely for convenience of
reference, and if there is any conflict between such headings and the text of this Plan, the
text will control.
	 
	12.11	 	Notice and Information Requirements. Except as otherwise provided in this Plan or
as otherwise required by law, the Company will have no duty or obligation to affirmatively
disclose to any Participant or Beneficiary, nor will any Participant or Beneficiary have any
right to be advised of, any material information regarding the Company.
	 
	12.12	 	Code Section 409A. The terms of this Plan are intended to comply with the provisions
of Code Section 409A and the regulations promulgated hereunder. To the extent that any
provision of this Plan document or any election permitted hereunder violates such section or
regulations, it shall be deemed void and of no effect.
	 
	12.13	 	Governing Law. This Plan will be governed by the laws of the State of Tennessee,
without regard to the conflicts-of-law rules of such State, to the extent not preempted by the
laws of the United States of America.

             IN WITNESS WHEREOF, the Company has caused this Plan to be signed by its duly authorized
officer, and adopted on the 20th day of December, 2006.

	 	 	 	 	 	 	 
	 	 	CAPITAL BANCORP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ R. Rick Hart	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	Chairman, President and CEO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]