Document:

carter-ex10121xvbax2021d

Exhibit 10.12.1  NON-QUALIFIED DEFERRED COMPENSATION PLAN FOR DIRECTORS  (As Restated Effective January 1, 2018)  ADOPTION AGREEMENT    (Updated Form January 1, 2020)    This Adoption Agreement is the companion document that allows a corporation to sponsor and adopt the Virginia Bankers Association  Model Non-Qualified Deferred Compensation Plan for Directors (the “Plan”).  Each Corporation named below hereby adopts the Plan  through this Adoption Agreement (the “Adoption Agreement”), to be effective as of the date(s) specified below, and elects the following  specifications and provides the following information relating thereto.    In completing this Adoption Agreement, if additional space is required, insert additional sheets.     Adoption Agreement Contents   Page   Option 1 Corporation(s) Adopting Plan ............................................................................................... 1   Option 2 General Plan Information ...................................................................................................... 1   Option 3 Status of Plan and Effective Date(s) ..................................................................................... 2   Option 4 Definitions and Other Optional Provisions ........................................................................... 3   Option 5 Time and Form of Payments ................................................................................................. 5   Option 6  Hardship Withdrawals  .......................................................................................................... 7   Option 7 Participant Deemed Investment Direction ............................................................................ 7      1. CORPORATION(S) ADOPTING PLAN.     (a) Name of Plan Sponsor:  Carter Bank & Trust  (b) Plan Sponsor’s Telephone   Number:   276-629-3331   (c) Address of Plan Sponsor:  9112 Virginia Avenue  Bassett, VA 24055-4859   (d) Plan Sponsor’s EIN:   20-5539935  (e) Plan Sponsor’s Tax Year   End:   12/31   (f) Other Participating Corporations Adopting the Plan:      (1) All Affiliates are automatically participating Corporations in the Plan, except for the following:   ______________________________________________________________________________________ ____________________________________________________________________________________.        (2) Each participating Corporation is listed individually on the attachment captioned “List of Participating  Corporations,” which shall be updated as needed from time to time in compliance with ARTICLE XIII of the  basic plan document.       2. GENERAL PLAN INFORMATION.     (a) Name of Plan:  Carter Bank & Trust Nonqualified Deferred Compensation Plan  (b) Name, Address and EIN of Plan Administrator(s):  [If other than Plan Sponsor, appointment must be by resolution]           

 

 2    3. STATUS OF PLAN AND EFFECTIVE DATE(S).     (a) Effective Date of Plan:  The Effective Date of the Plan is October    1 , 2020 .     (b) Plan Status.  The adoption of the Plan through this Adoption Agreement is:      (1) Initial Establishment.  The initial adoption and establishment of the Plan.      (2) Restated Plan.  An amendment and restatement of the Plan (a Restated Plan).    (A) Effective Date of this Restatement.  The Effective Date of this Restatement is  January 1, 2022.    (B) Prior Plan.  The Plan was last maintained under document dated     , _____  and was known as the                                                        .    (C) 409A Transitional Provisions (grandfathering election):        Election NOT to Grandfather Pre-January 1, 2005 Vested Balances.  If this Option is elected,  all Deferral Accounts shall be subject to the rules set forth in the post-December 31, 2004  restatements.       If the Option is not elected, the Deferral Accounts attributable to transfers from predecessor  plans prior to December 31, 2004 and contributions that are vested as of December 31, 2004  shall be segregated from the Deferral Accounts attributable to contributions that are not  vested as of December 31, 2004 and to contributions and transfers made on and after January  1, 2005.  The terms of the Plan in effect on and after January 1, 2005 shall only apply to  transfers and contributions that are not vested as of December 31, 2004 and to contributions  and transfers made on and after January 1, 2005.        (3) Special or Other Transitional Provisions.  [Use attachment if additional space is needed]      [Enter any special provisions including alternate definitions or other transitional provisions relating  to any Predecessor Plan Account and the Plan as restated]                                                           

 

 3    4. DEFINITIONS AND OTHER OPTIONAL PROVISIONS.    (a)  Compensation   Paragraph 1.10  Compensation is used throughout the basic plan document for different purposes.   The following specific rules apply.   (1) General Definition.  The Compensation definition in paragraph 1.10 of  the basic plan document is modified as follows:      (A) Retainer.  Retainer is more specifically defined to mean:                                                                (B) Fees.  Fees is more specifically defined to mean:                                                                (2) Specific Definitions.  When used with respect to Deferral Contributions  under the Plan, Compensation shall include:  [Check one]     (A) Retainer.     (B) Fees.     (C) Retainers and Fees.    (b) Eligible Director Eligible Director shall mean only the following:   Paragraph 1.19    (1) All Directors.  Any individual serving as a Director of the  Corporation.      (2) All Non-Employee Directors.  Any individual serving as a  Director of the Corporation, except Directors who are also  common law employees of the Corporation.      (3) Determination by Board.  Any individual who is designated as  an Eligible Director by resolution of the  Plan Sponsor’s   Corporation’s Board.  A copy of the resolution shall be attached  to and incorporated by reference into the Plan.      (c) Plan Year   Paragraph 1.24     In the case of a Restated Plan, which prior to the Effective Date of this Restatement  was maintained on the basis of a Plan Year beginning on a date other than January  1, the Plan Year shall begin on           , ____ and end on    , ______,  with the short Plan Year beginning on      ,  _______ and ending on December 31, ________.  Thereafter, the Plan Year shall  be the 12-month period beginning each January 1.  

 

 4    (d) Effective Date   of Coverage  The effective date of coverage for an Eligible Director shall be [Check one]  Paragraph 2.1   (1) Immediate.  The first day of the first payroll period beginning  on or after the date the individual became an Eligible Director.     (2) Monthly.  The first day of the first payroll period beginning on  or after the first day of _________  [Complete with 1st, 2nd, or  other] month next following the date the individual became an  Eligible Director.     (3) Semi-Annually.  The first day of the Plan Year or the first day  of the seventh month of the Plan Year on or next following the  date the individual became an Eligible Director.     (4) Annually.  The first day of the Plan Year on or next following  the date the individual became an Eligible Director.       (e) Cancellation of    Deferred Compensation    Election For Disability    Paragraph 3.5   If this Option is elected, the Plan Sponsor:     (1) Mandatory Cancellation.  Will cancel the Deferred  Compensation Election of an Eligible Director who experiences  a Disability as defined in subparagraph 3.5(b).     (2) Optional Cancellation.  May permit an Eligible Director who  experiences a Disability as defined in subparagraph 3.5(b) to  cancel his Deferred Compensation Election.    If this Option is not selected, no cancellation will be required or permitted upon the  occurrence of a Disability.      (f) Rules Relating to    Final Check of Year    If this Option is elected, Compensation payable after the last day of the calendar  year solely for services performed during the final payroll period which  contains the last day of the year will be treated as Compensation for services  performed in the taxable year in which the payroll period began.      If this Option is not elected, Compensation payable after the last day of the  calendar year solely for services performed during the final payroll period  which contains the last day of the year will be treated as Compensation for  services performed in the subsequent taxable year in which the payment is  made.      Any change in election relating to the final check of the Participant’s taxable  year may not be effective for 12 months from the date the amendment is adopted  and executed.      

 

 5      5. TIME AND FORM OF PAYMENTS.     (a) Benefit Commencement Date   Paragraph 7.1     Benefit Commencement Date shall mean the first day of the calendar quarter  coinciding with or next following the designated time or event as follows:   [Check one, and complete where applicable]     (1) Selected By Plan Sponsor.  The Plan Sponsor hereby selects  payment commencement on the Participant’s Separation from  Service as a Director of the Corporation for whatever reason.     If elected here , the Plan Sponsor elects for payment to be  accelerated upon a Change in Control, but only with respect to  contributions made after this Adoption Agreement is executed,  unless the Plan Sponsor previously made such an election under  Option 3(b)(3).     (2) Selected By Participant.  The date selected by the Participant in  accordance with the following: [Select options to be available  to Participant]     (A) The Participant’s Separation from Service as a  Director (for reasons other than death).     (B)  A date certain stated clearly in the Participant’s  Deferred Compensation Election form which shall be without  regard to when service as a Director ends.     (D) The earlier of a date certain or Separation from Service  as a Director (for reasons other than death).     (E) Change in Control.  The Participant may elect to have  payment accelerated upon a Change in Control.    (b) Form of Payment to Participant The form of payment to the Participant will be determined as follows:   Paragraph 7.2  [Check one, and complete where applicable]        (1) Selected By Plan Sponsor.  The Plan Sponsor selects the  following form of payment: [Select One]     (A) Lump Sum.  Deferral Benefits will be paid to the  Participant in a single, lump-sum payment.       (B) Periodic Installments.  Deferral Benefits will be paid  to the Participant in annual periodic installment payments made  over the following period: [Select One]       (i) Five (5) years.  

 

 6       (ii) Ten (10) years.       (iii) Fifteen (15) years.       (iv) Twenty (20) years.     (2) Selected By Participant.  The Participant may elect from among  the following forms of payment [Select options to be available  to Participants]     (A) Lump Sum.  Deferral Benefits may be paid to the  Participant in a single, lump-sum payment.       (B) Periodic Installments.  Deferral Benefits may be paid  to the Participant in annual periodic installment  payments made over the following period:       (i) Five (5) years.       (ii) Ten (10) years.       (iii) Fifteen (15) years.       (iv) Twenty (20) years.    (c) Form of Payment to Beneficiary  The form of payment to the Beneficiary will be determined as follows:   Paragraph 7.2  [Check one, and complete where applicable]     (1) Selected By Plan Sponsor.  The Plan Sponsor selects the  following form of payment to the Beneficiary: [Select One]     (A) Lump Sum.  Deferral Benefits will be paid to the  Beneficiary in a single, lump-sum payment.       (B) Periodic Installments.  Deferral Benefits will be paid  to the Beneficiary in annual periodic installment payments  made over the following period: [Select One]       (i) Five (5) years.        (ii) Ten (10) years.       (iii) Fifteen (15) years.       (iv) Twenty (20) years.     (2) Selected By Participant.  The Participant may elect the form of  payment to the Beneficiary from among the following forms of  payment [Select options to be available to Participants]     (A) Lump Sum.  Deferral Benefits may be paid to the  Beneficiary in a single, lump-sum payment.    

 

 7   (B) Periodic Installments.  Deferral Benefits may be paid  to the Beneficiary in annual periodic installment  payments made over the following periods:       (i) Five (5) years.       (ii) Ten (10) years.       (iii) Fifteen (15) years.       (iv) Twenty (20) years.      6. HARDSHIP WITHDRAWALS.    (a) Availability Generally A Participant [Check one]   Paragraph 8.1   (1) Not Permitted.  May not make Hardship Withdrawals.        (2) Permitted.  May make a Hardship Withdrawal for an  Unforeseeable Emergency.      7. PARTICIPANT DEEMED INVESTMENT DIRECTION.     (a) Availability Generally A Participant [Check one]   Paragraph 4.2   (1) Not Permitted.  May not make deemed investment directions.        (2) Permitted.  May make deemed investment directions for his  Deferral Account.    (b) Permissible Investments  Unless the Plan Sponsor elects a different option below, a Participant’s Deferral  Account may be invested in the investment funds which are designed to mirror  the investment options available under the VBA Plan as adopted by the Plan  Sponsor, to the extent legally practical, with alternate funds designated where  collective investment funds may not be offered under a nonqualified plan.     (1) VBA Plan Plus Company Stock.  In addition to the funds  available under the VBA Plan, a Company Stock Fund will also  be available for directed investment.       (2) VBA Plan Without Company Stock.  Regardless of whether a  Company Stock Fund is available under the VBA Plan, no  Company Stock Fund will be available for directed investment.       (3) Company Stock Only.  In lieu of the funds available under the  VBA Plan, a Company Stock Fund will be the only fund  available for directed investment.               

 

 8    IN WITNESS WHEREOF, each Corporation, by its duly authorized representatives, has executed this Adoption  Agreement this  26    day of   October, 2021   .        Carter Bank & Trust       [Enter Name of Plan Sponsor]       By  /s/ Bradford Langs       Its  President and Chief Strategy Officer      [SEAL]    ATTEST:       Its         Carter Bank & Trust       [Enter Name of Corporation]    By  /s/ Paul Carney        Its  Chief Human Resources Officer       [SEAL]    ATTEST:       Its               [Enter Name of Corporation]    By           Its            [SEAL]    ATTEST:       Its​

Exhibit 10.24
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January 10, 2022
Revised January 10, 2022
​
Alan Villalon
Maple Grove, MN
Alanv.nd95@gmail.com
​
Dear Alan:
​
Alerus was founded on a tradition of strong and lasting client relationships, integrity, and long-term sustainable growth. We are a successful financial services organization because of the quality of our people and because of our strong commitment to the clients and communities we serve. Our fundamental beliefs of doing the right thing, cherish people, empower with knowledge, respect everyone, serve with passion, and embrace change are at the core of everything we do and we're looking for people who embody these beliefs.
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We hope that you have found our discussions regarding the prospect of employment with Alerus insightful and exciting. We appreciate these conversations as they have provided us with the confidence to believe that you are an ideal candidate to join Alerus and will be strong contributor to the future success of our organization. We are pleased to extend this offer of employment to you for your consideration!
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POSITION DETAILS
	◾	Job Title: EVP, Chief Financial Officer

	◾	Workplace Location: Shorewood, MN

	◾	Workplace Status: Office Worksite Primary, flexibility to work from home

	◾	Manager Name & Title: Katie Lorenson, CEO & President

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COMPENSATION
ANNUAL SALARY
	◾	$315,000, paid biweekly as earned.

	◾	Full-Time

	◾	FLSA Status: Exempt

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ANNUAL BONUS PROGRAMS
	◾	40% of base salary for Executive Short-Term Incentive, tied to company scorecard metrics.

		o
	Effective upon date of hire, 2022, payable annually in March of following year.

		o
	Estimated Annual Value: $ 126,000 at 100% (target), $189,000 (max); four-year historical average payout at 150% maximum.

	◾	30% of base salary awarded in Alerus Restricted Stock for Executive Long Term Incentive program.

		o
	Eligible for 2022 award upon date of hire, awarded annually in February.

		o
	60% performance based upon achievement of 3-year net income target.

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Alerus Financial, N.A.
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​

​

		o
	40% three-year time based.

		o
	See separate agreement for plan details.

		o
	Estimated Annual Value: $ 94,500 at 100% payout; $122,850 max (150%) payout for 60% of performance shares.

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SIGNING BONUS
	◾	$200,000 cash award, paid within 30 days from date of hire.

	◾	$150,000 awarded in Alerus Restricted Stock, cliff vesting at three years.

		o
	Estimated 5,033 shares at $29.80 per shares.

		o
	Immediate accrual of quarterly dividends; dividends paid at vesting

		o
	Immediate vesting if change in control of Company.

		o
	See separate agreement for plan details.

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MANAGEMENT AGREEMENT
	◾	If termination of employment for other than cause, severance payment available. See separate agreement for details.

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TOTAL ANNUAL ESTIMATED COMPENSATION:  $535,500
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RETIREMENT
401(K)
	◾	Eligible after one month of service, with quarterly entry dates.

	◾	Match $1 for $1 on the first three percent of deferred salary, $.50 for each $1 on the next three percent of deferred salary.

	◾	Approximate Annual Value of Company Match: $13,725 (capped at salary limit of $305,000)

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EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
	◾	Contributions to the plan are at the Board of Directors’ discretion. Historically, this has been 3% of the employee’s annual eligible compensation. A one-year eligibility waiting period with quarterly entry dates.

	◾	Approximate Annual Value: $9,150 (capped at salary limit of $305,000)

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HEALTH AND WELL-BEING BENEFITS
HEALTH INSURANCE
	◾	Alerus offers a group health plan and pays 75 percent of the premium for either a single or family plan.

	◾	Approximate Annual Value: $23,000

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DENTAL INSURANCE
	◾	Covers preventive care and both simple and major dentistry.

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​

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	◾	Approximate Annual Value: $985

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LIFE, AD&D, AND LONG-TERM DISABILITY
	◾	Group policies provided, plus supplemental coverage is available.

	◾	Approximate Annual Value: $1,400.

​
FLEXIBLE TIME OFF (FTO)
	◾	Alerus encourages and supports time spent with family. We offer nine paid holidays each year in addition to FTO listed.

	◾	For 2022, you will receive 25 days.

	◾	Approximate Annual Value: $33,800

​
EQUIPMENT AND MISCELLANEOUS
	◾	Laptop provided for the ability to work remotely from anywhere.

	◾	Cell phone reimbursement of $65 monthly, annual value of $780.

	◾	Car allowance, annual value of $5,000.

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RETIREMENT AND BENEFITS ESTIMATE ANNUAL VALUE: $87,940
​
We would like you to start employment on February 1, 2022. Please let us know if an alternative date would be more convenient for you.
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As an “at will” employer, Alerus reserves the right to terminate employment with or without cause at any time, and you may do the same. This offer is contingent on acceptable application and background check results.
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If you accept this offer, please sign the Acceptance of Employment Offer below and return all pages to me by January 14, 2022.
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Thank you again for taking the time to meet with us. We look forward to hearing from you and are excited at the prospect of you joining our company.
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Sincerely,
/s/ Kartie Lorenson
​
Katie Lorenson
Chief Executive Officer & President
katie.lorenson@alerus.com
952.417.3725
alerus.com
​
​

​

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ACCEPTANCE OF EMPLOYMENT OFFER
ALAN VILLALON
EVP, CHIEF FINANCIAL OFFICER
​
	I accept the offer of the position indicated above with Alerus.

	​
	​

	​
	​

	/s/ Alan Villalon
	​
	1/11/22

	Alan Villalon
	​
	Date

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