EXHIBIT 10(b)
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
XXXXX XXXX FEDERAL SAVINGS AND LOAN ASSOCIATION
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
AND COMPENSATION CONTINUATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 30th day of September,
1997, by and between Xxxxx Xxxx Federal Savings and Loan Association of
Lutherville, Maryland (hereinafter called the "Association") and Xxxxxx X.
Xxxxxxx of Churchville, Maryland (hereinafter called the "Executive").
WITNESSETH:
WHEREAS, the Executive has been in the employ of the Association, and is
now serving the Association as its President and Chief Executive Officer; and
WHEREAS, because of the Executive's experience, knowledge of affairs of the
Association, and reputation and contacts in the savings and loan industry, the
Association deems the Executive's continued employment with the Association
important for its future growth; and
WHEREAS, it is the desire of the Association, and in its best interest,
that the Executive's services be retained; and
WHEREAS, in order to induce the Executive to continue in the employ of the
Association and in recognition of his past service, the Association has entered
into an Executive Supplemental Retirement Plan and Compensation Continuation
Agreement, dated as of September 30, 1997, ("the Agreement") to provide him and
his beneficiaries with certain benefits in accordance with the terms and
conditions therein set forth.
NOW, THEREFORE, in the consideration of services performed in the past and
to be performed in the future by the Executive as well as of the mutual promises
and covenants herein contained, the Association and the Executive hereby agree
as follows:
ARTICLE ONE
1.01 Employment. The Association shall employ the Executive, and the
Executive shall serve the in the employ of the Association, in accordance with
the employment agreement by and between the Association and the Executive, as
such agreement may be amended from time to time. Nothing herein shall restrict
or otherwise affect the right of the Executive to enter into any other agreement
with the Association concerning the terms and conditions of his employment.
Nothing herein shall require the Executive to remain in the employ of the
Association or require the Association to employ the Executive. This Agreement
is not part of any salary reduction plan or an arrangement deferring a bonus or
a salary increase. The Executive has no option to take any current payment or
bonus in lieu of the salary continuation or other benefits provided herein.
ARTICLE TWO
2.01 Benefits Upon Termination. If the Executive's employment with the
Association terminates for any reason (including, without limitation, voluntary
resignation or termination for cause) on or after the date of this Agreement,
regardless of whether the Executive has attained the age of sixty-five (65), the
Association shall pay to the Executive, in equal monthly installments on the
first day of each month, for the period commencing on the first day of the month
next following the month on which such termination occurs and terminating on the
Executive's death, an annual amount, payable in twelve (12) monthly
installments, over the greater of the life of the Executive or one hundred
twenty (120) months, equal to the excess of (A) sixty-five percent of the
Executive's highest five-year average annual compensation, as defined in the
defined benefit retirement plan provided by the Association through the Pentegra
Group in White Plains, New York (the "Qualified Plan"), but without regard to
the limitations imposed by Section 401(a)(17) of the Internal Revenue Code of
1986, as amended, reduced by (B) the Executive's annualized monthly retirement
benefit payable under the Qualified Plan under the normal form of benefit, as
defined as of September 30, 1997, under the Qualified Plan, such form being a
10-year certain and continuous annuity.
2.02 Lump Sum Form of Payment. In lieu of the form of benefits provided in
Section 2.01 above, the Executive shall be paid the benefit described in Section
2.01 above in the form of a lump sum form of payment. Such lump sum form of
payment shall be the actuarial equivalent, using the actuarial assumptions that
are used for the Qualified Plan on the date on which the Executive's employment
terminates, of the payment provided for in such Section 2.01, or, in the event
that the Qualified Plan terminates prior to such date, such reasonable actuarial
assumptions as the Association shall determine. Notwithstanding the foregoing,
the Executive may elect the 10-year certain and continuous form of payment
described in Section 2.01. In the event that the Executive shall elect the
10-year certain and continuous form of payment, such election shall be effective
only if made at least two years prior to the date on which the first payment
pursuant to Section 2.01 above becomes payable.
ARTICLE THREE
3.01 Death of Executive. If the employment of the Executive with the Association
terminates on account of the death of the Executive, his beneficiaries, as
provided in Section 3.04, shall be entitled to receive a death benefit as
provided herein.
3.02 Death Prior to Commencement of Benefits. If the Executive dies prior to the
payment of any benefit provided hereunder, his beneficiaries shall be entitled
to a lump sum death benefit equal to the actuarial equivalent of 120 monthly
benefit payments, as determined and payable under Section 2.01 herein, as though
the Executive 's benefit had commenced as of the first day of the month in which
he died. If the Executive elects, prior to death, the death benefit may be paid
in the form of installments over a period of ten years, equivalent to amount
that would be paid under the 10-year certain and continuous form of benefit if
the Executive lived for ten years, as set forth in Section 2.01.
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3.03 Death After Commencement of Payments. In the event that the Executive,
prior to his death and after the commencement of the payment of his benefits
hereunder, shall not have received his benefit in the form of a lump sum and
shall have elected instead to have received his benefit as provided in Section
2.01 in the form of a 10-year certain and continuous annuity and he shall die
prior to his receipt of 120 monthly installment payments under such form of
benefit, then his beneficiaries, as provided in Section 3.04, shall be entitled
to receive the remainder of his monthly installment payments until a total of
120 payments shall have been made hereunder. In addition, the Executive, prior
to his death, shall be entitled to elect that the remainder of such 120 monthly
installment payments shall be made to his beneficiaries in the form of a lump
sum.
3.04 Beneficiaries. The Executive's beneficiary shall be his surviving spouse.
If the Executive has no surviving spouse, or if such spouse dies prior to the
termination of such period during which benefits hereunder are payable, then
said payments, or the balance thereof, shall be paid in equal parts to the
Executive's children living at the time a payment is due; provided, however,
that if any child of the Executive shall not be living at the time a payment is
due to be paid to such child but shall have died leaving issue living at such
time, such issue shall take in equal share per stirpes the share that such child
would have taken if he of she had been living at such time. If at the time
payment is due there are no such surviving spouse, children or issue, said
payments shall terminate.
ARTICLE FOUR
4.01 Payment Obligations Absolute. The Association's obligations to pay the
Executive any amounts provided for hereunder shall be absolute and unconditional
and shall not be affected by any circumstances, including, without limitation,
any set-off, counterclaim, recoupment, defense or other right to which the
Association may have against him. All amounts payable by the Association
hereunder shall be paid without notice or demand. Except as expressly provided
herein, and to the extent allowed by law or applicable regulations of any
governmental entity, the Association waives all rights which it may now have or
may hereafter have conferred upon it, by statue or otherwise, to amend, to
terminate, cancel or rescind this Agreement in whole or in part. Each and every
payment made hereunder by the Association shall be final and the Association
shall not seek to recover all or any part of such payment from the Executive of
from whomsoever may be entitled thereto, for any reason whatsoever.
4.02 Alienability. Neither the Executive nor the Executive's surviving spouse or
issue, shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of
the benefits payable hereunder, nor shall any said benefits be subject to
seizure for any payment of any debts, judgments, alimony or separate
maintenance, owed by the Executive or his beneficiary or any of them, or be
transferable by operation of law in the event that this Agreement shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs, distributees, devisees,
legatees, or beneficiaries.
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4.03 Tax Adjustment. The amount of payments provided for under this Agreement
shall be increased to the extent necessary to pay (i) any excise tax imposed by
Section 4999 of the Internal Revenue code of 1986, as amended (the "Code"), on
the payments and benefits provided for by this Agreement and (ii) any such
excise tax and any other federal, state, local income taxes imposed on the
payments provided for by this Section 4.03. The Association shall pay to the
Executive the payments provided for by this Section 4.03 as soon as practical
following the determination of counsel referred to below. If any such excise tax
is imposed as a result of the combination of payments or benefits not provided
under this agreement, then in calculating the amount of payments required
pursuant to this Section 4.03, the excise tax shall be treated as first being
imposed as a result of payments and benefits provided under this Agreement,
including the payments provided for by this Section 4.03. Counsel selected by
the Executive and reasonably acceptable to the Association shall determine
whether the increase provided for by this Section 4.03 shall be required. All
determinations of such counsel shall be binding on the Association and the
Executive. Such counsel shall determine that payments shall be increased only
if, and to the extent that, it is more likely than not that the payments or
benefits provided or under this Agreement are subject to the excise tax imposed
by Section 4999 of the Code and any other excise tax. In making the
determinations required by this Section 4.03, such counsel may rely on benefits
consultants, accountants or other experts. The Association hereby agrees to pay
all reasonable fees and expenses of such counsel and other experts and shall
indemnify and hold such counsel and other experts harmless from any and all
cost, expense, liability or damage arising out of any reasonable determination
pursuant to this Section 4.03. If, subsequent to any determination pursuant to
this Section 4.03, such counsel reasonably determines that the amount of the
payments paid pursuant to this Section 4.03 are greater, or less, than the
amount which should have been paid, the Executive shall reimburse the
Association an amount, or the Association shall pay the Executive an additional
amount, respectively, based upon such determination (including interest if
appropriate),
ARTICLE FIVE
5.01 Entire Agreement; Participation in Other Plans. Except as specifically
provided for herein, this Agreement supersedes any and all other oral or written
agreements heretofore made relating to the subject matter hereof and constitutes
the entire agreement of the parties relating to the subject matter hereof;
provided, that, except as specifically provided herein, this Agreement shall not
be construed to alter, abridge, or in any manner affect the rights and
privileges of the Executive to participate in and be covered by any pension,
profit-sharing, group insurance, bonus or other employee plans which the
Association may now or hereafter maintain.
ARTICLE SIX
6.01 Funding. The Association shall establish a grantor trust to fund its
obligations under this Agreement, which trust shall prohibit the return of any
assets to the Association until the obligations to the Executive hereunder have
been fully paid and satisfied, but the assets of which trust shall be subject to
the claims of the creditors of the Association in the event of the insolvency of
the Association.
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Any asset of such a grantor trust shall not in any way be considered to be
security for the performance of the obligations of this Agreement. If the
Association purchases a life insurance or annuity policy on the life of the
Executive, he agrees to sign any papers that may be required for that purpose
and to undergo any medical examination or tests which may be necessary, and to
generally cooperate with the Association in securing such policy.
ARTICLE SEVEN
7.01 Reorganization. The Association shall require any successor (whether direct
or indirect, by purchase, merger, consolidation, liquidation or otherwise) to
all or substantially all of the business and/or assets of the Company to agree
to assume all of the obligations of the Association under this Agreement upon or
prior to such succession taking place. A copy of such assumption and agreement
shall be delivered to the Executive promptly after its execution by the
successor. Failure of the Association to obtain such agreement upon or prior to
any such succession shall be a breach of this Agreement. Such breach shall
entitle the Executive to receive the payments described in Articles TWO and
THREE herein, in such amounts and at such times as provided in such Articles, as
if the Executive's employment had been terminated by the Association without
cause on the date on which such succession occurs. As used in this Agreement,
"Association" shall mean the Association as hereinbefore defined and any
successor to is business and/or assets, as aforesaid.
ARTICLE EIGHT
8.01 Association. As used in this Agreement, Association shall mean Xxxxx Xxxx
Federal Savings and Loan Association, whether in mutual or stock form, and any
affiliated entity, successor organization, parent, subsidiary or holding
company.
ARTICLE NINTH
9.01 Communications. Any notice or communication required of either party with
respect to this Agreement shall be made in writing and may either be delivered
personally or sent by first class mail, as the case may be:
To the Association:
Xxxxx Xxxx Federal Savings
and Loan Association
00 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
To the Executive:
Xx. Xxxxxx Xxxxxxx
00 Xxxxxxx Xxxx
0
Xxxxxxxxxxx, Xxxxxxxx 00000
Each party shall have the right by written notice to change the place to
which any notice may be addressed.
ARTICLE TEN
10.01 Arbitration of Disputes.
(i) Any disagreement, dispute, controversy or claim arising out of or relating
to this Agreement or the interpretation or validity hereof shall be settled
exclusively and finally by arbitration. It is specifically understood and agreed
that any disagreement, dispute or controversy which cannot be resolved between
the parties, including without limitation any matter relating to the
interpretation of this Agreement, may be submitted to arbitration irrespective
of the magnitude thereof, the amount in controversy or whether such
disagreement, dispute or controversy would otherwise be considered justiciable
or ripe for resolution by court or arbitral tribunal. Either party may petition
the appropriate court in the State of Maryland for an order compelling the
submission of the controversy or dispute to arbitration in accordance with the
rules of the American Arbitration Association, and that any award or finding
made pursuant to such arbitration shall in all respects be well and fairly kept
and observed and may be imposed by judgment of the appropriate court of the
State of Maryland pursuant to the applicable laws relating thereto, the parties
expressly agreeing that Sections 3-201 through 3- 234 of Subtitle 2 of Title 3
of the Courts and Judicial Proceedings Article of the Annotated Code of Maryland
(Maryland Uniform Arbitration Act) shall apply and be applicable hereto.
(ii) The arbitration shall be conducted in accordance with the Commercial
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA").
(iii) The arbitral tribunal shall consist of one arbitrator. The parties to the
arbitration jointly shall directly appoint such arbitrator within 30 days of
initiation of the arbitration. If the parties shall fail to appoint such
arbitrator as provided above, such arbitrator shall be appointed by the AAA as
provided in the Arbitration Rules and shall be a person who (a) maintains his
principal place of business within 30 miles of the City of Baltimore, Maryland,
and (b) has had substantial experience in mergers and acquisitions. The
Association shall pay all of the fees, if any, and expenses of such arbitrator.
(iv) The arbitration shall be conducted within 30 miles of the City of
Baltimore, Maryland, or in such other city in the United States of America as
the parties to the dispute may designate by mutual written consent.
(v) At any oral hearing of evidence in connection with the arbitration, each
party thereto or its legal counsel shall have the right to examine its witness
and to cross-examine the witnesses of any opposing party. No evidence of any
witness shall be presented unless the opposing party or parties shall have the
opportunity to cross-examine such witness, except as the parties to the dispute
otherwise agree
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in writing or except under extraordinary circumstances where the interest of the
justice require a different procedure.
(vi) Any decision or award of the arbitral tribunal shall be final and binding
upon the parties to the arbitration proceeding. The parties hereto hereby waive
to the extent permitted by law any rights to appeal or to seek review of such
award by any court or tribunal. The parties hereto agree that the arbitral award
may be enforced against the parties to the arbitration proceeding or their
assets wherever they may be found and that a judgment upon the arbitral xxxx may
be entered by any court having jurisdiction.
(vii) Nothing herein contained shall be deemed to give the arbitral tribunal any
authority, power, or right to alter, change, amend, modify, add to, or subtract
from any of the provisions of this Agreement.
ARTICLE ELEVENTH
11.01 Amendment. No provisions of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in a
writing signed by the Executive and an authorized representative of the
Association. Waiver by any party of any beach of, or failure to comply with any
provisions of, this Agreement by the other party shall not be construed as, or
constitute, a continuing waiver of such provision, or a waiver or any other
breach of, or failure to comply with, any other provision of this Agreement.
11.02 Choice of Law. The terms and conditions of this Agreement are subject to
the laws of the State of Maryland.
11.03 Severability. If any terms or provisions of this Agreement or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Agreement or the application of
such terms or provisions to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11.04 Headings. The headings in the Agreement are inserted for convenience of
reference only and shall not be part of or control or affect the meaning of this
Agreement.
11.05 Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed an original.
11.06 Payroll and Withholding Taxes. The Association may withhold from any
amounts payable
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to the Executive hereunder all federal, state, city or other taxes that the
Association may reasonably determine are required to be withheld pursuant to any
applicable law or regulation.
IN WITNESS WHEREOF, the Association has caused this Agreement to be duly
executed by its duly authorized officers and Executive Committee members, and
its corporate seal affixed, and the Executive has hereunto set his hand at
Lutherville, Maryland, as of the day and year first above written.
XXXXX XXXX FEDERAL
SAVINGS AND LOAN
ASSOCIATION
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx, Treasurer
/s/ Xxxxxxxxx Xxxxxx
---------------------------------
Xxxxxxxxx Xxxxxx, Secretary
EXECUTIVE
WITNESS:
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxxxx Xxxxxx
---------------------------------
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