RESTATED AND AMENDED DIRECTOR DEFERRED
COMPENSATION AGREEMENT
This Restated and Amended Director Deferred Compensation Master Agreement
(the "Agreement"), effective as of the 17th day of December, 1997, amends and
restates the individual Director Deferred Compensation Agreements entered into
effective January 1, 1994, and formalizes the understanding by and between FIRST
FEDERAL SAVINGS BANK (the "Bank"), a federally chartered mutual savings bank,
and certain eligible Directors, hereinafter referred to as "Director," who shall
execute a Director Deferred Compensation Joinder Agreement ("Joinder Agreement")
in a form provided by the Bank.
W I T N E S S E T H :
WHEREAS, the Directors serve the Bank as members of the Board; and
WHEREAS, the Bank recognizes the valuable services heretofore performed by
such Directors and wishes to encourage continued service of the Directors; and
WHEREAS, the Bank recognizes that the Directors' services will
substantially contribute to its continued growth and profits in the future; and
WHEREAS, these Directors wish to continue to defer a certain portion of
their fees to be earned in the future; and
WHEREAS, the Directors and the Bank desire to formalize the terms and
conditions upon which the Bank shall pay such deferred compensation to the
Directors or their designated beneficiaries; and
WHEREAS, the Bank and the Directors intend this Agreement to be considered
an unfunded arrangement, maintained primarily to provide retirement income for
such Directors, for tax purposes and for purposes of the Employee Retirement
Income Security Act of 1974, as amended; and
WHEREAS, the Bank has adopted this Restated and Amended Director Deferred
Compensation Master Agreement which controls all issues relating to the Deferred
Compensation Benefits as described herein;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree to the following terms and conditions:
SECTION I
DEFINITIONS
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When used herein, the following words and phrases shall have the meanings
below unless the context clearly indicates otherwise:
1.1 "Bank" means First Federal Savings Bank and any successor thereto.
1.2 "Beneficiary" means the person or persons (and their heirs) designated as
Beneficiary in the Director's Joinder Agreement to whom the deceased
Director's benefits are payable. If no Beneficiary is so designated, then
the Director's Spouse, if living, will be deemed the Beneficiary. If the
Director's Spouse is not living, then the Children of the Director will be
deemed the Beneficiaries and will take on a per stirpes basis. If there
are no Children, then the Estate of the Director will be deemed the
Beneficiary.
1.3 "Benefit Age" shall be the birthday on which the Director becomes eligible
to receive benefits under the plan. Such birthday shall be designated in
the Director's Joinder Agreement.
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1.4 "Benefit Eligibility Date" shall be the date on which a Director is
entitled to receive his Deferred Compensation Benefit. It shall be the
first day of the month following the month in which the Director attains
the Benefit Age designated in his Joinder Agreement.
1.5 "Cause" means personal dishonesty, willful misconduct, willful malfeasance,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, regulation
(other than traffic violations or similar offenses), or final cease-and-
desist order, material breach of any provision of this Agreement, or gross
negligence in matters of material importance to the Bank.
1.6 "Change in Control" of the Bank shall mean:
(1) a change of control of a nature that would be required to be reported
in response to Item 1 of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (hereinafter the "Exchange Act"); or
(2) a change in control of the Bank within the meaning of 12 C.F.R.
(S)574.4; or
(3) a Change in Control shall occur at such time as
(i) any "person" (as the term is used in Sections 13(d) and 14(d) of
the Exchange Act) who is not now presently but becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Bank
representing Twenty Percent (20%) or more of the Bank's
outstanding securities ordinarily having the right to vote at the
elections of Directors except for (i) any stock of the Bank
purchased by the Holding Company in connection with the
conversion of the Bank to stock form, and (ii) any stock
purchased by any Employee Stock Ownership Plan and/or trust
sponsored by the Bank; or
(ii) individuals who constitute the Board of Directors on date hereof
(hereinafter the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a Director subsequent to the date hereof whose election
was approved by a vote of at
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least three-quarters of the Directors comprising the Incumbent
Board, or whose nomination for election by the Bank's members (or
stockholders) was approved by the Bank's Nominating Committee,
which is comprised of members of the Incumbent Board, shall be,
for purposes of this clause (ii), considered as though he were a
member of the Incumbent Board; or
(iii) merger, consolidation, or sale of all or substantially all
of the assets of the Bank occurs; or
(iv) a proxy statement is issued soliciting proxies from member (or
stockholder) of the Bank by someone other than the current
management of the Bank, seeking member (or stockholder) approval
of a plan of reorganization, merger, or consolidation of the Bank
with one or more corporations as a result of which the
outstanding shares of the class of the Bank's securities are
exchanged for or converted into cash or property or securities
not issued by the Bank.
For these purposes, the terms "stockholder(s)" and "member(s)" shall be
considered one and the same.
1.7 "Children" means the Director's children, both natural and adopted,
determined at the time payments are due the Children under this Agreement.
1.8 "Deferral Period" means the period of months designated in the Director's
Joinder Agreement during which the Director shall defer current Board or
Committee fees and/or retainer. The Deferral Period shall commence on the
date designated in the Director's Joinder Agreement.
1.9 "Deferred Compensation Benefit" means the annuitized value (using the
Interest Factor) of the Director's Elective Contribution Account, measured
as of the Director's Benefit Age, payable in monthly installments
throughout the Payout Period and commencing on the Director's Benefit
Eligibility Date.
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1.10 "Disability Benefit" means the monthly benefit payable to the Director
following a determination, in accordance with Subsection 5.2, that he is no
longer able, properly and satisfactorily, to perform his duties as a
Director.
1.11 "Effective Date" of this Agreement shall be December 17, 1997.
1.12 "Elective Contribution" shall refer to any bookkeeping entry required to
record a Director's voluntary monthly pre-tax deferral of Board or
Committee fees and/or retainer which shall be made in accordance with the
Director's Joinder Agreement.
1.13 "Elective Contribution Account" shall be represented by the bookkeeping
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entries required to record a Director's Elective Contributions plus accrued
interest, equal to the Interest Factor, earned to date on such amounts.
However, neither the existence of such bookkeeping entries nor the Elective
Contribution Account itself shall be deemed to create either a trust of any
kind, or a fiduciary relationship between the Bank and the Director or any
Beneficiary.
1.14 "Estate" means the estate of the Director.
1.15 "Interest Factor" means monthly compounding or discounting, as applicable,
at Ten Percent (10%) per annum.
1.16 "Payout Period" means the time frame during which certain benefits payable
hereunder shall be distributed. Payments shall be made in equal monthly
installments commencing on the first day of the month following the
occurrence of the event which triggers distribution and continuing for a
period of months, as designated in the Director's Joinder Agreement.
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1.17 "Projected Deferral" means an estimate, determined upon execution of a
Joinder Agreement, of the total amount of compensation to be deferred by
the Director during his Deferral Period (excluding any interest accrued on
such deferrals), and so designated in the Director's Joinder Agreement.
1.21 "Spouse" means the individual to whom the Director is legally married at
the time of the Director's death.
1.22 "Survivor's Benefit" means a stream of monthly installments payable to the
Beneficiary throughout the Payout Period, equal to the amount designated in
the Joinder Agreement, and subject to 6.1.
SECTION II
ESTABLISHMENT OF RABBI TRUST
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The Bank shall establish a rabbi trust into which the Bank shall contribute
assets which shall be held therein, pursuant to the agreement which establishes
such rabbi trust (the "rabbi trust agreement"). The Bank intends to make a
contribution or contributions to the rabbi trust to provide the Bank with a
source of funds to assist it in meeting its obligations under this Agreement.
The trust assets shall be subject to the claims of the Bank's creditors in the
event of the Bank's "Insolvency" as defined in the agreement which establishes
such rabbi trust, until the trust assets are paid to the Director and his
Beneficiary(ies) in such manner and at such times as specified in this
Agreement. Contribution(s) to the rabbi trust shall be made in accordance with
the rabbi trust agreement.
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SECTION III
DEFERRED COMPENSATION
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Commencing on the Effective Date and continuing through the end of the
Deferral Period, the Director and the Bank agree that the Director shall defer
into his Elective Contribution Account up to One Hundred Percent (100%) of the
monthly Board fees and/or retainer which the Director would otherwise be
entitled to receive from the Bank for each month of the Deferral Period. The
total deferral during the term of the Deferral Period shall not exceed the
Director's Projected Deferral without Board of Director approval. The specific
amount of the Director's monthly deferred compensation shall be designated in
the Director's Joinder Agreement and shall apply only to compensation
attributable to services not yet performed.
SECTION IV
ADJUSTMENT OF DEFERRAL AMOUNT
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Deferral of the specific amount of fees and/or retainer designated in the
Director's Joinder Agreement shall continue in effect pursuant to the terms of
this Agreement unless and until the Director amends his Joinder Agreement by
filing with the Administrator a Notice of Adjustment of Deferral Amount (Exhibit
B of the Joinder Agreement). If the Bank increases the amount of fees and/or
retainer earned by the Director, the Director can include such additional
amounts in his monthly deferral, provided approval from the Board of Directors
is obtained, by filing a Notice of Adjustment of Deferral Amount. A Notice of
Adjustment of Deferral Amount shall be effective if filed with the Administrator
at least ten (10) days prior to any January 1st during the Director's Deferral
Period. Such Notice of Adjustment of Deferral Amount shall be effective
commencing with the January 1st following its filing and shall be applicable
only to compensation attributable to services not yet performed by the Director.
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SECTION V
RETIREMENT BENEFIT
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5.1 Retirement Benefit. Subject to Subsection 6.1 of this Agreement, the Bank
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agrees to pay the Director the Deferred Compensation Benefit commencing on
the Director's Benefit Eligibility Date. Such payments will be made over
the term of the Payout Period. In the event of the Director's death after
commencement of the Deferred Compensation Benefit, but prior to completion
of all such payments due and owing hereunder, the Bank shall pay to the
Director's Beneficiary a continuation of the monthly installments for the
number of months remaining in the Payout Period.
5.2 Disability Benefit. Notwithstanding any other provision hereof, if
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requested by the Director and approved by the Board of Directors, the
Director shall be entitled to receive the Disability Benefit hereunder, in
any case in which it is determined by a duly licensed independent physician
selected by the Bank, that the Director is no longer able, properly and
satisfactorily, to perform his regular duties as a Director because of ill
health, accident, disability or general inability due to age. If the
Director's service is terminated pursuant to this Subsection and Board of
Director approval is obtained, the Director may elect to begin receiving
the Disability Benefit in lieu of the Deferred Compensation Benefit, which
is not available prior to the Director's Benefit Eligibility Date. Payment
of the Disability benefit shall begin within thirty (30) days of Board of
Director approval of such benefit. The amount of the monthly benefit shall
be the annuitized value (using the Interest Factor) of the Director's
Elective Contribution Account, measured as of the date of the disability
determination and payable over the Payout Period. In the event the Director
dies while receiving Disability Benefit payments pursuant to this
Subsection, or after becoming eligible for such payments but before the
actual commencement of such payments, his Beneficiary shall be entitled to
receive those benefits provided for in Subsection 6.1(a) and the Disability
Benefits provided for in this Subsection shall terminate upon the
Director's death.
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5.3 Removal For Cause. In the event the Director is removed for Cause at any
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time prior to reaching his Benefit Age, he shall be entitled to receive the
balance of his Elective Contribution Account, measured as of the date of
removal. Such amount shall be paid in a lump sum within thirty (30) days
of the Director's date of removal. All other benefits provided for the
Director or his Beneficiary under this Agreement shall be forfeited and the
Agreement shall become null and void with respect to such Director.
5.4 Termination After Change in Control. If a Director is terminated after a
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Change in Control, such Director shall be entitled to receive the
annuitized value (using the Interest Factor) of the sum of (a) the
Director's Effective Contribution Account, measured as of the Director's
termination date, plus (b) the lesser of (i) three (3) additional years of
deferral (without the necessity of the Director making any deferrals) or
(ii) the amount of deferral needed to complete his Deferral Period, plus
(c) interest accrued on such amounts from the date of termination until the
Benefit Age, payable in monthly installments throughout the Payment Period
and commencing on the Director's Benefit Eligibility Date.
SECTION VI
DEATH BENEFITS
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6.1 Death Benefit Prior to Commencement of Deferred Compensation Benefit. In
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the event of the Director's death prior to commencement of the Deferred
Compensation Benefit, the Bank shall pay the Director's Beneficiary the
Survivor's Benefit commencing within thirty (30) days of the Director's
death. The amount of the Survivor's Benefit shall be determined as
follows:
(a) (1) In the event death occurs (i) while the Director is receiving the
Disability Benefit provided for in Subsection 5.2, or (ii) after the
Director has become eligible for such Disability Benefit payments but
before such payments have commenced, the Director's Beneficiary shall
be entitled to receive the Survivor's Benefit for the
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number of months in the Payout Period, reduced by the number of months
Disability Benefit payments were made to the Director. In the event
death occurs after the Director has received the Disability Benefit
provided for in Subsection 5.2 for the entire Payout Period, the
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Director's Beneficiary shall not be entitled to the Survivor's Benefit
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for any length of time. However, the lump sum payment described in
paragraph two (2) of this Subsection 6.1(a) shall still be applicable
to such Beneficiary.
(2) Furthermore, if (i) the total dollar amount of Disability Benefit
payments received by the Director under Subsection 5.2 is less than
the total dollar amount of payments which would have been received had
the Survivor's Benefit been paid in lieu of the Disability Benefit
which was paid during the Director's life, and (ii) Board of Director
approval is obtained, the Bank shall pay the Director's Beneficiary a
lump sum payment for the difference. This lump sum payment shall be
made within thirty (30) days of the Director's death.
(b) In the event death occurs while the Director is (i) in the service of
the Bank, (ii) deferring fees pursuant to Section III and (iii) prior
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to any reduction or discontinuance via an effective filing of a Notice
of Adjustment of Deferral Amount, in the level of deferrals reflected
in the Director's Joinder Agreement, for any period during the Deferral
Period, the Director's Beneficiary shall be paid the greater of: (i)
the Survivor's Benefit, or (ii) the annuitized value (using the
Interest Factor) of the Director's Elective Contribution Account,
measured as of the date of the Director's death.
(c) In the event death occurs while the Director is (i) in the service of
the Bank, (ii) deferring fees and/or retainer pursuant to Section III,
and (iii) after any reduction or discontinuance, via an effective
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filing of a Notice of Adjustment of Deferral Amount, in the level of
deferrals reflected in the Director's Joinder Agreement, for any period
during the Deferral Period, the Director's Beneficiary shall be paid
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the greater of: (i) a reduced Survivor's Benefit, such amount being
determined by multiplying the monthly payment available as a Survivor's
Benefit by a fraction, the numerator of which is equal to the total
Board fees actually deferred by the Director as of his death, and the
denominator of which is equal to the total amount of Board fees which
would have been deferred as of his death, if no reduction or
discontinuance in the level of deferrals had occurred at any time
following execution of the Joinder Agreement and during the Deferral
Period, or (ii) the annuitized value (using the Interest Factor) of the
Director's Elective Contribution Account, measured as of the date of
the Director's death.
(d) In the event the Director completes less than one hunded percent (100%)
of his Projected Deferrals due to any voluntary or involuntary
termination other than removal for Cause, the Director's Beneficiary
shall be paid the greater of : (i) a reduced Survivor's Benefit, such
amount being determined by multiplying the monthly payment available as
a Survivor's Benefit by a fraction, the numerator of which is equal to
the total Board fees actually deferred by the Director and the
denominator of which is equal to the Director's Projected Deferral, or
(ii) the annuitized value (using the Interest Factor) of the Director's
Elective Contribution Account, measured as of the date of termination
of the Director's service.
(e) In the event the Director completes One Hundred Percent (100%) of his
Projected Deferrals of his Projected Deferral due to termination on
account of a Change in Control, the Director's Beneficiary shall be
paid, in addition to the amount provided in Subsection 6.1(d), a
benefit in an amount equal to the annuitized value (using the Interest
Factor) of the lesser of three (3) additional years of deferrals needed
to complete his Deferral Period.
(f) In the event death occurs and the Director has completed One Hundred
Percent (100%) of his Projected Deferral prior to any voluntary or
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involuntary termination other than removal for Cause, and provided no
payments have been made
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pursuant to Subsection 5.2, the Director's Beneficiary shall be paid
the Survivor's Benefit.
6.2 Death Benefit After Commencement of Deferred Compensation Benefit. In the
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event of the Director's death after payment of his Deferred Compensation
Benefit has commenced, the Beneficiary shall be entitled to receive the
Survivor's Benefit for the balance of the Payout Period, as provided in the
Joinder Agreement.
6.3 Additional Death Benefit - Funeral Expense. In addition to the above-
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described death benefits, upon the Director's death, the Director's
Beneficiary shall be entitled to receive a one-time lump sum death benefit
in the amount of Ten Thousand Dollars ($10,000.00). This benefit shall be
provided specifically for the purpose of providing payment for funeral
expenses of the Director. Such benefit shall be payable within thirty (30)
days of the Director's death. The Director's Beneficiary shall not be
entitled to such benefit if the Director is removed for Cause prior to
death.
SECTION VII
BENEFICIARY DESIGNATION
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The Director shall make an initial designation of primary and secondary
Beneficiaries upon execution of his Joinder Agreement by completing the
Beneficiary Designation portion thereof. A Director may subsequently change such
designation by submitting a new written designation of primary and secondary
Beneficiaries in substantially the same form attached as Exhibit A to the
Joinder Agreement. Any Beneficiary designation made subsequent to execution of
the Joinder Agreement shall become effective only when acknowledged in writing
by the Administrator.
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SECTION VIII
DIRECTOR'S RIGHT TO ASSETS
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The rights of the Director, any Beneficiary, or any other person claiming
through the Director under this Agreement, shall be solely those of an unsecured
general creditor of the Bank. The Director, the Beneficiary, or any other person
claiming through the Director, shall only have the right to receive from the
Bank those payments so specified under this Agreement. The Director agrees that
he, his Beneficiary, or any other person claiming through him shall have no
rights or interests whatsoever in any asset of the Bank, including any insurance
policies or contracts which the Bank may possess or obtain to informally fund
this Agreement. Any asset used or acquired by the Bank in connection with the
liabilities it has assumed under this Agreement, unless expressly provided
herein, shall not be deemed to be held under any trust for the benefit of the
Director or his Beneficiaries, nor shall any asset be considered security for
the performance of the obligations of the Bank. Any such asset shall be and
remain, a general, unpledged, and unrestricted asset of the Bank.
SECTION IX
RESTRICTIONS UPON FUNDING
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The Bank shall have no obligation to set aside, earmark or entrust any fund
or money with which to pay its obligations under this Agreement. The Bank
reserves the absolute right in its sole discretion to either purchase assets to
meet its obligations undertaken by this Agreement or to refrain from the same
and to determine the extent, nature, and method of any such asset purchases.
Should the Bank decide to purchase assets such as life insurance, mutual funds,
disability policies or annuities, the Bank reserves the absolute right, in its
sole discretion, to terminate such assets at any time, in whole or in part. If
the Bank elects to invest in a life insurance, disability or annuity policy upon
the life of the Director, then the Director shall assist the Bank by freely
submitting to a physical examination and by supplying such additional
information necessary to obtain such insurance or annuities.
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SECTION X
ALIENABILITY AND ASSIGNMENT PROHIBITION
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Neither the Director nor any Beneficiary under this Agreement 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 of said benefits be subject to seizure for the payment
of any debts, judgments, alimony or separate maintenance owed by the Director or
his Beneficiary, nor be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or any
Beneficiary attempts assignment, communication, hypothecation, transfer or
disposal of the benefits hereunder, the Bank's liabilities shall forthwith cease
and terminate.
SECTION XI
ACT PROVISIONS
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11.1 Named Fiduciary and Administrator. The Bank shall be the Named Fiduciary
---------------------------------
and Administrator (the "Administrator") of this Agreement. As
Administrator, the Bank shall be responsible for the management, control
and administration of the Agreement as established herein. The
Administrator may delegate to others certain aspects of the management and
operational responsibilities of the Agreement, including the employment of
advisors and the delegation of ministerial duties to qualified individuals.
11.2 Claims Procedure and Arbitration. In the event that benefits under this
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Agreement are not paid to the Director (or to his Beneficiary in the case
of the Director's death) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to the
Administrator within sixty (60) days from the date payments are refused.
The Administrator shall review the written claim and, if the claim is
denied, in whole or in part, they shall provide in writing, within ninety
(90) days of receipt of such claim, their specific reasons for such denial,
reference to the provisions of this Agreement or the Joinder Agreement upon
which the denial is based, and any additional material or
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information necessary to perfect the claim. Such writing by the
Administrator shall further indicate the additional steps which must be
undertaken by claimants if an additional review of the claim denial is
desired.
If claimants desire a Restated and Amended review, they shall notify the
Administrator in writing within sixty (60) days of the first claim denial.
Claimants may review this Agreement, the Joinder Agreement or any documents
relating thereto and submit any issues and comments, in writing, they may
feel appropriate. In its sole discretion, the Administrator shall then
review the Restated and Amended claim and provide a written decision within
sixty (60) days of receipt of such claim. This decision shall state the
specific reasons for the decision and shall include reference to specific
provisions of this Agreement or the Joinder Agreement upon which the
decision is based.
If claimants continue to dispute the benefit denial based upon completed
performance of this Agreement and the Joinder Agreement or the meaning and
effect of the terms and conditions thereof, then claimants may submit the
dispute to Board of Arbitration for final arbitration. Such Board of
Arbitration shall consist of one member selected by the claimant, one
member selected by the Bank, and the third member selected by the first two
members. The Board of Arbitration shall operate under any generally
recognized set of arbitration rules. The parties hereto agree that they,
their heirs, personal representatives, successors and assigns shall be
bound by the decision of such Board with respect to any controversy
properly submitted to it for determination.
SECTION XII
MISCELLANEOUS
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12.1 No Effect on Directorship Rights. Nothing contained herein will confer upon
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the Director the right to be retained in the service of the Bank nor limit
the right of the Bank to discharge or otherwise deal with Director without
regard to the existence of the
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Agreement. Pursuant to 12 C.F.R. (S) 563.39(b), the following conditions
shall apply to this Agreement:
(1) The Bank's Board of Directors may remove the Director at any time, but
any removal by the Bank's Board of Directors other than removal for
Cause, shall not prejudice the Director's vested right to compensation
or other benefits under the contract. The Director shall be paid the
balance of his Elective Contribution Account in a lump sum within
thirty (30) days of his removal in the event he is removed for Cause.
He shall have no right to receive additional compensation or other
benefits for any period after removal for Cause.
(2) If the Director is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served
under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)(3) and (g)(1)) the Bank's obligations under the
contract shall be suspended as of the date of termination of service
unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Bank may in its discretion (i) pay the
Director all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate (in whole or in part)
any of its obligations which were suspended.
(3) If the Director is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued
under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)(4) or (g)(1)), all non-vested obligations of the
Bank under the contract shall terminate as of the effective date of
the order. The Director shall be paid the balance of his Elective
Contribution Account in a lump sum within
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thirty (30) days of his removal in the event he is removed pursuant to
such order.
(4) If the Bank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), all non-vested obligations under the
contract shall terminate as of the date of default.
(5) All non-vested obligations under the contract shall be terminated,
except to the extent determined that continuation of the contract is
necessary for the continued operation of the Bank:
(i) by the Director [of the Federal Deposit Insurance Corporation or
the Resolution Trust Corporation] or his designee at the time the
Federal Deposit Insurance Bank or the Resolution Trust Bank
enters into an agreement to provide assistance to or on behalf of
the Bank under the authority contained in (S) 13(c) of the
Federal Deposit Insurance Act; or
(ii) by the Director [of the Federal Deposit Insurance Corporation or
the Resolution Trust Corporation] or his designee, at the time
the Director or his designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the
Bank is determined by the Director to be in an unsafe or unsound
condition.
Any rights of the parties that have already vested (i.e., the balance
of the Director's Elective Contribution Account), however, shall not be
affected by such action.
12.2 State Law. The Agreement is established under, and will be construed
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according to, the laws of the state of Indiana.
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12.3 Severability. In the event that any of the provisions of this Agreement or
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portion thereof, are held to be inoperative or invalid by any court of
competent jurisdiction, then: (1) insofar as is reasonable, effect will be
given to the intent manifested in the provisions held invalid or
inoperative, and (2) the validity and enforceability of the remaining
provisions will not be affected thereby.
12.4 Incapacity of Recipient. In the event the Director is declared incompetent
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and a conservator or other person legally charged with the care of his
person or Estate is appointed, any benefits under the Agreement to which
such Director is entitled shall be paid to such conservator or other person
legally charged with the care of his person or Estate. Except as provided
above, if the Bank's Board of Directors, in its sole discretion, determines
that the Director is unable to manage his financial affairs, the Board may
direct the Bank to make distributions to any person for the benefit of the
Director.
12.5 Unclaimed Benefit. The Director shall keep the Bank informed of his
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current address and the current address of his Beneficiaries. If the
location of the Director is not made known to the Bank within three (3)
years after the date on which any payment of the Deferred Compensation
Benefit may first be made, the Bank shall delay payment of the Director's
benefit payments until the location of the Director is made known to the
Bank: however, the Bank shall be obligated to hold such benefit payments
for the Director until the expiration of three (3) years. Upon expiration
of the three (3) year period, the Bank may discharge its obligation by
payment to the Director's Beneficiary. If the location of the Director's
Beneficiary is not made known to the Bank by the end of an additional two
(2) month period following expiration of the three (3) year period, then
the Bank may fully discharge its obligation by payment to the Director's
Estate.
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12.6 Limitations on Liability. Notwithstanding any of the preceding provisions
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of the Agreement, no individual acting as an employee or agent
of the Bank, or as a member of the Board of Directors shall be personally
liable to the Director or any other person for any claim, loss, liability
or expense incurred in connection with this Agreement.
12.7 Gender. Whenever in this Agreement words are used in the masculine or
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neuter gender, they shall be read and construed as in the masculine,
feminine or neuter gender, whenever they should so apply.
12.8 Effect on Other Corporate Benefit Agreements. Nothing contained in this
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Agreement shall affect the right of the Director to participate in or be
covered by any qualified or non-qualified pension, profit sharing, group,
bonus or other supplemental compensation or fringe benefit agreement
constituting a part of the Bank's existing or future compensation
structure.
12.9 Suicide. Notwithstanding anything to the contrary in this Agreement, the
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benefits otherwise provided herein shall not be payable if the Director's
death results from suicide, whether sane or insane, within twenty-six (26)
months after the execution of his Joinder Agreement. If the Director dies
during this twenty-six (26) month period due to suicide, the balance of
his Elective Contribution Account will be paid to the Director's
Beneficiary in a single payment. Payment is to be made within thirty (30)
days after the Director's death is declared a suicide by competent legal
authority. Credit shall be given to the Bank for payments made prior to
determination of suicide.
12.10 Inurement. This Agreement shall be binding upon and shall inure to the
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benefit of the Bank, its successors and assigns, and the Director, his
successors, heirs, executors, administrators, and Beneficiaries.
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12.11 Tax Withholding. The Bank may withhold from any benefits payable under
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this Agreement all federal, state, city, or other taxes as shall be
required pursuant to any law or governmental regulation then in effect.
12.12 Headings. Headings and sub-headings in this Agreement are inserted for
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reference and convenience only and shall not be deemed a part of this
Agreement.
SECTION XIII
AMENDMENT/REVOCATION
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This Agreement shall not be amended, modified or revoked at any time, in
whole or part, without the mutual written consent of the Director and the Bank,
and such mutual consent shall be required even if the Director is no longer
serving the Bank as a member of the Board.
SECTION XIV
EXECUTION
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14.1 This Agreement sets forth the entire understanding of the parties hereto
with respect to the transactions contemplated hereby, and any previous
agreements or understanding between the parties hereto regarding the
subject matter hereof are merged into and superseded by this Agreement.
14.2 This Agreement shall be executed in triplicate, each copy of which, when so
executed and delivered, shall be an original, but all three copies shall
together constitute one and the same instrument.
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