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EXHIBIT 10(b)
SALARY CONTINUATION AGREEMENT BETWEEN LINCOLN STATE BANK
AND XXXXX XXXXXXX
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EXHIBIT 10(b)
EXECUTIVE EMPLOYEE SALARY CONTINUATION AGREEMENT
FOR
XXXXX XXXXXXX
THIS AGREEMENT is made this First day of May, 1992, between Lincoln
State Bank, a Wisconsin corporation (the "Company") and Xxxxx Xxxxxxx (the
"Participant").
WHEREAS, the Participant is an executive employee of the Company and
as such has materially contributed to the Company's position, and
WHEREAS, the Company wishes to establish this Agreement for purposes
of promoting in the Participant the strongest interest in the successful
operation of the Company and increased efficiency in his work and to provide the
Participant benefits upon retirement, death, disability or other termination of
employment, in consideration of services to be performed after the date of this
Agreement but prior to his retirement.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
1. Definitions.
A. Administrative Committee - "Administrative Committee" shall
mean the committee appointed pursuant to Section 4 of this Agreement.
B. Age - "Age" shall mean the age of the person as of his last
birthday.
C. Change in Control - "Change in Control," shall mean
the first to occur of any of the following events: (a) any person
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or entity becomes, subsequent to the date of this Agreement, the beneficiary
owner, directly or indirectly of 51% or more of the then issued and outstanding
voting stock of the Company (and, for the purposes hereof, a person will be
considered to be a beneficial owner of such stock if such person, directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise has or shares voting power, which includes the power to vote or to
direct the voting of such stock, or investment power, which includes the power
to dispose or direct the disposition of such stock), (b) the Company merges or
consolidates with or reorganizes with or into any other corporation or
corporations other than its affiliates or engages in any other similar business
combination or reorganization, or (c) the Company sells, assigns or transfers
all or substantially all of its business and assets, in one or a series of
related transactions, except any such sales to affiliates.
D. Disability - "Disability" shall mean, if the Participant is
insured under a life insurance policy the premiums for which are paid by the
Company, and which policy contains a "waiver of premium" benefit, the definition
of total disability contained in the insurance policy. If the Participant is not
insured under such a life insurance policy, the Company shall, in its complete
and sole discretion, determine whether the Participant is disabled for the
purposes of this Agreement.
E. Discharge for Cause - "Discharge for Cause" shall
mean the termination of the Participant's employment with the
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Company because of (a) the Participant's willful and continued failure to
substantially perform his duties (other that any such failure resulting from his
incapacity due to physical or mental illness), after a demand for substantial
performance is delivered to him by the Company which specifically identifies the
manner in which the Company believes he has not substantially performed his
duties; (b) any willful act of misconduct by the Participant which is materially
injurious to the Company, monetarily or otherwise; (c) a criminal conviction of
the Participant for any act involving the business and affairs of the Company;
(d) a criminal conviction of the Participant for commission of a felony; or (e)
the removal of the Participant by a regulatory agency. For purposes of this
definition, no act or failure to act on the Participant's part will be
considered "willful" unless done or omitted by him not in good faith and without
reasonable belief that his act or omission was in the best interest of the
Company.
F. Early Retirement Date - "Early Retirement Date" shall mean
the first day of the month following the month in which a Participant reaches
age 60.
G. Normal Retirement Date - "Normal Retirement Date" shall
mean the first day of the month following the month in which a Participant
reaches age 65.
N. Termination of Employment - "Termination of Employment" shall
mean the Participant's ceasing to be employed by the Company for any reason
whatsoever, voluntary or involuntary, including by reason of death or
disability.
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2. Eligibility.
The Participant is eligible for the benefits provided herein
in accordance with the terms of this Agreement upon the execution hereof.
A Participant shall cease to be a Participant at Termination of
Employment. However, the employment of a Participant shall not be deemed to be
terminated by reason of an approved leave a absence granted in accordance with
uniform rules applied in a non-discriminatory manner.
3. Payment of Benefits.
3.1 Benefits Upon Normal Retirement.
Upon a Participant's Termination of Employment on the Normal
Retirement Date, the Company shall pay to the Participant, as compensation for
services rendered prior to such date, the sum of $60,700.00 per year, payable in
monthly installments of $5,058.33 each, commencing on the first day of the month
coincident with or next following the date of Termination of Employment and
continuing on the first day of each month thereafter for a period of fifteen
years, but in any event until a minimum of 180 total monthly payments are made
to the Participant or the Participant's beneficiary per Section 3.6(b).
3.2 Benefits Upon Early Retirement.
Upon a Participant's Termination of Employment on or after
reaching the Early Retirement Date but prior to the Normal Retirement Date, the
Company shall pay to the Participant, as compensation for services rendered
prior to such date, monthly
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payments equal to the benefit described in Schedule A, attached. Such payments
shall commence on the first day of the month coincident with or next following
the date of Termination of Employment and shall continue on the first day of
each month thereafter for a period of fifteen years but in any event until a
minimum of 180 payments are made to the Participant or to the Participant's
beneficiary per Section 3.6(b).
The Participant may elect, on or before December 31 of the year
prior to Termination of Employment, to defer commencement of payment of the
early retirement benefit to a date not later than the Normal Retirement Date.
Such election shall be in writing and submitted to the Company. If a Participant
elects to defer payment of the benefit until his Normal Retirement Date, the
Company shall pay to the Participant the normal retirement benefit described in
Section 3.1 above. If a Participant elects to defer payment of the benefit to a
date prior to the Normal Retirement Date, the Company shall pay to the
Participant a benefit calculated in accordance with the first sentence of this
Section 3.2, but using the date selected by the Participant for the commencement
of his benefit as his "Termination of Employment" date instead of his actual
termination date.
3.3 Benefits Upon Late Retirement.
Upon a Participant's Termination of Employment after the Normal
Retirement Date, the Company shall pay to the Participant as compensation for
services rendered prior to such date, the normal retirement benefit described in
Section 3.1 above, increased by .05
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per year or .00416 for each month that the Participant's Termination of
Employment is deferred beyond the Normal Retirement Date, in equal monthly
installments commencing on the first day of the month coincident with or next
following the date of Termination of Employment and continuing on the first day
of each month thereafter for the periods specified in Section 3.1.
3.4 Benefits Upon Disability.
Upon a Participant's Termination of Employment prior to the
Normal Retirement Date due to Disability, no separate provision is made for a
disability benefit under this Agreement. However, any such Participant shall be
considered, notwithstanding such Termination of Employment, to continue to be a
Participant's death while disabled and for so long as the disability continues
prior to reaching the Early Retirement Date, such Participant's beneficiary
shall receive the survivor's benefits described in Section 3.6(a). In the event
the Participant lives to the Early Retirement Date, the Participant shall be
entitled to receive the early retirement benefit described in Section 3.2.
3.5 Other Terminations of Employment.
a) Voluntary Termination of Employment Prior to the Early
Retirement Date or Discharge for Cause at any Time. Upon a Participant's
voluntary Termination of Employment prior to reaching the Early Retirement Date,
for reasons other than death or Disability, or upon the Participant's Discharge
for Cause at any time, the Company shall not be obligated to pay any benefit to
the Participant pursuant to this Agreement, and the Participant shall
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have no further right to receive any benefit hereunder.
b) Involuntary Termination of Employment Prior to the Early
Retirement Date Other Than Because of Death, Disability or Discharge for Cause.
Upon a Participant's involuntary Termination of Employment prior to reaching the
Early Retirement Date, for reasons other than death, disability, or discharge
for cause, the Company shall pay to the Participant as compensation for services
rendered prior to such Termination of Employment, a sum to be negotiated between
the Participant and the Company at the time of termination.
c) Termination of Employment At or After A Change in Ownership
of Control. If a Participant incurs a voluntary or involuntary Termination of
Employment prior to reaching the Early Retirement Date, for reasons other than
death, disability, or discharge for cause, but on or after the occurrence of a
Change in Control, and in connection with such change, the Participant's title,
duties, responsibilities, or compensation is significantly lessened or his situs
of employment is changed, without his consent, the Company shall pay to the
Participant, as compensation for services rendered prior to such Termination of
Employment, monthly payments equal to the benefit described in Schedule A.
attached.
3.6 Survivorship Benefits.
a) Prior to Commencement of Normal or Early Retirement
Benefits. If a Participant dies while in the service of the Company or after a
Termination of Employment due to Disability and
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while Disabled or after a Termination of Employment on or after the Early
Retirement Date, but prior to commencement of any benefit payments under this
Agreement, the Company shall pay to the Participant's beneficiary a survivor's
benefit of 180 equal monthly installments of $5,058.33 commencing on the first
day of the month after the Participant's death and continuing on the first day
of each month thereafter until all such payments are completed. In the event a
beneficiary dies before receiving all the survivor's benefit payments, the
remaining payments shall be paid to the legal representatives of the
beneficiary's estate. Payment of the survivor's benefit shall relieve the
Company of the obligation to pay any other benefit which the Participant would
have otherwise received, under the terms of this Agreement.
b) After Commencement of Benefits. If a Participant dies after
any benefit payments have commenced, but prior to receiving all of the scheduled
minimum number of monthly payments, the Company shall pay the remaining monthly
payments to the Participant's beneficiary. In the event a beneficiary dies
before receiving all the remaining payments, the then-remaining payments shall
be paid to the legal representatives of the beneficiary's estate.
3.7 Recipients of Payments: Designation of Beneficiary.
All payments to be made by the Company shall be made to the
Participant, if living. In the event of a Participant's death prior to the
receipt of all benefit payments, all subsequent payments to be made under this
Agreement shall be to the
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beneficiary or beneficiaries of the Participant. The Participant shall designate
a beneficiary by filing a written notice of such designation with the Company in
such form as the Company may prescribe. The Participant may revoke or modify
said designation at any time by a further written designation. The Participant's
beneficiary designation shall be deemed automatically revoked in the event of
the death of the beneficiary or, if the beneficiary is the Participant's spouse,
in the event of dissolution of marriage. If no designation shall be in effect at
the time any benefits payable under this Agreement shall become due, the
beneficiary shall be the spouse of the Participant, or if no spouse is then
living, the legal representatives of the Participant's estate.
4. Administration and Interpretation of this Agreement.
The Board of Directors shall appoint an Administrative
Committee consisting of three (3) or more persons to administer and interpret
this Agreement. Interpretation by the Administrative Committee shall be final
and binding upon a Participant. The Administrative Committee may adopt rules and
regulations relating to this Agreement as it may deem necessary or advisable for
the administration thereof.
5. Claims Procedure.
If the Participant or the Participant's beneficiary (hereinafter
referred to as a "Claimant") is denied all or a portion of an expected benefit
under this Plan for any reason, he or she may file a claim with the
Administrative Committee. The Administrative Committee shall notify the Claimant
within 60 days
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of allowance or denial of the claim, unless the Claimant receives written notice
from the Administrative Committee prior to the end of the sixty (60) day period
stating that special circumstances require an extension of the time for
decision. The notice of the Administrative Committee's decision shall be in
writing, sent by mail to Claimant's last known address, and, if a denial of the
claim, must contain the following information:
a) the specific reasons for the denial;
b) specific reference to pertinent provisions of the Plan on
which the denial is based; and
c) if applicable, a description of any additional
information or material necessary to perfect the claim, an explanation of why
such information or material is necessary, and an explanation of the claims
review procedure.
6) Review Procedure.
a) A Claimant is entitled to request a review of any denial of
his claim by the Administrative Committee. The request for review must be
submitted in writing within 60 days of mailing of notice of the denial. Absent a
request for review within the 60-day period, the claim will be deemed to be
conclusively denied. The Claimant or his representative shall be entitled to
review all pertinent documents, and to submit issues and comments orally and in
writing.
b) If the request for review by a Claimant concerns the
interpretation and application of the provisions of the Agreement and the
Company's obligations, then the review shall be conducted
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by a separate committee consisting of three persons designated or appointed by
the Administrative Committee. The separate committee shall afford the Claimant a
hearing and the opportunity to review all pertinent documents and submit issues
and comments orally and in writing and shall render a review decision in
writing, all within sixty (60) days after receipt of a request for a review,
provided that, in special circumstances (such as the necessity of holding a
hearing) the committee may extend the time for decision by not more than sixty
(60) days upon written notice to the Claimant. The Claimant shall receive
written notice of the separate committee's review decision, together with
specific reasons for the decision and reference to the pertinent provisions of
this Agreement.
7. Life Insurance and Funding.
The Company in its discretion may apply for and procure as owner and
for its own benefit, insurance on the life of the Participant, in such amounts
and in such forms as the Company may choose. The Participant shall have no
interest whatsoever in any such policy or policies, but at the request of the
Company he shall submit to medical examinations and supply such information and
execute such documents as may be required by the insurance company or companies
to whom the Company has applied for insurance.
The rights of the Participant, or his beneficiary, or estate, to
benefits under the Plan shall be solely those of an unsecured creditor of the
Company. Any insurance policy or other assets acquired by or held by the Company
in connection with the
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liabilities assumed by it pursuant to the Plan shall not be deemed to be held
under any trust for the benefit of the Participant, his beneficiary, or his
estate, or to be security for the performance of the obligations of the Company
but shall be, and remain, a general, unpledged, and unrestricted asset of the
Company.
If this Agreement is funded through insurance on the life of the
Participant, then in the event of such Participant's death during the first two
(2) years after the effective date of this Agreement, and if such Participant's
death was a result of suicide or if such Participant made any material
misstatement or failed to make a material disclosure of information in any
documentation which the Participant is requested to complete in connection with
this Agreement, then no death benefits under the terms of this Agreement will be
payable, unless and to the extent that the Board of Directors of Company, in
their absolute discretion, may otherwise determine.
8. Assignment of Benefits.
Neither the Participant nor any other beneficiary under the Plan shall
have any right to assign the right to receive any benefits hereunder, and in the
event of any attempted assignment or transfer, the Company shall have no further
liability hereunder.
9. Employment Not Guaranteed by Agreement.
Neither this Agreement nor any action taken hereunder shall be
construed as giving a Participant the right to be retained as an Executive
Employee or as an employee of the Company for any period.
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10. Taxes.
The Company shall deduct from all payments made hereunder all
applicable federal or state taxes required by law to be withheld from such
payments.
11. Amendment and Termination.
The Board of Directors may, at any time, amend or terminate this
Agreement, provided that the Board may not reduce or modify any benefit in pay
status to a Participant or beneficiary hereunder or any benefit that would
become payable hereunder if the Participant were to have died or were to have
been involuntarily terminated under Section 3.5(b) hereof on the day prior to
such action by the Board, without the prior written consent of the Participant.
The Company is entering into this Agreement upon the assumption that
certain existing tax laws will continue in effect in substantially their current
form. In the event of any changes in Federal law relating to and allowing the
tax-free accumulation of earnings within a life insurance policy, the income
tax-free payment of proceeds from life insurance policies or any other law which
would result in a material adverse impact upon the Company's ability to perform
its obligations under this Agreement, the Company shall have an option to
terminate or modify this Agreement subject to the protection afforded
Participant's in the preceding paragraph above.
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12. Construction.
This Agreement shall be construed according to the laws of the
state of Wisconsin.
13. Form of Communication.
Any election, application, claim, notice or other communication
required or permitted to be made by a Participant to the Company shall be made
in writing and in such form as the Company shall prescribe. Such communication
shall be effective upon mailing, if sent by first class mail, postage pre-paid,
and addressed to the Company's office at 0000 Xxxxx 00xx Xxxxxx Xxxxxxxxx,
Xxxxxxxxx 00000.
14. Captions.
The captions at the head of a section or a paragraph of this Agreement
are designed for convenience of reference only and are not to be resorted to for
the purpose of interpreting any provision of this Agreement.
15. Severability.
The invalidity of any portion of this Agreement shall not invalidate
the remainder thereof, and said remainder shall continue in full force and
effect.
16. Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit
of the Company and the Participant, and each of their successors, heirs,
personal representatives and permitted assigns. No sale of substantially all of
the Company's assets shall be made without the buyer expressly assuming the
obligation of this Agreement. The Company further agrees that it will not be a
party
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to any merger, consolidation or reorganization unless and until its obligations
hereunder are expressly assumed by the successor or successors.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
date first set forth above.
By: /s/ Xxxxxxx X. Xxxxx
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Vice Chairman of the Board
Attest: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Secretary
/s/ Xxxxx Xxxxxxx
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Participant
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SCHEDULE A
XXXXX XXXXXXX
Annual
Salary Cont. Benefit
End of Plan Year Age Liability For 15 Years
---------------- --- --------- ------------
1 48 $ 9,849 $ 1,270
2 49 $ 20,729 $ 2,675
3 50 $ 32,748 $ 4,225
4 51 $ 46,026 $ 5,935
5 52 $ 6O,694 $ 7,825
6 53 $ 76,899 $ 9,915
7 54 $ 94,800 $12,225
8 55 $114,575 $14,775
9 56 $136,422 $17,590
10 57 $160,556 $20,700
11 58 $187,217 $24,140
12 59 $216,670 $27,940
13 60 $249,206 $32,135
14 61 $285,150 $36,770
15 62 $324,858 $41,890
16 63 $368,724 $47,550
17 64 $417,183 $53,795
18 65 $470,716 $60,700
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BENEFICIARY DESIGNATION NOTICE
To the Plan Administrator of Lincoln State Bank Executive Salary Continuation
Agreement:
Pursuant to the Provisions of my Executive Salary Continuation Agreement with
Lincoln State Bank permitting the designation of a beneficiary or beneficiaries
by a participant, I hereby designate the following persons and entities as
primary and secondary beneficiaries of any benefit under said Agreement payable
by reason of my death:
Primary Beneficiary:
Name Address Relationship
Xxxxx X. Xxxxxxx 0000 Xxxxxxxxx Xxxxx, Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxx
Secondary (Contingent) Beneficiary:
Name Address Relationship
Estate
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF BENEFICIARIES AND SECONDARY BENEFICIARIES
ARE HEREBY REVOKED.
The Plan Administrator shall pay all sums payable under this Agreement by reason
of my death to the Primary Beneficiary, if he or she survives me, and if no
Primary Beneficiary survive shall me, then to the Secondary Beneficiary, and if
no named beneficiary survives me, then the Plan Administrator shall pay all
amounts in accordance with the terms of the Executive Salary Continuation
Agreement. In the event that a named beneficiary survives me and dies prior to
receiving the entire benefit payable under said Agreement, then and in that
event, the remaining unpaid benefit, payable according to the terms of the
Agreement, shall be payable to the personal representatives of the estate of
said deceased beneficiary, who survive me, but die prior to receiving the total
benefit.
1/5/93 /s/ Xxxxx Xxxxxxx
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Date of Designation Signature of Executive
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