Exhibit 10.4
EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
FOR XXXXXX X. XXXXX
GREAT FALLS BANK
Totowa, New Jersey
January 1, 1999
Financial Institution Consulting Corporation
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
WATS: 1-800-873-0089
FAX: (000) 000-0000
(000) 000-0000
EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT FOR XXXXXX X. XXXXX
This Executive Supplemental Retirement Income Agreement (the "Agreement"),
effective as of the 1st day of January, 1999, formalizes the understanding by
and between GREAT FALLS BANK (the "Bank"), a state chartered banking association
having its principal place of business in New Jersey, and XXXXXX X. XXXXX
(hereinafter referred to as "Executive"). GREATER COMMUNITY BANCORP (the
"Holding Company") is a party to this Agreement for the sole purpose of
guaranteeing the Bank's performance hereunder.
W I T N E S S E T H :
WHEREAS, the Executive is employed by the Bank; and
WHEREAS, the Bank recognizes the valuable services heretofore performed by
the Executive and wishes to encourage his continued employment; and
WHEREAS, the Executive wishes to be assured that he will be entitled to a
certain amount of additional compensation for some definite period of time from
and after retirement from active service with the Bank or other termination of
employment and wishes to provide his beneficiary with benefits from and after
death; and
WHEREAS, the Bank and the Executive wish to provide the terms and
conditions upon which the Bank shall pay such additional compensation to the
Executive after retirement or other termination of employment and/or death
benefits to his beneficiary after death; and
WHEREAS, the Bank has adopted this Executive Supplemental Retirement
Income Agreement which controls all issues relating to benefits as described
herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the Bank and the Executive agree as follows:
SECTION I
DEFINITIONS
-----------
When used herein, the following words and phrases shall have the meanings
below unless the context clearly indicates otherwise:
1.1 "Accrued Benefit Account" shall be represented by the bookkeeping entries
required to record the Executive's (i) Phantom Contributions plus (ii)
accrued interest, equal to the Interest Factor, earned to-date on such
amounts. However, neither the existence of such bookkeeping entries nor
the Accrued Benefit Account itself shall be deemed to create either a
trust of any kind, or a fiduciary relationship between the Bank and the
Executive or any Beneficiary.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.3 "Administrator" means the Bank.
1.4 "Bank" means GREAT FALLS BANK and any successor thereto.
1.5 "Beneficiary" means the person or persons (and their heirs) designated as
Beneficiary in Exhibit B of this Agreement to whom the deceased
Executive's benefits are payable. If no Beneficiary is so designated, then
the Executive's Spouse, if living, will be deemed the Beneficiary. If the
Executive's Spouse is not living, then the Children of the Executive will
be deemed the Beneficiaries and will take on a per stirpes basis. If there
are no Children, then the Estate of the Executive will be deemed the
Beneficiary.
1.6 "Benefit Age" means the later of: (i) the Executive's sixty-fifth (65th)
birthday or (ii) the actual date the Executive's full-time service with
the Bank terminates. Notwithstanding the above, if the Executive is
employed by the Bank on his Early Retirement Age and elects to retire on
or after the attainment of his Early Retirement Age but before Normal
Retirement Age, "Benefit Age" shall mean the later of: (i) the Executive's
sixtieth (60th) birthday or (ii) the actual date of the Executive's
retirement.
1.7 "Benefit Eligibility Date" means the date on which the Executive is
entitled to receive any benefit(s) pursuant to Section(s) III or V of this
Agreement. It shall be the first day of the month following the month in
which the Executive attains his Benefit Age.
1.8 "Board of Directors" means the board of directors of the Bank.
1.9 "Cause" shall mean willful misconduct, breach of fiduciary duty involving
personal benefit to the Executive, conviction of a felony, willful breach
or willful neglect by the Executive of his duties as an Executive of the
Holding Company or the Bank, or persistent negligence or misconduct in the
performance of such duties. For purposes of this definition, no act or
failure to act on the part of the Executive shall be considered "willful"
unless done or omitted not in good faith and without reasonable belief
that the action or omission was in the best interest of the Holding
Company or the Bank. If the termination for Cause occurs after a Change in
Control, the Executive shall not be deemed to have been terminated for
Cause hereunder unless and until: (i) there shall have been delivered to
the Executive a copy of a certification by a majority of the non-officer
members of the Board of Directors of the Bank finding that, in the good
faith opinion of such majority, the Executive was guilty of conduct which
was deemed to be Cause for termination and specifying the particulars
thereof in detail, and (ii) after reasonable notice to the Executive there
shall have been an opportunity for the Executive, together with counsel to
the Executive, to be heard before such non-officer members of the Board of
Directors.
1.10 "Change in Control" of the Holding Company or the Bank shall mean the
first to occur of any of the following events:
(a) Any person or entity or group of affiliate persons or entities
(other than the Holding Company) becomes a beneficial owner,
directly or indirectly, of 25% or more of the Holding Company's
and/or the Bank's voting securities or all or substantially all of
the assets of Holding Company and/or the Bank.
(b) Holding Company and/or the Bank enters into a definitive agreement
which contemplates the merger, consolidation or combination of
either Holding Company or the Bank with an unaffiliated entity in
which either or both of the following is to occur: (i) the directors
of Holding Company and/or Bank, as applicable, immediately prior to
such merger, consolidation or combination will constitute less than
a majority of the board of directors of the surviving, new or
combined entity; or (ii) less than 75% of the outstanding voting
securities of the surviving, new or combined entity will be
beneficially owned by the stockholders
of Holding Company immediately prior to such merger, consolidation
or combination; provided, however, that if any definitive agreement
to merge, consolidate or combine is terminated without consummation
of the transaction, then no Change in Control shall be deemed to
have occurred pursuant to this paragraph (b).
(c) Holding Company and/or the Bank enters into a definitive agreement
which contemplates the transfer of all or substantially all of
Holding Company's and/or the Bank's assets, other than to a
wholly-owned subsidiary of Holding Company; provided, however, that
if any definitive agreement to transfer assets is terminated without
consummation of the transfer, then no Change in Control shall be
deemed to have occurred pursuant to this paragraph (c).
(d) A majority of the members of the Board of Directors of either
Holding Company or the Bank shall be persons who: (i) were not
members of such Board on the date hereof ("current members"); and
(ii) were not nominated by a vote of the Board which included the
affirmative vote of a majority of the current members on the Board
at the time of their nomination ("future designees") and (iii) were
not nominated by a vote of the Board which included the affirmative
vote of a majority of the current members and future designees,
taken as a group, on the Board at the time of their nomination.
1.11 "Children" means all natural or adopted children of the Executive, and
issue of any predeceased child or children.
1.12 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.13 "Contribution(s)" means those annual contributions which the Bank is
required to make to the Retirement Income Trust Fund on behalf of the
Executive in accordance with Subsection 2.1(a) and in the amounts set
forth in Exhibit A of the Agreement.
1.14 (a) "Disability Benefit" means the benefit payable to the Executive
following a determination, in accordance with Subsection 6.1(a), that he
is no longer able, properly and satisfactorily, to perform his duties at
the Bank.
(b) "Disability Benefit-Supplemental" (if applicable) means the benefit
payable to the Executive's Beneficiary upon the Executive's death in
accordance with Subsection 6.1(b).
1.15 "Early Retirement Age" means, if elected by the Executive, the Executive's
sixtieth (60th) birthday or any later age mutually agreed upon by the
parties, prior to the Executive's attainment of the Normal Retirement Age
set forth in the Plan.
1.16 "Effective Date" of this Agreement shall be January 1, 1999.
1.17 "Estate" means the estate of the Executive.
1.18 "Holding Company" means GREATER COMMUNITY BANCORP, the holding company for
the Bank, and any successor thereto.
1.19 "Interest Factor" means monthly compounding, discounting or annuitizing,
as applicable, at a rate set forth in Exhibit A.
1.20 "Normal Retirement Age" means the Executive's sixty-fifth (65th) birthday
or any later age mutually agreed upon by the parties.
1.21 "Payout Period" means the time frame during which certain benefits payable
hereunder shall be distributed. Payments shall be made in 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 one hundred eighty (180) months. Should the Executive make a
Timely Election to receive a lump sum benefit payment, the Executive's
Payout Period shall be deemed to be one (1) month.
1.22 "Phantom Contributions" means those annual Contributions which the Bank is
no longer required to make on behalf of the Executive to the Retirement
Income Trust Fund. Rather, once the Executive has exercised the withdrawal
rights provided for in Subsection 2.2, the Bank shall be required to
record the annual amounts set forth in Exhibit A of the Agreement in the
Executive's Accrued Benefit Account, pursuant to Subsection 2.1.
1.23 "Plan Year" shall mean the twelve (12) month period commencing January 1
and ending December 31.
1.24 "Retirement Income Trust Fund" means the trust fund account established by
the Executive and into which annual Contributions will be made by the Bank
on behalf of the Executive pursuant to Subsection 2.1. The contractual
rights of the Bank and the Executive with respect to the Retirement Income
Trust Fund shall be outlined in a separate writing to be known as the
Xxxxxx X. Xxxxx Grantor Trust agreement.
1.25 "Spouse" means the individual to whom the Executive is legally married at
the time of the Executive's death, provided, however, that the term
"Spouse" shall not refer to an individual to whom the Executive is legally
married at the time of death if the Executive and such individual have
entered into a formal separation agreement or initiated divorce
proceedings.
1.26 "Supplemental Retirement Income Benefit" means an annual amount (before
taking into account federal and state income taxes), payable in monthly
installments throughout the Payout Period. Such benefit is projected
pursuant to the Agreement for the purpose of determining the Contributions
to be made to the Retirement Income Trust Fund (or Phantom Contributions
to be recorded in the Accrued Benefit Account). The annual Contributions
and Phantom Contributions have been actuarially determined, using the
assumptions set forth in Exhibit A, in order to fund for the projected
Supplemental Retirement Income Benefit. The Supplemental Retirement Income
Benefit for which Contributions (or Phantom Contributions) are being made
(or recorded) is set forth in Exhibit A.
1.27 "Timely Election" means the Executive has made an election to change the
form of his benefit payment(s) by filing with the Administrator a Notice
of Election to Change Form of Payment (Exhibit C of this Agreement). In
the case of benefits payable from the Accrued Benefit Account, such
election shall have been made prior to the event which triggers
distribution and at least two (2) years prior to the Executive's Benefit
Eligibility
Date. In the case of benefits payable from the Retirement Income Trust
Fund, such election may be made at any time.
SECTION II
BENEFIT FUNDING
2.1 (a) Retirement Income Trust Fund and Accrued Benefit Account. The
Executive shall establish the Xxxxxx X. Xxxxx Grantor Trust into which the
Bank shall be required to make annual Contributions on the Executive's
behalf, pursuant to Exhibit A and this Section II of the Agreement. A
trustee shall be selected by the Executive. The trustee shall maintain an
account, separate and distinct from the Executive's personal
contributions, which account shall constitute the Retirement Income Trust
Fund. The trustee shall be charged with the responsibility of investing
all contributed funds. Distributions from the Retirement Income Trust Fund
of the Xxxxxx X. Xxxxx Grantor Trust may be made by the trustee to the
Executive, for purposes of payment of any income or employment taxes due
and owing on Contributions by the Bank to the Retirement Income Trust
Fund, if any, and on any taxable earnings associated with such
Contributions which the Executive shall be required to pay from year to
year, under applicable law, prior to actual receipt of any benefit
payments from the Retirement Income Trust Fund. If the Executive exercises
his withdrawal rights pursuant to Subsection 2.2, the Bank's obligation to
make Contributions to the Retirement Income Trust Fund shall cease and the
Bank's obligation to record Phantom Contributions in the Accrued Benefit
Account shall immediately commence pursuant to Exhibit A and this Section
II of the Agreement. To the extent this Agreement is inconsistent with the
Xxxxxx X. Xxxxx Grantor Trust agreement, the Xxxxxx X. Xxxxx Grantor Trust
Agreement shall supersede this Agreement.
The annual Contributions (or Phantom Contributions) required to be made by
the Bank to the Retirement Income Trust Fund (or recorded by the Bank in
the Accrued Benefit Account) have been actuarially determined and are set
forth in Exhibit A which is attached hereto and incorporated herein by
reference. Contributions shall be made by the Bank to the Retirement
Income Trust Fund (i) within seventy-five (75) days of establishment of
such trust, and (ii) within the first thirty (30) days of the beginning of
each subsequent Plan Year, unless this Section expressly provides
otherwise. Phantom Contributions, if any, shall be recorded in the Accrued
Benefit Account within the first thirty (30) days of the beginning of each
applicable Plan Year, unless this Section expressly provides otherwise.
Phantom Contributions shall accrue interest at a rate equal
to the Interest Factor, during the Payout Period, until the balance of the
Accrued Benefit Account has been fully distributed. Interest on any
Phantom Contribution shall not commence until such Payout Period
commences.
The Administrator shall review the schedule of annual Contributions (or
Phantom Contributions) provided for in Exhibit A (i) within thirty (30)
days prior to the close of each Plan Year and (ii) if the Executive is
employed by the Bank until attaining Normal Retirement Age, on or
immediately before attainment of such Normal Retirement Age. Such review
shall consist of an evaluation of the accuracy of all assumptions used to
establish the schedule of Contributions (or Phantom Contributions).
Provided that (i) the Executive has not exercised his withdrawal rights
pursuant to Subsection 2.2 and (ii) the investments contained in the
Retirement Income Trust Fund have been deemed reasonable by the Bank, the
Administrator shall prospectively amend or supplement the schedule of
Contributions provided for in Exhibit A should the Administrator determine
during any such review that an increase in or supplement to the schedule
of Contributions is necessary in order to adequately fund the Retirement
Income Trust Fund so as to provide an annual benefit (or to provide the
lump sum equivalent of such benefit, as applicable) equal to the
Supplemental Retirement Income Benefit, on an after-tax basis, commencing
at Benefit Age and payable for the duration of the Payout Period.
(b) Withdrawal Rights Not Exercised.
--------------------------------
(1) Contributions Made Annually
---------------------------
If the Executive does not exercise any withdrawal rights pursuant to
Subsection 2.2, the annual Contributions to the Retirement Income Trust
Fund shall continue each year, unless this Subsection 2.1(b) specifically
states otherwise, until the earlier of (i) the last Plan Year that
Contributions are required pursuant to Exhibit A, or (ii) the Plan Year of
the Executive's termination of employment.
(2) Termination Following a Change in Control
-----------------------------------------
If the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2 and a Change in Control occurs at the Bank, followed within
thirty-six (36) months by either (i) the Executive's involuntary
termination of employment, or (ii) Executive's voluntary termination of
employment after: (A) a material change in the Executive's function,
duties, or responsibilities, which change would cause the Executive's
position to become one of lesser responsibility, importance, or scope from
the position the Executive held at the time of the Change in Control, (B)
a relocation of the Executive's principal place of employment by more than
thirty (30) miles from its location prior to the Change in Control, or (C)
a material reduction in the benefits and perquisites to the Executive from
those being provided at the time of the Change in Control, the
Contribution set forth on Schedule A shall continue to be required of the
Bank. The Bank shall be required to make an immediate lump sum
Contribution to the Executive's Retirement Income Trust Fund in an amount
equal to: (i) the full Contribution required for the Plan Year in which
such involuntary termination occurs, if not yet made, plus (ii) the
present value (computed using a discount rate equal to the Interest
Factor) of all remaining Contributions to the Retirement Income Trust
Fund; provided, however, that, if necessary, an additional amount shall be
contributed to the Retirement Income Trust Fund which is sufficient to
provide the Executive with after-tax benefits (assuming a constant tax
rate equal to the rate in effect as of the date of Executive's
termination) beginning at his Benefit Age, equal in amount to that benefit
which would have been payable to the Executive if no secular trust had
been implemented and the benefit obligation had been accrued under APB
Opinion No. 12, as amended by FAS 106.
(3) Termination For Cause
---------------------
If the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and is terminated for Cause pursuant to Subsection 5.2, no
further Contribution(s) to the Retirement Income Trust Fund shall be
required of the Bank, and if not yet made, no Contribution shall be
required for the Plan Year in which such termination for Cause occurs.
(4) Involuntary Termination of Employment.
--------------------------------------
If the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and the Executive's employment with the Bank is
involuntarily terminated for any reason, including a termination due to
disability of the Executive but excluding termination for Cause, or
termination following a Change in Control within thirty-six (36) months of
such Change in Control, within thirty (30) days of such involuntary
termination of employment, the Bank shall be required to make an immediate
lump sum Contribution to the Executive's Retirement Income Trust Fund in
an amount equal to: (i) the full Contribution required for the Plan Year
in which such involuntary termination occurs, if not yet made, plus (ii)
the present value (computed using a discount rate equal to the Interest
Factor) of all remaining Contributions to the Retirement Income Trust
Fund; provided however, that, if necessary, an additional amount shall be
contributed to the Retirement Income Trust Fund which is sufficient to
provide the Executive with after tax benefits (assuming a constant tax
rate equal to the rate in effect as of the date of the Executive's
termination) beginning at his Benefit Age, equal in amount to that benefit
which would have been payable to the Executive if no secular trust had
been implemented and the benefit obligation had been accrued under APB
Opinion No. 12, as amended by FAS 106.
(5) Death During Employment.
-----------------------
If the Executive does not exercise any withdrawal rights pursuant to
Subsection 2.2, and dies while employed by the Bank, and if, following the
Executive's death, the assets of the Retirement Income Trust Fund are
insufficient to provide the Supplemental Retirement Income Benefit to
which the Executive is entitled, the Bank shall be required to make a
Contribution to the Retirement Income Trust Fund equal to the sum of the
remaining Contributions set forth on Exhibit A, after taking into
consideration any payments under any life insurance policies that may have
been obtained on the Executive's life by the Retirement Income Trust Fund.
Such final contribution shall be
payable in a lump sum to the Retirement Income Trust Fund within thirty
(30) days of the Executive's death.
(6) Contributions on Early or Normal Retirement.
-------------------------------------------
If the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and terminates employment on or after attainment of his
Early Retirement Age or Normal Retirement Age, within thirty (30) days of
such termination of employment, the Bank shall be required to make an
immediate additional lump sum Contribution to the Executive's Retirement
Income Trust Fund, if necessary, in an amount sufficient to provide the
Executive with after tax benefits (assuming a constant tax rate equal to
the rate in effect as of the date of the Executive's termination)
beginning at his Benefit Age, equal in amount to that benefit which would
have been payable to the Executive if no secular trust had been
implemented and the benefit obligation had been accrued under APB Opinion
No. 12, as amended by FAS 106.
(c) Withdrawal Rights Exercised.
(1) Phantom Contributions Made Annually.
-----------------------------------
If the Executive exercises his withdrawal rights pursuant to Subsection
2.2, no further Contributions to the Retirement Income Trust Fund shall be
required of the Bank. Thereafter, Phantom Contributions shall be recorded
annually in the Executive's Accrued Benefit Account within thirty (30)
days of the beginning of each Plan Year, commencing with the first Plan
Year following the Plan Year in which the Executive exercises his
withdrawal rights. Such Phantom Contributions shall continue to be
recorded annually, unless this Subsection 2.1(c) specifically states
otherwise, until the earlier of (i) the last Plan Year that Phantom
Contributions are required pursuant to Exhibit A, or (ii) the Plan Year of
the Executive's termination of employment.
(2) Termination Following a Change in Control
-----------------------------------------
If the Executive exercises his withdrawal rights pursuant to Subsection
2.2, Phantom Contributions shall commence in the Plan Year following the
Plan Year in which the Executive first exercises his withdrawal rights. If
a Change in Control occurs at the Bank, and within thirty-six (36) months
of such Change in Control, the Executive's employment is either (i)
involuntarily terminated, or (ii) voluntarily terminated by the Executive
after: (A) a material change in the Executive's function, duties, or
responsibilities, which change would cause the Executive's position to
become one of lesser responsibility, importance, or scope from the
position the Executive held at the time of the Change in Control, (B) a
relocation of the Executive's principal place of employment by more than
thirty (30) miles from its location prior to the Change in Control, or (C)
a material reduction in the benefits and perquisites to the Executive from
those being provided at the time of the Change in Control, the Phantom
Contribution set forth below shall be required of the Bank. The Bank shall
be required to record a lump sum Phantom Contribution in the Accrued
Benefit Account within ten (10) days of the Executive's termination of
employment. The amount of such final Phantom Contribution shall be
actuarially determined based on the Phantom Contribution required, at such
time, in order to provide a benefit via this Agreement equivalent to the
Supplemental Retirement Income Benefit, on an after-tax basis, commencing
on the Executive's Benefit Eligibility Date and continuing for the
duration of the Payout Period. (Such actuarial determination shall reflect
the fact that amounts shall be payable from both the Accrued Benefit
Account as well as the Retirement Income Trust Fund and shall also reflect
the amount and timing of any withdrawal(s) made by the Executive from the
Retirement Income Trust Fund pursuant to Subsection 2.2.)
(3) Termination For Cause
---------------------
If the Executive is terminated for Cause pursuant to Subsection 5.2, the
entire balance of the Executive's Accrued Benefit Account at the time of
such termination, which shall include any Phantom Contributions which have
been recorded plus interest accrued on such Phantom Contributions, shall
be forfeited.
(4) Involuntary Termination of Employment.
-------------------------------------
If the Executive exercises his withdrawal rights pursuant to Subsection
2.2, and the Executive's employment with the Bank is involuntarily
terminated for any reason including termination due to disability of the
Executive, but excluding termination for Cause, or termination following a
Change in Control, within thirty (30) days of such involuntary termination
of employment, the Bank shall be required to record a final Phantom
Contribution in an amount equal to: (i) the full Phantom Contribution
required for the Plan Year in which such involuntary termination occurs,
if not yet made, plus (ii) the present value (computed using a discount
rate equal to the Interest Factor) of all remaining Phantom Contributions.
(5) Death During Employment.
-----------------------
If the Executive exercises his withdrawal rights pursuant to Subsection
2.2, and dies while employed by the Bank, Phantom Contributions included
on Exhibit A shall be required of the Bank. Such Phantom Contributions
shall commence in the Plan Year following the Plan Year in which the
Executive exercises his withdrawal rights and shall continue through the
Plan Year in which the Executive dies. The Bank shall also be required to
record a final Phantom Contribution within thirty (30) days of the
Executive's death. The amount of such final Phantom Contribution shall be
actuarially determined based on the Phantom Contribution required at such
time (if any), in order to provide a benefit via this Agreement equivalent
to the Supplemental Retirement Income Benefit commencing within thirty
(30) days of the date the Administrator receives notice of the Executive's
death and continuing for the duration of the Payout Period. (Such
actuarial determination shall reflect the fact that amounts shall be
payable from the Accrued Benefit Account as well as the Retirement Income
Trust Fund and shall also reflect the amount and timing of any
withdrawal(s) made by the Executive pursuant to Subsection 2.2.)
2.2 Withdrawals From Retirement Income Trust Fund.
---------------------------------------------
Exercise of withdrawal rights by the Executive pursuant to the Xxxxxx X.
Xxxxx Grantor Trust agreement shall terminate the Bank's obligation to
make any further Contributions to the Retirement Income Trust Fund, and
the Bank's obligation to record Phantom Contributions pursuant to
Subsection 2.1(c) shall commence. For purposes of this Subsection 2.2,
"exercise of withdrawal rights" shall mean those withdrawal rights to
which the Executive is entitled under Article III of the Xxxxxx X. Xxxxx
Grantor Trust agreement and shall exclude any distributions made by the
trustee of the Retirement Income Trust Fund to the Executive for purposes
of payment of income taxes in accordance with Subsection 2.1 of this
Agreement and the tax reimbursement formula contained in the trust
document, or other trust expenses properly payable from the Xxxxxx X.
Xxxxx Grantor Trust pursuant to the provisions of the trust document.
2.3 Benefits Payable From Retirement Income Trust Fund
--------------------------------------------------
Notwithstanding anything else to the contrary in this Agreement, in the
event that the trustee of the Retirement Income Trust Fund purchases a
life insurance policy with the Contributions to and, if applicable,
earnings of the Trust, and such life insurance policy is intended to
continue in force beyond the Payout Period for the disability or
retirement benefits payable from the Retirement Income Trust Fund pursuant
to this Agreement, then the trustee shall have discretion to determine the
portion of the cash value of such policy available for purposes of
annuitizing the Retirement Income Trust Fund (it being understood that for
purposes of this Section 2.3, "annuitizing" does not mean surrender of
such policy and annuitizing of the cash value received upon such
surrender) to provide the disability or retirement benefits payable under
this Agreement, after taking into consideration the amounts reasonably
believed to be required in order to maintain the cash value of such policy
to continue such policy in effect until the death of the Executive and
payment of death benefits thereunder.
SECTION III
RETIREMENT BENEFIT
3.1 (a) Normal form of payment.
----------------------
If (i) the Executive is employed with the Bank until reaching his Early
Retirement Age or Normal Retirement Age, and (ii) the Executive has not
made a Timely Election to receive a lump sum benefit, this Subsection
3.1(a) shall be controlling with respect to retirement benefits.
The Retirement Income Trust Fund, measured as of the Executive's Benefit
Age, shall be annuitized (using the Interest Factor) into monthly
installments and shall be payable for the Payout Period. Such benefit
payments shall commence on the Executive's Benefit Eligibility Date.
Should Retirement Income Trust Fund assets actually earn a rate of return,
following the date such balance is annuitized, which is less than the rate
of return used to annuitize the Retirement Income Trust Fund, no
additional contributions to the Retirement Income Trust Fund shall be
required by the Bank in order to fund the final benefit payment(s) and
make up for any shortage attributable to the less-than-expected rate of
return. Should Retirement Income Trust Fund assets actually earn a rate of
return, following the date such balance is annuitized, which is greater
than the rate of return used to annuitize the Retirement Income Trust
Fund, the final benefit payment to the Executive (or his Beneficiary)
shall distribute the excess amounts attributable to the
greater-than-expected rate of return. The Executive may at anytime during
the Payout Period request to receive the unpaid balance of his Retirement
Income Trust Fund in a lump sum payment. If such a lump sum payment is
requested by the Executive, payment of the balance of the Retirement
Income Trust Fund in such lump sum form shall be made only if the
Executive gives notice to both the Administrator and trustee in writing.
Such lump sum payment shall be payable within thirty (30) days of such
notice. In the event the Executive dies at any time after attaining his
Benefit Age, but prior to commencement or completion of all monthly
payments due and owing hereunder, (i) the trustee of the Retirement Income
Trust Fund shall pay to the Executive's Beneficiary the monthly
installments (or a continuation of such monthly installments if they have
already commenced) for the balance of months remaining in the Payout
Period, or (ii) the Executive's Beneficiary may request to receive the
unpaid balance of the Executive's
Retirement Income Trust Fund in a lump sum payment. If a lump sum payment
is requested by the Beneficiary, payment of the balance of the Retirement
Income Trust Fund in such lump sum form shall be made only if the
Executive's Beneficiary notifies both the Administrator and trustee in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment shall be payable within thirty (30) days of such
notice.
The Executive's Accrued Benefit Account (if applicable), measured as of
the Executive's Benefit Age, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable for the Payout
Period. Such benefit payments shall commence on the Executive's Benefit
Eligibility Date. In the event the Executive dies at any time after
attaining his Benefit Age, but prior to commencement or completion of all
the payments due and owing hereunder, (i) the Bank shall pay to the
Executive's Beneficiary the same monthly installments (or a continuation
of such monthly installments if they have already commenced) for the
balance of months remaining in the Payout Period, or (ii) the Executive's
Beneficiary may request to receive the remainder of any unpaid benefit
payments in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, the amount of such lump sum payment shall be equal to the
unpaid balance of the Executive's Accrued Benefit Account. Payment in such
lump sum form shall be made only if the Executive's Beneficiary (i)
obtains Board of Director approval, and (ii) notifies the Administrator in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment, if approved by the Board of Directors, shall be
made within thirty (30) days of such Board of Director approval.
(b) Alternative payout option.
-------------------------
(1) Executive Lives Until Benefit Age.
---------------------------------
If (i) the Executive is employed with the Bank until reaching his Early
Retirement Age or Normal Retirement Age, and (ii) the Executive has made a
Timely Election to receive a lump sum benefit, this Subsection 3.1(b)
shall be controlling with respect to retirement benefits.
The balance of the Retirement Income Trust Fund, measured as of the
Executive's Benefit Age, shall be paid to the Executive in a lump sum on
his Benefit Eligibility Date. In the event the Executive dies after
becoming eligible for such payment (upon attainment of his Benefit Age),
but before the actual payment is made, his Beneficiary shall be entitled
to receive the lump sum benefit in accordance with this Subsection 3.1(b)
within thirty (30) days of the date the Administrator receives notice of
the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the Executive's Benefit Age, shall be paid to the Executive
in a lump sum on his Benefit Eligibility Date. In the event the Executive
dies after becoming eligible for such payment
(upon attainment of his Benefit Age), but before the actual payment is
made, his Beneficiary shall be entitled to receive the lump sum benefit in
accordance with this Subsection 3.1(b) within thirty (30) days of the date
the Administrator receives notice of the Executive's death.
SECTION IV
PRE-RETIREMENT DEATH BENEFIT
4.1 (a) Normal form of payment.
----------------------
If (i) the Executive dies while employed by the Bank, and (ii) the
Executive has not made a Timely Election to receive a lump sum benefit,
this Subsection 4.1(a) shall be controlling with respect to pre-retirement
death benefits.
The balance of the Executive's Retirement Income Trust Fund, measured as
of the later of (i) the Executive's death, or (ii) the date any final lump
sum Contribution is made pursuant to Subsection 2.1(b), shall be
annuitized (using the Interest Factor) into monthly installments and shall
be payable for the Payout Period. Such benefits shall commence within
thirty (30) days of the date the Administrator receives notice of the
Executive's death. Should Retirement Income Trust Fund assets actually
earn a rate of return, following the date such balance is annuitized,
which is less than the rate of return used to annuitize the Retirement
Income Trust Fund, no additional contributions to the Retirement Income
Trust Fund shall be required by the Bank in order to fund the final
benefit payment(s) and make up for any shortage attributable to the
less-than-expected rate of return. Should Retirement Income Trust Fund
assets actually earn a rate of return, following the date such balance is
annuitized, which is greater than the rate of return used to annuitize the
Retirement Income Trust Fund, the final benefit payment to the Executive's
Beneficiary shall distribute the excess amounts attributable to the
greater-than-expected rate of return. The Executive's Beneficiary may
request to receive the unpaid balance of the Executive's Retirement Income
Trust Fund in a lump sum payment. If a lump sum payment is requested by
the Beneficiary, payment of the balance of the Retirement Income Trust
Fund in such lump sum form shall be made only if the Executive's
Beneficiary notifies both the Administrator and trustee in writing of such
election within ninety (90) days of the Executive's death. Such lump sum
payment shall be made within thirty (30) days of such notice.
The Executive's Accrued Benefit Account (if applicable), measured as of
the later of (i) the Executive's death or (ii) the date any final lump sum
Phantom Contribution is recorded in the Accrued Benefit Account pursuant
to Subsection 2.1(c), shall be annuitized (using the Interest Factor) into
monthly installments and shall be payable to the Executive's Beneficiary
for the Payout Period. Such benefit payments shall commence within thirty
(30) days of the date the Administrator receives notice of the
Executive's death, or if later, within thirty (30) days after any final
lump sum Phantom Contribution is recorded in the Accrued Benefit Account
in accordance with Subsection 2.1(c). The Executive's Beneficiary may
request to receive the remainder of any unpaid monthly benefit payments
due from the Accrued Benefit Account in a lump sum payment. If a lump sum
payment is requested by the Beneficiary, the amount of such lump sum
payment shall be equal to the balance of the Executive's Accrued Benefit
Account. Payment in such lump sum form shall be made only if the
Executive's Beneficiary (i) obtains Board of Director approval, and (ii)
notifies the Administrator in writing of such election within ninety (90)
days of the Executive's death. Such lump sum payment, if approved by the
Board of Directors, shall be payable within thirty (30) days of such Board
of Director approval.
(b) Alternative payout option.
-------------------------
If (i) the Executive dies while employed by the Bank, and (ii) the
Executive has made a Timely Election to receive a lump sum benefit, this
Subsection 4.1(b) shall be controlling with respect to pre-retirement
death benefits.
The balance of the Executive's Retirement Income Trust Fund, measured as
of the later of (i) the Executive's death, or (ii) the date any final lump
sum Contribution is made pursuant to Subsection 2.1(b), shall be paid to
the Executive's Beneficiary in a lump sum within thirty (30) days of the
date the Administrator receives notice of the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the later of (i) the Executive's death, or (ii) the date
any final Phantom Contribution is recorded pursuant to Subsection 2.1(c),
shall be paid to the Executive's Beneficiary in a lump sum within thirty
(30) days of the date the Administrator receives notice of the Executive's
death.
SECTION V
BENEFIT(S) IN THE EVENT OF TERMINATION OF SERVICE
PRIOR TO NORMAL RETIREMENT AGE
5.1 Voluntary or Involuntary Termination of Service Other Than for Cause. In
the event the Executive's service with the Bank is voluntarily or
involuntarily terminated prior to Normal Retirement Age, for any reason
including a Change in Control, but excluding (i) any disability related
termination for which the Board of Directors has approved early
payment of benefits pursuant to Subsection 6.1, (ii) the Executive's
pre-retirement death, which shall be covered in Section IV, (iii)
retirement elected by the Executive upon the attainment of his Early
Retirement Age, which shall be covered in Section III, or (iv) termination
for Cause, which shall be covered in Subsection 5.2, the Executive (or his
Beneficiary) shall be entitled to receive benefits in accordance with this
Subsection 5.1. Payments of benefits pursuant to this Subsection 5.1 shall
be made in accordance with Subsection 5.1 (a) or 5.1 (b) below, as
applicable.
(a) Normal form of payment.
----------------------
(1) Executive Lives Until Benefit Age
---------------------------------
If (i) after such termination, the Executive lives until attaining his
Benefit Age, and (ii) the Executive has not made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(a)(1) shall be controlling
with respect to retirement benefits.
The Retirement Income Trust Fund, measured as of the Executive's Benefit
Age, shall be annuitized (using the Interest Factor) into monthly
installments and shall be payable for the Payout Period. Such payments
shall commence on the Executive's Benefit Eligibility Date. Should
Retirement Income Trust Fund assets actually earn a rate of return,
following the date such balance is annuitized, which is less than the rate
of return used to annuitize the Retirement Income Trust Fund, no
additional contributions to the Retirement Income Trust Fund shall be
required by the Bank in order to fund the final benefit payment(s) and
make up for any shortage attributable to the less-than-expected rate of
return. Should Retirement Income Trust Fund assets actually earn a rate of
return, following the date such balance is annuitized, which is greater
than the rate of return used to annuitize the Retirement Income Trust
Fund, the final benefit payment to the Executive (or his Beneficiary)
shall distribute the excess amounts attributable to the
greater-than-expected rate of return. The Executive may at anytime during
the Payout Period request to receive the unpaid balance of his Retirement
Income Trust Fund in a lump sum payment. If such a lump sum payment is
requested by the Executive, payment of the balance of the Retirement
Income Trust Fund in such lump sum form shall be made only if the
Executive gives notice to both the Administrator and trustee in writing.
Such lump sum payment shall be payable within thirty (30) days of such
notice. In the event the Executive dies at any time after attaining his
Benefit Age, but prior to commencement or completion of all monthly
payments due and owing hereunder, (i) the trustee of the Retirement Income
Trust Fund shall pay to the Executive's Beneficiary the monthly
installments (or a continuation of the monthly installments if they have
already commenced) for the balance of months remaining in the Payout
Period, or (ii) the Executive's Beneficiary may request to receive the
unpaid balance of the Executive's Retirement Income Trust Fund in a lump
sum payment. If a lump sum payment is requested by the Beneficiary,
payment of the balance of the Retirement Income Trust Fund in such lump
sum form shall be made only if the Executive's Beneficiary notifies both
the Administrator and trustee in writing of such election within ninety
(90) days of the Executive's death. Such lump sum payment shall be made
within thirty (30) days of such notice.
The Executive's Accrued Benefit Account (if applicable), measured as of
the Executive's Benefit Age, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable for the Payout
Period. Such benefit payments shall commence on the Executive's Benefit
Eligibility Date. In the event the Executive dies at any time after
attaining his Benefit Age, but prior to commencement or completion of all
the payments due and owing hereunder, (i) the Bank shall pay to the
Executive's Beneficiary the same monthly installments (or a continuation
of such monthly installments if they have already commenced) for the
balance of months remaining in the Payout Period, or (ii) the Executive's
Beneficiary may request to receive the remainder of any unpaid benefit
payments in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, the amount of such lump sum payment shall be equal to the
unpaid balance of the Executive's Accrued Benefit Account. Payment in such
lump sum form shall be made only if the Executive's Beneficiary (i)
obtains Board of Director approval, and (ii) notifies the Administrator in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment, if approved by the Board of Directors, shall be
made within thirty (30) days of such Board of Director approval.
(2) Executive Dies Prior to Benefit Age
-----------------------------------
If (i) after such termination, the Executive dies prior to attaining his
Benefit Age, and (ii) the Executive has not made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(a)(2) shall be controlling
with respect to retirement benefits.
The Retirement Income Trust Fund, measured as of the date of the
Executive's death, shall be annuitized (using the Interest Factor) into
monthly installments and shall be payable for the Payout Period. Such
payments shall commence within thirty (30) days of the date the
Administrator receives notice of the Executive's death. Should Retirement
Income Trust Fund assets actually earn a rate of return, following the
date such balance is annuitized, which is less than the rate of return
used to annuitize the Retirement Income Trust Fund, no additional
contributions to the Retirement Income Trust Fund shall be required by the
Bank in order to fund the final benefit payment(s) and make up for any
shortage attributable to the less-than-expected rate of return. Should
Retirement Income Trust Fund assets actually earn a rate of return,
following the date such balance is annuitized, which is greater than the
rate of return used to annuitize the Retirement Income Trust Fund, the
final benefit payment to the Executive's Beneficiary shall distribute the
excess amounts attributable to the greater-than-expected rate of return.
The Executive's Beneficiary may request to receive the unpaid balance of
the Executive's
Retirement Income Trust Fund in the form of a lump sum payment. If a lump
sum payment is requested by the Beneficiary, payment of the balance of the
Retirement Income Trust Fund in such lump sum form shall be made only if
the Executive's Beneficiary notifies both the Administrator and trustee in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment shall be made within thirty (30) days of such
notice.
The Executive's Accrued Benefit Account (if applicable), measured as of
the date of the Executive's death, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable for the Payout
Period. Such payments shall commence within thirty (30) days of the date
the Administrator receives notice of the Executive's death. The
Executive's Beneficiary may request to receive the unpaid balance of the
Executive's Accrued Benefit Account in the form of a lump sum payment. If
a lump sum payment is requested by the Beneficiary, payment of the balance
of the Accrued Benefit Account in such lump sum form shall be made only if
the Executive's Beneficiary (i) obtains Board of Director approval, and
(ii) notifies the Administrator in writing of such election within ninety
(90) days of the Executive's death. Such lump sum payment, if approved by
the Board of Directors, shall be made within thirty (30) days of such
Board of Director approval.
(b) Alternative Payout Option.
-------------------------
(1) Executive Lives Until Benefit Age
---------------------------------
If (i) after such termination, the Executive lives until attaining his
Benefit Age, and (ii) the Executive has made a Timely Election to receive
a lump sum benefit, this Subsection 5.1(b)(1) shall be controlling with
respect to retirement benefits.
The balance of the Retirement Income Trust Fund, measured as of the
Executive's Benefit Age, shall be paid to the Executive in a lump sum on
his Benefit Eligibility Date. In the event the Executive dies after
becoming eligible for such payment (upon attainment of his Benefit Age),
but before the actual payment is made, his Beneficiary shall be entitled
to receive the lump sum benefit in accordance with this Subsection
5.1(b)(1) within thirty (30) days of the date the Administrator receives
notice of the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the Executive's Benefit Age, shall be paid to the Executive
in a lump sum on his Benefit Eligibility Date. In the event the Executive
dies after becoming eligible for such payment
(upon attainment of his Benefit Age), but before the actual payment is
made, his Beneficiary shall be entitled to receive the lump sum benefit in
accordance with this Subsection 5.1(b)(1) within thirty (30) days of the
date the Administrator receives notice of the Executive's death.
(2) Executive Dies Prior to Benefit Age
------------------------------------
If (i) after such termination, the Executive dies prior to attaining his
Benefit Age, and (ii) the Executive has made a Timely Election to receive
a lump sum benefit, this Subsection 5.1(b)(2) shall be controlling with
respect to pre-retirement death benefits.
The balance of the Retirement Income Trust Fund, measured as of the date
of the Executive's death, shall be paid to the Executive's Beneficiary
within thirty (30) days of the date the Administrator receives notice of
the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the date of the Executive's death, shall be paid to the
Executive's Beneficiary within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
5.2 Termination For Cause.
---------------------
If the Executive is terminated for Cause, all benefits under this
Agreement, other than those which can be paid from previous Contributions
to the Retirement Income Trust Fund (and earnings on such Contributions),
shall be forfeited. Furthermore, no further Contributions (or Phantom
Contributions, as applicable) shall be required of the Bank for the year
in which such termination for Cause occurs (if not yet made). The
Executive shall be entitled to receive a benefit in accordance with this
Subsection 5.2.
The balance of the Executive's Retirement Income Trust Fund shall be paid to
the Executive in a lump sum on his Benefit Eligibility Date. In the event
the Executive dies prior to his Benefit Eligibility Date, his Beneficiary
shall be entitled to receive the balance of the Executive's Retirement
Income Trust Fund in a lump sum within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
SECTION VI
OTHER BENEFITS
--------------
6.1 (a) Disability Benefit.
------------------
If the Executive's service is terminated prior to Early Retirement Age or
Normal Retirement Age due to a disability which meets the criteria set
forth below, the Executive may request to receive the Disability Benefit
in lieu of the retirement benefit(s) available pursuant to Section 5.1
(which is (are) not available prior to the Executive's Benefit Eligibility
Date).
In any instance in which: (i) it is determined by a duly licensed,
independent physician selected by the Bank, that the Executive is no
longer able, properly and satisfactorily, to perform his regular duties as
an officer, because of ill health, accident, disability or general
inability due to age, (ii) the Executive requests payment under this
Subsection in lieu of Subsection 5.1, and (iii) Board of Director approval
is obtained to allow payment under this Subsection, in lieu of Subsection
5.1, the Executive shall be entitled to the following lump sum benefit(s).
The lump sum benefit(s) to which the Executive is entitled shall include:
(i) the balance of the Retirement Income Trust Fund, plus (ii) the balance
of the Accrued Benefit Account (if applicable). The benefit(s) shall be
paid within thirty (30) days following the date of the Executive's request
for such benefit is approved by the Board of Directors. In the event the
Executive dies after becoming eligible for such payment(s) but before the
actual payment(s) is (are) made, his Beneficiary shall be entitled to
receive the benefit(s) provided for in this Subsection 6.1(a) within
thirty (30) days of the date the Administrator receives notice of the
Executive's death.
(b) Disability Benefit - Supplemental.
---------------------------------
Furthermore, if Board of Director approval is obtained within thirty (30)
days of the Executive's death, the Bank shall make a direct, lump sum
payment to the Executive's Beneficiary in an amount equal to the sum of
all remaining Contributions (or Phantom Contributions) set forth in
Exhibit A, but not required pursuant to Subsection 2.1(b) (or 2.1(c)) due
to the Executive's disability-related termination. Such lump sum payment,
if approved by the Board of Directors, shall be payable to the Executive's
Beneficiary within thirty (30) days of such Board of Director approval.
6.2 Additional Death Benefit - Burial Expense.
-----------------------------------------
Upon the Executive's death, the Executive's Beneficiary shall also be
entitled to receive a one-time lump sum death benefit in the amount of Ten
Thousand Dollars ($10,000). This benefit shall be paid directly from the
Bank to the Beneficiary and shall be provided specifically for the purpose
of providing payment for burial and/or funeral expenses of the Executive.
Such death benefit shall be payable within thirty (30) days of the date
the Administrator receives notice of the Executive's death. The
Executive's Beneficiary shall not be entitled to such benefit if the
Executive is terminated for Cause prior to death.
SECTION VII
BENEFICIARY DESIGNATION
-----------------------
The Executive shall make an initial designation of primary and secondary
Beneficiaries upon execution of this Agreement and shall have the right to
change such designation, at any subsequent time, by submitting to (i) the
Administrator, and (ii) the trustee of the Retirement Income Trust Fund,
in substantially the form attached as Exhibit B to this Agreement, a
written designation of primary and secondary Beneficiaries. Any
Beneficiary designation made subsequent to execution of this Agreement
shall become effective only when receipt thereof is acknowledged in
writing by the Administrator.
SECTION VIII
NON-COMPETITION
---------------
8.1 Non-Competition During Employment.
---------------------------------
In consideration of the agreements of the Bank contained herein and of the
payments to be made by the Bank pursuant hereto, the Executive hereby
agrees that, for as long as he remains employed by the Bank, he will
devote substantially all of his time, skill, diligence and attention to
the business of the Bank, and will not actively engage, either directly or
indirectly, in any business or other activity which is, or may be deemed
to be, in any way competitive with or adverse to the best interests of the
business of the Bank, unless the Executive has the prior express written
consent of the Bank.
8.2 Breach of Non-Competition Clause.
--------------------------------
(a) Continued Employment Following Breach.
-------------------------------------
In the event (i) any breach by the Executive of the agreements and
covenants described in Subsection 8.1 occurs, and (ii) the Executive
continues employment at the Bank following such breach, all further
Contributions to the Retirement Income Trust Fund (or Phantom
Contributions recorded in the Accrued Benefit Account) shall immediately
cease, and all benefits under this Agreement, other than those which can
be paid from previous Contributions to the Retirement Income Trust Fund
(and earnings on such Contributions), shall be forfeited. The Executive
(or his Beneficiary) shall be entitled to receive a benefit from the
Retirement Income Trust Fund in accordance with Subpart (1) or (2) below,
as applicable.
(1) Executive Lives Until Benefit Age
---------------------------------
If, following such breach, the Executive lives until attaining his Benefit
Age, he shall be entitled to receive a benefit from the Retirement Income
Trust Fund in accordance with this Subsection 8.2(a)(1). The balance of
the Retirement Income Trust Fund, measured as of the Executive's Benefit
Age, shall be paid to the Executive in a lump sum on his Benefit
Eligibility Date. In the event the Executive dies after attaining his
Benefit Age but before actual payment is made, his Beneficiary shall be
entitled to receive the lump sum benefit in accordance with this
Subsection 8.2(a)(1) within thirty (30) days of the date of the
Administrator receives notice of the Executive's death.
(2) Executive Dies Prior to Benefit Age
-----------------------------------
If, following such breach, the Executive dies prior to attaining his
Benefit Age, his Beneficiary shall be entitled to receive a benefit from
the Retirement Income Trust Fund in accordance with this Subsection 8.2
(a)(2). The balance of the Retirement Income Trust Fund, measured as of
the date of the Executive's death, shall be paid to the Executive's
Beneficiary in a lump sum within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
(b) Termination of Employment Following Breach.
------------------------------------------
In the event (i) any breach by the Executive of the agreements and
covenants described in Subsection 8.1 occurs, and (ii) the Executive's
employment with the Bank is terminated due to such breach, such
termination shall be deemed to be for Cause and the benefits payable to
the Executive shall be paid in accordance with Subsection 5.2 of this
Agreement.
8.3 Non-Competition Following Employment.
------------------------------------
(a) Executive Agrees Not to Compete
The Executive expressly agrees that, as consideration for the covenants of
the Bank contained herein and as a condition to the performance by the
Bank of its obligations hereunder, from and after any voluntary or
involuntary termination of service, other than a termination of service
related to a Change in Control, and continuing throughout the Payout
Period or, with respect to Section 8.3 (c), for two years following
termination of employment, he will not without the prior written consent
of the Bank, serve as an officer or director or employee of any bank
holding company, bank, savings association or mortgage company with its
principal office in Bergen County, New Jersey, and which offers products
or services in Bergen County competing with those offered by the Holding
Company or the Bank.
(b) Benefits Paid From Accrued Benefit Account.
------------------------------------------
Executive understands and agrees that, following Executive's voluntary or
involuntary termination of employment, the Bank's obligation, if any, to
make payments to the Executive from the Accrued Benefit Account shall be
conditioned on the Executive's forbearance from actively engaging, either
directly or indirectly in any business or other activity which is, or may
be deemed to be, in any way competitive with or adverse to the best
interests of the Bank, unless the Executive has the prior written consent
of the Bank. In the event of the Executive's breach of the covenants and
agreements contained herein, further payments to the Executive from the
Accrued Benefit Account, if any, shall cease and Executive's rights to
amounts credited to the Accrued Benefit Account shall be forfeited.
(c) Benefits Paid From Retirement Income Trust Fund.
-----------------------------------------------
Executive understands and agrees that Executive's violation of these
provisions following a voluntary or involuntary termination of employment,
other than a termination of
employment following a Change in Control, will cause irreparable harm to
the Bank. In the event of Executive's violation of this Section 8.3 within
three (3) years of such voluntary or involuntary termination of
employment, Executive agrees to pay or cause the Retirement Income Trust
Fund to pay to the Bank, as liquidated damages an amount equal to 10% of
the after-tax contributions, which the Bank has made on Executive's behalf
to the Retirement Income Trust Fund. Said liquidated damages payment shall
be separate from, and in addition to, any amounts forfeited from the
Accrued Benefit Account.
(d) Change in Control.
-----------------
In the event of a Change in Control, this Section 8.3 shall be null and
void.
SECTION IX
EXECUTIVE'S RIGHT TO ASSETS
---------------------------
The rights of the Executive, any Beneficiary, or any other person claiming
through the Executive under this Agreement, shall be solely those of an
unsecured general creditor of the Bank. The Executive, the Beneficiary, or
any other person claiming through the Executive, shall only have the right
to receive from the Bank those payments or amounts so specified under this
Agreement. The Executive 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 shall not be deemed to be held under
any trust for the benefit of the Executive or his Beneficiaries, unless
such asset is contained in the rabbi trust described in Section XII of
this Agreement. Any such asset shall be and remain, a general, unpledged
asset of the Bank in the event of the Bank's insolvency.
SECTION X
RESTRICTIONS UPON FUNDING
-------------------------
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,
other than those Contributions required to be made to the Retirement
Income Trust Fund. The Executive, his Beneficiaries or any successor in
interest to him shall be and remain simply a general unsecured creditor of
the Bank in the same manner as any other creditor having a general claim
for matured and unpaid compensation. 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 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 replace such assets from time to time or to terminate its
investment in such assets at any time, in whole or in part. At no time
shall the Executive be deemed to have any lien, right, title or interest
in or to any specific investment or to any assets of the Bank. If the Bank
elects to invest in a life insurance, disability or annuity policy upon
the life of the Executive, then the Executive shall assist the Bank by
freely submitting to a physical examination and by supplying such
additional information necessary to obtain such insurance or annuities.
SECTION XI
ACT PROVISIONS
--------------
11.1 Named Fiduciary and Administrator. The Bank, as Administrator, shall be
the Named Fiduciary 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
Agreement are not paid to the Executive (or to his Beneficiary in the case
of the Executive'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, it shall provide in writing, within ninety (90) days of receipt
of such claim, its specific reasons for such denial, reference to the
provisions of this Agreement upon which the denial is based, and any
additional material or 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 second review, they shall notify the Administrator
in writing within sixty (60) days of the first claim denial. Claimants may
review this 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 second 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 upon
which the decision is based.
If claimants continue to dispute the benefit denial based upon completed
performance of this Plan and the Joinder Agreement or the meaning and
effect of the terms and conditions thereof, then claimants may submit the
dispute to mediation, administered by the American Arbitration Association
("AAA") (or a mediator selected by the parties) in accordance with the
AAA's Commercial Mediation Rules. If mediation is not successful in
resolving the dispute, it shall be settled by arbitration administered by
the AAA under its Commercial Arbitration Rules, and judgment on the award
rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
SECTION XII
MISCELLANEOUS
-------------
12.1 No Effect on Employment Rights. Nothing contained herein will confer upon
the Executive the right to be retained in the service of the Bank nor
limit the right of the Bank to discharge or otherwise deal with the
Executive without regard to the existence of the Agreement.
12.2 State Law. The Agreement is established under, and will be construed
according to, the laws of the state of New Jersey, to the extent such laws
are not preempted by the Act and valid regulations published thereunder.
12.3 Severability. In the event that any of the provisions of this Agreement or
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 Executive is declared
incompetent 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 Executive is entitled shall be paid to such
conservator or other person legally charged with the care of his person or
Estate.
12.5 Unclaimed Benefit. The Executive shall keep the Bank informed of his
current address and the current address of his Beneficiaries. The Bank
shall not be obligated to search for the whereabouts of any person. If the
location of the Executive is not made known to the Bank as of the date
upon which any payment of any benefits from the Accrued Benefit Account
may first be made, the Bank shall delay payment of the Executive's benefit
payment(s) until the location of the Executive is made known to the Bank;
however, the Bank shall only be obligated to hold such benefit payment(s)
for the Executive until the expiration of thirty-six (36) months.
12.6 Limitations on Liability. Notwithstanding any of the preceding provisions
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 Executive or any other person for any claim, loss, liability or
expense incurred in connection with the Agreement.
12.7 Gender. Whenever in this Agreement words are used in the masculine or
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
Agreement shall affect the right of the Executive 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, if
the Executive's death results from suicide, whether sane or insane, within
twenty-six (26) months after execution of this Agreement, all further
Contributions to the Retirement Income Trust Fund (or Phantom
Contributions recorded in the Accrued Benefit Account) shall thereupon
cease, and no Contribution (or Phantom Contribution) shall be made by the
Bank to the Retirement Income Trust Fund (or recorded in the Accrued
Benefit Account) in the year such death resulting from suicide occurs (if
not yet made). All benefits other than those available from previous
Contributions to the Retirement Income Trust Fund under this Agreement
shall be forfeited, and this Agreement shall become null and void. The
balance of the Retirement Income Trust Fund, measured as of the
Executive's date of death, shall be paid to the Beneficiary within thirty
(30) days of the date the Administrator receives notice of the Executive's
death.
12.10 Inurement. This Agreement shall be binding upon and shall inure to the
benefit of the Bank, its successors and assigns, and the Executive, his
successors, heirs, executors, administrators, and Beneficiaries.
12.11 Headings. Headings and sub-headings in this Agreement are inserted for
reference and convenience only and shall not be deemed a part of this
Agreement.
12.12 Establishment of a Rabbi Trust. The Bank shall establish a rabbi trust
into which the Bank shall contribute assets which shall be held therein,
subject to the claims of the Bank's creditors in the event of the Bank's
"Insolvency" (as defined in such rabbi trust agreement), until the
contributed assets are paid to the Executive and/or his Beneficiary in
such manner and at such times as specified in this Agreement. It is the
intention of the Bank that the contribution or contributions to the rabbi
trust shall provide the Bank with a source of funds to assist it in
meeting the liabilities of this Agreement.
12.13 Source of Payments. All payments provided in this Agreement shall be
timely paid in cash or check from the general funds of the Bank or the
assets of the rabbi trust, to the extent made from the Accrued Benefit
Account. The Holding Company, however guarantees payment and provision of
all amounts and benefits due to the Executive from the Accrued Benefit
Account or Contribution to the Retirement Income Trust Fund and, if such
Contributions, amounts and benefits due from the Bank are not timely paid
or provided by the Bank, such amounts and benefits shall be paid or
provided by the Holding Company.
SECTION XIII
AMENDMENT/PLAN TERMINATION
--------------------------
13.1 Amendment or Plan Termination. The Bank intends this Agreement to be
permanent, and the Agreement may not be amended or terminated without the
express written consent of the executives. Any amendment or termination of
the Agreement shall be made pursuant to a resolution of the Board of
Directors of the Bank and shall be effective as of the date of such
resolution. No amendment or termination of the Agreement shall directly or
indirectly deprive the Executive of all or any portion of the Executive's
Retirement Income Trust Fund (and Accrued Benefit Account, if applicable)
as of the effective date of the resolution amending or terminating the
Agreement.
Notwithstanding the above, if the Executive does not exercise any
withdrawal rights pursuant to Subsection 2.2, and if at any time after the
final Contribution is made to the Retirement Income Trust Fund the
Executive elects to terminate the Retirement Income Trust Fund and receive
a distribution of the assets of the Retirement Income Trust Fund, then
upon such distribution this Agreement shall terminate.
13.2 Executive's Right to Payment Following Plan Termination. In the event of a
termination of the Agreement, the Executive shall be entitled to the
balance, if any, of his Retirement Income Trust Fund (and Accrued Benefit
Account, if applicable). However, if such termination is done in
anticipation of or pursuant to a "Change in Control," such balance(s)
shall include the final Contribution (or final Phantom Contribution) made
(or recorded) pursuant to Subsection 2.1(b)(2) (or 2.1(c)(2)). Payment of
the balance(s) of the Executive's Retirement Income Trust Fund (and
Accrued Benefit Account, if applicable) shall not be dependent upon his
continuation of employment with the Bank following the termination date of
the Agreement. Payment of the balance(s) of the
Executive's Retirement Income Trust Fund (and Accrued Benefit Account, if
applicable) shall be made in a lump sum within thirty (30) days of the
date of termination of the Agreement.
SECTION XIV
EXECUTION
---------
14.1 This Agreement and the Xxxxxx X. Xxxxx Grantor Trust Agreement set forth
the entire understanding of the parties hereto with respect to the
transactions contemplated hereby, and any previous agreements or
understandings between the parties hereto regarding the subject matter
hereof are merged into and superseded by this Agreement and the Xxxxxx X.
Xxxxx Grantor Trust 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.
IN WITNESS WHEREOF, the Bank, the Holding Company and the Executive have
caused this Agreement to be executed on the day and date first above written.
ATTEST: GREAT FALLS BANK:
_______________________________ By:___________________________________
Secretary
-----------------------------------
(Title)
ATTEST: GREATER COMMUNITY BANCORP:
__________________________ By: ________________________________
Secretary
--------------------------------
(Title)
WITNESS: EXECUTIVE:
_______________________________ ______________________________________
_______________________________________
CONDITIONS, ASSUMPTIONS,
AND
SCHEDULE OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
1. Interest Factor - for purposes of:
a. the Accrued Benefit Account - shall be seven percent (7%) per annum,
compounded monthly.
b. the Retirement Income Trust Fund - for purposes of annuitizing the
balance of the Retirement Income Trust Fund over the Payout Period,
the trustee of the Xxxxxx X. Xxxxx Grantor Trust shall exercise
discretion in selecting the appropriate rate given the nature of the
investments contained in the Retirement Income Trust Fund and the
expected return associated with the investments. For these purposes,
if the trustee of the Retirement Income Trust Fund has purchased a
life insurance policy, the trustee shall have the discretion to
determine the portion of the cash value of such policy available for
purposes of annuitizing the Retirement Income Trust Fund, in
accordance with Section 2.3 of the Agreement.
2. The amount of the annual Contributions (or Phantom Contributions) to the
Retirement Income Trust Fund (or Accrued Benefit Account) has been based
on the annual incremental accounting accruals which would be required of
the Bank through the earlier of the Executive's death or Normal Retirement
Age, (i) pursuant to APB Opinion No. 12, as amended by FAS 106 and (ii)
assuming a discount rate equal to seven percent (7%) per annum, in order
to provide the unfunded, non-qualified Supplemental Retirement Income
Benefit.
3. Supplemental Retirement Income Benefit means an actuarially determined
annual amount equal to Ninety-Eight Thousand Nine Hundred Thirteen Dollars
($98,913) at age 65 if paid entirely from the Accrued Benefit Account or
Fifty-Nine Thousand Three Hundred and Forty-Eight Dollars ($59,348) at age
65 if paid from the Retirement Income Trust Fund.
The Supplemental Retirement Income Benefit:
the definition of Supplemental Retirement Income Benefit has been
incorporated into the Agreement for the sole purpose of actuarially
establishing the amount of annual Contributions (or Phantom
Contributions) to the Retirement Income Trust Fund (or Accrued
Benefit Account) and is intended to be an amount equal to (a)
seventy percent (70%) of the highest average salary received by the
Executive during any three (3) consecutive calendar years less (b)
the actual annual amount available to the Executive, on or after his
Benefit Age, from Bank funding of the Bank's tax-qualified
retirement plans. The amount of any actual retirement,
pre-retirement or disability benefit payable pursuant to the
Agreement will be a function of (i) the amount and timing of
Contributions (or Phantom
Contributions) to the Retirement Income Trust Fund (or Accrued
Benefit Account) and (ii) the actual investment experience of such
Contributions (or the monthly compounding rate of Phantom
Contributions).
Exhibit A
4. Schedule of Annual Gross Contributions/Phantom Contributions
Plan Year Amount
--------- ------
1999 $ 47,572
2000 54,451
2001 62,074
2002 70,516
2003 79,854
2004 90,173
2005 101,567
2006 114,137
2007 127,993
2008 143,256
2009 78,190
Exhibit A - Cont'd.
EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
BENEFICIARY DESIGNATION
The Executive, under the terms of the Executive Supplemental Retirement
Income Agreement executed by the Bank, dated the 1st day of January, 1999,
hereby designates the following Beneficiary(ies) to receive any guaranteed
payments or death benefits under such Agreement, following his death:
PRIMARY BENEFICIARY:
SECONDARY BENEFICIARY:
This Beneficiary Designation hereby revokes any prior Beneficiary
Designation which may have been in effect.
Such Beneficiary Designation is revocable.
DATE: ______________________, 19____
_________________________________ _________________________________
(WITNESS) EXECUTIVE
_________________________________
(WITNESS)
Exhibit B
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
NOTICE OF ELECTION TO CHANGE FORM OF PAYMENT
TO: Bank
Attention:
I hereby give notice of my election to change the form of payment of my
Supplemental Retirement Income Benefit, as specified below. I understand that
such notice, in order to be effective, must be submitted in accordance with the
time requirements described in my Executive Supplemental Retirement Income
Agreement.
I hereby elect to change the form of payment of my benefits from
monthly installments throughout my Payout Period to a lump sum
benefit payment.
I hereby elect to change the form of payment of my benefits from a
lump sum benefit payment to monthly installments throughout my
Payout Period. Such election hereby revokes my previous notice of
election to receive a lump sum form of benefit payments.
_________________________________
_________________________________
Acknowledged
By:
Title:_________________________________
_________________________________
Exhibit C
