SHAREHOLDER BENEFIT PROGRAM
AGREEMENT FOR XXXXXXX XXXX
FIRST FEDERAL SAVINGS BANK
January 14, 2000
Financial Institution Consulting Corporation
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
WATS: 1-800-873-0089
FAX: (000) 000-0000
(000) 000-0000
SHAREHOLDER BENEFIT PLAN
AGREEMENT FOR XXXXXXX XXXX
This Shareholder Benefit Plan Agreement (the "Agreement"), effective as
of the 14th day of January, 2000, formalizes the understanding by and between
FIRST FEDERAL SAVINGS BANK (the "Bank"), a federally chartered stock savings
bank having its principal place of business in Indiana, and XXXXXXX X. XXXX
(hereinafter referred to as "Executive"). Any reference herein to the "Holding
Company" shall mean Northeast Indiana Bancorp, Inc.
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, Executive desires to relinquish shares of stock granted to him
pursuant to the Northeast Indiana Bancorp, Inc. Recognition and Retention Plan
(hereinafter RRP) a copy of which is attached hereto as Exhibit A and
incorporated herein by reference; and
WHEREAS, the parties agree that in consideration for Executive giving
up all right and incidents of ownership in said shares the Executive is 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 Shareholder Benefit Plan Agreement
which controls all issues relating to benefits as described herein and is
executed as a replacement for the Preliminary Agreement for Relinquishment of
Stock dated January 14, 2000;
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 shall have the meanings below
unless the context clearly indicates otherwise:
1.1 "Accrued Benefit" means that portion of the Supplemental Retirement
Income Benefit which is required to be expensed and/or accrued under
generally accepted accounting principles by the following methodology:
the difference between the Bank's income derived from annual increases
in the cash surrender value of a no-load, no-surrender charge
Transamerica Assurance Company life insurance policy with a one-time
premium of $800,000 insuring the life of Executive and the after-tax
Cost of Funds Expense, provided, however that in the years Executive
relinquishes shares granted him pursuant to the RRP, the Bank shall
accrue the savings realized by virtue of such relinquishment.
If such contract for life insurance is not purchased or is subsequently
surrendered or lapsed, then the Bank shall receive an annual policy
illustration that assumes the above-described policy was purchased, or
had not subsequently surrendered or lapsed, which illustration will be
received from the insurance company and will indicate the increase in
policy value for purposes of calculating the Accrued Benefit.
2
In either case, references to life insurance contracts are merely for
purposes of calculating a benefit. The Bank has no obligation to
purchase such life insurance and, if purchased, the Executive and his
beneficiar(ies) shall have no ownership interest in such policy and
shall always have no greater interest in the benefits under this Plan
than that of an unsecured creditor of the Bank.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.3 "Bank" means FIRST FEDERAL SAVINGS BANK and any successor thereto.
1.4 "Beneficiary" means the person or persons designated as beneficiary in
writing to the Bank to whom the share of a deceased Executive's account
is 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 beneficiary. If there are no living Children, then the Estate of
the Executive will be deemed the beneficiary.
1.5 "Cause" means personal dishonesty, willful misconduct, willful
malfeasance, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations, including
driving while intoxicated, or similar offenses), final cease-and-desist
order, material breach of any provision of this Agreement, or gross
negligence in matters of material importance to the Bank.
1.6 "Change in Control" shall mean and include the following with respect
to the Bank or the Holding Company:
3
(1) a Change in Control of a nature that would be required to be
reported in response to Item I (a) of the current report on
Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx"); or
(2) a change in control of the Bank within the meaning of 12
C.F.R. 574.4; or
(3) a Change in Control at such time as
(i) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of
securities of the Bank representing Twenty Five
Percent (25.0%) or more of the combined voting power
of the Bank's outstanding securities ordinarily
having the right to vote at the election of
directors, except for any stock purchased by the
Bank's Employee Stock Ownership Plan and/or trust; or
(ii) individuals who constitute the board of directors on
the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof,
provided that any person becoming a director
subsequent to the date hereof whose election was
approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose
nomination for election by the Bank's stockholders
was approved by the Bank's nominating committee which
is comprised of members of the Incumbent Board, shall
be, for purposes of this clause (ii), considered as
though he were a member of the Incumbent Board; or
(iii) merger, consolidation, or sale of all or
substantially all of the assets of the Bank occurs;
or
(iv) a proxy statement is issued soliciting proxies from
the stockholders of the Bank by someone other than
the current management of the Bank, seeking
stockholder approval of a plan of reorganization,
merger, or consolidation of the Bank with one or more
corporations as a result of which the outstanding
shares of the class of the Bank's securities are
exchanged for or converted into cash or property or
securities not issued by the Bank.
4
The term "person" includes an individual, a group acting in
concert, a corporation, a partnership, an association, a joint
venture, a pool, a joint stock company, a trust, an
unincorporated organization or similar company, a syndicate or
any other group formed for the purpose of acquiring, holding or
disposing of securities. The term "acquire" means obtaining
ownership, control, power to vote or sole power of disposition of
stock, directly or indirectly or through one or more transactions
or subsidiaries, through purchase, assignment, transfer,
exchange, succession or other means, including (1) an increase in
percentage ownership resulting from a redemption, repurchase,
reverse stock split or a similar transaction involving other
securities of the same class; and (2) the acquisition of stock by
a group of persons and/or companies acting in concert which shall
be deemed to occur upon the formation of such group, provided
that an investment advisor shall not be deemed to acquire the
voting stock of its advisee if the advisor (a) votes the stock
only upon instruction from the beneficial owner and (b) does not
provide the beneficial owner with advice concerning the voting of
such stock. The term "security" includes nontransferable
subscription rights issued pursuant to a plan of conversion, as
well as a "security," as defined in 15 U.S.C. ss. 78c(2)(1`); and
the term "acting in concert" means (1) knowing participation in a
joint activity or interdependent conscious parallel action
towards a common goal whether or not pursuant to an express
agreement, or (2) a combination or pooling of voting or other
interests in the securities of an issuer for a common purpose
pursuant to any contract, understanding, relationship, agreement
or other arrangement, whether written or otherwise. Further,
acting in concert with any person or company shall also be deemed
to be acting in concert with any person or company that is acting
in concert with such other person or company.
Notwithstanding the above definitions, the Board, in its absolute
discretion, may make a finding that a Change in Control of the
Bank has taken place without the occurrence of any or all of the
events enumerated above.
5
1.7 "Children" means the Executive's children, both natural and adopted and
any issue of any predeceased Children, then living at the time payments
are due the Children under this Agreement.
1.8 "Code" means the Internal Revenue Code of 1986 as amended from time to
time.
1.9 "Cost of Funds Expense" means the last available quarterly rate of the
0xx Xxxxxxxx Cost of Funds from the Federal Home Loan Bank in
Indianapolis plus fifty (50) basis points.
1.10 "Effective Date" shall be the date of January 14, 2000.
1.11 "Estate" means the estate of the Executive.
1.12 "Interest Factor" means Seven Per Cent (7%) per annum.
1.13 "Normal Retirement Date" means the first day of the month coincident
with or next following the Executive's sixty-fifth (65th) birthday.
1.14 "Payout Period" means the time frame during which certain benefits
payable hereunder shall be distributed. Payments shall be made in equal
monthly installments commencing within thirty (30) days following the
occurrence of the event which triggers distribution and continuing for
One Hundred Eighty (180) consecutive months. For purposes of the
Survivor's Benefit payable hereunder, the Payout Period shall be One
Hundred Eighty (180) consecutive months.
1.15 "Permanently and Totally Disabled" means Executive has, for at least
six (6) months, been unable to perform the services incident to his
position with the Bank as a result of accidental bodily injury or
sickness and that the status is likely to continue for an indefinite
period, as reasonably determined subsequent to the expiration of the
six (6) month period by a duly licensed physician selected in good
faith by the Bank.
6
1.16 "Spouse" means the individual to whom the Executive is legally married
at the time of the Executive's death.
1.17 "Suicide" means the act of intentionally killing oneself.
1.18 "Supplemental Retirement Income Benefit" means an annual amount,
payable over the Payout Period, equal to the benefit stream supported
by the annuitized value of the Accrued Benefit using the Interest
Factor.
1.19 "Survivor's Benefit" means the benefit provided to Executive's
Beneficiary under Subsection 2.1 payable over the Payout Period. The
Survivor's Benefit shall be $3292 per month in the event that Executive
relinquishes only the shares in which he would have vested for the year
2000. Alternatively, the Survivor's Benefit shall be $3892 per month in
the event that Executive relinquishes all shares in which he would vest
for the years 2000 and 2001.
SECTION II
PRE RETIREMENT AND POST RETIREMENT DEATH BENEFITS
-------------------------------------------------
2.1 Death Prior to Termination of Employment or After Change in Control. If
Executive dies prior to termination of employment with the Bank or
after termination of employment with the Bank coincident with or
following a Change in Control (but before commencement of payment of
the Supplemental Retirement Income Benefit to Executive), his
Beneficiary shall be entitled to the Survivor's Benefit. The first
installment shall begin within thirty (30) days after the date of death
of Executive (or within thirty (30) days after the date the Bank is
notified of Executive's death) and each succeeding installment shall be
paid on the next succeeding month thereof during the Payout Period.
7
2.2 Death Subsequent to Retirement. In the event of death of Executive
while receiving monthly benefits under this Agreement or after
retirement on or after the Executive's Normal Retirement Date but
before commencement of payment of the Supplemental Retirement Income
Benefit to Executive, except under Section 3.3 hereof, then the unpaid
balance of such monthly payments remaining to be paid at that time
shall continue to be paid monthly for the remainder of the Payout
Period to Executive's Beneficiary.
2.3 Death by Reason of Suicide. In the event Executive dies by reason of
suicide at any time within twenty-six (26) months after execution of
this Agreement, the Bank shall be under no obligation to provide any
benefits to the Executive's Beneficiary.
2.4 Death After Voluntary Termination of Employment Prior to Normal
Retirement Age. In the event of Executive's death following a voluntary
termination of employment with the Bank prior to his Normal Retirement
Date, for any reason other than Cause, the Executive's Beneficiary
shall be entitled to his Accrued Benefit determined as of the date of
termination of employment and annuitized using the Interest Factor.
SECTION III
SUPPLEMENTAL RETIREMENT INCOME BENEFIT
--------------------------------------
AND DISABILITY BENEFIT
----------------------
3.1 Normal Retirement Benefit. At Executive's retirement on or after the
Normal Retirement Date, the Bank shall commence payments of the
Supplemental Retirement Income Benefit to Executive. Such payments
shall commence the first day of the month next following the
Executive's retirement date and shall be payable in monthly
installments throughout the Payout Period.
8
3.2 Disability. If Executive becomes Permanently and Totally Disabled prior
to reaching his retirement, while covered by the provisions of this
Agreement, Executive shall be entitled to his Accrued Benefit at the
time of disability, annuitized using the Interest Factor and payable
over the Payout Period. Payments shall begin within thirty (30) days
after Executive becomes Permanently and Totally Disabled. In the event
the Executive dies at any time after termination of employment due to
disability but prior to commencement or completion of all payments due
and owing hereunder, the Bank shall pay to the Executive's Beneficiary
the Survivor's Benefit for the remainder of the Payout Period plus a
lump sum payment equal to the present value of the difference between
the Survivor's Benefit and the Accrued Benefit payments already paid to
the Executive. Such additional lump sum payment shall be made within
thirty (30) days after the Executive's death or within thirty (30) days
after the date the Bank is notified of Executive's death.
3.3 Involuntary Termination of Employment. In the event of Executive's
involuntary termination of employment, including involuntary
termination coincident with or within three (3) years following a
Change in Control, but excluding termination due to death, disability
or termination for Cause, the Executive shall be entitled to receive
the Supplemental Retirement Income Benefit calculated as if the
Executive had continued to be employed by the Bank until his Normal
Retirement Date. The Bank, or its successor, shall commence payment of
the Supplemental Retirement Income Benefit within thirty (30) days
after the Executive's Normal Retirement Date, as defined herein. For
these purposes, Executive's voluntary termination of employment within
three (3) years following a Change in Control shall be deemed to be an
involuntary termination of employment.
3.4 Voluntary Termination of Employment. In the event of Executive's
voluntary termination of employment with the Bank prior to his Normal
Retirement Date, for any reason other than Cause, the Executive (or his
Beneficiary, if applicable) shall be entitled to his Accrued Benefit
determined as of the date of termination of employment and annuitized
using the Interest Factor. The benefit payable hereunder shall be in
accordance with Section 7.1 below.
9
SECTION IV
EXECUTIVE'S RIGHT TO ASSETS
---------------------------
The rights of the Executive, any Beneficiary of the Executive, 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 of the Executive, or any other person claiming through the
Executive, shall only have the right to receive from the Bank those payments as
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, except as expressly provided,
shall not be deemed to be held under any trust for the benefit of the Executive
or his Beneficiaries, nor shall it be considered security for the performance of
the obligations of the Bank. It shall be, and remain, a general, unpledged, and
unrestricted asset of the Bank.
SECTION V
RESTRICTIONS UPON FUNDING
-------------------------
Bank shall have no obligation to set aside, earmark or entrust any fund
or money with which to pay its obligations under this Agreement. The Executive,
his Beneficiaries or any successor in interest to him shall be and remain simply
a general 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, at its sole discretion, to either fund the obligations
undertaken by this Agreement or to refrain from funding the same and to
determine the extent, nature, and method of such informal funding. Should the
Bank elect to fund this Agreement, in whole or in part, through the purchase of
life insurance, mutual funds, disability policies or annuities, the Bank
reserves the absolute right, in its sole discretion, to terminate such funding
at any time, in whole or in part. At no time shall Executive be deemed to have
any lien nor right, title or interest in or to any specific funding
10
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
Executive shall assist the Bank by freely submitting to a physical examination
and supplying such additional information necessary to obtain such insurance or
annuities.
SECTION VI
ALIENABILITY AND ASSIGNMENT PROHIBITION
---------------------------------------
Neither Executive nor any Beneficiary under this Agreement shall have
any power or right to transfer, assign, anticipate, hypothecate, mortgage,
commute, modify or otherwise encumber in advance any of the benefits payable
hereunder, nor shall any of said benefits be subject to seizure for the payment
of any debts, judgments, alimony or separate maintenance owed by the Executive
or his Beneficiary, nor be transferrable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event Executive or any Beneficiary
attempts assignment, communication, hypothecation, transfer or disposal of the
benefits hereunder, the Bank's liabilities shall forthwith cease and terminate.
SECTION VII
TERMINATION OF EMPLOYMENT
-------------------------
7.1 Termination of Service Prior to Retirement Date. If, prior to
Executive's Normal Retirement Date, Executive voluntarily terminates
employment with the Bank, the Bank shall pay to the Executive the
benefit set forth in Subsection 3.4. Such payments shall commence
within thirty (30) days of his termination of employment and shall
continue throughout the Payout Period. Notwithstanding the above, if
Executive is involuntary terminated without Cause or following a Change
in Control as contemplated in Subsection 3.3, Executive shall be
entitled to the benefit set forth therein, commencing within thirty
(30) days of Executive's Normal Retirement Date.
11
7.2 Termination of Service for Cause. Should Executive be terminated for
Cause, his benefits under this Agreement shall be forfeited and this
Agreement shall become null and void.
SECTION VIII
ACT PROVISIONS
--------------
8.1 Named Fiduciary And Administrator. The Bank shall be the Named
Fiduciary and Administrator of this Agreement. As Administrator, the
Bank shall be responsible for the management, control and
administration of the Agreement as established herein. The
Administrator may delegate to others certain aspects of the management
and operational responsibilities of the Agreement, including the
employment of advisors and the delegation of ministerial duties to
qualified individuals.
8.2 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 named above within sixty (60) days from the date
payments are refused. The Administrator and its Board of Directors
shall review the written claim and, if the claim is denied, in whole or
in part, they shall provide in writing within ninety (90) days of
receipt of such claim their specific reasons for such denial, reference
to the provisions of this Agreement upon which the denial is based and
any additional material or information necessary to perfect the claim.
Such written notice shall further indicate the additional steps to be
taken by claimants if a further 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 the Agreement or any documents relating
thereto and submit any issues, in writing, and comments 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
12
likewise state the specific reasons for the decision and shall include
reference to specific provisions of the Agreement upon which the
decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of the 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 Bank ("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.
Where a dispute arises as to the Bank's discharge of Executive for
Cause, such dispute shall likewise be submitted to arbitration as above
described and the parties hereto agree to be bound by the decision
thereunder.
SECTION IX
MISCELLANEOUS
-------------
9.1 No Effect on Employment Rights. Nothing contained herein shall 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 this Agreement. The
provisions of 12 CFR Part 563.39 (including all of its subparts) shall
be fully applicable to this Agreement.
9.2 Disclosure. Each Executive shall receive a copy of his Agreement and
the Administrator will make available, upon request, a copy of the
rules and regulations that govern this type of Agreement.
13
9.3 State Law. The Agreement is established under, and will be construed
according to, the laws of the State of Indiana, to the extent that such
laws are not preempted by the Act and valid regulations published
thereunder.
9.4 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.
9.5 Incapacity of Recipient. In the event Executive is declared incompetent
and a conservator or other person legally charged with the care of his
person or of his 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 his
Estate. Except as provided above in this paragraph, when the Bank's
Board of Directors in its sole discretion, determines that an Executive
is unable to manage his financial affairs, the Board may direct the
Bank to make distributions to any person for the benefit of such
Executive.
9.6 Unclaimed Benefit. Each 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 an Executive is not made known to the Bank within three
years after the date on which any payment of the Executive's
Supplemental Retirement Income Benefit may be made, payment may be made
as though the Executive had died at the end of the three-year period.
If, within one additional year after such three- year period has
elapsed, or, within three years after the actual death of the
Executive, the Bank is unable to locate any Beneficiary of the
Executive, then the Bank may fully discharge its obligation by payment
to the Estate.
14
9.7 Limitations on Liability. Notwithstanding any of the preceding
provisions of the Agreement, neither the Bank, nor any individual
acting as an employee or agent of the Bank or as a member of the Board
of Directors shall be liable to any Executive, former Executive, or any
other person for any claim, loss, liability or expense incurred in
connection with the Agreement.
9.8 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.
9.9 Affect 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.
9.10 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.
9.11 Rabbi Trust. The Bank intends to incorporate this Agreement into the
First Federal Savings Bank Rabbi Trust for the Executive Supplemental
Retirement Income Plan, dated October 1, 1996, into which the Bank
intends to 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 the agreement which establishes such rabbi
trust, until the contributed assets are paid to the Executives and
their Beneficiaries in such manner and at such times as specified in
this Agreement. It is the intention of the Bank to make contributions
to the rabbi trust to provide the Bank with a source of funds to assist
it in meeting the liabilities of this Agreement. The rabbi trust and
any assets held therein shall conform to the terms of the rabbi trust
agreement which has been established in conjunction with this
Agreement. To the extent the language in this Agreement is modified by
the language in the rabbi trust agreement, the rabbi trust
15
agreement shall supersede this Agreement. Any contributions to the
rabbi trust shall be made during each Plan Year in accordance with the
rabbi trust agreement. The amount of such contribution(s) shall be
equal to the full present value of all benefit accruals under this
Plan, if any, less: (i) previous contributions made on behalf of the
Executive to the rabbi trust, and (ii) earnings to date on all such
previous contributions.
9.12 Secular Trust. The Executive intends to incorporate this Agreement into
the Xxxxxxx X. Xxxx Grantor Trust Agreement dated October 1, 1996 (the
"Xxxx Trust"), into which the Bank shall make contributions only in the
event of a Change in Control. In the event of a Change in Control, the
Bank shall make an immediate lump sum contribution to the Xxxx Trust
(in the year preceding the Change in Control, if possible). Such
contribution shall be the full present value, using an appropriate
discount rate, of the projected Supplemental Retirement Income Benefit,
calculated as if the Executive had continued to be employed by the Bank
until his Normal Retirement Date; provided, however, in no event shall
the contribution be less than an amount 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 Change in Control)
beginning at his Normal Retirement 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.
9.13 Tax Withholding. The Bank may withhold from any benefit payable under
this Agreement all federal, state, city, or other taxes as shall be
required pursuant to any law or governmental regulation then in effect.
16
SECTION X
NON-COMPETITION AFTER NORMAL RETIREMENT
---------------------------------------
10.1 Non-Compete Clause. Except as stated in the second paragraph of this
subsection, the Executive expressly agrees that, as consideration for
the agreements of the Bank contained herein and as a condition to the
performance by the Bank of its obligations hereunder, throughout the
entire period beginning at the time of termination of employment until
the final payment is made to Executive, as provided herein, he will
not, without the prior written consent of the Bank, engage in, become
interested, directly or indirectly, as a sole proprietor, as a partner
in a partnership, or as a substantial shareholder in a corporation, nor
become associated with, in the capacity of an employee, director,
officer, principal, agent, trustee or in any other capacity whatsoever,
any enterprise conducted in the trading area of the business of the
Bank which enterprise is, or may deemed to be, competitive with any
business carried on by the Bank as of the date of the termination of
the Executive's employment or his retirement. The parties agree that
if, for any reason, any covenant contained herein is held by a court or
other tribunal to be unenforceable or invalid, that such court or
tribunal will have the authority to limit such covenant to that which
the court or tribunal deems proper under the circumstances and to
enforce such covenant as limited. Notwithstanding the foregoing,
Executive agrees to honor the terms of this Non-Compete Clause and not
to contest its enforceability.
In the event Executive's termination follows a Change in Control or
other material change in the Bank's structure or business activities,
Executive shall be entitled to his Supplemental Retirement Income
Benefit whether or not he enters into an arrangement that is deemed to
be competitive with the Bank.
17
10.2 Breach. In the event of any breach by the Executive of the agreements
and covenants contained herein, the Board of Directors of the Bank
shall direct that any unpaid balance of any payments to the Executive
under this Agreement be suspended, and shall thereupon notify the
Executive of such suspensions, in writing. Thereupon, if the Board of
Directors of the Bank shall determine that said breach by the Executive
has continued for a period of one (1) month following notification of
such suspension, all rights of the Executive and his Beneficiaries
under this Agreement, including rights to further payments hereunder,
shall thereupon terminate.
SECTION XI
AMENDMENT/REVOCATION
--------------------
This Agreement shall not be amended, modified, or revoked at any time,
in whole or part, without the mutual written consent of the Executive and the
Bank, and such mutual consent shall be required even if the Executive is no
longer employed by the Bank.
ARTICLE XII
EXECUTION
---------
12.1 This Agreement sets 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.
12.2 This Agreement shall be executed in triplicate, each copy of which,
when so executed and delivered, shall be an original, but all three
copies shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the Bank and the Executive have caused this
Agreement to be executed on the day and date first above written.
ATTEST: FIRST FEDERAL SAVINGS BANK:
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------ ----------------------------
Sr. Vice President, CFO
----------------------------
(Title)
WITNESS: EXECUTIVE:
By: /s/ Rise X. Xxxxxxx /s/ Xxxxxxx X. Xxxx
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19
Exhibit B
SHAREHOLDER BENEFIT PLAN AGREEMENT
BENEFICIARY DESIGNATION
The Executive, under the terms of the Shareholder Benefit Plan
Agreement executed by the Bank, dated the 14th day of January, 2000, hereby
designates the following Beneficiary(ies) to receive any guaranteed payments or
death benefits under such Agreement, following his death:
PRIMARY BENEFICIARY: Xxxxx X. Xxxx
SECONDARY BENEFICIARY: Estate of Xxxxxxx X. Xxxx
This Beneficiary Designation hereby revokes any prior Beneficiary
Designation which may have been in effect.
Such Beneficiary Designation is revocable.
DATE: January 14, 2000
/s/Rise X. Xxxxxxx /s/Xxxxxxx X. Xxxx
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Rise X. Xxxxxxx Xxxxxxx X. Xxxx
(WITNESS) EXECUTIVE
/s/Lil Xxxxxxxx
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Lil Xxxxxxxx
(WITNESS)
20
