Exhibit 10.5
CSB FINANCIAL GROUP, INC.
MANAGEMENT DEVELOPMENT AND RECOGNITION
PLAN AND TRUST AGREEMENT, AS AMENDED
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01. CSB Financial Group, Inc. (the "Company") hereby establishes the
Management Development and Recognition Plan (the "Plan") and Trust (the "Trust")
upon the terms and conditions hereinafter stated in this Management Development
and Recognition Plan and Trust Agreement (the "Agreement").
1.02. The Trustees hereby accept this Trust and agree to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01. The purpose of the Plan is to retain personnel of experience and
ability in key positions by providing such key employees with a proprietary
interest in the Company as compensation for their contributions to the Company
and its Subsidiaries and as an incentive to make such contributions in the
future.
ARTICLE III
DEFINITIONS
The following words and phrases, when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meanings set forth below. Whenever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
3.01. "Bank" means Centralia Savings Bank, an Illinois state-chartered
savings bank, and its successors and assigns. The Bank, with the consent of the
Board, has agreed to participate in this Plan.
3.02. "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under the Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, the Recipient's estate.
3.03. "Board" means the Board of Directors of the Company.
3.04. "Committee" means the Committee appointed by the Board pursuant
to Article IV hereof.
3.05. "Common Stock" means shares of the common stock, $.01 par value
per share, of the Company.
3.06. "Company" means CSB Financial Group, Inc., a Bank Holding Company
registered under Section 3(a)(1) of the Bank Holding Company Act of 1956, as
amended, that owns 100% of the Capital Stock of Centralia Savings Bank.
3.07. "Director" means a member of the Board of Directors of the
Company or the Bank.
3.08. "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of a Recipient to perform the work
customarily assigned to him. A medical doctor selected or approved by the Board
must advise the Committee that it is either not possible to determine when such
Disability will terminate or that it appears probable that such Disability will
be permanent during the remainder of the Recipient's lifetime.
3.09. "Effective Date" means the date shareholders of the Company
approve the Plan.
3.10. "Employee" means any person who is currently employed by the
Company, the Bank or a Subsidiary, including officers.
3.11. "Plan Shares" means shares of Common Stock held in the Trust and
issued or issuable to a Recipient pursuant to the Plan.
3.12. "Plan Share Award" means a right granted under this Plan to earn
Plan Shares.
3.13. "Recipient" means an Employee or Non-Employee Director who
receives a Plan Share Award under the Plan.
3.14. "Retirement" means retirement at the normal or early retirement
date as set forth in the Centralia Savings Bank Employee Stock Ownership Plan.
3.15. "Subsidiary" means any other entity of which the Company is the
direct or indirect beneficial owner of not less than fifty percent (50%) of all
issued and outstanding equity interests. A Subsidiary may, with the consent of
the Board, agree to participate in this Plan.
3.16. "Trustee" means those persons (normally members of the Committee)
nominated by the Committee and approved by the Board pursuant to Sections 4.01
and 4.02 to hold legal title to the Plan assets for the purposes set forth
herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01. Role of the Committee. The Plan shall be administered and
interpreted by the Committee, which shall be appointed by the Board. The
Committee shall be comprised of two (2) or more members of the Board who are
"non-employee directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934. The Committee shall have all of the powers allocated to it
in this and other Sections of the Plan. The Committee shall have the power to
interpret and construe the terms and provisions of the Plan or of any Plan Share
Award granted hereunder, and all such interpretations and constructions by the
Committee shall be final and binding. The Committee, in its sole discretion,
shall determine the Employees and Directors of the Company and its Subsidiaries
to whom, and the time or times at which Plan Share Awards will be granted, the
number of Plan Share Awards, the expiration date of each Plan Share Award, the
cancellation of the Plan Share Award (with the consent of the holder thereof)
and the other terms and conditions of the grant of the Plan Share Award. The
terms and conditions of the Plan Share Awards need not be the same with respect
to each Recipient or with respect to each Plan Share Award.
The Committee shall act by vote or written consent of a
majority of its members. Subject to the express provisions and limitations of
the Plan, the Committee may adopt such rules, regulations and procedures as it
deems appropriate for the conduct of its affairs. The Committee shall report its
actions and decisions with respect to the Plan to the Board at appropriate
times, but in no event less than one time per calendar year. The Committee shall
appoint one or more individuals (normally from among its members) to act as
Trustees in accordance with the provisions of this Plan and Trust and the terms
of Article VIII hereof.
4.02. Role of the Board. The members of the Committee and the Trustee
or the Trustees shall be appointed or approved by the Board. The Board may, in
its discretion, from time to time, remove members from or add members to the
Committee and may remove, replace or add Trustees. The Board may not revoke any
Plan Share Award already made without the consent of the Recipient.
4.03. Limitation on Liability. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Plan Shares or Plan Share Awards it grants. If a member of the Board
or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Company and
its Subsidiaries shall indemnify such member against expense (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such member in connection with such action, suit or
proceeding if the member acted in good faith and in the manner he reasonably
believed to be in the best interests of the Company and its Subsidiaries and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
ARTICLE V
CONTRIBUTIONS
5.01. Amount and Timing of Contributions. The Board shall determine the
amounts (or the method of computing the amounts) to be contributed by the
Company and its Subsidiaries to the Trust established under this Plan. Such
amounts shall be paid to the Trust at the time of contribution. No contributions
by Employees or Recipients shall be permitted.
5.02. Investment of Trust Assets After Conversion. The Trustee shall
invest the Trust's assets exclusively in the Company's Common Stock provided,
however, that the Trust shall not purchase more than 4% of the total shares of
Common Stock issued until after October 5, 1996. After such date, the Trustee
may purchase in the aggregate no more than 6% of the total shares of Common
Stock issued. Any earnings received with respect to Common Stock held by the
Plan shall be held in an interest bearing account. Any earnings received with
respect to Common Stock subject to a Plan Share Award shall be held in an
interest bearing account on behalf of the individual Recipient.
ARTICLE VI
ELIGIBILITY AND ALLOCATIONS
6.01. Eligibility. Officers and key management Employees of the
Company, the Bank and its Subsidiaries are eligible to receive Plan Share
Awards. Non-employee Directors also may receive Plan Share Awards pursuant to
Article X hereof and discretionary grants made by the Committee from time to
time.
6.02. Allocations. The number of Shares covered by Plan Share Awards
may not exceed the number of shares purchased by the Trustee prior to the grant
of such Awards, and provided further that in no event shall any Awards be made
which will violate the Certificate of Incorporation or Bylaws of the Company,
the Articles of Incorporation or Bylaws or Plan of Conversion of the Bank, or
any applicable federal or state law or regulation. In the event Plan Shares are
forfeited for any reason, the Committee may determine which of the Employees
will be granted additional Plan Shares to be awarded from forfeited Plan Shares.
In selecting those Employees to whom Plan Share Awards will be granted and the
number of Shares covered by such Awards, the Committee shall consider the
position and responsibilities of the eligible Employees, the value of their
services to the Company and the Bank and its Subsidiaries, and any other factors
the Committee may deem relevant, including the recommendations of the Chairman
of the Board.
6.03. Form of Allocation. As promptly as practicable after a
determination is made pursuant to Section 6.02 that a Plan Share Award is to be
issued, the Committee shall notify the Recipient in writing of the grant of the
Award, the number of Plan Shares covered by the Award and the terms upon which
the Plan Shares subject to the Award may be earned. The date on which the
Committee so notifies the Recipient shall be considered the date of grant of the
Plan Share Award. The Committee shall maintain records as to all grants of Plan
Share Awards under the Plan.
6.04. Allocations Not Required. Notwithstanding anything to the
contrary in Sections 6.01 and 6.02, no Employee or Director shall have any right
or entitlement to receive a Plan Share Award hereunder, such Awards being at the
total discretion of the Committee, nor shall the salaried Employees as a group
have such a right.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES
VOTING RIGHTS
7.01. Earning Plan Shares: Forfeitures. Unless the Committee shall
specifically state to the contrary at the time a Plan Share Award is granted,
Plan Shares subject to an Award shall be earned by a Recipient in five equal
annual installments over the first five years after the date of grant, if the
Employee remains employed with the Company or a Subsidiary continuously
throughout such period, provided, however, that the Committee may provide for a
less rapid earnings rate than that set forth herein for all Awards or for any
given Award. If the employment of a Recipient is terminated prior to the fifth
anniversary (or such later date as the Committee shall determine) of the date of
grant of an Award for any reason (except as specifically provided in subsections
(a) and (b) below), the Recipient shall forfeit the right to earn any shares
subject to the Award which have not theretofore been earned. No fractional
shares shall be issued.
(a) Exception for Terminations Due to Death or Disability.
Notwithstanding the general rule contained in this Section, Plan Shares
subject to a Plan Share Award held by a Recipient whose employment with
the Company or a Subsidiary terminates due to Death or Disability, or
any part of such Award that has not theretofore been earned, shall be
deemed earned as of the Recipient's last day of employment with the
Company or a Subsidiary.
(b) Revocation for Misconduct. Notwithstanding anything herein
to the contrary, the Board may, by resolution, immediately revoke,
rescind and terminate any Plan Share Award, or portion thereof,
previously awarded under this Plan, to the extent Plan Shares have not
been delivered thereunder to the Recipient, whether or not yet earned,
in the case of an Employee or Director who is discharged from the
Company or a Subsidiary for cause (as hereinafter defined), or who is
discovered after termination of employment to have engaged in conduct
that would have justified termination for cause. "Cause" is defined as
personal dishonesty, willful misconduct, any breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, or the willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) which results in a
material loss to the Company or its Subsidiaries, or final cease and
desist order.
7.02. Distribution of Plan Shares. Plan Shares shall be distributed to
the Recipient or his Beneficiary, as the case may be, as soon as is practicable
after a Plan Share Award is made. All Plan Shares shall be distributed in the
form of Common Stock. One share of Common Stock shall be given for each Plan
Share earned and payable.
7.03. Voting and Dividend Rights. No Recipient shall have any voting or
dividend rights or other rights of a stockholder with respect to any Plan Shares
covered by a Plan Share Award prior to the time said Plan Shares are actually
distributed to him. When cash dividends are paid with respect to Plan Shares
allocated to a Recipient, such Recipient shall be entitled to receive an amount
equal to such cash dividend. Stock dividends with respect to shares allocated to
a Recipient shall be distributed when the Plan Shares with respect to which they
are declared are so distributable.
ARTICLE VIII
TRUST
8.01. Trust. The Trustees shall receive, hold, administer, invest and
make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
the Plan.
8.02. Management of Trust. It is the intent of this Plan and Trust that
the Trustees shall have complete authority and discretion with respect to the
management, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustees determined that the holding
of monies in cash or cash equivalents is necessary to meet the obligations of
the Trust. In performing their duties, the Trustees shall have the power to do
all things and execute such instruments as may be deemed necessary or proper,
including the following powers:
(a) To invest up to 100% of all Trust assets in Common Stock
of the Company without regard to any law now or hereafter in force
limiting investments for trustees or other fiduciaries. The investment
authorized herein may constitute the only investment of the Trust and
Common Stock shall be newly issued shares, Treasury shares or shares
purchased by the Plan in the open market.
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above in such savings accounts, deposits and
certificates of deposit (including those issued by the Company or a
Subsidiary), obligations of the United States government or its
agencies or such other investments as shall be considered the
equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at
any time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be
registered in the name of a nominee, without the addition of words
indicating that such security is an asset of the Trust (but accurate
records shall be maintained showing that such security is an asset of
the Trust).
(e) To hold cash without interest in such amounts as may be,
in the opinion of the Trustees, reasonable for the proper operation of
the Plan and Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
(g) To hire counsel to render advice with respect to their
rights, duties and obligations hereunder, and such other legal services
or representations as they may deem desirable.
(h) To hold funds and securities representing the amounts to
be distributed, to a Recipient or his Beneficiary as a consequence of a
dispute as to the disposition thereof, whether in a segregated account
or held in common with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustees
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of court for the exercise of any power
herein contained, or give bond.
8.03. Records and Accounts. The Trustees shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.04. Earnings. All earnings, gains and losses with respect to Trust
assets shall be allocated, in accordance with a reasonable procedure adopted by
the Committee, to bookkeeping accounts for Recipients or to the general account
of the Trust, depending on the nature and allocation of the assets generating
such earnings, gains and losses. In particular, any earnings on cash dividends
received with respect to shares of Common Stock shall be allocated to accounts
for Recipients, if such shares are the subject of outstanding Plan Share Awards,
or, otherwise to a reserve established by the Plan.
8.05. Expenses. All costs and expenses incurred in the operation and
administration of this Plan shall be borne by the Company and its Subsidiaries.
8.06. Indemnification. The Company and its Subsidiaries shall
indemnify, defend and hold the Trustees harmless against all claims, expenses
and liabilities arising out of or related to the exercise of the Trustees'
powers and the discharge of their duties hereunder, unless the same shall be due
to their gross negligence or willful misconduct.
ARTICLE IX
MISCELLANEOUS
9.01. Amendment and Termination of Plan. The Board may, by resolution,
at any time, amend or terminate the Plan. The power to amend or terminate shall
include the power to direct the Trustees to return to the Company or the Bank
all or any part of the assets of the Trust, as well as shares of Common Stock
and other assets subject to Plan Share Awards but not yet earned by the
Employees to whom they are allocated.
9.02. Nontransferable. Plan Share Awards and rights to Plan Shares
shall not be transferable by a Recipient and, during the lifetime of the
Recipient, Plan Shares may only be earned by and paid to the Recipient who was
notified in writing of the Award by the Committee pursuant to Section 6.03. No
Recipient or Beneficiary shall have any right in or claim to any assets of the
Plan or Trust, nor shall the Company or any Subsidiary be subject to any claim
for benefits hereunder.
9.03. Employment Rights. Neither the Plan nor any grant of a Plan Share
Award or Plan Shares hereunder nor any action taken by the Trustees, the
Committee or the Board in connection with the Plan shall create any right on the
part of any Employee to continue in the employ of the Company, the Bank or a
Subsidiary.
9.04. Governing Law. The Plan and Trust shall be governed by the laws
of the State of Illinois.
9.05. Term of Plan. This Plan shall remain in effect until the earlier
of: (1) termination by the Board of Directors; (2) the distribution to
Recipients, Beneficiaries, the Company or the Bank of all assets of the Trust;
or (3) 21 years from the Effective Date. Termination of the Plan shall not,
unless expressly specified, affect any Plan Share Awards previously granted, and
such Awards shall remain valid and in effect until they have been paid, or by
their terms expire or are forfeited.
ARTICLE X
OUTSIDE DIRECTOR AWARDS
Each non-Employee Director on the Effective Date shall be granted a
Plan Share Award equal to 2,070 shares, subject to availability, to vest in five
equal annual installments beginning with the first anniversary of the Effective
Date.
