FORM OF
RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
THE RARITAN SAVINGS BANK
Raritan, New Jersey
June 1, 1997
Financial Institution Consulting Corporation
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
WATS: 1-800-873-0089
FAX: (000) 000-0000
(000) 000-0000
RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT FOR _________________
This Restated Executive Supplemental Retirement Income Agreement (the
"Agreement"), effective as of the 1st day of June, 1997, formalizes the
understanding by and between THE RARITAN SAVINGS BANK (the "Bank"), a stock
savings bank, and _________________ (hereinafter referred to as "Executive").
Raritan Bancorp Inc. (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 Restated 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 THE RARITAN SAVINGS 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. In addition, the Board of Directors may, in its sole
discretion, amend clause (i) of this Subsection to lower the Executive's
Benefit Age in any instance in which the Executive's employment
terminates prior to Retirement Age and the Board of Directors determines
that such an amendment is advisable, based on the circumstances of such
termination, or amend clause (ii) of this Subsection, upon the
Executive's request, to permit the Executive to commence receiving his
Supplemental Retirement Income Benefit upon the attainment
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of age sixty-five (65) despite the fact that the Executive's full-time
service with the Bank has not terminated. Notwithstanding the above, the
Executive may, in his sole discretion, elect to retire on or after the
Executive's sixty-second (62nd) birthday and, in such event, the
Executive's age on such date shall constitute his "Benefit Age"; provide,
however, that in the event of a Change in Control, followed within
thirty-six (36) months by the Executive's voluntary termination of
employment on or after his sixty-second birthday for one of the reasons
set forth in Section 2.(b)(2)(ii) below, the Executive's termination
shall not be considered a retirement for purposes of lowering the
Executive's Benefit Age.
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" means personal dishonesty, willful misconduct, willful
malfeasance, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
law, rule, regulation (other than traffic violations or similar
offenses), or final cease-and-desist order, material breach of any
provision of this Agreement, or gross negligence in matters of material
importance to the Bank.
1.10 "Change in Control" shall mean and include the following with respect to
(i) the Bank or (ii) the Holding Company, or any successor thereto:
(1) a change in control of a nature that would be required to be
reported in response to Item 1(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 1934 (hereinafter the
"Exchange Act"); or
(2) an acquisition of "control" as defined in the Home Owners Loan Act
and applicable regulations thereunder, as determined by the Board
of Directors of the Bank or the Holding Company; or
(3) at such time as:
(i) any "person" (as the term is used in Sections 13(d) and
14(d) of the Exchange Act) or "group acting in concert" is
or becomes the "beneficial owner" (as defined in
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Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Bank representing Twenty Percent (20%)
or more of the combined voting power of the Bank's or
Holding Company's outstanding securities ordinarily having
the right to vote at the elections of directors, except for
any stock purchased by the Bank's Employee Stock Ownership
Plan and/or the trust under such plan; or
(ii) individuals who constitute the board of directors of the
Bank or Holding Company on the date hereof (hereinafter the
"Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming
a director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose
nomination for election by the Holding Company's
stockholders was approved by the Holding Company'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
the assets of the Holding Company occurs; or
(iv) a proxy statement is issued soliciting proxies from the
stockholders of the Holding Company by someone other than
the current management of the Holding Company, seeking
stockholder approval of a plan of reorganization, merger,
or consolidation of the Holding Company with one or more
corporations as a result of which the outstanding shares of
the class of the Holding Company's securities are exchanged
for or converted into cash or property or securities not
issued by the Holding Company.
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
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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 boards of
directors of the Bank or the Holding Company, in their absolute
discretion, may make a finding that a Change in Control of the
Bank or the Holding Company has taken place without the occurrence
of any or all of the events enumerated above.
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.
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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 "Effective Date" of this restated Agreement shall be June 1, 1997.
1.16 "Estate" means the estate of the Executive.
1.17 "Holding Company" means Raritan Bancorp Inc., a corporation organized
under the laws of the State of Delaware, the holding company for the
Bank, and any successor thereto.
1.18 "Interest Factor" means monthly compounding, discounting or annuitizing,
as applicable, at a rate set forth in Exhibit A.
1.19 "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
the Executive's life or for a period of one hundred eighty (180) months,
whichever is longer. 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.
1.20 "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.
1.21 "Plan Year" shall mean the twelve (12) month period commencing January 1
and ending December 31.
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1.22 "Retirement Age" means the Executive's sixty-fifth (65th) birthday
provided, however, that the Executive's actual retirement from full-time
employment may occur on or after the Executive attains age sixty-two (62)
or at any later date mutually agreed upon by the parties.
1.23 "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 _________________ Grantor Trust agreement.
1.24 "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.
1.25 "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.
1.26 "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.
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SECTION II
BENEFITS - GENERALLY
2.1 (a) Retirement Income Trust Fund and Accrued Benefit Account. The
Executive shall establish the _________________ 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 _________________ 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 _________________ Grantor Trust
agreement, the _________________ 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
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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 Retirement Age, on or immediately
before attainment of such 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
9
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
such Contributions in the same manner and at the same time as if
Executive had remained in the employ of the Bank until Benefit Age;
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 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 twenty-four (24) 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 the: (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
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,
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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.
(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,
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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.
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(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
_________________ 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 _________________ 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 _________________ 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
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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
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
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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.
If (i) the Executive is employed with the Bank until reaching his
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.
15
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
16
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.
17
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 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 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, or (iii)
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
18
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
19
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
20
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.
21
(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.
22
SECTION VI
OTHER BENEFITS
6.1 (a) Disability Benefit.
If the Executive's service is terminated prior to 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.
23
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
24
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.
Executive further understands and agrees that, following Executive's
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
25
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.
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
26
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.
27
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
28
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. Upon expiration of the thirty-six (36) month
period, the Bank may discharge its obligation by payment to the
Executive's Beneficiary. If the location of the Executive's Beneficiary
is not made known to the Bank by the end of an additional two (2) month
period following expiration of the thirty-six (36) month period, the Bank
may discharge its obligation by payment to the Executive's Estate. If
there is no Estate in existence at such time or if such fact cannot be
determined by the Bank, the Executive and his Beneficiary(ies) shall
thereupon forfeit any rights to the balance, if any, of the Executive's
Accrued Benefit Account provided for such Executive and/or Beneficiary
under this Agreement.
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.
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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
30
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, but reserves the right to amend or terminate the Agreement
when, in the sole opinion of the Bank, such amendment or termination is
advisable. However, any termination of the Agreement which is done in
anticipation of or pursuant to a "Change in Control", as defined in
Subsection 1.9, shall be deemed to trigger Subsection 2.1(b)(2) (or
2.1(c)(2), as applicable) of the Agreement notwithstanding the
Executive's continued employment, and benefit(s) shall be paid from the
Retirement Income Trust Fund (and Accrued Benefit Account, if applicable)
in accordance with Subsection 13.2 below and with Subsections 2.1(b)(2)
(or 2.1(c)(2), as applicable). Any amendment or termination of the
Agreement by the Bank 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 by the Bank
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
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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 _________________ 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
_________________ 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.
[Remainder of this Page Intentionally Left Blank]
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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: THE RARITAN SAVINGS BANK:
By:
----------------------------- --------------------------------
Secretary
Title:
ATTEST: RARITAN BANCORP INC.:
By:
----------------------------- --------------------------------
Secretary
Title:
WITNESS EXECUTIVE:
----------------------------- -----------------------------------
33
CONDITIONS, ASSUMPTIONS,
AND
SCHEDULE OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
1. Interest Factor - for purposes of:
a. the Accrued Benefit Account - shall be six percent (6%) 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 _________________ 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 Retirement Age, (i)
pursuant to APB Opinion No. 12, as amended by FAS 106 and (ii) assuming a
discount rate equal to Six percent (6%) 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-Five Thousand Three Hundred Seventy-Four
Dollars ($____________) at age 65 if paid entirely from the Accrued Benefit
Account or Fifty-Seven Thousand Two Hundred Twenty-Four Dollars
($_________) at age 65 if paid from the Retirement Income Trust Fund.
The Supplemental Retirement Income Benefit:
o 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). 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
34
4. Schedule of Annual Gross Contributions/Phantom Contributions
Plan Year Amount
--------- ------
1997 $
1998
1999
2000
2001
2002
2003
2004
2005
Exhibit A - Cont'd.
35
RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
BENEFICIARY DESIGNATION
The Executive, under the terms of the Restated Executive Supplemental
Retirement Income Agreement executed by the Bank, dated the 1st day of June,
1997, 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
36
RESTATED 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 Restated 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.
----------------------------------------
Executive
----------------------------------------
Date
Acknowledged
By:
-------------------------------------
Title:
----------------------------------------
----------------------------------------
Date
Exhibit C
37
