Exhibit 10.4
EXECUTIVE SALARY CONTINUATION AGREEMENT
THIS AGREEMENT, made and entered into this 27th day of December 2002, by
and between Xxxxxx National Bank, a bank organized and existing under the laws
of the State of New York (hereinafter referred to as the "Bank"), and Xxxxxx X.
Xxxxx, a former executive of the Bank (hereinafter referred to as the
"Executive").
WITNESSETH:
WHEREAS, the Executive has been a valued Executive of the Bank, and served
the Bank as its Vice Chairman and CEO; and
WHEREAS, it is the consensus of the Board of Directors (hereinafter
referred to as the "Board") that the Executive's services to the Bank in the
past have been of exceptional merit and have constituted an invaluable
contribution to the general welfare of the Bank in bringing the Bank;
ACCORDINGLY, it is the desire of the Bank and the Executive to enter into
this Agreement under which the Bank will agree to make certain payments pursuant
to this Agreement to the Executive at retirement or, in the event of the
Executive's Death, the Executive's beneficiary(ies);
FURTHERMORE, it is the intent of the parties hereto that this Executive
Plan be considered an unfunded arrangement maintained primarily to provide
supplemental retirement benefits for the Executive, and be considered a
non-qualified benefit plan for purposes of the Employee Retirement Security Act
of 1974, as amended ("ERISA"). The Executive is fully advised of the Bank's
financial status and has had substantial input in the design and operation of
this benefit plan; and
NOW, THEREFORE, in consideration of services performed in the past as well
as of the mutual promises and covenants herein contained it is agreed as
follows:
I. FRINGE BENEFITS
The Salary continuation benefits provided by this Agreement are granted by
the Bank as a fringe benefit to the Executive and are not part of any
Salary reduction plan or an arrangement deferring a bonus or a Salary
increase. The Executive has no option to take any current payment or bonus
in lieu of these Salary continuation benefits except as set forth
hereinafter.
II. RETIREMENT BENEFIT AND POST-RETIREMENT DEATH BENEFIT
The Bank, commencing on the first day of January, 2003, shall pay the
Executive an annual benefit equal to Forty-seven Thousand Fifty and 00/100
Dollars ($47,050). Said benefit shall be paid in equal monthly installments
(1/12 of the annual benefit) until the Executive's death at which time the
benefits provided hereunder shall be reduced by 50% and paid in equal
monthly installments (1/12 of the annual benefit) to the spouse (named in
the Beneficiary Designation Form attached) if she survives the Executive
until her death at which time the benefits provided hereunder shall cease.
III. BENEFIT ACCOUNTING
The Bank shall account for this benefit using the regulatory accounting
principles of the Bank's primary federal regulator. The Bank shall
establish an accrued liability retirement account for the Executive into
which appropriate reserves shall be accrued.
IV. VESTING
Executive's interest in the benefits that are the subject of this Agreement
shall be fully vested from the date of first service or from the date of
this agreement.
V. RESTRICTIONS ON 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 Executive Plan. The
Executive, their beneficiary, or any successor in interest shall be and
remain simply a general creditor of the Bank in the same manner as any
other creditor having a general claim for matured and unpaid compensation.
The Bank reserves the absolute right, at its sole discretion, to either
fund the obligations undertaken by this Executive Plan or to refrain from
funding the same and to determine the extent, nature and method of such
funding. Should the Bank elect to fund this Executive Plan, in whole or in
part, through the purchase of life insurance, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in part. At
no time shall the Executive be deemed to have any lien, right, title or
interest in any specific funding investment or assets of the Bank.
If the Bank elects to invest in a life insurance, disability or annuity
policy on the life of the Executive, then the Executive shall assist the Bank by
freely submitting to a physical exam and associated testing and supplying such
additional information necessary to obtain such insurance or annuities.
VI. MISCELLANEOUS
A. Alienabilitv and Assignment Prohibition:
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Neither the Executive, nor the Executive's surviving spouse, nor any
other beneficiary under this Executive Plan shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, commute,
modify or otherwise encumber in advance any of the benefits payable
hereunder nor shall any of said benefits be subject to seizure for the
payment of any debts, judgments, alimony or separate maintenance owed
by the Executive or the Executive's beneficiary, nor be transferable
by operation of law in the event of bankruptcy, insolvency or
otherwise. In the event the Executive or any beneficiary attempts
assignment, commutation, hypothecation, transfer or disposal of the
benefits hereunder, the Bank's liabilities shall forthwith cease and
terminate.
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B. Binding Obligation of the Bank and any Successor in Interest:
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The Bank shall not merge or consolidate into or with another bank or
sell substantially all of its assets to another bank, firm or person
until such bank, firm or person expressly agrees, in writing, to
assume and discharge the duties and obligations of the Bank under this
Executive Plan. This Executive Plan shall be binding upon the parties
hereto, their successors, beneficiaries, heirs and personal
representatives.
C. Amendment or Revocation:
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It is agreed by and between the parties hereto that, during the
lifetime of the Executive, this Executive Plan may be amended or
revoked at any time or times, in whole or in part, by the mutual
written consent of the Executive and the Bank.
D. Gender:
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Whenever in this Executive Plan 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.
E. Effect on Other Bank Benefit Plans:
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Nothing contained in this Executive Plan 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 plan constituting a part
of the Bank's existing or future compensation structure.
F. Headings:
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Headings and subheadings in this Executive Plan are inserted for
reference and convenience only and shall not be deemed a part of this
Executive Plan.
G. Applicable Law:
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The validity and interpretation of this Agreement shall be governed by
the laws of the State of New York.
H. 12 U.S.C.S1828(k):
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Any payments made to the Executive pursuant to this Executive Plan, or
otherwise, are subject to and conditioned upon their compliance with
12 U.S.C. ss. 1828(k) or any regulations promulgated thereunder.
I. Partial Invalidity:
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If any term, provision, covenant, or condition of this Executive Plan
is determined by an arbitrator or a court, as the case may be, to be
invalid, void, or unenforceable, such determination shall not render
any other term, provision, covenant, or condition invalid, void, or
unenforceable, and the Executive Plan shall remain in full force and
effect notwithstanding such partial invalidity.
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VII. ERISA PROVISIONS
A. Named Fiduciary and Plan Administrator:
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The "Named Fiduciary and Plan Administrator" of this Executive Plan
shall be the Executive Committee of the board of directors of the Bank
until its resignation or removal by the Board. As Named Fiduciary and
Plan Administrator, it shall be responsible for the management,
control and administration of the Executive Plan. The Named Fiduciary
and Plan Administrator may delegate to others certain aspects of the
management and operation responsibilities of the Executive Plan
including the employment of advisors and the delegation of ministerial
duties to qualified individuals.
B. Claims Procedure and Arbitration:
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In the event a dispute arises over benefits under this Executive Plan
and benefits are not paid to the Executive and such claimant feels he
or she is entitled to receive such benefits, then a written claim must
be made to the Named Fiduciary and Plan Administrator named above
within sixty (60) days from the date payments are refused. The Named
Fiduciary and Plan Administrator shall review the written claim and if
the claim is denied, in whole or in part, they shall provide in
writing within sixty (60) days of receipt of such claim the specific
reasons for such denial, reference to the provisions of this Executive
Plan upon which the denial is based and any additional material or
information necessary to perfect the claim. Such written notice shall
further indicate the additional steps to be taken by claimant if a
further review of the claim denial is desired. A claim shall be deemed
denied if the Named Fiduciary and Plan Administrator fail to take any
action within the aforesaid sixty-day period.
If a claimant desires a second review he or she shall notify the Named
Fiduciary and Plan Administrator in writing within sixty (60) days of
the first claim denial. Claimant may review this Executive Plan or any
documents relating thereto and submit any written issues and comments
he or she may feel appropriate. In their sole discretion, the Named
Fiduciary and Plan Administrator shall then seek counsel from the
Board of Directors of the Bank or its successor Board who will review
the second claim and provide a written decision within sixty (60) days
of receipt of such claim. This decision shall likewise state the
specific reasons for the decision and shall include reference to
specific provisions of the Plan Agreement upon which the decision is
based.
If a claimant continues to dispute the benefit denial based upon
completed performance of this Executive Plan or the meaning and effect
of the terms and conditions thereof, then the claimant may submit the
dispute to an arbitrator for final arbitration. The arbitrator shall
be selected by mutual agreement of the Bank and the claimant. The
arbitrator shall operate under any generally recognized set of
arbitration rules. The parties hereto agree that they and their heirs,
personal representatives, successors and assigns shall be bound by the
decision of such arbitrator with respect to any controversy properly
submitted to it for determination.
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The named Fiduciary and Plan Administrator and the Executive agree
that in the event an arbitrator is engaged to settle a dispute related
to this Agreement the unsuccessful party shall be solely responsible
for both parties expenses related to the arbitration process.
VIII. DEATH OF THE EXECUTIVE
Notwithstanding anything herein to the contrary, this Agreement shall
terminate upon the death of the Executive or his wife, whichever occurs
later.
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IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully
read this Agreement and executed the original thereof on the first date set
forth hereinabove, and that, upon execution, each has received a conforming
copy.
XXXXXX NATIONAL BANK
Oneonta, New York
/s/ Xxxxxx X. Xxxxxxx By:/s/ Xxxxx X. Xxxxxx
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Witness Title: Chairman
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxx
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Witness Executive
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