EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
FOR
XXXXXXXXX X. XXXXX
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
FOR XXXXXXXXX X. XXXXX
This Executive Supplemental Retirement Income Agreement (the
"Agreement"), effective as of the _____ day of February, 1996, formalizes the
understanding by and between MAGYAR SAVINGS BANK (the "Bank"), a state chartered
mutual savings bank, and XXXXXXXXX X. XXXXX, hereinafter referred to as
"Executive".
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 continued employment; and
WHEREAS, the Executive wishes to be assured that he will be entitled to
a certain amount of additional compensation for some definite period of time
from and after retirement from active service with the Bank or other termination
of employment and wishes to provide his beneficiary with benefits from and after
death; and
WHEREAS, the Bank and the Executive wish to provide the terms and
conditions upon which the Bank shall pay such additional compensation to the
Executive after retirement or other termination of employment and/or death
benefits to his beneficiary after death; and
WHEREAS, the Bank has adopted this Executive Supplemental Retirement
Income Agreement which controls all issues relating to benefits as described
herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the Bank and the Executive agree as follows:
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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 "Bank" means MAGYAR SAVINGS BANK and any successor thereto.
1.4 "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.
1.5 "Benefit Age" means the Executive's sixty-fifth (65th) birthday.
1.6 "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
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the first day of the month following the month in which the Executive
attains his Benefit Age.
1.7 "Board of Directors" means the board of directors of the Bank.
1.8 "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.
1.9 "Change in Control" of the Bank shall mean and include the following:
(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 0000 (xxx "Xxxxxxxx
Xxx"); or
(2) a change in control of the Bank within the meaning of 12 C.F.R.
574.4; or
(3) a Change in Control at such time as
(i) any "person" (as the term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Bank
representing Twenty Percent (20.0%) or more of the
combined voting power of the Bank's outstanding
securities ordinarily having the right to vote at the
election of Directors, except for (i) any stock of the
Bank purchased by the Holding Company in connection with
the conversion of the Bank to stock form, and (ii) any
stock purchased by the Bank's Employee Stock Ownership
Plan and/or trust; or
(ii) individuals who constitute the Board of Directors on the
date hereof (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof, provided that
any person becoming a Director subsequent to the date
hereof whose election was approved by a vote
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of at least three-quarters of the Directors comprising
the Incumbent Board, or whose nomination for election by
the Bank's stockholders was approved by the Bank's
Nominating Committee which is comprised of members of
the Incumbent Board, shall be, for purposes of this
clause (ii), considered as though he were a member of
the Incumbent Board; or
(iii) merger, consolidation, or sale of all or substantially
all of the assets of the Bank occurs; or
(iv) a proxy statement is issued soliciting proxies from the
members (or stockholders) of the Bank by someone other
than the current management of the Bank, seeking member
(or stockholder) approval of a plan of reorganization,
merger, or consolidation of the Bank with one or more
corporations as a result of which the outstanding shares
of the class of the Bank's securities are exchanged for
or converted into cash or property or securities not
issued by the Bank.
For purposes of this Subsection 1.9, the term "stockholder(s)" and
"members" shall be considered one and the same. For purposes of this
Subsection 1.9, the term "Holding Company" shall mean the holding
company (including any successor thereto) organized to acquire the
capital stock of the Bank upon the Bank's conversion from mutual to
stock form.
1.10 "Children" means all natural or adopted children of the Executive, and
issue of any predeceased child or children.
1.11 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.12 "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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1.13 (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).
1.14 "Effective Date" of this Agreement shall be February ___, 1996.
1.15 "Estate" means the estate of the Executive.
1.16 "Interest Factor" means monthly compounding, discounting or annuitizing,
as applicable, at a rate set forth in Exhibit A.
1.17 "Payout Period" means the time frame during which certain benefits
payable hereunder shall be distributed. Payments shall be made in
monthly installments commencing on the first day of the month following
the occurrence of the event which triggers distribution and continuing
for a period of one hundred eighty (180) months. Should the Executive
make a Timely Election to receive a lump sum benefit payment, the
Executive's Payout Period shall be deemed to be one (1) month.
1.18 "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.
1.19 "Plan Year" shall mean February ___, 1996 through September 30, 1996,
for the first Plan Year. Thereafter, the term shall mean the twelve (12)
month period
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commencing October 1, 1996 and each consecutive twelve (12) month period
thereafter.
1.20 "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 Xxxxxxxxx X. Xxxxx Grantor Trust agreement.
1.21 "Supplemental Retirement Income Benefit" means (assuming the normal form
of payment is applicable) 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.
1.22 "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),
such election having been made prior to the event which triggers
distribution and at least two (2) years prior to the Executive's Benefit
Eligibility Date.
SECTION II
BENEFITS - GENERALLY
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2.1 (a) RETIREMENT INCOME TRUST FUND AND ACCRUED BENEFIT ACCOUNT. The
Executive shall establish the Xxxxxxxxx X. Xxxxx Grantor Trust into
which the Bank shall be required to make annual Contributions on the
Executive's behalf, pursuant to Exhibit A and this Section II of the
Agreement. A trustee shall be selected by the Executive. The trustee
shall maintain an account, separate and distinct from the Executive's
personal contributions, which account shall constitute the Retirement
Income Trust Fund. The trustee shall be charged with the responsibility
of investing all contributed funds. Distributions from the Retirement
Income Trust Fund of the Xxxxxxxxx X. Xxxxx Grantor Trust shall be made
by the trustee to the Executive, for purposes of payment of any income
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 Xxxxxxxxx X. Xxxxx Grantor Trust
agreement, this Agreement shall supersede the Xxxxxxxxx X. Xxxxx Grantor
Trust 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 thirty (30) days of establishment of such
trust, and (ii) within the first five (5) 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 five (5) days of the beginning of each
applicable Plan Year, unless this Section expressly provides otherwise.
Phantom Contributions
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shall accrue interest at a rate equal to the Interest Factor, up to and
throughout the Payout Period, until the balance of the Accrued Benefit
Account has been fully distributed. Interest on any Phantom Contribution
shall not commence until one (1) calendar year following the date such
Phantom Contribution is initially recorded in the Executive's Accrued
Benefit Account.
The Administrator may review the schedule of annual Contributions (or
Phantom Contributions) provided for in Exhibit A within ten (10) days
prior to the close of each Plan Year. Such review shall consist of an
evaluation of the accuracy of all assumptions used to establish the
schedule of Contributions (or Phantom Contributions) required to provide
the Supplemental Retirement Income Benefit. The Administrator may
prospectively amend the schedule of Contributions (or Phantom
Contributions) provided for in Exhibit A, should the Administrator
determine during any such review that an increase in such Contributions
(or Phantom Contributions) is necessary or desired in order to provide a
benefit equivalent to the Supplemental Retirement Income Benefit on an
after-tax basis.
(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 included on Exhibit A 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 sixty (60) months by either (i) the Executive's involuntary
termination of employment, or (ii) Executive's voluntary termination of
employment after: (A) a material change in the Executive's function,
duties, or responsibilities, which change would cause the Executive's
position to become one of lesser responsibility, importance, or scope
from the position the Executive held at the time of the Change in
Control, (B) a relocation of
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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 below shall be required of the Bank in addition
to all previous annual Contributions. The Bank shall be required to make
a final Contribution to the Retirement Income Trust Fund within five (5)
days of the Executive's termination of employment, in an amount equal to
the lesser of (i) the present value (using the Interest Factor) of all
remaining Contributions which would have been required to be made on
behalf of the Executive, had the Executive remained in the employ of the
Bank until Benefit Age, or (ii) One Dollar ($1.00) less than the total
dollar amount of Contributions which would have resulted in taxation to
the Executive pursuant to sections 280G and 4999 of the Code.
(3) TERMINATION FOR CAUSE
If the Executive (i) does not exercise his withdrawal rights pursuant to
Subsection 2.2, and (ii) 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 year in which such termination for Cause
occurs.
(4) VOLUNTARY OR INVOLUNTARY TERMINATION (NOT FOR CAUSE) OF
EMPLOYMENT PRIOR TO BENEFIT AGE.
If (i) the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and (ii) the Executive's employment with the Bank is
voluntarily or involuntarily terminated for any reason other than a
termination related to disability, termination for Cause, or termination
following a Change in Control, within ten (10) days of such voluntary or
involuntary termination of employment, the Bank shall be required to
make a final Contribution to the Retirement Income Trust Fund,
attributable to the Plan Year in which the termination occurs (unless
such Contribution is made prior to termination), in an amount equal to
the full Contribution required for such Plan Year. No further
Contribution(s) shall be required for periods subsequent to the Plan
Year in which the Executive's employment is terminated.
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(5) DEATH DURING EMPLOYMENT.
If the Executive (i) does not exercise any withdrawal rights pursuant to
Subsection 2.2, and (ii) dies while employed by the Bank (including
employment following a Change in Control), the Contributions included on
Exhibit A shall be required of the Bank. Such Contributions to the
Retirement Income Trust Fund shall commence in the Plan Year in which
the Retirement Income Trust Fund is established and shall continue,
annually, through the Plan Year in which the Executive dies. No
additional Contributions shall be required.
(6) TERMINATION DUE TO DISABILITY.
If the Executive (i) does not exercise his withdrawal rights pursuant to
Subsection 2.2, and (ii) terminates service with the Bank due to a
disability pursuant to Subsection 6.1, all annual Contributions set
forth in Exhibit A for all Plan Years preceding the year in which such
termination occurs shall be required of the Bank as well as the final
Contribution, set forth below, attributable to the Plan Year in which
termination occurs (unless such Contribution is made prior to
termination). The final Contribution to be made by the Bank for the Plan
Year in which the termination occurs, shall be equal to the full
Contribution required for such Plan Year pursuant to Exhibit A and shall
be made within ten (10) days of the disability determination. No
additional Contributions to the Retirement Income Trust Fund shall be
required for periods subsequent to the Plan Year in which the
Executive's employment is terminated.
(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 on or
before the last day 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
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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 first 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
sixty (60) months of such Change in Control, the Executive's employment
is either (i) involuntarily terminated, or (ii) voluntarily terminated
by the Executive after: (A) a material change in the Executive's
function, duties, or responsibilities, which change would cause the
Executive's position to become one of lesser responsibility, importance,
or scope from the position the Executive held at the time of the Change
in Control, (B) a relocation of the Executive's principal place of
employment by more than thirty (30) miles from its location prior to the
Change in Control, or (C) a material reduction in the benefits and
perquisites to the Executive from those being provided at the time of
the Change in Control, the Phantom Contribution set forth below shall be
required of the Bank in addition to all previous annual Contributions.
The Bank shall be required to record a final lump sum Phantom
Contribution in the Accrued Benefit Account, within five (5) days of
such termination, in an amount equal to the lesser of (i) the present
value (using the Interest Factor) of all remaining Phantom Contributions
which would have been required had the Executive remained in the employ
of the Bank until Benefit Age, or (ii) One Dollar ($1.00) less than the
total dollar amount of Phantom Contributions which would have resulted
in taxation to the Executive pursuant to sections 280G and 4999 of the
Code.
(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 accrued interest, shall be forfeited.
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(4) VOLUNTARY OR INVOLUNTARY TERMINATION (NOT FOR CAUSE) OF
EMPLOYMENT PRIOR TO BENEFIT AGE.
If (i) the Executive exercises his withdrawal rights pursuant to
Subsection 2.2, and (ii) the Executive's employment with the Bank is
voluntarily or involuntarily terminated for any reason other than a
termination related to disability, termination for Cause, or termination
following a Change in Control, within ten (10) days of such voluntary or
involuntary termination of employment, the Bank shall be required to
record a final Phantom Contribution in the Executive's Accrued Benefit
Account, attributable to the Plan Year in which the termination occurs
(unless such Phantom Contribution is recorded prior to termination), in
an amount equal to the full Phantom Contribution required for such Plan
Year. No further Phantom Contributions shall be required to be recorded
for periods subsequent to the Plan Year in which the Executive's
employment is terminated.
(5) DEATH DURING EMPLOYMENT.
If the Executive (i) exercises his withdrawal rights pursuant to
Subsection 2.2, and (ii) dies while employed by the Bank (including
employment following a Change in Control), the Phantom Contributions
included on Exhibit A shall be required of the Bank. Such Phantom
Contributions to the Accrued Benefit Account shall commence in the Plan
Year in which the Executive exercises his withdrawal rights and shall
continue, annually, through the Plan Year in which the Executive dies.
The final Phantom Contribution, attributable to the Plan Year of the
Executive's death, shall be equal to (i) the full Phantom Contribution
required in accordance with Exhibit A for all Plan Year in which the
Executive dies, if not recorded prior to death, plus (ii) the sum of the
total Phantom Contributions which would have been required in accordance
with Exhibit A for all Plan Year(s) following the Plan Year of the
Executive's death. Such final Phantom Contribution shall be recorded in
the Accrued Benefit Account within (10) days of the Executive's death.
(6) TERMINATION DUE TO DISABILITY.
If the Executive (i) exercises his withdrawal rights pursuant to
Subsection 2.2, and (ii) terminates service with the Bank due to a
disability pursuant to Subsection 6.1,
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all annual Contributions set forth in Exhibit A for all Plan Years
preceding the year of such exercise of withdrawal rights shall be
required of the Bank. Such Contributions to the Retirement Income Trust
Fund shall commence in the Plan Year in which the Retirement Income
Trust Fund is established and shall continue through the Plan Year
immediately prior to the Plan Year in which the Executive first
exercises his withdrawal rights. Thereafter, Phantom Contributions shall
be recorded annually, pursuant to Exhibit A, in the Executive's Accrued
Benefit Account. Phantom Contributions shall be recorded for the Plan
Year in which the Executive first exercises his withdrawal rights and
shall continue through the Plan Year in which the termination occurs.
The final Phantom Contribution recorded in the Accrued Benefit Account
for the Plan Year in which the termination occurs shall be equal to the
full Phantom Contribution required for such Plan Year pursuant to
Exhibit A and shall be recorded in the Accrued Benefit Account within
ten (10) days of the disability determination. No additional Phantom
Contributions shall be required to be recorded in the Accrued Benefit
Account for periods subsequent to the Plan Year in which the Executive's
employment is terminated.
2.2 WITHDRAWALS FROM RETIREMENT INCOME TRUST FUND.
Exercise of withdrawal rights by the Executive pursuant to the Xxxxxxxxx
X. Xxxxx Grantor Trust agreement shall terminate the Bank's obligation
to make any further Contributions to the Retirement Income Trust Fund,
and the Bank's obligation to record Phantom Contributions pursuant to
Subsection 2.1(c) shall commence. For purposes of this Subsection 2.2,
"exercise of withdrawal rights" shall mean those withdrawal rights to
which the Executive is entitled under Article III of the Xxxxxxxxx X.
Xxxxx Grantor Trust agreement and shall exclude any distributions made
by the trustee of the Retirement Income Trust Fund to the Executive for
purposes of payment of income taxes in accordance with Subsection 2.1 of
this Agreement, or other trust expenses properly payable from the
Xxxxxxxxx X. Xxxxx Grantor Trust pursuant to the provisions of the trust
document.
2.3 BENEFITS PAYABLE FROM RETIREMENT INCOME TRUST FUND
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Notwithstanding anything else to the contrary in this Agreement, in the
event that the trustee of the Retirement Income Trust Fund purchases a
life insurance policy with the Contributions to and, if applicable,
earnings of the Trust, and such life insurance policy is intended to
continue in force beyond the Payout Period for the disability or
retirement benefits payable from the Retirement Income Trust Fund
pursuant to this Agreement, then the Trustee shall have the absolute and
sole discretion to determine the portion of the cash value of such
policy available for purposes of annuitizing the Retirement Income Trust
Fund 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
Benefit Age, including employment with the Bank until Benefit Age
following a Change in Control, 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
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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. 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 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 (i) obtains approval
from the trustee of the Xxxxxxxxx X. Xxxxx Grantor Trust 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 trustee, shall be payable within thirty (30) days of such trustee
approval.
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
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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
Benefit Age, including employment with the Bank until Benefit Age
following a Change in Control, and (ii) the Executive has made a Timely
Election to receive a lump sum benefit, this Subsection 3.1(b) shall be
controlling with respect to retirement benefits.
The balance of the Retirement Income Trust Fund, measured as of the
Executive's Benefit Age, shall be paid to the Executive in a lump sum on
his Benefit Eligibility Date. In the event the Executive dies after
becoming eligible for such payment (upon attainment of his Benefit Age),
but before the actual payment is made, his Beneficiary shall be entitled
to receive the lump sum benefit in accordance with this Subsection
3.1(b) within thirty (30) days of the date the Administrator receives
notice of the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the Executive's Benefit Age, shall be paid to the
Executive in a lump sum on his Benefit Eligibility Date. In the event
the Executive dies after becoming eligible for such payment (upon
attainment of his Benefit Age), but before the actual payment is made,
his Beneficiary shall be entitled to receive the lump sum benefit in
accordance with this Subsection 3.1(b) within thirty (30) days of the
date the Administrator receives notice of the Executive's death.
SECTION IV
PRE-RETIREMENT DEATH BENEFIT
4.1 (a) NORMAL FORM OF PAYMENT.
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If (i) the Executive dies while employed by the Bank, including the
Executive's death while employed by the Bank following a Change in
Control, 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 Executive's Retirement Income Trust Fund, measured as of the
Executive's death, 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. Should Retirement Income Trust Fund assets actually
earn a rate of return, following the date such balance is annuitized,
which is less than the rate of return used to annuitize the Retirement
Income Trust Fund, no additional contributions to the Retirement Income
Trust Fund shall be required by the Bank in order to fund the final
benefit payment(s) and make up for any shortage attributable to the
less-than-expected rate of return. Should Retirement Income Trust Fund
assets actually earn a rate of return, following the date such balance
is annuitized, which is greater than the rate of return used to
annuitize the Retirement Income Trust Fund, the final benefit payment to
the Executive's Beneficiary shall distribute the excess amounts
attributable to the greater-than-expected rate of return. The
Executive's Beneficiary may request to receive the unpaid balance of the
Executive's Retirement Income Trust Fund in a lump sum payment. If a
lump sum payment is requested by the Beneficiary, payment of the balance
of the Retirement Income Trust Fund in such lump sum form shall be made
only if the Executive's Beneficiary (i) obtains approval from the
trustee of the Xxxxxxxxx X. Xxxxx Grantor Trust 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 trustee,
shall be made within thirty (30) days of such trustee approval.
The Executive's Accrued Benefit Account (if applicable), measured as of
the Executive's death, 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
17
the Administrator receives notice of the Executive's death. 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, including the
Executive's death while employed by the Bank following a Change in
Control, and (ii) the Executive has made a Timely Election to receive a
lump sum benefit, this Subsection 4.1(b) shall be controlling with
respect to pre-retirement death benefits.
The balance of the Executive's Retirement Income Trust Fund, measured as
of the 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.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as 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.
SECTION V
BENEFIT(S) IN THE EVENT OF TERMINATION OF SERVICE
PRIOR TO BENEFIT AGE
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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 Benefit Age, for any reason including
a Change in Control, but excluding (i) any termination related to
disability which shall be covered in Section VI, (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 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. 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 trustee
of the Retirement Income Trust Fund shall pay to the Executive's
Beneficiary the monthly installments (or a continuation of the monthly
19
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 (i) obtains approval from the trustee of the
Xxxxxxxxx X. Xxxxx Grantor Trust 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 trustee, shall be made
within thirty (30) days of such trustee approval.
The Executive's Accrued Benefit Account (if applicable), measured as of
the Executive's Benefit Age, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable for the Payout
Period. Such benefit payments shall commence on the Executive's Benefit
Eligibility Date. In the event the Executive dies at any time after
attaining his Benefit Age, but prior to commencement or completion of
all the payments due and owing hereunder, (i) the Bank shall pay to the
Executive's Beneficiary the same monthly installments (or a continuation
of such monthly installments if they have already commenced) for the
balance of months remaining in the Payout Period, or (ii) the
Executive's Beneficiary may request to receive the remainder of any
unpaid benefit payments in a lump sum payment. If a lump sum payment is
requested by the Beneficiary, the amount of such lump sum payment shall
be equal to the unpaid balance of the Executive's Accrued Benefit
Account. Payment in such lump sum form shall be made only if the
Executive's Beneficiary (i) obtains Board of Director approval, and (ii)
notifies the Administrator in writing of such election within ninety
(90) days of the Executive's death. Such lump sum payment, if approved
by the Board of Directors, shall be made within thirty (30) days of such
Board of Director approval.
(2) EXECUTIVE DIES PRIOR TO BENEFIT AGE
If (i) after such termination, the Executive dies prior to attaining his
Benefit Age, and (ii) the Executive has not made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(a)(2) shall be
controlling with respect to retirement benefits.
20
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
benefit 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 as of the date of the Executive's death, 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 (i) obtains approval
from the trustee of the Xxxxxxxxx X. Xxxxx Grantor Trust 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 trustee, shall be made within thirty (30) days of such trustee
approval.
The Executive's Accrued Benefit Account (if applicable), measured as of
the date of the Executive's death, shall be annuitized (using the
Interest Factor) into monthly installments and shall be payable for the
Payout Period. Such payments shall commence within thirty (30) days of
the date the Administrator receives notice of the Executive's death. The
Executive's Beneficiary may request to receive the unpaid balance of the
Executive's Accrued Benefit Account in the form of a lump sum payment.
If a lump sum payment is requested by the Beneficiary, payment of the
balance of the Accrued Benefit Account in such lump sum form shall be
made only if
21
the Executive's Beneficiary (i) obtains Board of Director approval, and
(ii) notifies the Administrator in writing of such election within
ninety (90) days of the Executive's death. Such lump sum payment, if
approved by the Board of Directors, shall be made within thirty (30)
days of such Board of Director approval.
(b) ALTERNATIVE PAYOUT OPTION.
(1) EXECUTIVE LIVES UNTIL BENEFIT AGE
If (i) after such termination, the Executive lives until attaining his
Benefit Age, and (ii) the Executive has made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(b)(1) shall be
controlling with respect to retirement benefits.
The balance of the Retirement Income Trust Fund, measured as of the
Executive's Benefit Age, shall be paid to the Executive in a lump sum on
his Benefit Eligibility Date. In the event the Executive dies after
becoming eligible for such payment (upon attainment of his Benefit Age),
but before the actual payment is made, his Beneficiary shall be entitled
to receive the lump sum benefit in accordance with this Subsection
5.1(b)(1) within thirty (30) days of the date the Administrator receives
notice of the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the Executive's Benefit Age, shall be paid to the
Executive in a lump sum on his Benefit Eligibility Date. In the event
the Executive dies after becoming eligible for such payment (upon
attainment of his Benefit Age), but before the actual payment is made,
his Beneficiary shall be entitled to receive the lump sum benefit in
accordance with this Subsection 5.1(b)(1) within thirty (30) days of the
date the Administrator receives notice of the Executive's death.
(2) EXECUTIVE DIES PRIOR TO BENEFIT AGE
If (i) after such termination, the Executive dies prior to attaining his
Benefit Age, and (ii) the Executive has made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(b)(2) shall be
controlling with respect to retirement benefits.
22
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.
23
SECTION VI
OTHER BENEFITS
6.1 (a) DISABILITY BENEFIT.
If the Executive's service is terminated prior to Benefit 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).
Notwithstanding any other provision hereof, if requested by the
Executive and approved by the Board of Directors, the Executive shall
receive a lump sum Disability Benefit hereunder, in any case in which 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 Executive, because of ill health,
accident, disability or general inability due to age. 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), both measured as of the
disability determination. The benefit(s) shall be paid within thirty
(30) days following the date of the Executive's request for such
benefit. 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.
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 following: 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 within
thirty (30) days of such Board of Director approval.
24
SECTION VII
NON-COMPETITION
7.1 NON-COMPETITION
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. The Executive further
agrees that following his employment with the Bank and continuing
through the Payout Period he 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 Bank, unless the Executive has the prior express
written consent of the Board of Directors of the Bank.
7.2 BREACH OF NON-COMPETITION CLAUSE.
(a) DURING EMPLOYMENT.
In the event the Executive breaches Subsection 7.1 while employed at the
Bank, all further Contributions to the Retirement Income Trust Fund (or
Phantom Contributions to 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. 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 equal to the balance of the Retirement Income Trust Fund, measured
as of the Executive's Benefit Age, payable 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 payable within thirty (30) days
of the date of the Administrator receives notice of the Executive's
death. 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 equal to the balance of the
Retirement Income Trust Fund, measured as of the date of the Executive's
death,
25
payable in a lump sum within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
In the event (i) any breach by the Executive of the agreements and
covenants described in Subsection 7.1 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.
(b) BREACH FOLLOWING TERMINATION OF EMPLOYMENT.
In the event the Executive breaches Subsection 7.1 following the
Executive's termination of employment with the Bank, all benefits under
this Agreement, other than those which can be paid from previous
Contributions to the Retirement Income Trust Fund shall be forfeited,
regardless of whether the Executive is receiving benefits at such time.
If the Executive has attained his Benefit Age and is receiving a benefit
at the time of such breach, his remaining balance in the Retirement
Income Trust Fund shall be paid to him in a lump sum within thirty (30)
days of the date the Bank has received notice of such breach (or in the
event of his death prior to payment of such lump sum, to his
Beneficiary). If the Executive has not attained his Benefit Age, and
following such breach, the Executive lives until his Benefit Age, he (or
his Beneficiary, in the event of his death prior to payment of his
benefit) shall receive a benefit payable in a lump sum from the
Retirement Income Trust Fund in the same manner as set forth above in
Subsection 7.2(a).
SECTION VIII
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
26
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 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, unless this
Agreement provides otherwise. The Executive, the Beneficiary, or any
other person claiming through the Executive, shall only have the right
to receive from the Bank those payments 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, unless expressly
provided herein, shall not be deemed to be held under any trust for the
benefit of the Executive or his Beneficiaries, nor shall any asset be
considered security for the performance of the obligations of the Bank.
Any such asset shall be and remain, a general, unpledged, and
unrestricted asset of the Bank.
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,
unless this Agreement provides otherwise. Except as otherwise provided
for in this Agreement, 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
27
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 terminate such
assets at any time, in whole or in part. At no time shall the Executive
be deemed to have any lien, right, title or interest in or to any
specific investment or to any assets of the Bank. If the Bank elects to
invest in a life insurance, disability or annuity policy upon the life
of the Executive, then the Executive shall assist the Bank by freely
submitting to a physical examination and by supplying such additional
information necessary to obtain such insurance or annuities.
SECTION XI
ACT PROVISIONS
11.1 NAMED FIDUCIARY AND ADMINISTRATOR. The Bank shall be the Administrator
(the "Administrator") of this Agreement. As Administrator, the Bank
shall be responsible for the management, control and administration of
the Agreement as established herein and shall be responsible for
designation of the initial trustee, of the related rabbi trust, in
accordance with the formal agreement establishing such trust. 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
28
material or information necessary to perfect the claim. Such writing by
the Administrator shall further indicate the additional steps which must
be undertaken by claimants if an additional review of the claim denial
is desired.
If claimants desire a second review, they shall notify the Administrator
in writing within sixty (60) days of the first claim denial. Claimants
may review this Agreement or any documents relating thereto and submit
any issues and comments, in writing, they may feel appropriate. In its
sole discretion, the Administrator shall then review the second claim
and provide a written decision within sixty (60) days of receipt of such
claim. This decision shall state the specific reasons for the decision
and shall include reference to specific provisions of this Agreement
upon which the decision is based. If such determination is favorable to
the claimants, it shall be binding and conclusive. If such determination
is adverse to such claimants, it shall be binding and conclusive unless
the claimants (i) notify the Administrator within ninety (90) days after
receipt by the claimants of the Administrator's determination, that the
claimants intend to institute legal proceedings challenging the
determination of the Administrator, and (ii) actually institute such
legal proceedings within one hundred eighty (180) days of receipt by the
claimants of the Administrator's determination.
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, in accordance with the bylaws of the Bank, without regard to
the existence of the Agreement. Pursuant to 12 C.F.R. ss. 563.39(b), the
following conditions shall apply to this Agreement:
(1) The Bank's Board of Directors may terminate the Executive at any
time, but any termination by the Bank's Board of Directors other
than termination for Cause shall not prejudice the Executive's
vested right
29
to compensation or other benefits under the contract. As
provided in Subsection 5.2, the Executive shall have no right to
receive additional compensation or other benefits, other than
those provided for in Subsection 5.2, after termination for
Cause.
(2) If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)) the Bank's
obligations under the contract shall be suspended (except vested
rights) as of the date of termination of service unless stayed
by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Executive
all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate (in whole or in
part) any of its obligations which were suspended.
(3) If the Executive is terminated and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an
order issued under Section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(e)(4) or (g)(1)), all
non-vested obligations of the Bank under the contract shall
terminate as of the effective date of the order.
(4) If the Bank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), all non-vested obligations under
the contract shall terminate as of the date of default.
(5) All non-vested obligations under the contract shall be
terminated, except to the extent determined that continuation of
the contract is necessary for the continued operation of the
Bank:
30
(i) by the Director [of the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation] or his
designee at the time the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation enters
into an agreement to provide assistance to or on behalf
of the Bank under the authority contained in ss. 13(c)
of the Federal Deposit Insurance Act; or
(ii) by the Director [of the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation] or his
designee, at the time the Director or his designee
approves a supervisory merger to resolve problems
related to operation of the Bank or when the Bank is
determined by the Director to be in an unsafe or unsound
condition.
Any rights of the parties that have already vested, (i.e., the balance
of the Executive's Retirement Income Trust Fund and the balance of the
Executive's Accrued Benefit Account, if applicable), however, shall not
be affected by such action.
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
31
appointed, any benefits under the Agreement to which such Executive is
entitled shall be paid to such conservator or other person legally
charged with the care of his person or Estate.
12.5 UNCLAIMED BENEFIT. The Executive shall keep the Bank informed of his
current address and the current address of his Beneficiaries. The Bank
shall not be obligated to search for the whereabouts of any person. If
the location of the Executive is not made known to the Bank as of the
date upon which any payment of any benefits from the Accrued Benefit
Account may first be made, the Bank shall delay payment of the
Executive's benefit payment(s) until the location of the Executive is
made known to the Bank; however, the Bank shall only be obligated to
hold such benefit payment(s) for the Executive until the expiration of
thirty-six (36) months. 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.
32
12.8 EFFECT ON OTHER CORPORATE BENEFIT AGREEMENTS. Nothing contained in this
Agreement shall affect the right of the Executive to participate in or
be covered by any qualified or non-qualified pension, profit sharing,
group, bonus or other supplemental compensation or fringe benefit
agreement constituting a part of the Bank's existing or future
compensation structure.
12.9 SUICIDE. Notwithstanding anything to the contrary in this Agreement, if
the Executive's death results from suicide, whether sane or insane,
within twenty-six (26) months after execution of this Agreement, all
further Contributions to the Retirement Income Trust Fund (or Phantom
Contributions recorded in the Accrued Benefit Account) shall thereupon
cease, and no Contribution (or Phantom Contribution) shall be made by
the Bank to the Retirement Income Trust Fund (or recorded in the Accrued
Benefit Account) in the year such death resulting from suicide occurs
(if not yet made). All benefits other than those available from previous
Contributions to the Retirement Income Trust Fund under this Agreement
shall be forfeited, and this Agreement shall become null and void. The
balance of the Retirement Income Trust Fund, measured as of the
Executive's date of death, shall be paid to the Beneficiary within
thirty (30) days of the date the Administrator receives notice of the
Executive's death.
12.10 INUREMENT. This Agreement shall be binding upon and shall inure to the
benefit of the Bank, its successors and assigns, and the Executive, his
successors, heirs, executors, administrators, and Beneficiaries.
12.11 HEADINGS. Headings and sub-headings in this Agreement are inserted for
reference and convenience only and shall not be deemed a part of this
Agreement.
12.12 ESTABLISHMENT OF A RABBI TRUST. The Bank shall establish a rabbi trust
into which the Bank shall contribute assets which shall be held therein,
subject to the claims of the Bank's creditors in the event of the Bank's
"Insolvency" (as defined in such rabbi trust agreement), until the
contributed assets are paid to the Executive and/or his Beneficiary in
such manner and at such times as specified in this Agreement. It is
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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.
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
required due to objection to the plan by the Bank's regulatory
authorities, or in the event of a change in existing federal income tax
laws which would cause this plan to create adverse tax consequences to
the Bank and/or participants in the plan. 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 shall be made pursuant to a resolution
of the Board of Directors of the Bank and shall be effective as of the
date of such resolution. No amendment or termination of the Agreement
shall directly or indirectly deprive the Executive of all or any portion
of the Executive's Retirement Income Trust Fund (and Accrued Benefit
Account, if applicable) as of the effective date of the resolution
amending or terminating the Agreement.
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), measured as of the date of plan
termination. However, if such termination is done in anticipation of or
pursuant to a "Change in Control," such balance(s) shall be
34
measured as of the date the final Contribution (or Phantom Contribution)
is made (or recorded) pursuant to Subsection 2.1(b)(2) (or 2.1(c)(2)).
Payment of the balance(s) of the Executive's Retirement Income Trust
Fund (and Accrued Benefit Account, if applicable) shall not be dependent
upon his continuation of employment with the Bank following the
termination date of the Agreement. Payment of the balance(s) of the
Executive's Retirement Income Trust Fund (and Accrued Benefit Account,
if applicable) shall be made in a lump sum within thirty (30) days of
the date of termination of the Agreement.
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SECTION XIV
EXECUTION
14.1 This Agreement and the Xxxxxxxxx X. Xxxxx Grantor Trust agreement set
forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby, and any previous agreements or
understandings between the parties hereto regarding the subject matter
hereof are merged into and superseded by this Agreement and the
Xxxxxxxxx X. Xxxxx Grantor Trust agreement.
14.2 This Agreement shall be executed in triplicate, each copy of which, when
so executed and delivered, shall be an original, but all three copies
shall together constitute one and the same instrument.
[REMAINDER OF 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.
MAGYAR SAVINGS BANK:
Illegible By: /s/ Xxxxxx X. Xxxxxx
-------------------------------- ------------------------
Secretary
Title: President/CEO
------------------------
WITNESS: EXECUTIVE:
Illegible Xxxxxxxxx X. Xxxxx
-------------------------------- ----------------------------------------
37
CONDITIONS, ASSUMPTIONS,
AND
SCHEDULE OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
1. Interest Factor - for purposes of:
a. the Accrued Benefit Account - shall be Eight percent (8%) per
annum, compounded monthly.
b. the Retirement Income Trust Fund - shall be Four percent (4%)
per annum, compounded monthly, provided, however, that for
purposes of annuitizing the balance of the Retirement Income
Trust Fund over the Payout Period, the trustee of the Xxxxxxxxx
X. Xxxxx Grantor Trust shall exercise discretion in selecting
the appropriate rate, given the nature of the investments
contained in the Retirement Income Trust Fund and the expected
return associated with the investments.
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 until the earlier of the Executive's death or Benefit Age, (i)
pursuant to APB Opinion No. 12, as amended by FAS 106 and (ii) assuming
a discount rate equal to Eight percent (8%) 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 Thirty Thousand Four Hundred Forty Seven Dollars
($30,447).
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).
4. Schedule of Annual Gross Contributions/Phantom Contributions
YEAR CONTRIBUTIONS
---- -------------
1996 $ 1,220
1997 $ 2,083
1998 $ 2,420
1999 $ 2,799
2000 $ 3,224
2001 $ 3,700
2002 $ 4,234
2003 $ 4,830
2004 $ 5,496
2005 $ 6,240
2006 $ 7,069
2007 $ 7,993
2008 $ 9,021
2009 $10,165
2010 $11,437
2011 $12,850
2012 $14,419
2013 $16,159
2014 $18,089
2015 $20,229
2016 $22,598
2017 $25,222
2018 $28,126
