XXXXXX SAVINGS BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAIN
THIS SUPPLEMENTAL RETIREMENT PLAN (the "Agreement") is made
this ----- day of ---------------------, 1994, by and between
XXXXXX SAVINGS BANK, (the "Bank")
and
----------------------, an individual employed by the Bank,
and each other employee of the Bank who is designated by the Bank
and becomes a signatory to this Agreement (each an "Employee").
Introduction
The Bank maintains the Xxxxxx Savings Bank Pension Plan, the
Xxxxxx Retirement Savings Incentive Plan and the Xxxxxx Savings
Bank Employee Stock Ownership Plan for the benefit of the Bank's
eligible employees. The Bank has amended the Plans periodically
to continue its compliance with ERISA and its qualification under
Section 401(a) of the Code.
The Revenue Reconciliation Act of 1993 amended Section
401(a)(17) of the Code. This amendment reduced each Employee's
compensation that could be considered under the Plans. The Bank
has adopted this Agreement, in order to supplement the reduced
benefit the Employee may receive under the Plans, in light of
amended Section 401(a)(17) of the Code, and in light of benefit
and contribution limitations under Section 415 of the Code.
ARTICLE I
Definitions
In this Plan, unless the context clearly implies to the
contrary, the singular includes the plural and the masculine
includes the feminine. This Agreement incorporates by reference
all defined terms set forth in Article I of the Plans, as amended
from time to time, and in addition adopts the following
definitions:
1.01 "Bank" shall mean XXXXXX SAVINGS BANK, a Corporation,
having its principal place of business in Harrisburg,
Pennsylvania
1.02 "Employee" shall mean the party under this Agreement
who shall have been designated by the Board of Directors as
eligible for participation under this Agreement and who has
become a signatory to this Agreement.
1.03 "Agreement" shall mean this agreement.
1.04 "Pension Plan" shall mean the Xxxxxx Savings Bank
Pension Plan. "Savings Plan" shall mean the Xxxxxx Retirement
Savings Incentive Plan. "ESOP" shall mean Xxxxxx Savings Bank
Employee Stock Ownership Plan. "Plans" shall mean all three of
the above listed plans.
1.05 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.06 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.07 "Payment" shall mean the supplemental retirement
benefit specified in this Agreement
1.08 "93 Compensation Benefit" shall mean the Actuarial
Equivalent of the Accrued Benefit payable to the Employee under
the terms of the Pension Plan, as amended from time to time;
provided, however, that the 93 Compensation Benefit shall in all
events be determined in accordance with Section 401(a)(17) of the
Code as it existed prior to amendment by The Revenue
Reconciliation Act of 1993, including the provision for
adjustments of the annual compensation limit. In the event the
Pension Plan is terminated, the 93 Compensation Benefit shall be
determined as a result of such termination and shall not increase
or decrease beyond such termination. For purposes of determining
the 93 Compensation Benefit, compensation shall include deferred
compensation for a given year under a Deferred Compensation
Employment contract between the Bank and the Employee.
Compensation shall exclude all amounts due to the exercising of
stock options on behalf of the Employee.
1.09 "Reduced Compensation Benefit" shall mean the Actuarial
Equivalent of the Accrued Benefit Payable to the Employee under
the terms of the Pension Plan, as amended from time to time. In
the event the Pension Plan is terminated, the Reduced
Compensation Benefit shall mean the Actuarial Equivalent of the
Accrued Benefit payable to the Employee under the terms of the
Plan as a result of such termination
1.10 "Excess Compensation" shall mean, for a given plan
year, the excess of compensation determined in accordance with
Section 401(a)(17) of the Code as it existed prior to amendment
by The Revenue Reconciliation Act of 1993 (including provision
for the adjustments of the annual compensation limit, excluding
all amounts due to the exercising of stock options on behalf of
the Employee and excluding deferred compensation under a Deferred
Compensation Employment contract), over the Section 401(a)(17)
limit in effect for such plan year. In no event shall Excess
Compensation be less than zero.
1.11 "Equalization Account" shall refer to benefits related
to the Savings Plan and the ESOP. Each plan year beginning
January 1, 1994 and continuing for the term of this agreement,
the equalization account shall be credited with the sum of (a)
and (b) below:
(a) With respect to the Savings Plan, a percentage shall be
determined each year equal to the 401(k) deferral percentage for
the Employee, multiplied by 25%. In no event shall such
percentage exceed the employer matching percentage multiplied by
the maximum percentage of compensation which is subject to
matching in that year (e.g. 25% x 6.0% = 1.5%). Such
percentage shall be multiplied by the Employee's Excess
Compensation to determine the equalization credit for that year.
(b) With respect to the ESOP, a percentage shall be
determined each year equal to the contributions and forfeitures
allocated to the Employee under the ESOP for the plan year,
divided by the Employee's compensation (as limited by Code
Section 401(a)(17)) for that year. Such percentage shall be
multiplied by the Employee's Excess Compensation to determine the
equalization credit for that year.
1.12 "Beneficiary" shall mean any person or trust, or
combination thereof, last designated as provided in this
Agreement to receive the Payment, or any part thereof, following
the death of the Employee.
1.13 "Compensation Committee" shall mean the individual or
individuals appointed by the Board of Directors of the Bank to
administer this Agreement. Each individual appointed will serve
until the earlier of his resignation of the position or his
removal by the Board of Directors. In the absence of such
appointment, the Board of Directors shall constitute the
Compensation Committee.
1.14 "Actuarial Equivalent" shall mean a form of benefit
differing in time, period or manner of payment from a specified
benefit but having the same value. Actuarial Equivalent benefits
shall be determined based on the following mortality and interest
assumptions:
Mortality table: UP-1984
Interest rate: 7.0%
In the event of any inconsistency between the definitions in
this Article and the definitions in the Plans which are
incorporated by reference in this Agreement, the provisions of
this Agreement shall control.
ARTICLE II
General Provisions
2.01 The Bank will pay to the Employee the Payment in the
amount, at the times, and in the form specified in this
Agreement.
2.02 The Bank and the Employee intend the Payment to
coordinate with the benefits payable to the Employee under the
Plans. The terms and conditions of the Payment will be determined
by the Compensation Committee. The Compensation Committee shall
make its determinations by reference to the Plans in a manner
consistent with this Agreement.
ARTICLE III
Payment Amount
3.01 The Payment shall be the sum of (a) and (b) below:
(a) With respect to the Pension Plan, the excess, if any, of
the 93 Compensation Benefit over the Reduced Compensation
Benefit.
(b) With respect to the Savings Plan and the ESOP, the
accumulated credits in the Employee's Equalization Account, if
any.
3.02 The Payment shall be zero if, before the Employee
attains age 65, the Employee's employment with the Bank
terminates, whether voluntarily or involuntarily, for any reason
other than the Employee's death or disability. Notwithstanding
the preceding sentence the Compensation Committee may, in its
sole discretion, permit the Payment to be paid upon early
retirement or termination after the Employee reaches the age of
55.
ARTICLE IV
Form of Payment
4.01 The Payment shall be paid in such form (i.e., single
sum or 10 equal annual installments) as the Compensation
Committee shall, in its sole discretion, determine after
consideration of both the situation of the Employee and the
interests of the Bank.
4.02 Each form of the Payment considered by the Compensation
Committee, for purposes of this Agreement and regardless of any
contrary provision in the Plan, shall be the Actuarial Equivalent
of each other form of the Payment.
4.03 Should the Compensation Committee fail to select the
form of the Payment prior to the time specified in Article V for
commencement of the Payment, subject to the provisions of Section
4.01 hereof, the Payment will be made at the times specified in
this Agreement in 10 equal annual installments.
ARTICLE V
Time of Payment
5.01 The time for commencement of any Payment shall be
determined by the reason for commencement and shall be determined
consistently with the terms and conditions of the Pension Plan.
5.02 The Payment made under this Agreement on account of
normal retirement shall be made over the time period determined
by the form of the Payment. The Payment hereunder will
commence at the time that the Employee's normal or late
retirement benefits under the Pension Plan would commence. The
Compensation Committee may, in its sole discretion, defer
commencement of the Payment until no later than January of the
year following retirement.
By way of example and not of limitation, if the form of the
Payment is 10 equal annual installments, such installments of the
Payment will be made at the same time each year.
5.03 If the Payment commences as a result of the disability
(as defined under the Pension Plan) of the Employee, the Payment
will commence at the same time that benefits under the Pension
Plan payable on account of the disability of the Employee would
commence.
5.04 If the Payment commences as a result of the death of
the Employee, the Payment will commence at the same time that
benefits under the Pension Plan payable on account of the death
of the Employee would commence.
ARTICLE VI
Other Provisions
6.01 The Bank may establish, solely for accounting purposes
and not for the purpose of creating a fund or reserve for the
payment of amount hereunder, an unfunded account entry in the
name of the Employee, in order to record the amount of the
Payment credit. The amount of the Payment credit unpaid under
this Agreement may be credited to the Employee's account at the
times corresponding to the actuarial valuations of the Plans.
From the effective date of this Agreement, any Payment so
credited shall be credited to the account of the Employee only
for accounting purposes. Such account will be adjusted
periodically in a manner consistent with the terms and conditions
of this Agreement, the Plans, and the actuarial assumptions
applied to this Agreement.
6.02 The Payment, or any portion thereof, payable after the
death of the Employee shall be paid to the Employee's
Beneficiary. The Employee may designate the Beneficiary only by
the Employee's written designation on a form provided by the Bank
and filed with the Bank by the Employee during the Employee's
lifetime.
6.03 In the event the Employee fails to designate a
Beneficiary, the Beneficiary shall be the Employee's legal spouse
at the date of death. If there is no surviving spouse, the
Beneficiary shall be the person or trust, or combination thereof,
which the Employee designated in accordance with the Savings Plan
as the recipient of the benefits payable under the Savings Plan
as a result of the Employee's death. In the absence of a
designation by the Employee either pursuant to this Agreement or
in accordance with the Savings Plan, the Beneficiary shall be the
estate of the Employee.
6.04 If the Bank determines that the Employee (or the
Beneficiary, as the case may be) is unable to manage his affairs
due to illness, accident, or incapacity, the Payment shall be
made to the attorney-in-fact, guardian, or other legal
representative of the Employee (or the Beneficiary).
Any such payment shall completely discharge any liability of the
Bank under this Agreement.
6.05 The rights of the Employee, and his beneficiary, under
this Agreement shall be solely those of an unsecured creditor of
the Bank. If the Bank has or shall acquire any securities or
other property in connection with any liabilities created
hereunder, such securities or other property shall not be deemed
to be held in trust for the benefit of the Employee or his
beneficiary, or to be collateral security for the performance of
any obligation of the Bank, but shall be and remain as general,
unpledged, unrestricted assets of the Bank. The right to any
payments granted by this Agreement shall be reflected on the
Bank's books of accounts as a general, unsecured, and unfunded
obligation, and no trust in the Employee's favor is intended or
implied.
6.06 Neither the Employee nor any other payee hereunder
shall have any right to commute, sell, assign, transfer, encumber
or otherwise convey the right to receive the Payment hereunder.
The Payment and the right thereto are expressly declared to be
nonassignable and nontransferable and, in the event of any
attempted assignment or transfer, the Bank shall have no further
liability to any person by reason of this Agreement. In no event
for the purposes of this paragraph shall the designation of, or
the payment to, a Beneficiary hereunder be considered a
commutation, sale, assignment, transfer, or any other type of
conveyance by the Employee.
6.07 The Bank shall be entitled in its sole discretion to
withhold the amount of any tax attributable to any amount payable
or accrued hereunder, after giving notice to the person entitled
to receive such payment or accrual.
6.08 Nothing contained in this Agreement shall be
interpreted or construed to confer upon the Employee the right to
continue in the employment of the Bank in any capacity.
6.09 The Compensation Committee shall have complete power
and authority to interpret, construe, and administer this
Agreement. The interpretations, constructions and actions of the
Compensation Committee in connection with this Agreement,
including but not limited to the valuation of the Payment, the
determination of the amount of the Payment, and the determination
of the recipient of the Payment, shall be binding and conclusive
on all persons for all purposes, subject to review as provided by
Section 6.10. If the Employee is a member of the Compensation
Committee with respect to this Agreement as executed by and
between the Bank and other designated employees, he shall be
disqualified from participating in any Committee actions related
to himself. None of the Bank, its trustees, directors, officers,
employees, or agents, specifically including the members of the
Compensation Committee, shall be liable to any person for any act
or omission in connection with the interpretation, construction,
or administration of this Agreement, unless such act or omission
constitutes willful misconduct.
6.10 If the Employee believes an amount that has not been
paid is due under this Agreement, the Employee may submit a
written claim to the Compensation Committee. Within sixty (60)
days after the claim is submitted, the Compensation Committee
shall notify the Employee that the claim has been allowed or
denied, The Compensation Committee shall explain the specific
reasons for any denial. Within ninety (90) days of a denial, the
Employee may request review of the denial and submit his
arguments to the reviewer. The request shall be reviewed by
the Board of Directors of the Bank. Within thirty (30) days after
the review is requested, the decision shall be made and
communicated, together with the reasons for the decision, to the
Employee.
6.11 This Agreement shall be binding upon and shall inure to
the benefit of the successors and assigns of the Bank and of the
Employee, his heirs, and legal representatives.
6.12 The Bank and the Employee hereby agree that the Bank in
its sole discretion shall have the right to set off against any
payment to be made under this Agreement any amount owing, in the
sole opinion and discretion of the Bank, to the Bank by the
Employee, at the time of the payment. The set-off may be made in
the sole discretion of the Bank either in whole or in part
against any or all payments to be made hereunder, until the
amount owing to the Bank plus interest at the short-term
Applicable Federal Rate, if any, is zero.
6.13 In the event of any inconsistency between this
Agreement and any contract of employment between the Bank and the
Employee, whether such contract of employment predates or follows
the adoption of this Agreement, the provisions of this Agreement
shall control.
6.14 Neither the Bank nor any of its employees will be
liable for any tax or other liability that the Employee and/or
the Employee's Beneficiary may incur in connection with this
Agreement. The Employee agrees to rely upon legal counsel
selected by him to determine the actual tax consequences of this
Agreement for the Employee.
6.15 The Bank has the sole and absolute discretion to amend
or terminate this Agreement for any reason or no reason
whatsoever; provided, however, that the amendment or termination
may not decrease the amount of the Payment, except that the
amount of the Payment may decrease as a result of changes to
Section 401(a)(17) or Section 415 after the date of such
amendment or termination. Upon termination of this Agreement, the
amount of the Payment shall be fixed, except for adjustments due
to revisions to Section 401(a)(17) or Section 415 and shall be
paid by the Bank in the form selected by the Compensation
Committee upon the later of the commencement of the Employee's
benefits under the Pension Plan or the Employee's actual
retirement from the Bank. This Section shall survive the
termination of this Agreement.
6.16 This Agreement shall be construed and interpreted
according to the laws of the Commonwealth of Pennsylvania.
INTENDING TO BE LEGALLY BOUND, the Bank has caused this
Agreement to be executed by its duly authorized officers and the
Employee has hereunto set his hand and seal as of the first date
above written.
Date this ------ day of -------------------, 19--
XXXXXX SAVINGS BANK
------------------------------ ------------------------------
Attest
EMPLOYEE
------------------------------ ------------------------------
Witness
