Exhibit 10.5
The NB&T Financial Group, Inc.
Supplemental Executive Retirement Plan
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (the "Participation Agreement") is entered
into as of this 19th day of November, 2002, by and between the NB&T Financial
Group, Inc. (the "Sponsor"), The National Bank and Trust Company (the
"Employer") and XXXXXXX X. XXXXXX an executive of the Employer (the
"Participant").
RECITALS:
WHEREAS, the Employer has adopted the ("Plan") effective as of August 20,
2002, and the Administrator has determined that the Participant shall be
eligible to participate in the Plan on the terms and conditions set forth in
this Participation Agreement and the Plan;
NOW, THEREFORE, in consideration of the foregoing and the agreements and
covenants set forth herein, the parties agree as follows:
1. Definitions. Except as otherwise provided, or unless the context
otherwise requires, the terms used in this Participation Agreement shall
have the same meanings as set forth in the Plan.
2. Incorporation of Plan. The Plan, a copy of which is attached hereto
as Exhibit A, is hereby incorporated into this Participation Agreement as
if fully set forth herein, and the parties hereby agree to be bound by all
of the terms and provisions contained in the Plan. The Participant hereby
acknowledges receipt of a copy of the Plan and confirms his understanding
and acceptance of all of the terms and conditions contained therein.
3. Effective Date of Participation. The effective date of the
Participant's participation in the Plan shall be November 19, 2002 (the
"Participation Date").
4. Normal Retirement Age. The Participant's Normal Retirement Age for
purposes of the Plan and this Participation Agreement is age fifty-five
(55).
5. Prohibition Against Funding. Should any investment be acquired in
connection with the liabilities assumed under this Plan and Participation
Agreement, it is expressly understood and agreed that the Participants and
Beneficiaries shall not have any right with respect to, or claim against,
such assets nor shall any such purchase be construed to create a trust of
any kind or a fiduciary relationship between the Employer and the
Participants, their Beneficiaries or any other person. Any such assets
shall be and remain a part of the general, unpledged, unrestricted assets
of the Employer, subject to the claims of its general creditors. It is the
express intention of the parties hereto that this arrangement shall be
unfunded for tax purposes and for purposes of Title I of ERISA. The
Participant shall be required to look to the provisions of the Plan and to
the Employer itself for enforcement of any and all benefits due under this
Participation Agreement and, to the extent the Participant acquires a right
to receive payment under the Plan and this Participation Agreement, such
right shall be no greater than the right of any unsecured general creditor
of the Employer. The Employer shall be designated the owner and beneficiary
of any investment acquired in connection with its obligation under the Plan
and this Participation Agreement.
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6. Provisions Related to SERP Benefit.
(a) Benefit. In the event the Participant has attained fifty-five
(55) years of age, on or prior to, the Participant's effective
date of Termination, such Participant shall be entitled to four
annual SERP Benefit payments of twenty five thousand dollars
($25,000).
Vesting. There will be no partial Vesting available to the
Participant. The Participant shall become 100% vested in the SERP
Benefit upon the occurrence of:
(1) Normal Retirement; or
(2) Change in Control.
Effect of Termination for Cause. A Participant who is
Terminated for Cause before his or her Termination will receive
no SERP Benefit under this Plan. A Participant who is Terminated
for Cause at or after his Normal Retirement Date will be entitled
to the amount described in Section 6(a) of this Participation.
Effect of Change in Control. (i) If a Change in Control
occurs before the Participant Terminates and before the
Participant reaches age fifty-five (55), he will be entitled to
receive [beginning at age fifty-five (55)] the benefit described
in Section 6(a) of this Participation Agreement as if he had been
age fifty-five (55) on the date of the Change in Control. This
amount will be paid as provided in Section 6(b) of this
Participation Agreement, applied as of the date the Participant
reaches age fifty-five (55). (ii) If a Change in Control occurs
before the Participant Terminates but after the Participant
reaches age fifty-five (55) he will be entitled to the benefit
described in Section 6(a) of this Participation. This amount will
be paid as provided in Section 6(b) of this Participation
Agreement, applied as of the date the Participant Terminates.
Effect of Parachute Excise Taxes. If the sum of the payments
provided in the preceding subsection and those provided under any
other plan, program or agreement between the Participant and any
Related Entity member constitute "excess parachute payments" as
defined in Code (S) 280G(b)(1), the Sponsor will reduce (or cause
the Employer to reduce) the Participant's SERP Benefits so that
his total "parachute payment" as defined in Code (S)
280G(b)(2)(A) under this and any all other agreements will be
$1.00 less than the amount that would be an "excess parachute
payment."
(b) Form of SERP Benefit Payment. The SERP Benefit will be paid
annually for a period of four (4) years beginning on the first
business day of the first calendar month of the first calendar
year that begins after the Participant Terminates.
(c) Post Termination Death Benefit. Participant's SERP Benefit shall
be payable to the Participant in annual installments for four (4)
years. In the event the Participant should die after payments
have commenced but before the fourth (4th) annual payment has
been made, the Participant's Beneficiary, as designated pursuant
to this Participation Agreement, shall be paid the balance of the
remaining annual SERP Benefit payments that would have been made
to the Participant had he lived, in equal annual installments.
Payments will cease upon the earlier of the Beneficiary's death
or payment of the fourth (4th) payment (determined by aggregating
all annual payments made to the Participant before his death and
those made to the Beneficiary after the Participant's death). No
SERP Benefits will be paid to any beneficiary of a Beneficiary.
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(d) Post-Normal Retirement (but Pre Termination) Death Benefit. In
the event the Participant dies prior to his Termination of
service but after attaining Normal Retirement Age, the
Participant's Beneficiary shall receive the SERP Benefit in
effect at the time of the Participant's death.
(e) Pre Termination Death Benefit. In the event the Participant dies
prior to his Termination but before attaining Normal Retirement
Age, the Participant's Beneficiary shall receive a SERP Benefit
calculated as if the Participant had reached age fifty-five (55)
on the day preceding his death.
7. Participant's Covenants.
(a) Covenant Not to Compete. Commencing on the date of Participant's
Termination with the Employer and all Affiliates (hereinafter
defined) and ending on the third anniversary thereof (the
"Restricted Competition Period"), Participant agrees that he
shall not, and shall not permit any of his Affiliates, alone,
together or in association with others, either as principal,
agent, owner, shareholder, officer, director, partner, lender,
investor, independent contractor, consultant or in any other
capacity, to engage in, have a financial interest in or be in any
way connected or affiliated with, or render advice or services to
any natural person, organization or entity of any type that
engages in any activity which would compete, in any way, in any
county in which a Related Entity has a branch or business
operation at the time of Participant's Termination of employment,
with the business operated by any Related Entity or conducting
the business of banking and providing other financial services.
For purposes of this subsection, an "Affiliate" of a person shall
mean (i) any natural person, organization or entity of any type
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, such
specified person; (ii) any relative or spouse of such person, or
any relative of such spouse, any one of whom has the same home as
such person; (iii) any trust or estate in which such person or
any of the persons specified in (ii) collectively own ten percent
or more of the total beneficial interest or of which any of such
persons serve as trustee, executor or in any similar capacity; or
(iv) any corporation or other organization in which such person
or any of the persons specified in (ii) are the beneficial owners
collectively of ten percent or more of any class of equity
securities or ten percent or more of the equity interest. For
purposes of the definition of the term "Affiliate," "control"
means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.
The Participant and each Related Entity agree that the value
to them of this Covenant Not to Compete is equal to three hundred
percent of the annualized gross compensation due to the
Participant at his rate of compensation as in effect immediately
before his Termination and that this amount has been included in
the SERP Benefit.
(b) Covenant Not to Solicit. During the Restricted Competition Period
[defined in Section 7(a)], Participant further agrees that he
will not, and will not permit any Affiliate [defined in Section
7(a)], directly or indirectly, to solicit, divert, take away or
interfere with, or attempt to solicit, divert, take away or
interfere with, the relationship of any Related Entity with any
person who is or was a customer, employee or supplier of any
Related Entity at any time during the period commencing two years
immediately prior to the date of this Participation Agreement and
ending upon the Participant's Termination.
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The Participant and each Related Entity agree that the value
to them of this Covenant Not to Solicit is equal to two hundred
percent of the annualized gross compensation due to the
Participant at his rate of compensation as in effect immediately
before his Termination and that this amount has been included in
the SERP Benefit.
(c) Interpretation of Covenants. The parties to this Participation
Agreement acknowledge and agree that the duration and area for
which the Covenant Not to Compete and the Covenant Not to Solicit
are to be effective are fair and reasonable and are reasonably
required for the protection of the business of the Related
Entities. In the event that any court or arbitrator determines
that the time period or the area, or both of them, are
unreasonable as to any covenant and that such covenant is to that
extent unenforceable, the parties hereto agree that the covenant
shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it
unenforceable. The parties intend that each covenant shall be
deemed to be a series of separate covenants, one for each and
every county of each and every state of the United States of
America and one for each and every political subdivision of each
and every other country in which the Covenant Not to compete or
other covenant is intended to be effective and is not proscribed
by law.
8. Beneficiary. Notwithstanding the definition of "Beneficiary" set forth
in the Plan, Beneficiary means the person to whom the Participant is legally
married on the date this Participation Agreement is signed ("Spouse"). If the
Participant's Spouse dies while the Participant is alive, no benefit will be
paid after the Participant's death whether or not the Participant subsequently
remarries and no person claiming through the Spouse or Participant will have any
rights under this Plan. Also, no benefits will be due to any beneficiary of a
Beneficiary.
IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement
to be executed as of the day first above written.
NB&T FINANCIAL GROUP, INC.
By:
---------------------------------
Title:
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PARTICIPANT: THE NATIONAL BANK AND TRUST COMPANY
Xxxxxxx X. Xxxxxx By:
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[Name of Participant]
Title:
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Signature of Participant
ATTESTED: ATTESTED:
By: By:
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Title: Title:
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