Exhibit 10.4
RIDGESTONE BANK
EXECUTIVE INCENTIVE RETIREMENT AGREEMENT
THIS AGREEMENT is made this 20th day of October, 1998, by and between
Ridgestone Bank, a state commercial bank, located in Brookfield, Wisconsin (the
"Company"), and _______________________ (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide to the Executive a deferred incentive opportunity.
The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Cause" means (i) the willful and continued failure by Executive
to substantially perform Executive's duties with the Company (other than a
failure resulting from Executive's incapacity due to Disability or physical
or mental illness) after a written demand for substantial performance is
delivered to Executive by the Company, which demand specifically identifies
the manner in which the Company believes that Executive has not
substantially performed Executive's duties; (ii) any willful act of
misconduct by Executive which is injurious to the Company, monetarily or
otherwise; (iii) criminal conviction of Executive for any act involving
dishonesty, breach of trust or a violation of the banking laws of the State
of Wisconsin or the United State; (iv) criminal conviction of Executive for
the commission of any felony; or (v) final action by a bank regulatory
agency prohibiting Executive from participating in the affairs of
Ridgestone Bank. For purposes of this definition, no act, or failure to act
on Executive's part shall be deemed "willful" unless done or admitted to be
done by Executive not in good faith and without reasonable belief that the
action or omission was in the best interest of the Company.
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1.1.2 "Change of Control" means the date that, as a result of a
transaction or series of transactions (i) any person (other than a member
of Executive's immediate family) acting in concert, becomes the beneficial
owner, directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the then outstanding securities
of the Company; (ii) the Company is combined (by merger, share exchange,
consolidation, or otherwise) with another entity and as a result of such
combination less than 75% of the outstanding securities of the surviving or
resulting corporation are owned in the aggregate by the former shareholders
of the Company; or (iii) the Company sells, leases, or otherwise transfers
all or substantially all of the properties or assets of the Company not in
the ordinary course of business to another person or entity. Executive's
immediate family is Executives children and spouse.
1.1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.1.4 "Disability" means, if the Executive is covered by a Company
sponsored disability policy, total disability as defined in such policy
without regard to any waiting period. In the event there is no such
disability policy, Disability shall mean Executive's inability, as a result
of physical or mental incapacity, to substantially perform Executive's
duties with the Company for a period of six (6) consecutive months. Any
question as to the existence of Executive's Disability upon which Executive
and the company cannot agree shall be determined by a qualified independent
physician mutually agreeable to Executive and the Company or, if the
parties are unable to agree upon a physician within 10 days after notice
from the Company or Executive to the other suggesting a physician, by a
physician designated by the then president of the medical society for the
county in which Executive maintains his principal residence, upon the
request of either party. Costs of any such medical examination shall be
paid by the Company.
1.1.5 "Early Termination" means the Termination of Employment before
Normal Retirement Age for reasons other than death, Disability, Termination
for Cause or following a Change of Control.
1.1.6 "Early Termination Date" means the month, day and year in which
Early Termination occurs.
1.1.7 "Normal Retirement Age" means the Executive's 65th birthday.
1.1.8 "Normal Retirement Date" means the later of the Normal
Retirement Age or Termination of Employment.
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1.1.9 "Plan Year" means a twelve-month period commencing on January
and ending on December of each year. The initial Plan Year shall commence
on the effective date of this Agreement.
1.1.10 "Termination of Employment" means that the Executive ceases to
be employed by the Company for any reason whatsoever other than by reason
of a leave of absence which is approved by the Company. For purposes of
this Agreement, if there is a dispute over the employment status of the
Executive or the date of the Executive's Termination of Employment, the
Company shall have the sole and absolute right to decide the dispute.
1.1.11 "Unforeseeable Financial Emergency" means a severe financial
hardship to the Executive resulting from (i) a sudden and unexpected
illness or accident of the Executive or a dependent (as defined in section
152 of the Code) of the Executive; (ii) loss of the Executive's property
due to casualty; or (iii) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Executive.
Article 2
Incentive
2.1 Incentive Award. On December 31 of each Plan Year, the Company shall
credit to the Deferral Account the Executive's Incentive Award for such year.
The Incentive Award shall be an amount equal to ____ percent of the Executive's
beginning annual base salary, which shall be $_________ for the first Plan Year
and shall increase each Plan Year thereafter by four percent. Notwithstanding
the foregoing, the Incentive Award is subject to change at the sole discretion
of the Board.
Article 3
Deferral Account
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Executive, and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Incentive Deferral as determined under Article 2.
3.1.2 Interest. The Interest as set forth in Schedule A.
3.2 Statement of Accounts. The Company shall provide to the Executive, by
April 1 of each plan year this Agreement is in effect, a statement setting forth
the Deferral Account balance.
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3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Executive is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Executive's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Executive's creditors.
Article 4
Termination Benefits
4.1 Normal Retirement Benefit. If the Executive terminates employment on or
after the Normal Retirement Age for reasons other than death, the Company shall
pay to the Executive the benefit described in this Section 4.1 in lieu of any
other benefit under this Agreement.
4.1.1 Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Executive's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in 12 equal monthly installments commencing on the first day of
the month following the Executive's Normal Retirement Date and continuing
for the life of the Executive, but in any event, until a total of 179
additional monthly payments have been made to the Executive or to the
Executive's beneficiary. The Company shall credit interest at the annual
rate of 8.5%, compounded monthly, on the remaining account balance during
any applicable installment period.
4.2 Early Termination Benefit. If the Executive terminates employment
before the Normal Retirement Age, and for reasons other than death or
Disability, the Company shall pay to the Executive the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement .
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Executive's Termination of Employment.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the first day of
the month following the Executive's Termination of Employment. The Company
shall credit interest at the annual rate of 8.5%, compounded monthly, on
the remaining account balance during any applicable installment period.
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4.3 Disability Benefit. If the Executive terminates employment for
Disability prior to the Normal Retirement Age, the Company shall pay to the
Executive the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at Termination of Employment.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the first day of
the month following the Termination of Employment. The Company shall credit
interest at the annual rate of 8.5%, compounded monthly, on the remaining
account balance during any applicable installment period.
4.4 Change of Control Benefit. In the event that the Company terminate
Executive's employment (other than for Cause) within twelve months following a
Change of Control, the Company shall pay to the Executive the benefit described
in this Section 4.4 in lieu of any other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
Deferral Account balance at Termination of Employment.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 60 days after Termination of Employment.
4.5 Hardship Distribution. Upon the Company's determination (following
petition by the Executive) that the Executive has suffered an Unforeseeable
Financial Emergency, the Company shall distribute to the Executive all or a
portion of the Deferral Account balance as determined by the Company, but in no
event shall the distribution be greater than is necessary to relieve the
financial hardship, and shall not be paid to the extent such hardship is or may
be relieved (i) through reimbursement or compensation by insurance or otherwise,
or (ii) by liquidation of the Executive's assets, to the extent the liquidation
of such assets would itself not cause severe financial hardship.
Article 5
Death Benefits
5.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's beneficiary the
benefit described in the Split Dollar Agreement of even date herewith between
the Company and the Executive; provided, however, the Company shall not pay any
benefit under this Section 5.1 if the Executive has received any of the
Retirement Benefits under Article 4.
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5.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts that would have been paid
to the Executive had the Executive survived.
5.3 Death After Termination of Employment But Before Benefit Payments
Commence. If the Executive is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Executive's beneficiary that the Executive was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Executive's death.
5.4 Death of Beneficiary. In the event of the death of the beneficiary
prior to receipt of all amounts due under the terms of Section 5.1, 5.2 and 5.3,
the remaining balance of the Deferral Account shall be paid as a lump sum to the
beneficiary's estate as soon as practicable following the death of the
beneficiary.
Article 6
Beneficiaries
6.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.
6.1 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
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Article 7
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
7.1 Excess Parachute Payment. To the extent the benefit would create an
excise tax under the excess parachute rules of Section 280G of the Code.
7.2 Termination for Cause. If the Company terminates the Executive's
employment for Cause.
7.3 Suicide. If the Executive commits suicide within two years after the
date of this Agreement, or if the Executive has made any material misstatement
of fact on any application for life insurance purchased by the Company.
Article 8
Claims and Review Procedures
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against the Agreement (the "Claimant") in writing, within ninety
(90) days of Claimant's written application for benefits, of his or her
eligibility or noneligibility for benefits under the Agreement. If the Company
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the Claimant
to perfect his or her claim, and a description of why it is needed, and (4) an
explanation of the Agreement's claims review procedure and other appropriate
information as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Company determines that there are special circumstances
requiring additional time to make a decision, the Company shall notify the
Claimant of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to an additional ninety-day
period.
8.2 Review Procedure. If the Claimant is determined by the Company not to
be eligible for benefits, or if the Claimant believes that he or she is entitled
to greater or different benefits, the Claimant shall have the opportunity to
have such claim reviewed by the Company by filing a petition for review with the
Company within sixty (60) days after receipt of the notice issued by the
Company. Said petition shall state the specific reasons which the Claimant
believes entitle him or her to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Company of the petition, the Company
shall afford the Claimant (and counsel, if any) an opportunity to present his or
her position to the Company orally or in writing, and the Claimant (or counsel)
shall have the right to review the pertinent documents.
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The Company shall notify the Claimant of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the Claimant and the specific provisions
of the Agreement on which the decision is based. If, because of the need for a
hearing, the sixty-day period is not sufficient, the decision may be deferred
for up to another sixty-day period at the election of the Company, but notice of
this deferral shall be given to the Claimant.
Article 9
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive (or the Executive's beneficiary after
the Executive's death).
Article 10
Miscellaneous
10.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, successors or assigns,
administrators and transferees.
10.2 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
10.4 Reorganization. The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.5 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.6 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of Wisconsin, except to the extent preempted
by the laws of the United States of America.
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10.7 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
10.8 Recovery of Estate Taxes. If the Executive's gross estate for federal
estate tax purposes includes any amount determined by reference to and on
account of this Agreement, and if the beneficiary is other than the Executive's
estate, then the Executive's estate shall be entitled to recover from the
beneficiary receiving such benefit under the terms of the Agreement, an amount
by which the total estate tax due by the Executive's estate, exceeds the total
estate tax which would have been payable if the value of such benefit had not
been included in the Executive's gross estate. If there is more than one person
receiving such benefit, the right of recovery shall be against each such person.
In the event the beneficiary has a liability hereunder, the beneficiary may
petition the Company for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.
10.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
10.10 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:
10.10.1 Interpreting the provisions of the Agreement;
10.10.2 Establishing and revising the method of accounting for the
Agreement;
10.10.3 Maintaining a record of benefit payments; and
10.10.4 Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
10.11 Designated Fiduciary. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company shall be the named fiduciary
and plan administrator under the Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the
plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals.
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IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement.
EXECUTIVE: COMPANY:
RIDGESTONE BANK
_______________________________ By ___________________________________
Title ________________________________
