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EXHIBIT 6(a)
EXECUTIVE
SALARY CONTINUATION
AGREEMENT
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TABLE OF CONTENTS
PAGE
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SECTION 1
DEFINITIONS
1.1 Administrative Committee...............................................................1
1.2 Age....................................................................................1
1.3 Change in Control......................................................................1
1.4 Crediting Rate.........................................................................2
1.5 Disability.............................................................................2
1.6 Discharge for Cause....................................................................2
1.7 Early Retirement Date..................................................................2
1.8 Final Average Compensation.............................................................2
1.9 Mortality Assumptions..................................................................3
1.10 Normal Retirement Date.................................................................3
1.11 Termination of Employment..............................................................3
1.12 Vesting................................................................................3
SECTION 2 ................................................................................3
ELIGIBILITY ................................................................................3
SECTION 3 ................................................................................3
PAYMENT OF BENEFITS......................................................................................3
3.1 Benefits Upon Normal Retirement........................................................3
3.2 Benefits Upon Early Retirement.........................................................4
3.3 Benefits Upon Late Retirement..........................................................4
3.4 Benefits Upon Disability...............................................................4
3.5 Other Terminations of Employment.......................................................4
(a) Voluntary Termination of Employment...........................................4
Prior to the Early Retirement Date or
Discharge for Cause at any Time
(b) Involuntary Termination of Employment.........................................5
Prior to the Early Retirement Date Other
Than Because of Death, Disability,
Discharge for Cause
(c) Termination of Employment At or After.........................................5
A Change in Ownership of Control
3.6 Survivorship Benefits..................................................................5
(a) Prior to Commencement of Normal or Early
Retirement Benefits...........................................................5
(b) After Commencement of Benefits................................................6
3.7 Recipients of Payments; Designation of Beneficiary.....................................6
3.8 Acceleration of Benefits...............................................................6
SECTION 4 ..............................................................................7
ADDITIONAL CHANGE IN CONTROL PROVISIONS..................................................................7
4.1 Application of Section.................................................................7
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4.2 Reduction of Payments..................................................................7
4.3 Determination by Experts...............................................................7
4.4 Participant's Costs of Enforcement.....................................................8
SECTION 5 .......................................................................................8
ADMINISTRATION AND INTERPRETATION OF
THIS AGREEMENT .......................................................................................8
SECTION 6 .......................................................................................8
CLAIMS PROCEDURE .......................................................................................8
SECTION 7 .......................................................................................8
REVIEW PROCEDURE .......................................................................................8
7.1 ........ ..............................................................................8
7.2 .......................................................................................9
SECTION 8 .......................................................................................9
LIFE INSURANCE AND FUNDING...............................................................................9
SECTION 9 ......................................................................................10
ASSIGNMENT OF BENEFITS..................................................................................10
SECTION 10 ......................................................................................10
EMPLOYMENT NOT GUARANTEED BY AGREEMENT..................................................................10
SECTION 11 ......................................................................................10
TAXES ......................................................................................10
SECTION 12 ......................................................................................10
AMENDMENT AND TERMINATION...............................................................................10
SECTION 13 ......................................................................................11
CONSTRUCTION ......................................................................................11
SECTION 14 ......................................................................................11
FORM OF COMMUNICATION...................................................................................11
SECTION 15 ......................................................................................11
CAPTIONS ......................................................................................11
SECTION 16 ......................................................................................11
SEVERABILITY ......................................................................................11
SECTION 17 ......................................................................................11
BINDING EFFECT ..................................................................................... 11
EXHIBIT A - VESTING SCHEDULE.................................................................................13
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THIS AGREEMENT is made this 21st day of August, 1997, between FIRST
NATIONAL BANK OF XXXXXXX, a national banking association (the "Bank") and XXXX
X. XXXXX (the "Participant").
WHEREAS, the Participant is an executive employee of the Bank; and
WHEREAS, the Bank wishes to establish this Agreement for purposes of
promoting in the Participant the strongest interest in the successful operation
of the Bank and increased efficiency in his work and to provide the Participant
benefits upon retirement, death, disability or other termination of employment,
in consideration of services to be performed after the date of this agreement
but prior to his retirement; and
NOW THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
SECTION 1
DEFINITIONS
1.1 ADMINISTRATIVE COMMITTEE - "Administrative Committee" shall mean
the committee appointed pursuant to Section 5 of this Agreement.
1.2 AGE - "Age" shall mean the age of the person as of the date of his
last birthday.
1.3 CHANGE IN CONTROL - For purposes of this Agreement, a Change in
Control of the Bank shall have occurred (1) on the fifth day preceding the
scheduled expiration date of a tender offer by, or exchange offer by any
corporation, person, other entity or group (other than the Bank or any of its
wholly owned subsidiaries), to acquire Voting Stock of the Bank if (a) after
giving effect to such offer such corporation, person, other entity or group
would own twenty-five percent (25%) or more of the Voting Stock of the Bank, (b)
there shall have been filed documents with the Securities and Exchange
Commission ("SEC") in connection therewith (or, if no such filing is required,
public evidence that the offer has already commenced), and (i) such corporation,
person, other entity or group has secured all required regulatory approvals to
own or control twenty-five percent (25%) or more of the Voting Stock of the
Bank, (ii) if the shareholders of the Bank approve a definitive agreement to
merge or consolidate the Bank with or into another corporation in a transaction
in which neither the Bank nor any of its wholly owned subsidiaries will be the
surviving corporation, or to sell or otherwise dispose of all or substantially
all of the Bank's assets to any corporation, person, other entity or group
(other than the Bank or any of its wholly owned subsidiaries), and such
definitive agreement is consummated; (iii) if any corporation, person, other
entity or group (other than the Bank of any of its wholly owned subsidiaries)
becomes the Beneficial Owner of stock representing twenty-five percent (25%) or
more of the Voting Stock of the Bank, or (iv) if during any period of two (2)
consecutive years Continuing Directors cease to comprise a majority of the
Bank's Board of Directors. The term "Continuing Director" means (1) any member
of the Board of Directors of the Bank who was a member of the Board of Directors
of the Bank at the beginning of any
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period of two (2) consecutive years, and (ii) any person who subsequently
becomes a member of the Board of Directors of the Bank, if (a) such person's
nomination for election or election to the Board of Directors of the Bank is
recommended or approved by resolution of a majority of the Continuing Directors,
or (b) such person is included as a nominee in a proxy statement of the Bank
distributed when a majority of the Board of Directors of the Bank consists of
Continuing Directors. For purposes of this Agreement, "Voting Stock" shall mean
those shares of the Bank entitled to vote generally in the election of
directors.
1.4 CREDITING RATE - "Crediting Rate" shall mean an annual rate of
interest equal to 7.5%.
1.5 DISABILITY - "Disability" shall mean, if the Participant is insured
under the Bank long term disability policy, the definition of total disability
contained in the long term disability insurance policy.
1.6 DISCHARGE FOR CAUSE - The Bank may terminate the Participant's
employment under this Agreement for "Cause". For purposes of this Agreement, a
termination for Cause is a termination by reason of the Board's good faith
determination that the Participant (i) is incompetent or acted dishonestly or
engaged in willful misconduct in the performance of his duties; (ii) breached a
fiduciary duty to the Bank for personal profit to himself; (iii) intentionally
failed to perform reasonably assigned duties; (iv) willfully violated any law,
rule or regulation (other than traffic violations or similar offenses) or any
final cease and desist order; or (v) materially breached this Agreement. No act,
or failure to act, on the Participant's part shall be considered "willful"
unless he has acted, or failed to act, with an absence of good faith and without
a reasonable belief that his action or failure to act was in the best interest
of the Bank. Notwithstanding the foregoing, (i) the Participant shall not be
deemed to have been terminated for Cause unless there shall have been delivered
to the Participant a copy of a resolution duly adopted by the affirmative vote
of not less than a majority of the entire membership of the Board at a meeting
of the Board called and held for the purpose (after reasonable notice to the
Participant and an opportunity for the Participant, together with his counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board the Participant was guilty of conduct set forth above in the second
sentence of this Section and specifying the particulars thereof in detail, and
(ii) in no event will the Participant be subject to termination for Cause
pursuant to clause (v) above unless the Participant shall have failed to cure,
correct or prevent the alleged breach within thirty days after such resolution
has been delivered to the Participant.
1.7 EARLY RETIREMENT DATE - "Early Retirement Date" shall mean the
first day of the month following the month in which a Participant reaches age
60.
1.8 FINAL AVERAGE COMPENSATION - "Final Average Compensation" shall
mean the Participant's Average Compensation paid by the Bank, as reported on
Form W-2 for the three consecutive years of employment with the Bank, that
produce the highest average.
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1.9 MORTALITY ASSUMPTIONS - "Mortality Assumptions" shall mean the life
expectancy of a Participant, determined by applying The Standard Commissioners
Ordinary Mortality Table.
1.10 NORMAL RETIREMENT DATE - "Normal Retirement Date" shall mean the
first day of the month following the month in which a Participant reaches age
65.
1.11 TERMINATION OF EMPLOYMENT - "Termination of Employment" shall mean
the Participant's ceasing to be employed by the Bank for any reason whatsoever,
voluntary or involuntary, including by reason of death or disability.
1.12 VESTING - For the purpose of this Agreement and the vesting
schedule attached as Exhibit A, vesting shall accrue to the Participant on a pro
rata monthly basis beginning annually on each anniversary date of this
Agreement. The Participant shall earn 1/12th of the annual vesting increased for
each month of completed service during each year of this Agreement. Regardless
of the number of years of service completed by the Participant, upon a Change in
Control, the Participant shall become 100% vested in all benefits under this
Agreement.
SECTION 2
ELIGIBILITY
Participant is eligible for the benefits provided herein in accordance
with the terms of this Agreement upon the execution hereof.
A Participant shall cease to be a Participant at Termination of
Employment. However, the employment of a Participant shall not be deemed to be
terminated by reason of an approved leave of absence granted in accordance with
uniform rules applied in a non-discriminatory manner.
SECTION 3
PAYMENT OF BENEFITS
3.1 BENEFITS UPON NORMAL RETIREMENT.
Upon a Participant's Termination of Employment on or after the Normal
Retirement Date, the Bank shall pay to the Participant the sum of $49,100 per
year, payable in monthly installments of $4,091.66 each, commencing on the first
day of the month coincident with or next following the date of Termination of
Employment and continuing on the first day of each month thereafter for a period
of 15 years, but in any event until a minimum of 180 total monthly payments are
made to the Participant or the Participant's beneficiary per Section 3.6(b).
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3.2 BENEFIT UPON EARLY RETIREMENT.
Upon a Participant's Termination of Employment on or after reaching the
Early Retirement Date, but prior to his Normal Retirement Date, the Bank shall
pay to the Participant monthly payments equal to the present value of the
monthly benefit described in Section 3.1, assuming a discount rate equal to the
Crediting Rate and the Mortality Assumptions.
The Participant may elect, on or before the earlier of a) December 31
of the year prior to Termination of Employment; or b) 90 days prior to
Termination of Employment, to defer commencement of payment of the retirement
benefit to a date not later than the Normal Retirement Date. Such election shall
be in writing and submitted to the Bank. If a Participant elects to defer
payments of the benefit until his Normal Retirement Date, the Bank shall pay to
the Participant the normal retirement benefit described in Section 3.1 above. If
a Participant elects to defer payment of the benefit to a date prior to the
Normal Retirement Date, the Bank shall pay to the Participant a benefit
calculated in accordance with the first sentence of this Section 3.2, but using
the date selected by the Participant for the commencement of this benefit as his
"Termination of Employment" date instead of his actual termination date.
3.3 BENEFITS UPON LATE RETIREMENT.
Upon a Participant's Termination of Employment after the Normal
Retirement Date, the Bank shall pay to the Participant the normal retirement
benefit described in Section 3.1 above, increased by .05 per year or .00416 for
each month that the Participant's Termination of Employment is deferred beyond
the Normal Retirement Date, in equal monthly installments commencing on the
first day of the month coincident with or next following the date of Termination
of Employment and continuing on the first day of each month thereafter for the
periods specified in Section 3.1.
3.4 BENEFITS UPON DISABILITY.
Upon a Participant's Termination of Employment prior to the Normal
Retirement Date due to Disability, no separate provision is made for a
disability benefit under this Agreement. However, any such Participant shall be
considered, notwithstanding such Termination of Employment, to continue to be a
Participant while disabled and for so long as the disability continues prior to
reaching the Early Retirement Date, such Participant's beneficiary shall receive
the survivor's benefits described in Section 3.6(a). In the event the
Participant lives to the Early Retirement Date, the Participant shall be
entitled to receive the early retirement benefit described in Section 3.2.
3.5 OTHER TERMINATIONS OF EMPLOYMENT.
(a) Voluntary Termination of Employment Prior to the Early
Retirement Date or Discharge for Cause at any Time. Upon a
Participant's voluntary Termination of
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Employment prior to reaching the Early Retirement Date, for reasons
other than death or Disability, or upon the Participant's Discharge for
Cause at any time, the Bank shall not be required to pay any benefit to
the Participant, and the Participant shall have no further right to
receive any additional benefit hereunder.
(b) Involuntary Termination of Employment Prior to the Early
Retirement Date Other Than Because of Death, Disability or Discharge
for Cause. Upon a Participant's involuntary Termination of Employment
prior to reaching the Early Retirement Date, for reasons other than
death, disability or discharge for cause, the Bank shall pay to the
Participant as compensation for services rendered prior to such
Termination of Employment, the vested "Immediate Annual Benefit" or the
vested "Annual Benefit at Age 65" as defined in Schedule A, payable in
monthly installments, commencing on the first day of the month
coincident with or next following the date of Termination of
Employment, or Age 65 and continuing on the first day of each month
thereafter for a period of fifteen years. For purposes of this
subsection 3.5(b), the Participant shall be deemed to have incurred an
Involuntary Termination of Employment covered by this subsection if he
quits employment as a result of the Bank's significantly lessening
either his title, duties, responsibilities, compensation or altering
his situs of employment, without his consent. His compensation shall be
deemed to be significantly lessened if any cutback is imposed except as
a part of an overall cutback applied proportionately to all of the
Bank's management employees or if the Participant fails to receive
periodic increases substantially proportionate to and coincident with
the increase granted to management employees.
(c) Termination of Employment At or After A Change in
Ownership and Control. If a Participant incurs a voluntary or
involuntary Termination of Employment prior to reaching the Early
Retirement Date, for reasons other than death, disability, or discharge
for cause, but on or after the occurrence of a Change in Control, and
in connection with such change, the Participant's title, duties,
responsibilities, or compensation is significantly lessened or his
situs of employment is changed, without his consent, the Bank shall pay
to the Participant, the greater of a) the sum of 100% of the
Participant's gross annual salary for the twelve-month period prior to
Termination, payable in monthly installments, commencing on the first
day of each month thereafter for a period of three (3) years, but in
any event until a minimum of thirty-six (36) total monthly payments are
made to the Participant or the Participant's beneficiary per Section
3.6(b); or b) the immediate lump sum or immediate annual benefit on
Schedule A. For purposes hereof, the standards set forth in
subparagraph (b) above with respect to what constitutes a significant
lessening of compensation shall apply.
3.6 SURVIVORSHIP BENEFITS.
(a) Prior to Commencement of Normal or Early Retirement
Benefits. If a Participant dies while in the service of the Bank or
after a Termination of Employment due to Disability and while Disabled
or after a Termination of Employment on or after
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the Early Retirement Date, but prior to commencement of any benefit
payments under this Agreement, the Bank shall pay to the Participant's
beneficiary a survivor's benefit of 180 equal monthly installments of
$4,091.66 commencing on the first day of the month after the
Participant's death and continuing on the first day of each month
thereafter until all such payments are completed. In the event a
beneficiary dies before receiving all of the survivor's benefit
payments, the remaining payments shall be paid to the legal
representatives of the beneficiary's estate. Payment of the survivor's
benefits shall relieve the Bank of the obligation to pay any other
benefit which the Participant would have otherwise received, under the
terms of this Agreement.
(b) After Commencement of Benefits. If a Participant dies
after any benefit payments have commenced, but prior to receiving all
of the scheduled minimal number of monthly payments, the Bank shall pay
the remaining monthly payment to the Participant's beneficiary. In the
event a beneficiary dies before receiving all of the remaining
payments, the remaining payments shall be paid to the legal
representatives of the beneficiary's estate.
3.7 RECIPIENTS OF PAYMENTS: DESIGNATION OF BENEFICIARY.
All payments to be made by the Bank shall be made to the
Participant, if living. In the event of a Participant's death prior to the
receipt of all benefit payments, all subsequent payments to be made under this
Agreement shall be to the beneficiary or beneficiaries of the Participant. The
Participant shall designate a beneficiary by filing a written notice of such
designation with the Bank in such form as the Bank may prescribe. The
Participant may revoke or modify said designation at any time by a further
written designation. The Participant's beneficiary designation shall be deemed
automatically revoked in the event of the death of the beneficiary, or if the
beneficiary is the Participant's spouse, in the event of dissolution of
marriage. If no designation shall be in effect at the time of any benefits
payable under this Agreement shall become due, the beneficiary shall be the
spouse of the Participant, or if no spouse is then living, the legal
representatives of the Participant's estate.
3.8 ACCELERATION OF BENEFITS.
At any time after the Participant or the Participant's
beneficiary becomes entitled to a payment of benefits under this Agreement, the
Participant, or the Participant's beneficiary may elect to accelerate the
payments of benefits to the payment of a lump-sum payment. Such payment shall
equal ninety percent (90%) of the present value of the remaining payments
payable assuming a discount rate equal to the Crediting Rate.
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SECTION 4
ADDITIONAL CHANGE IN CONTROL PROVISIONS
4.1 APPLICATION OF SECTION.
If the Participant receives payments under this Agreement that
are contingent upon a Change in Control, as determined under Section 280G of the
Internal Revenue Code of 1986 (the "Code") and the regulations thereunder, then
the provisions of this Section 4 shall apply.
4.2 REDUCTION OF PAYMENTS.
If payments or benefits under this Agreement, after taking
into account, all other payments or benefits to which the Participant is
entitled from the Bank, are expected to result in an excise tax on the
Participant or the loss of certain tax deductions by the Bank by reason of
Sections 280G and 4999 of the Internal Revenue Code of 1986 or any successor
provisions to those Sections, payments under this Agreement shall be reduced by
the least amount required to avoid such excise tax and loss of deductions unless
the failure to reduce such salary payments would be financially beneficial to
the Participant. The failure to reduce such salary payments will be financially
beneficial to the Participant if it results in an after-tax value to the
Participant of all payments and benefits referenced in the preceding sentence,
despite the application of the excise tax and income tax, which value is greater
than the after-tax value the Participant would realize if salary payments were
reduced to avoid the application of the excise tax.
4.3 DETERMINATION BY EXPERTS.
If the Participant and the Bank shall disagree as to whether a
payment under this Agreement could result in the loss of a deduction, the matter
shall be resolved by an opinion of the Bank's general legal counsel, or if the
Bank's general legal counsel is unable to provide such an opinion, counsel
selected by the Bank and agreed to by the Participant. Counsel's opinion need
not be unqualified. Counsel's opinion shall be based on determinations of the
Base Amount and Excess Parachute Payments, as such terms are defined by Section
280G of the Code or its successor, by the Bank's outside auditing firm, or if
the Bank's outside auditing firm is unable to make such determinations, a
consulting firm chosen by the Bank and agreed to by the Participant. The Bank
shall pay the fees and expenses of such counsel and consulting firm, and shall
make available such information as may be reasonably requested by such counsel
and consulting firm to prepare the opinion. If the maximum amount payable to the
Participant pursuant to this Section cannot be determined prior to the due date
for such payment, the Bank shall pay the remaining amount as soon as practicable
after such remaining amount is determined.
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4.4 PARTICIPANT'S COSTS OF ENFORCEMENT.
Following a Change in Control, the Bank shall pay all
reasonable expenses of the Participant, including but not limited to reasonable
attorney fees incurred in enforcing payments by the Bank pursuant to this
Agreement.
SECTION 5
ADMINISTRATION AND INTERPRETATION OF THIS AGREEMENT
The Board of Directors shall appoint an Administrative Committee
consisting of three (3) or more outside directors to administer and interpret
this Agreement. The Bank and the Participant expressly agree that the
interpretation by the Administrative Committee shall e final and binding upon a
Participant. The Administrative Committee may adopt rules and regulations
relating to this Agreement as it may deem necessary or advisable for the
administration thereof.
SECTION 6
CLAIMS PROCEDURE
If the Participant or the Participant's beneficiary (hereinafter
referred to as a "Claimant") is denied all or a portion of an expected benefit
under this Plan for any reason, he or she may file a claim with the
Administrative Committee. The Administrative Committee shall notify the Claimant
within sixty (60) days of allowance or denial of the claim, unless the Claimant
receives written notice from the Administrative Committee prior to the end of
the sixty (60) day period stating that special circumstances requires an
extension of the time for decision. The notice of the Administrative Committee's
decision shall be in writing, sent by mail to Claimant's last known address,
and, if a denial of the claim, must contain the following information:
(a) the specific reasons for the denial;
(b) specific reference to pertinent provisions of the
Plan on which the denial is based; and
(c) if applicable, a description of any additional
information or material necessary to perfect the
claim, an explanation of why such information or
material is necessary, and an explanation of the
claims review procedure.
SECTION 7
REVIEW PROCEDURE
7.1 A Claimant is entitled to request a review of any denial of his
claim by the Administrative Committee. The request for review must be submitted
in writing within a sixty
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(60) day period, the claim will be deemed to be conclusively denied. The
Claimant or his representative shall be entitled to review all pertinent
documents, and to submit issues and comments orally and in writing.
7.2 If the request for review by a Claimant concerns the interpretation
and application of the provisions of the Agreement and the Bank's obligations,
then the review shall be conducted by a separate committee consisting of three
persons who may or may not be members of the Board designated or appointed by
the Administrative Committee. The separate committee shall afford the Claimant a
hearing and the opportunity to review all pertinent documents and submit issues
and comments orally and in writing and shall render a review decision in
writing, all within sixty (60) days after receipt of a request or a review,
provided that, in special circumstances (such as the necessity of holding a
hearing) the committee may extend the time for decision by not more than sixty
(60) days upon written notice to the Claimant. The Claimant shall receive
written notice of the separate committee's review decision, together with
specific reasons for the decision and reference to the pertinent provisions of
this Agreement.
SECTION 8
LIFE INSURANCE AND FUNDING
The Bank in its discretion may apply for and procure as owner and for
its own benefit, insurance on the life of the Participant, in such amounts and
in such forms as the Bank may choose. The Participant shall have no interest
whatsoever in any such policy or policies, but at the request of the Bank he
shall submit to medical examinations and supply such information and execute
such documents as may be required by the insurance Bank or companies to whom the
Bank has applied for insurance.
The rights of the Participant, or his beneficiary, or estate, to
benefits under the Plan shall be solely those of an unsecured creditor of the
Bank. Any insurance policy or other assets acquired by or held by the Bank in
connection with the liabilities assumed by it pursuant to the Plan shall not be
deemed to be held under any trust for the benefit of the Participant, his
beneficiary, or his estate, or to be security for the performance of the
obligations of the Bank but shall be, in remain, a general, unpledged, and
unrestricted asset of the Bank.
If this Agreement is funded through insurance on the life of the
Participant, then in the event of such Participant's death during the first two
(2) years after the effective date of this Agreement, and if such Participant's
death was a result of suicide or if such Participant made any material
misstatement or failed to make a material disclosure of information in any
documentation which the Participant is requested to complete in connection with
this Agreement, then no death benefits under the terms of this Agreement will be
payable, unless and to the extent that the Board of Directors of Bank, in their
absolute discretion, may otherwise determine.
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SECTION 9
ASSIGNMENT OF BENEFITS
Neither the Participant nor any other beneficiary under the Plan shall
have the right to assign the right to receive any benefits hereunder and in the
event of any attempted assignment or transfer, the Bank shall have no further
liability hereunder.
SECTION 10
EMPLOYMENT NOT GUARANTEED BY AGREEMENT
Neither this Agreement nor any action taken in anticipation of or under
this Agreement shall be construed as giving the Participant the right to be
retained as an Executive Employee or as an employee of the Bank for any period.
SECTION 11
TAXES
The Bank shall deduct from all payments made hereunder all applicable
federal or state taxes required by law to be withheld from such payments. In the
event that the Bank determines that benefits under the Plan are subject to FICA
currently, the Bank shall withhold the Participant's portion of FICA from such
other amounts payable to the Participant as the Bank deems appropriate (will
include amounts upon vesting).
SECTION 12
AMENDMENT AND TERMINATION
The Board of Directors may, at any time, amend or terminate this
Agreement, provided that the Board may not reduce or modify any benefit in pay
status to the Participant or beneficiary hereunder or any benefit that would
become payable hereunder if the Participant were to have died or were to have
been involuntarily terminated under Section 3.5(b) hereof on the date prior to
such action by the Board, without the prior written consent of the Participant.
The Bank is entering into this Agreement upon the assumption that
certain existing tax laws will continue in effect in substantially their current
form. In the event of any changes in Federal law relating to and allowing the
tax-free accumulation of earnings within a life insurance policy, the income tax
free payment of proceeds from life insurance policies or any other law which
would result in a material adverse impact upon the Bank's ability to perform its
obligations under this Agreement, the Bank shall have an option to terminate or
modify this Agreement subject to the protection afforded Participant's in the
preceding paragraph above.
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SECTION 13
CONSTRUCTION
This Agreement shall be construed according to the laws of the State of
Michigan.
SECTION 14
FORM OF COMMUNICATION
Any election, application, claim, notice or other communication
required or permitted to be made by the Participant to the Bank shall be made in
writing and in such form as the Bank shall prescribe. Such communication shall
be effective upon mailing, if sent by first class mail, postage prepaid, and
addressed to the Bank's main office at 000 Xxxx Xxxx Xxxxxx, X.X. Xxx 000,
Xxxxxxx, Xxxxxxxx 00000.
SECTION 15
CAPTIONS
The captions at the head of a section or a paragraph of this Agreement
are designed for convenience of reference only and are not to be resorted to for
the purpose of interpreting any provision of this Agreement.
SECTION 16
SEVERABILITY
The invalidity of any portion of this Agreement shall not invalidate
the remainder thereof, and said reminder shall continue in full force and
effect.
SECTION 17
BINDING EFFECT
This Agreement shall be binding upon all and shall inure to the benefit
of the Bank and its successors and assigns; and upon the Participant, and his
successors, heirs, beneficiaries and personal representatives. No sale of
substantially all of the Bank's assets shall be made without the buyer expressly
assuming the obligation of this Agreement. The Bank further agrees that it will
not be a party to any merger, consolidation or reorganization unless and until
its obligations hereunder are expressly assumed by the successor or successors.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first set forth above.
FIRST NATIONAL BANK OF XXXXXXX
/s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxx
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XXXX X. XXXXX by:
Its: Chairman
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EXHIBIT A
VESTING SCHEDULE
YEAR PERCENTAGE VESTED
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1 0%
2 20%
3 20%
4 20%
5 20%
6 20%
-------
100%
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