FORM OF
XXXXXXXX FEDERAL SAVINGS BANK
AMENDED AND RESTATED
DIRECTOR RETIREMENT AGREEMENT
THIS AGREEMENT is amended and restated in its entirety this 24th day of
December, 2003 by and between XXXXXXXX FEDERAL SAVINGS BANK (the "Bank"), and
[DIRECTOR] (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Bank's Board of
Directors, the Bank is willing to provide certain retirement benefits to the
Director. The Bank will pay the benefits from its general assets. This amended
and restated agreement incorporates the terms of the prior agreement and
clarifies the intent of certain provisions of the prior agreement.
AGREEMENT
The Director and the Bank 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 "CHANGE OF CONTROL" shall be deemed to occur on the
earliest of:
i. The acquisition by any entity, person or group (other
than the acquisition by a tax-qualified retirement plan
sponsored by the Company or the Bank) of beneficial
ownership, as that term is defined in Rule 13d-3 under
the Securities Exchange Act of 1934, of more than 25% of
the outstanding capital stock of the Company or the Bank
entitled to vote for the election of directors ("Voting
Stock");
ii. The commencement by any entity, person, or group (other
than the Company or the Bank, a subsidiary of the
Company or the Bank, or a tax-qualified retirement plan
sponsored by the Company or the Bank) of a tender offer
or an exchange offer for more than 25% of the
outstanding Voting Stock of the Company or the Bank;
iii. The effective time of (x) a merger or consolidation of
the Company or the Bank with one or more other
corporations as a result of which the holders of the
outstanding Voting Stock of the Company or the Bank
immediately prior to such merger exercise voting control
over less than 51% of the Voting Stock of the surviving
or resulting corporation, or (y) a transfer of
substantially all of the property of the Company or the
Bank other than to an entity of which the Company or the
Bank owns at least 51% of the Voting Stock; and
iv. At such time that, during any period of two (2)
consecutive years, individuals who at the beginning of such period
constitute the Board of the Company or the Bank (the "Continuing
Directors") cease for any reason to constitute at least two-thirds
thereof, provided that any individual whose election or nomination for
election as a member of the Board was approved by a vote of at least
two-thirds (2/3) of the Continuing Directors then in office shall be
considered a Continuing Director.
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1.1.2 "CODE" means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be to that
section as it now exists and to any successor provision.
1.1.3 "COMPANY" means Xxxxxxxx Financial Holdings, Inc., and
its successors.
1.1.4 "DISABILITY" means, if the Director is covered by a
Bank-sponsored disability insurance policy, total disability as defined
in such policy without regard to any waiting period. If the Director is
not covered by such a policy, Disability means the Director suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Bank, prevents the Director from performing
substantially all of the normal duties of a director. As a condition to
any benefits, the Bank may require the Director to submit to such
physical or mental evaluations and tests as the Bank's Board of
Directors deems appropriate.
1.1.5 "EARLY RETIREMENT DATE" means the Director attaining age
65 and completing 15 Years of Service.
1.1.6 "NORMAL RETIREMENT DATE" means the Director attaining
age 68 and completing 15 Years of Service.
1.1.7 "TERMINATION OF SERVICE" means the Director's ceasing to
be a member of the Bank's Board of Directors for any reason whatsoever.
1.1.8 "YEARS OF SERVICE" means the total number of
twelve-month periods during which the Director serves as a member of the
Bank's Board of Directors.
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ARTICLE 2
LIFETIME BENEFITS
2.1 NORMAL RETIREMENT BENEFIT. If the Director terminates service on
or after the Normal Retirement Date, and for reasons other than death or
Disability, the Bank shall pay to the Director the benefit described in this
Section 2.1.
2.1.1 AMOUNT OF BENEFIT. The benefit under this Section 2.1 is
$500 annually for each year of service and limited to 50% of fees at
Retirement Date.
2.1.2 PAYMENT OF BENEFIT. The Bank shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Retirement Date and continuing for 179 additional months.
2.2 EARLY RETIREMENT BENEFIT. If the Director terminates service
after the Early Retirement Date but before the Normal Retirement Date, and for
reasons other than death or Disability, the Bank shall pay to the Director the
benefit described in this Section 2.2.
2.2.1 AMOUNT OF BENEFIT. The benefit under this Section 2.2 is
the benefit determined under Schedule A based on the date of the
Director's Termination of Service. Schedule A shall be adjusted to
reflect any benefit level increases determined by the Board of Directors
under Section 2.1.1 prior to the Directors Termination of Service.
Schedule A is calculated using the interest method of accounting, a
7.50% discount rate, and assuming monthly compounding and monthly
benefit payments.
2.2.2 PAYMENT OF BENEFIT. The Bank shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Early Retirement Date and continuing for 179
additional months.
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2.3 DISABILITY BENEFIT. If the Director terminates service for
Disability prior to the Normal Retirement Date, the Bank shall pay to the
Director the benefit described in this Section 2.3.
2.3.1 AMOUNT OF BENEFIT. The benefit under this Section 2.3 is
the benefit determined under Schedule A based on the date of the
Director's Termination of Service. Schedule A shall be adjusted to
reflect any benefit level increases determined by the Board of Directors
under Section 2.1.1 prior to the Director's Termination of Service.
2.3.2 PAYMENT OF BENEFIT. The Bank shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Termination of Service and continuing until the
earlier of (a) the Director's recovery from the Disability, or (b) 179
months.
2.4 CHANGE OF CONTROL BENEFIT. Upon a Change of Control while the
Director is in the active service of the Bank, the Bank shall pay to the
Director the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
2.4.1 AMOUNT OF BENEFIT. The benefit under this Section 2.4 is
the product of (i) and (ii) multiplied by (iii), where (i) equals $500
and (ii) equals each Year of Service or partial Year of Service of the
Director as of the effective date of the Change in Control (regardless
of whether the Director experiences a Termination of Service), and (iii)
equals 15.
2.4.2 PAYMENT OF BENEFIT. The Bank shall pay the benefit to
the Director in a lump sum no later than the effective date of the
Change of Control. The calculation of the lump sum value shall be made
by assuming (i) the benefit in Section 2.4.1 would have been paid in 180
equal monthly installments commencing on the effective date of the
Change in Control and (ii) a discount rate of 7.5%.
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ARTICLE 3
DEATH BENEFITS
3.1 DEATH DURING ACTIVE SERVICE. If the Director dies while in the
active service of the Bank, the Bank shall pay to the Director's beneficiary the
benefit described in this Section 3.1.
3.1.1 AMOUNT OF BENEFIT. The benefit under Section 3.1 is the
lifetime benefit that would have been paid to the Director under Section
2.1 calculated as if the date of the Director's death were the Normal
Retirement Date.
3.1.2 PAYMENT OF BENEFIT. The Bank shall pay the benefit to
the Beneficiary on the first day of each month commencing with the month
following the Director's death and continuing for 179 additional months.
3.2 DEATH DURING BENEFIT PERIOD. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Bank shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
ARTICLE 4
BENEFICIARIES
4.1 BENEFICIARY DESIGNATIONS. The Director shall designate a
beneficiary by filing a written designation with the Bank. The Director may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Director and
accepted by the Bank during the Director's lifetime. The Director's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Director, or if the Director names a spouse as beneficiary and the marriage
is subsequently dissolved. If the Director dies without a valid beneficiary
designation, all payments shall be made to the Director's surviving spouse, if
any, and if none, to the Director's surviving children and the
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descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Director's estate.
4.2 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 Bank 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 Bank may require proof of
incompetency, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Bank from all liability with respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Bank shall not pay any benefit under this Agreement:
5.1 TERMINATION FOR CAUSE. If the Bank terminates the Director's
service for:
5.1.1 Gross negligence or gross neglect of duties;
5.1.2 Commission of a felony or of a gross misdemeanor
involving moral turpitude; or
5.1.3 Fraud, disloyalty, dishonesty or willful violation of
any law or significant Bank policy committed in connection with the
Director's service and resulting in an adverse financial effect on the
Bank.
5.2 SUICIDE. No benefits shall be payable if the Director commits
suicide within two years after the date of this Agreement, or if the Director
has made any material misstatement of fact on any application for life insurance
purchased by the Bank.
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ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 CLAIMS PROCEDURE. The Bank shall notify the Director's
beneficiary in writing, within ninety (90) days of his or her written
application for benefits, of his or her eligibility or noneligibility for
benefits under the Agreement. If the Bank determines that the beneficiary 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 beneficiary wishes to have the claim reviewed. If the Bank
determines that there are special circumstances requiring additional time to
make a decision, the Bank shall notify the beneficiary 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.
6.2 REVIEW PROCEDURE. If the beneficiary is determined by the Bank
not to be eligible for benefits, or if the beneficiary believes that he or she
is entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Bank by filing a petition for
review with the Bank within sixty (60) days after receipt of the notice issued
by the Bank. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Bank of the petition, the
Bank shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Bank orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Bank shall notify the beneficiary 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 beneficiary 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 Bank, but
notice of this deferral shall be given to the beneficiary.
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ARTICLE 7
AMENDMENTS AND TERMINATION
The Bank may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Director prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Bank (other than the financial impact of paying
the benefits). In the event of any such amendment or termination, the Director
shall be 100% vested in the benefit determined under Schedule A.
ARTICLE 8
MISCELLANEOUS
8.1 BINDING EFFECT. This Agreement shall bind the Director and the
Bank, and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 NO GUARANTY OF EMPLOYMENT. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Bank, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service at any time.
8.3 NON-TRANSFERABILITY. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner.
8.4 TAX WITHHOLDING. The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 APPLICABLE LAW. The Agreement and all rights hereunder shall be
governed by the laws of Ohio, except to the extent preempted by the laws of the
United States of America.
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8.6 UNFUNDED ARRANGEMENT. The Director and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank 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 the Director's life is a general asset
of the Bank to which the Director and beneficiary have no preferred or secured
claim.
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IN WITNESS WHEREOF, the Director and a duly authorized Bank officer have
signed this Agreement.
DIRECTOR: XXXXXXXX FEDERAL SAVINGS BANK
/s/ [DIRECTOR] By: /s/ Xxxx X. Xxxxx
---------------------- -----------------
[DIRECTOR]
Title: President and Chief Executive
Officer
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XXXXXXXX FEDERAL SAVINGS BANK
AMENDED AND RESTATED
DIRECTOR RETIREMENT AGREEMENT
XXXXX X. XXXXXXX, XX.
SCHEDULE A
--------------------------------------------------------
ACCRUED
PLAN DIRECTOR RETIREMENT
DATE AGE YEAR LIABILITY
--------------------------------------------------------
1996 51 1 $2,905
1997 52 2 6,036
1998 53 3 9,400
1999 54 4 13,046
2000 55 5 16,964
2001 56 6 21,186
2002 57 7 25,736
2003 58 8 30,639
2004 59 9 35,923
2005 60 10 41,617
2006 61 11 47,753
2007 62 12 54,365
2008 63 13 61,491
2009 64 14 69,170
2010 65 15 77,445
2011 66 16 86,362
2012 67 17 95,972
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XXXXXXXX FEDERAL SAVINGS BANK
AMENDED AND RESTATED
DIRECTOR RETIREMENT AGREEMENT
XXXXXXX X. XXXXXXX
SCHEDULE A
--------------------------------------------------------
ACCRUED
PLAN DIRECTOR RETIREMENT
DATE AGE YEAR LIABILITY
--------------------------------------------------------
1996 44 1 $1,809
1997 45 2 3,758
1998 46 3 5,858
1999 47 4 8,122
2000 48 5 10,561
2001 49 6 13,190
2002 50 7 16,023
2003 51 8 19,076
2004 52 9 22,366
2005 53 10 25,911
2006 54 11 29,731
2007 55 12 33,848
2008 56 13 38,284
2009 57 14 43,065
2010 58 15 48,217
2011 59 16 53,769
2012 60 17 59,752
2013 61 18 66,199
2014 62 19 73,147
2015 63 20 80,634
2016 64 21 88,702
2017 65 22 97,397
2018 66 23 106,767
2019 67 24 116,864
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XXXXXXXX FEDERAL SAVINGS BANK
AMENDED AND RESTATED
DIRECTOR RETIREMENT AGREEMENT
XXXXXXX X. XXXXXX XX
SCHEDULE A
--------------------------------------------------------
ACCRUED
PLAN DIRECTOR RETIREMENT
DATE AGE YEAR LIABILITY
--------------------------------------------------------
1996 37 1 $1,182
1997 38 2 2,456
1998 39 3 3,828
1999 40 4 5,307
2000 41 5 6,901
2001 42 6 8,619
2002 43 7 10,470
2003 44 8 12,465
2004 45 9 14,614
2005 46 10 16,930
2006 47 11 19,426
2007 48 12 22,116
2008 49 13 25,015
2009 50 14 28,139
2010 51 15 31,505
2011 52 16 35,133
2012 53 17 39,042
2013 54 18 43,255
2014 55 19 47,795
2015 56 20 52,687
2016 57 21 57,959
2017 58 22 63,640
2018 59 23 69,762
2019 60 24 76,359
2020 61 25 83,469
2021 62 26 91,131
2022 63 27 99,387
2023 64 28 108,284
2024 65 29 117,872
2025 66 30 128,204
2026 67 31 139,338
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XXXXXXXX FEDERAL SAVINGS BANK
AMENDED AND RESTATED
DIRECTOR RETIREMENT AGREEMENT
XXXXXXX X. XXXXXX
SCHEDULE A
--------------------------------------------------------
ACCRUED
PLAN DIRECTOR RETIREMENT
DATE AGE YEAR LIABILITY
--------------------------------------------------------
1996 46 1 $2,254
1997 47 2 4,683
1998 48 3 7,300
1999 49 4 10,120
2000 50 5 13,159
2001 51 6 16,434
2002 52 7 19,964
2003 53 8 23,768
2004 54 9 27,867
2005 55 10 32,284
2006 56 11 37,044
2007 57 12 42,174
2008 58 13 47,702
2009 59 14 53,659
2010 60 15 60,078
2011 61 16 66,996
2012 62 17 74,451
2013 63 18 82,484
2014 64 19 91,141
2015 65 20 100,470
2016 66 21 110,523
2017 67 22 121,357
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XXXXXXXX FEDERAL SAVINGS BANK
AMENDED AND RESTATED
DIRECTOR RETIREMENT AGREEMENT
XXXXXX X. XXXXXX
SCHEDULE A
--------------------------------------------------------
ACCRUED
PLAN DIRECTOR RETIREMENT
DATE AGE YEAR LIABILITY
--------------------------------------------------------
1996 52 1 $2,570
1997 53 2 5,340
1998 54 3 8,325
1999 55 4 11,542
2000 56 5 15,009
2001 57 6 18,745
2002 58 7 22,771
2003 59 8 27,109
2004 60 9 31,784
2005 61 10 36,822
2006 62 11 42,251
2007 63 12 48,101
2008 64 13 54,406
2009 65 14 61,200
2010 66 15 68,521
2011 67 16 76,411
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