FIRST NATIONAL BANK OF MUSCATINE
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is made this 1st day of July _, 2000, by and between FIRST
NATIONAL BANK OF MUSCATINE, a nationally-chartered commercial bank, located in
Muscatine, Iowa (the "Company"), and ________________ (the "Director").
INTRODUCTION
To encourage the Director to remain in the service of the Company, the
Company is willing to provide to the Director a deferred fee opportunity. The
Company will pay the Director's benefits from the Company's general assets.
AGREEMENT
The Director and the Company agree as follows:
Article I
Definitions
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change of Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 50 percent of the
Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the
Director elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company
sponsored disability 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 Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate.
1.7 "Effective Date" means January 1, 2000
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees paid to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 65th birthday.
1.11 "Normal Retirement Date" means the later of the Normal Retirement
Age or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a
member of the Company's Board of Directors 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 Director's status or the date
of the Director's Termination of Service, the Company shall have the sole and
absolute right to decide the dispute.
Article 2
Deferral Election
2.1 Initial Election. The Director shall make all initial deferral
election under this Agreement by filing with the Company a signed Election Form
within 30 days after the Effective Date of this Agreement. The Election Form
shall set forth the amount of Fees to be deferred and shall be effective to
defer only Fees earned after the date the Election Form is received by the
Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may
modify the amount of Fees to be deferred annually by filing a new
Election Form with the Company prior to the beginning of the Plan Year
in which the Fees are to be deferred. The modified deferral election
shall not be effective until the calendar year following the year in
which the subsequent Election Form is received and approved by the
Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising
from the death of a family member, divorce, sickness, injury,
catastrophe or similar event outside the control of the Director occurs,
the Director, by written instructions to the Company, may reduce future
deferrals under this Agreement.
Article 3
Deferral Account
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time
the Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, interest is to be
accrued on the account balance at an annual rate equal to the taxable
equivalent (determined using the Company's highest marginal tax bracket)
of the highest yielding insurance asset of the following products: Great
West Life & Annuity Insurance Company (BCS Corp UL), Xxxxxxxxx Xxxxxxxx
Life Insurance Company (ESPVI), Xxxxxxx Life Insurance Company-US
(Single Pay FASB) and West Coast Life Insurance Company (BCSIV). The
interest rate shall be determined on January I of each year, rounded up
to the next whole number and compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
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 Director 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 Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director' s creditors.
Article 4
Lifetime Benefits
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the
Company shall pay to the Director 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 Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 180 equal monthly installments commencing on the first day
of the month following the Director's Normal Retirement Date. The
Company shall credit interest pursuant to Section 3.1.2 on the remaining
account balance during any applicable installment period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director 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 Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 180 equal monthly installments commencing on the first day
of the month following the Director's Termination of Service. The
Company shall credit interest pursuant to Section 3.1.2 on the remaining
account balance during any applicable installment period.
4.2.3 Discretionary Payment of Benefit. The Company, in its sole
discretion, may pay this benefit to the Director in a lump sum within 60
days after the Director's Termination of Service.
4.3 Disability Benefit. If the Director terminates service due to
Disability prior to Normal Retirement Age, the Company shall pay to the Director
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 the Director's Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 180 equal monthly installments commencing on the first day
of the month following the Director's Termination of Service. The
Company shall credit interest pursuant to Section 3.1.2 on the remaining
account balance during any applicable installment period.
4.3.3 Discretionary Payment of Benefit. The Company, in its sole
discretion, may pay this benefit to the Director in a lump sum within 60
days after the Director's Termination of Service due to Disability.
4.4 Change of Control Benefit. Upon a Change of Control, the Company
shall pay to the Director 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 on the Director's Termination of Service.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days after the Director's Termination
of Service.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director 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.
Article 5
Death Benefits
5.1 Death During Active Service. If the Director dies while in the
Service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under Section 5. 1 is the
greater of: a) the Deferral Account balance; or b) $40,317.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
beneficiary in 180 equal monthly installments commencing on the first
day of the month following the Director's death. The Company shall
credit interest pursuant to Section 3.1.2 on the remaining account
balance during any applicable installment period.
5.2 Death During Payment of a Lifetime Benefit. If the Director dies
after any Lifetime Benefit payments have commenced under this Agreement but
before receiving all such payments, the Company 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.
5.3 Death After Termination of Service But Before Payment of a Lifetime
Benefit Commences. If the Director is entitled to a Lifetime Benefit under this
Agreement, but dies prior to the commencement of said benefit payments, the
Company shall pay the same benefit payments to the Director's beneficiary that
the Director 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
Director's death.
Article 6
Beneficiaries
6.1 Beneficiary Designations. The Director shall designate a beneficiary
by filing a written designation with the Company. 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 Company 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 estate.
6.2 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 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.
Article 7
General Limitations
7.1 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Company shall not pay any benefit under this
Agreement that is in excess of the Director's Deferrals (the interest earned on
the Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the Company;
(b) Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Director's service with the
Company; or
(c) Fraud, disloyalty, dishonesty or willful violation of any law
or significant Company policy committed in connection with the
Director's service and resulting in an adverse effect on the Company.
7.2 Suicide or Misstatement. Notwithstanding any provision of this
Agreement to the contrary, the Company shall not pay any death benefit under
this Agreement exceeding the Deferral Account 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 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 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility 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 90 days.
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 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 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 verbally or in writing, and the Claimant (or counsel)
shall have the right to review the pertinent documents. The Company shall notify
the Claimant of its decision in writing within the 60-day period, stating
specifically the basis of its decision, written in a manner 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 60-day period is not
sufficient, the decision may be deferred for up to another 60 days 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 Director.
Article 10
Miscellaneous
10.1 Binding Effect. This Agreement shall bind the Director and the
Company and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 No Guarantee of Service. This Agreement is not a contract for
services. It does not give the Director the right to remain in the service of
the Company, nor does it interfere with the Company's right to replace the
Director. It also does not require the Director to remain in the service of the
Company nor interfere with the Director's right to terminate service 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 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Iowa, except to the extent preempted by the laws of the
United States of America.
10.6 Unfunded Arrangement. The Director and the Director's 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 Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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.
10.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Director as to the subject matter hereof. No rights
are granted to the Director by virtue of this Agreement other than those
specifically set forth herein.
10.9 Administration. The Company shall have powers which are necessary
to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting for the
Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
10.10 Named Fiduciary. The Company shall be the named fiduciary and plan
administrator under this 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.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer
have signed this Agreement.
Director: Company:
FIRST NATIONAL BANK OF MUSCATINE
/s/ By:
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Title:
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EXHIBIT I
TO
FIRST NATIONAL BANK OF MUSCATINE
DIRECTOR DEFERRED FEE AGREEMENT
Deferral Election
I elect to defer my Fee received under this Agreement with the Company, as
follows:
Amount of Deferral Duration
--------------------------------------------------------------------------------
[Initial and Complete one] [Initial One]
____ I elect to defer ___% of my ____ One Year only
Fee.
____ For 7 Years
____ I elect to defer $4,000 of my
Fee. ____ Until Termination
of Service
____ I elect not to defer any of my
Fee. ____ Until _____________________,
_____________________ (date)
Upon the Company's approval, I understand that I may change the amount and
duration of my deferrals by filing a new election form with the Company;
provided, however, that any subsequent election will not be effective until the
calendar year following the year in which the new election is received and
approved by the Company.
Signature /s/
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Date
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Accepted by the Company this day of .
By: /s/
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Title:
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