Messrs. Johnson, Sligh, Xxxx, Xxxxxxxxxx and Xxxxxxx each entered into a
Retirement Agreement with Xxxxxxxx Federal Savings Bank on November 1, 2002. A
form of the Retirement Agreement is filed herewith, along with a schedule of
benefits for each individual.
XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR RETIREMENT AGREEMENT
THIS AGREEMENT is adopted this 1st day of November, 2002, by and between
NEWBERRY FEDERAL SAVINGS BANK, a federally-chartered savings bank located in
Newberry, South Carolina (the "Bank"), and ________________(the "Director").
INTRODUCTION
To encourage the Director to remain a director of the Bank, the Bank is
willing to provide retirement income benefits to the Director. The Bank will pay
the benefits from its general assets.
AGREEMENT
The Bank and the Director agree as follows:
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Benefit Amount" means $18,000.
1.2 "Change of Control" means with respect to the Bank or Dutchfork
Bancshares, Inc. (the "Company"), an event of a nature that: (i) results in a
Change of Control of the Bank or the Company within the meaning of the Home
Owners' Loan Act of 1933, as amended and the Rules and Regulations promulgated
by the Office of Thrift Supervision ("OTS") (or its predecessor agency), as in
effect on the date hereof; or (ii) without limitation such a Change of Control
shall be deemed to have occurred at such time as (A) any "person" (as the term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of voting securities of the Bank or the Company representing 25%
or more of the Bank's or the Company's outstanding voting securities or right to
acquire such securities except for any voting securities of the Bank purchased
by the Company and any voting securities purchased by any employee benefit plan
of the Company or its Subsidiaries, or (B) individuals who constitute the Board
on the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by the Company's stockholders was approved by a
Nominating Committee solely composed of members which are Incumbent Board
members, shall be, for purposes of this clause (B), considered as though he were
a member of the Incumbent Board, or (C) a plan of reorganization, merger,
consolidation, sale of all
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or substantially all the assets of the Bank or the Company or similar
transaction is consummated in which the Bank or Company is not the resulting
entity.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Disability" means any mental or physical condition with respect to
which the Director qualifies for and receives benefits for under a long-term
disability plan of the Bank, or in the absence of such a long-term disability
plan or coverage under such a plan, "Disability" shall mean a physical or mental
condition which, in the sole discretion of the Board of Directors, is reasonably
expected to be of indefinite duration and to substantially prevent the Director
from fulfilling his or her duties or responsibilities to Dutchfork Bancshares,
Inc. or the Bank.
1.5 "Early Termination" means the Termination of Service before Normal
Retirement Age for reasons other than death, Disability, or following a Change
of Control.
1.6 "Early Termination Date" means the month, day and year in which Early
Termination occurs.
1.7 "Effective Date" means November 1, 2002.
1.8 "Normal Retirement Age" means the later of the final day (October 31st)
of the Plan Year in which the Director's 70th birthday occurs or the final day
(October 31st) of the fifth Plan Year after the Effective Date.
1.9 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.10 "Plan Year" means a twelve-month period commencing on November 1st and
ending on October 31st of the following year. The initial Plan Year shall
commence on the Effective Date of this Agreement.
1.11 "Termination for Cause" See Section 5.2.
1.12 "Termination of Service" means that the Director ceases to be a member
of the board of directors of the Bank for any reason, voluntary or involuntary,
other than by reason of a leave of absence approved by the Bank or the board of
directors.
1.13 "Vesting Percentage" means one hundred percent (100%).
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Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. Upon Termination of Service on or after the
Normal Retirement Age for reasons other than death, the Bank shall pay to the
Director the benefit described in this Section 2.1 in lieu of any other Lifetime
Benefits under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is
the Benefit Amount.
2.1.2 Payment of Benefit. The Bank shall pay the annual benefit to the
Director in 12 equal monthly installments commencing with the month
following the Director's Normal Retirement Date, paying the annual benefit
to the Director for a period of ten years.
2.2 Early Termination Benefit. Upon Early Termination, the Bank shall pay
to the Director the benefit described in this Section 2.2 in lieu of any other
Lifetime Benefits under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
Early Termination Annual Benefit set forth in Schedule A for the Plan Year
ending immediately prior to the Early Termination Date (except during the
first Plan Year, the benefit is the amount set forth for Plan Year 1),
determined by multiplying the Accrual Balance set forth in Schedule A for
the Plan Year ending immediately prior to the Early Termination Date by the
Vesting Percentage. Any increase in the Benefit Amount would require the
recalculation of the Early Termination Annual Benefit on Schedule A. The
benefit is determined by calculating a one hundred twenty month fixed
annuity from the vested Accrual Balance, crediting interest on the unpaid
balance at an annual rate of eight percent, compounded monthly.
2.2.2 Payment of Benefit. The Bank shall pay the annual benefit to the
Director in 12 equal monthly installments commencing with the month
following the Normal Retirement Age, paying the annual benefit to the
Director for a period of ten years.
2.3 Disability Benefit. If the Director terminates service due to
Disability prior to Normal Retirement Age, other than following a Change of
Control, the Bank shall pay to the Director the benefit described in this
Section 2.3 in lieu of any other Lifetime Benefits under this Agreement.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Disability Annual Benefit set forth in Schedule A for the Plan Year ending
immediately prior to the date in which the Termination of Service occurs
(except during the first Plan Year, the benefit is the amount set forth for
Plan Year 1), determined by vesting the Director in 100 percent of the
Accrual Balance. Any increase in the Benefit Amount would require the
recalculation of the Disability Annual Benefit on Schedule A. This benefit
is determined by calculating a one hundred twenty month fixed annuity from
the Accrual Balance crediting interest on the unpaid balance at an annual
rate of eight percent, compounded monthly.
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2.3.2 Payment of Benefit. The Bank shall pay the annual benefit to the
Director in 12 equal monthly installments commencing with the month
following the Normal Retirement Age, paying the annual benefit to the
Director for a period of ten years.
2.4 Change of Control Benefit. Upon Termination of Service following a
Change of Control, the Bank shall pay to the Director the benefit described in
this Section 2.4 in lieu of any other Lifetime Benefits under this Agreement.
2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the
Change of Control Annual Benefit set forth in Schedule A for the Plan Year
ending immediately prior to the date in which Termination of Service occurs
(except during the first Plan Year, the benefit is the amount set forth for
Plan Year 1), determined by vesting the Director in the Benefit Amount. Any
increase in the Benefit Amount would require the recalculation of the
Change of Control Annual Benefit on Schedule A.
2.4.2 Payment of Benefit. The Bank shall pay the annual benefit to the
Director in 12 equal monthly installments commencing with the month
following the Normal Retirement Age, paying the annual benefit to the
Director for a period of ten years.
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. This benefit shall be paid in lieu of the
benefits under Article 2.
3.1.1 Amount of Benefit. The benefit under this Section 3.1 is the
Accrual Balance set forth in Schedule A for the Plan Year ending
immediately prior to the date of the Director's death.
3.1.2 Payment of Benefit. The Bank shall pay the benefit to the
Director's beneficiary in a lump sum within 90 days following the
Director's death.
3.2 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 Bank shall pay the remaining Accrual Balance at
the time of the Director's death to the Director's beneficiary in a lump sum
within 90 days of the Director's death.
3.3 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 Bank
shall pay the Accrual Balance at the time of the Director's death to the
Director's beneficiary in a lump sum within 90 days of the Director's death.
4
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 received 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 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 incompetence, 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
5.1 Suicide or Misstatement. The Bank shall not pay any benefit under this
Agreement if the Director commits suicide within three years after the date of
this Agreement. In addition, the Bank shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on an
employment application or resume provided to the Bank, or on any application for
any benefits provided by the Bank to the Director.
5.2 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not pay any benefit under this Agreement if the
Bank terminates the Director's service for:
(a) Gross negligence or gross neglect of duties;
(b) Commission of a felony or of a gross misdemeanor involving moral
turpitude; or
(c) Misconduct, any breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties or willful violation
of any law, rule, regulation (other than traffic violations) or final cease
and desist order; or
(d) A significant violation of Bank policy committed in connection
with the Director's service and resulting in an adverse effect on the Bank.
5
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Director or beneficiary ("claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The claimant initiates a claim by
submitting to the Bank a written claim for the benefits.
6.1.2 Timing of Bank Response. The Bank shall respond to such claimant
within 90 days after receiving the claim. If the Bank determines that
special circumstances require additional time for processing the claim, the
Bank can extend the response period by an additional 90 days by notifying
the claimant in writing, prior to the end of the initial 90-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Bank expects to
render its decision.
6.1.3 Notice of Decision. If the Bank denies part or all of the claim,
the Bank shall notify the claimant in writing of such denial. The Bank
shall write the notification in a manner calculated to be understood by the
claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Plan on which the
denial is based,
(c) A description of any additional information or material necessary
for the claimant to perfect the claim and an explanation of why it is
needed,
(d) An explanation of the Plan's review procedures and the time limits
applicable to such procedures, and
(e) A statement of the claimant's right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.
6.2 Review Procedure. If the Bank denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Bank of
the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review, the
claimant, within 60 days after receiving the Bank's notice of denial, must
file with the Bank a written request for review.
6.2.2 Additional Submissions - Information Access. The claimant shall
then have the opportunity to submit written comments, documents, records
and other information relating to the claim. The Bank shall also provide
the claimant, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the claimant's claim for
benefits.
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6.2.3 Considerations on Review. In considering the review, the Bank
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.
6.2.4 Timing of Bank Response. The Bank shall respond in writing to
such claimant within 60 days after receiving the request for review. If the
Bank determines that special circumstances require additional time for
processing the claim, the Bank can extend the response period by an
additional 60 days by notifying the claimant in writing, prior to the end
of the initial 60-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date
by which the Bank expects to render its decision.
6.2.5 Notice of Decision. The Bank shall notify the claimant in
writing of its decision on review. The Bank shall write the notification in
a manner calculated to be understood by the claimant. The notification
shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Plan on which
the denial is based,
(c) A statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in
applicable ERISA regulations) to the claimant's claim for benefits,
and
(d) A statement of the claimant's right to bring a civil action
under ERISA Section 502(a).
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Director.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Director and the Bank,
and their beneficiaries, survivors, executors, successors, administrators and
transferees.
8.2 No Guarantee of Service. This Agreement is not an employment policy or
contract. It does not give the Director the right to remain a director of the
Bank, nor does it interfere with the shareholders' rights to discharge the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service as a director at any
time.
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8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Reorganization. The Bank 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 Bank under
this Agreement. Upon the occurrence of such event, the term "Bank" as used in
this Agreement shall be deemed to refer to the successor or survivor company.
8.5 Tax Withholding. The Bank shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.
8.6 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of South Carolina, except to the extent
preempted by the laws of the United States of America.
8.7 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 on the Director's life is a general
asset of the Bank to which the Director and beneficiary have no preferred or
secured claim.
8.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Bank 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.
8.9 Administration. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Establishing and revising the method of accounting for the
Agreement;
(b) Maintaining a record of benefit payments;
(c) Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement; and
(d) Interpreting the provisions of the Agreement.
8.10 Named Fiduciary. The Bank shall be the named fiduciary and plan
administrator under this Agreement. It may delegate to others certain aspects of
the management and operational responsibilities including the employment of
advisors and the delegation of ministerial duties to qualified individuals.
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IN WITNESS WHEREOF, the Director and the Bank have signed this Agreement.
XXXXXXXX FEDERAL SAVINGS BANK
__________________________________ By _________________________
Title ______________________
9
BENEFICIARY DESIGNATION
XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR RETIREMENT AGREEMENT
_____________________________
I designate the following as beneficiary of any death benefits under this
Agreement:
Primary:________________________________________________________________________
________________________________________________________________________________
Contingent:_____________________________________________________________________
________________________________________________________________________________
Note:To name a trust as beneficiary, please provide the name of the trustee(s)
and the exact name and date of the trust agreement.
I understand that I may change these beneficiary designations by filing a new
written designation ith the Bank. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.
Signature ______________________________
Date __________________________________
Received by the Bank this ______ day of _________________, 2003.
By ____________________________________
Title __________________________________
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XXXXXXXX FEDERAL SAVINGS BANK
XXXXX XXXXXX XXXXXXX
Director Retirement Agreement
Schedule A
Early Early Change of Disability
Plan Termination Vested Termination Control Annual
Year Benefit Accrual Vesting Accrual Annual Benefit Annual Benefit Benefit
Ending Level Balance Schedule Balance Payable at 70 Payable at 70 Payable at 70
Oct-03 18,000 5,030 100% 5,030 2,051 18,000 2,051
Oct-04 18,000 10,478 100% 10,478 3,945 18,000 3,945
Oct-05 18,000 16,378 100% 16,378 5,694 18,000 5,694
Oct-06 18,000 22,768 100% 22,768 7,309 18,000 7,309
Oct-07 18,000 29,688 100% 29,688 8,800 18,000 8,800
Oct-08 18,000 37,183 100% 37,183 10,177 18,000 10,177
Oct-09 18,000 45,299 100% 45,299 11,448 18,000 11,448
Oct-10 18,000 54,090 100% 54,090 12,622 18,000 12,622
Oct-11 18,000 63,609 100% 63,609 13,706 18,000 13,706
Oct-12 18,000 73,919 100% 73,919 14,707 18,000 14,707
Oct-13 18,000 85,085 100% 85,085 15,631 18,000 15,631
Oct-14 18,000 97,177 100% 97,177 16,485 18,000 16,485
Oct-15 18,000 110,273 100% 110,273 17,272 18,000 17,272
Oct-16 18,000 124,456 100% 124,456 18,000 18,000 18,000
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XXXXXXXX FEDERAL SAVINGS BANK
XXXXX X. XXXXX
Director Retirement Agreement
Schedule A
Early Early Change of Disability
Plan Termination Vested Termination Control Annual
Year Benefit Accrual Vesting Accrual Annual Benefit Annual Benefit Benefit
Ending Level Balance Schedule Balance Payable at 70 Payable at 70 Payable at 70
Oct-03 18,000 3,588 100% 3,588 1,859 18,000 1,859
Oct-04 18,000 7,475 100% 7,475 3,575 18,000 3,575
Oct-05 18,000 11,684 100% 11,684 5,160 18,000 5,160
Oct-06 18,000 16,242 100% 16,242 6,623 18,000 6,623
Oct-07 18,000 21,178 100% 21,178 7,974 18,000 7,974
Oct-08 18,000 26,524 100% 26,524 9,222 18,000 9,222
Oct-09 18,000 32,314 100% 32,314 10,374 18,000 10,374
Oct-10 18,000 38,585 100% 38,585 11,437 18,000 11,437
Oct-11 18,000 45,376 100% 45,376 12,420 18,000 12,420
Oct-12 18,000 52,730 100% 52,730 13,326 18,000 13,326
Oct-13 18,000 60,695 100% 60,695 14,164 18,000 14,164
Oct-14 18,000 69,321 100% 69,321 14,937 18,000 14,937
Oct-15 18,000 78,664 100% 78,664 15,651 18,000 15,651
Oct-16 18,000 88,781 100% 88,781 16,310 18,000 16,310
Oct-17 18,000 99,738 100% 99,738 16,919 18,000 16,919
Oct-18 18,000 111,605 100% 111,605 17,481 18,000 17,481
Oct-19 18,000 124,456 100% 124,456 18,000 18,000 18,000
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XXXXXXXX FEDERAL SAVINGS BANK
XXXXXX XXXXXXXXXX
Director Retirement Agreement
Schedule A
Early Early Change of Disability
Plan Termination Vested Termination Control Annual
Year Benefit Accrual Vesting Accrual Annual Benefit Annual Benefit Benefit
Ending Level Balance Schedule Balance Payable at 70 Payable at 70 Payable at 70
Oct-03 18,000 9,842 100% 9,842 2,694 18,000 2,694
Oct-04 18,000 20,502 100% 20,502 5,181 18,000 5,181
Oct-05 18,000 32,046 100% 32,046 7,478 18,000 7,478
Oct-06 18,000 44,548 100% 44,548 9,599 18,000 9,599
Oct-07 18,000 58,087 100% 58,087 11,557 18,000 11,557
Oct-08 18,000 72,751 100% 72,751 13,365 18,000 13,365
Oct-09 18,000 88,632 100% 88,632 15,035 18,000 15,035
Oct-10 18,000 105,830 100% 105,830 16,577 18,000 16,577
Oct-11 18,000 124,456 100% 124,456 18,000 18,000 18,000
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XXXXXXXX FEDERAL SAVINGS BANK
XXXXXX X. XXXX
Director Retirement Agreement
Schedule A
Early Early Change of Disability
Plan Termination Vested Termination Control Annual
Year Benefit Accrual Vesting Accrual Annual Benefit Annual Benefit Benefit
Ending Level Balance Schedule Balance Payable at 70 Payable at 70 Payable at 70
Oct-03 18,000 21,088 100% 21,088 4,196 18,000 4,196
Oct-04 18,000 43,926 100% 43,926 8,070 18,000 8,070
Oct-05 18,000 68,660 100% 68,660 11,647 18,000 11,647
Oct-06 18,000 95,447 100% 95,447 14,950 18,000 14,950
Oct-07 18,000 124,456 100% 124,456 18,000 18,000 18,000
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XXXXXXXX FEDERAL SAVINGS BANK
XXXXX X. XXXXXXX, XX.
Director Retirement Agreement
Schedule A
Early Early Change of Disability
Plan Termination Vested Termination Control Annual
Year Benefit Accrual Vesting Accrual Annual Benefit Annual Benefit Benefit
Ending Level Balance Schedule Balance Payable at 70 Payable at 70 Payable at 70
Oct-03 18,000 21,088 100% 21,088 4,196 18,000 4,196
Oct-04 18,000 43,926 100% 43,926 8,070 18,000 8,070
Oct-05 18,000 68,660 100% 68,660 11,647 18,000 11,647
Oct-06 18,000 95,447 100% 95,447 14,950 18,000 14,950
Oct-07 18,000 124,456 100% 124,456 18,000 18,000 18,000
15
