Exhibit 10(i)
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FIRST FEDERAL SAVINGS BANK OF WABASH
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is adopted this 2nd day of January, 2003, by and between
FIRST FEDERAL SAVINGS BANK OF WABASH, a Federal Stock Savings bank, located in
Wabash, Indiana (the "Company") and XXX X. XXXXXXXX (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:
1.1 "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 Executive's Termination of Employment for reasons other than death,
Disability or retirement.
1.2 "Code" means the Internal Revenue Code of 1986, as amended.
1.3 "Disability" means the Executive's suffering a sickness, accident or
injury which has been determined by the carrier of any individual or group
disability insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Company of the
carrier's or Social Security Administration's determination upon the request of
the Company.
1.4 "Early Termination" means the Termination of Employment before Normal
Retirement Age for reasons other than death, Disability, Termination for Cause
or following a Change of Control.
1.5 "Early Termination Date" means the month, day and year in which Early
Termination occurs.
1.6 "Effective Date" means January 1, 2003.
1.7 "Normal Retirement Age" means the Executive's 62nd birthday.
1.8 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Employment.
1.9 "Plan Year" means each twelve-month period from the Effective Date.
1.10 "Termination for Cause" See Article 5.
1.11 "Termination of Employment" means that the Executive ceases to be
employed by the Company for any reason, voluntary or involuntary, other than by
reason of a leave of absence approved by the Company.
1.12 "Year of Service" means a period of twelve consecutive months during
which the Executive has been continuously employed by the Company. The
Executive's first Year of Service shall begin with the Executive's date of hire
and end twelve months later. Additional Years of Service, if any, will be
counted for each consecutive 12 month period thereafter that begins on the same
month and day as the Executive's first Year of Service. If there are any
approved leaves of absence, the Executive shall be considered continuously
employed for purposes of this Agreement. The Executive's date of hire is October
23, 2000.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. Upon Termination of Employment on or after
the Normal Retirement Age for reasons other than death, the Company shall pay to
the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is
$50,000 (Fifty thousand dollars). The Company's Board of Directors, in its
sole discretion, may increase the annual benefit under this Section 2.1.1;
however, any increase shall require the recalculation of Schedule A.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in 12 equal monthly installments commencing with the month
following the Executive's Normal Retirement Date, paying the annual benefit
to the Executive for a period of 10 years.
2.1.3 Benefit Increases. Commencing on the first anniversary of the
first benefit payment, and continuing on each subsequent anniversary, the
Company's Board of Directors, in its sole discretion, may increase the
benefit.
2.2 Early Termination Benefit. Upon Early Termination, the Company shall
pay to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
Early Termination Annual Benefit amount set forth in Schedule A for the
Plan Year ending immediately prior to the Early Termination Date,
determined by vesting the Executive in 6.25 percent of the Accrual Balance
set forth in Schedule A for the first Year of Service, and an additional
6.25 percent of said amount for each succeeding Year of Service thereafter
until the Executive becomes 100 percent vested in the accrual balance. Any
increase in the annual benefit under Section 2.1.1 shall require the
recalculation of the Early Termination benefit on Schedule A. This benefit
is determined by calculating a 10-year fixed annuity from the Accrual
Balance, crediting interest on the unpaid balance at an annual rate of 5
percent, compounded monthly.
2.2.2 Payment of Benefit. The Company shall pay the annual benefit to
the Executive in 12 equal monthly installments commencing with the month
following the Normal Retirement Age, paying the annual benefit to the
Executive for a period of 10 years.
2.2.3 Benefit Increases. Benefit payments may be increased as provided
in Section 2.1.3.
2.3 Disability Benefit. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Company shall pay to the
Executive the benefit described in this Section 2.3 in lieu of any other benefit
under this Agreement.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Disability Annual Benefit amount set forth in Schedule A for the Plan Year
ending immediately prior to the date in which the Termination of Employment
occurs (except during the first Plan Year, the benefit is the amount set
forth for Plan Year 1), determined by vesting the Executive in 100 percent
of the Accrual Balance. Any increase in the annual benefit under Section
2.1.1 shall require the recalculation of the Early Termination benefit on
Schedule A. This benefit is determined by calculating a 10-year fixed
annuity from the Accrual Balance, crediting interest on the unpaid balance
at an annual rate of 5 percent, compounded monthly.
2.3.2 Payment of Benefit. The Company shall pay the annual benefit
amount to the Executive in 12 equal monthly installments commencing with
the month following the Termination of Employment, paying the annual
benefit to the Executive for a period of 10 years.
2.3.3 Benefit Increases. Benefit payments may be increased as provided
in Section 2.1.3.
2.4 Change of Control Benefit. Upon a Change of Control, followed within
twelve (12) months by the Executive's Termination of Employment for reasons
other than death, Disability or retirement, the Company shall pay to the
Executive 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
Change of Control Annual Benefit set forth on Schedule A for the Plan Year
ending immediately prior to the date in which Termination of Employment
occurs (except during the first Plan Year, the benefit is the amount set
forth for Plan Year 1), determined by vesting the Executive 100 percent of
the Accrual Balance. Any increase in the annual benefit under Section 2.1.1
shall require the recalculation of the Early Termination benefit on
Schedule A. This benefit is determined by calculating a 10-year fixed
annuity from the Accrual Balance, crediting interest on the unpaid balance
at an annual rate of 5 percent, compounded monthly.
2.4.2 Payment of Benefit. The Company shall pay the annual benefit
amount to the Executive in 12 equal monthly installments commencing with
the month following the Normal Retirement Age, paying the annual benefit to
the Executive for a period of 10 years.
2.4.3 Benefit Increases. Benefit payments may be increased as provided
in Section 2.1.3.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's beneficiary the
benefit described in this Section 3.1. This benefit shall be paid in lieu of the
Lifetime Benefits of Article 2.
3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is
the Normal Retirement Benefit amount described in Section 2.1.1.
3.1.2 Payment of Benefit. The Company shall pay the annual benefit to
the beneficiary in 12 equal monthly installments commencing with the month
following the Executive's death, paying the annual benefit to the
Executive's beneficiary for a period of 10 years.
3.2 Death During Benefit Period. If the Executive 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 Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
3.3 Death Following Termination of Employment But Before Payment of a
Lifetime Benefit Commences. If the Executive 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 Executive's
beneficiary that the Executive was entitled to prior to death except that the
benefit payments shall commence on the first day of the month following the date
of the Executive's death.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.
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 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 5
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement if
the Company terminates the Executive's employment for:
(a) Gross negligence or gross neglect of duties;
(b) Commission of a felony or of a gross misdemeanor involving moral
turpitude; or
(c) Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the
Executive's employment and resulting in an adverse effect on the
Company.
5.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Executive commits suicide within three years after the
date of this Agreement. In addition, the Company shall not pay any benefit under
this Agreement if the Executive has made any material misstatement of fact on an
employment application or resume provided to the Company, or on any application
for any benefits by the Company to the Executive.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. A Participant 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 Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond to such
claimant within 90 days after receiving the claim. If the Company
determines that special circumstances require additional time for
processing the claim, the Company 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 Company expects to render its decision.
6.1.3 Notice of Decision. If the Company denies part or all of the
claim, the Company shall notify the claimant in writing of such denial. The
Company 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 Company denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Company of
the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review, the
claimant, within 60 days after receiving the Company's notice of denial,
must file with the Company 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 Company 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.
6.2.3 Considerations on Review. In considering the review, the Company
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 Company Response. The Company shall respond in writing
to such claimant within 60 days after receiving the request for review. If
the Company determines that special circumstances require additional time
for processing the claim, the Company 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 Company expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the claimant in
writing of its decision on review. The Company 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 (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 Company and the Executive.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, successors,
administrators and transferees.
8.2 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Reorganization. The Company shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
8.5 Tax Withholding. The Company 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 Indiana, except to the extent preempted by
the laws of the United States of America.
8.7 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
8.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
8.9 Administration. The Company 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 Designated Fiduciary. The Company 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.
IN WITNESS WHEREOF, the Executive and the Company have signed this
Agreement.
EXECUTIVE: COMPANY:
First Federal Savings Bank of Wabash
/s/ Xxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxx X. Xxxxxxxx Title: President/CEO
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