FIRST NATIONAL BANK OF MUSCATINE
EXECUTIVE DEFERRED COMPENSATION 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 XXXXX XXXXXXX (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide to the Executive a deferred compensation
opportunity together with matching contributions by the Company. The Company
will pay the Executive's benefits from the Company's 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 "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 Executive's Termination of Employment for reasons other than death,
Disability or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 - "Compensation" means the total salary and bonus paid to the
Executive during a Plan Year.
1.5 "Deferral Account" means the Company's accounting of the Executive's
accumulated Deferrals plus accrued interest.
1.6 "Deferrals" means the amount of the Executive's Compensation, which
the Executive elects to defer according to this Agreement.
1.7 "Disability" means, if the Executive is covered by a Company
sponsored disability policy, total disability as defined in such policy without
regard to any waiting period. If the Executive is not covered by such a policy,
Disability means the Executive suffering a sickness, accident or injury, which,
in the judgment of a physician satisfactory to the Company, prevents the
Executive from performing substantially all of the Executive's normal duties
for the Company. As a condition to any Disability benefits, the Company may
require the Executive to submit to such physical or mental evaluations and tests
as the Company's Board of Directors deems appropriate.
1.8 "Effective Date" means January 1, 2000
1.9 "Election Form" means the Form attached as Exhibit 1.
1.10 "Normal Retirement Age" means the Executive's 65th birthday.
1.11 "Normal Retirement Date" means the later of the Normal Retirement
Age or Termination of Employment.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Employment" means that the Executive ceases to be
employed by the Company 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 employment status of the Executive or
the date of the Executive's Termination of Employment, the Company shall have
the sole and absolute right to decide the dispute.
Article 2
Deferral Election
2.1 Initial Election. The Executive shall make an 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 Compensation to be deferred and shall be effective
to defer only Compensation 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 Executive may
modify the amount of Compensation to be deferred annually by filing a
new Election Form with the Company prior to the beginning of the Plan
Year in which the Compensation is 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 Executive
occurs, the Executive, 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 Executive and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Compensation deferred by the Executive as of
the time the Compensation would have otherwise been paid to the
Executive.
3.1.2 Company Contribution. Any Company contribution to the
Executive's account balance. The Company contribution, if any, shall be
determined by the Board of Directors, at its sole discretion, and shall
be based on performance factors set out by said Board of Directors,
determined at the end of each calendar year and credited to the
Executive's account balance in the calendar year following said
determination.
3.1.3 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), Clarica Life Insurance Company-US
(Single Pay FASB) and West Coast Life Insurance Company (BCSIV). The
interest rate shall be determined on January 1 of each year, rounded up
to the next whole number and compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Executive,
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 Executive 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 Executive's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Executive's creditors.
Article 4
Lifetime Benefits
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the
Company shall pay to the Executive 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 Executive's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the first day
of the month following the Executive's Normal Retirement Date. The
Company shall credit interest pursuant to Section 3.1.3 on the remaining
account balance during any applicable installment period.
4.2 Early Retirement Benefit. Upon Termination of Employment prior to
the Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Executive 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 Executive's Termination of Employment.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the first day
of the month following the Executive's Termination of Employment. The
Company shall credit interest pursuant to Section 3.1.3 on the remaining
account balance during any applicable installment period.
4.3 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 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 Executive's Termination of Employment.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in 180 equal monthly installments commencing on the first day
of the month following the Executive's Termination of Employment. The
Company shall credit interest pursuant to Section 3.1.3 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 Executive in a lump sum within
60 days after the Executive's Termination of Employment due to
Disability.
4.4 Change of Control Benefit. Upon a Change of Control, the Company
shall pay to the Executive 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 Executive's Termination of Employment.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 60 days after the Executive's Termination
of Employment.
4.4.3 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit
under this Agreement to the extent the benefit would create an excise
tax under the excess parachute rules of Section 28OG of the Code.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Executive) that the Executive has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Executive 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 Executive dies while in the
employment of the Company, the Company shall pay to the Executive'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) $985,176.
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 Executive's death. The Company shall
credit interest pursuant to Section 3.1.3 on the remaining account
balance during any applicable installment period.
5.2 Death During Payment of a Lifetime Benefit. 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.
5.3 Death After 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 6
Beneficiaries
6.1 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.
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 Executive's Deferrals (the Company match
credited under Section 3.1.2 and the interest earned on the Deferral Account) if
the Company terminates the Executive's employment 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 Executive's employment with the
Company; 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.
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 Executive commits suicide
within two years after the date of this Agreement, or if the Executive 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 Executive.
Article 10
Miscellaneous
10.1 Binding Effect. This Agreement shall bind the Executive and the
Company and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 No Guarantee of Employment. This Agreement is not a contract for
employment. 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.
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 Executive and the Executive'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 Executive's life
is a general asset of the Company to which the Executive and the Executive'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 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.
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. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, 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 Executive and a duly authorized Company officer
have signed this Agreement.
Executive: Company:
FIRST NATIONAL BANK 0F MUSCATINE
/s/ Xxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxxxx
---------------------------------- --------------------------------
By Xxxxx Xxxxxxx Xxxxxx X. Xxxxxxx
Title: Chairman
EXHIBIT I
TO
FIRST NATIONAL BANK OF MUSCATINE
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
Deferral Election
I elect to defer my Compensation 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
Compensation.
__x_ I elect to defer $12,500 of my (____) For 16 Years
Compensation.
____ Until Termination
of Employment
____ I elect not to defer any of my ____ Until ________________,
Compensation. ________________ (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/ D. Xxxxx Xxxxxxx
-----------------------------
D. Xxxxx Xxxxxxx
Date 7/20/00
---------
Accepted by the Company this 20th day of July, 2000.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
Title: Chairman
Beneficiary Designation
FIRST NATIONAL BANK OF MUSCATINE
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
I designate the following as beneficiary of benefits under this Agreement
payable following my death:
Primary: Xxxxxxx X. Xxxxxxx
Contingent: Trust under will dated July 31, 1992
Trustee - First National Bank of Muscatine
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 with the Company. 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 /s/ D. Xxxxx Xxxxxxx
------------------------------
D. Xxxxx Xxxxxxx
Date: 7/20/00
---------------------------------
Acknowledged by the Company this 20th day of July, 2000.
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Title: Chairman
