EXECUTIVE EMPLOYEE SALARY CONTINUATION AGREEMENT
FOR
XXXXXX XXXXXXXXX
THIS AGREEMENT is made this 19th day of April, 1996, between Citizens
State Bank of Xxxxxxx, an Illinois corporation (the "Company") and Xxxxxx
Xxxxxxxxx (the "Participant").
WHEREAS, the Participant is an executive employee of the Company and as
such has materially contributed to the Company's position, and
WHEREAS, the Company wishes to establish this Agreement for purposes of
promoting in the Participant the strongest interest in the successful
operation of the Company and increased efficiency in his work and to provide
the Participant benefits upon retirement, death, disability or other
termination of employment, in consideration of services to be performed after
the date of this agreement but prior to his retirement; and
WHEREAS, the Company also wished to establish this Agreement to enhance
its abilities to attract and retain highly qualified executives and to enable
those executives to perform their duties in the best interests of the Company
and its shareholders in the event of possible or threatened Change in Control
of the Company without undue concern regarding the personal, financial
interests of such executives.
NOW THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
SECTION 1
DEFINITIONS
1.1 ADMINISTRATIVE COMMITTEE - "Administrative Committee" shall men the
committee appointed pursuant to Section 5 of this Agreement.
1.2 AGE - "Age" shall mean the age of the person as of the date of his
last birthday.
1.3 CHANGE IN CONTROL - For purposes of this Agreement, a Change in
Control of the Company shall have occurred (i) on the fifth day preceding the
scheduled expiration date of a tender offer by, or exchange offer by any
corporation, person, other entity or group (other than the company or any of
its wholly owned subsidiaries), to acquire Voting Stock of the Company if (a)
after giving effect to such offer such corporation, person other entity or
group would own twenty-five percent (25%) or more of the Voting Stock of the
Company, (b) there shall have been filed documents with the Securities and
Exchange Commission ("SEC") in connection therewith (or, if no such filing is
required, public evidence that the offer has already commenced), and (c) such
corporation, person, other entity or group has secured all required
regulatory approvals to own or control twenty-five (25%) or more of the
Voting Stock
of the Company, (ii) if the shareholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into another
corporation in a transaction in which neither the Company nor any of its
wholly owned subsidiaries will be the surviving corporation, or to sell or
otherwise dispose of all or substantially all of the Company's assets to any
corporation, person, or entity or group (other than the Company or any of its
wholly owned subsidiaries), and such definitive agreement is consummated;
(iii) if any corporation, person other entity or group (other than the
Company of any of its wholly owned subsidiaries) becomes the Beneficial Owner
of stock representing twenty-five (25%) or more of the Voting Stock of the
Company, or (iv) if during any period of two (2) consecutive years Continuing
Directors cease to comprise a majority of the Company's Board of Directors.
The term "Continuing Director" means (i) any member of the Company's Board of
Directors of the Company who was a member of the Board of Directors of the
Company at the beginning of any period of two (2) consecutive years, and (ii)
any person who subsequently becomes a member of the Board of Directors of the
Company, if (a) such person' nomination for election or election to the Board
of Directors of the Company is recommended or approved by resolution of a
majority of the Continuing Directors, or (b) such person is included as a
nominee in a proxy statement of the Company distributed when a majority of
the Board of Directors of the Company consists of Continuing Directors. For
purposes of this Agreement, "Voting Stock" shall mean those share of the
Company entitled to vote generally in the election of directors.
1.4 CREDITING RATE - "Crediting Rate" shall mean, if the Participant is
insured under the Company long term disability policy, the definition of
total disability contained in the long term disability insurance policy. If
the Participant is not insured under such a policy, the board shall, in its
complete and sole discretion, determine whether the Participant is disabled
for the purposes of this Agreement.
1.5 DISABILITY - "Disability" shall mean, if the Participant is insured
under the Company long term disability policy, the definition of total
disability contained in the long term disability insurance policy. If the
Participant is not insured under such a policy, the board shall, in its
complete and sole discretion, determine whether the Participant is disabled
for the purposes of this Agreement.
1.6 DISCHARGE FOR CAUSE - The Company may terminate the Participant's
employment under this Agreement for "Cause." A termination of Cause is a
termination by reason of the Board's good faith determination that the
Participant (i) is incompetent or acted dishonestly or engaged in willful
misconduct in the performance of his duties, (ii) breached a fiduciary duty
to the Company for personal profit to himself, (iii) intentionally failed to
perform reasonably assigned duties, (iv) willfully violated any law, rule or
regulation (other than traffic violations or similar offenses) or any final
cease and desist order, or (v) materially breached this Agreement. No act,
or failure to act, on the Participant's xxx shall be considered "willful"
unless he has acted, or failed to act, with an absence of good faith and
without a reasonable belief that his action or failure to act was in the best
interest of the Company. Notwithstanding the foregoing, (i) the Participant
shall not be deemed to have been terminated for Cause unless there shall have
been delivered to the Participant a copy of a resolution duly
2
adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for the
purpose (after reasonable notice to the Participant and an opportunity for
the Participant, together with his counsel, to be heard before the Board),
finding that in the good faith opinion of the Board the Participant was
guilty of conduct set forth above in the second sentence of this Section and
specifying the particulars thereof in detail, and (ii) in no event will the
Participant be subject to termination for Cause pursuant to clause (v) above
unless the Participant shall have failed to cure, correct or prevent the
alleged breach within thirty days after such resolution has been delivered to
the Participant.
1.7 FINAL AVERAGE COMPENSATION - "Final Average Compensation" shall
mean the Participant's Average Compensation paid by the Company, as reported
on Form W-2 for the three consecutive years of employment with the Company,
that produce the highest average.
1.8 MORTALITY ASSUMPTIONS - "Mortality Assumptions" shall mean the life
expectancy of a Participant, determined by applying Commissioner Standard
Ordinary.
1.9 NORMAL RETIREMENT DATE - "Normal Retirement Date" shall mean the
first day of the month following the month in which a Participant reaches age
65.
1.10 TERMINATION OF EMPLOYMENT - "Termination of Employment" shall mean
the Participant's ceasing to be employed by the Company for any reason
whatever, voluntary or involuntary, including by reason of death or
disability.
1.11 VESTING - Regardless of the number of years of service completed by
the Participant, upon a Change in Control, the Participant shall become 100%
vested in all benefits under this agreement which shall be paid at his/her
Normal Retirement Date.
SECTION 2
ELIGIBILITY
The Participant is eligible for the benefits provided therein accordance
with the terms of this agreement upon the execution hereof.
A Participant shall cease to be a Participant at Termination of
Employment. However, the employment of a Participant shall not be deemed to
be terminated by reason of an approved leave of absence granted in accordance
with uniform rules applied in a non-discriminatory manner.
3
SECTION 3
PAYMENT OF BENEFITS
3.1 BENEFITS UPON NORMAL RETIREMENT.
Upon a Participant's Termination of Employment on or after the
Normal Retirement Date, the Company shall pay to the Participant the sum of
$8,300 per year, payable in monthly installments of $691.67 each, commencing
on the first day of the month coincident with or next following the date of
Termination of Employment and continuing on the first day of each month
thereafter for a period of 15 years, but in any event until a minimum of 180
total monthly payments are made to the Participant or the Participant's
beneficiary per Section 3.6(b). At the sole discretion of the board of
directors, the initial benefit may be increased in subsequent years to offset
the effect of inflation.
3.2 BENEFITS UPON EARLY RETIREMENT.
The Participant may elect, on or before the earlier of a) December
31 of the year prior to Termination of Employment; or b) 90 days prior to
Termination of Employment, to defer commencement of payment of the retirement
benefit to a date not later than the Normal Retirement date. Such election
shall be in writing and submitted to the Company. If a Participant elects to
defer payment o the benefit until his Normal retirement Date, the Company
shall pay to the Participant the normal retirement benefit described in
Section 3.1 above. If a Participant elects to defer payment of the benefit
to a date prior to the Normal Retirement Date, the Company shall pay to the
Participant a benefit calculated in accordance with the first sentence of
this Section 3.2, but using the date selected by the Participant for the
commencement of this benefit as his "Termination of Employment" date instead
of his actual termination date.
3.3 BENEFITS UPON LATE RETIREMENT.
Upon a Participant's Termination of Employment after the Normal
retirement Date, the Company shall pay to the Participant the normal
retirement benefit described in Section 3.1 above, increased by .05 per year
or .00416 for each month that the Participant's Termination of Employment is
deferred beyond the Normal Retirement Date, in equal monthly installments
commending on the first day of the month coincident with or next following
the date of Termination of Employment and continuing on the first day of each
month thereafter for the periods specified in Section 3.1.
3.4 BENEFITS UPON DISABILITY.
Upon a Participant's Termination of Employment prior to the Normal
Retirement Date due to Disability, no separate provision is made for a
disability benefit under this Agreement. However, any such Participant shall
be considered, notwithstanding such Termination of Employment, to continue to
be a Participant while disabled and for so long as the disability continues
prior to reaching the Early Retirement Date, such Participant's
4
beneficiary shall receive the survivor's benefits described in Section
3.6(a). In the event the Participant lives to the Early Retirement Date, the
Participant shall be entitled to receive the early retirement benefit
described in Section 3.2.
3.5 OTHER TERMINATION OF EMPLOYMENT.
(a) VOLUNTARY TERMINATION OF EMPLOYMENT PRIOR TO THE EARLY
RETIREMENT DATE OR DISCHARGE FOR CAUSE AT ANY TIME. There shall be no
benefit paid to the Participant is he/she voluntarily terminates service
prior to the Normal or Early Retirement Date, as applicable.
(b) INVOLUNTARY TERMINATION OF EMPLOYMENT PRIOR TO THE NORMAL OR
EARLY RETIREMENT DATE OTHER THAN BECAUSE OF DEATH, DISABILITY FOR CAUSE.
Upon a Participant's involuntary Termination of Employment prior to reaching
the Normal or Early Retirement Date, for reasons other than death, disability
or discharge for cause, the Company shall pay to the Participant as
compensation for services rendered prior to such Termination of Employment,
the balance standing tot he credit of the Participant in the Salary
Continuation Accrual Account as of the date of involuntary termination,
commending on the first day of the month coincident with or next following
the date of Termination of Employment. For purposes of this subsection
3.5(b), the Participant shall be deemed to have incurred an Involuntary
Termination of Employment covered by this subsection if he quits employment
as a result of the Company's significantly lessening either his title,
duties, responsibilities, compensation or altering his situs of employment,
without his consent. His compensation shall be deemed to be significantly
lessened if any cutback is imposed except as a part of an overall cutback
applied proportionately to all of the Company management employees or if the
Participant fails to receive periodic increase substantially proportionate to
and coincident with the increase granted to management employees.
(c) TERMINATION OF EMPLOYMENT AT OR AFTER A CHANGE IN OWNERSHIP OF
CONTROL. If a Participant incurs a voluntary or involuntary Termination of
Employment Prior to Reaching the Normal Retirement Date, for reasons other
than death, disability, or discharge for cause, but on or after the
occurrence of a Change in Control, and in connection with such change, the
Participant's title, duties, responsibilities, or compensation is
significantly lessened or his situs of employment is changed, without his
consent, the Company shall pay to the Participant at his/her Normal
Retirement Date, the Benefits set forth in paragraph 3.1, preceding. For
purposes hereof, the standards set forth in subparagraph (b) above with
respect to what constitutes a significant lessening of compensation shall
apply.
3.6 SURVIVORSHIP BENEFITS.
(a) PRIOR TO COMMENCEMENT OF NORMAL OR EARLY RETIREMENT BENEFITS. If
a Participant dies while in the service of the company or after a Termination of
Employment due to disability and while Disabled or after a Termination of
Employment on or after the Early Retirement Date, but prior to commencement of
any benefit payments under this Agreement, the Company shall pay to the
Participant's beneficiary a Survivor's benefit of 180 equal monthly installment
of $691.67 commencing on the first day of the month after the
5
Participant's death and continuing on the first day of each month thereafter
until all such payments are completed. In the event a beneficiary dies
before receiving all the survivor's benefit payments, the remaining payments
hall be paid to the legal representatives of the beneficiary's estate.
Payment of the survivor's benefit shall relieve the Company of the obligation
to pay any other benefit which the Participant would have otherwise received,
under the terms of this Agreement.
(b) AFTER COMMENCEMENT OF BENEFITS. If a Participant dies after any
benefit payments have commended, but prior to receiving all of the scheduled
minimum number of monthly payments, the company shall pay the remaining monthly
payment to the Participant's beneficiary. In the event a beneficiary dies
before receiving all of the remaining payments, the remaining payments hall be
paid to the legal representatives of the beneficiary's estate.
3.7 RECIPIENTS OF PAYMENTS: DESIGNATION OF BENEFICIARY.
All payments to be made by the Company shall be made to the
Participant, if living. In the event of a Participant's death prior to the
receipt of all benefit payments, all subsequent payments to be made under this
Agreement shall be to the beneficiary or beneficiaries of the Participant. The
Participant shall designate a beneficiary by filing a written notice of such
designation with the Company in such form as the company may prescribe. The
Participant may revoke or modify said designation at any time by a further
written designation. The Participant's beneficiary designation shall be deemed
automatically revoked in the event of the death of the beneficiary, or if the
beneficiary is the Participant's spouse, in the event of dissolution of
marriage. If no designation shall be in effect at the time of any benefits
payable under this agreement shall become due , the beneficiary shall be the
spouse of the Participant, or if no spouse is then living, the legal
representatives of the Participant's estate.
SECTION 4
ADDITIONAL CHANGE IN CONTROL PROVISIONS
4.1 APPLICATION OF SECTION.
If payments or benefits under this Agreement, after taking into
account all other payments or benefits to which the Participant is entitled from
the Company, are expected to result in an excise tax on the Participant or the
loss of certain tax deductions by the Company by reason of Code Section 280G and
4999, then payments under this Agreement shall be reduced to an amount such that
all payments to the Participant from he Company, which are considered contingent
upon the Change in Control, shall not exceed 2.99 times the Participant's Base
Amount as defined in Code Section 280G.
4.3 DETERMINATION BY EXPERTS.
If the Participant and the Company shall disagree as to whether a
payment under this Agreement could result in the loss of a deduction, the matter
shall be resolved by an opinion of the Company's law firm, or if Company's law
firm is unable to provide such an
6
opinion, counsel selected by the Company, and agreed to by the Officer.
Counsel's opinion need not be unqualified. Counsel's opinion shall be based
on determinations of the Base Amount and Excess Parachute Payments, as such
terms are defined by Section 280G of the Code or its successor, by the
Company's Consulting Firm, or if the Company's Consulting Firm is unable to
make such determination, a consulting firm chose by the Company and agreed to
by the Officer. The Company shall pay the fees and expenses of such counsel
and consulting firm, and shall make available such information as may be
reasonably requested by such counsel and consulting firm to prepare the
opinion. If the maximum amount payable to the Officer pursuant to this
Section cannot be determined prior to the due date for such payment, the
Company shall pay on the due date the minimum amount which it in good faith
determines to be payable, and shall pay the remaining amount as soon as
practicable after such remaining amount is determined.
4.4 PARTICIPANT'S COSTS OF ENFORCEMENT
Following a Change in Control, the Company shall pay all expenses of
the Participant, including but not limited to attorney fees incurred in
enforcing payments by the Company pursuant to this Agreement.
SECTION 5
ADMINISTRATION AND INTERPRETATION OF THIS AGREEMENT
The board of Directors shall appoint an Administrative Committee consisting
of two (2) or more persons to administer and interpret this Agreement.
Interpretation by the Administrative Committee shall be final and binding upon a
Participant. The Administrative Committee may adopt rules and regulations to
this Agreement as it may deem necessary or advisable for the administration
thereof.
SECTION 6
CLAIMS PROCEDURE
If the Participant or the Participant's beneficiary (hereinafter referred
to as a "Claimant") is denied all or a portion of any expected benefit under
this Plan for any reason, he or she may file a claim with the Administrative
Committee. The Administrative Committee shall notify the Claimant within sixty
(60) days of allowance or denial of the claim, unless the Claimant receives
written notice from the Administrative Committee prior to the end of the sixty
(60) day period stating that special circumstances requires an extension of the
time for decision. The notice of the Administrative Committee's decision shall
be in writing, sent by mail to Claimant's last known address, and, if an denial
of the claim, must contain the following information:
(a) the specific reasons for the denial;
7
(b) specific reference to pertinent provisions of the Plan on which
the denial is based; and
(c) if applicable, a description of any additional information or
material necessary to perfect the claim, an explanation of why such information
or material is necessary, and an explanation of the claims review procedure.
SECTION 7
REVIEW PROCEDURE
7.1 A Claimant is entitled to request a review of any denial of his claim
by the Administrative Committee. The request for review must be submitted in
writing within a sixty (60) day period, the claim will be deemed to be
conclusively denied. The Claimant or his representative shall be entitled to
review all pertinent documents, and to submit issues and comments orally and in
writing.
7.2 If the request for review by a Claimant concerns the interpretation
and application of the provisions of the Agreement and the Company's
obligations, then the review shall be conducted by a separate committee
consisting of three persons designated or appointed by the Administrative
Committee. The separate committee shall afford the Claimant a hearing and the
opportunity to review all pertinent documents and submit issues and comments
orally and in writing and shall render a review decision in writing, all within
sixty (60) days after receipt of a request for a review, provided that, in
special circumstances (such as the necessity of holding a hearing) the committee
may extend the time for decision by not more than sixty (60) days upon written
notice to the Claimant. The Claimant shall receive written notice of the
separate committee's review decision, together with specific reasons for the
decision and reference to the pertinent provision of this Agreement.
SECTION 8
LIFE INSURANCE AND FUNDING
The Company in its discretion may apply for and procure as owner and for is
own benefit, insurance on the life of the Participant, in such amounts and in
such forms as the Company may choose. The Participant shall have no interest
whatsoever in any such policy or policies, but at the request of the Company he
shall submit to medical examinations and supply such information and execute
such documents as may be required by the insurance company or companies to whom
the Company has applied for insurance.
The rights of the Participant, or his beneficiary, or estate, to benefits
under the Plan shall be solely those of an unsecured creditor of the Company.
Any insurance policy or other assets acquired by or held by the Company in
connection with the liabilities assumed by it pursuant to the Plan shall not be
deemed to be held under any trust for the benefit of the Participant, his
beneficiary, or his estate, or to be security for the performance of the
8
obligations of the Company but shall be, in remain, a general, unpledged, and
unrestricted asset of the Company.
If this Agreement is funded through insurance on the life of the
Participant, then in the event o such Participant's death during the first
two (2) years after the effective date of this Agreement, and if such
Participant's death was a result of suicide or if such Participant made any
material misstatement or failed to make a material disclosure of information
in any documentation which the Participant is requested to complete in
connection with this Agreement, then no death benefits under the terms of
this Agreement will be payable, unless and to the extent that the Board of
Directors of the Company, in their absolute discretion, may otherwise
determine.
SECTION 9
ASSIGNMENT OF BENEFITS
Neither the Participant nor any other beneficiary under the Plan shall have
any right to assign the right to receive any benefits hereunder, and in the
event of any attempted assignment or transfer, the Company shall have no further
liability hereunder.
SECTION 10
EMPLOYMENT NOT GUARANTEED BY AGREEMENT
Neither this Agreement nor any action taken hereunder shall be construed as
giving the Participant the right to be retained as an Executive Employee or as
an employee of the Company for any period.
SECTION 11
TAXES
The Company shall deduct from all payments made hereunder all applicable
federal or state taxes required by law to be withheld from such payments. In
the event that the Company determines that benefits under the Plan are subject
to FICA currently, the Company shall withhold the Participant's portion of FICA
from such other amounts payable to the Participant as the Company deems
appropriate.
SECTION 12
AMENDMENT AND TERMINATION
The Board of Directors may, at any time, amend or terminate this Agreement,
provided that the Board may not reduce or modify any benefit in pay status to
the Participant or beneficiary hereunder or any benefit that would become
payment hereunder if the Participant were to have died or were to have been
involuntarily terminated under Section 3.5(b) hereof on the day prior to such
action by the Board, without the prior written consent of the Participant.
9
The Company is entering into this Agreement upon the assumption that
certain existing tax laws will continue in effect in substantially their current
form. In the event of any changes in Federal law relating to and allowing the
tax-free accumulation of earnings within a life insurance policy, the income
tax-free payment of proceeds from life insurance policies or any other law which
would result in a material adverse impact upon the Company's ability to perform
its obligations under this Agreement, the Company shall have an option to
terminate or modify this Agreement subject to the protection afforded
Participant's in the preceding paragraph above.
SECTION 13
CONSTRICTION
This Agreement shall be construed according to the laws of the State of
Illinois.
SECTION 14
FORM OF COMMUNICATION
Any election, application, claim, notice or other communication required or
permitted to be made by the Participant to the Company shall be made in writing
and in such form as the Company shall prescribe. Such communication shall be
effective upon mailing, if sent by first-class mail, postage prepaid, and
addressed to the Company's office at 111 KEATING, SHIPMAN, IL.
SECTION 15
CAPTIONS
The captions at the head of a section or a paragraph of this Agreement are
designed for convenience of reference only and are not to be resorted to for the
purpose of interpreting any provision of this Agreement.
SECTION 16
SEVERABILITY
The invalidity of any portion of this Agreement shall not invalidate the
remainder thereof, and said remainder shall continue in full force and effect.
SECTION 17
BINDING EFFECT
This Agreement shall be binding upon and shall insure to the benefit of the
Company and the Participant, and each of their successor's heirs, personal
representatives and permitted assigns. No sale of substantially all of the
Company's assets shall be made without the buyer
10
expressly assuming the obligation of this Agreement. The Company further
agrees that it will not be a party to any merger, consolidation or
reorganization unless and until its obligations hereunder are expressly
assumed by the successor or successors.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of
the date first set forth above.
CITIZENS STATE BANK OF XXXXXXX
By:________________________________________
Its:_______________________________________
___________________________________________
Participant
BENEFICIARY DESIGNATION NOTICE
To the Plan Administrator of CITIZENS STATE BANK OF XXXXXXX Executive
Salary Continuation Agreement:
Pursuant to the Provisions of my Executive Salary Continuation Agreement with
CITIZENS STATE BANK OF XXXXXXX permitting the designation of a beneficiary or
beneficiaries by the participant, I hereby designate the following persons and
entities as primary and secondary beneficiaries of any benefit under said
Agreement payable by reason of my death.
PRIMARY BENEFICIARY:
Name Address Relationship
______________________________________________________________________________
______________________________________________________________________________
SECONDARY (CONTINGENT) BENEFICIARY:
Name Address Relationship
______________________________________________________________________________
______________________________________________________________________________
11
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OR BENEFICIARIES AND SECONDARY BENEFICIARIES
ARE HEREBY REVOKED.
The Plan Administrator shall pay all sums payable under this Agreement by
reason of my death to the Primary Beneficiary, if he or she survives me, and
if no Primary Beneficiary shall survive me, then to the Secondary
Beneficiary, and if no named beneficiary survives me, then the Plan
Administrator shall pay all amounts in accordance with the terms of the
Executive Salary continuation Agreement. In the event that a named
beneficiary survives me and dies prior to receiving the entire benefit
payable under said Agreement, then and in that event, the remaining unpaid
benefit, payable according to the terms of the Agreement, shall be payable to
the personal representatives of the estate of said deceased beneficiary, who
survives me, but die prior to receiving the total benefit.
____________________________ ___________________________________________
Date of Designation Signature of Executive
12
AMENDMENT TO
EXECUTIVE EMPLOYEE SALARY CONTINUATION AGREEMENT
FOR
XXXXXX XXXXXXXXX
1
THIS AMENDMENT ("Amendment") to the Executive Employee Salary Continuation
Agreement (the "Agreement") between the Citizens State Bank of Shipman, an
Illinois state bank with its main office located in Shipman, Illinois (the
"Bank"), and Xxxxxx Xxxxxxxxx (the "Participant") is made as of this 31st day of
March, 1998.
WHEREAS, the Bank and the Participant have entered into a one-year
employment agreement (the "Employment Agreement"); and
WHEREAS, the Participant and the Bank have agreed to maintain the Agreement
with certain changes made by this Amendment.
NOW, THEREFORE, in consideration of these premises, and other good and
valuable consideration, including, but not limited to, the Employment Agreement,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Section 1.3 of the Agreement is deleted in its entirety.
2. Section 1.8 of the Agreement is deleted in its entirety.
3. Section 1.9 of the Agreement is deleted in its entirety.
4. Section 3.1 of the Agreement is amended to read as follows:
"3.1 BENEFITS UPON NORMAL RETIREMENT.
Upon the Participant's Termination of Employment on or after
the Normal Retirement Date, the Company shall pay to the
Participant the sum of $19,577, which amount is the amount
standing to his credit in the Salary Continuation Accrual
Account as of March 31, 1998, which amount shall be
increased by the Crediting Rate each year prior to the year
this benefit is paid in its entirety, such amount to be paid
in 180 equal monthly installments commencing on the first
day of the month coincident with or next following the date
of Termination of Employment and continuing on the first day
of each month thereafter."
5. Section 3.2 of the Agreement is amended to read as follows:
"3.2 BENEFITS UPON EARLY RETIREMENT.
Upon a Participant's Termination of Employment on or after
reaching the Early Retirement Date, but prior to the Normal
Retirement Date, the Company shall pay to the Participant,
the benefit described in Section 3.1. Such payments shall
commence on the first day of the month coincident with or
next following the date of Termination of Employment and
shall continue on the first day of each month thereafter for
a period of fifteen years.
The Participant may elect, on or before the earlier of (a)
December 31 of the year prior to Termination of Employment;
or (b) 90 days prior to Termination of Employment, to defer
commencement of payment of the retirement benefit to a date
not later than the Normal Retirement Date. Such election
shall be in writing and submitted to the Company. If a
Participant elects to defer payment of the benefit until his
Normal Retirement Date, the Company shall pay to the
Participant the normal retirement benefit described in
Section 3.1 above."
6. Section 3.3 of the Agreement is amended to read as follows:
"3.3 BENEFITS UPON LATE RETIREMENT.
Upon a Participant's Termination of Employment after the
Normal Retirement Date, the Company shall pay to the
Participant the benefit described in Section 3.1 in 180
equal monthly installments commencing on the first day of
the month coincident with or next following the date of
Termination of Employment and continuing on the first day of
each month thereafter."
7. Section 3.4 of the Agreement is amended to read as follows:
"3.4 BENEFITS UPON DISABILITY.
Upon a Participant's Termination of Employment prior to the
Normal Retirement Date due to Disability, the Company shall
pay to the Participant the benefit described in Section 3.1
in the manner described in Section 3.1."
3
8. Section 3.5(c) of the Agreement is deleted in its entirety.
9. Section 3.6(a) of the Agreement is amended to read as follows:
"3.6 SURVIVORSHIP BENEFITS.
(a) PRIOR TO COMMENCEMENT OF NORMAL OR EARLY
RETIREMENT BENEFITS. If a Participant dies while in
the service of the Company or after a Termination of
Employment due to Disability and while Disabled or
after a Termination of Employment on or after the Early
Retirement Date, but prior to commencement of any
benefit payments under this Agreement, the Company
shall pay to the Participant's beneficiary a survivor's
benefit in the amount determined under Section 3.1, in
180 equal monthly installments commencing on the first
day of the month after the Participant's death and
continuing on the first day of each month thereafter.
In the event a beneficiary dies before receiving all of
the survivor's benefit payments, the remaining payments
shall be paid to the legal representatives of the
beneficiary's estate. Payment of the survivor's
benefit shall relieve the Company of the obligation to
pay any other benefit which the Participant would have
otherwise received under the terms of this Agreement."
10. Section 4 of the Agreement is deleted in its entirety.
11. Section 12 of the Agreement is amended by adding the following after
the last sentence thereof:
"In addition, if, at any time, the Participant is assessed a
tax or taxes on an amount not already distributed to the
Participant, the Company shall terminate the Agreement and
distribute to the Participant the full amount standing to
the Participant's credit in the Salary Continuation Accrual
Account."
4
IN WITNESS WHEREOF, this Amendment has been executed by the parties as of
the date set forth above.
CITIZENS STATE BANK OF XXXXXXX
By:______________________________ ___________________________________________
Chairman XXXXXX XXXXXXXXX, Participant
5
