SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
Xxxxxxxx Financial Corporation 10-Q
Exhibit 10.1
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Supplemental Executive Retirement Agreement (the “Agreement”) is entered into effective January 1, 2016 by Xxxxxxxx Financial Corporation, with offices at 000 Xxx Xxxxxxx, Xxxxxx, Xxx Xxxx 00000, and Xxxxxx Xxxxxxxx Xxxxxxxx, (the “Executive”).
The principal objective of this Agreement is to ensure the payment of competitive levels of retirement income to the Executive, who has been determined to be a key executive of Xxxxxxxx Financial Corporation and its subsidiaries, in order to retain and motivate such Executive.
1.1 “Board of Directors” means the Board of Directors of Xxxxxxxx Financial Corporation.
1.2 “Committee” means the Compensation Committee of the Board of Directors, which has been given authority by the Board of Directors to administer this Agreement.
1.3 “Company” means Xxxxxxxx Financial Corporation.
1.4 “Earnings” means the average of the Executive’s five (5) highest calendar years (or such lesser number if the Executive has not completed five (5) years of service for the purpose of determining Earnings) of base pay which shall mean the Executive’s base salary excluding bonuses, profit sharing, and the like, and which may include base pay in years prior to the Executive’s commencement of participation under this Agreement if so determined by the Board of Directors.
1.5 “Surviving Spouse” means the spouse of the Executive, named at or prior to his Retirement Date on his ‘Form of Benefit and Beneficiary Designation Form’, surviving on the date of death of the Executive.
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1.6 The masculine gender, where appearing in this Agreement, will be deemed to include the feminine gender, and the singular may include the plural, unless the context clearly indicates the contrary. For purposes of complying with Section 409A of the Internal Revenue Code of 1986, as amended, or any successor to such statute of like import, it is acknowledged that no benefit payments may be made under this Agreement prior to the Executive’s termination of employment with the Company, that the payment of benefits pursuant to this Agreement may not be accelerated by the Company or the Executive, and that there are no elections provided under the Agreement to defer compensation or to delay a payment of benefits. The Executive may elect or change the form of benefit payment any time prior to actual benefit commencement.
1.7 “Vested” means having completed at least 10 years of service.
SECTION II. ELIGIBILITY FOR BENEFITS
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SECTION III. AMOUNT AND FORM OF RETIREMENT BENEFIT
The Executive may elect to take his benefit in the form of a fifty percent (50%) joint and survivor annuity, whereby he and his Spouse at the time of his Retirement would receive an actuarial equivalent benefit over their joint lifetimes. Actuarial equivalence will be determined using reasonable actuarial assumptions chosen by the Company. The monthly retirement benefit payable by the Company to the Executive shall equal one-twelfth (1/12) of such annual retirement benefit. The monthly benefit payable as a single life annuity shall be payable by the Company on the first day of each calendar month beginning with the Executive’s Retirement Date through and including the month of the Executive’s death. In the event that the Executive elects to take his benefit in the form of joint and survivor annuity, the benefit shall be payable by the Company on the first day of each calendar month beginning with the Executive’s Retirement Date through and including the later of the month of the Executive’s or his Surviving Spouse’s death in accordance with that election. In the event the Executive is determined to be a “key employee”, as such term is defined in Section 416(i) of the Internal Revenue Code of 1986, as amended, or any successor to such statute of like import, then any monthly benefit otherwise payable on or before the date which is six (6) months after the Executive’s termination of employment date shall be delayed until the earlier of the Executive’s date of death or the date which is six (6) months after the Executive’s termination of employment date.
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(a) Upon the death of the Executive after the commencement of the Executive’s retirement benefit under Section 3.1, the Executive’s Spouse as of his Retirement Date, if still living, shall be entitled to fifty percent (50%) of the annuity benefit the Executive was receiving at the time of his death, but only if the Executive elected the fifty percent (50%) joint and survivor annuity form pursuant to Section 3.1. The monthly retirement benefit payable by the Company, if any, to the Surviving Spouse shall be one-twelfth (1/12) of such annual retirement benefit and shall be payable on the first day of each month beginning with the month after the month of the Executive’s death through and including the month of the Surviving Spouse’s death.
(b) Upon the death of the Executive prior to the commencement of the Executive’s retirement benefit under Section 3.1, the Executive’s Surviving Spouse, if any, shall be entitled to an annual retirement benefit payable by the Company under this Agreement as elected, determined under Section 3.1, in which the Executive is Vested at the time of his death; provided, that the Surviving Spouse survives until the date upon which the Executive would have attained the age specified in Section 2.2(a) if the Executive’s death occurs prior to his Retirement Date. The monthly retirement benefit payable by the Company, if any, to the Surviving Spouse shall equal one-twelfth (1/12) of said annual retirement benefit for the Surviving Spouse and shall be payable on the first day of each month commencing on the later of the Executive’s Retirement Date or the month after the month of the Executive’s death through and including the month of the Surviving Spouse’s death.
(c) Upon the death of an Executive with no Surviving Spouse, or if the Executive’s Surviving Spouse shall not survive the Executive until the date upon which the Executive would have attained the age specified in Section 2.2(a), there shall be no benefit payment under this Agreement to the Executive, the Executive’s Surviving Spouse, the estate of either the Executive or the Surviving Spouse, or otherwise.
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SECTION IV. PAYMENT OF RETIREMENT BENEFITS
SECTION V. DEATH BENEFITS PAYABLE
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SECTION VI. DISABILITY BENEFITS PAYABLE
SECTION VII. CHANGE OF CONTROL
(a) In the event of a Change of Control, as defined in Section 7.2, of Xxxxxxxx Financial Corporation, the Executive shall be deemed to have completed twenty (20) years of service and is Vested in the benefit under this Agreement.
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(b) In the event of a Change of Control of Xxxxxxxx Financial Corporation, if the employment of the Executive is thereafter terminated or the role or compensation of the Executive is significantly reduced in anticipation of such a Change of Control which then occurs, or within three (3) years of such Change of Control, then the Executive shall receive a benefit, in addition to any benefit under Section 3 of this Agreement, under this Section 7.1(b). The benefit under this Section 7.1(b) shall be the continuation of the Executive’s Compensation, as defined below, for a period of three (3) years plus continuation of all employee welfare benefits that the Executive was participating in (health insurance, disability insurance, life insurance and the like) immediately prior to the Change of Control during the period in which the Executive’s Compensation is continued; provided, however, that, for purposes of this Section 7.1(b), the amount of the Executive’s Compensation taken into account shall be reduced by (20%) if the Executive has attained age sixty-one (61), by 40% if the Executive has attained age sixty-two (62), by 60% if the Executive has attained age sixty-three (63), by 80% if the Executive has attained age sixty-four (64), and by 100% if the Executive has attained age sixty-five (65), with all such age determinations made as of the date of the Executive’s termination of employment. The continuation of the Executive’s employee welfare benefits under this Section 7.1(b) shall be on the same terms and conditions as such employee welfare benefits are offered to other executive employees of the successor employer to the Company and such continuation shall be for a three-year period even if there is no continuation payment of the Executive’s Compensation because of the 100% reduction under the preceding sentence. For purposes of this Section VII only, the term “Compensation” shall mean the Executive’s base pay (at the rate in effect immediately prior to the Change in Control) plus the Executive’s bonus and profit sharing compensation (which for this purpose shall be the average of the Executive’s bonus and profit sharing compensation earned for the two (2) most recently completed fiscal years of the Company).
(c) In the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, including any successor to such statute of like import (the “Excise Tax”), then the amount of the benefit otherwise payable under Section 7.1(b), if any, shall be reduced, but not below zero, to the maximum amount upon which no such Excise Tax is imposed.
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(d) For purposes of this Section 7.1, the proper amounts, if any, of the Excise Tax and the adjustment under Section 7.1(c) to eliminate the Excise Tax shall be determined in the first instance by the Company. Within forty-five (45) days of being provided with written notice of any such determination, the Executive may provide written notice to the Committee of any disagreement, in which event the amounts, if any, of the Excise Tax and any adjustment under Section 7.1(c) shall be determined by independent tax counsel selected by the Company’s independent auditors. The determination of the Company (or, in the event of disagreement, the tax counsel selected) shall be final.
7.2 For purposes of this Section 7, a Change of Control shall be deemed to have occurred if subsequent to January 1, 2004, (i) any person, including a “group” (as defined in Section 13(d)(3) of the Securities and Exchange Act of 1934 (the “1934 Act”), becomes the “beneficial owner” (within the meaning of Section 13(d)(3) under the 0000 Xxx) of a majority of the common stock of Xxxxxxxx Financial Corporation; or (ii) Xxxxxxxx Financial Corporation is a party to a merger, consolidation, or other business combination in which it is not the surviving corporation, or sells or transfers all of a major portion of its assets to any other person (any of the foregoing constituting a “Business Combination”); or (iii) as a result of, or in connection with, any cash tender or exchange offer, purchase of stock, Business Combination, or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who were the Board of Directors before the Transaction shall cease to constitute a majority of the Board of Directors of Xxxxxxxx Financial Corporation or any Successor Corporation. “Successor Corporation” means the surviving, resulting or transferee corporation in a Business Combination, or if such corporation is a direct or indirect subsidiary of another corporation, the parent corporation of such surviving, resulting or transferee corporation.
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8.7 Controlling Law. This Agreement is established under and will be construed according to the laws of the State of New York, without regard for principles of conflicts of law.
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8.9 Disputes. In the event of any dispute after the occurrence of Change of Control (as defined in the Section 7.2) between the Company and the Executive with respect to the Executive’s rights to any payment under this Agreement, the Company shall pay all disputed amounts to the Executive and, if it is finally judicially determined that the Executive was not entitled to all or a portion of such disputed amounts, the Executive shall repay to the Company the amount to which the Executive was not entitled, together with interest thereon at the judgment rate of interest then applicable in New York State.
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IN WITNESS WHEREOF, this Agreement has been executed this 26th day of April, 2016.
XXXXXXXX FINANCIAL CORPORATION | |||||
By: | /s/ Xxxxxxx X. Xxxxxxx | ||||
Name: | Xxxxxxx X. Xxxxxxx | ||||
ATTEST: | /s/ Xxxxx X. Xxxxxx | Title: | President & Chief Executive Officer | ||
By: | /s/ Xxxxxx Xxxxxxxx Xxxxxxxx | ||||
Name: | Xxxxxx Xxxxxxxx Xxxxxxxx | ||||
ATTEST: | /s/ Xxxxxxxx X. Xxxxxx | Title: | General Counsel & Executive Vice President |
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