EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
AGREEMENT
This Agreement, made and entered into this 1st day of September, 1998,
by and between German American Bancorp, a Holding Company organized and existing
under the laws of the State of Indiana hereinafter referred to as "the Bank",
and Xxxxxx X. Xxxxxxx, a Key Employee and the Executive of the Bank, hereinafter
referred to as "the Executive".
The Executive has been in the employ of the Bank for several years and
has now and for years past faithfully served the Bank. It is the consensus of
the Board of Directors of the Bank (the Board) that the Executive's services
have been of exceptional merit, in excess of the compensation paid and an
invaluable contribution to the profits and position of the Bank in its field of
activity. The Board further believes that the Executive's experience, knowledge
of corporate affairs, reputation and industry contacts are of such value and the
Executive's continued services are so essential to the Bank's future growth and
profits that it would suffer severe financial loss should the Executive
terminate said services.
Accordingly, it is the desire of the Bank and the Executive to enter
into this Agreement under which the Bank will agree to make certain payments to
the Executive upon the Executive's retirement and, alternatively, to the
Executive's beneficiary(ies) in the event of the Executive's premature death
while employed by the Bank.
It is the intent of the parties hereto that this Agreement be
considered an arrangement maintained primarily to provide supplemental
retirement benefits for the Executive, as a member of a select group of
management or highly-compensated employees of the Bank for purposes of the
Employee Retirement Security Act of 1974 (ERISA). The Executive is fully advised
of the Bank's financial status and has had substantial input in the design and
operation of this benefit plan.
Therefore, in consideration of the Executive's services performed in
the past and those to be performed in the future and based upon the mutual
promises and covenants herein contained, the Bank and the Executive, agree as
follows:
EXHIBIT 10.10
I. DEFINITIONS
A. Effective Date:
The Effective Date of this Agreement shall be September 1, 1998.
10.10-2
B. Plan Year:
Any reference to "Plan Year" shall mean a calendar year from
January 1 to December 31. In the year of implementation, the term
"Plan Year" shall mean the period from the effective date to
December 31 of the year of the effective date.
C. Retirement Date:
Retirement Date shall mean retirement from service with the Bank
which becomes effective on the first day of the calendar month
following the month in which the Executive reaches the Executive's
sixty-eighth (68th) birthday or such later date as the Executive
may actually retire.
D. Pre-Retirement Account:
A Pre-Retirement Account shall be established as a liability
reserve account on the books of the Bank for the benefit of the
Executive. Prior to the Executive's retirement, such liability
reserve account shall be increased each Plan Year (including the
Plan Year in which the Executive ceases to be employed by the
Bank) by an amount equal to the annual earnings for that Plan Year
determined by the Index (described in Subparagraph I (F)
hereinafter), less the Cost of Funds Expense for that Plan Year
(described in Subparagraph I (G) hereinafter).
E. Index Retirement Benefit:
The Index Retirement Benefit for the Executive for any year shall
be equal to the excess of the annual earnings determined by the
Index [Subparagraph I (F)] for that Plan Year over the Cost of
Funds Expense [Subparagraph I (G)] for that Plan Year.
F. Index:
The amount of the Index for any Plan Year shall be the amount of
money resulting from the aggregate average annual after-tax
percentage yield from all the life insurance policies owned by the
bank or any of its subsidiaries and purchased for the purpose of
financing the banks' benefit plan multiplied by the sum of all
previous year Index amounts and One Million Three Hundred and Five
Thousand and No/100ths Dollars ($1,305,000.00).
G. Cost of Funds Expense:
The Cost of Funds Expense for any Plan Year shall be calculated by
taking the sum of One Million Three Hundred and Five thousand and
No/100ths Dollars plus the amount of any after-tax benefits paid
to the Executive pursuant to this Agreement (Paragraph III
hereinafter) plus the amount of all previous years after-tax Costs
of Funds Expense, and multiplying that sum by the average
after-tax yield of the two-year Treasury xxxx for the Plan Year
plus .375%.
10.10-3
H. Change of Control:
Change of Control shall be deemed to be the cumulative transfer of
more than fifty percent (50%) of the voting stock of the Bank from
the Effective Date of this Agreement. For the purposes of this
Agreement, transfers on account of deaths or gifts, transfers
between family members or transfers to a qualified retirement plan
maintained by the Bank shall not be considered in determining
whether there has been a change in control.
II. EMPLOYMENT
No provision of this Agreement shall be deemed to restrict or limit any
existing employment agreement by and between the Bank and the
Executive, nor shall any conditions herein create specific employment
rights to the Executive nor limit the right of the Employer to
discharge the Executive with or without cause. In a similar fashion, no
provision shall limit the Executive's rights to voluntarily sever the
Executive's employment at any time.
III. INDEX BENEFITS
The following benefits provided by the Bank to the Executive are in the
nature of a fringe benefit and shall in no event be construed to effect
nor limit the Executive's current prospective salary increases, cash
bonuses or profit-sharing distributions or credits.
A. Retirement Benefits:
The executive shall receive the balance in the Executive's
Pre-Retirement Account. The Executive shall have the option, said
option to be exercised at least one (1) year prior to said
retirement, to receive the benefits provided herein in five (5) or
such other number of equal annual installments as designated by
the Executive commencing thirty days following the Executive's
retirement. If the Executive fails to exercise said option, then
the Executive shall receive the payments in five (5) equal annual
installments as provided herein. In addition to these payments,
commencing with the Plan Year in which the Executive attains his
Retirement Date, the Index Retirement Benefit (as defined in
Subparagraph I (E) above) for each year shall be paid to the
Executive until the Executive's death.
B. Death:
Should the Executive die prior to having received the full balance
of the Pre-Retirement Account, the unpaid balance of the
Pre-Retirement Account shall be paid in a lump sum to the
beneficiary selected by the Executive and filed with the Bank. In
the absence of or failure to designate a beneficiary, the unpaid
balance shall be paid in a lump sum to the personal representative
of the Executive's estate.
C. Death Benefit:
Except as set forth above, there is no death benefit provided
under this Agreement.
10.10-4
IV. RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust any
fund or money with which to pay its obligations under this Agreement.
The Executive, the Executive's beneficiary(ies) or any successor in
interest to the Executive shall be and remain simply a general creditor
of the Bank in the same manner as any other creditor having a general
claim for matured and unpaid compensation.
The Bank reserves the absolute right, at its sole discretion, to either
fund the obligations undertaken by this Agreement or to refrain from
funding the same and to determine the exact nature and method of such
funding. Should the Bank elect to fund this Agreement, in whole or in
part, through the purchase of life insurance, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its
sole discretion, to terminate such funding at any time, in whole or in
part. At no time shall the Executive be deemed to have any lien or
right, title or interest in or to any specific funding investment or to
any assets of the Bank.
If the Bank elects to invest in a life insurance, disability or annuity
policy upon the life of the Executive, then the Executive shall assist
the Bank by freely submitting to a physical exam and supplying such
additional information necessary to obtain such insurance or annuities.
V. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
Neither the Executive, his/her surviving spouse nor any other
beneficiary under this Agreement shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute,
modify or otherwise encumber in advance any of the benefits
payable hereunder nor shall any of said benefits be subject to
seizure for the payment of any debts, judgments, alimony or
separate maintenance owed by the Executive or the Executive's
beneficiary, nor be transferable by operation of law in the event
of bankruptcy, insolvency or otherwise.
B. Binding Obligation of Bank and any Successor in Interest:
The Bank expressly agrees that it shall not merge or consolidate
into or with another bank or sell substantially all of its assets
to another bank, firm or person until such bank, firm or person
expressly agrees, in writing to assume and discharge the duties
and obligations of the Bank under this Agreement. This Agreement
shall be binding upon the parties hereto, their successors,
beneficiary(ies), heirs and personal representatives.
C. Revocation
It is agreed by and between the parties hereto that, during the
lifetime of the Executive, this Agreement may be amended or
revoked at any time or times, in whole or in part, by the mutual
written assent of the Executive and the Bank.
D. Gender:
Whenever in this Agreement words are used in the masculine or
neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so
apply.
E. Effect on Other Bank Benefit Plans:
Nothing contained in this Agreement shall affect the right of the
Executive to participate in or be covered by any qualified or
non-qualified pension, profit-sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a
part of the Bank's existing or future compensation structure.
10.10-5
F. Headings:
Headings and subheadings in this Agreement are inserted for
reference and convenience only and shall not be deemed a part of
this Agreement.
G. Applicable Law:
The validity and interpretation of this Agreement shall be
governed by the laws of the State of Indiana.
VI. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
The "Named Fiduciary and Plan Administrator" of this Plan shall be
the German American Bancorp until its removal by the Board. As
Named Fiduciary and Administrator, the German American Bancorp
shall be responsible for the management, control and
administration of the Salary Continuation Agreement as established
herein. 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.
B. Claims Procedure and Arbitration:
In the event a dispute arises over benefits under this Agreement
and benefits are not paid to the Executive (or to the Executive's
beneficiary in the case of the Executive's death) and such
claimants feel they are entitled to receive such benefits, then a
written claim must be made to the Plan Administrator named above
within ninety (90) days from the date payments are refused. The
Plan Administrator shall review the written claim and if the claim
is denied, in whole or in part, they shall provide in writing
within ninety (90) days of receipt of such claim their specific
reasons for such denial, reference to the provisions of this
Agreement upon which the denial is based and any additional
material or information necessary to perfect the claim. Such
written notice shall further indicate the additional steps to be
taken by claimants if a further review of the claim denial is
desired. A claim shall be deemed denied if the Plan Administrator
fails to take any action within the aforesaid ninety-day period.
If claimants desire a second review they shall notify the Plan
Administrator in writing within ninety (90) days of the first
claim denial. Claimants may review this Agreement or any documents
relating thereto and submit any written issues and comments they
may feel appropriate. In its sole discretion, the Plan
Administrator shall then review the second claim and provide a
written decision within ninety (90) days of receipt of such claim.
This decision shall likewise state the specific reasons for the
decision and shall include reference to specific provisions of
this Agreement upon which the decision is based.
10.10-6
If claimants continue to dispute the benefit denial based upon
completed performance of this Agreement or the meaning and effect
of the terms and conditions thereof, then claimants may submit the
dispute to a Board of Arbitration for final arbitration. Said
Board shall consist of one member selected by the claimant, one
member selected by the Bank, and the third member selected by the
first two members. The Board shall operate under any generally
recognized set of arbitration rules. The parties hereto agree that
they and their heirs, personal representative, successors and
assigns shall be bound by the decision of such Board with respect
to any controversy properly submitted to it for determination.
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully
read this Agreement and executed the original thereof on the 5th day of
November, 1998 and that, upon execution, each has received a conforming copy.
GERMAN AMERICAN BANCORP
By/s/Xxxxx X. Xxxxxxx By/s/Xxxx X. Xxxxxxxxx, President
Witness Title
By/s/Xxxxx X. Xxxxxxx By/s/Xxxxxx X. Xxxxxxx
Witness
