Exhibit 10.9
Form of Director Emeritus Agreement between Xxxxxxxx Federal Savings Bank
and individual directors
FORM OF
XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR EMERITUS AGREEMENT
THIS AMENDED AGREEMENT is made this ___ day of _______________, 20__ by and
between XXXXXXXX FEDERAL SAVINGS BANK (the "Bank"), and [DIRECTOR] (the
"Director"). This amended agreement is a restatement of the agreement previously
entered into by the Bank and the Director as of [date].
INTRODUCTION
To encourage the Director to remain a member of the Bank's Board of
Directors, the Bank is willing to provide Director Emeritus benefits to the
Director. The Bank will pay these benefits from its general assets.
AGREEMENT
The Director and the Bank agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Bank" means Xxxxxxxx Federal Savings Bank and its successors.
1.1.2 "Board Fees" means the remuneration paid to a Director during
the preceding calendar year for his service on the boards of directors of
the Bank and the Company.
1.1.3 "Change of Control" means an event of a nature that: (i) would
be required to be reported in response to Item 1 of the current report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or
(ii) results in a Change of Control of the Bank or the Company within the
meaning of the Home Owners' Loan Act of 1933, as amended, the Federal
Deposit Insurance Act and the Rules and Regulations promulgated by the
Office of Thrift
Supervision ("OTS") (or its predecessor agency), as in effect on the date
hereof (provided, that in applying the definition of Change of control as
set forth under the rules and regulations of the OTS, the Board of
Directors shall substitute its judgment for that of the OTS); or (iii)
without limitation a Change of control shall be deemed to have occurred at
such time as (A) any "person" (as the term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting
securities of the Bank or the Company representing 25% or more of the
Bank's or the Company's outstanding voting securities or right to acquire
such securities except for any voting securities of the Bank purchased by
the Company and any voting securities purchased by any employee benefit
plan of the Bank or the Company, or (B) individuals who constitute the
Board of Directors on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters (3/4) of the directors
comprising the Incumbent Board, or whose nomination for election by the
Company's stockholders was approved by the same Nominating Committee
serving under an Incumbent Board, shall be, for purposes of this clause
(B), considered as though he were a member of the Incumbent Board, or (C) a
plan of reorganization, merger, consolidation, sale of all or substantially
all the assets of the Bank or the Company or similar transaction occurs in
which the Bank or Company is not the resulting entity; provided, however,
that such an event will be deemed to have occurred or to have been
effectuated upon the receipt of all required regulatory approvals not
including the lapse of any statutory waiting periods.
1.1.4 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be references to that
section as it now exists and to any successor provision.
1.1.5 "Company" means Xxxxxxxx Financial Holdings, Inc. and its
successors.
1.1.6 "Disability" means, if the Director is covered by a
Bank-sponsored disability insurance policy, total disability as defined in
such policy without regard to any waiting period. If the Director is not
covered by such a policy, Disability means the Director suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Board of Directors of the Bank, prevents the Director
from performing substantially all of the normal duties of a director. As a
condition to any benefits, the Bank may require the Director to submit to
such physical or mental evaluations and tests as the Bank's Board of
Directors deems appropriate.
1.1.7 "Early Retirement Date" means the Director attaining age 65 and
completing 15 Years of Service.
1.1.8 "Normal Retirement Date" means the Director attaining age 68 and
completing 15 Years of Service.
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1.1.9 "Termination of Service" means the Director's ceasing to be a
member of the Bank's Board of Directors for any reason whatsoever.
1.1.10 "Years of Service" means the total number of twelve-month
periods during which the Director serves as a member of the Company's Board
of Directors.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Director terminates service on or
after the Normal Retirement Date, and for reasons other than death or
Disability, the Bank shall pay to the Director the benefit described in this
Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1 is $500
annually multiplied by the Director's Years of Service; provided, however,
that the Director's annual benefit shall be limited to 50% of the
Director's Board Fees multiplied by his Years of Service.
2.1.2 Payment of Benefit. The Bank shall pay the benefit to the
Director in monthly installments on the first day of each month commencing
with the month following the Director's Termination of Service and
continuing for 179 additional consecutive months.
2.2 Early Retirement Benefit. If the Director terminates service after his
Early Retirement Date but before his Normal Retirement Date, and for reasons
other than death or Disability, the Bank shall pay to the Director the benefit
described in this Section 2.2.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
benefit determined under Schedule A based on the date of the Director's
Termination of Service. Schedule A shall be adjusted to reflect any benefit
level increases determined by the Board of Directors under Section 2.1.1
prior to the Director's Termination of Service. Schedule A is calculated
using the interest method of accounting, a 7.50% discount rate, and
assuming monthly compounding and monthly benefit payments.
2.2.2 Payment of Benefit. The Bank shall pay the benefit to the
Director in monthly installments on the first day of each month commencing
with the month following the Director's Termination of Service and
continuing for 179 additional consecutivemonths.
2.3 Disability Benefit. If the Director terminates service for Disability
prior to the Normal Retirement Date, the Company shall pay to the Director the
benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit
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determined under Schedule A based on the date of the Director's Termination
of Service. Schedule A shall be adjusted to reflect any benefit level
increases determined by the Board of Directors under Section 2.1.1 prior to
the Director's Termination of Service.
2.3.2 Payment of Benefit. The Bank shall pay the benefit to the
Director in monthly installments on the first day of each month commencing
with the month following the Director's Termination of Service and
continuing until the earlier of: (a) the Director's recovery from the
Disability, or (b) 179 additional months.
2.4 Change of Control Benefit. Upon a Change of Control while the Director
is in the active service of the Bank, the Bank shall pay to the Director 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
benefit that would have been paid to the Director under Section 2.1
calculated as if the date of the Change of Control were the Director's
Normal Retirement Date. The Director shall not be required to terminate
service in order to receive a benefit under this Section 2.4.
2.4.2 Payment of Benefit. The Bank shall pay the benefit to the
Director in an unreduced lump sum within sixty (60) days after the Change
of Control.
Article 3
Death Benefits
3.1 Death During Active Service. If the Director dies while in the active
service of the Bank, the Bank shall pay to the Director's beneficiary the
benefit described in this Section 3.1.
3.1.1 Amount of Benefit. The benefit under this Section 3.1 is the
lifetime benefit that would have been paid to the Director under Section
2.1, calculated as if the date of the Director's death were the Director's
Normal Retirement Date.
3.1.2 Payment of Benefit. The Bank shall pay the benefit to the
Director's Beneficiary(ies) on the first day of each month commencing with
the month following the Director's death and continuing for 179 additional
months.
3.2 Death During Benefit Period. If the Director dies after benefit
payments have commenced under this Agreement, but before receiving all such
payments, the Bank shall pay the remaining benefits to the Director's
beneficiary(ies) at the same time and in the same amounts they would have been
paid to the Director had the Director survived.
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Article 4
Beneficiaries
4.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Bank. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and accepted by the Bank during
the Director's lifetime. The Director's beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases the Director, or if the
Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's surviving spouse, if any, and if none,
to the Director's surviving children and the descendants of any deceased child
by right of representation, and if no children or descendants survive, to the
Director's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person otherwise incapable of handling the
disposition of his or her property, the Bank 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 Bank may require proof of
incompetency, minority or guardianship, as it may deem appropriate, prior to
distribution of the benefit. Such distribution shall completely discharge the
Bank from all liability with respect to such benefit.
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the Bank
shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280G of the Code. However, the Bank may pay
benefits to the extent of any excess parachute limitation.
5.2 Termination for Cause. If the Bank terminates the Director's service
for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving moral
turpitude; or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any law or
significant Bank policy committed in connection with the Director's service
and resulting in an adverse financial effect on the Bank.
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5.3 Suicide. No benefits shall be payable if the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Bank.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Bank shall notify the Director's beneficiary in
writing, within ninety (90) days of his or her written application for benefits,
of his or her eligibility or noneligibility for benefits under the Agreement. If
the Bank determines that the beneficiary 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 beneficiary
wishes to have the claim reviewed. If the Bank determines that there are special
circumstances requiring additional time to make a decision, the Bank shall
notify the beneficiary 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
ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Bank not to
be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Bank by filing a petition for
review with the Bank within sixty (60) days after receipt of the notice issued
by the Bank. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Bank of the petition, the
Bank shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Bank orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Bank shall notify the beneficiary of its decision in writing within the
sixty (60) day period, stating specifically the basis of its decision, written
in a manner calculated to be understood by the beneficiary, and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty (60) day period is not sufficient, the decision
may be deferred for up to another sixty (60) day period at the election of the
Bank, but notice of this deferral shall be given to the beneficiary.
Article 7
Amendments and Termination
The Bank may amend or terminate this Agreement at any time if, pursuant to
legislative, judicial or regulatory action, continuation of the Agreement would
(i) cause benefits to be taxable
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to the Director prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Bank (other
than the financial impact of paying the benefits). In the event of any such
amendment or termination, the Director shall be one hundred percent (100%)
vested in the benefit determined under Schedule A.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Director and the Bank,
and their beneficiaries, survivors, executors, administrators and transferees.
8.2 No Guaranty of Employment. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Bank, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service 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 Tax Withholding. The Bank shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Ohio, except to the extent preempted by the laws of the
United States of America.
8.6 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The Agreement represent the mere promise by the Bank 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 Director's life is a general
asset of the Bank to which the Director and beneficiary have no preferred or
secured claim.
IN WITNESS WHEREOF, the Director and a duly authorized Bank officer have
signed this Agreement.
DIRECTOR: Bank:
XXXXXXXX FEDERAL SAVINGS BANK
/s/ [DIRECTOR] By: /s/ Xxxx X. Xxxxx
--------------------------------- ---------------------------------
[Director] Title: Executive Vice President
---------------------------------
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XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR EMERITUS AGREEMENT
XXXXX X. XXXXXXX, XX.
SCHEDULE A
Accrued
Plan Director Emeritus
Date Age Year Liability
--------------------------------------------------------------------------------
1996 51 1 $2,905
1997 52 2 6,036
1998 53 3 9,400
1999 54 4 13,046
2000 55 5 16,964
2001 56 6 21,186
2002 57 7 25,736
2003 58 8 30,639
2004 59 9 35,923
2005 60 10 41,617
2006 61 11 47,753
2007 62 12 54,365
2008 63 13 61,491
2009 64 14 69,170
2010 65 15 77,445
2011 66 16 86,362
2012 67 17 95,972
XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR EMERITUS AGREEMENT
XXXXXXX X. XXXXXXX
SCHEDULE A
Accrued
Plan Director Emeritus
Date Age Year Liability
--------------------------------------------------------------------------------
1996 44 1 $1,809
1997 45 2 3,758
1998 46 3 5,858
1999 47 4 8,122
2000 48 5 10,561
2001 49 6 13,190
2002 50 7 16,023
2003 51 8 19,076
2004 52 9 22,366
2005 53 10 25,911
2006 54 11 29,731
2007 55 12 33,848
2008 56 13 38,284
2009 57 14 43,065
2010 58 15 48,217
2011 59 16 53,769
2012 60 17 59,752
2013 61 18 66,199
2014 62 19 73,147
2015 63 20 80,634
2016 64 21 88,702
2017 65 22 97,397
2018 66 23 106,767
2019 67 24 116,864
XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR EMERITUS AGREEMENT
XXXXXXX X. XXXXXX XX
SCHEDULE A
Accrued
Plan Director Emeritus
Date Age Year Liability
--------------------------------------------------------------------------------
1996 37 1 $1,182
1997 38 2 2,456
1998 39 3 3,828
1999 40 4 5,307
2000 41 5 6,901
2001 42 6 8,619
2002 43 7 10,470
2003 44 8 12,465
2004 45 9 14,614
2005 46 10 16,930
2006 47 11 19,426
2007 48 12 22,116
2008 49 13 25,015
2009 50 14 28,139
2010 51 15 31,505
2011 52 16 35,133
2012 53 17 39,042
2013 54 18 43,255
2014 55 19 47,795
2015 56 20 52,687
2016 57 21 57,959
2017 58 22 63,640
2018 59 23 69,762
2019 60 24 76,359
2020 61 25 83,469
2021 62 26 91,131
2022 63 27 99,387
2023 64 28 108,284
2024 65 29 117,872
2025 66 30 128,204
2026 67 31 139,338
XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR EMERITUS AGREEMENT
XXXXXXX X. XXXXXX
SCHEDULE A
Accrued
Plan Director Emeritus
Date Age Year Liability
--------------------------------------------------------------------------------
1996 46 1 $2,254
1997 47 2 4,683
1998 48 3 7,300
1999 49 4 10,120
2000 50 5 13,159
2001 51 6 16,434
2002 52 7 19,964
2003 53 8 23,768
2004 54 9 27,867
2005 55 10 32,284
2006 56 11 37,044
2007 57 12 42,174
2008 58 13 47,702
2009 59 14 53,659
2010 60 15 60,078
2011 61 16 66,996
2012 62 17 74,451
2013 63 18 82,484
2014 64 19 91,141
2015 65 20 100,470
2016 66 21 110,523
2017 67 22 121,357
XXXXXXXX FEDERAL SAVINGS BANK
DIRECTOR EMERITUS AGREEMENT
XXXXXX X. XXXXXX
SCHEDULE A
Accrued
Plan Director Emeritus
Date Age Year Liability
--------------------------------------------------------------------------------
1996 52 1 $2,570
1997 53 2 5,340
1998 54 3 8,325
1999 55 4 11,542
2000 56 5 15,009
2001 57 6 18,745
2002 58 7 22,771
2003 59 8 27,109
2004 60 9 31,784
2005 61 10 36,822
2006 62 11 42,251
2007 63 12 48,101
2008 64 13 54,406
2009 65 14 61,200
2010 66 15 68,521
2011 67 16 76,411
