FIRST AMENDMENT TO THE HOMEFEDERAL BANK EXCESS BENEFIT PLAN AGREEMENT DATED APRIL 1, 2001 FOR JOHN K. KEACH, JR.
Exhibit
10.4
FIRST
AMENDMENT
TO
THE
HOMEFEDERAL
BANK
DATED
APRIL 1, 2001
FOR
XXXX
X. XXXXX, XX.
THIS
FIRST AMENDMENT is adopted this 24
day of July, 2007, effective as of January 1, 2005, by and between HOMEFEDERAL
BANK f/k/a HOME FEDERAL SAVINGS BANK, a state-chartered bank located in
Columbus, Indiana (the “Bank”), and XXXX X. XXXXX, XX. (the
“Executive”).
The
Bank and the Executive executed the
EXCESS BENEFIT PLAN AGREEMENT on April 1, 2001 (the “Agreement”).
The
undersigned hereby amend the
Agreement for the purpose of bringing the Agreement into compliance with
Section
409A of the Internal Revenue Code. Therefore, the following changes
shall be made:
The
following Section 1.4a shall be added to the Agreement immediately following
Section 1.4:
|
1.4a
|
“Specified
Employee” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Bank if any
stock of
the Bank or any entity required to be aggregated with the Bank
under
Section 414(b) or 414(c) of the Code is publicly traded on an established
securities market or otherwise.
|
Section
1.6 of the Agreement shall be
deleted in its entirety and replaced by the following:
|
1.6
|
“Termination
of Employment” means the termination of the Executive’s employment
with the Bank for reasons other than death or
Disability. Whether a Termination of Employment takes place is
determined based on the facts and circumstances surrounding the
termination of the Executive’s employment. A Termination of
Employment will be considered to have occurred if it is reasonably
anticipated that:
|
|
|
(a)
|
the
Executive will not perform any services for the Bank after Termination
of
Employment, or
|
|
|
(b)
|
the
Executive will continue to provide services to the Bank at an annual
rate
that is less than fifty percent (50%) of the bona fide services
rendered
during the immediately preceding twelve (12) months of
employment.
|
1
The
following Sections 2.1.3, 2.2, 2.3 and 2.4 shall be added to the Agreement
immediately following Section 2.1.2:
|
2.1.3
|
Distribution. Any
distribution under this Section 2.1 shall be interpreted
consistent with the requirements of Section 409A of the Code and
any and
all regulations thereunder, including such regulations as may be
promulgated after the effective date of this
Agreement.
|
|
2.2
|
Restriction
on Timing of Distributions. Notwithstanding any provision of
this Agreement to the contrary, if the Executive
is considered a Specified Employee at Termination of Employment
under such
procedures as established by the Bank in accordance with Section
409A of
the Code, benefit distributions that are made upon Termination
of
Employment may not commence earlier than six (6) months after the
date of
such Termination of Employment; provided, however, that the six (6)
month delay required under this Section 2.2 shall not apply to
the portion
of any payment resulting from the Executive’s “involuntary separation from
service” (as defined in Treas. Reg. § 1.409A 1(n) and including a
“separation from service for good reason,” as defined in Treas. Reg. §
1.409A 1(n)(2)) that (a) is payable no later than the last day
of the
second year following the year in which the separation from service
occurs, and (b) does not exceed two times the lesser of (i) the
Executive’s annualized compensation for the year prior to the year in
which the separation from services occurs, or (ii) the dollar limit
described in Section 401(a)(17) of the Code. Therefore, in the
event this Section 2.2 is applicable to the Executive,
any distribution which would otherwise be paid to the Executive
within the
first six months following the Termination of Employment shall
be
accumulated and paid to the Executive
in a lump sum on the first day of the seventh month following the
Termination of Employment. All subsequent distributions shall
be paid in the manner specified.
|
|
2.3
|
Distributions
Upon Income Inclusion Under Section 409A of the Code. Upon
the inclusion of any amount into the Executive’s income as a result of the
failure of this non-qualified deferred compensation plan to comply
with
the requirements of Section 409A of the Code, to the extent such
tax
liability can be covered by the amount the Bank has accrued with
respect
to the Bank’s obligations hereunder, a distribution shall be made as soon
as is administratively practicable following the discovery of the
plan
failure.
|
|
2.4
|
Change
in Form or Timing of Distributions. All changes in the
form or timing of distributions hereunder must comply with the
following
requirements. The
changes:
|
|
(a)
|
may
not accelerate the time or schedule of any distribution, except
as
provided in Section 409A of the Code and the regulations
thereunder;
|
|
(b)
|
must,
for benefits distributable under Section 2.1, delay the commencement
of
distributions for a minimum of five (5) years from the date the
first
distribution was originally scheduled to be made;
and
|
|
(c)
|
must
take effect not less than twelve (12) months after the election
is
made.
|
2
Section
3.1.2 of the Agreement shall be deleted in its entirety and replaced by the
following:
|
3.1.2
|
Payment
of Benefit. The Bank shall distribute the benefit to the
beneficiary in a lump sum commencing the first day of the month
following
receipt by the Bank of the Executive’s death
certificate.
|
Article
6 of the Agreement shall be deleted in its entirety and replaced by the
following:
Article
6
Claims
And Review Procedures
|
6.1
|
Claims
Procedure. An Executive or Beneficiary (“claimant”) who has
not received benefits under the Agreement that he or she believes
should
be distributed shall make a claim for such benefits as
follows:
|
|
6.1.1
|
Initiation
– Written Claim. The claimant initiates a claim by
submitting to the Plan Administrator a written claim for the
benefits. If such a claim relates to the contents of a notice
received by the claimant, the claim must be made within sixty
(60) days after such notice was received by the
claimant. All other claims must be made within one hundred
eighty (180) days of the date on which the event that caused the
claim to arise occurred. The claim must state with
particularity the determination desired by the
claimant.
|
|
6.1.2
|
Timing
of Plan Administrator Response. The Plan
Administrator shall respond to such claimant within 90 days after
receiving the claim. If the Plan Administrator determines that
special circumstances require additional time for processing the
claim,
the Plan Administrator can extend the response period by an additional
90
days by notifying the claimant in writing, prior to the end of
the initial
90-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and
the date
by which the Plan Administrator expects to render its
decision.
|
|
6.1.3
|
Notice
of Decision. If the Plan Administrator denies part or all
of the claim, the Plan Administrator shall notify the claimant
in writing
of such denial. The Plan Administrator shall write the
notification in a manner calculated to be understood by the
claimant. The notification shall set
forth:
|
|
|
(a)
|
The
specific reasons for the denial;
|
|
|
(b)
|
A
reference to the specific provisions of the Agreement on which
the denial
is based;
|
|
|
(c)
|
A
description of any additional information or material necessary
for the
claimant to perfect the claim and an explanation of why it is
needed;
|
|
|
(d)
|
An
explanation of the Agreement’s review procedures and the time limits
applicable to such procedures; and
|
3
|
|
(e)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
|
|
6.2
|
Review
Procedure. If the Plan Administrator denies part or all of
the claim, the claimant shall have the opportunity for a full and
fair
review by the Plan Administrator of the denial, as
follows:
|
|
6.2.1
|
Initiation
– Written Request. To initiate the review, the claimant,
within 60 days after receiving the Plan Administrator’s notice of denial,
must file with the Plan Administrator a written request for
review.
|
|
6.2.2
|
Additional
Submissions – Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records
and
other information relating to the claim. The Plan Administrator
shall also provide the claimant, upon request and free of charge,
reasonable access to, and copies of, all documents, records and
other
information relevant (as defined in applicable ERISA regulations)
to the
claimant’s claim for benefits.
|
|
6.2.3
|
Considerations
on Review. In considering the review, the Plan
Administrator shall take into account all materials and information
the
claimant submits relating to the claim, without regard to whether
such
information was submitted or considered in the initial benefit
determination.
|
|
6.2.4
|
Timing
of Plan Administrator Response. The Plan Administrator
shall respond in writing to such claimant within 60 days after
receiving
the request for review. If the Plan Administrator determines
that special circumstances require additional time for processing
the
claim, the Plan Administrator can extend the response period by
an
additional 60 days by notifying the claimant in writing, prior
to the end
of the initial 60-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects
to
render its decision.
|
|
6.2.5
|
Notice
of Decision. The Plan Administrator shall notify the
claimant in writing of its decision on review. The Plan
Administrator shall write the notification in a manner calculated
to be
understood by the claimant. The notification shall set
forth:
|
|
|
(a)
|
The
specific reasons for the denial;
|
|
|
(b)
|
A
reference to the specific provisions of the Agreement on which
the denial
is based;
|
|
|
(c)
|
A
statement that the claimant is entitled to receive, upon request
and free
of charge, reasonable access to, and copies of, all documents,
records and
other information relevant (as defined in applicable ERISA regulations)
to
the claimant’s claim for benefits;
and
|
|
|
(d)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
|
4
Article
7 of the Agreement shall be
deleted in its entirety and replaced by the following:
Article
7
Amendments
and Termination
|
7.1
|
Amendments. This
Agreement may be amended only by a written agreement signed by
the Bank
and the Executive. However, the Bank may unilaterally amend
this Agreement to conform with written directives to the Bank from
its
auditors or banking regulators or to comply with legislative changes
or
tax law, including without limitation Section 409A of the Code
and any and
all Treasury regulations and guidance promulgated
thereunder.
|
|
7.2
|
Plan
Termination Generally. The Bank and
Executive may terminate this Agreement at any
time. Except as provided in Section 7.3, the termination of
this Agreement shall not cause a distribution of benefits under
this
Agreement. Rather, after such termination benefit distributions
will be made at the earliest distribution event permitted under
Article 2
or Article 3.
|
|
7.3
|
Plan
Terminations Under Section 409A. Notwithstanding anything
to the contrary in Section 7.2, if this Agreement terminates in
the
following circumstances:
|
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a change in
the
ownership or effective control of the Bank or of the Corporation,
or in
the ownership of a substantial portion of the assets of the Bank
or of the
Corporation as described in Section 409A(2)(A)(v) of the Code,
provided
that termination of this Agreement was effected through an irrevocable
action taken by the Bank and provided further that all distributions
are
made no later than twelve (12) months following such termination
of the
Agreement and that all the Bank's arrangements which are
substantially similar to the Agreement are terminated so the Executive
and
all participants in the similar arrangements are required to receive
all amounts of compensation deferred under the terminated arrangements
within twelve (12) months of the termination of the
arrangements;
|
|
|
(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive's gross income in the latest of (i) the calendar year
in which
the Agreement terminates; (ii) the calendar year in which the amount
is no
longer subject to a substantial risk of forfeiture; or (iii) the
first
calendar year in which the distribution is administratively practical;
or
|
|
|
(c)
|
Upon
the Bank’s termination of this and all other non-account balance plans (as
referenced in Section 409A of the Code or the regulations thereunder),
provided that all distributions are made no earlier than twelve
(12)
months and no later than
|
5
|
|
|
twenty-four
(24) months following such termination, provided further that
the
termination of this Agreement does not occur proximate to the
downturn in
the financial health of the Bank and provided further that the
Bank does
not adopt any new non-account balance plans for a minimum of
three (3)
years following the date of such
termination;
|
then
the
Bank may distribute the amount of the present value of the benefits payable
to
the Executive upon his Termination of Employment, determined using the actuarial
assumptions and factors used in the administration of the Pension Plan, to
the
Executive in a lump sum subject to the above terms.
Section
8.7 of the Agreement shall be deleted in its entirety.
The
following Section 8.10 shall be
added to the Agreement immediately following Section 8.9:
|
8.10
|
Compliance
with Section 409A. This Agreement shall at all times be
administered and the provisions of this Agreement shall be interpreted
consistent with the requirements of Section 409A of the Code and
any and
all regulations thereunder, including such regulations as may be
promulgated after the effective date of this
Agreement.
|
Schedule
A of the Agreement shall be deleted in its entirety.
IN
WITNESS OF THE
ABOVE, the Bank and the Executive hereby consent to this First
Amendment.
|
Executive:
|
HOMEFEDERAL
BANK
|
||
| /s/ Xxxx X. Xxxxx, Xx. |
By
|
/s/ Xxxx X. Xxxxxx | |
|
XXXX
X. XXXXX, XX.
|
Its
|
EVP/CFO | |
|
Acknowledged:
|
|||
|
By
|
/s/ Xxxx X. Xxxxxx | ||
|
Its
|
EVP/CFO | ||
6
