RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT FOR ELIZABETH HANCE MAGYAR BANK New Brunswick, New Jersey January 1, 2006 Financial Institution Consulting Corporation Memphis, Tennessee 38117 WATS: 1-800-873-0089 FAX: (901) 684-7414
Exhibit
10.2
RESTATED
EXECUTIVE
SUPPLEMENTAL
FOR
XXXXXXXXX XXXXX
MAGYAR
BANK
New
Brunswick, New Jersey
January
1, 2006
Financial
Institution Consulting Corporation
000
Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxxx 00000
WATS:
0-000-000-0000
FAX:
(000) 000-0000
(000)
000-0000
RESTATED
EXECUTIVE
SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
FOR
XXXXXXXXX XXXXX
This
Restated Executive Supplemental Retirement Income Agreement for Xxxxxxxxx Xxxxx
(the "Agreement"), effective as of the 1st day of January, 2006, amends and
restates the Executive Supplemental Retirement Income Agreement for Xxxxxxxxx
Xxxxx dated February 1, 1996, and formalizes the understanding by and between
MAGYAR BANK (the "Bank"), a state chartered stock savings bank, and XXXXXXXXX
XXXXX, hereinafter referred to as "Executive".
W
I T N E S S E T H :
WHEREAS,
the
Executive is employed by the Bank; and
WHEREAS,
the
Bank recognizes the valuable services heretofore performed by the Executive
and
wishes to encourage continued employment; and
WHEREAS,
the
Executive wishes to be assured that he will be entitled to a certain amount
of
additional compensation for some definite period of time from and after
retirement from active service with the Bank or other termination of employment
and wishes to provide his beneficiary with benefits from and after death; and
WHEREAS,
the
Bank and the Executive wish to provide the terms and conditions upon which
the
Bank shall pay such additional compensation to the Executive after retirement
or
other termination of employment and/or death benefits to his beneficiary after
death; and
WHEREAS,
Section
409A of the Internal Revenue Code of 1986 (the "Code"), as amended, requires
that certain deferred compensation arrangements comply with its terms or subject
the recipient of the compensation to potential taxes and penalties;
and
WHEREAS,
the
Bank desires that the Agreement comply with Code Section 409A and any Treasury
Regulations promulgated thereunder; and
WHEREAS,
the
Bank has adopted this Restated Executive Supplemental Retirement Income
Agreement which controls all issues relating to benefits as described herein;
and
WHEREAS,
the
Board of Directors of the Bank has conditionally approved the Agreement, subject
to the approval of the New Jersey Department of Banking and
Insurance.
NOW,
THEREFORE,
in
consideration of the premises and of the mutual promises herein contained,
the
Bank and the Executive agree as follows:
SECTION
I
DEFINITIONS
When
used
herein, the following words and phrases shall have the meanings below unless
the
context clearly indicates otherwise:
1.1
|
"Accrued
Benefit Account" shall be represented
by
the bookkeeping entries required to record the Executive=s
(i) Phantom Contributions plus (ii) accrued interest, equal to the
Interest Factor, earned to-date on such amounts. However, neither
the
existence of such bookkeeping entries nor the Accrued Benefit Account
itself shall be deemed to create either a trust of any kind, or a
fiduciary relationship between the Bank and the Executive or any
Beneficiary.
|
1.2
|
"Act"
means the Employee Retirement Income Security Act of 1974, as amended
from
time to time.
|
1.3
|
"Bank"
means MAGYAR BANK and any successor
thereto.
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1.4
|
"Beneficiary"
means the person or persons (and their heirs) designated as Beneficiary
in
Exhibit B of this Agreement to whom the deceased Executive=s
benefits are payable. If no Beneficiary is so designated, then the
Executive=s
Spouse, if living, will be deemed the Beneficiary. If the
Executive=s
Spouse is not living, then the Children of the Executive will be
deemed
the Beneficiaries and will take on a per stirpes basis. If there
are no
Children, then the Estate of the Executive will be deemed the
Beneficiary.
|
1.5
|
"Benefit
Age" means the Executive's sixty-fifth (65th) birthday.
|
2
1.6
|
"Benefit
Eligibility Date" means the date on which the Executive is entitled
to
receive any benefit(s) pursuant to Section(s) III or V of this Agreement.
It shall be the first day of the month following the month in which
the
Executive attains his Benefit Age.
|
1.7
|
"Board
of Directors" means the board of directors of the
Bank.
|
1.8
|
"Cause"
means personal dishonesty, willful misconduct, willful malfeasance,
breach
of fiduciary duty involving personal profit, intentional failure
to
perform stated duties, willful violation of any law, rule, regulation
(other than traffic violations or similar offenses), or final
cease-and-desist order, material breach of any provision of this
Agreement, or gross negligence in matters of material importance
to the
Bank.
|
1.9
|
“Change
in Control” shall mean a change in the ownership of the Bank or Company
under paragraph (a) below, a change in effective control of the Bank
or
Company under paragraph (b) below, or a change in the ownership of
a
substantial portion of the assets of the Bank or Company under paragraph
(c) below. For all purposes hereunder, the definition of Change in
Control
shall be construed to be consistent with the requirements of proposed
Treasury Regulation Section 1.409A-3(g), except to the extent that
such
proposed regulations are superseded by subsequent
guidance.
|
For
this
section “persons acting as a group” is defined as follows; Persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the corporation. Persons will not be
considered to be acting as a group solely because they purchase or own stock
of
the same corporation at the same time, or as a result of the same public
offering. If a person, including an entity, owns stock in both corporations
that
enter into a merger, consolidation, purchase or acquisition of stock, or similar
transaction, such shareholder is considered to be acting as a group with other
shareholders in a corporation only with respect to the ownership in that
corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.
(a)
|
Change
in Ownership of the Bank or Company
|
Change
in
the ownership occurs on the date that any one person, or more than one person
acting as a group (as defined above), acquires ownership of stock of the Bank
or
Company that, together with stock held by such person or group, constitutes
more
than 50 percent of the total fair market
3
value
or
total voting power of the stock of such corporation. However, if any one person
or more than one person acting as a group, is considered to own more than 50
percent of the total fair market value or total voting power of the stock of
a
corporation, the acquisition of additional stock by the same person or persons
is not considered to cause a change in the ownership of the corporation or
to
cause a change in the effective control of the corporation.
(b)
|
Change
in the Effective Control of the Bank or
Company
|
A
change
in the effective control of the Bank or Company occurs on the date that either
—
(1)
Any
one person, or more than one person acting as a group (as defined above),
acquires (or has acquired during the 12-month period ending on the date of
the
most recent acquisition by such person or persons) ownership of stock of the
Company possessing 20
percent or more of the total voting power of the stock of the Company (except
that if an individual Director’s agreement is subject to Code Section 409A, then
the required percentage of acquired ownership of stock under this Subsection
1.10 (b)(1) shall be 35 percent or more);
or
(2)
a
majority of members of the Company’s board of directors is replaced during any
12-month period by directors whose appointment or election is not endorsed
by a
majority of the members of the Company’s board of directors prior to the date of
the appointment or election.
(c)
|
Change
in the Ownership of a Substantial Portion of the Bank’s or Company’s
Assets.
|
Change
in
the ownership of a substantial portion of the Bank or Company’s assets occurs on
the date that any one person, or more than one person acting as a group (as
defined above), acquires (or has acquired during the 12-month period ending
on
the date of the most recent acquisition by such person or persons) assets from
the corporation that have a total gross fair market value equal to or more
than
40 percent of the total gross fair market value of all of the assets of the
Bank
or Company immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the Bank
or
Company, or the value of the assets being disposed of, determined without regard
to any liabilities associated with such assets.
1.10
|
"Children"
means all natural or adopted children of the Executive, and issue
of any
predeceased child or children.
|
1.11 |
"Code"
means the Internal Revenue Code of 1986, as amended from time to
time.
|
4
1.12
|
"Contribution(s)"
means those annual contributions which the Bank is required to make
to the
Retirement Income Trust Fund on behalf of the Executive in accordance
with
Subsection 2.1(a) and in the amounts set forth in Exhibit A of the
Agreement.
|
1.13 |
“Company”
shall mean Magyar Bancorp, Inc.
|
1.14
|
(a)
"Disability Benefit" means the benefit payable to the Executive following
a determination, in accordance with Subsection 6.1(a), that he is
no
longer able, properly and satisfactorily, to perform his duties at
the
Bank.
|
(b)
"Disability Benefit-Supplemental" (if applicable) means the benefit payable
to
the Executive=s
Beneficiary upon the Executive=s
death
in accordance with Subsection 6.1(b).
1.15
|
"Effective
Date" of this Agreement shall be January 1st,
2006.
|
1.16
|
"Estate"
means the estate of the Executive.
|
1.17
|
"Interest
Factor" means monthly compounding, discounting or annuitizing, as
applicable, at a rate set forth in
Exhibit A.
|
1.18
|
"Payout
Period" means the time frame during which certain benefits payable
hereunder shall be distributed. Payments shall be made in monthly
installments commencing on the first day of the month following the
occurrence of the event which triggers distribution and continuing
for a
period of one hundred eighty (180) months. Should the Executive make
a
Timely Election to receive a lump sum benefit payment, the
Executive=s
Payout Period shall be deemed to be one (1) month. Notwithstanding
anything herein to the contrary, in the event that the Executive
exercises
the Executive’s withdrawal rights and the Executive is considered a
Specified Employee within the meaning of Code section 409A(a)(2)(B)(i)
at
the time of (i) any distribution due to the Executive’s termination of
employment (for reasons other than death or disability), or (ii)
any
payments to the Retirement Income Trust Fund, then such payments
shall be
delayed until the first day of the seventh full month following the
Executive’s Separation from Service. In such case, the first payment made
to the Executive will consist of an amount equal to seven (7) monthly
installments so that the
Executive
|
5
(or
his
Beneficiary, as applicable) will receive his full benefits hereunder over a
period of 180 months following his Separation from Service.
1.19
|
"Phantom
Contributions" means those annual Contributions which the Bank is
no
longer required to make on behalf of the Executive to the Retirement
Income Trust Fund. Rather, once the Executive has exercised the withdrawal
rights provided for in Subsection 2.2, the Bank shall be required
to
record the annual amounts set forth in Exhibit A of the Agreement
in the
Executive=s
Accrued Benefit Account, pursuant to Subsection 2.1.
|
1.20
|
"Plan
Year" means the twelve (12) month period commencing January 1 and
ending
December 31.
|
1.21
|
“Retirement
Income Trust Fund” means the trust fund account established by the
Executive and into which annual Contributions will be made by the
Bank on
behalf of the Executive pursuant to Subsection 2.1. he contractual
rights
of the Bank and the Executive with respect to the Retirement Income
Trust
fund shall be outlined in a separate writing known as the Xxxxxxxxx
Xxxxx
Grantor Trust Agreement.
|
1.22
|
“Separation
from Service” means the Executive’s death, retirement or termination of
employment with the Bank. No Separation from Service shall be deemed
to
occur due to military leave, sick leave or other bona fide leave
of
absence if the period of such leave does not exceed six months or,
if
longer, so long as the Executive’s right to reemployment is provided by
law or contract. If the leave exceeds six months and the Executive’s right
to reemployment is not provided by law or by contract, then the Executive
shall be have a Separation from Service on the first date immediately
following such six-month period.
|
The
Executive shall not be treated as having a Separation from Service if the
Executive provides more than insignificant services for the Bank following
the
Executive’s actual or purported termination of employment with the Bank.
Services shall be treated as not being insignificant if such services are
performed at an annual rate that is at least equal to 20% of the services
rendered by the Executive for the Bank, on average, during the immediately
preceding three full calendar years of employment (or if employed less than
three years, such shorter period of employment) and the annual base compensation
for such services is at least equal to 20% of the average base compensation
earned during the final
6
three
full calendar years of employment (or if employed less than three years, such
shorter period of employment).
Where
the
Executive continues to provide services to a previous employer in a capacity
other than as an employee, a Separation from Service will not be deemed to
have
occurred if the Executive is providing services at an annual rate that is 50%
or
more of the services rendered, on average, during the immediate preceding three
full calendar years of employment (or if employed less than three years, such
lesser period) and the annual base compensation for such services is 50% or
more
of the annual base compensation earned during the final three full calendar
years of employment (or if less, such lesser period).
1.23
|
“Specified
Employee” means, in the event the Bank or any corporate parent is or
becomes publicly traded, a “key employee” as such term is defined in Code
Section 416(i) without regard to paragraph 5
thereof.
|
1.24
|
"Supplemental
Retirement Income Benefit" means (assuming the normal form of payment
is
applicable) an annual amount (before
taking into account federal and state income taxes), payable in monthly
installments throughout the Payout Period. Such benefit is projected
pursuant to the Agreement for the purpose of determining the Contributions
to be made to the Retirement Income Trust Fund (or Phantom Contributions
to be recorded in the Accrued Benefit Account). The annual Contributions
and Phantom Contributions have been actuarially determined, using
the
assumptions set forth in Exhibit A, in order to fund for the projected
Supplemental Retirement Income Benefit. The Supplemental Retirement
Income
Benefit for which Contributions (or Phantom Contributions) are being
made
(or recorded) is set forth in Exhibit A.
|
1.25
|
"Timely
Election" means the Executive has made an election to change the
form of
his benefit payment(s) from the Retirement Income Trust Fund by filing
with the Administrator a Notice of Election to Change Form of Payment
(Exhibit C of this Agreement), such election having been made prior
to the
event which triggers distribution and at least two (2) years prior
to the
Executive's Benefit Eligibility Date. In the case of benefits payable
from
the Accrued Benefit Account, such election generally shall have been
made
prior to December 31, 2006 (i.e. the last day of the “Transition Period”
for bringing plans into compliance with Code Section 409A).
Notwithstanding any provision herein to the contrary, in the event
that
the Executive exercises his withdrawal rights pursuant to Section
2.2
|
7
herein,
the Executive shall only be permitted to make subsequent changes to the time
or
form of distributions under Section 3.1, 4.1 or 5.1 by meeting each of the
following requirements:
(i) no
election may take effect until at least 12 months after the date on which the
election is made;
(ii) other
than with respect to distributions made on account of death or disability,
the
first payment with respect to which such election is made shall be deferred
for
a period of at least five years from the date such payment would otherwise
have
been made; and
(iii)
|
any
such election must be made at least 12 months prior to the date of
the
first scheduled payment under such
paragraph.
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SECTION
II
BENEFITS
- GENERALLY
2.1
|
(a)
Retirement
Income Trust Fund and Accrued Benefit Account.
The Executive shall establish the Xxxxxxxxx Xxxxx Grantor Trust into
which
the Bank shall be required to make annual Contributions on the
Executive=s
behalf, pursuant to Exhibit A and this Section II of the Agreement.
A
trustee shall be selected by the Executive. The trustee shall maintain
an
account, separate and distinct from the Executive=s
personal contributions, which account shall constitute the Retirement
Income Trust Fund. The trustee shall be charged with the responsibility
of
investing all contributed funds. Distributions from the Retirement
Income
Trust Fund of the Xxxxxxxxx Xxxxx Grantor Trust shall be made by
the
trustee to the Executive, for purposes of payment of any income taxes
due
and owing on Contributions by the Bank to the Retirement Income Trust
Fund, if any, and on any taxable earnings associated with such
Contributions which the Executive shall be required to pay from year
to
year under applicable law prior to actual receipt of any benefit
payments
from the Retirement Income Trust Fund. If the Executive exercises
his
withdrawal rights pursuant to Subsection 2.2, the Bank=s
obligation to make Contributions to the Retirement Income Trust Fund
shall
cease and the Bank=s
obligation to record Phantom Contributions in the Accrued Benefit
Account
shall immediately commence pursuant to Exhibit A and this Section
II of
the Agreement. To the extent this Agreement is inconsistent with
the
Xxxxxxxxx Xxxxx Grantor Trust agreement, this Agreement shall supersede
the Xxxxxxxxx Xxxxx Grantor Trust
agreement.
|
8
The
annual Contributions (or Phantom Contributions) required to be made by the
Bank
to the Retirement Income Trust Fund (or recorded by the Bank in the Accrued
Benefit Account) have been actuarially determined and are set forth in Exhibit
A
which is attached hereto and incorporated herein by reference. Contributions
shall be made by the Bank to the Retirement Income Trust Fund (i) within thirty
(30) days of establishment of such trust, and (ii) within the first five (5)
days of the beginning of each subsequent Plan Year, unless this Section
expressly provides otherwise. Phantom Contributions, if any, shall be recorded
in the Accrued Benefit Account within the first five (5) days of the beginning
of each applicable Plan Year, unless this Section expressly provides otherwise.
Phantom Contributions shall accrue interest at a rate equal to the Interest
Factor, up to and throughout the Payout Period, until the balance of the Accrued
Benefit Account has been fully distributed. Interest on any Phantom Contribution
shall not commence until one (1) calendar year following the date such Phantom
Contribution is initially recorded in the Executive=s
Accrued
Benefit Account.
The
Administrator may review the schedule of annual Contributions (or Phantom
Contributions) provided for in Exhibit A within ten (10) days prior to the
close
of each Plan Year. Such review shall consist of an evaluation of the accuracy
of
all assumptions used to establish the schedule of Contributions (or Phantom
Contributions) required to provide the Supplemental Retirement Income Benefit.
The Administrator may prospectively amend the schedule of Contributions (or
Phantom Contributions) provided for in Exhibit A, should the Administrator
determine during any such review that an increase in such Contributions (or
Phantom Contributions) is necessary or desired in order to provide a benefit
equivalent to the Supplemental Retirement Income Benefit on an after-tax
basis.
(b)
Withdrawal
Rights Not Exercised.
(1)
Contributions
Made Annually
If
the
Executive does not exercise any withdrawal rights pursuant to Subsection 2.2,
the annual Contributions to the Retirement Income Trust Fund included on Exhibit
A shall continue each year, unless this Subsection 2.1(b) specifically states
otherwise, until the earlier of (i) the last Plan Year that Contributions are
required pursuant to Exhibit A, or (ii) the Plan Year of the Executive's
termination of employment.
9
(2)
Termination
Following a Change in Control
If
the
Executive does not exercise his withdrawal rights pursuant to Subsection 2.2
and
a Change in Control occurs at the Bank, followed within sixty (60) months by
either (i) the Executive's involuntary termination of employment, or (ii)
Executive's voluntary termination of employment after: (A) a material change
in
the Executive's function, duties, or responsibilities, which change would cause
the Executive's position to become one of lesser responsibility, importance,
or
scope from the position the Executive held at the time of the Change in Control,
(B) a relocation of the Executive's principal place of employment by more than
thirty (30) miles from its location prior to the Change in Control, or (C)
a
material reduction in the benefits and perquisites to the Executive from those
being provided at the time of the Change in Control, the Contribution set forth
below shall be required of the Bank in addition to all previous annual
Contributions. The Bank shall be required to make a final Contribution to the
Retirement Income Trust Fund within five (5) days of the Executive's termination
of employment (or if the Executive is a Specified Employee, not earlier than
the
first day of the seventh (7th) month following the Executive’s Separation from
Service), in an amount equal to the lesser of (i) the present value (using
the
Interest Factor) of all remaining Contributions which would have been required
to be made on behalf of the Executive, had the Executive remained in the employ
of the Bank until Benefit Age, or (ii) One Dollar ($1.00) less than the total
dollar amount of Contributions which would have resulted in taxation to the
Executive pursuant to sections 280G and 4999 of the Code.
(3)
Termination
For Cause
If
the
Executive (i) does not exercise his withdrawal rights pursuant to Subsection
2.2, and (ii) is terminated for Cause pursuant to Subsection 5.2, no further
Contribution(s) to the Retirement Income Trust Fund shall be required of the
Bank, and if not yet made, no Contribution shall be required for the year in
which such termination for Cause occurs.
(4)
Voluntary
or Involuntary Termination (Not For Cause) of Employment Prior to Benefit
Age.
If
(i)
the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and (ii) the Executive's employment with the Bank is
voluntarily or involuntarily terminated for any reason other than a termination
related to disability, termination for Cause, or termination following a Change
in Control, within ten (10) days of such voluntary or involuntary termination
of
employment, the Bank shall be required to make a final Contribution to the
Retirement Income Trust Fund, attributable to the Plan Year in which the
termination occurs (unless such Contribution is made prior to termination),
in
10
an
amount
equal to the full Contribution required for such Plan Year. No further
Contribution(s) shall be required for periods subsequent to the Plan Year in
which the Executive=s
employment is terminated.
(5)
Death
During Employment.
If
the
Executive (i) does not exercise any withdrawal rights pursuant to
Subsection 2.2, and (ii) dies while employed by the Bank (including
employment following a Change in Control), the Contributions included on
Exhibit A shall be required of the Bank through and including the year in
which the Executive dies. Such Contributions to the Retirement Income Trust
Fund
shall commence in the Plan Year in which the Retirement Income Trust Fund is
established and shall continue, annually, through the Plan Year in which the
Executive dies. No additional Contributions shall be required for any Plan
Year
after the year in which the Executive dies.
(6)
Termination
Due to Disability.
If
the
Executive (i) does not exercise his withdrawal rights pursuant to Subsection
2.2, and (ii) terminates service with the Bank due to a disability pursuant
to
Subsection 6.1, all annual Contributions set forth in Exhibit A for all Plan
Years preceding the year in which such termination occurs shall be required
of
the Bank as well as the final Contribution, set forth below, attributable to
the
Plan Year in which termination occurs (unless such Contribution is made prior
to
termination). The final Contribution to be made by the Bank for the Plan Year
in
which the termination occurs, shall be equal to the full Contribution required
for such Plan Year pursuant to Exhibit A and shall be made within ten (10)
days
of the disability determination. No additional Contributions to the Retirement
Income Trust Fund shall be required for periods subsequent to the Plan Year
in
which the Executive=s
employment is terminated.
(c)
Withdrawal
Rights Exercised.
(1)
Phantom
Contributions Made Annually.
If
the
Executive exercises his withdrawal rights pursuant to Subsection 2.2, no further
Contributions to the Retirement Income Trust Fund shall be required of the
Bank.
Thereafter, Phantom Contributions shall be recorded annually in the Executive's
Accrued Benefit Account on or before the last day of each Plan Year, commencing
with the first Plan Year following the Plan Year in which the Executive
exercises his withdrawal rights. Such Phantom Contributions shall continue
to be
recorded annually,
11
unless
this Subsection 2.1(c) specifically states otherwise, until the earlier of
(i)
the last Plan Year that Phantom Contributions are required pursuant to Exhibit
A, or (ii) the Plan Year of the Executive's termination of
employment.
(2)
Termination
Following a Change in Control
If
the
Executive exercises his withdrawal rights pursuant to Subsection 2.2, Phantom
Contributions shall commence in the first Plan Year following the Plan Year
in
which the Executive first exercises his withdrawal rights. If a Change in
Control occurs at the Bank, and within sixty (60) months of such Change in
Control, the Executive's employment is either (i) involuntarily terminated,
or
(ii) voluntarily terminated by the Executive after: (A) a material change in
the
Executive's function, duties, or responsibilities, which change would cause
the
Executive's position to become one of lesser responsibility, importance, or
scope from the position the Executive held at the time of the Change in Control,
(B) a relocation of the Executive's principal place of employment by more than
thirty (30) miles from its location prior to the Change in Control, or (C)
a
material reduction in the benefits and perquisites to the Executive from those
being provided at the time of the Change in Control, the Phantom Contribution
set forth below shall be required of the Bank in addition to all previous annual
Contributions. The Bank shall be required to record a final lump sum Phantom
Contribution in the Accrued Benefit Account, within five (5) days of such
termination, in an amount equal to the lesser of (i) the present value (using
the Interest Factor) of all remaining Phantom Contributions which would have
been required had the Executive remained in the employ of the Bank until Benefit
Age, or (ii) One Dollar ($1.00) less than the total dollar amount of Phantom
Contributions which would have resulted in taxation to the Executive pursuant
to
sections 280G and 4999 of the Code.
(3)
Termination
For Cause
If
the
Executive is terminated for Cause pursuant to Subsection 5.2, the entire balance
of the Executive=s
Accrued
Benefit Account at the time of such termination, which shall include any Phantom
Contributions which have been recorded plus accrued interest, shall be
forfeited.
(4)
Voluntary
or Involuntary Termination (Not For Cause) of Employment Prior to Benefit
Age.
If
(i)
the Executive exercises his withdrawal rights pursuant to Subsection 2.2, and
(ii) the Executive's employment with the Bank is voluntarily or involuntarily
terminated for any reason other than a termination related to disability,
termination for Cause, or termination following a Change in Control, within
ten
(10) days of such voluntary or involuntary termination of employment, the Bank
shall be
12
required
to record a final Phantom Contribution in the Executive=s
Accrued
Benefit Account, attributable to the Plan Year in which the termination occurs
(unless such Phantom Contribution is recorded prior to termination), in an
amount equal to the full Phantom Contribution required for such Plan Year.
No
further Phantom Contributions shall be required to be recorded for periods
subsequent to the Plan Year in which the Executive=s
employment is terminated.
(5)
Death
During Employment.
If
the
Executive (i) exercises his withdrawal rights pursuant to Subsection 2.2,
and (ii) dies while employed by the Bank (including employment following a
Change in Control), the Phantom Contributions included on Exhibit A shall be
required of the Bank. Such Phantom Contributions to the Accrued Benefit Account
shall commence in the Plan Year in which the Executive exercises his withdrawal
rights and shall continue, annually, through the Plan Year in which the
Executive dies. The final Phantom Contribution, attributable to the Plan Year
of
the Executive=s
death,
shall be equal to (i) the full Phantom Contribution required in accordance
with
Exhibit A for all Plan Year in which the Executive dies, if not recorded prior
to death, plus (ii) the sum of the total Phantom Contributions which would
have
been required in accordance with Exhibit A for all Plan Year(s) following the
Plan Year of the Executive=s
death.
Such final Phantom Contribution shall be recorded in the Accrued Benefit Account
within (10) days of the Executive=s
death.
(6)
Termination
Due to Disability.
If
the
Executive (i) exercises his withdrawal rights pursuant to Subsection 2.2, and
(ii) terminates service with the Bank due to a disability pursuant to Subsection
6.1, the final Phantom Contribution recorded for the Plan Year in which the
termination occurs shall be required for such Plan Year pursuant to Exhibit
A
and shall be recorded in the Accrued Benefit Account within ten (10) days of
the
disability determination. No additional Phantom Contributions shall be required
to be recorded in the Accrued Benefit Account for periods subsequent to the
Plan
Year in which the Executive=s
employment is terminated.
2.2
|
Withdrawals
From Retirement Income Trust
Fund.
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Exercise
of withdrawal rights by the Executive pursuant to the Xxxxxxxxx Xxxxx Grantor
Trust agreement shall terminate the Bank's obligation to make any further
Contributions to the Retirement Income Trust Fund, and the Bank=s
obligation to record Phantom Contributions pursuant to Subsection
13
2.1(c)
shall commence. For purposes of this Subsection 2.2, Aexercise
of withdrawal rights@
shall
mean those withdrawal rights to which the Executive is entitled under Article
III of the Xxxxxxxxx Xxxxx Grantor Trust agreement and shall exclude any
distributions made by the trustee of the Retirement Income Trust Fund to the
Executive for purposes of payment of income taxes in accordance with Subsection
2.1 of this Agreement, or other trust expenses properly payable from the
Xxxxxxxxx Xxxxx Grantor Trust pursuant to the provisions of the trust
document.
2.3 Benefits
Payable From Retirement Income Trust Fund
Notwithstanding
anything else to the contrary in this Agreement, in the event that the trustee
of the Retirement Income Trust Fund purchases a life insurance policy with
the
Contributions to and, if applicable, earnings of the Trust, and such life
insurance policy is intended to continue in force beyond the Payout Period
for
the disability or retirement benefits payable from the Retirement Income Trust
Fund pursuant to this Agreement, then the Trustee shall have the absolute and
sole discretion to determine the portion of the cash value of such policy
available for purposes of annuitizing the Retirement Income Trust Fund to
provide the disability or retirement benefits payable under this Agreement,
after taking into consideration the amounts reasonably believed to be required
in order to maintain the cash value of such policy to continue such policy
in
effect until the death of the Executive and payment of death benefits
thereunder.
SECTION
III
RETIREMENT
BENEFIT
3.1
|
(a)
Normal
form of payment.
|
If
(i)
the Executive is employed with the Bank until reaching his Benefit Age,
including employment with the Bank until Benefit Age following a Change in
Control, and (ii) the Executive has not made a Timely Election to receive a
lump
sum benefit, this Subsection 3.1(a) shall be controlling with respect to
retirement benefits.
|
The
Retirement Income Trust Fund, measured as of the Executive's Benefit
Age,
shall be annuitized (using the Interest Factor) into monthly installments
and shall be payable for the Payout Period. Such benefit payments
shall
commence on the Executive's Benefit Eligibility Date. Should Retirement
Income Trust Fund assets actually earn a rate of return, following
the
date such balance is annuitized, which is less than the rate of return
used to annuitize the Retirement Income Trust Fund, no additional
contributions to the Retirement Income Trust Fund shall be required
by the
Bank in order to fund the
|
14
final
benefit payment(s) and make up for any shortage attributable to the
less-than-expected rate of return. Should Retirement Income Trust Fund assets
actually earn a rate of return, following the date such balance is annuitized,
which is greater than the rate of return used to annuitize the Retirement Income
Trust Fund, the final benefit payment to the Executive (or his Beneficiary)
shall distribute the excess amounts attributable to the greater-than-expected
rate of return. In the event the Executive dies at any time after attaining
his
Benefit Age, but prior to commencement or completion of all the payments due
and
owing hereunder, (i) the trustee of the Retirement Income Trust Fund shall
pay
to the Executive's Beneficiary the monthly installments (or a continuation
of
such monthly installments if they have already commenced) for the balance of
months remaining in the Payout Period, or (ii) the Executive's Beneficiary
may
request to receive the unpaid balance of the Executive's Retirement Income
Trust
Fund in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, payment of the balance of the Retirement Income Trust Fund in
such
lump sum form shall be made only if the Executive's Beneficiary (i) obtains
approval from the trustee of the Xxxxxxxxx Xxxxx Grantor Trust and (ii) notifies
the Administrator in writing of such election within ninety (90) days of the
Executive's death. Such lump sum payment, if approved by the trustee, shall
be
payable within thirty (30) days of such trustee approval.
The
Executive=s
Accrued
Benefit Account (if applicable), measured as of the Executive=s
Benefit
Age, shall be annuitized (using the Interest Factor) into monthly installments
and shall be payable for the Payout Period. Such benefit payments shall commence
on the Executive=s
Benefit
Eligibility Date. In the event the Executive dies at any time after attaining
his Benefit Age, but prior to commencement or completion of all the payments
due
and owing hereunder, the Bank shall pay to the Executive=s
Beneficiary the same monthly installments (or a continuation of such monthly
installments if they have already commenced) for the balance of months remaining
in the Payout Period.
(b)
Alternative
Payout Option
If
(i)
the Executive is employed with the Bank until reaching his Benefit Age,
including employment with the Bank until Benefit Age following a Change in
Control, and (ii) the Executive has made a Timely Election to receive a lump
sum
benefit, this Subsection 3.1(b) shall be controlling with respect to retirement
benefits.
The
balance of the Retirement Income Trust Fund and the Accrued Benefit Account
(if
applicable), measured as of the Executive=s
Benefit
Age, shall be paid to the Executive in a lump sum on his Benefit Eligibility
Date. In the event the Executive dies after becoming eligible for such
payment
15
(upon
attainment of his Benefit Age), but before the actual payment is made, his
Beneficiary shall be entitled to receive the lump sum benefit in accordance
with
this Subsection 3.1(b) within thirty (30) days of the date the Administrator
receives notice of the Executive's death. Notwithstanding the foregoing, unless
the Executive has made a Timely Election to receive a lump sum distribution
with
respect to the Accrued Benefit Account, distributions from the Accrued Benefit
Account will be paid over the Payout Period commencing within thirty (30) days
of the Executive=s
Benefit
Age.
SECTION
IV
PRE-RETIREMENT
DEATH BENEFIT
4.1
|
(a)
Normal
form of payment.
|
If
(i)
the Executive dies while employed by the Bank, including the
Executive=s
death
while employed by the Bank following a Change in Control, and (ii) the Executive
has not made a Timely Election to receive a lump sum benefit, this Subsection
4.1(a) shall be controlling with respect to pre-retirement death
benefits.
The
Executive=s
Retirement Income Trust Fund, measured as of the Executive=s
date of
death and including any contributions made to the Retirement Income Trust Fund
for the year in which the Executive dies, shall be annuitized (using the
Interest Factor) into monthly installments and shall be payable to the
Executive's Beneficiary for the Payout Period. Such benefit payments shall
commence within thirty (30) days of the date the Administrator receives notice
of the Executive's death. Should Retirement Income Trust Fund assets actually
earn a rate of return, following the date such balance is annuitized, which
is
less than the rate of return used to annuitize the Retirement Income Trust
Fund,
no additional contributions to the Retirement Income Trust Fund shall be
required by the Bank in order to fund the final benefit payment(s) and make
up
for any shortage attributable to the less-than-expected rate of return. Should
Retirement Income Trust Fund assets actually earn a rate of return, following
the date such balance is annuitized, which is greater than the rate of return
used to annuitize the Retirement Income Trust Fund, the final benefit payment
to
the Executive's Beneficiary shall distribute the excess amounts attributable
to
the greater-than-expected rate of return. The Executive's Beneficiary may
request to receive the unpaid balance of the Executive's Retirement Income
Trust
Fund in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, payment of the balance of the Retirement Income Trust Fund in
such
lump sum form shall be made only if the Executive's Beneficiary (i) obtains
approval from the trustee of the Xxxxxxxxx Xxxxx Grantor Trust and (ii) notifies
the Administrator in writing of such election within ninety (90) days of the
Executive's Fund in a lump sum payment. If a lump sum payment is requested
by
the Beneficiary, payment of the balance of the Retirement Income Trust Fund
in
such lump sum form shall be made only if the Executive's Beneficiary (i) obtains
approval from the trustee of the Xxxxxxxxx Xxxxx Grantor Trust and (ii) notifies
the Administrator in writing of such election within ninety (90) days of the
Executive's
16
death.
Such lump sum payment, if approved by the trustee, shall be made within thirty
(30) days of such trustee approval.
The
Executive=s
Accrued
Benefit Account (if applicable), measured as of the Executive's death, shall
be
annuitized (using the Interest Factor) into monthly installments and shall
be
payable to the Executive's Beneficiary for the Payout Period. Such benefit
payments shall commence within thirty (30) days of the date the Administrator
receives notice of the Executive=s
death.
(b)
Alternative
Payout Option
If
(i)
the Executive dies while employed by the Bank, including the Executive's death
while employed by the Bank following a Change in Control, and (ii) the Executive
has made a Timely Election to receive a lump sum benefit, this Subsection 4.1(b)
shall be controlling with respect to pre-retirement death benefits.
The
balance of the Executive=s
Retirement Income Trust Fund and the Accrued Benefit Account (if applicable),
measured as of the Executive=s
death,
shall be paid to the Executive's Beneficiary in a lump sum within thirty (30)
days of the date the Administrator receives notice of the Executive's death.
Notwithstanding the foregoing, unless the Executive has made a Timely Election
to receive a lump sum distribution with respect to the Accrued Benefit Account,
distributions from the Accrued Benefit Account will be paid over the Payout
Period commencing within thirty (30) days of the date the Administrator receives
notice of the Executive=s
death.
SECTION
V
BENEFIT(S)
IN THE EVENT OF TERMINATION OF SERVICE
PRIOR
TO BENEFIT AGE
5.1
|
Voluntary
or Involuntary Termination of Service Other Than for Cause.
In the event the Executive=s
service with the Bank is voluntarily or involuntarily terminated
prior to
Benefit Age, for any reason including a Change in Control, but excluding
(i) any termination related to disability which shall be covered
in
Section VI, (ii) the Executive's pre-retirement death, which shall
be
covered in Section IV, or (iii) termination for Cause, which shall
be
covered in Subsection 5.2, the Executive (or his Beneficiary) shall
be
entitled to receive benefits in accordance with this Subsection 5.1.
Payments of
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17
benefits
pursuant to this Subsection 5.1 shall be made in accordance with Subsection
5.1
(a) or 5.1 (b) below, as applicable.
(a)
Normal
form of payment.
(1)
Executive
Lives Until Benefit Age
If
(i)
after such termination, the Executive lives until attaining his Benefit Age,
and
(ii) the Executive has not made a Timely Election to receive a lump sum benefit,
this Subsection 5.1(a)(1) shall be controlling with respect to retirement
benefits.
The
Retirement Income Trust Fund, measured as of the Executive's Benefit Age, shall
be annuitized (using the Interest Factor) into monthly installments and shall
be
payable for the Payout Period. Such payments shall commence on the Executive's
Benefit Eligibility Date. Should Retirement Income Trust Fund assets actually
earn a rate of return, following the date such balance is annuitized, which
is
less than the rate of return used to annuitize the Retirement Income Trust
Fund,
no additional contributions to the Retirement Income Trust Fund shall be
required by the Bank in order to fund the final benefit payment(s) and make
up
for any shortage attributable to the less-than-expected rate of return. Should
Retirement Income Trust Fund assets actually earn a rate of return, following
the date such balance is annuitized, which is greater than the rate of return
used to annuitize the Retirement Income Trust Fund, the final benefit payment
to
the Executive (or his Beneficiary) shall distribute the excess amounts
attributable to the greater-than-expected rate of return. In the event the
Executive dies at any time after attaining his Benefit Age, but prior to
commencement or completion of all the payments due and owing hereunder, (i)
the
trustee of the Retirement Income Trust Fund shall pay to the Executive's
Beneficiary the monthly installments (or a continuation of the monthly
installments if they have already commenced) for the balance of months remaining
in the Payout Period, or (ii) the Executive's Beneficiary may request to receive
the unpaid balance of the Executive's Retirement Income Trust Fund in a lump
sum
payment. If a lump sum payment is requested by the Beneficiary, payment of
the
balance of the Retirement Income Trust Fund in such lump sum form shall be
made
only if the Executive's Beneficiary (i) obtains approval from the trustee of
the
Xxxxxxxxx Xxxxx Grantor Trust and (ii) notifies the Administrator in writing
of
such election within ninety (90) days of the
Executive's death. Such lump sum payment, if approved by the trustee, shall
be
made within thirty (30) days of such trustee approval.
The
Executive=s
Accrued
Benefit Account (if applicable), measured as of the Executive=s
Benefit
Age, shall be annuitized (using the Interest Factor) into monthly installments
and shall be payable for the
18
Payout
Period. Such benefit payments shall commence on the Executive=s
Benefit
Eligibility Date. In the event the Executive dies at any time after attaining
his Benefit Age, but prior to commencement or completion of all the payments
due
and owing hereunder, the Bank shall pay to the Executive=s
Beneficiary the same monthly installments (or a continuation of such monthly
installments if they have already commenced) for the balance of months remaining
in the Payout Period.
(2)
Executive
Dies Prior to Benefit Age
If
(i)
after such termination, the Executive dies prior to attaining his Benefit Age,
and (ii) the Executive has not made a Timely Election to receive a lump sum
benefit, this Subsection 5.1(a)(2) shall be controlling with respect to
retirement benefits.
The
Retirement Income Trust Fund, measured as of the date of the Executive's death,
shall be annuitized (using the Interest Factor) into monthly installments and
shall be payable for the Payout Period. Such benefit payments shall commence
within thirty (30) days of the date the Administrator receives notice of the
Executive's death. Should Retirement Income Trust Fund assets actually earn
a
rate of return, following the date such balance is annuitized, which is less
than the rate of return used to annuitize the Retirement Income Trust Fund,
no
additional contributions to the Retirement Income Trust Fund shall be required
by the Bank in order to fund the final benefit payment(s) and make up for any
shortage attributable to the less-than-expected rate of return. Should
Retirement Income Trust Fund assets actually earn a rate of return, following
the date such balance is annuitized, which is greater than the rate of return
used to annuitize the Retirement Income Trust Fund as of the date of the
Executive's death, the final benefit payment to the Executive's Beneficiary
shall distribute the excess amounts attributable to the greater-than-expected
rate of return. The Executive's Beneficiary may request to receive the unpaid
balance of the Executive's Retirement Income Trust Fund in the form of a lump
sum payment. If a lump sum payment is requested by the Beneficiary, payment
of
the balance of the Retirement Income Trust Fund in such lump sum form shall
be
made only if the Executive's Beneficiary (i) obtains approval from the trustee
of the Xxxxxxxxx Xxxxx Grantor Trust and (ii) notifies the Administrator in
writing of such election within ninety (90) days of the Executive's death.
Such
lump sum payment, if approved by the trustee, shall be made within thirty (30)
days of such trustee approval.
19
The
Executive=s
Accrued
Benefit Account (if applicable), measured as of the date of the
Executive=s
death,
shall be annuitized (using the Interest Factor) into monthly installments and
shall be payable for the Payout Period. Such payments shall commence within
thirty (30) days of the date the Administrator receives notice of the
Executive=s
death.
(b)
Alternative
Payout Option
(1)
Executive
Lives Until Benefit Age
If
(i)
after such termination, the Executive lives until attaining his Benefit Age,
and
(ii) the Executive has made a Timely Election to receive a lump sum benefit,
this Subsection 5.1(b)(1) shall be controlling with respect to retirement
benefits.
The
balance of the Retirement Income Trust Fund and the Accrued Benefit Account
(if
applicable), measured as of the Executive's Benefit Age, shall be paid to the
Executive in a lump sum on his Benefit Eligibility Date. In the event the
Executive dies after becoming eligible for such payment (upon attainment of
his
Benefit Age), but before the actual payment is made, his Beneficiary shall
be
entitled to receive the lump sum benefit in accordance with this Subsection
5.1(b)(1) within thirty (30) days of the date the Administrator receives notice
of the Executive's death. Notwithstanding the foregoing, unless the Executive
has made a Timely Election to receive a lump sum distribution with respect
to
the Accrued Benefit Account, distributions from the Accrued Benefit Account
will
be paid over the Payout Period commencing within thirty (30) days of the
Executive=s
Benefit
Age.
(2)
Executive
Dies Prior to Benefit Age
If
(i)
after such termination, the Executive dies prior to attaining his Benefit Age,
and (ii) the Executive has made a Timely Election to receive a lump sum benefit,
this Subsection 5.1(b)(2) shall be controlling with respect to retirement
benefits.
The
balance of the Retirement Income Trust Fund and the Accrued Benefit Account
(if
applicable), measured as of the date of the Executive's death, shall be paid
to
the Executive's Beneficiary within thirty (30) days of the date the
Administrator receives notice of the Executive's death. Notwithstanding the
foregoing, unless the Executive has made a Timely Election to receive a lump
sum
distribution with respect to the Accrued Benefit Account, distributions from
the
Accrued Benefit Account will be paid over the Payout Period commencing within
thirty (30) days of the date the Administrator receives notice of the
Executive=s
death.
20
5.2
Termination
For Cause.
If
the
Executive is terminated for Cause, all benefits under this Agreement, other
than
those which can be paid from previous Contributions to the Retirement Income
Trust Fund (and earnings on such Contributions), shall be forfeited.
Furthermore, no further Contributions (or Phantom Contributions, as applicable)
shall be required of the Bank for the year in which such termination for Cause
occurs (if not yet made). The Executive shall be entitled to receive a benefit
in accordance with this Subsection 5.2.
The
balance of the Executive=s
Retirement Income Trust Fund shall be paid to the Executive in a lump sum on
his
Benefit Eligibility Date. In the event the Executive dies prior to his Benefit
Eligibility Date, his Beneficiary shall be entitled to receive the balance
of
the Executive's Retirement Income Trust Fund in a lump sum within thirty (30)
days of the date the Administrator receives notice of the Executive's death.
SECTION
VI
OTHER
BENEFITS
6.1
|
(a)
Disability
Benefit.
|
If
the
Executive's service is terminated prior to Benefit Age due to a disability
which
meets the criteria set forth below, the Executive may request to receive the
Disability Benefit in lieu of the retirement benefit(s) available pursuant
to
Section 5.1 (which is (are) not available prior to the Executive's Benefit
Eligibility Date).
Notwithstanding
any other provision hereof,
the
Executive shall receive a lump sum Disability Benefit hereunder in any case
in
which it is determined that the Executive is “disabled.” For these purposes, a
distribution from the Accrued Benefit Account (but not the Retirement Income
Trust Fund) due to disability shall require a determination that the Executive
is “disabled” within the meaning of proposed Treasury Regulation Section
1.409A-3(g)(4). The lump sum benefit(s) to which the Executive is entitled
shall
include: (i) the balance of the Retirement Income Trust Fund, plus (ii) the
balance of the Accrued Benefit Account (if applicable), both measured as of
the
disability determination date. The benefit(s) shall be paid within thirty (30)
days following the date of the Executive's final disability determination.
In
the event the Executive dies after becoming eligible for such payment(s) but
before the actual payment(s) is (are) made, his Beneficiary shall be entitled
to
21
receive
the benefit(s) provided for in this Subsection 6.1(a) within thirty (30) days
of
the date the Administrator receives notice of the Executive's
death.
(b)
Disability
Benefit - Supplemental.
If
Board
of Director approval is obtained within thirty (30) days of the
Executive=s
death,
the Bank shall make a direct, lump sum payment to the Executive's Beneficiary
in
an amount equal to the following: the sum of all remaining Contributions (or
Phantom Contributions) set forth in Exhibit A, but not required pursuant to
Subsection 2.1(b) (or 2.1(c)) due to the Executive's disability-related
termination. Such lump sum payment, if approved by the Board of Directors,
shall
be payable within thirty (30) days of such Board of Director
approval.
SECTION
VII
BENEFICIARY
DESIGNATION
The
Executive shall make an initial designation of primary and secondary
Beneficiaries upon execution of this Agreement and shall have the right to
change such designation, at any subsequent time, by submitting to (i) the
Administrator, and
(ii) the
trustee of the Retirement Income Trust Fund, in substantially the form attached
as Exhibit B to this Agreement, a written designation of primary and secondary
Beneficiaries. Any Beneficiary designation made subsequent to execution of
this
Agreement shall become effective only when receipt thereof is acknowledged
in
writing by the Administrator.
SECTION
VIII
EXECUTIVE'S
RIGHT TO ASSETS
The
rights of the Executive, any Beneficiary, or any other person claiming through
the Executive under this Agreement, shall be solely those of an unsecured
general creditor of the Bank, unless this Agreement provides otherwise. The
Executive, the Beneficiary, or any other person claiming through the Executive,
shall only have the right to receive from the Bank those payments so specified
under this Agreement. The Executive agrees that he, his Beneficiary, or any
other person claiming through him shall have no rights or interests whatsoever
in any asset of the Bank, including any insurance policies or contracts which
the Bank may possess or obtain to informally fund this Agreement. Any asset
used
or acquired by the Bank in connection with the liabilities it has assumed under
this
22
Agreement,
unless expressly provided herein, shall not be deemed to be held under any
trust
for the benefit of the Executive or his Beneficiaries, nor shall any asset
be
considered security for the performance of the obligations of the Bank. Any
such
asset shall be and remain, a general, unpledged, and unrestricted asset of
the
Bank.
SECTION
IX
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, unless this Agreement
provides otherwise. Except as otherwise provided for in this Agreement, the
Executive, his Beneficiaries or any successor in interest to him shall be and
remain simply a general unsecured 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 in its sole discretion to either purchase
assets to meet its obligations undertaken by this Agreement or to refrain from
the same and to determine the extent, nature, and method of such asset
purchases. Should the Bank decide to purchase assets such as life insurance,
mutual funds, disability policies or annuities, the Bank reserves the absolute
right, in its sole discretion, to terminate such assets at any time, in whole
or
in part. At no time shall the Executive be deemed to have any lien, right,
title
or interest in or to any specific 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 examination and by supplying such additional
information necessary to obtain such insurance or annuities.
SECTION
X
ACT
PROVISIONS
10.1
|
Named
Fiduciary and Administrator.
The Bank shall be the Administrator (the "Administrator") of this
Agreement. As Administrator, the Bank shall be responsible for the
management, control and administration of the Agreement as established
herein and shall be responsible for designation of the initial trustee,
of
the related rabbi trust, in accordance with the formal agreement
establishing such trust. The Administrator may delegate to others
certain
aspects of the management and operational responsibilities of the
Agreement, including the employment of advisors and the delegation
of
ministerial duties to qualified
individuals.
|
23
10.2
|
Claims
Procedure and Arbitration.
In the event that benefits under this Agreement are not paid to the
Executive (or to his 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 Administrator within sixty (60)
days
from the date payments are refused. The Administrator shall review
the
written claim and, if the claim is denied, in whole or in part, it
shall
provide in writing, within ninety (90) days of receipt of such claim,
its
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 writing by the
Administrator shall further indicate the additional steps which must
be
undertaken by claimants if an additional review of the claim denial
is
desired.
|
If
claimants desire a second review, they shall notify the Administrator in writing
within sixty (60) days of the first claim denial. Claimants may review this
Agreement or any documents relating thereto and submit any issues and comments,
in writing, they may feel appropriate. In its sole discretion, the Administrator
shall then review the second claim and provide a written decision within sixty
(60) days of receipt of such claim. This decision shall state the specific
reasons for the decision and shall include reference to specific provisions
of
this Agreement upon which the decision is based. If such determination is
favorable to the claimants, it shall be binding and conclusive. If such
determination is adverse to such claimants, it shall be binding and conclusive
unless the claimants (i) notify the Administrator within ninety (90) days after
receipt by the claimants of the Administrator's determination, that the
claimants intend to institute legal proceedings challenging the determination
of
the Administrator, and (ii) actually institute such legal proceedings within
one
hundred eighty (180) days of receipt by the claimants of the Administrator's
determination.
SECTION
XI
MISCELLANEOUS
11.1
|
No
Effect on Employment Rights.
Nothing contained herein will confer upon the Executive the right
to be
retained in the service of the Bank nor limit the right of the Bank
to
discharge or otherwise deal with the Executive, in accordance with
the
bylaws of the Bank, without regard to the existence of the Agreement.
Pursuant to 12 C.F.R. '
563.39(b), the following conditions shall apply to this
Agreement:
|
24
(1) |
The
Bank's Board of Directors may terminate the Executive at any time,
but any
termination by the Bank's Board of Directors other than termination
for
Cause shall not prejudice the Executive's vested right to compensation
or
other benefits under the contract. As provided in Subsection 5.2,
the
Executive shall have no right to receive additional compensation
or other
benefits, other than those provided for in Subsection 5.2, after
termination for Cause.
|
(2)
|
If
the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served
under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance
Act (12
U.S.C. 1818(e)(3) and (g)(1)) the Bank's obligations under the contract
shall be suspended (except vested rights) as of the date of termination
of
service unless stayed by appropriate proceedings. If the charges
in the
notice are dismissed, the Bank may in its discretion (i) pay the
Executive
all or part of the compensation withheld while its contract obligations
were suspended and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
|
(3)
|
If
the Executive is terminated and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued
under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance
Act (12
U.S.C. 1818(e)(4) or (g)(1)), all non-vested obligations of the Bank
under
the contract shall terminate as of the effective date of the order.
|
(4)
|
If
the Bank is in default (as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act), all non-vested obligations under the contract
shall terminate as of the date of default.
|
(5)
|
All
non-vested obligations under the contract shall be terminated, except
to
the extent determined that continuation of the contract is necessary
for
the continued operation of the
Bank:
|
(i)
|
by
the Director of the Federal Deposit Insurance Corporation or his
designee
at the time the Federal Deposit Insurance Corporation enters into
an
|
25
agreement
to provide assistance to or on behalf of
the Bank under the authority contained in '
13(c) of
the Federal Deposit Insurance Act; or
(ii)
|
by
the Director of the Federal Deposit Insurance Corporation or his
designee,
at the time the Director or his designee approves a supervisory merger
to
resolve problems related to operation of the Bank or when the Bank
is
determined by the Director to be in an unsafe or unsound
condition.
|
Any
rights of the parties that have already vested, (i.e., the balance of the
Executive's Retirement Income Trust Fund and the balance of the
Executive=s
Accrued
Benefit Account, if applicable), however, shall not be affected by such
action.
11.2
|
Governing
Law.
The Agreement is established under, and will be construed according
to,
the laws of the state of New Jersey, to the extent such laws are
not
preempted by the Act or other applicable federal law and valid regulations
published thereunder.
|
11.3
|
Construction
and Severability.
The funding of and payment of benefits from the Accrued Benefit Account
is
deemed to be a nonqualified deferred compensation arrangement within
the
meaning of Code Section 409A. To the extent that the funding of a
benefit
under the Retirement Income Trust Fund under this Agreement is deemed
to
be a nonqualified deferred compensation arrangement, then that part
of
this Agreement shall also be operated, administered and construed
consistent with Code Section 409A. To the extent that a provision
of the
Agreement fails to comply with Code Section 409A and a construction
consistent with Code Section 409A is not possible, such provision
shall be
void ab initio.
In addition, the Agreement shall be subject to amendment, with or
without
advance notice to Executive and other interested parties, and on
a
prospective or retroactive basis, including but not limited to amendment
in a manner that adversely affects the rights of Executives and other
interested parties, to the extent necessary to effect compliance
with Code
Section 409A. In the event that any of the provisions of this Agreement
or
portion thereof, are held to be inoperative or invalid by any court
of
competent jurisdiction, then: (1) insofar as is reasonable, effect
will be
given to the intent manifested in the provisions held invalid or
inoperative, and (2) the validity and enforceability of the remaining
provisions will not be affected
thereby.
|
26
11.4
|
Incapacity
of Recipient.
In the event the Executive is declared incompetent and a conservator
or
other person legally charged with the care of his person or Estate
is
appointed, any benefits under the Agreement to which such Executive
is
entitled shall be paid to such conservator or other person legally
charged
with the care of his person or Estate.
|
11.5
|
Unclaimed
Benefit.
The Executive shall keep the Bank informed of his current address
and the
current address of his Beneficiaries. The Bank shall not be obligated
to
search for the whereabouts of any person. If the location of the
Executive
is not made known to the Bank as of the date upon which any payment
of any
benefits from the Accrued Benefit Account may first be made, the
Bank
shall delay payment of the Executive's benefit payment(s) until the
location of the Executive is made known to the Bank; however, the
Bank
shall only be obligated to hold such benefit payment(s) for the Executive
until the expiration of thirty-six (36) months. Upon expiration of
the
thirty-six (36) month period, the Bank may discharge its obligation
by
payment to the Executive's Beneficiary. If the location of the Executive's
Beneficiary is not made known to the Bank by the end of an additional
two
(2) month period following expiration of the thirty-six (36) month
period,
the Bank may discharge its obligation by payment to the Executive's
Estate. If there is no Estate in existence at such time or if such
fact
cannot be determined by the Bank, the Executive and his Beneficiary(ies)
shall thereupon forfeit any rights to the balance, if any, of the
Executive=s
Accrued Benefit Account provided for such Executive and/or Beneficiary
under this Agreement.
|
11.6
|
Limitations
on Liability.
Notwithstanding any of the preceding provisions of the Agreement,
no
individual acting as an employee or agent of the Bank, or as a member
of
the Board of Directors shall be personally liable to the Executive
or any
other person for any claim, loss, liability or expense incurred in
connection with the Agreement.
|
11.7
|
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.
|
11.8
|
Effect
on Other Corporate Benefit Agreements.
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 agreement constituting a part of the
Bank's
existing or future compensation
structure.
|
27
11.9
|
Suicide.
Notwithstanding anything to the contrary in this Agreement, if the
Executive's death results from suicide, whether sane or insane, within
twenty-six (26) months after execution of this Agreement, all further
Contributions to the Retirement Income Trust Fund (or Phantom
Contributions recorded in the Accrued Benefit Account) shall thereupon
cease, and no Contribution (or Phantom Contribution) shall be made
by the
Bank to the Retirement Income Trust Fund (or recorded in the Accrued
Benefit Account) in the year such death resulting from suicide occurs
(if
not yet made). All benefits other than those available from previous
Contributions to the Retirement Income Trust Fund under this Agreement
shall be forfeited, and this Agreement shall become null and void.
The
balance of the Retirement Income Trust Fund, measured as of the
Executive's date of death, shall be paid to the Beneficiary within
thirty
(30) days of the date the Administrator receives notice of the Executive's
death.
|
11.10
|
Inurement.
This Agreement shall be binding upon and shall inure to the benefit
of the
Bank, its successors and assigns, and the Executive, his successors,
heirs, executors, administrators, and
Beneficiaries.
|
11.11
|
Headings.
Headings and sub-headings in this Agreement are inserted for reference
and
convenience only and shall not be deemed a part of this
Agreement.
|
11.12
|
Establishment
of a Rabbi Trust.
The Bank shall establish a rabbi trust into which the Bank shall
contribute assets which shall be held therein, subject to the claims
of
the Bank's creditors in the event of the Bank's "Insolvency" (as
defined
in such rabbi trust agreement), until the contributed assets are
paid to
the Executive and/or his Beneficiary in such manner and at such times
as
specified in this Agreement. It is the intention of the Bank that
the
contribution or contributions to the rabbi trust shall provide the
Bank
with a source of funds to assist it in meeting the liabilities of
this
Agreement.
|
SECTION
XII
AMENDMENT/PLAN
TERMINATION
12.1
|
Amendment
or Plan Termination.
The Bank intends this Agreement to be permanent, but reserves the
right to
amend or terminate the Agreement when such amendment or termination
is
required due to objection to the plan by the Bank's regulatory
authorities, or in the event of a change in existing federal income
tax
laws which would cause this plan to create adverse tax consequences
to the
Bank and/or
|
28
participants
in the plan. However, any termination of the Agreement which is done in
anticipation of or pursuant to a "Change in Control", as defined in Subsection
1.9, shall be deemed to trigger Subsection 2.1(b)(2) (or 2.1(c)(2), as
applicable) of the Agreement notwithstanding the Executive's continued
employment, and benefit(s) shall be paid from the Retirement Income Trust Fund
(and Accrued Benefit Account, if applicable) in accordance with Subsection
13.2
below and with Subsections 2.1(b)(2) (or 2.1(c)(2), as applicable). Any
amendment or termination of the Agreement shall be made pursuant to a resolution
of the Board of Directors of the Bank and shall be effective as of the date
of
such resolution. No amendment or termination of the Agreement shall directly
or
indirectly deprive the Executive of all or any portion of the Executive's
Retirement Income Trust Fund (and Accrued Benefit Account, if applicable) as
of
the effective date of the resolution amending or terminating the Agreement.
Notwithstanding the foregoing, if an individual Executive’s agreement is subject
to Code Section 409A, the Bank may terminate this Agreement only under the
following circumstances and conditions:
(a)
|
The
Board of Directors may terminate the Agreement within 12 months of
a
corporate dissolution taxed under Code Section 331, or with approval
of a
bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), 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 payment is administratively
practicable.
|
(b)
|
The
Board of Directors may terminate the Agreement within the 30 days
preceding a Change in Control (but not following a Change in Control),
provided that the Agreement shall only be treated as terminated if
all
substantially similar arrangements sponsored by the Bank are terminated
so
that the Executive and all participants under substantially similar
arrangements are required to receive all amounts of compensation
deferred
under the terminated arrangements within 12 months of the date of
the
termination of the arrangements.
|
(c)
|
The
Board of Directors may terminate the Agreement provided that (i)
all
arrangements sponsored by the Bank that would be aggregated with
this
Agreement under Proposed Regulation Section 1.409A-1(c) if the Executive
covered by this Agreement was also covered by any of those other
arrangements are also terminated; (ii) no payments other than
payments
|
29
that
would be payable under the terms of the arrangement if the termination had
not
occurred are made within 12 months of the termination of the arrangement; (iii)
all payments are made within 24 months of the termination of the arrangements;
and (iv) the Bank does not adopt a new arrangement that would be aggregated
with
any terminated arrangement under Proposed Regulation Section 1.409A-1(c) if
the
Executive participated in both arrangements, at any time within five years
following the date of termination of the arrangement.
12.2
|
Executive's
Right to Payment Following Plan Termination.
In the event of a termination of the Agreement, the Executive shall
be
entitled to the balance, if any, of his Retirement Income Trust Fund
(and
Accrued Benefit Account, if applicable), measured as of the date
of plan
termination. However, if such termination is done in anticipation
of or
pursuant to a AChange
in Control,@
such balance(s) shall be measured as of the date the final Contribution
(or Phantom Contribution) is made (or recorded) pursuant to Subsection
2.1(b)(2) (or 2.1(c)(2)). Payment of the balance(s) of the Executive's
Retirement Income Trust Fund (and Accrued Benefit Account, if applicable)
shall not be dependent upon his continuation of employment with the
Bank
following the termination date of the Agreement. Payment of the balance(s)
of the Executive's Retirement Income Trust Fund (and Accrued Benefit
Account, if applicable) shall be made in a lump sum within thirty
(30)
days of the date of termination of the Agreement, provided, however,
to
the extent that Code Section 409A is applicable to a Separation from
Service following a Change in Control and payments are made to the
Retirement Income Trust Fund on account of a Separation from Service,
distributions shall not be made until the first day of the seventh
(7th)
month after Separation from
Service.
|
SECTION
XIII
EXECUTION
13.1
|
This
Agreement and the Xxxxxxxxx Xxxxx Grantor Trust agreement set forth
the
entire understanding of the parties hereto with respect to the
transactions contemplated hereby, and any previous agreements or
understandings between the parties hereto regarding the subject matter
hereof are merged into and superseded by this Agreement and the Xxxxxxxxx
Xxxxx Grantor Trust agreement.
|
13.2 |
This
Agreement shall be executed in triplicate, each copy of which, when
so
executed and delivered, shall be an original, but all three copies
shall
together constitute one and the same
instrument.
|
30
IN
WITNESS WHEREOF, the Bank and the Executive have caused this Agreement to be
executed on the day and date first above written.
MAGYAR
BANK
|
|||
By:
|
/s/
|
||
/s/ | |||
Secretary
|
(Title)
|
||
WITNESS:
|
EXECUTIVE:
|
||
/s/ | /s/ Xxxxxxxxx X. Xxxxx | ||
31
CONDITIONS,
ASSUMPTIONS,
AND
SCHEDULE
OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
1. Interest
Factor - for purposes of:
a.
|
the
Accrued Benefit Account - shall be Six percent (6%) per annum, compounded
monthly.
|
b.
|
the
Retirement Income Trust Fund - for purposes of annuitizing the balance
of
the Retirement Income Trust Fund over the Payout Period, the trustee
of
the Xxxxxxxxx Xxxxx Grantor Trust shall exercise discretion in selecting
the appropriate rate, given the nature of the investments contained
in the
Retirement Income Trust Fund and the expected return associated with
the
investments.
|
2.
|
The
amount of the annual Contributions (or Phantom Contributions) to
the
Retirement Income Trust Fund (or Accrued Benefit Account) has been
based
on the annual incremental accounting accruals which would be required
of
the Bank until the earlier of the Executive=s
death or Benefit Age, (i) pursuant to APB Opinion No. 12, as amended
by
FAS 106 and (ii) assuming a discount rate equal to Six percent (6%)
per
annum, in order to provide the unfunded, non-qualified Supplemental
Retirement Income Benefit.
|
3.
|
Supplemental
Retirement Income Benefit means an actuarially determined annual
amount
equal to One-Hundred Thousand Six Hundred and Twelve Dollars ($100,612)
at
age 65 if paid entirely from the Accrued Benefit Account or Sixty-Four
Thousand Three Hundred and Ninety-Two Dollars ($64,392) at age 65
if paid
from the Retirement Income Trust
Fund.
|
The
Supplemental Retirement Income Benefit:
!
|
the
definition of Supplemental Retirement Income Benefit has been incorporated
into the Agreement for the sole purpose of actuarially establishing
the
amount of annual Contributions (or Phantom Contributions) to the
Retirement Income Trust Fund (or Accrued Benefit Account). The amount
of
any actual retirement, pre-retirement or disability benefit payable
pursuant to the Agreement will be a function of (i) the amount and
timing
of Contributions (or Phantom Contributions) to the Retirement Income
Trust
Fund (or Accrued Benefit Account) and (ii) the actual investment
experience of such Contributions (or the monthly compounding rate
of
Phantom Contributions).
|
Exhibit
A
4. |
Schedule
of Annual Gross Contributions/Phantom
Contributions
|
Year
|
Contributions
|
|||
1996
|
$
|
1,220
|
||
1997
|
$
|
2,083
|
||
1998
|
$
|
2,420
|
||
1999
|
$
|
2,799
|
||
2000
|
$
|
3,224
|
||
2001
|
$
|
3,700
|
||
2002
|
$
|
4,234
|
||
2003
|
$
|
15,062
|
||
2004
|
$
|
16,827
|
||
2005
|
$
|
18,752
|
||
2006
|
$
|
68,994
|
||
2007
|
$
|
68,994
|
||
2008
|
$
|
68,994
|
||
2009
|
$
|
68,994
|
||
2010
|
$
|
68,994
|
||
2011
|
$
|
68,994
|
||
2012
|
$
|
68,994
|
||
2013
|
$
|
68,994
|
||
2014
|
$
|
68,994
|
||
2015
|
$
|
68,994
|
||
2016
|
$
|
68,994
|
||
2017
|
$
|
68,994
|
||
2018
|
$
|
68,994
|
||
2019
|
$
|
68,914
|
||
Exhibit
A
- continued
RESTATED
EXECUTIVE
SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
BENEFICIARY
DESIGNATION
The
Executive, under the terms of the Restated Executive Supplemental Retirement
Income Agreement executed by the Bank, dated the
day of
,2006,
hereby designates the following Beneficiary(ies) to receive any guaranteed
payments or death benefits under such Agreement, following his
death:
PRIMARY
BENEFICIARY:
SECONDARY
BENEFICIARY:
This
Beneficiary Designation hereby revokes any prior Beneficiary Designation which
may have been in effect.
Such
Beneficiary Designation is revocable.
DATE:
______________________, 2006
(WITNESS)
|
EXECUTIVE
|
|
(WITNESS)
|
||
Exhibit
B
RESTATED
EXECUTIVE
SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
NOTICE
OF ELECTION TO CHANGE FORM OF PAYMENT
TO:
|
Bank
|
Attention:
|
I
hereby
give notice of my election to change the form of payment of my Supplemental
Retirement Income Benefit, as specified below. I
understand that such notice, in
order to be effective, must be submitted in accordance with the time
requirements described in Subsection 1.25 of my Restated Executive Supplemental
Retirement Income Agreement.
o
|
I
hereby elect to change the form of payment of my benefits from monthly
installments throughout my Payout Period to a lump sum benefit
payment.
|
o
|
I
hereby elect to change the form of payment of my benefits from a
lump sum
benefit payment to monthly installments throughout my Payout Period.
Such
election hereby revokes my previous notice of election to receive
a lump
sum form of benefit payments.
|
Executive
|
||
Date
|
||
Acknowledged
|
||
By:
|
||
Title:
|
||
|
Date:
|
Exhibit
C