Exhibit 10.18
HOME FEDERAL SAVINGS BANK
EXECUTIVE COMPENSATION PLAN
FOR DIRECTORS
AMENDED AND RESTATED PLAN AGREEMENT
WHEREAS, Home Federal Savings Bank, formerly Home Federal Savings & Loan
Association of Hagerstown, Maryland, desires to retain and reward the services
of certain members of its Board of Directors who elect to participate and
recognizes that the loss of services of any member of such group would result
in a substantial loss to the Bank; and
WHTREAS, Home Federal Savings Bank established an Executive Compensation Plan
for Directors to recognize the services rendered in the past and to be
rendered in the future by the members of such group until the respective dates
of their retirement; and
WHEREAS, The Home Federal Savings Bank Executive Compensation Plan for
Directors provides and allows for the amendment of any existing Plan
agreement;
NOW, THEREFORE, Home Federal Savings Bank hereby amends the Executive
Compensation Plan for Directors as hereinafter set forth.
ARTICLE 1 - DEFINITIONS
1.1 BANK: Home Federal Savings Bank, any subsidiary thereof which employs a
Participant, any predecessor corporation or business, and any
corporation or business which has merged into or consolidated with or
substantially all of whose assets were acquired by Home Federal Savings
Bank or any successor corporation.
1.2 PARTICIPANT: A participant shall be a Director of the Bank who is so
designated by the Board of Directors and who has executed an
application for participation pursuant to Article 2.1.
1.3 PLAN: The Plan shall consist of this document and any amendments
thereto.
1.4 INSURER: Xxxx Xxxxxxx Mutual Life Insurance Company or another insurer
chosen by the Bank for any substandard risk classification.
1.5 BENEFICIARY: Any person or persons, as designated pursuant to Article
4.4, to whom any benefits may be payable upon the death of a
Participant pursuant to Article 3.1 or 3.3.
1.6 NORMAL RETIREMENT DATE: The first day of the month following the 65th
or 72nd birthday of the Participant, depending on the option selected
by the individual Director. In no event will payments be made prior to
the fifth anniversary of said Director's participation in the Plan
regardless of age. Retirement shall not be postponed beyond age 72 for
purposes of this Agreement and Plan. At the request of the Participant,
and if the Bank agrees, service may continue beyond the Participant's
Normal Retirement Date; however, payment of benefits under this Plan
will commence at the Normal Retirement Date.
1.7 CONSTRUCTION: The masculine gender shall be deemed to include the
feminine and neuter genders; the feminine to include the masculine; the
singular to include the plural; and the plural to include the singular;
in each case where appropriate.
1.8 TOTAL DISABILITY: Disability or incapacity of a Participant hereunder
during his or her term of service as a Director deemed "total
disability" shall constitute such incapacity of a Participant as a
result of bodily injury or disease or mental disease that he or she is
unable to perform the routine duties as a Director of the Bank.
However, no such "total disability" shall be deemed to exist if such
"total disability" results wholly or partially from willfully and
intentionally self-inflicted injury.
1.9 ORIGINAL EFFECTIVE DATE OF PLAN: July 1, 1982
1.10 EFFECTIVE DATE OF THIS PLAN AMENDMENT & RESTATEMENT: January 1, 1993
ARTICLE 2 - PARTICIPATION
2.1 Eligibility for participation in this Plan shall be restricted to those
Directors who are designated as Participants in this Plan by the Board
of Directors. A Director so eligible shall become a Participant BY
filing with the Bank a written application for participation in form
satisfactory to the Bank within sixty (60) days of the
date when he is first notified in writing that he is eligible to
participate. Said application may, at the option of the Bank, be in the
form of an application for insurance coverage pursuant to Article 4.1.
If such application is not filed within such sixty (60) day period,
participation thereafter shall not be permitted except with the written
approval of the Board of Directors.
2.2 A Participant shall continue to be covered by the Plan until the
earliest date on which any of the following events occur:
a. A Participant notifies the Bank in writing that he no longer
wishes to participate;
b. Termination of service other than by retirement, disability,
or death, except as set forth in Section 2.4 herein;
2.3 Should a Participant's participation be terminated under Article 2.2,
he will be entitled to receive a benefit commencing at the earlier of
his death or his Normal Retirement Date. Such benefit shall be an
amount determined based upon the actual number of years of
participation under this Plan.
2.4 In the event of the merger or acquisition of the Bank by a successor,
all benefits outlined on Schedule A hereof will be provided regardless
of years of participation to all Directors deemed as Participants on
the effective date of such merger or acquisition, irrespective of
whether or not the Bank retains its Board of Directors thereafter.
2.5 In the event a Participant is granted one or more leaves of absence
exceeding in the aggregate twenty-four (24) consecutive months, his
service will be deemed to have terminated under Article 2.2 on the
first date such leave or leaves commence unless specifically waived by
the Board of Directors.
2.6 Should a Participant's participation be terminated under Article 2.2,
he may not thereafter be covered by the Plan, except upon approval by
the Board of Directors.
ARTICLE 3 - BENEFITS
3.1 DEATH BENEFITS (PRIOR TO PARTICIPANT'S RETIREMENT): If a Participant
should die prior to his retirement, a benefit shall be payable to the
Participant's Beneficiary in such amount as shall be endorsed on
Schedule A of this Plan. Said benefit shall be payable on a monthly
basis at one-twelfth the annual amount and shall be payable for ten
(10) years certain and continuous.
At the Bank's sole discretion, a lump sum settlement may be made which
will be the equivalent of such payments due said Beneficiary.
3.2 NORMAL RETIREMENT BENEFIT (NORMAL RETIREMENT): If a Participant has at
least five years of participation under the Plan, commencing on his
Normal Retirement Date, he shall be paid by the Bank an annual normal
retirement benefit in such amount as shall be endorsed on Schedule A of
this Plan. Said benefit shall be payable on a monthly basis at
one-twelfth the annual amount and shall be payable during his lifetime
for a maximum of ten (10) years. At the Bank' s sole discretion, but
only at the request of the Participant, an optional form of settlement
may be made which will be the equivalent of said benefit.
3.3 DEATH BENEFITS (SUBSEQUENT TO PARTICIPANT'S RETIREMENT): In the event
that a Participant dies prior to receiving all of the payments to
which he is entitled under Article 3.2, any installments still due
will be continued to his designated Beneficiary.
At the Bank's solo discretion, a lump sum settlement may be made which
will be the equivalent of such payments due said Beneficiary.
3.4 BENEFITS IN THE EVENT OF DISABILITY: Should a Participant suffer a
"Total Disability" as hereinabove defined, benefits under the Plan
shall become fixed in such amount as shall be endorsed on Schedule A of
this Plan. Should the disabled Participant die prior to reaching age
65, his or her Beneficiary shall be entitled to death benefits as
provided in 3.1. If the disabled Participant should survive to age 65,
he or she shall be entitled to the benefits as provided under Articles
3.2 and 3.3.
In the event of such "Total Disability," the five (5) years of
participation under the Plan normally required of the Participant in
Article 3.2 will be waived.
3.5 EXCLUSIONS: In the event a Participant commits suicide, while sane or
insane, within two (2) years from the date of issue of any life
insurance policy(ies) purchased on the life of said Participant
pursuant to Article 4.1, the portion of benefits funded by such
policy(ies) will not be payable if, within said two-year period,
fraudulent misrepresentations of any facts material to the application
for insurance hereunder are discovered.
ARTICLE 4 - INSURANCE
4.1 The death benefits provided for under Articles 3.1 and 3.3 will be
provided by the purchase of insurance from the Insurer. The Participant
shall cooperate fully with the Bank by submitting to all necessary
medical examinations and by submitting such information to the Bank or
to the Insurer as may be required.
4.2 No Participant shall have any rights in, or under any insurance policy
purchased by the Bank pursuant to this Plan so long as the Bank is the
owner thereof.
4.3 The Insurer shall not be a party to this Plan and shall be governed and
bound only by the terms of insurance contracts issued by it. Nothing in
this Plan shall be construed to require the Insurer to take action that
is inconsistent with its rule and administrative practices.
4.4 Upon applying for participation in the Plan, each Participant shall
designate on a form satisfactory to the Bank a Beneficiary or
Beneficiaries for any benefits which may become payable hereunder in
the event of his death. Any such Beneficiary can be changed by a
Participant upon giving written notice to the Bank.
The Beneficiary will be the person or persons named on the Beneficiary
Designation Form most recently filed with the Bank at the time of the
Participant's death.
ARTICLE 5 - AMENDMENT AND TERMINATION
5.1 Although the Bank intends to continue this Plan, its continuance is not
guaranteed to persons with whom there is not an executed Participation
Agreement in existence. The Bank reserves the right to amend or
terminate the Plan at any time except in respect to persons with whom
there is in existence an executed Participation Agreement.
5.2 The Bank shall have the right to amend, discontinue, sell, assign,
surrender or cancel any insurance policy(ies) purchased pursuant to
Article 4.1.
5.3 Notwithstanding the provisions of Articles 5.1 and 5.2 above, if the
Bank has commenced payment of the Normal Retirement Benefit to any
Participant under Article 3.1 or if any Participant should die while
this Plan is in effect, then the Bank shall continue to make the
payments called for under Articles 3.1, 3.2, 3.3, and/or 3.4 to such
Participant or his Beneficiary.
ARTICLE 6 - MISCELLANEOUS
6.1 The Plan shall under no circumstances be deemed to have any effect upon
the terms or conditions of service as a Director of the Bank whether or
not he is a Participant hereunder. The establishment and maintenance of
this Plan shall not be construed as creating or modifying any contract
between the Bank and any of its Directors, nor is it in lieu of any
other benefits. This Plan shall under no circumstances be deemed to
constitute a contract of insurance or employment.
6.2 Participation by any Director in this Plan shall not give such person
the right to be employed by the Bank or any right or interest in this
Plan other than as provided herein.
6.3 Benefits under this Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge or
encumbrance by any Participant or Beneficiary and any attempt to do so
shall be null and void. Benefits under this Plan shall not be subject
to or liable for the debts, contracts, liabilities, engagements or
torts of any Participant or of any Beneficiary, nor may the same be
subject to attachment or seizure by any creditor or any Participant or
any Beneficiary under any circumstances.
6.4 In the event of a Participant's retirement or death, he or his
Beneficiary, as the case may be, should notify the Bank promptly and
the Bank will the provide a claimant's statement form for completion
which should be returned to the Bank, together with an official death
certificate, if applicable. In the event that any claim hereunder is
denied, the Bank will provide adequate notice in writing to such
Participant or Beneficiary, setting forth the specific reasons for such
denial and, in addition, the Bank will afford reasonable opportunity
for a full and fair review of those reasons.
Attest to Signature HOME FEDERAL SAVINGS BANK
and Corporate Seal:
By:
---------------------- ----------------------
Secretary - Cashier
SCHEDULE I TO
HOME FEDERAL SAVINGS BANK
EXECUTIVE COMPENSATION PLAN
FOR DIRECTORS
AMENDED AND RESTATED PLAN AGREEMENT
The following persons participate in the Home Federal Savings Bank
Executive Compensation Plan for Directors Amended and Restated Plan Agreement.
X.X. Xxxxx
X.X. Xxxxxx
X.X. Xxxxxx, Xx.
X.X. Xxxxx, II
X.X. Xxxxxxx, Xx.
X.X. Xxxxxxxx
X.X. Xxxxxxxxx
X.Xxxxxx
