EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
FOR XXXX XXXXX
SYNERGY FEDERAL SAVINGS BANK
April 1, 1999
Financial Institution Consulting Corporation
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
WATS: 1-800-873-0089
FAX: (000) 000-0000
(000) 000-0000
EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT FOR XXXX XXXXX
This Executive Supplemental Retirement Income Agreement (the
"Agreement"), effective as of the 1st day of April, 1999, formalizes the
understanding by and between SYNERGY FEDERAL SAVINGS BANK (the "Bank"), a mutual
savings bank having its principal place of business in New Jersey, and XXXX
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 his 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, the Bank has adopted this Executive Supplemental Retirement
Income Agreement which controls all issues relating to benefits as described
herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the Bank and the Executive agree as follows:
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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 "Administrator" means the Bank.
1.4 "Bank" means SYNERGY FEDERAL SAVINGS BANK and any successor thereto.
1.5 "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.
1.6 "Benefit Age" means the later of: (i) the Executive's sixtieth (60th)
birthday or (ii) the actual date the Executive's full-time service with
the Bank terminates. In addition, the Board of Directors may, in its
sole discretion, amend clause (i) of this Subsection to lower the
Executive's Benefit Age in any instance in which the Executive's
employment terminates prior to Retirement Age and the Board of
Directors determines that such an amendment is advisable, based on the
circumstances of such termination, or amend clause (ii) of this
Subsection, upon the Executive's request, to permit the Executive to
commence receiving his Supplemental Retirement Income Benefit upon the
attainment of age sixtieth (60) despite the fact that the Executive's
full-time service with the Bank has not terminated.
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1.7 "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.
1.8 "Board of Directors" means the board of directors of the Bank.
1.9 "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.
1.10 A "Change in Control" of the Bank shall mean:
(i) A plan of reorganization, merger, consolidation, or sale of all
or substantially all of the assets of the Bank occurs in which
the Bank is not the resulting entity; or
(ii) Individuals who constitute the Board of Directors on the
effective date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that
any person becoming a Director subsequent to the date hereof
whose election was approved by a vote of at least three-quarters
of the Directors comprising the Incumbent Board.
1.11 "Children" means all natural or adopted children of the Executive, and
issue of any predeceased child or children.
1.12 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.13 "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.
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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 April 1, 1999.
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 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.
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" shall mean the twelve (12) month period commencing January
1 and ending December 31.
1.21 "Retirement Age" means the Executive's sixtieth (60th) birthday,
subject to the provisions of Section 1.6.
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1.22 "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. The
contractual rights of the Bank and the Executive with respect to the
Retirement Income Trust Fund shall be outlined in a separate writing to
be known as the Xxxx Xxxxx Grantor Trust agreement.
1.23 "Spouse" means the individual to whom the Executive is legally married
at the time of the Executive's death, provided, however, that the term
"Spouse" shall not refer to an individual to whom the Executive is
legally married at the time of death if the Executive and such
individual have entered into a formal separation agreement or initiated
divorce proceedings.
1.24 "Supplemental Retirement Income Benefit" means 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) by filing with the Administrator a
Notice of Election to Change Form of Payment (Exhibit C of this
Agreement). In the case of benefits payable from the Accrued Benefit
Account, such election shall have 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 Retirement Income Trust Fund, such election may be made at any
time.
SECTION II
BENEFITS - GENERALLY
2.1 (a) Retirement Income Trust Fund and Accrued Benefit Account. The
Executive shall establish the Xxxx Xxxxx Grantor Trust into which the
Bank shall be required to make annual Contributions on the
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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 Xxxx Xxxxx Grantor Trust may
be made by the trustee to the Executive, for purposes of payment of
any income or employment 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 Xxxx
Xxxxx Grantor Trust agreement, the Xxxx Xxxxx Grantor Trust Agreement
shall supersede this Agreement.
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 seventy-five (75)
days of establishment of such trust, and (ii) within the first thirty
(30) 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
thirty (30) 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, during the
Payout Period, until the balance of the Accrued Benefit Account has
been fully distributed. Interest on any Phantom Contribution shall not
commence until such Payout Period commences. The Administrator shall
review the schedule of annual Contributions (or Phantom Contributions)
provided for in Exhibit A (i) within thirty (30) days prior to the
close of each Plan Year and (ii) if the Executive is employed by the
Bank until attaining Retirement Age, on or immediately before
attainment of such Retirement Age. Such review shall consist of an
evaluation of the accuracy of all assumptions used to establish the
schedule of Contributions (or Phantom Contributions). Provided
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that (i) the Executive has not exercised his withdrawal rights
pursuant to Subsection 2.2 and (ii) the investments contained in the
Retirement Income Trust Fund have been deemed reasonable by the Bank,
the Administrator shall prospectively amend or supplement the schedule
of Contributions provided for in Exhibit A should the Administrator
determine during any such review that an increase in or supplement to
the schedule of Contributions is necessary in order to adequately fund
the Retirement Income Trust Fund so as to provide an annual benefit
(or to provide the lump sum equivalent of such benefit, as applicable)
equal to the Supplemental Retirement Income Benefit, on an after-tax
basis, commencing at Benefit Age and payable for the duration of the
Payout Period.
(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 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.
(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 thirty-six (36) 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 on Schedule A shall
continue to be required of the Bank. The Bank shall be required to make
an immediate lump sum contribution to the Retirement Income Trust Fund
equal to (i) the full Contribution required for the Plan Year in which
such termination occurs, if not yet made, plus (ii) the present value
(computed using a discount rate equal to the Interest Factor) of all
remaining Contributions to the Retirement Income Trust Fund; provided,
however, in no event shall the Contribution be less than an amount
which is sufficient to
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provide the Executive with after-tax benefits (assuming a constant tax
rate equal to the rate in effect as of the date of Executive's
termination) beginning at his Benefit Age, equal in amount to that
benefit which would have been payable to the Executive if no secular
trust had been implemented and the benefit obligation had been accrued
under APB Opinion No. 12, as amended by FAS 106.
(3) Termination For Cause.
If the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and 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 Plan Year in which such termination for
Cause occurs.
(4) Involuntary Termination of Employment.
If the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and the Executive's employment with the Bank is
involuntarily terminated for any reason, including a termination due
to disability of the Executive but excluding termination for Cause, or
termination following a Change in Control within twenty-four (24)
months of such Change in Control, within thirty (30) days of such
involuntary termination of employment, the Bank shall be required to
make an immediate lump sum Contribution to the Executive's Retirement
Income Trust Fund in an amount equal to the: (i) the full Contribution
required for the Plan Year in which such involuntary termination
occurs, if not yet made, plus (ii) the present value (computed using a
discount rate equal to the Interest Factor) of all remaining
Contributions to the Retirement Income Trust Fund; provided however,
that, if necessary, an amount shall be contributed to the Retirement
Income Trust Fund which is sufficient to provide the Executive with
after tax benefits (assuming a constant tax rate equal to the rate in
effect as of the date of the Executive's termination) beginning at his
Benefit Age, equal in amount to that benefit which would have been
payable to the Executive if no secular trust had been implemented and
the benefit obligation had been accrued under APB Opinion No. 12, as
amended by FAS 106.
(5) Death During Employment.
If the Executive does not exercise any withdrawal rights pursuant to
Subsection 2.2, and dies while employed by the Bank, and if, following
the Executive's death, the assets of the Retirement Income Trust Fund
are insufficient to provide the Supplemental Retirement Income Benefit
to which the
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Executive is entitled, the Bank shall be required to make a
Contribution to the Retirement Income Trust Fund equal to the sum of
the remaining Contributions set forth on Exhibit A, after taking into
consideration any payments under any life insurance policies that may
have been obtained on the Executive's life by the Retirement Income
Trust Fund. Such final contribution shall be payable in a lump sum to
the Retirement Income Trust Fund within thirty (30) days of the
Executive's death.
(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 within
thirty (30) days of the beginning 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, 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 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
thirty-six (36) 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. The Bank shall be required to
record a lump sum Phantom Contribution in the Accrued Benefit Account
within ten (10) days of the Executive's termination of employment. The
amount of such final Phantom Contribution shall be
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actuarially determined based on the Phantom Contribution required, at
such time, in order to provide a benefit via this Agreement equivalent
to the Supplemental Retirement Income Benefit, on an after-tax basis,
commencing on the Executive's Benefit Eligibility Date and continuing
for the duration of the Payout Period. (Such actuarial determination
shall reflect the fact that amounts shall be payable from both the
Accrued Benefit Account as well as the Retirement Income Trust Fund
and shall also reflect the amount and timing of any withdrawal(s) made
by the Executive from the Retirement Income Trust Fund pursuant to
Subsection 2.2.)
(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 interest accrued on such Phantom
Contributions, shall be forfeited.
(4) Involuntary Termination of Employment.
If the Executive exercises his withdrawal rights pursuant to Subsection
2.2, and the Executive's employment with the Bank is involuntarily
terminated for any reason including termination due to disability of
the Executive, but excluding termination for Cause, or termination
following a Change in Control, within thirty (30) days of such
involuntary termination of employment, the Bank shall be required to
record a final Phantom Contribution in an amount equal to: (i) the full
Phantom Contribution required for the Plan Year in which such
involuntary termination occurs, if not yet made, plus (ii) the present
value (computed using a discount rate equal to the Interest Factor) of
all remaining Phantom Contributions.
(5) Death During Employment.
If the Executive exercises his withdrawal rights pursuant to Subsection
2.2, and dies while employed by the Bank, Phantom Contributions
included on Exhibit A shall be required of the Bank. Such Phantom
Contributions shall commence in the Plan Year following the Plan Year
in which the Executive exercises his withdrawal rights and shall
continue through the Plan Year in which the Executive dies. The Bank
shall also be required to record a final Phantom Contribution within
thirty (30) days of the Executive's death. The amount of such final
Phantom Contribution shall be actuarially determined based on the
Phantom Contribution required at such time (if any), in order to
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provide a benefit via this Agreement equivalent to the Supplemental
Retirement Income Benefit commencing within thirty (30) days of the
date the Administrator receives notice of the Executive's death and
continuing for the duration of the Payout Period. (Such actuarial
determination shall reflect the fact that amounts shall be payable from
the Accrued Benefit Account as well as the Retirement Income Trust Fund
and shall also reflect the amount and timing of any withdrawal(s) made
by the Executive pursuant to Subsection 2.2.)
2.2 Withdrawals From Retirement Income Trust Fund.
Exercise of withdrawal rights by the Executive pursuant to the Xxxx
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 2.1(c) shall commence. For purposes of this Subsection 2.2,
"exercise of withdrawal rights" shall mean those withdrawal rights to
which the Executive is entitled under Article III of the Xxxx 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 and the tax reimbursement formula contained in the
trust document, or other trust expenses properly payable from the Xxxx
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 discretion to
determine the portion of the cash value of such policy available for
purposes of annuitizing the Retirement Income Trust Fund (it being
understood that for purposes of this Section 2.3, "annuitizing" does
not mean surrender of such policy and annuitizing of the cash value
received upon such surrender) 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.
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SECTION III
RETIREMENT BENEFIT
------------------
3.1 (a) Normal form of payment.
If (i) the Executive is employed with the Bank until reaching his
Retirement Age, 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 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. The
Executive may at anytime during the Payout Period request to receive
the unpaid balance of his Retirement Income Trust Fund in a lump sum
payment. If such a lump sum payment is requested by the Executive,
payment of the balance of the Retirement Income Trust Fund in such lump
sum form shall be made only if the Executive gives notice to both the
Administrator and trustee in writing. Such lump sum payment shall be
payable within thirty (30) days of such notice. In the event the
Executive dies at any time after attaining his Benefit Age, but prior
to commencement or completion of all monthly 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 notifies both
the Administrator and trustee in writing of such election within
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ninety (90) days of the Executive's death. Such lump sum payment shall
be payable within thirty (30) days of such notice.
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, (i) 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, or
(ii) the Executive's Beneficiary may request to receive the remainder
of any unpaid benefit payments in a lump sum payment. If a lump sum
payment is requested by the Beneficiary, the amount of such lump sum
payment shall be equal to the unpaid balance of the Executive's Accrued
Benefit Account. Payment in such lump sum form shall be made only if
the Executive's Beneficiary (i) obtains Board of Director approval, 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 Board of Directors, shall be made within thirty (30)
days of such Board of Director approval.
(b) Alternative payout option.
If (i) the Executive is employed with the Bank until reaching his
Retirement Age, 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, 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 3.1(b) within thirty (30) days of the date the Administrator
receives notice of the Executive's death.
The balance of the Executive's 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.
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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 3.1(b) within thirty
(30) days of the date the Administrator receives notice of the
Executive's death.
SECTION IV
PRE-RETIREMENT DEATH BENEFIT
----------------------------
4.1 (a) Normal form of payment.
If (i) the Executive dies while employed by the Bank, 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 balance of the Executive's Retirement Income Trust Fund, measured
as of the later of (i) the Executive's death, or (ii) the date any
final lump sum Contribution is made pursuant to Subsection 2.1(b),
shall be annuitized (using the Interest Factor) into monthly
installments and shall be payable for the Payout Period. Such benefits
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
notifies both the Administrator and trustee in writing of such election
within ninety (90) days of the Executive's death. Such lump sum payment
shall be made within thirty (30) days of such notice.
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The Executive's Accrued Benefit Account (if applicable), measured as of
the later of (i)the Executive's death or (ii) the date any final lump
sum Phantom Contribution is recorded in the Accrued Benefit Account
pursuant to Subsection 2.1(c), 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, or if later, within thirty
(30) days after any final lump sum Phantom Contribution is recorded in
the Accrued Benefit Account in accordance with Subsection 2.1(c). The
Executive's Beneficiary may request to receive the remainder of any
unpaid monthly benefit payments due from the Accrued Benefit Account in
a lump sum payment. If a lump sum payment is requested by the
Beneficiary, the amount of such lump sum payment shall be equal to the
balance of the Executive's Accrued Benefit Account. Payment in such
lump sum form shall be made only if the Executive's Beneficiary (i)
obtains Board of Director approval, 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 Board of Directors,
shall be payable within thirty (30) days of such Board of Director
approval.
(b) Alternative payout option.
If (i) the Executive dies while employed by the Bank, 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, measured
as of the later of (i) the Executive's death, or (ii) the date any
final lump sum Contribution is made pursuant to Subsection 2.1(b),
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.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the later of (i) the Executive's death, or (ii) the date
any final Phantom Contribution is recorded pursuant to Subsection
2.1(c), 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.
16
SECTION V
BENEFIT(S) IN THE EVENT OF TERMINATION OF SERVICE
-------------------------------------------------
PRIOR TO RETIREMENT 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 Retirement Age, for any reason
including a Change in Control, but excluding (i) any disability related
termination for which the Board of Directors has approved early payment
of benefits pursuant to Subsection 6.1, (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 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. The
Executive may at anytime during the Payout Period request to receive
the unpaid balance of his Retirement Income Trust Fund in a lump sum
payment. If such a lump sum payment is requested by the Executive,
payment of the balance of the Retirement Income Trust Fund in such lump
sum form shall be made only if the
17
Executive gives notice to both the Administrator and trustee in
writing. Such lump sum payment shall be payable within thirty (30)
days of such notice. In the event the Executive dies at any time after
attaining his Benefit Age, but prior to commencement or completion of
all monthly 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 notifies both the Administrator and
trustee in writing of such election within ninety (90) days of the
Executive's death. Such lump sum payment shall be made within thirty
(30) days of such notice.
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, (i) 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, or (ii) the Executive's Beneficiary may request to
receive the remainder of any unpaid benefit payments in a lump sum
payment. If a lump sum payment is requested by the Beneficiary, the
amount of such lump sum payment shall be equal to the unpaid balance
of the Executive's Accrued Benefit Account. Payment in such lump sum
form shall be made only if the Executive's Beneficiary (i) obtains
Board of Director approval, 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 Board of Directors,
shall be made within thirty (30) days of such Board of Director
approval.
(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.
18
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 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 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 notifies both the Administrator and
trustee in writing of such election within ninety (90) days of the
Executive's death. Such lump sum payment shall be made within thirty
(30) days of such notice.
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. The Executive's Beneficiary may request to receive the unpaid
balance of the Executive's Accrued Benefit Account in the form of a
lump sum payment. If a lump sum payment is requested by the
Beneficiary, payment of the balance of the Accrued Benefit Account in
such lump sum form shall be made only if the Executive's Beneficiary
(i) obtains Board of Director approval, 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 Board
of Directors, shall be made within thirty (30) days of such Board of
Director approval.
19
(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, 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.
The balance of the Executive's 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.
(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 pre-retirement death benefits.
The balance of the Retirement Income Trust Fund, 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.
The balance of the Executive's 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.
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 Retirement 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).
In any instance in which: (i) it is determined by a duly licensed,
independent physician selected by the Bank, that the Executive is no
longer able, properly and satisfactorily, to perform his regular duties
as an officer, because of ill health, accident, disability or general
inability due to age, (ii) the Executive requests payment under this
Subsection in lieu of Subsection 5.1, and (iii) Board of Director
approval is obtained to allow payment under this Subsection, in lieu of
Subsection 5.1, the Executive shall be entitled to the following lump
sum benefit(s). 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). The benefit(s) shall be paid within thirty (30) days
following the date of the Executive's request for such benefit is
approved by the Board of Directors. In the event the Executive dies
after becoming eligible for such payment(s) but before the actual
21
payment(s) is (are) made, his Beneficiary shall be entitled to 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.
Furthermore, 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
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 to the Executive's Beneficiary 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
NON-COMPETITION
---------------
8.1 Non-Competition During Employment.
In consideration of the agreements of the Bank contained herein and of
the payments to be made by the Bank pursuant hereto, the Executive
hereby agrees that, for as long as he remains employed by the Bank, he
will devote substantially all of his time, skill, diligence and
attention to the business of the Bank, and will not actively engage,
either directly or indirectly, in any business or other activity which
22
is, or may be deemed to be, in any way competitive with or adverse to
the best interests of the business of the Bank, unless the Executive
has the prior express written consent of the Bank.
8.2 Breach of Non-Competition Clause.
(a) Continued Employment Following Breach.
In the event (i) any material breach by the Executive of the agreements
and covenants described in Subsection 8.1 occurs, and (ii) the
Executive continues employment at the Bank following such breach, all
further Contributions to the Retirement Income Trust Fund (or Phantom
Contributions recorded in the Accrued Benefit Account) shall
immediately cease, and 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. The Executive (or his Beneficiary) shall be entitled to
receive a benefit from the Retirement Income Trust Fund in accordance
with Subpart (1) or (2) below, as applicable.
(1) Executive Lives Until Benefit Age
If, following such breach, the Executive lives until attaining his
Benefit Age, he shall be entitled to receive a benefit from the
Retirement Income Trust Fund in accordance with this Subsection
8.2(a)(1). The balance of the Retirement Income Trust Fund, 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 attaining his Benefit Age but before actual payment is made,
his Beneficiary shall be entitled to receive the lump sum benefit in
accordance with this Subsection 8.2(a)(1) within thirty (30) days of
the date of the Administrator receives notice of the Executive's death.
(2) Executive Dies Prior to Benefit Age
If, following such breach, the Executive dies prior to attaining his
Benefit Age, his Beneficiary shall be entitled to receive a benefit
from the Retirement Income Trust Fund in accordance with this
Subsection 8.2 (a)(2). The balance of the Retirement Income Trust Fund,
measured as of the date 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.
23
(b) Termination of Employment Following Breach.
In the event (i) any material breach by the Executive of the agreements
and covenants described in Subsection 8.1 occurs, and (ii) the
Executive's employment with the Bank is terminated due to such breach,
such termination shall be deemed to be for Cause and the benefits
payable to the Executive shall be paid in accordance with Subsection
5.2 of this Agreement.
8.3 Non-Competition Following Employment.
Executive further understands and agrees that, following Executive's
termination of employment, the Bank's obligation, if any, to make
payments to the Executive from the Accrued Benefit Account shall be
conditioned on the Executive's forbearance from actively engaging,
either directly or indirectly in any business or other activity which
is, or may be deemed to be, in any way competitive with or adverse to
the best interests of the Bank, unless the Executive has the prior
written consent of the Bank. In the event of the Executive's breach of
the covenants and agreements contained herein, further payments to the
Executive from the Accrued Benefit Account, if any, shall cease and
Executive's rights to amounts credited to the Accrued Benefit Account
shall be forfeited.
SECTION IX
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. The Executive, the
Beneficiary, or any other person claiming through the Executive, shall
only have the right to receive from the Bank those payments or amounts
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 Agreement
shall not be deemed to be held under any trust for the benefit of the
Executive or his Beneficiaries, unless such asset is contained in the
rabbi trust described in Section XII of this Agreement. Any such asset
shall be and remain, a general, unpledged asset of the Bank in the
event of the Bank's insolvency.
24
SECTION X
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,
other than those Contributions required to be made to the Retirement
Income Trust Fund. 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 replace such
assets from time to time or to terminate its investment in 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 XI
ACT PROVISIONS
--------------
11.1 Named Fiduciary and Administrator. The Bank, as Administrator, shall be
the Named Fiduciary of this Agreement. As Administrator, the Bank shall
be responsible for the management, control and administration of the
Agreement as established herein. 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.
11.2 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.
25
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 claimants continue to dispute the benefit denial based upon
completed performance of this Plan and the Joinder Agreement or the
meaning and effect of the terms and conditions thereof, then claimants
may submit the dispute to mediation, administered by the American
Arbitration Association ("AAA") (or a mediator selected by the
parties) in accordance with the AAA's Commercial Mediation Rules. If
mediation is not successful in resolving the dispute, it shall be
settled by arbitration administered by the AAA under its Commercial
Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
SECTION XII
MISCELLANEOUS
-------------
12.1 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 without regard to the existence of the Agreement.
12.2 State 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 and valid regulations
published thereunder.
12.3 Severability. 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,
26
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.
12.4 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.
12.5 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.
12.6 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.
12.7 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.
12.8 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
27
sharing, group, bonus or other supplemental compensation or fringe
benefit agreement constituting a part of the Bank's existing or future
compensation structure.
12.9 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.
12.10 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.
12.11 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.
12.12 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.
28
12.13 Source of Payments. All payments provided in this Agreement shall be
timely paid in cash or check from the general funds of the Bank or the
assets of the rabbi trust, to the extent made from the Accrued Benefit
Account.
SECTION XIII
AMENDMENT/PLAN TERMINATION
--------------------------
13.1 Amendment or Plan Termination. The Bank intends this Agreement to be
permanent, and the Agreement may not be amended or terminated without
the express written consent of the Executive. 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
by the Bank 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 above, if the Executive does not exercise any
withdrawal rights pursuant to Subsection 2.2, and if at any time after
the final Contribution is made to the Retirement Income Trust Fund the
Executive elects to terminate the Retirement Income Trust Fund and
receive a distribution of the assets of the Retirement Income Trust
Fund, then upon such distribution this Agreement shall terminate.
13.2 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). However, if such termination is done
in anticipation of or pursuant to a "Change in Control," such
balance(s) shall include the final Contribution (or final Phantom
Contribution) 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.
29
SECTION XIV
EXECUTION
---------
14.1 This Agreement and the Xxxx 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 Xxxx
Xxxxx Grantor Trust Agreement.
30
14.2 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.
IN WITNESS WHEREOF, the Bank and the Executive have caused this
Agreement to be executed on the day and date first above written.
ATTEST: SYNERGY FEDERAL SAVINGS BANK:
By: ____________________________________
________________________________ ________________________________________
Secretary (Title)
________________________________ ________________________________________
WITNESS: EXECUTIVE:
CONDITIONS, ASSUMPTIONS,
AND
SCHEDULE OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
1. Interest Factor - for purposes of:
a. the Accrued Benefit Account - shall be seven percent (7%) 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 Xxxx 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. For these purposes, if the trustee of the Retirement
Income Trust Fund has purchased a life insurance policy, the
trustee shall have the discretion to determine the portion of the
cash value of such policy available for purposes of annuitizing
the Retirement Income Trust Fund, in accordance with Section 2.3
of the Agreement.
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 through the earlier of the Executive's death or
Retirement Age, (i) pursuant to APB Opinion No. 12, as amended by FAS
106 and (ii) assuming a discount rate equal to Seven percent (7%) 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 Three Hundred Sixty-Six
Dollars ($102,366) at age 60 if paid entirely from the Accrued Benefit
Account or Sixty-One Thousand Four Hundred Twenty Dollars ($61,420) at
age 60 if paid from the Retirement Income Trust Fund.
The Supplemental Retirement Income Benefit:
o 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
Plan Year Amount
--------- ------
1999 $ 14,969
2000 17,133
2001 19,532
2002 22,188
2003 25,126
2004 28,373
2005 31,958
2006 35,913
2007 40,273
2008 45,076
2009 50,362
2010 56,178
2011 62,571
2012 69,594
2013 77,306
2014 85,770
2015 95,053
2016 105,230
2017 93,974
Exhibit A - Cont'd.
EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
BENEFICIARY DESIGNATION
The Executive, under the terms of the Executive Supplemental Retirement
Income Agreement executed by the Bank, dated the 1st day of April, 1999, 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: ______________________, 19____
________________________________ ________________________________________
(WITNESS) EXECUTIVE
________________________________
(WITNESS)
Exhibit B
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 my Executive Supplemental Retirement Income
Agreement.
[_] 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.
[_] 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
