MALVERN FEDERAL SAVINGS BANK SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT
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EXHIBIT
10.8
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AMENDED
AND RESTATED
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MALVERN
FEDERAL SAVINGS BANK
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THIS AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT (the βAgreementβ) by and
between Malvern Federal Savings Bank (the βBankβ), a federally-chartered savings
bank located in Paoli, Pennsylvania, and XXXXXX XXXXX (the βExecutiveβ),
intending to be legally bound hereby, is adopted effective as of December 16,
2008.
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WHEREAS, the purpose of
this Agreement is to provide specified benefits to the Executive, a member of a
select group of management or highly compensated employees who contribute
materially to the continued growth, development and future business success of
the Bank. This Agreement shall be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974 (βERISAβ), as
amended from time to time. The Bank will pay the benefits from its general
assets;
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WHEREAS, the Executive
entered into a Supplemental Executive Retirement Plan Agreement with the Bank
dated as of September 20, 2004 (the βPrior Agreementβ), which Prior Agreement
was amended as of September 28, 2006 for the purpose of bringing the Prior
Agreement into compliance with the proposed regulations issued under Section
409A of the Internal Revenue Code of 1986, as amended (the βCodeβ);
and
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WHEREAS, the Bank wishes
to amend and restate the Prior Agreement in order to comply with the final
regulations issued under Section 409A of the Code in April 2007.
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NOW, THEREFORE, in consideration of
the foregoing premises and other good and valuable consideration, the receipt
and acceptance of which are hereby acknowledged, the Executive and the Bank
hereby agree as follows:
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AGREEMENT
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Article
1
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Definitions
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Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:
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1.1
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βBeneficiaryβΒ means each
designated person, or the estate of the deceased Executive, entitled to
benefits, if any, upon the death of the Executive determined pursuant to
Article 4.
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1.2
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βBeneficiary Designation Formβ
means the form established from time to time by the Plan
Administrator that the Executive completes, signs and returns to the Plan
Administrator to designate one or more Beneficiaries.
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1.3
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βChange in Controlβ
means a change in the ownership of the Company or the Bank, a
change in the effective control of the Company or the Bank, or a change in
the ownership of a substantial portion of the assets of the Company or the
Bank, in each case as provided under Section 409A of the Code and the
regulations thereunder, provided, however, that neither any second-step
conversion and reorganization in which Malvern Federal Mutual Holding
Company (the βMHCβ) ceases to exist nor any increase in the ownership of
the Company by the MHC shall be deemed to be a Change in
Control.
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1.4
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βCodeβ means the
Internal Revenue Code of 1986, as amended.
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1.5
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βCompanyβ means Malvern
Federal Bancorp, Inc., the mid-tier stock holding company of the
Bank.
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1.6
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βDisabilityβΒ means the
Executive (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or (ii) is, by
reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and
health plan covering employees of the Bank (or would have been had the
Executive been eligible to participate in such
plan).
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1.7
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βEarly TerminationβΒ means the
Executiveβs Separation from Service before Normal Retirement Age for any
reason other than death, Disability, Termination for Cause or following a
Change in Control.
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1.8
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βEffective DateβΒ means April 1,
2004.
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1.9
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βNormal Retirement Ageβ
means the Executiveβs 65th
birthday.
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1.10
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βNormal Retirement Dateβ
means the later of the Normal Retirement Age or a Separation from
Service after reaching Normal Retirement Age.
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1.11
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βPlan
AdministratorβΒ means the plan
administrator described in Article 8.
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1.12
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βPlan Yearβ means each
consecutive twelve (12) month period commencing on October 1 and ending
the following September 30. The initial Plan Year shall commence on the
Effective Date and end on September 30, 2004.
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1.13
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βSeparation from
Serviceβ means a termination of the Executiveβs services (whether
as an employee or as an independent contractor) to the Bank (including
companies which are deemed to be part of a controlled group of
corporations with the Bank for purposes of Treas. Reg. Β§1.409A-1(h)) for
any reason. Whether a Separation from Service has occurred shall be
determined in accordance with the requirements of Section 409A of the Code
based on whether the facts and circumstances indicate that the Bank and
the Executive reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the
Executive would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than twenty
percent (20%) of the average level of bona fide services performed
(whether as an employee or an independent contractor) over the immediately
preceding thirty-six (36) month period.
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1.14
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βSpecified
EmployeeβΒ means a key
employee as defined in Section 416(i) of the Code (without regard to
Section 416(i)(5) of the Code) and as otherwise defined in Section 409A of
the Code and the regulations thereunder.
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Article
2
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Benefits
During Lifetime
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2.1
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Normal Retirement
Benefit. Upon the Executiveβs Separation from Service on or after
the Normal Retirement Age for any reason other than death, the Bank shall
pay to the Executive the benefit described in this Section 2.1 in lieu of
any other benefit under this Article.
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2.1.1
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Amount of
Benefit. The annual benefit under this Section 2.1 is FIFTY
THOUSAND DOLLARS ($50,000). If the Executive continues in the employ of
the Bank beyond Normal Retirement Age, the amount above shall be increased
3.5%Β for
each completed twelve-month period between Normal Retirement Age and the
earlier of (i) age seventy (70) or (ii) the Separation from
Service.
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2.1.2
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Payment of
Benefit. Subject to Section 2.5 hereof, if applicable, the Bank
shall pay the annual benefit to the Executive in twelve (12) equal monthly
installments commencing within ninety (90) days following the Executiveβs
Normal Retirement Date, and payable on the first of each month thereafter.
The annual benefit shall be paid to the Executive for fifteen (15)
years.
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2.2
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Early Termination
Benefit. Upon Early Termination, the Bank shall pay to the
Executive the benefit described in this Section 2.2 in lieu of any other
benefit under this Article.
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2
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2.2.1
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Amount of
Benefit. The annual benefit under this Section 2.2 is the Early
Termination Annual Benefit set forth on Schedule A for the Plan Year ended
immediately prior to the date on which Early Termination occurs. This
benefit is determined by vesting the Executive in one hundred percent
(100%) of the Accrual Balance shown on Schedule A (hereinafter βAccrual
Balanceβ).
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2.2.2
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Payment of
Benefit. Subject to Section 2.5 hereof, if applicable, the Bank
shall pay the annual benefit to the Executive in twelve (12) equal monthly
installments commencing within ninety (90) days following the Early
Termination, and payable on the first of each month thereafter. The annual
benefit shall be paid to the Executive for fifteen (15)
years.
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2.3
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Disability
Benefit. Upon the Executiveβs Separation from Service due to
Disability prior to Normal Retirement Age, the Bank shall pay to the
Executive the benefit described in this Section 2.3 in lieu of any other
benefit under this Article.
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2.3.1
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Amount of
Benefit. The annual benefit under this Section 2.3 is the
Disability Annual Benefit set forth on Schedule A for the Plan Year ended
immediately prior to the date on which the Separation from Service due to
Disability occurs. This benefit is determined by vesting the Executive in
one hundred percent (100%) of the Accrual Balance.
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2.3.2
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Payment of
Benefit. The Bank shall pay the annual benefit to the Executive in
twelve (12) equal monthly installments commencing with the month following
Normal Retirement Age and payable on the first of each month thereafter.
The annual benefit shall be paid to the Executive for fifteen (15)
years.
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2.4
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Change in Control
Benefit. Upon a Change in Control followed by the Executiveβs
Separation from Service before Normal Retirement Age for any reason other
than death or Disability, the Bank shall pay to the Executive the benefit
described in this Section 2.4 in lieu of any other benefit under this
Article.
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2.4.1
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Amount of
Benefit. The annual benefit under this Section 2.4 is the Change in
Control Annual Benefit set forth on Schedule A for the Plan Year ended
immediately prior to the date on which the Separation from Service
occurs.
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2.4.2
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Payment of
Benefit. Subject to Section 2.5 hereof, if applicable, the Bank
shall pay the annual benefit to the Executive in twelve (12) equal monthly
installments commencing within ninety (90) days following the Separation
from Service, and payable on the first of each month thereafter. The
annual benefit shall be paid to the Executive for fifteen (15)
years.
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2.5
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Restriction on Timing
of Distributions. Notwithstanding any provision of this Agreement
to the contrary, if the Executive is considered a Specified Employee at
the time of Separation from Service (for any reason other than death or
Disability) under such procedures as established by the Bank in accordance
with Section 409A of the Code, benefit distributions that are made as a
result of the Separation from Service may not commence earlier than six
(6) months after the date of such Separation from Service. Therefore, in
the event this Section 2.5 is applicable to the Executive, any
distribution which would otherwise be paid to the Executive within the
first six months following the Separation from Service shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Separation from Service. All subsequent
distributions shall be paid in the manner specified.
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2.6
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Distributions Upon
Income Inclusion Under Section 409A of the Code. Upon the inclusion
of any amount into the Executiveβs income as a result of the failure of
this Agreement to comply with the requirements of Section 409A of the
Code, to the extent such tax liability can be covered by the Executiveβs
accrual balance, a distribution shall be made as soon as is
administratively practicable following the discovery of the plan failure,
provided, however, that the amount of the distribution shall not exceed
the amount required to be included in income as a result of the failure to
comply with the requirements of Section 409A of the Code and the
regulations issued thereunder.
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3
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Article
3
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Death
Benefits
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3.1
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Death During Active
Service. If the Executive dies while in the active service of the
Bank, the Bank shall pay to the Beneficiary the benefit described in this
Section 3.1. This benefit shall be paid in lieu of the benefits under
Article 2.
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3.1.1
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Amount of
Benefit. The benefit under this Section 3.1 is the Death Benefit
set forth on Schedule A for the Plan Year ending immediately prior to the
date of the Executiveβs death.
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3.1.2
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Payment of
Benefit. The Bank shall pay the benefit to the Beneficiary in the
form elected by the Executive on the Election Form, attached hereto and
made a part of this Agreement, commencing within ninety (90) days
following receipt by the Bank of the Executiveβs death certificate. Any
change in the form or timing of the payment upon death shall not take
effect until at least 12 months after the Election Form is submitted by
the Executive and accepted by the Plan Administrator. If the Executive
elects installment payments, during the applicable installment period the
Bank shall credit interest on the unpaid Accrual Balance at an annual rate
equal to the yield on a 10-year U.S. Treasury Note, measured as of the end
of the month prior to the date of the Executiveβs death, plus two percent
(2%), compounded monthly. Notwithstanding any election by the Executive to
the contrary, if the benefit under this Section 3.1 is less than fifty
thousand dollars ($50,000), the Bank shall pay the benefit in a lump
sum.
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3.2
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Death During Benefit
Period. If the Executive dies after the benefit payments have
commenced under this Agreement but before receiving all such payments, the
Bank shall pay the remaining benefits to the Beneficiary at the same time
and in the same amounts they would have been paid to the Executive had the
Executive survived.
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3.3
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Death Following
Separation from Service But Before Benefits Commence. If the
Executive is entitled to benefits under this Agreement but dies prior to
the commencement of said benefits, the Bank shall pay to the Beneficiary
the same benefits, in the same manner, that would have been paid to the
Executive had the Executive survived; however, said benefit payments will
commence within ninety (90) days of the Executiveβs
death.
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Article
4
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Beneficiaries
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4.1
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Beneficiary
Designation. The Executive shall have the right, at any time, to
designate a Beneficiary(ies) to receive any benefits payable under this
Agreement upon the death of the Executive. The Beneficiary designated
under this Agreement may be the same as or different from the beneficiary
designated under any other benefit plan of the Bank in which the Executive
participates.
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4.2
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Beneficiary
Designation: Change. The Executive shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form, and delivering it
to the Plan Administrator or its designated agent. The Executiveβs
Beneficiary designation shall be deemed automatically revoked if the
Beneficiary predeceases the Executive or if the Executive names a spouse
as Beneficiary and the marriage is subsequently dissolved. The Executive
shall have the right to change a Beneficiary by completing, signing and
otherwise complying with the terms of the Beneficiary Designation Form and
the Plan Administratorβs rules and procedures, as in effect from time to
time. Upon the acceptance by the Plan Administrator of a new Beneficiary
Designation Form, all Beneficiary designations previously filed shall be
cancelled. The Plan Administrator shall be entitled to rely on the last
Beneficiary Designation Form filed by the Executive and accepted by the
Plan Administrator prior to the Executiveβs
death.
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4
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4.3
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Acknowledgment.
No designation or change in designation of a Beneficiary shall be
effective until received, accepted and acknowledged in writing by the Plan
Administrator or its designated agent.
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4.4
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No Beneficiary
Designation. If the Executive dies without a valid Beneficiary
designation, or if all designated Beneficiaries predecease the Executive,
then the Executiveβs spouse shall be the designated Beneficiary. If the
Executive has no surviving spouse, the benefits shall be made to the
personal representative of the Executiveβs estate.
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4.5
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Facility of
Payment. If the Plan Administrator determines in its discretion
that a benefit is to be paid to a minor, to a person declared incompetent,
or to a person incapable of handling the disposition of that personβs
property, the Plan Administrator may direct payment of such benefit to the
guardian, legal representative or person having the care or custody of
such minor, incompetent person or incapable person. The Plan Administrator
may require proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Any payment of a benefit
shall be a payment for the account of the Executive and the Executiveβs
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Agreement for such payment amount.
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Article
5
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General
Limitations
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5.1
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Excess Parachute or
Golden Parachute Payment. If the payments pursuant to this
Agreement, either alone or together with other payments and benefits which
the Executive has the right to receive from the Bank and the Company,
would constitute a βparachute paymentβ under Section 280G of the Code, or
would be a prohibited golden parachute payment pursuant to 12 C.F.R.
Β§359.2 and for which the appropriate federal banking agency has not given
written consent to pay pursuant to 12 C.F.R. Β§359.4, the amount of each of
the payments pursuant to this Agreement shall be reduced by the minimum
amount necessary to result in (i) no portion of the payments under this
Agreement being non-deductible to the Bank or the Company pursuant to
Section 280G of the Code and subject to the excise tax imposed under
Section 4999 of the Code, and (ii) no adverse consequence to the Bank or
the Company under or pursuant to such banking regulations. All amounts
payable under this Agreement shall also be subject to limitations or
prohibitions imposed by subsequent changes or amendments to the cited laws
and regulations except to the extent that any amounts payable under this
Agreement are grandfathered or otherwise exempt or excluded from the
change or amendment.
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5.2
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Termination for
Cause. Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not pay any benefit under this Agreement if the
Bank terminate the Executiveβs employment for Cause. Termination of the
Executiveβs employment for βCauseβ shall mean termination because of
personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order or
material breach of any provision of the Agreement. For purposes of this
paragraph, no act or failure to act on the Executiveβs part shall be
considered βwillfulβ unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the Executiveβs
action or omission was in the best interest of the
Bank.
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5.3
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Removal.
Notwithstanding any provision of this Agreement to the contrary, the Bank
shall not pay any benefit under this Agreement if the Executive is subject
to a final removal or prohibition order issued by an appropriate federal
banking agency pursuant to Section 8(e) of the Federal Deposit Insurance
Act (βFDIAβ).
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5.4
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Non-compete
Provision. The Executive shall forfeit any unpaid benefits under
this Agreement if during the term of this Agreement, and for a period of
five years after payment of benefits has commenced, the Executive,
directly or indirectly, either as an individual or as a proprietor,
stockholder, partner, officer, director, employee, agent, consultant or
independent contractor of any individual, partnership, corporation or
other entity (excluding an ownership interest of three percent (3%) or
less in the stock of a publicly-traded
company):
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5
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(i)
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becomes
employed by, participates in, or becomes connected in any manner with the
ownership, management, operation or control of any bank, savings and loan
or other similar financial institution if the Executiveβs responsibilities
will include providing banking or other financial services within the
twenty-five (25) miles of any office maintained by the Bank as of the date
of the Executiveβs Separation from Service;
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(ii)
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participates
in any way in hiring or otherwise engaging, or assisting any other person
or entity in hiring or otherwise engaging, on a temporary, part-time or
permanent basis, any individual who was employed by the Bank as of the
date of the Executiveβs Separation from Service;
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(iii)
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assists,
advises, or serves in any capacity, representative or otherwise, any third
party in any action against the Bank or transaction involving the
Bank;
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(iv)
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sells,
offers to sell, provides banking or other financial services, assists any
other person in selling or providing banking or other financial services,
or solicits or otherwise competes for, either directly or indirectly, any
orders, contract, or accounts for services of a kind or nature like or
substantially similar to the financial services performed or financial
products sold by the Bank (the preceding hereinafter referred to as
βServicesβ), to or from any person or entity from whom the Executive or
the Bank, to the knowledge of the Executive, provided banking or other
financial services, sold, offered to sell or solicited orders, contracts
or accounts for Services during the three (3) year period immediately
prior to the Executiveβs Separation from Service;
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(v)
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divulges,
discloses, or communicates to others in any manner whatsoever, any
confidential information of the Bank, to the knowledge of the Executive,
including, but not limited to, the names and addresses of customers or
prospective customers of the Bank, as they may have existed from time to
time, of work performed or services rendered for any customer, any method
and/or procedures relating to projects or other work developed for the
Bank, earnings or other information concerning the Bank. The restrictions
contained in this subparagraph (v) apply to all information regarding the
Bank, regardless of the source who provided or compiled such information.
Notwithstanding anything to the contrary, all information referred to
herein shall not be disclosed unless and until it becomes known to the
general public from sources other than the Executive.
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5.4.1
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Judicial
Remedies. In the event of a breach or threatened breach by the
Executive of any provision of these restrictions, the Executive recognizes
the substantial and immediate harm that a breach or threatened breach will
impose upon the Bank, and further recognizes that in such event monetary
damages may be inadequate to fully protect the Bank. Accordingly, in the
event of a breach or threatened breach of these restrictions, the
Executive consents to the Bankβs entitlement to such ex parte,
preliminary, interlocutory, temporary or permanent injunctive, or any
other equitable relief, protecting and fully enforcing the Bankβs rights
hereunder and preventing the Executive from further breaching any of his
obligations set forth herein. The Executive expressly waives any
requirement, based on any statute, rule of procedure, or other source,
that the Bank post a bond as a condition of obtaining any of the
above-described remedies. Nothing herein shall be construed as prohibiting
the Bank from pursuing any other remedies available to the Bank at law or
in equity for such breach or threatened breach, including the recovery of
damages from the Executive. The Executive expressly acknowledges and
agrees that: (i) the restrictions set forth in Section 5.4 hereof are
reasonable, in terms of scope, duration, geographic area, and otherwise,
(ii) the protections afforded the Bank in Section 5.4 hereof are necessary
to protect its legitimate business interest, (iii) the restrictions set
forth in Section 5.4 hereof will not be materially adverse to the
Executiveβs employment with the Bank, and (iv) his agreement to observe
such restrictions forms a material part of the consideration for this
Agreement.
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5.4.2
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Overbreadth of
Restrictive Covenant. It is the intention of the parties that if
any restrictive covenant in this Agreement is determined by a court of
competent jurisdiction to be overly broad, then the court should enforce
such restrictive covenant to the maximum extent permitted under the law as
to area, breadth and duration.
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6
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5.4.3
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Change in
Control. The non-compete provision detailed in Section 5.4 hereof
shall not be enforceable or applicable following a Change in
Control.
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5.5
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Suicide or
Misstatement. No benefits shall be payable if the Executive commits
suicide within two years after the date of the Prior Agreement, or if the
insurance company denies coverage (i) for material misstatements of fact
made by the Executive on any application for life insurance purchased by
the Bank, or (ii) for any other reason.
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Article
6
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Claims
and Review Procedures
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6.1
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Claims
Procedure. An Executive or Beneficiary (βclaimantβ) who has not
received benefits under the Agreement that he or she believes should be
paid shall make a claim for such benefits as follows:
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6.1.1
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Initiation - Written
Claim. The claimant initiates a claim by submitting to the Plan
Administrator a written claim for the benefits.
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6.1.2
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Timing of Bank
Response. The Plan Administrator shall respond to such claimant
within 90 days after receiving the claim. If the Plan Administrator
determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response
period by an additional 90 days by notifying the claimant in writing,
prior to the end of the initial 90-day period, that an additional period
is required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to
render its decision.
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6.1.3
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Notice of
Decision. If the Plan Administrator denies part or all of the
claim, the Plan Administrator shall notify the claimant in writing of such
denial. The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set
forth:
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6.1.3.1
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The
specific reasons for the denial,
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6.1.3.2
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A
reference to the specific provisions of the Agreement on which the denial
is based,
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6.1.3.3
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A
description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is
needed,
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6.1.3.4
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An
explanation of the Agreementβs review procedures and the time limits
applicable to such procedures, and
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6.1.3.5
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A
statement of the claimantβs right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
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6.2
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Review
Procedure. If the Plan Administrator denies part or all of the
claim, the claimant shall have the opportunity for a full and fair review
by the Plan Administrator of the denial, as follows:
|
||
Β | Β | ||
Β |
6.2.1
|
Initiation - Written
Request. To initiate the review, the claimant, within 60 days after
receiving the Plan Administratorβs notice of denial, must file with the
Plan Administrator a written request for review.
|
|
Β | Β | Β | |
Β |
6.2.2
|
Additional Submissions
- Information Access. The claimant shall then have the opportunity
to submit written comments, documents, records and other information
relating to the claim. The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the claimantβs claim for
benefits.
|
Β
7
Β
Β |
6.2.3
|
Considerations on
Review. In considering the review, the Plan Administrator shall
take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit
determination.
|
|
Β | Β | Β | |
Β |
6.2.4
|
Timing of Plan
Administrator Response. The Plan Administrator shall respond in
writing to such claimant within 60 days after receiving the request for
review. If the Plan Administrator determines that special circumstances
require additional time for processing the claim, the Plan Administrator
can extend the response period by an additional 60 days by notifying the
claimant in writing, prior to the end of the initial 60-day period, that
an additional period is required. The notice of extension must set forth
the special circumstances and the date by which the Plan Administrator
expects to render its decision.
|
|
Β | Β | Β | |
Β |
6.2.5
|
Notice of
Decision. The Plan Administrator shall notify the claimant in
writing of its decision on review. The Plan Administrator shall write the
notification in a manner calculated to be understood by the claimant. If
the Plan Administrator denies part or all of the claim, the notification
shall set forth:
|
|
Β | Β | Β | |
Β | Β |
6.2.5.1
|
The
specific reasons for the denial,
|
Β | Β | Β | Β |
Β | Β |
6.2.5.2
|
A
reference to the specific provisions of the Agreement on which the denial
is based,
|
Β | Β | Β | Β |
Β | Β |
6.2.5.3
|
A
statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to
the claimantβs claim for benefits, and
|
Β | Β | Β | Β |
Β | Β |
6.2.5.4
|
A
statement of the claimantβs right to bring a civil action under ERISA
Section 502(a).
|
Β | Β | Β | Β |
Article
7
|
|||
Amendments
and Termination
|
|||
Β | |||
7.1
|
Amendments.
This Agreement may be amended only by a written agreement signed by the
Bank and the Executive. However, the Bank may unilaterally amend this
Agreement to conform with written directives to the Bank from its banking
regulators or to comply with legislative changes or tax law, including
without limitation Section 409A of the Code and any and all Treasury
regulations and guidance promulgated thereunder.
|
||
Β | Β | ||
7.2
|
Plan Termination
Generally. The Bank may unilaterally terminate this Agreement at
any time. Except as provided in Section 7.3, the termination of this
Agreement shall not cause a distribution of benefits under this Agreement.
Rather, upon such termination benefit distributions will be made at the
earliest distribution event permitted under Article 2 or Article
3.
|
||
Β | Β | ||
7.3
|
Plan Terminations
Under Section 409A. Under no circumstances may the Agreement permit
the acceleration of the time or form of any payment under the Agreement
prior to the payment events specified herein, except as provided in this
Section 7.3. The Bank may, in its discretion, elect to terminate the
Agreement in any of the following three circumstances and accelerate the
payment of the entire unpaid balance of the Executiveβs vested benefits as
of the date of such payment in accordance with Section 409A of the Code,
provided that in each case the action taken complies with the applicable
requirements set forth in Treasury Regulation
Β§1.409A-3(j)(4)(ix):
|
||
Β | Β | ||
Β |
(a)
|
the
Agreement is irrevocably terminated within the 30 days preceding a Change
in Control and (1) all arrangements sponsored by the Company and the Bank
and any successors immediately following the Change in Control that would
be aggregated with the Agreement under Treasury Regulation Β§1.409A-1(c)(2)
are terminated with respect to each participant that experienced the
Change in Control event, and (2) the Executive and all participants under
the other aggregated arrangements receive all of their benefits under the
terminated arrangements within 12 months of the date that all necessary
action to irrevocably terminate the Agreement and the other aggregated
arrangements is taken;
|
Β
8
Β
Β |
(b)
|
the
Agreement is irrevocably terminated at a time that is not proximate to a
downturn in the financial health of the Company or the Bank and (1) all
arrangements sponsored by the Company and the Bank that would be
aggregated with the Agreement under Treasury Regulation Β§1.409A-1(c) if
the Executive participated in such arrangements are terminated, (2) no
payments are made within 12 months of the date the Company and the Bank
take all necessary action to irrevocably terminate the arrangements, other
than payments that would be payable under the terms of the arrangements if
the termination had not occurred; (3) all payments are made within 24
months of the date the Company and the Bank take all necessary action to
irrevocably terminate the arrangements; and (4) neither the Company nor
the Bank adopts a new arrangement that would be aggregated with the
Agreement under Treasury Regulation Β§1.409A-1(c) if the Executive
participated in both arrangements, at any time within three years
following the date the Company and the Bank take all necessary action to
irrevocably terminate the Agreement; or
|
Β | Β | Β |
Β |
(c)
|
the
Agreement is terminated within 12 months of a corporate dissolution taxed
under Section 331 of the Code, or with the approval of a bankruptcy court
pursuant to 11 U.S.C. Β§503(b)(1)(A), provided that the amounts deferred by
the Executive under the Agreement are included in the Executiveβs gross
income in the later of (1) the calendar year in which the termination of
the Agreement occurs, or (2) the first calendar year in which the payment
is administratively practicable.
|
Β | Β | Β |
Article
8
|
||
Administration
|
||
Β | ||
8.1
|
Plan Administrator
Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Bankβs Board of Directors, or
such committee or person(s) as the Board of Directors shall appoint. The
Executive may be a member of the Plan Administrator. The Plan
Administrator shall also have the discretion and authority to (i) make,
amend, interpret and enforce all appropriate rules and regulations for the
administration of this Agreement and (ii) decide or resolve any and all
questions, including interpretations of this Agreement, as may arise in
connection with the Agreement. Any acts under this section shall be
restricted to actions which do not violate Section 409A of the
Code.
|
|
Β | Β | |
8.2
|
Agents. In the
administration of this Agreement, the Plan Administrator may employ agents
and delegate to them such administrative duties as it sees fit (including
acting through a duly appointed representative), and may from time to time
consult with counsel who may be counsel to the Bank.
|
|
Β | Β | |
8.3
|
Binding Effect of
Decisions. The decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive
and binding upon all persons having any interest in the
Agreement.
|
|
Β | Β | |
8.4
|
Indemnity of Plan
Administrator. The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act
with respect to this Agreement, except in the case of willful misconduct
by the Plan Administrator or any of its members.
|
|
Β | Β | |
8.5
|
Bank
Information. To enable the Plan Administrator to perform its
functions, the Bank shall supply full and timely information to the Plan
Administrator on all matters relating to the date and circumstances of the
retirement, Disability, death, or Separation from Service of the
Executive, and such other pertinent information as the Plan Administrator
may reasonably require.
|
|
Β | Β | |
8.6
|
Annual
Statement. The Plan Administrator shall provide to the Executive,
within 120 days after the end of each Plan Year, a statement setting forth
the benefits payable under this
Agreement.
|
Β
9
Β
Article
9
|
|
Miscellaneous
|
|
Β | |
9.1
|
Applicable Law.
The Agreement and all rights hereunder shall be governed by the laws of
the Commonwealth of Pennsylvania, except to the extent preempted by the
laws of the United States of America.
|
Β | Β |
9.2
|
Binding Effect.
This Agreement shall bind the Executive and the Bank, and their
beneficiaries, survivors, executors, successors, administrators and
transferees.
|
Β | Β |
9.3
|
Entire
Agreement. This Agreement constitutes the entire agreement between
the Bank and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein. All prior agreements between the Bank and
the Executive with respect to the matters agreed to herein are hereby
superseded and shall have no force or effect, including but not limited to
the Prior Agreement.
|
Β | Β |
9.4
|
Right of
Offset. The Bank shall have the right to offset the benefits
against any unpaid obligation the Executive may have with the
Bank.
|
Β | Β |
9.5
|
No Guarantee of
Employment. This Agreement is not an employment policy or contract.
It does not give the Executive the right to remain an employee of the
Bank, nor does it interfere with the Bankβs right to discharge the
Executive. It also does not require the Executive to remain an employee
nor interfere with the Executiveβs right to terminate employment at any
time.
|
Β | Β |
9.6
|
Non-Transferability.
Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any manner.
|
Β | Β |
9.7
|
Notice. For the
purposes of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by certified or registered mail,
return receipt requested, postage prepaid, addressed to the respective
addresses set forth below:
|
Β |
To
the Bank:
|
Secretary
|
Β | Β |
Malvern
Federal Savings Bank
|
Β | Β |
00
X. Xxxxxxxxx Xxxxxx
|
Β | Β |
XX
Xxx 000
|
Β | Β |
Xxxxx,
Xxxxxxxxxxxx 00000
|
Β | Β | Β |
Β |
To
the Executive:
|
Xxxxxx
Xxxxx
|
Β | Β |
At
the address last appearing on the
|
Β | Β |
personnel
records of the Bank
|
9.8
|
Reorganization.
The Bank shall not merge or consolidate into or with another company, or
reorganize, or sell substantially all of its assets to another company,
firm or person unless such succeeding or continuing company, firm or
person agrees to assume and discharge the obligations of the Bank
hereunder.
|
Β | Β |
9.9
|
Tax
Withholding. The Bank shall withhold any taxes that, in its
reasonable judgment, are required to be withheld from the benefits
provided under this Agreement. The Executive acknowledges that the Bankβs
sole liability regarding taxes is to forward any amounts withheld to the
appropriate taxing authority(ies).
|
Β | Β |
9.10
|
Nature of
Obligations. Nothing contained herein shall create or require the
Bank to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Bank hereunder, such right shall be no
greater than the right of any unsecured general creditor of the
Bank.
|
Β
10
Β
9.11
|
Headings. The
section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
|
Β | Β |
9.12
|
Validity. The
invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.
|
Β | Β |
9.13
|
Waiver. No
waiver by any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time.
|
Β | Β |
9.14
|
Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will
constitute one and the same instrument.
|
Β | Β |
9.15
|
Regulatory
Prohibition. Notwithstanding any other provision of this Agreement
to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA(12 U.S.C. Β§1828(k)) and any
regulations promulgated thereunder, including 12 C.F.R. Part
359.
|
Β | Β |
9.16
|
Compliance with
Section 409A. This Agreement shall at all times be administered and
the provisions of this Agreement shall be interpreted consistent with the
requirements of Section 409A of the Code and any and all regulations
thereunder, including such regulations as may be promulgated after the
Effective Date of this Agreement.
|
Β | Β |
9.17
|
Rescission. Any
modification to the terms of this Agreement that would inadvertently
result in an additional tax liability on the part of the Executive shall
have no effect, provided the change in the terms of the Agreement is
rescinded by the earlier of a date before the right is exercised (if the
change grants a discretionary right) and the last day of the calendar year
during which such change occurred.
|
Β
[signature
page follows]
Β
11
Β
Β
Β Β Β Β Β Β Β Β Β Β IN WITNESS WHEREOF, the Executive and a duly
authorized officer of the Bank have signed this Agreement as of the date first
written above.
Β | Β | |||
EXECUTIVE:
|
Β |
MALVERN
FEDERAL SAVINGS BANK
|
||
Β | Β | Β | ||
/s/ Xxxxxx XxxxxΒ | Β |
By:
Β
|
/s/ Xxxxxx XxxxxxxxΒ | Β |
Xxxxxx
Xxxxx
|
Β |
Β Β Β Β Β Β Β Β
Xxxxxx Xxxxxxxx, President and
|
||
Β | Β |
Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Chief
Executive Officer
|
Β
Β
12
Β
Β
![CLARK LOGO](https://www.sec.gov/Archives/edgar/data/1420488/000118811208003380/img001.jpg)
Β
Β
Supplemental Executive Retirement Plan- Schedule AΒ
Β
Executive:
Xxxxxx Xxxxx
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | |||||||
Β |
Period
Ending
Sep
of
|
Β |
Age
|
Β | Β |
Accrued
Liability
|
Β | Β |
%
Vested
in
Accrued
Liability
|
Β | Β |
Value
of
Vested
Benefit
|
Β | Β |
Value
as a %
of
Potential
Final
Value
|
Β | Β |
Termination
For
Cause
|
Β | Β |
Early
Termination
Annual
Benefit
(1)
|
Β | Β |
Disability
Annual
Benefit
(2)
|
Β | Β |
Change
in Control
Annual
Benefit
(3)
|
Β | Β |
Preretirement
Lump
Sum
Death Benefit
(4)
|
Β | |||||||
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | |||||||
Β |
4/2004
|
Β |
52
|
Β | Β | $ | 0 | Β | Β | 100.00 | % | Β | $ | 0 | Β | Β | 0.00 | % | Β | $ | 0 | Β | Β | $ | 0 | Β | Β | $ | 0 | Β | Β | $ | 30,029 | Β | Β | $ | 298,025 | Β |
Β |
2004
|
Β
|
52
|
Β | Β | $ | 12,805 | Β | Β | 100.00 | % | Β | $ | 12,805 | Β | Β | 2.58 | % | Β | $ | 0 | Β | Β | $ | 1,290 | Β | Β | $ | 2,726 | Β | Β | $ | 30,623 | Β | Β | $ | 303,927 | Β |
Β |
2005
|
Β |
53
|
Β | Β | $ | 39,593 | Β | Β | 100.00 | % | Β | $ | 39,593 | Β | Β | 7.98 | % | Β | $ | 0 | Β | Β | $ | 3,989 | Β | Β | $ | 7,940 | Β | Β | $ | 31,848 | Β | Β | $ | 316,084 | Β |
Β |
2006
|
Β |
54
|
Β | Β | $ | 68,034 | Β | Β | 100.00 | % | Β | $ | 68,034 | Β | Β | 13.71 | % | Β | $ | 0 | Β | Β | $ | 6,855 | Β | Β | $ | 12,851 | Β | Β | $ | 33,122 | Β | Β | $ | 328,727 | Β |
Β |
2007
|
Β |
55
|
Β | Β | $ | 98,229 | Β | Β | 100.00 | % | Β | $ | 98,229 | Β | Β | 19.79 | % | Β | $ | 0 | Β | Β | $ | 9,897 | Β | Β | $ | 17,476 | Β | Β | $ | 34,447 | Β | Β | $ | 341,877 | Β |
Β |
2008
|
Β |
56
|
Β | Β | $ | 130,286 | Β | Β | 100.00 | % | Β | $ | 130,286 | Β | Β | 26.25 | % | Β | $ | 0 | Β | Β | $ | 13,127 | Β | Β | $ | 21,833 | Β | Β | $ | 35,825 | Β | Β | $ | 355,552 | Β |
Β |
2009
|
Β |
57
|
Β | Β | $ | 164,321 | Β | Β | 100.00 | % | Β | $ | 164,321 | Β | Β | 33.11 | % | Β | $ | 0 | Β | Β | $ | 16,557 | Β | Β | $ | 25,937 | Β | Β | $ | 37,258 | Β | Β | $ | 369,774 | Β |
Β |
2010
|
Β |
58
|
Β | Β | $ | 200,454 | Β | Β | 100.00 | % | Β | $ | 200,454 | Β | Β | 40.40 | % | Β | $ | 0 | Β | Β | $ | 20,198 | Β | Β | $ | 29,802 | Β | Β | $ | 38,748 | Β | Β | $ | 384,565 | Β |
Β |
2011
|
Β |
59
|
Β | Β | $ | 238,816 | Β | Β | 100.00 | % | Β | $ | 238,816 | Β | Β | 48.13 | % | Β | $ | 0 | Β | Β | $ | 24,063 | Β | Β | $ | 33,443 | Β | Β | $ | 40,298 | Β | Β | $ | 399,947 | Β |
Β |
2012
|
Β |
60
|
Β | Β | $ | 279,545 | Β | Β | 100.00 | % | Β | $ | 279,545 | Β | Β | 56.33 | % | Β | $ | 0 | Β | Β | $ | 28,167 | Β | Β | $ | 36,873 | Β | Β | $ | 41,910 | Β | Β | $ | 415,945 | Β |
Β |
2013
|
Β |
61
|
Β | Β | $ | 322,785 | Β | Β | 100.00 | % | Β | $ | 322,785 | Β | Β | 65.05 | % | Β | $ | 0 | Β | Β | $ | 32,524 | Β | Β | $ | 40,103 | Β | Β | $ | 43,587 | Β | Β | $ | 432,583 | Β |
Β |
2014
|
Β |
62
|
Β | Β | $ | 368,692 | Β | Β | 100.00 | % | Β | $ | 368,692 | Β | Β | 74.30 | % | Β | $ | 0 | Β | Β | $ | 37,149 | Β | Β | $ | 43,145 | Β | Β | $ | 45,330 | Β | Β | $ | 449,886 | Β |
Β |
2015
|
Β |
63
|
Β | Β | $ | 417,431 | Β | Β | 100.00 | % | Β | $ | 417,431 | Β | Β | 84.12 | % | Β | $ | 0 | Β | Β | $ | 42,060 | Β | Β | $ | 46,011 | Β | Β | $ | 47,143 | Β | Β | $ | 467,882 | Β |
Β |
2016
|
Β |
64
|
Β | Β | $ | 469,176 | Β | Β | 100.00 | % | Β | $ | 469,176 | Β | Β | 94.55 | % | Β | $ | 0 | Β | Β | $ | 47,274 | Β | Β | $ | 48,710 | Β | Β | $ | 49,029 | Β | Β | $ | 486,597 | Β |
Β |
3/2017
|
Β |
65
|
Β | Β | $ | 496,233 | Β | Β | 100.00 | % | Β | $ | 496,233 | Β | Β | 100.00 | % | Β | $ | 0 | Β | Β | $ | 50,000 | Β | Β | $ | 50,000 | Β | Β | $ | 50,000 | Β | Β | $ | 496,233 | Β |
Β |
3/2018
|
Β |
66
|
Β | Β | $ | 513,602 | Β | Β | 100.00 | % | Β | $ | 513,602 | Β | Β | 103.50 | % | Β | $ | 0 | Β | Β | $ | 51,750 | Β | Β | $ | 51,750 | Β | Β | $ | 51,750 | Β | Β | $ | 513,602 | Β |
Β |
3/2019
|
Β |
67
|
Β | Β | $ | 531,578 | Β | Β | 100.00 | % | Β | $ | 531,578 | Β | Β | 107.12 | % | Β | $ | 0 | Β | Β | $ | 53,561 | Β | Β | $ | 53,561 | Β | Β | $ | 53,561 | Β | Β | $ | 531,578 | Β |
Β |
3/2020
|
Β |
68
|
Β | Β | $ | 550,183 | Β | Β | 100.00 | % | Β | $ | 550,183 | Β | Β | 110.87 | % | Β | $ | 0 | Β | Β | $ | 55,436 | Β | Β | $ | 55,436 | Β | Β | $ | 55,436 | Β | Β | $ | 550,183 | Β |
Β |
3/2021
|
Β |
69
|
Β | Β | $ | 569,439 | Β | Β | 100.00 | % | Β | $ | 569,439 | Β | Β | 114.75 | % | Β | $ | 0 | Β | Β | $ | 57,376 | Β | Β | $ | 57,376 | Β | Β | $ | 57,376 | Β | Β | $ | 569,439 | Β |
Β |
3/2022
|
Β |
70
|
Β | Β | $ | 589,370 | Β | Β | 100.00 | % | Β | $ | 589,370 | Β | Β | 118.77 | % | Β | $ | 0 | Β | Β | $ | 59,384 | Β | Β | $ | 59,384 | Β | Β | $ | 59,384 | Β | Β | $ | 589,370 | Β |
Β
Β
Β
Explanation:
|
In
each case, the benefit is based on the year-end amount listed immediately
prior to date termination of employment occurs. The benefits are payable
as stated below:
|
|
Β | Β | Β |
(1)
|
Β |
Payments
commence at termination of employment and are payable to the officer or
the officerβs beneficiary in equal monthly installments for 15
years.
|
Β | Β | Β |
(2)
|
Β |
Payments
commence at normal retirement age and are payable to the officer or the
officerβs beneficiary in equal monthly installments for 15
years.
|
Β | Β | Β |
(3)
|
Β |
Payments
commence at termination of employment and are payable to the officer or
the officerβs beneficiary in equal monthly installments for 15
years.
|
Β | Β | Β |
Β | Β |
The
amounts are computed by determining the present value of the projected
annual retirement benefit using a 4.00% discount rate. 4.00% was used
since this is the rate used to project salary
increases.
|
Β | Β | Β |
(4)
|
Β |
The
listed amounts represent the lump sum value at death. Distributions will
be made as elected by the officer (lump sum or annuitized over 60, 120, or
180 months).
|
Β | Β | Β |
Β | Β |
The
amounts are computed by determining the present value of the total
projected annual retirement benefits using a 4.00% discount rate. 4.00%
was used since this is the rate used to project salary
increases.
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Β | Β | Β |
Note:
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Β |
The
Accrued Liability balance is based on the accruals required under
Generally Accepted Accounting Principles (GAAP). It is based on a plan
commencement date of April 1, 2004, the interest method of accounting, and
a 6.00% discount rate, compounded monthly. In event the officer works for
the company beyond the age of 65, the annual SERP benefit will be
increased by 3.50% per year from age 66 through age
70.
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