RIVER VALLEY FINANCIAL BANK SALARY CONTINUATION AGREEMENT
EXHIBIT
10.3
RIVER
VALLEY FINANCIAL BANK
THIS
SALARY CONTINUATION AGREEMENT (this “Agreement”) is adopted this 25th day of
January, 2007, by and between RIVER VALLEY FINANCIAL BANK, a savings association
located in Madison, Indiana (the “Bank”), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the
“Executive”).
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
(“ERISA”), as amended from time to time.
Article
1
Definitions
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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“Accrual
Balance”
means the liability that should be accrued by the Bank, under Generally
Accepted Accounting Principles (“GAAP”), for the Bank’s obligation to the
Executive under this Agreement, by applying Accounting Principles
Board
Opinion Number 12 (“APB 12”) as amended by Statement of Financial
Accounting Standards Number 106 (“FAS 106”) and the Discount Rate. Any one
of a variety of amortization methods may be used to determine the
Accrual
Balance. However, once chosen, the method must be consistently applied.
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1.2
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“Beneficiary”
means each designated person or entity, or the estate of the deceased
Executive, entitled to any benefits upon the death of the Executive
pursuant to Article 4.
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1.3
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“Beneficiary
Designation Form”
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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1.4
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“Board”
means the Board of Directors of the Bank as from time to time
constituted.
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1.5
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“Change
in Control”
means a change in the ownership or effective control of the Bank,
or in
the ownership of a substantial portion of the assets of the Bank,
as such
change is defined in Code Section 409A.
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1.6
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“Code”
means the Internal Revenue Code of 1986, as amended, and all regulations
and
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guidance
thereunder, including such regulations and guidance as may be promulgated after
the Effective Date of this Agreement.
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1.7
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“Disability”
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 twelve (12) months, receiving
income
replacement benefits for a period of not less than three (3) months
under
an accident and health plan covering employees or directors of the
Bank.
Medical determination of Disability may be made by either the Social
Security Administration or by the provider of an accident or health
plan
covering employees or directors of the Bank, provided that the definition
of “disability” applied under such insurance program complies with the
requirements of the preceding sentence. Upon the request of the Plan
Administrator, the Executive must submit proof to the Plan Administrator
of the Social Security Administration’s or the provider’s
determination.
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1.8
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“Discount
Rate”
means the rate used by the Plan Administrator for determining the
Accrual
Balance. The initial Discount Rate is six percent (6%). However,
the Plan
Administrator, in its discretion, may adjust the Discount Rate to
maintain
the rate within reasonable standards according to GAAP and/or applicable
bank regulatory guidance.
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1.9
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“Early
Retirement”
means Separation from Service after Early Retirement Age and before
Normal
Retirement Age.
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1.10
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“Early
Retirement Age”
means the Executive attaining age sixty two
(62).
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1.11
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“Early
Termination” means
Separation from Service before Early Retirement Age except when such
Separation from Service occurs (i) following a Change in Control;
or (ii)
due to death, Termination for Cause or
Disability.
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1.12
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“Effective
Date”
means January 1, 2007.
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1.13
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“Employment
Agreement”
means the Employment Agreement between the Bank and the Executive
effective October 12, 1999, as it may be amended from time to
time.
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1.14
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“Normal
Retirement Age”
means the Executive attaining age sixty five
(65).
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1.15
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“Normal
Retirement Date”
means the later of Normal Retirement Age or Separation from
Service.
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1.16
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“Plan
Administrator”
means the Board or such committee or person as the Board shall
appoint.
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2
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1.17
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“Plan
Year”
means each twelve (12) month period commencing on January 1 and ending
on
December 31 of each year. The initial Plan Year shall commence on
the
Effective Date of this Agreement and end on the following December
31.
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1.18
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“Separation
from Service”
means the termination of the Executive’s
employment with
the Bank for reasons other than death. Whether
a Separation from Service takes place is determined in accordance
with the
requirements of Code Section 409A based on the facts and circumstances
surrounding the termination of the Executive’s employment and whether the
Bank and the Executive intended for the Executive to provide significant
services for the Bank following such termination. A Separation from
Service will not have occurred if:
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(a)
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the
Executive continues to provide services as an employee of the Bank
at an
annual rate that is twenty percent (20%) or more of the services
rendered,
on average, during the immediately preceding three (3) full calendar
years
of employment (or, if employed less than three (3) years, such lesser
period) and the annual remuneration for such services is twenty percent
(20%) or more of the average annual remuneration earned during the
final
three (3) full calendar years of employment (or, if less, such lesser
period), or
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(b) the
Executive continues to provide services to the Bank in a capacity other than
as
an employee of the Bank at an annual rate that is fifty percent (50%) or more
of
the services rendered, on average, during the immediately preceding three (3)
full calendar years of employment (or if employed less than three (3) years,
such lesser period) and the annual remuneration for such services is fifty
percent (50%) or more of the average annual remuneration earned during the
final
three (3) full calendar years of employment (or if less, such lesser period).
The
Executive’s employment relationship will be treated as continuing intact while
the Executive is on military leave, sick leave or other bona fide leave of
absence if the period of such leave of absence does not exceed six (6) months,
or if longer, so long as the Executive’s right to reemployment with the Bank is
provided either by statute or by contract. If the period of leave exceeds six
(6) months and there is no right to reemployment, a Separation from Service
will
be deemed to have occurred as of the first date immediately following such
six
(6) month period.
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1.19
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“Specified
Employee”
means a key employee (as defined in Code Section 416(i) without regard
to
paragraph 5 thereof) of the Bank if any stock of the Bank or any
entity
required to be aggregated with the Bank under Section 414(b) or Section
414(c) of the Code is publicly traded on an established securities
market
or otherwise, as determined by the Plan Administrator based on the
twelve
(12) month period ending each December 31 (the “identification period”).
If the Executive is determined to be a Specified Employee for
an
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3
identification
period, the Executive shall be treated as a Specified Employee for purposes
of
this Agreement during the twelve (12) month period that begins on the first
day
of the fourth month following the close of the identification
period.
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1.20
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“Termination
for Cause”
means Separation from Service for the Executive’s personal dishonesty,
incompetence, 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 this Agreement:
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Article
2
Distributions
During Lifetime
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2.1
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Normal
Retirement Benefit.
Upon the Normal Retirement Date, the Bank shall distribute 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).
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2.1.2
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Distribution
of Benefit.
The Bank shall distribute the annual benefit to the Executive in
twelve
(12) equal monthly installments commencing on the first day of the
month
following Separation from Service. The annual benefit shall be distributed
to the Executive for fifteen (15)
years.
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2.2
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Early
Retirement Benefit.
Upon Separation from Service after Early Retirement Age and before
Normal
Retirement Age, the Bank shall distribute to the Executive the benefit
described in this Section 2.2 in lieu of any other benefit under
this
Article.
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2.2.1
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Amount
of Benefit.
The benefit under this Section 2.2 is the Accrual Balance determined
as of
the end of the month preceding Separation from Service.
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2.2.2
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Distribution
of Benefit.
The Bank shall distribute the benefit to the Executive in one hundred
eighty (180) equal monthly installments commencing on the first day
of the
month following Separation from
Service.
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2.3
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Early
Termination Benefit.
If Early Termination occurs, the Bank shall distribute 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 benefit under this Section 2.3 is the Accrual Balance determined
as of
the end of the month preceding Separation from Service.
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2.3.2
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Distribution
of Benefit.
The Bank shall distribute the benefit to the Executive in a lump
sum
within thirty (30) days following Separation from Service.
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2.4
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Disability
Benefit.
If the Executive experiences a Disability which results in a Separation
from Service prior to Early Retirement Age, the Bank shall distribute
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
benefit under this Section 2.4 is the Accrual Balance determined
as of the
end of the month preceding Separation from
Service.
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2.4.2
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Distribution
of Benefit.
The Bank shall distribute the benefit to the Executive in a lump
sum
within thirty (30) days following Separation from
Service.
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2.5
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Change
in Control Benefit.
If a Change in Control occurs followed by a Separation from Service,
the
Bank shall distribute to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Article.
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2.5.1
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Amount
of Benefit.
The
benefit under this Section 2.5 is the Normal Retirement Benefit set
forth
at Section 2.1.1.
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2.5.2
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Distribution
of Benefit.
The Bank shall distribute the benefit to the Executive in a lump
sum
within thirty (30) days following Separation from Service.
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2.5.3
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280G
Limits.
Anything in this Agreement to the contrary notwithstanding, in the
event
that the Bank’s independent public accountants determine that any payment
by the Bank to or for the benefit of the Executive, whether paid
or
payable pursuant to the terms of this Agreement or pursuant to any
other
agreement, would be non-deductible by the Bank for federal income
tax
purposes because of Section 280G of the Code, then the amount payable
to
or for the benefit of the Executive pursuant to this Agreement shall
be
reduced (but not below zero) to the Reduced Amount. For purposes
of this
Section 2.5.3, the “Reduced Amount” shall be the amount which maximizes
the amount payable without causing the payment to be non-deductible by
the
Bank because of Section 280G of the Code.
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2.6
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Restriction
on Commencement of Distributions.
Notwithstanding any provision of this Agreement to the contrary,
if the
Executive is considered a Specified Employee at Separation from Service,
the provisions of this Section 2.6 shall govern all distributions
hereunder. Benefit distributions that are made due to a Separation
from
Service occurring while the Executive is a Specified Employee shall
not be
made during the first six (6) months following Separation from Service.
Rather, any distribution which would otherwise be paid to the Executive
during such period 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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2.7
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Distributions
Upon Income Inclusion Under Code Section 409A.
If any amount is required to be included in income by the Executive
prior
to receipt due to a failure of
this
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5
Agreement
to meet the requirements of Code Section 409A, the Executive may petition the
Plan Administrator for a distribution of that portion of the amount the Bank
has
accrued with respect to the Bank’s obligations hereunder that is required to be
included in the Executive’s income. Upon the grant of such a petition, which
grant shall not be unreasonably withheld, the Bank shall distribute to the
Executive immediately available funds in an amount equal to the portion of
the
amount the Bank has accrued with respect to the Bank’s obligations hereunder
required to be included in income as a result of the failure of this Agreement
to meet the requirements of Code Section 409A, within ninety (90) days. Such
a
distribution shall affect and reduce the Executive’s benefits to be paid under
this Agreement.
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2.8
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Change
in Form or Timing of Distributions.
For distribution of benefits under this Article 2, the Executive
and the
Bank may, subject to the terms of Section 8.1, amend this Agreement
to
delay the timing or change the form of distributions. Any such
amendment:
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(a)
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may
not accelerate the time or schedule of any distribution, except as
provided in Code Section 409A;
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(b)
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must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.5,
delay the
commencement of distributions for a minimum of five (5) years from
the
date the first distribution was originally scheduled to be made;
and
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(c)
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must
take effect not less than twelve (12) months after the amendment
is
made.
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Article
3
Distribution
at Death
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3.1
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Death
During Active Service.
If the Executive dies prior to Separation from Service, the Bank
shall
distribute to the Beneficiary the benefit described in this Section
3.1.
This benefit shall be distributed in lieu of any benefit 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 Accrual Balance determined
as of
the end of the month preceding the executive’s death.
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3.1.2
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Distribution
of Benefit.
The Bank shall distribute the benefit to the Beneficiary in a lump
sum
within thirty (30) days following receipt by the Bank of the Executive’s
death certificate.
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3.2
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Death
During Distribution of a Benefit.
If the Executive dies after any benefit distributions have commenced
under
this Agreement but before receiving all such distributions, the Bank
shall
distribute to the Beneficiary the remaining benefits at the same
time and
in the same amounts they would have been distributed to the Executive
had
the Executive survived.
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3.3
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Death
After Separation from Service But Before Benefit Distributions
Commence.
If
the Executive is entitled to benefit distributions under this Agreement
but dies prior to the commencement of said benefit distributions,
the Bank
shall distribute to the
Beneficiary
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the
same
benefits to which the Executive was entitled prior to death, except that the
benefit distributions shall commence within thirty (30) days following receipt
by the Bank of the Executive’s death certificate.
Article
4
Beneficiaries
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4.1
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In
General.
The Executive shall have the right, at any time, to designate a
Beneficiary to receive any benefit distributions 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 designation
under any other plan of the Bank in which the Executive participates.
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4.2
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Designation.
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. If the Executive names someone other than
the
Executive’s spouse as a Beneficiary, the Plan Administrator may, in its
sole discretion, determine that spousal consent is required to be
provided
in a form designated by the Plan Administrator, executed by the
Executive’s spouse and returned to the Plan Administrator. The Executive’s
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 Administrator’s rules and procedures. 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
Executive’s death.
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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 Executive’s
spouse shall be the designated Beneficiary. If the Executive has
no
surviving spouse, any benefit shall be paid to the personal representative
of the Executive’s estate.
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4.5
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Facility
of Distribution.
If the Plan Administrator determines in its discretion that a benefit
is
to be distributed to a minor, to a person declared incompetent or
to a
person incapable of handling the disposition of that person’s property,
the Plan Administrator may direct distribution 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 distribution
of a
benefit
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shall
be
a distribution for the account of the Executive and the Beneficiary, as the
case
may be, and shall completely discharge any liability under this Agreement for
such distribution amount.
Article
5
General
Limitations
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5.1
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Termination
for Cause.
Notwithstanding any provision of this Agreement to the contrary,
the Bank
shall not distribute any benefit under this Agreement if the Executive’s
employment with the Bank is terminated due to a Termination for
Cause.
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5.2
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Suicide
or Misstatement.
No benefit shall be distributed if the Executive commits suicide
within
two years after the Effective Date of this Agreement, or if an insurance
company which issued a life insurance policy covering the Executive
and
owned by the Bank denies coverage (i) for material misstatements
of fact
made by the Executive on an application for such life insurance,
or (ii)
for any other reason.
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5.3
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Removal.
Notwithstanding any provision of this Agreement to the contrary,
the Bank
shall not distribute 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.
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5.4
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Forfeiture
Provision.
The Executive shall forfeit any non-distributed benefits under this
Agreement if the Executive breaches Section 6 of the Employment
Agreement.
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Article
6
Administration
of Agreement
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6.1
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Plan
Administrator Duties.
The Plan Administrator shall administer this Agreement according
to its
express terms and shall also have the discretion and authority to
(i)
make, amend, interpret and enforce all appropriate rules and regulations
for the administra-tion of this Agreement and (ii) decide or resolve
any
and all ques-tions, including interpretations of this Agreement,
as may
arise in connection with this Agreement to the extent the exercise
of such
discretion and authority does not conflict with Code Section
409A.
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6.2
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Agents.
In the administration of this Agreement, the Plan Administrator may
employ
agents and delegate to them such administrative duties as the Plan
Administrator 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.
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6.3
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Binding
Effect of Decisions.
Any decision or action of the Plan Administrator with respect to
any
question arising out of or in connection with the administration,
interpretation or application of this Agreement and the rules and
regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any
interest
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in
this
Agreement.
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6.4
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Indemnity
of Plan Administrator.
The Bank shall indemnify and hold harmless 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.
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6.5
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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 circum-stances of the death, Disability
or Separation from Service of the Executive, and such other pertinent
information as the Plan Administrator may reasonably
require.
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6.6
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Annual
Statement.
The Plan Administrator shall provide to the Executive, within one
hundred
twenty (120) days after the end of each Plan Year, a statement setting
forth the benefits to be distributed under this
Agreement.
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Article
7
Claims
And Review Procedures
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7.1
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Claims
Procedure.
An Executive or Beneficiary (“claimant”) who has not received benefits
under this Agreement that he or she believes should be distributed
shall
make a claim for such benefits as
follows:
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7.1.1
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Initiation
- Written Claim.
The claimant initiates a claim by submitting to the Plan Administrator
a
written claim for the benefits. If such a claim relates to the contents
of
a notice received by the claimant, the claim must be made within
sixty
(60) days after such notice was received by the claimant. All other
claims must be made within one hundred eighty (180) days of the date
on which the event that caused the claim to arise occurred. The claim
must
state with particularity the determination desired by the
claimant.
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7.1.2
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Timing
of Plan Administrator Response.
The
Plan Administrator shall respond to such claimant within ninety (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
ninety (90) days by notifying the claimant in writing, prior to the
end of
the initial ninety (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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7.1.3
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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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(a)
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The
specific reasons for the denial;
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(b)
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A
reference to the specific provisions of this Agreement on which the
denial
is based;
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(c)
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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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(d)
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An
explanation of this Agreement’s review procedures and the time limits
applicable to such procedures; and
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(e)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
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7.2
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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:
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7.2.1
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Initiation
- Written Request.
To initiate the review, the claimant, within sixty (60) days after
receiving the Plan Administrator’s notice of denial, must file with the
Plan Administrator a written request for
review.
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7.2.2
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Additional
Submissions - Information Access.
The claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Plan
Administrator shall also provide the claimant, upon request and free
of
charge, reasonable access to, and copies of, all documents, records
and
other information relevant (as defined in applicable ERISA regulations)
to
the claimant’s claim for benefits.
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7.2.3
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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.
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7.2.4
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Timing
of Plan Administrator Response.
The Plan Administrator shall respond in writing to such claimant
within
sixty (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 sixty (60) days by notifying the
claimant
in writing, prior to the end of the initial sixty (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.
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7.2.5
|
Notice
of Decision.
The Plan Administrator shall notify the claimant in writing of its
decision on review. The Plan Administrator shall write the notification
in
a manner calculated to be understood by the claimant. The notification
shall set forth:
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(a)
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The
specific reasons for the denial;
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(b)
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A
reference to the specific provisions of this Agreement on which the
denial
is based;
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(c)
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A
statement that the claimant is entitled to receive, upon request
and free
of charge, reasonable access to, and copies of, all documents, records
and
other information relevant (as defined in applicable ERISA regulations)
to
the claimant’s claim for benefits;
and
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(d)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
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Article
8
Amendments
and Termination
|
8.1
|
Amendments.
This Agreement may be amended only by a written agreement signed
by the
Bank and the Executive. However, the Bank may unilaterally amend
this
Agreement to conform with written directives to the Bank from its
auditors
or banking regulators or to comply with legislative changes or tax
law,
including without limitation Code Section
409A.
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8.2
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Plan
Termination Generally.
This Agreement may be terminated only by a written agreement signed
by the
Bank and the Executive. The benefit shall be the Accrual Balance
as of the
date this Agreement is terminated. Except as provided in Section
8.3, 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.
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8.3
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Plan
Terminations Under Code Section 409A.
Notwithstanding anything to the contrary in Section 8.2, if the Bank
terminates this Agreement in the following
circumstances:
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(a)
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Within
thirty (30) days before or twelve (12) months after a Change in
Control,
provided that all distributions are made no later than twelve (12)
months
following such termination of this Agreement and further provided
that
all the Bank’s arrangements which are substantially similar to
this Agreement are terminated so the Executive and all
participants in the similar arrangements are required to receive all
amounts of compensation deferred under the terminated arrangements
within
twelve (12) months of such termination;
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(b)
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Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under this Agreement are included in the Executive’s gross income in the latest of (i) the calendar year in which this Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical; or |
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(c)
|
Upon the Bank’s termination of this and all other non-account balance plans (as referenced in Code Section 409A), provided that all distributions are made no |
11
earlier
than twelve (12) months and no later than twenty-four (24) months following
such
termination, and the Bank does not adopt any new non-account balance plans
for a
minimum of five (5) years following the date of such termination;
the
Bank
may distribute the Accrual Balance, determined as of the date of the termination
of this Agreement, to the Executive in a lump sum subject to the above
terms.
Article
9
Miscellaneous
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9.1
|
Binding
Effect.
This Agreement shall bind the Executive and the Bank and their
beneficiaries, survivors, executors, administrators and
transferees.
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9.2
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No
Guarantee of Employment.
This Agreement is not a contract for employment. It does not give
the
Executive the right to remain as an employee of the Bank nor interfere
with the Bank’s right to discharge the Executive. It does not require the
Executive to remain an employee nor interfere with the Executive’s right
to terminate employment at any
time.
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9.3
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Non-Transferability.
Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any
manner.
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9.4
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Tax
Withholding and Reporting.
The Bank shall withhold any taxes that are required to be withheld,
including but not limited to taxes owed under Code Section 409A from
the
benefits provided under this Agreement. The Executive acknowledges
that
the Bank’s sole liability regarding taxes is to forward any amounts
withheld to the appropriate taxing authorities. The Bank shall satisfy
all
applicable reporting requirements, including those under Code Section
409A.
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9.5
|
Applicable
Law.
This Agreement and all rights hereunder shall be governed by the
laws of
the State of Indiana, except to the extent preempted by the laws
of the
United States of America.
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9.6
|
Unfunded
Arrangement.
The Executive and the Beneficiary are general unsecured creditors
of the
Bank for the distribution of benefits under this Agreement. The benefits
represent the mere promise by the Bank to distribute such benefits.
The
rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment
or
garnishment by creditors. Any insurance on the Executive’s life or other
informal funding asset is a general asset of the Bank to which the
Executive and Beneficiary have no preferred or secured
claim.
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9.7
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Reorganization.
The Bank shall not merge or consolidate into or with another bank,
or
reorganize, or sell substantially all of its assets to another bank,
firm
or person unless such succeeding or continuing bank, firm or person
agrees
to assume and discharge the obligations of the Bank under this Agreement.
Upon the occurrence of such an event,
the
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12
term
“Bank” as used in this Agreement shall be deemed to refer to the successor or
survivor entity.
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9.8
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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.
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9.9
|
Interpretation.
Wherever the fulfillment of the intent and purpose of this Agreement
requires and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the
plural.
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9.10
|
Alternative
Action.
In the event it shall become impossible for the Bank or the Plan
Administrator to perform any act required by this Agreement due to
regulatory or other constraints, the Bank or Plan Administrator may
perform such alternative act as most nearly carries out the intent
and
purpose of this Agreement and is in the best interests of the Bank,
provided that such alternative act does not violate Code Section
409A.
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9.11
|
Headings.
Article and section headings are for convenient reference only and
shall
not control or affect the meaning or construction of any provision
herein.
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9.12
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Validity.
If any provision of this Agreement shall be illegal or invalid for
any
reason, said illegality or invalidity shall not affect the remaining
parts
hereof, but this Agreement shall be construed and enforced as if
such
illegal or invalid provision had never been included
herein.
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9.13
|
Notice.
Any notice or filing required or permitted to be given to the Bank
or Plan
Administrator under this Agreement shall be sufficient if in writing
and
hand-delivered or sent by registered or certified mail to the address
below:
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Such
notice shall be deemed given as of the date of delivery or, if delivery is
made
by mail, as of the date shown on the postmark on the receipt for registration
or
certification.
Any
notice or filing required or permitted to be given to the Executive under this
Agreement shall be sufficient if in writing and hand-delivered or sent by mail
to the last known address of the Executive.
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9.14
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Deduction
Limitation on Benefit Payments.
If the Bank reasonably anticipates that the Bank’s deduction with respect
to any distribution under this Agreement would be limited or eliminated
by
application of Code Section 162(m), then to the extent deemed necessary
by
the Bank to ensure that the entire amount of any distribution from
this
Agreement is deductible, the Bank may delay payment of any amount
that
would otherwise be
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13
distributed
under this Agreement. The delayed amounts shall be distributed to the Executive
(or the Beneficiary in the event of the Executive’s death) at the earliest date
the Bank reasonably anticipates that the deduction of the payment of the amount
will not be limited or eliminated by application of Code Section
162(m).
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9.15
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Compliance
with Section 409A.
This Agreement shall be interpreted and administered consistent with
Code
Section 409A.
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IN
WITNESS WHEREOF, the Executive and a duly authorized representative of the
Bank
have signed this Agreement.
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EXECUTIVE
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RIVER
VALLEY FINANCIAL BANK
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By:
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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|||
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Title:
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14
River
Valley Financial Bank
Beneficiary
Designation Form
{ } New
Designation
{ } Change
in
Designation
I,
__________________________, designate the following as Beneficiary under this
Agreement:
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Primary:
___________________________________________________________
___________________________________________________________
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_____%
_____%
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Contingent:
___________________________________________________________
___________________________________________________________
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_____%
_____%
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Notes:
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·
|
Please
PRINT CLEARLY or TYPE the names of the
beneficiaries.
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·
|
To
name a trust as Beneficiary, please provide the name of the trustee(s)
and
the exact
name and date of the trust
agreement.
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·
|
To
name your estate as Beneficiary, please write “Estate of
[your
name]”.
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·
|
Be
aware that none of the contingent beneficiaries will receive anything
unless ALL of the primary beneficiaries predecease
you.
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I
understand that I may change these beneficiary designations by delivering a
new
written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death.
I
further understand that the designations will be automatically revoked if the
Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and
our
marriage is subsequently dissolved.
Name: _______________________________
Signature: _______________________________ Date: _______
Received
by the Plan Administrator
this ________ day of ___________________, 200____
By: _________________________________
Title: _________________________________