DIRECTORS RETIREMENT PLAN
This Directors Retirement Plan (the "Plan"), effective as of the 20th day
of February, 1997, formalizes the understanding by and between PRESTIGE STATE
BANK (the "Bank"), a commercial bank, and its non-employee directors,
hereinafter referred to as " Director(s)", who shall be eligible to participate
in this Plan by execution of a Directors Retirement Plan Joinder Agreement
("Joinder Agreement") in a form provided by the Bank. PRESTIGE FINANCIAL CORP.
(the "Holding Company") is a party to this Plan for the sole purpose of
guaranteeing the Bank's performance hereunder.
WITNESSETH:
WHEREAS, the Directors serve the Bank as members of the Board of Directors;
and
WHEREAS, the Bank desires to honor, reward and recognize the Directors who
have provided long and faithful service to the Bank and to ensure the continued
service on the Board by such Directors until retirement age; and
WHEREAS, the Directors wish to be assured that they will be entitled to a
certain amount of additional compensation for some definite period of time from
and after retirement from active service with the Bank or other termination of
service and wish to provide their beneficiaries with benefits from and after
death; and
WHEREAS, the Bank and the Directors wish to provide the terms and
conditions upon which the Bank shall pay such additional compensation to the
Directors after retirement or other termination of service and/or death benefits
to their beneficiaries after death; and
2
WHEREAS, the Bank and the Directors intend this Plan to be considered an
unfunded arrangement, maintained primarily to provide supplemental retirement
income for such Directors; and
WHEREAS, the Bank has adopted this Directors Retirement Plan which controls
all issues relating to Retirement Benefits as described herein;
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the Bank and the Directors agree as follows:
SECTION I
DEFINITIONS
When used herein, the following words and phrases shall have the meanings
below unless the context clearly indicates otherwise:
1.1 "Accrued Benefit" means that portion of the Retirement Benefit which is
required to be expensed and accrued under generally accepted accounting
principles (GAAP) by any appropriate method which the Bank's Board of
Directors may require in the exercise of its sole discretion.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
1.3 "Bank" means PRESTIGE STATE BANK and any successor thereto.
1.4 "Beneficiary" means the person or persons (and their heirs) designated as
Beneficiary in the Director's Joinder Agreement to whom the deceased
Director's benefits are payable. If no Beneficiary is so designated, then
the Director's Spouse, if living, will be deemed the
3
Beneficiary. If the Director's Spouse is not living, then the Children of the
Director will be deemed the Beneficiaries and will take on a per stirpes basis.
If there are no living Children, then the Estate of the Director will be deemed
the Beneficiary.
1.5 "Benefit Age" shall be the birthday on which the Director becomes eligible
to receive the Level 2 Retirement Benefit under the Plan. Such birthday
shall be designated in the Director's Joinder Agreement.
1.6 "Benefit Eligibility Date" shall be the date on which a Director is
entitled to receive either his Level 1 Retirement Benefit or Level 2
Retirement Benefit. A Director's "Initial Benefit Eligibility Date" shall
occur on the 1st day of the month following the month in which the Director
has completed ten (10) Years of Service with the Bank. A Director who
reaches his Initial Benefit Eligibility Date shall be eligible to receive
his level 1 Retirement Benefit. A Director's "Level 2 Benefit Eligibility
Date" shall be the 1st day of the month following the month in which the
Director attains the Benefit Age designated in his Joinder Agreement. A
Director who attains his Benefit Age shall be entitled to the Level 2
Retirement Benefit.
1.7 "Cause" means personal dishonesty, willful misconduct, willful malfeasance,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, regulation
(other than traffic violations or similar offenses), or final
cease-and-desist order, material breach of any provision of this Plan, or
gross negligence in matters of material importance to the Bank.
1.8 "Change in Control" of the Bank or the Holding Company shall mean:
(1) a Change in Control of a nature that would be required to be reported
in response to Item l(a) of the current report on Form 8-K, as in
effect on the date hereof,
4
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act"); or
(2) a Change in Control shall occur at such time as
(i) any "person" (as the term is used in Sections 13(d) and 14(d) of
the Exchange Act) who is not now presently but becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Holding
Company representing Thirty Percent (30%) or more of the Holding
Company's outstanding securities except for any securities
purchased by any tax-qualified employee benefit plan of the
Holding Company or the Bank; or
(ii) individuals who constitute the Board of Directors on the
effective date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that
any person becoming a Director subsequent to the date hereof
whose election was approved by a vote of at least three-quarters
of the Directors comprising the Incumbent Board, or whose
nomination for election by the Holding Company's shareholders was
approved by the Holding Company's Incumbent Board, shall be, for
purposes of this clause (ii), considered as though he were a
member of the Incumbent Board; or
(iii)a plan of reorganization, merger, consolidation, or sale of all
or substantially all of the assets of the Bank or the Holding
Company occurs in which the Bank or the Holding Company is not
the resulting entity; or
(iv) a proxy statement is issued soliciting proxies from the
stockholders of the Holding Company by someone other than the
current management of the Holding Company, seeking stockholder
approval of a plan of reorganization, merger, or consolidation of
the Holding Company or similar transaction with one or more
corporations as a result of which the outstanding shares of the
class of the Holding Company's securities then
5
subject to the plan or transaction are exchanged for or converted
into cash or property or securities not issued by the Holding
Company; or
(v) a tender offer is made for Thirty Percent (30%) or more of the
voting securities of the Company.
1.9 "Children" means the Director's children, or the issue of any deceased
Children, then living at the time payments are due the Children under this
Plan. The term "Children" shall include both natural and adopted Children.
1.10 "Disability Benefit" means the monthly benefit payable to the Director
following a determination, in accordance with Subsection 3.6, that he is no
longer able, properly and satisfactorily, to perform his duties as
Director.
1.11 "Effective Date" of this Plan shall be February 20, 1997.
1.12 "Estate" means the estate of the Director.
1.13 "Holding Company" means Prestige Financial Corporation.
1.14 "Interest Factor" means monthly compounding or discounting, as applicable,
at six (6%) percent per annum.
1.15 "Payout Period" means the time frame during which certain benefits payable
hereunder shall be distributed. The Payout Period may differ depending on
whether the Director is entitled to Level 1 Retirement Benefits or Level 2
Retirement Benefits. The Payout Period for Level 1 Retirement Benefits
("Level 1 Payout Period") shall be, at the election of the Directors,
either (i) One Hundred Twenty (120) consecutive months or (ii) One Hundred
Eighty (180) consecutive months, with payments under the Level 1 Payout
Period being made in equal monthly installments commencing within thirty
(30) days following the
6
occurrence of the event which triggers distribution. Payments under the "Level 2
Payout Period" shall be made in equal monthly installments commencing within
thirty (30) days following the occurrence of the event which triggers
distribution and continuing for the longer of (i) One Hundred Eighty (180)
consecutive months; or (ii) the Director's lifetime; provided, however, in the
event of termination following a Change in Control, the Level 2 Payout Period
shall be One Hundred Eighty (180) consecutive months. For purposes of the
Survivor's Benefit payable hereunder, the Payout Period shall be One Hundred
Eighty (180) consecutive months.
1.16 "Plan Year" shall mean the calendar year. However, "Plan Year" shall mean
February 20, 1997 through December 3l, 1997 for the first Plan Year.
1.17 "Spouse" means the individual to whom the Director is legally married at
the time of the Director's death,
1.18 "Retirement Benefit" means an annual amount payable to the Director
pursuant to the Plan. Depending on a Director's age and length of service,
a Director may be eligible for either a "Level 1 Retirement Benefit" or a
"Level 2 Retirement Benefit." The Level 1 Retirement Benefit and Level 2
Retirement Benefit to which a Director will become entitled upon the
satisfaction of the applicable conditions shall be set forth on the
Director's Joinder Agreement.
1.19 "Survivor's Benefit" means an annual amount payable to the Beneficiary in
monthly installments throughout the Payout Period, equal to the Level 2
Retirement Benefit and subject to Subsection 3.2.
1.20 "Year of Service" shall be earned upon completing twelve (12) months of
continuous service (including authorized leaves of absence) with the Bank.
However, one "Year of Service" shall be earned upon completing ten (10)
months of continuous service during the first Plan Year. Years of Service
shall be computed from the first day of service of a Director with the
Bank.
7
SECTION II
ESTABLISHMENT OF RABBI TRUST
The Bank intends to establish a rabbi trust into which the Bank intends to
contribute assets which shall be held therein, subject to the claims of the
Bank's creditors in the event of the Bank's "Insolvency" as defined in the plan
which establishes such rabbi trust, until the contributed assets are paid to the
Directors and their Beneficiaries in such manner and at such times as specified
in this Plan. It is the intention of the Bank to make contributions to the rabbi
trust to provide the Bank with a source of funds to assist it in meeting the
liabilities of this Plan. The rabbi trust and any assets held therein shall
conform to the terms of the rabbi trust agreement which has been established in
conjunction with this Plan. To the extent the language in this Plan is modified
by the language in the rabbi trust agreement, the rabbi trust agreement shall
supersede this Plan. Any contributions to the rabbi trust shall be made during
each Plan Year in accordance with the rabbi trust agreement. The amount of such
contribution(s) shall be equal to the full present value of all accruals under
the Plan, if any, less: (i) previous contributions made on behalf of the
Director to the rabbi trust, and (ii) earnings to date on all such previous
contributions.
SECTION III
BENEFITS
3.1 Retirement Benefit.
(a) If the Director remains in the service of the Bank until reaching his
Initial Benefit Eligibility Date, the Director shall be entitled to
the Level 1 Retirement Benefit. If the Director retires after
attainment of his Initial Benefit Eligibility Date but before
attainment of his Benefit Age, the Director shall be entitled to the
annuitized value (using the Interest Factor) of his Accrued Benefit
(which shall be at least as great as his Level 1 Retirement Benefit,
and for these purposes, shall be his Retirement Benefit), calculated
as of the date of his termination of service. Such Retirement Benefit
shall commence on the 1st day of the month following the Director's
actual retirement or other termination of service on the Board, other
than
8
a termination of service due to the Director's death, and shall be
payable in monthly installments throughout the Level 1 Payout Period.
In the event a Director dies after commencement of the Level 1
Retirement Benefit payments but before completion of all such payments
due and owing hereunder, the Bank shall pay to the Director's
Beneficiary a continuation of the monthly installments for the
remainder of the Level 1 Payout Period.
(b) If the Director is in service with the Bank until reaching his Benefit
Age, the Director shall be entitled to the Level 2 Retirement Benefit.
Such benefit shall commence on the 1st day of the month following the
Director's actual retirement or other termination of service on the
Board and shall be payable in monthly installments throughout the
Level 2 Payout Period. In the event the Director dies at any time
after attaining his Benefit Age, but prior to completion of all Level
2 Retirement Benefit payments due and owing hereunder, the Bank shall
pay to the Director's Beneficiary a continuation of the monthly
installments for the remainder of the Level 2 Payout Period.
3.2 Death Prior to Benefit Age. If the Director dies prior to attaining his
Benefit Age but while employed at the Bank, the Director's Beneficiary
shall be entitled to the Survivor's Benefit. The Survivor's Benefit shall
commence within thirty (30) days of the Director's death and shall be
payable in monthly installments throughout the Payout Period.
3.3 Voluntary or Involuntary Termination Other Than for Cause.
(a) If the Director's service with the Bank is voluntarily or
involuntarily terminated prior to the attainment of his Initial
Benefit Eligibility Date, for any reason other than for Cause, the
Director's death, disability, or following a Change in Control (as
defined), the Director (or his Beneficiary) shall be entitled to the
annuitized value (using the Interest Factor) of his Accrued Benefit
calculated as of the date of his termination of service. Such benefit
shall commence on the Director's Initial
9
Benefit Eligibility Date (determined as if the Director had remained
in the continuous service of the Bank from the date of his initial
service hereunder until the completion of ten Years of Service) and
shall be payable in monthly installments throughout the Level 1 Payout
Period. In the event the Director dies at any time after attaining his
Initial Benefit Eligibility Date, but prior to completion of all such
payments due an owing hereunder, the Bank shall pay to the Director's
Beneficiary a continuation of the monthly installments for the
remainder of the Level 1 Payout Period.
(b) If the Director's service with the Bank is voluntarily or
involuntarily terminated after attainment of the Director's Initial
Benefit Eligibility Date but prior to his Benefit Age, for any reason
other than for Cause, the Director's death, disability, or following a
Change in Control, the Director (or his Beneficiary) shall be entitled
to the annuitized value (using the Interest Factor) of his Accrued
Benefit (which shall be at least as great as his Level 1 Retirement
Benefit), calculated as of the date of his termination of service.
Such benefit shall commence on the 1st day of the month following the
month in which occurs the Director's termination of service and shall
be payable in monthly installments throughout the Level 1 Payout
Period. In the event the Director dies at any time after commencement
of such payments but prior to completion of all such payments due and
owing hereunder, the Bank shall pay to the Director's Beneficiary a
continuation of the monthly installments for the remainder of the
Level 1 Payout Period.
(c) If the Director dies after his voluntary or involuntary termination of
service occurring prior to his Initial Benefit Eligibility Date, and
prior to the commencement of benefits hereunder, the Director's
Beneficiary shall be entitled to the annuitized value (using the
Interest Factor) of his Accrued Benefit. The payment of such benefit
shall commence within thirty (30) days of the Director's
10
death. The benefit shall be payable in monthly installments over the
Level 1 Payout Period.
(d) If the Director dies after his voluntary or involuntary termination of
service occurring after his Initial Benefit Eligibility Date but prior
to his Benefit Age, and prior to commencement of benefits hereunder,
the Director's beneficiary shall be entitled to the annuitized value
(using the Interest Factor) of his Accrued Benefit (which shall be at
least as great as his Level 1 Retirement Benefit). The payment of such
benefit shall commence within thirty (30) days of the Director's
death. The benefits shall be payable in monthly installments over the
Level 1 Payout Period.
3.4 Termination of Service Related to a Change in Control.
(a) If a Change in Control occurs at the Bank, and thereafter the
Director's service is terminated (either voluntarily or
involuntarily), the Director shall be entitled to his Level 2
Retirement Benefit (as if he had remained in the service of the Bank
until his Benefit Age). Such benefit shall commence on the 1st day of
the month following his termination of service and shall be payable in
monthly installments throughout the Level 2 Payout Period. In the
event that the Director dies at any time after commencement of the
payments, but prior to completion of all such payments due and owing
hereunder, the Bank, or its successor, shall pay to the Director's
Beneficiary a continuation of the monthly installments for the
remainder of the Level 2 Payout Period.
(b) If, after such termination, the Director dies prior to commencement of
the benefits hereunder, the Director's Beneficiary shall be entitled
to the Survivor's Benefit which shall commence within thirty (30) days
of the Director's death. The Survivor's Benefit shall be payable in
monthly installments over the Level 2 Payout Period.
11
3.5 Termination for Cause. If the Director is terminated for Cause, all
benefits under this Plan shall be forfeited and this Plan shall become null
and void as to the Director.
3.6 Disability Benefit.
(a) Notwithstanding any other provision hereof, if requested by the
Director and approved by the Board of Directors, the Director who has
not attained his Initial Benefit Eligibility Date shall be entitled to
receive the Disability Benefit hereunder, in any case in which it is
determined by a duly licensed physician selected by the Bank, that the
Director is no longer able, properly and satisfactorily, to perform
his regular duties as a Director, because of ill health, accident,
disability or general inability due to age. If the Director's service
is terminated pursuant to this paragraph and Board of Director
approval is obtained, the Director may elect to begin receiving the
Disability Benefit in lieu of any benefit available under Section 3.3,
which is not available prior to the Director's Initial Benefit
Eligibility Date. The Disability Benefit shall equal the Director's
Accrued Benefit, annuitized (using the Interest Factor) over the Level
1 Payout Period. The Disability Benefit shall be payable in monthly
installments over the Level 1 Payout Period commencing within thirty
(30) days following the later of (i) the above mentioned disability
determination and (ii) the approval of the Disability Benefit by the
Board of Directors. In the event the Director dies while receiving
payments pursuant to this Subsection, but prior to the completion of
all payments due and owing hereunder, the Bank shall pay to the
Director's Beneficiary a continuation of the monthly installments for
the remainder of the Payout Period.
(b) If the Director dies after approval of the Disability Benefit by the
Board of Directors but before the commencement of such payments, the
Director's Beneficiary shall be entitled to the Director's Accrued
Benefit annuitized (using the Interest Factor) over the Level 1 Payout
Period. Such benefit shall be payable to
12
the Beneficiary in monthly installments over the Level 1 Payout Period
commencing within thirty (30) days of the Director's death.
3.7 Non-Competition During and After Service on the Board.
(a) In consideration of the agreements of the Bank contained herein and of
the payments to be made by the Bank pursuant hereto, the Director
hereby agrees that, so long as he remains in the service of the Bank,
he will not actively engage, either directly or indirectly, in any
business or other activity which is or may be deemed to be in any way
competitive with or adverse to the best interests of the business of
the Bank unless the Directors participation therein has been consented
to, in writing, by the Board of Directors.
(b) The Director expressly agrees that, as consideration for the covenants
of the Bank contained herein and as a condition to the performance by
the Bank of its obligations hereunder, from and after any voluntary or
involuntary termination of service, other than a termination of
service pursuant to Subsection 3.4, and continuing throughout the
entire Payout Period, as provided herein, he will not, without the
prior written consent of the Bank, become associated with, in the
capacity of an employee, director, officer, principal, agent, trustee
or in any other capacity whatsoever, any enterprise conducted in the
trading area of the business of the Bank which enterprise is, or may
be deemed to be, competitive with any business carried on by the Bank
as of the date of the termination of the Director's service or his
retirement.
(c) In the event of a termination of the Director's service related to a
Change in Control pursuant to Subsection 3.4, paragraph (b) of this
Subsection 3.7 shall cease to be a condition to the performance by the
Bank of its obligations under this Plan.
13
3.8 Breach. In the event of any breach by the Director of the agreements and
covenants contained herein, the Board of Directors of the Bank shall direct
that any unpaid balance of any payments to the Director under this Plan be
suspended, and shall thereupon notify the Director of such suspensions, in
writing. Thereupon, if the Board of Directors of the Bank shall determine
that said breach by the Director has continued for a period of one (1)
month following notification of such suspension, all rights of the Director
and his Beneficiaries under this Plan, including rights to further payments
hereunder, shall thereupon terminate.
3.9 Additional Death Benefit - Burial Expense. In addition to the
above-described death benefits, upon the Director's death, the
Director's Beneficiary shall be entitled to receive a one-time lump sum
death benefit in the amount of Ten Thousand ($10,000.00) Dollars. This
benefit shall be provided specifically for the purpose of providing
payment for burial and/or funeral expenses of the Director. Such death
benefit shall be payable within thirty (30) days of the Director's
death. The Director's Beneficiary shall not be entitled to such benefit
if the Director is terminated for Cause prior to death.
SECTION IV
BENEFICIARY DESIGNATION
The Director shall make an initial designation of primary and secondary
Beneficiaries upon execution of his Joinder Agreement and shall have the right
to change such designation, at any subsequent time, by submitting to the
Administrator in substantially the form attached as Exhibit A to the Joinder
Agreement, a written designation of primary and secondary Beneficiaries. Any
Beneficiary designation made subsequent to execution of the Joinder Agreement
shall become effective only when receipt thereof is acknowledged in writing by
the Administrator.
14
SECTION V
DIRECTOR'S RIGHT TO ASSETS
The rights of the Director, any Beneficiary, or any other person claiming
through the Director under this Plan, shall be solely those of an unsecured
general creditor of the Bank. The Director, the Beneficiary, or any other person
claiming through the Director, shall only have the right to receive from the
Bank those payments so specified under this Plan. The Director agrees that he,
his Beneficiary, or any other person claiming through him shall have no rights
or interests whatsoever in any asset of the Bank, including any insurance
policies or contracts which the Bank may possess or obtain to informally fund
this Plan. Any asset used or acquired by the Bank in connection with the
liabilities it has assumed under this Plan, unless expressly provided herein,
shall not be deemed to be held under any trust for the benefit of the Director
or his Beneficiaries, nor shall any asset be considered security for the
performance of the obligations of the Bank. Any such asset shall be and remain,
a general, unpledged, and unrestricted asset of the Bank.
SECTION VI
RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust any fund
or money with which to pay its obligations under this Plan. The Director, his
Beneficiaries or any successor in interest to him shall be and remain simply a
general unsecured creditor of the Bank in the same manner as any other creditor
having a general claim for matured and unpaid compensation. The Bank reserves
the absolute right in its sole discretion to either purchase assets to meet its
obligations undertaken by this Plan or to refrain from the same and to determine
the extent, nature, and method of such asset purchases. Should the Bank decide
to purchase assets such as life insurance, mutual funds, disability policies or
annuities, the Bank reserves the absolute right, in its sole discretion, to
terminate such assets at any time, in whole or in part. At no time shall the
Director be deemed to have any lien, right, title or interest in or to any
specific investment or to any assets of the Bank. If the Bank elects to invest
in a life insurance, disability or annuity policy
15
upon the life of the Director, then the Director shall assist the Bank by freely
submitting to a physical examination and by supplying such additional
information necessary to obtain such insurance or annuities.
SECTION VII
ALIENABILITY AND ASSIGNMENT PROHIBITION
Neither the Director nor any Beneficiary under this Plan shall have any
power or right to transfer, assign, anticipate, hypothecate, mortgage, commute,
modify or otherwise encumber in advance any of the benefits payable hereunder,
nor shall any of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the Director or his
Beneficiary, nor be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Director or any Beneficiary attempts
assignment, communication, hypothecation, transfer or disposal of the benefits
hereunder, the Bank's liabilities shall forthwith cease and terminate.
SECTION VIII
ACT PROVISIONS
8.1 Named Fiduciary and Administrator. The Bank shall be the Named Fiduciary
and Administrator (the "Administrator") of this Plan. As Administrator, the
Bank shall be responsible for the management, control and administration of
the Plan as established herein. The Administrator may delegate to others
certain aspects of the management and operational responsibilities of the
Plan, including the employment of advisors and the delegation of
ministerial duties to qualified individuals.
8.2 Claims Procedure and Arbitration. In the event that benefits under this
Plan are not paid to the Director (or to his Beneficiary in the case of the
Director's death) and such claimants feel they are entitled to receive such
benefits, then a written claim must be made to the
16
Administrator within sixty (60) days from the date payments are refused. The
Bank and its Board of Directors shall review the written claim and, if the claim
is denied, in whole or in part, they shall provide in writing, within ninety
(90) days of receipt of such claim, their specific reasons for such denial,
reference to the provisions of this Plan or the Joinder Agreement upon which the
denial is based, and any additional material or information necessary to perfect
the claim. Such writing by the Bank and its Board of Directors shall further
indicate the additional steps which must be undertaken by claimants if an
additional review of the claim denial is desired.
If claimants desire a second review, they shall notify the Administrator in
writing within sixty (60) days of the first claim denial. Claimants may review
this Plan, the Joinder Agreement or any documents relating thereto and submit
any issues and comments, in writing, they may feel appropriate. In its sole
discretion, the Administrator shall then review the second claim and provide a
written decision within sixty (60) days of receipt of such claim. This decision
shall state the specific reasons for the decision and shall include reference to
specific provisions of this Plan or the Joinder Agreement upon which the
decision is based.
If claimants continue to dispute the benefit denial based upon completed
performance of this Plan and the Joinder Agreement or the meaning and effect of
the terms and conditions thereof, then claimants may submit the dispute to
mediation, administered by the American Arbitration Association ("AAA") (or a
mediator selected by the parties) in accordance with the AAA's Commercial
Mediation Rules. If mediation is not successful in resolving the dispute, it
shall be settled by arbitration administered by the AAA under its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof.
17
SECTION IX
MISCELLANEOUS
9.1 No Effect on Director's Rights. Nothing contained herein will confer upon
the Director the right to be retained in the service of the Bank nor limit
the right of the Bank to deal with the Director without regard to the
existence of the Plan.
9.2 State Law. The Plan is established under, and will be construed according
to, the laws of the State of New Jersey, to the extent such laws are not
preempted by the Act and valid regulations published thereunder.
9.3 Severability. In the event that any of the provisions of this Plan or
portion thereof, are held to be inoperative or invalid by any court of
competent jurisdiction, then: (1) insofar as is reasonable, effect will be
given to the intent manifested in the provisions held invalid or
inoperative, and (2) the validity and enforceability of the remaining
provisions will not be affected thereby.
9.4 Incapacity of Recipient. In the event the Director is declared incompetent
and a conservator or other person legally charged with the care of his
person or Estate is appointed, any benefits under the Plan to which such
Director is entitled shall be paid to such conservator or other person
legally charged with the care of his person or Estate.
9.5 Unclaimed Benefit. The Director shall keep the Bank informed of his current
address and the current address of his Beneficiaries. The Bank shall not be
obligated to search for the whereabouts of any person. If the location of
the Director is not made known to the Bank as of the date upon which any
payment of any benefits may first be made, the Bank shall delay payment of
the Director's benefit payment(s) until the location of the Director is
made known to the Bank; however, the Bank shall only be obligated to hold
such benefit payment(s) for the Director until the expiration of thirty-six
(36) months. Upon expiration
18
of the thirty-six (36) month period, the Bank may discharge its obligation
by payment to the Director's Beneficiary. If the location of the Director's
Beneficiary is not made known to the Bank by the end of an additional two
(2) month period following expiration of the thirty-six (36) month period,
the Bank may discharge its obligation by payment to the Director's Estate.
If there is no Estate in existence at such time or if such fact cannot be
determined by the Bank, the Director and his Beneficiary(ies) shall
thereupon forfeit any rights to the balance, if any, of any benefits
provided for such Director and/or Beneficiary under this Plan.
9.6 Limitations on Liability. Notwithstanding any of the preceding provisions
of the Plan, no individual acting as an employee or agent of the Bank, or
as a member of the Board of Directors shall be personally liable to the
Director or any other person for any claim, loss, liability or expense
incurred in connection with the Plan.
9.7 Gender. Whenever in this Plan words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine or
neuter gender, whenever they should so apply.
9.8 Effect on Other Corporate Benefit Plans. Nothing contained in this Plan
shall affect the right of the Director to participate in or be covered by
any other corporate benefit available to Directors of the Bank constituting
a part of the Bank's existing or future compensation structure.
9.9 Suicide. Notwithstanding anything to the contrary in this Plan, the
benefits otherwise provided herein shall not be payable and this Plan shall
become null and void with respect to the Director if the Director's death
results from suicide, whether sane or insane, within twenty-four (24)
months after the execution of his Joinder Agreement.
19
9.10 Inurement. This Plan shall be binding upon and shall inure to the benefit
of the Bank, its successors and assigns, and the Director, his successors,
heirs, executors, a administrators, and Beneficiaries.
9.11 Headings. Headings and sub-headings in this Plan are inserted for reference
and convenience only and shall not be deemed a part of this Plan.
SECTION X
AMENDMENT/REVOCATION
This Plan shall not be amended, modified or revoked at any time, in whole
or part, as to any Director, without the mutual written consent of the Director
and the Bank, and such mutual consent shall be required even if the Director is
no longer employed by the Bank.
SECTION XI
EXECUTION
11.1 This Plan sets forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby, and any previous
agreements or understandings between the parties hereto regarding the
subject matter hereof are merged into and superseded by this Plan.
11.2 This Plan shall be executed in triplicate, each copy of which, when so
executed and delivered, shall be an original, but all three copies shall
together constitute one and the same instrument.
20