Deferred Compensation Agreement Between Lafayette Savings Bank, FSB And Randolph F. Williams
Exhibit
10.1
Deferred
Compensation
Agreement
Between
Lafayette
Savings Bank, FSB
And
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THIS
AGREEMENT, executed and delivered on the date set forth immediately following
Article V hereof, by and between Lafayette Savings Bank, FSB (the “Bank”) and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the “Employee”),
W
I T N E
S S E T H:
WHEREAS,
the Employee is now serving as President and Chief Executive Officer of the
Bank; and
WHEREAS,
the Bank desires to have the benefit of the Employee’s continued loyalty,
service and leadership until his retirement; and
WHEREAS,
the Bank desires to provide the Employee with the supplemental retirement
benefit, to be paid upon his retirement in order to induce the Employee to
remain with the Bank and to devote his highest skill and energy to the discharge
of his employment duties; and
WHEREAS,
the parties desire to incorporate their entire agreement in this
writing;
NOW,
THEREFORE, in consideration of the premises, the mutual covenants herein
contained and in further consideration of each act done pursuant hereto by
either of the parties, the parties enter into the following Articles of
Agreement:
ARTICLE
I
DEFINITIONS
Section
1.01 Account.
The
term
“Account” means the account maintained for the Employee under this Agreement,
which is credited in each calendar year with amounts determined pursuant to
Article II of this Agreement.
Section
1.02 Administrator.
The
term
“Administrator” means the Board, which shall have the sole authority to manage
and control the operation and administration of this Agreement.
Section
1.03 Bank.
The
term
“Bank” means Lafayette Savings Bank, FSB.
Section
1.04 Board.
The
term
“Board” means the Board of Directors of the Bank. Whenever the provisions of
this Agreement require action by the Board, it may be taken by the Compensation
Committee of the Board with the same force and effect as though taken by the
entire Board.
Section
1.05 Change
in Control. The
term
“Change in Control” shall mean 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 shall be prescribed by regulations adopted by the Internal Revenue
Service under Section 409A(a)(2)(v) of the Code.
Section
1.06 Code.
The
term
Code means the Internal Revenue Code of 1986, as amended.
Section
1.07 Compensation.
The
term
“compensation” shall include Employee’s base salary and bonus paid by the
Bank.
Section
1.08 Effective
Date. The
term
“Effective Date” means October 1, 2005.
Section
1.09 Employee.
The
term
“Employee” means ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
Section
1.10 Plan
Year. The
Term
“Plan Year” means the consecutive twelve (12) month period beginning each
January 1 and ending on the following December 31.
Section
1.11 Retirement
Date.
The
date
Employee retires from employment at the Bank after attaining age sixty-five
(65).
Section
1.12 Termination
of Employment. The
term
“Termination of Employment” means the date on which the Employee, prior to the
attainment of his Retirement Date, retires, resigns or otherwise, voluntarily
or
involuntarily, terminates his full-time employment with the Bank. The Employee
shall be deemed to have terminated his full-time employment with the Bank if
he
incurs a Total Disability. With respect to any benefit payable as a result
of
Termination of Employment, Termination of Employment shall be determined by
reference to the Bank and all members of any controlled group (determined under
Section 414(b) of the Internal Revenue Code of 1986, as amended (the “Code”)) or
trades or businesses under common control (determined under Section 414(c)
of
the Code) that includes the Bank.
Section
1.13 Total
Disability. The
term
“Total Disability” means any medically determinable physical or mental
impairment which can be expected to result in death or to last for a continuous
period of not less than 12 months and which (1) renders the Employee unable
to
engage in any substantial gainful activity or (2) entitles Employee to income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank.
ARTICLE
II
THE ALLOCATION
Section
2.01 Allocations
to
the
Employee’s Account. On
the
Effective Date and on the last business day of the month thereafter occurring
on
or before the first to occur of (1) the Employee’s attainment of his Retirement
Date, (2) his death or (3) his Termination of Employment, the Employer shall
credit to the Employee’s Account 10% of the amount of Employee’s compensation,
or such other percentage of Employee’s compensation not to exceed 20% as he
shall elect to have withheld from his compensation from time to time; provided,
however, excepting any initial election, a change in the amount elected by
the
Employee shall become effective no earlier than the first day of the calendar
year following the Employee’s change of election. Amounts elected to be deferred
by the Employee shall be withheld from the Employee’s compensation for the pay
periods for which such compensation is paid. Each allocation under this Section
2.01 shall be deemed to have been made for purposes of computing interest under
Section 2.03 of this Agreement as of the required allocation date.
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Section
2.02 Amount
of Employer Allocations. As
of the
Effective Date, the Employer shall allocate additional amounts to the Employee’s
Account at the end of each quarter (beginning with the quarter ending December
31, 2005) as matching contributions based on the amount of salary the Employee
has elected to defer and have withheld under Section 2.01 during that quarter,
as follows:
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Date |
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Amount |
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December 31, 2005 |
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Twenty cents ($.20) for each one dollar ($1.00) of salary deferred by the Employee, subject to a maximum of 4% of Employee’s salary for those periods. |
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As of the last day of each quarter thereafter during the term of this Agreement |
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Such amounts as Employer shall determine for a calendar year which shall be approved by the Board before the end of the preceding calendar year |
Section
2.03 Allocation
of Interest. As
of the
end of each Plan Year, and as of the date of termination of this Agreement
or
payment in full of the benefits provided for hereunder, Bank shall credit the
Employee’s Account, with interest, compounded annually, on the undistributed
balance then held in his Account. The annual rate of interest for each Plan
Year
shall be equal to the highest certificate of deposit rates offered by the Bank
during the year preceding the year in which the interest is to be allocated.
Interest with respect to any allocations made during a Plan Year shall accrue
from the date of allocation.
Section
2.04 Optional
Account Investments. In
lieu
of the interest credits described in Section 2.03, the Administrator, in its
complete and sole discretion, may elect to invest the amounts credited to the
Employee’s Account in specific investments in the name of the Employer. To the
extent the Administrator makes such investments, the actual amounts credited
to
the Employee’s Account shall reflect the actual investment results for such
investments rather than the deemed interest described in Section 2.03, and
the
Bank will not be obligated to pay Employee any difference between the deemed
interest rate in Section 2.03 and those investment results. In making these
investment decisions, the Administrator may, but is not required to, seek
recommendations from the Employee as to the manner in which the Employee’s
Account should be invested.
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Section
2.05 Termination
of this Agreement. Either
Employee or the Bank may terminate this agreement with respect to any calendar
year by providing written notice to the other party hereto on or before December
1st of the preceding calendar year.
ARTICLE
III
BENEFITS
Section
3.01 Death
Benefits. Upon
the
death of the Employee prior to the attainment of his Retirement Date or prior
to
his Termination of Employment, his beneficiary, if living, or his contingent
beneficiaries, if not, as determined pursuant to Section 4.03 of this Agreement,
shall receive in a single lump sum cash payment the balance held in the deceased
Employee’s Account on the date of Employee’s death. In the absence of any such
designation or if the designated or contingent beneficiary is not living at
the
death of the Employee, the Account balance shall be paid in a lump sum to the
Employee’s spouse, if any, or, if none, to his estate. The lump sum payment
shall be paid within sixty (60) calendar days after the Employee’s
death.
Section
3.02 Retirement,
Prior
Termination of Employment, or Change in Control. Upon
the
Employee’s retirement after he attains his Retirement Date or upon his earlier
Termination of Employment or at the Bank’s direction upon a Change in Control,
he shall receive a cash payment of the balance in his Account at the time of
his
retirement or his earlier Termination of Employment, or an earlier Change in
Control. The Account balance shall be paid in substantially equal monthly
installments over a term of five (5) years commencing no later than sixty (60)
calendar days after he retires after attaining his Retirement Date or after
his
earlier Termination of Employment, or after an earlier Change in Control;
provided, however, that if Employee is a “key employee” (within the meaning of
Section 416(i) of the Code without regard to paragraph (5) thereof) of a
corporation whose stock is publicly traded on an established securities market
or otherwise, within the meaning of Section 409A(a)(2)(B)(i) of the Code, such
payments may not commence any earlier than the earlier of a date which is six
months after the Employee’s separation from service or the date of Employee’s
death.
Section
3.03 Death
After Payments
Commence. If
Employee dies prior to receiving any or all of the monthly installments
contemplated by Section 3.02 of this Article III, the Account balance not yet
paid to Employee shall be paid in a lump sum within sixty (60) calendar days
after the Employee’s death to his designated beneficiaries, if living, or to his
contingent beneficiaries, if not living. In the absence of any such designation
or if the designated or contingent beneficiary is not living at the death of
the
Employee, the Account balance shall be paid in a lump sum to the Employee’s
spouse, if any, or, if none, to his estate. Such payment shall be made within
sixty (60) calendar days after the Employee’s death.
Section
3.04 Continued
Interest or
Earnings Accrual. Amounts
appropriated under this Agreement pending distribution shall continue to accrue
interest or earnings at the rate and in the manner prescribed by Section 2.03
or
2.04 of Article II hereof.
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ARTICLE
IV
ADMINISTRATION
Section
4.01 Delegation
of Responsibility. The
Administrator may delegate duties involved in the administration of this
Agreement to the Compensation Committee of the Board. However, the ultimate
responsibility for the administration of this Agreement shall remain with the
Administrator.
Section
4.02 Payment
of Benefits. The
amounts allocated to the Employee’s Account and payable as benefits under this
Agreement shall be paid solely from the general assets of the Bank. The Employee
shall not have any interest in any specific assets of the Bank under the terms
of this Agreement. This Agreement shall not be considered to create an escrow
account, trust fund or other funding arrangement of any kind or a fiduciary
relationship between the Employee and the Bank.
Section
4.03 Designation
of Beneficiaries. The
Employee shall designate in a writing filed with the Secretary of the Bank
a
beneficiary and a contingent beneficiary to whom death benefits or any unpaid
benefits due hereunder at the date of the Employee’s death shall be
paid.
ARTICLE
V
MISCELLANEOUS
Section 5.01 Amendment of Agreement. This Agreement cannot be amended, modified or supplemented in any respect except by a subsequent written agreement entered into by the parties.
Section
5.02 Successors
and Assigns. This
Agreement shall be binding upon, and shall inure to the benefit of, the Bank,
its successors and assigns, and the Employee, his heirs, legatees and personal
representatives.
Section
5.03 Non-Alienation.
The
Employee and his beneficiary, as determined pursuant to Section 4.03 of this
Agreement, shall not have any right to anticipate, alienate or assign any rights
under this Agreement, and any effort to do so shall be null and void. The
monthly benefits payable under this Agreement shall be exempt from the claims
of
creditors or other claimants and from all orders, decrees, levies and executions
and any other legal process to the fullest extent permitted by law.
Section
5.04 Choice
of Law. This
Agreement shall be construed and interpreted pursuant to, and in accordance
with, the laws of the State of Indiana.
Section
5.05 Waiver.
Failure
of any party hereto to insist upon strict compliance with any of the terms,
covenants and conditions hereof shall not be deemed a waiver or relinquishment
of any similar right or power hereunder at any subsequent time.
Section
5.06 Notices.
Any
notice required or permitted to be given under this Agreement shall be
sufficient if in writing and if personally delivered to the party to whom notice
should be given at the addresses set forth below (or at such other address
for a
party as shall be specified by notice given pursuant hereto):
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Bank:
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Lafayette
Savings Bank, FSB
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Employee:
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Section
5.07 Unenforceability.
If
any
provision of this Agreement is deemed invalid or unenforceable, the remaining
provisions shall remain in effect, unless modified by the administrator with
the
consent of Employee.
Section
5.08 Headings.
The
headings in this Agreement are solely for convenience of reference and shall
not
affect its interpretation.
Section
5.09 Duration
of this Agreement. This
Agreement shall automatically terminate at the date on which the balance of
the
Employee’s Account has been distributed pursuant to the terms of this
Agreement.
Section
5.10 No
Employment Contract. This
Agreement shall not be construed as an agreement, consideration or inducement
of
employment or as affecting in any manner the rights or obligations of the Bank
or of the Employee to continue or to terminate the employment relationship
at
any time.
IN
WITNESS WHEREOF, the Bank and Employee have caused this Agreement to be executed
as of this 29th day of September, 2005.
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LAFAYETTE SAVINGS BANK, FSB |
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By: |
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
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“Bank” |
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/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Employee |
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“Employee” |
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