HOMEFEDERAL BANK SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
EXHIBIT
10.5
HOMEFEDERAL
BANK
HOMEFEDERAL
BANK
THIS
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT (the “Agreement”) is adopted this
________ day of _______________, 2005, by and between HOMEFEDERAL BANK, an
Indiana-chartered commercial
bank located in Columbus, Indiana (“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:
| 1.1 |
“Beneficiary”
means each designated person, or the estate of the deceased Executive,
entitled to benefits, if any, upon the death of the Executive determined
pursuant to Article 4.
|
| 1.2 |
“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.
|
| 1.3 |
“Board”
means the Board of Directors of the Bank as from time to time
constituted.
|
| 1.4 |
“Code”
means the Internal Revenue Code of 1986, as
amended.
|
| 1.5 |
“Disability”
means 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 12 months, or (ii)
is, by
reason of any medically determinable physical or mental impairment
which
can be expected to result in death or can be expected to last for
a
continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident
and
health plan covering employees of the Executive’s employer. 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 of the Executive’s employer. Upon the request of the Plan
Administrator, the Executive must submit proof to the Plan Administrator
of Social Security Administration’s or the provider’s
determination.
|
| 1.6 |
“Effective
Date”
means July 1, 2005.
|
1
HOMEFEDERAL
BANK
| 1.7 |
“Plan
Administrator”
means the plan administrator described in Article
6.
|
| 1.8 |
“Plan
Year”
means each twelve-month period commencing on July 1 and ending on
June 30
of each year. The initial Plan Year shall commence on the Effective
Date
of this Agreement and end on the following June 30,
2006.
|
| 1.9 |
“Separation
from Service”
means
that the Executive’s service, as an employee and independent contractor,
to the Bank and any member of a controlled group as defined in Section
414
of the Code to which the Bank belongs, has terminated for any reason,
other than by reason of a leave of absence approved by the Bank or
the
death of the Executive.
|
| 1.10 |
“Termination
for Cause”
has that meaning set forth in Article
5.
|
Article
2
Distributions
During Lifetime
|
2.1
|
Retirement
Benefit.
At the date specified in Section 2.1.2, the Bank shall distribute
to the
Executive the benefit described in this Section 2.1 in lieu of any
other
benefit under this Article.
|
|
2.1.1
|
Amount
of Benefit.
The annual benefit under this Section 2.1 is Five Thousand Three
Hundred
Thirty-Six Dollars ($5,336).
|
|
2.1.2
|
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 the later of: (a) Separation from Service or (b) the date
the
Executive reaches age 50. The annual benefit shall be distributed
to the
Executive for fifteen (15) years.
|
|
2.2
|
Disability
Benefit.
If
the Executive’s Disability results in Separation from Service prior to the
date she reaches age 50, the Bank shall distribute to the Executive
the
benefit described in this Section 2.2 in lieu of any other benefit
under
this Article.
|
|
2.2.1
|
Amount
of Benefit. The
annual benefit under this Section 2.2 is Five Thousand Three Hundred
Thirty-Six Dollars ($5,336.00).
|
|
2.2.2
|
Distribution
of Benefit.
The Bank shall distribute the annual benefit to the Executive in
twelve
(12) equal monthly installments commencing within Sixty (60) days
following the date the Executive has a Separation from Service due
to
Disability. The annual benefit shall be distributed to the Executive
for
fifteen (15) years.
|
|
2.3
|
Restriction
on Timing of Distribution.
Notwithstanding any provision of this Agreement to the contrary,
if the
Executive is considered a “specified employee” under Section
|
2
HOMEFEDERAL
BANK
409A of the Code and regulations thereunder, benefit
distributions that qualify as a "separation from service" under Section 409A
of
the Code and regulations thereunder may not commence earlier than six (6) months
after the date of such separation from service.
Article
3
Distribution
at Death
|
3.1
|
Death
During Active Service.
If the Executive dies while in the active service to the Bank, the
Bank
shall distribute to the Beneficiary the benefit described in this
Section
3.1. This benefit shall be distributed in lieu of the benefits under
Article 2.
|
| 3.1.1 |
Amount
of Benefit.
The
benefit under this Section 3.1 is the Retirement Benefit described
in
section 2.1.1.
|
|
3.1.2
|
Distribution
of Benefit.
The Bank shall distribute the annual benefit to the Executive in
twelve
(12) equal monthly installments commencing within
Sixty (60) days following receipt by the Bank of the Executive's
death
certificate and payable
on the first day of each month that follows.
The annual benefit shall be distributed to the Executive for fifteen
(15)
years.
|
|
3.2
|
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.
|
|
3.3
|
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 the same benefits that the Executive
was entitled to prior to death except that the benefit distributions
shall
commence within Sixty (60) days following receipt by the Bank of
the
Executive’s death certificate.
|
Article
4
Beneficiaries
|
4.1
|
Beneficiary.
The
Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefit distributions under this
Agreement
to a Beneficiary 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.
|
|
4.2
|
Beneficiary
Designation: Change.
The Executive shall designate a Beneficiary by completing and signing
the
Beneficiary Designation Form, and delivering it to the Plan
|
3
HOMEFEDERAL
BANK
Administrator or its designated agent. 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,
as in effect from time to time. Upon the acceptance by the Plan Administrator
of
a new Beneficiary Designation Form, all Beneficiary designations previously
filed shall be cancelled. The Plan Administrator shall be entitled to rely
on
the last Beneficiary Designation Form filed by the Executive and accepted by
the
Plan Administrator prior to the Executive’s death.
|
4.3
|
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.
|
|
4.4
|
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, the benefits shall be made to the personal
representative of the Executive's
estate.
|
|
4.5
|
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 shall be a distribution for the account of the Executive
and the
Executive’s Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Agreement for such distribution
amount.
|
Article
5
General
Limitations
| 5.1 |
Termination
for Cause.
Notwithstanding any provision of this Agreement to the contrary,
the Bank
shall not distribute any benefit under this Agreement if Executive’s
service is terminated by the Board
for:
|
| (a) |
Gross
negligence or gross neglect of duties to the Bank;
or
|
| (b) |
Conviction
of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s service with the Bank; or
|
| (c) |
Fraud,
disloyalty, dishonesty or willful violation of any law or significant
Bank
policy committed in connection with the Executive's service and resulting
in a material adverse effect on the
Bank.
|
4
HOMEFEDERAL
BANK
|
5.2
|
Suicide
or Misstatement.
No benefits 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; provided, however that the Bank shall evaluate
the
reason for the denial, and upon advice of legal counsel and in its
sole
discretion, consider judicially challenging any
denial.
|
| 5.3 |
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 ("FDIA").
|
Article
6
Administration
of Agreement
|
6.1
|
Plan
Administrator Duties.
This Agreement shall be administered by a Plan Administrator which
shall
consist of the Board, or such committee or person(s) as the Board
shall
appoint. The Plan Administrator 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 the
Agreement.
|
|
6.2
|
Agents.
In the administration of this Agreement, the Plan Administrator may
employ
agents and delegate to them such administrative duties as it sees
fit
(including acting through a duly appointed representative), and may
from
time to time consult with counsel who may be counsel to the
Bank.
|
|
6.3
|
Binding
Effect of Decisions.
The decision or action of the Plan Administrator with respect to
any
question arising out of or in connection with the administration,
interpretation and application of the Agreement and the rules and
regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement.
|
|
6.4
|
Indemnity
of Plan Administrator.
The Bank shall indemnify and hold harmless the members of the Plan
Administrator against any and all claims, losses, damages, expenses
or
liabilities arising from any action or failure to act with respect
to this
Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its
members.
|
|
6.5
|
Bank
Information.
To enable the Plan Administrator to perform its functions, the Bank
shall
supply full and timely information to the Plan Administrator on all
matters relating to the date and circum-stances of the retirement,
Disability, death, or Separation from Service of the Executive, and
such
other pertinent information as the Plan Administrator may reasonably
require.
|
5
HOMEFEDERAL
BANK
|
6.6
|
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.
|
Article
7
Claims
and Review Procedures
|
7.1
|
Claims
Procedure.
An Executive or Beneficiary (“claimant”) who has not received benefits
under the Agreement that he or she believes should be distributed
shall
make a claim for such benefits as
follows:
|
|
7.1.1
|
Initiation
- Written Claim.
The claimant initiates a claim by submitting to the Plan Administrator
a
written claim for the benefits.
|
|
7.1.2
|
Timing
of Plan Administrator Response.
The Plan Administrator shall respond to such claimant within 90 days
after
receiving the claim. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the
Plan
Administrator can extend the response period by an additional 90
days by
notifying the claimant in writing, prior to the end of the initial
90-day
period, that an additional period is required. The notice of extension
must set forth the special circumstances and the date by which the
Plan
Administrator expects to render its
decision.
|
|
7.1.3
|
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:
|
|
(a)
|
The
specific reasons for the denial;
|
|
(b)
|
A
reference to the specific provisions of the Agreement on which the
denial
is based;
|
|
(c)
|
A
description of any additional information or material necessary for
the
claimant to perfect the claim and an explanation of why it is
needed;
|
|
(d)
|
An
explanation of the Agreement’s review procedures and the time limits
applicable to such procedures; and
|
|
(e)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
|
|
7.2
|
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:
|
|
7.2.1
|
Initiation
- Written Request.
To initiate the review, the claimant, within 60 days after receiving
the
Plan Administrator’s notice of denial, must file with the Plan
|
6
HOMEFEDERAL
BANK
Administrator
a written request for review.
|
7.2.2
|
Additional
Submissions - Information Access.
The claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Plan
Administrator shall also provide the claimant, upon request and free
of
charge, reasonable access to, and copies of, all documents, records
and
other information relevant (as defined in applicable ERISA regulations)
to
the claimant’s claim for benefits.
|
|
7.2.3
|
Considerations
on Review.
In considering the review, the Plan Administrator shall take into
account
all materials and information the claimant submits relating to the
claim,
without regard to whether such information was submitted or considered
in
the initial benefit determination.
|
|
7.2.4
|
Timing
of Plan Administrator Response.
The Plan Administrator shall respond in writing to such claimant
within 60
days after receiving the request for review. If the Plan Administrator
determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response
period by an additional 60 days by notifying the claimant in writing,
prior to the end of the initial 60-day period, that an additional
period
is required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects
to
render its decision.
|
|
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:
|
|
(a)
|
The
specific reasons for the denial;
|
|
(b)
|
A
reference to the specific provisions of the Agreement on which the
denial
is based;
|
|
(c)
|
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
|
|
(d)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
|
Article
8
Amendments
and Termination
8.1 Amendment.
This Agreement may be amended only by a written agreement signed by the Bank
and
the Executive; provided, however, that the Bank may amend this Agreement to
conform with legislative requirements or written directives to the Bank from
its
banking regulators.
7
HOMEFEDERAL
BANK
8.2 Termination.
This
Agreement may be terminated only by a written agreement signed by the Bank
and
the Executive. Upon such termination, the applicable benefits under this
Agreement shall be paid to the Executive in the form and at the earliest
possible time as specified in this Agreement and permitted under Section 409A
of
the Code and any applicable subsequent authority.
Article
9
Miscellaneous
|
9.1
|
Binding
Effect.
This Agreement shall bind the Executive and the Bank, and their
beneficiaries, survivors, executors, administrators and
transferees.
|
|
9.2
|
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 does
it
interfere with the Bank's right to discharge the Executive. It also
does
not require the Executive to remain an employee nor interfere with
the
Executive's right to separate from service at any
time.
|
|
9.3
|
Non-Transferability.
Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any
manner.
|
|
9.4
|
Tax
Withholding.
The Bank shall withhold any taxes that are required to be withheld,
under
Section 409A of the Code and regulations thereunder, 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 authority(ies).
|
|
9.5
|
Applicable
Law.
The 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.
|
|
9.6
|
Unfunded
Arrangement.
The Executive and 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.
|
|
9.7
|
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 event, the term “Bank” as used in
this Agreement shall be deemed to refer to the successor or
|
8
HOMEFEDERAL
BANK
Supplemental
Executive Retirement Agreement
survivor
bank.
|
9.8
|
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.
|
|
9.9
|
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:
|
HomeFederal
Bank
Attn:
___________
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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.
IN
WITNESS WHEREOF, the Executive and a duly authorized representative of the
Bank
have signed this Agreement.
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EXECUTIVE:
|
BANK:
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HOMEFEDERAL
BANK
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By
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▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Title
|
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9
HOMEFEDERAL
BANK
Supplemental
Executive Retirement Agreement
BENEFICIARY
DESIGNATION FORM
I,
▇▇▇▇▇▇
▇▇▇▇▇▇▇ ,
designate the following as Beneficiary under the Agreement:
|
Primary:
___________________________________________________________
___________________________________________________________
|
_____%
_____%
|
|
Contingent:
___________________________________________________________
___________________________________________________________
|
_____%
_____%
|
Notes:
| · |
Please
PRINT CLEARLY or TYPE the names of the
beneficiaries.
|
| · |
To
name a trust as Beneficiary, please provide the name of the trustee(s)
and
the exact
name and date of the trust
agreement.
|
| · |
To
name your estate as Beneficiary, please write “Estate of
_[your
name]_”.
|
| · |
Be
aware that none of the contingent beneficiaries will receive anything
unless ALL of the primary beneficiaries predecease
you.
|
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.
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Name:
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Signature:
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Date:
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Received
by the Plan Administrator this ____ day of ____________________,
2____
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By:
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Title:
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