EXHIBIT 10.13 RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT FOR
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
FOR
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
WEST ESSEX BANK, F.S.B.
CALDWELL, NEW JERSEY
TABLE OF CONTENTS
PAGE
SECTION I DEFINITIONS........................................................ 2
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SECTION II BENEFITS-GENERALLY................................................. 7
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2.1 (a) Retirement Income Trust Fund and Accrued Benefit Account. 7
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(b) Withdrawal Rights Not Exercised.......................... 8
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(1) Contributions Made Annually......................... 8
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(2) Death Prior to Benefit Age During Employment........ 8
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(3) Change in Control................................... 9
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(4) Termination for Cause............................... 10
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(c) Withdrawal Rights Exercised.............................. 10
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(1) Phantom Contributions Made Annually................. 10
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(2) Death Prior to Benefit Age During Employment........ 11
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(3) Change in Control................................... 11
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(4) Termination for Cause............................... 12
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2.2 Withdrawals from Retirement Income Trust Fund................ 12
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SECTION III RETIREMENT BENEFIT................................................. 13
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3.1 (a) Normal form of payment................................... 13
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(b) Alternative payout option................................ 15
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SECTION IV PRE-RETIREMENT DEATH BENEFIT....................................... 16
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4.1 (a) Normal form of payment................................... 16
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(b) Alternative payout option................................ 18
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SECTION V BENEFIT(S) IN THE EVENT OF TERMINATION OF SERVICE
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PRIOR TO BENEFIT AGE............................................... 18
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5.1 Voluntary or Involuntary Termination of Service
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Other than for Cause....................................... 18
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(a) Normal form of payment................................... 19
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(1) Executive Lives Until Benefit Age................... 19
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(2) Executive Dies Prior to Benefit Age................. 21
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(b) Alternative Payout Option................................ 22
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(1) Executive Lives Until Benefit Age................... 22
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(2) Executive Dies Prior to Benefit Age................. 23
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5.2 Termination for Cause........................................ 24
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SECTION VI OTHER BENEFITS..................................................... 24
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6.1 (a) Disability Benefit....................................... 24
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(b) Disability Benefit - Supplemental........................ 25
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6.2 Additional Death Benefit - Burial Expense.................... 26
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SECTION VII NON-COMPETITION.................................................... 26
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7.1 Non-Competition.............................................. 26
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7.2 Breach of Non-Competition Clause............................. 26
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(a) During Employment........................................ 26
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(b) Termination of Employment Following Breach............... 27
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(c) Breach Following Executive's Termination of Employment... 27
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SECTION VIII BENEFICIARY DESIGNATION............................................ 28
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SECTION IX EXECUTIVE'S RIGHT TO ASSETS........................................ 28
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SECTION X RESTRICTIONS UPON FUNDING.......................................... 29
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SECTION XI ACT PROVISIONS..................................................... 30
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11.1 Named Fiduciary and Administrator............................ 30
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11.2 Claims Procedure and Arbitration............................. 30
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SECTION XII MISCELLANEOUS...................................................... 31
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12.1 No Effect on Employment Rights............................... 31
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12.2 State Law.................................................... 33
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12.3 Severability................................................. 33
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12.4 Incapacity of Recipient...................................... 33
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12.5 Unclaimed Benefit............................................ 33
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12.6 Limitations on Liability..................................... 34
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12.7 Gender....................................................... 34
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12.8 Effect on Other Corporate Benefit Agreements................. 34
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12.9 Suicide...................................................... 34
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12.10 Inurement.................................................... 35
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12.11 Headings..................................................... 35
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SECTION XIII AMENDMENT/PLAN TERMINATION......................................... 35
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13.1 Amendment or Plan Termination................................ 35
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13.2 Executive's Right to Payment Following Plan Termination...... 36
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SECTION XIV EXECUTION.......................................................... 36
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RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
This Restated Executive Supplemental Retirement Income Agreement (the
"Agreement"), effective as of the 22nd day of December, 1995, amends and
restates the Executive Supplemental Income Master Agreement entered into on
January 1, 1995, and formalizes the understanding by and between WEST ESSEX
BANK, F.S.B. (the "Bank"), a federally chartered savings bank, and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, hereinafter referred to as "Executive".
WITNESSETH:
WHEREAS, the Executive is employed by the Bank; and
WHEREAS, the Bank recognizes the valuable services heretofore performed by
the Executive and wishes to encourage continued employment; and
WHEREAS, the Executive wishes to be assured that he 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
employment and wishes to provide his beneficiary with benefits from and after
death; and
WHEREAS, the Bank and the Executive wish to provide the terms and
conditions upon which the Bank shall pay such additional compensation to the
Executive after retirement or other termination of employment and/or death
benefits to his beneficiary after death; and
WHEREAS, the Bank has adopted this Restated Executive Supplemental
Retirement Income Agreement which controls all issues relating to benefits as
described herein;
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the Bank and the Executive agree as follows:
1
SECTION I
DEFINITIONS
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When used herein, the following words and phrases shall have the meanings
below unless the context clearly indicates otherwise:
1.1 "Accrued Benefit Account" shall be represented by the bookkeeping entries
required to record the Executive's (i) Phantom Contributions plus (ii)
accrued interest, equal to the Interest Factor, earned to-date on such
amounts. However, neither the existence of such bookkeeping entries nor the
Accrued Benefit Account itself shall be deemed to create either a trust of
any kind, or a fiduciary relationship between the Bank and the Executive or
Beneficiary.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
1.3 "Bank" means WEST ESSEX BANK, F.S.B. and any successor thereto.
1.4 "Beneficiary" means the person or persons (and their heirs) designated as
Beneficiary in Exhibit B of this Agreement to whom the deceased Executive's
benefits are payable. If no Beneficiary is so designated, then the
Executive's Spouse, if living, will be deemed the Beneficiary. If the
Executive's Spouse is not living, then the Children of the Executive will
be deemed the Beneficiaries and will take on a per stirpes basis. If there
are no Children, then the Estate of the Executive will be deemed the
Beneficiary.
1.5 "Benefit Age" means the Executive's sixty-fifth (65th) birthday.
2
1.6 "Benefit Eligibility Date" means the date on which the Executive is
entitled to receive any, benefit(s) pursuant to Section(s) III or V of this
Agreement. It shall be the first day of the month following the month in
which the Executive attains his Benefit Age.
1.7 "Board of Directors" means the board of directors of the Bank.
1.8 "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 Agreement, or gross
negligence in matters of material importance to the Bank.
1.9 "Change in Control" of the Bank shall mean and include the following:
(1) a Change in Control of a nature that would be required to be reported
in response to Item 1(a) of the Current Report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); or
(2) a Change in Control of the Bank within the meaning of 12 C.F.R. 574.4;
or
(3) a Change in Control at such time as
(i) any "person" (as the term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank representing Twenty Percent
(20.0%) or more of the combined voting power of the Bank's
outstanding securities ordinarily having the right to vote at the
election of Directors, except for (i) any stock of the
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Bank purchased by the Holding Company in connection with the
conversion of the Bank to stock form, and (ii) any stock
purchased by the Bank's Employee Stock Ownership Plan and/or
trust; or
(ii) individuals who constitute the Board of Directors on the 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 Bank's stockholders was approved by the Bank's or the
Bank's Nominating Committee which is comprised of members of the
Incumbent Board, shall be, for purposes of this clause (ii),
considered as though he were a member of the Incumbent Board; or
(iii)merger, consolidation, or sale of all or substantially all of
the assets of the Bank occurs; or
(iv) a proxy statement is issued soliciting proxies from the members
(or stockholders) of the Bank by someone other than the current
management of the Bank, seeking member (or stockholder) approval
of a plan of reorganization, merger, or consolidation of the Bank
with one or more corporations as a result of which the
outstanding shares of the class of the Bank's securities are
exchanged for or converted into cash or property or securities
not issued by the Bank.
1.10 "Children" means all natural or adopted children of the Executive, and
issue of any predeceased child or children.
1.11 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
4
1.12 "Contribution(s)" means those annual contributions which the Bank is
required to make to the Retirement Income Trust Fund on behalf of the
Executive in accordance with Subsection 2.1(a) and in the amounts set forth
in Exhibit A of the Agreement.
1.13 (a) "Disability Benefit" means the benefit payable to the Executive
following a determination, in accordance with Subsection 6.1 (a), that
he is no longer able, properly and satisfactorily, to perform his
duties at the Bank.
(b) "Disability Benefit- Supplemental" (if applicable) means the benefit
payable to the Executive's Beneficiary upon the Executive's death in
accordance with Subsection 6.1 (b).
1.14 "Effective Date" of this Agreement shall be December 22, 1995.
1.15 "Estate" means the estate of the Executive.
1.16 "Interest Factor" means compounding, discounting or annuitizing, as
applicable, at a rate set forth in Exhibit A.
1.17 "Payout Period" means the time frame during which certain benefits payable
hereunder shall be distributed. Payments shall be made in monthly
installments commencing on the first day of the month following the
occurrence of the event which triggers distribution and continuing for a
period of one hundred eighty (180) months. Should the Executive make a
Timely Election to receive a lump sum benefit payment, the Executive's
Payout Period shall be deemed to be one (1) month.
1.18 "Phantom Contributions" means those annual Contributions which the Bank is
no longer required to make on behalf of the Executive to the Retirement
Income Trust Fund. Rather, once the Executive has exercised the withdrawal
rights provided for in Subsection 2.2, the
5
Bank shall be required to record the annual amounts set forth in Exhibit A
of the Agreement in the Executive's Accrued Benefit Account, pursuant to
Subsection 2.1.
1.19 "Plan Year" shall mean the twelve (12) month period commencing January 1,
1996 and each consecutive twelve (12) month period thereafter.
1.20 "Retirement Income Trust Fund" means the trust fund account established by
the Executive and into which annual Contributions will be made by the Bank
on behalf of the Executive pursuant to Subsection 2.1. The contractual
rights of the Bank and the Executive with respect to the Retirement Income
Trust Fund shall be outlined in a separate writing to be known as the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor Trust Agreement.
1.21 "Supplemental Retirement Income Benefit" means (assuming the normal form of
payment is applicable) an annual amount (before taking into account federal
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and state income taxes), payable in monthly installments, which is
projected pursuant to the Agreement, for the purpose of determining the
Contribution to be made or the Phantom Contribution to be recorded on
behalf of an Executive who maintains continuous service until his Benefit
Age. The annual Contributions and Phantom Contributions have been
actuarially determined, using the assumptions set forth in Exhibit A, in
order to fund for the projected Supplemental Retirement Income Benefit. The
Supplemental Retirement Income Benefit which is projected, and for which
Contributions and/or Phantom Contributions are being made and/or recorded,
is set forth in Exhibit A.
1.22 "Timely Election" means the Executive has made an election to change the
form of his benefit payment(s) by filing with the Administrator a Notice of
Election to Change Form of Payment (Exhibit C of this Agreement), such
election having been made prior to the event which triggers distribution
and at least two (2) years prior to the Executive's Benefit Eligibility
Date.
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SECTION II
BENEFITS - GENERALLY
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2.1 (a) Retirement Income Trust Fund and Accrued Benefit Account. The
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Executive shall establish the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor Trust into
which the Bank shall be required to make annual Contributions on the
Executive's behalf, pursuant to Exhibit A and this Section II of the
Agreement. A trustee shall be selected by the Executive. The trustee
shall maintain an account, separate and distinct from the Executive's
personal contributions, which account shall constitute the Retirement
Income Trust Fund. The trustee shall be charged with the
responsibility of investing all contributed funds. Distributions from
the Retirement Income Trust Fund of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor
Trust shall be made by the trustee to the Executive, for purposes of
payment of any income taxes due and owing on Contributions by the Bank
to the Retirement Income Trust Fund, if any, and on any taxable
earnings associated with such Contributions which the Executive shall
be required to pay from year to year under applicable law prior to
actual receipt of any benefit payments from the Retirement Income
Trust Fund. If the Executive exercises his withdrawal rights pursuant
to Subsection 2.2, the Bank's obligation to make Contributions to the
Retirement Income Trust Fund shall cease and the Bank's obligation to
record Phantom Contributions in the Accrued Benefit Account shall
immediately commence pursuant to Exhibit A and this Section II of the
Agreement. To the extent this Agreement is inconsistent with the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor Trust Agreement, this Agreement shall
supersede the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor Trust Agreement.
The annual Contributions (or Phantom Contributions) required to be
made by the Bank to the Retirement Income Trust Fund (or recorded by
the Bank in the Accrued Benefit Account) have been fixed and
determined and are set forth in
7
Exhibit A which is attached hereto and incorporated herein by
reference. Contributions shall be made by the Bank to the Retirement
Income Trust Fund (i) within five (5) days of establishment of such
trust, and (ii) within the first five (5) days of the beginning of
each succeeding Plan Year, unless this Section expressly provides
otherwise. Phantom Contributions, if any, shall be recorded in the
Accrued Benefit Account within the first five (5) days of the
beginning of each applicable Plan Year, unless this Section expressly
provides otherwise. Phantom Contributions shall accrue interest at a
rate equal to the Interest Factor, up to and throughout the Payout
Period, until the balance or the Accrued Benefit Account has been
fully distributed. Interest on any Phantom Contribution shall not
commence until one (1) calendar year following the date such Phantom
Contribution is initially recorded in the Executive's Accrued Benefit
Account.
(b) Withdrawal Rights Not Exercised.
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(1) Contributions Made Annually
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If the Executive does not exercise any withdrawal rights pursuant
to Subsection 2.2, such annual Contributions to the Retirement
Income Trust Fund shall continue each year, unless this
Subsection 2.1(b) specifically states otherwise, until the
earlier of (i) the last Plan Year that Contributions are required
pursuant to Exhibit A, or (ii) the Plan Year of the Executive's
termination of employment.
(2) Death Prior to Benefit Age During Employment
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If the Executive (i) does not exercise any withdrawal rights
pursuant to Subsection 2.2 and (ii) dies prior to attaining
Benefit Age but while employed by the Bank (including employment
following a Change in Control), all annual Contributions set
forth in Exhibit A shall be required of the Bank. Such
Contributions to the Retirement Income Trust Fund shall commence
in the Plan Year in which the Retirement Income Trust Fund
8
is established and shall continue through the Plan Year in which
the Executive dies. The final Contribution payable in the year of
the Executive's death shall be equal to: (i) the full
Contribution required for the Plan Year in which the Executive
dies, if not made prior to death, plus (ii) the sum of the total
Contributions which would have been required in accordance with
Exhibit A for the Plan Year(s) following the year of the
Executive's death. Such final Contribution shall be payable in a
lump sum to the Retirement Income Trust Fund within ten (10) days
of the Executive's death.
(3) Change in Control.
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If (i) the Executive does not exercise his withdrawal rights
pursuant to Subsection 2.2 and (ii) a Change in Control occurs at
the Bank, the Contributions set forth below shall be required of
the Bank. The annual Contributions set forth in Exhibit A shall
be made to the Retirement Income Trust Fund, commencing in the
Plan Year in which the Retirement Income Trust Fund is
established and continuing through the Plan Year in which the
Change in Control occurs. Upon the occurrence, of said Change in
Control, the Bank shall be required to make an immediate lump sum
Contribution to the Executive's Retirement Income Trust Fund in
an amount equal to: (1) the full Contribution required for the
Plan Year in which such Change in Control occurs as provided for
in Exhibit A, if not made prior to such Change in Control, plus
(ii) the present value (computed using a discount rate equal to
the Interest Factor) of the total Contributions which would have
been required in accordance with Exhibit A for the three (3) Plan
Years following the year in which such Change in Control occurs.
In the event the Executive continues employment with the Bank
following the date of the Change in Control, the Bank shall be
required to resume making Contributions in accordance with the
schedule
9
provided for in Exhibit A, in the fourth (4th) year following the
year in which the Change in Control occurred and shall continue
for the lesser of: (i) the number of years remaining in the
schedule provided for in Exhibit A, or (ii) the number of years
the Executive remains employed by the Bank.
(4) Termination For Cause.
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If the Executive (i) does not exercise his withdrawal rights
pursuant to Subsection 2.2 and (ii) is terminated for Cause
pursuant to Subsection 5.2, no further Contribution(s) to the
Retirement Income Trust Fund shall be required of the Bank, and,
if not yet made, no Contribution shall be required for the year
in which such termination for Cause occurs.
(c) Withdrawal Rights Exercised.
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(1) Phantom Contributions Made Annually.
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If the Executive exercises his withdrawal rights pursuant to
Subsection 2.2, no further Contributions to the Retirement Income
Trust Fund shall be required of the Bank. Thereafter, Phantom
Contributions shall be recorded annually in the Executive's
Accrued Benefit Account, within five (5) days of the beginning of
each Plan Year, commencing with the first Plan Year following the
Plan Year in which the Executive exercises his withdrawal rights.
Such Phantom Contributions shall continue to be recorded
annually, unless this Subsection 2.1(c) specifically states
otherwise, until the earlier of (i) the last Plan Year that
Phantom Contributions are required pursuant to Exhibit A, or (ii)
the Plan Year of the Executive's termination of employment.
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(2) Death Prior to Benefit Age During Employment
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If the Executive (i) exercises his withdrawal rights pursuant to
Subsection 2.2 and (ii) dies while employed by the Bank but prior
to attaining Benefit Age (including employment following a Change
in Control), all annual Contributions set forth in Exhibit A for
all Plan Years preceding such exercise of withdrawal rights shall
be required of the Bank. Such Contributions to the Retirement
Income Trust Fund shall commence in the Plan Year in which the
Retirement Income Trust Fund is established and shall continue
through the Plan Year in which the Executive first exercises his
withdrawal rights. Thereafter, Phantom Contributions shall be
recorded annually, pursuant to Exhibit A, in the Executive's
Accrued Benefit Account and shall continue through the Plan Year
in which the Executive dies. The final Phantom Contribution
recorded in the Accrued Benefit Account in the year of the
Executive's death shall be equal to: (i) the full Phantom
Contribution required for the Plan Year in which the Executive
dies, if not made prior to death, plus (ii) the sum of the total
Phantom Contributions which would have been required in
accordance with Exhibit A for the Plan Year(s) following the year
of the Executive's death. Such final Phantom Contribution shall
be recorded in the Accrued Benefit Account within ten (10) days
of the Executive's death.
(3) Change in Control
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Phantom Contributions shall commence in the Plan Year following
the Plan Year in which the Executive first exercises his
withdrawal rights and shall continue through the Plan Year in
which the Change in Control occurs. Upon the occurrence of said
Change in Control, the Bank shall be required to record an
immediate lump sum Phantom Contribution in the Executive's
Accrued Benefit Account in an amount equal to: (i) the full
Phantom Contribution required for the Plan Year in which such
Change
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in Control occurs, if not made prior to such Change in Control,
plus (ii) the present value (computed using a discount rate equal
to the Interest Factor) of the total Phantom Contributions which
would have been required in accordance with Exhibit A for the
three (3) Plan Years following the year in which such Change in
Control occurs. In the event the Executive continues employment
with the Bank following the date of the Change in Control, the
Bank shall be required to resume recording Phantom Contributions
in accordance with the schedule provided for in Exhibit A. Such
Phantom Contributions shall resume in the fourth (4th) year
following the year in which the Change in Control occurred and
shall continue for the lesser of: (i) the number of years
remaining in the schedule provided for in Exhibit A, or (ii) the
number of years the Executive remains employed by the Bank.
(4) Termination For Cause
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If the Executive is terminated for Cause pursuant to Subsection
5.2, the entire balance of the Executive's Accrued Benefit
Account at the time of such termination, which shall include ally
Phantom Contributions which have been recorded plus interest
accrued on such Phantom Contributions, shall be forfeited.
2.2 Withdrawals From Retirement Income Trust Fund.
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Exercise of withdrawal rights by the Executive pursuant to the ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ Grantor Trust Agreement shall terminate the Bank's obligation to
make any further Contributions to the Retirement Income Trust Fund, and the
Bank's obligation to record Phantom Contributions pursuant to Subsection
2.1(c) shall commence. For purposes of this Subsection 2.2, "exercise of
withdrawal rights" shall mean those withdrawal rights to which the
Executive is entitled under Article III of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor
Trust Agreement and shall exclude any distributions made by the trustee of
the Retirement Income
12
Trust Fund to the Executive for purposes of payment of income taxes in
accordance with Subsection 2.1 of this Agreement.
SECTION III
RETIREMENT BENEFIT
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3.1 (a) Normal form of payment.
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If (i) the Executive is employed with the Bank until reaching his
Benefit Age (including employment with the Bank until Benefit Age
following a Change in Control), and (ii) the Executive has not made a
Timely Election to receive a lump sum benefit, this Subsection 3.1(a)
shall be controlling with respect to retirement benefits.
The Retirement Income Trust Fund, measured as of the Executive's
Benefit Age, shall be annuitized (using the Interest Factor) into
monthly installments and shall be payable for the Payout Period. Such
benefit payments shall commence on the Executive's Benefit Eligibility
Date. Should Retirement Income Trust Fund assets actually earn a rate
of return, following the date such balance is annuitized, which is
less than the rate of return used to annuitize the Retirement Income
Trust Fund, no additional contributions to the Retirement Income Trust
Fund shall be required by the Bank in order to fund the final benefit
payment(s) and make up for any shortage attributable to the less-than-
expected rate of return. Should Retirement Income Trust Fund assets
actually earn a rate of return, following the date such balance is
annuitized, which is greater than the rate of return used to annuitize
the Retirement Income Trust Fund, the final benefit payment to the
Executive (or his Beneficiary) shall distribute the excess amounts
attributable to the greater-than-expected rate of return. In the event
the Executive dies at any time after attaining his Benefit Age, but
prior to commencement or completion of all the payments due and owing
hereunder, (i) the trustee of the Retirement
13
Income Trust Fund shall pay to the Executive's Beneficiary the monthly
installments (or a continuation of such monthly installments if they
have already commenced) for the balance of months remaining in the
Payout Period, or (ii) the Executive's Beneficiary may request to
receive the unpaid balance of the Executive's Retirement Income Trust
Fund in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, payment of the balance of the Retirement Income Trust
Fund in such lump sum form shall be made only if the Executive's
Beneficiary (i) obtains approval from the trustee of the ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ Grantor Trust and (ii) notifies the Administrator in writing
of such election within ninety (90) days of the Executive's death.
Such lump sum payment, if approved by the trustee, shall be payable
within thirty (30) days of such trustee approval.
The Executive's Accrued Benefit Account (if applicable), measured as
of the Executive's Benefit Age, shall be annuitized (using the
Interest Factor) into monthly installments and shall be payable for
the Payout Period. Such benefit payments shall commence on the
Executive's Benefit Eligibility Date. In the event the Executive dies
at any time after attaining his Benefit Age, but prior to commencement
or completion of all the payments due and owing hereunder, (i) the
Bank shall pay to the Executive's Beneficiary the same monthly
installments (or a continuation of such monthly installments if they
have already commenced) for the balance of months remaining in the
Payout Period, or (ii) the Executive's Beneficiary may request to
receive the remainder of any unpaid benefit payments in a lump sum
payment. If a lump sum payment is requested by the Beneficiary, the
amount of such lump sum payment shall be equal to the unpaid balance
of the Executive's Accrued Benefit Account. Payment in such lump sum
form shall be made only if the Executive's Beneficiary (i) obtains
Board of Director approval, and (ii) notifies the Administrator in
writing of such election within ninety (90) days of the Executive's
death. Such lump sum payment, if approved by the Board
14
of Directors, shall be payable within thirty (30) days of such Board
of Director approval.
(b) Alternative payout option.
-------------------------
If (i) the Executive is employed with the Bank until reaching his
Benefit Age, (including employment with the Bank until Benefit Age
following a Change in Control), and (ii) the Executive has made a
Timely Election to receive a lump sum benefit, this Subsection 3.1(b)
shall be controlling with respect to retirement benefits.
The balance of the Retirement Income Trust Fund, measured as of the
Executive's Benefit Age, shall be paid to the Executive in a lump sum
on his Benefit Eligibility Date. In the event the Executive dies after
becoming eligible for such payment (upon attainment of his Benefit
Age), but before the actual payment is made, his Beneficiary shall be
entitled to receive the lump sum benefit in accordance with this
Subsection 3.1(b) within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
The balance of the Executive's Accrued Benefit Account (if
applicable), measured as of the Executive's Benefit Age, shall be paid
to the Executive in a lump sum on his Benefit Eligibility Date. In the
event the Executive dies after becoming eligible for such payment
(upon attainment of his Benefit Age), but before the actual payment is
made, his Beneficiary shall be entitled to receive the lump sum
benefit in accordance with this Subsection 3.1(b) within thirty (30)
days of the date the Administrator receives notice of the Executive's
death.
15
SECTION IV
PRE-RETIREMENT DEATH BENEFIT
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4.1 (a) Normal form of payment.
----------------------
If (i) the Executive dies while employed by the Bank prior to
attaining his Benefit Age, (including the Executive's death while
employed by the Bank following a Change in Control) and (ii) the
Executive has not made a Timely Election to receive a lump sum
benefit, this Subsection 4.1(a) shall be controlling with respect to
pre-retirement death benefits.
The Executive's Beneficiary shall be entitled to receive benefits in
accordance with this Subsection 4.1(a). The Executive's Retirement
Income Trust Fund, measured as of the later of (i) the date of the
Executive's death, or (ii) the date any final lump sum Contribution is
made pursuant to Subsection 2.1(b), shall be annuitized (using the
Interest Factor) into monthly installments and shall be payable for
the Payout Period. Such benefit payments shall commence within thirty
(30) days of the date the Administrator receives notice of the
Executive's death, or, if later, within thirty (30) days after any
final lump sum Contribution is made to the Retirement Income Trust
Fund. Should Retirement Income Trust Fund assets actually earn a rate
of return, following the date such balance is annuitized, which is
less than the rate of return used to annuitize the Retirement Income
Trust Fund, no additional contributions to the Retirement Income Trust
Fund shall be required by the Bank in order to fund the final benefit
payment(s) and make up for any shortage attributable to the less-than-
expected rate of return. Should Retirement Income Trust Fund assets
actually earn a rate of return, following the date such balance is
annuitized, which is greater than the rate of return used to annuitize
the Retirement Income Trust Fund, the final benefit payment to the
Executive's Beneficiary shall distribute the excess amounts
attributable to the greater-than-expected rate of return. The
Executive's
16
Beneficiary may request to receive the unpaid balance of the
Executive's Retirement Income Trust Fund in a lump sum payment. If a
lump sum payment is requested by the Beneficiary, payment of the
balance of the Retirement Income Trust Fund in such lump sum form
shall be made only if the Executive's Beneficiary (i) obtains approval
from the trustee of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor Trust and (ii)
notifies the Administrator in writing of such election within ninety
(90) days of the Executive's death. Such lump sum payment, if approved
by the trustee, shall be made within thirty (30) days of such trustee
approval.
The Executive's Accrued Benefit Account (if applicable), measured as
of the later of (i) the date of the Executive's death, or (ii) the
date any final Phantom Contribution is recorded pursuant to Subsection
2.1(c), shall be annuitized (using the Interest Factor) into monthly
installments and shall be payable to the Beneficiary for the Payout
Period. Such benefit payments shall commence within thirty (30) days
of the date the Administrator receives notice of the Executive's
death, or, if later, within thirty (30) days after any final lump sum
Phantom Contribution is recorded in the Accrued Benefit Account. The
Executive's Beneficiary may request to receive the remainder of any
unpaid monthly benefit payments due from the Accrued Benefit Account
in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, the amount of such lump sum payment shall be equal to the
balance of the Executive's Accrued Benefit Account. Payment in such
lump sum form shall be made only if the Executive's Beneficiary (i)
obtains Board of Director approval, and (ii) notifies the
Administrator in writing of such election within ninety (90) days of
the Executive's death. Such lump sum payment, if approved by the Board
of Directors, shall be payable within thirty (30) days of such Board
of Director approval.
17
(b) Alternative payout option.
-------------------------
If (i) the Executive dies prior to attaining his Benefit Age,
(including the Executive's death while employed by the Bank following
a Change in Control), and (ii) the Executive has made a Timely
Election to receive a lump sum benefit, this Subsection 4.1(b) shall
be controlling with respect to preretirement death benefits.
The Executive's Beneficiary shall be entitled to receive a lump sum
benefit in accordance with this Subsection 4.1(b). The balance of the
Executive's Retirement Income Trust Fund, measured as of the date any
final lump sum Contribution is made pursuant to Subsection 2.1(b),
shall be paid to the Executive's Beneficiary in a lump sum within
thirty (30) days of the date the Administrator receives notice of the
Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable), measured
as of the date any final Phantom Contribution is recorded pursuant to Subsection
2.1(c), shall be paid to the Executive's Beneficiary in a lump sum within thirty
(30) days of the (late the Administrator receives notice of the Executive's
death.
SECTION V
BENEFIT(S) IN THE EVENT OF TERMINATION OF SERVICE
-------------------------------------------------
PRIOR TO BENEFIT AGE
--------------------
5.1 Voluntary or Involuntary Termination of Service Other Than for Cause. In
--------------------------------------------------------------------
the event the Executive's service with the Bank is voluntarily or
involuntarily terminated prior to Benefit Age, for any reason including a
Change in Control, but excluding (i) any termination related to disability
which shall be covered in Section VI, or (ii) termination for Cause which
shall be covered in Subsection 5.2, the Executive (or his Beneficiary)
shall be entitled to receive benefits in accordance with this Subsection
5.1. Payments of benefits pursuant to this
18
Subsection 5.1 shall be made in accordance with Subsection 5.1(a) or 5.1(b)
below, as applicable.
(a) Normal form of payment.
----------------------
(1) Executive Lives Until Benefit Age
---------------------------------
If (i) after such termination, the Executive lives until
attaining his Benefit Age, and (ii) the Executive has not made a
Timely Election to receive a lump sum benefit, this Subsection
5.1(a)(1) shall be controlling with respect to retirement
benefits.
The Retirement Income Trust Fund, measured as of the Executive's
Benefit Age, shall be annuitized (using the Interest Factor) into
monthly installments and shall be payable for the Payout Period.
Such payments shall commence on the Executive's Benefit
Eligibility Date. Should Retirement Income Trust Fund assets
actually earn a rate of return, following the date such balance
is annuitized, which is less than the rate of return used to
annuitize the Retirement Income Trust Fund, no additional
contributions to the Retirement Income Trust Fund shall be
required by the Bank in order to fund the final benefit
payment(s) and make up for any shortage attributable to the less-
than-expected rate of return. Should Retirement Income Trust Fund
assets actually earn a rate of return, following the date such
balance is annuitized, which is greater than the rate of return
used to annuitize the Retirement Income Trust Fund, the final
benefit payment to the Executive (or his Beneficiary) shall
distribute the excess amounts attributable to the greater-than-
expected rate of return. In the event the Executive dies at any
time after attaining his Benefit Age, but prior to commencement
or completion of all the payments due and owing hereunder, (i)
the trustee of the Retirement Income Trust Fund shall pay to the
Executive's Beneficiary the monthly
19
installments (or a continuation of the monthly installments if
they have already commenced) for the balance of months remaining
in the Payout Period, or (ii) the Executive's Beneficiary may
request to receive the unpaid balance of the Executive's
Retirement Income Trust Fund in a lump sum payment. If a lump sum
payment is requested by the Beneficiary, payment of the balance
of the Retirement Income Trust Fund in such lump sum form shall
be made only if the Executive's Beneficiary (i) obtains approval
from the trustee of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor Trust and
(ii) notifies the Administrator in writing of such election
within ninety (90) days of the Executive's death. Such lump sum
payment, if approved by the trustee, shall be made within thirty
(30) days of such trustee approval.
The Executive's Accrued Benefit Account (if applicable), measured
as of the Executive's Benefit Age, shall be annuitized (using the
Interest Factor) into monthly installments and shall be payable
for the Payout Period. Such benefit payments shall commence on
the Executive's Benefit Eligibility Date. In the event the
Executive dies at any time after attaining his Benefit Age, but
prior to commencement or completion of all the payments due and
owing hereunder, (i) the Bank shall pay to the Executive's
Beneficiary the same monthly installments (or a continuation of
such monthly installments if they have already commenced) for the
balance of months remaining in the Payout Period, or (ii) the
Executive's Beneficiary may request to receive the remainder of
any unpaid benefit payments in a lump sum payment. If a lump sum
payment is requested by the Beneficiary, the amount of such lump
sum payment shall be equal to the unpaid balance of the
Executive's Accrued Benefit Account. Payment in such lump sum
form shall be made only if the Executive's Beneficiary (i)
obtains Board of Director approval, and (ii) notifies the
Administrator in writing of such
20
election within ninety (90) days of the Executive's death. Such
lump sum payment, if approved by the Board of Directors, shall be
made within thirty (30) days Of Such Board of Director approval,
(2) Executive Dies Prior to Benefit Age
-----------------------------------
If (i) after such termination, the Executive dies prior to
attaining his Benefit Age, and (ii) the Executive has not made a
Timely Election to receive a lump sum benefit, this Subsection
5.1(a)(2) shall be controlling with respect to retirement
benefits.
The Executive's Beneficiary shall be entitled to receive benefits
in accordance with this Subsection 5.1(a)(2). The Retirement
Income Trust Fund, measured as of the date of the Executive's
death, shall be annuitized (using the Interest Factor) into
monthly installments and shall be payable for the Payout Period.
Such benefit payments shall commence within thirty (30) days of
the date the Administrator receives notice of the Executive's
death. Should Retirement Income Trust Fund assets actually earn a
rate of return, following the date such balance is annuitized,
which is less than the rate of return used to annuitize the
Retirement Income Trust Fund, no additional contributions to the
Retirement Income Trust Fund shall be required by the Bank in
order to fund the final benefit payment(s) and make up for any
shortage attributable to the less-than-expected rate of return.
Should Retirement Income Trust Fund assets actually earn a rate
of return, following the date such balance is annuitized, which
is greater than the rate of return used to annuitize the
Retirement Income Trust Fund as of the date of the Executive's
death, the final benefit payment to the Executive's Beneficiary
shall distribute the excess amounts attributable to the greater-
than-expected rate of return. The Executive's Beneficiary may
request to receive the unpaid balance of the Executive's
21
Retirement Income Trust Fund in the form of a lump sum payment.
If a lump sum payment is requested by the Beneficiary, payment of
the balance of the Retirement Income Trust Fund in such lump sum
form shall be made only if the Executive's Beneficiary (i)
obtains approval from the trustee of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Grantor Trust and (ii) notifies the Administrator in writing of
such election within ninety (90) days of the Executive's death.
Such Lump Sum payment, if approved by the trustee, shall be made
within thirty (30) days of such trustee approval.
The Executive's Accrued Benefit Account (if applicable), measured
as of the date of the Executive's death, shall be annuitized
(using the Interest Factor) into monthly installments and shall
be payable for the Payout Period. Such payments shall commence
within thirty (30) days of the date the Administrator receives
notice of the Executive's death. The Executive's Beneficiary may
request to receive the unpaid balance of the Executive's Accrued
Benefit Account in the form of a lump sum payment. If a lump sum
payment is requested by the Beneficiary, payment of the balance
of the Accrued Benefit Account in such lump sum form shall be
made only if the Executive's Beneficiary (i) obtains Board of
Director approval, and (ii) notifies the Administrator in writing
of such election within ninety (90) days of the Executive's
death. Such lump sum payment, if approved by the Board of
Directors, shall be made within thirty (30) days of such Board of
Director approval.
(b) Alternative Payout Option.
-------------------------
(1) Executive Lives Until Benefit Age
---------------------------------
If (i) after such termination, the Executive lives until
attaining his Benefit Age, and (ii) the Executive has made a
Timely Election to receive a lump
22
sum benefit, this Subsection 5.1(b)(1) shall be controlling with
respect to retirement benefits.
The balance of the Retirement Income Trust Fund, measured as of
the Executive's Benefit Age, shall be paid to the Executive in a
lump sum on his Benefit Eligibility Date. In the event the
Executive dies after becoming eligible for such payment (upon
attainment of his Benefit Age), but before the actual payment is
made, his Beneficiary shall be entitled to receive the lump sum
benefit in accordance with this Subsection 5.1(b)(1) within
thirty (30) days of the date the Administrator receives notice of
the Executive's death.
The balance of the Executive's Accrued Benefit Account (if
applicable), measured as of the Executive's Benefit Age, shall be
paid to the Executive in a lump sum on his Benefit Eligibility
Date. In the event the Executive dies after becoming eligible for
such payment (upon attainment of his Benefit Age), but before the
actual payment is made, his Beneficiary shall be entitled to
receive the lump sum benefit in accordance with this Subsection
5.1(b)(1) within thirty (30) days of the date the Administrator
receives notice of the Executive's death.
(2) Executive Dies Prior to Benefit Age
-----------------------------------
If (i) after such termination, the Executive dies prior to
attaining his Benefit Age, and (ii) the Executive has made a
Timely Election to receive a lump sum benefit, this Subsection
5.1(b)(2) shall be controlling with respect to pre-retirement
death benefits.
The balance of the Retirement Income Trust Fund, measured as of
the date of the Executive's death, shall be paid to the
Executive's Beneficiary
23
within thirty (30) days of the date the Administrator receives
notice of the Executive's death.
The balance of the Executive's Accrued Benefit Account (if
applicable), measured as of the date of the Executive's death,
shall be paid to the Executive's Beneficiary within thirty (30)
days of the date the Administrator receives notice of the
Executive's death.
5.2 Termination For Cause.
---------------------
If the Executive is Terminated for Cause, all benefits under this
Agreement, other than those which can be paid from previous Contributions
to the Retirement Income Trust Fund (and earnings on such Contributions),
shall be forfeited. Furthermore, no further Contributions or Phantom
Contributions, as applicable, shall be required of the Bank for the year in
which such Termination for Cause occurs (if not yet made). The Executive
shall be entitled to receive a benefit in accordance with this Subsection
5.2.
The balance of the Executive's Retirement Income Trust Fund shall be paid
to the Executive in a lump sum on his Benefit Eligibility Date. In the
event the Executive dies prior to his Benefit Eligibility Date, his
Beneficiary shall be entitled to receive the balance of the Executive's
Retirement Income Trust Fund in a lump sum within thirty (30) days of the
date the Administrator receives notice of the Executive's death.
SECTION VI
OTHER BENEFITS
--------------
6.1 (a) Disability Benefit.
------------------
If the Executive's service is terminated prior to Benefit Age due to a
disability which meets the criteria set forth below, the Executive may
request to receive the
24
Disability Benefit in lieu of the retirement benefit(s) available
pursuant to Section 5.1 (which is (are) not available prior to the
Executive's Benefit Eligibility Date).
Notwithstanding any other provision hereof, if requested by the
Executive and approved by the Board of Directors, the Executive shall
receive a lump sum Disability Benefit hereunder, in any case in which
it is determined by a duly licensed independent physician selected by
the Bank, that the Executive is no longer able, properly and
satisfactorily, to perform his regular duties as an Executive, because
of ill health, accident, disability or general inability due to age.
The lump sum benefit(s) to which the Executive is entitled shall
include: (i) the balance of the Retirement Income Trust Fund, plus
(ii) the balance of the Accrued Benefit Account (if applicable), both
measured as of the date of the disability determination. The
benefit(s) shall be paid within thirty (30) days following the date of
the Executive's request for such benefit. In the event the Executive
dies after becoming eligible for such payment(s) but before the actual
payment(s) is (are) made, his Beneficiary shall be entitled to receive
the benefit(s) provided for in this Subsection 6.1(a) within thirty
(30) days of the date the Administrator receives notice of the
Executive's death.
(b) Disability Benefit - Supplemental.
---------------------------------
If Board of Director approval is obtained within thirty (30) days of
the Executive's death, the Bank shall make a direct, lump sum payment
to the Executive's Beneficiary in an amount equal to the following:
the sum of all Contributions (or Phantom Contributions) set forth in
Exhibit A, but not required pursuant to Subsection 2.1(b) (or 2.1(c))
due to the disability-related termination. Such lump sum payment, if
approved by the Board of Directors, shall be payable within thirty
(30) days of such Board of Director approval.
25
6.2 Additional Death Benefit - Burial Expense. Upon the Executive's death, the
-----------------------------------------
Executive's Beneficiary shall also be entitled to receive a one-time lump
sum death benefit in the amount of Ten Thousand Dollars ($10,000.00). This
benefit shall be paid directly from the Bank to the Beneficiary and shall
be provided specifically for the purpose of providing payment for burial
and/or funeral expenses of the Executive. Such death benefit shall be
payable within thirty (30) days of the date the Administrator receives
notice of the Executive's death. The Executive's Beneficiary shall not be
entitled to such benefit if the Executive is Terminated for Cause prior to
death.
SECTION VII
NON-COMPETITION
---------------
7.1 Non-Competition.
---------------
In consideration of the agreements of the Bank contained herein and of the
payments to be made by the Bank pursuant hereto, the Executive hereby
agrees that, for as long as he remains employed by the Bank, he will devote
substantially all of his time, skill, diligence and attention to the
business of the Bank, and 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. The Executive further agrees that following his
employment with the Bank and continuing through the Payout Period 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 Bank, unless the Executive has
the express written consent of the Board of Directors of the Bank.
7.2 Breach of Non-Competition Clause.
--------------------------------
(a) During Employment.
-----------------
In the event the Executive breaches Subsection 7.1 while employed at
the Bank, all further Contributions to the Retirement Income Trust
Fund (or Phantom
26
Contributions to the Accrued Benefit Account) shall immediately cease,
and all benefits under this Agreement, other than those which can be
paid from previous Contributions to the Retirement Income Trust Fund
(and earnings on such Contributions), shall be forfeited. If,
following such breach, the Executive lives until attaining his Benefit
Age, he shall be entitled to receive a benefit from the Retirement
Income Trust Fund equal to the balance of the Retirement Income Trust
Fund, measured as of the Executive's Benefit Age, in a lump sum
payable on his Benefit Eligibility Date. In the event the Executive
dies after attaining his Benefit Age but before actual payment is
made, his Beneficiary shall be entitled to receive the lump sum
benefit payable within thirty (30) days of the date of the
Administrator receives notice of the Executive's death. If, following
such breach, the Executive dies prior to attaining his Benefit Age,
his Beneficiary shall be entitled to receive a benefit from the
Retirement Income Trust Fund equal to the balance of the Retirement
Income Trust Fund, measured as of the date of the Executive's death,
payable in a lump sum within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
(b) Termination of Employment Following Breach.
------------------------------------------
In the event (i) any breach by the Executive of the agreements and
covenants described in Subsection 7.1 occurs, and (ii) the Executive's
employment with the Bank is terminated due to such breach, such
termination shall be deemed to be for Cause and the benefits payable
to the Executive shall be paid in accordance with Subsection 5.2 of
this Agreement.
(c) Breach Following Executive's Termination of Employment.
------------------------------------------------------
In the event the Executive breaches Subsection 7.1 following the
Executive's termination of employment with the Bank, all benefits
under this Agreement, other than those which can be paid from previous
Contributions to the Retirement Income Trust Fund shall be forfeited,
regardless of whether the Executive is
27
receiving benefits at such time. If the Executive has attained his
Benefit Age and is receiving a benefit at the time of such breach, his
remaining balance in the Retirement Income Trust Fund shall be paid to
him in a lump sum within thirty (30) days of the date the Bank has
received notice of such breach (or in the event of his death prior to
payment of such lump sum, to his Beneficiary). If the Executive has
not attained his Benefit Age, and following such breach, the Executive
lives until his Benefit Age, he (or his Beneficiary, in the event of
his death prior to payment of his benefit) shall receive a benefit
payable in a lump sum from the Retirement Income Trust Fund in the
same manner as set forth above in Subsection 7.2(a).
SECTION VIII
BENEFICIARY DESIGNATION
-----------------------
The Executive shall make an initial designation of primary and secondary
Beneficiaries upon execution of this Agreement and shall have the right to
change such designation, at any subsequent time, by submitting to (i) the
Administrator, and (ii) the trustee of the Retirement Income Trust Fund, in
---
substantially the form attached as Exhibit B to this Agreement, a written
designation of primary and secondary Beneficiaries. Any Beneficiary designation
made subsequent to execution of this Agreement shall become effective only when
receipt thereof is acknowledged in writing by the Administrator.
SECTION IX
EXECUTIVE'S RIGHT TO ASSETS
---------------------------
The rights of the Executive, any Beneficiary, or any other person claiming
through the Executive under this Agreement, shall be solely those of an
unsecured general creditor of the Bank, unless this Agreement provides
otherwise. The Executive, the Beneficiary, or any other person claiming through
the Executive, shall only have the right to receive from the Bank those payments
so specified under
28
this Agreement. The Executive 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 Agreement. Any asset used or
acquired by the Bank in connection with the liabilities it has assumed under
this Agreement, unless expressly provided herein, shall not be deemed to be held
under any trust for the benefit of the Executive 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 X
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 Agreement, unless this
Agreement provides otherwise. Except as otherwise provided for in this
Agreement, the Executive, 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 Agreement 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 Executive 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 upon the life of the Executive, then the Executive shall assist
the Bank by freely submitting to a physical examination and by supplying such
additional information necessary to obtain such insurance or annuities.
29
SECTION XI
ACT PROVISIONS
--------------
11.1 Named Fiduciary and Administrator. The Bank shall be the Named Fiduciary
---------------------------------
and Administrator (the "Administrator") of this Agreement. As
Administrator, the Bank shall be responsible for the management, control
and administration of the Agreement as established herein. The
Administrator may delegate to others certain aspects of the management and
operational responsibilities of the Agreement, including the employment of
advisors and the delegation of ministerial duties to qualified individuals.
11.2 Claims Procedure and Arbitration. In the event that benefits under this
--------------------------------
Agreement are not paid to the Executive (or to his Beneficiary in the case
of the Executive's death) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to the
Administrator within sixty (60) days from the date payments are refused.
The Administrator shall review the written claim and, if the claim is
denied, in whole or in part, it shall provide in writing, within ninety
(90) days of receipt of such claim, its specific reasons for such denial,
reference to the provisions of this Agreement upon which the denial is
based, and any additional material or information necessary to perfect the
claim. Such writing by the Administrator 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 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 Agreement upon which the
decision is based.
30
If claimants continue to dispute the benefit denial based upon completed
performance of this Agreement or the meaning and effect of the terms and
conditions thereof, then claimants may submit the dispute to a Board of
Arbitration for final arbitration. Said Board of Arbitration shall consist
of one member selected by the claimant, one member selected by the Bank,
and the third member selected by the first two members. The Board of
Arbitration shall operate under any generally recognized set of arbitration
rules. The parties hereto agree that they, their heirs, personal
representatives, successors and assigns shall be bound by the decision of
such Board of Arbitration with respect to any controversy properly
submitted to it for determination.
SECTION XII
MISCELLANEOUS
-------------
12.1 No Effect on Employment Rights. Nothing contained herein will confer upon
------------------------------
the Executive the right to be retained in the service of the Bank nor limit
the right of the Bank to discharge or otherwise deal with the Executive
without regard to the existence of the Agreement. Pursuant to 12 C.F.R.
(S)563.39(b), the following conditions shall apply to this Agreement:
(1) The Bank's Board of Directors may terminate the Executive at any
time, but any termination by the Bank's Board of Directors other
than termination for Cause shall not prejudice the Executive's
vested right to compensation or other benefits tinder the contract.
As provided in Subsection 5.2, the Executive shall have no right to
receive additional compensation or other benefits, other than those
provided for in Subsection 5.2, after termination for Cause.
(2) If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the Federal Deposit
Insurance Act
31
(12 U.S.C. (S)1818(e)(3) and (g)(1)) the Bank's obligations under
the contract shall be suspended (except vested rights) as of the
date of termination of service unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay the Executive all or part of the
compensation withheld while its contract obligations were suspended
and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.
(3) If the Executive is terminated and/or permanently prohibited from
participating in the conduct of the Bank's affairs by au order
issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. (S)1818(e)(4) or (g)(1)), all non-vested
obligations of the Bank under the contract shall terminate as of
the effective date of the order,
(4) If the Bank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), all non-vested obligations under
the contract shall terminate as of the date of default.
(5) All non-vested obligations under the contract shall be terminated,
except to the extent determined that continuation of the contract
is necessary for the continued operation of the Bank:
(i) by the Director [of the Federal Deposit Insurance Corporation
or the Resolution Trust Corporation] or his designee at the
time the Federal Deposit Insurance Corporation or the
Resolution Trust Corporation enters into an agreement to
provide assistance to or on behalf of the Bank under the
authority contained in (S) 13(c) of the Federal Deposit
Insurance Act; or
32
(ii) by the Director [of the Federal Deposit Insurance Corporation
or the Resolution Trust Corporation] or his designee, at the
time the Director or his designee approves a supervisory
merger to resolve problems related to operation of the Bank or
when the Bank is determined by the Director to be in an unsafe
or unsound condition.
Any rights of the parties that have already vested, (i.e., the balance of
the Executive's Retirement Income Trust Fund and the balance of the
Executive's Accrued Benefit Account, if applicable), however, shall not be
affected by such action.
12.2 State Law. The Agreement 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.
12.3 Severability. In the event that any of the provisions of this Agreement 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.
12.4 Incapacity of Recipient. In the event the Executive is declared incompetent
-----------------------
and a conservator or other person legally charged with the care of his
person or Estate is appointed, any benefits tinder the Agreement to which
such Executive is entitled shall be paid to such conservator or other
person legally charged with the care of his person or Estate.
12.5 Unclaimed Benefit. The Executive 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 Executive is not made known to the Bank as of the date upon
which any payment of any benefits from the Accrued Benefit Account
33
may first be made, the Bank shall delay payment of the Executive's benefit
payment(s) until the location of the Executive is made known to the Bank;
however, the Bank shall only be obligated to hold such benefit payment(s)
for the Executive until the expiration of thirty-six (36) months. Upon
expiration of the thirty-six (36) month period, the Bank may discharge its
obligation by payment to the Executive's Beneficiary. If the location of
the Executive'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
Executive's Estate. If there is no Estate in existence at such time or if
such fact cannot be determined by the Bank, the Executive and his
Beneficiary(ies) shall thereupon forfeit any rights to the balance, if any,
of the Executive's Accrued Benefit Account provided for such Executive
and/or Beneficiary under this Agreement.
12.6 Limitations on Liability. Notwithstanding any of the preceding provisions
------------------------
of the Agreement, 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
Executive or any other person for any claim, loss, liability or expense
incurred in connection with the Agreement.
12.7 Gender. Whenever in this Agreement 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.
12.8 Effect on Other Corporate Benefit Agreements. Nothing contained in this
--------------------------------------------
Agreement shall affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension, profit sharing, group,
bonus or other supplemental compensation or fringe benefit agreement
constituting a part of the Bank's existing or future compensation
structure.
12.9 Suicide. Notwithstanding anything to the contrary in this Agreement, if the
-------
Executive's death results from Suicide, whether sane or insane, within
twenty-six (26) months after execution
34
of this Agreement, all further Contributions to the Retirement Income
Trust Fund (or Phantom Contributions recorded in the Accrued Benefit
Account) shall thereupon cease, and no Contribution (or Phantom
Contribution) shall be made by the Bank to the Retirement Income Trust
Fund (or recorded in the Accrued Benefit Account) in the year such death
resulting from suicide occurs (if not yet made). All benefits other than
those available from previous Contributions to the Retirement Income Trust
Fund under this Agreement shall be forfeited, and this Agreement shall
become null and void. The balance of the Retirement Income Trust Fund,
measured as of the Executive's date of death, shall be paid to the
Beneficiary within thirty (30) days of the date the Administrator receives
notice of the Executive's death.
12.10 Inurement. This Agreement shall be binding upon and shall inure to
---------
the benefit of the Bank, its successors and assigns, and the Executive,
his successors, heirs, executors, administrators, and Beneficiaries.
12.11 Headings. Headings and sub-headings in this Agreement are inserted
--------
for reference and convenience only and shall not be deemed a part of this
Agreement.
SECTION XIII
AMENDMENT/PLAN TERMINATION
--------------------------
13.1 Amendment or Plan Termination. The Bank intends this Agreement to be
-----------------------------
permanent, but reserves the right to amend or terminate the Agreement
when, in the sole opinion of the Bank, such amendment or termination is
advisable. However, any termination of the Agreement which is done in
anticipation of or pursuant to a "Change in Control", as defined in
Subsection 1.9, shall be deemed to trigger Subsections 5.1 and 2.1(b)(3)
(or 2.1(c)(3), as applicable) of the Agreement, and benefit(s) shall be
paid from the Retirement Income Trust Fund (and Accrued Benefit Account,
if applicable) in accordance with such Subsections. Any amendment or
termination of the Agreement shall be made pursuant to a resolution of
35
the Board of Directors of the Bank and shall be effective as of the date of
such resolution. No amendment or termination of the Agreement shall
directly or indirectly), deprive the Executive of all or any portion of the
Executive's Retirement Income Trust Fund (and Accrued Benefit Account, if
applicable) as of the effective date of the resolution amending or
terminating the Agreement.
13.2 Executive's Right to Payment Following Plan Termination. In the event of a
-------------------------------------------------------
termination of the Agreement, the Executive shall be entitled to the
balance, if any, of his Retirement Income Trust Fund (and Accrued Benefit
Account, if applicable), measured as of the date of plan termination.
However, if such termination is done in anticipation of or pursuant to a
"Change in Control," such balance(s) shall be measured as of the date the
lump sum Contribution (or Phantom Contribution) is made (or recorded)
pursuant to Subsection 2.1(b)(3) (or 2.1(c)(3)). Payment of the balance(s)
of the Executive's Retirement Income Trust Fund (and Accrued Benefit
Account, if applicable) shall not be dependent upon his continuation of
employment with the Bank following the termination date of the Agreement.
Payment of the balance(s) of the Executive's Retirement Income Trust Fund
(and Accrued Benefit account, if applicable) shall be made in a lump sum
within thirty (30) days of the date of termination of the Agreement.
SECTION XIV
EXECUTION
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14.1 This Agreement and the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor Trust Agreement set
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 Agreement and the ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ Grantor Trust Agreement.
36
14.2 This Agreement 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
37
IN WITNESS WHEREOF, the Bank and the Executive have caused this Agreement
to be executed on the day and date first above written.
WEST ESSEX BANK, F.S.B.:
ATTEST:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Executive Vice President
-------------------------- ------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Secretary (Title)
WITNESS: EXECUTIVE
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------- ------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
38
CONDITIONS, ASSUMPTIONS,
AND
SCHEDULE OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
1. Interest Factor - for purposes of:
a. the Accrued Benefit Account - shall be six percent (6%) per annum,
compounded monthly.
b. the Retirement Income Trust Fund - shall be five and one-half percent
(5.5%) per annum, compounded monthly, provided, however, for purposes
of annuitizing the balance of the Retirement Income Trust Fund over
the Payout Period, the trustee of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Grantor
Trust may exercise discretion in selecting a rate other than five and
one-half percent (5.5%) per annum for such purpose if another rate is
more reasonable given the nature of the investments contained in the
Retirement Income Trust Fund and the expected return associated with
the investments.
2. The amount of the annual Contributions (or Phantom Contributions) to the
Retirement Income Trust Fund (or Accrued Benefit Account) has been based on
the annual incremental accounting accruals which would be required of the
Bank until the earlier of the Executive's death or Benefit Age, (i)
pursuant to APB Opinion No. 12, as amended by FAS 106 and (ii) assuming a
discount rate equal to six percent (6%) per annum, in order to provide the
unfunded, non-qualified Supplemental Retirement Income Benefit.
3. Supplemental Retirement Income Benefit means an annual amount equal to
Sixty-Six Thousand Three Hundred Forty-Eight Dollars ($66,348.00).
The definition of Supplemental Retirement Income Benefit has been
incorporated into the Agreement for the sole purpose of establishing the
amount of annual Contributions (or Phantom Contributions) to the Retirement
Income Trust Fund (or Accrued Benefit Account). The amount of any actual
retirement, pre-retirement, or disability benefit payable pursuant to the
Agreement will be a function of (i) the amount and timing of Contributions
(or Phantom Contributions) to the Retirement Income Trust Fund (or Accrued
Benefit Account) and (ii) the actual investment experience of such
Contributions (or the monthly compounding rate of Phantom Contributions).
Exhibit A
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
SCHEDULE OF
GROSS "CONTRIBUTIONS"
(or "PHANTOM CONTRIBUTIONS")
Establishment $ 78,044.00
First Plan Year $ 55,896.00
Second Plan Year $ 61,988.00
Third Plan Year $ 68,638.00
Fourth Plan Year $ 75,887.00
Fifth Plan Year $ 83,785.00
Sixth Plan Year $ 92,385.00
Seventh Plan Year $101,742.00
Eighth Plan Year $ 87,872.00
Exhibit B
RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
BENEFICIARY DESIGNATION
The Executive, under the terms of the Restated Executive Supplemental
Retirement Income Agreement executed by the Bank of Caldwell, New Jersey, dated
the 22nd day of December, 1995 hereby designates the following Beneficiary(ies)
to receive any guaranteed payments or death benefits under such Agreement,
following his death:
PRIMARY BENEFICIARY: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Wife
SECONDARY BENEFICIARY: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Daughter
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Son
or if deceased their issue, if any, per Stirpes
This Beneficiary Designation hereby revokes any prior Beneficiary
Designation which may have been in effect.
Such Beneficiary Designation is revocable.
DATE: December 22, 1995
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------- ------------------------
(WITNESS) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
EXECUTIVE
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
(WITNESS)