EXHIBIT 10.6
SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
FOR
▇▇▇▇▇▇ ▇▇▇▇▇▇
SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
FOR ▇▇▇▇▇▇ ▇▇▇▇▇▇
This Supplemental Retirement Income Agreement (the "Agreement"),
effective as of the 1st day of January, 1998, formalizes the understanding by
and between POCAHONTAS FEDERAL SAVINGS AND LOAN ASSOCIATION (the "Bank"), a
federally chartered savings association, and ▇▇▇▇▇▇ ▇▇▇▇▇▇, hereinafter
referred to as "Participant".
W I T N E S S E T H :
WHEREAS, the Participant is employed by the Bank as Chief Financial
Officer; and
WHEREAS, the Bank recognizes the valuable services heretofore performed
by the Participant and wishes to encourage the Participant's continued
employment; and
WHEREAS, the Participant 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 or other termination of employment and wishes to
provide his beneficiary with benefits from and after death; and
WHEREAS, the Bank and the Participant wish to provide the terms and
conditions upon which the Bank shall pay such additional compensation to the
Participant after retirement or other termination of employment and/or death
benefits to his beneficiary after death; and
WHEREAS, the Bank has adopted this 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 Participant agree as follows:
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SECTION I
DEFINITIONS
When used herein, the following words and phrases shall have the meanings
below unless the context clearly indicates otherwise:
1.1 "Accrued Benefit Account" shall be represented by the bookkeeping entries
required to record the Participant'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
Participant or any Beneficiary.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.3 "Bank" means POCAHONTAS FEDERAL SAVINGS AND LOAN ASSOCIATION 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
Participant's benefits are payable. If no Beneficiary is so designated,
then the Participant's Spouse, if living, will be deemed the Beneficiary.
If the Participant's Spouse is not living, then the Children of the
Participant will be deemed the Beneficiaries and will take on a per
stirpes basis. If there are no Children, then the Estate of the
Participant will be deemed the Beneficiary.
1.5 "Benefit Age" means the later of: (i) Participant's sixtieth (60th)
birthday or (ii) the actual date the Participant's full-time employment
with the Bank terminates.
1.6 "Benefit Eligibility Date" means the date on which the Participant 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 Participant attains his Benefit Age.
1.7 "Benefit 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 two
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hundred forty (240) months. Should the Participant make a Timely
Election to receive a lump sum benefit payment, the Participant's Benefit
Period shall be deemed to be one (1) month.
1.8 "Board of Directors" means the board of directors of the Bank.
1.9 "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.
1.10 "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 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 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
stockholders of the Bank by someone other than the current
management of the Bank, seeking member stockholder
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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.
1.11 "Children" means all natural or adopted children of the Participant, and
issue of any predeceased child or children.
1.12 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.13 "Contribution(s)" means those annual contributions which the Bank is
required to make to the Retirement Income Trust Fund on behalf of the
Participant in accordance with Subsection 2.1(a) and in the amounts set
forth in Exhibit A of the Agreement.
1.14 (a) "Disability Benefit" means the benefit payable to the Participant
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 Participant's Beneficiary upon the Participant's death, in
accordance with Subsection 6.1(b).
1.15 "Effective Date" of this Agreement shall be January 1, 1998.
1.16 "Estate" means the estate of the Participant.
1.17 "Interest Factor" means monthly compounding, discounting or annuitizing,
as applicable, at a rate set forth in Exhibit A.
1.18 "Phantom Contributions" means those annual Contributions which the Bank
is no longer required to make on behalf of the Participant to the
Retirement Income Trust Fund. Rather, once the Participant has exercised
the withdrawal rights provided for in Subsection 2.2, the Bank shall be
required to record the annual amounts set forth in Exhibit A of the
Agreement in the Participant's Accrued Benefit Account, pursuant to
Subsection 2.1.
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1.19 "Plan Year" shall mean February 28th, 1996 through December 31, 1996, for
the first Plan Year. Thereafter, the term shall mean the twelve (12)
month period commencing January 1, 1997 and each consecutive twelve (12)
month period thereafter.
1.20 "Retirement Age" means the Participant's sixtieth (60th) birthday
provided; however, that the Participant's actual retirement from
full-time employment may occur at any later date mutually agreed upon by
the parties.
1.21 "Retirement Income Trust Fund" means the trust fund account established
by the Participant and into which annual Contributions will be made by
the Bank on behalf of the Participant pursuant to Subsection 2.1. The
contractual rights of the Bank and the Participant with respect to the
Retirement Income Trust Fund shall be outlined in a separate writing to
be known as the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Grantor Trust agreement.
1.22 "Spouse" means the individual to whom the Participant is legally married
at the time of the Participant's death.
1.23 "Supplemental Retirement Income Benefit" means an annual amount (before
taking into account federal and state income taxes), payable in monthly
installments throughout the Benefit Period. Such benefit is projected
pursuant to the Agreement for the purpose of determining the
Contributions to be made to the Retirement Income Trust Fund (or Phantom
Contributions to be recorded in the Accrued Benefit Account). 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 for which Contributions (or
Phantom Contributions) are being made (or recorded) is set forth in
Exhibit A.
1.24 "Timely Election" means the Participant 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
Participant's Benefit Eligibility Date; provided however, that if all
payments to the participant shall be made from the Retirement Income
Trust Fund, then a Timely Election is an election made at any time.
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SECTION II
BENEFITS - GENERALLY
2.1 (a) Retirement Income Trust Fund and Accrued Benefit Account. The
Participant shall establish the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Grantor Trust into which
the Bank shall be required to make annual Contributions on the
Participant's behalf, pursuant to Exhibit A and this Section II of the
Agreement. A trustee shall be selected by the Participant. The trustee
shall maintain an account, separate and distinct from the Participant'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 Participant, 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 Participant 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 Participant 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 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 thirty (30) days of establishment of such
trust, and (ii) within the first ten (10) days of the beginning of each
subsequent Plan Year, unless this Section expressly provides otherwise.
Phantom Contributions, if any, shall be recorded in the Accrued Benefit
Account within the first ten (10) 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 during the Benefit Period, until the balance of the
Accrued Benefit Account has been fully distributed. Interest on any and
all Phantom Contributions shall not commence until such Benefit Period
commences.
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(b) Withdrawal Rights Not Exercised.
(1) Contributions Made Annually
If the Participant does not exercise any withdrawal rights pursuant to
Subsection 2.2, the annual Contributions to the Retirement Income Trust
Fund included on Exhibit A 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 Participant's termination of employment.
(2) Termination Following a Change in Control
If the Participant does not exercise his withdrawal rights pursuant to
Subsection 2.2 and a Change in Control occurs at the Bank, followed at
any time by either (i) the Participant's involuntary termination of
employment, or (ii) the Participant's voluntary termination of employment
after: (A) a material change in the Participant's function, duties, or
responsibilities, which change would cause the Participant's position to
become one of lesser responsibility, importance, or scope from the
position the Participant held at the time of the Change in Control, (B) a
relocation of the Participant's principal place of employment by more
than thirty (30) miles from its location prior to the Change in Control,
or (C) a material reduction in the benefits and perquisites to the
Participant from those being provided at the time of the Change in
Control, the Contribution set forth below shall be required of the Bank
in addition to all previous Contributions. The Bank shall be required
to make a final Contribution to the Retirement Income Trust Fund within
ten (10) days of the Participant's termination of employment. The amount
of such final Contribution shall be equal to (i) $2,600,000 less (ii) the
sum of all prior Contributions to the Retirement Income Trust Fund.
(3) Termination For Cause
If the Participant (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 Plan Year in which such termination for Cause
occurs.
(4) Involuntary Termination of Employment.
If (i) the Participant does not exercise his withdrawal rights pursuant
to Subsection 2.2, and (ii) the Participant's employment with the Bank is
involuntarily terminated for any reason other than a termination related
to disability, termination for Cause or termination following a Change in
Control, the Contribution set forth below shall be required of the Bank.
The Bank shall be required to make
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a final Contribution to the Retirement Income Trust Fund within ten (10)
days of the Participant's involuntary termination of employment. The
amount of such final Contribution shall be equal to (i) $2,600,000 less
(ii)the sum of all prior Contributions to the Retirement Income Trust
Fund.
(5) Voluntary Termination of Employment.
If (i) the Participant does not exercise his withdrawal rights pursuant
to Subsection 2.2, and (ii) the Participant voluntary terminates
employment with the Bank, for any reason other than a voluntary
termination as described in Subsection 2.1(b)(2), the Participant shall
not be entitled to any further Contributions to the Retirement Income
Trust Fund subsequent to the date of such voluntary termination of
employment.
(6) Death Prior to Retirement Age.
(A) Death During Employment.
If the Participant (i) does not exercise any withdrawal rights pursuant
to Subsection 2.2, and (ii) dies while employed by the Bank (including
employment following a Change in Control), the Bank shall be required to
make a final Contribution to the Retirement Income Trust Fund within ten
(10) days of the Participant's death. The amount of such final
Contribution shall be equal to: (i) $2,600,000 less (ii) the sum of all
prior Contributions to the Retirement Income Trust Fund.
(B) Death Following Termination of Employment But Prior to Retirement Age.
If the Participant (i) does not exercise any withdrawal rights pursuant
to Subsection 2.2 and (ii) dies after termination of employment for
any reason other than Cause, but prior to Retirement Age, the Bank
shall be required to make a final Contribution to the Retirement Income
Trust Fund equal to $500,000.00.
(7) Termination Due to Disability.
If the Participant (i) does not exercise any withdrawal rights pursuant
to Subsection 2.2, and (ii) terminates employment due to disability, no
further Contributions shall be made on behalf of the Participant until
the Participant's death. Upon the Participant's death, the Bank shall be
required to make a final Contribution to the Retirement Income Trust
Fund. Such Contribution shall be made within ten (10) days of the date
on which the Bank learns of the participant's death. The amount of
such final Contribution shall be equal to: (i) $2,600,000 less (ii) the sum
of all prior Contributions to the Retirement Income Trust Fund.
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(c) Withdrawal Rights Exercised.
(1) Phantom Contributions Made Annually.
If the Participant 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 Participant's Accrued Benefit Account within ten
(10) days of the beginning of each Plan Year, commencing with the first
Plan Year following the Plan Year in which the Participant 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 Participant's termination of employment.
(2) Termination Following a Change in Control
If the Participant exercises his withdrawal rights pursuant to Subsection
2.2, Phantom Contributions shall commence in the Plan Year following the
Plan Year in which the Participant first exercises his
withdrawal rights. If a Change in Control occurs at the Bank, followed
by either (i) the participant's involuntary termination of employment or
(ii) the participant's voluntary termination of employment after: (A) a
material change in the Participant's function, duties, or
responsibilities, which change would cause the Participant's position to
become one of lesser responsibility, importance, or scope from the
position the Participant held at the time of the Change in Control, (B) a
relocation of the Participant's principal place of employment by more
than thirty (30) miles from its location prior to the Change in Control,
or (C) a material reduction in the benefits and perquisites to the
Participant from those being provided at the time of the Change in
Control, the Phantom Contribution set forth below shall be required of
the Bank in addition to all previous annual Phantom Contributions or
Contributions (as applicable). The Bank shall be required to record a
final lump sum Phantom Contribution in the Accrued Benefit Account within
ten (10) days of the Participant's termination of employment. The amount
of such final Phantom Contribution shall be equal to (i) $2,600,000 less
(ii) the sum of all prior Phantom Contributions recorded in the Accrued
Benefit Account and Contributions made to the Retirement Income Trust
Fund.
(3) Termination For Cause
If the Participant is terminated for Cause pursuant to Subsection 5.2,
the entire balance of the Participant's Accrued Benefit Account at the
time of such termination, which shall include any Phantom Contributions
which have been recorded plus accrued interest, shall be forfeited.
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(4) Involuntary Termination of Employment.
If (i) the Participant exercises his withdrawal rights pursuant to
Subsection 2.2, and (ii) the Participant's employment with the Bank is
involuntarily terminated for any reason other than a termination related
to disability, termination for Cause, or termination following a Change
in Control, the Phantom Contribution set forth below shall be required of
the Bank. The Bank shall be required to record a final Phantom
Contribution in the Accrued Benefit Account within ten (10) days of the
Participant's involuntary termination of employment. The amount of such
final Phantom Contribution shall be equal to (i) $2,600,000 less (ii) the
sum of all prior Phantom Contributions recorded in the Accrued Benefit
Account and Contributions made to the Retirement Income Trust Fund.
(5) Voluntary Termination of Employment. If (i) the Participant
exercises his withdrawal rights pursuant to Subsection 2.2, and (ii) the
Participant voluntarily terminates employment with the Bank, for any
reason other than a voluntary termination as described in
Subsection 2.1(c)(2), the Participant shall not be entitled to any
further Phantom Contributions subsequent to the date of such voluntary
termination of employment.
(6) Death Prior to Retirement Age.
(A) Death During Employment
If the Participant (i) exercises his withdrawal rights pursuant to
Subsection 2.2, and (ii) dies while employed by the Bank (including
employment following a Change in Control), the Bank shall be required to
record a final Phantom Contribution in the Participant's Accrued Benefit
Account. Phantom Contributions shall commence in the Plan Year
following the Plan Year in which the Participant exercises his withdrawal
rights and shall continue through the Plan Year in which the Participant
dies. The final Phantom Contribution shall be equal to: (i) $2,600,000
less (ii) the sum of the all prior Phantom Contributions recorded in the
Accrued Benefit Account and/or Contributions made to the Retirement
Income Trust Fund. Such final Phantom Contribution shall be recorded in
the Accrued Benefit Account within ten (10) days of the Participant's
death.
(B) Death Following Termination of Employment But Prior to Retirement Age.
If the Participant (i) exercises his withdrawal rights pursuant to
Subsection 2.2, and (ii) dies after termination of employment for any
reason other than Cause, but prior to Retirement Age, the Bank shall be
required to record a final Phantom Contribution in the Accrued Benefit
Account equal to
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$500,000.00. Such final Phantom Contribution shall be recorded in the
Accrued Benefit Account within ten (10) days of the date on which the
Bank learns of the Participant's death.
(7) Termination Due to Disability
If the Participant (i) exercises his withdrawal rights pursuant to
Subsection 2.2, and (ii) terminates employment due to disability, no
further Phantom Contributions shall be recorded on behalf of the
Participant until the Participant's death. Upon the participant's death,
the Bank shall be required to record a final Phantom Contribution in the
Accrued Benefit Account. The final Phantom Contribution shall be
recorded within ten (10) days of the date on which the Bank learns of the
Participant's death. The amount of such final Contribution shall be
equal to : (i) $2,600,000 less (ii) the sum of all prior Phantom
Contributions recorded in the Accrued Benefit Account and Contributions
made to the Retirement Income Trust Fund.
2.2 Withdrawals From Retirement Income Trust Fund.
Exercise of withdrawal rights by the Participant 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 Participant is entitled under Article III of the ▇▇▇▇▇▇ ▇▇▇▇▇▇
Grantor Trust agreement and shall exclude any distributions made by the
trustee of the Retirement Income Trust Fund to the Participant for
purposes of payment of income taxes in accordance with Subsection 2.1 of
this Agreement, or other trust expenses properly payable from the ▇▇▇▇▇▇
▇▇▇▇▇▇ Grantor Trust pursuant to the provisions of the trust document.
2.3 Benefits Payable From Retirement Income Trust Fund
Notwithstanding anything else to the contrary in this Agreement, in the
event that the trustee of the Retirement Income Trust Fund purchases a
life insurance policy with the Contributions to and, if applicable,
earnings of the Trust, and such life insurance policy is intended to
continue in force beyond the Benefit Period for the disability or
retirement benefits payable from the Retirement Income Trust Fund
pursuant to this Agreement, then the Trustee shall have discretion to
determine the portion of the cash value of such policy available for
purposes of annuitizing the Retirement Income Trust Fund to provide the
disability or retirement benefits payable under this Agreement, after
taking into
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consideration the amounts reasonably believed to be required in order to
maintain the cash value of such policy to continue such policy in effect
until the death of the Participant and payment of death benefits
thereunder.
SECTION III
RETIREMENT BENEFIT
3.1 (a) Normal form of payment.
If (i) the Participant is employed with the Bank at least until reaching
his Retirement Age, including employment with the Bank following a Change
in Control, and (ii) the Participant 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 Participant's
Benefit Age, shall be annuitized (using the Interest Factor) into monthly
installments and shall be payable for the Benefit Period. Such benefit
payments shall commence on the Participant'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 Participant (or his
Beneficiary) shall distribute the excess amounts attributable to the
greater-than-expected rate of return. In the event the Participant 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 Participant'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 Benefit Period, or (ii) the Participant's Beneficiary
may request to receive the unpaid balance of the Participant'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
Participant's Beneficiary (i) obtains approval from the trustee of the
▇▇▇▇▇▇ ▇▇▇▇▇▇ Grantor Trust and (ii) notifies the Administrator in
writing of such election. Such lump sum payment, if approved by the
trustee, shall be payable within thirty (30) days of such trustee
approval.
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The Participant's Accrued Benefit Account (if applicable), measured as of
the Participant's Benefit Age, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable for the Benefit
Period. Such benefit payments shall commence on the Participant's
Benefit Eligibility Date. In the event the Participant 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 Participant'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 Benefit Period, or (ii) the
Participant'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 Participant's Accrued Benefit
Account. Payment in such lump sum form shall be made only if the
Participant's Beneficiary (i) obtains Board of Director approval, and
(ii) notifies the Administrator in writing of such election. 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.
If (i) the Participant is employed with the Bank at least until reaching
his Retirement Age, including employment with the Bank following a Change
in Control, and (ii) the Participant 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
Participant's Benefit Age, shall be paid to the Participant in a lump sum
on his Benefit Eligibility Date. In the event the Participant 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 Participant's death.
The balance of the Participant's Accrued Benefit Account (if applicable),
measured as of the Participant's Benefit Age, shall be paid to the
Participant in a lump sum on his Benefit Eligibility Date. In the event
the Participant 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 Participant's death.
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SECTION IV
PRE-RETIREMENT DEATH BENEFIT
4.1 (a) Normal form of payment.
If (i) the Participant dies while employed by the Bank, including death
during employment following a Change in Control, and (ii) the Participant
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 Participant's Retirement Income Trust Fund, measured as of the later
of (i) the Participant'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 to the Participant's Beneficiary for the Benefit Period. Such
benefit payments shall commence within thirty (30) days of the date the
Administrator receives notice of the Participant's death, or if later,
within thirty (30) days after any final lump sum Contribution is made to
the Retirement Income Trust Fund in accordance with Subsection 2.1(b).
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 Participant's Beneficiary
shall distribute the excess amounts attributable to the
greater-than-expected rate of return. The Participant's Beneficiary may
request to receive the unpaid balance of the Participant'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
Participant's Beneficiary (i) obtains approval from the trustee of the
▇▇▇▇▇▇ ▇▇▇▇▇▇ Grantor Trust and (ii) notifies the Administrator in
writing of such election. Such lump sum payment, if approved by the
trustee, shall be made within thirty (30) days of such trustee approval.
The Participant's Accrued Benefit Account (if applicable), measured as of
the later of (i) the Participant's death or (ii) the date any final lump
sum Phantom Contribution is recorded in the Accrued Benefit Account
pursuant to Subsection 2.1(c), shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable to the
Participant's Beneficiary for the Benefit Period. Such
14
benefit payments shall commence within thirty (30) days of the date the
Administrator receives notice of the Participant's death, or if later,
within thirty (30) days after any final lump sum Phantom Contribution is
recorded in the Accrued Benefit Account in accordance with Subsection
2.1(c). The Participant'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 Participant's Accrued Benefit Account.
Payment in such lump sum form shall be made only if the Participant's
Beneficiary (i) obtains Board of Director approval, and (ii) notifies the
Administrator in writing of such election. Such lump sum payment, if
approved by the Board of Directors, shall be payable within thirty (30)
days of such Board of Director approval.
(b) Alternative payout option.
If (i) the Participant dies while employed by the Bank, including death
during employment following a Change in Control, and (ii) the Participant
has made a Timely Election to receive a lump sum benefit, this Subsection
4.1(b) shall be controlling with respect to pre-retirement death
benefits.
The balance of the Participant's Retirement Income Trust Fund, measured
as of the later of (i) the Participant's death, or (ii) the date any
final lump sum Contribution is made pursuant to Subsection 2.1(b), shall
be paid to the Participant's Beneficiary in a lump sum within thirty (30)
days of the date the Administrator receives notice of the Participant's
death.
The balance of the Participant's Accrued Benefit Account (if applicable),
measured as of the later of (i) the Participant's death, or (ii) the date
any final Phantom Contribution is recorded pursuant to Subsection 2.1(c),
shall be paid to the Participant's Beneficiary in a lump sum within
thirty (30) days of the date the Administrator receives notice of the
Participant's death.
SECTION V
BENEFIT(S) IN THE EVENT OF TERMINATION OF EMPLOYMENT
PRIOR TO RETIREMENT AGE
5.1 Voluntary or Involuntary Termination of Employment Other Than for Cause.
In the event the Participant's employment with the Bank is voluntarily
or involuntarily terminated prior to Retirement
15
Age, for any reason including a Change in Control, but excluding (i) the
Participant's pre-retirement death, which shall be covered in Section IV,
(ii) termination for Cause, which shall be covered in Subsection 5.2, or
(iii) termination due to disability, which shall be covered in Section
VI, the Participant (or his Beneficiary) shall be entitled to receive
benefits in accordance with this Subsection 5.1. Payments of benefits
pursuant to this 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) Participant Lives Until Benefit Age
If (i) after such termination, the Participant lives until attaining his
Benefit Age, and (ii) the Participant has not made a Timely Election to
receive a lump sum benefit, then payments made under this Subsection
5.1(a)(1) shall be made in the same manner as under Subsection 3.1(a).
(2) Participant Dies Prior to Benefit Age
If (i) after such termination, the Participant dies prior to attaining
his Benefit Age, and (ii) the Participant has not made a Timely Election
to receive a lump sum benefit, then payments made under this Subsection
5.1(a)(2) shall be made in the same time and manner as under Subsection
4.1(a).
(b) Alternative Payout Option.
(1) Participant Lives Until Benefit Age
If (i) after such termination, the Participant lives until attaining his
Benefit Age, and (ii) the Participant has made a Timely Election to
receive a lump 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
Participant's Benefit Age, shall be paid to the Participant in a lump sum
on his Benefit Eligibility Date. In the event the Participant 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 Participant's death.
The balance of the Participant's Accrued Benefit Account (if applicable),
measured as of the Participant's Benefit Age, shall be paid to the
Participant in a lump sum on his Benefit Eligibility Date. In the event
the Participant dies after becoming eligible for such payment (upon
attainment of his
16
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 Participant's death.
(2) Participant Dies Prior to Benefit Age
If (i) after such termination, the Participant dies prior to attaining
his Benefit Age, and (ii) the Participant has made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(b)(2) shall be
controlling with respect to retirement benefits.
The balance of the Retirement Income Trust Fund, measured as of the date
of the Participant's death, shall be paid to the Participant's
Beneficiary within thirty (30) days of the date the Administrator
receives notice of the Participant's death.
The balance of the Participant's Accrued Benefit Account (if applicable),
measured as of the date of the Participant's death, shall be paid to the
Participant's Beneficiary within thirty (30) days of the date the
Administrator receives notice of the Participant's death.
5.2 Termination For Cause.
If the Participant 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
Participant shall be entitled to receive a benefit in accordance with
this Subsection 5.2.
The balance of the Participant's Retirement Income Trust Fund shall be
paid to the Participant in a lump sum on his Benefit Eligibility Date.
In the event the Participant dies prior to his Benefit Eligibility Date,
his Beneficiary shall be entitled to receive the balance of the
Participant's Retirement Income Trust Fund in a lump sum within thirty
(30) days of the date the Administrator receives notice of the
Participant's death.
17
SECTION VI
OTHER BENEFITS
6.1 (a) Disability Benefit.
If the Participant's employment terminates prior to Retirement Age due to
a disability which meets the criteria set forth below, the Participant
shall be entitled to receive the Disability Benefit in lieu of the
retirement benefit(s) available pursuant to Section 5.1 (which is (are)
not available prior to the Participant's Benefit Eligibility Date).
Notwithstanding any other provision hereof, if requested by the
Participant and approved by the Board of Directors, the Participant 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 Participant is no longer able, properly and
satisfactorily, to perform his regular duties as an officer and director,
because of ill health, accident disability or general ability due to age.
The lump sum benefit(s) to which the Participant 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 Participant's
request for such benefit. In the event the Participant dies after
becoming eligible for such payment(s) but before the actual payment(s) is
(are) made, his Beneficiary shall be entitled to the benefit(s) provided
for in this Subsection 6.1(a) within thirty (30) days of the date the
Administrator receives notice of the Participant's death.
(b) Disability Benefit-Supplemental
Within thirty (30) days of the Participant's death, the Bank shall pay a
direct, lump sum payment to the Participant's Beneficiary equal to the
sum of all prior Contributions to the Retirement Income Trust Fund and/or
Phantom Contributions recorded in the Accrued Benefit Account, after
taking into consideration the final Contribution or Phantom Contribution
recorded pursuant to subsections 2(b)(7) and 2(c)(7). Such lump sum
payment, shall be payable within thirty (30) days of the date the
Administrator receives notice of the Participant's death.
6.2 Additional Death Benefit - Burial Expense. Upon the Participant's death,
the Participant's Beneficiary shall also be entitled to receive a
one-time lump sum death benefit in the amount of Fifteen Thousand Dollars
($15,000.00). 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
18
the Participant. Such death benefit shall be payable within thirty (30)
days from the date the Administrator receives notice of the Participant's
death. The Participant's Beneficiary shall not be entitled to such
benefit if the Participant 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 Participant
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 Participant further agrees
that following his employment with the Bank and continuing through the
Benefit 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 Participant has the prior 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 Participant breaches Subsection 7.1 while employed at
the Bank, all further Contributions to the Retirement Income Trust Fund
(or Phantom 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 Participant 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 Participant's Benefit Age, payable
in a lump sum on his Benefit Eligibility Date. In the event the
Participant 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 Participant's death. If, following
such breach, the Participant 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 Participant's death,
19
payable in a lump sum within thirty (30) days of the date the
Administrator receives notice of the Participant's death.
In the event (i) any breach by the Participant of the agreements and
covenants described in Subsection 7.1 occurs, and (ii) the Participant'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 Participant shall be paid in accordance with Subsection 5.2 of this
Agreement.
(b) Breach Following Termination of Employment.
In the event the Participant breaches Subsection 7.1 following the
Participant'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 Participant is receiving benefits at such time.
If the Participant 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 Participant has not attained his Benefit Age, and
following such breach, the Participant 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).
In the event of a termination related to a Change in Control as described
in Subsection 2.1(b)(2) (or 2.1(c)(2)), paragraph (b) of this Subsection
shall cease to be a condition to the performance by the Bank of its
obligations under this Agreement.
SECTION VIII
BENEFICIARY DESIGNATION
The Participant 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.
20
SECTION IX
PARTICIPANT'S RIGHT TO ASSETS
The rights of the Participant, any Beneficiary, or any other person
claiming through the Participant under this Agreement, shall be solely
those of an unsecured general creditor of the Bank, unless this Agreement
provides otherwise. The Participant, the Beneficiary, or any other
person claiming through the Participant, shall only have the right to
receive from the Bank those payments so specified under this Agreement.
The Participant 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
Participant 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 Participant, 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
Participant 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 Participant, then the Participant shall assist the Bank
by freely submitting to a physical examination and by supplying such
additional information necessary to obtain such insurance or annuities.
21
SECTION XI
ACT PROVISIONS
11.1 Named Fiduciary and Administrator. The Bank shall be the 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 Participant (or to his Beneficiary in the
case of the Participant'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.
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.
22
SECTION XII
MISCELLANEOUS
12.1 No Effect on Employment Rights. Nothing contained herein will confer
upon the Participant the right to be retained in the employ of the Bank
nor limit the right of the Bank to discharge or otherwise deal with the
Participant without regard to the existence of the Agreement. Pursuant
to 12 C.F.R. Section 563.39(b), the following conditions shall apply to
this Agreement:
(1) The Bank's Board of Directors may terminate the Participant at
any time, but any termination by the Bank's Board of Directors
other than termination for Cause shall not prejudice the
Participant's vested right to compensation or other benefits
under the contract. As provided in Subsection 5.2, the
Participant 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 Participant 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 (12 U.S.C. 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
employment unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Bank may in its
discretion (i) pay the Participant 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 Participant is terminated and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an
order issued under Section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 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.
23
(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 his designee at the time the Federal
Deposit Insurance Corporation enters into an agreement to
provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of the Federal
Deposit Insurance Act; or
(ii) by the Director of the Federal Deposit Insurance
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 Participant's Retirement Income Trust Fund and the balance of the
Participant'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 Arkansas, 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: (i) insofar as is reasonable, effect will
be given to the intent manifested in the provisions held invalid or
inoperative, and (ii) the validity and enforceability of the remaining
provisions will not be affected thereby.
12.4 Incapacity of Recipient. In the event the Participant is declared
incompetent and a conservator or other person legally charged with the
care of his person or Estate is appointed, any benefits under the
Agreement to which such Participant 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 Participant 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
24
of any person. If the location of the Participant is not made known to
the Bank as of the date upon which any payment of any benefits from the
Accrued Benefit Account may first be made, the Bank shall delay payment
of the Participant's benefit payment(s) until the location of the
Participant is made known to the Bank; however, the Bank shall only be
obligated to hold such benefit payment(s) for the Participant 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 Participant's Beneficiary. If the location of the Participant'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
Participant's Estate. If there is no Estate in existence at such time or
if such fact cannot be determined by the Bank, the Participant and his
Beneficiary(ies) shall thereupon forfeit any rights to the balance, if
any, of the Participant's Accrued Benefit Account provided for such
Participant 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 Participant 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 Participant 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 Participant's death results from suicide, whether sane or insane,
within twenty-six (26) months after execution 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
25
Retirement Income Trust Fund, measured as of the Participant's date of
death, shall be paid to the Beneficiary within thirty (30) days of the
date the Administrator receives notice of the Participant'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
Participant, 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.
12.12 Establishment of a Rabbi Trust. The Bank shall establish a rabbi
trust into which the Bank shall contribute assets which shall be
held therein, subject to the claims of the Bank's creditors in the
event of the Bank's "Insolvency" (as defined in such rabbi trust
agreement), until the contributed assets are paid to the Participant
and/or his Beneficiary in such manner and at such times as specified
in this Agreement. It is the intention of the Bank that the
contribution or contributions to the rabbi trust shall provide the
Bank with a source of funds to assist it in meeting the liabilities
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 following to a "Change in Control", as defined in
Subsection 1.9, shall be deemed to trigger Subsection 2.1(b)(2) (or
2.1(c)(2), as applicable) of the Agreement notwithstanding the
Participant's continued employment, and benefit(s) shall be paid from the
Retirement Income Trust Fund (and Accrued Benefit Account, if applicable)
in accordance with Subsection 13.2 below and with Subsections 2.1(b)(2)
(or 2.1(c)(2), as applicable). Any amendment or termination of the
Agreement shall be made pursuant to a resolution of 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 Participant of all or any portion of the
Participant's Retirement Income Trust Fund (and Accrued Benefit Account,
if applicable) as of the effective date of the resolution amending or
terminating the Agreement.
26
13.2 Participant's Right to Payment Following Plan Termination. In the event
of a termination of the Agreement, the Participant 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 final Contribution (or Phantom Contribution) is made (or
recorded) pursuant to Subsection 2.1(b)(2) (or 2.1(c)(2)). Payment of
the balance(s) of the Participant'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 Participant'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
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.
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.
27
IN WITNESS WHEREOF, the Bank and the Participant have caused this
Agreement to be executed on the day and date first above written.
POCAHONTAS FEDERAL SAVINGS AND LOAN
ASSOCIATION:
ATTEST:
By: _____________________________________
____________________________ _____________________________________
Secretary (Title)
WITNESS: PARTICIPANT:
____________________________ _________________________________________
28
CONDITIONS, ASSUMPTIONS,
AND
SCHEDULE OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
1. Interest Factor - for purposes of:
a. the Accrued Benefit Account - shall be equal to Six and One-Half
Percent (6 1/2%), compounded monthly.
b. the Retirement Income Trust Fund - shall be Four percent (4%) per
annum, compounded monthly, provided, however, that for purposes of
annuitizing the balance of the Retirement Income Trust Fund over the
Benefit Period, the trustee of the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Grantor Trust shall
exercise discretion in selecting the appropriate rate, 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 straight-line accounting accruals which would be required
of the Bank until the Participant's Retirement Age, assuming a discount
rate equal to the Interest Factor (for the Accrued Benefit Account), in
order to fully record the present value of the unfunded, non-qualified
Supplemental Retirement Income Benefit as of the Participant's Retirement
Age.
3. Supplemental Retirement Income Benefit means an actuarially determined
annual amount equal to Two Hundred Fourteen Thousand Two Hundred
Eighty-Six Dollars ($214,286) at age 60 if paid entirely from the Accrued
Benefit Account or One Hundred Fifty Thousand Dollars ($150,000) if paid
from the Retirement Income Trust Fund.
The Supplemental Retirement Income Benefit:
- the definition of Supplemental Retirement Income Benefit has been
incorporated into the Agreement for the sole purpose of actuarially
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
4. Schedule of Annual Gross Contributions/Phantom Contributions
Plan Year Amount
1998 $ 76,894
1999 $ 76,894
2000 $ 76,894
2001 $ 76,894
2002 $ 76,894
2003 $ 76,894
2004 $ 76,894
2005 $ 76,894
2006 $ 76,894
2007 $ 76,894
2008 $ 76,894
2009 $ 76,894
2010 $ 76,894
2011 $ 76,894
2012 $ 76,894
2013 $ 76,894
2014 $ 76,894
2015 $ 76,894
2016 $ 76,894
2017 $ 76,894
2018 $ 76,894
2019 $ 76,894
2020 $ 76,894
2021 $ 76,894
2022 $ 76,894
2023 $ 76,894
2024 $ 76,894
Exhibit A
SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
BENEFICIARY DESIGNATION
The Participant, under the terms of the Supplemental Retirement Income
Agreement executed by the Bank, dated the 1st day of January,1998, hereby
designates the following Beneficiary(ies) to receive any guaranteed payments
or death benefits under such Agreement, following his death:
PRIMARY BENEFICIARY:
SECONDARY BENEFICIARY:
This Beneficiary Designation hereby revokes any prior Beneficiary
Designation which may have been in effect.
Such Beneficiary Designation is revocable.
DATE: ______________________, 19____
___________________________________
______________________________
(WITNESS) PARTICIPANT
___________________________________
(WITNESS)
Exhibit B
SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
NOTICE OF ELECTION TO CHANGE FORM OF PAYMENT
TO: Bank
Attention:
I hereby give notice of my election to change the form of payment of my
Supplemental Retirement Income Benefit, as specified below. I understand that
such notice, in order to be effective, must be submitted in accordance with
the time requirements described in my Supplemental Retirement Income
Agreement.
/ / I hereby elect to change the form of payment of my benefits from
monthly installments throughout my Benefit Period to a lump sum
benefit payment.
/ / I hereby elect to change the form of payment of my benefits from a
lump sum benefit payment to monthly installments throughout my
Benefit Period. Such election hereby revokes my previous notice of
election to receive a lump sum form of benefit payments.
PARTICIPANT
Date
Acknowledged
By:
Title:
Date