UNION FEDERAL SAVINGS AND LOAN ASSOCIATION RECOGNITION AND RETENTION PLAN AND TRUST
Exhibit
10.3
UNION
FEDERAL SAVINGS AND LOAN ASSOCIATION
RECOGNITION
AND RETENTION PLAN AND TRUST
ARTICLE
I
ESTABLISHMENT
OF THE PLAN AND TRUST
1.01
Union Federal Savings and Loan Association hereby establishes the Recognition
and Retention Plan (the “Plan”) and Trust (the “Trust”) upon the terms and
conditions hereinafter stated in this Recognition and Retention Plan and
Trust
Agreement (the “Agreement”).
1.02
The
Trustee, which initially shall be Fifth Third Bank of Central Indiana, hereby
accepts this Trust and agrees to hold the Trust assets existing on the date
of
this Agreement and all additions and accretions thereto upon the terms and
conditions hereinafter stated.
ARTICLE
II
PURPOSE
OF THE PLAN
2.01
The
purpose of the Plan is to retain directors and executive officers in key
positions by providing such persons with a proprietary interest in the Holding
Company (as hereinafter defined) as compensation for their contributions
to the
Holding Company and to the Association and its Affiliates (as hereinafter
defined) and as an incentive to make such contributions and to promote the
Holding Company’s and the Association’s growth and profitability in the
future.
ARTICLE
III
DEFINITIONS
The
following words and phrases when used in this Plan with an initial capital
letter, unless the context clearly indicates otherwise, shall have the meanings
set forth below. Wherever appropriate, the masculine pronoun shall include
the
feminine pronoun and the singular shall include the plural.
3.01 “Affiliate”
means
the Holding Company and those subsidiaries or affiliates of the Holding Company
or the Association which, with the consent of the Board, agree to participate
in
this Plan.
3.02 “Association”
means
Union Federal Savings and Loan Association and its successors, whether in
mutual
or stock form.
3.03 “Beneficiary”
means
the person or persons designated by a Recipient to receive any benefits payable
under the Plan in the event of such Recipient’s death. Such person or persons
shall be designated in writing on forms provided for this purpose by the
Committee and may be changed from time to time by similar written notice
to the
Committee. In the absence of a written designation, the Beneficiary shall
be the
Recipient’s surviving spouse, if any, or, if none, his estate.
3.04 “Board”
means
the Board of Directors of the Association.
3.05 “Committee”
means
the Stock Compensation Committee of the Board of Directors of the Holding
Company. At all times during its administration of this Plan, the Committee
shall consist of two or more directors of the Holding Company, each of whom
shall be a “Non-Employee Director” within the meaning of the definition of that
term contained in Regulation 16b-3 (“Rule 16b-3”) promulgated under the
Securities Exchange Act of 1934, as amended (the “1934 Act”).
3.06 “Common
Stock”
means
shares of the common stock, without par value, of the Holding
Company.
3.07 “Conversion”shall
mean the conversion of the Association from the mutual to stock form of
organization and the simultaneous acquisition of the Association by the Holding
Company.
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3.08 “Director”
means a
member of the Board of Directors of the Association or the Holding
Company.
3.09 “Director
Emeritus”
shall
mean an honorary, non-voting member of the Board of Directors of the Association
or the Holding Company.
3.10 “Disability”
means
any physical or mental impairment which qualifies an Employee, Director or
Director Emeritus for disability benefits under the applicable long-term
disability plan maintained by the Association or an Affiliate, or, if no
such
plan applies, which would qualify such Employee, Director or Director Emeritus
for disability benefits under the long-term disability plan maintained by
the
Association, if such Employee, Director or Director Emeritus were covered
by
that Plan.
3.11 “Employee”
means
any person who is currently employed by the Association or an Affiliate,
including officers.
3.12 “Holding
Company”
shall
mean Union Community Bancorp.
3.13 “Outside
Director”
means a
member of the Board of Directors of the Association or the Holding Company,
who
is not also an Employee and who may be a Director or Director
Emeritus.
3.14 “Plan
Shares”
means
shares of Common Stock held in the Trust and issued or issuable to a Recipient
pursuant to the Plan.
3.15 “Plan
Share Award”
or
“Award”
means a
right granted under this Plan to earn Plan Shares.
3.16 “Plan
Share Reserve”
means
the shares of Common Stock held by the Trustee pursuant to Sections 5.03
and
5.04.
3.17 “Recipient”
means an
Employee or Outside Director who receives a Plan Share Award under the
Plan.
3.18 “Trustee”
means
that person(s) or entity nominated by the Committee and approved by the Board
pursuant to Sections 4.01 and 4.02 to hold legal title to the Plan assets
for
the purposes set forth herein.
ARTICLE
IV
ADMINISTRATION
OF THE PLAN
4.01
Role
of the Committee.
The Plan
shall be administered and interpreted by the Committee, which shall have
all of
the powers allocated to it in this and other Sections of the Plan. The
interpretation and construction by the Committee of any provisions of the
Plan
or of any Plan Share Award granted hereunder shall be final and binding.
The
Committee shall act by vote or written consent of a majority of its members.
Subject to the express provisions and limitations of the Plan, the Committee
may
adopt such rules, regulations and procedures as it deems appropriate for
the
conduct of its affairs. If permitted by applicable law, the Committee, with
the
consent of Recipients, may change the vesting schedule for Awards after the
date
of grant thereof. The Committee shall recommend to the Board one or more
persons
or entities to act as Trustee in accordance with the provisions of this Plan
and
Trust and the terms of Article VIII hereof.
4.02
Role
of the Board. The
members of the Committee and the Trustee shall be appointed or approved by,
and
will serve at the pleasure of, the Board of Directors of the Holding Company.
The Board of Directors of the Holding Company may in its discretion from
time to
time remove members from, or add members to, the Committee, and may remove,
replace or add Trustees.
4.03
Limitation
on Liability. Neither
a Director nor the Committee nor the Trustee shall be liable for any
determination made in good faith with respect to the Plan or any Plan Shares
or
Plan Share Awards granted under it. If a Director or the Committee or any
Trustee is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of anything done or not done by
him
in such capacity under or with respect to the Plan, the Association shall
indemnify such person against expenses (including attorneys’ fees), judgments,
fines and amounts paid in
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settlement
actually and reasonably incurred by him in connection with such action, suit
or
proceeding if he acted in good faith and in a manner he reasonably believed
to
be in the best interests of the Association and its Affiliates and, with
respect
to any criminal action or proceeding, if he had no reasonable cause to believe
his conduct was unlawful. The indemnification of officers and directors of
the
Association pursuant to this Section 4.03 shall be subject to 12 C.F.R. §
545.121.
ARTICLE
V
CONTRIBUTION;
PLAN SHARE RESERVE
5.01
Amount
and Timing of Contributions. The
Association shall be permitted to contribute to the Trust an amount sufficient
to purchase up to 4% of the shares of Common Stock issued by the Holding
Company
in connection with the Conversion. Such amounts shall be paid to the Trustee
no
later than the date required to purchase shares of Common Stock for Awards
made
under this Plan. No contributions by Employees or Outside Directors shall
be
permitted.
5.02
Initial
Investment. Any
amounts held by the Trust until such amounts are invested in accordance with
Section 5.03, shall be invested by the Trustee in such interest-bearing account
or accounts at the Association as the Trustee shall determine to be
appropriate.
5.03
Investment
of Trust Assets; Creation of Plan Share Reserve.
As soon
as practicable following the first shareholder meeting of the Holding Company
following the Conversion (“First Shareholder Meeting Date”), the Trustee shall
invest all of the Trust’s assets exclusively in the number of shares of Common
Stock, designated by the Association as subject to Awards made under the
Plan,
which may be purchased directly from the Holding Company, on the open market,
or
from any other source; provided,
however
that the
Trust shall not invest in an amount of Common Stock greater than 4.0% of
the
shares of the Common Stock sold in the Conversion, which shall constitute
the
“Plan Share Reserve” and provided,
further
that if
the Trustee is required to purchase such shares on the open market or from
the
Holding Company for an amount per share greater than the price per share
at
which shares were trading on the date the contributions therefor were made
to
the Trust, the Association shall have the discretion to reduce the number
of
shares to be awarded and purchased. The Trust may hold cash in interest-bearing
accounts pending investment in Common Stock for periods of not more than
one
year after deposit. The Trustee, in accordance with applicable rules and
regulations and Section 5.01 hereof, shall purchase shares of Common Stock
in
the open market and/or shall purchase authorized but unissued shares of the
Common Stock from the Holding Company sufficient to acquire the requisite
percentage of shares. Any earnings received or distributions paid with respect
to Common Stock held in the Plan Share Reserve shall be held in an
interest-bearing account. Any earnings received or distributions paid with
respect to Common Stock subject to a Plan Share Award shall be held in an
interest-bearing account on behalf of the individual Recipient.
5.04
Effect
of Allocations, Returns and Forfeitures Upon Plan Share Reserves.
Upon
the allocation of Plan Share Awards under Sections 6.02 and 6.03 after
acquisition by the Trustee of such shares, or the decision of the Committee
to
return Plan Shares to the Holding Company, the Plan Share Reserve shall be
reduced by the number of Plan Shares so allocated or returned. Any shares
subject to an Award which may not be earned because of a forfeiture by the
Recipient pursuant to Section 7.01 shall be returned (added) to the Plan
Share
Reserve.
ARTICLE
VI
ELIGIBILITY;
ALLOCATIONS
6.01
Eligibility.
Employees
and Outside Directors are eligible to receive Plan Share Awards provided
in
Section 6.02.
6.02
Allocations.
The
Committee may determine which of the Employees and Outside Directors referenced
in Section 6.01 above will be granted Plan Share Awards and the number of
Plan
Shares covered by each Award, including grants effective upon the First
Shareholder Meeting Date, provided,
however,
that
the number of Plan Shares covered by such Awards may not exceed the number
of
Plan Shares in the Plan Share Reserve immediately
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prior
to
the grant of such Awards, and provided
further,
that in
no event shall any Awards be made which will violate the Charter, Articles
of
Incorporation, Bylaws or Plan of Conversion of the Holding Company or the
Association or any applicable federal or state law or regulation and
provided
further
that
Awards may not be granted at any time in which the Association fails to meet
its
applicable minimum capital requirements. In the event Plan Shares are forfeited
for any reason and unless the Committee decides to return the Plan Shares
to the
Holding Company, the Committee may, from time to time, determine which of
the
Employees or Outside Directors referenced in Section 6.01 above will be granted
additional Plan Share Awards to be awarded from forfeited Plan Shares. In
selecting those Employees or Outside Directors to whom Plan Share Awards
will be
granted and the number of Plan Shares covered by such Awards, the Committee
shall consider the position and responsibilities of the eligible Employees
or
Outside Directors, the length and value of their services to the Association
and
its Affiliates, the compensation paid to such Employees or Outside Directors,
and any other factors the Committee may deem relevant.
6.03
Form
of Allocation. As
promptly as practicable after a determination is made pursuant to Section
6.02
that a Plan Share Award is to be made, the Committee shall notify the Recipient
in writing of the grant of the Award, the number of Plan Shares covered by
the
Award, and the terms upon which the Plan Shares subject to the Award may
be
earned. The stock certificates for Plan Share Awards shall be registered
in the
name of the Recipient until forfeited or transferred to the Recipient after
such
Award has been earned. The Committee shall maintain records as to all grants
of
Plan Share Awards under the Plan.
6.04
Allocations
Not Required. Notwithstanding
anything to the contrary in Sections 6.01 and 6.02, no Employee or Outside
Director shall have any right or entitlement to receive a Plan Share Award
hereunder, such Awards being at the total discretion of the Committee, nor
shall
the Employees or Outside Directors as a group have such a right. The Committee
may, with the approval of the Board (or, if so directed by the Board, shall)
return all Common Stock in the Plan Share Reserve not yet allocated to the
Holding Company at any time, and cease issuing Plan Share Awards.
6.05.
Distribution Election Before Plan Shares Are Earned.
Notwithstanding anything contained in the Plan to the contrary, an Employee
or
an Outside Director who has received an allocation of Plan Shares in accordance
with Article VI may request in writing that the Committee authorize the
distribution to him or her of all or a portion of the Plan Shares awarded
before
the date on which the Plan Shares become earned in accordance with Article
VII.
The decision as to whether to distribute to any Employee or Outside Director
who
requests distribution
shall
be
made by the Committee, in its sole discretion. In addition, the distribution
shall be subject to the following parameters:
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(a)
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The
Committee shall be required to make a separate determination for
each
request received by an Employee or Outside Director for
distribution.
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(b)
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Any
Plan Shares awarded shall be required to have a legend on the Plan
Shares
confirming that the Plan Shares are subject to restriction and
transfer in
accordance with the terms set forth in the Plan. This legend may
not be
removed until the date that the Plan Shares become earned in accordance
with Article VII.
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(c)
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The
Plan Shares distributed shall be voted by the Trustee in accordance
with
Section 7.04.
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(d)
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Any
cash dividends or other cash distributions paid with respect to
the Plan
Shares before the date that the Plan Shares are earned shall be
paid to
the Trustee to be held for the Employee or Outside Director, whichever
is
applicable, until the date that the Plan Shares are
earned.
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(e)
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At
the date on which the Plan Shares are earned, the Trustee may withhold
from any cash dividends or other cash distributions held on behalf
of such
Employee or Outside Director the amount needed to cover any applicable
withholding and employment taxes arising at the time that the Plan
Shares
are earned. If the amount of such cash dividends or distributions
is
insufficient, the Trustee may require the Employee or Outside Director
to
pay to the Trustee the amount required to be withheld as a condition
of
removing the legend on the Plan
Shares.
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ARTICLE
VII
EARNING
AND DISTRIBUTION OF PLAN SHARES; VOTING
RIGHTS
7.01
Earning
Plan Shares; Forfeitures.
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(a)
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General
Rules. Plan
Shares subject to an Award shall be earned by a Recipient at the
rate of
twenty percent (20%) of the aggregate number of Shares covered
by the
Award at the end of each full twelve months of consecutive service
with
the Association or an Affiliate after the date of grant of the
Award. If
the term of service of a Recipient terminates as an Employee, as
a
Director and as a Director
Emeritus
prior to the fifth anniversary (or such later date as the Committee
shall
determine) of the date of grant of an Award for any reason (except
as
specifically provided in Subsection (b) below or in Section 4.01
hereof),
the Recipient shall forfeit the right to earn any Shares subject
to the
Award which have not theretofore been
earned.
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In
determining the number of Plan Shares which are earned, fractional
shares
shall be rounded down to the nearest whole number, provided that
such
fractional shares shall be aggregated and earned, on the fifth
anniversary
of the date of grant.
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(b)
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Exception
for Terminations due to Death and Disability. Notwithstanding
the general rule contained in Section 7.01(a) above, all Plan Shares
subject to a Plan Share Award held by a Recipient whose term of
service as
an Employee and as a Director or Director
Emeritus
with the Holding Company, Association or an Affiliate terminates
due to
death or Disability shall be deemed earned as of the Recipient’s last day
of service with the Holding Company, Association or an Affiliate
as a
result of such death or Disability. If the Recipient’s service as an
Employee and as a Director or Director
Emeritus
terminates due to Disability within one year of the effective date
of the
Conversion, the Shares earned by the Recipient may not be disposed
of by
the Recipient during the one-year period following the Conversion,
and
stock certificate legends to that effect may be placed on the stock
certificates for any such shares.
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(c)
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Revocation
for Misconduct. Notwithstanding
anything hereinafter to the contrary, the Board may by resolution
immediately revoke, rescind and terminate any Plan Share Award,
or portion
thereof, previously awarded under this Plan, to the extent Plan
Shares
have not been delivered thereunder to the Recipient, whether or
not yet
earned, in the case of an Employee who is discharged from the employ
of
the Holding Company, Association or an Affiliate for cause (as
hereinafter
defined), or who is discovered after termination of employment
to have
engaged in conduct that would have justified termination for cause
or, in
the case of an Outside
Director
who is removed from the Board of Directors of the Association and
the
Holding Company or an Affiliate for cause (as hereinafter defined),
or who
is discovered after termination of service as an Outside
Director
to
have engaged in conduct which would have justified removal for
cause.
“Cause” is defined as personal dishonesty, willful misconduct, any breach
of fiduciary duty involving personal profit, intentional failure
to
perform stated duties, or the willful violation of any law, rule,
regulation (other than traffic violations or similar offenses)
or order
which results in a loss to the Holding Company, Association or
any
Affiliate or in a final cease and desist
order.
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7.02
Accrual
of Dividends. Whenever
Plan Shares are paid to a Recipient or Beneficiary under Section 7.03, such
Recipient or Beneficiary shall also be entitled to receive, with respect
to each
Plan Share paid, an amount equal to any cash dividends or cash distributions
and
a number of shares of Common Stock or other assets equal to any stock dividends
and any other assets distributions declared and paid with respect to a share
of
Common Stock between the date the Plan Shares are being distributed and the
date
the Plan Shares were granted. There shall also be distributed an appropriate
amount of net earnings, if any, of the Trust with respect to any cash dividends
or cash distributions so paid out. Until the Plan Shares are vested and
distributed to any such Recipient or Beneficiary, such dividends, distributions
and net earnings thereon, if any, shall be retained by the Trust.
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7.03
Distribution
of Plan Shares.
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(a)
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Timing
of Distributions: General Rule. Plan
Shares shall be distributed to the Recipient or his Beneficiary,
as the
case may be, as soon as practicable after they have been
earned.
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(b)
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Form
of Distribution.
All Plan Shares, together with any shares representing stock dividends,
shall be distributed in the form of Common Stock. One share of
Common
Stock shall be given for each Plan Share earned and payable. Payments
representing accumulated cash dividends and cash or other distributions
(and earnings thereon) shall be made in cash or in the form of
such
non-cash distributions.
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(c)
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Withholding.
The Trustee may withhold from any payment or distribution made
under this
Plan sufficient amounts of cash or shares of Common Stock to cover
any
applicable withholding and employment taxes, and if the amount
of such
payment is insufficient, the Trustee may require the Recipient
or
Beneficiary to pay to the Trustee the amount required to be withheld
as a
condition of delivering the Plan Shares. Alternatively, a Recipient
may
pay to the Trustee that amount of cash necessary to be withheld
in taxes
in lieu of any withholding of payments or distribution under the
Plan. The
Trustee shall pay over to the Holding Company, the Association
or
Affiliate which employs or employed such Recipient any such amount
withheld from or paid by the Recipient or Beneficiary.
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(d)
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Cessation
of Payment.
The Trustee shall cease payment of benefits to Recipients or, if
applicable, their Beneficiaries in the event of the Association’s
insolvency. The Association shall be considered insolvent for purposes
of
this RRP if the Association is unable to pay its debts as they
become due
or if a receiver is appointed for the Association under applicable
law. If
payments cease by reason of this subsection, payments will be resumed,
with appropriate make-up payments, once the Association ceases
to be
insolvent but only to the extent the payments were not made directly
by
the Association or its Affiliates.
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7.04
Voting
of Plan Shares.
All
shares of Common Stock held by the Trust shall be voted by the Trustee, taking
into account the best interests of the Plan Share Award recipients.
ARTICLE
VIII
TRUST
8.01
Trust.
The
Trustee shall receive, hold, administer, invest and make distributions and
disbursements from the Trust in accordance with the provisions of the Plan
and
Trust and the applicable directions, rules, regulations, procedures and policies
established by the Committee pursuant to the Plan.
8.02
Management
of Trust. It
is the intent of this Plan and Trust that, subject to the provisions of this
Plan, the Trustee shall have complete authority and discretion with respect
to
the management, control and investment of the Trust, and that the Trustee
shall
invest all assets of the Trust, except those attributable to cash dividends
paid
with respect to Plan Shares, in Common Stock to the fullest extent practicable,
and except to the extent that the Trustee determines that the holding of
monies
in cash or cash equivalents is necessary to meet the obligation of the Trust.
Neither the Holding Company, the Association, nor any Affiliate shall exercise
any direct or indirect control or influence over the time when, or the prices
at
which, the Trustee may purchase such shares, the number of shares to be
purchased, the manner in which the shares are to be purchased, or the broker
(if
any) through whom the purchases may be executed. In performing its duties,
the
Trustee shall have the power to do all things and execute such instruments
as
may be deemed necessary or proper, including the following powers:
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(a)
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To
invest up to one hundred percent (100%) of all Trust assets in
Common
Stock without regard to any law now or hereafter in force limiting
investments for Trustees or other fiduciaries. The investment authorized
herein and in paragraph (b) constitutes the only investment of
the Trust,
and in making such investment, the Trustee is authorized to purchase
Common Stock from the Holding Company
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6
or
an
Affiliate or from any other source and such Common Stock so purchased may
be
outstanding, newly issued, or treasury shares.
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(b)
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To
invest any Trust assets not otherwise invested in accordance with
(a)
above in such deposit accounts, and certificates of deposit (including
those issued by the Association), securities of any open-end or
closed-end
management investment company or investment trust registered under
the
Investment Company Act of 1940, whether or not the Trustee or any
affiliate of the Trustee is being compensated for providing services
to
the investment company or trust as investment advisor or otherwise,
obligations of the United States government or its agencies or
such other
investments as shall be considered the equivalent of
cash.
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(c)
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To
sell, exchange or otherwise dispose of any property at any time
held or
acquired by the Trust.
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(d)
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To
cause stocks, bonds or other securities to be registered in the
name of a
nominee, without the addition of words indicating that such security
is an
asset of the Trust (but accurate records shall be maintained showing
that
such security is an asset of the
Trust).
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(e)
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To
hold cash without interest in such amounts as may be in the opinion
of the
Trustee reasonable for the proper operation of the Plan and Trust
and to
hold cash pending investment.
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(f)
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To
employ brokers, agents, custodians, consultants and
accountants.
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(g) To
hire
counsel to render advice with respect to their rights, duties and obligations
hereunder, and such other legal services or representation as they may deem
desirable.
(h) To
hold
funds and securities representing the amounts to be distributed to a Recipient
or his or her Beneficiary as a consequence of a dispute as to the disposition
thereof, whether in a segregated account or held in common with other assets
of
the Trust.
Notwithstanding
anything herein contained to the contrary, the Trustee shall not be required
to
make any inventory, appraisal or settlement or report to any court, or to
secure
any order of court for the exercise of any power herein contained, or give
bond.
8.03
Records
and Accounts.
The
Trustee shall maintain accurate and detailed records and accounts of all
transactions of the Trust, which shall be available at all reasonable times
for
inspection by any legally entitled person or entity to the extent required
by
applicable law, or any other person determined by the Committee.
8.04
Earnings.
All
earnings, gains and losses with respect to Trust assets shall be allocated,
in
accordance with a reasonable procedure adopted by the Committee, to bookkeeping
accounts for Recipients or to the general account of the Trust, depending
on the
nature and allocation of the assets generating such earnings, gains and losses.
In particular, any earnings on cash dividends or distributions received with
respect to shares of Common Stock shall be allocated to accounts for Recipients,
if such shares are the subject of outstanding Plan Share Awards, or otherwise
to
the Plan Share Reserve. Recipients (or their Beneficiaries) shall not be
entitled to any such allocations until the Plan Share Awards to which they
relate are vested and distributed to those Recipients (or their
Beneficiaries).
8.05
Expenses.
All
costs and expenses incurred in the operation and administration of this Plan,
including those incurred by the Trustee, shall be borne by the Association
or
the Holding Company.
8.06
Indemnification.
The
Association shall indemnify, defend and hold the Trustee harmless against
all
claims, expenses and liabilities arising out of or related to the exercise
of
the Trustee’s powers and the discharge of its duties hereunder, unless the same
shall be due to its negligence or willful misconduct.
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ARTICLE
IX
MISCELLANEOUS
9.01
Adjustments
for Capital Changes.
The
aggregate number of Plan Shares available for issuance pursuant to the Plan
Share Awards (which, as of the effective date of this Plan, shall not exceed
4%
of the shares of the Holding Company’s Common Stock issued in the Conversion),
and the number of shares to which any Plan Share Award relates shall be
proportionately adjusted for any increase or decrease in the total number
of
outstanding shares of Common Stock issued subsequent to the effective date
of
the Plan resulting from any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares,
extraordinary cash or non-cash distribution, or other similar capital
adjustment, or other increase or decrease in such shares effected without
receipt or payment of consideration, by the Committee.
9.02
Amendment
and Termination of Plan.
The
Board may, by resolution, at any time amend or terminate the Plan. The power
to
amend or terminate shall include the power to direct the Trustee to return
to
the Holding Company all or any part of the assets of the Trust, including
shares
of Common Stock held in the Plan Share Reserve, as well as shares of Common
Stock and other assets subject to Plan Share Awards but not yet earned by
the
Employees or Outside
Directors
to whom
they are allocated. However, the termination of the Trust shall not affect
a
Recipient’s right to the distribution of Common Stock relating to Plan Share
Awards already earned, including earnings thereon, in accordance with the
terms
of this Plan and the grant by the Committee.
9.03
Nontransferable.
Plan
Share Awards and rights to Plan Shares shall not be transferable by a Recipient
other than by will or the laws of descent and distribution or pursuant to
a
qualified domestic relations order as defined by the Internal Revenue Code
of
1986, as amended, or Title I of the Employee Retirement Income Security Act
of
1974, as amended, or the rules thereunder, and during the lifetime of the
Recipient, Plan Shares may only be earned by and paid to the Recipient who
was
notified in writing of the Award by the Committee pursuant to Section 6.03.
The
assets of the RRP, prior to the distribution of Plan Shares to a Recipient
or
his or her Beneficiary, shall be subject to the claims of creditors of the
Association. Unless Plan Shares are distributed in accordance with Section
6.05
or 7.03 to a Recipient or his or her Beneficiary, such Recipient or, if
applicable, Beneficiary shall not have any right in or claim to any specific
assets of the RRP or Trust and shall only be an unsecured creditor of the
Association, nor shall the Holding Company or the Association be subject
to any
claim for benefits hereunder.
9.04
Employment
Rights. Neither
the Plan nor any grant of a Plan Share Award or Plan Shares hereunder nor
any
action taken by the Trustee, the Committee or the Board in connection with
the
Plan shall create any right on the part of any Employee to continue in the
employ of, or of any Outside
Director
to
continue in the service of, the Association, the Holding Company or any
Affiliate thereof.
9.05
Voting
and Dividend Rights.
No
Recipient shall have any voting or dividend rights or other rights of a
shareholder in respect of any Plan Shares covered by a Plan Share Award,
except
as expressly provided in Sections 7.02 and 7.04 above, prior to the time
said
Plan Shares are actually distributed to him.
9.06
Governing
Laws. The
Plan and Trust shall be governed by the laws of the State of Indiana, except
to
the extent governed by federal law, including regulations of the Office of
Thrift Supervision. In particular, grants of Plan Share Awards under the
Plan
shall comply with the requirements of 12 C.F.R. § 563b.3(g)(4)(vi) to the extent
applicable thereto.
9.07
Effective
Date.
This
Plan shall be effective as of the date of its approval by the shareholders
of
the Holding Company.
9.08
Term
of Plan.
This
Plan shall remain in effect until the earlier of (1) 21 years from the effective
date of its adoption, (2) termination by the Board, or (3) the distribution
of
all assets of the Trust. Termination of the Plan shall not affect any Plan
Share
Awards previously granted, and such Awards shall remain valid and in effect
until they have been earned and paid, or by their terms expire or are
forfeited.
9.09
Tax
Status of Trust.
It is
intended that the trust established hereby be treated as a grantor trust
of the
Association under the provisions of Section 671, et
seq.,
of the
Internal Revenue Code of 1986, as amended.
8
9.10.
Compensation.
The
Trustee shall be entitled to receive fair and reasonable compensation for
its
services hereunder, as agreed to by the Trustee and the Association, and
shall
also be entitled to be reimbursed for all reasonable out-of-pocket expenses,
including, but not by way of limitation, legal, actuarial and accounting
expenses and all costs and expenses incurred in prosecuting or defending
any
action concerning the Plan or the Trust or the rights or responsibilities
of any
person hereunder, brought by or against the Trustee. Such reasonable
compensation and expenses shall be paid by the Association or the Holding
Company.
9.11.
Resignation
of Trustee. The
Trustee may resign at any time by giving sixty (60) calendar days’ prior written
notice to the Association, and the Trustee may be removed, with or without
cause, by the Association on sixty (60) calendar days’ prior written notice to
the Trustee. Such prior written notice may be waived by the party entitled
to
receive it. Upon any such resignation or removal becoming effective, the
Trustee
shall render to the Association a written account of its administration of
the
Plan and the Trust for the period since the last written accounting and shall
do
all necessary acts to transfer the assets of the Trust to the successor Trustee
or Trustees.
9
Resolutions
Adopted by the Board of Directors
of
Union Federal Savings and Loan Association
WHEREAS,
the Union Federal Savings and Loan Association Recognition and Retention
Plan
and Trust (the “RRP Plan”) permits the Association's Board of Directors to amend
the RRP Plan;
WHEREAS,
the Office of Thrift Supervision has recently amended its regulations to
permit
the vesting of stock options and management recognition grants in the event
of a
change in control of the association making such awards.
WHEREAS,
the Board of Directors deems it advisable to amend the RRP Plan to permit
vesting of awards under the RRP Plan in the event of a change in control
of the
Association or its parent company, Union Community Bancorp.
NOW,
THEREFORE, BE IT RESOLVED, that the Section 7.01(b) of the RRP Plan be amended
to read in its entirety as follows:
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(b)
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Exception
for Terminations Due to Death and Disability and for a Change in
Control.
Notwithstanding the general rule contained in Section 7.01(a) above,
all
Plan Shares subject to a Plan Share Award held by a Recipient whose
term
of service as an Employee and as a Director Emeritus with the Holding
Company, Association or an Affiliate terminates due to death or
Disability
shall be deemed earned as of the Recipient’s last day of service with the
Holding Company, Association or an Affiliate as a result of such
death or
Disability. If the Recipient’s service as an Employee and as a Director or
Director Emeritus terminates due to Disability within one year
of the
effective date of the Conversion, the Shares earned by the Recipient
may
not be disposed of by the Recipient during the one-year period
following
the Conversion, and stock certificate legends to that effect may
be placed
on the stock certificates for any such shares. Notwithstanding
the general
rule contained in Section 7.01(a), all Plan Shares subject to a
Plan Share
Award held by a Recipient shall be deemed to be earned in the event
of a
“change in control.”“A “change in control” is defined as a change in
control of the Holding Company or the Association within the meaning
of 12
C.F.R. § 574.4(a) (other than a change of control resulting from a trustee
or other fiduciary holding shares of Common Stock under an employee
benefit plan of that Holding Company or the Association or any
of its
Affiliates).
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RESOLVED
FURTHER, that the foregoing amendment to the RRP Plan be applied to outstanding
awards under the RRP Plan and that the Association's officers notify the
current
grantees of awards made under the RRP Plan of this amendment and advise them
of
its impact on the vesting of their awards.