SECOND DIRECTOR DEFERRED
COMPENSATION PLAN
FOR JOHN M. DALTON
FIRST FEDERAL SAVINGS BANK OF MARION
Marion, Indiana
April 1, 1999
Financial Institution Consulting Corporation
700 Colonial Road, Suite 260
Memphis, Tennessee 38117
WATS: 1400-873-0089
FAX: (901) 684-7411
(901) 684-7400
SECOND DIRECTOR DEFERRED
COMPENSATION PLAN
This Second Director Deferred Compensation Plan (the "Plan"), effective
as of the 1st day of April, 1999, formalizes the understanding by and between
FIRST FEDERAL SAVINGS BANK OF MARION (the "Bank"), a federally chartered savings
bank, and JOHN M. DALTON, hereinafter referred to as "Director." MARION CAPITAL
(the "Holding Company") is a party to this Plan for the sole purpose of
guaranteeing the Bank's performance hereunder.
WITNESSETH:
WHEREAS, the Director serves the Bank as a member of the Board; and
WHEREAS, the Bank recognizes the valuable services heretofore performed
for it by such Director and wishes to encourage Director's continued service;
and
WHEREAS, the Bank values the efforts, abilities and accomplishments of
Director and recognizes that the Director's service substantially contributes to
its continued growth and profits in the future; and
WHEREAS, this Director wishes to continue to defer a certain portion of
his fees to be earned in the future; and
WHEREAS, the Director and the Bank desire to formalize the terms and
conditions upon which the Bank shall pay such deferred compensation to the
Director or his designated beneficiaries; and
WHEREAS, the Bank and the Director intend this Plan to be considered an
unfunded arrangement, maintained primarily to provide retirement income for such
Director, for tax purposes and for purposes of the Employee Retirement Income
Security Act of 1974, as amended; and
WHEREAS, the Bank has adopted this Second Director Deferred
Compensation Plan which controls all issues relating to the Deferred
Compensation Benefits as described herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree to the following terms and conditions:
SECTION I
DEFINITIONS
When used herein, the following words and phrases shall have the
meanings below unless the context clearly indicates otherwise:
1.1 "Bank" means FIRST FEDERAL SAVINGS BANK OF MARION and any successor
thereto.
1.2 "Beneficiary" means the person or persons (and their heirs) designated
as Beneficiary in the Director's Beneficiary Designation, Exhibit A, to
whom the deceased Director's benefits are payable. If no Beneficiary is
so designated, then the Director's Spouse, if living, will be deemed
the Beneficiary. If the Director's Spouse is not living, then the
Children of the Director will be deemed the Beneficiaries and will take
on a per stirpes basis. If there are no Children, then the Estate of
the Director will be deemed the Beneficiary.
1.3 "Benefit Age" shall be the birthday on which the Director attains age
seventy (70) and becomes eligible to receive benefits under the plan.
1.4 "Benefit Eligibility Date" shall be the date on which a Director is
entitled to receive his Deferred Compensation Benefit. It shall be the
first day of the month following the month in which the Director
attains the Benefit Age.
1.5 "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 find] cease-and-desist order, material breach of any
provision of this Plan, or incompetence in matters of material
importance to the Bank.
1.6 "Change in Control" of the Holding Company or the Bank shall mean the
first to occur of any of the following events:
(a) Any person or entity or group of affiliate persons or entities
(other than the Holding Company) becomes a beneficial owner,
directly or indirectly, of 25% or more of the Holding
Company's and/or the Bank's voting securities or all or
substantially all of the assets of Holding Company and/or the
Bank.
(b) Holding Company and/or the Bank enters, into a definitive
agreement which contemplates the merger, consolidation or
combination of either Holding Company or the Bank with an
unaffiliated entity in which either or both of the following
is to occur. (i) the directors of Holding Company and/or Bank,
as applicable, immediately prior to such merger, consolidation
or combination will constitute less than a majority of the
board of directors of the surviving, new or combined entity;
or (ii) less than 75% of the outstanding voting securities of
the surviving, new or combined entity will be beneficially
owned by the stockholders of Holding Company or immediately
prior to such merger, consolidation or combination; provided,
however, that if any definitive agreement to merge,
consolidate or combine is terminated without consummation of
the transaction, then no Change in Control shall be deemed to
have occurred pursuant to this paragraph (b).
(c) Holding Company and/or the Bank enters into a definitive
agreement which contemplates the transfer of all or
substantially all of Holding Company's and/or the Bank's
assets, other than to a wholly-owned subsidiary of Holding
Company; provider, however, that if any definitive agreement
to transfer assets is terminated without consummation of the
transfer, then no Change in Control shall be deemed to have
occurred pursuant to this paragraph (c).
(d) A majority of the members of the Board of Directors of either
Holding Company or the Bank shall be persons who: (i) were not
members of such Board on the date hereof ("current members");
and (ii) were not nominated by a vote of the Board which
included the affirmative vote of a majority of the current
members on the Board at the time of their nomination ("future
designees") and (iii) were not nominated by a vote of the
Board which included the affirmative vote of a majority of the
current members and future designees, taken as a group, on the
Board at the time of their nomination.
The term "person" includes an individual, a group acting in concert, a
corporation, a partnership, an association, a joint venture, a pool, a joint
stock company, a trust, an unincorporated organization or similar company, a
syndicate or any other group formed for the purpose of acquiring, holding or
disposing of securities. The term "acquire" means obtaining ownership, control,
power to vote or sole power of disposition of stock, directly or indirectly or
through one or more transactions or subsidiaries, through purchase, assignment,
transfer, exchange, succession or other means, including (1) an increase in
percentage ownership resulting from a redemption, repurchase, reverse stock
split or a similar transaction involving other securities of the same class; and
(2) the acquisition of stock by a group of persons and/or companies acting in
concert which shall be deemed to occur upon the formation of such group,
provided that an investment advisor shall not be deemed to acquire the voting
stock of its advisee if the advisor (a) votes the stock only upon instruction
from the beneficial owner and (b) does not provide the beneficial owner with
advice concerning the voting of such stock. The term "security" includes
nontransferable subscription rights issued pursuant to a Plan of conversion, as
well as a "security, " as defined in 15 U.S.C. ss. 78c(2)(l); and the term
"acting in concert" means (1) knowing , participation in a joint activity or
interdependent conscious parallel action towards a couti-non goal whether or not
pursuant to an express agreement, or (2) a combination or pooling of voting or
other interests in the securities of an issuer for a common purpose pursuant to
any contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise. Further, acting in concert with any person or
company shall also be deemed to be acting in concert with any person or company
that is acting in concert with such other person or company.
Notwithstanding the above definitions, the boards of directors of the
Bank or the Holding Company, in their absolute discretion, may make a finding
that a Change in Control of the Bank or the Holding Company has taken place
without the occurrence of any or all of the events enumerated above.
1.7 "Children" means the Director's children, both natural and adopted,
determined at the time payments arc: due tire Children under this Plan.
1.8 "Deferral Period" means that period beginning April 1, 1999 and
continuing until the Director's attainment of his Benefit Age.
1.9 "Deferred Compensation Benefit" means the annuitized value (using the
Interest Factor) of the Director's Elective Contribution Account,
measured as of the Director's Benefit Age, payable in monthly
installments throughout the Payout Period and commencing on the
Director's Benefit Eligibility Date.
1.10 "Disability Benefit' means the monthly benefit payable to the Director
following a determination, in accordance with Subsection 5.2, that he
is no longer able, properly and satisfactorily, to perform his duties
as a Director.
1.11 "Effective Date" of this Plan is April 1, 1999.
1.12 "Elective Contribution" shall refer to any bookkeeping entry required
to record the Director's voluntary monthly pre-tax deferral of Board
fees and Committee fees which shall be made in accordance with Section
III.
1.13 "Elective Contribution Account" shall be represented by the bookkeeping
entries required to record the Director's Elective Contributions plus
accrued interest, equal to the Interest Factor, earned to date on such
amounts. However, neither the existence of such bookkeeping entries nor
the Elective Contribution Account itself shall be deemed to create
either a trust of any kind, or a fiduciary relationship between the
Bank and ft Director or any Beneficiary.
1.14 "Estate" means the estate of the Director.
1.15 "Financial Hardship" means an unforeseeable emergency resulting from a
sudden and unexpected illness or accident of the Director's or of a
dependent of the Director, loss of the Director's property due to
casualty. or other similar extraordinary and unforeseeable
circumstances which arise as a result of an event not within the
control of the Director. The circumstances that shall constitute an
unforeseeable emergency will depend upon the facts of each case, but,
in any instance, payment may not be made to the extent that such
hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of the
Director's assets to the extent such liquidation would not itself cause
severe financial hardship, or (iii) by cessation of deferrals under the
Plan, Examples of what are not considered to be unforeseeable
emergencies include the need to send the Director's child to college or
the decision to purchase a home.
1.16 "Financial Hardship Benefit" means a withdrawal or withdrawals of an
amount or amounts attributable to a Financial Hardship and limited to
the extent reasonably needed to satisfy the emergency need.
1.17 "Interest Factor" means monthly compounding or discounting, as
applicable, at a rate equal to the New York Prime Rate, as determined
biannually on the first day of each January and July during the
Deferral Period.
1.18 "Payout Period" means the time frame during which certain benefits
payable hereunder shall be distributed, Payments shall be made in equal
monthly installments commencing on the first day of the month following
the occurrence of the event which triggers distribution and continuing
for a period of one hundred and twenty (120) months.
1.19 "Plan Year" shall mean the calendar year, except that the first Plan
Year shall mean April 1, 1999 to December 31, 1999.
1.20 "Projected Deferral" is an estimate of the total amount of compensation
to be deferred by the Director during his Deferral Period (excluding
any interest accrued on such deferrals), as so designated in Section
III.
1.21 "Spouse" means (the individual to whom the Director is legally married
at the time of the Director's death.
1.22 "Survivor's Benefit" means a stream of monthly installments payable to
the Beneficiary throughout the Payout Period, equal to the amount of
the Director's Elective Contribution Account, and subject to
Subsections 5.1 and 6.1.
SECTION II
ESTABLISHMENT OF RABBI TRUST
The Bank has established a rabbi trust into which the Bank shall
contribute assets which shall be held therein, pursuant to the agreement which
established such rabbi trust. The contributed assets shall be subject to the
claims of the Bank's creditors in the event of the Bank's "Insolvency" as
defined in the agreement which established such rabbi trust, until the
contributed assets are paid to the Director and his Beneficiary(ies) in such
manner arid. at such times as specified in this Plan, It is the intention of the
Bank to make a contribution or contributions to the rabbi trust to provide the
Bank with a source of funds to assist it in meeting the liabilities of this
Plan. The rabbi trust and any assets held therein shall conform to the terms of
the rabbi trust agreement which has been amended in conjunction with this Plan.
Any contribution(s) to the rabbi trust shall be made in accordance with the
rabbi trust agreement. The amount and timing of such contribution(s) shall be
specified in the agreement which establishes such rabbi trust.
SECTION III
DEFERRED COMPENSATION
Commencing on the Effective Date and continuing through the end of the
Deferral Period, the Director and the Bank agree that the Director may defer
into his Elective Contribution Account up to One Hundred Percent (100%) of the
monthly Board fees and Committee fees which the Director would otherwise be
entitled to receive from the Bank for each month of the Deferral Period. The
Director's initial deferral amount shall be $1,000 a month. The specific amount
of the Director's monthly deferred compensation shall apply only to compensation
attributable to servioes not yet performed.
SECTION IV
ADJUSTMENT OF DEFERRAL AMOUNT
Deferral of the specific amount of fees designated in Section III shall
continue in effect pursuant to the terms of this Plan unless and until the
Director files with the Administrator a Notice of Adjustment of Deferral Amount
(Exhibit B of this Plan). If the Bank increases the amount of fees earned by the
Director, the Director can include such additional amounts in his monthly
deferral, provided approval from the Board of Directors is obtained, by filing a
Notice of Adjustment of Deferral Amount. A Notice of Adjustment of Deferral
Amount shall be effective if filed with the Administrator at least thirty (30)
days prior to any January 1st, April 1st, July 1st, or October 1st during the
Director's Deferral Period. Such Notice of Adjustment of Deferral Amount shall
be effective commencing with the first applicable month following its filing and
shall be applicable only to compensation attributable to services not yet
performed by the Director.
SECTION V
RETIREMENT BENEFIT
5.1 Retirement Benefit. Subject to Subsections 5.2 through 5.5, the Bank
agrees to pay the Director the Deferred Compensation Benefit commencing
on the Director's Benefit Eligibility Date. Such payments will be made
over the term of the Payout Period. In the event of the Director's
death after commencement of the Deferred Compensation Benefit, but
prior to conviction of all such payments due and owing hereunder, the
Bank shall pay to the Director's Beneficiary a continuation of the
monthly installments for the number of months renaming in the Payout
Period.
5.2 Disability Benefit. Notwithstanding any other provision hereof, if
requested by the Director and approved by the Board of Directors, the
Director shall be entitled to receive the Disability Benefit hereunder,
in any case in which it is determined by a duly Housed physician
selected by the Bank, that the Director is no longer able, properly and
satisfactorily, to perform his regular duties as a Director because of
ill health, accident, disability or general inability due to age. If
the Director's service is terminated pursuant to this Subsection and
Board of Director approval is obtained, the Director may elect to begin
receiving the Disability Benefit in lieu of the Deferred Compensation
Benefit, which is not available prior to the Director's Benefit
Eligibility Date. The benefit shall begin within thirty (30) days of
Board of Director approval of such benefit. The amount of the monthly
benefit shall be the annuitized value of the Director's Elective
Contribution Account, measured as of the date of the disability
determination and payable over the Payout Period. The Interest Factor
shall be used to annuitize the Elective Contribution Account. In the
event the Director dies while receiving Disability Benefit payments
pursuant to this Subsection, or after becoming eligible for such
payments but before the actual commencement of such payments, his
Beneficiary shall be entitled to receive those benefits provided for in
Subsection 6.1(a) and the Disability Benefits provided for in this
Subsection shall terminate upon the Director's death.
5.3 Financial Hardship Benefit. In the event the Director incurs a
Financial Hardship, the Director may request a Financial Hardship
Benefit. Such request shall be either approved or rejected by the Bank
in the exercise of its sole discretion. The Director will be required
to demonstrate to the satisfaction of the Bank that a Financial
Hardship has occurred and that the Director is otherwise entitled to a
Financial Hardship Benefit in accordance with Sections 1.15 and 1.16.
If a financial Hardship Benefit is approved, it shall be paid in a lump
sum within thirty (30) days of the event which triggers payment and
only to the extent of the Director's account balances when paid. The
balance of the Director's Elective Contribution Account shall be
reduced for any Financial Hardship Benefit distribution. Any subsequent
Deferred Compensation Benefit, Survivor's Benefit or Disability Benefit
shall be actuarially adjusted to reflect such distribution.
5.4 Removal For Cause. In the event the Director is removed for Cause at
any time prior to reaching his Benefit Age, he shall be entitled to
receive the balance of his Elective Contribution Account, measured as
of the date of removal. Such amount shall be paid in a lump sum within
thirty (30) days of the Director's date of removal. All other benefits
provided for the Director or his Beneficiary under this Plan shall be
forfeited and the Plan shall become null and void with respect to such
Director.
5.5 Voluntary or Involuntary Termination Other Than for Cause, Death or
Disability. If the Director's service with the Bank is voluntarily or
involuntarily terminated prior to attainment of his Benefit Eligibility
Date due to any reason, including a Change in Control, but other than
for Cause, the Director's death or disability, then commencing on his
Benefit Eligibility Date, the Director shall be entitled to the
annuitized value (using the Interest Factor) of his Elective
Contribution Account calculated as of his Benefit Eligibility Date, and
payable over the Payout Period.
SECTION VI
DEATH BENEFITS
6.1 Death Benefit Prior to Commencement of Deferred Compensation Benefit.
In the event of the Director's death prior to commencement of the
Deferred Compensation Benefit, the Bank shall pay the Director's
Beneficiary a monthly benefit for the Payout Period, commencing within
thirty (30) days of the Director's death. The amount of such monthly
benefit payments shall be the annuitized value of the Director's
Elective Contribution Account, measured as of the date of the
Director's Death and payable over the Payout Period. The Interest
Factor shall be used to annuitize the Elective Contribution Account.
6.2 Additional Death Benefit - Burial Expense. In addition to the
above-described death benefits, upon the Director's death, the
Director's Beneficiary shall be entitled to receive a one-time lump sum
death benefit in the amount of Ten Thousand Dollars ($10,000.00). This
benefit shall be provided specifically for the purpose of providing
payment for burial and/or funeral expenses of the Director. Such
benefit shall be payable within thirty (30) days of the Director's
death. The Director's Beneficiary shall not be entitled to such benefit
if the Director is removed for Cause prior to death. Notwithstanding
anything in this Section 6.2 to the contrary, if the Director is also a
participant in any other agreement, under which an additional $10,000
death benefit for burial expenses is being paid, no additional death
benefit shall be paid under this Section 6.2.
SECTION VII
BENEFICIARY DESIGNATION
The Director shall make an initial designation of primary and secondary
Beneficiaries upon execution of this Plan by executing his Beneficiary
Designation form (Exhibit A of this Plan), and shall have the right to change
such designation, at any subsequent time, by submitting to the Administrator in
substantially the same form as Exhibit A, a subsequent written designation of
primary and secondary Beneficiaries. Any Beneficiary designation made subsequent
to execution this Plan shall become effective only when receipt thereof is
acknowledged in writing by the Administrator.
SECTION VIII
DIRECTOR'S RIGHT TO ASSETS
The rights of the Director, any Beneficiary, or any other person
claiming through the Director under this Plan, shall be solely those of an
unsecured general creditor of the Bank. The Director, the Beneficiary, or any
other person claiming through the Director, shall only have the right to receive
from the Bank those payments so specified under this Plan. The Director 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 Plan. Any asset used or acquired by the Bank in connection with the
liabilities it has assumed under this Plan, unless expressly provided herein,
shall not be deemed to be held under any trust for the benefit of the Director
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 IX
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 Plan. The Director,
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 Plan or to refrain from the same and to
determine the extent, nature, and method of any 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 Director 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
Director, then the Director shall assist the Bank by freely submitting to a
physical examination and by supplying such additional information necessary to
obtain such insurance or annuities.
SECTION X
ALIENABILITY AND ASSIGNMENT PROHIBITION
Neither the Director nor any Beneficiary under this Plan shall have any
power or right to transfer, assign, anticipate, hypothecate, mortgage, commute,
modify or otherwise encumber in advance any of the benefits payable hereunder,
nor shall any of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the Director or his
Beneficiary, nor be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Director or any Beneficiary attempts
assignment, communication, hypothecation, transfer or disposal of the benefits
hereunder, the Bank's liabilities shall forthwith cease and terminate.
SECTION XI
ACT PROVISIONS
11.1 Named Fiduciary and Administrator. The Bank shall be the Named
Fiduciary and Administrator (the "Administrator") of this Plan. As
Administrator, the Bank shall be responsible for the management,
control and administration of the Plan as established herein. The
Administrator may delegate to others certain aspects of the management
and operational responsibilities of the Plan, 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
Plan are not paid to the Director (or to his Beneficiary in the case of
the Director'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, they shall provide in writing,
within ninety (90) days of receipt of such claim, their specific
reasons for such denial, reference to the provisions of this Plan 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 Plan, 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 Plan upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of this Plan or the meaning and effect of the
terms and conditions thereof, then claimants may submit the dispute to
mediation, administered by the American Arbitration Association ("AAA")
(or a mediator selected by the parties) in accordance with the AAA's
Commercial Mediation Rules. If mediation is not successful in resolving
the dispute, it shall be settled by arbitration administered by the AAA
under it Commercial Arbitration Rules, and judgment on the award
rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
SECTION XII
MISCELLANEOUS
12.1 No Effect on Directorship Rights. Nothing contained herein will confer
upon the Director the right to be retained in the service of the Bank
nor limit the right of the Bank to discharge or otherwise deal with
Director without regard to the existence of the Plan. Pursuant to 12
C.F.R. ss. 563.39(b), the following conditions shall apply to this
Plan:
(1) The Bank's Board of Directors may remove the Director at any
time, but any removal by the Bank's Board of Directors other
than removal for Cause, shall not prejudice the Director's
vested right to compensation or other benefits under the
contract. The Director shall be paid the balance of his
Elective Contribution Account in a lump sum within thirty (30)
days of his removal in the event he is removed for Cause. He
shall have no right to receive additional compensation or
other benefits for any period after removal for Cause.
(2) If the Director 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 as of
the date of termination of service unless stayed by
appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Director
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 Director is removed 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. The Director shall be paid
the balance of his Elective Contribution Account in a lump sum
within thirty (30) days of his removal in the event he is
removed pursuant to such order.
(4) If the Bank is in default (as defined in Section 3(x)(1) of
the Federal Deposit Insurance Art), all non-vested obligations
under the contract shall terminate as of the date of default.
(5) All non-vested obligations under the contract shall be
terminated, except to the extent determined that continuation
of the contract is necessary for the continued operation of
the Bank:
(i) by the Director or his designee at the time the
Federal Deposit Insurance Bank or the Resolution
Trust Bank enters into an agreement to provide
assistance to or on behalf of the Bank under the
authority contained in ss. 13(c) of the Federal
Deposit Insurance Act; or
(ii) by the Director 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 Director's Elective Contribution Account),
however, shall not be affected by such action.
12.2 State Law. The Plan is established under, and will be construed
according to, the laws of the state of Indiana.
12.3 Severability. In the event that any of the provisions of this Plan or
portion thereof, are held to be inoperative or invalid by any court of
competent jurisdiction, then: (1) insofar as is reasonable, effect will
be given to the intent manifested in the provisions held invalid or
inoperative, and (2) the validity and enforceability of the remaining
provisions will not be affected thereby.
12.4 Incapacity of Recipient. In the event the Director 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 Plan
to which such Director is entitled shall be paid to such conservator or
other person legally charged with the care of his person or Estate.
Except as provided above in this paragraph, when the Bank's Board of
Directors, in its sole discretion, determines that the Director is
unable to manage his financial affairs, the Board may direct the Bank
to make distributions to any person for the benefit of the Director.
12.5 Unclaimed Benefit. The Director shall keep the Bank informed of his
current address and the current address of his Beneficiaries. If the
location of the Director is not made known to the Bank within three (3)
years after the date on which any payment of the Deferred Compensation
Benefit may first be made, payment may be made as though the Director
had died at the end of the three (3) year period. If, within one (1)
additional year after such three (3) year period has elapsed, or,
within three (3) years after the actual death of the Director,
whichever occurs first, the Bank is unable to locate any Beneficiary of
the Director, then the Bank may fully discharge its obligation by
payment to the Estate.
12.6 Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, 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 Director or any other person for any claim, loss,
liability or expense incurred in connection with this Plan.
12.7 Gender. Whenever in this Plan 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 Plans. Nothing contained in this Plan
shall affect the right of the Director 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 Plan, the
benefits otherwise provided herein shall not be payable if the
Director's death results from suicide, whether sane or insane, within
twenty-six (26) months after the execution of this Plan. If the
Director dies during this twenty-six (26) month period due to suicide,
the balance of his Elective Contribution Account will be paid to the
Director's Beneficiary in a single payment. Payment is to be made
within thirty (30) days after the Director's death is declared a
suicide by competent legal authority. Credit shall be given to the Bank
for payments made prior to determination of suicide.
12.10 Inurement. This Plan shall be binding upon and shall inure to the
benefit of the Bank, its successors and assigns, and the Director, his
successors, heirs, executors, administrators, and Beneficiaries.
12.11 Source of Payments. All payments provided in this Plan shall be timely
paid in cash or check from the general funds of the Bank or the assets
of the rabbi trust. The Holding Company guarantees payment and
provision of all amounts and benefits due to the Directors and, if such
amounts and benefits are not timely paid or provided by the Bank, or
the rabbi trust, such amounts and benefits shall be paid or provided by
the Holding Company.
12.12 Modification of Benefit Eligibility Date. In the event that a Director
desires to modify his Benefit Eligibility Date or Payout Period with
respect to future Elective Contributions, the Director may do so at the
time and in the manner that the Director is entitled to adjust his
Elective Contribution, pursuant to Section IV of the Plan. In the event
that a Director desires to modify his Benefit Eligibility Date or
Payout Period with respect to amounts accrued in his Elective
Contribution Account the Director may do so, provided, however, that
any such modification is made no later than twenty-four (24) months
prior to the date of both (i) the Director's existing Benefit
Eligibility (at the time of such modification) and (ii) the Director's
Benefit Eligibility Date, as modified.
12.13 Headings. Headings and sub-headings in this Plan are inserted for
reference and convenience only and shall not be deemed a part of this
Plan.
12.14 Early Distribution Following a Change in Control. In the event of a
Change in Control of the Bank or the Holding Company, a Director may
apply to the Board of Directors of the acquiring corporation
("Acquiror's Board") to commence the distribution of his Deferred
Compensation Benefit prior to the Benefit Eligibility Date and/or to
receive his Deferred Compensation Benefit in a lump sum or over some
alternative Payout Period the determination whether to permit such
change in election shall be within the sold discretion of the
Acquiror's Board.
12.15 Tax Withholding. The Bank may withhold from any benefits payable under
this Plan all federal, state, city, or other taxes as shall be required
pursuant to any law or governmental regulation then in effect.
SECTION XIII
AMENDMENT/REVOCATION
This Plan shall not be amended, modified or revoked at any time, in
whole or part, without the mutual written consent of the Director and the Bank,
and such mutual consent shall be required even if the Director is no longer
serving the Bank as a member of the Board.
SECTION XIV
EXECUTION
14.1 This Plan sets forth the entire understanding of the parties hereto
with respect to the transactions contemplated hereby.
14.2 This Plan shall be executed in quadruplicate, each copy of which, when
so executed and delivered, shall be an original, but all three copies
shall together constitute one and the same instrument.
Remainder of page intentionally left blank.
IN WITNESS WHEREOF, the Director, Bank and the Holding Company have
caused this Plan to be executed on the day and date first above written.
ATTEST: FIRST FEDERAL SAVINGS BANK OF MARION
/s/Larry G. Phillip By: /s/Steven L. Banks
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Secretary Title: Executive Vice President
WITNESS: JOHN M. DALTON
/s/Larry G. Phillip /s/John M. Dalton
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Secretary
ATTEST: MARION CAPITAL
/s/Larry G. Phillip By: /s/Steven L. Banks
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Secretary Title: Executive Vice President