EXHIBIT 10.16
FIRST COMMUNITY BANK & TRUST
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is made this _____ day of _____________, 2001, by and between
FIRST COMMUNITY BANK & TRUST, a state-chartered commercial bank, located in
Bargersville, Indiana (the "Company"), and ________________, (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
Definitions
Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change of Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is
deemed to acquire when applying Section 318 of the Code) more than 50
percent of the Company's outstanding voting common stock followed
within twelve (12) months by the Director's Termination of Service for
reasons other than death, Disability or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees which the Director
elects to defer according to the Agreement.
1.6 "Disability" means, if the Director is covered by a Company sponsored
disability policy, total disability as defined in such policy without
regard to
any waiting period. If the Director is not covered by such a policy,
Disability means the Director suffering a sickness, accident or injury
which, in the judgment of a physician satisfactory to the Company,
prevents the Director from performing substantially all of the
Director's normal duties for the Company, prevents the Director from
performing substantially all of the Director" normal duties of the
Company. As a condition to any benefits, the Company may require the
Director to submit to such physical or mental evaluations and tests as
the Company's Board of Directors deems appropriate.
1.7 "Effective Date" Means January 1, 2002.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan
Year.
1.10 "Normal Retirement Age" means the Director's 70th birthday.
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason whatsoever other
than by reason of a leave of absence which is approved by the Company.
For purposes of the Agreement, if there is a dispute over the
Director's status or the date of the Director's Termination of
Service, the Company shall have the sole and absolute right to decide
the dispute.
Article 2
Deferral Election
Initial Election. The Director shall make an initial deferral election under
this Agreement by filing with the Company a signed Election Form within 30 days
after the Effective Date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon Company approval, the Director may modify the amount
of Fees to be deferred annually by filing a new Election Form with the
Company prior to the beginning of the Plan Year in which the Fees are
to be deferred. The modified deferral election shall not be effective
until the
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calendar year following the year in which the subsequent Election Form
is received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from the
death of a family member, divorce, sickness, injury, catastrophe or
similar event outside the control of the Director occurs, the
Director, by written instructions to the Company, may reduce future
deferrals under this Agreement.
Article 3
Deferral Account
3.1 Establishing and Crediting. The Company shall establish a Deferral Account
on its books for the Director and shall credit to the Deferral Account the
following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the Fees
would have otherwise been paid to the Director.
3.1.2 Interest. On the first day of each month and immediately prior to the
payment of any benefits, interest on the account balance since the
preceding credit under this Section 3.1.2, if any, at an annual rate,
compounded monthly, equal to the rate determined by the Company's
Board of Director, in its sole discretion.
3.2 Statement of Accounts. The Company shall provide to the Director, within
120 days of each Anniversary Date, a statement setting forth the Deferral
Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device of
measuring amounts to be paid under this Agreement. The Deferral Account is
not a trust fund of any kind. The Director is a general unsecured creditor
of the Company for the payment of benefits. The benefits represent the mere
Company promise to pay such benefits. The Director's rights are not subject
in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by the Director's
creditors.
Article 4
Lifetime Benefits
4.1 Normal Retirement Benefits. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this section 4.1 in lieu
of any other benefit under this Agreement.
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4.1.1 Amount of Benefit. The benefit under this Section 4.1 is the Deferral
Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the Director
as selected on the Form of Benefits commencing on the first day of the
month following the Director's Normal Retirement Date. The Company
shall credit interest pursuant to Section 3.1.2 on the remaining
account balance during any applicable installment period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the Normal
Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in
this Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under the Section 4.2 is the Deferral
Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the Director
as selected on the Form of Benefits commencing on the first day of the
month following the Director's Early Retirement Date. The Company
shall credit interest pursuant to Section 3.1.2 on the remaining
account balance during any applicable installment period..
4.3 Disability Benefit. If the Director terminates service as a Director due to
Disability prior to Normal Retirement Age, the Company shall pay to the
Director the benefit described in this Section 4.3 In lieu of any other
benefit under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the Deferral
Account balance At the Director's Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the Director
as selected on the Form of Benefits commencing on the first day of the
month following the Director's Disability date. The Company shall
credit interest pursuant to Section 3.1.2 on the remaining account
balance during any applicable installment period.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall pay
to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 shall be the
Deferral Account balance on the Director's Termination of Service.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following
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petition by the Director) that the Director has suffered an unforeseeable
financial emergency as described in Section 2.2.2, the Company shall
distribute to the Director all or a portion of the Deferral Account balance
as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
Article 5
Death Benefits
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary
the benefit described in this Section 5.1 in lieu of any other benefit
under this Agreement.
5.1.1 Amount of Benefit. The benefit under Section 5.1 is the Deferral
Account balance on the Director's death.
Payment of Benefit. The Company shall pay the benefit to the Director
as selected on the Form of Benefits commencing on the first day of the
month following the Director's death. The Company shall credit
interest pursuant to Section 3.1.2 on the remaining account balance
during any applicable installment period.
5.2 Death During Benefit Period. If the Director dies after benefit payments
have commenced under this Agreement but before receiving all such payments,
the Company shall pay the remaining benefits to the Director's Beneficiary
at the same time and in the same amounts they would have been paid to the
Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments Commence. If
the Director is entitled to benefit payments under this Agreement, but dies
prior to the Commencement of said benefit payments, the Company shall pay
the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence
on the first day of the month following the date of the Director's death.
Article 6
Beneficiaries
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Director and accepted
by the Company during the Director's lifetime. The Director's beneficiary
designation shall be deemed automatically revoked if the beneficiary
predeceases the Director or if the Director names a spouse as beneficiary
and the marriage is subsequently dissolved. If the
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Director dies without a valid beneficiary designation, all payments shall
be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition
of his or her property, the Company may pay such benefit to the guardian,
legal representative or person having the care or custody of such minor,
incompetent person or incapable person. The Company may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge
the Company from all liability with respect to such benefit.
Article 7
General Limitations
7.1 Termination for Cause. Notwithstanding any provision of the Agreement to
the contrary, the Company shall not pay any benefit under this Agreement
that is in excess of the Director's Deferrals if the Company terminates the
Director's service for:
(a) Gross negligence or gross neglect of duties to the Company:
(b) Commission of a felony or of a gross misdemeanor involving moral
turpitude in connection with the Director's service to the Company; or
(c) Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Director's
service and resulting in an adverse effect on the Company.
7.2 Suicide or Misstatement. The Company shall not pay any death benefit under
this Agreement exceeding the Deferral Account if the Director commits
suicide within two years after the date of this Agreement, or if the
Director has made any material misstatement of fact on any application for
life insurance purchased by the Company.
7.3 Excess Parachute Payment. Notwithstanding any provision of the Agreement to
the contrary, the Company shall not pay any benefit under this Agreement to
the extent the benefit would create an excise tax under the excess
parachute rules of Section 280G of the Code.
Article 8
Claims and Review Procedures
8.1 Claims Procedure. The Company shall notify any person or entity that makes
a claim against the Agreement (the "Claimant") in writing, within 90 days
of
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Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the Agreement. If the Company determines
that the Claimant is not eligible for benefits or full benefits, the notice
shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based,
(3) a description of any additional information or material necessary for
the Claimant to perfect his or her claim, and a description of why it is
needed, and (4) an explanation of the Agreement's claims review procedure
and other appropriate information as to the steps to be taken if the
claimant wishes to have the claim reviewed. If the Company determines that
there are special circumstances requiring additional time to make a
decision, the Company shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and
may extend the time for up to an additional 90 days.
8.2 Review Procedure. If the Claimant is determined by the Company not to be
eligible for benefits, or if the Claimant believes that he or she is
entitled to greater or different benefits, the Claimant shall have the
opportunity to have such claim reviewed by the Company by filing a petition
for review with the Company within 60 days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which
the Claimant believes entitle him or her to benefits or to greater or
different benefits. Within 60 days after receipt by the Company of the
petition, the Company shall afford the Claimant (and counsel, if any) an
opportunity to present his or her position to the Company verbally or in
writing, and the Claimant (or counsel) shall have the right to review the
pertinent documents. The Company shall notify the Claimant of its decision
in writing within the 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant
and the specific provisions of the Agreement on which the decision is
based. If, because of the need for a hearing, the 60-day period is not
sufficient, the decision may be deferred for up to another 60 days at the
election of the Company, but notice of this deferral shall be given to the
Claimant.
Article 9
Amendments and Termination
The Company may amend or terminate this agreement at any time prior to the
Director's termination of service by written notice to the Director. In no event
shall this Agreement be terminated without payment to the Director of the
deferral account balance attributable to the Director's deferrals and interest
credited on such amounts.
Article 10
Miscellaneous
10.1 Binder Effect. This Agreement shall bind the Director and the Company, and
their beneficiaries, survivors, executors, administrators and transferees.
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10.2 No Guarantee of Service. This Agreement is not a contract for services. It
does not give the Director the right to remain in the service of the
Company nor interfere with the Director's right to terminate services at
any time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
10.4 Tax Withholding. The Company shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be governed by
the laws of the State of Indiana, except to the extent preempted by the
laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits
under this Agreement. The benefits represent the mere promise by the
Company to pay such benefits. The rights to benefits are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors. Any insurance on the
Director's life is a general asset of the Company to which the Director and
the Director's beneficiary have no preferred or secured claim.
10.7 Reorganization. The Company shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing
company, firm, or person agrees to assume and discharge the obligations of
the Company under this Agreement.
10.8 Entire Agreement. This Agreement constitutes the entire agreement between
the Company and the Director as to the subject matter hereof. No rights are
granted to the Director by virtue of this Agreement other than those
specifically set forth herein.
10.9 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting for the Agreement;
(c) Maintaining a record of benefit payments; and
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(d) Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.
10.10 Named Fiduciary. The Company shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of
the plan including the employment of advisors and the delegation of
ministerial duties to qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company Officer have
signed this Agreement.
DIRECTOR: COMPANY:
First Community Bank & Trust
_________________________ By _________________________
Name of Director
Title _______________________
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EXHIBIT 1
TO
FIRST COMMUNITY BANK & TRUST
DIRECTOR
Deferral Election
I elect to defer my Fees received under this Agreement with the Company, as
follows:
-------------------------------------------------------------------------
Amount of Deferral Duration
-------------------------------------------------------------------------
[Initial and Complete one] [Initial One]
____ I elect to defer 100% of my ____ One Year only
Fees.
____ For _____ [Insert
(____) I elect to defer $__________ Number] Years
of my Fees.
(____) Until Termination
____ I elect not to defer any of my of Service
Fees.
____ Until __________,
__________ (date)
-------------------------------------------------------------------------
I understand that I may change the amount and duration of my deferrals by filing
a new election form with the Company; provided, however, that any subsequent
election will not by effective until the calendar year following the year in
which the new election is received by the Company.
Signature _____________________________
Date December 31, 2001
Accepted by the Company this 31st day of December 2001.
By ____________________________________
Title _________________________________
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FORM OF BENEFIT
I ELECT TO RECEIVE BENEFITS UNDER THE AGREEMENT IN THE FOLLOWING FORM:
(INITIAL ONE)
____ LUMP SUM
____ EQUAL MONTHLY INSTALLMENTS FOR 120 MONTHS
I UNDERSTAND THAT I MAY CHANGE THE FORM OF BENEFIT ELECTED BY FILING A NEW FORM
OF BENEFIT ELECTION
BENEFICIARY DESIGNATION
I DESIGNATE THE FOLLOWING AS BENEFICIARY OF BENEFITS UNDER THE DEFERRED
COMPENSATION AGREEMENT PAYABLE FOLLOWING DEATH:
PRIMARY:
CONTINGENT:
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE
NAME OF THE TRUSTEE AND THE EXACT DATE OF THE TRUST
AGREEMENT.
SIGNED:
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DATE: December 31, 2001
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