Exhibit 10(a)
2005 DEFERRED COMPENSATION PLAN FOR DIRECTORS
BE IT RESOLVED by the Directors of First Federal Bank ("Bank"), this 16th
day of December 2004, that the following deferred compensation plan for
directors of the Bank ("Plan") is hereby adopted.
1. Purpose: The purpose of this Plan is to enable Directors of the Bank to
-------
elect to receive their fees as members of the Board of Directors and
special compensation for services on Committees of the Board in the form
most advantageous to them. The Plan permits them to elect to receive this
compensation either currently or to defer it and to further elect that it
be held for them as a contractual obligation of the Bank. The Plan as
adopted is intended to comply with the requirements of Section 409A of the
Internal Revenue Code ("Code") promulgated in the 2004 American Jobs
Creation Act ("AJCA").
2. Effective Date: The Plan shall be effective from and after January 1, 2005.
--------------
3. Eligibility: All Directors of the Bank who are Directors as of January 1 of
-----------
any year will be eligible to participate in the Plan during that year.
4. Compensation Covered by the Plan: The compensation covered by the Plan
----------------------------------
("Covered Compensation") will be fees paid to members of the Board of
Directors for their services as such and for services on Committees of the
Board of Directors. Compensation for Directors who are also Bank employees
and special compensation for services rendered to the Bank as part of their
business or professional activities, such as legal, investment advisory and
like services, will not be Covered Compensation for purposes of the Plan.
5. Election to Defer: Each Director may, in lieu of receiving current covered
-----------------
compensation, elect to defer all or one-half of such Director's Covered
Compensation by filing an election in the form of Exhibit A hereto. Such
election form must be filed in the manner set forth in Paragraph 8 hereof.
6. Investment of Deferred Covered Compensation in Cash: The Bank will maintain
---------------------------------------------------
a special memorandum account of such Covered Compensation for the Directors
who make a deferral election. As of the last day of each month, the Bank
shall credit to the special memorandum account the amounts of Covered
Compensation accrued for that month. At the end of each month, the special
memorandum account will be credited with interest on the amount in such
account at the beginning of that month at a rate equal to the average
weighted cost of certificates of deposit for the previous month.
7. Distribution of Deferred Covered Compensation: At the time of election to
----------------------------------------------
defer, each Director also shall elect the time at which and manner in which
the value of the compensation so deferred shall be distributed to the
Director. Such election shall be irrevocable, except as set forth herein. A
Director (or his or her designee) shall be entitled to elect to receive, or
to commence receiving, his or her deferred compensation as follows:
(a) in the event of the Director's death (provided, in the case of the
Director's death, the deferred compensation will be paid to the
Director's beneficiary designated on Exhibit A or on a subsequently
filed beneficiary designation);
(b) in the event the Director becomes "disabled" as defined in Code
Section 409A. For these purposes, a Director will be disabled if the
Director is (i) unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months. A Director will
also be considered disabled hereunder if the Director's disability
satisfies any other disability definition set forth in Treasury
regulations or other guidance issued under Code Section 409A; and
(c) upon "separation of service" as a Director of the Bank. For these
purposes, whether the Director has had a "separation from service"
will be determined in accordance with Code Section 409A, and any
Treasury regulations or other guidance issued thereunder.
Each Director shall be entitled to elect to receive the value of his or her
deferred compensation in either a lump sum or in approximately equal
monthly installments over a period of ten (10) years. A Director may elect
to receive his or her deferred compensation in monthly installments over a
period of time shorter than ten years.
8. Manner of Election: Prior to January 1 of each year, each Director shall be
------------------
entitled to file an instrument in the form of Exhibit A hereto with the
administrator exercising his or her election under Section 5 of the Plan.
Such election shall be irrevocable with respect to the calendar year
following the year in which it is filed. Subject to Section 409A and any
Treasury regulations or other guidance issued thereunder, such election may
not be revoked or amended at any time during the calendar year immediately
following its filing. An election once filed shall continue in effect from
year to year until revoked or amended by the Director. If a Director fails
to file an election under the Plan or properly revokes a prior election,
his or her covered compensation shall be paid to him or her in cash on a
non-deferred basis.
9. Administration of the Plan: The administrator of the Plan shall be the
---------------------------
President of the Bank or a Committee of officers or employees of the Bank
appointed by the President. The President shall, from time to time, advise
Directors as to the identity of the administrator. The administrator shall
interpret the Plan and make all decisions with respect to the rights of
Directors hereunder, subject to the limitations set forth in Code Section
409A and any Treasury regulations or other guidance issued thereunder.
10. Change of Form or Timing of Distribution: A Director may not amend a prior
----------------------------------------
deferral election to accelerate the form of distribution from installment
to lump sum or to otherwise accelerate the time of distribution, unless
such accleration is specifically permitted by Code Section 409A , Treasury
regulations and/or other guidance issued thereunder. Unless otherwise
specified in Code Section 409A, Treasury regulations or other guidance
issued thereunder, a Director may delay distributions or modify a previous
deferral election to change from a lump sum distribution to annual
installments upon separation from service, provided, however, if the
Director does so, the following additional conditions must be satisfied:
(i) the new deferral election is not effective for 12 months, (ii) the
original distribution date must be at least 12 months from the date of the
change in the election and (iii) the new distribution date must be at least
five (5) years after the original distribution date.
11. Amendment or Termination: This Plan may be amended or terminated at any
-------------------------
time by the Board of Directors of the Bank, provided, however, that
following such amendment or termination, distribution of a Director's
deferred compensation will not be accelerated but will continue to be made
in accordance with the Directors previous deferral election.
Notwithstanding anything herein to the contrary, if acceleration is
permitted following termination of the Plan in accordance with Treasury
regulations or other IRS guidance, then acceleration will be permitted but
only in accordance with such guidance.
12. Interests in compensation deferred for the directors shall not be
assignable or transferable except by will or the laws of descent and
distribution. The establishment of this Plan gives the participant no right
or security interest in any asset of the Bank or its subsidiaries.
13. This Plan is intended to comply with the requirements of Code Section 409A
and the Treasury Regulations and other guidance issued thereunder. In the
event that a provision set forth herein provides greater limitations than
required under such guidance, the Plan shall be construed in accordance
with the guidance.
ADOPTED this 16th day of December 2004.
FIRST FEDERAL BANK
By: /s/ Barry Backhaus
-------------------------------
Barry Backhaus
President and CEO
and /s/ Suzette F. Hoevet
-------------------------------
Suzette F. Hoevet
Corporate Secretary
EXHIBIT A
DEFERRED COMPENSATION PLAN FOR DIRECTORS OF
FIRST FEDERAL BANK
Election as to Deferral of Compensation
The undersigned, a Director of First Federal Bank ("Bank"), hereby elects
to defer:
_______ All
_______ One half
of my covered compensation under the Deferred Compensation Plan for Directors of
the Bank, and hereby directs that all of my deferred compensation be credited to
the special memorandum account for such deferred compensation at the Bank.
1. Time of Distribution: The value of my deferred compensation shall be
--------------------
distributed to me, or such distribution shall commence:
Upon the occurrence of the following events:
(check all that apply)
_______ (a) death;
_______ (b) in the event I become disabled;
_______ (c) termination of services as a director of the Bank;
2. Manner of Distribution: Distribution shall be made as follows:
----------------------
(check only one)
_______ (a) in a lump sum
_______ (b) in approximately equal monthly installments over 10 years
_______ (c) in approximately equal monthly installments over _____ years
(I understand that a change in form of distribution may only be made in
accordance with the restrictions set forth in the Plan, and subject to
Treasury regulations and guidance.)
3. I designate ________________________________________ as my beneficiary to
receive any amounts payable under the Plan in the event of my death. (I
understand that I may change my beneficiary designation at any time by
filing a written change of beneficiary with the administrator.)
The foregoing shall be effective January 1, 2005, and shall remain in
effect until revoked or amended by me, which revocation shall be effective on
January 1 following the revocation.
Executed on ________________________, 20____.
Director _______________________________________