FORM OF EXECUTIVE AGREEMENT UNDER THE
ST. EDMOND'S FEDERAL SAVINGS BANK
INCENTIVE RETIREMENT AGREEMENT
THIS AGREEMENT is made effective the 1st day of January, 2004, by and
between ST. EDMOND'S FEDERAL SAVINGS Bank located in Philadelphia, Pennsylvania
(the "Company"), and [EXECUTIVE NAME] (the "Executive").
INTRODUCTION
To encourage the Executive to remain employed with the Company and to
provide the Executive with an incentive benefit, the Company is willing to
provide an opportunity to the Executive to share in the appreciation of Phantom
Stock of the Company. According to the terms of this Agreement, the Company will
provide a one-time Phantom Stock Allocation to a Incentive Retirement Account on
January 1, 2004, and determine the appreciation on the Phantom Stock Allocation
on an annual basis. Upon the occurrence of various triggering events, the
Company will pay the value of the Incentive Retirement Account in cash from its
general assets.
AGREEMENT
The Executive 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 "Account Balance" means the undistributed value of the Executive's
Incentive Retirement Account at any given point in time.
1.2 "Book Value Per Share" means the Company's Capital Account divided by
780,000 shares of Phantom Stock.
1.3 "Capital Account" means the net value of: (a) the Company's retained
earnings determined from the consolidated financial statements according to
Generally Accepted Accounting Principles ("GAAP"), plus (b) the Company's
general loan loss reserve, excluding (c) any market value adjustments determined
under Statement of Financial Accounting Standards Number 115, and (d) excluding
any new capital raised upon conversion of the Company to stock ownership.
1.4 "Change in Control" means any of the following:
(A) the control of voting proxies whether related to stockholders or
mutual members by any person, other than the Board of Directors of the
Bank, to direct more than 25% of the outstanding votes of the Bank, the
control of the election of a majority of the Bank's directors, or the
exercise of a controlling influence over the management or policies of the
Bank by any person or by persons acting as a group within the meaning of
Section 13(d) of the Exchange Act;
(B) an event whereby the OTS, FDIC or any other department, agency or
quasi-agency of the federal government cause or bring about, without the
consent of the Bank, a change in the corporate structure or organization of
the Bank;
(C) an event whereby the OTS, FDIC or any other agency or
quasi-agency of the federal government cause or bring about, without the
consent of the Bank, a taxation or involuntary distribution of retained
earnings or proceeds from the sale of securities to depositors, borrowers,
any government agency or organization or civic or charitable organization;
or
(D) a merger or other business combination between the Bank and
another corporate entity whereby the Bank is not the surviving entity.
In the event that the Bank shall convert in the future from mutual-to-stock
form, the term "Change in Control" shall also refer to:
(E) the sale of all, or substantially all, of the assets of the Bank
or the Parent;
(F) the merger or recapitalization of the Bank or the Parent whereby
the Bank or the Parent is not the surviving entity;
(G) a change in control of the Bank or the Parent, as otherwise
defined or determined by the Office of Thrift Supervision or regulations
promulgated by it; or
(H) the acquisition, directly or indirectly, of the beneficial
ownership (within the meaning of that term as it is used in Section 13(d)
of the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding voting securities of the Bank or the Parent by any person,
trust, entity or group. The term "person" means an individual other than
the Executive, or a corporation, partnership, trust, Bank, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any
other form of entity not specifically listed herein.
Notwithstanding anything else to the contrary set forth in this Agreement,
if (i) an agreement is executed by the Company providing for any of the
transactions or events constituting a Change in Control as defined herein, and
the agreement subsequently expires or is terminated
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without the transaction or event being consummated, and (ii) Executive's
employment did not terminate during the period after the agreement and prior to
such expiration or termination, for purposes of this Agreement it shall be as
though such agreement was never executed and no Change in Control event shall be
deemed to have occurred as a result of the execution of such agreement.
Furthermore, the conversion of the Company from a mutual to a stock form of
ownership, whether a mutual holding company or a full stock company, would not
be considered a Change in Control for purpose of this Agreement.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Disability" means the Executive's suffering a sickness, accident or
injury which has been determined by the carrier of any group disability
insurance policy provided by the Company or made available by the Company to its
employees and covering the Executive, or by the Social Security Administration,
to be a disability rendering the Executive totally and permanently disabled. The
Executive must submit proof to the Company of the carrier's or Social Security
Administration's determination upon the request of the Company.
1.7 "Early Termination" means that the Executive, prior to "Normal
Retirement Date," has terminated employment with the Company for reasons other
than Termination for Cause (see Section 7.2), death, or following a Change in
Control.
1.8 "Effective Date" means the effective date of this Agreement, January 1,
2004.
1.9 "Incentive Retirement Account" means the incentive retirement account
established under Article 2 of this Agreement and subject to valuation under
Article 3 of this Agreement.
1.10 "Normal Retirement Date" means the Executive's sixty-fifth (65th)
birthday.
1.11 "Phantom Stock" means the hypothetical number of shares of the
Company's common stock that would be issued at an initial price of $10.00 per
share. The Phantom Stock is used solely as a measurement tool; no Company stock
will be purchased, sold, registered, or issued in connection with this
Agreement. The Executive will only be entitled to cash, and not stock in lieu of
cash. The Executive will not receive any stock or stock rights by virtue of this
Agreement.
1.12 "Plan Year" means, for the first year, the period from the Effective
Date through October 31, 2004. Thereafter, "Plan Year" means each twelve month
period commencing on November 1st and ending on October 31st of the following
calendar year.
1.13 "Termination of Employment" means the Executive ceases to be employed
by the Company for any reason, other than an approved leave of absence.
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1.14 "Years of Service" means the total number of full years for which
Executive has been employed by the Company. For purposes of this definition, a
year of service shall be a 365 day period (or 366 day period in the case of a
leap year) that, for the first year of service, commences on the date Executive
is hired and that, for any subsequent year, commences on an anniversary of that
hiring date.
Article 2
Incentive Retirement Allocation
The Executive's Incentive retirement Account ("Incentive Retirement
Account") shall be established with a one-time allocation of [NUMBER OF SHARES]
shares of Phantom Stock as of the Effective Date of this Agreement (the "Phantom
Stock Allocation").
Article 3
Incentive Retirement Account
3.1 Establishing and Crediting. The Company shall establish a Incentive
Retirement Account on its books for the Executive. The value of the Incentive
Retirement Account is determined as follows:
3.1.1 Valuation for Plan Years. On the last day of each Plan Year, the
value of the Incentive Retirement Account is determined by multiplying the
Phantom Stock Allocation by the difference between the Initial Value Per
Share and the Current Value Per Share, as defined below.
(a) "Initial Value Per Share" is the beginning Book Value Per
Share of the Phantom Stock, which is $10.00, multiplied by the
Applicable Market Value Multiple, which is .80, for an Initial Value
Per Share of $8.00.
(b) "Current Value Per Share" is determined by multiplying the
current Book Value Per Share.
An example of the calculation of a Incentive Retirement Account Balance
is as follows:
- --------- ----------------------------------------------------------------------
Assumptions Results
- --------- ----------------------------------------------------------------------
(A) Incentive Retirement Allocation 1,000
- --------- ----------------------------------------------------------------------
(B) Initial Value Per Share $8.00
- --------- ----------------------------------------------------------------------
(C) Capital Account at the Measurement Date $8,424,000
- --------- ----------------------------------------------------------------------
(D) Total Outstanding Phantom Shares 780,000
- --------- ----------------------------------------------------------------------
(E) Current Value Per Share $8.64
- --------- ----------------------------------------------------------------------
(F) Phantom Price Appreciation = (E) minus (B) $0.64
- --------- ----------------------------------------------------------------------
(G) Incentive Retirement Account Value = (A) times (F) $640
- --------- ----------------------------------------------------------------------
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3.1.2 Interest on Incentive Retirement Account Balance. Unless
otherwise specified in this Agreement, no interest shall be credited to the
Incentive Retirement Account.
3.1.3 Conversion. It is intended that increases in the Company's Book
Value Per Share will be based solely on earnings of the Company after the
Effective Date. Therefore, in the event of the Company's conversion to a
stock company or a mutual holding company, the additional capital raised
through such conversion will not be credited to the Executive's Incentive
Retirement Account.
3.2 Statement of Accounts. The Company shall provide to the Executive,
within 90 days following the end of each Plan Year this Agreement is in effect,
a statement setting forth the Incentive Retirement Account Balance, stating the
number of Phantom Stock shares and detailing the calculation of the value of the
Executive's Incentive Retirement Account.
3.3 Accounting Device Only. The Incentive Retirement Account is solely a
device for measuring amounts to be paid under this Agreement. The Incentive
Retirement Account is not a trust fund of any kind. The Executive 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 Executive's rights
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by the Executive's
creditors.
Article 4
Benefit Payments
4.1 Benefit at Normal Retirement Date. If the Executive reaches the Normal
Retirement Date while in continuous employment with the Company, the Company
shall pay to the Executive the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement. However, if there has been a Change in
Control prior to the Normal Retirement Date, the Executive's benefits shall be
determined pursuant to Section 4.3.
4.1.1 Amount of Benefit. The benefit under this Section 4.1 is the
value of the Incentive Retirement Account at the end of Plan Year 10.
4.1.2 Payment of Benefit. The benefit will be in the form elected by
the Executive in Exhibit 1.
4.1.3 Option to Defer Receipt of Benefits. In the event the Executive
wishes to delay receipt of benefit payments under this Section 4.1, Exhibit
2 must be provided to the Company at least thirteen (13) months prior to
the Normal Retirement Date. The Executive's Incentive Retirement Account
will continue to increase in value at two percent (2%) above the 10 Year
Treasury Rate. The 10 Year Treasury Rate shall be determined using the
average rate in effect for the month of December immediately prior to
commencement of benefit payments. The 10 Year Treasury Rate used for this
purpose shall
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not be less than 4.00%. Based on the Account Balance on the Plan Year ended
immediately prior to the date specified, the Account Balance shall be
annuitized according to the election made for the Normal Retirement Date in
Exhibit 1.
4.2 Early Termination Benefit. Upon Early Termination, the Company shall
pay to the Executive 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 amount under this Section 4.2 is
the value of the Incentive Retirement Account for the Plan Year ended
immediately prior to the Executive's Termination of Employment, multiplied
by the Vesting Percentage pursuant to the following vesting schedule:
--------------------------------------- -----------------------------------
Years of Service Completed Vesting Percentage
--------------------------------------- -----------------------------------
Less than 1 0%
--------------------------------------- -----------------------------------
1 33%
--------------------------------------- -----------------------------------
2 67%
--------------------------------------- -----------------------------------
3 or more 100%
--------------------------------------- -----------------------------------
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 90 days after Termination of Employment. No
additional earnings shall be credited to the Account after Termination of
Employment.
4.3 Change in Control Benefit. If the Executive is employed by the Company
at the date a Change in Control occurs, the Company shall pay to the Executive
one of the benefits described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit amount under this Section 4.3.1
is the projected Account Balance for the Executive's Normal Retirement Date
assuming Termination of Employment at Normal Retirement Age and assuming a
constant Return on Equity of eight and zero one-hundredths percent (8.00%)
from the Change in Control until Normal Retirement Date.
4.3.2 Payment of Benefit. The Company shall pay the benefit as
described in Section 4.1.2, commencing within 90 days following Normal
Retirement Date. The benefit shall be paid in the form elected in Exhibit
1. Alternatively, if so elected at least thirteen (13) months prior to a
Change in Control, the Director may receive the discounted Account Balance
shown on Schedule A for the Plan Year in which the Change in Control takes
place as a lump sum within 90 days following a Change in Control.
4.4 Disability Benefit. Upon Termination of Employment due to Disability
prior to the Normal Retirement Date, the Company shall pay to the Executive the
benefit described in this Section 4.4 in lieu of any other benefit under this
Agreement.
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4.4.1 Amount of Benefit. The benefit amount under this Section 4.4 is
the value of the Incentive Retirement Account for the Plan Year ended
immediately prior to termination. The Executive shall be considered to be
100 percent vested even if the Executive has not completed three Years of
Service at the date of termination due to Disability.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive as specified in Exhibit 1, commencing within 90 days of the date
of termination due to Disability.
Article 5
Death Benefits
5.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive'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. If death occurs during the months of
November, December, January, February, March, or April, the benefit in this
Section 5.1 is the Account Value for the Plan Year ended immediately prior
to the Executive's death. If death occurs during May, June, July, August,
September, or October, the benefit in this Section 5.1 is the Account Value
for the end of the Plan Year in which the Executive's death takes place.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive's designated beneficiary as elected in Exhibit 1, commencing
within 90 days of the receipt of the Executive's death certificate.
5.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
5.3 Death After Termination of Employment But Before Payment of Benefit
Commences. If the Executive is entitled to a benefit under this Agreement, but
dies prior to the payment of said benefit, the Company shall pay the same
benefit payment to the Executive's beneficiary that the Executive was entitled
to prior to death except that the benefit payment shall be paid in a lump sum
within 90 days of the receipt of the Executive's death certificate.
Article 6
Beneficiaries
6.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at
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any time by filing a new designation. However, designations will only be
effective if signed by the Executive and accepted by the Company during the
Executive's lifetime. The Executive's beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases the Executive, or if the
Executive names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Executive dies without a valid beneficiary designation, all
payments shall be made to the Executive'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 incompetency,
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 Excess Parachute or Golden Parachute Payment. Notwithstanding any
provision of this Agreement to the contrary, the Company shall not pay any
benefit under this Agreement to the extent the benefit would be an excess
parachute payment under Section 280G of the Code or would be a prohibited golden
parachute payment pursuant to 12 C.F.R. ss.359.2 and for which the appropriate
federal banking agency has not given written consent to pay pursuant to 12
C.F.R. ss.359.4.
7.2 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement if
the Company terminates the Executive's employment for:
(a) Gross negligence or gross neglect of duties;
(b) Commission of a felony or of a gross misdemeanor involving moral
turpitude; or
(c) Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Executive's
employment and resulting in an adverse effect on the Company.
7.3 Removal. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not pay any benefit under this Agreement if the
Executive is subject to a final removal or prohibition order issued by an
appropriate federal banking agency pursuant to Section 8(e) of the Federal
Deposit Insurance Act.
7.4 Competition after Termination of Employment. The Executive shall
forfeit his right to any further benefits if the Executive, without the prior
written consent of the Company, violates
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the following described restrictive covenants.
7.4.1 Non-compete Provision. The Executive shall not, for the term of
this Plan and until all benefits have been distributed, directly or
indirectly, either as an individual or as a proprietor, stockholder,
partner, officer, director, employee, agent, consultant or independent
contractor of any individual, partnership, corporation or other entity
(excluding an ownership interest of three percent (3%) or less in the stock
of a publicly traded company):
(i) become employed by, participate in, or be connected in any
manner with the ownership, management, operation or control
of any bank, savings and loan or other similar financial
institution if the Executive's responsibilities will include
providing banking or other financial services within the
twenty-five (25) miles of any office maintained by the
Company as of the date of the termination of the Executive's
employment;
(ii) participate in any way in hiring or otherwise engaging, or
assisting any other person or entity in hiring or otherwise
engaging, on a temporary, part-time or permanent basis, any
individual who was employed by the Company as of the date of
termination of the Executive's employment;
(iii)assist, advise, or serve in any capacity, representative or
otherwise, any third party in any action against the Company
or transaction involving the Company;
(iv) sell, offer to sell, provide banking or other financial
services, assist any other person in selling or providing
banking or other financial services, or solicit or otherwise
compete for, either directly or indirectly, any orders,
contract, or accounts for services of a kind or nature like
or substantially similar to the financial services performed
or financial products sold by the Company (the preceding
hereinafter referred to as "Services"), to or from any
person or entity from whom the Executive or the Company, to
the knowledge of the Executive provided banking or other
financial services, sold, offered to sell or solicited
orders, contracts or accounts for Services during the three
(3) year period immediately prior to the termination of the
Executive's employment;
(v) divulge, disclose, or communicate to others in any manner
whatsoever, any confidential information of the Company, to
the knowledge of the Executive , including, but not limited
to, the names and addresses of customers or prospective
customers, of the Company, as they may have existed from
time to time, of work performed or services rendered for any
customer, any
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method and/or procedures relating to projects or other work
developed for the Company, earnings or other information
concerning the Company. The restrictions contained in this
subparagraph (v) apply to all information regarding the
Company, regardless of the source who provided or compiled
such information. Notwithstanding anything to the contrary,
all information referred to herein shall not be disclosed
unless and until it becomes known to the general public from
sources other than the Executive.
7.4.2 Judicial Remedies. In the event of a breach or threatened breach
by the Executive of any provision of these restrictions, the Executive
recognizes the substantial and immediate harm that a breach or threatened
breach will impose upon the Company, and further recognizes that in such
event monetary damages may be inadequate to fully protect the Company.
Accordingly, in the event of a breach or threatened breach of this
agreement, the Executive consents to the Company's entitlement to such ex
parte, preliminary, interlocutory, temporary or permanent injunctive, or
any other equitable relief, protecting and fully enforcing the Company's
rights hereunder and preventing the Executive from further breaching any of
his obligations set forth herein. The Executive expressly waives any
requirement, based on any statute, rule of procedure, or other source, that
the Company post a bond as a condition of obtaining any of the
above-described remedies. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies available to the Company at
law or in equity for such breach or threatened breach, including the
recovery of damages from the Executive. The Executive expressly
acknowledges and agrees that: (i) the restrictions set forth in Section
7.4.1 hereof are reasonable, in terms of scope, duration, geographic area,
and otherwise, (ii) the protections afforded the Company in Section 7.4.1
hereof are necessary to protect its legitimate business interest, (iii) the
restrictions set forth in Section 7.4.1 hereof will not be materially
adverse to the Executive's employment with the Company, and (iv) his
agreement to observe such restrictions forms a material part of the
consideration for this agreement.
7.4.3 Overbreadth of Restrictive Covenant. It is the intention of the
parties that if any restrictive covenant in this agreement is determined by
a court of competent jurisdiction to be overly broad, then the court should
enforce such restrictive covenant to the maximum extent permitted under the
law as to area, breadth and duration.
7.4.4 Change in Control. The non-compete provision detailed in Section
7.4.1 hereof shall not be enforceable following a Change in Control.
7.4 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Executive commits suicide within two years after the date
of this Agreement, or if the Executive has made any material misstatement of
fact on any application for life insurance purchased by the Company, or any
other reason, provided however that the Company shall evaluate the reason for
the denial, and upon advice of Counsel and in its sole discretion, consider
judicially challenging any denial.
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Article 8
Claims and Review Procedures
8.1 Claims Procedure. An Executive or beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows:
8.1.1 Initiation - Written Claim. The claimant initiates a claim by
submitting to the Company a written claim for the benefits.
8.1.2 Timing of Company Response. The Company shall respond to such
claimant within 90 days after receiving the claim. If the Company
determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by an
additional 90 days by notifying the claimant in writing, prior to the end
of the initial 90-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date
by which the Company expects to render its decision.
8.1.3 Notice of Decision. If the Company denies part or all of the
claim, the Company shall notify the claimant in writing of such denial. The
Company shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set forth:
8.1.3.1 The specific reasons for the denial,
8.1.3.2 A reference to the specific provisions of the Agreement
on which the denial is based,
8.1.3.3 A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation of
why it is needed,
8.1.3.4 An explanation of the Agreement's review procedures and
the time limits applicable to such procedures, and
8.1.3.5 A statement of the claimant's right to bring a civil
action under ERISA Section 502(a) following an adverse benefit
determination on review.
8.2 Review Procedure. If the Company denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Company of
the denial, as follows:
8.2.1 Initiation - Written Request. To initiate the review, the
claimant, within 60 days after receiving the Company's notice of denial,
must file with the Company a written request for review.
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8.2.2 Additional Submissions - Information Access. The claimant shall
then have the opportunity to submit written comments, documents, records
and other information relating to the claim. The Company shall also provide
the claimant, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the claimant's claim for
benefits.
8.2.3 Considerations on Review. In considering the review, the Company
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.
8.2.4 Timing of Company Response. The Company shall respond in writing
to such claimant within 60 days after receiving the request for review. If
the Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by an
additional 60 days by notifying the claimant in writing, prior to the end
of the initial 60-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date
by which the Company expects to render its decision.
8.2.5 Notice of Decision. The Company shall notify the claimant in
writing of its decision on review. The Company shall write the notification
in a manner calculated to be understood by the claimant. The notification
shall set forth:
8.2.5.1 The specific reasons for the denial,
8.2.5.2 A reference to the specific provisions of the Agreement
on which the denial is based,
8.2.5.3 A statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in
applicable ERISA regulations) to the claimant's claim for benefits,
and
8.2.5.4 A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
Article 9
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive, except for the automatic termination
provisions specified in Article 7.
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Article 10
Miscellaneous
10.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, successors,
administrators and transferees.
10.2 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment 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 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. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.5 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.6 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the Commonwealth of Pennsylvania, except to the extent
preempted by the laws of the United States of America.
10.7 Unfunded Arrangement. The Executive and 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 Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
10.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive 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;
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(b) Establishing and revising the method of accounting for the
Agreement;
(c) Maintaining a record of benefit payments; and
(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 this Agreement. It may delegate to others certain aspects of
the management and operational responsibilities including the employment of
advisors and the delegation of ministerial duties to qualified individuals.
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IN WITNESS WHEREOF, the Executive and the Company have signed this
Agreement.
EXECUTIVE ST. EDMOND'S FEDERAL SAVINGS Bank
____________________________ By _______________________________
[EXECUTIVE NAME]
Title ____________________________
Date: ______________________ Date: ___________________________
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EXHIBIT 1
---------
FORM OF BENEFIT ELECTION
ST. EDMOND'S FEDERAL SAVINGS Bank
INCENTIVE RETIREMENT AGREEMENT
I elect to receive benefits under the Agreement in the following form
(initial appropriate box):
4.1.2 Normal Retirement Date
----------------------
___ The Company shall pay the benefit to the Executive in 24 equal monthly
installments commencing within 90 days following the Executive's Normal
Retirement Date. The Company shall credit interest at an annual rate
equal to two percent (2%) above the 10 Year Treasury Rate. The 10 Year
Treasury Rate shall be determined using the average rate in effect for
the month of December immediately prior to commencement of benefit
payments. The 10 Year Treasury Rate used for this purpose shall not be
less than 4.00%.
___ The Company shall pay the benefit to the Executive in 60 equal monthly
installments commencing within 90 days following the Executive's Normal
Retirement Date. The Company shall credit interest at an annual rate
equal to two percent (2%) above the 10 Year Treasury Rate. The 10 Year
Treasury Rate shall be determined using the average rate in effect for
the month of December immediately prior to commencement of benefit
payments. The 10 Year Treasury Rate used for this purpose shall not be
less than 4.00%.
___ The Company shall pay the benefit to the Executive in 120 equal monthly
installments commencing within 90 days following the Executive's Normal
Retirement Date. The Company shall credit interest at an annual rate
equal to two percent (2%) above the 10 Year Treasury Rate. The 10 Year
Treasury Rate shall be determined using the average rate in effect for
the month of December immediately prior to commencement of benefit
payments. The 10 Year Treasury Rate used for this purpose shall not be
less than 4.00%.
4.3.2 Change in Control Benefit
-------------------------
___ The Company shall pay the benefit to the Director in a lump sum
within 90 days of the earlier of: (a) the Director's Termination of
Service or (b) the Director's Normal Retirement Date.
___ The Company shall pay the discounted benefit to the Director in a lump
sum within 90 days of the Change in Control.
4.4.2 Disability Benefit
------------------
___ The Company shall pay the benefit to the Executive in a lump sum within
90 days of the date of the Executive's termination due to Disability.
___ The Company shall pay the benefit to the Executive in 24 equal monthly
installments commencing within 90 of the date of the Executive's
termination due to Disability. The Company shall credit interest at an
annual rate equal to two percent (2%) above the 10 Year Treasury Rate.
The 10 Year Treasury Rate shall be determined using the average rate in
effect for the month of December immediately prior to commencement of
benefit payments. The 10 Year Treasury Rate used for this purpose shall
not be less than 4.00%.
___ The Company shall pay the benefit to the Executive in 60 equal monthly
installments commencing within 90 days of the date of the Executive's
termination due to Disability. The Company shall credit interest at an
annual rate equal to two percent (2%) above the 10 Year Treasury Rate.
The 10 Year Treasury Rate shall be determined using the average rate in
effect for the month of December immediately prior to commencement of
benefit payments. The 10 Year Treasury Rate used for this purpose shall
not be less than 4.00%.
___ The Company shall pay the benefit to the Executive in 120 equal monthly
installments commencing within 90 days of the date of the Executive's
termination due to Disability. The Company shall credit interest at an
annual rate equal to two percent (2%) above the 10 Year Treasury Rate.
The 10 Year Treasury Rate shall be determined using the average rate in
effect for the month of December immediately prior to commencement of
benefit payments. The 10 Year Treasury Rate used for this purpose shall
not be less than 4.00%.
5.1.2 Death During Active Service
---------------------------
___ The Company shall pay the benefit to the Executive's designated
beneficiary in a lump sum commencing within 90 days of the date of the
receipt of the Executive's death certificate.
___ The Company shall pay the benefit to the Executive's designated
beneficiary in 24 equal monthly installments commencing within 90 of the
date of the receipt of the Executive's death certificate. The Company
shall credit interest at an annual rate equal to two percent (2%) above
the 10 Year Treasury Rate. The 10 Year Treasury Rate shall be determined
using the average rate in effect for the month of December immediately
prior to commencement of benefit payments. The 10 Year Treasury Rate used
for this purpose shall not be less than 4.00%.
___ The Company shall pay the benefit to the Executive's designated
beneficiary in 60 equal monthly installments commencing within 90 days of
the date of the receipt of the Executive's death certificate. The Company
shall credit interest at an annual rate equal to two percent (2%) above
the 10 Year Treasury Rate. The 10 Year Treasury Rate shall be determined
using the average rate in effect for the month of December immediately
prior to commencement of benefit payments. The 10 Year Treasury Rate used
for this purpose shall not be less than 4.00%.
___ The Company shall pay the benefit to the Executive's designated
beneficiary in 120 equal monthly installments commencing within 90 days
of the date of the receipt of the Executive's death certificate. The
Company shall credit interest at an annual rate equal to two percent (2%)
above the 10 Year Treasury Rate. The 10 Year Treasury Rate shall be
determined using the average rate in effect for the month of December
immediately prior to commencement of benefit payments. The 10 Year
Treasury Rate used for this purpose shall not be less than 4.00%.
Signature ___________________________
Date _______________________________
Received by the Company this ________ day of ___________________, 200_.
By _________________________________
Title ________________________________
EXHIBIT 2
TO
ST. EDMOND'S FEDERAL SAVINGS Bank
INCENTIVE RETIREMENT AGREEMENT
Option to Defer Receipt of Benefits
[EXECUTIVE NAME]
According to the terms of Section 4.1.3 of this Agreement, I understand
that I may elect to defer receipt of my Incentive Retirement Account beyond
Normal Retirement Date, provided that I make such election at least thirteen
(13) months prior to Normal Retirement Date and provided I continue service on
the Company's Board. Accordingly, I elect to commence receipt of benefits on the
month immediately following:
_____ Termination of Employment
_____ Specified Date: ______________________________________
or Termination of Employment, whichever comes first
I understand that I may not change these options within thirteen (13) months of
or after reaching my Normal Retirement Date.
Signature ______________________________
Date ___________________________________
Accepted by the Company this ______ day of _________________, 200_.
By ______________________________________
Title ___________________________________
BENEFICIARY DESIGNATION
ST. EDMOND'S FEDERAL SAVINGS Bank
INCENTIVE RETIREMENT AGREEMENT
[EXECUTIVE NAME]
I designate the following as beneficiary of any death benefits under this
Agreement:
Primary: ______________________________________________________________________
________________________________________________________________________________
Contingent: ___________________________________________________________________
________________________________________________________________________________
Note:To name a trust as beneficiary, please provide the name of the trustee(s)
and the exact name and date of the trust agreement.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.
Signature ______________________________
Date ___________________________________
Accepted by the Company this ______ day of _________________, 200_.
By _____________________________________
Title __________________________________