MILLINGTON SAVINGS BANK
EXECUTIVE INCENTIVE RETIREMENT PLAN AGREEMENT
As Amended and Restated
THIS AGREEMENT, made and entered into this 17th day of July, 2006,
by and between Millington Savings Bank, Millington, New Jersey, a State of
New Jersey chartered savings bank (hereinafter referred to as the "Bank"),
and Gary T. Jolliffe, an Executive of the Bank (hereinafter referred to as
the "Executive");
WHEREAS, it is deemed advisable and in the best interests of the Bank
to offer such Executive with additional financial incentives in the form of
deferred compensation to encourage such continued employment service to the
Bank, and to remain market competitive in the Bank's ability to offer
retirement income security to such Executive;
WHEREAS, the Bank and the Executive have previously entered into the
Executive Incentive Retirement Plan Agreement (hereinafter referred to as the
"Executive Plan"), effective May 10, 2004, and
WHEREAS, certain revisions to the Executive Plan are necessary in order
to conform such Executive Plan to the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended ("Code") and related regulations and
notices promulgated thereunder, with such revisions to be effective as of
January 1, 2005.
NOW THEREFORE, BE IT RESOLVED that the Executive Plan shall be revised,
amended and restated in its entirety, effective as of January 1, 2005, as
follows:
I. EXECUTIVE'S PARTICIPATION IN THE EXECUTIVE PLAN
So long as the Executive shall continue to serve as the President
and Chief Executive Officer of the Bank, or other senior
executive position as determined within the discretion of the
Board of Directors ("Board") of the Bank, the Executive shall be
eligible to participate in this Executive Plan. The Plan Year for
the Executive Plan shall be the same as the fiscal year for the
Bank (July 1 through June 30).
II. AWARD
The Board may make an Award from time to time in accordance with
this Agreement on behalf of the Executive in consideration for
the Executive's continued services and job performance as
determined in the sole discretion of the Board of the Bank based
upon the criteria attached hereto as Exhibit "A" and fully
incorporated herein by reference. Said criteria in Exhibit "A"
may be modified by the Board in its sole discretion at any time.
Payment of such Award to the Executive shall be deferred in
accordance with this Agreement and shall be credited for the
benefit of the Executive in the manner and by the terms and
conditions specified in Paragraph IV herein.
III. VESTING
The Executive's accrual of Awards and earnings thereon as
recorded in the Executive Incentive Retirement Plan Account shall
be deemed earned and non-forfeitable in accordance with the
Scheduled set forth below determined as the sum of the age of
such
Executive and the years of service of such Executive determined
as of the first day of each Plan Year; with years of service
determined in accordance with the definition set forth in any
Internal Revenue Code ("Code") Section 401(a) tax qualified
defined benefit plan sponsored by the Company or any Code Section
401(a) tax qualified defined contribution plan, if no such
defined benefit plan shall be in effect at such time, any as
follows:
Sum of Age and Years of Service Vesting/Earned %
------------------------------- ----------------
85 100%
80 95%
75 90
70 85
65 80
60 75
55 70
50 65
45 60
Notwithstanding the foregoing, on and subsequent to the Executive
attaining age sixty-five (65) while in the continuous employ of
the Bank, upon the Executive's death while in the continuous
employ of the Bank or upon a Change in Control of the Bank (as
defined hereinafter), the Executive shall be one hundred percent
(100%) vested in the Executive Incentive Retirement Plan Account.
IV. CREDITS TO INCENTIVE RETIREMENT PLAN ACCOUNT
The Bank shall establish a bookkeeping reserve account for the
benefit of the Executive (hereinafter referred to as the
"Executive Incentive Retirement Plan Account"), which shall be
credited and adjusted as of the date of grant of each Award as
defined in Paragraph II.
V. INTEREST ON THE INCENTIVE RETIREMENT PLAN ACCOUNT
The Executive Incentive Retirement Plan Account shall be credited
with earnings on such account in an amount that is in addition to
the Award(s) credited under Paragraph IV. Such amount shall be
determined by multiplying the balance of the Executive's Account
by a rate of interest equal to the New York average prime lending
rate as quoted in the Wall Street Journal, Eastern Edition. Such
rate shall be adjusted quarterly as of each January 1, April 1,
July 1 and October 1, but in no event shall such per annum prime
rate be less than 4% per annum or an amount greater than 12% per
annum. Such earnings amount shall be credited quarterly as long
as there is a balance in the Executive's Incentive Retirement
Plan Account as of the last day of each calendar quarter.
VI. NATURE OF THE INCENTIVE RETIREMENT PLAN ACCOUNT
The Executive Incentive Retirement Plan Account shall be utilized
solely as a device for the measurement and determination of the
amount maintained as a book reserve for the benefit of the
Executive under the Executive Plan and to be paid to the
Executive at the times hereinafter specified, and the Bank shall
not segregate any of its assets in order to satisfy any
obligations under this Agreement. The Executive Incentive
Retirement Plan Account shall not constitute or be treated as a
trust fund of any kind. It is understood that all amounts
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credited to the Executive Incentive Retirement Plan Account shall
be for the sole purpose of bookkeeping and remain the sole
property of the Bank, and that the Executive shall have no
ownership rights of any nature with respect thereto. The
Executive's rights are limited to the right to receive payments
as hereinafter provided, and the Executive's position with
respect thereto is that of a general, unsecured creditor of the
Bank.
VII. PAYMENT OF EXECUTIVE'S DEFERRED COMPENSATION
Subject to Paragraph XIII, the amounts in the Executive Incentive
Retirement Plan Account shall be paid in equal annual
installments for fifteen (15) years certain. The amount payable
shall be equal to the vested balance of the Executive's Incentive
Retirement Plan Account as defined in Paragraph VI, including all
interest credited as of the date of commencement of such payments
pursuant to Paragraph V, plus additional interest earnings
credited to such account based upon the periodic balance of such
account during the pay-out period. Said installment payments of
such vested deferred amounts shall commence on the first day of
the calendar month following the Termination of Employment of the
Executive due to retirement, resignation, disability, or removal
or upon plan termination, whichever shall occur first.
"Termination of Employment" means the termination of the
Executive's employment with the Bank for reasons other than upon
the death or Disability of the Executive. Whether a Termination of
Employment takes place is determined based on the facts and
circumstances surrounding the termination of the Executive's
employment and whether the Bank and the Executive intended for the
Executive to provide significant services for the Bank following
such termination. A change in the Executive's employment status
will not be considered a Termination of Employment if:
(a) the Executive continues to provide services as an employee
of the Bank at an annual rate that is twenty percent (20%)
or more of the services rendered, on average, during the
immediately preceding three full calendar years of
employment (or, if employed less than three years, such
lesser period) and the annual remuneration for such services
is twenty percent (20%) or more of the average annual
remuneration earned during the final three full calendar
years of employment (or, if less, such lesser period), or
(b) the Executive continues to provide services to the Bank in a
capacity other than as an employee of the Bank at an annual
rate that is fifty percent (50%) or more of the services
rendered, on average, during the immediately preceding three
full calendar years of employment (or if employed less than
three years, such lesser period) and the annual remuneration
for such services is fifty percent (50%) or more of the
average annual remuneration earned during the final three
full calendar years of employment (or if less, such lesser
period).
"Disability" (total and permanent disability) means total and
permanent disability within the meaning of the Social Security
Act.
PERMISSIBLE LUMP-SUM PAYOUTS Notwithstanding the foregoing, the
Bank may, in its sole discretion, commence pay-out of the vested
amount in such Executive Plan Account at any time following the
Executive's Termination of Employment, provided that such pay-out
amount shall be in an amount equal to not less than the lump sum
value of such vested account balance, including interest earnings
thereon, determined on the date of such pay-out; provided that
such pay-out (1) accompanies the termination of the Executive's
entire interest
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under the Agreement and all similar arrangements that constitute
a nonqualified deferred compensation plan under Regulations at
Section 1.409A-1(c) applicable to Section 409A of the Code;(2)
the payment is made on or before the later of December 31 of the
calendar year of the Executive Termination of Employment, or the
15th day of the third month following such Termination of
Employment; (3) the payment is not greater than $10,000; and (4)
the Executive is provided no election with respect to receipt of
such lump-sum payment.
VIII. DEATH OF EXECUTIVE PRIOR TO COMMENCEMENT OF PAYMENTS
Except as set forth at Paragraph III herein, in the event of the
death of the Executive prior to the commencement of payments, the
Executive's vested percentage of the account balance on the date
of death shall be paid in a lump sum to such individual(s) or
entity(ies) as the Executive may have designated as beneficiaries
in writing and filed with the Bank. Said amount shall be paid on
the first day of the second month following the death of the
Executive. In the event no beneficiary designation has been made,
the Executive's vested percentage of the account balance on the
date of death shall be paid, in a lump sum, as set forth herein
to the duly qualified executor or administrator of the
Executive's estate, provided however if no such executor or
administrator is appointed, the Bank shall not make payment of
said lump sum until said appointment.
IX. DEATH OF EXECUTIVE SUBSEQUENT TO COMMENCEMENT OF PAYMENTS
In the event of the death of the Executive after commencement of
payments but prior to the Executive receiving all payments due
the Executive under this Agreement, the remaining vested
percentage of the account balance on the date of death shall be
paid in a lump sum, on the first day of the second month
following the death of the Executive, to such individual(s) or
entity(ies) as the Executive may have designated as beneficiaries
in writing and filed with the Bank. In the event no beneficiary
designation has been made, the Executive's vested percentage of
the account balance on the date of death shall be paid, in a lump
sum, as set forth herein to the duly qualified executor or
administrator of the Executive's estate, provided however if no
such executor or administrator is appointed, the Bank shall not
pay make payment of said lump sum until said appointment.
X. 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 Executive Plan. The Executives, their beneficiary(ies), or
any successor in interest 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, at its sole discretion, to
either fund the obligations undertaken by this Executive Plan or
to refrain from funding the same and to determine the extent,
nature and method of such funding. Should the Bank elect to fund
this Executive Plan, in whole or in part, through the purchase of
life insurance, mutual funds, disability policies or annuities,
the Bank reserves the absolute right, in its sole discretion, to
terminate such funding at any time, in whole or in part. At no
time shall any Executive be deemed to have any lien, right, title
or interest in any specific funding investment or to any assets
of the Bank.
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For any Executive who begins employment with the Bank subsequent
to the Effective Date of this Agreement, if the Bank elects to
invest in a life insurance, disability or annuity policy upon the
life of the Executive, then the Executive shall reasonably
cooperate with the Bank and any designated insurance company as
may be requested by the Bank in order to obtain such insurance or
annuities policy.
XI. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
Neither the Executive, nor the Executive's surviving spouse,
nor any other beneficiary(ies) under this Executive 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
Executive or the Executive's beneficiary(ies), nor be
transferable by operation of law in the event of Bankruptcy,
insolvency or otherwise. In the event the Executive or any
beneficiary attempts assignment, commutation, hypothecation,
transfer or disposal of the benefits hereunder, the Bank's
obligations and liabilities pursuant to this Agreement shall
forthwith cease and terminate.
B. Binding Obligation of the Bank and any Successor in Interest:
The Bank shall not merge or consolidate into or with another
Bank or sell substantially all of its assets to another Bank,
firm or person until such Bank, firm or person expressly
agrees, in writing, to assume and discharge the duties and
obligations of the Bank under this Executive Plan. This
Executive Plan shall be binding upon the parties hereto, their
successors, beneficiaries, heirs and personal representatives.
C. Amendment, Termination or Revocation:
It is agreed by and between the parties hereto that this
Executive Incentive Retirement Plan Agreement may be amended,
terminated or revoked at any time or times, in whole or in
part, by the Bank in its sole discretion. Upon a Change of
Control as set forth in Paragraph XIII herein, it is agreed by
and between the parties hereto that this Executive Plan
Agreement may be amended or revoked any time or times, in
whole or in part, only by the mutual written consent of the
Executive and the Bank. Notwithstanding the foregoing, the
Bank or any successor thereto may terminate or revoke the
Agreement at anytime within its sole discretion, provided that
the balance then accrued under the Executive Incentive
Retirement Plan Account on behalf of the Executive shall be
deemed fully earned and non-forfeitable at such time without
regard to any vesting criteria, and such account shall be
immediately paid to the Executive (without regard to any
actual Termination of Employment) or designated beneficiary in
a lump sum payment; provided, however, any such distributions
to be made in accordance with this Section shall comply with
the requirements and limitation under Section 409A of the
Code, including that such lump-sum distribution shall only be
made: (1) within thirty (30) days before, or twelve (12)
months after a change in the ownership or effective control of
the Bank, or change in the ownership of a substantial portion
of the assets of the Bank as described in Section
409A(2)(A)(v) of the Code, provided that all distributions are
made no later than twelve (12) months following such
termination of the Agreement and further provided that all of
the Bank's arrangements which are substantially similar to the
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Agreement are terminated so the Executive and all participants
under similar arrangements shall receive all amounts of
deferred compensation under such terminated agreements within
twelve (12) months of the termination of the arrangements;
(2)Upon the Bank's dissolution or with the approval of a
bankruptcy court provided that the amounts deferred under the
Agreement are included in the Executive's gross income in the
latest of (i) the calendar year in which the Agreement
terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii)
the first calendar year in which the distribution is
administratively practical; or (3) Upon the Bank's termination
of this and all other account balance plans (as referenced in
Section 409A of the Code or the regulations thereunder),
provided that all distributions are made no earlier than
twelve (12) months and no later than twenty-four (24) months
following such termination, and the Company does not adopt any
new account balance plans for a minimum of five (5) years
following the date of such termination.
D. Gender:
Whenever in this Executive 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.
E. Effect on Other Bank Benefit Plans:
Nothing contained in this Executive Plan shall affect the right
of the Executive to participate in or be covered by any
qualified or non-qualified pension, profit-sharing, group,
bonus or other supplemental compensation or fringe benefit plan
constituting a part of the Bank's existing or future
compensation structure.
F. Headings:
Headings and subheadings in this Executive Plan are inserted
for reference and convenience only and shall not be deemed a
part of this Executive Plan.
G. Applicable Law:
The validity and interpretation of this Agreement shall be
governed by the laws of the State of New Jersey, including, but
not limited to the laws applicable to state chartered savings
banks.
H. Bank Regulatory Matters:
Any payments made to the Executive pursuant to this Executive
Plan, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. ss. 1828(k) or any regulations
promulgated thereunder.
Implementation of the Agreement shall be conditioned upon the
Bank's receipt of a letter of approval or non-objection from
the Commissioner of the New Jersey Department of Banking and
Insurance, if applicable, in accordance with the applicable
laws of the State of New Jersey related to state chartered
savings banks at NJS 17:9A-27.26 and related statutes.
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I. Partial Invalidity:
If any term, provision, covenant, or condition of this
Executive Plan is determined by an arbitrator or a court, as
the case may be, to be invalid, void, or unenforceable, such
determination shall not render any other term, provision,
covenant, or condition invalid, void, or unenforceable, and the
Executive Plan shall remain in full force and effect
notwithstanding such partial invalidity.
J. Employment:
No provision of this Agreement shall be deemed to restrict or
limit any existing employment agreement by and between the Bank
and the Executive, nor shall any conditions herein create
specific employment rights to the Executive nor limit the right
of the Bank to discharge the Executive with or without cause.
In a similar fashion, no provision shall limit the Executive's
rights to voluntarily sever his or her employment at any time.
K. Construction:
The Board shall have full power and authority to interpret,
construe and administer this Executive Plan, and the Board's
interpretations and construction thereof, and actions
thereunder, shall be binding and conclusive on all persons for
all purposes. Members of the Board of the Bank shall not be
liable to any person for any action taken or omitted in
connection with the interpretation and administration of this
Plan unless attributable to his or her own willful, gross
misconduct or intentional lack of good faith.
L. Plan Administration:
The Board of the Bank shall administer the Plan; provided,
however, that the Board may appoint an administrative
committee ("Committee") to provide administrative services or
perform duties required by this Agreement. The Committee shall
have only the authority granted to it by the Board.
M. Trust:
Except as may be specifically provided, nothing contained in
this Agreement and no action taken pursuant to the provisions
of this Agreement shall create or be construed to create a
trust of any kind, or a fiduciary relationship between the
Bank and the Executive or any other person. Any funds which
may be invested under the provisions of this Agreement shall
continue for all purposes to be a part of the general assets
ad funds of the Bank. No person other than the Bank shall by
virtue of the provisions of this Agreement have any interest
in such assets and funds. The Bank shall not be under any
obligation to use such funds solely to provide benefits
hereunder, and no representations have been made to the
Executive that such funds can or will be used only to provide
benefits hereunder.
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In order to facilitate the accumulation of funds necessary to
meet the costs of the Bank under this Agreement (including the
provision of funds necessary to pay premiums with respect to
any life insurance policies purchase and to pay benefits to
the extent that the cash value and/or proceeds of any such
policies are not adequate to make payments to the Executive or
his or her beneficiary as and when the same are due under the
Agreement), the Bank may enter into a Trust Agreement. The
Bank, in its discretion, may elect to place any life insurance
policies purchased pursuant to the Agreement into the Trust.
In addition, such sums shall be placed in said Trust as may
from time to time be approved by the Board of Bank, in its
sole discretion. To the extent that the assets of said Trust
and/or the proceeds of any life insurance policy purchased
pursuant to the Agreement are not sufficient to pay benefits
accrued under this Agreement, such payments shall be made from
the general assets of the Bank.
XII. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
The "Named Fiduciary and Plan Administrator" of this Executive
Plan shall be the Bank until its resignation or removal by the
Board. As the Named Fiduciary and Plan Administrator, the Bank
shall be responsible for the management, control and
administration of the Executive Plan. The Named Fiduciary may
delegate to others certain aspects of the management and
operation responsibilities of the Executive Plan including the
employment of advisors and the delegation of ministerial duties
to qualified individuals.
B. Claims Procedure and Arbitration:
In the event a dispute arises over benefits under this
Executive Plan and benefits are not paid to the Executive (or
to the Executive's beneficiary(ies) in the case of the
Executive's death) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to the
Named Fiduciary and Plan Administrator named above within sixty
(60) days from the date payments are refused. The Named
Fiduciary and Plan Administrator shall review the written claim
and if the claim is denied, in whole or in part, it shall
provide in writing within sixty (60) days of receipt of such
claim its specific reasons for such denial, reference to the
provisions of this Executive Plan upon which the denial is
based and any additional material or information necessary to
perfect the claim. Such written notice shall further indicate
the additional steps to be taken by claimants if a further
review of the claim denial is desired. A claim shall be deemed
denied if the Named Fiduciary and Plan Administrator fail to
take any action within the aforesaid sixty-day period.
If claimants desire a second review of the matter, they shall
notify the Named Fiduciary and Plan Administrator in writing
within sixty (60) days of the first claim denial. Claimants may
review this Executive Plan or any documents relating thereto
and submit any written issues and comments they may feel
appropriate. The Named Fiduciary and Plan Administrator shall
then review the second claim and provide a written decision
within sixty (60) days of receipt of such claim. This decision
shall likewise state the specific reasons for the decision and
shall include reference to specific provisions of the Plan
Agreement upon which the decision is based.
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If claimants continue to dispute the benefit denial based upon
completed performance of this Executive Plan or the meaning and
effect of the terms and conditions thereof, then claimants may
submit the dispute to an arbitrator for final arbitration
within six (6) months from the actual or calculated date of the
final written review. The arbitrator shall be selected by
mutual agreement of the Bank and the claimants. The arbitrator
shall operate under any generally recognized set of arbitration
rules. The parties hereto agree that unless otherwise agreed by
mutual written consent of both parties, there shall be no other
alternative dispute resolution in law or equity other than
binding arbitration and they and their heirs, personal
representatives, successors and assigns shall be bound by the
decision of such arbitrator with respect to any controversy
properly submitted for determination. The arbitrator shall
determine any award of attorney's fees or other costs of
arbitration to the prevailing party.
C. Where a dispute arises as to the Bank's discharge of the
Executive "for cause", such dispute shall likewise be submitted
to arbitration as above described and the parties hereto agree
to be bound by the decision thereunder. A determination by an
arbitrator that a discharge or non reelection was not "for
cause" shall govern the parties solely as to payment of
benefits and shall not entitle the Executive to be reinstated
or re-elected to office.
XIII. CHANGE OF CONTROL
"Change in Control" shall mean: (i) a change in ownership of
the Bank under paragraph (a) below, or (ii) a change in
effective control of the Bank under paragraph (b) below, or
(iii) a change in the ownership of a substantial portion of
the assets of the Bank under paragraph (c) below:
(a) CHANGE IN THE OWNERSHIP OF THE BANK. A change in the
ownership of the Bank shall occur on the date that any one
person, or more than one person acting as a group (as defined
in paragraph (b)), acquires ownership of stock of the
corporation that, together with stock held by such person or
group, constitutes more than 50 percent of the total fair
market value or total voting power of the stock of such
corporation. However, if any one person or more than one
person acting as a group, is considered to own more than 50
percent of the total fair market value or total voting power
of the stock of a corporation, the acquisition of additional
stock by the same person or persons is not considered to cause
a change in the ownership of the corporation (or to cause a
change in the effective control of the corporation (within the
meaning of paragraph (b) below). An increase in the percentage
of stock owned by any one person, or persons acting as a
group, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as
an acquisition of stock for purposes of this section. This
paragraph (a) applies only when there is a transfer of stock
of a corporation (or issuance of stock of a corporation) and
stock in such corporation remains outstanding after the
transaction.
(b) CHANGE IN THE EFFECTIVE CONTROL OF THE BANK. A change in
the effective control of the Bank shall occur on the date that
either (i) any one person, or more than one person acting as a
group (as determined below), acquires (or has acquired during
the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of
the corporation possessing 35 percent or more of the total
voting power of the stock of such corporation; or (ii) a
majority of members of the corporation's board of directors is
replaced during any 12-month period by
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directors whose appointment or election is not endorsed by a
majority of the members of the corporation's board of
directors prior to the date of the appointment or election,
provided that for purposes of this paragraph (b)(ii), the
term corporation refers solely to a corporation for which no
other corporation is a majority shareholder. In the absence
of an event described in paragraph (i) or (ii), a change in
the effective control of a corporation will not have
occurred. If any one person, or more than one person acting
as a group, is considered to effectively control a
corporation (within the meaning of this paragraph (b)), the
acquisition of additional control of the corporation by the
same person or persons is not considered to cause a change
in the effective control of the corporation (or to cause a
change in the ownership of the corporation within the
meaning of paragraph (a)). Persons will not be considered to
be acting as a group solely because they purchase or own
stock of the same corporation at the same time, or as a
result of the same public offering.
(c) CHANGE IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE
BANK'S ASSETS. A change in the ownership of a substantial
portion of the Bank's assets shall occur on the date that
any one person, or more than one person acting as a group
(as determined below), acquires (or has acquired during the
12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the
corporation that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of
all of the assets of the corporation immediately prior to
such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of the
corporation, or the value of the assets being disposed of,
determined without regard to any liabilities associated with
such assets. There is no Change in Control event under this
paragraph (c) when there is a transfer to an entity that is
controlled by the shareholders of the transferring
corporation immediately after the transfer.
(d) Each of the sub-paragraphs (a) through (c) above shall
be construed and interpreted consistent with the
requirements of Section 409A of the Code and any Treasury
regulations or other guidance issued thereunder. However, a
change in control shall not be deemed to have occurred as a
result of a holding company reorganization of the Bank and
simultaneous acquisition of more than 50% of the Bank's
stock (following the Bank's conversion to stock form) by a
parent savings and loan holding company or bank holding
company.
"Code" means the Internal Revenue Code of 1986, as amended,
and regulations and guidance promulgated thereunder.
XIV. DISCHARGE FOR CAUSE
In the event the Executive shall be discharged for cause at
any time, all benefits provided herein shall be forfeited.
The term "for cause" shall mean any of the following that
result in an adverse effect on the Bank: (i) negligence or
neglect; (ii) the commission of a felony, disorderly persons
offense or misdemeanor involving moral turpitude, fraud or
dishonesty; (iii) the willful violation of any law, rule or
regulation (other than a traffic violation or similar
offense); (iv) an intentional failure to perform stated
duties;, or (v) a breach of fiduciary duty involving
personal profit. If a dispute arises as to payment of
benefits premised upon whether a discharge is "for cause,"
such dispute shall be resolved by arbitration as set forth
in PARAGRAPH XII (B). A determination by an arbitrator that
a discharge was not "for cause" shall govern the parties
solely as to the payment of benefits hereunder and shall not
entitle the Executive to be reinstated.
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XV. EFFECTIVE DATE
The Effective Date of this Agreement shall be April 1, 2004 with
respect to the initial effective date of the Agreement, and
January 1, 2005 with respect to the effective date of this
amendment and restatement of the Plan.
XVI. SECTION 409A COMPLIANCE.
A. Notwithstanding anything herein to the contrary, the Committee
shall make reasonable efforts to administer the Executive Plan
and make benefit payments hereunder in a manner that is not
deemed to be contrary to the requirements set forth at Section
409A of the Code and regulations and notices promulgated
thereunder such that any payments made would result in the
requirement for the recipient of such payments to pay additional
interest and taxes to be imposed in accordance with Section
409A(a)(1)(B) of the Code; provided, however, neither the Bank,
nor the Committee shall have any responsibility to a Executive or
beneficiary(ies) with respect to any tax liabilities that may be
applicable to any payments made by the Executive Plan.
B. If any provision of the Executive Plan shall be determined to be
inconsistent with the requirements of Section 409A of the Code,
then, the Executive Plan shall be construed, to the maximum
extent possible, to give effect to such provision in a manner
consistent with Section 409A of the Code, and if such
construction is not possible, as if such provision had never been
included.
C. Delay of Payment Commencement to Specified Employee
Notwithstanding any provision in the Executive Plan to the
contrary, if the Executive is a Specified Employee, such
Executive's benefit payments shall become first payable to him or
her as of the first day of the seventh month next following his
or her Termination of Employment, if and only if such payments,
if made earlier, would result in the recipient of such payments
to pay additional interest and taxes to be imposed in accordance
with Section 409A(a)(1)(B) of the Code; provide that such payment
delay shall not be required in the event of the death of the
Executiove. "Specified Employee" shall mean a key employee who,
at any time during the plan year, is (i) an officer of the Bank
having an annual compensation greater than $130,000 (as indexed),
(ii) a 5-percent owner of Bank, or (iii) a 1-percent owner of the
Bank having an annual compensation from the Savings Bank greater
than $150,000; provided, however, that this subparagraph shall
only be effective if the stock of the Bank or a parent
corporation is publicly traded as set forth at Section
409A(a)(2)(B)(i).
D. Distributions Upon Income Inclusion Under Section 409A of the
Code. Upon the inclusion of any amount as taxable income to the
Executive as a result of the failure of this non-qualified
deferred compensation agreement to comply with the requirements
of Section 409A of the Code, to the extent such tax liability can
be covered by the then accrued Executive Incentive Retirement
Plan Account balance, a distribution shall be made to the
Executive as soon as is administratively practicable following
the discovery o f the plan failure in an amount sufficient tfor
the Executive to pay such tax liability.
[THE REMAINDER OF THIS PAGE IS INTENTIALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto acknowledge that each
has carefully read this Agreement and executed the original thereof on
the first day set forth hereinabove, and that, upon execution, each has
received a conforming copy.
Millington Savings Bank
By: /s/Albert Olsen
---------------------------
Its: Chairman
/s/Gary T. Jolliffe
---------------------------
Gary T. Jolliffe, Executive
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BENEFICIARY DESIGNATION FORM
FOR THE EXECUTIVE INCENTIVE RETIREMENT
PLAN AGREEMENT
I. PRIMARY DESIGNATION
-------------------
(You may refer to the beneficiary designation information
prior to completion.)
A. Person(s) as a Primary Designation:
-------------------------------------
(Please indicate the percentage for each beneficiary.)
Name________________________________________________ Relationship____________________________ /__________%
Address___________________________________________________________________________________________________
(Street) (City) (State) (Zip)
Name________________________________________________ Relationship____________________________ /__________%
Address___________________________________________________________________________________________________
(Street) (City) (State) (Zip)
Name________________________________________________ Relationship____________________________ /__________%
Address:__________________________________________________________________________________________________
(Street) (City) (State) (Zip)
Name________________________________________________ Relationship____________________________ /__________%
Address:__________________________________________________________________________________________________
(Street) (City) (State) (Zip)
B. Estate as a Primary Designation:
-------------------------------
My Primary Beneficiary is The Estate of___________________________________________________________________
as set forth in the last will and testament dated the__day of____________,_______ and any codicils thereto.
C. Trust as a Primary Designation:
------------------------------
Name of the Trust:_________________________________________________________________________
Execution Date of the Trust:_________ / _____/____________
Name of the Trustee:________________________________________________________________________
Beneficiary(ies) of the Trust (please indicate the percentage for each beneficiary):
___________________________________________________________________________________
___________________________________________________________________________________
Is this an Irrevocable Life Insurance Trust?______________Yes______________No
(If yes and this designation is for a Split Dollar agreement, an
Assignment of Rights form should be completed.)
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II. SECONDARY (CONTINGENT) DESIGNATION
----------------------------------
A. Person(s) as a Secondary (Contingent) Designation:
--------------------------------------------------
(Please indicate the percentage for each beneficiary.)
Name________________________________________________ Relationship____________________________ /__________%
Address___________________________________________________________________________________________________
(Street) (City) (State) (Zip)
Name________________________________________________ Relationship____________________________ /__________%
Address___________________________________________________________________________________________________
(Street) (City) (State) (Zip)
Name________________________________________________ Relationship____________________________ /__________%
Address___________________________________________________________________________________________________
(Street) (City) (State) (Zip)
Name________________________________________________ Relationship____________________________ /__________%
Address___________________________________________________________________________________________________
(Street) (City) (State) (Zip)
B. Estate as a Secondary (Contingent) Designation:
----------------------------------------------
My Secondary Beneficiary is The Estate of_________________________________
as set forth in my last will and testament dated the___day of ___________,________ and any codicils thereto.
C. Trust as a Secondary (Contingent) Designation:
---------------------------------------------
Name of the Trust:________________________________________________________
Execution Date of the Trust:_________/_______/___________
Name of the Trustee:______________________________________________________
Beneficiary(ies) of the Trust (please indicate the percentage for each beneficiary):
__________________________________________________________________________________
__________________________________________________________________________________
All sums payable under the Executive Incentive Retirement Agreement by
reason of my death shall be paid to the Primary Beneficiary(ies), if he or
she survives me, and if no Primary Beneficiary(ies) shall survive me, then
to the Secondary (Contingent) Beneficiary(ies). This beneficiary
designation is valid until the participant notifies the bank in writing.
------------------------------ ---------------------
Date
14
DEFERRAL DECLARATION
I. DISTRIBUTION ELECTION
Pursuant to the provisions of my Executive Incentive Retirement
Plan Agreement with Millington Savings Bank, I hereby elect to
have any distribution of the balance in my Incentive Retirement
Plan Account paid to me in installments commencing on the later
of ________________ ("Alternative Date") or the first day of the
calendar month following my Termination of Employment due to
retirement, resignation, disability, or removal or upon plan
termination, whichever shall occur first; provided that such
Alternative Date must be elected in writing not less than one
year prior to the payment commencement date, absent such
election, and such Alternative Date must be not less than five
years later than such payment commencement date absent such
updated election Each such annual installment shall be determined
as of each installment date by dividing the entire amount in my
Incentive Retirement Plan Account by the number of installments
then remaining to be paid, plus earnings for the period, with the
final installment to be the entire remaining balance in the
Incentive Retirement Plan Account.
Date:_______________________________ ____________________________________
Signature
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EXHIBIT "A"
Millington Savings Bank
Executive Incentive Retirement Plan
For the Benefit of Gary T. Jolliffe
The annual target Award to the Executive under the Executive Plan will be
established annually for each respective plan year and will be based upon the
Executive's base salary in effect as of July 1 of each calendar year and the
Bank's net income for the prior fiscal year (July 1 through June 30); provided
that the Board of Directors of the Bank may adjust reported net income numbers
attributable to extraordinary items and the Board shall ratify such Award each
year prior to such Award being credited to the Executive Incentive Retirement
Plan Account.
2006 Net Income/Award Grid (July 1, 2006 through June 30, 2007)
% of Prior Year Net Income Amount Executive Award % of Base Salary
- ---------------------------------- --------------------------------
79% AND BELOW 0%
80% TO 84% 10%
85% TO 94% 20%
95% TO 104% 35%
105% TO 119% 40%
120% AND HIGHER 50%
16