DIRECTOR FEE CONTINUATION AGREEMENT
THIS AGREEMENT, made and entered into this ____ day of _________, 20__,
by and between Gloucester County Federal Savings Bank, a bank organized and
existing under the laws of the United States (hereinafter referred to as the
"Bank"), and_______________, a member of the Board of Directors of the Bank
(hereinafter referred to as the "Director").
WITNESSETH:
WHEREAS, it is the consensus of the Board of Directors (hereinafter
referred to as the "Board") that the Director's services to the Bank in the past
have been of exceptional merit and have constituted an invaluable contribution
to the general welfare of the Bank and in bringing it to its present status of
operating efficiency, and its present position in its field of activity;
WHEREAS, the Director's experience, knowledge of the affairs of the
Bank, reputation, and contacts are so valuable that assurance of the Director's
continued services is essential for the future growth and profits of the Bank
and it is in the best interests of the Bank to arrange terms of continued
service for the Director so as to reasonably assure the Director's remaining in
the Bank's service during the Director's lifetime or until the age of
retirement;
WHEREAS, it is the desire of the Bank that the Director's services be
retained as herein provided;
ACCORDINGLY, it is the desire of the Bank and the Director to enter
into this Agreement under which the Bank will agree to make certain payments to
the Director at retirement or the Director's beneficiary(ies) in the event of
the Director's death pursuant to this Agreement;
FURTHERMORE, it is the intent of the parties hereto that this Director
Plan be considered an unfunded arrangement maintained primarily to provide
supplemental retirement benefits for the Director, and to be considered a
non-qualified benefit plan for purposes of the Employee Retirement Security Act
of 1974, as amended ("ERISA"). The Director is fully advised of the Bank's
financial status and has had substantial input in the design and operation of
this benefit plan; and
NOW, THEREFORE, in consideration of services performed in the past and
to be performed in the future as well as of the mutual promises and covenants
herein contained it is agreed as follows:
1
I. SERVICE
The Director is willing to continue to serve the Bank in such capacity
and with such duties and responsibilities as may be assigned, and with
such compensation as may be determined from time to time by the Board
of Directors of the Bank. Neither this Agreement nor the payments of
any benefits hereunder shall be construed as giving to the Director any
right to be retained and or re-elected as a member of the Board of
Directors of the Bank.
II. FRINGE BENEFITS
The fee continuation benefits provided by this Agreement are granted by
the Bank as a fringe benefit to the Director and are not part of any
fee reduction plan or an arrangement deferring a bonus or a fee
increase. The Director has no option to take any current payment or
bonus in lieu of these fee continuation benefits except as set forth
hereinafter.
III. RETIREMENT DATE AND NORMAL RETIREMENT
A. Retirement Date:
---------------
The Director shall retire from active service with the bank
effective the date of the annual meeting of the bank
immediately following the Director's eightieth (80th)
birthday, provided however a Director serving on April 27th
1987 is grandfathered. The Director may retire on or
subsequent to the Director's sixty-fifth (65th) birthday if
the Director has served the Bank for ten (10) full years from
the date of first service, unless by action of the Board of
Directors this period of active service shall be shortened or
extended.
B. Normal Retirement Age:
---------------------
Normal Retirement Age shall mean age eighty (80), or age
sixty-five (65) or later if the Director has served the Bank
for ten (10) full years from the date of first service with
the Bank.
IV. RETIREMENT BENEFIT AND POST-RETIREMENT DEATH BENEFIT
For those Directors who have served the Bank on or prior to the
Effective Date of this Agreement, upon said retirement, the Bank,
commencing with the first day of the month following the date of such
retirement, shall pay the Director one-hundred percent (100%) of an
annual benefit equal to fifty percent (50%) of the average of the three
(3) years highest Director's total compensation as recorded on the
Director's 1099 prior to the Director's retirement. For those Directors
who shall serve the Bank subsequent to the Effective Date of this
Agreement, the Bank shall pay the Director the Director's vested
percentage of the benefit set forth
2
hereinabove. Said benefit shall be paid annually for a period of ten
(10) years; provided, that if less than ten (10) such annual payments
have been made prior to the death of the Director, the Bank shall at
the sole discretion of the bank continue such annual payments to the
individual(s) or entity(ies) the Director may have designated in
writing and filed with the Bank until the full number of ten (10)
annual payments have been made, or make the total amount of said
payments due in a lump sum reduced to present value as set forth in
Subparagraph XI (K) to said beneficiary(ies). In the absence of any
effective beneficiary designation, any such amounts becoming due and
payable upon the death of the Director shall be payable to the duly
qualified executor or administrator of the Director's estate, if so
appointed. Said payments due hereunder shall begin the first day of
the second month following the decease of the Director, provided
however in the absence of any effective beneficiary designation, if no
executor or administrator is appointed, the bank shall not pay said
death benefit until said appointment.
V. DEATH BENEFIT PRIOR TO RETIREMENT
In the event the Director should die while actively serving the Bank at
any time after the date of this Agreement but prior to the Director
attaining the Normal Retirement Age, the Bank will pay an annual
benefit equal to fifty percent (50%) of the average of the three (3)
years highest Director's total compensation as recorded on the
Director's 1099 prior to the Director's death at the sole discretion of
the bank in a lump sum reduced to present value as set forth in
Subparagraph XI (K), or annually for a period of ten (10) years to the
individual(s) or entity(ies) the Director may have designated in
writing and filed with the Bank.. In the absence of any effective
beneficiary designation, any such amounts becoming due and payable upon
the death of the Director shall be payable to the duly qualified
executor or administrator of the Director's estate, if so appointed.
Said payments due hereunder shall begin the first day of the second
month following the decease of the Director, provided however in the
absence of any effective beneficiary designation, if no executor or
administrator is appointed, the Bank shall not pay said death benefit
until said appointment.
VI. BENEFIT ACCOUNTING
The Bank shall account for this benefit using the regulatory accounting
principles of the Bank's primary federal regulator. The Bank shall
establish an accrued liability retirement account for the Director into
which appropriate reserves shall be accrued.
3
VII. VESTING
Director's interest in the benefits that are the subject of this
Agreement shall be subject to an annual vesting percentage of ten
percent (10%) for each full year of service with the Bank from the date
of first service on the Board of the Bank (to a maximum of 100%).
VIII. OTHER TERMINATION OF SERVICE
Subject to Subparagraph VIII (i) hereinbelow, in the event that the
service of the Director shall terminate prior to retirement as provided
in Paragraph III (A), or by the Director's voluntary action, or by the
Director's discharge or failure to be reelected, by the Bank without
cause, then this Agreement shall terminate upon the date of such
termination of service and the Bank shall pay to the Director as
severance compensation an amount of money equal to the accrued balance
of the Director's liability reserve account multiplied by the
Director's cumulative vested percentage (Paragraph VII). This severance
compensation shall be paid in ten (10) equal annual payments.
In the event the Director's death should occur after such severance but
prior to the completion of the annual payments provided for in this
Paragraph VIII, the remaining installments, or a lump sum, at the sole
discretion of the bank, shall be paid to the individual(s) or
entity(ies) the Director may have designated in writing and filed with
the Bank. In the absence of any effective beneficiary designation, any
such amounts shall be payable to the duly qualified executor or
administrator of the Director's estate, if so appointed. Said payments
due hereunder shall begin the first day of the second month following
the decease of the Director, provided however in the absence of any
effective beneficiary designation, if no executor or administrator is
appointed, the bank shall not make any payment until said appointment.
(i) Discharge or Non Re-Election for Cause: In the event the
Director shall be discharged or not re-elected 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 or non re-election 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 or non
re-election was not "for cause" shall govern the parties
solely as to payment of benefits hereunder and shall not
entitle the Director to be reinstated or re-elected to service
on the board.
4
IX. CHANGE OF CONTROL
Change of Control shall be deemed to be the cumulative transfer of more
than fifty percent (50%) of the voting stock of the Bank from the date
of this Agreement. For the purposes of this Agreement, transfers made
on account of deaths or gifts, transfers between family members or
transfers to a qualified retirement plan maintained by the Bank, shall
not be considered in determining whether there has been a change in
control. Upon a Change of Control, if the Director subsequently suffers
a Termination of Service (voluntary or involuntary), except for cause,
then the Director shall receive the benefits in Paragraph IV herein
upon attaining Normal Retirement Age (Subparagraph III [B]), as if the
Director had been continuously serving the Bank until the Director's
Normal Retirement Age.
X. RESTRICTIONS ON 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 Director
Plan. The Directors, their beneficiary(ies), or any successor in
interest shall be and remain simply a general 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 Director 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 Director 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 Director be deemed to have any lien or
right, title or interest in or to any specific funding investment or
assets of the Bank.
For any Director who begins serving on the Board 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
Director, then the Director shall assist the Bank by freely submitting
to a physical exam and supplying such additional information necessary
to obtain such insurance or annuities.
5
XI. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
---------------------------------------
Neither the Director, nor the Director's surviving spouse, nor
any other beneficiary(ies) under this Director Plan shall have
any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify or otherwise encumber
in advance any of the benefits payable hereunder nor shall any
of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the
Director or the Director's beneficiary(ies), nor be
transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Director or any
beneficiary attempts assignment, 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 Director Plan. This
Director Plan shall be binding upon the parties hereto, their
successors, beneficiaries, heirs and personal representatives.
C. Amendment or Revocation:
-----------------------
It is agreed by and between the parties hereto that this
Director Fee Continuation Agreement may be amended 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 IX herein, it is agreed by and between the parties
hereto that this Director Fee Continuation Agreement may be
amended or revoked any time or times, in whole or in part,
only by the mutual written consent of the Director and the
bank.
D. Gender:
------
Whenever in this Director 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.
6
E. Effect on Other Bank Benefit Plans:
----------------------------------
Nothing contained in this Director Plan shall affect the right
of the Director to participate in or be covered by any
qualified or non-qualified pension, profit-sharing, group,
bonus or other supplemental compensation or fringe benefit
plan constituting a part of the Bank's existing or future
compensation structure.
F. Headings:
--------
Headings and subheadings in this Director Plan are inserted
for reference and convenience only and shall not be deemed a
part of this Director Plan.
G. Applicable Law:
--------------
The validity and interpretation of this Agreement shall be
governed by the laws of the State of New Jersey.
H. 12 U.S.C. ss. 1828(k):
---------------------
Any payments made to the Director pursuant to this Director
Plan, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. ss. 1828(k) or any regulations
promulgated thereunder.
I. Partial Invalidity:
------------------
If any term, provision, covenant, or condition of this
Director 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 Director Plan shall remain in full force and effect
notwithstanding such partial invalidity.
J. Present Value:
-------------
All present value calculations under this Agreement shall be
based on the following discount rate:
Discount Rate: The discount rate as used in the FASB 87
calculations for the Director plan.
7
XII. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
--------------------------------------
The "Named Fiduciary and Plan Administrator" of this Director
Plan shall be Gloucester County Federal Savings Bank until its
resignation or removal by the Board. As Named Fiduciary and
Plan Administrator, the Bank shall be responsible for the
management, control and administration of the Director Plan.
The Named Fiduciary may delegate to others certain aspects of
the management and operation responsibilities of the Director
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
Director Plan and benefits are not paid to the Director (or to
the Director's beneficiary(ies) in the case of the Director's
death) and such claimants feel they are entitled to receive
such benefits, then a written claim must be made to the 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 Director 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 they shall notify the
Named Fiduciary and Plan Administrator in writing within sixty
(60) days of the first claim denial. Claimants may review this
Director Plan or any documents relating thereto and submit any
written issues and comments it 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.
If claimants continue to dispute the benefit denial based upon
completed performance of this Director 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
8
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 in equity
other than binding arbitration 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
Director "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 Director to be reinstated
or re-elected to service on the Board.
XIII. EFFECTIVE DATE
The Effective Date of this Agreement shall be January 1, 20___
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.
GLOUCESTER COUNTY FEDERAL SAVINGS BANK
Sewell, New Jersey
________________________ By: _________________________________
Attest Title:
________________________ _________________________________
Witness Director
9
BENEFICIARY DESIGNATION FORM
FOR THE DIRECTOR FEE CONTINUATION
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.)
10
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) esignation:
---------------------------------------------
My Secondar 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 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 Director Fee Continuation Plan 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.
_______________________________ __________________________
Executive Date
11
DEFERRAL DECLARATION
I. DISTRIBUTION ELECTION
Pursuant to the Provisions of my Director Fee Continuation Plan
Agreement with Gloucester County Federal Savings Bank, I hereby elect
to have any distribution of the balance in my Director Fee Continuation
Plan Account paid to me in installments as designated below:
______ Lump sum.
______ Ten (10) annual installments with the amount of each
installment determined as of each installment date by dividing
the entire amount in my Benefit Account by the number of
installments then remaining to be paid, with the final
installment to be the entire remaining balance in the Benefit
Account.
Date: ______________________ Director: _________________________________