Exhibit 10.2
AMSTERDAM FEDERAL SAVINGS
AND LOAN ASSOCIATION
TARGET BENEFIT
SUPPLEMENTAL RETIREMENT BENEFIT
AGREEMENT
THIS SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT (hereinafter called the
"Agreement") made and entered into as of this 16th day of November, 1993
(hereinafter called the "Effective Date"), by and between AMSTERDAM FEDERAL
SAVINGS AND LOAN ASSOCIATION, a federal savings and loan association having its
principal office at 161 Church Street, P.O. Box 271, Amsterdam, New York
(hereinafter called the "Bank"), and John Lisicki, President (hereinafter called
"Officer").
WITNESSETH:
WHEREAS, the Officer is the President of the Bank, having been in the
employ of the Bank since 1978; and
WHEREAS, the Officer is a participant under the Bank's tax-qualified
Section 401(k) profit-sharing savings plan in RSI Retirement Trust (hereinafter
called the "Savings Plan") and formerly participated in the Bank's terminated
defined benefit retirement plan (hereinafter called the "Retirement Plan"), and
will in the future become entitled to certain retirement benefits under said
Savings Plan and Retirement Plan, the amount of which benefits may be limited by
the provisions of the Employee Retirement Income Security Act of 1974, as
amended (ERISA) and the tax-qualification provisions of the Internal Revenue
Code of 1986, as amended; and
WHEREAS, the Officer, upon his retirement, will also be entitled to certain
Federal old age benefits under the Social Security Act; and
WHEREAS, the Bank, in order to assure the continuance of the Officer's
services to the Bank, desires to provide for the payment of a supplemental
retirement benefit to said Officer, from and after the termination of the
Officer's active employment by the Bank, upon retirement, severance from
employment, or death, which payments shall be in addition to any retirement
benefits which shall become payable to the Officer under said Savings Plan and
Retirement Plan, and under the Social Security Act; and
WHEREAS, the supplemental retirement benefit to be provided hereunder is
intended to restore the difference in benefits between the retirement benefit
that would have been payable at age 62 under the terminated Retirement Plan and
the projected life annuity benefit at age 62 resulting from the amount to be
accumulated from Bank matching contributions to the Savings Plan; and
WHEREAS, the supplemental retirement benefit to be provided hereunder will
be a target benefit established as of the Effective Date (hereinafter called the
"Target Benefit"), which, based upon actuarial assumptions developed as of such
date would provide a straight life annuity benefit for the Officer, commencing
at age 62, equal to 60% of the Officer's final average compensation (as defined
in the Retirement Plan, but with an assumed limitation on future compensation of
$150,000), less the Officer's primary social security benefit (as defined in the
Retirement Plan), upon attainment of age 62, offset by: (i) the unrestricted
accrued benefit under the Retirement Plan (payable as a straight life annuity
commencing at age 62), and (ii) the projected Officer account balance
attributable to matching Bank contributions under the Savings Plan (expressed as
a straight life annuity commencing at age 62); and
WHEREAS, the annual amount of Bank contributions so established as of the
Effective Date shall not be further adjusted on account of experience gains
and/or losses prior to payment of the Target Benefit supplemental retirement
benefit;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations hereinafter set forth, and other good and valuable
consideration, it is hereby agreed by and between the Bank and the Officer as
follows:
Section 1. Deferred Compensation Account.
As of the Effective Date of this Agreement, and as of the first day of each
calendar year thereafter during the continuance of the Officer's employment by
the Bank, the Bank shall credit to a unfunded book reserve established for the
purposes of providing the Target Benefit under this Agreement, (hereinafter
called "the Deferred Compensation Account") sixteen and 90/100 percent (16.90%)
of the Officer's annual salary as of such date.
Section 2. Investments.
Amounts credited under the Deferred Compensation Account established under
Section 1. of this Agreement shall be invested by the Bank (either in the Bank's
name or in the name of a trustee through an irrevocable trust arrangement
established by the Bank for this purpose) in one or more registered investment
companies under the Investment Company Act of 1940, to the extent permitted by
applicable banking law, and/or in one or more fixed income investment
opportunities selected in the sole discretion of the Bank. The value of the
Officer's Deferred Compensation Account at any given time shall be based solely
on the then value of the investment fund or funds selected hereunder.
2
Section 3. Retirement Benefit.
In the event that the Officer remains in the employ of the Bank (either in
the Officer's present position or in some other capacity), until the Officer
attains age 55 and completes a period of service of 20 or more years as defined
in the Savings Plan for vesting purposes (hereinafter called "Period of
Service"), or, upon involuntary termination without cause prior thereto, the
Bank will pay to the Officer, upon retirement or other termination from
employment on or after attaining such age and Period of Service, or, upon
involuntary termination without cause prior thereto, supplemental retirement
benefits, the aggregate total of which shall be equal to the then value of all
amounts in said Deferred Compensation Account on the Officer's date of
retirement or other termination from employment. Such benefit will be paid in
any one of the following modes, as determined by the Bank: (i) a single lump sum
payment; (ii) purchase of a straight life or joint and survivor annuity; or
(iii) monthly installments over a period of five, ten or fifteen years. If the
Officer shall die prior to having received the total of installment payments
specified in clause (iii), above, the unpaid balance of such installments will
continue to be paid in monthly installments for the unexpired portion of the
specified installment period, to a designated beneficiary or contingent
beneficiary.
Section 4. Death Benefit.
In the event the Officer should die prior to retirement or other
termination from employment, whether before, on, or after attaining age 55 and
the completion of a Period of Service of 20 or more years, the amount in the
Deferred Compensation Account as of the date of death shall be paid to the
Officer's designated beneficiary, or contingent beneficiary, as the case may be,
in one of the following modes, as determined by the Bank: (i) a single lump sum
payment; or (ii) purchase of a straight life annuity based upon the designated
beneficiary's life expectancy.
Section 5. Payment to Estate; Change of Beneficiary.
If there is no designated beneficiary living at the time of the Officer's
death, the then value of all amounts in the Deferred Compensation Account,
determined as of the date of the Officer's death, shall be paid in a single lump
sum to the Officer's estate. Any designated or contingent beneficiary referred
to in Section 3. may be changed by the Officer without the consent of any prior
designated or contingent beneficiary, upon written notice to the bank, signed by
the Officer, the receipt of which has been acknowledged in writing by an officer
of the Bank.
3
Section 6. Forfeiture.
In case the Officer's employment is terminated, other than by involuntary
termination without cause or by death prior to attainment of age 55 and the
completion of a Period of Service of 20 or more years, the Bank shall have no
obligation to make any payments to the Officer or any designated beneficiary or
contingent beneficiary under this Agreement and the Agreement shall terminate as
of such date the Officer's employment is terminated.
Section 7. Designation of Beneficiaries.
For the purposes of this Agreement, the Officer hereby names as primary
beneficiary(ies), Jacquelyn Lisicki, and designates John Lisicki, Jr., Kenneth
Lisicki, and Robert Lisicki as contingent beneficiary(ies).
Section 8. Successors and Assigns.
The right of the Officer or any beneficiary to the payment of the
supplemental retirement benefit payable under this Agreement shall not be
assigned, transferred, pledged or encumbered, except by the Officer's last will
and testament, or by the applicable laws of descent and distribution. This
Agreement will inure to the benefit of and be binding upon the Officer, the
Officer's legal representatives and estate or interstate distributees, and the
Bank, its successors and assigns, including any successor by merger or
consolidation, a statutory receiver, or any other person or firm or corporation
to which all or substantially all of the assets and business of the Bank may be
sold or otherwise transferred.
Section 9. Creditor Rights.
The Officer's rights under this Agreement shall be limited to those of an
unsecured general creditor of the Bank and the Bank shall have no obligation to
fund the Target Benefit supplemental retirement benefit provided for hereunder.
Section 10. No Right to Employment.
Nothing contained in this Agreement shall be construed as conferring upon
the Officer the right to continue in the employ of the Bank as an officer of the
Bank or in any other capacity.
4
Section 11. Arbitration of Disputes.
Any dispute between the Bank and the Officer, any designated or contingent
beneficiary, or the Officer's estate as to the proper interpretation or
application of any provision of this Agreement, shall be settled by arbitration,
as follows. One arbitrator shall be selected by each of the parties with a
dispute pursuant to this Agreement and a third arbitrator chosen by the two so
selected, and the decision of a majority of the arbitrators so selected shall be
final and binding upon all of the parties to such dispute.
Section 12. Termination.
The Bank's obligation to make payments under this Agreement shall terminate
following the final payment required to be made under the applicable payment
option.
Section 13. Facility of Payment.
If the Bank shall find that any individual entitled to receive payments
under this Agreement is unable to care for his or her affairs because of age,
lack of capacity, illness or accident, the Bank may pay such benefit, unless
claim shall have been made therefor by a duly appointed legal representative, to
the spouse, descendant, other relative, or to a person with whom the individual
entitled to payment resides, and any such payment so made shall be a complete
discharge of the liability of the Bank under this Agreement.
Section 14. Records.
The records of the Bank, the Retirement Plan, and the Savings Plan, shall
be conclusive in respect of all matters involved in the calculation of benefits
under this Agreement.
Section 15. Unfunded Arrangement.
This Agreement is an unfunded supplemental benefit arrangement, subject to
the requirements of Department of Labor Regulation Section 2520.104-23.
Section 16. Severability.
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
Section 17. Authorization to Execute Agreement.
This Agreement has been approved by the Board of Directors of the Bank, and
the undersigned has been specifically authorized by the Board to execute this
Agreement on behalf of the Bank.
5
Section 18. Entire Agreement; Modifications.
This instrument contains the entire Agreement of the parties relating to
the subject matter hereof and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.
Section 19. Headings.
The headings of sections in this Agreement are for convenience of reference
only and are not intended to qualify the meaning of any section. Any reference
to a section number shall refer to a section of this Agreement, unless otherwise
stated.
Section 20. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without reference to
conflicts of law principles.
6