EXHIBIT 10.4
FIRST KANSAS FEDERAL SAVINGS ASSOCIATION
SUPPLEMENTAL RETIREMENT PLAN
FOR THE BENEFIT OF LARRY V. BAILEY
WHEREAS, First Kansas Federal Savings Association ("Association")
wishes to reward the years of prior service provided by Larry V. Bailey,
President ("Participant") and to continue to retain and to motivate his
performance and dedication to the Association and its Board of Directors, and
WHEREAS, it is deemed advisable and in the best interests of the
Association to offer such Participant with additional financial incentives in
the form of deferred compensation to encourage such continued employment service
to the Association, and whereas an analysis of the retirement plan of the
Association indicates that such Participant would receive a significant
reduction in his retirement benefits in the event that his employment with the
Association terminates prior to attainment of age 65, whether voluntarily or as
part of a sale or merger of the Association;
NOW THEREFORE, BE IT RESOLVED that the First Kansas Federal Savings
Association Supplemental Retirement Plan for the Benefit of Larry V. Bailey
("Plan"), be adopted and implemented effective December 16, 1997, as follows:
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall, for the purpose
of this Plan and any subsequent amendment thereof, have the following meanings
unless a different meaning is plainly required by the content, as follows:
1.1 "Association" or "Savings Association" means First Kansas Federal
Savings Association, Osawatomie, Kansas, or any successor thereto.
1.2 "Beneficiary" shall mean the Participant's surviving spouse, if
any. If there shall be no surviving spouse, then all benefits payable in
accordance with the Plan shall cease as of the Participant's death.
1.3 "Board" means the Board of Directors of the Association, as
constituted from time to time and successors thereto.
1.4 "Change in Control" means : (i) the ownership, holding, or power to
vote more than 25% of the Savings Association's (or any parent holding
company's) outstanding voting stock by any person; (ii) the control of the
election of a majority of the Savings Association's (or its parent holding
company's) directors; or (iii) the exercise of a controlling influence over the
management or policies of the Savings Association by any person or by persons
acting as a group within the meaning of Section 13(d) of the Exchange Act.
Change in Control shall also
mean: (i) the sale of all, or a material portion, of the assets of the Savings
Association; (ii) the merger or recapitalization of the Savings Association or
any merger or recapitalization whereby the Savings Association is not the
surviving entity; (iii) a change in control of the Savings Association, as
otherwise defined or determined by the applicable federal banking regulator
having supervisory jurisdiction over the Savings Association, or regulations
promulgated by it; or (iv) 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 Exchange Act and the rules and regulations promulgated thereunder)
of twenty-five percent (25%) or more of the outstanding voting securities of the
Savings Association by any person, trust, entity or group. This limitation shall
not apply to the purchase of shares by underwriters in connection with a public
offering of the Savings Association stock (or its parent holding company's
stock), or the purchase of shares of up to twenty-five percent (25%) of any
class of securities of the Savings Association by a tax-qualified employee stock
benefit plan. The term "person" refers to an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a change
in control has occurred shall be conclusive and binding. However, a change in
control shall not be deemed to have occurred as a result of a holding company
reorganization of the Savings Association and simultaneous acquisition of more
than 50% of the Savings Association's stock (following the Savings Association's
conversion to stock form) by a parent savings and loan holding company or bank
holding company.
1.5 "Committee" means the Board or the administrative committee as
appointed by the Board pursuant to Section 8.11 herein.
1.6 "Director" means a member of the Board of the Association.
1.7 "Disability" (total and permanent disability) means a mental or
physical disability which prevents the Participant from performing the normal
duties of his position with the Association. Such disability must have prevented
the Participant from performing his duties for at least six months, and a
physician satisfactory to both the Participant and the Association must certify
that the Participant is disabled from performing his normal duties with the
Association.
1.8 "Effective Date" means December 16, 1997.
1.9 "Participant" means Larry V. Bailey, President of the Association.
Such participation shall continue as long as such Participant fulfills all
requirements for participation subject to the right of termination, amendment
and modification of the Plan hereinafter set forth.
1.10 "Pension Plan" means the tax-qualified defined benefit plan
sponsored by the Association for the benefit of the Association's employees in
effect as of the Effective Date. All terms and definitions not otherwise defined
in the Plan shall be defined as set forth in the Pension Plan.
2
1.11 "Plan" means the First Kansas Federal Savings Association
Supplemental Retirement Plan for the Benefit of Larry V. Bailey, as herein set
forth, as may be amended from time to time.
1.12 "Retirement Date" means the first day of the calendar month
following attainment of age 58 of the Participant or thereafter whereby the
Participant retires as an employee of the Association.
1.13 "Service" means all years of service as an employee of the
Association and all predecessor and successor entities. Years of service need
not be continuous. All years of service prior to the Effective Date shall be
recognized for benefits determination.
1.14 "Trust" shall mean any trust agreement entered into on behalf of
the Plan by the Association for the purpose of holding assets of the Association
in order to promote the efficient administration of the Plan.
ARTICLE II
BENEFITS
2.1 Retirement. Upon a Participant's termination from service as an
employee of the Association on or after the Retirement Date, the Association
shall pay to the participant a benefit in an amount approved by the Board and
set forth herein at Article II, Section 2.4, commencing on the first business
day of the calendar month commencing on or after the Retirement Date. Except as
provided at Article II, Section 2.2, 2.3 and 2.5 herein, upon a Participant's
termination from service as an employee of the Association prior to the
Retirement Date, the Association shall have no financial obligations to the
Participant under the Plan.
2.2 Disability. In the event of the Disability of the Participant, the
Participant will be entitled to a benefit equal to 100% of the amount specified
at Article II, Section 2.4, payable on the first day of the month following
certification of such Disability based upon actual years of service completed as
of such date and without regard to any other provisions herein to the contrary.
Upon Disability, such benefits payable shall be determined based upon actual
years of service, provided that such Participant shall be presumed to have
attained not less than age 58 as of such date of Disability.
2.3 Change in Control. All benefits payable, or that would become
payable if the Participant were to retire prior to such Change in Control, shall
remain payable thereafter. Upon termination of service following a Change in
Control, all benefits shall be deemed payable immediately in accordance with
Article II, Section 2.4; provided that if the Participant is not yet age 58 as
of such date of termination of service, such Participant shall nevertheless be
deemed to be not less than age 58 as of the date of such termination. Further,
that in order to calculate benefits payable hereunder, actual Years of Service
for benefits calculation purposes following
3
a Change in Control shall include all years of service remaining under any
employment agreement between the Participant and the Association. Upon a Change
in Control, all future benefits payable pursuant to Sections 2.1, 2.2, 2.3, and
2.5 of the Plan, shall at the election of the Participant be made in a lump sum
payment equal to the present value of all future benefits payable to such
Participant. The interest rate in effect for a two year U.S. Treasury Note on
the date of the lump sum payment shall be used for purposes of calculating the
present value of amounts payable in accordance with Section 2.4.
2.4 Benefit Payments. The Participant shall be eligible to receive
benefit payments under the Plan in accordance with the benefits formula and
calculations provided under the Pension Plan, except as modified in accordance
with the provisions of Article II of the Plan, reduced by actual benefits
payments received under the Pension Plan, as follows:
a. Upon retirement by the Participant on or after attainment of age 58,
all retirement benefits due to the Participant under the Plan shall be
calculated based upon the actual number of Years of Service determined for
purposes of benefits accrual credited under the Pension Plan plus an additional
credit of fifteen (15) Years of Service.
b. The Participant shall be eligible to receive the retirement benefits
provided for under the Plan and the Pension Plan; provided that the Early
Retirement Reduction Factor based upon the number of years that the
Participant's Early Retirement Date precedes the Participants Normal Retirement
Date shall be based on the schedule contained hereinafter in lieu of such 3% per
year reduction factor set forth under the Pension Plan, as follows:
Retirement Age Adjusted Early Retirement Reduction Factor
-------------- ------------------------------------------
65 100%
64 98%
63 96%
62 94%
61 92%
60 90%
59 88%
58 86%
c. Benefits payable hereunder are exclusive of any benefits received
under the Federal Social Security Act or any income tax liabilities of the
Participant or Beneficiary.
d. Except as otherwise specified to the contrary herein, benefits
payable hereunder shall be paid in the same manner and at the same frequency as
benefits payable under the Pension Plan.
4
2.5 Benefit Payments Following Death. A Participant receiving benefits
in accordance with Article II, Sections 2.1, 2.2 or 2.3 shall, upon death,
continue to have the balance of any such payments due be paid to the
Participant's Beneficiary for the remainder of the payments due as specified at
Section 2.4.
2.6 Notice of Retirement. A Participant electing to retire in
accordance with the Plan shall deliver written notice ("Notice") to the Board
not less than ninety (90) days prior to the actual Retirement Date. A
Participant who terminates service upon death, Disability, or a Change in
Control shall not be required to deliver such Notice in order to be entitled to
receive benefits under the Plan.
2.7 Alternative Forms Of Benefit Payment. The Committee may at any time
distribute the benefits payable with respect to all future benefits payable
pursuant to Sections 2.1, 2.2, 2.3, and 2.5 of the Plan, in a lump sum payment
equal to the present value of all future benefits payable to such Participant.
The interest rate in effect for a 2 year U.S. Treasury Note on the date of the
lump sum payment shall be used for purposes of calculating the present value of
amounts payable in accordance with Section 2.4.
ARTICLE III
INSURANCE
3.1 Ownership of Insurance. The Association, in its sole discretion,
may elect to purchase one or more life insurance policies on the lives of
Participants in order to provide funds to the Association to pay part or all of
the benefits accrued under this Plan. All rights and incidents of ownership in
any life insurance policy that the Association may purchase insuring the life of
the Participant (including any right to proceeds payable thereunder) shall
belong exclusively to the Association or its designated Trust, and neither the
Participant, nor any beneficiary or other person claiming under or through him
shall have any rights, title or interest in or to any such insurance policy. The
Participant shall not have any power to transfer, assign, hypothecate or
otherwise encumber in advance any of the benefits payable thereunder, nor shall
any benefits be subject to seizure for the benefit of any debts or judgments, or
be transferable by operation of law in the event of bankruptcy, insolvency or
otherwise. Any life insurance policy purchased pursuant hereto and any proceeds
payable thereunder shall remain subject to the claims of the Association's
general creditors.
3.2 Physical Examination. As a condition of becoming or remaining
covered under this Plan, the Participant, as may be requested by the Association
from time to time shall take a physical examination by a physician approved by
an insurance carrier. The cost of the examination shall not be borne by the
Participant. The report of such examination shall be transmitted directly from
the physician to the insurance carrier designated by the Association to
establish certain costs associated with obtaining insurance coverages as may be
deemed necessary
5
under this Plan. Such examination shall remain confidential among the
Participant, the physician and the insurance carrier and shall not be made
available to the Association in any form or manner.
3.3 Death of Participant. Upon the death of the Participant, the
proceeds derived from any such insurance policy held by the Association or any
related Trust, if any, shall be paid to the Association or its designated Trust.
ARTICLE IV
TRUST / NON-FUNDED STATUS
4.1 Trust. Except as may be specifically provided, nothing contained in
this Plan and no action taken pursuant to the provisions of this Plan shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Association and the Participant or any other person.
Any funds which may be invested under the provisions of this Plan shall continue
for all purposes to be a part of the general funds of the Association. No person
other than the Association shall by virtue of the provisions of this Plan have
any interest in such funds. The Association shall not be under any obligation to
use such funds solely to provide benefits hereunder, and no representations have
been made to a Participant that such funds can or will be used only to provide
benefits hereunder. To the extent that any person acquires a right to receive
payments from the Association under the Plan, such rights shall be no greater
than the right of any unsecured general creditor of the Association.
In order to facilitate the accumulation of funds necessary to meet the
costs of the Association under this Plan (including the provision of funds
necessary to pay premiums with respect to any life insurance policies purchase
pursuant to Article III above 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
a Participant or his beneficiary as and when the same are due under the Plan),
the Association may enter into a Trust Agreement. The Association, in its
discretion, may elect to place any life insurance policies purchased pursuant to
Article III above 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 Directors, 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 Article III are not
sufficient to pay benefits accrued under this Plan, such payments shall be made
from the general assets of the Association.
ARTICLE V
VESTING
5.1 Vesting. All benefits under this Plan are deemed non-vested and
forfeitable prior to the Retirement Date. All benefits payable hereunder shall
be deemed 100% earned and non- forfeitable by the Participant and his
Beneficiary as of the Retirement Date. Notwithstanding the
6
foregoing, all benefits payable hereunder shall be deemed 100% earned and
non-forfeitable by the Participant and his Beneficiary upon the death or the
Disability of the Participant, or upon termination of employment following a
Change in Control of the Association. No benefits shall be deemed payable
hereunder for any time period prior to termination of employment prior to the
Retirement Date, except in the event of death, Disability or termination of
employment following a Change in Control of the Association, in which case such
benefits shall be immediately payable as of such date of termination of
employment.
ARTICLE VI
TERMINATION
6.1 Termination. All rights of the Participant hereunder shall
terminate immediately upon the Participant ceasing to be in the active service
of the Association prior to the time that the benefits payable under the Plan
shall be deemed to be 100% earned and non-forfeitable. A leave of absence
approved by the Board shall not constitute a cessation of service within the
meaning of this paragraph, within the sole discretion of the Committee.
ARTICLE VII
FORFEITURE OR SUSPENSION OF BENEFITS
7.1 Forfeiture or Suspension of Benefits. Notwithstanding any other
provision of this Plan to the contrary, benefits shall be forfeited or suspended
during any period of paid service with the Association following the
commencement of benefit payments, within the sole discretion of the Committee.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Other Benefits. Nothing in this Plan shall diminish or impair the
Participant's eligibility, participation or benefit entitlement under any other
benefit, insurance or compensation plan or agreement of the Association now or
hereinafter in effect.
8.2 No Effect on Employment. This Plan shall not be deemed to give any
Participant or other person in the employ or service of the Association any
right to be retained in the employment or service of the Association, or to
interfere with the right of the Association to terminate any Participant or such
other person at any time and to treat him without regard to the effect which
such treatment mights have upon him as a Participant in this Plan.
8.3 Legally Binding. The rights, privileges, benefits and obligations
under this Plan are intended to be legal obligations of the Association and
binding upon the Association, its successors and assigns.
7
8.4 Modification. The Association, by action of the Board, reserves the
exclusive right to amend, modify, or terminate this Plan. Any such termination,
modification or amendment shall not terminate or diminish any rights or benefits
accrued by any Participant prior thereto. The Association shall give thirty (30)
days' notice in writing to any Participant prior to the effective date of any
such amendment, modification or termination of this Plan. Notwithstanding the
foregoing, in no event shall such benefits payable to a Participant under the
Plan be reduced below those provided for in Section 2.4 herein. In the event
that the Plan benefits payable under Section 2.4 of the Plan are reduced or the
Plan is terminated, a Participant shall be immediately 100% vested in all
benefits calculated in accordance with Section 2.4 as of the date of such Plan
amendment or Plan termination without regard to such Plan amendment or Plan
termination.
8.5 Arbitration. Any controversy or claim arising out of or relating to
any contract or the breach thereof shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
with such arbitration hearing to be held at the offices of the American
Arbitration Association ("AAA") unless otherwise mutually agreed to by the
Participant and the Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
8.6 Limitation. No rights of any Participant are assignable by any
Participant, in whole or in part, either by voluntary or involuntary act or by
operation of law. Rights of Participants hereunder are not subject to
anticipation, alienation, sale, transfer, assignment, pledge, hypothecation,
encumbrance or garnishment by creditors of the Participant or a Beneficiary.
Such rights are not subject to the debts, contracts, liabilities, engagements,
or torts of any Participant or his Beneficiary. No Participant shall have any
right under this Plan or any Trust referred to in Article IV or against any
assets held or acquired pursuant thereto other than the rights of a general,
unsecured creditor of the Association pursuant to the unsecured promise of the
Association to pay the benefits accrued hereunder in accordance with the terms
of this Plan. The Association has no obligation under this Plan to fund or
otherwise secure its obligations to render payments hereunder to Participants.
No Participant shall have any voice in the use, disposition, or investment of
any asset acquired or set aside by the Association to provide benefits under
this Plan.
8.7 ERISA and IRC Disclaimer. It is intended that the Plan be neither
an "employee welfare benefit plan" nor an "employee pension benefit plan" for
purposes of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Further, it is intended that the Plan will not cause the interest of
a Participant under the Plan to be includable in the gross income of such
Participant or a Beneficiary prior to the actual receipt of a payment under the
Plan for purposes of the Internal Revenue Code of 1986, as amended ("IRC"). No
representation is made to any Participant to the effect that any insurance
policies purchased by the Association or assets of any Trust established
pursuant to this Plan will be used solely to provide benefits under this Plan or
in any way shall constitute security for the payment of such benefits. Benefits
payable under this Plan are not in any way limited to or governed by the
proceeds of any such insurance policies or the assets of any such Trust. No
Participant in the
8
Plan has any preferred claim against the proceeds of any such insurance policies
or the assets of any such Trust.
8.8 Conduct of Participants. Notwithstanding anything contained to the
contrary, no payment of any then unpaid benefits shall be made and all rights
under the Plan payable to a Participant, or any other person, to receive
payments thereof shall be forfeited if the Participant shall engage in any
activity or conduct which in the opinion the Board of the Association is
inimical to the best interests of the Association.
8.9 Incompetency. If the Association shall find that any person to whom
any payment is payable under the Plan is deemed unable to care for his personal
affairs because of illness or accident, or is a minor, any payment due (unless a
prior claim therefor shall have been made by a duly appointed guardian,
committee or other legal representative) may be paid to the spouse, a child, a
parent, or a brother or sister, or to any person deemed by the Association to
have incurred expense for such person otherwise entitled to payment, in such
manner and proportions as the Committee, in its sole discretion, may determine.
Any such payments shall constitute a complete discharge of the liabilities of
the Association under the Plan.
8.10 Construction. The Committee shall have full power and authority to
interpret, construe and administer this Plan and the Committee's interpretations
and construction thereof, and actions thereunder, shall be binding and
conclusive on all persons for all purposes. Directors of the Association and
members of the Committee 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 own willful, gross misconduct or intentional lack of
good faith.
8.11 Plan Administration. The Board of the Association 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 Plan. The Committee shall have only the authority granted to it
by the Board.
8.12 Governing Law. This Plan shall be construed in accordance with and
governed by the laws of the State of Kansas, except to the extent that Federal
law shall be deemed to apply. No payments of benefits shall be made hereunder if
the Board of the Association, or counsel retained thereby, shall determine that
such payments shall be in violation of applicable regulations, or likely result
in imposition of regulatory action, by the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation or other appropriate banking regulatory
agencies.
8.13 Regulatory Matters.
(a) The Participant or Beneficiary shall have no right to receive
compensation or other benefits in accordance with the Plan for any period after
termination of service for Just Cause. Termination for "Just Cause" shall
include termination because of the Participant's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit,
9
intentional failure to perform stated duties, willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of the Plan.
(b) Notwithstanding anything herein to the contrary, any payments made
to a Participant or Beneficiary pursuant to the Plan shall be subject to and
conditioned upon compliance with 12 USC ss.1828(k) and any regulations
promulgated thereunder.
8.14 Successors and Assigns. The Plan shall be binding upon any
successor or successors of the Association, and unless clearly inapplicable,
reference herein to the Association shall be deemed to include any successor or
successors of the Association.
8.15 Sole Agreement. The Plan expresses, embodies, and supersedes all
previous agreements, understandings, and commitments, whether written or oral,
between the Association and any Participants and Beneficiaries hereto with
respect to the subject matter hereof.
10