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04/19/96 SKV
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
This Executive Supplemental Retirement Income Agreement (the "Agreement"),
effective as of the _______ day of _____________, 1996, formalizes the
understanding by and between OCEAN FEDERAL SAVINGS BANK (the "Bank"), a
federally chartered savings bank, and Michael J. Fitzpatrick, hereinafter
referred to as "Executive".
W I T N E S S E T H :
WHEREAS, the Executive is employed by the Bank; and
WHEREAS, the Bank recognizes the valuable services heretofore performed for it
by the Executive and wishes to encourage continued employment; and
WHEREAS, the Executive wishes to be assured that he will be entitled to a
certain amount of additional compensation for some definite period of time from
and after retirement from active service with the Bank or other termination of
employment and wishes to provide his beneficiary with benefits from and after
death; and
WHEREAS, the Bank and the Executive wish to provide the terms and conditions
upon which the Bank shall pay such additional compensation to the Executive
after retirement or other termination of employment and/or death benefits to his
beneficiary after death; and
WHEREAS, the Internal Revenue Code of 1986, as amended (the "Code") imposes
limitations on the amount of contributions which may be made to the Bank's
Employee Stock Ownership Plan ("ESOP") by the Bank on behalf of the Executive,
and limits the amount of compensation which may be considered in determining
such contributions; and
WHEREAS, the Board of Directors of the Bank desires to provide the Executive
with benefits to replace benefits to which he would be entitled under the ESOP,
but for the application of the above-described limitations imposed by the Code;
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WHEREAS, the Bank has adopted this Executive Supplemental Retirement Income
Agreement which controls all issues relating to benefits as described herein;
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the Bank and the Executive agree as follows:
SECTION I
DEFINITIONS
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When used herein, the following words and phrases shall have the meanings
below unless the context clearly indicates otherwise:
1.1 "Accrued Benefit Account" shall be represented by the bookkeeping entries
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required to record the Executive's (i)Supplemental Retirement Income
Benefit Phantom Contributions and Supplemental ESOP Benefit Phantom
Contributions plus (ii) accrued interest, equal to the Interest Factor,
earned to-date on such amounts. However, neither the existence of such
bookkeeping entries nor the Accrued Benefit Account itself shall be deemed
to create either a trust of any kind, or a fiduciary relationship between
the Bank and the Executive or Beneficiary.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.3 "Administrator" means the Human Resources/Compensation Committee of the
Board of Directors of the Bank.
1.4 "Bank" means OCEAN FEDERAL SAVINGS BANK and any successor thereto.
1.5 "Beneficiary" means the individuals or entities designated as Beneficiary
in Exhibit B of this Agreement to whom the deceased Executive's benefits
are payable. If no designated Beneficiary is living at the time of the
Executive's death, the benefits payable pursuant to this Agreement shall
pass in accordance with the Executive's will or by the laws of intestacy,
as applicable.
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1.6 "Benefit Age" means the Executive's sixty-fifth (65th) birthday provided,
however, that another date may be chosen upon mutual agreement between the
Executive and the Bank's Board of Directors.
1.7 "Benefit Eligibility Date" means the date on which the Executive is
entitled to receive any benefit(s) pursuant to Section(s) III, or V of
this Agreement. It shall be the first day of the month following the month
in which the Executive attains his Benefit Age.
1.8 "Cause" means personal dishonesty, willful misconduct, willful
malfeasance, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
law, rule, regulation (other than traffic violations or similar offenses),
or final cease-and-desist order, material breach of any provision of this
Agreement, gross negligence in matters of material importance to the Bank,
or any other basis for termination as set forth in the Bank's personnel
manual, as such manual currently exists or may be amended.
1.9 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Contributions" shall collectively refer to any and all Supplemental ESOP
Benefit Contributions and Supplemental Retirement Income Benefit
Contributions.
1.11 (a) "Disability Benefit" means the benefit payable to the Executive
following a determination, in accordance with Subsection 6.1(a), that he
is no longer able, properly and satisfactorily, to perform his duties at
the Bank.
(b) "Disability Benefit-Supplemental" (if applicable) means the benefit
payable to the Executive's Beneficiary upon the Executive's death in
accordance with Subsection 6.1(b).
1.12 "Effective Date" of this Agreement shall be_________________, 19____.
1.13 "ESOP" means the Bank's Employee Stock Ownership Plan.
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1.14 "ESOP Account" means the Executive's interest in the assets accumulated
under the ESOP, as expressed in terms of a separate account balance which
is periodically adjusted to reflect Bank contributions, the ESOP's
investment experience, and distributions and forfeitures.
1.15 "Estate" means the estate of the Executive.
1.16 "Interest Factor" for purposes of:
(a) monthly compounding, discounting or annuitizing of the Accrued Benefit
Account, the term shall mean Six percent (6%) per annum.
(b) monthly compounding or discounting of the Retirement Income Trust
Fund, the term shall mean Four percent (4%) per annum, provided, however,
that for purposes of annuitizing the balance of the Retirement Income
Trust Fund over the Payout Period, the trustee of the Michael J.
Fitzpatrick Grantor Trust shall exercise discretion in selecting the
appropriate rate, given the nature of the investments contained in the
Retirement Income Trust Fund and the expected return associated with the
investments.
1.17 "Payout Period" means the time frame during which certain benefits payable
hereunder shall be distributed. Payments shall be made in monthly
installments commencing on the first day of the month following the
occurrence of the event which triggers distribution and continuing for a
period of one hundred eighty (180) months. Should the Executive make a
Timely Election to receive a lump sum benefit payment, the Executive's
Payout Period shall be deemed to be one (1) month.
1.18 "Phantom Contributions" shall collectively refer to any and all
Supplemental ESOP Benefit Phantom Contributions and Supplemental
Retirement Income Benefit Phantom Contributions.
1.19 "Plan Year" shall mean _____________, 1996 through December 31, 1996 for
the first Plan Year. Thereafter the term shall mean the twelve (12) month
period commencing January 1, 1997 and each consecutive twelve (12) month
period thereafter.
1.20 "Retirement Income Trust Fund" means the trust fund account established by
the Executive and into which annual Contributions will be made by the Bank
on behalf of the Executive pursuant to
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Subsection 2.1. The contractual rights of the Bank and the Executive with
respect to the Retirement Income Trust Fund shall be outlined in a
separate writing to be known as the Michael J. Fitzpatrick Grantor Trust
agreement.
1.21 "Supplemental ESOP Benefit" means the benefit provided by this Agreement
and calculated with reference to the limitations imposed by Section(s)
401(a)(17) and/or 415 of the Code on the Executive's benefits under the
ESOP. Such benefit shall be determined annually by multiplying the per
share market price of the Bank's stock on December 31 of each Plan Year by
the following number of shares: the difference between (i) the number of
shares which would have been allocated to the Executive's ESOP Account for
such Plan Year, had the limitation of Sections 401(a)(17) and 415 of the
Code not been applicable, and (ii) the number of shares actually allocated
to the Executive's ESOP Account for such Plan Year (taking into account
such Code limitations).
1.22 "Supplemental ESOP Benefit Contribution(s)" means those annual
contributions which the Bank is required to make to the Retirement Income
Trust Fund on behalf of the Executive in accordance with Subsections
2.1(a)(3) and 1.21.
1.23 "Supplemental ESOP Benefit Phantom Contribution(s)" means those annual
contributions which the Bank is no longer required to make on behalf of
the Executive to the Retirement Income Trust Fund. Rather, once the
Executive has exercised the withdrawal rights described in Subsection 2.2,
the Bank shall be required to record the annual amounts, described in
Subsections 2.1(a)(3) and 1.21, in the Executive's Accrued Benefit
Account.
1.24 "Supplemental Retirement Income Benefit" means an actuarially determined,
annual amount, (before taking into account federal and state income taxes)
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equal to One Hundred Twenty Eight Thousand and Fifty Two Dollars
($128,052.00) payable in monthly installments throughout the Payout Period
and based on certain assumptions incorporated into this Agreement and
disclosed in Exhibit E. The definition of Supplemental Retirement Income
Benefit has been incorporated into the Agreement for the sole purpose of
actuarially establishing the amount of annual Supplemental Retirement
Income Benefit Contributions (or Supplemental Retirement Income Benefit
Phantom Contributions) to the Retirement Income Trust fund (or Accrued
Benefit Account). The amount of any actual retirement, pre-retirement or
disability benefit payable pursuant to the Agreement will be a function of
(i) the amount and timing of Supplemental Retirement Income Benefit
Contributions (or Supplemental Retirement Income Benefit Phantom
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Contributions) to the Retirement Income Trust Fund (or Accrued Benefit
Account) and (ii) the actual investment experience of such Supplemental
Retirement Income Benefit Contributions (or the monthly compounding rate
of Supplemental Retirement Income Benefit Phantom Contributions).
1.25 "Supplemental Retirement Income Benefit Contribution(s)" means those
annual contributions which the Bank is required to make to the Retirement
Income Trust Fund on behalf of the Executive in accordance with Subsection
2.1(a)(2) and in the amounts set forth in Exhibit A of the Agreement.
1.26 "Supplemental Retirement Income Benefit Phantom Contribution(s)" means
those annual contributions which the Bank is no longer required to make on
behalf of the Executive to the Retirement Income Trust Fund. Rather, once
the Executive has exercised the withdrawal rights described in Subsection
2.2, the Bank shall be required to record the annual amounts set forth in
Exhibit A of the Agreement and pursuant to Subsection 2.1(a)(2) in the
Executive's Accrued Benefit Account.
1.27 "Timely Election" means the Executive has made an election to change the
form of his benefit payment(s) by filing with the Administrator a Notice
of Election to Change Form of Payment (Exhibit C of this Agreement), such
election having been made prior to the event which triggers distribution
and at least two (2) years prior to the Executive's Benefit Eligibility
Date.
SECTION II
BENEFITS - GENERALLY
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2.1 (a)(1) Retirement Income Trust Fund and Accrued Benefit Account. The
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Executive shall establish the Michael J. Fitzpatrick Grantor Trust into
which the Bank shall be required to make annual Supplemental Retirement
Income Benefit Contributions and Supplemental ESOP Benefit Contributions
on the Executive's behalf, pursuant to Subsection 2.1(a)(2) and Exhibit A
with respect to the Supplemental Retirement Income Benefit, and pursuant
to Subsections 2.1(a)(3) and 1.21 with respect to the Supplemental ESOP
Benefit. A trustee shall be jointly selected by the Executive and the
Bank. The trustee shall maintain an account, separate and distinct from
the Executive's personal contributions, which account shall constitute the
Retirement Income Trust Fund. The trustee shall
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be charged with the responsibility of investing all contributed funds in
accordance with the terms of the Michael J. Fitzpatrick Grantor Trust.
Distributions from the Retirement Income Trust Fund of the Michael J.
Fitzpatrick Grantor Trust shall be made by the trustee to the Executive,
in accordance with the terms of the Michael J. Fitzpatrick Grantor Trust
and the tax reimbursement formula therein, for purposes of payment of
income taxes due and owing on Supplemental Retirement Income Benefit
Contributions and Supplemental ESOP Benefit Contributions by the Bank to
the Retirement Income Trust Fund, and on any taxable earnings associated
with such Contributions, which the Executive shall be required to pay from
year to year under applicable law prior to actual receipt of any benefit
payments from the Retirement Income Trust Fund. If the Executive exercises
his withdrawal rights pursuant to Subsection 2.2, the Bank's obligation to
make Supplemental Retirement Income Benefit Contributions and Supplemental
ESOP Benefit Contributions to the Retirement Income Trust Fund shall
cease, and the Bank's obligation to record Supplemental Retirement Income
Benefit Phantom Contributions and Supplemental ESOP Benefit Phantom
Contributions in the Accrued Benefit Account shall immediately commence,
pursuant to Subsections 2.1(a)(2) and 2.1(a)(3) (as applicable) and
Exhibit A of the Agreement. To the extent the language in this Agreement
is inconsistent with the language in the Michael J. Fitzpatrick Grantor
Trust agreement, this Agreement shall take precedence over the Michael J.
Fitzpatrick Grantor Trust agreement.
(2) Supplemental Retirement Income Benefit. The annual Supplemental
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Retirement Income Benefit Contributions (or Supplemental Retirement Income
Benefit Phantom Contributions) required to be made by the Bank to the
Retirement Income Trust Fund of the Michael J. Fitzpatrick Grantor Trust
(or recorded by the Bank in the Accrued Benefit Account) have been
actuarially determined and are set forth in Exhibit A which is attached
hereto and incorporated herein by reference. The amount of the annual
Supplemental Retirement Income Benefit Contributions (or Supplemental
Retirement Income Benefit Phantom Contributions) to the Retirement Income
Trust Fund (or Accrued Benefit Account) has been based on the annual
incremental accounting accruals which would be required of the Bank until
the earlier of the Executive's death or Benefit Age, (i) pursuant to APB
Opinion No. 12, as amended by FAS 106 and (ii) assuming a discount rate
equal to Six Percent (6%) per annum, in order to provide the unfunded,
non-qualified Supplemental Retirement Income Benefit described in
Subsection 1.24. Supplemental Retirement Income Benefit Contributions
shall be made by the Bank to the
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Retirement Income Trust Fund (i) within thirty (30) days of establishment
of such trust, and (ii) within the first five (5) days of the beginning of
each subsequent Plan Year, unless this Section expressly provides
otherwise. Supplemental Retirement Income Benefit Phantom Contributions,
if any, shall be recorded in the Accrued Benefit Account within the first
five (5) days of the beginning of each applicable Plan Year, unless this
Section expressly provides otherwise. Supplemental Retirement Income
Benefit Phantom Contributions shall accrue interest at a rate equal to the
Interest Factor, during the Payout Period, until the balance of the
Accrued Benefit Account has been fully distributed. Interest on any
Supplemental Retirement Income Benefit Phantom Contribution shall not
commence until such Payout Period commences.
The Administrator shall review the schedule of annual Supplemental
Retirement Income Benefit Contributions (or Supplemental Retirement Income
Benefit Phantom Contributions) provided for in Exhibit A (i) within thirty
(30) days prior to the close of every third (3rd) Plan Year and (ii) if
the Executive is employed by the Bank until attaining Benefit Age, on or
immediately before attainment of such Benefit Age. Such review shall
consist of an evaluation of the accuracy of all assumptions used to
establish (i) the schedule of Supplemental Retirement Income Benefit
Contributions (or Supplemental Retirement Income Benefit Phantom
Contributions) provided for in Exhibit A and (ii) the amount of the
Supplemental Retirement Income Benefit as defined in Subsection 1.24. Such
assumptions shall include: (a) those listed in Exhibit E, (b) an assumed
tax-deferred investment rate of Six (6%) and (c) an assumed combined
marginal Federal and state tax rate of Forty One and Three Tenths Percent
(41.3%), during the contribution period. Provided that the investments
contained in the Retirement Income Trust Fund have been approved by the
Administrator, the Administrator shall prospectively amend the schedule of
Supplemental Retirement Income Benefit Contributions (or Supplemental
Retirement Income Benefit Phantom Contributions) provided for in Exhibit
A, should the Administrator determine during any such review that an
increase (but not a decrease) in such Supplemental Retirement Income
Benefit Contributions (or Supplemental Retirement Income Benefit Phantom
Contributions) is necessary in order (i) to provide a benefit equivalent
to the existing Supplemental Retirement Income Benefit, on an after-tax
basis or (ii)
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to provide a benefit equivalent to a revised Supplemental Retirement
Income Benefit. If the Executive has exercised his withdrawal rights, the
Administrator may prospectively reduce the schedule provided for in
Exhibit A should the Administrator determine, during any review, that such
reduction is warranted in order to provide the benefit calculated pursuant
to Subsection 1.24. Furthermore, should the Administrator determine that
the balance of the Accrued Benefit Account be excessive for any reason, at
the time benefits are payable from the Accrued Benefit Account (and
Retirement Income Trust Fund) any excess balance shall be eliminated and
inure to the Bank's benefit.
(3) Supplemental ESOP Benefit. The annual Supplemental ESOP Benefit
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Contributions (or Supplemental ESOP Benefit Phantom Contributions)
required to be made by the Bank to the Retirement Income Trust Fund of the
Michael J. Fitzpatrick Grantor Trust (or recorded by the Bank in the
Accrued Benefit Account) are calculated as of December 31 of each Plan
Year. Such calculation shall be performed by the Bank in accordance with
Subsection 1.21 of this Agreement, within thirty (30) days after the end
of each Plan Year. Supplemental ESOP Benefit Contributions shall be made
by the Bank to the Retirement Income Trust Fund within sixty (60) days
after the end of each Plan Year, unless this Section expressly provides
otherwise. Supplemental ESOP Benefit Phantom Contributions shall be
recorded in the Accrued Benefit Account within sixty (60) days after the
end of each Plan Year, unless this Section expressly provides otherwise.
Supplemental ESOP Benefit Phantom Contributions shall accrue interest at a
rate equal to the Interest Factor, up to and throughout the Payout Period,
until the balance of the Accrued Benefit Account has been fully
distributed. Interest on any Supplemental ESOP Benefit Phantom
Contribution shall commence on the date such Supplemental ESOP Benefit
Phantom Contribution is initially recorded in the Executive's Accrued
Benefit Account.
If the Executive is eligible to receive a benefit under the terms of the
ESOP for any Plan Year, and a Supplemental ESOP Benefit is due for such
Plan Year pursuant to Subsection 1.21, a Supplemental ESOP Benefit
Contribution (or a Supplemental ESOP Benefit Phantom Contribution) shall
be required of the Bank for such Plan Year. If the Executive has not
exercised any withdrawal rights described in Subsection 2.2 as of December
31 of any Plan Year, a Supplemental ESOP Benefit Contribution to the
Retirement Income Trust Fund for such Plan Year
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shall be required of the Bank. If the Executive has exercised the
withdrawal rights described in Subsection 2.2 as of December 31 of any
Plan Year, a Supplemental ESOP Benefit Phantom Contribution shall be
recorded in the Executive's Accrued Benefit Account. Thereafter, the
Executive will only be eligible to receive Supplemental ESOP Benefit
Phantom Contributions. The Supplemental ESOP Benefit Contributions to the
Retirement Income Trust Fund (or the Supplemental ESOP Benefit Phantom
Contributions recorded in the Executive's Accrued Benefit Account) shall
commence in the Plan Year in which the ESOP is established, and shall
continue through each successive Plan Year in which (i) the Executive is
eligible to receive a benefit under the terms of the ESOP and (ii) a
Supplemental ESOP Benefit is due for such Plan Year pursuant to Subsection
1.21.
(b) Withdrawal Rights Not Exercised.
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(1) Contributions Made Annually
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If the Executive does not exercise any withdrawal rights pursuant to
Subsection 2.2, the annual Contributions to the Retirement Income Trust
Fund shall continue each year, unless this Subsection specifically states
otherwise, until the earlier of (i) the last Plan Year that Supplemental
Retirement Income Benefit Contributions are required pursuant to Exhibit A
or (ii) the Plan Year in which the Executive's employment terminates.
(2) Death During Employment
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If the Executive (i) does not exercise any withdrawal rights pursuant to
Subsection 2.2 and (ii) dies while employed by the Bank, all annual
Supplemental Retirement Income Benefit Contributions set forth in Exhibit
A shall be required of the Bank. Such Supplemental Retirement Income
Benefit Contributions to the Retirement Income Trust Fund shall commence
in the Plan Year in which the Retirement Income Trust Fund is established
and shall continue through the Plan Year in which the Executive dies. The
final Supplemental Retirement Income Benefit Contribution payable for the
Plan Year of the Executive's death shall be equal to: (i) the Supplemental
Retirement Income Benefit Contribution scheduled for such Plan Year
pursuant to Exhibit A (unless already made), plus (ii) any remaining
Supplemental Retirement Income Benefit Contributions, required pursuant to
Exhibit A, for Plan Years subsequent to the Executive's death. Such final
Supplemental Retirement Income Benefit Contribution shall be payable in a
lump sum to the Retirement Income Trust Fund within thirty (30) days of
the Executive's death.
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(3) Change in Control
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If (i) the Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2 and (ii) a Change in Control (as defined in Subsection 5.2)
occurs at the Bank, the Supplemental Retirement Income Benefit
Contributions set forth below shall be required of the Bank. The annual
Supplemental Retirement Income Benefit Contributions set forth in Exhibit
A shall be made to the Retirement Income Trust Fund, commencing in the
Plan Year in which the Retirement Income Trust Fund is established and
continuing through the Plan Year in which the Change in Control occurs.
Upon the occurrence of said Change in Control (as defined in Subsection
5.2), the Bank shall be required to make a lump sum Supplemental
Retirement Income Benefit Contribution to the Executive's Retirement
Income Trust Fund in an amount equal to: (i) the full Supplemental
Retirement Income Benefit Contribution required for the Plan Year in which
such Change in Control occurs, as provided for in Exhibit A (unless
already made), plus (ii) the present value (computed using a discount rate
equal to Four Percent (4%) per annum) of the total Supplemental Retirement
Income Benefit Contributions which would have been required in accordance
with Exhibit A for the three (3) Plan Years following the Plan Year in
which such Change in Control occurs. In the event the Executive continues
employment with the Bank following the date of the Change in Control, the
Bank shall be required to resume making Supplemental Retirement Income
Benefit Contributions in accordance with the schedule provided for in
Exhibit A. Such Supplemental Retirement Income Benefit Contributions shall
resume in the fourth (4th) Plan Year following the Plan Year in which the
Change in Control occurred and shall continue for the lesser of: (i) the
number of years remaining in the schedule provided for in Exhibit A, or
(ii) the number of years the Executive remains employed by the Bank.
(4) Voluntary or Involuntary Termination (Not For Cause) Prior to
Benefit Age
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If the Executive (i) does not exercise his withdrawal rights pursuant to
Subsection 2.2 and (ii) voluntarily or involuntarily terminates his
service with the Bank pursuant to Subsection 5.1 and such termination is
not for Cause, disability, or related to a Change in Control, the annual
Supplemental Retirement Income Benefit Contributions to the Retirement
Income Trust Fund set forth in Exhibit A for all Plan Years through the
Plan Year in which such termination occurs, shall be required of the Bank.
No additional Supplemental Retirement Income Benefit Contributions to the
Retirement Income Trust Fund shall be required by the Bank for Plan Years
subsequent to the Plan Year in which termination occurs
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(5) Termination Due to Disability
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If the Executive (i) does not exercise his withdrawal rights pursuant to
Subsection 2.2 and (ii) terminates service with the Bank due to disability
pursuant to Subsection 6.1, all annual Supplemental Retirement Income
Benefit Contributions set forth in Exhibit A for all Plan Years through
the Plan Year in which such termination occurs shall be required of the
Bank. No additional Supplemental Retirement Income Benefit Contributions
to the Retirement Income Trust Fund shall be required by the Bank for Plan
Years subsequent to the Plan Year in which termination occurs.
(6) Termination For Cause
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If the Executive (i) does not exercise his withdrawal rights pursuant to
Subsection 2.2 and (ii) is terminated for Cause pursuant to Subsections
1.8 and 5.3, the annual Supplemental Retirement Income Benefit
Contributions to the Retirement Income Trust Fund set forth in Exhibit A
for all Plan Years through the Plan Year in which such termination occurs
shall be required of the Bank. Thereafter, no further Supplemental
Retirement Income Benefit Contribution(s) to the Retirement Income Trust
Fund shall be required of the Bank for Plan Years subsequent to the Plan
Year in which such termination for Cause occurs.
(c) Withdrawal Rights Exercised.
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(1) Phantom Contributions Made Annually
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If the Executive exercises his withdrawal rights pursuant to Subsection
2.2, no further Supplemental Retirement Income Benefit Contributions to
the Retirement Income Trust Fund shall be required of the Bank.
Thereafter, Supplemental Retirement Income Benefit Phantom Contributions
shall be recorded annually, pursuant to Exhibit A, in the Executive's
Accrued Benefit Account commencing with the Plan Year following the Plan
Year in which the Executive first exercises his withdrawal rights. Such
Supplemental Retirement Income Benefit Contributions shall continue until
the earlier of (i) the last Plan Year that Supplemental Retirement Income
Benefit Phantom Contributions are required pursuant to Exhibit A, or (ii)
the Plan Year in which the Executive's employment terminates.
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(2) Death During Employment
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If the Executive (i) exercises his withdrawal rights pursuant to
Subsection 2.2 and (ii) dies while employed by the Bank, all annual
Supplemental Retirement Income Benefit Contributions set forth in Exhibit
A for all Plan Years preceding and including such exercise of withdrawal
rights shall be required of the Bank. Such Supplemental Retirement Income
Benefit Contributions to the Retirement Income Trust Fund shall commence
in the Plan Year in which the Retirement Income Trust Fund is established
and shall continue through the Plan Year in which the Executive first
exercises his withdrawal rights. Thereafter, Supplemental Retirement
Income Benefit Phantom Contributions shall be recorded annually, pursuant
to Exhibit A, in the Executive's Accrued Benefit Account. Supplemental
Retirement Income Benefit Phantom Contributions shall be recorded for the
Plan Year following the Plan Year in which the Executive first exercises
his withdrawal rights and shall continue through the Plan Year in which
the Executive dies. The final Supplemental Retirement Income Benefit
Phantom Contribution recorded in the Accrued Benefit Account for the Plan
Year of the Executive's death shall be equal to: (i) the Supplemental
Retirement Income Benefit Phantom Contribution scheduled for such Plan
Year pursuant to Exhibit A (unless already made), plus (ii) all remaining
Supplemental Retirement Income Benefit Phantom Contributions, required
pursuant to Exhibit A, for Plan Years subsequent to the Executive's death.
Such final Supplemental Retirement Income Benefit Phantom Contribution
shall be recorded in the Accrued Benefit Account within thirty (30) days
of the Executive's death.
(3) Change in Control
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If the (i) Executive exercises his withdrawal rights pursuant to
Subsection 2.2 and (ii) a Change in Control (as defined in Subsection 5.2)
occurs at the Bank, the following Supplemental Retirement Income Benefit
Contributions and Supplemental Retirement Income Benefit Phantom
Contributions shall be required of the Bank. The annual Supplemental
Retirement Income Benefit Contributions set forth in Exhibit A shall be
made to the Retirement Income Trust Fund, commencing in the Plan Year in
which the Retirement Income Trust Fund is established and continuing
through the Plan Year in which the Executive first exercises his
withdrawal rights. Thereafter, Supplemental Retirement Income Benefit
Phantom Contributions shall be recorded, annually, in the Executive's
Accrued Benefit Account. Supplemental Retirement Income Benefit Phantom
Contributions shall commence in the Plan Year following the Plan Year in
which the Executive first exercises his withdrawal rights and shall
continue through the Plan Year in which
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the Change in Control occurs. Upon the occurrence of said Change in
Control (as defined in Subsection 5.2), the Bank shall be required to
record a lump sum Supplemental Retirement Income Benefit Phantom
Contribution in the Executive's Accrued Benefit Account in an amount equal
to: (i) the full Supplemental Retirement Income Benefit Phantom
Contribution required for the Plan Year in which such Change in Control
occurs, as provided for in Exhibit A (unless already made), plus (ii) the
present value (computed using a discount rate equal to Six Percent (6%)
per annum) of the total Supplemental Retirement Income Benefit Phantom
Contributions which would have been required in accordance with Exhibit A
for the three (3) Plan Years following the Plan Year in which such Change
in Control occurs. In the event the Executive continues employment with
the Bank following the date of the Change in Control, the Bank shall be
required to resume recording Supplemental Retirement Income Benefit
Phantom Contributions in accordance with the schedule provided for in
Exhibit A. Such Supplemental Retirement Income Benefit Phantom
Contributions shall resume in the fourth (4th) Plan Year following the
Plan Year in which the Change in Control occurred and shall continue for
the lesser of: (i) the number of years remaining in the schedule provided
for in Exhibit A, or (ii) the number of years the Executive remains
employed by the Bank.
(4) Voluntary or Involuntary Termination (Not For Cause) Prior to
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Benefit Age
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If the Executive (i) exercises his withdrawal rights pursuant to
Subsection 2.2 and (ii) voluntarily or involuntarily terminates his
service with the Bank pursuant to Subsection 5.1 and such termination is
not for Cause, disability, or related to a Change in Control, all annual
Supplemental Retirement Income Benefit Contributions set forth in Exhibit
A for all Plan Years preceding and including such exercise of withdrawal
rights shall be required of the Bank. Such Supplemental Retirement Income
Benefit Contributions to the Retirement Income Trust Fund shall commence
in the Plan Year in which the Retirement Income Trust Fund is established
and shall continue through the Plan Year in which the Executive first
exercises his withdrawal rights. Thereafter, Supplemental Retirement
Income Benefit Phantom Contributions shall be recorded annually, pursuant
to Exhibit A, in the Executive's Accrued Benefit Account. Supplemental
Retirement Income Benefit Phantom Contributions shall be recorded for the
Plan Year following the Plan Year in which the Executive first exercises
his withdrawal rights and shall continue through the Plan Year in which
the Executive is terminated. No additional Supplemental Retirement Income
Benefit Phantom Contributions shall be required to be recorded in the
Accrued Benefit Account for Plan Years subsequent to the Plan Year in
which termination occurs.
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(5) Termination Due to Disability
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If the Executive (i) exercises his withdrawal rights pursuant to
Subsection 2.2 and (ii) terminates service with the Bank due to disability
pursuant to Subsection 6.1, all annual Supplemental Retirement Income
Benefit Contributions set forth in Exhibit A for all Plan Years preceding
and including such exercise of withdrawal rights shall be required of the
Bank. Such Supplemental Retirement Income Benefit Contributions to the
Retirement Income Trust Fund shall commence in the Plan Year in which the
Retirement Income Trust Fund is established and shall continue through the
Plan Year in which the Executive first exercises his withdrawal rights.
Thereafter, Supplemental Retirement Income Benefit Phantom Contributions
shall be recorded annually, pursuant to Exhibit A, in the Executive's
Accrued Benefit Account. Supplemental Retirement Income Benefit Phantom
Contributions shall be recorded for the Plan Year following the Plan Year
in which the Executive first exercises his withdrawal rights and shall
continue through the Plan Year in which the termination due to disability
occurs. No additional Supplemental Retirement Income Benefit Phantom
Contributions shall be required to be recorded in the Accrued Benefit
Account for Plan Years subsequent to the Plan Year in which termination
occurs.
(6) Termination For Cause
---------------------
If the Executive (i) exercises his withdrawal rights pursuant to
Subsection 2.2 and (ii) is terminated for Cause pursuant to Subsections
1.8 and 5.3, the annual Supplemental Retirement Income Benefit
Contributions to the Retirement Income Trust Fund set forth in Exhibit A
for all Plan Years preceding and including such exercise of withdrawal
rights shall be required of the Bank. Such Supplemental Retirement Income
Benefit Contributions to the Retirement Income Trust Fund shall commence
in the Plan Year in which the Retirement Income Trust Fund is established
and shall continue through the Plan Year in which the Executive first
exercises his withdrawal rights. The entire balance of the Executive's
Accrued Benefit Account at the time of such termination, which shall
include (i) any recorded Supplemental Retirement Income Benefit Phantom
Contributions, plus (ii) interest accrued on such Supplemental Retirement
Income Benefit Phantom Contributions, shall be forfeited.
15
DRAFT
2.2 Withdrawals from Retirement Income Trust Fund.
----------------------------------------------
Exercise of withdrawal rights by the Executive pursuant to the Michael J.
Fitzpatrick Grantor Trust agreement shall terminate the Bank's obligation
to make any further Supplemental Retirement Income Benefit Contributions
and Supplemental ESOP Benefit Contributions to the Retirement Income Trust
Fund, and the Bank's obligation to record Supplemental Retirement Income
Benefit Phantom Contributions and Supplemental ESOP Benefit Phantom
Contributions in the Executive's Accrued Benefit Account shall immediately
commence pursuant to Subsection 2.1 of the Agreement. For purposes of this
Subsection 2.2, "exercise of withdrawal rights" shall mean those
withdrawal rights to which the Executive is entitled under Article III of
the Michael J. Fitzpatrick Grantor Trust agreement and shall exclude any
distributions made by the trustee of the Retirement Income Trust Fund to
the Executive for purposes of payment of income taxes in accordance with
Subsection 2.1 of this Agreement.
SECTION III
RETIREMENT BENEFIT
------------------
3.1 (a) Normal form of payment.
----------------------
If (i) the Executive is employed with the Bank until reaching his Benefit
Age, excluding employment with the Bank until Benefit Age following a
Change in Control which is covered in Subsection 5.1, and (ii) the
Executive has not made a Timely Election to receive a lump sum benefit,
this Subsection 3.1(a) shall be controlling with respect to retirement
benefits. Supplemental Retirement Income Benefit Contributions shall be
made in accordance with Subsection 2.1(b)(1) and Supplemental Retirement
Income Benefit Phantom Contributions shall be recorded in accordance with
2.1(c)(1), as applicable. Supplemental ESOP Benefit Contributions and
Supplemental ESOP Benefit Phantom Contributions, as applicable, shall be
made or recorded in accordance with Subsection 2.1(a)(3).
The Retirement Income Trust Fund, measured as of the Executive's Benefit
Age, shall be annuitized (using the Interest Factor) into monthly
installments and shall be payable for the Payout Period. Such benefit
payments shall commence on the Executive's Benefit Eligibility Date.
Should Retirement Income Trust Fund assets actually earn a rate of return,
following the date such balance is annuitized, which is less than the rate
of return used to annuitize the Retirement Income
16
DRAFT
Trust Fund, no additional contributions to the Retirement Income Trust
Fund shall be required by the Bank in order to fund the final benefit
payment(s) and make up for any shortage attributable to the less-than-
expected rate of return. Should Retirement Income Trust Fund assets
actually earn a rate of return, following the date such balance is
annuitized, which is greater than the rate of return used to annuitize the
Retirement Income Trust Fund, the final benefit payment to the Executive
(or his Beneficiary) shall distribute the excess amounts attributable to
the greater-than-expected rate of return. The Executive may at anytime
during the Payout Period request to receive the unpaid balance of his
Retirement Income Trust Fund in a lump sum payment. If such a lump sum
payment is requested by the Executive, payment of the balance of the
Retirement Income Trust Fund in such lump sum form shall be made only if
the Executive gives notice to both the Administrator and trustee in
writing. Such lump sum payment shall be payable within thirty (30) days
of such notice. In the event the Executive dies at any time after
attaining his Benefit Age, but prior to commencement or completion of all
monthly payments due and owing hereunder, (i) the trustee of the
Retirement Income Trust Fund shall pay to the Executive's Beneficiary the
monthly installments (or a continuation of such monthly installments if
they have already commenced) for the balance of months remaining in the
Payout Period, or (ii) the Executive's Beneficiary may request to receive
the unpaid balance of the Executive's Retirement Income Trust Fund in a
lump sum payment. If a lump sum payment is requested by the Beneficiary,
payment of the balance of the Retirement Income Trust Fund in such lump
sum form shall be made only if the Executive's Beneficiary notifies both
the Administrator and trustee in writing of such election within ninety
(90) days of the Executive's death. Such lump sum payment shall be payable
within thirty (30) days of such notice.
The Executive's Accrued Benefit Account (if applicable), measured as of
the Executive's Benefit Age, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable for the Payout
Period. Such benefit payments shall commence on the Executive's Benefit
Eligibility Date. In the event the Executive dies at any time after
attaining his Benefit Age, but prior to commencement or completion of all
the payments due and owing hereunder, (i) the Bank shall pay to the
Executive's Beneficiary the same monthly installments (or a continuation
of such monthly installments if they have already commenced) for the
balance of months remaining in the Payout Period, or (ii) the Executive's
Beneficiary may request to receive the remainder of any unpaid benefit
payments in a lump sum payment. If a lump sum payment is requested by the
17
DRAFT
Beneficiary, the amount of such lump sum payment shall be equal to the
unpaid balance of the Executive's Accrued Benefit Account. Payment in such
lump sum form shall be made only if the Executive's Beneficiary (i)
obtains Board of Director approval, and (ii) notifies the Administrator in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment, if approved by the Board of Directors, shall be
payable within thirty (30) days of such Board of Director approval.
(b) Alternative payout option.
-------------------------
If (i) the Executive is employed with the Bank until reaching his Benefit
Age, excluding employment with the Bank until Benefit Age following a
Change in Control which is covered in Subsection 5.1, and (ii) the
Executive has made a Timely Election to receive a lump sum benefit, this
Subsection 3.1(b) shall be controlling with respect to retirement
benefits. Supplemental Retirement Income Benefit Contributions shall be
made in accordance with Subsection 2.1(b)(1) and Supplemental Retirement
Income Benefit Phantom Contributions shall be recorded in accordance with
2.1(c)(1). Supplemental ESOP Benefit Contributions and Supplemental ESOP
Benefit Phantom Contributions, as applicable, shall be made or recorded in
accordance with Subsection 2.1(a)(3).
The balance of the Retirement Income Trust Fund, measured as of the
Executive's Benefit Age, shall be paid to the Executive in a lump sum on
his Benefit Eligibility Date. In the event the Executive dies after
becoming eligible for such payment (upon attainment of his Benefit Age),
but before the actual payment is made, his Beneficiary shall be entitled
to receive the lump sum benefit in accordance with this Subsection 3.1(b)
within thirty (30) days of the date the Administrator receives notice of
the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the Executive's Benefit Age, shall be paid to the Executive
in a lump sum on his Benefit Eligibility Date. In the event the Executive
dies after becoming eligible for such payment (upon attainment of his
Benefit Age), but before the actual payment is made, his Beneficiary shall
be entitled to receive the lump sum benefit in accordance with this
Subsection 3.1(b) within thirty (30) days of the date the Administrator
receives notice of the Executive's death.
18
DRAFT
SECTION IV
PRE-RETIREMENT DEATH BENEFIT
----------------------------
4.1 (a) Normal form of payment.
----------------------
If (i) the Executive dies while employed by the Bank and (ii) the
Executive has not made a Timely Election to receive a lump sum benefit,
this Subsection 4.1(a) shall be controlling with respect to pre-retirement
death benefits. Supplemental Retirement Income Benefit Contributions shall
be made in accordance with Subsection 2.1(b)(2) (or 2.1(b)(3), as
applicable) and Supplemental Retirement Income Benefit Phantom
Contributions shall be recorded in accordance with 2.1(c)(2) (or
2.1(c)(3), as applicable). Supplemental ESOP Benefit Contributions and
Supplemental ESOP Benefit Phantom Contributions, as applicable, shall be
made or recorded in accordance with Subsection 2.1(a)(3).
The Executive's Beneficiary shall be entitled to receive benefits in
accordance with this Subsection 4.1(a). The Executive's Retirement Income
Trust Fund, measured as of the latest of (i) the date of the Executive's
death, (ii) the date any final lump sum Supplemental Retirement Income
Benefit Contribution is made pursuant to Subsection 2.1(b)(2) (or
2.1(b)(3)), or (iii) the date any final Supplemental ESOP Benefit
Contribution is made pursuant to Subsection 2.1(a)(3), shall be annuitized
(using the Interest Factor) into monthly installments and shall be payable
for the Payout Period. Such benefit payments shall commence within thirty
(30) days of the date the Administrator receives notice of the Executive's
death. Should Retirement Income Trust Fund assets actually earn a rate of
return, following the date such balance is annuitized, which is less than
the rate of return used to annuitize the Retirement Income Trust Fund, no
additional contributions to the Retirement Income Trust Fund shall be
required by the Bank in order to fund the final benefit payment(s) and
make up for any shortage attributable to the less-than-expected rate of
return. Should Retirement Income Trust Fund assets actually earn a rate of
return, following the date such balance is annuitized, which is greater
than the rate of return used to annuitize the Retirement Income Trust
Fund, the final benefit payment to the Executive's Beneficiary shall
distribute the excess amounts attributable to the greater-than-expected
rate of return. The Executive's Beneficiary may request to receive the
unpaid balance of the Executive's Retirement Income Trust Fund in a lump
sum payment. If a lump sum payment is requested by the Beneficiary,
payment of the balance of the Retirement Income Trust Fund in such lump
sum form shall be made only if the Executive's Beneficiary notifies both
the Administrator and trustee
19
DRAFT
in writing of such election within ninety (90) days of the Executive's
death. Such lump sum payment shall be made within thirty (30) days of such
notice.
The Executive's Accrued Benefit Account (if applicable), measured as of
the latest of (i) the date of the Executive's death, (ii) the date the
final Supplemental Retirement Income Benefit Phantom Contribution is
recorded pursuant to Subsection 2.1(c)(2) (or 2.1(c)(3)), or (iii) the
date any final Supplemental ESOP Benefit Phantom Contribution is recorded
pursuant to Subsection 2.1(a)(3), shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable to the Beneficiary
for the Payout Period. Such benefit payments shall commence within thirty
(30) days of the date the Administrator receives notice of the Executive's
death. The Executive's Beneficiary may request to receive the remainder of
any unpaid monthly benefit payments due from the Accrued Benefit Account
in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, the amount of such lump sum payment shall be equal to the
balance of the Executive's Accrued Benefit Account. Payment in such lump
sum form shall be made only if the Executive's Beneficiary (i) obtains
Board of Director approval, and (ii) notifies the Administrator in writing
of such election within ninety (90) days of the Executive's death. Such
lump sum payment, if approved by the Board of Directors, shall be payable
within thirty (30) days of such Board of Director approval.
(b) Alternative payout option.
-------------------------
If (i) the Executive dies while employed by the Bank and (ii) the
Executive has made a Timely Election to receive a lump sum benefit, this
Subsection 4.1(b) shall be controlling with respect to pre-retirement
death benefits. Supplemental Retirement Income Benefit Contributions shall
be made in accordance with Subsection 2.1(b)(2) (or 2.1(b)(3), as
applicable) and Supplemental Retirement Income Benefit Phantom
Contributions shall be recorded in accordance with 2.1(c)(2) (or
2.1(c)(3), as applicable). Supplemental ESOP Benefit Contributions and
Supplemental ESOP Benefit Phantom Contributions, as applicable, shall be
made or recorded in accordance with Subsection 2.1(a)(3).
The Executive's Beneficiary shall be entitled to receive a lump sum
benefit in accordance with this Subsection 4.1(b). The balance of the
Executive's Retirement Income Trust Fund, measured as of the latest of (i)
the date of the Executive's death, (ii) the date any final lump sum
Supplemental Retirement Income Benefit Contribution is made pursuant to
Subsection 2.1(b)(2) (or 2.1(b)(3)),
20
DRAFT
or (iii) the date any final Supplemental ESOP Benefit Contribution is made
pursuant to Subsection 2.1(a)(3), shall be paid to the Executive's
Beneficiary in a lump sum within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the latest of (i) the date of the Executive's death, (ii)
the date the final Supplemental Retirement Income Benefit Phantom
Contribution is recorded pursuant to Subsection 2.1(c)(2) (or 2.1(c)(3)),
or (iii) the date any final Supplemental ESOP Benefit Phantom Contribution
is recorded pursuant to Subsection 2.1(a)(3), shall be paid to the
Executive's Beneficiary in a lump sum within thirty (30) days of the date
the Administrator receives notice of the Executive's death.
SECTION V
BENEFIT(S) IN THE EVENT OF TERMINATION OF SERVICE
-------------------------------------------------
PRIOR TO BENEFIT AGE
--------------------
5.1 Voluntary or Involuntary Termination of Service Other Than for Cause. In
--------------------------------------------------------------------
the event the Executive's service with the Bank is voluntarily or
involuntarily terminated prior to Benefit Age, for any reason other than
for Cause, but excluding any termination related to disability which shall
be covered in Section VI, the Executive (or his Beneficiary) shall be
entitled to receive benefits in accordance with this Subsection 5.1.
Payment of benefits pursuant to this Subsection 5.1 shall be made in
accordance with Subsection 5.1(a) or 5.1(b) below, as applicable.
(a) Normal form of payment.
----------------------
(1) Executive Lives Until Benefit Age
---------------------------------
If (i) after such termination, the Executive lives until attaining his
Benefit Age, and (ii) the Executive has not made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(a)(1) shall be controlling
with respect to retirement benefits. Supplemental Retirement Income
Benefit Contributions shall be made in accordance with Subsection
2.1(b)(4) (or 2.1(b)(3), as applicable) and Supplemental Retirement Income
Benefit Phantom Contributions shall be recorded in accordance with
2.1(c)(4) (or (2.1(c)(3), as applicable). Supplemental ESOP Benefit
Contributions and Supplemental ESOP Benefit Phantom Contributions, as
applicable, shall be made or recorded in accordance with Subsection
2.1(a)(3).
21
DRAFT
The Retirement Income Trust Fund, measured as of the Executive's Benefit
Age, shall be annuitized (using the Interest Factor) into monthly
installments and shall be payable for the Payout Period. Such payments
shall commence on the Executive's Benefit Eligibility Date. Should
Retirement Income Trust Fund assets actually earn a rate of return,
following the date such balance is annuitized, which is less than the rate
of return used to annuitize the Retirement Income Trust Fund, no
additional contributions to the Retirement Income Trust Fund shall be
required by the Bank in order to fund the final benefit payment(s) and
make up for any shortage attributable to the less-than-expected rate of
return. Should Retirement Income Trust Fund assets actually earn a rate of
return, following the date such balance is annuitized, which is greater
than the rate of return used to annuitize the Retirement Income Trust
Fund, the final benefit payment to the Executive (or his Beneficiary)
shall distribute the excess amounts attributable to the greater-than-
expected rate of return. The Executive may at anytime during the Payout
Period request to receive the unpaid balance of his Retirement Income
Trust Fund in a lump sum payment. If such a lump sum payment is requested
by the Executive, payment of the balance of the Retirement Income Trust
Fund in such lump sum form shall be made only if the Executive gives
notice to both the Administrator and trustee in writing. Such lump sum
payment shall be payable within thirty (30) days of such notice. In the
event the Executive dies at any time after attaining his Benefit Age, but
prior to commencement or completion of all monthly payments due and owing
hereunder, (i) the trustee of the Retirement Income Trust Fund shall pay
to the Executive's Beneficiary the monthly installments (or a continuation
of the monthly installments if they have already commenced) for the
balance of months remaining in the Payout Period, or (ii) the Executive's
Beneficiary may request to receive the unpaid balance of the Executive's
Retirement Income Trust Fund in a lump sum payment. If a lump sum payment
is requested by the Beneficiary, payment of the balance of the Retirement
Income Trust Fund in such lump sum form shall be made only if the
Executive's Beneficiary notifies both the Administrator and trustee in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment shall be made within thirty (30) days of such
notice.
22
DRAFT
The Executive's Accrued Benefit Account (if applicable), measured as of
the Executive's Benefit Age, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable of the Payout
Period. Such payments shall commence on the Executive's Benefit
Eligibility Date. In the event the Executive dies at any time after
attaining his Benefit Age, but prior to commencement or completion of all
the payments due and owing hereunder, (i) the Bank shall pay to the
Executive's Beneficiary the same monthly installments (or a continuation
of such monthly installments if they have already commenced) for the
balance of months remaining in the Payout Period, or (ii) the Executive's
Beneficiary may request to receive the remainder of any unpaid benefit
payments in a lump sum payment. If a lump sum payment is requested by the
Beneficiary, the amount of such lump sum payment shall be equal to the
unpaid balance of the Executive's Accrued Benefit Account. Payment in such
lump sum form shall be made only if the Executive's Beneficiary (i)
obtains Board of Director approval, and (ii) notifies the Administrator in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment, if approved by the Board of Directors, shall be
payable within thirty (30) days of such Board of Director approval.
(2) Executive Dies Prior to Benefit Age
-----------------------------------
If (i) after such termination, the Executive dies prior to attaining his
Benefit Age, and (ii) the Executive has not made a Timely Election to
receive a lump sum benefit, this Subsection 5.1(a)(2) shall be controlling
with respect to retirement benefits. Supplemental Retirement Income
Benefit Contributions shall be made in accordance with Subsection
2.1(b)(4) (or 2.1(b)(3), as applicable) and Supplemental Retirement Income
Benefit Phantom Contributions shall be recorded in accordance with
2.1(c)(4) (or 2.1(c)(3), as applicable). Supplemental ESOP Benefit
Contributions and Supplemental ESOP Benefit Phantom Contributions, as
applicable, shall be made or recorded in accordance with Subsection
2.1(a)(3).
The Retirement Income Trust Fund, measured as of the date of the
Executive's death, shall be annuitized (using the Interest Factor) into
monthly installments and shall be payable for the Payout Period. Such
payments shall commence within thirty (30) days of the date the
Administrator receives notice of the Executive's death. Should Retirement
Income Trust Fund assets actually earn a rate of return, following the
date such balance is annuitized, which is less than the rate of return
used to annuitize the Retirement Income Trust Fund, no additional
contributions to the Retirement Income Trust Fund shall be required by the
Bank in order to fund the final benefit
23
DRAFT
payment(s) and make up for any shortage attributable to the less-than-
expected rate of return. Should Retirement Income Trust Fund assets
actually earn a rate of return, following the date such balance is
annuitized, which is greater than the rate of return used to annuitize the
Retirement Income Trust Fund, the final benefit payment to the Executive's
Beneficiary shall distribute the excess amounts attributable to the
greater-than-expected rate of return. The Executive's Beneficiary may
request to receive the unpaid balance of the Executive's Retirement Income
Trust Fund in the form of a lump sum payment. If a lump sum payment is
requested by the Beneficiary, payment of the balance of the Retirement
Income Trust Fund in such lump sum form shall be made only if the
Executive's Beneficiary notifies both the Administrator and trustee in
writing of such election within ninety (90) days of the Executive's death.
Such lump sum payment shall be made within thirty (30) days of such
notice.
The Executive's Accrued Benefit Account (if applicable), measured as of
the date of the Executive's death, shall be annuitized (using the Interest
Factor) into monthly installments and shall be payable for the Payout
Period. Such payments shall commence within thirty (30) days of the date
the Administrator receives notice of the Executive's death. The
Executive's Beneficiary may request to receive the unpaid balance of the
Executive's Accrued Benefit Account in the form of a lump sum payment. If
a lump sum payment is requested by the Beneficiary, payment of the balance
of the Accrued Benefit Account in such lump sum form shall be made only if
the Executive's Beneficiary (i) obtains Board of Director approval, and
(ii) notifies the Administrator in writing of such election within ninety
(90) days of the Executive's death. Such lump sum payment, if approved by
the Board of Directors, shall be made within thirty (30) days of such
Board of Director approval.
(b) Alternative payout option.
-------------------------
(1) Executive Lives Until Benefit Age
---------------------------------
If (i) after such termination, the Executive lives until attaining his
Benefit Age, and (ii) the Executive has made a Timely Election to receive
a lump sum benefit, this Subsection 5.1(b)(1) shall be controlling with
respect to retirement benefits. Supplemental Retirement Income Benefit
Contributions shall be made in accordance with Subsection 2.1(b)(4) (or
2.1(b)(3), as applicable) and Supplemental Retirement Income Benefit
Phantom Contributions shall be recorded in accordance with 2.1(c)(4) (or
2.1(c)(3), as applicable). Supplemental ESOP Benefit Contributions
24
DRAFT
and Supplemental ESOP Benefit Phantom Contributions, as applicable, shall
be made or recorded in accordance with Subsection 2.1(a)(3).
The Retirement Income Trust Fund, measured as of the Executive's Benefit
Age, shall be paid to the Executive in a lump sum on his Benefit
Eligibility Date. In the event the Executive dies after becoming eligible
for such payment (upon attainment of his Benefit Age), but before the
actual payment is made, his Beneficiary shall be entitled to receive the
lump sum benefit in accordance with this Subsection 5.1(b)(1) within
thirty (30) days of the date the Administrator receives notice of the
Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the Executive's Benefit Age, shall be paid to the Executive
in a lump sum on his Benefit Eligibility Date. In the event the Executive
dies after becoming eligible for such payment (upon attainment of his
Benefit Age), but before the actual payment is made, his Beneficiary shall
be entitled to receive the lump sum benefit in accordance with this
Subsection 5.1(b)(1) within thirty (30) days of the date the Administrator
receives notice of the Executive's death.
(2) Executive Dies Prior to Benefit Age
-----------------------------------
If (i) after such termination, the Executive dies prior to attaining his
Benefit Age, and (ii) the Executive has made a Timely Election to receive
a lump sum benefit, this Subsection 5.1(b)(2) shall be controlling with
respect to retirement benefits. Supplemental Retirement Income Benefit
Contributions shall be made in accordance with Subsection 2.1(b)(4) (or
2.1(b)(3), as applicable) and Supplemental Retirement Income Benefit
Phantom Contributions shall be recorded in accordance with 2.1(c)(4) (or
2.1(c)(3), as applicable). Supplement ESOP Benefit Contributions and
Supplemental ESOP Benefit Phantom Contributions, as applicable, shall be
made or recorded in accordance with Subsection 2.1(a)(3).
The balance of the Retirement Income Trust Fund, measured as of the date
of the Executive's death, shall be paid to the Executive's Beneficiary
within thirty (30) days of the date the Administrator receives notice of
the Executive's death.
The balance of the Executive's Accrued Benefit Account (if applicable),
measured as of the date of the Executive's death, shall be paid to the
Executive's Beneficiary within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
25
DRAFT
5.2 Change in Control Defined.
-------------------------
For purposes of this Subsection, the terms "stockholders" and "member(s)"
shall be considered one and the same. For purposes of this Subsection, the
term "Holding Company" shall mean the holding company (including any
successor thereto) organized to acquire the capital stock of the Bank upon
the Bank's conversion from mutual to stock form. For purposes of this
Agreement, a "Change in Control" of the Bank shall include the following:
(1) a Change in Control of a nature that would be required to be
reported in response to Item 1 of the current report on Form 8-K, as
in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"); or
(2) a change in control of the Bank within the meaning of 12 C.F.R.
574.4; or
(3) a Change in Control at such time as
(i) any "person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank representing Twenty
Percent (20.0%) or more of the combined voting power of the
Bank's outstanding securities ordinarily having the right to
vote at the election of directors, except for (i) any stock of
the Bank purchased by the Holding Company in connection with
the conversion of the Bank to stock form, and (ii) any stock
purchased by the Bank's Employee Stock Ownership Plan and/or
trust; or
(ii) individuals who constitute the board of directors on the date
hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board, or whose
nomination for election by the Bank's members (or stockholders)
was approved by the Bank's nominating committee which is
comprised of members of the Incumbent Board, shall be, for
purposes of this clause (ii), considered as though he were a
member of the Incumbent Board; or
(iii) merger, consolidation, or sale of all or substantially all of
the assets of the Bank occurs; or
(iv) a proxy statement is issued soliciting proxies from the members
(or stockholders) of the Bank by someone other than the current
management of the Bank, seeking member (or stockholder)
approval of a plan of reorganization, merger, or
26
DRAFT
consolidation of the Bank with one or more corporations as a
result of which the outstanding shares of the class of the
Bank's securities are exchanged for or converted into cash or
property or securities not issued by the Bank.
(4) any company, any director or officer of a bank or savings and loan
holding company, or any individual who owns, controls, or holds more
than twenty-five percent (25.0%) of the voting stock of a bank or
savings and loan holding company seeks to effect a change in control
(as defined herein) and receives written approval from the
appropriate federal bank regulatory agency pursuant to 12 C.F.R.
574.3(a),
(5) any person (other than certain persons affiliated with a bank or
savings and loan holding company subject to 12 C.F.R. 574.3(a))
seeks to effect a change in control of the Bank (as defined herein)
and receives written approval from the appropriate federal bank
regulatory agency pursuant to 12 C.F.R. 574.3(b), or
(6) any appropriate federal bank regulatory agency approves any
combination, merger, consolidation, purchase or sale of assets
pursuant to 12 C.F.R. 563.22 or 12 C.F.R. 522.13.
5.3 Termination For Cause. If the Executive is terminated for Cause, all
----------------------
benefits under this Agreement, other than those which can be paid from
previous Supplemental Retirement Income Benefit Contributions and
Supplemental ESOP Benefit Contributions to the Retirement Income Trust
Fund (and earnings on all such Contributions), shall be forfeited, and
this Agreement shall become null and void. Furthermore, no Supplemental
Retirement Income Benefit Contribution or Supplemental ESOP Benefit
Contribution to the Executive's Retirement Income Trust Fund shall be
required of the Bank for the Plan Year in which such termination for Cause
occurs. The Executive shall be entitled to receive a benefit in accordance
with this Subsection.
The balance of the Executive's Retirement Income Trust Fund shall be paid
to the Executive in a lump sum on his Benefit Eligibility Date. In the
event the Executive dies prior to his Benefit Eligibility Date, his
Beneficiary shall be entitled to receive the balance of the Executive's
Retirement Income Trust Fund in a lump sum within thirty (30) days of the
date the Administrator receives notice of the Executive's death.
27
DRAFT
SECTION VI
OTHER BENEFITS
--------------
6.1 (a) Disability Benefit.
------------------
If the Executive's service is terminated prior to Benefit Age due to a
disability which meets the criteria set forth below, the Executive may
request to receive the Disability Benefit in lieu of the retirement
benefit(s) available pursuant to Section 5.1 (which is (are) not available
prior to the Executive's Benefit Eligibility Date). Supplemental
Retirement Income Benefit Contributions shall be made in accordance with
Subsection 2.1(b)(5) and Supplemental Retirement Income Benefit Phantom
Contributions shall be recorded in accordance with 2.1(c)(5), as
applicable. Supplemental ESOP Benefit Contributions and Supplemental ESOP
Benefit Phantom Contributions, as applicable, shall be made or recorded in
accordance with Subsection 2.1(a)(3).
Notwithstanding any other provision hereof, if requested by the Executive
and approved by the Board of Directors, the Executive shall receive a lump
sum Disability Benefit hereunder, in any case in which it is determined by
a duly licensed independent physician selected by the Bank, that the
Executive is no longer able, properly and satisfactorily, to perform his
regular duties as an Executive, because of ill health, accident,
disability or general inability due to age. The lump sum benefit(s) to
which the Executive is entitled shall include: (i) the balance of the
Retirement Income Trust Fund, plus (ii) the balance of the Accrued Benefit
Account (if applicable), both measured as of the later of (a) the date of
the disability determination, or (b) the date of any final Supplemental
ESOP Benefit Contribution (or Supplemental ESOP Benefit Phantom
Contribution) pursuant to Subsection 2.1(a)(3). The benefit(s) shall be
paid within thirty (30) days following the date of the Executive's request
for such benefit. In the event the Executive dies after becoming eligible
for such payment(s) but before the actual payment(s) is (are) made, his
Beneficiary shall be entitled to receive the benefit(s) provided for in
this Subsection 6.1(a) within thirty (30) days of the date the
Administrator receives notice of the Executive's death.
(b) Disability Benefit - Supplemental.
---------------------------------
Furthermore, if (i) the Executive's death occurs prior to attaining
Benefit Age, and (ii) Board of Director approval is obtained upon the
Executive's death, the Bank shall make a direct, lump sum payment to the
Executive's Beneficiary in an amount equal to the following: the sum of
all remaining Supplemental Retirement Income Benefit Contributions (or
Supplemental Retirement
28
DRAFT
Income Benefit Phantom Contributions) set forth in Exhibit A, but not
required pursuant to Subsection 2.1(b)(5) (or 2.1(c)(5)) due to the
disability-related termination. Such lump sum payment, if approved by the
Board of Directors, shall be payable within thirty (30) days of such
Board of Director approval.
6.2 Additional Death Benefit - Burial Expense. Upon the Executive's death,
-----------------------------------------
the Executive's Beneficiary shall also be entitled to receive a one-time
lump sum death benefit in the amount of Ten Thousand Dollars
($10,000.00). This benefit shall be paid directly from the Bank to the
Beneficiary and shall be provided specifically for the purpose of
providing payment for burial and/or funeral expenses of the Executive.
Such death benefit shall be payable within thirty (30) days of the date
the Administrator receives notice of the Executive's death. The
Executive's Beneficiary shall not be entitled to such benefit if the
Executive is terminated for Cause prior to death.
SECTION VII
NON-COMPETITION
---------------
7.1 Non-Competition During Employment.
---------------------------------
In consideration of the agreements of the Bank contained herein and of
the payments to be made by the Bank pursuant hereto, the Executive
hereby agrees that, for as long as he remains employed by the Bank, he
will devote substantially all of his time, skill, diligence and
attention to the business of the Bank, and will not actively engage,
either directly or indirectly, in any business or other activity which
is, or may be deemed to be, in any way competitive with or adverse to
the best interests of the business of the Bank, unless the Executive has
the prior express written consent of the Bank.
7.2 Breach of Non-Competition Clause.
--------------------------------
(a) Continued Employment Following Breach.
-------------------------------------
In the event (i) any breach by the Executive of the agreements and
covenants described in Subsection 7.1 occurs, and (ii) the Executive
continues employment at the Bank following such breach, all further
Supplemental Retirement Income Benefit Contributions and Supplemental
ESOP Benefit Contributions by the Bank to the Retirement Income Trust
Fund (or Supplemental Retirement Income Benefit Phantom Contributions
and Supplemental ESOP Benefit Phantom Contribution recorded in the
Accrued Benefit Account) shall immediately cease, and all benefits
29
DRAFT
under this Agreement, other than those which can be paid from previous
Supplemental Retirement Income Benefit Contributions and Supplemental
ESOP Benefit Contributions to the Retirement Income Trust Fund (and
earnings on such Supplemental Retirement Income Benefit Contributions
and Supplemental ESOP Benefit Contributions), shall be forfeited. The
Executive (or his Beneficiary) shall be entitled to receive a benefit
from the Retirement Income Trust Fund in accordance with Subpart (1) or
(2) below, as applicable.
(1) Executive Lives Until Benefit Age
---------------------------------
If, following such breach, the Executive lives until attaining his
Benefit Age, he shall be entitled to receive a benefit from the
Retirement Income Trust Fund in accordance with this
Subsection 7.2(a)(1). The balance of the Retirement Income Trust Fund,
measured as of the Executive's Benefit Age, shall be paid to the
Executive in a lump sum on his Benefit Eligibility Date. In the event
the Executive dies after attaining his Benefit Age but before actual
payment is made, his Beneficiary shall be entitled to receive the lump
sum benefit in accordance with this Subsection 7.2(a)(1) within thirty
(30) days of the date of the Administrator receives notice of the
Executive's death.
(2) Executive Dies Prior to Benefit Age
-----------------------------------
If, following such breach, the Executive dies prior to attaining his
Benefit Age, his Beneficiary shall be entitled to receive a benefit
from the Retirement Income Trust Fund in accordance with this
Subsection 7.2 (a)(2). The balance of the Retirement Income Trust Fund,
measured as of the date of the Executive's death, shall be paid to the
Executive's Beneficiary in a lump sum within thirty (30) days of the
date the Administrator receives notice of the Executive's death.
(b) Termination of Employment Following Breach.
------------------------------------------
In the event (i) any breach by the Executive of the agreements and
covenants described in Subsection 7.1 occurs, and (ii) the Executive's
employment with the Bank is terminated due to such breach, such
termination shall be deemed to be for Cause and the benefits payable to
the Executive shall be paid in accordance with Subsection 5.3 of this
Agreement.
30
DRAFT
SECTION VIII
BENEFICIARY DESIGNATION
-----------------------
The Executive shall make an initial designation of primary and
secondary Beneficiaries upon execution of this Agreement and shall have
the right to change such designation, at any subsequent time, by
submitting to (i) the Administrator, and (ii) the trustee of the
---
Retirement Income Trust Fund, in substantially the form attached as
Exhibit B to this Agreement, a written designation of primary and
secondary Beneficiaries. Any Beneficiary designation made subsequent to
execution of this Agreement shall become effective only when receipt
thereof is acknowledged in writing by the Administrator.
SECTION IX
EXECUTIVE'S RIGHT TO ASSETS
---------------------------
The rights of the Executive, any Beneficiary, or any other person
claiming through the Executive under this Agreement, shall be solely
those of an unsecured general creditor of the Bank, unless this
Agreement provides otherwise. The Executive, the Beneficiary, or any
other person claiming through the Executive, shall only have the right
to receive from the Bank those payments so specified under this
Agreement. The Executive agrees that he, his Beneficiary, or any other
person claiming through him shall have no rights or interests
whatsoever in any asset of the Bank, including any insurance policies
or contracts which the Bank may possess or obtain to informally fund
this Agreement. Any asset used or acquired by the Bank in connection
with the liabilities it has assumed under this Agreement, unless
expressly provided herein, shall not be deemed to be held under any
trust for the benefit of the Executive or his Beneficiaries, nor shall
any asset be considered security for the performance of the obligations
of the Bank. Any such asset shall be and remain, a general, unpledged,
and unrestricted asset of the Bank.
SECTION 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 Agreement,
unless this Agreement provides otherwise. Except as otherwise provided
for in this Agreement, the Executive, his Beneficiaries or any
successor in interest to him shall be and remain simply a general
unsecured creditor of the Bank in the same
31
DRAFT
manner as any other creditor having a general claim for matured and
unpaid compensation. The Bank reserves the absolute right in its sole
discretion to either purchase assets to meet its obligations undertaken
by this Agreement or to refrain from the same and to determine the
extent, nature, and method of such asset purchases. Should the Bank
decide to purchase assets such as life insurance, mutual funds,
disability policies or annuities, the Bank reserves the absolute right,
in its sole discretion, to terminate such assets at any time, in whole
or in part. At no time shall the Executive be deemed to have any lien,
right, title or interest in or to any specific investment or to any
assets of the Bank. If the Bank elects to invest in a life insurance,
disability or annuity policy upon the life of the Executive, then the
Executive shall assist the Bank by freely submitting to a physical
examination and by supplying such additional information necessary to
obtain such insurance or annuities.
SECTION XI
ACT PROVISIONS
--------------
11.1 Named Fiduciary and Administrator. The Human Resources/Compensation
---------------------------------
Committee of the Board of Directors of the Bank shall be the named
fiduciary and Administrator (the "Administrator") of this Agreement. As
Administrator, the Human Resources/Compensation Committee of the Board
of Directors of the Bank shall be responsible for the management,
control and administration of the Agreement as established herein. The
Administrator may delegate to others certain aspects of the management
and operational responsibilities of the Agreement , including the
employment of advisors and the delegation of ministerial duties to
qualified individuals.
11.2 Claims Procedure and Arbitration. In the event that benefits under this
--------------------------------
Agreement are not paid to the Executive (or to his Beneficiary 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 Administrator within sixty (60) days from the date payments are
refused. The Administrator shall review the written claim and, if the
claim is denied, in whole or in part, it shall provide in writing,
within ninety (90) days of receipt of such claim, its specific reasons
for such denial, reference to the provisions of this Agreement upon
which the denial is based, and any additional material or information
necessary to perfect the claim. Such writing by the Administrator shall
further indicate the additional steps which must be undertaken by
claimants if an additional review of the claim denial is desired.
32
DRAFT
If claimants desire a second review, they shall notify the Board of
Directors of the Bank in writing within sixty (60) days of the first
claim denial. Claimants may review this Agreement or any documents
relating thereto and submit any issues and comments, in writing, they
may feel appropriate. In its sole discretion, the Board of Directors
shall then review the second claim and provide a written decision
within sixty (60) days of receipt of such claim. This decision shall
state the specific reasons for the decision and shall include reference
to specific provisions of this Agreement upon which the decision is
based.
If claimants continue to dispute the benefit denial based upon an
assertion of completed performance of this Agreement or the meaning and
effect of the terms and conditions thereof, then claimants may submit
the dispute to a Board of Arbitration for final arbitration. Said Board
of Arbitration shall consist of one member selected by the claimant,
one member selected by the Bank, and the third member selected by the
first two members. The Board of Arbitration shall operate under any
generally recognized set of arbitration rules. The parties hereto agree
that they, their heirs, personal representatives, successors and
assigns shall be bound by the decision of such Board of Arbitration
with respect to any controversy properly submitted to it for
determination.
SECTION XII
MISCELLANEOUS
-------------
12.1 No Effect on Employment Rights. Nothing contained herein will confer
------------------------------
upon the Executive the right to be retained in the service of the Bank
nor limit the right of the Bank to discharge or otherwise deal with
the Executive without regard to the existence of the Agreement.
Pursuant to 12 C.F.R. (S) 563.39(b), the following conditions shall
apply to this Agreement:
(1) The Bank's Board of Directors may terminate the Executive at
any time, but any termination by the Bank's Board of Directors
other than termination for Cause shall not prejudice the
Executive's vested right to compensation or other benefits
under the contract. As provided in Subsection 5.3, the
Executive shall have no right to receive additional
compensation or other benefits, other than those provided for
in Subsection 5.3, after termination for Cause.
33
DRAFT
(2) If the Executive is suspended and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a
notice served under Section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)) the
Bank's obligations under the contract shall be suspended
(except vested rights) as of the date of termination of service
unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Bank may in its discretion (i) pay
the Executive all or part of the compensation withheld while
its contract obligations were suspended and (ii) reinstate (in
whole or in part) any of its obligations which were suspended.
(3) If the Executive is terminated and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an
order issued under Section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(e)(4) or (g)(1)), all
non-vested obligations of the Bank under the contract shall
terminate as of the effective date of the order.
(4) If the Bank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), all non-vested obligations
under the contract shall terminate as of the date of default.
(5) All non-vested obligations under the contract shall be
terminated, except to the extent determined that continuation
of the contract is necessary for the continued operation of the
Bank:
(i) by the Director [of the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation] or his
designee at the time the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation enters
into an agreement to provide assistance to or on behalf
of the Bank under the authority contained in (S) 13(c) of
the Federal Deposit Insurance Act; or
34
DRAFT
(ii) by the Director [of the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation] or his
designee, at the time the Director or his designee
approves a supervisory merger to resolve problems related
to operation of the Bank or when the Bank is determined
by the Director to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, (i.e., the balance
of the Executive's Retirement Income Trust Fund and the balance of the
Executive's Accrued Benefit Account, if applicable), however, shall
not be affected by such action.
12.2 State Law. The Agreement is established under, and will be construed
---------
according to, the laws of the state of New Jersey, to the extent such
laws are not preempted by the Act and valid regulations published
thereunder.
12.3 Severability. In the event that any of the provisions of this
------------
Agreement or portion thereof, are held to be inoperative or invalid by
any court of competent jurisdiction, then: (1) insofar as is
reasonable, effect will be given to the intent manifested in the
provisions held invalid or inoperative, and (2) the validity and
enforceability of the remaining provisions will not be affected
thereby.
12.4 Incapacity of Recipient. In the event the Executive is declared
-----------------------
incompetent and a conservator or other person legally charged with the
care of his person or Estate is appointed, any benefits under the
Agreement to which such Executive is entitled shall be paid to such
conservator or other person legally charged with the care of his
person or Estate.
12.5 Unclaimed Benefit. The Executive shall keep the Bank informed of his
-----------------
current address and the current address of his Beneficiaries. The Bank
shall not be obligated to search for the whereabouts of any person. If
the location of the Executive is not made known to the Bank as of the
date upon which any payment of any Supplemental Retirement Income
Benefit(s) may first be made, the Bank shall delay payment of the
Executive's benefit payment(s) until the location of the Executive is
made known to the Bank; however, the Bank shall only be obligated to
hold such benefit payment(s) for the Executive until the expiration of
thirty-six (36) months. Upon expiration of the thirty-six (36) month
period, the Bank may discharge its obligation by payment to the
Executive's Beneficiary. If the location of the Executive's
Beneficiary is not made known to the Bank by the end of an additional
two (2) month period following expiration of the thirty-six (36) month
period, the Bank may discharge its obligation by payment to the
35
DRAFT
Executive's Estate. If there is no Estate in existence at such time or
if such fact cannot be determined by the Bank, the Executive and his
Beneficiary(ies) shall thereupon forfeit any rights to any and all
Supplemental Retirement Income Benefit(s) provided for such Executive
and/or Beneficiary under this Agreement.
12.6 Limitations on Liability. Notwithstanding any of the preceding
------------------------
provisions of the Agreement, no individual acting as an employee or
agent of the Bank, or as a member of the Board of Directors shall be
personally liable to the Executive or any other person for any claim,
loss, liability or expense incurred in connection with the Agreement.
12.7 Gender. Whenever in this Agreement 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.
12.8 Effect on Other Corporate Benefit Agreements. Nothing contained in
--------------------------------------------
this Agreement 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 agreement constituting a part of the Bank's existing or future
compensation structure.
12.9 Suicide. Notwithstanding anything to the contrary in this Agreement,
-------
if the Executive's death results from suicide, whether sane or insane,
within twenty-four (24) months after execution of this Agreement, all
further Supplemental Retirement Income Benefit Contributions to the
Retirement Income Trust Fund (or Supplemental Retirement Income
Benefit Phantom Contributions recorded in the Accrued Benefit Account)
shall thereupon cease, and no Supplemental Retirement Income Benefit
Contribution (or Supplemental Retirement Income Benefit Phantom
Contribution) shall be made by the Bank to the Retirement Income Trust
Fund (or recorded in the Accrued Benefit Account) in the year such
death resulting from suicide occurs. All benefits other than those
available from previous Supplemental Retirement Income Benefit
Contributions and Supplemental ESOP Benefit Contributions to the
Retirement Income Trust Fund under this Agreement shall be forfeited,
and this Agreement shall become null and
36
DRAFT
void. The balance of the Retirement Income Trust Fund, measured as of
the Executive's date of death, shall be paid to the Beneficiary within
thirty (30) days of the date the Administrator receives notice of the
Executive's death.
12.10 Inurement. This Agreement shall be binding upon and shall inure to the
---------
benefit of the Bank, its successors and assigns, and the Executive,
his successors, heirs, executors, administrators, and Beneficiaries.
12.11 Headings. Headings and sub-headings in this Agreement are inserted for
--------
reference and convenience only and shall not be deemed a part of this
Agreement.
SECTION XIII
AMENDMENT/PLAN TERMINATION
--------------------------
13.1 Amendment or Plan Termination. The Bank intends this Agreement to be
-----------------------------
permanent, but reserves the right to amend or terminate the
Agreement when, in the sole opinion of the Bank, such amendment or
termination is advisable. However, any termination of the Agreement
which is done in anticipation of or pursuant to a "Change in
Control", as defined in Subsection 5.2, shall be deemed to trigger
Subsections 5.1 and 2.1(b)(3) (or 2.1(c)(3), as applicable) of the
Agreement, and benefit(s) shall be paid from the Retirement Income
Trust Fund (and Accrued Benefit Account, if applicable) in
accordance with such Subsections. Any amendment or termination of
the Agreement shall be made pursuant to a resolution of the Board of
Directors of the Bank and shall be effective as of the date of such
resolution. No amendment or termination of the Agreement shall
directly or indirectly deprive the Executive of all or any portion
of the Executive's Retirement Income Trust Fund (and Accrued Benefit
Account, if applicable) as of the effective date of the resolution
amending or terminating the Agreement.
13.2 Executive's Right to Payment Following Plan Termination. In the
-------------------------------------------------------
event of a termination of the Agreement, the Executive shall be
entitled to the balance, if any, of his Retirement Income Trust Fund
(and Accrued Benefit Account, if applicable), measured as of the
date of plan termination. However, if such termination is done in
anticipation of or pursuant to a "Change in Control", as defined in
Subsection 5.2, such balance(s) shall be measured as of the date the
final Supplemental Retirement Income Benefit Contribution and/or
Supplemental ESOP Benefit Contribution (or
37
DRAFT
Supplemental Retirement Income Benefit Phantom Contribution and/or
Supplemental ESOP Benefit Phantom Contribution) is made (or
recorded) pursuant to Subsection 2.1(b)(3) (or 2.1(c)(3)). Payment
of the balance(s) of the Executive's Retirement Income Trust Fund
(and Accrued Benefit Account, if applicable) shall not be dependent
upon his continuation of employment with the Bank following the
termination date of the Agreement. Payment of the balance(s) of the
Executive's Retirement Income Trust Fund (and Accrued Benefit
Account, if applicable) shall be made in a lump sum within thirty
(30) days of the date of termination of the Agreement.
38
DRAFT
SECTION XIV
EXECUTION
---------
14.1 This Agreement and the Michael J. Fitzpatrick Grantor Trust
agreement set forth the entire understanding of the parties hereto
with respect to the transactions contemplated hereby, and any
previous agreements or understandings between the parties hereto
regarding the subject matter hereof are merged into and superseded
by this Agreement and the Michael J. Fitzpatrick Grantor Trust
agreement.
14.2 The Executive hereby acknowledges and understands, as evidenced by the
fact that he has read and signed Exhibit D of this Agreement, that his
status as an employee-at-will of the Bank is not affected in any way
by execution of this Agreement.
14.3 This Agreement shall be executed in triplicate, each copy of which,
when so executed and delivered, shall be an original, but all three
copies shall together constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
39
DRAFT
IN WITNESS WHEREOF, the Bank and the Executive have caused this Agreement
to be executed on this ____ day of ____________, 19__.
OCEAN FEDERAL SAVINGS BANK:
By:
---------------------------
---------------------------
(Title)
MICHAEL J. FITZPATRICK
------------------------------
Executive
40
DRAFT
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
SCHEDULE OF CONTRIBUTIONS AND PHANTOM CONTRIBUTIONS
Amount
------
Establishment Contribution $ 10,459
Plan Year 1996 $ 12,427
Plan Year 1997 $ 13,921
Plan Year 1998 $ 15,551
Plan Year 1999 $ 17,329
Plan Year 2000 $ 19,267
Plan Year 2001 $ 21,379
Plan Year 2002 $ 23,678
Plan Year 2003 $ 26,179
Plan Year 2004 $ 28,899
Plan Year 2005 $ 31,854
Plan Year 2006 $ 35,064
Plan Year 2007 $ 38,549
Plan Year 2008 $ 42,330
Plan Year 2009 $ 46,431
Plan Year 2010 $ 50,877
Plan Year 2011 $ 55,695
Plan Year 2012 $ 60,914
Plan Year 2013 $ 66,564
Plan Year 2014 $ 72,680
Plan Year 2015 $ 79,297
Plan Year 2016 $ 86,453
Plan Year 2017 $ 94,191
Plan Year 2018 $102,555
Plan Year 2019 $111,591
Exhibit A
DRAFT
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
BENEFICIARY DESIGNATION
The Executive, under the terms of the Executive Supplemental Retirement
Income Agreement executed by the Bank, of Brick New Jersey, dated the
________________ day of ______________________________,1996, hereby designates
the following Beneficiary(ies) to receive any guaranteed payments or death
benefits under such Agreement, following his death:
PRIMARY BENEFICIARY: ______________________________________
SECONDARY BENEFICIARY: ______________________________________
This Beneficiary Designation hereby revokes any prior Beneficiary
Designation which may have been in effect.
Such Beneficiary Designation is revocable.
DATE: ______________________, 19____
__________________________________
EXECUTIVE
__________________________________
(WITNESS)
___________________________________
(WITNESS)
Exhibit B
DRAFT
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
NOTICE OF ELECTION TO CHANGE FORM OF PAYMENT
TO: Bank
Attention:
I hereby give notice of my election to change the form of payment of my
Supplemental Retirement Income Benefit, as specified below. I understand that
such notice, in order to be effective, must be submitted in accordance with the
time requirements described in Subsection 1.27 of my Executive Supplemental
Retirement Income Agreement.
[_] I hereby elect to change the form of payment of my benefits from
monthly installments throughout my Payout Period to a lump sum
benefit payment.
[_] I hereby elect to change the form of payment of my benefits from a
lump sum benefit payment to monthly installments throughout my Payout
Period. Such election hereby revokes my previous notice of election
to receive a lump sum form of benefit payments.
___________________________________
Executive
___________________________________
Date
Acknowledged
By:________________________________
Title:_____________________________
___________________________________
Date
Exhibit C
DRAFT
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
ACKNOWLEDGMENT OF EMPLOYEE-AT-WILL STATUS
I, ___________________________, hereby acknowledge that I have read and
understood the following as it relates to my status as an employee-at-will at
Ocean Federal Savings Bank of New Jersey.
Employment At Will
------------------
Nothing contained in this Agreement is to be considered as an implied or
explicit guarantee of my employment at Ocean Federal Savings Bank. The
employment relationship between Ocean Federal Savings Bank and its employees is
(1) terminable at the will of either party, (2) terminable with or without
Cause, and (3) terminable without prior notice. Ocean Federal Savings Bank
retains all of its rights and privileges to hire, transfer, terminate, and
otherwise manage people as it thinks is in the best interest of all.
_______________________________________
Executive
_______________________________________
Date
Exhibit D
DRAFT
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
DESCRIPTION OF BENEFIT COMPUTATION AND
UNDERLYING ASSUMPTIONS
The benefit amount included in Subsection 1.24 is computed based on the
following:
. Projected High Four (4) Compensation, multiplied by
. Projected Wage Replacement Percentage, less
A hypothetical pension benefit of:
. One Percent (1%), multiplied by
. Projected Years of Service, multiplied by
. Projected High Four (4) Compensation
A hypothetical employer-paid (matching) 401(k) benefit of:
. Seventy-Five Percent (75%), multiplied by
. Six Percent (6%), multiplied by
. annual Compensation (for every year employed subsequent to 1988) (Annual
hypothetical employer-paid (matching) contributions to the 401(k) plan
shall be deemed to grow at Seven (7%) per annum, compounded monthly
through Benefit Age)
The hypothetical pension benefit and hypothetical employer-paid
(matching) 401(k) benefit shall be computed assuming all applicable
statutory limitations apply, including but not limited to, those imposed
pursuant Section 415 and Section 401(a)(17) of the Code.
TERMS USED IN COMPUTATION ABOVE:
"Compensation" means regular salary compensation received by the Executive
from the Bank during any calendar year, including bonuses and amounts
deferred through non-qualified or qualified plans and excluding fringe
benefits.
"Projected High Four (4) Compensation" means Four Hundred Forty Six
Thousand Three Hundred Ninety Two Dollars ($446,392.00) and represents the
average of the highest Compensation projected to be received by the
Executive during any four (4) consecutive calendar years while such
Executive is employed by the Bank.
"Projected Wage Replacement Percentage" means the percentage of Projected
High Four (4) Compensation which shall be used to compute the Executive's
Supplemental Retirement Income Benefit. The Wage Replacement Percentage
shall be Fifty Six Percent (56%). Such percentage represents the lesser of:
(i) Two Percent (2%), multiplied by the Projected Years of Service earned
by the Executive as of the date of his Benefit Age, or (ii) Seventy Percent
(70%).
"Projected Years of Service" means the number of twelve (12) month periods
of continuous service (including authorized leaves of absence) projected to
be earned by the Executive at any time after commencement of employment
with the Bank.
Exhibit E