AMENDED AND
RESTATED
SECOND EXECUTIVE SUPPLEMENTAL
RETIREMENT
INCOME AGREEMENT
FOR THOMAS
SCHNEIDER
PATHFINDER BANK
Amended and Restated Effective
January 1, 2005
Financial Institution Consulting
Corporation
700 Colonial Road, Suite
260
Memphis, Tennessee
38117
WATS:
1-800-873-0089
FAX: (901)
684-7411
(901) 684-7400
AMENDED AND RESTATED SECOND
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT FOR THOMAS
SCHNEIDER
This Amended and Restated Executive Supplemental
Retirement Income Agreement (the “Agreement”) updates
and revises the Restated Executive Supplemental Retirement Income
Agreement (the “Original Agreement”) for Thomas
Schneider (the “Executive”), which was originally
effective as of September 1, 1998. The Bank has herein
amended and restated the Agreement with the intention that the
Agreement shall at all times satisfy Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the
regulations thereunder. Any reference herein to the
“Holding Company” shall mean Pathfinder Bancorp, Inc.
and any reference herein to the “Mutual Holding
Company” shall mean Pathfinder Bancorp, M.H.C.
WITNESSETH:
WHEREAS , the Executive is employed by the Bank;
and
WHEREAS , the Bank and Executive entered into the Second
Executive Supplemental Retirement Income Agreement for Thomas
Schneider (the “Original Agreement”) on the 1
st day of September, 1998; and
WHEREAS , Section 409A of the Internal Revenue Code (the
“Code”), effective January 1, 2005, requires deferred
compensation arrangements, including those set forth in deferred
compensation arrangements, to comply with its provisions
and restrictions and limitations on payments of deferred
compensation; and
WHEREAS , Code Section 409A and the final regulations
issued thereunder in April of 2007 necessitate changes to the
Original Agreement; and
WHEREAS , the Bank believes it is in the best interests
of the Bank to amend and restate the Original Agreement in order to
reinforce and reward Executive for his service and dedication to
the continued success of the Bank and incorporate the changes
required by the new tax laws; and
WHEREAS , the parties hereto desire to set forth the
terms of the amended and restated Agreement and the continuing
employment relationship of the Bank and Executive.
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
When used herein, the following words and
phrases shall have the meanings below unless the context clearly
indicates otherwise:
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“Accrued
Benefit Account” shall be represented by the bookkeeping
entries required to record the Executive’s (i) 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 any Beneficiary.
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“Act” means the Employee Retirement
Income Security Act of 1974, as amended from time to
time.
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“Administrator” means the
Bank.
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“Bank” means PATHFINDER BANK and any
successor thereto.
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“Beneficiary” means the person or
persons (and their heirs) designated as Beneficiary in Exhibit B of
this Agreement to whom the deceased Executive’s benefits are
payable. If no Beneficiary is so designated, then the
Executive’s Spouse, if living, will be deemed the
Beneficiary. If the Executive’s Spouse is not living, than
the Children of the Executive will be deemed the Beneficiaries and
will take on a per stirpes basis. If there are no Children, then
the Estate of the Executive will be deemed the
Beneficiary.
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“Benefit
Age” means the Executive’s sixty-second (62nd)
birthday. Notwithstanding the above, the Executive may, in his sole
discretion, elect to Separate from Service on or after the
Executive’s sixty-second (62nd) birthday and, in such event,
the Executive’s age on such date shall constitute his
“Benefit Age”; provided, however, that in the event of
a Change in Control, followed within thirty-six (36) months by the
Executive’s voluntary Separation from Service on or after his
sixty-second birthday for one of the reasons set forth in Section
2.1(b)(2)(ii) below, the Executive’s termination shall not be
considered a retirement for purposes of lowering the
Executive’s Benefit Age.
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“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.
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“Board of
Directors” means the board of directors of the
Bank.
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“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, role, regulation (other than
traffic violations or similar offenses), or final cease-and-desist
order, material breach of any provision of this Agreement, or gross
negligence in matters of material importance to the
Bank.
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“Change
in Control” shall mean and include the following with respect
to the Mutual Holding Company, the Bank, or the Holding
Company:
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a
reorganization, merger, merger conversion, consolidation or sale of
all or substantially all of the assets of the Bank, the Mutual
Holding Company or the Holding Company, or a similar transaction in
which the Bank, the Mutual Holding Company or the Holding Company
is not the resulting entity; or
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individuals who
constitute the board of directors of the Bank, the Mutual Holding
Company or the Holding Company 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 was approved
by the Holding Company’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.
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Notwithstanding the foregoing, a “Change
in Control” of the Bank or the Holding Company shall not be
deemed to have occurred if the Mutual Holding Company ceases to own
at least 51% of all outstanding shares of stock of the Holding
Company in connection with a liquidation of the Mutual Holding
Company into the Holding Company or a conversion of the Mutual
Holding Company from mutual to stock form.
In addition, “Change in Control”
shall mean and include the following with respect to the Bank or
the Holding Company in the event that the Mutual Holding Company
converts to stock form or in the event that the Holding Company
issues shares of its common stock to stockholders other than the
Mutual Holding Company:
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a change in
control of a nature that would be required to be reported in
response to Item 5.01 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 (hereinafter the “Exchange
Act”); or
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an acquisition
of “control” as defined in the Home Owners Loan Act, as
amended, and applicable rules and regulations promulgated
thereunder, as in effect at the time of the Change in Control
(collectively, the “HOLA”), as determined by the Board
of Directors of the Bank or the Holding Company; or
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any
“person” (as the term is used in Sections 13(d) and
14(d) of the Exchange Act) or “group acting in concert”
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%) or more of
the combined voting power of the Bank’s or Holding
Company’s outstanding securities ordinarily having the right
to vote at the elections of directors, except for any stock
purchased by the Bank’s Employee Stock Ownership Plan and/or
the trust under such plan; or
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a proxy
statement is issued soliciting proxies from the stockholders of the
Holding Company by someone other than the current management of the
Holding Company, seeking stockholder approval of a plan of
reorganization, merger, or consolidation of the Holding Company
with one or more corporations as a result of which the outstanding
shares of the class of the Holding Company’s securities are
exchanged for or converted into cash or property or securities not
issued by the Holding Company.
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The term “person” includes an
individual, a group acting in concert, a corporation, a
partnership, an association, a joint venture, a pool, a joint stock
company, a trust, an unincorporated organization or similar
company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities. The term
“acquire” means obtaining ownership, control, power to
vote or sole power of disposition of stock, directly or indirectly
or through one or more transactions or subsidiaries, through
purchase, assignment, transfer, exchange, succession or other
means, including (1) an increase in percentage ownership resulting
from a redemption, repurchase, reverse stock split or a similar
transaction involving other securities of the same class; and (2)
the acquisition of stock by a group of persons and/or companies
acting in concert which shall be deemed to occur upon the formation
of such group, provided that an investment advisor shall not be
deemed to acquire the voting stock of its advisee if the advisor
(a) votes the stock only upon instruction from the beneficial owner
and (b) does not provide the beneficial owner with advice
concerning the voting of such stock. The term
“security” includes nontransferable subscription rights
issued pursuant to a plan of conversion, as well as a
“security,” as defined in 15 U.S.C. §78c(2)(1);
and the term “acting in concert” means (1) knowing
participation in a joint activity or interdependent conscious
parallel action towards a common goal whether or not pursuant to an
express agreement, or (2) a combination or pooling of voting or
other interests in the securities of an issuer for a common purpose
pursuant to any contract, understanding, relationship, agreement or
other arrangement, whether written or otherwise. Further, acting in
concert with any person or company shall also be deemed to be
acting in concert with any person or company that is acting in
concert with such other person or company.
Notwithstanding the above definitions, the
boards of directors of the Bank or the Holding Company, in their
absolute discretion, may make a finding that a Change in Control of
the Bank or the Holding Company has taken place without the
occurrence of any or all of the events enumerated above.
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“Children” means the
Executive’s children, both natural and adopted, then living
at the time payments are due the Children under this
Agreement.
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“Code” means the Internal Revenue
Code of 1986, as amended from time to time.
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“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) and in the amounts set forth in Exhibit A of the
Agreement.
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“Disability Benefit” means the
benefit payable to the Executive following a determination, in
accordance with Section 6, that he is no longer able, properly and
satisfactorily, to perform his duties at the Bank.
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“Effective Date” of this restated
Agreement shall be January 1, 2005.
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“Estate” means the estate of the
Executive.
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“Interest
Factor” means monthly compounding, discounting or
annuitizing, as applicable, at a rate set forth in Exhibit
A.
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“Payout
Period” means the time frame during which certain benefits
payable hereunder shall be distributed. Payments shall be made in
equal monthly installments commencing on the first day of the month
following the occurrence of the event which triggers distribution
and continuing for one-hundred and 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.
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“Phantom
Contributions” 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 provided for in Subsection 2.2, the
Bank shall be required to record the annual amounts set forth in
Exhibit A of the Agreement in the Executive’s Accrued Benefit
Account, pursuant to Subsection 2.1.
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“Plan
Year” shall mean the calendar year.
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“Retirement Age” means the
Executive’s sixty-second (62nd) birthday provided, however,
that the Executive’s actual Separation from Service from
full-time employment may occur on or after the Executive attains
age sixty-two (62) or at any later date mutually agreed upon by the
parties.
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“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 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
Thomas Schneider Grantor Trust agreement.
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“Separation from Service” means
Executive’s retirement or other termination of employment
with the Bank within the meaning of Code Section
409A. No Separation from Service shall be deemed to
occur due to military leave, sick leave or other bona fide leave of
absence if the period of such leave does not exceed six months or,
if longer, so long as Executive’s right to reemployment is
provided by law or contract. If the leave exceeds six
months and Executive’s right to reemployment is not provided
by law or by contract, then Executive shall have a Separation from
Service on the first date immediately following such six-month
period.
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Whether a
Separation from Service has occurred is determined based on whether
thefacts and circumstances indicate that the Bank and the Executive
reasonablyanticipated reasonably anticipate that the level of bona
fide services the Executive would perform after termination would
permanently decrease to a level that is less than 50% of the
average level of bona fide services performed (whether as an
employee or an independent contractor) over the immediately
preceding 36-month period.
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“Spouse” means the individual
to whom the Executive is legally married at the time of the
Executive’s death.
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“Supplemental Retirement Income
Benefit” means an annual amount (before taking into account
federal and state income taxes), payable in monthly installments
throughout the Payout Period. Such benefit is projected pursuant to
the Agreement for the purpose of determining the Contributions to
be made to the Retirement Income Trust Fund (or Phantom
Contributions to be recorded in the Accrued Benefit Account). The
annual Contributions and Phantom Contributions have been
actuarially determined, using the assumptions set forth in Exhibit
A, in order to fund for the projected Supplemental Retirement
Income Benefit. The Supplemental Retirement Income Benefit for
which Contributions (or Phantom Contributions) are being made (or
recorded) is set forth in Exhibit A.
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“Timely
Election” means the Executive has made an election to change
the form of his benefit payment(s) on or before December 31, 2008
by filing with the Administrator a Notice of Election to Change
Form of Payment (Exhibit C of this Agreement). In the case of
benefits payable from the Accrued Benefit Account, a Timely
Election shall be made by filing with the Bank a Transition Year
Election Form (Exhibit D of this Agreement), provided that such
election is made on or before December 31, 2008. In the
case of benefits payable from the Retirement Income Trust Fund,
such election may be made at any time.
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SECTION II
BENEFITS-GENERALLY
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(a)
Retirement Income Trust Fund and Accrued Benefit Account
. The Executive shall establish the Thomas Schneider
Grantor Trust into which the Bank shall be required to make annual
Contributions on the Executive’s behalf, pursuant to Exhibit
A and this Section II of the Agreement. A trustee shall be selected
by the Executive. 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 be charged with the responsibility of investing
all contributed funds. Distributions from the Retirement Income
Trust Fund of the Thomas Schneider Grantor Trust may be made by the
trustee to the Executive, for purposes of payment of any income or
employment taxes due and owing on Contributions by the Bank to the
Retirement Income Trust Fund, if any, 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 Contributions to the Retirement Income Trust Fund shall cease
and the Bank’s obligation to record Phantom Contributions in
the Accrued Benefit Account shall immediately continence pursuant
to Exhibit A and this Section II of the Agreement. To
the extent this Agreement is inconsistent with the Thomas Schneider
Grantor Trust Agreement, the Thomas Schneider Grantor Trust
Agreement shall supersede this Agreement.
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The annual
Contributions (or Phantom Contributions) required to be made by the
Bank to the Retirement Income Trust Fund (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. Contributions shall be made by
the Bank to the Retirement Income Trust Fund (i) within
seventy-five (75) days of establishment of such trust, and (ii)
within the first thirty (30) days of the beginning of each
subsequent Plan Year, unless this Section expressly provides
otherwise. Phantom Contributions, if any, shall be recorded in the
Accrued Benefit Account within the first thirty (30) days of the
beginning of each applicable Plan Year, unless this Section
expressly provides otherwise. 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 Phantom Contribution shall not
commence until such Payout Period commences.
The
Administrator shall review the schedule of annual Contributions (or
Phantom Contributions) provided for in Exhibit A (i) within thirty
(30) days prior to the close of each Plan Year and (ii) if the
Executive is employed by the Bank until attaining Retirement Age,
on or immediately before attainment of such Retirement Age. Such
review shall consist of an evaluation of the accuracy of all
assumptions used to establish the schedule of Contributions (or
Phantom Contributions). Provided that (i) the Executive
has not exercised his withdrawal rights pursuant to Subsection 2.2
and (ii) the investments contained in the Retirement Income Trust
Fund have been deemed reasonable by the Bank, the Administrator
shall prospectively amend or supplement the schedule of
Contributions provided for in Exhibit A should the Administrator
determine during any such review that an increase in or supplement
to the schedule of Contributions is necessary in order to
adequately fund the Retirement Income Trust Fund so as to provide
an annual benefit (or to provide the lump sum equivalent of such
benefit, as applicable) equal to the Supplemental Retirement Income
Benefit, on an after-tax basis, commencing at Benefit Age and
payable for the duration of the Payout Period.
(b)
Withdrawal Rights Not Exercised .
(1)
Contributions Made Annually
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 2.1(b)
specifically states otherwise, until the earlier of (i) the last
Plan Year that Contributions are required pursuant to Exhibit A, or
(ii) the Plan Year of the Executive’s termination of
employment.
(2)
Termination Following a Change in Control
If the
Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2 and a Change in Control occurs at the Bank, followed
within thirty-six (36) months by either (i) the Executive’s
involuntary termination of employment, or (ii) Executive’s
voluntary termination of employment after: (A) a material change in
the Executive’s function, duties, or responsibilities, which
change would cause the Executive’s position to become one of
lesser responsibility, importance, or scope from the position the
Executive held at the time of the Change in Control, (B) a
relocation of the Executive’s principal place of employment
by more than thirty (30) miles from its location prior to the
Change in Control, or (C) a material reduction in the benefits and
perquisites to the Executive from those being provided-at the time
of the Change in Control, the Contribution set forth on Schedule A
shall continue to be required of the Bank. The Bank shall be
required to make an immediate lump sum contribution to the
Retirement Income Trust Fund equal to (i) the full Contribution
required for the Plan Year in which such termination occurs, if not
yet made, plus (ii) the present value (computed using a discount
rate equal to the Interest Factor) of all remaining Contributions
to the Retirement Income Trust Fund; provided, however, in no event
shall the Contribution be less than an amount which is sufficient
to provide the Executive with after-tax benefits (assuming a
constant tax rate equal to the rate in effect as of the date of
Executive’s termination) beginning at his Benefit Age, equal
in amount to that benefit which would have been payable to the
Executive if no secular trust had been implemented and the benefit
obligation had been accrued under APB Opinion No. 12, as amended by
FAS 106.
(3)
Termination For Cause
If the
Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and is terminated for Cause pursuant to Subsection
5.2, no further Contribution(s) to the Retirement Income Trust Fund
shall be required of the Bank, and if not yet made, no Contribution
shall be required for the Plan Year in which such termination for
Cause occurs.
(4)
Involuntary Termination of Employment
If the
Executive does not exercise his withdrawal rights pursuant to
Subsection 2.2, and the Executive’s employment with the Bank
is involuntarily terminated for any reason, including a termination
due. to disability of the Executive but excluding termination for
Cause, or termination following a Change in Control within
twenty-four (24) months of such Change in Control, within thirty
(30) days of such involuntary termination of employment, the Bank
shall be required to make an immediate lump sum Contribution to the
Executive’s Retirement Income Trust Fund in an amount equal
to the: (i) the full Contribution required for the Plan Year in
which such involuntary termination occurs, if not yet made, plus
(ii) the present value (computed using a discount rate equal to the
Interest Factor) of all remaining Contributions to the Retirement
Income Trust Fund; provided however, that, if necessary, an amount
shall be contributed to the Retirement Income Trust Fund which is
sufficient to provide the Executive with after tax benefits
(assuming a constant tax rate equal to the rate in effect as of the
date of the Executive’s termination) beginning at his Benefit
Age, equal in amount to that benefit which would have been payable
to the Executive if no secular trust had been implemented and the
benefit obligation had been accrued under APB Opinion No. 12, as
amended by FAS 106.
(5)
Death During Employment
If the
Executive does not exercise any withdrawal rights pursuant to
Subsection 2.2, and dies while employed by the Bank, and if,
following the Executive’s death, the assets of the Retirement
Income Trust Fund are insufficient to provide the Supplemental
Retirement Income Benefit to which the Executive is entitled, the
Bank shall be required to make a Contribution to the Retirement
Income Trust Fund equal to the sum of the remaining Contributions
set forth on Exhibit A, after taking into consideration any
payments under any life insurance policies that may have been
obtained on the Executive’s life by the Retirement Income
Trust Fund. Such final contribution shall be payable in a lump sum
to the Retirement Income Trust Fund within thirty (30) days of the
Executive’s death.
(c)
Withdrawal Rights Exercised .
(1)
Phantom Contributions Made Annually
If the
Executive exercises his withdrawal rights pursuant to Subsection
2.2, no further Contributions to the Retirement Income Trust Fund
shall be required of the Bank. Thereafter, Phantom Contributions
shall be recorded annually in the Executives Accrued Benefit
Account within thirty (30) days of the beginning of each Plan Year,
commencing with the first Plan Year following the Plan Year in
which the Executive exercises his withdrawal rights. Such Phantom
Contributions shall continue to be recorded annually, unless this
Subsection 2.1(c) specifically states otherwise, until the earlier
of (i) the last Plan Year that Phantom Contributions are required
pursuant to Exhibit A, or (ii) the Plan Year of the
Executive’s termination of employment.
(2)
Termination Following a Change in Control
If the
Executive exercises his withdrawal rights pursuant to Subsection
2.2, Phantom Contributions shall commence in the Plan Year
following the Plan Year in which the Executive first exercises his
withdrawal rights. If a Change in Control occurs at the Bank, and
within thirty-six (36) months of such Change in Control, the
Executive’s employment is either (i) involuntarily
terminated, or (ii) voluntarily terminated by the Executive after:
(A) a material change in the Executive’s function, duties, or
responsibilities, which change would cause the Executive’s
position to become one of lesser responsibility, importance, or
scope from the position the Executive held at the time of the
Change in Control, (B) a relocation of the Executive’s
principal place of employment by more than thirty (30) miles from
its location prior to the Change in Control, or (C) a material
reduction in the benefits and perquisites to the Executive from
those being provided at the time of the Change in Control, the
Phantom Contribution set forth below shall be required of the Bank.
The Bank shall be required to record a lump sum Phantom
Contribution in the Accrued Benefit Account within ten (10) days of
the Executive’s termination of employment. The amount of such
final Phantom Contribution shall be actuarially determined based on
the Phantom Contribution required, at such time, in order to
provide a benefit via this Agreement equivalent to the Supplemental
Retirement Income Benefit, on an after-tax basis, commencing on the
Executive’s Benefit Eligibility Date and continuing for the
duration of the Payout Period. (Such actuarial determination shall
reflect the fact that amounts shall be payable from both the
Accrued Benefit Account as well as the Retirement Income Trust Fund
and shall also reflect the amount and timing of any withdrawal(s)
made by the Executive from the Retirement Income Trust Fund
pursuant to Subsection 2.2.)
(3)
Termination For Cause
If the
Executive is terminated for Cause pursuant to Subsection 5.2, the
entire balance of the Executive’s Accrued Benefit Account at
the time of such termination, which shall include any Phantom
Contributions which have been recorded plus interest accrued on
such Phantom Contributions, shall be forfeited.
(4)
Involuntary Termination of Employment
If the
Executive exercises his withdrawal rights pursuant to Subsection
2.2, and the Executive’s employment with the Bank is
involuntarily terminated for any reason including termination due
to disability of the Executive, but excluding termination for
Cause, or termination following a Change in Control, within thirty
(30) days of such involuntary termination of employment, the Bank
shall be required to record a final Phantom Contribution in an
amount equal to: (i) the full Phantom Contribution required for the
Plan Year in which such involuntary termination occurs, if not yet
made, plus (ii) the present value (computed using a discount rate
equal to the Interest Factor) of all remaining Phantom
Contributions.
(5)
Death During Employment
If the
Executive exercises his withdrawal rights pursuant to Subsection
2.2, and dies while employed by the Bank, Phantom Contributions
included on Exhibit A shall be required of the Bank. Such Phantom
Contributions shall commence in the Plan Year following the Plan
Year in which the Executive exercises his withdrawal rights and
shall continue through the Plan Year in which the Executive dies.
The Bank shall also be required to record a final Phantom
Contribution within thirty (30) days of the Executive’s
death. The amount of such final Phantom Contribution shall be
actuarially determined based on the Phantom Contribution required
at such time (if any), in order to provide a benefit via this
Agreement equivalent to the Supplemental Retirement Income Benefit
commencing within thirty (30) days of the date the Administrator
receives notice of the Executive’s death and continuing for
the duration of the Payout Period. (Such actuarial determination
shall reflect the fact that amounts shall be payable from the
Accrued Benefit Account as well as the Retirement Income Trust Fund
and shall also reflect the amount and timing of any withdrawal(s)
made by the Executive pursuant to Subsection 2.2).
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Withdrawals
From Retirement Income Trust Fund .
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Exercise of
withdrawal rights by the Executive pursuant to the Thomas Schneider
Grantor Trust agreement shall terminate the Bank’s obligation
to make any further Contributions to the Retirement Income Trust
Fund, and the Bank’s obligation to record Phantom
Contributions pursuant to Subsection 2.1(c) shall commence. 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 Thomas Schneider
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 and the tax reimbursement formula
contained in the trust document, or other trust expenses properly
payable from the Thomas Schneider Grantor Trust pursuant to the
provisions of the trust document.
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Benefits
Payable From Retirement Income Trust Fund .
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Notwithstanding
anything else to the contrary in this Agreement, in the event that
the trustee of the Retirement Income Trust Fund purchases a life
insurance policy with the Contributions to and, if applicable,
earnings of the Trust, and such lift insurance policy is intended
to continue in force beyond the Payout Period for the disability or
retirement benefits payable from the Retirement Income Trust Fund
pursuant to this Agreement, then the trustee shall have discretion
to determine the portion of the cash value of such policy available
for purposes of annuitizing the Retirement Income Trust Fund (it
being understood that for purposes of this Section 2.3,
“annuitizing” does not mean surrender of such policy
and annuitizing of the cash value received upon such surrender) to
provide the disability or retirement benefits payable under this
Agreement, after taking into consideration the amounts reasonably
believed to be required in order to maintain the cash value of such
policy to continue such policy in effect until the death of the
Executive and payment of death benefits thereunder.
SECTION III
RETIREMENT
BENEFIT
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(a)
Normal form of payment .
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If (i) the
Executive is employed with the Bank until reaching his Retirement
Age, 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.
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
b
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