EXHIBIT 99.5
EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME AGREEMENT
FOR MICHAEL J.
FITZPATRICK
This Restated Executive Supplemental
Retirement Income Agreement (the “Agreement”), which
was initially effective as of May 1, 1996, by and between
OCEANFIRST BANK (the “Bank”), a federally chartered
savings bank, and Michael J. Fitzpatrick, hereinafter referred to
as “Executive”, is hereby amended and restated
effective as of January 1, 2005, to read as
follows:
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 , Section 409A of the Internal Revenue Code
of 1986 (the “Code”), as amended, requires that certain
deferred compensation arrangements comply with its terms or subject
the recipient of the compensation to potential taxes and penalties;
and
WHEREAS , the Bank and the Executive desire that the
Agreement comply with Code Section 409A and the Treasury
Regulations promulgated thereunder;
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:
1.1 “Accrued Benefit
Account” shall be represented by the bookkeeping
entries 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
OCEANFIRST 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.
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).
2
1.12 “Effective Date”.
The initial Effective Date of this Agreement was May 1, 1996.
The Agreement is hereby amended and restated effective as of
January 1, 2005, in order to conform to Code
Section 409A.
1.13 “ESOP” means the
Bank’s Employee Stock Ownership Plan.
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. Notwithstanding anything herein to the
contrary, in the event that the Executive exercises the
Executive’s withdrawal rights and the Executive is considered
a Specified Employee within the meaning of Code section
409A(a)(2)(B)(i) at the time of (i) any distribution due to
the Executive’s termination of employment (for reasons other
than death), or (ii) any payments to the Retirement Income
Trust Fund, then such payments shall be delayed until the first day
of the seventh full month following the Executive’s
Separation from Service. In such case, the first payment made to
the Executive will consist of an amount equal to seven
(7) monthly installments so that the Executive (or his
Beneficiary, as applicable) will receive his full benefits
hereunder over a period of 180 months following his Separation from
Service.
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” means
the twelve (12) month period commencing January 1 and
ending December 31.
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
3
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 Michael J. Fitzpatrick Grantor Trust
Agreement.
1.21 “Separation from
Service” means the Executive’s death, retirement or
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 the Executive’s right to reemployment
is provided by law or contract. If the leave exceeds six months and
the Executive’s right to reemployment is not provided by law
or by contract, then the Executive shall be have a Separation from
Service on the first date immediately following such six-month
period.
The Executive shall not be treated
as having a Separation from Service if the Executive provides more
than insignificant services for the Bank following the
Executive’s actual or purported termination of employment
with the Bank. Services shall be treated as not being insignificant
if such services are performed at an annual rate that is at least
equal to 20% of the services rendered by the Executive for the
Bank, on average, during the immediately preceding three full
calendar years of employment (or if employed less than three years,
such shorter period of employment) and the annual base compensation
for such services is at least equal to 20% of the average base
compensation earned during the final three full calendar years of
employment (or if employed less than three years, such shorter
period of employment).
Where the Executive continues to
provide services to a previous employer in a capacity other than as
an employee, a Separation from Service will not be deemed to have
occurred if the Executive is providing services at an annual rate
that is 50% or more of the services rendered, on average, during
the immediate preceding three full calendar years of employment (or
if employed less than three years, such lesser period) and the
annual base compensation for such services is 50% or more of the
annual base compensation earned during the final three full
calendar years of employment (or if less, such lesser
period).
1.22 “Specified
Employee” means an employee of the Bank or the Holding
Company that is a “specified employee” within the
meaning of Code Section 409A.
1.23 “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).
1.24 “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 1.23.
4
1.25 “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 1.23, in
the Executive’s Accrued Benefit Account.
1.26 “Supplemental Retirement
Income Benefit” means an actuarially determined, annual
amount, ( before taking into account federal and state
income taxes) equal to One Hundred Seventy Six Thousand Eight
Hundred Sixty Five Dollars ($176,865.00) 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 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).
1.27 “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.
1.28 “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.
1.29 “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. In the case of benefits
payable from the Accrued Benefit Account, such election generally
shall have been made prior to December 31, 2008 (i.e. the last
day of the “Transition Period” for bringing plans into
compliance with Code Section 409A). Notwithstanding any
provision herein to the contrary, in the event that the Executive
exercises his withdrawal rights pursuant to Section 2.2
herein, the Executive shall only be permitted to make subsequent
changes to the time or form of distributions under
Section 3.1, 4.1 or 5.1 by meeting each of the following
requirements: In the case of benefits payable from the Accrued
Benefit Account, such election generally shall have been made prior
to December 31, 2008 (i.e. the last day of the
“Transition Period” for bringing plans into compliance
with Code Section 409A). Notwithstanding any
5
provision herein to the contrary, in the event
that the Executive exercises his withdrawal rights pursuant to
Section 2.2 herein, the Executive shall only be permitted to
make subsequent changes to the time or form of distributions under
Section 3.1, 4.1 or 5.1 by meeting each of the following
requirements:
(i) no election may take effect
until at least 12 months after the date on which the election is
made;
(ii) other than with respect to
distributions made on account of death or disability, the first
payment with respect to which such election is made shall be
deferred for a period of at least five years from the date such
payment would otherwise have been made; and
(iii) any such election must be made
at least 12 months prior to the date of the first scheduled payment
under such paragraph.
SECTION II
BENEFITS -
GENERALLY
2.1 (a) (1) Retirement
Income Trust Fund and Accrued Benefit Account . The 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 1.23 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 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.
6
(2) Supplemental Retirement
Income Benefit . The annual Supplemental 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 1.26. Supplemental Retirement
Income Benefit Contributions shall be made by the Bank to the
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
1.26. 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) 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 1.26. Furthermore, should the Administrator determine
that the balance of the Accrued Benefit
7
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 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 1.23 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 1.23, 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
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
1.23.
(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 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.
8
(2) Death During
Employment
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.
(3) Change in
Control
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
within thirty (30) days after the Change in Control 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
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
9
forth in Exhibit A for all Plan Years through
the Plan Year in which such termination occurs, shall be required
of the Bank within thirty (30) days after such voluntary or
involuntary termination (or if the Executive is a Specified
Employee, not earlier than the first day of the seventh
(7th) month following the Executive’s Separation from
Service). 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
(5) Termination Due to
Disability
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 (or if the Executive is a Specified
Employee, not earlier than the first day of the seventh
(7th) month following the Executive’s Separation from
Service). 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
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 (or if the
Executive is a Specified Employee, not earlier than the first day
of the seventh (7th) month following the Executive’s
Separation from Service). 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.
(1) Phantom Contributions Made
Annually
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.
10
(2) Death During
Employment
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
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 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
11
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 Benefit Age
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.
(5) Termination Due to
Disability
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
12
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.
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 Mich
