Exhibit 10.12
TRUST UNDER GREATER COMMUNITY BANCORP
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
(a) This
Agreement made this 25 day of June, 2008, by and between
GREATER COMMUNITY BANCORP (the “Company”) and
WALTER J. SKIPPER (the “Trustee”);
(b) WHEREAS,
the Company has previously adopted the Executive Supplemental
Retirement Income Agreement as listed in Appendix A
(“Plan” or “Plans”);
(c) WHEREAS,
the Company has incurred liability or expects to incur
liability under the terms of such Plans with respect to the
individual participating in such Plans (“Participant or
“Participants”);
(d) WHEREAS,
the Company wish to establish a trust (hereinafter
called “Trust”) and to contribute to
the Trust assets to be held therein, subject to the claims of
the Company’s creditors in the event of Company’s
Insolvency, as herein defined, until paid to Participants and
their beneficiaries in such manner and at such times as
specified in the Plans;
(e) WHEREAS,
it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the
status of the Plans as unfunded arrangements maintained for
the purpose of providing deferred compensation for a select
group of management or highly compensated employees for
purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended;
(f) WHEREAS,
it is the intention of the Company to make contributions to
the Trust to provide a source of funds to assist in the
meeting of the liabilities under the Plans;
NOW,
THEREFORE, the parties do establish the Trust and agree that the
Trust shall comprise, held and disposed of as follows:
Section 1. ESTABLISHMENT OF
TRUST
(a) The
Company may from time to time make, or cause to be made,
contributions to the Trust of cash, including insurance
contracts and/or marketable securities, which are acceptable
to the Trustee, and which shall become the principal of the
Trust to be held, administered and disposed of by the Trustee
as provided in this Trust Agreement. Neither the
Trustee nor any Participant or beneficiary shall have any
right to compel such contributions.
(b) Except
as provided in Section 4, the Trust hereby established shall
be irrevocable.
(c) The
Trust is intended to be a grantor trust, of which the Company
is the grantor, within the meaning of subpart E, part 1,
subchapter J, chapter 1, subtitle A of the
Internal
Revenue
Code of 1986, as amended, and shall be construed
accordingly.
(d) The
principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the Company or
any of its subsidiaries and shall be used exclusively for the
uses and purposes of Plan participants and general creditors
as herein set forth. The Participants and their
beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the
Trust. Any rights created under the Plans and this
Trust Agreement shall be mere unsecured contractual rights of
Participants and their beneficiaries against the
Company. Any assets held by the Trust will be
subject to the claims of the Company’s general
creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
Section
2. PAYMENTS TO
PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) The
Company shall deliver to the Trustee a copy of the Plan
document for each of the Plans, together with a schedule (the
“Payment Schedule”) that indicates the amounts
payable in respect of each Participant (and his or her
beneficiaries), that provides a formula or other instructions
acceptable to the Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as
provided for or available under the Plan), and the time of
commencement for payment of such amounts. If the
Company has not done so previously, it shall deliver the Plan
documents and the Payment Schedule to the Trustee before the
occurrence of any Change of Control, as defined herein, and
upon the occurrence of a Change of Control, shall deliver to
the Trustee a current census of Participants and a current
Payment Schedule (to the extent revisions to the most
previous Payment Schedule are necessary or
appropriate). Following any Change of Control, the
Payment Schedule may not be modified or amended by the
Company. Except as otherwise provided herein, the
Trustee shall make payments to the Participants and their
beneficiaries in accordance with such Payment Schedule or, to
the extent benefits cannot be determined pursuant to the
Payment Schedule, in accordance with the Plan documents (as
interpreted and directed by the Company). The
Trustee shall make provisions for the reporting and
withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plans and shall pay
amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and
paid by the Company.
(b) Subject
to any determination made and set forth in the Payment
Schedule described in Section 2(a) following a Change of
Control, the entitlement of a Participant or his or her
beneficiaries to benefits under the Plans shall be determined
by the Company or such party as it shall designate under the
Plans, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the
Plans.
(c) The
Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under
the terms of the Plans. The Company shall notify
the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to
participants or their beneficiaries. In addition,
if the principal of the Trust, and any earnings thereon, are
not sufficient to make payments of benefits in accordance
with the terms of the Plan, the Company shall make the
balance of each such payment as it falls due. The
Trustee shall notify the Company where principal and earnings
are not sufficient.
(d) Upon
a Change of Control, the Company shall, as soon as possible,
but
in
no event later than 5 days following the Change of Control or the
plan termination, as the case may be, make an irrevocable
contribution to the Trust in an amount equal to $570,000, to pay
each Participant or beneficiary the vested benefits to which he or
she would be entitled pursuant to the terms of the Plans as of the
date on which the Change of Control or plan termination, as the
case may be, occurred.
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Section 3.
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TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
COMPANY IS INSOLVENT.
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(a) The
Trustee shall cease payment of benefits to Participants and
their beneficiaries if the Company is
Insolvent. The Company shall be considered
“Insolvent” for purposes of this Trust Agreement
if (i) the Company is unable to pay its debts as they become
due, (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code or (iii) the
Company is determined to be Insolvent by any state of federal
regulatory authority.
(b) At
all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the Trust
shall be subject to claims of general creditors of the
Company under federal and state law as set forth
below.
(1) The
Board of Directors and the Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing
of the Company’s Insolvency. If a person
claiming to be a creditor of the Company alleges in writing
to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent and,
pending such determination, the Trustee shall discontinue
payment of benefits to Plan participants or their
beneficiaries.
(2) Unless
the Trustee has actual knowledge of the Company’s
Insolvency, or has received notice from the Company or a
person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether
the Company is Insolvent. The Trustee may in all
events rely on such evidence concerning the Company’s
solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a
determination concerning the Company’s
solvency.
(3) If
at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the assets
of the Trust for the benefit of the Company’s general
creditors. Nothing in this Trust Agreement shall
in any way diminish any rights of Plan participants or their
beneficiaries to pursue their rights as general creditors of
the Company with respect to benefits due under the Plans or
otherwise.
(4) the
Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with
Section 2 of this Trust Agreement only after the Trustee has
determined that the Company is not Insolvent (or is no longer
Insolvent).
(c) Provided
that there are sufficient assets, if the Trustee discontinues
the payment of benefits from the Trust pursuant to Section
3(b) hereof and subsequently resumes such payments, the first
payment following such discontinuance shall include the
aggregate amount of all payments due to Plan participants or
their beneficiaries under the terms of the Plans for the
period of
such
discontinuance, less the aggregate amount of any payments made to
Plan participants or their beneficiaries by the Company in lieu of
the payments provided for hereunder during any such period of
discontinuance.
Section 4. PAYMENTS
TO COMPANY.
Except
as provided in Section 3 hereof or to reimburse the Company for
taxes due on earnings of the Trust (at an agreed upon 30% tax
rate), the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the
Trust assets before all payment of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the
Plans.
Section
5. INVESTMENT
AUTHORITY.
The
Trustee shall invest and reinvest the principal and income of the
Trust, in its discretion, in securities and in any other form of
property not prohibited by law, without regard to any restrictions
imposed by state law or investment by fiduciaries, but subject,
however, to such written investment guidelines or directions, if
any, as the Company may provide from time to time to the
Trustee. The Trustee may invest in
securities (including stock or rights to acquire stock)
or obligations issued by the Company, or in securities of any
open-end or closed-end management type investment company or
investment trust registered under the Investment Company Act of
1940, as amended, which would be regarded by prudent businessmen as
a safe investment. The fact that the Trustee or any
affiliate of the Trustee is providing services to and
re
