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Exhibit
10.9
AMENDED AND
RESTATED
DIRECTOR DEFERRED
COMPENSATION AGREEMENT
This Amended and Restated
Director Deferred Compensation Agreement (the “2005
Agreement”), effective as of the 1st day of January, 2005, by
and between First Savings Bank, FSB (the “Bank”), a
mutual savings Bank organized and existing under the laws of the
State of Indiana, hereinafter referred to as “Bank” and
G.W. Clapp, Jr., hereinafter referred to as “Director”,
for the purpose of formalizing the agreement between the Bank and
the Director in which the Director defers receipt of fees under the
terms and conditions described below. The 2005 Agreement amends and
restates the Director Deferred Compensation Agreement effective as
of the 1 st day
of January, 2002 by and between the parties (the “Prior
Agreement”). It is intended that deferral under the Prior
Agreement shall be subject to and governed by the provisions of
this 2005 Agreement and shall be subject to the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) as those provisions apply to amounts
deferred after December 31, 2004.
WITNESSETH:
WHEREAS , the Director
serves the Bank as a member of the Board of Directors;
and
WHEREAS , the Bank
recognizes the valuable services heretofore performed for it by
Director and wishes to encourage continued service; and
WHEREAS , the Bank
values the efforts, abilities and accomplishments of the Director
and recognizes that Director’s services will substantially
contribute to its continued growth and profits in the future;
and
WHEREAS , the Director
wishes to defer a certain portion of fees to be earned in the
future; and
WHEREAS , the parties
hereto desire to formalize the terms and conditions upon which the
Bank shall pay such deferred compensation to the Director or his
designated beneficiary; and
WHEREAS , the parties
hereto intend that this Agreement be considered an unfunded
arrangement, and the Director shall be considered an unsecured
general creditor of the Bank with respect to amounts deferred or
benefits payable hereunder; and
WHEREAS , the Bank has
adopted this Director Deferred Compensation Agreement which
controls all issues relating to the Deferred Compensation Benefit
as described herein;
NOW, THEREFORE , in
consideration of the mutual promises herein contained, the parties
hereto agree to the following terms and conditions:
ARTICLE 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” means the sum of all deferred
amounts and interest credited monthly at a rate equal to the rate
set forth in Section 4.4 to the Director’s Retirement
Account and due and owing to the Director or his Beneficiaries
pursuant to this Agreement. |
| 1.2 |
“Bank” means First Savings Bank, FSB and any
successor thereto. |
| 1.3 |
“Beneficiary” means the person or persons
designated as Beneficiary in writing to the Bank to whom the share
of a deceased Director’s account is payable. If no
Beneficiary is so designated, then the Director’s Spouse, if
living, will be deemed the Beneficiary. If the Director’s
Spouse is not living, then the Children of Director will be deemed
the Beneficiaries and will take on a per stirpes basis. If there
are no living Children, then the Estate of the Director will be
deemed the Beneficiary. |
| 1.4 |
“Children” means the Director’s children,
both natural and adopted, then living at the time payments are due
the Children under this Agreement. |
| 1.5 |
“Deferral Period” means the period which commences
on January 1, 2005 and extends until the commencement of
benefit payments under this Agreement. |
2
| 1.6 |
“Deferred Compensation Benefit” means the value of
the Accrued Benefit payable for a one hundred eighty
(180) month period using an interest rate equal to the rate
set forth in Section 4.4. Such period to begin at
Director’s Normal Retirement Date. |
| 1.7 |
“Disability Retirement Benefit” means the benefit
payable to Director following a determination that he is disabled
pursuant to Section 4.3. Said benefit shall be payable monthly
for a one hundred eighty (180) month period which, subject to
the provisions of Section 4.3, shall begin not more than
thirty (30) days following the above-mentioned disability
determination. |
| 1.8 |
“Effective Date” shall be the effective date of
this Agreement, January 1, 2005. |
| 1.9 |
“Estate” means the Estate of the
Director. |
| 1.10 |
“Normal Retirement Date” means the first day of the
month following the Director’s seventieth
(70) birthday. |
| 1.11 |
“Payout Period” means the time frame in which
certain benefits payable hereunder shall be distributed. Said
benefits shall be paid in equal monthly installments commencing on
the first day of the month coincident with or next following the
event giving rise to an entitlement to benefit payments hereunder
and continuing for a period of one hundred eighty
(180) months. |
| 1.12 |
“Retirement Account” means book entries maintained
by the Bank reflecting deferred amounts and credited with interest
calculated and compounded monthly at a rate set forth in
Section 4.4; provided, however, that the existence of such
book entries and the Retirement Account shall not create and shall
not be deemed to create a trust of any kind, or a fiduciary
relationship between the Bank and the Director, his designated
Beneficiary, or other Beneficiaries under this Agreement.
Compensation shall be deferred when it is earned by the
Director. |
| 1.13 |
“Spouse” means the individual to whom the Director
is legally married at the time of the Director’s
death. |
| 1.14 |
“Survivor’s Benefit” means the balance of the
Retirement Account at the date of the Director’s death
distributed in accordance with the provisions of this
agreement. |
ARTICLE II.
DEFERRED
COMPENSATION
Commencing on the Effective Date, and
continuing through the end of the Deferral Period, the Director and
the Bank agree that the Director shall defer into his Retirement
Account Director’s fees of $875.00 per meeting that the
Director would otherwise be entitled to receive from the Bank
during the Deferral Period. In the event the Director desires to
change his deferrals during the term of this Agreement, the
Director shall have the option to change such amounts in whole or
in part on an annual basis for the next succeeding calendar year,
provided a Notice of Change
3
in Deferral (Exhibit B attached hereto)
is filed with the Bank no less than thirty (30) days prior to
the end of a calendar year preceding the year for which the change
is effective. If an election to defer a higher amount is made, the
approval of the Board of Directors is required. The failure to
timely notify the Bank of an election to change the deferrals shall
prohibit the Director from making any such change for the next
succeeding calendar year.
ARTICLE
III.
TERMINATION OF
ELECTION
The Director’s election
to defer compensation shall continue in effect, pursuant to the
terms of this Agreement unless and until the Director files with
the Bank a Notice of Discontinuance (Exhibit C attached hereto). A
Notice of Discontinuance shall be effective if filed at least five
(5) days prior to any January 1st. Such Notice of
Discontinuance shall be effective commencing with the
January 1 st following its filing, whichever applies, and shall apply only
with respect to the Director’s compensation attributable to
services not yet performed.
ARTICLE IV.
RETIREMENT
BENEFIT
| 4.1 |
Retirement Benefit . Provided Director has deferred all
fees during the Deferral Period and subject to Sections 4.3, 5.1 or
Article X of this Agreement, whichever is applicable, the Bank
agrees to pay the Deferred Compensation Benefit commencing upon the
Director’s Normal Retirement Date or such other date as may
be elected by the Director in accordance with the provisions of
Article XI. Such payments will be made over the Payout
Period. |
| 4.2 |
Continued Service Beyond Normal Retirement Date . Upon
attainment of the Director’s Normal Retirement Date, payments
of the Director’s Deferred Compensation Benefit shall begin
in accordance with Section 4.1, and all deferrals hereunder
shall cease, notwithstanding his continued service on the Board of
Directors. Payments under this Section 4.2 shall be made over
the Payout Period. |
| 4.3 |
Disability Retirement Benefit . Notwithstanding any
other provision hereof, if approved by the other members of the
Board of Directors, the Director shall be entitled to receive
payments hereunder prior to his Normal Retirement Date, in any case
in which it is determined by a duly licensed physician selected by
the Bank that, because of a disability, the Director is unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to last for a continuous period of not less than 12
months. If the Director is disabled pursuant to this paragraph, the
Director shall begin receiving payments of his Disability
Retirement Benefit. In the event the Director dies before the
Director’s entire Disability Retirement Benefit is paid
pursuant to this Section 4.3, the remainder of the
Director’s Disability Retirement Benefit shall be paid to
Director’s Beneficiary as a single sum cash payment. This
payment shall discharge the Bank’s obligation under this
Agreement. |
4
| 4.4 |
Adjustable Interest Rate . For purposes of Sections 1.1,
1.6, 1.12 and 13.9, the interest rate shall be adjusted as of the
first day of each calendar quarter and shall be equal to the per
annum “prime rate” as published in the Wall Street
Journal on the last business day of the immediately preceding
calendar quarter plus 2%; provided, however, that in no event shall
such interest rate exceed 8.0% per annum. |
ARTICLE V.
DEATH
BENEFITS
| 5.1 |
Death Benefit Prior to Commencement of Retirement
Benefits . In the event of the Director’s death while in
the service of the Bank and prior to commencement of the Deferred
Compensation Benefit, the Bank shall pay a Survivor’s Benefit
consisting of the Director’s Accrued Benefit as a single sum
cash payment. |
| 5.2 |
Death Benefit After Commencement of Benefits . In the
event of Director’s death after the commencement of the
Deferred Compensation Benefit or Disability Retirement Benefit, but
prior to the completion of all such payments due and owing
hereunder, the Bank shall pay to Director’s Beneficiary the
Survivor’s Benefit as a single sum cash payment, which in
this event shall be the Director’s remaining Deferred
Compensation Benefit or Disability Retirement Benefit, as the case
may be, less payments made prior to the Director’s
death. |
ARTICLE VI.
OFFSET FOR OBLIGATIONS TO
BANK
If, at such time as the Director becomes
entitled to benefit payments hereunder, the Director has any debt,
obligation or other liability representing an amount owing to the
Bank, and if such debt, obligation or other liability is due and
owing at the time benefit payments are payable hereunder, the Bank
may offset the amount owing it against the amount of benefits
otherwise distributable hereunder.
ARTICLE
VII.
BENEFICIARY
DESIGNATION
The Director shall have the right, at
any time, to submit in substantially the form attached hereto as
Exhibit A, a written designation of primary and secondary
beneficiaries to whom payment under this Agreement shall be made in
the event of his death prior to complete distribution of the
benefits due and payable under the Agreement. Each beneficiary
designation shall become effective only when receipt thereof is
acknowledged in writing by the Bank.
5
ARTICLE
VIII.
DIRECTOR’S RIGHT TO
ASSETS
The rights of the Director, any
Beneficiary, or any other person claiming through the Director
under this Agreement, shall be solely those of an unsecured general
creditor of the Bank. The Director, the Beneficiary, or any other
person claiming through the Director, shall only have the right to
receive from the Bank those payments as specified under this
Agreement. The Director 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, except as expressly provided, shall not be deemed to be
held under any trust for the benefit of the Director or his
Beneficiaries, nor shall it be considered security for the
performance of the obligations of the Bank. It shall be, and
remain, a general, unpledged, and unrestricted asset of the
Bank.
ARTICLE IX.
RESTRICTIONS UPON
FUNDING
Bank shall have no obligation to set
aside, earmark or entrust any fund or money with which to pay its
obligations under this Agreement. The Director, his Beneficiaries
or any successor in interest to him shall be and remain simply a
general creditor of the Bank in the same manner as any other
creditor having a general claim for matured and unpaid
compensation. The Bank reserves the absolute right at its sole
discretion to either fund the obligations undertaken by this
Agreement or to refrain from funding the same and to determine the
extent, nature, and method of such informal funding. Should the
Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, mutual funds, disability policies or
annuities , the Bank reserves the absolute right, in its
sole discretion, to terminate such funding at any time, in whole or
in part. At no time shall Director be deemed to have any lien, nor
right, title or interest in or to any specific funding 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
Director, then Director shall assist the Bank by freely submitting
to a physical examination and supplying such additional information
necessary to obtain such insurance or annuities.
ARTICLE X.
PAYMENT UPON TERMINATION
OF SERVICE
If the Director terminates service prior
to Normal Retirement Date, benefit payments over the Payout Period
shall be made to the Director, based on the Accrued Benefit at the
date such payout begins. Such payments shall begin as soon as
administratively practicable following the Director’s
termination of service except as may be provided pursuant to
Article XI.
6
ARTICLE XI.
CHANGE OF DISTRIBUTION
ELECTION
A Director may change the commencement
date of his or her distribution with respect to his or her
Retirement Account at any time; provided, however, that [i] such
election shall not take effect until at least twelve
(12) months after the date in which the election is made, [ii]
no change may be made less than twelve (12) months prior to
the date of the first scheduled payment specified under the Plan at
the date of the deferral of the Director’s fees, and [iii]
with respect to a payment that is not the result of death,
disability (as defined in Section 4.3), the payment with
respect to which such change is made must be deferred for a period
of not less than five (5) years from the date such payment
would otherwise have been made. Any change of distribution election
which does not meet the foregoing requirements shall be
disregarded.
ARTICLE
XII.
ALIENABILITY AND
ASSIGNMENT PROHIBITION
Neither Director nor any Beneficiary
under this Agreement shall have any power or right to transfer,
assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber in advance any of the benefits payable
hereunder, nor shall any of said benefits be subject to seizure for
the payment of any debts, judgments, alimony or separate
maintenance owed by the Director or his Beneficiary, nor be
transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event Director or any Beneficiary
attempts assignment, communication, hypothecation, transfer or
disposal of the benefits hereunder, the Bank’s liabilities
shall forthwith cease and terminate.
ARTICLE
XIII.
CLAIMS
PROCEDURE
Claims Procedure And Arbitration
. In the event that benefits under this Agreement are not paid to
the Director (or to his Beneficiary in the case of the
Director’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 Bank and its Board shall review the written claim
and, if the claim is denied, in whole or in part, they shall
provide in writing, within ninety (90) days of receipt of such
claim, their 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 written notice shall further indicate the additional
steps to be taken by claimants if a further review of the claim
denial is desired.
If claimants desire a second review,
they shall notify the Administrator in writing within sixty
(60) days of the first claim denial. Claimants may review the
Agreement or any documents relating thereto and submit any written
issues and comments they may feel appropriate. In its sole
discretion, the Administrator shall then review the second claim
and provide a written decision within sixty (60) days of
receipt of such claim. This decision shall likewise state the
specific reasons for the decision and shall include reference to
specific provisions of the Agreement upon which the decision is
based.
7
If claimants continue to dispute the
benefit denial based upon completed performance of the 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 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 shall operate
under any generally recognized set of arbitration rules. The
parties hereto agree that they and their heirs, personal
representatives, successors and assigns shall be bound by the
decision of such Board with respect to any controversy properly
submitted to it for determination.
ARTICLE
XIV.
MISCELLANEOUS
| 14.1 |
No Effect on Directorship Rights . Nothing contained
herein will confer upon the Director the right to be retained in
the service of the Bank nor limit the right of the Bank to
discharge or otherwise deal with Director without regard to the
existence of the Agreement. |
| 14.2 |
State Law . The Agreement is established under, and will
be construed according to, the laws of the State of Indiana, to the
extent that such laws are not preempted by the Act and valid
regulations published thereunder. |
| 14.3 |
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. |
| 14.4 |
Incapacity of Recipient . In the event Director is
declared incompetent and a conservator or other person legally
charged with the care of his person or of his Estate is appointed,
any benefits under the Agreement to which such Director is entitled
shall be paid to such conservator or other person legally charged
with the care of his person or his Estate. Except as provided above
in this paragraph, when the Bank’s Board of Directors, in its
sole discretion, determines that the Director is unable to manage
his financial affairs, the Board may direct the Bank to make
distributions to any person for the benefit of the
Director. |
| 14.5 |
Unclaimed Benefit . The Director 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 Director is not
made known to the Bank within three (3) years after the date
on which any payment of the Deferred Compensation Benefit may be
made, payment may be made as though the Director had died at the
end of the three (3) year period. If, within one
(1) additional year after such three (3) year period has
elapsed, or, within three (3) years after the actual death of
the Director, the Bank is unable to locate any Beneficiary of the
Director, then the Bank may fully discharge its obligation by
payment to the Estate. |
8
| 14.6 |
Limitations on Liability . Notwithstanding any of the
preceding provisions of the Agreement, neither the Bank, nor any
individual acting as an employee or agent of the Bank, or as a
member of the Board of Directors shall be liable to the Director or
any other person for any claim, loss, liability or expense incurred
in connection with the Agreement. |
| 14.7 |
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. |
| 14.8 |
Affect on Other Corporate Benefit Agreements . Nothing
contained in this Agreement shall affect the right of the Director
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. |
| 14.9 |
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. |
ARTICLE XV.
AMENDMENT AND
TERMINATION
| 15.1 |
Amendment or Termination . The Bank intends the
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. Any such amendment or
termination 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 Director of all or any portion
of the Deferred Compensation Benefit payment which has commenced
prior to the effective date of the resolution amending or
terminating the Agreement. |
| 15.2 |
No Acceleration . In the event the Agreement is
terminated, any amounts credited to the Director’s Retirement
Account shall remain subject to the provisions of this Agreement
and distribution may not be accelerated because of the termination
except as may be permitted pursuant to regulations or other
guidelines issued under Code §409A. |
ARTICLE
XVI.
EXECUTION
| 16.1 |
This Agreement sets 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. |
9
| 16.2 |
This Agreement shall be executed in duplicate, each copy of
which, when so executed and delivered, shall be an original, but
both copies shall together constitute one and the same
instrument. |
IN WITNESS WHEREOF ,
the parties have caused this Agreement to be executed on this
12 th day
of April, 2006.
|
|
|
|
/s/ Gerald W. Clapp,
Jr.
|
| Director |
|
| FIRST SAVINGS BANK, FSB |
|
|
| By: |
|
/s/ R. David
Eckerty
|
10
AMENDED AND
RESTATED
DIRECTOR DEFERRED
COMPENSATION AGREEMENT
This Amended and Restated
Director Deferred Compensation Agreement (the “2005
Agreement”), effective as of the 1st day of January, 2005, by
and between First Savings Bank, FSB (the “Bank”), a
mutual savings Bank organized and existing under the laws of the
State of Indiana, hereinafter referred to as “Bank” and
Robert E. Libs, hereinafter referred to as “Director”,
for the purpose of formalizing the agreement between the Bank and
the Director in which the Director defers receipt of fees under the
terms and conditions described below. The 2005 Agreement amends and
restates the Director Deferred Compensation Agreement effective as
of the 1 st day
of January, 2002 by and between the parties (the “Prior
Agreement”). It is intended that deferral under the Prior
Agreement shall be subject to and governed by the provisions of
this 2005 Agreement and shall be subject to the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) as those provisions apply to amounts
deferred after December 31, 2004.
WITNESSETH:
WHEREAS , the Director
serves the Bank as a member of the Board of Directors;
and
WHEREAS , the Bank
recognizes the valuable services heretofore performed for it by
Director and wishes to encourage continued service; and
WHEREAS , the Bank
values the efforts, abilities and accomplishments of the Director
and recognizes that Director’s services will substantially
contribute to its continued growth and profits in the future;
and
WHEREAS , the Director
wishes to defer a certain portion of fees to be earned in the
future; and
WHEREAS , the parties
hereto desire to formalize the terms and conditions upon which the
Bank shall pay such deferred compensation to the Director or his
designated beneficiary; and
WHEREAS , the parties
hereto intend that this Agreement be considered an unfunded
arrangement, and the Director shall be considered an unsecured
general creditor of the Bank with respect to amounts deferred or
benefits payable hereunder; and
WHEREAS , the Bank has
adopted this Director Deferred Compensation Agreement which
controls all issues relating to the Deferred Compensation Benefit
as described herein;
NOW, THEREFORE , in
consideration of the mutual promises herein contained, the parties
hereto agree to the following terms and conditions:
ARTICLE 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” means the sum of all deferred
amounts and interest credited monthly at a rate equal to the rate
set forth in Section 4.4 to the Director’s Retirement
Account and due and owing to the Director or his Beneficiaries
pursuant to this Agreement. |
| 1.2 |
“Bank” means First Savings Bank, FSB and any
successor thereto. |
| 1.3 |
“Beneficiary” means the person or persons
designated as Beneficiary in writing to the Bank to whom the share
of a deceased Director’s account is payable. If no
Beneficiary is so designated, then the Director’s Spouse, if
living, will be deemed the Beneficiary. If the Director’s
Spouse is not living, then the Children of Director will be deemed
the Beneficiaries and will take on a per stirpes basis. If there
are no living Children, then the Estate of the Director will be
deemed the Beneficiary. |
| 1.4 |
“Children” means the Director’s children,
both natural and adopted, then living at the time payments are due
the Children under this Agreement. |
| 1.5 |
“Deferral Period” means the period which commences
on January 1, 2005 and extends until the commencement of
benefit payments under this Agreement. |
2
| 1.6 |
“Deferred Compensation Benefit” means the value of
the Accrued Benefit payable for a one hundred eighty
(180) month period using an interest rate equal to the rate
set forth in Section 4.4. Such period to begin at
Director’s Normal Retirement Date. |
| 1.7 |
“Disability Retirement Benefit” means the benefit
payable to Director following a determination that he is disabled
pursuant to Section 4.3. Said benefit shall be payable monthly
for a one hundred eighty (180) month period which, subject to
the provisions of Section 4.3, shall begin not more than
thirty (30) days following the above-mentioned disability
determination. |
| 1.8 |
“Effective Date” shall be the effective date of
this Agreement, January 1, 2005. |
| 1.9 |
“Estate” means the Estate of the
Director. |
| 1.10 |
“Normal Retirement Date” means the first day of the
month following the Director’s seventieth
(70) birthday. |
|
