Exhibit 10.2
CULLMAN SAVINGS
BANK
DIRECTORS’ CASH
COMPENSATION DEFERRAL PLAN
THIS INDENTURE is made effective as
of January 15, 2008 by CULLMAN SAVINGS BANK, a federally
chartered mutual savings bank headquartered in Cullman, Alabama
(hereinafter referred to as the “Company”);
INTRODUCTION
The Company desires to establish an
unfunded plan of deferred compensation for the purpose of providing
deferred compensation to directors of the Company.
NOW, THEREFORE, the Company does
hereby establish the Cullman Savings Bank Directors’ Cash
Compensation Deferral Plan (the “Plan”), effective as
of the Effective Date, to read as follows:
CULLMAN SAVINGS
BANK
DIRECTORS’ DEFERRED CASH
COMPENSATION PLAN
TABLE OF CONTENTS
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PAGE
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SECTION
1
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DEFINITIONS
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1
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SECTION
2
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ELIGIBILITY
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2
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SECTION
3
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DEFERRAL
ELECTIONS
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3
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SECTION
4
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CREDITING
CONTRIBUTIONS TO ACCOUNTS
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4
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SECTION
5
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ADJUSTMENT OF
ACCOUNTS FOR EARNINGS AND LOSSES
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4
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SECTION
6
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WITHDRAWALS OF
ACCOUNTS WHILE A DIRECTOR
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4
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SECTION
7
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DEATH
BENEFITS
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5
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SECTION
8
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PAYMENT OF
BENEFITS AFTER CESSATION OF DIRECTORSHIP
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6
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SECTION
9
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ADMINISTRATION
OF THE PLAN
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6
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SECTION
10
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CLAIM REVIEW
PROCEDURE
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7
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SECTION
11
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LIMITATION OF
ASSIGNMENT, PAYMENTS TO LEGALLY INCOMPETENT DISTRIBUTEE AND
UNCLAIMED PAYMENTS
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9
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SECTION
12
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LIMITATION OF
RIGHTS
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9
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SECTION
13
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AMENDMENT TO OR
TERMINATION OF THE PLAN
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10
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SECTION 14
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MISCELLANEOUS
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10
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SECTION 1
DEFINITIONS
Whenever used herein, the masculine
pronoun shall be deemed to include the feminine, and the singular
to include the plural, unless the context clearly indicates
otherwise. The following words and phrases shall have the meanings
set forth below:
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1.1
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“
Account ” means the bookkeeping accounts established
and maintained by the Plan Administrator, as adjusted for credits
or charges.
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1.2
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“
Affiliate ” means (a) any corporation which is a
member of the same controlled group of corporations (within the
meaning of Code Section 414(b)) as is the Company and
(b) any other trade or business (whether or not incorporated)
under common control (within the meaning of Code
Section 414(c)) with the Company.
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1.3
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“
Annual Cash Compensation ” means the cash amount
payable to a Director during the Plan Year by the Company for his
services as a Director.
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1.4
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“
Board of Directors ” means the Board of Directors of
the Company.
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1.5
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“
Change in Control ” means any one of the following
events which occurs following the Effective Date:
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1.5.1
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Cullman Savings
Bank merges into or consolidates with another corporation, or
merges another corporation into Cullman Savings Bank, and as a
result less than a majority of the combined voting power of the
resulting corporation immediately after the merger or consolidation
is held by persons who were members of the Board of
Directors;
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1.5.2
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The individuals
who, as of the date hereof, are members of the Board (the
“Continuing Directors”) cease for any reason to
constitute a majority of the Board, unless the election, or
nomination for election, of any new Director was approved by a vote
of a majority of the Continuing Directors, and such new Director
shall, for purposes of this Agreement, be considered as Continuing
Directors; or
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1.5.3
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The bank sells
to a third party a majority of the assets of the bank.
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1.6
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Notwithstanding
the foregoing, to the extent the definition of “Change in
Control” used herein is inconsistent with the requirements of
Code Section 409A, the definition of “Change in
Control” shall be conformed so that it complies with Code
Section 409A.
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1.7
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“
Code ” means the Internal Revenue Code of 1986, as
amended.
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1.8
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“
Director ” means a director of the Company or an
Affiliate of the Company.
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1.9
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“ Disability ”
means the same as defined in the Company’s Long Term
Disability
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Policy or, if no policy is in
effect, then a condition whereby a Participant is unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continued period
of not less than twelve (12) months.
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1.10
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“
Effective Date ” means January 15,
2008.
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1.11
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Normal
Retirement Age” means age sixty-five (65).
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1.12
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“
Participant ” means any Director or former Director
who has participated in the Plan, for so long as his benefits
hereunder have not been entirely distributed from the
Plan.
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1.13
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Plan
Administrator ”
means the Company, except as otherwise provided in Plan
Section 9.1.
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1.14
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“ Plan
Year ” means the twelve-month period from January 1
to December 31.
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1.15
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“
Trust ” means a grantor trust, if any, established by
the Company to hold the assets represented by the Accounts pursuant
to the Plan.
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1.16
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“
Unforeseen Emergency ” means a severe financial
hardship to the Participant resulting from an illness or accident
of the Participant, the Participant’s spouse, or a dependent
(as defined in Code Section 152(a)) of the Participant, loss
of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the Participant, or as otherwise defined in
IRC section 409(a).
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SECTION 2
ELIGIBILITY
2.1 Date of Participation .
Each Director shall become a Participant as of the first day after
the Director timely elects to defer any portion of his or her
Annual Cash Compensation pursuant to Section 3.
2.2 Cessation of
Participation . A Participant who ceases to be a Director will
no longer be eligible to make further deferrals under the Plan
pursuant to Plan Section 3, but shall continue to be subject
to all other terms of the Plan so long as any amount remains
credited to his Account in the Plan.
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SECTION 3
DEFERRAL
ELECTIONS
3.1 Elections . A Participant
who is a Director for all or any portion of the Plan Year may elect
to defer under the Plan a minimum of twenty-five percent
(25%) and a maximum of one hundred percent (100%) of his
Annual Cash Compensation payable to him for the Plan
Year.
3.2 Election Procedure
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(a) Timing of Election . Each
Director who is eligible to participate in the Plan as of the
Effective Date must submit his election to participate for the Plan
Year commencing January 1, 2008 to the Plan Administrator
within thirty days (30) of the Effective Date, but prior to
receiving any compensation to which the Election applies. Each
Director who first becomes eligible to participate in the Plan
after the Effective Date must submit his election to participate
for the Plan Year in which he first is elected as a Director to the
Plan Administrator within thirty (30) days after the date he
is so elected. Each Director who is eligible to participate in the
Plan following the Plan Year in which he first becomes eligible to
participate in the Plan must submit his election to participate for
any such subsequent Plan Year to the Plan Administrator no later
than the last day of the immediately preceding Plan
Year.
(b) Form of Payment . At such
time as a Participant makes his initial deferral election under the
Plan, the Participant shall elect the manner in which his Account
will be distributed from the Plan as described in Section 8.1
hereof. The Participant’s initial election as to the form of
payment will apply to only that year’s deferred compensation
and the accumulated earnings thereon. A new election should be
filed prior to the beginning of each year, otherwise the previous
election will govern deferrals for the then current year. A
participant may change his election for any year with respect to
the form of payment for his Account if the following conditions are
satisfied: (i) the change does not take effect until at least
twelve (12) months after the date on which the election change
is made; (ii) the first payment with respect to which the
change is made must be deferred for at least five (5) years
from the date the payment would otherwise have been made; and
(iii) if the payment is to be made at a fixed time or pursuant
to a fixed schedule, the change cannot be made less than twelve
(12) months before the date of the first scheduled payment. In
addition, no subsequent payment election can accelerate either the
time or schedule of any payment previously established.
(c) Compensation Subject to
Election . Notwithstanding subsections (a) and (b), no
deferral elections shall be effective for the portion of a
Participant’s Annual Cash Compensation which has been earned
on or before the date of the election.
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(d) Changes in Elections .
Except as provided in Subsection (b) of this Section, a
Participant may not suspend, revoke or modify an election at any
time during a Plan Year.
SECTION 4
CREDITING CONTRIBUTIONS TO
ACCOUNTS
4.1 Matching Contributions .
The Company will credit each Participant’s account with a
“matching” contribution equal to One hundred percent
(100%) of the elected deferral amount, up to a maximum of six
thousand dollars ($6,000.00) annually. Participant deferrals in
excess of six thousand dollars ($6,000.00) are not eligible for
matching Company contributions.
The Company shall credit to the
Participant’s Account amounts deferred under Plan
Section 3 and this Section 4 as soon as administratively
practicable after such amounts are withheld from the
Participant’s Annual Cash Compensation.
SECTION 5
ADJUSTMENT OF ACCOUNTS FOR
EARNINGS AND LOSSES
Each Account shall be adjusted no
less frequently than quarterly, as determined by the Plan
Administrator, by a rate of interest equal to six percent
(6%) or ten (10) times the Company’s ROA for the
most recently completed year, whichever is greater though not to
exceed a maximum rate of interest of 10%. The determination of the
appropriate rate of interest is in the sole discretion of the Plan
Administrator . If a Participant is paid all or a portion of
his Account between interest crediting dates, no interest credit
will apply for the period from and after the immediately preceding
interest crediting date through the date of payment, unless
otherwise determined by the Plan Administrator.
SECTION 6
WITHDRAWALS OF ACCOUNTS WHILE
A DIRECTOR
(a) Unforeseen Emergency .
The Plan Administrator shall pay all or a portion of a
Participant’s Account prior to the payment date applicable in
Section 7 or 8 if the Participant is a Director and
demonstrates that he has an Unforeseen Emergency; provided,
however, that payment may not be made to the extent the Unforeseen
Emergency is or may be relieved (1) through reimbursement or
compensation by insurance or otherwise or (2) by liquidation
of the Participant’s assets, to the extent the liquidation of
such assets would not itself cause severe financial hardship.
Distributions because of Unforeseen Emergency shall be limited to
the amount reasonably necessary to satisfy the need (which may
include any amounts necessary to pay any federal, state, or local
income taxes or penalties reasonably contemplated to result from
the distribution). The Plan Administrator shall have the sole and
absolute discretion to determine if an Unforeseen Emergency exists
with respect to a Participant.
(b) Payment . Unforeseen
Emergency payments shall be made to a Participant only in
accordance with such rules, policies, procedures, restrictions, and
conditions as the Plan Administrator may from time to time adopt.
Any determination of the amount to
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be distributed on account of an
Unforeseen Emergency shall be made by the Plan Administrator. A
payment under this Plan Section shall be made in a lump sum in cash
to the Participant and shall be charged against the
Participant’s Account as of the day coinciding with or
immediately preceding the date on which payment is made.
SECTION 7
DEATH
BENEFITS
7.1 Death Prior to Commencement
of Payment . Upon the death of a Participant who dies while a
Director, the Participant’s beneficiary, or in the event no
beneficiary is named or survives the Participant, then the estate,
shall receive the full value of the Participant’s Account as
though he had served until Normal Retirement Age, elected the
maximum deferral annually that would be eligible for company
matching as outlined in Plan Section 4 and received the
maximum allowable “matching contribution” as outlined
in Plan Section 4. The Company may elect to provide this
“Death Benefit” through company owned insurance on the
participant’s life. In the event the Company does procure
life insurance on the Participant’s life, the benefit under
this section due from the Company shall be reduced by the amount of
proceeds paid directly to the beneficiary or the
participant’s estate by the insurance carrier.
7.1.1 Payment . Any benefit
payable under this Section 7.1 shall be paid in a lump sum in
cash to the Participant’s named beneficiary or estate as soon
as practicable following the Participant’s death after
receipt by the Plan Administrator of notice of the death
