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Exhibit 10.1
IBT BANCORP, INC.
AND RELATED COMPANIES
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
JANUARY 1, 2006
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TABLE OF CONTENTS
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Section 1.
PURPOSE........................................................
1
Section 2.
DEFINITIONS....................................................
1
Section 3. ENROLLMENT/ESTABLISHMENT OF
ACCOUNT............................ 3
Section 4. ALLOCATIONS TO
ACCOUNT......................................... 4
Section 5.
VESTING........................................................
5
Section 6. COMMENCEMENT OF
DISTRIBUTION................................... 5
Section 7. MANNER AND FORM OF
DISTRIBUTION................................ 7
Section 8. PAYOUT/SUSPENSIONS FOR
UNFORESEEABLE FINANCIAL EMERGENCY....... 8
Section 9. DEATH
BENEFIT..................................................
9
Section 10. UNSECURED UNFUNDED
PLAN........................................ 10
Section 11. PLAN AMENDMENT AND
TERMINATION................................. 10
Section 12.
EXPENSES.......................................................
10
Section 13.
NONASSIGNABILITY...............................................
10
Section 14. DIRECTOR
STATUS................................................ 11
Section 15.
ADMINISTRATION.................................................
11
Section 16. CLAIMS
PROCEDURE...............................................
12
Section 17. NO RIGHTS AS A
SHAREHOLDER..................................... 13
Section 18. LEGALITY OF
ISSUANCE........................................... 13
Section 19. BINDING
EFFECT.................................................
14
Section 20.
INCOMPETENCY...................................................
14
Section 21.
SEVERABILITY...................................................
14
Section 22.
CONSTRUCTION...................................................
14
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IBT BANCORP, INC.
AND RELATED COMPANIES
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
IBT Bancorp,
Inc. ("IBT") wants to establish a nonqualified plan of
deferred compensation benefits for
participating non-employee Directors. The
Plan is intended to postpone taxation of
such deferred compensation benefits
until those benefits are paid to the
Directors as provided in the Plan. The
provisions of this Plan shall be effective
on and after January 1, 2006.
Section 1.
PURPOSE.
The Plan is
intended to provide participating Directors with additional
compensation, payable as set forth in the
Plan, in order to reward the
individuals who contribute to the success
of the Company.
Section 2.
DEFINITIONS.
The following
words and phrases shall, when used in this Plan, have the
following respective meanings unless their
context clearly indicates otherwise:
2.01
ADMINISTRATOR OR PLAN ADMINISTRATOR means IBT which may, from time
to
time in its sole discretion, appoint a
person or persons to assist in the
administration of the Plan.
2.02 BENEFICIARY
means the person(s) or entity designated by Participant to
receive any undistributed deferred
compensation benefits which become payable in
the event of Participant's death.
2.03 BOARD OF
DIRECTORS means Company's governing body according to law and
Company's governing documents.
2.04 CHANGE OF
CONTROL means a sale which results in a change in the
ownership of Company, a change in the
effective control of Company, or a change
in the ownership of a substantial portion
of Company's assets. The change shall
not be deemed a "Change of Control" for
purposes of this Plan unless the change
(whether made in a single transaction or in
successive multiple transactions)
effectively transfers the controlling
interest of the Company to an unrelated
third party(ies) (as defined under the
attribution rules of Code Sections 318
and 414) and said change results in the
unrelated third party(ies) owning more
than fifty percent (50%) of the fair market
value or the total voting power of
the stock of the Company. In addition to
the foregoing, the Change of Control
must satisfy the provisions of Q & A-11
through 14 of IRS Notice 2005-1 and IRS
Prop. Reg. 1.409A-3(g)(5) and subsequent
guidance.
2.05 CODE means
the Internal Revenue Code of 1986, as amended.
2.06 COMMITTEE
OR ADMINISTRATIVE COMMITTEE means the committee described in
Section 15.
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2.07 COMPANY OR
PARTICIPATING COMPANY means IBT Bancorp, Inc., Isabella
Bank and Trust, Farmers State Bank of
Breckenridge, Financial Group Information
Services, Inc., and IBT Title and Insurance
Agency, Inc. and any other entity
whose Board of Directors authorizes
participation in this Plan where IBT by its
Board of Directors has approved such
participation, OR THEIR RESPECTIVE
SUCCESSOR OR SUCCESSORS.
2.08 DEFERRED
MONEY ACCOUNT means the bookkeeping account maintained on
behalf of Participant to record Company
Contributions made pursuant to Sections
4.01.
2.09 DIRECTOR
means any elected or appointed member of the Board of
Directors of any Participating Company,
provided the member is not an employee
of the Company.
2.10 DISABILITY
means the Participant is:
(a) unable to engage
in any substantial gainful activity by reason of
any medically determinable or physical or mental impairment
which
can
be expected to result in death or can be expected to last for
a continuous period of not less than 12 months, or
(b) by reason of any
medically determinable or physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of
not
less than three months under an accident and health plan
covering
Participants of the Company.
2.11 DISABILITY
RETIREMENT DATE means the date of Participant's severance
of service with the Company on account of
Participant's Disability.
2.12 EFFECTIVE
DATE means January 1, 2006, the date on which the provisions
of this Plan become effective.
2.13 NORMAL
RETIREMENT AGE means Participant's attainment of age 70.
2.14 NORMAL
RETIREMENT DATE means the date Participant attains Normal
Retirement Age, without regard to
Participant's continued service with the
Company.
2.15 PARTICIPANT
means any Director of a Participating Company receiving
Director's salary, a retainer or board fees
who has elected to participate in
the Plan by providing written notice to his
Participating Company, in the form
prescribed by the Participating
Company.
2.16 PLAN means
the IBT Bancorp, Inc. and Related Companies Deferred
Compensation Plan for Non-Employee
Directors, as amended from time to time.
2.17 PLAN YEAR
means the consecutive 12-month period beginning on January 1
and ending on December 31.
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2.18 RETIREMENT
means with respect to a Participant, separation from
service with all Participating Companies
for any reason other than a leave of
absence, death or Disability on or after
the attainment of Normal Retirement
Age.
2.19 SEPARATION
FROM SERVICE means Participant's severance of service with
all Companies, voluntarily or
involuntarily, for any reason other than
Retirement, Disability, death or an
authorized leave of absence, as determined
in accordance with Code Section 409A and
related Treasury guidance and
Regulations.
2.20 STOCK UNIT
ACCOUNT means the bookkeeping account maintained on behalf
of Participant to record Company
contributions made pursuant to Section 4.02.
2.21
UNFORESEEABLE FINANCIAL EMERGENCY means an unforeseeable
emergency
that is caused by an event beyond the
control of the Participant that would
result in severe financial hardship to the
Participant resulting from (i) a
sudden and unexpected illness or accident
of the Participant, the Participant's
spouse, or a dependent (as defined in Code
Section 152(a)) of the Participant,
(ii) a loss of the Participant's property
due to casualty, or (iii) such other
similar extraordinary and unforeseeable
circumstances arising as a result of
events beyond the control of the
Participant, all as determined in the sole
discretion of the Committee, in accordance
with applicable law.
2.22 VALUATION
DATES means March 1, June 1, September 1 and December 1.
Section 3.
ENROLLMENT/ESTABLISHMENT OF ACCOUNTS.
3.01 ENROLLMENT.
As a condition to participation, each Director who is
eligible to participate in the Plan
effective as of the first day of a Plan Year
shall complete, execute and return to the
Committee an Election Form and a
Beneficiary Designation From, prior to the
first day of such Plan Year, or such
other earlier deadline as may be
established by the Committee in its sole
discretion. In addition, the Committee
shall establish from time to time such
other enrollment requirements as it
determines, in its sole discretion, are
necessary.
3.02 INITIAL
PARTICIPATION. A Director who first becomes eligible to
participate in this Plan after the first
day of a Plan Year must complete the
enrollment requirements within thirty (30)
days after the date he first becomes
eligible to participate in the Plan, or
within such other earlier deadline as
may be established by the Committee, in its
sole discretion, in order to
participate for that Plan Year. In that
event, such person's participation in
this Plan shall not commence earlier than
the date determined by the Committee
pursuant to this Section 3.02 and such
person shall not be permitted to defer
under this Plan any portion of his salary,
retainer or fees that are paid with
respect to services performed prior to his
participation commencement date,
except to the extent permissible under Code
Section 409A and related Treasury
guidance or Regulations.
3.03
COMMENCEMENT. Each Director who is eligible to participate in the
Plan
shall commence participation in the Plan on
the date that the Committee
determines, in its sole discretion, that
the Director has met all enrollment
requirements set forth in this Plan as
required by the Committee, including
returning all required documents to the
Committee within the specified time
period. Notwithstanding the foregoing, the
Committee shall process the
Participant's deferral
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election as soon as administratively
practicable after such deferral election is
submitted to and accepted by the
Committee.
If a Director
fails to meet all requirements contained in this Section 3
within the period required, the Director
shall not be eligible to participate in
the Plan during such Plan Year.
3.04 ACCOUNTS.
Company agrees to create a Deferred Money Account and a
Stock Unit Account as described in Section
4 below to be maintained on the books
of Company in the name of each
Participant.
Section 4.
ALLOCATIONS TO ACCOUNT.
4.01 PARTICIPANT
CONTRIBUTIONS. Each Participant shall defer all or any
portion (subject to a minimum required
deferral of at least 25%) of his
director's salary (if any), retainer and
fees which are earned for the year from
any Participating Company commencing after
the date of said election as he may
specify in said written notice to the
Participating Company, and such amounts so
deferred shall be paid only as provided in
the Plan. Participant may change the
amount of, or suspend, future deferrals
with respect to the Director's salary
(if any), fees and retainers earned for
years commencing after the date of
change or suspension as he may specify by
written notice to the Participating
Company; provided such change is made prior
to January 1 of the calendar year in
which the amount to be deferred is
earned.
4.02
CONTRIBUTION TO STOCK UNIT ACCOUNT. For each Participant electing
to
participate in this Plan, each
Participating Company for whom the Participant
has made a deferral election shall maintain
a Deferred Money Account which shall
be converted quarterly into a Stock Unit
Account for each Plan Participant. Each
Participant shall be furnished quarterly
with a statement of his Accounts.
The deferred
salary (if any), retainers and fees of each Participant shall
be credited as a dollar amount to the
Participant's Deferred Money Account on
the date the amount would otherwise be
payable to Participant and shall be
converted into stock units quarterly at
each of the Valuation Dates by dividing
the dollar balance of such Deferred Money
Account as of the end of each quarter
by the price of a share of IBT common stock
as determined by the IBT Bancorp,
Inc. Stockholder Dividend Reinvestment and
Employee Stock Purchase Plan, or if
said plan is not in operation at that time,
as determined by the Board of
Directors of IBT. The number of stock units
for full shares so determined shall
be credited to the Participant's Stock Unit
Account and the aggregate value
thereof at said closing price shall be
charged to the Participant's Deferred
Money Account. Any cash balance remaining
in the Participant's Deferred Money
Account after such charge shall be
aggregated with subsequent credits to the
Account at the next Valuation Date to be
converted into additional stock units.
Additional
credits will be made to each Participant's Deferred Money
Account in dollar amounts equal to the cash
dividends (or the fair market value
of dividends paid in property) the
Participant would have received from time to
time had he been the owner on the record
dates with respect thereto of the
number of shares of IBT common stock equal
to the number of stock units in his
Stock Unit Account on such dates. In the
case of a stock dividend or stock
split, additional credits will be made to
each Participants' Stock Unit Account
of the number of stock units equal to
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the number of full shares of IBT common
stock in the case of a stock dividend or
a stock split which such Participant would
have received from time to time had
he been the owner on the record dates with
respect thereto of the number of
shares of IBT common stock equal to the
number of stock units in his Stock Unit
Account on such dates.
Section 5.
VESTING.
Subject to
satisfying the distribution events set forth in Section 6
below,
Participant's interest in his Deferred
Money Account and his Stock Unit Account
shall be 100% vested and nonforfeitable at
all times.
Section 6.
COMMENCEMENT OF DISTRIBUTION.
6.01
DISTRIBUTION DATES. The form and manner in which distributions will
be
made from the Plan shall be determined in
accordance with Section 7 below. No
amount standing from time to time to the
credit of the Participant in his
Deferred Money Account or his Stock Unit
Account shall be assignable or
alienable by Participant, nor may any such
payment be used as collateral or in
any other fashion by Participant prior to
payment by the Company. Subject to
Section 6.03 below, no amount standing from
time to time to the credit of
Participant in his Deferred Money Account
or his Stock Unit Account shall be
payable to Participant (or to Participant's
Beneficiary) until the earliest of
the following distribution dates:
(a) Normal Retirement
Date, including mandatory retirement from
Company's Board of Directors;
(b) Disability
Retirement Date;
(c) Participant's
death;
(d) Unforeseeable
Financial Emergency;
(e) a Change of
Control; or
(f) Participant's
complete Separation From Service with Company.
6.02 TIME OF
DISTRIBUTION. When the amounts credited to Participant's
Deferred Money Account and Stock Unit
Account become payable pursuant to Section
6.01 above, distribution of such benefit
shall begin on the first day of the
sixth month following the first Valuation
Date immediately following the
earliest distribution date, or as soon as
administratively practicable
thereafter.
Notwithstanding
the foregoing, Participant may elect A delayed distribution
date. The delayed distribution date may be
a specific future date or the
attainment of a specified age by the
Participant (not to exceed the
Participant's attainment of age 75), so
long as the delayed distribution date
is:
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(a) requested at least twelve (12)
months prior to the earliest
distribution date;
(b) the election does not take effect
until at least twelve (12) months
after the date on which the election is made; and
(c) the payment is postponed for a
period of not less than five (5) years
from the da
