Exhibit 10.10
HARVARD FEDERAL
SAVINGS & LOAN ASSOCIATION
DEFERRED FEE
AGREEMENT
THIS AGREEMENT is made this
day of
,
by and between Harvard Federal Savings & Loan Association
(the “Company”), and
(the “Director”).
INTRODUCTION
To encourage the Director to remain
a member of the Company’s Board of Directors, the Company is
willing to provide to the Director a deferred fee opportunity. The
Company will pay the benefits from its general assets.
AGREEMENT
The Director and the Company agree
as follows:
Article 1
Definitions
1.1 Definitions . Whenever
used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1.1 “ Change of
Control ” means the conversion from a mutual association
to a stock association and the transfer of 51% or more of the
Company’s outstanding voting common stock followed within
twelve (12) months by termination of the Director’s
status as a member of the Company’s Board of
Directors.
1.1.2 “ Code ”
means the Internal Revenue Code of 1986, as amended. References to
a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 “ Disability
” means, if the Director is covered by a Company-sponsored
disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Director is not
covered by such a policy, Disability means the Director suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to
the Company, prevents the Director
from performing substantially all of the normal duties of a
director. As a condition to any benefits, the Company may require
the Director to submit to such physical or mental evaluations and
tests as the Company’s Board of Directors deems
appropriate.
1.1.4 “ Election Form
” means the Form attached as Exhibit 1.
1.1.5 “ Fees ”
means the total directors fees payable to the Director.
1.1.6 “ Normal Termination
Date ” means the Director attaining age 70 and completing
10 Years of Service.
1.1.7 “ Termination of
Service ” means the Director’s ceasing to be a
member of the Company’s Board of Directors for any reason
whatsoever.
1.1.8 “ Years of
Service ” means the total number of twelve-month periods
during which the Director serves as a member of the Company’s
Board of Directors.
Article 2
Deferral Election
2.1 Initial Election . The
Director shall make an initial deferral election under this
Agreement by filing with the Company a signed Election Form within
30 days after the date of this Agreement. The Election Form shall
set forth the amount of Fees to be deferred and the form of benefit
payment. The Election Form shall be effective to defer only Fees
earned after the date the Election Form is received by the
Company.
2.2 Election
Changes
2.2.1 Generally . The
Director may modify the amount of Fees to be deferred by filing a
subsequent signed Election Form with the Company. The modified
deferral shall not be effective until the calendar year following
the year in which the subsequent Election Form is received by the
Company. The Director may change the form of benefit payment
initially elected under Section 2.1, during a six-month period
ending at least 180 days prior to the Director’s Normal
Retirement date from the Board.
2.2.2 Hardship . If an
unforeseeable financial emergency arising from the death of a
family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by
written instructions to the Company may reduce or cease deferrals
under this Agreement.
Article 3
Deferral Account
3.1 Establishing and
Crediting . The Company shall establish a Deferral Account on
its books for the Director, and shall credit to the Deferral
Account the following amounts:
3.1.1 Deferrals . The Fees
deferred by the Director as of the time the Fees would have
otherwise been paid to the Director.
3.1.2 Interest . On the first
day of each month and immediately prior to the payment of any
benefits, interest on the account balance since the preceding
credit under this Section 3.1.2, if any, at a rate adjusted
annually on January 1, and equal to the rate on high grade
long-term corporate bonds. The rate effective January 1, 1995
shall be 8.60%. The initial projected benefit, based upon the rate
effective January 1, 1995 is
$
payable for a 10 year period.
3.2 Statement of Accounts .
The Company shall provide to the Director, within one hundred
twenty (120) days after each anniversary of this Agreement, a
statement setting forth the Deferral Account balance.
3.3 Accounting Device Only .
The Deferral Account is solely a device for measuring amounts to be
paid under this Agreement. The Deferral Account is not a trust fund
of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the
mere Company promise to pay such benefits. The Director’s
rights are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by the Director’s creditors.
Article 4
Benefit Payments
4.1 Normal Termination
Benefit . Upon the Director’s Termination of Service, the
Company shall pay to the Director the benefit described in this
Section 4.1.
4.1.1 Amount of Benefit . The
benefit under this Section 4.1 is the Deferral Account balance
at the Director’s Termination of Service.
4.1.2 Payment of Benefit .
The Company shall pay the benefit to the Director in the form
elected by the Director on the Election Form. The Company shall
continue to credit interest under Section 3.1.2.
4.2 Early Termination Benefit
. If the Director terminates service as a director before the
Normal Termination Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit
described in this Section 4.2.
4.2.1 Amount of Benefit . The
benefit under this Section 4.2 is the Deferral Account balance
at the Director’s Termination of Service.
4.2.2 Payment of Benefit .
The Company shall pay the benefit to the Director in the form
elected by the Director on the Election Form. The Company shall
continue to credit interest under Section 3.1.2.
4.3 Disability Benefit . If
the Director terminates service as a director for Disability prior
to the Normal Retirement Date, the Company shall pay to the
Director the benefit described in this Section 4.3.
4.3.1 Amount of Benefit . The
benefit under this Section 4.3 is the Deferral Account balance
at the Director’s Termination of Service.
4.3.2 Payment of Benefit .
The Company shall pay the benefit to the Director in the form
elected by the Director on the Election Form. The Company shall
continue to credit interest under Section 3.1.2.
4.4 Change of Control Benefit
. Upon a Change of Control while the Director is in the active
service of the Company, the Company shall pay to the Director the
benefit described in this Section 4.4 in lieu of any other
benefit under this Agreement.
4.4.1 Amount of Benefit . The
benefit under this Section 4.4 is the Deferral Account balance
at the date of the Director’s Termination of
Service.
4.4.2 Payment of Benefit .
The Company shall pay the benefit to the Director in the form
elected by the Director on the Election Form. The Company shall
continue to credit interest under Section 3.1.2.
4.5 Hardship Distribution .
Upon the Company’s determination (following petition by the
Director) that the Director has suffered an unforeseeable financial
emergency as described in Section 2.2.2, the Company shall
distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the
distribution be greater than is necessary to relieve the financial
hardship.
Article 5
Death Benefits
5.1 Death During Active
Service . If the Director dies while in the active service of
the Company, the Company shall pay to the Director’s
beneficiary the benefit described in this
Section 5.1.
5.1.1 Amount of Benefit . The
benefit under Section 5.1 is
$
payable for a period of 10 years in 120 monthly installments of
$
each.
5.1.2 Payment of Benefit .
The Company shall begin paying the benefit to the beneficiary
within 90 days following the Director’s death. The Company
shall continue to credit interest under
Section 3.1.2.
5.2 Death During Benefit
Period . If the Director dies after benefit payments have
commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the
Director’s beneficiary at the same time and in the same
amounts they would have been paid to the Director had the Director
survived.
Article 6
Beneficiaries
6.1 Beneficiary Designations
. The Director shall designate a beneficiary by filing a written
designation with the Company. The Director may revoke or modify the
designation at any time by filing a new designation. However,
designations will only be effective if signed by the Director and
accepted by the Company during the Director’s lifetime. The
Director’s beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases the Director,
or if the Director names a spouse as beneficiary and the marriage
is subsequently dissolved. If the Director dies without a valid
beneficiary designation, all payments shall be made to the
Director’s surviving spouse, if any, and if none, to the
Director’s surviving children and the descendants of any
deceased child by right of representation, and if no children or
descendants survive, to the Director’s estate.
6.2 Facility of Payment . if
a benefit is payable to a minor, to a person declared incompetent,
or to a person incapable of handling the disposition of his or her
property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor,
incompetent person or incapable person. The Company may require
proof of incompetency, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Such distribution
shall completely discharge the Company from all liability with
respect to such benefit.
Article 7
General
Limitations
Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any
benefit under this Agreement that is attributable to the
Company’s matching contributions or the interest earned on
such contributions:
7.1 Excess Parachute Payment
. To the extent the benefit would be an excess parachute payment
under Section 280G of the Code.
7.2 Termination for Cause .
If the Company terminates the Director’s service as a
director for:
7.2.1 Gross negligence or gross
neglect of duties;
7.2.2 Commission of a felony or of a
gross misdemeanor involving moral turpitude; or
7.2.3 Fraud, disloyalty, dishonesty
or willful violation of any law or significant Company policy
committed in connection with the Director’s service and
resulting in an adverse financial effect on the Company.
7.3 Suicide . If the Director
commits suicide within two years after the date of this Agreement,
or if the Director has made any material misstatement of fact on
any application for life insurance purchased by the
Company.
Article 8
Claims and Review
Procedures
8.1 Claims Procedure . The
Company shall notify the Director’s beneficiary in writing,
within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits
under the Agreement. If the Company determines that the beneficiary
is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such
