Exhibit 10 (7)
UNFUNDED DEFERRED COMPENSATION PLAN
FOR THE DIRECTORS OF
LINCOLN FEDERAL SAVINGS BANK
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999)
1. This Plan shall be unfunded so that the Lincoln Federal Savings Bank
(hereinafter known as the "Bank") is under a mere contractual duty to
make payments when due under the Plan. The promise to pay shall not be
represented by notes and shall not be secured by a pledge of assets or
in any other way. This Plan and action taken pursuant to it shall not
be deemed or construed to establish a trust or fiduciary relationship
of any kind between or among the Bank, any Director, or any other
person. Neither a Director nor any beneficiary of a Director shall have
the power to transfer, assign, anticipate, or otherwise encumber in
advance any of the payments that may become due hereunder, nor shall
any of such payments be subject to attachment, garnishment, or
execution or be transferable by operation of law in the event of
bankruptcy, insolvency, or otherwise.
2. Each Director may elect to have any portion or all of his or her
calendar year fees deferred by filing a written election with the
Secretary of the Bank prior to January 1st of the calendar year for
which the deferral is made. The election may not be modified or revoked
after the beginning of such calendar year. Elections may be modified or
revoked as of the close of any calendar year, but any such modification
or revocation shall be effective only as to fees for subsequent
calendar years. The election shall be made on an election form
("Election Form") in the form attached hereto as Exhibit A, and the
election shall continue from time to time until revoked or modified by
the Director. A person who becomes a Director after January 1st of a
calendar year may elect to have any portion or all of his or her fees
for such calendar year deferred by filing a written election with the
Secretary of the Bank within 30 days after becoming a Director;
provided, however, that such election will only cover fees paid after
the date on which the election is received by the Bank. As used herein,
"fees" means any retainer fees or meeting fees which an individual
receives or is entitled to receive as a Director, including fees that
accrue on account of service on any committee of Directors and fees
that are payable for services over and above those normally expected of
Directors and performed at the request of the Chairman of the Bank.
3. A Director's election to defer fees shall continue from calendar year
to calendar year unless the Director revokes or modifies it in writing.
No amount deferred shall be paid to a Director prior to the time
specified in the Director's applicable election form.
4. The Bank shall maintain a memorandum account for each Director
participating in the Plan with respect to deferred fees and shall
credit such account quarterly with interest. The rate of interest for a
quarter will be the highest, rate offered by the Bank to the general
public for any period of seven consecutive calendar days during such
quarter on new insured savings accounts, regardless of term. Interest
will be compounded quarterly and credited to the accounts as of the
last day of each quarter. The daily balance method will be used to
calculate interest on the accounts. Interest will be based on an actual
365 day basis.
5. Amounts which are deferred under the Plan, together with accumulated
interest, shall be paid in accordance with the Director's applicable
election form and the requirements set forth in paragraph 6; provided,
however, that payment must commence or be made not later than the first
day of the first calendar year which begins on or after the later of
(i) the date on which the Director ceases to be an officer, director or
employee of the Bank or (ii) the date on which the Director attains the
age specified by the retirement income test of the Social Security Act
[Section 203(f))3), as amended, or the corresponding provision then in
effect]; provided further, that payment may commence or be made only as
of the first day a calendar year and installment payments may be made
only as of the first day of a calendar month. Amounts which are held
pending distribution shall continue to accrue interest at the stated
interest rate. In the case of amounts payable in monthly or annual
installments, each installment shall be equal to the aggregate amount
in the Director's account as of the end of the month prior to the
installment payment date, multiplied by a fraction whose numerator is
one (1) and whose denominator is the number of installments (including
the installment that becomes payable as of such date) remaining.
6. The manner and date in which a Director's deferred fees are to be
distributed to that Director shall be designated by that Director in
the Election Form executed by that Director. The distribution options
available to a Director shall include:
(i) lump sum, or
(ii) monthly or annual installments over a period between 5 and 10
years
Subject to paragraph 5, the Director shall designate in the Election
Form the year in which distribution is to be made or begin.
Notwithstanding anything contained in this paragraph to the contrary,
the following special rules shall govern distributions made under this
Plan;
(iii) A Director shall be permitted to change the manner in which
the deferred fees are to be distributed by completing a new
Election Form which is delivered to the Bank at least two (2)
calendar years before the calendar year during which occurs
the earlier of the date on which the person ceases to be a
Director or the date on which distribution of the Director's
deferred fees would have been made but for the change in
election; provided, however, that any completed Election Form
which was not received prior to the end of the calendar year
described in this subparagraph (iii) shall be null and void.
(iv) If a Director fails to complete an Election Form, amounts
credited to his or her account shall automatically be
distributed in a single lump sum as soon as practicable after
the January 1 immediately following the date on which the
Director ceases to be a Director.
7. If any Director or former Director (excluding any present Director)
becomes a director, proprietor, officer, partner, or employee of, or
otherwise becomes affiliated with, any bank or savings institution in
the State of Indiana that competes with the Bank, or if a former
Director shall refuse a reasonable request of the Bank to perform
consulting services for it after he or she retires from the Bank's
Board of Directors, any deferred fees and interest remaining payable to
such person under the Plan shall be payable immediately at the option
of the Bank.
8. Each Director may file with the Bank a written designation of one or
more persons as the beneficiaries who shall be entitled to receive any
amounts remaining payable under the Plan after his or her death. The
election shall be made in the form attached hereto as Exhibit B. A
Director from time to time may revoke or change his or her beneficiary
designation without the consent of any prior beneficiary by filing a
new designation with the Bank. The last such designation received by
the Bank shall be controlling; provided, however, that no designation,
or change or revocation thereof, shall be effective unless received by
the Bank prior to the Director's death. If any amount payable under the
Plan at or after the death of the Director cannot be paid to the
Director's designated beneficiary, either because the Director failed
validly to designate a beneficiary or because the beneficiary
designated by the Director is not living at the time the amount becomes
payable, the legal representative of such deceased Director shall
receive the payments. A Director may make a one time and method of
payment election regarding amounts that become payable during his or
her lifetime and different time and method of payment election with
respect to amounts becoming payable after his or her death. Unless a
Director elects otherwise, all amounts becoming payable with respect to
a Director after his or her death shall be paid in one lump sum as of
the January 1 coinciding with or next following such death.
9. Each person receiving a payment under this Plan shall be responsible
for the Federal, state and local income tax consequences of such
payment. Where applicable, the Bank shall withhold taxes from each
distribution.
10. This Plan shall not be deemed to constitute a contract of employment
between the parties hereto, nor shall any provisions hereof restrict
the right of the Bank to discharge the recipient, or restrict the right
of a recipient to terminate his or her employment or status as a
Director.
11. The President of the Bank shall be empowered to place the Plan in
effect under such additional conditions and terms as shall not be
inconsistent with the terms stated above and as shall not jeopardize
the status of the Plan as a deferred compensation plan allowing a
Director of the Bank not to include the deferred amount, including
interest, in gross income under the Federal income tax law until the
taxable year or years such amounts are actually paid.
12. This Plan supersedes any earlier versions of the Plan and shall govern
undistributed deferrals made on or before its January 1, 1999 effective
date.
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EXHIBIT A
LINCOLN FEDERAL SAVINGS BANK
DIRECTORS DEFERRED FEE PLAN
Election to Defer Receipt of Fees
Pursuant to the Unfunded Deferred Compensation Plan for the Directors
of Lincoln Federal Savings Bank (the "Plan"), the undersigned Director hereby
elects to defer receipt of the following compensation to be earned as a
Director:
My election shall take effect as follows:
[ ] beginning January 1 of the year following this election.
[ ] beginning immediately as to all fees not yet earned. [Note:
This may be elected only if the Plan did not exist or the
Director was not a Director on January I of the Year of this
election.)
Distributions from the Plan shall be made according to the following
method:
[ ] lump sum payment.
[ ] monthly installments (number of installments not to be less
than 60 nor exceed 120).
[ ] annual installments (number of installments not to be less
than 5 nor exceed 10).
Distributions from the Plan to me shall be made or commence as of the
January 1 coinciding with or next following:
[ ] the date on which I cease to be a director, officer or
employee of the Bank.
[ ] the date on which I attain my Social Security retirement age.
[ ] the earlier of the foregoing dates.
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[ ] the later of such foregoing dates.
Distributions from the Plan after my death shall be made according to
the following method and at the following times:
[ ] lump sum payment
[ ] monthly installments commencing as of the January 1 coinciding
with or next following such death (number of installments not
to exceed 120). [Note: If installment payments commence before
the Director's death, Payment to the Director's beneficiary or
legal representative will commence as of the next date after
such death as of which an installment would have been payable
to the Director but for such death, and the number of months
specified will be reduced by the number of monthly
installments that become payable before such death and the
monthly equivalent of the number of annual installments that
became payable before such death.)
[ ] annual installments commencing as of the January 1 coinciding
with or next following my death (number of installments not to
exceed 10). [Note: If installment payments commence before the
Director's death, the number of years specified will be
reduced by the number of annual installments that became
payable before such death and the annual equivalent of the
number of monthly installments that became payable before such
death.)
DATED:
Director's Signature
Lincoln Federal Savings Bank hereby acknowledges receipt of the
foregoing Election to Defer Receipt of Fees.
LINCOLN FEDERAL SAVINGS BANK
DATED: By:
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EXHIBIT B
LINCOLN FEDERAL SAVINGS BANK
DIRECTORS DEFERRED FEE PLAN
DESIGNATION OF BENEFICIARY
In accordance with the provisions of the Lincoln Federal Savings Bank
Directors Deferred Fee Plan (the "Plan"), and subject to the conditions on the
next page hereof, the undersigned Director hereby designates the following as
the beneficiary or beneficiaries of any amounts payable under the Plan upon or
after his or her death, and hereby revokes all prior beneficiary designations,
if any, made by him or her:
PRIMARY BENEFICIARIES: [List name, relationship to Participant,
---------------------- mailing address and
(if available) Social Security Number of each]
CONTINGENT BENEFICIARIES: [List name, relationship to Participant,
------------------------- mailing address and(if available) Social
Security Number of each]
DATE:
Director's Signature
Signature of Witness
(Someone Other Than Director)
Address of Witness
CONDITIONS
1. Unless otherwise provided on the preceding page of this designation,
each payment to be made pursuant to this designation shall be paid in equal
shares to those primary beneficiaries who survive the Director and are living at
the time such payment becomes due or, if no primary beneficiaries survive the
Director and are then living, in equal shares to those contingent beneficiaries
who survive the Director and are then living.
2. Unless otherwise provided on the preceding page of this designation,
this designation shall automatically be revoked and be of no further force or
effect in the event of either of the following contingencies occurring
subsequent to the date hereof.
(a) The marriage of the Director, unless the marriage is
to the sole primary beneficiary designated by this
designation; or
(b) The termination of the Director's marriage, by
dissolution, divorce or annulment, unless (i) the
former spouse is not designated by this designation
as a primary beneficiary or contingent beneficiary
and (ii) no trust of which the former spouse is a
beneficiary is designated by this designation as a
primary beneficiary or contingent beneficiary.
3. The right to change this designation without the consent of any
primary or contingent beneficiary is reserved.
Lincoln Federal Savings Bank hereby acknowledges receipt of this Designation of
Beneficiary.
LINCOLN FEDERAL SAVINGS BANK
DATE: By:
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