Lake City Bank

 

Amended and Restated

Deferred Compensation Plan

 

Effective December 9, 2008

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

TABLE OF CONTENTS

 

Page

ARTICLE 1 Definitions

1

ARTICLE 2 Selection, Enrollment, Eligibility

6

ARTICLE 3 Deferral Commitments/Vesting/Crediting/Taxes

8

ARTICLE 4 Deduction Limitation

11

ARTICLE 5       In-Service Distribution; Unforeseeable Financial Emergencies;
Withdrawal Election

12

ARTICLE 6 Distributions

14

ARTICLE 7 Retirement Benefit

16

ARTICLE 8 Termination Benefit

16

ARTICLE 9 Disability Benefit

16

ARTICLE 10 Survivor Benefit

16

ARTICLE 11 Beneficiary Designation

17

ARTICLE 12 Leave of Absence

18

ARTICLE 13 Termination, Amendment or Modification

18

ARTICLE 14 Administration

20

 

ARTICLE 15 Other Benefits and Agreements

21

ARTICLE 16 Claims Procedures

21

ARTICLE 17 Trust

24

ARTICLE 18 Miscellaneous

24

 

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

LAKE CITY BANK

AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

Effective December 9, 2008

 

Purpose

 

The purpose of this Plan is to provide specified benefits to a select group of
management or highly compensated Employees who contribute materially to the
continued growth, development and future business success of Lake City Bank, an
Indiana state bank with its main office in Warsaw, Indiana, and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA. The Plan is intended to
comply with all applicable law, include Code Section 409A and related Treasured
guidance and Regulations, and shall be operated and interpreted in accordance
with this intention.

This Plan was originally adopted effective January 1, 2004 and is hereby amended
and restated in its entirety December 9, 2008. This Plan is intended to comply
with Section 409A in its entirety and has at all times since January 1, 2005
been operated in good faith compliance with Section 409A. This Plan shall apply
only with respect to amounts deferred or vested on or after January 1, 2005.

ARTICLE 1

Definitions

For the purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:

1.1

“Account Balance” shall mean, with respect to a Participant, a credit on the
records of the Employer equal to the Deferral Account balance. The Account
Balance, and each other specified account balance, shall be a bookkeeping entry
only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her
designated Beneficiary, pursuant to this Plan.

1.2

“Annual Deferral Amount” shall mean that portion, expressed as a stated dollar
amount or a percentage as may be permitted on the applicable Election Form as
approved and provided by the Committee, of a Participant's Base Salary, Bonus or
LTIP Amount that a Participant defers in accordance with ARTICLE 3 for any one
Plan Year. In the event of a Participant's Retirement, death or a Cessation of
Employment prior to the end of a Plan Year, such year's Annual Deferral Amount
shall be the actual amount withheld prior to such event.

 

1.3

“Annual Installment Method” shall be an annual installment payment over the
number of years selected by the Participant in accordance with this Plan,
calculated as follows: (i) for the first annual installment, the Account Balance
of the Participant shall be calculated as of the close of business on or around
the last business day of the Plan Year in which the Participant Retires or is
deemed to have Retired in accordance with Section 9.2, as determined by the
Committee in its sole discretion, and (ii) for remaining annual installments,
the Account Balance of the Participant shall be calculated on every applicable
anniversary of the last business day of the Plan Year in which the Participant
Retires or is deemed to have Retired in accordance with Section 9.2. Each annual
installment shall be calculated by multiplying this balance by a fraction, the
numerator of which is one and the denominator of which is the remaining number
of annual payments due to the Participant.

 

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

1.4

“Bank” shall mean Lake City Bank, an Indiana state bank, and any successor to
all or substantially all of the Bank’s assets or business.

1.5

“Base Salary” shall mean the annual cash compensation relating to services
performed for the Employer during any calendar year, excluding distributions
from nonqualified deferred compensation plans, Bonuses, commissions, overtime,
fringe benefits, relocation expenses, incentive payments, stock options,
restricted stock, stock appreciation rights, and other equity or non-cash
incentive based awards, non-monetary awards, director fees and other fees,
automobile and other allowances paid to a Participant for employment services
rendered (whether or not such allowances are included in the Employee’s gross
income) and any extraordinary items of compensation. Base Salary shall be
calculated before reduction for compensation voluntarily deferred or contributed
by the Participant pursuant to all qualified or non-qualified plans of the
Employer and shall be calculated to include amounts not otherwise included in
the Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or
403(b) pursuant to plans established by the Employer; provided, however, that
all such amounts will be included in Base Salary only to the extent that had
there been no such plan, the amount would have been payable in cash to the
Employee.

1.6

“Beneficiary” shall mean one or more persons, trusts, estates or other entities,
designated in accordance with ARTICLE 11, that are entitled to receive benefits
under this Plan upon the death of a Participant.

1.7

“Beneficiary Designation Form” shall mean the form established from time to time
by the Committee that a Participant completes signs and returns to the Committee
to designate one or more Beneficiaries.

1.8

“Benefit Distribution Date” shall have the meaning set forth in 6.1.

1.9

“Board” shall mean the board of directors of the Bank.

1.10

“Bonus” shall mean compensation related to services performed for the Employer
during a calendar year, as approved by the Committee in its sole discretion,
under any annual bonus or cash incentive plans, excluding any earnings that
result from or are related to the grant, award or exercise of stock options,
restricted stock, stock appreciation rights, other equity based awards and all
other non-cash incentive based awards.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

1.11

“Cessation of Employment” shall mean the severing of employment with the
Employer, voluntarily or involuntarily, for any reason other than Retirement,
Disability, death or an authorized leave of absence; provided that such
cessation of employment qualifies as a separation from service under Section
409A.

1.12

“Change in Control” shall mean:

 

(a)

The date of the consummation of the acquisition by any “person” (as such term is
defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (“1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of Lakeland Financial
Corporation (the “Company”); or

 

(b)

The date that individuals who, as of date hereof, are members of the board of
directors of the Company (the “Company Board”) cease for any reason to
constitute a majority of the Company Board, unless the election, or nomination
for election by the Company stockholders, of a new Company director was approved
by a vote of a majority of the Company Board, and such new director shall, for
purposes of this Plan, be considered as a member of the Company Board; or

 

(c)

The date of the consummation by the Company of (i) a merger or consolidation of
the Company, if the Company stockholders immediately before such merger or
consolidation, do not, as a result of such merger or consolidation, own directly
or indirectly, more than fifty percent (50%) of the combined voting power of the
then outstanding voting securities of the entity resulting from such merger or
consolidation, in substantially the same proportion as their ownership of the
combined voting power of the voting securities of the Company outstanding
immediately before such merger or consolidation or (ii) a complete liquidation
or dissolution or an agreement for the sale or other disposition of all or
substantially all of the assets of the Company.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because fifty percent (50%) or more of the combined voting power of the
then outstanding securities of the Company is acquired by (i) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
for employees of the entity or (ii) any corporation which, immediately prior to
such acquisition, is owned directly or indirectly by the stockholders of the
Company in substantially the same proportion as their ownership of stock of the
Company immediately prior to such acquisition.

 

In the event that any benefit under the Plan constitutes Deferred Compensation
(as defined in Section 409A) and the settlement of or distribution of benefits
under this Plan is to be triggered by a Change in Control, then such settlement
or distribution shall be subject to the event constituting the Change in Control
also constituting a “change in control event’ permitted under Section 409A.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

1.13

“Claimant” shall have the meaning set forth in Section 16.1.

1.14

“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from
time to time, and the regulations promulgated thereunder from time to time.

1.15

“Committee” shall mean the committee described in ARTICLE 13.

1.16

“Deduction Limitation” shall mean the limitation on a benefit that may otherwise
be distributable pursuant to the provisions of this Plan, as set forth in
ARTICLE 4.

1.17

“Deferral Account” shall mean (i) the sum of all of a Participant's Annual
Deferral Amounts, plus (ii) amounts credited or debited to the Participant’s
Deferral Account in accordance with this Plan, less (iii) all distributions made
to the Participant or his or her Beneficiary pursuant to this Plan that relate
to his or her Deferral Account.

1.18

“Director” shall mean any member of the Board.

1.20

“Disability Benefit” shall mean the benefit set forth in ARTICLE 9.

1.21

“Effective Date” means December 9, 2008; provided, however, that if any change
pursuant to the amendment and restatement of this Plan constitute a change in
the form or timing of distributions under Section 409A, such changes shall be
effective as of January 1, 2009.

1.22

“Election Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee to
make an election under the Plan for deferrals and to designate the time and form
of payment.

1.23

“Employee” shall mean a person who is an employee of an Employer, as determined
by the Committee.

1.24

“Employer” shall mean the Bank and/or any of its subsidiaries or parent company
(now in existence or hereafter formed or acquired).

1.25

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time, and the regulations promulgated thereunder
from time to time.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

1.26

“In-Service Distribution” shall mean the distribution set forth in Section 5.1.

1.27

“LTIP Amounts” shall mean any portion of the compensation attributable to a Plan
Year that is earned by a Participant under the Lakeland Financial Corporation
Long Term Cash Incentive Plan.

1.28

“Participant” shall mean any Employee (i) who is selected to participate in the
Plan, (ii) who elects to participate in the Plan, (iii) who signs a Plan
Agreement, an Election Form and a Beneficiary Designation Form, (iv) whose
signed Plan Agreement, Election Form and Beneficiary Designation Form are
accepted by the Committee, (v) who commences participation in the Plan, and (vi)
whose Plan Agreement has not terminated. A spouse or former spouse of a
Participant shall not be treated as a Participant in the Plan or have an account
balance under the Plan, even if he or she has an interest in the Participant's
benefits under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce. Exclusively for purposes of this
Plan, a person shall remain an Employee without interruption or Cessation of
Service if the person is transferred to or from the Bank and any of its
subsidiaries.

1.29

“Plan” shall mean the Lake City Bank Deferred Compensation Plan, which shall be
evidenced by this instrument and by each Plan Agreement, as they may be amended
from time to time.

1.30

“Plan Agreement” shall mean a written agreement in the form prescribed by or
acceptable to the Committee that evidences a Participant’s agreement to the
terms of the Plan and which may establish additional terms or conditions of Plan
participation for a Participant. A Plan Agreement may, in the Committee’s sole
discretion, provide for differing distribution elections for separate Plan
Years. Unless otherwise determined by the Committee, the most recent Plan
Agreement accepted with respect to a Participant shall supercede any prior Plan
Agreements for such Participant.

1.31

“Plan Year” shall mean a period beginning on January 1 of each calendar year and
continuing through December 31 of such calendar year.

1.32

“Retirement,” “Retire(s)” or “Retired” shall mean Cessation of Employment from
all Employers for any reason other than a leave absence, death or Disability on
or after the earlier of the attainment of age fifty-five (55) with ten (10)
Years of Service.

1.33

“Retirement Benefit” shall mean the benefit set forth in ARTICLE 7.

1.34

“Section 409A” shall mean Code Section 409A, and any U.S. Treasury Department
regulations and guidance promulgated thereunder, including such regulations and
guidance promulgated after the effective date of the Plan as deemed appropriate
by the Committee.

1.35

“Specified Employee” shall mean any Participant who is a “key employee” (as
defined in Code Section 416(i) without regard to paragraph (5) thereof), as
determined by the Committee based upon the 12-month period ending on each
December 31st (such 12-month period is referred to below as the “identification
period”). All Participants who are determined to be key employees under Code
Section 416(i) (without regard to paragraph (5) thereof) during the
identification period shall be treated as Specified Employees for purposes of
the Plan during the 12-month period that begins on April 1st following the close
of such identification period. For purposes of determining whether an individual
is a key employee under Code Section 416(i), “Compensation” shall mean such
individual’s W-2 compensation as reported by the Employer for a particular
calendar year.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

1.36

“Survivor Benefit” shall mean the benefit set forth in ARTICLE 10.

1.37

“Termination Benefit” shall mean the benefit set forth in ARTICLE 8.

 

1.38

“Trust” shall mean one or more trusts established shall mean one or more trusts
established by the Bank in accordance with ARTICLE 17.

1.39

“Unforeseeable Emergency” shall mean an unanticipated emergency that is caused
by an event beyond the control of the Participant that would result in a severe
financial hardship to the Participant resulting from (i) a sudden and unexpected
illness or accident of the Participant or a dependent of the Participant, (ii) a
loss of the Participant’s property due to casualty, or (iii) such other
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.

1.40

“Years of Service” shall mean the total number of full years in which a
Participant has been employed by one or more Employers. For purposes of this
definition, a year of employment shall be a 365 day period (or 366 day period in
the case of a leap year) that, for the first year of employment, commences on
the Employee's date of hiring and that, for any subsequent year, commences on
the anniversary of that hiring date. The Committee in its discretion may adjust
the hire date of a Participant solely for purposes of this Plan to reflect prior
Years of Service in the event a Participant is re-hired by the Employer. A
partial year of employment shall not be treated as a Year of Service.

ARTICLE 2

Selection, Enrollment, Eligibility

2.1

Selection by Committee. Participation in the Plan shall be limited to a select
group of management and highly compensated Employees of the Employer, as
determined by the Committee in its sole discretion. From that group, the
Committee shall select, in its sole discretion, Employees who may actually
participate in the Plan.

2.2

Enrollment and Eligibility Requirements; Commencement of Participation.

 

(a)

As a condition of participation, each selected Employee 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 a Plan Agreement, an Election Form
and a Beneficiary Designation Form 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.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

 

(b)

A selected Employee who first becomes eligible to participate in this Plan after
the first day of a Plan Year and who is not otherwise prohibited from making an
election under this subsection (b) by operation of the plan aggregation
requirements of Section 409A, must complete, execute and return to the Committee
a Plan Agreement, an Election Form and a Beneficiary Designation Form within
thirty (30) days after he or she 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 such event, such person’s participation in this Plan shall not commence
earlier than the date determined by the Committee pursuant to Section 2.2(c) and
such person shall not be permitted to defer under this Plan any portion of his
or her Base Salary, Bonus or LTIP Amounts that are paid with respect to services
performed prior to his or her participation commencement date, except to the
extent permissible under Section 409A.

 

(c)

Each selected Employee 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 Employee has met all enrollment requirements set forth in
this Plan and required by the Committee, including returning all required
documents to the Committee within the specified time period. Notwithstanding the
foregoing, the Committee shall process such Participant’s deferral election as
soon as administratively practicable after such deferral election is submitted
to and accepted by the Committee.

 

(d)

Notwithstanding the foregoing provisions of this Section 2.2, if the Participant
was eligible to participate in any other account balance plans sponsored by the
Plan (as referenced in Section 409A) prior to becoming eligible to participate
in this Plan, the initial election to defer Base Salary, Bonuses and LTIP
Amounts under this Plan shall not be effective until the Plan Year following the
Plan Year in which the Participant became eligible to participate in this Plan.

 

(e)

If an Employee fails to meet all requirements contained in this Section 2.2
within the period required, that Employee shall not be eligible to participate
in the Plan during such Plan Year.

2.3

Termination of Participation and/or Deferrals. If the Committee determines in
good faith that a Participant no longer qualifies as a member of a select group
of management or highly compensated employees, as membership in such group is
determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA,
the Committee shall have the right, in its sole discretion and to the extent
permitted by Section 409A, to (i) terminate any deferral election the
Participant has made for the remainder of the Plan Year in which the Committee
makes such determination, (ii) prevent the Participant from making future
deferral elections and/or (iii) take further action that the Committee deems
appropriate or necessary. Notwithstanding the foregoing, in the event of a
termination of the Plan in accordance with Section 13.1, the termination of the
affected Participants’ eligibility for participation in the Plan shall not be
governed by this Section 2.3, but rather shall be governed by ARTICLE 13. In the
event that a Participant is no longer eligible to defer compensation under this
Plan, the Participant’s Account Balance shall continue to be governed by the
terms of this Plan until such time as the Participant’s Account Balance is paid
in accordance with the terms of this Plan.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

ARTICLE 3

Deferral Commitments/Vesting/Crediting/Taxes

3.1

Minimum Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, a portion of Base Salary, Bonus
and/or LTIP Amounts in a minimum amount of one thousand dollars ($1,000). If a
Participant elects less than the stated minimum amount or except as provided in
Section 3.3 if a Participant fails to make an election, the amount deferred
shall be zero (“0.00”).

3.2

Maximum Deferral.

 

(a)

Maximum Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, a portion of Base Salary, Bonus
and/or LTIP Amounts up to the following maximum percentages for each deferral
elected:

Deferral

Minimum Amount

Base Salary

50%

Bonus

80%

LTIP

80%

 

(b)

Short Plan Year. Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, the maximum Annual Deferral
Amount (i) with respect to Base Salary shall be limited to the amount of
compensation not yet earned by the Participant as of the date the Participant
submits a Plan Agreement and Election Form to the Committee for acceptance, and
(ii) with respect to Bonus, shall be limited to those amounts deemed eligible
for deferral, in the sole discretion of the Committee.

3.3

Timing of Deferral Elections; Effect of Election Form.

 

(a)

First Plan Year. In connection with a Participant's commencement of
participation in the Plan, the Participant shall complete an Election Form,
along with such other elections as the Committee deems necessary or desirable
under the Plan. The Election Form must be completed prior to the first day of
the Plan Year or within thirty (30) days of the Employee first becoming eligible
to participate in the Plan if not at the beginning of a Plan Year, 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. For these elections to
be valid, the Election Form must be completed and signed by the Participant,
timely delivered to the Committee (in accordance with Section 2.2 above), and
accepted by the Committee. Once the Election Form is submitted it is irrevocable
and shall remain in effect for the entire Plan Year and all subsequent Plan
Years, unless the Participant submits a revised Election Form prior to the end
of a Plan Year to be effective as of the first day of the subsequent Plan Year,
within the time frame set out by the Committee for completing revised Election
Forms as described in subsection (b).

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

 

(b)

Subsequent Plan Years. For each succeeding Plan Year, the Election Form
completed and filed by the Participant shall remain in effect, unless a
Participant completes a revised Election Form prior to the end of one Plan Year
to be effective as of the first day of the next following Plan Year. The
Committee, in its sole discretion, shall set forth the timeframe for accepting
revised Election Forms, and such other elections as the Committee deems
necessary or desirable under the Plan.

 

(c)

Transition Rules. In a manner consistent with Section 409A, during 2007 and 2008
the Committee may solicit new distribution election forms from Participants in
order for the Participants to change the method or timing of distribution of all
amounts subject to Section 409A, provided such elections are solicited and
properly made prior to December 31, 2007 or December 31, 2008, as applicable. In
the event the Committee elects to solicit new forms under this Section, the
failure by a Participant to submit a complete and timely revised form will
result in the application of the Participant’s most recently submitted and
accepted form.

 

3.4

Withholding and Crediting of Annual Deferral Amounts. For each Plan Year, the
Base Salary portion of the Annual Deferral Amount shall be withheld from each
regularly scheduled Base Salary payroll in equal amounts, as adjusted from time
to time for increases and decreases in Base Salary. The portions of Bonus and/or
LTIP Amount of the Annual Deferral Amount shall be withheld at the time the
Bonus or LTIP Amount are or otherwise would be paid to the Participant, whether
or not this occurs during the Plan Year itself. Annual Deferral Amounts shall be
credited to a Participant’s Deferral Account at the time such amounts would
otherwise have been paid to the Participant.

3.5

Vesting. A Participant shall at all times be 100% vested in that portion of his
or her Deferral Account representing the Participant’s Annual Deferral Amounts.

3.6

Crediting/Debiting of Account Balances. In accordance with, and subject to, the
rules and procedures that are established from time to time by the Committee, in
its sole discretion, amounts shall be credited or debited to a Participant's
Account Balance in accordance with the following rules:

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

 

(a)

Measurement Funds. Subject to the restrictions found in Section 3.6(b) below,
the Participant may elect one or more of the measurement funds selected by the
Committee, in its sole discretion, which are based on certain mutual funds (the
“Measurement Funds”), for the purpose of crediting or debiting additional
amounts to his or her Account Balance. As necessary, the Committee may, in its
sole discretion, discontinue, substitute or add a Measurement Fund. Each such
action will take effect as of the first day of the first calendar quarter that
begins at least thirty (30) days after the day on which the Committee gives
Participants advance written notice of such change.

 

(b)

Election of Measurement Funds. Subject to the restrictions found in this Section
3.6(b), a Participant, in connection with his or her initial deferral election
in accordance with Section 3.3(a) above, shall elect, on the Election Form, one
or more Measurement Fund(s) (as described in Section 3.6(a) above) to be used to
determine the amounts to be credited or debited to his or her Account Balance.
If a Participant does not elect any of the Measurement Funds as described in the
previous sentence, the Participant’s Account Balance shall automatically be
allocated into the lowest-risk Measurement Fund, as determined by the Committee,
in its sole discretion. Subject to the restrictions found in this Section 3.6(b)
below, the Participant may (but is not required to) elect, by submitting an
Election Form to the Committee that is accepted by the Committee, to add or
delete one or more Measurement Fund(s) to be used to determine the amounts to be
credited or debited to his or her Account Balance, or to change the portion of
his or her Account Balance allocated to each previously or newly elected
Measurement Fund. If an election is made in accordance with the previous
sentence, it shall apply as of the first business day deemed reasonably
practicable by the Committee, in its sole discretion, and shall continue
thereafter for each subsequent day in which the Participant participates in the
Plan, unless changed in accordance with the previous sentence.

 

(c)

Proportionate Allocation. In making any election described in Section 3.6(b)
above, the Participant shall specify on the Election Form, in increments of one
percent (1%), the percentage of his or her Account Balance to be allocated to a
Measurement Fund (as if the Participant was making an investment in that
Measurement Fund with that portion of his or her Account Balance).

 

(d)

Crediting or Debiting Method. The performance of each Measurement Fund (either
positive or negative) will be determined by the Committee, in its sole
discretion on a daily basis based on the manner in which such Participant’s
Account Balance has been hypothetically allocated among the Measurement Funds by
the Participant.

 

(e)

No Actual Investment. Notwithstanding any other provision of this Plan that may
be interpreted to the contrary, the Measurement Funds are to be used for
measurement purposes only, and a Participant's election of any such Measurement
Fund, the allocation of his or her Account Balance thereto, the calculation of
additional amounts and the crediting or debiting of such amounts to a
Participant's Account Balance shall not be considered or construed in any manner
as an actual investment of his or her Account Balance in any such Measurement
Fund. In the event that the Bank or the Trustee (as that term is defined in the
Trust), in its own discretion, decides to invest funds in any or all of the
investments on which the Measurement Funds are based, no Participant shall have
any rights in or to such investments themselves. Without limiting the foregoing,
a Participant's Account Balance shall at all times be a bookkeeping entry only
and shall not represent any investment made on his or her behalf by the Bank or
the Trust; the Participant shall at all times remain an unsecured creditor of
the Bank.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

3.7

FICA and Other Taxes.

 

(a)

Annual Deferral Amounts. For each Plan Year in which an Annual Deferral Amount
is being withheld from a Participant, the Participant’s Employer(s) shall
withhold from that portion of the Participant’s Base Salary, Bonus and/or LTIP
Amounts that are not being deferred, in a manner determined by the Employer(s),
the Participant’s share of FICA and other employment taxes on such Annual
Deferral Amount.

 

(b)

Distributions. The Participant’s Employer(s), or the trustee of the Trust, shall
withhold from any payments made to a Participant under this Plan all federal,
state and local income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection with such payments,
in amounts and in a manner to be determined in the sole discretion of the
Employer(s) and the trustee of the Trust.

ARTICLE 4

Deduction Limitation

4.1

Deduction Limitation on Benefit Payments. If an Employer determines in good
faith prior to a Change in Control that there is a reasonable likelihood that
any payments to a Participant for a taxable year of the Employer would not be
deductible by the Employer solely by reason of the limitation under Code Section
162(m), then to the extent deemed necessary by the Employer to ensure the entire
amount of any distribution to the Participant pursuant to this Plan prior to the
Change in Control is deductible, the Employer may defer all or any portion of a
distribution under this Plan, provided that all scheduled payments that are
permitted to be delayed pursuant to this ARTICLE 4 are delayed. Any amounts
deferred pursuant to this limitation shall continue to be credited/debited with
additional amounts in accordance with Section 3.5, even if such amount is being
paid out in installments. The amounts so deferred and amounts credited thereon
shall be distributed to the Participant or his or her Beneficiary (in the event
of the Participants’ death) at the earliest of the following events: (i) the
earliest possible date, as determined by the Employer in good faith, on which
the deductibility of the payments hereunder to the Participant for the taxable
year of the Employer during which the distribution is made will not be limited
by Code Section 162(m); (ii) the effective date of a Change in Control; or
(iii) the effective date of the Participant’s Cessation of Employment,
Retirement, Disability or death provided that, subject to Section 6.3(c),
payment is made no later than the 15th day of the third month following such
event. Notwithstanding anything to the contrary in this Plan, the Deduction
Limitation shall not apply to any distributions made after a Change in Control.

 

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ARTICLE 5

In-Service Distribution; Unforeseeable Financial Emergencies;

Withdrawal Election

5.1

In-Service Distribution. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive an In-Service
Distribution from the Plan with respect to all or a portion of the Annual
Deferral Amount. The In-Service Distribution shall be a lump sum payment in an
amount that is equal to the portion of the Annual Deferral Amount that the
Participant elected to have distributed as an In-Service Distribution, plus
amounts credited or debited in the manner provided in Section 3.6(d) above on
that amount, calculated as of the close of business on or around the date on
which the In-Service Distribution becomes payable, as determined by the
Committee in its sole discretion. Subject to the other terms and conditions of
this Plan, each In-Service Distribution elected shall be paid out during a sixty
(60) day period commencing immediately after the first day of any Plan Year
designated by the Participant. The Plan Year designated by the Participant must
be at least three Plan Years after the end of the Plan Year in which the Annual
Deferral Amount is actually deferred. By way of example, if an In-Service
Distribution is elected for Annual Deferral Amounts that are deferred in the
Plan Year commencing January 1, 2007, the earliest possible In-Service
Distribution would become payable during a sixty (60) day period commencing
January 1, 2011. Once a Participant elects to receive an In-Service Distribution
from the Plan for a given Plan Year such In-Service Distribution election shall
remain in effect for all subsequent Plan Years until a revised Election Form is
received by the Committee. Provided, however, if the Participant has elected to
receive his or her In-Service Distribution on a date more than three Plan Years
after the end of the Plan Year in which the Annual Deferral Amount is actually
deferred, such Participant shall be deemed to have elected to receive an
In-Service Distribution of all subsequent future deferral amounts on the first
day of the Plan Year that is three Plan Years after the end of the Plan Year in
which the deferral occurs.

5.2

Other Benefits Take Precedence Over In-Service Distributions. Should an event
occur that triggers a benefit under ARTICLE 7, ARTICLE 8, ARTICLE 9, or ARTICLE
10, any Annual Deferral Amount, plus amounts credited or debited thereon, that
is subject to an In-Service Distribution election under Section 5.1 shall not be
paid in accordance with Section 5.1 but shall be paid in accordance with the
other applicable Article.

5.3

Withdrawal Payout/Election Cancellation for Unforeseeable Emergencies.

 

(a)

If the Participant experiences an Unforeseeable Emergency, the Participant may
petition the Committee to receive a partial or full payout from the Plan. The
Participant shall only receive a payout from the Plan to the extent such payout
is deemed necessary by the Committee to satisfy the Participant’s Unforeseeable
Emergency. If the Committee approves a payout from the Plan as permitted herein,
the Participant’s deferral election for the remainder of that Pan Year shall be
terminated and the Participant shall not be eligible to participate in the Plan
for the immediately following Plan Year.

 

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Amended and Restated

Deferred Compensation Plan

 

 

(b)

The payout shall not exceed the lesser of (i) the portion of the Participant's
vested Account Balance which is attributable to his or her Deferral Account,
calculated as of the close of business on or around the date on which the amount
becomes payable, as determined by the Committee in its sole discretion, or (ii)
the amount necessary to satisfy the Unforeseeable Emergency. Notwithstanding the
foregoing, a Participant may not receive a payout from the Plan to the extent
that the Unforeseeable Emergency is or may be relieved (A) through reimbursement
or compensation by insurance or otherwise, or (B) by liquidation of the
Participant’s assets (other than tax-qualified retirement assets), to the extent
the liquidation of such assets would not itself cause severe financial hardship.

 

(c)

If the Committee, in its sole discretion, approves a Participant’s petition for
payout, the Participant’s deferrals under this Plan shall be cancelled for the
remainder of the Plan Year as of the date of such approval and the Participant
shall receive a payout from the Plan within sixty (60) days of the date of such
approval.

 

(d)

Notwithstanding the foregoing, the Committee shall interpret all provisions
relating to a payout due to an Unforeseeable Emergency and Election Cancellation
under this Section 5.3 in a manner that is consistent with Section 409A.

ARTICLE 6

Distributions

6.1

Benefit Distribution Date. A Participant’s Benefit Distribution Date shall be
the earliest to occur of the following dates:

 

(a)

The last day of the Plan Year in which the Participant Retires as provided in
ARTICLE 7;

 

(b)

The last business day of the Plan Year in which the Participant incurs a
Cessation of Employment as provided in ARTICLE 8;

 

(c)

The date the Participant dies;

 

(d)

The date the Committee deems the Disabled Participant has terminated employment
or Retired; or

 

(e)

The date specified by the Participant for an In-Service Distribution as provided
in Section 5.1.

6.2

Limited Cashouts. Notwithstanding the foregoing provisions of this Section 6.1,
if a Participant’s Account Balance, taking into account any other nonqualified
deferred compensation that must be aggregated with this Plan pursuant to Section
409A; at the time of his or her Retirement or Cessation of Employment is not
greater than the applicable dollar limit under Code Section 401(g)(1)(B)
($15,500 for the calendar year 2008), the Account Balance (applying the plan
aggregation rules of Section 409A) shall be paid to the Participant in a lump
sum payment on or before the later of: (i) December 31st of the calendar year in
which the Participant Retires or incurs a Cessation of Service; or (ii) the 15th
day of the third month following the Participant’s Retirement or Cessation of
Service. Upon the date of payment pursuant to this Section 6.1, the Participant
shall have no further interest under the Plan or any similar deferred
compensation arrangements, as defined under Code Section 409A and the
regulations promulgated thereunder, with the Bank.

 

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Amended and Restated

Deferred Compensation Plan

 

6.3

Time of Distribution. Distributions pursuant to this Plan shall be paid in
accordance with ARTICLE 5, ARTICLE 7, ARTICLE 8, ARTICLE 9 or ARTICLE 10,
provided that:

 

(a)

Any distribution to be made in a lump sum shall be paid no later than sixty (60)
days after the Participant’s Benefit Distribution Date;

 

(b)

Any distributions to be made in annual installments shall commence no later than
sixty (60) days after the Participant’s Benefit Distribution Date, and
thereafter shall be made annually no later than sixty (60) days after each
anniversary of the Participant’s Benefit Distribution Date;

 

(c)

Notwithstanding the foregoing, if the Participant is a Specified Employee and
the Benefit Distribution Date is determined pursuant to Section 6.1(a) or
Section 6.1(b), then distribution of such Participant’s Accounts shall not be
made or commence prior to the date six (6) months after such Benefit
Distribution Date at which time the accumulated amounts owed to date shall be
paid and then the remaining payments shall be paid as scheduled; and

 

(d)

To the extent the Participant has a choice of distribution methods and the
Participant does not make such election, then such Participant shall be deemed
to have elected to receive his or her benefit in a lump sum.

6.4

Change to Election Forms. A Participant may delay the Benefit Distribution Date
or change the form of payment of the Participant’s Account by submitting a new
Election Form to the Committee in accordance with the following criteria:

 

 

(a)

The election to modify the time or form of distribution shall have no effect
until at least twelve (12) months after the date on which the new election is
made;

 

(b)

With respect to payments, other than as described in Section 5.3 (Unforeseeable
Emergency), Section 9.2 (Disability) or Section 10.2 (death), the first payment
pursuant to the modified election shall be delayed for a period of not less than
five (5) years from the Participant’s originally scheduled Benefit Distribution
Date; and

 

(c)

With respect to payments described in Section 5.1 (In-Service Distribution), the
new election may not be made less than twelve (12) months prior to the first
scheduled payment under the Participant’s originally scheduled Benefit
Distribution Date.

 

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(d)

Notwithstanding the foregoing, the Committee shall interpret all provisions
relating to changing an election under this Section 6.4 in a manner that is
consistent with Section 409A. To the extent the Committee determines such an
election to be inconsistent with Section 409A, the election shall not be
effective.

 

(e)

Subject to subsection (c) above and the applicability of subsection (f) below,
the Election Form most recently accepted by the Committee shall govern the
payout of any benefit.

 

(f)

In a manner that is consistent with Section 409A, during 2008 the Committee may
solicit new Election Forms from participants in order for the Participants to
change the method or timing of distributions of all amounts subject to Section
409A, provided such elections are solicited and properly made prior to December
31, 2008. In the event the Committee elects to solicit new Election Forms under
this Section, the failure by the Participant to submit a complete and timely
Election Form will result in the application of the default provisions of
Section 6.3(d).

ARTICLE 7

Retirement Benefit

7.1

Retirement Benefit. A Participant who Retires shall receive, as a Retirement
Benefit, his or her Account Balance, calculated as of the close of business on
or around the Participant’s Benefit Distribution Date, as determined by the
Committee in its sole discretion.

7.2

Payment of Retirement Benefit. A Participant, in connection with each election
to defer Annual Deferral Amounts, shall elect on an Election Form to receive the
Retirement Benefit, subject to Section 6.2, in a lump sum or pursuant to an
Annual Installment Method of up to ten (10) years. The Retirement Benefit shall
be paid as provided in ARTICLE 6.

ARTICLE 8

Termination Benefit

8.1

Termination Benefit. A Participant who experiences a Cessation of Employment
shall receive a Termination Benefit, which shall be equal to the Participant's
Account Balance, calculated as of the close of business on or around the
Participant’s Benefit Distribution Date, as determined by the Committee in its
sole discretion.

8.2

Payment of Termination Benefit. The Termination benefit shall be paid to the
Participant in a lump sum.

ARTICLE 9

Disability Benefit

9.1

Disability Benefit. Upon a Participant’s Disability and subsequent termination
of employment prior to Retirement, the Participant shall receive a Disability
Benefit, which shall be equal to the Participant’s Account Balance, calculated
as of the close of business on or around the Participant’s Benefit Distribution
Date.

 

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Deferred Compensation Plan

 

9.2

Payment of Disability Benefit. A Disabled Participant shall receive his or her
Disability benefit in a lump sum payment no later than sixty (60) days after the
Participant’s Benefit Distribution Date. Notwithstanding the foregoing, if the
Participant is eligible for Retirement as of his or her Benefit Distribution
Date, the Participant is deemed to have Retired shall be paid in the same manner
as if the Participant had instead Retired. The Disability Benefit shall be paid
as provided in ARTICLE 6.

ARTICLE 10

Survivor Benefit

10.1

Survivor Benefit. If a Participant dies prior to the complete distribution of
his or her Account Balance, the Participant's Beneficiary(ies) shall receive a
Survivor Benefit which will be equal to the Participant's vested Account
Balance, calculated as of the close of business on the first business day
following the date of the Participant's death.

10.2

Payment of Survivor Benefit. The Survivor Benefit shall be paid to the
Participant’s Beneficiary(ies) in a lump sum payment provided that the Committee
has been provided with proof that is satisfactory to the Committee of the
Participant’s death.

ARTICLE 11

Beneficiary Designation

11.1

Beneficiary. Each Participant shall have the right, at any time, to designate
his or her Beneficiary(ies) (both primary as well as contingent) to receive any
benefits payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of an Employer
in which the Participant participates.

11.2

Beneficiary Designation; Change of Beneficiary Designation. A Participant shall
designate his or her Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated agent. A
Participant shall have the right to change a Beneficiary by completing, signing
and otherwise complying with the terms of the Beneficiary Designation Form and
the Committee's rules and procedures, as in effect from time to time. If the
Participant designates someone other than his or her spouse as a Beneficiary,
the Committee may, in its sole discretion, determine that spousal consent is
required to be provided on a form designated by the Committee and subject to
such requirements as the Committee shall determine. Upon the acceptance by the
Committee of a new Beneficiary Designation Form, all Beneficiary Designation
Forms previously filed shall be cancelled. The Committee shall be entitled to
rely on the last Beneficiary Designation Form filed by the Participant and
accepted by the Committee prior to his or her death.

 

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Amended and Restated

Deferred Compensation Plan

 

 

11.3

Acknowledgment. No designation or change in designation of a Beneficiary shall
be effective until received and acknowledged in writing by the Committee or its
designated agent.

11.4

No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 11.1, 11.2 and 11.3 above or, if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant's benefits, then the Participant's designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant's estate.

11.5

Doubt as to Beneficiary. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Plan, the Committee shall have
the right, exercisable in its discretion, to cause the Participant's Employer to
withhold such payments until this matter is resolved to the Committee's
satisfaction.

11.6

Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the Committee
from all further obligations under this Plan with respect to the Participant,
and that Participant's Plan Agreement shall terminate upon such full payment of
benefits.

ARTICLE 12

Leave of Absence

12.1

Paid Leave of Absence. If a Participant is authorized by the Employer to take a
paid leave of absence from the employment of the Employer, (i) the Partici­pant
shall continue to be considered eligible for the benefits provided in ARTICLE 3,
ARTICLE 5, ARTICLE 7, ARTICLE 8, ARTICLE 9 or ARTICLE 10 in accordance with the
provisions of those Articles, (ii) the Annual Deferral Amount shall continue to
be withheld during such paid leave of absence in accordance with Section 3.2 (to
the extent that any Base Salary, Bonus or LTIP Amount is being paid, and
proportionately adjusted in the case that Base Salary, Bonus or LTIP Amount has
been impacted by such leave of absence, as permitted under Section 409A), and
(iii) the Participant shall not be deemed to have had a Cessation of Employment.

12.2

Unpaid Leave of Absence. If a Participant is authorized by the Participant's
Employer to take an unpaid leave of absence from the employ­ment of the Employer
for any reason, such Participant shall continue to be eligible for the benefits
provided in ARTICLE 3, ARTICLE 5, ARTICLE 7, ARTICLE 8, ARTICLE 9 or ARTICLE 10
in accordance with the provisions of those Articles and shall not be deemed to
have had a Cessation of Employment. However, to the extent permitted under
Section 409A, the Participant shall be excused from fulfilling his or her Annual
Deferral Amount commitment that would otherwise have been withheld during the
remainder of the Plan Year in which the unpaid leave of absence is taken. During
the unpaid leave of absence, the Participant shall not be allowed to make any
additional deferral elections. However, if the Participant returns to
employment, the Participant may elect to defer an Annual Deferral Amount for the
Plan Year following his or her return to employment and for every Plan Year
thereafter while a Participant in the Plan; provided such deferral elections are
otherwise allowed and an Election Form is delivered to and accepted by the
Committee or its designee for each such election in accordance with Section 3.2
above.

 

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Amended and Restated

Deferred Compensation Plan

 

ARTICLE 13

Termination, Amendment or Modification

13.1

Termination. Although the Employer anticipates that it will continue the Plan
for an indefinite period of time, there is no guarantee that the Employer will
continue the Plan or will not terminate the Plan at any time in the future.

 

(a)

Plan Termination Generally. The Employer may unilaterally terminate this Plan at
any time. Except as provided in Section 13.1(b), the termination of this Plan
shall not cause a distribution of benefits under this Plan. Rather, upon such
termination benefit distributions will be made at the earliest distribution
event permitted under ARTICLE 5 or ARTICLE 6.

 

(b)

Plan Terminations Under Section 409A. Notwithstanding anything to the contrary
in Section 13.1(a), if the Employer terminates this Plan in the following
circumstances:

 

(i)

Within thirty (30) days before, or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of the Plan and further provided that all the
Employer's arrangements which are substantially similar to the Plan are
terminated so the Participant and all participants in the similar arrangements
are required to receive all amounts of compensation deferred under the
terminated arrangements within twelve (12) months of the termination of the
arrangements;

 

(ii)

Upon the Employer’s dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Plan are included in the
Participant's gross income in the latest of (i) the calendar year in which the
Plan terminates; (ii) the calendar year in which the amount is no longer subject
to a substantial risk of forfeiture; or (iii) the first calendar year in which
the distribution is administratively practical; or

 

(iii)

Upon the Employer’s termination of this and all other account balance plans (as
referenced in Section 409A of the Code or the regulations thereunder), provided
that all distributions are made no earlier than twelve (12) months and no later
than twenty-four (24) months following such termination, and the Employer does
not adopt any new non-account balance plans for a minimum of five (5) years
following the date of such termination; the Employer may distribute the Account
Balances, determined as of the date of the termination of the Plan to the
Participant, in a lump sum subject to the above terms.

 

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Amended and Restated

Deferred Compensation Plan

 

13.2

Amendment.

 

 

(a)

The Employer may, at any time, amend or modify the Plan in whole or in part by
the action of its Board; provided, however, that: (i) no amendment or
modification shall be effective to decrease or restrict the value of a
Participant's Account Balance in existence at the time the amendment or
modification is made, calculated as if the Participant had experienced a
Termination of Employment as of the effective date of the amendment or
modification or, if the amendment or modification occurs after the date upon
which the Participant was eligible to Retire, the Participant had Retired as of
the effective date of the amendment or modification, (ii) no amendment or
modification of this Section 13.2 or Section 14.2 of the Plan shall be
effective, and (iii) no amendment or modification shall be made unless such
amendment or modification complies with Section 409A. The amendment or
modification of the Plan shall not affect any Participant or Beneficiary who has
become entitled to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that the Employer shall have the
right to accelerate installment payments by paying the vested Account Balance in
a lump sum or pursuant to an Annual Installment Method using fewer months
(provided that the present value of all payments that will have been received by
a Participant at any given point of time under the different payment schedule
shall equal or exceed the present value of all payments that would have been
received at that point in time under the original payment schedule).

 

(b)

Notwithstanding any provisions of the Plan to the contrary, in the event that
the Employer determines that any provision of the Plan may violate or otherwise
not comply with Section 409A, the Employer may, without the consent of any
Participant or Beneficiary: (i) adopt such amendments to the Plan and
appropriate policies and procedures, including amendments and policies with
retroactive effective dates, that the Employer determines necessary or
appropriate to preserve the intended treatment of the Plan or the benefits
provided by the Plan; and/or (ii) take such other actions as the Employer
determines necessary or appropriate to comply with the requirements of Section
409A.

13.3

Effect of Payment. The full payment of the Participant’s vested Account Balance
under ARTICLE 3, ARTICLE 7, ARTICLE 8, ARTICLE 9 or ARTICLE 10 of the Plan shall
completely discharge all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant's Plan Agreement shall
terminate.

ARTICLE 14

Administration

14.1

Committee Duties. Except as otherwise provided in this ARTICLE 14, this Plan
shall be administered by the Compensation committee of the Employer, or such
committee as the Board shall appoint. Members of the Committee may be
Participants under this Plan. The Committee shall also have the discretion and
authority to (i) make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan, (ii) decide or resolve any and
all questions including interpretations of this Plan, as may arise in connection
with the Plan, and (iii) delegate such duties to individuals or other committees
as it deems necessary. Any individual serving on the Committee who is a
Participant shall not vote or act on any matter relating solely to himself or
herself. When making a determination or calculation, the Committee shall be
entitled to rely on information furnished by a Participant or the Bank.

 

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Deferred Compensation Plan

 

14.2

Administration Upon Change In Control. For purposes of this Plan, the Committee
shall be the “Administrator” at all times prior to the occurrence of a Change in
Control. Within thirty (30) days following a Change in Control, an independent
third party trustee shall be appointed under the Trust and at all times prior to
the distribution of all Account Balances under the Plan, the Trust shall not be
terminated or modified and an independent third party trustee shall be the
trustee of the Trust.

14.3

Agents. In the administration of this Plan, the Committee may, from time to
time, employ agents and delegate to them such administrative duties as it sees
fit (including acting through a duly appointed representative) and may from time
to time consult with counsel who may be counsel to the Employer.

14.4

Binding Effect of Decisions. The decision or action of the Administrator with
respect to any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

14.5

Indemnity of Committee. All Employers shall indemnify and hold harmless the
members of the Committee, any Employer or Employee to whom the duties of the
Committee may be delegated, and the Administrator against any and all claims,
losses, damages, expenses or liabilities arising from any action or failure to
act with respect to this Plan, except in the case of willful misconduct by the
Committee, any of its members, any such Employee or the Administrator.

14.6

Employer Information. To enable the Committee and/or Administrator to perform
its functions, the Bank and each Employer shall supply full and timely
information to the Committee and/or Administrator, as the case may be, on all
matters relating to the compensation of its Participants, the date and
circumstances of the Retirement, Disability, death or Cessation of Employment of
its Participants, and such other pertinent information as the Committee or
Administrator may reasonably require.

ARTICLE 15

Other Benefits and Agreements

15.1

Coordination with Other Benefits. The benefits provided for a Participant and
Participant's Beneficiary under the Plan are in addition to any other benefits
available to such Participant under any other plan or program for employees of
the Employer. The Plan shall supplement and shall not supersede, modify or amend
any other such plan or program except as may otherwise be expressly provided.

 

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Amended and Restated

Deferred Compensation Plan

 

ARTICLE 16

Claims Procedures

16.1

Presentation of Claim. Any Participant or Beneficiary of a deceased Participant
(such Participant or Beneficiary being referred to below as a “Claimant”) may
deliver to the Committee a written claim for a determination with respect to the
amounts distributable to such Claimant from the Plan. If such a claim relates to
the contents of a notice received by the Claimant, the claim must be made within
sixty (60) days after such notice was received by the Claimant. All other claims
must be made within 180 days of the date on which the event that caused the
claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.

16.2

Notification of Decision. The Committee shall consider a Claimant's claim within
a reasonable time, but no later than ninety (90) days after receiving the claim.
If the Committee determines that special circumstances require an extension of
time for processing the claim, written notice of the extension shall be
furnished to the Claimant prior to the termination of the initial ninety (90)
day period. In no event shall such extension exceed a period of ninety (90) days
from the end of the initial period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. The Committee shall
notify the Claimant in writing:

 

(a)

that the Claimant's requested determination has been made, and that the claim
has been allowed in full; or

 

(b)

that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant's requested determination, and such notice must set forth in a
manner calculated to be understood by the Claimant:

 

(i)

the specific reason(s) for the denial of the claim, or any part of it;

 

(ii)

specific reference(s) to pertinent provisions of the Plan upon which such denial
was based;

 

(iii)

a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary;

 

(iv)

an explanation of the claim review procedure set forth in Section 16.3 below;
and

 

(v)

a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

 

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16.3

Review of a Denied Claim. On or before sixty (60) days after receiving a notice
from the Committee that a claim has been denied, in whole or in part, a Claimant
(or the Claimant's duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim. The Claimant (or the
Claimant's duly authorized representative):

 

(a)

may, upon request and free of charge, have reasonable access to, and copies of,
all documents, records and other information relevant to the claim for benefits;

 

(b)

may submit written comments or other documents; and/or

 

(c)

may request a hearing, which the Committee, in its sole discretion, may grant.

16.4

Decision on Review. The Committee shall render its decision on review promptly,
and no later than sixty (60) days after the Committee receives the Claimant’s
written request for a review of the denial of the claim. If the Committee
determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial sixty (60) day period. In no
event shall such extension exceed a period of sixty (60) days from the end of
the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Committee
expects to render the benefit determination. In rendering its decision, the
Committee shall take into account all comments, documents, records and other
information submitted by the Claimant relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination. The decision must be written in a manner calculated to be
understood by the Claimant, and it must contain:

 

(a)

specific reasons for the decision;

 

(b)

specific reference(s) to the pertinent Plan provisions upon which the decision
was based;

 

(c)

a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
Claimant’s claim for benefits; and

 

(d)

a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

16.5

Disability Related Claims. Notwithstanding the above-described claims procedure,
if a claim involves a determination of whether the Participant is Disabled,
certain time periods related to the claim review process are revised as
described within this section. The ninety (90) day period for responding to an
initial claim will be shortened to a forty-five (45) day period. If
circumstances require the review period to be extended (up to thirty (30) days)
the Claimant will be notified prior to the expiration of the forty-five (45) day
period. The notice of any extension must describe the reason for the extension,
explain the standards on which entitlement to benefits is based, list any
unresolved issues, request any information that will assist in resolving the
unresolved issues and provide you with an estimate of the date a decision is
expected to be made. If additional information is needed, the Claimant will be
afforded forty-five (45) days to provide the necessary information. If prior to
the end of the initial thirty (30) day extension, the Committee determines that
additional time is required (up to an additional thirty (30) days) due to
circumstances beyond the Committee’s control, the Committee will notify the
Claimant prior to the expiration of the extension and explain the reason for the
extension and the estimated response date. In addition, the sixty (60) day
period to make an appeal, as described above, shall be extended to one
hundred-eighty (180) days and the sixty (60) day period to respond to the appeal
(initial or extended) will be forty-five (45) days.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

16.6

Legal Action. A Claimant's compliance with the foregoing provisions of this
Article 16 is a mandatory prerequisite to a Claimant's right to commence any
legal action with respect to any claim for benefits under this Plan.

ARTICLE 17

Trust

17.1

Establishment of the Trust. The Employer shall establish a trust by a trust
agreement with a third party, the trustee, (the “Trust”), and the Employer shall
at least annually transfer over to the Trust such assets as the Employer
determines, in its sole discretion, are necessary to provide, on a present value
basis, for its respective future liabilities created with respect to the Annual
Deferral Amounts for all periods prior to the transfer, as well as any debits
and credits to the Participants’ Account Balances for all periods prior to the
transfer, taking into consideration the value of the assets in the trust at the
time of the transfer.

17.2

Interrelationship of the Plan and the Trust. The provisions of the Plan and the
Plan Agreement shall govern the rights of a Participant to receive distributions
pursuant to the Plan. The provisions of the Trust shall govern the rights of the
Employers, Participants and the creditors of the Employers to the assets
transferred to the Trust. Each Employer shall at all times remain liable to
carry out its obligations under the Plan.

17.3

Distributions From the Trust. Each Employer's obligations under the Plan may be
satisfied with Trust assets distributed pursuant to the terms of the Trust, and
any such distribution shall reduce the Employer's obligations under this Plan.

ARTICLE 18

Miscellaneous

18.1

Status of Plan. The Plan is intended to be a plan that is (a) not qualified
within the meaning of Code Section 401(a); (b) “unfunded and is maintained by an
employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees” within the meaning
of ERISA Sections 201(2), 301(a)(3) and 401(a)(1); and (c) compliant with
Section 409A. The Plan shall be administered and interpreted to the extent
possible in a manner consistent with that intent.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

18.2

Unsecured General Creditor. Participants and their Bene­ficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests or
claims in any property or assets of an Employer. For purposes of the payment of
benefits under this Plan, any and all of an Employer's assets shall be, and
remain, the general, unpledged unrestricted assets of the Employer. An
Employer's obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

18.3

Employer's Liability. An Employer's liability for the payment of benefits shall
be defined only by the Plan and the Plan Agreement, as entered into between the
Employer and a Participant. An Employer shall have no obliga­tion to a
Participant under the Plan except as expressly provided in the Plan and his or
her Plan Agreement.

18.4

Nonassignability. Neither a Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be, unassignable
and non-transfer­able. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise.

18.5

Not a Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between the Employer and the
Participant. Such employment is hereby acknowledged to be an “at will”
employment relationship that can be terminated at any time for any reason, or no
reason, with or without cause, and with or without notice, unless expressly
provided in a written employment agreement. Nothing in this Plan shall be deemed
to give a Participant the right to be retained in the service of the Employer,
as an Employee or to interfere with the right of the Employer to discipline or
discharge the Participant at any time.

18.6

Furnishing Information. A Participant or his or her Beneficiary will cooperate
with the Committee by furnishing any and all information requested by the
Committee and take such other actions as may be requested in order to facilitate
the administra­tion of the Plan and the payments of benefits hereunder,
including but not limited to taking such physical examinations as the Committee
may deem necessary.

18.7

Terms. Whenever any words are used herein in the masculine, they shall be
construed as though they were in the feminine in all cases where they would so
apply; and whenever any words are used herein in the singular or in the plural,
they shall be construed as though they were used in the plural or the singular,
as the case may be, in all cases where they would so apply.

18.8

Captions. The captions of the articles, sections and paragraphs of this Plan are
for convenience only and shall not control or affect the meaning or construction
of any of its provisions.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

18.9

Governing Law. Subject to ERISA, the provisions of this Plan shall be construed
and interpreted according to the internal laws of the State of Indiana without
regard to its conflicts of laws principles.

18.10

Notice. Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand-delivered, or sent by
registered or certified mail, to the address below:

Lake City Bank

202 E. Center Street

Warsaw, Indiana 46580

Attn: Chief Financial Officer

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

Any notice or filing required or permitted to be given to a Participant under
this Plan shall be sufficient if in writing and hand-delivered, or sent by mail,
to the last known address of the Participant.

 

18.11

Successors. The provisions of this Plan shall bind and inure to the benefit of
the Employer and its successors and assigns and the Participant and the
Participant's designated Beneficiaries.

18.12

Spouse's Interest. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass to the
Participant and shall not be transferable by such spouse in any manner,
including but not limited to such spouse's will, nor shall such interest pass
under the laws of intestate succession.

18.13

Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal or
invalid provision had never been inserted herein.

18.14

Incompetent. If the Committee determines in its discretion that a benefit under
this Plan is to be paid to a minor, a person declared incompetent or to a person
incapable of handling the disposition of that person's property, the Committee
may direct payment of such benefit to the guardian, legal representative or
person having the care and custody of such minor, incompetent or incapable
person. The Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the benefit.
Any payment of a benefit shall be a payment for the account of the Participant
and the Participant's Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment amount.

18.15

Court Order. The Committee is authorized to make any payments directed by court
order in any action in which the Plan or the Committee has been named as a
party. In addition, if a court determines that a spouse or former spouse of a
Participant has an interest in the Participant’s benefits under the Plan in the
form of a qualified domestic relations order, as defined in Section 414(p)(1)(B)
of the Code, in connection with a property settlement or otherwise, the
Committee, in its sole discretion, shall have the right, notwithstanding any
election made by a Participant, to immediately distribute the spouse's or former
spouse's interest in the Participant’s benefits under the Plan to that spouse or
former spouse.

 

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Lake City Bank

Amended and Restated

Deferred Compensation Plan

 

18.16

Insurance. The Employers, on their own behalf or on behalf of the trustee of the
Trust, and, in their sole discretion, may apply for and procure insurance on the
life of the Participant, in such amounts and in such forms as the Trust may
choose. Any election to participate in the Plan is deemed a consent by the
Participant to be insured by and Employer. The Employers or the trustee of the
Trust, as the case may be, shall be the sole owner and beneficiary of any such
insurance. The Participant shall have no interest whatsoever in any such policy
or policies, and at the request of the Employers shall submit to medical
examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Employers have
applied for insurance.

18.17

Legal Fees. In the event of any dispute under the Plan, the party which is
successful on the merits pursuant to a legal judgment, arbitration or settlement
shall be entitled to recover from the other party all of the prevailing party’s
costs of counsel, fees, and expenses incurred.

 

IN WITNESS WHEREOF, the Bank has signed this Plan document as of December 9,
2008.

 

 

LAKE CITY BANK, an Indiana state bank

 

 

By: /s/ Michael L. Kubacki

Michael L. Kubacki

Title:    President and CEO

 

 

 

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