Exhibit 10.1

 
Deferred Compensation
 
Agreement Between
 
Lafayette Savings Bank, FSB
 
And
 
Randolph F. Williams
 
THIS AGREEMENT, executed and delivered on the date set forth immediately
following Article V hereof, by and between Lafayette Savings Bank, FSB (the
“Bank”) and Randolph F. Williams (the “Employee”),
 
W I T N E S S E T H:
 
WHEREAS, the Employee is now serving as President and Chief Executive Officer of
the Bank; and
 
WHEREAS, the Bank desires to have the benefit of the Employee’s continued
loyalty, service and leadership until his retirement; and
 
WHEREAS, the Bank desires to provide the Employee with the supplemental
retirement benefit, to be paid upon his retirement in order to induce the
Employee to remain with the Bank and to devote his highest skill and energy to
the discharge of his employment duties; and
 
WHEREAS, the parties desire to incorporate their entire agreement in this
writing;
 
NOW, THEREFORE, in consideration of the premises, the mutual covenants herein
contained and in further consideration of each act done pursuant hereto by
either of the parties, the parties enter into the following Articles of
Agreement:
 
 

ARTICLE I
DEFINITIONS

 

 
Section 1.01  Account.  The term “Account” means the account maintained for the
Employee under this Agreement, which is credited in each calendar year with
amounts determined pursuant to Article II of this Agreement.
 
Section 1.02  Administrator.  The term “Administrator” means the Board, which
shall have the sole authority to manage and control the operation and
administration of this Agreement.
 
Section 1.03  Bank.  The term “Bank” means Lafayette Savings Bank, FSB.
 
Section 1.04  Board.  The term “Board” means the Board of Directors of the Bank.
Whenever the provisions of this Agreement require action by the Board, it may be
taken by the Compensation Committee of the Board with the same force and effect
as though taken by the entire Board.
 

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Section 1.05  Change in Control.  The term “Change in Control” shall mean a
change in the ownership or effective control of the Bank, or in the ownership of
a substantial portion of the assets of the Bank, as shall be prescribed by
regulations adopted by the Internal Revenue Service under Section 409A(a)(2)(v)
of the Code.
 
Section 1.06  Code.  The term Code means the Internal Revenue Code of 1986, as
amended.
 
Section 1.07  Compensation.  The term “compensation” shall include Employee’s
base salary and bonus paid by the Bank.
 
Section 1.08  Effective Date.  The term “Effective Date” means October 1, 2005.
 
Section 1.09  Employee.  The term “Employee” means Randolph F. Williams.
 
Section 1.10  Plan Year.  The Term “Plan Year” means the consecutive twelve (12)
month period beginning each January 1 and ending on the following December 31.
 
Section 1.11  Retirement Date.  The date Employee retires from employment at the
Bank after attaining age sixty-five (65).
 
Section 1.12  Termination of Employment.  The term “Termination of Employment”
means the date on which the Employee, prior to the attainment of his Retirement
Date, retires, resigns or otherwise, voluntarily or involuntarily, terminates
his full-time employment with the Bank. The Employee shall be deemed to have
terminated his full-time employment with the Bank if he incurs a Total
Disability. With respect to any benefit payable as a result of Termination of
Employment, Termination of Employment shall be determined by reference to the
Bank and all members of any controlled group (determined under Section 414(b) of
the Internal Revenue Code of 1986, as amended (the “Code”)) or trades or
businesses under common control (determined under Section 414(c) of the Code)
that includes the Bank.
 
Section 1.13  Total Disability.  The term “Total Disability” means any medically
determinable physical or mental impairment which can be expected to result in
death or to last for a continuous period of not less than 12 months and which
(1) renders the Employee unable to engage in any substantial gainful activity or
(2) entitles Employee to income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Bank.
 

ARTICLE II
THE ALLOCATION

 

Section 2.01  Allocations to the Employee’s Account.  On the Effective Date and
on the last business day of the month thereafter occurring on or before the
first to occur of (1) the Employee’s attainment of his Retirement Date, (2) his
death or (3) his Termination of Employment, the Employer shall credit to the
Employee’s Account 10% of the amount of Employee’s compensation, or such other
percentage of Employee’s compensation not to exceed 20% as he shall elect to
have withheld from his compensation from time to time; provided, however,
excepting any initial election, a change in the amount elected by the Employee
shall become effective no earlier than the first day of the calendar year
following the Employee’s change of election. Amounts elected to be deferred by
the Employee shall be withheld from the Employee’s compensation for the pay
periods for which such compensation is paid. Each allocation under this Section
2.01 shall be deemed to have been made for purposes of computing interest under
Section 2.03 of this Agreement as of the required allocation date.

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Section 2.02  Amount of Employer Allocations.  As of the Effective Date, the
Employer shall allocate additional amounts to the Employee’s Account at the end
of each quarter (beginning with the quarter ending December 31, 2005) as
matching contributions based on the amount of salary the Employee has elected to
defer and have withheld under Section 2.01 during that quarter, as follows:
 
 

 

 

Date

 

 

Amount

 

 

December 31, 2005

 

 

Twenty cents ($.20) for each one dollar ($1.00) of salary deferred by the
Employee, subject to a maximum of 4% of Employee’s salary for those periods.

 

 

As of the last day of each quarter thereafter during the term of this Agreement

 

 

Such amounts as Employer shall determine for a calendar year which shall be
approved by the Board before the end of the preceding calendar year

 

 
 
Section 2.03  Allocation of Interest.  As of the end of each Plan Year, and as
of the date of termination of this Agreement or payment in full of the benefits
provided for hereunder, Bank shall credit the Employee’s Account, with interest,
compounded annually, on the undistributed balance then held in his Account. The
annual rate of interest for each Plan Year shall be equal to the highest
certificate of deposit rates offered by the Bank during the year preceding the
year in which the interest is to be allocated. Interest with respect to any
allocations made during a Plan Year shall accrue from the date of allocation.
 
Section 2.04  Optional Account Investments.  In lieu of the interest credits
described in Section 2.03, the Administrator, in its complete and sole
discretion, may elect to invest the amounts credited to the Employee’s Account
in specific investments in the name of the Employer. To the extent the
Administrator makes such investments, the actual amounts credited to the
Employee’s Account shall reflect the actual investment results for such
investments rather than the deemed interest described in Section 2.03, and the
Bank will not be obligated to pay Employee any difference between the deemed
interest rate in Section 2.03 and those investment results. In making these
investment decisions, the Administrator may, but is not required to, seek
recommendations from the Employee as to the manner in which the Employee’s
Account should be invested.
 
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Section 2.05  Termination of this Agreement.  Either Employee or the Bank may
terminate this agreement with respect to any calendar year by providing written
notice to the other party hereto on or before December 1st of the preceding
calendar year.
 

ARTICLE III
BENEFITS

 

Section 3.01  Death Benefits.  Upon the death of the Employee prior to the
attainment of his Retirement Date or prior to his Termination of Employment, his
beneficiary, if living, or his contingent beneficiaries, if not, as determined
pursuant to Section 4.03 of this Agreement, shall receive in a single lump sum
cash payment the balance held in the deceased Employee’s Account on the date of
Employee’s death. In the absence of any such designation or if the designated or
contingent beneficiary is not living at the death of the Employee, the Account
balance shall be paid in a lump sum to the Employee’s spouse, if any, or, if
none, to his estate. The lump sum payment shall be paid within sixty (60)
calendar days after the Employee’s death.
 
Section 3.02  Retirement, Prior Termination of Employment, or Change in
Control.  Upon the Employee’s retirement after he attains his Retirement Date or
upon his earlier Termination of Employment or at the Bank’s direction upon a
Change in Control, he shall receive a cash payment of the balance in his Account
at the time of his retirement or his earlier Termination of Employment, or an
earlier Change in Control. The Account balance shall be paid in substantially
equal monthly installments over a term of five (5) years commencing no later
than sixty (60) calendar days after he retires after attaining his Retirement
Date or after his earlier Termination of Employment, or after an earlier Change
in Control; provided, however, that if Employee is a “key employee” (within the
meaning of Section 416(i) of the Code without regard to paragraph (5) thereof)
of a corporation whose stock is publicly traded on an established securities
market or otherwise, within the meaning of Section 409A(a)(2)(B)(i) of the Code,
such payments may not commence any earlier than the earlier of a date which is
six months after the Employee’s separation from service or the date of
Employee’s death.
 
Section 3.03  Death After Payments Commence.  If Employee dies prior to
receiving any or all of the monthly installments contemplated by Section 3.02 of
this Article III, the Account balance not yet paid to Employee shall be paid in
a lump sum within sixty (60) calendar days after the Employee’s death to his
designated beneficiaries, if living, or to his contingent beneficiaries, if not
living. In the absence of any such designation or if the designated or
contingent beneficiary is not living at the death of the Employee, the Account
balance shall be paid in a lump sum to the Employee’s spouse, if any, or, if
none, to his estate. Such payment shall be made within sixty (60) calendar days
after the Employee’s death.
 
Section 3.04  Continued Interest or Earnings Accrual.  Amounts appropriated
under this Agreement pending distribution shall continue to accrue interest or
earnings at the rate and in the manner prescribed by Section 2.03 or 2.04 of
Article II hereof.
 
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ARTICLE IV
ADMINISTRATION

 

Section 4.01  Delegation of Responsibility.  The Administrator may delegate
duties involved in the administration of this Agreement to the Compensation
Committee of the Board. However, the ultimate responsibility for the
administration of this Agreement shall remain with the Administrator.
 
Section 4.02  Payment of Benefits.  The amounts allocated to the Employee’s
Account and payable as benefits under this Agreement shall be paid solely from
the general assets of the Bank. The Employee shall not have any interest in any
specific assets of the Bank under the terms of this Agreement. This Agreement
shall not be considered to create an escrow account, trust fund or other funding
arrangement of any kind or a fiduciary relationship between the Employee and the
Bank.
 
Section 4.03  Designation of Beneficiaries.  The Employee shall designate in a
writing filed with the Secretary of the Bank a beneficiary and a contingent
beneficiary to whom death benefits or any unpaid benefits due hereunder at the
date of the Employee’s death shall be paid.
 

ARTICLE V
MISCELLANEOUS

 

     Section 5.01  Amendment of Agreement.  This Agreement cannot be amended,
modified or supplemented in any respect except by a subsequent written agreement
entered into by the parties.
 
Section 5.02  Successors and Assigns.  This Agreement shall be binding upon, and
shall inure to the benefit of, the Bank, its successors and assigns, and the
Employee, his heirs, legatees and personal representatives.
 
Section 5.03  Non-Alienation.  The Employee and his beneficiary, as determined
pursuant to Section 4.03 of this Agreement, shall not have any right to
anticipate, alienate or assign any rights under this Agreement, and any effort
to do so shall be null and void. The monthly benefits payable under this
Agreement shall be exempt from the claims of creditors or other claimants and
from all orders, decrees, levies and executions and any other legal process to
the fullest extent permitted by law.
 
Section 5.04  Choice of Law.  This Agreement shall be construed and interpreted
pursuant to, and in accordance with, the laws of the State of Indiana.
 
Section 5.05  Waiver.  Failure of any party hereto to insist upon strict
compliance with any of the terms, covenants and conditions hereof shall not be
deemed a waiver or relinquishment of any similar right or power hereunder at any
subsequent time.
 
Section 5.06  Notices.  Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if personally delivered to the
party to whom notice should be given at the addresses set forth below (or at
such other address for a party as shall be specified by notice given pursuant
hereto):
 

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Bank:
Lafayette Savings Bank, FSB
   
101 Main Street
   
P.O. Box 1628
   
Lafayette, IN 47902
       
Employee:
Randolph F. Williams
   
3611 Chancellor Way
   
West Lafayette, IN 47906

 
Section 5.07  Unenforceability.  If any provision of this Agreement is deemed
invalid or unenforceable, the remaining provisions shall remain in effect,
unless modified by the administrator with the consent of Employee.
 
Section 5.08  Headings.  The headings in this Agreement are solely for
convenience of reference and shall not affect its interpretation.
 
Section 5.09  Duration of this Agreement.  This Agreement shall automatically
terminate at the date on which the balance of the Employee’s Account has been
distributed pursuant to the terms of this Agreement.
 
Section 5.10  No Employment Contract.  This Agreement shall not be construed as
an agreement, consideration or inducement of employment or as affecting in any
manner the rights or obligations of the Bank or of the Employee to continue or
to terminate the employment relationship at any time.
 
IN WITNESS WHEREOF, the Bank and Employee have caused this Agreement to be
executed as of this 29th day of September, 2005.
 
 

 

LAFAYETTE SAVINGS BANK, FSB

 

 

 

 

By:

/s/ Mariellen M. Neudeck

 

 

“Bank”

 

 

 

 

 

 

 

 

 

 

/s/ Randolph F. Williams

 

Randolph F. Williams, Employee

 

 

 

“Employee”

 

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