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NORTHWEST NATURAL GAS COMPANY

DEFERRED COMPENSATION PLAN FOR DIRECTORS AND EXECUTIVES

EFFECTIVE JANUARY 1, 2005

RESTATED EFFECTIVE SEPTEMBER 24, 2015

TABLE OF CONTENTS

Page

1.    Purpose; Effective Date                1

2.    Eligibility                        1

3.    Deferral Elections                    1

4.    Company Contributions for Executives         3

5.    FICA Withholding on Executives            3

6.    Accounts                        4

7.    Payment of Benefits                    5

8.    Supplemental Retirement Benefit            8

9.    Administration                    9

10.    Claims Procedure                    10

11.    Amendment and Termination of the Plan        10

12.    Miscellaneous                        11

NORTHWEST NATURAL GAS COMPANY

DEFERRED COMPENSATION PLAN FOR DIRECTORS AND EXECUTIVES

1.Purpose; Effective Date; Restatement.  The Board of Directors (the “Board”) of Northwest Natural Gas Company (the “Company”) adopts this Deferred Compensation Plan for Directors and Executives (the “Plan”) for the purpose of providing an unfunded nonqualified deferred compensation plan for directors and a select group of top management personnel.  The Plan was effective as of January 1, 2005, although initial deferral elections under the Plan could have been submitted at any time after November 30, 2004.  The Plan was previously restated effective January 1, 2007, December 20, 2007, January 1, 2010 and December 15, 2011, and was restated effective as of February 28, 2008, except that the changes to Section 6(b) made by that restatement do not apply to deferral allocations made in Participation Agreements that were irrevocable on or prior to December 31, 2006.  The Plan is further amended by this restatement on and effective as of September 24, 2015.
2.Eligibility.  Persons eligible to defer compensation under the Plan shall consist of (a) all directors of the Company (“Directors”), and (b) a select group of management or highly compensated employees of the Company, which shall consist of all executive officers of the Company and such other employees of the Company as may be designated in writing by the Chief Executive Officer of the Company as eligible to defer compensation under the Plan for the applicable calendar year (“Executives”).  Any person who is both a Director and an Executive at any time shall be considered an Executive, and not a Director, at such time.  For all purposes of this Plan, a person who is an employee of a subsidiary of the Company shall be considered an employee of the Company.
3.Deferral Elections.  A Director or Executive may elect to defer compensation under the Plan by submitting a “Participation Agreement” to the Company on a form specified by the Company no later than the applicable deferral deadline.  The minimum annual aggregate deferral for all forms of compensation specified in a Participation Agreement shall be $2,000.  Any Director or Executive who has submitted a Participation Agreement is hereafter referred to as a “Participant.”  A Participation Agreement submitted by a Participant shall automatically continue from year to year and shall be irrevocable with respect to compensation once the deferral deadline for that compensation has passed, but the Participant may modify or terminate a Participation Agreement for compensation payable in any year by submitting a revised Participation Agreement or otherwise giving written notice to the Company at any time on or prior to the deferral deadline for that compensation.
(a)Elections by Directors.
(i)Cash Fees.  A Director may elect to defer receipt of all or any whole percentage of the annual retainer, meeting fees and any other cash fees payable for service as a director (“Fees”).  The deferral deadline for an election to defer Fees for services performed in any calendar year shall be the last day of the prior calendar year.
(ii)NEDSCP Shares.  Prior to the termination of the Company’s Non-Employee Directors Stock Compensation Plan (“NEDSCP”) in 2005 and the subsequent vesting of all remaining awards under the NEDSCP, Directors were permitted to elect to defer receipt of unvested shares (“NEDSCP Shares”) of common stock of the Company (“Common Stock”) awarded to the Directors under the NEDSCP.
(iii)RSU Awards.  A Director may elect to defer receipt of all or any whole percentage of compensation payable to the Director pursuant to a restricted stock unit award under the Company’s Long Term Incentive Plan (“Director RSU”).  The deferral deadline for an election to defer compensation under a Director RSU shall be the last day of the calendar year prior to the grant date of the award.

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(b)Elections by Executives.
(i)Salary.  An Executive may elect to defer receipt of any whole percentage (up to a maximum of 50 percent) of the Executive’s base annual salary, specifically excluding other forms of compensation referred to below as well as commissions and any non-cash compensation (“Salary”).  The deferral deadline for an election to defer Salary for services performed in any calendar year shall be the last day of the prior calendar year.
(ii)Bonus.  An Executive may elect to defer receipt of all or any whole percentage of the Executive’s annual bonus payable under the Company’s Executive Annual Incentive Plan or other similar annual incentive plan (“Bonus”).  Payments under the Key Goals program shall not be considered Bonus and shall not be eligible for deferral under the Plan.  The deferral deadline for an election to defer Bonus earned with respect to the Executive’s or the Company’s performance in any calendar year shall be the last day of the prior calendar year.
(iii)LTIP Compensation.  An Executive may elect to defer receipt of all or any whole percentage of compensation payable to the Executive pursuant to an award under the Company’s Long Term Incentive Plan (“LTIP Compensation”); provided, however, that (1) a stock option shall not be considered LTIP Compensation eligible for deferral under the Plan, and (2) no election shall be permitted after December 31, 2008 to defer receipt of an award that consists of shares of Common Stock issued subject to forfeiture if vesting conditions are not satisfied (“Unvested LTIP Shares”).  The deferral deadline for an election to defer LTIP Compensation shall be (x) the last day of the calendar year prior to the commencement of the performance period if a performance period is specified in the award, or (y) the last day of the calendar year prior to the grant date of the award if no performance period is specified; provided, however, that for any award of LTIP Compensation for which the performance period ends on or before December 31, 2008, the deferral deadline shall be the last day of the calendar year prior to the last year of the performance period, and for any award of LTIP Compensation for which the performance period ends on December 31, 2009 or December 31, 2010, the deferral deadline shall be December 31, 2008.  If an Executive elects to defer less than 100 percent of an award of LTIP Compensation that becomes payable in increments over time, the deferral percentage elected by the Executive shall be applied uniformly to each increment.
(iv)2012 RSU Grants.  An Executive may elect to defer receipt of all or any whole percentage of LTIP Compensation payable to the Executive pursuant to a restricted stock unit award granted in February 2012 (a “2012 RSU”); provided, however, that:
(1)the portion of the Executive’s 2012 RSU that is scheduled to vest before March 31, 2013 (the “First Installment”) shall not be eligible for deferral;
(2)as a precondition to any deferral election under this subparagraph (b)(iv), the Executive must agree to a modification of the terms of the Executive’s 2012 RSU under which all of the 2012 RSU other than the First Installment shall be forfeited if the Executive’s employment terminates before the first anniversary of the grant date of the 2012 RSU other than (x) as a result of death or disability (as defined in Treasury Regulations §1.409A-3(i)(4)) or (y) in circumstances that result in accelerated vesting of the 2012 RSU due to the occurrence of a change in control event (as defined in Treasury Regulations §1.409A-3(i)(5)); and
(3)a deferral election under this subparagraph (b)(iv) shall be void and have no effect if the Executive’s employment terminates before the first anniversary of the grant date of the 2012 RSU either (x) as a result of death or disability (as defined in Treasury Regulations §1.409A-3(i)(4)) or (y) in circumstances that result in accelerated vesting of the 2012 RSU due to the occurrence of a change in control event (as defined in Treasury Regulations §1.409A-3(i)(5)).
The deferral deadline for an election to defer LTIP Compensation payable under a 2012 RSU shall be 30 days after the grant date of the 2012 RSU.  If an Executive elects to defer less than 100 percent of the Executive’s 2012 RSU, the deferral percentage elected by the Executive shall be applied uniformly to each installment of the 2012 RSU that vests over time, excluding the First Installment.  LTIP Compensation payable 

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pursuant to restricted stock unit awards granted after 2012 shall be eligible for deferral under subparagraph (b)(iii).
(c)New Directors and Executives.  A person who first becomes a Director or Executive during a calendar year may elect to defer any of the types of compensation referred to in paragraphs (a) and (b) above that is payable solely for services performed after submission of the Participation Agreement, subject to all of the provisions of paragraphs (a) and (b), except that the deferral deadline for any such election shall be 30 days after the date the person becomes eligible under the Plan.
4.Company Contributions for Executives.
(a)Matching Contributions.  The Company shall credit a “Matching Contribution” to a participating Executive’s Cash Account (as defined below) each year based on the Executive’s total Salary and Bonus and the amount of Salary and Bonus deferred under the Plan by the Executive during that year; provided, however, that no Matching Contribution shall be made with respect to any Salary or Bonus deferred under the Plan at a time when the Executive is not a participant in the Company’s Retirement K Savings Plan.  The amount of the Matching Contribution shall be equal to the excess of (i) the lesser of (1) sixty percent (60%) of the total amount of Executive’s Salary and Bonus deferred under the Plan and the Retirement K Savings Plan during the calendar year, or (2) three and six-tenths percent (3.6%) of the Executive’s total Salary and Bonus during such calendar year, over (ii) the amount the Company would have contributed for such calendar year as a matching contribution for the Executive under the Retirement K Savings Plan if the Executive had deferred into the Retirement K Savings Plan the maximum amount of compensation permitted under that plan and applicable tax law for the year.  Matching Contributions shall be credited to the Executive’s Account no later than January 31 of the year immediately following the calendar year in which the Matching Contribution was earned, and shall be fully vested at all times.
(b)Supplemental Contributions.  For any Executive who is hired after December 31, 2006 and is therefore eligible to receive non-contributory employer contributions under Section 4.05 of the Retirement K Savings Plan, the Company shall credit a “Supplemental Contribution” to the Executive’s Cash Account each year in an amount equal to five percent (5%) of the greater of (i) the Executive’s Salary and Bonus deferred under the Plan during the calendar year, or (ii) the excess, if any, of the Executive’s total Salary and Bonus during such calendar year over the limit provided by Section 401(a)(17) of the Internal Revenue Code on compensation counted under the Retirement K Savings Plan for that year.  A Supplemental Contribution shall be credited for an Executive whose total Salary and Bonus exceeds the Section 401(a)(17) limit whether or not the Executive defers compensation under the Plan.  Supplemental Contributions shall be credited to the Executive’s Account no later than January 31 of the year immediately following the calendar year in which the Supplemental Contribution was earned.  Supplemental Contributions for an Executive shall be vested if non-contributory employer contributions for the Executive made for the same year would be vested under the terms of the Retirement K Savings Plan.  Upon termination of an Executive’s employment, any unvested Supplemental Contributions, as well as any dividends or interest credited thereon, shall be forfeited and deducted from the Executive’s Accounts.
5.FICA Withholding on Executives.  Under current law, all compensation, Matching Contributions and vested Supplemental Contributions credited to an Executive’s Accounts will be treated as wages subject to FICA tax, and the Company will be required to withhold FICA tax from the Executive.  The amount required to be withheld for FICA tax with respect to any amount of deferred compensation or related Matching Contribution or Supplemental Contribution shall be withheld from the non-deferred portion, if any, of the same compensation; provided, however, that if the non-deferred portion of the compensation is insufficient to cover the full required withholding, the Company shall withhold the remaining amount from other non-deferred compensation payable to the Executive unless the Executive otherwise pays such remaining amount to the Company.

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6.Accounts.
(a)Accounts.  The Company shall establish on its books one or two separate accounts (individually, an “Account” and collectively, the “Accounts”) for each Participant:  a Company Stock Account, which shall be denominated in shares of Common Stock, including fractional shares, and a Cash Account, which shall be denominated in U.S. dollars.
(b)Allocation of Deferrals Among Accounts.  All NEDSCP Shares deferred by a Director were credited to the Company Stock Account.  All compensation pursuant to a Director RSU payable in shares of Common Stock that is deferred by a Director shall be credited to the Company Stock Account.  All LTIP Compensation payable in shares of Common Stock that is deferred by an Executive shall be credited to the Company Stock Account.  All other compensation deferred by a Participant shall be credited to the Cash Account.
(c)Crediting of Deferrals.  The credits for deferred Salary, Bonus, Fees and compensation pursuant to Director RSUs shall be entered on the Company’s books of account at the time that such compensation would otherwise be paid.  The credit for any LTIP Compensation deferred by an Executive consisting of Unvested LTIP Shares shall be entered on the Company’s books of account as soon as practicable after such deferral is irrevocable.  The credit for any other deferred LTIP Compensation shall be entered on the Company’s books of account at the time that such compensation would otherwise be paid.
(d)Transfers Among Accounts.  Participants may elect in writing to transfer amounts previously credited to the Cash Account to the Company Stock Account, but shall be limited to four such transfers per calendar year.  No transfers may be made out of a Company Stock Account unless otherwise permitted under Section 6(i)(iv).  The Committee may require that designated fees be deducted from amounts transferred to or from Company Stock Accounts.
(e)Valuation of Stock; Dividend Credits.  Any dollar amount transferred or credited to a Company Stock Account shall be deemed to increase the number of shares of Common Stock recorded as the balance of that Account based on the closing market price of the Common Stock reported for the day of the transfer or credit or, if such day is not a trading day, the next trading day.  As of each date for payment of dividends on the Common Stock, each Company Stock Account shall be credited with the amount of dividends that would be paid on the number of shares recorded as the balance of that Account as of the record date for such dividend.
(f)Cash Account Interest.  Interest shall be credited to the Cash Account of each Participant as of the last day of each calendar quarter.  The rate of interest to be applied at the end of each calendar quarter shall be the quarterly equivalent of an annual yield that is equal to the annual yield on Moody’s Average Corporate Bond Yield for the preceding quarter, as published by the Moody’s Investors Service, Inc. (or any successor thereto), or if such index is no longer published, a substantially similar index selected by the Board.  Interest shall be calculated for each calendar quarter based upon the average daily balance of the Participant’s Cash Account during the quarter.
(g)Forfeitures.  If any Unvested LTIP Shares deferred by an Executive under this Plan are forfeited under the terms of the Executive’s applicable award agreement, the Executive’s Company Stock Account shall be reduced by the number of shares so forfeited.
(h)Statement of Account.  At the end of each calendar quarter, a report shall be issued by the Company to each Participant setting forth the balances of the Participant’s Accounts under the Plan.
(i)Effect of Corporate Transaction on Company Stock Accounts.  At the time of consummation of a Corporate Transaction (as defined below), if any, the amount credited to a Participant’s Company Stock Account shall be converted into a credit for cash or common stock of the acquiring company (“Acquiror Stock”) based on the consideration received by shareholders of the Company in the Corporate Transaction, as follows:
(i)Stock Transaction.  If holders of Common Stock receive Acquiror Stock in the Corporate Transaction, then (1) the amount credited to each Participant’s Company Stock Account shall be converted into a credit for the number of shares of Acquiror Stock that the Participant would have received 

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as a result of the Corporate Transaction if the Participant had actually held the Common Stock credited to his or her Company Stock Account immediately prior to the consummation of the Corporate Transaction, and (2) Company Stock Accounts will thereafter be denominated in shares of Acquiror Stock and ongoing deferrals into Company Stock Accounts, if any, shall continue to be made in accordance with outstanding deferral elections into the Company Stock Accounts as so denominated.
(ii)Cash or Other Property Transaction.  If holders of Common Stock receive cash or other property in the Corporate Transaction, then the amount credited to a Participant’s Company Stock Account shall be transferred to the Participant’s Cash Account and converted into a cash credit for the amount of cash or the value of the property that the Participant would have received as a result of the Corporate Transaction if the Participant had actually held the Common Stock credited to his or her Company Stock Account immediately prior to the consummation of the Corporate Transaction.
(iii)Combination Transaction.  If holders of Common Stock receive Acquiror Stock and cash or other property in the Corporate Transaction, then (1) the amount credited to each Participant’s Company Stock Account shall be converted in part into a credit for Acquiror Stock under Section 6(i)(i) and in part into a credit for cash under Section 6(i)(ii) in the same proportion as such consideration is received by shareholders, and (2) ongoing deferrals into Company Stock Accounts, if any, shall continue to be made in accordance with outstanding deferral elections into Company Stock Accounts in accordance with Section 6(i)(i).
(iv)Election Following Stock Transaction.  For a period of 12 months following the consummation of any Corporate Transaction which results in Participants having Company Stock Accounts denominated in Acquiror Stock, each Participant shall have a one-time right to elect to transfer the entire amount in the Participant’s Company Stock Account into the Participant’s Cash Account; provided, however, that this election shall not be available if the Corporate Transaction results in holders of Common Stock becoming holders of all of the outstanding common stock of a parent corporation of the Company.  Such election shall be made by written notice to the Company and shall be effective on the date received by the Company.  If such an election is made, the amount of cash to be credited to the Participant’s Cash Account shall be determined by multiplying the number of shares of Acquiror Stock in the Participant’s Company Stock Account by the closing market price of the Acquiror Stock reported for the effective date of the election or, if such day is not a trading day, the next trading day.
(v)For purposes of this Plan, a “Corporate Transaction” shall mean any of the following:
(1)    any consolidation, merger or plan of share exchange involving the Company (a “Merger”) pursuant to which shares of Common Stock would be converted into cash, securities or other property;
(2)    any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company; or
(3)    the adoption of any plan or proposal for the liquidation or dissolution of the Company.
7.Payment of Benefits.
(a)Plan Benefits.  The Company shall pay Plan benefits to each Participant equal to the Participant’s Accounts.  Each Participation Agreement shall include an election by the Participant as to the term of benefit payments with respect to amounts deferred under the Participation Agreement, and Participation Agreements from Executives shall also include an election as to the commencement of benefit payments.  The payment elections in a Participation Agreement shall also apply to Matching Contributions and Supplemental Contributions credited as a result of Salary or Bonus during the deferral period covered by the Participation Agreement, and shall also apply to any dividends or interest credited with respect to 

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amounts deferred under the Participation Agreement and such Matching Contributions and Supplemental Contributions.  If a Supplemental Contribution is credited to an Executive’s Account for a year that is not covered by a Participation Agreement, the Executive shall be deemed to have elected a single lump sum payment following Separation from Service as permitted by Sections 7(b) and 7(c) below with respect to benefits resulting from such Supplemental Contribution.  Except as otherwise provided in this Section 7, payment elections shall be irrevocable with respect to compensation once the deferral deadline for that compensation has passed.  Participants may make different payment elections with respect to subsequent deferrals of compensation, but no Participant may at any time have compensation deferred under the Plan payable under more than three different payment elections.
(b)Commencement of Payments.  Payment of benefits to Directors shall commence in January of the year following the Director’s Separation from Service (as defined below) with the Company.  Payment of benefits to Executives shall commence in the later of (i) January of the year following the Executive’s Separation from Service with the Company, or (ii) the seventh month following the month of the Executive’s Separation from Service with the Company; provided, however, that Executives may elect in their Participation Agreements to have benefits from their Accounts commence in January of a year specified by the Executive if such year is earlier than the year following the Executive’s Separation from Service with the Company.  When used in this Plan, the term “Separation from Service” shall have the meaning ascribed to such term in Treasury Regulations §1.409A-1(h).
(c)Term of Payments.  Participants may elect in their Participation Agreements to have benefits from their Accounts paid in (i) annual installments over 5, 10 or 15 years, (ii) a single lump sum payment, or (iii) a combination of a partial lump sum payment (expressed as a percentage) and the remainder in installments over 5, 10 or 15 years.
(d)Form of Payments.  Benefits payable to a Participant from a Company Stock Account shall be paid as a distribution of Common Stock plus cash for fractional shares.  Benefits payable to a Participant from a Cash Account shall be paid in cash.
(e)Payment Timing and Valuation.  All lump sum payments or installment payments due under the Plan in any year shall be paid on a date in January determined by the Company, except that if Section 7(b) requires benefits to commence in a month other than January, the initial payment shall be paid on a date in that month determined by the Company.  All payments shall be based on Account balances as of the close of business on the last trading day of the immediately preceding month.  Each partial lump sum payment and installment payment to a Participant shall be paid in the same proportion from each of the Accounts of the Participant subject to the applicable payment election.  The amount of each installment payment from each Account shall be determined by dividing the Account balance by the number of remaining installments, including the current installment to be paid.
(f)Modification of Payment Elections.
(i)An Executive who has elected to have any benefit commence in a specified year prior to termination of employment as permitted in Section 7(b) may elect (after such election has otherwise become irrevocable) to specify a later year for commencement of such benefit, provided that for any such election submitted after December 31, 2008, (1) such election is made in writing delivered to the Company no later than, and becoming irrevocable on, the last day of the second year preceding the previously specified year, and (2) the later year so specified is at least 5 years later than the previously specified year.
(ii)After a Participant’s election under Section 7(c) regarding the term of any benefit payments has otherwise become irrevocable, the Participant may elect to change such term of payments, provided (1) the choice of annual installments over 15 years shall not be available for a change election under this subsection, (2) the term of any particular payments may be changed only once under this subsection, (3) such election must be made in writing delivered to the Company no later than, and becoming irrevocable on, the last day of the second year preceding the year in which the payments otherwise would have commenced (and shall not be effective if a Separation from Service occurs on or before the date the election becomes irrevocable), and (4) the commencement of the affected payments shall be delayed for 5 

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years after the date the payments would have commenced under the terms of the previous payment election.  Accordingly, for a Director who elects to change the term of any benefit payments, the commencement of those payments will be delayed until January of the year following the fifth anniversary of the Director’s Separation from Service.  Notwithstanding the foregoing, a Participant may elect on or prior to December 31, 2008 to change the term of any benefit payments that have not commenced as of that date without application of any of the limitations or restrictions set forth in this Section 7(f)(ii).
(g)Unforeseeable Emergency.  Notwithstanding the foregoing provisions of this Section 7, an accelerated payment from a Participant’s Accounts may be made to the Participant in the sole discretion of the Committee based upon a finding that the Participant has suffered an Unforeseeable Emergency.  For this purpose, “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse or a dependent of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  Unforeseeable Emergency shall be determined by the Committee on the basis of information supplied by the Participant in accordance with uniform guidelines promulgated from time to time by the Committee.  The amount of any accelerated payment under this Section 7(g) shall be limited to the amount reasonably necessary to meet the Participant’s needs resulting from the Unforeseeable Emergency, after taking into account insurance and other potential sources of funds to meet such needs, plus the amount reasonably necessary to cover income and withholding taxes on the accelerated payment.  Any such accelerated payment shall be paid as promptly as practicable following approval by the Committee and shall be paid pro-rata from the Participant’s Accounts based on the account balances as of the close of business on the day prior to the payment date.
(h)Designation of Beneficiaries; Death.
(i)Each Participant shall have the right, at any time, to designate any person or persons as the Participant’s beneficiary or beneficiaries (both primary as well as secondary) to whom benefits under this Plan shall be paid in the event of the Participant’s death prior to complete distribution of the benefits due under the Plan.  If greater than fifty percent (50%) of the benefit is designated to a beneficiary other than the Participant’s spouse, such beneficiary designation shall be consented to by the Participant’s spouse.  Each beneficiary designation shall be in written form prescribed by the Company and will be effective only if filed with the Company during the Participant’s lifetime.  Such designation may be changed by the Participant at any time without the consent of a beneficiary, subject to the spousal consent requirement above.  If no designated beneficiary survives the Participant, the balance of the Participant’s benefits shall be paid to the Participant’s surviving spouse or, if no spouse survives, to the Participant’s estate.
(ii)Upon the death of a Participant, notwithstanding any contrary provisions of Section 7(b) or 7(f), benefit payments to the Participant’s beneficiary shall commence no later than January of the year following the Participant’s death.  Any benefits payable after the death of a Participant shall otherwise be paid in accordance with the payment elections for such benefits that would have applied if the Participant had not died.
(i)Payment to Guardian.  If a benefit under the Plan is payable to a minor or a person declared incompetent or to a person incapable of handling the disposition of his property, the Committee may direct payment of such Plan benefit to the guardian, legal representative or person responsible for the care and custody of such minor, incompetent or person.  The Committee may require proof of incompetence, minority, incapacity or guardianship as it may deem appropriate prior to distribution of the Plan benefit.  Such distribution shall completely discharge the Committee and the Company from all liability with respect to such benefit.
(j)Withholding; Payroll Taxes.  The Company shall withhold from payments made hereunder any taxes required to be withheld from such payments under federal, state or local law, with such tax withholding generally being required only for deferred compensation for services as an employee.  On any date that shares of Common Stock are paid to a Participant from the Participant’s Company Stock Account (a “Payment Date”), the Value (as defined below) on that date of the Common Stock so delivered will be 

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treated as ordinary compensation income for federal and state income and FICA tax purposes.  To satisfy the required withholding on this amount, if applicable, the Company shall first withhold all or part of any cash simultaneously distributed from the Participant’s Cash Account, and if that is insufficient, the Company shall withhold the number of Shares having a Value equal to the remaining withholding amount.  For purposes of this Section 7(j), the “Value” of a share of Common Stock shall be equal to the closing market price for the Common Stock on the last trading day preceding the Payment Date.
8.Supplemental Retirement Benefit.  Any Executive who elects to defer compensation under this Plan and who also satisfies the eligibility requirements for payment of any benefit under the Company’s Retirement Plan for Non-Bargaining Unit Employees (the “Retirement Plan”) shall qualify for further payment by the Company of supplemental retirement benefits payable as a monthly annuity under this Plan, as provided below:
(a)    Commencement.
(i)    If the Executive is eligible to receive normal retirement benefits under the Retirement Plan based on having reached age 62 at the time of Separation from Service, the annuity shall commence with the first month following the Executive’s Separation from Service.
(ii)    If the Executive is eligible to receive early retirement benefits under the Retirement Plan based on having satisfied the Rule of 70 at the time of Separation from Service, the annuity shall commence with the first month following the later of the Executive’s 55th birthday or the Executive’s Separation from Service.
(iii)    If the Executive is not eligible to receive normal retirement benefits or early retirement benefits as referred to in Section 8(a)(i) or (ii), but is eligible to receive vested benefits under the Retirement Plan, the annuity shall commence with the first month following the Executive’s 62nd birthday.
(iv)    If the Executive’s surviving spouse is eligible to receive death benefits under the Retirement Plan as a result of the Executive’s death before commencement of benefits under this Section 8, the annuity shall commence in the month that benefits would have commenced as provided in this Section 8(a) if the Executive had a Separation from Service on the date of death (or on the Executive’s actual Separation from Service, if earlier) and then survived until benefits had commenced.
(b)    Form of Benefit.
(i)    Annuity Form.  If the Executive elects a form of annuity benefit under the Retirement Plan at least 30 days prior to the first day of the month in which the benefit under this Section 8 is required to commence, the benefit under this Section 8 shall be paid in the same annuity form as selected under the Retirement Plan.  If the Executive’s benefit under this Section 8 commences earlier than the Executive’s benefit under the Retirement Plan, the Executive may, at least 30 days prior to the first day of the month in which the benefit under this Section 8 is required to commence and otherwise in accordance with the rules of the Retirement Plan, elect any of the standard or optional annuity forms of benefit described in 6.01 and 6.02 of the Retirement Plan, other than a joint and survivor annuity upon marriage or remarriage after the annuity starting date.  If the Executive does not make a timely election under this Section 8(b), the benefit under this Section 8 shall be paid in the default annuity form applicable to the Executive under the Retirement Plan.
(ii)    Small Benefit Cash Out.  If the actuarial equivalent lump sum present value of the Executive’s benefit under this Section 8, based on the actuarial assumptions used for determining equivalent benefits under the Retirement Plan at the time of the Executive’s commencement of benefits, is no more than the applicable dollar amount under Internal Revenue Code section 402(g)(1)(B) (which is 

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$16,500 in 2011), the benefit shall be paid as a lump sum in such amount at the time annuity payments would have otherwise commenced under Section 8(a).
(c)    Amount.  The amount payable by the Company each month to the Executive or Executive’s beneficiaries under the Retirement Plan shall be:
(i)    The amount that would be payable at such time under the Retirement Plan assuming that (1) benefits had commenced on the date specified in Section 8(a), (2) benefits were payable in the annuity benefit form determined under Section 8(b), (3) all accrued benefits under the Retirement Plan were payable only in the annuity form as provided in Section 8(d), and (4) all Salary and Bonus deferred by the Executive under this Plan and under the Company’s former Executive Deferred Compensation Plan (the “Prior Plan”) had been “paid” to or “received” by Executive in the year when the deferral was made, provided that all such deferred amounts shall be subject to the other applicable definitions and rules of the Retirement Plan relating to benefit determination; plus
(ii)    The reduction, if any, in the amount of the monthly Social Security benefit payable to the Executive, provided that such reduction results from the fact that compensation deferred under this Plan causes the primary Social Security Benefit payable to the Executive to be reduced, with the amount under this Section 8(c)(ii) calculated assuming commencement of Social Security benefits at the earliest possible time, no earnings after Separation from Service and no projected increases in the national average wage index or cost of living between Separation from Service and commencement of benefits; minus
(iii)    The amount that would actually be payable at such time under the Retirement Plan assuming that (1) benefits had commenced on the date specified in Section 8(a), (2) benefits were payable in the annuity benefit form determined under Section 8(b), and (3) all accrued benefits under the Retirement Plan were payable only in the annuity form as provided in Section 8(d).
(d)    Retirement Plan Lump Sum Election Ignored.  Notwithstanding any election by an Executive to receive a portion of Executive’s Retirement Plan benefit as a lump sum, the amount of the supplemental retirement benefit as determined under Section 8(c) shall be calculated and determined as if Executive were to receive Executive’s entire Retirement Plan accrued benefit in the annuity form determined under Section 8(b).
(e)    Six-Month Minimum Delay.  Notwithstanding the foregoing, no supplemental retirement benefit payments under this Section 8 shall be paid to any Executive until the seventh month following the month of the Executive’s Separation from Service with the Company.  Any payments that would have been paid if not for this Section 8(e) shall be accumulated and paid in full in the seventh month following the month of the Executive’s Separation from Service with the Company together with interest from the date each payment otherwise would have been payable until the date actually paid.  Interest for any period will be paid at the same rate applicable for that period under Section 6(f).
(f)    Waiver of Comparable Benefits Under Prior Plan.  Because amounts deferred under the Prior Plan are taken into account in calculating the benefits payable under this Section 8, acceptance of the benefits under this Section 8 shall be deemed to be a waiver of the comparable benefits set forth in Section 5.7 of the Prior Plan.
9.Administration.
(a)Committee Duties.  This Plan shall be administered by the Organization and Executive Compensation Committee of the Board (the “Committee”).  The Committee shall have responsibility for the general administration of the Plan and for carrying out its intent and provisions.  The Committee shall interpret 

9

the Plan and have such powers and duties as may be necessary to discharge its responsibilities.  The Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Company.
(b)Tax Law Compliance.  The Committee shall have the authority to cancel any Participation Agreement in whole or in part, and immediately distribute any compensation deferred under such Participation Agreement, but only to the extent the Committee determines that deferral of compensation in accordance with such Participation Agreement has or will violate Section 409A of the Internal Revenue Code and therefore has or will require immediate inclusion of such compensation in the income of the Participant.
(c)Binding Effect of Decisions.  The decision or action of the Committee in respect of 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.
10.Claims Procedure.
(a)Claim.  Any person claiming a benefit, requesting an interpretation or ruling under the Plan, or requesting information under the Plan shall present the request in writing to the Committee, which shall respond in writing as soon as practicable.
(b)Denial of Claim.  If the claim or request is denied, the written notice of denial shall state:
(i)The reasons for denial, with specific reference to the Plan provisions on which the denial is based;
(ii)A description of any additional material or information required and an explanation of why it is necessary; and
(iii)An explanation of the Plan’s claim review procedure.
(c)Review of Claim.  Any person whose claim or request is denied or who has not received a response within thirty (30) days may request review by notice given in writing to the Committee.  The claim or request shall be reviewed by the Committee who may, but shall not be required to, grant the claimant a hearing.  On review, the claimant may have representation, examine pertinent documents, and submit issues and comments in writing.
(d)Final Decision.  The decision on review shall normally be made within sixty (60) days.  If an extension of time is required for a hearing or other special circumstances, the claimant shall be notified and the time limit shall be one hundred twenty (120) days.  The decision shall be in writing and shall state the reasons and the relevant Plan provisions.  All decisions on review shall be final and bind all parties concerned.
11.Amendment and Termination of the Plan.
(a)Amendment.  The Board may at any time amend the Plan in whole or in part; provided, however, that no amendment shall without the consent of each affected Participant (i) decrease or restrict the amount credited to any Account maintained under the Plan as of the date of amendment, or (ii) accelerate or decelerate the payment of benefits with respect to amounts credited to any Account as of the date of the amendment.
(b)Termination.  The Board may at any time partially or completely terminate the Plan if, in its judgment, the tax, accounting, or other effects of the continuance of the Plan, or potential payments thereunder, would not be in the best interests of the Company.
(i)Partial Termination.  The Board may partially terminate the Plan by instructing the Committee not to accept any additional Participation Agreements and terminating deferrals under all existing Participation Agreements.  In the event of such a partial termination, the Plan shall continue to operate and be effective with regard to all compensation deferred prior to the effective date of such partial termination.

10

(ii)Complete Termination.  The Board may completely terminate the Plan, provided such termination is covered by an exception (set forth in regulations or other guidance of the Internal Revenue Service) to the prohibition on acceleration of deferred compensation.  In that event, on the effective date of the complete termination, the Plan shall cease to operate and the Company shall determine the balance of each Participant’s Accounts as of the close of business on such effective date.  The Company shall pay out such Account balances to the Participants in a single lump sum payment as soon as practicable after such effective date.
12.Miscellaneous.
(a)Unsecured General Creditor.  The Accounts shall be established solely for the purpose of measuring the amounts owed to Participants or beneficiaries under the Plan.  Participants and their beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Company, nor shall they be beneficiaries of, or have any rights, claims or interests in any mutual funds, other investment products or the proceeds therefrom owned or which may be acquired by the Company.  Except as may be provided in Section 12(b), such mutual funds, other investment products or other assets of the Company shall not be held under any trust for the benefit of the Participants, their beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan.  Any and all of the Company’s assets shall be, and remain, the general, unpledged, unrestricted assets of the Company.  The Company’s obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future, and the rights of Participants and beneficiaries shall be no greater than those of unsecured general creditors of the Company.
(b)Trust Fund.  The Company shall be responsible for the payment of all benefits provided under the Plan.  The Company shall establish one or more trusts, with such trustees as the Board may approve, for the purpose of providing for the payment of such benefits, but the Company shall have no obligation to contribute to such trusts except as specifically provided in the applicable trust documents.  Such trust or trusts shall be irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors.  To the extent any benefits provided under the Plan are actually paid from any such trust, the Company shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Company.
(c)Non-assignability.  Neither a Participant nor any other person shall have the right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate 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 non-assignable and nontransferable.  No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.
(d)Not a Contract of Employment.  The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Company and any Participant, and the Participants (and their beneficiaries) shall have no rights against the Company except as may otherwise be specifically provided herein.  Moreover, nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Company or to interfere with the right of the Company to discipline or discharge the Participant at any time.
(e)Governing Law.  The provisions of this Plan shall be construed and interpreted according to the laws of the State of Oregon, except as preempted by federal law.
(f)Validity.  In case any provision of this Plan shall be held 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 and invalid provisions had never been inserted herein.
(g)Notice.  Any notice or filing required or permitted to be given to the Company or the Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified 

11

mail, to the Secretary of the Company.  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.
(h)Successors.  The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns.  The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity.
The foregoing restatement of the Plan was approved by the Board of Directors of Northwest Natural Gas Company on and effective as of September 24, 2015.

NORTHWEST NATURAL GAS COMPANY

By:  ___________________________________    

Attest:  ___________________________                

12exhibit_employmentagreement.htm

 

NEW BUFFALO SAVINGS BANK

EMPLOYMENT AGREEMENT

This Agreement (this “Agreement”) is made effective as of the 29th day of October, 2015 (the “Effective Date”), by and between New Buffalo Savings Bank (the “Bank”), a federally-chartered institution with its principal offices at 45 North Whittaker Street, New Buffalo, Michigan 49117, and Richard C. Sauerman (“Executive”).  When used in this Agreement any reference to the “Company” shall refer to New Bancorp.

 

WITNESSETH:

 

WHEREAS, the Bank wishes to assure itself of the services of Executive for the period provided in this Agreement; and

 

WHEREAS, Executive is willing to serve in the employ of the Bank on a full-time basis as its President and Chief Executive Officers on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:

 

	
1.  

	
POSITION AND RESPONSIBILITIES 

 

During the term of Executive’s employment hereunder, Executive agrees to serve as the President and Chief Executive Officer of the Bank.  Executive shall perform administrative and management services for the Bank which are customarily performed by persons in a similar executive officer capacity.  Executive shall be responsible for the overall management of the Company and the Bank and shall be responsible for establishing the business objectives, policies and strategic plan of the Company and the Bank.  Executive shall also be responsible for providing leadership and direction to all departments or divisions of the Company and the Bank, and shall be the primary contact between the Board of Directors and the staff of the Company and the Bank.  During the term of this Agreement, Executive also agrees to serve as a director of the Company and the Bank and, if elected, as an officer and director of any subsidiary of the Bank or the Company.  Executive’s principal place of employment shall be at the Bank’s principal executive offices.  The Bank shall provide Executive, at his principal place of employment, with support services and facilities suitable to his position with the Bank and necessary or appropriate in connection with the performance of his duties under this Agreement.

 

	
2.  

	
TERM OF EMPLOYMENT

 

(a) The term of this Agreement and the period of Executive’s employment under this Agreement will begin as of the Effective Date and will continue for a period of thirty-six (36) full calendar months thereafter.  As of the first day of April each year (the “Renewal Date”), beginning with the first April 1 following the Effective Date, this Agreement shall renew for an additional year such that the remaining term shall again be thirty-six (36) full calendar months provided, however, that the disinterested members of the Board of Directors of the Bank (the “Board of Directors”) shall at least thirty (30) days before the Renewal Date conduct a comprehensive performance evaluation and review of Executive for purposes of determining whether to extend this Agreement.  The Board of Directors shall give Executive notice of its decision whether or not to renew this Agreement at least ten (10) days prior to the Renewal Date.

 

 

  

  

  

 

(b) Notwithstanding anything contained in this Agreement to the contrary, either Executive or the Bank may terminate Executive’s employment with the Bank at any time during the term of this Agreement, subject to the terms and conditions of this Agreement.

 

(c) In the event of the Executive’s termination of employment under this Agreement for any reason, such termination shall also constitute the Executive’s resignation from the Board of Directors of the Bank, as well as from the Board of Directors of the Company.

 

	
3.  

	
COMPENSATION AND REIMBURSEMENT

 

(a) The compensation specified under this Agreement shall constitute consideration paid by the Bank in exchange for duties described in Section 1 of this Agreement.  The Bank shall pay Executive, as compensation, a salary of not less than $160,000 per year (“Base Salary”).  Base Salary shall include any amounts of compensation deferred by Executive under any employee benefit plan or deferred compensation arrangement maintained by the Bank.  Base Salary shall be payable bi-weekly or, if different, in accordance with the Bank’s customary payroll practices.  During the term of this Agreement, Executive’s Base Salary shall be reviewed at least annually by December 31st of each year.  The review shall be conducted by the Board of Directors or by a committee designated by the Board of Directors.  The committee or the Board of Directors may increase, but not decrease, Executive’s Base Salary at any time, except for a decrease not in excess of any decrease generally applicable to all officers of the Bank.  Any increase in Base Salary shall become the “Base Salary” for purposes of this Agreement.  The Board of Directors may engage the services of an independent consultant to assist in the determination of the appropriate Base Salary.  In addition to the Base Salary provided in this Section 3, the Bank shall also provide Executive with all other benefits as are provided uniformly to full-time employees of the Bank, on a basis (including cost) no less favorable than the benefits are provided to other senior officers of the Bank.

 

(b) In addition to the Base Salary provided for in Section 3(a), the Bank will provide Executive with the opportunity to participate in employee benefit plans, arrangements and perquisites substantially equivalent to those in which Executive was participating or otherwise deriving a benefit from immediately prior to the Effective Date, and any other employee benefit plans, arrangements and perquisites suitable for the Bank’s senior executives adopted by the Bank subsequent to the Effective Date, and the Bank will not, without Executive’s prior written consent, make any changes in the plans, arrangements or perquisites which would adversely affect Executive’s rights or benefits thereunder, without separately providing for an arrangement that ensures Executive receives or will receive the economic value that Executive would otherwise lose as a result of such adverse effect, unless the changes apply equally to all other employees or senior officers of the Bank.  Without limiting the generality of the foregoing provisions of this Section 3(b), Executive shall be entitled to participate in or receive benefits under any employee benefit plans, whether tax-qualified or otherwise, including, but not limited to, retirement plans, supplemental retirement plans, deferred compensation plans, pension plans, profit-sharing plans, employee stock ownership plans, stock award or stock option plans, health-and-accident plans, medical coverage or any other employee benefit plan or arrangement made available by the Bank in the future to its senior executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of the plans and arrangements (including designation by the Board of Directors of eligibility to participate, if applicable).  Executive shall also be entitled to participate in any incentive compensation or bonus plan or arrangement of the Company or the Bank in which Executive is eligible to participate (and he shall be entitled to a pro rata distribution under any incentive compensation or bonus plan as to any year in which a termination of employment occurs, other than Termination for Just Cause).  Nothing paid to Executive under the plans or arrangements will be deemed to be in lieu of other compensation to which Executive is entitled under this Agreement.

 

 

  

2

  

 

(c) In addition to the Base Salary provided for by Section 3(a) and other compensation and benefits provided for by Section 3(b), the Bank shall pay or reimburse Executive for all reasonable expenses incurred by Executive in performing his obligations under this Agreement in accordance with the Bank’s reimbursement policies, provided that the reimbursement is made within one calendar year following the date on which the expense was incurred and provided further that the right to reimbursement is not exchanged for another benefit.  The amount of expenses eligible for reimbursement during the calendar year may not affect the expenses eligible for reimbursement in any other calendar year.

 

(d) Executive shall be entitled to paid time off in accordance with the standard policies of the Bank for senior executive officers, but in no event less than 25 days paid time off during each year of employment.  Executive shall receive his Base Salary and other benefits during periods of paid leave.  Executive shall also be entitled to paid legal holidays in accordance with the policies of the Bank.  Executive shall also be entitled to sick leave in accordance with the policies of the Bank, but in no event less than the number of days of sick leave per year to which Executive was entitled at the Effective Date.

 

	
4.  

	
OUTSIDE ACTIVITIES

 

During the term of his employment under this Agreement, except for periods of absence occasioned by illness, reasonable vacation periods and reasonable leaves of absence approved by the Board of Directors, Executive shall devote substantially all his business time, attention, skill, and efforts to the faithful performance of his duties hereunder.  Executive also may serve as a member of the board of directors of business organizations, trade associations, and community and charitable organizations, subject to the annual approval of the Board of Directors; provided that in each case the service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the reputation of the Bank or present any conflict of interest.  Executive shall provide to the Board of Directors annually a list of all organizations for which Executive serves as a director or in a similar capacity for purposes of obtaining the approval of the Board of Directors of Executive’s service on the boards of such organizations (it being understood that membership in social, religious, charitable or similar organizations does not require approval of the Board of Directors pursuant to this Section 4).

 

 

  

3

  

 

	
5.  

	
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION

 

(a) Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 5 shall apply.  As used in this Agreement, an “Event of Termination” shall mean and include any of the following:

 

(i) the termination by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 6 (Termination for Just Cause), or termination governed by Section 7 (Termination Due to Disability or Death), or termination governed by Section 8 (Termination Upon Retirement); or

 

(ii) Executive’s resignation from the Bank’s employ for any of the following reasons (each shall be deemed a “Good Reason”):

 

	
(A)  

	
the failure to elect or reelect or to appoint or reappoint Executive to the position set forth under Section 1 of this Agreement or the failure to nominate or re-nominate Executive as a director of the Company or the Bank;

 

	
(B)  

	
a material change in Executive’s functions, duties, or responsibilities with the Bank, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes described in Section 1 of this Agreement;

 

	
(C)  

	
a relocation of Executive’s principal place of employment by more than 30 miles from the main office of the Bank;

 

	
(D)  

	
a material reduction in the benefits and perquisites of Executive from those being provided as of the Effective Date, other than a reduction pursuant to Section 3(a) of this Agreement or a reduction that is part of a Bank-wide reduction in pay or benefits;

 

	
(E)  

	
a liquidation or dissolution of the Company or the Bank, other than a liquidation or dissolution which does not affect the status of Executive; or

 

	
(F)  

	
a material breach of this Agreement by the Bank.

 

Upon the occurrence of any event described in clauses (ii)(A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than thirty (30) days prior written Notice of Termination, as defined in Section 9(a), given within ninety (90) days after the event giving rise to said right to elect.  Notwithstanding the preceding sentence, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his rights under this Agreement by virtue of the fact that Executive has submitted his resignation but has remained in the employ of the Bank, provided Executive is engaged in good faith discussions to resolve the occurrence of any event described in clauses (ii)(A), (B), (C), (D), (E) or (F) above.  During this thirty (30) day period, the Bank and the Company shall have the right to cure the Good Reason, and in the event that the Bank cures said Good Reason, Executive shall no longer have the right to terminate employment and receive a payment under this Agreement.

 

 

  

4

  

 

(iii) The termination of Executive’s employment (other than Termination for Just Cause) by the Bank (or any successor thereto) on the effective date of, or at any time following a Change in Control, or Executive’s resignation from the Bank’s employ due to  Good Reason (subject to Executive’s notice of Good Reason and the Company’s or the Bank’s right to cure, as set forth in Section 5(a)(ii)) on the effective date of, or at any time following a Change in Control, during the term of this Agreement.  For these purposes, a Change in Control shall mean the occurrence of any of the following events:

 

	
  

	
(A)

	
Merger:  The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into the Bank or the Company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation;

 

	
  

	
(B)

	
Acquisition of Significant Share Ownership:  There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company’s or the Bank’s voting securities; provided, however, this clause (B) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

 

	
  

	
(C)

	
Change in Board Composition:  Individuals who constitute the Company’s or the Bank’s Board of Directors on the Effective Date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board shall be considered, for purposes of this clause (C), as though he or she was a member of the Incumbent Board; or

 

	
  

	
(D)

	
Sale of Assets:  The Company or the Bank sells to a third party all or substantially all of its assets.

 

 

  

5

  

 

(b) Upon the occurrence of an Event of Termination under Sections 5(a)(i) or 5(a)(ii) above, on the Date of Termination, as defined in Section 9(b) of this Agreement, the Bank shall be obligated to pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, an amount equal to the sum of: (i) his earned but unpaid salary as of the date of his termination of employment with the Bank; (ii) the benefits, if any, to which he is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Company’s or the Bank’s officers and employees; and (iii) the remaining payments of Base Salary that Executive would have earned, in accordance with Section 3(a) if he had continued his employment with the Bank for the remaining term of this Agreement plus the bonus or incentive award Executive would have received in each year during the remaining term in an amount equal to the average bonus and/or incentive award earned by him over the three calendar years preceding the year in which the termination occurs (in determining the bonus and/or incentive portion of the payment, the total amount will be determined by: adding the bonuses and/or incentives earned in each of the last three years; dividing the total by 36; and then multiplying the result by the number of whole months in the remaining unexpired term of this Agreement).  Any payments hereunder shall be made in a lump sum within thirty (30) days after the Date of Termination, or in the event that Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) applies to the payment, and Executive is considered a “Specified Employee” under Code Section 409A, on the first day of the seventh month following the Date of Termination.  The payments shall not be reduced in the event Executive obtains other employment following termination of employment.

 

(c) Upon the occurrence of an Event of Termination under Section 5(a)(iii), on the Date of Termination, as defined in Section 9(b) of this Agreement, the Bank shall be obligated to pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, an amount equal to the sum of: (i) his earned but unpaid salary as of the date of his termination of employment with the Bank; (ii) the benefits, if any, to which he is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s or Company’s officers and employees; and (iii) an amount equal to three (3) times Executive’s “base amount,” as that term is defined for purposes of Code Section 280G.  Any payments hereunder shall be made in a lump sum within five (5) days after the Date of Termination, or in the event that Code Section 409A applies to the payment and Executive is considered a “Specified Employee” under Code Section 409A, on the first day of the seventh month following the Date of Termination.  The payments shall not be reduced in the event Executive obtains other employment following termination of employment.

 

 (d)           Upon the occurrence of an Event of Termination, the Bank will cause to be continued at its expense non-taxable medical and dental coverage and life insurance substantially identical to the coverage maintained by the Bank for Executive and his family prior to Executive’s termination.  The coverage shall continue for the remaining term of this Agreement in the case of an Event of Termination under Sections 5(a)(i) or 5(a)(ii), and  for a period of thirty-six (36) months from the Date of Termination in the case of an Event of Termination under Section 5(a)(iii) of this Agreement.  If the Bank cannot provide the benefits set forth in this Section 5(d) because Executive is no longer an employee, applicable rules and regulations prohibit the benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination.  The cash payment shall be made in a lump sum within thirty (30) days after the later of Executive’s date of termination or the effective date of the rules or regulations prohibiting the benefits or subjecting the Bank to penalties.

 

 

  

6

  

 

(e) Executive shall be entitled to voluntarily terminate his employment other than for Good Reason at any time during the term of this Agreement, provided, however, that Executive shall not be entitled to any compensation or benefits under this Section 5 as a result of such termination.

(f) Any payments or benefits under Sections 5(a)(i) or 5(a)(ii) of the  Agreement shall be contingent on Executive’s execution and non-revocation of a mutual release (the “Mutual Release”), satisfactory to the Company and the Bank, of all claims that Executive or any of Executive’s affiliates or beneficiaries may have against the Company and the Bank or any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to Executive’s employment relationship, including claims under the Age Discrimination in Employment Act (“ADEA”), but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement.  The Company and the Bank shall also execute the Mutual Release, which shall release Executive, his affiliates and beneficiaries from any and all claims rights, demands, causes of action, suits, arbitrations or grievances relating to Executive’s employment relationship, provided, however, that if the Company or the Bank refuses to execute the Mutual Release in the time frame set forth below, Executive’s obligation to execute and not revoke the Mutual Release as a precondition to receiving such payments or benefits under Sections 5(a)(i) or 5(a)(ii) shall terminate.  Notwithstanding the foregoing sentence, the Mutual Release shall not release Executive for (i) acts of fraud; (ii) felonious acts for which Executive is convicted, enters a plea of nolo contendere, or enters into a pre-trial diversion or similar program; (iii) intentional misconduct resulting in financial harm to the Company or the Bank; or (iv) willful violation of any material federal banking law or regulation.  In order to comply with the requirements of Section 409A of the Code and the ADEA, the release must be provided to Executive no later than the date of his Separation from Service and Executive and the Company and the Bank must execute the Mutual Release within twenty-one (21) days after the date of termination without subsequent revocation by Executive within seven (7) days after execution of the release.  The Section 5(f) shall not apply with respect to payments or benefits under Section 5(a)(iii) of this Agreement.

 

(g) Notwithstanding the foregoing, to the extent required by regulations or interpretations of the Office of the Comptroller of the Currency (“OCC”), all severance payments under the Agreement shall not exceed three (3) times Executive’s average annual compensation (as defined in such regulations or interpretations) over the most recent five (5) taxable years.

 

 

  

7

  

 

	
6.  

	
TERMINATION FOR JUST CAUSE 

 

(a) The term “Termination for Just Cause” shall mean termination because of Executive’s personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement.

 

(b) Notwithstanding Section 6(a), the Bank may not terminate Executive for Just Cause unless and until there shall have been delivered to him a Notice of Termination which shall include a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors at a meeting of the Board of Directors called and held for that purpose, finding that in the good faith opinion of the Board of Directors, Executive was guilty of conduct justifying Termination for Just Cause.  Executive shall not have the right to receive compensation or other benefits for any period after Termination for Just Cause.  During the period beginning on the date of the Notice of Termination for Just Cause pursuant to Section 6 hereof through the Date of Termination, any unvested stock options and related limited rights granted to Executive under any stock option plan shall not be exercisable nor shall any unvested awards granted to Executive under any stock benefit plan of the Company or the Bank or any subsidiary or affiliate thereof, vest.  At the Date of Termination, any such unvested stock options and related limited rights and any such unvested awards shall become null and void and shall not be exercisable by or delivered to Executive at any time subsequent to the Termination for Just Cause.  Executive shall not, as a result of Termination for Just Cause, forfeit any rights to compensation or benefits, including benefits under qualified or non-qualified retirement or deferred compensation plans or programs, earned and vested as of the date of termination.

 

	
7.  

	
TERMINATION FOR DISABILITY OR DEATH

 

(a) The Bank or Executive may terminate Executive’s employment after having established Executive’s Disability.  For purposes of this Agreement, “Disability” means a physical or mental infirmity that impairs Executive’s ability to substantially perform his duties under this Agreement and that results in Executive’s becoming eligible for long-term disability benefits under a long-term disability plan of the Company or the Bank (or, if the Company or the Bank has no such plan in effect, that impairs Executive’s ability to substantially perform his duties under this Agreement for a period of one hundred eighty (180) consecutive days), provided, however, that in order to receive the payments from the Company or the Bank under Section 7(b) of this Agreement, Executive’s “Disability” shall also satisfy the requirements of Code Section 409A.  The Board of Directors shall determine in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant, whether or not Executive is and continues to be disabled for purposes of this Agreement.  As a condition to any benefits, the Board of Directors may require Executive to submit to such physical or mental evaluations and tests as it deems reasonably appropriate, at the Bank’s expense.

 

(b) In the event of Disability, Executive’s obligation to perform services under this Agreement will terminate.  In the event of such termination, Executive shall receive the benefits provided under any disability program sponsored by the Company or the Bank.  To the extent such benefits are less than Executive’s Base Salary, as defined in Section 3(a) of this Agreement on the effective Date of Termination and less than sixty-six and two-thirds percent (66 2/3%) of Executive’s Base Salary after the first year following termination, Executive shall receive as a supplement to the disability benefit the difference between the benefits provided under any disability program sponsored by the Company or the Bank and (x) his Base Salary, as defined in Section 3(a), at the rate in effect on the Date of Termination for a period of one (1) year following the Date of Termination by reason of Disability, and (y) sixty-six and two-thirds percent (66 2/3%) of Executive’s Base Salary after the first year following termination through the earliest to occur of the date of Executive’s death, recovery from the Disability, the date Executive attains age 65, or the expiration of the remaining term of the Agreement.  Notwithstanding the foregoing, the Bank may fulfill its obligation hereunder by purchasing a long-term disability policy in the name of (and owned by) Executive providing such coverage.

 

 

  

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(c) In the event of Executive’s death during the term of this Agreement, his estate, legal representatives or named beneficiary or beneficiaries (as directed by Executive in writing) shall be paid Executive’s Base Salary, as defined in Section 3(a), at the rate in effect at the time of Executive’s death through the end of the calendar month in which Executive’s death occurs, and the Bank will continue to provide Executive’s family the same medical, dental, and other health benefits that were provided by the Bank to Executive’s family immediately prior to Executive’s death, on the same terms, including cost, as if Executive were actively employed by the Bank, except to the extent the terms (including cost) of such benefits are changed in their application to all continuing employees of the Bank, such coverage to continue for a period of one (1) year after the date of Executive’s death.  If the Bank cannot provide the benefits set forth in this paragraph because Executive is no longer an employee, applicable rules and regulations prohibit the benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive’s family a cash lump sum payment reasonably estimated to be equal to the value of the benefits or the value of the remaining benefits at the time of the determination.  The cash payment shall be made in a lump sum within thirty (30) days after the later of Executive’s date of death or the effective date of the rules or regulations prohibiting the benefits or subjecting the Bank to penalties.

 

	
8.  

	
TERMINATION UPON RETIREMENT

 

Termination of Executive’s employment based on “Retirement” shall mean termination of Executive’s employment by the Bank on or after age 65, Executive’s voluntary termination at any time after Executive reaches age 65, or retirement at any time as agreed upon by the Board of Directors and Executive.  Upon termination of Executive based on Retirement, no amounts or benefits shall be due Executive under this Agreement, and Executive shall be entitled to all benefits under any retirement plan of the Bank and other plans to which Executive is a party, or in accordance with any other retirement arrangements approved by the Board of Directors.

	
9.  

	
NOTICE

 

(a) Any notice required under this Agreement shall be in writing and hand-delivered to the other party.  Any termination by the Bank or by Executive shall be communicated by Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon.

 

 

  

9

  

 

(b)  “Date of Termination” shall mean (A) if Executive’s employment is terminated for Disability, thirty (30) days after a Notice of Termination is given (provided that he shall not have returned to the performance of his duties on a full-time basis during the thirty (30) day period), and (B) if his employment is terminated for any other reason, the date specified in the Notice of Termination, provided however, in either case, the “Date of Termination” shall not occur prior to the date on which Executive has a “Separation from Service” within the meaning of Code Section 409A.

 

(c) If the party receiving a Notice of Termination desires to dispute or contest the basis or reasons for termination, the party receiving the Notice of Termination must notify the other party within thirty (30) days after receiving the Notice of Termination that the a dispute exists, and shall pursue the resolution of the dispute in good faith and with reasonable diligence pursuant to Section 20 of this Agreement. During the pendency of any dispute, neither the Company nor the Bank shall be obligated to pay Executive compensation or other payments beyond the Date of Termination.

 

	
10.  

	
POST-TERMINATION OBLIGATIONS

 

Executive shall, upon reasonable notice, furnish any information and assistance honestly and in good faith to the Bank or the Company as may reasonably be required by the Company or the Bank in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.  All payments and benefits to Executive under this Agreement shall be subject to Executive’s compliance with this Section 10 for one (1) full year after the earlier of the expiration of this Agreement or termination of Executive’s employment with the Bank.

 

	
11.  

	
NON-COMPETITION AND NON-DISCLOSURE

 

(a) As a material inducement of the Bank to enter into this Agreement, upon any termination of Executive’s employment hereunder pursuant to the terms of this Agreement, other than a termination of Executive’s employment under Section 5(a)(iii) of this Agreement, Executive agrees not to compete with the Bank, the Company or any affiliate of the Bank or the Company (collectively said entities are referred to as the “Bank” for purposes of this Section 11) for a period of twelve (12) months following such termination in any county where the Bank has one or more branches.  Executive agrees that during this period and within any county where the Bank has one or more branches, Executive shall not work for or advise, consult or otherwise serve with, directly or indirectly, any entity whose business materially competes with the depository, lending or other business activities of the Bank.  Executive further agrees that for a period of twelve (12) months following any termination of employment, he shall not directly or indirectly, solicit, hire, or entice any of the following persons or entities to cease, terminate, or reduce any relationship with the Bank or to divert any business from the Bank: (i) any person who was an employee of the Bank during the term of this Agreement; or (ii) any customer or client of the Bank.  Further, Executive will not directly or indirectly disclose the names, addresses, telephone numbers, compensation, or other arrangements between the Bank and any person or entity described in (a)(i) and (a)(ii) of this Section 11.  The parties hereto, recognizing that irreparable injury will result to the Bank, its business and property in the event of Executive’s breach of this Section 11(a), agree that in the event of any such breach by Executive, the Bank will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive, Executive’s partners, agents, servants, employees and all persons acting for or under the direction of Executive.  Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies available to the Bank for such breach or threatened breach, including the recovery of damages from Executive.

 

 

  

10

  

 

(b) Executive recognizes and acknowledges that the knowledge of the business activities, plans for business activities, and all other proprietary information of the Bank as it may exist from time to time, are valuable, special and unique assets of the business of the Bank.  Executive will not, during or after the term of his employment, disclose any knowledge of the past, present, planned or considered business activities or any other similar proprietary information of the Bank to any person, firm, corporation, or other entity for any reason or purpose whatsoever unless expressly authorized by the Board of Directors or required by law.  Notwithstanding the foregoing, Executive may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Bank. Further, Executive may disclose information regarding the business activities of the Bank to any bank regulator having regulatory jurisdiction over the activities of the Bank, pursuant to a formal regulatory request.  In the event of a breach or threatened breach by Executive of the provisions of this Section 11, the Bank will be entitled to an injunction restraining Executive from disclosing, in whole or in part, the knowledge of the past, present, planned or considered business activities of the Bank, or any other similar proprietary information, or from rendering any services to any person, firm, corporation, or other entity to whom such knowledge, in whole or in part, has been disclosed or is threatened to be disclosed.  Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies available to the Bank for such breach or threatened breach, including the recovery of damages from Executive.

 

(c) The provisions of this Section 11 are intended to protect the business, operations and assets of the Bank, and are a material inducement to the Bank to enter into this Agreement.  Executive acknowledges that the provisions of this Section 11 are an essential part of this Agreement and are reasonably necessary for the protection of the business, operations and assets of the Bank.

 

	
12.  

	
SOURCE OF PAYMENTS 

 

All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Bank.  The Company, however, unconditionally guarantees payment and provision of all amounts and benefits due hereunder to Executive and, if the amounts and benefits due from the Bank are not timely paid or provided by the Bank, the amounts and benefits shall be paid or provided by the Company.

 

	
13.  

	
EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS 

 

This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement between the Bank or any predecessor of the Bank and Executive, except that this Agreement shall not affect or operate to reduce any benefit, compensation, tax indemnification or other provision inuring to the benefit of Executive under any agreement between Executive, the Bank or the Company.  No provision of this Agreement shall be interpreted to mean that Executive is subject to receiving fewer benefits than those available to him without reference to this Agreement.

 

 

  

11

  

 

	
14.  

	
NO ATTACHMENT

 

(a) Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and of no effect.

 

(b) This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bank and their respective successors and assigns.

 

	
15.  

	
MODIFICATION AND WAIVER

 

(a) This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

 

(b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No written waiver shall be deemed a continuing waiver unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other than that specifically waived.

 

	
16.  

	
REQUIRED PROVISIONS

 

(a)           The Bank may terminate Executive’s employment at any time, but any termination by the Board of Directors other than Termination for Just Cause as defined in Section 5 of this Agreement shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after Termination for Just Cause.

 

(b)           If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) [12 USC §1818(e)(3)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act (the “FDI Act”), the Bank’s obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may in its discretion (i) pay Executive all or part of the compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

 

(c)           If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) [12 USC §1818(e)(4)] or 8(g)(1) [12 USC §1818(g)(1)] of the FDI Act, all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

 

 

  

12

  

 

(d)           If the Bank is in default as defined in Section 3(x)(1) [12 USC §1813(x)(1)] of the FDI Act, all obligations of the Bank under this Agreement shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

 

(e)           All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the Bank, (i) by the Comptroller of the Currency (the “Comptroller”) or his or her designee, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) [12 USC §1823(c)] of the FDI Act; or (ii) by the Comptroller or his or her designee at the time the Comptroller or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Comptroller to be in an unsafe or unsound condition.  Any rights of the parties that have already vested, however, shall not be affected by such action.

 

(f)           Any payments made to Executive pursuant to this Agreement or otherwise are subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and any rules and regulations promulgated thereunder, including 12 C.F.R. Part 359, and to the extent applicable, 12 C.F.R. §563.39.

 

(g)           Notwithstanding anything else in this Agreement to the contrary, Executive’s employment shall not be deemed to have been terminated unless and until Executive has a Separation from Service within the meaning of Code Section 409A.  For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that either no further services will be performed by Executive after the date of termination (whether as an employee or as an independent contractor) or the level of further services performed is less than fifty (50) percent of the average level of bona fide services in the thirty-six (36) months immediately preceding the termination.  For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii).

 

	
17.  

	
SEVERABILITY

 

If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provisions of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.

 

	
18.  

	
HEADINGS FOR REFERENCE ONLY

 

The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

 

 

  

13

  

 

	
19.  

	
GOVERNING LAW

 

This Agreement shall be governed by the laws of the State of Michigan, without regard to its conflict of law principles, unless superseded by federal law or otherwise specified herein.

 

	
20.  

	
ARBITRATION

 

Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil litigation and without any trial by jury to resolve such claims, conducted by a single arbitrator sitting in a location selected by Executive and the Bank within fifty (50) miles from the main office of the Bank, in accordance with the rules of the American Arbitration Association’s National Rules for the Resolution of Employment Disputes (“National Rules”) then in effect.  The Bank shall provide a list of three or more arbitrators to Executive from which Executive shall select the arbitrator.  If the parties are unable to agree within fifteen (15) days from the date the Bank presents the list to Executive, the arbitrator shall be appointed for them from a panel of arbitrators selected in accordance with the National Rules.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

 

	
21.  

	
PAYMENT OF COSTS AND LEGAL FEES AND REINSTATEMENT OF BENEFITS

 

In the event any dispute or controversy arising under or in connection with Executive’s termination is resolved in favor of Executive, whether by judgment, arbitration or settlement, Executive shall be entitled to the payment of:  (1) all legal fees incurred by Executive in resolving the dispute or controversy; (2) any back-pay, including salary, bonuses and any other cash compensation, fringe benefits and any compensation and benefits due Executive under this Agreement; and (3) any other compensation otherwise due Executive as a result of a breach of this Agreement by the Bank.  In the event any dispute or controversy arising under or in connection with Executive’s termination is resolved in favor of the Bank, whether by judgment, arbitration or settlement, each party shall be responsible for its own legal fees incurred in resolving such dispute or controversy.

 

	
22.  

	
INDEMNIFICATION 

 

The Bank and the Company shall provide Executive (including his heirs, executors and administrators) with coverage under a standard directors’ and officers’ liability insurance policy at its expense.  The Bank shall indemnify Executive (and his heirs, executors and administrators) to the fullest extent permitted under its Articles of Incorporation, Bylaws and applicable law against all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having been a director or officer of the Bank (whether or not he continues to be a director or officer at the time of incurring the expenses or liabilities), the expenses and liabilities to include, but not be limited to, advancement of legal fees and expenses, judgments, court costs and attorneys’ fees and the cost of reasonable settlements.  Any such indemnification shall be made consistent with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and the regulations issued thereunder in 12 C.F.R. Part 359.

 

 

  

14

  

 

	
23.  

	
SUCCESSOR TO THE BANK

 

The Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.

 

	
24.  

	
NON WAIVER

 

The failure of one party to insist upon or enforce strict performance by the others of any provision of this Agreement or to exercise any right, remedy or provision of this Agreement will not be interpreted or construed as a waiver or relinquishment to any extent of such party’s right to enforce or rely upon same in that or any other instance.

 

[signature page follows]

 

  

15

  

IN WITNESS WHEREOF the Bank and Executive have signed (or caused to be signed) this Agreement this 29th day of October, 2015.

 

	
Attest:

	
New Buffalo Savings Bank

	  	  
	  	  
	/s/ David Blum	
By: /s/ Jeffrey L. Vickers

	
Secretary

	
Title: Chairman of the Board of Directors

	  	  
	  	  
	
Attest:

	
Executive

	  	  
	/s/ David Blum	/s/ Richard C. Sauerman  
	
Secretary

	
Richard C. Sauerman

	  	  
	  	  
	  	
New Bancorp

	  	
(The Company is executing this Agreement only for purposes of acknowledging the obligations Attest:

of the Company hereunder.)

	  	  
	/s/ David Blum	
By:   /s/ Jeffrey L. Vickers

	
Secretary

	
Title: Chairman of the Board of Directors

  

16

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