Document:

Amendment Deed
 Supplementary Terms Notice
 
	
             
 
	
            Perpetual Trustees Consolidated Limited

Crusade Management Limited

St.George Bank Limited

St.George Custodial Pty Limited

P.T. Limited

The Bank of New York
 
	
            Crusade Global Trust No.2 of 2005 
 
	
            Deutsche Bank Place

Corner Hunter and Phillip Streets

Sydney  NSW  2000

Australia

Tel  61 2 9230 4000

Fax  61 2 9230 5333

www.aar.com.au

 

© Copyright Allens Arthur Robinson 2006

 
 

 

 

	
            
 Amendment Deed
 Supplementary Terms Notice
 	
             
 
	
             
 

 

 

 

Table of Contents

	
            1.
 	
            
            Definitions and Interpretation
 	
            
            
            1
 
	
             
	
            1.1
 	
            Definitions
 	
            
            1
 
	
             
	
            1.2
 	
            Interpretation
 	
            1
 
	
            2.
 	
            
            Amendments
 	
            
            2
 
	
            3.
 	
            
            Confirmation
 	
            
            2
 
	
            4.
 	
            
            Effective Date
 	
            
            2
 
	
            5.
 	
            
            Limitation of liability – Security Trustee
 	
            
            2
 
	
            6.
 	
            
            Note Trustee's liability
 	
            
            3
 
	
            7.
 	
            
            Governing law and jurisdiction
 	
            
            3
 
	
            8.
 	
            
            Counterparts
 	
            
            3
 
						
        

 

 

 

	
             
 	
            Page (i)
 

 

 

	
            
 Amendment Deed
 Supplementary Terms Notice
 	
             
 
	
             
 

 

 

 

 

	
             
	
            Date
 	
            
            29 September 2006
 	
             

	
             
	
            Parties
 	
             
 	
             

	
             
	
            1.               
 	
            Perpetual Trustees Consolidated Limited (ABN 81 004 029 841) of Level 12, Angel Place, 123 Pitt Street, Sydney, New South Wales 2000 in its capacity as trustee of the Crusade Global Trust No.1 of 2005 (Trustee);
 	
             

	
             
	
            2.               
 	
            Crusade Management Limited (ABN 90 072 715 916) of 4-16 Montgomery Street, Kogarah, Sydney, New South Wales 2217 (Manager);
 	
             

	
             
	
            3.               
 	
            St George Bank Limited (ABN 92 055 513 070) of 4-16 Montgomery Street, Kogarah, New South Wales 2217 (St.George);
 	
             

	
             
	
            4.               
 	
            St George Custodial Pty Limited (ABN 87 003 347 411) of 4-16 Montgomery Street, Kogarah, New South Wales 2217 (Custodian);
 	
             

	
             
	
            5.               
 	
            P.T Limited (ABN 67 004 454 666) of Level 12, Angel Place, 123 Pitt Street, Sydney, New South Wales 2000 (Security Trustee); and
 	
             

	
             
	
            6.               
 	
            The Bank of New York of 101 Barclay Street, Floor 21 West, New York, New York, 10286, United States of America (the Note Trustee).
 	
             

	
             
	
            Recitals
 	
             
 	
             

	
             
	
            A              
 	
            The parties are parties to a Supplementary Terms Notice dated 12 September 2005 as amended (the Supplementary Terms Notice) in relation to the Crusade Global Trust No.2 of 2005 (the Relevant Trust).
 	
             

	
             
	
            B                
 	
            The parties wish to amend the Supplementary Terms Notice in the manner set out in this deed. 

             
 	
             

	
            1.
 	
            Definitions and Interpretation
 
	
            1.1
 	
            Definitions
 
					

Words and expressions defined in the Supplementary Terms Notice have the same meaning when used in this deed unless the context otherwise requires or unless otherwise defined in this deed.

	
            1.2
 	
            Interpretation
 

Clause 2 of the Supplementary Terms Notice applies as if incorporated in this deed and as if references in the Supplementary Terms Notice were references to this deed.

 

 

	
             
 	
            Page 1
 

 

 

	
            
 Amendment Deed
 Supplementary Terms Notice
 	
             
 
	
             
 

 

 

 

	
            2.
 	
            Amendments
 

The definition of Mortgage Insurer in clause 2.1 of the Supplementary Terms Notice is amended by inserting the words ", or any other mortgage insurer which the Designated Rating Agencies confirm will not, if that mortgage insurer provides Mortgage Insurance in respect of any Purchased Receivable, result in the downgrade or withdrawal of rating of any Notes" after the words "the Commonwealth of Australia", in that clause.  

	
            3.
 	
            Confirmation
 	
             

 

	
             
	(a)	
            
            The Manager confirms that:
	
             
	
             
	
             
 	
        (i)
	
             it has complied with clause 33.1 of the Master Trust Deed in respect of the amendments contemplated by this deed on the basis that the amendments to the Supplementary Terms Notice made by this Deed are appropriate and expedient as a consequence of a proposed replacement of a Mortgage Insurer for the Relevant Trust and are desirable to enable the provisions of the Supplementary Terms Notice to be more conveniently, advantageously and economically administered; 
 	
             

	
             
	
             
 	
        (ii)
	
            it has fully complied with clause 33.4 of the Master Trust Deed and clause 19.1 of the Note Trust Deed; and
 	
             

	
             
	
             
 	
        (iii)
	
            it is of the belief that the amendments contemplated by this deed are not materially prejudicial to the interests of the US$ Noteholders as a whole. 
 	
             

	
             
	
             
 	
        (b)
	
            The Manager instructs and directs the Trustee to enter into this deed and into novations of and amendments to any Mortgage Insurance Policy in relation to the replacement of St.George Insurance Pte Limited by St.George Insurance (Australia) Pty Limited as a Mortgage Insurer, provided that the Designated Rating Agencies have confirmed that the amendments contemplated by this deed and such novations and amendments will not lead to a downgrade or withdrawal of rating of any Notes.
 	
             

 

	
            4.
 	
            Effective Date
 	
             

									

This deed takes effect, and the parties agree to be bound by the Supplementary Terms Notice as amended by this deed, from the date of this deed or such other date as the parties may agree.

	
            5.
 	
            Limitation of liability – Security Trustee
 

Notwithstanding any other provision of this deed, the Security Trustee will have no liability under or in connection with this deed or any other Transaction Document to any person other than to the extent to which the liability is able to be satisfied out of the property from which the Security Trustee is actually indemnified for the liability.  This limitation will not apply to a liability of the Security to the extent that it is not satisfied because, under this deed or by operation of law, there is a reduction in the extent of the Security Trustee’s indemnification as a result of the Security Trustee’s fraud, negligence or breach of trust.  Nothing in this clause or any similar provision in any other Transaction Document limits or adversely affects the powers of the Security Trustee, any Receiver or attorney in respect of the charge or the charged property.

 

 

	
             
 	
            Page 2
 

 

 

	
            
 Amendment Deed
 Supplementary Terms Notice
 	
             
 
	
             
 

 

 

 

	
            6.
 	
            Note Trustee's liability
 

Clause 14 of the Note Trust Deed applies as if incorporated in this deed and as if references to the Note Trust Deed were references to this deed.

	
            7.
 	
            Governing law and jurisdiction
 

This deed is governed by the laws of New South Wales.  Each of the parties submits to the non-exclusive jurisdiction of courts exercising jurisdiction there.

	
            8.
 	
            Counterparts
 

This deed may be executed in any number of counterparts.  All counterparts together will be taken to constitute one instrument.

 

Each attorney executing this Deed states that he or she has no notice of revocation or suspension of his or her power of attorney.

 

Trustee

 

	
            Signed Sealed and Delivered for Perpetual Trustees Consolidated Limited by its attorney under power of attorney in the presence of:
 	
             

	
             /s/ 
            Oleg Khomenko
 	 	
            
            
             /s/  Andrea Ruver                        /s/  Joe D'Ambrosio

        
	
            Witness Signature
 	
             
 	
            Attorney Signature
 
	
             Oleg Khomenko
 	
            
            Andrea Ruver, Manager         
            
            Joe D'Ambrosio, Manager
 
	
            Print Name
 	
            Print Name
 

 

 

 

	
             
 	
            Page 3
 

 

 

	
            
 Amendment Deed
 Supplementary Terms Notice
 	
             
 
	
             
 

 

 

 

Manager

 

	
            Signed Sealed and Delivered for Crusade Management Limited by its attorney under power of attorney in the presence of:
 	
             

	
            
            /s/  Oleg Khomenko 
 	 	
            
             /s/ 
            Andrew Jinks

        
	
            Witness Signature
 	
             
 	
            Attorney Signature
 
	
            
             Oleg Khomenko
 	
            
             Andrew Jinks
 
	
            Print Name
 	
            Print Name
 

 

St.George

 

	
            Signed Sealed and Delivered for St.George Bank Limited by its attorneys under power of attorney in the presence of:
 	
             
	
	
             
 	
             /s/ 
            Andrew Jinks
 	
	
             
 	
            Attorney Signature
 	
	
             
 	
             
 	
            
            Andrew Jinks
 	
	
             
 	
             
 	
            Print Name
 	
	
             /s/ 
            Oleg Khomenko
 	
             
 	
             
 	
	
            Witness Signature
 	
             
 	
            Attorney Signature
 	
	
            
            Oleg Khomenko
 	
             
 	
             

	
            Print Name
 	
            Print Name
 	

 

 

	
             
 	
            Page 4
 

 

 

	
            
 Amendment Deed
 Supplementary Terms Notice
 	
             
 
	
             
 

 

 

 

Custodian

 

	
            Signed Sealed and Delivered for St.George Custodial Pty Limited by its attorney under power of attorney in the presence of:
 	
             

	
             /s/ 
            Oleg Khomenko
 	 	
            
             /s/ 
            Andrew Jinks

        
	
            Witness Signature
 	
             
 	
            Attorney Signature
 
	
            
             Oleg Khomenko
 	
            
            Andrew Jinks
 
	
            Print Name
 	
            Print Name
 

 

Security Trustee

 

	
            Signed Sealed and Delivered for P.T. Limited by its attorney under power of attorney in the presence of:
 	
             

	
             /s/ 
            Oleg Khomenko
 	 	
            
             /s/ 
            Andrea Ruver                                     
            /s/  Joe D'Ambrosio

        
	
            Witness Signature
 	
             
 	
            Attorney Signature
 
	
            
             Oleg Khomenko
 	
            Andrea Ruver,
            Manager                  Joe D'Ambrosio,
            Manager
 
	
            Print Name
 	
            Print Name
 

 

Note Trustee

 

	
            Signed Sealed and Delivered by The Bank of New York in the presence of:
 	
             

	
             /s/ 
            Esther Fong
 	 	
            
            
             /s/ Yvonne Yap 

        
	
            Witness Signature
 	
             
 	
            Attorney Signature
 
	
             
            Esther Fong, Assistant Vice President
 	
            
            Yvonne Yap, Assistant Vice President 
 
	
            Print Name
 	
            Print Name
 

 

 

 

	
             
 	
            Page 5Employment Agreement of Steven H. Caryer

    

      Exhibit
        10.1

       

       

      EMPLOYMENT
        AGREEMENT

       

      This
        Employment Agreement (“Agreement”) is made and entered into as of this 26th day
        of September, 2006, (the “Effective Date”) by and among Peoples Bancorp (“the
        Company”), the holding company of Peoples Federal Savings Bank of DeKalb County
        (“Peoples”) and First Savings Bank (“First Savings”), and Steve Caryer
        (“Executive”), with reference to the following:

       

      WHEREAS,
        Executive is currently employed by Peoples, which is a wholly owned subsidiary
        of the Company;

       

      WHEREAS,
        the Company, Peoples, and First Savings desire to provide for the employment
        of
        the Executive by Peoples;

       

      WHEREAS,
        the Executive is willing to commit himself to serving the Company on the
        terms
        and conditions herein provided;

       

      NOW,
        THEREFORE, IN CONSIDERATION OF the recitals set forth above and the mutual
        promises, covenants, agreements, conditions and undertakings hereinafter
        set
        forth, the adequacy and receipt of which consideration is hereby acknowledged,
        the parties hereto agree as follows:

       

       

      1.
        Term.

       

      This
        Agreement shall have a term of two (2) years, commencing as of the Effective
        Date set forth above (the “Term”). Where used herein, “Term” shall refer to the
        entire period of employment of Executive by the Company from and after the
        Effective Date of this Agreement, whether for the period provided above and
        as
        extended or terminated earlier as hereinafter provided.

       

       

      2.
        Position and Duties.

       

      (a)
        During the Term, Executive shall be employed on a full-time basis to serve
        as
        Chief Financial Officer of the Company and perform the duties customarily
        performed by such officer of a savings association, including the general
        supervision and operation of the financial affairs of Peoples, subject to
        the
        direction of and the powers vested by law in the Board of Directors of the
        Company (the “Board”) and Peoples’ shareholders, the Company. Except as provided
        for herein, the duties and position of Executive as Chief Financial Officer
        hereunder may be changed only by the mutual written agreement of the parties
        hereto. The parties may mutually agree to extend Executive’s full-time status
        for additional 12-month periods following the Effective Date.

       

      (b)
        During the Term hereof, Executive shall perform the services herein contemplated
        to be performed by Executive faithfully, diligently and to the best of
        Executive’s ability in compliance with instructions and policies of the Board,
        Peoples Federal Charter and Bylaws and with all applicable laws and
        regulations.

       

       

      3.
        Compensation.

       

      (a)
        Base
        Salary.
        For
        executive’s services rendered hereunder, Peoples shall pay or cause to be paid a
        base salary to Executive at the rate of $98,000 per annum, payable in conformity
        with Peoples’ normal payroll periods and procedures. During the Term,
        Executive’s base salary shall be reviewed at least once every twelve (12) months
        and shall be increased (but not reduced) at any time, and from time to time,
        as
        shall be substantially consistent with increases in base salary generally
        awarded in the ordinary course of business to other executives of Peoples,
        provided that Executive’s Base Salary shall be increased by a percentage no less
        than the annual increase of the cost of living index for the Fort Wayne,
        Indiana
        metropolitan area. Moreover, if Executive’s cost of health insurance coverage
        provided by Peoples exceeds $5,000 on an annual basis after the first 12-month
        period of the Term, Executive’s base salary for such second 12-month period
        shall be increased by an amount no less than the excess of such cost over
        

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      $5,000.
        Any increase in base salary shall not serve to limit or reduce any other
        obligation to the Executive under this Agreement. The term “Base Salary” as
        utilized in this Agreement shall refer to base salary as so
        increased.

       

      (b)
        Discretionary
        Bonus.
        In
        addition to Executive’s Base Salary provided for under Paragraph 4(a) above, the
        Executive shall participate in an equitable manner with all other senior
        management executives of Peoples in discretionary bonuses that the Board
        may
        award from time to time to Peoples’ senior management executives. No other
        compensation provided for in this Agreement shall be deemed a substitute
        for the
        Executive’s right to participate in such discretionary bonuses.

       

      (c)
        Stock
        Awards.
        The
        Executive shall be eligible for consideration for stock option grants by
        the
        Company pursuant to any stock option plan adopted by the Company, for so
        long as
        Executive shall be employed by the Peoples.

       

      (d)
        Other
        Benefits.
        The
        Executive will eligible to participate in or receive benefits under any employee
        benefit plans of Peoples which are available to senior executives and key
        management employees of Peoples, subject to and on a basis consistent with
        the
        terms, conditions and overall administration of such plans and arrangements.
        Nothing paid to Executive under any such plan or arrangement will be deemed
        to
        be in lieu of other compensation to which the Executive is entitled under
        this
        Agreement.

       

       

      4.
        Vacation and Sick Leave.

       

      During
        the Term hereof, Executive shall be entitled to paid vacation and paid sick
        leave, the amount and term of which shall be determined in accordance with
        the
        policies of Peoples as in effect from time to time, but in no event shall
        the
        vacation period be less than three weeks per year.

       

       

      5.
        Group Medical, Life Insurance and Other Benefits.

       

      The
        Executive shall participate in any plan that Peoples maintains for the benefit
        of its executives if the plan relates to (i) pension, profit sharing or
        other retirement benefits, (ii) medical insurance or the reimbursement of
        medical or dependent care expenses, or (iii) other group benefits,
        including disability and life insurance plans.

       

       

      6.
        Business Expenses.

       

      Executive
        shall be entitled to reimbursement by Peoples for any and all ordinary and
        necessary business expenses reasonably incurred by Executive in the performance
        of Executive’s duties and in acting for Peoples during the Term of this
        Agreement, provided that Executive furnishes to Peoples, for review and approval
        by the Chairman of the Board, adequate records and other documentation as
        may be
        required for the substantiation of such expenditures as a business expense
        of
        the Bank

       

       

      7.
        Termination for Cause.

       

      (a)
        The
        Board may for cause terminate Executive’s employment at any time during the Term
        of this Agreement. In such event, all rights of Executive under this Agreement
        shall terminate and Executive shall have no right to receive compensation
        or
        other benefits for any period after the effective date of such termination
        for
        cause. Termination for cause shall be defined as the Executive’s 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 the foregoing, no termination for cause shall be effective
        with
        respect to the Executive unless and until there shall have been delivered
        to him
        a copy of a resolution, finding that in the good faith opinion of the Board
        of
        Directors of Peoples (the “Board”), the Executive’s actions and/or 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      failure
        to act justifies termination for cause and specifying the particulars thereof
        in
        detail. Reasonable notice shall be provided to the Executive and he shall
        receive an opportunity, together with counsel, to be heard before the Board.
        The
        Executive shall not have the right to receive compensation or other benefits
        for
        any period after a termination for cause, except that benefits previously
        vested
        or accrued shall be unaffected by such termination.

       

       

      8.
        Events of Termination; Payments to Executive.

       

      The
        provisions of this Paragraph 9 shall apply upon the occurrence of an Event
        of
        Termination (as herein defined).

       

      (a)
        As
        used in this Agreement, an “Event of Termination” shall mean and include any one
        or more of the following: (i) the termination by Peoples of the Executive’s
        employment hereunder for any reason other than for cause (as defined in
        Paragraph 7 hereinabove) during the Term; or (ii) the Executive’s
        resignation or constructive termination from Peoples employ, upon any
        (A) material change in the Executive’s function, duties, or
        responsibilities, which change would cause the Executive’s position to become
        one of lesser responsibility, importance, or scope from the position and
        attributes thereof (and any such material change shall be deemed a continuing
        breach of this Agreement), (B) Relocation of the principal place at which
        Executive’s duties are to be performed to a location outside a thirty (30) mile
        radius around the principal location at which Executive’s duties are performed
        immediately prior to the termination of employment, (C) material reduction
        in the benefits and perquisites to the Executive from those being provided
        as of
        the Effective Date of this Agreement except for any changes that are generally
        applicable to senior executives and key management employees or expressly
        contemplated by this Agreement (any such reduction to be deemed a continuing
        breach of this Agreement), or (D) or any other material breach of this
        Agreement by Peoples. Upon the occurrence of any event described in clauses
        (A),
        (B), (C) or (D) above, the Executive shall have the right to elect to
        terminate his employment under this Agreement by resignation upon not less
        than
        sixty (60) days prior written notice given within a reasonable period of
        time
        not to exceed, except in case of a continuing breach, four calendar months
        after
        the later of the (i) occurrence of the event giving rise to said right to
        elect termination or (ii) actual knowledge of such event by the Executive.
        In the case of a continuing breach, the Executive may give such sixty (60)
        days
        prior notice at any time. Either of Executive’s sixty (60) days prior notice of
        his Date of Termination shall be referred to as “Notice of Termination.” The
        date specified in Executive’s Notice of Termination to the Bank of his last date
        of employment shall be the “Date of Termination.”

       

      (b)
        Upon
        the occurrence of an Event of Termination, on the Date of Termination, as
        defined in this Paragraph 9, Peoples shall pay the Executive, or, in the
        event
        of his subsequent death, his beneficiary or beneficiaries as he may have
        designated, or his estate, if no beneficiary designation has been made, or
        if no
        beneficiaries survive the Executive, as severance pay or liquidated damages,
        or
        both, a sum equal to (i) the amount of Base Salary of the Executive for
        each year or portion thereof during the remaining Term of this Agreement,
        plus
        (ii) bonuses in an amount equal to the last bonus received, divided by 12,
        and multiplied by the number of years remaining in the Term of this Agreement,
        as well as (iii) health and/or medical benefits as provided under Paragraph
        6 and retirement benefits under Paragraph 6 of this Agreement, provided,
        however, that if Peoples is not in compliance with its minimum capital
        requirements or if such payments would cause Peoples’ capital to be reduced
        below its minimum capital requirements, such payments shall be deferred until
        such time as Peoples is in capital compliance. Such health benefit payments
        shall be made as incurred, and such salary, bonus and retirement benefit
        payments shall be made in a lump sum within ten (10) days of the Date of
        Termination unless Peoples elects to make such payments under the Peoples’
current payment procedures during the remaining Term of Employment under
        this
        Agreement, which election may only be made if consistent with Treas. Reg.
§
1.409A-2(a)(5)(iv).

       

      (c)
        The
        payments provided under this Paragraph 9 upon an Event of Termination shall
        be
        in lieu of any other payments or damages recoverable in any causes of action
        by
        Executive related to this 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      Agreement.
        As a condition to receipt of payments hereunder, the Executive shall execute
        a
        Release and Settlement Agreement pursuant to which the Executive shall waive
        any
        and all claims resulting from employment at or termination from Peoples other
        than payments or benefits which are expressly provided for in this
        Agreement.

       

       

      9.
        Termination as a Result of a Change of Control.

       

      (a)
        Change
        of Control.
        For
        purposes of this Agreement and except as provided in Paragraph 11(c) below
        relating to supervisory transactions, the term “Change of Control” shall mean
        the occurrence of any of the following events:

       

      (i)
        Any
“person” (as such term is used in Section 13(d) and 14(d) of the Securities
        Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or
        other fiduciary holding securities under an employee benefit plan of the
        Company
        or a corporation owned directly or indirectly by the shareholders of the
        Company
        in substantially the same proportions as their ownership of stock in the
        Company, becomes after the date hereof the “beneficial owner” (as defined in
        Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities
        of
        the Company representing fifty percent (50%) or more of the total voting
        power
        represented by the Company then outstanding securities that vote generally
        in
        the election of directors (“Voting Securities”);

       

      (ii)
        Any
“person” (as such term is used in Section 13(d) and 14(d) of the Exchange Act),
        other than a trustee or other fiduciary holding securities under an employee
        benefit plan of the Company or a corporation owned directly or indirectly
        by the
        shareholders of the Company in substantially the same proportions as their
        ownership of stock in the Company, becomes after the date hereof the “beneficial
        owner” (as defined in Rule 13 d-3 under the Exchange Act), directly or
        indirectly, of twenty-five percent (25%) or more of the Voting Securities
        of The
        Company, and, within a period of twelve (12) months of such acquisition of
        beneficial ownership, individuals who at the beginning of such period constitute
        the Board of Directors of the Company, or any new director whose election
        or
        nomination was approved by a vote of at least two-thirds of the directors
        of the
        Company then still in office who were directors at the beginning of such
        period,
        or whose election or nomination was previously so approved, cease for any
        reason
        to constitute at least sixty percent (60%) of the directors of the
        Company;

       

      (iii)
        The
        merger or consolidation of the Company with any other corporation, other
        than a
        merger or consolidation in which the shareholders of the Company immediately
        prior thereto continue to own, directly or indirectly, Voting Securities
        representing at least seventy-five percent (75%) of the total voting power
        of
        the entity surviving such merger or consolidation; or

       

      (iv) The
        complete liquidation of the Company or Peoples or sale or disposition by
        the
        Company or Peoples (in one transaction or a series of transactions) of all
        or
        substantially all of the Company’s or Peoples’ assets.

       

      (b)
        Severance
        Payment.
        If
        Executive’s employment with Peoples is terminated as a result of a Change of
        Control of the Company, Executive shall be entitled to receive as his sole
        and
        exclusive remedy a severance payment equal to 2.0 times Executive’s Base Salary,
        as provided for in Paragraph 3(a) of this Agreement; plus the amount of any
        bonus compensation earned by Executive during the 2 years immediately preceding
        the Change of Control, health benefits under Paragraph 6(a) and retirement
        benefits under Paragraph 6(b), as well as rights to any vested options, less
        any
        amounts required to be deducted by Peoples for federal and state taxes or
        other
        applicable requirements. The severance payment hereunder shall be paid to
        Executive upon the effectiveness of Executive’s termination of employment from
        Peoples and the termination of this Agreement. In the event a severance payment
        is paid to Executive under this Paragraph 9(b), this Agreement shall be
        terminated and Peoples shall have no further obligation to Executive under
        this
        Agreement, except as provided herein.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (c)
        Upon
        the occurrence of a Change in Control, the Executive will be entitled to
        any
        benefits granted to him pursuant to any stock option or any other benefit
        plan
        of Peoples whether or not such benefits have vested in accordance with Paragraph
        4(d). Vested and/or accrued but unvested rights of Executive under Peoples’
Retirement Plan, or any supplemental plan, and Executive’s health and/or medical
        benefits provided under Paragraph 6 of this Agreement shall not be affected
        by a
        Change in Control.

       

      (d)
        Notwithstanding the preceding paragraphs of this Paragraph 9, the payments
        or
        benefits to be made or afforded to Executive under this Agreement when
        aggregated with any other “golden parachute” amounts (defined under Section 280G
        of the Internal Revenue Code of 1986, as amended (the “Code”) as compensation
        that becomes payable or accelerated due to a Change in Control payable under
        any
        other plans, agreements or policies of Peoples or the Company, shall be reduced
        to the highest amount permissible under Sections 280G and 4999 of the Code
        before the Executive becomes subject to the excess parachute payment excise
        tax
        under Section 4999 of the Code and Peoples or the Company loses all or part
        of
        its compensation deduction for such payments. The Executive shall determine
        the
        allocation of the reduction required hereby among the benefits to which the
        Executive is entitled.

       

      (e)
        Compliance
        with Law and Regulation.
        The
        parties hereto expressly acknowledge and agree that 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 regulations promulgated
        thereunder.

       

       

      10.
        Other Termination.

       

      (a)
        Disability.
        In the
        event that Executive shall fail, because of illness, incapacity or injury,
        to
        render the services contemplated by this Agreement for three (3) consecutive
        calendar months, or for shorter periods aggregating four (4) months in any
        twelve (12) month period, Executive’s employment hereunder may be terminated by
        written notice from Peoples to Executive. In the event that Executive’s
        employment is terminated under this Paragraph 10(A), Executive shall receive
        the
        difference between any disability payments provided by Peoples’ insurance plans
        and his Base Salary as set forth in Paragraph 4(a) hereof which he would
        have
        received during the remaining Term of this Agreement, plus the amount of
        any
        bonus compensation payable to Executive under Section 4(b) hereof for any
        number
        of years remaining in the Term of this Agreement, prorated as appropriate.
        Such
        termination shall not affect any rights which Executive may have pursuant
        to any
        insurance or other death benefit, retirement or stock award plans or
        arrangements of Peoples, or any stock option plans or options thereunder,
        which
        rights shall continue to be governed by the provisions of such plans and
        arrangements.

       

      (b)
        Death.
        If
        Executive’s employment is terminated by reason of Executive’s death, this
        Agreement shall terminate without further obligations of Peoples to Executive
        (or Executive’s heirs or legal representatives) under this Agreement, other than
        for payment of (i) Executive’s Base Salary which he was receiving at the
        time of death, prorated through the date of termination; (ii) the amount of
        any bonus compensation payable to Executive at the time of his death under
        Section 4(b) above, prorated through the date of termination; (iii) any
        compensation previously deferred by Executive; (iv) any accrued vacation
        and/or sick leave pay; (v) any vested and/or accrued but unvested rights in
        any stock options and (vi) any amounts due pursuant to the terms of any
        applicable welfare benefit plan. All of the foregoing amounts shall be paid
        to
        Executives estate or beneficiary, as applicable, in a lump sum in cash within
        thirty (30) days after the date of termination or earlier as required by
        applicable law.

       

       

      11.
        Regulatory Provisions.

       

      (a)
        Suspension
        and Removal Orders.
        If
        Executive is suspended and/or temporarily prohibited from participating in
        the
        conduct of Peoples’ affairs by notice served under Section 8(e)(3) or 8(g)(1) of
        the Federal Deposit Insurance Act (12 U.S.C. Section 181 8(e)(3) and (g)(1)),
        Peoples’ 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, Peoples may in its discretion: (i) pay Executive all or part
        of the 

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      compensation
        withheld while its obligations under this Agreement were suspended; and
        (ii) reinstate (in whole or in part) any of its obligations which were
        suspended. If Executive is removed and/or permanently prohibited from
        participating in the conduct of Peoples’ affairs by an order issued under
        Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
        Section 181 8(e)(4) or (g)(1)), all obligations of Peoples under this Agreement
        shall terminate as of the effective date of the order, but vested rights
        of the
        parties shall not be affected.

       

      (b)
        Termination
        by Default.
        If
        Peoples is in default (as defined in Section 3(x)(1) of the Federal Deposit
        Insurance Act (12 U.S.C. Section 1813(x)(1)), all obligations under this
        Agreement shall terminate as of the date of default, but vested rights of
        the
        parties shall not be affected.

       

      (c)
        Supervisory
        Assistance or Merger.
        All
        obligations under this Agreement shall be terminated, except to the extent
        that
        it is determined that continuation of the Agreement is necessary for the
        continued operation of Peoples: (i) by the Director of the Office of Thrift
        Supervision (the “Director”) or his or her designee, at the time that the
        Federal Deposit Insurance Corporation or the Office of Thrift Supervision
        enters
        into an agreement to provide assistance to or on behalf of Peoples under
        the
        authority contained in Section 13(c) of the Federal Deposit Insurance Act
        (12
        U.S.C. Section 1823(c)); or (ii) by the Director or his or her designee, at
        the time that the Director or his or her designee approves a supervisory
        merger
        to resolve problems related to the operation of Peoples or when Peoples is
        in an
        unsafe or unsound condition. All rights of the parties that have already
        vested,
        however, shall not be affected by such action.

       

       

      12.
        Disclosure or Use of Trade Secrets/Non-Compete Agreement.

       

      During
        the Term hereof, Executive will have access to and become acquainted with
        what
        Executive and Peoples acknowledge are trade secrets of Peoples. Executive
        shall
        not use or disclose any trade secrets or, directly or indirectly, cause them
        to
        be used or disclosed in any manner, during the Term hereof or for a period
        of
        one (1) year after the termination of this Agreement, except as may be required
        or requested by Peoples, by court order or under applicable law or regulation.
        While Executive is employed by Peoples and for a period of one year after
        termination of Executive’s employment by Peoples for cause or by the Executive,
        Executive shall not directly or indirectly engage in any bank or bank-related
        business which competes with the business of Peoples as conducted during
        Executive’s employment by Peoples for any financial institution, including, but
        not limited to, banks, savings associations and credit unions within a 50-mile
        radius of Auburn, Indiana.

       

       

      13.
        Return of Documents.

       

      Executive
        expressly agrees that all manuals, documents, files, reports, studies or
        other
        materials used and/or developed by Executive for Peoples during the Term
        of this
        Agreement or prior thereto while Executive was employed by Peoples are solely
        the property of Peoples, and that Executive has no right, title or interest
        therein. Upon termination of this Agreement, Executive or Executive’s
        representative shall promptly deliver possession of all such materials
        (including any copies thereof) to Peoples.

       

       

      14.
        Notices.

       

      All
        notices, demands or other communications hereunder shall be in writing and
        shall
        be deemed to have been duly given if delivered in person, or sent by United
        States mail, certified or registered, with return receipt requested, if to
        Executive, addressed to Executive at the last residence address of Executive
        as
        shown in the records of Peoples, and if to Peoples, addressed to the President
        at Peoples’ principal office.

       

       

      15.
        Governing Law and Jurisdiction.

       

      This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of Indiana. Each of the parties hereto consents to the jurisdiction
        of
        the Indiana or federal courts, as the case 

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      may
        be,
        for the enforcement of this Agreement and matters pertaining to the transactions
        and activities contemplated hereby.

       

       

      16.
        Attorneys’ Fees.

       

      In
        the
        event that a dispute arises with respect to this Agreement, the prevailing
        party
        in such dispute shall be entitled to recover all expenses, including, attorneys’
fees and court costs.

       

       

      17.
        Benefit of Agreement.

       

      This
        Agreement shall be binding upon and shall inure to the benefit of the parties
        hereto and their respective successors and assigns; provided, however, that
        Executive may not assign any interest in this Agreement without the prior
        written consent of Peoples.

       

       

      18.
        Captions.

       

      Captions
        and paragraph heading used in this Agreement are for convenience only and
        shall
        not be used in interpreting or construing this Agreement.

       

       

      19.
        Entire Agreement.

       

      This
        Agreement contains the entire agreement of the parties with respect to the
        employment of Executive by Peoples, and it expressly supersedes any and all
        other agreements, either oral or written, relating thereto

       

       

      20.
        Severability.

       

      Should
        any provision of this Agreement for any reason be declared invalid, void
        or
        unenforceable by a court of competent jurisdiction, the validity and binding
        effect of any remaining portions of this Agreement shall remain in full force
        and effect as if this Agreement had been executed with such invalid, void
        or
        unenforceable provisions eliminated; provided, however, that the remaining
        provisions still reflect the intent of the parties to this
        Agreement.

       

       

      21.
        Amendments.

       

      This
        Agreement may not be amended or modified except by a written agreement signed
        by
        Executive and Peoples. This Agreement and any amendment thereof may be executed
        in counterparts.

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
        day
        and year first above written.

       

      

        
          	 	
                  PEOPLES
                    BANCORP

                
	 	 	 
	 	
                  By:

                	/s/
                  Maurice F. Winkler, III
	 	 	 
	 	 	 
	 	
                  
                    PEOPLES
                      FEDERAL SAVINGS BANK OF DEKALB COUNTY

                  

                
	 	 	 
	 	
                  By:

                	/s/
                  Maurice F. Winkler, III
	 	 	President
	 	 	 
	 	 	 
	 	
                  EXECUTIVE

                
	 	 
	 	/s/
                  Steven H. Caryer	 
	 	
                  Steven
                    H. Caryer

                

        

      

      

       

      
7

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