Document:

exhibit101.htm

Exhibit 10.1

 

2005 SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN

On December 18, 2014, Section 7.8 and Attachment H, set out below, have been added to the 2005 Supplemental Employee Retirement Plan:

 

7.8           Special Provisions.

 

This Plan shall be subject to the special provisions contained in Attachments F, G, and H.

 

Attachment H

 

SPECIAL PROVISIONS APPLICABLE TO NAMED PARTICIPANTS

 

I.

SCOPE OF ATTACHMENT

	
1.1  

	
The provisions of this Attachment apply to specifically named Participants (a “Named Participant”).  To the extent the provisions of this Attachment conflict with other provisions of the Plan, this Attachment will control with respect to the Named Participants.

 

	
1.2  

	
Capitalized terms used in this Attachment shall have the meaning assigned to such terms in the Plan, unless defined otherwise in this Attachment F or the context clearly indicates to the contrary.

 

	
1.3  

	
As of the Determination Date, a Named Participant’s Target Retirement Benefit shall be converted to a lump sum amount (“Target Retirement Cash Balance Account”), to which interest credits shall be applied.  At the Named Participant’s Termination of Employment, the lump sum account balance (including interest credits) shall be converted to a Life with 10 Year Certain SERP Benefit for purposes of applying any applicable offsets and the net benefit shall then be converted, as applicable, to the Benefit Payout Alternative elected by the Named Participant.

 

II.

 

	
2.1  

	
Target Retirement Cash Balance Account.  The SERP Benefit formula of Plan Section 3.1 shall be applied using the following elements for the Named Participant as of the Determination Date, to determine the Named Participant’s Target Retirement Cash Balance Account:

 

	
Named Participant

	
Determination Date

	
Service Factor Determined as of:

	
Final Average Earnings Determined as of:

	
Age Discount Determined as of:

	
Applicable Interest Rate and Mortality Table

	
Ralph de la Vega

	
12/31/2014

	
12/31/2014

	
12/31/2014

	
12/31/2014

	
4.3%; 2013 Applicable PPA Mortality Rates

	
Wayne Watts

	
12/31/2014

	
12/31/2014

	
12/31/2014

	
12/31/2014

	
4.3%; 2013 Applicable PPA Mortality Rates

The Committee may designate additional Named Participants whose Target Retirement Benefit shall be converted to a Target Retirement Cash Balance Account with a Determination Date as of December 31 of the calendar year in which such Named Participant is designated by the Committee; provided, if the Named Participant’s Termination of Employment precedes the Determination Date, no conversion to a Target Retirement Cash Balance Account shall apply.  For purposes of converting the Named Participant’s Target Retirement Benefit to a Target Retirement Cash Balance Account, the Applicable Interest Rate and Mortality Table shall be those in effect under the Plan for a Termination of Employment that occurs on the day preceding the Determination Date.

	
2.2  

	
Interest Credits.  From and after the Determination Date, the SEVP-HR shall maintain a record of each Named Participants’ Target Retirement Cash Balance Account.  During such period of time that all or any portion of a Named Participant’s Target Retirement Cash Balance Account is not paid, interest shall be credited at the Applicable Interest Rate that was used for purposes of converting the Named Participant’s Target Retirement Benefit to a Target Retirement Cash Balance Account.

 

	
2.3  

	
Action at Named Participant’s Termination of Employment. Upon Termination of Employment:

 

	
(a)  

	
a Named Participant’s Target Retirement Cash Balance Account, as adjusted for interest credits, shall be converted to an equivalent Life with a 10-Year Certain Benefit (as described in Plan Section 4.2(a)).  For purposes of such conversion, the Applicable Interest Rate and Mortality Table that were used for purposes of the converting the Named Participant’s Target Retirement Benefit to a Target Retirement Cash Balance Account shall apply; provided, however, the Named Participant’s age on his or her Termination of Employment date shall apply.

 

	
(b)  

	
The resulting Life with a 10-Year Certain Benefit shall be offset by the amounts described in Plan Section 3.1 (such as other pension values and age discount) to obtain the Annual Value of Life with 10 Year Certain SERP Benefit payable as a result of Termination of Employment.

 

	
(c)  

	
The Named Participant’s Annual Value of Life with 10 Year Certain SERP Benefit payable as a result of Termination of Employment shall be converted, as necessary, to the actuarial equivalent of the Benefit Payout Alternative elected by the Named Participant using the Applicable Interest Rate and Mortality Table that were used for purposes of the converting the Named Participant’s Target Retirement Benefit to a Target Retirement Cash Balance Account; provided, however, the Named Participant’s age on his Termination of Employment date shall apply.exhibit102.htm

Exhibit 10.2

	
  

	
BELLSOUTH CORPORATION

	
  

	
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

On December 18, 2014, Section 5 of the BellSouth Corporation Supplemental Executive Retirement Plan was amended to read as follows:

	
5.

	
Form of Benefit Payments

(c)           Lump Sum Calculation

Benefits payable in a single lump sum in accordance with the Plan shall be the amount that is the actuarial present value of the Participant’s benefit, or applicable portion thereof, expressed as a single life annuity and shall be determined using (i) the applicable interest rate then in effect under the Pension Plan, and (ii) the applicable mortality table then in effect under the Pension Plan.

Notwithstanding the above paragraph, the single lump sum value payable to any Participant who is also a Named Participant within the meaning of the 2005 AT&T Supplemental Employee Retirement Plan shall be the amount that is the actuarial present value of such Participant’s benefit expressed as a single life annuity and shall be determined using the applicable interest rate under the Pension Plan, the applicable mortality table under the Pension Plan, and such Participant’s attained age, all as if benefits commenced on December 31 of the calendar year in which such Participant became a Named Participant.  No interest credits or other adjustments will be added to this single sum value.Exhibit 10.1

 

 

2015 River Valley Financial Bank Incentive Plan

General Considerations

This plan is designed to meet the organization’s strategic initiatives and interests of its stakeholders (including, shareholders, communities, and regulators). As such this plan is subject to the direct oversight, administration, and authority of the Compensation Committee of the Board of Directors of River Valley Financial Bank and subject to authoritative concerns of the institution’s primary regulators.

Plan Parameters

This plan covers the calendar year 2015 for the individuals (or positions) specifically named in the policy.  The payout of monies under this plan will be paid-out by January 31, 2016 at the rate of 75% of funds earned. The balance of earnings (25%) will be escrowed with the Trust Department of this organization for payout one year from the date of original disbursement. This “deferral” of funds is in consideration to “clawback” provisions described subsequently in this policy. All funds are considered earned at the conclusion of the calendar year. So terminations of employment during the current calendar year are treated as forfeitures, but any termination of employment subsequent to year-end will not impact the payout of current or deferred funds.

Clawback Provision

This plan specifically reserves the right to “recapture” funds disbursed under this plan for material misstatements of facts, whether individually or collectively derived, and as deemed inappropriate by the authorities having governance over this policy. Assuming certain timing parameters and after an investigation of facts, no less than any monies  deferred under this plan will be subject to recapture, and depending on the serious of the misstatement, the organization specifically reserves all rights and remedies to collect previously disbursed funds. A determination of misappropriated value will be at the Board of Directors sole discretion for any and all participants of the plan.

Other Provisions

The Board of Directors of River Valley Financial Bank specifically reserves the right to discontinue, alter, and/or modify the provisions of this plan at its sole discretion. It has discretionary abilities to supplement or modify awards under this plan as it deems appropriate.

 Specific Plan Design Features

This plan has features unique to the individuals covered by this plan. Because of varying responsibilities, there are different criteria, as well as, differences in the value of potential rewards. As an attachment to this plan, there is a summary sheet illustrating the employees covered by this plan and the amounts that could be earned under this incentive plan. As well, individual worksheets will also

be attached illustrating the performance factors, the value of those factors, and potential value of rewards earned under each of the factors.

Performance Criteria – Goals and Objectives

		·	Bank Performance – For most plan participants a percentage of the annual incentive will be based overall Bank performances. For the top tier of this plan 75% of the incentive payout is based on overall Bank Performance.

		·	Department/Individual Performance – For all participants a portion of this plan will be dependent on departmental and/or individual criteria.  An increasing proportion of the incentive program is subjective to those parameters as those individuals have less control in the success of the overall bank performance.

		·	Wealth management officers have a defined monetary goal based upon dollar values of production over and above expectations.

Performance Standards – Performance Expectations

For each performance factor (Overall Bank, Department, and Individual), an appropriate standard of performance must be established with these three essential performance points:

		·	Threshold Performance: That level of performance for each factor below which no award will be given. The budgeted, or expected, level of performance based upon historical data, and management’s best judgment as to expected performance during the coming period.

		·	Targeted Performance: The budgeted, or expected, level of performance based upon historical data, and management’s best judgment as to expected performance during the coming performance period.

		·	Maximum Expected Performance: That level of performance which based upon historical performance and management’s judgment would be exceptional or significantly beyond the expected.

Performance standards are typically determined by using the Bank’s performance history, peer data and management’s judgment of what reasonable levels could be attained based on previous experience. One the targeted performance is established; the threshold and maximum payout are typically (but, not absolutes) as follows. The threshold is typically 80% to 90% of target while the maximum can be in a range from typically 110% to 140% of target (with the primary exception being profitability with a variance of 5% either side of the target).

Weighting for each performance criteria (overall bank and department/individual) will be discussed during goal setting sessions and reflect the individual’s abilities to impact results in a particular factor, as well as representing areas of specific focus for the executive. Properly assigned factor weights to the performance criteria assure that the annual incentive plan augments the annual strategic business plan of the Bank.

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Plan Design Features for CEO & EVP (Tier I)

CEO and EVP – Payouts:  Target – 15% Maximum – 30%

CEO and EVP Factor Weights – 50% on Total Shareholder Return, the greater of: 25% on Profitability or 25% on Loan Portfolio Growth (having an average risk weighting of 3.8), and 25% on Asset Quality Targets

	
Individual Weighting (25% Assigned to Asset Quality Targets) -

 

	
50% on Non-Performing Number

 

	 	
50% on Charge-offs

Total Shareholder Return – is defined as price appreciation of the stock value for the period ended December 31, 2015, plus the annualized dividend rate paid to common stock shareholders for the year. Due to fact that the Corporation’s stock is thinly traded and that there can be significant price swings in any one day of trading, for calculation purposes the 30 day average price as of December 31, 2015 will be used.

Loan Portfolio Growth is defined as the net growth of the aggregated loan portfolio as December 31, 2015 measured against the ending loan portfolio balance as of December 31, 2014.

Non-Performing Assets – is defined as 90 day or longer delinquency and assets held as Other Real Estate Owned (OREO).  Any loan that is restructured when it is in a non performing status at the time of restructuring will continue to be non performing until the loan has performed for six consecutive months according to the terms of the restructured loan.

Goals

Total Return – Threshold – 8%, Target – 12%, Maximum – 16%

Profitability – Threshold  $4.345 million, Target – $4.573 million, Maximum – $4.800 million

Loan Portfolio Growth – Threshold – 4.8%, Target – 6%, Maximum –7.2%

Asset Quality Targets:

Non-Performing Assets (as a percentage of total assets) – Threshold – 3.0%, Target – 2.5%, Maximum – 2.0%

Charge-offs (as percentage of loan portfolio) – Threshold – < .40, Target – < .30, Maximum – < .20

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Senior Officers (Tier II)

We will have payouts of 10% for Target and 20% for Maximums. Factors will be weighted at 50% for overall Bank objectives as defined as Total Return and Profitability as illustrated above. The balance of potential earnings will be based on individual goals that will carry 50% value, but will have individual factors (up to five criteria) that may have unique factor weights.

Vice Presidents (Tier III)

We will have payouts of 7.50% for Target and 15% for maximums. Factors will be weighted at 50% for overall Bank objectives as defined as Total Return and Profitability as illustrated above. The balance of potential earnings will be based on individual goals that will carry 50% value, but will have individual factors (up to four criteria) that may have unique factor weights. Those individual factors may also have subjective criteria that are defined by meeting, exceeding, far exceeds expectations.

Internal Audit, Compliance, and Ex. Administrative Assistant (Tier IV)

We will have payouts of 5% for Target and 10% for maximums. Factors will be weighted at 50% for overall Bank objectives as defined as Total Return and Profitability as illustrated above. The balance of potential earnings will be based on individual goals that will carry 50% value, but will have individual factors (up to four criteria) that may have unique factor weights. Those individual factors may also have subjective criteria that are defined by meeting, exceeding, far exceeds expectations.

Loan Officers (Tier V)

We will have payouts of 7.50% for Target and 15% for maximums. Factors will be weighted at 25% for overall Bank objectives as defined as Total Return and Loan Portfolio Growth. The balance of potential earnings will be based on individual goals that will carry 75% value, but will have individual factors (up to four criteria) that may have unique factor weights tailored to desired performance goals.

Sr. Wealth Management Officer(s) (Tier VI)

Senior Officer(s) will be afforded specific monetary rewards for achieving collective targeted minimums and maximums tied to reportable income to general ledger accounts attributed to wealth management operations. The wealth management officers will be eligible for an individual reward of $2,000 if the targeted amount (recorded in 2015) exceeds $400,000. Individual rewards are prorated to a maximum of $7,500 based upon aggregated income of $500,000.

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Other Considerations:

These calculations are based solely of the financials of River Valley Financial Bank. Any acquisition of assets, other than through “normal” ongoing operations, will facilitate a need to modify calculations appropriately. Modifications to this plan will be subject to Board approval.

Participants to this plan will need to be identified no later than January 31, 2015. Hires subsequent to this date will not qualify for participation in the 2015 plan.

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