GSFINANCIAL CORP. AMENDEDAND RESTATED 1997RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT ARTICLEI ESTABLISHMENTOF THE PLAN AND TRUST

 

 

 

1.01           GS Financial Corp. (the "Corporation") hereby amends and restates its 1997 Recognition and Retention Plan (as amended and restated, the "Plan") and Trust (the "Trust") upon the terms and conditions hereinafter stated in this amended and restated 1997 Recognition and Retention Plan and Trust Agreement (the "Agreement"), with the amendment and restatement effective as of November 18, 2008.  The Plan is being amended and restated in order to comply with Section 409A of the Code, as defined herein.

 

1.02           The Trustee hereby accepts this Trust and agrees to hold the Trust assets existing on the date of this Agreement and all additions and accretions thereto upon the terms and conditions hereinafter stated.

 

 

 

The purpose of the Plan is to retain personnel of experience and ability in key positions by providing Employees and Non-Employee Directors of the Corporation and Guaranty Savings Bank (the "Bank") with a proprietary interest in the Corporation as compensation for their contributions to the Corporation and the Bank and as an incentive to make such contributions in the future.

 

 

 

The following words and phrases when used in this Agreement with an initial capital letter, unless the context clearly indicates otherwise, shall have the meanings set forth below.  Wherever appropriate, the masculine pronouns shall include the feminine pronouns and the singular shall include the plural.

 

3.01           "Bank" means Guaranty Savings Bank, the wholly-owned subsidiary of the Corporation.

 

3.02           "Beneficiary" means the person or persons designated by a Recipient to receive any benefits payable under the Plan in the event of such Recipient's death.  Such person or persons shall be designated in writing on forms provided for this purpose by the Committee and may be changed from time to time by similar written notice to the Committee.  In the absence of a written designation, the Beneficiary shall be the Recipient's surviving spouse, if any, or if none, his estate.

 

 

3.03           "Board" means the Board of Directors of the Corporation.

 

3.04           "Change in Control" shall mean a change in the ownership of the Corporation or the Bank, a change in the effective control of the Corporation or the Bank, or a change in the ownership of a substantial portion of the assets of the Corporation or the Bank, in each case as provided under Section 409A of the Code and the regulations thereunder.

 

3.05           "Code" means the Internal Revenue Code of 1986, as amended.

 

3.06           "Committee" means the committee appointed by the Board pursuant to Article IV hereof.

 

3.07           "Common Stock" means shares of the common stock, $.01 par value per share, of the Corporation.

 

3.08           "Disability" means the Recipient (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Corporation or the Bank (or would have received such benefits for at least three months if he had been eligible to participate in such plan).

 

3.09           "Effective Date" means the day upon which the Board originally adopted this Plan.

 

3.10           "Employee" means any person who is employed by the Corporation, the Bank or a Subsidiary, or is an officer of the Corporation, the Bank or a Subsidiary, including officers or other employees who may be directors of the Corporation or the Bank.

 

3.11           "Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

3.12           "Non-Employee Director" means a member of the Board of the Corporation or Board of Directors of the Bank or any Subsidiary, including a Director Emeritus of the Board of Directors of the Corporation or the Board of Directors of the Bank, who is not an Officer or Employee of the Corporation or any Subsidiary.

 

3.13           "Plan Shares" or "Shares" means shares of Common Stock held in the Trust which may be distributed to a Recipient pursuant to the Plan.

 

3.14           "Plan Share Award" or "Award" means a right granted under this Plan to receive a distribution of Plan Shares upon completion of the service requirements described in Article VII.

 

3.15           "Recipient" means an Employee or a Non-Employee Director who receives a Plan Share Award under the Plan.

 

 

3.16           "Subsidiary" means the Bank and any other subsidiaries of the Corporation or the Bank which, with the consent of the Board, agree to participate in this Plan.

 

3.17           "Trustee" means such firm, entity or persons approved by the Board to hold legal title to the Plan for the purposes set forth herein.

 

 

 

4.01           Role of the Committee.  The Plan shall be administered and interpreted by the Committee, which shall consist of two or more members of the Board, each of whom shall be a Non-Employee Director, as defined in Rule 16b-3(b)(3)(i) of the Exchange Act, or any successor thereto.  The Committee shall have all of the powers allocated to it in this and other Sections of the Plan.  The interpretation and construction by the Committee of any provisions of the Plan or of any Plan Share Award granted hereunder shall be final and binding in the absence of action by the Board.  The Committee shall act by vote or written consent of a majority of its members.  Subject to the express provisions and limitations of the Plan, the Committee may adopt such rules, regulations and procedures as it deems appropriate for the conduct of its affairs.  The Committee shall report its actions and decisions with respect to the Plan to the Board at appropriate times, but in no event less than one time per calendar year.

 

4.02           Role of the Board.  The members of the Committee and the Trustee shall be appointed or approved by, and will serve at the pleasure of, the Board.  The Board may in its discretion from time to time remove members from, or add members to, the Committee, and may remove or replace the Trustee, provided that any directors who are selected as members of the Committee shall be Non-Employee Directors.

 

4.03           Limitation on Liability.  No member of the Board or the Committee shall be liable for any determination made in good faith with respect to the Plan or any Plan Shares or Plan Share Awards granted under it.  If a member of the Board or the Committee is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of anything done or not done by him in such capacity under or with respect to the Plan, the Corporation shall, subject to the requirements of applicable laws and regulations, indemnify such member against all liabilities and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in the best interests of the Corporation and any Subsidiaries and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

 

4.04           Compliance with Laws and Regulations.  All Awards granted hereunder shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency or stockholders as may be required.

 

4.05           No Deferral of Compensation Under Section 409A of the Code.  All Awards granted under the Plan are designed to not constitute a deferral of compensation for purposes of Section 409A of the Code.  No Recipient shall be permitted to defer the recognition of income beyond the date an Award shall be deemed earned pursuant to Article VII of the Plan.

 

 

 

5.01           Amount and Timing of Contributions.  The Board shall determine the amount (or the method of computing the amount) and timing of any contributions by the Corporation and any Subsidiaries to the Trust established under this Plan.  Such amounts may be paid in cash or in shares of Common Stock and shall be paid to the Trust at the designated time of contribution.  No contributions by Employees or Non-Employee Directors shall be permitted.

 

5.02           Investment of Trust Assets; Number of Plan Shares.  Subject to Section 8.02 hereof, the Trustee shall invest all of the Trust's assets primarily in Common Stock.  The aggregate number of Plan Shares available for distribution pursuant to this Plan shall be 137,540 shares of Common Stock, subject to adjustment as provided in Section 9.01 hereof, which shares shall be purchased (from the Corporation and/or, if permitted by applicable regulations, from stockholders thereof) by the Trust with funds contributed by the Corporation.

 

 

 

6.01           Awards to Non-Employee Directors.  Plan Share Awards to Non-Employee Directors shall be made to such persons and in such amounts as determined by the Board or the Committee.  Plan Share Awards to Non-Employee Directors in the aggregate shall not exceed 41,262 shares (30% of the number of shares available under this Plan) and no individual Non-Employee Director may receive Plan Share Awards in excess of 6,877 shares (5% of the number of shares available under this Plan).

 

6.02           Awards to Employees.  Plan Share Awards may be made to such Employees as may be selected by the Board or the Committee.  In selecting those Employees to whom Plan Share Awards may be granted and the number of Shares covered by such Awards, the Board or the Committee shall consider the duties, responsibilities and performance of each respective Employee, his present and potential contributions to the growth and success of the Corporation, his salary or other compensation and such other factors as deemed relevant to accomplishing the purposes of the Plan.  The Board or the Committee may but shall not be required to request the written recommendation of the Chief Executive Officer of the Corporation other than with respect to Plan Share Awards to be granted to him.  Plan Share Awards to Employees shall not exceed 34,385 shares (25% of the shares of Common Stock available under the Plan).

 

 

6.03      Form of Allocation.  As promptly as practicable after an allocation pursuant to Sections 6.01 or 6.02 that a Plan Share Award is to be issued, the Board or the Committee shall notify the Recipient in writing of the grant of the Award, the number of Plan Shares covered by the Award, and the terms upon which the Plan Shares subject to the Award shall be distributed to the Recipient.  The date on which the Board or the Committee so notifies the Recipient shall be considered the date of grant of the Plan Share Award.  The Board or the Committee shall maintain records as to all grants of Plan Share Awards under the Plan.

 

6.04      Allocations Not Required to any Specific Employee or Non-Employee Director.  Notwithstanding anything to the contrary in Sections 6.01 or 6.02 hereof, no Employee or Non-Employee Director shall have any right or entitlement to receive a Plan Share Award hereunder, with such Awards being at the total discretion of the Board or the Committee.

 

 

 

7.01     Earning Plan Shares; Forfeitures.

 

(a)           General Rules.  Subject to the terms hereof, Plan Share Awards shall be earned by a Recipient at the rate no quicker than twenty percent (20%) of the aggregate number of Shares covered by the Award as of each annual anniversary of the date of grant of the Award, with such vesting rate to be determined by the Committee.  If the employment of an Employee or service as a Non-Employee Director is terminated prior to the fifth (5th) annual anniversary of the date of grant of a Plan Share Award for any reason (except as specifically provided in subsections (b) and (c) below), the Recipient shall forfeit the right to any Shares subject to the Award which have not theretofore been earned.  In the event of a forfeiture of the right to any Shares subject to an Award, such forfeited Shares shall become available for allocation pursuant to Sections 6.01 and 6.02 hereof as if no Award had been previously granted with respect to such Shares.  No fractional shares shall be distributed pursuant to this Plan.

 

(b)           Exception for Terminations Due to Death or Disability.  Notwithstanding the general rule contained in Section 7.01(a), all Plan Shares subject to a Plan Share Award held by a Recipient whose employment with the Corporation or any Subsidiary or service as a Non-Employee Director terminates due to death or Disability shall be deemed earned as of the Recipient's last day of employment with or service to the Corporation or any Subsidiary and shall be distributed as soon as practicable thereafter; provided, however, that Awards shall be distributed in accordance with Section 7.03(a).

 

(c)           Exception for a Change in Control.  Notwithstanding the general rule contained in Section 7.01(a), all Plan Shares subject to a Plan Share Award held by a Recipient shall be deemed to be earned in the event of a Change in Control if, as of the date of such Change in Control, such treatment is either authorized or is not prohibited by applicable laws and regulations.

 

(d)           Revocation for Misconduct.  Notwithstanding anything hereinafter to the contrary, the Board may by resolution immediately revoke, rescind and terminate any Plan Share Award, or portion thereof, previously awarded under this Plan, to the extent Plan Shares have not been distributed hereunder to the Recipient, whether or not yet earned, in the case of an Employee who is discharged from the employ of the Corporation or any Subsidiary for cause (as hereinafter defined).  Termination for cause shall mean termination because of the Employee'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.  Plan Share Awards granted to a Non-Employee Director who is removed for cause pursuant to the Corporation's Articles of Incorporation and Bylaws or the Bank's Charter and Bylaws shall terminate as of the effective date of such removal.

 

 

7.02      Distribution of Dividends.  Any cash dividends or stock dividends declared in respect of each unvested Plan Share Award will be held by the Trust for the benefit of the Recipient on whose behalf such Plan Share Award is then held by the Trust and such dividends, including any interest thereon, will be paid out proportionately by the Trust to the Recipient thereof as soon as practicable after the Plan Share Awards become earned.  Any cash dividends or stock dividends declared in respect of each vested Plan Share held by the Trust will be paid by the Trust, as soon as practicable after the Trust's receipt thereof, to the Recipient on whose behalf such Plan Share is then held by the Trust.

 

7.03     Distribution of Plan Shares.

 

(a)           Timing of Distributions:  General Rule.  Plan Shares shall be distributed to the Recipient or his Beneficiary, as the case may be, as soon as practicable after they have been earned.

 

(b)           Form of Distributions.  All Plan Shares, together with any Shares representing stock dividends, shall be distributed in the form of Common Stock.  One share of Common Stock shall be given for each Plan Share earned and distributable.  Payments representing cash dividends shall be made in cash.

 

(c)           Withholding.  The Trustee may withhold from any cash payment or Common Stock distribution made under this Plan sufficient amounts to cover any applicable withholding and employment taxes, and if the amount of a cash payment is insufficient, the Trustee may require the Recipient or Beneficiary to pay to the Trustee the amount required to be withheld as a condition of delivering the Plan Shares.  The Trustee shall pay over to the Corporation or any Subsidiary which employs or employed such Recipient any such amount withheld from or paid by the Recipient or Beneficiary.

 

(d)           Restrictions on Selling of Plan Shares.  Plan Share Awards may not be sold, assigned, pledged or otherwise disposed of prior to the time that they are earned and distributed pursuant to the terms of this Plan.  Following distribution, the Board or the Committee may require the Recipient or his Beneficiary, as the case may be, to agree not to sell or otherwise dispose of his distributed Plan Shares except in accordance with all then applicable federal and state securities laws, and the Board or the Committee may cause a legend to be placed on the stock certificate(s) representing the distributed Plan Shares in order to restrict the transfer of the distributed Plan Shares for such period of time or under such circumstances as the Board or the Committee, upon the advice of counsel, may deem appropriate.

 

 

7.04     Voting of Plan Shares.  All Plan Share Awards which have not yet been earned and distributed pursuant to Section 7.03, and all shares of Common Stock held by the Trust which have not been awarded under a Plan Share Award shall be voted by the Trustee in its sole discretion.

 

 

 

8.01     Trust.  The Trustee shall receive, hold, administer, invest and make distributions and disbursements from the Trust in accordance with the provisions of the Plan and Trust and the applicable directions, rules, regulations, procedures and policies established by the Board or the Committee pursuant to the Plan.

 

8.02     Management of Trust.  It is the intent of this Plan and Trust that the Trustee shall have complete authority and discretion with respect to the arrangement, control and investment of the Trust, and that the Trustee shall invest all assets of the Trust in Common Stock to the fullest extent practicable, except to the extent that the Trustee determines that the holding of monies in cash or cash equivalents is necessary to meet the obligations of the Trust.  In performing its duties, the Trustee shall have the power to do all things and execute such instruments as may be deemed necessary or proper, including the following powers:

 

(a)           To invest up to one hundred percent (100%) of all Trust assets in Common Stock without regard to any law now or hereafter in force limiting investments for trustees or other fiduciaries.  The investment authorized herein may constitute the only investment of the Trust, and in making such investment, the Trustee is authorized to purchase Common Stock from the Corporation or from any other source, and such Common Stock so purchased may be outstanding, newly issued, or treasury shares.

 

(b)           To invest any Trust assets not otherwise invested in accordance with (a) above, in such deposit accounts, and certificates of deposit, obligations of the United States Government or its agencies or such other investments as shall be considered the equivalent of cash.

 

(c)           To sell, exchange or otherwise dispose of any property at any time held or acquired by the Trust.

 

(d)           To cause stocks, bonds or other securities to be registered in the name of a nominee, without the addition of words indicating that such security is an asset of the Trust (but accurate records shall be maintained showing that such security is an asset of the Trust).

 

(e)           To hold cash without interest in such amounts as may in the opinion of the Trustee be reasonable for the proper operation of the Plan and Trust.

 

(f)           To employ brokers, agents, custodians, consultants and accountants.

 

(g)           To hire counsel to render advice with respect to its rights, duties and obligations hereunder, and such other legal services or representation as it may deem desirable.

 

(h)           To hold funds and securities representing the amounts to be distributed to a Recipient or his Beneficiary as a consequence of a dispute as to the disposition thereof, whether in a segregated account or held in common with other assets of the Trust.

 

Notwithstanding anything herein contained to the contrary, the Trustee shall not be required to make any inventory, appraisal or settlement or report to any court, or to secure any order of a court for the exercise of any power herein contained, or give bond.

 

8.03     Records and Accounts.  The Trustee shall maintain accurate and detailed records and accounts of all transactions of the Trust, which shall be available at all reasonable times for inspection by any legally entitled person or entity to the extent required by applicable law, or any other person determined by the Board or the Committee.

 

8.04     Expenses.  All costs and expenses incurred in the operation and administration of this Plan shall be borne by the Corporation or, in the discretion of the Corporation, the Trust.

 

8.05     Indemnification.  Subject to the requirements of applicable laws and regulations, the Corporation shall indemnify, defend and hold the Trustee harmless against all claims, expenses and liabilities arising out of or related to the exercise of the Trustee's powers and the discharge of its duties hereunder, unless the same shall be due to its gross negligence or willful misconduct.

 

 

9.01    Adjustments for Capital Changes.  The aggregate number of Plan Shares available for distribution pursuant to the Plan Share Awards and the number of Shares to which any Plan Share Award relates shall be proportionately adjusted for any increase or decrease in the total number of outstanding shares of Common Stock issued subsequent to the Effective Date of the Plan resulting from any split, subdivision or consolidation of shares or other capital adjustment, or other increase or decrease in such shares effected without receipt or payment of consideration by the Corporation.  If, upon a merger, consolidation, reorganization, liquidation, recapitalization or the like of the Corporation or of another corporation, the shares of the Corporation's Common Stock shall be exchanged for other securities of the Corporation or of another corporation, each Recipient of a Plan Share Award shall be entitled, subject to the conditions herein stated, to receive such number of shares of Common Stock or amount of other securities of the Corporation or such other corporation as were exchangeable for the number of shares of Common Stock of the Corporation which such Recipients would have been entitled to receive except for such action.

 

9.02    Amendment and Termination of Plan.  The Board may, by resolution, at any time amend or terminate the Plan and the Trust (including amendments which may result in the merger of the Plan or the Trust with and into other plans or trusts of the Corporation or successor thereto), subject to any applicable regulatory requirement, any required stockholder approval or any stockholder approval which the Board may deem to be advisable for any reason, such as for the purpose of obtaining or retaining any statutory or regulatory benefits under tax, securities or other laws or satisfying any applicable stock exchange listing requirements.  The Board may not, without the consent of the Recipient, alter or impair his Plan Share Award except as specifically authorized herein.  Notwithstanding any other provision of this Plan, this Plan may not be terminated prior to such time as all outstanding Plan Share Awards granted to recipients have been earned or forfeited in accordance with the Plan.

 

9.03           Nontransferable.  During the lifetime of the Recipient, Plan Shares may only be earned by and paid to the Recipient who was notified in writing of the Award pursuant to Section 6.02, provided that Plan Share Awards and rights to Plan Shares shall be transferable by a Recipient to his or her spouse, lineal ascendants, lineal descendants, or to a duly established trust.  Plan Share Awards so transferred may not again be transferred other than to the Recipient who originally received the grant of Plan Share Award or to an individual or trust to whom such Recipient could have transferred Plan Share Awards pursuant to this Section 9.03.  Plan Share Awards which are transferred pursuant to this Section 9.03 shall be subject to the same terms and conditions as would have applied to such Plan Share Awards in the hands of the Recipient who originally received the grant of such Plan Share Award.  No Recipient or Beneficiary shall have any right in or claim to any assets of the Plan or Trust, nor shall the Corporation or any Subsidiary be subject to any claim for benefits hereunder.

 

9.04           Employment or Service Rights.  Neither the Plan nor any grant of a Plan Share Award or Plan Shares hereunder nor any action taken by the Trustee, the Committee or the Board in connection with the Plan shall create any right on the part of any Employee or Non-Employee Director to continue in such capacity.

 

9.05           Voting and Dividend Rights.  No Recipient shall have any voting or dividend rights or other rights of a stockholder in respect of any Plan Shares covered by a Plan Share Award, except as expressly provided in Sections 7.02 and 7.04 above, prior to the time said Plan Shares are actually earned and distributed to him.

 

9.06           Governing Law.  To the extent not governed by federal law, the Plan and Trust shall be governed by the laws of the State of Louisiana.

 

9.07           Effective Date.  This Plan as originally adopted became effective as of the Effective Date, and Awards may be granted hereunder no earlier than the date the Plan was approved by the requisite vote of the holders of outstanding voting shares of the Corporation at a meeting of Stockholders of the Corporation, and no later than the termination of the Plan.  The Plan, as originally adopted, was approved by the stockholders at a meeting thereof.  Notwithstanding the foregoing or anything to the contrary in this Plan, the implementation of this Plan and any Awards granted pursuant hereto was subject to the receipt of any applicable regulatory approvals or non-objections and approval of the Corporation's stockholders, which have been received.  The amendment and restatement of the Plan shall be effective as of the date set forth in Section 1.01 above.

 

 

9.08           Term of Plan.  This Plan shall remain in effect until the earlier of (1) ten (10) years from the Effective Date, (2) termination by the Board, or (3) the distribution to Recipients and Beneficiaries of all assets of the Trust.

 

9.09           Tax Status of Trust.  It is intended that the trust established hereby be treated as a Grantor Trust of the Corporation under the provisions of Section 671 et seq. of the Code, as the same may be amended from time to time.

 

[signature page follows]

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this amended and restated Agreement to be executed by its duly authorized officers and the corporate seal to be affixed and duly attested, and the Trustees of the Trust established pursuant hereto have duly and validly executed this Agreement, all on this 20th day of November 2008.

 

 

	GS FINANCIAL CORP.
	By:	/s/Stephen Wessel
		Stephen Wessel
		President and Chief Executive Officer
	TRUSTEES:
	/s/Stephen Wessel
	Stephen Wessel
	/s/Bruce A. Scott
	Bruce A. Scott
	/s/Lettie R. Moll
	Lettie R. Moll