JACKSONVILLE SAVINGS BANK LONG-TERM DEFERRED COMPENSATION PLAN JACKSONVILLE SAVINGS BANK LONG-TERM DEFERRED COMPENSATION PLAN ARTICLE 1PURPOSE

2.1   Account.  “Account” means the Account as maintained by the Employer in accordance with Article 4 with respect to any deferral of compensation pursuant to this Plan.  A Participant’s Account shall be utilized solely as a device for the determination and measurement of the amounts to be paid to the Participant pursuant to the Plan.  A Participant’s Account shall not constitute or be treated as a trust fund of any kind.

(1)   a reorganization, merger, merger conversion, consolidation or sale of all or substantially all of the assets of the Bank, the Company or the Stock Holding Company, or a similar transaction in which the Bank, the Company or the Stock Holding Company is not the resulting entity;

(2)   individuals who constitute the Incumbent Board of the Bank, the Company, or the Stock Holding Company cease for any reason to constitute a majority thereof; provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-fourths of the directors composing the Incumbent Board or whose nomination for election by the Bank’s or the Stock Holding Company’s stockholders or the Company’s members was approved by the nominating committee serving under the Incumbent Board shall be, for purposes of this Section, considered as though he were a member of the Incumbent Board; or

(3)   an acquisition of “control” of the Bank, the Company, or the Stock Holding Company as defined in the Bank Holding Company Act of 1956, as amended and applicable rules and regulations promulgated thereunder as in effect at the time of the Change in Control (collectively, the “BHCA”), as determined by the Board of Directors of the Bank, the Company, or the Stock Holding Company; or

(5)   In the event that the Company converts to the Stock Holding Company on a stand-alone basis, a “Change in Control” of the Bank or the Stock Holding Company (a) shall mean an event of a nature that would be required to be reported in response to Item (a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), or results in a Change in Control of the Bank or the Stock Holding Company within the meaning of the BHCA; or (b) without limitation shall be deemed to have occurred at such time as (i) any “person” (as the term is used in Section 13(d) and 14(d) of the Exchange Ac t) other than the Stock Holding Company is or becomes a “beneficial owner” (as defined in Rule 13-d under the Exchange Act) directly or indirectly, of securities of the Bank representing 25% or more of the Bank’s outstanding securities ordinarily having the right to vote at the election of directors except for any securities of the Bank received by the Stock Holding Company in connection with the reorganization and any securities purchased by the Bank’s employee stock ownership plan and trust shall not be counted in determining whether such plan is the beneficial owner of more than 25% of the Bank’s securities, (ii) a proxy statement soliciting proxies from stockholders of the Bank, by someone other than the current management of the Bank, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Stock Holding Company of the Bank or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securit ies then subject to the plan or transaction are exchanged or converted into cash or property or securities not issued by the Bank or the Stock Holding Company, or (iii) a tender offer is made for 25% or more of the voting securities of the Bank and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Bank have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.

Notwithstanding the foregoing, a “Change in Control” of the Bank or the Company shall not be deemed to have occurred if the Company ceases to own at least 51% of all outstanding shares of stock of the Bank in connection with a conversion of the Company from mutual to stock form.

Also not withstanding the foregoing, the formation of a Stock Holding Company subsidiary of the Company which acquires 100% of the Bank’s voting common stock, shall not be a Change in Control.

2.8   Conversion Transaction.  “Conversion Transaction” means the conversion of the Company from the mutual to stock form of organization either on a stand-alone basis or in the context of a merger conversion, as provided by regulations of the Commissioner or FDIC.

2.9   Deferred Compensation Contributions.  “Deferred Compensation Contributions” shall mean those amounts contributed to the Plan by an eligible employee from his bas e salary and bonus, if any.

2.11         Discretionary Contributions.  “Discretionary Contributions” means those contributions made by the Employer to the Account of a Participant in excess of the Employer Mandatory Contribution and Deferred Compensation Contributions.  Discretionary Contributions may vary from year to year.  The Employer is not obligated to make Discretionary Contributions in any year.

2.12         Disability.  ”Disability” means a physical or mental condition which, in the opinion of the Committee, permanently prevents an employee from satisfactorily performing employee’s duties for Employer.  The Committee’s decision as to Disability will be based upon medical reports and/or other evidence satisfactory to the Committee.  In no event shall a Disability be deemed to occur or to continue after a Participant’s Normal Retirement Date.

2.13         Employer. “Employer” means Jacksonville Savings Bank, a federally chartered savings bank, or any successor to the business thereof, and any affiliated or subsidiary corporations designated by the Board.

2.14         Employer Contributions.  “Employer Contributions” means Employer Mandatory Contributions, Employer Discretionary Contributions and Deferred Compensation Contributions.

2.16          Interest Rate.  “Interest Rate” means, with respect to any calendar month, the monthly equivalent of three percentage points (3%) greater than the annual yield of Moody’s Average Corporate Bond Yield Index for the preceding calendar month as published by Moody’s Investor Service, Inc. (or any successor thereto) or, if such index is no longer published, a substantially similar index selected by the Board.

2.17          Mandatory Contribution. “Mandatory Contributions” means those annual contributions by the Employer to the Account of a Participant in the amount set forth in the Participation Agreement.

2.18          Normal Retirement Date.  “Normal Retirement Date” means the date on which a Participant retires from service on or after any of the following: (i) the attainment of age 65; (ii) the attainment of age 55 and the completion of 15 years of service; or (iii) the completion of 25 years of service.

2.19         Participant.  “Participant” means any individual who is participating or has participated in this Plan or a predecessor plan or deferred compensation agreement, as provided in Article 3.

2.20         Participation Agreement.  “Participation Agreement” means the agreement filed by a Participant which acknowledges assent to the terms of the Plan and in which the Participant elects to defer the receipt of Compensation.  The Participation Agreement must be filed with the Committee prior to payment of any Employer Contributions.

2.23         Stock Holding Company.  “Stock Holding Company” means the holding company resulting from a stock conversion of the Company in a Conversion Transaction or established as a mid-tier holding company majority-owned subsidiary of the Company to acquire 100% of the Bank’s stock.

(2)   Participation.  An eligible employee shall participate in the Plan either (i) as the result of having been a participant in a Deferred Compensation Agreement listed at Exhibit A or (ii) after being selected by the Board to participate and by submitting to the Committee a Participation Agreement in the form attached hereto as Exhibit B.  If an eligible employee elects to make Deferred Compensation Contributions to the Plan, the employee shall submit a Participation Agreement by December 15 of the calendar year immediately preceding the year for which Deferred Compensation Contributions shall be made.  In the event that an employee first becomes eligible to participate or to make Deferred Compensation Contributions during a calendar year, and the employee elects to make Deferred Compensation Contributions to the Plan, a Participation Agreement must be submitted to the Committee no later than thirty (30) days following notification of the employee of eligibility to participate, and such Participation Agreement shall be effective only with regard to Deferred Contributions based on base salary and bonuses payable following the submission of the Participation Agreement to the Committee.

 

4.2   Deferred Compensation Contributions.  In accordance with the terms of the Plan, a Participant may elect to defer a portion of his base salary and bonus payable during the year into the Plan.

4.3   Employer Mandatory Contributions.  Effective for the year ending December 31, 1996, and as of each subsequent December 31 during Participant’s period of employment with the Employer, the Employer shall, subject to the rights reserved to it under the Plan, credit to the Account of the Participant an amount as is determined by the Board as set forth in the Participation Agreement.

4.4   Employer Discretionary Contributions.  The Employer may make Discretionary Contributions to Participants’ Accounts.  Discretionary Contributions shall be credited at such times and in such amounts as the Board in its sole discretion shall determine.

4.5   Life Insurance Policy.  In its discretion, the Employer may maintain an insurance policy on the life of the Participant.  In the event of the Participant’s death while employed by the Employer, any death benefits payable under such a policy will be paid to the Employer, as beneficiary under the policy, and a commensurate amount shall be distributed to the Participant’s designated beneficiary.  In the event of a Change in Control or the Participant’s retirement, disability, or other termination of employment: (a) The cash value of such policy will be credited to the Participant’s Account for pur poses of distribution under Article 5, or (b) said policy will be assigned to the Participant.

4.6   Interest.  Unless the Accounts are invested in accordance with Section 4.7 below, the Accounts shall be credited monthly with Interest earned based on the Interest Rate specified in Section 2.  Interest earned shall be calculated as of each Determination Date based upon the average daily balance of the account since the preceding Determination Date and shall be credited to the Participant’s Account at that time.

(1)   The Employer may, in lieu of crediting Interest under Section 4.6 above, determine what investment options to offer under the Plan and may, from time to time, change the investment options offered hereunder.  The investment options available under the Plan shall be known, collectively, as the “Investment Funds.” The Employer shall communicate in writing to Participants, the Investment Funds available under the Plan from time to time.

(2)   A Participant may direct that the various contributions made on his behalf be allocated to one or more of the Investment Funds as made, in multiples of any whole percentage (from 1% to 100%), or at the election of the Employer and as communicated in writing to Participants in increments of a set dollar amount.

(3)   Election Forms.  Each Participant must complete a form directing the allocation of his Account among the Investment Funds.  Such direction shall continue in effect until such time as the Participant submits a form directing a different allocation.  The investment of future Employer Contributions may be changed effective on or after the first day of any calendar quarter (January 1, April 1, July 1 or October 1) which next occurs at least ten (10) days after the instruction has been received by the Committee or on such other date reasonably determined by the Committee.

(4)   In the event that the Employer directs the Trustee to discontinue investment in a particular fund to which a Participant has directed contributions, or in the event that a Participant fails to provide investment instructions for all or any contribution to his account, the portion of such contributions for which a Participant has provided no investment instruction, shall be invested in a manner determined by the Trustee and communicated in writing to Participants.

(5)   A Participant may elect to transfer amounts from one Investment Fund to another in increments of any whole percentage (from 1% to 100% of the Participant’s Account Balance) or such other increments reasonably determined by the Committee. Such election shall be effective on or after the first day of any calendar quarter, provided written notice has been received by the Committee at least ten (10) days before the effective date of the transfer or on such other date reasonably determined by the Committee.

(6)   The timing and frequency of transfers among investment options may be further restricted if such restrictions are required by the company handling or providing the investment option.

4.8   Determination of Accounts.  Each Participant’s Account as of each Determination Date shall consist of the balance of the Participant’s Account as of the immediately preceding Determination Date, plus (i) any Deferred Compensation Contributions made during the year and any Interest or other earnings credited thereon, (ii) the Employer’s Mandatory Contributions and any Interest or other earnings credited thereon, (iii) any Employer Discretionary Contributions and any Interest or other earnings credited thereon, minus the amount of any distributions made since the immediately preceding Determination Date.

In the event that: (i) a valid non-qualified deferred compensation rabbi trust is established by the Employer, (ii) such rabbi trust is annually funded in the manner contemplated by this Article 4, (iii) the Participant provides investment recommendations to the Trustee or recommends to the Trustee an investment advisor for amounts credited to his account in the rabbi trust; and (iv) the Trustee, in its sole discretion, follows the Participant’s recommendations, then the amount payable to the Participant (or his Beneficiary) shall be the amount credited to the Participant’s Account pursuant to the funding method set forth in this Article 4, increased or decreased by the actual investment experience of such Participant’s account in the rabbi trust, or the amount purchasable by this amount.

4.9   Vesting of Accounts.  Each Participant shall be one hundred percent (100%) vested in the amounts credited to such Participant’s Account and earnings thereon.

4.10          Statement of Accounts.  The Committee shall submit to each Participant, within one hundred twenty (120) days after the close of each calendar year and at such other time as determined by the Committee, a statement setting forth the balance to the credit of the Account maintained for a Participant.

5.1   Plan Benefit.  If a Participant terminates employment on his Normal Retirement Date or for reasons other than death, the Employer shall pay a Plan Benefit equal to the Participant’s vested Account, as determined in accordance with Article 4.

(1)   If the Participant dies after termination of employment with the Employer, the remaining unpaid balance of the Participant’s vested Account shall be paid in the same form that payments were being made prior to the Participant’s death.

(2)   If the Participant dies prior to termination of employment with the Employer, the amount payable shall be the Participant’s Account Balance. Payments shall be made in accordance with Section 5.5.

5.3   Accelerated Distribution.  Notwithstanding any other provision of the Plan, at any time after a Change in Control or at any time following termination of Employment, a Participant shall be entitled to receive, upon written request to the Committee, an amount equal to ninety percent (90%) of the balance in his Account as of the Determination Date immediately preceding the date on which the Committee receives the written request.  The amounts payable under this section shall be paid in a lump sum within sixty-five (65) days following the receipt of the notice by the Committee from the Participant.  The remaining ten per cent (10%) of the Participant’s account shall be forfeited.

5.4   Hardship Distributions Due to Unforeseeable Emergency.  Upon a finding that a Participant has suffered an unforeseeable emergency which results in a financial hardship, the Committee may, in its sole discretion, make distributions from the Participant’s Account prior to the time specified for payment of benefits under the Plan.  An “unforeseeable emergency” is an unanticipated emergency that is caused by an event beyond the control of the participant or beneficiary that would result in a severe financial hardship to the individual if early withdrawal is not permitted.  The amount of such distribution shall be limited to the amount reasonably necessary (including any taxes required to be withheld) to meet the Participant’s requirements during the financial hardship.

(1)   All Plan Benefits other than Hardship Distributions shall be paid in the form selected by the Participant in the Participation Agreement from among the following alternatives:

(2)   The Interest on the unpaid balance of an Account under (a) shall be equal to the average interest rate on the applicable Account over the thirty-six (36) months immediately preceding the commencement of benefit payments.

5.6   Withholding for Taxes.  The Employer shall withhold from payments made hereunder any taxes required to be withheld from a Participant’s wages for the federal or any state or local government.  However, a Beneficiary may elect not to have withholding for federal income tax purposes pursuant to section 3405(a)(2) of the Internal Revenue Code, or any successor provision.

5.7   Commencement of Payments.  Payment shall commence, except as may be provided otherwise in the Participation Agreement, not later than sixty (60) days after the end of the month in which the Participant terminates employment with the Employer. All payments shall be made as of the first day of the month.

5.8   Full Payment of Benefits.  Notwithstanding any other provision of this Plan, all benefits shall be paid no later than one hundred eighty (180) months following the Participant’s attaining age sixty-five (65) or termination of service, whichever is later.

5.9   Payment to Guardian.  If a Plan Benefit 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 having the care and custody of such minor, incompetent or person.  The Committee may require proof of incompetency, 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 Employer from all liability with respect to such benefit.