PERFORMANCE SHARE AWARD AGREEMENT AND TRUST AGREEMENT KNBT BANCORP, INC.
EXHIBIT
10.1 FORM OF 2006 PERFORMANCE SHARE AWARD
2004
RECOGNITION AND RETENTION PLAN
AND
TRUST AGREEMENT
KNBT
BANCORP, INC.
THIS
AGREEMENT
is made
as of this __ day of ______ 2006 (hereinafter referred to as the “Date of
Grant”) by and between KNBT Bancorp, Inc. (the “Corporation”) and _________ (the
“Recipient”). Defined terms, unless otherwise defined herein, shall have the
same meaning as set forth in the Plan (as hereinafter defined), as amended
from
time to time.
WHEREAS,
the
Corporation has adopted the 2004 Recognition and Retention Plan and Trust
Agreement (the “Plan”) which is hereby incorporated in its entirety by reference
herein; and
WHEREAS,
the
Corporation desires to grant to the Recipient a Performance Share Award, as
described in the Plan.
NOW,
THEREFORE,
in
consideration of the mutual covenants hereinafter set forth and for other good
and valuable consideration, the Corporation and the Recipient agree as
follows:
1. Plan
Share Award.
The
Corporation hereby grants to Recipient a Performance Share Award consisting
of a
total of _______ shares of common stock, $0.01 par value per share (“Common
Stock”), subject to increase as provided herein, upon the terms and conditions
set forth herein.
2. Vesting
of Performance Share Award.
|
(a)
|
(i)
|
The
Performance Share Award shall vest over a period of five years from
the
Date of Grant, except as provided otherwise in the Plan or herein.
Sixty
percent of the shares subject to this Performance Share Award will
vest on
the third anniversary of the Date of Grant if the Performance Targets
set
forth in Annex A hereto are achieved. If the Performance Targets
set forth
on Annex A are achieved and the Recipient remains in the service
of the
Corporation or any Subsidiary Company (as defined in the Plan) on
each of
the fourth and fifth anniversary dates of the Date of Grant, then
on each
such anniversary dates 20% of the shares covered by the Performance
Share
Award will vest. No distribution shall occur, subject to the provision
of
Section 2(b) hereof, unless the Committee (as defined in the Plan)
certifies in writing that the Performance Targets to which this
Performance Share Award is subject have been achieved.
|
|
(ii)
|
In
the event that the Enhanced Performance Targets set forth in Annex
A are
achieved, the number of shares covered by this Performance Share
Award
will be increased by _______ shares, said shares to vest in accordance
with the same schedule set forth above and subject to the same continued
service requirement (60% on the third anniversary of the Date of
Grant and
20% on each of the fourth and fifth anniversary dates of the Date
of
Grant).
|
1
(b) Notwithstanding
the general rule set forth above, all shares of Common Stock subject to the
Performance Share Award held by the Recipient whose service to the Corporation
or any Subsidiary terminates due to death or Disability (as defined in Section
3.10 of the Plan) shall be deemed earned and become fully vested as of the
Recipient’s last day of service with the Corporation or any Subsidiary Company
(provided, however, no such accelerated vesting shall occur if the Recipient
continues to serve as a Director (including, for purposes hereof, service as
an
Advisory Director) of at least one member of the Employer Group (as defined
in
Section 3.13 of the Plan)) and shall be distributed as soon as practicable
thereafter. However, notwithstanding the provisions of Section 7.01(b) of the
Plan, no shares of Common Stock subject to this Performance Share Award held
by
the Recipient which remain unearned as of the effective date of a Change in
Control of the Corporation (as defined in Section 3.05 of the Plan) shall be
deemed earned as of the effective date of such Change in Control. The Recipient
understands and acknowledges the foregoing and agrees that such provision will
supersede the provisions of Section 7.01(b) of the Plan and will be controlling
with respect to this Performance Share Award.
3. Terms
and Conditions.
The
terms and conditions included in the Plan are incorporated herein by reference,
and to the extent that any conflict may exist between the terms and conditions
included in the Plan and the terms of this Agreement, the terms and conditions
included in the Plan shall control except with respect to the provisions of
Section 2(b) with respect to the treatment of unearned shares subject to this
Performance Share Award in the event a Change in Control of the Corporation
occurs, in which situation the provisions of Section 2(b) hereof
control.
4. Withholding.
The
Corporation, in its discretion, may withhold from any cash payment or Common
Stock distribution made to the Recipient under the Plan sufficient amounts
to
cover any applicable withholding and employment taxes, and if the amount of
a
cash payment is insufficient, the Corporation may require the Recipient or
the
Recipient=s
beneficiary to pay to the Corporation the amount required to be withheld as
a
condition of delivering the shares of Common Stock.
5. Transferability.
The
Performance Share Award granted to the Recipient may not be sold, assigned,
transferred, pledged, or otherwise encumbered or disposed of prior to the time
that it is earned and distributed pursuant to the terms of the
Plan.
6. Administration.
The
authority to manage and control the operation and administration of this
Agreement shall be vested in the Committee, and the Committee shall have all
powers with respect to this Agreement as it has with respect to the Plan. Any
interpretation of the Agreement by the Committee and any decision made by it
with respect to the Agreement is final and binding in the absence of action
by
the Board.
7. Not
an
Employment Contract.
The
grant of the Performance Share Award will not confer on the Recipient any right
with respect to continuance of employment or other service with the Corporation
or any Subsidiary Company, nor will it interfere in any way with any right
the
Corporation or any Subsidiary Company would otherwise have to terminate or
modify the terms of the Recipient’s employment or other service at any
time.
8. Notices.
Any
written notices provided for in this Agreement or the Plan shall be in writing
and shall be deemed sufficiently given if either hand delivered or if sent
by
fax or overnight courier, or by postage paid first class mail. Notices sent
by
mail shall be deemed received three business days after mailing but in no event
later than the date of actual receipt. Notices shall be directed, if to the
Recipient, at the Recipient’s address indicated by the Corporation’s records, or
if to the Corporation, at the Corporation’s executive office.
9. No
Rights As Shareholder.
The
Recipient shall not have any rights of a shareholder with respect to the shares
of Common Stock subject to the Performance Share Award until a stock certificate
has been duly issued following vesting of the Performance Share Award. Any
dividends, cash or stock, related to unvested shares subject to this Performance
Share Award shall be held by the Trust for the benefit of the Recipient and
will
be paid out in accordance with the provisions of Section 7.02 of the Plan as
soon as practicable after such shares have been earned.
2
10. Delivery
of Stock.
Whenever shares of Common Stock subject to the Performance Share Award are
released from restriction, the Recognition and Retention Plan Trust (the
“Trust”) shall, subject to the implementation of an arrangement between the
Corporation and the Recipient to effectuate all necessary tax withholding,
issue
a certificate to the Recipient for such unrestricted shares. Such certificate
may, however, reflect any applicable restrictions under federal securities
laws.
The Trust shall follow all requisite procedures to deliver such certificates
to
Recipient; provided, however, that such delivery may be postponed to enable
the
Corporation and the Trust to comply with any applicable procedures, regulations
or listing requirements of any governmental agency, stock exchange or regulatory
agency.
11. Amendment.
This
Agreement may be amended by written agreement of the Recipient and the
Corporation, without the consent of any other person. Notwithstanding the
foregoing, if the Corporation determines, after a review of the final
regulations issued under Section 409A of the Internal Revenue Code of 1986,
as
amended (the “Code”), and all applicable Internal Revenue Service guidance, that
this Performance Share Award should be further amended to avoid triggering
the
tax and interest penalties imposed by Section 409A of the Code, the Corporation
may amend this Performance Share Award to the extent necessary to avoid
triggering the tax and interest penalties imposed by Section 409A of the Code
without consent of the Recipient.
IN
WITNESS WHEREOF,
the
Corporation has caused this Agreement to be executed by its duly authorized
officers, and the Recipient has hereunto set his or her hand, all as of the
day
first above written.
|
ATTEST:
|
KNBT
BANCORP, INC.
|
|
______________________________
|
By:_________________________________
|
|
Xxxxxxx
X. Xxxxxx
|
Xxxxxxx
X. Xxxxxxx
|
|
Secretary
|
Chairman
of the Board
|
|
KNBT
BANCORP, INC.
|
|
|
By:_________________________________
|
|
|
Xxxxx
X. Xxxxxx
|
|
|
President
and Chief Executive Officer
|
|
|
(Seal)
|
[NAME
OF RECIPIENT]
|
|
_________________________________
|
|
|
|
[Name]
|
3
Annex
A
Performance
Targets
Both
of
the following two performance targets must be achieved in order for the shares
subject to the Performance Share Award to vest in accordance with the provisions
of Section 2(a)(i) of the Agreement:
| (a) |
For
the fiscal year ending December 31, 2008 (“Fiscal Year 2008”), the
Corporation has a return on average equity (“ROAE”) (as calculated in
accordance with generally accepted accounting principles used in
the
United States (“GAAP”)) of ____% or higher;
and
|
| (b) |
The
Corporation has for Fiscal Year 2008 diluted earnings per share (“EPS”)
(as calculated in accordance with GAAP) of $___ or
higher.
|
Enhanced
Performance Targets
In
the
event both of the enhanced performance targets set forth below are achieved,
the
number of shares subject to the Performance Share Award will be increased as
provided by Section 2(a)(ii) of the Agreement:
| (a) |
The
Corporation has for Fiscal Year 2008 a ROAE as calculated in accordance
with GAAP of ____% or higher; and
|
| (b) |
The
Corporation has for Fiscal Year 2008 EPS (as calculated in accordance
with
GAAP) of $_____ or higher.
|
4
