TROY HILL BANCORP, INC. AMENDED AND RESTATED RECOGNITION AND RETENTION PLAN FOR OFFICERS AND TRUST AGREEMENT
EXHIBIT 10.12
XXXX XXXX BANCORP, INC.
AMENDED AND RESTATED RECOGNITION AND RETENTION
PLAN FOR OFFICERS AND TRUST AGREEMENT
AMENDED AND RESTATED RECOGNITION AND RETENTION
PLAN FOR OFFICERS AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 ESB Financial Corporation (the “Corporation”) hereby amends and restates the Xxxx Xxxx
Bancorp, Inc. Recognition and Retention Plan for Officers (the “Plan”) and Trust (the “Trust”) upon
the terms and conditions hereinafter stated in this amended and restated Recognition and Retention
Plan for Officers and Trust Agreement (the “Agreement”), with this amendment and restatement
effective as of November 21, 2006.
1.02 The Trustees hereby accept this Trust and agree 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.
ARTICLE II
PURPOSE OF THE PLAN
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to retain personnel of experience and ability in key positions
by providing such key employees of the Corporation, as successor to Xxxx Xxxx Bancorp, Inc., with a
proprietary interest in the Corporation as compensation for their contributions to the Corporation,
the Bank, and other Subsidiaries and as an incentive to make such contributions in the future.
ARTICLE III
DEFINITIONS
DEFINITIONS
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 ESB Bank, as the successor to Xxxx Xxxx Federal Bank.
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 “Code” means the Internal Revenue Code of 1986, as amended.
3.05 “Committee” means the committee appointed by the Board pursuant to Article IV hereof.
3.06 “Common Stock” means shares of the common stock, $.01 par value per share, of the
Corporation.
3.07 “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).
3.08 “Effective Date” means the hour and day upon which Common Stock was initially sold by
Xxxx Xxxx Bancorp, Inc. in the Officering. The amendment and restatement of this Plan shall be
effective as of November 21, 2006.
3.09 “Employee” means any person who is employed by the Corporation, the Bank, or any
Subsidiary, including officers or other employees who may be directors of the Corporation.
3.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
3.11 “Offering” means the offering of Common Stock to the public pursuant to the Plan of
Conversion of Xxxx Xxxx Federal Savings and Loan Association.
3.12 “Plan Shares” or “Shares” means shares of Common Stock held in the Trust which may be
distributed to a Recipient pursuant to the Plan.
3.13 “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.
3.14 “Recipient” means an Employee who receives a Plan Share Award under the Plan.
3.15 “Retirement” means the later of (a) the attainment of age sixty-five (65) or such earlier
age as may be specified in a Recipient’s Plan Share Award, and (b) the one-year anniversary of the
grant of a Plan Share Award.
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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” or “Trustees” means those person or persons (which may be members of the
Committee) or firm or entity, nominated by the Committee and approved by the Board pursuant to
Sections 4.01 and 4.02 to hold legal title to the Plan assets for the purposes set forth herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
ADMINISTRATION OF THE PLAN
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, none of whom shall be an
officer or employee of the Corporation and each of whom shall be a “disinterested person” within
the meaning of Rule 16b-3 under the Exchange Act. 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. 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. The Committee shall recommend to the Board
one or more persons (which may be from among its members), or a firm or other entity, to act as
Trustees in accordance with the provisions of this Plan and Trust and the terms of Article VIII
hereof.
4.02 Role of the Board. The members of the Committee and the Trustee or Trustees
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, replace or add Trustees, provided that any directors who are selected as members of the
Committee shall not be officers or employees of the Corporation and shall be “disinterested
persons” within the meaning of Rule 16b-3 promulgated under the Exchange Act.
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 the Plan. 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.
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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 Plan Share
Awards granted under the Plan are designed to not constitute a deferral of compensation for
purposes of Section 409A of the Code, in reliance upon the short-term deferral exception in the
proposed regulations. No Recipient shall be permitted to defer the recognition of income beyond
the date a Plan Share Award shall be deemed earned pursuant to Article VII of this Plan.
ARTICLE V
CONTRIBUTIONS
CONTRIBUTIONS
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 shall be permitted.
5.02 Investment of Trust Assets; Number of Plan Shares. Subject to Section 8.02
hereof, the Trustees shall invest all of the Trust’s assets primarily in Common Stock. The
aggregate number of Plan Shares initially available for distribution pursuant to this Plan
shall be equal to three percent (3.0%) of the shares of Common Stock which are issued by the
Corporation in the Offering (rounded down to the nearest whole number), which shares shall be
purchased by the Trust in such Offering with funds contributed by the Corporation. Subsequent
to consummation of the Offering, the Trust may purchase (from the Corporation and/or
stockholders thereof) additional shares of Common Stock for distribution pursuant to this
Plan.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
ELIGIBILITY; ALLOCATIONS
6.01 Eligibility. Plan Share Awards may be made to such Employees as may be
selected by the Committee. In selecting those Employees to whom Plan Share Awards may be
granted and the number of Shares covered by such Awards, the Committee shall consider the
position and responsibilities of the eligible Employees, the value of their services to the
Corporation and any Subsidiaries, and any other factors the Committee may deem relevant. 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.
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6.02 Form of Allocation. As promptly as practicable after a determination is
made pursuant to Section 6.01 that a Plan Share Award is to be issued, 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 Employee. Such terms shall be reflected in a written agreement with the
Employee. The date on which the Committee so notifies the Recipient shall be considered the
date of grant of the Plan Share Award. The Committee shall maintain records as to all grants
of Plan Share Awards under the Plan.
6.03 Allocations Not Required to any Specific Employee. Notwithstanding anything
to the contrary in Section 6.01 hereof, no Employee shall have any right or entitlement to
receive a Plan Share Award hereunder, such Awards being at the total discretion of the
Committee.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earning Plan Shares; Forfeitures.
(a) General Rules. Unless the Committee shall specifically state to the contrary at
the time a Plan Share Award is granted, and subject to the terms hereof, Plan Shares subject to an
Award shall be earned by a Recipient at the rate of 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. If
the employment of a Recipient 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), (c) and (d) below), the Recipient shall forfeit the right to any Shares subject to the Award
which have not theretofore been earned. 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 terminates due to death or
Disability shall be deemed earned as of the Recipient’s last day of employment with the
Corporation or any Subsidiary and shall be distributed as soon as practicable thereafter;
provided, however, that no Awards shall be distributed prior to six months from the date of grant
of the Plan Share Award.
(c) Exception for Change in Control and Retirement. 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” or the date the Recipient
becomes eligible for Retirement. A “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.
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(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 of employment shall be deemed to be for cause if the Employee has been
convicted of a felony by a court of competent jurisdiction or has been adjudged by a court of
competent jurisdiction to be liable for gross negligence or misconduct in the performance of his
duties to the Corporation or any Subsidiary.
7.02 Distribution of Dividends. Any cash dividends declared in respect of each 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; provided, however, that no Plan Shares shall be distributed to the Recipient or
Beneficiary pursuant to a Plan Share Award within six months from the date on which that Plan
Share Award was granted to such person; provided further, however, in the case of a Plan Share
Award granted prior to the date this Plan is approved by stockholders of the Corporation if
presented to stockholders in accordance with Section 4.04 hereof, no Plan Shares shall be
distributed to a Recipient or Beneficiary pursuant to such Plan Share Award within six months from
the date on which such shareholder approval of the Plan was obtained.
(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 Trustees 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 Trustees may require the
Recipient or Beneficiary to pay to the Trustees the amount required to be withheld as a condition
of delivering the Plan Shares. The Trustees 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 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 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
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period of time or under such circumstances as the Committee, upon the advice of counsel, may
deem appropriate.
7.04 Voting of Plan Shares. After a Plan Share Award has been made, the Recipient
shall be entitled to direct the Trustees as to the voting of the Plan Shares which are covered by
the Plan Share Award and which have not yet been earned and distributed to him pursuant to Section
7.03, subject to rules and procedures adopted by the Committee for this purpose. Provided that the
Recipient informs the Trustees how the Recipient voted Plan Shares which have been earned and
distributed for and against proposals to stockholders, the Trustees shall vote all Plan Shares
which have not yet been earned and distributed pursuant to Section 7.03 in the same proportion for
and against proposals to stockholders as the Recipient actually votes Plan Shares which have been
earned and distributed pursuant to Section 7.03. If the Recipient does not provide the Trustees
with such information, Plan Shares which have not yet been earned and distributed pursuant to
Section 7.03 shall not be voted by the Trustees. In the event a tender offer is made for Plan
Shares, the Trustees shall tender Plan Shares held by it which have not yet been earned and
distributed in the same proportion in which the Recipient actually tenders Plan Shares which have
been earned and distributed.
ARTICLE VIII
TRUST
TRUST
8.01 Trust. The Trustees 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
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 Trustees shall invest all assets of the Trust in Common Stock
to the fullest extent practicable, except (i) to the extent that the Trustees determine that the
holding of monies in cash or cash equivalents is necessary to meet the obligations of the Trust and
(ii) contributions to the Trust by the Corporation prior to the Offering may be temporarily
invested in such interest-bearing account or accounts as the Trustees shall determine to be
appropriate. In performing their duties, the Trustees 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 Trustees are 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
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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 Trustees 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 their rights, duties and obligations
hereunder, and such other legal services or representation as they 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 Trustees shall not be required
to make any inventory, appraisal or settlement or report to any court, or to secure any order of
court for the exercise of any power herein contained, or give bond.
8.03 Records and Accounts. The Trustees 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 Committee.
8.04 Expenses. All costs and expenses incurred in the operation and administration of
this Plan shall be borne by the Corporation.
8.05 Indemnification. Subject to the requirements of applicable laws and regulations,
the Corporation shall indemnify, defend and hold the Trustees harmless against all claims, expenses
and liabilities arising out of or related to the exercise of the Trustees’ powers and the discharge
of their duties hereunder, unless the same shall be due to their gross negligence or willful
misconduct.
ARTICLE IX
MISCELLANEOUS
MISCELLANEOUS
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
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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.
9.02 Amendment and Termination of Plan. The Board may, by resolution, at any time
amend or terminate the Plan, subject to 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 anything contained in this Plan to the contrary, the provisions of
Articles VI and VII of this Plan shall not be amended more than once every six months, other than
to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated under such statutes.
9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall not be
transferable by a Recipient, and during the lifetime of the Recipient, Plan Shares may only be
earned by and paid to a Recipient who was notified in writing of an Award by the Committee
pursuant to Section 6.02. 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 Rights. Neither the Plan nor any grant of a Plan Share Award or
Plan Shares hereunder nor any action taken by the Trustees, the Committee or the Board in
connection with the Plan shall create any right on the part of any Employee to continue in
the employ of the Corporation or any Subsidiary.
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. The Plan and Trust shall be governed by the laws of the
Commonwealth of Pennsylvania.
9.07 Effective Date. This Plan as originally adopted was effective as of the
Effective Date, and Awards may be granted hereunder as of or after the Effective Date and as
long as the Plan remains in effect. The amendment and restatement of this Plan shall be
effective as of November 21, 2006.
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.
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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.
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IN WITNESS WHEREOF, the Corporation has caused this 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 have duly and validly executed this Agreement, all on this 21st day of November 2006.
| ESB FINANCIAL CORPORATION | ||||||
| By: | /s/ Xxxxxxxxx X. Xxxxxxxx | |||||
| Xxxxxxxxx X. Xxxxxxxx | ||||||
| President and Chief Executive Officer | ||||||
ATTEST: |
||||||
/s/ Xxxxx X. Xxxxx |
||||||
Group Senior Vice President of Operations
and Secretary |
||||||
| TRUSTEES: | ||||||
| /s/ Xxxxxxx X. Xxxxxxxxx | ||||||
| /s/ Xxxxx X. Xxxxxx | ||||||
| /s/ Xxxxx X. Xxxxx | ||||||
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