FIDELITY BANK PaSB
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 8th day of September, 2003, by and between
FIDELITY BANK PaSB, a State Stock Savings Bank located in Pittsburgh,
Pennsylvania (the "Company") and XXXX XXXXXXXX (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words
and phrases shall have the meanings specified:
1.1.1 "Change of Control" means that the Executive has been
terminated within 12 months of a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act") or any successor thereto;
provided that, without limitation, such a change in control shall be
deemed to have occurred if (A) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
25% or more of the combined voting power of the Corporation's then
outstanding securities, or (B) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Board of Directors of the Corporation cease for any reason to
constitute at least a majority thereof, unless the election, or the
nomination for election by stockholders, of each director who was not a
director at the beginning of such period has been approved in advance
by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period.
1.1.2 "Code" means the Internal Revenue Code of l986, as
amended.
1.1.3 "Disability" means, if the Executive's suffering a
sickness, accident or injury which has been determined by the carrier
of any group disability insurance policy
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provided by the Company or made available by the Company to its
employees and covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Company of
the carrier's or Social Security Administration's determination upon
the request of the Company.
1.1.4 "Early Retirement Age" means the later of the
Executive's 55th birthday or the Executive's age after completing
fifteen (15) Years of Service.
1.1.5 "Early Retirement Date" means the month, day and year in
which Early Retirement occurs.
1.1.6 "Early Termination" means the Termination of Employment
before Early Retirement Age for reasons other than death, Disability,
Termination for Cause or following a Change of Control.
1.1.7 "Early Termination Date" means the month, day and year
in which Early Termination occurs.
1.1.8 "Normal Retirement Age" means the Executive's 65th
birthday.
1.1.9 "Normal Retirement Date" means the later of the Normal
Retirement Age or Termination of Employment.
1.1.10 "Plan Year" means a twelve-month period commencing on
January 1 and ending on December 31 of each year.
1.1.11 "Termination for Cause" See Section 5.2.
1.1.12 "Termination of Employment" means that the Executive
ceases to be employed by the Company for any reason whatsoever other
than by reason of a leave of absence which is approved by the Company.
For purposes of this Agreement, if there is a dispute over the
employment status of the Executive or the date of the Executive's
Termination of Employment, the Company shall have the sole and absolute
right to decide the dispute.
1.1.13 "Year of Service" means each computation period of
twelve consecutive months during which the Executive is employed on a
full-time basis by the Company, inclusive of any approved leave of
absence. The initial computation period shall commence on the
Executive's date of employment and end twelve months thereafter.
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Article 2
Living Benefits
2.1 Normal Retirement Benefit. Upon Termination of Employment on or
after the Normal Retirement Age for reasons other than death, the Company shall
pay to the Executive the benefit described in this Section 2.1 in lieu of any
other benefit under this Agreement.
2.1.1 Amount of Benefit. The annual benefit under this Section
2.1 is $60,000 (Sixty Thousand Dollars). The Company's Board of
Directors, in its sole discretion, may increase the benefit under this
Section 2.1.1; however, any increase shall require the recalculation of
Schedule A.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit to the Executive in 12 equal monthly installments payable on
the first day of each month commencing with the month following a
period of sixty (60) days after the Executive's Normal Retirement Date
and continuing for 179 additional months.
2.2 Early Retirement Benefit. Upon Early Retirement, the Company shall
pay to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is
the Early Retirement amount set forth in Schedule A for the Plan Year
ending immediately prior to the Early Retirement Date.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit to the Executive in 12 equal monthly installments payable on
the first day of each month commencing with the month following a
period of 60 days after said Termination of Employment and continuing
for 179 months.
2.3 Early Termination Benefit. If the Executive terminates employment
prior to Early Retirement Age, other than by reason of death or Disability, the
Executive will not be entitled to a benefit under this Agreement. However, the
Company's Board of Directors, in its sole discretion, may provide a benefit to
the Executive upon Early Termination.
2.4 Disability Benefit. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Company shall pay to the
Executive the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
2.4.1 Amount of Benefit. The benefit under this Section 2.4 is
the Disability amount set forth in Schedule A for the Plan Year ending
immediately prior to the date in which Termination of Employment
occurs.
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2.4.2 Payment of Benefit. The Company shall pay the benefit to
the Executive in a lump sum on the first day of the month following a
period of ninety (90) days after said Termination of Employment.
2.5 Change of Control Benefit. Upon a Change of Control, the Company
shall pay to the Executive the benefit described in this Section 2.5 in lieu of
any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5 is
the Change of Control amount set forth in Schedule A for the Plan Year
ending immediately prior to the date in which Termination of Employment
occurs.
2.5.2 Payment of Benefit. The Company shall pay the benefit to
the Executive in a lump sum on the first day of the month following a
period of sixty (60) days after said Termination of Employment.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the
active service of the Company, the Company shall pay to the Executive's
beneficiary the benefit described in this Section 3.1. This benefit shall be
paid in lieu of the Lifetime Benefits of Article 2.
3.1.1 Amount of Benefit. The annual benefit under this Section
3.1 is the Normal Retirement Benefit amount described in Section 2.1.1.
3.1.2 Payment of Benefit. The Company shall pay the annual
benefit to the beneficiary in 12 equal monthly installments payable on
the first day of each month commencing with the month following a
period of sixty (60) days after the Executive's death and continuing
for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after the
benefit payments have commenced under this Agreement but before receiving all
such payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
3.3 Death Following Termination of Employment But Before Benefits
Commence. If the Executive is entitled to benefits under this Agreement, but
dies prior to receiving said benefits, the Company shall pay to the Executive's
beneficiary the same benefits, in the same manner, they would have been paid to
the Executive had the Executive survived; however, said benefit payments will
commence upon the Executive's death.
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Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing a written designation with the Company. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incapacitated, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incapacitated person or incapable person. The Company may require proof
of incapacity, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would create an
excise tax under the excess parachute rules of Section 28OG of the Code.
5.2 Termination for Cause. If the Company terminates the Executive's
employment for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor
involving moral turpitude; or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of
any law or significant Company policy committed in connection with the
Executive's employment and resulting in an adverse effect on the
Company.
5.3 Competition After Termination of Employment. No benefits shall be
payable if the Executive, without the prior written consent of the Company,
engages in, becomes interested in,
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directly or indirectly, as a sole proprietor, as a partner in a partnership, or
as a substantial shareholder in a corporation, or becomes associated with, in
the capacity of employee, director, officer, principal, agent, trustee or in any
other capacity whatsoever, any enterprise conducted in the trading area (a 50
mile radius) of the business of the Company, which enterprise is, or may deemed
to be, competitive with any business carried on by the Company as of the date of
the Executive's retirement or Termination of Employment. This section shall not
apply following a Change of Control.
5.4 Suicide or Misstatement. No benefits shall be payable if the
Executive commits suicide within two years after the date of this Agreement, or
if the Executive has made any material misstatement of fact on any application
for life insurance purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. Any person or entity who has not received
benefits under this Agreement that he or she believes should be paid
("claimant") shall make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond to
such claimant within 90 days after receiving the claim. If the Company
determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by an
additional 90 days by notifying the claimant in writing, prior to the
end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all of
the claim, the Company shall notify the claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the
Agreement on which the denial is based,
(c) A description of any additional information or
material necessary for the claimant to perfect the claim and
an explanation of why it is needed,
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(d) An explanation of the Agreement's review
procedures and the time limits applicable to such procedures,
and
(e) A statement of the claimant's right to bring a
civil action under ERISA Section 502(a) following an adverse
benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the claimant's claim for benefits.
6.2.3 Considerations on Review. In considering the review, the
Company shall take into account all materials and information the
claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond in
writing to such claimant within 60 days after receiving the request for
review. If the Company determines that special circumstances require
additional time for processing the claim, the Company can extend the
response period by an additional 60 days by notifying the claimant in
writing, prior to the end of the initial 60-day period, that an
additional period is required. The notice of extension must set forth
the special circumstances and the date by which the Company expects to
render its decision.
6.2.5 Notice of Decision. The Company shall notify the
claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the
Agreement on which the denial is based,
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(c) A statement that the claimant is entitled to
receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the claimant's claim for benefits, and
(d) A statement of the claimant's right to bring a
civil action under ERISA Section 502(a).
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, successors,
administrators and transferees.
8.2 No Guarantee of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's right to
discharge the Executive. It also does not require the Executive to remain an
employee nor interfere with the Executive's right to terminate employment at any
time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Reorganization. The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
8.5 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.6 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of Pennsylvania, except to the extent
preempted by the laws of the United States of America.
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8.7 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
8.8 Recovery of Estate Taxes. If the Executive's gross estate for
federal estate tax purposes includes any amount determined by reference to and
on account of this Agreement, and if the beneficiary is other than the
Executive's estate, then the Executive's estate shall be entitled to recover
from the beneficiary receiving such benefit under the terms of the Agreement, an
amount by which the total estate tax due by the Executive's estate, exceeds the
total estate tax which would have been payable if the value of such benefit had
not been included in the Executive's gross estate. If there is more than one
person receiving such benefit, the right of recovery shall be against each such
person. In the event the beneficiary has a liability hereunder, the beneficiary
may petition the Company for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.
8.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
8.10 Administration. The Company shall have powers which are necessary
to administer this Agreement, including but not limited to:
8.10.1 Interpreting the provisions of the Agreement;
8.10.2 Establishing and revising the method of accounting for
the Agreement;
8.10.3 Maintaining a record of benefit payments; and
8.10.4 Establishing rules and prescribing any forms necessary
or desirable to administer the Agreement.
8.11 Designated Fiduciary. For purposes of the Employee Retirement
Income Security Act of 1974, if applicable, the Company shall be the named
fiduciary and plan administrator under the Agreement. The named fiduciary may
delegate to others certain aspects of the management and operation
responsibilities of the plan including the employment of advisors and the
delegation of ministerial duties to qualified individuals.
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IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement.
EXECUTIVE: COMPANY:
FIDELITY BANK PaSB
/s/ Xxxx Xxxxxxxx By /s/ Xxxxxxx X. Xxxxxxx
----------------- -------------------------
Xxxx Xxxxxxxx Title President & CEO
-------------------
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SCHEDULE A
FIDELITY BANK PaSB SALARY CONTINUATION AGREEMENT
LIVING BENEFITS
Xxxx Xxxxxxxx
Early Change of
Termination Disability Control
Vested Annual Benefit Annual Benefit Annual Benefit
Plan Vesting Accrued Payable Payable Payable
Year Schedule Benefit Immediately(1) Immediately Immediately
---- -------- ------- -------------- ----------- -----------
1 0.00% $0 $0 $2,614 $2,614
2 0.00% $0 $0 $8,145 $8,145
3 0.00% $0 $0 $14,106 $14,106
4 0.00% $0 $0 $20,529 $20,529
5 0.00% $0 $0 $27,451 $27,451
6 0.00% $0 $0 $34,911 $34,911
7 0.00% $0 $0 $42,949 $42,949
8 0.00% $0 $0 $51,611 $51,611
9 0.00% $0 $0 $60,946 $60,946
10 0.00% $0 $0 $71,006 $71,006
11 0.00% $0 $0 $81,847 $81,847
12 0.00% $0 $0 $93,529 $93,529
13 0.00% $0 $0 $106,118 $106,118
14 0.00% $0 $0 $119,684 $119,684
15 0.00% $0 $0 $134,304 $134,304
16 0.00% $0 $0 $150,058 $150,058
17 0.00% $0 $0 $167,036 $167,036
18 0.00% $0 $0 $185,332 $185,332
19 0.00% $0 $0 $205,048 $205,048
20 100.00% $226,294 $25,017 $226,294 $226,294
21 100.00% $249,190 $27,548 $249,190 $249,190
22 100.00% $273,864 $30,276 $273,864 $273,864
23 100.00% $300,453 $33,215 $300,453 $300,453
24 100.00% $329,106 $36,383 $329,106 $329,106
25 100.00% $359,983 $39,796 $359,983 $359,983
26 100.00% $393,258 $43,475 $393,258 $393,258
27 100.00% $429,116 $47,439 $429,116 $429,116
28 100.00% $467,758 $51,711 $467,758 $467,758
29 100.00% $509,399 $56,314 $509,399 $509,399
30 100.00% $542,738 $60,000 $542,738 $542,738
_________________
(1) Payments commence at termination of employment and are payable to the
officer or her beneficiary in equal monthly installments for 15 years.
