TROY HILL BANCORP, INC. AMENDED AND RESTATED RECOGNITION AND RETENTION PLAN FOR DIRECTORS AND TRUST AGREEMENT
Exhibit
10.13
XXXX
XXXX BANCORP, INC.
AMENDED
AND RESTATED RECOGNITION AND RETENTION
PLAN
FOR DIRECTORS AND TRUST AGREEMENT
ARTICLE
I
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 Directors (the “Plan”) and
Trust (the “Trust”) upon the terms and conditions hereinafter stated in this
amended and restated Recognition and Retention Plan for Directors and Trust
Agreement (the “Agreement”), with this amendment and restatement effective as of
November 20, 2007.
1.02 The
Trustee(s) hereby accept 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.
ARTICLE
II
PURPOSE
OF THE PLAN
2.01 The
purpose of the Plan is to improve the growth and profitability of the
Corporation, as successor to Xxxx Xxxx Bancorp, Inc., by providing non-employee
directors with a proprietary interest in the Corporation as compensation
for
their contributions to the Corporation and as an incentive to make such
contributions in the future.
ARTICLE
III
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 Savings 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.
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3.05 “Committee”
means the entire Board of Directors of the Corporation which administers
the
Plan 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 Offering. The amendment and restatement of
this Plan shall be effective as of November 20, 2007.
3.09 “Employee”
means any person who is employed by the Corporation 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 “Non-employee
Director” means a member of the Board who is not an Employee.
3.12 “Offering”
means the offering of Common Stock to the public pursuant to the Plan of
Conversion of Xxxx Xxxx Federal Savings and Loan Association.
3.13 “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 a Non-employee Director who receives a Plan Share Award under the
Plan.
3.16 “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.
3.17 “Subsidiary”
means any subsidiaries of the Corporation, including the Bank, which, with
the
consent of the Board, agree to participate in this Plan.
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3.18 “Trustee”
or “Trustees” means those person or persons (which may be members of the
Committee), or firm or other 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
4.01 Role
of the Committee. The Plan shall be administered
and interpreted by the Committee, which shall consist of the members of the
entire Board. 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 appoint one or more persons (which may be from among its
members), or a firm or other entity, to act as Trustee(s) in accordance with
the
provisions of this Plan and Trust and the terms of Article VIII
hereof.
4.02 Role
of the Board. The Trustee or Trustees shall be
appointed or approved by, and will serve at the pleasure of, the Committee.
The
Committee may in its discretion from time to time remove or replace the
Trustees.
4.03 Limitation
on Liability. No member of 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
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 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 exemption for the transfer of nonvested
restricted property and the short-term deferral exemption in the final
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.
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ARTICLE
V
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 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
Non-employee Directors 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, subject to adjustment as provided in Section 9.01 hereof, shall
be
equal to 1.0% 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
6.01 Eligibility. Plan
Share Awards shall be made to each Non-employee Director.
(a) Initial
Allocation. A Plan Share Award shall be allocated to each Non-employee
Director as of the hour and day on which Common Stock is initially sold in
the
Offering. Specifically, each Non-employee Director shall receive a Plan Share
Award for the number of whole shares of Common Stock determined by multiplying
the number of shares of Common Stock which may be issued pursuant to this
Plan
by 90% and dividing such product by the number of Non-employee Directors
at such
time.
(b) Subsequent
Allocation. A Plan Share Award shall be allocated to each Non-employee
Director one year from the date on which Common Stock is initially sold in
the
Offering. Specifically, each Non-employee Director shall receive a Plan Share
Award for the number of whole shares of Common Stock determined by dividing
the
remaining number of shares of Common Stock which may be issued pursuant to
this
Plan by the number of Non-employee Directors at such time. In the event of
a
forfeiture of the right to any Shares subject to an Award, pursuant to Section
7.01 hereof, such forfeited Shares shall be reallocated one month following
such
forfeiture to the remaining Non-employee Directors by dividing the number
of
forfeited shares of Common Stock by the remaining number of Non-employee
Directors at such time.
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6.02 Form
of Allocation. As promptly as practicable
after 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 Recipient. Such terms shall be reflected
in a
written agreement with the Recipient. 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.
ARTICLE
VII
EARNING
AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earning
Plan Shares; Forfeitures.
(a) General
Rules. Subject to the terms hereof, Plan
Shares covered by the Award shall be earned by the 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 service
as a
director by a Recipient is terminated prior to the fifth (5th) anniversary
of
the date of grant of an 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 service as a director of the Corporation terminates
due to
death or Disability shall be deemed earned as of the Recipient’s last day of
service with the Corporation 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.
(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 any
Non-employee Director who is removed from service as a director of the
Corporation for cause (as hereinafter defined). Removal shall be deemed to
be
for cause if the Non-employee Director 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.
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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 a 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 a 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 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 Recipients 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 them pursuant to Section 7.03,
subject to rules and procedures adopted by the Committee for this purpose.
Provided that the Recipients inform the Trustees how the Recipients 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 Recipients actually vote Plan Shares
which have been earned and distributed pursuant to Section 7.03. If the
Recipients do 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 Recipients actually tender
Plan
Shares which have been earned and distributed.
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ARTICLE
VIII
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 Trustees 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 its 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
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).
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(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
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.
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 holder of a Plan Share Award, alter or impair
any Plan Share Award previously granted under this Plan 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.
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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 Service
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 Non-employee Director to continue as such.
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 20, 2007.
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 etseq. 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 20th day of November 2007.
| ESB FINANCIAL CORPORATION | ||
|
|
By:
|
/s/ Xxxxxxxxx X. Xxxxxxxx |
| Xxxxxxxxx X. Xxxxxxxx | ||
|
|
President and Chief Executive Officer | |
| ATTEST: | |||
|
/s/
Xxxxx X. Xxxxx
|
|||
|
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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