EXHIBIT 10.16
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PENNFED FINANCIAL SERVICES, INC.
DIRECTOR'S RETIREMENT PLAN
EFFECTIVE MARCH 1, 2003
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005
Purpose
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The purpose of the Plan is to provide retirement benefits to those
Directors that are selected to be Participants herein in recognition of the
valuable services heretofore performed and/or hereinafter performed by such
Directors on behalf of the Company or the Bank. The Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA.
The Plan has been amended and restated effective January 1, 2005,
except where otherwise provided herein or required by applicable law. The Plan
is intended to comply with Section 409A of the Internal Revenue Code of 1986, as
amended, and the regulations and guidance of general applicability issued
thereunder, and shall be administered and operated accordingly.
The rights of any person who terminates service on or before any
amendment to this Plan shall be determined solely under the terms of the Plan in
effect as of the date of his termination of employment, unless such person again
becomes a Participant hereunder, or unless otherwise required by Section 409A of
the Code or other applicable law.
ARTICLE I
Definitions
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For purposes of the Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
"Affiliates" shall mean any entity that, directly or indirectly,
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through one or more intermediaries, controls, is controlled by, or is
under common control with the Company.
"Bank" shall mean Penn Federal Savings Bank.
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"Board" shall mean the board of directors of the Company.
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"Change in Control" shall mean a "change in the ownership of the
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Company", a "change in the effective control of the Company", or a
"change in the ownership of a substantial portion of the Company's
assets", all within the meaning of Section 409A.
"Claimant" shall have the meaning set forth in Section 13.1.
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"Code" shall mean the Internal Revenue Code 1986, as it may be amended
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from time to time.
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"Committee" shall mean the committee described in Article 10.
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"Company" shall mean PennFed Financial Services, Inc.
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"Director" shall mean a properly appointed director or advisory
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director of the Company or the Bank.
"Equivalent Actuarial Value" shall mean a benefit of equivalent value
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to another form of benefit, computed on the basis of an interest rate
factor of 7 percent per annum. Notwithstanding the foregoing, the
Equivalent Actuarial Value of any payment made on account of a Change
in Control shall be determined by using the discount rate under
Treasury Regulation Section 1.280G-1, Q&A 32, or the successor
regulation thereto on the date of the payment (i.e., as of the
effective date of the Plan, 120 percent of the applicable Federal rate
as determined under Section 1274(d) and the regulations thereunder,
compounded semiannually).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
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as it may be amended from time to time.
"Monthly Benefit" shall mean one twelfth (1/12) of the Participant's
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Retirement Benefit.
"Normal Retirement Date" shall mean, unless provided otherwise in the
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Participant's Plan Agreement, the later of (i) the date of the
Participant's Retirement or (ii) the Participant's attainment of age
sixty-five (65).
"Participant" shall mean any Director (i) who is selected to
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participate in the Plan, (ii) who signs a Plan Agreement, and (iii)
whose signed Plan Agreement is accepted by the Committee; provided
however, no Director who is a full time employee of the Company or the
Bank shall be permitted to become, or to continue as, a Participant in
the Plan. A spouse or former spouse of a Participant shall not be
treated as a Participant in the Plan or have a Retirement Benefit under
the Plan, even if he or she has an interest in the Participant's
benefits under the Plan as a result of applicable law or property
settlements resulting from legal separation or divorce.
"Payout Period" shall mean 120 Months, subject to Section 3.2.
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"Plan" shall mean this Director's Retirement Plan, which shall be
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evidenced by this instrument and by each Plan Agreement, as they may be
amended from time to time.
"Plan Agreement" shall mean a written agreement, as may be amended from
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time to time, which is entered into by and between the Company and a
Participant. Should there be more than one Plan Agreement, the Plan
Agreement bearing the latest date of acceptance by the Company shall
supersede all previous Plan
Agreements in their entirety and shall govern such entitlement. The
terms of any Plan Agreement may be different for any Participant, and
any Plan Agreement may limit the benefits otherwise provided under the
Plan.
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"Retirement" shall mean the Participant's complete cessation of
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services as a Director in any capacity, for any reason other than a
Termination for Cause. A Participant shall not be treated as not having
experienced a Retirement unless his cessation of service constitutes a
"separation from service" under Section 409A.
"Retirement Benefit" shall mean an annual benefit equal to 70 percent
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of the Participant's annual director fees payable by the Company and
the Bank to the Participant as of the date of the Participant's
Retirement.
"Section 409A" means Section 409A of the Code and the regulations and
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guidance of general applicability issued thereunder.
"Termination for Cause" or "Terminated for Cause" shall mean the
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involuntary termination of service of a Participant on account of
dishonesty, incompetence, willful misconduct, breach of a fiduciary
duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (excluding
violations which do not have a material adverse affect on the Company)
or final cease-and-desist order. No act or failure to act by the
Participant shall be considered willful unless the Participant acted or
failed to act with an absence of good faith and without a reasonable
belief that his action or failure to act was in the best interest of
the Company. The Participant shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered
to the Participant a copy of a resolution, duly adopted by the
affirmative vote of not less than a majority of the entire membership
of the Board of Directors at a meeting of the Board duly called and
held for such purpose (after reasonable notice to the Participant and
an opportunity for the Participant, together with the Participant's
counsel, to be heard before the Board), stating that in the good faith
opinion of the Board of Directors the Participant has engaged in
conduct described in the preceding sentence and specifying the
particulars thereof in detail.
"Trust" shall mean any trust established between the Company and the
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trustee named therein to provide benefits hereunder, as amended from
time to time.
"Vested" shall mean the non-forfeitable portion of the Retirement
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Benefit to which the Participant is entitled in the event of his
Retirement.
"Vesting Percentage" shall mean the percentage of the Retirement
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Benefit in which the Participant has Vested. Such Vesting Percentage
shall be determined in accordance with the vesting schedule, if any,
contained in the Participant's Plan Agreement. Vesting shall continue
until the Participant experiences a Retirement or a Termination for
Cause. Notwithstanding any other provision herein or any vesting
schedule set forth in a Plan Agreement, the Retirement Benefit of each
Participant serving as a Director immediately prior to a Change in
Control shall be 100% Vested upon a Change in Control.
ARTICLE 2
Selection, Enrollment, Eligibility
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2.1 Selection by Committee. Participation in the Plan shall be limited to
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Directors selected by the Committee in its sole discretion from time to
time.
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2.2 Enrollment Requirements. As a condition to participation, each Director
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shall complete, execute and return to the Committee a Plan Agreement.
In addition, the Committee shall establish from time to time such other
enrollment requirements as it determines in its sole discretion are
necessary or appropriate.
2.3 Eligibility; Commencement of Participation. Provided a Director
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selected to participate in the Plan has met all enrollment requirements
set forth in the Plan and required by the Committee, including
returning all required documents to the Committee, that Director shall
commence participation in the Plan on the date his Plan Agreement is
executed by the Company.
ARTICLE 3
Benefits
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3.1 Retirement Benefit. Subject to the provisions of Article 7, a
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Participant shall be entitled to his Vested Monthly Benefit upon his
Normal Retirement Date, payable over the Payout Period. The Payout
Period shall commence on the first day of the month next following the
Participant's Normal Retirement Date.
3.2 No Death Benefit. If the Participant dies while still providing
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services as a Director, no death benefit shall be paid from this Plan.
If the Participant dies after he has commenced receiving benefits under
Section 3.1, then Retirement Benefit payments to the Participant shall
cease with the payment made on the first day of the month in which the
Participant's death occurs.
3.3 Retirement Prior to Normal Retirement Date. If the Participant's
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Retirement occurs before reaching his Normal Retirement Date, the
Participant shall be entitled to his Vested Monthly Benefit, commencing
when he reaches his Normal Retirement Date.
3.4 Limitation on Benefits. The Retirement Benefit to be provided to a
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Participant is subject to forfeiture and certain other limitations
under the provisions of Article 8 of the Plan.
3.5 Tax Withholding from Distributions. The Company, an Affiliate, or the
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trustee of the Trust, if any, shall withhold from any payments made to
a Participant all federal, state and local income, employment and other
taxes required to be withheld by the Company, an Affiliate, or the
trustee of the Trust, in connection with such payments, in amounts and
in a manner to be determined in the sole discretion of the Company and
the trustee of the Trust.
ARTICLE 4
In-Service Withdrawals and Distributions
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No in-service withdrawals or distributions are permitted under the
Plan.
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ARTICLE 5
Vesting
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The Participant shall become Vested in his Retirement Benefit in
accordance with the vesting schedule in his Plan Agreement. If no such vesting
schedule is provided in the Participant's Plan Agreement, the Participant shall
be fully Vested in his Retirement Benefit, subject to the forfeiture provisions
and other limitations set forth in Article 7.
ARTICLE 6
Participant Contributions
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Participant contributions are neither permitted nor required under the
Plan.
ARTICLE 7
Funding
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7.1 Funding Generally. The Company's and its Affiliate's obligations under
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the Plan shall be an unfunded and unsecured promise to pay. The Company
and its Affiliates shall not be obligated under any circumstances to
fund in advance its obligations under the Plan, and when the benefit
amount is paid it shall be expensed out of the general assets of the
Company and its Affiliates. The Company may not fund the Plan in a
manner that would violate Section 409A.
7.2 Option to Fund Informally. Notwithstanding Section 7.1, the Company and
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its Affiliates may, at its sole option, or by agreement, informally
fund its obligations under the Plan in whole or in part, provided,
however, that in no event shall such informal funding be construed to
create any trust fund, escrow account or other security for any
Participant with respect to the payment of any benefit under the Plan,
other than as permitted by Internal Revenue Service and Department of
Labor rules and regulations for unfunded supplemental retirement plans.
ARTICLE 8
Forfeiture of Benefits
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8.1 Termination for Cause. If a Participant's service as a Director is
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Terminated for Cause, no benefits shall be paid to him under the Plan.
If the Participant has commenced receiving his Retirement Benefit and
it is subsequently determined that he was Terminated for Cause, then
his Retirement Benefit shall immediately cease and the Participant
shall be obligated to return to the Company or the Bank, whichever is
applicable, the cumulative amount of the Retirement Benefit previously
paid under the Plan.
8.2 Regulatory Provisions. The obligations of the Company to a Participant
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under the Plan are subject to the following restrictions:
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(a) Temporary Suspension or Prohibition. If a Participant is
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suspended and/or temporarily prohibited from participating in
the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act
("FDIA"), 12 U.S.C. ss.1818(e)(3) and (g)(1), the Company's
obligations to such Participant under the Plan shall be
suspended as of the date of service of such notice, unless
stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Company may in its discretion
reinstate in whole or in part any of its obligations which
were suspended.
(b) Permanent Suspension or Prohibition. If a Participant is
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removed and/or permanently prohibited from participating in
the conduct of the Bank `s affairs by an order issued under
Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. ss.1818(e)(4)
and (g)(1), all obligations of the Bank to such Participant
under the Plan shall terminate as of the effective date of the
order, but vested rights of the contracting parties shall not
be affected.
(c) Default. If the Bank is in default (as defined in Section
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3(x)(1) of the FDIA), all obligations of the Bank to
Participants under the Plan shall terminate as of the date of
default, but this provision shall not affect any vested rights
of the contracting parties.
(d) Termination by Regulators. All obligations of the Company to
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Participants under the Plan shall be terminated, except to the
extent determined that continuation of the Plan is necessary
for the continued operation of the Bank: (i) by the Director
of the Office of Thrift Supervision (the "OTS Director") or
his designee, at the time the Federal Deposit Insurance
Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in
Section 13(c) of the FDIA; or (ii) by the OTS Director or his
designee, at the time the OTS Director or his designee
approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the
OTS Director to be in an unsafe or unsound condition. Any
rights of the parties that have already vested, however, shall
not be affected by any such action.
(e) Other Regulatory Restrictions on Payment. Notwithstanding
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anything herein to the contrary, (1) any payments made by the
Company under the Plan shall be subject to and conditioned
upon compliance with 12 U.S.C. ss.1828(k) and any regulations
promulgated thereunder and (2) payments contemplated to be
made by the Company under the Plan shall not be immediately
payable to the extent such payments are barred or prohibited
by an action or order issued by the Federal Deposit Insurance
Corporation.
(f) Time of Repayment. Any benefit payment suspended or delayed in
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accordance with this Section 8.2 shall be paid as soon as
practicable after the earliest date on which the Company
reasonably determines that such payment should be made.
ARTICLE 9
Termination, Change in Control, Amendment or Modification
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9.1 Termination. Although the Company anticipates that it will continue as
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a sponsor of the Plan
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for an indefinite period of time, there is no guarantee that it will
continue as a sponsor of the Plan or will not terminate its sponsorship
of the Plan at any time in the future. Accordingly, the Company
reserves the right to terminate its sponsorship of the Plan at any time
with respect to any or all of its Participants, by action of the Board.
Upon termination of sponsorship of the Plan by the Company, the
Retirement Benefit of each affected Participant shall be determined as
if he had experienced a Retirement on the date Plan sponsorship is
terminated. The Equivalent Actuarial Value of the Participant's Monthly
Benefits (as determined under this Section 9.1) shall be paid to
affected Participants in a lump sum. The termination of sponsorship of
the Plan or the termination of the Plan shall not adversely affect any
Participant who has become entitled to the payment of any benefits
under the Plan as of the date of termination. Notwithstanding the
foregoing, the timing and manner of distributing benefits in connection
with the Plan termination must comply with Section 409A. Accordingly,
unless Section 409A permits otherwise, the Plan may be terminated only
if: (a) all arrangements sponsored by the Company and its Affiliates
that are required to be aggregated with this Plan under Section 409A
are terminated; (b) no payments other than payments that would be
payable under the terms of the Plan or an aggregated plan if the
termination had not occurred are made within 12 months of the
termination of the arrangements; (c) all payments are made within 24
months of the termination of the Plan and related arrangements; and (d)
the Company and its Affiliates do not adopt a new arrangement that
would be required to be aggregated with this Plan under Section 409A if
the same Participant participated in both arrangements, within five
years of the termination of the Plan. The Plan will automatically
terminate upon the completion of all distributions to Participants in
accordance with the terms hereof.
9.2 Change in Control. Upon a Change in Control, the Retirement Benefit of
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each affected Participant shall be determined as if he had experienced
a Retirement on the effective date of the Change in Control. The
Equivalent Actuarial Value of each Participant's Monthly Benefit (as
determined under this Section 9.2) shall be paid to the Participant in
a cash lump sum within 10 days of the effective time of the Change in
Control, unless the terms of the Change in Control provide otherwise
and are consistent with Section 409A and do not give rise to any
additional parachute payments under Code Section 280G.
9.2 Amendment. The Company may, at any time, amend or modify the Plan in
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whole or in part by action of the Board; provided, however, that no
amendment or modification shall be effective to decrease or restrict
the value of a Participant's Vested Benefit determined at the time the
amendment or modification is made, calculated as if the Participant had
experienced a Retirement as of the effective date of the amendment or
modification. The amendment or modification of the Plan shall not
affect any Participant who has become entitled to the payment of
benefits under the Plan as of the date of the amendment or
modification. No amendment shall be permitted that causes the Plan to
violate the requirements of Section 409A.
9.3 Effect of Payment. The full payment of the applicable benefit under the
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Plan shall completely discharge all obligations to a Participant under
the Plan.
ARTICLE 10
Administration
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10.1 Committee Duties. The Plan shall be administered by a Committee which
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shall consist of the Board, or such committee as the Board shall
appoint. Members of the Committee may be Participants under the Plan.
The Committee shall also have the discretion and authority to (i) make,
amend, interpret, and enforce all appropriate rules and regulations for
the administration of the Plan and (ii) decide or resolve any and all
questions including interpretations of the Plan, as may arise in
connection with the Plan. Any individual on the Committee who is a
Participant shall not vote or act on any matter relating solely to
himself. When making a determination or calculation, the Committee
shall be entitled to rely on information furnished by a Participant or
the Company.
10.2 Agents. In the administration of the Plan, the Committee may, from time
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to time, employ agents and delegate to them such administrative duties
as it sees fit (including acting through a duly appointed
representative) and may from time to time consult with counsel who may
be counsel to the Company and its Affiliates.
10.3 Binding Effect of Decisions. The decision or action of the Committee
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with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
10.4 Indemnity of Committee. The Company shall indemnify and hold harmless
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the members of the Committee, and any person to whom the duties of the
Committee may be delegated, against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to
act with respect to the Plan, except in the case of gross misconduct by
the Committee or any of its members or any such delegate.
10.5 Information. To enable the Committee to perform its functions, the
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Company and its Affiliates shall supply full and timely information to
the Committee as the Committee may reasonably request.
ARTICLE 11
Other Benefits and Agreements
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The benefits provided for a Participant under the Plan are in addition
to any other benefits available to such Participant under any other plan or
program sponsored by the Company or its Affiliates. The Plan shall supplement
and shall not supersede, modify or amend any other such plan or program except
as may otherwise be expressly provided therein.
ARTICLE 12
Claims Procedures
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12.1 Presentation of Claim. Any Participant (such Participant being referred
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to below as a "Claimant") may deliver to the Committee a written claim
for a determination with respect to the amounts distributable to such
Claimant from the Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 60 days
after such notice was received by the Claimant. All other claims must
be made within 180 days of the date on
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which the event that caused the claim to arise occurred. The claim must
state with particularity the determination desired by the Claimant.
12.2 Notification of Decision. The Committee shall consider a Claimant's
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claim within a reasonable time, and shall notify the Claimant in
writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant's requested determination, and
such notice must set forth in a manner calculated to be
understood by the Claimant:
(i) the specific reason(s) for the denial of the claim,
or any part of it;
(ii) specific reference(s) to pertinent provisions of the
Plan upon which such denial was based;
(iii) a description of any additional material or
information necessary for the Claimant to perfect the
claim, and an explanation of why such material or
information is necessary; and
(iv) an explanation of the claim review procedure set
forth in Section 13.3 below.
12.3 Review of a Denied Claim. With 60 days after receiving a notice from
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the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
12.4 Decision on Review. The Committee shall render its decision on review
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promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood
by the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
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(c) such other matters as the Committee deems relevant.
12.5 Legal Action. A Claimant's compliance with the foregoing provisions of
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this Article 12 is a mandatory prerequisite to a Claimant's right to
commence any legal action with respect to any claim for benefits under
the Plan.
ARTICLE 13
Trust
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13.1 Establishment of the Trust. The Company may establish the Trust upon
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such terms as it deems appropriate.
13.2 Interrelationship of the Plan and the Trust. The provisions of the
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Plan, including a Participant's Plan Agreement, shall govern the rights
of such Participant to receive distributions pursuant to the Plan. The
provisions of the Trust shall govern the rights of the Company, its
Affiliates, Participants and the creditors of the Company and its
Affiliates to the assets transferred to the Trust. The Company and its
Affiliates shall at all times remain liable to carry out its
obligations under the Plan.
13.3 Investment of Trust Assets. The trustee of the Trust shall be
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authorized, upon written instructions received from the Committee or
investment manager appointed by the Committee, to invest and reinvest
the assets of the Trust in accordance with the applicable trust
agreement.
13.4 Distributions From the Trust. The Company and its Affiliates'
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obligations under the Plan may be satisfied with Trust assets
distributed pursuant to the terms of the Trust and any such
distribution shall reduce the Company's and its Affiliates' obligations
under the Plan.
ARTICLE 14
Miscellaneous
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14.1 Status of Plan. The Plan is intended to be a plan that is not qualified
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within the meaning of Code Section 401(a). The Plan shall be
administered and interpreted to the extent possible in a manner
consistent with that intent. The Plan also is a deferred compensation
plan within the meaning of Section 409A, and as such shall be operated,
interpreted and administered in accordance therewith.
14.2 Unsecured General Creditor. Participants and their beneficiaries,
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heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of the Company or its
Affiliates. For purposes of the payment of benefits under the Plan, any
and all assets of the Company or its Affiliates shall be, and remain
the general, unpledged and unrestricted assets of such entity. The
Company's and its Affiliates' obligation under the Plan shall be merely
of an unfunded and unsecured promise to pay money in the future.
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14.3 Liability. The Company's or its Affiliates' liability for the payment
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of benefits shall be defined only by the Plan including a Participant's
Plan Agreement. The Company or its Affiliates shall have no obligation
to a Participant under the Plan except as expressly provided in the
Plan including such Participant's Plan Agreement.
14.4 Nonassignability. Neither a Participant nor any other person shall have
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any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are
expressly declared to be, unassignable and non-transferable. No part of
the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance allowed by a
Participant or any other person, be transferable by operation of law in
the event of a Participant's or any other person's bankruptcy or
insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.
14.5 Not a Contract of Employment. The terms and conditions of the Plan,
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including a Participant's Plan Agreement, shall not be deemed to
constitute a contract of employment between the Company or its
Affiliates and a Participant. Nothing in the Plan shall be deemed to
give a Participant the right to be retained in the service of the
Company or its Affiliates as a director or to interfere with the right
of the Company or its Affiliates to discipline, discharge or refuse to
renominate such Participant at any time.
14.6 Furnishing Information. A Participant will cooperate with the Committee
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by furnishing any and all information requested by the Committee and
take such other actions as may be requested in order to facilitate the
administration of the Plan and the payments of benefits hereunder,
including but not limited to, taking such physical examinations as the
Committee may deem necessary.
14.7 Terms. Whenever any words are used herein in the masculine, they shall
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be construed as though they were in the feminine in all cases where
they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were
used in the plural or the singular, as the case may be, in all cases
where they would so apply.
14.8 Captions. The captions of the articles, sections and paragraphs of the
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Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
14.9 Governing Law. Subject to ERISA, the provisions of the Plan shall be
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construed and interpreted according to the internal laws of the State
of New Jersey without regard to its conflicts of laws and principles.
14.10 Notice. Any notice or filing required or permitted to be given to the
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Committee under the Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below.
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Board of Directors
PennFed Financial Services, Inc.
622 Eagle Rock Avenue
West Orange, New Jersey 07052-2989
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification. Any notice or filing
required or permitted to be given to a Participant under the Plan shall
be sufficient if in writing and hand-delivered, or sent by mail, to the
last known address of such Participant.
14.11 Successors. The provisions of the Plan shall bind and inure to the
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benefit of the Company or its Affiliates, and their successors and
assigns and the Participant and the Participant's designated
Beneficiaries.
14.12 Spouse's Interest. The interest in the benefits hereunder of a spouse
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of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by
such spouse in any manner including, but not limited to, such spouse's
will, nor shall such interest pass under the laws of intestate
succession.
14.13 Validity. In case any provision of the Plan shall be illegal or invalid
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for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but the Plan shall be constructed and enforced
as if such illegal or invalid provision had never been inserted herein.
14.14 Incompetent. If the Committee determines in its discretion that a
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benefit under the Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of
that person's property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care
and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account of
the Participant, and shall be a complete discharge of any liability
under the Plan for such payment amount.
14.15 Court Order. The Committee is authorized to make any payments directed
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by court order in any action in which the Plan or the Committee has
been named as a party. In addition, if a court determines that a spouse
or former spouse of a Participant has an interest in the Participant's
benefits under the Plan in connection with a property settlement or
otherwise, the Committee, in its sole discretion shall have the right,
notwithstanding any election made by the Participant, to immediately
distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
14.16 Distribution for FICA Taxes or on Account of Inclusion Pursuant to
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Section 409A.
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(a) Distributions may be made to a Participant prior to when amounts
are otherwise distributable under the Plan to the extent necessary to
pay FICA taxes under Code Sections 3101, 3121(a) and 3121(v)(2), as
well as the corresponding federal, state, local or foreign income and
withholding taxes associated with those FICA taxes. Distributions under
this Section 14.16 shall be permitted only to the extent allowed under
Section 409A.
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(b) Upon the inclusion of any portion of the benefit into the
Participant's income as a result of the failure of this Plan to comply
with the requirements of Section 409A, a lump sum distribution shall be
made as soon as is administratively practicable following the discovery
of the plan failure of an amount equal to the lesser of (1) the
Participant's then-vested benefit, or (2) the amount includible in the
Participant's income as a result of the failure of the Plan to comply
with Section 409A. In the event the amount includible in the
Participant's income under Section 409A exceeds the Participant's
then-vested benefit, the excess shall be distributed in a lump sum as
soon as administratively practicable after the Participant's vested
interest in his Plan benefits increases.
14.17 Insurance. The Company or its Affiliates, on its own behalf or on
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behalf of the trustee of the Trust, and, in its sole discretion, may
apply for and procure insurance on the life of any Participant, in such
amounts and in such forms as it may choose. The Company or its
Affiliates or the trustee of the Trust, as the case may be, shall be
the sole owner and beneficiary of any such insurance. No Participant
shall have any interest whatsoever in any such policy or policies, and
a Participant shall at the request of the Company submit to medical
examinations and supply such information and execute such documents as
may be required by the insurance company or companies to whom the
Company or its Affiliates has applied for insurance.
14.18 Legal Fees To Enforce Rights After Change in Control. The Company is
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aware that upon the occurrence of a Change in Control, the Board (which
might then be comprised of new members) or stockholders of the Company,
its Affiliates, or of any successor corporation, might then cause or
attempt to cause the Company, its Affiliates, or such successor to
refuse to comply with its obligations under the Plan and might cause or
attempt to cause the Company or its Affiliates to institute, or may
institute, litigation seeking to deny Participants the benefits
intended under the Plan. In these circumstances, the purpose of the
Plan could be frustrated. Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company, its
Affiliates, or any successor corporation has failed to comply with any
of its obligations under the Plan or any agreement thereunder, or, if
the Company, its Affiliates, or any other person takes any action to
declare the Plan void or unenforceable or institutes any litigation or
other legal action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the Company and
its Affiliates irrevocably authorizes such Participant to retain
counsel of his choice at the expense of the Company or its Affiliates
to represent such Participant in connection with the initiation or
defense of any litigation or other legal action, whether by or against
the Company, its Affiliates, or any director, officer, stockholder or
other Affiliate of the Company or any successor thereto in any
jurisdiction.
The Company has signed the Plan as of _______________, 2006.
PENNFED FINANCIAL SERVICES, INC.
By:
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Name:
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Title:
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