Exhibit 10.11
THE PROVIDENT BANK
2005 BOARD OF DIRECTORS
VOLUNTARY FEE DEFERRAL PLAN
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The purpose of The Provident Bank 2005 Board of Directors Voluntary Fee
Deferral Plan ("Plan") is to to enable any non-employee member of the Board of
Directors ("eligible member") to defer future fees payable to them for their
service as a member of the The Provident Bank's Board of Directors ("Board").
Any reference herein to the "Bank" shall refer to The Provident Bank. Any
reference herein to the "Company" shall refer to Provident Financial Services,
Inc., the Delaware chartered stock holding company which holds all of the
outstanding common stock of the Bank.
This Plan is intended to comply with Internal Revenue Code ("Code") Section
409A and any regulatory or other guidance issued under such Section. At the
effective date of the Plan additional guidance was being promulgated by the
Department of Treasury. Any terms of this Plan that conflict with such future
guidance shall be null and void as of the effective date of the Plan. After such
guidance is issued, the intent is to amend the Plan to delete any conflicting
provisions and to add such other provisions as are required to fully comply with
Section 409A and any other legislative or regulatory requirement applicable to
the Plan. This Plan shall be effective as of January 1, 2005.
1. Elections. Any eligible member may participate in this Plan by executing
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a form of deferral election, a copy of which is annexed hereto as Exhibit "A",
under which each calendar year the eligible member can elect irrevocably to
defer the receipt of 100%, 75%, 50%, or 25% of any fees that may be paid to the
member. In no event shall any deferral of fees be permitted which the eligible
member would otherwise have the unrestricted right to receive currently. Except
for the first year of the Plan, any election by an eligible member to defer
future fees shall be made in the calendar year next preceding the calendar year
the fees would be earned. In the first year that a member of the Board becomes
eligible to participate, the eligible member's election must be made within 30
days of first becoming eligible and the election must be made only with respect
to fees for services performed after the date of the election. Notwithstanding
the preceding sentence, if an eligible member was an eligible member under The
Provident Bank Board of Directors Voluntary Fee Deferral Plan, then such
eligible member must make his or her initial election to defer future fees by
the end of the calendar year next preceding the calendar year in which the Plan
becomes effective. Subject to the provisions of the Plan, an eligible member's
election shall specify in the deferral election form when and in what manner
distribution shall be made of any deferred fees. If the eligible member fails to
choose a year of distribution, it shall be deemed to be the year of his normal
retirement. If the eligible member fails to specify a form of payment, he shall
be deemed to have elected a lump-sum distribution.
2. Period of Deferral. An eligible member may defer his fees to a future
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year as selected by him. However, in no event shall any fee otherwise payable be
deferred so that the distribution begins beyond the year of the eligible
member's normal retirement from the Board of Directors. The term "normal
retirement" means the date of the Board of Directors Annual Meeting after the
member attains his seventy-second (72) birthday.
3. Investment and Adjustment of Deferred Fees. Subject to Paragraph 6, any
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fees deferred pursuant to an eligible member's election as aforesaid shall be
credited to a separate account maintained in the name of such member. Such
Account shall be referred to as the member's Investment Account. The value of
each member's Investment Account shall be credited monthly with interest at the
then prevailing Wall Street Prime Rate. For purposes of making any distribution
under paragraph 4 below, the value of an eligible member's Investment Account
shall be its value, adjusted with interest as aforesaid, as of the last day of
the month next preceding the month distribution occurs.
4. Payment of Deferred Fees. Except as otherwise provided in this
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paragraph, or in the case of a "Change in Control" described in paragraph 5, the
amount of an eligible member's separate account (adjusted as provided in
paragraph 3) shall be distributed to the eligible member in a lump-sum or in
annual installments after such number of years or after retiring from the Board
of Directors as he may elect in accordance with paragraph 2, or, in the event of
his death or Disability (as defined in Section 11 hereof), in a lump-sum to the
member or to the person or persons designated by the eligible member to receive
such distribution. An eligible member who wishes to receive a distribution of
his separate account in installments may elect to receive it in annual
installments over a period of three (3) years. If distribution is to be made in
annual installments, the amount of each installment shall be equal to the sum of
the adjusted value of the eligible member's Investment Account determined in
accordance with paragraph 3 above multiplied by a fraction, the numerator of
which is one and the denominator of which is the number of installment payments
remaining to be made. If an eligible member Separates from Service (within the
meaning of Code Section 409A) but he has not attained age 65, the undistributed
balance of his account shall be paid to him in a single lump sum within a
reasonable time following Separation from Service. If an eligible member
Separates from Service on or after age 65, he shall receive the balance of his
separate account(s) at such time and in such form as he has elected.
5. Distribution in the Event of a Change in Control. Notwithstanding any
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other provision of this Plan or of any election made by an eligible member with
respect to the period of any fee deferral or the form and timing of any
distributions from his separate account, the undistributed balance thereof shall
be distributed to him within 60 days after the date of a Change in Control of
the Company or the Bank. For purposes hereof, a "Change in Control" shall mean,
a change in the ownership or effective control of the Company, or in the
ownership of a substantial portion of the assets of the Company, as defined in
the regulations issued by the Treasury Department and/or other guidance issued
by the Treasury Department or Internal Revenue Service under Code Section 409A.
6. Rights of Eligible Member or Other Distributee. Nothing contained
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herein, and no action taken pursuant to the provisions hereof shall create, or
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be deemed to create a trust of any kind, or to establish any fiduciary
relationship between the Bank and any eligible member or other distributee. The
separate accounts established hereunder shall be for record keeping purposes.
Fees which have been deferred will be recorded as a liability on the Bank's
general ledger when earned, but no funds shall be set aside for payment of the
liability. To the extent that any person acquires a right to receive payments
from the Bank under the provisions hereof, such right shall be no greater than
the right of an unsecured general creditor of the Bank. All payments made
pursuant to this Plan shall be made from the general assets of the Bank,
provided, however, that nothing set forth herein shall be construed as
prohibiting the Bank from establishing a rabbi trust to hold any assets for the
benefit of eligible members of this Plan. Deferred fees and the earnings thereon
shall be subject to the claims of the Bank's general creditors at all times
prior to distribution, including any fees that are contributed to and become
assets of a rabbi trust.
7. Designation of Beneficiary. An eligible member may designate one or more
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person or persons to receive the undistributed balance of his deferred fees in
the event of his death by executing and delivering to the Bank a beneficiary
designation form, a copy of which is annexed hereto as Exhibit "B", and may
change and successively change any such designation by executing a subsequent
beneficiary designation form. Unless the beneficiary designation form indicates
otherwise, any designation of beneficiary shall be deemed to apply to the
undistributed balance of all of the eligible member's prior deferrals. If there
is no valid beneficiary designation on file with the Bank on the date of death
of the eligible member, the undistributed balance of deferred fees shall be paid
to the personal representative of his estate.
8. Nonassignability of Benefits. Neither the eligible member nor any other
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person shall have any power or right to assign, anticipate, hypothecate or
otherwise encumber any deferred fees payable by the Bank hereunder, nor shall
any such fees be transferable by operation of law in the event of the bankruptcy
or insolvency of the eligible member or other person.
9. Administration of the Plan. The Board of Directors shall have the
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exclusive authority to manage and control the operation and administration of
the Plan and shall be the named fiduciary as described in section 402(a) of the
Employee Retirement Income Security Act of 1974. The Board of Directors shall
make all determinations regarding the right of any person to receive a benefit
under the Plan and to determine the amount and time of distribution thereof in
accordance with the provisions of this Plan and the eligible member's election,
provided, however, that any determination made with respect to the account(s) of
any eligible member shall be made by the Board of Directors sitting without such
member. The interpretation and construction of this Plan by the Board of
Directors, and any action taken hereunder, shall be binding and conclusive upon
the eligible member and any other person claiming any rights hereunder. The
Board of Directors may from time to time delegate to such person or persons or
to such committee as it shall designate any one or more of its administrative
duties under the Plan.
10. Right to Amend and Terminate the Plan. The Bank reserves the right to
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amend the Plan in whole or in part and to terminate the Plan at any time,
provided that no such action shall affect the rights of any eligible member or
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other person to receive payment of benefits in accordance with the terms of the
Plan as in effect on the day immediately preceding the effective date of such
amendment or termination.
11. Special Terms, Gender and Number. Whenever used herein, the term "Board
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of Directors" shall mean the Board of Directors of The Provident Bank. The term
"normal retirement" means the date of the Board of Directors Annual Meeting
after the member attains his seventy-second birthday. The term "Disability"
shall mean the Participant 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, 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 3
months under an accident and health plan covering employees of the Participant's
employer. Whenever the context shall require, the masculine gender shall be
construed to include the feminine and the singular number the plural.
12. Incompetence. If the Board of Directors determines that an eligible
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member (or the designated beneficiary of an eligibile member) is unable to
manage his affairs, it may, in its sole discretion and subject to the
requirements of Code Section 409A, pay any amount due to such person to the
individual or institution then providing for the care, maintenance and support
of such person, unless prior to such payment claim shall be made therefore by a
duly appointed guardian, committee or other legal representative designated to
receive such payment on behalf of such person.
13. Hardship Distribution. An eligible member, who believes that he has
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incurred an Unforeseeable Emergency may petition the Board of Directors for a
Hardship Distribution. "Unforeseeable Emergency" means a severe financial
hardship to the eligible member resulting from an illness or accident of the
eligible member, the eligible member's spouse, or a dependent (as defined in
Internal Revenue Code Section 152(a)) of the eligible member, loss of the
eligible member's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the eligible member.
Upon a finding that an eligible member has suffered an Unforeseeable
Emergency, the Board may, in its sole discretion, make distributions from the
eligible member's Investment Account. An eligible member requesting a
distribution as a result of an Unforeseeable Emergency shall apply in writing to
the Board and shall provide such additional information as the Board may
require. The amount of the withdrawal shall be limited to the amount necessary
to satisfy such emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the eligible
member's assets (to the extent the liquidation of such assets would not itself
cause severe financial hardship). If a distribution is made due to an
Unforeseeable Emergency in accordance with this paragraph 13, the eligible
member's deferrals under this Plan shall cease for the remainder of the calendar
year in which the distribution occurs and the immediately
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following calendar year. Any resumption of the eligible member's deferrals under
this Plan shall be made only at the election of the eligible member in
accordance with paragraph 1 herein.
14. Applicable Law. This Plan shall be governed and construed in accordance
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with the laws of the State of New Jersey to the extent not inconsistent with
applicable federal law.
15. Successors. The provisions of this Plan shall bind and inure to the
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benefit of the Bank and its successors and assigns. The term "successors" as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Bank, and successors of any
such corporation or other business entity.
IN WITNESS WHEREOF, this 2005 Directors Voluntary Fee Deferral Plan has
been executed by the duly authorized officers of The Provident Bank as of the 23
day of December, 2004.
ATTEST: THE PROVIDENT BANK
/s/ Mary Louise Festa By: /s/ Paul M. Pantozzi
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Corporate Secretary Authorized Officer
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