* AS AMENDED AUGUST 1, 2005*
KEARNY FINANCIAL CORP.
DIRECTORS CONSULTATION AND RETIREMENT PLAN,
AS AMENDED AND RESTATED
WHEREAS, Kearny Federal Savings Bank ("Savings Bank") previously
implemented a Directors Consultation and Retirement Plan ("Bank Plan") to reward
the years of extensive service provided by the current members of the Board of
Directors and to continue to attract and to retain the best talent available to
serve on its Board of Directors, and
WHEREAS, the corporate structure of the Savings Bank has change since the
initial implementation of such Bank Plan to include the mutual holding company
for the Savings Bank ("Kearny MHC" or "MHC") and the mid-tier holding company
("Kearny Financial Corp." or "Company")) and the directors of the Savings Bank
also serve as directors of such other entities and receive compensation for such
services, and
WHEREAS, the Board of Directors of the Company has determined that it is
appropriate and advisable that the compensation paid by the Company and the MHC
to its directors also be considered in determining benefits under the Bank Plan,
and
WHEREAS, the Board of Directors of the Company has determined such program
may best be accomplished by having the Company sponsor such a retirement plan,
with benefits to be based upon annual retainers and meeting fees paid by the
Savings Bank, the Company and the MHC, and with the applicable costs of such a
program and benefits thereunder to be allocated to the Company, the Savings Bank
and the MHC.
NOW THEREFORE, BE IT RESOLVED that the Bank Plan, as previously approved,
amended and restated by the Savings Bank, be approved, amended and restated by
the Company as the Kearny Financial Corp. Directors Consultation and Retirement
Plan ("Plan"), as of August 1, 2005, as follows:
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall, for the purpose of
this Plan and any subsequent amendment thereof, have the following meanings
unless a different meaning is plainly required by the content:
"Bank" or "Savings Bank" means Kearny Federal Savings Bank, Kearny, New
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Jersey, or any successor thereto.
"Board" means the Board of Directors of the Company, the Savings Bank or
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the MHC, as constituted from time to time and successors thereto.
"Change in Control" means: (i) the execution of an agreement for the sale
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of all, or a material portion, of the assets of the Company or the Savings Bank;
(ii) the execution of an agreement for a merger or recapitalization of the
Company or the Savings Bank or any merger or recapitalization whereby the
Company or the Savings Bank is not the surviving entity; (iii) a change of
control of the Company or the Savings Bank, as otherwise defined or determined
by the Office of Thrift Supervision, or regulations promulgated by it; or (iv)
the acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of that term as it is used in Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder) of twenty-five percent (25%) or
more of the outstanding voting securities of the Company or the Savings Bank by
any person, trust, entity or group. This limitation shall not apply to the
purchase of shares by underwriters in connection with a public offering of the
Company or the Savings Bank stock (or a parent holding company's stock), or the
purchase of shares of up to 25% of any class of securities of the Savings Bank
by a tax-qualified employee stock benefit plan. The term "person" refers to an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein. A change in control shall not be
deemed to have occurred as a result of a reorganization of the Savings Bank into
a stock savings bank, the reorganization of the Savings Bank into the mutual
holding company structure, or the reorganization of the MHC and the Company and
simultaneous acquisition of 100% of the stock of the Savings Bank by a new
parent savings and loan holding company or bank holding company.
"Committee" means the Compensation Committee of the Board of the Company.
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"Company" means Kearny Financial Corp. and any successor entity or any
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future parent corporation of the Savings Bank.
"Director" means a member of the Board of the Company, the Savings Bank or
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the MHC.
"Disability" (total and permanent disability) means a mental or physical
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disability which prevents the Director from performing the normal duties of his
or her position with the Savings Bank, the Company or the MHC. Such disability
must have prevented the Director from performing his or her duties for at least
six months, and a physician satisfactory to both the Director and the Company
must certify that the Director is disabled from performing his or her normal
duties with the Company, the Savings Bank and the MHC.
"Effective Date" means May 1, 1995, with such amendments contained herein.
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"MHC" means Kearny MHC, the mutual holding company of the Savings Bank.
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"Participant" means a Director serving as such on or after the Effective
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Date. Such participation shall continue as long as such Participant fulfills all
requirements for participation subject to the right of termination, amendment
and modification of the Plan hereinafter set forth.
"Plan" means the Kearny Financial Corp. Directors Consultation and
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Retirement Plan herein set forth, as amended from time to time.
"Retirement Benefit Amount" is defined at Section 2.4(c).
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"Retirement Date" means the date of termination of service as a Director
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following the participant's completion of not less than 5 years of Board service
and attainment of not less than age 60 while serving as a Director. A Director
may attain the Retirement Date for Service completed at one corporate entity and
not yet meet the requirements for the Retirement Date for another corporate
entity.
"Service" means all years of Service as a member of the Board and all
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predecessor entities; provided however, service with "predecessor entities"
refers only to predecessors of the Savings Bank prior to the Effective Date. A
year of Service shall consist of twelve consecutive months of service. In
calculating the Retirement Benefit Amount for Service to the Company, the
Savings Bank and the MHC, years of Service may differ based upon actual Service
as a member of the Board of the Company, the Savings Bank and the MHC.
ARTICLE II
BENEFITS
2.1 Retirement. Upon a Participant's retirement from service as a Director
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of the Company, the Savings Bank or the MHC on or after the applicable
Retirement Date for such corporate entity, the Company shall pay to the
participant a monthly pension in an amount approved by the Board and set forth
herein at Article II, Section 2.4, on the first business day of each calendar
month commencing on or after the Retirement Date. Except as provided at Article
II, Sections 2.2 and 2.3 herein, upon a Participant's termination from service
as a Director prior to the Retirement Date, the Company shall have no financial
obligations to the Participant under the Plan.
2.2 Change in Control. All benefits payable, or that would become payable
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if a Director were to retire prior to such Change in Control, shall remain
payable thereafter. Upon termination of service following a Change in Control,
all benefits shall be deemed payable in accordance with Article II, Section 2.4;
provided that if Participant has not yet attained the Retirement Date as of such
date of termination of service, such Participant shall nevertheless be deemed to
have served until the
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Retirement Date as of the date of such termination following a Change of
Control, and in order to calculate benefits payable hereunder. Notwithstanding
anything herein to the contrary, for purposes of calculation of benefits in
accordance with this Section, in the event that a Participant shall not
otherwise have commenced receipt of benefits as of the date of a Change of
Control, it shall be presumed that such Participant shall have completed not
less than five (5) years of service and attained at least age 60 as of such date
of a Change of Control and benefits shall be immediately payable as of such date
of a Change of Control. Upon a Change of Control, all benefits payable hereunder
shall be immediately paid to the Participant, if still living, the Participant's
surviving spouse, if any, or in the alternative, to the Participant's estate or
beneficiary, if applicable, in the form of a lump-sum payment discounted based
upon the interest rate in effect as of the closing on the date prior to such
payment for the 5 year U.S. treasury obligations as reported in the Wall Street
Journal.
2.3 Total and Permanent Disability. In the event of the Disability of the
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Participant, the Participant will be entitled to a monthly pension in the amount
specified at Article II, Section 2.4, payable on the first day of the month
following certification of such Disability without regard to the actual age of
such Participant and presuming that the Participant shall have attained the age
of not less than 60 as of the date of such Disability. For purposes of benefits
accrual, such Participant's years of service shall be determined based upon the
date of certification of such Disability; provided that no benefits shall be
payable hereunder if such Participant shall have completed less than five years
of service as of the date of such Disability.
2.4 Level of Benefit Payments. Directors that retire as such shall be
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eligible to receive retirement benefits as follows:
a. A Director who upon retirement on or after the Retirement Date
enters into an agreement to be a consulting director of the Company, the
Savings Bank or the MHC (in a form similar to that contained at Schedule A
hereto) shall be paid the retirement benefit equal to the product of i)
one-twelfth of the Retirement Benefit Amount specified at Section 2.4(c)
herein, and ii) the Percentage of the Retirement Benefit Amount specified
at Section 2.4(b), as a monthly sum for the life of such Participant, or
until the month following the date of death of such Participant, whichever
is earlier. Notwithstanding the foregoing, in the event of the death of the
Participant prior to the receipt of a minimum of 120 monthly payments, then
such monthly payments shall nevertheless continue to be paid to the
Participant's surviving spouse, if any, or in the alternative, to the
Participant's estate until a minimum of a total of 120 payments have been
made on behalf of the Participant.
b. The Percentage of the Retirement Benefit Amount to be paid to the
Participant shall be equal to 2.5% times the number of years of service as
a member of the Board of Directors of the Company, the Savings Bank and the
MHC; provided that such percentage shall not exceed 80% regardless of the
total years of service, and that such percentage shall be 0% if the total
years of service does not equal at least five (5) years as of the date of
retirement from the Board.
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c. The Retirement Benefit Amount shall be calculated as the total
retainer, regular and special meeting fees for Board meetings and fees for
Executive Committee meetings (collectively, "Fees") paid to a Director by
the Company, the Savings Bank and the MHC for the twelve month period prior
to the Retirement Date for each such corporate entity for which the
Participant satisfies the requirements of such Retirement Date.
Notwithstanding the foregoing, in the event of retirement upon Disability
in accordance with Section 2.3 herein, the Retirement Benefit Amount shall
be calculated based upon the highest total aggregate Fees paid during any
12 consecutive month period during the 24 month period prior to the date of
certification of such Disability. For all purpose of calculation of the
Retirement Benefit Amount under this Plan, any compensation paid to a
director under any stock plan, or bonus arrangements (including the Bank's
Strategic Business Planning Incentive Compensation Program) shall be
excluded in the determination of Fees paid.
2.5 Death of Participant Prior to Retirement. Upon the death of the
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Participant prior to such Participant's termination from service as a Director,
all benefits shall be deemed immediately payable in accordance with Article II,
Section 2.4 as if the Participant had retired as of the date of such death;
provided that if Participant has not yet attained the Retirement Date as of such
date of termination of service resulting from death, such Participant shall
nevertheless be deemed to have served as a Director of the Bank until the
Retirement Date in order to calculate benefits payable hereunder. All benefits
payable hereunder shall be immediately paid to the Participant's surviving
spouse, if any, or in the alternative, to the Participant's estate, in
accordance with the written election made by the Participant prior to his or her
death, as set forth at Schedule B, designating a lump-sum benefit or 120 monthly
payments, or in the absence of a written election by such Participant, then in
the form of a lump-sum payment. In any event, the lump-sum benefit shall be
calculated and discounted based upon the interest rate in effect as of the
closing on the date prior to such payment for the 5 year U.S treasury
obligations as reported in the Wall Street Journal.
ARTICLE III
INSURANCE
3.1 Ownership of Insurance. The Company, the Savings Bank or the MHC, in
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its sole discretion, may elect to purchase one or more life insurance policies
on the lives of Participants in order to provide funds to pay part or all of the
benefits accrued under this Plan. All rights and incidents of ownership in any
life insurance policy that the Company, the Savings Bank or the MHC may purchase
insuring the life of the Participant (including any right to proceeds payable
thereunder) shall belong exclusively to such entity or its designated Trust, and
neither the Participant, nor any beneficiary or other person claiming under or
through him or her shall have any rights, title or interest in or to any such
insurance policy. The Participant shall not have any power to transfer, assign,
hypothecate or otherwise encumber in advance any of the benefits payable
thereunder, nor shall any benefits be subject to seizure for the benefit of any
debts or judgments, or be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. Any life insurance policy
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purchased pursuant hereto and any proceeds payable thereunder shall remain
subject to the claims of the corporate general creditors.
3.2 Physical Examination. As a condition of becoming or remaining covered
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under this Plan, each Participant, as may be requested by the Company from time
to time shall take a physical examination by a physician approved by an
insurance carrier. The cost of the examination shall not be borne by the
Participant. The report of such examination shall be transmitted directly from
the physician to the insurance carrier designated by the Company to establish
certain costs associated with obtaining insurance coverages as may be deemed
necessary under this Plan. Such examination shall remain confidential among the
Participant, the physician and the insurance carrier and shall not be made
available to the Company in any form or manner.
3.3 Death of Participant. On death of the Participant, the proceeds derived
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from such insurance policy, if any, shall be paid to the sponsoring entity or
its designated Trust.
ARTICLE IV
TRUST
4.1 Trust. Except as may be specifically provided, nothing contained in
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this Plan and no action taken pursuant to the provisions of this Plan shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company, the Savings Bank or the MHC and the
Participant or any other person. Any funds which may be invested under the
provisions of this Plan shall continue for all purposes to be a part of the
general funds of the Company, the Savings Bank or the MHC. No person other than
the sponsoring corporate entity shall by virtue of the provisions of this Plan
have any interest in such funds. The Company, the Savings Bank or the MHC shall
not be under any obligation to use such funds solely to provide benefits
hereunder, and no representations have been made to a Participant that such
funds can or will be used only to provide benefits hereunder. To the extent that
any person acquires a right to receive payments from the Company under the Plan,
such rights shall be no greater than the right of any unsecured general creditor
of the Company.
In order to facilitate the accumulation of funds necessary to meet the
costs of the Company under this Plan (including the provision of funds necessary
to pay premiums with respect to any life insurance policies purchase pursuant to
Article III above and to pay benefits to the extent that the cash value and/or
proceeds of any such policies are not adequate to make payments to a Participant
or his or her beneficiary as and when the same are due under the Plan), the
Company may enter into a Trust Agreement. The Company, in its discretion, may
elect to place any life insurance policies purchased pursuant to Article III
above into the Trust. In addition, such sums shall be placed in said Trust as
may from time to time be approved by the Board of Directors, in its sole
discretion. To the extent that the assets of said Trust and/or the proceeds of
any life insurance policy purchased pursuant to Article III are not sufficient
to pay benefits accrued under this Plan, such payments shall be made from the
general assets of the Company.
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ARTICLE V
VESTING
5.1 Vesting. All benefits under this Plan are deemed non-vested and
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forfeitable prior to the Retirement Date. Notwithstanding the foregoing, all
benefits payable hereunder shall be deemed 100% non-forfeitable by the
Participant upon the Retirement Date, upon termination of service following a
Change in Control of the Company or the Savings Bank, upon the Disability of the
Participant following not less than five years of prior Board service, or the
death of the Participant. No benefits shall be deemed payable hereunder for any
time period prior to the time that such benefits shall be deemed 100%
non-forfeitable.
ARTICLE VI
TERMINATION
6.1 Termination. All rights of the Participant hereunder shall terminate
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immediately upon the Participant ceasing to be in the active service of the
Company, the Savings Bank or the MHC prior to the time that benefits payable
under the Plan shall be deemed to be 100% non-forfeitable. A leave of absence
approved by the Board shall not constitute a cessation of service within the
meaning of this paragraph, within the sole discretion of the Committee.
ARTICLE VII
FORFEITURE OR SUSPENSION OF BENEFITS
7.1 Forfeiture or Suspension of Benefits. Notwithstanding any other
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provision of this Plan to the contrary, benefits shall be forfeited or suspended
during any period of paid service with the Company, the Savings Bank or the MHC
following the commencement of benefit payments, within the sole discretion of
the Committee.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Other Benefits. Nothing in this Plan shall diminish or impair the
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Participant's eligibility, participation or benefit entitlement under any other
benefit, insurance or compensation plan or agreement of the Company, Savings
Bank or the MHC now or hereinafter in effect. Upon retirement as a Director,
such Participants shall no longer be eligible for Savings Bank reimbursement for
the costs associated with enrollment in the Savings Bank's medical insurance
plans or reimbursement for the costs associated with attendance at industry
conferences.
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8.2 No Effect on Employment. This Plan shall not be deemed to give any
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Participant or other person in the employ or service of the Company, the Savings
Bank or the MHC any right to be retained in the employment or service of the
Company, the Savings Bank or the MHC, or to interfere with the right of the
Company, the Savings Bank or the MHC to terminate any Participant or such other
person at any time and to treat him or her without regard to the effect which
such treatment might have upon him or her as a Participant in this Plan.
8.3 Legally Binding. The rights, privileges, benefits and obligations under
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this Plan are intended to be legal obligations of the Company and binding upon
the Company, its successors and assigns.
8.4 Modification. The Company, by action of the Board of Directors,
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reserves the exclusive right to amend, modify, or terminate this Plan. Any such
termination, modification or amendment shall not terminate or diminish any
rights or benefits accrued by any Participant prior thereto. The Company shall
give thirty (30) days' notice in writing to any Participant prior to the
effective date of any such amendment, modification or termination of this Plan.
Notwithstanding the foregoing, in no event shall such benefits payable under the
Plan be reduced below those provided for in Section 2.4 herein.
8.5 Arbitration. Any controversy or claim arising out of or relating to any
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contract or the breach thereof shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
with such arbitration hearing to be held at the offices of the American
Arbitration Association ("AAA") nearest to the home office of the Company,
unless otherwise mutually agreed to by the Participant and the Company, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
8.6 Limitation. No rights of any Participant are assignable by any
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Participant, in whole or in part, either by voluntary or involuntary act or by
operation of law. Rights of Participants hereunder are not subject to
anticipation, alienation, sale, transfer, assignment, pledge, hypothecation,
encumbrance or garnishment by creditors of the Participant. Such rights are not
subject to the debts, contracts, liabilities, engagements, or torts of any
Participant. No Participant shall have any right under this Plan or any Trust
referred to in Article IV or against any assets held or acquired pursuant
thereto other than the rights of a general, unsecured creditor of the Company
pursuant to the unsecured promise of the Company to pay the benefits accrued
hereunder in accordance with the terms of this Plan. The Company has no
obligation under this Plan to fund or otherwise secure its obligations to render
payments hereunder to Participants. No Participant shall have any voice in the
use, disposition, or investment of any asset acquired or set aside by the
Company to provide benefits under this Plan.
8.7 ERISA and IRC Disclaimer. It is intended that the Plan be neither an
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"employee welfare benefit plan" nor an "employee pension benefit plan" for
purposes of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Further, it is intended that the Plan will not cause the interest of
a Participant under the Plan to be includible in the gross income of such
Participant prior to the actual receipt of a payment under the Plan for purposes
of the Internal
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Revenue Code of 1986, as amended ("IRC"). No representation is made to any
Participant to the effect that any insurance policies purchased by the Company,
the Savings Bank or the MHC or assets of any Trust established pursuant to this
Plan will be used solely to provide benefits under this Plan or in any way shall
constitute security for the payment of such benefits. Benefits payable under
this Plan are not in any way limited to or governed by the proceeds of any such
insurance policies or the assets of any such Trust. No Participant in the Plan
has any preferred claim against the proceeds of any such insurance policies or
the assets of any such Trust.
8.8 Conduct of Participants. Notwithstanding anything contained herein to
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the contrary, no payment of any then unpaid benefits shall be made and all
rights under the Plan payable to a Participant, or any other person, to receive
payments thereof shall be forfeited if the Participant shall engage in any
activity or conduct which in the opinion the Board of the Company, the Savings
Bank or the MHC is inimical to the best interests of the Company, the Savings
Bank or the MHC.
8.9 Incompetency. If the Company shall find that any person to whom any
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payment is payable under the Plan is deemed unable to care for his or her
personal affairs because of illness or accident, any payment due (unless a prior
claim therefor shall have been made by a duly appointed guardian, committee or
other legal representative) may be paid to the spouse, a child, a parent, or a
brother or sister, or to any person deemed by the Company to have incurred
expense for such person otherwise entitled to payment, in such manner and
proportions as the Board may determine in its sole discretion. Any such payments
shall constitute a complete discharge of the liabilities of the Company under
the Plan.
8.10 Construction. The Company shall have full power and authority to
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interpret, construe and administer this Plan and the Company's interpretations
and construction thereof, and actions thereunder, shall be binding and
conclusive on all persons for all purposes. Directors of the Company, the
Savings Bank or the MHC shall not be liable to any person for any action taken
or omitted in connection with the interpretation and administration of this Plan
unless attributable to his own willful, gross misconduct or lack of good faith.
8.11 Plan Administration. The Board of Directors of the Company shall
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administer the Plan; provided, however, that the Board may appoint an
administrative committee ("Committee") to provide administrative services or
perform duties required by this Plan. The Committee shall have only the
authority granted to it by the Board. All prior obligations of the Savings Bank
under the Kearny Federal Savings Bank Directors Consultation and Retirement Plan
shall be assumed by the Company as of the Effective Date; provided, however, the
Savings Bank shall reimburse the Company for all such obligations assumed.
Further, the Savings Bank and the MHC shall reimburse the Company for all
obligations under the Plan attributable to compensation paid by the Savings Bank
or the MHC, respectively, to each Plan Participant.
8.12 Governing Law. This Plan shall be construed in accordance with and
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governed by the laws of the State of New Jersey, except to the extent that
Federal law shall be deemed to apply. No payments of benefits shall be made
hereunder if the Board of the Company, or counsel retained thereby, shall
determine that such payments shall be in violation of applicable regulations, or
likely
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result in imposition of regulatory action, by the Office of Thrift Supervision,
Federal Deposit Insurance Corporation or other appropriate banking regulatory
agencies.
8.13 Successors and Assigns. The Plan shall be binding upon any successor
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or successors of the Company, and unless clearly inapplicable, reference herein
to the Company shall be deemed to include any successor or successors of the
Company.
8.14 Sole Agreement. The Plan expresses, embodies, and supersedes all
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previous agreements, understandings, and commitments, whether written or oral,
between the Company and any Participants hereto with respect to the subject
matter hereof.
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IN WITNESS WHEREOF, the Company has caused the Plan to be executed by its
duly authorized officers.
Kearny Financial Corp.
8-1-2005 By: /s/ John N. Hopkins
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Date Title: John N. Hopkins, President & CEO
8-1-2005 Sharon Jones
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Date Witness: Sharon Jones, Corp. Secretary
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