* 4/13/95 *
LITTLE FALLS SAVINGS BANK
DIRECTORS CONSULTATION AND RETIREMENT PLAN
WHEREAS, Little Falls Savings Bank ("Savings Bank") wishes 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, it is deemed advisable and in the best interests of the
Savings Bank to offer such members of the Boards of Directors additional
financial incentives in the form of deferred compensation to encourage such
participation and service to the Savings Bank, as directors, and following
retirement as a director to encourage such individuals to continue to serve the
Savings Bank as a consulting director for a period of time thereafter,
NOW THEREFORE, BE IT RESOLVED that the Little Falls Savings Bank
Directors Consultation and Retirement Plan ("Plan"), attached hereto and made a
part of these minutes, be adopted and implemented effective May 9, 1995.
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:
1.1 "Savings Bank" means Little Falls Savings Bank, Little Falls, New
Jersey, or any successor thereto.
1.2 "Board" means the Board of Directors of the Savings Bank, as
constituted from time to time and successors thereto.
1.3 "Change in Control" means the power to control proxies by any
person, other than the Board of Directors of the Savings Bank to direct more
than 25% of the outstanding votes of the Savings Bank, the control of the
election of a majority of the Savings Bank's directors or the exercise of a
controlling influence over the management or policies of the Savings Bank by any
person or by persons acting as a group within the meaning of Section 13(d) of
the Securities Exchange Act of 1934, as amended, ("Exchange Act"). In the event
the Savings Bank converts in the future from mutual-to-stock form, the term
"control" shall refer to the ownership, holding or power to vote more than 25%
of the Savings Bank's (or any parent holding company's) outstanding voting stock
by any person, the control of the election of a majority of the Savings Bank's
(or any parent holding company's) directors, or the exercise of
a controlling influence over the management or policies of the Savings Bank by
any person or by persons acting as a group within the meaning of Section 13(d)
of the Exchange Act. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein. Change of Control shall also
mean: (i) the execution of an agreement for the sale of all, or a material
portion, of the assets of the Savings Bank; (ii) the execution of an agreement
for a merger or recapitalization of the Savings Bank or any merger or
recapitalization whereby the Savings Bank is not the surviving entity; (iii) a
change of control of the Savings Bank, as otherwise defined or determined by the
New Jersey Department of Banking, 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 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 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. The decision of the Committee as to whether a change
in control has occurred shall be conclusive and binding. A change in control
shall not be deemed to have occurred as a result of a holding company
reorganization of the Savings Bank and simultaneous acquisition of 100% of such
stock by a parent savings and loan holding company or bank holding company.
1.4 "Committee" means the Executive Committee of the Board of the
Savings Bank.
1.5 "Director" means a member of the Board of the Savings Bank.
1.6 "Disability" (total and permanent disability) means a mental or
physical disability which prevents the Director from performing the normal
duties of his or her position with the Savings Bank. 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 Savings Bank
must certify that the Director is disabled from performing his or her normal
duties with the Savings Bank.
1.7 "Effective Date" means May 9, 1995.
1.8 "Participant" means a Director serving as such on or after the
Effective 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.
1.9 "Plan" means the Little Falls Savings Bank Directors Consultation
and Retirement Plan herein set forth, as amended from time to time.
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1.10 "Retirement Date" means the date of termination of service as a
Director following the participant's completion of not less than 20 years of
Board service and attainment of not less than age 60 while serving as a
Director.
1.11 "Service" means all years of service as a member of the Board and
all predecessor entities.
ARTICLE II
BENEFITS
2.1 Retirement. Upon a Participant's retirement from service as a
Director of the Savings Bank on or after the Retirement Date, the Savings Bank
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 of the Savings Bank prior to the
Retirement Date, the Savings Bank shall have no financial obligations to the
Participant under the Plan.
2.2 Change in Control. All benefits payable, or that would become
payable 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 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 20 years of service and attained 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.
2.3 Total and Permanent Disability. In the event of the Disability of
the 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; provided,
however, that such Participant shall have completed not less than 20 years of
service as of the date of certification of such Disability.
2.4 Level of Benefit Payments. Participants that retire as a Director
of the Savings Bank in accordance with Sections 2.1, 2.2 or 2.3 herein, shall be
eligible to receive retirement benefits as follows:
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A Participant who upon retirement on or after the Retirement Date
enters into an agreement to be a consulting director of the Savings Bank (in a
form similar to that contained at Schedule A hereto) shall be paid the
retirement benefit equal to the product of 50% times the regular monthly Board
fees in effect as of the date of retirement from the Board as a monthly sum
until the month following the date of death of such Participant.
ARTICLE III
INSURANCE
3.1 Ownership of Insurance. The Savings Bank, in its sole discretion,
may elect to purchase one or more life insurance policies on the lives of
Participants in order to provide funds to the Savings Bank 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 Savings Bank may purchase insuring the life
of the Participant (including any right to proceeds payable thereunder) shall
belong exclusively to the Savings Bank 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 purchased
pursuant hereto and any proceeds payable thereunder shall remain subject to the
claims of the Savings Bank's general creditors.
3.2 Physical Examination. As a condition of becoming or remaining
covered under this Plan, each Participant, as may be requested by the Savings
Bank 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 Savings Bank 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 Savings Bank in any form or manner.
3.3 Death of Participant. On death of the Participant, the proceeds
derived from such insurance policy, if any, shall be paid to the Savings Bank or
its designated Trust.
ARTICLE IV
TRUST
4.1 Trust. Except as may be specifically provided, nothing contained in
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 Savings Bank and the Participant or
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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
Savings Bank. No person other than the Savings Bank shall by virtue of the
provisions of this Plan have any interest in such funds. The Savings Bank 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 Savings Bank under the
Plan, such rights shall be no greater than the right of any unsecured general
creditor of the Savings Bank.
In order to facilitate the accumulation of funds necessary to meet the
costs of the Savings Bank 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 Savings Bank may enter into a Trust Agreement. The Savings Bank, 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 Savings Bank.
ARTICLE V
VESTING
5.1 Vesting. All benefits under this Plan are deemed non-vested and
forfeitable prior to the Retirement Date. Notwithstanding the foregoing, all
benefits payable hereunder shall deemed 100% non-forfeitable by the Participant
upon the Retirement Date, upon termination of service following a Change in
Control of the Savings Bank, or upon the Disability of the Participant following
not less than 20 years of prior Board service. No benefits shall be deemed
payable hereunder for any time period prior to the time that such benefits shall
be deemed 100% non-forfeitable. Notwithstanding anything herein to the contrary,
in no event shall benefits payable hereunder be deemed vested and payable within
3 years of the Effective Date of the Plan except as follows: one-third of
benefits payable hereunder shall be deemed vested following one year after the
Effective Date of the Plan and one-third annually thereafter, except however in
the event that a Participant shall have attained age 60 and shall have completed
not less than 30 years of service, benefits shall be deemed 100% non-forfeitable
and payable as of the date of retirement on or after the Effective Date.
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ARTICLE VI
TERMINATION
6.1 Termination. All rights of the Participant hereunder shall
terminate immediately upon the Participant ceasing to be in the active service
of the Savings Bank 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
provision of this Plan to the contrary, benefits shall be forfeited or suspended
during any period of paid service with the Savings Bank 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
Participant's eligibility, participation or benefit entitlement under any other
benefit, insurance or compensation plan or agreement of the Savings Bank now or
hereinafter in effect.
8.2 No Effect on Employment. This Plan shall not be deemed to give any
Participant or other person in the employ or service of the Savings Bank any
right to be retained in the employment or service of the Savings Bank, or to
interfere with the right of the Savings Bank 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 this Plan are intended to be legal obligations of the Savings Bank and
binding upon the Savings Bank, its successors and assigns.
8.4 Modification. The Savings Bank, by action of the Board of
Directors, 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
Savings Bank 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
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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 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 Savings Bank,
unless otherwise mutually agreed to by the Participant and the Savings Bank, 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
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 Savings
Bank pursuant to the unsecured promise of the Savings Bank to pay the benefits
accrued hereunder in accordance with the terms of this Plan. The Savings Bank
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
Savings Bank to provide benefits under this Plan.
8.7 ERISA and IRC Disclaimer. It is intended that the Plan be neither
an "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 includable in the gross income of such
Participant prior to the actual receipt of a payment under the Plan for purposes
of the Internal Revenue Code of 1986, as amended ("IRC"). No representation is
made to any Participant to the effect that any insurance policies purchased by
the Savings Bank 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 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 Savings Bank is
inimical to the best interests of the Savings Bank.
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8.9 Incompetency. If the Savings Bank shall find that any person to
whom any 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 Savings Bank 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
Savings Bank under the Plan.
8.10 Construction. The Savings Bank shall have full power and authority
to interpret, construe and administer this Plan and the Savings Bank's
interpretations and construction thereof, and actions thereunder, shall be
binding and conclusive on all persons for all purposes. Directors of the Savings
Bank 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 Savings Bank
shall 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.
8.12 Governing Law. This Plan shall be construed in accordance with and
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 Savings Bank, or counsel retained thereby, shall
determine that such payments shall be in violation of applicable regulations, or
likely result in imposition of regulatory action, by the New Jersey Department
of Banking, Federal Deposit Insurance Corporation or other appropriate banking
regulatory agencies.
8.13 Successors and Assigns. The Plan shall be binding upon any
successor or successors of the Savings Bank, and unless clearly inapplicable,
reference herein to the Savings Bank shall be deemed to include any successor or
successors of the Savings Bank.
8.14 Sole Agreement. The Plan expresses, embodies, and supersedes all
previous agreements, understandings, and commitments, whether written or oral,
between the Savings Bank and any Participants hereto with respect to the subject
matter hereof.
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SCHEDULE A
Little Falls Savings Bank
Little Falls, New Jersey
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DIRECTORS CONSULTATION AND RETIREMENT PLAN
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WHEREAS, the Board of Directors of Little Falls Savings Bank, Little
Falls, New Jersey ("Savings Bank") has previously adopted the Directors
Consultation and Retirement Plan ("Plan"); and
WHEREAS, upon retirement as a Director, I am eligible to elect to
participant in such Plan;
My signature below hereby evidences my request to the Savings Bank of
my election to participate in the Plan, as follows:
1. This election to participate in the Plan is being delivered to
the Savings Bank effective ________________;
2. I hereby resign as a director of the Savings Bank as of
_____________; ("Retirement Date").
3. Upon retirement from the Board as of the Retirement Date, I
shall be appointed as a Consulting Director to the Savings
Bank and shall advise the Savings Bank from time to time on
business and community relations matters as may be requested;
4. As a Consulting Director, I will not have any specific duties
or responsibilities, except as may be specifically requested
from time to time by the Board;
5. Compensation as a Consulting Director shall be as specified at
Section II of the Plan as a consulting retainer and retirement
benefit.
6. I understand that the above listed items constitutes the only
benefits that shall be delivered to me as a participant in the
Plan.