Exhibit 10.11
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
ASTORIA FINANCIAL CORPORATION
Adopted on December 21, 1994
Effective as of January 1, 1995
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Administrator ............................................ 1
Section 1.2 Association .............................................. 1
Section 1.3 Board .................................................... 1
Section 1.4 Change of Control ........................................ 1
Section 1.5 Code ..................................................... 1
Section 1.6 Director ................................................. 1
Section 1.7 Exchange Act ............................................. 1
Section 1.8 Fees ..................................................... 1
Section 1.9 Holding Company .......................................... 1
Section 1.10 Memorandum Account ....................................... 1
Section 1.11 Participant .............................................. 2
Section 1.12 Participating Company .................................... 2
Section 1.13 Plan ..................................................... 2
ARTICLE II
PARTICIPATION
Section 2.1 Election to Participate .................................. 2
Section 2.2 Changes in Participation ................................. 2
ARTICLE III
DEFERRED AMOUNTS
Section 3.1 In General ............................................... 3
Section 3.2 Interest Credited to the Memorandum Account .............. 3
Section 3.3 Vesting .................................................. 3
ARTICLE IV
DISTRIBUTIONS
Section 4.1 Distributions to Participants ............................ 4
Section 4.2 Change of Payment Schedule ............................... 5
Section 4.3 Distributions to Beneficiaries ........................... 6
(i)
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ARTICLE V
CHANGE OF CONTROL
Section 5.1 Change of Control Defined ................................ 6
Section 5.2 Participants' Options upon a Change of Control ........... 8
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Notice and Election ...................................... 9
Section 6.2 Construction and Language ................................ 9
Section 6.3 Headings ................................................. 9
Section 6.4 Non-Alienation of Benefits ............................... 9
Section 6.5 Indemnification .......................................... 10
Section 6.6 Severability ............................................. 10
Section 6.7 Waiver ................................................... 10
Section 6.8 Governing Law ............................................ 10
Section 6.9 Taxes .................................................... 10
Section 6.10 No Deposit Account ....................................... 10
(ii)
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
ASTORIA FINANCIAL CORPORATION
ARTICLE I
DEFINITIONS
The following definitions shall apply for the purposes of this Plan
unless a different meaning is clearly indicated by the context:
Section 1.1 Administrator means the Compensation Committee of the
Board.
Section 1.2 Association means Astoria Federal Savings and Loan
Association.
Section 1.3 Board means the Board of Directors of the Holding Company.
Section 1.4 Change of Control has the meaning set forth in section
5.1.
Section 1.5 Code means the Internal Revenue Code of 1986 (including
the corresponding provisions of any succeeding law).
Section 1.6 Director means any member of the Board of Directors of any
Participating Company who is not an employee of any Participating Company. The
term "Director" shall not include any individual to the extent that his service
is as a director emeritus or a member of an advisory board.
Section 1.7 Exchange Act means the Securities Exchange Act of 1934, as
amended (including the corresponding provisions of any succeeding law).
Section 1.8 Fees means, with respect to any Director, compensation
payable for services as a member of the Board of Directors of a Participating
Company, including annual retainers, fees for attendance at meetings, and
special compensation as a chairman and/or a member of a committee of Directors.
Section 1.9 Holding Company means Astoria Financial Corporation.
Section 1.10 Memorandum Account means, with respect to a Participant,
an account maintained by the Holding Company to which is credited the amount of
the Participant's deferred Fees together with interest thereon pursuant to
section 3.2, and against which are charged any distributions of amounts credited
to the Memorandum Account.
Section 1.11 Participant means a Director who has a Memorandum Account
under the Plan.
Section 1.12 Participating Company means the Holding Company, the
Association, and any other company which, with the prior approval of the
Administrator, may adopt this Plan.
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Section 1.13 Plan means this Deferred Compensation Plan for Directors.
The Plan may be referred to as the "Deferred Compensation Plan for Directors of
Astoria Financial Corporation.
ARTICLE II
PARTICIPATION
Section 2.1 Election to Participate.
Any Director may elect to become a Participant in the Plan by
submitting to the Administrator a written election to defer receipt of all or a
specified part of his Fees. Such election shall be made on or before the last
day of any calendar year and shall be effective for the calendar year following
the calendar year in which such election is made; provided, however, that in the
case of initial elections made during 1994 or during the thirty (30) days after
a person is first elected or appointed to serve as a Director, such election may
be effective for Fees earned on or after an earlier date designated by the
Director that is after the last day of the calendar month in which such election
is filed with the Administrator. Once an election is made, it shall continue in
effect for all succeeding calendar years until changed or revoked pursuant to
section 2.2.
Section 2.2 Changes in Participation.
An election by a Director pursuant to section 2.1 shall continue in
effect until termination of service as a Director; provided, however, that the
Director may, by written election filed with the Administrator, increase or
decrease the portion of his Fees to be deferred or discontinue such deferral
altogether. Such election shall be effective with respect to Fees earned after
the calendar year in which such election is filed with the Administrator. In the
event that a Participant ceases to be a Director or in the event that a Director
ceases to defer receipt of his Fees, the balance in his Memorandum Account shall
continue to be credited with interest in accordance with Article V. A Director
who has filed a written election to cease deferring receipt of his Fees may
thereafter again file an election to defer receipt of all or any portion of his
Fees pursuant to section 2.1, effective for the calendar year subsequent to the
calendar year in which he files the new election.
ARTICLE III
DEFERRED AMOUNTS
Section 3.1 In General.
The Administrator shall maintain a separate Memorandum Account for
each Participant. The amount of a Participant's Fees deferred pursuant to
section 2.1 shall be credited to his Memorandum Account as of the date on which
such Fees would have been paid if an election to defer were not in effect.
Neither the Association nor any Participating Company shall fund its liability
for the balances credited to a Memorandum Account, but each shall reflect its
liability for such balances on its books. The Holding Company may, on such terms
and conditions as it may, in its discretion, establish and agree to assume the
liability for the payment of deferred
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Fees and interest thereon attributable to service for the Association or other
Participating Companies.
Section 3.2 Interest Credited to the Memorandum Account.
A Participant's Memorandum Account shall be credited with interest as
of the last day of each calendar quarter. Such interest credit shall be equal to
the product of:
(a) the average daily balance in the Memorandum Account during the
quarter then ended; multiplied by
(b) twenty-five percent (25%) of the lower of:
(i) the average (on a consolidated basis) of (A) the Holding
Company's yield (expressed as an annual percentage rate) on its
average investments for the preceding quarter and (B) the Holding
Company's cost of funds (expressed as an annual percentage rate) on
its average interest-bearing liabilities for the quarter preceding the
quarter then ended; and
(ii) the Holding Company's yield on a consolidated basis
(expressed as an annual percentage rate) on its average investments
for the quarter preceding the quarter then ended.
Each such interest credit shall be added to the balance of a Participant's
Memorandum Account as of the first day of the succeeding quarter for purposes of
determining future interest credits.
Section 3.3 Vesting.
All deferred fees and interest credited to the Memorandum Account
shall be 100% vested at all times.
ARTICLE IV
DISTRIBUTIONS
Section 4.1 Distributions to Participants.
(a) The balance in a Participant's Memorandum Account shall be paid to
the Participant according to the payment schedule determined under section
4.1(b) as of the earlier of:
(i) the first business day of the calendar quarter following the
calendar quarter in which the Participant ceases to be a Director of any
and all Participating Companies for any reason, including death or
retirement at mandatory retirement age; or
(ii) the first business day of the calendar quarter following the
calendar quarter in which the Participant becomes permanently and totally
disabled within the meaning of section 22(e)(3) of the Code.
Payment (or the first in a series of payments) shall be made as soon as
practicable after the date determined under this section 4.1(a).
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(b) Subject to section 4.1(c), payments made pursuant to section
4.1(a) shall be made according to whichever of the following payment schedules
the Participant shall designate in his initial election to defer receipt of Fees
(or in a subsequent election made and approved pursuant to section 4.2):
(i) in a single lump sum, in which case the amount of the payment
shall be equal to the entire balance credited to the Participant's
Memorandum Account as of the last day of the calendar quarter before the
quarter in which the payment is to be made;
(ii) in such number of quarterly installment payments (not to exceed
one-hundred (100) quarterly payments) as the Participant shall specify in
his written election to defer receipt of Fees, in which case the amount of
the quarterly installment payments to be made in each calendar year shall
be equal to the lesser of the total balance in the Participant's Memorandum
Account as of the date of payment and the amount determined under the
following formula:
AB
QP = ----
N
where:
(A) "QP" is the amount of the quarterly payment;
(B) "AB" is the balance credited to the Participant's Memorandum
Account as of (I) for the first calendar year in which payments are
made, the first day of the first calendar quarter for which a payment
is made, and (II) for succeeding calendar years, January 1st of the
year for which the payment is being made;
(C) "N" is the number of payments remaining to be paid as of (I)
in the case of the first calendar year in which payments are made, the
first day of the first calendar quarter for which a payment is due,
and (II) in the case of succeeding calendar years, January 1st of the
year for which the payment is made.
The amount of the quarterly installments payable shall be adjusted as of
the first day of each calendar year until the entire Memorandum Account has
been distributed. Notwithstanding anything in this section 4.1(b)(ii) to
the contrary, the final scheduled quarterly installment shall include the
entire remaining balance credited to the Memorandum Account.
If the Participant fails to designate a payment schedule in his election to
defer receipt of Fees, then payment shall be made in one hundred (100) quarterly
installments determined in accordance with section 4.1(b)(ii).
(c) If, after payments have begun pursuant to section 4.1(a), the
balance credited to a Participant's Memorandum Account falls below $10,000, the
Administrator may, in its discretion, pay out such remaining balance in a lump
sum, regardless of the payment schedule selected by the Participant pursuant to
section 4.1(b).
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Section 4.2 Change of Payment Schedule.
A Participant may, at any time, by written notice to the
Administrator, request a change in the payment schedule in effect for his
Memorandum Account under section 4.1(b). The Administrator may honor or decline
to honor such a request in its sole and absolute discretion; provided, however,
that the Administrator shall decline to honor any such request that could, in
the judgment of the Administrator, result in the constructive receipt of income
by the requesting Participant or any other person entitled to benefits pursuant
to the Plan. If the Administrator determines to honor such a request, it shall
be effective for all payments to be made on or after the effective date
specified by the Administrator.
Section 4.3 Distributions to Beneficiaries.
(a) In the event that a Participant dies prior to the receipt of all
amounts payable to him pursuant to the Plan, any remaining balance credited to
his Memorandum Account shall be paid to such one or more beneficiaries and in
such proportions as the Participant may designate on such form and in such
manner as the Administrator may require. A beneficiary designation pursuant to
this section 4.3 shall not be effective unless it is in writing and is received
by the Administrator prior to the death of the Participant making the
designation.
(b) Payments to the Participant's beneficiary(ies) pursuant to this
section 4.3 shall be payable in a single lump sum as soon as practicable after
the Participant's death, unless the Participant directs that payment be made
according to the payment schedule selected by the Participant pursuant to
section 4.1(b).
(c) If no beneficiary shall have been designated or if any such
designation shall be ineffective, or in the event that no designated beneficiary
survives the Participant, the balance credited to the Participant's Memorandum
Account shall be paid to his estate in a lump sum as soon as practicable
following his death. In the event that the Participant and one or more of his
designated beneficiaries shall die under circumstances which cast doubt on which
of them shall have been the first to die, the Participant shall be deemed to
have survived the deceased beneficiary.
ARTICLE V
CHANGE OF CONTROL
Section 5.1 Change of Control Defined.
A Change of Control shall be deemed to have occurred upon the
happening of any of the following events:
(a) in the case of a Director of the Holding Company, approval by the
stockholders of the Holding Company of a transaction that would result in
the reorganization, merger or consolidation of the Holding Company with one
or more other persons, other than a transaction following which:
(i) at least 51% of the equity ownership interests of the entity
resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in
substantially the
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same relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the outstanding
equity ownership interests in the Holding Company; and
(ii) at least 51% of the securities entitled to vote generally in
the election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially the same relative
proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) at least 51% of the securities entitled to vote
generally in the election of directors of the Holding Company;
(b) in the case of a Director of the Holding Company, the acquisition
of all or substantially all of the assets of the Holding Company or
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the outstanding securities of Holding
Company entitled to vote generally in the election of directors by any
person or by any persons acting in concert, or approval by the stockholders
of the Holding Company of any transaction which would result in such an
acquisition; or
(c) in the case of a Director of the Holding Company, a complete
liquidation or dissolution of the Holding Company, or approval by the
stockholders of the Holding Company of a plan for such liquidation or
dissolution; or
(d) in the case of a Director of the Holding Company, the occurrence
of any event if, immediately following such event, at least 50% of the
members of the board of directors of the Holding Company do not belong to
any of the following groups:
(i) individuals who were members of the board of directors of the
Holding Company on the date on which such Director first became a
Participant; or
(ii) individuals who first became members of the board of
Directors of the Holding Company after such date either:
(A) upon election to serve as a member of the board of
directors of the Holding Company by affirmative vote of
three-quarters of the members of such board, or of a nominating
committee thereof, in office at the time of such first election;
or
(B) upon election by the stockholders of the Holding Company
to serve as a member of the board of directors of the Holding
Company, but only if nominated for election by affirmative vote
of three-quarters of the members of the board of directors of the
Holding Company, or of a nominating committee thereof, in office
at the time of such first nomination;
provided, however, that such individual's election or nomination did
not result from an actual or threatened election contest (within the
meaning of Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents (within the
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meaning of Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) other than by or on behalf of the board of directors of
the Holding Company;
(e) in the case of any Participant who is or was a Director of the
Association or a Participating Company other than the Association or the
Holding Company, an event that would be described in section 5.1(a), (b),
(c) or (d) if the name of the Association or such other Participating
Company were substituted for the words "Holding Company" therein.
In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Holding Company, the
Association or any Participating Company, or any subsidiary of any of them, by
the Holding Company, the Association or any Participating Company, or any
subsidiary of any of them, or by any employee benefit plan maintained by any of
them. For purposes of this section 5.1 the term "person" shall have the meaning
assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
Section 5.2 Participants' Options upon a Change of Control
In the event of Change of Control, the Memorandum Account maintained
for a Participant shall continue to be held by the Administrator and distributed
in accordance with the terms of the Plan; provided, however, that the
Participant may, no later than sixty (60) days after the occurrence of the
Change of Control:
(a) cause the Participating Companies or their respective successors
to place in a trust fund with a trustee selected by the Participant an
amount equal to the balance credited to his Memorandum Account, plus any
additional Fees thereafter deferred, to be invested for the account of the
Participant, in which case payments shall continue to be made at the time
or times determined under the Plan and the balance credited to the
Memorandum Account shall at all times thereafter be equal to the balance
held in such trust fund; or
(b) cause the Participating Companies or their respective successors
to purchase and hold an annuity contract issued by an insurance company
selected by the Participant, the terms of which provide the same or
substantially similar benefits as he would have received under the Plan if
the Participant had terminated service as a Director as of the date of
purchase of such annuity contract; provided, however, that the premium cost
of such annuity contract shall not exceed the balance in the Memorandum
Account.
Actions taken pursuant to this section 5.2 shall be taken in such manner as to
avoid causing the Participant to be in constructive receipt of income under the
Plan prior to the actual payment of benefits. The Participating Companies shall
pay all taxes, trustees' fees and other administrative charges or expenses
associated with the establishment or continuance of such a trust fund or
purchase of such an annuity contract.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Notice and Election.
The Administrator shall provide a copy of this Plan and the
resolutions of adoption to each Director together with a form on which the
Director may notify the Administrator of his election whether to become a
Participant, which letter, if he so elects, he may complete, sign and return to
the Administrator.
Section 6.2 Construction and Language.
Wherever appropriate in the Plan, words used in the singular may be
read in the plural, words in the plural may be read in the singular, and words
importing the masculine gender shall be deemed equally to refer to the feminine
or the neuter. Any reference to an Article or section shall be to an Article or
section of the Plan, unless otherwise indicated.
Section 6.3 Headings.
The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Agreement, the text shall control.
Section 6.4 Non-Alienation of Benefits.
The right to receive a benefit under the Plan shall not be subject in
any manner to anticipation, alienation or assignment, nor shall rights be liable
for or subject to debts, contracts, liabilities or torts.
Section 6.5 Indemnification.
Each Participating Company shall indemnify, hold harmless and defend
its Directors and Participants, and the beneficiaries of each, against their
reasonable costs, including legal fees, incurred by them or arising out of any
action, suit or proceeding in which they may be involved, as a result of their
efforts, in good faith, to defend or enforce terms of the Plan.
Section 6.6 Severability.
A determination that any provision of the Plan is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
Section 6.7 Waiver.
Failure to insist upon strict compliance with any of the terms,
covenants or conditions of the Plan shall not be deemed a waiver of such term,
covenant or condition. A waiver of any provision of the Plan must be made in
writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
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Section 6.8 Governing Law.
The Plan shall be construed, administered and enforced according to
the laws of the State of New York without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by the
federal laws of the United States. Any payments made pursuant to this Plan are
subject to and conditioned upon their compliance with 12 U.S.C. 'SS' 1828(k)
and any regulations promulgated thereunder.
Section 6.9 Taxes.
Each Participating Company shall have the right to retain a sufficient
portion of any payment made under the Plan to cover the amount required to be
withheld pursuant to any applicable federal, state and local tax law.
Section 6.10 No Deposit Account.
Nothing in this Plan shall be held or construed to establish any
deposit account for any Participant or any deposit liability on the part of the
Association or any other financial institution which is a Participating Company.
Participants' rights hereunder shall be equivalent to those of a general
unsecured creditor.