Exhibit 10(p)
ESB financial corporation
DIRECTOR RETIREMENT AGREEMENT
THIS AGREEMENT is made this ___ day of _______, 2002, by and between ESB
Financial Corporation, located in Ellwood City, Pennsylvania ("ESB Financial"),
ESB Bank, F.S.B., a wholly-owned subsidiary of ESB Financial, also located in
Ellwood City, Pennsylvania (the "Bank"), and *NAME** (the "Director"), intending
to be legally bound hereby. ESB Financial and the Bank are collectively referred
to herein as the "Corporation."
INTRODUCTION
To help attract and retain quality Board members and to promote orderly
succession of the Board, the Corporation is willing to provide retirement
benefits to the Director. The Corporation will pay the retirement benefits from
its general assets according to the terms of this Agreement. Such benefits will
be paid by ESB Financial or the Bank, as applicable, based on where the fees
were earned by the Director.
AGREEMENT
The Director and the Corporation agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
1.1 "Base Board Fees" means the regular monthly Bank and ESB Financial
board fees and does not include committee fees, advisory board fees, liaison
fees or other income that might be received by the Director.
1.2 "Change in Control of the Corporation" means a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended ("Exchange Act"), or any successor thereto, whether or not the
Corporation is registered under the Exchange Act; provided that, without
limitation, such a change in control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing 25% or more of the combined voting power of the Corporation's then
outstanding securities; or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board
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of Directors of the Corporation cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Early Termination" means the Director has met the eligibility
requirements described in Article 2 but terminates service before Normal
Retirement Age for any reason other than following a Change in Control.
1.5 "Early Termination Date" means the month, day and year in which Early
Termination occurs.
1.6 "Effective Date" means December 1st, 2002.
1.7 "Normal Retirement Age" means the Director's 75th birthday.
1.8 "Plan Year" means the calendar year. In the year of inception, the
Plan Year commences on the Effective Date of this Agreement and ends on December
31st of the same year.
1.9 "Termination for Cause" has the meaning set forth in Section 6.2.
1.10 "Termination of Service" means that the Director ceases to be a member
of the Board of the Bank or ESB Financial for any reason other than by reason of
a leave of absence which is approved by the Corporation. For purposes of this
Agreement, if there is a dispute over the service status of the Director or the
date of the Director's Termination of Service, the Corporation shall have the
sole and absolute right to decide the dispute.
1.11 "Years of Service" means the total number of continuous years of
service as a Director of the Bank or ESB Financial, inclusive of any approved
leaves of absences and service as a member of the Board of Directors of any bank
acquired by the Bank or ESB Financial; provided, however, that a year of service
as a director of both the Bank and ESB Financial concurrently shall only count
as one year of service.
ARTICLE 2
ELIGIBILITY TO PARTICIPATE
To be entitled to any benefit under this retirement plan, the Director must
have a minimum of 5 years of service as a director of the Bank or ESB Financial
(as opposed to service as a director of any bank acquired by the Bank or ESB
Financial) and a minimum of 10 total Years of service.
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ARTICLE 3
RETIREMENT BENEFITS
3.1 Annual Normal Retirement Benefit. If the Director remains in
continuous service as a member of the Board of the Bank or ESB Financial from
the Effective Date of this Agreement until Normal Retirement Age, the
Corporation shall pay to the Director the benefit described in this Section 3.1
in lieu of any other benefit under this Agreement.
3.1.1 Amount of Benefit. The Annual Normal Retirement Benefit under
this Section 3.1 will be determined using the following formula:
The Director's Base Board Fees earned during the last full
calendar year prior to his retirement date, multiplied by a ratio ranging
from 25% to 50% based on the Director's total Years of Service as follows:
Years of Service Retirement Percentage
---------------- ---------------------
10 25.0%
11 27.5%
12 30.0%
13 32.5%
14 35.0%
15 37.5%
16 40.0%
17 42.5%
18 45.0%
19 47.5%
20 or more 50.0%
3.1.2 Payment of Benefit. The Corporation shall pay the annual
benefit to the Director in equal monthly installments on the first day of
each month commencing with the month following the Director's Termination of
Service and continuing for the 59 months that follow.
3.2 Early Termination Benefit. Upon Early Termination, the Corporation
shall pay to the Director the benefit described in this Section 3.2 in lieu of
any other benefit under this Agreement.
3.2.1 Amount of Benefit. The benefit under this Section 3.2 is the
Early Termination Annual Benefit set forth in Schedule A for the Plan Year
ended immediately 3
prior to the Early Termination Date.
3.2.2 Payment of Benefit. The Corporation shall pay the benefit to
the Director (or his beneficiary if Termination of Service was due to
death)in a lump sum payment within 60 days of the Director's Early
Termination Date.
3.3 Change in Control Annual Benefit. If the Director is in the active
service of the Corporation at the time of a Change in Control, and does not
resign his service with the Corporation prior to the consummation of the
transaction which constitutes the Change in Control, the Corporation shall pay
to the Director the benefit described in this Section 3.3 in lieu of any other
benefit under this Agreement.
3.3.1 Amount of Benefit. The annual benefit under this Section 3.3
is the Director's Base Board Fees earned during the last full calendar year
prior to consummation of the Change in Control multiplied by 50%.
3.3.2 Payment of Benefit. The Corporation shall pay the annual
benefit to the Director in equal monthly installments commencing on the
first day of the month following consummation of the Change in Control and
continuing for the 59 months that follow.
ARTICLE 4
DEATH BENEFITS
4.1 Death During Benefit Period. If the Director dies after the benefit
payments have commenced under this Agreement but before receiving all such
payments, the Corporation shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
4.2 Death Before Benefit Payments Commence. If the Director is entitled to
benefit payments under this Agreement, but dies prior to the commencement of
said benefit payments, the Corporation shall pay the benefit payments to the
Director's beneficiary that the Director was entitled to prior to death except
that the benefit payments shall commence on the first day of the month following
the date of the Director's death.
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ARTICLE 5
BENEFICIARIES
5.1 Beneficiary Designations. The Director shall designate a beneficiary
by filing a written designation with the Corporation. The Director may revoke or
modify the designation at any time by filing a new designation. However,
designations and revocations or modifications of designations shall only be
effective if they are filed with the Corporation as a written document, signed
by the Director and accepted by the Corporation during the Director's lifetime.
The Director's beneficiary designation shall be deemed automatically revoked if
the beneficiary predeceases the Director, or if the Director names a spouse as
beneficiary and the marriage is subsequently dissolved. If the Director dies
without a valid beneficiary designation, all payments shall be made to the
Director's estate.
5.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Corporation may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person or incapable person. The Corporation may require proof of incapacity,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Corporation from all
liability with respect to such benefit.
ARTICLE 6
GENERAL LIMITATIONS
6.1 Excess Parachute or Golden Parachute Payment. Notwithstanding any
provision of this Agreement to the contrary, the Corporation shall not pay any
benefit under this Agreement to the extent the benefit would be a parachute
payment under Section 280G of the Code or would be a prohibited golden parachute
payment pursuant to 12 C.F.R. Section. 359.2 and for which the appropriate
federal banking agency has not given written consent to pay pursuant to 12
C.F.R. Section. 359.4.
6.2 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Corporation shall not pay any benefit under this Agreement
if the Corporation terminates the Director's service for:
6.2.1 Gross negligence or gross neglect of duties;
6.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude; or
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6.2.3 Fraud, disloyalty, dishonesty or willful violation of any law
or significant Corporation policy committed in connection with the
Director's service and resulting in an adverse effect on the Corporation.
6.3 Removal. Notwithstanding any provision of this Agreement to the
contrary, the Corporation shall not pay any benefit under this Agreement if the
Director is subject to a final removal or prohibition order issued by an
appropriate federal banking agency pursuant to Section 8(e) of the Federal
Deposit Insurance Act.
ARTICLE 7
CLAIMS AND REVIEW PROCEDURES
7.1 Claims Procedure. A Director or beneficiary ("claimant") who
has not received benefits under the Agreement that he or she believes should be
paid shall make a claim for such benefits as follows:
7.1.1 Initiation - Written Claim. The claimant initiates a claim by
submitting to the Bank a written claim for the benefits.
7.1.2 Timing of Bank Response. The Bank shall respond to such
claimant within 90 days after receiving the claim. If the Bank determines
that special circumstances require additional time for processing the
claim, the Bank can extend the response period by an additional 90 days by
notifying the claimant in writing, prior to the end of the initial 90-day
period, that an additional period is required. The notice of extension must
set forth the special circumstances and the date by which the Bank expects
to render its decision.
7.1.3 Notice of Decision. If the Bank denies part or all of the
claim, the Bank shall notify the claimant in writing of such denial. The
Bank shall write the notification in a manner calculated to be understood
by the claimant. The notification shall set forth:
7.1.3.1 The specific reasons for the denial,
7.1.3.2 A reference to the specific provisions of the
Agreement on which the denial is based,
7.1.3.3 A description of any additional information or
material necessary for the claimant to perfect the claim and an
explanation of why it is needed,
7.1.3.4 An explanation of the Agreement's review
procedures and the time limits applicable to such procedures, and
7.1.3.5 A statement of the claimant's right to bring a civil
action under ERISA Section 502(a) following an adverse benefit
determination on review.
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7.2 Review Procedure. If the Bank denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Bank
of the denial, as follows:
7.2.1 Initiation - Written Request. To initiate the review, the
claimant, within 60 days after receiving the Bank's notice of denial, must
file with the Bank a written request for review.
7.2.2 Additional Submissions - Information Access. The claimant
shall then have the opportunity to submit written comments, documents,
records and other information relating to the claim. The Bank shall also
provide the claimant, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the claimant's claim for
benefits.
7.2.3 Considerations on Review. In considering the review, the
Bank shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination.
7.2.4 Timing of Bank Response. The Bank shall respond in writing
to such claimant within 60 days after receiving the request for review. If
the Bank determines that special circumstances require additional time for
processing the claim, the Bank can extend the response period by an
additional 60 days by notifying the claimant in writing, prior to the end
of the initial 60-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date
by which the Bank expects to render its decision.
7.2.5 Notice of Decision. The Bank shall notify the claimant in
writing of its decision on review. The Bank shall write the notification in
a manner calculated to be understood by the claimant. The notification
shall set forth:
7.2.5.1 The specific reasons for the denial,
7.2.5.2 A reference to the specific provisions of the
Agreement on which the denial is based,
7.2.5.3 A statement that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to
the claimant's claim for benefits, and
7.2.5.4 A statement of the claimant's right to bring a civil
action under ERISA Section 502(a).
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ARTICLE 8
AMENDMENT AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Corporation and the Director, except as provided in Article 6.
Article 9
Miscellaneous
9.1 Binding Effect. This Agreement shall bind the Director and
the Corporation, and their successors, beneficiaries, survivors, executors,
administrators and transferees.
9.2 No Guarantee of Service. This Agreement is not a service policy
or contract. It does not give the Director the right to remain a member of the
Board of Directors of the Corporation, nor does it interfere with the
Corporation's right to terminate the Director's service. It also does not
require the Director to remain a Board member nor interfere with the Director's
right to terminate service at any time.
9.3 Non-Transferability. Benefits under this Agreement cannot
be sold, transferred, assigned, pledged, attached or encumbered in any manner.
9.4 Tax Withholding. The Corporation shall withhold any taxes
that are required to be withheld from the benefits provided under this
Agreement.
9.5 Applicable Law. The Agreement and all rights hereunder
shall be governed by the laws of the Commonwealth of Pennsylvania, except to the
extent preempted by the laws of the United States of America.
9.6 Reorganization. The Corporation shall not merge or consolidate
into or with another company, or reorganize, or sell substantially all of its
assets to another company, firm or person unless such succeeding or continuing
company, firm or person agrees to assume and discharge the obligations of the
Corporation under this Agreement.
9.7 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Corporation for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Corporation to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Corporation to which the Director and beneficiary have no
preferred or secured claim.
9.8 Entire Agreement. This Agreement constitutes the entire
agreement between the Corporation and the Director as to the subject matter
hereof. No rights are granted to the
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Director by virtue of this Agreement other than those specifically set forth
herein.
9.9 Administration. The Corporation shall have powers which are
necessary to administer this Agreement, including but not limited to:
9.9.1 Interpreting the provisions of the Agreement;
9.9.2 Establishing and revising the method of accounting for the
Agreement;
9.9.3 Maintaining a record of benefit payments; and 9.9.4
Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.
IN WITNESS WHEREOF, the Director and a duly authorized officer of ESB Bank,
F.S.B. have signed this Agreement.
DIRECTOR: BANK:
ESB Bank, F.S.B.
By
- --------------------------------- -------------------------------------
*Name**
Title
-----------------------------
By execution hereof, ESB Financial Corporation consents to and agrees to be
bound by the terms and conditions of this Agreement.
ATTEST: CORPORATION:
ESB Financial Corporation
By
- --------------------------------- -------------------------------------
Title
-----------------------------
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BENEFICIARY DESIGNATION
ESB financial corporation
DIRECTOR RETIREMENT AGREEMENT
[Name]
I designate the following as beneficiary of any death benefits under the ESB
Financial Corporation Director Retirement Agreement:
Primary: ______________________________________________________________________
________________________________________________________________________________
Contingent: ___________________________________________________________________
________________________________________________________________________________
Note: To name a trust as beneficiary, please provide the name of the
Trustee(s) and the exact name and date of the trust agreement.
I understand that I may change these beneficiary designations by filing a new
written designation with the Corporation. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me,
or, if I have named my spouse as beneficiary, in the event of the dissolution of
our marriage.
Signature
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Date
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Accepted by the Corporation this ______ day of _________________, 2002.
By
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Title
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