EXHIBIT 10.5
INVESTORS SAVINGS BANK
EXECUTIVE SUPPLEMENTAL RETIREMENT
WAGE REPLACEMENT PLAN
SHORT HILLS, NEW JERSEY
JULY 1, 2005
EXECUTIVE SUPPLEMENTAL RETIREMENT WAGE REPLACEMENT PLAN
This Executive Supplemental Retirement Wage Replacement Plan (the "Plan"),
effective as of the 1st day of July, 2005, formalizes the agreements by and
between INVESTORS SAVINGS BANK (the "Bank"), a New Jersey chartered stock
savings bank, and certain key employees, hereinafter referred to as
"Executive(s)", who have been selected to participate in this Plan. INVESTORS
BANCORP, INC., a Delaware chartered corporation (the "Company") is a party to
this Plan for the sole purpose of guaranteeing the Bank's performance hereunder.
WITNESSETH:
WHEREAS, the Bank wishes to sponsor a plan of deferred compensation for a
select group of management and highly compensated employees as such term is
defined in the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); and
WHEREAS, the Executives eligible to participate in the plan shall at no
time be less than two (2) nor exceed the number of persons who would be deemed
to be named executive officers within the meaning of the Securities Exchange Act
of 1934 if the Bank or the Company were publicly traded entities; and
WHEREAS, the Bank recognizes the valuable services heretofore performed
for it by such Executives and wishes to encourage their continued employment and
to provide them with additional incentive to achieve corporate objectives; and
WHEREAS, the Bank wishes to provide the terms and conditions upon which
the Bank shall pay additional retirement benefits to the Executives; and
WHEREAS, the Bank intends this Plan to be considered an unfunded
arrangement, maintained primarily to provide supplemental retirement income for
its Executives, members of a select group of management or highly compensated
employees of the Bank, for tax purposes and for purposes of ERISA; and
WHEREAS, the Bank has adopted this Plan which controls all issues relating
to Supplemental Retirement Benefits as described herein.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
SECTION I
DEFINITIONS
When used herein, the following words shall have the meanings below unless
the context clearly indicates otherwise:
1.1. "Actuarial Assumptions" shall mean, with respect to any form of
benefit, the Actuarial Assumptions set forth on Schedule A attached hereto and
made a part hereof.
1.2. "Annual Compensation" shall mean a Participant's salary and bonus
during any consecutive twelve (12) month period, including amounts deferred at a
Participant's election to any tax-qualified or non-qualified employee benefit
plan.
1.3. "Average Annual Compensation" shall mean the average Annual
Compensation over the thirty-six (36) consecutive month period out of the last
one hundred twenty (120) consecutive calendar months in which the Participant's
Annual Compensation was the greatest, or over all calendar months, if less than
thirty-six.
1.4. "Bank" means INVESTORS SAVINGS BANK and any successor thereto.
1.5. "Beneficiary" means the person or persons designated by a
Participant, in writing, as beneficiary to whom the share of a deceased
Participant's account is payable. If no Beneficiary is so designated, then the
Participant's Spouse, if living, will be deemed the Beneficiary. If
Participant's Spouse is not living, then the Children of Participant will be
deemed the Beneficiary. If there are no living Children, then the Estate of
Participant will be deemed the Beneficiary.
1.6. "Cause" shall exist when there has been a good faith determination by
the Board that there shall have occurred one or more of the following events
with respect to the Executive: (i) the conviction of the Executive of a felony
or of any lesser criminal offense involving moral turpitude; (ii) the willful
commission by the Executive of a criminal or other act that, in the judgment of
the Board will likely cause substantial economic damage to the Company or the
Bank or substantial injury to the business reputation of the Company or Bank;
(iii) the commission by the Executive of an act of fraud in the performance of
his duties on behalf of the Company or Bank; (iv) the continuing willful failure
of the Executive to perform his duties to the Company or Bank (other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness) after written notice thereof (specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard and cure such
failure are given to the Executive by the Board; or (v) an order of a federal or
state regulatory agency or a court of competent jurisdiction requiring the
termination of the Executive's employment by the Company.
1.7. "Change in Control" shall mean (i) a change in ownership of the Bank
under paragraph (a) below, or (ii) a change in effective control of the Bank
under paragraph (b) below, or (iii) a change in the ownership of a substantial
portion of the assets of the Bank under paragraph (c) below:
(a) CHANGE IN THE OWNERSHIP OF THE BANK. A change in the ownership
of the
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Bank shall occur on the date that any one person, or more than
one person acting as a group (as defined in paragraph (b)),
acquires ownership of stock of the corporation that, together
with stock held by such person or group, constitutes more than
50 percent of the total fair market value or total voting
power of the stock of such corporation. However, if any one
person or more than one person acting as a group, is
considered to own more than 50 percent of the total fair
market value or total voting power of the stock of a
corporation, the acquisition of additional stock by the same
person or persons is not considered to cause a change in the
ownership of the corporation (or to cause a change in the
effective control of the corporation (within the meaning of
paragraph (b) below). An increase in the percentage of stock
owned by any one person, or persons acting as a group, as a
result of a transaction in which the corporation acquires its
stock in exchange for property will be treated as an
acquisition of stock for purposes of this section. This
paragraph (a) applies only when there is a transfer of stock
of a corporation (or issuance of stock of a corporation) and
stock in such corporation remains outstanding after the
transaction.
(b) CHANGE IN THE EFFECTIVE CONTROL OF THE BANK. A change in the
effective control of the Bank shall occur on the date that
either (i) any one person, or more than one person acting as a
group (as determined below), acquires (or has acquired during
the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of
the corporation possessing 35 percent or more of the total
voting power of the stock of such corporation; or (ii) a
majority of members of the corporation's board of directors is
replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the
members of the corporation's board of directors prior to the
date of the appointment or election, provided that for
purposes of this paragraph (b)(ii), the term corporation
refers solely to a corporation for which no other corporation
is a majority shareholder. In the absence of an event
described in paragraph (i) or (ii), a change in the effective
control of a corporation will not have occurred. If any one
person, or more than one person acting as a group, is
considered to effectively control a corporation (within the
meaning of this paragraph (b)), the acquisition of additional
control of the corporation by the same person or persons is
not considered to cause a change in the effective control of
the corporation (or to cause a change in the ownership of the
corporation within the meaning of paragraph (a)). Persons will
not be considered to be acting as a group solely because they
purchase or own stock of the same corporation at the same
time, or as a result of the same public offering.
(c) CHANGE IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE BANK'S
ASSETS. A change in the ownership of a substantial portion of
the Bank's assets shall occur on the date that any one person,
or more than one person acting as a group (as determined
below), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such
person or
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persons) assets from the corporation that have a total gross
fair market value equal to or more than 40% of the total gross
fair market value of all of the assets of the corporation
immediately prior to such acquisition or acquisitions. For
this purpose, gross fair market value means the value of the
assets of the corporation, or the value of the assets being
disposed of, determined without regard to any liabilities
associated with such assets. There is no Change in Control
event under this paragraph (c) when there is a transfer to an
entity that is controlled by the shareholders of the
transferring corporation immediately after the transfer.
(d) Each of the sub-paragraphs (a) through (c) above shall be
construed and interpreted consistent with the requirements of
Code Section 409A and any Treasury regulations or other
guidance issued thereunder.
1.8. "Children" means Participant's children, both natural and adopted,
then living at the time payments are due the Children under this Plan.
1.9. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.10. "Company" means Investors Bancorp, Inc., a Delaware chartered
corporation which owns all of the issued and outstanding stock of the Bank.
1.11. "Disability Retirement Benefit" the benefit available to a
Participant who terminates employment on account of Total and Permanent
Disability. The Disability Retirement Benefit is payable at age 65 and is
calculated on the basis that during the period from the Disability Retirement
Date to age 65 the Participant would have continued to earn Annual Compensation
at the same rate as in effect prior to the Total and Permanent Disability.
1.12. "Disability Retirement Date" shall mean the date that a
Participant's employment is terminated due to Total and Permanent Disability.
1.13. "Distribution Option" shall mean any of the following: (i) a life
annuity; (ii) a life annuity with 120 monthly payments guaranteed; (iii) a joint
and 100% survivor annuity (with 120 payments guaranteed); (iv) a joint and 50%
survivor annuity, and (v) a single sum distribution.
1.14. "Early Retirement Benefit" means a retirement benefit payable upon
the Participant's retirement or other termination of employment (other than due
to Disability or following a Change in Control) after a Participant's Early
Retirement Date (but prior to the Normal Retirement Date) in the form of a life
annuity with 120 monthly payments guaranteed, unless the Participant elects an
alternative Distribution Option in his or her Joinder Agreement. If a
Participant has a vested benefit under the Plan and terminates employment prior
to the Participant's Normal Retirement Date, the Participant will be entitled to
a reduced Supplemental Retirement Benefit, referred to as an Early Retirement
Benefit, commencing on his or her Early Retirement Date if the Participant has
elected in his or her Joinder Agreement to receive an Early Retirement Benefit.
If the Participant terminates employment prior to the Normal Retirement Date
with 120 months of employment, the Supplemental Retirement Benefit payable will
be reduced by 2% for each full year that a Participant terminates employment
prior to age 65, provided, however, that if the Participant has 25 years of
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employment with the Bank, the Participant's benefit will be unreduced. The Early
Retirement Benefit shall be paid in the form of a life annuity with 120 monthly
payments guaranteed, unless the Participant elects an alternative Distribution
Option in his or her Joinder Agreement. Notwithstanding anything to the contrary
herein, if the Participant elects an alternative Distribution Option, the
alternative Distribution Option shall be the actuarial equivalent of the accrued
benefit paid in the form of a life annuity with 120 monthly payments guaranteed
and the reductions taken under "(i)" and "(ii)" shall each be stated in the same
form as the Distribution Option elected by the Participant and shall be the
actuarial equivalent of a life annuity with 120 monthly payments guaranteed.
1.15. "Early Retirement Date" means the first day of the month coincident
with or next following a Participant's attainment of age 55, provided the
Participant has a nonforfeitable right to all or a portion of the Supplemental
Retirement Benefit. A Participant shall not be entitled to an Early Retirement
Benefit on or after his Early Retirement Date unless the Participant has
actually terminated employment.
1.16. "Effective Date" shall be July 1, 2005.
1.17. "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.18. "Estate" means the Estate of a Participant.
1.19. "Executive" shall mean a senior executive officer of the Bank.
1.20. "Interest Factor" means six percent (6%) or such other rate as is
reasonably determined by the Board of Directors of the Bank ("Board") from time
to time.
1.21. "Joinder Agreement" means the agreement executed by the Participant
upon initial participation in the Plan that sets forth the terms of the
participation and payment of the Supplemental Retirement Benefit.
1.22. "MHC" means Investors Bancorp, MHC, a New Jersey chartered mutual
holding company which owns all or a majority of the issued and outstanding stock
of the Company.
1.23. "Normal Retirement Benefit" means a retirement benefit payable on or
after the Normal Retirement Date in the form of a life annuity with 120 monthly
payments guaranteed, unless the Participant elects an alternative Distribution
Option in his or her Joinder Agreement. The Normal Retirement Benefit shall be
equal to (a) sixty percent (60%) times (b) the Participant's Average Annual
Compensation reduced by the annuitized value (calculated using the Actuarial
Assumptions) of the annual benefit payable under (i) the Bank's tax-qualified
defined benefit pension plan, and (ii) the defined benefit portion of the
Supplemental Retirement Plan I, in each case, in the same form as the
Distribution Option elected by Participant. Notwithstanding any thing to the
contrary herein, if the Participant elects an alternative Distribution Option,
the alternative Distribution Option shall be the actuarial equivalent of the
accrued benefit paid in the form of a life annuity with 120 monthly payments
guaranteed and the reductions taken under "(i)" and "(ii)" shall each be stated
in the same form as the Distribution Option elected by the Participant and shall
be the actuarial equivalent of a life annuity with 120 monthly payments
guaranteed. In the event that the
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Participant has less than 120 months of cumulative service upon retirement on or
after the Normal Retirement Date, the Participant's benefit shall be reduced by
1/120th for each month of employment less than 120 months. In the event that a
Participant actually retires later than the Normal Retirement Date, the
Participant's Normal Retirement Benefit shall be increased by 0.8% for each
month of deferment after age 65.
1.24. "Normal Retirement Date" means the first day of the month coincident
with or next following a Participant's sixty-fifth (65th) birthday.
1.25. "Participant" shall mean an Executive who has been selected to
participate in the Plan.
1.26. "Specified Employee" means with respect to a publicly traded
company, an employee of the Bank or Company who is also a "key employee" as such
term is defined in Section 416(i) of the Code, without regard to Paragraph 5
thereof.
1.27. "Spouse" means the individual to whom Participant is legally married
at the time of Participant's death.
1.28. "Supplemental Retirement Benefit" means the benefit due to the
Participant following termination of employment on or after the Early Retirement
Date, the Normal Retirement Date or due to the Participant's Total and Permanent
Disability. A Supplemental Retirement Benefit may be an Early Retirement
Benefit, a Normal Retirement Benefit or a Disability Retirement Benefit.
1.29. "Supplemental Retirement Plan I" shall mean the Amended and Restated
Supplemental ESOP and Retirement Plan.
1.30. "Survivor's Benefit" means the benefit provided under Section 4.1 to
Participant's Beneficiary if Participant dies while in active employment of the
Bank. The Survivor's Benefit shall be equal in amount to the Supplemental
Retirement Benefit payable to Participant if Participant had lived until his
Normal Retirement Date, terminated employment on such date and commenced
receiving the Supplemental Retirement Benefit at that time. In addition, for
purposes of these calculations, Participant's Average Annual Compensation
(including both base salary and bonus) shall be deemed to increase at the rate
of five percent (5%) per year to age 65 at the customary time of such normal
annual increase.
1.31. "Total and Permanent Disability" shall mean total and permanent
disability within the meaning of the Social Security Act.
SECTION II
ELIGIBILITY
Participation shall be limited to those persons selected by the Board from
among the category of persons who are eligible.
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SECTION III
SUPPLEMENTAL RETIREMENT BENEFITS
3.1. Normal Retirement Benefit. Upon Participant's retirement coincident
with or following his Normal Retirement Date, the Bank shall commence payments
of the Normal Retirement Benefit. Such payments shall commence the first day of
the month next following Participant's actual retirement date or in the event
Participant is a Specified Employee and the following is required by Code
Section 409A, the Normal Retirement Benefit shall commence within thirty (30)
days following the six month anniversary of Participant's actual retirement, and
shall be payable in accordance with the Distribution Option set forth in
Participant's Joinder Agreement.
3.2. Early Retirement Benefit. Participant shall have the elective right
to receive an Early Retirement Benefit, provided he shall terminate employment
prior to the Normal Retirement Date and shall have a nonforfeitable interest in
the Plan. Such election, if made, shall be made prior to the last day of
December, 2005, with respect to Participants who commence participation in 2005,
and within thirty (30) days of participation, with respect to Participants who
initially participate after December 2005. This election will only be effective
if a Participant actually terminates employment prior to the Normal Retirement
Date for reasons other than Total and Permanent Disability, death or a Change in
Control. In the event a Participant elects an Early Retirement Benefit, payment
of the Early Retirement Benefit shall commence within thirty (30) days after the
Participant's Early Retirement Date or in the event the Participant is a
Specified Employee and the following is required by Code Section 409A, the Early
Retirement Benefit shall commence within thirty (30) days after the six month
anniversary of Participant's Early Retirement Date, and shall be payable in
accordance with the Distribution Option set forth in Participant's Joinder
Agreement. For a Participant who terminates employment and commences receipt of
an Early Retirement Benefit on or after the Early Retirement Date, the accrued
benefit payable at age 65 is reduced by 2% for each year by which his Early
Retirement Date precedes his Normal Retirement Date, provided, however, if the
Participant has completed 25 years of employment prior to termination, the
accrued benefit will be unreduced at the Early Retirement Date.
3.3. Disability. If Participant becomes Totally and Permanently Disabled
prior to reaching his Normal Retirement Date, while covered by the provisions of
this Plan, the Participant shall be entitled to a Disability Retirement Benefit
commencing within thirty (30) days after the Participant's Normal Retirement
Date.
The Disability Retirement Benefit shall be payable in accordance with the
Distribution Option set forth in Participant's Joinder Agreement for
distribution of the Normal Retirement Benefit. In the event Participant dies at
any time after termination of employment due to Total and Permanent Disability
but prior to commencement of the Participant's Disability Retirement Benefit,
the Bank shall pay the Survivor's Benefit to the Participant's Beneficiary. In
the event the Participant dies after commencement of the Participant's
Disability Retirement Benefit, the Bank shall pay the remainder of the payments
then due to the Participant under the Disability Retirement Benefit.
3.4. Change in Control. In the event of Participant's termination of
employment coincident with or within three (3) years following a Change in
Control, other than due to
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termination for Cause, the Participant shall be entitled to receive a
Supplemental Retirement Benefit calculated as either an Early Retirement Benefit
or a Normal Retirement Benefit, as applicable. For these purposes, each
Participant with less than 120 months of continuous employment will be deemed to
have at least 120 months of continuous employment and, if the Participant has
not yet attained age 55, shall be deemed to have attained age 55. The
Supplemental Retirement Benefit payable to a Participant in the event of
termination of employment in connection with or following a Change in Control
shall be paid in a single sum within thirty (30) days after the Participant's
termination of employment or in the event the Participant is a Specified
Employee and the following is required by Code Section 409A, the Supplemental
Retirement Benefit shall commence within thirty (30) days after the six month
anniversary of Participant's termination of employment.
SECTION IV
PRE RETIREMENT AND POST RETIREMENT DEATH BENEFITS
4.1. Death Prior to Termination of Employment. If Participant dies prior
to termination of employment with the Bank or after termination of employment
with the Bank but prior to the payment of any portion of the Supplemental
Retirement Benefit, Participant's Beneficiary shall be entitled to the
Survivor's Benefit. Such benefit shall be paid in the form elected by the
Participant in the Participant's Joinder Agreement for benefits payable at the
Normal Retirement Date. The Survivor's Benefit shall begin within thirty (30)
days after the Bank is notified of the date of death of Participant.
4.2. Death Subsequent to Retirement. In the event of the death of
Participant while receiving monthly benefits under this Plan, but prior to
receiving the entire Supplemental Retirement Benefit, then the unpaid balance of
such monthly payments shall continue to be paid monthly to Participant's
Beneficiary until all such payments have been made.
SECTION V
PARTICIPANT'S RIGHT TO ASSETS
The rights of Participant, any Beneficiary of Participant, or any other
person claiming through Participant under this Plan, shall be solely those of an
unsecured general creditor of the Bank. Participant, the Beneficiary of
Participant, or any other person claiming through Participant, shall only have
the right to receive from the Bank those payments as specified under this Plan.
Participant agrees that he, his Beneficiary, or any other person claiming
through him shall have no rights or interests whatsoever in any asset of the
Bank, including any insurance policies or contracts which the Bank may possess
or obtain to informally fund this Plan. Any asset used or acquired by the Bank
in connection with the liabilities it has assumed under this Plan, except as
expressly provided, shall not be deemed to be held under any trust for the
benefit of Participant or his Beneficiaries, nor shall it be considered security
for the performance of the obligations of the Bank. It shall be, and remain, a
general, unpledged, and unrestricted asset of the Bank.
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SECTION VI
RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust any
fund or money with which to pay its obligations under this Plan. Participant,
his Beneficiaries or any successor in interest to him shall be and remain simply
a general creditor of the Bank in the same manner as any other creditor having a
general claim for matured and unpaid compensation. The Bank reserves the
absolute right, at its sole discretion, to either fund the obligations
undertaken by this Plan or to refrain from funding the same and to determine the
extent, nature, and method of such informal funding. Should the Bank elect to
fund this Plan, in whole or in part, through the purchase of life insurance,
disability policies or annuities, the Bank reserves the absolute right, in its
sole discretion, to terminate such funding at any time, in whole or in part. At
no time shall Participant be deemed to have any lien nor right, title or
interest in or to any specific funding investment or to any assets of the Bank.
If the Bank elects to invest in a life insurance, disability or annuity policy
upon the life of Participant, then Participant shall assist the Bank by freely
submitting to a physical examination and supplying such additional information
necessary to obtain such insurance or annuities.
SECTION VII
ALIENABILITY AND ASSIGNMENT PROHIBITION
No Participant nor any Beneficiary under this Plan shall have any power or
right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber in advance any of the benefits payable hereunder, nor shall
any of said benefits be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance owed by Participant or his
Beneficiary, nor be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event Participant or any Beneficiary attempts
assignment, communication, hypothecation, transfer or disposal of the benefits
hereunder, the Bank's liabilities shall forthwith cease and terminate.
SECTION VIII
TERMINATION OF EMPLOYMENT FOR CAUSE
Should a Participant be terminated for Cause, his or her benefits under
this Plan shall be forfeited and this Plan shall become null and void with
respect to such Participant.
SECTION IX
ACT PROVISIONS
9.1. Named Fiduciary And Administrator. The Bank shall be the Named
Fiduciary and Administrator of this Plan. As Administrator, the Bank shall be
responsible for the management, control and administration of the Plan as
established herein. The Administrator may delegate to others certain aspects of
the management and operational responsibilities of the Plan, including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
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9.2. Claims Procedure And Arbitration.
(a) In the event that benefits under this Plan are not paid to
Participant (or to his Beneficiary in the case of
Participant's death) and such claimants feel they are entitled
to receive such benefits, then a written claim must be made to
the Administrator named above within thirty (30) days from the
date payments are refused. The Administrator and its Board
shall review the written claim and, if the claim is denied, in
whole or in part, they shall provide in writing within thirty
(30) days of receipt of such claim their specific reasons for
such denial, reference to the provisions of this Plan upon
which the denial is based and any additional material or
information necessary to perfect the claim. Such written
notice shall further indicate the additional steps to be taken
by claimants if a further review of the claim denial is
desired.
(b) If claimants desire a second review, they shall notify the
Administrator in writing within thirty (30) days of the first
claim denial. Claimants may review the Plan or any documents
relating thereto and submit any issues, in writing, and
comments they may feel appropriate. In its sole discretion,
the Administrator shall then review the second claim and
provide a written decision within thirty (30) days of receipt
of such claim. This decision shall likewise state the specific
reasons for the decision and shall include reference to
specific provisions of the Plan upon which the decision is
based.
(c) If claimants continue to dispute the benefit denial based upon
completed performance hereunder or the meaning and effect of
the terms and conditions thereof, then claimants may submit
the dispute to mediation, administered by the American
Arbitration Association ("AAA") (or a mediator selected by the
parties) in accordance with the AAA's Commercial Mediation
Rules. If mediation is not successful in resolving the
dispute, it shall be settled by arbitration administered by
the AAA under its Commercial Arbitration Rules, and judgment
on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. If it is finally
determined that Participant (or his Beneficiary) is entitled
to the benefits set forth under this Plan, then all amounts
that Participant (or his Beneficiary) would have received up
to the time of such final determination shall be paid to
Participant (or his Beneficiary) with interest (calculated
using the Interest Factor) within thirty (30) days after such
final determination.
9.3. Where a dispute arises as to the Bank's discharge of Participant for
Cause, such dispute shall likewise be submitted to arbitration as above
described and the parties hereto agree to be bound by the decision thereunder.
9.4. All reasonable legal fees paid or incurred by Participant pursuant to
any dispute or questions of interpretation relating to this Plan shall be paid
or reimbursed by the Bank, provided that the dispute or interpretation has been
settled by Participant and the Bank or resolved in Participant's favor.
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SECTION X
MISCELLANEOUS
10.1. No Effect on Employment Rights. Nothing contained herein shall
confer upon Participant the right to be retained in the service of the Bank nor
limit the right of the Bank to discharge or otherwise deal with Participant
without regard to the existence of this Plan.
10.2. Disclosure. Participant shall receive a copy of his Plan and the
Administrator will make available, upon request, a copy of any rules and
regulations that govern this Plan.
10.3. Governing Law. The Plan is established under, and will be construed
according to, the laws of the State of New Jersey, to the extent that such laws
are not preempted by the Act and valid regulations published thereunder.
10.4. Severability. In the event that any of the provisions of this Plan
or portion thereof, are held to be inoperative or invalid by any court of
competent jurisdiction, then: (1) insofar as is reasonable, effect will be given
to the intent manifested in the provisions held invalid or inoperative, and (2)
the validity and enforceability of the remaining provisions will not be affected
thereby.
10.5. Incapacity of Recipient. In the event Participant is declared
incompetent and a conservator or other person legally charged with the care of
his person or of his estate is appointed, any benefits under the Plan to which
such Participant is entitled shall be paid to such conservator or other person
legally charged with the care of his person or his Estate. Except as provided
above in this paragraph, when the Bank's Board in its sole discretion,
determines that an Participant is unable to manage his financial affairs, the
Board may direct the Bank to make distributions to any person for the benefit of
such Participant.
10.6. Unclaimed Benefit. Participant shall keep the Bank informed of his
current address and the current address of his Beneficiaries. The Bank shall not
be obligated to search for the whereabouts of any person. If the location of
Participant is not made known to the Bank within three years after the date on
which any payment of Participant's Supplemental Retirement Benefit may be made,
payment may be made as though Participant had died at the end of the three-year
period. If, within one additional year after such three-year period has elapsed,
or, within three years after the actual death of Participant, the Bank is unable
to locate any Beneficiary of Participant, then the Bank may fully discharge its
obligation by payment to the Estate.
10.7. Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, neither the Bank, nor any individual acting as an
employee or agent of the Bank or as a member of the Board shall be liable to
Participant, former Participant, or any other person for any claim, loss,
liability or expense incurred in connection with the Plan.
10.8. Gender. Whenever, in this Plan, words are used in the masculine or
neuter gender, they shall be read and construed as in the masculine, feminine or
neuter gender, whenever they should so apply.
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10.9. Affect on Other Corporate Benefit Agreements. Nothing contained in
this Plan shall affect the right of Participant to participate in, or be covered
by, any qualified or non-qualified pension, profit sharing, group, bonus or
other supplemental compensation or fringe benefit agreement constituting a part
of the Bank's existing or future compensation structure.
10.10. Headings. Headings and sub-headings in this Plan are inserted for
reference and convenience only and shall not be deemed a part of this Plan.
10.11. Establishment of Rabbi Trust. The Bank may, but is not obligated
to, establish a rabbi trust into which the Bank may contribute assets which
shall be held therein, subject to the claims of the Bank's creditors in the
event of the Bank's "Insolvency" as defined in the agreement which establishes
such rabbi trust, until the contributed assets are paid to Participants and
their Beneficiaries in such manner and at such times as specified in this Plan.
In the event a rabbi trust is established, it is the intention of the Bank to
make contributions to the rabbi trust to provide the Bank with a source of funds
to assist it in meeting the liabilities of this Plan. The rabbi trust and any
assets held therein shall conform to the terms of the rabbi trust agreement
which has been established in conjunction with this Plan. To the extent the
language in this Plan is modified by the language in the rabbi trust agreement,
the rabbi trust agreement shall supersede this Plan. Any contributions to the
rabbi trust shall be made during each Plan Year in accordance with the rabbi
trust agreement. The amount of such contribution(s) shall be equal to the full
present value of all benefit accruals under this Plan, if any, less: (i)
previous contributions made on behalf of Participant to the rabbi trust, and
(ii) earnings to date on all such previous contributions.
10.12. Tax Withholding. The Bank may withhold from any benefit payable
under this Plan all federal, state, city, or other taxes as shall be required
pursuant to any law or governmental regulation then in effect.
10.13. Construction and Severability. This Plan is adopted following the
enactment of Code Section 409A and is intended to be construed consistent with
the requirements of that Section, the Treasury regulations and other guidance
issued thereunder. If any provision of the Plan shall be determined to be
inconsistent therewith for any reason, then the Plan shall be construed, to the
maximum extent possible, to give effect to such provision in a manner that is
consistent with Code Section 409A, and if such construction is not possible, as
if such provision had never been included. In the event that any of the
provisions of this Plan or portion thereof are held to be inoperative or invalid
by any court of competent jurisdiction, then: (1) insofar as is reasonable,
effect will be given to the intent manifested in the provisions held to be
invalid or inoperative, and (2) the invalidity and enforceability of the
remaining provisions will not be affected thereby.
SECTION XI
NON-COMPETITION AFTER NORMAL RETIREMENT
11.1. Non-Compete Clause. Except as stated in the second paragraph of this
subsection, Participant expressly agrees that, as consideration for the
agreements of the Bank contained herein and as a condition to the performance by
the Bank of its obligations hereunder, for a twenty-four (24) month period
beginning at the time of termination of employment and ending on the second
anniversary of the employment termination date the Participant will not, without
the prior written
12
consent of the Bank, engage in, become interested, directly or indirectly, as a
sole proprietor, as a partner in a partnership, or as a substantial shareholder
in a corporation, nor become associated with, in the capacity of an employee,
director, officer, principal, agent, trustee or in any other capacity
whatsoever, any enterprise conducted in any city, town or county in which the
Bank maintains an office at the time of Participant's termination of employment,
which enterprise is, or may deemed to be, competitive with any business carried
on by the Bank as of the date of the termination of Participant's employment or
his retirement.
In the event a Participant's termination follows a Change in Control or
other material change in the Bank's structure or business activities,
Participant shall be entitled to his Normal Retirement Benefit whether or not he
enters into an arrangement that is deemed to be competitive with the Bank.
11.2. Breach. In the event of any breach by Participant of the agreements
and covenants contained herein, the Board shall direct that any unpaid balance
of any payments to Participant under this Plan be suspended, and shall thereupon
notify Participant of such suspensions, in writing. Thereupon, if the Board
shall determine that said breach by Participant has continued for a period of
six (6) months following notification of such suspension, all rights of
Participant and his Beneficiaries under this Plan, including rights to further
payments hereunder, shall thereupon terminate.
SECTION XII
AMENDMENT/TERMINATION OF THE PLAN
This Plan shall not be amended or modified, in whole or in part, in a
manner that effects the benefits payable to a Participant, without the written
consent of the affected Participant, and such consent shall be required even if
Participant is no longer employed by the Bank. Notwithstanding anything to the
contrary herein, in the event that the Bank has a Change in Control, the Bank or
its successor may terminate the Plan, provided that all accrued benefits payable
hereunder are paid to each Participant within twelve months of the Plan's
termination. In the event that the intent of any provision shall need to be
construed in a manner to avoid taxability, such construction shall be made by
the Bank, as administrator of the Plan, in a manner that would manifest to the
maximum extent possible the original meaning of such provisions.
SECTION XIII
EXECUTION
13.1. This Plan sets forth the entire understanding of the parties hereto
with respect to the transactions contemplated hereby, and any previous
agreements or understandings between the parties hereto regarding the subject
matter hereof are merged into and superseded by this Plan.
13.2. This Plan shall be executed in triplicate, each copy of which, when
so executed and delivered, shall be an original, but all three copies shall
together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Plan to be executed on
the day and date first above written.
EXECUTIVE
Dated: _________________ _____________________
INVESTORS SAVINGS BANK
By: ______________________________
Title:
14
SCHEDULE A
ACTUARIAL ASSUMPTIONS
Interest: Six percent (6%) per annum, compounded annually.
Pre-retirement Turnover: None
Mortality: Determined according to the 1994 Group Annuity Reserving Table -
Assumed Retirement Age: Age on Normal Retirement Date
EXECUTIVE SUPPLEMENTAL WAGE REPLACEMENT PLAN
BENEFICIARY DESIGNATION
Executive, ______________________(name), under the terms of a certain
Executive Supplemental Retirement Wage Replacement Plan by and between him and
INVESTORS SAVINGS BANK, Millburn, New Jersey, dated July 1, 2005, hereby
designates the following Beneficiary to receive any guaranteed payments or death
benefits under such Plan, following his death:
PRIMARY BENEFICIARY: _____________________
SECONDARY BENEFICIARY: _____________________
This Beneficiary Designation hereby revokes any prior Beneficiary
Designation which may have been in effect.
Such Beneficiary Designation is revocable.
DATE: __________________, 20___
________________________________ ___________________________
(WITNESS) (EXECUTIVE)
________________________________ ___________________________
(WITNESS)
EXECUTIVE SUPPLEMENTAL RETIREMENT WAGE REPLACEMENT PLAN
JOINDER AGREEMENT
I, _______________________, am a participant in the Executive Supplemental
Retirement Wage Replacement Plan ("Plan"), which is effective July 1, 2005, and
agree to the terms and conditions thereof. Any terms capitalized in this, my
Joinder Agreement, which are not defined herein, shall have the same meaning as
set forth in the Plan.
For purposes of this Plan, my "Annual Compensation" shall be defined as my
base salary and bonus during any consecutive twelve-month period, including
amounts deferred at my election to any tax-qualified or non-qualified employee
benefit plan.
I understand that my benefits shall commence to be paid to me at my Normal
Retirement Date which occurs on the first day of the month coincident with or
next following my sixty-fifth (65) birthday, provided, however, that if my
employment terminates prior to my Normal Retirement Date and I elect hereinbelow
to receive an Early Retirement Benefit in accordance with the provisions of
Section 3.2 of the Plan, then my benefit shall commence on my Early Retirement
Date.
PART I.
NORMAL RETIREMENT BENEFIT DISTRIBUTION OPTION: I hereby elect to have my
Normal Retirement Benefit paid in the form of [check one option]:
____ A Life Annuity
____ A Life Annuity with 120 monthly payments guaranteed
____ A Joint and 100% Survivor Annuity with 120 monthly payments guaranteed
____ A Joint and 50% Survivor Annuity
____ A Single Sum Distribution
[If no election is made the Normal Retirement Benefit will be paid in the form
of a Life Annuity with 120 monthly payments guaranteed]
PART II.
IN THE EVENT MY EMPLOYMENT TERMINATES PRIOR TO THE NORMAL RETIREMENT DATE,
I elect to receive my Supplemental Retirement Benefit as follows:
____ I elect an Early Retirement Benefit following my Early Retirement
Date in accordance with Section 3.2 of the Plan.
____ I elect to delay any distribution and to receive a Normal Retirement
Benefit on or after my Normal Retirement Date, in accordance with Section 3.1 of
the Plan.
PART III [SKIP TO PART IV IF YOU DID NOT ELECT AN EARLY RETIREMENT BENEFIT
IN PART II]
EARLY RETIREMENT BENEFIT DISTRIBUTION OPTION: I hereby elect to have my
Early Retirement Benefit paid in the form of [check one option]:
____ A Life Annuity
____ A Life Annuity with 120 monthly payments guaranteed
____ A Joint and 100% Survivor Annuity with 120 monthly payments guaranteed
____ A Joint and 50% Survivor Annuity
____ A Single Sum Distribution
[If no election is made the Early Retirement Benefit will be paid in the form of
a Life Annuity with 120 monthly payments guaranteed]
I UNDERSTAND THAT IF I FAIL TO ELECT AN EARLY RETIREMENT BENEFIT, AND I RETIRE
WITH A NONFORFEITABLE INTEREST IN THE PLAN, MY BENEFIT WILL COMMENCE FOLLOWING
MY NORMAL RETIREMENT DATE AND WILL BE PAYABLE IN THE FORM OF A LIFE ANNUITY,
WITH 120 MONTHLY PAYMENTS GUARANTEED.
PART IV
I understand that I am entitled to review or obtain a copy of the Plan, at
any time, and may do so by contacting the Administrator.
This Joinder Agreement shall become effective upon execution (below) by
both the Executive and a duly authorized officer of the Bank.
Dated this _____ day of __________________, 2005.
Executive Investors Savings Bank
______________________ _______________________________