PEOPLES SAVINGS BANK
2002 STOCK BONUS PLAN
AND TRUST AGREEMENT
Article I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Peoples Savings Bank ("Savings Bank") hereby establishes the 2002
Stock Bonus Plan (the "Plan") and Trust (the "Trust") upon the terms and
conditions hereinafter stated in this Restricted Stock Plan and Trust Agreement
(the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
Article II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and to retain personnel of
experience and ability in key positions of responsibility with the Savings Bank
and its subsidiaries, by providing such personnel of the Savings Bank and its
subsidiaries with an increased equity interest in the parent corporation of the
Savings Bank, ▇▇▇▇▇▇▇▇▇▇ Bancorp, Inc. ("Parent"), as compensation for their
future professional contributions and service to the Savings Bank and its
subsidiaries.
Article III
DEFINITIONS
The following words and phrases when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meaning as set forth below. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
"Beneficiary" means the person or persons designated by the Participant to
receive any benefits payable under the Plan in the event of such Participant's
death. Such person or persons shall be designated in writing by the Participant
and addressed to the Bank or the Committee on forms provided for this purpose by
the Committee and delivered to the Bank and may be changed from time to time by
similar written notice to the Committee. A Participant's last will and testament
or any codicil thereto shall not constitute written designation of a
Beneficiary. In the absence of such written designation, the Beneficiary shall
be the Participant's surviving spouse, if any, or if none, the Participant's
estate.
"Board" means the Board of Directors of the Savings Bank, or any successor
corporation thereto.
"Cause" means the personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profits, intentional failure to
perform stated duties, willful violation of a material provision of any law,
rule or regulation (other than traffic violations and similar offense), or a
material
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violation of a final cease-and-desist order or any other action which results in
a substantial financial loss to the Parent, Savings Bank or its Subsidiaries.
"Change in Control" shall mean: (i) the sale of all, or a material portion,
of the assets of the Parent or Savings Bank; (ii) the merger or recapitalization
of the Parent or the Savings Bank whereby the Parent or Savings Bank is not the
surviving entity; (iii) a change in control of the Parent or Savings Bank, as
otherwise defined or determined by the Office of Thrift Supervision ("OTS") 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 1934 Act and the rules and regulations promulgated
thereunder) of twenty-five percent (25%) or more of the outstanding voting
securities of the Parent or Savings Bank by any person, trust, entity or group.
This limitation shall not apply to the purchase of shares of up to 25% of any
class of securities of the Parent or Savings Bank by a tax-qualified employee
stock benefit plan which is exempt from the approval requirements, set forth
under 12 C.F.R. ss.574.3(c)(1)(vi) as now in effect or as may hereafter be
amended. 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.
"Committee" means the Board of Directors of the Bank or the Restricted
Stock Plan Committee appointed by the Board of Directors of the Bank pursuant to
Article IV hereof.
"Common Stock" means shares of the common stock of the Parent, or any
successor corporation or parent thereto.
"Director" means a member of the Board of the Savings Bank.
"Director Emeritus" means a person serving as a director emeritus, advisory
director, consulting director, or other similar position as may be appointed by
the Board of Directors of the Savings Bank or the Parent from time to time.
"Disability" means any physical or mental impairment which renders the
Participant incapable of continuing in the employment or service of the Savings
Bank or the Parent in his current capacity as determined by the Committee.
"Effective Date" shall mean August 5, 2002, the date of Board approval of
such Plan.
"Employee" means any person who is employed by the Savings Bank or a
Subsidiary.
"Parent" shall mean ▇▇▇▇▇▇▇▇▇▇ Bancorp, Inc., the parent corporation of the
Savings Bank.
"Participant" means an Employee, Director or Director Emeritus who receives
a Plan Share Award under the Plan.
"Plan Shares" means shares of Common Stock held in the Trust which are
awarded or issuable to a Participant pursuant to the Plan.
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"Plan Share Award" or "Award" means a right granted to a Participant under
this Plan to earn or to receive Plan Shares.
"Plan Share Reserve" means the shares of Common Stock held by the Trust
pursuant to Sections 5.03 and 5.04.
"Savings Bank" or "Bank" means Peoples Savings Bank, and any successor
corporation thereto.
"Subsidiary" means those subsidiaries of the Savings Bank which, with the
consent of the Board, agree to participate in this Plan.
"Trustee" or "Trustee Committee" means that person(s) or entity nominated
by the Committee and approved by the Board pursuant to Sections 4.01 and 4.02 to
hold legal title to the Plan assets for the purposes set forth herein.
Article IV
ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and interpreted
by the Board of Directors of the Bank or a Committee appointed by said Board,
which shall consist of not less than two non- employee members of the Board,
which shall have all of the powers allocated to it in this and other sections of
the Plan. All persons designated as members of the Committee shall be
"Non-Employee Directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("1934 Act"). The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan Share
Award granted hereunder shall be final and binding. The Committee shall act by
vote or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. The Committee shall report its actions and decisions with respect to
the Plan to the Board at appropriate times, but in no event less than one time
per calendar year. The Committee shall recommend to the Board one or more
persons or entity to act as Trustee in accordance with the provision of this
Plan and Trust and the terms of Article VIII hereof.
4.02 Role of the Board. The members of the Committee and the Trustee shall
be appointed or approved by, and will serve at the pleasure of the Board. The
Board may in its discretion from time to time remove members from, or add
members to, the Committee, and may remove, replace or add Trustees. The Board
shall have all of the powers allocated to it in this and other sections of the
Plan, may take any action under or with respect to the Plan which the Committee
is authorized to take, and may reverse or override any action taken or decision
made by the Committee under or with respect to the Plan, provided, however, that
the Board may not revoke any Plan Share Award already made except as provided in
Section 7.01(b) herein.
4.03 Limitation on Liability. No member of the Board, the Committee or the
Trustee shall be liable for any determination made in good faith with respect to
the Plan or any Plan Share Awards granted. If a member of the Board, Committee
or any Trustee is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by any reason of anything done or not done by
him in such capacity under or with respect to the Plan, the Parent and the
Savings Bank shall indemnify such member against expenses (including
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attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in the best interests of the Parent, the Savings Bank and its
Subsidiaries and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Notwithstanding anything
herein to the contrary, in no event shall the Savings Bank take any actions with
respect to this Section 4.03 which is not in compliance with the limitations or
requirements set forth at 12 C.F.R. 545.121, as may be amended from time to
time.
Article V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 Amount and Timing of Contributions. The Board of Directors of the
Savings Bank shall determine the number of shares of Common Stock or the amount
of cash to be contributed by the Savings Bank to the Trust established under
this Plan. Such contributions to the Trust shall be delivered to the Trustee at
the time of such contribution. No contributions to the Trust by Participants
shall be permitted except with respect to amounts necessary to meet tax
withholding obligations.
5.02 Initial Investment. Any funds held by the Trust prior to investment in
the Common Stock shall be invested by the Trustee in such interest-bearing
account or accounts at the Savings Bank as the Trustee shall determine to be
appropriate.
5.03 Maximum Plan Share Reserve; Investment of Trust Assets. The Trust
shall purchase Common Stock in an amount not greater than 100% of the Trust's
cash assets, after providing for any required withholding as needed for tax
purposes, provided, however, that the Trust shall not distribute more than
10,826 shares of Common Stock in the aggregate pursuant to Awards under the
Plan. The Trustee may accept the transfer of Common Stock held by the Bank in
other trust accounts, purchase shares of Common Stock in the open market or, in
the alternative, may purchase authorized but unissued shares of the Common Stock
or treasury shares from the Parent sufficient to fund the Plan Share Reserve.
5.04 Effect of Allocations, Returns and Forfeitures Upon Plan Share
Reserves. Upon the allocation of Plan Share Awards under Sections 6.02 and 6.05,
or the decision of the Committee to return Plan Shares to the Parent, the Plan
Share Reserve shall be reduced by the number of Shares subject to the Awards so
allocated or returned. Any Shares subject to an Award which are not earned
because of forfeiture by the Participant pursuant to Section 7.01 shall be added
to the Plan Share Reserve.
Article VI
ELIGIBILITY; ALLOCATIONS
6.01 Eligibility. Employees are eligible to receive Plan Share Awards
within the sole discretion of the Committee. Directors who are not otherwise
Employees shall receive Plan Share Awards pursuant to Section 6.05.
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6.02 Allocations. The Committee will determine which of the Employees will
be granted Plan Share Awards and the number of Shares covered by each Award,
provided, however, that in no event shall any Awards be made which will violate
the Charter or Bylaws of the Savings Bank or its Parent or Subsidiaries or any
applicable federal or state law or regulation. In the event Shares are forfeited
for any reason or additional Shares are purchased by the Trustee, the Committee
may, from time to time, determine which of the Employees will be granted Plan
Share Awards to be awarded from forfeited Shares. In selecting those Employees
to whom Plan Share Awards will be granted and the number of shares covered by
such Awards, the Committee shall consider the prior and anticipated future
position, duties and responsibilities of the Employees, the value of their prior
and anticipated future services to the Savings Bank and its Subsidiaries, and
any other factors the Committee may deem relevant. All actions by the Committee
shall be deemed final, except to the extent that such actions are revoked by the
Board. Notwithstanding anything herein to the contrary, in no event shall any
Participant receive Plan Share Awards in excess of 30% of the aggregate Plan
Shares authorized under the Plan.
6.03 Form of Allocation. As promptly as practicable after a determination
is made pursuant to Section 6.02 or Section 6.05 that a Plan Share Award is to
be made, the Committee shall notify the Participant in writing of the grant of
the Award, the number of Plan Shares covered by the Award, and the terms upon
which the Plan Shares subject to the award may be earned. The date on which the
Committee makes its award determination or the date the Committee so notifies
the Participant shall be considered the date of grant of the Plan Share Awards
as determined by the Committee. The Committee shall maintain records as to all
grants of Plan Share Awards under the Plan.
6.04 Allocations Not Required. Notwithstanding anything to the contrary at
Sections 6.01, 6.02 or 6.05, no Employee shall have any right or entitlement to
receive a Plan Share Award hereunder, such Awards being at the sole discretion
of the Committee and the Board, nor shall the Employees as a group have such a
right. The Committee may, with the approval of the Board (or, if so directed by
the Board) return all Common Stock in the Plan Share Reserve to the Savings Bank
at any time, and cease issuing Plan Share Awards.
6.05 Awards to Directors. Notwithstanding anything herein to the contrary,
upon the Effective Date, a Plan Share Award consisting of the following number
of Plan Shares shall be awarded to each Director of the Savings Bank that is not
otherwise an Employee. Such Plan Share Award shall be earned and non-forfeitable
at the rate of one-fourth as of September 5, 2002 and an additional one-fourth
following each of the next three successive years during such periods of
continued service as a Director or Director Emeritus. Further, such Plan Share
Award shall be immediately 100% earned and non-forfeitable in the event of the
death or Disability of such Director or Director Emeritus, or upon a Change in
Control of the Savings Bank or Parent. Subsequent to the Effective Date, Plan
Share Awards may be awarded to newly elected or appointed Directors of the
Savings Bank by the Committee, provided that total Plan Share Awards granted to
non-employee Directors of the Savings Bank shall not exceed 4,800 Plan Share
Awards in the aggregate under the Plan.
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Director Plan Shares
-------- -----------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. 668
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 928
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 466
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,046
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 884
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. 1,134
Article VII
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earnings Plan Shares; Forfeitures.
(a) General Rules. Unless the Committee shall specifically state to the
contrary at the time a Plan Share Award is granted, Plan Shares subject to an
Award shall be earned and non-forfeitable by a Participant at the rate of
one-fourth of such Award following one year after the granting of such Award,
and an additional one-fourth following each of the next three successive years;
provided that such Participant remains an Employee, Director, or Director
Emeritus during such period.
(b) Revocation for Misconduct. Notwithstanding anything herein to the
contrary, the Board shall, by resolution, immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been delivered thereunder to the
Participant, whether or not yet earned, in the case of a Participant who is
discharged from the employ or service of the Parent, Savings Bank or a
Subsidiary for Cause, or who is discovered after termination of employment or
service to have engaged in conduct that would have justified termination for
Cause. A determination of Cause shall be made by the Board within its sole
discretion.
(c) Exception for Terminations Due to Death or Disability. Notwithstanding
the general rule contained in Section 7.01(a) above, all Plan Shares subject to
a Plan Share Award held by a Participant whose employment or service with the
Parent, Savings Bank or a Subsidiary terminates due to death or Disability,
shall be deemed earned and nonforfeitable as of the Participant's last date of
employment or service with the Parent, Savings Bank or Subsidiary and shall be
distributed as soon as practicable thereafter.
(d) Exception for Termination after a Change in Control. Notwithstanding
the general rule contained in Section 7.01 above, all Plan Shares subject to a
Plan Share Award held by a Participant shall be deemed to be immediately 100%
earned and non-forfeitable in the event of a Change in Control of the Parent or
Savings Bank and shall be distributed as soon as practicable thereafter.
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7.02 Payment of Dividends on Plan Share Awards. A holder of a Plan Share
Award, whether or not earned, shall also be entitled to receive an amount equal
to any cash dividends declared and paid with respect to shares of Common Stock
represented by such Plan Share Award between the date the relevant Plan Share
Award was granted to such Participant and the date the Plan Shares are
distributed. Such cash amounts shall be paid as compensation to the Participant
by the Trust or the Bank within 30 days of the applicable dividend payment date,
less applicable tax withholding, if applicable.
7.03 Distribution of Plan Shares.
(a) Timing of Distributions: General Rule. Except as provided in
Subsections (d) and (e) below, Plan Shares shall be distributed to the
Participant or his Beneficiary, as the case may be, as soon as practicable after
they have been earned. No fractional shares shall be distributed.
Notwithstanding anything herein to the contrary, at the discretion of the
Committee, Plan Shares may be distributed prior to such Shares being 100%
earned, provided that such Plan Shares shall contain a restrictive legend
detailing the applicable limitations of such shares with respect to transfer and
forfeiture.
(b) Form of Distribution. All Plan Shares, together with any shares
representing stock dividends, shall be distributed in the form of Common Stock.
One share of Common Stock shall be given for each Plan Share earned. Payments
representing cash dividends (and earnings thereon) shall be made in cash.
Notwithstanding anything within the Plan to the contrary, upon a Change in
Control whereby substantially all of the Common Stock of the Parent shall be
acquired for cash, all Plan Shares associated with Plan Share Awards, together
with any shares representing stock dividends associated with Plan Share Awards,
shall be, at the sole discretion of the Committee, distributed as of the
effective date of such Change in Control, or as soon as administratively
feasible thereafter, in the form of cash equal to the consideration received in
exchange for such Common Stock represented by such Plan Shares.
(c) Withholding. The Trustee may withhold from any payment or distribution
made under this Plan sufficient amounts of cash or shares of Common Stock
necessary to cover any applicable withholding and employment taxes, and if the
amount of such payment or distribution is not sufficient, the Trustee may
require the Participant or Beneficiary to pay to the Trustee the amount required
to be withheld in taxes as a condition of delivering the Plan Shares. The
Trustee shall pay over to the Parent, Savings Bank or Subsidiary which employs
or employed such Participant any such amount withheld from or paid by the
Participant or Beneficiary.
(d) Timing: Exception for 10% Shareholders. Notwithstanding Subsection (a)
above, no Plan Shares may be distributed to the extent the Participant or
Beneficiary, as the case may be, would after receipt of such Shares own in
excess of ten percent (10%) of the issued and outstanding shares of Common
Stock, unless such action is approved in advance by a majority vote of
disinterested directors of the Board of the Parent.
(e) Regulatory Exceptions. No Plan Shares shall be distributed, however,
unless and until all of the requirements of all applicable law and regulation
shall have been fully complied with as determined by the Board upon advice of
legal counsel.
7.04 Voting of Plan Shares. After a Plan Share Award has become earned and
non-forfeitable, the Participant shall be entitled to direct the Trustee as to
the voting of the Plan Shares which are associated with the Plan Share Award and
which have not yet been distributed pursuant to Section 7.03, subject to rules
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and procedures adopted by the Committee for this purpose. All shares of Common
Stock held by the Trust as to which Participants are not entitled to direct, or
have not directed, the voting of such Shares, shall be voted by the Trustee as
directed by the Committee.
Article VIII
TRUST
8.01 Trust. The Trustee shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the provisions
of the Plan and Trust and the applicable directions, rules, regulations,
procedures and policies established by the Committee pursuant to the Plan.
8.02 Management of Trust. It is the intention of this Plan and Trust that
the Trustee shall have complete authority and discretion with respect to the
management, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust, except those attributable to cash dividends paid
with respect to Plan Shares not held in the Plan Share Reserve, in Common Stock
to the fullest extent practicable, except to the extent that the Trustee
determines that the holding of monies in cash or cash equivalents is necessary
to meet the obligations of the Trust. In performing their duties, the Trustees
shall have the power to do all things and execute such instruments as may be
deemed necessary or proper, including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust
assets in the Common Stock without regard to any law now or hereafter
in force limiting investments for Trustees or other fiduciaries. The
investment authorized herein may constitute the only investment of the
Trust, and in making such investment, the Trustee is authorized to
purchase Common Stock from the Parent or from any other source, and
such Common Stock so purchased may be outstanding, newly issued, or
treasury shares.
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above in such deposit accounts, and certificates
of deposit (including those issued by the Savings Bank), obligations
of the United States government or its agencies or such other
investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any
time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered
in the name of a nominee, without the addition of words indicating
that such security is an asset of the Trust (but accurate records
shall be maintained showing that such security is an asset of the
Trust).
(e) To hold cash without interest in such amounts as may be in
the opinion of the Trustee reasonable for the proper operation of the
Plan and Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
(g) To hire counsel to render advice with respect to their
rights, duties and obligations hereunder, and such other legal
services or representation as they may deem desirable.
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(h) To hold funds and securities representing the amounts to be
distributed to a Participant or his Beneficiary as a consequence of a
dispute as to the disposition thereof, whether in a segregated account
or held in common with other assets.
(i) As may be directed by the Committee or the Board from time to
time, the Trustee shall pay to the Saving Bank earnings of the Trust
attributable to the Plan Share Reserve.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of a court for the exercise of any power
herein contained, or to maintain bond.
8.03 Records and Accounts. The Trustee shall maintain accurate and detailed
records and accounts of all transactions of the Trust, which shall be available
at all reasonable times for inspection by any legally entitled person or entity
to the extent required by applicable law, or any other person determined by the
Committee.
8.04 Earnings. All earnings, gains and losses with respect to Trust assets
shall be allocated in accordance with a reasonable procedure adopted by the
Committee, to bookkeeping accounts for Participants or to the general account of
the Trust, depending on the nature and allocation of the assets generating such
earnings, gains and losses. In particular, any earnings on cash dividends
received with respect to shares of Common Stock shall be allocated to accounts
for Participants, except to the extent that such cash dividends are distributed
to Participants, if such shares are the subject of outstanding Plan Share
Awards, or, otherwise to the Plan Share Reserve.
8.05 Expenses. All costs and expenses incurred in the operation and
administration of this Plan, including those incurred by the Trustee, shall be
paid by the Savings Bank.
8.06 Indemnification. Subject to the requirements and limitations of
applicable laws and regulations, the Parent and the Savings Bank shall
indemnify, defend and hold the Trustee harmless against all claims, expenses and
liabilities arising out of or related to the exercise of the Trustee's powers
and the discharge of their duties hereunder, unless the same shall be due to
their gross negligence or willful misconduct.
Article IX
MISCELLANEOUS
9.01 Adjustments for Capital Changes. The aggregate number of Plan Shares
available for issuance pursuant to the Plan Share Awards and the number of
Shares to which any Plan Share Award relates shall be proportionately adjusted
for any increase or decrease in the total number of outstanding shares of Common
Stock issued subsequent to the effective date of the Plan resulting from any
split, subdivision or consolidation of the Common Stock or other capital
adjustment, change or exchange of the Common Stock, or other increase or
decrease in the number or kind of shares effected without receipt or payment of
consideration by the Parent.
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9.02 Amendment and Termination of the Plan. The Board may, by resolution,
at any time, amend or terminate the Plan. The power to amend or terminate the
Plan shall include the power to direct the Trustee to return to the Parent all
or any part of the assets of the Trust, including shares of Common Stock held in
the Plan Share Reserve, as well as shares of Common Stock and other assets
subject to Plan Share Awards which have not yet been earned by the Participants
to whom they have been awarded. However, the termination of the Trust shall not
affect a Participant's right to earn Plan Share Awards and to the distribution
of Common Stock relating thereto, including earnings thereon, in accordance with
the terms of this Plan and the grant by the Committee or the Board.
9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall not
be transferable by a Participant, and during the lifetime of the Participant,
Plan Shares may only be earned by and paid to the Participant who was notified
in writing of the Award by the Committee pursuant to Section 6.03. No
Participant or Beneficiary shall have any right in or claim to any assets of the
Plan or Trust, nor shall the Parent, Savings Bank, or any Subsidiary be subject
to any claim for benefits hereunder.
9.04 No Employment Rights. Neither the Plan nor any grant of a Plan Share
Award or Plan Shares hereunder nor any action taken by the Trustee, the
Committee or the Board in connection with the Plan shall create any right,
either express or implied, on the part of any Participant to continue in the
employ or service of the Parent, Savings Bank, or a Subsidiary thereof.
9.05 Voting and Dividend Rights. No Participant shall have any voting or
dividend rights of a stockholder with respect to any Plan Shares covered by a
Plan Share Award, except as expressly provided in Sections 7.02 and 7.04 above,
prior to the time said Plan Shares are actually distributed to such Participant.
9.06 Governing Law. The Plan and Trust shall be governed by and construed
under the laws of the State of New Jersey, except to the extent that Federal Law
shall be deemed applicable.
9.07 Effective Date. The Plan shall be effective as of August 5, 2002, the
date of approval of the Plan by the Board of the Bank.
9.08 Term of Plan. This Plan shall remain in effect until the earlier of
(i) termination by the Board, (ii) the distribution of all assets of the Trust,
or (iii) 21 years from the Effective Date. Termination of the Plan shall not
effect any Plan Share Awards previously granted, and such Plan Share Awards
shall remain valid and in effect until they have been earned and paid, or by
their terms expire or are forfeited.
9.09 Tax Status of Trust. It is intended that the Trust established hereby
shall be treated as a grantor trust of the Savings Bank under the provisions of
Section 671 et seq. of the Internal Revenue Code of 1986, as amended, as the
same may be amended from time to time.
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