EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT FOR ANGELO J. Di LORENZO BROOKLYN FEDERAL SAVINGS BANK Brooklyn, New York Initially Effective as of May 1, 2005 Amended and Restated Effective as of December 1, 2007
Exhibit
10.1
EXECUTIVE
SUPPLEMENTAL RETIREMENT
INCOME
AGREEMENT
FOR
▇▇▇▇▇▇
▇. ▇▇ ▇▇▇▇▇▇▇
BROOKLYN
FEDERAL SAVINGS BANK
Brooklyn,
New York
Initially
Effective as of May 1, 2005
Amended
and Restated Effective as of December 1, 2007
This
Executive Supplemental Retirement Income Agreement (“Agreement”), which was
initially effective as of the 1st day of May, 2005, by and between Brooklyn
Federal Savings Bank, Brooklyn, New York, a stock savings bank organized
and
existing under the laws of the United States of America, hereinafter referred
to
as “Bank,” and ▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇, a key employee and executive hereinafter
referred to as “Executive,” is hereby amended and restated effective as of
December 1, 2007, as provided herein.
WITNESSETH:
WHEREAS,
Executive is employed by the Bank;
WHEREAS,
the Bank recognizes the valuable services heretofore performed for it by
Executive and wishes to encourage continued employment;
WHEREAS,
Executive wishes to be assured that he will be entitled to a certain amount
of
additional compensation for some definite period of time from and after his
retirement from active service with the Bank or other termination of his
employment and wishes to provide his beneficiary with benefits from and after
his death;
WHEREAS,
the Bank has adopted a program of deferred compensation for certain of its
senior executives which program is evidenced by individual agreements, such
as
this one, between the Bank and each participating executive which agreements
provide the terms and conditions upon which the Bank shall pay such additional
compensation to each executive after his retirement or other termination
of his
employment and/or death benefits to his beneficiary after his
death;
WHEREAS,
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
provides that certain nonqualified deferred compensation arrangements must
comply with its terms and the final Treasury Regulations (defined herein)
promulgated thereunder, or subject the recipients of such compensation to
additional taxes and penalties;
WHEREAS,
the parties hereto intend that this Agreement be considered an unfunded
arrangement, maintained primarily to provide supplemental retirement income
for
Executive, a member of a select group of management or highly compensated
employee of the Bank for purposes of the Employee Retirement Income Security
Act
of 1974, as amended;
WHEREAS,
the Bank has adopted this Executive Supplemental Retirement Income Agreement
which controls all issues relating to the Supplemental Retirement Income
Benefit
as described herein;
WHEREAS,
it is intended that the provisions of this Agreement shall supersede any
prior
agreements relating to the subject matter hereto.
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:
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1.1.
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“Act”
means the Employee Retirement Income Security Act of 1974, as it
may be
amended from time to time.
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1.2.
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“Actuarial
Assumptions” shall mean, with respect to any form of benefit, the
appropriate Actuarial Assumptions set forth on Schedule A, as changed
from
time to time, based on the recommendations of the Bank’s Benefits
Consultants and approved by the Bank’s Board of Directors, and as attached
hereto and made a part hereof.
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1.3.
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“Agreement”
means this Executive Supplemental Retirement Income
Agreement.
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1.4.
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“Annual
Compensation” shall mean the sum of the base salary and bonus paid or
attributable to Executive during the Plan Year, including amounts
deferred
at Executive’s election to any tax-qualified or non-qualified employee
benefit plan of the Bank or Company.
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1.5.
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“Bank”
means Brooklyn Federal Savings Bank and any successor
thereto.
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1.6.
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“Beneficiary”
means the person or persons designated by Executive, in writing
on the
attached Exhibit A, from time to time, as the beneficiary to whom
the
deceased Executive’s account is payable. If no beneficiary is so
designated, then Executive’s Spouse, if living, will be deemed the
beneficiary. If Executive’s Spouse is not living, then the Children of
Executive will be deemed the beneficiary. If there are no living
Children,
then the Estate of Executive will be deemed the
beneficiary.
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1.7.
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“Benefits
Consultants” shall mean MKA Executive and Professional Benefits, or such
other professional consultants appointed to the position by the
Board of
Directors, from time to time.
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1.8.
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“Cause”
means personal dishonesty, willful misconduct, willful malfeasance,
breach
of fiduciary duty involving personal profit, intentional failure
to
perform stated duties, willful violation of any law, rule, or regulation
(other than traffic violations or similar offenses), final
cease-and-desist order, material breach of any provision of this
Agreement, or gross negligence in matters of material importance
to the
Bank.
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1.9.
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“Change
in Control” of the Bank or the Company shall mean (i) a change in
ownership of the Bank or Company under paragraph (a) below, or
(ii) a
change in effective control of the Bank or Company under paragraph
(b)
below, or (iii) a change in the ownership of a substantial portion
of the
assets of the Bank or Company under paragraph (c)
below:
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(a)
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Change
in the ownership of the Bank or Company. A change in the
ownership of the Bank or Company shall occur on the date that any
one
person, or more than one person acting as a group (as defined in
Treasury
Regulation Section 1.409A-3(i)(5)(v)(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.
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(b)
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Change
in the effective control of the Bank or Company. A change in
the effective control of the Bank or Company shall occur on the
date that
either (i) any one person, or more than one person acting as a
group (as
defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), 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 30 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.
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(c)
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Change
in the ownership of a substantial portion of the Bank or Company’s
assets. A change in the ownership of a substantial portion of
the Bank or Company’s assets shall occur on the date that any one person,
or more than one person acting as a group (as defined in Treasury
Regulation Section 1.409A-3(i)(5)(vii)(C)), acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such person or 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 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.
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(d)
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Each
of the sub-paragraphs (a) through (c) of this Section 1.9 shall
be
construed and interpreted consistent with the requirements of Code
Section
409A and any Treasury Regulations or other guidance issued
thereunder.
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1.10.
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“Children”
means Executive’s children, both natural and adopted, then living at the
time payments are due the Children under this
Agreement.
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1.11.
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“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
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1.12.
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“Company”
means Brooklyn Federal Bancorp, Inc., a Federally chartered corporation
which owns all of the issued and outstanding stock of the
Bank.
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1.13.
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“Effective
Date.” The initial Effective Date of the Agreement was May 1,
2005. The Agreement is hereby amended and restated effective as
of December 1, 2007 in order to conform to the Treasury Regulations
under
Code Section 409A.
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1.14.
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“Estate”
means the estate of Executive.
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1.15.
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“Interest
Factor” means six percent (6%) or such other rate as is set forth on
Schedule A, from time to time.
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1.16.
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“Normal
Retirement Date” means the first day of the month coincident with or next
following the later of (i) Executive’s sixty-fifth (65th) birthday, or
(ii) the date of Executive’s actual retirement.
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1.17.
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“Permanently
and Totally Disabled” means Executive (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or
can be expected to last for a continuous period of not less than
12
months, or (ii) is, by reason of any medically determinable physical
or
mental impairment which can be expected to result in death or can
be
expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less
than 3
months under an accident and health plan covering employees of
the
participant’s employer, or (iii) has been determined to be totally
disabled by the Social Security
Administration.
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1.18.
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“Plan
Year” means the calendar year.
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1.19.
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“Separation
from Service” means the Executive’s death, retirement or other termination
of employment with the Bank within the meaning of Code Section
409A. No Separation from Service shall be deemed to occur due
to military leave, sick leave or other bona fide leave of absence
if the
period of such leave does not exceed six months or, if longer,
so long as
the Executive’s right to reemployment is provided by law or
contract. If the leave exceeds six months and the Executive’s
right to reemployment is not provided by law or by contact, then
the
Executive shall have a Separation from Service on the first date
immediately following such six-month period.
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Whether
a termination of employment has occurred is determined based on
whether
the facts and circumstances indicate that the Bank and Executive
reasonably anticipated that no further services would be performed
after a
certain date or that the level of bona fide services the Executive
would
perform after such date (whether as an employee or as an independent
contractor) would permanently decrease to no more than 49% of the
average
level of bona fide services performed over the immediately preceding
36
months (or such lesser period of time in which the Executive has
provided
services for the Bank). The determination of whether the
Executive has a Separation from Service shall be made by applying
the
presumptions set forth in the Treasury Regulations under Code Section
409A.
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1.20.
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“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.
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1.21.
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“Spouse”
means the individual to whom Executive is legally married at the
time of
Executive’s death.
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1.22.
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“Supplemental
Disability Benefit” shall mean the benefit payable to Executive pursuant
to Section 3.2 hereof in the event he becomes Permanently and Totally
Disabled prior to his Normal Retirement Date.
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1.23.
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“Supplemental
Retirement Income Benefit” means an annual retirement benefit equal to (a)
sixty percent (60%) times the highest of Executive’s average Annual
Compensation over any consecutive thirty-six (36) month period
during the
last ten (10) years prior to retirement, reduced by (b) the sum
of (i) the
annuitized value (calculated using the Interest Factor and appropriate
Actuarial Assumptions) of Executive’s retirement benefits under the Bank’s
Money Purchase Pension Plan payable in the form of a single life
annuity
for Executive’s life with two hundred forty (240) monthly payments
guaranteed; (ii) the annuitized value (calculated using the Interest
Factor and the appropriate Actuarial Assumptions) of the annual
benefit to
Executive commencing at the Normal Retirement Date, and attributable
to
employer contributions to the Bank’s tax-qualified 401(k) plan, payable in
the form of a single life annuity for Executive’s life, with two hundred
forty (240) monthly payments guaranteed; and (iii) the annuitized
value
(calculated using the Interest Factor and appropriate Actuarial
Assumptions) of Executive’s annual Social Security retirement benefits
commencing at the Normal Retirement Date. Notwithstanding the
foregoing, Executive may elect an optional form of distribution
of his
Supplemental Retirement Income Benefit, provided that such optional
form
of distribution is the actuarial equivalent of the regular form
of
Supplemental Retirement Income
Benefit.
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1.24.
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“Survivor’s
Benefit” means the benefit provided under Section 2.1 to Executive’s
Beneficiary if Executive dies while in active employment of the
Bank. The Survivor’s Benefit shall be equal in amount to the
Supplemental Retirement Income Benefit payable to Executive if
Executive
had lived until his Normal Retirement Date, terminated employment
on such
date and commenced receiving the Supplemental Retirement Income
Benefit at
that time. For purposes of these calculations, Executive’s
Annual Compensation 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. In addition, for purposes of calculating the
Survivor’s Benefit payable hereunder, the Bank’s contributions to (i) the
Money Purchase Pension Plan, (ii) the 401(k) Plan, and (iii) the
employer’s portion of Social Security shall be deemed to continue until
Executive’s Normal Retirement Date at the same rate as was contributed on
behalf of Executive in Executive’s last full year of employment prior to
his death.
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1.25.
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“Treasury
Regulations” means the Treasury regulations and other rules, regulations
or authority promulgated under Code Section
409A.
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SECTION
II
PRE
RETIREMENT AND POST RETIREMENT DEATH BENEFITS
2.1 Death
Prior to Termination of Employment. If Executive 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
Income Benefit, Executive’s Beneficiary shall be entitled to the Survivor’s
Benefit. Such benefit shall be paid monthly in two hundred forty (240) equal
installments. The first installment shall begin within thirty (30)
days after the Bank is notified of the date of death of Executive.
2.2 Death
Subsequent to Retirement. In the event of the Executive’s death
while receiving monthly benefits under this Agreement, but prior to receiving
two hundred forty (240) monthly payments, the unpaid balance of such monthly
payments shall continue to be paid monthly to Executive’s
Beneficiary.
SECTION
III
SUPPLEMENTAL
RETIREMENT INCOME BENEFIT
AND
OTHER BENEFITS
3.1 Normal
Retirement Benefit. Upon Executive’s termination of employment
due to retirement coincident with or following his Normal Retirement Date,
the
Bank shall commence payments of the Supplemental Retirement Income
Benefit. Such payments shall commence the first day of the month next
following Executive’s termination of employment and, except as otherwise
provided in Section 3.5 below, shall be payable monthly thereafter for two
hundred forty (240) months or Executive’s life, whichever is
longer. If the Executive is a Specified Employee and the termination
is deemed to be a Separation from Service, then such payments shall commence
the
first day of the seventh month next following Executive’s Separation from
Service, with the first six payments accumulated and paid in the seventh
month,
and the remaining payments payable monthly thereafter for two hundred
thirty-four (234) months or Executive’s life, whichever is longer.
3.2 Disability. If
Executive becomes Permanently and Totally Disabled while covered by the
provisions of this Agreement, Executive shall be entitled to a Supplemental
Disability Benefit commencing within thirty (30) days after a determination
by
the Board of Directors that the Executive is Permanently and Totally
Disabled. The Supplemental Disability Benefit shall be equal to the
Supplemental Retirement Income Benefit and, except as otherwise provided
in
Section 3.5 below, shall be payable monthly thereafter for two hundred forty
(240) months or Executive’s life, whichever is longer.
In
the
event Executive dies at any time after termination of employment due to his
becoming Permanently and Totally Disabled but prior to commencement or
completion of two hundred forty (240) monthly payments, the Bank shall pay
to
Executive’s Beneficiary a continuation of the monthly installments for the
remainder of the two hundred forty (240) month period.
3.3 Change
in Control Benefit. If a Change in Control occurs, Executive
shall be entitled to a Change in Control benefit (the “Change in Control
Benefit”) commencing within thirty (30) days after the effective date of such
Change in Control and, except as otherwise provided in Section 3.5 below,
shall
be payable monthly thereafter for two hundred forty (240) months or Executive’s
life, whichever is longer. The Change in Control Benefit shall be
equal to the Supplemental Retirement Income Benefit.
In
the
event Executive dies at any time after the Change in Control, but prior to
commencement or completion of two hundred forty (240) monthly payments, the
Bank
shall pay to Executive’s Beneficiary a continuation of the monthly installments
for the remainder of the two hundred forty (240) month period.
3.4 Change
of Election to Delay Payment. In the event Executive desires to
delay the payment commencement date of his Supplemental Retirement Income
Benefit, Executive may file an election with the Bank to delay the payment
commencement date, provided that (i) the election must be filed at
least 12 months prior to its becoming effective, (ii) if Executive becomes
entitled to a payment during such 12 month period, the payment election form
shall be ignored and distribution of the Supplemental Retirement Income Benefit
shall commence under the Agreement in accordance with its original payment
schedule, and (iii) except with respect to distributions due to death or
becoming Totally and Permanently Disabled, the election must delay the first
payment with respect to such election for a period of not less than 5 years
from
the date the payment would otherwise have been made.
3.5 Optional
Distribution Elections. Notwithstanding the foregoing, Executive
may elect to receive his Supplemental Retirement Income Benefit in an optional
form of benefit that is the actuarial equivalent of the normal form of benefit
(e.g., monthly payments for the longer of two hundred forty (240) months
or
Executive’s lifetime), by completing the Transition Year Election Form attached
hereto as Exhibit B. Such election, if made, must be completed prior to December
31, 2008, provided, however, that (i) Executive may not make an
election during 2007 to cause a payment to be made during 2007, or to otherwise
delay a payment that is scheduled to be made during 2007, and (ii) Executive
may
not make an election during 2008 to cause a payment to be made during 2008,
or
to otherwise delay a payment that is scheduled to be made during
2008.
SECTION
IV
EXECUTIVE’S
RIGHT TO ASSETS
The
rights of Executive, any Beneficiary of Executive, or any other person claiming
through Executive under this Agreement, shall be solely those of an unsecured
general creditor of the Bank. Executive, the Beneficiary of Executive, or
any
other person claiming through Executive, shall only have the right to receive
from the Bank those payments as specified under this Agreement. Executive
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 Agreement. Any asset used or acquired by the Bank in connection with
the
liabilities it has assumed under this Agreement, except as expressly provided,
shall not be deemed to be held under any trust for the benefit of Executive
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.
SECTION
V
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 Agreement. Executive, 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
Agreement 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
Agreement, 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 Executive 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 Executive, then Executive shall assist the Bank by freely submitting
to
a physical examination and supplying such additional information necessary
to
obtain such insurance or annuities.
SECTION
VI
ALIENABILITY
AND ASSIGNMENT PROHIBITION
Neither
Executive nor any Beneficiary under this Agreement 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 Executive or his Beneficiary,
nor be transferable by operation of law in the event of bankruptcy, insolvency
or otherwise. In the event Executive or any Beneficiary attempts assignment,
communication, hypothecation, transfer or disposal of the benefits hereunder,
the Bank’s liabilities shall forthwith cease and terminate.
SECTION
VII
TERMINATION
OF EMPLOYMENT FOR CAUSE
Should
Executive be terminated for Cause, all benefits under this Agreement shall
be
forfeited and this Agreement shall become null and void.
SECTION
VIII
ACT
PROVISIONS
8.1. Named
Fiduciary and Administrator. The Bank shall be the named fiduciary and
administrator of this Agreement. As administrator, the Bank shall be
responsible for the management, control and administration of the Agreement
as
established herein. The administrator may delegate to others certain aspects
of
the management and operational responsibilities of the Agreement, including
the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.2. Claims
Procedure and Arbitration. In the event that benefits under this
Agreement are not paid to Executive (or to his Beneficiary in the
case of Executive’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 of Directors 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 Agreement 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.
8.3. 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
Agreement 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 Agreement upon which the decision is
based.
8.4. If
claimants continue to dispute the benefit denial based upon completed
performance of the Agreement 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 Executive (or his Beneficiary) is entitled to the
benefits set forth under this Agreement, then all amounts that Executive
(or his
Beneficiary) would have received up to the time of such final determination
shall be paid to Executive (or his Beneficiary) with interest (calculated
using
the Interest Factor) within thirty (30) days after such final
determination.
8.5. Where
a dispute arises as to the Bank’s discharge of Executive 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.
8.6. All
reasonable legal fees paid or incurred by Executive pursuant to any dispute
or
questions of interpretation relating to this Agreement shall be paid or
reimbursed by the Bank, provided that the dispute or interpretation has been
settled by executive and the Bank or resolved in Executive’s
favor. To the extent necessary to avoid additional taxes and
penalties under Code Section 409A, such reimbursement shall be made not later
than two and one-half months following the resolution of such
matters.
SECTION
IX
MISCELLANEOUS
9.1 No
Effect on Employment Rights. Nothing contained herein shall
confer upon Executive the right to be retained in the service of the Bank
nor
limit the right of the Bank to discharge or otherwise deal with Executive
without regard to the existence of this Agreement.
9.2 Disclosure. Executive
shall receive a copy of his Agreement and the administrator will make available,
upon request, a copy of any rules and regulations that govern this
Agreement.
9.3 Governing
Law. The Agreement is established under, and will be construed
according to, the laws of the State of New York, to the extent that such
laws
are not preempted by the Act and valid regulations published
thereunder.
9.4 Severability. In
the event that any of the provisions of this Agreement 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.
9.5 Incapacity
of Recipient. In the event Executive 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 Agreement to which such
Executive 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 of Directors in its sole
discretion, determines that an Executive is unable to manage his financial
affairs, the Board may direct the Bank to make distributions to any person
for
the benefit of such Executive.
9.6 Unclaimed
Benefit. Executive 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 Executive is not made known to the Bank within three years after
the
date on which any payment of Executive’s Supplemental Retirement Income Benefit
may be made, payment may be made as though Executive 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 Executive,
the
Bank is unable to locate any Beneficiary of Executive, then the Bank may
fully
discharge its obligation by payment to the Estate.
9.7 Limitations
on Liability. Notwithstanding any of the preceding provisions of
the Agreement, neither the Bank, nor any individual acting as an employee
or
agent of the Bank or as a member of the Board of Directors shall be liable
to
Executive, former Executive, or any other person for any claim, loss, liability
or expense incurred in connection with the Agreement.
9.8 Gender. Whenever,
in this Agreement, 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.
9.9 Affect
on Other Corporate Benefit Agreements. Nothing contained in this
Agreement shall affect the right of Executive 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.
9.10 Headings. Headings
and sub-headings in this Agreement are inserted for reference and convenience
only and shall not be deemed a part of this Agreement.
9.11 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 Executives and their
Beneficiaries in such manner and at such times as specified in this
Agreement. 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
Agreement. 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 Agreement. To the extent the language in this
Agreement is modified by the language in the rabbi trust agreement, the rabbi
trust agreement shall supersede this Agreement. 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 Agreement, if any,
less: (i) previous contributions made on behalf of Executive to the
rabbi trust, and (ii) earnings to date on all such previous
contributions.
9.12 Tax
Withholding. Any distribution under this Agreement shall be
reduced by the amount of any taxes required to be withheld from such
distribution. This Agreement shall permit the acceleration of the
time or schedule of a payment to pay employment-related taxes as permitted
under
Treasury Regulations Section 1.409A-3(j) or to pay any taxes that may become
due
at any time that the arrangement fails to meet the requirements of Code Section
409A and the Treasury Regulations and other guidance promulgated
thereunder. In the latter case, such payments shall not exceed the
amount required to be included in income as the result of the failure to
comply
with the requirements of Code Section 409A.
9.13 Acceleration
of Payments. Except as specifically permitted herein or in other
sections of this Agreement, no acceleration of the time or schedule of any
payment may be made hereunder. Notwithstanding the foregoing,
payments may be accelerated hereunder by the Bank, in accordance with the
provisions of Treasury Regulation Section 1.409A-3(j)(4) and any subsequent
guidance issued by the United States Treasury
Department. Accordingly, payments may be accelerated, in accordance
with requirements and conditions of the Treasury Regulations (or subsequent
guidance) in the following circumstances: (i) as a result of certain domestic
relations orders; (ii) in compliance with ethics agreements with the Federal
government; (iii) in compliance with ethics laws or conflicts of interest
laws;
(iv) in limited cash-outs (but not in excess of the limit under Code Section
402(g)(1)(B)); (v) in the case of certain distributions to avoid a
non-allocation year under Code Section 409(p); (vi) to apply certain offsets
in
satisfaction of a debt of the Executive to the Bank; (vii) in satisfaction
of
certain bona fide disputes between the Executive and the Bank; or (viii)
for any
other purpose set forth in the Treasury Regulations and subsequent
guidance.
SECTION
X
NON-COMPETITION
AFTER NORMAL RETIREMENT
10.1 Non-Compete
Clause. Except as stated in the second paragraph of this
subsection, Executive 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 eighteen (18) months following termination
of
Executive’s employment, other than a termination of employment following a
Change in Control, Executive will not, without the prior written consent
of the
Bank, engage in or 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 Executive’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 Executive’s employment or
his retirement.
10.2 Benefits
Following a Change in Control. In the event of a Change in
Control, Executive shall be entitled to the benefit hereunder whether or
not he
enters into an arrangement that is deemed to be competitive with the
Bank.
10.3 Breach. In
the event of any breach by Executive of the agreements and covenants contained
herein, the Board of Directors of the Bank shall direct that any unpaid balance
of any payments to Executive under this Agreement be suspended, and shall
thereupon notify Executive of such suspensions, in writing. Thereupon, if
the
Board of Directors of the Bank shall determine that said breach by Executive
has
continued for a period of six (6) months following notification of such
suspension, all rights of Executive and his Beneficiaries under this Agreement,
including rights to further payments hereunder, shall thereupon
terminate. If, however, Executive cures such breach in all material
respects within ninety (90) days of the termination of Executive’s (and his
Beneficiaries’) rights under the Agreement, or if it is later determined by the
Bank’s Board of Directors that no breach had, in fact, occurred, then all of
Executive’s (and his Beneficiaries’) rights under the Agreement will be
immediately restored, and benefit payments, if they had begun prior to the
breach (or the action erroneously determined to be a breach), shall recommence
at the next ordinarily scheduled payment date. The first benefit
payment after recommencement shall be in an amount sufficient to place the
Executive in the position, with respect to the payment of his benefits under
the
Agreement, in which he would have been but for the suspension of his rights
due
to the Board’s determination that Executive had breached the
Agreement.
SECTION
XI
AMENDMENT,
REVOCATION OR TERMINATION
This
Agreement shall not be amended, modified, or revoked at any time, in whole
or
part, without the mutual written consent of Executive and the Bank, and such
mutual consent shall be required even if Executive is no longer employed
by the
Bank. In the event that any of the provisions of this Agreement or
portion hereof, are held to be inoperative or invalid by any court of competent
jurisdiction, or in the event that any legislation, regulation, or rule adopted
by any governmental body having jurisdiction over the Bank, including, but
not
limited to the Office of Thrift Supervision and the Internal Revenue Service,
would be retroactively applied to invalidate this Agreement or any provision
hereof or cause the benefits hereunder to be taxable, 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. 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 Agreement,
in a manner that would manifest to the maximum extent possible the original
meaning of such provisions. Notwithstanding anything to the contrary
herein, in the event of a Change in Control, the Bank may terminate the
Agreement by irrevocable action of the Bank’s Board of Directors taken within
thirty (30) days preceding, but not following, the Change in Control, provided
that (i) all agreements, methods, programs and other arrangements sponsored
by
the Bank immediately after the Change in Control with respect to which deferrals
of compensation are treated as having been deferred under a single plan pursuant
to Treasury Regulations Section 1.409A-1(c)(2), are terminated and liquidated
with respect to each Executive that experienced such Change in Control, and
(ii)
all accrued benefits payable hereunder are paid to each affected Executive
within twelve months of the Agreement’s termination.
SECTION
XII
COMPLIANCE
WITH CODE SECTION 409A
This
Agreement has been amended 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 Agreement shall be determined to be inconsistent therewith
for
any reason, then the Agreement shall be construed, to the maximum extent
possible, to give effect to such provision in a manner 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 the
Agreement or portion thereof are held to be inoperative or invalid by any
court
of competent jurisdiction, then (i) insofar as is reasonable, effect will
be
given to the intent manifested in the provisions held to be inoperative,
and
(ii) the invalidity and enforceability of the remaining provisions will not
be
affected thereby.
SECTION
XIII
EXECUTION
13.1 This
Agreement 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 Agreement.
13.2 This
Agreement 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.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the 4th day of December, 2007.
| EXECUTIVE | ||||
| December 4, 2007 | /s/ ▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇ | |||
| Dated: | ▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇ | |||
| BROOKLYN FEDERAL SAVINGS BANK | ||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||
| ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||||
| Title: Chairman | ||||
SCHEDULE
A
ACTUARIAL
ASSUMPTIONS
|
Interest
Factor:
|
6%
|
|
Actuarial
Table:
|
1983
Individual Annuity
Mortality
|
EXHIBIT
A
BENEFICIARY
DESIGNATION
Executive,
▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇, under the terms of a certain Executive Supplemental
Retirement Income Agreement by and between him and BROOKLYN FEDERAL SAVINGS
BANK, Brooklyn, New York, amended and restated effective December 1, 2007,
hereby designates the following Beneficiary to receive any guaranteed payments
or death benefits under such Agreement, following his death:
| PRIMARY BENEFICIARY: | __________________________________________ | |
| __________________________________________ | ||
| SECONDARY BENEFICIARY: | __________________________________________ | |
| __________________________________________ |
This
Beneficiary Designation hereby revokes any prior Beneficiary Designation
which
may have been in effect.
This
Beneficiary Designation is revocable by Executive at any time for any
reason. To the extent Executive desires to change the
individual(s) designated as beneficiary (ies) herein, Executive shall have
the
right to execute a new Beneficiary Designation that will effectively revoke
this
Beneficiary Designation.
DATE:
__________________, 20___
|
(WITNESS)
|
(EXECUTIVE
– Print Name)
|
|
|
(WITNESS)
|
(EXECUTIVE
– Signature)
|
EXHIBIT
B
FOR
▇▇▇▇▇▇
▇. ▇▇ ▇▇▇▇▇▇▇
TRANSITION
YEAR ELECTION FORM
Instructions: Use
this Transition Year Election Form to elect an optional form of distribution
of
the Supplemental Retirement Income Benefit (“SRIB”) under the Executive
Supplemental Retirement Income Agreement (the “Agreement”) for ▇▇▇▇▇▇ ▇. ▇▇
▇▇▇▇▇▇▇ (“Executive”). The Agreement provides that the SRIB will be
distributed in monthly installments for the longer of two hundred forty (240)
months or the Executive’s lifetime, commencing upon Executive’s Separation from
Service, Disability, or in the event of a Change in Control. Any
optional form of distribution of the SRIB elected hereunder shall be the
actuarial equivalent of the installment form of distribution described
above.
Due
to IRS rules, Executive must complete this form no later than December 31,
2008,
provided, however, that Executive may not make an election during 2007 to
cause
a payment to be made during 2007, or to otherwise delay a payment that is
scheduled to be made during 2007, and Executive may not make an election
during
2008 to cause a payment to be made during 2008, or to otherwise delay a payment
that is scheduled to be made during 2008.
If
you do not wish to change your form of payment from the installments form
of
distribution described above, please ▇▇▇▇ the box below with an “X” to indicate
that you do not wish to make any changes to the form of distributions under
the
Agreement.
|
o
|
I
do not wish to elect an optional form of distribution of my SRIB
under the
Agreement.
|
*
* * *
*
Normal
Retirement Benefit (Section 3.1 of the Agreement)
In
accordance with the terms of the
Agreement, upon my termination of employment due to my retirement following
my
Normal Retirement Date, I hereby elect to receive my SRIB in the following
optional form (check one):
| __________ | Annual installments for a period of __________ years (not to exceed 10 years) | |
| __________ |
Lump
Sum Distribution
|
Total
and Permanent Disability Benefit (Section 3.2 of the
Agreement)
In
accordance with the terms of the
Agreement, in the event of my Total and Permanent Disability, I hereby elect
to
receive my SRIB in the following optional form (check one):
| __________ | Annual installments for a period of __________ years (not to exceed 10 years) | |
| __________ |
Lump
Sum Distribution
|
Change
in Control Benefit (Section 3.3 of the Agreement)
In
accordance with the terms of the
Agreement, in the event of a Change in Control prior to my Normal Retirement
Date, I hereby elect to receive my SRIB in the following optional form (check
one):
| __________ | Annual installments for a period of __________ years (not to exceed 10 years) | |
| __________ |
Lump
Sum Distribution
|
I
understand that none of the benefits
distributed from the Agreement are eligible for tax-free rollover and I will
be
required to pay income tax on the amounts when they are paid to me.
| Date: ______________________ | Executive’s Signature: ________________ | ||
| Date: ______________________ | Bank: _____________________________ | ||
|
(duly
authorized Officer)
|
|||