KNBT BANCORP, INC. AND RETENTION PLAN AND TRUST AGREEMENT
EXHIBIT 10.11
KNBT
BANCORP, INC.
2004
AMENDED AND RESTATED RECOGNITION
AND
RETENTION PLAN AND TRUST AGREEMENT
ARTICLE
I
ESTABLISHMENT
OF THE PLAN AND TRUST
1.01 KNBT
Bancorp, Inc. (the “Corporation”) hereby amends and restates its 2004
Recognition and Retention Plan (as amended and restated, the “Plan”) and Trust
(the “Trust”) upon the terms and conditions hereinafter stated in this amended
and restated 2004 Recognition and Retention Plan and Trust Agreement (the
“Agreement”), with the amendment and restatement effective as of November 15,
2007. The Plan is being amended and restated in order to comply with
Section 409A of the Code, as defined herein.
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
The
purpose of the Plan is to retain personnel of experience and ability in key
positions by providing Employees and Non-Employee Directors with a proprietary
interest in the Corporation and its Subsidiary Companies as compensation
for
their contributions to the Corporation and the Subsidiary Companies and as
an
incentive to make such contributions in the future. Each
Recipient of a Plan Share Award hereunder is advised to consult with his
or her
personal tax advisor with respect to the tax consequences under federal,
state,
local and other tax laws of the receipt of a Plan Share Award
hereunder.
ARTICLE
III
DEFINITIONS
The
following words and phrases when used in this Agreement with an initial capital
letter, unless the context clearly indicates otherwise, shall have the meanings
set forth below. Wherever appropriate, the masculine pronouns shall
include the feminine pronouns and the singular shall include the
plural.
3.01 “Advisory
Director” means a person appointed to serve in such capacity by the Board of
either the Corporation or the Bank or the successors thereto.
3.02 “Bank”
means Keystone Nazareth Bank & Trust Company, the wholly owned subsidiary of
the Corporation.
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3.03 “Beneficiary”
means the person or persons designated by a Recipient to receive any benefits
payable under the Plan in the event of such Recipient's death. Such
person or persons shall be designated in writing on forms provided for this
purpose by the Committee and may be changed from time to time by similar
written
notice to the Committee. In the absence of a written designation, the
Beneficiary shall be the Recipient's surviving spouse, if any, or if none,
his
or her estate.
3.04 “Board”
means the Board of Directors of the Corporation.
3.05 “Change
in Control” shall mean a change in the ownership of the Corporation or the Bank,
a change in the effective control of the Corporation or the Bank or a change
in
the ownership of a substantial portion of the assets of the Corporation or
the
Bank, in each case as provided under Section 409A of the Code and the
regulations thereunder.
3.06 “Code”
means the Internal Revenue Code of 1986, as amended.
3.07 “Committee”
means the committee appointed by the Board pursuant to Article IV
hereof.
3.08 “Common
Stock” means shares of the common stock, $0.01 par value per share, of the
Corporation.
3.09 “Director”
means a member of the Board of Directors of the Corporation or a Subsidiary
Corporation or any successors thereto, including Non-Employee Directors as
well
as Officers and Employees serving as Directors.
3.10 “Disability”
means the Recipient (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
three months under an accident and health plan covering employees of the
Corporation or the Bank (or would have received such benefits for at least
three
months if he had been eligible to participate in such plan).
3.11 “Effective
Date” means the day upon which the Board originally approved this
Plan.
3.12 “Employee”
means any person who is employed by the Corporation, the Bank or a Subsidiary
Company or is an Officer of the Corporation or a Subsidiary Company, but
not
including directors who are not also Officers of or otherwise employed by
the
Corporation, the Bank or a Subsidiary Company.
2
3.13 “Employer
Group” means the Corporation and any Subsidiary Company which, with the consent
of the Board, agrees to participate in the Plan.
3.14 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
3.15 “FDIC”
means the Federal Deposit Insurance Corporation.
3.16 “Non-Employee
Director” means a member of the Board (including advisory boards, if any) of the
Corporation or any Subsidiary Company or any successor thereto, including
an
Advisory Director of the Board of the Corporation and/or any Subsidiary Company
or a former Officer or Employee of the Corporation and/or any Subsidiary
Company
serving as a Director or Advisory Director who is not an Officer or Employee
of
the Corporation or any Subsidiary Company.
3.17 “Offering”
means the offering of Common Stock to the public completed during 2003 in
connection with the conversion of the Bank from the mutual to the stock form
of
organization and the issuance of the capital stock of the Bank to the
Corporation.
3.18 “Officer”
means an Employee whose position in the Corporation or a Subsidiary Company
is
that of a corporate officer, as determined by the Board.
3.19 “Performance
Share Award” means a Plan Share Award granted to a Recipient pursuant to Section
7.05 of the Plan.
3.20 “Performance
Goal” means an objective for the Corporation or any Subsidiary Company or any
unit thereof or any Employee of the foregoing that may be established by
the
Committee for a Performance Share Award to become vested, earned or
exercisable. The establishment of Performance Goals is intended to
make the applicable Performance Share Awards “performance-based” compensation
within the meaning of Section 162(m) of the Code, and the Performance Goals
shall be based on one or more of the following criteria:
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(i)
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net
income, as adjusted for non-recurring
items;
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(ii)
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cash
earnings;
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(iii)
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earnings
per share;
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(iv)
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cash
earnings per share;
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(v)
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return
on average equity;
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(vi)
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return
on average assets;
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(vii)
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assets;
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(viii)
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stock
price;
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(ix)
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total
shareholder return;
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(x)
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capital;
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(xi)
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net
interest income;
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(xii)
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market
share;
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(xiii)
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cost
control or efficiency ratio; and
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(xiv)
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asset
growth.
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3.21 “Plan
Shares” or “Shares” means shares of Common Stock which may be distributed to a
Recipient pursuant to the Plan.
3.22 “Plan
Share Award” or “Award” means a right granted under this Plan to receive a
distribution of Plan Shares upon completion of the service requirements
described in Article VII hereof, and includes Performance Share
Awards.
3.23 “Recipient”
means an Employee or Non-Employee Director or former Employee or Non-Employee
Director who receives a Plan Share Award or Performance Share Award under
the
Plan.
3.24 “Retirement”
means:
(a)
A termination of employment which constitutes a “retirement” at the “normal
retirement age” or later under the Keystone Nazareth Bank & Trust Company
401(k) Plan or such other qualified pension benefit plan maintained by the
Corporation or a Subsidiary Company as may be designated by the Board or
the
Committee, or, if no such plan is applicable, which would constitute
“retirement” under the Keystone Nazareth Bank & Trust Company 401(k) Plan,
if such individual were a participant in that plan; provided, however, that
the
provisions of this subsection (a) will not apply as long as a Recipient
continues to serve as a Non-Employee Director, including service as an Advisory
Director; and (b) provided further that no “retirement” shall be deemed to have
occurred prior to the one-year anniversary of the grant of a Plan Share
Award.
(b) With
respect to Non-Employee Directors, retirement means retirement from service
on
the Board of Directors of the Corporation or a Subsidiary Company or any
successors thereto (including service as an Advisory Director to the Corporation
or any Subsidiary Company) after reaching normal retirement age as established
by the Company.; and provided further that no “retirement”
shall be deemed to have occurred prior to the one-year
anniversary of the grant
of a Plan Share Award.
3.25 “Subsidiary
Companies” means those subsidiaries of the Corporation, including the Bank,
which meet the definition of “subsidiary corporations” set forth in Section
424(f) of the Code, at the time of the granting of the Plan Share Award in
question.
3.26 “Trustee”
means such firm, entity or persons approved by the Board to hold legal title
to
the Plan and the Plan assets for the purposes set forth herein.
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ARTICLE
IV
ADMINISTRATION
OF THE PLAN
4.01 Duties
of the Committee. The Plan shall be
administered and interpreted by the Committee, which shall consist of two
or
more members of the Board, each of whom shall be a Non-Employee Director,
as
defined in Rule 16b-3(b)(3)(i) of the Exchange Act. In addition, each
member of the Committee shall be an (i) “outside director” within the meaning of
Section 162(m) of the Code and the regulations thereunder at such times as
is
required under such regulations and (ii) an "independent director" as such
term
is defined in Rule 4200(a)(15) of the Marketplace Rules of the Nasdaq Stock
Market. The Committee shall have all of the powers allocated to it in
this and other Sections of the Plan. 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 in the absence of action
by
the Board. 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
once per calendar year.
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
or
replace the Trustee, provided that any directors who are selected as members
of
the Committee shall be Non-Employee Directors.
4.03 Revocation
for Misconduct. Notwithstanding
anything to the contrary herein, the Board or the Committee may by resolution
immediately revoke, rescind and terminate any Plan Share Award, or portion
thereof, to the extent not yet vested, previously granted or awarded under
this
Plan to an Employee who is discharged from the employ of the Corporation
or a
Subsidiary Company for cause, which, for purposes hereof, shall mean termination
because of the Employee's personal dishonesty, incompetence, willful misconduct,
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) or final cease-and-desist
order. Unvested Plan Share Awards to a Non-Employee Director who is
removed for cause pursuant to the Corporation's Articles of Incorporation
or
Bylaws or the Bank’s Articles of Incorporation and Bylaws or the constituent
documents of such other Subsidiary Company on whose board he or she serves
shall
terminate as of the effective date of such removal.
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4.04 Limitation
on Liability. No member of the Board or
the Committee shall be liable for any determination made in good faith with
respect to the Plan or any Plan Shares or Plan Share Awards granted under
it. If a member of the Board or the Committee 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
reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Corporation shall, subject to the requirements of
applicable laws and regulations, indemnify such member against all liabilities
and expenses (including attorneys' fees), judgments, fines and amounts paid
in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he or she acted in good faith and in a manner
he
reasonably believed to be in the best interests of the Corporation
and any Subsidiary Companies and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
4.05 Compliance
with Laws and Regulations. All Awards
granted hereunder shall be subject to all applicable federal and state laws,
rules and regulations and to such approvals by any government or regulatory
agency or shareholders as may be required. The Corporation
shall not be required to issue or deliver any certificates for shares of
Common
Stock prior to the completion of any registration or qualification of or
obtaining of consents or approvals with respect to such shares under anyfederal
or state law or any rule or regulation of any government body, which the
Corporation shall, in its sole discretion, determine to be necessary or
advisable.
4.06 Restrictions
on Transfer. The Corporation may place
a legend upon any certificate representing shares issued pursuant to a Plan
Share Award noting that such shares may be restricted by applicable laws
and
regulations.
4.07 No
Deferral of Compensation Under Section 409A of the
Code. All Awards granted under the Plan are
designed to not constitute a deferral of compensation for purposes of Section
409A of the Code. No Recipient shall be permitted to defer the
recognition of income beyond the date an Award shall be deemed earned pursuant
to Article VII of this Plan.
ARTICLE
V
CONTRIBUTIONS
5.01 Amount
and Timing of Contributions. The Board
shall determine the amount (or the method of computing the amount) and timing
of
any contributions by the Corporation and any Subsidiary Companies to the
Trust
established under this Plan. Such amounts may be paid in cash or in
shares of Common Stock and shall be paid to the Trust at the designated time
of
contribution. No contributions by Employees or Non-Employee Directors
shall be permitted.
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5.02 Investment
of Trust Assets; Number of Plan
Shares. Subject to Section 8.02 hereof,
the Trustee shall invest all of the Trust's assets primarily in Common
Stock. The aggregate number of Plan Shares available for distribution
pursuant to this Plan shall be 808,047 shares of Common Stock, subject to
adjustment as provided in Section 9.01 hereof, which shares shall be purchased
(from the Corporation and/or, if permitted by applicable regulations, from
shareholders thereof) by the Trust with funds contributed by the
Corporation. During the time this Plan remains in effect, Awards to
each Employee and each Non-Employee Director shall not exceed 25% and 5%
of the
shares of Common Stock available under the Plan, respectively. Plan
Share Awards to Non-Employee Directors in the aggregate shall not exceed
30% of
the number of shares available under this Plan.
ARTICLE
VI
ELIGIBILITY;
ALLOCATIONS
6.01 Awards. Plan
Share Awards and Performance Share Awards may be made to such Employees and
Non-Employee Directors as may be selected by the Board or the
Committee. In selecting those Employees to whom Plan Share Awards
and/or Performance Share Awards may be granted and the number of Shares covered
by such Awards, the Board or the Committee shall consider the duties,
responsibilities and performance of each respective Employee and Non-Employee
Director, his or her present and potential contributions to the growth and
success of the Corporation, his or her salary or other compensation and such
other factors as deemed relevant to accomplishing the purposes of the
Plan. The Board or the Committee may but shall not be required to
request the written recommendation of the Chief Executive Officer of the
Corporation other than with respect to Plan Share Awards and/or Performance
Share Awards to be granted to him or her.
6.02 Form
of Allocation. As promptly as
practicable after an allocation pursuant to Section 6.01 that a Plan Share
Award
or a Performance Share Award is to be issued, the Board or the Committee
shall
notify the Recipient 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 shall be distributed to the Recipient. The Board or the
Committee shall maintain records as to all grants of Plan Share
Awards or Performance Share Awards under the Plan.
6.03 Allocations
Not Required to any Specific Employee or Non-Employee
Director. No Employee or Non-Employee
Director shall have any right or entitlement to receive a Plan Share Award
hereunder, with such Awards being at the total discretion of the Board or
the
Committee.
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ARTICLE
VII
EARNING
AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earning
Plan Shares; Forfeitures.
(a) General
Rules. Subject to the terms hereof,
Plan Share Awards shall be earned by a Recipient at a rate no more rapid
than
twenty percent (20%) of the aggregate number of Shares covered by the Award
as
of each annual anniversary of the date of grant of the Award, with such
vesting
rate to be determined by the Committee. If the employment of an
Employee or service as a Non-Employee Director (including for purposes
hereof
service as an Advisory Director) is terminated before the Plan Share Award
has
been completely earned for any reason (except as specifically provided
in
subsection (b) below), the Recipient shall forfeit the right to any Shares
subject to the Award which have not theretofore been earned. In the
event of a forfeiture of the right to any Shares subject to an Award, such
forfeited Shares shall become available for allocation pursuant to Section
6.01
hereof as if no Award had been previously granted with respect to such
Shares. No fractional shares shall be distributed pursuant to this
Plan.
(b) Exception
for Terminations Due to Death, Disability or Change in
Control. Notwithstanding the general
rule contained in Section 7.01(a), all Plan Shares subject to a Plan Share
Award
held by a Recipient whose employment with the Corporation or any Subsidiary
Company or service as a Non-Employee Director (including for purposes hereof
service as an Advisory Director) terminates due to death or Disability
shall be
deemed earned as of the Recipient's last day of employment with or service
to
the Corporation or any Subsidiary Company (provided, however, no such
accelerated vesting shall occur if a Recipient remains employed by or continues
to serve as a Director (including for purposes hereof service as an Advisory
Director) of at least one member of the Employer Group) and shall be distributed
as soon as practicable thereafter. Furthermore, notwithstanding the
general rule contained in Section 7.01(a), all Plan Shares subject to a
Plan
Share Award held by a Recipient shall be deemed earned as of the effective
date
of a Change in Control.
7.02 Distribution
of Dividends. Any cash dividends or
stock dividends declared in respect of each unvested Plan Share Award (excluding
any unearned Performance Share Awards) then held by the Trust will be paid
out
proportionately by the Trust to the Recipient thereof as soon as practicable
(and in any event no later than 30 days) after the Trust’s receipt thereof
to the Recipient on whose behalf such Plan Share is then held by the
Trust. Any cash dividends, stock dividends or returns of capital
declared in respect of each unvested Performance Share Award will be held
by the
Trust for the benefit of the Recipient on whose behalf such Performance Share
Award is then held by the Trust, and such dividends or returns of capital,
including any interest thereon, will be paid out proportionately by the Trust
to
the Recipient thereof as soon as practicable (and in any event no later than
30
days) after the Performance Share Awards become earned.
8
7.03 Distribution
of Plan Shares.
(a) Timing
of Distributions. General
Rule. Subject to the provisions of Section 7.05 hereof, Plan Shares
shall be distributed to the Recipient or his or her Beneficiary, as the case
may
be, as soon as practicable (and in any event no later than 30 days) after
they have been earned.
(b) Form
of Distributions. 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 and distributable. Payments representing cash
dividends shall be made in cash.
(c) Withholding. The
Trustee may withhold from any cash payment or Common Stock distribution made
under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of a cash payment is insufficient, the
Trustee may require the Recipient or Beneficiary to pay to the Trustee the
amount required to be withheld as a condition of delivering the Plan
Shares. The Trustee shall pay over to the Corporation or any
Subsidiary Company which employs or employed such Recipient any such amount
withheld from or paid by the Recipient or Beneficiary.
(d) Restrictions
on Selling of Plan Shares. Plan Share
Awards may not be sold, assigned, pledged or otherwise disposed of prior
to the
time that they are earned and distributed pursuant to the terms of this
Plan. Upon distribution, the Board or the Committee may require the
Recipient or his or her Beneficiary, as the case may be, to agree not to
sell or
otherwise dispose of his distributed Plan Shares except in accordance with
all
then applicable federal and state securities laws, and the Board or the
Committee may cause a legend to be placed on the stock certificate(s)
representing the distributed Plan Shares in order to restrict the transfer
of
the distributed Plan Shares for such period of time or under such circumstances
as the Board or the Committee, upon the advice of counsel, may deem
appropriate.
7.04 Voting
of Plan Shares. After a Plan Share
Award (other than a Performance Share Award) has been made, the
Recipient shall be entitled to direct the Trustee as to the voting of the
Plan
Shares which are covered by the Plan Share Award and which have not yet been
earned and distributed to him pursuant to Section 7.03, subject to rules
and
procedures adopted by the Committee for this purpose. All shares of
Common Stock held by the Trust which have not been awarded under a Plan Share
Award and shares subject to Performance Share Awards which have not yet vested
and shares which have been awarded as to which Recipients have not directed
the
voting shall be voted by the Trustee in its discretion.
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7.05 Performance
Awards
(a) Designation
of Performance Share Awards. The
Committee may determine to make any Plan Share Award a Performance Share
Award
by making such Plan Share Award contingent upon the achievement of a Performance
Goal or any combination of Performance Goals. Each Performance Share
Award shall be evidenced by a written agreement (“Performance Award Agreement”),
which shall set forth the Performance Goals applicable to the Performance
Share
Award, the maximum amounts payable and such other terms and conditions as
are
applicable to the Performance Share Award. Each Performance Share
Award shall be granted and administered to comply with the requirements of
Section 162(m) of the Code or any successor thereto.
(b) Timing
of Grants. Any Performance Share Award
shall be made not later than 90 days after the start of the period for which
the
Performance Share Award relates and shall be made prior to the completion
of 25%
of such period. All determinations regarding the achievement of any
Performance Goals will be made by the Committee. The Committee may
not increase during a year the amount of a Performance Share Award that would
otherwise be payable upon achievement of the Performance Goals but may reduce
or
eliminate the payments as provided for in the Award Agreement.
(c) Restrictions
on Grants. Nothing contained in the
Plan will be deemed in any way to limit or restrict the Committee from making
any Award or payment to any person under any other plan, arrangement or
understanding, whether now existing or hereafter in effect.
(d) Rights
of Recipients. Notwithstanding anything
to the contrary herein, a Participant who receives a Performance Share Award
payable in Common Stock shall have no rights as a shareholder until the Common
Stock is issued pursuant to the terms of the Performance Award
Agreement.
(e) Distribution. No
Performance Share Award or portion thereof that is subject to the attainment
or
satisfaction of a condition of a Performance Goal shall be distributed or
considered to be earned or vested until the Committee certifies in writing
that
the conditions or Performance Goal to which the distribution, earning or
vesting
of such Award is subject have been achieved.
7.06 Nontransferable. Plan
Share Awards and Performance Share Awards and rights to Plan Shares shall
not be
transferable by a Recipient, and during the lifetime of the Recipient, Plan
Shares may only be earned by and paid to a Recipient who was notified in
writing
of an Award by the Committee pursuant to Section 6.02 and/or 7.05(a), as
the
case may be. No Recipient or Beneficiary shall have any right in or
claim to any assets of the Plan or Trust, nor shall the Corporation or any
Subsidiary Company be subject to any claim for benefits hereunder.
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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 intent of this Plan and
Trust that the Trustees shall have complete authority and discretion with
respect to the arrangement, control and investment of the Trust, and that
the
Trustees shall invest all assets of the Trust in Common Stock to the fullest
extent practicable, except to the extent that the Trustees determine 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 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
Trustees are authorized to purchase Common Stock from the Corporation 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, 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 in the opinion of the Trustees
be 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
Recipient 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
of
the Trust.
Notwithstanding
anything herein contained to the contrary, the Trustees shall not be required
to
make any inventory, appraisal or settlement or report to any court, or to
secure
any order of court for the exercise of any power herein contained, or give
bond.
8.03 Records
and Accounts. The Trustees 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 Board or the Committee.
8.04 Expenses. All
costs and expenses incurred in the operation and administration of this Plan
shall be borne by the Corporation or, in the discretion of the Corporation,
the
Trust.
8.05 Indemnification. Subject
to the requirements of applicable laws and regulations, the Corporation shall
indemnify, defend and hold theTrustees harmless against all claims, expenses
and
liabilities arising out of or related to the exercise of the Trustees’ 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 distribution pursuant to the Plan Share Awards and the number
of
Shares to which any unvested 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 shares or other capital
adjustment, the payment of a stock dividend or other increase or decrease
in
such shares effected without receipt or payment of consideration by the
Corporation. If, upon a merger, consolidation, reorganization,
liquidation, recapitalization or the like of the Corporation or of another
corporation, the shares of the Corporation's Common Stock shall be exchanged
for
other securities of the Corporation or of another corporation, each Recipient
of
a Plan Share Award shall be entitled, subject to the conditions herein stated,
to receive such number of shares of Common Stock or amount of other securities
of the Corporation or such other corporation as were exchangeable for the
number
of shares of Common Stock of the Corporation which such Recipients would
have
been entitled to receive except for such action.
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9.02 Amendment
and Termination of Plan. The Board may, by resolution,
at any time amend or terminate the Plan, subject to any required shareholder
approval or any shareholder approval which the Board may deem to be advisable
for any reason, such as for the purpose of obtaining or retaining any statutory
or regulatory benefits under tax, securities or other laws or satisfying
any
applicable stock exchange listing requirements. The Board may not,
without the consent of the Recipient, alter or impair his or her Plan Share
Award except as specifically authorized herein. Notwithstanding any
other provision of the Plan, this Plan may not be terminated until such time
as
all Plan Shares held by the Trust have been awarded to Plan Recipients and
shall
be deemed to be earned prior to the time of termination.
9.03 Employment
or Service Rights. Neither the Plan nor any grant of a
Plan Share Award, Performance 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 on the part of any Employee or Non-Employee Director
to continue in such capacity.
9.04 Voting
and Dividend Rights. No Recipient shall have any voting
or dividend rights or other rights of a shareholder in respect of any Plan
Shares covered by a Plan Share Award or Performance Share Award, except as
expressly provided in Sections 7.02, 7.04 and 7.05 above, prior to the time
said
Plan Shares are actually earned and distributed to him.
9.05 Governing
Law. To the extent not governed by federal law, the Plan
and Trust shall be governed by the laws of the Commonwealth of
Pennsylvania.
9.06 Effective
Date. This Plan as originally adopted was effective as
of the Effective Date, and Awards may be granted hereunder no earlier than
the
date this Plan was approved by the shareholders of the Corporation and prior
to
the termination of the Plan. Notwithstanding the foregoing or
anything to the contrary in this Plan, the implementation of this Plan was
subject to the approval of the Corporation's shareholders. The
amendment and restatement of this Plan shall be effective as of November
15,
2007.
9.07 Term
of Plan. This Plan shall remain in effect until the
earlier of (i) ten (10) years from the Effective Date, (ii) termination by
the
Board, or (iii) the distribution to Recipients and Beneficiaries of all the
assets of the Trust.
9.08 Tax
Status of Trust. It is intended that the trust
established hereby be treated as a Grantor Trust of the Corporation under
the
provisions of Section 671 et seq. of the Code, as the same may be amended
from
time to time.
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IN
WITNESS WHEREOF, the Corporation has caused this amended and restated
Agreement to be executed by its duly authorized officers and the corporate
seal
to be affixed and duly attested, and the initial Trustees of the Trust
established pursuant hereto have duly and validly executed this Agreement,
all
on this 15th day of November 2007.
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KNBT
BANCORP, INC.
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TRUSTEES:
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By:
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▇▇▇▇▇
▇.▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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President
and CEO
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R.
▇▇▇▇▇▇▇▇ ▇▇▇▇, Jr.
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
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R.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, III
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