AMENDED AND
RESTATED
POLONIA BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
As of January 1,
2005
Amended and
Restated
Polonia Bank
Supplemental Executive Retirement
Plan
Table of Contents
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ARTICLE
I
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Introduction
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1
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ARTICLE
II
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Definitions
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1
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ARTICLE
III
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Eligibility and
Participation
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3
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ARTICLE
IV
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Benefits
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3
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ARTICLE
V
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Accounts
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4
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ARTICLE
VI
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Supplemental
Benefit Payments
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5
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ARTICLE
VII
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Claims
Procedures
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5
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ARTICLE
VIII
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Amendment and
Termination
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6
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ARTICLE
IX
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General
Provisions
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7
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ARTICLE I
INTRODUCTION
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Purpose,
Design and Intent .
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The purpose of the Polonia Bank Supplemental
Executive Retirement Plan (the “Plan”) is to assist
Polonia Bank (the “Bank”) and its affiliates in
retaining the services of key employees until their retirement, to
induce such employees to use their best efforts to enhance the
business of the Bank and its affiliates, and to provide certain
supplemental retirement benefits to such employees.
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The Plan, in
relevant part, is intended to constitute an unfunded “excess
benefit plan” as defined in Section 3(36) of the Employee
Retirement Income Security Act of 1974, as amended. In
this respect, the Plan is specifically designed to provide certain
key employees with retirement benefits that would have been
provided under various tax-qualified retirement plans sponsored by
the Bank but for the applicable limitations placed on benefits and
contributions under such plans by various provisions of the
Internal Revenue Code of 1986, as amended.
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The Bank is
amending and restating the Plan in its entirety effective as of
January 1, 2005 to comply with Section 409A of the Code.
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ARTICLE II
DEFINITIONS
Section 2.01
Definitions .
In this Plan,
whenever the context so indicates, the singular or the plural
number and the masculine or feminine gender shall be deemed to
include the other, the terms “he,” “his,”
and “him,” shall refer to a Participant or a
beneficiary of a Participant, as the case may be, and, except as
otherwise provided, or unless the context otherwise requires, the
capitalized terms shall have the following meanings:
(a)
“Affiliate” means any corporation, trade
or business, which, at the time of reference, is together with the
Bank, a member of a controlled group of corporations, a group of
trades or businesses (whether or not incorporated) under common
control, or an affiliated service group, as described in Sections
414(b), 414(c), and 414(m) of the Code, respectively, or any other
organization treated as a single employer with the Bank under
Section 414(o) of the Code.
(b)
“Applicable Limitations” means one or
more of the following, as applicable:
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the maximum
limitations on annual additions to a tax-qualified defined
contribution plan under Section 415(c) of the Code;
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the maximum
limitation on the annual amount of compensation that may, under
Section 401(a)(17) of the Code, be taken into account in
determining contributions to and benefits under tax-qualified
plans; and
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the maximum
limitations, under Sections 401(k), 401(m), or 402(g) of the Code,
on pre-tax contributions that may be made to a qualified defined
contribution plan.
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(c)
“Bank” means Polonia Bank
and its successors.
(d)
“Board of Directors” means the Board of
Directors of the Bank.
(e)
“Change in Control” means the earliest
occurrence of a “change in ownership,” “change in
effective control,” or “change in ownership of a
substantial portion of assets” for purposes of Section 409A
of the Code.
(f)
“Code” means the Internal Revenue Code of
1986, as amended.
(g)
“Committee” means the person(s)
designated by the Board of Directors, pursuant to Section 9.02 of
the Plan, to administer the Plan.
(h)
“Common Stock” means the common stock of
the Company.
(i)
“Company” means Polonia Bancorp and its
successors.
(j)
“Eligible Individual” means any Employee
who participates in the ESOP or the 401(k) Plan, as the case may
be, and whom the Board of Directors determines is one of a
“select group of management or highly compensated
employees,” as such phrase is used for purposes of Sections
101, 201, and 301 of ERISA.
(k)
“Employee” means any person employed by
the Bank or an Affiliate.
(l)
“Employer” means the Bank or Affiliate
thereof that employs the Employee.
(m)
“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended.
(n)
“ESOP” means the Polonia Bank Employee
Stock Ownership Plan, as amended from time to time.
(o)
“ESOP Acquisition Loan” means a loan or
other extension of credit incurred by the trustee of the ESOP in
connection with the purchase of Common Stock on behalf of the
ESOP.
(p)
“ESOP Valuation Date” means any day as of
which the investment experience of the trust fund of the ESOP is
determined and individuals’ accounts under the ESOP are
adjusted accordingly.
(q)
“Effective Date” means January 1,
2007.
(r)
“Participant” means an Eligible Employee
who is entitled to benefits under the Plan.
(s)
“Plan” means this Polonia Bank
Supplemental Executive Retirement Plan, as amended and
restated.
(t)
“Separation from Service” means a
Participant’s separation from service with the Bank within
the meaning of Section 409A of the Code.
(u)
“Specified Employee” means, as of a given
date, a “specified employee” as of such date for
purpose of Section 409A of the Code.
(v)
“Supplemental ESOP Account” means an
account established by an Employer, pursuant to Section 5.01 of the
Plan, with respect to a Participant’s Supplemental ESOP
Benefit.
(w)
“Supplemental ESOP Benefit” means the
benefit credited to a Participant pursuant to Section 4.01 of the
Plan.
(x)
“Supplemental Stock Ownership Account”
means an account established by an Employer, pursuant to Section
5.02 of the Plan, with respect to a Participant’s
Supplemental Stock Ownership Benefit.
(y)
“Supplemental Stock Ownership Benefit”
means the benefit credited to a Participant pursuant to Section
4.02 of the Plan.
ARTICLE III
ELIGIBILITY AND
PARTICIPATION
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Eligibility and Participation
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Each Eligible
Employee may participate in the Plan. An Eligible
Employee shall become a Participant in the Plan upon designation as
such by the Board of Directors. An Eligible Employee
whom the Board of Directors designates as a Participant in the Plan
shall commence participation as of the date established by the
Board of Directors. The Board of Directors shall
establish an Eligible Employee’s date of participation at the
same time it designates the Eligible Employee as a Participant in
the Plan.
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The Board of
Directors may, at any time, designate an Eligible Employee as a
Participant for any or all supplemental benefits provided for under
Article IV of the Plan.
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ARTICLE IV
BENEFITS
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Supplemental ESOP Benefit
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As of the last
day of each plan year of the ESOP, the Employer shall credit the
Participant’s Supplemental ESOP Account with a Supplemental
ESOP Benefit equal to the excess of (a) over (b), where:
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Equals the
annual contributions made by the Employer and/or the number of
shares of Common Stock released for allocation in connection with
the repayment of an ESOP Acquisition Loan that would otherwise be
allocated to the accounts of the Participant under the ESOP for the
applicable plan year, if the provisions of the ESOP were
administered without regard to any of the Applicable Limitations;
and
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Equals the
annual contributions made by the Employer and/or the number of
shares of common stock released for allocation in connection with
the repayment of an ESOP Acquisition Loan that are actually
allocated to the accounts of the Participant under the provisions
of the ESOP for that particular plan year, after giving effect to
any reduction of such allocation required by any of the Applicable
Limitations.
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Supplemental Stock Ownership
Benefit .
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Upon a Change
in Control, the Employer shall credit to the Participant’s
Supplemental Stock Ownership Account a Supplemental Stock Ownership
Benefit equal to (i) less (ii), the result of which is multiplied
by (iii), where:
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Equals the
total number of shares of Common Stock acquired with the proceeds
of all ESOP Acquisition Loans (together with any dividends, cash
proceeds, or other medium related to such ESOP Acquisition Loans)
that would have been allocated or credited for the benefit of the
Participant under the ESOP and/or this Plan, as the case may be,
had the Participant continued in the employ of the Employer through
the first ESOP Valuation Date following the last scheduled payment
of principal and interest on all ESOP Acquisition Loans outstanding
at the time of the Change in Control; and
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Equals the
total number of shares of Common Stock acquired with the proceeds
of all ESOP Acquisition Loans (together with any dividends, cash
proceeds, or other medium related to such ESOP Acquisition Loans)
and allocated for the benefit of the Participant under the ESOP
and/or this Plan, as the case may be, as of the first ESOP
Valuation Date following the Change in Control; and
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Equals the fair
market value of the Common Stock immediately preceding the Change
in Control.
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For purposes of
clause (i) of subsection (a) of this Section 4.02, the total number
of shares of Common Stock shall be determined by multiplying the
sum of (i) and (ii) by (iii), where:
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Equals the
average of the total shares of Common Stock acquired with the
proceeds of an ESOP Acquisition Loan and allocated for the benefit
of the Participant under the ESOP as of the three most recent ESOP
Valuation Dates preceding the Change in Control (or lesser number
if the Participant has not participated in the ESOP for three full
years);
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Equals the
average number of shares of Common Stock credited to the
Participant’s Supplemental ESOP Account for the three most
recent plan years of the ESOP (such that the three most recent plan
years coincide with the three most recent ESOP Valuation Dates
referred to in (i) above); and
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Equals the
original number of scheduled annual payments on the ESOP
Acquisition Loan.
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ARTICLE V
ACCOUNTS
Section
5.01
Supplemental ESOP Benefit Account .
For each
Participant who is credited with a benefit pursuant to Section 4.01
of the Plan, the Employer shall establish, as a memorandum account
on its books, a Supplemental ESOP Account. Each year,
the Committee shall credit to the Participant’s Supplemental
ESO
