EXHIBIT 10.6
AMENDED AND
RESTATED
SUPPLEMENTAL EXECUTIVE SAVINGS
PLAN
OF
THE PROVIDENT
BANK
WHEREAS, The Provident Bank (the
“Bank”) sponsors the Supplemental Executive Savings
Plan (the “Plan”) of Provident Bank for the benefit of
certain senior executives whose benefits are limited under The
Provident Bank Employee Savings Incentive Plan, a tax-qualified
thrift savings plan (the “Savings Plan”) due to
limitations imposed by Sections 401(a)(17), 401(m) and 415 of the
Internal Revenue Code (“Code”) (hereinafter, said
limitations shall be referred to collectively as the
“Applicable Limitations”); and
WHEREAS, in connection with its
conversion to a stock form savings bank as the wholly-owned
subsidiary of Provident Financial Services, Inc. (the
“Company”) and initial offering of the common stock of
the (“Company Stock”), the Bank intends to adopt a
tax-qualified Employee Stock Ownership Plan (“ESOP”)
and to have the ESOP obtain a loan to purchase up to 8% of the
shares issued in the offering; and
WHEREAS, in consideration of the
above, the Bank recently amended the Plan in order to
(i) credit the accounts of Participants with supplemental ESOP
benefits to the extent that the Applicable Limitations limit the
amount of benefits to such persons in the tax-qualified ESOP,
(ii) revise the definition of “change in control”
to conform to the definition in its other benefit plans and
arrangements, and (iii) for certain other purposes set forth
herein; and
WHEREAS, the Bank now desires to
amend and restate the Plan to permit eligible executives to make a
special one-time election to invest all or any portion of their
existing account balance in the Plan in Company Stock.
NOW THEREFORE, in consideration of
the foregoing, the Supplemental Executive Savings Plan of The
Provident Bank (the “Plan”) is hereby amended and
restated effective December 1, 2002 in accordance with the
following:
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1.
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Participation . Participation in this Plan shall be limited to
a select group of management or highly compensated employees of the
Bank whose benefits under the Savings Plan and ESOP are affected by
Section 401(a)(17), 401(m), or Section 415 of the Code
and who are designated by the Board of Managers to participate in
this Plan (hereinafter “Employee”). Those Employees who
are designated to participate and who, in fact, participate shall
sometimes hereinafter be referred to as
“Participants”.
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2. A.
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Supplemental Savings Plan
Benefits . The Bank will
pay to or in respect of each Employee an amount equal to the amount
which would have been payable under the terms of the Savings Plan
but for the limitations under Sections 401(a)(17), 401(m), and 415
of the Code less the amount payable under the terms of the Savings
Plan. The Bank will also pay to or in respect of each Employee an
amount equal to the amount which would have been payable under the
terms of the Savings Plan for any deferred compensation in the form
of deferred raises. Such amounts, which shall be contingent upon
the Employee deferring 5% of his Compensation, on a pre-tax basis,
(minus the amount actually contributed to the Savings Plan) to this
Plan, shall be paid commencing no later than ninety (90) days
following termination of employment, but in no event before age 60,
in 180 monthly installments, provided, however, that if
the
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amount attributable to the Employee
is equal to or less than Twenty-Five Thousand Dollars ($25,000) (or
such other amount as the Board of Managers may be resolution
determine), the Board of Managers, may in its sole discretion
determine that the Employee’s account shall be distributed in
a lump sum within ninety (90) days following termination of
employment, irrespective of the Employee’s age at
termination. Notwithstanding anything herein to the contrary, if
the Employee has a portion of his Supplemental Savings benefit
invested in Company Stock, as contemplated under Section 4.B
hereof, the amount so invested shall be distributed in-kind in a
lump sum distribution no later than ninety (90) days following
termination of employment and the remainder of his account shall be
paid in 180 monthly installments as contemplated above.
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Effective for all periods after
December 31, 2003, no further amounts will be credited under
this Section to any Employee in the Plan. With respect to the Plan
year ending December 31, 2003, the Bank shall credit one final
contribution to the Plan for the benefit of Employee participants
pursuant to this Section. Such contribution shall be made or
credited on or before December 31, 2003, in an amount to be
determined by the Board.
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B.
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Supplemental
ESOP Benefit . Each year,
the Bank shall credit the account (or applicable sub-account) of
each Participant, with a number of units of Phantom Stock, which
number shall be determined in the following manner: the Bank shall
determine (in accordance with such procedures as it may determine)
the amount by which the Participant’s maximum contribution
under the ESOP exceeds his actual contribution due to the
reductions imposed by the Applicable Limitations and then shall
determine the number of shares of Stock such amount would have
purchased under the ESOP if it had been contributed to the ESOP for
the benefit of the Participant. The number of shares of Company
Stock such amount would have purchased under the ESOP, shall for
these purposes, be converted into units of Phantom Stock and shall
be credited to the Participant’s sub-account. The
Bank’s determination regarding “the number of shares of
Company Stock such amount would have purchased under the
ESOP” may take into consideration such factors as: whether
the additional amount, if contributed to the ESOP, would have been
used to repay an outstanding ESOP loan, and if so, the appropriate
number of additional shares to be released from the suspense
account and allocated to the Participant’s account based on
such ESOP loan payment.
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Effective with respect to Plan years
commencing after December 31, 2003, no further contributions
of units of Phantom Stock shall be credited to the Supplemental
ESOP portion of the Plan. With respect to the Plan year ending
December 31, 2003, the Bank shall credit one final
contribution of Phantom Stock to the Plan for the benefit of
Employee participants pursuant to this Section. Such contribution
shall be determined in accordance with the previous provisions of
this paragraph as soon as administratively feasible after the end
of the ESOP plan year ending December 31, 2003.
Notwithstanding the foregoing, nothing herein contained shall be
construed as prohibiting the crediting of units of Phantom Stock
based on earnings on or dividends credited to the units previously
allocated to Employee participants accounts hereunder.
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(i)
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Crediting of
Earnings. Phantom Stock credited to a Participant’s account
under this Section shall be credited with dividends at the same
time and in the same manner as is applicable to the Company Stock
held in the Participant’s account under the ESOP. Cash
dividends allocated to a Participant’s account shall be
credited with interest at a rate determined by the Board of
Managers.
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(ii)
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Stock Dividends
and Stock Splits. In the case of a stock dividend or stock split,
additional units of Phantom Stock shall be credited to each
Participant’s account under the Plan.
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(iii)
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Valuation of
Sub-Accounts. The value of a Participant’s ESOP sub-account
shall be determined as of each “valuation date” (as
determined by the Bank) in the following manner:
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(a)
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First, the Bank
will add the earnings to the Participant’s sub-account in
accordance with Section 2 B(i).
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(b)
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Next, all Bank
contributions to the Participant’s ESOP Sub-Account shall be
credited in accordance with Section 2B.
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(c)
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Finally, a
Participant’s ESOP sub-account shall be reduced by the amount
of any benefits distributed to or on behalf of the Participant from
said sub-account, if any.
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(d)
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Each
Participant’s ESOP sub-account shall be valued as of each
valuation date or more frequently, as determined in the sole
discretion of the Bank, and shall again be valued as of the date
that a Participant receives a payment under the Plan attributable
thereto, in accordance with the procedures established by the
Bank.
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(e)
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All allocations
to and deductions from a Participant’s account under this
Section 2.B(iii) shall be deemed to have been made on the
applicable valuation date in the order of priority set forth in
this Section, even though actually determined at a later
date.
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(iv)
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Distribution of
Supplemental ESOP Benefit. Except to the extent that a different
time or different manner of distribution is specifically set forth
in this Plan, the supplemental ESOP benefit shall be distributed at
the same time and in the same manner, i.e., lump sum or
installments, as the benefit payable under the ESOP. A
Participant’s supplemental ESOP benefit under this Plan shall
be a benefit paid in the form of Company Stock to the extent of the
units of Phantom Stock credited to the Participant’s account.
The value of a Participant’s supplemental ESOP benefit at the
time of distribution shall be equal to the number of units of
Phantom Stock allocated to the Participant’s Account
multiplied by the fair market value of a share of Company Stock on
the date of distribution plus the dollar value of any earnings
thereon.
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3. A.
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The accounts of
Participants who are not employed by The Provident Bank on or after
January 1, 1998 shall be allocated earnings once a month at
the same rate as the Provident prime rate.
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B.
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The Bank shall establish a fund
(“Fund”) in order to provide for the payment of the
amounts due under this Plan to employees who are employed by The
Provident Bank on or after January 1, 1998. The Fund shall be
held separate and apart from other assets of the Bank and shall be
used exclusively for the uses and purposes herein set
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forth. The amounts credited to the
benefit of each Employee under the Fund shall be segregated into
sub-accounts representing the “Supplemental Savings”
benefit and the “Supple
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