AMENDED AND RESTATED
FIRST NIAGARA BANK AND FIRST NIAGARA FINANCIAL GROUP, INC.
DIRECTORS DEFERRED FEES PLAN
ARTICLE I
BACKGROUND, PURPOSE, AND EFFECTIVE DATE
Section 1.01 Background and Purpose of the Plan;
Certain Definitions
First Niagara Bank (formerly Lockport Savings
Bank) (the “Bank”), established the First Niagara Bank
Directors Deferred Fees Plan (formerly Lockport Savings Bank
Trustees Deferred Fees Plan) to allow members of its Board of
Directors (formerly known as Trustees) the opportunity to defer
payment of all or portions of the fees they receive for serving as
Directors. The Bank reorganized from a mutual savings bank to a
stock form of organization on April 20, 1998 (the
“Reorganization”). Upon completion of the
Reorganization, Bank became a wholly-owned subsidiary of First
Niagara Financial Group, Inc. (“FNFG”). The Plan has
been amended and restated, effective January 1, 2005 to comply
with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations issued
thereunder.
As used in this Agreement, the term
“Company” shall mean (i) Bank with respect to a
member of the Board of Directors of Bank and (ii) FNFG with
respect to a member of the Board of Directors of FNFG. Further,
“Director” shall mean an individual who is either a
member of the Board of Directors of Bank or FNFG. Unless the
context would clearly indicate otherwise, references to a Director
under this Agreement shall also mean a Trustee of Lockport Savings
Bank who served as a Trustee prior to the effective date of the
Reorganization.
Section 1.02 Effective Date and Term
The Plan was originally effective
August 18, 1992. The Plan was amended and restated, effective
April 20, 1998, and is further amended and restated effective
January 1, 2005. The Plan shall continue until such time as it
is terminated by resolution of the Board of Directors of Bank in
accordance with Article V.
Section 2.01 Deferred Fees
a. Initial Election . Each
participating Director of the Company shall have the right to elect
to defer the receipt of all or any part of the compensation to
which such Director would otherwise be entitled as director’s
fees or committee fees, in which the Company shall credit the
Director’s Deferred Fee Account, as herein defined, with such
deferred compensation to be payable at the time or times and in the
manner herein stated. Each new Director electing to defer the
receipt of compensation shall execute and deliver to the Company a
“Deferral Election Form,” in the form attached hereto
as Exhibit A within thirty (30) days from the date in
which the Director becomes eligible to participate in the Plan. For
other Directors who are eligible to participate in the Plan and
deliver to the Company an executed Deferral Election Form after the
thirty (30) day period following their initial eligibility,
such Deferral Election Form shall apply to services performed in
the Plan Year next following the year in which the Company receives
the executed Deferral Election Form from the Director.
b. Changes in Election . An
election to defer compensation shall continue in effect until
changed or revoked. All changes and revocations shall be made in
writing in the form of Notice of Adjustment of Deferral attached
hereto as Exhibit B. Such notice shall be effective upon the
January 1 st
of the year stated therein provided
the form is executed and delivered to the Company by
December 15 th of
the previous calendar year.
c. Restricted Stock Units
(“RSUs”) . Directors may elect before the beginning
of any Plan Year to receive a grant of restricted stock units
(RSUs) under the Company’s Amended and Restated 2002
Long-Term Incentive Stock Benefit Plan (the “Stock
Plan”) (or any successor plan) instead of an annual grant of
restricted stock for the upcoming year. Such elections shall be
made in the form attached hereto as Exhibit E. Dividend
equivalent units (“DEUs”) earned on RSUs shall be
accumulated and added to the RSUs.
ARTICLE III
ACCOUNT AND INVESTMENT
Section 3.01 The Deferred Fees
Account
a. Maintenance of the Account . The
Company shall maintain for each Director who has elected to defer
fees pursuant to Section 2.01 an account (the “Deferred
Fees Account”) to which it shall credit all amounts allocated
thereto in accordance with Section 2.01. RSUs shall be
separately accounted for. Each Director’s Deferred Fees
Account shall be adjusted no less often than monthly to reflect the
net market value of assets in the Deferred Fees Account under
Section 2.01 and pursuant to Section 3.02. Such
adjustments shall be made until no amounts remain in the
Account.
b. Neither RSUs
nor Deferred Fees Accounts shall constitute a trust or escrow
fund.
c. Each Director’s interest in his or
her Deferred Fees Account RSUs and DEUs is limited to the right to
receive payments under this Plan, and the Director’s position
is that of a general unsecured creditor of the Company.
Section 3.02 Power to Invest
a. All RSUs and DEUs shall be deemed
invested in Company stock. The Company shall invest all other
amounts in the Deferred Fees Account. Amounts in the Deferred Fees
Account shall be invested in equity securities, fixed income
securities, money market accounts and cash, in the sole discretion
of the Company. The Company in its sole discretion may permit a
Director to designate that the amounts represented by his or her
Deferred Fees Account be invested in such particular investments
that the Company shall from time to time provide as permitted
investments under the Plan, including investments in the common
stock of FNFG. Notwithstanding the foregoing, in all cases any
investment shall be in property and securities eligible for
investment by savings banks under the New York Banking
Law.
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b. Any change in net market value of assets
in the Deferred Fees Account shall be reflected in the Deferred
Fees Account on a monthly basis.
c. The Company shall not be liable to the
Director or his or her beneficiary for any loss or other claim
arising out of its investment policy except for that caused by its
gross negligence or willful misconduct.
a. RSUs and
DEUs shall vest on the last day of the calendar year for which they
are awarded.
b. At all times a Director shall have a
100% nonforfeitable right to all other amounts credited to his or
her Deferred Fees Account; provided that neither a Director nor his
or her Beneficiary shall be entitled to receive any amount in the
Director’s Deferred Fees Account if it is determined at any
time that such Director engaged in a dishonest act in the
Director’s relationship with the Company.
Section 4.01 Upon Cessation of Service as
Director
a. Payment of Benefits . Following
a Director’s cessation of service as Director for any reason
other than death (the date of which shall be referred to as the
“Date of Cessation”), the Company shall pay to Director
the value of the RSUs, DEUs and the Deferred Fees Account (the
“Benefits”), including adjustments that continue to be
made pursuant to Article III, in a number of substantially
equal annual payments, as elected by a Director. The most recent
payment schedule elected by the Director shall apply to all
Benefits hereunder, provided that such election was made in
accordance with all applicable laws.
b. Separation from Service .
Notwithstanding the foregoing, with respect to employee-Directors,
Cessation of Service as used herein shall mean “Separation
from Service” as defined in Code Section 409A, and the
Treasury Regulations promulgated thereunder, provided, however,
that the Company and Executive reasonably anticipate that the level
of bona fide services Executive would perform after termination
would permanently decrease to a level that is less than 50% of the
average level of bona fide services performed (whether as an
employee or an independent contractor) over the immediately
preceding 36-month period. With respect to non-employee-Directors,
Cessation of Service as u
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