Exhibit 10-13
 

 

 

 

 

 

 
DEFERRED COMPENSATION PLAN FOR DIRECTORS
 
OF
 
ASTORIA FINANCIAL CORPORATION
 

 

Adopted on December 21, 1994
Effective as of January 1, 1995
As Amended Effective January 1, 2009
 
 
 

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TABLE OF CONTENTS
 

   
Page
     
ARTICLE I
     
DEFINITIONS
     
Section 1.1
Administrator
1
Section 1.2
Association
1
Section 1.3
Board
1
Section 1.4
Change of Control
1
Section 1.5
Code
1
Section 1.6
Director
1
Section 1.7
Exchange Act
1
Section 1.8
Fees
1
Section 1.9
Holding Company
1
Section 1.10
Memorandum Account
1
Section 1.11
Participant
1
Section 1.12
Participating Company
2
Section 1.13
Plan
2

ARTICLE II

PARTICIPATION

Section 2.1
Election to Participate
2
Section 2.2
Changes in Participation
2

ARTICLE III

DEFERRED AMOUNTS

Section 3.1
In General
2
Section 3.2
Interest Credited to the Memorandum Account
3
Section 3.3
Vesting
3

ARTICLE IV

DISTRIBUTIONS

Section 4.1
Distributions to Participants
3
Section 4.2
Change of Payment Schedule
5
Section 4.3
Distributions to Beneficiaries
5

 

 
 

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Page
     
ARTICLE V
 
 
 
CHANGE OF CONTROL
     
Section 5.1
Change of Control Defined
6
Section 5.2
Participants' Options upon a Change of Control
6

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.1
Notice and Election
7
Section 6.2
Construction and Language
7
Section 6.3
Headings
7
Section 6.4
Non-Alienation of Benefits
7
Section 6.5
Indemnification
7
Section 6.6
Severability
7
Section 6.7
Waiver
8
Section 6.8
Governing Law
8
Section 6.9
Taxes
8
Section 6.10
No Deposit Account
8
Section 6.11
Compliance with Internal Revenue Code Section 409A
8
Section 6.12
Amendment and Termination
9

 

 
 

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DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
ASTORIA FINANCIAL CORPORATION
 
ARTICLE I
 

 
DEFINITIONS
 
The following definitions shall apply for the purposes of this Plan unless a
different meaning is clearly indicated by the context:
 
Section 1.1 Administrator  means the Compensation Committee of the Board.
 
Section 1.2 Association  means Astoria Federal Savings and Loan Association.
 
Section 1.3 Board  means the Board of Directors of the Holding Company.
 
Section 1.4 Change of Control  has the meaning set forth in section 5.1.
 
Section 1.5 Code  means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).
 
Section 1.6 Director  means any member of the Board of Directors of any
Participating Company who is not an employee of any Participating Company. The
term "Director" shall not include any individual to the extent that his service
is as a director emeritus or a member of an advisory board.
 
Section 1.7 Exchange Act  means the Securities Exchange Act of 1934, as amended
(including the corresponding provisions of any succeeding law).
 
Section 1.8 Fees  means, with respect to any Director, compensation payable for
services as a member of the Board of Directors of a Participating Company,
including annual retainers, fees for attendance at meetings, and special
compensation as a chairman and/or a member of a committee of Directors.
 
Section 1.9 Holding Company  means Astoria Financial Corporation.
 
Section 1.10 Memorandum Account  means, with respect to a Participant, an
account maintained by the Holding Company to which is credited the amount of the
Participant's deferred Fees together with interest thereon pursuant to section
3.2, and against which are charged any distributions of amounts credited to the
Memorandum Account.
 
Section 1.11 Participant  means a Director who has a Memorandum Account under
the Plan.
 
 
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Section 1.12 Participating Company  means the Holding Company, the Association,
and any other company which, with the prior approval of the Administrator, may
adopt this Plan.
 
Section 1.13 Plan  means this Deferred Compensation Plan for Directors. The Plan
may be referred to as the "Deferred Compensation Plan for Directors of Astoria
Financial Corporation.
 
ARTICLE II

 
PARTICIPATION
 
Section 2.1 Election to Participate.
 
Any Director may elect to become a Participant in the Plan by submitting to the
Administrator a written election to defer receipt of all or a specified part of
his Fees. Such election shall be made on or before the last day of any calendar
year and shall be effective for the calendar year following the calendar year in
which such election is made; provided, however, that in the case of initial
elections made during 1994 or during the thirty (30) days after a person is
first elected or appointed to serve as a Director, such election may be
effective for Fees earned on or after an earlier date designated by the Director
that is after the last day of the calendar month in which such election is filed
with the Administrator. Once an election is made, it shall continue in effect
for all succeeding calendar years until changed or revoked pursuant to section
2.2.
 
Section 2.2 Changes in Participation.
 
An election by a Director pursuant to section 2.1 shall continue in effect until
termination of service as a Director; provided, however, that the Director may,
by written election filed with the Administrator, increase or decrease the
portion of his Fees to be deferred or discontinue such deferral altogether. Such
election shall be effective with respect to Fees earned after the calendar year
in which such election is filed with the Administrator. In the event that a
Participant ceases to be a Director or in the event that a Director ceases to
defer receipt of his Fees, the balance in his Memorandum Account shall continue
to be credited with interest in accordance with Article V. A Director who has
filed a written election to cease deferring receipt of his Fees may thereafter
again file an election to defer receipt of all or any portion of his Fees
pursuant to section 2.1, effective for the calendar year subsequent to the
calendar year in which he files the new election.
 
ARTICLE III

 
DEFERRED AMOUNTS
 
Section 3.1 In General.
 
The Administrator shall maintain a separate Memorandum Account for each
Participant. The amount of a Participant's Fees deferred pursuant to section 2.1
shall be credited to his Memorandum Account as of the date on which such Fees
would have been paid if an
 
 
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election to defer were not in effect. Neither the Association nor any
Participating Company shall fund its liability for the balances credited to a
Memorandum Account, but each shall reflect its liability for such balances on
its books. The Holding Company may, on such terms and conditions as it may, in
its discretion, establish and agree to assume the liability for the payment of
deferred Fees and interest thereon attributable to service for the Association
or other Participating Companies.
 
Section 3.2 Interest Credited to the Memorandum Account.
 
A Participant's Memorandum Account shall be credited with interest as of the
last day of each calendar quarter. Such interest credit shall be equal to the
product of:
 
(a)           the average daily balance in the Memorandum Account during the
quarter then ended; multiplied by
 
(b)           twenty-five percent (25%) of the lower of:
 
(i)           the average (on a consolidated basis) of (A) the Holding Company's
yield (expressed as an annual percentage rate) on its average investments for
the preceding quarter and (B) the Holding Company's cost of funds (expressed as
an annual percentage rate) on its average interest-bearing liabilities for the
quarter preceding the quarter then ended; and
 
(ii)           the Holding Company's yield on a consolidated basis (expressed as
an annual percentage rate) on its average investments for the quarter preceding
the quarter then ended.
 
Each such interest credit shall be added to the balance of a Participant's
Memorandum Account as of the first day of the succeeding quarter for purposes of
determining future interest credits.
 
Section 3.3 Vesting.
 
All deferred fees and interest credited to the Memorandum Account shall be 100%
vested at all times.
 
ARTICLE IV

 
DISTRIBUTIONS
 
Section 4.1 Distributions to Participants.
 
(a)           The balance in a Participant's Memorandum Account shall be paid to
the Participant according to the payment schedule determined under section
4.1(b) as of the earlier of:
 
(i)           the first business day of the calendar quarter following the
calendar quarter in which the Participant ceases to be a Director of any and all
 
 
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Participating Companies for any reason, including death or retirement at
mandatory retirement age; or
 
(ii)           the first business day of the calendar quarter following the
calendar quarter in which the Participant becomes permanently and totally
disabled within the meaning of section 22(e)(3) of the Code.
 
Payment (or the first in a series of payments) shall be made as soon as
practicable after the date determined under this section 4.1(a).
 
(b)           Subject to section 4.1(c), payments made pursuant to section
4.1(a) shall be made according to whichever of the following payment schedules
the Participant shall designate in his initial election to defer receipt of Fees
(or in a subsequent election made and approved pursuant to section 4.2):
 
(i)           in a single lump sum, in which case the amount of the payment
shall be equal to the entire balance credited to the Participant's Memorandum
Account as of the last day of the calendar quarter before the quarter in which
the payment is to be made;
 
(ii)           in such number of quarterly installment payments (not to exceed
one-hundred (100) quarterly payments) as the Participant shall specify in his
written election to defer receipt of Fees, in which case the amount of the
quarterly installment payments to be made in each calendar year shall be equal
to the lesser of the total balance in the Participant's Memorandum Account as of
the date of payment and the amount determined under the following formula:
 
            AB
QP  =   ----
             N

 
where:
 
(A)           "QP" is the amount of the quarterly payment;
 
(B)           "AB" is the balance credited to the Participant's Memorandum
Account as of (I) for the first calendar year in which payments are made, the
first day of the first calendar quarter for which a payment is made, and (II)
for succeeding calendar years, January 1st of the year for which the payment is
being made;
 
(C)           "N" is the number of payments remaining to be paid as of (I) in
the case of the first calendar year in which payments are made, the first day of
the first calendar quarter for which a payment is due, and (II) in the case of
succeeding calendar years, January 1st of the year for which the payment is
made.
 
 
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The amount of the quarterly installments payable shall be adjusted as of the
first day of each calendar year until the entire Memorandum Account has been
distributed. Notwithstanding anything in this section 4.1(b)(ii) to the
contrary, the final scheduled quarterly installment shall include the entire
remaining balance credited to the Memorandum Account.
 
If the Participant fails to designate a payment schedule in his election to
defer receipt of Fees, then payment shall be made in one hundred (100) quarterly
installments determined in accordance with section 4.1(b)(ii).
 
(c)           If, after payments have begun pursuant to section 4.1(a), the
balance credited to a Participant's Memorandum Account falls below $10,000, the
Administrator may, in its discretion, pay out such remaining balance in a lump
sum, regardless of the payment schedule selected by the Participant pursuant to
section 4.1(b).
 
Section 4.2 Change of Payment Schedule.
 
A Participant may, at any time prior to January 1, 2009, by written notice to
the Administrator, request a change in the payment schedule in effect for his
Memorandum Account under section 4.1(b) and applicable to payments scheduled to
be after the close of the calendar in which the election is filed with the
Administrator; such electon may provide for any time and form of payment
permitted in section 4.1 or for a lump sum payment on January 1, 2009 of the
entire balance credited to the Memorandum Account.  A Participant may elect to
change the payment schedule applicable to his Memorandum Account at such other
times and subject to such terms and conditions as may be permitted under section
409A of the Code
 
Section 4.3 Distributions to Beneficiaries.
 
(a)           In the event that a Participant dies prior to the receipt of all
amounts payable to him pursuant to the Plan, any remaining balance credited to
his Memorandum Account shall be paid to such one or more beneficiaries and in
such proportions as the Participant may designate on such form and in such
manner as the Administrator may require. A beneficiary designation pursuant to
this section 4.3 shall not be effective unless it is in writing and is received
by the Administrator prior to the death of the Participant making the
designation.
 
(b)           Payments to the Participant's beneficiary(ies) pursuant to this
section 4.3 shall be payable in a lump sum within ninety (90) days after the
Participant's death, unless the Participant directs that payment be made
according to the payment schedule selected by the Participant pursuant to
section 4.1(b).
 
(c)           If no beneficiary shall have been designated or if any such
designation shall be ineffective, or in the event that no designated beneficiary
survives the Participant, the balance credited to the Participant's Memorandum
Account shall be paid to his estate in a lump sum as soon as practicable
following his death. In the event that the Participant and one or more of his
designated beneficiaries shall die under circumstances which cast doubt on which
of them shall have been the first to die, the Participant shall be deemed to
have survived the deceased beneficiary.
 
 
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ARTICLE V

 
CHANGE OF CONTROL
 
 
Section 5.1
Change of Control Defined.

 
A Change of Control means, with respect to an Eligible Director:  (a) a change
in ownership of the Participant’s Service Recipient; (b) a change in effective
control of the Participant’s Service Recipient; or (c) a change in the ownership
of a substantial portion of the assets of the Participant’s Service
Recipient.  The identity of an Eligible Director's Service Recipient and
existence of a Change in Control Event shall be determined by the Administrator
in accordance with section 409A of the Code and the regulations thereunder.
 
 
Section 5.2
Participants' Options upon a Change of Control.

 
In the event of Change of Control, the Memorandum Account maintained for a
Participant shall continue to be held by the Administrator and distributed in
accordance with the terms of the Plan; provided, however, that the Participant
may, no later than thirty (30) days after first being eligible to participate in
the Plan (or if later, December 31, 2008 with respect to a Change of Control
that occurs after such date and also constitutes a change in control for
purposes of section 409A of the Code) elect to receive payment in a lump sum
within thirty (30) days following the Change of Control and, if no such election
is made, may elect, no later than sixty (60) days after the Change in Control
occurs, to:
 
(a)           cause the Participating Companies or their respective successors
to place in a trust fund with a trustee selected by the Participant an amount
equal to the balance credited to his Memorandum Account, plus any additional
Fees thereafter deferred, to be invested for the account of the Participant, in
which case payments shall continue to be made at the time or times determined
under the Plan and the balance credited to the Memorandum Account shall at all
times thereafter be equal to the balance held in such trust fund; or
 
(b)           cause the Participating Companies or their respective successors
to purchase and hold an annuity contract issued by an insurance company selected
by the Participant, the terms of which provide the same or substantially similar
benefits as he would have received under the Plan if the Participant had
terminated service as a Director as of the date of purchase of such annuity
contract; provided, however, that the premium cost of such annuity contract
shall not exceed the balance in the Memorandum Account.
 
Actions taken pursuant to this section 5.2 shall be taken in such manner as to
avoid causing the Participant to be in constructive receipt of income under the
Plan prior to the actual payment of benefits. The Participating Companies shall
pay all taxes, trustees' fees and other administrative charges or expenses
associated with the establishment or continuance of such a trust fund or
purchase of such an annuity contract.
 
 
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ARTICLE VI

 
MISCELLANEOUS PROVISIONS
 
Section 6.1 Notice and Election.
 
The Administrator shall provide a copy of this Plan and the resolutions of
adoption to each Director together with a form on which the Director may notify
the Administrator of his election whether to become a Participant, which letter,
if he so elects, he may complete, sign and return to the Administrator.
 
Section 6.2 Construction and Language.
 
Wherever appropriate in the Plan, words used in the singular may be read in the
plural, words in the plural may be read in the singular, and words importing the
masculine gender shall be deemed equally to refer to the feminine or the neuter.
Any reference to an Article or section shall be to an Article or section of the
Plan, unless otherwise indicated.
 
Section 6.3 Headings.
 
The headings of Articles and sections are included solely for convenience of
reference. If there is any conflict between such headings and the text of the
Agreement, the text shall control.
 
Section 6.4 Non-Alienation of Benefits.
 
The right to receive a benefit under the Plan shall not be subject in any manner
to anticipation, alienation or assignment, nor shall rights be liable for or
subject to debts, contracts, liabilities or torts.
 
Section 6.5 Indemnification.
 
Each Participating Company shall indemnify, hold harmless and defend its
Directors and Participants, and the beneficiaries of each, against their
reasonable costs, including legal fees, incurred by them or arising out of any
action, suit or proceeding in which they may be involved, as a result of their
efforts, in good faith, to defend or enforce terms of the Plan.  Any payment or
reimbursement to effect such indemnification shall be made no later than the
last day of the calendar year following the calendar year in which the
Participant incurs the expense or, if later, within sixty (60) days after the
settlement or resolution that gives rise to the Participant’s right to
reimbursement; provided, however, that the Participant shall have submitted to
the Participating Company documentation supporting such expenses at such time
and in such manner as the Participating Company may reasonably require.
 
Section 6.6 Severability.
 
A determination that any provision of the Plan is invalid or unenforceable shall
not affect the validity or enforceability of any other provision hereof.
 
 
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Section 6.7 Waiver.
 
Failure to insist upon strict compliance with any of the terms, covenants or
conditions of the Plan shall not be deemed a waiver of such term, covenant or
condition. A waiver of any provision of the Plan must be made in writing,
designated as a waiver, and signed by the party against whom its enforcement is
sought. Any waiver or relinquishment of any right or power hereunder at any one
or more times shall not be deemed a waiver or relinquishment of such right or
power at any other time or times.
 
Section 6.8 Governing Law.
 
The Plan shall be construed, administered and enforced according to the laws of
the State of New York without giving effect to the conflict of laws principles
thereof, except to the extent that such laws are preempted by the federal laws
of the United States. Any payments made pursuant to this Plan are subject to and
conditioned upon their compliance with 12 U.S.C. § 1828(k) and any regulations
promulgated thereunder.
 
Section 6.9 Taxes.
 
Each Participating Company shall have the right to retain a sufficient portion
of any payment made under the Plan to cover the amount required to be withheld
pursuant to any applicable federal, state and local tax law.
 
Section 6.10 No Deposit Account.
 
Nothing in this Plan shall be held or construed to establish any deposit account
for any Participant or any deposit liability on the part of the Association or
any other financial institution which is a Participating Company. Participants'
rights hereunder shall be equivalent to those of a general unsecured creditor.
 
Section 6.11 Compliance with Internal Revenue Code Section 409A.
 
Notwithstanding anything in the Plan to the contrary, any payment due hereunder
on account of the Participant's termination of service shall not be made prior
to, and shall, if necessary, be deferred to and paid on the later of the date
sixty (60) days after the Participant's earliest separation from service (within
the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Participant
is a specified employee (within the meaning of Treasury Regulation Section
1.409A-1(i)) on the date of his or her separation from service, the first day of
the seventh month following the Participant’s separation from service.  Each
amount payable under this Plan that is required to be deferred beyond the
Participant’s separation from service, shall be deposited on the date on which,
but for such deferral, the Participating Company would have paid such amount to
the Participant, in a grantor trust which meets the requirements of Revenue
Procedure 92-65 (as amended or superseded from time to time), the trustee of
which shall be a financial institution selected by the Participating Company
with the approval of the Participant (which approval shall not be unreasonably
withheld or delayed), pursuant to a trust agreement the terms of which are
approved by the Executive (which approval shall not be unreasonably withheld or
delayed) (the “Rabbi Trust”), and payments made shall include earnings on the
investments made with the assets of the Rabbi Trust, which investments shall
consist of short-
 
 
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term investment grade fixed income securities or units of interest in mutual
funds or other pooled investment vehicles designed to invest primarily in such
securities.  Furthermore, this Plan shall be construed and administered in such
manner as shall be necessary to effect compliance with section  409A. of the
Code
 
Section 6.12 Amendment and Termination.
 
(a)           The Holding Company reserves the right, in its sole and absolute
discretion, at any time and from time to time, by action of the Board, to amend
the Plan in whole or in part.  In no event, however, shall any such amendment
adversely affect the right of any Participant, former Participant or Beneficiary
to receive any benefits under the Plan in respect of participation for any
period ending on or before the later of the date on which such amendment is
adopted or the date on which it is made effective..
 
(b)           The Holding Company reserves the right, in its sole and absolute
discretion, by action of the Board, to terminate the Plan, but only in the
following circumstances:
 
(i)           within thirty (30) days before or twelve (12) months after any
Change of Control that constitutes a change of control for purposes of section
409A of the Code; provided, however, that in such event, all agreements,
methods, programs, and other arrangements sponsored by the Holding Company
immediately after the time of the Change of Control with respect to which
deferrals of compensation are treated as having been deferred under a single
plan (under section 409A of the Code and the regulations thereunder) are
terminated and liquidated with respect to each Participant that experienced the
Change of Control, so that under the terms of the termination and liquidation
all such Participants are required to receive all amounts of compensation
deferred under the terminated agreements, methods, programs, and other
arrangements within twelve (12) months of the date the Holding Company
irrevocably takes all necessary action to terminate and liquidate the
agreements, methods, programs, and other arrangements.
 
 (ii)           at such other time and in such other circumstances as may be
permitted under section 409A of the Code.
 
 (c)           The Holding Company reserves the right, in its sole and absolute
discretion, by action of the Board, to suspend the operation of the Plan, but
only in the following circumstances:
 
(i)           With respect to Fees to be earned and paid in calendar years
beginning after the date of adoption of the resolution suspending the operation
of the Plan; and
 
(ii)           At such other time and in such other circumstances as may be
permitted under section 409A of the Code.
 
 
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In such event, no further Fees shall be deferred following the effective date of
the suspension and Memorandum Accounts in existence prior to such date shall
continue to be maintained, and payments shall continue to be made, in accordance
with the provisions of the Plan.
 
(d)           In the event that a corporation or trade or business other than
the Holding Company shall adopt this Plan, such corporation or trade or business
shall, by adopting the Plan, empower the Company to amend or terminate the Plan,
insofar as it shall cover employees of such corporation or trade or business,
upon the terms and conditions set forth in this section 6.12; provided, however,
that any such corporation or trade or business may, by action of its board of
directors or other governing body, amend or terminate the Plan, insofar as it
shall cover employees of such corporation or trade or business, at different
times and in a different manner.  In the event of any such amendment or
termination by action of the board of directors or other governing body of such
a corporation or trade or business, a separate plan shall be deemed to have been
established for the employees of such corporation or trade or business, and any
amounts set aside to provide for the satisfaction of benefit liabilities with
respect to employees of such corporation or trade or business shall be
segregated from the assets set aside for the purposes of this Plan at the
earliest practicable date and shall be dealt with in accordance with the
documents governing such separate plan.
 
 
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