ex10_1.htm


    Exhibit
10.1

     

    NORTHEAST
COMMUNITY BANK

    EXECUTIVE
INCENTIVE DEFERRAL PLAN

    


    Article
I

    Purpose

    


    The purpose of the Northeast Community
Bank Executive Incentive Deferral Plan is to assist Northeast Community Bank
(the “Bank”) in retaining and attracting officers of exceptional ability and
rewarding officers for meeting or exceeding specific business plan objectives or
performance measurements.

    


    Article
II

    Definitions

    


    For the purposes of this Plan, the
following words and phrases shall have the meanings indicated, unless the
context clearly indicates otherwise:

    


    Bank means Northeast Community
Bank, White Plains, New York.

    


    Beneficiary means the person,
persons or entity designated by the Participant to receive benefits payable
under the Plan.

    


    Board means the Board of
Directors of the Bank.

    


    Change in Control shall mean a
change in control as defined in Code Section 409A and rules, regulations, and
guidance of general application thereunder issued by the Department of the
Treasury, including –

    


    
      	
               
      

            	
              (a)

            	
              Change
      in ownership:
      a change in ownership of the Company, a corporation of which the
      Bank is a wholly owned subsidiary, occurs on the date any one person or
      group accumulates ownership of the Company stock constituting more than
      50% of the total fair market value or total voting power of the Company
      stock,

            


    

    


    
      	
               
      

            	
              (b)

            	
              Change
      in effective control: (i) any one person or
      more than one person acting as a group acquires within a 12-month period
      ownership of the Company stock possessing 30% or more of the total voting
      power of the Company stock, or (ii) a majority of the Company’s board of
      directors is replaced during any 12-month period by directors whose
      appointment or election is not endorsed in advance by a majority of the
      Company’s board of directors, or

            


    

    


    
      	
               
      

            	
              (c)

            	
              Change
      in ownership of a substantial portion of assets: a change in ownership
      of a substantial portion of the Company’s assets occurs if in a 12-month
      period any one person or more than one person acting as a group acquires
      from the Company assets having a total gross fair market value equal to or
      exceeding 40% of the total gross fair market value of all of the Company’s
      assets immediately before the acquisition or acquisitions. For this
      purpose, gross fair market value means the value of the Company’s assets,
      or the value of the assets being disposed of, determined without regard to
      any liabilities associated with the
assets.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Notwithstanding anything in this Plan
to the contrary, a “Change in Control” shall not include a “second-step”
conversion of the Company and the Bank to a stock company structure whereby the
Bank is controlled by an entity wholly-owned by shareholders other than the
Company.

    


    
      Code means the Internal
Revenue Code of 1986, as amended.

    

    
Company means Northeast
Community Bancorp, Inc., a federal corporation.

    


     Declared Rate means the Bank’s
[one-year CD rate] in effect on the first business day of the Plan
Year.  The formula used to establish the Declared Rate may be amended
by a resolution of the Board on a prospective basis.

    


    Deferred Bonus means an award
pursuant to Section 3.2 of the Plan.

    


    Deferred Bonus Account means
the account maintained on the books of the Bank for each Participant pursuant to
Article IV.  A Participant’s Deferred Bonus Account shall be utilized
solely as a device for the measurement and determination of the amounts to be
paid to the Participant pursuant to this Plan.  A Participant’s
Deferred Bonus Account shall not constitute or be treated as a trust fund of any
kind.

    


    Designation of Form for
Payment means the agreement filed by a Participant designating the manner
in which the Participant’s Deferred Bonus Account balance shall be paid to the
Participant or his beneficiary.

    


    Determination Date means the
date on which the amount of a Participant’s Deferred Bonus Account is determined
as provided in Article IV hereof.  The last day of each Plan Year
shall be the Determination Date.

    


    Disability means a physical or
mental condition which constitutes a disability within the meaning of Section
22(e)(3) of the Code.

    


    Just Cause shall mean
termination because of the Participant’s personal dishonesty, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, incompetence, continuing material failure to
perform assigned duties, willful violation of any law, rule or regulation (other
than traffic violations or similar infractions) or a final cease-and-desist
order, or a material breach of any provision of an employment agreement to which
the Bank and the Participant are parties.

    


    Normal Retirement Age means
age 65 or as otherwise specified by the Board with respect to an individual
Participant.

    


    Participant means any officer
of the Bank who is designated as a Participant by the Board.

    


    Plan Year means a twelve month
period commencing January 1st and ending the following December
31st.  The first Plan Year shall commence on ________, 2008 and end on
December 31, 2008.

    


    Separation from Service means
a termination of a Participant’s services (whether as an employee or an
independent contractor) to the Bank.  Whether a Separation from
Service has occurred shall be determined in accordance with the requirements of
Section 409A of the Code based on whether the facts and circumstances indicate
that the Bank and the Participant reasonably anticipated that no further
services would be performed after a certain date or that the level of bona fide
services the


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    Participant
would perform after such date (whether as an employee or as an independent
contractor) would permanently decrease to no more than twenty percent (20%) of
the average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding thirty six (36) month
period.

    


    Article
III

    Participation
and Benefits

    


    3.1           Participation.

    


    Participation in the Plan shall be
limited to those officers of the Bank designated as Participants by resolution
of the Board.  The Board may, upon designation of an officer as a
Participant for any Plan Year, establish such terms and conditions of
participation as it deems appropriate,.  Notwithstanding anything
herein to the contrary, designation as a Participant shall not entitle a
Participant to the award of a Deferred Bonus in a specific Plan
Year.  The Board may terminate an officer’s status as a Participant on
a prospective basis, provided, however, that such termination shall not affect a
Participant’s previously accrued benefits.

    


    3.2           Amount of Deferred
Bonus.

    


    For any Plan Year, a Participant’s
Deferred Bonus, if any, shall be determined by reference to the attainment of
criteria established by the Board on an annual basis.  Such criteria
shall relate to the financial performance of the Bank and may be subject to
adjustment for extraordinary items to the extent deemed appropriate by the
Board.  For any Plan Year after the initial Plan Year, the Board
shall, by resolution, establish such criteria not later than March 31
of such year.  For the first Plan Year ending December 31, 2008, such
criteria shall be established not later than April 30, 2008.  The
Deferred Bonus, if any, shall be credited to a Participant’s Deferred Bonus
Account as of the last day of the Plan Year to which the award
relates.

    


    3.3           Vesting of Deferred Bonus
Awards; Accelerated Vesting of Deferred Bonus Awards.

    


    Unless otherwise determined by the
Board at the time a Participant is informed of his or her Deferred Bonus
opportunity for a Plan Year, each Deferrral Bonus award shall vest at the rate
of 20% per year while the Participant is employed by the Bank, beginning on the
date the award is credited to the Participant’s Deferred Bonus Account and
continuing on each anniversary of such date until fully
vested.  Unless otherwise determined by the Board at the time an
officer is designated as a Participant, a Participant’s Deferred Bonus awards
shall automatically vest upon (i) the Participant’s death or Disability, (ii)
upon the occurrence of a Change in Control, or (iii) upon the Participant’s
Separation from Service at or after attaining Normal Retirement
Age.

    


    Article
IV

    Deferred
Bonus Account

    


    4.1          Determination of
Account.

    


    Each Participant’s Deferred Bonus
Account as of each Determination Date shall consist of the balance of the
Participant’s Deferred Bonus Account as of the immediately preceding
Determination Date plus the Participant’s Deferred Bonus, if any, awarded since
the immediately preceding Determination Date.  The Deferred Bonus
Account of each Participant shall be reduced by the amount of all distributions,
if any, made from such Deferred Bonus Account since the preceding Determination
Date.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    4.2           Crediting of
Account.

    


    As of each Determination Date, the
Participant’s Deferred Bonus Account shall be increased by the amount of
interest earned since the preceding Determination Date.  Interest
shall be based upon the Declared Rate, which shall be adjusted annually on the
first business day of the Plan Year to apply during such Plan
Year.  Interest shall be based upon the average daily balance of the
Participant’s Deferred Bonus Account since the last preceding Determination
Date, but after the Deferred Bonus Account has been adjusted for any
contributions to be credited as of such day.

    


    4.3           Statement of
Accounts.

    


    The Bank shall provide each
Participant, within 120 days after the close of each Plan Year, a statement in
such form as the Bank deems desirable, setting forth the balance to the credit
of such Participant in his Deferred Bonus Account as of the last day of the
preceding Plan Year.

    


    Article
V

    Benefits

    


    5.1           Separation from
Service.

    


    Upon a Separation from Service, other
than for Just Cause (as reasonably determined by the Bank), the Bank shall pay
to the Participant a benefit equal to the amount of his vested Deferred Bonus
Account commencing on a date determined in accordance with Section 5.3 of the
Plan.  Notwithstanding anything in this Plan to the contrary, no
benefit shall be payable to a Participant under this Plan if the Participant
terminates employment under circumstances constituting Just Cause.

    


    5.2           Form of Benefit
Payment.

    


    (a)           Upon
a Separation from Service pursuant to Section 5.1 (or upon the occurrence of a
Change in Control if elected by the Participant), the Bank shall pay the
Participant’s Deferred Bonus Account in the form of (i) a lump sum or, (ii) an
annual payment of a fixed amount which shall amortize the Deferred Bonus Account
balance in equal installments of principal and interest over a period of at
least two (2) and not more than ten (10) years as designated by the Participant
on his Designation of Form for Payment.  For purposes of determining
the amount of the annual payment, the rate of interest shall be the average of
the Declared Rate credited to the Participant’s Deferred Bonus Account for the
three (3) years preceding the initial payment (or such lesser number of years in
which the Participant participated in the Plan).

    


    (b)           If
a Participant wishes to change his payment election, the Participant may do so
by completing a new Designation of Form of Payment, provided that any such
election (i) must be made prior to the Participant’s Separation from Service,
(ii) must be made at least 12 months before the date on which any benefit
payments as of a fixed date or pursuant to a fixed schedule are scheduled to
commence, (iii) shall not take effect until at least 12 months after the date
the election is made and accepted by the Bank, and (iv) for payments to be made
other than upon death or Disability, must provide an additional deferral period
of at least five years from the date such payment would otherwise have been made
(or in the case of any installment payments treated as a single payment, five
years from the date the first amount was scheduled to be paid).  For
purposes of this Plan and paragraph (a) above, all installment payments under
this Plan shall be treated as a single payment.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    5.3           Commencement of
Payments.

    


    (a)           Payments
due under Section 5.1 shall commence not later than thirty (30) days following
the date the Participant incurs a Separation from Service and continue in
accordance with the Participant’s election under Section 5.2 of the
Plan.

    


    (b)           A
Participant may elect on his or her Designation of Form of Payment to defer the
commencement of benefit payments otherwise payable at the time specified in
Section 5.3(a) to a later date but in any event not beyond the first business
day of the January occurring after the year in which the Participant attains age
70.  Such election must be made prior to a Participant’s termination
of employment in accordance with Section 5.2(a) and (b).

    


    (c)           All
installment payments made pursuant to this Section 5.3 shall be payable annually
beginning with a single payment on the date specified in Section 5.3(a) and
continuing each anniversary of such date until fully paid in accordance with the
Participant’s election.

    


    5.4           Specified
Employees.

    


    Despite any contrary provision of this
Plan, if, when the Participant’s service terminates, the Participant is a
“specified employee,” as defined in Section 409A of the Code, and if any
payments under Article 5 of this Agreement will result in additional tax or
interest to the Participant because of Section 409A, the Participant shall not
be entitled to payment under Article 5 until the earliest of (i) the date that
is at least six months after termination of the Participant’s employment for
reasons other than the Participant’s death, (ii) the date of the Participant’s
death, or (iii) any earlier date that does not result in additional tax or
interest to the Participant under Section 409A. If any provision of this
Agreement would subject the Participant to additional tax or interest under
Section 409A, the Bank shall reform the provision. However, the Bank shall
maintain to the maximum extent practicable the original intent of the applicable
provision without subjecting the Participant to additional tax or
interest.

    


    Article
VI

    Beneficiary
Designation

    


    6.1           Beneficiary
Designation.

    


    Each
Participant shall have the right, at any time, to designate any person or
persons as his Beneficiary or Beneficiaries (both primary as well as contingent)
to whom payment under this Plan shall be paid in the event of his death prior to
complete distribution to the Participant of the benefits due him under the
Plan.  Any Participant Beneficiary designation shall be made in a
written instrument filed with the Board and shall be effective only when
received in writing by the Board.  Any Beneficiary designation may be
changed by a Participant by the written filing of such change on a form
prescribed by the Board.  The filing of a new Beneficiary designation
form will cancel all Beneficiary designations previously filed.

    


    6.2           No Participant
Designation.

    


    If a
Participant fails to designate a Beneficiary as provided above, or if all
designated Beneficiaries predecease the Participant, then Participant’s
designated Beneficiary shall be deemed to be (i) the Participant’s surviving
spouse or (ii) if none, the Participant’s estate.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    6.3           Effect of
Payment.

    


    The
payment to the deemed Beneficiary shall completely discharge Bank’s obligations
under this Plan.

    


    Article
VII

    Administration
and Claim

    


    


    7.1           Administration.

    


    The
administration of the Plan, the exclusive power to interpret it, and the
responsibility for carrying out its provisions are vested in the Board or a
designated committee of the Board.  The Board or designated committee
shall have the authority to resolve any question under the Plan.  The
determination of the Board or the designated committee as to the interpretation
of the Plan or any disputed question shall be conclusive and final to the extent
permitted by applicable law.  All references in this Plan to the
“Board” shall be deemed to refer to any committee of the Board designated for
the purposes set forth herein.

    


    7.2           Claims
Procedures.

    


    (a)           Claims
for benefits under the Plan shall be submitted in writing to the Chairman of the
Board.

    


    (b)           If
any claim for benefits is wholly or partially denied, the claimant shall be
given written notice within a reasonable period following the date on which the
claim is filed, which notice shall set forth:

    


    
      	
               
      

            	
              (i)

            	
              the
      specific reason or reasons for the
denial;

            


    

    


    
      	
               
      

            	
              (ii)

            	
              specific
      reference to pertinent Plan provisions on which the denial is
      based;

            


    

    


    
      	
               
      

            	
              (iii)

            	
              a
      description of any additional material or information necessary for the
      claimant to perfect the claim and an explanation of why such material or
      information is necessary; and

            


    

    


    
      	
               
      

            	
              (iv)

            	
              an
      explanation of the Plan’s claim review
  procedure.

            


    

    


    If the
claim has not been granted and written notice of the denial of the claim is not
furnished in a timely manner following the date on which the claim is filed, the
claim shall be deemed denied for the purpose of proceeding to the claim review
procedure.

    


    (c)           The
claimant or his authorized representative shall have 30 days after receipt of
written notification of denial of a claim to request a review of the denial by
making written request to the Chairman of the Board, and may review pertinent
documents and submit issues and comments in writing within such 30-day
period.

    


    After receipt of the request for
review, the Board shall, in a timely manner, render and furnish to the claimant
a written decision, which shall include specific reasons for the decision and
shall make specific references to pertinent Plan provisions on which it is
based.  The decision by the Board shall not be subject to further
review.  If a decision on review is not furnished to a claimant, the
claim shall be deemed to have been denied on review.


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    (d)           No
claimant shall institute any action or proceeding in any state or federal court
of law or equity or before any administrative tribunal or arbitrator for a claim
for benefits under the Plan until the claimant has first exhausted the
provisions set forth in this section.

    


    Article
VIII

    Amendment
and Termination of Plan

    


    8.1           Amendment.

    


    The Board
may at any time amend the Plan in whole or in part, provided, however, that no
amendment shall be effective to decrease or restrict any Deferred Bonus Account
maintained pursuant to any existing award under the Plan.  Any change
in the formula used to determine the Declared Rate shall be prospective only and
shall not become effective until the first day of the calendar year which
follows the adoption of the amendment.

    


    8.2           Termination of
Plan.

    


    The Board
may at any time terminate the Plan if, in its judgment, the tax, accounting, or
other effects of the continuance of the Plan, or potential payments thereunder
would not be in the best interests of the Bank, but such termination shall not
affect the accrued benefits of Participants as of the date of termination and
Participants shall continue to vest in awards made prior to termination based on
their service after the date of termination.  Such awards shall
otherwise remain subject to the terms of this Plan.

    


    Article
IX

    Miscellaneous

    


    9.1           Unsecured General
Creditor.

    


    Participants
and their Beneficiaries, heirs, successors and assigns shall have no secured
interest or claim in any property or assets of the Bank, nor shall they be
beneficiaries of, or have any rights, claims or interests in any life insurance
policies, annuity contracts or the proceeds therefrom owned or which may be
acquired by the Bank (“Policies”).  Such Policies or other assets of
the Bank shall not be held under any trust for the benefit of Participants,
their Beneficiaries, heirs, successors or assigns, or held in any way as
collateral security for the fulfilling of the obligations of Bank under this
Plan.  Any and all of the Bank’s assets and Policies shall be, and
remain, the general, unpledged, unrestricted assets of the Bank.  The
Bank’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Bank to pay money in the future.  The Bank
shall have no obligation under this Plan with respect to individuals other than
that Bank’s employees, directors or consultants.

    


    9.2           Non-assignability.

    


    Neither a
Participant nor any other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are,
expressly declared to be unassignable and non-transferable.  No part
of the amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency.


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    9.3           Not a Contract of
Employment.

    


    The terms
and conditions of this Plan shall not be deemed to constitute a contract of
employment between the Bank and the Participant, and the Participant (or his
Beneficiary) shall have no rights against the Bank except as may otherwise be
specifically provided herein.  Moreover, nothing in this Plan shall be
deemed to give a Participant the right to be retained in the service of the Bank
or to interfere with the right of the Bank to discipline or discharge him at any
time.

    


    9.4           Terms.

    


    Whenever
any words are used herein in the masculine, they shall be construed as though
they were used in the feminine in all cases where they would so apply; and
wherever any words are used herein in the singular or in the plural, they shall
be construed as though they were used in the plural or the singular, as the case
may be, in all cases where they would so apply.

    


    9.5           Captions.

    


    The
captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

    


    9.6           Governing
Law.

    


    The
provisions of this Plan shall be construed and interpreted according to the laws
of the State of New York, unless preempted by federal law.

    


    9.7           Validity.

    


    In case
any provision of this Plan shall be held illegal or invalid for any reason, said
illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal and invalid provision
had never been inserted herein.

    


    9.8           Notice.

    


    Any
notice or filing required or permitted to be given to the Bank under the Plan
shall be sufficient if in writing and hand delivered, or sent by registered or
certified mail, to the Secretary of the Board.  Such notice shall be
deemed given as of the date of delivery or, if delivery is made by mail as of
three (3) days following the date shown on the postmark or on the receipt for
registration or certification.

    


    9.9           Successors.

    


    The
provisions of this Plan shall bind and inure to the benefit of the Bank and its
successors and assigns.  The term successors as used herein shall
include any corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise acquire all or substantially all of the
business and assets of the Bank and successors of any such corporation or other
business entity.

    


    9.10           Effective
Date.

    


    The Plan
was adopted by the Board on August 13, 2008 and is effective as of such
date.

    


    8