Document:

ex10-1.htm

    
      
        

      

       

      Exhibit
10.1

       

      AMENDED
AND RESTATED

      PARTICIPATION
AGREEMENT

      UNDER
THE

      NORTHEAST
COMMUNITY BANK

      SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

      

      

      THIS
AMENDED AND RESTATED PARTICIPATION AGREEMENT (the “Amended Participation
Agreement”) is entered into as of the 1st day
of January 2010 by and between NORTHEAST
COMMUNITY BANK (the “Employer”), and Kenneth A. Martinek, an executive of
the Employer (the “Participant”).

      

      RECITALS:

      

      WHEREAS,
the Employer has adopted the Northeast Community Bank Supplemental Executive
Retirement Plan (the “Plan”) effective as of January 1, 2006, and

      

      WHEREAS, the Employer and the
Participant have previously entered into a Participation Agreement under the
Plan and desire to make certain modifications thereto

      

      NOW,
THEREFORE, in consideration of the foregoing and the agreements and
covenants set forth herein, the parties agree as follows:

      

      1.          
 Definitions.
Except as otherwise provided, or unless the context otherwise requires, the
terms used in this Amended Participation Agreement shall have the same meanings
as set forth in the Plan.

      

      2.           
Plan. Plan means the Northeast
Community Bank Supplemental Executive Retirement Plan, as the same may be
altered or supplemented in any validly executed Participation
Agreement.

      

      3.           
Incorporation
of Plan.
The Plan, a copy of which is attached hereto as Exhibit A, is hereby
incorporated into this Amended Participation Agreement as if fully set forth
herein, and the parties hereby agree to be bound by all of the terms and
provisions contained in the Plan. The Participant hereby acknowledges receipt of
a copy of the Plan and, subject to the foregoing, confirms his understanding and
acceptance of all of the terms and conditions contained therein.

      

      4.           
Effective
Date of Participation.
The effective date of the Participant’s participation in the Plan shall be
January 1, 2006 (the “Participation Date”).

      

      5.           
Normal
Retirement Age.
The Participant’s Normal Retirement Age for purposes of the Plan and this
Participation Agreement is the later of the date the Participant (i) attains age
sixty (60) or (ii) completes twenty (20) years of service.

      

      6.           
Year
of Service.
The Participant shall be credited with one year of service for each twelve (12)
month period the Participant has been employed by the Employer, whether such
employment began before or after the Participation Date.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      7.          
 Prohibition
Against Funding.
Should any investment be acquired in connection with the liabilities assumed
under this Plan and this Amended Participation Agreement, it is expressly
understood and agreed that the Participants and Beneficiaries shall not have any
right with respect to, or claim against, such assets, nor shall any such
purchase be construed to create a trust of any kind or a  fiduciary
relationship between the Employer and the Participants, their Beneficiaries or
any other person. Any such assets shall be and remain a part of the general,
unpledged and unrestricted assets of the Employer, subject to the claims of its
general creditors. It is the express intention of the parties hereto that this
arrangement shall be unfunded for tax purposes and for purposes of Title I of
ERISA. The Participant shall be required to look to the provisions of the Plan
and to the Employer itself for enforcement of any and all benefits due under
this Amended Participation Agreement, and, to the extent the Participant
acquires a right to receive payment under the Plan and this Amended
Participation Agreement, such right shall be no greater than the right of any
unsecured general creditor of the Employer. The Employer shall be designated the
owner and beneficiary of any investment acquired in connection with its
obligation under the Plan and this Amended Participation Agreement.

       

      8.           
Provisions Related to
SERP Benefit.

      

      
        	
                 
      

              	
                (a)

              	
                Normal
      Retirement SERP Benefit. Upon the Participant’s termination of
      employment upon or after attaining Normal Retirement Age, the Participant
      shall receive an annual benefit of fifty percent (50%) of the
      Participant’s final average base salary over the immediately preceding
      full thirty-six (36) calendar months prior to termination of employment,
      paid for the period and on the terms provided herein. The Participant’s
      base salary calculation shall be provided by Employer’s payroll
      department.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Early
      Retirement SERP Benefit.  In the event the Participant
      terminates employment prior to attaining age sixty (60) but after
      completing at least twenty (20) years of service, the Participant shall
      receive the SERP Benefit described in Paragraph 8(a), reduced by .25% for
      each month by which the Participant’s age at termination of employment is
      less than the Normal Retirement
Age.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Form
      of SERP Benefit Payment. Subject to the restrictions of Section 4.3
      of the Plan, the annual SERP Benefit shall be paid in equal monthly
      installments beginning not later than thirty (30) days after the
      Participant’s termination date until all benefits are fully
      paid.  The annual SERP Benefit shall be paid for the greater of
      (i) the Participant’s life or (ii) fifteen (15) years, following the
      Participant’s Normal Retirement, eligible Early Retirement, or termination
      of employment by reason of disability (with payments beginning at age 65
      if the Participant terminates employment due to
    disability).

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Post-Retirement
      Death Benefit. The Participant’s annual SERP Benefit shall be
      payable for a minimum period of fifteen (15) years. In the event that the
      Participant dies during the minimum fifteen (15) year SERP Benefit payment
      period, the Participant’s Beneficiary, as designated pursuant to this
      Participation Agreement, will continue to receive such payments until the
      minimum benefits are fully paid.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Pre-Retirement
      Death Benefit. In the event of the Participant’s death prior to
      Normal Retirement, the Participant’s Beneficiary(ies) shall be entitled to
      a pre-retirement death benefit equal to the actuarial equivalent
      (calculated as described in Paragraph 8(g) below) of the unreduced SERP
      Benefit payment described in Paragraph 8(a) of this Agreement. This
      benefit shall be distributed to the Participant’s Beneficiary(ies) in a
      lump sum amount as soon as administratively feasible upon Employer
      notification.

              

      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      
 

      
        	
                 
      

              	
                (f)

              	
                Disability
      SERP Benefit. In the event of the Participant’s termination of
      employment by reason of disability, if the Participant has attained Normal
      Retirement Age or is eligible for Early Retirement, the Participant shall
      receive a SERP benefit determined under Paragraph 8(a) or 8(b), as
      appropriate.  If the Participant has not attained Normal
      Retirement Age and is not eligible for Early Retirement on his termination
      date, the Participant shall receive a SERP benefit equal to the value of
      the Participant’s Accrued SERP Benefit, payable as provided in Paragraph
      8(c) of this Participation Agreement.  For purposes of this
      Participation Agreement and the Plan, “disability” means that the
      Participant (i) is unable to engage in any substantial gainful activity by
      reason of any medically determinable physical or mental impairment which
      can be expected to result in death or can be expected to last for a
      continuous period of not less than 12 months, or (ii) is, by reason of any
      medically determinable physical or mental impairment which can be expected
      to result in death or can be expected to last for a continuous period of
      not less than 12 months, receiving income replacement benefits for a
      period of not less than 3 months under a disability program covering
      employees of the Employer.  The Administrator shall have full
      and final authority, which shall be exercised in its discretion, to
      determine conclusively whether the Participant is disabled, and shall make
      such determination consistent with Section
409A.

              

      

       

      
        	
                 
      

              	
                (g)

              	
                Change
      of Control SERP Benefit.  In lieu of the benefit payable
      under any other provision of this Participation Agreement and the Plan,
      but subject to the restrictions of Section 4.3 of the Plan, upon the
      Participant’s termination of employment (other than for Cause or by reason
      of his death) following a Change of Control, the Participant shall receive
      the unreduced SERP Benefit described in Paragraph 8(a) (i.e., a benefit
      determined without regard to the Participant’s age or Years of Service) in
      the form of a lump sum payment that is actuarially equivalent to the
      Normal Retirement benefit (calculated as of the date of termination and
      using the discount rate specified in Code Section 1274 in effect for the
      period of termination).  Such payment shall be made to the
      Participant (or his beneficiary) not later than thirty (30) days after the
      Participant’s termination date.

              

      

      

      9.           
General
Provisions

      

      (a)           No
Assignment.

      

      No
benefit under the Plan or this Amended Participation Agreement shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any such action shall be void for all purposes of
the Plan or this Amended Participation Agreement. No benefit shall in any manner
be subject to the debts, contracts, liabilities, engagements, or torts of any
person, nor shall it be subject to attachments or other legal process for or
against any person, except to such extent as may be required by
law.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      (b)       
   Headings.

      

      The
headings contained in the Amended Participation Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit, enlarge, or
describe the scope or intent of this Plan nor in any way shall they affect this
Participation Agreement or the construction of any provision
thereof.

      

      (c)           Terms.

      

      Capitalized
terms shall have meanings as defined herein. Singular nouns shall be read as
plural, masculine pronouns shall be read as feminine, and vice versa, as
appropriate.

      

      (d)           Successors.

      

      This
Amended Participation Agreement shall be binding upon each of the parties and
shall also be binding upon their respective successors and the Employer’s
assigns.

      

      (e)           Amendments.

      

      This
Participant Agreement may not be modified or amended, except by a duly executed
instrument in writing signed by the Employer and the Participant. The subsequent
amendment or termination of the Plan by the Employer shall not affect the
Participant’s rights under this Amended Participation Agreement.

      

      IN
WITNESS WHEREOF, each of the parties has caused this Amended and Restated
Participation Agreement to be executed as of the day first above
written.

      

       

      
        	PARTICIPANT	 	NORTHEAST COMMUNITY
      BANK
	 	 	 
	 	 	 
	/s/ Kenneth A.
      Martinek	 	/s/ Salvatore
      Randazzo 	 
	Kenneth A.
      Martinek 	 	By: Salvatore
      Randazzo
	 	 	Title: Executive
      Vice President & COO/CFO
	 	 	 
	 	 	 
	 	 	/s/ Arthur M.
      Levine 	    
	 	 	By: Arthur M.
      Levine
	 	 	Title: Audit
      Committee Chair 

      

       

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

                                                                      

      EXHIBIT
A

       

      NORTHEAST
COMMUNITY BANK

      SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

      

      ARTICLE
I

      GENERAL

      

      1.1          PURPOSE
OF THE PLAN.
The purpose of the Northeast Community Bank Supplemental Executive Retirement
Plan (the “Plan”) is to reward certain management and highly compensated
employees of the Employer who have contributed to the Employer’s success and are
expected to continue to contribute to such success in the future.

      

      1.2          PLAN
BENEFITS GENERALLY.
Pursuant to the Plan, the Employer may provide to each Participant a
supplemental retirement benefit, subject to the terms and conditions contained
in the Plan and the Participant’s individual Participation
Agreement.

      

      1.3          EFFECTIVE
DATE.
The effective date of the Plan is January 1, 2006.

      

      ARTICLE
II

      DEFINITIONS

      

      ACCRUED
SERP BENEFIT means, with respect to each Participant, the amount of
liability that should be accrued by the Employer (i.e., determined without
regard to whether such liability is actually accrued), under Generally Accepted
Accounting Principles (“GAAP”), for the Employer’s obligation to the Executive
under this Agreement, by applying Accounting Principles Board Opinion Number 12
(“APB 12”) as amended by Statement of Financial Accounting Standards Number 106
(“FAS 106”).

      

      ADMINISTRATOR
means the Board or a committee of the Board designated to serve as
Administrator.

      

      BENEFICIARY
means the person or persons designated by a Participant as his beneficiary in
accordance with the provisions of Article V and subject to the Participation
Agreement.

      

      BOARD
means the Board of Directors of the Employer.

      

      CAUSE
shall have the meaning set forth in Section 4.2.

      

      CHANGE
OF CONTROL means the
occurrence of any one of the following events:

      

      
        	
                 
      

              	
                (1)

              	
                Merger:  Northeast
      Community Bancorp, Inc., the holding company for the Employer (the
      “Company”) merges into or consolidates with another corporation, or merges
      another corporation into the Company, and as a result less than a majority
      of the combined voting power of the resulting corporation immediately
      after the merger or consolidation is held by persons who were stockholders
      of the Company immediately before the merger or
    consolidation.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Acquisition of
      Significant Share Ownership:  The Company files, or is
      required to file, a report on Schedule 13D or another form or schedule
      (other than Schedule 13G) required under Sections 13(d) or 14(d) of the
      Securities Exchange Act of 1934, if the schedule discloses that the filing
      person or persons acting in concert has or have become the beneficial
      owner(s) of 25% or more of a class of the Company’s voting securities, but
      this clause (2) shall not apply to beneficial ownership of Company voting
      shares held in a fiduciary capacity by an entity of which the Company
      directly or indirectly beneficially owns 50% or more of its outstanding
      voting securities.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

       

      
        	
                 
      

              	
                (3)

              	
                Change in Board
      Composition:  During any period of two consecutive years,
      individuals who constitute the Company’s Board of Directors at the
      beginning of the two-year period cease for any reason to constitute at
      least a majority of the Company’s Board of Directors; provided, however,
      that for purposes of this clause (3), each director who is first elected
      by the board (or first nominated by the board for election by the
      stockholders) by a vote of at least two-thirds (2⁄3) of the directors who
      were directors at the beginning of the two-year period shall be deemed to
      have also been a director at the beginning of such period;
    or

              

      

      

      
        
          	
                	
                  (4) 

                	
                  Sale of
      Assets:  The Company sells to a third party all or
      substantially all of its
assets.

                

        

      

      

      Notwithstanding anything in this Plan
to the contrary, in no event shall the reorganization of the Bank into the
mutual holding company form of organization or the conversion of the Bank to the
full stock holding company form of organization (including the elimination of
the mutual holding company) constitute a “Change in Control” for purposes of
this Plan.

      

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

      

      EMPLOYER
means Northeast Community Bank.

      

      ERISA
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

      

      EXECUTIVE
means a management or highly compensated employee of the Employer designated by
the Administrator as eligible to participate in the Plan.

      

      NORMAL
RETIREMENT means termination of a Participant’s employment with the
Employer for any reason other than for Cause after such Participant has reached
his Normal Retirement Age.

      

      NORMAL
RETIREMENT AGE means the normal retirement age set forth in the
Participant’s Participation Agreement.

      

      PARTICIPANT
means any Executive who elects to participate in the Plan by entering into a
Participation Agreement in accordance herewith.

      

      PARTICIPATION
AGREEMENT means a written agreement between the Employer and a
Participant, pursuant to which the Employer agrees to make SERP Benefit payments
in accordance with the Plan and the Participation Agreement. Each Participation
Agreement shall contain such information, terms and conditions as the
Administrator in its discretion may specify, including without limitation, the
following:

      

      
        	
              	
                (a) 

              	
                the
      effective date of the Participant’s participation in the
    Plan;

              

      

      

      
        	
              	
                (b) 

              	
                the
      Participant’s Normal Retirement
Age;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                the
      SERP Benefits to which the Participant is entitled under the Plan and the
      form of payment for such benefits (i.e. installments or lump
      sum);

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	
              	
                (d) 

              	
                the
      identity of the Participant’s Beneficiary;
and

              

      

      

      
        	
                 
      

              	
                (e)

              	
                any
      other provisions which supplement the terms and conditions contained in
      the Plan and which are not inconsistent with the terms and conditions of
      the Plan.

              

      

      

      SERP
BENEFIT means, with respect to each Participant, an annual cash benefit
in the amount determined pursuant to the Participant’s Participation
Agreement.

      

      YEARS
OF SERVICE shall have the meaning set forth in the Participant’s
Participation Agreement.

      

      ARTICLE
III

      ELIGIBILITY
AND PARTICIPATION

      

      3.1          ELIGIBILITY.
The Administrator, in its sole discretion, shall from time to time determine
those Executive(s) who shall be eligible to participate in the
Plan.

      

      3.2          PARTICIPATION.
Each Executive who is eligible to participate in the Plan shall enroll in the
Plan by entering into a Participation Agreement and completing such other forms
and furnishing such other information as the Administrator may request. An
Executive’s participation in the Plan shall commence as of the date specified in
the Participation Agreement.

      

      ARTICLE
IV

      BENEFITS

      

      4.1          SERP
BENEFIT.
Each Participant, subject to the terms and conditions of his Participation
Agreement, shall become entitled to receive SERP Benefits in the amounts and for
the periods set forth in the executed Participation Agreement.

      

      4.2          NO
BENEFITS PAYABLE UPON TERMINATION FOR CAUSE.
Notwithstanding anything in this Plan or in any Participation Agreement to the
contrary, no benefits shall be payable to any Participant who is terminated from
his or her employment with the Employer for Cause. For purposes hereof,
termination for Cause shall mean the following:

      

      Termination
of employment because of the Participant’s personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law, rule
or regulation (other than traffic violations or similar infractions) or a final
cease-and-desist order.

      

      4.3          DISTRIBUTIONS TO SPECIFIED
EMPLOYEE.

      

      
        	
                 
      

              	
                (a)

              	
                If
      any employee is a “Specified Employee,” as defined in subsection (b)
      below, upon a termination of employment for any reason other than
      Disability or death, a distribution may not be made before the date which
      is 6 (six) months after the date of separation from service (or, if
      earlier, the date of death of the
employee).

              

      

      

      
        	
                 
      

              	
                (b)

              	
                A
      “Specified Employee” means a key employee (as defined in Code Section
      416(i) without regard to paragraph (5) thereof) of a corporation any stock
      in which is publicly traded on an established securities market or
      otherwise, all within the meaning of Code Section
      409A(a)(2)(B)(i).

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      ARTICLE
V

      BENEFICIARIES

      

      5.1          BENEFICIARY.
For purposes of this section, the Participant’s executed Participation Agreement
shall dictate the Participant’s rights and responsibilities regarding the
Participant’s Beneficiary(ies).

      

      ARTICLE
VI

      PLAN
ADMINISTRATION

      

      6.1          ADMINISTRATION.

      

      
        	
                 
      

              	
                (a)

              	
                General.
      The Plan shall be administered by the Administrator. The Administrator
      shall have sole and absolute discretion to interpret where necessary all
      provisions of the Plan and each Participation Agreement (including,
      without limitation, by supplying omissions from, correcting deficiencies
      in, or resolving inconsistencies or ambiguities in, the language of the
      Plan, a Participation Agreement, or between the Plan and a Participation
      Agreement), to determine the rights and status under the Plan of
      Participants or other persons, to resolve questions or disputes arising
      under the Plan and to make any determinations with respect to the benefits
      payable under the Plan and the persons entitled thereto as may be
      necessary for the purposes of the Plan. The Administrator’s determination
      of the rights of any Executive or former Executive hereunder shall be
      final and binding on all persons, subject only to the claims procedures
      outlined in Article 7 hereof.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Delegation
      of Duties.
      The Administrator may delegate any of its administrative duties,
      including, without limitation, duties with respect to the processing,
      review, investigation, approval and payment of benefits payable hereunder,
      to a named administrator or
administrators.

              

      

      

      6.2          REGULATIONS.
The Administrator may promulgate any rules and regulations it deems necessary in
order to carry out the purposes of the Plan or to interpret the provisions of
the Plan; provided, however, that no rule, regulation or interpretation shall be
contrary to the provisions of the Plan. The rules, regulations and
interpretations made by the Administrator shall, subject only to the claims
procedure outlined in Article 7 hereof, be final and binding on all
persons.

      

      6.3          REVOCABILITY
OF ADMINISTRATOR/EMPLOYER ACTION.
Any action taken by the Administrator with respect to the rights or benefits
under the Plan of any Executive or former Executive shall be revocable by the
Administrator as to payments not yet made to such person in order to correct any
incorrect payment to a Participant or a Beneficiary, and then only to the extent
necessary to correct such error. Acceptance of any benefits under the Plan
constitutes acceptance of, and agreement to, the Administrator’s making any
appropriate adjustments in future payments to such person to correct any
previously made overpayment or underpayment.

      

      6.4          AMENDMENT.

      

      
        	
                 
      

              	
                (a)

              	
                Right
      to Amend. The Board, by written instrument, shall have the right to
      amend the Plan at any time and with respect to any provisions hereof, and
      all parties hereto or claiming any interest hereunder shall be bound by
      such amendment; provided, however, that no such amendment shall, without
      the Participant’s consent, affect or otherwise modify the rights of a
      Participant under a Participation Agreement in effect prior to the
      amendment.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

      

       

      
        	
                 
      

              	
                (b)

              	
                Amendment
      Required by Law. Notwithstanding the provisions of Section 6.4(a),
      the Plan may be amended at any time, retroactively if required, if found
      necessary, in the opinion of the Board, in order to ensure that the Plan
      is characterized as a non-tax-qualified plan of deferred supplemental
      retirement compensation maintained for members of a select group of
      executives and thus exempt from ERISA and in compliance with all other
      provisions under the Code, as such provisions relate to the original
      purpose of this Plan, supplemental retirement income to the Participant(s)
      and/or other related Plan and Employer
  objectives.

              

      

      

      6.5          TERMINATION.
The Board of the Employer reserves the right, at any time, to terminate the
Plan; provided however, that no such termination shall, without the
Participant’s consent, affect or otherwise modify the rights of a Participant
under a Participation Agreement in effect prior to the effective date of
termination.  Following termination of the Plan, unless otherwise
agreed to by the parties, such Participation Agreement shall remain in effect
and shall be construed by the terms of the Plan in effect prior to the
termination.

      

      6.6          WITHHOLDING.
The Employer shall deduct from any distributions hereunder any taxes or other
amounts required by law to be withheld therefrom.

      

      ARTICLE
VII

      CLAIMS
ADMINISTRATION

      

      7.1          GENERAL.
If a Participant, Beneficiary or his or her representative is denied all or a
portion of an expected Plan benefit for any reason and the Participant,
Beneficiary or his or her representative desires to dispute the decision of the
Administrator, he/she must file a written notification of his or her claim with
the Administrator.

      

      7.2          CLAIMS
PROCEDURE.
Upon receipt of any written claim for benefits, the Administrator shall be
notified and shall give due consideration to the claim presented. If any
Participant or Beneficiary claims to be entitled to benefits under the Plan and
the Administrator determines that the claim should be denied in whole or in
part, the Administrator shall, in writing, notify such claimant within ninety
(90) days of receipt of the claim that the claim has been denied. The
Administrator may extend the period of time for making a determination with
respect to any claim for a period of up to ninety (90) days, provided that the
Administrator determines that such an extension is necessary because of special
circumstances and notifies the claimant, prior to the expiration of the initial
ninety (90) day period, of the circumstances requiring the extension of time and
the date by which the Administrator expects to render a decision. If the claim
is denied to any extent by the Administrator, the Administrator shall furnish
the claimant with a written notice setting forth:

      

      
        	
              	
                (a) 

              	
                the
      specific reason or reasons for denial of the
  claim;

              

      

      

      
        	
              	
                (b) 

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

              

      

      

      
        	
                 
      

              	
                (c)

              	
                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

              

      

       

      
        	
              	
                (d) 

              	
                an
      explanation of the provisions of this
Article.

              

      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      

      7.3          RIGHT
OF APPEAL.
A claimant who has a claim denied under Section 7.2 may appeal to the
Administrator for reconsideration of that claim. A request for reconsideration
under this section must be filed by written notice within sixty (60) days after
receipt by the claimant of the notice of denial under Section 7.2.

      

      7.4          REVIEW
OF APPEAL.
Upon receipt of an appeal the Administrator shall promptly take action to give
due consideration to the appeal. Such consideration may include a hearing of the
parties involved, if the Administrator feels such a hearing is necessary. In
preparing for this appeal, the claimant shall have the right to review pertinent
documents and submit in writing a statement of issues and comments. After
consideration of the merits of the appeal, the Administrator shall issue a
written decision, which shall be binding on all parties. The decision shall
specifically state its reasons and pertinent Plan provisions on which it relies.
The Administrator’s decision shall be issued within sixty (60) days after the
appeal is filed, except that the Administrator may extend the period of time for
making a determination with respect to any claim for a period of up to sixty
(60) days, provided that the Administrator determines that such an extension is
necessary because of special circumstances and notifies the claimant, prior to
the expiration of the initial sixty (60) day period, of the circumstances
requiring the extension of time and the date by which the Administrator expects
to render a decision.

      

      7.5          DESIGNATION.
The Administrator may designate any other person of its choosing to make any
determination otherwise required under this Article. Any person so designated
shall have the same authority and discretion granted to the Administrator
hereunder.

      

      7.6          LITIGATION
COSTS.
If a claimant brings a lawsuit for benefits hereunder, to enforce any right
hereunder or for other relief arising out of the terms of the Plan, the costs
and expenses of litigation by any party shall be borne by the losing party. The
prevailing party shall recover as expenses all reasonable attorneys’ fees
incurred by it in connection with the proceedings or any appeals
therefrom.

      

      ARTICLE
VIII

      MISCELLANEOUS

      

      8.1          ADMINISTRATOR.
The Administrator is expressly empowered to interpret the Plan and to determine
all questions arising in the administration, interpretation, and application of
the Plan; to employ actuaries, accountants, counsel, and other persons it deems
necessary in connection with the administration of the Plan; to request any
information from the Employer it deems necessary to determine whether the
Employer would be considered insolvent or subject to a proceeding in bankruptcy;
and to take all other necessary and proper actions to fulfill its duties as
Administrator. The Administrator is relieved of all responsibility in connection
with its duties hereunder to the fullest extent permitted by law, except any
breach of duty to the Participants or Beneficiaries. If any individual shall
have been delegated the duties or responsibilities as Administrator, such person
shall not be liable for any actions by him or her hereunder unless due to his or
her own gross negligence or willful misconduct and shall be indemnified and held
harmless by the Employer from and against all personal liability to which he or
she may be subject by reason of any act done or omitted to be done in his or her
official capacity as Administrator in the good faith administration of the Plan,
including all expenses reasonably incurred in his or her defense in the event
the Employer fails to provide such defense upon request.

      

      8.2          NO
ASSIGNMENT.
No benefit under the Plan or a Participation Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any such action shall be void for all purposes of
the Plan or a Participation Agreement. No benefit
shall in any manner be subject to the debts, contracts, liabilities,
engagements, or torts of any person, nor shall it be subject to attachment or
other legal process for or against any person.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      8.3          NO
EMPLOYMENT RIGHTS.
Participation in this Plan and execution of a Participation Agreement shall not
be construed to confer upon any Participant the legal right to be retained in
the employ of the Employer, or give a Participant or Beneficiary, or any other
person, any right to any payment whatsoever, except to the extent of the
benefits provided for hereunder. Each Participant shall remain subject to
discharge to the same extent as if this Plan had never been adopted and the
Participation Agreement had never been executed.

      

      8.4          INCOMPETENCE.
If the Administrator determines that any person to whom a benefit is payable
under this Plan is incompetent by reason of physical or mental disability, the
Administrator shall have the power to cause the payments becoming due to such
person to be made to another individual for the Participant’s benefit without
responsibility of the Administrator to see to the application of such payments.
Any payment made pursuant to such power shall, as to such payment, operate as a
complete discharge of the Employer, the Administrator, and their
representatives.

      

      8.5          IDENTITY.
If, at any time, any doubt exists as to the identity of any person entitled to
any payment hereunder or the amount or time of such payment, the Administrator
shall be entitled to hold such sum until such identity or amount or time is
determined or until an order of a court of competent jurisdiction is obtained.
The Administrator shall also be entitled to pay such sum into court in
accordance with the appropriate rules of law. Any expenses incurred by the
Employer or Administrator incident to such proceeding or litigation shall be
charged against the SERP Benefit of the affected Participant.

      

      8.6          NO
LIABILITY.
No liability shall attach to or be incurred by any employee of the Employer or
Administrator individually under or by reason of the terms, conditions, and
provisions contained in the Plan, or for the acts or decisions taken or made
under or in connection with the Plan; and, as a condition precedent to the
establishment of this Plan or the receipt of benefits hereunder, or both, such
liability, if any, is expressly waived and released by each Participant and by
any and all persons claiming benefits under the Plan.  Such waiver and
release shall be conclusively evidenced by any act or participation in or the
acceptance of benefits under this Plan.

      

      8.7          EXPENSES.
Except as otherwise provided in the Plan, all expenses incurred in the
administration of the Plan shall be paid by the Employer.

      

      8.8          EMPLOYER
DETERMINATIONS.
Any determinations, actions, or decisions of the Employer (including, but not
limited to, Plan amendments and Plan termination) shall be made by the Board in
accordance with its established procedures or by such other individuals, groups,
or organizations that have been properly delegated by the Board to make such
determinations or decisions.

      

      8.9          CONSTRUCTION.
All questions of interpretation, construction or application arising
under or concerning the terms of this Plan and any Participation Agreement shall
be decided by the Administrator, in its sole and final discretion, whose
decision shall be final, binding and conclusive upon all persons.

      

      8.10       GOVERNING
LAW.
To the extent not preempted by federal laws, this Plan shall be governed by,
construed and administered under the laws of the State of New York.

      

      8.11       SEVERABILITY.
Should any provision of the Plan or any Participation Agreement be deemed or
held to be unlawful or invalid for any reason, such fact shall not adversely
affect the other provisions, unless such invalidity shall render impossible or
impractical the functioning of the Plan and, in such case, the appropriate
parties shall immediately adopt a new provision to take the place of the one
held illegal or invalid. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      8.12        HEADINGS.
The headings contained in the Plan are inserted only as a matter of convenience
and for reference and in no way define, limit, enlarge, or describe the scope or
intent of this Plan nor in any way shall they affect this Plan or the
construction of any provision thereof.

      

      8.13        TERMS.
Capitalized terms shall have meanings as defined herein. Singular nouns shall be
read as plural, masculine pronouns shall be read as feminine, and vice versa, as
appropriate.

      

      8.14        OWNERSHIP
OF ASSETS; RELATIONSHIP WITH EMPLOYER.
Nothing contained in the Plan, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind or a fiduciary
relationship between the Employer and any Participant or any other person. To
the extent that any person acquires a right to receive payments from the
Employer under this Plan, such right shall be no greater than the right of an
unsecured general creditor of the Employer.

      

      8.15        DEPOSITS
IN TRUST.
The Employer may, at its sole discretion, establish with a corporate trustee a
grantor rabbi trust under which all or a portion of the assets of the Plan are
to be held, administered and managed. The trust agreement evidencing the trust
shall conform with the terms of Revenue Procedure 92-64 or any successor
procedure. The Employer in its sole discretion may make deposits to augment the
principal of such trust.

      

      8.16      
SECTION
409A COMPLIANCE.  The
Plan and each Participation Agreement entered into pursuant to this Plan shall
be interpreted in accordance with, and shall comply in form and operation with,
Section 409A of the Code.  Notwithstanding any provision of the Plan
or any Participation Agreement to the contrary, the Board may adopt such
amendments to the Plan or Participation Agreement or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Board determines are necessary or
appropriate to (a) exempt the benefits under the Plan from Section 409A of the
Code and/or preserve the intended tax treatment of the benefits provided with
respect to the deferral, or (b) comply with the requirements of Section 409A
(including, without limitation, any related Department of Treasury
guidance).

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      EXHIBIT
B

      

      NORTHEAST
COMMUNITY BANK

      SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

      

      BENEFICIARY
DESIGNATION

      

      In the
event of the Participant’s death, any benefits to which the Participant may be
entitled shall be paid to the Beneficiary designated below. This Beneficiary
Designation shall be subject to the terms and conditions set forth in the Plan
and shall supersede all prior Beneficiary Designations made by the Participant.
This Beneficiary Designation shall be attached to and become part of that
certain Amended and Restated Participation Agreement, effective as of
_______________, 2010, between the Employer and the Participant.

      

      Primary
Beneficiary:______________________________________________

      

      Secondary
Beneficiary:____________________________________________

       

      IN
WITNESS WHEREOF, the Participant has executed this Beneficiary
Designation as of the date indicated.

    

     

     

     

     

    ___________________________________

    Signature

     

     

    ___________________________________
Printed
Name of Participant 

    
       

       

      ___________________________________

      Datedex1001to10q07428_07072010.htm

Exhibit 10.01

 

SECOND AMENDMENT TO CREDIT AGREEMENT

STEAK N SHAKE OPERATIONS, INC., an Indiana corporation (the "Company") and  FIFTH THIRD BANK, an Ohio banking corporation, successor by merger to Fifth Third Bank, a Michigan banking corporation (the "Bank"), being parties to that certain Credit Agreement dated as of September 30, 2009, (collectively, the "Agreement")  agree to further amend the Agreement by this Second Amendment to Credit Agreement (this "Amendment") as follows.

1.           DEFINITIONS.  All defined terms used herein which not otherwise defined in this Amendment shall have their respective meanings set forth in the Agreement.

	
  

	
 (a)

	
Amended Definitions.  The following definitions appearing under Section 1 of the Agreement are hereby amended and restated in their respective entireties as follows:

	
·  

	
"Applicable Spread" means that number of Basis Points to be taken into account in determining the LIBOR-based Rate, which, effective as of the date of this Agreement shall be 225 Basis Points.

	
·  

	
“Parent” means Biglari Holdings Inc., an Indiana corporation, formerly known as The Steak n Shake Company, an Indiana corporation, and its successors and assigns.

	
  

	
(b)

	
New Definition.  The following new definition is hereby added to Section 1 of the Agreement as follows:

	
·  

	
"Second Amendment" means that certain agreement entitled "Second Amendment to Credit Agreement" entered into by and between the Company and the Bank dated as of August 9, 2010, for the purpose of amending this Agreement.

2.           INCREASE OF THE REVOLVING LOAN.  In order to evidence the increase of the Revolving Loan, Section 2(a)(i) and the first sentence of Section 2(a)(ii) are hereby amended and restated in their respective entireties as follows:

	
  

	
(i)

	
The Commitment -- Use of Proceeds.  From this date and until the Revolving Loan Maturity Date, the Bank agrees to make Advances (collectively, the “Revolving Loan”) under a revolving line of credit from time to time to the Company of amounts not exceeding in the aggregate at any time outstanding the sum of Thirty Million and 00/100 Dollars ($30,000,000.00).  Proceeds of the Revolving Loan may be used by the Company only for working capital and general corporate purposes.

 

  

Page 1 of 6

  

 

	
  

	
(ii)

	
Method of Borrowing.  The obligation of the Company to repay the Revolving Loan will be evidenced by a Promissory Note of the Company in the form of Exhibit “A” attached to the Second Amendment (the “Revolving Note”).

3.           NAME CHANGE.  In order to evidence the Parent name change, Section 3(a) is hereby amended and restated in its entirety as follows:

	
  

	
a.

	
Organization of the Company and the Guarantors.  The Company is a corporation organized, existing and in good standing under the laws of the State of Indiana, and each other Obligor is a corporation or limited liability company duly organized, existing, and in good standing under the laws of the jurisdiction in which it is incorporated or created.  The Company and each Guarantor is qualified to do business in every jurisdiction in which:  (i) the nature of the business conducted or the character or location of properties owned or leased, or the residences or activities of employees make such qualification necessary, and (ii) failure so to qualify might impair the title of the Company or the respective Guarantor to material properties or the Company's or the respective Guarantor’s right to enforce material contracts or result in exposure of the Company or the Guarantor to liability for material penalties in such jurisdiction.  No jurisdiction in which the Company or any Guarantor is not qualified to do business has asserted that the Company or such Guarantor is required to be qualified therein except as disclosed on the “Schedule of Exceptions” attached hereto as Exhibit “C”.  The principal office of the Company and of each Guarantor is located at 36 South Pennsylvania Street, Suite 500, Indianapolis, Indiana  46204.  The Company does not conduct any material operations or keep any material amounts of property at any other location, except as shown on  Schedule I attached hereto.  The Company has not done business under any name other than its present corporate name at any time during the six years preceding the date of this Agreement.  The exact name under which the Company is the name of the Company shown on the signature pages hereof.  Furthermore, the Parent company formerly known as The Steak n Shake Company, an Indiana corporation, has changed its name to Biglari Holdings Inc., an Indiana corporation as of April 8.

4.           REPRESENTATIONS AND WARRANTIES.  In order to induce the Bank to enter into this Amendment, the Company affirms that the representations and warranties contained in the Agreement are correct as of the date of this Amendment, except that (i) they shall be deemed to also refer to this Amendment as well as all documents named herein and, (ii) Section 3(d) of the Agreement shall be deemed also to refer to the most recent audited and unaudited financial statements of the Company delivered to the Bank.

 

  

Page 2 of 6

  

 

5.           EVENTS OF DEFAULT.  The Company certifies to the Bank that no Event of Default or Unmatured Event of Default under the Agreement, as amended by this Amendment, has occurred and is continuing as of the date of this Amendment.

6.           CONDITIONS PRECEDENT.  As conditions precedent to the effectiveness of this Amendment, the Bank shall have received the following contemporaneously with execution and delivery of this Amendment, each duly executed, dated and in form and substance satisfactory to the Bank:

	
  

	
(i)

	

This Amendment duly executed by the Company and the Bank.

	
  

	
(ii)

	

The Revolving Note in the form of Exhibit "A" attached hereto duly executed by the Company.

	
  

	
(iii)

	

The Reaffirmation of Guaranty Agreement in the form attached hereto as Exhibit "B" duly executed by Steak n Shake Enterprises, Inc.

	
  

	
(iv)

	

The Reaffirmation of Guaranty Agreement in the form attached hereto as Exhibit "C" duly executed by Steak n Shake, LLC.

 

	
  

	
(iv)

	
Resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance, respectively, of this Amendment and all other Loan Documents provided for in this Amendment to which the Company is a party, certified by the Secretary of the Board of Directors of the Company as being in full force and effect and duly adopted as of the date of this Amendment.

	
  

	
(v)

	
The Certificate of the Secretary of the Board of Directors of the Company certifying the names of the officer or officers authorized to execute this Amendment and all other Loan Documents provided for in this Amendment to which the Company is a party, together with a sample of the true signature of each such officer, dated as of the date of this Amendment.

	
  

	
(vi)

	
Resolutions of the Board of Directors of Steak n Shake Enterprises, Inc. authorizing the execution, delivery and performance, respectively, of its Reaffirmation of Guaranty Agreement and the other Loan Documents provided for in this Amendment to which Steak n Shake Enterprises, Inc. is a party, certified by the Secretary of the Board of Directors of Steak n Shake Enterprises, Inc. as being in full force and effect and duly adopted as of the date of this Amendment.

 

  

Page 3 of 6

  

	
  

	
(vii)

	
The Certificate of the Secretary of the Board of Directors of Steak n Shake Enterprises, Inc. certifying the names of the officer or officers authorized to execute this Amendment and all other Loan Documents provided for in this Amendment to which Steak n Shake Enterprises, Inc. is a party, together with a sample of the true signature of each such officer, dated as of the date of this Amendment.

	
  

	
(viii)

	
Resolutions of the Board of Directors of Steak n Shake Operations, Inc.,  the sole member of Steak n Shake, LLC authorizing the execution, delivery and performance, respectively, of the Reaffirmation of Guaranty Agreement to be executed by Steak n Shake, LLC and all other Loan Documents provided for in this Amendment to which Steak n Shake, LLC is a party, certified by the Secretary of the Board of Directors of Steak n Shake Operations, Inc. as being in full force and effect and duly adopted as of the date of this Amendment.

	
  

	
(ix)

	
Such other documents as the Bank may reasonably request.

7.           PRIOR AGREEMENTS.  The Agreement, as amended by this Amendment, supersedes all previous agreements and commitments made or issued by the Bank with respect to the Loans and all other subjects of this Amendment, including, without limitation, any oral or written proposals which may have been made or issued by the Bank.

8.           EFFECT OF AMENDMENT.  The provisions contained herein shall serve to supplement and amend the provisions of the Agreement.  To the extent that the terms of this Amendment conflict with the terms of the Agreement, the provisions of this Amendment shall control in all respects.

9.           REAFFIRMATION.  Except as expressly amended by this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect as originally written and as previously amended.

10.         COUNTERPARTS.   This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which when taken together shall be one and the same agreement.

 

  

Page 4 of 6

  

 

IN WITNESS WHEREOF, the Company and the Bank have executed and delivered in Indiana this Second Amendment Credit Agreement by their respective duly authorized officers as of August 9, 2010.

	  	
STEAK N SHAKE OPERATIONS, INC., an Indiana corporation

	  	  
	  	
By:

	/s/ Sardar Biglari
	 	 	Sardar Biglari, Chairman and Chief Executive Officer

	  	
FIFTH THIRD BANK, an Ohio banking corporation, successor by merger to Fifth Third Bank, a Michigan banking corporation

	  	  
	  	
By:

	/s/ William J. Krummen
	  	  	
William J. Krummen, Vice President

 

  

Page 5 of 6

  

 

SCHEDULE OF EXHIBITS

 

	
Exhibit “A”

	
-

	

Promissory Note (Revolving Loan)($30,000,000.00)(Steak n Shake Operations, Inc.)

 

	
Exhibit “B”

	
-

	
Reaffirmation of Guaranty Agreement (Steak n Shake Enterprises, Inc.)

	
Exhibit “C”

	
-

	
Reaffirmation of Guaranty Agreement (Steak n Shake, LLC)

  

Page 6 of 6

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