Document:

itg_Ex_10_6_2

		
			Exhibit 10.6.2
		

		
			 
		

		
			INVESTMENT TECHNOLOGY GROUP, INC.
		

		
			 STOCK UNIT GRANT AGREEMENT
		

		
			FOR EMPLOYEES
		

		
			 
		

		
			THIS GRANT AGREEMENT, dated as of                   (the “Date of Grant”), is entered into by and between Investment Technology Group, Inc. (the “Company”), a Delaware corporation, and                  , an employee of the Company’s direct or indirect subsidiary (the “Employee”).
		

		
			WHEREAS, the Employee has been awarded the following Grant under the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”).  Capitalized terms used herein and not defined herein shall have the meanings set forth in the Plan.  In the event of any conflict between this Grant Agreement and the Plan, the Plan shall control.
		

		
			NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:
		

		
			1.        Grant of Stock Units.  Subject to the terms and conditions set forth in this Grant Agreement and the Plan, the Employee is hereby awarded          Stock Units representing a generally nontransferable right to receive one share of Company Stock, or a cash amount based on the value of one share of Company Stock, as determined by the Committee in its sole discretion, with respect to each underlying Stock Unit at a specified future date (the “Stock Unit Grant”).
		

		
			2.        Grant Subject to Plan Provisions.  This Stock Unit Grant is granted pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The Plan and the Plan prospectus are available on ITG Exchange; provided that paper copies of the Plan and the Plan prospectus are available upon request by contacting the Legal Department of the Company at ITG_Legal.  This Stock Unit Grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other Plan provisions.  The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Plan, and its decisions are conclusive as to any questions arising hereunder.
		

		
			3.        Stock Unit Account.  The Company shall establish and maintain a Stock Unit bookkeeping account (the “Account”) on its records for the Employee and shall record in the Account the number of Stock Units awarded to the Employee.  No shares of stock shall be issued and no cash shall be paid to the Employee at the time the Stock Unit Grant is made.
		

		
			4.        Vesting of the Stock Unit Grant.  Subject to Section 5 below and the other terms and conditions of this Grant Agreement and the Plan, one-third of this Stock Unit Grant shall become vested                    if the Employee has remained continuously employed by the Employer from the Date of Grant through the vesting date and is in Good Standing (as
		

		
			 
		

		
			 
		

		
			

		 

 

		

		
			 
		

		
			defined below) on the vesting date; provided, however, that the Stock Unit Grant shall become immediately vested in full (i) upon a Change in Control Termination (as defined below) or (ii) upon the Employee’s Termination of Service (as defined below) due to the Employee’s death or Disability (as defined below).  To the extent the Change in Control Termination occurs during the six-month period prior to the Change in Control, the Stock Unit Grant shall become vested in full immediately prior to the Change in Control.  Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the Plan shall be subject to the vesting schedule in this Section 4.
		

		
			5.        Termination of Service; Violation of Code of Conduct; [Financial Restatement;] Forfeiture of Unvested Stock Unit Grant.
		

		
			(a)         In the event of the Employee’s Termination of Service for any reason other than due to the Employee’s (i) Change in Control Termination or (ii) death or Disability, in each case, prior to the date the Stock Unit Grant otherwise becomes vested in accordance with Section 4 above, the Stock Unit Grant shall immediately be forfeited by the Employee.  [For non-Operating Committee members only: In addition, whether or not the Employee incurs a Termination of Service, in the event that the Employee materially breaches the Employer’s Code of Business Conduct and Ethics, as such material breach is determined by the Committee in its sole discretion, prior to the date the Stock Unit Grant otherwise becomes vested in accordance with Section 4 above, the Committee may determine, in its sole discretion, that all or a portion of the Stock Unit Grant shall cease to vest effective as of the date of the Employee’s material breach, subject to compliance with applicable law.]  [For Operating Committee members only:  In addition, whether or not the Employee incurs a Termination of Service, if, prior to the date the Stock Unit Grant otherwise becomes vested in accordance with Section 4 above (i) the Employee materially breaches the Employer’s Code of Business Conduct and Ethics, as such material breach is determined by the Committee in its sole discretion, or (ii) the Company is required to prepare a restated financial statement that is filed with an external regulator because of material noncompliance of the Company with any financial reporting requirement, whether or not such restatement involves misconduct of the Employee, then the Committee may determine, in its sole discretion, that the Stock Unit Grant shall cease to vest effective as of the date of the material breach or the date on which the Company is notified of such requirement, as applicable, in each case, subject to compliance with applicable law.]
		

		
			(b)         For purposes of this Agreement, the following terms have the following meanings:
		

		
			(i)          “Cause” means “Cause” as defined in an Employee’s Change in Control Agreement or other applicable agreement with the Employing Entity, or if no such agreement exists or the definition of “Cause” is specifically limited to such applicable agreement, “Cause” means the occurrence of any one or more of the following:  (i) the Employee’s willful failure to substantially perform the Employee’s duties with the Employing Entity or the Company (other than any such failure resulting from the Employee’s Disability), after a written demand for substantial performance is delivered to the Employee that specifically identifies the manner in which the Employing Entity believes that the Employee has not substantially performed the Employee’s duties, and the Employee has failed to remedy the situation within fifteen (15) business days of such written notice from the Employing Entity; (ii) gross negligence in the
		

		
			
		

		
			

		 

		

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			performance of the Employee’s duties which results in material financial harm to the Employing Entity or the Company; (iii) the Employee’s conviction of, or plea of guilty or nolo contendere, to any felony or any other crime involving the personal enrichment of the Employee at the expense of the Employing Entity or the Company; (iv) the Employee’s willful engagement in conduct that is demonstrably and materially injurious to the Employing Entity or the Company, monetarily or otherwise; or (v) the Employee’s willful material violation of any provision of the Company’s code of conduct.
		

		
			(ii)         “Change in Control Termination” means (A)  the Employee’s Involuntary Termination of Service within six months prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (I) was at the request of a third party who has taken steps reasonably calculated or intended to effect a Change in Control or (II) otherwise arose in connection with, or anticipation of, a Change in Control or (B) the Employee’s employment of service is terminated by Involuntary Termination of Service or by the Employee for Good Reason upon or following a Change in Control.
		

		
			(iii)        “Disability” means an Employee’s becoming disabled within the meaning of Section 22(e)(3) of the Code.
		

		
			(iv)        “Good Standing” means the Employee is actively employed by the Employing Entity on the vesting date and has not given a notice of resignation to, or received a notice of termination from, the Employing Entity prior to such date.
		

		
			(v)         “Involuntary Termination of Service” means the Employee incurred a Termination of Service on account of a Termination of Service by the Employing Entity without Cause (other than death or Disability).
		

		
			(vi)        “Termination of Service” means the Employee ceases to be employed by the Employing Entity, the Company and all of the Company’s Subsidiaries.  An Employee employed by a Subsidiary of the Company shall also be deemed to incur a Termination of Service if such Subsidiary ceases to be a Subsidiary of the Company and such Employee does not immediately thereafter become employed by the Company or another Subsidiary of the Company.  Temporary absences from employment because of illness, vacation or leave of absence and transfers among Employers shall not be considered a Termination of Service.
		

		
			6.         Settlement.  In settlement of the Stock Unit Grant, the Employee (or the Employee’s heirs in the event of the Employee’s death) shall receive at the time of vesting of the Stock Unit Grant in accordance with Section 4 above (but not later than March 15 of the calendar year following the calendar year in which the Stock Units vest), either a number of shares of Company Stock equal to the number of vested Stock Units then held by the Employee, or a cash amount equal to the value of the shares of Company Stock underlying the vested Stock Units then held by the Employee, or a combination of cash and shares of Company Stock, as determined by the Committee in its sole discretion, in each case subject to reduction for withholding pursuant to Section 9 below.
		

		
			7.         Rights and Restrictions.  The Stock Unit Grant shall not be transferable, other than by will or under the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee).  Prior to vesting and settlement of the Stock Unit Grant, the Employee shall not have any rights or privileges of a stockholder as to the shares of Company Stock subject to the Stock Unit Grant and shall only have the rights and privileges of a
		

		
			
		

		
			

		 

		

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			stockholder if and when the Stock Unit Grant is settled in shares of Company Stock.  Specifically, prior to vesting and settlement of the Stock Unit Grant, the Employee shall not have the right to receive dividends or the right to vote such shares of Company Stock, nor shall the Employee have the right to sell, assign, pledge, hypothecate, encumber, transfer or otherwise dispose of, in whole or in part, the Stock Unit Grant, prior to vesting of the Stock Unit Grant and shall only have such rights and privileges with respect to the shares of Company Stock subject to the Stock Unit Grant if and when the Stock Unit Grant is settled in shares of Company Stock.  The Employee shall not have any interest in any fund or specific assets of the Employer by reason of this Stock Unit Grant or the Account established for the Employee.
		

		
			8.         Limitations.  Nothing herein shall limit the Company's right to issue Company Stock, or Stock Units or other rights to purchase Company Stock subject to vesting, expiration and other terms and conditions deemed appropriate by the Company and its affiliates.  Nothing expressed or implied herein is intended or shall be construed to confer upon or give to any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Grant Agreement or of any term, covenant or condition hereof.
		

		
			9.         Withholding.  At the time of settlement pursuant to Section 6 above, and in accordance with any rules or regulations of the Committee then in effect, the Company shall withhold an amount equal to the amount of the federal, state or local taxes of any kind required by law to be withheld with respect to the settlement, and in the event that the Stock Units are settled in Company Stock, such withholding shall be pursuant to an automatic share withholding procedure.  To the extent not withheld, the Employee shall pay to the Employing Entity or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at any time with respect to the Stock Unit Grant and the Employing Entity shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld.
		

		
			10.       Expenses of Issuance of Company Stock.  To the extent applicable, the issuance of stock certificates hereunder shall be without charge to the Employee.  The Company shall pay, and indemnify the Employee from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of any Company Stock.
		

		
			11.       Terms are Binding.  The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assignees of the Employee and the Company.
		

		
			12.       Compliance with Law.  The transfer of Company Stock hereunder shall be subject to the terms, conditions and restrictions as set forth in the governing instruments of the Company, Company policies, applicable federal and state securities laws or any other applicable laws or regulations, and approvals by any governmental or regulatory agency as may be required.  By signing this Grant Agreement, the Employee agrees not to sell any Company Stock at a time when applicable laws or the Company policies prohibit a sale.
		

		
			
		

		
			

		 

		

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			13.       References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Grant Agreement.
		

		
			14.       Notices.  Any notice required or permitted to be given under this Grant Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently, by similar process, give notice of:
		

		
			 
		

		
			If to the Company:
		

		
			 
		

		
			Investment Technology Group, Inc.
One Liberty Plaza
		

		
			165 Broadway
		

		
			New York, NY 10006
		

		
			Attention: General Counsel
		

		
			 
		

		
			If to the Employee:
		

		
			 
		

		
			At the Employee’s most recent address shown on the Employing Entity’s corporate records, or at any other address at which the Employee may specify in a notice delivered to the Company in the manner set forth herein.
		

		
			15.       No Right to Continued Employment.  This Stock Unit Grant shall not confer upon the Employee any right to continue in the employ of the Employing Entity or any Employer nor shall this Stock Unit Grant interfere with the right of the Employing Entity to terminate the Employee’s employment at any time.
		

		
			16.       Section 409A.  It is intended that the Stock Unit Grant issued hereunder shall be exempt from, or comply with, Section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the Stock Unit Grant is subject thereto, and the Stock Unit Grant shall be interpreted on a basis consistent with such intent.  In no event shall the Employee, directly or indirectly, designate the calendar year in which the cash or shares underlying the Stock Unit Grant will be settled.  This Grant Agreement may be amended without the consent of the Employee in any respect deemed by the Committee to be necessary in order to preserve compliance with Section 409A of the Code.
		

		
			17.       Costs.  In any action at law or in equity to enforce any of the provisions or rights under this Grant Agreement, including any arbitration proceedings to enforce such provisions or rights, the unsuccessful party to such litigation or arbitration, as determined by the court in a final judgment or decree, or by the panel of arbitrators in its award, shall pay the successful party or parties all costs, expenses and reasonable attorneys' fees incurred by the successful party or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys' fees shall be included as part of the judgment.
		

		
			
		

		
			

		 

		

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			18.       Further Assurances.  The Employee agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Grant Agreement, including but not limited to all acts and documents related to compliance with applicable federal and/or state securities laws.
		

		
			19.       Counterparts.  For convenience, this Grant Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.
		

		
			20.       Governing Law.  This Grant Agreement shall be construed and enforced in accordance with Section 19(h) of the Plan.
		

		
			21.       Entire Agreement.  This Grant Agreement, together with the Plan, sets forth the entire agreement between the parties with reference to the subject matter hereof, and there are no agreements, understandings, warranties, or representations, written, express, or implied, between them with respect to the Stock Unit Grant other than as set forth herein or therein, all prior agreements, promises, representations and understandings relative thereto being herein merged.
		

		
			22.       Amendment; Waiver.  This Grant Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance.  Any such written instrument must be approved by the Committee to be effective as against the Company.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by any party of the breach of any term or provision contained in this Grant Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Grant Agreement.
		

		
			23.       Severability.  Any provision of this Grant Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
		

		
			24.       Recoupment Policy.  The Employee hereby agrees that the Employee will be subject to any compensation clawback or recoupment policies that may be applicable to the Employee as an employee of the Company or any of its affiliates, as in effect from time to time and as approved by the Board or the Committee, whether or not approved before or after the Date of Grant.
		

		
			 
		

		
			 
		

		
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			IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement as of the date first above written.
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						INVESTMENT TECHNOLOGY GROUP, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

				
	
					
						 

					
					
						Title:

				

		
			 
		

		
			 
		

		
			I hereby accept the Stock Unit Grant described in this Grant Agreement, and I agree to be bound by the terms of the Plan and this Grant Agreement.  I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						[Insert Name of the Employee]

				

		
			 
		

		 

		

			7EXHIBIT 10.1

 

 

STANDARD BANK, PaSB

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

FOR

TIMOTHY K. ZIMMERMAN

THIS SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT FOR TIMOTHY K. ZIMMERMAN (the “Agreement”) is effective as of December 31, 2018, and is entered into by Standard Bank, PaSB (the “Bank”) and Timothy K. Zimmerman (“Executive”).

WHEREAS, the Bank wishes to enter into this Agreement with the Executive in order to provide additional retirement benefits to the Executive, who, as a member of senior management, has contributed significantly to the success of the Bank, and whose continued services are vital to the Bank’s continued growth and success; and

WHEREAS, this Agreement is intended to be an unfunded, non-qualified deferred compensation plan that complies with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder and is also intended to be a “top hat” pension plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

ARTICLE I

DEFINITIONS

When used herein, the following words and phrases shall have the meanings below unless the context clearly indicates otherwise:

	
1.1

	
“Account” means an account to which the Bank shall credit all contributions.  The Account shall be utilized solely as a device for the determination and measurement of the amounts to be paid to Executive pursuant to the Agreement.  Executive’s Account shall not constitute or be treated as a trust fund of any kind.

	
1.2

	
“Account Balance” means the balance of Executive’s Account as of the applicable distribution date.

	
1.3

	
“Administrator” means the Compensation Committee of the Board of Directors (“Committee”).

	
1.4

	
“Bank” means Standard Bank, PaSB and any successor to its business and/or assets which assumes and agrees to perform the duties and obligations under this Agreement by operation of law or otherwise.

	
1.5

	
“Beneficiary” means the person or persons designated by Executive as the beneficiary to whom the deceased Executive’s benefits are payable. The beneficiary designation shall be made on the form attached hereto as Exhibit A and filed with the Administrator.  If no Beneficiary is so designated, then the Executive’s estate will be deemed the Beneficiary.

 

  

	
1.6

	
“Benefit Eligibility Date” shall be the date on which Executive is entitled to commencement of benefits under the Agreement.

	
(a)

	
In the event benefits become payable under Section 2.4 on account of Executive’s Separation from Service, the Benefit Eligibility Date shall be the date of the Executive’s Separation from Service, subject to Section 1.6(d).

	
(b)

	
In the event the Survivor’s Benefit becomes payable under Section 2.5 on account of Executive’s death, the Benefit Eligibility Date shall be the first business day of the first month following Executive’s death.

	
(c)

	
In the event the Account Balance becomes payable pursuant to Section 2.7 on account of Executive’s Separation from Service in connection with or within two (2) years following a Change in Control, the Benefit Eligibility Date shall be the date of the Executive’s Separation from Service, subject to Section 1.6(d).

	
(d)

	
Notwithstanding anything in this Section 1.6 to the contrary, if Executive is a Specified Employee of a publicly-traded company and the payment(s) are due to Executive’s Separation from Service (other than due to death), then the Benefit Eligibility Date shall be the first day of the seventh month following Executive’s Separation from Service (if later than the date otherwise specified as the Benefit Eligibility Date).  For purposes of Code Section 409A, the payments due hereunder shall be deemed a single payment.

	
1.7

	
“Board of Directors” shall mean the Board of Directors of the Bank.

	
1.8

	
“Cause” shall mean termination because of: (i) Executive’s personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, regulation (other than traffic violations or similar offenses), final cease and desist order or material breach of any provision of this Agreement which results in a material loss to the Bank, or (ii) Executive’s conviction of a crime or act involving moral turpitude or a final judgment rendered against Executive based upon actions of Executive which involve moral turpitude.  For the purposes of this definition, no act, or the failure to act, on Executive’s part shall be “willful” unless done, or omitted to be done, not in good faith and without reasonable belief that the action or omission was in the best interests of the Bank or its affiliates.

	1.9	
“Change in Control” shall mean any of the following events: (i) a change in the ownership of Standard AVB Financial Corp. (the “Company”) or the Bank; (ii) a change in the effective control of the Company or the Bank; or (iii) a change in the ownership of a substantial portion of the assets of the Company or the Bank, as described below:

		(a)	
A change in ownership occurs on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Bank or the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Bank or the Company.

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		(b)	
A change in the effective control of the Company or Bank occurs on the date that either (A) any one person, or more than one person acting as a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vi)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company or the Bank possessing 30% or more of the total voting power of the stock of the Company or the Bank, or (B) a majority of the members of the Bank’s or the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Bank’s or the Company’s Board of Directors prior to the date of the appointment or election, provided that this subsection is inapplicable where a majority shareholder of the corporation is another corporation.

		(c)	
A change in the ownership of a substantial portion of the Bank’s or the Company’s assets occurs on the date that any one person or more than one person acting as a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company or the Bank that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company or the Bank.  For purposes of this Agreement, “gross fair market value” means the value of the assets of the Company or the Bank, or the value of the assets being disposed of, without regard to any liabilities associated with such assets.

		(d)	
For all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulations section 1.409A-3(i)(5), except to the extent that such regulations are superseded by subsequent guidance.

	
1.10

	
“Disability” means, with respect to Executive, that, in the good faith determination of the Bank:

	
(a)

	
Executive is unable to fulfill his employment responsibilities hereunder by reason of any medically determinable physical or mental impairment which can be expected to result in death or last for a continuous period of not less than 12 months;

	
(b)

	
Executive is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Bank.

1.11   “Effective Date” of this Agreement shall be December 31, 2018.

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1.12

	
“Executive” means Timothy K. Zimmerman, who has been selected and approved by the Board of Directors to enter into the Agreement.

	
1.13

	
“Payout Period” means the time frame during which benefits payable under the Agreement shall be distributed, and all payments under this Agreement shall be paid by lump sum within five (5) business days following the Executive’s Benefit Eligibility Date specified in Section 1.6.

	
1.14

	
“Separation from Service” (or “Separated from Service”) means Executive’s death, retirement or other termination of employment with the Bank within the meaning of Code Section 409A.  No Separation from Service shall be deemed to occur due to military leave, sick leave or other bona fide leave of absence if the period of the leave does not exceed six months or, if longer, so long as Executive’s right to reemployment is provided by law or contract.  If the leave exceeds six months and Executive’s right to reemployment is not provided by law or by contract, then Executive shall have a Separation from Service on the first date immediately following such six-month period.

Whether a Separation from Service has occurred is determined based on whether the facts and circumstances indicate that the Bank and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services Executive would perform after that date (whether as an employee or as an independent contractor) would permanently decrease to less than 50% of the average level of bona fide services performed over the immediately preceding 36 months (or the lesser period of time in which Executive performed services for the Bank).  The determination of whether Executive has had a Separation from Service shall be made by applying the presumptions set forth in the Treasury Regulations under Code Section 409A.

	
1.15

	
“Specified Employee” means an individual who also satisfies the definition of “key employee” as that term is defined in Code Section 416(i) (without regard to paragraph (5) thereof).

	
1.16

	
“Survivor’s Benefit” means the benefit payable to Executive’s Beneficiary following his death in accordance with Section 2.5.

	
1.17

	
“Vested Account Balance” means the portion of Executive’s Account Balance that is vested in accordance with the Vesting Schedule.

	
1.18

	
“Vesting Schedule” means the rate at which the Executive’s Account Balance becomes vested and non-forfeitable.  The Executive’s Account Balance shall become vested as follows:

50% on January  1, 2020

100% on June 30, 2020

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Notwithstanding the foregoing, the Account Balance shall immediately become 100% vested upon Executive’s death or Disability and upon a Separation from Service in connection with or within two years following a Change in Control.

ARTICLE II

BENEFITS

	2.1	
Account.  The Bank shall maintain an Account for Executive to which it shall credit all amounts allocated thereto in accordance with Section 2.2.  Executive’s Account shall be adjusted no less often than annually to reflect the credits made to the Account.  The adjustments shall be made as long any amount remains credited to the Account.  The amounts allocated and adjustments made shall comprise the Account at any time.

	2.2	
Annual Credits to Account.  The Bank shall credit Executive’s Account as of the last day of each calendar year, commencing as of December 31, 2018 (the “Contribution Date”), in an amount equal to five percent (5.0%) of the Executive’s base salary (as of the Contribution Date) and, in addition, the Bank may make a discretionary contribution up to ten percent (10.0%) of the Executive’s Base Salary, as determined by the Board of Directors in its sole discretion, for a total maximum contribution of 15%.  These annual contributions shall only be made if Executive is employed with the Bank as of the Contribution Date.  If a Separation from Service occurs prior to a Contribution Date, the Bank shall credit Executive’s Account a pro-rated amount determined by dividing the number of days during such year, measured from January  1 to December 31, prior to termination of Executive’s employment by 365.  The Executive may not make any contributions under this Agreement and the Bank may, but is not obligated to, make additional discretionary contributions to Executive’s Account from time to time.  

	2.3	
Interest Credits to Account.  The Bank shall credit Executive’s Account with interest on each Contribution Date at a rate equal to the average of the Moody’s Aaa Corporate Bond Index over the prior one-year period (e.g., January 1 through December 31).

	2.4	
Benefit on Separation from Service.  Upon Executive’s Separation from Service, Executive shall be entitled to the Vested Account Balance.  The benefit under this Section 2.4 shall be payable in a single lump sum on the Benefit Eligibility Date specified in Section 1.6(a).

2.5   Survivor’s Benefit.

	
(a)

	
If Executive dies prior to a Separation from Service, Executive’s Beneficiary shall be entitled to the Account Balance, which became 100% vested upon the Executive’s death, payable in a single lump sum on the Benefit Eligibility Date specified in Section 1.6(b).

	
(b)

	
If Executive dies following a Separation from Service but prior to the payment of the Account Balance, Executive’s Beneficiary shall be entitled to the Account Balance payable in a single lump sum on the Benefit Eligibility Date specified in Section 1.6(b).

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	2.6	
Termination for Cause.  Notwithstanding any other provision of this Agreement to the contrary, if Executive is terminated for Cause, all benefits under this Agreement shall be forfeited by Executive and Executive’s participation in the Agreement shall become null and void.

	2.7	
Benefit Payable on Separation from Service in Connection With or Two Years Following a Change in Control.  In the event of the Executive’s Separation from Service (other than for Cause) in connection with or within two (2) years following a Change in Control, the Executive’s Account Balance shall be 100% vested.  The Executive shall be paid the Account Balance, plus a pro-rata interest credit, as determined under Section 2.3, through the date of such Separation from Service, commencing on the Benefit Eligibility Date specified in Section 1.6(c) in a lump sum.

ARTICLE III

BENEFICIARY DESIGNATION

Executive shall make an initial designation of primary and secondary Beneficiaries upon initial participation in the Agreement by completion of a Beneficiary form substantially in the form attached as Exhibit A, and shall have the right to change the designation, at any subsequent time. Any Beneficiary designation shall become effective only when receipt thereof is acknowledged in writing by the Administrator.

ARTICLE IV

EXECUTIVE’S RIGHT TO ASSETS,

ALIENABILITY AND ASSIGNMENT PROHIBITION

At no time shall Executive be deemed to have any lien, right, title or interest in or to any specific investment or asset of the Bank. The rights of Executive, any Beneficiary, or any other person claiming through Executive under this Agreement, shall be solely those of an unsecured general creditor of the Bank. Executive, the Beneficiary, or any other person claiming through Executive, shall only have the right to receive from the Bank those payments so specified under this Agreement. Neither Executive nor any Beneficiary under this Agreement shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any of the benefits payable hereunder, nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed by Executive or his Beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise.

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ARTICLE V

ERISA PROVISIONS

	5.1	
Named Fiduciary and Administrator.  The Bank shall be the “Named Fiduciary” and the Committee shall be the Administrator of this Agreement. As Administrator, the Committee shall be responsible for the management, control and administration of the Agreement as established herein. The Committee may delegate to others certain aspects of the management and operational responsibilities of the Agreement, including the employment of advisors and the delegation of ministerial duties to qualified individuals.

	5.2	
Claims Procedure and Arbitration.  In the event that benefits under this Agreement is not paid to  Executive (or to his Beneficiary in the case of Executive’s death) and the claimant(s) feel he or they are entitled to receive the benefits, then a written claim must be made to the Administrator within sixty (60) days from the date payments are refused. The Administrator shall review the written claim and, if the claim is denied, in whole or in part, it shall provide in writing, within thirty (30) days of receipt of such claim, its specific reasons for such denial, reference to the provisions of this Agreement upon which the denial is based, and any additional material or information necessary for such claimants to perfect the claim. The written notice by the Administrator shall further indicate the additional steps which must be undertaken by claimants if an additional review of the claim denial is desired.

If claimants desire a second review, they shall notify the Administrator in writing within thirty (30) days of the first claim denial. Claimants may review this Agreement or any documents relating thereto and submit any issues and comments, in writing, they may feel appropriate. In its sole discretion, the Administrator shall then review the second claim and provide a written decision within thirty (30) days of receipt of such claim. This decision shall state the specific reasons for the decision and shall include reference to specific provisions of this Agreement upon which the decision is based.

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 Agreement until the claimant has first exhausted the provisions set forth in this Section 5.2.

 

ARTICLE VI

MISCELLANEOUS

	6.1	
No Effect on Employment Rights.  Nothing contained herein will confer upon Executive the right to be retained in the service of the Bank nor limit the right of the Bank to discharge or otherwise deal with Executive without regard to the existence of this Agreement.

	6.2	
State Law.  This Agreement is established under, and will be construed according to, the laws of the Commonwealth of Pennsylvania, to the extent such laws are not preempted by ERISA and valid regulations published thereunder or any other federal law.

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	6.3	
Severability and Interpretation of Provisions.  The Bank shall have full power and authority to interpret, construe and administer this Agreement and the Bank’s interpretation and construction thereof and actions thereunder shall be binding and conclusive on all persons for all purposes.  No employee or representative of the Bank shall be liable to any person for any actions taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his own willful misconduct or lack of good faith.  In the event that any of the provisions of this Agreement or portion hereof are held to be inoperative or invalid by any court of competent jurisdiction, or in the event that any provision is found to violate Code Section 409A and would subject Executive to additional taxes and interest on the amounts deferred hereunder, or in the event that any legislation adopted by any governmental body having jurisdiction over the Bank would be retroactively applied to invalidate this Agreement or any provision hereof or cause the benefits under this Agreement to be taxable, then: (1) insofar as is reasonable, effect will be given to the intent manifested in the provisions held invalid or inoperative, and (2) the validity and enforceability of the remaining provisions will not be affected thereby.  In the event that the intent of any provision shall need to be construed in a manner to avoid taxability, this construction shall be made by the Administrator in a manner that would manifest to the maximum extent possible the original meaning of such provisions.

	6.4	
Incapacity of Recipient.  If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his property, the Bank may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Bank may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  The distribution shall completely discharge the Bank for all liability with respect to the benefit.

	6.5	
Unclaimed Benefit.  Executive shall keep the Bank informed of his or her current address and the current address of his Beneficiaries. If the location of Executive is not made known to the Bank, the Bank shall delay payment of Executive’s benefit payment(s) until the location of Executive is made known to the Bank; however, the Bank shall only be obligated to hold the benefit payment(s) for Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Bank may discharge its obligation by payment to Executive’s Beneficiary. If the location of Executive’s Beneficiary is not known to the Bank, Executive and his Beneficiary(ies) shall thereupon forfeit any rights to the balance, if any, of any benefits provided for such Executive and/or Beneficiary under this Agreement.

	6.6	
Limitations on Liability.   Notwithstanding any of the preceding provisions of the Agreement, no individual acting as an employee or agent of the Bank, or as a member of the Board of Directors shall be personally liable to Executive or any other person for any claim, loss, liability or expense incurred in connection with the Agreement.

	6.7	
Gender.  Whenever in this Agreement words are used in the masculine or neuter gender, they shall be read and construed as in the masculine, feminine or neuter gender, whenever they should so apply.

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	6.8	
Effect on Other Corporate Benefit Agreements.  Nothing contained in this Agreement shall affect the right of Executive to participate in or be covered by any qualified or nonqualified pension, profit sharing, group, bonus or other supplemental compensation or fringe benefit agreement constituting a part of the Bank’s existing or future compensation structure.

	6.9	
Inurement.  This Agreement shall be binding upon and shall inure to the benefit of the Bank, its successors and assigns, and Executive, his successors, heirs, executors, administrators, and Beneficiaries.

	
6.10

	
Headings.  Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement.

	
6.11

	
12 U.S.C. §1828(k).  Any payments made to Executive pursuant to this Agreement or otherwise are subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) or any regulations promulgated thereunder.

	
6.12

	
Payment of Employment Taxes.  Any distribution under this Agreement shall be reduced by the amount of any taxes required to be withheld from the distribution.

	
6.13

	
Successors to the Bank.  The Bank, as applicable, will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank to assume expressly and agree to perform the duties and obligations under this Agreement in the same manner and to the same extent as the Bank would be required to perform it if no such succession had taken place.

	
6.14

	
Legal Fees.  In the event Executive retains legal counsel to enforce any of the terms of the Agreement, the Bank will pay his legal fees and related expenses reasonably incurred by him, but only if Executive prevails in an action seeking legal and/or equitable relief against the Bank.

ARTICLE VII

AMENDMENT

	7.1	
This Agreement may not be amended or modified, in whole or part, without the mutual written consent of Executive and the Bank.  Notwithstanding anything to the contrary herein, the Agreement may be amended without Executive’s consent to the extent necessary to comply with existing tax laws or changes to existing tax laws.

ARTICLE VIII

EXECUTION

	8.1	
This Agreement sets forth the entire understanding of the Bank and Executive with respect to the transactions contemplated hereby, and any previous agreements or understandings between them regarding the subject matter hereof are merged into and superseded by this Agreement.

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	8.2	
This Agreement shall be executed in duplicate, each copy of which, when so executed and delivered, shall be an original, but both copies shall together constitute one and the same instrument.

[signature page follows]

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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed, effective as of the day and date first above written.

 

	 	
STANDARD BANK, PaSB

	 	 
	 	 /s/ Terence L. Graft
	
 /s/ Timothy K. Zimmerman

	
By: Terence L. Graft

	
TIMOTHY K. ZIMMERMAN

	
Title: Chairman of the Board

	 	 
	 

March 12, 2019

	
Date: March 12, 2019

	
Date

	 

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