For service commencing January 1, 2013, which includes all Named
Executive Officers, additional benefits for all participants under the plan will be earned equal to 1% of eligible base pay for each calendar year that a participant completes at least 1,000 hours of service.
Effective August 1, 2020, the Plan was amended to include a soft freeze. The soft freeze will allow those employees in an
eligible position that were hired, rehired, or acquired on or before July 31, 2020, to continue to vest and accrue additional benefits for each year they are credited with 1,000 hours or more. Employees that are hired, rehired, acquired, or
transfer to an eligible job classification on or after August 1, 2020 are not eligible to participate in the Pension Plan.
The accrued annual pension benefit as of December 31, 2020 for Messrs. Seiffert, Harvey, Golding, Reitzes and
Torchio were $8,400, $98,622, $10,246, $2,850 and $7,938, respectively. As of December 31, 2020, none of these participants qualified for early retirement under the Retirement Plan.
Supplemental Executive Retirement Plan
Northwest Bank has adopted a non-qualified supplemental executive retirement plan
(SERP) for certain participants in Northwest Banks Retirement Plan whose benefits are limited by Section 415(b) of the Internal Revenue Code (which limits the amount of annual benefits that may be accrued to fund future
benefit payments) or Section 401(a)(17) of the Internal Revenue Code (which places a limitation on compensation taken into account for tax-qualified plan purposes; for 2020, that limit was $285,000). The
SERP provides the designated executives with retirement benefits generally equal to the difference between the benefit that would be available under the Retirement Plan but for the limitations imposed by Internal Revenue Code Sections 401(a)(17) and
415(b) and that which is actually funded under the Retirement Plan as a result of the limitations.
Participants must
elect the method of payment. Options for payment include a lump sum, three substantially equal annual installments, or five substantially equal annual installments, starting within 30 days of the earliest of the following events: the
participants death, disability, retirement or a change in control, provided, however, that if the participant is a specified employee under Section 409A of the Internal Revenue Code, distribution following retirement must be delayed for
six months. The SERP is considered an unfunded plan for tax and ERISA purposes. All obligations arising under the SERP are payable from the general assets of Northwest Bank. The benefits paid under the SERP supplement the benefits paid by the
Retirement Plan.
The accrued annual pension benefit as of December 31, 2020 for Messrs. Seiffert, Harvey, Golding,
Reitzes and Torchio were $12,153, $9,612, $515, $542 and $667 respectively. As of December 31, 2020, none of these participants qualified for early retirement under the SERP.
Employment Agreements
Northwest Bancshares, Inc. and Northwest Bank are parties to a two-year employment
agreement with each of Messrs. Seiffert, Harvey, Golding, Reitzes and Torchio. On each anniversary date, non-fixed term contracts may be renewed for an additional year and a contract that is not renewed
expires twelve months following the anniversary date. Under the agreements, the 2020 base salaries of Messrs. Seiffert, Harvey, Golding, Reitzes and Torchio of $788,000, $474,000, $350,000, $350,000 and $350,000 respectively, are reviewed annually
and may be increased but not decreased. In the event Northwest Bancshares, Inc. or Northwest Bank terminates their employment for reasons other than for just cause (as defined in the agreement), or if they resign due to good
reason (as defined in the agreement), with or without a change in control (as defined in the agreement), within 30 days after the executives termination of employment, Northwest Bancshares, Inc. or Northwest Bank (or any
successor) will pay the executive a cash lump sum equal to:
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(i)
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the sum of three times the highest rate of base salary and three times the highest rate of cash bonus paid
during the prior three years, and
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(ii)
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continuation of medical and dental coverage for 36 months from the date of termination, unless they obtain
similar benefits from their new employer.
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To the extent necessary, in order to avoid penalties under
Section 409A of the Internal Revenue Code, the base salary and bonus amount shall be paid in a lump sum on the first day of the seventh month following the date of termination. During the employment term and thereafter,
the executive shall be indemnified and covered under a standard directors and officers liability insurance policy provided by Northwest Bancshares, Inc. or Northwest Bank against all expenses and liabilities reasonably incurred in
connection with or arising out of any action in which the executive may have been involved by reason of his having been a director or officer of Northwest Bancshares, Inc. or Northwest Bank, including judgments, court costs, attorneys fees and
settlements approved by the Compensation Committee. However, such indemnification does not apply to matters where the executive is adjudged liable for willful misconduct in performing his duties. All payments under any of the agreements will be made
by Northwest Bank, but if not timely paid, Northwest Bancshares, Inc. shall make such payments. The agreements are binding on successors to Northwest Bancshares, Inc. and Northwest Bank.
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