EXHIBIT 10.5
FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT
DATED DECEMBER 1, 1999
BY AND BETWEEN XXXXXX X. XXXXXX AND
AMERICAN FINANCIAL HOLDINGS, INC.
EXHIBIT 10.5
FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT
DATED DECEMBER 1, 1999
BY AND BETWEEN XXXXXX X. XXXXXX AND
AMERICAN FINANCIAL HOLDINGS, INC.
WHEREAS, the Board of Directors of American Financial Holdings, Inc. (the
"Company") entered into an employment agreement with Xxxxxx X. Xxxxxx
("Executive") dated December 1, 1999 (the "Agreement"); and
WHEREAS, the Company and Executive deem it appropriate to amend the
Agreement to reflect prevailing industry practice and clarify certain terms of
Executive's employment; and
WHEREAS, Section 14 of the Agreement provides that the Agreement may be
modified or amended in writing signed by both the Company and Executive.
NOW, THEREFORE, the Agreement is hereby amended effective June 25, 2002,
as follows:
FIRST CHANGE
Section 3(a) of the Agreement is hereby amended by deleting the last
sentence thereof.
SECOND CHANGE
Section 5(c) of the Agreement is hereby deleted in its entirety and
replaced with the following new Section 5(c):
"(c) Upon the occurrence of a Change in Control followed by Executive's
termination of employment, as provided in paragraph (b) of this Section 5,
the Holding Company (or its successors) shall pay Executive, or in the
event of his subsequent death, his beneficiary or beneficiaries, or his
estate, as the case may be, as severance pay or liquidated damages, or
both, the greater of: (i) the payments and benefits that would be due for
the remaining term of the Agreement pursuant to the provisions of Section
3 of this Agreement, or (ii) five (5) times the sum of the following
items:
(1) the average of Executive's Base Salary (as defined in
Section 3(a) of the Agreement) at the highest rate in effect
during each of the three (3) most recently completed
calendar years preceding the Change in Control;
(2) the average of the cash incentive compensation or bonus paid
to Executive, or accrued on Executive's behalf, with respect
to each of the three (3) most recently completed calendar
years preceding the Change in Control;
(3) the average of the income realized by Executive during each
of the three (3) most recently completed calendar years
preceding the Change in Control as a result of the vesting
of any restricted shares of Holding Company common stock
held by or on behalf of Executive;
(4) the sum of the average of the value of the allocation or
contribution made on behalf of Executive by the Bank under
(i) the American Savings Bank Employee Stock Ownership Plan
("ESOP") and the American Savings Bank Employees' Savings &
Profit Sharing Plan and Trust (or any other tax-qualified
defined contribution retirement plan sponsored by the Bank)
and (ii) Section 4.01 of the American Savings Bank
Supplemental Executive Retirement Plan (or any similar
provision of any similar plan then in effect), during each
of the three (3) most recently completed calendar years
preceding the Change in Control; and
(5) the sum of the average of the annual increase in the value
of Executive's benefit under the (i) Retirement Plan for
Employees of American Savings Bank (or any other
tax-qualified defined benefit retirement plan sponsored by
the Bank) and (ii) the American Savings Bank Benefit
Equalization Plan, as amended (or any similar plan then in
effect), during each of the three (3) most recently
completed calendar years preceding the Change in Control;
and
(6) the average of the value of the premiums paid by the Bank on
Executive's behalf with respect to all employee welfare
benefit plans (including, but not limited to, group health,
dental, life and disability plans) in which Executive
participated during each of the three (3) most recently
completed calendar years preceding the Change in Control;
and
(7) the average of any other taxable income included by the
Holding Company or the Bank on Executive's Form W-2 or
reflected on a Form 1099 provided by the Holding Company or
the Bank to Executive (but excluding income (i) attributable
to the Executive's exercise of a non-statutory stock option
to acquire Holding Company common stock, (ii) the
disqualifying disposition of an incentive stock option to
acquire Holding Company common stock, (iii) relating to the
distribution to Executive of benefits under any
tax-qualified or non-tax-qualified retirement or deferred
compensation plan sponsored by the Holding Company or the
Bank or any retirement or deferred compensation agreement
between Executive and the Holding Company and/or the Bank),
or (iv) attributable to payments made in lieu of any benefit
payable under a plan or agreement covered by the preceding
clause (iii) of this paragraph), during each of the three
(3) most recently completed calendar years preceding the
Change in Control.
For purposes of paragraph 4 of this Section 5(c), the value of allocations
made to Executive under the American Savings Bank Employee Stock Ownership Plan
or Section 4.01 of the American Savings Bank Supplemental Executive Retirement
Plan shall be valued by reference to the fair market value of Holding Company
common stock as of the date of allocation. For purposes of paragraph 5 of this
Section 5(c), the value of the annual increase in Executive's benefit under the
Retirement Plan for Employees of American Savings Bank and the American Savings
Bank Benefit Equalization Plan shall be determined by reference to the
year-over-year increase in the actuarially equivalent lump-sum value of
Executive's accrued benefit under such plans calculated by using the actuarial
factors set forth in the Retirement Plan for Employees of American Savings Bank,
or, if such factors are not available, reasonable actuarial factors established
by reference to Section 417(e) of the Internal Revenue Code of 1986, as amended.
At the election of Executive, which election is to be made prior to or
within thirty (30) days of the Date of Termination on or following a Change in
Control, such payment may be made in a lump sum (without discount for early
payment) on or immediately following the Date of Termination (which may be the
date a Change in Control occurs) or paid in equal monthly installments during
the sixty (60) months following Executive's termination. In the event that no
election is made, payment to Executive will be made on a monthly basis during
the sixty (60) months following Executive's termination.
THIRD CHANGE
Section 5(e) of the Agreement is hereby amended by deleting the reference
to "thirty-six (36)" and replacing with "sixty (60)".
FOURTH CHANGE
Section 10(a) of the Agreement is hereby amended by deleting the reference
to "Section 7" therein and replacing it with a reference to "Section 4".
AMERICAN FINANCIAL HOLDINGS, INC.
/s/ Xxxx X. Xxxxxxxxxx
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For the Entire Board of Directors
Date: July 16, 2002
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EXECUTIVE
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Date: July 16, 2002
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