Exhibit 10.2
Form of proposed employment Agreement between
Cohoes Bancorp, Inc. and certain executive officers
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
_____ ___, 1998 by and between Cohoes Bancorp, Inc., a business corporation
organized and existing under the laws of the State of Delaware (the "Company"),
and Xxxxxxx X. Xxx (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive currently serves as the Executive Vice
President, Chief Financial Officer and Secretary of the Company and as the
Executive Vice President, Chief Financial Officer and Secretary of Cohoes
Savings Bank (the "Bank"), and effective as of the date of this Agreement, the
Bank has converted from mutual to capital stock form and has become the wholly
owned subsidiary of the Company; and
WHEREAS, the Company desires to assure for itself the continued
availability of the Executive's services as provided in this Agreement, and the
Board of Directors of the Company (the "Board") recognizes the need for the
Executive to be able to perform such services with a minimum of personal
distraction in the event of a pending or threatened Change in Control (as
hereinafter defined); and
WHEREAS, the Executive is willing to continue to serve the Company on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, the Company and the Executive
hereby agree as follows:
SECTION 1. EMPLOYMENT.
The Company agrees to continue to employ the Executive, and the
Executive hereby agrees to such continued employment, during the period and upon
the terms and conditions set forth in this Agreement.
SECTION 2. EMPLOYMENT PERIOD; REMAINING UNEXPIRED EMPLOYMENT PERIOD.
(a) The terms and conditions of this Agreement shall be and
remain in effect during the period of employment established under this section
2 ("Employment Period"). The Employment Period shall be for an initial term of
three years beginning on the date of this Agreement and ending on the third
anniversary date of this Agreement (each, an "Anniversary Date"), plus such
extensions, if any, as are provided pursuant to section 2(b).
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the Employment Period shall automatically be extended for one
additional day each day, unless either
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the Company or the Executive elects not to extend the Agreement further by
giving written notice thereof to the other party, in which case the Employment
Period shall end on the third anniversary of the date on which such written
notice is given. For all purposes of this Agreement, the term "Remaining
Unexpired Employment Period" as of any date shall mean the period beginning on
such date and ending on the last day of the Employment Period taking into
account any extensions under this section 2(b). Upon termination of the
Executive's employment with the Company for any reason whatsoever, any daily
extensions provided pursuant to this section 2(b), if not theretofore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Company at any time from terminating the Executive's employment during the
Employment Period with or without notice for any reason; provided, however, that
the relative rights and obligations of the Company and the Executive in the
event of any such termination shall be determined under this Agreement.
SECTION 3. DUTIES.
The Executive shall serve as the Executive Vice President, Chief
Financial Officer and Secretary of the Company, having such power, authority and
responsibility and performing such duties as are prescribed by or under the
By-Laws of the Company and as are customarily associated with such position. The
Executive shall devote his full business time and attention (other than during
weekends, holidays, approved vacation periods, and periods of illness or
approved leaves of absence) to the business and affairs of the Company and shall
use his best efforts to advance the interests of the Company.
SECTION 4. CASH COMPENSATION.
In consideration for the services to be rendered by the Executive
hereunder, the Company shall pay to him a salary equal to the base salary from
the Company and the Bank in effect on the date of this Agreement, less the
amount of base salary actually paid to the Executive by the Bank during the
Employment Period. The Executive's salary shall be payable in approximately
equal installments in accordance with the Company's customary payroll practices
for senior officers. The Board shall review the Executive's annual rate of
salary at such times during the Employment Period as it deems appropriate, but
not less frequently than once every twelve months, and may, in its discretion,
approve an increase therein. In addition to salary, the Executive may receive
other cash compensation from the Company for services hereunder at such times,
in such amounts and on such terms and conditions as the Board may determine from
time to time.
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SECTION 5. EMPLOYEE BENEFIT PLANS AND PROGRAMS.
During the Employment Period, the Executive shall be treated as an
employee of the Company and shall be entitled to participate in and receive
benefits under any and all qualified or non-qualified retirement, pension,
savings, profit-sharing or stock bonus plans, any and all group life, health
(including hospitalization, medical and major medical), dental, accident and
long term disability insurance plans, and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Company, in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and consistent
with the Company's customary practices.
SECTION 6. INDEMNIFICATION AND INSURANCE.
(a) During the Employment Period and for a period of six years
thereafter, the Company shall cause the Executive to be covered by and named as
an insured under any policy or contract of insurance obtained by it to insure
its directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of the Company or service in
other capacities at the request of the Company. The coverage provided to the
Executive pursuant to this section 6 shall be of the same scope and on the same
terms and conditions as the coverage (if any) provided to other officers or
directors of the Company.
(b) To the maximum extent permitted under applicable law,
during the Employment Period and for a period of six years thereafter, the
Company shall indemnify the Executive against and hold him harmless from any
costs, liabilities, losses and exposures to the fullest extent and on the most
favorable terms and conditions that similar indemnification is offered to any
director or officer of the Company or any subsidiary or affiliate thereof.
SECTION 7. OUTSIDE ACTIVITIES.
The Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld); provided, however, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; provided, however, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Company and generally applicable to
all similarly situated Executives. The Executive may also serve as an officer or
director of the Bank on such terms and conditions as the Company and the Bank
may mutually agree upon, and such service shall not be deemed to materially
interfere with the Executive's performance of his duties hereunder or otherwise
result in a material breach of this Agreement. If the Executive is discharged or
suspended, or is subject to any regulatory prohibition or restriction with
respect to participation in the affairs of the Bank, he shall continue to
perform services for the Company in accordance with this Agreement but shall not
directly or indirectly provide services to
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or participate in the affairs of the Bank in a manner inconsistent with the
terms of such discharge or suspension or any applicable regulatory order.
SECTION 8. WORKING FACILITIES AND EXPENSES.
The Executive's principal place of employment shall be at the Company's
executive offices located in Cohoes, New York, or at such other location within
50 miles of the address at which the Company shall maintain its principal
executive offices, or at such other location as the Company and the Executive
may mutually agree upon. The Company shall provide the Executive at his
principal place of employment with a private office, secretarial services and
other support services and facilities suitable to his position with the Company
and necessary or appropriate in connection with the performance of his assigned
duties under this Agreement. The Company shall reimburse the Executive for his
ordinary and necessary business expenses, including, without limitation, the
Executive's travel and entertainment expenses incurred in connection with the
performance of his duties under this Agreement, in each case upon presentation
to the Company of an itemized account of such expenses in such form as the
Company may reasonably require.
SECTION 9. TERMINATION OF EMPLOYMENT WITH BENEFITS.
(a) The Executive shall be entitled to the benefits described
in section 9(b) in the event that:
(i) his employment with the Company terminates during
the Employment Period as a result of the Executive's voluntary
resignation within 90 days following:
(A) the failure of the Board to appoint or
re-appoint or elect or re-elect the Executive to the
position with the Company stated in section 3 of this
Agreement (or a more senior office);
(B) if the Executive is a member of the
Board, the failure of the shareholders of the Company
to elect or re-elect the Executive to the Board or
the failure of the Board (or the nominating committee
thereof) to nominate the Executive for such election
or re-election;
(C) the expiration of a 30-day period
following the date on which the Executive gives
written notice to the Company of its material
failure, whether by amendment of the Company's
Certificate of Incorporation, the Company's By-Laws,
action of the Board or the Company's shareholders or
otherwise, to vest in the Executive the functions,
duties, or responsibilities prescribed in section 3
of this Agreement, unless, during such 30-day period,
the Company cures such failure;
(D) the expiration of a 30-day period
following the date on which the Executive gives
written notice to the Company of its material breach
of any term, condition or covenant contained in this
Agreement (including, without limitation, any
reduction of the Executive's rate of base salary in
effect from time to time and any change in the terms
and conditions of any compensation or benefit program
in which the Executive participates
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which, either individually or together with other
changes, has a material adverse effect on the
aggregate value of his total compensation package),
unless, during such 30-day period, the Company cures
such failure; or
(E) a change in the Executive's principal
place of employment for a distance in excess of 50
miles from the Company's principal office in Cohoes,
New York; or
(F) the liquidation, dissolution,
bankruptcy, or insolvency of the Company, the Bank or
any of their respective subsidiaries or affiliates;
or
(ii) the Executive's employment with the Company is
terminated by the Company during the Employment Period for any
reason other than for "cause," as provided in section 10(a).
(b) Upon the occurrence of any of the events described in
section 9(a) of this Agreement, the Company shall pay and provide to the
Executive (or, in the event of his death, to his estate):
(i) his earned but unpaid salary (including, without
limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for in
this section 9(b)) as of the date of the termination of his
employment with the Company, such payment to be made at the
time and in the manner prescribed by law applicable to the
payment of wages but in no event later than 30 days after
termination of employment;
(ii) the benefits, if any, to which he is entitled as
a former employee under the employee benefit plans and
programs and compensation plans and programs maintained for
the benefit of the Company's officers and employees;
(iii) continued group life, health (including
hospitalization, medical and major medical), dental, accident
and long term disability insurance benefits, in addition to
that provided pursuant to section 9(b)(ii), and after taking
into account the coverage provided by any subsequent employer,
if and to the extent necessary to provide for the Executive,
for the Remaining Unexpired Employment Period, coverage
equivalent to the coverage to which he would have been
entitled under such plans (as in effect on the date of his
termination of employment, or, if his termination of
employment occurs after a Change of Control, on the date of
such Change of Control, whichever benefits are greater), if he
had continued working for the Company during the Remaining
Unexpired Employment Period at the highest annual rate of
salary achieved during the Employment Period;
(iv) within 30 days following the Executive's
termination of employment with the Company, a lump sum
payment, in an amount equal to the present value of the salary
(excluding any additional payments made to the Executive in
lieu of the use of an automobile) that the Executive would
have earned if he had continued working for the Company during
the Remaining Unexpired Employment Period at the highest
annual rate
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of salary achieved during the Employment Period, where such
present value is to be determined using a discount rate equal
to the applicable short-term federal rate prescribed under
section 1274(d) of the Internal Revenue Code of 1986, as
amended (the "Code"), compounded using the compounding periods
corresponding to the Company's regular payroll periods for its
officers, such lump sum to be paid in lieu of all other
payments of salary provided for under this Agreement in
respect of the period following any such termination;
(v) within 30 days following the Executive's
termination of employment with the Company, a lump sum payment
in an amount equal to the present value of the additional
employer contributions to which he would have been entitled
under the Cohoes Savings Bank 401(k) Savings and
Profit-Sharing Plan, the Cohoes Savings Bank Employee Stock
Ownership Plan (together with the defined contribution portion
of the Benefit Restoration Plan of Cohoes Bancorp, Inc., or
any other supplemental defined contribution plan) and any and
all other qualified and non-qualified defined contribution
plans maintained by, or covering employees of, the Company as
if he were 100% vested thereunder and had continued working
for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of salary achieved during
the Employment Period and making the maximum amount of
employee contributions, if any, required or permitted under
such plan or plans, such present value to be determined on the
basis of a discount rate, compounded using the compounding
period that corresponds to the frequency with which employer
contributions are made to the relevant plan, equal to the
Applicable PBGC Rate;
(vi) within 30 days following the Executive's
termination of employment with the Company, a lump sum payment
in an amount equal to the payments that would have been made
(without discounting for early payment) to the Executive under
any cash bonus or long-term or short-term cash incentive
compensation plan maintained by, or covering employees of, the
Company if he had continued working for the Company during the
Remaining Unexpired Employment Period and had earned the
maximum bonus or incentive award in each calendar year that
ends during the Remaining Unexpired Employment Period, such
payments to be equal to the product of:
(A) the maximum percentage rate at which an
award was ever available to the Executive under such
incentive compensation plan; multiplied by
(B) the salary that would have been paid to
the Executive during each such calendar year at the
highest annual rate of salary achieved during the
Employment Period.
(vii) at the election of the Company made within 30
days following the occurrence of the event described in
section 9(a), upon the surrender of options or appreciation
rights issued to the Executive under any stock option and
appreciation rights plan or program maintained by, or covering
employees of, the Company, a lump sum payment in an amount
equal to the product of:
(A) the excess of (I) the fair market value
of a share of stock of the same class as the stock
subject to the option or appreciation right,
determined as of the date of
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termination of employment, over (II) the exercise
price per share for such option or appreciation
right, as specified in or under the relevant plan or
program; multiplied by
(B) the number of shares with respect to
which options or appreciation rights are being
surrendered.
For purposes of this section 9(b)(vii), the Executive shall be
deemed fully vested in all options and appreciation rights
under any stock option or appreciation rights plan or program
maintained by, or covering employees of, the Company, even if
he is not vested under the terms of such plan or program; and
(viii) at the election of the Company made within 30
days following the occurrence of the event described in
section 9(a), upon the surrender of any shares awarded to the
Executive under any restricted stock plan maintained by, or
covering employees of, the Company, a lump sum payment in an
amount equal to the product of:
(A) the fair market value of a share of
stock of the same class of stock granted under such
plan, determined as of the date of the Executive's
termination of employment; multiplied by
(B) the number of shares which are being
surrendered.
For purposes of this section 9(b)(viii), the Executive shall
be deemed fully vested in all shares awarded under any
restricted stock plan maintained by, or covering employees of,
the Company, even if he is not vested under the terms of such
plan.
The Company and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Executive's efforts, if any, to
mitigate damages. The Company and the Executive further agree that the Company
may condition the payments and benefits (if any) due under sections 9(b)(iii),
(iv), (v) and (vi) on the receipt of the Executive's resignation from any and
all positions which he holds as an officer, director or committee member with
respect to the Company or any of its subsidiaries or affiliates.
SECTION 10. TERMINATION WITHOUT ADDITIONAL COMPANY LIABILITY.
In the event that the Executive's employment with the Company shall
terminate during the Employment Period on account of:
(a) the discharge of the Executive for "cause," which, for
purposes of this Agreement, shall mean a discharge because the Board determines
that the Executive: (i) has intentionally failed to perform his assigned duties
under this Agreement (including, for these purposes, the Executive's
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inability to perform such duties as a result of drug or alcohol dependency);
(ii) has intentionally engaged in dishonest or illegal conduct in connection
with his performance of services for the Company or has been convicted of a
felony; (iii) has willfully violated, in any material respect, any law, rule,
regulation, written agreement or final cease-and-desist order with respect to
his performance of services for the Company, as determined by the Board; or (iv)
has intentionally breached the material terms of this Agreement;
(b) the Executive's voluntary resignation from employment with
the Company for reasons other than those specified in section 9(a)(i); or
(c) the death of the Executive while employed by the Company,
or the termination of the Executive's employment because of "total and permanent
disability" within the meaning of the Company's or the Bank's long-term
disability plan for employees; then the Company shall have no further
obligations under this Agreement, other than the payment to the Executive of his
earned but unpaid salary as of the date of the termination of his employment and
the provision of such other benefits, if any, to which he is entitled as a
former employee under the Company's employee benefit plans and programs and
compensation plans and programs.
For purposes of this section 10, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the written advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. Prior to the
date on which a Change in Control occurs, the cessation of employment of the
Executive shall not be deemed to be for "cause" within the meaning of section
10(a) unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of three-fourths of the
members of the Board at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is given
an opportunity, together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in section 10(a) above, and specifying the particulars thereof
in detail. On and after the date that a Change in Control occurs, a
determination under this section 10 shall require the affirmative vote of at
least three-fourths of the members of the Board acting in good faith, and such
vote shall not be made prior to the expiration of a 60-day period following the
date on which the Board shall, by written notice to the Executive, furnish to
him a statement of its grounds for proposing to make such determination, during
which period the Executive shall be afforded a reasonable opportunity to make
oral and written presentations to the members of the Board, and to be
represented by his legal counsel at such presentations to refute the grounds for
the proposed determination;
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SECTION 11. TERMINATION UPON OR FOLLOWING A CHANGE IN CONTROL.
(a) A Change in Control of the Company ("Change in Control")
shall be deemed to have occurred upon the happening of any of the following
events:
(i) approval by the shareholders of the Company of a
transaction that would result and does result in the
reorganization, merger or consolidation of the Company,
respectively, with one or more other persons, other than a
transaction following which:
(A) at least 51% of the equity ownership
interests of the entity resulting from such
transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended
("Exchange Act")) in substantially the same relative
proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the outstanding equity ownership
interests in the Company; and
(B) at least 51% of the securities entitled
to vote generally in the election of directors of the
entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially
the same relative proportions by persons who,
immediately prior to such transaction, beneficially
owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) at least 51% of the
securities entitled to vote generally in the election
of directors of the Company;
(ii) the acquisition of all or substantially all of
the assets of the Company or beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
25% or more of the outstanding securities of the Company
entitled to vote generally in the election of directors by any
person or by any persons acting in concert, or approval by the
shareholders of the Company of any transaction which would
result in such an acquisition;
(iii) a complete liquidation or dissolution of the
Company, or approval by the shareholders of the Company of a
plan for such liquidation or dissolution;
(iv) the occurrence of any event if, immediately
following such event, at least 50% of the members of the Board
do not belong to any of the following groups:
(A) individuals who were members of the
Board on the date of this Agreement; or
(B) individuals who first became members of
the Board after the date of this Agreement either:
(1) upon election to serve as a
member of the Board by affirmative vote of
three-quarters of the members of such board,
or of a nominating committee thereof, in
office at the time of such first election;
or
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(2) upon election by the
shareholders of the Board to serve as a
member of the Board, but only if nominated
for election by affirmative vote of
three-quarters of the members of the board
of directors of the Board, or of a
nominating committee thereof, in office at
the time of such first nomination;
provided, however, that such individual's election or
nomination did not result from an actual or
threatened election contest (within the meaning of
Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened
solicitation of proxies or consents (within the
meaning of Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) other than by or on behalf of
the Board of the Company; or
(v) any event which would be described in section
11(a)(i), (ii), (iii) or (iv) if the term "Bank" were
substituted for the term "Company" therein and the term "Bank
Board" were substituted for the term "Board" therein.
In no event, however, shall a Change in Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this section 11(a), the term "person" shall have the meaning
assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
(b) In the event that the Executive's employment with the
Company terminates within eighteen months following a Change in Control for any
reason other than for "cause," as described in section 10, the Company shall pay
to the Executive, in addition to the amounts payable pursuant to section 9, a
severance benefit in a lump sum payment, within 25 days after the later of the
effective time of such Change in Control or his termination of employment, equal
to the greater of (i) the sum of the amounts payable as salary pursuant to
section 4 hereof during the Remaining Unexpired Employment Period and as
additional cash compensation pursuant to the terms of section 9(b)(vi) hereof,
or (ii) three times the annual average of the amount paid or payable to the
Executive under section 4 of this Agreement or the corresponding section of any
prior employment agreement with the Company or its predecessor during the five
preceding taxable years of the Executive (or during the entire period of the
Executive's employment with the Company or its predecessor if such period is
less than five years). The Company shall also continue to provide to the
Executive and to his eligible dependents the benefits described in section
9(b)(iii) hereof for a period of at least 36 months following the later of the
effective time of such Change in Control or his termination of employment. In
addition, the Company will guarantee the payment of the severance benefit
provided pursuant to section 11(b) of the Executive's employment agreement with
the Bank.
SECTION 12. TAX INDEMNIFICATION.
(a) This section 12 shall apply if the Executive's employment
is terminated upon or following (i) a Change in Control (as defined in section
11 of this Agreement); or (ii) a change "in the ownership or effective control"
of the Company or the Bank or "in the ownership of a substantial portion of the
assets" of the Company or the Bank within the meaning of section 280G of the
Code. If this section 12 applies, then, if for any taxable year, the Executive
shall be liable for the payment
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of an excise tax under section 4999 of the Code with respect to any payment in
the nature of compensation made by the Company or any direct or indirect
subsidiary or affiliate of the Company to (or for the benefit of) the Executive,
the Company shall pay to the Executive an amount equal to X determined under the
following formula:
E x P
X=
----------------------------------------------
1 - [FI x (1-SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under
section 4999 of the Code;
P = the amount with respect to which such excise tax is
assessed, determined without regard to this section
12;
FI = the highest marginal rate of income tax applicable
to the Executive under the Code for the taxable year
in question;
SLI = the sum of the highest marginal rates of income tax
applicable to the Executive under all applicable
state and local laws for the taxable year in
question; and
M = the highest marginal rate of Medicare tax
applicable to the Executive under the Code for the
taxable year in question.
The Company will guarantee the payment of the tax indemnification provided
pursuant to section 12(a) of the Executive's employment agreement with the Bank.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) the Executive under the terms of this Agreement, the
Executive's employment agreement with the Bank, or otherwise, and on which an
excise tax under section 4999 of the Code will be assessed, the payment
determined under this section 12(a) shall be made to the Executive on the
earlier of (i) the date the Company, the Bank or any direct or indirect
subsidiary or affiliate of the Company or the Bank is required to withhold such
tax, or (ii) the date the tax is required to be paid by the Executive.
(b) Notwithstanding anything in this section 12 to the
contrary, in the event that the Executive's liability for the excise tax under
section 4999 of the Code for a taxable year is subsequently determined to be
different than the amount determined by the formula (X + P) x E, where X, P and
E have the meanings provided in section 12(a), the Executive or the Company, as
the case may be, shall pay to the other party at the time that the amount of
such excise tax is finally determined, an appropriate amount, plus interest,
such that the payment made under section 12(a), when increased by the amount of
the payment made to the Executive under this section 12(b) by the Company, or
when reduced by the amount of the payment made to the Company under this section
12(b) by the Executive, equals the amount that should have properly been paid to
the Executive
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under section 12(a). The interest paid under this section 12(b) shall be
determined at the rate provided under section 1274(b)(2)(B) of the Code. To
confirm that the proper amount, if any, was paid to the Executive under this
section 12, the Executive shall furnish to the Company a copy of each tax return
which reflects a liability for an excise tax payment made by the Company, at
least 20 days before the date on which such return is required to be filed with
the Internal Revenue Service.
SECTION 13. COVENANT NOT TO COMPETE.
The Executive hereby covenants and agrees that, in the event of his
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one year following the date of his
termination of employment with the Company (or, if less, for the Remaining
Unexpired Employment Period), he shall not, without the written consent of the
Company, become an officer, employee, consultant, director or trustee of any
savings bank, savings and loan association, savings and loan holding company,
bank or bank holding company, or any direct or indirect subsidiary or affiliate
of any such entity, that entails working within any county in which the Company
maintains an office; provided, however, that this section 13 shall not apply if
the Executive's employment is terminated for the reasons set forth in section
9(a).
SECTION 14. CONFIDENTIALITY.
Unless he obtains the prior written consent of the Company, the
Executive shall keep confidential and shall refrain from using for the benefit
of himself, or any person or entity other than the Company or any entity which
is a subsidiary of the Company or of which the Company is a subsidiary, any
material document or information obtained from the Company, or from its parent
or subsidiaries, in the course of his employment with any of them concerning
their properties, operations or business (unless such document or information is
readily ascertainable from public or published information or trade sources or
has otherwise been made available to the public through no fault of his own)
until the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this section 14 shall prevent the Executive,
with or without the Company's consent, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding to the extent that such participation or
disclosure is required under applicable law.
SECTION 15. SOLICITATION.
The Executive hereby covenants and agrees that, for a period of one
year following his termination of employment with the Company, he shall not,
without the written consent of the Company, either directly or indirectly:
(a) solicit, offer employment to, or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any officer or employee of the Company or any of
its subsidiaries or affiliates to terminate his employment and accept employment
or become affiliated with, or provide services for compensation in any capacity
whatsoever to, any savings bank, savings and loan association,
12
bank, bank holding company, savings and loan holding company, or other
institution engaged in the business of accepting deposits, making loans or doing
business within the counties specified in section 13;
(b) provide any information, advice or recommendation with
respect to any such officer or employee of any savings bank, savings and loan
association, bank, bank holding company, savings and loan holding company, or
other institution engaged in the business of accepting deposits, making loans or
doing business within the counties specified in section 13, that is intended, or
that a reasonable person acting in like circumstances would expect, to have the
effect of causing any officer or employee of the Company or any of its
subsidiaries or affiliates to terminate his employment and accept employment or
become affiliated with, or provide services for compensation in any capacity
whatsoever to, any savings bank, savings and loan association, bank, bank
holding company, savings and loan holding company, or other institution engaged
in the business of accepting deposits, making loans or doing business within the
counties specified in section 13;
(c) solicit, provide any information, advice or recommendation
or take any other action intended, or that a reasonable person acting in like
circumstances would expect, to have the effect of causing any customer of the
Company to terminate an existing business or commercial relationship with the
Company.
SECTION 16. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR PROGRAMS.
The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Company or by the Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Company's qualified or non-qualified retirement, pension, savings, thrift,
profit-sharing or stock bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans or such other employee benefit plans or programs, or
compensation plans or programs, as may be maintained by, or cover employees of,
the Company from time to time; provided, however, that nothing in this Agreement
shall be deemed to duplicate any compensation or benefits provided under any
agreement, plan or program covering the Executive to which the Company is a
party and any duplicative amount payable under any such agreement, plan or
program shall be applied as an offset to reduce the amounts otherwise payable
hereunder.
SECTION 17. SUCCESSORS AND ASSIGNS.
This Agreement will inure to the benefit of and be binding upon the
Executive, his legal representatives and testate or intestate distributees, and
the Company and its successors and assigns, including any successor by merger or
consolidation or a statutory receiver or any other person or firm or corporation
to which all or substantially all of the assets and business of the Company may
be sold or otherwise transferred. Failure of the Company to obtain from any
successor its express written assumption of the Company's obligations hereunder
at least 60 days in advance of the scheduled effective date of any such
succession shall be deemed a material breach of this Agreement.
13
SECTION 18. NOTICES.
Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
If to the Executive:
Xxxxxxx X. Xxx
At the address last appearing
on the personnel records of
the Executive
If to the Company:
Cohoes Bancorp, Inc.
00 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: President
with a copy to:
Silver, Xxxxxxxx & Xxxx, L.L.P.
0000 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, P.C.
SECTION 19. INDEMNIFICATION FOR ATTORNEYS' FEES.
(a) The Company shall indemnify, hold harmless and defend the
Executive against reasonable costs, including legal fees and expenses, incurred
by him in connection with or arising out of any action, suit or proceeding in
which he may be involved, as a result of his efforts, in good faith, to defend
or enforce the terms of this Agreement. For purposes of this Agreement, any
settlement agreement which provides for payment of any amounts in settlement of
the Company's obligations hereunder shall be conclusive evidence of the
Executive's entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
(b) The Company's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the
14
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment.
Unless it is determined that a claim made by the Executive was either frivolous
or made in bad faith, the Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur as a result of or in connection with his consultation with legal counsel
or arising out of any action, suit, proceeding or contest (regardless of the
outcome thereof) by the Company, the Executive or others regarding the validity
or enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in section 7872(f)(2)(A) of the Code. This section 19(b) shall
apply whether such consultation, action, suit, proceeding or contest arises
before, on, after or as a result of a Change in Control.
SECTION 20. SEVERABILITY.
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
SECTION 21. WAIVER.
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
SECTION 23. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the State of New
York applicable to contracts entered into and to be performed entirely within
the State of New York.
15
SECTION 24. HEADINGS AND CONSTRUCTION.
The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.
SECTION 25. ENTIRE AGREEMENT; MODIFICATIONS.
This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.
SECTION 26. NON-DUPLICATION.
In the event that the Executive shall perform services for the Bank or
any other direct or indirect subsidiary or affiliate of the Company, it is
intended that any compensation or benefits provided to the Executive by such
other employer shall not duplicate the compensation or benefits provided under
this Agreement. The compensation and benefits payable under this Agreement shall
be reduced to the extent necessary to effectuate this intention.
SECTION 27. REQUIRED REGULATORY PROVISIONS.
Notwithstanding anything herein contained to the contrary, any payments
to the Executive by the Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any
regulations promulgated thereunder.
16
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and the Executive has hereunto set his hand, all as of the day and year
first above written.
----------------------------------------
EXECUTIVE
ATTEST: COHOES BANCORP, INC.
By_____________________________ By____________________________________
___________________________ Name:
___________________________ Its:
[Seal]
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF __________ )
On this ________ day of ____________________, 1998, before me
personally came ______________________, to me known, and known to me to be the
individual described in the foregoing instrument, who, being by me duly sworn,
did depose and say that he resides at the address set forth in said instrument,
and that he signed his name to the foregoing instrument.
-----------------------------------
Notary Public
My commission expires:
--------------------------
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF __________ )
On this ________ day of ____________________, 1998, before me
personally came _______________________, to me known, who, being by me duly
sworn, did depose and say that he is the _______________ of _____________ the
Delaware corporation described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such seal; that it was so affixed by order of the Board of
Directors of said corporation; and that he or she signed his name thereto by
like order.
-----------------------------------
Notary Public
My commission expires:
--------------------------
19
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
_____ ___, 1998 by and between Cohoes Bancorp, Inc., a business corporation
organized and existing under the laws of the State of Delaware (the "Company"),
and Xxxxx X. Xxxxxxxx (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive currently serves as the President and Chief
Executive Officer of the Company and as the President and Chief Executive
Officer of Cohoes Savings Bank (the "Bank"), and effective as of the date of
this Agreement, the Bank has converted from mutual to capital stock form and has
become the wholly owned subsidiary of the Company; and
WHEREAS, the Company desires to assure for itself the continued
availability of the Executive's services as provided in this Agreement, and the
Board of Directors of the Company (the "Board") recognizes the need for the
Executive to be able to perform such services with a minimum of personal
distraction in the event of a pending or threatened Change in Control (as
hereinafter defined); and
WHEREAS, the Executive is willing to continue to serve the Company on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, the Company and the Executive
hereby agree as follows:
SECTION 1. EMPLOYMENT.
The Company agrees to continue to employ the Executive, and the
Executive hereby agrees to such continued employment, during the period and upon
the terms and conditions set forth in this Agreement.
SECTION 2. EMPLOYMENT PERIOD; REMAINING UNEXPIRED EMPLOYMENT PERIOD.
(a) The terms and conditions of this Agreement shall be and
remain in effect during the period of employment established under this section
2 ("Employment Period"). The Employment Period shall be for an initial term of
three years beginning on the date of this Agreement and ending on the third
anniversary date of this Agreement (each, an "Anniversary Date"), plus such
extensions, if any, as are provided pursuant to section 2(b).
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the Employment Period shall automatically be extended for one
additional day each day, unless either the Company or the Executive elects not
to extend the Agreement further by giving written notice
1
thereof to the other party, in which case the Employment Period shall end on the
third anniversary of the date on which such written notice is given. For all
purposes of this Agreement, the term "Remaining Unexpired Employment Period" as
of any date shall mean the period beginning on such date and ending on the last
day of the Employment Period taking into account any extensions under this
section 2(b). Upon termination of the Executive's employment with the Company
for any reason whatsoever, any daily extensions provided pursuant to this
section 2(b), if not theretofore discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Company at any time from terminating the Executive's employment during the
Employment Period with or without notice for any reason; provided, however, that
the relative rights and obligations of the Company and the Executive in the
event of any such termination shall be determined under this Agreement.
SECTION 3. DUTIES.
The Executive shall serve as the President and Chief Executive Officer
of the Company, having such power, authority and responsibility and performing
such duties as are prescribed by or under the By-Laws of the Company and as are
customarily associated with such position. The Executive shall devote his full
business time and attention (other than during weekends, holidays, approved
vacation periods, and periods of illness or approved leaves of absence) to the
business and affairs of the Company and shall use his best efforts to advance
the interests of the Company.
SECTION 4. CASH COMPENSATION.
In consideration for the services to be rendered by the Executive
hereunder, the Company shall pay to him a salary equal to the base salary from
the Company and the Bank in effect on the date of this Agreement, less the
amount of base salary actually paid to the Executive by the Bank during the
Employment Period. The Executive's salary shall be payable in approximately
equal installments in accordance with the Company's customary payroll practices
for senior officers. The Board shall review the Executive's annual rate of
salary at such times during the Employment Period as it deems appropriate, but
not less frequently than once every twelve months, and may, in its discretion,
approve an increase therein. In addition to salary, the Executive may receive
other cash compensation from the Company for services hereunder at such times,
in such amounts and on such terms and conditions as the Board may determine from
time to time.
2
SECTION 5. EMPLOYEE BENEFIT PLANS AND PROGRAMS.
During the Employment Period, the Executive shall be treated as an
employee of the Company and shall be entitled to participate in and receive
benefits under any and all qualified or non-qualified retirement, pension,
savings, profit-sharing or stock bonus plans, any and all group life, health
(including hospitalization, medical and major medical), dental, accident and
long term disability insurance plans, and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Company, in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and consistent
with the Company's customary practices.
SECTION 6. INDEMNIFICATION AND INSURANCE.
(a) During the Employment Period and for a period of six years
thereafter, the Company shall cause the Executive to be covered by and named as
an insured under any policy or contract of insurance obtained by it to insure
its directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of the Company or service in
other capacities at the request of the Company. The coverage provided to the
Executive pursuant to this section 6 shall be of the same scope and on the same
terms and conditions as the coverage (if any) provided to other officers or
directors of the Company.
(b) To the maximum extent permitted under applicable law,
during the Employment Period and for a period of six years thereafter, the
Company shall indemnify the Executive against and hold him harmless from any
costs, liabilities, losses and exposures to the fullest extent and on the most
favorable terms and conditions that similar indemnification is offered to any
director or officer of the Company or any subsidiary or affiliate thereof.
SECTION 7. OUTSIDE ACTIVITIES.
The Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld); provided, however, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; provided, however, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Company and generally applicable to
all similarly situated Executives. The Executive may also serve as an officer or
director of the Bank on such terms and conditions as the Company and the Bank
may mutually agree upon, and such service shall not be deemed to materially
interfere with the Executive's performance of his duties hereunder or otherwise
result in a material breach of this Agreement. If the Executive is discharged or
suspended, or is subject to any regulatory prohibition or restriction with
respect to participation in the affairs of the Bank, he shall continue to
perform services for the Company in accordance with this Agreement but shall not
directly or indirectly provide services to
3
or participate in the affairs of the Bank in a manner inconsistent with the
terms of such discharge or suspension or any applicable regulatory order.
SECTION 8. WORKING FACILITIES AND EXPENSES.
The Executive's principal place of employment shall be at the Company's
executive offices located in Cohoes, New York, or at such other location within
50 miles of the address at which the Company shall maintain its principal
executive offices, or at such other location as the Company and the Executive
may mutually agree upon. The Company shall provide the Executive at his
principal place of employment with a private office, secretarial services and
other support services and facilities suitable to his position with the Company
and necessary or appropriate in connection with the performance of his assigned
duties under this Agreement. The Company shall reimburse the Executive for his
ordinary and necessary business expenses, including, without limitation, the
Executive's travel and entertainment expenses incurred in connection with the
performance of his duties under this Agreement, in each case upon presentation
to the Company of an itemized account of such expenses in such form as the
Company may reasonably require.
SECTION 9. TERMINATION OF EMPLOYMENT WITH BENEFITS.
(a) The Executive shall be entitled to the benefits described
in section 9(b) in the event that:
(i) his employment with the Company terminates during
the Employment Period as a result of the Executive's voluntary
resignation within 90 days following:
(A) the failure of the Board to appoint or
re-appoint or elect or re-elect the Executive to the
position with the Company stated in section 3 of this
Agreement (or a more senior office);
(B) if the Executive is a member of the
Board, the failure of the shareholders of the Company
to elect or re-elect the Executive to the Board or
the failure of the Board (or the nominating committee
thereof) to nominate the Executive for such election
or re-election;
(C) the expiration of a 30-day period
following the date on which the Executive gives
written notice to the Company of its material
failure, whether by amendment of the Company's
Certificate of Incorporation, the Company's By-Laws,
action of the Board or the Company's shareholders or
otherwise, to vest in the Executive the functions,
duties, or responsibilities prescribed in section 3
of this Agreement, unless, during such 30-day period,
the Company cures such failure;
(D) the expiration of a 30-day period
following the date on which the Executive gives
written notice to the Company of its material breach
of any term, condition or covenant contained in this
Agreement (including, without limitation, any
reduction of the Executive's rate of base salary in
effect from time to time and any change in the terms
and
4
conditions of any compensation or benefit program in
which the Executive participates which, either
individually or together with other changes, has a
material adverse effect on the aggregate value of his
total compensation package), unless, during such
30-day period, the Company cures such failure; or
(E) a change in the Executive's principal
place of employment for a distance in excess of 50
miles from the Company's principal office in Cohoes,
New York; or
(F) the liquidation, dissolution,
bankruptcy, or insolvency of the Company, the Bank or
any of their respective subsidiaries or affiliates;
or
(ii) the Executive's employment with the Company is
terminated by the Company during the Employment Period for any
reason other than for "cause," as provided in section 10(a).
(b) Upon the occurrence of any of the events described in
section 9(a) of this Agreement, the Company shall pay and provide to the
Executive (or, in the event of his death, to his estate):
(i) his earned but unpaid salary (including, without
limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for in
this section 9(b)) as of the date of the termination of his
employment with the Company, such payment to be made at the
time and in the manner prescribed by law applicable to the
payment of wages but in no event later than 30 days after
termination of employment;
(ii) the benefits, if any, to which he is entitled as
a former employee under the employee benefit plans and
programs and compensation plans and programs maintained for
the benefit of the Company's officers and employees;
(iii) continued group life, health (including
hospitalization, medical and major medical), dental, accident
and long term disability insurance benefits, in addition to
that provided pursuant to section 9(b)(ii), and after taking
into account the coverage provided by any subsequent employer,
if and to the extent necessary to provide for the Executive,
for the Remaining Unexpired Employment Period, coverage
equivalent to the coverage to which he would have been
entitled under such plans (as in effect on the date of his
termination of employment, or, if his termination of
employment occurs after a Change of Control, on the date of
such Change of Control, whichever benefits are greater), if he
had continued working for the Company during the Remaining
Unexpired Employment Period at the highest annual rate of
salary achieved during the Employment Period;
(iv) within 30 days following the Executive's
termination of employment with the Company, a lump sum
payment, in an amount equal to the present value of the salary
(excluding any additional payments made to the Executive in
lieu of the use of an automobile) that the Executive would
have earned if he had continued working for the
5
Company during the Remaining Unexpired Employment Period at
the highest annual rate of salary achieved during the
Employment Period, where such present value is to be
determined using a discount rate equal to the applicable
short-term federal rate prescribed under section 1274(d) of
the Internal Revenue Code of 1986, as amended (the "Code"),
compounded using the compounding periods corresponding to the
Company's regular payroll periods for its officers, such lump
sum to be paid in lieu of all other payments of salary
provided for under this Agreement in respect of the period
following any such termination;
(v) within 30 days following the Executive's
termination of employment with the Company, a lump sum payment
in an amount equal to the present value of the additional
employer contributions to which he would have been entitled
under the Cohoes Savings Bank 401(k) Savings and
Profit-Sharing Plan, the Cohoes Bancorp, Inc. Employee Stock
Ownership Plan (together with the defined contribution portion
of the Benefit Restoration Plan of Cohoes Bancorp, Inc., or
any other supplemental defined contribution plan) and any and
all other qualified and non-qualified defined contribution
plans maintained by, or covering employees of, the Company as
if he were 100% vested thereunder and had continued working
for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of salary achieved during
the Employment Period and making the maximum amount of
employee contributions, if any, required or permitted under
such plan or plans, such present value to be determined on the
basis of a discount rate, compounded using the compounding
period that corresponds to the frequency with which employer
contributions are made to the relevant plan, equal to the
Applicable PBGC Rate;
(vi) within 30 days following the Executive's
termination of employment with the Company, a lump sum payment
in an amount equal to the payments that would have been made
(without discounting for early payment) to the Executive under
any cash bonus or long-term or short-term cash incentive
compensation plan maintained by, or covering employees of, the
Company if he had continued working for the Company during the
Remaining Unexpired Employment Period and had earned the
maximum bonus or incentive award in each calendar year that
ends during the Remaining Unexpired Employment Period, such
payments to be equal to the product of:
(A) the maximum percentage rate at which an
award was ever available to the Executive under such
incentive compensation plan; multiplied by
(B) the salary that would have been paid to
the Executive during each such calendar year at the
highest annual rate of salary achieved during the
Employment Period.
(vii) at the election of the Company made within 30
days following the occurrence of the event described in
section 9(a), upon the surrender of options or appreciation
rights issued to the Executive under any stock option and
appreciation rights plan or program maintained by, or covering
employees of, the Company, a lump sum payment in an amount
equal to the product of:
6
(A) the excess of (I) the fair market value
of a share of stock of the same class as the stock
subject to the option or appreciation right,
determined as of the date of termination of
employment, over (II) the exercise price per share
for such option or appreciation right, as specified
in or under the relevant plan or program; multiplied
by
(B) the number of shares with respect to
which options or appreciation rights are being
surrendered.
For purposes of this section 9(b)(vii), the Executive shall be
deemed fully vested in all options and appreciation rights
under any stock option or appreciation rights plan or program
maintained by, or covering employees of, the Company, even if
he is not vested under the terms of such plan or program; and
(viii) at the election of the Company made within 30
days following the occurrence of the event described in
section 9(a), upon the surrender of any shares awarded to the
Executive under any restricted stock plan maintained by, or
covering employees of, the Company, a lump sum payment in an
amount equal to the product of:
(A) the fair market value of a share of
stock of the same class of stock granted under such
plan, determined as of the date of the Executive's
termination of employment; multiplied by
(B) the number of shares which are being
surrendered.
For purposes of this section 9(b)(viii), the Executive shall
be deemed fully vested in all shares awarded under any
restricted stock plan maintained by, or covering employees of,
the Company, even if he is not vested under the terms of such
plan.
The Company and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Executive's efforts, if any, to
mitigate damages. The Company and the Executive further agree that the Company
may condition the payments and benefits (if any) due under sections 9(b)(iii),
(iv), (v) and (vi) on the receipt of the Executive's resignation from any and
all positions which he holds as an officer, director or committee member with
respect to the Company or any of its subsidiaries or affiliates.
SECTION 10. TERMINATION WITHOUT ADDITIONAL COMPANY LIABILITY.
In the event that the Executive's employment with the Company shall
terminate during the Employment Period on account of:
7
(a) the discharge of the Executive for "cause," which, for
purposes of this Agreement, shall mean a discharge because the Board determines
that the Executive: (i) has intentionally failed to perform his assigned duties
under this Agreement (including, for these purposes, the Executive's inability
to perform such duties as a result of drug or alcohol dependency); (ii) has
intentionally engaged in dishonest or illegal conduct in connection with his
performance of services for the Company or has been convicted of a felony; (iii)
has willfully violated, in any material respect, any law, rule, regulation,
written agreement or final cease-and-desist order with respect to his
performance of services for the Company, as determined by the Board; or (iv) has
intentionally breached the material terms of this Agreement;
(b) the Executive's voluntary resignation from employment with
the Company for reasons other than those specified in section 9(a)(i); or
(c) the death of the Executive while employed by the Company,
or the termination of the Executive's employment because of "total and permanent
disability" within the meaning of the Company's or the Bank's long-term
disability plan for employees; then the Company shall have no further
obligations under this Agreement, other than the payment to the Executive of his
earned but unpaid salary as of the date of the termination of his employment and
the provision of such other benefits, if any, to which he is entitled as a
former employee under the Company's employee benefit plans and programs and
compensation plans and programs.
For purposes of this section 10, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the written advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. Prior to the
date on which a Change in Control occurs, the cessation of employment of the
Executive shall not be deemed to be for "cause" within the meaning of section
10(a) unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of three-fourths of the
members of the Board at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is given
an opportunity, together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in section 10(a) above, and specifying the particulars thereof
in detail. On and after the date that a Change in Control occurs, a
determination under this section 10 shall require the affirmative vote of at
least three-fourths of the members of the Board acting in good faith, and such
vote shall not be made prior to the expiration of a 60-day period following the
date on which the Board shall, by written notice to the Executive, furnish to
him a statement of its grounds for proposing to make such determination, during
which period the Executive shall be afforded a reasonable opportunity to make
oral and written presentations to the members of the Board, and to be
represented by his legal counsel at such presentations to refute the grounds for
the proposed determination;
8
SECTION 11. TERMINATION UPON OR FOLLOWING A CHANGE IN CONTROL.
(a) A Change in Control of the Company ("Change in Control")
shall be deemed to have occurred upon the happening of any of the following
events:
(i) approval by the shareholders of the Company of a
transaction that would result and does result in the
reorganization, merger or consolidation of the Company,
respectively, with one or more other persons, other than a
transaction following which:
(A) at least 51% of the equity ownership
interests of the entity resulting from such
transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended
("Exchange Act")) in substantially the same relative
proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the outstanding equity ownership
interests in the Company; and
(B) at least 51% of the securities entitled
to vote generally in the election of directors of the
entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially
the same relative proportions by persons who,
immediately prior to such transaction, beneficially
owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) at least 51% of the
securities entitled to vote generally in the election
of directors of the Company;
(ii) the acquisition of all or substantially all of
the assets of the Company or beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
25% or more of the outstanding securities of the Company
entitled to vote generally in the election of directors by any
person or by any persons acting in concert, or approval by the
shareholders of the Company of any transaction which would
result in such an acquisition;
(iii) a complete liquidation or dissolution of the
Company, or approval by the shareholders of the Company of a
plan for such liquidation or dissolution;
(iv) the occurrence of any event if, immediately
following such event, at least 50% of the members of the Board
do not belong to any of the following groups:
(A) individuals who were members of the
Board on the date of this Agreement; or
(B) individuals who first became members of
the Board after the date of this Agreement either:
(1) upon election to serve as a
member of the Board by affirmative vote of
three-quarters of the members of such board,
or of a nominating committee thereof, in
office at the time of such first election;
or
9
(2) upon election by the
shareholders of the Board to serve as a
member of the Board, but only if nominated
for election by affirmative vote of
three-quarters of the members of the board
of directors of the Board, or of a
nominating committee thereof, in office at
the time of such first nomination;
provided, however, that such individual's election or
nomination did not result from an actual or threatened
election contest (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents
(within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf
of the Board of the Company; or
(v) any event which would be described in section
11(a)(i), (ii), (iii) or (iv) if the term "Bank" were
substituted for the term "Company" therein and the term "Bank
Board" were substituted for the term "Board" therein.
In no event, however, shall a Change in Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this section 11(a), the term "person" shall have the meaning
assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
(b) In the event that the Executive's employment with the
Company terminates within eighteen months following a Change in Control for any
reason other than for "cause," as described in section 10, the Company shall pay
to the Executive, in addition to the amounts payable pursuant to section 9, a
severance benefit in a lump sum payment, within 25 days after the later of the
effective time of such Change in Control or his termination of employment, equal
to the greater of (i) the sum of the amounts payable as salary pursuant to
section 4 hereof during the Remaining Unexpired Employment Period and as
additional cash compensation pursuant to the terms of section 9(b)(vi) hereof,
or (ii) three times the annual average of the amount paid or payable to the
Executive under section 4 of this Agreement or the corresponding section of any
prior employment agreement with the Company or its predecessor during the five
preceding taxable years of the Executive (or during the entire period of the
Executive's employment with the Company or its predecessor if such period is
less than five years). The Company shall also continue to provide to the
Executive and to his eligible dependents the benefits described in section
9(b)(iii) hereof for a period of at least 36 months following the later of the
effective time of such Change in Control or his termination of employment. In
addition, the Company will guarantee the payment of the severance benefit
provided pursuant to section 11(b) of the Executive's employment agreement with
the Bank.
SECTION 12. TAX INDEMNIFICATION.
(a) This section 12 shall apply if the Executive's employment
is terminated upon or following (i) a Change in Control (as defined in section
11 of this Agreement); or (ii) a change "in the ownership or effective control"
of the Company or the Bank or "in the ownership of a substantial portion of the
assets" of the Company or the Bank within the meaning of section 280G of the
Code. If this section 12 applies, then, if for any taxable year, the Executive
shall be liable for the payment
10
of an excise tax under section 4999 of the Code with respect to any payment in
the nature of compensation made by the Company or any direct or indirect
subsidiary or affiliate of the Company to (or for the benefit of) the Executive,
the Company shall pay to the Executive an amount equal to X determined under the
following formula:
E x P
X=
----------------------------------------------
1 - [FI x (1-SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under
section 4999 of the Code;
P = the amount with respect to which such excise tax is
assessed, determined without regard to this section
12;
FI = the highest marginal rate of income tax applicable
to the Executive under the Code for the taxable year
in question;
SLI = the sum of the highest marginal rates of income tax
applicable to the Executive under all applicable
state and local laws for the taxable year in
question; and
M = the highest marginal rate of Medicare tax
applicable to the Executive under the Code for the
taxable year in question.
The Company will guarantee the payment of the tax indemnification provided
pursuant to section 12(a) of the Executive's employment agreement with the Bank.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) the Executive under the terms of this Agreement, the
Executive's employment agreement with the Bank, or otherwise, and on which an
excise tax under section 4999 of the Code will be assessed, the payment
determined under this section 12(a) shall be made to the Executive on the
earlier of (i) the date the Company, the Bank or any direct or indirect
subsidiary or affiliate of the Company or the Bank is required to withhold such
tax, or (ii) the date the tax is required to be paid by the Executive.
(b) Notwithstanding anything in this section 12 to the
contrary, in the event that the Executive's liability for the excise tax under
section 4999 of the Code for a taxable year is subsequently determined to be
different than the amount determined by the formula (X + P) x E, where X, P and
E have the meanings provided in section 12(a), the Executive or the Company, as
the case may be, shall pay to the other party at the time that the amount of
such excise tax is finally determined, an appropriate amount, plus interest,
such that the payment made under section 12(a), when increased by the amount of
the payment made to the Executive under this section 12(b) by the Company, or
when reduced by the amount of the payment made to the Company under this section
12(b) by the Executive, equals the amount that should have properly been paid to
the Executive
11
under section 12(a). The interest paid under this section 12(b) shall be
determined at the rate provided under section 1274(b)(2)(B) of the Code. To
confirm that the proper amount, if any, was paid to the Executive under this
section 12, the Executive shall furnish to the Company a copy of each tax return
which reflects a liability for an excise tax payment made by the Company, at
least 20 days before the date on which such return is required to be filed with
the Internal Revenue Service.
SECTION 13. COVENANT NOT TO COMPETE.
The Executive hereby covenants and agrees that, in the event of his
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one year following the date of his
termination of employment with the Company (or, if less, for the Remaining
Unexpired Employment Period), he shall not, without the written consent of the
Company, become an officer, employee, consultant, director or trustee of any
savings bank, savings and loan association, savings and loan holding company,
bank or bank holding company, or any direct or indirect subsidiary or affiliate
of any such entity, that entails working within any county in which the Company
maintains an office; provided, however, that this section 13 shall not apply if
the Executive's employment is terminated for the reasons set forth in section
9(a).
SECTION 14. CONFIDENTIALITY.
Unless he obtains the prior written consent of the Company, the
Executive shall keep confidential and shall refrain from using for the benefit
of himself, or any person or entity other than the Company or any entity which
is a subsidiary of the Company or of which the Company is a subsidiary, any
material document or information obtained from the Company, or from its parent
or subsidiaries, in the course of his employment with any of them concerning
their properties, operations or business (unless such document or information is
readily ascertainable from public or published information or trade sources or
has otherwise been made available to the public through no fault of his own)
until the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this section 14 shall prevent the Executive,
with or without the Company's consent, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding to the extent that such participation or
disclosure is required under applicable law.
SECTION 15. SOLICITATION.
The Executive hereby covenants and agrees that, for a period of one
year following his termination of employment with the Company, he shall not,
without the written consent of the Company, either directly or indirectly:
(a) solicit, offer employment to, or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any officer or employee of the Company or any of
its subsidiaries or affiliates to terminate his employment and accept employment
or become affiliated with, or provide services for compensation in any capacity
whatsoever to, any savings bank, savings and loan association,
12
bank, bank holding company, savings and loan holding company, or other
institution engaged in the business of accepting deposits, making loans or doing
business within the counties specified in section 13;
(b) provide any information, advice or recommendation with
respect to any such officer or employee of any savings bank, savings and loan
association, bank, bank holding company, savings and loan holding company, or
other institution engaged in the business of accepting deposits, making loans or
doing business within the counties specified in section 13, that is intended, or
that a reasonable person acting in like circumstances would expect, to have the
effect of causing any officer or employee of the Company or any of its
subsidiaries or affiliates to terminate his employment and accept employment or
become affiliated with, or provide services for compensation in any capacity
whatsoever to, any savings bank, savings and loan association, bank, bank
holding company, savings and loan holding company, or other institution engaged
in the business of accepting deposits, making loans or doing business within the
counties specified in section 13;
(c) solicit, provide any information, advice or recommendation
or take any other action intended, or that a reasonable person acting in like
circumstances would expect, to have the effect of causing any customer of the
Company to terminate an existing business or commercial relationship with the
Company.
SECTION 16. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR PROGRAMS.
The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Company or by the Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Company's qualified or non-qualified retirement, pension, savings, thrift,
profit-sharing or stock bonus plans, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans or such other employee benefit plans or programs, or
compensation plans or programs, as may be maintained by, or cover employees of,
the Company from time to time; provided, however, that nothing in this Agreement
shall be deemed to duplicate any compensation or benefits provided under any
agreement, plan or program covering the Executive to which the Company is a
party and any duplicative amount payable under any such agreement, plan or
program shall be applied as an offset to reduce the amounts otherwise payable
hereunder.
SECTION 17. SUCCESSORS AND ASSIGNS.
This Agreement will inure to the benefit of and be binding upon the
Executive, his legal representatives and testate or intestate distributees, and
the Company and its successors and assigns, including any successor by merger or
consolidation or a statutory receiver or any other person or firm or corporation
to which all or substantially all of the assets and business of the Company may
be sold or otherwise transferred. Failure of the Company to obtain from any
successor its express written assumption of the Company's obligations hereunder
at least 60 days in advance of the scheduled effective date of any such
succession shall be deemed a material breach of this Agreement.
13
SECTION 18. NOTICES.
Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
If to the Executive:
Xxxxx X. Xxxxxxxx
At the address last appearing
on the personnel records of
the Executive
If to the Company:
Cohoes Bancorp, Inc.
00 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: President
with a copy to:
Silver, Xxxxxxxx & Xxxx, L.L.P.
0000 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, P.C.
SECTION 19. INDEMNIFICATION FOR ATTORNEYS' FEES.
(a) The Company shall indemnify, hold harmless and defend the
Executive against reasonable costs, including legal fees and expenses, incurred
by him in connection with or arising out of any action, suit or proceeding in
which he may be involved, as a result of his efforts, in good faith, to defend
or enforce the terms of this Agreement. For purposes of this Agreement, any
settlement agreement which provides for payment of any amounts in settlement of
the Company's obligations hereunder shall be conclusive evidence of the
Executive's entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
(b) The Company's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the
14
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment.
Unless it is determined that a claim made by the Executive was either frivolous
or made in bad faith, the Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur as a result of or in connection with his consultation with legal counsel
or arising out of any action, suit, proceeding or contest (regardless of the
outcome thereof) by the Company, the Executive or others regarding the validity
or enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in section 7872(f)(2)(A) of the Code. This section 19(b) shall
apply whether such consultation, action, suit, proceeding or contest arises
before, on, after or as a result of a Change in Control.
SECTION 20. SEVERABILITY.
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
SECTION 21. WAIVER.
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
SECTION 23. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the State of New
York applicable to contracts entered into and to be performed entirely within
the State of New York.
15
SECTION 24. HEADINGS AND CONSTRUCTION.
The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.
SECTION 25. ENTIRE AGREEMENT; MODIFICATIONS.
This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.
SECTION 26. NON-DUPLICATION.
In the event that the Executive shall perform services for the Bank or
any other direct or indirect subsidiary or affiliate of the Company, it is
intended that any compensation or benefits provided to the Executive by such
other employer shall not duplicate the compensation or benefits provided under
this Agreement. The compensation and benefits payable under this Agreement shall
be reduced to the extent necessary to effectuate this intention.
SECTION 27. REQUIRED REGULATORY PROVISIONS.
Notwithstanding anything herein contained to the contrary, any payments
to the Executive by the Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with section
18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any
regulations promulgated thereunder.
16
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and the Executive has hereunto set his hand, all as of the day and year
first above written.
----------------------------------------
EXECUTIVE
ATTEST: COHOES BANCORP, INC.
By_____________________________ By____________________________________
___________________________ Name:
___________________________ Its:
[Seal]
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF __________ )
On this ________ day of ____________________, 1998, before me
personally came ______________________, to me known, and known to me to be the
individual described in the foregoing instrument, who, being by me duly sworn,
did depose and say that he resides at the address set forth in said instrument,
and that he signed his name to the foregoing instrument.
-----------------------------------
Notary Public
My commission expires:
--------------------------
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF __________ )
On this ________ day of ____________________, 1998, before me
personally came _______________________, to me known, who, being by me duly
sworn, did depose and say that he is the _______________ of _____________ the
Delaware corporation described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such seal; that it was so affixed by order of the Board of
Directors of said corporation; and that he or she signed his name thereto by
like order.
-----------------------------------
Notary Public
My commission expires:
--------------------------
19
