ABINGTON BANK EMPLOYMENT AGREEMENT
EXHIBIT
10.1
ABINGTON
BANK
This
EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into as of the
8th
day of
August 2007, between Abington Savings Bank, a Pennsylvania chartered, stock-form
savings bank doing business as “Abington Bank” (the “Bank” or the “Employer”),
and Xxxx X. Xxxxxx (the “Executive”).
WITNESSETH
WHEREAS,
the Executive is presently an officer of the Bank;
WHEREAS,
the Bank desires to be ensured of the Executive’s continued participation in the
business of the Bank; and
WHEREAS,
in order to induce the Executive to remain in the employ of the Bank and in
consideration of the Executive agreeing to remain in the employ of the Bank,
the
parties desire to specify the severance benefits which shall be due the
Executive in the event that his employment with the Bank is terminated under
specified circumstances;
NOW
THEREFORE, in consideration of the premises and mutual agreements herein
contained, the Bank and the Executive hereby agree as follows:
1. Definitions.
The
following words and terms shall have the meanings set forth below for the
purposes of this Agreement:
(a) Base
Salary.“Base
Salary” shall have the meaning set forth in Section 3(a) hereof.
(b) Cause.
Termination by the Employer of the Executive’s employment for “Cause” shall mean
termination because of personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order,
willful conduct which is materially detrimental (monetarily or otherwise) to
the
Employer or material breach of any provision of this Agreement.
(c) Change
in Control.“Change
in Control” shall
mean a
change
in the ownership of the Corporation or the Bank, a change in the effective
control of the Corporation or the Bank or a change in the ownership of a
substantial portion of the assets of the Corporation or the Bank, in each case
as provided under Section 409A of the Code and the regulations
thereunder.
(d) Code.“Code”
shall mean the Internal Revenue Code of 1986, as amended.
(e) Corporation.“Corporation”
shall mean Abington Bancorp, Inc., a Pennsylvania corporation, or any successor
thereto.
(f) Date
of Termination.“Date
of
Termination” shall mean (i) if the Executive’s employment is terminated for
Cause, the date on which the Notice of Termination is given, and (ii) if the
Executive’s employment is terminated for any other reason, the date specified in
such Notice of Termination.
(g) Disability. “Disability”
shall mean the Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected
to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Employer.
(h) Good
Reason.
Termination by the Executive of the Executive’s employment for “Good Reason”
shall mean termination by the Executive based on the occurrence of any of the
following events:
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(i)
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any
material breach of this Agreement by the Employer, including without
limitation any of the following: (A) a material diminution in the
Executive’s base compensation, (B) a material diminution in the
Executive’s authority, duties or responsibilities, or (C) a material
diminution in the authority, duties or responsibilities of the officer
to
whom the Executive is required to report, or
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(ii)
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any
material change in the geographic location at which the Executive
must
perform his services under this
Agreement;
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provided,
however, that prior to any termination of employment for Good Reason, the
Executive must first provide written notice to the Employer within ninety (90)
days of the initial existence of the condition, describing the existence of
such
condition, and the Employer shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Employer received the written
notice from the Executive. If the Employer remedies the condition within such
thirty (30) day cure period, then no Good Reason shall be deemed to exist with
respect to such condition. If the Employer does not remedy the condition within
such thirty (30) day cure period, then the Executive may deliver a Notice of
Termination for Good Reason at any time within sixty (60) days following the
expiration of such cure period.
(i) IRS.“IRS”
shall mean the Internal Revenue Service.
(j) Notice
of Termination.
Any
purported termination of the Executive’s employment by the Employer for any
reason, including without limitation for Cause, Disability or Retirement, or
by
the Executive for any reason, including without limitation for Good Reason,
shall be communicated by written “Notice of Termination” to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a
dated notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, (iii) specifies a Date of
Termination, which shall be not less than fifteen (15) nor more than ninety
(90)
days after such Notice of Termination is given, except in the case of the
Employer’s termination of the Executive’s employment for Cause, which shall be
effective immediately; and (iv) is given in the manner specified in Section
10
hereof.
(k) Retirement.“Retirement”
shall mean voluntary termination by the Executive in accordance with the
Employer’s retirement policies, including early retirement, generally applicable
to the Employer’s salaried employees.
2. Term
of Employment.
(a) The
Employer hereby employs the Executive as Vice President and Controller, and
the
Executive hereby accepts said employment and agrees to render such services
to
the Employer on the terms and conditions set forth in this Agreement. Subject
to
the terms hereof, this Agreement shall terminate three (3) years after the
date
first above written. Beginning on the day which is one year subsequent to the
date first above written, and on each annual anniversary thereafter, the term
of
this Agreement shall be extended for a period of one additional year provided
that the Employer has not given notice to the Executive in writing at least
30
days prior to such day that the term of this Agreement shall not be extended
further and/or the Executive has not given notice to the Employer of his
election not to extend the term at least thirty (30) days prior to any such
anniversary date. If any party gives timely notice that the term will not be
extended as of any such annual anniversary date, then this Agreement shall
terminate at the conclusion of its remaining term. References herein to the
term
of this Agreement shall refer both to the initial term and successive
terms.
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(b) During
the term of this Agreement, the Executive shall perform such executive services
for the Employer as is consistent with his title of Vice President and
Controller and from time to time assigned to him by the Employer’s Board of
Directors.
3. Compensation
and Benefits.
(a) The
Employer shall compensate and pay the Executive for his services during the
term
of this Agreement at a minimum base salary of $82,500 per year (“Base Salary”),
which may be increased from time to time in such amounts as may be determined
by
the Board of Directors of the Employer and may not be decreased without the
Executive’s express written consent. In addition to his Base Salary, the
Executive shall be entitled to receive during the term of this Agreement such
bonus payments as may be determined by the Board of Directors of the
Employer.
(b) During
the term of this Agreement, the Executive shall be entitled to participate
in
and receive the benefits of any pension or other retirement benefit plan, profit
sharing, stock option, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Employer, to the extent
commensurate with his then duties and responsibilities, as fixed by the Board
of
Directors of the Employer. The Employer shall not make any changes in such
plans, benefits or privileges which would adversely affect the Executive’s
rights or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Employer and does not result in
a
proportionately greater adverse change in the rights of or benefits to the
Executive as compared with any other executive officer of the Employer. Nothing
paid to the Executive under any plan or arrangement presently in effect or
made
available in the future shall be deemed to be in lieu of the salary payable
to
the Executive pursuant to Section 3(a) hereof.
(c) During
the term of this Agreement, the Executive shall be entitled to paid annual
vacation in accordance with the policies as established from time to time by
the
Board of Directors of the Employer. The Executive shall not be entitled to
receive any additional compensation from the Employer for failure to take a
vacation, nor shall the Executive be able to accumulate unused vacation time
from one year to the next, except to the extent authorized by the Board of
Directors of the Employer.
4. Expenses.
The
Employer shall reimburse the Executive or otherwise provide for or pay for
all
reasonable expenses incurred by the Executive in furtherance of or in connection
with the business of the Employer, including, but not by way of limitation,
automobile and traveling expenses, subject to such reasonable documentation
and
other limitations as may be established by the Board of Directors of the
Employer. If such expenses are paid in the first instance by the Executive,
the
Employer shall reimburse the Executive therefor.
5. Termination.
(a) General.
The
Employer shall have the right, at any time upon prior Notice of Termination,
to
terminate the Executive’s employment hereunder for any reason, including without
limitation termination for Cause, Disability or Retirement, and the Executive
shall have the right, upon prior Notice of Termination, to terminate his
employment hereunder for any reason.
(b) Termination
for Cause or Voluntary Resignation.
In the
event that the (i) the Executive’s employment is terminated by the Employer for
Cause, or (ii) the Executive terminates his employment hereunder other than
for Good Reason, the Executive shall have no right pursuant to this Agreement
to
compensation or other benefits for any period after the applicable Date of
Termination.
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(c) Termination
Due to Disability, Retirement or Death.
In the
event that the Executive’s employment is terminated as a result of Disability,
Retirement or the Executive’s death during the term of this Agreement, the
Executive shall have no right pursuant to this Agreement to compensation or
other benefits for any period after the applicable Date of
Termination.
(d) Involuntary
or Good Reason Termination Prior to a Change in Control.
In the
event that (i) the Executive’s employment is terminated by the Employer for
other than Cause, Disability, Retirement or the Executive’s death or (ii) such
employment is terminated by the Executive for Good Reason, in each case prior
to
a Change in Control, then the Employer shall:
(A) pay
to
the Executive in a lump sum as of the Date of Termination, a cash severance
amount equal to the product of one (1) times the sum of (i) the Executive’s then
current Base Salary, and (ii) the cash bonus paid to the Executive by the
Employer for the calendar year preceding the Date of Termination;
and
(B) maintain
and provide for a period ending at the earlier of (i) twelve (12) months
subsequent to the Date of Termination or (ii) the date of the Executive’s
full-time employment by another employer (provided that the Executive is
entitled under the terms of such employment to benefits substantially similar
to
those described in this subparagraph (B)), with the Executive responsible for
paying the same share of any premiums, co-payments or deductibles as if he
was
still an employee, the Executive’s continued participation in all group
insurance, life insurance, health and accident, and disability insurance
coverage offered by the Employer in which the Executive was participating
immediately prior to the Date of Termination; provided that any insurance
premiums payable by the Employer or any successors pursuant to this Section
5(d)(B) shall be payable at such times and in such amounts as if the Executive
was still an employee of the Employer, subject to any increases in such amounts
imposed by the insurance company or COBRA, and the amount of insurance premiums
required to be paid by the Employer in any taxable year shall not affect the
amount of insurance premiums required to be paid by the Employer in any other
taxable year;
and
provided further that if the Executive’s participation in any group insurance
plan is barred, the Employer shall arrange to provide the Executive with
benefits outstandingly similar to those which the Executive was entitled to
receive under such group insurance plan at no additional cost to the Executive;
and
(C) pay
to
the Executive, in a lump sum as of the Date of Termination, a cash amount equal
to the projected cost to the Employer of providing benefits to the Executive
for
a period of twelve (12) months pursuant to any other employee benefit plans,
programs or arrangements offered by the Employer in which the Executive was
entitled to participate immediately prior to the Date of Termination (other
than
cash bonus plans, retirement plans or stock compensation plans of the Employer
or the Corporation), with the projected cost to the Employer to be based on
the
costs incurred for the calendar year immediately preceding the year in which
the
Date of Termination occurs and with any automobile-related costs to exclude
any
depreciation on Bank-owned automobiles.
(e) Involuntary
or Good Reason Termination Concurrently with or Subsequent to a Change in
Control.
In the
event that
(i)
the Executive’s employment is terminated by the Employer for other than Cause,
Disability, Retirement or the Executive’s death or (ii) such employment is
terminated by the Executive for Good Reason, in each case either concurrently
with or subsequent to a Change in Control,
then the
Employer shall, subject to the provisions of Section 6 hereof, if
applicable,
(A) pay
to
the Executive, in a lump sum as of the Date of Termination, a cash severance
amount equal the product of two (2) times (i) the Executive’s then current Base
Salary, and (ii) the cash bonus paid to the Executive by the Employer for the
calendar year preceding the Date of Termination; and
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(B) maintain
and provide for a period ending at the earlier of (i) twenty-four (24) months
subsequent to the Date of Termination or (ii) the date of the Executive’s
full-time employment by another employer (provided that the Executive is
entitled under the terms of such employment to benefits substantially similar
to
those described in this subparagraph (B)), with
the
Executive responsible for paying the same share of any premiums, co-payments
or
deductibles as if he was still an employee,
the
Executive’s continued participation in all group insurance, life insurance,
health and accident, and disability insurance
coverage offered by the Employer in which the Executive was participating
immediately prior to the Date of Termination; provided that any insurance
premiums payable by the Employer or any successors pursuant to this Section
5(d)(B) shall be payable at such times and in such amounts as if the Executive
was still an employee of the Employer, subject to any increases in such amounts
imposed by the insurance company or COBRA, and the amount of insurance premiums
required to be paid by the Employer in any taxable year shall not affect the
amount of insurance premiums required to be paid by the Employer in any other
taxable year; and
provided further that if the Executive’s participation in any group insurance
plan is barred, the Employer shall arrange to provide the Executive with
benefits outstandingly similar to those which the Executive was entitled to
receive under such group insurance plan at no additional cost to the Executive;
and
(C) pay
to
the Executive, in a lump sum as of the Date of Termination, a cash amount equal
to the projected cost to the Employer of providing benefits to the Executive
for
a period of twenty-four (24) months pursuant to any other employee benefit
plans, programs or arrangements offered by the Employer in which the Executive
was entitled to participate immediately prior to the Date of Termination (other
than cash bonus plans, retirement plans or stock compensation plans of the
Employer or the Corporation), with the projected cost to the Employer to be
based on the costs incurred for the calendar year immediately preceding the
year
in which the Date of Termination occurs and with any automobile-related costs
to
exclude any depreciation on Bank-owned automobiles.
6. Limitation
of Benefits under Certain Circumstances.
If the
payments and benefits pursuant to Section 5 hereof, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Employer, would constitute a “parachute payment” under Section 280G of
the Code, then the payments and benefits payable by the Employer pursuant to
Section 5 hereof shall be reduced by the minimum amount necessary to result
in
no portion of the payments and benefits under Section 5 being non-deductible
to
the Employer pursuant to Section 280G of the Code and subject to the excise
tax
imposed under Section 4999 of the Code. If the payments and benefits under
Section 5 are required to be reduced, the cash severance shall be reduced first,
followed by a reduction in the fringe benefits. The determination of any
reduction in the payments and benefits to be made pursuant to Section 5 shall
be
based upon the opinion of independent tax counsel selected by the Employer
and
paid by the Employer. Such counsel shall promptly prepare the foregoing opinion,
but in no event later than ten (10) days from the Date of Termination, and
may
use such actuaries as such counsel deems necessary or advisable for the purpose.
Nothing contained herein shall result in a reduction of any payments or benefits
to which the Executive may be entitled upon termination of employment under
any
circumstances other than as specified in this Section 6, or a reduction in
the
payments and benefits specified in Section 5 below zero.
7. Mitigation;
Exclusivity of Benefits.
(a) The
Executive shall not be required to mitigate the amount of any benefits hereunder
by seeking other employment or otherwise, nor shall the amount of any such
benefits be reduced by any compensation earned by the Executive as a result
of
employment by another employer after the Date of Termination or otherwise,
except as set forth in Sections 5(d)(B)(ii) and 5(e)(B)(ii) hereof.
(b) The
specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of
employment with the Employer pursuant to employee benefit plans of the Employer
or otherwise.
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8. Withholding.
All
payments required to be made by the Employer hereunder to the Executive shall
be
subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Employer may reasonably determine should be withheld
pursuant to any applicable law or regulation.
9. Assignability.
The
Employer may assign this Agreement and its rights and obligations hereunder
in
whole, but not in part, to any corporation, bank or other entity with or into
which the Employer may hereafter merge or consolidate or to which the Employer
may transfer all or substantially all of its assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employer hereunder as fully as if it
had
been originally made a party hereto, but may not otherwise assign this Agreement
or its rights and obligations hereunder. The Executive may not assign or
transfer this Agreement or any rights or obligations hereunder.
10. Notice.
For the
purposes of this Agreement, notices and all other communications provided for
in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below:
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To
the Employer:
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Board
of Directors
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Abington
Savings Bank
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000
Xxx Xxxx Xxxx
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Xxxxxxxxxx,
Xxxxxxxxxxxx
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To
the Executive:
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Xxxx
X. Xxxxxx
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At
the address last appearing on the
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personnel
records of the Employer
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11. Amendment;
Waiver.
No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer or officers as may be specifically designated by
the
Board of Directors of the Employer to sign on its behalf. No waiver by any
party
hereto at any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. In addition, notwithstanding
anything in this Agreement to the contrary, the Bank may amend in good faith
any
terms of this Agreement, including retroactively, in order to comply with
Section 409A of the Code.
12. Governing
Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the United States where applicable and otherwise
by
the substantive laws of the Commonwealth of Pennsylvania.
13. Validity.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
14. Nature
of Obligations.
Nothing
contained herein shall create or require the Employer to create a trust of
any
kind to fund any benefits which may be payable hereunder, and to the extent
that
the Executive acquires a right to receive benefits from the Employer hereunder,
such right shall be no greater than the right of any unsecured general creditor
of the Employer.
15. Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
16. Changes
in Statutes or Regulations.
If any
statutory or regulation provision referenced herein is subsequently changed
or
re-numbered, or is replaced by a separate provision, then the references in
this
Agreement to such statutory or regulatory provision shall be deemed to be a
reference to such section as amended, re-numbered or replaced.
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17. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
18. Regulatory
Prohibition.
Notwithstanding any other provision of this Agreement to the contrary, any
payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the
FDIA
(12 U.S.C. §1828(k)) and the regulations promulgated thereunder, including 12
C.F.R. Part 359. In the event of the Executive’s termination of employment with
the Bank for Cause, all employment relationships and managerial duties with
the
Bank shall immediately cease regardless of whether the Executive is in the
employ of the Corporation following such termination. Furthermore, following
such termination for Cause, the Executive will not, directly or indirectly,
influence or participate in the affairs or the operations of the
Bank.
19. Payment
of Costs and Legal Fees and Reinstatement of Benefits.
In the
event any dispute or controversy arising under or in connection with the
Executive’s termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the Executive shall be entitled to the
payment of (a) all legal fees incurred by the Executive in resolving such
dispute or controversy, and (b) any back-pay, including Base Salary, bonuses
and
any other cash compensation, fringe benefits and any compensation and benefits
due to the Executive under this Agreement, within thirty (30) days following
the
date such judgment, arbitration or settlement becomes final and
non-appealable.
20. Entire
Agreement.
This
Agreement embodies the entire agreement between the Employer and the Executive
with respect to the matters agreed to herein. All prior agreements between
the
Employer and the Executive with respect to the matters agreed to herein are
hereby superseded and shall have no force or effect.
IN
WITNESS WHEREOF, this Agreement is effective as of the date first above
written.
| Attest | ABINGTON SAVINGS BANK | |||
| /s/ Xxxxxx X. Xxxxxxx | By: | /s/ Xxxxxx X. Xxxxx | ||
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Xxxxxx
X. Xxxxx
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President
and Chief Executive Officer
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| EXECUTIVE | ||||
| By: |
/s/
Xxxx X. Xxxxxx
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Xxxx
X. Xxxxxx
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