Exhibit 10.2
SUPPLEMENTAL EMPLOYMENT AGREEMENT
This SUPPLEMENTAL EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of the 1st day of July, 1999, by and between GSB Financial
Corporation, a corporation organized and operating under the laws of the State
of Delaware and having an office at 0 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000 (the "Company"), and Xxxxxxx X. Xxxxxxxx, (the "Executive Officer")
residing at 000 Xxxxxx Xxxxx, Xxxx Xxxx, Xxx Xxxx 00000.
WHEREAS, pursuant to an Employment Agreement dated as of July 1, 1999 (the
"Employment Agreement") by and between Goshen Savings Bank, a stock savings bank
organized under the federal laws of the United States and a wholly owned
subsidiary of the Company (the "Bank") and the Executive Officer, the Bank
agreed, among other things, to provide the Executive Officer with certain
assurances regarding his or her continued employment in the event of a Change in
Control of the Bank or the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it would be in the best interests of the Company and the Bank to guaranty
the assurances given by the Bank to Executive Officer in order to secure for the
Bank and itself the continued availability of the Executive Officer's services.
NOW, THEREFORE, in consideration of the mutual covenants set forth below,
the parties agree as follows:
Section 1. The Guaranty.
The Company hereby guarantees each and every obligation of the Bank to
Executive Officer pursuant to the Employment Agreement. Such guaranty shall be
effective as, when and if the Bank fails to make any payment due, or perform any
obligation, under the Employment Agreement.
Section 2. Payment in Full.
If the provisions of Section 20(a) of the Employment Agreement reduce any
amount otherwise payable to the Executive Officer, then the Company shall pay to
the Executive Officer the amount of such reduction so that the aggregate amount
payable to the Executive Officer shall be equal to the amount which would be
payable under the Employment Agreement as though Section 20(a) were not included
therein.
Section 3. Excise Tax Indemnification.
(a) This section 3 shall apply if the Executive Officer's employment with
the Bank or the Company is terminated in circumstances giving rise to liability
for excise taxes under section 4999 of the Internal Revenue Code of 1986 (the
"Code"). If for any taxable year, the Executive Officer is liable for the
payment of an excise tax under section 4999 of the Code with respect to any
payment made by the Company or the Bank to the Executive Officer, the Company
shall pay to the Executive Officer the amount necessary so that after the
payment of all excise taxes, and after the payment of all other taxes due on the
amount payable to the Executive Officer under this section, the net amount
remaining in the hands of the Executive Officer shall be the amount the
Executive Officer would have received if no excise tax had been payable. Such
amount shall be equal to X determined under the following formula:
X = E x P
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1-[(FI x (1 - SLI) + SLI + M]
where
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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 3;
FI = the highest marginal rate of income tax applicable to the Executive
Officer under the Code for the taxable year in question;
SLI = the sum of the highest marginal rates of income tax applicable to the
Executive Officer 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
Officer under the Code or the taxable year in question.
Any amount payable under this section shall be paid on the earlier of (i) the
date the Company or the Bank is required to withhold tax on any payment due, or
(ii) the date the tax is required to be paid by the Executive Officer.
(b) Notwithstanding anything in this section 3 to the contrary, in the
event that the Executive Officer'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 3(a), the Executive Officer 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 subsection 3(a), when increased by the amount of the
payment made to the Executive Officer under this subsection by the Company, or
when reduced by the amount of the payment made to the Company under this
subsection by the Executive Officer, equals the amount that should have properly
been paid to the Executive Officer under subsection 3(a). The interest paid
under this section 3(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 Officer under this section 3, the Executive Officer 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.
(c) The provisions of this section 3 are designed to reflect the provisions
of applicable federal, state and local tax laws in effect on the date of this
Agreement. If, after the date hereof, there shall be any change in any such
laws, this section 3 shall be deemed automatically modified to the extent
necessary to assure that the Executive Officer is fully indemnified against the
economic effects of the tax imposed under section 4999 of the Code or any
similar federal, state or local tax.
Section 4. Successors and Assigns.
This Agreement will inure to the benefit of and be binding upon Executive
Officer, his or her legal representatives and testate or intestate distributees,
and the Company 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.
Section 5. 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 (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, or next day
mail via Federal Express or United Parcel Service, 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:
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If to Executive Officer:
Xxxxxxx X. Xxxxxxxx
000 Xxxxxx Xxxxx
Xxxx Xxxx, Xxx Xxxx 00000
If to the Company:
GSB Financial Corporation
Xxx Xxxxx Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Chairman of the Board of Directors
With a copy to:
Xxxxxxx & Xxxxxxxxx, LLP
00 Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Hack, Esq.
Section 6. Enforcement Costs and Attorneys' Fees.
The Company shall pay to or on behalf of the Executive Officer all
reasonable costs, including reasonable legal fees, incurred by him or her in
connection with or arising out of the Executive Officer's consultation with
legal counsel or in connection with or arising out of any action, suit or
proceeding in which the Executive Officer may be involved, as a result of the
Executive Officer's efforts, in good faith, to defend or enforce the terms of
this Agreement, provided that the Executive Officer shall have substantially
prevailed on the merits pursuant to a judgment, decree or order of a court of
competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a
settlement. 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 Officer's entitlement to payments under this section,
and any such payments shall be in addition to amounts payable pursuant to such
settlement agreement, unless such settlement agreement expressly provides
otherwise.
Section 7. Severability.
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforce ability of any other
provision hereof.
Section 8. 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 9. Counterparts.
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This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
Section 10. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, and in the absence of
controlling New York law, the federal laws of the United States, without
reference to conflicts of law principles.
Section 11. 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 12. 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 13. No Effect on Employment at Will Relationship.
The Company and Executive Officer acknowledge and confirm that nothing
contained in this agreement or in the Employment Agreement between Executive
Officer and the Bank shall change the employment relationship between the Bank
and Executive Officer to anything other than employment at will, except for the
express assurances, protections and other provisions contained in the Employment
Agreement and this Agreement, which provisions shall be deemed to supersede the
employment at will relationship.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Executive Officer has hereto set his or her hand, all as of the day and
year first above written.
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Xxxxxxx X. Xxxxxxxx, Executive Officer
GSB FINANCIAL CORPORATION
By
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Xxxxxx X. Xxxxxxx, Chairman
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