EXHIBIT 10.5
EMPLOYMENT AGREEMENT
AGREEMENT effective as of July 1, 1995 between XXXXXX CHARTERED BANCORP, INC., a
New York Corporation with its principal offices at Xxxxx 00, XxXxxxxxxxxxx, Xxx
Xxxx 00000 (the "Employer"), First National Bank of the Xxxxxx Valley, a New
York Corporation with its principal offices at Xxxxx 00, XxXxxxxxxxxxx, Xxx Xxxx
00000 (the "Bank"), and T. Xxxxxxxxx Xxxxxxxxxx III, residing at 00 Xxxx Xxxx
Xxxx, Xxxxxxxx Xxxxxxxx, Xxx Xxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, the Employee has provided invaluable leadership while serving as the
Chief Executive Officer of the Employer and its predecessor for over five years,
and the Employer desires to assure the continued service of the Employee for an
extended period, and the Bank is the wholly owned subsidiary of the Employer.
NOW THEREFORE, the parties agree as follows:
1. The Employer agrees to employ, and the Employee agrees to be employed by the
Employer, under the terms and conditions set forth in this Agreement. For
all purposes of this Agreement, the Employer and the Bank shall include
their successors and assigns, whether by merger, acquisition, purchase or
any other means or method of consolidation. The parties intend that the Bank
shall satisfy all financial, compensation, employee benefit, supplemental
retirement payment and severance payment obligations under this agreement,
without, however, releasing the Employer from such obligations in the event
the Bank shall fail to fulfill them or any of them.
2. The Employee shall serve as the Chairman and Chief Executive Officer of the
Employer for the entire term of this Agreement, as hereinafter set forth. As
Chairman and Chief Executive Officer, the Employee shall serve as the senior
executive officer of the Employer, to whom all other officers and employees
of the Employer shall directly or indirectly report and be responsible. The
Employee shall report and be responsible solely to the Board of Directors of
the Employer.
3. The initial term of this Agreement shall be three (3) years commencing on
July 1, 1995 ("Commencement Date"), and expiring on June 30, 1998. Each
year, prior to the anniversary of the Commencement Date, the board of
Directors of the Employer shall formally extend, or refuse to extend this
Agreement for one (1) additional year. If the Board of Directors of the
Employer formally decides not to extend this Agreement, the Board shall also
formally decide and resolve whether or not it elects to retain the services
of the Employee for the remaining two (2) year term of this Agreement. If
the Board resolves to retain the services of the Employee for the remaining
two (2) year term of the Agreement, all terms and conditions of the
Agreement shall remain in full force and effect for the remaining two (2)
year term of this Agreement, and the provisions of section 7 hereof shall
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apply at the expiration of the term of the Agreement. If the Board resolves
not to retain the Employee's services for
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such two (2) year period, the provisions of section 7 shall apply
immediately.
4. Beginning as of the Commencement Date, Employee shall be paid, by the
Employer directly a base salary of two hundred eighteen thousand dollars
($218,000). The Board of Directors of the Employer shall have the discretion
to increase the Employee's base salary, at any time and from time to time.
Any such increase shall reflect the Employee's contribution to the financial
and business performance of the Employer during the preceding period.
5. In addition to his base salary, the Employee shall participate in each
compensation, employee benefit and fringe benefit program provided directly
or indirectly by the Employer to its employees including without limitation,
each bonus, stock grant, stock option, stock purchase, retirement, insurance
and welfare plan or program. The Employee's participation in each such plan
or program shall be in accordance with the terms and provisions thereof as
generally applicable to all participants. In addition, the Employee shall be
provided with an automobile, subject to any income and payroll tax reporting
and withholding relating thereto, and the Employee shall be entitled to
participate in the supplemental retirement program described in the next
section.
6. The Employee shall be eligible to participate in and benefit from a
supplemental retirement program ("SRP") as described in this section. The
SRP shall provide supplemental retirement and tax deferral benefits to the
extent benefits under the Xxxxxx Chartered Bancorp, Inc. Retirement and
Thrift Plan or any successor plan (the "Plan") are limited by provisions of
the Internal Revenue Code, ERISA, or any other applicable law or regulation
(the "Limitations").
The SRP shall provide to the Employee an annual profit-sharing contribution
equal to the excess of the amount that would have been contributed for the
Employee under the Plan absent the Limitations, over the amount actually
contributed to the Plan. The SRP will also permit the Employee to defer from
his eligible compensation, as defined in the Plan, a dollar amount equal to
the excess he could have deferred under the 401(k) feature of the Plan,
absent the Limitations, over the amount he actually deferred under that
plan; provided however, that the Employee has deferred the maximum amount
permitted by the Limitations. The SRP will also provide, with respect to the
supplemental deferral described in the previous sentence, a matching
contribution equal to the matching contribution that the Plan would have
provided if the supplemental deferral had been made into the 401(k) feature
of the Plan.
The SRP shall be an account maintained on the books of the Employer on
behalf of the Employee which shall include each of the amounts described in
the preceding paragraph for each year of employment under this Agreement.
Each of such amounts shall be recorded in the SRP at the same time it would
have been paid or credited to the Employee's accounts under the Plan. The
Employee's Account under the SRP shall be credited with earnings equal to
the Chase Bank prime rate in effect from time to time, at the same time that
earnings would be credited under the Plan. Although the SRP is a
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bookkeeping account maintained by the Employer to record its supplemental
retirement liability to the Employee, the Employer may create a reserve or a
fund to cover some or all of such liability. However, any such reserve or
fund shall at all times be subject to the claims of creditors of the
Employer. Benefits under the SRP shall be paid solely from the general
assets of the Employer, and the Employee shall be a general unsecured
creditor of the Employer with respect to the Employer's liability to the
Employee under the SRP.
Benefits under the SRP shall be fully vested at all times and shall be paid
to the Employee in the same manner and at the same time as benefits shall be
paid to the Employee from the Plan.
7. Upon termination of the employment of the Employee under this Agreement, for
any reason other than death, disability, termination for cause, voluntary
resignation by the Employee, or retirement at age 65, the Employer shall pay
the Employee a severance payment in the amount equal to two times the
highest total compensation received by the Employee in any one of the three
years preceding such termination. In addition, the Employer shall continue,
at no cost to the Employee, coverage under the medical welfare plans in
which he and his dependents participated prior to the termination, for a
period of 18 months following the date such coverage would otherwise have
expired due to the termination.
For purposes of this section, "total compensation" means the sum of base
salary, bonus, other compensation such as stock grants, profit-sharing and
matching contributions under the Plan , and the amount credited to the
Employee's SRP account.
"Termination" shall include:
(i) Any merger, acquisition or change of control of the Employer to which the
Employee does not consent in writing, with "change of control" meaning
acquisition by any person or group of persons (other than shareholders of the
Employer on the effective date of this Agreement) of fifty percent (50%) or
more of the beneficial ownership of the voting stock of the Employer;
(ii) Failure to extend the term of this Agreement as provided in section 3
hereof; and
(iii) "Termination in fact" which shall mean any action or failure to take
action by the Employer as defined in section 1 hereof to employ the Employee as
the Chief Executive Officer of the Employer or other entity which in fact
controls the operation of the business or businesses which comprise the Employer
as defined in section 1 hereof.
"Termination for cause" shall mean a termination of the Employee's employment by
the Employer on account of:
(i) a material breach by the Employee of his obligations to the Employer;
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(ii) material Employment of the Employee by another employer or material
competition by the Employee against the Employer while employed by the
Employer;
(iii) a material act of dishonesty or disloyalty or a breach of trust or a
willful neglect or injurious act against the Employer; and
(iv) conviction of the Employee of a felony.
Payment of the severance payment shall be made in four (4) equal annual
installments commencing on the first anniversary of the date of termination of
the Employee; provided, however, that by written request not later than thirty
(30) days after the date of termination, the Employee may require that the
Employer pay the entire severance payment in a single lump sum on the first
anniversary of the date of termination.
Upon termination of the Employee's employment and payment to the Employee of all
amounts he earned while employed under this Agreement and of all amounts to
which he is entitled under the Plan, the SRP and this section, the Employee
shall have no right to any continued compensation or benefits from the Employer,
except as otherwise provided by law (e.g., COBRA health coverage continuation
rights).
8. Notices to be given to the parties shall be sent first class mail or
facsimile to the above addresses.
9. This Agreement shall be binding upon and enforceable by the parties hereto,
and their heirs, executors, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
XXXXXX CHARTERED BANCORP, INC.
by:/s/ Xxxxxx Xxxxxx
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Signature
Xxxxxx Xxxxxx,Chairman,Personnel/CompensationCommittee
Print Name and Title
FIRST NATIONAL BANK OF THE XXXXXX VALLEY
by:/s/ Xxxxxx Xxxxxx
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Signature
Xxxxxx Xxxxxx,Chairman,Personnel/Compensation Committee
-------------------------------------------------------
Print Name and Title
/s/ X.X. Xxxxxxxxxx III
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T. Xxxxxxxxx Xxxxxxxxxx III
19466
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