FINANCIAL INSTITUTION EXECUTIVE'S AGREEMENT
Agreement
AGREEMENT made this 8th day of December 2005, by and between SOUND FEDERAL
SAVINGS, which has its principal office at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxx Xxxxxx, Xxx Xxxx (hereinafter referred to as the "Bank") and XXXXXXX X.
XxXXXXXXXX (hereinafter referred to as the "Employee"). Any reference herein to
"Company" shall mean Sound Federal Bancorp, Inc., a Delaware corporation, or any
successor thereto.
Witnesseth:
WHEREAS, the Employee is President and Chief Executive Officer of the Bank
and has developed an intimate and thorough knowledge of the Bank's business
methods and operations; and
WHEREAS, the retention of the Employee's services for and on behalf of the
Bank is of material importance to the preservation and enhancement of the value
of the Bank's business; and
WHEREAS, the Employee is presently employed under an employment agreement
entered into on December 31, 1997, amended, on January 20, 1999 (the "Prior
Agreement"); and
WHEREAS, the Bank and the Employer desires to further revise such
employment agreement to bring the Prior Agreement into compliance with Section
409A of the Internal Revenue Code (the "Code").
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the Bank and the Employee agree as follows:
Section 1. Employment Term. The Bank employs the Employee as President and
Chief Executive Officer and the Employee accepts this employment and agrees to
render services to the Bank on the terms and conditions set forth in this
Agreement. Commencing on January 1, 2006 (the "Anniversary Date" of the Prior
Agreement), and continuing at each Anniversary Date thereafter, the Agreement
shall renew for an additional year such that the remaining term shall be three
(3) years unless written notice is provided to Executive at least ten (10) days
and not more than sixty (60) days prior to any such Anniversary Date, that his
employment shall cease at the end of thirty-six (36) months following such
Anniversary Date. Prior to each notice period for non-renewal, the Board of
Directors ("Board") of the Bank will conduct a comprehensive performance
evaluation and review of the Executive for purposes of determining whether to
extend the Agreement, and the results thereof shall be included in the minutes
of the Board's meeting.
Section 2. Duties. The Employee shall perform executive services for the
Bank as may be consistent with the Employee's title, along with those other
duties that may be assigned from time to time by the Bank's Board of Directors.
During this Agreement's term, the Employee's full business time and best efforts
shall be devoted to the affairs and business of the Bank, as is customarily
required for the position of President and Chief Executive Officer. The services
of the Employee shall be rendered principally in White Plains, New York but the
Employee shall do any traveling and render services at such other present or
future offices on behalf of the Bank as may be reasonably required.
Section 3. Restricted Activities. The Employee agrees that during
employment, except with the express consent of the Bank's Board of Directors,
the Employee will not, directly or indirectly, engage or participate in, become
a director of, or render advisory or other services for, or in connection with,
or become interested in, or make any financial investment in any firm,
corporation, business entity or business enterprise competitive with any
business of the Bank; provided, however, that the Employee shall not be
precluded or prohibited from owning passive investments, including investments
in the securities of other financial institutions, so long as ownership does not
require the Employee to devote substantial time to management or control of the
other business or activities in which the Employee has invested.
Section 4. Remedies. The Employee agrees and acknowledges that by virtue of
this employment, the Employee will obtain and maintain an intimate knowledge of
the Bank's activities and affairs, including trade secrets and other
confidential matters. As a result, and also because of the special, unique and
extraordinary services that the Employee is capable of performing for the Bank
or one of its competitors, the Employee recognizes that the services to be
rendered are of a character giving them a peculiar value, the loss of which
cannot be adequately or reasonably compensated for by damages. The Employee
agrees that if the Employee fails to render to the Bank the services required,
the Bank shall be entitled to immediate injunctive or other equitable relief to
restrain the Employee, in addition to any other remedies to which the Bank may
be entitled under law.
Section 5. Compensation. The Bank will compensate and pay the Employee for
the Employee's services during this Agreement's term a minimum base salary of
Two Hundred Sixty- Five Thousand Dollars ($265,000) for the year ending December
31, 2006. Subsequent annual salary in amounts determined by the Bank's Board of
Directors from year to year shall be memorialized by a duly executed Addendum to
be appended hereto.
Section 6. Vacation. The Employee shall be entitled to a vacation of four
(4) weeks per calendar year, arranged to coordinate with the Employee's duties.
If for any reason the Employee's full entitlement is not taken in any calendar
year, the unused portion thereof shall be lost or deemed waived. The Employee
shall also be entitled to observe holidays on which the Bank is closed.
Section 7. Benefits. The Employee shall be entitled to participate in any
Bank plan relating to pension, profit sharing, or other retirement benefits,
along with any medical, dental, and life insurance coverage or reimbursement
plans that the Bank may adopt for its employees. The Employee shall be permitted
to participate in the Bank's medical, dental, and life insurance coverage and
reimbursement plans to the extent that such plans exist and as constituted from
time to time until the Employee's death; provided, however, that if the
employment of the Employee is terminated by the Employee for "good reason" (as
defined in Section 11(g) hereof) or by the Bank other than for "just cause" (as
defined in Section 11(a) hereof) prior to the attainment of age 70, he shall be
entitled to participate in such plans until age 70, to the same extent as set
forth in Section 11(l) hereof
Section 8. Disability. (a) If the Employee shall become disabled or
incapacitated to the extent that the Employee is unable to perform the duties of
President and Chief Executive Officer, the Employee shall continue to receive
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the following percentages of compensation, exclusive of any benefits which may
be in effect for Bank employees under this Agreement's Section 7 for the
following periods of the Employee's disability: 100 percent for the first six
(6) months, and 60 percent thereafter for this Agreement's remaining term. Upon
returning to active service on a full-time basis, the Employee's full
compensation shall be reinstated on a "go forward" basis. Should the Employee
return to active employment on other than a full-time basis, then the Employee's
compensation for the remainder of the then existing term of employment, as set
forth in Section 5, shall be reduced on such terms as the Bank's Board of
Directors shall determine.
(b) There shall be deducted from the amounts paid to the Employee under
this Section during any period of disability any amounts actually paid to the
Employee pursuant to any disability insurance, workers' compensation or other
similar program that the Bank has instituted or may institute on behalf of its
employees for the purpose of compensating the Employee for a disability,
including those payable under disability insurance policies covering the
Employee issued by Commercial Union Insurance Company or any successor issuer(s)
or policies, but the Bank shall continue the program of reimbursement and
payment of premiums as previously conducted.
(c) For purposes of this Agreement, and except to the extent prohibited by
Code Section 409A, the Employee shall be deemed disabled or incapacitated if the
Employee, due to physical or mental illness, shall have been absent from duties
with the Bank on a full-time basis for thirty (30) days provided, that, if the
Employee shall not agree with a determination to terminate the Employee because
of disability or incapacity, the question of the Employee's ability shall be
submitted to an impartial and reputable physician selected by the parties and
such physician's determination regarding disability or incapacity shall be final
and binding.
Section 9. Stock Options. During this Agreement's term, the Employee will
be entitled to participate in and receive the benefits of any stock option,
profit sharing, or other plans, benefits, and privileges given to employees and
executives of the Bank or its subsidiaries and affiliates that may come into
existence to the extent commensurate with the Employee's then duties and
responsibilities, as fixed by the Bank's Board of Directors or any Committee of
the Board or of the Bank selected for this purpose; and, to the extent the
Employee is otherwise eligible and qualifies, to so participate in and receive
these benefits or privileges. The Bank shall not make any changes in these
plans, benefits or privileges that would adversely affect the Employee's rights
or benefits unless the change occurs pursuant to a program applicable to all
Bank executive officers and does not result in a proportionately greater adverse
change in the rights of or benefits to the Employee as compared with any other
Bank executive officer. Nothing paid to the Employee 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 Employee pursuant to Section 5.
Section 10. Expenses. The Bank shall reimburse the Employee or otherwise
provide for or pay for all reasonable expenses incurred by the Employee in
furtherance of, or in connection with, the Bank's business, including, but not
by way of limitation, automobile and traveling expenses and all reasonable
entertainment expenses whether incurred at the Employee's residence, while
traveling, or otherwise, subject to reasonable limitations as may be established
by the Bank's Board of Directors, provided these expenses are deductible by the
Bank for federal income taxation purposes. If these expenses are paid in the
first instance by the Employee, the Bank will reimburse the Employee.
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Section 11. Termination. (a) (1) The Bank's Board of Directors may
terminate the Employee's employment at any time, but any termination by the
Bank's Board of Directors other than termination for just cause, shall not
prejudice the Employee's right to compensation or other benefits under the
Agreement. The Employee shall have no right to receive compensation or other
benefits for any period after termination for just cause. Termination for just
cause shall include termination because of the Employee's 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, or material breach of any provision of this
Agreement.
(2) If the Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(3) and (g)(1)) the Bank's obligations under this Agreement shall be
suspended as of the date of service unless stayed by appropriate proceedings. If
the charges in the notice are dismissed, the Bank may in its discretion (i) pay
the Employee all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
(3) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(4) or (g)(1)), all obligations of the Bank under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
(4) If the Bank is in default (as defined in section 3(x)(l) of the Federal
Deposit Insurance Act), all obligations under this Agreement shall terminate as
of the date of default, but this paragraph (b)(4) shall not affect any vested
rights of the contracting parties.
(5) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank:
(i) by the Director or his or her designee, at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide
assistance to or on behalf of the Bank under the authority contained in
section 13(c) of the Federal Deposit Insurance Act; or
(ii) by the Director or his or her designee, at the time the Director
or his or her designee approves a supervisory merger to resolve problems
related to operation of the Bank or when the Bank is determined by the
Director to be in an unsafe or unsound condition.
Any rights of the parties hereto that have already vested, however, shall not be
affected by such action.
(b) In the event employment is terminated for just cause pursuant to
Section 11(a), the Employee shall have no right to compensation or other
benefits for any period after the termination date. If the Employee is
terminated by the Bank other than for just cause pursuant to Section 11(a) the
Employee's right to compensation and other benefits shall be as set forth in
Section 11(k). If employment is terminated for just cause, the Employee shall
have the right, at the Employee's sole option, to appear at the next scheduled
regular or special meeting of the Bank's Board of Directors at which a quorum of
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the Board is present so that the Board may hear argument from the Employee or
counsel or both and reconsider the termination. The Board of Directors shall
deliver to the Employee its reconsidered determination in writing within twenty
(20) days after the meeting. This procedure shall not prejudice the rights of
either party under Section 20.
(c) The Employee shall have the right, upon prior written Notice of
Termination of not less than thirty (30) days and that otherwise satisfies the
requirements of Section 11(h), to terminate employment, but in this event, the
Employee shall have no right after the termination date to compensation or other
benefits as provided in this Agreement, unless the termination is for good
reason, as defined, pursuant to Section 11(g).
(d) All obligations under this Agreement may be terminated: (i) by the FDIC
or successor or other regulatory agency at the time such agency enters into an
agreement to provide assistance to or on behalf of the Bank; and (ii) by the OTS
or successor or other regulatory agency at the time that such agency approves a
supervisory merger to resolve problems related to the Bank's operations or when
the Bank is determined by the OTS or other agency to be in an unsafe or unsound
condition, but the Employee's rights to compensation earned as of that date
shall not be affected.
(e) If the Bank is in default, as defined to mean an adjudication or other
official determination by a court of competent jurisdiction or other public
authority pursuant to which a conservator, receiver, or other legal custodian is
appointed for the Bank for liquidation purposes, all obligations under this
Agreement shall terminate as of the date of default, but the Employee's rights
to compensation earned as of the termination date shall not be affected.
(f) In the event that the Employee is terminated in a manner that violates
the provisions of Section 11(a), as determined by arbitration in accordance with
Section 20, the Employee shall be entitled to reimbursement for all reasonable
costs, including attorney's fees, in challenging the termination. This
reimbursement shall be in addition to all rights to which the Employee is
otherwise entitled under this Agreement. Notwithstanding the above, the Employee
shall be entitled to indemnification from the Bank consistent with the
indemnification permitted by the OTS Rules and Regulations for Federal
Associations, codified at 12 C.F.R. Sec. 545.121, and to the full extent
contemplated by the Bank's Bylaws. In addition, if the Employee serves as a
director, officer, or employee of any affiliate of the Bank, the Employee shall
be entitled to indemnification and exculpation from liability to the full extent
permitted by applicable law, and the Bank agrees to cause all necessary
provisions to be included in, or changes made to, the Articles of Incorporation
or Bylaws of these affiliates required to accomplish this.
(g) The Employee may terminate employment for good reason. For purposes of
this Agreement, "good reason" shall mean: (1) a failure by the Bank to comply
with any material provision of this Agreement, which failure has not been cured
within ten (10) days after a notice of noncompliance has been given by the
Employee to the Bank; or (2) any purported termination of the Employee's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 11(h).
(h) Any termination of the Employee's employment by the Bank or by the
Employee shall be communicated by written Notice of Termination to the other
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party only after any applicable grace period's expiration that may be set forth
in this Agreement. For purposes of this Agreement, a "Notice of Termination"
shall mean a dated notice which shall: (1) indicate the specific termination
provision in the Agreement relied upon; (2) set forth in reasonable detail the
facts and circumstances claimed to provide a basis for the Employee's employment
termination under the provision so indicated; (3) specify a termination date
which shall be not less than fifteen (15) days nor more than thirty (30) days
after a Notice of Termination is given, except in the case of the Bank's
termination of the Employee's employment for just cause pursuant to Section
11(a), for which the Notice of Termination must specify that the termination is
effective immediately; and (4) be given in the manner specified in Section 14.
(i) (1) If the Employee shall terminate employment for good reason pursuant
to 11(g) or if the Bank terminates the Employee other than for just cause, then
in lieu of any further salary payments to the Employee for periods subsequent to
the termination date, the Bank shall pay as severance to the Employee an amount
equal to: three (3) times the Employee's average annual compensation (computed
on the basis of the most recent five (5) taxable years) paid to the Employee and
includable in the Employee's gross income for federal income tax purposes on the
date on which the termination occurs, this payment to be made in a lump sum on
or before the thirtieth (30) day following the termination date. However, in the
event the Employee is considered a Specified Employee as provided in Section
11(n), this lump sum payment will be made no earlier than the first day of the
seventh month following the effective date of the Employee's Separation from
Service, as defined in Section 11(m).
(2) Notwithstanding any other provision of this Agreement, in the event of
a Change in Control as provided in Section 11(j), the Bank shall pay to the
Employee an amount equal to: three (3) times the Employee's average annual
compensation (computed on the basis of the most recent five (5) taxable years)
paid to the Employee and includable in the Employee's gross income for federal
income tax purposes, with such payment to be made in a lump sum on the effective
date of the Change in Control.
(3) If for any reason the basis for termination of this Agreement or
payment of amounts under this Section is disputed by either party to this
Agreement or any other person or agency, then pending resolution of any dispute,
within three (3) months after the due date of the payment, the Bank shall
deliver the entire amount calculated in accordance with this Section to an
independent trustee to hold in an interest bearing account in trust for the
benefit of the Employee and the Bank, whichever may be ultimately entitled to
the same. The trustee shall be a bank or savings institution other than the
Bank, with deposits of at least $250,000,000, unrelated to any parties in the
dispute, and disinterested in any transaction arising out of or engendering the
dispute. If the parties are unable to agree upon a trustee within this time
period, then either party may seek immediate relief from a court of competent
jurisdiction without the necessity of first resorting to arbitration under
Section 20. In addition, the Bank agrees that the Employee would have no
adequate remedy at law for breach of these obligations, and the Employee shall
be entitled to immediate injunctive and other appropriate equitable relief to
enforce the same without the necessity of first resorting to arbitration under
Section 20.
(4) Any payments made to the Employee pursuant to this Agreement or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section
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1828(k) and any regulations promulgated thereunder. Notwithstanding anything to
the contrary herein, the Employee shall only be entitled to a payment under the
first to occur of (i)(1) or (i)(2) above. Payments under one of these
alternatives shall preclude any payments under the other.
(j) For purposes of this Agreement, a Change in Control of the Company or
the Bank shall mean (i) a change in ownership of the Company or the Bank under
paragraph (1) below, or (ii) a change in effective control of the Company or the
Bank under paragraph (2) below, or (iii) a change in the ownership of a
substantial portion of the assets of the Company or the Bank under paragraph (3)
below:
(1) Change in the ownership of the Company or the Bank. A change in the
ownership of the Company or the Bank shall occur on the date that any one
person, or more than one person acting as a group (as defined in Proposed
Treasury Regulation Section 1.409A-3(g)(5)(v)(B) or subsequent guidance),
acquires ownership of stock of the corporation that, together with stock held by
such person or group, constitutes more than 50 percent of the total fair market
value or total voting power of the stock of such corporation.
(2) Change in the effective control of the Company or the Bank. A change in
the effective control of the Company or the Bank shall occur on the date that
either (i) any one person, or more than one person acting as a group (as defined
in Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B) or subsequent
guidance), acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) ownership of
stock of the corporation possessing 35 percent or more of the total voting power
of the stock of such corporation; or (ii) a majority of members of the
corporation's board of Directors is replaced during any 12-month period by
Directors whose appointment or election is not endorsed by a majority of the
members of the corporation's board of Directors prior to the date of the
appointment or election, provided that this sub-section (ii) is inapplicable
where a majority shareholder of the Company or the Bank is another corporation.
(3) Change in the ownership of a substantial portion of the Company's or
the Bank's assets. A change in the ownership of a substantial portion of the
Company or the Bank's assets shall occur on the date that any one person, or
more than one person acting as a group (as defined in Proposed Treasury
Regulation Section 1.409A-3(g)(5)(v)(B) or subsequent guidance), acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the corporation that have a
total gross fair market value equal to or more than 40 percent of the total
gross fair market value of (i) all of the assets of the Company or the Bank, or
(ii) the value of the assets being disposed of, either of which is determined
without regard to any liabilities associated with such assets.
(4) For all purposes hereunder, the definition of Change in Control shall
be construed to be consistent with the requirements of Proposed Treasury
Regulation Section 1.409A-3(g) or subsequent guidance, except to the extent that
such proposed regulations are superseded by subsequent guidance.
(k) The Employee shall not be required to mitigate the amount of any
payment provided for in Section 11(i)(1) by seeking other employment or
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otherwise. No other employment or compensation from other sources or employers
shall affect or reduce the amounts or obligations of the Bank to make payments
or provide the benefits or arrangements to the Employee under this Agreement.
(l) Notwithstanding any provision in this Agreement, in the event of
termination by the Employee for "good reason" or by the Bank other than for just
cause, or in the event of a change in control, all then existing medical,
dental, life insurance, and other applicable benefit plans shall continue in
force for the Employee's benefit at the Bank's sole cost and expense until the
employee attains the age of 70 years, provided, however, that if the Employee
shall subsequently receive equivalent medical or dental coverage from a new
employer, the Bank shall no longer be obligated to continue to provide such
coverage.
(m) "Separation from Service" shall mean, consistent with Code Section
409A(2)(a)(i), the Employee's death, retirement, or termination of employment.
No Separation from Service shall be deemed to occur due to military leave, sick
leave or other bona fide leave of absence if the period of such leave does not
exceed six months or, if longer, so long as the Employee's right to reemployment
is provided by law or contract. If the leave exceeds six months and the
Employee's right to reemployment is not provided by law or by contract, then the
Employee shall be have a Separation from Service on the first date immediately
following such six-month period. The Employee shall not be treated as having a
Separation from Service if the Employee provides more than insignificant
services for the Company and Bank following the Employee's actual or purported
termination of employment with the Company and Bank. Services shall be treated
as not being insignificant if such services are performed at an annual rate that
is at least equal to 20 percent of the services rendered by the Employee for the
Company and Bank, on average, during the immediately preceding three full
calendar years of employment (or if employed less than three years, such shorter
period of employment) and the annual base compensation for such services is at
least equal to 20 percent of the average base compensation earned during the
final three full calendar years of employment (or if employed less than three
years, such shorter period of employment). Where the Employee continues to
provide services to a previous employer in a capacity other than as an employee,
a Separation from Service will not be deemed to have occurred if the Employee is
providing services at an annual rate that is 50 percent or more of the services
rendered, on average, during the immediate preceding three full calendar years
of employment (or if employed less than three years, such lesser period) and the
annual base compensation for such services is 50 percent or more of the annual
base compensation earned during the final three full calendar years of
employment (or if less, such lesser period).
(n) "Specified Employee" shall mean a "key employee" of a publicly traded
company, as defined in Code Section 416(i) or, if different, within the meaning
of Code Section 409A and the Proposed Regulations or other guidance issued
thereunder.
Section 12. Other Benefits. Notwithstanding anything to the contrary, the
payment or obligation to pay any monies, or granting of any rights or privileges
to the Employee as provided in this Agreement shall not be in lieu or derogation
of the rights and privileges that the Employee now has under any plan or benefit
presently outstanding.
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Section 13. Agreement Changes. This Agreement may not be modified, changed,
amended, or altered except in writing, signed by the Employee or by the
Employee's duly authorized representative, and by a duly authorized Bank officer
or Chairman of the Bank's Board of Directors.
Section 14. Notices. All notices given or required to be given shall be in
writing, sent by United States first-class certified or registered mail, return
receipt requested postage prepaid, to the Employee or to the Employee's spouse
or estate upon the Employee's death at the Employee's last-known address, and to
the Bank at its principal office. All notices shall be effective when deposited
in the mail in the manner specified in this Section. Either party by a notice in
writing may change or designate the place for receipt of all notices.
Section 15. Waiver of Rights. No course of conduct between the Bank and the
Employee and no delay or omission of the Bank or the Employee to exercise any
right or power given under this Agreement shall: (i) impair the subsequent
exercise of any right or power; or (ii) be construed to be a waiver of any
default or any acquiescence in or consent to the curing of any default while any
other default shall continue to exist, or be construed to be a waiver of a
continuing default or of any other right or power that shall have arisen; and
every power and remedy granted by law and by this Agreement to any party may be
exercised from time to time, and as often as may be deemed expedient. All of the
rights and powers shall be cumulative to the fullest extent permitted by law.
Section 16. Prior Agreements. This Agreement supersedes any and all prior
Employment Agreements written or verbal, between the parties all of which are
canceled.
Section 17. Successors. This Agreement shall inure to the benefit of and be
binding upon the Employee, and, to the extent applicable, the Employee's heirs,
assigns, executors, and personal representatives, and upon the Bank, its
successors, and assigns, including, without limitation, any person, partnership,
or corporation that may acquire all or substantially all of the Bank's assets
and business, or with or into which the Bank may be consolidated or merged, and
this provision shall apply in the event of any subsequent merger, consolidation,
or transfer unless a merger or consolidation or subsequent merger or
consolidation is a transaction of the type that would result in termination
under sections 11(e) and 11(f).
Section 18. Assignment. This Agreement is personal to each of the parties
and neither party may assign or delegate any of its rights or obligations under
this Agreement without the prior written consent of the other party.
Section 19. Applicable Law. This Agreement shall be governed in all
respects and be interpreted by and under the laws of the State of New York,
except to the extent that the law may be preempted by applicable federal law,
including regulations, opinions, or orders duly issued by the OTS or FDIC or
successor or other regulatory agency ("Federal Law"), in which event this
Agreement shall be governed and be interpreted by and under Federal Law.
Section 20. Arbitration. Except as otherwise expressly provided elsewhere
in this Agreement, in the event that any dispute should arise between the
parties as to the meaning, effect, performance, enforcement, or other issue in
connection with this Agreement, which dispute cannot be resolved by the parties,
except the question of Employee's disability under Section 8(c), the dispute
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shall be decided by final and binding arbitration of a panel of three
arbitrators who shall be present or former executives of Federal savings
institutions located in the United States. Proceedings in arbitration and its
conduct shall be governed by the rules of the American Arbitration Association
("AAA") applicable to commercial arbitrations (the "Rules") except as modified
by this Section. The Employee shall appoint one arbitrator, the Bank shall
appoint one arbitrator, and the third shall be appointed by the two arbitrators
appointed by the parties. The third arbitrator shall be impartial and shall
serve as chairman of the panel. The parties shall appoint their arbitrators
within thirty (30) days after the demand for arbitration is served, failing
which the AAA promptly shall appoint a defaulting party's arbitrator, and the
two arbitrators shall select the third arbitrator within fifteen (15) days after
their appointment, or if they cannot agree or fail to so appoint, then the AAA
promptly shall appoint the third arbitrator. The arbitrators shall render their
decision in writing within thirty (30) days after the close of evidence or other
termination of the proceedings by the panel, and the decision of a majority of
the arbitrators shall be final and binding upon the parties, nonappealable,
except in accordance with the Rules and enforceable in accordance with the
Uniform Arbitration Act in force in the State of New York or any applicable
successor legislation. Any hearings in the arbitration shall be held in the City
of White Plains, New York unless the parties shall agree upon a different venue,
and shall be private and not open to the public. Each party shall bear the fees
and expenses of its arbitrator, counsel, and witnesses, and the fees and
expenses of the third arbitrator shall be shared equally by the parties. The
costs of the arbitration, including the fees of AAA, shall be borne as directed
in the decision of the panel.
Section 21. Separability. If for any reason, any section or portion of this
Agreement shall be held by a court to be invalid or unenforceable, it is agreed
that this shall not affect any other section or portion of this Agreement.
Section 22. Source of Payments. All payments provided in this Agreement
shall be timely paid in cash or check from the general funds of the Bank. The
Company, however, guarantees payment and provisions of all amounts and benefits
due hereunder to Employee and, if such amounts and benefits due from the Bank
are not timely paid or provided by the Bank, such amounts and benefits shall be
paid or provided by the Company.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
ATTEST: SOUND FEDERAL SAVINGS
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxx
---------------------- --------------------
WITNESS: EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. XxXxxxxxxx
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